(Click on the links below to view the following sections)

• Enterprise Risk Management
• Mid-Term Plan
• Research and Development
• Human Resources Management
• Corporate Social Responsibility
• Customer Relationship Management (CRM)

CORPORATE AND BRAND IMAGE AND REPUTATION
To uphold corporate and brand image and reputation we continue to strengthen consumer perception of Cerebos products through our improved quality control and established standards of excellence. During the development and manufacture of new products, we continue to maintain appropriate measures to ensure product safety, quality and efficacy. In addition, we are investing in more initiatives to further safeguard our image, brand and reputation, including the enhancement of our communication channels and networks as well as regular updating and testing of crisis management processes to enable the Group to address any potential issues.

BUSINESS DEVELOPMENT
The Group, in line with its vision to enhance shareholder value, recognises that any new business initiative including the launch of new products, mergers and acquisitions etc. will have both opportunities and risks. In order to minimise the risk in any new venture, a process to evaluate and assess new business opportunities has been put in place together with close monitoring to measure and ensure that both financial and operating milestones and targets are achieved and appropriate action plans are taken to manage any significant deviation. Any new business opportunities will need to be in line with the Group’s core businesses.

REGULATORY ENVIRONMENT
On the Regulatory Environment front, we continue to ensure good governance and compliance of our products and processes to the regulatory requirements. Additionally we keep abreast of regulatory developments and trends globally and within ASEAN to remain at the forefront of our industry.

MANUFACTURING HEALTH AND SAFETY
We continue to improve control measures to enhance the environment of our offices and manufacturing facilities for the benefit of employees and consumers in line with health & safety requirements. We continuously streamline our manufacturing processes and take measures to minimise business interruption and down time in the manufacturing process.

SUPPLY CHAIN MANAGEMENT
We are closely monitoring the implementation of our sourcing strategies to secure the continuous supplies of raw materials which meet our requirements. Special efforts have been put in understanding the risks involved in dealing with the situation of single source supply of critical materials with the objective of establishing a feasible back up plan. In 2006 Cerebos acquired Amcor Closure Asia Pacific Inc. in the Phillipines.

This acquisition is part of a vertical integration process that secures a key component of the packaging material of Cerebos’ BRAND’S® products and will improve Cerebos’ efficiency in supply chain management for its BRAND’S® business in Asia.

MANAGEMENT OF CORPORATE INFORMATION AND COMPLIANCE TO CODE OF ETHICS
We continue to review and improve our corporate policies and procedures to avoid misuse or poor handling of confidential information and to prevent fraud. We have implemented an independent“whistle blowing” programme to help improve corporate transparency. Continuous efforts are taken by the Company’s senior management and human resource department to inculcate in our employees an understanding of the need to comply with Cerebos’ Code of Ethics.

Moving ahead we will continue to monitor and assess both the implementation of the ERM plans as well as possible new business risks on a regular basis. This process allows us to arrive at periodic checkpoints to make certain that we are effectively addressing the identified potential risks.

Overall the Board Risk Management Committee (whose role is currently performed by the Audit Committee) provides the guidance and general supervision of the ERM activities recommended by the Risk Management Working Committee headed by the Chief Risk Officer (currently performed by the President & CEO). The Group Internal Audit Department reviews the effectiveness of the risk management process and ensures internal controls are in place.

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MID-TERM PLAN
ROADMAP TO ACCELERATED GROWTH
Cerebos commenced the final year of its threeyear strategic plan in 2006 with clear objectives to position our core brands firmly in the minds of our consumers and accelerate growth. In FY06/07, the third year of the Mid-Term Plan (MTP), a number of our brands scored impressive achievements, which reaffirm the strategies and demonstrate the soundness of our MTP.

For the coming MTP FY07/08 to FY09/10, Cerebos will continue to focus on strengthening consumer loyalty in our brands and products. Significant investments are set aside for branding, product innovation and in creating the right consumer experience with our brands and products. Entering the first year of our new MTP, we are confident that the achievement of the previous MTP together with the future direction, strategies and planned roadmap will bring accelerated growth and sustained value for all stakeholders.

BRAND’S HEALTH SUPPLEMENTS
BRAND’S was continuously voted as Asia’s Most Trusted Brand by Readers’ Digest in the vitamins and health supplements category. This is a strong evidence of consistent engagement with our consumers and the result of company-wide efforts to enhance our product and service quality. Cerebos will continue to sustain and invest in its CRM initiatives to strengthen our understanding of consumers’ needs and build customer loyalty.

The new packaging for BRAND’S liquid products, featuring a first-of-its-kind triple-safety cap, as well as our unwavering commitment to being a“Health Partner for Life” continue to play a key role in building consumer confidence and relevance.

BRAND'S goal to provide scientifically proven products for consumers continues to receive official recognition and endorsement. BRAND’S® Essence of Chicken was conferred the Grand Prize by the international scientific panel of the International Physiological Anthropology Design Award, supporting the product’s mental alertness efficacy. In Taiwan, BRAND’S® Sesamin with Schisandra Extract received the Health Food Certificate from the authorities, certifying the product for liver support. Recently BRAND’S® Xu Pei Clam Essence became the first product of its kind to obtain the Health Food Certificate for its ability to protect the liver.

Cerebos will continue to make strategic investments in R&D to develop science-based health supplements and offer better and new products to support the demanding lifestyles of today’s consumers. Cerebos has received a grant from the Economic Development Board (EDB) of Singapore to support its continuous efforts in its R&D activities.

COFFEE
Our focus on brand building in line with consumer trends is paying dividends in our coffee business. Riva continues to emerge as a stronger category player with its new contemporary jar and additional marketing initiatives, creating the necessary excitement and brand experience among the young and trendy coffee drinkers.

New initiatives with the acquired boutique players Atomic Coffee Roasters and Caffe L’Affare, a specialty brand in New Zealand, have given us a stronger foothold in the premium gourmet coffee market. Robert Harris cafes remain as the largest franchise in New Zealand with a milestone total of 50 outlets, further strengthening our presence in the coffee arena in New Zealand.

In food service, Cerebos continue to invest in Mocopan and its expresso related services to ensure stronger relationships with its trade partners and higher consumer confidence.

The healthy growth and promising developments in our coffee busines through the final year of our MTP have encouraged management to continuously invest in this category as another major business pillar after BRAND’S health supplements.

SAUCES
In western style sauces, Cerebos continues to strengthen its major brands Fountain and Gravox. Major brand building and trade initiatives were completed, followed by product development efforts for greater consumer convenience. Fountain maintained its lead in the market after its successful foray into the marinades segment. Gravox remained as a market leader after expanding its range of liquid gravies in more convenient formats.

For our Asian sauces, Cerebos has implemented its strategies of geographical expansion into new territories and continued brand building in selected markets. Woh Hup continues to build on its success in Malaysia and Singapore with more focus on brand building. In Beijing, Woh Hup products have been gaining popularity since its launch last year and are on the right track to gain a leading position in the market.

Asian Home Gourmet continues to be distributed in high-end supermarket chains in various markets worldwide. With expanded exposure in the North America, Europe and Australasia, and traditional markets in Asia, Asian Home Gourmet is now a truly international brand.

CLEARLY DEFINED BUSINESS DIRECTION AND FOCUS FOR THE NEW MID-TERM PLAN
The new Mid-Term Plan FY07/08 to FY09/10 provides thoroughly considered business direction and investment focus based on intensive analyses of industry and consumer trends to achieve accelerated and sustainable growth. The management team has reviewed the various opportunities that we need to pursue, and agreed on the required investments to achieve the full potential of our brands, products, infrastructure and human capital. A great deal of time and effort was spent to formulate this meticulous and structured MTP roadmap, and we are confident it is worthwhile.

With the implementation of the new MTP, we aim to build an already formidable Cerebos into an organisation that is fast, responsive, successful and focused on creating sustained value for all stakeholders.

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RESEARCH & DEVELOPMENT
Research and Development (R&D) lies at the core of Cerebos’ strategy for growth. Ensuring quality and safety in product development is paramount, and developing products that satisfy consumers’ needs is key to sustainable growth.

The underlying objective in all these efforts is to provide Cerebos with a clear advantage over our competitors, to ensure that Cerebos stays at the forefront of the industry.

Some of the key achievements of our R&D department during the year include:

EXPANSION OF R&D CAPABILITIES SUPPORTED BY A GRANT FROM THE ECONOMIC DEVELOPMENT BOARD OF SINGAPORE
Cerebos plans to expand its R&D facilities in Singapore to at least double the current size and possibly up to 4 times. The project is supported by a grant awarded by the Economic Development Board (EDB) in Singapore. The expansion will establish Singapore as the regional Research Hub for all of the company’s health supplements products including BRAND’S® Essence of Chicken. This significant enhancement of our facilities reinforces that Cerebos is a research-based health supplements company. It will also deliver tangible benefits to consumers through the new products developed and tested with consumer research.

The expansion of capabilities will also enhance our R&D with two technologies that are still in their infancy in Singapore, and BRAND’S® health supplements will be the first in the health supplements industry in the region to harness these capabilities:

• Non-invasive brain EEG measurement for health food or supplement evaluation technology to measure the effect of a health food or supplement on brain function
• Sensory science and senso-metrics technology
  – using objective scientific criteria to assess consumer sensory and taste preferences for a health food or supplement

BRAND’S® range of health supplements is successful because consumers know that we take a science-based approach to test and develop our products. Few other food and health supplements companies can match our focus and investments in R&D. With this new expansion, we are even better positioned to develop products backed by scientific research to meet the evolving needs of our consumers.

HEALTH FOOD CERTIFICATE OBTAINED FOR XU PEI CLAM ESSENCE IN TAIWAN ROC
Through concerted efforts with the Taiwan ROC team, we were able to obtain Health Food Certification for our recently launched Xu Pei Clam Essence. Comprehensive scientific and technical research and documentation were prepared to support the application before it could be approved by the local health authorities. This certifies that our product is effective in protecting the liver and helped to drive increased sales.

DISCOVERY OF PROBEPTIGEN™, THE ACTIVE COMPOUND IN BRAND’S ESSENCE OF CHICKEN
A major discovery was made during the year: Named ProBeptigenTM, this active compound was discovered in BRAND’S® Essence of Chicken through research from BRAND’S Health Science Centre, Cerebos Pacific Limited and leading scientific researchers to unlock the secret behind BRAND’S® Essence of Chicken. ProBeptigenTM has been identified as a bioactive molecule present in BRAND’S® Essence of Chicken and is an essential element that may enhance mental performance. The discovery of the active compound in BRAND’S® Essence of Chicken, is a further step in our journey of understanding the efficacies of our flagship health supplement. While the health benefits of this active compound on mental performance have been verified, investigations and tests are still underway to determine the mechanism of action. This scientific research will enable us to better understand how BRAND’S® Essence of Chicken helps consumers perform at their very best.

ASEAN ECONOMIC COMMUNITY –
REGULATORY HARMONISATION FOR HEALTH SUPPLEMENTS
R&D Department continues to work closely with our Corporate Affairs Department to ensure that Cerebos is prepared for the eventual development of an ASEAN Economic Community. Already into its 8th meeting, the ASEAN Consultative Committee for Standards and Quality Traditional Medicines & Health Supplements Product Working Group (TMHS PWG) has been deliberating and drafting the harmonised regulations. Cerebos has been actively contributing to the process via its leading role in the ASEAN Alliance of Health Supplement Associations. R&D Department provides the Scientific and Regulatory expertise and input to the ASEAN Common Technical Requirements (ACTR) as well as the ASEAN TMHS PWG Scientific Committee (ATSC), ensuring that Cerebos remains at the forefront of developments affecting the future of the industry in ASEAN.

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HUMAN RESOURCES MANAGEMENT

ESTABLISHING THE FOUNDATIONS FOR EXCELLENCE
Building an engaged workforce is integral in our pursuit towards people excellence in anticipation of the challenges ahead.

FY06/07 saw the Human Resource (HR) Team working towards building a strong foundation in our human capital systems and processes.

In Cerebos, employees are our most valuable asset. They are our ambassadors who represent all that Cerebos believes as important.

We believe that an engaged workforce is one which is passionate and driven toward delivering business excellence and outstanding results. At Cerebos, we challenge and empower our employees to achieve their best through a culture that encourages continuous improvement, learning and community involvement.

CEREBOS COMPETENCY MODEL –
DRIVING BUSINESS SUCCESS
High performing organisations share a common trait – a set of well-defined competencies and a distinctive culture which complements and enhances the organisation’s ability to achieve sustainable competitive advantage in all business situations.

We have developed a Core and Leadership competency model that supports all aspects of HR management and development, including training, leadership development, succession planning, workforce planning, recruitment & selection, performance management, compensation and career development (refer to Figure 1).

The Core and Leadership competencies illustrate the specific behaviours that are critical to the success of Cerebos. Taken together, it helps build and drive a distinctive Cerebos culture – one which we believe is vital to the success of our business.

QUALITY WORK-LIFE –
ACHIEVING ANOTHER MILESTONE
For the year in review, Cerebos was awarded the “Leading HR Practices in Quality Work- Life Award 2007” and “Leading HR Practices in Health & Employee Wellness Award 2007” by the Singapore Human Resources Institute. This is in recognition of our commitment to building an engaged workforce with our effective and innovative quality work-life and wellness activities for all levels of the organisation.

COMMUNITY INVOLVEMENT –
AN INNOVATIVE APPROACH
Community involvement is an important cornerstone of Cerebos’ success as a socially responsible organisation. Taking an innovative approach, Cerebos integrated the Corporate Social Responsibility (CSR) elements in all work-life and wellness activities. Employees participating in our weekly or monthly activities would earn charity points. For every point earned, Cerebos would make a contribution of $5 to our adopted charity, the Straits Times School Pocket Money Fund. This was also integrated into our Standard Chartered Marathon and JP Morgan runs, where Cerebos would donate $100 for every kilometre ran. In this way all staff are encouraged to be actively involved in giving back to the community while staying healthy at the same time.

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CORPORATE SOCIAL RESPONSIBILITY

Good Corporate Social Responsibility (CSR) is a fundamental business principle for Cerebos. It reflects our efforts to achieve sustainable outcomes by committing to good business practices and standards. We believe that branding and reputation are enhanced by good CSR practices.

Value creation for all stakeholders, with an eye on the communities where we operate, is now a part of our business strategy. We are beginning to look closely at our CSR contributions following the Singapore Compact for CSR terminology of the “triple bottom line”. This encompasses economic value (bottom line), social value (charity and community involvement including worker welfare and volunteerism), and environmental value (best practices and investments in enviro-friendly practices). We have rolled out our CSR standpoint to all our local operations and activities so as to make a positive difference in people’s lives. Our donations and sponsorship policy focuses on Healthcare, Education, Community Support and Sports, while we continue to encourage Work- Life balance among employees.

Here is a cross-section of the Cerebos Group’s CSR initiatives carried out during the year:

HEALTHCARE
Cerebos gives its full support to community healthcare activities. We continue to support the aims of the Singapore National Healthy Lifestyle Campaign, spreading the message of proactive health maintenance through regular exercise, a balanced diet and health supplements where appropriate.

As an established company in the Singapore healthcare products sector, Cerebos was acknowledged by IE Singapore as having contributed to the country’s reputation as a premier healthcare hub in the region in its publication entitled: “Singapore healthcare for the world”.

This was further reinforced when we announced plans to expand our research and development facilities in Singapore to at least double the current size and possibly up to four times. The project will be supported by a grant awarded by the Singapore Economic Development Board.

In Thailand, we continue to grant scholarships to Thai researchers to help them pursue studies in science and nutrition.

In Taiwan ROC, we sponsored a health campaign to improve childrens’ eating and exercise habits in a bid to combat the phenomenon where the current generation of Taiwanese children are becoming shorter. Cerebos staff gave talks to about 2000 elementary school students to teach them about physical improvement programmes and nutrition improvement.

EDUCATION
In Thailand, longstanding programmes include the BRAND’S Summer Camp (in its 18th year) which coaches students for university entrance examinations.

Another well established activity is BRAND’S International Crossword Competition (in its 22nd year) which continues to promote better English.

The first BRAND‘S Sudoku Challenge was held in Thailand and in Singapore to promote mathematics, mental agility and creativity.

In the PRC, we continue to sponsor more interesting programmes to stimulate young minds. Our joint activity with the newspapers focused on helping stressed-out students preparing for their university entrance examinations. These events were held under the purview of the Ministry of Education in Guangdong and Shanghai and Cerebos was again commended for our good efforts.

COMMUNITY SUPPORT
During the year, we continued the BRAND’S Young Blood programme in Thailand, encouraging youths to donate blood. This community program drew strong public support.

In Taiwan we regularly donate BRAND’S® Essence of Chicken products to help homeless elderly being treated in city hospitals.

In Malaysia, staff actively support the welfare of the less fortunate, working with the Beautiful Gates Foundation - a home for people
with disabilities.

In Singapore we raised over $40,000 through BRAND'S Charity Sales for the Straits Times School Pocket Money Fund (STSPMF) to help needy school children so that they won't go hungry at recess time. This Fund also received over $80,000 raised by staff members running in the Standard Chartered Singapore Marathon, led by our President & CEO Eiji Koike.

Cerebos in Australia and New Zealand once again contributed to the charity Habitat for Humanity by donating money, company food and beverage products and volunteering to help build affordable housing for low-income families. We also helped fund a team of New Zealanders heading to one of the larger coffee growing areas in Ethiopia. In conjunction with Habitat for Humanity this team will be involved in a"building blitz" in Jimma, Ethiopia. The Robert Harris Franchise cafes donated takings from cups of coffee sold during the month leading up to Daffodil day (31 August), to the New Zealand Cancer Society.

Cerebos was also a Gold sponsor of the IE Singapore Global Forum 07 which sets out to help local and Asian businesses become more globally competitive.

ENVIRONMENTAL MANAGEMENT
This year we highlight a few achievements in this area which has become a foremost concern of modern businesses.

In Australia we are committed to saving water. As one of the top 300 water users in New South Wales, the Cerebos Seven Hills factory site has been working very closely with the Department of Utilities, Energy and Sustainability (DUES) to reduce our usage and increase recycling of this limited resource. A water savings plan has been developed, including the installation of additional water metres to measure the current and future consumption within each processing area. Current initiatives include a staff awareness program, improved liquid waste handling processes, reduced-flow toilet systems, and trial of waterless bottle conveyor lubrication.

Also in Australia we are committed to reducing packaging waste that impacts the environment. Packaging is an integral part of our products and is constantly reviewed for its effectiveness and environmental impact. These reviews are conducted using the "Environmental Code of Practice for Packaging" as the guide. We continue to support the principles of the National Packaging Covenant and have been a signatory since mid-2000. A major achievement was changes made in the packaging material used for Foster Clark Custard powder, Tandaco Sage and TDC Seasoning mixes. This resulted in the reduction of approximately 46.7 tonnes of material used per annum.

In New Zealand, our East Tamaki Factory achieved "Enviro-Mark Silver status". Enviro- Mark is an independently audited process to enhance business performance in a number of areas including the following: Achieving health, safety, and environmental legal compliance, reducing environmental risk, increasing resource use efficiency (i.e. water, waste, energy, and raw materials), improving status with stakeholders by demonstrating environmental commitment. East Tamaki is currently working towards the Gold Standard in FY08.

In Thailand, our manufacturing plant has long been certified to ISO 14000 environmental management standard. More recently the plant was further certified OHSAS 18001 (Occupational Health and Safety Assessment System) in April 2007.

The plant was also able to achieve significant energy savings, through an energy saving campaign activated by their in-house energy saving committee, and implemented several initiatives. At the end of FY06/07, we achieved our target in reducing energy consumption per unit i.e. electricity 14% reduction, steam 10.3% reduction, water 9.8% reduction. In terms of emission reductions, we stopped using and removed the standby boiler so there is no more gas emission from this boiler. Our source of steam is now from a nearby power plant which uses natural gas.

While we are committed to good enviromental management, we are aware that we have only“scratched the surface” and much more work remains to be done.

Overall, while we continually receive commendations and encouragement from government ministries and welfare organisations acknowledging our good efforts in CSR, Cerebos intends to continue investing in and growing with the communities where we operate to build a sustainable future for all our stakeholders.

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CUSTOMER RELATIONSHIP MANAGEMENT (CRM)
CONNECTING WITH CONSUMERS WITH WHAT MATTERS MOST

CONSUMERS
It is clearly evident that today’s consumers are faced with a multitude of choices in everyday decisions. Consumers have more options to decide on brands, products and services in every category and in every market. This explosion of choices coupled with enormous amount of information readily available to anyone, anywhere, anytime has made everyday decisions on products and services more complicated than before. Consumers expect much more from the brands they buy, consume or use. Manufacturers have to be able to anticipate their needs, understand what motivates and frustrates them and be able to translate what we know into something that will excite and meet their needs.

MAKING A CONNECTION
Through our Customer Relationship Management (CRM) initiatives, BRAND’S® now interacts with over 1 million consumers a year in 6 countries and over 250,000 with whom we have built closer and stronger bonds over the years. These over 250,000 loyal consumers of BRAND’S® take an active interest in what BRAND’S® do and say and very often, they are the first to tell us if we did not get something right. Such is the deep connection we have established with these advocates. Their fervour and trust in BRAND’S® is testament that the relationship is beyond transactional.

UNDERSTANDING CONSUMERS
Apart from the constant interactions with consumers, BRAND’S® conduct more than 50 research studies each year and invest millions per year in consumer and market understanding. We store what we learn about the consumers in our data warehouse and using advanced data analytics, are able generate insights about the consumers and category which the competition does not see.

We will continue to build on these strengths and leverage them to win and keep more customers for accelerated growth in the next MTP.

CREATING GREAT CONSUMER EXPERIENCES

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