ADVANCE SCT LIMITED

UNAUDITED HALF YEAR FINANCIAL STATEMENT FOR PERIOD ENDED 30 JUNE 2013

The Group?s losses were reduced by 59.4% to a net loss after tax to approximately S$2.1 million.

1. Group turnover reduced by 57% to S$10.7 million for the six months period ended 30 June 2013 (?1H13?) from S$25.2 million for the six months period ended 30 June 2012 (?1H12?). The decrease was due mainly to the Group having ceased the copper smelting operations in Qingyuan, China. In addition, the Group is still in the process of re-aligning its recycling business to focus on higher margin products, and the recycling business has yet to recover to previous levels. The economic uncertainty in China has had a significant impact on the Group?s business, adversely affecting the demand for the Group?s products for its recycling business. Despite the fall in revenue, results improved from a gross loss of $0.53 million in 1H12 to a gross profit of $2.0 million in 1H13, as the Group sought to focus on business with higher profitability. One of the significant factors for the improvement over 1H2012 was the wastewater treatment plant in China, which the Group acquired only in the second half of 2012 and now contributing to revenue.

10. A commentary at the date of the announcement of the significant trends and the competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months.

The recycling business is expected to continue to struggle in the current environment, as demand for scrap metal is affected by the slowing demand from its largest customer base, China. The importers from China are also facing stricter import regulations that have made it more difficult and costly to import, and the tight liquidity in China will exacerbate the situation.

The Group is working with its associate company to tap on its experience and expertise in the copper ball business to explore opportunities in this industry.

In addition to the above, the Group refers to its announcement dated 15 June 2013 where it had announced that the Company is engaging with its lawyers to recover various expenses incurred in connection with the bulk sale of goods and used equipment by one of its subsidiaries in the ordinary course of business. The potential litigation may have an impact in the earnings per share and net tangible assets per share of the Company for the financial year ending 31 December 2013. The Group will release the relevant announcements as and when there are material updates in this matter.

The Group also refers to its announcements dated 24 August 2011, 27 April 2012, 3 May 2012, 16 September 2012, 31 December 2012, 26 July 2013 and 12 August 2013 in relation to a proposed acquisition of working capital in China and the legal proceedings arising from the termination of such proposed acquisition. As stated in the announcement dated 12 August 2013, the suspension of the arbitration proceedings in relation to this matter has been lifted from 7 August 2013 and the arbitration proceedings will be commencing on 22 August 2013. Further announcements will be made in connection with the progress of the arbitration as and when there are material developments.

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