CEO's Statement

Dear Shareholders,

On behalf of the Board, I am pleased to present the Group's Annual Report for the financial year ended 31 December 2007.

FY 2007 has been an exceptional year with the Group reporting record profits after tax for the year. This was on the back of several "one off" transactions, including the disposal of the Furniture Business during the financial year that resulted in significant gains. For the year under review, Novena Group's turnover from continuing operations increased by 35% from S$40 million to S$54 million (after restating prior year balances to reflect the disposal of the furniture business ). The profit after tax for the year increased significantly from S$3.1million to S$45.6 million.

The significant improvement in profit after tax was largely attributable to several key reasons, one of which was "one off" capital gains arising from the sale of property. In addition,there were gains from the disposal of the furniture business mentioned above. The Group also recorded a significant increase in dividend income from investments in quoted securities. With the excess funds available, the Group has built up substantial investments in quoted securities in several companies that the Group considers to have growth potential. The Group also saw its net assets grow from $26 million in 2006 to $60 million at the end of 2007.

The Group will continue to grow its beauty division under its wholly owned subsidiaries Beaute Spring Pte. Ltd., Niclas International Pte Ltd, Fasta International Pte Ltd and BSP Global Pte Ltd, as well as its interest in the distribution of FMCG ( fast moving consumer goods ) products through its 80% owned subsidiary, Chuan Seng Leong Pte Ltd.

In our ongoing process of expansion of the beauty division, the Group remains committed to sourcing for products of the highest quality for our customers. We will continue to strengthen our branding and retail concepts, and widen our range of beauty products. Nevertheless, we will continue to be mindful of the fact that the retail industry is in a challenging environment, both locally and in the region.

The past year's outstanding financial performance was due to several "one off" non-recurring transactions involving property and investments. Pending the possibility of the acquisition of new businesses, the scale of recurrent profitability and turnover of the Group will be constrained. Moving forward, the Group intends to source for new businesses that will create good value and benefit the shareholders of the company.

On a broader note and as in previous years, community development and charity efforts continue to be one of the Group key priorities in the realization of our values in being creative, sincere and caring. We believe in making a difference in people's lives. Knowing that all it takes is a little care and concern, we hope that our charitable efforts will go a long way in making a difference in the lives of each and every underprivileged individual we touch. During the year, the Group contributed more than $270,000 in cash and kind to various charity events and organizations.

I am pleased to inform that the Board has recommended a first and final dividend of 0.5 cent per ordinary share. In addition, in view of the outstanding financial performance of the Group, the Board has also recommended the payment of a special dividend of 2 cents per ordinary share. I would like to express my heartfelt gratitude to all our loyal customers in supporting our brands and products in both the beauty and FMCG divisions. My thanks also go to the Board of Directors and our shareholders for their commitment and support this past year. Last but not least, a big thank you for the contributions and support from all my staff and business associates. I look forward to your continued support for the group in the year ahead.

Thank you for your continuous support.

Toh Soon Huat (PBM)
Acting Chairman & CEO