PROFIT & LOSS


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REVIEW OF PERFORMANCE

Profit And Loss Review

Revenue, Cost and Earnings
The Group collects scrap copper through its subsidiary recycling plants in Singapore, Malaysia, Indonesia, Thailand as well as through suppliers globally and recycles it into refined copper coils at its copper smelter in Port Klang, Malaysia. A copper refinery and manufacturing plant is currently under construction at Tuas, Singapore with the first phase of production of refined copper products expected to take place in mid 2008.

Due to a broadening of the earnings base, group revenue for the 12 months to 31 Dec 2007 increased 25% to $435.6 million, a growth of $90.3 million. The increase in revenue arose primarily from a full 12-month consolidation of the recycling operations of Green World Holdings, and (b) contributions from TTM Industries Sdn Bhd (owner of the Malaysian smelter) and Tsing Tech (the Malaysian recycling operations). An amount of $132 million in revenue was attributed to the consolidation of TTMI and Tsing Tech, which became subsidiaries of the Group in March 2007. An amount of $254 million was attributed to GreenWorld.

Gross profit rose $10 million (+41%) to $34.6 million in FY2007 from $24.7 million in FY2006.

With revenue increasing, administrative, selling and distribution expenses were higher as a result of the inclusion of new subsidiaries, buildup of inventory to support the new smelter, higher material prices and the consolidation of the operations of TTMI and Tsing Tech. Selling and distribution expenses increased by $2.5m from $3.4m to $5.9m (+73%) with the inclusion of GreenWorld ($3.9m). Administrative expenses increased by $7.1m from $8.5m to $15.6m (+84%) with the inclusion of GreenWorld ($4.6m); TTMI ($3.27m), Kunshan ($0.71) and Tsing Tech ($0.36m).

Finance expenses rose by $3.65m from $4.05m to $7.70m (+90%) as additional bank borrowings were incurred to support the working capital requirements. This included a facility fee of $0.9 million for a recently secured 3 year term loan.

Other operating expense incurred rose $1.7m from $0.8m to $2.5m with the inclusion of GreenWorld ($1.51m)


Assets, liabilities and cashflows

Fixed assets for the 12 months to Dec 2007 increased from $34.5m to $59.7m (+72%) due to the purchase of equipment for the testing and finishing business and acquisition of the new factory in Malaysia (TTMI and Tsing Tech). In line with the increase in turnover, trade debtors and other receivables increased from $69.7m to $75.6m (+8.5%). In building up an initial quantity of scrap copper to support the initial production of the smelting operation, advance payment for raw materials were made and inventory was increased from $11.5m to $57.5m at year end. Higher bank borrowings were incurred to finance the additional working capital especially for 2H 2007. Cash and Bank balances have increased from $16.2m to $54.9m (+238%). Interest bearing non-current liabilities increased from $13.1m to $66.3m primarily due to a 3 year term loan secured by the Group to support its growing working capital requirements.


COMMENTARY

The Group will focus on consolidating and extracting greater value from its existing and newly acquired assets in recycling, smelting, refining and manufacturing for it copper supply chain management business in FY2008. The Group will still continue to grow its supply chain network by expanding its global customer and as well as supplier base.


BALANCE SHEET