KOH BROTHERS ECO ENGINEERING LIMITED (Company Registration No H)

Transcription

1 KOH BROTHERS ECO ENGINEERING LIMITED (Company Registration No H) Unaudited Fourth Quarter and 12 Months Financial Statement And Dividend Announcement for the Period Ended 31 December 2018 PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS 1(a) Statement of comprehensive income (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year. 3 months ended 12 months ended 31/12/ /12/2017 Change 31/12/ /12/2017 Change Notes S$'000 S$'000 % S$'000 S$'000 % Revenue 114, , , ,063-1 Cost of sales (110,952) (105,746) 5 (314,202) (310,719) 1 Gross profit 3,858 8, ,613 20, Other income/(losses) (439) N.M Other gains/(losses) - net (164) N.M. 2,863 (1,003) N.M. Selling and distribution expenses (207) (821) -75 (854) (666) 28 Administrative expenses (1,231) (2,339) -47 (9,175) (9,437) -3 Finance expenses (431) (196) 120 (1,055) (657) 61 Share of profit from associated companies, net of tax Profit before income tax 3 2,633 4, ,021 9, Income tax expense 4 (578) (45) 1182 (1,081) (522) 107 Profit after income tax 2,055 4, ,940 8, Other comprehensive (loss)/income, net of tax: Fair value (loss)/gain on financial assets, at FVOCI Currency translation differences arising from consolidation Other comprehensive (loss)/income, net of tax (36) (43) (214) N.M. (336) 309 N.M. (253) 237 N.M. (372) 266 N.M. (205) 23 N.M. Total comprehensive income 1,683 5, ,735 8, Profit attributable to: Equity holders of the Company 1,984 4, ,607 8, Non-controlling interests Total comprehensive income attributable to: 2,055 4, ,940 8, Equity holders of the Company 1,631 4, ,427 8, Non-controlling interests ,682 5, ,735 8, N.M. - Not meaningful * The financial figures are retrospectively restated for the effects on adoption of SFRS(I). Refer to paragraph 5 for details of the impact. 1

2 Notes to the Statement of Comprehensive Income (for the Group) 3 months ended 12 months ended 31/12/ /12/ /12/ /12/2017 S$'000 S$'000 S$'000 S$'000 Note 1 Other income/(losses) include the following : Rental income Interest income Other income/(losses) 57 (535) (439) (0) Note 2 Other gains/(losses) include the following : Fair value loss on financial assets at fair value through profit or loss (26) 2 (37) (3) Fair value (loss)/gain on long term financial assets and financial liabilities (484) Gain on disposal of property, plant and equipment , Net foreign exchange gains/(losses) 438 (345) 642 (1,058) 232 (164) 2,863 (1,003) Note 3 Profit before income tax is stated after (charging)/crediting the following items: (Allowance for)/write-back of allowance for impairment of trade and nontrade receivables (13) (410) (138) 97 Depreciation of property, plant and equipment (6,210) (5,083) (6,634) (5,504) Note 4 Income tax expense includes the following : Current income tax - in respect of current period - under provision in respect of prior period Deferred income tax - in respect of current period - under/(over) provision in respect of prior period (71) 340 (71) 31 (296) 31 (296) ,

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. 31/12/ /12/ /01/ /12/ /12/2017 S$'000 S$'000 S$'000 S$'000 S$'000 ASSETS CURRENT ASSETS Cash and bank balances 20,553 24,864 20, ,977 Trade and other receivables 53,536 63,815 80,051 12,496 4,052 Inventories Contract assets 105,077 62,272 44, Financial assets, at fair value through profit or loss COMPANY Financial assets, at FVOCI / Available-for-sale financial assets , Income tax receivables Other current assets 3,229 5, , , ,174 12,925 10,029 NON-CURRENT ASSETS Trade and other receivables 5, ,000 10,000 Contract assets 10,882 25,431 15, Investments in associated companies 1,765 1,448 1, Investments in subsidiaries ,238 37,238 Property, plant and equipment 40,854 31,269 28, ,623 Goodwill 6,857 6,857 6, Deferred tax asset ,216 65,399 52,852 67,884 49,501 TOTAL ASSETS 250, , ,026 80,809 59,530 EQUITY Capital and reserves attributable to equity holders of the Company Share capital 73,145 52,143 38,391 73,145 52,143 Other reserves 3,900 1,827 (441) 4,507 2,482 Retained profits 15,868 11,308 3,628 2,189 1,730 Currency translation reserve (2,517) (2,289) (2,458) ,396 62,989 39,120 79,841 56,355 Non-controlling interests 3,079 3,045 3, TOTAL EQUITY 93,475 66,034 42,153 79,841 56,355 LIABILITIES CURRENT LIABILITIES Trade and other payables 98,803 93,244 92, ,175 Current income tax liabilities Contract liabilities 4,990 36,289 35, Short term borrowings and finance leases 45,895 11,191 16, , , , ,175 NON-CURRENT LIABILITIES Trade and other payables 4,808 11,841 15, Finance lease 1,632 2,731 2, Deferred tax liabilities ,100 15,042 17, TOTAL LIABILITIES 156, , , ,175 TOTAL EQUITY AND LIABILITIES 250, , ,026 80,809 59,530 3

4 1(b)(ii) Aggregate amount of Group's borrowings and debt securities. As at 31/12/2018 As at 31/12/2017 Secured Unsecured Secured Unsecured S$'000 S$'000 S$'000 S$'000 Amount repayable in one year or less, or on demand 2,556 43,339 2,391 8,800 Amount repayable after one year 1,632-2,731 - Details of any collateral The Group's secured borrowings are secured by the Group's plant and machinery and motor vehicles. 1(c) CONSOLIDATED CASH FLOW STATEMENT 12 months ended 31/12/ /12/2017 S$'000 S$'000 CASH FLOWS FROM OPERATING ACTIVITIES Profit after income tax 5,940 8,549 Adjustments for non-cash items : Income tax expense 1, Depreciation of property, plant and equipment 6,634 5,504 Fair value loss on financial assets at fair value through profit or loss 37 3 Gain on disposal of property, plant and equipment (2,258) (58) Share of profit from associated companies (317) (93) Interest expense 1, Interest income (174) (216) Unrealised foreign exchange (gain)/loss (460) 873 Operating profit before working capital changes 11,538 15,741 Working capital changes : - Receivables 4,601 16,063 - Inventories Contract assets and liabilities (59,554) (26,760) - Other contract assets 1,980 (5,209) - Payables (1,539) (3,256) Cash used in operations (42,900) (2,965) Income tax paid (2,240) (820) Interest paid (988) (635) Net cash used in operating activities (46,128) (4,420) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (16,303) (4,385) Proceeds from disposal of property, plant and equipment 4, Proceeds from redemption of financial assets, at FVOCI 50 - Proceeds from redemption of available-for-sale financial assets - 6,525 Interest received Net cash (used in)/generated from investing activities (11,979) 2,620 CASH FLOWS FROM FINANCING ACTIVITIES Deposit released/(pledged) 1,355 (218) Proceeds from issuance of rights cum warrants 23,287 16,446 Proceeds from exercise of warrants - 5 Share issuance expenses (260) (217) Proceeds from bank borrowings (82) 34,539 2,000 Repayment of bank borrowings - (8,500) Payment of finance lease instalments (2,657) (2,262) Dividends paid to equity holders of the Company (1,047) (448) Dividends paid to non-controlling interest (274) (159) Net cash generated from financing activities (83) 54,943 6,647 NET CHANGE IN CASH AND BANK BALANCES (3,164) 4,847 CASH AND BANK BALANCES AT BEGINNING OF THE FINANCIAL PERIOD 23,509 19,323 EFFECTS OF CURRENCY TRANSLATION ON CASH AND BANK BALANCES 208 (661) CASH AND BANK BALANCES AT END OF THE FINANCIAL PERIOD 20,553 23,509 Represented by : CASH AND BANK BALANCES Cash and bank balances 20,553 20,553 24,864 Restricted cash - - (1,355) 20,553 20,553 23,509 4

5 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. (S$'000) Share Capital Attributable to equity holders of the Group Warrants Reserve Other Reserves Retained Profits Currency Translation Reserve TOTAL NON- CONTROLLING INTERESTS TOTAL EQUITY Balance as at 01/01/2018 As previously reported Effects of adoption of SFRS(I) 15 As restated at 01/01/ ,143 2,482 (655) 10,524 (2,289) 62,205 3,045 65, ,143 2,482 (655) 11,308 (2,289) 62,989 3,045 66, Issuance of rights cum warrants # 21,262 2, ,287-23,287 Share issuance expenses (260) (260) - (260) Profit for the financial year Other comprehensive income/(loss) for the financial year Dividend paid Balance as at 31/12/ ,607-5, , (228) (180) (25) (205) (1,047) - (1,047) (274) (1,321) 73,145 4,507 (607) 15,868 (2,517) 90,396 3,079 93,475 Balance as at 01/01/ ,391 - (441) 3,877 (2,458) 39,369 3,033 42,402 Effects of adoption of SFRS(I) (249) - (249) - (249) As restated at 01/01/ ,391 - (441) 3,628 (2,458) 39,120 3,033 42, Issuance of rights cum warrants * 13,964 2, ,446-16,446 Exercise of warrants Share issuance expenses (217) (217) - (217) Profit for the financial year Other comprehensive (loss)/income for the financial year Acquisition of non-controlling interests without a change in control Dividend paid Balance as at 31/12/ ,078-8, , (214) (51) (56) (448) - (448) (477) (925) 52,143 2,482 (655) 11,308 (2,289) 62,989 3,045 66,034 COMPANY (S$'000) Attributable to equity holders of the Company Share Capital Warrants Reserve Retained Profits TOTAL Balance as at 01/01/ ,143 2,482 1,730 56, Issuance of rights cum warrants # 21,262 2,025-23,287 Share issuance expenses (260) - - (260) Profit for the financial year - - 1,506 1,506 Dividend paid - - (1,047) (1,047) Balance as at 31/12/ ,145 4,507 2,189 79,841 Balance as at 01/01/ ,391-1,091 39, Issuance of rights cum warrants * 13,964 2,482-16,446 Exercise of warrants Share issuance expenses (217) - - (217) Profit for the financial year - - 1,087 1,087 Dividend paid - - (448) (448) Balance as at 31/12/ ,143 2,482 1,730 56,355 # The 2018 issuance of rights cum warrants was approved by way of the renewal of the Share Issue Mandate at the Annual General Meeting held on 26 April The share capital increase was effected on 27 September * The 2017 issuance of rights cum warrants was approved by way of the renewal of the Share Issue Mandate at the Annual General Meeting held on 20 April The share capital increase was effected on 15 November 2017 and 6 December

6 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 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. 31/12/ /12/2017 Total number of issued shares 1,564,128,735 1,046,635,889 Number of shares that may be issued on exercise of warrants 816,454, ,961,682 Warrants (a) (b) No. of shares Pursuant to the renounceable non-underwritten rights cum warrants issue announced on 15 May 2017 (the "2017 Rights cum Warrants Issue"), the Company issued 299,021,682 warrants on 14 November Each warrant carries the right to subscribe for one (1) ordinary share in the capital of the Company at the exercise price ranging from S$0.09 to S$0.11 per warrant for each new share depending on the date of exercise. Each warrant may be exercised at any time during the period of four (4) years commencing on and including the date of issue of the warrants and expiring on the 4th anniversary of the date of issue of the warrants. 60,000 warrants were exercised at S$0.09 per warrant for each new share as at 31 December The remaining 298,961,682 warrants ("Existing Warrants") will expire on 11 November As announced by the Company on 13 April 2018, the net proceeds raised from the renounceable non-underwritten rights cum warrants issue have been fully utilised. Pursuant to the terms and conditions of the deed poll dated 13 October 2017 (the "Deed Poll" relating to the 2017 Rights cum Warrants Issue), the renounceable non-underwritten rights cum warrants issue, as announced by the Company on 29 June 2018 (the "2018 Rights cum Warrants Issue"), constitutes an event giving rise to an adjustment to the exercise price and the number of the Existing Warrants. Accordingly, 39,192,649 adjusted warrants have been issued and alloted on 18 October 2018 (the "Adjustement Warrants"). Following the allotment and issuance of the Adjustment Warrants, the total number of Existing Warrants has increased from 298,961,682 to 338,154,331. Each one Adjustment Warrant carries the right to subscribe for one (1) new ordinary share in the capital of the Company at exercise price ranging from S$0.08 to S$0.10. Pursuant to the 2018 Rights cum Warrants Issue, the Company issued 517,492,846 warrants on 26 September Each warrant carries the right to subscribe for one (1) new ordinary share in the capital of the Company at an exercise price of S$0.050 per warrant for each new share. Each warrant may be exercised at any time during the period of five (5) years commencing on and including the date of issue of the warrants and expiring on the 5th anniversary of the date of issue of the warrants. No warrants have been exercised as at 31 December On 15 November 2018, the Company announced that the net proceeds raised from the 2018 Rights cum Warrants Issue was partially utilised for business expansion and fully utilised for general working capital purposes. Shares (a) Pursuant to the 2017 Rights cum Warrants Issue, the Company issued 299,021,682 rights shares in the capital of the Company on 14 November 2017 at the issue price of S$0.055 for each ordinary share. The new shares rank pari passu in all respects with all other existing shares in issue. Following the completion of the above issuance, the total number of issued shares in the capital of the Company increased from 747,554,207 shares to 1,046,575,889 shares. (b) On 4 December 2017, the Company issued 60,000 rights shares in the capital of the Company pursuant to the exercise of warrants issued pursuant to the 2017 Rights cum Warrants Issue at an exercise price of S$0.09 per warrant under the Deed Poll. The new shares rank pari passu in all respects with all other existing shares in issue. Following the completion of the above issuance, the total number of issued shares in the capital of the Company increased from 1,046,575,889 shares to 1,046,635,889 shares. Pursuant to the 2018 Rights cum Warrants Issue, the Company issued 517,492,846 rights shares in the capital of the Company on 26 September 2018 at the issue price of S$0.045 for each ordinary share. The new shares rank pari passu in all respects with all other existing shares in issue. Following the completion of the above issuance, the total number of issued shares in the capital of the Company increased from 1,046,635,889 shares to 1,564,128,735 shares. Save as disclosed above, the Company has no outstanding convertibles and no treasury shares as at 31 December 2018 and 31 December (d)(iii) To show the total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year. Total number of issued shares excluding treasury shares No. of shares 31/12/ /12/2017 1,564,128,735 1,046,635,889 1(d)(iv) A statement showing all sales, transfer, disposal, cancellation and/or use of treasury shares as at end of the current financial period reported on. Not applicable as there were no treasury shares as at the end of the current financial period reported on Whether the figures have been audited or reviewed and in accordance with which auditing standard or practice. The figures have neither been audited nor reviewed. Where the figures have been audited or reviewed, the auditors' report (including any qualifications or emphasis of matter). Not applicable. Whether the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statements have been applied. Except as disclosed in paragraph 5 below, the Group has applied the same accounting policies and methods of computation in the financial statements for the current reporting period compared with the audited financial statements as at 31 December

7 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. The Singapore Accounting Standards Council has introduced a new Singapore financial reporting framework that is equivalent to the International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). The new framework is referred to be 'Singapore Financial Reporting Standards (International)' ["SFRS(I)s"] hereinafter. As required by the listing requirements of the Singapore Exchange, the Group has adopted SFRS(I) on 1 January 2018 and has issued its first set of financial information prepared under SFRS(I) for the period ended 31 March In adopting SFRS(I), the Group is required to apply all of the specific transition requirements in SFRS(I) 1 First-time Adoption of Singapore Financial Reporting Standards (International). The Group has also concurrently applied SFRS(I) 9 Financial Instruments and SFRS(I) 15 Revenue from Contracts with Customers. The estimated impact arising from the adoption of SFRS(I) on the Group's financial statements are set out as follows: 12 months ended 31/12/2017 Increase/ CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Decrease) S$'000 Sales 32,623 Cost of sales (31,686) Gross profit 937 Other gain 96 Profit before income tax 1,033 Income tax expense - Profit after income tax 1,033 Profit attributable to: Equity holders of the Company 1,033 CONSOLIDATED BALANCE SHEET ASSETS 01/01/ /12/ /01/2017 Increase/ Increase/ Increase/ (Decrease) (Decrease) (Decrease) S$'000 S$'000 S$'000 CURRENT ASSETS Trade and other receivables - (12,169) (7,043) Due from customers on construction contracts - (53,440) (36,533) Contract assets - 62,272 44,448 Available-for-sale financial assets (765) - - Financial assets, at FVOCI Other current assets - 5,209 - NON-CURRENT ASSETS - 1, Trade and other receivables - (24,589) (15,187) Contract assets - 25,431 15, TOTAL ASSETS - 2,714 1,570 LIABILITIES CURRENT LIABILITIES Trade and other payables - (24,162) (4,650) Due to customers on contruction contracts - (10,555) (29,514) Contract liabilities - 36,289 35,674-1,572 1,510 NON-CURRENT LIABILITIES Trade and other payables TOTAL LIABILITIES - 1,930 1,819 NET ASSETS (249) CONSOLIDATED CAH FLOW STATEMENT There is no impact on net cash flow from operating activities. 6 Earnings 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. Earnings per ordinary share for the period after deducting any provision for preference dividends: 3 months ended 12 months ended 31/12/ /12/ /12/ /12/2017 (cent) (cent) (cent) (cent) (i) Basic (ii) On a fully diluted basis The basic earning per share is calculated by dividing the net profit attributable to equity holders of the Company over the weighted average number of ordinary shares in issue during the current financial period of 1,182,743,596 ordinary shares (financial year ended 31 December 2017: 884,807,187 ordinary shares). Fully diluted earnings per ordinary share is computed based on the weighted average number of ordinary shares in issue during the period after adjusting for the dilutive effect on the exercise of all outstanding warrants. 7

8 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 as at the end of the (a) current financial period reported on and (b) immediately preceding financial year. Net asset value per ordinary share based on total number of issued shares at the end of period COMPANY 31/12/ /12/ /12/ /12/2017 (cents) (cents) (cents) (cents) The net asset value per ordinary share is computed based on the issued share capital of 1,564,128,735 ordinary shares as at 31 December 2018 (31 December 2017: 1,046,635,889 ordinary shares). 8 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 currency financial period reported on, including (where applicable) seasonal or cyclical factors; and (b) any material factors that affected the cash flows, working capital, assets or liabilities of the Group during the current financial period reported on. Review of operating result Revenue The Group reported total revenue of S$114.8 million for the 3-month period ended 31 December 2018 ("4Q 2018"), a marginal increase from S$114.6 million for the 3- month period ended 31 December 2017 ("4Q 2017"). The Group's revenue decreased marginally from S$331.1 million for the financial year ended 31 December 2017 ("FY2017") to S$328.8 million for the financial year ended 31 December 2018 ("FY2018"). The decrease was mainly from the Engineering and Construction Division. Cost of sales The Group's cost of sales showed an increase from S$105.7 million in 4Q 2017 to S$111.0 million in 4Q 2018 and from S$310.7 million in FY2017 to S$314.2 million in FY2018. In line with higher revenue reported for Bio-Refinery and Bio-Energy Division, the increase in cost of sales was contributed by this division. Gross profit Overall gross profit retreated to S$3.9 million in 4Q 2018 as compared to S$8.8 million in 4Q 2017 whereas a decrease of S$5.7 million to S$14.6 million in FY2018 from S$20.3 million in FY2017. The lower gross profit was largely attributable to lower profit margin from the Bio-Refinery and Bio-Energy Division. Other income/(losses) Other income increased by S$543,000 in 4Q 2018 but reduced marginally by S$85,000 in FY2018 as compared to the corresponding period 4Q 2017 and FY2017. This was primarily due to the forfeiture of deposit received from a customer a year ago. Other gains/(losses) - net Other gains of S$0.2 million in 4Q 2018 mainly due to gain on disposal of property, plant and equipment and net foreign exchange gain, partially offset by reversal of fair value gain on long term financial assets and financial liabiliities under the SFRS(I) 15. Other gains of S$2.9 million in FY2018 mainly due to gain on disposal of property, plant and equipment and net foreign exchange gain. Selling and distribution expenses In 4Q 2018, there was a decrease of selling and distribution expenses of S$0.6 million as compared 4Q 2017, mainly due to decrease in allowance for impairment of trade receivables. In FY2018, selling and distribution expenses increased from S$0.7 million in FY2017 to S$0.9 million. This was mainly due to increase in allowance for impairment of trade receivables. Administrative expenses Administrative expenses decreased by S$1.1 million in 4Q 2018 and by S$0.2 million in FY2018. This was mainly due to decrease in overhead. Depreciation expenses Depreciation expenses increased by 22% to S$6.2 million in 4Q 2018 and 21% to S$6.6 million in FY2018, mainly due to increase in depreciable assets. Finance expenses Increase in finance expenses for both 4Q 2018 and FY2018 comparisons was mainly due to increase in the Group's borrowings. Profit before income tax Overall, the Group's profit before income tax showed a decline from S$5.0 million in 4Q 2017 to S$2.6 million in 4Q 2018 and from S$9.1 million in FY2017 to S$7.0 million in FY2018. This was mainly due to lower profit margin from the Bio-Refinery and Bio-Energy Division. Review of financial position The Group's net asset value attributable to shareholders increased from S$63.0 million as at 31 December 2017 to S$90.4 million as at 31 December The Group s current assets recorded an increase of S$26.0 million mainly due to increase in contract assets from the Engineering and Construction Division, offset by decrease in trade and other receivables. The Group's non-current assets recorded an increase of S$1.6 million mainly due to increase in property, plant and equipment and trade and other receivables, offset by decrease in contract assets from the Engineering and Construction Division. The Group s current liabilities recorded an increase of S$7.9 million, resulted from increase in trade and other payables and short term borrowings and finance leases from the Engineering and Construction Division, offset by decrease in contract liabilities from the Engineering and Construction Division. The Group's non-current liabilities showed a decrease of S$7.6 million mainly due to decrease in trade and other payables from the Engineering and Construction Division. Review of cash flow The Group reported a net decrease in cash and bank balances of S$3.2 million mainly due to net cash used in operating activities and purchase of property, plant and equipment under investing activities, offset by net cash generated from financiang activities. Net cash used in operating activities was mainly due to increase in contract assets and liabilities. Net cash generated from financing activities was mainly due to proceeds from issuance of rights cum warrants and bank borrowings. 8

9 9 Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results. The current announced results are in line with the general prospect commentary previously disclosed in the results announcement for the financial period ended 30 September 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. Engineering and Construction Sector Based on advance estimates by the Ministry of Trade and Industry published on 2 January 2019, the Singapore economy grew by 3.3% in 2018 compared to 3.6% in According to the Building and Construction Authority ("BCA"), the total construction demand in 2019 will range between S$27 billion and S$32 billion, comparable to the S$30 billion awarded in Public sector construction demand is expected to reach between S$16.5 billion and S$19.5 billion in 2019, contributing to about 60% of projected demand for the year. In the medium term, major infrastructure projects will include the Cross Island Line, developments at Jurong Lake District and Changi Airport Terminal 5. However, the construction industry is still challenging as a result of keen competition and higher operating costs. We have a strong niche and track record in civil engineering projects, and are well positioned to continue to secure more projects in order to replenish our order book for sustainable long-term growth. Bio-Refinery and Bio-Energy Sector Oiltek Sdn. Bhd., our subsidiary, is an integrated supplier with process expertise that covers the complete supply chain in the edible oil industry, renewable and bioenergy sector, as well as high value downstream processes. Oiltek continues to develop new proprietory technology in the refining process to provide continual innovation to the industry. Oiltek remains optimistic about the long term growth prospects despite the current challenges faced in the commodities industry. 11 Dividend (a) Current Financial Period Reported On: (i) Any dividend declared for the current financial period reported on? No. (ii) Any dividend recommended for the current financial period reported on? Yes. Name of Dividend Dividend Type Dividend Amount per Share Dividend Rate (in %) Par value of shares Tax rate Final Cash 0.10 cent per ordinary share NA NA Tax exempt (One-tier) (b) Corresponding Period of the Immediately Preceding Financial Year Any dividend declared for the corresponding period of the immediately preceding financial year? Yes. Name of Dividend Dividend Type Dividend Amount per Share Dividend Rate (in %) Par value of shares Tax rate Final Cash 0.10 cent per ordinary share NA NA Tax exempt (One-tier) (c) (d) 12 Date payable The proposed dividend will be subject to approval by the shareholders at the forthcoming AGM. The payment date will be announced at a later date. Books closure date Notice will be given at a later date on the closure of the Share Transfer Books and Register of Members of the Company to determine members' entitlement to the dividend. If no dividend has been declared/recommended, a statement to that effect. Not applicable. 13 Interested Person Transaction The general mandate for interested persons transactions was approved at the Annual General Meeting held on 26 April Name of Interested Person Transactions for the Sale of Goods and Services Aggregate value of all interested person transactions during the financial period under review (excluding transactions less than S$100,000 and transactions conducted under Shareholders' mandate pursuant to Rule 920) $'000 Aggregate value of all interested person transactions conducted under Shareholders' mandate pursuant to Rule 920 (excluding transactions less than S$ 100,000) $'000 KBD Westwood Pte Ltd Transactions for the Purchase of Goods and Services G & W Ready-Mix Pte Ltd G & W Precast Pte Ltd - G & W Industries Pte Ltd - Hi Con (S) Pte Ltd - Koh Brothers Group Limited - Koh Brothers Holdings Pte Ltd - - 6, ,

10 PART ll - ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT 14 Segmented revenue and results for business 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 year. ENGINEERING & CONSTRUCTION BIO-REFINERY & BIO-ENERGY TOTAL (S$'000) 2018 REVENUE External sales Inter-segment Elimination 301,515 27, , ,515 27, , ,815 RESULTS Segment results 5,820 1,765 7,585 Share of profit from associated companies Interest income Finance expenses 174 (1,055) Income tax expenses (1,081) Profit after income tax 5, REVENUE External sales 309,649 21, ,063 Inter-segment Elimination 309,649 21, , ,063 RESULTS Segment results 6,855 2,564 9,419 Share of profit from an associated company Interest income Finance expenses (657) Income tax expenses Profit after income tax (522) 8,549 Revenue by Geographical Segment (S$'000): Singapore 301, ,650 Malaysia 8,471 9,045 Indonesia 5,709 1,933 The rest of Asia** 6,218 7,072 South America 357 2,241 Africa 6, Others , ,063 **Including Hong Kong, Thailand and Bangladesh. 15 In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the operating segments. BY BUSINESS SEGMENT Engineering and Construction The segment revenue recorded a decrease from S$309.6 million in FY2017 to S$301.5 million in FY2018 mainly due to a lower percentage of revenue recognised from a few newly awarded construction projects. Segment results decreased was mainly due to lower profit margin. Bio-Refinery and Bio-Energy The segment revenue increased by S$5.9 million in FY2018 as compared to FY2017 mainly due to new projects secured during the year. Segment results declined by S$0.8 million from S$2.6 million in FY2017 to S$1.8 million in FY2018, mainly due to lower profit margin. BY GEOGRAPHICAL SEGMENT There was a general decrease in revenue in most geographical segments, except for Indonesia, Africa and others. The decrease was mainly due to lower revenue from the Engineering and Construction segment. 10

11 16 A breakdown of sales. S$'000 % 31/12/ /12/2017 Change Sales reported for first half year Operating profit after tax before deducting non-controlling interests reported for first half year Sales reported for second half year Operating profit after tax before deducting non-controlling interests reported for second half year 118, , ,503 2, , ,658-3,437 6, A breakdown of the total annual dividend (in dollar value) for the issuer's latest full year and its previous full year. S$'000 31/12/ /12/2017 Ordinary-Proposed final 1,564 1, 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(10) in the format below. If there are no such persons, the issuer must make an appropriate negative statement. Name Age Family relationship with any Director 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 Koh Keng Seng 55 Cousin of Mr Koh Keng Siang Director of Koh Brothers Building & Civil Nil Engineering Contractor (Pte) Ltd, since Responsible for management of logistics, workshop, machinery and equipment functions under the Construction Division. Tay Juak Chiang 45 Cousin of Mr Koh Keng Siang Senior Manager, Steel division, since Nil Responsible for steel fabrication division. 19 Requirement under Rule 720(1) of the Listing Manual Section B : Rules of Catalist The Company confirms that it has procured undertakings from all its directors and executive officers (in the format set out in Appendix H) under Rule 720(1). BY ORDER OF THE BOARD Koh Keng Siang Chairman 4 February 2019 Singapore This announcement has been prepared by the Company and its contents have been reviewed by the Company's Sponsor, Stamford Corporate Services Pte Ltd, for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (the Exchange ). The Company's Sponsor has not independently verified the contents of this announcement. This announcement has not been examined or approved by the Exchange and the Exchange assumes no responsibility for the contents of this announcement including the correctness of any of the statements or opinions made or reports contained in this announcement. The contact person for the Sponsor is Mr Ng Joo Khin: Telephone number: jookhin.ng@morganlewis.com 11