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Annual Report 2010

MOVINGFORWARD



about uE E&C LtD.

UE E&C Ltd., a subsidiary o United Engineers Limited, is anestablished, integrated mechanical and electrical (“M&E”)engineering and construction company.

We provide integrated M&E engineering services that include highand low-voltage electrical power distribution, air-conditioning andmechanical ventilation, and re protection, alarm and sanitarysystems. For construction, we provide a comprehensive range oservices, rom design and build, civil works to general constructionor residential, industrial, commercial and institutional buildings aswell as inrastructural works. To etend a more complete value chain to our customers, wealso provide total power solutions, load testing services, rentaland supply o metal orms, supply o fooring tiles, and rental anddistribution o industrial equipment. In addition, we engage inresidential property development through joint ventures. Headquartered in Singapore, we have overseas operations inBrunei, China, Vietnam and Malaysia.



uE E&C Ld. / Annual Report 2010

02



EnginEEringgrowth

We provide a wide range o M&E engineering services that include high and low-voltage electrical power distribution, air-conditioning and mechanical ventilation,

and re protection, alarm and sanitary systems.




04



ConstruCtingthe uture

We provide a wide range o construction services that include design and build,civil works and general construction or residential, industrial, commercial and

institutional buildings as well as inrastructural works.




06



gEnEratingsuccess

We provide construction-related services that include total power solutions, loadtesting services, rental and supply o metal orms, supply o fooring tiles, and

rental and distribution o industrial equipment.




08

businEssmoDEL

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• t o t a l P o w e r s o l ut ions a n d L o a d t

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g



bd Dec

Norman Ip Ka Cheung (Independen Chairman)

Chua Hock Tong (Execie Direcor and Chie Execie Ocer)

Kwan Chiew Choi (Independen Direcor)

Pok Soy Yoong (Independen Direcor)

Tan Soo Kiang (Independen Direcor)

Jackson Chevalier Yap Kit Siong (Non-Execie Direcor)

ad CeePok Soy Yoong (Chairman)

Kwan Chiew Choi (Member)

Tan Soo Kiang (Member)

n Cee

Kwan Chiew Choi (Chairman)

Norman Ip Ka Cheung (Member)

Pok Soy Yoong (Member)

ree Cee

Tan Soo Kiang (Chairman)

Norman Ip Ka Cheung (Member)Jackson Chevalier Yap Kit Siong (Member)

J Cpy secee

Tan Ching Chek, LLB (Hons), Associate o the

Institute o Chartered Secretaries and Administrators

Lo Swee Oi, Associate o the Institute o

Chartered Secretaries and Administrators

BSL Corporate Services Pte Ltd

220 Orchard Road

#05-01 Midpoint Orchard

Singapore 238852

Tel: (65) 6235 3388

Fa: (65) 6235 3178

Website: www.bslcs.com.sg

reeed ofce ad Pcpl Plce o be

12 Ang Mo Kio Street 64

#03-13 UE BizHub CENTRAL

Singapore 569088

Tel : (65) 6818 8666

Fa: (65) 6818 8682

Website: www.ueec.sg

se re ad se te ofce

Boardroom Corporate & Advisory Services Pte. Ltd.

50 Rafes Place

#32-01 Singapore Land Tower

Singapore 048623

ad

Ernst & Young LLP

Public Accountants and Certied Public Accountants

One Rafes Quay

North Tower, Level 18

Singapore 048583

Partner-in-charge: Michael Sim Juat Quee

Certied Public Accountant

(Appointed with eect rom nancial year ended

31 December 2010)

Pcpl bke

Oversea-Chinese Banking Corporation Limited

Baiduri Bank Berhad

Citibank, N.A., Singapore Branch

DBS Bank Ltd

The Hongkong and Shanghai Banking Corporation Limited

United Overseas Bank Limited

CorPoratEinFormation

The initial public oering o the Company was sponsored by Oversea-Chinese Banking Corporation Limited (the “Issue Manager,

Underwriter and Placement Agent”). The Issue Manager, Underwriter and Placement Agent assume no responsibility or the contents

o this annual report.




10

ice see ($000) 2010 2009 2008 2007

Revenue 381,853 394,801 327,025 249,636

Prot beore Ta 54,960 35,117 6,189 7,840

Income Ta Epense (9,923) (4,079) (742) (325)

Prot Net o Ta 45,037 31,038 5,447 7,515

Prot Attributable to Owners o the Parent, Net o Ta 39,785 29,023 4,545 7,417

see Fcl P ($000)

Property, Plant and Equipment 34,351 26,738 23,456 19,807

Investment Properties 7,500 10,500 10,010 10,580

Non-Current Investments 10,667 4,092 1,407 815

Other Non-Current Assets 50,375 64,981 55,550 24,767

Net Current Assets (See note below) 32,118 (10) (8,681) 2,646

135,011 106,301 81,742 58,615

Shareholders’ Equity 88,756 14,686 (10,754) (9,594)

Non-Controlling Interests 309 5,559 4,163 3,931

Short and Long-Term Borrowings 28,372 31,692 38,998 14,560

Other Non-Current Liabilities 13,659 49,912 46,353 45,937

Deerred Ta Liabilities 3,915 4,452 2,982 3,781

135,011 106,301 81,742 58,615

Net Debt ($000) 164,399 227,749 225,046 192,367

Debt to Equity (gross) (times) 1.9 15.5 NM NM

NM: Not meaningul

Note: In arriving at net current assets, short-term borrowings have been ecluded but deerred ta assets have been included.

Pe ody se

Earnings per Ordinary Share (¢)*

- Prot Attributable to Ordinary Shareholders 19.9 14.5 2.3 3.7

* Calculated based on the pre-invitation share capital o 200,000,000 ordinary shares or all nancial years or comparative purposes.

Four-YEar FinanCiaL ProFiLEoF thE grouP



Four-YEar FinanCiaL ChartsoF thE grouP

rEvEnuE bYbusinEss

sEgmEnts($000)

Cc324,477

(85.0%)

Eee31,215

(8.2%)

bldmel

dEqpe26,161(6.8%)

rEvEnuE bYgEograPhiCaL

sEgmEnts($000)

spe312,119(81.7%)

oe aCe

8,203(2.2%)

oe asEanCe

61,531(16.1%)

EarningsPEr

orDinarYsharE

(¢)*

2010 2009 2008 2007

19.9

14.5

2.33.7

grouPProFitnEt oF

tax($000)

2010 2009 2008 2007

45,037

31,038

5,4477,515

grouPrEvEnuE

($000)

2010 2009 2008 2007

381,853394,801

327,025

249,636

* Calculated based on the pre-invitation share capital o 200,000,000 ordinary shares or all nancial years

or comparative purposes.




12

LEttEr tosharEhoLDErs

DEar sharEhoLDErs,

On behal o the Board o Directors, we are pleased to present

you the inaugural annual report o UE E&C Ltd. (“UEEC”) and its

group o companies (the “UEEC Group”) or the nancial year

ended 31 December 2010. We successully launched our initial

public oering (“IPO”) on 16 February 2011 and our shares

debuted on the Mainboard o Singapore Echange Securities

Trading Limited on 25 February 2011.

FINANCIAL PERFORMANCE

The UEEC Group’s gross prot rose 47% to $67.5 million, and gross

prot margin rose to 17.7% compared with 11.6% in 2009 despite

a slight dip in revenue rom $394.8 million in 2009 to $381.9

million in 2010.

Attributable prot increased 37% to $39.8 million compared with

$29.0 million in 2009. Earnings per ordinary share1 was 19.9 cents

compared with 14.5 cents in 2009. Net asset per ordinary share 1

was $0.44 as at 31 December 2010 compared with $0.07 as at 31

December 2009.

A NEW START FOR AN ESTABLISHED NAME

We were spun o rom United Engineers Limited and its group o

companies (the “UE Group”) to become a separately-listed company.

Although UEEC has only been newly listed, each o our two principal

subsidiaries – United Engineers (Singapore) Pte Ltd and Greatearth

Construction Pte Ltd (“Greatearth”) – has close to 30 years o proven

track record in the mechanical and electrical (“M&E”) engineering

and construction business respectively. Our construction subsidiary

in Brunei, United Engineers (B) Sdn Bhd (“UEB”), has also been an

active player in Brunei or the last 20 years.

Post listing, our enhanced prole will allow us direct access to the

capital markets or a wider range o unding options. This will

enable the UEEC Group to be more ocused and actively pursue its

target growth initiatives.

Being a subsidiary o the UE Group, which has close to 100

years o history, we will leverage on its established branding and

business network across various countries to enhance our business

development activities. While we continue to collaborate with the

UE Group on property development projects, we will also work

with other developers in the market on a wider range o projects.

1 Calculated based on the pre-invitation share capital o 200,000,000 ordinary shares or bothnancial years or comparative purposes



n ip K Ce, Chairman (seated)

C hck t, Chie Execie Ocer

We ccellylced l plce 16Fey 2011d edeed e md spe

Ecesece tdLed 25Fey 2011.




1414

SINGAPORE AS PRIMARY MARKET WITH OVERSEAS ExPANSION

Going orward, our business mainstay will still be M&E engineering

and construction. With the UEEC Group’s epertise and long track

record in these two areas, we can provide customers with a more

integrated and innovative solution. We will also likely achieve better

cost control, delivery time, and higher and more reliable service

quality or development projects.

Singapore will remain our core market or business. We are positiveabout the Singapore construction industry this year. The Building

and Construction Authority projected Singapore’s total construction

demand at between $22 billion and $28 billion or 2011, which we

believe will give rise to a year o bustling activities.

We will eplore increasing our presence in overseas markets such

as Vietnam and China where they oer good growth potential or

some o our businesses. At the same time, we will also cautiously

seek business opportunities in the Middle East, especially in Abu

Dhabi and Qatar, or our M&E engineering business as we see a

strong demand or construction activities there.

As at 31 December 2010, our order book was about $632 million.

AustvIllE REsIDENCEs : A SUCCESSFUL BLUEPRINT FOR OURINTEGRATED SERVICES

In January 2011, the UEEC Group launched its rst eecutive

condominium (“EC”) project, Aie Reidence, located at

Sengkang East Avenue/Buangkok Drive. The 540-unit project

has sold more than 30% as at March 2011 although sales were

somewhat aected by the Government’s introduction o new

measures to curb property speculation during its launch.

Aie Reidence demonstrates the integrated capabilities o the

UEEC Group – which ranges rom land bidding, project nancing,architectural design, engineering and construction, project

management, property development, to sales and marketing.

The UEEC Group will continue to participate in the bidding o

land parcels or Design, Build and Sell Scheme (“DBSS”), EC and

private housing projects, and take a minority stake in any such

development projects provided we are appointed as the main

contractor.



GROWTH AREAS: POWER SOLUTIONS AND CLEAN TECHNOLOGY

While we continue to epand our eisting businesses, we will also

nurture new businesses or sustainable growth in uture.

We intend to increase our feet o power generators, load banks

and transormers under our power solution business in order to

epand our customer base in Singapore and overseas. This business

has consistently achieved strong growth in the last ew years,

serving the burgeoning MICE (meetings, incentives, conventions

and ehibitions) industry in Singapore, as well as other industries

such as ship repair, shipbuilding and mining.

We will also leverage on our M&E engineering business network

to embark on the eclusive distribution o a new range o air-

conditioners that employs a hybrid technology proven to be

more energy ecient than conventional inverter technology

air-conditioners. With the world rapidly progressing towards a

sustainable uture, we are developing our competitive edge in clean

technology-related engineering products and services to enhance

our position as a premier M&E engineering player in the region.

WORKPLACE SAFETY AND HEALTH ATTAINS NEW HEIGHTS

The UEEC Group recognises that workplace saety and health

is paramount in its business. Through continual reviews and

enorcements, our workplace saety and health standards have

improved considerably over the years. During the year, Greatearth

was OHSAS 18001 and bizSAFE STAR certied. Greatearth also

received a Saety and Health Award Recognition or Projects

(“SHARP”) award or the mied development at One-North.

Organised by the Singapore Ministry o Manpower, the SHARP

award recognises projects and worksites that have good workplace

saety and health perormance and occupational health and saety

management systems.

For the above worksite, Greatearth also attained close to 2.5

million accident-ree man-hours during the year, surpassing the

national benchmark o 1 million accident-ree man-hours set by

Workplace Saety and Health (“WSH”) Council or the 2010 WSH

Perormance Award.

ACKNOWLEDGEMENTS

We wish to take this opportunity to epress our sincere gratitude

to all our stakeholders, namely customers, employees, business

associates, sub-contractors, suppliers and bankers or their

support and contributions during the year. To thank shareholders

or the success o our IPO and their continuing support in the

years ahead, depending on the nancial perormance and the

cash requirements o the UEEC Group, we are working towards a

dividend payment or this current year.

We would also like to thank our ellow directors or their wise

counsel and support, and the management team and sta or

their hard work and dedication.

Thank you.

C hck tChie Execie Ocer

n ipChairman




Waer prinker pmp or re proecion yem in

he mixed deeopmen a One-Norh



M&E ENGINEERING

The UEEC Group’s principal mechanical and electrical (“M&E”)

engineering subsidiary, United Engineers (Singapore) Pte Ltd

(“UES”), provides a wide range o M&E engineering services,

including high and low-voltage electrical power distribution, air-

conditioning and mechanical ventilation systems as well as re

protection, alarm and sanitary systems.

During the year, UES commissioned the electrical power distributionand açade lighting works, and guestroom management system

or the Marina Bay sand integrated resort. It also continued M&E

engineering works at the UE Group’s mied development project at

One-North which is epected to be commissioned in April 2011.

A number o new projects were secured during the year, including

M&E engineering works or the UE Group’s mied development in

Changi Business Park, uE BizHb EAst , and the mied development

straddling 277 Orchard Road (the ormer speciai’ Cenre/Hoe

Phoenix site) and 218 Orchard Road (the ormer Orchard Emerad

site). It was also awarded additional electrical contracts by the Marina

Bay sand integrated resort or the sand sky Park restaurants, spa

and gymnasium. Together, these new contracts boosted the M&Eengineering division’s order book to more than $100 million.

Our M&E engineering subsidiary in Vietnam, United Engineers

(Vietnam) Limited, carried out M&E engineering works at Marbe

Monain Beach Reor in Danang. This project is scheduled or

commissioning in 2011.

We see a strong demand or sustainable products and services

and will thereore embark on the distribution o a new range

o air-conditioners that employs a hybrid technology proven to

be more energy ecient than conventional inverter technology

air-conditioners.

CONSTRUCTION

The UEEC Group’s principal construction subsidiary, Greatearth

Construction Pte Ltd (“Greatearth”), provides a wide range o

integrated construction services, including design and build, civil

works and general construction or residential, industrial, commercial

and institutional buildings as well as inrastructural works.

During the year, Greatearth successully completed the construction

o condominium projects, Paeron sie at Paterson Road and the

Rierine By the Park at Kallang Road.

For the above Singapore-based projects that were completed in

the year, Greatearth scored an average o 85 points (out o 100)in the Building and Construction Authority o Singapore-certied

CONQUAS score, a national quality yardstick or the Singapore

construction industry. For the recently-completed projects, the

Rierine By the Park and Paeron sie, Greatearth saw improved

CONQUAS score at 90.6 and 91.2 respectively.

rEviEW oFoPErations




Greatearth also made good progress at ongoing projects suchas the mied development project at One-North, o which the

condominium, the Rocheer , was constructed up to 38th storey2,

and the hotel, Park Aene Rocheer , 26th storey3. For Park

Cenra @ AMK , a Design, Build and Sell Scheme (“DBSS”)project at

Ang Mo Kio Street 52, the structural construction o all 30 storeys

o the our tower blocks was completed.

Greatearth also secured new construction contracts or uE BizHb

EAst and Aie Reidence.

The UEEC Group’s construction subsidiary in Brunei, UEB,

completed the construction o the multi-purpose hall and re

station or Sungai Liang Industrial Park Administration Hub, the

new American Embassy building at Jalan Kebangsaan, and the

Simulation Training Centre or the Royal Brunei Armed Forces at

Penanjong Garrison.

During the year, UEB secured new building contracts or 12 semi-

detached and 206 terrace house units at Lorong Tengah Seria and

126 terrace house units at Kampong Rataie, all under the National

Housing Scheme.

OTHERS

On the property development ront, the UEEC Group is currently

developing three projects – Park Cenra @ AMK at Ang Mo KioStreet 52, Acenia sky at Aleandra Road and Aie Reidence

at Sengkang East Avenue/Buangkok Drive. Park Cenra @

AMK , co-developed with United Engineers Developments Pte

Ltd (“UED”), is a DBSS project that is under construction and

is epected to obtain Temporary Occupation Permit (“TOP”) in

Q2 2011. Acenia sky , co-developed with UED and Winpride

Investment Pte Ltd, is a 373-unit condominium epected to obtain

TOP in 2013. Aie Reidence, co-developed with UED and

LMG Realty Pte Ltd, is a 540-unit EC that was launched in January

2011 and is epected to obtain TOP in 2013.

The UEEC Group’s subsidiary, UE-IBP Building Materials Pte Ltd, is

a supplier o imported fooring tiles mainly rom Italy, Spain andChina. During the year, it secured contracts to supply tiles to a

number o local building projects, including the integrated civic,

cultural, retail and entertainment hub at One-North developed

by CapitaLand Limited and Rock Productions Pte Ltd, and the

alteration and addition works in Rafes City.

The UEEC Group’s subsidiaries, UE-Tradetec (Singapore) Pte Ltd

(“UET”) and Anhui Anin Energy Co., Ltd. (“Anhui Anin”), are

total power solution specialists to industries that require emergency,

immediate and uninterrupted power supply. During the year, UET

provided power solutions or the National Day Parade, Singapore

2010 Youth Olympic Games, Singapore Grand Pri Formula 1

Night Race and the YTL Concert o Celebration 2010 in Singapore.

Anhui Anin provided power solutions or the World Eposition

2010 Shanghai, China (or the China Pavilion and Perorming Arts

Centre) and Asian Games in Guangzhou, China.

2 Top foor or the condominium tower3 Top foor or the hotel tower



the uEEC Grop ppie fooring ie or reidenia

and commercia projec




20

boarD oFDirECtors

1/ NORMAN IP KA CHEUNG

Independent Director and Non-Eecutive Chairman

Mr Norman Ip was appointed to our Board o Directors on 22 December2010. Mr Ip is the Chairman o the board o Malaysia Smelting Corporation

Berhad and also serves on the board o Australia Oriental Minerals NL. He is

an independent and non-eecutive director o WBL Corporation Limited and

is also a director o United Engineers Limited (“UEL”), Great Eastern Holdings

Limited, AIMS AMP Capital Industrial REIT Management Limited and a

member o the Building and Construction Authority. He retired in October

2009 as the President & Group CEO and Eecutive Director o The Straits

Trading Company Limited, which main activities are in real estate, mining

and hospitality.

Mr Ip graduated with a Bachelor o Science (Economics) degree rom the

London School o Economics and Political Science. He is a Fellow o both the

Institute o Chartered Accountants in England and Wales and the Institute o

Certied Public Accountants, Singapore.

2/ CHUA HOCK TONG

Eecutive Director and CEO

Mr Chua Hock Tong was appointed to our Board o Directors on 22

December 2010. Mr Chua is the ounder o Greatearth Construction and

has over 30 years o eperience in the construction industry. He held various

senior positions in the UE Group’s construction division and was last serving

as a Divisional Managing Director beore he became the CEO o UEEC.

He started out his career as a quantity surveyor and had worked in several

construction rms prior to setting up Greatearth Construction.

Mr Chua is a member o the Singapore Institute o Management, the

Singapore Institute o Surveyors and Valuers and was an associate o the

Australian Institute o Quantity Surveyors. He holds a diploma in Quantity

Surveying rom the Royal Melbourne Institute o Technology.

1 2 3 4 5 6



3/ KWAN CHIEW CHOI

Independent Director

Mr Kwan Chiew Choi was appointed to our Board o Directors on 22December 2010 and is also the chairman o our Nominating Committee. Mr

Kwan is currently an independent non-eecutive commissioner on the board

o commissioners o PT Bank OCBC NISP Tbk. He worked in Oversea-Chinese

Banking Corporation Limited (“OCBC Bank”) since 1987 and held various

positions beore becoming the head o Credit Control and Approval where

he was responsible or the credit risk management o OCBC Bank’s global

corporate and nancial institution portolio.

Mr Kwan has over 30 years o eperience in corporate banking beore he

retired in 2007. He graduated rom the University o Singapore (now known

as the National University o Singapore) with a Bachelor o Social Sciences

(Honours) degree.

4/ POK SOY YOONG

Independent DirectorMr Pok Soy Yoong was appointed to our Board o Directors on 22 December

2010 and is also the chairman o our Audit Committee. Mr Pok is currently

a non-eecutive director o Mapletree Logistics Trust Management Ltd.,

Pavilion Foundation Limited and the Inland Revenue Authority o Singapore.

He was the Head o Ta at Ernst & Young Solutions LLP when he retired rom

proessional practice on 31 December 2008. He also served as the Chie

Operating Ocer (Ta) o the Ernst & Young Far East Ta Practices, covering

15 countries.

Mr Pok’s ta career spanned 32 years in the areas o Singapore direct ta

and international ta. He was a non-eecutive director o Ernst & Young

Customs & International Trade Services Private Limited and Ernst & Young

Customs and International Trade Services (Far East) Limited. In addition,

he was a member on the board o the Ta Academy o Singapore. Having

passed the relevant eaminations, he was admitted to membership o boththe Chartered Institute o Taation, the United Kingdom, and the Association

o Certied Accountants, the United Kingdom. He relinquished these

memberships upon his retirement rom proessional practice at end 2008.

5/ TAN SOO KIANG

Independent DirectorMr Tan Soo Kiang was appointed to our Board o Directors on 22 December

2010 and also serves as the chairman o our Remuneration Committee.

Mr Tan is currently an independent director o Pertama Holdings Limited

and a consultant o Wee Swee Teow & Company, a rm o advocates and

solicitors, with more than 30 years o eperience in legal practice. His main

practice areas encompass general commercial and criminal litigation. He has

been with Wee Swee Teow & Company since 1992. Prior to that, he was

with the Singapore Legal Service.

Mr Tan was awarded the Public Service Medal (PBM) in 2007. He was

admitted to the Singapore Bar in 1977 and graduated rom the University

o Singapore (now known as the National University o Singapore) with a

Bachelor o Law (Honours) degree.

6/ JACKSON CHEVALIER YAP KIT SIONGNon-Eecutive Director

Mr Jackson Yap was appointed to our Board o Directors on 22 December

2010. Mr Yap is currently the Group Managing Director and CEO o UEL. He

joined UEL in 1997 as its Chie Operating Ocer and was appointed to his

current position in 2001. In his role as UEL’s CEO, he has overall responsibility

or leading the management team in implementing the strategic goals and

directions set by the board o UEL.

Prior to joining UEL, Mr Yap was with Eon Chemical Singapore as

Planning Manager. He also spent seven years with Shell Eastern Petroleum

undertaking a variety o jobs in process engineering, energy conservation

and quality control. He also sits on the board o Ape Healthcare Berhad

and United Wearnes Technology Pte Ltd. He graduated rom the University

o Auckland with a Bachelor o Engineering (Chemical and Materials)

(Honours) degree.




22

ComPanYmanagEmEnt

CHAN TUCK LEE

Deputy CEO

Mr Chan Tuck Lee was appointed as our UEEC Group’s deputy CEO on 23

December 2010. He joined the UE Group in 1991 as a project manager and

had since held various senior positions in the engineering department beore

his last position as divisional managing director. Mr Chan had also worked in

several property development, contracting and consultancy rms in Malaysia,

Indonesia and Singapore prior to joining the UE Group.

He is currently a council member o the Singapore Electrical Contractors and

Licensed Electrical Workers Association and the Singapore Green Building

Council (Electrical Taskorce). Mr Chan holds a Bachelor o Science (Honours)

degree in Electronic and Electrical Engineering rom the Loughborough

University o Technology, England. He is also a registered Proessional

Engineer in Singapore and Malaysia since 1995 and 1984 respectively, and

is a licensed electrical worker (Engineer Grade) registered with the Energy

Market Authority o Singapore.

POON WAI GAH

Financial Controller

Ms Poon Wai Gah was appointed as our UEEC Group’s Financial Controller

on 23 December 2010. She has more than 26 years o eperience in the area

o nance and accounting. She joined the UE Group in 1989 as a nance

manager and had since held various positions in the nance department

beore her last position as vice president o nance group accounting.

Ms Poon had also worked in an international audit rm and a bank inits accounts department prior to joining the UE Group. Ms Poon holds a

Bachelor o Accountancy degree rom the National University o Singapore

and is a member o the Institute o Certied Public Accountants o Singapore.

TAN KAY YAN

General Manager, Strategy and Risk

Mr Tan Kay Yan was appointed as our UEEC Group’s General Manager,

Strategy and Risk on 23 December 2010. He joined the UE Group in 2004 as

a strategy deployment manager and had since held various positions beore

his last position as general manager o the corporate planning department.

Prior to joining the UE Group, Mr Tan had been working in companies in

the telecommunication and property sectors. Mr Tan graduated rom the

National University o Singapore with a Bachelor o Engineering (Electrical)

(Honours) degree and holds an Eecutive Master o Business Administration

rom the Helsinki School o Economics.

LEE SENG POH

Divisional General Manager, Construction, Equipment and Materials

Mr Lee Seng Poh was appointed as our UEEC Group’s Divisional General

Manager, Construction, Equipment and Materials on 23 December 2010.

He joined the UE Group in 1989 as a project manager and had since held

various positions beore his last position as general manager o UEB. Prior

to joining the UE Group, he had been working in various construction

companies. Mr Lee graduated rom the Royal Melbourne Institute o

Technology with a Bachelor o Civil Engineering degree.

TAI CHEE YICK

General Manager, M&E Engineering

Mr Tai Chee Yick was appointed as our UEEC Group’s General Manager,

M&E Engineering on 23 December 2010. He joined the UE Group in1990 as a project manager and had since held various positions beore

his last position as general manager o UES Holdings Pte Ltd. He has

design eperience in consultancy services involving projects in countries

including Australia, China and Indonesia beore joining the UE Group. Mr

Tai graduated rom the National University o Singapore with a Bachelor

o Engineering (Mechanical) degree. He is also a registered Proessional

Engineer in Singapore since 1986.



CORPORATE GOVERNANCE

The Company is committed to a high standard o corporate governance to ensure eective sel-regulation practices are in place to enhancecorporate perormance and accountability.

This report outlines the Company’s main corporate governance practices with reerences to the principles o the Code o Corporate

Governance (“the Code”). The Code orms part o the Continuing Listing Obligations o the Singapore Exchange Securities Trading Limited

(“SGX-ST”)’s Listing Manual.

ThE BOARd’s CONduCT O iTs AAiRs

Principle 1: Every company should be headed by an eective Board to lead and control the company. The Board is collectively

responsible or the success o the company. The Board works with Management to achieve this and the Management remains

accountable to the Board.

The Board has six members comprising one Executive Director, one Non-Executive Director and our Non-Executive and Independent Directors.

The Board comprises the ollowing members:

Name o drector Poton n Boar Appontment

Norman Ip Ka Cheung Chairman Independent Chairman

Chua Hock Tong Member Executive Director and Chie Executive Ocer

Kwan Chiew Choi Member Independent Director

Pok Soy Yoong Member Independent Director

Tan Soo Kiang Member Independent Director

Jackson Chevalier Yap Kit Siong Member Non-Executive Director

The Company’s Articles o Association permit Directors to attend meetings through the use o audio-visual communication equipment.

In between Board meetings, important matters concerning the Company are also put to the Board or its decision by way o circulating

resolutions in writing or the Directors’ approval together with supporting memoranda to enable the Directors to make inormed decisions.

In 2010, the Board held several meetings to deliberate on issues relating to the Company’s listing application. The Company was ormally

admitted to the Ocial List o the SGX-ST on 25 February 2011. As o 28 February 2011, the Directors held the ollowing meetings and their

attendance are as indicated:

Tpe o Meetng

Boar o

drector’

Meetng

At

Commttee

Remneraton

Commttee

Nomnatng

Commttee

Norman Ip Ka Cheung 1 1* 1 1

Chua Hock Tong 1 1* 1* 1*

Kwan Chiew Choi 1 1 1* 1

Pok Soy Yoong 1 1 1* 1

Tan Soo Kiang 1 1 1 1*

Jackson Chevalier Yap Kit Siong 1 1* 1 1*

* attendance by invitation

The prole o each Director and other relevant inormation as at the date o this report are set out on Pages 20 to 21 o the Annual Report.



uE E&C Lt. / Annual Report 2010

24


The Board oversees the business aairs o the Group, sets strategic directions and approves budgets and reviews the Group’s perormance.In addition to its statutory duties, the Board’s principal unctions are:

(i) supervising the overall management o the business and aairs o the Group and approving the Group’s corporate and strategic

policies and direction;

(ii) ormulating and approving nancial objectives o the Group and monitoring its perormance such as reviewing and approving o

results announcements and approving o annual nancial statements;

(iii) overseeing the processes or evaluating the adequacy o internal controls and risk management including the review and approval o

interested person transactions;

(iv) assuming responsibility or corporate governance and compliance with the Companies Act, Cap. 50, and the rules and regulations o

the relevant regulatory bodies;

(v) evaluating perormance o Management; and

(vi) ensuring the necessary nancial and human capital resources are available or the Group to meet its objectives.

Matters that are specically reserved or the approval o the Board include, among others, any material acquisitions and disposals o assets,

corporate or nancial restructuring, proposing o dividends, annual budgets, signicant legal and nancial issues, announceable matters,

interested person transactions, appointment and resignation o directors and key management sta and other matters as may be considered

by the Board rom time to time.

The Board has adopted a set o internal guidelines on the matters requiring Board approval. Certain unctions have also been delegated to

various Board committees, namely, the Audit Committee, the Remuneration Committee and the Nominating Committee.

Changes to regulations and accounting standards are monitored closely by Management. To keep pace with regulatory changes, where these

changes have an important bearing on the Company’s or Director’s disclosure obligations, Directors are brieed either during Board meetings

or at specially-convened sessions conducted by proessionals. The Group conducts a comprehensive orientation program or newly appointed

Directors to amiliarize themselves with its business activities, strategic directions, policies and corporate governance practices.

In order to ensure that the Board is able to ulll its responsibilities, prior to the Board meetings, the Management provides the memberso the Board with management accounts, as well as relevant background inormation and documents relating to items o business to be

discussed at a Board meeting beore the scheduled meeting.

The Directors are also regularly brieed on the business activities o the Group.

The Board has separate and independent access to the Company Secretaries at all times and one o the Company Secretaries attend all Board

and Committee meetings and are responsible or ensuring that Board procedures are ollowed. The Board also has access to independent

proessional advice, where necessary, at the Company’s expense.

BOARd COMPOsiTiON ANd GuidANCE

Principle 2: There should be a strong and independent element on the Board, which is able to exercise objective judgement on

corporate aairs independently, in particular, rom Management. No individual or small group o individuals should be allowed

to dominate the Board’s decision making.

The Board comprises six members o whom one is Executive Director, one is Non-Executive Director and our are Non-Executive and

Independent Directors. Independent Directors comprise more than one third o the Board members.

There is strong and independent element on the Board. The Board is able to exercise objective judgement independently rom Management

and no individual or small group o individuals dominate the decisions o the Board.

The Nominating Committee is o the view that the current Board size o six Directors is appropriate taking into account the nature and scope

o the Group’s operations, the core competency and a broad range o industry knowledge and the business experience o the Directors to

govern and contribute to the eectiveness and success o the Group.



ChAiRMAN ANd ChiE ExECuTiVE OiCER

Principle 3: There should be a clear division o responsibilities at the top o the company – the working o the Board and the

executive responsibility o the company’s business – which will ensure a balance o power and authority, such that no one

individual represents a considerable concentration o power.

The Company has a separate Chairman and Chie Executive Ocer who are not related. There is a clear segregation o the roles and

responsibilities between the Chairman and the Chie Executive Ocer.

The Chairman is independent and non-executive in nature, and relates to the workings o the Board as a whole. In particular, he ocuses on:

(i) leading the Board to ensure its eectiveness on all aspects o its role and setting its agenda;

(ii) ensuring that the Directors receive accurate, timely and clear inormation;

(iii) ensuring eective communication with shareholders;

(iv) encouraging constructive relations among Board members and their interaction with Management;

(v) acilitating the eective contribution o non-executive director; and

(vi) promoting high standards o corporate governance.

The Chie Executive Ocer is Mr Chua Hock Tong, the most senior executive in the Company who bears executive responsibility or the

management o the Company and the Group. He is also responsible or the running o the Group’s business and has the ull executive

responsibilities over the business directions and operational decisions o the Group.

BOARd MEMBERshiP ANd BOARd PERORMANCE

Principle 4: There should be a ormal and transparent process or the appointment o new directors to the Board.

Principle 5: There should be a ormal assessment o the eectiveness o the Board as a whole and the contribution by each

director to the eectiveness o the Board.

The Nominating Committee comprises the ollowing Directors:

Kwan Chiew Choi - Chairman

Norman Ip Ka Cheung - Member

Pok Soy Yoong - Member

All members o this committee are Independent and Non-Executive Directors.

The Nominating Committee’s written key terms o reerence describe its responsibilities, and these include:

(i) reviewing and assessing candidates or directorships (including executive directorships) beore nominating such candidates or the

approval o our Board o Directors;

(ii) reviewing and recommending to our Board o Directors the re-election o any Directors under the retirement provisions in accordance

with our Articles o Association at each annual general meeting;

(iii) reviewing the composition o our Board o Directors annually to ensure that our Board o Directors has an appropriate balance o

Independent Directors and ensuring an appropriate balance o expertise, skills, attributes and abilities among our Directors;

(iv) reviewing and determining annually i a Director is independent, in accordance with the Code and any other salient actors; and

(v) where a Director has multiple board representations, deciding whether the Director is able to and has been adequately carrying out his

duties as Director.

The Directors submit themselves or re-nomination and re-election at regular intervals o at least once every three years. Pursuant to Article

91 o the Company’s Articles o Association, one third o the Board Directors are to retire rom oce by rotation and be subject to re-election

at the Annual General Meeting (“AGM”) o the Company. In addition, Article 97 o the Company’s Articles o Association, requires a newly

appointed director to submit himsel or retirement and re-election at the AGM immediately ollowing his appointment. Thereater, he is

subject to retirement by rotation once every three years.

The Nominating Committee has recommended Mr Norman Ip Ka Cheung, Mr Chua Hock Tong, Mr Kwan Chiew Choi, Mr Pok Soy Yoong, Mr

Tan Soo Kiang and Mr Jackson Chevalier Yap Kit Siong, who are retiring at the orthcoming Annual General Meeting, to be re-elected. All the

directors are retiring under Article 97 o the Company’s Articles o Association. The retiring directors have oered themselves or re-election.

The Board has accepted the recommendations o the Nominating Committee.





26


The dates o initial appointment o each Director are set out as ollows:

Name o drector Poton n Boar Appontment date o Appontment

Norman Ip Ka Cheung Chairman Independent Chairman 22 December 2010

Chua Hock Tong Member Executive Director and Chie

Executive Ocer

22 December 2010

Kwan Chiew Choi Member Independent Director 22 December 2010

Pok Soy Yoong Member Independent Director 22 December 2010

Tan Soo Kiang Member Independent Director 22 December 2010

Jackson Chevalier Yap Kit Siong Member Non-Executive Director 22 December 2010

The Board, through the delegation o its authority to the Nominating Committee has made its best eorts to ensure each director possess the

experience, knowledge and skills critical to the Group’s business. This is necessary to enable the Board to make sound and well-considered

decisions. The Nominating Committee, in considering the nominating o any director or re-election, will evaluate the perormance o theDirector involved.

The Nominating Committee will ormally evaluate the eectiveness o the Board rom the year 2011. The ormal evaluation will take into

consideration the complementary nature o the contribution o each director and the collective nature o the contribution o the Board as a

whole.

The Nominating Committee is o the view that whilst it is important or directors to devote sucient time and attention to the aairs o the

Group, the issue relating to multiple board representations should be let to the judgment and discretion o each director.

The Nominating Committee believes that contributions rom each director can be refected in other ways other than the reporting o

attendances o each director at Board and Committee Meetings as well as the requency o such Meetings. A director would have been

appointed on the strength o his experience and his potential to contribute to the proper guidance o the Group and its business. To ocus

on a director’s attendance at ormal Meetings alone may lead to a narrow view o a director’s contribution. It may also not do justice to his

contributions, which can be in many orms, including Management’s access to him or guidance or exchange o views outside the ormalenvironment o the Board.

The Nominating Committee is o the opinion that the Directors, who have been classied as independent under the Board Composition

section, are indeed independent and the current size o the Board is adequate or the purposes o the Group.

The search and nomination process or new directors, i any, will be through search companies, contacts and recommendations that go

through the normal selection process, to cast its net as wide as possible or the right candidates.

New directors are appointed ater the Nominating Committee has reviewed and nominated them or appointment. Such new directors

submit themselves or re-election at the next AGM o the Company.

ACCEss TO iNORMATiON

Principle 6: In order to ulfl their responsibilities, Board members should be provided with complete, adequate and timely

inormation prior to board meetings and on an on-going basis.

All Directors receive a set o Board papers that include explanatory inormation relating to matters to be brought beore the Board, copies

o disclosure notes and internal group nancial statements prior to Board meetings. This is generally sent to them at least three days prior to

Board meetings. This is to allow sucient time or the Board members to obtain urther explanations, where necessary, to be properly brieed

and adequately prepare or Board meetings.

In addition, Directors receive the management accounts o the Company and have unrestricted access to the records and inormation o

the Company. The Non-executive and Independent Directors have access to senior executives in the Company and other employees to seek

additional inormation i required. To acilitate such access, the contact particulars o the senior management and secretaries o the Company

have been provided to the Directors. The Directors whether collectively or individually may, at the Company’s expense, seek and obtain

independent proessional advice when necessary to discharge their duties eectively.

The Company Secretaries have the responsibility to ensure that Board procedures are ollowed and that all applicable rules and regulations are

complied with. One or both o the Company Secretaries are in attendance at meetings o the Board and Sub-Committees. The appointment

and removal o the Company Secretary should be a matter or the Board as a whole.



PROCEduREs OR dEVELOPiNG REMuNERATiON POLiCiEs, LEVEL ANd Mix O REMuNERATiON ANd disCLOsuRE OREMuNERATiON

Principle 7: There should be a ormal and transparent procedure or developing policy on executive remuneration and or fxing

the remuneration packages o individual directors. No director should be involved in deciding his own remuneration.

Principle 8: The level o remuneration should be appropriate to attract, retain and motivate the directors needed to run the

company successully but companies should avoid paying more than is necessary or this purpose. A signifcant proportion o executive directors’ remuneration should be structured so as to link rewards to corporate and individual perormance.

Principle 9: Each company should provide clear disclosure o its remuneration policy, level and mix o remuneration, and the

procedure or setting remuneration in the company’s annual report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to directors and key executives, and perormance.

The Remuneration Committee comprises the ollowing Directors:

Tan Soo Kiang - Chairman

Norman Ip Ka Cheung - MemberJackson Chavelier Yap Kit Siong - Member

Mr Tan Soo Kiang and Mr Norman Ip Ka Cheung are Independent Directors. Mr Jackson Chavelier Yap Kit Siong is a Non-Executive Director.

The Remuneration Committee’s written key terms o reerence describe its responsibilities, and these include:

(i) recommending to the Board o Directors, in consultation with the Chairman o the Board o Directors, or endorsement, a comprehensiveremuneration policy ramework and guidelines or remuneration o the Directors and key executives;

(ii) recommending specic remuneration packages or each o the Directors and the Chie Executive Ocer;(iii) in the case o service agreements, considering what compensation commitments the Directors’ or key executives’ contracts o service,

i any, would entail in the event o early termination with a view to be air and avoid rewarding poor perormance and to recognise theduty to mitigate loss;

(iv) approving perormance targets or assessing the perormance o each o the key managerial personnel and recommending suchtargets as well as employee specic remuneration packages or each o such key managerial personnel, or endorsement by the Board

o Directors; and(v) administering the Share Options Schemes o the Company, i any.

Although the recommendations are made in consultation with Management, the remuneration packages are ultimately approved by the

Board. No Director is involved in deciding his own remuneration.

The Company adopts a remuneration policy or employees comprising a xed component and a variable component. The xed component

is in the orm o a base salary. The variable component is in the orm o a variable bonus that is linked to the perormance o the Companyand the individual.

Directors’ ees are set in accordance with the remuneration ramework comprising basic ees and committee ees. These are subject to the

approval o the shareholders at the orthcoming AGM.

The ollowing table shows the constitution (in percentage terms) o the remuneration o Directors, during the nancial year 2010, in bands

o $250,000.

Remneraton Ban an Name o drector

salar

%

Bon/Proft

sarng

%

Oter Beneft

%

ee*

%

Total

%$500,000 an aboveChua Hock Tong 53 37 10 - 100

Belo $250,000Norman Ip Ka Cheung - - - 100 100Kwan Chiew Choi - - - 100 100

Pok Soy Yoong - - - 100 100Tan Soo Kiang - - - 100 100Jackson Chavelier Yap Kit Siong - - - 100 100

* In recognition of the Directors’ time spent towards the Company’s preparation for its listing on the SGX-ST, a sum of S$15,000 has been recommended for approval at

the AGM.





28


In the interest o maintaining good morale and a strong spirit o teamwork within the Group, the disclosure relating to the top 5 keyexecutives (who are not Directors) o the Group have been made within bands o $250,000. Their proles are ound on Page 22.

Remneraton Ban No. o Eectve

$250,001 - $500,000 3

Below $250,000 2

There are no employees o the Group who are immediate amily members o a director or a substantial shareholder.

The Company does not have a share option scheme.

ACCOuNTABiLiTy

Principle 10: The Board should present a balanced and understandable assessment o the company’s perormance, position and

prospects.

The Board, through its announcements o the Group nancial results to shareholders, aims to present a balanced and understandable

assessment o the Group’s position and prospects.

In preparing the nancial statements, the Directors have:

(i) selected suitable accounting policies and applied them consistently;

(ii) made judgments and estimates that are reasonable and prudent;

(iii) ensured that all applicable accounting standards have been ollowed; and

(iv) prepared nancial statements on the basis that the directors have reasonable expectations, having made enquires, that the Group and

Company have adequate resources to continue operations or the oreseeable uture.

AudiT COMMiTTEE ANd iNTERNAL CONTROLs

Principle 11: The Board should establish an Audit Committee with written terms o reerence which clearly set out its authority

and duties.

Principle 12: The Board should ensure that the Management maintains a sound system o internal controls to saeguard the

shareholders’ investments and the company’s assets.

The Audit Committee comprises the ollowing Directors:

Pok Soy Yoong - Chairman

Kwan Chiew Choi - Member

Tan Soo Kiang - Member

All members o this committee are Independent and Non-Executive Directors.

The role o the Audit Committee is to assist the Board o Directors in overseeing the adequacy o the overall internal control unctions, the

internal audit unctions within the Group, the relationship o those unctions to external audit, the scope o audit by the external auditor and

their independence as well as corporate and nancial risk management. The Audit Committee’s written key terms o reerence describe its

responsibilities, and these include:

(i) assisting our Board o Directors in discharging its statutory responsibilities on nancing and accounting matters;

(ii) reviewing signicant nancial reporting issues and judgments to ensure the integrity o the nancial statements and any ormal

announcements relating to nancial perormance;

(iii) reviewing the scope and results o the audit and its cost eectiveness, and the independence and objectivity o the external auditors;

(iv) reviewing and evaluating with internal and external auditors, the adequacy and eectiveness o the system o internal controls,

including nancial, operational and compliance controls, and risk management policies and ramework;

(v) reviewing any interested person transactions as dened in the Listing Manual;(vi) appraising and reporting to the Board o Directors on the audits undertaken by the external auditors and internal auditors, the

adequacy o disclosure o inormation, and the appropriateness and quality o the system o management and internal controls;



(vii) making recommendations to the Board o Directors on the appointment, re-appointment and removal o the external auditors andinternal auditors, and approving the remuneration and terms o engagement o the external auditors and internal auditors;

(viii) reviewing any actual or potential conficts o interest that may involve our Directors as disclosed by them to our Board and exercising

directors’ duciary duties in this respect;

(ix) reviewing on a periodic basis the ramework and processes established or the implementation o the terms o the Non-Competition

Deed with United Engineers Limited group o companies (“UE Group”) in order to ensure that such ramework and processes remain

appropriate; and

(x) reviewing Whistle-Blowing investigations within the Group and ensuring appropriate ollow-up action, i required.

The Audit Committee has been given ull access and obtained the co-operation o the Management o the Company. The Audit Committee

has the explicit authority to investigate any matter within its terms o reerence. It also has ull access to and co-operation by Management

and ull discretion to invite any Director or executive ocer to attend its meetings, and reasonable resources to enable it to discharge its

unctions properly.

The Audit Committee has met with the external auditors without the presence o the management. The Audit Committee also met with the

external auditors to discuss the results o their examinations and their evaluation o the systems o internal accounting controls.

The Audit Committee has reviewed the amount o non-audit ees paid to the external auditors and is o the view that the independence o

the external auditors has not been compromised.

The Audit Committee has recommended to the Board the re-appointment o Ernst & Young LLP or the year ending 31 December 2011.

The Audit Committee has also put in place a whistle blowing policy which provides well-dened and accessible channels in the Group

through which employees may raise concerns in the event that they encounter any improper conduct within the Group.

iNTERNAL AudiT

Principle 13: The Company should establish an internal audit unction that is independent o the activities it audits.

The Board is cognizant o its responsibility or maintaining a sound system o internal controls to saeguard the investment o its shareholders

and the assets and business o the Group. The appointed external auditors o the Company carry out, in the course o their statutory audit,

an annual review o the eectiveness o the material internal controls o the Company to the extent o their scope as laid out in their audit

plan. Material non-compliance and internal control weaknesses noted during their audit, and the recommendations o the external auditors,

are reported to the Audit Committee. For FY2010, the Board is o the view that based on the reports rom the external auditors, the system

o internal controls that has been maintained by the Management o the Company throughout the nancial year was adequate to meet the

needs o the Company.

The Company intends to outsource the internal audit unction o the Group and will appoint internal auditors in respect o FY2011.

COMMuNiCATiON wiTh shAREhOLdERs ANd shAREhOLdER PARTiCiPATiON

Principle 14: Companies should engage in regular, eective and air communication with shareholders.

Principle 15: Companies should encourage greater shareholder participation at AGMs, and allow shareholders the opportunity

to communicate their views on various matters aecting the company.

The Company does not practise selective disclosure. Price sensitive inormation is always released on SGXNET ater trading hours. Results and

annual reports are announced or issued within the mandatory periods.

Shareholders are encouraged to attend the AGM to ensure a greater level o shareholder participation and or them to be kept up to date

as to the strategies and goals o the Group. All shareholders o the Company receive a copy o the Annual Report, the Notice o AGM and

circulars and notices pertaining to any Extraordinary General Meetings o the Company. To acilitate participation by the shareholders, the

Articles o the Company allow the shareholders to attend and vote at general meetings o the Company by proxies. Separate resolutions on

each distinct issue are requisite.

At the AGM, the external auditors as well as the Directors are in attendance to answer queries rom shareholders. Shareholders are given

the opportunity at general meetings o the Company to air their views and query the Directors and Management on matters relating to the

Group and its operations.





30


dEALiNGs iN sECuRiTiEs

The Company has adopted an internal code which prohibits dealings in the securities o the Company by directors and ocers while in

possession o price-sensitive inormation. The Directors and ocers are prohibited rom dealing in the securities o the Company during

the period beginning one month beore the announcement o the quarterly and annual results respectively, and ending on the date o the

announcement. In addition, ocers are expected to observe insider trading laws at all times even when dealing in securities within the

permitted trading period.

disCLOsuRE O MATERiAL CONTRACTs

There was no material contract entered into by the Company or any o its subsidiaries involving the interests o any Directors.

iNTEREsTEd PERsON TRANsACTiONs

The Company has set out procedures governing all interested person transactions to ensure that they are carried out on an arm’s length basis,

on normal commercial terms and will not be prejudicial to the interests o the Company and its shareholders.

Disclosure according to the Rule 907 o the SGX-ST Listing Manual in respect o interested person transactions or FY2010 is stated in the

ollowing table:

Name o interete Peron

Aggregate vale o all nterete

peron tranacton rng te

fnancal ear ner reve

(eclng tranacton le

tan s$100,000 an tranacton

concte ner areoler’

manate prant to Rle 920 o

te sGx Ltng Manal)

Aggregate vale o all nterete

peron tranacton concte

ner te areoler’ manate

prant to Rle 920 o te Ltng

Manal (eclng tranacton le

tan s$100,000)United Engineers Limited Group

(A) Contract Value 1 - 689,400,000

(B) Revenue 1 - 228,683,000

(C) Interest income - 3,106,000

(D) Finance costs - 197,000

(E) Management ees and consultancy services expenses - 1,567,000

(F) Purchases - 1,077,000

1 Revenue forms part of the Contract Value

usE O iPO PROCEEds

The Company reers to the net IPO proceeds o approximately $28.7 million raised rom the initial public oering o its shares on 25 February2011.

As at the date o this report, the Company has not utilised any proceeds. The Company will provide periodic updates on the use o the IPO

proceeds through SGXNET.



Financial StatementSDirectors’ report 32

Statement by directors 35

Independent auditors’ report 36

Consolidated income statement 37

Consolidated statement o comprehensive income 38

Statements o nancial position 39

Statements o changes in equity 40

Consolidated statement o cash fows 43

Notes to the nancial statements 45

Statistics o Shareholding 94

Substantial Shareholders 95Notice o Annual General Meeting 96

Proxy Form 99



The directors are pleased to present their report to the members together with the audited consolidated nancial statements o UE E&C Ltd.(the “Company”) and its subsidiaries (collectively, the “Group”) and the statement o nancial position and statement o changes in equity o

the Company or the nancial year ended 31 December 2010.

DiRectORS

The directors o the Company in oce at the date o this report are as ollows:

Norman Ip Ka Cheung (Chairman) (Appointed on 22 December 2010)

Chua Hock Tong (Executive Director and Chie Executive Ocer)

(Appointed on 22 December 2010)

Kwan Chiew Choi (Appointed on 22 December 2010)

Pok Soy Yoong (Appointed on 22 December 2010)

Tan Soo Kiang (Appointed on 22 December 2010)

Jackson Chevalier Yap Kit Siong (Appointed on 22 December 2010)

aRRanGementS tO enaBle DiRectORS tO acQUiRe SHaReS anD DeBentUReS

Neither at the end o nor at any time during the nancial year was the Company a party to any arrangement whose objects are, or one o

whose objects is, to enable the directors o the Company to acquire benets by means o the acquisition o shares or debentures o the

Company or any other body corporate.

DiRectORS’ inteReStS in SHaReS anD DeBentUReS

The directors, who held oce at the end o the nancial year, had, according to the register o directors’ shareholdings required to be kept

under Section 164 o the Singapore Companies Act, Cap. 50, an interest in the share capital o the Company and related companies as ollows:

Dr rs Dd rs1 Jury 1 Jury

2010 or 31 2010 or 31

d o Dbr d o Dbr

ppo 2010 ppo 2010

irs h copy

Ordinary Shares

Chua Hock Tong – 23,791,311 – –

irs U Hodg copy:

Ud egrs ld

Ordinary Stock Units

Chua Hock Tong 143,333 143,333 – –

Jackson Chevalier Yap Kit Siong 393,000 393,000 – –

Unissued Ordinary Shares under Option

Jackson Chevalier Yap Kit Siong 827,000 827,000 – –

Convertible Bonds

Chua Hock Tong 1,340 1,340 – –

Unissued Ordinary Shares underlying the Convertible Bonds

Chua Hock Tong 1,000 1,000 – –

DiRectORS’ RePORt



Dr rs Dd rs1 Jury 1 Jury

2010 or 31 2010 or 31d o Dbr d o Dbr

ppo 2010 ppo 2010

irs Subsdry:

Grrh Hodg P ld

Ordinary SharesChua Hock Tong 149,999 – – –

There was no change in any o the above-mentioned interests between the end o the nancial year and 21 January 2011.

Except as disclosed in this report, no director who held oce at the end o the nancial year had interests in the share capital o the Company

or o its related companies, either at the beginning o the nancial year or date o appointment, i later, or at the end o the nancial year.

DiRectORS’ cOntRactUal BeneFitS

Except as disclosed in the nancial statements, since the end o the previous nancial period, no director o the Company has received or

become entitled to receive a benet by reason o a contract made by the Company or a related corporation with the director, or with a rmo which the director is member, or with a company in which the director has a substantial nancial interest except that certain directors have

employment relationships with related corporations o the holding company and received remuneration in those capacity and those disclosedin the notes to the nancial statements.

SHaRe OPtiOnS

During the nancial year, there were:

(i) no options granted by the Company to any person to take up unissued shares in the Company; and(ii) no shares issued by virtue o any exercise o options to take up unissued shares o the Company.

As at the end o the nancial year, there were no unissued shares o the Company under option.

aUDit cOmmittee

The Audit Committee comprises the ollowing Directors:

Pok Soy Yoong – ChairmanKwan Chiew Choi – Member

Tan Soo Kiang – Member

The Audit Committee convened its rst meeting on 28 February 2011 with ull attendance rom all members.

The Audit Committee carried out its unctions in accordance with Section 201B(5) o the Singapore Companies Act, Cap. 50. The Audit

Committee reviewed the Company’s accounting policies and internal controls on behal o the Board o Directors and perormed the unctionsspecied in the Singapore Companies Act and Singapore Exchange Listing Manual. In perorming its unctions, the Committee reviewed the

overall scope o the external audit. It met with the Company’s external auditors to discuss the results o their examinations and their evaluationo the Company’s system o internal accounting controls.

The Audit Committee also reviewed the nancial statements o the Company and the consolidated nancial statements o the Group as well

as the auditors’ report thereon.

The Audit Committee nominates Ernst & Young LLP as auditors o the Company or the nancial year ending 31 December 2011 to be

approved and appointed by the Company at the orthcoming Annual General Meeting.

Further details regarding the Audit Committee are disclosed in the Report on Corporate Governance o the Company’s Annual Report or the

nancial year ended 31 December 2010.

DiRectORS’ RePORt



aUDitORS

Ernst & Young LLP have expressed their willingness to accept re-appointment as auditors.

On behal o the board o directors,

nORman iP Ka cHeUnG cHUa HOcK tOnG

Director Director

18 March 2011

Singapore

DiRectORS’ RePORt



We, NORMAN IP KA CHEUNG and CHUA HOCK TONG, being two o the directors o UE E&C LTD., do hereby state that, in the opinion othe directors,

(i) the accompanying statements o nancial position, consolidated income statement, consolidated statement o comprehensive income,

statements o changes in equity and consolidated statement o cash fows together with notes thereto are drawn up so as to give a true

and air view o the state o aairs o the Group and o the Company as at 31 December 2010 and the results o the business, changes

in equity and cash fows o the Group and the changes in equity o the Company or the nancial year ended on that date, and

(ii) at the date o this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they

all due.

On behal o the board o directors,

nORman iP Ka cHeUnG cHUa HOcK tOnG

Director Director

18 March 2011

Singapore

Statement BY DiRectORS



To the members of UE E&C Ltd.

Rpor o h ss

We have audited the accompanying nancial statements o UE E&C Ltd. (ormerly known as Ljubica Limited) (the “Company”) and its

subsidiaries (collectively, the “Group”) which comprise the statement o nancial position o the Group and the Company as at 31 December

2010, the statements o changes in equity o the Group and Company and the consolidated income statement, consolidated statement o

comprehensive income, and consolidated statement o cash fows o the Group or nancial year ended 31 December 2010, and a summary

o signicant accounting policies and other explanatory notes.

mg’s rsposby or h ss

Management is responsible or the preparation o nancial statements that give a true and air view in accordance with the provisions o the

Singapore Companies Act, Cap. 50 (the “Act”) and Singapore Financial Reporting Standards, and or devising and maintaining a system o

internal accounting controls sucient to provide a reasonable assurance that assets are saeguarded against loss rom unauthorised use or

disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation o true and air prot

and loss accounts and balance sheets and to maintain accountability o assets.

audors’ rsposby

Our responsibility is to express an opinion on these nancial statements based on our audit. We conducted our audit in accordance with

Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perorm the audit to obtain

reasonable assurance about whether the nancial statements are ree rom material misstatement.

An audit involves perorming procedures to obtain audit evidence about the amounts and disclosures in the nancial statements. The procedures

selected depend on the auditor’s judgment, including the assessment o the risks o material misstatement o the nancial statements,

whether due to raud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation

o the nancial statements that give a true and air view in order to design audit procedures that are appropriate in the circumstances,but not or the purpose o expressing an opinion on the eectiveness o the entity’s internal control. An audit also includes evaluating the

appropriateness o accounting policies used and the reasonableness o accounting estimates made by management, as well as evaluating the

overall presentation o the nancial statements.

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

Opo

In our opinion, the consolidated nancial statements o the Group and statement o nancial position and statement o changes in equity o

the Company are properly drawn up in accordance with the provisions o the Act and Singapore Financial Reporting Standards so as to give

a true and air view o the state o aairs o the Group and o the Company as at 31 December 2010 and the results, changes in equity and

cash fows o the Group and the changes in equity o the Company or the year ended on that date.

Rpor o ohr g d rguory rqurs

In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in

Singapore o which we are the auditors have been properly kept in accordance with the provisions o the Act.

ers & Youg llP

Public Accountants and

Certied Public Accountants

Singapore

18 March 2011

inDePenDent aUDitORS' RePORtFor h yr dd 31 Dbr 2010



(In Singapore dollars)GROUP

Note 2010 2009

$000 $000

Rvu 5 381,853 394,801

Cost o sales (314,310) (349,007)

Gross pro 67,543 45,794

Ohr s o o

Interest income 6 3,147 2,276

Other income 7 2,771 7,367

Ohr s o xps

Distribution expenses (6,932) (5,770)

Administrative expenses (10,800) (9,326)

Finance costs 8 (1,428) (2,076)

Other expenses (5,898) (5,943)

Share o results o associates 6,557 2,795

Pro bor x 9 54,960 35,117

Income tax expense 10 (9,923) (4,079)

Pro o x 45,037 31,038

Pro rbub o:

Owners o the parent 39,785 29,023

Non-controlling interests 5,252 2,015

45,037 31,038

ergs pr ordry shr rbub o owrs

o h pr (s pr shr)

Bs d dud 11 19.9 14.5

cOnSOliDateD incOme StatementFor h yr dd 31 Dbr 2010

The accompanying accounting policies and explanatory notes orm an integral part o the nancial statements.




2010 2009

$000 $000

Pro o x 45,037 31,038

Ohr oprhsv o:

Net eect o exchange dierences arising rom translation

o nancial statements o oreign operations 68 (93)

Share o other comprehensive income o associates 78 (109)

Ohr oprhsv o or h yr, o x 146 (202)

to oprhsv o or h yr 45,183 30,836

Total comprehensive income attributable to:

Owners o the parent 39,902 28,840

Non-controlling interests 5,281 1,996

45,183 30,836

cOnSOliDateD Statement OFcOmPReHenSiVe incOmeFor h yr dd 31 Dbr 2010




(In Singapore dollars) GROUP cOmPanY

Note 2010 2009 2010 2009

$000 $000 $000 $000

asss

no-urr sss

Property, plant and equipment 12 34,351 26,738 – –

Investment properties 13 7,500 10,500 – –

Investments in subsidiaries 14 – – 105,673 –

Investments in associates 15 10,667 3,731 – –

Deerred tax assets 16 91 135 – –

Trade and other receivables 19 50,375 64,981 – –

Other investments 17 – 361 – –

to o-urr sss 102,984 106,446 105,673 –

curr sss

Inventories 18 1,884 1,769 – –

Income tax receivables 10 10 – –

Trade and other receivables 19 130,260 106,904 – –

Other investments 17 9,625 9,087 – –

Gross amount due rom customers or contract work 20 31,479 28,953 – –

Prepayments 21 1,604 4,894 1,447 –

Property held or sale 22 4,266 6,619 – –

Cash and bank balances 23 62,485 11,588 1,178 –

to urr sss 241,613 169,824 2,625 –

to sss 344,597 276,270 108,298 –

equy d bs

equy

Share capital 24 106,851 12,530 106,851 –

Retained earnings 40,741 2,556 (895) –

Other reserves 25 (58,836) (400) – –

equy, rbub o owrs o h pr 88,756 14,686 105,956 –

Non-controlling interests 309 5,559 – –

to quy 89,065 20,245 105,956 –

no-urr bs

Deerred tax liabilities 16 3,915 4,452 – –

Trade and other payables 27 13,607 49,664 – –

Borrowings 26 – 2,379 – –

Finance leases 28 52 248 – –

to o-urr bs 17,574 56,743 – –

curr bs

Provisions 3 91 – –

Income tax payable 9,376 3,644 – –

Trade and other payables 27 184,657 157,249 2,342 –

Borrowings 26 28,372 29,313 – –

Finance leases 28 196 484 – –

Gross amount due to customers or contract work 20 15,354 8,501 – –

to urr bs 237,958 199,282 2,342 –

to bs 255,532 256,025 2,342 –

to quy d bs 344,597 276,270 108,298 –

StatementS OF Financial POSitiOnas 31 Dbr 2010




(In Singapore dollars)arbub o owrs o h pr

equyrbub no-

Shr Rd Ohr to o owrs o orog top rgs rsrvs rsrvs h pr rss quy

(no 24) (no 25)GROUP $000 $000 $000 $000 $000 $000 $000 a 1 Jury 2009 12,530 (23,067) (217) (23,284) (10,754) 4,163 (6,591)Prot net o tax – 29,023 – 29,023 29,023 2,015 31,038

Net eect o exchange dierences arisingrom translation o nancial statementso oreign operations – – (90) (90) (90) (3) (93)

Share o other comprehensive incomeo associates – – (93) (93) (93) (16) (109)

Total comprehensive income or the year – 29,023 (183) 28,840 28,840 1,996 30,836 corbuos by d dsrbuos

o owrs Dividends paid – (3,400) – (3,400) (3,400) – (3,400) Dividends paid to non-controlling interest – – – – – (600) (600) to rsos wh owrs hr

py s owrs – (3,400) – (3,400) (3,400) (600) (4,000)

a 31 Dbr 2009 12,530 2,556 (400) 2,156 14,686 5,559 20,245 a 1 Jury 2010 12,530 2,556 (400) 2,156 14,686 5,559 20,245Prot net o tax – 39,785 – 39,785 39,785 5,252 45,037 Net eect o exchange dierences arising

rom translation o nancial statementso oreign operations – – 51 51 51 17 68

Share o other comprehensive incomeo associates – – 66 66 66 12 78

Total comprehensive income or the year – 39,785 117 39,902 39,902 5,281 45,183

corbuos by d dsrbuoso owrs

Adjustment arising rom Restructuring Exercise (12,530) – (70,718) (70,718) (83,248) 489 (82,759) Capital and subvention contributions rom

a related company relating to theRestructuring Exercise – – 38,158 38,158 38,158 – 38,158

Transers o reserves arising rom

Restructuring Exercise – 26,100 (26,100) – – – – Issuance o new ordinary shares 99,238 – – – 99,238 – 99,238

Dividends paid – (27,700) – (27,700) (27,700) – (27,700)

Dividends paid to non-controlling interest – – – – – (3,300) (3,300)

to orbuos by d dsrbuoso owrs 86,708 (1,600) (58,660) (60,260) 26,448 (2,811) 23,637

StatementS OF cHanGeS in eQUitYFor h yr dd 31 Dbr 2010



(In Singapore dollars)arbub o owrs o h pr

equyrbub no-

Shr Rd Ohr to o owrs o orog top rgs rsrvs rsrvs h pr rss quy

(no 24) (no 25)GROUP $000 $000 $000 $000 $000 $000 $000

chgs owrshp rss subsdryh do o rsu oss o oro

Acquisition o non-controlling interests 7,613 – – – 7,613 (7,720) (107)

Discount paid on acquisition o

non-controlling interests – – 107 107 107 – 107 to hgs owrshp rss

subsdry 7,613 – 107 107 7,720 (7,720) –

to rsos wh owrs hrpy s owrs 94,321 (1,600) (58,553) (60,153) 34,168 (10,531) 23,637

a 31 Dbr 2010 106,851 40,741 (58,836) (18,095) 88,756 309 89,065





(In Singapore dollars) equy

rbubShr Rd to o owrs o to

p rgs rsrvs h pr quy(no 24)

cOmPanY $000 $000 $000 $000 $000

a 9 mrh 2010, d o orporo –* – – – –*

Loss net o tax – (895) (895) (895) (895)

Other comprehensive income or the year – – – – –

to oprhsv o or h yr – (895) (895) (895) (895)

corbuos by d dsrbuos o owrs

Issuance o new ordinary shares 99,238 – – 99,238 99,238

to orbuos by d dsrbuos o owrs 99,238 – – 99,238 99,238

chgs owrshp rss subsdryh do o rsu oss o oro

Acquisition o non-controlling interests 7,613 – – 7,613 7,613

to hgs owrshp rss subsdry 7,613 – – 7,613 7,613

to rsos wh owrs hr py

s owrs 106,851 – – 106,851 106,851 a 31 Dbr 2010 106,851 (895) (895) 105,956 105,956

* Amount less than $1,000






2010 2009

$000 $000

csh fows ro oprg vs

Prot beore tax 54,960 35,117

Adjustments:

Allowance or doubtul trade receivables 101 296

Allowance or doubtul other receivables 302 782

Allowance or doubtul trade receivables written back (66) (112)

Allowance or inventory obsolescence 247 –

Allowance or inventory obsolescence written back (194) (7)

Amortisation o receivables and payables 389 –

Depreciation o property, plant and equipment 4,344 4,037

Dividend income rom investment securities (152) (121)

Gain on air value adjustment on held-or-trading investments (539) (6,076)

Gain on disposal o available-or-sale investment (869) –

Gain on disposal o property, plant and equipment (207) (227)

Gain on air value adjustment on investment properties (500) (490)

Finance cost 1,428 2,076

Interest income (3,147) (2,276)

Share o results o associates (6,557) (2,795)

Oprg sh fows bor hgs workg p 49,540 30,204

Property held or sale- Development expenditure (4,264) (8,520)

- Proceeds rom progress billings 7,102 9,447

(Increase)/decrease in inventories (179) 1,181

Increase in gross amount due rom customers or contract work (1,597) (3,277)

Increase in gross amount due to customers or contract work 6,853 1,055

Decrease/(increase) in trade and other receivables and prepayments 15,320 (16,847)

Increase in trade and other payables and provisions 9,054 6,684

csh fows ro opros 81,829 19,927

Interest received 36 271

Interest paid (1,801) (2,851)

Income tax (paid)/reund (2,039) 622

n sh fows ro oprg vs 78,025 17,969

csh fows ro vsg vs

Acquisition o a subsidiary arising rom Restructuring Exercise (2,700) –

Purchase o property, plant and equipment (15,059) (8,313)

Proceeds rom disposal o investment properties 3,500 –

Proceeds rom disposal o property, plant and equipment 2,213 262

Proceeds rom disposal o available-or-sale investments 1,230 –

Dividends received rom investment securities 152 121

Investment in an associate (300) –

Loans given to associates (17,443) (2,600)

n sh fows usd vsg vs (28,407) (10,530)

cOnSOliDateD Statement OFcaSH FlOWSFor h yr dd 31 Dbr 2010




2010 2009

$000 $000

csh fows ro g vs

Dividends paid (27,700) (3,400)

Dividends paid to non-controlling interests (3,300) (600)

Contribution rom holding companies 36,392 –

(Repayment o)/proceeds rom trust receipts and bills payable (370) 1,640

Repayment o obligations under nance leases (485) (475)

Proceeds rom bank loans 16,500 –

Repayment o bank loans (27,500) (3,670)

Increase in revolving bank loans 3,001 396

n sh fows usd g vs (3,462) (6,109)

n rs sh d sh quvs 46,156 1,330

Cash and cash equivalents at the beginning o year 4,542 2,974

Eect o exchange rate changes on cash and cash equivalents (18) 238

csh d sh quvs h d o yr (no 23) 50,680 4,542


cOnSOliDateD Statement OFcaSH FlOWSFor h yr dd 31 Dbr 2010



1 cORPORate inFORmatiOn

The Company was incorporated in the Republic o Singapore on 9 March 2010 as a public company, limited by shares under the name

o Ljubica Limited with an issued and paid up share capital o $2 comprising 2 ordinary shares. On 1 December 2010, the Company

changed its name to UE E&C Ltd.

The registered oce and the principal place o business o the Company are located at 12 Ang Mo Kio Street 64 #03-13 UE BizHub

CENTRAL, Singapore 569088.

The principal activity o the Company is that o investment holding company.

The principal activities o the subsidiary companies are disclosed in Note 14 to the nancial statements.

The ultimate holding company o UE E&C Ltd. is United Engineers Limited (“UEL”) which is incorporated in Singapore.

On 25 February 2011, the Company was admitted to the ocial list o Singapore Exchange Securities Trading Limited. The Company

issued 70,000,000 new ordinary shares at $0.48 per share in connection with its public oering. The net proceeds arising rom this

amounted to approximately $28,700,000.

2 tHe ReStRUctURinG eXeRciSe

The Group was ormed through a restructuring exercise (the “Restructuring Exercise”) in preparation or the Company’s listing on the

Singapore Exchange Securities Trading Limited (“SGX-ST”). Pursuant to the Restructuring Exercise, UE E&C Ltd. became the holding

company o the Group.

In accordance with Recommended Accounting Practice 12, Merger Accounting or Common Control Combinations or nancial

statements prepared under Part IX o the Fith Schedule to the Securities and Futures (Oers o Investments) (Shares and Debentures)

Regulations 2005, where the combining entities or business have been under common control but have not ormed a legal group as atthe end o the group’s latest reporting period, the nancial statements o the entities or businesses may, i meaningul, be presented on

a combined basis (as distinct rom consolidated nancial statements) provided that the common control combination under which the

legal group is ormed is completed beore the date o approval o the combined nancial statements by the directors.

The Restructuring Exercise is considered to be a business combination involving entities under common control and is accounted or

by applying the pooling o interests method. Accordingly, the assets and liabilities o these entities and business transerred have been

included in 2009 nancial statements at their carrying amounts. Although the Restructuring Exercise occurred in December 2010, the

2009 nancial statements present the nancial condition and results o operations as i the entities and business had always been

combined since the beginning o the earliest period presented.

The Restructuring Exercise involved the ollowing steps:

A. Acquisition o Anhui Anxin Energy Co., Ltd

Pursuant to a sale and purchase agreement entered into between UES Holdings Pte Ltd (ormerly known as United Engineers

(Singapore) Pte Ltd) (“UES Holdings”), a wholly owned subsidiary o UEL and UE-Tradetec (Singapore) Pte Ltd (“UET”), UET agreed

to acquire the entire registered capital o Anhui Anxin Energy Co., Ltd. (“AA”) or cash consideration o approximately $2.7 million,

being the sum equal to two times the value o the net asset value o AA as at 31 March 2010.

B. Sale o UE-Tradetec (Singapore) Pte Ltd’s shareholding interest in Lysaght Corrugated Pipe (S) Pte Ltd

Pursuant to a sale and purchase agreement entered into between UEL and UET, UET sold its entire shareholding interest in Lysaght

Corrugated Pipe (S) Pte Ltd (“Lysaght”) to UEL based on UET’s share o the net asset value o Lysaght and its subsidiaries as o

31 December 2009.

nOteS tO tHe Financial StatementS31 Dbr 2010



2 tHe ReStRUctURinG eXeRciSe (continued)

C. Acquisition o property located at 2 Gul Street 4, Singapore 629234 (“Gul Street Property”)

Pursuant to a sale and purchase agreement entered into between UEL and UET, UET agreed to acquire the Gul Street Property rom

UEL or a cash consideration o approximately $2.4 million, being the sum equal to the purchase price, stamp duty and legal ees

paid by UEL.

D. Acquisition o UE-Tradetec (Singapore) Pte Ltd

Pursuant to a sale and purchase agreement entered into between UEL and the Company, the Company agreed to purchase the

entire issued and ully paid share capital o UET based on the net asset value o UET as at 31 March 2010 which was satised by

the allotment and issue o 27,475,520 shares credited as ully paid by the Company to UEL.

E. Acquisition o UES Holdings’ interests in Greatearth Holding Pte Ltd and its subsidiaries, United Engineers (Vietnam)

Limited and United Engineers (B) Sdn Bhd.

Pursuant to a share purchase agreement entered into between UES Holdings and the Company, the Company agreed to purchase

UES Holdings’ interests in the ollowing subsidiaries:

• 85%shareholdinginterestinGreatearthHoldingPteLtdanditssubsidiaries(“GEH”)

• entirechartercapitalofUnitedEngineers(Vietnam)Limited(“UEV”)

• 90%shareholdinginterestinUnitedEngineers(B)SdnBhd(“UEB”)

basedontheaggregatenetassetvalueofGEHasat31March2010,issuedsharecapitalofUEVandthenegativenetassetvalue

o UEB as at 31 March 2010, which was satised by the allotment and issue o 145,454,036 shares credited as ully paid by the

Company to UES Holdings.

F. Acquisition o Mechanical and Electrical Engineering Business (“M&E Business”)

Pursuant to a business transer agreement entered into between UES Holdings, United Engineers (Singapore) Private Limited

(“UES”), a newly incorporated wholly owned subsidiary o the Company and the Company, UES agreed to purchase the M&E

Business rom UES Holdings based on the net assets value o the M&E Business as at 31 March 2010 which was satised by the

allotment and issue o 77,256,835 shares credited as ully paid by the Company to UES Holdings.

G. Sale o Mr. Chua Hock Tong’s Shareholding Interest in Greatearth Holding Pte Ltd and its subsidiaries

Pursuant to a sale and purchase agreement entered into with Mr. Chua Hock Tong, the Company agreed to purchase Mr. Chua

HockTong’s15%shareholdinginterestinGEHwhichwassatisedbytheallotmentandissueof23,791,311(seeNote24)shares

credited as ully paid by the Company to Mr. Chua Hock Tong.

3 SUmmaRY OF SiGniFicant accOUntinG POlicieS

3.1 Bss o prpro

The nancial statements o the Group and the statement o nancial position and statement o changes in equity o the Company

have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”).

The nancial statements have been prepared on the historical cost basis except or investment properties and held-or-trading

investments that have been measured at their air values.

The nancial statements are presented in Singapore dollars (SGD or $) and all values in the tables are rounded to the nearest

thousand ($000) except when otherwise indicated.




/ m&e3 SUmmaRY OF SiGniFicant accOUntinG POlicieS (continued)

3.2 chgs oug pos

The accounting policies adopted are consistent with those o the previous nancial year except in the current nancial year, the

Group has adopted all the new and revised Singapore Financial Reporting Standards (FRSs) and Interpretations o FRS (INT FRS)

that are relevant to its operations and eective or annual periods beginning on or ater 1 January 2010. The adoption o these

standards and interpretations did not have any material eect on the nancial statements o the Group and the Company.

3.3 Sdrds ssud bu o y v

The Group has not adopted the ollowing relevant standards and interpretations that have been issued but not yet eective:

Description Eective or annual periods

beginning on or ater

Amendment to FRS 32 Financial Instruments: Presentation - Classication o Rights Issues 1 February 2010

INT FRS 119 Extinguishing Financial Liabilities with Equity Instruments 1 July 2010

Revised FRS 24 Related Party Disclosures 1 January 2011

Amendments to INT FRS 114 Prepayments o a Minimum Funding Requirement 1 January 2011

Except or the revised FRS 24, the directors expect that the adoption o the other standards and interpretations above will have no

material impact on the nancial statements in the period o initial application. The nature o the impending changes in accounting

policy on adoption o the revised FRS 24 is described below.

Revised FRS 24 Related Party Disclosures

The revised FRS 24 claries the denition o a related party to simpliy the identication o such relationships and to eliminateinconsistencies in its application. The revised FRS 24 expands the denition o a related party and would treat two entities as

related to each other whenever a person (or a close member o that person’s amily) or a third party has control or joint control

over the entity, or has signicant infuence over the entity. The revised standard also introduces a partial exemption o disclosure

requirements or government-related entities. The Group is currently determining the impact o the changes to the denition o a

related party has on the disclosure o related party transaction. As this is a disclosure standard, it will have no impact on the nancial

position or nancial perormance o the Group when implemented in 2011.

3.4 Bss o osodo

The consolidated nancial statements comprise the nancial statements o the Company and its subsidiaries as at the end o the

reporting period. The nancial statements o the subsidiaries used in the preparation o the consolidated nancial statements are

prepared or the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events

in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting rom intra-group transactions are eliminated

in ull.

Subsidiaries are consolidated rom the date o acquisition, being the date on which the Group obtains control, and continue to be

consolidated until the date that such control ceases.

Business combinations (other than combinations involving entities or businesses under common control which are accounted or

by applying the pooling o interest method) are accounted or by applying the acquisition method. Identiable assets acquired and

liabilities assumed in a business combination are measured initially at their air values at the acquisition date. Acquisition-related

costs are recognised as expenses in the periods in which the costs are incurred and the services are received.




3 SUmmaRY OF SiGniFicant accOUntinG POlicieS (continued)

3.4 Bss o osodo (continued)

When the Group acquires a business, it assesses the nancial assets and liabilities assumed or appropriate classication and

designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.

This includes the separation o embedded derivatives in host contracts by the acquiree.

Any contingent consideration to be transerred by the acquirer will be recognised at air value at the acquisition date. Subsequent

changes to the air value o the contingent consideration which is deemed to be an asset or liability will be recognised in accordance

with FRS 39 either in prot or loss or as change to other comprehensive income. I the contingent consideration is classied as

equity, it is not be remeasured until it is nally settled within equity.

In business combinations achieved in stages, previously held equity interests in the acquiree are re-measured to air value at the

acquisition date and any corresponding gain or loss is recognised in prot or loss.

The Group elects or each individual business combination, whether non-controlling interest in the acquiree (i any) is recognised

on the acquisition date at air value, or at the non-controlling interest’s proportionate share o the acquiree net identiable assets.

Any excess o the sum o the air value o the consideration transerred in the business combination, the amount o non controlling

interest in the acquiree (i any), and the air value o the Group’s previously held equity interest in the acquiree (i any), over the

net air value o the acquiree’s identiable assets and liabilities is recorded as goodwill. In instances where the latter amount

exceeds the ormer, the excess is recognised as a gain on bargain purchase in prot or loss on the acquisition date.

Business combinations involving entities or businesses under common control are accounted or by applying the pooling o interest

method. The assets and liabilities o the combining entities or businesses are refected at their existing carrying amounts in the

combined nancial statements. The retained earnings and other reserves recognised in the combined nancial statements are the

retained earnings and other reserves o the combining entities or businesses immediately beore the combination.

Any dierence between the consideration paid and the share capital o the acquired entity or the net tangible asset amount o

the acquired business is refected within equity as merger reserve or decit. The combined prot and loss account refects the

results o the combining entities or businesses or the ull year, irrespective o when the combination takes place. Comparatives

are presented as i the entities or businesses had always been combined since the date the entities or businesses had come under

common control.

3.5 trsos wh o-orog rss

Non-controlling interests represent the equity in subsidiaries not attributable, directly or indirectly, to owners o the Company, and

are presented separately in the consolidated statement o comprehensive income and within equity in the consolidated statements

o nancial position, separately rom equity attributable to owners o the Company.

Changes in the Company owner’s ownership interest in a subsidiary that do not result in a loss o control are accounted or as

equity transactions. In such circumstances, the carrying amounts o the controlling and non-controlling interests are adjusted to

refect the changes in their relative interests in the subsidiary. Any dierences between the amount by which the non-controlling

interests are adjusted and the air value o the consideration paid or received are recognised directly in equity and attributed to

owners o the parent.

3.6 Rvu rogo

Revenue is recognised to the extent that it is probable that the economic benets will fow to the Group and the revenue can be

reliably measured. Revenue is measured at the air value o consideration received or receivable, excluding discounts, rebates, and

sales taxes or duty. The Group assesses its revenue arrangements to determine i it is acting as principal or agent. The Group has

concluded that it is acting as a principal in all o its revenue arrangements. The ollowing specic criteria must also be met beore

revenue is recognised:





3.6 Rvu rogo (continued)

Sale o goods

Revenue rom sale o goods is recognised upon the transer o signicant risk and rewards o ownership o the goods to the

customer. Revenue is not recognised to the extent where there are signicant uncertainties regarding recovery o the consideration

due, associated costs or the possible return o goods.

Rental income

Rental income arising on investment properties are accounted or on a straight-line basis over the lease terms. The aggregate costs

o incentives provided to lessees are recognised as a reduction o rental income over the lease term on a straight-line basis.

Revenue rom rental o machinery, equipment and metal products are recognised on a straight-line basis over the lease term as they

become receivable according to the provision o the lease agreement.

Construction contract revenue

Revenue rom construction contracts is recognised on the percentage o completion method. Further details can be ound in Note

3.18.

Rendering o services

Revenue rom services rendered is recognised upon services perormed.

Dividend income

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

Interest income

Interest income is recognised using the eective interest method.

Development properties held or sale

The Group recognises income on property development projects when the risk and rewards o ownership have been transerred

to the buyer through either the transer o legal title or an equitable interest in a property. In cases where the Group is obliged to

perorm any signicant acts ater the transer o legal title or equitable interest, revenue is recognised as the acts are perormed

based on the percentage o completion method, which is an allowed alternative method under Recommended Accounting

Practice 11, Pre-completion Contracts or the Sale o Development Property (“RAP 11”) issued by the Institute o Certied Public

Accountants o Singapore in October 2005. Under the percentage o completion method, prot is brought into the income

statement only in respect o sales procured and to the extent that such prot relates to the progress o construction work. The

progress o construction work is measured by the proportion o the construction costs incurred to date to the estimated total

construction costs or each project.





3.7 epoy bs

Equity compensation benefts

Prior to 31 December 2009, certain employees o the Group receive remuneration in the orm o options to subscribe or ordinary

stock units o the holding company under the United Engineers Share Option Scheme 2000 (Scheme 2000) as consideration or

services rendered. The cost o these equity-settled transactions with employees is measured by reerences to the air value o

the options at the date on which the options are granted. This cost is recognised in the income statement, with a corresponding

increase in capital reserve, over the vesting period. The cumulative expense recognised at each reporting date until the vesting

date refects the extent to which the vesting period has expired and the Group’s best estimate o the number o options that

will ultimately vest. The charge or credit to the income statement or a period represents the movement in cumulative expenses

recognised as at the beginning and end o that period.

No expense is recognised or options that do not ultimately vest, except or options where vesting is conditional upon a market,

which are treated as vesting irrespective o whether or not the market condition is satised, provided that all other perormance

and/or service conditions are satised.

Defned contribution plans

The Group participates in the national pension schemes as dened by the laws o the countries in which it has operations. As

required by law, the Group’s companies in Singapore make contributions to the Central Provident Fund (CPF) scheme in Singapore,

a dened contribution pension scheme. Contributions to dened contribution pension schemes are recognised as an expense in

the period in which the related service is perormed.

Employee leave entitlement

Employee entitlements to annual leave are recognised as a liability when they accrue to employees. The estimated liability or leave

is recognised or services rendered by employees up to the end o the reporting period.

3.8 Forg urrs

The Group’s consolidated nancial statements are presented in Singapore dollars, which is also the parent company’s unctional

currency. Each entity in the Group determines its own unctional currency and items included in the nancial statements o each

entity are measured using that unctional currency.

(a) Transactions and balances

Transactions in oreign currencies are measured in the respective unctional currencies o the Company and its subsidiaries and

are recorded on initial recognition in the unctional currencies at exchange rates approximating those ruling at the transaction

dates.

Monetary assets and liabilities denominated in oreign currencies are translated at the rate o exchange ruling at the end o

the reporting period. Non-monetary items that are measured in terms o historical cost in a oreign currency are translated

using the exchange rates as at the dates o the initial transactions. Non-monetary items measured at air value in a oreign

currency are translated using the exchange rates at the date when the air value was determined.

Exchange dierences arising on the settlement o monetary items or on translating monetary items at the end o the reporting

period are recognised in the income statement except or exchange dierences arising on monetary items that orm part o

the Group’s net investment in oreign operations, which are recognised initially in other comprehensive income as oreign

currency translation in the statement o nancial position. The oreign currency translation reserve is reclassied rom equity

to income statement o the Group on disposal o the oreign operation.





3.8 Forg urrs (continued)

(b) Group companies

The assets and liabilities o oreign operations are translated into Singapore dollars at the rate o exchange ruling at the

end o the reporting period and their income statement are translated at the weighted average exchange rates or the year.

The exchange dierences arising on the translation are taken directly to other comprehensive income. On disposal o a

oreign operation, the cumulative amount recognised in oreign currency translation reserve relating to that particular oreign

operation is recognised in the income statement.

In the case o a partial disposal without loss o control o a subsidiary that includes a oreign operation, the proportionate share

o the cumulative amount o the exchange dierences are re-attributed to non-controlling interest and are not recognised

in prot or loss. For partial disposals o associates or jointly controlled entities that are oreign operations, the proportionate

share o the accumulated exchange dierences is reclassied to prot or loss.

The Group has elected to recycle the accumulated exchange dierences in the separate component o other comprehensive

income that arises rom the direct method o consolidation, which is the method the Group uses to complete its consolidation.

3.9 io xs

Current taxation

Current tax assets and liabilities or the current and prior periods are measured at the amount expected to be recovered rom or

paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively

enacted by the date o the end o the reporting period, in the countries where the Group operates and generates taxable income.

Current taxes are recognised in the income statement except to the extent that the tax relates to items recognised outside income

statement, either in other comprehensive income or directly in equity. Management periodically evaluates positions taken in the

tax returns with respect to situations in where applicable tax regulations are subject to interpretation and establishes provisions

where appropriate.

Deerred taxation

Deerred income tax is provided using the liability method on temporary dierences at the end o the reporting period between the

tax bases o assets and liabilities and their carrying amounts or nancial reporting purposes.

Deerred tax liabilities are recognised or all temporary dierences, except:

• Wherethedeferredtaxliabilityarisesfromtheinitialrecognitionofgoodwillorofanassetorliabilityinatransactionthatis

not a business combination and, at the time o the transaction, aects neither the accounting prot nor taxable prot or loss;

and

• Inrespectoftaxabletemporarydifferencesassociatedwithinvestmentsinsubsidiariesandassociates,wherethetimingof

the reversal o the temporary dierences can be controlled and it is probable that the temporary dierences will not reverse

in the oreseeable uture.

Deerred tax assets are recognised or all deductible temporary dierences, carry orward o unused tax credits and unused tax

losses, to the extent that it is probable that taxable prot will be available against which the deductible temporary dierences, and

the carry orward o unused tax credits and unused tax losses can be utilised except:

• Wherethedeferredtaxassetrelatingtothedeductibletemporarydifferencearisesfromtheinitialrecognitionofanassetor

liability in a transaction that is not a business combination and, at the time o the transaction, aects neither the accounting

prot nor taxable prot or loss; and





3.9 io xs (continued)

Deerred taxation (continued)

• Inrespectofdeductibletemporarydifferencesassociatedwithinvestmentsinsubsidiariesandassociates,deferredtaxassets

are recognised only to the extent that it is probable that the temporary dierences will reverse in the oreseeable uture and

taxable prot will be available against which the temporary dierences can be utilised.

The carrying amount o deerred tax asset is reviewed at the end o each reporting period and reduced to the extent that it

is no longer probable that sucient taxable prot will be available to allow all or part o the deerred tax asset to be utilised.

Unrecognised deerred tax assets are reassessed at the end o each reporting period and are recognised to the extent that it has

become probable that uture taxable prot will allow the deerred tax asset to be recovered.

Deerred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or

the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the end o each reporting

period.

Deerred tax relating to items recognised outside income statement is recognised outside income statement. Deerred tax items are

recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deerred tax

arising rom a business combination is adjusted against goodwill on acquisition.

Deerred tax assets and deerred tax liabilities are oset, i a legally enorceable right exists to set o current tax assets against

current income tax liabilities and the deerred income taxes relate to the same taxable entity and the same taxation authority.

Goods and services taxation/sales tax

Revenues, expenses and assets are recognised net o the amount o goods and services taxation/sales tax except:

• Where thegoodsandservicestaxation/salestax incurredina purchaseofassetsor servicesisnot recoverablefrom the

taxation authority, in which case the goods and services taxation/sales tax is recognised as part o the cost o acquisition o

the asset or as part o the expense item as applicable; and

• Receivablesandpayablesthatarestatedwiththeamountofgoodsandservicestaxation/salestaxincluded.

The net amount o goods and services taxation/sales tax recoverable rom, or payable to, the taxation authority is included as part

o receivables or payables in the statement o nancial position.

3.10 Propry, p d qup

All items o property, plant and equipment are initially recorded at cost. Such cost includes the cost o replacing part o the

property, plant and equipment and borrowing costs that are directly attributable to the acquisition, construction or production o a

qualiying property, plant and equipment. The accounting policy or borrowing costs is set out in Note 3.25. The cost o an item o

property, plant and equipment is recognised as an asset i, and only i, it is probable that uture economic benets associated with

the item will fow to the Group and the cost o the item can be measured reliably.

Subsequent to recognition, property, plant and equipment are measured at cost less accumulated depreciation and accumulated

impairment losses.

Depreciation is computed on a straight-line basis over the estimated useul lives o the assets as ollows:

Leasehold land and buildings - over the terms o lease ranging rom 9 to 99 years

Light plant and machinery - 2 to 10 years

Heavy plant and machinery - 11 to 15 yearsMotor vehicles and other assets - 2 to 5 years





3.10 Propry, p d qup (continued)

Assets under construction included in capital work-in-progress are not depreciated as these assets are not yet available or use.

The carrying values o property, plant and equipment are reviewed or impairment when events or changes in circumstances

indicate that the carrying value may not be recoverable.

The residual value, useul lie and depreciation method are reviewed at each nancial year-end, and adjusted prospectively, i

appropriate.

An item o property, plant and equipment is derecognised upon disposal or when no uture economic benets are expected

rom its use or disposal. Any gain or loss arising on derecognition o the asset is included in prot or loss in the year the asset is

derecognised.

3.11 ivs proprs

Investment properties are those properties that are held on a long-term basis or their investment potential and income.

Investment properties are initially recorded at cost, including transaction costs. The carrying amount includes the cost o replacing

part o an existing investment property at the time that cost is incurred i the recognition criteria are met.

Subsequent to initial recognition, investment properties are measured at air value, which refects market conditions at the end o

the reporting period. Gains or losses arising rom changes in the air values o investment properties are included in prot or loss

in the year in which they arise.

Investment properties are derecognised when either they have been disposed o or when the investment property is permanentlywithdrawn rom use and no uture economic benet is expected rom its disposal. Any gains or losses on the retirement or disposal

o an investment property are recognised in prot or loss in the year o retirement or disposal.

Transers are made to or rom investment property only when there is a change in use. For a transer rom investment property to

owner occupied property, the deemed cost or subsequent accounting is the air value at the date o change in use. For a transer

rom owner occupied property to investment property, the property is accounted or in accordance with the accounting policy or

property, plant and equipment set out in Note 3.10 up to the date o change in use.

3.12 ipr o o- sss

The carrying amounts o the Group’s non-nancial assets are reviewed at the end o each reporting period to determine whether

there is any indication o impairment. I any such indication exists, or when annual impairment assessment or an asset is required,

the Group makes an estimate o the asset’s recoverable amount.

An asset’s recoverable amount is the higher o an asset’s or cash-generating unit’s air value less costs to sell and its value in use and

is determined or an individual asset, unless the asset does not generate cash infows that are largely independent o those rom

other assets. Where the carrying amount o an asset exceeds its recoverable amount, the asset or cash generating unit considered

impaired and its written down to its recoverable amount. In assessing value in use, the estimated uture cash fows expected to be

generated by the asset are discounted to their present value using a pre-tax discount rate that refects current market assessments

o the time value o money and the risks specic to the asset.

Impairment losses o continuing operations are recognised in prot or loss in those expense categories consistent with the unction

o the impaired asset; except or assets that are previously revalued where the revaluation was taken to other comprehensive

income. In this case the impairment is also recognised in other comprehensive income up to the amount o any previous revaluation.





3.12 ipr o o- sss (continued)

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously

recognised impairment losses may no longer exist or may have decreased. I such indication exists, the Group estimates the

asset’s recoverable amount. A previously recognised impairment loss is reversed only i there has been a change in the estimates

used to determine the asset’s recoverable amount since the last impairment loss was recognised. I that is the case, the carrying

amount o the asset is increased to its recoverable amount. The increase cannot exceed the carrying amount that would have been

determined, net o depreciation, had no impairment loss been recognised previously. Such reversal is recognised in prot or loss

unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.

3.13 Subsdrs d ssos

Subsidiary

A subsidiary is an entity over which the Group has the power to govern the nancial and operating policies so as to obtain

benets rom its activities. In the Company’s separate nancial statements, investments in subsidiaries are accounted or at cost

less impairment losses.

Associate

An associate is an entity, not being a subsidiary or a joint venture, in which the Group has signicant infuence. An associate is

equity accounted or rom the date the Group obtains signicant infuence until the date the Group ceases to have signicant

infuence over the associate.

The Group’s investments in associates are accounted or using the equity method. Under the equity method, the investment in

associates is measured in the statement o nancial position at cost plus post-acquisition changes in the Group’s share o net assetso the associates.

Goodwill relating to an associate is included in the carrying amount o the investment and is neither amortised nor tested individually

or impairment.

Any excess o the Group’s share o the net air value o the associate’s identiable assets, liabilities and contingent liabilities over the

cost o the investment is deducted rom the carrying amount o the investment and is recognised as income as part o the Group’s

share o results o the associate in the period in which the investment is acquired.

The prot or loss refects the share o the results o operations o the associates. Where there has been a change recognised in

other comprehensive income by the associates, the Group recognises its share o such changes in other comprehensive income.

Unrealised gains and losses resulting rom transactions between the Group and the associate are eliminated to the extent o the

interest in the associates.

The Group’s share o the prot or loss o its associates is shown on the ace o prot or loss ater tax and non-controlling interests

in the subsidiaries o associates.

When the Group’s share o losses in an associate equals or exceeds its interest in the associate, including any other unsecured

receivables, the Group does not recognise urther losses, unless it has incurred obligations or made payments on behal o the

associate.

Ater application o the equity method, the Group determines whether it is necessary to recognise any additional impairment loss

on the Group’s investment in its associate. The Group determines at the end o each reporting period whether there is any objective

evidence that the investment in the associate is impaired. I this is the case, the Group calculates the amount o impairment as

the dierence between the recoverable amount o the associate and its carrying value and recognises the amount in prot or loss.





3.13 Subsdrs d ssos (continued)

Associate (continued)

The nancial statements o the associates are prepared as o the same reporting date as the Company. Where necessary, adjustments

are made to bring the accounting policies in line with those o the Group.

Upon loss o signicant infuence over the associate, the Group measures any retained investment at its air value. Any dierence

between the carrying amount o the associate upon o signicant infuence and the air value o the aggregate o the retained

investment and proceeds rom disposal is recognised in prot or loss.

3.14 ivss

Investments are classied as nancial assets at air value through prot or loss, held-to-maturity investments or available-or-sale

nancial assets, as appropriate.

The accounting policies or the aorementioned categories o nancial assets are stated in Note 3.16.

3.15 ivors

Inventories are stated at the lower o cost and net realisable value. The costs o all inventories determined on a weighted average

basis where necessary, allowance is provided or damaged, obsolete and slow moving items to adjust the carrying value o

inventories to the lower o cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course o

business, less estimated costs to completion and the estimated costs necessary to make the sale.

3.16 F sss

Initial recognition and measurement

Financial assets are recognised on the statement o nancial position when, and only when, the Group becomes a party to the

contractual provisions o the nancial instrument. The Group determines the classication o its nancial assets at initial recognition.

When nancial assets are recognised initially, they are measured at air value, plus, in the case o nancial assets not at air value

through prot or loss, directly attributable transaction costs.

Subsequent measurement

The subsequent measurement o nancial assets depends on their classication as ollows:

Financial assets at air value through proft or loss

Financial assets held or trading are classied as nancing assets at air value through prot or loss. Financial assets held or trading

are derivatives (including separated embedded derivatives) or nancial assets acquired principally or the purpose o selling in the

near term.

Subsequent to initial recognition, nancial assets at air value through prot or loss are measured at air value. Any gains or losses

arising rom changes in air value o the nancial assets are recognised in the prot or loss. Net gains or net losses on nancial

assets at air value through prot or loss include exchange dierences, interest and dividend income.





3.16 F sss (continued)

Loans and receivables

Non-derivative nancial assets with xed or determinable payments that are not quoted in an active market are classied as loans

and receivables. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the eective interest

method, less impairment. Gains and losses are recognised in prot or loss when the loans and receivables are derecognised or

impaired, as well as through the amortisation process.

Available-or-sale fnancial assets

Available-or-sale nancial assets are nancial assets that are not classied in any o the three preceding categories. Ater initial

recognition, available-or-sale nancial assets are measured at air value. Any gains or losses rom changes in air value o the

nancial asset are recognised in other comprehensive income, except that impairment losses, oreign exchange gains and losses

on monetary instruments and interest calculated using the eective interest method are recognised in the income statement. The

cumulative gain or loss previously recognised in other comprehensive income is reclassied rom equity to the income statement as

a reclassication adjustment when the nancial asset is derecognised.

Investments in equity instruments whose air value cannot be reliably measured are measured at cost less impairment loss.

Derecognition

A nancial asset is derecognised where the contractual right to receive cash fows rom the asset has expired. On derecognition

o a nancial asset in its entirety, the dierence between the carrying amount and the sum o the consideration received and any

cumulative gain or loss that had been recognised in other comprehensive income is recognised in prot or loss.

All regular way purchases and sales o nancial assets are recognised or derecognised on the trade date i .e., the date that the Group

commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales o nancial assets that require delivery

o assets within the period generally established by regulation or convention in the marketplace concerned.

3.17 ipr o sss

The Group assesses at the end o each reporting period whether there is any objective evidence that a nancial asset is impaired.

I any such indication exists, or when annual impairment assessment or an asset is required, the Group makes an estimate o the

asset’s recoverable amount.

Financial assets carried at amortised cost

For nancial assets carried at amortised cost, the Group rst assesses individually whether objective evidence o impairment exists

individually or nancial assets that are individually signicant, or collectively or nancial assets that are not individually signicant.

I the Group determines that no objective evidence o impairment exists or an individually assessed nancial asset, whether

signicant or not, it includes the asset in a group o nancial assets with similar credit risk characteristics and collectively assesses

them or impairment. Assets that are individually assessed or impairment and or which an impairment loss is, or continues to be

recognised are not included in a collective assessment o impairment.

I there is objective evidence that an impairment loss on nancial assets carried at amortised cost has been incurred, the amount

o the loss is measured as the dierence between the asset’s carrying amount and the present value o estimated uture cash

fows discounted at the nancial asset’s original eective interest rate. I a loan has a variable interest rate, the discount rate or

measuring any impairment loss is the current eective interest rate. The carrying amount o the asset is reduced through the use

o an allowance account. The impairment loss is recognised in prot or loss.





3.17 ipr o sss (continued)

Financial assets carried at amortised cost (continued)

When the asset becomes uncollectible, the carrying amount o impaired nancial assets is reduced directly or i an amount was

charged to the allowance account, the amounts charged to the allowance account are written o against the carrying value o the

nancial asset.

To determine whether there is objective evidence that an impairment loss on nancial assets has been incurred, the Group considers

actors such as the probability o insolvency or signicant nancial diculties o the debtor and deault or signicant delay in

payments.

I in a subsequent period, the amount o the impairment loss decreases and the decrease can be related objectively to an event

occurring ater the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying

amount o the asset does not exceed its amortised cost at the reversal date. The amount o reversal is recognised in prot or loss.

Financial assets carried at cost

I there is objective evidence (such as signicant adverse changes in the business environment where the issuer operates, probability

o insolvency or signicant nancial diculties o the issuer) that an impairment loss on nancial assets carried at cost has been

incurred, the amount o the loss is measured as the dierence between the asset’s carrying amount and the present value o

estimated uture cash fows discounted at the current market rate o return or a similar nancial asset. Such impairment losses

are not reversed in subsequent periods.

Available-or-sale fnancial assets

In the case o equity investments classied as available-or-sale, objective evidence o impairment include (i) signicant nancial

diculty o the issuer or obligor, (ii) inormation about signicant changes with an adverse eect that have taken place in the

technological, market, economic or legal environment in which the issuer operates, and indicates that the cost o the investment

in equity instrument may not be recovered; and (iii) a signicant or prolonged decline in the air value o the investment below its

cost. ‘Signicant’ is to be evaluated against the original cost o the investment and ‘prolonged’ against the period in which the air

value has been below its original cost.

I an available-or-sale nancial asset is impaired, an amount comprising the dierence between its acquisition cost (net o any

principal repayment and amortisation) and its current air value, less any impairment loss previously recognised in prot or loss, is

transerred rom other comprehensive income and recognised in prot or loss. Reversals o impairment losses in respect o equity

instruments are not recognised in prot or loss. Reversals o impairment losses in respect o equity instruments are not recognised

in prot or loss, increase in their air value ater impairment is recognised directly in other comprehensive income.

3.18 cosruo ors

Contract revenue and contract costs are recognised as revenue and expenses respectively by reerence to the stage o completion

o the contract activity at the end o the reporting period, when the outcome o a construction contract can be estimated reliably.

When the outcome o a construction contract cannot be estimated reliably, contract revenue is recognised to the extent o contract

costs incurred that are likely to be recoverable and contract costs are recognised as expense in the period in which they are incurred.

An expected loss on the construction contract is recognised as an expense immediately when it is probable that total contract costs

will exceed total contract revenue.

Contract revenue comprises the initial amount o revenue agreed in the contract and variations in contract work, claims and

incentive payments to the extent that it is probable that they will result in revenue and they are capable o being reliably measured.





3.18 cosruo ors (continued)

Revenue arising rom xed price contracts is recognised in accordance with the percentage o completion method. The stage o

completion is measured by reerence to proessional surveys o work perormed.

Revenue rom cost plus contracts is recognised by reerence to the recoverable costs incurred plus a percentage o the contract ee

earned during the year. Percentage o the contract ee earned is measured by the proportion that the costs incurred to date bear

to the estimated total costs o the contract. Only costs that refect services perormed are included in the estimated total costs o

the contract. Where the contract outcome cannot be measured reliably, revenue is recognised only to the extent o the expenses

recognised that are recoverable.

3.19 Proprs hd or s

Development properties held or sale

Development properties held or sale are stated at cost plus estimated prots to-date less progress billings. Allowance or

oreseeable losses is made when it is anticipated that the net realisable value has allen below cost.

Costs includes cost o land and construction, related overhead expenditure and nancing charges incurred up to the completion

o construction. Financing charges incurred to nance the development o such properties are capitalised during the period that

is required to complete and prepare each property or its sale. Net realisable value represents the estimated selling price less costs

to be incurred in selling the property.

Developments are considered completed upon the issue o Temporary Occupation Permit. When completed, development

properties held or sale are transerred to completed properties held or sale.

Prot on development properties held or sale is recognised on partly completed projects which have been sold and is based on

the percentage o completion method (reer to Note 3.6). The expected prot is assessed having regard to the sales procured less

attributable total costs including the cost o land, construction and interest and ater making due allowance or known potential

costs over-runs and allowance or contingencies.

Progress billing to purchasers o residential units or sale are shown as a deduction rom the cost o the development properties

held or sale.

Completed properties held or sale

Completed properties held or sale are stated at the lower o cost and net realisable value. Cost includes cost o land and

construction, related overhead expenditure, and nancing charges and other net costs incurred during the period o development.

The costs are assigned by using specic identication. Net realisable value represents the estimated selling price less costs to be

incurred in sell ing the property.

Allowance or impairment is made when it is anticipated that the net realisable value has allen below cost.

Revenue rom completed properties held or sale is recognised upon execution o Sale and Purchase Agreements.

3.20 csh d sh quvs

Cash and cash equivalents comprise cash on hand and at bank, demand deposits and short-term, highly liquid investments that are

readily convertible to known amount o cash and which are subject to an insignicant risk o changes in value. These also include

bank which orm an integral part o the Group’s cash management.





3.21 Borrowgs

Borrowings are presented as current liabilities unless the Group has an unconditional right to deer settlement or at least 12

months ater the end o the reporting period.

Borrowings are initially recognised at air value (net o transaction costs) and subsequently carried at amortised cost. Any dierence

between the proceeds (net o transaction costs) and the redemption value is recognised in income statement over the period o the

borrowings using the eective interest method.

3.22 F bs

Initial recognition and measurement

Financial liabilities are recognised on the statement o nancial position when, and only when, the Group becomes a party to

the contractual provisions o the nancial instrument. The Group determines the classication o its nancial liabilities at initial

recognition.

Financial liabilities are recognised initially at air value, plus, in the case o nancial liabilities other than derivatives, directly

attributable transaction costs.

Subsequent measurement

The measurement o nancial liabilities depends on their classication as ollows:

Financial liabilities at air value through proft or loss

Financial liabilities at air value through prot or loss includes nancial liabilities held or trading and nancial liabilities designated

upon initial recognition as at air value. Financial liabilities are classied as held or trading i they are acquired or the purpose o

selling in the near term. This category includes derivative nancial instruments entered into by the Group that are not designated

as hedging instruments in hedge relationships. Separated embedded derivatives are also classied as held or trading unless they

are designated as eective hedging instruments.

Subsequent to initial recognition, nancial liabilities at air value through prot or loss are measured at air value. Any gains or losses

arising rom changes in air value o the nancial liabilities are recognised in prot or loss.

The Group has not designated any nancial liabilities upon initial recognition at air value through prot or loss.

Other fnancial liabilities

Ater initial recognition, other nancial liabilities are subsequently measured at amortised cost using the eective interest rate

method. Gains and losses are recognised in prot or loss when the liabilities are derecognised, and through the amortisation

process.

Derecognition

A nancial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing

nancial liability is replaced by another rom the same lender on substantially dierent terms, or the terms o an existing l iability are

substantially modied, such an exchange or modication is treated as a derecognition o the original liability and the recognition

o a new liability, and the dierence in the respective carrying amounts is recognised in the prot or loss.





3.23 Provsos

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result o a past event, it is probable

that an outfow o economic resources will be required to settle the obligation, and the amount o the obligation can be estimated

reliably.

Provisions are reviewed at the end o each reporting period and adjusted to refect the current best estimate. I it is no longer

probable that an outfow o economic resources will be required to settle the obligation, the provision is reversed. I the eect o

the time value o money is material, provisions are discounted using a current pre-tax rate that refects, where appropriate, the

risks specic to the liability. Where discounting is used, the increase in the provision due to the passage o time is recognised as a

nance cost.

A provision or warranty is recognised or all products under warranty at the end o the reporting period. The provision is calculated

based on service history.

3.24 lss

The determination o whether an arrangement is, or contains a lease is based on the substance o the arrangement at inception

date: whether ullment o the arrangement is dependent on the use o a specic asset or assets or the arrangement conveys a

right to use the asset. For arrangements entered into prior to 1 January 2005, the date o inception is deemed to be 1 January

2005 in accordance with the transitional requirements o INT FRS 104.

As lessor

Leases where the Group retains substantially all the risks and rewards o ownership o the asset are classied as operating leases.

Initial direct costs incurred in negotiating an operating lease are added to the carrying amount o the leased asset and recognisedover the lease term on the same bases as rental income. The accounting policy or rental income is set out in Note 3.6. Contingent

rents are recognised as revenue in the period in which they are earned.

As lessee

Finance leases, which transer to the Group substantially all the risks and rewards incidental to ownership o the leased item, are

capitalised at the inception o the lease at the air value o the leased asset or, i lower, at the present value o the minimum lease

payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the nance

charges and reduction o the lease liability so as to achieve a constant rate o interest on the remaining balance o the liability.

Finance charges are charged to prot or loss. Contingent rents, i any, are charged as expenses in the periods in which they are

incurred.

Capitalised leased assets are depreciated over the shorter o the estimated useul lie o the asset and the lease term, i there is no

reasonable certainty that the Group will obtain ownership by the end o the lease term.

Operating lease payments are recognised as expense in prot or loss on a straight-line basis over the lease term. The aggregate

benet o incentives provided by the lessor is recognised as a reduction o rental expense over the lease term on a straight-line basis.

When an operating lease is terminated beore the lease period has expired, any payment required to be made to the lessor by way

o penalty is recognised as an expense in the period in which termination takes place.

3.25 Borrowg oss

Borrowing costs are capitalised as part o the cost o a qualiying asset i they are directly attributable to the acquisition, construction

or production o that asset. Capitalisation o borrowing costs commences when the activities to prepare the asset or its intended

use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the

assets are substantially completed or their intended use or sale. All other borrowing costs are expensed in the period they occur.Borrowing costs consist o interest and other costs that an entity incurs in connection with the borrowing o unds.





3.26 cogs

A contingent liability is :

(a) a possible obligation that arises rom past events and whose existence will be conrmed only by the occurrence or non-

occurrence o one or more uncertain uture events not wholly within the control o the Group; or

(b) a present obligation that arises rom past events but is not recognised because:

(i) It is not probable that an outfow o resources embodying economic benets will be required to settle the obligation; or

(ii) The amount o the obligation cannot be measured with sucient reliability.

A contingent asset is a possible asset that arises rom past events and whose existence will be conrmed only by the occurrence or

non-occurrence o one or more uncertain uture events not wholly within the control o the Group.

Contingent liabilities and assets are not recognised on the statement o nancial position o the Group, except or contingent

liabilities assumed in a business combination that are present obligations and which the air values can be reliably determined.

3.27 Govr grs

Government grants are recognised at their air value when there is reasonable assurance that the grant will be received and all

attaching conditions will be complied with.

Government grants are recognised in prot or loss on a systematic basis over the periods in which the Group recognises as expenses

the related costs or which the grants are intended to compensate. Grants related to income are deducted in reporting the related

expenses.

3.28 Sg rporg

For management purposes, the Group is organised into operating segments based on their products and services which areindependently managed by the respective segment managers responsible or the perormance o the respective segments undertheir charge. The segment managers report directly to the management o the Company who regularly review the segment resultsin order to allocate resources to the segments and to assess the segment perormance. Additional disclosures on each o thesesegments are shown in Note 36, including the actors used to identiy the reportable segments and the measurement basis o

segment inormation.

3.29 Rd prs

A party is considered to be related to the Group i:

(a) The party, directly or indirectly through one or more intermediaries,

(i) controls, is controlled by, or is under common control with, the Group;(ii) has an interest in the Group that gives it signicant infuence over the Group; or

(iii) has joint control over the Group;

(b) The party is an associate;

(c) The party is a jointly-controlled entity;

(d) The party is a member o the key management personnel o the Group or its parent;

(e) The party is a close member o the amily o any individual reerred to in (a) or (d); or

() The party is an entity that is controlled, jointly controlled or signicantly infuenced by or or which signicant voting power

in such entity resides with, directly or indirectly, any individual reerred to in (d) or (e); or

(g) The party is a post-employment benet plan or the benet o the employees o the Group, or o any entity that is a related

party o the Group.





3.30 Shr p d shr ssu xpss

Proceeds rom issuance o ordinary shares are recognised as share capital in equity. Incremental costs directly attributable to the

issuance o ordinary shares are deducted against share capital.

4 SiGniFicant accOUntinG JUDGementS anD eStimateS

The preparation o the Group’s nancial statements requires management to make judgements, estimates and assumptions that aect

the reported amounts o revenues, expenses, assets and liabilities, and the disclosure o contingent liabilities at the end o each reporting

period. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment

to the carrying amount o the asset or liability aected in the uture periods.

4.1 Judgs d ppyg oug pos

The ollowing are the judgements, apart rom those involving estimations, made by management in the process o applying the

Group’s accounting policies that have the most signicant eect on the amounts recognised in the nancial statements.

Assessment o operating lease commitments – as lessor

The Group has entered into commercial property leases on its investment property portolio. The Group has determined, based on

an evaluation o the terms and conditions o the arrangements, that it retains all the signicant risks and rewards o ownership o

these properties and so accounts or the contracts as operating leases.

Assessment o allowance or doubtul receivables

Trade and other receivables are recognised initially at air value and subsequently measured at amortised cost using the eectiveinterest method, less allowance or doubtul receivables. In assessing the allowance or receivables, the Group takes into account

the duration o the settlement agreement and whether any subsequent payments were in deault.

Income tax

The Group has exposure to income taxes in a ew jurisdictions. Signicant judgement is involved in determining the Group-wide

provision or income taxes. Tax is computed in accordance with taxation rules in each jurisdiction. There are certain transactions

and computations or which the ultimate tax determination is uncertain during the ordinary course o business. The Group

recognises liabilities or expected tax issues based on estimates o whether additional taxes will be due. Where the nal tax

outcome o these matters is dierent rom the amounts that were initially recognised, such dierences will impact the income tax

and deerred tax provisions in the period in which such determination is made. The carrying amount o the Group’s income tax

payable, deerred tax liabilities and deerred tax assets as at 31 December 2010 was $9,376,000 (2009: $3,644,000), $3,915,000

(2009: $4,452,000) and $91,000 (2009: $135,000) respectively.

4.2 Ky sours o so ury

The key assumptions concerning the uture and other key sources o estimation uncertainty at the end o each reporting period,

that have a signicant risk o causing a material adjustment to the carrying amounts o assets and liabilities within the next nancial

year are discussed below.

Useul lives o plant and machinery

The cost o plant and machinery is depreciated on a straight-line basis over the useul lives estimated to be within 2 to 15 years.

The carrying amount o the plant and machinery as at 31 December 2010 was $27,039,000 (2009: $25,480,000). Changes in the

expected level o usage could impact the economic useul lives and the residual values o these assets, thereore uture depreciation

charges could be revised.




4 SiGniFicant accOUntinG JUDGementS anD eStimateS (continued)

4.2 Ky sours o so ury (continued)

Useul lives o plant and machinery (continued)

Basedonmanagement’sestimates,a5%differenceintheexpectedusefullivesoftheseassetswouldresultinlessthan1%(2009:

1%)varianceintheGroup’sprotforthenancialyear.

Construction contracts

The Group recognises contract revenue to the extent o contract costs incurred where it is probable those costs will be recoverable

or based on the stage o completion method. The stage o completion is measured by reerence to proessional surveys o work

perormed.

Signicant assumptions are required in determining the stage o completion, the extent o the contract costs incurred, the estimated

total contract revenue and contract costs and liquidated damage claims, as well as the recoverability o the contract costs incurred.

Total contract revenue also includes an estimation o the recoverable variation works that are recoverable rom the customers. In

making the estimation, the Group evaluates by relying on past experience and knowledge o the project engineers and/or the

work o specialists. An estimation o recoverable variation works amounting to $13,641,000 (2009: $6,439,000) was taken into

consideration in arriving at the estimated revenue o construction contracts. Any shortall in recovery o this estimation will impact

the results o the Group by the same quantum.

The gross amount due rom customers or contract work was $31,479,000 (2009: $28,953,000).

The gross amount due to customers or contract work was $15,354,000 (2009: $8,501,000).

Impairment o loans and receivables

The Group assesses at the end o each reporting period whether there is any objective evidence that a nancial asset is impaired.

To determine whether there is objective evidence o impairment, the Group considers actors such as the probability o insolvency

or signicant nancial diculties o the debtor and deault or signicant delay in payments. Where there is objective evidence o

impairment, the amount and timing o uture cash fows are estimated based on historical loss experience or assets with similar

credit risk characteristics. The carrying amount o the Group’s loans and receivables with impairment indicators at the end o

the reporting period is disclosed in Note 19 to the nancial statements. I the present value o estimated uture cash fows o

receivablesthatarepastduebutnotimpairedandthosethatareimpaired,variesby5%frommanagement’sestimates,theGroup’s

allowance or impairment will increase by $109,000 (2009: $80,000).

Revaluation o investment properties

The Group’s investment properties, with a carrying amount o $7,500,000 as at 31 December 2010 (2009: $10,500,000) are stated

at their estimated air values which are determined annually by independent proessional valuers. These estimated air values may

dier rom the prices at which the Group’s investment properties could be sold at a particular time, since actual selling prices are

negotiated between willing buyers and sellers. Also, certain estimates require an assessment o uncontrollable actors, such as

overall market conditions. As a result, actual results o operations and realisation o these investment properties could dier rom

the estimates set orth in these nancial statements.




5 ReVenUe

GROUP

2010 2009

$000 $000

Revenue rom construction contracts 348,432 361,050

Rental income rom rental o machinery 13,313 12,383

Rental income rom investment properties (Note 13) 352 428

Rendering o services 6,831 3,739

Sale o properties 6,878 9,693

Sale o goods 6,047 7,508

381,853 394,801

6 inteReSt incOme

GROUP

2010 2009

$000 $000

Interest income rom loans and receivables 3,147 2,276

7 OtHeR incOme

GROUP

2010 2009

$000 $000

Dividend income rom investment securities 152 121Gain on air value adjustment on held-or-trading investments 539 6,076

Gain on disposal o available-or-sale investment 869 –

Gain on disposal o property, plant and equipment 207 227

Gain on air value adjustment on investment properties (Note 13) 500 490

Gain on disposal o scrap 114 385

Management ees 107 56

Rental income rom premises 273 –

Other sundry income 10 12

2,771 7,367

8 Finance cOStS

GROUP

2010 2009

$000 $000

Interest expense on:

- Bank loans and bank overdrats 1,365 1,943

- Finance leases 35 49

- Loans and amounts due to:

Holding company 67 156

Related companies 293 432

1,760 2,580

Less: Interest expense capitalised in:

Property held or sale (Note 22) (332) (504)

Total nance costs 1,428 2,076


64



9 PROFit BeFORe taX

The ollowing items have been included in arriving at prot beore tax:

GROUP

2010 2009

$000 $000

Allowance or doubtul trade receivables (Note 19) (101) (296)

Allowance or doubtul other receivables (Note 19) (302) (782)

Allowance or doubtul trade receivables written back (Note 19) 66 112

Allowance or inventory obsolescence (Note 18) (247) –

Allowance or inventory obsolescence written back (Note 18) 194 7

Amortisation o receivables and payables (389) –

Depreciation o property, plant and equipment (Note 12) (4,344) (4,037)

Direct operating expenses arising rom investment properties (Note 13) (45) (64)

Foreign exchange loss, net (426) (527)

Legal ees (63) (654)

Listing expenses (895)* –

Management ees and consultancy services 1,739 1,412

Non-audit ees paid to auditors or proessional services

- Auditors o the Group (56) (130)

- Other auditors (84) (48)

Operating lease expense (Note 30) 463 632

Sta costs (including directors’ remuneration)

- Salaries, wages, bonuses and other costs (24,629) (27,661)

- Central Provident Fund and other dened contribution plans (1,553) (1,752)

- Grant income rom jobs credit scheme 71 911

* Includes $106,000 non-audit ees paid to auditors o the Group.

During the nancial year ended 31 December 2009, the Singapore Finance Minister announced the introduction o a Jobs Credit Scheme

(Scheme).UnderthisScheme,theGroupreceiveda12%cashgrantontherst$2,500ofeachmonth’swagesforeachemployeeon

their Central Provident Fund payroll. During the nancial year, the Group received its grant income o $71,000 (2009: $911,000) under

the Scheme.

10 incOme taX eXPenSe

Major components o income tax expense

The major components o income tax expense or the years ended 31 December 2010 and 2009 are:

GROUP

2010 2009

$000 $000

Current taxation:

- current year 9,064 3,741

- under provision in respect o prior years 107 570

- tax losses transerred to holding company – (1,691)

9,171 2,620

Deerred taxation:

- eect o reduction in tax rate – (163)

- over provision in respect o prior years – (2)- origination and reversal o temporary dierences 752 1,624

Income tax expense recognised in the income statement 9,923 4,079




10 incOme taX eXPenSe (continued)

Relationship between tax expense and accounting proft

The reconciliation o the tax expense and the product o accounting prot multiplied by the applicable corporate tax rate or the years

ended 31 December 2010 and 2009 are as ollows:

GROUP

2010 2009

$000 $000

Prot beore tax 54,960 35,117

TaxatSingaporestatutorytaxrateof17% 9,343 5,970

Adjustments:

Expenses not deductible or tax purposes 2,209 163

Income not subject to taxation (383) (814)

Singapore statutory income exemption (54) (73)

Impact o dierent tax rates applicable to prots in the

countries where the Group operates (407) 241

Eect o reduction in tax rate – (163)

Deerred tax assets not recognised 382 384

Benets rom previously unrecognised tax losses (163) (24)

Under provision in respect o prior years 107 568

Share o results o associates (1,115) (475)

Unabsorbed tax losses transerred – (1,691)

Others 4 (7)

Income tax expense recognised in the income statement 9,923 4,079

ThecorporateincometaxrateapplicabletoSingaporecompaniesoftheGroupwasreducedto17%fortheyearofassessment2010

onwardsfrom18%foryearofassessment2009.ThecorporateincometaxrateapplicabletoaMalaysiansubsidiaryoftheGroupwas

reducedfrom26%in2008to25%in2009.

In 2009, the Group transerred unabsorbed trade losses amounting to $9,395,000 to the holding company, United Engineers Limited

under the group relie system, subject to compliance with the relevant rules and procedures and agreement o tax authority. Current year

tax expense in 2009 is net o the tax eect o the trade losses transerred.

11 eaRninGS PeR SHaRe

Basic earnings per share is calculated by dividing the Group’s net prots attributable to owners o the parent or both the nancial years

by the pre-invitation share capital o 200,000,000 ordinary shares.

Diluted earnings per share is calculated by dividing the Group’s net prots attributable to owners o the parent by the weighted average

number o ordinary shares outstanding during the year plus the weighted average number o ordinary shares that would be issued on

the conversion o all the potential dilutive ordinary shares into ordinary shares. There were no potential dilutive ordinary shares existing

during the nancial year.




11 eaRninGS PeR SHaRe (continued)

The ollowing tables refect the prot and share data used in the computation o basic and diluted earnings per share or the years ended

31 December 2010 and 2009:

GROUP

2010 2009

Prot or the year attributable to owners o the parent used in

computation o basic and diluted earnings per share ($000) 39,785 29,023

Pre-invitation share capital (000) 200,000 200,000

12 PROPeRtY, Plant anD eQUiPment

moor

lshod cp vhs

d d work-- m P d d ohr

budgs progrss ors hry sss to

GROUP $000 $000 $000 $000 $000 $000

cos

At 1 January 2009 553 – 5,003 40,612 4,352 50,520

Additions – – 132 8,018 163 8,313

Disposals – – (761) (502) (173) (1,436)

Exchange dierences – – – (453) (66) (519)

At 31 December 2009 and 1 January 2010 553 – 4,374 47,675 4,276 56,878

Additions 2,375 3,856 72 8,229 527 15,059

Disposals – – (558) (2,563) (847) (3,968)


At 31 December 2010 2,928 3,856 3,888 53,079 3,935 67,686

auud dpro

At 1 January 2009 459 – 4,600 19,050 2,955 27,064

Charge or the year 55 – 312 3,780 512 4,659

Disposals – – (761) (486) (154) (1,401)


At 31 December 2009 and 1 January 2010 514 – 4,151 22,195 3,280 30,140

Charge or the year 39 – 200 4,611 407 5,257

Disposals – – (558) (679) (726) (1,963)


At 31 December 2010 553 – 3,793 26,040 2,949 33,335

n rryg ou

At 31 December 2010 2,375 3,856 95 27,039 986 34,351

At 31 December 2009 39 – 223 25,480 996 26,738




12 PROPeRtY, Plant anD eQUiPment (continued)

Assets held under fnance leases

The carrying amount o oce equipment, motor vehicles and plant and machinery held under nance leases as at 31 December 2010

was $815,000 (2009: $1,202,000).

Leased assets are pledged as security or the related nance lease liabilities.

GROUP

2010 2009

$000 $000

The depreciation charge or the nancial year in the income statement is as ollows:

Depreciation or the nancial year 5,257 4,659

Current nancial year’s depreciation charged to construction projects (913) (622)

Charged to the income statement 4,344 4,037

13 inVeStment PROPeRtieS

GROUP

2010 2009

$000 $000

At 1 January 10,500 10,010

Disposals (3,500) –

Gain on air value adjustment recognised in the income statement (Note 7) 500 490

At 31 December 7,500 10,500

io s:

Rental income rom investment properties (Note 5):

- Minimum lease payments 352 428

Direct operating expenses (including repairs and maintenance) (Note 9) arising rom:

- Rental generating properties (45) (57)

- Non-rental generating properties – (7)

(45) (64)

Valuation o investment properties

Investment properties are stated at their air values as at the end o the nancial year based on accredited independent proessional

valuations carried out by Knight Frank Pte Ltd or the investment properties at 31 December 2010 and 2009. The valuations are based

on the income method that makes reerence to estimated market rental values and equivalent yields.

The investment properties held by the Group as at 31 December are as ollows:

Dsrpo d oo exsg us tur Uxprd s r

2010 2009

2 units 3-storey shophouses with attic Shops and oces 99 years 80 years 81 years

at Nos. 99 and 101 Tanjong Pagar leasehold rom

Road, Singapore 19.03.1992




13 inVeStment PROPeRtieS (continued)

Valuation o investment properties (continued)

Dsrpo d oo exsg us tur Uxprd s r

2010 2009

No.81 Joo Chiat Road #01-01/02/03 Shops and oces 99 years –* 84 years

and #02-01/02/03, Singapore leasehold rom

23.06.1995

* On 21 May 2010, the Group disposed o its investment property at No.81 Joo Chiat Road or $3,500,000.

14 inVeStmentS in SUBSiDiaRieS

cOmPanY

2010 2009

$000 $000

Unquoted equity shares at cost 105,673 –

The subsidiaries as at 31 December are as ollows:

Prg

n o opy Prp vs o quy hd

(P o busss)1 by h Group

2010 2009

% %

iorpord Sgpor

Greatearth Construction Pte Ltd Building contractors 100 85

Greatearth Corporation Pte Ltd Building contractors 100 85

Greatearth Holding Pte Ltd Investment holding 100* 85

Maxdin Pte Ltd Property investment 100 85

UE-IBP Building Materials Pte Ltd Bulk supply o building materials 70 59.5

UE-Tradetec (Singapore) Pte Ltd Supply o machinery, equipment 100 100

and metal products

United Engineers (Singapore) Private Limited Mechanical and electrical engineering 100* –

iorpord mys2

GE Construction Sdn Bhd Building contractors 100 85

(Malaysia)




14 inVeStmentS in SUBSiDiaRieS (continued)

Prg

n o opy Prp vs o quy hd

(P o busss)1 by h Group

2010 2009

% %

iorpord Bru2

United Engineers (B) Sdn Bhd Civil, electrical, mechanical engineers and 90* 90

contractors

(Brunei)

iorpord th Pop’s Rpub o ch3

Anhui Anxin Energy Co., Ltd. Leasing o generator sets 100 100

(The People’s Republic o China)

iorpord V2

UnitedEngineers(Vietnam)Limited Engineering and construction 100* 100

(Vietnam)

1 Place o business in Singapore unless otherwise stated.

2 Audited by member rms o Ernst & Young Global in the respective countries.

3 Audited by Hua Pu Tian Jian Certied Public Accountants (Beijing) Co., Ltd.

* Direct subsidiaries o UE E&C Ltd.

15 inVeStmentS in aSSOciateS

GROUP

2010 2009

$000 $000

Unquoted equity shares at cost 800 500

Share o post acquisition reserves 9,867 3,231

10,667 3,731

The associates as at 31 December are as ollows:

n o opy Prp vs Prg

(P o busss)1 o quy hd

2010 2009

% %

Held through subsidiaries

iorpord Sgpor

Greatearth Developments Pte Ltd Property development and leasing 50 50

MaxLee Development Pte Ltd Property development and investment 30 –

1

Place o business in Singapore unless otherwise stated.




15 inVeStmentS in aSSOciateS (continued)

The summarised nancial inormation o the associates not adjusted or the proportion o ownership interest held by the Group is as

ollows:

GROUP

2010 2009

$000 $000

asss d bs:

Current assets 375,511 182,493

Non-current assets 29,935 27,492

to sss 405,446 209,985

Current liabilities (161,099) (26,149)

Non-current liabilities (222,631) (176,373),

to bs (383,730) (202,522)

Rsus:

Revenue 187,791 83,810

Prot or the year 13,096 5,590

16 DeFeRReD taX

Movement in deerred tax liabilities/(assets):

GROUP 2010 2009

$000 $000

At 1 January 4,317 2,858

Charged to the income statement (Note 10)

- current year 752 1,461

- over provision in respect o prior years – (2)

Eect arising rom Restructuring Exercise (1,245) –

At 31 December 3,824 4,317

The deerred taxation balance comprises:

Drrd x bs

Unremitted oshore income 31 –

Excess o net book value over the tax written down

value o property, plant and equipment 2,809 2,237

Fair value adjustment on held-or-trading investments 51 1,244

Fair value adjustment on investment properties 1,013 971

Other items 11 –

3,915 4,452

Drrd x sss

Provisions (91) (121)

Other items – (14)

(91) (135)

3,824 4,317




16 DeFeRReD taX (continued)

Unrecognised tax losses and capital allowances

The Group has unabsorbed tax losses o approximately $1,719,000 (2009: $3,832,000) and unutilised capital allowances o approximately

$744,000 (2009: $1,608,000) or the nancial year ended 31 December 2010 that are available or set-o against uture assessable

income o the companies in which the losses arose, or which no deerred tax asset is recognised due to uncertainty o its recoverability.

The use o these tax losses is subject to agreement with the tax authorities and compliance with certain provisions o the tax legislation

o the respective countries in which the companies operate.

Unrecognised temporary dierences relating to investments in subsidiaries

At the end o the reporting period, no deerred tax liability (2009: Nil) has been recognised or taxes that would be payable on the

undistributed earnings o the Group’s overseas subsidiaries.

The Group has determined that undistributed earnings o its subsidiaries will not be distributed in the oreseeable uture. Such temporary

dierences arising principally rom a Malaysian subsidiary or which no deerred tax liability has been recognised in 2009 amounting

to approximately $1,116,000. The deerred tax liability is estimated to be $279,000. In 2010, no temporary dierences arising or the

undistributed earnings o the subsidiary as the subsidiary is in a net decit reserves which are not available or distribution.

17 OtHeR inVeStmentS

GROUP

2010 2009

$000 $000

no-urr:

Available-or-sale nancial assets

Unquoted equity shares at cost – 361

curr:

Held-or-trading investments

Quoted equity shares 9,625 9,087

During the year, the Group has disposed o its available-or-sale investment or a gain o $869,000 (Note 7).

18 inVentORieS

GROUP

2010 2009

$000 $000

Inventories, at lower o cost and net realisable value

Trading inventories 1,884 1,769

Inventories are stated ater deducting allowance o 423 370

io s:

Inventories recognised as an expense in cost o sales 6,071 5,678

Inclusive o the ollowing charge (Note 9):

- Allowance or inventory obsolescence 247 –

- Allowance or inventory obsolescence written back (194) (7)




19 tRaDe anD OtHeR ReceiVaBleS

GROUP cOmPanY

2010 2009 2010 2009

$000 $000 $000 $000

no-urr:

Loans receivable rom associates 30,162 34,951 – –

Retention sums 20,213 30,030 – –

50,375 64,981 – –

curr:

Trade receivables 37,436 57,590 – –

Amounts due rom related companies 15,845 16,569 – –

Amounts due rom associates 7,752 3,790 – –


Allowance or doubtul trade receivables (286) (348) – –

97,396 99,217 – –

Other receivables:

Claims/expenses recoverable 6,919 6,778 – –

Deposits 2,654 1,610 – –

Loans receivable rom associates 22,233 – – –

Sundry and other receivables 2,924 879 – –

Allowance or doubtul other receivables (1,866) (1,580) – –

32,864 7,687 – –

Trade and other receivables (current) 130,260 106,904 – –

Trade and other receivables (current and non-current) 180,635 171,885 – –

Add:

Cash and bank balances (Note 23) 62,485 11,588 1,178 –

Total loans and receivables 243,120 183,473 1,178 –

Trade receivables

Trade receivables are non-interest bearing and are generally on 30 day terms. They are recognised at their original invoice amounts which

represent their air values on initial recognition.

Retention sums

Retention sums relate to construction contracts in progress.

Loans receivable rom associates

Loansreceivablefromassociatesareunsecuredandaresubjecttoeffectiveinterestratexedat6.50%perannum.

Amounts due rom related companies and associates

Amounts due rom related companies and associates are unsecured, trade in nature, non-interest bearing, repayable on demand and

are to be settled in cash.




19 tRaDe anD OtHeR ReceiVaBleS (continued)

Receivables that are past due but not impaired

The Group has trade and other receivables amounting to $9,863,000 (2009: $16,704,000) that are past due at the end o the reporting

period but not impaired. These receivables are unsecured and the analysis o their aging at the end o the reporting period is as ollows:

GROUP

2010 2009

$000 $000

Trade and other receivables past due:

Less than 30 days 786 3,531

30 to 60 days 1,353 5,121

61 to 90 days 949 485

91 to 120 days 191 437

More than 120 days 6,584 7,130

9,863 16,704

Receivables that are impaired

The Group’s trade and other receivables that are impaired at the end o the reporting period and the movement o the allowance

accounts used to record the impairment are as ollows:

GROUP

2010 2009

$000 $000

Trade and other receivables – nominal amounts 6,329 4,686

Less: Allowance or doubtul receivables (2,152) (1,928) 4,177 2,758

Movements in allowance accounts:

GROUP

trd Rvbs Ohr Rvbs

2010 2009 2010 2009

$000 $000 $000 $000

At 1 January (348) (1,555) (1,580) (798)

Charge or the year (101) (296) (302) (782)

Written o 95 1,388 16 –

Written back 66 112 – –

Exchange dierences 2 3 – –

At 31 December (286) (348) (1,866) (1,580)

Trade and other receivables that are individually determined to be impaired at the end o the reporting period relate to debtors that

are in signicant nancial diculties and have deaulted on payments. These receivables are not secured by any collateral or credit

enhancements.




20 GROSS amOUnt DUe FROm/(tO) cUStOmeRS FOR cOntRact WORK

GROUP

2010 2009

$000 $000

Aggregate amount o costs incurred and recognised prots (less recognised losses) to-date 853,200 632,533

Less: Progress billings (837,075) (612,081)

16,125 20,452

Presented as:

Gross amount due rom customers or contract work 31,479 28,953

Gross amount due to customers or contract work (15,354) (8,501)

16,125 20,452

Retention sums on construction contract included in trade receivables 48,463 43,745

21 PRePaYmentS

GROUP cOmPanY

2010 2009 2010 2009

$000 $000 $000 $000

Advance payment to sub-contractor or materials 52 4,689 – –

Prepaid listing expense 1,447 – 1,447 –

Other prepaid expenses 105 205 – –

1,604 4,894 1,447 –

Prepaid listing expenses relate to payments or proessional ees directly attributable to the Company’s oering o securities subsequent

to 31 December 2010.

22 PROPeRtY HelD FOR Sale

GROUP

2010 2009

$000 $000

Aggregate amount o costs incurred and recognised prots (less recognised losses) to-date 29,705 24,956

Less: Progress billings (25,439) (18,337)

As at 31 December 4,266 6,619

Interest capitalised during the year (Note 8) 332 504

Effectiveinterestrateperannum(%) 6.35% 4.89%

o 9.40% to8.75%




22 PROPeRtY HelD FOR Sale (continued)

The Group uses the percentage o completion method or recognising revenue rom partly completed projects. Had the completed

contract method been adopted, the impact on the nancial statements o the Group will be as ollows:

GROUP

2010 2009

$000 $000

Increase/(decrease) in:

Opening balance o retained earnings (3,247) (2,383)

Revenue recognised or the nancial year (6,779) (9,447)

Construction costs recognised or the nancial year (11,706) (8,583)

Prot/(loss) or the nancial year 4,927 (864)

Carrying value o property held or sale:

- beginning o nancial year (3,247) (2,383)

- end o nancial year 1,680 (3,247)

The property held or sale held by the Group relates to 294 units acquired through the provision o construction services on the

development o Megalong Shopping Mall in Malaysia. As at 31 December 2010 there were 47 (2009: 111) unsold units.

Thestageofcompletionasat31December2010was100%(2009:95%).Theaccountingpolicyrelatingtothepropertyheldforsale

is stated in Note 3.19.

23 caSH anD caSH eQUiValentS

GROUP cOmPanY

2010 2009 2010 2009 $000 $000 $000 $000

csh d bk bs:

Cash and bank balances 52,485 11,588 1,178 –

Fixed deposits 10,000 – – –

62,485 11,588 1,178 –

Bank balances and deposits earn eective interest at foating rates based on daily bank deposit rate. Short-term xed deposits are made

or varying periods o between one day and three months depending on the cash requirements o the Group, and earn eective interest

atratesrangingfrom0.04%to7.75%(2009:0.18%to0.36%).

For the purpose o consolidated statements o cash fows, cash and cash equivalents comprise the ollowing at the end o the reporting

period:

GROUP

2010 2009

$000 $000

Cash and bank balances 62,485 11,588

Bank overdrats (Note 26) (11,805) (7,046)

Cash and cash equivalents 50,680 4,542




24 SHaRe caPital

GROUP

2010 2009

no. o shrs No. o shares

000 $000 000 $000

issud d uy pd ordry shrs

At 1 January1 11,000 12,530 11,000 12,530

Adjustment arising rom Restructuring Exercise (11,000) (12,530) – –

Issuance o ordinary shares 276,209 99,238 – –

Acquisition o non-controlling interests 23,791 7,613 – –

Consolidation o shares (100,000) – – –

At 31 December 200,000 106,851 11,000 12,530

1 Applying the pooling o interest method o accounting share capital and number o shares or the Group represents the aggregate

paid up capital and number o shares o its subsidiary companies.

cOmPanY

2010 2009

no. o shrs No. o shares

000 $000 000 $000

issud d uy pd ordry shrs

At 9 March, date o incorporation – –* – –

Issuance o ordinary shares 276,209 99,238 – –Acquisition o non-controlling interests 23,791 7,613 – –

Consolidation o shares (100,000) – – –

At 31 December 200,000 106,851 – –

* Amount less than $1,000

The holders o ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote

per share without restriction. The ordinary shares have no par value.

As o the date o incorporation, the issued and paid-up ordinary share capital was $2.00 comprising two shares. As o 31 December

2010, the issued and paid-up ordinary share capital increased to 300,000,000 ordinary shares on completion o Restructuring Exercise.

On 11 February 2011, the Company undertook a share consolidation o every three shares into two shares, which reduced the total

number o shares issued by the Company rom 300,000,000 ordinary shares to 200,000,000 ordinary shares.

Arising rom the share consolidation, the Company adjusted the total number o shares issued rom 300,000,000 ordinary shares to

200,000,000 ordinary shares as at 31 December 2010.

Following the Company’s initial public offering of 70,000,000 shares, representing approximately 25.9% of the Company’s

enlarged post-oering share capital o 270,000,000 ordinary shares, the Company was listed on the Mainboard o the SGX-ST on

25 February 2011.




25 OtHeR ReSeRVeS

GROUP 2010 2009 $000 $000

Foreign currency translation reserve 61 11Share o other comprehensive expenses o associates, net o tax (344) (411)Merger decit (58,553) –

(58,836) (400)

() Forg urry rso rsrv

Foreign currency translation reserve is used to record exchange dierences arising rom the translation o the nancial statementso oreign operations whose unctional currencies are dierent rom that o the Group’s presentation currency.

GROUP 2010 2009 $000 $000

At 1 January 11 101Net eect o exchange dierences arising rom translation

o nancial statements o oreign operation 50 (90)At 31 December 61 11

(b) Shr o ohr oprhsv xpss o ssos

Share o other comprehensive expenses o associates relate to share o associates’ decit in hedging reserve.

GROUP2010 2009$000 $000

At 1 January (411) (318)Share o other comprehensive income o associates 67 (93)At 31 December (344) (411)

() mrgr d

Merger decit represents the dierence between the value o shares issued by the Company in exchange or the value o sharesacquired in respect o the acquisition o subsidiaries and business accounted or under the pooling-o-interests method arising romthe restructuring exercise carried out in 2010.

26 BORROWinGS

GROUP 2010 2009 $000 $000

curr:Bank overdrats 11,805 7,046Trust receipts and bills payable:- unsecured 4,580 5,255Bank loans (unsecured) 11,987 17,012

28,372 29,313

no-urr: Bank loans (unsecured):

- repayable within 2 years – 2,256- repayable within 3 to 5 years – 123 – 2,379 to borrowgs 28,372 31,692




26 BORROWinGS (continued)

Bank overdrats

Bankoverdraftsarerepayableondemandandbeareffectiveinterestratesrangingfrom5.88%to8.80%(2009:1.61%to3.16%)per

annum. Bank overdrats o a subsidiary amounting to approximately $10,021,000 or the nancial year ended 31 December 2010 (2009:

$4,549,000) was secured by way o assignment o proceeds rom projects, subordination o advances rom a related company in avour

o the bankers and endorsement o insurance policies in avour o one o the banks and guaranteed by a related company.

Trust receipts and bills payable

Trustreceiptsandbillspayableareunsecured,beareffectiveinterestratesrangingfrom1.55%to2.11%(2009:1.61%to3.16%)per

annum and have an average maturity period o 3 to 6 months.

Bank loans

Bankloansbearinterestatoatinginterestratesrangingfrom2.99%to7.25%(2009:7.55%to9.25%)perannum.

27 tRaDe anD OtHeR PaYaBleS

GROUP cOmPanY 2010 2009 2010 2009

$000 $000 $000 $000

no-urr: Amount due to a related company – 25,230 – –

Retention sums and accrued job cost 13,607 24,434 – –

13,607 49,664 – –

curr: Trade payables 150,239 111,936 – –


158,136 116,155 – –

Other payables

Accrued sta cost 5,456 5,978 – –

Accrued job cost 7,088 2,989 – –

Advance rom customers 1,460 556 – –

Other accruals 6,874 3,282 2,342 –

Other payables 2,296 3,269 – –

Deposits – 88 – –

Retention monies and deposits 501 492 – –

Central Provident Fund and other

dened contribution schemes 357 463 – –Loans rom holding company – 1,620 – –

Loans rom related companies – 9,000 – –

Amounts due to holding company 63 62 – –

Amounts due to related companies 2,317 13,226 – –

Interest payables 46 50 – –

Sundry payables 63 19 – –

26,521 41,094 2,342 –

Trade and other payables (current) 184,657 157,249 2,342 –

Trade and other payables (current and non-current) 198,264 206,913 2,342 –




27 tRaDe anD OtHeR PaYaBleS (continued)

GROUP cOmPanY 2010 2009 2010 2009

$000 $000 $000 $000

Add:

Borrowings (Note 26) 28,372 31,692 – –

Finance leases (Note 28) 248 732 – –

Total nancial liabilities carried at amortised cost 226,884 239,337 2,342 –

Retention sums and accrued job cost

Retentionsumspayabletosub-contractorsrelatetoamountswithheld(upto5%ofthecontractsum)undercontractualtermsfrom

amounts payable to the sub-contractors as the construction work progresses. The monies are generally released to the sub-contractors

upon the certication o completion o work and/or nalisation o contract accounts, which is typically 12 to 18 months ater physicalcompletion o the project. Non-current retention sums relate to amounts that are not payable within the next 12 months.

Non-current accrued job cost relates to costs accrued or projects applying the percentage o completion method, which are not expected

to be paid within the next 12 months.

Trade and other payables

Trade payables are non-interest bearing and are normally settled on 30 to 60 days terms.

Other payables are non-interest bearing and have an average term o six months.

Loans rom holding company

Loans rom holding company in 2009 are unsecured, non-trade in nature, and bear eective interest at foating rates ranging rom

5.38%to6.50%perannum.Theloanshavebeenrepaidin2010.

Loans rom related companies

Loans rom related companies in 2009 are unsecured, non-trade in nature and bear eective interest at foating rates ranging rom

2.50%to8.75%perannum.Theloanshavebeenrepaidin2010.

Amounts due to holding company

Amounts due to holding company are unsecured, non-trade in nature, repayable on demand, and to be settled in cash. The eective

interestrateisxedat6.50%perannumfor2010(2009:6.50%).

Amounts due to related companies

Amountsduetorelatedcompaniesareunsecured,non-tradeinnature,beareffectiveinterestxedat6.50%perannumfor2010(2009:

6.50%),repayableondemand,andaretobesettledincash.

Non-current amount due to a related company in 2009 is interest ree, unsecured and is not expected to be repayable within the next

12 months.




28 Finance leaSeS

The Group has nance leases or certain items o oce equipment, motor vehicles and plant and machinery. The leases have no renewal

option or escalation clauses included in the contracts. There are no restrictions placed upon the Group by entering into these leases.

Future minimum lease payments under nance leases together with the present value o the net minimum lease payments are as ollows:

GROUP2010 2009

$000 $000

mu Prs Minimum Present

s vu o lease value o

pys pys payments payments

Not later than one year 229 196 519 484

Later than one year but not later than ve years 58 52 244 229

More than 5 years – – 19 19

Total minimum lease payments 287 248 782 732

Less: Amounts representing nance charges (39) – (50) –

Present value o minimum lease payments 248 248 732 732

The maturity o the nance leases or years ended 31 December 2010 and 2009 are due on August 2011 and by year 2012. The average

discountrateperannumimplicitintheleasesfor2010and2009are2.5%to7.82%.

29 FUtURe caPital cOmmitmentS

GROUP

2010 2009

$000 $000

Capital expenditure contracted or as at the end o the reporting

period but not recognised in the nancial statements 743 –




30 OPeRatinG leaSe cOmmitmentS

As lessee

The Group has entered into commercial property leases or its oce premises and certain oce equipment that are non-cancellable

within a year. The leases expire at various dates until 2012 and contain provisions or rental adjustments. Some o the leases have

no renewal options or contingent rent provision include in the lease agreements but one o the leases will be renewed or a urther

term o 2 years upon expiry. There are no restrictions placed upon the lessee by entering into these leases. Operating lease payments

recognised in prot or loss in 2010 amounted to $463,000 (2009: $631,905). The Group is restricted rom subleasing leased

equipment to third parties.

Future minimum rental payable under non-cancellable operating leases at the end o the reporting period are as ollows:

GROUP

2010 2009

$000 $000

Not later than one year 1,771 1,056

Later than one year but not later than ve years 3,476 1,071

More than ve years – 8

5,247 2,135

As lessor

The Group has entered into commercial properties leases on its investment properties (Note 13). All leases include a clause to enable

revision o the rental charge on an annual basis based on prevailing market condition. These non-cancellable leases have remaining lease

terms o 1 to 3 years.

Future minimum rental receivable under non-cancellable operating leases at the end o the reporting period are as ollows:

GROUP

2010 2009

$000 $000

Not later than one year 309 283

Later than one year but not later than ve years 127 138

436 421

31 DiViDenDS PaiD

The ollowing dividends were paid:

GROUP

2010 2009

$000 $000

Declared and paid during the year:

Dividends on ordinary shares:

Interim tax-exempt (one-tier) dividend o Nil (2009: $0.27)

per ordinary shares – 4,000

Interim tax-exempt (one-tier) dividend o $22.00 (2009: Nil )

per ordinary shares 22,000 –

Interim tax-exempt (one-tier) dividend o $1.80 (2009: Ni l)

per ordinary shares 9,000 –

31,000 4,000

The dividends declared and paid are to the existing shareholders prior to the Restructuring Exercise.




32 SiGniFicant RelateD PaRtY tRanSactiOnS

An entity or individual is considered a related party o the Group or the purposes o the nancial statements i: (i) it possesses the ability

(directly or indirectly) to control or exercise signicant infuence over the operating and nancial decisions o the Group or vice versa; or

(ii) it is subject to common control or common signicant infuence.

The ollowing signicant transactions between the Group and related parties took place at terms agreed between the parties during the

year ended 31 December 2010.

() S d purhs o goods d srvs

GROUP

2010 2009

$000 $000

Revenue rom construction contracts:

- related companies 163,140 57,394

- associates 65,543 35,470

Rental income rom related companies 20 –

Interest income:

- holding company – 118

- related companies 8 7

- associates 3,106 2,122

Interest expense:

- holding company (67) (156)- related companies (293) (432)

Management ees and consultancy services expenses:

- holding company (807) (734)

- related companies (932) (678)

Rental expenses:

- holding company (139) (232)

- related companies (13) (86)

Dividends paid:

- holding company (9,000) –

- related companies (18,700) (3,400)

Other purchases rom related companies (1,105) (117)

(b) copso o ky g xuvs

GROUP

2010 2009

$000 $000

Short-term employee benets 2,826 1,655

Central Provident Fund 28 31

Total compensation paid to key management executives 2,854 1,686




32 SiGniFicant RelateD PaRtY tRanSactiOnS (continued)

(b) copso o ky g xuvs (continued)

GROUP

2010 2009

$000 $000

Comprise amounts paid to:

- Directors o the Company 1,911 925

- Other key management executives 943 761

2,854 1,686

The remuneration o key management personnel is determined by the Directors having regards to the perormance o individuals

and market trends.

Details o the share-based payment are disclosed in Note 3.7. The share-based payment scheme has expired in 2009 and the

Company currently does not have other share option scheme.

Directors’ ees amount to $15,000 (2009:Not applicable)

33 Financial RiSK manaGement OBJectiVeS anD POlicieS

The Group’s principal nancial instruments comprise bank loans and overdrats, cash and bank balances. The main purpose o these

nancial instruments is to raise nance or the Group’s operations. The Group has various other nancial assets and liabilities such as

trade receivables and trade payables, which arise directly rom its operations.

The Group is exposed to nancial risks arising rom its operations and the use o nancial instruments. The main risks arising rom theGroup’s nancial instruments are credit risk, market price risk, oreign currency risk, interest rate risk and liquidity risk.

The ollowing sections provide details regarding the Group’s exposure to the above-mentioned nancial risks and the objectives, policies

and processes or the management o these risks.

crd rsk

Credit risk is the risk o loss that may arise on outstanding nancial instruments should a counterparty deault on its obligations. Credit

risk arising rom the inability o a customer to meet the terms o the Group’s nancial instrument contracts is generally limited to the

amounts. The Group’s exposure to credit risk arises primarily rom trade and other receivables. For other nancial assets (including

investment securities and cash and bank balances), the Group minimises credit risk by dealing exclusively with high credit rating

counterparties.

It is the Group’s policy to sell to a diverse group o customers who have been assessed or their credit worthiness to reduce credit risk.

The Group has set up ormal Business Unit Credit Committees or some o the subsidiaries to oversee the management o the Group’s

debts.

Exposure to credit risk

At the date o the statements o nancial position, the Group’s maximum exposure to credit risk is represented by the carrying amount

o trade and other receivables recognised in the statements o nancial position. No other nancial assets carry a signicant exposure

to credit risk.




33 Financial RiSK manaGement OBJectiVeS anD POlicieS (continued)

Credit risk concentration profle

The Group determines concentrations o credit risk by monitoring the country and industry sector prole o its trade and other receivables

on an on-going basis. The credit risk concentration prole o the Group’s trade and other receivables at the date o the statements o

nancial position is as ollows:

GROUP

2010 2009

% o %of

$000 o $000 total

By oury

Singapore 149,270 83 136,544 79

Brunei 27,049 15 23,691 14

Malaysia 1,899 1 9,959 6

China 2,256 1 1,461 1

Vietnam 161 – 230 –

180,635 100 171,885 100

By dusry sors

Construction 162,424 90 141,810 83

Engineering 7,389 4 18,798 11

Building materials and equipment 10,822 6 11,277 6

180,635 100 171,885 100

Financial assets that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment record with the Group.Cash and bank balances and investment securities that are neither past due nor impaired are placed with or entered into with reputable

nancial institutions or companies with high credit ratings and no history o deault.

Financial assets that are either past due or impaired

Inormation regarding nancial assets that are either past due or impaired is disclosed in Note 19 (Trade and other receivables).

mrk pr rsk

Market price risk is the risk that the air value or uture cash fows o the Group’s nancial instruments will fuctuate because o changes

in market prices (other than interest or exchange rates). The Group is exposed to equity price risk arising rom its investment in quoted

equity instruments. These instruments are quoted on the SGX-ST in Singapore and are classied as held-or-trading nancial assets.

It is not the Group’s policy to actively trade in quoted equity instruments. The Group’s holdings o the quoted equity instrument that are

classied as held-or-trading investments (Note 17) arose rom the settlement o trade debts rom its customer by way o shares issued.

Sensitivity analysis or equity price risk

At31December2010ifthequotedequityinstrumentslistedintheSGX-SThadbeen5%,higher/lowerwithallothervariablesheld

constant, the Group’s prot net o tax would have been $481,000 (2009: $454,000) higher/lower arising as a result o higher/lower air

value gains on held-or-trading instruments in equity instruments respectively.





Forg urry rsk

The Group has exposure to oreign exchange risk as a result o transactions denominated in a currency other than the respective

functionalcurrenciesofGroupentities,arisingfromnormaltradingactivities.Approximately1%(2009:1%)oftheGroup’ssalesis

denominated in currencies other than the respective unctional currencies o Group entities.

TheGrouphasforeigncurrenciesexposuremainlyinUnitedStatesdollars(“USD”)andVietnameseDong(“VND”)initscashandbank

balances, trade receivables, trade payables, overdrats and trust receipts and bills payable.

It is in the Group’s policy to hedge these risks through oreign currency orward contracts, to protect against volatility associated with

oreign currency purchases o materials and other assets and liabilities created in the normal course o business. The Group does not

use oreign currency orward contracts or trading purposes. As at 31 December 2010, the Group did not enter into oreign currency

orward contracts as the exposure o the oreign currency risk is inconsequential.

In addition to transactional exposure, the Group is also exposed to currency translation risk arising rom its net investments in oreign

operations. The Group’s net investments in oreign subsidiaries are not hedged as currency positions are considered to be long-term in

nature.

Sensitivity analysis or oreign currency risk

ThefollowingtabledemonstratesthesensitivityoftheGroup’sprotnetoftaxtoareasonablypossiblechangeintheUSDandVND

exchange rate against SGD or the year ended 31 December 2010, with all other variables held constant.

GROUP

Pro o x

2010 2009

$000 $000

USD/SGD -strengthened5% -32 -11

-weakened5% 32 11

VND/SGD -strengthened5% 18 3

-weakened5% -18 -3

irs r rsk

Interest rate risk is the risk that the air value or uture cash fows o the Group’s nancial instruments will fuctuate because o changes

in market interest rates. The Group’s interest rate exposure relates primarily rom their loans and borrowings. The Group’s loans at

foating rate given to related parties orm a natural hedge or its non-current and current foating rate bank loans. Majority o the Group’s

nancial assets and liabilities are at foating rates and are contractually repriced at intervals o 1, 2, 3 or 6 months (2009: 1, 2, 3 or 6

months) rom the date o the statements o nancial position.

The Group’s policy is to manage interest costs using combination o xed and foating rate debts taking into consideration the unding

requirements o the Group.

Sensitivity analysis or interest rate risk

At 31 December 2010, i SGD interest rates had been 75 basis points lower/higher with all other variables held constant, the Group’s

prot net o tax would have been $64,000 (2009: $90,000) higher/lower arising mainly as a result o lower/higher interest expense on

loans and borrowings respectively.





lqudy rsk

Liquidity risk is the risk that the Group will encounter diculty in meeting nancial obligations due to shortage o unds. The Group’s

exposure to liquidity risk arises primarily rom mismatches o the maturities o nancial assets and liabilities. The Group’s objective is to

maintain a balance between continuity o unding and fexibility through the use o stand-by credit acilities.

The Group’s liquidity risk management policy is to monitor its net operating cash fows and maintain an adequate level o committed

banking acilities through regular review o its working capital requirements. For the year ended 31 December 2010 approximately

100%(2009:92%)oftheGroup’sborrowings(Note26)willmatureinlessthanoneyearbasedonthecarryingamountreectedinthe

nancial statements.

The table below summarises the maturity prole o the Group’s nancial assets and liabilities at the date o the statements o nancial

position based on contractual undiscounted repayment obligations.

2010 1 yr 1 o Ovr

or ss 5 yrs 5 yrs to

$000 $000 $000 $000

F sss:

Trade and other receivables 130,260 50,375 – 180,635

Other investments 9,625 – – 9,625

Cash and bank balances 62,485 – – 62,485

Total undiscounted nancial assets 202,370 50,375 – 252,745

F bs:

Trade and other payables 184,657 13,607 – 198,264Borrowings 28,372 – – 28,372

Finance leases 196 52 – 248

Total undiscounted nancial liabilities 213,225 13,659 – 226,884

Total net undiscounted nancial (liabilities)/assets (10,855) 36,716 – 25,861

2009 1 yr 1 o Ovr 5

or ss 5 yrs yrs to

$000 $000 $000 $000

F sss:

Trade and other receivables 106,904 64,981 – 171,885

Other investments 9,087 361 – 9,448

Cash and bank balances 11,588 – – 11,588

Total undiscounted nancial assets 127,579 65,342 – 192,921

F bs:

Trade and other payables 157,249 49,664 – 206,913

Borrowings 29,313 2,379 – 31,692

Finance leases 484 229 19 732

Total undiscounted nancial liabilities 187,046 52,272 19 239,337

Total net undiscounted nancial (liabilities)/assets (59,467) 13,070 (19) (46,416)




34 FaiR ValUe OF Financial inStRUmentS

(A) Fair value o fnancial instruments that are carried at air value

The ollowing table shows an analysis o nancial instruments carried at air value by level o air value hierarchy:

2010

$000

Quoted

prices in

active Signicant

markets or other Signicant

identical observable unobservable

instruments inputs inputs Total(Level 1) (Level 2) (Level 3)

Financial assets:

Held-or-trading investments (Note 17)

- Equity instruments (quoted) 9,625 – – 9,625

At 31 December 2010 9,625 – – 9,625

2009

$000

Quoted

prices in

active Signicant

markets or other Signicant

identical observable unobservable

instruments inputs inputs Total

(Level 1) (Level 2) (Level 3)

Financial assets:

Held-or-trading investments (Note 17)

- Equity instruments (quoted) 9,087 – – 9,087

At 31 December 2009 9,087 – – 9,087

Fair value hierarchy

The Group classies air value measurement using a air value hierarchy that refects the signicance o the inputs used in making

the measurements. The air value hierarchy has the ollowing levels:

• Level1–Quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities

• Level2–InputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetorliability,eitherdirectly

(i.e. as prices) or indirectly (i.e. derived rom prices), and

• Level3–Inputsfortheassetorliabilitythatarenotbasedonobservablemarketdata(unobservableinputs)

Determination o air value

Quoted equity instruments (Note 17): Fair value is determined directly by reerence to the published market bid price at the date

o statements o nancial position.




34 FaiR ValUe OF Financial inStRUmentS (continued)

(B) Fair value o fnancial instruments by classes that are not carried at air value and whose carrying amounts are reasonable

approximation o air value

Management has determined that the carrying amounts o cash and bank balances, current trade and other receivables, current

trade and other payables, loans and amounts due to/rom holding company and related companies and borrowings, based on their

notional amounts, reasonably approximate their air values because these are mostly short-term in nature or that they are foating

rate instruments that are repriced to market interest rates on or near the date o the statements o nancial position.

(C) Fair value o fnancial instrument by classes that are not carried at air value and whose carrying amounts are not

reasonable approximation o air value.

The air value o nancial assets and liabilities by classes that are carried at air value and whose carrying amounts are not reasonable

approximation o air value are as ollows:

GROUP

2010 2009

crryg Fr Carrying Fair

ou vu amount value

$000 $000 $000 $000

F sss:

Loans receivable rom associates 27,845 24,782 34,951 31,106

Retention sums 20,213 17,989 30,030 26,727

Available-or-sale

- unquoted equity shares – – 361 #

F bs:

Amount due to a related company – – 25,230 *

Retention sums 13,607 12,110 24,434 21,746

Finance leases 248 287 732 782

# Investments in unquoted equity shares carried at cost

Fair value inormation has not been disclosed or the Group’s investment in unquoted equity shares that are carried at cost because

the air value cannot be measured reliably. The unquoted equity shares represent ordinary shares in Lysaght Corrugated Pipe (S) Pte

Ltd that is not quoted in any market. The unquoted equity investment has been disposed o during the year.

* Amount due to a related company

Amount due to a related company have no xed term o repayment. Accordingly the air value cannot be measured reliably as the

timing o the uture cash fows cannot be determined.

Determination o air value

Obligations under retention sums and nance leases above are estimated by discounting expected uture cash fows at market

incremental lending rate or similar types o lending or leasing arrangements at the statements o nancial position.




35 caPital manaGement

The Group’s objectives when managing capital are to saeguard the Group’s ability to continue as a going concern and to maintain an

optimal capital structure so as to maximise shareholder value.

The Group manages its capital structure and may make adjustment to it, in light o changes in economic conditions. In order to manage

or adjust the capital structure, the Group may obtain new borrowings or reduce its borrowings. No changes were made in the objectives,

policies and processes during the years ended 31 December 2010 and 2009.

The Group monitors capital using debt to equity ratio.

GROUP

2010 2009

$000 $000

Borrowings (Note 26) 28,372 31,692

Trade and other payables (Note 27) 198,264 206,913

Finance lease (Note 28) 248 732

Less : Cash and bank balances (Note 23) (62,485) (11,588)

Net debt 164,399 227,749

Equity, attributable to owners o the parent 88,756 14,686

Debt to equity 1.9 15.5

36 SeGment inFORmatiOn

For management purposes, the Group is organised into business units based on their products and services, and the reportable operating

segments are as ollows:

(i) Construction

Construction and civil engineering contractor in the construction o residential, industrial and commercial buildings or both private

and public sectors.

(ii) Engineering

Provides a wide spectrum o building engineering services encompassing mechanical and electrical engineering.

(iii) Building materials and equipment

Provide rental o generators, transormers and air compressors, power packages, load testing systems and metal orms; and sales o

used metal orms, industrial equipment and spare parts and wholesale distribution o building materials such as tiles to the mining,

manuacturing, shipbuilding, ship repair, and marine industries.

Management monitors the operating results o its business units separately or the purpose o making decisions about resource allocation

and perormance assessment. Segment perormance is evaluated based on operating prot or loss.

Allocation basis and transer pricing

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a

reasonable basis.

Segment accounting policies are the same as the policies described in Note 3.28. The Group generally accounts or inter-segment salesand transers as i the sales or transers were to third parties at current market prices. Segment revenue, expenses and results include

transers between business segments. These transers are eliminated on consolidation.




36 SeGment inFORmatiOn (continued)

() Busss sgs

(i) The ollowing tables present revenue and prot inormation regarding industry segments or the years ended 31 December 2010

and 2009 and certain asset and liability inormation regarding industry segments as at 31 December 2010 and 2009:

Budgrs corpor

d srvscosruo egrg qup d ohrs eo to

$000 $000 $000 $000 $000 $000

Yr dd

31 Dbr 2010

Sg rvu

Sales to external customers 324,477 31,215 26,161 − − 381,853

Inter-segment sales 3,975 34,237 3,584 − (41,796) −

to rvu 328,452 65,452 29,745 − (41,796) 381,853

Sg rsus 37,105 4,633 5,841 (895) − 46,684

Finance costs (1,428)

Interest income 3,147

Share o results o associates 6,557 − − − − 6,557

Prot beore tax 54,960

Income tax expense (9,923)

Prot net o tax 45,037

Sg sss 245,239 37,077 48,989 2,625 − 333,930

Investment in associates 10,667 − − − − 10,667

Total assets 344,597

Sg bs 205,349 27,480 20,361 2,342 − 255,532

Ohr sg oro: Capital expenditure 985 6 14,068 − − 15,059

Allowance or doubtul

trade receivables − 101 − − − 101

Allowance or doubtul

other receivables 302 − − − − 302

Allowance or doubtul tradereceivables written back − 53 13 − − 66

Allowance or inventory obsolescence − − 247 − − 247

Allowance or inventory obsolescence

written back − − 194 − − 194

Amortisation o receivables

and payables 389 − − − − 389

Depreciation o property,

plant & equipment 200 15 4,129 − − 4,344

Gain on air value adjustment

on held-or-trading investments − 509 30 − − 539

Gain on disposal o

available-or-sale investment − − 869 − − 869

Gain on disposal o property, plant

and equipment 178 − 29 − − 207Gain on air value adjustment

on investment properties 500 − − − − 500





() Busss sgs (continued)

Budg

rs

d

cosruo egrg qup eo to

$000 $000 $000 $000 $000

Yr dd

31 Dbr 2009

Sg rvu

Sales to external customers 283,679 87,814 23,308 − 394,801

Inter-segment sales − 7,371 1,178 (8,549) −

to rvu 283,679 95,185 24,486 (8,549) 394,801

Sg rsus 13,602 14,112 4,408 − 32,122

Finance costs (2,076)

Interest income 2,276

Share o results o associate 2,795 − − − 2,795

Prot beore tax 35,117

Income tax expense (4,079)

Prot net o tax 31,038

Sg sss 206,467 29,030 37,042 − 272,539

Investment in associate 3,731 − − − 3,731Total assets 276,270

Sg bs 177,085 58,318 20,622 − 256,025

Ohr sg oro:

Capital expenditure 1,334 − 6,979 − 8,313

Allowance or doubtul trade receivables 103 43 150 − 296

Allowance or doubtul other receivables 782 − − − 782

Allowance or doubtul trade receivables

written back − − 112 − 112

Allowance or inventory obsolescence

written back − − 7 − 7

Depreciation o property, plant & equipment 278 18 3,741 − 4,037

Gain on air value adjustment on

held-or-trading investments − 5,973 103 − 6,076

Gain on disposal o property, plant

and equipment 24 − 203 − 227

Gain on air value adjustment on

investment properties 490 − − − 490





(b) Gogrph sgs

Revenue and non-current assets inormation based on the geographical location o customers and assets respectively are as ollows:

Rvu no-urr sss

2010 2009 2010 2009

$000 $000 $000 $000

Singapore 312,119 308,361 33,386 30,821

Other ASEAN countries 61,531 81,807 2,190 1,909

Other Asian countries 8,203 4,633 6,275 4,508

381,853 394,801 41,851 37,238

Non-current assets inormation presented above consist o property, plant and equipment and investment properties as presented

in the statements o nancial position.

Inormation about major customers

Revenue rom three major customers amount to $228,683,000 (2009: $92,864,000) arising rom construction services rendered by

the construction segment. These three customers are related parties within the United Engineers Group.

37 eVentS aFteR Date OF Statement OF Financial POSitiOn

On 10 March 2011, the Group’s wholly-owned subsidiary, Greatearth Construction Pte Ltd signed an option or the sale o its investment

properties at 99 and 101 Tanjong Pagar Road Singapore, or a total cash consideration o $10.1 mil lion to an unrelated party. The option

is to be exercised by the purchaser not later than 11 April 2011. Once exercised, the sale is expected to be completed by 30 June 2011.

38 aUtHORiSatiOn OF Financial StatementS

The nancial statements o the Company or the year ended 31 December 2010 were authorised or issue in accordance with a

resolution o the directors on 18 March 2011.




Number o Fully Issued and Paid up Shares (excluding treasury shares) : 270,000,000Amount o Issued and Paid Up Shares : $89,614,003

Class o Shares : Ordinary Shares

VotingRights :1votepershare

Treasury Shares : Nil

DiStRiBUtiOn OF SHaReHOlDinGS:

Sz o Shrhodgs no. o Shrhodrs % no. o Shrs %

1 - 999 0 0.00 0 0.00

1,000 - 10,000 879 68.19 4,681,000 1.73

10,001 - 1,000,000 397 30.80 36,194,000 13.41

1,000,001 and above 13 1.01 229,125,000 84.86

TOTAL 1,289 100.00 270,000,000 100.00

tWentY laRGeSt SHaReHOlDeRS

n o Shrhodrs no. o Shrs Hd %

1 UES HOLDINGS PTE. LTD. 148,473,914 54.99

2 UNITED ENGINEERS LIMITED 35,665,212 13.21

3 CHUA HOCK TONG 15,860,874 5.87

4 2G CAPITAL PTE LTD 7,000,000 2.59

5 BANK OF SINGAPORE NOMINEES PTE LTD 4,860,000 1.80

6 HSBC (SINGAPORE) NOMINEES PTE LTD 3,800,000 1.41

7 JEREMY LEE SHENG POH 3,154,000 1.178 ASDEW ACQUISITIONS PTE LTD 2,700,000 1.00

9 LIM TECK CHENG 2,000,000 0.74

10 F H LEE HOLDINGS PTE LTD 1,500,000 0.56

11 OCBCSECURITIESPRIVATELTD 1,448,000 0.54

12 UNITEDOVERSEASBANKNOMINEESPTELTD 1,413,000 0.52

13 CHANG WEI CHIAN BENJAMIN 1,250,000 0.46

14 LIM CHYE HUAT @ BOBBY LIM CHYE HUAT 900,000 0.33

15 TAN SEE TEE 849,000 0.31

16 KOR YONG KOO 830,000 0.31

17 REDROCK CAPITAL PTE LTD 600,000 0.22

18 CHAN BOON HUI 500,000 0.19

19 CHEW LEOK CHUAN 500,000 0.19

20 HO LEE GROUP PTE LTD 500,000 0.19

233,804,000 86.60

StatiSticS OF SHaReHOlDinGSas 14 mrh 2011



n Dr irs Dd irsno. o Shrs % no. o Shrs %

Chua Hock Tong 15,860,874 5.87 − −

United Engineers Limited1 35,665,212 13.21 148,473,914 54.99

UES Holdings Pte. Ltd.1 148,473,914 54.99 − −

no:1 UES Holdings Pte. Ltd. (“UES Holdings”) is a wholly-owned subsidiary o United Engineers Limited (“UEL”). Accordingly, UEL is deemed to be

interested in 148,473,914 shares held by UES Holdings.

PUBlic FlOat

Based on the Register o Shareholders as at 14 March 2011, and to the best knowledge o the Company, the percentage o shareholding

heldinthehandsofthepublicisapproximately25.75%.Accordingly,theCompanycomplieswithRule723oftheListingManual.

SUBStantial SHaReHOlDeRSas 14 mrh 2011



nOtice iS HeReBY GiVen tHat the Annual General Meeting o UE E&C Ltd. (the “Company”) will be held on Thursday, 28 April 2011 at3.30 p.m. at The Auditorium, 12 Ang Mo Kio Street 64, UE BizHub CENTRAL, Singapore 569088 or the purpose o transacting the ollowing

business:

ORDinaRY BUSineSS

1. To receive and adopt the Directors’ Report and Audited Financial Statements or the nancial period rom 9 March 2010 (Date o

Incorporation) to 31 December 2010 and the Auditors' Report thereon. Rsouo 1

2. To approve payment o Directors' ees o $15,000 or the nancial period rom 9 March 2010 to 31 December 2010. (2009: Not

applicable). Rsouo 2

3. To re-elect the ollowing Directors, each o whom retires pursuant to Article 97 o the Company's Articles o Association and, being

eligible, oers himsel or re-election:

(i) Mr Norman Ip Ka Cheung Rsouo 3

(ii) Mr Chua Hock Tong Rsouo 4

(iii) Mr Kwan Chiew Choi [see explanatory note (a)] Rsouo 5

(iv) Mr Pok Soy Yoong [see explanatory note (b)] Rsouo 6

(v) Mr Tan Soo Kiang [see explanatory note (c)] Rsouo 7

(vi) Mr Jackson Chevalier Yap Kit Siong Rsouo 8

4. To re-appoint Ernst & Young LLP as Auditors and to authorise the Directors to x their remuneration. Rsouo 9

5. To transact any other business which may properly be transacted at an Annual General Meeting. Rsouo 10

SPecial BUSineSS

To consider and, i thought t, to pass the ollowing resolution as an Ordinary Resolution:

6. “That: Rsouo 11

(i) approval be and is hereby given, or the purposes o Chapter 9 o the Listing Manual ("Chapter 9") o the Singapore Exchange

Securities Trading Limited (“SGX-ST”), or the Company, its subsidiaries and associated companies that are considered to be

"entities at risk" (as that term is used in Chapter 9), or any o them, to enter into any o the transactions alling within the types

o Mandated Interested Person Transactions described in Appendix A o the Company's letter to shareholders dated 12 April 2011

(the "Letter"), with any party who is o the class o Mandated Interested Persons described in Appendix A o the Letter, provided

that such transactions are made on normal commercial terms and in accordance with the review procedures or Mandated

Interested Person Transactions (the “IPT Mandate”);

(ii) the IPT Mandate shall, unless revoked or varied by the Company in general meeting, continue in orce until the conclusion o the

next Annual General Meeting o the Company; and

(iii) the Directors o the Company be and are hereby authorised to complete and do all such acts and things (including, without

limitation, executing all such documents as may be required) as they may consider expedient or necessary or in the interests o the

Company to give eect to the IPT Mandate and this Resolution.” [see explanatory note (d)]

By Ordr o h Bord

Tan Ching Chek and Lo Swee Oi

Joint Company Secretaries

Dated: 12 April 2011

nOtice OF annUal GeneRal meetinG



nOteS:

1) A member o the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint not more than two proxies

to attend and vote on his behal. A proxy need not be a member o the Company.

2) I the appointer is a corporation, the instrument appointing a proxy must be under seal or the hand o its duly authorised ocer or

attorney.

3) The instrument appointing a proxy must be deposited at the Company’s Registered Oce not less than 48 hours beore the time set or

the Annual General Meeting or any adjournment thereo.

eXPlanatORY nOteS

(a) Mr Kwan Chiew Choi is a member o the Audit Committee and is considered an independent Director or the purposes o Rule 704(8)

o the Listing Manual.

(b) Mr Pok Soy Yoong is the Chairman o the Audit Committee and is considered an independent Director or the purposes o Rule 704(8)

o the Listing Manual.

(c) Mr Tan Soo Kiang is a member o the Audit Committee and is considered an independent Director or the purposes o Rule 704(8) o the

Listing Manual.

(d) The ordinary resolution in Resolution 11, i passed, will renew, eective until the conclusion o the next Annual General Meeting, the

IPT Mandate to enable the Company, its subsidiaries and associated companies which are considered "entities at risk" to enter in the

ordinary course o business into certain types o interested person transactions with specic classes o the Company's interested persons.

Particulars o the IPT Mandate are set out in the Company's letter to shareholders dated 12 April 2011 accompanying the Annual Report

2010.

nOtice OF annUal GeneRal meetinG



This page has been intentionally let blank.



(Company Registration No. 201005048D)

(Incorporated In the Republic o Singapore)

PROXY FORm

I/We (Name) ______________________________________________, NRIC/Passport No./Co. Regn. No.: _______________________________

o (Address) ____________________________________________________________________________________________________________

being a member/members o UE E&C LTD. (the “copy”) hereby appoint:

as my/our proxy/proxies to attend and to vote or me/us on my/our behal and, i necessary, to demand a poll, at the Annual General Meeting

o the Company (the “mg”) to be held on Thursday, 28 April 2011 at 3.30 p.m. at The Auditorium, 12 Ang Mo Kio Street 64, UE

BizHub CENTRAL, Singapore 569088 and at any adjournment thereo. I/We direct my/our proxy/proxies to vote or or against the resolutions

to be proposed at the Meeting as indicated hereunder. I no specic direction as to voting is given, the proxy/proxies will vote or abstain rom

voting at his/their discretion, as he/they will on any other matter arising at the Meeting.

Dated this _________ day o ___________________ 2011.

___________________________________________

Signature(s) o Member(s)/Common Seal

name aDDReSSnRic/PaSSPORt

nUmBeR

PROPORtiOn OF

SHaReHOlDinGS (%)

and/or (delete as appropriate)

name aDDReSSnRic/PaSSPORt

nUmBeR

PROPORtiOn OF

SHaReHOlDinGS (%)

nO. ORDinaRY ReSOlUtiOnS FOR aGainSt

ORDinaRY BUSineSS

1. Adoption o Reports and Audited Financial Statements

2. Approval o Directors’ Fees

3. Re-election o Mr Norman Ip Ka Cheung

4. Re-election o Mr Chua Hock Tong

5. Re-election o Mr Kwan Chiew Choi

6. Re-election o Mr Pok Soy Yoong

7. Re-election o Mr Tan Soo Kiang

8. Re-election o Mr Jackson Chevalier Yap Kit Siong

9. Re-appointment o Auditors

10. Any other business

SPecial BUSineSS

11. Renewal o the General Mandate or Interested Person Transactions

imPORtant: PleaSe ReaD nOteS OVeRleaF

to no. o Shrs Hd

imPORtant1. For investors who have used their cPF os to buy Ue e&c ld. shares, this Annual

Report is sent to them at the request o their CPF Agent Banks and is sent solely FORINFORMATION ONLY.

2. This Proxy Form is o vd or us by cPF vsors, and shall be ineective or allintents and purposes i used or purported to be used by them.

3. CPFinvestorswhowishtoattendtheAnnualGeneralMeetingasOBSERVERSmustsubmit their requests through their respective Agent Banks so that their Agent Banksmay register, in the required ormat with the Company Secretary, by the time ramespecied. (ag Bks: Ps s no 9 o rqurd or). ay vogsruos us so b subd o hr ag Bks wh h

r spd o b h o vo o h cPF vsor’s bh.



nOteS

1. A member should insert the total number o shares held. I the member has shares entered against his name in the Depository Register

(as dened in Section 130A o the Companies Act, Cap. 50 o Singapore), he should insert that number o shares. I the member has

shares registered in his name in the Register o Members o the Company, he should insert that number o shares. I the member has

shares entered against his name in the Depository Register and registered in his name in the Register o Members, he should insert the

aggregate number o shares. I no number is inserted, this instrument appointing a proxy or proxies will be deemed to relate to all shares

held by the member.

2. A member o the Company entitled to attend and vote at the Meeting is entitled to appoint one or two proxies to attend and vote in

his stead. A proxy need not be a member o the Company.

3. Where a member appoints two proxies, the appointments shall be invalid unless he species the proportion o his shareholding

(expressed as a percentage o the whole) to be represented by each proxy.

4. Completion and return o this instrument appointing a proxy shall not preclude a member rom attending and voting at the Meeting.

Any appointment o a proxy or proxies shall be deemed to be revoked i a member attends the Meeting in person, and in such event,

the Company reserves the right to reuse to admit any person or persons appointed under the instrument o proxy, to the Meeting.

5. The instrument appointing a proxy or proxies must be deposited at the Company’s registered oce at 12 Ang Mo Kio Street 64, #03-13

UE BizHub CENTRAL, Singapore 569088 not less than 48 hours beore the time appointed or the Meeting.

6. The instrument appointing a proxy or proxies must be under the hand o the appointor or o his attorney duly authorised in writing.

Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or

under the hand o its attorney or a duly authorised ocer.

7. Where an instrument appointing a proxy is signed on behal o the appointor by an attorney, the letter or power o attorney or a duly

certied copy thereo must (ailing previous registration with the Company) be lodged with the instrument o proxy, ailing which theinstrument may be treated as invalid.

8. A corporation which is a member may authorise by resolution o its directors or other governing body such person as it thinks t to act

as its representative at the Meeting, in accordance with section 179 o the Companies Act, Chapter 50 o Singapore.

9. Agent Banks acting on the request o CPF Investors who wish to attend the Meeting as observers are requested to submit in writing, a

list o details o the Investors’ names, NRIC/Passport numbers, addresses and numbers o shares held. The list, signed by an authorised

signatory o the Agent Bank, should reach the Company Secretary, at the registered oce o the Company not later than 48 hours

beore the time appointed or the Meeting.

GeneRal

The Company shall be entitled to reject the instrument appointing a proxy or proxies i it is incomplete, improperly completed, illegible or

where the true intentions o the appointor are not ascertainable rom the instructions o the appointor specied in the instrument appointing

a proxy or proxies. In addition, in the case o shares entered in the Depository Register, the Company may reject any instrument appointing a

proxy or proxies lodged i the member, being the appointor, is not shown to have shares entered against his name in the Depository Register

as at 48 hours beore the time appointed or holding the Meeting, as certied by The Central Depository (Pte) Limited to the Company.



Ue e&c LtD.

12 Ang Mo Kio Street 64

#03-13 UE BizHub CENTRAL

Singapore 569088

Tel: (65) 6818 8666

Fax: (65) 6818 8682

Company Registration No: 201005048D

ueec ar sgx

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