Investors

As at the date of this announcement, the issued and paid-up share capital of the Company is S$13,393,020.35 divided into 267,860,407 ordinary shares of S$0.05 each ("Shares"). The Placement Shares represent approximately 14.9% of the existing issued and paid-up share capital of the Company and will, upon allotment and issue, rank pari passu in all respects with the existing Shares of the Company.

The issue price of the Placement Shares at S$0.467 per Placement Share represents a discount of approximately 10% of the weighted average price of Shares in the Company for trades done on the Singapore Exchange Securities Trading Limited (the "SGX-ST") on 24 January 2002.

Use of Proceeds

The net proceeds from the issue of the Placement Shares, amounting to approximately S$18.2 million (the "Net Proceeds"), will be used to finance the expansion of operations of the Company, its subsidiaries and associated companies (the "Group") through the acquisition of companies with specialised skills and technologies complementary to the business of the Group. Pending the deployment of the Net Proceeds, it may be used to reduce bank borrowings, placed as deposits with financial institutions or invested in short term money market or other debt instruments or for any other purposes as the Directors may deem fit.

The Group has had discussions with several parties with a view to possible acquisitions. As at the date hereof, no agreement has been reached with any of these parties and there is no assurance that any agreement will be reached with any of these parties. The Group will however continue to explore possible acquisitions when such opportunities arise.

Conditions for Placement

The Placement is conditional upon, inter alia, approval in-principle being granted by the SGX-ST for the admission of the Placement Shares to the Official List of the SGX-ST and for the dealing in and quotation of the Placement Shares. The approval the Company's shareholders for the issue of shares in the Company not exceeding 20 per cent. of the issued share capital of the Company has been obtained at the Annual General Meeting of the Company held on 15 May 2001.

Undertakings

The Company has, in the Placement Agreement, undertaken to DBS Bank that it shall not, save for Shares which may be issued pursuant to the exercise of options granted under the CSE Systems & Engineering Executives' Share Option Scheme and the CSE (US Subsidiaries) Incentive Stock Option Plan, from the date of the Placement Agreement up to and including the third business day (the "Closing Date") after the date that all conditions and waivers stipulated in the Placement Agreement have been obtained, and three (3) months thereafter, without the prior consent in writing of DBS Bank, issue any marketable securities (in the form of, or represented or evidenced by, bonds, notes debentures, loan stock or other securities) or shares or options therefor, which are intended to be, or are capable of being quoted, listed or dealt with on any stock exchange or other market.

Two of the Company's substantial shareholders, Dinervest Investments Pte Ltd and Tan Mok Koon, each having a direct interest of 33.12% and 12.56% respectively in the share capital of the Company, have each given an undertaking to DBS Bank that it/he shall not, without the prior consent in writing of DBS Bank, transfer, assign or otherwise dispose of any of their respective interests in the Company from 25 January 2002 up to and including the Closing Date and for a period of three (3) months thereafter.

Financial Effects of the Placement

The issue of the Placement Shares will increase the issued and paid-up share capital of the Company to S$15,393,020.35 divided into 307,860,407 Shares. The Placement will increase the audited consolidated net asset value of each Share from 2.4 Singapore cents as at 31 December 2000 to 8.0 Singapore cents.

None of the Placement Shares will be placed by the Company with any person or groups of persons disallowed by the SGX-ST as set out under Practice Note 9c paragraph 4 of the SGX-ST Listing Manual.

None of the Directors or substantial shareholders of the Company has any interest, direct or indirect, in the Placement.