Union Gas : Annual Report 2022

Resilience

for Sustainable

GROWTH

2022

ANNUAL REPORT

TABLE OF CONTENTS

01 Corporate Profile

02 Our Business Segments

03 Message to Shareholders

06 Board of Directors

09 Key Executives

1. Financial Highlights
2. Operations and Financial Review

1. Corporate Structure
2. Sustainability Report

35 Report on Corporate Governance and Financial Contents

126 Staticstics of Shareholdings

128 Notice of Annual General Meeting

135 Instructions to Shareholders for AGM

Proxy Form

Corporate Information

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

UNION GAS HOLDINGS	1
Annual Report 2022

CORPORATE PROFILE

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 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" brands. 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 compressed NG at its "Cnergy" fuel station at 50 Old Toh Tuck Road.The Group also supplies liquefied NG and piped NG to commercial customers.

Union Gas sells and distributes diesel to retail customers at its "Cnergy" fuel station and 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).

For more information, please visit www.uniongas.com.sg

2	UNION GAS HOLDINGS
Annual Report 2022

OUR BUSINESS SEGMENTS

LPG Business

Natural Gas Business

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

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

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

Union Gas owns one of the largest delivery fleets in Singapore with more than 200 vehicles to support island- wide distribution. Its call-centre has more than 30 customer service officers and operates all year round to take customer orders. For the convenience of customers, the Group accepts orders and e-payments via SUNGAS (www. sungas.com.sg) and Union Gas (www.uniongas.com.sg) websites and QR codes.

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 sectors.

Diesel Business

Since August 2015, the Group sells and distributes diesel to retail customers. Its "Cnergy" station has 5 diesel dispensers with 4 nozzles each and two 20,000-litre underground diesel storage tanks that houses its diesel supply. Union Gas also transports, distributes and bulk sells diesel to commercial customers.

UNION GAS HOLDINGS	3
Annual Report 2022

MESSAGE TO SHAREHOLDERS

Dear Shareholders

During the year ended 31 December 2022 ("FY2022"), most of the world threw off the shackles of Covid-19 restrictions, reopened their borders and embraced living with the virus in an endemic stage. In Singapore, both leisure and commercial activities kicked into full gear following the significant relaxation of pandemic measures in April 2022 and the robust level of activity was reflected in the higher sales volumes achieved by two out of three of our business segments. It was truly back to business as usual.

Yet, we had emerged from the pandemic era to strong headwinds of worsening geopolitical tensions, soaring international energy prices, high inflation, ongoing supply chain disruptions and tightening financial conditions.

Specific to our industry was the ongoing conflict between Russia and Ukraine, which had kept international fuel prices high in FY2022. With energy being the mainstay in our daily lives, the Group as an established provider of fuel products, remained committed to keeping our prices as competitive as possible to support our loyal customers. This is also a philosophy that we have kept for over 40 years in the business and reflects the symbiotic relationship we have with our customers where we enjoy their patronage

during good times but we also do our bit to support them during downcycles. We know our customers appreciate this because they build long term relationships with us, which ensure positive returns for our shareholders in the long run. In fact, we are very proud to have served some of our domestic customers for several generations.

That said, we are monitoring the market conditions very closely and we will continue to exercise prudence over all controllable costs and expenses in order to protect our own profitability.

Performance review

Our topline reached a new record of $134.79 million driven by higher revenue achieved by all three of our business segments, against the high-activity but high-cost environment in FY2022. This was 9.6% more than the previous high of

$123.04 million in the financial year ended 31 December 2021 ("FY2021") because both our LPG and NG segments saw higher business-to-business sales in FY2022, while the higher revenue from our Diesel segment was mainly due to an increase in selling prices as a result of higher fuel prices.