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Past Performance by Activity Turnover by activity Six months Six months ended ended 30 September 30 September ($’000) FY 1998 FY 1999 FY 2000 1999 (1) 2000 (2) M&E Services – Plumbing & sanitary services 44,336 30,657 43,516 24,031 22,441 – Electrical services 6,130 8,625 14,525 5,211 21,708 Mobile toilet services 849 997 1,100 534 769 51,315 40,279 59,141 29,776 44,918 Profit before tax by activity Six months Six months ended ended 30 September 30 September ($’000) FY 1998 FY 1999 FY 2000 1999 (1) 2000 (2) M&E services (1) 698 4,047 5,639 4,100 3,141 Mobile toilet services 202 72 162 164 134 Profit before tax margin by activity 900 4,119 5,801 4,264 3,275 Six months Six months ended ended 30 September 30 September ($’000) FY 1998 FY 1999 FY 2000 1999 (1) 2000 (2) M&E services (1) 1.4 10.3 9.7 14.0 7.1 Mobile toilet services 23.8 7.2 14.7 30.7 17.4 Notes:- (1) Based on management accounts. (2) Based on limited review by Deloitte & Touche. Please refer to pages 104 to 106 of this Prospectus. (3) We are unable to state the breakdown figures at the profit level because our existing system does not track project costs by the type of M&E services provided, owing to occasional overlap in areas of work as we provide integrated services for plumbing & sanitary and electrical services together with other M&E services such as air-conditioning and mechanical ventilation, fire-protection and communications systems. The costs of materials, labour and manpower utilised is tracked on a per project basis and the costs are not tracked on per type of M&E service basis Past Performance by Geographical Region Between FY 1998 and FY 2000, we derived all our income from Singapore. 44
REVIEW OF PAST OPERATING RESULTS Overview We provide M&E engineering services to main contractors in the Singapore construction industry. Approximately 98% of our turnover and approximately 96% of our profit before tax is generated from our M&E services in the last three financial years. We also rent and service our mobile lavatories to main contractors and event organisers in Singapore. Such mobile lavatory leasing services contributes to approximately 2% of our turnover and approximately 4% of our profit before tax in the last three financial years. Design-and-build projects contributed to approximately 15.8%, 18.3%, 36.0% and 28.0% of our total turnover in FY 1998, FY 1999, FY 2000 and the six months ended 30 September 2000, respectively. These projects contributed to approximately 58.0%, negative 13.4%, 27.0% and 28.0% of our profit before tax in FY 1998, FY 1999, FY 2000 and the six months ended 30 September 2000, respectively. In FY 1999, we increased budgeted costs to completion for one uncompleted project by approximately $0.8 million. The increase in costs did not materialize in FY 2000 and the excess profits of approximately $0.6 million were booked in FY 2000 when we completed the project. Between FY 1998 to 30 September 2000, we completed four design-and-build contracts of $23.8 million in aggregate contract value. Our Revenue Our M&E services revenue is predominantly from our plumbing and sanitary installation services. As an integrated service provider, our customers award fire protection as part of our plumbing and sanitary contract. Plumbing and sanitary activities contributed approximately 79% to our revenue in the last three financial years. We have included sale of sanitary and plumbing products such as wash basins and toilet bowls in our plumbing and sanitary revenue. These products were sold to our customers in the course of our installation of the plumbing and sanitary systems. We would purchase these products and install them as part of our plumbing and sanitary system. These products are billed to our customers at a cost plus mark-up. Sale of these products accounted for approximately 5% of our total revenue in the last three financial years. The second major component of our M&E services revenue is electrical system installation. Occasionally, our customers also award communications and security system installation as part of our electrical system installation contract. Electrical system installation contributed approximately 19% to our revenue in the last three financial years. The remaining 2% was derived from the lease rental income of portable lavatories to main contractors and event organisers. Our revenue is not subject to seasonality. Our revenue from our M&E services is recognised on the percentage of completion method. This is in accordance with the Singapore Accounting Standards and industry practice. If the costs incurred on a project do not exceed 50% of the estimated cost to completion (“Completion”) when we <strong>final</strong>ize our annual accounts, the project revenues and costs would be deferred as work-in-progress in the balance sheet. A net asset in the work-in-progress account would mean that we have not fully billed customers for all the works completed. A net liability in the work-in-progress account would mean that the total value of our progress billings is more than the costs incurred to date. The net liability is an indication of the net profit deferred. No profit or loss is recognised in our results of operations for projects which do not exceed the 50% Completion stage. When the cost incurred on a project is at 50% or more of the estimated cost to completion, the cost incurred would be recognised as cost of sales and a corresponding revenue would be recognised. The revenue recognised is based on the budgeted gross profit margin of the project. Upon completion of the project, the costs incurred and the remaining contract value would be recognised. 45
Page 1 and 2: PROSPECTUS DATED 25 November 2000 A
Page 3 and 4: Competitive Strengths Extensive Exp
Page 5 and 6: CORPORATE INFORMATION BOARD OF DIRE
Page 7 and 8: “Executive Officers” : The exec
Page 9 and 10: GLOSSARY OF TECHNICAL TERMS To faci
Page 11 and 12: LISTING ON SGX SESDAQ DETAILS OF TH
Page 13 and 14: INDICATIVE TIMETABLE FOR LISTING In
Page 15 and 16: Our Competitive Strengths (a) We ha
Page 17 and 18: Our Restructuring Exercise Prior to
Page 19 and 20: THE INVITATION Issue Size : 30,000,
Page 21 and 22: We depend on four customers who con
Page 23 and 24: If ongoing projects extend their da
Page 25 and 26: In the event that our Directors and
Page 27 and 28: NET OPERATING CASH FLOW (1) Histori
Page 29 and 30: DILUTION (1) (a) The dilution to ne
Page 31 and 32: HISTORY GENERAL INFORMATION ON OUR
Page 33 and 34: Each of our M&E engineering service
Page 35 and 36: (e) Communications & Security Syste
Page 37 and 38: To the best of our knowledge and be
Page 39 and 40: Contract Date of Date of Value Deta
Page 41 and 42: Contract Date of Date of Value Deta
Page 43 and 44: Our ISO manual sets out the guideli
Page 45 and 46: Our Licences We currently have two
Page 47: Financial Positions of the Proforma
Page 51 and 52: Materials such as uPVC pipes and fi
Page 53 and 54: Despite the lower turnover, profit
Page 55 and 56: (c) In addition, our general and ad
Page 57 and 58: Current liabilities Our current lia
Page 59 and 60: As at 30 September 2000, certain of
Page 61 and 62: MAJOR SUPPLIERS Suppliers accountin
Page 63 and 64: We provided plumbing & sanitary and
Page 65 and 66: (b) Capabilities to provide integra
Page 67 and 68: Goh Chee Wee was appointed as an in
Page 69 and 70: Siow Nget Yuen joined our Group in
Page 71 and 72: Our management reporting structure
Page 73 and 74: Their current monthly remuneration
Page 75 and 76: (g) that authority be given pursuan
Page 77 and 78: (2) Mr Chua Kim Hua entered into a
Page 79 and 80: Note:- (1) Comprises rental of prem
Page 81 and 82: The transaction was on arm’s leng
Page 83 and 84: Chip Eng Seng is one of our main cu
Page 85 and 86: We supply sanitary and plumbing pro
Page 87 and 88: Prior to the purchases, the employe
Page 89 and 90: Corporate Governance Present Our Gr
Page 91 and 92: PROPERTIES AND FIXED ASSETS Our Gro
Page 93 and 94: 25 November 2000 The Board of Direc
Page 95 and 96: B. BASIS OF PRESENTATION OF FINANCI
Page 97 and 98: D. PROFORMA STATEMENT OF GROUP BALA
Page 99 and 100:
F. PROFORMA STATEMENT OF NET ASSETS
Page 101 and 102:
G. SUMMARY OF SIGNIFICANT ACCOUNTIN
Page 103 and 104:
H. NOTES TO PROFORMA STATEMENT OF G
Page 105 and 106:
H. NOTES TO PROFORMA STATEMENT OF G
Page 107 and 108:
K. AUDITED FINANCIAL STATEMENTS No
Page 109 and 110:
UNAUDITED CONSOLIDATED BALANCE SHEE
Page 111 and 112:
GENERAL AND STATUTORY INFORMATION I
Page 113 and 114:
Name Present Directorships Past Dir
Page 115 and 116:
4. No Director or Executive Officer
Page 117 and 118:
Save as disclosed above, and for pa
Page 119 and 120:
Article 90 The Directors to retire
Page 121 and 122:
Article 23 The Directors may if the
Page 123 and 124:
Variation of rights of Shareholders
Page 125 and 126:
Article 50 (A) Every notice calling
Page 127 and 128:
BANK BORROWINGS AND WORKING CAPITAL
Page 129 and 130:
LITIGATION 26. Saved as disclosed b
Page 131 and 132:
32. Application moneys received by
Page 133 and 134:
TERMS AND CONDITIONS AND PROCEDURES
Page 135 and 136:
10. Share certificates will be regi
Page 137 and 138:
5. Applications for the New Shares
Page 139 and 140:
11. Applications for Placement Shar
Page 141 and 142:
1. In connection with his Electroni
Page 143 and 144:
The responsibility for timely refun
Page 145 and 146:
INSTRUCTIONS FOR ELECTRONIC APPLICA
Page 148:
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