Extracted from Annual Report 2007

Chairman

Steady growth in FY2007 reflects stability within the Group's operations. With a gradual consolidation of our power plants, We are positive that our energy business is well geared towards greater expansion into the renewable energy arena.

Steady Growth in Performance

For the year ended 31 December 2007, our Group performed pleasantly with a commendable top line of S$129.8 million. This outstanding performance outshined the previous year's revenue of S$120.8 million by approximately 7.5%. Without a doubt, this achievement was made possible with a dedicated and committed management team that is well supported by an encouraging Board of Directors.

Net profit attributable to shareholders stood at S$12.3 million in FY2007. Disregarding the extraordinary one time gain in other income in FY2006, the Group's net profit attributable to shareholders increased by 23.9% in FY2007.

Steady growth in FY2007 reflects stability within the Group's operations. With a gradual consolidation of our power plants, We are positive that our energy business is well geared towards greater expansion into the renewable energy arena.

Chairman

Looking Back

In FY2007, the Group maintained our focus on developing clean, environmentally friendly renewable energy and constantly kept a sharp lookout for opportunities in expanding our renewable energy business.

The past year witnessed the implementation of a new management system that improved both safety and efficiency levels of operations in our energy business. This new management system proved to be a success as the Group's subsidiary, Asia Power (Neijiang) Hydro Electricity Co., Ltd incurred lower operational and management costs while maintaining the same level of efficiency.

Various measures were introduced in FY2007 to hasten the period from approval to construction of hydropower objects. The Group's subsidiary, Asia Power (Leibo) Hydroelectricity Co., Ltd clearly benefited from these measures as it completed all necessary approval to construction processes in the past year.

During the year under review, Heilongjiang Asia Power Xinbao Heating & Power Co., Ltd ventured into the construction of a 300 MW heat driven electricity generator, which will allow the Group to achieve higher economies of scale. This project is currently awaiting approval from relevant government parties.

Continuing our strategy on research and development, the Group also intensified our research efforts in renewable energy sources throughout the year ended 31 December 2007.

Beginning FY08, the Group placed out 40,000,000 new shares at a price of S$0.33 per ordinary share to Renewable Energy Holdings Pte Ltd ("REH"). REH is an investment holding company and is a subsidiary of Catalist-listed China EnerSave Limited, a renewable energy service provider that is committed to developing clean and carbon-neutral power sources for future energy needs.

Through this exercise, the Group successfully raised net proceeds of approximately S$13.2 million after deducting expenses incurred for the share placement exercise.

Through utilisation of the net proceeds, the Group will be able to increase the paid up capital of the Group's subsidiary, Asia Power (Leibo) Hydroelectricity Co., Ltd and also acquire shares from the existing shareholders of Leibo.

Outlook For Year Ahead

We believe electrical demand will intensify to immense levels. This coupled with China's growing affluence and the setting up of more factories will create an upturn in demand for energy, which spells good news for the Group's business.

Furthermore, China has openly demonstrated its support towards development of renewable energy. Factoring in the growing affluence of China, these put the Group's “clean, environmentally-friendly renewable energy” business in good stead for the year ahead.

On the contrary, with issues of inflation and the possibility of an overheated China economy in the future, many opportunities may also be potholes that can cause potential upsets if unheeded.

With an experienced management team leading our energy business, we are confident that they will be able to provide us with the right guidance and once again, allow the Group to ride upon this energy and propel us further ahead.

Rewarding Our Shareholders

As an act of appreciation to our shareholders for their unwavering support all this while, the Board of Directors has proposed a final taxexempt dividend of SG 1.1 cents per ordinary share for FY2007.

Appreciation and Acknowledgement

On behalf of the Board of Directors, We would like to take this opportunity to thank our shareholders, management team, business associates and our valued customers for their dedication, support and contributions made to the Group. Not forgetting, our committed and loyal employees whose diligence and dedication have not gone unnoticed. We thank all of you for your efforts in making FY2007 into another successful year for Asia Power.

We look forward to your continued support and together; we will continue to strive harder to propel Asia Power to greater heights for the year to come.


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