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CHAIRMANS SPEECH Uganda Baati Annual General Meeting, 09 May 2012

Dear Members, Ladies and Gentlemen, It is with immense pleasure that on behalf of the Board of Directors, I have great honour in welcoming you all for todays Annual General Meeting for the year ended 31 December 2011. Indeed, it is my privilege to have your presence to deliberate and review the excellent performance of the Company for the year 2011. Uganda Baati Limited is a member of the SAFAL Group Of Companies the largest producer of steel based roofing products in the Eastern & Central Africa region and the leading manufacturers of Roofings products in Africa. Uganda Baati today employs a self motivated work force of 312 staff in an industrial complex that covers over 4.561 acres of production facilities, ware houses and offices in Kampalas Original Industrial Area. UGANDAS ECONOMY

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The Ugandan economy remained resilient despite bouts of both domestic and external shocks. After declining to 5.9 percent in 2009/10, largely on the backdrop of the global economic crisis, the economy slightly recovered in 2010/11, with real GDP growing to 6.7 percent. This growth was registered despite the dismal performance of the agricultural sector, which was adversely affected by drought. The combined effects of high food prices due to drought, the euro zone financial crisis and high global fuel prices rapidly escalated Ugandas inflation from 5.6%

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in January 2011 to 30.8% inflation at close of the year. Correspondingly steep rise in interest rates to 30% precipitating dearth of credit The exchange rate of USD has been quite volatile during the year 2011, it begun at the level of Ushs 2,300 at the beginning of the year, crossed 2900 level in Sept. 2011 and finally closed at the Ushs 2,490 at end of the year. The outlook for Ugandas growth in 2012 remains broadly optimistic. Uganda looks set to enjoy the fruits of its high level of economic liberalization and ongoing improvements in regional integration. Demand from Southern Sudan in particular will continue to provide an important boost. Ugandas real gross domestic product (GDP) growth rate is projected to increase to 6.9% in 2012 due to increasing regional export demand and the improved global outlook. Macroeconomic indicators continue to be stringently managed and this may lead to slow down in the broad economy. At a global level, overall, in 2011/12, the policymakers face a much more complicated situation that is rapidly turning into a systemic crisis. First, the European sovereign-debt problem and the toxic combination of a sudden economic slowdown, potential interconnectedness between the slowdown and the financial risk, and an absence of obvious solutions to these problems constitute an alarming signal of systemic risk. Uganda, being a small open economy is exposed to developments and prospects in the global markets. The current global economic outlook threatens the economic stability of Uganda at the same time as it provides it with opportunities. The slowdown in global recovery implies slower export growth for Uganda, with implications for the overall economic growth. The governments commitment and investment in infrastructure development as well as progress in the local oil industry present strong indicators for envisaged growth.

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The company continues to develop depth and robustness in its business models with a view to enhancing its market share. PERFORMANCE OF THE COMPANY DURING THE YEAR

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I am delighted to report on excellent performance of the company for the year 2011 as it has made record profit since its inception in 1964. Sales value rose by around 49.63% from Ushs 140.221 billion in 2010 to Ushs 209.811 billion in 2011. However, better pricing & marketing strategies resulted in huge jump in Operating Profit from Ushs 12.986 billion in 2010 to Ushs 24.145 billion in 2011 , consequently Profit before tax also increased by 220% from Ushs 7.786 billion to Ushs 24.922 billion over the same period. Profit after tax stood at Ushs 16.384 billion. The Company Total Assets increased from Ush 67.511 billion in 2010 to Ush 90.973 billion in the current year 2011 representing a growth of 34.75%. 3. CORPORATE SOCIAL RESPONSIBILITY At Uganda Baati, we strive to take responsibility for our actions and promote ethical business practices, support the development of our communities and ensure to minimize the impact of our business on the environment. During 2011, Uganda Baati continued with Corporate Social Responsibility (CSR) initiatives categorized into four themes: Economy, Society, Environment and Governance. CSR highlights for 2011 include;

Continued support by Uganda Baati of Chandaria Medical Clinic so as to provide quality health care services to individual workers and the surrounding community in a caring and competent environment. Cervical cancer vaccination and screening for all female staff of the company in partnership with GlaxoSmithKline and Uganda Womens Cancer Health Initiative.

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Provision of roofing material to schools in Sembabule and Wakiso districts. In partnership with Uganda Health Marketing Group (UHMG), the company made a financial donation to support the malnourished children in Namutamba district. To crown it all, Uganda Baati was recognized by Uganda Chapter on Corporate Social Responsibility Initiatives for her CSR efforts.

4. NEW DEVELOPMENTS Purchased Namanve Land around 20 Acres worth of 7.752 Billion Purchased Tororo Steel Assets worth of Ush 6.240 Billion Proposal for Expansion of Manufacturing Activities under Study & being finalized. 5. FUTURE OUTLOOK The future of the company seems to be very bright and strategy towards sustainability have been formulated and partly implemented to increase more sale volumes. Our business strategy remains focused on: Gearing the entire organization to provide exemplary service to the customers.

Introducing high quality Roofing sheets and associated products. Cost reduction so that the products of your company remain affordable. Specific targeting of export markets of Rwanda, Burundi, Democratic Republic of Congo and Southern Sudan. Introducing new products to provide complete basket of products to the customers.

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DIVIDENDS

It has been a very good year in terms of financial performance as the company has made record profit since 1964 and already paid an Interim dividend of Ush

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4.567 billion during last year. Now a final dividend of Ushs 10,000 per share has also been proposed for the year ended 31 December 2011. 7. ACKNOWLEDGEMENT AND APPRECIATION Finally, on behalf of the UBL Board, it is my great pleasure to thank all our esteemed customers, suppliers, Banks, Government & its agencies and all other stakeholders for their continued support, partnership and contribution to our successful performance in 2011. I particularly wish to thank our management and staff for their drive and dedication for successful & excellent performance of the company since 1964. The Directors have given their valuable expertise and experience to the affairs of the company. I thank them all for their personal commitment and direction. I would also like to thank you all shareholders for your support and confidence in the future prospects of Uganda Baati. We hope to exceed your expectations in 2012 and look forward to further success in the coming year. Thank you, __________________________________________________ Chairman

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