Sinomem commenced its production of ceramic membrane and new polymer membrane module in Jan 2008, and will continue to improve its efficiency in operations and quality in the output to provide better services to our customers.

Sinomem entered into an agreement with Guan Nan County Government, Jiangsu Province, People's Republic of China ("PRC") to form a new joint venture company ("JVC") with a paid up capital of RMB100 milion, in which Sinomem and Guan Nan County Government will hold 60% and 40% stakes respectively (the "Transaction"). The principal activity of the JVC is to provide industrial wastewater treatment services to Lianyungang Chemical Industrial Park ("LCIP"), which has attracted investments totaling RMB7.46 billion from domestic and overseas chemical producers.

Sinomem's wholly owned subsidiary, Suntar Investment Pte. Ltd. has acquired the remaining 30% stake in Rosin Chemical (Wuping) Co., Ltd. (Rosin Chemical") from Fujian Wuping Luzhou Forest Chemical Co., Ltd. After the acquisition, Rosin Chemical becomes a wholly-owned subsidiary of Sinomem. The principal activity of Rosin Chemical is on production and sales of Rosin-based chemicals.

Sinomem has secured 4 new wastewater treatment/recycling concessions in China with a total treatment capacity of 125,000ton/day (the "Projects"). The total investment needed is estimated at RMB160 million.

Dr Lan Weiguang was appointed as Adjunct Professor, Centre for Water Resource, School of Engineering, with Peking University. China. Keeping ahead of the race, the company and the university will collaborate to conduct research on membrane materials by integrating cutting-edge experimental methods and advance technologies application.

Sinphon Bioscience (Ji'an) Co., Ltd hosted its grand opening ceremony in the Ji'an city. The commencement ceremony was initiated by Governor Wu Xinxiong.

Sinomem has secured four new wastewater treatment/recycling projects in China. The total investment of phase one construction is estimated at RMB73 million.

Sinomem was awarded a 30-year concession to operate a wastewater treatment plant in Siping City, Jilin Province, China and a license to sell the recycled water to industrial users in the City. The total investment required is estimated at RMB150 million.

Sinomem entered into an Agreement with ItN Nanovation AG, a German stock Exchange listed company specializing in Nano coating technology development, to setup joint ventures ("JV") for ceramic membrane development, production and marketing. Two JV companies were set up at Xiamen, China. Sinomem and ItN Nanovation AG specialize in product development and production will have a 50.1% and 49.9% stakes in the company respectively. Second JV specialized in market and sales, Sinomem and ItN Nanovation AG will have a 49.9% and 50.1% stake in the company respectively. The total investment in production facilities is estimated at Eur3.0 million.

Sinomem's wholly owned subsidiary, Suntar Investment Pte Ltd entered into a sale and purchase agreement with Jiangxi New Ruifeng Biochemical Co. Ltd (JNRB) to acquire a 61% stake in Jiangxi New Reyphon Biochemical Co. Ltd (Reyphon). Suntar Investment has also entered into a sale and purchase agreement with XinRui Enterprise Co., Ltd to acquire a 5% stake in Reyphon. After the aforementioned transactions, Sinomem Technology's effective shareholding in Reyphon will increase from 48.45% to 66%. Reyphon is a key gibberellins producer in the world.

Sinomem signed a Memorandum of Understanding (MOU), subject to contract, with the National University of Singapore ("NUS") and Nanchang University ("NCU"). Under the MOU, Sinomem, NUS and NCU will establish joint Sinomem-NUS-NCU research and development centres in NUS and NCU. The joint research and development centres will focus on food science and technology, food process and engineering, nutraceutical product development and applied membrane technology.

Mr. Lin Yongbin, a former Executive Director and President of Lukang Pharmaceutical Co Ltd, a leading pharmaceutical company listed in Shanghai stock exchange, was appointed as Vice President of Sinomem and the General Manager of Jiangxi New Reyphon Biochemical Co. Ltd. with effect from 3 April 2006.

Suntar Membrane Technology entered into an agreement with Microdyn-Nadir GmbH to set up a joint venture named JV with a registered paid -up capital of Euro 500,000. M-N and Suntar will have 65% and 35% stakes in the JV respectively.

Sinomem was awarded a 30-year concession to build, own, operate and transfer a 80000 m3/day wastewater treatment plant in Ji An, JiangXi Province, PRC.

Sinomem's wholly owned subsidiary, Suntar Investment Ltd entered into a joint venture with Fujian Wuping Luzhou Forest Chemical Co., Ltd ("FWLFC"). Rosin Chemical (Wuping) Co., Ltd (JVC) is 70%-owned by Suntar Investment and the remaining 30% owned by FWLFC. The registered paid up capital of JVC is US$2.1 million, Suntar Investment and FWLFC have contributed US$1.47 million in cash and US$0.63 in the form of operating tangible assets respectively.

Sinomem entered into a purchase agreement with Goldman Sachs (Singapore) Pte in respect of the Bonds. S$80,000,000 in principal amount of convertible Bonds due 2011, convertible into 64,000,000 fully paid ordinary shares in the capital of the Company at an initial conversion price of S$1.25 per Conversion share.

Sinomem entered into an Agreement with ItN Nanovation AG, a German stock Exchange listed company specializing in Nano coating technology development, to setup joint ventures (JV) for ceramic membrane development, production and marketing. Two JV companies were set up at Xiamen, China. Sinomem and ItN Nanovation AG specialize in product development and production will have a 50.1% and 49.9% stakes in the company respectively. Second JV specialized in market and sales, Sinomem and ItN Nanovation AG will have a 49.9% and 50.1% stake in the company respectively. The total investment in production facilities is estimated at Euro 3.0 million.

Sinomem was awarded a 30-year concession to operate a wastewater treatment plant in Siping City, Jilin Province, China and a license to sell the recycled water to industrial users in the City. The total investment required is estimated at RMB150 million.

Mr. Zhong Hongde, who has close to 10 years of general management experience, was appointed as Vice President for Group's administrative and human resources management.

In January, the group appointed a new Chief Technology Officer, Dr Li Jian Ke who has extensive experience in fermentation and purification process development gained at a major US-based pharmaceutical company.

In January, Sinomem, through its subsidiary Suntar Membrane Technology (Xiamen) Co. Ltd was awarded a "863 project" which is a top national high tech program. It was launched in March 1986 by the government of China with the aim of enhancing China's international competitiveness and improving China's overall capability of R&D in high technology.

In March, Sinomem entered into an Agreement ("The Agreement") with Microdyn-Nadir GmbH ("M-N") and GEP I Holding AG to subscribe for a 50% stake in M-N for Euro 2 million cash. M-N is an established manufacturer of membranes.

The group appointed Robin Lin Lu Ping as its Executive Director and Chief Financial Officer, effective from Apr 26 2005. Mr. Lin will be responsible for finance, marketing and human resource functions. Prior to this appointment, Mr Lin was an Independent Director of Sinomem.

Dr. Chen Jian, President cum Professor of Southern Yangtze University, was appointed as a Non-Executive Independent Director of the Company with effect from 26 April 2005. He has also been appointed as a member of the Audit Committee with effect from 26 April 2005.

Mr. Chen Guansheng, a former Executive Vice president of Lukang Pharmaceutical Co., Ltd, a leading pharmaceutical company listed in Shanghai stock exchange, was appointed as a Vice President of Sinomem and Managing Director of Jiangxi New Ruifeng Biochemical Co. Ltd. ("New Ruifeng") with effect from 13 June 2005.

Sinomem entered into an agreement with Shandong Lianmeng Chemical Group Co Ltd, Shandong Lianmeng Chemical Co Ltd and Shandong Lianmeng Phosphate & Compound Co Ltd, the three existing shareholders of Shandong Tianli Biochemical Co Ltd ("STBC") to take a 30% stake in STBC through the subscription of new shares.

Sinomem entered into an agreement with the Jiangxi Bureau of Nuclear Geology and Nanchang University to set up a joint venture with a registered paid-up capital of RMB 100 million. Sinomem, Jiangxi Bureau of Nuclear Geology, and Nanchang University will have 50%, 40% and 10% stakes in the new JV respectively.

Suntar Xiamen won the Advanced Enterprise Golden-Bridge Award and Dr Lan Weiguang won the Advanced Entrepreneur Golden- Bridge Award from China Technology Market Association.

On 5 April 2004, Dr Cao Min Jie was appointed as Senior Manager and he is responsible for Sinomem's research and development activities, process development and application studies.

On 28 April 2004, Sinomem, through its wholly-owned subsidiary Suntar Singapore, entered into a sale and purchase agreement with Xiamen Lanhui to purchase the remaining 47.9% equity stake in Suntar Xiamen not owned by it from Xiamen Lanhui. After the acquisition, Suntar Xiamen became a wholly owned subsidiary of Suntar Singapore.

Sinomem's postdoctoral station, initiated in Oct 2002, operated officially in Jul 2004. The study area covers mainly three subjects: Membrane BioReactor, Purification of Natural Product and Membrane Antifouling. The station consists of three postdoctors who came from famous universities in PRC.

Sinomem's subsidiaries, Suntar Xiamen and Suntar Process have been awarded the prestigious ISO 14001:1996 certification for their environment management systems.

Sinomem's core subsidiary, Suntar Xiamen achieved the first Grade Prize of Science and Technology Advance Prize of Xiamen for membrane technology applying in Vitamine C production.

In Nov, Sinomem through its wholly owned subsidiary, Suntar Process established a joint venture called Jiangxi New Ruifeng Biochemical Co. Ltd.(NRB) in the PRC. NRB will focus on the production and sales of gibberellins (a plant growth regulator) and other fermentation-based products.

Sinomem's Executive Director, Ms Chen Ni, placed out a total of 20 million vendor shares to global institutional investors. After the placement, Ms Chen Ni's shareholdings (including deemed interests) will be reduced to 280 million shares representing 70.0% of Sinomem's issued share capital.

Suntar Xiamen entered into an agreement with Xiamen Resources Group Co., Ltd., a company whollyowned by the Xiamen municipal government to establish a joint venture company, named Suntar Desalination, in Xiamen, Fujian Province, PRC. Suntar Xiamen holds a 51% equity interest in Suntar Desalination, while Xiamen Resources Group Co., Ltd, holds the remaining 49% interest.

On 14 May 2003, our Company acquired all of Suntar Singapore's issued and paid-up share capital from our Executive Directors, Dr Lan Wei Guang and Chen Ni, for a consideration of S$5,999,988 based on the audited NTA of Suntar Singapore as at 31 December 2002. The consideration was satisfied by the issue and allotment of in aggregate 5,999,988 shares of S$1.00 each in the issued and paid-up share capital of our Company to Dr Lan Wei Guang and Chen Ni.

On 14 May 2003, our Company acquired all of the equity interest in Suntar Water from our Executive Directors, Dr Lan Wei Guang and Chen Ni, for a consideration of S$10.00. The consideration was satisfied by the issue of in aggregate ten ordinary shares of S$1.00 in the issued and paid-up share capital of our Company to Dr Lan Wei Guang and Chen Ni.

Two shareholders of Suntar Xiamen, Xiamen C & D Co., Ltd and Xiamen Yuda Stone Co., Ltd., transferred their respective interests of 30.8% and 4.2% in Suntar Xiamen to Xiamen Lanhui. After these share transfers, Xiamen Lanhui holds a 47.9% interest in Suntar Xiamen.

Suntar Xiamen obtained the ISO9001 certification from DNV Certification B.V. of the Netherlands, as a recognition of our commitment to quality assurance and process.

Commenced implementation of ERP and CRM systems to increase the efficiency of our operations and to provide better services to our customers.

Suntar Process was incorporated as a wholly-owned subsidiary of Suntar Singapore to further enhance the research and development of advanced membrane technology.

Suntar Singapore acquired the 21.4% interest in Suntar Xiamen held by Xiamen High-Technology Innovation Center, at a consideration of S$1.1 million, to consolidate our Group's interest in the company. At the same time, another shareholder of Suntar Xiamen, Xiamen University High-Technology Development Centre, transferred its 12.8% interest in Suntar Xiamen to Xiamen Lanhui. Suntar Xiamen was then renamed "Suntar Membrane Technology (Xiamen) Co., Ltd".

Suntar Singapore sold all of its interests in its wholly-owned subsidiary, Suntar Technological Park, to Suntar International. The consideration for the sale was US$1,879,983 based on the unaudited NTA of Suntar Technological Park as at 30 September 2002.

SDPC, through the Ministry of Finance, PRC, awarded us a research and development grant of S$1.3 million to carry out research and development on advanced membrane technology for seawater desalination and wastewater treatment.

Developed advanced membrane technology for MSG production which was appraised by the Fujian Bureau of Science and Technology for its efficacy and effectiveness.

Developed advanced membrane technology for use in the production of beverages including fruit juices and soft drinks. Customers include Swire Coca-Cola Beverages (Xiamen) Co., Ltd., Xianyang Fuan Apple Juice Production Co., Ltd. and Swire Coca-Cola Beverages (Hefei) Co., Ltd.

With the growth of Suntar Xiamen, Xiamen C & D Co., Ltd, Xiamen University High-Technology Development Centre, Xiamen High-Technology Innovation Centre and Xiamen Yuda Stone Co., Ltd. invested in and became shareholders of Suntar Xiamen. The company was renamed as "Xiamen University Suntar Membrane Scitechnology (Xiamen) Co., Ltd".

In line with the growth of our business, we re-located to larger premises at Xinye Building in Xiamen. These new premises, with an area of 3,949 sq meters, comprise a production workshop, research and pilot-testing laboratory, engineering design center and office space.

Developed an advanced membrane technology for landfill leachate treatment. The efficacy and effectiveness of this advanced process was appraised by the Fujian Bureau of Science ad Technology and the PRC Ministry of Construction in March 2000.

SDPC awarded Suntar Xiamen a state high-technology pilot project titled "Membrane Technology for Water and Wastewater Treatment". Under the terms of this project, Suntar Xiamen was granted approximately S$1.2 million by the Xiamen Municipal government in October 2001 to develop an advanced membrane process and to build a pilot plant for landfill leachate treatment.

Achieved an important milestone by successfully developing our advanced membrane technology for use in the production of cephalosporin C, an important pharmaceutical ingredient required for the production of several types of antibiotics. This system was first applied by Lukang Group, followed by Hisun, CSPC Group and HPGC Group. These customers are large pharmaceutical companies listed on stock exchanges in the PRC or Hong Kong.

Successfully developed our advanced membrane technology for use in the production of Vitamin C. This technology was first applied by JSPC and subsequently by NCPC Group, CSPC Group and NEPC Group.

Suntar Xiamen was elected as a council member of the China Membrane Industry Association, and our Managing Director, Dr Lan Wei Guang, was appointed as a director of the China Membrane Industry Association.

Developed an advanced membrane process and tailor-made membrane equipment for use in the production of 6-APA, an important intermediate of semi-synthesis antibiotics. This customized membrane system was successfully applied in the commercial production of 6-APA by our customer, Jiangxi Dongfeng Pharmaceutical Co., Ltd. The efficiency and effectiveness of this advanced membrane process used in our membrane system was appraised and confirmed by the PRC Ministry of Education under the auspices of the PRC Ministry of Science and Technology in 2000.