UEM Sunrise : UEMS - Appendix I to Minutes of 15th AGM

RESPONSES TO QUESTIONS RECEIVED

IN RELATION TO THE 15TH ANNUAL GENERAL MEETING ("AGM") OF THE COMPANY

UEM SUNRISE BERHAD ("THE COMPANY")

200801028815 (810144-W)

1. Questions received from Minority Shareholders Watch Group ("MSWG")
   - Operational/Financial Matters

Question 1

Setia Haruman Sdn. Bhd., ("SHSB"), the Group's associate company reported a much higher revenue of RM98.5 million in FY2022 as compared to RM62.5 million in FY2021.

However, SHSB reported a much lower profit before tax, ("PBT") of RM11.6 million in FY2022 as compared to PBT of RM53.8 million in FY2021. (Page 315 of IAR).

1. Why did SHSB record a higher revenue but a lower PBT in FY2022?
2. What is the outlook of SHSB in FY2023?

Response

1. In FY2021, SHSB recognised a one-off gain on disposal of certain assets, which was recognised under other income. For FY2022, the profit margin normalised without the one-off gain.
2. SHSB is expected to contribute positively to our FY2023 results mainly from its ongoing land monetisation exercise.

Minutes of 15th AGM - Appendix I

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Question 2

Nusajaya Tech Park Sdn. Bhd., ("NTPSB"), the Group's joint-venture company reported a much higher profit of RM31.3 million in FY2022 as compared to a loss of RM0.7 million in FY2021. (Page 320 of IAR).

1. Why did NTPSB report a much higher profit in FY2022?
2. Can NTPSB continue to record high profit in FY2023? If not, why?

Response

1. The profit was mainly contributed by land sales which materialised in FY2022.
2. There has been strong interest from investors for the industrial properties within the Nusajaya Tech Park. NTPSB is in the process of completing the transaction to acquire a further 234.5 acres of lands for the extension of the Nusajaya Tech Park development (as per our announcement to Bursa Malaysia dated 15 December 2022). As such, we expect NTPSB to continue to contribute positively to our FY2023 results.

Minutes of 15th AGM - Appendix I

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Question 3

Total Sales in 2022 from digital platform has decreased to 23% in FY2022 from 51% in FY2021. (Page 53 of IAR).

1. What were the reasons for the lower sales from the digital platform in FY2022?
2. Is the lower trend expected to continue in FY2023? If yes, why?
3. What are the plans to further improve the sales from the digital platform in FY2023.

Response

1. During the pandemic, leads were primarily generated through digital channels. Sales from these channels were proportionately higher. As the country progressed into endemicity, prospects returned to offline channels, word of mouth (recommendations and/or referrals) with preference towards face-to-face interactions. Visits to show units increased. Notwithstanding the trend, digital channels remain crucial especially in terms of targeted lead generation and will continue to be an essential component of our marketing strategy.
2. We do not expect the lower trend to continue this year. We look forward to a more balanced distribution of sales between our online and offline channels. As we continuously strive to enhance and improve our online customer journey, we anticipate to see an increase in online reservations over time.
3. We have conducted a thorough review of our online customer journey and have identified several enhancements that are currently in our pipeline. These include:
4. • implementation of online forms i.e. online quotations;
   • improvements to our loan checking journey and process; and
   • the introduction of online reservation capabilities via our official website.

Minutes of 15th AGM - Appendix I

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Question 4

In early 2022, The Group signed up with Paddle Battle, which is interested in leasing up to 1,680 square meters (18,083 square feet) of the Group's retail area on the Lower Ground Floor of Aurora Melbourne Central. Paddle Battle is expected to be operational in the second half of 2023. (Page 126 of IAR).

1. What is the expected yearly rental income from leasing the Lower Ground Floor of Aurora Melbourne Central?
2. How long is the lease agreement with Paddle Battle?

Response

1. As per the lease agreement, the gross rental for the area is AUD1.3 million per annum.
2. The lease term is for fifteen (15) years with a further term of three (3) years.

Minutes of 15th AGM - Appendix I

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Question 5

The Group has sold industrial plots in phase 3 of SiLC and recognised RM173.7 million (33 industrial plots) for FY2022 and sell non-strategic lands in Mersing, Johor and Seputeh, Kuala Lumpur, as well as a few pocket lands amounting to RM133.4 million also in FY2022. (Page 85 of IAR).

1. Please explain what strategic land sales are and its difference from sales of development land?
2. Which of the land sales mentioned above is considered strategic land sales and sales of development land respectively?
3. What is the financial impact on the Group arising from the disposal of SiLC land, lands in Mersing, Seputeh and a few pockets of lands respectively?

Response

1. Strategic lands are lands that have been identified as tactical in nature in terms of location and connectivity, within the ambit of a particular development's master plan. The Group resorted to selling strategic lands to entities and/or partners to leverage on their capabilities and resources in conforming to our township development master plan.
   Development lands are lands which have been improved with the appropriate infrastructure connectedness and further subdivided into smaller plots with the intention of selling them to interested buyers and/or investors.
2. An example of a strategic land sale is the sale of the 234.5 acres of land to NTPSB as mentioned in our answer for question 2(b) above.
   The sale of the industrial plots in phase 3 of SiLC referred to in the question above is an example of a development land sale.
3. The total revenue from the sale of strategic and development lands amounted to RM307.09 million, which generated gross profits of RM65.39 million in FY2022. Further information is detailed out in Note 3 and 4, on pages 298 and 299 of the IAR.

Minutes of 15th AGM - Appendix I

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