My fellow shareholders,

2008 was a busy year for our company. We began with strong first half year results. Our Utilities and Industrial Parks divisions recorded steady results, our ferries in our Resort Operations showed a 19% increase year on year in the number of passengers arriving in Bintan, and our Property Development division showed a strong and growing order book. However the global financial and economic crisis has had an adverse impact on all our businesses during the third and fourth quarters of the year.

Utilities
Our Utilities business began 2008 with cost pressures from rapidly escalating fuel prices, and demands from our clients to moderate the resulting electricity tariff increases. We undertook a number of efficiency initiatives, including completion of the conversion of our 19 power generators at the Batamindo Industrial Park to dual fuel capability of natural gas or heavy fuel depending on supply costs. A similar conversion has been made in our Bintan Resorts power plant in northern Bintan, now allowing it to use either light or heavy fuel oil. We also carried out the initial feasibility and design works on our new coal fired power plant to be located in our Bintan Industrial Estate in southern Bintan.

The declining fuel prices in the second half of the year on the back of the worsening financial and economic crisis eased cost pressures on the business. However this was more than offset by declining demand for utility services as manufacturers in our industrial parks reduced production and therefore purchases of electricity and water services with sharply falling demand in global trade. Utility demand is expected to shrink as long as global trade remains at these low levels. Therefore we have been continuing with our efficiency efforts coupled with close monitoring of our customer demands to reduce the impact on our business, and we have postponed development of our coal fired power plant until the financing market improves.

Industrial Parks
Our Industrial Parks business has also had a mixed year. Early in the year we saw an increase in occupancy as manufacturers found us increasingly competitive in comparison to the rapidly increasing operational costs in China. Our core tenant base remains focused on the electrical, electronics and medical related industries. Unfortunately as global manufacturing contracts, demand for factory space is likely to fall. To date, our tenants have adjusted by reducing production schedules from three shifts to two, so we have not lost any rentals in our core tenant base. However, several garment-related tenants in our Bintan Industrial Estate have shifted out, as part of the macro trend of the garment industry moving out of Indonesia to countries with lower operating costs.

Our Industrial Parks marketing agent has been working hard on bringing new industrial clusters into our parks, and we hope they can be successful in 2009, despite a difficult business environment.

Resort Operations
Our Resort Operations Division had an exciting year with orders placed for two new high speed ferries scheduled for delivery in May 2009. The new ferries can cruise at 38 knots (approximately 70 km/h) compared to the current ferries speed of about 28 knots. The new ferries have the latest wave interceptor hardware which should significantly improve ride comfort especially during the choppy monsoon period and will also provide a dedicated separate business class section to cater to the increasingly affluent visitors Bintan is attracting.

During the year, Bintan also played host to a number of visiting celebrities and dignitaries as our reputation in the destination market increased. Overall visitor arrivals to Bintan also increased significantly during the year to 398,000 from 333,000 in 2007.

Property Development
In May we had the official Groundbreaking Ceremony of our Lagoi Bay Development project, attended by numerous dignitaries who enjoyed a wonderful dinner and party on the beach in Lagoi Bay. At the launch, we also announced S$45 million of additional land sales bringing our total order book to over S$67 million including a new shopping mall and two new hotel projects.

As the financial crisis worsened during the third and fourth quarters, some of our purchasers of land requested for delays for commencement and completion of construction. Accordingly, we had permitted all purchasers to delay commencement of construction by 12 months, and we have also shifted our timeline for delivery of completed infrastructure.

Several projects were completed during the course of the year. These include a new 65,000 square foot shophouse style development in our Town Center, a new 20,000 square foot shopping mall also in the Town Center, a new 3 hectare children’s adventure zone and water sports center at our Reservoir, a new 100,000 square foot Resort Centre Complex (comprising bowling alleys, shopping mall, restaurants, health club, etc) at the Nirwana Resorts, and a S$3.5 million upgrade in the utility infrastructure in the Bintan Lagoon Resort. In addition the new Sahid Tourism and Hospitality School opened with its first class of 55 students.

Financial Results
Although our final results for the year were not as strong as in the preceding year, we remain in a good financial position, with strong cash flow as evidenced by our S$72 million in EBITDA and our conservative balance sheet with gross borrowings of S$86 million as at end 2008.

We should also highlight that in compliance with accounting standards, we do not recognize cash deposits on land sales in the Property Development Division until the final transfer of property title to the new owner, even though such receipts are not refundable. Since early 2008, we inform shareholders of our land sales order book, which represents sales contracts which have been entered into, pending completion of the sales transactions. Based on past experience, it takes about 18 to 24 months for completion after the initial contract. Hence, 2009 should result in the completion of some sales contracts entered into in 2008.

We thank you for your continued support, and we will work tirelessly to improve our company.

Sincerely,