United U-Ll Corporation Berhad (510737-H)

(Incorporated in Malaysia under the Companies Act, 1965)

ANNUAL REPORT

2009

United U-Ll Corporation Berhad (510737-H)(Incorporated in Malaysia under the Companies Act, 1965)

No. 33, Jalan Kartunis U1/47, Temasya Industrial Park, Seksyen U1, 50150 Shah Alam, Selangor Darul Ehsan, MalaysiaTel: +(603) 5569 5999 (Hunting Line) Fax: +(603) 5569 1666

email: hq@uli.com.my website: www.uli.com.my

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United U

-Ll Corporation Berhad (510737-H)

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CONTENT

2 CHAIRMAN’SSTATEMENT

4 DIRECTORATE&CORPORATEINFORMATION

5 PROFILEOFDIRECTORS

8 CORPORATEGOVERNANCESTATEMENTS

14 AUDITCOMMITTEEREPORT

18 STATEMENTONINTERNALCONTROL

19 FINANCIALSTATEMENTS

62 ADDITIONALCOMPLIANCEINFORMATION

63 PROPERTIESOFTHEGROUP

65 SHAREHOLDERS’INFORMATION

67 NOTICEOFTENTHANNUALGENERALMEETING

69 STATEMENTACCOMPANYING NOTICEOFTENTHANNUALGENERALMEETING

ENCLOSED PROXYFORM

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Chairman’s Statement

DearValuedShareholders,

OnbehalfoftheBoardofDirectors,IampleasedtopresenttheAnnualReportofUnitedU-LiCorporationBerhad(“Company”or“Group”)forthefinancial year ended 31December2009(“FY2009”).

Financial Performance Review

Following the escalation of the global financial crisis and sharp plunge of crudesteelpricesworldwidesincemid2008,thesteelindustry,includingdownstream steel finished goods manufacturer such as United U-Li CorporationBerhad,facedtremendouschallenges.In2009,Malaysia’sown financial performance deteriorated, when our GDP contracted by -1.7%y-o-yin2009againsta2008GDPgrowthof+4.6%y-o-y.However,theGroupwasabletoweatherbothglobalandlocalmarketchallengesand managed to register a favourable financial performance in FY2009.

ForFY2009, theGroup registered slightly lower revenue, adecreaseby 11.7% from RM157.8 million to RM139.3 million, compared to thefinancial year ended 31 Dec 2008 (“FY2008”). Overall, the Group’s revenueregistereda5-yearcompoundedannualgrowthrateof13.8%perannumfromFY2004toFY2009,increasingfromRM73.0milliontoRM139.3million.

In contrast, the Group registered higher profit before taxation of RM30.0 millioninFY2009comparedtothepreviousyearatRM27.4million,anincrease of 9.5% y-o-y. The improvement of the Group’s profitability was attributed to the improvement of profit margin which was in line with the recoveryofcrudesteelpricesglobally,coupledwithlargerproportionofsales to higher profit margin projects and commercial segment in 2009. The Group registered a net profit attributable to shareholders of RM21.7 millioninFY2009,whichtranslatedintoearningspershareof16.4sen.

The Group’s shareholders fund has further strengthened to RM139.1millionasatend2009fromRM121.1millionasatend2008.Netassetspershareincreasedfurtherto105.4senpershareasatend2009from91.7senpershareasatend2008,aconsistentimprovementforthepast4consecutiveyearssince2005.

Financial Position and Liquidity Remain Resilient

Whileitisimpossibletopredictthescaleanddepthofthecurrentglobaleconomiccrisis,theGrouphastakenprudentanddynamicapproachesin its financial management amidst tighter credit market condition in the present financial system. The Group has focused on cash conservation and lowering capital expenditure and investment temporarily except for newproductssegmentwithvisibledemand.

The Group has strengthened its balance sheet to enable the Groupwithstandadverseoperatingenvironmentin2009,wheretheMalaysianGDPregistered3consecutivequartersofnegativeGDPgrowthfrom1Q2009until3Q2009beforeitreboundedto+4.5%y-o-yin4Q2009.Fromanetdebttototalequityratioof0.07timesasatend2008,theGrouphadturnedintonetcashpositionofRM15.7millioncashasatend2009.WithacashhoardofRM37.2millionasatend2009,thiswillbetterequiptheGrouptoweatherthecontinuouslychallengingmarketconditionandcaptureopportunitiesthatmayarisewhentheglobaleconomyrecoversgraduallyin2010.

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Chairman’s Statement(Cont’d)

With operating cash inflow of RM29.8 million achieved in FY2009, the Group’s financial liquidity remained healthy. Overall, even with lower quantum of operating cash inflow as compared to FY2008, the net cash increase during the financial period has improved tremendously to RM21.5 million in FY2009 from RM12.4 million in FY2008. These was mainly contributed by lower investing cash outflow and financing cash outflow in FY2009 as compared in FY2008.

The cash balance conserved as at end FY2009 was RM37.2 million, a sharp increase of 121.8%, against RM16.8 million as at end FY2008. With a healthy balance sheet and liquidity position, coupled with practical financial management steps undertaken by the Group, the management has positioned the Group to be able to seize any market opportunity which may arise and to mitigate the effects of possible economic downturn in the near future.

Corporate Social Responsibility

The Group is committed to Corporate Social Responsibility (“CSR”) by integrating it into business operations.

Activities implemented do not only improve the skills and competency of personnel, they also create an awareness that the Group cares for their well being.

The Group continues to place great importance on the need to protect our environment. The Group’s business responsibility, while geared towards increasing profitability, is also to maintain good manufacturing practices and to adhere to national environmental policies at all times.

Reward to Shareholders - Dividend

The Board of Directors recommends a final dividend of 1.5 sen per share, subject to the approval of the shareholders at the 10th Annual General Meeting.

Acknowledgement

On behalf of the Board, I would like to extend my heartfelt gratitude to our shareholders, bankers, customers, business partners and regulatory authorities for their continued support, guidance and assistance extended to the Group. The Board would like to express its appreciation to the management and employee of the Group for their hard work and dedication.

Dato’ Wira Abd Rahman bin IsmailChairman

Date : 6 April 2010

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Board of Directors Dato’ Wira Abd Rahman bin Ismail(Independent Non-Executive Chairman)

Dato’ Lee Yoon Wah (Group Managing Director/ Chief Executive Officer)

Dato’ Lee Yoon Kong(Executive Director)

Teow Lai Seng(Executive Director)

Chim Wai Khuan(Independent Non-Executive Director)

Wong Chow Lan(Independent Non-Executive Director)

Lokman bin Mansor(Independent Non-Executive Director)

Shariff bin Mohd Shah(Non-IndependentNon-Executive Director)

Secretaries KoaySooNgoh(MAICSA0856746)FooLiLing(MAICSA7019557)

Registered Office62C,JalanSS21/62Damansarautama47400PetalingJayaSelangorDarulEhsanTelNo. :+(603)77272806/ 77293337Fax No. : + (603) 7729 3619

Head/Management Office33,JalanKartunisU1/47TemasyaIndustrialParkSeksyenU140150ShahAlamSelangorDarulEhsanTelNo. :+(603)55695999Fax No. : + (603) 5569 1666e-mail :hq@uli.com.myWebsite:www.uli.com.my

Manufacturing PlantsLot7,Jalan6/1KawasanPerindustrianSeriKembangan43300SeriKembanganSelangorDarulEhsan

25&27JalanTamingLimaTamanTamingJaya43300SeriKembanganSelangorDarulEhsan

Lot5(PT7907),JalanBalakong43300SeriKembanganSelangorDarulEhsan

Lot44,JalanCetakTasekIndustrialEstate31400Ipoh,PerakDarulRidzuan

Branch Office1 Jalan Seroja 54TamanJohorJaya81100JohorBahruJohorDarulTakzim

RegistrarSymphonyShareRegistrarsSdn.Bhd.Level6,SymphonyHouseBlockD13PusatDaganganDana1JalanPJU1A/4647301PetalingJayaSelangorDarulEhsanTelNo. :+(603)78418000Fax No. : + (603) 7841 8008

AuditorsBakerTillyMonteiroHengCharteredAccountants

Audit CommitteeChimWaiKhuan(Chairman)WongChowLanLokmanbinMansor

Remuneration CommitteeDato’WiraAbdRahmanbinIsmail(Chairman)ChimWaiKhuanWongChowLan

Nomination CommitteeDato’WiraAbdRahmanbinIsmail(Chairman)ChimWaiKhuanWongChowLan

Group Principal BankersUnitedOverseasBank(Malaysia)Berhad39-45,JalanOthman46000PetalingJayaSelangorDarulehsan

EONBankBerhadLot43&45,JalanUSJ10/1GTaipanTriangle47620SubangJayaSelangorDarulehsan

Solicitors Cheang&AriffAdvocates&Solicitors39Court@LokeMansion273A,JalanMedanTuanku50300KualaLumpur

Tay&HelenWongSuite703,BlockF,PhileoDamansaraI9Jalan16/11,46350PetalingJayaSelangorDarulehsan

Stock Exchange ListingMainBoardofBursaMalaysiaSecuritiesBerhadStockCode:7133

Products ManufacturedCableSupportSystemsCableManagementSystemsIntegratedCeilingSystemsSteelRoofBattensBuildingMaterialsLightFittings

Directorate & Corporate Information

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Dato’ Wira Abd Rahmanbin IsmailIndependent Non-Executive Chairman

Dato’ Wira Abd Rahman b inIsmail, a Malaysian, aged 81, isan Independent Non-executive DirectorandtheChairmanofULC.He was appointed to the Boardon 21 February 2002. He is alsothe Chairman of the NominationCommittee and RemunerationCommit tee.He completed hissecondaryeducationatSultanAbdulHamid College,Alor Star, KedahDarulAmanin1949.HeservedintheRoyalMalaysianPoliceForcesince1950, holding various posts until1985whenheretiredastheDeputyInspectorGeneralofPolice.Duringhistenureofservice,herepresentedMalaysiainvariousInterpolanddrugenforcement/conferences/seminars/committees at international andregionallevels.From1979to1982,he was elected as an executive Committee Member of Interpoland was subsequently elected asVice President of Interpol from1984 up to 1985. He tendered hisresignationduetohisretirementfromthe Royal Malaysian Police Force.HesitsontheBoardofallsubsidiarycompaniesofthegroup.HealsositsontheBoardofTSMGlobalBerhadand KYM holdings Bhd., both ofwhichare companies listedon theBursaSecuritiesandseveralprivatelimitedcompanies.Hedoesnothaveany family relationship with anyDirector and/or major shareholder of the Company and has no conflict ofinterestwiththecompany.Hehasnoconvictionsforoffenceswithinthepast ten (10) years other than fortraffic offences, if any. He attended allBoardMeetingsoftheCompanyheld in the financial year ended 31 December2009.

Dato’ Lee Yoon WahGroup Managing Director/Chief Executive Officer

Dato’LeeYoonWah,aMalaysian,aged 51, is the Group ManagingDirector/Chief Executive Officer of ULC.HewasappointedtotheBoardon21February2002.Hecompletedhissecondaryeducationin1975andisoneofthefoundermembersoftheULCGroup.Presently,heisinchargeof the overall management andgrowthof theGroup.Hehasmorethan 21 years’ working experience in theelectricalindustry.HeiscreditedforchartingthegrowthoftheGroupsince its inception from a smalloperation to an industrial concernas it is today.As the driving forcebehindtheGroup’sgrowth,heisalsoresponsiblefortheoverallbusinessdevelopment,strategicplanningaswellasthebusinessandcorporatedevelopmentoftheGroup.HealsositsontheBoardofallthesubsidiarycompaniesof theGroup.He is thebrother to Dato’ Lee Yoon Kong,major shareholder and Director of the Company. He has no conflict of interestwiththeCompanyandhasno convictions for offences withinthepastten(10)yearsotherthanfortraffic offences, if any. He attended allBoardMeetingsoftheCompanyheld in the financial year ended 31 December2009.

Dato’ Lee Yoon KongExecutive Director

Dato’LeeYoonKong,aMalaysian,aged 50, is an executive Director of ULC. He was appointed to theBoardon21February2002.He isoneofthefoundermembersoftheULC Group. He holds a Diplomain Electrical Engineering. Prior tojoining United U-LI (M) Sdn. Bhd. (“ULSB”),asubsidiarycompanyofULC, he was the electronicsTechnicianwithAmateurPhotoStoreSdn. Bhd., the locally appointedagentforAKAIproducts,from1979to1983.Hehasmorethan21years’working experience in the electrical industry and has contr ibutedsignificantly towards the growth of the Group.Presently,heisresponsiblefor the technical, production andmanufacturing functions of theGroup.HealsositsontheBoardofallthesubsidiarycompaniesoftheGroup.HeisthebrothertoDato’LeeYoon Wah, major shareholder and DirectoroftheCompany.Hehasnoconflict of interest with the Company andhasnoconvictionsforoffenceswithinthepastten(10)yearsotherthan for traffic offences, if any. He attendedallBoardMeetingsof theCompany held in the financial year ended31December2009.

Profile of Directors

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Teow Lai SengExecutive Director

TeowLaiSeng,aMalaysian,aged48, is an executive Director of ULC. Hewasappointed to theBoardon21 February 2002. He has morethan 19 years’ working experience intheelectricalindustry.HeholdsaDiplomainElectronicsEngineeringandwastheTechnicalandServiceTechnician with Amateur PhotoStore Sdn. Bhd. prior to joining ULSB as a Factory Supervisorin 1982. He was subsequentlypromoted to Factory Manager in1990 and is responsible for theoverallmanagementandproductionoperationsofthefactory.Healsositson the Board of certain subsidiarycompaniesoftheGroup.HedoesnothaveanyfamilyrelationshipwithanyDirector and/or major shareholder of the Company and has no conflict of interestwith theCompany.Hehasno convictions for offences withinthepastten(10)yearsotherthanfortraffic offences, if any. He attended allBoardMeetingsoftheCompanyheld in the financial year ended 31 December2009.

Profile of Directors(Cont’d)

Chim Wai KhuanIndependent Non-Executive Director

ChimWaiKhuan,aMalaysian,aged59, is an Independent Non-executive DirectorofULC.HewasappointedtotheBoardon21February2002.He is also the Chairman of theAudit Committee and a memberof the Nomination Committee andRemuneration Committee. He isan accountant by training and iscurrentlyamemberoftheMalaysianInstitute ofAccountants. He hasvast experience in the areas of accounting, audit, tax and corporate secretarialandconsultancymatters,havingservedinvariouscapacitiesboth in the united Kingdomand inMalaysiafrom1975to2000.Currently,heispractisingasaCorporateandManagement Consultant and alsomanages his own audit practiceunder the name of WK Co. Heis also the Independent DirectorandAudit Committee Member ofAdvance Synergy Capital BerhadandAdvanceSynergyBerhad,bothcompanieslistedontheMainBoardofBursaMalaysiaSecuritiesBerhad.HealsositsontheBoardofseveralprivatelimitedcompanies.Hedoesnot have any family relationshipwith any Director and/or major shareholder of the Company andhas no conflict of interest with the Company. He has no convictionsforoffenceswithinthepastten(10)years other than for traffic offences, if any.HeattendedallBoardMeetingsof the Company held in the financial yearended31December2009.

Wong Chow LanIndependent Non-Executive Director

Wong Chow Lan, a Malaysian,aged 48, is an Independent Non-executive Director of ULC. She was appointed to the Board on 11April 2000. She is also a memberof the Nomination Committee,RemunerationCommitteeandAuditCommittee.SheholdsaDiplomainBusiness Management from Kolej Tunku Abdul Rahman and is aqualified Chartered Secretary of the Institute of Chartered SecretariesandAdministrators since 1992.Atpresent,sheisanassociatememberofTheMalaysianAssociationofTheInstitute of Chartered SecretariesandAdministrators. Currently, sheis attached to a consultancy firm. At present, she also sits on theBoard of several private limitedcompanies.ShedoesnothaveanyfamilyrelationshipwithanyDirectorand/or major shareholder of the Company and has no conflict ofinterestwiththeCompany.Shehasno convictions for offences withinthepastten(10)yearsotherthanfortraffic offences, if any. She attended allBoardMeetingsoftheCompanyheld in the financial year ended 31 December2009.

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Profile of Directors(Cont’d)

Lokman bin MansorIndependent Non-Executive Director

Lokman bin Mansor, a Malaysian,aged 50, is an Independent Non-executive Director of ULC. He wasappointed to theBoardon21February2002.HeisalsoamemberoftheAuditCommittee.HegraduatedwithaBachelorofArchitecturefromAdelaideUniversity,Australiain1984andispresentlyacorporatememberofPertubuhanAkitekMalaysiaandaregisteredarchitectwithLembagaAkitek Malaysia. From 1981 to1982, he was attached with CSL&Associates in the capacity ofArchitecturalAssistant.In1984,hejoined Pakatan Reka Architects as anAssistantArchitectbeforetakingup a lecturing position with InstitutTeknologiMarain1986.From1987to 1991, he was appointed as aDirector of Binateras-DeGArkitekSdn. Bhd.. In 1991, he foundedAdvocadArchitectandheiscurrentlythe senior partner of the firm. He has gained vast experience in the area of development and project management in implementationof projects and is also well versed in the various aspects related toproperty investment, financing and market assessment. he does nothaveanyfamilyrelationshipwithanyDirector and/or major shareholder of the Company and has no conflict of interestwith theCompany.Hehasno convictions for offences withinthepastten(10)yearsotherthanfortraffic offences, if any. He attended all except two Board Meetings held in the financial year ended 31 December2009.

Shariff bin Mohd ShahNon-Independent Non-ExecutiveDirector

ShariffbinMohdShah,aMalaysian,aged61,isanNon-IndependentNon-executive Director of ULC. He was appointedtotheBoardon1October2003.HegraduatedwithaBachelorofEconomics(Hons)fromUniversityofMalayain1971.Upongraduationhe joined the Administrative and DiplomaticService(PTD)andpostedto the Government Staff TrainingCentre and then to the Ministry ofForeignAffairs.Heleftgovernmentservice in 1975 to join Borneo Company (1975) Sdn. Bhd. asMarketing Executive until 1978. He was Marketing Director of theNational Livestock DevelopmentCorporation between 1978 until1981. He took up appointment asManager,GuthrieMalaysiaTradingCorporation in 1983 and was theSenior General Manager of thecompanywhenhe left in1997.Hehas wide experience in international tradingandmarketingandcurrentlysitsontheBoardofseveralprivatelimited companies. He does nothaveanyfamilyrelationshipwithanyDirector and / or major shareholder of the Company and has no conflict ofinterestwiththeCompany.Hehasnoconvictionsforoffenceswithinthepast ten (10) years other than fortraffic offences, if any. He attended allBoardMeetingsoftheCompanyheld in the financial year ended 31 December2009.

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Corporate Governance Statements

TheBoardofDirectorsofUnitedU-LICorporationBerhad(“theBoard”)fullyappreciatestheimportanceofadoptinghighstandardsofCorporateGovernancewithintheGroup.TheBoardiscommittedtoensuringthatthehigheststandardsofCorporateGovernanceareconsistentlyobservedbytheGroup.ApartfromobservanceofthePrinciplesandBestPracticesonCorporateGovernanceassetoutintheMalaysianCodeonCorporateGovernance(Revised2007)(’theCode”),theBoardhasalsomovedtoputinplacestringentparametersandmeasuresforadherencebythemanagement.

BypromotingintegrityandprofessionalisminthemanagementoftheGroup’saffairs,theBoardacknowledgesthecorporategovernancetenetsoftransparency,accountability,integrityandcorporategovernanceastheprerequisitesofaresponsiblecorporatecitizen.

The Board is therefore pleased to report that during the financial year ended 31 December 2009, it had practiced goodcorporategovernance indirectingandmanagingthebusinessaffairsof theCompanyand itssubsidiaries(“theGroup”).

BOARDOFDIRECTORS

Board Composition and Balance

The Board currently comprises eight (8) members, three (3) of whom are Executive Directors and five (5) Non-executive Directors. Four (4) Non-Executive Directors are independent and hence fulfill the prescribed requirements forone-third(1/3)ofthemembershipoftheBoardtobeindependentMembers.

The composition and size of the Board is a well-balanced with an effective mix of executive Directors and Independent Non-executive Directors, which is in line with the Code and with the right mix of skills and experience. This balance enables theBoard toprovideclearandeffective leadership to theGroupandfacilitates theBoard inmakingofinformedandcriticaldecisionsonmanyaspectsoftheGroup’sstrategiesandperformances.TheBoardstructurealsoensuresthatnoindividualorgroupofindividualsdominatestheBoard’sdecisionmakingprocess.

The executive Directors who have good knowledge of the business are responsible for implementing corporate strategiesandpoliciesaswellaschargedwiththemanagementoftheday-to-dayoperationsofthebusiness.TheIndependentDirectorsplayapivotalroleincorporateaccountability.

TheIndependentDirectorsareindependentofmanagementandfreefromanybusinessrelationshipwhichcouldmaterially interfere with the exercise of their judgement or the ability to act in the best interests of the Group and of the minority shareholders. The presence of the Independent Non-executive Directors are essential in providing the Group with a wider general experience of strategy formulation, unbiased and independent opinions, advices, judgements, objective view of the performance of the management and professionalism to ensure that adequate systemsareusedtosafeguardtheinterestsnotonlytotheGroup,butalsotominorityshareholdersandstakeholdersoftheGroup.

ThereisaclearanddistinctdivisionofresponsibilitiesbetweentheChairmanandtheManagingDirectortoensureaproperbalanceofpowerandauthority.TheChairmanleadstheBoardinsettingvaluesandstandardsoftheGroupandisresponsiblefortheeffectiveconductoftheBoard.heensuresthatinformationrelatingtoissuesonagendaisdisseminatedtoallDirectorswellbeforedeliberationatBoardmeetingsandfacilitatestheconstructiverelationsbetween the executive and Non-executive Directors whilst the Managing Director has overall responsibility over the operatingunits,organisationaleffectiveness,coordinatingthedevelopmentandimplementationofbusinessandcorporatestrategyaswellastheimplementationofBoardpoliciesanddecisions.

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Corporate Governance Statements(Cont’d)

Board Responsibilities

TheBoardretainsfullandeffectivecontroloftheGroupandisresponsiblefortheoverallperformanceoftheGroupfocusingonitsstrategicplans,businessperformance,successionplanning,riskmanagement,aswellasreviewingtheadequacyandintegrityofitsinternalcontrolandmanagementinformationsystems.

The Board meets regularly to review the Group’s corporate strategies, business operations and financial performance. Matters significant to the Group’s business and finances including approval of quarterly results and annual report, annual budget, major capital expenditure, material acquisition and disposal of assets are also discussed at these meetings.

Board Meetings and Supply of Information

ToensureeffectivemanagementoftheGroup,Boardmeetingsareconvenedregularlyduringtheyear,atquarterlyintervals or as and when necessary. During the financial year seven (7) Board meetings took place.

Details of the attendance of the Directors at the Board meetings held in the financial year ended 31 December 2009 areasfollows:

Name of Director No. of Meetings AttendedDato’WiraAbdRahmanbinIsmail 7/7Dato’LeeYoonWah 7/7Dato’LeeYoonKong 7/7TeowLaiSeng 7/7ChimWaiKhuan 7/7WongChowLan 7/7LokmanbinMansor 5/7ShariffbinMohdShah 7/7

AllDirectorsareprovidedwithanagendainclusiveofrelevantBoardpaperspriortoeachBoardmeeting.TheBoardpapersincludeminutesofthelastBoardmeeting,agendaforthecurrentmeetingandanyreportanddocumentspertaining to the issues to be discussed at the meeting. The Board papers are issued in sufficient time to enable the Directorstoobtainacomprehensiveunderstandingoftheissuestobedeliberatedupontoenablethemtoarriveataninformeddecision.TheChairmanoftheBoardchairstheBoardmeetingswhiletheManagingDirectorleadsthepresentation and provides explanations on the Board reports. Senior Management staff may be invited to attend the Board meetings to explain and clarify matters being tabled.

In addition to quarterly Board meetings, briefings are conducted for the Board from time to time on various issues such aschangestocompanyandsecuritieslegislations,rulesandregulationstoinformthemofthelatestdevelopmentsin these areas. The Directors are also notified of any corporate announcements released to the Bursa Securities. TheyarealsoinformedoftheimpendingrestrictionindealingwiththesecuritiesoftheCompanyatleastonemonthprior to the release of the quarterly financial result announcement.

In exercising their duties, the Board has unrestricted access to timely and accurate information which is not only quantitativebutalsootherinformationdeemedsuitablewithintheGroup,whetherasafullBoardorintheirindividualcapacity.AllDirectorsalsohavedirectaccesstotheadviceandtheservicesoftheGroup’sCompanySecretaryincarryingouttheirduties.Inaddition,theBoardmayalsoseekprofessionalopinionandindependentadvicefromexternal consultants, if necessary, at the Company’s expense.

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Corporate Governance Statements(Cont’d)

Appointment and Re-election of Board Members

TheCodeprovidesgreaterclarityontheaspectsofwhichNominationCommitteeshouldconsiderwhenrecommendingcandidatesfordirectorship.TheCodefurtherplacestheimportanceof theDirectorappraisalwhereNominationCommitteeshouldensurethatitsassessmentsandevaluationsareproperlydocumented.

InaccordancewiththeCompany’sArticlesofAssociation,allDirectorsarerequiredtosubmitthemselvesforre-electionbyrotationatleastonceineverythree(3)yearsateachAnnualGeneralMeeting(“AGM”).NewlyappointedDirectorsshall hold office until the AGM following their appointment and shall then be eligible for re-election by shareholders. The proposed appointment of new Board members, resignation of existing members, as well as the proposed re-electionoftheDirectorsareapprovedbytheBoardupontherecommendationoftheNominationCommittee.

The Articles of Association also requires that at least one-third (1/3) of the Directors including executive Directors, to retire from office by rotation and be eligible for re-election at every AGM. All Directors shall submit for re-election atleastonceeverythree(3)yearsfromthedateofappointmentincompliancewiththeListingRequirementsoftheBursaSecurities.

PursuanttoSection129(2)oftheCompaniesAct,1965,Directorswhoareoverseventy(70)yearsofagearerequiredtosubmitthemselvesforre-appointmentannually.

TheBoard,throughitsdelegationtotheNominationCommittee,hassetupandimplementedtheprocessfortheassessments of its Chairman, the individual Board Members and the Board as a whole. For the financial year ended 31 December 2009, the Board has, through the Nomination Committee, reviewed the skills mix and experience of theindividualDirectorsandassessedtheeffectivenessoftheBoardasawhole.

Director’s Training

All Directors have attended the MandatoryAccreditation Programme (“MAP”) and the Continuing EducationProgramme(“CEP”)prescribedbytheBursaSecurities.TheDirectorswillcontinuetoattendotherrelevanttrainingprogrammestokeepabreastwithdevelopmentsonacontinuousbasisincompliancewiththeListingRequirementsofBursaSecurities.

Inaddition,theDirectorsaremindfulthattheyshouldreceivecontinuoustrainingprogrammestoequipthemselveswiththeknowledgetodischargetheirdutieseffectively.

Board Committees

In order to ensure the effective discharge of its fiduciary duties, the Board has established various Board Committees toassisttheBoardintherunningoftheGroup.ThisistoallowthemembersoftheBoardCommitteestodeliberateand examine issues within their terms of reference in greater details and subsequently recommend and report to theBoard.Thefunctionsandtermsofreferenceofthecommittees,aswellastheauthoritydelegatedbytheBoardto these committees, have been clearly defined and approved by the Board. All Board Committees do not have executive powers but only the power to make recommendations to the Board.

The Board Committees for the financial year under review are as follows:

(a) Audit Committee

Audit Committee operates under a clearly defined Terms of Reference stating its roles and responsibilities in ensuringthequalityandintegrityofthepracticesoftheGroup.

The Audit Committee presently comprises three (3) members, all of whom are Independent Non-executive Directors:

i) Chim Wai Khuan (Independent Non-Executive Director) - Chairmanii) Wong Chow Lan (Independent Non-Executive Director)iii) Lokman bin Mansor (Independent Non-Executive Director)

The Audit Committee has held a total of five (5) meetings during the course of the financial year ended 31 December2009.

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Corporate Governance Statements(Cont’d)

(b) Nomination Committee

TheNominationCommitteeisresponsibleforensuringtheBoardhastheappropriatebalanceandsize,andrecommending the right candidates with the necessary mix of skills, experience and competencies to be appointedtotheBoard.ThemembershipoftheCommitteehasnotchangedsincethelastreport.

The Nomination Committee comprises three (3) members, all of whom are Independent Non-executive Directors:

i) Dato’ Wira Abd Rahman bin Ismail (Independent Non-executive Chairman) -Chairmanii) Chim Wai Khuan (Independent Non-executive Director)iii) Wong Chow Lan (Independent Non-executive Director)

MeetingsoftheNominationCommitteeareheldasandwhenrequired.

TheTermsofReferenceoftheNominationCommitteeareasfollows:

• toreview,recommendandconsidersuitablecandidatestotheBoardoftheGroup,includingcommitteesoftheBoard;

• to review and determine the mix of skills, experience and other qualities, including core competencies

of Non-executive Directors, on an annual basis;

• toassesstheDirectorsonanon-goingbasisandtheeffectivenessoftheBoardasawhole,thecommitteesof the Board and the contribution of each individual Director, including Independent Non-executive Directors as well as chief executive officer;

• torecommendsuitableorientation,educationalandtrainingprogrammestocontinuouslytrainandequipthe existing and new Directors;

• toprovideasuccessionplanningpolicyandensurethatthepolicyiskeptunderreview;

• to examine particular issues and make the appropriate recommendations to the Board; and

• toensurethecompositionoftheBoardisinaccordancewiththeMemorandumandArticlesofAssociationandtherequirementsforBestPracticeofCorporateGovernance.

All recommendations of the Nomination Committee are subject to the endorsement of the Board.(c) Remuneration Committee

TheRemunerationCommitteeisresponsibleforcarryingoutannualreviewswhereuponrecommendationsaresubmitted to the Board on the overall remuneration policy for Directors and Key Senior Management Officers, to ensure that the remuneration policy remains in support of its corporate objectives and shareholder value, andisintandemwithitscultureandstrategy.

The Remuneration Committee comprises three (3) members, all of whom are Independent Non-executive Directors:

i) Dato’ Wira Abd Rahman bin Ismail (Independent Non-executive Chairman) -Chairmanii) Chim Wai Khuan (Independent Non-executive Director)iii) Wong Chow Lan (Independent Non-executive Director)

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Corporate Governance Statements(Cont’d)

MeetingsoftheRemunerationCommitteeareheldasandwhenrequired.

ThetermsofreferenceoftheRemunerationCommitteeareasfollows:

• to establish and review the terms and conditions of employment and remuneration of executive Directors and Key Senior Management Officers of the Group to ensure that rewards commensurate with their contributions to the Group’s growth and profitability; and supports the Group’s objectives and shareholder valueandisconsistentwiththeGroup’scultureandstrategy;

• to review annually the performance of the executive Directors and recommend to the Board specific adjustments in remuneration and/or reward payments if any reflecting their contributions for the year;

• to ensure the level of remuneration for Independent Non-executive Directors reflects their experience and levelofresponsibilitiesundertakenandcontributiontotheeffectivefunctioningoftheBoard.ReviewsandrecommendschangestotheBoardwherenecessary;and

• keep abreast of the terms and conditions of service of the executive Directors including their total remunerationpackageformarketcomparability.ReviewsandrecommendschangestotheBoardwherenecessary.

All recommendations of the Remuneration Committee are subject to the endorsement of the Board.

INVESTORSRELATIONSANDSHAREHOLDERSCOMMUNICATION

TheBoardacknowledges the importanceofmaintaining transparencyandAccountability toall itsstakeholders,particularly its shareholders and investors as it ensures that market credibility and investor’s confidence are maintained. Through extensive disclosures of appropriate and relevant information, using various channels of communication on a timely basis, the Group aims to effectively provide shareholders and investors with information to fulfill transparency and accountability objectives.

At this juncture, the channel of communication to shareholders, stakeholders and general public for the overall performanceandoperationsoftheGroup’sbusinessactivitiesarepressreleases,publicannouncementsonquarterlybasis,annualreportanddisclosurestotheBursaSecurities.

Meetingswithinstitutionalinvestors,fundmanagersandanalystsfromtimetotimeprovideanadditionalavenuefortheBoardandManagementtoconveyinformationaboutGroup’sperformance,strategyandothermattersaffectingshareholders’interests.

TheupcomingAGMrepresentstheprincipalforumfordialogueandinteractionwithshareholders.Thenoticeofmeetingand theannual reportaresentout toshareholdersat least21daysbefore thedateof themeeting inaccordance with the Company’s Articles of Association. A presentation is given by the Chairman to explain the Group’s strategy, performance and major Developments to shareholders during the AGM. Shareholders are accorded both the opportunity and time to raise questions or offer constructive criticism pertaining to the operations and financial matters of the Group; whilst the Board and Senior Management will provide the answers and appropriate clarifications to issues raised. The external auditors will also be present to provide their professional and independent clarification onissuesandconcernsraisedbytheshareholders,ifnecessary.

Besidesthekeychannelsofcommunicationthroughtheannualreport,generalmeetingsandannouncementstoBursa Securities as well as analyst and media briefings, there is also continuous effort to enhance the Group’s website atwww.uli.com.myasachannelofcommunicationandinformationdissemination.ContinuousimprovementanddevelopmentofthewebsitewillbeundertakenbytheGrouptoensureeasyandconvenientaccess.

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Corporate Governance Statements(Cont’d)

ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board aims to provide and present a clear, balanced and meaningful assessment of the Group’s financial position and prospects by ensuring quality financial reporting through the annual financial statements and quarterly financial resultstoitsstakeholders,inparticular,shareholders,investorsandtheregulatoryauthorities.

The Audit Committee assists the Board in scrutinising information for disclosure to ensure the quality of financial reportingandadequacyofsuchinformation,priortosubmissiontotheBoardforitsapproval.AsrequiredbytheCompanies Act, 1965, the Directors are responsible for the preparation of annual financial statements in accordance withapplicableapprovedaccountingstandardsinMalaysiasoastogiveatrueandfairviewofthestateofaffairsof the Group and the Company at the end of each financial year and of the results and cash flows of the Group and of the Company for the financial year. The accounting policies and methods once adopted, are consistently applied and supported by reasonable judgements and estimates.

TheDirectorshaveresponsibilityforensuringthattheGroupkeepsproperaccountingrecordswhichdisclosewithreasonable accuracy at any time, the financial position of the Group and to enable them to ensure that the financial statementscomplywiththeCompaniesAct,1965andapplicableapprovedaccountingstandardsinMalaysia.

Inaddition,theDirectorsarealsoresponsiblefortakingreasonablestepstosafeguardtheassetsfortheGroupandtopreventanddetectfraudaswellasotherirregularities.

Internal Control

TheBoardacknowledgesitsoverallresponsibilityformaintainingasoundsystemofinternalcontrolsthatprovidesreasonable assessment of effective and efficient operations, internal financial controls and compliance with laws and regulationsaswellaswithinternalproceduresandguidelines.TheeffectivenessofthesystemofinternalcontrolsoftheGroupisreviewedperiodicallybytheAuditCommittee.

FurtherdetailsoftheGroup’ssystemofinternalcontrolsaresetoutintheStatementonInternalControlofthisAnnualReport.

Relationship with Auditors

The Board maintains a transparent and professional relationship with the external auditors. The Audit Committee meets with the external auditors at least once a year to discuss their audit plan, audit findings and the financial statements. The Audit Committee also meets the external auditors without the presence of the executive Directors and the management at least twice a year. From time to time, the external auditors highlight to the Audit Committee andtheBoardonmattersthatrequiretheBoard’sattention.

The role of the Audit Committee in relation to both the internal and external auditors is described in the Audit Committee ReportofthisAnnualReport.

Compliance with the Code

The Board is satisfied that the Group has maintained high standards of Corporate Governance and has strived to achievethehighestlevelofintegrityandethicalstandard,inallitsbusinessdealings,includingcompliancewiththeCode throughout the financial year ended 31 December 2009.

ThisStatementismadeinaccordancewiththeresolutionoftheBoard.

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Audit Committee Report

MEMBERS

Chim Wai Khuan (Independent Non-executive Director) - ChairmanWong Chow Lan (Independent Non-executive Director)Lokman bin Mansor (Independent Non-executive Director)

TERMSOFREFERENCE

1. Membership

TheAuditCommitteeshallbeappointedbytheBoardofDirectorsamongsttheDirectorsandshallconsistofnot less than three (3) members, all of whom must be Non-executive Directors, with majority of them being Independent. The chairman who shall be elected by the Audit Committee must be an Independent Non-executive Director.NoalternateDirectorshallbeappointedasamemberoftheAuditCommittee.

TheBoardshallatalltimesensurethatatleastone(1)memberoftheAuditCommittee:i) mustbeamemberoftheMalaysianInstituteofAccountants(“MIA”);orii) if he is not a member of the MIA, he must have at least three (3) years working experience and:

• he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act,1967;or

• he must be a member of one of the associations of accountants specified in Part II of the 1st ScheduleoftheAccountantsAct,1967;or

iii) fulfils such other requirements as prescribed or approved by Bursa Securities.

At least once in every three (3) years, the Board of Directors must review theTerms of Reference andperformanceoftheAuditCommitteeandeachofitsmemberstodeterminewhethertheAuditCommitteeanditsmemberscarriedouttheirdutiesinaccordancetotheTermsofReference.

2. Meetings and Reporting Procedures

TheAuditCommitteeshallconvenemeetingsatleastfour(4)timesayear,ormorefrequentlyastheAuditCommitteeconsidersnecessary.ThechairmanoftheAuditCommittee,orthesecretaryontherequisitionofany members, the head of internal audit or the external auditors, shall at any time summon a meeting by giving reasonable notice. A quorum shall be two (2) members present and majority of which must be Independent Directors.

The chief financial officer and the company secretary, the head of internal audit and a representative of the external auditors shall normally be invited to attend the meetings but may be requested to leave a meeting as andwhendeemednecessarybytheAuditCommittee.OtherBoardmembersandseniormanagementstaffmayattendmeetingsupontheinvitationoftheAuditCommittee.however,theAuditCommitteeshallmeettheexternal auditors without any executive Directors and employees present at least twice a year.

ThecompanysecretaryshallactassecretaryoftheAuditCommittee.Thesecretaryshalldrawupanagenda

foreachmeeting,inconsultationwiththechairmanoftheAuditCommittee.Theagendashallbedistributedtoall members of the Audit Committee and head of internal audit as well as external auditors before the meeting togetherwithsupportingpapers.TheminutesofthemeetingoftheAuditCommitteeshallbesignedbytheChairmanandcirculatedtoallmembersoftheBoard.ThechairmanoftheAuditCommitteeshallreportoneachmeetingtotheBoardandallrecommendationsoftheAuditCommitteeshallbesubmittedtotheBoardforapproval.

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3. Authority

TheAuditCommitteeisauthorisedbytheBoardandatthecostoftheCompanyto:

• investigateanyactivitywithinitsTermsofReference;• havetheinternalauditfunctionreportdirectlytotheAuditCommittee;• havetheresourcesrequiredtoperformitsduties;• havefullandunrestrictedaccesstoanyinformationpertainingtotheCompanyortheGroupforthe

purposeofdischargingitsfunctionsandresponsibilities;• have direct communication channels with the external and internal auditors;• obtain external legal or other independent advice as necessary; and• to convene meeting with the external auditors, the internal auditors or both, excluding the attendance

ofotherDirectorsandemployeesoftheCompany,wheneverdeemednecessary.

4. Responsibilities and Duties

TheresponsibilitiesanddutiesoftheAuditCommitteeshallincludethefollowing:

CorporateFinancialReporting

i) toreviewandrecommendacceptanceorotherwiseofaccountingpolicies,principlesandpractices;ii) to review the quarterly and annual financial statements of the Group and the Company for recommendation

totheBoardofDirectorsforapproval,focusingparticularlyon:• anychangesinorimplementationofnewaccountingpoliciesandpractices;• major judgemental areas, significant and unusual events;• significant adjustments arising from the audit;• thegoingconcernassumptions;and• compliancewiththeapplicableapprovedaccountingstandardsinMalaysia,ListingRequirements

oftheBursaSecuritiesandotherlegalandstatutoryrequirements.iii) to review with management and the external auditors the results of the audit, including any difficulties

encountered.

Corporate Risk Management

i) to review theadequacyofand toprovide reasonableassurance to theBoardof theeffectivenessof riskmanagementfunctionsoftheGroup;

ii) to ensure that the principal and requirements of managing risk are consistently adopted throughout theGroup.

Internal Control

i) to assess the quality and effectiveness of the systems of the internal control and the efficiency of the Group’s operations;

ii) to review the findings on the internal control in the Group by internal and external auditors; andiii) to review and approve the Statement on Internal Control for the annual report as required under Listing

RequirementsofBursaSecurities.

Internal Audit

i) toapprovethecorporateauditchartersofinternalauditfunctionsintheGroup;ii) toensurethattheinternalauditfunctionshaveappropriatestandingintheGroupandhavethenecessary

authorityandresourcestocarryouttheirwork.Thisincludesareviewoftheorganisationalstructure,resources,budgets and qualifications of the internal audit personnel;

iii) toreviewinternalauditreportsandmanagement’sresponseandactionstakeninrespectoftheseandreporttotheBoardaccordingly;

iv) toreviewtheadequacyofthescope,functionsandresourcesoftheinternalauditorsandwhetherithasthenecessaryauthoritytocarryoutitswork;

v) tobeinformedofresignationsandtransfersofseniorinternalauditstaffandprovidingresigning/transferredstaff an opportunity in expressing their views; and

vi) todirectanyspecialinvestigationtobecarriedoutbyinternalaudit.

Audit Committee Report(Cont’d)

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External Audit i) to consider the appointment, resignation and dismissal of external auditors and their audit fee;ii) toreviewtheexternalauditreports,majorfindingsandmanagement’sresponsesandactionstakenthereto.

Whereactionsarenottakenwithinanadequatetimeframebythemanagement,theAuditCommitteewillreport the matter to the Board;

iii) toreviewthenatureandscopeoftheauditbyexternalauditorsbeforecommencement.

Corporate Governance

i) toreviewtheeffectivenessofthesystemformonitoringcompliancewithlawsandregulationsandtheresultsofmanagement’sinvestigationandfollowup(includingdisciplinaryaction)anyinstancesofnon-compliance;

ii) toreviewthefindingsofanyexaminationsbyregulatoryauthorities;iii) toconsideranyrelatedpartytransactionandconflictofinterestthatmayarisewithintheGroupincludingany

transaction,procedureorcourseofconductthatraisesquestionsofintegrity;iv) toreviewandapprovetheStatementofCorporateGovernancefortheannualreportasrequiredunderthe

ListingRequirementsofBursaSecurities;v) toexamineinstancesandmattersthatmayhavecompromisedtheprinciplesofCorporateGovernanceand

reportbacktotheBoard;vi) toreviewtheinvestorrelationsprogrammeandshareholdercommunicationpolicyfortheCompany;vii) todevelopandregularlyreviewtheGroup’scodeofCorporateGovernanceandBusinessethics;viii) wheretheAuditCommitteeisoftheviewthatamatterreportedbyittotheBoardhasnotbeensatisfactorily

resolved,resultinginabreachoftheListingRequirementsoftheBursaSecurities,theAuditCommitteemustpromptlyreportsuchmatterstoBursaSecurities;and

ix) anysuchotherfunctionsasmaybeagreedbytheCommitteeandtheBoard.

MEETINGSANDMINUTES

Duringthefinancialyearended31December2009,five(5)AuditCommitteeMeetingswereheld.DetailsofattendanceofeachCommitteememberwereasfollows:

Name of Committee Member No. of Meetings Attended ChimWaiKhuan 5/5WongChowLan 5/5LokmanbinMansor 3/5

Ateachof theseCommitteeMeetings, theseniormanagementpersonnel, thecompanysecretarytogetherwithrepresentativesoftheexternalauditorswereinattendance.

Audit Committee Report(Cont’d)

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SUMMARY OF ACTIVITIES The Audit Committee carried out its duties in accordance with its Terms of Reference during the financial year ended 31 December 2009. The main activities undertaken by the Audit Committee included the following:

i) reviewed the interim financial reports relating to the quarterly reporting of the Group to ensure adequacy of disclosure of information essential to a fair and full presentation of the financial affairs of the Group for recommendation to the Board for approval for the release of the said quarterly reporting;

ii) reviewed the audited financial statements before submitting them to the Board, ensuring that the financial statements were prepared in accordance with the applicable approved accounting standards and the Companies Act, 1965 in Malaysia. Any significant issues resulting from the audit of the financial statements by the external auditors were deliberated;

iii) evaluated the performance of the external auditors, reviewed the external auditors’ scope of work, audit plan and their audit fees and recommending the appointment of external auditors at the AGM;

iv) reviewed with the external auditors the results of the audit and the management letter (if any), including management’s response;

v) discussed the internal audit plan, programmes and resources requirement and skill levels of the internal auditors for the year and assessed the performance of the internal audit function;

vi) reviewed the internal auditor’s report, which highlighted the audit issues, recommendations and management’s response. Discussed with management, actions taken to improve the system of internal control based on improvement opportunities identified in the internal audit reports;

vii) reviewed the application of Corporate Governance principles and the extent of the Group’s compliance with the Best Practices set out under the Malaysian Code on Corporate Governance for the purpose of preparing the Corporate Governance Statements and Statement on Internal Control pursuant to the Listing Requirements of the Bursa Securities; and

viii) reviewed and discussed Related Party Transactions (“RPT”) and Recurrent Related Party Transactions (“RRPT”) to ascertain if the transactions are conducted at arm’s length and on normal commercial terms, and that the internal control procedures with regards to such transactions are sufficient.

Audit Committee Report(Cont’d)

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Statement on Internal Control

Directors’ Responsibilities

The Board of Directors recognises the importance of maintaining a sound system of internal control for the Group to safeguard shareholders’ investment and the Group’s assets. The Board also acknowledges its responsibility for the Group’s system of internal control which covers not only financial controls but operational and compliance controls. The system of internal control is designed to manage rather than eliminate the risk of failure to achieve business objectives. Shareholders should be aware that there are inherent limitations in any system of internal control. Accordingly, it can only provide reasonable assurance but not absolute assurance against material misstatement of management and financial information or against financial losses or fraud.

Current Risk Management Framework

The risk management framework has been embedded in the Company’s management systems. Authority and accountability have been clearly defined to implement the risk management process and internal control system. Based on the assessment of the internal control systems of the Group, the Board is of the view that there is an ongoing process of identifying, evaluating, monitoring and managing significant risks affecting the achievement of its business objectives in their daily activities throughout the financial year and up to the date of approval of the Annual Report.

Internal Control Environment

Within the Group, there are organisational structures in place for each operating unit with clearly defined levels of authority. Management of each operating unit has clear responsibility for identifying risk affecting their unit and the overall Group’s business as a whole. They are also charged with instituting adequate procedures and internal controls to mitigate and monitor such risks on an ongoing basis. Since its listing on the Bursa Securities, the Board has regularly addressed issues or risks that may have arisen.

Standard operating policies and procedures that document how transactions are captured and where internal controls are applied exist for all operating units of the Group. As part of the performance monitoring process, management information in the form of forecasts and quarterly management accounts and reports are provided to the Board for review and approval.

Audit Committee

During the financial year ended 31 December 2009, the Audit Committee has met five (5) times. The Audit Committee provides assurance to the Board’s in discharging its overall responsibility for the effectiveness of internal controls in the Group. The key functions performed by the Committee were:

• Review of audit plans of both external and internal auditors;• Review of quarterly results and announcements and recommend to the Board for approval; and• Review any related party transactions and conflict of interest situations.

Internal Audit

The Group outsourced its internal audit function to an independent firm of consultants.

The internal audit team will assist the Audit Committee in discharging internal audit function in which to assess the adequacy and effectiveness of the system of internal controls and accounting control procedures of the Group. The internal audit team independently reported to the Audit Committee its activities, significant results, findings and necessary recommendations. As such, internal audit progress report will be issued by internal audit team to enable the Board to gain assurance on the effectiveness, adequacy and integrity of the Group’s system of internal controls. At the onset, the annual audit programme will be presented to the Audit Committee for approval before commencement of the following financial year. The internal audit team is totally independent. It has no involvement in the operations of the Group and is not involved in providing any form of advisory to the management of the Group.

REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS

As required by Paragraph 15.23 of the Main Market Listing Requirements of the Bursa Securities, the external auditors have reviewed this Statement on Internal Control. This review was performed in accordance with Recommended Practice Guide (“RPG”) 5 issued by Malaysian Institute of Accountants. Based on their review, the external auditors have reported to the Board that nothing has come to their attention that causes them to believe that this Statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the system of internal controls.

FINANCIAL STATEMENTS

20 DIRECTORS’REpORT

24 STaTEmEnTbyDIRECTORS

24 STaTuTORyDEClaRaTIOn

25 InDEpEnDEnTauDITORS’REpORT

27 balanCEShEETS

28 InCOmESTaTEmEnTS

29 STaTEmEnTSOfChangESInEquITy

30 CaShflOwSTaTEmEnTS

32 nOTESTOThEfInanCIalSTaTEmEnTS

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Directors’ Report

The directors hereby submit their report together with the audited financial statements of the Group and of the Company for the financial year ended 31st December 2009.

PRINCIPAL ACTIVITIES

The Company is principally engaged in investment holding whilst the principal activities of the subsidiaries are as stated in Note 8 to the financial statements.

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

RESULTS

Group Company RM RM

Net profit for the financial year 21,756,959 2,878,447

DIVIDEND

Dividends paid by the Company since the end of the previous financial year were:-

(i) a first interim tax exempted dividend of 1.50 sen per ordinary share of RM0.50 amounting to RM1,980,000/- in respect of the financial year ended 31st December 2009 was paid on 22nd June 2009.

(ii) a second interim tax exempted dividend of 1 sen per ordinary share of RM0.50 amounting to RM1,320,000/- in respect of the financial year ended 31st December 2009 was paid on 29th December 2009.

The directors recommend the payment of a final tax exempted dividend of 1.50 sen per ordinary share of RM0.50 amounting to RM1,980,000/- in respect of the current financial year which, subject to the approval of the shareholders at the forthcoming Annual General Meeting of the Company, will be paid to shareholders on a date to be determined later by the directors.

RESERVES AND PROVISIONS

All material transfers to and from reserves and provisions during the financial year have been disclosed in the financial statements.

BAD AND DOUBTFUL DEBTS

Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and had satisfied themselves that all known bad debts had been written off and adequate allowance had been made for doubtful debts.

At the date of this report, the directors are not aware of any circumstances that would render the amount written off for bad debts, or the amount of the allowance for doubtful debts, in the financial statements of the Group and of the Company inadequate to any substantial extent.

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Directors’ Report(Cont’d)

CURRENT ASSETS

Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonable steps to ensure that any current assets, other than debts, which were unlikely to be realised in the ordinary course of business, their values as shown in the accounting records of the Group and of the Company had been written down to an amount that they might be expected to be realised.

At the date of this report, the directors are not aware of any circumstances that would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

VALUATION METHODS

At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

CONTINGENT AND OTHER LIABILITIES

At the date of this report, there does not exist:-

(i) any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which secures the liabilities of any other person, or

(ii) any contingent liability in respect of the Group and of the Company that has arisen since the end of the financial year, other than as disclosed in Note 29 to the financial statements.

No contingent liability or other liability of the Group and of the Company has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet its obligations as and when they fall due.

CHANGE OF CIRCUMSTANCES

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

ITEMS OF AN UNUSUAL NATURE

The results of the operations of the Group and of the Company for the financial year were not, in the opinion of the directors, substantially affected by any item, transaction or event of a material and unusual nature.

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made.

ISSUE OF SHARES AND DEBENTURES

During the financial year, the Company did not issue any shares or debentures.

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Directors’ Report(Cont’d)

EMPLOYEES’ SHARE OPTION SCHEME

The United U-LI Corporation Berhad Employees’ Share Option Scheme (“ESOS”) is governed by the by-laws approved by the shareholders at an Extraordinary General Meeting held on 29th October 2004.

The ESOS expired and lapsed on 28th October 2009.

DIRECTORS

The directors in office since the date of the last report are:-

Dato’ Wira Abd Rahman bin IsmailDato’ Lee Yoon WahDato’ Lee Yoon KongTeow Lai SengChim Wai KhuanWong Chow LanLokman bin MansorShariff bin Mohd Shah

DIRECTORS’ INTERESTS

According to the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, the interests of those directors who held office at the end of the financial year in shares in the Company during the financial year ended 31st December 2009 are as follows:-

Number of ordinary shares of RM0.50 each At At 1.1.2009 Additions Disposals 31.12.2009

The Company Direct Interest Dato’ Wira Abd Rahman bin Ismail 9,000 – – 9,000Dato’ Lee Yoon Wah 4,198,248 23,600 – 4,221,848Dato’ Lee Yoon Kong 3,848,246 19,000 – 3,867,246Teow Lai Seng 9,000 – – 9,000Chim Wai Khuan 370,000 50,000 – 420,000Wong Chow Lan 624 – – 624Lokman bin Mansor 9,000 – – 9,000Shariff bin Mohd Shah 729,128 – – 729,128

Deemed InterestDato’ Wira Abd Rahman bin Ismail * 44,556 – – 44,556Dato’ Lee Yoon Wah ** 54,000,000 – – 54,000,000Dato’ Lee Yoon Kong ** 54,000,000 – – 54,000,000

* Deemed interest by virtue of interest in Kasuria Sdn. Bhd.** Deemed interest by virtue of interest in Pearl Deal (M) Sdn. Bhd.

By virtue of their interest in shares in the Company, Dato’ Wira Abd Rahman bin Ismail, Dato’ Lee Yoon Wah, Dato’ Lee Yoon Kong and Teow Lai Seng are also deemed interested in shares of all the subsidiaries to the extent that the Company has an interest.

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Directors’ Report(Cont’d)

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director of the Company has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors shown in the financial statements) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest.

Neither during nor at the end of the financial year was the Company a party to any arrangement whose object was to enable the directors to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

AUDITORS

The auditors, Messrs Baker Tilly Monteiro Heng, have expressed their willingness to continue in office.

On behalf of the Board,

DATO’ LEE YOON WAH DATO’ LEE YOON KONGDirector Director

Petaling JayaDate: 6th April 2010

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Statement by Directors

We, DATO’ LEE YOON WAH and DATO’ LEE YOON KONG, being two of the directors of United U-LI Corporation Berhad, do hereby state that in the opinion of the directors, the accompanying financial statements are properly drawn up in accordance with Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31st December 2009 and of the results and cash flows of the Group and of the Company for the financial year ended on that date.

On behalf of the Board,

DATO’ LEE YOON WAH DATO’ LEE YOON KONGDirector Director

Petaling JayaDate: 6th April 2010

Statutory Declaration

I, CHOONG CHEE YEONG, being the officer primarily responsible for the financial management of United U-LI Corporation Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the accompanying financial statements are correct, and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, l960.

CHOONG CHEE YEONG

Subscribed and solemnly declared bythe abovenamed at Petaling Jayain the state of Selangor Darul Ehsanon 6th April 2010.

Before me,

Commissioner for Oaths

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Independent Auditors’ Reportto the members of United U-Li Corporation Berhad

Report on the Financial Statements

We have audited the financial statements of United U-LI Corporation Berhad, which comprise the balance sheets as at 31st December 2009 of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 27 to 61.

The financial statements of the Company as at 31st December 2008 were audited by another firm of chartered accountants whose report dated 27th March 2009, expressed an unqualified opinion on that financial statements.

Directors’ Responsibility for the Financial Statements

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

Auditors’ Responsibility

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

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

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

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with the Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31st December 2009 and of their financial performance and cash flows for the financial year then ended.

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Independent Auditors’ Reportto the members of United U-Li Corporation Berhad (Cont’d)

Report on Other Legal and Regulatory Requirements

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

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

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

(c) Our auditors’ reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

Other Matters

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

Baker Tilly Monteiro Heng Heng Ji Keng No. AF 0117 No. 578/05/10 (J/PH) Chartered Accountants Partner

Kuala LumpurDate: 6th April 2010

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Balance Sheetsas at 31st December 2009

Group Company 2009 2008 2009 2008 Note RM RM RM RM

ASSETSNon-current assets Property, plant and equipment 4 34,810,311 37,596,370 – – Investment properties 5 1,205,000 875,000 – – Prepaid lease payments 6 9,220,426 9,340,319 – – Intangible asset 7 50,730 59,185 – – Investment in subsidiaries 8 – – 40,933,094 40,933,094 Deferred tax assets 9 2,044,180 2,098,699 – –

Total non-current assets 47,330,647 49,969,573 40,933,094 40,933,094

Current assets Inventories 10 32,021,001 36,444,375 – – Trade receivables 11 56,519,127 54,345,507 – – Other receivables, deposits and prepayments 12 2,764,371 647,731 – 1,000 Amount owing by subsidiaries 13 – – 37,961,547 38,423,656 Tax recoverable 1,775,476 1,078,462 193,551 183,552 Fixed deposits placed with licensed banks 8,976,257 8,431,069 – –Cash and bank balances 28,281,613 8,368,982 636,172 183,442

Total current assets 130,337,845 109,316,126 38,791,270 38,791,650

TOTAL ASSETS 177,668,492 159,285,699 79,724,364 79,724,744

EQUITY AND LIABILITIESEquity attributable to equity holders of the Company Share capital 14 66,000,000 66,000,000 66,000,000 66,000,000 Reserves 15 73,197,332 55,114,058 12,972,260 13,393,813

Total equity 139,197,332 121,114,058 78,972,260 79,393,813

Non-current liabilities Deferred tax liabilities 9 943,619 759,179 – – Long term borrowings 16 2,007,279 3,855,865 – –

Total non-current liabilities 2,950,898 4,615,044 – –

Current liabilities Trade payables 18 11,004,735 9,364,243 – – Other payables, deposits and accruals 19 2,951,023 2,776,908 752,104 330,931 Short term borrowings 20 19,500,357 21,062,727 – – Tax payable 2,064,147 352,719 – –

Total current liabilities 35,520,262 33,556,597 752,104 330,931

Total liabilities 38,471,160 38,171,641 752,104 330,931

TOTAL EQUITY AND LIABILITIES 177,668,492 159,285,699 79,724,364 79,724,744

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

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Income Statementsfor the financial year ended 31st December 2009

Group Company 2009 2008 2009 2008 Note RM RM RM RM

REVENUE 21 139,383,909 157,829,449 3,300,000 1,500,000

Cost of sales (86,446,465) (107,143,312) – –

GROSS PROFIT 52,937,444 50,686,137 3,300,000 1,500,000

Other operating income 2,290,402 1,565,621 – –Administrative expenses (19,406,970) (18,453,402) (421,553) (438,526)Other operating expenses (4,964,741) (4,388,563) – –

OPERATING PROFIT 22 30,856,135 29,409,793 2,878,447 1,061,474

Finance costs 23 (840,260) (1,990,277) – –

PROFIT BEFORE TAXATION 30,015,875 27,419,516 2,878,447 1,061,474

Taxation 24 (8,258,916) (6,162,111) – 15,606

NET PROFIT FOR THE FINANCIAL YEAR 21,756,959 21,257,405 2,878,447 1,077,080

Attributable to:Equity holders of the Company 21,756,959 21,257,405 2,878,447 1,077,080Minority interest – – – –

21,756,959 21,257,405 2,878,447 1,077,080

Earnings per share attributable to equity holders of the Company: 25- basic (sen) 16.48 16.10

- diluted (sen) 16.48 16.10

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

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Statements of Changes in Equityfor the financial year ended 31st December 2009

Attributable to equity holders of the Company Non- Distributable Distributable Share Revaluation Retained Total Capital Reserves Profits Equity Note RM RM RM RM

GroupAt 1st January 2008 66,000,000 6,548,248 29,022,960 101,571,208Net profit for the financial year – – 21,257,405 21,257,405Dividends 26 – – (2,640,000) (2,640,000)Reversal of deferred tax in relation to waiver of real property gains tax – 925,445 – 925,445

At 31st December 2008 66,000,000 7,473,693 47,640,365 121,114,058Net profit for the financial year – – 21,756,959 21,756,959Deferred tax in relation of real property gains tax – (373,685) – (373,685)Dividends 26 – – (3,300,000) (3,300,000)

At 31st December 2009 66,000,000 7,100,008 66,097,324 139,197,332

CompanyAt 1st January 2008 66,000,000 – 14,956,733 80,956,733Net profit for the financial year – – 1,077,080 1,077,080Dividends 26 – – (2,640,000) (2,640,000)

At 31st December 2008 66,000,000 – 13,393,813 79,393,813Net profit for the financial year – – 2,878,447 2,878,447Dividends 26 – – (3,300,000) (3,300,000)

At 31st December 2009 66,000,000 – 12,972,260 78,972,260

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

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Cash Flow Statementsfor the financial year ended 31st December 2009

Group Company 2009 2008 2009 2008 RM RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIES: Profit before taxation 30,015,875 27,419,516 2,878,447 1,061,474

Adjustments for: Allowance for doubtful debts 594,255 997,675 – – Amortisation of prepaid lease payments 119,894 119,894 – – Amortisation of intangible assets 8,455 8,455 – – Bad debts recovered (22,023) – – – Bad debts written off 75,983 34,444 – – Depreciation 4,812,324 4,335,652 – – Inventories written down 43,292 6,272,351 – – Allowance for doubtful debts no longer required – (242,693) – – Fair value adjustment for investment properties 20,000 (11,412) – – Interest income (259,521) (141,552) – – Interest expense 840,260 1,990,277 – – Gain on disposal of property, plant and equipment (102,750) (19,660) – – Loss on disposal of property, plant and equipment 8,497 – – – Property, plant and equipment written down 490 – – – Unrealised loss on foreign exchange 479,389 – – – Unrealised gain on foreign exchange (478,342) (599,162) – – Dividend income – – (3,300,000) (1,500,000)

36,156,078 40,163,785 (421,553) (438,526)Changes In Working Capital: Inventories 4,380,082 6,370,765 – – Receivables (4,939,522) 9,022,428 1,000 62,732 Payables 1,814,607 (6,798,626) 421,173 7,035 Amount owing by subsidiaries – – 462,109 6,557,596

37,411,245 48,758,352 462,729 6,188,837 Interest paid (488,479) (1,525,240) – – Interest received 259,521 141,552 – – Tax paid (7,379,228) (3,596,569) (9,999) –

Net Operating Cash Flows 29,803,059 43,778,095 452,730 6,188,837

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Group Company 2009 2008 2009 2008 RM RM RM RM

CASH FLOWS FROM INVESTING ACTIVITIES: Additional investment in subsidiary – – – (5,000,000) Purchase of property, plant and equipment (2,131,502) (3,632,903) – – Purchase of investment property (350,000) (123,588) – – Proceeds from disposal of property, plant and equipment 198,999 56,700 – –

Net Investing Cash Flows (2,282,503) (3,699,791) – (5,000,000)

CASH FLOWS FROM FINANCING ACTIVITIES: Net (repayment)/drawdown of other short term borrowings 1,494,000 (21,605,000) – – Repayment of term loans (1,323,669) (1,328,193) – – Repayment of hire purchase and finance lease liabilities (2,494,122) (1,593,019) – – Dividends received – – 3,300,000 1,500,000 Dividends paid (3,300,000) (2,640,000) (3,300,000) (2,640,000) Interest paid (351,781) (465,037) – –

Net Financing Cash Flows (5,975,572) (27,631,249) – (1,140,000)

NET CHANGE IN CASH AND CASH EQUIVALENTS 21,544,984 12,447,055 452,730 48,837

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE FINANCIAL YEAR 15,712,886 3,265,831 183,442 134,605

CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR 37,257,870 15,712,886 636,172 183,442

ANALYSIS OF CASH AND CASH EQUIVALENTS: Fixed deposits placed with licensed banks 8,976,257 8,431,069 – – Cash and bank balances 28,281,613 8,368,982 636,172 183,442 Bank overdrafts – (1,087,165) – –

37,257,870 15,712,886 636,172 183,442

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

Cash Flow Statementsfor the financial year ended 31st December 2009 (Cont’d)

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Notes to the Financial Statements

1. GENERAL INFORMATION

The Company is principally engaged in investment holding whilst the principal activities of the subsidiaries are as stated in Note 8 to the financial statements.

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

The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main Market of Bursa Malaysia Securities Berhad.

The registered office of the Company is located at 62C, Jalan SS21/62, Damansara Utama, 47400 Petaling Jaya, Selangor Darul Ehsan.

The principal place of business of the Company is located at 33, Jalan Kartunis U1/47, Temasya Industrial Park, Seksyen U1, 40150 Shah Alam, Selangor Darul Ehsan.

The financial statements are expressed in Ringgit Malaysia.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 6th April 2010.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

The financial statements of the Group and of the Company have been prepared in accordance with the Financial Reporting Standards (“FRSs”) and the provisions of the Companies Act, 1965 in Malaysia.

The financial statements of the Group and of the Company have been prepared under the historical cost basis, except as disclosed in the significant accounting policies in Note 2.3 to the financial statements.

The preparation of financial statements in conformity with FRSs requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of the revenue and expenses during the reported financial period. It also requires directors’ best knowledge of current events and actions, and therefore actual results may differ.

The areas involving a higher degree of judgement of complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3 to the financial statements.

2.2 New and Revised FRSs, Amendments/Improvements to FRSs and IC Interpretations (“IC Int”)

(a) Adoption of New and Revised FRSs, Amendments/Improvements to FRSs and IC Int

There are no new and revised accounting standards, amendments/improvements to FRSs and IC Int that are effective and applicable for the Group’s financial year ended 31st December 2009.

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Notes to the Financial Statements(Cont’d)

2. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(CONT’D)

2.2 NewandRevisedFRSs,Amendments/ImprovementstoFRSsandICInterpretations(“ICInt”)(Cont’d)

(b) NewandRevisedFRSs,Amendments/ImprovementstoFRSsandICIntthatareissued,notyeteffectiveandhavenotbeenadoptedearly

TheGroupandtheCompanyhavenotadoptedthefollowingnewandrevisedFRSs,amendments/

improvementstoFRSsandICIntthathavebeenissuedasatthedateofauthorisationofthesefinancial statements but are not yet effective for the Group and the Company:

Effectivefor financialperiods beginningon orafter

NewFRSs FRS 4 Insurance Contracts 1 January 2010FRS 7 Financial Instruments : Disclosures 1 January 2010FRS 8 Operating Segments 1 July 2009FRS 139 Financial Instruments : Recognition and Measurement 1 January 2010 RevisedFRSsFRS 1 First time Adoption of Financial Reporting Standards 1 July 2010FRS 3 Business Combinations 1 July 2010FRS 101 Presentation of Financial Statements 1 January 2010FRS 123 Borrowing costs 1 January 2010FRS 127 Consolidated and Separate Financial Statements : 1 July 2010 CostofanInvestmentinaSubsidiary, Jointly Controlled Entity or Associate Amendments/Improvements to FRSsFRS 1 First time Adoption of Financial Reporting Standards 1 January 2010 & 1 January 2011FRS 2 Share-based Payment – Vesting Conditions and Cancellations 1 January 2010 & 1 July 2010FRS 5 Non-current Assets Held for Sale and Discontinued Operations 1 January 2010 & 1 July 2010FRS 7 Financial Instruments: Disclosure 1 January 2010 & 1 January 2011FRS 8 Operating Segments 1 January 2010FRS 107 Statement of Cash Flows 1 January 2010FRS 108 Accounting Policies, Changes in Accounting Estimates 1 January 2010 and ErrorsFRS 110 Events After the Reporting Period 1 January 2010FRS 116 Property, Plant and Equipment 1 January 2010FRS 117 Leases 1 January 2010FRS 118 Revenue 1 January 2010FRS 119 Employee Benefits 1 January 2010FRS 120 Accounting for Government Grants and Disclosure of 1 January 2010 Government AssistanceFRS 123 Borrowing Costs 1 January 2010FRS 127 Consolidated and Separate Financial Statements : 1 January 2010 CostofanInvestmentinaSubsidiary, Jointly Controlled Entity or Associate FRS 128 Investment in Associates 1 January 2010FRS 129 Financial Reporting in Hyperinflationary Economies 1 January 2010FRS 131 Interests in Joint Venture 1 January 2010FRS 132 Financial Instruments: Presentation 1 January 2010 & 1 March 2010FRS 134 Interim Financial Reporting 1 January 2010FRS 136 Impairment of Assets 1 January 2010FRS 138 Intangible Assets 1 January 2010 & 1 July 2010FRS 139 Financial Instruments : Recognition and Measurement 1 January 2010FRS 140 Investment Property 1 January 2010

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Notes to the Financial Statements(Cont’d)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.2 New and Revised FRSs, Amendments/Improvements to FRSs and IC Interpretations (“IC Int”) (Cont’d)

(b) New and Revised FRSs, Amendments/Improvements to FRSs and IC Int that are issued, not yet effective and have not been adopted early (Cont’d)

Effective for financialperiods beginning on or after IC Int IC Int 9 Reassessment of Embedded Derivatives 1 January 2010IC Int 10 Interim Financial Reporting and Impairment 1 January 2010IC Int 11 FRS 2 – Group and Treasury Share Transactions 1 January 2010IC Int 12 Service Concession Arrangements 1 July 2010IC Int 13 Customer Loyalty Programmes 1 January 2010IC Int 14 FRS 119 – The limit on a Defined Benefit Asset, 1 January 2010 Minimum Funding Requirements and their InteractionIC Int 15 Agreements for the Construction of Real Estate 1 July 2010IC Int 16 Hedges of a Net Investment in a Foreign Operation 1 July 2010IC Int 17 Distributions of Non-cash Assets of Owners 1 July 2010

The Group and the Company plan to adopt the above FRSs, Amendments to FRSs and Interpretations when they become effective in the respective financial period. Unless otherwise described below, the adoption of the above FRSs, Amendments to FRSs and Interpretations upon their initial application are not expected to have any significant impact on the financial statements of the Group and the Company. The Company is exempted from disclosing the possible impact, if any, to the financial statements upon application of FRS 7 and FRS 139.

2.3 SignificantAccountingPolicies

The following accounting policies have been used consistently in dealing with items which are considered material in relation to the financial statements:-

(a) Basis of Consolidation The consolidated financial statements include the financial statements of the Company and its

subsidiaries made up to the end of the financial year.

The financial statements of the parent and its subsidiaries are all drawn up to the same reporting date.

Subsidiaries are consolidated using the purchase method of accounting. Under the purchase method of accounting, subsidiaries are fully consolidated from the date on which control is transferred to the Group and are de-consolidated from the date that control ceases.

The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the date of acquisition, irrespective of the extent of any minority interest.

The excess of the cost of the acquisition over the net fair value of the Group’s share of the identifiable net assets, liabilities and contingent liabilities represents goodwill. Any excess of the net fair value of the Group’s share of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition is recognised immediately in the income statement.

Intra-group transactions and balances, and resulting unrealised gains are eliminated on consolidation. Unrealised losses resulting from intra-group transactions are also eliminated on consolidation to the extent of the cost of the asset that can be recovered. The extent of the costs that cannot be recovered is treated as write downs or impairment losses as appropriate. Where necessary, adjustments are made to the financial statements of the subsidiaries to ensure consistency with the accounting policies adopted by the Group.

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Notes to the Financial Statements(Cont’d)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.3 SignificantAccountingPolicies(Cont’d)

(b) Subsidiaries

Subsidiaries are those corporations in which the Group has the power to exercise control over the financial and operating policies so as to obtain benefits from their activities, generally accompanying a shareholding of more than one half 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 has such power over another entity.

In the Company’s separate financial statements, investments in subsidiaries are stated at costs less impairment losses, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.3(o). On disposal of such investments, the difference between the net disposal proceeds and their carrying amount is included in the income statement.

In the Group’s consolidated financial statements, the difference between the net disposal proceeds and the Group’s share of the subsidiary’s net assets together with any unamortised goodwill is reflected as a gain or loss on disposal in the consolidated income statement.

(c) Property, Plant and Equipment and Depreciation

All property, plant and equipment were initially stated at cost. Land and buildings were subsequently shown at market value, based on valuations of external independent valuers, less subsequent accumulated depreciation and impairment losses, if any. All other property, plant and equipment are stated at historical cost less accumulated depreciation and impairment loss, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.3(o).

Cost includes expenditure that is directly attributable to the acquisition of the asset. When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

The cost of replacing part of an item of property, plant and equipment is included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that the future economic benefits associated with the part will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement as incurred.

Freehold lands are not depreciated as it has an infinite life. All other property, plant and equipment are depreciated on a straight line basis to write off the cost of each asset to its residual value over the estimated useful lives of the assets concerned. The annual rates used for this purpose are as follows:-

Buildings 2%Electrical installation 10%Plant and machinery 15%Motor vehicles 15%Office equipment 10%Furniture and fittings 10%Renovation 10%

The residual values and useful lives of property, plant and equipment are reviewed, and adjusted if appropriate, at each balance sheet date. The effects of any revisions of the residual values and useful lives are included in the income statement for the financial year in which the changes arise.

Fully depreciated assets are retained in the accounts until the assets are no longer in use.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the income statement in the financial year the asset is derecognised.

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Notes to the Financial Statements(Cont’d)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.3 SignificantAccountingPolicies(Cont’d)

(d) Revaluation of Assets

Land and buildings at valuation are revalued at a regular interval of at least once in every five years with additional valuations in the intervening years where market conditions indicate that the carrying values of the revalued land and buildings materially differ from the market values.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Any surplus or deficit arising from the revaluations will be dealt with in the Revaluation Reserve Account. Any deficit is set-off against the Revaluation Reserve Account only to the extent of the surplus credited from the previous revaluation of the land and buildings and the excess of the deficit is charged to the income statement. Upon disposal or retirement of an asset, any revaluation reserve relating to the particular asset is transferred directly to retained earnings.

(e) Investment Property

Investment property is property held for long term rental yields and/or for capital appreciation and is not occupied by the Group.

Such property is initially measured at cost, including transaction costs. Subsequent to initial recognition, investment property is stated at fair value. Fair value is arrived at by reference to market evidence of transaction prices for similar property and is performed by registered independent valuers having an appropriate recognised professional qualification and recent experience in the location and category of the properties being valued.

Gains or losses arising from changes in the fair values of investment property are included in the income statement in the year in which they arise.

A property interest under an operating lease is classified and accounted for as an investment property on a property-by-property basis when the Group holds it to earn rentals or for capital appreciation or both. Any such property interest under an operating lease classified as an investment property is carried at fair value.

Investment property is derecognised when either it has been disposed off or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on the retirement or disposal of an investment property is recognised in the income statement in the year in which it arises.

(f) Intangible Assets

Trademark is stated at cost less any accumulated amortisation and any accumulated impairment losses. Trademark represents the acquisition cost of the rights and license to use the name of “Goodlite” in the manufacturing of electrical lighting and fittings.

Trademark with finite life will be amortised on a straight line basis over its estimated economic useful life of 10 years and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for trademark are reviewed at least at each balance sheet date.

(g) Inventories

Inventories are stated at the lower of cost and net realisable value.

Cost is determined on the weighted average basis. The cost of raw materials and consumables comprise cost of purchase, transport and handling charges. The costs of finished goods and work-in-progress comprise cost of raw materials, direct labour and other direct costs and appropriate proportions of manufacturing overheads based on the normal operating capacity.

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

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Notes to the Financial Statements(Cont’d)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.3 SignificantAccountingPolicies(Cont’d)

(h) Receivables

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

(i) Payables

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

(j) Equity Instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised as liabilities when proposed or declared before the balance sheet date. A dividend proposed or declared after the balance sheet date, but before the financial statements are authorised for issue, is not recognised as a liability at the balance sheet date.

Cost incurred directly attributable to the issuance of the shares is charged to the income statement. Equity transaction costs comprise only those incremental external costs directly attributable to the equity transaction which would otherwise have been avoided.

(k) Leases

(i) Classification

A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incidental to ownership. Leases of land and buildings are classified as operating or finance leases in the same way as leases of other assets and the land and buildings elements of a lease of land and buildings are considered separately for the purposes of lease classification. All leases that do not transfer substantially all the risks and rewards are classified as operating leases.

(ii) Finance Lease

Assets acquired by way of hire purchase or finance leases are stated at an amount equal to the lower of their fair values and the present value of the minimum lease payments at the inception of the leases, less accumulated depreciation and impairment losses. The corresponding liability is included in the balance sheet as borrowings. In calculating the present value of the minimum lease payments, the discount factor used is the interest rate implicit in the lease, when it is practicable to determine, otherwise, the Group’s incremental borrowing rate is used. Any initial direct costs are also added to the carrying amount of such assets.

Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are recognised in the profit or loss over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting period.

The depreciation policy for lease assets is in accordance with that for depreciable property, plant and equipment as described in Note 2.3(c).

(iii) Operating Lease

Operating lease payments are recognised as an expense on a straight line basis over the term of the relevant lease. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight line basis.

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Notes to the Financial Statements(Cont’d)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.3 SignificantAccountingPolicies(Cont’d)

(l) Interest-bearing Borrowings

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

(m) Borrowing Costs

Borrowing costs are recognised in the income statement as an expense in the period in which they are incurred.

(n) Income Tax

The tax expense in the income statements represents the aggregate amount of current tax and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted at the balance sheet date.

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

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

(o) Impairment of Assets

The carrying amount of assets, other than investment properties that are measured at fair value, inventories and deferred tax assets, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated to determine the amount of impairment loss.

For goodwill, intangible assets that have an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is estimated at each balance sheet date or more frequently when indicators of impairment are identified.

For the purpose of impairment testing of these assets, the recoverable amount is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the cash-generating unit (“CGU”) to which the asset belongs to. Goodwill acquired on a business combination is, from the acquisition date, allocated to each of the Group’s CGUs, or groups of CGUs, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.

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Notes to the Financial Statements(Cont’d)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.3 SignificantAccountingPolicies(Cont’d)

(o) Impairment of Assets (Cont’d)

An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less cost to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset. Where the carrying amounts of an asset exceed its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

An impairment loss is recognised in the income statement in the period in which it arises.

Impairment loss on goodwill is not reversed in a subsequent period. 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 was recognised. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed its carrying amount that would have been determined (net of 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.

(p) Foreign Currencies

(i) Functional and Presentation Currency

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

(ii) Transactions and Balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

Non-monetary items which are measured at fair values denominated in foreign currencies are translated at the foreign exchange rates ruling at the date when the fair value was determined.

When a gain or loss on a non-monetary item is recognised directly in equity, any corresponding exchange gain or loss is recognised directly in equity. When a gain or loss on a non-monetary item is recognised in the income statement, any corresponding exchange gain or loss is recognised in the income statement.

(q) Revenue Recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group’s activities. Revenue is shown net of returns, rebates and discounts and after eliminating sales within the Group.

The Group recognised revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Group’s activities as described below. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the sale have been resolved. The Group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

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Notes to the Financial Statements(Cont’d)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.3 SignificantAccountingPolicies(Cont’d)

(q) Revenue Recognition (Cont’d)

(i) Sales of Goods

Revenue from sale of goods is recognised upon delivery of products and customers’ acceptance, net of discounts and returns and when the significant risk and rewards of ownership have been passed to the buyer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

(ii) Interest Income

Interest income is recognised on an accruals basis using the effective interest method unless collectibility is in doubt in which recognition will be on a receipt basis.

(iii) Dividend Income

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

(r) Financial Instruments

Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual provisions of the instruments. The particular recognition methods adopted are disclosed in the individual accounting policy statements associated with each item.

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

(s) EmployeeBenefits

(i) Short Term Employee Benefits

Wages, salaries, bonuses, social security contribution and non-monetary benefits are recognised as an expense in the financial year in which the associated services are rendered by the employees. Short-term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences like sick leave, maternity and paternity leave are recognised when absences occur.

(ii) Post-Employment Benefits

The Group contributes to the Employees’ Provident Fund, the national defined contribution plan. The contributions are charged to the income statement in the period to which they are related. Once the contributions have been paid, the Group has no further payment obligations.

(t) Segment Reporting

Segment reporting is presented for enhanced assessments of the Group’s risks and returns. A business segment is a group of assets and operation engaged in providing products or services that are subject to risk and returns that are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that is subject to risks and returns that are different from those components operating in other economic environments.

Segment revenue, expense, assets and liabilities are those amounts resulting from the operating activities of a segment that are directly attributable to the segment and the relevant portion that can be allocated on a reasonable basis to the segment.

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Notes to the Financial Statements(Cont’d)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.3 SignificantAccountingPolicies(Cont’d)

(t) Segment Reporting (Cont’d)

Segment revenue, expense, assets and segment liabilities are determined before intragroup balances and intragroup transactions are eliminated as part of the consolidation process, except to the extent that such intragroup balances and transactions are between operating units within a single segment. Segment revenue and segment expense exclude dividends from within the Group.

All income, expenses, assets and liabilities are directly allocated to each reported segment. Interest income and other income and expenses which cannot be allocated to respective segment on a reasonable basis are disclosed as either unallocated income or unallocated expenses, while the related assets and liabilities are disclosed as unallocated assets and unallocated liabilities.

The accounting policies used in deriving the individual segment revenue, segment results, segment assets and segment liabilities are the same as those disclosed in the summary of significant accounting policies.

Transfers between segments are priced at the estimated fair value of the products or services as negotiated between the operating units.

(u) Cash and Cash Equivalents

For the purpose of cash flows statement, cash and cash equivalents comprise cash in hand, bank balances, demand deposits and other short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. Cash and cash equivalents are stated net of bank overdrafts which are repayable on demand.

3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated by the directors and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The key assumption concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as stated below:-

(i) Useful lives of property, plant and equipment

The Group estimates the useful lives of property, plant and equipment based on the period over which the assets are expected to be available for use. The estimated useful lives of property, plant and equipment are reviewed periodically and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the relevant assets.

In addition, the estimation of the useful lives of property, plant and equipment are based on internal technical evaluation and experience with similar assets. It is possible, however, that future results of operations could be materially affected by changes in the estimates brought about by changes in factors mentioned above. The amounts and timing of recorded expenses for any period would be affected by changes in these factors and circumstances. A reduction in the estimated useful lives of the property, plant and equipment would increase the recorded expenses and decrease the non-current assets.

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Notes to the Financial Statements(Cont’d)

3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT’D)

(ii) Impairment of property, plant and equipment

The Group assesses impairment of assets whenever the events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable i.e. the carrying amount of the asset is more than the recoverable amount.

Recoverable amount is measured at the higher of the fair value less cost to sell for that asset and its value-in-use. The value-in-use is the net present value of the projected future cash flow derived from that asset discounted at an appropriate discount rate. Projected future cash flows are based on the Group’s estimates calculated based on historical, sector and industry trends, general market and economic conditions, changes in technology and other available information.

As at balance sheet date, the directors of the Company are of the opinion that there is no impact resulting from the impairment review by the management.

(iii) Impairment of investment in subsidiaries

The Group and the Company carried out the impairment test based on a variety of estimation including the value-in-use of the cash generating unit. Estimating the value-in-use requires the Group and the Company to make an estimate of the expected future cash flows from the cash generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows.

(iv) Amortisation of intangible assets

Intangible assets are amortised on a straight line basis over their estimated economic useful lives. The management estimates that the useful lives of the intangible assets to be 10 years. Changes in the expected level of usage and technological developments could impact the economic useful lives and residual values of the intangible assets. Therefore the future amortisation charge could be revised.

(v) Income taxes

The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the capital allowances and deductibility of certain expenses during the estimation of the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred income tax provisions in the period in which such determination is made.

(vi) Allowance for doubtful debts

The Group makes allowances for doubtful debts based on an assessment of the recoverability of receivables. Allowances are applied to receivables where events or changes in circumstances indicate that the carrying amounts may not be recoverable. Management specifically analysed historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgement to evaluate the adequacy of the allowance of doubtful debts of receivables. Where the expectation is different from the original estimate, such difference will impact the carrying value of receivables.

(vii) Contingent liabilities

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

The determination of treatment of contingent liabilities is based on management’s view of the expected outcome of the contingencies for matters in the ordinary course of the business.

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Notes to the Financial Statements(Cont’d)

4.

PRO

PER

TY, P

LAN

T A

ND

EQ

UIP

MEN

T

Wor

ks

Pl

ant

Furn

iture

Freeho

ld

In

Electrical

and

Motor

Office

and

Grou

p La

nd

Build

ings

Pr

ogre

ss

Inst

allat

ion

Mach

iner

y Ve

hicle

s Eq

uipm

ent

Fitti

ngs

Reno

vatio

n To

tal

2009

RM

RM

RM

RM

RM

RM

RM

RM

RM

RM

Cost

/Valu

atio

nAt

1st

Janu

ary 2

009

At co

st 82

6,00

0 35

4,00

0 –

49,0

45

38,3

32,9

16

5,46

4,68

9 1,

766,

243

338,

792

938,

965

48,0

70,6

50At

valua

tion

4,84

0,00

0 14

,450

,000

–

– –

– –

– –

19,2

90,0

00

5,66

6,00

0 14

,804

,000

–

49,0

45

38,3

32,9

16

5,46

4,68

9 1,

766,

243

338,

792

938,

965

67,3

60,6

50

Addit

ions

– –

543,

597

– 1,

366,

228

79,8

35

122,

170

1,67

2 18

,000

2,

131,

502

Disp

osals

–

– –

– (11

5,19

2)

(403

,167

) (2

,350

) –

– (5

20,7

09)

At 3

1st D

ecem

ber 2

009

5,66

6,00

0 14

,804

,000

54

3,59

7 49

,045

39

,583

,952

5,

141,

357

1,88

6,06

3 34

0,46

4 95

6,96

5 68

,971

,443

Repr

esen

ting:

At co

st 82

6,00

0 35

4,00

0 54

3,59

7 49

,045

39

,583

,952

5,

141,

357

1,88

6,06

3 34

0,46

4 95

6,96

5 49

,681

,443

At va

luatio

n 4,

840,

000

14,4

50,0

00

– –

– –

– –

– 19

,290

,000

At 3

1st D

ecem

ber 2

009

5,66

6,00

0 14

,804

,000

54

3,59

7 49

,045

39

,583

,952

5,

141,

357

1,88

6,06

3 34

0,46

4 95

6,96

5 68

,971

,443

Accu

mul

ated

Dep

recia

tion

At 1

st Ja

nuar

y 200

9 –

883,

520

– 38

,827

25

,464

,919

1,

531,

985

968,

296

239,

362

637,

371

29,7

64,2

80De

prec

iation

for t

he

finan

cial y

ear

– 29

6,08

0 –

4,90

5 3,

534,

748

730,

264

143,

114

31,1

53

72,0

60

4,81

2,32

4Di

spos

als

– –

– –

(96,

694)

(3

16,9

18)

(1,8

60)

– –

(415

,472

)

At 3

1st D

ecem

ber 2

009

– 1,

179,

600

– 43

,732

28

,902

,973

1,

945,

331

1,10

9,55

0 27

0,51

5 70

9,43

1 34

,161

,132

Net B

ook V

alue a

t

31st

Dec

embe

r 200

9 5,

666,

000

13,6

24,4

00

543,

597

5,31

3 10

,680

,979

3,

196,

026

776,

513

69,9

49

247,

534

34,8

10,3

11

Repr

esen

ting:

atco

st82

6,00

0 33

0,40

0 54

3,59

7 5,

313

10,6

80,9

79

3,19

6,02

6 77

6,51

3 69

,949

24

7,53

4 16

,676

,311

At va

luatio

n 4,

840,

000

13,2

94,0

00

– –

– –

– –

– 18

,134

,000

At 3

1st D

ecem

ber 2

009

5,66

6,00

0 13

,624

,400

54

3,59

7 5,

313

10,6

80,9

79

3,19

6,02

6 77

6,51

3 69

,949

24

7,53

4 34

,810

,311

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Notes to the Financial Statements(Cont’d)

4.

PRO

PER

TY, P

LAN

T A

ND

EQ

UIP

MEN

T (C

ON

T’D

)

Wor

ks

Pl

ant

Furn

iture

Freeho

ld

In

Electrical

and

Motor

Office

and

Grou

p La

nd

Build

ings

Pr

ogre

ss

Inst

allat

ion

Mach

iner

y Ve

hicle

s Eq

uipm

ent

Fitti

ngs

Reno

vatio

n To

tal

2008

RM

RM

RM

RM

RM

RM

RM

RM

RM

RM

Cost

/Valu

atio

nAt

1st

Janu

ary 2

008

At co

st 82

6,00

0 3

54,0

00

– 49

,045

34

,043

,379

2,

923,

535

1,66

7,10

0 33

6,06

6 93

5,74

6 41

,134

,871

At va

luatio

n 4,

840,

000

14,4

50,0

00

– –

– –

– –

– 19

,290

,000

5,66

6,00

0 14

,804

,000

–

49,0

45

34,0

43,3

79

2,92

3,53

5 1,

667,

100

336,

066

935,

746

60,4

24,8

71

Addit

ions

– –

– –

4,28

9,53

7 2,

709,

228

99,1

43

2,72

6 3,

219

7,10

3,85

3 Di

spos

als

– –

– –

– (1

68,0

74)

– –

– (1

68,0

74)

At 3

1st D

ecem

ber 2

008

5,66

6,00

0 14

,804

,000

–

49,0

45

38,3

32,9

16

5,46

4,68

9 1,

766,

243

338,

792

938,

965

67,3

60,6

50

Repr

esen

ting:

At co

st 82

6,00

0 35

4,00

0 –

49,0

45

38,3

32,9

16

5,46

4,68

9 1,

766,

243

338,

792

938,

965

48,0

70,6

50

At va

luatio

n 4,

840,

000

14,4

50,0

00

– –

– –

– –

– 19

,290

,000

At 3

1st D

ecem

ber 2

008

5,66

6,00

0 14

,804

,000

–

49,0

45

38,3

32,9

16

5,46

4,68

9 1,

766,

243

338,

792

938,

965

67,3

60,6

50

Accu

mul

ated

Dep

recia

tion

At 1

st Ja

nuar

y 200

8 –

587,

440

– 33

,922

22

,147

,710

1,

189,

203

828,

811

208,

314

564,

262

25,5

59,6

62

Depr

eciat

ion fo

r the

fin

ancia

l yea

r –

296,

080

– 4,

905

3,31

7,20

9 47

3,81

6 13

9,48

5 31

,048

73

,109

4,

335,

652

Disp

osals

–

– –

– –

(131

,034

) –

– –

(131

,034

)

At 3

1st D

ecem

ber 2

008

– 88

3,52

0 –

38,8

27

25,4

64,9

19

1,53

1,98

5 96

8,29

6 23

9,36

2 63

7,37

1 29

,764

,280

Net B

ook V

alue a

t

31st

Dec

embe

r 200

8 5,

666,

000

13,9

20,4

80

– 10

,218

12

,867

,997

3,

932,

704

797,

947

99,4

30

301,

594

37,5

96,3

70

Repr

esen

ting:

At co

st 82

6,00

0 33

7,48

0 –

10,2

18

12,8

67,9

97

3,93

2,70

4 79

7,94

7 99

,430

30

1,59

4 19

,173

,370

At

valua

tion

4,84

0,00

0 13

,583

,000

–

– –

– –

– –

18,4

23,0

00

At 3

1st D

ecem

ber 2

008

5,66

6,00

0 13

,920

,480

–

10,2

18

12,8

67,9

97

3,93

2,70

4 79

7,94

7 99

,430

30

1,59

4 37

,596

,370

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Notes to the Financial Statements(Cont’d)

4. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

(a) The land and buildings of the Group were last revalued on 31st December 2005 by an independent professional valuer by reference to the open market value basis.

Had the revalued land and buildings been carried under the cost model, the net carrying amounts of land and buildings that would have been included in the financial statements of the Group as at 31st December 2009 would be as follows:-

Group 2009 2008 RM RM Freehold land 1,933,276 1,933,276 Buildings 10,766,751 11,033,764 12,700,027 12,967,040

(b) During the financial year, the Group acquired property, plant and equipment with an aggregate cost of RM2,131,502/- (2008: RM7,103,853/-) of which RM Nil (2008: RM3,470,950/-) was acquired by means of hire purchase and finance lease arrangement. Cash payments of RM2,131,502/- (2008: RM3,632,903/-) was made by the Group to purchase property, plant and equipment.

Net carrying amounts of property, plant and equipment held under hire purchase and finance lease arrangements are as follows:-

Group 2009 2008 RM RM Motor vehicles 1,373,500 1,619,500 Plant and machinery 4,334,520 5,518,644 5,708,020 7,138,144

(c) The net carrying amounts of property, plant and equipment pledged as securities for borrowings (Note 16) are as follows:-

Group 2009 2008 RM RM Freehold land 5,226,000 5,226,000 Buildings 3,090,400 3,195,480 Plant and machinery 12,422 130,210 8,328,822 8,551,690

5. INVESTMENT PROPERTIES

Group 2009 2008 RM RM

At 1st January 875,000 740,000 Additions 350,000 123,588 Fair value adjustment (20,000) 11,412 At 31st December 1,205,000 875,000

The fair value of the Group’s investment properties has been arrived at on the basis of valuation carried out by an independent professional valuer by reference to the open market value basis.

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Notes to the Financial Statements(Cont’d)

6. PREPAID LEASE PAYMENTS

Group 2009 2008 RM RM

At 1st January 9,340,319 9,460,213 Amortisation for the financial year (119,893) (119,894) At 31st December 9,220,426 9,340,319 Analysed as:- Long term leasehold land with an unexpired lease period of more than 50 years 9,220,426 9,340,319

Leasehold land with an aggregate carrying value of RM1,430,232/- (2008: RM1,447,674/-) was pledged as

security for borrowings in which the facilities has not been utilised by the subsidiary as at the financial year end.

7. INTANGIBLE ASSET

Group 2009 2008 RM RM

Trademark - at costAt 1st January 89,000 89,000 Additions – –

At 31st December 89,000 89,000

Accumulated amortisationAt 1st January 29,815 21,360 Amortisation for the financial year 8,455 8,455

At 31st December 38,270 29,815

Net carrying amount 50,730 59,185

8. INVESTMENT IN SUBSIDIARIES

Company 2009 2008 RM RM

Unquoted shares - at cost 40,933,094 40,933,094

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Notes to the Financial Statements(Cont’d)

8. INVESTMENT IN SUBSIDIARIES (CONT’D)

The details of the subsidiaries, all of which are incorporated in Malaysia are as follows:-

EffectiveName of Company Equity Interest Principal Activities 2009 2008 % % United U-LI (M) Sdn. Bhd. 100 100 Manufacturing of and dealing in cable support

systems, integrated ceiling systems, steel roof battens and related industrial metal products

United U-LI Steel Service Centre Sdn. Bhd. 100 100 Provision of slitting and shearing services and trading of industrial hardware

Cable-Tray Industries (Malaysia) Sdn. Bhd. 100 100 Manufacturing of and dealing in all types of cable trunking and related industrial metal products

Gabung Mekar Sdn. Bhd. 100 100 Investment holding

United U-LI Building Materials Sdn. Bhd. 100 100 Manufacturing of and trading in integrated ceiling systems, steel roof battens and building materials

United U-LI Goodlite Sdn. Bhd. 100 100 Manufacturing of and trading in electrical lighting and fittings

U-LI Goodlite Marketing Sdn. Bhd. 100 100 Trading in electrical lighting and fitting products

9. DEFERRED TAX ASSETS/(LIABILITIES)

Group 2009 2008 RM RM

At 1st January 1,339,520 946,260 Recognised in the income statement (Note 24) 134,726 (532,185)Recognised in the equity (373,685) 925,445 At 31st December 1,100,561 1,339,520

Presented after appropriate offsetting as follows:-Deferred tax assets 2,044,180 2,098,699 Deferred tax liabilities (943,619) (759,179) 1,100,561 1,339,520

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Notes to the Financial Statements(Cont’d)

9. DEFERRED TAX ASSETS/(LIABILITIES) (CONT’D)

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

Deferred tax assets of the Group

Unused tax losses and Property, unabsorbed plant and capital Receivables equipment allowances Total RM RM RM RM

At 1st January 2009 150,000 5,660 2,098,699 2,254,359 Recognised in the income statement (150,000) 859 (54,519) (203,660)

At 31st December 2009 – 6,519 2,044,180 2,050,699

Deferred tax liabilities of the Group

Revaluation Property, of property, plant and Investment plant and equipment properties equipment Total RM RM RM RM

At 1st January 2009 (824,806) (90,033) – (914,839)Recognised in the income statement 346,284 (7,898) – 338,386 Recognised in the equity – – (373,685) (373,685)

At 31st December 2009 (478,522) (97,931) (373,685) (950,138)

10. INVENTORIES

Group 2009 2008 RM RM

At cost:Raw materials 8,669,758 10,165,102 Consumables 1,068,055 964,426 Work-in-progress 1,784,996 2,022,872 Finished goods 4,453,992 7,659,739 15,976,801 20,812,139At net realisable value:Raw materials 14,603,045 13,752,579 Work-in-progress 1,441,155 1,879,657 16,044,200 15,632,236

Total 32,021,001 36,444,375

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Notes to the Financial Statements(Cont’d)

11. TRADE RECEIVABLES

Group 2009 2008 RM RM

Trade receivables 59,216,136 56,470,285 Less: Allowance for doubtful debts (2,697,009) (2,124,778) 56,519,127 54,345,507

The Group’s normal trade credit terms range from 30 to 150 (2008: 30 to 150) days. Other credit terms are assessed and approved on a case by case basis.

12. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

Group Company 2009 2008 2009 2008 RM RM RM RM

Other receivables 55,295 3,145 – 1,000 Deposits 2,461,100 356,438 – –Prepayments 247,976 288,148 – – 2,764,371 647,731 – 1,000

Included in deposits is an amount of RM1,901,668/- representing deposit paid to suppliers for acquisition of raw materials.

13. AMOUNT OWING BY SUBSIDIARIES

The amount owing by subsidiaries is unsecured, interest free and has no fixed terms of repayment.

14. SHARE CAPITAL

Group and Company 2009 2008 Number Number of Shares Amount of Shares Amount Unit RM Unit RM

Ordinary shares of RM0.50 each

Authorised: At the beginning/end of the financial year 200,000,000 100,000,000 200,000,000 100,000,000

Issued and fully paid: At the beginning/end of the financial year 132,000,000 66,000,000 132,000,000 66,000,000

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets.

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Notes to the Financial Statements(Cont’d)

14. SHARE CAPITAL (CONT’D)

Employees’ Share Option Scheme

The United U-LI Corporation Berhad Employees’ Share Option Scheme (“ESOS”) is governed by the by-laws approved by the shareholders at an Extraordinary General Meeting held on 29th October 2004.

The ESOS expired and lapsed on 28th October 2009.

15. RESERVES

Group Company 2009 2008 2009 2008 RM RM RM RM

Non DistributableRevaluation reserve 7,100,008 7,473,693 – –

DistributableRetained profits 66,097,324 47,640,365 12,972,260 13,393,813

73,197,332 55,114,058 12,972,260 13,393,813

The revaluation reserve is used to record increase in fair value of land and buildings and decrease to the extent that such decrease relates to an increase on the same asset previously recognised in equity.

16. LONG TERM BORROWINGS

Group 2009 2008 RM RM

Long term loans (secured) 641,646 1,965,315 Portion due within one year (Note 20) (366,780) (1,324,440)

Portion due after one year 274,866 640,875Hire purchase and finance lease liabilities after one year (Note 17) 1,732,413 3,214,990 2,007,279 3,855,865

The repayment terms of the term loans are as follows:-

Group 2009 2008 RM RM

Within the next twelve months 366,780 1,324,440

After the next twelve months - not later than two years 40,090 368,305- later than two years but not later than five years 135,864 133,575- later than five years 98,912 138,995

274,866 640,875

641,646 1,965,315

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Notes to the Financial Statements(Cont’d)

16. LONG TERM BORROWINGS (CONT’D)

The term loans are secured by:

(i) legal charges over land and buildings of subsidiaries as disclosed in Note 4(c);

(ii) corporate guarantee by the Company;

(iii) specific debenture covering fixed charges over the plant and machinery financed by the term loan of certain subsidiaries as disclosed in Note 4(c); and

(iv) negative pledge on all assets of a subsidiary.

17. HIRE PURCHASE AND FINANCE LEASE LIABILITIES

Group 2009 2008 RM RM

Future minimum lease payments:-- not later than one year 1,622,780 2,759,036- later than one year but not later than five years 1,833,049 3,455,829 3,455,829 6,214,865 Less: Future finance charges (240,839) (505,753)

Present value of finance lease liabilities 3,214,990 5,709,112

Represented by:-Current (Note 20)- not later than one year 1,482,577 2,494,122Non-current (Note 16)- later than one year but not later than five years 1,732,413 3,214,990 3,214,990 5,709,112

18. TRADE PAYABLES

The normal trade credit terms granted to the Group range from 15 to 120 (2008: 15 to 120) days.

19. OTHER PAYABLES AND ACCRUALS

Group Company 2009 2008 2009 2008 RM RM RM RM

Other payables 1,843,809 1,536,773 472,304 105,131 Accruals 1,107,214 1,240,135 279,800 225,800 2,951,023 2,776,908 752,104 330,931

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Notes to the Financial Statements(Cont’d)

20. SHORT TERM BORROWINGS

Group 2009 2008 RM RM

Bank overdrafts (secured) – 1,087,165 Revolving credits (secured) 3,000,000 3,000,000 Bankers’ acceptance (secured) 14,651,000 13,157,000 Term loans (Note 16) 366,780 1,324,440 Hire purchase and finance lease liabilities after one year (Note 17 ) 1,482,577 2,494,122 19,500,357 21,062,727

The bank overdrafts, revolving credits and bankers’ acceptance are secured by:

(i) legal charges over land and buildings of subsidiaries as disclosed in Note 4(c);

(ii) corporate guarantee by the Company;

(iii) negative pledge on all assets of a subsidiary.

21. REVENUE

Revenue of the Group and the Company consists of the following:-

Group Company 2009 2008 2009 2008 RM RM RM RM

Sale of goods 139,383,909 157,829,449 – – Dividend income – – 3,300,000 1,500,000 139,383,909 157,829,449 3,300,000 1,500,000

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Notes to the Financial Statements(Cont’d)

22. OPERATING PROFIT

Operating profit has been arrived at after charging/crediting:-

Group Company 2009 2008 2009 2008 RM RM RM RM

After charging:-Allowance for doubtful debts 594,255 997,675 – –Amortisation of prepaid lease payments 119,894 119,894 – –Amortisation of intangible assets 8,455 8,455 – –Audit fee 68,000 68,000 18,000 18,000Bad debts written off 75,983 34,444 – –Casual, wages, bonuses and allowances 5,066,871 5,091,800 – –Depreciation 4,812,324 4,335,652 – –Director’s remuneration 3,061,147 2,696,026 290,800 239,200Fair value adjustment for investment properties 20,000 – – –Inventories written down 43,292 6,272,351 – –Loss on disposal of property, plant and equipment 8,497 – – –Loss on foreign exchange- unrealised 479,389 –Penalty – 22,675 – –Property, plant and equipment written down 490 – – –Rental of premises- paid/payable to directors 25,200 25,200 – –- others 212,988 210,968 – –Rental of plant and machinery 750 19,200 – –Staff costs:- salaries, allowances and bonuses 4,260,416 4,423,409 – –- Employees’ Provident Fund 558,500 847,153 – –- SOCSO 60,893 76,198 – –- other staff related costs 180,422 338,228 – –

And crediting:-Allowance for doubtful debts no longer required – 242,693 – –Bad debts recovered 22,023 – – –Fair value adjustment for investment properties – 11,412 – –Gain on foreign exchange- realised 1,398,324 467,095 – –- unrealised 478,342 599,162 – –Gain on disposal of property, plant and equipment 102,750 19,660 – –Interest income 259,521 141,552 – –Waiver of debt – 19,514 – –

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Notes to the Financial Statements(Cont’d)

23. FINANCE COSTS

Group 2009 2008 RM RM

Interest expenses- bank overdrafts 18,146 177,744- bankers’ acceptances, trust receipts and revolving credit 470,333 1,347,496- term loans 86,866 181,354- hire purchase and finance lease 264,915 283,683 840,260 1,990,277

24. TAXATION

Group Company 2009 2008 2009 2008 RM RM RM RM

Income tax- current year (7,872,801) (5,788,606) – –- prior years (520,841) 158,680 – 15,606 (8,393,642) (5,629,926) – 15,606 Deferred taxation (Note 9)- current year 140,199 (710,127) – –- prior years (5,473) 177,942 – – 134,726 (532,185) – – (8,258,916) (6,162,111) – 15,606

Income tax is calculated at the Malaysian statutory rate of 25% (2008: 26%) of the estimated assessable profit for the fiscal year.

A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company is as follows:-

Group Company 2009 2008 2009 2008 RM RM RM RM

Profit before taxation 30,015,875 27,419,516 2,878,447 1,061,474

Tax at applicable tax rate of 25% (2008 : 26%) (7,503,969) (7,129,074) (719,612) (275,983)Tax effects arising from- non-deductible expenses (1,946,519) (411,690) (105,388) (114,017)- non-taxable income 952,449 – 825,000 390,000- SME tax savings – 130,554 – –- utilisation of reinvestment allowances 408,424 905,729 – –- lease rental qualified for tax deduction 369,614 327,635 – –- deferred tax recognised at different tax rates – (34,109) – –- origination of deferred tax assets not recognised in the financial statements (12,601) (287,778) – –- overaccrual in prior years (526,314) 336,622 – 15,606 Tax expense for the financial year (8,258,916) (6,162,111) – 15,606

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Notes to the Financial Statements(Cont’d)

25. EARNINGS PER SHARE

(a) Basic

Basic earnings per share is calculated by dividing the net profit for the financial year attributable to equity holders of the Company by the weighted average number of ordinary shares of RM0.50 each on issue during the financial year.

Group 2009 2008 RM RM Net profit for the financial year 21,756,959 21,257,405Weighted average number of ordinary shares on issue 132,000,000 132,000,000 Basic earnings per share for the financial year (sen) 16.48 16.10

(b) Diluted

The basic and diluted earnings per ordinary share are equal as the Group has no dilutive potential ordinary shares.

26. DIVIDENDS

Group and Company 2009 2008 RM RM

Recognised during the financial year:-First interim tax exempted dividend of 1.50 sen per ordinary share of RM0.50 in respect of financial year ended 31st December 2009 1,980,000 –

Second interim tax exempted dividend of 1 sen per ordinary share of RM0.50 in respect of financial year ended 31st December 2009 1,320,000 –

Final dividend of 2 sen tax exempt per share in respect of financial year ended 31st December 2007 – 2,640,000 3,300,000 2,640,000

The directors recommend the payment of a final tax exempted dividend of 1.50 sen per ordinary share of RM0.50 amounting to RM1,980,000/- in respect of the current financial year which, subject to the approval of the shareholders at the forthcoming Annual General Meeting of the Company, will be paid to the shareholders on a date to be determined later by the directors.

27. SIGNIFICANT RELATED PARTY TRANSACTIONS

(a) Identificationofrelatedparties

Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

The Company has controlling related party relationship with its direct and indirect subsidiaries.

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Notes to the Financial Statements(Cont’d)

27. SIGNIFICANT RELATED PARTY TRANSACTIONS (CONT’D)

(b) Significantrelatedpartytransactions

Group Company 2009 2008 2009 2008 RM RM RM RM

Dividends received/receivable from subsidiary - United U-LI (M) Sdn. Bhd. – – 3,300,000 1,500,000

Rental of premises paid/payable to directors, namely Dato’ Lee Yoon Wah, Dato’ Lee Yoon Kong and Datin Lim Pki Fong (spouse of Dato’ Lee Yoon Wah) 25,200 25,200 – –

Salaries and other related expenses paid/payable to persons related to certain directors 151,787 143,104 – –

The directors of the Group and the Company are of the opinion that the above transactions have been entered into in the normal course of business and the terms are no less favourable than those arranged with third parties.

No rental of premises payable to directors remains outstanding as at 31st December 2009. (2008: RM Nil).

(c) Key management personnel remuneration

The remuneration of directors and other members of key management during the financial year are as follows:-

Group Company 2009 2008 2009 2008 RM RM RM RM

Short term employee benefits 3,213,416 3,010,910 290,800 239,200Employees’ Provident Fund 411,408 327,180 – –

3,624,824 3,338,090 290,800 239,200

Other member of key management personnel comprise persons other than directors of the Group entities, having authority and responsibility for planning, directing and controlling the activities of the Group entities either directly or indirectly.

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Notes to the Financial Statements(Cont’d)

27. SIGNIFICANT RELATED PARTY TRANSACTIONS (CONT’D)

(c) Key management personnel remuneration (Cont’d)

The details of remuneration received and receivable by directors of the company during the financial year are as follows:-

Group Company 2009 2008 2009 2008 RM RM RM RM

Executive:- salaries 2,376,103 1,735,267 8,400 8,325- fees 90,000 459,000 90,000 72,000- other emoluments 339,644 258,884 – –

2,805,747 2,453,151 98,400 80,325- benefits-in-kind 54,200 38,200 – –

2,859,947 2,491,351 98,400 80,325

Non-Executive:- fees 231,000 223,000 168,000 139,000- allowances 24,400 19,875 24,400 19,875

255,400 242,875 192,400 158,875- benefits-in-kind 15,000 2,500 – –

270,400 245,375 192,400 158,875

Total 3,130,347 2,736,726 290,800 239,200

Total directors’ remuneration 3,061,147 2,696,026 290,800 239,200Total estimated money value of benefits-in-kind 69,200 40,700 – –

3,130,347 2,736,726 290,800 239,200

The number of directors of the Company whose total remuneration during the financial year fell within the following bans is analysed below:-

Number of Directors 2009 2008

Executive directors: RM500,000 and below 1 1RM500,001- RM1,000,000 – 1RM1,000,001- RM1,500,000 2 1

Non executive directors:RM50,000 and below 4 4RM50,001- RM100,000 – –RM100,001- RM150,000 1 1

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Notes to the Financial Statements(Cont’d)

28. FINANCIAL INSTRUMENTS

(a) Financial Risk Management and Objectives

The Group seeks to manage effectively various risks namely credit, liquidity, foreign currency and interest rate risks to which the Group is exposed to in its daily operations.

(i) Credit risk

Credit risks, or the risk of counterparties defaulting, are controlled by the application of credit approvals, limits and monitoring procedures. Credit risks are minimised and monitored by limiting the Group’s associations to business partners with high creditworthiness. Trade receivables are monitored on an ongoing basis via Group management reporting procedures. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures.

The credit risk of the Group’s other financial assets, which comprise cash and cash equivalents arises from default of the counterparty, with a minimum exposure equal to the carrying amount of these financial assets. However, management does not expect any counterparty to fail to meet its obligation.

The Group does not have any significant exposure to any individual customer or counterparty nor does it have any major concentration of credit risk related to any financial assets.

(ii) Liquidity risk The Group actively manages its debt maturity profile, operating cash flows and the availability

of funding so as to ensure that all financing, repayment and funding needs are met. As part of its overall prudent liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements.

(iii) Foreign currency risk

During the financial year, the Group incurs foreign currency risk on transactions that are denominated in currencies other than Ringgit Malaysia. The currencies giving rise to this risk are primarily United States Dollar (“USD”), Singapore Dollar (“SGD”), Euro (“EUR”), Brunei Dollar (“BND”) and Australian Dollar (“AUD”). Exposures to foreign currency risks are monitored on an ongoing basis.

The Group does not consider it necessary to enter into foreign exchange contracts in managing its foreign exchange risk resulting from cash flows from transactions denominated in foreign currencies, given the nature of the business for the time being.

The net unhedged financial assets of the Group that are not denominated in their functional currencies are as follows:-

Net Financial Assets Held in Non-Functional Currencies AUD BND EUR SGD USD Total RM RM RM RM RM RM

At 31st December 2009 Ringgit Malaysia 55,990 52,879 93,913 15,845,513 1,466,688 17,514,983

At 31st December 2008Ringgit Malaysia 2,059 34,143 195,174 9,920,422 4,592,747 14,744,545

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28. FINANCIAL INSTRUMENTS (CONT’D)

(a) Financial Risk Management and Objectives (Cont’d)

(iv) Interest rate risk

The Group’s primary interest rate risk relates to interest-bearing debts as at 31st December 2009. The investments in financial assets are mainly short term in nature and they are not held for speculative purposes.

Effective Interest Within 1 - 5 > 5 Rate 1 Year Years Years Total % RM RM RM RM

GroupAs at 1st December 2009Financial AssetFixed deposits placed with a licensed bank 1.75 8,976,257 – – 8,976,257

Financial LiabilitiesBank overdrafts – – – – –Bankers’ acceptances 4.21 14,651,000 – – 14,651,000Hire purchase and finance lease liabilities 4.86 1,482,577 1,732,413 – 3,214,990Revolving credits 4.06 3,000,000 – – 3,000,000Term loans (fixed rate) 6.50 329,038 – – 329,038Term loans (floating rate) 6.05 37,742 175,954 98,912 312,608 Effective Interest Within 1 - 5 > 5 Rate 1 Year Years Years Total % RM RM RM RM

GroupAs at 31st December 2008Financial Asset Fixed deposits placed with a licensed bank 3.08 8,431,069 – – 8,431,069

Financial LiabilitiesBank overdrafts 9.60 1,087,165 – – 1,087,165Bankers’ acceptances 3.84 13,157,000 – – 13,157,000Hire purchase and finance lease liabilities 3.27 2,494,122 3,214,990 – 5,709,112Revolving credits 5.66 3,000,000 – – 3,000,000Term loans (fixed rate) 6.50 1,112,998 329,209 – 1,442,207Term loans (floating rate) 7.08 211,442 172,671 138,995 523,108

Notes to the Financial Statements(Cont’d)

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28. FINANCIAL INSTRUMENTS (CONT’D)

(b) Fair Values

(i) Recognisedfinancialinstruments

The fair values of financial assets and financial liabilities approximate their respective carrying values on the balance sheet of the Group and of the Company due to the relatively short term to maturity of these financial instruments, except for the following:-

Group Carrying Fair Amount Value RM RM

At 31st December 2009Fixed rate term loans (Note 28 (a) (iv)) 329,038 308,956

At 31st December 2008Fixed rate term loans (Note 28 (a) (iv)) 1,442,207 1,410,855

(ii) Unrecognisedfinancialinstruments

There were no unrecognised financial instruments as at 31st December 2009.

29. CONTINGENT LIABILITIES

The directors are of the opinion that provision are not required in respect of these matters as it is not probable that future sacrifice of economic benefits will be required or the amount is not capable of reliable measurement.

Group 2009 2008 RM RM

Secured:Performance guarantees extended to third parties in respect of supplying goods under contracts 1,597,873 1,023,803

Bank guarantees extended to Tenaga Nasional Berhad 172,000 130,000

Company 2009 2008 RM RM

Unsecured:Corporate guarantees given to licensed banks for credit facilities granted to subsidiaries 78,460,000 78,460,000

Corporate guarantees given to leasing companies in respect of property, plant and equipment acquired under finance lease by certain subsidiaries 3,214,990 5,709,112

Notes to the Financial Statements(Cont’d)

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30. CAPITAL COMMITMENTS

Group 2009 2008 RM RM

Capital expenditureApproved and contracted for:- Property, plant and equipment – 29,200

31. SEGMENT INFORMATION

(a) Geographical Segments

The Group’s business segments operate substantially from Malaysia. In determining the geographical segments of the Group, revenues are based on the country in which the customer is located. There are no inter-segment revenues. No segment results, assets and capital expenditure are presented as the Group does not have a legal presence in any other country other than Malaysia.

Revenue Total assets Capital expenditure 2009 2008 2009 2008 2009 2008 RM RM RM RM RM RM

Malaysia 93,580,184 114,167,329 155,455,676 141,087,452 2,481,502 7,227,441 Overseas 45,803,725 43,662,120 18,394,305 15,021,086 – –

139,383,909 157,829,449 173,849,981 156,108,538 2,481,502 7,227,441

(b) Business Segments

No business segment information has been presented as the Group is solely involved in the manufacturing and sales of metal related products.

32. COMPARATIVE FIGURES

Comparative figures have been audited by another firm of chartered accountants other than Baker Tilly Monteiro Heng.

Notes to the Financial Statements(Cont’d)

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Additional ComplianceInformation

The following information is provided in compliance with the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) for the financial year ended 31 December 2009:

Material Contracts Involving Directors and Substantial Shareholders

Save as otherwise disclosed in Significant Related Party Transactions in the Financial Statements, there are no material contracts including contracts relating to any loan entered into by the Company and its subsidiaries involving Directors and major shareholders’ interests.

Sanctions and Penalties

There were no sanctions or penalties imposed by any regulatory authorities on the Company and its subsidiaries, Directors or management during the financial year ended 31 December 2009.

Share Buy-Back

The Company did not make any share buy-back during the financial year ended 31 December 2009.

Non-Audit Fees

There were no non-audit fees paid to external auditors during the financial year ended 31 December 2009.

Options, Warrants or Convertible Securities Exercised

No options, warrants or convertible securities were issued during the financial year ended 31 December 2009.

Variations in Results for the Financial Year

There was no deviation of 10% or more between the audited results for the financial year and the unaudited financial results previously announced.

American Depository Receipt (“ADR”)/Global Depository Receipt (“GDR”)

The Company did not sponsor any ADR or GDR programme during the financial year ended 31 December 2009.

ProfitEstimate,ForecastorProjection

The Company has not provided a profit forecast for the financial year ended 31 December 2009.

ProfitGuarantees

There were no profit guarantees given by the Company during the financial year ended 31 December 2009.

Revaluation of Properties

The Group’s properties as at 31 December 2009 are listed on page 63 and 64. The note on revaluation of the properties is in Note 2.3(d) in the notes to the financial statements on page 36.

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Properties of the Group

Age of Net Book Date ofCompany/ Description/ Land Area/ Tenure Building Value Revaluation/Location Existing use Built-up Area (years) RM’000 Acquisition

United U-LI (M) Sdn. Bhd.

Lot 5 (PT7907) Factory/ 43,666 Sq.ft/ 99 years 17 3,379 31.12.2005Jalan Balakong, Factory used 36,881 Sq.ft expiring on Revalued43300 Seri Kembangan, 11 October 2091 Selangor Darul Ehsan. No. 33, Jalan Kartunis U1/47, Semi- 9,601 Sq.ft/ Freehold 11 2,736 31.12.2005Temasya Industrial Park, Detached 8,392 Sq. ft RevaluedSeksyen U1, 40150 Shah Alam, Factory/ Selangor Darul Ehsan. Office used No. 29, Jalan Taming 7, Terrace 2,000 Sq.ft/ Freehold 17 292 31.12.2005Taman Taming Jaya Industrial Factory/ 2,550 Sq.ft RevaluedPark, 43300 Balakong, Store Selangor Darul Ehsan. No. 43, Jalan Kamunting 1, Terrace 1,600 Sq.ft/ Freehold 14 87 31.12.2005Bukit Sentosa, 48300 Serendah, Factory/ 1,300 Sq.ft RevaluedSelangor Darul Ehsan. Vacant No. 25, Jalan Taming 5, Terrace 13,500 Sq.ft/ Freehold 7 1,752 31.12.2005Taman Taming Jaya, Factory/ 13,120 Sq.ft Revalued43300 Seri Kembangan, Store Selangor Darul Ehsan. No. 27, Jalan Taming 5, Terrace 13,500 Sq.ft/ Freehold 7 1,660 31.12.2005Taman Taming Jaya, Factory/ 14,806 Sq.ft Revalued43300 Seri Kembangan, Store Selangor Darul Ehsan. Unit B21-09, Desa Bistari Apartment/ -/700 Sq.ft Freehold 7 90 31.12.2005Apartment, No. 3, Vacant RevaluedLindang Pantai Jerjak, 11700 Pulau Pinang. No. 102, Jalan Perigi Nanas Terrace 2,400 Sq.ft/ 99 years 6.5 290 31.12.20058/10, Section 12 (Phase 1B), Factory/ 3,300 Sq.ft expiring on RevaluedPulau Indah Industrial Park, Vacant 30 March 2097 West Port, 42920 Port Klang, Selangor Darul Ehsan. Lot 7, Jalan 6/1, Kawasan Factory/ 185,718 Sq.ft/ 84 years 5 11,662 31.12.2005Perindustrian Seri Kembangan, Factory used 138,314 Sq.ft expiring on Revalued43300 Seri Kembangan, 10 January 2089 Selangor Darul Ehsan. No. 75, Jalan SA 1, 3 Storey Semi- -/2,605 Sq.ft Freehold 5 650 31.12.2007Seri Aman Heights, Detached Revalued47000 Sungai Buloh, House/ Selangor Darul Ehsan. Vacant

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Properties of the Group(Cont’d)

Age of Net Book Date ofCompany/ Description/ Land Area/ Tenure Building Value Revaluation/Location Existing use Built-up Area (years) RM’000 Acquisition Unit No. 48B-9-4, Apartment/ -/848 Sq.ft Freehold 2 135 31.12.2008Sri Ixora, Jalan Perimbun 27/11, Vacant RevaluedSection 27, 40675 Shah Alam, Selangor Darul Ehsan. Lot No. 120, Floor No. L23, Condominium/ -/456 Sq.ft 99 years 6 350 6.8.2009Type S3, Resort Suites @ Vacant expiring on AcquiredPyramid Tower, Bandar Sunway, 21 February 2102 Selangor Darul Ehsan. Gabung Mekar Sdn. Bhd. Lot 17045, Jalan Balakong, Factory/ 38,118 Sq.ft/ 99 years 17 2,442 31.12.200543300 Seri Kembangan, Factory used 37,428 Sq.ft expiring on RevaluedSelangor Darul Ehsan. 11 October 2091 United U-LI Goodlite Sdn. Bhd. No. 44, Jalan Cetak, Tasek Factory/ 131,282 Sq.ft/ 99 years 38 3,053 31.12.2005Industrial Estate, Factory used 96,022 Sq.ft expiring on Revalued31400 Ipoh, 20-Mar-66 Perak Darul Ridzuan. United U-LI Building Materials Sdn. Bhd. 1, Jalan Seroja 54, Workshop/ 9,408 Sq.ft/ Freehold 3.5 1,156 29.5.2006Taman Johor Jaya, Warehouse 11,287 Sq.ft Acquired81100 Johor Bahru, Johor Darul Takzim.

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Shareholders’ Information

SHARE CAPITAL AS AT 23 MARCH 2010

Authorised Share Capital : RM100,000,000

Issued and Paid-Up Capital : RM66,000,000

Class of Shares : Ordinary shares of RM0.50 each

Voting Rights : One (1) vote per ordinary share

DISTRIBUTION OF SHAREHOLDINGS AS AT 23 MARCH 2010

No of No. ofSize of Shareholdings Shareholders % Shares Held %

Less than 1,000 313 15.14 34,862 0.031,001 - 10,000 1,139 55.10 5,889,590 4.4610,001 - 100,000 498 24.09 16,537,754 12.53100,001 to less than 5% of issued shares 116 5.61 55,537,794 42.075% and above of issued shares 1 0.05 54,000,000 40.91

Total 2,067 100.00 132,000,000 100.00

SHAREHOLDERS WITH HOLDINGS OF 5% AND ABOVE AS AT 23 MARCH 2010 Direct Interest Deemed Interest No. of No. ofNo. Name Shares Held % Shares Held %

1 Pearl Deal (M) Sdn. Bhd. (“PDSB”) 54,000,000 40.91 – –2 Mayban Nominees 11,317,600 8.57 – – (Tempatan) Sdn. Bhd. 3 Dato’ Lee Yoon Wah 4,221,848 3.2 54,000,000# 40.914 Dato’ Lee Yoon Kong 3,867,246 2.93 54,000,000# 40.91 # Deemed interest through PDSB

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Shareholders’ Information(Cont’d)

LIST OF TOP 30 SHAREHOLDERS AS AT 23/03/2010 No. Name of Shareholders No. of Shares Held %

1 PearlDeal(M)Sdn.Bhd. 54,000,000 40.91

2 MaybanNominees(Tempatan)Sdn.Bhd. 11,317,600 8.57

3 Dato’LeeYoonWah 4,221,848 3.20

4 Dato’LeeYoonKong 3,867,246 2.93

5 AffinNominees(Tempatan)Sdn.Bhd. 2,437,000 1.85

6 PublicNominees(Tempatan)Sdn.Bhd 2,378,000 1.80

7 LawJoonHoeVincent 2,243,400 1.70

8 HDMNominees(Tempatan)Sdn.Bhd. 1,518,700 1.15

9 LewYickKoon 1,326,500 1.00

10 TeoChiangHong 1,265,400 0.96

11 Ke-ZanNominees(Asing)Sdn.Bhd. 991,800 0.75

12 ChiaKeeFoo 871,000 0.66

13 LiauChoonHwa&SonsSdn.Bhd. 808,800 0.61

14 NgSengKuan 800,000 0.61

15 YipSweeKian 773,400 0.59

16 ShariffBinMohdShah 729,128 0.55

17 TANominees(Tempatan)Sdn.Bhd. 704,000 0.53

18 MalaysiaNominees(Tempatan)SendirianBerhad 700,000 0.53

19 CheeSauFoong 638,300 0.48

20 WeePeiSee 551,000 0.42

21 RHBCapitalNominees(Tempatan)Sdn.Bhd. 542,900 0.41

22 BehChoonHean 510,000 0.39

23 TanTienSang 508,000 0.38

24 AristoCorporationSdn.Bhd. 500,000 0.38

25 AIMIndustrialMarketingSdn.Bhd. 495,000 0.38

26 L.T.MHoldingsSdn.Bhd. 459,600 0.35

27 HuYoonKong 456,000 0.35

28 LimTeckLing 448,600 0.34

29 SeongKwokChing 447,700 0.34

30 LiauThaiMin 438,600 0.33

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Notice of Tenth Annual General Meeting

NOTICE IS HEREBY GIVEN THATtheTenth(10th)AnnualGeneralMeetingoftheCompanywillbeheldatClassic2Room,HolidayVillaSubang,9JalanSS12/1,SubangJaya,47500PetalingJaya,SelangorDarulEhsanonWednesday,12thMay2010at10:00a.m.forthefollowingpurposes:-

AGENDA

AS ORDINARY BUSINESS

1. To receive and consider theAnnual Report and Financial Statements for thefinancial year ended31st December 2009 together with the Directors’ andAuditors’Reportsthereon.

2. ToapprovethepaymentofaFinalTaxExemptdividendof1.5 (One and a Half)senperordinaryshare for thefinancial yearended31st December 2009on132,000,000ordinarysharesofRM0.50eachamountingtodividendpayableofRM1,980,000.00.

3. To approve the payment ofDirectors’ fees for the financial year ended31st December 2009.

4. Tore-appointDato’ Wira Abd Rahman Bin IsmailwhoretirespursuanttoSection129(6)oftheCompaniesAct,1965.

5. To re- elect Dato’ Lee Yoon Kong who retires pursuant toArticle 89 of theCompany’sArticlesofAssociation.

6. Tore-electChim Wai KhuanwhoretirespursuanttoArticle89oftheCompany’sArticlesofAssociation.

7. To re- elect Lokman Bin Mansor who retires pursuant toArticle 89 of theCompany’sArticlesofAssociation.

8. Tore-appointMessrsBaker Tilly Monteiro HengasAuditorsoftheCompanyandtoauthorisetheDirectorstofixtheirremuneration.

AS SPECIAL BUSINESS

To consider and if thought fit, pass the following resolution with or withoutmodifications:-

9. Authoritytoallotandissuesharespursuanttosection132DoftheCompaniesAct,1965

“RESOLVEDTHAT,subjectalwaystotheCompaniesAct,1965theArticlesofAssociation of the Company and approvals and requirements of the relevantgovernmental/regulatoryauthorities(whereapplicable),theDirectorsbeandareherebyempoweredpursuanttoSection132DoftheCompaniesAct,1965toallotandissuenewordinarysharesofRM0.50eachintheCompany,fromtimetotimeanduponsuchtermsandconditionsandforsuchpurposeandtosuchpersonswhomsoevertheDirectorsmay,intheirabsolutediscretiondeemfitandexpedientintheinterestoftheCompany,providedthattheaggregatenumberofsharesissuedpursuanttotheresolutiondoesnotexceed10%oftheissuedandpaidupsharecapitalforthetimebeingoftheCompanyANDTHATsuchauthorityshallcontinuetobeinforceuntiltheconclusionofthenextAnnualGeneralMeetingoftheCompany”

OrdinaryResolution1

OrdinaryResolution2

OrdinaryResolution3

OrdinaryResolution4

OrdinaryResolution5

OrdinaryResolution6

OrdinaryResolution7

OrdinaryResolution8

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Notice of Tenth Annual General Meeting(Cont’d)

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS ALSO HEREBY GIVEN THAT, subject to the approval of the shareholders at the Tenth (10th) Annual General Meeting, A Final Tax Exempt Dividend of 1.5 (One and a Half) sen per ordinary share for the financial year ended 31st December 2009 on 132,000,000 ordinary shares of RM0.50 each amounting to dividend payable of RM1,980,000.00 will be paid to the shareholders on the 18th June 2010. The entitlement date of the said dividend shall be 26th May 2010.

A Depositor shall qualify for entitlement to the dividend only in respect of:-

a. Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 26th May 2010 in respect of transfers.

b. Shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa Malaysia Securities Berhad.

By Order of the Board

KOAY SOO NGOH (Maicsa 0856746)FOO LI LING (Maicsa 7019557)Company Secretaries

Date20th April 2010

NOTES:

1. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy or proxies to attend and vote on his/her/their behalf. Such proxy need not be a member of the Company.

2. Foraproxyformbevalid,itmustbedepositedattheRegisteredOfficeoftheCompanyat62C,JalanSS21/62,DamansaraUtama,47400PetalingJaya,SelangorDarulEhsannotlessthan48(fortyeight)hoursbeforetimeappointedfortheMeetingor any adjournments thereof.

3. The Instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writingor,iftheappointerisacorporation,eitherunderitscommonsealorunderthehandofanofficerorattorneydulyauthorised. An instrument appointing a proxy to vote at a meeting shall be deemed to include the power to demand a poll on behalf of the appointer.

4. Explanatory Notes on Special Business

Ordinary Resolution 8 on the Authority to allot and issue shares pursuant to section 132D of the Companies Act, 1965

The Company continues to consider opportunities to broaden the operating base and earnings potential of the Company. The proposedOrdinaryResolution8ifpassed,willauthorisethedirectorstoissuesharesupto10%oftheissuedandpaid-upcapital of the Company for the time being and for such purposes as the directors consider would be in the best interest of the Company.

The purpose for the renewal of a general mandate is to avoid any delay and costs in convening a general meeting and to specificallyapprovesuchanissueofsharesforanypossiblefundraisingactivities(excludingplacingofshares)forthepurpose of funding future investment projects, additional working capital etc.

This authority unless revoked or varied at a general meeting will expire at the next Annual General Meeting of the Company.

As at the date of this notice, no new shares of the Company were issued pursuant to the mandate granted to the directors at the last Annual General Meeting held on 7th May 2009 and which will lapse at the conclusion of the forthcoming Annual General Meeting.

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Statement AccompanyingNotice of Tenth Annual General Meeting

Pursuant to paragraph 8.27(2) of the Bursa Malaysia Securities Berhad Main Market Listing Requirements appended hereunder are:-

1. Directors who are standing for re-election

Dato’ Wira Abd Rahman Bin Ismail, who is over the age of seventy (70) years, is retiring in accordance with Section 129 (6) of the Companies Act, 1965 and is seeking re-appointment at the forthcoming Annual General Meeting.

The following Directors are retiring in accordance with Article 89 of the Company’s Articles of Association and seeking re-election at the AGM.

i) Dato’ Lee Yong Kongii) Chim Wai Khuaniii) Lokman Bin Mansor

Further details of Directors seeking re-election at the AGM are set out in the Profile of Directors from page 5 to page 7 of the Annual Report.

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(This page has been intentionally left blank)

UNITEDU-LICORPORATIONBERHAD (CompanyNo.510737-H)

IncorporatedinMalaysiaFORMOFPROXYI/We.............................................................................................................................................................................

of..................................................................................................................................................................................(address)

beingamember/membersofUNITEDU-LICORPORATIONBERHAD,herebyappoint(NameofProxy/Proxies/CorporateRepresentative)..........................................................................................................................................

orfailinghim...............................................................................................................................................................(name)

of..................................................................................................................................................................................(address)

orfaillingtheabovenamedproxy/proxies/corporaterepresentative,theChairmanofthemeeting,asmy/ourproxytovoteforme/usonmyourbehalfattheTenth(10th)AnnualGeneralMeetingoftheCompanytobeheldatClassic2Room,HolidayVillaSubang,9JalanSS12/1,SubangJaya,47500PetalingJaya,SelangorDarulEhsanonWednesday,12thMay2010at10:00a.m.,andatanyadjournmentthereof,asindicatedbelow:-

For AgainstORDINARYBUSINESSResolution1 FinalTaxExemptDividend

Resolution2 Directors’Fees

Resolution3 Dato’WiraAbdRahmanBinIsmail

Resolution4 Dato’LeeYoonKong

Resolution5 ChimWaiKhuan

Resolution6 LokmanBinMansor

Resolution7 Auditors

SPECIALBUSINESSResolution8 Section132DoftheCompaniesAct,1965

(ifyouwishtoinstructyourproxyhowtovote,insertatickintheappropriatebox.Subjecttoanyvotinginstructionsso given, the proxy will vote, or may abstain from voting on any resolution as he may think fit. Ifthememberisanindividualorjointshareholder: No.ofsharesheld:

Signature Date:

Ifthememberisacorporation:

TheCommonSealof.................................................... Sealwas hereunto affixed in accordance with itsArticlesofAssociationinthepresenceof

No.ofsharesheld:

Signature Director/Secretary Date:

NOTESTOFORMPROXY:-1. AmemberoftheCompanyentitledtoattendandvoteattheMeetingisentitledtoappointaproxyorproxiestoattendandvoteonhisbehalf.

SuchproxyneednotbeamemberoftheCompany.2. For a proxy form be valid, it must be deposited at the Registered Office of the Company at 62C, Jalan SS 21/62, Damansara Utama,

47400PetalingJaya,SelangorDarulEhsannotlessthan48(fortyeight)hoursbeforetimeappointedfortheMeetingoranyadjournmentsthereof.

3. TheInstrumentappointingaproxyshallbeinwritingunderthehandoftheappointerorofhisattorneydulyauthorisedinwritingor,iftheappointer is a corporation, either under its common seal or under the hand of an officer or attorney duly authorised. An instrument appointing aproxytovoteatameetingshallbedeemedtoincludethepowertodemandapollonbehalfoftheappointer.

4. ExplanatoryStatementonSpecialBusiness OrdinaryResolution8ontheAuthoritytoallotandissuesharespursuanttosection132DoftheCompaniesAct,1965 TheCompanycontinuestoconsideropportunitiestobroadentheoperatingbaseandearningspotentialof theCompany.Theproposed

OrdinaryResolution8ifpassed,willauthorisethedirectorstoissuesharesupto10%oftheissuedandpaid-upcapitaloftheCompanyforthetimebeingandforsuchpurposesasthedirectorsconsiderwouldbeinthebestinterestoftheCompany.

The purpose for the renewal of a general mandate is to avoid any delay and costs in convening a general meeting and to specifically approve suchanissueofsharesforanypossiblefundraisingactivities(excludingplacingofshares)forthepurposeoffundingfutureinvestmentprojects,additionalworkingcapitaletc.

ThisauthorityunlessrevokedorvariedatageneralmeetingwillexpireatthenextAnnualGeneralMeetingoftheCompany.Asatthedateofthisnotice,nonewsharesoftheCompanywereissuedpursuanttothemandategrantedtothedirectorsatthelastAnnualGeneralMeetingheldon7thMay2009andwhichwilllapseattheconclusionoftheforthcomingAnnualGeneralMeeting.

✄

Fold this flap for sealing

Then fold here

1st fold here

affIxSTamp

The Company SecretaryUNITED U-LI CORPORATION BERHAD (510737-H) 62C, Jalan SS 21/62,Damansara Utama,47400 Petaling Jaya,Selangor Darul Ehsan,Malaysia.