Quality - UAC Berhad

Chairman’s StatementRELATED PARTY TRANSACTIONSSignificant related party transactions of the Group during the year are disclosed in Note 27 of the financialstatements. This Note also sets out the aggregate value of recurrent related party transactions of revenue or tradingnature, conducted in accordance with the mandate obtained from shareholders at the Annual General Meeting of24 March 2005. Renewal of this mandate will be sought at the forthcoming Annual General Meeting.PROSPECTSThe Malaysian economic outlook for 2006 is encouraging, as it has been forecasted to expand by 5.5%. In particularthe construction sector is expected to reverse the downturn experienced over the past two years to expand by 3%. Allthese augur well for the Group as its operation from production to sales and marketing and the network ofdistributors and dealers in the country are primed to spring ahead to ride the wave of an industry upturn.The year 2006 is likely to be challenging as there are several significant potential challenges looming in the horizon,some of which are beyond the control of the Group. However the Group's intensified efforts in developing new overseasmarkets would enable the Group to overcome these challenges and sustain its profitability in the coming year.BOARD OF DIRECTORSThe year 2005 saw several changes to the composition of the Board.Mr Li Heng Tiong, the Managing Director, retired on 30 June 2005 afterhaving served the Company for many years with distinction. During histenure as the Managing Director for over 15 years, the Companyachieved significant growth in revenue and profits and in the processalso laid the foundation for the future well being of the Company.UCO Lattice (Square)Houses, Johore BahruUCO Lattice (Diamond)Houses, Johore Bahru19