I am pleased to report that your business has achieved over S$100 million in revenue in FY2011 despite challenging market conditions. The world is at a crossroad where the developed countries are undergoing a debt deleveraging cycle and developing countries are trying to maintain growth without inflating the next bubble. Though there will be a difficult road ahead, we believe that the Asian economies with relatively better fundamentals and rising incomes will eventually emerge stronger.

In the past 16 years, Asiatravel’s resilient business model has weathered the Asian Financial Crisis, SARS and natural disasters and has continued to grow. We now face increasing competition from global travel companies who want to capture a share of the burgeoning travel and tourism market in Asia. We believe our timely transformation into a total travel reservation provider, with first mover advantage into the online sale of attraction and theme parks tickets as well as broadening our distribution channel into B2B, will differentiate us from the competition. These new initiatives have impacted our bottom-line in FY2011 as we have yet to realise economies of scale to offset the increase in costs. However, we believe we are planting the seeds for sustainable long term growth and scalability of the Asiatravel platform.

In the coming year, we will also focus on raising the profile of the Asiatravel.com brand, promoting our attractive 5% cash rebate customer loyalty program and forming strategic partnerships. We believe all our efforts will usher in a growth phase for your company.

Products & Distribution Channels

We have successfully transformed into a total travel reservation service provider with the launch of online tours & packages booking in FY2010 and online flight booking in FY2007. We intend to bundle these travel products with our core B2C hotel reservation business and offer compelling travel savings to our customers.

Hotel

We continue to strengthen our relationship with hotel suppliers. Our network has grown to over 6,800 hotels with direct access to their room inventories and selection of over 50,000 hotels worldwide. In FY2012, we will be deepening our partnerships with some well-known global hotel chains by integrating our systems. Such efforts will significantly increase our access to room allotment and ability to offer competitive room rates.

We grew our room nights sold online to over 600,000 in FY2011 from 579,000 in FY2010. Since the launch of the online B2B platform in FY2010, online B2B room nights have almost doubled from 58,000 to over 100,000 in FY2011. In the B2C segment, we face increasing competition which has resulted in higher Advertisement and Promotion (“A&P”) costs of S$2.4 million in FY2011 compared with S$1.2 million in FY2010. While we will meet our competition with more A&P spending, we are implementing new initiatives and exploring alternative channels to reach more customers on a cost effective basis. For example, we are actively collaborating with banks, corporates and membership organizations to leverage on their existing customer database. These new initiatives will incur customer acquisition costs, however such costs would only be incurred on a success basis.

Flights

We maintained the number of air tickets sold online with 23,500 in FY2011, up from 23,100 in FY2010. Asiatravel’s online flight engine boasts the largest number of departure cities in Asia and a multi-currency online payment gateway that allows customers to settle their bookings in local currencies. We continue to enhance our flight offerings with over 140 airlines to choose from and access to discounted and promotional fares for selected airlines. In the coming year, we will be launching flight plus hotel packages, enabling our customers to enjoy their travel vacations at lower prices.

Tours & Packages

The online tours & packages business launched in 2010 saw bookings rise two-fold from 126,000 pax in FY2010 to over 260,000 pax in FY2011. Our innovative package engine allows customers to combine their favourite sightseeing tour and/or attraction tickets with our vast selection of hotels. We now offer online tour packages around the clock with instant confirmation in 17 countries across Asia.

Group Buying

We launched our group buying website, atCrazy.com in November 2010 and revenues have crossed the S$1 million mark for FY2011. This website caters to a wide range of customers looking for bargain deals from a trusted and reliable merchant. We offer a diverse range of products from travel, dining to lifestyle at deep discounts and encourage you to visit our website (www.atcrazy.com).

Branding & Loyalty

We have intensified our branding efforts to reach a wider population to communicate our product’s quality and service consistency. During the financial year, your company was a proud recipient of the Singapore Prestige Brand Award 2011 under the Regional Brand Category. This award recognizes local brands which have successfully penetrated and established a significant presence through strategic branding in at least 5 foreign markets. In addition, your company won the Most Transparent Company Award 2011 organized by the Securities Investors Association (Singapore) for the third time in a row. We continue to actively engage our shareholders to keep them abreast of our expansion plans and progress.

Since the launch of Asiatravel Cash Rewards Program in November 2010, over 100,000 customers have signed up. We believe our simple loyalty program which offers up to 5% Cash Rebate allows our customer to see more value in booking with Asiatravel. Moreover, friends, families and small businesses can aggregate their travel bookings to enjoy these savings faster. I encourage you to spread the word to as many people as possible.

Marketing & Strategic Partnerships

We launched co-brand partnerships with HSBC and Maybank in June 2011, offering a 6% cash rebate to their respective credit card holders when they book their travel vacations with Asiatravel. The response has been encouraging to both parties, and we hope to deepen the relationship by creating more value for our bank partners and their customers.

The Company is in the process of working with strategic partners to combine our regional travel franchise with their existing customer base to unlock value for all. We are excited in collaborating with partners on new initiatives such as using membership points to redeem travel products.

In addition, we will be rolling out the travel discount voucher program in FY2012 through both online and offline media channels. We believe this serves as a strong incentive for people to book with Asiatravel and increase awareness of our newer offerings such as online packages. For shareholders and friends to enjoy this benefit, please visit www. asiatravel.com/cv/shareholders to collect S$200 worth of e-vouchers. We will keep this offer open till 30 June 2012.

China Outbound Travel

I am pleased to inform that we have increased our stake in FreeNEasy Pte Ltd (“FNE”) from 19.9% to 50.0% on 30 September 2011 to tap the growing outbound China travel market. FNE was incorporated in Singapore on April 2004 to service the China Outbound Travel market. It has a network of five offices and retail outlets in China and operates a Call Centre and Online Reservation Office in Guangzhou. In addition, FNE has an online B2C website (www.fnetravel.com) and a B2B wholesale channel with 30,000 China travel agents registered.

FNE’s revenue grew from S$4.03 million in FY2006 to S$21.97 million in FY2011, which represents a 5-year Compound Annual Growth Rate (“CAGR”) of 40% per annum. Furthermore, FNE’s gross profit grew from S$0.34 million in FY2006 to S$2.23 million in FY2011, which represents a 5-year CAGR of 46% per annum. FNE is now profitable and the Group will be consolidating its results as a 50% owned subsidiary in FY2012.

In Appreciation

In FY2012, I am confident that we will see new initiatives, achievements and strategic partnerships to leverage on the valuable Asiatravel platform that we have built over the last 16 years. On behalf of the Board, I would like to express my gratitude to our management and staff for their hard work as well as loyal customers, shareholders, travel and business partners for their continued support in realising our vision of a Pan-Asia online travel reservation company.