From Vision to Action to Vision From

FROM VISION t O actION UEM LAND HOLDINGS BERHAD ANNUAL REPORT 2008

FROM VISION TO ACTION TO VISION FROM

UEM LAND HOLDINGS BERHAD ANNUAL REPORT 2008 ANNUAL REPORT BERHAD HOLDINGS UEM LAND

UEM LAND HOLDINGS BERHAD 830144-W UEM LAND HOLDINGS BERHAD Corporate Directory

FROM VISION TO ACTION Corporate HeadquaRters BUSINESS OFFICE, Long before the southern span of Johor was given a second glance as an SALES AND MARKETING economic region, we had trained our sights on it. Seen the possibilities. 16-1 Mercu UEM OPERATIONS Appraised the strengths. Sensed and understood the potential. Jalan Stesen Sentral 5 Kuala Lumpur Sentral Nusajaya Centre Prodded by our own sure sense of belief, we took what began as a vision 50470 Kuala Lumpur No. 8, Ledang Heights and nurtured it to full flight. Malaysia 79100 Nusajaya Johor Darul Ta’zim TEL +603-2727 6000 Malaysia Looking back at what had been in our mind’s eye, is today the unfolding FAX +603-2727 2000 of that one unwavering focus. Nusajaya. www.uemland.com TEL +607-277 3700 FAX +607-277 3701 www.nusajayacity.com Picture on Cover A bird’s eye view of current developments in Nusajaya, with Puteri Harbour waterfront development in the foreground and a completed Johor State New Puteri Harbour Administrative Centre (“JSNAC”) in part of the background. Satellite Clubhouse Lot PTD141090 79100 Nusajaya Johor Darul Ta’zim Malaysia

FIRST ANNUAL GENERAL MEETING TEL +607-530 2122 FAX +607-530 2125/2126 Date Wednesday, 10 June 2009 Horizon Hills Golf Time 10.30 a.m. & Country Club No. 1 Jalan Eka Horizon Hills Venue Grand Ballroom, 1st Floor 79100 Nusajaya Sime Darby Convention Centre Johor Darul Ta’zim 1A Jalan Bukit Kiara 1 Malaysia 60000 Kuala Lumpur TEL +607-232 3166 FAX +607-232 3919

Cahaya Jauhar Sdn Bhd 27 & 29, Jalan Indah 15/3 Bukit Indah 79100 Nusajaya Johor Darul Ta’zim Malaysia

TEL +607-235 0800 FAX +607-235 0890

Setia Haruman Sdn Bhd The Lodge 63000 Cyberjaya Selangor Darul Ehsan Malaysia

TEL +603-8312 8000 FAX +603-8312 8100 UEM LAND HOLDINGS BERHAD CONTENTS

004 Chairman’s Statement 008 Vision & Mission 024 Corporate Profile 025 Corporate Information 026 Corporate Structure 027 Milestones 028 Organisation Structure 030 Four-Year Financial Highlights 031 Four-Year Group Performance 032 2008 Group Quarterly Performance 033 Four-Year Financial Review of the Group 034 Simplified Group Balance Sheet 035 Statement of Value Added & Distribution 036 Employees & Productivity 037 Share Price & Volume Traded 041 Profile of Directors 045 Profile of Senior Management 048 MD/CEO Operations Review 054 Corporate Responsibility – Human Capital Development, QASHE, CRM & CSR 058 Media Highlights 060 Event Highlights 2008 – Corporate 062 Event Highlights 2008 – CSR 064 Corporate Governance Statement 069 Additional Compliance Information 070 Audit Committee Report 073 Statement on Internal Control 076 Risk Management 080 Financial Statements 144 Analysis of Shareholdings 149 Properties of UEM Land Holdings Group 150 Recurrent Related Party Transactions 152 Notice of First Annual General Meeting 154 Statement Accompanying Notice of The First Annual General Meeting Proxy Form Corporate Directory Through Nusajaya’s myriad international-class developments, it will become a city hub of the future – a fully integrated urban environment for business, industry, living and leisure. Borderless in its appeal, with every conceivable sophisticated infrastructure ahead of its time. l y a

The golf Precinct, Horizon Hills b nit o l mmu co CREATING CREATING A g Nusa Idaman UEM LAND HOLDINGS BERHAD CHAIRMAN’S STATEMENT

4 COMMENDABLE RESULTS IN A CHALLENGING ENVIRONMENT The financial and business conditions in 2008 were undoubtedly challenging. In spite of that, the financial performance of UEM Land Holdings for FY2008 has been commendable. The Group achieved a total revenue of RM511.6 million and profit after tax of RM75.1 million compared with RM1,871.5 million and RM529.7 million respectively in financial year ended 2007 (“FY2007”).

Although this is a decline from the previous financial year’s record results, the FY2008 financial performance has to be viewed in the light of a one-off land sale to Khazanah Nasional Berhad (“Khazanah”) in FY2007, which accounted for a revenue of RM1,430.4 million. After stripping out the effects from the Khazanah land sale in FY2007, UEM Land Holdings’ financial performance for FY2008 showed a commendable 16% increase in revenue from RM441.1 million (FY2007) and a 46% increase in profit after tax from RM51.5 million (FY2007).

We are mindful of our shareholders’ need for an income stream from their investments. However, the Board has not recommended a dividend for FY2008 as we would like to build sufficient reserves to take advantage of growth opportunities which may arise in the future.

The outlook for financial year 2009 (“FY2009”) remains uncertain, with global economies and demand expected to remain weak. However, we are cautiously optimistic that UEM Land Holdings, through its flagship development, Nusajaya, will be able to continue to capitalise on the growth potential of Iskandar Malaysia. The Dear Shareholders, Government’s second economic stimulus package will indirectly benefit Nusajaya, as RM1.7 billion of the RM10 billion earmarked It is my great pleasure to write to you in UEM Land Holdings Berhad’s for Khazanah will be used to implement development projects inaugural Annual Report and to present the Financial Statements in Iskandar Malaysia. for the financial year ended 31 December 2008 (“FY2008”). UEM Land Holdings Berhad (“UEM Land Holdings” or “the Company”), UEM Land Holdings will remain committed to create sustainable incorporated on 20 August 2008, made a successful debut on the shareholders’ value and meet our shareholders’ expectations. As part Main Board of Bursa Malaysia Securities Berhad on 18 November of the Group’s transparent performance management practice, we 2008. This resulted from a major restructuring exercise undertaken will continue to set appropriate performance targets for each operating by UEM Group Berhad (“UEM Group”) and UEM World Berhad to entity within the Group. For FY2009, UEM Land Holdings aspires reposition UEM Land Holdings as the property wing of the UEM Group to achieve the following Headline Key Performance Indicator of companies and to unlock value for our stakeholders, whilst enabling (KPI) targets: direct equity participation by the investing public in its exciting next phase of growth. • Revenue growth of 20% • Return on Equity (ROE) of 6%

NUSAJAYA – THE KEY DRIVER OF ISKANDAR MALAYSIA Iskandar Malaysia is one of the key catalysts, high impact developments and engines of growth identified under the Ninth Malaysia Plan (“9MP”). Nusajaya, the city at the heart of Iskandar Malaysia, will be the key driver for the successful development of this region into a strong, sustainable metropolis of international standing. UEM LAND HOLDINGS BERHAD

Nusajaya, spanning 23,875 acres, will become one of the largest and A Risk Management Committee, chaired by the Managing Director/ 5 most prestigious integrated urban developments in South East Asia. Chief Executive Officer, and comprising top management and senior UEM Land Berhad (“UEM Land”), the master developer of Nusajaya, executives with various functional responsibilities has been set up intends to develop Nusajaya into a model regional city which raises since 2006 to assist the Board in carrying out its responsibilities. the benchmark for integrated developments around the globe. From the inception of projects, risks are identified and appropriate With its current existing infrastructure, strategic location and potential actions will be implemented according to a systematic methodology to tap an Asian consumer market of more than 3 billion people within a formulated to address unacceptable risk return profiles. The risk six-hour flight radius, Nusajaya is a compelling investment proposition management systems and methodologies are continuously reviewed for far-sighted investors unperturbed by short-term volatility and who and enhanced to respond effectively to the constantly changing believe in the long-term prosperity of Asia. environment the Group is operating in.

As part of the strategy to achieve our vision of Nusajaya as “The World The outcome of this entire risk management process is thorough In One City” and the preferred destination for living, business and risk governance, which enables UEM Land Holdings to optimise leisure in South East Asia, UEM Land has entered into strategic risk return relationship for the Group’s investments and enhance alliances and collaboration arrangements with reputable international our shareholders’ value. In our move forward to become a global partners and investors like General Electric, Limitless, Damac and local player and to take the “UEM Land” and “Nusajaya” brands partners like Gamuda and United Malayan Land. Collaboration and international, our disciplined approach to risk management strategic partnerships allow us to tap into the best expertise and will strengthen our competitive edge. experience available and expedite the implementation of our projects.

As we progress through the current year, we expect to face increasing HUMAN CAPITAL AND ORGANIsATIONAL DEVELOPMENT competition due to slowing demand in a challenging economic Training and development of our human resources is a vital part environment. To differentiate ourselves from our competitors, UEM of the corporate culture in the Group and one of the focus areas of Land Holdings will continue to build brand awareness of Nusajaya our Group’s Value Creation Strategy. Human resource development, and utilise Integrated Brand Marketing Communication tools to as an integral part of organisational development, is a necessity in enhance the “Nusajaya” brand as a world class destination which an increasingly competitive business environment. will enrich the lives of its residents and visitors. In the medium to long term, the “Nusajaya” brand will showcase our ability to execute such Notwithstanding the economic uncertainties ahead, we will continue complex integrated projects globally and will feature prominently to allocate significant management and financial resources in FY2009 in our diversification programs of going forward into other areas to develop a highly skilled team with core values respected by the in Malaysia and overseas. business and social communities. We will continue to inculcate a learning culture and introduce best practices in learning to drive Nusajaya comprises eight unique signature projects, which will the Group’s financial performance in difficult times. catalyse the development of the region. These include: • Johor State New Administrative Centre (“JSNAC”) • Puteri Harbour Waterfront Development QUALITY assurance, OCCUPATIONAL SAFETY, health & • Southern Industrial and Logistics Clusters (“SiLC”) ENVIRONMENT (“QASHE”) • Afiat Healthpark At UEM Land Holdings, we continually strive to achieve higher • Educity standards of quality, workplace health and safety, whilst minimising • International Destination Resort any undesirable impact of our projects on the environment. • Nusajaya Residences comprising East Ledang, Horizon Hills, Ledang Heights and Nusa Idaman Strict quality control standards and procedures are applied along the • Medini entire development chain, from project conceptualisation to the timely delivery of the product to the customer. UEM Land Holdings has been Following the sale of some land parcels to Khazanah in 2007, certified with the upgraded MS ISO 9001:2008, an international the development of Educity, the International Destination Resort standard on Quality Management System and the upgraded and Medini is currently driven by Iskandar Investment Berhad. Occupational Health and Safety Advisory Service (“OHSAS”) 18001:2007, a standard on workplace safety and health. RISK MANAGEMENT Meanwhile, we have set up our Environmental Management System Risk management plays an integral role in our entire decision making (“EMS”) and are in the process of securing the MS ISO 14001:2004, process at all levels of the organisation. To address and manage a standard on EMS which is recognised worldwide. We are also risks, the Board of Directors (“Board”) has implemented an engaging the Building Authority of Singapore for Construction Quality Enterprise Wide Risk Strategy. Assessment System (“CONQUAS”) certification for selected projects. UEM LAND HOLDINGS BERHAD Chairman’s Statement

6 CUSTOMER RELATIONSHIP MANAGEMENT (“CRM”) Funds from the second stimulus package, earmarked for catalytic project development and infrastructure spending in Iskandar Malaysia UEM Land Holdings is fully committed to understanding its customers, will ensure continuity and viability of Nusajaya, as well as enhance the meeting their needs and expectations, and providing excellent customer valuation of our assets in the long term. service. To execute our commitment, the Group initiated a CRM project in 2008 to enhance customer satisfaction, increase customer At the operational level, the momentum of our activities will not be retention and improve perception. This allows the Company to fully deflected by the current economic downturn. We are putting in place integrate customer data in order for us to obtain better knowledge the necessary infrastructure in preparation for the next upsurge. and understanding of our customers, investors and business partners. Physical property development typically takes two to three years to This project, when fully implemented in early 2010, will not only enable come on stream to the market and it is likely that the economy would us to streamline our processes in servicing our customers better have turned around in that timeframe. but will also add further impetus to our ongoing image and brand

building efforts. In the immediate future, our focus is on ensuring that all the enablers are in place to realise our vision of developing Nusajaya into a model regional city, but looking ahead, we intend to grow UEM Land Holdings Our commitment to corporate Social Responsibility into an international player. With a healthy balance sheet and our ability (“CSR”) to access funding, we will capitalise on growth opportunities beyond As a responsible corporate citizen, UEM Land Holdings has a strong Nusajaya to create sustainable shareholder value. commitment to nation building at both the macro and micro level.

At the macro level, we align our efforts and resources with the ACKNOWLEDGEMENT aspiration of the nation as is apparent in our Nusajaya project. In On behalf of the Board of Directors, I warmly welcome Dato’ Ikmal collaboration with the Government, we endeavour to contribute to Hijaz Hashim who joined the Board on 1 March 2009 and Omar a balanced medium and long term socio economic development of Siddiq Amin Noer Rashid who joined the Board on 1 April 2009. the nation by attracting more local and foreign investments, as well The Group will undoubtedly benefit greatly from their invaluable as providing more employment and entrepreneurial opportunities experience, knowledge and business acumen. in the communities in which we have a presence. I would like to thank our stakeholders, shareholders, customers, At the micro level, we are committed to educating and giving back to business associates and partners for their contribution and continued the people in the local communities, ultimately enhancing the standard support in making 2008 a successful year for UEM Land Holdings. of living and the quality of lives in these communities. In 2008, UEM Land Holdings supported a wide spectrum of community needs I would like to express my appreciation to my fellow Directors for their like education, welfare, general social well being and environment invaluable counsel and business insights during the year, especially conservation. to Dato’ Ahmad Pardas Senin who will be retiring from the Board after more than 17 years of service in UEM Group. Last but not least, my We see education as a prime enabler in closing the existing socio utmost gratitude to our Management and staff for their unwavering economic gap prevalent in the Nusajaya communities and have dedication, commitment and hard work. therefore, intensified our CSR activities through our flagship education programs, which include the Promoting Intelligence, With your continued support, commitment and dedication, we will Nurturing Talent and Advocating Responsibility (“PINTAR”) navigate the economic turbulence together and achieve our vision Program for primary and secondary schools and the Pintar for the Company. Al-Quran Program for pre-schoolers.

OUTLOOK AND STRATEGIES – MANAGING UNCERTAINTIES The Malaysian economy is expected to grow by about 1% in 2009, compared with 4.6% in 2008 and 6.3% in 2007. To buffer the domestic economy from a prolonged global slowdown and alleviate the risk of recession, the Government has recently committed to a second economic stimulus package of RM60 billion. It is uncertain when we will see a sustainable recovery in the global economies, but we can expect that at some point, the unprecedented size of the stimulus packages by various Governments and the prevailing low global interest rates will start to have some positive impact on the economies when credit markets start functioning again and consumer confidence returns. UEM LAND HOLDINGS BERHAD

7 UEM LAND HOLDINGS BERHAD UEM LAND HOLDINGS BERHAD

NUSAJAYA A PICTORIAL UPDATE ON THE MAKING

8 OF A 21st 9 century city

PUTERI HARBOUR “Luxury’s New Attitude”, Puteri Harbour, is an integrated waterfront and marina development spanning 688 acres in Nusajaya, which will embrace an impeccable blend of commerce and leisure, business and pleasure. UEM LAND HOLDINGS BERHAD UEM LAND HOLDINGS BERHAD

1 JOHOR STATE NEW ADMINISTRATIVE CENTRE (“JSNAC”) 5 Nusa IdamaN A new administrative centre for the Johor State and Federal This hillside suburb provides an eco-friendly lifestyle which Government with state-of-the-art facilities dedicated to encourages interaction among residents and convenient efficiency and progress. accessibility to a multitude of modern facilities and services.

2 PUTERI HARBOUR m A l AySIA 6 sOuTHERN INdusTRIaL aNd LOGIsTICs CLusTERs (“siLC”) This waterfront precinct, ideally located for global and regional This “clean” and “green” industrial park supported by excellent

commerce and events, will shape the future perception of a S infrastructure will be the new gateway to Asia offering positive

E luxurious lifestyle. C revaluation potential for forward looking investors. O

3 HORIZON HILLS N 7 aFIaT HEaLTHpaRk

An exclusive gated residential and golf course development E The Afiat Healthpark will be a fusion of the entire range of medical

X 10 spanning 1,227 acres of land with emphasis on design P facilities, from the latest specialist medical care to traditional 11 R E Y quality, community and healthy lifestyle that puts safety S A complementary medicine and wellness. S W H PASIR GUDANG HIGHWAY W G and security foremost. HI A G Y N PASIR GUDA 8 LEdaNG HEIGHTs 4 EAST LEDANg A gated enclave of exclusive bungalows on 360 acres of rolling A prestigious gated residential enclave surrounded by hills with lake views and landscaped central park. JB PARKWAY landscaped parks and natural forest, this development enables a contemporary lifestyle which blends seamlessly with nature. AFIAT HEALTHPARK 7

NUSA 5 H JOHOR BAHRU IDAMAN ASTAL IGHWAY 6 CO CITY CENTRE SiLC 3 CIQ INTERNATIONAL CAUSEWAY HORIZON HILLS DESTINATION PORT OF RESORT TANJUNG LANGSAT CIQ PORT OF PASIR GUDANG EDUCITY

8 ELETAR E 1 S XPR JSNAC ES LEDANG SW HEIGHTS 2 AY 4 PUTERI (S L HARBOUR E EAST BUKIT TIMAH EXPRESSWAY (BKE) ) LEDANG RAMSAR SITE SUNGAI PULAI

SINGAPORE – JOHOR BAHRU RING ROAD

MEDINI

TAMPINES EXPRESSWAY ) JE (K Y CIQ D A OA W G R S IN S SINGAPORE R E U R R XP H JI E A KRAN STRAITS OF JOHOR B R SECOND LINK O H BRIDGE O J – E CIQ R O P CHANGI A INTERNATIONAL PORT OF TANJUNG G IN AIRPORT PELEPAS (PTP) S P AN -IS LA ND EX PRE ) SSWAY (PIE PAN-ISLAND EXPRESSWAY

AYER RAJAH EXPRESSWAY (AYE)

JURONG PORT CENTRAL BUSINESS

A DISTRICT EAST COAST PARKWAY

R P X E L RA NT CE

PORT OF SINGAPORE AUTHORITY STRAITS OF SINGAPORE STRAITS OF

MALACCA SENTOSA ISLAND UEM LAND HOLDINGS BERHAD UEM LAND HOLDINGS BERHAD

NUSAJAYA–A PICTORIAL UPDATE ON THE MAKING OF A 21st century city Puteri harbour

12 The luxurious appeal of Puteri 13 Harbour is unrivalled in the region. Regarded as the Jewel of Nusajaya, it will be developed into a world class integrated waterfront precinct and marina, offering unsurpassed luxurious waterfront living, dining, entertainment, arts and culture, with panoramic views of the Straits of Johor. Puteri Harbour will be spread over 688 acres of prime land and will include high end residential, commercial and retail properties, resorts, hotels, a convention centre, a 76-berth public marina and a 200-berth private marina for boats up to 90 meters, a mega yacht berthing terminal for boats up to 120 meters, a satellite clubhouse, a sales gallery and many other amenities. The public marina and satellite clubhouse have been completed and opened to the public since January 2009. UEM LAND HOLDINGS BERHAD UEM LAND HOLDINGS BERHAD

NUSAJAYA–A PICTORIAL UPDATE ON THE MAKING OF A 21st century city johor state new administrative centre JSNAC

14 Set amidst landscaped gardens 15 and parks, JSNAC is a centralised government precinct that will house the Johor State Government and Federal Government offices. Having both Governments’ offices and agencies in one modern and progressive environment will substantially improve efficiencies for both the State and Federal Government. With this, the public administrative sector is better able to provide enhanced support to existing businesses, as well as attract new local and foreign investors to Nusajaya. UEM LAND HOLDINGS BERHAD UEM LAND HOLDINGS BERHAD

NUSAJAYA–A PICTORIAL UPDATE ON THE MAKING OF A 21st century city ResidenceS

16 With emphasis on design 17 quality, community and healthy lifestyle, these signature residences offer a variety of residential products, from affordable housing to high end residences. Comprising Horizon Hills, East Ledang and Nusa Idaman, these residential developments aim to meet the discerning needs of up to 500,000 residents.

EAST ledang Amongst the more prestigious offerings in Nusajaya, this development is meticulously designed to allow modern lifestyles to blend seamlessly with nature. Comprising contemporary and spacious luxury resort homes, surrounded by a 20-acre forest with 31 themed gardens including seven landscaped parks with ornamental waterways, East Ledang is also designed to ensure the highest level of security for its residents. Phase 1, better known as Serenity Park is expected to be completed and handed over to the owners in the latter part of 2009. UEM LAND HOLDINGS BERHAD UEM LAND HOLDINGS BERHAD

NUSAJAYA–A PICTORIAL UPDATE ON THE MAKING OF A 21st century city ResidenceS

18 NUSA IDAMAN 19 This hillside suburb provides an eco-friendly lifestyle and the convenience of being situated amidst Nusajaya’s signature developments with ready infrastructure for easy accessibility and high quality living. Apart from the adjacent 650-acre Regional Park, Nusa Idaman also features a large linear park and a recreational lake that encourages closer interaction among neighbours within a safe and guarded environment. To date, six out of eight phases have been launched and the first three phases have been handed over to the owners. UEM LAND HOLDINGS BERHAD UEM LAND HOLDINGS BERHAD

NUSAJAYA–A PICTORIAL UPDATE ON THE MAKING OF A 21st century city ResidenceS

20 Horizon Hills 21 This is an exclusive gated, resort style development comprising an 18-hole international championship golf course on 200 acres of natural undulating land and eight themed precincts on sprawling greens and hills that offer unsurpassed luxurious lifestyles to its residents. The natural beauty of Horizon Hills is further accentuated by state-of-the-art landscaping with water features, canals, lakes and streams. UEM LAND HOLDINGS BERHAD UEM LAND HOLDINGS BERHAD

NUSAJAYA–A PICTORIAL UPDATE ON THE MAKING OF A 21st century city Afiat HEALTHPark SOUTHERN INDUSTRIAL AND LOGISTICS CLUSTERS SiLC

22 This distinctive development Afiat Healthpark is one of the 23 on 1,300 acres of industrial catalyst projects conceptualised park focuses on advanced and to position Nusajaya as a innovation driven “green” and comprehensive medical hub. “clean” industries like electronics Spread over 68 acres, Afiat and biotechnology. SiLC’s Healthpark has been tailored strategic location with its proximity to specifically meet the present to cargo hubs, two international gaps in the healthcare market airports and five seaports in and respond to increasing Johor and Singapore, will allow demand for premier healthcare industries in its location to tap services and facilities by local into a growing and increasingly and international customers. It affluent Asian market of 3 billion will cater to three distinct areas potential consumers. Together in healthcare; modern medicine, with its land size which offers traditional and complementary extensive expansion capacity medicine and wellness. This and existing fully integrated development will include a infrastructure, SiLC is a health screening centre, private compelling location for specialist clinics, outpatient industry players of the future. clinics, a commercial village, a nursing college, a rehabilitation centre and a dialysis centre. UEM LAND HOLDINGS BERHAD CORPORATE PROFILE

24 UEM Land Holdings Berhad (“UEM medical park offering world class healthcare Land Holdings” or “the Company”) was facilities and services. There will also be a incorporated on 20 August 2008 as part mix of residential and commercial properties, of a restructuring exercise undertaken by hotels, resorts and many other amenities UEM World Berhad. required to transform Nusajaya into a preferred destination to live, work and play. The restructuring was undertaken to move UEM Land Holdings to the next growth Central to Nusajaya’s potential success is paradigm and unlock value for shareholders, its strategic location. Adjacent to Singapore as well as allow direct equity participation and at the crossroads of arterial land, sea and in the Company by public investors. This air routes, with 3 billion potential consumers culminated in the successful public listing within a six-hour flight radius, Nusajaya has of UEM Land Holdings on Bursa Securities the vital ingredients to become the nucleus on 18 November 2008. of economic growth in Asia. Nusajaya is a compelling investment proposition for long UEM Land Holdings is the flagship term investors looking to tap a growing and company for real estate investment and increasingly affluent population. property development in UEM Group Berhad (“UEM Group”) and Khazanah To date, Nusajaya has successfully formed Nasional Berhad (“Khazanah”). UEM Group strategic alliances with international is a wholly-owned subsidiary of Khazanah, developers, Limitless Holdings Pte Ltd an investment holding company of the (a business unit of Dubai World) and DAMAC Malaysian Government. Properties (Malaysia) Sdn Bhd (a member of DAMAC Group, the largest private The jewel in UEM Land Holdings’ portfolio, real estate developer in Dubai) and local Nusajaya, is located in one of the five flagship developer United Malayan Land Bhd. The zones of Iskandar Malaysia, identified by the Company will continue to look for suitable Government as one of the key drivers of our synergistic alliances with reputable local and nation’s socio economic growth under the international companies with strong branding Ninth Malaysia Plan. The overall development and market reach, as these partnerships will of Nusajaya as an integrated modern city with play a key role in helping UEM Land Holdings diverse catalyst projects, is expected to be achieve its vision for Nusajaya. fully completed by 2025. One of the Company’s mission is to diversify Embracing innovative building processes and its income stream and geographical location technology, Nusajaya will be a role model of into high growth areas. This process has an economically, socially and environmentally been initiated with the formalisation of an sustainable city for South East Asia. With its acquisition of 98 acres of freehold site modern infrastructure and cutting edge adjacent to the Central Business District architectural design, the expected local of Cyberjaya at the end of 2008, with a and foreign investment inflows into Nusajaya potential gross development value in will propel economic growth and transform excess of RM1 billion. south Johor into an exciting centre of economic development.

Nusajaya spans a total of 23,875 acres, with UEM Land Holdings owning 9,564 acres which are currently under various stages of development. By 2025, Nusajaya will comprise a range of high quality properties, including the Johor State New Administrative Centre (“JSNAC”) and the Federal Government offices, the luxurious Puteri Harbour waterfront development, the “green” and “clean” fully managed Southern Industrial and Logistics Clusters (“SiLC”) and Afiat Healthpark, a comprehensive UEM LAND HOLDINGS BERHAD CORPORATE INFORMATION

BOARD OF DIRECTORS AUDIT COMMITTEE SECRETARIES 25 Tan Sri Dr Ahmad Tajuddin Ali Oh Kim Sun Tan Hwee Thian Chairman Chairman MIA 1904 Wan Abdullah Wan Ibrahim Abdul Kadir Md Kassim Mohd Nor Azam Mohd Salleh Managing Director/Chief Executive Officer Member MAICSA 7028137 Dato’ Ahmad Pardas Senin Md Ali Md Dewal Non-Independent Non-Executive Director Member AUDITORS Ernst & Young Abdul Kadir Md Kassim Dato’ Ikmal Hijaz Hashim Level 23A Menara Milenium Non-Independent Non-Executive Director Member Jalan Damanlela Appointed on 31 March 2009 Md Ali Md Dewal Pusat Bandar Damansara Senior Independent Non-Executive Director 50490 Kuala Lumpur

Oh Kim Sun NOMINATIONS & REMUNERATION Independent Non-Executive Director COMMITTEE PRINCIPAL SOLICITORS Md Ali Md Dewal Kadir, Andri & Partners Dato’ Ikmal Hijaz Hashim Chairman 8th Floor Menara Safuan Independent Non-Executive Director 80 Jalan Ampang Appointed on 1 March 2009 Dato’ Ahmad Pardas Senin 50450 Kuala Lumpur Member Omar Siddiq Amin Noer Rashid Non-Independent Non-Executive Director Oh Kim Sun PRINCIPAL BANKERS Appointed on 1 April 2009 Member CIMB Bank Berhad Malayan Banking Berhad BOARD DEVELOPMENT COMMITTEE Formed on 1 March 2009 Md Ali Md Dewal REGISTERED OFFICE Chairman 19-2 Mercu UEM Jalan Stesen Sentral 5 Dato’ Ahmad Pardas Senin Kuala Lumpur Sentral Member 50470 Kuala Lumpur Wan Abdullah Wan Ibrahim Tel: 03-2727 6868 Member Fax: 03-2727 2211 Dato’ Ikmal Hijaz Hashim Member REGISTRARS Symphony Share Registrars Sdn Bhd BOARD TENDER COMMITTEE Level 26 Menara Multi-Purpose Formed on 1 March 2009 Capital Square Abdul Kadir Md Kassim No.8 Jalan Munshi Abdullah Chairman 50100 Kuala Lumpur Md Ali Md Dewal Tel: 03-2721 2222 Member Fax: 03-2721 2530 Oh Kim Sun Member STOCK EXCHANGE Main Board of Bursa Dato’ Ikmal Hijaz Hashim Malaysia Securities Berhad Member UEM LAND HOLDINGS BERHAD CORPORATE STRUCTURE as at 31 March 2009

UEM LAND HOLDINGS BERHAD

1 UEM Land Berhad 100% Project procurement and management, and strategic investment holding company

2 B andar Nusajaya 100% Development Investment holding, property Sdn Bhd development, land trading and an agent for its subsidiary

3 NUS ajaya 100% development Sdn Bhd Property development

4 C ahaya Jauhar 60% Sdn Bhd Undertake the turnkey design and build contract for the development of the Johor State New Administrative Centre

5 H orizon Hills 50% Development Property development Sdn Bhd

6 Haute Property 40% Sdn Bhd Property development

7 Setia Haruman 25% Sdn Bhd Property development and sale of land UEM LAND HOLDINGS BERHAD MilestonES

MID- 2003 2004 27 90’S • Nusajaya’s • Secured revised agreement for • Acquisition development establishment of Nusajaya masterplan of JSNAC landbank. approved. as first catalyst. • Development • Nusajaya commenced. repositioned as Regional City with various catalyst developments.

This table shows you

2006 2007 2008 the key milestones in • Launched • Launched • Launched the development of Nusa Idaman, Horizon Hills East Ledang. Nusajaya. We expect the first mixed and Nusajaya to achieve “Tipping residential Industrial • Secured Point” in 2012. project. Park Phase 2. DAMAC as development • Physical • Physical partner for part works works of the Private commenced commenced Marina and on SiLC. on Puteri Commercial Harbour and South • Undertook secured precincts, degearing Limitless as Puteri Harbour. exercise development involving partner for • The listing strategic Residential of UEM Land disposal of North, Puteri Holdings 4,500 acres Harbour. Berhad on in Nusajaya Bursa to Khazanah. Securities. UEM LAND HOLDINGS BERHAD UEM LAND HOLDINGS BERHAD organisation structure

28 BOARD OF DIRECTORS 29

INTERNAL AUDIT

AUDIT COMMITTEE MANAGING DIRECTOR/chief executive officer

NOMINATIONS & REMUNERATION COMMITTEE CHIEF OPERATING OFFICER BOARD TENDER Vacant COMMITTEE

BOARD DEVELOPMENT PROJECT DIRECTORS CEO DIRECTOR FINANCE & DIRECTOR STRATEGIC COMMITTEE Cahaya jauhar CORPORATE AFFAIRS MARKETING, CORPORATE COMMUNICATION & PROPERTY INVESTMENTS SUPPORT

NUSAJAYA JSNAC Puteri Harbour Finance Strategic Marketing SPECIAL PROJECTS

Cyberjaya SiLC Corporate Planning Marketing & Sales Human resource

Leisure & Lifestyle Investor Relations Corporate Communication Cost Management & Control LEGAL & SECRETARIAL CRM Risk Management, PROPERTY INVESTMENTS Transformation & Investments

QA, oSHE & Project Monitoring

planning

The Company’s organisation structure was streamlined ahead of the Management Committees – Board Development Committee, corporate restructuring exercise to ensure that the Group can meet Board Tender Committee, Management Planning Committee future challenges and its obligations to its shareholders as a public and Management Tender Committee - with the authority to review listed entity. specific issues and to report to the Board with recommendations.

The Board of Directors (“Board”), entrusted with providing strategic The Company also centralised several functions to improve operational direction is responsible for the overall performance of the Group to efficiency within a matrix structure. One of the key initiatives was to maximise shareholder value, whilst the Managing Director / Chief centralise all marketing and sales function under a central functional Executive Officer (“MD/CEO”) is responsible for implementing the reporting line to the Strategic Marketing division. Within the matrix policies and decisions of the Board, overseeing the operations and structure, teams are then assigned to the various catalyst projects managing the development and implementation of the Group’s business to drive sales and marketing efforts. and corporate strategies. The role of Quality Assurance, Occupational Health and Safety & With the reorganisation, the position of Chief Operating Officer (“COO”) Environment (“QASHE”) and Project Monitoring were also expanded to was also created to assist the MD/CEO. Working together with a team of ensure that the formulated and approved quality standards of processes project managers, the COO oversees all operational aspects of project and practices were implemented accordingly throughout the entire implementation initiatives for Nusajaya, as well as Cyberjaya, as it plans development chain. Stringent QASHE guidelines were enforced and its product launch towards the end of 2009. monitored for compliance to ensure that our projects are undertaken in a responsible manner that safeguard the wellbeing of our people Practising good corporate governance and ensuring compliance at and the preservation of the environment in which we operate. all times, the Board approved the formation of additional Board and UEM LAND HOLDINGS BERHAD Four-Year FINANCIAL HIGHLIGHTS

30 Revenue Profit before income tax Earnings per share RM’ 000 RM’ 000 Sen 457,279 1,871,548 24.7 75,700 208,350 129,181 511,647 4.7 453,149 7,538 0.1 3.1

2005 2006 2007 2008 2005 2006 2007 2008 2005 2006 2007 2008 Restated Restated Restated

Year Ended 31 December Year Ended 31 December Year Ended 31 December

Shareholders’ equity Total Assets Net Assets Per Share RM’ 000 RM’ 000 RM* 0.51 0.49 3,542,222 3,388,545 3,060,552 2,717,725 1,250,155 1,184,635 150,087 0.04 71,531 0.09

2005 2006 2007 2008 2005 2006 2007 2008 2005 2006 2007 2008 Restated Restated Restated

Year Ended 31 December Year Ended 31 December Year Ended 31 December

* Attributable to equity holders of the Company UEM LAND HOLDINGS BERHAD Four-Year GROUP PERFORMANCE

Year Ended 31 December

2005 2006 2007 2008 In RM' 000 (Restated)

Revenue 208,350 453,149 1,871,548 511,647 Cost of sales (134,500) (309,871) (1,360,626) (381,159) Operating expenses (72,590) (31,700) (85,552) (62,307)

Operating profit 1,260 111,578 425,370 68,181

Other income 18,977 28,818 30,634 2,678 Finance costs (13,619) (6,612) (594) (6,367) Share of result of associates and joint ventures 920 (4,603) 1,869 11,208

Profit before income tax 7,538 129,181 457,279 75,700

Profit attributable to equity holders of the Company 2,564 82,018 529,128 74,189 Shareholders' equity 71,531 150,087 1,184,635 1,250,155 Earnings per share (sen) 0.1 4.7 24.7 3.1 Return on equity 3.4% 74.0% 79.3% 6.1%

UEM LAND HOLDINGS BERHAD 2008 GROUP QUARTERLY PERFORMANCE

First Second Third Fourth In RM' 000 Quarter Quarter Quarter Quarter 2008

Revenue 191,130 60,172 78,365 181,980 511,647 Cost of sales (116,637) (47,749) (61,990) (154,783) (381,159) Operating expenses (9,252) (14,736) (11,925) (26,394) (62,307)

Operating profit 65,241 (2,313) 4,450 803 68,181

Other income 1,122 97 878 581 2,678 Finance costs (1,637) (2,111) (3,287) 668 (6,367) Share of result of associates and joint ventures 1,285 2,793 2,231 4,899 11,208

Profit before income tax 66,011 (1,534) 4,272 6,951 75,700

Profit attributable to equity holders of the Company 66,349 (1,905) 1,108 8,637 74,189 Shareholders' equity 1,256,751 1,254,810 1,250,837 1,250,155 1,250,155 Earnings per share (sen) 2.73 (0.08) 0.05 0.36 3.06 Return on equity* 7.8% (0.6%) 0.4% 2.8% 6.1%

* Annualised and adjusted for non-recurring. UEM LAND HOLDINGS BERHAD Four-Year Financial REVIEW OF THE GROUP

As at 31 December

2005 2006 2007 2008 In RM' 000 (Restated)

TOTAL ASSETS Property, plant and equipment and prepaid land lease payments 8,422 10,456 11,132 12,693 Land held for property development, development properties and property development costs 2,659,266 2,777,054 2,111,653 2,255,944 Investment in associates, joint ventures and others 72,409 32,455 22,921 40,457 Inventories 51,586 35,501 34,797 35,905 Receivables 387,982 527,878 401,485 612,989 Goodwill 4,478 36,822 39,223 39,223 Deposits and cash and bank balances 204,403 83,351 57,809 34,823 Others - 38,705 38,705 28,518 Total assets 3,388,545 3,542,222 2,717,725 3,060,552

TOTAL EQUITY AND LIABILITIES Share capital 867,554 867,554 1,214,088 1,214,088 Merger relief reserves 22,894 22,894 34,330 34,330 Other reserves (78,980) (84,317) 63,132 47,027 Accumulated losses (739,937) (656,043) (126,915) (45,290)

Shareholders' equity 71,531 150,087 1,184,635 1,250,155 Minority interests 632,842 559,293 451,500 452,380 Total equity 704,373 709,380 1,636,135 1,702,535

Borrowings 2,390,771 2,445,240 560,289 599,294 Income tax liabilities 128,994 177,747 156,165 145,935 Payables 108,318 169,572 330,553 577,418 Provisions and others 56,088 40,284 34,583 35,370

Total equity and liabilities 3,388,545 3,542,222 2,717,725 3,060,552

Net asset per share attributable to equity holders of the Company (RM) 0.04 0.09 0.49 0.51

UEM LAND HOLDINGS BERHAD Simplified Group Balance Sheet

34 43% 21%

Total Equity Total Assets and liabilities 2007 2007

1% 15% 79% 1% 6% 12% 17%

1% 41% 19%

Total Equity Total Assets and liabilities 2008 2008

5% 1%

1% 15% 19% 1% 20% 74 %

Property, plant and equipment and prepaid land lease payment Shareholders’ equity

Land held for property development, development properties Minority interests and property development costs Borrowings Investment in associates, joint ventures and others Income tax liabilities Inventories Payables Receivables Provisions and others Goodwill

Deposits and cash and bank balances

Others UEM LAND HOLDINGS BERHAD Statement of VALUE ADDED & DISTRIBUTION

In RM' 000 2007 2008

VALUE ADDED: Revenue 1,871,548 511,647 Purchase of goods and services (1,424,276) (423,727)

Value added by the Group 447,272 87,920 Other income 30,634 2,678 Share of result of associates and joint ventures 1,869 11,208 Total value added available for distribution 479,775 101,806

DISTRIBUTION: To employees – salaries and other staff costs 20,180 17,562 To government – income tax (72,464) 631 To provider of capital – finance costs 594 6,367 Retained for future reinvestment & growth – depreciation & amortisation 1,722 2,177 – retained profits 529,128 74,189 – minority interest 615 880 Total distributed 479,775 101,806

RECONCILIATION: Profit for the year 529,743 75,069 Add : Depreciation & amortisation 1,722 2,177 Finance costs 594 6,367 Staff costs 20,180 17,562 Income tax (72,464) 631

Total value added 479,775 101,806 UEM LAND HOLDINGS BERHAD Employees & Productivity

36 Employees’ Ethnic Employees by Classification Composition as at 24 March 2009 Bumiputera 336 Management 63 UE5 & above Chinese 21 Executive 176 Indian 4 UE1 - UE4 Others 1 Non Executive 123 362 NE1 – NT8 362

Employees’ Ethnic Employees by Composition Classification

Management (UE5 & above) 17% Bumiputera 93% Non Executive (NE1 – NT8) 34%

Executive (UE1 – UE4) 49% Chinese 6%

Indian 1%

Others 0% UEM LAND HOLDINGS BERHAD Share Price & Volume Traded

0.8 weekly volume traded & highest-lowest 37 600

1000 share price

Traded share 50000000 Volume price

MILLION highest LOWEST week SHARES (RM) (RM) 0.7 21/11/08 31,139,900 0.66 0.585 500 28/11/08 14,155,000 0.595 0.56 800 5/12/08 3,906,400 0.525 0.51 12/12/08 7,161,600 0.55 0.525 0.6 40000000 19/12/08 5,181,900 0.585 0.56 26/12/08 1,511,200 0.545 0.53

400 2/1/09 3,895,700 0.575 0.535 9/1/09 18,389,200 0.715 0.675 0.5

600 16/1/09 45,510,300 0.9 0.79 23/1/09 11,409,900 0.77 0.74

30000000 30/1/09 13,147,900 0.76 0.74 6/2/09 13,374,700 0.755 0.725 0.4 300 13/2/09 21,126,300 0.775 0.72 20/2/09 9,346,600 0.775 0.745 27/2/09 4,674,900 0.76 0.74 400 6/3/09 4,445,300 0.72 0.705 0.3 11/3/09 10,080,900 0.745 0.7 20000000 200

0.2 index 200 100 INDEX (MILLION SHARES) composite 10000000 0.1 (RM) WEEKLY volume traded

traded share price price lumpur

properties KLCI properties INDEX uala 0 0 0 0 KLCI KLCI K share volume Kuala lumpur composite index 9/1/09 2/1/09 6/3/09 6/2/09 11/3/09 16/1/09 30/1/09 27/2/09 23/1/09 5/12/08 13/2/09 20/2/09 21/11/08 28/11/08 19/12/08 12/12/08 26/12/08 Puteri Harbour and maximum results. us through a major restructuring of our operations, with minimum friction nimble on our feet in embracing change and its many effects. This has seen Being a fairly large and we corporation, established have made ourselves Horizon Hills Golf and Country Club Country and Golf Hills Horizon

Reshaping our business UEM LAND HOLDINGS BERHAD BOARD OF directors

FROM LEFT

MD ALI MD DEWAL DATO’ AHMAD PARDAS SENIN WAN ABDULLAH WAN IBRAHIM TAN SRI DR AHMAD TAJUDDIN ALI ABDUL KADIR MD KASSIM OH KIM SUN DATO’ IKMAL HIJAZ HASHIM

NOT IN PICTURE

Omar siddiq amin noer Rashid UEM LAND HOLDINGS BERHAD PROFILE OF directors

TAN SRI DR AHMAD TAJUDDIN ALI WAN ABDULLAH WAN IBRAHIM 41 Aged 60 – Chairman Aged 51 – Managing Director/Chief Executive Officer

Tan Sri Dr Ahmad Tajuddin Ali was appointed to the Board on Wan Abdullah Wan Ibrahim was appointed to the Board on 15 September 2008 as a nominee of UEM Group Berhad (“UEM 15 September 2008. He is also a member of the Board Development Group”). He was appointed as the Chairman of UEM Group on 1 April Committee. He joined UEM Land Berhad (“UEM Land”) on 1 January 2007. He was previously the Director-General of SIRIM, the Chairman 2006 as the Managing Director. Prior to joining UEM Land, he was and Chief Executive of Tenaga Nasional Berhad, Chairman of Zelan the Group Chief Executive Officer of United Malayan Land Bhd, Berhad, Tricubes Berhad, Opus Group Berhad, Opus International a property company listed on Bursa Securities. From 1996 to 2004, Limited and Sime Engineering Services Berhad. He is currently the he was with Kumpulan Guthrie Berhad, where his last position held Chairman of Malaysian Oxygen Berhad and also sits on the boards was the Director of Property Division. In that capacity, he was tasked of Sime Darby Berhad, Bangi Golf Berhad and several other private to lead the property development activities of the group, which covers limited companies. He is a Registered Professional Engineer with the three listed companies namely, Kumpulan Guthrie Berhad, Highlands Board of Engineers, a Fellow of the Institution of Engineers Malaysia & Lowlands Berhad and Guthrie Ropel Berhad. He was also and a Foundation Fellow of the Academy of Science, Malaysia. He is responsible for the conceptualisation and submission of plans for the Chairman of the Malaysian Standards and Accreditation Council, the Guthrie Corridor Planned Communities that covered an area a member of the Governing Council of the International Organisation of 11,650 acres linked and accessed by the Guthrie Corridor for Standardisation (ISO), Geneva and a member of the Governing Expressway. Prior to this, he spent 10 years with the Emkay Group Council for the Federation of Malaysian Manufacturers. He holds of companies, whose core activity was property development, and has a B.Sc (Engineering) First Class Honours from King’s College, held several positions including Group Executive Director. He holds a University of London in 1973, and a Ph.D. in Nuclear Engineering from degree in Business Administration (majoring in Accounting) from the Queen Mary College, University of London in 1977. He is a graduate of Bolton Institute of Technology, United Kingdom. Harvard Business School’s Advanced Management Programme and was conferred the Honorary Doctor of Science from Universiti Putra Wan Abdullah attended all four of the Board meetings held for the Malaysia in 2000 and in 2008 he was conferred the Honorary Doctor financial year ended 31 December 2008, since his appointment of Engineering degree by Universiti Tenaga Nasional (UNITEN). to the Board.

Tan Sri Tajuddin attended all four of the Board meetings held for the financial year ended 31 December 2008, since his appointment to the Board. UEM LAND HOLDINGS BERHAD PROFILE OF DIRECTORS

42 DATO’ AHMAD PARDAS SENIN ABDUL KADIR MD KASSIM Aged 56 – Non-Independent Non-Executive Director Aged 68 – Non-Independent Non-Executive Director

Dato’ Ahmad Pardas Senin was appointed to the Board on Abdul Kadir Md Kassim was appointed to the Board on 15 September 15 September 2008. He is also a member of the Nominations 2008. He is the Chairman of the Board Tender Committee and a member & Remuneration Committee and Board Development Committee. of the Audit Committee. He is also a Director of UEM Group, Proton He currently holds directorships in UEM Group Berhad, Pharmaniaga Holdings Berhad, Suria Capital Holdings Berhad, TIME dotCom Berhad and Universiti Teknologi Mara (UiTM) and is Chairman of Berhad, Sino Hua-An International Berhad, Petroliam Nasional Berhad The Malaysian Directors Academy (MINDA). He is also the Deputy and Chairman of the Committee of Labuan International Financial Chairman of PLUS Expressways Berhad. Dato’ Ahmad Pardas is Exchange Inc. He is currently the managing partner of Messrs Kadir, a Fellow of The Chartered Institute of Management Accountants Andri & Partners and has previously worked in the Judicial and Legal (FCMA), a Chartered Member of the Malaysian Institute of Service between 1966 and 1973. He holds a Bachelor of Law degree Accountants (MIA), a Member of the Institute of Internal Auditors, from the University of Singapore. Inc. and a Member of the Financial Reporting Foundation (FRF). He has been with the UEM Group for more than 17 years since Abdul Kadir attended all four of the Board meetings held for the 1992. During this period, Dato’ Ahmad Pardas has served in various financial year ended 31 December 2008, since his appointment other positions in the UEM Group including as the Group Managing to the Board. Director of Renong Berhad, Managing Director of TIME Engineering Berhad, Executive Director/Chief Executive Officer of TIME dotCom Berhad, Managing Director of EPE Power Corporation Berhad MD ALI MD DEWAL (now renamed Ranhill Power Berhad), Executive Director and Chief Aged 68 – Senior Independent Non-Executive Director Executive Officer of Silterra Malaysia Sdn Bhd and Managing Director/ Chief Executive Officer of UEM World Berhad. He has also served Md Ali Md Dewal was appointed to the Board on 15 September 2008. on the boards of UEM Builders Berhad, Opus Group Berhad, Projek He is the Chairman of the Nominations & Remuneration Committee Lebuhraya Utara-Selatan Berhad, Faber Group Berhad, The Malaysian and Board Development Committee and is a member of the Audit Industry-Government Group for High Technology (MIGHT) and Committee and Board Tender Committee. He is currently the Chairman Costain Group Plc. Prior to joining the UEM Group, Dato’ Ahmad of Madon Sdn Bhd, and sits on the Boards of Institut Jantung Negara Pardas had more than 17 years service with British-American Sdn Bhd, Valuecap Sdn Bhd, Proton Edar Sdn Bhd, Proton Cars (UK) Tobacco Group. Limited and several other private limited companies. He holds a Master of Business Administration Degree from Tulane University, New Dato’ Ahmad Pardas attended all four of the Board meetings held for Orleans, United States. the financial year ended 31 December 2008, since his appointment to the Board. Md Ali attended all four of the Board meetings held for the financial year ended 31 December 2008, since his appointment to the Board. UEM LAND HOLDINGS BERHAD

OH KIM SUN OMAR SIDDIQ AMIN NOER RASHID 43 Aged 60 – Independent Non-Executive Director Aged 35 – Non-Independent Non-Executive Director

Oh Kim Sun was appointed to the Board on 15 September 2008. Omar Siddiq Amin Noer Rashid was appointed to the Board on He is the Chairman of the Audit Committee and a member of the 1 April 2009. He currently holds the post of Director, Investments Nominations & Remuneration Committee and the Board Tender at Khazanah Nasional Berhad. He was previously a Director in Committee. He is also a Director of Pharmaniaga Berhad, Faber Investment Banking at CIMB Investment Bank Berhad. Prior to that, Group Berhad, Nikko Electronics Berhad and IMPAX Laboratories he was an Executive Director in the Corporate Finance Practice of Inc, a company listed on the NASDAQ. He has previously worked as PricewaterhouseCoopers in Kuala Lumpur. He joined the firm in Group Executive Director of Chemical Company of Malaysia Berhad, London in 1996 before moving to Kuala Lumpur in 2001. Omar holds Finance Director of Taiko Plantations Sdn Bhd, Financial Controller a BSc (Econ) from the London School of Economics and Political of ICI Malaysia and Finance Manager (Secondment) of ICI Science, London (1996). He is also an Associate member of the Headquarters in London. He is an accountant by training and is a Institute of Chartered Accountants of England & Wales since 1999 member of the Malaysian Institute of Certified Public Accountants. and a CFA charter holder as awarded by the CFA Institute since 2002.

Oh attended all four of the Board meetings held for the financial year ended 31 December 2008, since his appointment to the Board.

DATO’ IKMAL HIJAZ HASHIM Aged 56 – Independent Non-Executive Director

Dato’ Ikmal Hijaz Hashim was appointed to the Board on 1 March 2009. He sits on the Audit Committee, Board Development Committee and Board Tender Committee. He was previously the Chief Executive Officer of Iskandar Regional Development Authority (“IRDA”) from February 2007 until end of February 2009. Prior to his appointment to IRDA, Dato’ Ikmal joined Pos Malaysia Berhad and his last position was the Group Managing Director/Chief Executive Officer. Dato’ Ikmal began his career by serving in the Administrative and Diplomatic Service of the Government from 1976 to 1990. He then joined United Engineers (Malaysia) Berhad as the General Manager of the Malaysian-Singapore Second Crossing Project. On 1 January 1993, Dato’ Ikmal became the Chief Operating Officer of Projek Lebuhraya Utara-Selatan Berhad and subsequently as its Managing Director in 1999 and remained as a Director until November 2001. Dato’ Ikmal was appointed as the Managing Director of Prolink Development Sdn Bhd (“Prolink”) (now known as Bandar Nusajaya Development Sdn Bhd) and Acting Chairman of the Supervisory Board, Property Division of Renong Group in July 1999. In February 2000, Dato’ Ikmal was appointed President of the Property Division of the Renong Group while maintaining his position as Managing Director of Prolink. He held the position of Managing Director at Renong Berhad from 2002 until October 2003. Dato’ Ikmal holds a Master of Philosophy (Land Management) from University of Reading, United Kingdom, and Bachelor of Arts (Honours) from Universiti Malaya.

None of the Directors has: • Any family relationship with any Director and/ or major shareholder of UEM Land Holdings. • Any conflict of interest with UEM Land Holdings. • Any conviction for offences within the past 10 years other than traffic offences, if any.

All the Directors are Malaysians. UEM LAND HOLDINGS BERHAD senior management

TAN HWEE THIAN SITTING FROM LEFT STANDING FROM LEFT JOINT COMPANY SECRETARY Zamry Ibrahim Mohd Zakir Omar Karimah Tan Abdullah Johan Ramli Zamani Kasim Rusli Zainal Abidin Mahmud DATO’ DR HJ Abbas Mohd Auzir Mohd Tahir Razman Radzi Saiful Anuar ABD Ghani Tengku Azahari Tengku Azib Suhairi Ramly MOHD Zahid Dasahi MOHD NOR AZAM MOHD Zulkifli Tahmali YUSOF Tahmali SALLEH JOINT COMPANY SECRETARY NOT IN PICTURE

Adnan Azhar Ismail UEM LAND HOLDINGS BERHAD profile of senior management

Zulkifli Tahmali Mohd Zakir Omar Executive Director at Markas been a member of the Malaysian 45 Yusof Tahmali Director, Finance & Sdn Bhd and General Manager, Institute of Accountants since Director, Strategic Marketing, Corporate Affairs Development at ENSTEK Sdn 1995. He holds a degree in Corporate Communication & Bhd, before he joined MAA Accountancy from Universiti Property Investments Mohd Zakir Omar joined UEM Alliance Sdn Bhd in 2002 Teknologi Mara where he Land in 2003. Prior to joining as Managing/Project Director. graduated in 1992. He has Zulkifli Tahmali Yusof Tahmali UEM Land, he was with Faber Mahmud Abbas has a Sloan been involved in managing joined UEM Land Berhad (“UEM Group Berhad from 2000 to Fellowship from the London and monitoring various property Land”) in 2006. He started his 2003 with the last position Business School and is a investments for UEM Land. career in the United States as an as Senior Manager, Business Member of the Chartered Architect with Westfield Inc, an Development. He has previously Institute of Building, Australian shopping centre owner worked for Business Focus United Kingdom. Tengku Azahari and developer from September Group as an Accountant and Tengku Azib 1987 to September 1991. Upon subsequently as Head of General Manager, Cost his return to Malaysia, he served Finance from 1997 to 2000 and Mohd Auzir Mohd Tahir Management & Control Perunding Alam Bina Sdn Bhd as for Deloitte Touche Tohmatsu CEO, Cahaya Jauhar Sdn Bhd a Senior Architect, Metacorp from 1994 to 1997. He has Tengku Azahari Tengku Azib Berhad as a Senior Manager, been a Fellow Member of the Mohd Auzir Mohd Tahir joined joined UEM Land in 2007. He Golden Hope Development Sdn Association of Chartered the UEM Group in 1988, rising began his career in 1989 with Bhd as a General Manager and Certified Accountants and to his current position in January McBride and Son Corporation, Budaya Hikmat Sdn Bhd as a a Chartered Accountant with 2005. He has previously worked Missouri, United States. Since Project Director. The last position the Malaysian Institute of for various companies within then, he has held positions as held before joining UEM Land Accountants since 1998. He the UEM Group, including Assistant General Manager for was Director, Operations at holds a BA(Hons) Combined Pengurusan Lebuhraya Berhad, the Project Implementation United Malayan Land from April Studies, Accounting and Law Renong Overseas Corporation Division of Syarikat Perumahan 2005 to June 2006. He holds a from DeMontfort University, Sdn Bhd, Rocpoint (Pty) Limited, Negara Berhad from 2004 to Master of Business Administration Leicester, England where he Bandar Nusajaya Development 2007, Project Planning and (Finance) from Universiti Putra graduated in 1993. Sdn Bhd (“BND”) and UEM Product Manager for Negara Malaysia (2002) and a Bachelor Land. He holds a degree in Civil Properties (M) Berhad from of Architecture degree from Engineering from the University 2002 to 2004, Head of the the University of Southwestern Mahmud Dato’ Dr Hj Abbas of Wales, United Kingdom where Project Management Department Louisiana (currently known as Project Director, he graduated in 1982 and he has for Permodalan Nasional Berhad University of Louisiana at Central Region more than 25 years experience from 1995 to 2000 and Project Lafayette), United States where in project management and Manager for Panelex Sdn Bhd he graduated in 1987. He is a Mahmud Dato’ Dr Hj Abbas property development. from 1991 to 1995. He holds Licensed Architect in the State joined UEM Land in 2009 with a Masters in Construction of Connecticut, United States almost 27 years of experience in Management from Washington since 1991 and a registered Development, Construction and Mohd Zahid Dasahi University, St. Louis, Missouri, Professional Architect in Project Management. He started General Manager, Risk United States where he Malaysia since 1995. his career as a Project Engineer Management, Transformation graduated in 1990 and a degree at Lend Lease (M) Sdn Bhd, an & Investment in Construction Technology from Australian Project Management California State University, company in 1982, after Mohd Zahid Dasahi joined Fresno, United States where he graduating from Brighton UEM Land in 1996, where graduated in 1987. He has University with a degree in he held several positions prior extensive experience in Building the same year. He to his current appointment. project management, design joined the PERNAS Group of He has previously worked development, procurement, companies in 1983 and held for PricewaterhouseCoopers project site administration, cost several management positions in their Audit and Business control and construction works. in the group until his departure in Advisory Division from 1992 1996. His last position with to 1995. He is a Fellow Certified Pernas was General Manager Practicing Accountant of and Director of its subsidiary, Australia and also a Chartered Perspec Prime (M) Sdn Bhd. Accountant with the Malaysian After that, he worked as Institute of Accountants. He has UEM LAND HOLDINGS BERHAD profile of senior management

46 Razman Radzi Suhairi Ramly Johan Ramli General Manager, Human General Manager, General Manager, Southern Resource & Administration Direct Development Industrial & Logistics Clusters

Razman Radzi joined UEM Land Suhairi Ramly joined UEM Johan Ramli joined UEM in 2007. He previously worked for Land in 2006, bringing with him Land in 2006. He previously Sarawak Shell Berhad, Goodyear more than 18 years of working worked with the Property Division Malaysia Berhad, Linatex Rubber experience in the property of Arab-Malaysian Development Products Sdn Bhd (formerly development and construction Berhad for 15 years and was in known as Harisons & Crossfields), sector. He began his career with the quantity surveying practice Island & Peninsular Berhad, development and construction at Juru Ukur Bahan Malaysia, for Malaysia Mining Corporation conglomerates such as The Lion seven years. He holds a degree Berhad, Kumpulan Guthrie Group, Encorp Group Berhad in Quantity Surveying from Berhad and Affin Bank Berhad. and AlBukhary Foundation. He University of Reading, United He holds a degree in Business has extensive experience in the Kingdom where he graduated Administration from International various aspects of project and in 1981. Islamic University where he construction management, as well graduated in 1989 and a diploma as marketing. His involvement in in Personnel Management from the property and construction Saiful Anuar Abd Ghani Malaysian Institute of Personnel sector in major development General Manager, Management where he graduated projects include Horizon Hills Special Projects in 1994. He has more than 19 in Nusajaya, Cahaya Alam in years of experience in Human Shah Alam, Menara Citibank in Saiful Anuar Abd Ghani joined Resources management and Jalan Ampang and Bandar Bukit UEM Land in 2007. He is a development, both at the Mahkota in Bangi. He holds Professional Architect registered operational and strategic levels. a BSc(Hons) Construction with Lembaga Arkitek Malaysia, a Management from the Corporate Member of Malaysian University of Westminster, Institute of Architects, a Rusli Zainal Abidin United Kingdom. Corporate Member of Malaysian General Manager, Township Institute of Interior Designers & Infrastructure Planning and a Member of the National Bandar Nusajaya Development Zamani Kasim Institute in the Alternative General Manager, Dispute Resolution, Malaysian Rusli Zainal Abidin joined UEM Waterfront Development Institute of Arbitrators. He holds Group in 1995 as a Senior a degree in Architectural Studies Manager for BND and left in Zamani Kasim joined UEM Land from University of Nebraska, 1998 to join Puncak Niaga in 2006. He previously worked for Lincoln, United States and Berhad. He rejoined BND in Seloga Holdings Bhd and Seloga Masters in Architecture from the 2000 as the General Manager Engineering Sdn Bhd from 2004 Washington University-St. Louis, of the Township & Infrastructure to 2006. He was the General United States. He possesses Planning Department. He has Manager for the AlBukhary group more than 18 years of experience previously worked at Erinco from 2002 to 2004, a Project in various building industries, Sdn Bhd as a Senior Engineer Director for Azrahi Project ranging from inception of the from 1991 to 1995, Assistant Management Sdn Bhd from layout to overseeing the total Resident Manager for Angkasa- 1997 to 2001, and a Director operations of development. Ghd Engineers in 1991 and for Definite Spectrum Sdn Bhd Project Engineer for Antah from 1996 to 1997. He has also Biwater Joint Venture from 1987 held key positions in various other to 1991. He holds a degree in companies such as Koperasi Civil Engineering from Herriot- Belia Nasional Berhad, Trimula Watt University, Edinburgh, Development Sdn Bhd and Scotland where he graduated Arab-Malaysian Development in 1985 and a Masters in Berhad. He holds a degree in Construction Management Housing, Building and Planning from the same university where from Universiti Sains Malaysia he graduated in 1987. where he graduated in 1978. He has more than 30 years of experience in construction and property development. UEM LAND HOLDINGS BERHAD

Adnan Azhar Ismail Zamry Ibrahim MOHD NOR AZAM MOHD 47 General Manager, Leisure General Manager, SALLEH & Lifestyle Strategic Marketing Joint Company Secretary

Adnan Azhar Ismail joined UEM Zamry Ibrahim joined UEM Land Mohd Nor Azam Mohd Salleh Land in 2000. He was previously in 2006. He has more than 17 joined UEM Group in 2001 a General Manager of Strategic years of experience in property as the Company Secretary of Planning for Kedah Cement marketing and sales and was BND and subsequently as the Holdings Bhd and for Esso previously attached to United Joint Company Secretary of UEM Production Malaysia Inc where Malayan Land Bhd, Malaysian Land and other companies within he worked as an analyst Industrial Estates Bhd, Negara the Group. He started his career in the materials department and Properties (M) Berhad, the with Signet & Co, the secretarial later the information systems Encorp Group and the AlBukhary arm of Ernst & Young, and department. He holds an group. He possesses a degree subsequently with Permodalan International Baccalaureate in Business Administration in Nasional Berhad. He is a member Diploma from the United World Finance from Wilkes University of the Institute of Chartered College of the Atlantic, United Pennsylvania, United States Secretaries & Administrators, Kingdom which he received where he graduated in 1990 United Kingdom. Presently, in 1980. He holds a degree in and a Masters in Business he is a Manager at the Legal Civil Engineering from University Administration in Finance & Secretarial of UEM Group of Wales, United Kingdom from University of Lehigh, Management. where he graduated in 1984 Pennsylvania, United States and a Masters in Business where he graduated in 1991. Administration from the University of Miami, Florida, United States where he TAN HWEE THIAN graduated in 1985. Joint Company Secretary

Tan Hwee Thian is the Director, Karimah Tan Abdullah Legal & Secretarial of UEM General Manager, Group Management Sdn Bhd Corporate Communication (“UEM Group Management”) and the Joint Company Secretary of Karimah Tan Abdullah joined the Company. He is also the Joint UEM Land in 2007. She has Company Secretary of UEM been with the UEM Group since Group, PLUS Expressways September 1995 and has held Berhad and other companies various positions within the UEM in UEM Group. He is a Fellow Group, including Vice President of the Association of Chartered of Corporate Communication at Certified Accountants, United TIME dotCom Berhad in 2001. Kingdom, a member of the Before joining UEM Group, Institute of Chartered Secretaries Karimah was in the advertising & Administrators, United industry where she worked in Kingdom and a Chartered various local and international Member of the Malaysian Institute agencies including KHK of Accountants (MIA). Needham, Wings BBDO and AMC Advertising. Her last position in the advertising industry was that of Account Director at Limkokwing Integrated Sdn Bhd. She graduated with an Honours degree in Science from National University of Singapore and holds a Diploma in Education from the same university. UEM LAND HOLDINGS BERHAD MD/CEO operations review

48 “We will continue to translate our Vision into Action” It all began with a vision. A vision to build Nusajaya, a model regional city powered by the diversity of its developments and drawing together the best in practices, standards and human capital.

Much has happened on the ground in the last three years to realise our objective for Nusajaya, the regional city, to come alive in 2011.

Phase 1 of the Johor State New Administrative Centre (“JSNAC”) has been completed and the state government began operations in the new premises in Q1 of 2009.

At Puteri Harbour, our 688-acre waterfront development, earthworks which commenced in 2006 has progressed at a rapid pace. With the completion of the Clubhouse, promenade and public marina ahead of schedule, Puteri Harbour opened its channel for the first yacht to sail in on 15 January 2009.

Phase 1 of our managed industrial park, SiLC, catering to clean and green industries, commenced in 2006 and today it is close to 60% taken up.

We launched various phases of our residences in Horizon Hills, a 50:50 joint venture with Gamuda Berhad, Nusa Idaman and East Ledang in the last three years, and all were well taken up.

Phase 1 land parcels covering 36 acres in Afiat Healthpark are now It has been a good year for UEM Land Holdings Berhad (“UEM Land ready for development by healthcare operators with the completion Holdings” or “the Company”) with a number of highlights that topped of the secondary infrastructure work. The first operator, Columbia off a set of positive financial results for the year ended 2008 (“FY2008”) Asia Sdn Bhd has started construction of its hospital, slated to be despite the meltdown in the global financial markets. After stripping completed in 2010. The KM19.1 Interchange, currently under away the effects from the one-off land sale to Khazanah Nasional construction, will benefit both Nusa Idaman and Afiat Healthpark Berhad (“Khazanah”) in 2007, UEM Land Holdings turned in a set of with the additional access once completed. commendable results, increasing revenue by 16% to RM511.6 million (FY2007: RM441.1 million ex-Khazanah land sale) and profit after In the forthcoming year, we will persist with our efforts to build and tax by 46% to RM75.1 million (FY2007: RM51.5 million ex-Khazanah maintain a dominant presence in our key markets by building additional land sale). growth platforms through successful launches, land acquisitions and strategic collaborations. Revenue from property development improved by 10.7% to RM423.8 million driven by contribution from sales in Puteri Harbour, Southern Industrial and Logistics Clusters (“SiLC”), East Ledang and Nusa “We will Collaborate to achieve success” Idaman, with the balance revenue of RM81.5 million arising from strategic land sales, and RM6.3 million from harvesting and land Collaboration is the key to business success and it is a business leasing activities. strategy that we have adopted. At UEM Land Holdings, we wholeheartedly embrace the concept of working together with Total operating expenses for the period fell by 37% to RM62 million collaborative partners for mutual benefit. By seeking out the right and total Shareholders’ Funds as at 31 December 2008, stood at collaborative partners, who have the expertise, skills, market reach, RM1,250.2 million. reputation and a host of other attributes, it helps us stay ahead of the curve and gain competitive advantage. UEM LAND HOLDINGS BERHAD

In the last two years, we have successfully engaged in collaborations “We will seek out Strategic Partnerships to leap frog 49 with both international and local partners that help drive our strategic our development” initiatives and catalyse the progress of our developments. To achieve our mission for Nusajaya to come alive by 2011 we believe that one of the underlying formulae for success in building this city We have collaborated with local partners: is collaboration with multiple world-class developers for concurrent • Iskandar Regional Development Authority, Iskandar Investment development, an approach we have adopted since 2007. Berhad and Danga Bay on marketing initiatives overseas to put Iskandar Malaysia on the radar of international investors; We have executed strategic partnerships with international developers • Universiti Kebangsaan Malaysia to develop a Nusajaya Limitless LLC of Dubai, Damac Properties and local developers Environment Masterplan; Gamuda Berhad and United Malayan Land Bhd; and will continue • Telekom Malaysia Bhd and TT dotCom Sdn Bhd to create to seek out strategic partnerships to realise our vision. a multi-telco environment; • Gamuda Berhad and United Malayan Land for various developments; “We will drive our Operational Excellence to its pinnacle through various initiatives” and international partners: With the roll out of our Culture of Excellence program to all Group • General Electric on Safety & Security, Infrastructure and staff, we aim to inculcate and sustain operational excellence and Environment; and productivity throughout the entire operational chain in order to drive • Limitless and DAMAC Properties for the various developments the Group’s financial performance in difficult times. in Puteri Harbour. We will strengthen internal processes by adopting the world’s best practices and we remain committed to empowering our “We will differentiate Nusajaya through Strategic people with knowledge and skills through various training programs Initiatives” in Construction Quality Assessment (“CONQUAS”), Quality Management Systems, Environment Management Systems, and At UEM Land Holdings, we have identified four key areas that will not others. By developing and fostering a collaborative culture of trust, only set us apart from other cities which have evolved organically but empowerment and excellence, UEM Land Holdings will be able will thrust us into the global arena. As Nusajaya is a relatively green to attract and retain the best in a diversity of talents. field, we have the opportunity to do it right the first time especially where infrastructure is concerned:

1. The Nusajaya Intelligent City Management Platform – an “We will maintain our Aggressive Marketing of integrated business platform where data and information are Nusajaya developments and continue to drive derived from city management systems and used to enhance customer experience” the management of the city and provide services to the Nusajaya To add impetus to our marketing and branding efforts, we initiated a community and its visitors; customer relationship management (CRM) project in 2008 with the goal of optimising overall experience, satisfaction and perception 2. Safety & Security – where a comprehensive Security Masterplan of our brands, “Nusajaya – The World In One City”, “Puteri Harbour will be systematically implemented throughout Nusajaya on – Luxury’s New Attitude”, “UEM Land – Master Developer of Nusajaya” a philosophy that hinges on the integration of three controls: and “Nusajaya - The Key Driver of Iskandar Malaysia ”. planning & design, technology and management; We will maintain our strong momentum from project conceptualisation 3. Eco-Nusajaya - where our environment policy will ensure to implementation of our strategic marketing initiatives, leverage on sustainable development of Nusajaya through the effective our existing operations to deliver organic growth and use our core planning and management of water, energy, waste and strengths and experience to pursue new businesses, to contribute environment conservation; to our revenue growth. And last but not least,

“We will proceed with extra Caution and Prudence 4. Telecommunications – where our aim is to ensure world class to ensure creation of long term shareholder value” communication services in a multi-telco environment. The Risk Management Committee regularly reviews the risk return All these strategic initiatives are under planning and at various stages profile of our investments to ensure that for every investment of execution. undertaken, the potential returns commensurate with the risks undertaken so as to create value for our shareholders on a risk adjusted basis. UEM LAND HOLDINGS BERHAD MD/CEO Operations Review

50 In view of the risks arising from the continued global economic OUR PROJECTS UPCLOSE uncertainties, we expect a challenging business environment for the Johor State New Administrative Centre (“JSNAC”) forthcoming financial year. We will improve as well as practise extra JSNAC is being developed by Cahaya Jauhar Sdn Bhd (“CJSB”), prudence in the management of our financial and human resources, a 60:40 joint venture between UEM Land Berhad (“UEM Land”) and whilst driving operational excellence to achieve greater efficiency the Johor State Government, on 320 acres of land. JSNAC will bring through upgrading our processes and systems like Quality Management, both the State and Federal Government offices together in one area, a Environment Management and Occupational Safety and Health. move which will contribute substantially to efficiencies in the workings of both the State and Federal Government.

“The ongoing catalytic and infrastructure development Phase 1of JSNAC comprises the Dewan Negeri Johor, the Menteri in Iskandar Malaysia complement our initiatives” Besar and State Secretary Office Complex, two clusters of State Given that Iskandar Malaysia is a priority project for the Government Government Department complexes and an open plaza Dataran and will be one of the beneficiaries of the recent RM60 billion stimulus Mahkota. Phase 1, which is fully funded by the Johor State package, we are confident that Nusajaya will be able to capitalise on Government, has been completed. the growth potential of Iskandar Malaysia and remain an attractive investment proposition. Moreover, we can expect spill over benefits Phase 2A involves the development of a mosque next to the Dewan from concurrent development of catalytic projects like Legoland Negeri Johor, with a total capacity of 6,000 “jemaah”. Other facilities Theme Park, Educity and Medini as well as the Johor Bahru – include a mini library, counselling room, seminar room, mini clinic and Nusajaya Coastal Highway, which is currently under construction, dialysis centre. The earthwork and piling works have been completed that will further enhance the investment value of Nusajaya. and the mosque is scheduled to be completed in 2010.

Phase 2B comprises the development of staff quarters for the Johor “Great difficulties are known to have inspired great State Government in three separate parcels over 136 acres. Currently innovations” construction has not started but we expect it to be fully completed by end of 2011. The challenging environment will not detract us from our determination to act on our vision. Phase 3 which is still pending approval from the Federal Government, will be the development of the Federal Administrative Centre We view this difficult period as an opportunity for us to stay ahead of consisting of four office clusters capable of accommodating 3,000 the game. Hence, we will continue to push the boundaries of innovation staff from 33 departments. and creativity in our entire development chain to drive our performance in 2009. A dedicated team, known as Planning & Product Development, Phase 4 involves the development of the State Government is already in place to look into various innovations, from the use of the Department complex on a site fronting the Puteri Harbour lagoon. latest building material and technology to cutting edge designs, to This phase is expected to commence in 2010 and complete by 2012. create products which redefine lifestyles. Phase 5 known as Laman Jauhar, is a tourism-based project that is expected to commence in 2010 and complete in 2012. “Expanding our business” Having translated our vision for Nusajaya, our aspiration is to expand Puteri Harbour our footprint into Klang Valley. This was realised with the acquisition The luxurious appeal of Puteri Harbour is unrivalled in the region and of 98 acres of development-ready contiguous land in Cyberjaya on will shape the future perception of luxury. UEM Land Holdings will 31 December 2008. We believe that this investment comes at an develop Puteri Harbour into a world class integrated waterfront and opportune time given the recent completion of the Maju Expressway, marina, offering unsurpassed luxurious waterfront living, dining, a dedicated highway that directly links Kuala Lumpur to Putrajaya / entertainment, arts and culture, with panoramic views of the Straits of Cyberjaya, which has made Cyberjaya more accessible than ever Johor. Puteri Harbour will be spread over 688 acres of land and will before. Whilst Nusajaya remain our key focus in the short to medium include high end residential, commercial and retail properties, resorts, term, we will continue to look out for good opportunities to diversify hotels, a convention centre, a 76-berth public marina and a 200-berth geographically. private marina, a mega yacht berthing terminal, a clubhouse, a sales gallery and many other amenities.

“We are undeterred by challenges” This project will be developed in multiple phases, with expected completion in 2020. The initial Phases 1, 2 and 3 will concentrate Accordingly, we have set challenging Headline Key Performance on creating development ready land for building construction and Indicator (“KPI”) targets of 20% for revenue growth and 6% for return providing public amenities which include an inner and outer lagoon, on equity for FY2009. public marina, satellite clubhouse, promenade and mega yacht berthing facilities. UEM LAND HOLDINGS BERHAD

The facilities completed to date include the clubhouse, public marina, Afiat Healthpark 51 hardscape and softscape at the promenade. On 15 January 2009, Spread over 68 acres, Afiat Healthpark, designed to meet the present Puteri Harbour opened its channel to the Straits of Johor and gaps in the healthcare market and respond to increasing public welcomed the first yacht into its public marina. demand for better health care services and facilities, will cater to three distinct areas in healthcare; modern medicine, traditional and On the marketing side, we continued to gain international visibility complementary medicine and wellness. This development will include with our participation in Boat Asia 2008 held at Keppel Marina in a health screening centre, private specialist clinics, outpatient clinics, Singapore. We also persisted with our strategy of securing strategic a commercial village, a nursing college, a rehabilitation centre, a dialysis development partnerships, particularly with international investors centre and facilities for traditional and complementary medicine. with track records in developing luxurious waterfront projects. This opportunity allows us to leverage on their branding and market reach. The estimated gross development value for the developed land parcels Since securing our first partner, Limitless LLC Holdings Pte Ltd, a in Afiat Healthpark is RM92.7 million (excluding building). business unit of Dubai World, in December 2007, we have secured two other strategic partners. During the year under review, we have completed the secondary infrastructure works for Phase 1 covering 36 acres and the land is now In June 2008, we signed a Sale and Purchase Agreement with ready for development by multiple healthcare and medical operators. DAMAC Properties Malaysia Sdn Bhd, a member of the DAMAC Group of Dubai, for the purchase of 43.5 acres of commercial land In April 2008, we sold 2.7 acres of land to Columbia Asia Sdn Bhd in the Commercial South and Private Marina precincts for RM396.4 for the development of a 80-bedded hospital. This proposed hospital million, to be developed into commercial and residential properties with development will serve as a launching platform for other initiatives. an estimated gross development value of RM3.8 billion. Furthermore, we entered into a Subscription and Joint Venture Agreement with East Ledang United Malayan Land Bhd in October 2008 to develop residential, To be developed in seven phases, East Ledang is a gated high-end, commercial and retail properties on 8.8 acres of land. With these low density, resort style residential development. Its secured, gated strategic partnerships in place, we hope to expedite the development and guarded residential precinct covers an area of 275 acres and will of Puteri Harbour and diversify our development and implementation comprise 861 high-end residential units while a further 90 acres have risks. been allocated for future developments including international and private schools, a clubhouse, commercial properties and condominium Moving forward, we also intend to develop selected components units. Completion is expected in 2015. Its “East meets West” theme within Puteri Harbour ourselves to add to our property portfolio. combines tropical gardens, forests, lakes and wetlands with This will help diversify our income stream in the future through state-of-the-art facilities, fixtures and fittings. either sale or lease of completed units. Phase 1, comprising 139 units, was launched in February 2008 Southern Industrial and Logistics Clusters (“SiLC”) and has a current take up rate of 75%, with a price range between SiLC will be a managed industrial park focused on the development of RM590,000 to RM960,000 and estimated gross development value the value chains of integrated “clean” and “green” industrial clusters in of RM88.6 million. Preparation is currently underway for the launch advanced technology, logistics as well as health and nutrition. SiLC’s of Phase 2. objective is to build an industrial community comprising major production players, supporting industries, research houses, regulatory The gross development value of this entire project is estimated bodies and other related parties to achieve business efficiency and at RM2.4 billion. promote innovation. Horizon Hills The earthworks and infrastructure works for Phase 1, developed over a Horizon Hills is being developed on 1,227 acres of land in Nusajaya, gross land area of 300 acres, with a net saleable area of 211 acres for by Horizon Hills Development Sdn Bhd, a 50:50 joint venture between light and medium industries was completed in 2008. Close to 60% UEM Land and Gamuda Berhad. This will be executed in 12 phases has been taken up by both local and international investors to date. and will have 12 exclusive gated precincts on completion, expected in 2020. Earthworks have started in Phase 2A which covers a gross land area of approximately 85 acres, with a net saleable area of 64 acres for light Horizon Hills is a mixed residential and golf course development with and medium industries, of which 26 acres have already been pre-sold. emphasis on design quality, community, amenities, healthy lifestyle and Infrastructure work is expected to be completed by end of 2009. security. To date, a total of 821 property units have been launched in the Gateway Precinct, Golf Precinct and Expatriate Village and Shops. The gross development value of the current phases is RM287.5 million 75% of these have been sold. (excluding building) while the overall value is RM901.7 million (excluding building). Under planning is the creation of a biotechnology centre of excellence and a logistics terminal precinct to further spur the growth of SiLC as a premier industrial development. UEM LAND HOLDINGS BERHAD MD/CEO Operations Review

52 The 18-hole signature golf course and clubhouse were completed in July 2008 and the sold units in Gateway Precinct were delivered to their happy owners in February 2009. The Golf Precinct and Expatriate Village and Shops are expected to be completed by 2010.

The gross development values of the Gateway Precinct, Golf Precinct and Expatriate Villages are RM34.0 million, RM74.0 million and RM20.0 million respectively, with an overall value of RM2.7 billion for the entire project.

Nusa Idaman Nusa Idaman positioned as a mid-market mixed development comprising residential and commercial units will be developed in eight phases and the entire project is expected to be completed by 2012 with a gross development value of RM776.0 million.

For Phases 1 to 4, about 387 units have been sold out of a total of 464 units launched. For Phase 5B, which is currently under construction and will be completed this year, 113 units have been launched with 72 units sold.

Ledang Heights Ledang Heights is a gated community of exclusive bungalows around a landscaped central park. It is developed on 360 acres of rolling hills with lake views. Originally sold as vacant bungalow lots with 72% sold by 2006, the company made a strategic decision at the end of 2006 to offer the remaining unsold lots as completed bungalow homes. We expect to complete the overall development of the bungalows in 2010.

Blocks 20-24, Cyberjaya We are continually on the lookout for good investment opportunities to tap into growth potential locally and overseas to meet our long term strategy of diversifying the geographical location of our developments as well as our source of income. At the end of 2008, we expanded our footprint into Cyberjaya, a project which met our stringent investment criteria, with the acquisition of 98 acres of freehold site adjacent to the Central Business District of Cyberjaya.

This development will be divided into several parcels with each having a different theme and design concept. It will comprise a total of 2,865 residential units of mixed landed and high rise strata, and limited commercial components in the form of SOHO units contained in a block of high rise building and the Village Centre. There will also be a Club Village, designed as a series of pavilions scattered along the length of the stroll garden and linked by covered walkways.

The entire project will take eight to 10 years to complete and the gross development value is estimated to be in excess of RM1 billion.

NOTE All figures for the projects are as at end of February 2009. UEM LAND HOLDINGS BERHAD

53 UEM LAND HOLDINGS BERHAD corporate responsibility

Business Communication, among others. These training workshops 54 “BUILDING ICONS BY BUILDING COMMUNITIES, were attended by a total of 250 participants from the Group. BUILDING PEOPLE AND BUILDING ECO-CONSCIOUSNESS” OUR CORPORATE RESPONSIBILITY At the heart of our culture is the focus on excellence in leadership, The focus on leadership, quality, innovation, eco-consciousness, innovation, quality and service which is formalized by our new structured community building, workplace safety and health, as well as service Culture of Excellence Program. This program was implemented in the excellence is the heart of our corporate responsibility. fourth quarter of 2008 covering all employees. Future phases in 2009 will be more focused on front-line employees with the objective of We believe that our human capital is the driving force behind our fostering and strengthening employee-stakeholder relations to make success and the key building block in our aspiration to become a world us more competitive and customer-centric. Efforts are being made class entrepreneurial, profitable and sustainable property company to have this program jointly certified with UEM Academy. reputed for innovative and quality real estate products and services. Our employees’ welfare, safety and health are hence of paramount In support of the Group’s human capital development initiatives, importance to us and we ensure their well being by observing strict managers and management staff are given the opportunity to attend Safety and Health standards in our workplace. various modules of the leadership development program, leading to a Masters degree in Business Leadership from Northumbria University The Group is also constantly aware of our duty to empower our people and Newcastle Business School. New recruits are also encouraged with skills and knowledge to achieve a quality, motivated and dedicated to participate as part of their long term career and skills development workforce which not only sharpens the Group’s competitive advantage, plan. More than 50% of our managers have enrolled and participated but has a positive impact on our workplace, customer relations, business in this program. partnerships and the communities in which we have a presence. As part of our commitment to upgrade our employees’ skills and enhance Also, recognising the need for sustainable business practices, we their knowledge, our employees are also sent to participate in public embrace international standards of quality and environment management conferences, seminars and programs conducted by UEM Academy systems by implementing stringent site controls and adopting “cleaner” and other conference organizers/training providers. building technology to mitigate any impact our projects may have on the environment. Simultaneously, our drive towards being a more customer To further strengthen our human capital, we have embarked on a focused organisation is manifested through the development of our Competency Assessment for five job families; Human Resource, Customer Relationship Management (CRM) system, designed to help Finance, Business Development, ICT and Corporate Communication. us understand our customers and meeting their expectations better, This exercise was launched with the aim of identifying competency gaps ultimately enhancing our customers’ experience with our brand. and development opportunities in a structured framework. The results of the Assessment will also be used for Succession Planning purposes Our desire to play a positive role in the community has spurred us and long term development of our human capital. to initiate and support an extensive range of programs in aid of youth education, community welfare and development as well as Recognising that employee engagement is key to driving the Group the environment. ahead, we constantly seek innovative ways to improve employee communication, staff bonding and teamwork. With this in mind, a collaborative effort between Human Resource, Corporate “EMPOWERING OUR PEOPLE WITH KNOWLEDGE TO PARTICIPATE Communication and ICT resulted in the launch of the Company’s IN BUILDING A PROSPEROUS AND LASTING ORGANISATION” employee web portal which created new communication channels HUMAN CAPITAL DEVELOPMENT between employees, by encouraging postings and feedbacks. Project We believe that our people are our most valuable resource and updates, company news and events, as well as announcements on the cornerstone of our success. Human Capital Development is an new employees, marriages and employee welfare matters are posted integral part of our corporate culture and is essential for building our on this portal to keep all employees apprised. organisational capabilities and sharpening our competitive advantage. At the same time, various employee activities like weekly aerobic To empower our people with knowledge and improve their functional classes, zapin dancing classes and monthly religious talks were skills, which ultimately will have a positive impact on them as well held throughout the year to reinforce our teambuilding initiatives, and as the company, our business partners and the community, training contribute to developing a healthy workforce with balanced work life. remains a top priority. Events such as the Staff & Family BBQ Nite at Puteri Harbour in December 2008 further engages employees by recognising their In 2008, on top of external training, we implemented 10 in-house contributions towards organisational objectives and appreciating training programs on a wide range of business competencies, from their respective families. The Group also promotes employee welfare leadership development to English language competency. This through contributions towards marriages, births and bereavements. translated to an average of one in-house training program a month and an average of 2.16 training man-days in 2008. Throughout the In the area of recruitment, we are an “equal opportunity” employer, year, we carried out training workshops on Construction Quality and offering employment entirely based on merit, without any bias towards Assessment System (“CONQUAS”), First Aid & CPR, Key Performance gender or personal background. Our current workforce comprises Indicators (“KPI”), seven Quality Control (“QC”) Tools and English for 59% male employees and 41% female employees. We believe that UEM LAND HOLDINGS BERHAD

employees with the best talent will help us propel our business to UEM Land Berhad (“UEM Land”) was also certified to an upgraded 55 greater heights of achievement. Occupational Safety and Health, OHSAS 18001:2007, in November 2008, reflecting our commitment to safeguard the health and safety The same ‘merit’ principle also applies to the issue of promotion. With of our employees, customers and suppliers. our Performance Management System in place, deserving employees with proven track records of high performance over a period of three Constantly striving to achieve even higher standards of environmental consecutive years are considered for promotions when appropriate management to mitigate the impact of our projects on the environment, vacancies arise. UEM Land Holdings implemented a comprehensive Environment Management System in January 2009. This is scheduled to proceed with Whilst planning our future need for trained human capital, we found SIRIM certification to MS ISO 14001:2004 standards in October 2009. the opportunity to contribute to building our communities at the same time through our internship and graduate training programs. We There is an increasing demand from customers, regulatory bodies implemented the Young Executive Scheme (“YES”) as part of our effort and the community on organisations to demonstrate responsible and contribution towards providing training for young graduates from environmental performance, provide a safe working environment, various backgrounds and disciplines. YES trainees are exposed to the provide quality products and services and practise effective real work environment over the entire 12-month program with quarterly construction safety. In response to this trend, we plan to start the assessments of their level of performance. Those who make the grade implementation of an Integrated Management System, which allows may be absorbed as permanent staff. To date, we have offered us to manage quality, safety and environmental issues more efficiently. permanent employment to 25 trainees. One integrated certificate will be available for all three management systems by the third quarter of this year, eliminating unnecessary A concurrent program also provides work exposure and training for duplication and enabling savings in our time, money and resources. undergraduates from local universities and polytechnics. Interns are taken in for a 3-month practical training program in which they are Construction Quality Assessment (“CONQUAS”) training was initiated trained in various aspects of work life. As at December 2008, we have in November 2007 with the Building Construction Authority (“BCA”) a total of 10 practical trainees within the Group. International in Singapore. The CONQUAS system will promote standardisation of quality in our mixed development and enhance our image as an eco-friendly developer that consistently delivers “ENHANCING THE WORKPLACE TO ENGAGE OUR PEOPLE FOR environmentally sustainable projects. All our construction tenders MUTUAL BENEFITS” have incorporated the CONQUAS requirement since the beginning QUALITY, HEALTH, SAFETY AND ENVIRONMENT of the year under review. At UEM Land Holdings, we continually strive to achieve higher standards in our entire development and operational chain by regularly “DRIVING CUSTOMER EXPERIENCE WITH SERVICE EXCELLENCE” re-establishing our benchmarks on the quality of our products and services, health and safety of our employees and management of our CUSTOMER RELATIONSHIP MANAGEMENT (“CRM”) environment, in order to ensure that we stay on track to achieve our goal A CRM project was initiated in 2008 with the objectives of enhancing of becoming a world class prosperous and lasting real estate company . customer satisfaction, increasing customer retention and improving Consequently, policies in quality, workplace health and safety as well as overall customer and investor perception. Simultaneously, this allows eco-conscious practices, are firmly entrenched along our entire value the Company to fully integrate customer data in order for us to obtain chain. We have systematic checks and balances in place, to ensure fuller knowledge and understanding of our customers, investors and that strict observation of these standards are enforced. business partners and their needs.

Over time, our firm commitment to quality, workplace health and safety, A CRM Initiative Study has been presented to the Board with findings, and safeguarding the environment, not only enhances customer recommendations and an action plan. Currently, potential CRM satisfaction and our community, but also contributes to building proprietary vendors are being evaluated based on the adequacy and UEM Land Holdings into a profitable and sustainable organisation functionality of their products. This project, when fully implemented in with an engaged workforce. early 2010, will add further impetus to our customer centric business processes and in achieving customer service excellence. To reinforce our commitment to continually achieve higher standards in our operations along the entire development chain, from project “REACHING OUT.... BUILDING AN ABUNDANT FUTURE FOR OUR conceptualisation to the timely delivery of quality products to our customers, COMMUNITIES” we have obtained a number of internationally recognised certifications. CORPORATE SOCIAL RESPONSIBILITY (“CSR”) Our Quality Management System was awarded the MS ISO The Group has great respect for the social norms and ethics of 9001:2000 in November 2008 and this was further upgraded to our local communities and we strongly believe in giving back to an even higher standard with the MS ISO 9001:2008 certification. these communities through the provision of products, services and These certifications promote the adoption of a process approach employment opportunities. Whilst enhancing the quality of life and to development, implementation and improvement of our Quality standard of living of the communities in which we operate, we also keep Management System. This approach emphasises the importance in sight our commitment to create shareholder value. This constitutes of understanding customers and meeting their various requirements. the fundamental principles of all our operations. UEM LAND HOLDINGS BERHAD Corporate Responsibility

56 The Group’s CSR policy is focused on education and community ICT Knowledge and Appreciation Program building. Our programs are designed to contribute to capacity building The ICT Knowledge and Appreciation Program was designed to and human capital development to enable the local communities in create awareness of the importance of ICT and instil appreciation of Nusajaya to participate and benefit from its extensive development. its application among the students. Started in 2007 to complement the Government’s efforts to encourage the application of Information, In 2008, the Group intensified many CSR activities which reflect our Communications and Technology (ICT) in education, our program aims serious intent to contribute to these communities in a meaningful and to contribute to bridging the digital divide between the urban and rural sustainable manner. The Group continuously supports a wide spectrum communities in Gelang Patah. of community needs which include education, community welfare, environment enhancement and general communal well being. The program’s curriculum covers basic aspects of using IT with practical hands-on training software application and the Internet. Some 1500 Education students from Form 1 to Form 5 participated in the workshops which Education has been identified as a key enabler that will contribute stretched over three months from February 2008. This was later towards bridging the socio economic and digital divide between followed by the ICT classes in June for primary schools, which the urban and rural communities. Cognizant of this and in view of benefitted some 750 students from 12 schools. the current status of the local communities, the Group had committed to CSR on education for the Nusajaya communities since 2007. In August 2008, the ICT program was expanded to include PINTAR This commitment was further strengthened in 2008 when UEM Land school teachers with its inaugural workshop series for teachers to officially “adopted” 16 schools comprising 12 primary schools and four increase their competency and proficiency, with the ultimate objective secondary schools under the Promoting Intelligence, Nurturing Talent to enable them to assist their students in developing IT skills. The 2-day and Advocating Responsibility (“PINTAR”) Program. workshop involved some 60 teachers who were exclusively trained by certified ICT instructors on basic and intermediate aspects like PINTAR, spearheaded by Khazanah Nasional Berhad, an investment Microsoft Office–Word, Excel, Power Point, Internet and e–Application. holding arm of the Government of Malaysia, was launched in December 2006. PINTAR’s mission is to ensure a conducive learning environment Pintar Al-Quran Program which motivates school children. Working together with the Johor Bahru The Group continually looks for ways in which we can play a meaningful District Education Office, UEM Land identified and selected needy role in education and community development. The Al-Quran reading schools to implement two major flagship programs under the PINTAR program, initiated and fully funded by UEM Land Holdings, for pre- umbrella – the Academic Excellence Program and ICT Knowledge schoolers was rooted in the belief that educating the young to become and Appreciation Program, which have benefitted more than 2,600 Al-Quran literate will instil spiritual and moral values which ultimately students to date. benefits the community.

Academic Excellence Program The Teachers Training Course for Pintar Al-Quran Program started The long term objective of the Academic Excellence Program is to help on 28 June 2008, as part of the ‘pilot’ Pintar Al-Quran program for schools raise the academic performance of their students and to bridge pre-schoolers in Gelang Patah. Throughout the 2-day course, the the gap between the various socio-economic sectors of the community. Terengganu Islamic Foundation (“YIT”) as Program Advisor and Since 2007, the Group has been actively supporting educational activities Modules Provider, exclusively trained 16 certified religious school designed to help the students achieve outstanding academic results. teachers on teaching techniques and methodology. Another 2-day refresher course was held on 31 January 2009 to further boost the In April 2008, the Group collaborated with Berita Harian, noted for its teachers’ enthusiasm and commitment. The latest CSR project was Didik, Minda and Skor programs, to organise a series of educational held on 30 June 2008 at five pre-selected KEMAS kindergartens clinics and workshops for UPSR, PMR and SPM students. in Gelang Patah.

These educational series were conducted at Universiti Teknologi The Pintar Al-Quran Program is specifically designed for children aged Malaysia (“UTM”), benefitting 750 of our PINTAR students; the PMR five and six years old, and has benefitted an estimated 150 pre-school Workshop on 5 - 6 April 2008, the SPM Workshop on 12 - 13 April children. 2008 and concluded with UPSR Clinic on 19 -20 April 2008. It covered core subjects such as Bahasa Melayu, English, Mathematics, Science Sponsorship in Education and History. Our PINTAR students were taught the correct formats, In additional to our flagship CSR programs, the Group has also techniques and strategies in answering examination questions and sponsored and supported the following education programs: to enhance their level of confidence. • SMK Kompleks Sultan Abu Bakar’s SPM Excellence and Motivation Program to produce Straight A students, from Our efforts in the Academic Excellence Program over the last two years 12 April – 8 November 2008; were reflected in the overall improvement in the examination performance • Gelang Patah Community Service and Education Camp in our PINTAR schools in 2008; with 32% increase in the number of organised by Kolej Perdana, Universiti Teknologi Malaysia, students achieving 5A’s in their UPSR and an impressive 93% increase from 7-11 June 2008; in the number of students achieving 7A’s and 8A’s in their PMR, compared with the previous year. UEM LAND HOLDINGS BERHAD

• Human Capital Leadership Camp organised by SMK Taman further manifested through the strategic management of Nusajaya’s 57 Nusajaya to help students build their leadership skills, from water, waste and energy, as well as environment conservation. 13-15 June 2008; • “Pursuing Your Dreams”, an event organised at SK Ladang On 8 November 2008, UEM Land collaborated with Universiti Pendas to increase awareness of the importance of education Kebangsaan Malaysia (“UKM”) to draw up an Environment Masterplan on 9 August 2008; for Nusajaya as part of our strategic efforts to provide a sustainable • A 4-day UPSR Workshop and Motivation program for Year development for Nusajaya. Six of SK Sungai Melayu students from 18 - 22 August 2008. Given that Nusajaya is located adjacent to the 91.2 square kilometres Community Development Sungai Pulai Ramsar site, the largest in West Malaysia, we are acutely One of the Group’s key community development philosophies is to conscious of our responsibility to maintain the biodiversity and support and enhance the lives and livelihood of the community in which eco-balance of the area and mitigate any impact of our development we operate, through our various contributions. on the site.

Contributions in the last few years included a fixed lease at a nominal As part of the Group’s environmental conservation strategy of promoting fee for a 500-acre mature oil palm plantation to Koperasi Nusajaya, public awareness and appreciation of the intrinsic value and functional whose members include the villagers of Gelang Patah who derive significance of the mangrove ecosystem of Sungai Pulai Ramsar, income from the harvest; cost of preparing the Pasar Tani site in Gelang UEM Land sponsored a coffee table book produced by UKM on Patah to provide trading opportunities and convenience for residents; “Bio-Diversity of Sungai Pulai Ramsar Site Johor”, a simple introductory upgrading and repair works for the existing mosque at Kampung Sungai guide to the rich flora and fauna biodiversity of the area. The book has Melayu; and donations to the needy during the Hari Raya festivals. been distributed to public libraries, academic institutions and our PINTAR schools in Gelang Patah. In early February 2008, we donated a custom-built boat for the villagers of Kampung Sungai Melayu for transporting school children as well Further conservation efforts included a tree planting activity at the as teachers between Kampung Sungai Melayu and their schools in Ramsar site, in collaboration with the Ministry of Environment and Johor Bahru. UKM, which saw participation of UKM undergraduates and students from Gelang Patah area. In August 2008, UEM Land participated in the Community Policing Nusajaya Zone B program to promote better relations between the community and the police in preventing crime in the Nusajaya neighbourhood.

In October, UEM Land organised Buka Puasa events for the underprivileged within the Gelang Patah community. In collaboration with UMNO Gelang Patah, the underprivileged communities were then identified and given assistance in the form of food supplies such as cooking oil, tea and coffee, flour, sugar, rice as well as ‘duit raya’.

The recipients were from Kampung Ulu Pulai, Kampung Sungai Melayu, Kampung Tebing Runtuh and Kampung Pendas Laut comprising senior citizens, single mothers and the physically challenged. UEM Land also joined forces with Jabatan Agama Islam Johor to provide Raya goodies to the Orang Asli community at Kampung Simpang Arang.

UEM Land also donated a set of computer and printer to the Village Security and Development Committee of Kampung Ulu Pulai in Gelang Patah .

Environment During the planning and design of Nusajaya, the Group made a strategic decision to take a balanced approach towards its development by considering the economic, social and environmental dimensions that would contribute towards a sustainable development.

A network of “green” open spaces has been planned in Nusajaya together with the 650-acre Regional Park which would form the “green lung” of South-West Johor. Our commitment to the environment is UEM LAND HOLDINGS BERHAD Media Highlights

58 UEM LAND HOLDINGS BERHAD

59 UEM LAND HOLDINGS BERHAD Event highlights 2008–corporate

1 4 60 23 FEBRUARY 12 JUNE East Ledang, UEM Land’s UEM Land entered into signature resort residential estate a conditional Sales and Purchase development was unveiled in Agreement valued at RM396.4 Nusajaya. Planned and designed million with DAMAC Group of around the concept of East Dubai for the sale of three parcels meets West, East Ledang has 31 of commercial land totalling themed gardens that include a approximately 43.5 acres that 20-acre forest, wetland gardens forms part of the 688-acre Puteri and lake gardens with a tropical Harbour development. DAMAC resort ambience. plans to develop commercial and residential properties and a 2 1 2 10–12 APRIL private marina with a projected UEM Land organised a Security gross development value of Conference & Training to get approximately RM3.8 billion. buy-in from key stakeholders through understanding, information 27 JUNE and knowledge sharing, to ensure The new OSHE Policy was the successful implementation of officially launched to all staff the Nusajaya Security Blueprint. at Nusajaya Centre by Wan Speakers at the Conference Abdullah Wan Ibrahim. The included the Royal Malaysian approach “Towards Incident Police, GE Security, Sinclair Prevention” was adopted and Knight Merz and UEM Land. a target of ZERO ACCIDENT at the workplace was set. 15–17 APRIL 3 4 5 UEM Land joined forces with 05 JULY Iskandar Regional Development UEM Land signed two separate Authority (“IRDA”), Iskandar Memorandum of Collaboration Investment Bhd and Danga Bay (“MOC”) agreements with Sdn Bhd to jointly promote, exhibit Telekom Malaysia Bhd and and showcase the development TTdotCom Sdn Bhd, a subsidiary and investment opportunities in of TIME dotCom Bhd to create Iskandar Malaysia at the second a multi-telco environment in Cityscape Asia, Suntec Singapore. Nusajaya. In addition to their Cityscape Asia is an influential existing nationwide infrastructure, annual networking exhibition and the two service providers will put conference on all aspects of the in additional network infrastructure property development cycle. and the latest telecommunication 5 6 technologies to provide the 3 05 JUNE connectivity for high speed The Southern Industrial and data, voice, video and image Logistics Clusters (“SiLC”) held a communication services that will seminar ‘Investment Opportunities showcase Nusajaya as a model In The Southern Industrial and modern digital city. This additional Logistics Clusters’ at Suntec infrastructure will form the City, Singapore to highlight the backbone for Nusajaya’s Intelligent advantages of the managed City Management Platform. industrial park to potential manufacturers, industrialists, small and medium enterprises and investors. 7 8 UEM LAND HOLDINGS BERHAD

9 07 JULY 14 OCTOBER 02–03 DECEMBER 61 Horizon Hills Golf & Country Club UEM Land signed a Subscription The 3rd UEM Group Chairmen’s saw its maiden tee-off by VIPs, and Joint Venture Agreement Forum and Directors’ Gathering comprising Tan Sri Dr Ahmad with United Malayan Land Bhd were attended by some 40 Tajuddin Ali, Tan Sri Dato’ Mohd to form a joint venture to develop Chairmen and Directors from Sheriff Kassim, Dato’ Ir Abdul 8.8 acres of prime land in the UEM Group of companies. Rahim Abu Bakar, YB Dato’ Hj Abd Puteri Harbour. Aziz Sapian ADUN Nusajaya, 17–18 DECEMBER 10 Dato’ Ikmal Hijaz Hashim and 30 OCTOBER– 02 NOVEMBER UEM Land Holdings launched its Wan Abdullah Wan Ibrahim. Nusajaya was the co-sponsor of Quality Assurance, Occupational the Iskandar Johor Open which Safety, Health and Environment 6 08 JULY attracted 156 players from 25 (QASHE) Week 2008 at Puteri Some 30 members of the countries with a prize money of Pacific, Johor Bahru. The two-day 9 various media organisations, from US$ 500,000. Twice U.S. Open seminar attended by 200 people, mainstream to golf publications, Champion, Retief Goosen seized comprising UEM Land Holdings attended the Media Preview for the title and was presented the staff, consultants and contractors Horizon Hills Golf & Country winning trophy by Tan Sri Dr was themed “QASHE Culture in Club to experience the unique Ahmad Tajuddin Ali. the workplace: Towards Better characteristics of this new Quality Products with Zero golf course. 13 NOVEMBER Incident at Workplace”. UEM Land hosted a Hari Raya 7 15 JULY Open House at Persada Johor At the launch ceremony, Tun Musa Hitam paid a visit to Convention Centre for some 600 UEM Land Holdings was awarded Nusajaya and was briefed on the guests as a show of appreciation the ISO 9001:2000 and OHSAS current and future developments to all its stakeholders. 18001:2007 certifications by at Nusajaya by Dato’ Ahmad SIRIM Chairman and Chief 11 10 Pardas Senin and Zulkifli Tahmali, 18 NOVEMBER Executive Officer, Tuan Hj followed by a visit to East Ledang, UEM Land Holdings’ debut Yahaya Hj Ahmad. JSNAC and Puteri Harbour. on Bursa Securities marked the culmination of a major 23 DECEMBER 30 JULY restructuring exercise which To end the year in style and A team of seven Singapore- repositioned the Group to take as an expression of gratitude based journalists from Standard full advantage of its next phase for the unwavering support & Poor, Media Corp’s 938 Live!, of growth. and dedication of the staff, the Today, BERNAMA, Smart Investor Group’s Annual Family Day was 12 and Thomson Reuters visited 27 NOVEMBER held at the Promenade in Puteri Nusajaya. The day started with a Subsidiary Nusajaya Harbour. The event was attended 20-minute presentation by Zamry Development Sdn Bhd, the by 800 guests, comprising UEM Ibrahim of Strategic Marketing, developer of Nusa Idaman, Land Holdings’ staff and their followed by a tour of East Ledang, signed a Sale and Purchase families. 11 JSNAC, Puteri Harbour and SiLC. Agreement with R.E.A.L. Education Group, for the sale 8 27 AUGUST of half an acre of land in Nusa Nusajaya received a royal visit Idaman for the establishment from HM Sultan Hassanal of a Child Enrichment Centre Bolkiah of Brunei, who wanted (“CEC”) kindergarten. to observe firsthand the ongoing development in the area. The Sultan, who was in Johor for the 12th Malaysian-Brunei annual leaders’ consultation, was accompanied by YAB Prime Minister Datuk Seri 12 Abdullah Ahmad Badawi. UEM LAND HOLDINGS BERHAD Event highlights 2008–CSR

13 62 22 FEBRUARY JUNE The villagers of Kampung Sungai The ICT Knowledge and Melayu received a new custom- Appreciation Program, initiated in built fibreglass boat from UEM February at the secondary school Land. The new boat will be used level was followed through with a to transport school children as 2-month program at all the well as teachers to their schools PINTAR primary schools. in Johor Bahru. 25 JUNE 14 28 FEBRUARY UEM Land officiated the “Schools UEM Land kickstarted a 3-month of Johor Bahru District Pencak ICT Knowledge and Appreciation Silat Competition for Year 2008” 13 Program at the secondary level in at Dewan Bistari of SMK Gelang all the PINTAR schools to create Patah, one of its adopted awareness on the importance of PINTAR schools. ICT and to develop their IT skills. 15 28 JUNE APRIL UEM Land kickstarted the The series of UPSR, PMR and Teachers’ Module Training Course SPM “Skor A” workshops for for Pintar Al-Quran Program PINTAR schools were conducted on 28 June, as part of its ‘pilot’ in collaboration with Berita Harian Pintar Al-Quran Program for over three consecutive weeks pre-schoolers in Gelang Patah. in April; the PMR Workshop on Following the training course, 5 - 6 April 2008, then followed this latest CSR project was 14 by the SPM Workshop on 12 - 13 implemented on 30 June, April 2008 and concluded with at five pre-selected KEMAS the UPSR Clinic on 19 -20 April kindergartens in Gelang Patah. 2008. It covered core subjects such as Bahasa Melayu, English, 02 JULY Mathematics, Science and History. Some 40 participants from Johor’s Geography Teachers Association 13 MAY participated in a site visit to “An Evening in Nusajaya” Nusajaya to get better insights to brought together UEM Land’s the development of Nusajaya’s 16 PINTAR school heads at catalysts projects. Nusajaya Centre to give them a better understanding of 23 JULY UEM Land’s Corporate Social UEM Land shared its experience 15 Responsibility (“CSR”) Program, on the PINTAR program at PINTAR. The occasion provided the 9th Roundtable Meeting the forum for school heads and organised by Khazanah. The UEM Land management to meeting provided a knowledge informally interact and get platform for GLCs to interact, acquainted. The event concluded network and share their best with a site visit to JSNAC, Puteri practices in the implementation Harbour and East Ledang of PINTAR. followed by high tea at Nusajaya Sales Gallery. Apart from PINTAR members, the mainstream civil society organisations such as MERCY Malaysia and Yayasan Warisan 16 Anak Alam, were also present to share their views on possible programs that can be carried out as PINTAR’s Blanket Program. UEM LAND HOLDINGS BERHAD

19 Other presenters included the 08 NOVEMBER 63 Penang Education Department, The coffee table book “Bio Malaysia Airlines and Proton. Diversity: Ramsar Site Sungai Pulai” produced by Universiti 09 AUGUST Kebangsaan Malaysia and Sponsored by UEM Land, sponsored by UEM Land was teachers and some parents of launched. The book is a simple SK Ladang Pendas teamed up to introductory guide to the rich organise a get-together with the flora and fauna biodiversity of the students to increase awareness Sungai Pulai mangrove forest and of the importance of education. the Ramsar site of South Johor, SK Ladang Pendas, one of aimed at promoting public UEM Land’s PINTAR Schools, awareness and appreciation of 17 is attended by 94% of the Orang the intrinsic value and functional Asli community from Kampung significance of the mangrove Simpang Arang. forest ecosystem.

20 18 AUGUST 08 NOVEMBER UEM Land launched its inaugural UEM Land signed a Grant PINTAR Teachers’ ICT Knowledge Agreement with Universiti and Appreciation Program series, Kebangsaan Malaysia for a in collaboration with Johor Bahru research fund of RM230,000 Education Office, Johor to develop the Environment Educational Technology Division Masterplan for Nusajaya. and the respective PINTAR school heads. Specifically designed for 19 DECEMBER 18 teachers, it is aimed to improve Distribution of copies of “A their competency and proficiency Second Chance – Life and in ICT, ultimately enabling them to Mission of Arsyad Ayub” to all assist their students in developing UEM Land’s PINTAR schools IT skills. in Gelang Patah.

16 30 AUGUST 30 DECEMBER Themed “Nusa Idaman UEM donated a computer Celebrates Merdeka”, the with multipurpose printer to the 2-day event with various carnival Village Security and Development activities, symbolised our Committee of Kampung Ulu Pulai commitment to enhance the lives in Gelang Patah. of the communities in Nusajaya and promote unity amongst the 19 residents by embracing the spirit of patriotism, nationalism and loyalty in our Merdeka celebration.

17 & 18 OCTOBER In keeping with the spirit of giving and sharing during Ramadhan, UEM Land organised Buka Puasa events for the underprivileged in the Gelang Patah community and donated food supplies, Raya goodies and “duit raya”. The orang asli community, senior citizens, 20 single mothers and the disabled in the other Nusajaya villages, also received donations for their Hari Raya celebrations. UEM LAND HOLDINGS BERHAD CORPORATE GOVERNANCE STATEMENT

64 UEM Land Holdings Berhad (“UEM Land Holdings” or “the 1 BOARD OF DIRECTORS Company”) was listed on 18 November 2008 following the 1.1 The Board Composition completion of the restructuring exercise of UEM World Berhad. In accordance with the Company’s Articles of Association and unless determined by the Company in General Meeting, the UEM Land Holdings recognises the importance of good number of Directors shall not be less than two (2) or more than corporate governance and is committed to applying high fifteen (15). standards of corporate governance throughout the Group to safeguard the interest of its stakeholders and to achieve best The Board of Directors consists of eight (8) Members comprising practice in its standards of business integrity in all its activities as one (1) Managing Director/Chief Executive Officer, four (4) set out in the Malaysian Code of Corporate Governance (“the Non-Independent Non-Executive Directors and three (3) Code”). Independent Non-Executive Directors. The three (3) Independent Directors fulfill the criteria of independence as defined in the Set out here is a statement on how the Company has applied the Listing Requirements of Bursa Malaysia Securities Berhad principles of the Code and the extent to which it has complied (“Bursa Securities”). with Best Practices of the Code during the financial year ended 31 December 2008. 1.2 Duties and Responsibilities of the Board The Board of Directors of UEM Land Holdings is responsible for the overall performance of the Group. It provides stewardship to the Group’s strategic direction and operations in order to maximise shareholders’ value.

The Board’s principal responsibilities are as follows: • Reviewing and adopting a strategic plan for the Group; • Overseeing the conduct of the Group’s business to evaluate whether the business is being properly managed; • Identifying principal risks and ensuring the implementation of appropriate systems to manage these risks; • Succession planning, including appointing, training, reviewing the compensation and retention or replacement of senior management; • Developing and implementing an investor relations program or shareholder communications policy for the Group; and • Reviewing the adequacy and the integrity of the Group’s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines.

UEM Land Holdings is led and managed by a Board comprising members with a wide range of experience in relevant fields such as accounting, legal, banking, corporate finance, engineering and property development. Together, the Directors bring a broad range of skills, experience and knowledge required to successfully direct and supervise the Company’s business activities, which are vital to the success of the Group.

The Board of Directors’ meetings are chaired by the Non-Executive Chairman, whose role is clearly separated from the role of the Managing Director/Chief Executive Officer. This is to ensure a balance of power and authority.

The Non-Executive Chairman leads the Board effectively and encourages contribution from all members.

The Managing Director/Chief Executive Officer is responsible for implementing the policies and decisions of the Board, overseeing the operations and managing the development and implementation of the Company’s business and corporate strategies. UEM LAND HOLDINGS BERHAD

The roles of the Managing Director/Chief Executive Officer and For the financial year ended 31 December 2008, the Board held 65 Non-Executive Directors are delineated, both having fiduciary four (4) meetings. duties towards shareholders. Non-Executive Directors have the necessary skill, financial and business experience to bring Details of the Directors’ meeting attendances for the financial effective judgment to bear on the issues of strategy, performance year ended 31 December 2008 are as follows: and resources.

The three (3) Independent Non-Executive Directors provide Directors Status Meetings independent views; advice and judgment, taking into account the Attended interests of the Group and the minority shareholders, and are actively involved with both the internal and external auditors. 1 Tan Sri Dr Ahmad Non-Independent 4/4 This is especially so for Oh Kim Sun who is the Chairman of the Tajuddin Ali Non-Executive Audit Committee. Another Independent Non-Executive Director, Director/ Md Ali Md Dewal, is the designated Senior Independent Director Chairman to whom concerns relating to the Company may be conveyed by 2 Dato’ Ahmad Non-Independent 4/4 shareholders and other stakeholders. Pardas Senin Non-Executive Director 1.3 Conflict of Interest Directors are required to declare their respective shareholdings 3 Wan Abdullah Managing 4/4 in the Company and related companies and their interests in Wan Ibrahim Director/Chief contracts or proposed contracts with the Company or any of its Executive Officer related companies. The Directors concerned will abstain from 4 Abdul Kadir Non-Independent 4/4 any decision made in relation to these transactions. Md Kassim Non-Executive Director 1.4 Dealings in Securities of the Company Directors and employees of the Group who are in possession of 5 Md Ali Md Dewal Senior 4/4 price-sensitive information regarding the Company which are not Independent publicly available, and who deal in the securities of the Company Non-Executive are required to notify the Company within a specific timeframe Director following the date of the dealing. 6 Oh Kim Sun Independent 4/4 Non-Executive 1.5 Board Meetings and Supply of Information Director The Board will meet at least four (4) times for the next financial year, with additional meetings to be convened when necessary. 7 Dato’ Ikmal Independent 0/0 Board meetings for each financial year are scheduled before the Hijaz Hashim Non-Executive (Appointed on 1 March 2009) end of the preceding financial year. Director 8 Omar Siddiq Non-Independent 0/0 The Directors have full and unrestricted access to all information Amin Noer Rashid Non-Executive pertaining to the Group’s business affairs, whether as a full Board (Appointed on 1 April 2009) Director or in their individual capacity, to enable them to discharge their duties. There are matters specifically reserved for the Board’s decision to ensure that the direction and control of the Group 1.6 Re-election of Directors is firmly in its hands. Prior to the Board meetings, all Directors In accordance with the Company’s Articles of Association, receive the agenda together with a set of Board papers all Directors, including the Managing Director, shall retire from containing information relevant to the business of the meeting. office once at least in each three (3) years but shall be eligible for This allows the Directors to obtain further explanations/ re-election. At the first annual general meeting and in every year clarifications from management, where necessary, in order to thereafter one-third (1/3) of the Directors for the time being, or if be properly briefed before the meetings. their number is not a multiple of three (3), then the number nearest to one-third (1/3), shall retire from office at each Annual General All Directors have full access to the advice and services of the Meeting (“AGM”). All retiring Directors can offer themselves Company Secretaries who ensure that Board procedures are for re-election. adhered to at all times during meetings and advise the Board on matters including corporate governance issues, and Directors’ Directors who are appointed by the Board during the financial period responsibilities in complying with relevant legislation and regulations. before an AGM are subject to re-election by the shareholders at the The Directors may, if necessary, obtain independent professional next AGM to be held following their appointments. advice from external consultants, at the Company’s expense. UEM LAND HOLDINGS BERHAD CORPORATE GOVERNANCE STATEMENT

66 Directors who are over seventy (70) years of age are required to Audit Committee submit themselves for re-appointment annually in accordance Members Attendance at meetings with Section 129 of the Companies Act, 1965. Oh Kim Sun – Chairman 2/2 All the Directors are due for re-election at the First Annual General Independent Non-Executive Meeting (“1st AGM”) pursuant to Article 92 of the Company’s Articles of Association. Details of the Directors seeking re-election Md Ali Md Dewal – Member 2/2 at the 1st AGM are set out in their respective profiles which appear Senior Independent in the Profile of Directors on pages 41 to 43 of this Annual Report. Non-Executive The details of their interest in the securities of the Company, are set Abdul Kadir Md Kassim 2/2 out in the Analysis of Shareholdings which appear on pages 144 – Member to 148 of this Annual Report. Non-Independent Non-Executive 1.7 Training and Development of Directors The Group acknowledges that continuous education is vital for Dato’ Ikmal Hijaz Hashim 0/0 the Board members to gain insight into the state of economy, Independent Non-Executive technological advances, regulatory updates and management Appointed on 31 March 2009 strategies to enhance the Board’s skills and knowledge in discharging its responsibilities. The salient terms of reference of the Board Committees are as follows: During the year, the Board of Directors participated in two (2) in-house training sessions organised by the Legal & Secretarial • Audit Committee Division of UEM Group Management Sdn Bhd, to keep themselves The terms of reference of the Audit Committee together abreast of developments in the market as well as new statutory and with its report are presented on pages 70 to 72 of the regulatory requirements. Some of the topics covered under these Annual Report. two sessions were as follows: • Nominations & Remuneration Committee Directors’ Duties And Liabilities The Nominations & Remuneration Committee is made up – Beyond compliance entirely of Non-Executive Directors with a majority of them being Independent Directors. The members are as follows: Directors’ Performance Evaluation – Building a High Performance Board 1 Md Ali Md Dewal Overview On Iskandar Malaysia Chairman/Senior Independent Non-Executive Director 2 Dato’ Ahmad Pardas Senin 1.8 Board and Management Committees Non-Independent Non-Executive Director In discharging its fiduciary duties, the Board has delegated 3 Oh Kim Sun specific tasks to Board and Management Committees. All the Independent Non-Executive Director Committees have the authority to review specific issues delegated by the Board and to report back to the Board together with its The responsibilities of the Nominations & Remuneration recommendations and the ultimate responsibility for the final Committee include: decision on all matters lies with the entire Board. Two (2) Board Committees namely the Audit Committee and the Nominations & • assessing the size of the Board, relevant mix of skills Remuneration Committee were formed in 2008 and in 2009 the and experience and other qualities of Non-Executive Board approved the formation of the following additional Board and Directors and effectiveness of each individual Director; Management Committees: • reviewing and recommending to the Board the annual remuneration for the Executive Director(s); (a) Board Development Committee; • reviewing the performance of Senior Management and (b) Board Tender Committee; the other Directors annually; (c) Management Planning Committee; and • designing and implementing an evaluation procedure (d) Management Tender Committee. for Executive Directors; and • reviewing the proposals for the remuneration package As the Company was incorporated in the last quarter of 2008, of each member of the Company’s Committees only the Audit Committee met twice during the year ended 31 December 2008. The composition of the Board Committees As the Nominations & Remuneration Committee was only and the attendances of the members at the Board Committees formed on 26 September 2008, there was no meeting held meetings held in 2008 are as follows: for the financial year ended 31 December 2008. However, the decision of the Nominations & Remuneration Committee had been made via circular resolution. UEM LAND HOLDINGS BERHAD

• Board Development Committee 2.2 The Company’s policy on Directors’ remuneration is to attract 67 The Board Development Committee was formed on 1 March and retain Directors of high calibre needed to run the Group 2009. The members are as follows: successfully. The Managing Director/Chief Executive Officer is being paid by a subsidiary and comprised a monthly salary 1 Md Ali Md Dewal and other benefits and emoluments which are in line with the Chairman Company’s general remuneration policy for its senior management. 2 Dato’ Ahmad Pardas Senin His remuneration is structured so as to link rewards to corporate Member and individual performance. He is not paid any Directors’ fees and 3 Wan Abdullah Wan Ibrahim meeting allowances for the Board and Board Committee meetings Member that he attends. In the case of Non-Executive Directors, the level of 4 Dato’ Ikmal Hijaz Hashim remuneration reflects experience and level of responsibilities Member undertaken by each of them.

The functions and responsibilities of the Board Development 2.3 Aggregate remuneration of Directors, paid or payable, Committee is to: categorised into appropriate components as at • provide strategic direction and guidance on development 31 December 2008 is as follows: matters such as project justification, development concept (a) Aggregate remuneration of Directors’ categorised and rationale and overall positioning and expected returns/ into appropriate components: feasibility for the projects; • review and approve the design and development consultants in line with the Discretionary Authority Limit requirement; Executive Non-Executive • evaluate new projects/development proposals; Director Directors • approve major changes in direction of the development (RM’000) (RM’000) projects; and Fees and allowance – 115* • evaluate, review and recommend to the Board on the development proposals that require Board’s approval. Basic salaries, bonus and EPF 1,145** –

* For the period from 15 September 2008 (date of appointment of • Board Tender Committee the Non-Executive Directors) to 31 December 2008 ** From 1 January 2008 to 31 December 2008 The Board Tender Committee was established on 1 March 2009 to ensure that the tender process complies with relevant policies requirements. The Committee comprises (b) The number of Directors of the Company whose total wholly of Non-Executive Directors with a majority of them remuneration falls within the following bands: being Independent Directors. The members are as follows: Number of Directors 1 Abdul Kadir Md Kassim Chairman Executive Non-Executive 2 Md Ali Md Dewal (RM’000) (RM’000) Member RM50,000 and below – 5 3 Oh Kim Sun Member Above RM1,000,000 1 – 4 Dato’ Ikmal Hijaz Hashim Member

3 SHAREHOLDERS The principal functions and responsibilities of the Board Tender Committee are to consider, evaluate, approve the award of 3.1 Dialogue between the Company and Investors contracts after taking into consideration the list of tenders received, The Company recognises the importance of timely dissemination nature of procurement and the technical and commercial evaluation of information to shareholders and other stakeholders and the of tenders ranging from RM20 million to RM50 million and making Board is committed to ensure that the shareholders and other recommendation to the Board for tenders above RM50 million. stakeholders are well informed of major developments of the Company and the information is communicated to them through the following channels: 2 DIRECTORS’ REMUNERATION 2.1 The Company pays its Non-Executive Directors annual fees (i) the Annual Report; that are to be approved annually by the shareholders. In addition, (ii) the various disclosures and announcements to Bursa non-executive members of the Board and Board Committees Securities including quarterly results; and are paid a meeting allowance for each meeting they attended or participated through teleconferencing. UEM LAND HOLDINGS BERHAD CORPORATE GOVERNANCE STATEMENT

68 (iii) Corporate Planning Department and Corporate 4.4 Relationship with Auditors Communication Department that are fully responsible for The Company maintains a transparent relationship with its briefing and updating financial analysts and fund managers auditors and seeks their professional advice to ensure that of the Group’s operations, financial performances and other accounting standards are complied with. It is a policy of the AC strategic issues. to meet up with the external auditors at least twice a year without the presence of the Executive Director and Management, 3.2 Annual General Meeting (“AGM”) in accordance with the requirements of the Code. In February The AGM of the Company serves as the principal forum that 2009, the AC met up with the external auditors in the absence provides the opportunity for shareholders to raise questions of Management. pertaining to issues in the Annual Report, Audited Financial

Statements, corporate developments in the Group, the 5 DIRECTORS’ RESPONSIBILITY STATEMENT resolutions being proposed and on the businesses of the Group. IN RESPECT OF FINANCIAL STATEMENTS The Chairman as well as the Managing Director/Chief Executive Officer and the external auditors, if so required, will respond to The Directors are required to prepare the financial statements for shareholders’ questions during the meeting. Each item of special each financial year which give a true and fair view of the state of business included in the notice of the meeting is accompanied by affairs of the Group and of the Company at the end of the financial an explanatory statement for the proposed resolution to facilitate year and of the results and cash flows of the Group and of the full understanding and evaluation of issues involved. Company for the financial year then ended.

The Directors consider that, in preparing the financial statements 4 ACCOUNTABILITY AND AUDIT for the financial year ended 31 December 2008, the Group has used appropriate accounting policies and applied them 4.1 Primary Responsibilities of the Audit Committee consistently and made judgments and estimates that are The financial reporting and internal control system of the Group is reasonable and prudent. The Directors also consider that all overseen by an Audit Committee (“AC”), which comprises three applicable Financial Reporting Standards in Malaysia have been (3) Independent Non-Executive Directors and one (1) Non- followed and confirm that the financial statements have been Independent Non-Executive Director. The primary responsibilities prepared on a going concern basis. of the AC are set out on pages 70 to 72 of the Annual Report. The Directors are responsible for ensuring that the Group and 4.2 Financial Reporting the Company keep accounting records which disclose with The Directors are responsible for ensuring that the financial reasonable accuracy at any time the financial position of the statements prepared are drawn up in accordance with the Group and of the Company and which enable them to ensure provisions of the Companies Act, 1965; and applicable Financial that the financial statements comply with the provisions of the Reporting Standards in Malaysia. In presenting the financial Companies Act, 1965 and the applicable Financial Reporting statements, the Company has used appropriate accounting Standards in Malaysia. policies, consistently applied and supported by reasonable judgments and estimates.

6 cOMPLIANCE STATEMENT The quarterly financial results and audited financial statements were reviewed by the AC and approved by the Board of Directors Given that the Company was only listed on 18 November 2008, before being released to Bursa Securities. The details of the the Board considers that it has largely complied with the principles Company and the Group’s financial statements for the financial given in Part 1 and best practices in Part 2 of the Code except for year ended 31 December 2008 can be found from pages 80 to 143. the following:

4.3 Internal Control and Risk Management • The AC did not meet up with the external auditors in the The Board of Directors has overall responsibility for maintaining a absence of the Executive Director for the year ended sound system of internal controls, to safeguard shareholders’ 31 December 2008; and investments and the Company’s assets. • The annual assessment of the board effectiveness of the Board and Board Committees as a whole as well as the The Board of Directors acknowledges that while the internal contribution from individual Director was not conducted. control system is devised to cater for particular needs of the Group as well as risk management, such controls by their nature can only The above non-compliant items will however be carried out for the provide reasonable assurance but not absolute assurance against financial year ending 31 December 2009. material misstatements or loss. A statement on the state of internal control in the Group is set out on pages 73 to 75. This Statement on Corporate Governance is made in accordance with the resolution of the Board of Directors dated 31 March 2009. The Company outsources its internal audit functions to UEM Group Management Sdn Bhd who assists the AC to discharge its duties and responsibilities. UEM LAND HOLDINGS BERHAD additional compliance information In accordance with appendix 9C of the Listing requirements

Utilisation of Proceeds Variation in Results There were no corporate The interim financial report proposals to raise funds previously announced for the during the financial year Fourth (4th) Quarter 2008 ended 31 December 2008. financial period was based on audited results and therefore there is no material variance Share Buy-Backs to report on. There was no share buy-backs during the financial year ended 31 December 2008. Profit Guarantee The Company did not issue any

profit guarantee for the financial Options, Warrants or year ended 31 December 2008. Convertible Securities Exercised The Company has not issued any Material Contracts options, warrants or convertible Other than those disclosed in the securities in respect of the financial statements, there were financial year ended 31 no material contracts including December 2008. contracts relating to any loans entered into by the Company and its subsidiaries involving Directors American Depository and major shareholders’ interests. Receipt (“ADR”) or Global Depository Receipt (“GDR”) The Company has not sponsored Revaluation Policy any ADR or GDR programme for The Company has not adopted the financial year ended 31 a regular revaluation policy on December 2008. landed properties.

Sanctions and/or Recurrent Related Party Penalties Transactions (“RRPT”) The Company and its of Revenue Nature subsidiaries, Directors and The Company will be seeking Management have not been the shareholders’ approval for imposed with any sanctions RRPT at the forthcoming Annual and/or penalties by any regulatory General Meeting to be held bodies. on Wednesday, 10 June 2009.

Non-audit Fees During the financial year under review, non-audit fees paid to the external auditors of the Company amount to RM106,000.00 UEM LAND HOLDINGS BERHAD Audit Committee Report

70 1 MEMBERS Detailed audit reports by Group Internal Audit, together with Management’s responses are circulated to the Audit The Audit Committee consists of four (4) members of the Board Committee members and Managing Director/Chief Executive of which three (3) are Independent Non-Executive Directors and Officer for review. Significant issues are discussed at the one (1) is a Non-Independent Non-Executive Director. UEM Land Board meetings. Holdings Berhad (“the Company”) has complied with Paragraph 15.10 of the Bursa Malaysia Securities Berhad’s (“Bursa Securities”) Listing Requirements, which requires the majority 4 cOMPOSITION AND TERMS OF REFERENCE of the Audit Committee to be Independent Directors. 4.1 Composition of the Audit Committee The Audit Committee shall be appointed by the Board The members of the Audit Committee and their details are:- from amongst their numbers, which fulfills the following requirements: Name Designation Directorship/Qualification i The Audit Committee must comprise at least three (3) Oh Kim Sun Chairman Independent Non-Executive Directors. Director/Member of the ii All members of the Audit Committee must be Malaysian Institute of Non-Executive Directors, a majority of whom must Certified Public Accountants be Independent Directors. Md Ali Md Member Senior Independent Non-Executive iii All members of the Audit Committee must be financially Dewal Director/Master of Business literate and at least one member of the Audit Committee Administration Degree must be a member of an accounting association or body. Abdul Kadir Member Non-Independent Non-Executive iv No alternate director shall be appointed as a member Md Kassim Director/Bachelor of Laws Degree of the Audit Committee. Dato’ Member Independent Non-Executive v In the event of any vacancy in the Audit Committee, Ikmal Hijaz Director/Master of Philosophy the Board must fill the vacancy within three months. Hashim (Land Management)

The members of the Audit Committee shall elect a Chairman from among themselves who shall be an 2 cONSTITUTION Independent Director. All members of the Audit Committee, The Audit Committee of the Company was established by including the Chairman, will hold office only so long as they the Board of Directors (“the Board”) on 15 September 2008. serve as Directors of the Company.

4.2 Secretary of the Audit Committee 3 MEETINGS The Company Secretaries of the Company and/or Two (2) meetings were held during the financial year ended their representative shall be the Secretaries of the 31 December 2008 and details of the attendance of the Audit Committee. members at the Audit Committee meetings were as follows:- 4.3 Duties and Responsibilities of the Audit Committee The following are the main duties and responsibilities Name of Audit Committee No. of meetings attended of the Committee collectively: member i Oversee the Company’s internal control structure Oh Kim Sun 2/2 to assure operational effectiveness and efficiency, Md Ali Md Dewal 2/2 reduce the risk of unreliable financial reporting, protect the Company’s assets from misappropriation and Abdul Kadir Md Kassim 2/2 encourage legal and regulatory compliance. Dato’ Ikmal Hijaz Hashim 0/0 ii Assist the Board in identifying the principal risks in the (Appointed on 31 March 2009) achievement of the Company’s objectives and ensuring the implementation of appropriate systemsto manage The Managing Director/Chief Executive Officer, certain senior these risks. management and representatives from the internal and external iii Recommend to the Board on the appointment and auditors attended the meetings upon invitation. annual reappointment of the external auditors and their audit fee, after taking into consideration the independence and objectivity of the external auditors and the cost effectiveness of the audit. UEM LAND HOLDINGS BERHAD

iv Review with the external auditors before the audit xiv Review any related party transactions and conflict of 71 commences, the nature and scope of the audit and interest situations that may arise within the Company ensure co-ordination where more than one audit firm or the Group, including any transaction, procedure or is involved. course of conduct that raises questions of Management integrity. v Review with external auditors, their audit report. xv Consider other matters as defined by the Board. vi Review the quarterly interim results, half-year and annual financial statements of the Company and the Group 4.4 Powers of the Audit Committee prior to approval by the Board, focusing particularly on: In carrying out its duties and responsibilities, the • Any changes in accounting policies and practices. Audit Committee will have the following rights: • Significant adjustments arising from the audit. i Explicit authority to investigate any matter within its • The going concern assumption. terms of reference. • Compliance with accounting standards and other legal requirements. ii The resources that are required to perform its duties. iii Full, free and unrestricted access to any information, vii Discuss problems and reservations arising from the records, properties and personnel of the Company interim and final audits and any matter the auditors and of any other company within its Group. may wish to discuss in the absence of the Management where necessary. iv Direct communication channels with the external auditors and person(s) carrying out the internal audit viii Review the external auditors’ management letter and function or activity. Management’s response. v Be able to obtain independent professional or other ix Review with the external auditors the draft statement advice and to invite outsiders with relevant experience to to be made by the Board with regard to the state of attend the Committee’s meetings (if required) and internal control of the Company and its Group, and to brief the Committee. report the results thereof to the Board. vi Be able to convene meetings with the external auditors, x Review the assistance and co-operation given by the the internal auditors or both, excluding the attendance Company and its Group’s officers to the external and of other directors and employees of the Company, internal auditors. whenever deemed necessary. xi Review any letter of resignation from the external auditors and any questions of resignation or dismissal. The attendance at any particular Audit Committee meeting by other Directors and employees of the Company shall be at the xii Review the adequacy of the scope, functions, Audit Committee’s invitation and discretion, and must be for the competency and resources of the Internal Audit function specific agenda to the relevant meeting. and that it has appropriate standing within the Company and its subsidiary companies to undertake its activities Where the Audit Committee is of the view that a matter reported independently and objectively, including but not limited by it to the Board has not been satisfactorily resolved resulting in to the following: a breach of Bursa Securities Listing Requirements, the Audit • Reviewing and approving the Annual Internal Audit Committee must promptly report such matter to Bursa Securities. Plan and ensuring adequate risk and governance coverage; 4.5 Audit Committee meetings • Reviewing the results of the internal audit process i The Audit Committee will meet at least four (4) times and where necessary ensuring that appropriate in each financial year although additional meetings actions are taken on the recommendations of the may be called at any time, at the discretion of the internal auditors; Audit Committee Chairman. • Reviewing the overall performance of the Internal ii The quorum for each meeting shall consist of at least Audit function; two (2) members, both of whom shall be Independent • Approving any appointment or termination of the party Directors. that provides the internal audit function; and • Taking cognisance of resignations of senior internal iii Recommendations of the Audit Committee are audit staff members and provide the resigning staff submitted to the Board for approval. member an opportunity to submit his/her reasons for iv The Secretaries of the Audit Committee and/or their resigning. representatives shall be in attendance at all Audit xiii Consider the major findings of internal investigations Committee meetings and record the proceedings and Management’s response. of the meeting thereat. UEM LAND HOLDINGS BERHAD Audit Committee Report

72 v Minutes of each meeting shall be kept as part of the 5 SUMMARY OF ACTIVITIES OF AUDIT COMMITTEE FOR statutory record of the Company upon adoption by THE FINANCIAL YEAR ENDED 31 DECEMBER 2008 the Audit Committee. As the Company was only listed on Bursa Securities on vi A resolution in writing signed and approved by all the 18 November 2008, the Audit Committee has had only two Audit Committee members who may at the time be (2) meetings during the financial year ended 31 December present in Malaysia and who are sufficient to form a 2008. The internal and external auditors, the Managing quorum, shall be valid and effectual as if it had been Director/Chief Executive Officer and members of the passed at a meeting of the Audit Committee duly senior management attended most of the meetings and called and constituted. All such resolution shall be the following matters, inter-alia, were reviewed: forwarded or otherwise delivered to the Secretaries of i Financial results. the Audit Committee without delay and shall be recorded by him in the Company’s Minute Book. Any ii External auditors’ plan, strategy and scope of statutory such resolution may consist of several documents in audits of the Group’s financial statements. like form each signed by one or more Audit Committee members. 6 INTERNAL AUDIT FUNCTION vii A meeting of the Audit Committee may be held by 6.1 The Company outsources its internal audit function means of telephone, video conference or telephone to UEM Group Management Sdn Bhd (“UEMGM”) conference or other telecommunication facilities, which has adequate resources and has appropriate which permits all persons participating in the standing to undertake its activities independently and meeting to communicate with each other. A person so objectively to assist the Audit Committee in discharging participating shall be deemed to be present in person at its duties and responsibilities more effectively. The such meeting and shall be counted in a quorum and be head of the Internal Audit reports directly to the Audit entitled to vote. Committee. As at 31 December 2008, the reimbursable viii The Managing Director and/or the Chief Executive costs incurred for the audit function is RM161,655. Officer and/or other appropriate officer may be invited to attend where their presence are considered appropriate 6.2 It is the responsibility of Internal Audit to provide the as determined by the Audit Committee Chairman. Audit Committee with independent and objective reports on the state of internal control of the various ix The internal and/or external auditors have the right to operating divisions within the Group, and the extent appear and be heard at any meeting of the Audit of compliance of the divisions with the Group’s Committee and are recommended to attend each established policies and procedures as well as Audit Committee meeting. relevant statutory requirements. x Upon the request of the auditor(s), the Audit Committee Chairman shall also convene a meeting of the Audit Committee to consider any matter the auditor(s) believes should be brought to the attention of the Board or the shareholders. xi The Audit Committee shall meet with external auditors without the presence of the Executive Director and Management at least twice a year, and whenever deemed necessary. UEM LAND HOLDINGS BERHAD statement on internal control

The Malaysian Code on Corporate Governance requires listed CONTROL STRUCTURE & MONITORING ACTIVITIES 73 companies to maintain a sound system of internal control to Apart from Risk Management activities, other key elements of safeguard shareholders’ investments and the companies’ assets. the control structure of the Group are: Bursa Malaysia Securities Berhad (“Bursa Securities”) Listing Requirements necessitate directors of listed companies to include Board Committees a statement in their annual reports on the state of the internal To promote corporate governance and transparency, Board controls in the company and the group. Committees were set up by the Company. Specific terms of reference and authority are assigned to the Board Committees Bursa Securities’ Statement On Internal Control: Guidance For for areas within their scope. Directors of Public Listed Companies (“Guidance”) provides guidance for compliance with these requirements. The Board Committees formed by the Company are: The Board of Directors (“Board”) is pleased to provide the • Audit Committee following statement on the nature and scope of internal control • Nominations & Remuneration Committee of the Company and of the Group during the year, which has been • Board Development Committee prepared in accordance with the Guidance. • Board Tender Committee

The Committees report to the Board and make recommendations for BOARD RESPONSIBILITIES the Board’s decision. The Board recognises the importance of sound internal control and Risk Management practices to good corporate governance. The Board Board Meetings acknowledges that it is ultimately responsible for the Group’s system Regular Board meetings are scheduled. The Chairman in consultation of internal control, which includes the establishment of an appropriate with the Managing Director/Chief Executive Officer decides the agenda control environment and framework, as well as reviewing its adequacy items for the meetings. Board papers are distributed to the members and integrity. The system covers controls relating to financial, ahead of the meetings and Board members have access to all relevant operational, Risk Management, management information systems information. Any urgent business is dealt with and decided only after all and compliance with applicable laws, regulations, rules directives the required information is presented and deliberated. and guidelines. This ensures that the Board maintains full and effective supervision Generally, the need or requirement for a system of internal control is over key issues. designed to meet the business objectives and to manage the risks to which the companies are exposed to. Group and Organisational Structure The Group has a well-defined structure that is aligned to business and It should be noted however, that any internal control system, by nature, operational requirements. Additionally, clear lines of accountability provides only reasonable and not absolute assurance against material and responsibility have been set and communicated via Organisation misstatement, loss and fraud. Charts, Strategic Plans, Budgets and Authority Limits.

Strategic Plans & Budgets RISK MANAGEMENT The Group undertakes a comprehensive strategy review and budgeting Risk Management is firmly embedded in the Group’s system of process to establish goals and targets against which performance is internal control as it is regarded by the Board to be an integral part of monitored on an ongoing basis. The Board participates in the review the operations and strategic planning. The Group has in place a and approval of the Strategic Plans and Budget. Risk Management Framework to guide the Risk Management process and to streamline the Risk Management reporting for the Group. A periodic monitoring and reporting system is in place which highlights This structured and enterprise-wide approach to Risk Management significant variances of key performance indicators against plans and provides the fundamental steps towards protecting the investment budget to monitor performance, with key variances investigated and of its shareholders as well as its assets. Further details on followed up by management. Risk Management are included in pages 76 to 77 of this report. The quarterly financial results, announced to shareholders are prepared by Management and reviewed by the Audit Committee prior to recommendation to the Board for approval. This enables the Board to give their input and guidance on areas requiring their attention. UEM LAND HOLDINGS BERHAD STATEMENT ON INTERNAL CONTROL

74 Authority Limits and Approved Policies Information and Communication Technology (“ICT”) UEM Land Holdings has Discretionary Authority Limits (“DAL”) that Security Policies specify the approval limits for financial and non-financial transactions. The Group’s ICT Security Policies prescribe the requirements to The purposes of the DAL are to provide limits to enable decisions to maintain an adequate level of security for IT systems and information be taken timely and at the same time provide a check and balance used to support the Group’s activities. on the amounts and types of commitments that Management can undertake on behalf of the Group. Human Resource System Manpower planning, selection and recruitment are carried out to The Board has also approved significant financial and operating ensure that key positions in the Group, are filled by staff with the policies, which were drawn up to comply with laws and regulations relevant competencies. A computerised Human Resource where applicable, to guide the behaviour of Management in Management System provides a comprehensive employee performing their day-to-day operations. database and an efficient support system for managing human resource functions. Quality Management System The Group has a dedicated quality control team for quality A standardised, robust Performance Management System is adopted assurance, project monitoring and occupational safety and health throughout the Group to ensure that monitoring and measuring of and environment. The quality control team monitors the projects in implementation progress is complete, coherent and clear, and to terms of technical findings and defects inspection and ensures that provide a platform for improving employees’ performance. At senior the products constructed and delivered are in accordance with management level, a strategic performance management approach contract specifications and internal guidelines. via key performance indicators (“KPIs”) has been adopted using the “Balanced Scorecard” concept, in line with the Government’s The Group’s Quality Management Systems was awarded the guidelines for Government Linked Companies. With this approach, the ISO 9001:2000 in November 2008 and this was further upgraded Group can establish their Corporate Scorecards, and cascade these to an even higher standard with the MS ISO9001:2008 certification. KPIs to the Heads of Division and other employees. The Corporate These certifications promote the adoption of a process approach KPIs are based on the Group’s 5-point focus value creation strategies to development, implementation and improvement of our Quality and create greater visibility and transparency over the performance Management System. This approach emphasises the importance metrics, for better control of subsidiaries within the Group. of understanding customers and meeting their various stringent requirements. Training needs analysis in the Group is facilitated through UEM Group Berhad’s training centre called UEM Academy. Courses are prioritised UEM Land Berhad (“UEM Land”) was also certified to an upgraded according to the results of the analysis and the employees are sent to Occupational Safety and Health, OSHAS 18001:2007, in November the relevant courses to enhance their knowledge, skills and abilities. 2008, reflecting our commitment to safeguard the health and safety of our employees, customers and suppliers. Leadership Management Programs are in place to identify and nurture emerging leaders and employees with high potential, as well as to Constantly, striving to achieve even higher standards of environmental enhance the leadership skills of existing leaders. This will ensure that management to mitigate the impact of our projects on the environment, the Group has a robust leadership inventory to meet future challenges UEM Land implemented a comprehensive Environment Management and for succession planning. These initiatives are facilitated by UEM System in January 2009. This is scheduled to proceed with SIRIM Academy and UEM Leadership Centre. certification to MS ISO 14001:2004 standards in October 2009. Code of Conduct Insurance on Key Assets All employees are required to sign and adhere to the Group’s Code of Adequate insurances of the major assets and resources of the Group Conduct, which emphasises corporate values. The Code of Conduct are in place to ensure that these are sufficiently covered against any represents the undertakings by the employees to the minimum standard mishaps that may result in material losses to the Group. of behaviour and ethical conduct of the Group.

Management Information System Comprehensive Management Information Systems exist throughout the Group. Relevant data is captured, compiled, analysed and reported. These systems enable Management to make decisions in an accurate and timely manner towards meeting the targeted business objectives. UEM LAND HOLDINGS BERHAD

Internal Audit CONCLUSION 75 The Group has in place an adequately resourced internal audit For the financial year under review, after due and careful inquiry and function at UEM Group Management Sdn Bhd (“UEMGM”), which based on the information and assurance provided, the Board is satisfied provides the Audit Committee and Board with much of the assurance that a system of internal control is in place. they require regarding the adequacy and effectiveness of Risk Management, internal control and governance systems. The statement is made in accordance with the resolution of the Board dated 31 March 2009. This is done through ongoing reviews of internal controls relating to operational, financial and management information systems, as well as reviews of the Group’s compliance with the principles and best practices of the Malaysian Code on Corporate Governance. To ensure the adequacy of coverage, internal audit assignments are prioritised based on the results of the Risk Management exercise, audit cycle and discussions with senior management. The Annual Internal Audit Plan is presented to the Audit Committee for approval. The Audit Committee holds regular meetings to deliberate on audit findings and recommendations, and report them back to the Board.

The internal audit activities undertaken by UEMGM are in conformance with the International Standards for the Professional Practice of Internal Auditing issued by the Institute of Internal Auditors.

Transformation Program for Government-Linked Companies The Putrajaya Committee on Government-Linked Companies (“GLCs”) High Performance was set up by the Government to design and implement comprehensive national policies and guidelines to transform GLCs into high performing entities and establish the institutional framework to program-manage and subsequently to oversee the execution of these policies and guidelines.

The initiatives that have been implemented in the Group include: i Review and revamp procurement; ii Manage and develop human capital; and iii Intensify performance management.

Business Continuity Management The Business Continuity Management Plan was established to ensure that the Group is able to continue operations and minimise business disruptions in the event of any major disaster. The Business Continuity initiatives are continuously being reviewed.

Joint ventures and associates In the case of material joint ventures and associate companies, the Group is represented through Board representatives. However, the management of the joint ventures/associate companies are responsible for the administration, operation and performance of the joint venture/ associate companies. Financial and operational information of these joint ventures/associate companies are provided regularly to the Management of the Group. UEM LAND HOLDINGS BERHAD RISK MANAGEMENT

76 Overview Overall Enterprise-Risk Management Policy UEM Land Holdings Berhad (“UEM Land Holdings” or “the Company”) Generally, the Risk Management policy of the Group is to put in place and its group of companies (“the Group”) is the flagship company for an adequate and effective process of managing risks that will enable the real estate investment and development business of UEM Group it to achieve business objectives and provide reasonable assurance to Berhad and is involved in a broad range of activities within the industry. the Board and other stakeholders on the state of internal controls of the Currently, the Group’s main focus is the development of its extensive Company and its ability to increase shareholders’ value and confidence. reserves of land in Johor, known as Nusajaya, with the main aim of positioning Nusajaya as a regional city and one of the key drivers of Overall Enterprise-Risk Management Framework Iskandar Malaysia. The acquisition of Blocks 20–24 in Cyberjaya during the year under review also saw the Group starting its expansion into The Risk Management framework of the Group has been designed to other areas outside Iskandar Malaysia and marks a significant step in be comprehensive in that it encompasses effective policies, objectives, the Group’s journey towards realising its vision to become a global clear lines of responsibilities and accountabilities. Everyone in the community builder. organisation is involved in Risk Management and has been made aware of the requirements of the system and their roles and duties in it. In a The opportunities and other benefits of this development also carry with nutshell, the Group’s Risk Management Framework provides clear them new risks and challenges to the Group. Being aware and alert to guidelines on the following: this scenario, the Group has diligently taken measures to integrate all • The overall Risk Management policy of the Group; possible consequences of the existing and new businesses into its risk • The key objective of Risk Management; management system to handle both actual and anticipated events that • The Risk Management Guiding Principles; will affect the Group as a whole. • The Group’s Risk Appetite and how different magnitudes of risk exposures are to be managed and monitored ; To address and manage these risks the Board of Directors (“Board”) • The risks which are unacceptable to the Group and to has embraced an Enterprise-Wide Risk Management strategy. A Risk be avoided; and Management Framework has been established since 2006 and to • The roles of the Board, the Management, the Risk assist the Board in carrying out its responsibilities, a Risk Management Management Committee, the Risk Owners and Committee (“RMC “) was set up comprising the top management the Risk Management Secretariat. and senior management from various functional responsibilities. The Managing Director/Chief Executive Officer is the Chairman of the RMC. The Board monitors the principal risk of the Group through the RMC and the Audit Committee.

Risk identification and mitigation activities are embedded in the overall strategic planning, business planning and decision making processes. As such, the comprehensive system is able to assist the Group to address strategic and operational risks by helping it to identify and take the best course of preventive and corrective actions. Preventive measures are taken to prevent certain events from happening, while corrective measures are designed to mitigate the effect of unavoidable events on the Company. Both preventive and corrective steps that are initiated and undertaken by the Company’s risk management apparatus follow all planned methods for handling identified risks, and are always formulated to embody the best treatment for the risks, while minimising costs and keeping the Company’s overall objectives and stakeholders’ interests at the forefront. Lines of communication between the various committees and risk owners are always kept open, and together with other efforts already mentioned, has made Risk Management an integral part of the Company’s corporate culture. UEM LAND HOLDINGS BERHAD

ENTERPRISE-RISK 77 MANAGEMENT PROCESS

STEP 1 STEP 2 STEP 3 Determine policy, Risk Identification Risk Assessment objectives and define risk • Identify internal and • Likelihood • Corporate Risk external forces of risk • Impact Management policy • Recognise risk areas • Overall risk • Key objectives for • Types of risks rating matrix Risk Management • Define risk • Acceptable risk appetite ATION C

INTERNAL CONTROL OMMUNI C

STEP 6 STEP 5 STEP 4 Monitor and Review Risks Risk Management Risk Evaluation or Treatment & Prioritisation • Frequent reviews • Environment & organisation • Accept • Identify acceptable • Strategy • Avoid or unacceptable • Transfer risks • Reduce likelihood and/ • Prioritise risks or impact for treatment

Enterprise-Risk Management Assessment Conclusion Consistent with Risk Management being a continuous process, regular The Board is of the opinion that the Group’s Risk Management system reviews on the nature and magnitude of the risks faced and the status of is effective and functioning adequately, and that everyone in the Group action plans are performed by the RMC, and then reported to the Audit has been made aware of and alert to the requirements of the system Committee to deliberate and to the Board for notation. Similar Risk and its procedures. The Board has also found that all identified risks Management Frameworks, Committees and the processes also exist are being managed to an acceptable level, and that the system is in all operating subsidiaries and projects undertaken by the Group. The proficient in helping to keep the Group in line with its long-term RMC met formally on a quarterly basis, to review the risk profile of the goals and objectives. Group and the result of these reviews are tabled to, and deliberated by the Audit Committee and the Board. As the key driver of Iskandar Malaysia, we are well-placed and well-timed to maximise our opportunities with our participation and established base. al

East Ledang ING K r tenti C u o LO po UN

JSNAC UEM LAND HOLDINGS BERHAD Directors’ Report

80 Directors’ report The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial period ended 31 December 2008.

Principal activities The Company was incorporated on 20 August 2008 pursuant to the Restructuring exercise by UEM World Berhad (“UEM World”) as announced by UEM World on 15 February (“Restructuring Scheme”) which resulted in the Company became the holding company of UEM Land Berhad (formerly known as UEM Land Sdn. Bhd.)("UEMLB") and its group of companies.

The principal activity of the Company is investment holding.

There have been no significant changes in the nature of the principal activities of the subsidiaries during the financial year.

The Restructuring Scheme resulted in the listing and quotation of the Company’s entire issued and paid-up ordinary shares of RM0.50 each on the Main Board of Bursa Malaysia Securities Berhad on 18 November 2008. The Restructuring Scheme is disclosed in Note 35(a) to the financial statements.

Results

Group Company RM’000 RM’000

Profit/(loss) for the year/period 75,069 (1,503) Attributable to: Equity holders of the Company 74,189 (1,503) Minority interests 880 – 75,069 (1,503)

There were no material transfers to or from reserves or provisions during the financial year/period, other than as disclosed in the financial statements.

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year/period were not substantially affected by any item, transaction or event of a material and unusual nature.

Dividends The directors do not recommend the payment of any dividend in respect of the current financial period.

Directors The names of the directors of the Company in office since the date of incorporation and at the date of this report are: Tan Sri Dr Ahmad Tajuddin Ali (appointed on 15 September 2008) Wan Abdullah Wan Ibrahim (appointed on 15 September 2008) Dato’ Ahmad Pardas Senin (appointed on 15 September 2008) Abdul Kadir Md. Kassim (appointed on 15 September 2008) Md. Ali Md. Dewal (appointed on 15 September 2008) Oh Kim Sun (appointed on 15 September 2008) Mohd Zakir Omar (first director, resigned on 16 September 2008) Azmy Mahbot (first director, resigned on 16 September 2008) UEM LAND HOLDINGS BERHAD

Directors’ benefits 81 Neither at the end of the financial period, nor at any time during that period, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefits by means of acquisition of shares and debentures of the Company or any other body corporate, other than those pursuant to or in furtherance of the Employee Equity Scheme ("EES") with regards to shares of UEM World in conjunction with UEM Group Berhad ("UEM"), the Company’s immediate holding company, group wide restructuring scheme in 2003.

Since the date of incorporation, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salary of a full-time employee of the Company as shown in Note 5 to the financial statements) by reason of a contract made by the Company or a related corporation with any director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.

Directors’ interests According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial period in shares in the Company and its related corporations during the financial period were as follows:

Number of Ordinary Shares of RM0.50 each During the period At date of At appointment Accepted/Bought Sold 31.12.2008

The Company Direct Interest Wan Abdullah Wan Ibrahim – 375,000 # – 375,000 Dato’ Ahmad Pardas Senin – 2,500,000 @ – 2,500,000

# Shares issued to replace 300,000 UEM World shares pursuant to the distribution of dividend-in-specie of 5 of the Company’s shares for every 4 UEM World shares held.

@ Include 1,250,000 of the Company’s shares issued to replace 1,000,000 UEM World shares pursuant to the distribution of dividend-in- specie of 5 of the Company’s shares for every 4 UEM World shares held.

Number of Ordinary Shares of RM0.25 each During the period At date of At appointment Bought Sold 31.12.2008

Related Company – PLUS Expressways Berhad

Direct Interest Dato’ Ahmad Pardas Senin 20,000 – – 20,000 Abdul Kadir Md. Kassim 40,000 – – 40,000

Indirect Interest Oh Kim Sun 180,000 – (180,000) – UEM LAND HOLDINGS BERHAD Director’s Report

82 Directors’ interests (contd.)

Number of Ordinary Shares of RM1.00 each During the period At date of At appointment Bought Sold 31.12.2008

Related Company – Pharmaniaga Berhad

Indirect Interest Oh Kim Sun 177,000 – – 177,000

Share capital The Company was incorporated on 20 August 2008 with an authorised share capital of 5,000,000,000 ordinary shares of RM0.50 each and 200,000,000 mandatory convertible redeemable preference shares of RM0.01 each, and an issued and paid-up share capital of RM2, represented by 4 shares of RM0.50 each.

During the financial period, the Company issued 2,428,176,907 new ordinary shares of RM0.50 each at an issue price of RM0.52 per ordinary share amounting to RM1,214,088,453.50 as purchase consideration for the acquisition of UEMLB to the following parties:

(i) UEM for the acquisition of 623,867,734 ordinary shares of RM0.50 each representing 28.54% equity interest in UEMLB from UEM for the sum of RM357,969,543 via the issuance of 693,068,053 new ordinary shares of the Company.

(ii) UEM World for the acquisition of 1,561,864,562 ordinary shares of RM0.50 each representing 71.46% equity interest in UEMLB from UEM World for the sum of RM896,183,457 via the issuance of 1,735,108,854 new ordinary shares of the Company.

The new ordinary shares rank pari passu in all respects with the existing ordinary shares of the Company.

On 18 November 2008, pursuant to the Restructuring Scheme, the entire 2,428,176,911 ordinary shares of RM0.50 each of the Company in issue were listed and quoted on the Main Board of the Bursa Malaysia Securities Berhad.

Other statutory information (a) Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.

(b) At the date of this report, the directors are not aware of any circumstances which would render:

(i) the amount written off for bad debts or the amount of the allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. UEM LAND HOLDINGS BERHAD

Other statutory informatioN (contd.) 83

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.

(e) At the date of this report, there does not exist:

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial period which secures the liabilities of any other person; or

(ii) any contingent liability of the Group or of the Company which has arisen since the end of the financial period.

(f) In the opinion of the directors:

(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial period which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial period and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company for the financial period in which this report is made.

Significant events Significant events are disclosed in Note 35 to the financial statements.

Auditors The auditors, Ernst & Young, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the directors dated 26 February 2009.

Tan Sri Dr Ahmad Tajuddin Ali Wan Abdullah Wan Ibrahim Chairman Managing Director/Chief Executive Officer UEM LAND HOLDINGS BERHAD Statement By Directors

84 Pursuant to Section 169(15) of the Companies Act, 1965

We, Tan Sri Dr Ahmad Tajuddin Ali and Wan Abdullah Wan Ibrahim, being two of the directors of UEM Land Holdings Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 88 to 143 are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable Financial Reporting Standards in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2008 and of the results and the cash flows of the Group and of the Company for the period then ended.

Signed on behalf of the Board in accordance with a resolution of the directors dated 26 February 2009.

Tan Sri Dr Ahmad Tajuddin Ali Wan Abdullah Wan Ibrahim Chairman Managing Director/Chief Executive Officer UEM LAND HOLDINGS BERHAD Statutory Declaration

Pursuant to Section 169(16) of the Companies Act, 1965 85

I, Mohd Zakir Omar, being the officer primarily responsible for the financial management of UEM Land Holdings Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 88 to 143 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed Mohd Zakir Omar at Kuala Lumpur in the Federal Territory on 26 February 2009 Mohd Zakir Omar

Before me, UEM LAND HOLDINGS BERHAD Independent Auditors’ report TO THE MEMBERS OF UEM LAND HOLDINGS BERHAD

86 We have audited the financial statements of UEM Land Holdings Berhad, which comprise the balance sheets as at 31 December 2008 of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of the Group and of the Company for the period then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 88 to 143 .

Directors’ responsibility for the financial statements

The directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2008 and of the financial performance and cash flows of the Group and of the Company for the period then ended.

Report on other legal and regulatory requirements

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) We have considered the accounts and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 38 to the financial statements.

(c) We are satisfied that the accounts of the subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes.

(d) The auditors’ reports on the accounts of the subsidiaries were not subject to any qualification and did not include any comment required to be made under Section 174(3) of the Act. UEM LAND HOLDINGS BERHAD

Other matters 87

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

Ernst & Young Ahmad Zahirudin bin Abdul Rahim AF: 0039 No. 2607/12/10(J) Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia 26 February 2009 UEM LAND HOLDINGS BERHAD Income Statements For the year ended 31 December 2008

88 Group COMPANY 1.1.2008 1.1.2007 20.08.2008 to to to 31.12.2008 31.12.2007 31.12.2008 Note RM’000 RM’000 RM’000

Continuing operations Revenue 3 511,647 1,871,548 – Cost of sales 4 (381,159) (1,360,626) – Gross profit 130,488 510,922 – Other income 2,678 30,634 – Selling and distribution expenses (21,603) (3,570) – Other expenses (40,704) (81,982) (1,503) Operating profit/(loss) 5 70,859 456,004 (1,503) Finance costs 6 (6,367) (594) – Share of result of associates 5,741 4,084 – Share of result of jointly controlled entities 5,467 (2,215) – Profit/(loss) before income tax 75,700 457,279 (1,503) Income tax 7 (631) 72,464 – Profit/(loss) for the year/period from continuing operations 75,069 529,743 (1,503)

Attributable to: Equity holders of the Company 74,189 529,128 (1,503) Minority interests 880 615 – 75,069 529,743 (1,503)

Earnings per share attributable to equity holders of the Company (sen): Basic, for profit for the year 8 3.1 24.7 Diluted, for profit for the year 8 2.4 18.5

The accompanying notes form an integral part of the financial statements. UEM LAND HOLDINGS BERHAD Balance Sheets As At 31 december 2008

Group COMPANY 89 2008 2007 2008 Note RM’000 RM’000 RM’000 Assets Non-current assets Property, plant and equipment 10 12,359 10,725 – Prepaid land lease payments 11 334 407 – Land held for property development 12 1,544,300 1,546,824 – Investment in subsidiaries 13 – – 1,254,153 Investment in associates 14 15,081 11,563 – Investment in joint ventures 15 25,211 10,586 – Long term investments 16 158 765 – Long term receivable 17 64,223 65,523 – Goodwill 18 39,223 39,223 – Non-current deposits 20 1,418 1,418 – Amount due from subsidiary 21 – – 152,264 1,702,307 1,687,034 1,406,417 Current assets Property development costs 22 711,644 564,829 – Inventories 23 35,905 34,797 – Receivables 24 447,472 282,527 – Amount due from immediate holding company 25 – 419 – Amount due from joint ventures 15 74,272 24,442 – Amount due from associates 14 27,022 28,574 – Short term investments 26 7 7 – Short term deposits 20 6,595 29,117 – Cash and bank balances 20 26,810 27,274 – 1,329,727 991,986 – Assets of disposal group classified as held for sale 9 28,518 38,705 – TOTAL Assets 3,060,552 2,717,725 1,406,417 UEM LAND HOLDINGS BERHAD

Balance sheets as at 31 December 2008 contd.

90 Group COMPANY 2008 2007 2008 Note RM’000 RM’000 RM’000 Equity and liabilities Equity attributable to equity holders of the Company Share capital 27 1,214,088 1,214,088 1,214,088 Merger relief reserves 34,330 34,330 34,330 Other reserves 28 47,027 63,132 – Accumulated losses (45,290) (126,915) (1,503) 1,250,155 1,184,635 1,246,915 Minority interests 452,380 451,500 – Total equity 1,702,535 1,636,135 1,246,915

Non-current liabilities Borrowings 29 590,661 549,579 – Deferred tax liabilities 19 144,997 154,787 – 735,658 704,366 –

Current liabilities Provisions 30 35,370 34,583 – Payables 31 389,546 261,217 159,502 Borrowings 29 8,633 10,710 – Amount due to immediate holding company 25 187,872 68,389 – Tax payable 938 1,378 – 622,359 376,277 159,502 Liabilities of disposal group classified as held for sale 9 – 947 – Total liabilities 1,358,017 1,081,590 159,502 Total equity and liabilities 3,060,552 2,717,725 1,406,417

The accompanying notes form an integral part of the financial statements. UEM LAND HOLDINGS BERHAD Statements of Changes in Equity For the year ended 31 December 2008

91 MINORITY Total Attributable to equity holders of the Company Interests# equity

Non-distributable

Merger Share relief Other Accumulated capital reserves reserves losses Total Group Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2008 1,214,088 34,330 63,132 (126,915) 1,184,635 451,500 1,636,135 Foreign currency translation differences, representing net loss recognised directly in equity 28(ii) – – (9,113) – (9,113) – (9,113) Profit for the year – – – 74,189 74,189 880 75,069 Total recognised income and expense for the year – – (9,113) 74,189 65,076 880 65,956

Share options: – granted – – 444 – 444 – 444 – transferred – – (7,436) 7,436 – – – At 31 December 2008 1,214,088 34,330 47,027 (45,290) 1,250,155 452,380 1,702,535

At 1 January 2007 867,554 22,894 (90,053) (656,043) 144,352 559,293 703,645 Foreign currency translation differences, representing net gain recognised directly in equity – – 354 – 354 – 354 Profit for the year – – – 529,128 529,128 615 529,743 Total recognised income and expense for the year – – 354 529,128 529,482 615 530,097

Issue of ordinary shares 346,534 11,436 147,363 – 505,333 – 505,333 Net accretion of interest in subsidiary – – – – – (108,408) (108,408) Share options granted under EES – – 5,468 – 5,468 – 5,468 At 31 December 2007 1,214,088 34,330 63,132 (126,915) 1,184,635 451,500 1,636,135

# Included in the minority interests is the Redeemable Convertible Preference Shares held by UEM Group Berhad amounting to RM450 million, details of which are disclosed in Note 29. UEM LAND HOLDINGS BERHAD Statements of changes in equity For the year ended 31 December 2008 contd.

92 Non-distributable Merger Share relief Accumulated Total capital reserves losses equity COMPANY RM’000 RM’000 RM’000 RM’000 At date of incorporation * – – – Loss for the period, representing total recognised income and expense for the period – – (1,503) (1,503) Issue of ordinary shares (Note 27) 1,214,088 34,330 @ – 1,248,418 At 31 December 2008 1,214,088 34,330 (1,503) 1,246,915

* The Company was incorporated on 20 August 2008 with an issued and paid up capital of RM2 represented by 4 ordinary shares of RM0.50 each.

@ Net of expenses incurred in relation to the issue of ordinary shares.

The accompanying notes form an integral part of the financial statements. UEM LAND HOLDINGS BERHAD Cash Flow Statements For the year ended 31 December 2008

Group COMPANY 93 1.1.2008 1.1.2007 20.08.2008 to to to 31.12.2008 31.12.2007 31.12.2008 RM’000 RM’000 RM’000 Cash flows from operating activities Cash receipts from customers 265,656 211,111 – Repayment from previous immediate holding company – 114,452 – Receipts from other related parties 16,865 1,452,168 – Receipts from joint ventures 125,466 – – Cash payments to suppliers (26,983) (6,116) – Cash payments to contractors (142,867) (236,085) – Cash payments for land and development related costs (160,689) (112,048) – Cash payments to other related parties (26,771) (7,468) – Cash payments to employees and for expenses (71,309) (45,875) – Cash (used in)/generated from operations (20,632) 1,370,139 – Net income tax paid (32,540) (25,898) – Interest received 1,198 3,760 – Net cash used in discontinued operations (676) – – Net cash (used in)/generated from operating activities (52,650) 1,348,001 –

Cash flows from investing activities Dividend received from associate 2,250 2,250 – Proceeds from disposals of: – – property, plant and equipment 5 4 – – long term investments 450 57 – Purchase of property, plant and equipment (3,816) (2,468) – Equity contribution to joint venture (50,000) – – Investment in land held for property development (23,285) (13,061) – Investment in joint venture entities (11,539) (5,500) – Net cash used in investing activities (85,935) (18,718) –

Cash flows from financing activities Proceeds from issuance of ordinary shares – 505,333 – Drawdown of bridging loan – 1,841 – Advance from immediate holding company 117,000 63,000 – Redemption of SPV Bond – (1,935,710) – Transfer to deposits held in trust and reserve accounts – (397) – Net cash generated from/(used in) financing activities 117,000 (1,365,933) –

Net decrease in cash and cash equivalents (21,585) (36,650) – Effects of foreign exchange rate changes (235) – – Cash and cash equivalents at beginning of year/period 46,639 83,289 – Cash and cash equivalents at end of year/ period (Note 20) 24,819 46,639 –

The accompanying notes form an integral part of the financial statements. UEM LAND HOLDINGS BERHAD Notes to the Financial Statements 31 december 2008

94 (1) Corporate information

The Company was incorporated on 20 August 2008 pursuant to the Restructuring Scheme of UEM World with details as disclosed in Note 35(a), which resulted the Company became the holding company of UEMLB and its group of companies.

The Company is a public limited liability company, incorporated and domiciled in Malaysia. The registered office of the Company is located at 19-2 Mercu UEM, Jalan Stesen Sentral 5, Kuala Lumpur Sentral, 50470 Kuala Lumpur and the principal place of business is at 16-1 Mercu UEM, Jalan Stesen Sentral 5, Kuala Lumpur Sentral, 50470 Kuala Lumpur.

The principal activity of the Company is investment holding.

The principal activities of the subsidiaries are property development, turnkey development and construction, land trading, property investment, project procurement and management and investment holding. There have been no significant changes in the nature of the principal activities during the financial period.

The immediate holding company of the Company is UEM and the ultimate holding company is Khazanah Nasional Berhad ("Khazanah"), both of which are incorporated in Malaysia.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 26 February 2009.

(2) Significant accounting policies

2.1 basis of preparation

The financial statements of the Group and of the Company are prepared under the historical cost convention, unless otherwise disclosed in the summary of significant accounting policies below, and comply with applicable Financial Reporting Standards in Malaysia. The financial statements are presented in Ringgit Malaysia (RM) and all values are rounded to the nearest thousand (RM’000) except where otherwise indicated.

2.2 Summary of significant accounting policies

(a) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities over which the Group has the ability to control the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has such power over another entity.

In the Company’s separate financial statements, investments in subsidiaries are stated at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.

(ii) Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company for the period from the date of incorporation, 20 August 2008 to 31 December 2008 and of the subsidiaries for the year ended 31 December 2008. The subsidiaries are indicated in Note 38 to the financial statements. Pursuant to the Restructuring Scheme, the Company was introduced as a new parent company. The introduction of the Company constitutes a Group reconstruction and has been accounted for using merger accounting principles as the combination of the companies meet the relevant criteria for merger, thus depicting the combination of those entities as if they have been in the combination for the current and previous financial years.

Business combinations involving entities under common control are accounted for by applying the merger accounting method. The assets and liabilities of the combining entities are reflected at their carrying amounts reported in the consolidated financial statements of the controlling holding company. Any difference between the consideration paid UEM LAND HOLDINGS BERHAD

(2) Significant accounting policies (contd.) 95

2.2 Summary of significant accounting policies (Contd.)

(a) Basis of consolidation (Contd.)

(ii) Basis of consolidation (Contd.)

and the share capital of the ‘acquired’ entity is reflected within equity as merger reserve/deficit. The income statement reflects the results of the combining entities for the full year, irrespective of when the combination takes place. Comparatives are presented as if the entities had always been combined since the date the entities had come under common control.

For other subsidiaries, they are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. In preparing the consolidated financial statements, intragroup balances, transactions and unrealised gains or losses are eliminated in full. Uniform accounting policies are adopted in the consolidated financial statements for transactions and events in similar circumstances.

Acquisitions of subsidiaries are accounted for using the purchase method. The purchase method of accounting involves allocating the cost of the acquisition to the fair value of the assets acquired and liabilities and contingent liabilities assumed at the date of acquisition. The cost of an acquisition is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the acquisition.

Any excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities represents goodwill. Any excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition is recognised immediately in profit or loss.

Minority interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group. It is measured at the minorities’ share of the fair value of the subsidiaries’ identifiable assets and liabilities at the acquisition date and the minorities’ share of changes in the subsidiaries’ equity since then.

(iii) Associates

Associates are entities in which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but not in control or joint control over those policies.

Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting. Under the equity method, the investment in associate is carried in the consolidated balance sheet at cost adjusted for post-acquisition changes in the Group’s share of net assets of the associate. The Group’s share of the net profit or loss of the associate is recognised in the consolidated profit or loss. Where there has been a change recognised directly in the equity of the associate, the Group recognises its share of such changes.

In applying the equity method, unrealised gains and losses on transactions between the Group and the associate are eliminated to the extent of the Group’s interest in the associate. After application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group’s net investment in the associate.The associate is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associate.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any long-term interests that, in substance, form part of the Group’s net investment in the associates, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

96 (2) Significant accounting policies (contd.)

2.2 Summary of significant accounting policies (Contd.)

(a) Basis of consolidation (Contd.)

(iii) Associates (Contd.)

Goodwill relating to an associate is included in the carrying amount of the investment and is not amortised. Any excess of the Group’s share of the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the associate’s profit or loss in the period in which the investment is acquired.

The most recent available audited financial statements or management financial statements of the associates are used by the Group in applying the equity method. Where the dates of the audited financial statements used are not co-terminous with those of the Group, the share of results is arrived at from the audited financial statements available or management financial statements to the end of the accounting period. Uniform accounting polices are adopted for transactions and events in similar circumstances.

In the Company’s separate financial statements, investments in associates are stated at cost less impairment losses.

On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.

(iv) Joint Ventures

Joint ventures are contractual arrangements whereby two or more parties undertake an economic activity that is subject to joint control, and a jointly controlled entity is a joint venture that involves the establishment of a separate entity in which each venturer has an interest.

Investments in joint ventures are accounted for in the consolidated financial statements using the equity method of accounting as described in Note 2.2(a)(iii).

In the Company’s separate financial statements, investments in joint ventures are stated at cost less impairment losses.

On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.

(b) Goodwill

Goodwill acquired in a business combination is capitalised as an asset and is initially measured at cost. Following the initial recognition, goodwill is measured at cost less any accumulated impairment losses.

The policy for the recognition and measurement of impairment losses is in accordance with Note 2.2(m). Any impairment losses recognised for goodwill shall not be reversed in a subsequent period.

All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial year in which they are incurred.

Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.

UEM LAND HOLDINGS BERHAD

(2) Significant accounting policies (contd.) 97

2.2 Summary of significant accounting policies (Contd.)

Depreciation of property, plant and equipment is provided on a straight-line basis to write off the cost of each asset to its residual value over the estimated useful life, at the following annual rates:

Freehold land and building 2% Renovation 5% - 10% Motor vehicles 25% Others 10% - 50%

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year the asset is derecognised.

The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end.

Upon the disposal of an item of property, plant and equipment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the income statement.

(d) Cash flow statement and consolidated cash flow statement

The cash flow statement and consolidated cash flow statement classify movements in cash and cash equivalents according to operating, investing and financing activities. The Group and the Company do not consider any of its assets other than fixed deposits with licensed financial institutions, cash and bank balances reduced by bank overdrafts as meeting the definition of cash and cash equivalents.

(e) Land held for property development and property development costs

Land held for property development consists of land where no development activity has been carried out or where development activities are not expected to be completed within the normal operating cycle.

Land held for property development is classified within non-current assets and is stated at cost less impairment losses. Cost consists of land and development expenditure which include borrowing costs relating to the financing of the land and development. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.2(m).

Profit on sale of land held for property development is recognised only when it is probable that the economic benefits associated with the transaction will flow to the Group.

Property development costs are those assets on which significant works have been undertaken and are expected to be completed within the normal operating cycle.

Property development costs are stated at cost. Cost consists of land and development expenditure. Development expenditure includes borrowing costs relating to the financing of the land and development.

Profit on sale of property development costs is recognised when the outcome of the contract can be reasonably estimated using the percentage of completion method to the extent of total sales value of units sold. The percentage of completion is based on total cost incurred to date over total estimated cost of the project. Provision is made for all foreseeable losses on property development costs.

The excess of revenue recognised in the income statement over billings to purchasers is classified as accrued billings within trade receivables and the excess of billings to purchasers over revenue recognised in the income statement is classified as progress billings within payables. UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

98 (2) Significant accounting policies (contd.)

2.2 Summary of significant accounting policies (Contd.)

(f) Construction and turnkey development contracts

Where the outcome of construction and turnkey development contracts can be reliably estimated, contract revenue and contract costs are recognised as revenue and expenses respectively by using the stage of completion method. The stage of completion is measured by reference to the proportion of contract costs incurred for work performed to date to the estimated total contract costs.

Where the outcome of construction and turnkey development contracts cannot be reliably estimated, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

When the total of costs incurred on construction and turnkey development contracts plus, recognised profits (less recognised losses), exceeds progress billings, the balance is classified as amount due from customers on contracts. When progress billings exceed costs incurred plus, recognised profits (less recognised losses), the balance is classified as amount due to customers on contracts.

(g) Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditure expected to be required to settle the obligation.

(h) Inventories

Completed properties held for sale are stated at the lower of cost and net realisable value. Cost is determined on the specific identification basis and includes cost of land, construction and appropriate development overheads.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

(i) Income tax

Income tax on the profit or loss for the year/period comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year/period and is measured using the tax rates that have been enacted at the balance sheet date.

Deferred tax is provided for, using the liability method. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

UEM LAND HOLDINGS BERHAD

(2) Significant accounting policies (contd.) 99

2.2 Summary of significant accounting policies (Contd.)

(i) Income tax (Contd.)

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised as income or an expense and included in the profit or loss for the period, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also recognised directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or the amount of any excess of the acquirer’s interest is the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the cost of the combination.

(j) Employee benefits

(i) Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the period in which the associated services are rendered by employees of the Group. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

(ii) Defined contribution plan

Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities or funds and will have no legal or constructive obligation to pay further contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years. Such contributions are recognised as an expense in the profit or loss as incurred. As required by law, companies in Malaysia make such contributions to the Employees Provident Fund (“EPF”). Some of the Group’s foreign subsidiaries also make contributions to their respective countries’ statutory pension schemes.

(iii) Equity-settled share-based payment transactions with employees

UEM undertakes an Employee Equity Scheme ("EES") whereby employees (including senior executives) of the Group receive part of their remuneration in the form of share-based payment transaction, entitlement to the EES Shares ("equity-settled transactions").

The cost of equity-settled transactions with employees is measured by reference to the fair value of the options at the date at which they are granted. This cost is recognised as an employee cost in the income statement, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ("the vesting date").

No expense is recognised for awards that do not ultimately vest. Where vesting is conditional upon a market condition, it is treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance conditions are satisfied.

Upon expiry of EES on 22 October 2008, the balance of share based payment reserves were transferred to accumulated losses.

(k) Foreign currencies

The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia (RM), which is also the Company’s functional currency.

UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

100 (2) Significant accounting policies (contd.)

2.2 Summary of significant accounting policies (Contd.)

(k) Foreign currencies (Contd.)

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded in the functional currencies using the exchange rates prevailing at the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are translated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not translated.

Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are included in profit or loss for the period except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operation. Exchange differences arising on monetary items that form part of the Group’s net investment in foreign operation, where that monetary item is denominated in either the functional currency of the reporting entity or the foreign operation, are initially taken directly to the foreign currency translation reserve within equity until the disposal of the foreign operations, at which time they are recognised in profit or loss. Exchange differences arising on monetary items that form part of the Group’s net investment in foreign operation, where that monetary item is denominated in a currency other than the functional currency of either the reporting entity or the foreign operation, are recognised in profit or loss for the period. Exchange differences arising on monetary items that form part of the Company’s net investment in foreign operation, regardless of the currency of the monetary item, are recognised in profit or loss in the Company’s financial statements or the individual financial statements of the foreign operation, as appropriate.

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

(l) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

(i) Property development

(a) Sale of developed land

Sale of developed land is recognised only when it is probable that the economic benefits associated with the transactions will flow to the Group.

(b) Construction and turnkey development contracts

Revenue from construction and turnkey development contracts are accounted for using the percentage of completion method as described in Note 2.2(f) above.

Revenue from sale of development properties classified as property development costs is accounted for by the percentage of completion method. The percentage of completion is determined by reference to the costs incurred to date to the total estimated costs where the outcome of the projects can be reliably estimated.

(d) Sale of completed development properties

Sale of completed development properties is recognised only when it is probable that the economic benefits associated with the transactions will flow to the Group. UEM LAND HOLDINGS BERHAD

(2) Significant accounting policies (contd.) 101

2.2 Summary of significant accounting policies (Contd.)

(l) Revenue recognition (Contd.)

(ii) Strategic land sales

Contracts for strategic land sales are recognised only when it is probable that the economic benefits associated with the transactions will flow to the Group.

(iii) Interest

Interest income is recognised on an accrual basis. Where recoverability is uncertain, interest income will be recognised on a receipt basis.

(iv) Dividends

Dividends from subsidiaries, associates and other investments are included in the income statement when the shareholders’ right to receive payment has been established.

(m) Impairment of assets

The carrying amount of the Group’s and the Company’s assets are reviewed at each balance sheet reporting date to determine whether there is any indication of impairment. Intangible asset with indefinite useful lives such as goodwill is tested for impairment annually at financial year-end or more frequently if events or changes in circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level. The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use or more frequently when an indication of impairment arises during the reporting year.

If any such indication exist, or when annual impairment testing for an asset is required, the recoverable amount is estimated and an impairment loss is recognised whenever the recoverable amount of the asset or a cash-generating unit is less than its carrying amount. The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use.

In assessing value in use, the estimated future cash flow are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses of continuing operations are recognised in the income statement in those expense categories consistent with the function of the impaired asset.

The impairment loss is recognised in the income statement immediately except for the impairment on a revalued asset where the impairment loss is recognised directly against the revaluation surplus account to the extent of the surplus credited from the previous revaluation for the same asset, with the excess of the impairment loss charged to the income statement.

All reversals of impairment losses are recognised as income immediately in the income statement except for the reversal of an impairment loss on a revalued asset where the reversal of the impairment loss is treated as a revaluation increase and credited to the revaluation surplus account of the same asset.

An impairment loss is reversed if there has been a change in estimates used to determine the recoverable amount.

An impairment loss is only reversed to the extent that the carrying amount of the assets does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment had been recognised.

(n) Financial instruments

Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual provisions of the instrument.

UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

102 (2) Significant accounting policies (contd.)

2.2 Summary of significant accounting policies (Contd.)

(n) Financial instruments (Contd.)

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported as expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.

(i) Other non-current investments

Non-current investments other than investments in subsidiaries, associates and joint ventures are stated at cost less accumulated impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.2(m).

On disposal of an investment, the difference between net disposal proceeds and the carrying amount is charged or credited to the income statement.

(ii) Short term investments

Short term investments are stated at the lower of cost and market value. Increases or decreases in the carrying amount of investments are credited or charged to the income statement.

On disposal of an investment, the difference between net disposal proceeds and the carrying amount is charged or credited to the income statement.

(iii) Receivables

Receivables are carried at anticipated realisable values. Bad debts are written off when identified. An estimate is made for doubtful debt based on a review of all outstanding amounts as at the balance sheet date.

(iv) Payables

Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received.

(v) Interest-bearing borrowings

Interest-bearing loans and overdrafts are initially recognised at the fair value of the consideration received less direct attributable transaction costs. After initial recognition, interest bearing borrowings are subsequently measured at amortised cost using the effective interest method.

(vi) Equity instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are approved and declared.

(o) Project development costs

Project development costs are recognised as an expense except that costs incurred on an individual development project are recognised as development asset to the extent that such expenditure is expected to generate future economic benefits. Development costs are only recognised as an asset when it is probable that future economic benefits will be realised as a result of the specific expenditure and the costs can be measured reliably.

UEM LAND HOLDINGS BERHAD

(2) Significant accounting policies (contd.) 103

2.2 Summary of significant accounting policies (Contd.)

(o) Project development costs (Contd.)

Following the initial recognition of the development expenditure, the asset is carried at cost less any accumulated impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.2(m) except that impairment losses are not written back even if there are changes to circumstances or events that led to the impairment.

Development costs are derecognised when they are disposed of or when no future economic benefit is expected from the disposal. Development expenditure that has been capitalised is expensed off over the period of expected future sales from the related project.

(p) Disposal group held for sale

Disposal group is classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary.

Immediately before classification as held for sale, the measurement of all the assets and liabilities in a disposal group is brought up-to-date in accordance with applicable FRS 5. Then, on initial classification as held for sale, disposal group are measured in accordance with FRS 5 that is at the lower of carrying amount and fair value less costs to sell. Any differences are included in income statement.

(q) Prepaid land lease payments

Prepaid land lease payments are accounted for as operating leases where substantially all the rewards and risk of ownership of assets remain with the lessor. Prepaid land lease payments under operating leases are initially stated at cost and subsequently recognised on a straight-line basis over the lease terms.

2.3 changes in accounting policies and effects arising from adoption of new FRS and IC Interpretation

(a) Adoption of IC Interpretation

On 1 January 2008/date of incorporation, the Group and the Company adopted the following applicable IC Interpretation:

IC Interpretation 8 Scope of FRS 2

The adoption of the above interpretation does not result in significant changes to the accounting policies and does not have significant financial impact on the Group and on the Company.

(b) Standards and Interpretations in issue but not yet effective

Effective for financial periods FRS, Amendment to FRS and Interpretations beginning on or after FRS 7: Financial Instruments: Disclosures 1 January 2010 FRS 8: Operating Segments 1 July 2009 FRS 139: Financial Instruments: Recognition and Measurement 1 January 2010 IC Interpretation 9: Reassessment of Embedded Derivatives 1 January 2010 IC Interpretation 10: Interim Financial Reporting and Impairment 1 January 2010

The new FRS and Interpretations above are expected to have no significant impact on the financial statements of the Group and the Company upon their initial application except for the changes in disclosures arising from the adoption of FRS 7 and FRS 8.

UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

104 (2) Significant accounting policies (contd.)

2.3 changes in accounting policies and effects arising from adoption of new FRS and IC Interpretation (Contd.)

(b) Standards and Interpretations in issue but not yet effective (Contd.)

The Group and the Company are exempted from disclosing the possible impact, if any, to the financial statements upon the initial application of FRS 139.

2.4 critical judgements and accounting estimates

Judgements, estimates and assumptions concerning the future are made in the preparation of the financial statements. They affect the application of the Group’s accounting policies, reported amounts of assets, liabilities, income and expenses, and disclosures made. They are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances.

(a) Key sources of estimation uncertainty

(i) Impairment of goodwill

The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value-in-use of the cash-generating units to which the goodwill is allocated. Estimating the value-in-use requires the Group to make an estimate of the expected future cash flows from the cash-generating unit and also to apply a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of the Group’s goodwill as at 31 December 2008 was RM39,223,000 (2007: RM39,223,000). Further details on goodwill are disclosed in Note 18.

(ii) Property development costs, construction and turnkey development contracts

The Group recognises property development, construction and turnkey development contracts revenue and expenses in the income statement using the stage of completion method. The stage of completion is determined by reference to the proportion of costs incurred for the work performed to date to the estimated total costs where the outcome of the projects can be reliably estimated.

Significant judgement is required in determining the stage of completion, the extent of the costs incurred and the estimated total revenue and costs, as well as recoverability of the property development, construction and turnkey development contracts projects. In making the judgement, the Group evaluates based on past experience, external economic factors and by relying on the work of specialists.

Details of the property development costs and construction and turnkey development contracts are disclosed in Note 22 and Note 24 (ii) respectively.

(iii) Depreciation of property, plant and equipment

The cost of property, plant and equipment is depreciated on a straight-line basis over the assets’ useful lives. Management estimates the useful lives of these plant, machinery and equipment to be within 2 to 50 years. These are common life expectancies applied in the industry. Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

(iv) Income taxes

Judgement is involved in determining the provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

UEM LAND HOLDINGS BERHAD

(3) Revenue 105

Group COMPANY 1.1.2008 1.1.2007 20.08.2008 to to to 31.12.2008 31.12.2007 31.12.2008 RM’000 RM’000 RM’000 Property development: – Sale of developed land 242,499 52,864 – – Turnkey development contracts 94,880 223,784 – – Sale of development properties 86,789 106,312 – 424,168 382,960 – Strategic land sales 81,466 1,482,652 – Harvesting and leasing income 6,013 5,936 – 511,647 1,871,548 –

(4) Cost of sales

Cost of sales represents the proportion of cost of land sold, development properties and turnkey development contracts. UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

106 (5) Operating profit/(loss)

(a) The following amounts have been included in arriving at operating profit/(loss):

Group COMPANY 1.1.2008 1.1.2007 20.08.2008 to to to 31.12.2008 31.12.2007 31.12.2008 Note RM’000 RM’000 RM’000 Impairment loss on investment – associates – 12,856 – – long term investments 607 – – Allowance for doubtful debts – long term receivable 1,300 10,538 – – due from related parties 581 – – – due from associates 12 – – – others 20 – – Bad debts written off – due from related parties 8 – – – due from associates 1 – – – others 3,980 10,671 – Rental expenses of – land and building 703 533 – – equipment 196 247 – Auditors’ remuneration – Statutory audit 297 246 50 – Special audit 231 101 – Depreciation of property, plant and equipment 2,153 1,698 – Amortisation of prepaid land lease payments 24 24 – Loss on foreign exchange – 2 – Directors’ remuneration (i) 2,641 1,742 103 Staff costs (ii) 17,562 20,180 – Loss on disposal of property, plant and equipment 3 – – Write back of allowance for doubtful debts (5,258) (27,757) – Recovery of long term investment written off (450) – – Impairment of inventories – 2,507 – Interest income from: – deposits with licensed banks (1,198) (3,760) – – UEM World – (317) – Gain on disposal of: – subsidiary – (254) – – investment – (23) – UEM LAND HOLDINGS BERHAD

(5) Operating profit/(loss) (CONTD.) 107

(a) The following amounts have been included in arriving at operating profit/(loss): (Contd.)

Group COMPANY 1.1.2008 1.1.2007 20.08.2008 to to to 31.12.2008 31.12.2007 31.12.2008 RM’000 RM’000 RM’000 (i) Directors’ remuneration Directors of the Company Executive: Salary and other emoluments 1,016 1,625 – Benefits-in-kind 129 – – 1,145 1,625 – Non-executive: Fees 252 108 90 Other emoluments 23 9 13 275 117 103 Other directors of subsidiaries Executive: Salary and other emoluments 1,350 – – Benefits-in-kind 161 – – 1,511 – – 2,931 1,742 103

Analysis of total directors’ remuneration excluding benefits-in-kind: – executive 2,366 1,625 – – non-executive 275 117 103 Total directors’ remuneration excluding benefits-in-kind 2,641 1,742 103

The number of directors of the Company whose total remuneration during the financial period fell within the following bands is analysed below:

number of directors 2008 Executive directors: RM800,001-RM900,000 – RM900,001-RM1,000,000 – RM1,000,001-RM1,100,000 – RM1,100,001-RM1,200,000 1 Non-executive directors: RM50,000 and below 5 UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

108 (5) Operating profit/(loss) (CONTD.)

(a) The following amounts have been included in arriving at operating profit/(loss): (Contd.)

Group 1.1.2008 1.1.2007 to to 31.12.2008 31.12.2007 RM’000 RM’000 (ii) Staff costs Wages and salaries 12,926 9,690 Statutory contribution to EPF and social security costs 2,035 1,645 Staff benefits and welfare 6,273 4,243 Training and others 1,407 626 Cost of share options 416 5,219 23,057 21,423 Capitalised to: Land held for property development (Note 12) (1,309) (975) Property development costs (Note 22) (4,186) (268) 17,562 20,180

(6) Finance costs

Group 1.1.2008 1.1.2007 to to 31.12.2008 31.12.2007 RM’000 RM’000 Finance costs incurred and accrued during the year/period on: – term loan 41,082 38,214 – bridging loan 216 136 – bank overdraft 733 274 – shareholder’s advances 8,433 185 50,464 38,809 Capitalised to: – land held for property development (Note 12) (32,963) (30,931) – property development costs (Note 22) (11,134) (7,284) (44,097) (38,215) 6,367 594 UEM LAND HOLDINGS BERHAD

(7) income Tax 109

Group COMPANY 1.1.2008 1.1.2007 20.08.2008 to to to 31.12.2008 31.12.2007 31.12.2008 RM’000 RM’000 RM’000 Continuing operations Malaysian income tax: Current year 7,217 15,599 – Underprovision in prior years 3,204 752 – 10,421 16,351 Deferred tax (Note 19): Relating to origination and reversal of temporary differences (7,962) (71,753) – Effect on opening deferred tax of reduction in Malaysian income tax rate (2,791) (2,829) – Under/(over) provision of deferred tax in prior year 963 (14,233) – (9,790) (88,815) – Total income tax expense 631 (72,464) –

Domestic income tax is calculated at the Malaysian statutory tax rate of 26% (2007: 27%) of the estimated assessable profit for the year/period. The domestic statutory tax rate will be reduced to 25% from the current year’s rate of 26%, effective year of assessment 2009. The computation of deferred tax as at 31 December 2008 has reflected these changes.

Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

There are no tax charges for the Company as it is in a tax loss position.

A reconciliation of income tax expense applicable to profit/(loss) before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company is as follows:

Group COMPANY 1.1.2008 1.1.2007 20.08.2008 to to to 31.12.2008 31.12.2007 31.12.2008 RM’000 RM’000 RM’000

Profit/(loss) before tax 75,700 457,279 (1,503)

Taxation at Malaysian statutory tax rate of 26% (2007: 27%) 19,682 123,465 (391) Effect of different tax rates (3) (105) – Income not subject to tax (2,227) (283,479) – Expenses not deductible for tax purposes 1,296 1,668 391 Deferred tax recognised at different tax rate (2,791) (2,829) – Utilisation of previously unrecognised tax losses and unabsorbed capital allowance (17,084) (2,066) – Deferred tax assets not recognised during the year 505 104,868 – Tax effect on share of associate’s results (2,914) (505) – Underprovision of tax expense in prior years 3,204 752 – Under/(over) provision of deferred tax in prior years 963 (14,233) – Tax expense for the year/period 631 (72,464) –

UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

110 (8) earnings per share

(a) Basic

Basic earnings per share amounts are calculated by dividing profit for the year attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the financial period held by the Company, which included the assumed issuance of the MCRPS, which was issued subsequent to financial year end, as disclosed in Note 35(d).

Group 2008 2007

Profit for the year attributable to ordinary equity holders of the Company (RM’000) 74,189 529,128

Weighted average number of ordinary shares in issue (’000) 2,428,177 2,141,455

Basic earnings per share (sen) 3.1 24.7

(b) Diluted

For the purpose of calculating diluted earnings per share, the profit for the year attributable to ordinary equity holders of the Company and the weighted average number of ordinary shares in issue during the financial year have been adjusted for the dilutive effects of all potential ordinary shares.

Group 2008 2007 RM’000 RM’000

Profit for the year attributable to ordinary equity holders of the Company 74,189 529,128 Profit for the year of subsidiaries attributable to minority interests arising from dilutive impact of unexercised options (16,719) (133,012)

Profit for the year attributable to ordinary equity holders of the Company including assumed conversion 57,470 396,116

Weighted average number of ordinary shares in issue (’000) 2,436,795 2,141,455

Diluted earnings per share (sen) 2.4 18.5 UEM LAND HOLDINGS BERHAD

(9) Disposal group classified as held for sale 111

Renong Overseas Corporation Sdn Bhd (“ROC”), a wholly-owned subsidiary of the Company, entered into an agreement to dispose of its entire interests in Renong Overseas Corporation S.A. (Proprietary) Limited (“ROCSA”) on 1 February 2006. This agreement has since lapsed.

On 8 January 2007, ROC entered into an agreement with Bonatla Property Holdings Ltd ("Bonatla") to dispose of its interest in ROCSA for a cash consideration of Rand 150,000,000 (equivalent to approximately RM55.1 million (2007: RM71.1 million)) and the disposal is currently pending fulfillment of certain conditions precedent.

During the financial year, Vullindlela Holdings (Pty) Limited has jointly with Vullindlela Investments (Pty) Limited (“Applicants”) filed an interlocutory proceedings in the High Court of South Africa, Durban and Coast Local Division against ROC, a wholly-owned subsidiary of the Company. The Applicants are companies incorporated in South Africa and hold direct and indirect interest in ROC-Union (Pty) Ltd, a subsidiary of ROCSA, which in turn is a wholly owned subsidiary of ROC.

The Applicants are requesting for a relief to injunct ROC from completing its sale of shares in ROCSA to Bonatla and/or its nominee, N. Georgiou Trust. ROCSA and Vullindlela Investments (Pty) Limited respectively hold 80.4% and 19.6% equity interests in ROC-Union (Pty) Ltd.

Save for the above, ROC remains committed in the sale transaction and are currently in negotiation with the Applicants for an out of court settlement.

The major classes of assets and liabilities of the investment classified as held for sale on the consolidated balance sheet as at 31 December 2008 are as follows:

Group 2008 2007 RM’000 RM’000 Assets: Property, plant and equipment 6 13 Investment in associates 28,359 37,584 Receivables 106 150 Cash and bank balances (Note 20) 47 958 Assets of disposal group classified as held for sale 28,518 38,705

Liability, representing liabilities of disposal group classified as held for sale: Payables – (947) Net assets attributable to discontinued operations 28,518 37,758

UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

112 (10) Property, Plant and EquIpment

Freehold Freehold Motor Land Building Renovation vehicles Others Total Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 31 December 2008 Net carrying amount at 1 January 2008 300 4,396 263 142 5,624 10,725 Currency translation differences – – – (2) (19) (21) Additions – 87 – 1,156 2,573 3,816 Disposals – – – – (8) (8) Depreciation charge – (91) (32) (96) (1,934) (2,153) Net carrying amount at 31 December 2008 300 4,392 231 1,200 6,236 12,359

Cost 300 4,667 318 2,899 13,831 22,015 Accumulated depreciation – (275) (87) (1,699) (7,595) (9,656) Net carrying amount 300 4,392 231 1,200 6,236 12,359

At 31 December 2007 Net carrying amount at 1 January 2007 300 4,463 278 219 4,724 9,984 Currency translation differences – – – 3 (28) (25) Additions – 24 17 – 2,427 2,468 Disposals – – – – (4) (4) Depreciation charge – (91) (32) (80) (1,495) (1,698) Net carrying amount at 31 December 2007 300 4,396 263 142 5,624 10,725

Cost 300 4,580 318 1,745 11,285 18,228 Accumulated depreciation – (184) (55) (1,603) (5,661) (7,503) Net carrying amount 300 4,396 263 142 5,624 10,725 UEM LAND HOLDINGS BERHAD

(11) Prepaid land lease payments 113

Group 2008 2007 RM’000 RM’000 Long term leasehold land At 1 January 407 472 Foreign exchange adjustment (49) (41) Amortisation for the year (24) (24) At 31 December 334 407

(12) land held for property development

Group 2008 2007 RM’000 RM’000 Freehold land Cost At 1 January 1,546,824 2,248,796 Fair value adjustment # – 239,760 Addition 213,743 41,193 Transfer to property development costs (Note 22) (221,150) (985,498) Change in estimate * 4,883 2,573 At 31 December 1,544,300 1,546,824

This development originally comprised 23,875 acres of freehold land zoned for residential, commercial and industrial development known as Nusajaya that is spearheaded by a subsidiary, UEM Land Berhad (formerly known as UEM Land Sdn. Bhd.) (“UEMLB”). Nusajaya is located in the southern tip of Johor adjacent to the Malaysia-Singapore Second Crossing and is accessible to major expressways, airports and ports. As a master township developer, its development activities include, inter-alia, reviewing the development masterplan to maximise land usage and re-zoning areas identified for specific catalyst development to accelerate the development of the township. Currently, certain subsidiaries are actively pursuing these activities to accelerate the township development.

In addition to its own property development where the related land costs and development expenditure are classified in Note 22, as property development costs, UEMLB also disposed of parcels of land to established developers to further accelerate the development of the township. The balance of unsold freehold land after reduction of public areas, electricity distribution sub-stations and others is approximately 8,749 acres (2007: 8,924 acres) of which approximately 2,468 acres (2007: 2,136 acres) are classified under property development costs which comprises parcels of land where active development activities have commenced as well as parcels of land that were previously sold but subsequently aborted during the economic crisis in 1998.

The land titles for approximately 1,950 acres (2007: 1,950 acres) of the above freehold land have been deposited with the immediate holding company as security for a borrowing taken by a subsidiary which restrict their disposals or transfers. Further details on the borrowing are disclosed in Note 29.

Land titles for approximately 589 acres (2007: 654 acres) of the above freehold land are subject to a third party charge as security for borrowings taken by a joint venture company. UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

114 (12) land held for property development (Contd.)

Included in addition to the land held for property development of the Group during the financial year are as follows:

Group 2008 2007 RM’000 RM’000

Interest capitalised 32,963 30,931 Staff costs 1,309 975

# In the previous financial year, the adjustment was related to the acquisition of remaining 18% interest in an existing subsidiary, Bandar Nusajaya Development Sdn. Bhd. (“BND”) by UEMLB.

The Group allocated costs included in land held for property development and property development costs (Note 22) based * on the estimated net land acreage after deducting land for open space and infrastructure reserve areas. The change in estimate resulted from the change in the open space and infrastructure reserve areas and the costs have been reallocated accordingly.

Included in land held for property development of the Group are parcels of land committed through various agreements as follows:

(i) Option to Purchase Agreement between Panoramic Industrial Development Sdn. Bhd. and BND

BND and Panoramic Industrial Development Sdn. Bhd. ("Panoramic") entered into an Option to Purchase Agreement on 31 May 2004 which became unconditional on 1 December 2005 when all the Condition Precedents ("CP") have been fulfilled ("Option Date"). Upon receipt of a consideration sum of RM2 million from Panoramic, BND, as agent for and on behalf of Nusajaya Heights Sdn. Bhd. ("Nusajaya Heights") granted Panoramic the following:

(i) the right to develop and sell parcels of land and/or the sublots measuring in aggregate approximately 341.8827 acres all in Mukim of Pulai, Daerah Johor Bahru, Negeri Johor Darul Ta’zim ("the Panoramic Development Land"); and

(ii) the option, at any time and from time to time during the Option Period to purchase any of the lands and/or the sublots.

Under the Option to Purchase Agreement, the parties agreed that Panoramic shall complete the Panoramic Development Land in three (3) phases within a period of 8 years commencing from the Option Date as follows ("Option Period"):

(i) Phase 1 of the Panoramic Development Land held under PTD 123299, PTD 123300 and PTD 123304 measuring in aggregate approximately 185.6226 acres;

(ii) Phase 2 of the Panoramic Development Land held under PTD 123296 and PTD 123298 measuring in aggregate approximately 54.4149 acres;

(iii) Phase 3 of the Panoramic Development Land comprising parcels of land held under PTD 123292, PTD 123293 and PTD 123294 measuring in aggregate approximately 101.8452 acres;

The Parties also agreed that Panoramic shall be obliged to purchase a minimum area of the Panoramic Development Land as follows:

(i) during the period of 3 years beginning from the Option Date ( the "1st Period"), at least an aggregate of 50 acres of Phase 1 of the Panoramic Development Land;

(ii) during the period of 2 years beginning from the date of the expiry of the 1st Period (the "2nd period"), at least an aggregate of 50 acres of Phase 1 of the Panoramic Development Land;

(iii) during the period of 2 years beginning from the date of the expiry of the 2nd Period, at least an aggregate of 50 acres of Phase 1 of the Panoramic Development Land. UEM LAND HOLDINGS BERHAD

(12) land held for property development (Contd.) 115

(ii) Development Agreement between Horizon Hills Development Sdn. Bhd. ("Horizon Hills") and Nusajaya Greens Sdn. Bhd. ("Greens")

On 16 June 2005, BND, as the sole and exclusive agent of its 100% subsidiary, Greens, entered into a Development Agreement with Horizon Hills, a 50:50 joint venture company between UEMLB and Gamuda Berhad, for a proposed mixed development of 1,000 acres ("Mixed Development Land") and an integrated golf course development of 200 acres ("Golf Course Land") of land in Mukim Pulai, Daerah Johor Bahru, Negeri Johor Darul Ta’zim for a total purchase consideration of RM391.39 million to be completed over a period of 15 years based on agreed series of put and call option arrangements between both parties.

The Development Agreement became unconditional on 5 September 2005 upon completion of all conditions precedent.

As at the balance sheet date, Horizon Hills has exercised option to purchase the following:

MIXED Golf Development Course Land land Total Financial Year Acres Acres Acres 2005 200.00 40.00 240.00 2006 106.00 20.00 126.00 2007 67.22 140.00 207.22 2008 64.39 – 64.39 437.61 200.00 637.61

(13) Investment in subsidiaries

Company 2008 RM’000 Unquoted shares, at cost 1,254,153

Details of the subsidiaries are disclosed in Note 38.

During the period, the Company acquired 100% interest in UEMLB for a consideration amounting to RM1,254,153,000 satisfied by issuance of the Company's shares pursuant to the Restructuring Scheme as disclosed in Note 35(a) to the financial statements.

(14) Investment in associates

Group 2008 2007 RM’000 RM’000 In Malaysia: Unquoted share at cost – Ordinary shares 52,169 52,169 Share of post-acquisition reserves (20,612) (24,130) 31,557 28,039 Premium on acquisition written off (193) (193) Negative goodwill on acquisition transferred to accumulated losses 479 479 Accumulated impairment losses (16,762) (16,762) 15,081 11,563 UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

116 (14) Investment in associates (Contd.)

Group 2008 2007 RM’000 RM’000 The amount due from associates comprise the following: Trade 27,022 28,563 Non-trade – 11 27,022 28,574

The non-trade amount due from associates are unsecured, interest free and repayable on demand.

Details of associates are disclosed in Note 39.

Note

(i) The Group's aggregate share of the revenue and profit for the year, assets and liabilities of the associates based on management financial statements are as follows:

Group 2008 2007 RM’000 RM’000 Results Revenue 21,148 13,088

Profit for the year 5,741 4,084

Assets and liabilities Current assets 58,056 48,106 Non-current assets 4,888 3,663 Current liabilities (47,863) (40,206) Share of net assets 15,081 11,563

(15) Investment in joint ventures

Group 2008 2007 RM’000 RM’000

Unquoted shares, at cost 24,486 15,327 Share of post-acquisition reserves 725 (4,741) 25,211 10,586

The amount due from joint ventures is unsecured, interest free and repayable on demand. UEM LAND HOLDINGS BERHAD

(15) Investment in joint ventures (Contd.) 117

(i) The Group's aggregate share of the revenue, expenses, assets and liabilities of the joint ventures are as follows:

2008 2007 RM’000 RM’000

Revenue 130,654 13,155 Other income 813 261 Expenses, including finance costs (126,000) (15,631) 5,467 (2,215)

Current assets 98,548 58,372 Non-current assets 185,378 138,837 Current liabilities (158,715) (141,623) Non-current liabilities (100,000) (45,000) Net assets 25,211 10,586

During the financial year, UEMLB subscribed to additional 115,000 redeemable preference shares in Horizon Hills Development Sdn. Bhd. ("Horizon Hills") at nominal and premium of RM1.00 and RM99.00 each respectively per share through cash payment of RM11,500,000.

Pursuant to the Subscription and Shareholders Agreement dated 19 December 2007 between UEMLB, Limitless Holdings Pte. Ltd. and Haute Property Sdn. Bhd. ("HPSB"), HPSB has issued and allotted to UEMLB additional 39,600 ordinary shares of RM1.00 each satisfied by cash during the financial year.

There are no contingent liabilities and capital commitments in relation to the Group's interest in joint ventures, except for the balance of consideration payable by HPSB pursuant to the Development Agreement between UEMLB, BND and HPSB as disclosed in Note 35(b).

Details of the joint ventures are disclosed in Note 40.

(16) Long term investments

Group 2008 2007 RM’000 RM’000 At cost: Unquoted shares in Malaysia 28,790 28,790 Less: Accumulated impairment losses (28,632) (28,025) 158 765

UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

118 (17) Long term receivable

Group 2008 2007 RM’000 RM’000

Due from a State Government 87,893 87,893 Less: Allowance for doubtful debt (23,670) (22,370) 64,223 65,523

This represents the amount due from Perbadanan Kemajuan Negeri Perak which is repayable by way of land to be transferred to the Group.

(18) Goodwill

Group 2008 2007 RM’000 RM’000

At 1 January 39,223 36,822 Accretion of interest in subsidiary – 2,401 At 31 December 39,223 39,223

Goodwill is evaluated for impairment on an annual basis by comparing the carrying amount with the recoverable amount, which is based on market prices or value in use. Management is of the opinion that since all the Cash Generating Units ("CGU's") are to be held on a long term basis, value in use would best reflect its recoverable amount. The future cash flows are based on management’s five-year business plan, which is a reasonable estimate of future performance.

There remains a risk that, due to unforeseen changes in the respective economies in which the CGUs operate and/or global economic conditions, the ability to achieve management’s business plan may be adversely affected. In calculating the value in use for each CGU, management has applied the discount rates ranging from 7% to 11% and a growth rate for the period beyond five years of 5%.

The following describes the key assumptions on which management has based its cash flow projections for the purposes of evaluating the impairment of goodwill:

(a) The discount rate used reflected the management's estimate of return on capital employed required in the respective segments.

(b) Growth rate for the period beyond five years has been used based on published industry research for each segment.

(c) The profit margin applied to the projections are based on the historical profit margin trend for the individual CGU or budgeted profit margin for predetermined projects obtained.

(d) The cash flow projections are based on the assumption that a reasonable percentage of projects tendered and new products launched are successful, based on past experience. UEM LAND HOLDINGS BERHAD

(19) Deferred tax liabilities 119

Group 2008 2007 RM’000 RM’000

At 1 January 154,787 168,222 Recognised in income statement (Note 7) (9,790) (88,815) Fair value adjustment on land held for property development and property development cost – 75,380 At 31 December 144,997 154,787

The components and movements of deferred tax liabilities and assets during the financial period/year prior to offsetting are as follows:

Deferred tax liabilities of the Group:

Revaluation of land and Interest building capitalised Others TOTAL RM’000 RM’000 RM’000 RM’000

At 1 January 2008 77,977 216,650 2,456 297,083 Recognised in the income statement (6,006) (12,586) (176) (18,768) At 31 December 2008 71,971 204,064 2,280 278,315

At 1 January 2007 50,472 317,024 3,782 371,278 Recognised in the income statement (47,875) (100,374) (1,326) (149,575) Fair value adjustment on land held for property development and property development costs 75,380 – – 75,380 At 31 December 2007 77,977 216,650 2,456 297,083

UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

120 (19) Deferred tax liabilities (Contd.)

Deferred tax assets of the Group:

Tax losses and capital Provisions allowances TOTAL RM’000 RM’000 RM’000

At 1 January 2008 (2,053) (140,243) (142,296) Recognised in the income statement (872) 9,850 8,978 At 31 December 2008 (2,925) (130,393) (133,318)

At 1 January 2007 (1,671) (201,385) (203,056) Recognised in the income statement (382) 61,142 60,760 At 31 December 2007 (2,053) (140,243) (142,296)

Deferred tax assets are not recognised in respect of the following items:

Group 2008 2007 RM’000 RM’000

Unused tax losses 465,201 570,480 Unabsorbed capital allowances – 3,990 Others 3,740 3,185 468,941 577,655

The availability of the unused tax losses and unabsorbed capital allowances for offsetting against future taxable profits of the Group are subject to no substantial changes in shareholdings of the respective companies under the Income Tax Act, 1967, and guidelines issued by the tax authority.

Deferred tax assets have not been recognised in respect of the above items as it is not probable that future taxable profits will be available in these subsidiaries against which the Group can utilise the benefits. UEM LAND HOLDINGS BERHAD

(20) Cash, bank balances and deposits 121

Group COMPANY 2008 2007 2008 NOte RM’000 RM’000 RM’000 Deposits with licensed banks (excluding deposits pledge as security) (i) 6,595 29,117 – Cash and bank balances (ii) 26,810 27,274 – 33,405 56,391 Bank overdraft 29 (8,633) (10,710) – Cash and bank balances included in assets of – disposal group 9 47 958 – Cash and cash equivalents 24,819 46,639 –

Deposits with licensed banks: – Short term deposits 6,595 29,117 – Non-current deposits 1,418 1,418 – 8,013 30,535 –

(i) Deposits pledged as security

The non-current deposits represent deposits pledged as security for bank guarantee facilities and bank facilities granted to the subsidiaries.

(ii) Cash and bank balances

Included in cash and bank balances of the Group is an amount of RM9,370,000 (2007: RM6,602,000) held in a Housing Development Account as required by Section 7A of the Housing Developers (Control and Licensing) Act, 1966.

The average interest rates and maturities of deposits of the Group were 3.67% (2007: 3.39%) and 65 days (2007: 125 days) respectively.

(21) Amount due from subsidiary

The amount due from subsidiary is unsecured, interest-free and is not expected to be repaid within the next 12 months. UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

122 (22) Property development costs

Group 2008 2007 RM’000 RM’000 At 1 January Freehold land 457,464 456,234 Development costs 138,555 89,948 596,019 546,182

Costs incurred during the year: – Freehold land 11,954 9,830 – Development costs 224,376 5,542 Fair value adjustment # – 50,158 Transfer from: – land held for property development (Note 12) 221,150 985,498 – other debtors 31,078 – Transfer to amount due from customers on construction contracts (967) – Transfer to inventories (7,057) (12,480) Change in estimate * (4,883) (2,573) Reversal of cost arising from completed projects (132,225) (986,138) 343,426 49,837 At 31 December 939,445 596,019

Costs recognised in income statement At 1 January (31,190) (17,924) Recognised in income statement during the year (328,836) (999,404) Reversal of cost arising from completed projects 132,225 986,138 At 31 December (227,801) (31,190) Property development costs as at 31 December 711,644 564,829

Included in costs incurred during the year are: Interest expense 11,134 7,284 Staff costs 4,186 268

Property development costs mainly relate to development activities for Nusa Idaman, Nusajaya Industrial Park, Ledang Heights and East Ledang development projects carried out by the subsidiaries. Included in property development costs is freehold land measuring approximately 2,468 acres (2007: 2,136 acres).

Land titles for approximately 97 acres (2007: 97 acres) of the above freehold land are subject to a third party charge to secure borrowing of a subsidiary as disclosed in Note 29. # In the previous financial year, the adjustment was related to the acquisition of remaining 18% interest in an existing subsidiary, BND by UEMLB. * The Group allocated costs included in land held for property development (Note 12) and property development costs based on the estimated net land acreage after deducting land for open space and infrastructure reserve areas. The change in estimate arose due to the change in the open space and infrastructure reserve areas and the costs have been reallocated accordingly. UEM LAND HOLDINGS BERHAD

(23) Inventories 123

Group 2008 2007 RM’000 RM’000 At cost Completed properties 35,905 34,797

The cost of inventories and work-in-progress recognised as an expense during the year is RM10,064,000 (2007: RM13,183,000).

(24) Receivables Group 2008 2007 note RM’000 RM’000

Trade receivables 290,848 193,995 Accrued billings in respect of property development costs 33,105 16,523 Amount due from related parties (i) 1,237 1,424 Amount due from customers on construction and turnkey development contracts (ii) 78,784 26,077 Other receivables (iii) 63,517 69,184 467,491 307,203 Less : Allowance for doubtful debts (iv) (20,019) (24,676) 447,472 282,527

(i) Related parties refer to those as specified in Note 33.

(ii) Amount due from customers on construction and turnkey development contracts

Group 2008 2007 RM’000 RM’000

Costs incurred to date 517,954 421,563 Add : Attributable profit 13,633 8,484 Less : Provision for foreseeable losses (1,558) (1,558) 530,029 428,489 Less: Progress billings (453,645) (405,084) Net amount due from customers 76,384 23,405

Presented as follows: Amount due from customers 78,784 26,077 Amount due to customers (Note 31) (2,400) (2,672) 76,384 23,405

Contract revenue recognised as revenue in the year (Note 3) 94,880 223,784 Contract costs recognised as an expense in the year 89,731 220,317

Retention sum receivable on construction and turnkey development contracts 1,500 1,761 UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

124 (24) Receivables (Contd.)

(iii) Other receivables

Group 2008 2007 RM’000 RM’000

Project related expenses 20,662 23,232 Sundry debtors and prepayments 34,516 38,660 Interest and bond profit receivable 2,653 2,653 Deposits 5,686 4,639 63,517 69,184

(iv) Allowance for doubtful debts

Trade receivables 173 265 Projects debtors 8,974 10,195 Amount due from related parties 581 – Sundry debtors 10,291 14,216 20,019 24,676

(25) Amounts due from/to immediate holding company

The amount due from immediate holding company in the previous financial year is unsecured, interest free and repayable on demand.

The amount due to immediate holding company is unsecured, subject to interest at the rate of 5.3% (2007: 5.3%) per annum and repayable on demand.

(26) Short term investments

Group 2008 2007 RM’000 RM’000 Cost of quoted shares in Malaysia 36 36 Less: Accumulated impairment losses (29) (29) 7 7

Market value of quoted shares 7 11

UEM LAND HOLDINGS BERHAD

(27) Share capital 125

Number of ordinary shares of RM0.50 each 2008 Amount ’000 RM’000 Authorised share capital Ordinary shares At date of incorporation, 20 August 2008/31 December 2008 5,000,000 2,500,000

Number of preference shares of RM0.01 each 2008 Amount ’000 RM’000 Mandatory redeemable convertible preference shares At date of incorporation, 20 August 2008/31 December 2008 200,000 2,000

Number of ordinary shares of Amount RM0.50 each RM’000 Issued and fully paid Ordinary shares At date of incorporation, 20 August 2008 4 * Ordinary shares issued during the period: Acquisition of subsidiary 2,428,176,907 1,214,088 At 31 December 2008 2,428,176,911 1,214,088

* RM2.00 represented by 4 ordinary subscriber's shares of RM0.50 each

Ordinary shares issued for acquisition of subsidiary Pursuant to the Restructuring Scheme as disclosed in Note 35(a), the Company issued 2,428,176,907 new ordinary shares of RM0.50 each at an issue price of RM0.52 per ordinary share amounting to RM1,214,088,453.50 as purchase consideration for the acquisition of UEMLB to the following parties:

The new ordinary shares rank pari passu in all respects with the existing ordinary shares of the Company. UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

126 (28) Non-distributable reserves

Group 2008 2007 RM’000 RM’000 (i) Revaluation reserves At 1 January/31 December 3,269 3,269

(ii) Exchange fluctuation reserves At 1 January 20,759 20,405 Foreign currency translation (9,113) 354 At 31 December 11,646 20,759

(iii) Share-based payment reserve At 1 January 6,992 1,524 Recognised during the year 444 5,468 Transferred to accumulated losses (7,436) – At 31 December – 6,992

(iv) Merger reserve/(deficit) At 1 January 32,112 (115,251) Issue of ordinary shares – 147,363 At 31 December 32,112 32,112 TOTAL 47,027 63,132

The movements of other reserves are disclosed in the statement of changes in equity.

(29) Borrowings

Group 2008 2007 note RM’000 RM’000 Long term borrowings Secured UEM Term Loan (a) 588,820 547,738 Bridging Loan (b) 1,841 1,841 590,661 549,579

Short term borrowings Secured Bank overdraft 20 8,633 10,710 UEM LAND HOLDINGS BERHAD

(29) Borrowings (CONTD.) 127

(a) On 24 June 2005, Khazanah transferred the loan agreement dated 27 June 2003 with BND ("Loan Agreement") inclusive of the amount owing by BND to Khazanah of approximately RM891.7 million as at 31 May 2005 ("Transferred Amount") to UEM Group Berhad ("UEM") ("Transfer"), in consideration of UEM disposing of 297,239,694 ordinary shares of RM0.25 each in PLUS Expressways Berhad ("PEB") representing 5.94% equity interest in PEB to Khazanah.

The Transferred Amount together with interest thereon at the rate of 6.5% per annum from 1 June 2005 until the date of final settlement calculated in accordance with the Loan Agreement ("Outstanding Amount") was due and repayable by BND to UEM on or before 30 June 2005. UEM had vide letter dated 28 June 2005 extended the date for repayment to on or before 31 December 2005.

Following the Transfer, BND and UEM had on 9 August 2005, entered into the following agreements to refinance the Outstanding Amount:

• Subscription Agreement for the proposed issuance of 450 million Redeemable Convertible Preference Shares ("RCPS") of RM1.00 each by BND to UEM; and

• a seven-year term loan ("UEM Term Loan") agreement ("Term Loan Agreement") at an interest rate of 7.5% per annum compounded annually.

The Subscription Agreement and the Term Loan Agreement became unconditional on 15 September 2005. On 28 November 2005, the RCPS and Term Loan were issued and effective respectively.

The principal amount of the UEM Term Loan was RM470.7 million, being the Outstanding Amount less RM450.0 million RCPS. The land titles to approximately 1,950 acres of freehold land are deposited with UEM as security for the Term Loan and any transfer or disposal of the land are restricted as disclosed in Note 12.

(b) The bridging loan taken by Nusajaya Development Sdn. Bhd. ("NDSB"), a wholly-owned subsidiary of the Company, bears an average interest rate of 7.8% per annum. This bridging loan, together with the bank overdraft taken by NDSB as disclosed in Note 20, are secured by:

• Third party charged over 1,219 individual titles measuring approximately total net area of 97 acres (subject security);

• Limited debentures over the subject security;

• Assignment of all sales proceeds and monies available in the respective Housing Developer Accounts;

• Corporate Guarantee by UEMLB; and

• Letter of Undertaking from UEMLB to provide sufficient funds to meet all costs overruns and shortfall in the cashflow and working capital of the Nusa Idaman Project. UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

128 (30) provisions

group

Land Provision for acquisition and Resettlement Construction appeal costs costs costs RM’000 RM’000 RM’000 TOTAL (Note a) (Note b) (Note c) RM’000

2008 At 1 January 8,962 20,777 4,844 34,583 Utilised (8,530) (325) (2,274) (11,129) Addition – – 11,916 11,916 At 31 December 432 20,452 14,486 35,370

2007 At 1 January 18,962 21,145 177 40,284 Utilised (10,000) (368) (170) (10,538) Addition – – 4,837 4,837 At 31 December 8,962 20,777 4,844 34,583

(a) Land acquisition and appeal costs

Provision for land acquisition and appeal costs is in respect of disputes on the compensation payable to the previous landowners of Nusajaya by BND. The provision is recognised based on award of additional compensation by the High Court and Federal Court. BND is not directly involved in this litigation, but by virtue of the Novation Agreement dated 2 December 1994 entered between BND, UEM and the State Authority ("1994 Novation Agreement"), BND is responsible for the additional cost of land alienated to it, which includes the amounts claimed by the landowners.

(b) Resettlement costs

BND undertook to relocate certain settlers in Nusajaya. The provision is recognised based on the estimate derived from past experience.

Provision for construction costs relates to estimated final claims by sub-contractors which have not been finalised.

Provision for land acquisition, appeal costs and resettlement costs have been capitalised in the land held for property development and property development costs and recognised as part of cost of sales based on land area sold. UEM LAND HOLDINGS BERHAD

(31) Payables 129

Group COMPANY 2008 2007 2008 NOte RM’000 RM’000 RM’000

Trade payables 42,137 43,382 – Amount due to customers on turnkey development contracts 24 (ii) 2,400 2,672 – Amount due to related parties (i) 84,103 83,725 – Accruals for contract claims 50,217 83,796 – Other payables and accruals (ii) 210,689 47,642 159,502 389,546 261,217 159,502

(i) Related parties refer to those specified in Note 33.

(ii) Other payables and accruals

Group COMPANY 2008 2007 2008 RM’000 RM’000 RM’000 Sundry creditors * 175,454 10,506 159,502 Deposits received 3,104 24,176 – Accruals 2,734 4,848 – Employee benefits 5,099 3,731 – External infrastructure contribution from land sales 24,298 4,381 – 210,689 47,642 159,502

* Included in sundry creditors of the Group and the Company is an amount of RM154,914,000 (2007: Nil) arising from the acquisitions of parcels of freehold land and equity interests in Finwares Sdn. Bhd., as disclosed in Note 35(d). The acquisitions will be satisfied via issuance of MCRPS of RM0.01 each in the Company at an issue price of RM1.00 per MCRPS. MCRPS was issued on the 8 January 2009 as an equity instrument. UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

130 (32) Financial instrument and financial risk management objectives and policies

The daily operations of the Group require the use of financial instruments. A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability or equity instrument of another enterprise.

Financial asset is any asset that is cash, a contractual right to receive cash or another financial asset, contractual right to exchange financial instruments from other enterprises under conditions that are potentially favourable or an equity instrument of another enterprise, whilst financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to other enterprises or to exchange financial instruments with another enterprise under conditions that are potentially unfavourable.

The use of financial instruments exposes the Group to financial risks which are categorised as credit, foreign currency, liquidity, cash flow, interest rate and market risks.

The Group’s financial risk management policies seek to ensure that adequate financial resources are available for the development of the respective companies businesses whilst managing their risks. Financial risk management is carried out through risk reviews, internal control systems and adherence to the Group financial risk management policies that are approved by the Board.

It is the Group’s policy not to engage in speculative transactions. As and when the Group undertakes significant transactions with risk exposure, the Group evaluates its exposure and the necessity to hedge such exposure taking into consideration the availability and cost of such hedging instruments.

The policies for controlling these risks when applicable are set out below:

(a) Credit risk

The Group controls its credit risk by the application of credit approvals, limits and monitoring procedures. Credit evaluations are performed on all customers requiring credit over a certain amount and strictly limiting the Group’s associations to business partners with high credit worthiness. Trade receivables are monitored on an ongoing basis.

Generally, the Group does not require collateral in respect of its financial assets. The Group is not duly exposed to any individual customer or counter party nor does it have any major concentration of credit risk related to any financial instrument.

(b) Foreign currency risk

The Group maintains a natural hedge, whenever possible, by borrowing in the currency of the country in which the property or investment is located or by borrowing in currencies that match the future revenue stream to be generated from its investments. Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level and short-term imbalances are addressed by buying or selling foreign currencies at spot rates.

The table below shows the Group’s currency exposures, i.e. those transactional (or non-structural) exposures that give rise to the net currency gains and losses recognised in the income statement. Such exposures comprise the monetary assets and monetary liabilities of the Group that are not denominated in the operating currency of the operating units involved.

Functional currency Of group 2008 2007 RM’000 RM’000 South Africa Rand 29,801 42,137 United States Dollar 13,652 13,005 43,453 55,142

These amounts relate to inter-company balances (eliminated at Group) which are denominated in a different currency to the functional currency of the operating unit involved and are included in the table above as they potentially give rise to currency gains and losses recognised in the income statements. UEM LAND HOLDINGS BERHAD

(32) Financial instrument and financial risk management objectives and policies (CONTD.) 131

The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that all refinancing, repayment and funding needs are met. As part of its overall prudent liquidity management, the Group endeavours to maintain sufficient levels of cash or cash convertible investments to meet its working capital requirements.

In addition, the Group’s objective is to maintain a balance of funding and flexibility through the use of credit facilities, short and long term borrowings. Short-term flexibility is achieved through credit facilities and short-term borrowings. As far as possible, the Group raises committed funding from both capital markets and financial institutions and prudently balances its portfolio with some short term funding so as to achieve overall cost effectiveness.

The debt maturity profile of the Group is disclosed as follows:

Maturity of bonds and borrowings

Group 2008 2007 RM’000 RM’000 Within 1 year – Bank overdraft 8,633 10,710 Between 2 and 5 years – Bridging loan 1,841 1,841 After five years – Term loan 588,820 547,738 599,294 560,289

(d) Interest rate risk

The Group manages its interest rate exposure by maintaining a prudent mix of fixed and floating rate borrowings. The Group actively reviews its debt portfolio, taking into account the investment holding period and nature of its assets. This strategy allows it to capitalise on cheaper funding in a low interest rate environment and achieve a certain level of protection against rate hikes.

The interest profile of the financial assets and liabilities of the Group and of the Company as at balance sheet date is as follows:

Group COMPANY 2008 2007 2008 RM’000 RM’000 RM’000 Financial Assets Floating rate 35,781 58,767 – Interest free 653,444 424,406 1,406,417 689,225 483,173 1,406,417

Financial Liabilities Fixed rate 774,294 623,289 – Interest free 397,418 260,871 159,502 1,171,712 884,160 159,502 UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

132 (32) Financial instrument and financial risk management objectives and policies (CONTD.)

(d) Interest rate risk (Contd.)

The average interest rates per annum on the financial assets and liabilities as at balance sheet date were as follows:

Group 2008 2007 % % Financial Assets Floating rate 3.67 3.39

Financial Liabilities Fixed rate 7.08 7.08

The average interest rates per annum on the financial liabilities can be further analysed as follows:

Group 2008 2007 % % Financial Liabilities Term loan 7.50 7.50 Shareholder's advance 5.30 5.30 Bridging loan 7.75 7.75 Bank overdraft 7.75 7.75

(e) Market risk

Market risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices of the financial instrument or its security assets. For security assets, the Group maintains sufficient financial resources to offer its lenders should the market value of the security assets falls below the margin required by the lenders.

(f) Fair values

The fair values of financial assets and financial liabilities approximate their respective carrying values on the balance sheets of the Group and of the Company, except for the amounts due from/to related parties, holding companies and subsidiaries where it is impracticable to determine their fair values principally due to lack of repayment terms entered into by the parties involved. UEM LAND HOLDINGS BERHAD

(33) Significant related party transactions 133

(a) In addition to the transactions details elsewhere in the financial statements, the Group and the Company had the following transactions with related parties during the financial period:

Group 1.1.2008 1.1.2007 to to 31.12.2008 31.12.2007 RM’000 RM’000 Interest payable to UEM: – Term loan 41,082 38,214 – Shareholder's advances 8,433 185 Interest income receivable from UEM World – 317 Training fees paid/payable to subsidiaries of UEM: – UEM Group Management Sdn. Bhd. 758 200 – UEM Leadership Centre Sdn. Bhd. 182 – – UEM Academy Sdn. Bhd. 138 – Management fees payable to related companies: – UEM 349 698 – UEM World 229 183 Sale of land to joint ventures: – Haute Property Sdn. Bhd. 145,055 – – Horizon Hills Development Sdn. Bhd. 12,159 – Sale of land to a subsidiary of Khazanah: – Nusajaya Property Management Sdn. Bhd. – 1,430,377

Related parties refer to:

• Khazanah Nasional Berhad, the ultimate holding company, its subsidiaries and associates excluding subsidiaries and associates of the Company; • Directors and key management personnel having authority and representation for planning, directing and controlling the activities of the Company and their close family members; • enterprises owned by directors and key management personnel; and • enterprises that have a member of key management in common with the Company.

(b) Compensation of key management personnel

The remuneration of members of key management during the year was as follows:

Group COMPANY 1.1.2008 1.1.2007 20.08.2008 to to to 31.12.2008 31.12.2007 31.12.2008 RM’000 RM’000 RM’000 Salaries and other emoluments 1,605 1,594 103 Bonus 1,001 527 - Defined contribution plan 386 319 - Benefits-in-kind 389 347 - 3,381 2,787 103 UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

134 (34) Contingent liabilities Group 2008 2007 Note RM’000 RM’000 Unsecured Litigation, claims and legal suits – potential compensation payable to Felcra (a) 97,610 97,610 – potential compensation payable to the previous landowners (b) 201,318 201,318 Income tax assessment (c) 37,641 37,641 336,569 336,569

(a) Potential compensation payable to Felcra settlers

(i) A group of thirty three (33) Felcra settlers (“the Plaintiffs-1”) has collectively served an originating summons against Felcra Berhad (“Felcra”), District Land Administrator (“DLA”) and the Johor State Government (“State Government”) (collectively the “Defendants”). The Summons pertain to 198 acres of land previously owned by the State Government, developed by Felcra and subsequently alienated to BND, for the development of Nusajaya.

The Plaintiffs-1 seek, inter-alia, for the Defendants to pay an additional total sum of RM54.0 million for the 198 acres and an acre of land to each Plaintiff-1.

(ii) On 9 June 2003, another group of one hundred ninety seven (197) Felcra settlers (“the Plaintiffs-2”) has collectively served an originating summons against the Defendants. The summons pertain to 900 acres of land previously owned by the State Government, developed by Felcra and subsequently alienated to BND for the development of Nusajaya.

The Plaintiffs-2 seek, inter-alia, for the Defendants to pay to each Plaintiff-2 a sum of RM70,000 per acre, instead of RM29,162 (on average) as awarded by the State Government. The indicative contingent liability to BND is in the region of RM37 million.

BND is not directly involved in these litigations, but by virtue of the Novation Agreement, is responsible for the additional land cost of land alienated to it, which includes the amounts claimed by the Plaintiffs-1 and Plaintiffs-2. BND had been informed by the State Legal Advisor's Chamber that the High Court will resume full hearing of the case on 3 and 4 April 2009.

(b) Potential compensation payable to the previous landowners

There are in total fifty (50) cases referred to High Court involving claims against the State Government for additional compensation amounting to RM634.8 million by the previous landowners of lands acquired for the Malaysia Singapore Second Crossing Project.

After hearing the 50 cases, the High Court maintained the amount of compensation awarded by the DLA in 15 cases, and increased the amount of compensation in the remaining 35 cases. The parties involved however, made further appeals to the Court of Appeal for higher compensation. However, the Court of Appeal ordered that all land acquisition appeals to be transferred to the Federal Court.

Of these 50 cases: (i) 1 has been heard and dismissed by the Court of Appeal; (ii) 4 have been heard and dismissed by the Federal Court; (iii) 2 have accepted out-of-court settlements proposed by the Johor State Legal Advisor; (iv) 4 have withdrawn the case against DLA; and (v) 2 have been heard and granted additional compensation amounting to RM19.5 million by the Federal Court.

The remaining thirty seven (37) cases, which the plaintiffs are seeking compensation with a total amount of RM201.3 million, are pending hearing at the Federal Court.

BND is not directly involved in these litigations but by virtue of the Novation Agreement, is responsible for the additional land cost of land alienated to it, which includes the amounts claimed by the previous landowners.

To date, the hearing for the remaining 37 cases have not been fixed. UEM LAND HOLDINGS BERHAD

(34) Contingent liabilities (contd.) 135

On 16 January 2007, UEMLB received an additional assessment from the Inland Revenue Board ("IRB") for additional tax payable and tax penalties in respect of years of assessment 2003 and 2004, which would have resulted in an additional expense to the Group and UEMLB of RM37,640,702. UEMLB has started the appeal process against the additional assessment.

On 29 May 2008, the Director of Technical Department of IRB informed UEMLB that the said appeal had been forwarded to the Special Commissioners of Income Tax. The Special Commissioners of Income Tax had set the hearing date on 2 and 3 April 2009.

Based on the advice received from the tax agent, no provision for income tax and tax penalties have been made by UEMLB for this additional tax assessment and penalty as the Directors believe that the grounds for the appeal are valid.

(d) Third party charge

On 18 May 2007, Horizon Hills entered into the following: (i) The issue of, offer for subscription or purchase of, or invitation to subscribe for or purchase of Islamic Securities of up to RM270 million nominal value by Horizon Hills, comprising:

• up to 12-year Islamic Bank Guarantee Medium-Term Notes Programme of up to RM200 million nominal value under the principles of Murabahah (“IMTN Programme”); and

• up to 7-year Islamic Commercial Papers Programme of up to RM70 million nominal value under the principles of Murabahah.

(ii) A Kafalah (bank guarantee) facility of up to RM205 million to guarantee the nominal value of the IMTN Programme of up to RM200 million and one profit payment in respect of the IMTN Programme of up to RM5 million.

Collectively referred to “the Facilities”

In this respect, Nusajaya Greens Sdn. Bhd. had provided a third party charge over approximately 1,227 acres of land in favour of the security trustee for the Facilities (“Charge”). 638 acres out of the total of 1,227 acres had been purchased and paid by Horizon Hills. Save and except in the event of a default on the Facilities, the Charge is not expected to have a financial impact on the Group.

(35) Significant events

(a) Restructuring Scheme

On 15 February 2008, UEM World Berhad ("UEM World") announced a proposed Restructuring Scheme which among others, entailed the following:

(i) Non-renounceable restricted offer for sale of its equity interests in its listed subsidiaries, namely UEM Builders Berhad, Opus International (M) Berhad, Pharmaniaga Berhad and Cement Industries Of Malaysia Berhad on a basket basis, to its shareholders on a rights basis;

(ii) Internal reorganisation through disposal by UEM World of 71.5% equity interest in the UEMLB to the Company, in consideration for shares in the Company. The Company would also acquire from UEM, a further 28.5% equity interest in UEMLB, in consideration for shares in the Company;

(iii) Dividend-in-specie of 5 ordinary shares of RM0.50 each in the Company for every 4 existing ordinary shares of RM1.00 each in UEM World ("Proposed DIS");

(iv) Listing of the Company on the Main Board of Bursa Malaysia Securities Berhad after the Proposed DIS;

Following the completion of all of the above, the Company was successfully listed on the Main Board of Bursa Malaysia Securities Berhad on 18 November 2008. UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

136 (35) Significant events (contd.)

(b) Subscription and Shareholders’ Agreement between UEMLB, Limitless Holdings Pte. Ltd. ("Limitless") and Haute Property Sdn. Bhd. ("HPSB") and Development Agreement between UEMLB, BND and HPSB

On 19 December 2007, UEMLB, Limitless and HPSB entered into the following agreements:

(i) Subscription and Shareholders’ Agreement between UEMLB, Limitless and HPSB with a proposed shareholding structure in HPSB of 60:40 between Limitless and UEMLB respectively; and

(ii) Development Agreement between UEMLB, BND and HPSB for the proposed development of a high end residential enclave over 111 acres held under HS (D) 453895 PTD 154910, Mukim Pulai, Daerah Johor Bahru, Johor Darul Ta’zim within Nusajaya. In the previous financial year, UEMLB received an amount of RM24,175,800, being the 10% deposit on the consideration sum of RM241,758,000 payable pursuant to the Development Agreement. A further consideration of RM125,000,000 was received in the current financial year.

The Subscription and Shareholders' Agreement was completed on 18 February 2008.

On 12 June 2008, UEM World announced a proposed disposal of approximately 43.54 acres of land in Puteri Harbour ("the Land"), to DAMAC Properties (Malaysia) Sdn. Bhd. ("DAMAC") ("Proposed Disposal").

On the same day, DAMAC, BND and UEMLB entered into a Sale And Purchase Agreement ("SPA") to give effect to the Proposed Disposal.

The salient terms of the Proposed Disposal are as follows:

(i) BND, the registered owner of the land, has appointed UEMLB as the master developer of Puteri Harbour, and granted power to deal with and decide on and implement all aspects of the development related to Puteri Harbour;

(ii) UEMLB has agreed to sell and DAMAC has agreed to purchase the Land subject to the express conditions and restrictions-in- interest as may be prescribed in the issue document of titles to the land in accordance to the provisions of the SPA;

(iii) the SPA is conditional upon the conditions precedent within 6 months from the SPA date with an automatic extension of another 6 months thereafter; and

(iv) the cash consideration of RM396,438,495 under the Proposed Disposal shall be satisfied in installments over a period of approximately 4 years from the effective date of the SPA, which shall be the immediate day after the date when all the conditions precedent have been fulfilled.

The Proposed Disposal is subject to the following conditions precedent:

(i) approval from the Foreign Investment Committee for the sale of land;

(ii) approval from the relevant authorities for the amended layout plan for Puteri Harbour;

(iii) issuance of the individual land titles to the land with category of land use; and

(iv) the consent of the State Authority for the sale of the land. UEM LAND HOLDINGS BERHAD

(35) Significant events (CONTD.) 137

(d) Acquisitions of freehold lands and equity interests in Finwares Sdn. Bhd.

UEMLB had on 24 June 2008 entered into the following agreements:

(i) a conditional sale and purchase agreement with UEM Construction Sdn. Bhd. ("UEMC") (a wholly-owned subsidiary of UEM Builders Berhad, ("UEM Builders"), a subsidiary of UEM World) for the acquisition of 20 parcels of freehold land measuring approximately 57.2 acres located in Mukim of Tanjung Kupang, District of Johor Bahru, Johor Darul Ta’zim for a purchase consideration of RM46,146,000 to be satisfied via the issuance of 46,146,000 Mandatory Convertible Redeemable Preference Share ("MCRPS") at an issue price of RM1.00 per MCRPS ("UEMC Land Acquisition");

(ii) a conditional sale of shares agreement with UEMC for the acquisition of 2 ordinary shares of RM1.00 each in Finwares Sdn. Bhd. ("Finwares") representing the entire issued and paid-up share capital of Finwares, for a purchase consideration of RM79,796,162 to be satisfied via the issuance of 79,796,162 MCRPS at an issue price of RM1.00 per MCRPS. Finwares holds 73.36% shares in an undivided freehold land parcel measuring approximately 261.70 acres identified as HS (D) 297739, Lot PTD 2987 located at Mukim of Tanjung Kupang, District of Johor Bahru, Johor Darul Ta’zim ("PTD 2987 Parcel") ("Finwares Acquisition"); and

(iii) a conditional sale and purchase agreement with Hartanah Lintasan Kedua Sdn. Bhd. ("Hartanah"), a wholly owned subsidiary of UEM Group for the acquisition of Hartanah's 26.64% share of the PTD 2987 Parcel measuring approximately 95.01 acres for a total purchase consideration of RM28,971,840 to be satisfied via the issuance of 28,971,840 MCRPS at an issue price of RM1.00 per MCRPS. ("Hartanah Land Acquisition").

(collectively referred to as the "Acquisitions")

The UEMC Land Acquisition, Finwares Acquisition and Hartanah Land Acquisition are not conditional upon each other.

The Acquisitions are subject to approvals to be obtained from the following parties:

(i) the Securities Commission ("SC") for the issuance, listing of and quotation for the MCRPS and new ordinary shares in the Company arising from the conversion of the MCRPS on the Main Board of Bursa Securities Malaysia Berhad;

(ii) the SC (under the Guideline on the Acquisition of Interests, Mergers and Take-Overs by Local and Foreign Interests issued by the Foreign Investment Committee ("FIC")), for the following:

(a) Finwares Acquisition; (b) the issuance of the MCRPS; and (c) new ordinary shares in the Company arising from the conversion of the MCRPS.

(iii) the SC (under the Guideline on the Acquisition of Properties by Local and Foreign Interests issued by the FIC), for the following:

(a) UEMC Land Acquisition; and (b) Hartanah Land Acquisition.

(iv) UEM World's shareholders, for the Acquisition and the issuance and allotment of the MCRPS by the Company at an extraordinary general meeting to be convened;

(v) UEM Builders' shareholders, for the following:

(a) UEMC Land Acquisition; and (b) Finwares Acquisition.

(vi) UEM, for the Proposed Hartanah Land Acquisition; and

(vii) any other relevant parties, regulatory bodies and/or authorities.

As at balance sheet date, the Acquisitions were completed. The MCRPS was issued on 8 January 2009. UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

138 (35) Significant events (CONTD.)

(e) Proposed acquisition of land parcels in Cyberjaya Flagship Zone (Phase 2)

On 31 December 2008, the Company announced that its wholly-owned subsidiary, UEMLB has entered into a conditional Sale and Purchase Agreement ("SPA") with Cyberview Sdn. Bhd. ("Cyberview"), as proprietor, and Setia Haruman Sdn. Bhd. ("Setia Haruman"), as developer, for the proposed acquisition of approximately 98.037 acres of freehold land identified as Blocks 20, 21, 22, 23 and 24 situated in the Mukim of Dengkil, District of Sepang, Selangor Darul Ehsan ("Land Parcels") for a total consideration of RM102,491,801 or approximately RM24.00 per square foot.

The proposed acquisition is conditional upon the fulfillment of inter-alia, the following conditions precedent within a period of twelve months ("Approval Period") from the date of the SPA:

(i) the Foreign Investment Committee approval being obtained by UEMLB;

(ii) Setia Haruman obtaining the document of titles to the Land Parcels registered in the name of Cyberview; and

(iii) Setia Haruman obtaining the approval for the consent to transfer the Land Parcels from the relevant authorities in respect of the transfer of the Land Parcels from Cyberview to UEMLB.

The SPA shall become unconditional on the date on which the last of the conditions precedent to be fulfilled within the Approval Period and/or the extended period.

(f) Subscription and Joint Venture Agreement ("SJV Agreement") between UEMLB, Nusajaya Consolidated Sdn. Bhd. ("NCSB"), a wholly-owned subsidiary of UEMLB and United Malayan Land Bhd ("UML")

On 14 October 2008, UEMLB entered into a SJV Agreement with UML and NCSB for the subscription by UML of the new shares in NCSB ("Proposed JV").

On the same day, UEMLB, BND and NCSB entered into an agreement for the option to purchase two (2) pieces of land in Puteri Harbour, Nusajaya, Johor, with a total area measuring approximately 8.8 acres at the option price of RM67,154,274.

The Proposed JV is subject to approvals from the Foreign Investment Committee for the subscription of shares in NCSB by UML and any other approvals, if required.

(36) Segmental reporting

Segmental reporting is not applicable to the Group on the basis that the revenue of the Group is solely from property development and construction activities and the Group operates principally in Malaysia.

(37) Comparatives

There are no comparative figures in respect of the Company as this is the first set of financial statements prepared by the Company since the date of incorporation, 20 August 2008.

In accordance with the principles of merger accounting, the income statements, balance sheets, statements of changes in equity, cash flow statements and the related notes to the financial statements of the Group are presented as if the subsidiaries have been owned throughout the current and preceding financial periods. Accordingly, comparative figures of the Group have been presented. UEM LAND HOLDINGS BERHAD

(38) Subsidiaries 139

Country of Effective Name of subsidiaries Principal activities Incorporation interest 2008 2007 % % UEM Land Berhad Project procurement and management, Malaysia 100 100 (f.k.a. UEM Land Sdn. Bhd.) and strategic investment holding

Subsidiaries of UEM Land Berhad (f.k.a. UEM Land Sdn. Bhd.) Amra Resources Sdn. Bhd. Investment holding Malaysia 100 100

Cahaya Jauhar Sdn. Bhd. Undertake the turnkey design and build Malaysia 60 60 contract for the development of the Johor State New Administrative Centre

Finwares Sdn. Bhd. Investment holding Malaysia 100 –

Fleet Group Sdn. Bhd. Investment holding Malaysia 100 100

Grand Influx Sdn. Bhd. General trading Malaysia 100 100

Hatibudi Nominees (Tempatan) Sdn. Bhd. Investment holding Malaysia 100 100

Mahisa Sdn. Bhd. Property development and undertaking Malaysia 100 100 construction and turnkey development contracts

Mangrove Riviera Sdn. Bhd. Property development Malaysia 100 100

Marak Unggul Sdn. Bhd. Dormant Malaysia 50.01 50.01 * Marina Management Sdn. Bhd. Dormant Malaysia 100 100 (f.k.a Hing Yiap Fibremakers Sdn. Bhd.) * Nilaimas Sdn. Bhd. Dormant Malaysia 100 100 Nusajaya Consolidated Sdn. Bhd. Dormant Malaysia 100 99.9

Nusajaya Development Sdn. Bhd. Property development Malaysia 100 100

Nusajaya Hotels Sdn. Bhd. Dormant Malaysia 100 – * Nusajaya Medical Park Sdn. Bhd. Construct, manage and/or operate Malaysia 100 100 specialized buildings for long term lease

Nusajaya Resort Sdn. Bhd. Dormant Malaysia 100 99.9

++ Projek Usahasama Transit Ringan In liquidation Malaysia 100 100 Automatik Sdn. Bhd.

* Renong Credit & Leasing Sdn. Bhd. Ceased operations Malaysia 100 100 UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

140 (38) Subsidiaries (CONTD.)

Country of Effective Name of subsidiaries Principal activities Incorporation interest 2008 2007 % % ** Renong Debt Management Sdn. Bhd. Investment holding Malaysia 99.99 99.99 Renong Nusantara Sdn. Bhd. Investment holding Malaysia 100 100

Renong Overseas Corporation Sdn. Bhd. Provision of reimbursable support Malaysia 100 100 services to the Group

Renong Pacific Sdn. Bhd. Investment holding Malaysia 100 100

Renong Solutions (M) Sdn. Bhd. Ceased operations Malaysia 100 100

Renong Ventures Sdn. Bhd. Investment holding Malaysia 100 100 * Renong-India Sdn. Bhd. Dormant Malaysia 100 100 * Teck Hwa Knitting Industries Sdn. Bhd. Ceased operations Malaysia 100 100 UEML-ZRE Reit Managers Sdn. Bhd. Promoter and manager for diversified Malaysia 72 51 (f.k.a. UEML-ZRE-AMP Capital Management real estate investment trust Sdn. Bhd.)

Subsidiary of Amra Resources Sdn. Bhd. Bandar Nusajaya Development Sdn. Bhd. Investment holding, property Malaysia 100 100 development, land trading and an agent for its subsidiaries

Subsidiaries of Bandar Nusajaya Development Sdn. Bhd. Nusajaya Campus Sdn. Bhd. Dormant Malaysia 100 100

Nusajaya Energy Sdn. Bhd. Dormant Malaysia 100 100

Nusajaya Gardens Sdn. Bhd. Land trading and investment holding Malaysia 100 100

Nusajaya Greens Sdn. Bhd. Property development, land trading and Malaysia 100 100 investment holding

Nusajaya Group Sdn. Bhd. Investment holding Malaysia 100 100

Nusajaya Healthcare Sdn. Bhd. Dormant Malaysia 100 100

Nusajaya Heights Sdn. Bhd. Property development, land trading and Malaysia 100 100 investment holding

Nusajaya Hotels Sdn. Bhd. Dormant Malaysia – 100

Nusajaya Industrial Park Sdn. Bhd. Property development Malaysia 100 100 UEM LAND HOLDINGS BERHAD

(38) Subsidiaries (contd.) 141

Country of Effective Name of subsidiaries Principal activities Incorporation interest 2008 2007 % %

Subsidiaries of Bandar Nusajaya Development Sdn. Bhd. (contd.) Nusajaya Infra Sdn. Bhd. Investment holding Malaysia 99.9 99.9

Nusajaya Leisure Sdn. Bhd. Land trading and investment holding Malaysia 100 100

Nusajaya Management Services Sdn. Bhd. Dormant Malaysia 100 100

Nusajaya Rise Sdn. Bhd. Property development, land trading and Malaysia 100 100 investment holding

Nusajaya Riverside Sdn. Bhd. Investment holding Malaysia 99.9 99.9

Nusajaya Seaview Sdn. Bhd. Land trading and investment holding Malaysia 100 100

Nusajaya Warehousing Sdn. Bhd. Dormant Malaysia 100 100

Preferred Resources Sdn. Bhd. Dormant Malaysia 70 70

Subsidiary of Nusajaya Group Sdn. Bhd. Nusajaya Land Sdn. Bhd. Property development Malaysia 100 100

Subsidiaries of Nusajaya Infra Sdn. Bhd. Nusajaya Business Park Sdn. Bhd. Dormant Malaysia 99.9 99.9

Nusajaya Equity Sdn. Bhd. Dormant Malaysia 99.9 99.9

Subsidiary of Nusajaya Riverside Sdn. Bhd. Nusajaya High-Tech Park Sdn. Bhd. Dormant Malaysia 99.9 99.9

Subsidiaries of Fleet Group Cantuman Bahagia Sdn. Bhd. Investment holding Malaysia 100 100

Fibroceil Manufacturing (Malaysia) Sdn. Bhd. Investment holding Malaysia 100 100

Jaguh Mutiara Sdn. Bhd. Investment holding Malaysia 100 100

Subsidiary of Renong Nusantara Sdn. Bhd. P.T. Bias Permata Investment holding Indonesia 100 100 UEM LAND HOLDINGS BERHAD Notes to the FINANCIAL statements 31 December 2008

142 (38) Subsidiaries (contd.)

Country of Effective Name of subsidiaries Principal activities Incorporation interest 2008 2007 % %

Subsidiary of P.T. Bias Permata Agriculture, plantation, trading, mining Indonesia 100 100 P.T. Hardja Setia and construction

Subsidiary of Renong Overseas Corporation Sdn. Bhd. Renong Overseas Corporation (S.A.) Investment holding South Africa 100 100 * (Proprietary) Ltd

Subsidiaries of Renong Overseas Corporation (S.A.) (Proprietary) Ltd * R.O.C. Management Services Representation of holding company in South Africa 100 100 (Proprietary) Ltd South Africa * Roc-Union (Proprietary) Ltd Investment holding South Africa 80.4 80.4

Subsidiary of Roc-Union (Proprietary) Ltd * Rocpoint (Proprietary) Ltd Acquisition and development of land South Africa 80.4 80.4

Subsidiary of Renong Ventures Sdn. Bhd. * Merak Indera Sdn. Bhd. Dormant Malaysia 100 100

Note: * Subsidiaries not audited by Ernst & Young ** One special ordinary share is held by UEM ++ Under liquidation

UEM LAND HOLDINGS BERHAD

(39) Associates 143

Country of Effective Name of Associate Principal activities Incorporation interest 2008 2007 % %

Equinox Film Production & Distributors Sdn. Bhd. Dormant Malaysia 25 25

OptixLab Sdn. Bhd. Ceased operations Malaysia 50 50

Probalance Sdn. Bhd. Under members’ liquidation Malaysia 47.2 47.2

Setia Haruman Sdn. Bhd. Property development and sale of land Malaysia 25 25

Touch ’N Go Sdn. Bhd. Operation of a central clearing house Malaysia 20 20 for contactless smartcard and related services

Associate of Hatibudi Nominees (Tempatan) Sdn. Bhd. BIB Insurance Brokers Sdn. Bhd. Insurance brokers, insurance Malaysia 30 30 consultants, commission agents and investment holding

(40) JOINT VENTURES

Country of Effective Name of Joint ventures Principal activities Incorporation interest 2008 2007 % %

Haute Property Sdn. Bhd. Property development Malaysia 40 40

Horizon Hills Development Sdn. Bhd. Property development Malaysia 50 50

Subsidiaries of Horizon Hills Development Sdn. Bhd. Horizon Hills Property Services Sdn. Bhd. Management and maintenance services Malaysia 100 –

Horizon Hills Resort Bhd. Proprietor of a club and management of Malaysia 100 100 a golf course UEM LAND HOLDINGS BERHAD Analysis of Shareholdings As At 31 March 2009

144 Authorised Capital RM2,502,000,000.00 comprising 5,000,000,000 ordinary shares of RM0.50 each and 200,000,000 mandatory convertible redeemable preference shares of RM0.01 each ("MCRPS")

Issued and Fully Paid RM1,215,637,595.52 comprising 2,428,176,911 ordinary shares of RM0.50 each and 154,914,002 MCRPS of RM0.01 each

Class of Shares Ordinary shares of RM0.50 each MCRPS of RM0.01 each

No. of Shareholders 34,598 ordinary shareholders 2 MCRPS holders

Voting Right 1 vote per ordinary share No voting right for MCRPS

Ordinary Shares

No. of % of No. of % of Size of Holdings Shareholders Shareholders Shares Held Issued Capital

Less than 100 2,482 7.17 100,941 0.00 100 to 1,000 13,760 39.77 6,585,637 0.27 1,001 to 10,000 14,903 43.08 51,337,062 2.12 10,001 to 100,000 3,102 8.97 88,388,547 3.64 100,001 to less than 5% of issued shares 350 1.01 408,711,012 16.83 5% and above of issued shares 1 0.00 1,873,053,712 77.14

Total 34,598 100.00 2,428,176,911 100.00 UEM LAND HOLDINGS BERHAD

30 LARGEST ORDINARY SHAREHOLDERS as per the Register of Depositors 145 As at 31 March 2009

No. of % of Issued Name of shareholder Shares Held Capital

1 UEM Group Berhad 1,873,053,712 77.14

2 HSBC Nominees (Asing) Sdn Bhd 121,071,075 4.99 Exempt An For Morgan Stanley & Co.Incoprorated

3 Employees Provident Fund Board 98,814,463 4.07

4 Citigroup Nominees (Asing) Sdn Bhd 12,679,693 0.52 Exempt An For Mellon Bank (Mellon)

5 Alliancegroup Nominees (Tempatan) Sdn Bhd 8,549,250 0.35 Pheim Asset Management Sdn Bhd For Employees Provident Fund

6 HDM Nominees (Tempatan) Sdn Bhd 7,000,000 0.29 UOB Kay Hian Pte Ltd For Gooi Seong Gum (margin)

7 Citigroup Nominees (Asing) Sdn Bhd 6,620,253 0.27 Exempt An For Merrill Lynch Pierce Fenner & Smith Incorporated (Foreign)

8 HSBC Nominees (Asing) Sdn Bhd 6,000,000 0.25 Exempt An For JP Morgan Chase Bank, National Association (Norges Bank)

9 Cartaban Nominees (Asing) Sdn Bhd 5,780,250 0.24 State Street Luxembourg Fund 9T02 For Emerging Markets High Value Teilfonds

10 Citigroup Nominees (Asing) Sdn Bhd 4,815,375 0.20 CBNY For DFA Emerging Markets Fund

11 UOBM Nominees (Asing) Sdn Bhd 4,212,500 0.17 UOB-IOD For United Overseas Bank Limited (ACU)

12 CIMB Group Nominees (Tempatan) Sdn Bhd 3,955,000 0.16 CIMB Trustee Berhad For Pacific Dana Aman (371 7 TRO1)

13 Pacific & Orient Insurance Co Berhad 3,410,812 0.14

14 Kenanga Nominees (Tempatan) Sdn Bhd 3,187,500 0.13 Public Bank Group Officers' Retirement Benefits Fund

15 Yee Hoong Hing 2,550,241 0.11

16 Citigroup Nominees (Asing) Sdn Bhd 2,527,983 0.10 Exempt An For OCBC Securities Private Limited (Client A/C-NR)

17 RHB Capital Nominees (Temptan) Sdn Bhd 2,434,000 0.10 Pledged Securities Account For Noor Azman @ Noor Hizam b Mohd Nurdin (CEB)

18 Citigroup Nominees (Tempatan) Sdn Bhd 2,429,000 0.10 Exempt An For Prudential Fund Management Berhad UEM LAND HOLDINGS BERHAD Analysis of Shareholdings As at 31 March 2009

146 30 LARGEST ORDINARY SHAREHOLDERS as per the Register of Depositors (CONTD.) As at 31 March 2009

No. of % of Issued Name of Shareholder Shares Held Capital

19 Malaysia Nominees (Asing) Sendirian Berhad 2,237,500 0.09 British And Malayan Trustees Limited For Lionglobal Singapore/Malaysia Fund (BMT A/C 9001Z)

20 Soo Yow Lee 2,000,000 0.08

21 Amanah Raya Nominees (Tempatan) Sdn Bhd 1,875,000 0.08 Public Savings Fund

22 Low Yew Hock 1,875,000 0.08

23 Kumpulan Wang Simpanan Pekerja 1,865,000 0.08

24 HSBC Nominees (Asing) Sdn Bhd 1,821,500 0.08 BNY Brussels For Greatlink Asean Growth Fund

25 AIBB Nominees (Tempatan) Sdn Bhd 1,812,500 0.07 Pledged Securities Account For Tan Han Chong

26 CIMB Group Nominees (Tempatan) Sdn Bhd 1,780,000 0.07 BHLB Trustee Berhad For Prugrowth Fund (50138 TR01)

27 Citigroup Nominees (Asing) Sdn Bhd 1,706,250 0.07 CB Spore GW For Lionglobal Malaysia Fund

28 Lee Kay Huat 1,700,000 0.07

29 HSBC Nominees (Asing) Sdn Bhd 1,680,000 0.07 DZ Bank INTL For Uni Em Fernost Treuhandkonto, Luxembourg

30 Amanah Raya Nominees (Tempatan) Sdn Bhd 1,625,000 0.07 Public Dividend Select Fund

Total 2,191,068,857 90.24

MANDATORY CONVERTIBLE REDEEMABLE PREFERENCE SHAREHOLDERS As at 31 March 2009

No. of Name of MCRPS holder MCRPS Held %

1 UEM Group Berhad 125,942,162 81.30

2 Hartanah Lintasan Kedua Sdn Bhd 28,971,840 18.70

Total 154,914,002 100.00 UEM LAND HOLDINGS BERHAD

SUBSTANTIAL SHAREHOLDERS 147 as per the Register of Substantial Shareholders, excluding bare trustees as at 31 March 2009

No. of ordinary Shares Held

Name Direct % Indirect %

UEM Group Berhad 1,873,053,712 77.14 - -

Khazanah Nasional Berhad 1,873,053,712a 77.14

Notes a Deemed interested by virtue of being the holding company of UEM Group Berhad

STATEMENT OF DIRECTORS' INTERESTS IN THE COMPANY AND ITS RELATED CORPORATIONS As at 31 March 2009

The Company – UEM Land Holdings Berhad

No.of Ordinary Shares of RM0.50 each

Name Direct % Indirect %

Tan Sri Dr Ahmad Tajuddin Ali – – – – Dato' Ahmad Pardas Senin 2,500,000 0.10 – – Wan Abdullah Wan Ibrahim 375,000 0.01 – – Abdul Kadir Md Kassim – – – – Md Ali Md Dewal – – – – Oh Kim Sun – – – – Dato' Ikmal Hijaz Hashim – – – – Omar Siddiq Amin Noer Rashid – – – – UEM LAND HOLDINGS BERHAD Analysis of Shareholdings As at 31 March 2009

148 STATEMENT OF DIRECTORS' INTERESTS IN THE COMPANY AND ITS RELATED CORPORATIONS (CONTD.) As at 31 March 2009

Subsidiary of holding company – PLUS Expressways Berhad

No.of Ordinary Shares of RM0.25 each

Name Direct % Indirect %

Tan Sri Dr Ahmad Tajuddin Ali – – – – Dato' Ahmad Pardas Senin 20,000 * – – Wan Abdullah Wan Ibrahim – – – – Abdul Kadir Md Kassim 40,000 * – – Md Ali Md Dewal – – – – Oh Kim Sun – – – – Dato' Ikmal Hijaz Hashim – – – – Omar Siddiq Amin Noer Rashid – – – –

* Less than 0.01%

Subsidiary of holding company – Pharmaniaga Berhad

No.of Ordinary Shares of RM1.00 each

Name Direct % Indirect %

Tan Sri Dr Ahmad Tajuddin Ali – – – – Dato' Ahmad Pardas Senin – – – – Wan Abdullah Wan Ibrahim – – – – Abdul Kadir Md Kassim – – – – Md Ali Md Dewal – – – – Oh Kim Sun – – 177,000 0.17 Dato' Ikmal Hijaz Hashim – – – – Omar Siddiq Amin Noer Rashid – – – – UEM LAND HOLDINGS BERHAD Properties of UEM LAND HOLDINGS GROUP

149

Brief Tenure Net book Location and description and Age of value as at Date of address and Area year of BUILDING 31/12/2008 revaluation/ of property existing use (sq meters) expiry (YEARS) RM’000 acquisition

Nusajaya Land held 34,310,104 Freehold – 1,924,654 1995 Iskandar Development Region for property Johor Darul Ta’zim development and development-in- progress

PTD 2987 Agriculture land 1,443,424 Freehold – 108,768 17.11.2008 Taman Industri Perintis Mukim Tanjung Kupang Nusajaya Johor Darul Ta’zim

PTD 2994, 2995, 2999, Industrial and 231,446 Freehold – 46,146 17.11.2008 3001-4, 3006-15, 3050, 3053 agriculture land Taman Industri Perintis Mukim Tanjung Kupang Nusajaya Johor Darul Ta’zim

Lot no. 247 Agriculture land 8,182 Freehold – 300 01.09.2004 Mukim of Pulai, Johor Title no : GM 237

Part of PTD 72263 Single storey 12,224 Freehold 2 4,667 31.12.2005 Mukim Pulai, Johor office building UEM LAND HOLDINGS BERHAD REcurrent related party transactions

150 On 13 October 2008, UEM Land Holdings Berhad (“UEM Land Holdings” or the “Company”) obtained the approval of its shareholders for the mandates for UEM Land Holdings and its subsidiaries to enter into recurrent related party transactions (“Recurrent Transactions”) in the ordinary course of business, with certain related parties.

The following is the disclosure of the aggregate value of transactions conducted based on the nature of the Recurrent Transactions made, name of related parties involved in each type of transaction made and their relation with UEM Land Holdings and its subsidiaries during the financial period ended 31 December 2008:-

Interested major Company in shareholders, UEM Land directors and Holdings Related persons connected Nature of Nature of Item Group Party with them relationship transaction RM’000

1 UEM Land Berhad UEM Group Khazanah Nasional Berhad UEM Land Berhad (“UEM Provision of 426 and its subsidiaries Management (“Khazanah”), UEM Group Land”) is a wholly-owned corporate, training (“UEM Land Group”) Sdn Bhd Berhad (“UEMG”), subsidiary of the Company and administrative (“UEMGM”) Tan Sri Dr Ahmad Tajuddin Ali, which in turn is a 77.1% support services Dato’ Ahmad Pardas Senin, subsidiary of UEMG Abdul Kadir Md Kassim UEMGM is a wholly-owned subsidiary of UEMG

2 UEM Land Group UEM Builders Berhad Khazanah, UEMG, UEM Land is a wholly-owned Provision of 14,405 and its subsidiaries Tan Sri Dr Ahmad Tajuddin Ali, subsidiary of the Company construction and (“UEM Builders”) Dato’ Ahmad Pardas Senin, which in turn is a 77.1% engineering services Abdul Kadir Md Kassim subsidiary of UEMG

UEM Builders is a wholly-owned subsidiary of UEMG

3 UEM Land Group Opus Group Berhad Khazanah, UEMG, UEM Land is a wholly-owned Provision of project 1,837 (“Opus”) Tan Sri Dr Ahmad Tajuddin Ali, subsidiary of the Company management and Dato’ Ahmad Pardas Senin, which in turn is a 77.1% engineering Abdul Kadir Md Kassim subsidiary of UEMG consulting services

Opus is a 95.1% subsidiary of UEMG

4 UEM Land Group Cermin Cahaya Khazanah, UEMG, UEM Land is a wholly-owned Provision of 4 Sdn Bhd Tan Sri Dr Ahmad Tajuddin Ali, subsidiary of the Company maintenance and (“Cermin Cahaya”) Dato’ Ahmad Pardas Senin, which in turn is a 77.1% cleaning services Abdul Kadir Md Kassim, subsidiary of UEMG at Faber Towers Oh Kim Sun Cermin Cahaya is a wholly- owned subsidiary of Faber Medi-Serve Sdn Bhd which in turn is a wholly-owned subsidiary of Faber Group Berhad, a 34.3% associate of UEMG

5 UEM Land Group TIME dotCom Berhad Khazanah, UEMG, UEM Land is a wholly-owned Provision of internet 56 and its subsidiaries Tan Sri Dr Ahmad Tajuddin Ali, subsidiary of the Company lease services (“TdC Group”) Dato’ Ahmad Pardas Senin, which in turn is a 77.1% Abdul Kadir Md Kassim subsidiary of UEMG

TdC Group is a 28.7% associate of TIME Engineering Berhad, which is a 45.0% associate of UEMG UEM LAND HOLDINGS BERHAD

Interested major 151 Company in shareholders, UEM Land directors and Holdings Related persons connected Nature of Nature of Item Group Party with them relationship transaction RM’000

6 UEM Land Group Forte Tech Solution Khazanah, UEMG, UEM Land is a wholly-owned Provision of Network 168 Sdn Bhd Tan Sri Dr Ahmad Tajuddin Ali, subsidiary of the Company Extended UEM (“Forte Tech”) Dato’ Ahmad Pardas Senin, which in turn is a 77.1% Environment Abdul Kadir Md Kassim subsidiary of UEMG (“NEURON”) services and Forte Tech is a 96.0% other ICT subsidiary of UEMG by virtue shared services of its 70.0% direct interest and 30.0% indirect interest held through Pharmaniaga Berhad which in turn is a 86.8% subsidiary of UEMG

7 UEM Land Group Kadir Andri & Partners UEMG, Abdul Kadir Md Kassim Abdul Kadir Md Kassim is the Provision of legal 55 (“KAAP”) Managing Partner of KAAP. advisory services He is also a Director of the Company and UEMG

8 UEM Land Group Teras Teknologi Sdn Khazanah, UEMG, UEM Land is a wholly-owned Provision of ICT 11 Bhd (“Teras”) Tan Sri Dr Ahmad Tajuddin Ali, subsidiary of the Company services, security Dato’ Ahmad Pardas Senin, which in turn is a 77.1% and access system Abdul Kadir Md Kassim subsidiary of UEM in Ledang Heights

Teras is a wholly-owned subsidiary of UEMG

9 Cahaya Jauhar Sdn UEMGM Khazanah, UEMG, CJSB is a 60% subsidiary of Provision of 24 Bhd (“CJSB”) Tan Sri Dr Ahmad Tajuddin Ali, UEM Land which in turn is a corporate, training Dato’ Ahmad Pardas Senin, wholly-owned subsidiary of and administrative Abdul Kadir Md Kassim the Company which in turn is support services a 77.1% subsidiary of UEMG

UEMGM is a wholly-owned subsidiary of UEMG

10 CJSB UEM Builders Khazanah, UEMG, CJSB is a 60% subsidiary of Provision of 23,619 Tan Sri Dr Ahmad Tajuddin Ali, UEM Land which in turn is a construction and Dato’ Ahmad Pardas Senin, wholly-owned subsidiary of engineering services Abdul Kadir Md Kassim the Company which in turn is a 77.1% subsidiary of UEMG

UEM Builders is a wholly-owned subsidiary of UEMG

Total 40,605 UEM LAND HOLDINGS BERHAD Notice of first ANNUAL GENERAL MEETING

152 NOTICE IS HEREBY GIVEN THAT the First Annual General Meeting of the Company will be held at Grand Ballroom, 1st Floor, Sime Darby Convention Centre, 1A Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Wednesday, 10 June 2009 at 10.30 a.m. for the purpose of transacting the following businesses:

AGENDA 1 To receive the Audited Financial Statements for the year ended 31 December 2008 together with the Reports of the Directors and Auditors thereon.

As Ordinary Business 2 To re-elect the following Directors retiring in accordance with Article 92 of the Company’s Articles of Association and who being eligible, have offered themselves for re-election: i) Tan Sri Dr Ahmad Tajuddin Ali Resolution 1 ii) Wan Abdullah Wan Ibrahim Resolution 2 iii) Abdul Kadir Md Kassim Resolution 3 iv) Md Ali Md Dewal Resolution 4 v) Oh Kim Sun Resolution 5 vi) Dato’ Ikmal Hijaz Hashim Resolution 6 vii) Omar Siddiq Amin Noer Rashid Resolution 7

3 To approve the payment of Directors’ remuneration in respect of the financial year ended 31 December 2008. Resolution 8

4 To re-appoint Messrs Ernst & Young as Auditors and to authorise the Directors to fix their remuneration. Resolution 9

As Special Business To consider and, if thought fit, to pass the following as ordinary resolutions:

5 PROPOSED AUTHORITY TO ALLOT AND ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965 “THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to allot and issue shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued capital of the Company as at the date of this Annual General Meeting and that the Directors be and are also empowered to obtain the approval for the listing and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad and that such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.” Resolution 10

6 PROPOSED MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE “THAT pursuant to paragraph 10.09 of the Listing Requirements of Bursa Malaysia Securities Berhad, approval be and is hereby given for the Shareholders’ Mandate for the Company and/or its subsidiaries (“UEM Land Holdings Group”) to enter into recurrent related party transactions of a revenue or trading nature, which are necessary for the day-to-day operations of UEM Land Holdings Group to be entered into by UEM Land Holdings Group provided such transactions are in the ordinary course of business and are on terms not more favorable to the related party than those generally available to the public, particulars of which are set out in Section 2.2 of the Circular to Shareholders of the Company dated 8 May 2009 AND THAT such approval conferred by the mandate shall continue to be in force until: a) the conclusion of the next Annual General Meeting (“AGM”) of the Company following this AGM at which such mandate is passed, at which time it will lapse, unless by a resolution passed at such general meeting whereby the authority is renewed; b) the expiration of the period within which the next AGM of the Company after that date is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (“Act’) (but shall not extend to such extensions as may be allowed pursuant to Section 143(2) of the Act); or UEM LAND HOLDINGS BERHAD

c) revoked or varied by resolution passed by the shareholders in a general meeting, 153

whichever is the earlier,

AND FURTHER THAT the Directors of the Company and/or any of them be and are/is (as the case may be) hereby authorised to complete and do all such acts and things (including executing such documents under the common seal in accordance with the provisions of the Articles of Association of the Company, as may be required) as they may consider expedient or necessary to give effect to the Proposed Mandate.” Resolution 11

7 To transact any other business for which due notice shall have been given.

By Order of the Board

TAN HWEE THIAN (MIA 1904) MOHD NOR AZAM MOHD SALLEH (MAICSA 7028137) Company Secretaries

Kuala Lumpur 8 May 2009

NOTE 1

1 Every member is entitled to appoint a proxy or in the case of a corporation, to appoint a representative to attend and vote in his place. A proxy may but need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 need not be complied with.

2 To be valid, the original form of proxy duly completed must be deposited at the Share Registrar’s office, Symphony Share Registrars Sdn Bhd, Level 26, Menara Multi-Purpose, Capital Square, No. 8, Jalan Munshi Abdullah, 50100 Kuala Lumpur not less than 48 hours before the time of holding the Meeting.

3 The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if such appointor is a corporation, under its common seal or under the hand of its attorney.

4 If the Form of Proxy is returned without any indication as to how the proxy shall vote, the proxy will vote or abstain as he thinks fit.

5 If no name is inserted in the space provided for the name of your proxy, the Chairman of the Meeting will act as your proxy.

6 A member holding one thousand (1,000) ordinary shares or less may appoint only one (1) proxy to attend and vote at a general meeting who shall represent all the shares held by such member. A member holding more than one thousand (1,000) ordinary shares may appoint up to ten (10) proxies to attend and vote at the same meeting and each proxy appointed, shall represent a minimum of one thousand (1,000) ordinary shares. Where a member appoints one (1) or more proxies to attend and vote at the same meeting, such appointments shall be invalid unless the member specifies the proportion of his shareholding to be represented by each proxy.

NOTE 2

Resolution pursuant to Section 132D of the Companies Act, 1965 The proposed Resolution 10, if passed, would enable the Directors to issue up to a maximum of 10% of the issued share capital of the Company as at the date of this Annual General Meeting for such purposes as the Directors consider would be in the best interest of the Company. This authority, unless revoked or varied by the Company at a General Meeting, will expire at the next Annual General Meeting.

NOTE 3

Resolution on the Proposed Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature For Resolution 11, further information on the Recurrent Related Party Transactions is set out in the Circular to Shareholders of the Company dated 8 May 2009 which is despatched together with the Company’s Annual Report 2008. UEM LAND HOLDINGS BERHAD Statement Accompanying Notice of The First Annual General Meeting

154 DIRECTORS WHO ARE SEEKING RE-ELECTION AT THE FIRST ANNUAL GENERAL MEETING OF THE COMPANY

The details of all the Directors seeking re-election are set out in their respective profiles which appear in the Profile of Directors on pages 41 to 43 of this Annual Report. The details of their interest in the securities of the Company are set out in the Analysis of Shareholdings on pages 144 to 148 of this Annual Report. PROXY FORM

I/We, of being a member of UEM LAND HOLDINGS BERHAD (“the Company”), hereby appoint of or failing him/her the Chairman of the meeting as my/our proxy to vote for me/us and on my/our behalf at the First Annual General Meeting of the Company to be held at Grand Ballroom, 1st Floor, Sime Darby Convention Centre, 1A Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Wednesday, 10 June 2009 at 10.30 a.m. and at any adjournment thereof.

(Please indicate with an “” or “x” in the boxes provided how you wish your vote to be cast. If you do not do so, the proxy will vote or abstain from voting at his discretion.)

Resolution For Against

To re-elect the following Directors retiring in accordance with Article 92 of the Company’s Articles of Association: i) Tan Sri Dr Ahmad Tajuddin Ali 1 ii) Wan Abdullah Wan Ibrahim 2 iii) Abdul Kadir Md Kassim 3 iv) Md Ali Md Dewal 4 v) Oh Kim Sun 5 vi) Dato’ Ikmal Hijaz Hashim 6 vii) Omar Siddiq Amin Noer Rashid 7 To approve the payment of Directors’ remuneration in respect of the financial year 8 ended 31 December 2008. To re-appoint Messrs Ernst & Young as Auditors and to authorise the Directors 9 to fix their remuneration. To authorise Directors to allot and issue shares pursuant to Section 132D 10 of the Companies Act, 1965. To approve the Proposed Mandate for Recurrent Related Party Transactions 11 of a Revenue or Trading Nature.

No. of shares

CDS Account SIGNATURE Number (If shareholder is a corporation, this part should be executed under seal)

DATED THIS DAY OF 2009 Telephone No. NOTE 1 Every member is entitled to appoint a proxy or in the case of a corporation, to appoint a representative to attend and vote in his place. A proxy may but need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 need not be complied with.

4 If the Form of Proxy is returned without any indication as to how the proxy shall vote, the proxy will vote or abstain as he thinks fit.

5 If no name is inserted in the space provided for the name of your proxy, the Chairman of the Meeting will act as your proxy.

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The share registrar’s Office Symphony Share Registrars Sdn Bhd Level 26, Menara Multi-Purpose Capital Square No. 8 Jalan Munshi Abdullah 50100 Kuala Lumpur

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