Union Gas : Annual Report 2021

Table of Contents

• 01 Corporate Profile

• 02 Our Business Segments

• 03 Message to Shareholders

• 06 Board of Directors

• 09 Key Executives

• 11 Financial Highlights

• 12 Operations and Financial Review

• 16 Corporate Structure

• 17 Sustainability Report

• 31 Financial Contents

• 32 Report on Corporate Governance

• 122 Statistics of Shareholdings

• 124 Notice of Annual General Meeting

• 131 Instructions to Shareholders for AGM

  Proxy Form

  Corporate Information

Corporate Profile

An established provider of fuel products in Singapore with over 40 years of operating track record

Union Gas Holdings Limited ( 优联燃气控股有限公司 ) ("Union Gas" or the "Company", and together with its subsidiaries, the "Group") is an established provider of fuel products in Singapore with over 40 years of operating track record. Its three main business segments include Liquefied Petroleum Gas ("LPG"), Natural Gas ("NG"), and Diesel.

Union Gas sells and distributes diesel to retail customers at its "Cnergy" fuel station as well as transports, distributes and bulk sells diesel to commercial customers.

Union Gas is listed on the Mainboard of the Singapore Exchange Securities Trading Limited (the "SGX-ST") (Stock code: 1F2).

Union Gas is one of the major LPG players in Singapore. The Group's integrated operations give it ownership and control of the whole LPG chain from procurement to bottling and from storage to wholesaling and retailing. It owns two out of the four bottling licenses and bottling plants in Singapore, giving it the largest bottling operations in the city-state. The Group is one of the largest suppliers of bottled LPG cylinders to domestic households in Singapore under the well-recognised "Union" and "Sungas" brand. It also supplies LPG to the commercial and industrial segments both in the retail and wholesale space and provides bottling and refilling of LPG cylinders to non-affiliated entities.

The Group's NG business includes the provision of compressed NG, liquefied NG and piped NG. It produces, sells and distributes CNG at its "Cnergy" fuel station in 50 Old Toh Tuck Road. The Group also supplies liquefied NG and piped NG to commercial customers.

For more information, please visitwww.uniongas.com.sg

Our Business Segments

LPG Business

The Group's LPG Business is its main revenue generator contributing over 80% of total sales annually. Its operations spans across the entire LPG value chain, making it one of the largest LPG players in Singapore.

Besides supplying LPG cylinders to domestic households, Union Gas' retail LPG business extends to the commercial and industrial segment, including the supply of LPG to hawker centres, coffee shops, eating houses, commercial central kitchens and industrial customers.

In addition, Union Gas is involved in the retail sale of LPG-related accessories, such as stoves, hoods, rubber hoses and regulators, to mainly domestic households in matured and / or older estates and landed housing in Singapore. Its small cylinders are also sold to dormitories and certain industrial customers, as well as and supplied to corporate and private events.

Union Gas owns one of the largest delivery fleets in Singapore with nearly 300 vehicles to support island-wide distribution. Its call-centre has more than 50 customer service officers and operates all year-round to take customer orders. For the convenience of customers, the Group has embraced digital transformation and accepts orders and e-payments across various platforms including its SUNGAS and UnionSG mobile apps; SUNGAS (www.sungas.com.sg) and Union Gas (www.uniongas.com.sg) websites and QR codes.

Natural Gas Business

Union Gas operates a 24-hour fuel station under the "Cnergy" brand at 50 Old Toh Tuck Road, where it produces, sells and distributes compressed NG primarily to natural gas vehicles and industrial customers for their commercial use. The station has 14 compressed NG dispensers with 2 nozzles each and is open to the public.

In 2020, the Group diversified into the supply of piped NG and liquefied NG to customers in the services and manufacturing sector.

Diesel Business

Since August 2015, the Group sells and distributes diesel to retail customers at its "Cnergy" station at 50 Old Toh Tuck Road. The station, which is open to the public, has 5 diesel dispensers with 4 nozzles each and two 20,000-litre underground diesel storage tanks which houses its diesel supply.

Union Gas also transports, distributes and bulk sells diesel to commercial customers.

Message to Shareholders

Dear Shareholders

The 12 months ended 31 December 2021 ("FY2021") was a year of many exciting milestones and events for Union Gas.

We celebrated our successful transfer from the Catalist Board to the Mainboard of the Singapore Exchange Securities Trading Limited in July 2021. We believe being on the Mainboard enhances the image and profile of Union Gas both locally and internationally and accords us with greater visibility and recognition in the market and amongst investors.

We completed the acquisition of our new headquarters at 89 Defu Lane 10, which consolidated several of our previously scattered departments in one location and enabled us to better streamline our resources and paved the way for higher efficiency.

But the landmark event in FY2021 that would propel Union Gas to the next level of growth was the completion of our acquisition of Sembas (Asia) Trading Pte. Ltd., Semgas Supply Pte. Ltd., and Summit Gas Systems Pte. Ltd. (the "Acquisition") from Union Energy Corporation Pte. Ltd., which expanded our LPG operations.

The Acquisition comprised two bottling plants and a sizeable amount of support infrastructure including six LPG storage depots, a fleet of delivery vehicles and an entire commercial and industrial LPG sales team. It gave Union Gas full and strategic control of the entire LPG supply chain from procurement of LPG to bottling, to storage and retail and gave the Group ownership of two out of the four bottling licenses and bottling plants in Singapore.

We made first forays into two new areas of interests. The first was a collaboration with Surbana Jurong Group to study and evaluate the potential redevelopment of our existing fuel station at 50 Old Toh Tuck Road into a multi-fuels and renewable energy facility. The second was our first potential overseas venture with the signing of a non-binding letter of intent with Phnom Penh based Worldbridge Industrial Developments for a proposed joint venture to supply and distribute LPG in the Kingdom of Cambodia.

The Acquisition made Union Gas one of the largest LPG players with the largest bottling operations in the city-state and positioned our Group to capture future opportunities across the supply chain.