Full Year Financial Statement For The Period Ended 31 December 2008

Income Statement

Balance Sheets

Performance review

The principal activities of the Group remain as those relating to the procurement of jet fuel, oil-trading activities and investment holding. Correspondingly, revenue streams comprised (i) jet fuel procurement (ii) results from oil-trading activities for the purpose of hedging and (iii) strategic investments in oil related businesses.

FY 2008 vs FY 2007

The Group's revenue for FY 2008 was US$5.37 billion compared to US$2.96 billion for FY2007, an increase of 81.4%. The increase was mainly attributable to the higher volume of jet fuel procured and supplied as well as due to the high fuel prices. Total volume of jet fuel procured and supplied was 5.19 million MT in FY2008 compared to 4.19 million MT in FY2007, an increase of approximately 23.9%. Average jet fuel price was US$130.16 per barrel in FY2008 compared to US$88.81 per barrel in FY2007. The increase in total volume of jet fuel procured and supplied in 2008 was due to a rise in demand for jet fuel imports in China to safeguard supply during the Beijing Olympics season and a corresponding decline in China's domestic production and supply of jet fuel.

The Company recorded gain on derivatives of US$4.59 million on paper swaps in FY2008. Please refer to explanations in Note 3 on page 2 of this announcement.

Interest income was US$5.07 million in FY2008 as compared to US$8.73 million in FY2007. This decrease was primarily due to the decline in interest rates on fixed deposits placed with banks and financial institutions.

Other operating income comprised mainly exchange gain of US$0.63 million in FY2008 compared to exchange gain of US$3.55 million in FY2007. The exchange gain in FY2008 was mainly attributable to the appreciation of the Singapore dollar against the US dollar in the first half of 2008. The exchange gain of US$3.55 million in FY2007 was due to the appreciation of the Euro against the US dollar.

The disposal of the Group's 5% investment in Compania Logistica de Hidrocarburos, S.A. ("CLH") resulted in a gain of US$160.17 million before capital gain tax and US$134.80 million after deducting capital gain tax in FY2007.

Administrative expenses decreased mainly due to the decrease in staff costs in FY2008 compared to FY2007. Higher payroll and related expenses in FY2007 was also due to the payment in-lieu of notice for some redundant staff.

Other operating expenses in FY2008 were in credit balance of US$0.62 million against a charge of US$1.37 million in FY2007, a reduction of 145.2%. The credit balance in FY2008 was mainly due to the reversal of impairment on leasehold properties of the Group following an independent valuation carried out by Colliers International Consultancy & Valuation (Singapore) Pte Ltd, an independent valuer, at open market value on an existing use basis. Higher other operating expenses in FY2007 were mainly due to the impairment loss made on the oil storage properties held by the Group's 80% subsidiary, Xinyuan, before the Group's divestment of 41% of its stake in August 2007.

Finance costs was US$0.54 million in FY2008 compared to US$6.66 million in FY2007. Finance costs in FY2008 relates largely to bank charges on the issuance of Letters of Credit. Higher finance costs in FY2007 was mainly due to the interest payments made to scheme creditors and the accelerated amortisation of the fair value interest adjustment in accordance with FRS 39 as a result of the full settlement of the deferred debt in May 2007. There was no interest expense in FY2008 as the Company has no interest-bearing debts since the amounts due to the Scheme Creditors were fully repaid in May 2007.

The decrease in the Group's share of results of associates was primarily due to the decrease in Pudong's profit contribution. Pudong's contribution to the Group was US$10.41 million for FY2008 compared to US$25.53 million for FY2007, a decrease of 59.2%. This was mainly due to higher procurement costs which were valued on a weighted average basis compared to lower revenue due to the sharp decline in oil prices since September 2008. The downward adjustment to the sales prices of domestic flights in December 2008 has further impacted the results of Pudong. Higher interest expenses and exchange losses incurred in FY2008 have further affected the performance of Pudong. The higher volume of jet fuel procured and supplied and also the increase in jet fuel prices from January to August 2008, have led to higher trade receivables and trade payables. Despite the recent decline of oil prices in the 4Q 2008, which has reduced the trade receivables balance it is still relatively higher compared to the beginning of the year due to the longer collection period. This has led to the increase in short term loan at higher interest rate to meet working capital requirement. The strengthening of the Renminbi against the US dollar also contributed to the decrease in Pudong's profit. In addition, as a result of the unification of China's corporate tax rate with effect from 1 January 2008, the Group has provided for taxation on its share of results in Pudong at the tax rate of 18%. Prior to 1 January 2008, Pudong was subject to a tax concessionary corporate tax rate of 15%.

The share of results of associates in FY2008 also included the Group's share of profits of 39% in Xinyuan of US$0.11 million.

The Group's profit attributable to shareholders was US$38.35 million for FY2008 compared to US$168.33 million for FY2007. Excluding the net gain on disposal of CLH, the Group's profit attributable to shareholders would be US$33.53 million in FY2007. The Group's net profit for FY2008 is an increase of 14.4% compared to FY2007 without the net gain from the disposal of CLH.

Financial position and Cash Flow review

The Group's net equity increased by 2.7% to US$275.70 million as at 31 December 2008 from US$268.58 million as at 31 December 2007. This was attributable to the profit after tax for FY2008 and the increase in currency translation reserve from its investment in Pudong and after special dividend payment of US$26.20 million and ordinary dividend payment of US$10.48 million in the current financial year. The Company paid ordinary dividend amounting to US$9.53 million in 2007.

As at 31 December 2008, the Group's cash and cash equivalents was US$153.10 million as compared to US$300.47 million as at 31 December 2007. The reduction in cash and cash equivalents as at 31 December 2008 was mainly due to the dividend payment of US$36.68 million in May 2008 and the effect of timing differences on the receipts from trade receivables and payments to trade payables. In FY2007, cash was generated mainly from the balance of the net proceeds arising from the sale of the 5% investment in CLH, profits generated from the Company's operations and timing differences on the receipts from trade receivables and payments to trade payables.

The Company does not have any interest-bearing liabilities or obligations as at 31 December 2008 and as at 31 December 2007.

Commentary On Prospects

In view of weakening economies resulting from the global financial crisis, we continue to adopt a very cautious approach to our trading activities and will monitor the situation closely.

Despite the current global economic downturn, the fundamentals of Company's core businesses have remained strong. The Group is taking proactive steps to further diversify its earnings base. It is also actively seeking to invest in more synergetic oil-related assets.