“As we take stock of our position at the close of FY2007, I am pleased to share that our efforts in this direction have shown results with a 200.1% increase in net profit attributable to shareholders to RMB26.07 million.”

Dear Shareholders

Highlights of FY2007 - Focusing on Growth

Financial year ended 31 December 2007 (“FY2007”) was a watershed in the Group's growth and development. With the aim of creating greater value for shareholders, we took a decisive step in streamlining our investments as well as maintained focus on expanding our core business to land infrastructure, property development and water plant development. As we take stock of our position at the close of FY2007, I am pleased to share that our efforts in this direction have shown results with a 200.1% increase in net profit attributable to shareholders to RMB26.07 million.

We believe in sharing the fruits of our labour with our shareholders, who have shown unstinting support over the past year as we strive to grow and strengthen our business. In view of FY2007's performance, a final tax-exempt dividend of 0.35 Singapore cents per share has been recommended for approval at the forthcoming Annual General Meeting. The higher dividend recommended is a reinforcement of the Group's commitment to reward shareholders on a continual basis .

Operations and Financial Review

In FY2007, Group turnover decreased 58.1% to RMB41.3 million, compared to RMB98.6 million in FY2006 , after the disposal of China Bridges Investments Limited and its subsidiaries in FY2006 . Revenue contribution from the two remaining bridges, Haimen and Zuowei, increased 8% and decreased 5.8% respectively. The decline in Zuowei's toll revenue was attributed to alternative toll free routes available to the public .

In spite of the lower turnover , profit for the year rose from RMB11.2 million in FY2006 to RMB27.4 million in FY2007, due mainly to the disposal of a subsidiary and the resulting lower financial and operating expenses. Corresponding to the lower turnover, cost of services decreased 55.1% to RMB21.9 million. Administrative expenses also fell by 8. 1 % to RMB 11 . 1 million, operating expenses fell by 53.9% to RMB3.8 million and financial expenses decreased substantially by 99.9% to RMB22, 000.

Overall, the Group's cash position improved. The Group generated a net positive cash flow of RMB1 1 . 9 million from operating activities. This was lower than the RMB77.7 million generated in FY2006 due to the disposal of China Bridges Investments Limited and its subsidiaries in FY2006 . Net proceeds from the disposal of a subsidiary brought in RMB13. 2 million, while the issue of 150 million new ordinary shares by way of private placement generated RMB 72 . 7 million net cash. Bolstered by the inflow of funds from financing activities, cash and cash equivalents stood at RMB79.5 million as at year end.

Prospects and Moving Forward

In addition to funding our general corporate and working capital requirements, the injection of funds from the share issue will also finance the expansion of our business, be it the organic growth of existing operations or potential acquisitions and, or investments in complementary and new businesses. Against the backdrop of a growing economy in the PRC, we have the potential to grow our business and reap greater returns.

With income from our existing toll bridge business expected to reach an optimum level in the near future, we have already put in action plans to generate new income streams, such as the land infrastructure project in Tianjin in the PRC. In line with this strategic plan, we will continue to explore opportunities in other new business initiatives in the years ahead. Moving into the new financial year, we remain sanguine of our prospects and are committed to executing our strategic plans effectively to raise the profitability of our business units.

Note of Appreciation

On this positive note, I would like to commend the dedication of our employees, whose conscientiousness and hard work have ensured our operations achieved optimal performance throughout the year. We also value the support of our customers, business associates and shareholders and appreciate their confidence in us over the years. Last but not the least, I wish to extend my thanks to fellow Board members for their assistance, cooperation and understanding in the course of our work and I look forward to their continued contributions in the future.

Shan Chang
Chairman