Full Year Financial Statement And Dividend Announcement
Full-year financial statement on consolidated results for the year ended 31 December 1999.


These figures have not been audited.

Group

Company

S$'000

%

S$'000

%

1999

1998

Change

1999

1998

Change
1.(a) Turnover

55,878

46,957

19

50,159

43,577

15
1.(b) Investment income

0

0

0

0

0

0
1.(c) Other income including interest income

381

222

72

427

219

95
2.(a) Operating profit before income tax, minority interests, extraordinary items, interest on borrowings, depreciation and amortisation, foreign exchange gain/(loss) and exceptional items

9,834

7,883

25

9,834

6,751

37
2.(b)(i) Interest on borrowings

28

98

(71)

19

97

(80)
2.(b)(ii) Depreciation and amortisation

670

364

84

388

269

44
2.(b)(iii) Foreign exchange gain/(loss)

141

(13)

1,185

182

(259)

170
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

9,277

7,408

25

9,058

6,126

48
2.(e) Income derived from associated companies

162

21

671

0

0

0
2.(f) Less income tax

1,618

1,401

15

1,445

1,104

31
2.(g)(i) Operating profit after tax before deducting minority interests

7,821

6,028

30

7,613

5,022

52
2.(g)(ii) Less minority interests

0

0

0

0

0

0
2.(h) Operating profit after tax attributable to members of the company

7,821

6,028

30

7,613

5,022

52
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

7,821

6,028

30

7,613

5,022

52
2.(j) Operating profit after tax and extraordinary items attributable to members of the company

7,821

6,028

30

7,613

5,022

52

Group Figures

Latest year

Previous year
3.(a) Operating profit [2(g)(i) above] as a percentage of turnover [1(a) above]

14.00%

12.80%
3.(b) Operating profit [2(h) above] as a percentage of issued capital and reserves at end of year

21.89%

44.40%
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

3.30 cents

2.99 cents
3.(c)(ii) On a fully diluted basis

3.30 cents

2.99 cents
3.(d) Net tangible asset backing per ordinary share

14.42 cents

5.22 cents

Group

Company

S$'000

%

S$'000

%

1999

1998

Change

1999

1998

Change
4.(a) Sales reported for first half year

34,902

25,494

35.90

31,672

25,417

24.61
4.(b) Operating profit [2(g)(i) above] reported for first half year

3,846

2,876

33,73

3,916

2,607

50.21
4.(c) Sales reported for second half year

20,976

21,463

(2.27)

16,487

18160

1.80
4.(d) Operating profit [2(g)(i) above] reported for second half year

3,975

3,152

26.21

3,697

2,415

53.08

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


5.(d) Any other comments relating to Paragraph 5

NIL

6. Segmental Results

(a) By Activities

Industrial Business

Enterprise Integration

Infrastructure & Networking

Consolidated Total
1999
Turnover (S$)

13,860,472

14,355,909

27,661,565

55,877
Profit before tax ($)

3,102,132

4,414,552

1,922,819

9,439
Return on Sales (%)

22.38

30.75

6.95

1
1998
Turnover (S$)

15,564,202

19,030,990

12,361,457

46,956
Profit before tax ($)

3,202,4089

3,164,997

1,602,049

7,429
Return on Sales (%)

20.58

16.63

8.59

1
(b) By Geographical markets

Singapore

Others

Consolidated
Total
1999
Turnover ($)

43,694,262

12,183,684

55,877,946
Profit before tax ($)

7,185,201

2,254,302

9,439,503
Return on Sales (%)

16.44

18.50

16.89
1998
Turnover ($)

35,379,933

11,576,716

46,956,649
Profit before tax ($)

4,906,440

2,423,015

7,429,455
Return on Sales (%)

13.87

21.79

15.82

7. Review of the performance of the company and its principal subsidiaries

Revenue increased by 19% to S$55.9M compared with S$47.0M for fiscal 1998. Profit before tax rose 27% over the same period to $9.4M.

The Group's three divisions, Industrial Business, Enterprise Integration and Infrastructure & Networking contributed 24.8%, 25.7% and 49.5% to group turnover and 32.9%, 46.8% and 20.3% to group pre-tax profit respectively.

The Industrial Business Unit showed a slight decline in both revenue and profit before tax in 1999. The decline was due primarily to lower crude oil prices that led to a delay in capital spending in upstream oil and gas industries. However, the decline was compensated by higher value-added services-based business and better gross margins contributed by maintenance contracts.

The Infrastructure & Networking Business Unit continued to expand strongly in 1999. The increase in turnover and profit before tax arose from more IT networking projects in Singapore.

Save for the proposed acquisition of W-Industries Inc. announced on 18 January 2000, in the opinion of the Directors, no item, transaction or event of a material and unusual nature has arisen between the date up which this report refers and the date on which this report is issued which would substantially affect the results of the company or of the Group.

8. Commentary on current year prospects

The Directors expect the Group's profit to improve in the financial year 2000.
Growth is expected to come from:
(1) Industrial Business Unit attributed by the W-Industries acquisition.
(2) Enterprise Business Unit focus towards higher services-based businesses.
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 1999

Dec 1998

Dec 1999

Dec 1998

S$000

S$000

S$000

S$000
Fixed assets

1,495,856

908,573

800,280

391,104
Subsidiary Company

-

-

3,183,310

3,183,310
Associated company

352,813

127,394

188,510

125,325
Intangible assets

1,251,817

1,082,756

154,309

162,430

3,100,486

2,118,723

4,326,409

3,862,169
Current assets
Projects-in-Progress

10,562,120

10,631,474

10,406,113

10,290,371
Trade Debtors

9,611,259

13,545,673

7,716,259

9,486,015
Advance to Associate Companies

-

-

-

-
Other Debtors, Deposits and Prepayment

644,835

528,974

441,691

297,921
Amounts due from Subsidiary Companies

-

-

2,136,242

3,245,773
Amounts due from Associated Companies

571,187

163,577

571,187

163,577
Amounts due from Related Companies

837,676

2,801,650

837,676

2,801,650
Fixed deposits

15,632,397

1,326,400

15,593,925

1,326,400
Cash and Bank Balances

7,713,297

2,084,357

6,742,019

1,001,311

45,572,771

31,082,105

44,445,112

28,613,018
Current liabilities
Trade creditors and accruals

6,694,459

10,771,718

6,292,627

9,717,063
Bank Loan, unsecured

-

2,000,000

-

2,000,000
Projects-in-Progress

3,587,549

2,342,911

3,049,526

2,241,582
Amounts due to intermediate holding company

-

499,357

-

499,357
Amounts due to subsidiary companies

-

-

1,208,370

1,441,538
Amounts due to associated companies

-

-

-

-
Amounts due to related companies

18,803

67,672

18,803

67,672
Provision for warranties

951,730

1,680,157

897,039

1,555,369
Provision for Tax

1,688,311

1,267,281

1,461,946

1,060,000

12,940,851

19,629,096

12,928,311

18,582,581
Net Current Assets

32,631,920

11,453,009

31,516,801

10,030,437
Total Assets

35,732,406

13,571,732

35,843,210

13,892,606
Capital and reserves
Share capital

11,957,093

1,625,135

11,957,093

1,625,135
Share premium

12,537,567

1,248,276

12,537,567

1,248,276
Revenue reserve

11,169,043

10,631,337

11,348,550

11,019,195
Foreign Currency Translation Reserve

68,703

66,984

-

-

35,732,406

13,572,732

35,843,210

13,892,606

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

(a) Since 30 June 1999, no new ordinary shares were issued.

(b) Since 30 June 1999, the Company has granted 6,430,000 shares options to the participants of the CSE Systems & Engineering Share Option Scheme to subscribe for 6,430,000 unissued ordinary shares at $0.05 each in the Company.

At end of the financial year, there were 13,430,000 unissued ordinary shares of the Company under the option granted and unexercised.

(c) On 18 January 2000, the Board of Directors announced that the Company had proposed to issue 18,000,000 ordinary shares at par value of $0.05 each for $1.53 per share in cash pursuant to a private placement for additional listing on the SGX-SESDAQ. The placement price of $1.53 for each placement share represented a discount of approximately 10% to the weighted average share price of trades done on the SGX-SESDAQ on 17 January 1999.

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

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

As at 31/12/1999

As at 30/6/1999

Secured

Unsecured

Secured

Unsecured

0

0

0

0

(b) Amount repayable after one year

As at 31/12/1999

As at 30/6/1999

Secured

Unsecured

Secured

Unsecured

0

0

0

0

(c) Any other comments relating to Paragraph 12


NIL


13. Subsequent Events

(a) Acquisition of W-Industries, Inc

On 18 January 2000, the Board of Directors announced that the Company had entered into a conditional stock purchase agreement with each of Messrs Walter R. Wooten, John W. White, Kenneth W. Castlebury, T.L (Rick) Lynn and Kenneth W. Oliver ("the Vendors") pursuant to which the Company agreed to acquire from the Vendors all the issued and outstanding shares of capital stock of W-Industries for an aggregate purchase consideration of approximately US$21.0 million or approximately S$34.9 million.

(b) Acquisition of a Private Property

On 19 January 2000, the Company had paid $1,000,000 or option fee to Arcasia (Ubi) Pte Ltd as consideraton for an option to purchase a property, being Plot 1 comprising part of Lot No 5546K of Mukim 23 in Singapore, at a price of $7,900,000. The Company exercised the option on 17 February 2000.

14. Economic Value Add (EVA)

EVA for the full year 1999 was S$5.0 million on average EVA Capital of S$26.5 million as compared to 1998 EVA of S$4.6 million on average EVA Capital of S$13.7 million. The Group's Weighted Average Cost of Capital (WACC) was 10.5% for the last three financial years.

15. Y2K Statement

The Group has successfully completed its Y2K rollover on January 1, 2000. The Group will continue to monitor any further developments on the Y2K for the rollover on February 29, 2000.

The total cost incurred for the Y2K effort was S$0.5 million of which S$0.3 million was capitalised and S$0.2 million was expensed.

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