ANNUAL REPORT 2009 Above and beyond At UMLand, we are focused on creating the perfect setting for living. Through our core business of building integrated townships and niche developments, we will continue to deliver long-term value to our customers and shareholders. By growing hand-in-hand with the community and enriching lives, we strive to excel above and beyond. 2 UNITED MALAYAN LAND BHD (4131-M) Corporate Profi le 4 Corporate Information 7 Chairman’s Message 10 Five-Year Group Financial Highlights 14 Financial Calendar 16 Group Corporate Structure 17 Board of Directors 18 Profi le of Directors 20 Management Team 30 Operations Review 36 Corporate Responsibility 44 Corporate Calendar 46 Corporate Governance Statement 53 Statement on Internal Control 61 Audit Committee Report 64 Additional Compliance Information 67 Financial Statements 75 List of Properties 142 Analysis of Shareholdings 145 Notice of 49th Annual General Meeting 148 Statement Accompanying Notice of 49th Annual General Meeting 152 Form of Proxy contents UNITED MALAYAN LAND BHD (4131-M) 3 Vision To be a property developer of distinction, creating quality lifestyles and communities Mission To develop a brand that represents quality and innovation which creates value and is the preferred choice Shared Values Integrity Customer driven Profi table Excellence Rewarding Team that works Progressive 4 UNITED MALAYAN LAND BHD (4131-M) Corporate Profi le UNITED MALAYAN LAND BHD (4131-M) 5 United Malayan Land Bhd. (UMLand) was incorporated in 1961 and listed on the Main Board of Bursa Malaysia Securities Berhad in 1969. The Group is principally involved in property development. Guided by a dynamic Board of Directors under the leadership of YABhg Tun Musa Hitam, UMLand’s Board of Director comprises nine members and an alternate, four of whom are independent. With a proven track record as a property developer of distinction in both mixed-development townships and high-end niche developments, the Group’s growth strategy is to build on its solid foundation by enhancing the value of its Township Division and expanding its Niche Division. The Group’s Township Division has three township developments with a total land area of more than 5,000 acres, located in Iskandar Malaysia, Johor (Bandar Seri Alam and Taman Seri Austin) and Selangor (Bandar Seri Putra), all of which are high growth development areas. In the Niche Division, the Group has completed and delivered 846 units of condominium and serviced residences, in the Golden Triangle in downtown Kuala Lumpur (Seri Bukit Ceylon) and at Kuala Lumpur Sentral (Suasana Sentral Loft), and is currently developing Suasana Bangsar, a 190-unit condominium located in the upmarket suburb of Bangsar. Besides Suasana Bangsar, the Group has several new projects in hand, located within the vicinity of KLCC, Kuala Lumpur Golden Triangle and Iskandar Malaysia. As at December 31, 2009, UMLand’s paid up share capital is RM241,705,233, comprising 241,705,233 ordinary shares of RM1.00 each. The Group’s shareholders’ fund is RM857.85 million and its net assets per ordinary share is RM3.56. 6 UNITED MALAYAN LAND BHD (4131-M) UNITED MALAYAN LAND BHD (4131-M) 7 Corporate Information BOARD OF DIRECTORS REMUNERATION COMMITTEE COMPANY SECRETARY Tun Musa Hitam Datuk Syed Ahmad Khalid Zuraidah Mohd Yusoff Chairman bin Syed Mohammed (Chairman) (MAICSA 7001552) Independent Non-Executive Director Datuk Nur Jazlan bin Tan Sri Mohamed Syed Azmin bin Mohd Nursin REGISTERED OFFICE Dato’ Ng Eng Tee @ Syed Nor Deputy Chairman / Executive Director Suite 1.1, 1st Floor Non-Independent Executive Director Kompleks Antarabangsa NOMINATION COMMITTEE Jalan Sultan Ismail Chan Say Yeong Datuk Syed Ahmad Khalid 50250 Kuala Lumpur Non-Independent Non-Executive Director bin Syed Mohammed (Chairman) Tel No : 603-2142 1611 Datuk Nur Jazlan bin Tan Sri Mohamed Fax No : 603-2142 1826 (Corporate) Datuk Syed Ahmad Khalid Syed Azmin bin Mohd Nursin 603-2141 4867 (Secretarial) bin Syed Mohammed @ Syed Nor Independent Non-Executive Director AUDITORS Datuk Nur Jazlan bin Tan Sri Mohamed RISK COMMITTEE PricewaterhouseCoopers Independent Non-Executive Director Syed Azmin bin Mohd Nursin Chartered Accountants @ Syed Nor (Chairman) Level 10, 1 Sentral, Jalan Travers Hazel Chew Siew Cheng Dato’ Ng Eng Tee Kuala Lumpur Sentral Non-Independent Non-Executive Director Pakhruddin bin Sulaiman P O Box 10192 50706 Kuala Lumpur Syed Azmin bin Mohd Nursin OPTION COMMITTEE @ Syed Nor PRINCIPAL BANKERS Non-Independent Non-Executive Director Syed Azmin bin Mohd Nursin @ Syed Nor OCBC Bank (Malaysia) Berhad Ng Eng Soon Dato’ Ng Eng Tee Alliance Bank Malaysia Berhad Non-Independent Non-Executive Director Pee Tong Lim Malayan Banking Berhad CIMB Bank Berhad Pakhruddin bin Sulaiman Kuwait Finance House (Malaysia) Berhad SENIOR MANAGEMENT Independent Non-Executive Director AmBank Berhad Dato’ Ng Eng Tee Deputy Chairman / Executive Director Lim Wie Shan SHARE REGISTRAR (alternate to Chan Say Yeong and Hazel Chew Siew Cheng) Pee Tong Lim Securities Services (Holdings) Sdn. Bhd. Non-Independent Non-Executive Director Group Chief Executive Offi cer Level 7, Menara Milenium Jalan Damanlela Zulkifl y Garib Pusat Bandar Damansara AUDIT COMMITTEE Director, Operations Damansara Heights Datuk Syed Ahmad Khalid 50490 Kuala Lumpur bin Syed Mohammed (Chairman) Tel No : 603-2084 9000 TOWNSHIP MANAGEMENT Datuk Nur Jazlan bin Tan Sri Mohamed Fax No : 603-2094 9940 Chan Say Yeong Ng Tay Guan Pakhruddin bin Sulaiman General Manager, Bangi Heights Development Sdn. Bhd. STOCK EXCHANGE LISTING Main Market EXECUTIVE COMMITTEE Mohd Noor Abdul Salam Bursa Malaysia Securities Berhad Tun Musa Hitam (Chairman) General Manager, Stock Name : UMLAND Dato’ Ng Eng Tee Seri Alam Properties Sdn. Bhd. Stock Code : 4561 Syed Azmin bin Mohd Nursin Wong Kuen Kong @ Syed Nor WEBSITE ADDRESS Chan Say Yeong General Manager, Dynasty View Sdn. Bhd. www.umland.com.my TENDER BOARD COMMITTEE Dato’ Ng Eng Tee (Chairman) Syed Azmin bin Mohd Nursin @ Syed Nor Chan Say Yeong 8 UNITED MALAYAN LAND BHD (4131-M) trust Trust is a pride we have earned from our customers as we continuously deliver our projects on time and with superior quality. Trust of our investors and stakeholders comes from the stringent adherence to corporate governance and rules of transparency which we consistently practise with the highest ethical standards as a responsible corporate citizen. UNITED MALAYAN LAND BHD (4131-M) 9 10 UNITED MALAYAN LAND BHD (4131-M) UNITED MALAYAN LAND BHD (4131-M) 11 Chairman’s Message The Group posted a robust net profi t of RM55.0 million on the back of revenue that rose 21% to RM208.5 million contributed by both its Township and Niche Divisions, including several strategic land sales. PREAMBLE It was not until the second-half of 2009 It is with pleasure that I present to you the that sales of residential properties began annual report of the Group for the fi nancial to recover as demand in the property year ended 31 December 2009 (FY09). market picked up from a boost in consumer confi dence largely due to a low interest rate The year under review continued to be regime and government measures to support challenging as the global fi nancial crisis in the economy. late 2008 continued into 2009. 2009: SAILING THROUGH STORMY While the Malaysian economy did not enter WATERS into a recession until late 2008, the impact of The fi rst quarter of 2009 was almost certainly the slowdown was felt for the better part of the worst part of a challenging year for all the fi rst-half of 2009. concerned with Malaysia’s export-driven economy feeling the impact of a spiraling For property developers, this meant a drop in global demand. marked drop in demand for housing and this was refl ected in lower sales for the Group, This had a knock-on effect on the rest of the particularly in the fi rst half of the year. economy as consumer spending fell due to the general slump in confi dence. 12 UNITED MALAYAN LAND BHD (4131-M) Chairman’s Message As a result of the economic recession, the Group scaled back on TRANSFORMATION property launches for the year. The economic recession and the slowdown in property launches was an opportunity for the Group to revise the master plans of the However, the economy began the slow but steady climb towards townships it is currently developing, to further improve effi ciency in recovery beginning in the second-half of the year and this was land usage and enhance the value of its landbanks. refl ected in the forward economic indicators such as factory output and subsequently by exports, which saw demand pick up again initially In 2009, certain strategic land sales in Bandar Seri Alam were identifi ed due to stocking activities and then by a more steady real demand. and sold to several institutions of higher learning in Bandar Seri Alam. These include Mara Junior Science College, Universiti Kuala Lumpur, The low interest rate regime maintained by Bank Negara, which Universiti Teknologi Mara, Masterskill University College of Health kept its benchmark policy rate – the overnight policy rate (OPR) – at Sciences and an Arts College. 2% following rate cuts in January and February last year helped in supporting consumer demand, especially for big ticket items such as The Iskandar Malaysia Eastern District police headquarters was also housing and passenger cars. set up in Bandar Seri Alam, which will boost security in the township. Currently, the police headquarters is located in a rented building but Additionally, the RM67 billion worth of stimulus measures announced will eventually relocate to a new building, which is currently under by the government in November 2008 and March 2009, helped in construction. supporting the economic recovery, which expanded in the fourth quarter of 2009 after three consecutive quarters of contraction. The educational institutions are expected to commence operations in late 2011 and early 2012, and this together with the added security FINANCIAL PERFORMANCE of having a district police headquarters is expected to have a positive impact on the township’s continued development.