PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS

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1 The Stratech Limited Company Registration No : R Full Year Financial Statements And Dividend Announcement for the Year Ended 31 March 2018 PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS 1(a)(i). An income statement and statement of comprehensive income, or a statement for comprehensive income, (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year. Unaudited Consolidated Statement of Comprehensive Income For the financial year ended 31 March 2018 ("") Change Increase / (Decrease) % Revenue 5,513 6,556 (15.9) Other operating income (53.6) Charges in inventories (175) (1,114) (84.3) Purchases of goods/equipment/services (2,205) (2,683) (17.8) Employee benefit expense (3,232) (6,301) (48.7) Amortisation and depreciation expenses (787) (1,226) (35.8) Finance costs (2,939) (2,018) 45.6 Other operating expenses (3,086) (5,175) (40.4) Total expenses (12,424) (18,517) (32.9) Loss before income tax (6,834) (11,795) (42.1) Income tax (21) - * NM Net loss for the year (6,855) (11,795) (41.9) Other comprehensive (loss) / income: Currency translation differences arising from consolidation 169 (104) NM Total comprehensive loss for the year (6,686) (11,899) (43.8) Net loss attributable to shareholders of the Company (6,855) (11,795) Total comprehensive loss attributable to shareholders of the Company (6,686) (11,899) * denote less than S$1,000 1

2 1(a)(ii). The following items (with appropriate breakdowns and explanations), if significant, must either be included in the income statement or in the notes to the income statement for the current financial period reported on and the corresponding period of the immediately preceding financial year. Note (i) - Net loss for the year This is determined after charging / (crediting) the following: Change Dr/(Cr) Dr/(Cr) Increase / (Decrease) % Amortisation of intangible assets 681 1,010 (32.6) Depreciation of plant and equipment (50.5) Gain on disposal of plant and equipment (14) - NM Employee share option expense (53.3) Allowance for doubtful receivables - 1,088 NM Provision for impairment of plant and equipment 9 - NM Provision for foreseeable losses 183 1,314 (86.1) Allowance for inventories obsolescence - 86 NM Provision for warranty costs (78.3) Interest expense 2,939 2, Interest income - (7) NM Exchange loss / (gain), net 169 (58) NM 2

3 1(b)(i). A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year. Unaudited Statements of Financial Position As at 31 March 2018 ("") Assets Company Note Non-current assets Plant and equipment Investments in subsidiaries - - 5,943 5,943 Intangible assets 902 1, ,092 1,840 5,943 5,943 Current assets Inventories Trade and other receivables 1 6,029 6,845 3,445 2,761 Cash and bank balances * - * 6,651 7,663 3,445 2,761 Total assets 7,743 9,503 9,388 8,704 Equity and liabilities Current liabilities Bank borrowings Finance lease liabilities Trade and other payables 2 26,053 21,044 5,519 3,809 Curent income tax liability Provisions 3 2,918 2, ,007 24,122 5,519 3,809 Net current liabilities (22,356) (16,459) (2,074) (1,048) Non-current liabilities Finance lease liabilities Net (liabilities) / assets (21,264) (14,634) 3,869 4,895 Equity attributable to equity holders of the Company Share capital 112, , , ,709 Other reserve - - (107,001) (107,004) Share option reserve Translation reserve Accumulated losses (134,691) (127,839) (2,374) (1,292) Total equity (21,264) (14,634) 3,869 4,895 Total equity and liabilities 7,743 9,503 9,388 8,704 * denote less than S$1,000 3

4 Note 1: Trade and other receivables Company Trade receivables 2,963 2, Allowance for doubtful debts on trade receivables (1,603) (1,653) - - Net trade receivables 1,360 1, Accrued revenue 3,781 3, Allowance for impairment (1,265) (1,265) - - 2,516 2, Other receivables 1,123 2, Allowance for doubtful debts on other receivables (534) (565) - - Net other receivables 589 1, Amount due from subsidiaries - - 3,443 2,249 Receivable in respect of a guarantee from a director-cum-shareholder 1,564 1, Total trade and other receivables 6,029 6,845 3,445 2,761 Note 2: Trade and other payables Company Trade payables 2,367 1, Accruals 6,516 4, Deferred income 830 1, Due to director-cum-shareholder 3,008 2, Other payables 2,960 1, Short term loans 10,372 8,194 3,294 2,874 26,053 21,044 5,519 3,809 Note 3: Provisions Company Foreseeable losses on projects 2,772 2, Warranty costs ,918 2, Foreseeable losses on projects comprise foreseeable cost overruns and liquidated damages. 4

5 1(b)(ii). Aggregate amount of group s borrowings and debt securities. Amount repayable in one year or less, or on demand Secured Unsecured Secured Unsecured Amount repayable after one year Secured Unsecured Secured Unsecured At the end of the financial year, the secured borrowings comprise hire purchase arrangements for assets. 1(c). A statement of cash flows (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year. Consolidated Statement of Cash Flows Cash flows from operating activities Loss before income tax (6,834) (11,795) Adjustments for: Amortisation of intangible assets 681 1,010 Depreciation of plant and equipment Gain on disposal of plant and equipment (14) - Equity-settled share option expenses granted to directors and employees Reversal of equity-settled share option expenses granted to directors and employees (98) (48) Allowance for doubtful receivables - 1,088 Provision for impairment of plant and equipment 9 - Provision for foreseeable losses 183 1,314 Allowance for inventories obsolescence - 86 Provision for warranty costs Interest income - (7) Finance costs 2,939 2,018 Foreign exchange (gain)/loss - * - * Currency realignment 160 (103) Operating cash flow before working capital changes (2,687) (5,933) Trade and other receivables 816 3,680 Trade and other payables and provisions 1, Inventories 175 1,028 Cash generated from/(used in) operations 235 (732) Income tax refund - 1 Interest paid (1,000) (2,148) Interest received - 7 Net cash used in operating activities (765) (2,872) Cash flows from investing activities Additions to intangible assets (77) (429) Purchases of plant and equipment - (1) Proceeds from disposal of plant and equipment 43 - Net cash used in investing activities (34) (430) 5

6 Consolidated Statement of Cash Flows (Cont'd) Cash flows from financing activities Repayment of obligations under finance leases (90) (105) Increase/(decrease) on amount due to a director-cum-shareholder 630 (7) Proceeds from short-term loans 861 4,704 Repayment of short-term loans (623) (1,743) Net cash generated from financing activities 778 2,849 Net (decrease) / increase in cash and cash equivalents (21) (453) Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year Cash and cash equivalents comprises: Bank and cash balances Cash and cash equivalents in consolidated statement of cash flows * denote less than S$1,000 6

7 1(d)(i). A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year. Share Share option Translation Accumulated Total capital reserve reserve losses equity At 1 April , (127,839) (14,634) Loss for the year (6,855) (6,855) Other comprehensive income for the year Total comprehensive income/(loss) for the year (6,855) (6,686) Reversal of equity-settled share options - (3) Employees' share options expenses At 31 March , (134,691) (21,264) Share Share option Translation Accumulated Total capital reserve reserve losses equity At 1 April , (116,055) (2,855) Loss for the year (11,795) (11,795) Other comprehensive loss for the year - - (104) - (104) Total comprehensive loss for the year - - (104) (11,795) (11,899) Reversal of equity-settled share options - (11) Employees' share options expenses At 31 March , (127,839) (14,634) Share Share option Other Accumulated Total capital reserve reserve losses equity Company At 1 April , (107,004) (1,292) 4,895 Total comprehensive loss for the year (1,082) (1,082) Reversal of equity-settled share options - (101) 3 - (98) Employees' share options expenses At 31 March , (107,001) (2,374) 3,869 Share Share option Other Accumulated Total capital reserve reserve losses equity Company At 1 April , (107,015) (655) 5,412 Total comprehensive loss for the year (637) (637) Reversal of equity-settled share options - (59) 11 - (48) Employees' share options expenses At 31 March , (107,004) (1,292) 4,895 7

8 1(d)(ii). Details of any changes in the company s share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles, as well as the number of shares held as treasury shares, if any, against the total number of issued shares excluding treasury shares of the issuer, as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year. No. of ordinary shares Share capital At beginning and end of the year 156,718, ,709 1(d)(iii). To show the total number of issued shares excluding treasury shares as at the end of the current financial year and as at the end of the immediately preceding financial year. The Company did not have any treasury shares as the end of the year and as at the end of the immediately preceding financial year. 1(d)(iv) A statement showing all sales, transfer, disposal, cancellation and/or use of treasury shares as at the end of the current financial year reported thereon. The Company did not have any treasury shares as the end of the year and as at the end of the immediately preceding financial year. 2. Whether the figures have been audited or reviewed and in accordance with which auditing standard or practice. The figures have not been audited or reviewed by the Company's appointed external auditors. 3. Where the figures have been audited or reviewed, the auditors report (including any qualifications or emphasis of a matter). Not applicable. 4. Whether the same accounting policies and methods of computation as in the issuer s most recently audited annual financial statements have been applied. The same accounting policies and methods of computation in the financial statements have been consistently applied by the for the year presented. The financial statements of the for the financial year ended 31 March 2017 are still being audited. 5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of the change. Not applicable. 6. Earnings/(loss) per ordinary share of the group for the current financial period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends. Consolidated net loss attributable to the equity holders of the Company () (6,855) (11,795) Weighted average number of ordinary shares for the purposes of basic and diluted earnings per share ('000) 156, ,718 Loss per share - basic and diluted (cents) (4.37) (7.53) The basic and fully diluted loss per ordinary share are the same as the did not have any potentially dilutive effects on its ordinary shares outstanding at the end of the year. 8

9 7. Net asset value (for the issuer and group) per ordinary share based on the total number of issued shares excluding treasury shares of the issuer at the end of the current financial period reported on, and immediately preceding financial year. Company Net (liabilities) / assets () (21,264) (14,634) 3,869 4,895 Number of shares outstanding ('000) 156, , , ,718 Net (liabilities) / assets value per ordinary share (cents) (13.57) (9.34) A review of the performance of the group, to the extent necessary for a reasonable understanding of the group's business. It must include a discussion of the following: (a). any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors; and (b). any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Revenue The recorded a 15.9% decrease in revenue to S$5.51 million for the financial year ended 31 March 2018 ("") from S$6.56 million in the corresponding financial year ended 31 March 2017 (""). The decrease was attributable to lower level of activity that resulted in lower revenue recognition. Cost of goods and services sold Cost of goods and services sold decreased with lower revenue. Other operating Income Other operating income decreased 53.6% to S$77,000 from S$166,000 mainly due to decrease in interest income and government grant, partly offset by gain of disposal of plant and equipment. Employee benefit expense Employee benefit expense decreased 48.7% to S$3.23 million in from S$6.30 million in mainly due to reduced headcount from cost containment measures and attrition. Amortisation and depreciation expenses Amortisation and depreciation expenses decreased 35.8% to S$0.79 million in from S$1.23 million in. This was mainly due to intangible assets and plant and equipment being fully amortised and depreciated, disposal and impairment of plant and equipment. Finance costs Finance costs increased 45.6% to S$2.94 million in from S$2.02 million in mainly due to changes in the mix of borrowings towards higher-cost unsecured short term borrowings. Other operating expenses Other operating expenses decreased 40.4% to S$3.09 million in compared to S$5.18 million in. Other operating expenses in were higher mainly due to allowance on doubtful receivables and provision for inventories obsolescence which no further such allowance and provision were made in and higher provision for warranty costs and foreseeable losses for some projects in as compared to, partly offset by higher professional fees in. 9

10 Net loss As a result of the above, the recorded a net loss after tax of S$6.86 million in compared to a net loss after tax of S$11.80 million in. STATEMENTS OF FINANCIAL POSITION Non-current assets Non-current assets were reduced by S$0.75 million from S$1.84 million in to S$1.09 million in. This was mainly due to the amortisation of intangible assets, depreciation of plant and equipment, disposal and impairment of plant and equipment. Current assets The recorded current assets of S$6.65 million as at, a decrease of S$1.01 million from S$7.66 million as at. The decrease was mainly due to reduction in trade and other receivables, and inventories. Non-current liabilities There was no non-current liabilities in. Current liabilities The recorded current liabilities of S$29.01 million as at, an increase of S$4.89 million from S$24.12 million as at. This was mainly due to increase in trade and other payables, accruals, amount due to director-cum-shareholder and short term loans partly offset by decrease in deferred income. CASH FLOWS Net cash used in operating activities was S$0.77 million in as compared to S$2.87 million used in. Decrease in net cash used in operating activities was mainly due to lower expenses incurred as a result of cost containment measures and higher attrition rate in as compared with. Net cash used in investing activities was S$0.03 million in as compared to S$0.43 million used in. Decrease in net cash used in investing activities was mainly due to disposal of plant and equipment and lower additions to intangible assets. Net cash generated from financing activities was S$0.78 million in as compared to S$2.85 million in. The decrease in net cash generated from financing activities was mainly due to lower net short term borrowings. 9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and actual results. The Company did not make any forecast or a prospect statement to shareholders. 10

11 10. A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months. Global passenger air travel is expected to maintain positive growth rates up to 2030*. However, challenges in the global operating environment have led to a general slowdown in project tenders as well as longer gestation periods for projects. The has submitted several proposals for several major international airports, is actively following up on proposals submitted and is also preparing proposals for opportunities in other countries, with the view to secure more installations for the iferret systems. As announced previously, the Company and its indirect wholly-owned subsidiary, Stratech Systems Limited, have made applications to the court to implement a scheme of arrangement (the Scheme ). The Scheme will enable the to take steps to preserve its assets, improve the capital of the, settle all claims and emerge therefrom debt-free and stronger to carry out a profitable business. The has been working on other fundraising activities, including a rights issue exercise, share placements and/or bond issue, to improve on its financial position. Together with the prospects of the s iferret intelligent Airfield/Runway Surveillance and Foreign Object and Debris (FOD) Detection System already implemented and in operation in three major international airports and other products, the is cautiously optimistic to make advancement in its process of procuring new contracts and projects. *Source: Statista Annual growth in global air traffic passenger demand from 2005 to & 12. If no dividend has been declared/recommended, a statement to that effect. No dividend has been declared or recommended for the current financial period or the immediately preceding financial year. 13. Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer s most recently audited annual financial statements, with comparative information for the immediately preceding financial year. The 's operations are organised into two core business activities. The first is the e-systems projects and services division comprising: expertise and activities as a systems and technology developer in developing, hosting and operating IT e-business projects; and expertise and activities in developing and providing e-business applications, services and infrastructure. The second is the Technology-intensive IT division comprising: expertise and activities in computer vision systems; and expertise and activities in intelligent transport systems. Some e-business projects and services incorporate or integrate with computer vision and intelligent transport systems. The 's diversified business segments and related information are as follows: (a) By business segments Segment revenue and expense: These are the operating revenue and expense reported in the 's income statement that are directly attributable to a segment and the relevant portions of such revenue and expense, where applicable, are allocated to that segment on a reasonable and consistent basis. Segment assets and liabilities: Segment assets include all operating assets used by a segment and consist principally of receivables, inventories and plant and equipment, net of allowances and provisions. Capital expenditure includes the total costs incurred to acquire assets expected to have future benefits over more than one reporting period which are directly attributable to the segment, such as, plant and equipment and intangible assets. Segment liabilities include all operating liabilities of the segment and consist principally of trade payables and accrued expenses. 11

12 13. Segment Information (cont'd) (a) By business segments (cont'd) Technology - () E-Business Intensive IT Revenue - 5,513 5,513 Segmented results - 1,918 1,918 Other operating income 77 Employee benefit expense (2,343) Amortisation and depreciation expenses (787) Finance costs (2,939) Other operating expenses (2,760) Loss before taxation (6,834) Income tax (21) Net loss for the year (6,855) Assets 1 5,070 5,071 Unallocated assets 2,672 Consolidated total assets 7,743 Liabilities Liabilities - 3,197 3,197 Unallocated liabilities 25,810 Consolidated total liabilities 29,007 Other information Capital expenditure (unallocated) Intangible assets Intangible assets (unallocated) - 77 Depreciation Depreciation (unallocated) Amortisation Amortisation (unallocated)

13 13. Segment Information (cont'd) (a) By business segments (cont'd) Technology - () E-Business Intensive IT Revenue - 6,556 6,556 Segmented results - (50) (50) Other operating income 166 Employee benefit expense (4,267) Amortisation and depreciation expenses (1,226) Finance costs (2,018) Other operating expenses (4,400) Loss before taxation (11,795) Income tax - * Net loss for the year (11,795) Assets 2 5,728 5,730 Unallocated assets 3,773 Consolidated total assets 9,503 Liabilities Liabilities - 3,906 3,906 Unallocated liabilities 20,231 Consolidated total liabilities 24,137 Other information Capital expenditure (unallocated) Intangible assets Intangible assets (unallocated) Depreciation Depreciation (unallocated) Amortisation 1 1,009 1,010 Amortisation (unallocated) - 1,010 * denote less than S$1,000 13

14 (b) By Geographical segments The following table provides an analysis of the 's revenue by geographical market, irrespective of the origin of the goods/services: Singapore 3,624 4,970 Hong Kong 1, Middle East USA SEA ,513 6,556 The following is an analysis of the carrying amounts of segment assets and additions to capital expenditure analysed by the geographical areas in which the assets were located : Carrying amounts of segment assets Additions to plant and equipment and intangible assets Singapore 7,741 9, USA ,743 9, In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments. Please refer to item 8 & A breakdown of sales is as follows:- Change % (a) Revenue reported for the first half-year 1,096 3,067 (64.3) (b) Operating (loss) / profit reported for first half-year (4,348) (5,009) (13.2) (c) Revenue reported for the second half-year 4,417 3, (d) Operating (loss) / profit after tax reported for the second half-year (2,507) (6,786) (63.1) 16. A breakdown of the total annual dividend (in dollar value) for the issuer s latest full year and its previous full year. None. 14

15 17. Interested Person Transactions ("IPT") In accordance with Rule 907 of the Listing Manual of the Singapore Exchange Securities Trading Limited (the "Listing Manual"): Name of interested person Aggregate value of IPT in the year Aggregate value of IPT conducted under shareholders' mandate pursuant to Rule 920 of the Listing Manual Nil Confirmation by Directors pursuant to Rule 705(4) of the Listing Manual of the Singapore Exchange Securities Trading Limited. The Board of Directors of the Company confirms, to the best of its knowledge, nothing has come to the attention of the Board of Directors of the Company which may render the Half Year Financial Statement and Dividend Announcement for the financial year ended 31 March 2018 to be false or misleading. 18. Disclosure of person occupying a managerial position in the issuer or any of its principal subsidiaries who is a relative of a director or chief executive officer or substantial shareholder of the issuer pursuant to Rule 704(13). If there are no such persons, the issuer must make an appropriate negative statement. Name Age Family relationship with any director, CEO and/or substantial shareholder Current position and duties, and the year the position was first held Details of changes in duties and position held, if any, during the year David Chew Khien Meow 60 Leong Sook Ching (spouse of David Chew Khien Meow) Executive Chairman (2000) Nil Leong Sook Ching 52 David Chew Khien Meow (spouse of Leong Sook Ching) Executive Director (2000), Chief Corporate Officer (2008) Nil Kennedy Chew Khien Mien 56 Brother of David Chew Khien Meow and brother-in-law of Leong Sook Ching Technical Fellow (2004) Nil Dr. David K.M. Chew Executive Chairman Ms. Leong Sook Ching Executive Director 29 May