CSE

These figures have not been audited.

		Group				Company
		S$'000		%	S$'000		%
		2000	1999	Change	2000	1999	Change
1.(a)	Turnover	105,604	55,878	89	29,604	50,159	(41)
1.(b)	Investment income	0	0	0	0	0	0
1.(c)	Other income including interest income	315	381	(17)	864	427	102
2.(a)	Operating profit before income tax, minority interests, extraordinary items, interest on borrowings, depreciation and amortisation, foreign exchange gain/(loss) and exceptional items	19,557	9,834	99	4,650	9,283	(50)
2.(b)(i)	Interest on borrowings	828	28	2857	686	19	3510
2.(b)(ii)	Depreciation and amortisation	1,101	670	64	437	388	13
2.(b)(iii)	Foreign exchange gain/(loss)	497	141	252	578	182	218
2.(c)	Exceptional items	0	0	0	0	0	0
2.(d)	Operating profit before income tax, minority interests and extraordinary items but after interest on borrowings, depreciation and amortisation, foreign exchange gain/(loss) and exceptional items	18,125	9,277	95	4,105	9,058	(55)
2.(e)	Income derived from associated companies	2	162	(99)	0	0	0
2.(f)	Less income tax	3,719	1,618	130	962	1,445	(33)
2.(g)(i)	Operating profit after tax before deducting minority interests	14,408	7,821	84	3,143	7,613	(59)
2.(g)(ii)	Less minority interests	283	0	NM	0	0	0
2.(h)	Operating profit after tax attributable to members of the company	14,125	7,821	81	3,143	7,613	(59)
2.(i)(i)	Extraordinary items	0	0	0	0	0	0
2.(i)(ii)	Less minority interests	0	0	0	0	0	0
2.(i)(iii)	Extraordinary items attributable to members of the company	0	0	0	0	0	0
2.(i)(iv)	Transfer to/from Reserve Fund	0	0	0	0	0	0
2.(i)(v)	Transfer to Capital Reserve	0	0	0	0	0	0
2.(i)(vi)	Transfer to Reserve Fund	14,125	7,821	81	3,143	7,613	(59)
2.(j)	Operating profit after tax and extraordinary items attributable to members of the company	14,125	7,821	81	3,143	7,613	(59)

*NM - NOT MEANINGFUL

Group Figures
		Latest year	Previous year
3.(a)	Operating profit [2(g)(i) above] as a percentage of turnover [1(a) above]	13.60%	14.00%
3.(b)	Operating profit [2(h) above] as a percentage of issued capital and reserves at end of year	336.15%	21.89%
3.(c)	Earnings per ordinary share for the year based on 2(h) above after deducting any provision for preference dividends:-
3.(c)(i)	Based on existing issued share capital	5.45 cents	3.30 cents
3.(c)(ii)	On a fully diluted basis	5.33 cents	3.30 cents
3.(d)	Earnings per share based on 2(j) above:-
3.(d)(i)	Based on existing issued share capital	5.45 cents	3.30 cents
3.(d)(ii)	On a fully diluted basis	5.33 cents	3.30 cents
3.(e)	Net tangible asset backing per ordinary share	2.14 cents	14.42 cents

		Group			Company
		S$'000		%	S$'000		%
		2000	1999	Change	2000	1999	Change
4.(a)	Sales reported for first half year	44,087	34,902	26	16,028	31,672	(49)
4.(b)	Operating profit [2(g)(i) above] reported for first half year	6,140	3,846	60	1,862	3,916	(52)
4.(c)	Sales reported for second half year	61,517	20,976	193	13,576	18,487	(27)
4.(d)	Operating profit [2(g)(i) above] reported for second half year	8,268	3,975	108	1,281	3,697	(65)

5.(a) Amount of any adjustment for under or overprovision of tax in respect of prior years

NIL

5.(b) Amount of any pre-acquisition profits

NIL

5.(c) Amount of profits on any sale of investments and/or properties

Sale of investments/properties	$Profit/(Loss)
NIL

(a) By Activities	Industrial Business	IT Consulting	eBworx	Consolidated Total
2000
Turnover (S$)	70,430	21,916	13,258	105,604
Profit before tax ($)	12,543	3,864	1,720	18,127
Return on Sales (%)	17.81	17.63	12.97	17.17
1999
Turnover (S$)	13,861	37,018	4,999	55,878
Profit before tax ($)	3,102	5,766	572	9,440
Return on Sales (%)	22.38	15.57	11.44	16.89

(b) By Geographical markets	Singapore	Asia	The Americas	Europe/ Middle East	Consolidated Total
2000
Turnover ($)	32,142	12,134	51,195	10,133	105,604
Profit before tax ($)	3,968	3,316	8,168	2,675	18,127
Return on Sales (%)	12.34	27.33	15.95	26.40	17.17
1999
Turnover ($)	43,694	7,655	3,770	759	55,878
Profit before tax ($)	7,185	1,622	353	280	9,440
Return on Sales (%)	16.44	21.19	9.36	36.89	16.89

(c) Backlog - S$ million
Year	Industrial Business	IT Consulting	eBworx	Consolidated Total
2000	28.8	21.6	9.3	59.7
1999	15.8	42.3	4.4	62.5

The backlog for IT Consulting as at 31 December 2000 is $21.6 million, of which $13.0 million will be delivered in FY 2001.

7.(a) Review of the performance of the company and its principal subsidiaries

In FY2000 turnover increased by 89% to $105.6 million, compared with $55.9 million for 1999. In tandem with the increase in turnover, profit after tax rose 81% to $14.1 million (1999: $7.8 million). During the year, the Group completed two major acquisitions: W- Industries Inc. in United States of America and Servelec Group Limited in United Kingdom. W-industries and Servelec contributed 47% and 10% to the Group's turnover and 38% and 15% to the Group's profit before tax respectively.

Based on the full year results, the basic earnings per share rose 65% to 5.45 cents from 3.30 cents previously while net tangible assets decreased by 85% to 2.14 cents from 14.42 cents, after writing off 30.1 cents of goodwill per share.

The Industrial business unit, which focuses primarily in the oil & gas and energy sectors, achieved a record growth in turnover of 408% from $13.9 million in 1999 to $70.4 million in 2000. Profit before tax increased by 304% to $12.5 million in 2000 (1999: $3.1 million). The strong growth was attributed to the acquisition of W-Industries Inc and Servelec Group Limited.

Turnover of the IT consulting business unit decreased by 41% to $21.9 million (1999: $37.0 million). Profit before tax decreased by 33% to $3.9 millions (1999: $5.8 million). The decline in turnover and profit was as a result of planned efforts to move away from low-margin hardware-intensive projects to more value-added services to ensure better capital deployment and returns.

The turnover of the eBworx grew by 165% from $5.0 million in 1999 to $13.3 million in 2000. Profit before tax increased by 201% to $1.7 million (1999: $0.6 million). The business unit completed its restructuring exercise and was spun off as a separate entity, eBworx Limited, to give it more automony in operations to meet the challenges of a fast moving and evolving market place. The rapid growth in its regional business fuelled by the strong demand for its e-business solutions in the financial sectors in Malaysia and Philippines and semiconductor industries in Taiwan.

7.(b) A statement by the Directors of the Company on whether "any item or event of a material or unusual nature which would have affected materially the results of operations of the Group and Company has occurred between the date to which the report refers and the date on which the report is issued". If none, to include a negative statement.

In the opinion of the Directors, no item or event of a material or unusual nature has affected materially the results of the operations of the Group and Company between the date to which this report refers and the date on which this report is issued.

8. Commentary on current year prospects

The acquisition of W-Industries and Servelec has given the Industrial business unit a global platform for growth. The growth for the business unit will also be fuelled by the newly set-up presence in New Orleans, Baton Rouge and Lafayette to serve the Gulf of Mexico from the State of Louisiana, USA as well as strong demand for its services in Malaysia and Vietnam. Backlog as at 31 December 2000 stood at $28.8 million.

The IT Consulting Business Unit expects to benefit from the focusing and the restructuring efforts only in 2002. Backlog as at 31 December 2000 stood at $21.6 million, of which $13.0 million will be delivered in FY2001.

Strong demand for e-commerce solutions in the banking and financial sector will fuel the growth of eBworx in 2001. Backlog as at 31 December 2000 stood at $9.3 million.

The world economic outlook remains uncertain and is a concern to the Group.

However, barring any unforeseen circumstances, the Group expects turnover and profits in the current financial year to grow, although not at the same growth rate as that achieved in 2000.

9. Dividend

(a) Any dividend declared for the present financial period? None

(b) Any dividend declared for the previous corresponding period? None

(c) Total Annual Dividend

	Latest Year ()	Previous Year ()
Ordinary	0	0
Preference	0	0
Total:	0	0

(d) Date payable

NIL

(e) Books closing date

NIL

(f) Any other comments relating to Paragraph 9

NIL

10. Balance sheet

	CSE Group		CSE Company
	Dec 2000	Dec 1999	Dec 2000	Dec 1999
	S$000	S$000	S$000	S$000
Fixed assets	5,586	1,496	2,018	800
Subsidiary Company	0	0	90,146	3,183
Joint Venture	44	0	50	0
Associated company	1,078	353	0	189
Other Investment	1,001	0	0	0
Intangible assets	539	1,252	0	154
Other long term receivables	3,766	0	0	0
	12,014	3,101	92,214	4,326
Current assets
Projects-in-Progress	13,419	10,562	6,599	10,406
Stocks	495	0	0	0
Trade Debtors	34,779	9,611	10,624	7,716
Other Debtors, Deposits and Prepayment	1,092	645	231	442
Amount due from Subsidiary Companies	0	0	10,117	2,136
Amount due from Associate Companies	0	571	0	571
Amount due from Related Companies	0	838	0	838
Fixed deposits	382	15,632	349	15,594
Cash and Bank Balances	6,787	7,714	702	6,742
	56,954	45,573	28,622	44,445
Current liabilities
Trade creditors and accruals	15,662	6,694	6,152	6,293
Bank Loan, unsecured	13,202	0	10,197	0
Projects-in-Progress	3,575	3,588	1,523	3,049
Short Term Loan - CSE Group
Amounts due to subsidiary companies	0	0	2,170	1,208
Amounts due to associated companies	20	0	0	0
Amounts due to related companies	0	19	0	0
Provision for warranties	1,258	952	947	897
Provision for Tax	3,059	1,688	1,134	1,462
	36,776	12,941	22,123	12,928
Net Current Assets	20,178	32,632	6,499	31,517
Long Term Liabilities
Amount due to Bankers	26,010	0	26,000	0
Total Assets	6,182	35,733	72,713	35,843
Capital and reserves
Share capital	13,174	11,957	13,174	11,957
Share premium	45,049	12,538	45,049	12,538
Revenue reserve	(54,016)	11,169	14,490	11,348
Foreign Currency Translation Reserve	(5)	69	0	0
Minority Interest	1,980	0	0	0
	6,182	35,733	72,713	35,843

11. Details of any changes in the company's issued share capital

(a) Changes in Issued Share Capital
On 18 July 2000, the Company issued 5,843,532 ordinary shares at par value of S$0.05 each for S$1.1419 per share to partly satisfy the consideration for its acquisition of Servelec Group Ltd.
(b) Share Options Under the Company's Executives' Share Option Scheme
Since 30 June 2000, the Company has granted 8,350,000 shares options to the participants of the CSE Systems & Engineering shares options Scheme to subscribe for 8,350,000 unissued ordinary shares of $0.05 each. The Company has cancelled 3,841,000 shares options.
As at 31 December 2000, there were unexercised options for 14,570,000 unissued ordinary shares of S$0.05 each.

12. Comparative figures of the group's borrowings and debt securities

(a) Amount repayable in one year or less, or on demand

As at 31/12/2000		As at 30/6/2000
Secured	Unsecured	Secured	Unsecured
0	13,202,000	0	0

(b) Amount repayable after one year

15. Economic Value Add (EVA)

EVA for the full year 2000 was S$6.4 million on average EVA Capital of S$81.1 million as compared to 1999 EVA of S$5.0 million on average EVA Capital of S$26.5 million. The Group's Weighted Average Cost Of Capital (WACC) was 10.5% for the last three financial years.

BY ORDER OF THE BOARD Yvonne Choo
Company Secretary
21/2/2000