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Extracted from Annual Report 2011

The financial year ended 30 June 2011 ("FY 2011") was a year of consolidation where we focused on developing our production capacity and product range in limestone processing, exited the loss-making electronics business, and manoeuvred through the volatile scrap metal business.

LIMESTONE PROCESSING

Limestone Processing remained one of our core business segments and business drivers with revenue of $18.5 million and earnings of $3.1 million in FY 2011. This amounted to 78% of the Group's revenue of $23.7 million during the year. During the year, the Group also focused on enhancing its core operations in limestone processing through the expansion of its quicklime plant and the construction of its hydrated lime plant, both in Malaysia. The total aggregated cost amounted to $9.2 million for the full year.

Hydrated lime is an important additive in several industrial processes, namely for pH control in potable water treatment plants and in the flotation or recovery of many non-ferrous ores. Hydrated lime is also used in the flotation of copper, zinc, nickel and lead-bearing ores. With an annual output capacity of 72,000 tons, this hydrated lime plant will better position our Malaysian subsidiary, Compact Energy Sdn Bhd, to capitalise on the increasing demand from Malaysia's water treatment plants, with their business propelled, as it were, by the country's rapid industrialisation and urbanisation. With hydrated lime, we will also be able to target the mining sector.

SCRAP METAL TRADING

Scrap Metal Trading, which is conducted by LAP Trading and Marketing Pte Ltd, saw a decrease in turnover to $5.1 million and a reduction in earnings to $0.1 million during the year, due to market volatility. Sales in this segment comprised 22% of the Group's revenue for FY 2011. With the trend towards environmentally-friendly industrial processes, we believe the long-term demand for recycled scrap metal, which is what we trade in, remains. We will have to double our efforts in this front, with increased competition and volatility in this market space.

MOVING FORWARD

As we begin a new financial year, we aim to build on the stronger base in our core limestone processing operations. Building on an expanded product range and production capabilities, we aim to service a wider range of industries and meet growing demand. Our group will also actively seek new business opportunities in order to secure our long-term growth.