Investors

Immediately after the sale of the Property, CSE will enter into a lease agreement with CREIM to lease from CREIM the Property for a period of 10 years commencing from the date of completion of the sale of the Property. The rent payable in the first year is S$536,000, with increases at the fixed rate of 7% over the preceding year's rent at the commencement of the 4th and 7th year of the lease term.

The sale price of the Property is S$7.5 million (the "Purchase Price") and was arrived at on a willing buyer willing seller basis. The Purchase Price will be satisfied entirely in cash on completion of the Proposed Disposal.

The Proposed Disposal is subject to the listing and quotation of the proposed industrial REIT on SGX-ST.

The Proposed Disposal will improve and enhance the financial position of the CSE. It is intended that the sale proceeds from the Proposed Disposal will be used toward partial redemption of CSE bank borrowing of S$56.2 million (as at 31 March 2005) and to defray expenses and professional fees associated with the Proposed Disposal. The net gearing position of the CSE group will improve from 0.5 times (as at 31 March 2005) to 0.4 times after assuming the completion of the Proposed Disposal.

The entry by CSE into a lease agreement with CREIM will provide CSE with continuous use of the Property and the Directors do not expect the Proposed Disposal to disrupt the normal business operations of CSE.

The Purchase Price, at S$7.5 million, approximates the net book value of the Property of S$7.5 million as at 31 December 2004. Therefore, no material gain or loss will accrue to CSE on the Proposed Disposal.

There is no effect of the Proposed Disposal on net tangible assets per share and earnings per share.

One of the relative figures computed on the bases set out in Rule 1006 of the Listing Manual: the asset value to be disposed of, compared with CSE Group's net asset value is 10.9%, exceeds the threshold of 5%, therefore the Proposed Disposal is a discloseable transaction.

Mr Sin Boon Ann, a Director of CSE, is a director of Drew & Napier LLC, a law firm advising CREIM.

Except for Mr Sin, none of the substantial shareholders of CSE have any interest, direct or indirect in the Proposed Disposal.