UNITED INDUSTRIAL CORPORATION LIMITED · 2014. 12. 15. · Singapore reported an increase of $19.3...

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ANNUALREPORT

2010Incorporated in the Republic of Singapore(Company Registration No. 196300181E)5 Shenton Way #02-16 UIC Building Singapore 068808Tel: 6220 1352 Fax: 6224 0278Website: www.uic.com.sg

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CONTENTS

01Group Financial Highlights

100Five Year Summary

19Corporate Data

05Board of Directors 104

Principal Subsidiaries & Associated Companies

29Property Activities Summary

02Chairman’s Statement

102Statistics of Shareholdings

20Management Review

09Corporate Governance Report

105Notice of Annual General Meeting

Proxy Form

28Human Resource

31Financial Report

22Property Portfolio

27Trading & Services


ANNUAL REPORT 2010 UNITED INDUSTRIAL CORPORATION LIMITED 1

GROUP FINANCIAL HIGHLIGHTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

($’million) 2006 2007 2008 2009 2010

Revenue 325 528 892 1,011 972Net profit from operations 76 124 187 241 237Net fair value gain/(loss) on investment properties 416 1,051 (262) (384) 466Attributable profit/(loss) 492 1,175 (75) (143) 703Total assets 4,620 7,209 7,083 6,441 7,021Shareholders’ equity 2,443 3,330 3,219 3,059 3,736

ATTRIBUTABLE PROFIT/(LOSS) ($’million)REVENUE ($’million)

SHAREHOLDERS’ EQUITY ($’million)TOTAL ASSETS ($’million)

0606

0606

492

325

2,443

4,620

0707

0707

1,175

528

3,3307,209

0808

0808

75

892

3,2197,083

0909

0909

143

1,011

3,0596,441

1010

1010

703

972

3,7367,021

SAR1008004_UIC_AR().indb 1 3/31/2011 2:18:05 AM

CHAIRMAN’S STATEMENT

ANNUAL REPORT 2010 UNITED INDUSTRIAL CORPORATION LIMITED2

2010 OVERVIEWSingapore closed 2010 with a

record-setting GDP growth of

14.5%. The spectacular growth

was largely boosted by strong

expansion in manufacturing as

well as the services sectors.

Performance Review and Dividend

Following the completion of several residential property projects in the preceding year, revenue from trading property sales declined by $69.3 million (13%) to $478.2 million in 2010. Gross rental income from the Group’s commercial properties also dropped slightly by $12.9 million (4%) to $297.4 million as rental rates were still lower than rates of expired leases. This was partially offset by higher contributions of $124.3 million (2009: $90.5 million) from Pan Pacific Singapore Hotel and the Westin Tianjin, China (which opened in February 2010). Amidst a buoyant hospitality industry, Pan Pacific Singapore reported an increase of $19.3 million (21%) in revenue with higher room and occupancy rates. In total, gross revenue declined by $38.6 million (4%) to $972.0 million.

Notwithstanding the improved performances of Marina Mandarin and Mandarin Oriental, the absence of contribution from The Sixth Avenue Residences

(completed in August 2009) and lower contribution from The Regency @ Tiong Bahru (completed in March 2010) led to a lower share of operating profits of associated companies by $12.7 million (33%) to $25.6 million.

As a result, the Group’s net operating profit eased to $237.0 million, a $3.8 million (2%) decrease against the previous year.

The pick up in office rents and investment sales resulted in an increase of 15% to the Group’s commercial property valuation at year end. The fair value gain of $466.0 million (2009: fair value loss of $383.6 million), net of deferred income tax was recorded in the income statement, leading to an overall net profit of $703.0 million (2009: net loss of $142.8 million).

Net asset value increased to $2.71 per share, from $2.22 per share in 2009.

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The Board recommends a first and final tax-exempt (one-tier) dividend of 3.0 cents (2009: 3.0 cents) amounting to $41.3 million (2009: $41.3 million) for the financial year ended 31 December 2010.

Singapore Office and Retail Properties, Hotels

Gross rental income for the Group’s office properties was $194.5 million, 6% lower than the previous year as rental rates for new leases and renewals were still lower than the peak rents of expired leases. Average occupancy was maintained at 89%.

To maximize the utilization of our strategically located UIC Building, the Group intends to redevelop it in early 2012. The proposed redevelopment comprising 60% residential and 40% commercial space will yield a gross floor area of about 926,589 square feet.

To meet competitive pressures, the Group’s Marina Square shopping mall brought in new international brands to boost its appeal to shoppers and reinforce its position as a prime shopping destination within the Marina Bay area. The Group’s three hotels namely, Pan Pacific Singapore, Marina Mandarin and Mandarin Oriental, reported brisk business with more convention-related activities. The hotels benefited from the opening of the two integrated resorts, which have contributed to robust tourism figures. A series of other major events during the year, such as the two-month long Great Singapore Sale, inaugural Youth Olympic Games and Formula 1 SingTel Grand Prix, also gave rise to higher overall visitor arrivals and increased vibrancy in the Marina Square area.

West Mall, the Group’s suburban mall located near the Bukit Batok MRT station, maintained occupancy close to 100% with leases for 50% of the total lettable space renewed at 11% higher than expiring rents.

Singapore Residential Projects

During the year, the Group obtained TOP for three projects, namely The Regency @ Tiong Bahru, Grand Duchess at St Patrick’s and One Amber. The Regency @ Tiong Bahru and One Amber are joint developments with UOL Group Limited, while Grand Duchess at St Patrick’s is wholly-owned. All three projects were fully sold.

Two other wholly-owned projects, Park Natura (which is 100% sold) and The Trizon will obtain TOP in 2011 and 2013 respectively. The Trizon, located along Holland Road, was 45% completed with 70% sold as at 31 December 2010.

Overseas Investments

The Group has a 51% interest in Tianjin Jun Long Square, China. The Square is located in the centre of Tianjin’s commercial and retail district and was completed in January 2010. It is a mixed development project, consisting of a five-star hotel managed by Westin Hotel Management L.P., apartments, Grade A offices and a retail mall. All the residential and office units have been sold and the Westin Tianjin Hotel began operations in February 2010.

The Group’s wholly-owned twin-tower condominium project in Chengdu, 朗御 “ Lang Yu ” ( “ The Excellency”), which comprises two 51-storey high residential blocks, has completed construction of the superstructure. The development was successfully launched in March 2010 with 55% sold at the end of 2010.

Towards the end of 2010, the Group acquired a parcel of land in Shanghai Chang Feng District in collaboration with the UOL Group Limited and Kheng Leong Co Pte Ltd. The site is designated for residential cum retail development.

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CHAIRMAN’S STATEMENT


Information Technology Business

In line with the improved economy, UIC Technologies Group, a 60% owned subsidiary of the Group, registered an 18% increase in its revenue to $63.7 million due mainly to more hardware sales to the corporate sector. However, net profit was flat at $2.1 million as a result of higher operating overheads, and lower sales margin in both the hardware and software sectors.

Outlook for 2011

Economists’ forecast of Singapore’s growth for 2011 is between 4% and 6%. Although the office market is expected to continue its upward trend, the significant supply of new office space within the Central Business District could lead to some easing of leasing activity during the year. Whilst consumer spending is expected to remain firm, competition in the retail scene is expected to remain intense from existing and new malls coming onto the market. Nevertheless, the Group will continue to strengthen our tenant mix to reinforce our position in the market and stay prudent in our growth approach and acquisitions. The economic growth will continue to support the residential market although the latest government anti-speculation measures may affect market sentiment in the short term.

Acknowledgements

On behalf of the Board, I would like to extend my gratitude to all our shareholders, tenants, business associates and customers for their unwavering

support during the year. I would also like to express my appreciation to the management and staff of the Group for their invaluable efforts and contributions. Additionally, I would like to thank the Board members for their inputs and guidance.

Last but not least, I would like to thank Ms Pang Cheng Lian, Mr Gn Hiang Meng, Mr Roberto R. Romulo, Mr Gabriel C. Singson and Mr Perry L. Pe, who stepped down from the Board in 2010, for their invaluable counsel and contributions during their terms of service. I wish them success in their future endeavours.

WEE CHO YAWChairmanSingapore, 18 February 2011

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BOARD OF DIRECTORS

Wee Cho Yaw (Chairman)

Dr Wee Cho Yaw was appointed a Director and Chairman

of United Industrial Corporation Limited (“UIC”) in 1992.

He is also the Chairman of the United Overseas Bank

Group comprising United Overseas Bank Limited, Far

Eastern Bank Ltd and their subsidiaries. He has 50 years

of experience in the banking industry. He is also the

Chairman of UOL Group Limited, Haw Par Corporation

Limited, Pan Pacific Hotels Group Limited, Singapore Land

Limited and Marina Centre Holdings Private Limited. He is

also the Chairman of the Wee Foundation.

Dr Wee received Chinese high school education. He is

the Honorary President of the Singapore Federation of

Chinese Clan Associations, Singapore Chinese Chamber

of Commerce and Industry and Singapore Hokkien Huay

Kuan. He was appointed Pro-Chancellor of Nanyang

Technological University in 2004 and was conferred

Honorary Doctor of Letters by the National University of

Singapore in 2008.

Dr Wee was conferred the Businessman Of The Year award

twice at the Singapore Business Awards in 2001 and 1990.

In 2006, he received the inaugural Credit Suisse-Ernst &

Young Lifetime Achievement Award for his outstanding

achievements in the Singapore business community. In

2009, he was conferred the Lifetime Achievement Award

by The Asian Banker.

John Gokongwei, Jr. (Deputy Chairman)

Dr John Gokongwei, Jr. was appointed a Director and

Deputy Chairman of UIC in 1999. As of January 2002, he

is the Chairman Emeritus of JG Summit Holdings, Inc., a

company incorporated in the Philippines and listed on

the Philippines Stock Exchange Inc., since its formation

in 1990. He is also a Director and Deputy Chairman

of Singapore Land Limited, Director of Marina Centre

Holdings Private Limited, Universal Robina Corporation,

Robinsons Land Corporation, Digital Telecommunications

Phils., Inc., Oriental Petroleum and Minerals Corporation

and Anscor Phils.

Dr Gokongwei received a Master in Business Administration

from the De la Salle University in the Philippines, and

attended the Advanced Management Program at Harvard

University, Boston, Massachusetts, USA.

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BOARD OF DIRECTORS

Gwee Lian KhengMr Gwee Lian Kheng was appointed a Director of UIC in 1999. He is the Group Chief Executive of UOL and its listed subsidiary Pan Pacific Hotels Group Limited. Mr Gwee has been with the UOL Group for 36 years. He also sits on the board of Singapore Land Limited.

Mr Gwee graduated with a Bachelor of Accountancy (Honours) from the University of Singapore. He is a Fellow Member of the Chartered Institute of Management Accountants, Association of Chartered Certified Accountants and the Institute of Certified Public Accountants of Singapore.

Lim Hock San (President and CEO)Mr Lim Hock San, the President and Chief Executive Officer, was appointed a Director of UIC in 1992. Mr Lim is also the President and Chief Executive Officer of Singapore Land Limited and a Director of Keppel Corporation Limited and the Chairman of the National Council On Problem Gambling.

Mr Lim graduated with a Bachelor of Accountancy from the University of Singapore. He obtained a Master of Science in Management from the Massachusetts Institute of Technology, and attended the Advanced Management Program at Harvard Business School. He is a Fellow of the Chartered Institute of Management Accountants (UK) and a Fellow and past President of the Institute of Certified Public Accountants of Singapore.

James L. GoMr James L. Go was appointed a Director of UIC in 1999. He is the Chairman and Chief Executive Officer of the JG Summit Holdings Group of Companies in the Philippines. He also sits on the boards of directors of Universal Robina Corporation, Oriental Petroleum and Minerals Corporation, Robinsons Land Corporation, Digital Telecommunications (Philippines), Inc., Singapore Land Limited, Marina Centre Holdings Private Limited and Hotel Marina City Private Limited.

Mr Go graduated with a Bachelor of Science and Master of Science, Chemical Engineering from Massachusetts Institute of Technology, USA.

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Alvin Yeo Khirn HaiMr Alvin Yeo Khirn Hai was appointed a Director of UIC in 2002 and is currently the Chairman of the Remuneration Committee. He is a lawyer in private practice and the Senior Partner of WongPartnership LLP. Mr Yeo was appointed Senior Counsel of the Supreme Court of Singapore in January 2000. He is the Chairman of the Audit Committee of the Law Society of Singapore, and a member of the Appeals Advisory Panel of the Monetary Authority of Singapore, the Singapore International Arbitration Centre’s Council of Advisors, and a Fellow of the Singapore Institute of Arbitrators. He is also a Director of Singapore Land, Tuas Power, Keppel Corporation and Thomson Medical Centre. Mr Yeo is a Member of Parliament and Chairman of the Government Parliamentary Committee for Home Affairs and Law.

Mr Yeo graduated with a Bachelor of Laws (Honours) from King’s College, University of London, and is a Barrister-at-Law (Gray’s Inn).

Hwang Soo JinMr Hwang Soo Jin was appointed a Director of UIC in January 2003 and is currently the Chairman of the Nominating Committee. He is a Chartered Insurer qualified in the United Kingdom, and has more than 40 years’ business experience.

Mr Hwang is currently the Chairman Emeritus and Director of Singapore Reinsurance Corporation Ltd and also sits on the boards of directors of United Overseas Insurance Ltd, Haw Par Corporation Ltd and Singapore Land Limited, among others. He is a former director of Lee Kim Tah Holdings Limited and former Chairman of Singapore Reinsurance Corporation Ltd.

Mr Hwang is an Associate of the Chartered Insurance Institute, United Kingdom.

Tan Boon TeikMr Tan Boon Teik was appointed a Director of UIC in 1992 and is currently the Chairman of the Audit Committee. Mr Tan is a Director of Singapore Land Limited. He is on the Panel of International Commercial Arbitrators of CIETAC in Beijing, Shanghai and Shenzhen. He was the Attorney General of Singapore from 1969 to 1992, and was also the Chairman of Singapore Petroleum Co. Ltd. He is currently a Member of the panel of the Singapore International Arbitration Centre.

Mr Tan is a Fellow of the Singapore Academy of Law and a Fellow of the Singapore Institute of Directors. He graduated with a LLM (London) and is a Barrister-at-Law (Middle Temple).

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BOARD OF DIRECTORS

Wee Ee LimMr Wee Ee Lim was appointed a Director of UIC in 1999. He is presently the President and Chief Executive Officer of Haw Par Corporation Limited. In addition, he sits on the board of directors of Singapore Land Limited as well as UOL Group Limited, Pan Pacific Hotels Group Limited, Hua Han Bio-Pharmaceutical Holdings Limited (a company listed on the Hong Kong Stock Exchange) and Wee Foundation. He was previously a board member of Sentosa Development Corporation.

Mr Wee graduated with a Bachelor of Arts (Economics) from Clark University, USA.

Lance Y. GokongweiMr Lance Y. Gokongwei was appointed a Director of UIC in 1999. He is the President and Chief Operating Officer and a Director of JG Summit Holdings, Inc., Universal Robina Corporation and JG Summit Petrochemical Corporation. He is also the Vice Chairman and Deputy Chief Executive Officer of Robinsons Land Corporation. He is the President and Chief Executive Officer of Cebu Air, Inc. He is also the Chairman of Robinsons Savings Bank, Vice Chairman of JG Summit Capital Markets Corporation and a Director of Digital Telecommunications Phils., Inc., Oriental Petroleum and Minerals Corporation and Singapore Land Limited. He is also a trustee, secretary and treasurer of the Gokongwei Brothers Foundation, Inc.

Mr Gokongwei graduated with a Bachelor of Science (Applied Science) from Pennsylvania Engineering School and a Bachelor of Science (Finance) from Wharton School, USA. He also attended the management and technology program at the University of Pennsylvania.

Antonio L. GoMr Antonio L. Go was appointed a Director of UIC in April 2007. He is currently a Director and President of Equitable Computer Services, Inc. and Chairman of Equicom Savings Bank and Algo Leasing and Finance Inc. He is a Trustee of Go Kim Pah Foundation and Equitable Foundation Inc. He sits on the boards of Petz Ltd. HK, Cebu Air, Inc., Maxicare Healthcare Corporation, Oriental Petroleum and Minerals Corporation, Equicom Information Technology, Digital Telecommunications Philippines, Inc., Equicom Manila Holdings, Medilink Network, Inc. and Equitable Development Corporation.

Mr Go graduated with a Bachelor of Business Administration from Youngstown University, USA. He also attended the International Advanced Management programme at the International Management Institute, Geneva, Switzerland, and the ABA National School of Bankcard Management, Northwestern University, USA.

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CORPORATE GOVERNANCE REPORT

The Company is committed to maintaining high standards of corporate governance. This report outlines the Company’s corporate governance practices with reference to the revised Code of Corporate Governance 2005 (“Revised Code”).

BOARD MATTERSBoard’s Conduct of its AffairsThe principal functions of the Board are to: (a) provide entrepreneurial leadership, set strategic aims and commitments, review recommendations of the Nominating Committee (“NC”), Remuneration Committee (“RC”), Audit Committee (“AC”) and Executive Committee (“EXCO”) and ensure that the necessary financial and human resources are in place for the Company to meet its objectives; (b) establish a framework of prudent and effective controls which enables risk to be assessed and managed; (c) review the business results of the Company and monitor the performance of Management; (d) set the Company’s values and standards, and ensure that obligations to shareholders and others are understood and met; and, (e) assume responsibility for corporate governance, and monitor Board composition, performance and processes.

The Board delegates certain functions to the various Board Committees, namely, the NC, RC, AC and EXCO. Each committee has its own written terms of reference and whose actions are reported to and monitored by the Board. All the committees are activity engaged and play an important role in ensuring good corporate governance in the Company.

The Board meets on a quarterly basis and as and when warranted by circumstances. Telephonic conferences at Board meetings are permitted by the Company’s Articles of Association (“Articles”). The number of Board and Board Committee meetings held in 2010, as well as the attendance of each Board member at these meetings, are disclosed below:

Name

Attendanceat 4 BoardMeetings

Attendanceat 4 AuditCommitteeMeetings

Attendance at1 Nominating

CommitteeMeeting

Attendance at1 Remuneration

CommitteeMeeting

Attendance at2 ExecutiveCommitteeMeetings

Wee Cho Yaw 4 n/a 1 1 2John Gokongwei, Jr 3 n/a n/a n/a 1Lim Hock San 4 n/a n/a n/a 2Antonio L. Go 4 n/a n/a n/a n/aJames L. Go 4 4 1 1 2Lance Y. Gokongwei 3 n/a n/a n/a n/aGwee Lian Kheng 4 n/a n/a n/a 2Hwang Soo Jin 4 3 1 1 n/aTan Boon Teik 4 4 1 n/a n/aWee Ee Lim 4 n/a n/a n/a n/aAlvin Yeo Khirn Hai 2 4 n/a 1 n/a

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The Company has adopted internal guidelines and financial authority limits structure setting forth matters that require Board approval. Under the guidelines, Board approval is required for material transactions such as commitments and payments of operating and capital expenditure (including property development projects) exceeding $5 million by any Group company, and disposal of assets exceeding $5 million.

A formal letter setting out the Director’s duties and obligations is provided to each Director upon his appointment. Apart from keeping the Board informed of all relevant new laws and regulations, the Company has an on-going training budget for existing Directors to attend any training programme in connection with their duties as Directors, and an orientation programme for incoming Directors to ensure that they are familiar with the Company’s business and governance practices.

Board’s Composition and GuidanceThe Board comprises eleven Directors, of whom four, namely, Antonio L. Go, Tan Boon Teik, Hwang Soo Jin and Alvin Yeo Khirn Hai are considered independent directors. Mr Lim Hock San, the Chief Executive Officer (“CEO”), holds an executive position. The independence of each Director is reviewed annually by the NC. Following the review, the NC is of the view that the independent Directors make up at least one-third of the Board and that the current Board size is appropriate, taking into account the nature and scope of the Company’s operations. No individual or small group of individuals dominates the Board’s decision-making process.

The Board consists of high calibre members with a wealth of knowledge, expertise and experience. As a group, the Directors contribute valuable direction and insight, drawing from their vast experience in matters relating to accounting, finance, legal, banking, business, management, property and general corporate matters. Brief description on the background of each Director is set out in the “Board of Directors” section of this Annual Report.

The non-executive Directors effectively check on Management by constructively challenging and helping to develop proposals on strategy. They monitor and review the reporting and the performance of Management in meeting agreed goals and objectives. The non-executive Directors may meet regularly on their own as warranted without the presence of Management.

CHAIRMAN AND CHIEF EXECUTIVE OFFICERTo ensure an appropriate balance of power, increased accountability and a greater capacity of the Board for independent decision-making, the Company has a clear division of responsibilities at the top management level. Such division of responsibilities is established and agreed by the Board. The non-executive Chairman and the CEO have separate roles and they are not related to each other. The Chairman’s responsibilities include: (a) leading the Board to ensure its effectiveness on all aspects of its role and setting its meeting agenda; (b) ensuring that the Directors receive accurate, timely and clear information; (c) ensuring effective communication with shareholders; (d) encouraging constructive relations between the Board and Management; (e) facilitating the effective contribution of non-executive Directors; (f) encouraging constructive relations between executive Directors and non-executive Directors; and, (g) promoting high standards of corporate governance. The CEO is the most senior executive in the Company and bears executive responsibility for the Company’s business.

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BOARD MEMBERSHIPExecutive Committee The EXCO comprises five board members. They are Wee Cho Yaw (Chairman), John Gokongwei, Jr., James L. Go, Lim Hock San and Gwee Lian Kheng.

The Board has conferred upon the EXCO under its Terms of Reference, approval limits and powers affecting the Group on, inter alia, (1) investments, acquisitions and divestment matters; and (2) formulation and review of strategic business directions and corporate policies.

Nominating CommitteeThere is a formal and transparent process for the appointment of new directors to the Board through the establishment of the NC. The NC comprises five Directors, namely, Hwang Soo Jin (Chairman), Wee Cho Yaw, James L. Go, Tan Boon Teik and Antonio L. Go (appointed on 23 April 2010), of whom three, including the Chairman are independent.

The NC reviews and recommends all new Board appointments and also the re-nomination and re-appointment of Directors to the Board.

The main Terms of Reference of the NC are: (a) recommending the appointment/re-appointment of Directors; (b) reviewing skills required by the Board; (c) reviewing the size of the Board; (d) determining annually the independence of each Director, and ensuring that the Board comprises at least one-third independent Directors; (e) deciding whether a Director with multiple Board representations is able to and has been adequately carrying out his duties as Director; (f) deciding how Board’s performance may be evaluated and proposing objective performance criteria to assess the effectiveness of the Board as a whole and the contribution of each Director; and (g) carrying out annual assessment of the effectiveness of the Board and individual Directors.

In the nomination and selection process for a new Director, the NC identifies key attributes of an incoming Director based on the requirements of the Group and recommends to the Board the appointment of the new Director. New Directors are appointed by way of a Board Resolution. The NC conducts a yearly review of the appointment, retirement, re-nomination and re-election of Directors. The Directors submit themselves for re-election on regular intervals of at least once every three years in accordance with the Articles. In its deliberations on the re-nomination of existing Directors, the NC takes into consideration the Director’s contribution and performance. The NC is also responsible for determining annually, the independence of Directors. Following its annual review for the year, the NC has reviewed and endorsed the independence status of each Director. The NC also considered, and is of the opinion, that multiple board representation of the Directors does not impede their performance in carrying out their duties to the Company. The NC requires a director who is unable to attend any meeting to give his/her views, if any, in writing to the Chairman of the Board and/or Board Committees. To address the competing time commitments of such Directors, the Board and Board Committee meeting dates are scheduled in advance prior to the start of every calendar year. The information on independent, executive and non-executive Directors, including the year of initial appointment, last re-election and membership on Board Committees is set out in the section of this Annual Report entitled “Corporate Data”.

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BOARD PERFORMANCEWith the Board’s approval, the NC has adopted objective performance criteria for assessing the effectiveness of the Directors and the Board as a whole. In evaluating the Board’s performance as a whole, the NC has adopted the quantitative indicators which include, return on equity, return on assets, economic value added, the Company’s share price performance over a five year period vis-à-vis the Singapore Straits Times Index and a benchmark index of industry peers. In addition, the NC also takes into consideration the qualitative criteria of the effectiveness of the Board in monitoring Management’s performance and the success of Management in achieving strategic and budgetary objectives set by the Board.

As part of the yearly assessment of contribution of each Director to the effectiveness of the Board, the Chairmen of the NC and the Board would assess whether each Director has contributed effectively and discharged their duties responsibly. The Board would then be informed of the results of performance evaluation. The individual Director’s performance criteria is in relation to their industry knowledge and/or functional expertise, contribution and workload requirements, sense of independence and attendance at the Board and Board Committee meetings.

A formal assessment of the effectiveness of the Board as a whole and the contribution by each individual Director to the effectiveness of the Board was duly carried out this year on the above basis.

ACCESS TO INFORMATIONTo enable the Board to fulfil its responsibilities, Directors are provided with complete, adequate and timely information prior to Board and Board Committee meetings and on an on-going basis.

Management provides Directors with monthly management accounts and whenever necessary, copies of budgets and forecasts. Board papers are sent to Directors at least seven days before each Board and Board Committee meetings. Managers, who can provide additional insight into the matters to be discussed, are present at the relevant time during the Board and Board Committee meetings. The Board is responsible for the appointment and removal of the Company Secretary. The Company Secretary administers and attends all Board and Board Committee meetings. The Company Secretary ensures good information flow within the Board and its Committees and between senior Management and non-executive Directors. The Directors have separate and independent access to the Company Secretary and senior Management.

The Board takes independent professional advice as and when necessary to enable it to discharge its responsibilities effectively. Subject to the approval of the Chairman, the Directors may seek and obtain separate and independent professional advice to assist them in their duties.

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PROCEDURES FOR DEVELOPING REMUNERATION POLICIESRemuneration Committee There is a formal and transparent procedure for developing policies on executive remuneration and for fixing the remuneration packages of individual Directors. The members of the RC are Alvin Yeo Khirn Hai (Chairman), Wee Cho Yaw, James L. Go, Hwang Soo Jin and Antonio L. Go (appointed on 23 April 2010). The RC is made up of non-executive Directors, majority of whom, including the Chairman are independent.

The RC recommends to the Board an appropriate and competitive framework of remuneration for the Board members which covers all aspects of remuneration, including without limitation, directors’ fees, salaries, allowances, bonuses, options and benefits-in-kind. The RC also reviews the remuneration of senior Management of the Group.

The RC’s main Terms of Reference are: (a) reviewing the existing benefit and remuneration systems, including the Performance or Variable Bonus Schemes and the Executive Share Option Scheme and proposing any amendment/update, where appropriate, to the Board for approval; (b) approving the remuneration packages of CEO and senior Management of the Group; (c) administering the United Industrial Corporation Limited Share Option Scheme (“ESOS”) which was approved by shareholders on 18 May 2001, including approving allocations of options to qualifying executives including executive Directors; and (d) formally assessing and reviewing the performance of Directors on an annual basis and recommending appropriate rewards and fees for Directors taking into account their services and contributions on the various Board Committees.

LEVEL AND MIX OF REMUNERATIONIn setting remuneration packages, the RC will take into account the Company’s performance and the performance of individual Directors and senior Management. The Board, with the RC’s input, periodically reviews the Company’s remuneration policy to ensure that it is in line with market practices. For Directors’ fees, the RC is guided by the Singapore Institute of Directors’ recommendations.

No member of the RC or any Director is involved in the deliberations in respect of any remuneration, compensation, options or any form of benefits to be granted to him or her.

Details of share options granted to executives of the UIC Group under the ESOS can be found in the “Directors’ Report” section of this Annual Report, and can also be found on the website: www.uic.com.sg. The specific remuneration packages for each director has been endorsed by the RC and recommended to the Board for shareholders’ approval at the Annual General Meeting (“AGM”). There are no special service contracts offered by the Company.

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Remuneration of Directors For The Year Ended 31 December 2010

Remuneration Band & Name of Director

Base/Fixed Salary

Variable or Performance-

Related Income/Bonuses

Directors Fees

Share Options Granted,

Allowances and Other Benefits

$1,000,000 – $1,250,000

Lim Hock San 51% 39% n/a 10%

Below $250,000

Wee Cho Yaw n/a n/a 100% n/a

John Gokongwei, Jr. n/a n/a 100% n/a

Antonio L. Go n/a n/a 100% n/a

Gn Hiang Meng* n/a n/a 100% n/a

James L. Go n/a n/a 100% n/a

Lance Y. Gokongwei n/a n/a 100% n/a

Gwee Lian Kheng n/a n/a 100% n/a

Hwang Soo Jin n/a n/a 100% n/a

Pang Cheng Lian* n/a n/a 100% n/a

Gabriel C. Singson* n/a n/a 100% n/a

Roberto R. Romulo* n/a n/a 100% n/a

Tan Boon Teik n/a n/a 100% n/a

Wee Ee Lim n/a n/a 100% n/a

Alvin Yeo Khirn Hai n/a n/a 100% n/a

* Stepped down from the Board on 23 April 2010

Remuneration of Key Executives (Who Are Not Also Directors) For The Year Ended 31 December 2010

Remuneration Band & Name of Key Executive

Base/Fixed Salary

Variable or Performance-

Related Income/Bonuses

Share Options Granted,

Allowances and Other Benefits

$250,000 – $500,000

Han Chan Juan 79% 11% 10%

Loy Chee Chang 52% 15% 33%

Goh Poh Leng 51% 22% 27%

Below $250,000

Michael Ng Seng Tat# 92% 0% 8%

Susie Koh 55% 16% 29%

Lee Wah Poh 70% 20% 10%

# Joined the Group on 1 October 2010.

No employee of the Company and its subsidiaries was an immediate family member of a Director or the CEO and whose remuneration exceeded $150,000 during the financial year ended 31 December 2010.

SAR1008004_UIC_AR().indb 14 3/31/2011 2:18:29 AM


INFORMATION ON KEY EXECUTIVESMichael Ng Seng Tat(Group General Manager)Mr Michael Ng was Managing Director of Savills Singapore for 6 years before joining the Group in October 2010. His other previous appointments were Managing Director of Hamptons International; General Manager of the real estate arm of COSCO Singapore where he handled investment and development projects in Singapore and China; and Associate Director of investment sales at Richard Ellis.

He holds a Bachelor of Science (Estate Management) Honours degree from National University of Singapore. Mr Michael Ng is in charge of property investments and development projects for the Group.

Han Chan Juan(Senior General Manager, Asset Management)Mr Han Chan Juan qualified as a chartered accountant in 1980 and is a member of the Institute of Chartered Accountants in England and Wales and the Institute of Certified Public Accountants of Singapore. Prior to joining the Group in 2009, he was Senior Vice President (Performance Management) of the Pan Pacific Hotels Group Limited. He has over 20 years of experience in financial and asset management of hotels.

Loy Chee Chang(Senior Financial Controller)Mr Loy Chee Chang graduated from the National University of Singapore in 1982 with a Bachelor of Accountancy degree and worked in Pricewaterhouse, Singapore as an auditor from 1982 to 1991. He joined UIC in 1991 as its Financial Controller. He is the Senior Financial Controller of both UIC and Singapore Land Limited.

Goh Poh Leng(Senior General Manager, Marketing)Ms Goh Poh Leng graduated with a Bachelor of Science (Estate Management)(Honours) from the National University of Singapore in 1990 and subsequently obtained her Certified Diploma in Accounting and Finance conducted by The Association of Chartered Certified Accountants, UK. Prior to joining the Group, Ms Goh worked in an international property consultancy firm for two years. She joined in 1992 and held various positions until her appointment as Senior General Manager, Marketing in January 2010.

Susie Koh(Company Secretary/Legal Manager)Mrs Susie Koh obtained her L.L.B. (Honours), University of London in 1976 and Barrister-at-Law (Gray’s Inn) in 1979. Mrs Koh was in private legal practice in Singapore as an Advocate & Solicitor from 1985. She became an in-house corporate lawyer and held the position of Company Secretary/General Manager (Legal) in Scotts Holding Ltd in 1991 until 1995 when she joined Sembawang Corporation Ltd as Senior Vice President, Group Legal/Group Company Secretary. She was appointed Company Secretary and Legal Manager for both UIC and Singapore Land Limited in 2001. She is a member of the Singapore Academy of Law.

SAR1008004_UIC_AR().indb 15 3/31/2011 2:18:30 AM



Lee Wah Poh(Managing Director of UIC Technologies Pte Ltd)Ms Lee obtained her Bachelor of Technology with First Class Honours in Chemistry and Control Engineering and Master in Business Administration at the University of Bradford, U.K. She worked as a Programmer/Analyst with Hewlett Packard, Singapore from February 1981 to October 1982.

She joined UIC Computer Systems Pte Ltd in November 1982 as an Assistant to the Managing Director and was promoted to the post of Managing Director in July 1993. Ms Lee resigned in 1998 and re-joined the UIC Group to become the Managing Director of UIC Technologies Pte Ltd in March 2000.

ACCOUNTABILITY AND AUDITThe Board provides shareholders with a balanced and understandable assessment of the Company’s performance, position and prospects on a quarterly basis via quarterly announcements of results and other ad hoc announcements as required by SGX-ST; and Management provides Directors with the management accounts on a monthly basis.

AUDIT COMMITTEE The AC comprises four non-executive Directors, namely, Tan Boon Teik (Chairman), James L. Go, Hwang Soo Jin and Alvin Yeo Khirn Hai, the majority of whom, including the Chairman, are independent. The members have many years of financial management experience in the finance and legal industry.

The main functions and Terms of Reference of the AC are to: (a) review with the external auditor the scope and results of the audit report and its cost effectiveness; (b) review the significant financial reporting issues and judgements so as to ensure the integrity of the financial statements of the Company and any formal announcements relating to the Company’s financial performance; (c) review the effectiveness of the Company’s material internal controls and risk management and the adequacy of the internal audit function annually; (d) review the assistance given by the Company’s officers to the external and internal auditors and determining that no Management restriction has been placed on the scope of the examination of the auditors; (e) commission and review the findings of internal investigations into matters where there is any suspected fraud or irregularity, or failure of internal controls or infringement of any Singapore law, rule and regulation, which has or is likely to have a material impact on the Group’s operating results or financial position; (f) review Interested Person Transactions (“IPT”); (g) meet with the external and internal auditors annually without the presence of Management; and (h) review the independence of external auditors annually.

The AC has explicit authority to investigate any matter within its Terms of Reference, full access to and co-operation by Management and full discretion to invite any Director or executive Director to attend its meetings, and has reasonable resources to enable it to discharge its functions properly. Management has put in place, with the AC’s endorsement, arrangements by which staff of the Group may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. The objective for such arrangement is to ensure independent investigation of such matter and for appropriate follow-up action.

During the year, the AC held four meetings. The announcements of the quarterly and full year results and the financial statements of the Group and the Auditors’ Report thereon for the full year were reviewed by the AC prior to consideration and approval of the Board.

SAR1008004_UIC_AR().indb 16 3/31/2011 2:18:31 AM


The AC has met with the external and internal auditors, without the presence of Management, at least once during the year. For the financial year 2010, the AC undertook a review of the fees and expenses of the audit and non-audit services provided by the external auditor, PricewaterhouseCoopers LLP. It assessed whether the nature and extent of the non-audit services might prejudice the independence and objectivity of the auditor before confirming its re-nomination. It was satisfied that such services did not affect the independence of external auditor. The AC also reviewed the Company’s IPT and the cost-effectiveness of the audit conducted by the external auditor. Minutes of the AC meetings are submitted to the Board for information and review.

INTERNAL CONTROLSThe Group has in place a sound system of internal controls and risk management for ensuring proper accounting records and reliable financial information as well as management of business risks with a view to safeguarding shareholders’ investments and the Company’s assets. The risk management framework implemented provides for systematic and structured review and reporting of the assessment of the degree of risk, evaluation of effectiveness of controls in place and the requirements for further controls. The Company has implemented a whistle-blowing policy, approved by the AC, in February 2004.

INTERNAL AUDITThe Group maintains accountability through an internal audit function that is independent of the activities it audits. The internal audit team is guided by the Standards of Professional Practice of internal auditing set by the Institute of Internal Auditors, and it reports directly to the Chairman of the AC and, administratively, to the CEO.

The Company’s internal and external auditors review the effectiveness of the Company’s material internal controls, including financial, operational and compliance controls, and risk management. Any material non-compliance or failures in internal controls and recommendations for improvements are reported to the AC. The internal audit team has unrestricted access to all records, properties, functions and co-operation from Management and staff necessary to effectively discharge its responsibilities. The AC has reviewed the Company’s internal audit function and risk assessment based on reports from the external and internal audit teams, and satisfied that there are adequate internal controls in the Company.

COMMUNICATION WITH SHAREHOLDERSThe Company engages in regular, effective and fair communication with its shareholders. The Board provides shareholders with a balanced and understandable assessment of the Company’s performance, position and prospects on a quarterly basis via quarterly announcement of results and other ad hoc announcements as required by SGX-ST. Timely as well as detailed disclosure is made in compliance with the SGX-ST guidelines. When material information is disseminated to the SGX-ST, such information is posted as soon as practicable on the Company’s website at www.uic.com.sg. Shareholders’ participation at AGMs are highly encouraged. Each item of special business included in the Notice of the meeting is accompanied by an explanation for the proposed resolution. Separate resolutions are proposed for substantially separate issues at the meeting. The Chairman of each Board Committee as well as external auditors are normally present at general meetings to address shareholders’ queries, if any.

SAR1008004_UIC_AR().indb 17 3/31/2011 2:18:32 AM



GREATER SHAREHOLDER PARTICIPATIONThe Articles allow a member of the Company to appoint one or two proxies to attend and vote on behalf of the member. For fairness to all shareholders, the Company has not amended its Articles to lift the limit on the number of proxies for nominee shareholders. However, upon written request, the Company may allow additional proxies for nominee shareholders to attend the shareholders’ meetings as an “observer” on a case by case basis.

The Company has not amended its Articles to provide for absentia voting as the Board feels that it is difficult to ensure a foolproof system.

CODE ON SHARE DEALINGSThe Company has adopted Rule 1207(18) of the SGX-ST Listing Manual with respect to dealings in the Company’s securities by its Directors and employees. Circulars are issued to all Directors and employees of the Company and within the Group to remind them of, inter alia, laws of insider trading and the importance of not dealing in the shares of the Company and its subsidiaries on short term consideration and during the “prohibitive periods”.

Interested Person Transactions (“IPT”) PoliciesThe Company has adopted an internal policy in respect of any transaction with interested persons and has set out the procedures for review and approval of the Company’s IPT.

Except as disclosed under the section on Material Contracts, there were no IPT for the financial year ended 31 December 2010.

Material ContractsThere were no other material contracts of the Company or its subsidiaries involving the interests of the CEO, each Director or Controlling Shareholder, either still subsisting at the end of the financial year or if not then subsisting entered into since the end of the previous financial year, except for the following:

(a) the Company’s joint venture with subsidiary, Singapore Land Limited (“Singland”) and UOL Group Limited (“UOL”) for the acquisition and development of One Amber in 2005. The freehold land was acquired for a cash consideration of $236.5 million. The transaction was on normal commercial terms, the risks and rewards of the joint venture are in proportion to the equity of each joint venture partner UIC:SLL:UOL (35:35:30) respectively.

(b) the Company’s joint venture with UOL in relation to the acquisition and development of The Regency@Tiong Bahru in 2005. The freehold residential site was acquired for a cash consideration of $60 million. The transaction was on normal commercial terms, the risks and rewards of the joint venture are in proportion to the Company’s and UOL’s equity shareholdings of 40:60 respectively.

(c) Singland China Holdings Pte. Ltd. (a wholly-owned subsidiary of Singland), UOL Capital Investments Pte. Ltd. (a subsidiary of UOL) and Peak Star Pte. Ltd., (a subsidiary of Kheng Leong Co Pte Ltd), have established a joint venture company, Shanghai Jin Peng Realty Co Ltd on a 30:40:30 basis respectively to develop Parcel 11, Chang Feng District, Shanghai, PRC into a mixed-use development comprising residential units and retail component. The purchase price for the site was RMB2.06 billion.

SAR1008004_UIC_AR().indb 18 3/31/2011 2:18:33 AM

CORPORATE DATA


Board of Directors Board AppointmentDate of InitialAppointment

Date ofLast Re-Election

Wee Cho Yaw Non-Executive Chairman 26.06.92 23.04.10

John Gokongwei, Jr. Non-Executive Deputy Chairman 27.07.99 23.04.10

Lim Hock San President & Chief Executive Officer 01.04.92 24.04.09

Antonio L. Go Non-Executive and Independent Director 25.04.07 23.04.10

James L. Go Non-Executive Director 28.05.99 23.04.10

Lance Y. Gokongwei Non-Executive Director 28.05.99 24.04.09

Gwee Lian Kheng Non-Executive Director 28.05.99 23.04.10

Hwang Soo Jin Non-Executive and Independent Director 31.01.03 23.04.10

Tan Boon Teik Non-Executive and Independent Director 24.07.92 23.04.10

Wee Ee Lim Non-Executive Director 28.05.99 25.04.08

Alvin Yeo Khirn Hai Non-Executive and Independent Director 11.09.02 24.04.09

Frederick D. Go Alternate to John Gokongwei, Jr. 18.01.05 n/a

Patrick O. Ng Alternate to Lance Y. Gokongwei 10.08.99 n/a

Audit Committee Company SecretaryTan Boon Teik Chairman Susie KohJames L. Go MemberAlvin Yeo Khirn Hai Member AuditorsHwang Soo Jin Member PricewaterhouseCoopers LLP

8 Cross Street #17-00 PWC BuildingSingapore 048424

Nominating Committee Audit Partner: Sim Hwee Cher (appointedHwang Soo Jin Chairman with effect from financial year 2008)Wee Cho Yaw MemberJames L. Go Member Share RegistrarsTan Boon Teik Member KCK CorpServe Pte LtdAntonio L. Go Member 333 North Bridge Road #08-00

KH KEA BuildingRemuneration Committee Singapore 188721Alvin Yeo Khirn Hai Chairman Telephone: 6837 2133Wee Cho Yaw Member Facsimile: 6338 3493James L. Go MemberHwang Soo Jin Member Registered OfficeAntonio L. Go Member 5 Shenton Way #02-16

UIC BuildingExecutive Committee Singapore 068808Wee Cho Yaw Chairman Telephone: 6220 1352John Gokongwei, Jr. Member Facsimile: 6224 0278James L. Go Member Website: www.uic.com.sgLim Hock San MemberGwee Lian Kheng Member Company Registration NumberWee Ee Lim (Alternate to Wee Cho Yaw 196300181E

and/or Gwee Lian Kheng)Lance Y. Gokongwei (Alternate to John Gokongwei, Jr.

and/or James L. Go)

SAR1008004_UIC_AR().indb 19 3/31/2011 2:18:33 AM

MANAGEMENT REVIEW

The office market turned around in the second half of the year following an exceptional performance in the Singapore economy. Notwithstanding the improved market conditions, prime office rents were still about 50% shy of the peak rent achieved in 2008.

Residential property market continued to improve in 2010, in tandem with the economic recovery. Despite some corrections in property prices following the Government’s measures in August 2010 to cool the property market, economic fundamentals remained intact with demand sustained by genuine homebuyers and upgraders.

The offifollowinNotwithwere st

OVERVIEWill about

Residential propwith the economprices followingthe property mdemand sustain

were st

2010

Grand Duchess @ St Patrick’s

SAR1008004_UIC_AR().indb 20 3/31/2011 2:18:34 AM

One Amber

Marina Square

West Mall

SGX Centre 2

SAR1008004_UIC_AR().indb 21 3/31/2011 2:18:45 AM


PROPERTY PORTFOLIO

COMMERCIAL OFFICE PROPERTIES

UIC BuildingThe Group paid $160.1 million in development charges to the Urban Redevelopment Authority for the redevelopment of UIC Building into a 926,589 square feet development comprising 60% residential and 40% commercial space.

As at 31 December 2010, occupancy was at 73%. Rental revenue for the year was 19% lower compared to the preceding year. The lower revenue and occupancy were primarily due to non-renewal by some tenants in view of the redevelopment plans in early 2012.

Stamford CourtThe neo-classical office-cum-retail complex is situated at the junction of Hill Street and Stamford Road, opposite the Singapore Management University. The building’s prominence is enhanced by the Circle Line and the new Bras Basah MRT

Station. During the year, 34% of leases expired. Total rental revenue increased by 13% as average occupancy for the year improved to 99% compared to the preceding year of 89%.

Singapore Land TowerDuring the year under review, 30% of leases expired in Singapore Land Tower. Of these, 82% were renewed. With a further 24% of new leases secured, occupancy improved to 98% at the end of the year. Rental revenue, however, declined by 7% compared to the previous year.

Singapore Land Tower upgraded its Building Management System (BMS) and the physical installation of the BMS was completed in September 2010. The enhanced BMS integrates the central air-conditioning, plant room equipment and other essential services with the central control room, enabling these facilities to be monitored closely for faster response and better energy control.

StamfordCourt

SingaporeLand Tower

SAR1008004_UIC_AR().indb 22 3/31/2011 2:19:01 AM


Clifford CentreThe building is located in the heart of Raffles Place, the financial district of Singapore. Average occupancy improved to 94% although rental income declined by 5% compared to the preceding year.

The retail premises, which formed 20% of the total lettable area, contributed about 23% of the total rental revenue. To help retail tenants maintain healthy sales revenue, year-end marketing promotions were organised during the festive period.

SGX CentreAlthough 37% of leases expired during the year, 42% of renewals and new leases were secured, thus increasing average occupancy of SGX Centre to 99%. However, rental revenue declined 6% as market rents were lower than expiry rents.

The Building Management Services Division continued to serve as the managing agent for both SGX Centre 1 and 2 during the year under review. The managing agent continued to upkeep the facilities and maintained them in good and serviceable condition in order to retain existing tenants and face competition ahead.

The GatewayDespite the expiry of 42% of leases during the year, through an aggressive marketing strategy, occupancy for the twin office buildings improved to 92% at the end of 2010. However, rental revenue declined slightly by 3% compared to the previous year.

The East Tower lifts were successfully upgraded to provide smoother and faster rides for tenants. Some of the major improvement works included the replacement of the centralised air-conditioning chillers with higher efficiency chillers and the installation of energy saving devices for condenser pumps.

Abacus Plaza and Tampines PlazaThe twin office blocks, Abacus Plaza and Tampines Plaza situated in the Tampines Finance Park are within walking distance to Tampines MRT Station and several shopping malls.

During the year, 25% of renewals and new leases were secured for Abacus Plaza, thereby improving average occupancy of the building from 94% to 97%. However, with lower market rates secured for renewals and new leases, rental income was lower by 17% compared to the previous year.

In the case of Tampines Plaza, rental income remained unchanged during the year. However, average occupancy declined 16% to 84%. The lower occupancy was primarily due to non-renewal of an anchor tenant occupying 79,000 square feet. To date, 66,000 square feet of the vacated space has been leased.

Upgrading works to improve the buildings’ main fire alarm panels at the Fire Command Centre and four air cooled condenser coils for the chillers were carried out during the year.

COMMERCIAL RETAIL PROPERTIES

Marina Square Shopping MallMarina Square Shopping Mall has over 660,000 square feet of lettable retail space with a broad mix of tenants with diverse shopping, dining and entertainment offerings. Complementing the selection of major international brands like Mango, Zara and Topshop, are new labels Berskha and Cache Cache, while StarThreeSixty, MBT (Masai Barefoot Technology) the “anti-shoe” concept store, Muji and The Planet Traveller provide an added dimension to the shopping experience.

In keeping with the growing focus on health and wellness, The North Face and Asics Sports, further strengthened the sports and active lifestyle zone.

In 2010, new overseas brands such as Martha Tilaar from Indonesia, Tony Molly from Korea and French restaurant chain – Hippopotamus, opened their first stores in Singapore at Marina Square. The launch of these new-to-market brands provides fresh appeal to shoppers and reinforces the mall’s position as a prime shopping destination within the Marina Bay area.

SAR1008004_UIC_AR().indb 23 3/31/2011 2:19:05 AM


PROPERTY PORTFOLIO

In collaboration with Marina Baywatch Association, the mall participated in the Christmas Light-Up for the second year at the Marina Bay area. Such events helped to establish Marina Square as a centre of activity, entertainment and exciting events for local and international visitors.

Marina Square HotelsThe hospitality industry in Singapore had been buoyant with growing tourist arrivals and the boost from the opening of two integrated resorts and events such as the Great Singapore Sale, inaugural Youth Olympic Games and Formula 1 SingTel Grand Prix. Coupled with the economic recovery, the three Marina Square Hotels, namely, Pan Pacific Singapore, Marina Mandarin and Mandarin Oriental, experienced a surge in occupancy with the re-emergence of meeting groups and conventions related business.

Novena SquareThe Group has a 20% interest in Novena Square, a commercial development located above the Novena MRT Station. As at the end of December 2010,

occupancy for the retail mall was 100% whilst office occupancies for Tower A and B were 96% and 100% respectively.

The retail mall, Velocity @ Novena Square, reinforced its position as a sports mall with more high profile and innovative sports events namely, urban obstacle challenge, street basketball tournament and disabled sports competition. It also introduced the first largest outdoor living room concept for public screening of the World Cup Finals.

Velocity continued to work with partners to bring in well-publicised events like the National Students Lianhe Zaobao Table Tennis Cup Challenge. The mall was also one of the stops for the victory parade when the Singapore National Table Tennis Women’s team won the World Team Table Tennis Cup Championships 2010. Popular runs like the New Balance Real Run, Mizuno Run, Saloman Run, Saucony Passion Run, Newton Run, Singapore Sprint Series 2010 and Safari Run also held their registration road shows at Velocity. In 2010, the mall continued their close relationship with the Singapore Sports Council by being the official venue for the launch of the cheer song for the Youth Olympic Games.

West MallWest Mall has been serving residents of Bukit Batok New Town, Jurong East, Hillview and Clementi for the last 12 years. It is connected directly to the Bukit Batok MRT and is easily accessible by the residents. Shopper traffic recorded at the mall was estimated at 13 million visits for the year.

Leases for 54% of the total lettable area of 183,251 square feet, expired during the year. 50% was renewed at 11% increase from expiring rents. However, as most of the renewals were in the last quarter of the year, total revenue increased by only 2% to $26.8 million. Occupancy for the year was maintained at 100%.

New brands such as Hang Ten, pepperPLUS, My Toast, Rockery and Maloevera strengthened the retail mix to satisfy shoppers’ demand.

The Trizon

SAR1008004_UIC_AR().indb 24 3/31/2011 2:19:06 AM


West Mall continued to support the public outreach programmes working closely with the South West Community Development Council. One of the major events, the People’s Association’s 50th Anniversary was celebrated at West Mall in August.

The mall was repainted and improvement works were carried out in the lift lobbies to freshen its image. New sidewall sprinklers were installed at the atrium to comply with the Fire Safety Act, for holding events and promotions at the atrium.

RESIDENTIAL PROPERTIESDuring the year, the Group obtained TOP for three projects, namely The Regency @ Tiong Bahru, Grand Duchess at St Patrick’s and One Amber. The Regency @ Tiong Bahru and One Amber are joint developments with UOL Group Limited while Grand Duchess at St. Patrick’s is the Group’s wholly-owned project.

Two other wholly-owned projects, Park Natura and The Trizon will obtain TOP in 2011 and 2013 respectively.

One AmberLocated on a 249,300 square feet of freehold site in the Katong area, the development comprises four 23-storey blocks of 562 units, with full condominium facilities. The Group has a 62% stake in this project. TOP was obtained in April 2010. The project is fully sold.

The Regency @ Tiong BahruThe freehold development has a site area of 66,000 square feet. The 158-unit development comprises two towers, 34 and 35 storeys respectively, with condominium facilities. The site is located on the fringe of the city centre, a few minutes walk from the Tiong Bahru MRT station. TOP was obtained in March 2010. The project is fully sold.

Grand Duchess at St Patrick’sThis is a 131,000 square feet freehold site project comprising five blocks of 121 units and two conservation houses, with condominium facilities.

The development has been awarded the 2010 URA Architectural Heritage Award. TOP was obtained in April 2010. The project is fully sold.

Park NaturaSituated close to the forest of Bukit Batok Nature Reserve and Bukit Timah Nature Reserve, this 213,000 square feet freehold site comprises four five-storey blocks of 192 apartment units with full condominium facilities. As at 31 December 2010, the project is about 95% completed. TOP is expected to be obtained in 2011. The project is fully sold.

The TrizonNestled in the Holland Road area (off the junction of Holland Road/Pandan Valley), this 195,000 square feet freehold site comprises three 24-storey blocks of 289 units, and has full condominium facilities. As at 31 December 2010, the project is about 45% completed and 70% sold. TOP is expected to be obtained in 2013.

OVERSEAS INVESTMENTS

CHINATianjin Jun Long Square ProjectThe Group has a 51% stake in the Tianjin Jun Long Square Project located at Nanjing Road, Heping District, at the heart of the City Centre. The project which was completed in January 2010 has a land area of 13,200 square metres and gross floor area of 147,000 square metres. It is a mixed development comprising a 38-storey five star hotel with 275 rooms cum 264 apartments and three Grade A Office Towers (two 18-storey and one 10-storey Office Tower including a 2-storey Retail Mall).

All the residential and office units have been sold and the hotel is managed by Westin Hotel Management, L.P.

SAR1008004_UIC_AR().indb 25 3/31/2011 2:19:10 AM


PROPERTY PORTFOLIO

The Westin TianjinThe Hotel was opened on 8 February 2010. The Westin Tianjin saw good operational performance and had its seven food and beverage outlets setting new benchmark in the city. Within five months of operations, the hotel was awarded “China’s Top 10 Best New Opening Hotels of 2010” by 21st Century Economic Herald on the latter’s 7th Golden-Pillow Award of China hotels in July 2010. The Westin Tianjin is situated in Heping district with 275 guest rooms and 1,250 square metres of meeting space. Average occupancy was at 47% with room rate of RMB 942 for 2010.

The Excellency, ChengduThe 7,566 square metres site is situated very close to the popular Chun Xi shopping belt in Dacisi Road. It has a saleable area of approximately 54,000 square metres with 3,300 square metres of supporting commercial space, comprising two 51-storey residential blocks. Construction of the superstructure for both towers has been completed and the development was successfully launched in March 2010 with 55% sold as at 31 December 2010.

The development which is wholly-owned by the Group is expected to be completed by the first quarter of 2012.

Shanghai Chang Feng Project, ChinaA joint consortium comprising Singland China Holdings Pte. Ltd. (“Singland China”), ( a wholly-owned subsidiary of the Group), UOL Capital Investments Pte Ltd (“UOLC”), a subsidiary of UOL Group Limited and Peak Star Pte Ltd (“PS”), a subsidiary of Kheng Leong Co Pte Ltd, acquired a site in Chang Feng, Shanghai at a purchase price of RMB 2.06 billion. Singland China has 30% shareholding in the joint venture with UOLC holding 40% and the remaining 30% held by PS.

Situated within the Chang Feng Ecological Business Park about 5 km to the north-east of the Hongqiao Transportation Hub and less than 10km from the Bund, the site has a total land area of approximately 39,540 square metres. The proposed mixed-use development comprising residential and retail component has 70 years tenure for the residential and 40 years tenure for the retail component.

Sheraton Tianjin HotelLocated in the Hexi District, south-west of Tianjin city, the Hotel has 296 guest rooms including 56 service apartments. In spite of competition from new international branded hotels, Sheraton Tianjin held its occupancy level at 59% with an average room rate of RMB 824 in 2010. The Group has a 36% interest in the Hotel.

Beijing Landmark TowersThe Group has a 19.95% interest in Beijing Landmark Towers which is a mixed development comprising a hotel, an apartment block and two office towers.

The Group received $0.7 million of dividend from this investment in 2010.

The Westin Tianjin

SAR1008004_UIC_AR().indb 26 3/31/2011 2:19:10 AM


TRADING & SERVICES

INFORMATION TECHNOLOGY

UIC Technologies Pte LtdFor the year ended 31 December 2010, UIC Technologies Group’s (“UICT”) revenue increased by 18% to $63.7 million due to the increase in hardware sales to the corporate sector. However, net profit was flat at $2.1 million as a result of higher operating overheads, and lower sales margin in both the hardware and software sectors.

UICT focused as an IT Solutions and Service Provider in Education, Financial Services, Healthcare, mid-size Enterprise and Public sector. It also offers to both corporate and public sectors, Cloud Computing Deployment Services, Virtualisation Solutions and Security Solutions. To remain competitive, it maintains its accreditation status with key IT vendors including HP, Microsoft, IBM, Lenovo, Dell, Cisco, Symantec and VMware.

ININFOFORMRMATATIOION N TETECHCHNONOLOLOGYGY

SAR1008004_UIC_AR().indb 27 3/31/2011 2:19:20 AM


HUMAN RESOURCE

The Group’s human resource initiatives continue to focus on developing and nurturing our employees to meet the challenges and needs of the property industry.

Employees keep abreast of changing trends and developments in the property sector through training, seminars and overseas trip exposure.

As part of our employee communications programme, employees are updated on staff movement, changes and activities through our regular in-house newsletters.

We continue in our efforts to promote employees wellness with the assistance of the Workplace Health Promotion (WHP) Grant. The Group achieved the

Singapore Health Gold Award on 26 November 2010. This award is given to oganisations by Health Promotion Board in recognition of the commendable Workplace Health Promotion programmes. Physical and mental health talks, weight and health management programmes such as Vertical Challenge, healthy cooking classes and distribution of fruits were organised for employees throughout the year. Such activities also provide opportunities for the building of team spirit and staff bonding.

The Group remains committed in its community support. The Group made donations to social community organisations including participation in the Bull Run 2010, a charity fun run organised by the Stock Exchange of Singapore.

WHP Gold Award

Healthy Cooking

MacRitchie Treetop Walk

Body Sculpt & Aerobics Exercise

SAR1008004_UIC_AR().indb 28 3/31/2011 2:19:26 AM

PROPERTY ACTIVITIES SUMMARYAS AT 31 DECEMBER 2010

ANNUAL REPORT 2010 UNITED INDUSTRIAL CORPORATION LIMITED 29ANNNNUALUAL REREPORPORTT 22010 UNITED INDUSTRIAL CORPORATION LIMITED 29

Site Area(sq metres)

GrossFloor Area(sq metres)

ApproximateNet Floor Area

(sq metres)

CarParking

Lots

CapitalValue($m)

Subsidiary Companies’ Investment Properties

UIC Building#A 40-storey building with 3 levels of car parkingspace located at 5 Shenton Way#proposed to be redeveloped in early 2012

6,778 55,582 36,922 449 659

Stamford CourtA 4-storey commercial building of shops andoffices situated at the junction ofStamford Road and Hill Street

2,072 7,264 5,990 36 84

West MallA 5-storey retail and entertainment complexwith three basements of car parking space,located at Bukit Batok Town Centre

9,890 26,300 17,042 314 365

Singapore Land TowerA 47-storey complex of banks and offices andthree basements of car parking space withfrontages on Raffles Place/Battery Road

5,064 74,215 57,500 288 1345

SGX Centre 2A 29-storey office building with two basements ofcar parking space located at 4 Shenton Way

2,970 36,590 25,800(inclusive of

3,336 sq m in SGX Centre 1)

136 497(UIC Group’s

interest in SGX Centre

1 & 2)

Clifford CentreA 29-storey complex of shops and offices with frontages on both Raffles Place and Collyer Quay

3,343 37,267 25,470 268 482

The GatewayA pair of 37-storey towers with two basements ofcar parking space located at Beach Road

22,381 97,430 69,803 689 1000

ABACUS Plazaand Tampines PlazaA pair of 8-storey office buildings with two basements of car parking space located at Tampines Central 1in the Tampines Finance Park

2,6142,613

10,97010,965

8,3978,397

8779

8383

Marina Square3 Hotels and two investment properties, a 4-storey Retail Mall (comprising fashion boutiques, department store, eating and entertainment outlets, food court, cinemas, bowling alley and car park) and a six-storey office building (Marina Bayfront)

92,197 315,211 206,780 1,990 860(in respect

of retail mall & office building

only)

SAR1008004_UIC_AR().indb 29 3/31/2011 2:19:59 AM

PROPERTY ACTIVITIES SUMMARYAS AT 31 DECEMBER 2010

ANNUAL REPORT 2010 UNITED INDUSTRIAL CORPORATION LIMITED30 ANNUAL REPORT 2010 UNITED INDUSTRIAL CORPOPORATRATIONION LI LIMITMITEDE30

Site Area(sq metres)

GrossFloor Area(sq metres)

ApproximateNet Floor Area

(sq metres)

CarParking

Lots

Capital Value($ m)

Associated Company’s Investment Property

Novena SquareA commercial complex comprising two officetowers of 25 and 18 storeys and a three-storeyretail block located at the junction ofThomson Road and Moulmein Road

16,673 70,010 57,197 491 809

TenureSite Area

(sq metres)

Gross FloorArea

(sq metres)

Actual/ExpectedYear of

TOP

Subsidiary Companies’ Properties Held For Sale

Completed

One AmberA 562-unit condominium at Amber Gardens

Freehold 23,161 64,850 2010*

Grand Duchess at St Patrick’sA 121-unit condominium at St. Patrick’s

Freehold 12,252 18,161 2010*

Tianjin Jun Long SquareA mixed development comprising serviced apartments and three grade-A office towers held for sale and a 38-storey five star hotel with 275 rooms held as property, plant and equipment

Leasehold 13,200 147,000 2010*

Under Development

Park NaturaA 192-unit condominium off Upper Bukit Timah Road

Freehold 19,823 27,748 2011

The Excellency, ChengduTwo towers of 51 storeys each with 3 basement car parks atthe junction of Dacisi Road and Tian Xian Qiao Road North

Leasehold 7,566 77,000 2012

The TrizonA 289-unit condominium at Ridgewood Close

Freehold 18,153 38,122 2013

Associated Company’s Property Held For Sale

The Regency @ Tiong BahruA 158-unit condominium at Tiong Bahru

Freehold 6,129 17,160 2010*

*Actual Year of TOP

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CONTENTS

32Directors’ Report 41

Consolidated Statement of Comprehensive Income

38Independent Auditor’s Report 43

Consolidated Statement of Changes in Equity

37Statement by Directors 42

Balance Sheets

40Consolidated Income Statement 44

Consolidated Cash Flow Statement

46Notes to the Financial Statements

FINANCIAL REPORT

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FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

DIRECTORS’ REPORT

The directors present their report to the members together with the audited financial statements of the Group for the financial year ended 31 December 2010 and the balance sheet of the Company as at 31 December 2010.

DIRECTORS

The directors of the Company in office at the date of this report are:

Wee Cho Yaw (Chairman)John Gokongwei, Jr. (Deputy Chairman)Lim Hock San (President and Chief Executive Officer)Antonio L. GoJames L. GoLance Y. GokongweiGwee Lian KhengHwang Soo JinTan Boon TeikWee Ee LimAlvin Yeo Khirn HaiFrederick D. Go (Alternate to John Gokongwei, Jr.)Patrick O. Ng (Alternate to Lance Y. Gokongwei)

ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES AND DEBENTURES

Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose object was to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate, other than as disclosed under “Share options” of this report.

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DIRECTORS’ REPORT

DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES

(a) According to the register of directors’ shareholdings, none of the directors holding office at the end of the financial year had any interest in the shares or debentures of the Company or related corporations, except as follows:

Holdings registeredin name of director

or nominee

Holdings in whicha director is deemedto have an interest

At 31.12.2010 At 1.1.2010 At 31.12.2010 At 1.1.2010United Industrial Corporation Limited (“UIC”)(Ordinary shares)Wee Cho Yaw 1,857,000 1,857,000 646,427,565 508,131,665John Gokongwei, Jr. – – 495,801,000 487,180,000Lim Hock San 22,000 22,000 – –Hwang Soo Jin 300,000 300,000 – –Tan Boon Teik – – 5,000 5,000

Singapore Land Limited(Ordinary shares)John Gokongwei, Jr. – – 315,327,384 306,232,384Lim Hock San 340,000 340,000 – –

(b) According to the register of directors’ shareholdings, the following director holding office at the end of the financial year had an interest in options to subscribe for ordinary shares of the Company granted pursuant to the United Industrial Corporation Limited Share Option Scheme:

No of unissued ordinary shares of the Company under optionAt 31.12.2010 At 1.1.2010

Lim Hock SanOptions to subscribe ordinary shares at $2.70 per share(Offer dated 5.3.2007) 300,000 300,000Options to subscribe ordinary shares at $2.91 per share(Offer dated 10.3.2008) 150,000 150,000Options to subscribe ordinary shares at $1.07 per share(Offer dated 4.5.2009) 100,000 100,000Options to subscribe ordinary shares at $2.03 per share(Offer dated 26.2.2010) 100,000 –

(c) There was no change in any of the above-mentioned directors’ interests between the end of the financial year and 21 January 2011.

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DIRECTORS’ REPORT

DIRECTORS’ CONTRACTUAL BENEFITS

Since the end of the previous financial year, no director has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member or with a company in which he has a substantial financial interest, except as disclosed in the accompanying financial statements notes 17, 21 and 29.

SHARE OPTIONS

UIC SHARE OPTION SCHEME

(a) The UIC Share Option Scheme (“ESOS”) which was approved by the shareholders of the Company on 18 May 2001, is administered by the Remuneration Committee (“RC”) comprising the following members:

Alvin Yeo Khirn Hai Chairman (Independent)Wee Cho Yaw Member (Non-independent)James L. Go Member (Non-independent)Hwang Soo Jin Member (Independent)Antonio L. Go Member (Independent)

Under the terms of the ESOS, the total number of shares granted shall not exceed 5% of the issued share capital of the Company on the day immediately preceding the offer date of the ESOS. The exercise price is equal to the average of the last done price per share of the Company’s ordinary shares on the Singapore Exchange Securities Trading Limited (“SGX-ST”) for five market days immediately preceding the date of the offer.

(b) The ESOS became operative on 5 March 2007 upon the Company granting options to key executives to subscribe for 2,610,000 ordinary shares of the Company (“2007 Options”). On 10 March 2008 (“2008 Options”) and 4 May 2009 (“2009 Options”), the Company granted options to subscribe for 1,068,000 and 760,000 shares respectively. Particulars of the 2007 Options, 2008 Options and 2009 Options were set out in the Directors’ Reports for respective financial years.

During the financial year, on 26 February 2010 (“Offer Date”), the Company granted 656,000 share options to key executives to subscribe for ordinary shares at the exercise price of $2.03 per ordinary share. The 656,000 options were accepted by key executives, including a director of the Company, Lim Hock San.

The details of the 26 February 2010 options accepted are as follows:

Number of employees

At exercise price of $2.03

per shareExecutive Director 1 100,000Executives 12 556,000

13 656,000

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DIRECTORS’ REPORT

SHARE OPTIONS (continued)

UIC SHARE OPTION SCHEME (continued)

(c) Principal terms of the ESOS are set out below:

(i) only full time confirmed executives of the Company or any of its subsidiary companies (including executive directors) are eligible for the grant of options;

(ii) the ESOS shall be in force at the discretion of the RC subject to a maximum period of 10 years from the date of shareholders’ approval;

(iii) all options granted shall be exercisable, in whole or in part (only in respect of 1,000 shares or any multiple thereof), before the tenth anniversary of the Offer Date and in accordance with the following vesting schedule:

Vesting schedule

Percentage of sharesover which options

are exercisableOn or after the second anniversary of the Offer Date 50%On or after the third anniversary of the Offer Date 25%On or after the fourth anniversary of the Offer Date 25%

The vesting and exercising of vested or unexercised options are governed by conditions set out in the ESOS; and

(iv) participants in the ESOS, shall not, except with the prior approval of the RC in its absolute discretion, be entitled to participate in any other share option schemes or share incentive schemes implemented by companies within or outside the Group. The settlement of options are subject to conditions as set out in the ESOS.

(d) Other information required by SGX-ST:

(i) The details of options granted to a director of the Company, Lim Hock San under the ESOS are as follows:

Granted in the financial year ended 31.12.2010

Aggregate granted since commencement

of ESOS to 31.12.2010

Aggregate exercised since commencement

of ESOS to 31.12.2010

Aggregate outstanding as at 31.12.2010

100,000 650,000 Nil 650,000

(ii) No options have been granted to controlling shareholders or their associates and no participant has received 5% or more of the total options available under the ESOS.

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DIRECTORS’ REPORT

SHARE OPTIONS (continued)

UIC SHARE OPTION SCHEME (continued)

(e) As at the end of the financial year, the following options to acquire ordinary shares in the Company were outstanding:

Date of grant of options

Options outstanding at 1.1.2010

Options granted in 2010

Options exercised

Options cancelled/

lapsed in 2010

Options outstanding

at 31.12.2010

Exercise price per

shareDate of

expiry5.3.2007 2,382,000 – – (336,000) 2,046,000 $2.70 4.3.201710.3.2008 1,068,000 – – (168,000) 900,000 $2.91 9.3.20184.5.2009 760,000 – – (112,000) 648,000 $1.07 3.5.201926.2.2010 – 656,000 – – 656,000 $2.03 25.2.2020

4,210,000 656,000 – (616,000) 4,250,000

(f) During the financial year, no options were granted at a discount and no shares were issued by virtue of the exercise of options to take up unissued shares of the Company.

AUDIT COMMITTEE

The Audit Committee comprises four non-executive directors, namely, Tan Boon Teik (Chairman), James L. Go, Alvin Yeo Khirn Hai and Hwang Soo Jin, majority of whom including the Chairman, are independent directors.

The Audit Committee carried out its functions in accordance with Section 201B(5) of the Companies Act. At a series of meetings convened during the twelve months up to the date of this report, the Audit Committee reviewed reports prepared respectively by the external and the internal auditors and approved proposals for improvements in internal controls. The announcement of quarterly and full year results, the financial statements of the Group and the Independent Auditor’s Report thereon for the full year were also reviewed prior to consideration and approval of the Board.

INDEPENDENT AUDITOR

The independent auditor, PricewaterhouseCoopers LLP, has expressed its willingness to accept re-appointment.

On behalf of the directors

WEE CHO YAW LIM HOCK SANDirector Director

18 February 2011

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STATEMENT BY DIRECTORS

In the opinion of the directors,

(a) the balance sheet of the Company and the consolidated financial statements of the Group as set out on pages 40 to 99 are drawn up so as to give a true and fair view of the state of affairs of the Company and of the Group as at 31 December 2010 and of the results of the business, changes in equity and cash flows of the Group for the financial year then ended; and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

On behalf of the directors

WEE CHO YAW LIM HOCK SANDirector Director

18 February 2011

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TO THE MEMBERS OF UNITED INDUSTRIAL CORPORATION LIMITED

INDEPENDENT AUDITOR’S REPORT

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of United Industrial Corporation Limited (the “Company”) and its subsidiaries (the “Group”) set out on pages 40 to 99, which comprise the consolidated balance sheet of the Group and balance sheet of the Company as at 31 December 2010, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow statement of the Group for the financial year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act (the “Act”) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition, that transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about 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 the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity’s preparation of financial statements that give a true and fair view 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 entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, 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.

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TO THE MEMBERS OF UNITED INDUSTRIAL CORPORATION LIMITED

INDEPENDENT AUDITOR’S REPORT

Opinion

In our opinion, the consolidated financial statements of the Group and balance sheet of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2010, and the results, changes in equity and cash flows of the Group for the financial year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors, have been properly kept in accordance with the provisions of the Act.

PricewaterhouseCoopers LLPPublic Accountants and Certified Public Accountants

Singapore, 18 February 2011

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CONSOLIDATED INCOME STATEMENT

Note 2010 2009$’000 $’000

Revenue 4 972,020 1,010,613Cost of sales 5 (552,155) (588,448)

Gross profit 419,865 422,165

Investment income 6 1,648 4,025Other gains/(losses) – net 263 2,845Selling and distribution costs (20,580) (21,800)Administrative expenses (21,156) (22,943)Finance expenses (9,613) (17,026)Share of results of associated companies 31,903 29,234

402,330 396,500Fair value gain/(loss) on investment properties 15 691,022 (658,464)

Profit/(Loss) before income tax 7 1,093,352 (261,964)

Income tax (expense)/credit 8 (185,539) 77,371

Net profit/(loss) 907,813 (184,593)

Attributable to:Equity holders of the Company 9 703,001 (142,770)Non-controlling interests 204,812 (41,823)

907,813 (184,593)

Basic/Diluted earnings/(loss) per share attributable to equity holders of the Company (expressed in cents per share) 10 51.0 cents (10.4) cents

The accompanying notes form an integral part of these financial statements.

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

2010 2009$’000 $’000

Net profit/(loss) 907,813 (184,593)Other comprehensive (expense)/income taken directly to equity: Net exchange differences on translation of financial statements of foreign entities (6,835) (2,419) Effect of reduction in deferred income tax liability on asset revaluation reserve – 1,629

(6,835) (790)

Total comprehensive income/(expense) 900,978 (185,383)

Total comprehensive income/(expense) attributable to:Equity holders of the Company 698,946 (143,516)Non-controlling interests 202,032 (41,867)

900,978 (185,383)


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AS AT 31 DECEMBER 2010

BALANCE SHEETS

The Group The CompanyNote 2010 2009 2010 2009

$’000 $’000 $’000 $’000ASSETSNon-current assetsOther receivables 11 4,305 16,029 1,057,239 1,101,233Financial assets, available-for-sale 12 12,045 12,045 – –Investments in associated companies 13 233,325 220,138 – –Investments in subsidiary companies 14 – – 1,227,519 1,227,519Investment properties 15 5,458,000 4,597,500 – –Property, plant and equipment 16 491,518 493,071 143 153

6,199,193 5,338,783 2,284,901 2,328,905

Current assetsCash and cash equivalents 17 140,028 162,599 580 805Properties held for sale 18 496,872 892,186 – –Trade and other receivables 19 182,468 45,712 188 250Inventories 2,561 1,727 – –

821,929 1,102,224 768 1,055

Total assets 7,021,122 6,441,007 2,285,669 2,329,960

LIABILITIESCurrent liabilitiesTrade and other payables 20 252,317 195,700 2,294 3,060Current income tax liabilities 8 83,729 49,518 673 724Borrowings 21 649,675 657,545 468,068 516,293

985,721 902,763 471,035 520,077

Non-current liabilitiesTrade and other payables 20 50,245 107,895 19,391 16,697Borrowings 21 114,741 418,295 – –Deferred income tax liabilities 22 582,970 475,936 – –

747,956 1,002,126 19,391 16,697

Total liabilities 1,733,677 1,904,889 490,426 536,774

NET ASSETS 5,287,445 4,536,118 1,795,243 1,793,186

EQUITYCapital and reserves attributable to equity holders of the CompanyShare capital 23 1,400,927 1,400,927 1,400,927 1,400,927Reserves 2,334,662 1,658,498 394,316 392,259

3,735,589 3,059,425 1,795,243 1,793,186Non-controlling interests 1,551,856 1,476,693 – –

TOTAL EQUITY 5,287,445 4,536,118 1,795,243 1,793,186


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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Attributable to equity holders of the Company

Share capital

Retained earnings

Foreign currency reserve

Share option

reserve

Asset revaluation

reserve Total

Non-controlling

interestsTotal

equity$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

2010Balance at 1 January 2010 1,400,927 1,623,342 3,365 2,409 29,382 3,059,425 1,476,693 4,536,118Total comprehensive income/(expense) – 703,001 (4,055) – – 698,946 202,032 900,978Employee share option scheme – value of employee services – – – 205 – 205 – 205Effect of purchase of shares from non-controlling shareholders – 18,337 – – – 18,337 (81,971) (63,634)Dividends paid – (41,324) – – – (41,324) (44,898) (86,222)

Balance at 31 December 2010 1,400,927 2,303,356 (690) 2,614 29,382 3,735,589 1,551,856 5,287,445

2009Balance at 1 January 2009 1,400,927 1,783,003 4,737 1,635 28,756 3,219,058 1,613,304 4,832,362Total comprehensive income/(expense) – (142,770) (1,372) – 626 (143,516) (41,867) (185,383)Employee share option scheme – value of employee services – – – 774 – 774 – 774Effect of purchase of shares from non-controlling shareholders – 24,433 – – – 24,433 (62,747) (38,314)Dividends paid – (41,324) – – – (41,324) (31,997) (73,321)

Balance at 31 December 2009 1,400,927 1,623,342 3,365 2,409 29,382 3,059,425 1,476,693 4,536,118


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CONSOLIDATED CASH FLOW STATEMENT

Note 2010 2009$’000 $’000

Cash flows from operating activitiesProfit/(Loss) before income tax 1,093,352 (261,964)Adjustments for: Depreciation of property, plant and equipment 18,888 11,657 Employee share option expense 205 774 Loss on disposal of property, plant and equipment 725 335 Share of results of associated companies (31,903) (29,234) Fair value (gain)/loss on investment properties (691,022) 658,464 Investment income 6 (1,648) (4,025) Interest expense 9,613 17,026

Operating cash flow before working capital changes 398,210 393,033

Change in operating assets and liabilities: Properties held for sale 399,776 137,116 Inventories (834) 1,048 Trade and other receivables (136,795) (13,444) Trade and other payables 2,631 25,716

Cash generated from operations 662,988 543,469

Interest paid (18,903) (31,081)Income tax paid (43,735) (34,792)

Net cash provided by operating activities 600,350 477,596

Cash flows from investing activitiesPurchase of property, plant and equipment (23,889) (107,554)Proceeds from disposal of property, plant and equipment 55 7Upgrading of investment properties (8,552) (7,527)Redevelopment of an investment property (160,556) –Investment in an associated company (25,425) –Repayment of loans by associated companies 10,939 10,549Dividends received from unquoted equity investments 822 2,707Dividends received from associated companies 42,841 28,280Interest received 2,124 3,779

Net cash used in investing activities (161,641) (69,759)


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CONSOLIDATED CASH FLOW STATEMENT

Note 2010 2009$’000 $’000

Cash flows from financing activitiesRepayment of borrowings (311,424) (277,628)Proceeds from borrowings – 21,916Purchase of shares from non-controlling shareholders (63,634) (38,314)Dividends paid to shareholders (41,324) (41,324)Dividends paid to non-controlling shareholders (44,898) (31,997)

Net cash used in financing activities (461,280) (367,347)

Net (decrease)/increase in cash and cash equivalents (22,571) 40,490Cash and cash equivalents at beginning of financial year 162,599 122,109

Cash and cash equivalents at end of financial year 17 140,028 162,599


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NOTES TO THE FINANCIAL STATEMENTS

These notes form an integral part of and should be read in conjunction with the accompanying financial statements.

1. GENERAL INFORMATION

United Industrial Corporation Limited (the “Company”) is incorporated and domiciled in Singapore. The address of its registered office is 5 Shenton Way, #02-16, Podium Block UIC Building, Singapore 068808.

The Company is listed on the Singapore Exchange.

The principal activity of the Company is that of an investment holding company. The principal activities of the Group consist of development of properties for investment and trading, investment holding, property management, investment in hotels and retail centres, trading in computers and related products, and provision of information technology services.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”). The financial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below.

The preparation of financial statements in conformity with FRS requires management to exercise its judgement in the process of applying the Group’s accounting policies. It also requires the use of accounting estimates and assumptions. Areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 3.

Amendments to published standards effective in 2010

On 1 January 2010, the Group adopted the new or amended FRS that are mandatory for application from that date. Changes to the Group’s accounting policies have been made as required, in accordance with the transitional provisions in the respective FRS.

The adoption of these new or amended FRS did not result in substantial changes to the Group’s and Company’s accounting policies and had no effect on the amounts reported for the current or prior financial years.

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2. SIGNIFICANT ACCOUNTING POLICIES (continued)

2.1 Basis of preparation (continued)

Interpretation to published standards early adopted by the Group

The Singapore Accounting Standards Council (ASC) has issued INT FRS 115 Agreements for the Construction of Real Estate, with an Accompanying Note to be read in conjunction with INT FRS 115. INT FRS 115 applies for annual periods beginning on or after 1 January 2011. The Group has elected to early adopt this interpretation for the financial year beginning 1 January 2010.

Prior to the adoption of INT FRS 115, revenue from sales of properties held for sale were recognised using the percentage of completion method.

Upon adoption of INT FRS 115, revenue from sale of Singapore residential properties held for sale continues to be recognised on a percentage of completion method. For the sale of overseas properties held for sale, revenue is generally recognised only upon completion of construction. For the Group’s sole overseas development property, The Excellency, the revenue from sale is recognised only upon completion of construction of the project.

The early adoption of INT FRS 115 did not result in any material effect on the amounts reported for the prior financial years.

The effects to the balance sheet and income statement items are as follows:

Increase/(Decrease)

$’000Consolidated balance sheet as at 31 December 2010:Properties held for sale 44,118Trade and other payables – current 45,790Retained earnings (1,276)Non-controlling interests (396)

Consolidated income statement for the financial year ended 31 December 2010:Revenue (45,790)Cost of sales (44,118)Non-controlling interests (396)

Basic and diluted earnings per share for the financial year ended 31 December 2010 (cents per share) (0.1) cents

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2.2 Revenue recognition

Revenue comprises the fair value of consideration received or receivable for the sale of goods and rendering of services, net of goods and services tax, rebates and discounts after eliminating revenue within the Group.

The Group recognises revenue when the amount of revenue and related cost can be reliably measured, it is probable that the collectibility of the related receivables is reasonably assured and when the specific criteria for each of the Group’s activities are met as follows:

(a) Rental income

Rental income from operating leases (net of any incentives given to the lessees) on investment properties is recognised on a straight-line basis over the lease term.

(b) Revenue on sale of properties held for sale

Revenue from sale of properties held for sale is recognised on the transfer of significant risks and rewards of ownership to the purchasers.

For sales of uncompleted residential properties in Singapore, the transfer of significant risks and rewards of ownership occurs in the current state as construction progresses. Revenue is recognised by reference to the stage of completion using the percentage of completion method, determined by the level of construction costs incurred as a proportion of the estimated total construction costs to completion.

For sales of overseas development properties, such transfer generally occurs when the property units are completed and delivered to the purchasers. Revenue is recognised upon completion of construction.

(c) Revenue from hotel operations

Revenue from the rental of hotel rooms and other facilities is recognised when the services are rendered. Revenue from the sale of food and beverage is recognised when the goods are delivered to the customer.

(d) Revenue from information technology operations

Revenue from sale of computer hardware and software is recognised when the Group has transferred significant risks and rewards of ownership of the products to the customer on delivery and the customer has accepted the products. Revenue from the rendering of services is recognised when the service is rendered, by reference to completion of specific transaction assessed on the basis of the actual service provided as a proportion to the total services to be performed.

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2.2 Revenue recognition (continued)

(e) Property management fees

Property management fees are recognised on a straight-line basis over the contract term.

(f) Interest income

Interest income is recognised on a time proportion basis using the effective interest method.

(g) Dividend income

Dividend income is recognised when the right to receive payment is established.

(h) Car parking income

Car parking income is recognised on a straight-line basis based on time proportion.

2.3 Group accounting

(a) Subsidiary companies

(i) Consolidation

Subsidiary companies are entities over which the Group has power to govern the financial and operating policies so as to obtain benefits from its activities, generally accompanied by a shareholding giving rise to the majority of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiary companies are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases.

In preparing the consolidated financial statements, transactions, balances and unrealised gains on transactions between group entities are eliminated. Unrealised losses are also eliminated but are considered an impairment indicator of the asset transferred. Accounting policies of subsidiary companies have been changed where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests are that part of the net results of operations and of net assets of a subsidiary company attributable to the interests which are not owned directly or indirectly by the equity holders of the Company. They are shown separately in the consolidated statement of comprehensive income, statement of changes in equity and balance sheet. Total comprehensive income is attributed to the non-controlling interests based on their respective interests in a subsidiary company, even if this results in the non-controlling interests having a deficit balance.

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2.3 Group accounting (continued)

(a) Subsidiary companies (continued)

(ii) Acquisition of businesses

The acquisition method of accounting is used to account for business combinations by the Group.

The consideration transferred for the acquisition of a subsidiary company comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration arrangement and fair value of any pre-existing equity interest in the subsidiary company.

Acquisition-related costs are expensed as incurred.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.

On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree at the date of acquisition either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary company acquired and the measurement of all amounts have been reviewed, the difference is recognised directly in the income statement as a bargain purchase. Please refer to the paragraph “Goodwill on acquisitions” for the subsequent accounting policy on goodwill.

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(a) Subsidiary companies (continued)

(iii) Disposals of subsidiary companies or businesses

When a change in the Company’s ownership interest in a subsidiary company results in a loss of control over the subsidiary company, the assets and liabilities of the subsidiary company including any goodwill are derecognised. Amounts recognised in other comprehensive income in respect of that entity are also reclassified to the income statement or transferred directly to retained earnings if required by a specific Standard.

Any retained interest in the entity is remeasured at fair value. The difference between the carrying amount of the retained investment at the date when control is lost and its fair value is recognised in the income statement.

Please refer to the paragraph “Investments in subsidiary and associated companies” for the accounting policy on investments in subsidiary companies in the separate financial statements of the Company.

(b) Transactions with non-controlling interests

Changes in the Company’s ownership interest in a subsidiary company that do not result in a loss of control over the subsidiary company are accounted for as transactions with equity owners of the Group. Any difference between the change in the carrying amounts of the non-controlling interest and the fair value of the consideration paid or received is recognised in retained earnings within equity attributable to the equity holders of the Company.

(c) Associated companies

Associated companies are entities over which the Group has significant influence, but not control, generally accompanied by a shareholding giving rise to voting rights of 20% and above but not exceeding 50%. Investments in associated companies are accounted for in the consolidated financial statements using the equity method of accounting less impairment losses, if any.

Investments in associated companies are initially recognised at cost. The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Goodwill on associated companies represents the excess of the cost of acquisition of the associate over the Group’s share of the fair value of the identifiable net assets of the associate and is included in the carrying amount of the investments.

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(c) Associated companies (continued)

In applying the equity method of accounting, the Group’s share of its associated companies’ post-acquisition profits or losses are recognised in the income statement and its share of post-acquisition other comprehensive income is recognised in other comprehensive income. These post-acquisition movements and distributions received from the associated companies are adjusted against the carrying amount of the investment. When the Group’s share of losses in an associated company equals or exceeds its interest in the associated company, including any other unsecured non-current receivables, the Group does not recognise further losses, unless it has obligations or has made payments on behalf of the associated company.

Unrealised gains on transactions between the Group and its associated companies are eliminated to the extent of the Group’s interest in the associated companies. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Where necessary, adjustments are made to the financial statements of associated companies to ensure consistency of accounting policies with those of the Group.

Gains and losses arising from partial disposals or dilutions in investments in associated companies are recognised in the income statement.

Investments in associated companies are derecognised when the Group loses significant influence. Any retained interest in the entity is remeasured at its fair value. The difference between the carrying amount of the retained investment at the date when significant influence is lost and its fair value is recognised in the income statement.

Please refer to the paragraph “Investments in subsidiary and associated companies” for the accounting policy on investments in associated companies in the separate financial statements of the Company.

2.4 Property, plant and equipment

(a) Measurement

Property, plant and equipment are initially recognised at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment losses.

The cost of an item of property, plant and equipment initially recognised includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

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2.4 Property, plant and equipment (continued)

(b) Depreciation

Renovations in progress is not depreciated. Depreciation is calculated using the straight-line method to allocate the depreciable amounts of property, plant and equipment over their estimated useful lives as follows:

Leasehold land and building 45 – 93 yearsPlant and machinery 10 – 15 yearsFurniture, fittings and office equipment 5 – 13 yearsMotor vehicles 5 years

The residual values, estimated useful lives and depreciation method of property, plant and equipment are reviewed, and adjusted as appropriate, at each balance sheet date. The effects of any revision are recognised in the income statement when the changes arise.

(c) Subsequent expenditure

Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset 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. All other repair and maintenance expenses are recognised in the income statement when incurred.

(d) Disposal

On disposal of an item of property, plant and equipment, the difference between the disposal proceeds and its carrying amount is recognised in the income statement.

2.5 Goodwill on acquisitions

Goodwill on acquisitions of subsidiary companies represents the excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the net identifiable assets acquired.

Goodwill on subsidiary companies is recognised separately as intangible assets and carried at cost less accumulated impairment losses.

Goodwill on associated companies is included in the carrying amount of the investments.

Gains and losses on the disposal of subsidiary and associated companies include the carrying amount of goodwill relating to the entity sold.

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2.6 Borrowing costs

Borrowing costs are recognised in the income statement using the effective interest method except for those costs that are directly attributable to the construction or development of properties. This includes those costs on borrowings acquired specifically for the construction or development of properties, as well as those in relation to general borrowings used to finance the construction or development of properties.

The actual borrowing costs incurred during the period up to the issuance of the temporary occupation permit less any investment income on temporary investments of these borrowings, are capitalised in the cost of the properties held for sale and investment properties. Borrowing costs on general borrowings are capitalised by applying a capitalisation rate to construction or development expenditures that are financed by general borrowings.

2.7 Properties held for sale

Properties held for sale are those which are intended for sale in the ordinary course of business. They include completed properties and properties in the course of development. Unsold properties are stated at the lower of cost and estimated net realisable value. Net realisable value represents the estimated selling price less costs to be incurred in selling the property. When it is probable that the total development costs will exceed the total revenue, the expected loss is recognised as an expense immediately. Cost of properties held for sale includes land, construction and related development costs and interest on borrowings obtained to finance the purchase and construction of the properties.

Singapore properties held for sale are stated at cost plus attributable profits/losses less progress billings. Progress billings not yet paid by customers are included within “trade and other receivables”.

Overseas properties held for sale are stated at cost and payments received from purchasers prior to completion are included in current liabilities as “monies received in advance”.

2.8 Investment properties

Investment properties of the Group, principally comprising office buildings, are held for long-term rental yields and capital appreciation. Investment properties include properties that are being constructed or developed for future use as investment properties.

Investment properties are initially recognised at cost and subsequently carried at fair value, representing the open market value determined by independent professional valuers. Changes in fair values are recognised in the income statement.

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2.8 Investment properties (continued)

Investment properties are subject to renovations or improvements at regular intervals. The cost of major renovations and improvements is capitalised. The cost of maintenance, repairs and minor improvement is recognised in the income statement when incurred.

On disposal of an investment property, the difference between the disposal proceeds and its carrying amount is recognised in the income statement.

2.9 Investments in subsidiary and associated companies

Investments in subsidiary and associated companies are carried at cost less accumulated impairment losses in the Company’s balance sheet. On disposal of investment in subsidiary and associated companies, the difference between disposal proceeds and its carrying amount is recognised in the income statement.

2.10 Impairment of non-financial assets

(a) Goodwill

Goodwill recognised separately as an intangible asset is tested for impairment annually and whenever there is indication that the goodwill may be impaired.

For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cash-generating-units (“CGU”) expected to benefit from synergies arising from the business combination.

An impairment loss is recognised when the carrying amount of a CGU, including the goodwill, exceeds the recoverable amount of the CGU. The recoverable amount of a CGU is the higher of the CGU’s fair value less cost to sell and value-in-use.

The total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU.

An impairment loss on goodwill is recognised as an expense and is not reversed in a subsequent period.

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2.10 Impairment of non-financial assets (continued)

(b) Intangible assetsProperty, plant and equipmentInvestments in subsidiary and associated companies

Intangible assets, property, plant and equipment and investments in subsidiary and associated companies are tested for impairment whenever there is any objective evidence or indication that these assets may be impaired.

For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash inflows that are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the CGU to which the asset belongs.

If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount.

The difference between the carrying amount and recoverable amount is recognised as an impairment loss in the income statement, unless the asset is carried at revalued amount, in which case, such impairment loss is treated as a revaluation decrease.

An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of this asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of accumulated amortisation or depreciation) had no impairment loss been recognised for the asset in prior years.

A reversal of impairment loss for an asset other than goodwill is recognised in the income statement, unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase. However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense, a reversal of that impairment is also credited to the income statement.

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2.11 Financial assets

(a) Classification

The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, held-to-maturity, and available-for-sale. The classification depends on the nature of the asset and the purpose for which the assets were acquired. Management determines the classification of its financial assets at initial recognition.

(i) Financial assets, at fair value through profit or loss

This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit or loss at inception. A financial asset is classified as held for trading if it is acquired principally for the purpose of selling in the short term. Financial assets designated as at fair value through profit or loss at inception are those that are managed and their performances are evaluated on a fair value basis, in accordance with a documented Group investment strategy. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are presented as current assets if they are either held for trading or are expected to be realised within 12 months after the balance sheet date.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are presented as current assets, except for those expected to be realised later than 12 months after the balance sheet date which are presented as non-current assets. Loans and receivables are presented as “trade and other receivables” and “cash and cash equivalents” on the balance sheet.

(iii) Financial assets, held-to-maturity

Financial assets, held-to-maturity are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group’s management has the positive intention and ability to hold to maturity. If the Group were to sell other than an insignificant amount of held-to-maturity financial assets, the whole category would be tainted and reclassified as available-for-sale. They are presented as non-current assets, except for those maturing within 12 months after the balance sheet date which are presented as current assets.

(iv) Financial assets, available-for-sale

Financial assets, available-for-sale are non-derivatives that are either designated in this category or not classified in any of the other categories. They are presented as non-current assets unless management intends to dispose of the assets within 12 months after the balance sheet date.

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2.11 Financial assets (continued)

(b) Recognition and derecognition

Regular way purchases and sales of financial assets are recognised on trade-date – the date on which the Group commits to purchase or sell the asset.

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. On disposal of a financial asset, the difference between the carrying amount and the sale proceeds is recognised in the income statement. Any amount in the fair value reserve relating to that asset is reclassified to the income statement.

(c) Initial measurement

Financial assets are initially recognised at fair value plus transaction costs except for financial assets at fair value through profit or loss, which are recognised at fair value. Transaction costs for financial assets at fair value through profit and loss are recognised immediately as expenses.

(d) Subsequent measurement

Financial assets, both available-for-sale and at fair value through profit or loss are subsequently carried at fair value. Loans and receivables and financial assets, held-to-maturity are subsequently carried at amortised cost using the effective interest method.

Changes in the fair values of financial assets, at fair value through profit or loss including the effects of currency translation, interest and dividends, are recognised in the income statement when the changes arise.

Interest and dividend income on financial assets, available-for-sale are recognised separately in income. Changes in the fair values of available-for-sale debt securities (i.e. monetary items) denominated in foreign currencies are analysed into currency translation differences on the amortised cost of the securities and other changes; the currency translation differences are recognised in the income statement and the other changes are recognised in the fair value reserve. Changes in fair values of available-for-sale equity securities (i.e. non-monetary items) are recognised in the fair value reserve, together with the related currency translation differences.

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2.11 Financial assets (continued)

(e) Impairment

The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired and recognises an allowance for impairment when such evidence exists.

(i) Loans and receivables/Financial assets, held-to-maturity

Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy, and default or significant delay in payments are objective evidence that these financial assets are impaired.

The carrying amount of these assets is reduced through the use of an impairment allowance account which is calculated as the difference between the carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. When the asset becomes uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are recognised against the same line item in the income statement.

The allowance for impairment loss account is reduced through the income statement in a subsequent period when the amount of impairment loss decreases and the related decrease can be objectively measured. The carrying amount of the asset previously impaired is increased to the extent that the new carrying amount does not exceed the amortised cost had no impairment been recognised in prior periods.

(ii) Financial assets, available-for-sale

In addition to the objective evidence of impairment described in note 2.11(e)(i), a significant or prolonged decline in the fair value of an equity security below its cost is considered as an indicator that the available-for-sale financial asset is impaired.

If any evidence of impairment exists, the cumulative loss that was recognised in the fair value reserve is reclassified to the income statement. The cumulative loss is measured as the difference between the acquisition cost (net of any principal repayments and amortisation) and the current fair value, less any impairment loss previously recognised as an expense. The impairment losses recognised as an expense on equity securities are not reversed through the income statement.

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2.12 Borrowings

Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement for at least 12 months after the balance sheet date.

Borrowings are initially recognised at fair value (net of transaction costs) and subsequently carried at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.

2.13 Trade and other payables

Trade and other payables are initially recognised at fair value, and subsequently carried at amortised cost using the effective interest method.

2.14 Fair value estimation of financial assets and liabilities

The fair values of financial instruments traded in active markets (such as exchange-traded and over-the-counter securities and derivatives) are based on quoted market prices at the balance sheet date. The quoted market prices used for financial assets are the current bid prices; the appropriate quoted market prices for financial liabilities are the current asking prices.

The fair values of financial instruments that are not traded in an active market are determined by using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. Where appropriate, quoted market prices or dealer quotes for similar instruments are used. Valuation techniques, such as discounted cash flows analyses, are also used to determine the fair values of the financial instruments.

The fair values of current financial assets and liabilities carried at amortised cost approximate their carrying amounts.

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2.15 Leases

(a) Operating leases – when the Group is the lessee

Leases where substantially all risks and rewards incidental to ownership are retained by the lessors are classified as operating leases. Payments made under operating leases are recognised in the income statement on a straight-line basis over the period of the lease.

(b) Operating leases – when the Group is the lessor

Leases of investment properties where the Group retains substantially all risks and rewards incidental to ownership are classified as operating leases. Rental income from operating leases (net of any incentives given to the lessees) is recognised in the income statement on a straight-line basis over the lease term.

Contingent rents are recognised as income in the income statement when earned.

2.16 Inventories

Inventories are carried at the lower of cost and net realisable value. Cost is determined on a weighted average basis and includes all costs in bringing the inventories to their present location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses.

2.17 Income taxes

Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction.

A deferred income tax liability is recognised on temporary differences arising on investments in subsidiary and associated companies, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

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2.17 Income taxes (continued)

A deferred income tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilised.

Under FRS 12 – Income Taxes, where the recovery of the carrying amount of leasehold properties is through receipt of rental income over the remaining useful lives of the properties (“recovery through use”), deferred income tax liability is to be provided on the fair value gains of these properties at the tax rates which the underlying rental income would be subject to. Deferred income tax liability is released to the income statement over the remaining useful lives of the properties as the underlying rental income is earned and fair value gains reversed.

Under FRS 12, where the recovery of the carrying amount of leasehold properties is through disposal (“recovery through sale”), deferred income tax liability on the fair value gains is to be computed based on the tax rates that are applicable upon disposal of the properties. As there is currently no capital gains tax in Singapore, where the fair value gains of the Group’s Singapore investment properties are considered capital gains by the Singapore tax authority, no deferred income tax liability would be provided on these fair value gains.

Deferred income tax is measured:

(i) at the tax rates that are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date; and

(ii) based on the tax consequence that will follow from the manner in which the Group expects, at the balance sheet date, to recover or settle the carrying amounts of its assets and liabilities.

Current and deferred income taxes are recognised as income or expense in the income statement, except to the extent that the tax arises from a business combination or a transaction which is recognised directly in equity. Deferred income tax arising from a business combination is adjusted against goodwill on acquisition.

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2.18 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated.

Provisions are measured at the present value of the expenditure expected to be required to settle the obligation using a pre-tax discount rate that reflects the current market assessment of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as finance expense.

Changes in the estimated timing or amount of the expenditure or discount rate are recognised in the income statement when the changes arise.

2.19 Employee compensation

The Group’s contributions are recognised as employee compensation expense when they are due.

(a) Defined contribution plans

Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities such as the Central Provident Fund. The Group has no further payment obligations once the contributions have been paid.

(b) Share-based compensation

The Group operates an equity-settled, share-based compensation plan. The fair value of the employee services received in exchange for the grant of options is recognised as an expense with a corresponding increase in the share option reserve over the vesting period. The total amount to be recognised over the vesting period is determined by reference to the fair value of the options granted on the date of the grant. Non-market vesting conditions are included in the estimation of the number of shares under options that are expected to become exercisable on the vesting date. At each balance sheet date, the Group revises its estimates of the number of shares under options that are expected to become exercisable on the vesting date and recognises the impact of the revision of the estimates in the income statement, with a corresponding adjustment to the share option reserve over the remaining vesting period.

When the options are exercised, the proceeds received (net of transaction costs) and the related balance previously recognised in the share option reserve are credited to share capital account, when new ordinary shares are issued.

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2.20 Currency translation

(a) Functional and presentation currency

Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The financial statements are presented in Singapore Dollars, which is the functional currency of the Company.

(b) Transactions and balances

Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates at the dates of the transactions. Currency translation differences resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates at the balance sheet date are recognised in the income statement, unless they arise from borrowings in foreign currencies, other currency instruments designated and qualifying as net investment hedges and net investment in foreign operations. Those currency translation differences are recognised in the currency translation reserve in the consolidated financial statements and transferred to the income statement as part of the gain or loss on disposal of the foreign operation.

Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates at the date when the fair values are determined.

(c) Translation of Group entities’ financial statements

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i) assets and liabilities are translated at the closing exchange rates at the date of the balance sheet;

(ii) income and expenses are translated at average exchange rates (unless the average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rates at the dates of the transactions); and

(iii) all resulting currency translation differences are recognised in the currency translation reserve.

Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after 1 January 2005 are treated as assets and liabilities of the foreign operations and translated at the closing rates at the date of the balance sheet. For acquisitions prior to 1 January 2005, the exchange rates at the dates of acquisition are used.

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2.21 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the management who are responsible for allocating resources and assessing performance of the operating segments.

2.22 Cash and cash equivalents

For the purpose of presentation in the consolidated cash flow statement, cash and cash equivalents include cash on hand, deposits with financial institutions which are subject to an insignificant risk of change in value, and bank overdrafts. Bank overdrafts are presented as current borrowings on the balance sheet.

2.23 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against the share capital account.

2.24 Dividends to Company’s shareholders

Dividends to Company’s shareholders are recognised when the dividends are approved for payment.

3. CRITICAL ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGEMENTS

Estimates and judgements 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.

The Group on its own or in reliance on third party experts, applies estimates and judgements in the following key areas:

(i) the determination of investment property values by independent professional valuers (note 2.8). The carrying amount of investment properties is disclosed in note 15;

(ii) the assessment of the stage of completion, extent of the construction costs incurred and the estimated total construction costs of properties for sale under development (note 2.2(b)). The carrying amount of properties for sale under development is disclosed in note 18; and

(iii) the assessment of adequacy of provision for income taxes (note 2.17). The carrying amounts of current income tax and deferred income tax are disclosed in note 8 and 22 respectively.

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4. REVENUE

The Group2010 2009

$’000 $’000

Gross rental income 297,360 310,309Gross revenue from hotel operations 124,341 90,469Sale of properties held for sale 478,184 547,529Gross revenue from information technology operations 63,677 54,006Car parking income and property management fees 8,458 8,300

972,020 1,010,613

5. COST OF SALES

The Group2010 2009

$’000 $’000

Property operating expenses 68,492 74,923Cost of sales from hotel operations 89,708 60,484Cost of properties held for sale sold 338,254 407,023Cost of sales from information technology operations 55,701 46,018

552,155 588,448

6. INVESTMENT INCOME

The Group2010 2009

$’000 $’000Interest income from: – Bank deposits 188 605 – Amounts due from associated companies 47 285 – Others 591 428

826 1,318

Dividend income from unquoted equity investments 822 2,707

1,648 4,025

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7. PROFIT/(LOSS) BEFORE INCOME TAX

The following items have been included in arriving at profit/(loss) before income tax:

The Group2010 2009

$’000 $’000Charging/(Crediting):Auditor’s remuneration paid/payable to: – Auditors of the Company 594 554 – Other auditors* 111 103Other fees paid/payable to auditors of the Company 205 247

Wages, salaries and other payroll-related costs 54,015 43,209Employer’s contribution to defined contribution plans 5,274 4,201Share option expense 205 774

Total employee compensation 59,494 48,184Rental expense – operating leases 1,113 1,035Loss on disposal of property, plant and equipment 725 335Depreciation of property, plant and equipment 18,888 11,657Foreign exchange gain – net (255) (169)Property tax 24,481 29,850Utilities 13,542 15,518Interest expense on loans 9,613 17,026Cost of inventories recognised as an expense 65,323 52,787

* Includes PricewaterhouseCoopers firms outside Singapore

8. INCOME TAXES

(a) Income tax expense/(credit)

The Group2010 2009

$’000 $’000Tax expense/(credit) attributable to profit/(loss) is made up of: – Current income tax (note (b)) 48,851 44,569 – Deferred income tax 133,569 (117,343)

182,420 (72,774)

Under/(Over)provision in preceding financial years – Current income tax (note (b)) (1,557) 375 – Deferred income tax (note 22) 4,676 (4,972)

3,119 (4,597)

185,539 (77,371)

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8. INCOME TAXES (continued)

(a) Income tax expense/(credit) (continued)

The tax expense/(credit) on profit/(loss) differs from the amount that would arise using the Singapore standard rate of income tax as explained below:

The Group2010 2009

$’000 $’000

Profit/(Loss) before income tax 1,093,352 (261,964)Less: Share of results of associated companies (31,903) (29,234)

1,061,449 (291,198)

Tax calculated at a statutory tax rate of 17% 180,446 (49,504)Effects of: – Change in Singapore tax rate (note 22) – (30,643) – Different tax rates in other countries (468) 989 – Singapore statutory tax exemption (445) (491) – Expenses not deductible for tax purposes 5,794 4,783 – Income not subject to tax (749) (448) – Utilisation of previously unrecognised deferred income tax assets (2,825) – – Deferred income tax assets not recognised 762 2,538 – Others (95) 2

Tax expense/(credit) 182,420 (72,774)

(b) Movements in current income tax liabilities

The Group The Company2010 2009 2010 2009

$’000 $’000 $’000 $’000

Beginning of financial year 49,518 39,366 724 200Currency translation difference (553) – – –Income tax (paid)/refunded (43,735) (34,792) (63) 451Tax expense on profit for the current financial year (note (a)) 48,851 44,569 12 73(Over)/Underprovision in preceding financial years (note (a)) (1,557) 375 – –Transfer from deferred income tax liabilities (note 22) 31,205 – – –

End of financial year 83,729 49,518 673 724

(c) There is no tax charge relating to the components of other comprehensive income.

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9. NET ATTRIBUTABLE PROFIT/(LOSS)

The net profit/(loss) attributable to equity holders of the Company can be analysed as follows:

The Group2010 2009

$’000 $’000Net profit before fair value gain/(loss) on investment properties (note 10) 237,014 240,824Fair value gain/(loss) on investment properties held by subsidiary and associated companies net of deferred income tax and non-controlling interests included in:

– Fair value gain/(loss) on investment properties 691,022 (658,464) – Share of results of associated companies 6,351 (9,009) – Deferred income tax (115,063) 138,009 – Non-controlling interests (116,323) 145,870

465,987 (383,594)

Net attributable profit/(loss) 703,001 (142,770)

10. EARNINGS/(LOSS) PER SHARE

Basic earnings per share is calculated by dividing the net profit/(loss) attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the financial year.

Diluted earnings per share amounts are calculated by dividing the net profit/(loss) attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all dilutive potential shares into ordinary shares. The Company’s dilutive potential ordinary shares are its share options.

The weighted average number of shares in issue is adjusted as if all share options that are dilutive were exercised. The number of shares that could have been issued upon the exercise of all dilutive share options less the number of shares that could have been issued at fair value (determined as the Company’s average share price for the financial year) for the same total proceeds is added to the denominator as the number of shares was issued for no consideration. No adjustment is made to the net profit.

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10. EARNINGS/(LOSS) PER SHARE (continued)

The Group2010 2009

Net profit/(loss) attributable to equity holders of the Company ($’000) 703,001 (142,770)

Weighted average number of ordinary shares in issue for basic earnings per share (’000) 1,377,481 1,377,481Adjustment for share options (’000) 289 67

Weighted average number of ordinary shares in issue for diluted earnings per share (’000) 1,377,770 1,377,548

Basic and diluted earnings/(loss) per share (cents per share) – ex cluding fair value gain/loss on investment properties held

by subsidiary and associated companies (note 9) 17.2 cents 17.5 cents – in cluding fair value gain/loss on investment properties held

by subsidiary and associated companies 51.0 cents (10.4) cents

11. OTHER RECEIVABLES


$’000 $’000 $’000 $’000Amounts due from:– associated companies (note (a)) 3,799 15,548 3,072 3,067

– subsidiary companies (note (b)) – – 1,069,565 1,184,268Less: Allowance for impairment in value of receivables – – (15,559) (86,263)

– – 1,054,006 1,098,005Others 506 481 161 161

4,305 16,029 1,057,239 1,101,233

(a) Amounts due from associated companies

The amounts due from associated companies for the Group are unsecured, not repayable within the next 12 months and are interest-free except for amounts totalling $727,000 (2009: $12,481,000) which are interest-bearing at floating rate.

The amount due from an associated company for the Company is unsecured, not repayable within the next 12 months and is interest-free.

At the balance sheet date, the carrying amounts of amounts due from associated companies approximate their fair values.

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11. OTHER RECEIVABLES (continued)

(b) Amounts due from subsidiary companies

The amounts due from subsidiary companies are unsecured, not repayable within the next 12 months and are interest-free except for amounts totalling $790,771,000 (2009: $790,750,000) which are interest-bearing. At the balance sheet date, the carrying amounts of amounts due from subsidiary companies approximate their fair values. Interest is charged on amounts due from certain subsidiary companies and is based on interest incurred by the Company in respect of bank loans obtained on behalf of these subsidiary companies.

The decrease in impairment charge during the financial year was a result of liquidation of certain subsidiary companies.

12. FINANCIAL ASSETS, AVAILABLE-FOR-SALE

The Group2010 2009

$’000 $’000

Unquoted equity investments 12,045 12,045

13. INVESTMENTS IN ASSOCIATED COMPANIES

The Group2010 2009

$’000 $’000

Unquoted equity investments, at cost 183,059 157,634Share of post acquisition reserves 50,266 62,504

233,325 220,138

The summarised financial information of associated companies, not adjusted for the proportion ownership interest held by the Group, is as follows: – Assets 1,357,005 1,391,594 – Liabilities 545,782 668,921 – Revenues 237,647 419,159 – Net profit 99,299 75,460

Details of associated companies are included in note 34.

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14. INVESTMENTS IN SUBSIDIARY COMPANIES

The Company2010 2009

$’000 $’000

Unquoted equity investments, at cost 1,229,212 1,229,212Less: Allowance for impairment in value of investments (1,693) (1,693)

1,227,519 1,227,519

Details of subsidiary companies are included in note 34.

15. INVESTMENT PROPERTIES

The Group2010 2009

$’000 $’000Completed leasehold properties, at valuation:Beginning of financial year 4,597,500 5,227,350Reclassify from development property – 21,469Redevelopment of an investment property 160,926 –Upgrading 8,552 7,145Fair value gain/(loss) 691,022 (658,464)

End of financial year 5,458,000 4,597,500

Development property:Beginning of financial year – 21,087Additions – 382Reclassify to completed leasehold properties – (21,469)

End of financial year – –

5,458,000 4,597,500

Borrowing costs of $370,000 (2009: $nil), arising from financing specifically entered into for the redevelopment of an investment property, were capitalised during the financial year. A capitalisation rate of 1.1% to 1.2% per annum was used in 2010, representing the borrowing costs of the loans used to finance the project.

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15. INVESTMENT PROPERTIES (continued)

The Group’s completed investment properties consist of the following:

Name of building/location Description Tenure of land

Unexpired term of lease

UIC Building5 Shenton WaySingapore 068808

40-storey office building on a land area of 6,778 square metres. The net area in this building is 36,922 square metres. The building is proposed to be redeveloped into a commercial and residential development based on a 60% residential and 40% commercial scheme in early 2012.

99-year lease from 1969

58 years

Stamford Court61 Stamford RoadSingapore 178892

4-storey office building with shops on a land area of 2,072 square metres. The net area in this building is 5,990 square metres.


83 years

West Mall1 Bukit Batok Central LinkSingapore 658713

Retail and family entertainment complex on a land area of 9,890 square metres. The net area in this complex is 17,042 square metres.


84 years

Singapore Land Tower50 Raffles PlaceSingapore 048623

47-storey office building on a land area of 5,064 square metres. The net area in this building is 57,500 square metres.


815 years

Clifford Centre24 Raffles PlaceSingapore 048621

29-storey shopping cum office building on a land area of 3,343 square metres. The net area in this building is 25,470 square metres.


815 years

The Gateway150/152 Beach RoadSingapore 189720/1

Two 37-storey office buildings on a land area of 22,381 square metres. The net area in these buildings is 69,803 square metres.


71 years

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15. INVESTMENT PROPERTIES (continued)

Name of building/location Description Tenure of land

Unexpired term of lease

SGX CENTRE 24 Shenton WaySingapore 068807

29-storey office building on a land area of 2,970 square metres. The net area in this building (inclusive of 3,336 square metres in SGX CENTRE 1) is 25,800 square metres.


84 years

ABACUS Plaza3 Tampines Central 1Singapore 529540



85 years

Tampines Plaza5 Tampines Central 1Singapore 529541



85 years

Marina Square Retail Mall6 Raffles BoulevardSingapore 039594

4-storey retail mall with a retail underpass. The net area in this building is 61,625 square metres.


69 years

Marina Bayfront2 Raffles LinkSingapore 039392

6-storey office building. The net area in this building is 7,159 square metres.


69 years

Marina Square Retail Mall and Marina Bayfront are components of an integrated commercial complex known as Marina Square.

Investment properties are carried at fair values at the balance sheet date as determined by independent professional valuers. Valuations are made based on the properties’ highest-and-best use using various valuation methods such as Direct Market Comparison Method, Income Method and Residual Method.

Investment properties are leased to non-related parties under operating leases (note 26(c)).

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16. PROPERTY, PLANT AND EQUIPMENT

Leasehold land and building

Plant and machinery

Furniture, fittings and

officeequipment

Motor vehicles

Renovations in progress

Construction in progress Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000The Group

2010CostBeginning of financial year 356,528 12,108 57,492 1,386 166 102,252 529,932Currency translation difference (5) (177) (284) (38) – (5,471) (5,975)Additions 4,892 6,386 10,396 149 2,066 – 23,889Transfer in/(out) 32,312 23,820 42,725 – (2,076) (96,781) –Disposals (164) (552) (503) (123) – – (1,342)

End of financial year 393,563 41,585 109,826 1,374 156 – 546,504

Accumulated depreciationBeginning of financial year 13,517 2,370 20,192 782 – – 36,861Currency translation difference (22) (47) (123) (9) – – (201)Depreciation charge 6,045 2,837 9,908 98 – – 18,888Disposals (5) – (454) (103) – – (562)

End of financial year 19,535 5,160 29,523 768 – – 54,986

Net book valueEnd of financial year 374,028 36,425 80,303 606 156 – 491,518

2009CostBeginning of financial year 356,614 11,410 53,880 938 151 – 422,993Currency translation difference – – (3) (16) – – (19)Additions 7 633 1,488 465 2,709 102,252 107,554Transfer in/(out) – 65 2,629 – (2,694) – –Disposals (93) – (502) (1) – – (596)

End of financial year 356,528 12,108 57,492 1,386 166 102,252 529,932

Accumulated depreciationBeginning of financial year 8,603 1,608 14,592 659 – – 25,462Currency translation difference – – (1) (3) – – (4)Depreciation charge 4,917 762 5,851 127 – – 11,657Disposals (3) – (250) (1) – – (254)

End of financial year 13,517 2,370 20,192 782 – – 36,861

Net book valueEnd of financial year 343,011 9,738 37,300 604 166 102,252 493,071

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16. PROPERTY, PLANT AND EQUIPMENT (continued)

Furniture, fittings

and office equipment

Motor vehicle Total

$’000 $’000 $’000The Company

2010CostBeginning of financial year 692 208 900Additions 11 – 11Disposals (7) – (7)

End of financial year 696 208 904

Accumulated depreciationBeginning of financial year 539 208 747Depreciation charge 21 – 21Disposals (7) – (7)


Net book valueEnd of financial year 143 – 143

2009CostBeginning of financial year 699 208 907Additions 6 – 6Disposals (13) – (13)


Accumulated depreciationBeginning of financial year 515 208 723Depreciation charge 32 – 32Disposals (8) – (8)


Net book valueEnd of financial year 153 – 153

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17. CASH AND CASH EQUIVALENTS


$’000 $’000 $’000 $’000

Cash at bank and on hand 55,967 47,459 580 805Short-term bank deposits 84,061 115,140 – –

140,028 162,599 580 805

Cash and cash equivalents of the Group and the Company include $82,982,000 (2009: $131,740,000) and $378,000 (2009: $412,000), respectively placed with a bank in which certain directors have interests.

Included in cash and cash equivalents of the Group, are amounts of $46,768,000 (2009: $98,988,000) maintained in the Project Accounts. The funds in the Project Accounts can only be applied in accordance with Housing Developers (Project Account) Rules (1997 Ed.).

18. PROPERTIES HELD FOR SALE

The Group2010 2009

$’000 $’000

Land and related costs 482,436 848,030Construction and development costs 230,342 460,972

712,778 1,309,002Add: Development profits recognised on percentage of completion method 189,087 312,044

901,865 1,621,046Less: Progress billings (404,993) (728,860)

496,872 892,186

Borrowing costs of $6,081,000 (2009: $13,010,000), arising from financing specifically entered into for the development of properties held for sale, were capitalised during the financial year. A capitalisation rate of 1.1% to 6.4% (2009: 1.0% to 6.2%) per annum was used in 2010, representing the borrowing costs of the loans used to finance the projects.

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18. PROPERTIES HELD FOR SALE (continued)

Title

Percentage of completion at

31.12.2010/Expected year of completion

Site area/Gross floor

area (sqm)

Group’s effective

interest %

Park Natura Freehold 95%/2011 19,823/27,748 100The Excellency (Chengdu) Leasehold 64%/2012 7,566/77,000 76The Trizon Freehold 45%/2013 18,153/38,122 76

19. TRADE AND OTHER RECEIVABLES


$’000 $’000 $’000 $’000

Trade receivables 45,440 17,298 – –Less: Allowance for impairment of receivables (1,733) (1,730) – –

43,707 15,568 – –

Accrued receivables 107,510 21,838 – –Deposits 16,975 719 169 173Prepaid taxes 5,031 – – –Other receivables 9,245 7,587 19 77

182,468 45,712 188 250

In accordance with the Group’s accounting policy, income is recognised on the progress of the construction work. Upon receipt of Temporary Occupation Permit, the balance of sales consideration to be billed is included in accrued receivables.

Included in deposits is an amount of $16,035,000 placed for a land tender.

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20. TRADE AND OTHER PAYABLES


$’000 $’000 $’000 $’000(a) Current

Monies received in advance 69,382 – – –Rental deposits 28,642 28,589 – –Trade payables 83,583 105,586 212 297Other payables 9,108 6,130 505 388Accrued operating expenses 61,602 55,395 1,577 2,375

252,317 195,700 2,294 3,060

(b) Non-currentRental deposits 48,621 50,927 – –Amounts due to an associated company 1,624 1,624 1,491 1,491Amount due to a non-controlling shareholder of a subsidiary company – 55,344 – –Amounts due to subsidiary companies – – 17,900 15,206

50,245 107,895 19,391 16,697

The amounts due to associated and subsidiary companies are unsecured, not repayable within the next 12 months and are interest-free.

At the balance sheet date, the carrying amounts of non-current trade and other payables approximate their fair values.

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21. BORROWINGS

The Group The CompanyNote 2010 2009 2010 2009

$’000 $’000 $’000 $’000(a) Current

Short-term bank loans (unsecured) (i) 514,840 657,545 468,068 516,293Term loan (secured) (ii) 134,835 – – –

649,675 657,545 468,068 516,293

(b) Non-currentTerm loans (secured) (ii) 17,241 269,295 – –Term loan (unsecured) (iii) 40,000 40,000 – –Revolving credit loans (unsecured) (iv) 57,500 109,000 – –

114,741 418,295 – –

Total borrowings 764,416 1,075,840 468,068 516,293

(i) The unsecured short-term loans are drawn under various uncommitted floating rate revolving credit facilities. The short-term loans of the Group and the Company include loans totalling $151,293,000 (2009: $293,449,000) extended by a bank in which certain directors have interests.

(ii) The term loans are drawn under $285,000,000 (2009: $406,000,000) land and construction loan facilities taken by subsidiary companies and are secured by way of legal mortgages over certain property development projects. The Group’s term loans include loans totalling $134,835,000 (2009: $231,000,000) extended by a bank in which certain directors have interests.

(iii) The unsecured term loan taken by a subsidiary company is obtained by way of a negative pledge over all the assets of that subsidiary company, and is extended by a bank in which certain directors have interests.

(iv) The revolving credit loans taken by subsidiary companies are obtained by way of a negative pledge over all the assets of those subsidiary companies, and are extended by a bank in which certain directors have interests. The amounts advanced under the revolving credit facilities are included as non-current liabilities as the Group has the discretion to rollover the facilities for at least 12 months after the balance sheet date. For the purposes of liquidity risk disclosure (note 28(c)), the revolving credit facilities has been classified as current as the disclosure is based on actual contractual drawdowns to be repaid within a year.

(c) Carrying amounts and fair values

The carrying amounts of non-current borrowings approximate their fair values. The fair values are based on discounted cash flows using a discount rate of 1.0% to 6.5% (2009: 1.2% to 6.2%) based upon the prevailing market rates.

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21. BORROWINGS (continued)

(c) Carrying amounts and fair values (continued)

The exposure of the borrowings of the Group and of the Company to interest rate changes and the contractual repricing dates at the balance sheet dates are as follows:


$’000 $’000 $’000 $’000

6 months or less 744,916 973,340 468,068 516,2936 – 12 months 19,500 63,000 – –1 – 5 years – 39,500 – –

764,416 1,075,840 468,068 516,293

22. DEFERRED INCOME TAXES

The Group2010 2009

$’000 $’000Deferred income tax liabilities: – to be settled within 1 year 24,372 31,205 – to be settled after 1 year 558,598 444,731

582,970 475,936

The movement in the deferred income tax account is as follows:

The Group2010 2009

$’000 $’000

Beginning of financial year 475,936 600,130Currency translation difference (6) (250)Effect of change in Singapore tax rate – income statement (note 8 (a)) – (30,643) – equity – (1,629)Charged/(Credited) to income statement 133,569 (86,700)Under/(Over)provision in preceding financial years (note 8(a)) 4,676 (4,972)Transfer to current income tax liabilities (note 8(b)) (31,205) –End of financial year 582,970 475,936

Deferred income tax assets are recognised for tax losses carried forward to the extent that realisation of the related tax benefits through future taxable profits is probable. The Group has unrecognised tax losses in certain subsidiary companies of approximately $15,895,000 (2009: $17,743,000), which can be carried forward and used to offset against future taxable income subject to meeting certain statutory requirements by those companies with unrecognised tax losses in their respective countries of incorporation. These tax losses have no expiry dates, except for $4,163,000 (2009: $1,359,000) which will expire in the next 5 years.

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22. DEFERRED INCOME TAXES (continued)

The movements in the deferred income tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction) during the financial year are as follows:

The Group

Deferred income tax liabilities

Deferred development

profitsFair value

gain

Accelerated tax

depreciation Total$’000 $’000 $’000 $’000

2010Beginning of financial year 42,038 414,086 19,812 475,936Currency translation difference – – (6) (6)Charged to income statement 16,589 114,643 2,337 133,569(Over)/Underprovision in preceding financial years – (1,155) 5,831 4,676Transfer to current income tax liabilities (31,205) – – (31,205)

End of financial year 27,422 527,574 27,974 582,970

2009Beginning of financial year 20,527 553,724 25,971 600,222Currency translation difference (250) – – (250)Effect of change in Singapore tax rate – income statement (731) (28,481) (1,436) (30,648) – equity – (1,629) – (1,629)Charged/(Credited) to income statement 22,492 (109,528) 249 (86,787)Overprovision in preceding financial years – – (4,972) (4,972)

End of financial year 42,038 414,086 19,812 475,936

Deferred income tax assets

Tax losses$’000

2009Beginning of financial year (92)Effect of change in Singapore tax rate 5Charged to income statement 87

End of financial year –

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23. SHARE CAPITAL

The Group and the Company2010 2009

No. of ordinary

shares Amount

No. of ordinary

shares Amount’000 $’000 ’000 $’000

Beginning and end of financial year 1,377,481 1,400,927 1,377,481 1,400,927

All issued shares are fully paid. There is no par value for these ordinary shares.

The UIC Share Option Scheme (“ESOS”) was approved by the shareholders of the Company at an Extraordinary General Meeting held on 18 May 2001.

Under the terms of the ESOS, the total number of shares granted shall not exceed 5% of the issued share capital of the Company on the day immediately preceding the Offer Date of the Option. The exercise price is equal to the average of the last done prices per share of the Company’s ordinary shares on the Singapore Exchange Securities Trading Limited (“SGX-ST”) for five market days immediately preceding the date of the offer.

On 26 February 2010 (“Offer Date”), options were granted pursuant to the ESOS to the executives of the Company and its subsidiary companies to subscribe for 656,000 ordinary shares in the Company at the exercise price of $2.03 per ordinary share.

Principal terms of the ESOS are set out below:

(i) only full time confirmed executives of the Company or any of its subsidiary companies (including executive directors) are eligible for the grant of options;

(ii) the ESOS shall be in force at the discretion of the Remuneration Committee (“RC”) subject to a maximum period of 10 years from the date of shareholders’ approval;

(iii) all options granted shall be exercisable, in whole or in part (only in respect of 1,000 shares or any multiple thereof), before the tenth anniversary of the Offer Date and in accordance with the following vesting schedule:

Vesting schedule

Percentage of sharesover which options

are exercisableOn or after the second anniversary of the Offer Date 50%On or after the third anniversary of the Offer Date 25%On or after the fourth anniversary of the Offer Date 25%

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23. SHARE CAPITAL (continued)

Principal terms of the ESOS are set out below: (continued)

(iii) the vesting and exercising of vested or unexercised options are governed by conditions set out in the ESOS; and

(iv) participants in the ESOS, shall not, except with the prior approval of the RC in its absolute discretion, be entitled to participate in any other share option schemes or share incentive schemes implemented by companies within or outside the Group. The settlement of options are subject to conditions as set out in the ESOS.

Movement in the number of unissued ordinary shares under option and their exercise price are as follows:

Beginning of financial

year

Granted during

financial year

Cancelled during

financial year

Exercised during

financial year

End of financial

year

Exercise price per

shareDate of expiry

The Group and the Company

20102010 Options – 656,000 – – 656,000 $2.03 25.2.20202009 Options 760,000 – (112,000) – 648,000 $1.07 3.5.20192008 Options 1,068,000 – (168,000) – 900,000 $2.91 9.3.20182007 Options 2,382,000 – (336,000) – 2,046,000 $2.70 4.3.2017

4,210,000 656,000 (616,000) – 4,250,000

20092009 Options – 760,000 – – 760,000 $1.07 3.5.20192008 Options 1,068,000 – – – 1,068,000 $2.91 9.3.20182007 Options 2,418,000 – (36,000) – 2,382,000 $2.70 4.3.2017

3,486,000 760,000 (36,000) – 4,210,000

The fair value of options granted on 26 February 2010 (2009: 4 May 2009), determined using the Binomial Valuation Model, was $489,000 (2009: $266,000). The significant inputs into the model were share price of $2.01 (2009: $1.12) at the grant date, exercise price of $2.03 (2009: $1.07), expected dividend yield of 1.49% (2009: 2.68%), standard deviation of expected share price returns of 32% (2009: 30%), the option life shown above and annual risk-free interest rate of 2.7% (2009: 2.1%). The volatility measured as the standard deviation of expected share price returns was based on statistical analysis of share prices over the last five years.

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24. DIVIDENDS

The Group andthe Company

2010 2009$’000 $’000

Final tax-exempt (one-tier) dividend paid in respect of the previous financial year of 3.0 cents per share (2009: 3.0 cents per share) 41,324 41,324

At the Annual General Meeting on 27 April 2011, a final tax-exempt (one-tier) dividend of 3.0 cents per share amounting to $41,324,000 will be recommended. The amount will be accounted for in shareholders’ equity as an appropriation of retained earnings in the financial year ending 31 December 2011.

25. RETAINED EARNINGS

(a) Retained earnings of the Group included accumulated fair value gains from the Group’s investment properties amounting to $665,108,000 (2009: $199,121,000).

(b) Reserves of the Company comprise of retained earnings of $391,702,000 (2009: $389,850,000) and share option reserve of $2,614,000 (2009: $2,409,000), of which the movement in retained earnings for the Company is as follows:

The Company2010 2009

$’000 $’000

Beginning of financial year 389,850 388,612Total comprehensive income – net profit 43,176 42,562Dividends paid (note 24) (41,324) (41,324)

End of financial year 391,702 389,850

26. COMMITMENTS

(a) Capital commitments

The Group2010 2009

$’000 $’000Capital expenditure contracted for but not recognised in the financial statements in respect of: – investment in an associated company 109,351 – – upgrading of investment properties 1,842 2,044 – property, plant and equipment 547 236

111,740 2,280

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26. COMMITMENTS (continued)

(b) Operating lease commitments – where the Group is a lessee

The Group leases certain space under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewal rights.

The future minimum lease payables under non-cancellable operating leases contracted for at the balance sheet date but not recognised as liabilities, are as follows:

The Group2010 2009

$’000 $’000

Not later than 1 year 609 1,166Between 1 and 5 years 890 1,483

1,499 2,649

(c) Operating lease commitments – where the Group is a lessor

The Group has entered into commercial property leases on its investment property portfolio, consisting of the Group’s office buildings and retail malls.

The future minimum lease receivables under non-cancellable operating leases contracted for at the balance sheet date but not recognised as receivables, are as follows:

The Group2010 2009

$’000 $’000

Not later than 1 year 232,189 253,896Between 1 and 5 years 254,944 226,302Later than 5 years 4,959 9,519

492,092 489,717

27. CONTINGENT LIABILITY

The Group and the Company

2010 2009$’000 $’000

Guarantee given to a financial institution in connection with borrowings given to an associated company – 12,876

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28. FINANCIAL RISK MANAGEMENT

Financial risk factors

The Group’s activities expose it to market risk (including currency risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management strategy seeks to minimise any adverse effects from the unpredictability of financial markets on the Group’s financial performance.

Risk management is carried out in accordance with established policies and guidelines approved by the Board of Directors.

(a) Market risk

(i) Currency risk

The Group operates dominantly in Singapore, with some operations in the People’s Republic of China. Entities in the Group transact in currencies other than their respective functional currencies (“foreign currencies”) such as United States Dollars.

Currency risk arises when transactions are denominated in foreign currencies and is minimal for the Group. In addition, the Group is exposed to currency translation risk on the net assets in foreign operations. Currency exposure relating to the net assets of the Group’s foreign operations in the People’s Republic of China is minimal as the assets and liabilities are substantially denominated in Renminbi.

The Group’s result is not sensitive to the movement in foreign currencies as the currency exposure at the Group is minimal.

The Company’s exposure to currency risk is minimal as revenue and expenses and assets and liabilities are substantially denominated in Singapore Dollars.

(ii) Cash flow and fair value interest rate risks

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market interest rates. As the Group has no significant interest-bearing assets, the Group’s income and operating cash flows are substantially independent of changes in market interest rates.

The Group’s interest rate risks mainly arise from borrowings. Borrowings at variable rates expose the Group to cash flow interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk. The Group monitors the interest rates on borrowings closely to ensure that the borrowings are maintained at favourable rates.

If the interest rates increase/decrease by 25 basis points (2009: 25 basis points) with all other variables remaining constant, the profit after tax for the Group will be lower/higher by $1,169,000 (2009: $1,422,000) as a result of higher/lower interest expense on these borrowings.

The Company does not have any exposure to the interest rates as all its finance expenses are recharged to the subsidiary companies.

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28. FINANCIAL RISK MANAGEMENT (continued)

(b) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. For trade receivables, the Group adopts the policy of dealing only with customers of appropriate credit history, and obtaining sufficient security where appropriate to mitigate credit risk. For the property investment segment, generally advance deposits of at least 3 months rental (or equivalent amount in bankers’ guarantee) are obtained for all tenancies. For the property trading segment, progress billings from customers are followed up, and appropriate action taken promptly in instances of non-payment or delay in payment. For other financial assets, the Group adopts the policy of dealing only with high credit quality counterparties.

Other than amount due from associated and subsidiary companies, concentration of credit risk relating to trade receivables is limited due to the Group’s many varied customers.

As the Group and the Company does not hold any collateral, the maximum exposure to credit risk for each class of financial instruments is the carrying amount of that class of financial instruments presented on the balance sheet.

The Group’s and the Company’s major classes of financial assets are bank deposits, trade receivables and other non-current receivables.

The Group’s and the Company’s other non-current receivables comprise amounts due from associated companies and amounts due from subsidiary and associated companies respectively. These receivables are assessed for their recoverability and any recognition/writeback of allowance for impairment are made where necessary. Information regarding these receivables is disclosed in note 11.

The credit risk profile of the Group’s trade receivables at the balance sheet date is as follows:

The Group2010 2009

$’000 $’000By segment of businessProperty investment 4,545 3,885Property trading 131,406 21,838Hotel operations 5,150 4,729Technologies 10,116 6,954

151,217 37,406

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(b) Credit risk (continued)

(i) Financial assets that are neither past due nor impaired

Bank deposits that are neither past due nor impaired are mainly deposits with banks with high credit-ratings assigned by international credit-rating agencies. Trade receivables that are neither past due nor impaired are substantially companies with a good collection track record with the Group.

(ii) Financial assets that are past due and/or impaired

There is no other significant class of financial assets that is past due and/or impaired except for trade receivables.

The age analysis of trade receivables past due but not impaired is as follows:

The Group2010 2009

$’000 $’000

Past due 0 to 1 month 4,593 3,963Past due 1 to 2 months 1,925 1,719Past due 2 to 3 months 703 498Past due over 3 months 722 542

7,943 6,722

The carrying amount of trade receivables individually determined to be impaired and the movement in the related allowance for impairment are as follows:

The Group2010 2009

$’000 $’000

Beginning of financial year 1,730 1,426Allowance made 251 609Allowance utilised (248) (305)

End of financial year 1,733 1,730

Trade receivables that are individually determined to be impaired at the balance sheet date relate to debtors that are in significant financial difficulties and have defaulted on payments despite attempts to recover the debts owing through legal means where appropriate. These receivables are not secured by any collateral or credit enhancements.

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(c) Liquidity risk

The table below analyses the Group’s and the Company’s financial liabilities into relevant maturity groupings based on the remaining period from the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying amounts as the impact of discounting is not significant.

Less than 1 year

Between 1 and

3 years

Between 3 and

5 yearsOver

5 years$’000 $’000 $’000 $’000

The Group

At 31 December 2010Trade and other payables (252,317) (48,368) (253) (1,624)Borrowings (719,763) (8,009) (10,360) (30,139)

(972,080) (56,377) (10,613) (31,763)

At 31 December 2009Trade and other payables (195,700) (105,926) (606) (1,624)Borrowings (746,112) (337,211) (10,350) –

(941,812) (443,137) (10,956) (1,624)

The Company

At 31 December 2010Trade and other payables (2,294) (17,900) – (1,491)Borrowings (468,331) – – –

(470,625) (17,900) – (1,491)

At 31 December 2009Trade and other payables (3,060) (15,206) – (1,491)Borrowings (517,486) – – –

(520,546) (15,206) – (1,491)

The Group’s and the Company’s policy on liquidity risk management is to maintain sufficient cash to enable them to meet their normal operating commitments and the availability of funding through adequate amounts of credit facilities with various banks. At the balance sheet date, assets held by the Group and the Company for managing liquidity risk included cash and short-term deposits as disclosed in note 17.

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(d) Capital risk

The Group’s main objective when managing capital is to safeguard the Group’s ability to continue as a going concern. The Group manages capital using various common measures applied by real estate companies which may include adjusting the dividend payment, returning capital to shareholders or issuing new shares.

Management monitors the Group’s capital using a ratio calculated as debt divided by net assets. Debt comprises total borrowings and net assets are calculated as total assets less total liabilities.

The Group2010 2009

$’000 $’000

Debt 764,416 1,075,840Net assets 5,287,445 4,536,118Debt/Net assets ratio 14% 24%

The Group and the Company are in compliance, where applicable, with all externally imposed capital requirements for the financial years ended 31 December 2009 and 2010.

29. RELATED PARTY TRANSACTIONS

In addition to the related party information shown elsewhere in the financial statements, the following transactions took place between the Group and related parties during the financial year:

(a) A bank in which certain directors have interests, had the following transactions with the Group:

The Group2010 2009

$’000 $’000

Interest paid for bank loans 7,562 17,238Sales of goods and services 9,944 8,496

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29. RELATED PARTY TRANSACTIONS (continued)

(b) Key management personnel compensation

Key management’s remuneration included fees, salary, bonus and other emoluments (including benefits-in-kind) computed based on the cost incurred by the Group and the Company, and where the Group or the Company did not incur any costs, the value of the benefit is included. The total key management’s remuneration is as follows:

The Group2010 2009

$’000 $’000Directors of the Company – Fees 771 847 – Salaries, bonus and other emoluments 1,094 935 – Employer’s contribution to defined contribution plan 8 8 – Share option expense 86 107

1,959 1,897

(c) During the previous financial year ended 31 December 2009, the Group through its subsidiary company sold residential property units totalling $2,751,000 to associates of a director.

30. SEGMENT INFORMATION

For management purposes, the Group is organised into business units based on their products and services, and has four reportable operating segments as follows:

• Property investment – leasing of commercial office property, property management, investment holding, and investment in retail centres.

• Property trading – development of properties for trading.

• Hotel operations – operation of hotels.

• Technologies – distribution of computers and related products; provision of systems integration and networking infrastructure services.

Except as indicated above, no operating segments have been aggregated to form the above reportable operating segments.

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30. SEGMENT INFORMATION (continued)

Property investment Property trading Hotel operations Technologies The Group2010 2009 2010 2009 2010 2009 2010 2009 2010 2009

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000Revenue– external sales 305,818 318,609 478,184 547,529 124,341 90,469 63,677 54,006 972,020 1,010,613

Segment result 231,751 237,759 127,600 123,882 21,052 21,582 2,388 2,484 382,791 385,707Unallocated costs (4,399) (5,440)Interest income 826 1,318Dividend income 822 2,707Finance expenses (9,613) (17,026)Share of results of associated companies 11,894 (3,839) 2,730 25,248 17,279 7,825 – – 31,903 29,234

402,330 396,500Fair value gain/(loss) on investment properties 691,022 (658,464) – – – – – – 691,022 (658,464)

Profit/(Loss) before income tax 1,093,352 (261,964)

Segment assets 5,524,069 4,640,795 739,510 1,158,149 507,421 406,375 16,797 15,550 6,787,797 6,220,869Investments in associated companies 101,638 89,743 28,067 34,213 103,620 96,182 – – 233,325 220,138

Consolidated total assets 7,021,122 6,441,007

Other segment itemsCapital expenditure 174,157 7,645 10 546 18,738 106,818 92 72 192,997 115,081Depreciation 1,637 716 277 95 16,876 10,731 98 115 18,888 11,657

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30. SEGMENT INFORMATION (continued)

Geographical information

Singapore is the home country of the Company which is also an operating company. The areas of operation are holding of investment properties for leasing, property development and trading, investment holding, property management, and investment in hotels and retail centres.

Revenue is based on the country in which the sale is originated. Non-current assets are shown by the geographical area in which the assets are located.

Revenue Non-current assets2010 2009 2010 2009

$’000 $’000 $’000 $’000

Singapore 936,067 900,749 6,048,839 5,205,234China 35,953 109,864 134,004 105,475

972,020 1,010,613 6,182,843 5,310,709

31. EVENT OCCURRING AFTER BALANCE SHEET DATE

On 6 January 2011, the Group paid an additional $109,351,000 of its share of investment in an associated company.

32. NEW OR REVISED ACCOUNTING STANDARDS AND INTERPRETATIONS

Certain new standards, amendments and interpretations to existing standards have been published and are mandatory for the Group’s accounting periods beginning on or after 1 January 2011 or later periods which the Group has not early adopted. The Group does not expect that the adoption of these accounting standards or interpretations will have a material impact on the Group’s financial statements for the financial year ending 31 December 2011, except for the amendments to FRS 24 Related Party Disclosures (effective for annual periods beginning 1 January 2011), which may affect the Group’s disclosure of related party transactions. The amendment clarifies and simplifies the definition of a related party. The Group will apply FRS 24 and provide the required disclosure from 1 January 2011.

33. AUTHORISATION OF FINANCIAL STATEMENTS

These financial statements were authorised for issue in accordance with a resolution of the Board of Directors of United Industrial Corporation Limited on 18 February 2011.

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34. LISTING OF SUBSIDIARY AND ASSOCIATED COMPANIES IN THE GROUP

Principal activities

Country of incorporation/business

The Group’s equity holding2010 2009

% %Subsidiary companies

UIC Development (Private) Limited Investment holding Singapore 100 100

UIC Enterprise Pte Ltd Investment holding Singapore 100 100

UIC Investment Pte Ltd Property trading Singapore 100 100

UIC Investments (Properties) Pte Ltd Property investment Singapore 100 100

UIC Supplies Pte Ltd Property trading Singapore 100 100

UIC Land Pte Ltd Property investment Singapore 100 100

UIC Management Services Pte Ltd Property management agents

Singapore 100 100

Networld Realty Pte Ltd Investment holding Singapore 100 100

UIC China Realty Pte Ltd Investment holding Singapore 100 100

Alprop Pte Ltd Property investment Singapore 88 87

Singapore Land Limited Investment holding Singapore 76 74

Gateway Land Limited Property investment Singapore 76 74

Ideal Homes Pte. Limited Property trading Singapore 76 74

Realty Management Services (Pte) Ltd. Property management agents

Singapore 76 74

RMA-Land Development Private Ltd Property investment Singapore 76 74

Shing Kwan Realty (Pte.) Limited Property investment Singapore 76 74and investment holding

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34. LISTING OF SUBSIDIARY AND ASSOCIATED COMPANIES IN THE GROUP (continued)





Singland (Chengdu) Development Co. Ltd. #

Property trading People’s Republic of China

76 74

S.L. Development Pte. Limited Property investmentand investment holding

Singapore 76 74

S L Prime Properties Pte Ltd Property investment Singapore 76 74

S L Prime Realty Pte Ltd Property investment Singapore 76 74

S.L. Properties Limited Property investmentand investment holding

Singapore 76 74

Pothonier Singapore Pte Ltd Investment holding Singapore 76 74

Shenton Holdings Private Limited Investment holding Singapore 76 74

Singland China Holdings Pte. Ltd. Investment holding Singapore 76 74

S.L. Home Loans Pte. Ltd. Investment holding Singapore 76 74

S.L. Management Services Pte Limited Investment holding Singapore 76 74

Brendale Pte. Ltd. Property trading Singapore 62 61

UIC Asian Computer Services Pte Ltd Retailing of computerhardware and software

Singapore 60 60

UIC Investments (Equities) Pte Ltd Investment holding Singapore 60 60

UIC Technologies Pte Ltd Investment holding Singapore 60 60

UIC JinTravel (Tianjin) Co., Ltd # Property investmentand trading

People’s Republic of China

51 51

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Marina Centre Holdings Private Limited +

Property developmentand investment

Singapore 41 39

Marina Food Court Pte Ltd + Food court operator Singapore 41 39

Marina Management Services Pte Ltd +

Property management agents

Singapore 41 39

Hotel Marina City Private Limited+ Hotelier Singapore 41 39

Associated companies

CITIC-UIC Investment Pte Ltd Investment holding Singapore 50 50

United Regency Pte Ltd Property trading Singapore 40 40

Kogan Investments Limited ^ Property investment British Virgin Islands

38 37

Avenue Park Development Pte. Ltd. ## Property trading Singapore 37 36

Tianjin Yan Yuan International Hotel * Hotel investment People’s Republic of China

36 36

Shanghai Jin Peng Realty Co Ltd # Property trading People’s Republic of China

23 –

Aquamarina Hotel Private Limited Hotelier Singapore 20 20

Marina Bay Hotel Private Limited Hotelier Singapore 20 20

Novena Square Development Ltd ++ Property investment Singapore 15 15

Novena Square Investments Ltd ++ Property investment Singapore 15 15

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The Group’s equity holding

2010 2009% %

Inactive companiesSubsidiary companies

Netpearl Sdn Bhd # Malaysia 100 100

Networld Pte Ltd Singapore 100 100

UIC China Resources Pte Ltd Singapore 100 100

UIC Commodities Pte Ltd Singapore 100 100

UIC Printedcircuits Pte Ltd Singapore 100 100

UIC Indochina Pte Ltd Singapore 100 100

Union Commodities Pte Ltd Singapore 100 100

UIC Group Limited @ Hong Kong – 100

Interpex Services Private Limited Singapore 76 74

S L Realty Management Service (HK) Limited ^^ Hong Kong 76 74

Asian Computer Services Pte Ltd Singapore 60 60

Newtech Business Systems Pte Ltd @ Singapore – 60

UIC Network Distribution Pte Ltd @ Singapore – 60

Grocorp Assets Sdn Bhd # Malaysia 51 51

Associated companies

United Venture Development Pte. Ltd. Singapore 38 –

United Venture Investments Pte. Ltd. Singapore 38 –

Marina Laundry Private Limited Singapore 28 28

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Notes

All the subsidiary and associated companies are audited by PricewaterhouseCoopers LLP, Singapore except for the following:

# Audited by PricewaterhouseCoopers firms outside Singapore.## Audited by Ernst & Young LLP, Singapore.* Audited by other auditors. This foreign incorporated company is not considered a significant associated company under the SGX-ST

Listing Manual.^ Not required to be audited by the law of the country of incorporation.^^ Not required to be audited as company is in the process of deregistration.@ Not applicable as company is liquidated during the year.+ Effective interest is less than 50% as the subsidiary company is indirectly held by another subsidiary company.++ Effective interest is less than 20% as the associated company is directly held by another subsidiary company.

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FIVE YEAR SUMMARY 2006 – 2010

GROUP PROFIT AND LOSS ACCOUNTS – Year ended 31 December

($’000) 2006 2007 2008 2009 2010

Revenue 325,348 528,395 892,295 1,010,613 972,020

Profit/(Loss) before income tax 561,318 1,926,906 (48,819) (261,964) 1,093,352Income tax (expense)/credit (20,830) (305,583) 6,239 77,371 (185,539)

Net profit/(loss) 540,488 1,621,323 (42,580) (184,593) 907,813

Attributable to:Equity holders of the Company – Net profit from operations 75,786 123,589 187,495 240,824 237,014 – Net fair value gain/(loss) on investment properties 416,319 1,051,243 (262,133) (383,594) 465,987

492,105 1,174,832 (74,638) (142,770) 703,001Non-controlling interests 48,383 446,491 32,058 (41,823) 204,812

540,488 1,621,323 (42,580) (184,593) 907,813

Dividends proposed (net) 101,658 41,324 41,324 41,324 41,324

GROUP BALANCE SHEETS – As at 31 December

($’000) 2006 2007 2008 2009 2010

Investment properties 3,778,028 5,476,361 5,248,437 4,597,500 5,458,000Property, plant and equipment 4,869 401,863 397,531 493,071 491,518Other non-current assets 307,179 254,069 261,228 248,212 249,675Current assets 530,117 1,076,416 1,175,773 1,102,224 821,929

Total assets 4,620,193 7,208,709 7,082,969 6,441,007 7,021,122Current liabilities (662,561) (960,243) (1,087,067) (902,763) (985,721)Non-current liabilities (264,453) (1,307,569) (1,163,540) (1,002,126) (747,956)

Net assets employed 3,693,179 4,940,897 4,832,362 4,536,118 5,287,445

Share capital 1,400,927 1,400,927 1,400,927 1,400,927 1,400,927Reserves 1,042,264 1,929,348 1,818,131 1,658,498 2,334,662

2,443,191 3,330,275 3,219,058 3,059,425 3,735,589Non-controlling interests 1,249,988 1,610,622 1,613,304 1,476,693 1,551,856

Total equity 3,693,179 4,940,897 4,832,362 4,536,118 5,287,445

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FIVE YEAR SUMMARY 2006 – 2010

OTHER DATA – Year ended 31 December

2006 2007 2008 2009 2010Profit/(Loss) before income tax – % of revenue 173 365 (5) (26) 112

Profit/(Loss) attributable to equity holders of the Company – % of revenue 151 222 (8) (14) 72 – % of share capital and reserves 20 35 (2) (5) 19

Earnings/(Loss) per share (cents) – excluding fair value gain/loss

on investment properties 5.5 9.0 13.6 17.5 17.2 – including fair value gain/loss

on investment properties 35.7 85.3 (5.4) (10.4) 51.0

Dividends proposed – gross per share (cents) 9.00 3.00* 3.00* 3.00* 3.00* – cover (times) 4.8 28.4 n.a. n.a. 17.0

Net asset value per share ($) 1.77 2.42 2.34 2.22 2.71

n.a. – Not applicable* Tax-exempt (One-tier)

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STATISTICS OF SHAREHOLDINGSAS AT 3 MARCH 2011


Number of Issued Shares : 1,377,481,220 ordinary sharesVoting Rights : One vote per share

Distribution of Shareholdings as at 3 March 2011

Size of Shareholdings No. of Shareholders % No. of Shares %

1 – 999 990 8.26 370,171 0.03

1,000 – 10,000 8,500 70.88 36,205,816 2.63

10,001 – 1,000,000 2,481 20.69 93,078,936 6.76

1,000,001 and above 21 0.17 1,247,826,297 90.59

Total 11,992 100.00 1,377,481,220 100.00

List of 20 Largest Shareholders as at 3 March 2011

No. Name No. of Shares %

1 DBS NOMINEES PTE LTD 462,939,838 33.61

2 OVERSEA CHINESE BANK NOMS PTE LTD 290,083,243 21.06

3 DBS VICKERS SECS (S) PTE LTD 149,691,350 10.87

4 UOB KAY HIAN PTE LTD 145,705,711 10.58

5 UNITED OVERSEAS BANK NOMINEES 96,697,316 7.02

6 UOB NOMINEES (2006) PTE LTD 45,707,377 3.32

7 CITIBANK NOMS S’PORE PTE LTD 22,163,966 1.61

8 CIMB SEC (S’PORE) PTE LTD 5,262,175 0.38

9 OCBC NOMINEES SINGAPORE 4,064,189 0.30

10 DBSN SERVICES PTE LTD 4,059,450 0.29

11 HSBC (SINGAPORE) NOMS PTE LTD 3,514,686 0.26

12 SHANWOOD DEVELOPMENT PTE LTD 3,000,000 0.22

13 KWEE SIU MIN @ SUDJASMIN KUSMIN OR DIANAWATI TJENDERA 2,790,000 0.20

14 SINGAPORE REINSURANCE CORPORATION LTD – SHAREHOLDERS 2,410,000 0.17

15 CHING MUN FONG 1,954,000 0.14

16 PHILLIP SECURITIES PTE LTD 1,576,714 0.11

17 MORGAN STANLEY ASIA (S’PORE) 1,526,000 0.11

18 KI INVESTMENTS (HK) LIMITED 1,446,000 0.10

19 PRIMA INVESTMENT HOLDINGS (SINGAPORE) PTE LTD 1,215,000 0.09

20 OCBC SECURITIES PRIVATE LTD 1,034,380 0.08

TOTAL 1,246,841,395 90.52

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STATISTICS OF SHAREHOLDINGSAS AT 3 MARCH 2011


Substantial Shareholders Shareholdings as at 3 March 2011

Shareholdingsregistered in the

name of substantialshareholder or

nominees

Shareholdingswhich the substantial

shareholders aredeemed to have

an interest

Name No. of Shares No. of Shares %

(1) UOL Equity Investments Pte Ltd 547,837,565(1) nil 39.771

(2) UOL Group Limited 32,318,000(2) 547,837,565(2) 42.117

(3) Dr Wee Cho Yaw 1,857,000 647,713,565(3) 47.156

(4) Telegraph Developments Ltd 495,987,000(4) nil 36.007

Notes:(1) UOL Group Limited and Dr Wee Cho Yaw have deemed interests in the UIC shares of UOL Equity Investments Pte Ltd (“UEI”).

(2) Dr Wee Cho Yaw is deemed to have an interest in the UIC Shares held by UOL Group Limited.

(3) Dr Wee Cho Yaw’s deemed interest in the 647,713,565 UIC shares is derived as follows:

United Overseas Bank Nominees (Pte) Ltd 61,343,000– beneficiary: Straits Maritime Leasing Pte Ltd

United Overseas Bank Nominees (Pte) Ltd 6,215,000– Haw Par Capital Pte Ltd

DBS Nominees Pte Ltd 32,318,000– UOL Group Limited

UOL Equity Investments Pte Ltd 547,837,565(Includes shares held under DBS Nominees Pte Ltd and UOB Kay Hian Pte Ltd)

(4) By virtue of Section 7 of the Companies Act, Cap. 50, JG Summit Philippines Limited, JG Summit Holdings, Inc. and Dr John Gokongwei, Jr. are deemed to have an interest in the 495,987,000 UIC shares held by Telegraph Developments Limited (“Telegraph”) as follows:

(i) JG Summit Philippines Limited is the holding company of Telegraph;

(ii) JG Summit Holdings, Inc. is the holding company of JG Summit Philippines Limited; and

(iii) John Gokongwei, Jr. has an interest of more than 20% of the voting shares in JG Summit Holdings, Inc.

RULE 723 OF THE SGX-ST LISTING MANUAL

Based on the information available to the Company as at 3 March 2011, approximately 16.813% of the issued ordinary shares of the Company is held by the public and therefore the Company has complied with the Exchange’s requirement that at least 10% of equity securities (excluding preference shares and convertible equity securities) in a class that is listed is at all times held by the public.

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PRINCIPAL SUBSIDIARIES & ASSOCIATED COMPANIES

SUBSIDIARY COMPANIES ASSOCIATED COMPANIES

Singapore SingaporeSingapore Land Limited Novena Square Developments LtdAlprop Pte Ltd Novena Square Investments Ltd Registered Office United Regency Pte Ltd 5 Shenton Way #02-14 Registered Office Podium Block 101 Thomson Road #33-00 UIC Building United Square Singapore 068808 Singapore 307591 Tel: 6222 9312 Tel: 6255 0233 Fax: 6225 1004 Fax: 6252 9822 Website: www.singland.com.sg Website: www.uol.com.sg

Marina Centre Holdings Pte Ltd China Registered Office Tianjin Yan Yuan International Hotel Ltd 6 Raffles Boulevard #01-101 (Sheraton Tianjin Hotel) Marina Square Business Address Singapore 039594 Zijinshan Road Tel: 6339 8787 Hexi District, Tianjin Fax: 6339 5397 China, 300074 Website: www.marinasquare.com.sg Tel: (86)(22) 2334 3388 Website: www.sheraton.com/tianjinUIC China Realty Pte LtdUIC Development (Private) LimitedUIC Enterprise Pte LtdUIC Investment Pte LtdUIC Investments (Properties) Pte LtdUIC Land Pte LtdUIC Management Services Pte LtdUIC Supplies Pte LtdUIC Technologies Pte LtdBrendale Pte LtdNetworld Realty Pte Ltd Registered Office 5 Shenton Way #02-16 UIC Building Singapore 068808 Tel: 6220 1352 Fax: 6224 0278 Website: www.uic.com.sg

ChinaUIC JinTravel (Tianjin) Co., Ltd Business Address 31 Zijinshan Road Hexi District Ruijin Huayan Block D China, 300074 Tel: (86)(22) 2352 4808

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(COMPANY REGISTRATION NO. 196300181E) INCORPORATED IN THE REPUBLIC OF SINGAPORE

NOTICE OF ANNUAL GENERAL MEETINGUNITED INDUSTRIAL CORPORATION LIMITED


NOTICE IS HEREBY GIVEN that the 49th Annual General Meeting of United Industrial Corporation Limited will be held at 80 Raffles Place, 61st Storey, UOB Plaza 1, Singapore 048624, on Wednesday, 27 April 2011 at 3.00 p.m. to transact the following business:

As Ordinary Business

1. To receive and adopt the Directors’ Report and Audited Financial Statements for the financial year ended 31 December 2010 and the Auditors’ Report thereon.

2. To declare a first and final dividend of 3.0 cents per share tax-exempt (one-tier) for the financial year ended 31 December 2010. (2009: 3.0 cents)

3. To approve Directors’ fees of $391,750 for the financial year ended 31 December 2010. (2009: $430,000)

4. To re-elect Mr Wee Ee Lim as a Director who will retire by rotation pursuant to Article 104 of the Articles of Association of the Company and who, being eligible, offers himself for re-election.

5. To re-appoint the following Directors, each of whom will retire and seek re-appointment under Section 153(6) of the Companies Act, Cap. 50, to hold office from the date of this Annual General Meeting until the next Annual General Meeting:

(a) Dr Wee Cho Yaw(b) Dr John Gokongwei, Jr.(c) Mr Tan Boon Teik (See Explanatory Note 1)(d) Mr Hwang Soo Jin (See Explanatory Note 2)(e) Mr Antonio L. Go( f ) Mr James L. Go (See Explanatory Note 3)(g) Mr Gwee Lian Kheng

6. To re-appoint Messrs PricewaterhouseCoopers LLP as Auditors of the Company to hold office until the next Annual General Meeting of the Company and to authorise the Directors to fix their remuneration. (See Explanatory Note 4)

As Special Business

7. To consider and, if thought fit, to pass, with or without modifications, the following resolution as Ordinary Resolutions:

7A. That pursuant to Section 161 of the Companies Act, Cap 50, and subject to the listing rules, guidelines and directions (“Listing Requirements”) of the Singapore Exchange Securities Trading Limited (“SGX-ST”), the Directors of the Company be and are hereby authorised to issue:

(i) shares in the capital of the Company (“Shares”);(ii) convertible securities;

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(iii) additional convertible securities issued pursuant to adjustments; or(iv) Shares arising from the conversion of the securities in (ii) and (iii) above,

(whether by way of rights, bonus, or otherwise or pursuant to any offer, agreement or option made or granted by the Directors during the continuance of this authority which would or might require Shares or convertible securities to be issued during the continuance of this authority or thereafter) at any time, to such persons, upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit (notwithstanding that the authority conferred by this Ordinary Resolution may have ceased to be in force), provided that:

a. the aggregate number of Shares and convertible securities to be issued pursuant to this Ordinary Resolution (including Shares to be issued in pursuance of convertible securities made or granted pursuant to this Ordinary Resolution) does not exceed 50% of the total number of issued Shares (excluding treasury shares) provided that the aggregate number of Shares to be issued other than on a pro rata basis to Shareholders of the Company (including Shares to be issued in pursuance of instruments made or granted pursuant to this Ordinary Resolution) does not exceed 20% of the total number of issued Shares;

b. (subject to such other manner of calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of Shares that may be issued under (a) above, the percentage of issued Shares shall be based on the total number of issued Shares (excluding treasury shares) at the time of the passing of this Ordinary Resolution, after adjusting for:

(1) any new Shares arising from the conversion or exercise of convertible securities;

(2) (where applicable) any new Shares arising from exercising share options or vesting of share awards outstanding or subsisting at the time this Ordinary Resolution is passed, provided the options or awards were granted in compliance with the Listing Requirements; and

(3) any subsequent bonus issue, consolidation or subdivision of Shares;

c. in exercising the authority conferred by this Ordinary Resolution, the Company complies with the Listing Requirements (unless such compliance has been waived by the SGX-ST) and the existing Articles of Association of the Company; and

d. such authority shall, unless revoked or varied by the Company at a general meeting, continue to be in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier. (See Explanatory Note 5)

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7B. That the Directors be and are hereby authorised to:

a. offer and grant options to any full-time confirmed employee (including any Executive Director) of the Company and its subsidiaries who are eligible to participate in the United Industrial Corporation Limited Share Option Scheme (the “Scheme”); and

b. pursuant to Section 161 of the Companies Act, Cap. 50, to allot and issue from time to time such number of Shares in the Company as may be required to be issued pursuant to the exercise of options under the Scheme,

provided that the aggregate number of Shares to be issued pursuant to this Ordinary Resolution shall not exceed 5% of the total issued Shares in the capital of the Company (excluding treasury shares) from time to time. (See Explanatory Note 6)

7C. That:

a. approval be and is hereby given, pursuant to Rule 14.1 of the rules of the Scheme, for the extension of the duration of the Scheme for a period of 10 years from 18 May 2011 to 17 May 2021; and

b. the Directors of the Company and/or any of them be and are hereby severally authorised to complete and do all such acts and things (including executing such documents as may be required) as they and/or he may consider necessary, expedient, incidental or in the interests of the Company to give effect to the transactions contemplated and/or authorised by this Ordinary Resolution. (See Explanatory Note 7)

8. To transact any other ordinary business as may be transacted at an Annual General Meeting of the Company.

By Order of the BoardSusie KohCompany SecretarySingapore, 25 March 2011

NOTE:A member of the Company entitled to attend and vote at this meeting is entitled to appoint one or two proxies to attend and vote in his stead. A proxy need not be a member of the Company. The instrument appointing a proxy or proxies must be deposited at the Registered Office of the Company at 5 Shenton Way #02-16, UIC Building, Singapore 068808 not less than 48 hours before the time appointed for holding the annual general meeting.

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Explanatory Notes:

1. Mr Tan Boon Teik, if re-appointed, will remain as the Audit Committee Chairman and will be considered as an Independent Director pursuant to Rule 704(8) of the SGX-ST Listing Manual.

2. Mr Hwang Soo Jin, if re-appointed, will remain as an Audit Committee Member and will be considered as an Independent Director pursuant to Rule 704(8) of the SGX-ST Listing Manual.

3. Mr James L. Go, if re-appointed, will remain as an Audit Committee Member and will be considered as a non Independent Director pursuant to Rule 704(8) of the SGX-ST Listing Manual.

4. The Audit Committee undertook a review of the fees and expenses of the audit and non-audit services provided by the external auditor, Messrs PricewaterhouseCoopers LLP. It assessed whether the nature and extent of the non-audit services might prejudice the independence and objectivity of the auditor before confirming its re-nomination. It was satisfied that such services did not affect the independence of the external auditor.

5. The Ordinary Resolution 7A proposed above, if passed, will empower the Directors of the Company, from the date of the above Meeting until the next Annual General Meeting, to issue shares in the capital of the Company and to make or grant convertible securities, and to issue shares in pursuance of such convertible securities, without seeking any further approval from Shareholders in general meeting, up to a number not exceeding in total 50% of the total number of issued shares (excluding treasury shares) in the capital of the Company, provided that the total number of issued shares (excluding treasury shares) which may be issued other than on a pro rata basis to Shareholders does not exceed 20%.

6. The Ordinary Resolution 7B proposed above, if passed, will empower the Directors of the Company from the date of the above Meeting until the next Annual General Meeting, to offer and grant options under the Scheme, and to allot and issue shares pursuant to the exercise of such options provided that the aggregate number of shares to be issued pursuant to this Ordinary Resolution 7B does not exceed 5% of the total number of issued shares in the capital of the Company on the day immediately preceding the relevant date(s) on which the offer(s) to grant such options is/are made.

7. The proposed Ordinary Resolution 7C, if passed, will enable the Scheme which expires on 17 May 2011 to continue for a further period of 10 years from 18 May 2011 to 17 May 2021.

Notice of Books Closure Date and Payment Date for First and Final Dividend

NOTICE IS ALSO HEREBY GIVEN that subject to shareholders’ approval being obtained for the proposed first and final dividend (one-tier tax exempt) of 3.0 cents per share for the financial year ended 31 December 2010, the Share Transfer Books and the Register of Members of the Company will be closed from 17 May 2011 to 19 May 2011, both dates inclusive, for the preparation of dividend warrants. Duly completed transfers received by the Company’s Share Registrar, Messrs KCK CorpServe Pte Ltd at 333 North Bridge Road, #08-00 KH KEA Building, Singapore 188721 up to 5.00 p.m. on 16 May 2011 will be registered to determine shareholders’ entitlement to the proposed dividend. Shareholders whose securities accounts with The Central Depository (Pte) Limited are credited with ordinary shares in the capital of the Company as at 5.00 p.m. on 16 May 2011 will be entitled to the proposed dividends. The proposed dividends, if approved, will be paid on 27 May 2011.

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UNITED INDUSTRIAL CORPORATION LIMITEDCompany Registration No. 196300181EIncorporated in the Republic of Singapore

PROXY FORM ANNUAL GENERAL MEETING

IMPORTANT1. For investors who have used their CPF monies to buy shares

in the capital of United Industrial Corporation Limited, this document is forwarded to them at the request of their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.

I/We (Name)

of (Address)being a member/member(s) of United Industrial Corporation Limited (the “Company”), hereby appoint:

Name Address NRIC/Passport No.Proportion of

Shareholdings (%)

and/or (delete as appropriate)

Name Address NRIC/Passport No.Proportion of

Shareholdings (%)

or failing him/her/them, the Chairman of the Meeting, as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll at the 49th Annual General Meeting of the Company to be held at 80 Raffles Place, 61st Storey, UOB Plaza 1, Singapore 048624 on 27 April 2011 at 3.00 p.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the Meeting as indicated below. If no specific direction as to voting is given, the proxy/proxies will vote or abstain from voting at his/her/their discretion.

No. Resolutions For * Against*

1 Adoption of Directors’ Report and Audited Financial Statements

2 Declaration of a First and Final Dividend tax-exempt (one-tier)

3 Approval of Directors’ fees

4 Re-election of Mr Wee Ee Lim retiring by rotation in accordance with Article 104 of the Company’s Articles of Association

5 Re-appointment of Directors retiring pursuant to Section 153(6) of the Companies Act, Cap. 50

(a) Dr Wee Cho Yaw

(b) Dr John Gokongwei, Jr.

(c) Mr Tan Boon Teik

(d) Mr Hwang Soo Jin

(e) Mr Antonio L. Go

(f) Mr James L. Go

(g) Mr Gwee Lian Kheng

6 Re-appointment of Auditors

7A Authority for Directors to issue shares (Section 161 of the Companies Act, Cap. 50 and SGX-ST Listing Manual)

7B Authority for Directors to issue shares pursuant to the United Industrial Corporation Limited Share Option Scheme

7C Extension of the United Industrial Corporation Limited Share Option Scheme

8 Any Other Business

* Please indicate your vote “For” or “Against” with an “X” within the box provided.

Dated this day of 2011 Total Number of Shares held

Signature (s) or Common Seal of Member(s)

IMPORTANT: PLEASE READ NOTES OVERLEAF BEFORE COMPLETING THIS PROXY FORM

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Notes:

1. Please insert the total number of shares held by you. If you have shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Cap. 50), you should insert that number of shares. If you have shares registered in your name in the Register of Members, you should insert that number of shares. If you have shares entered against your name in the Depository Register and shares registered in your name in the Register of Members, you should insert the aggregate number of shares entered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted, this instrument appointing a proxy or proxies shall be deemed to relate to all shares held by you.

2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote in his stead. A proxy need not be a member of the Company.

3. Where a member appoints more than one proxy, he shall specify the proportion of his shareholding (expressed as a percentage of the whole) to be represented by each proxy. If no such proportion or number is specified, the first named proxy shall be deemed to represent 100 per cent of the shareholding and the second named proxy shall be deemed to be an alternate to the first named proxy.

4. Completion and return of this instrument appointing a proxy shall not preclude a member from attending and voting at the meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the meeting in person, and in such event, the Company reserves the right to refuse to admit any person or persons appointed under this instrument of proxy, to the meeting.

5. The instrument appointing a proxy or proxies must be deposited at the Registered Office of the Company at 5 Shenton Way, #02-16 UIC Building, Singapore 068808 not less than 48 hours before the time appointed for the Annual General Meeting.

6. The instrument appointing a proxy or proxies must be under the hand of the appointor or his attorney duly authorised in writing. Where the appointor is a corporation, the instrument of proxy must be executed either under its common seal or under the hand of its duly authorized officer or attorney. Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.

7. A corporation which is a member may authorise, by resolution of its directors or other governing body, such person as it thinks fit to act as its representative at the Annual General Meeting, in accordance with its Articles of Association and Section 179 of the Companies Act, Cap. 50.

8. Agent Banks acting on the request of CPF Investors who wish to attend the meeting as observers are required to submit in writing, a list with details of the investors’ name, NRIC/Passport numbers, addresses and numbers of shares held. The list, signed by an authorized signatory of the agent bank, should reach the Company Secretary at the registered office of the Company not later than 48 hours before the time appointed for holding the meeting.

General:

The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of members whose shares are entered against their names in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if such members are not shown to have shares entered against their names in the Depository Register 48 hours before the time appointed for holding the Annual General Meeting as certified by The Central Depository (Pte) Limited to the Company.

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CONTENTS

01Group Financial Highlights

100Five Year Summary

19Corporate Data

05Board of Directors 104

Principal Subsidiaries & Associated Companies

29Property Activities Summary

02Chairman’s Statement

102Statistics of Shareholdings

20Management Review

09Corporate Governance Report

105Notice of Annual General Meeting

Proxy Form

28Human Resource

31Financial Report

22Property Portfolio

27Trading & Services


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ANNUALREPORT

2010Incorporated in the Republic of Singapore(Company Registration No. 196300181E)5 Shenton Way #02-16 UIC Building Singapore 068808Tel: 6220 1352 Fax: 6224 0278Website: www.uic.com.sg


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