Investors

The Private Placement is conditional upon, inter alia, the approval of the Singapore Exchange Securities Trading Limited ("SES-ST") for the listing of and quotation for the Placement Shares on the SGXDAQ.

As at the date hereof, the issued and paid-up share capital of the Company is S$11,957,093.75 divided into 239,141,875 Shares. The Placement Shares represent 7.5% of the issued and paid-up capital of the Company as at the date hereof. The approval of shareholders of the Company for the issue of shares in the Company not exceeding twenty per cent. (20%) of the Company's issued share capital for the time being other than on a pro-rata basis to existing Shareholders had been obtained at the extraordinary general meeting of the Company held on 14 June 1999.

The Placement Price represents a discount of approximately 10% to the weighted average price for trades done on 17 January 2000. The net proceeds from the Private Placement will amount to approximately S$26.7 million.

Of the total net proceeds, S$22,300,000.00 will be utilised to part finance the Group's proposed acquisition of W-Industries Inc. ("WI") for approximately S$35,000,000.00 (including the assumption of shareholders' loan of US$6 million). The balance of the purchase consideration of approximately S$12,600,000.00 payable by the Group will be funded by the proceeds from the Company's initial public offering in February 1999. The balance of the total net proceeds will be utilised for working capital purposes. The Company expects to seek shareholders' approval for the proposed acquisition of WI on or about 28 February 2000. In the event that shareholders' approval is not obtained for the proposed acquisition of WI, the net proceeds of approximately S$22,300,000.00 will be redeployed for the expansion of the Group's new business operations and markets in Europe, the Middle East, North Asia and America.

WI was incorporated in Texas, United States of America, in 1984, and is an engineering systems integrator which designs, engineers, assembles, programs and installs control and instrumentation systems for specific applications in the upstream offshore oil and gas and process industries. The goal of CSE is to become a world-class Industrial System group. This acquisition will help CSE attain that goal. The enlarged entity with greater resources and critical business economies of scale will be in a better position to reach out to global customers requiring total integration services.

Pending the deployment of the net proceeds, such proceeds may be used to reduce borrowings or placed as deposits with financial institutions or invested in short term money markets or debt instruments or for any other purposes on a short term basis as the Directors may deem fit.

The issue of the Placement Shares will increase the issued and paid-up capital of the Company from S$11,957,093.75 divided into 239,141,875 Shares to S$12,857,093.75 divided into 257,141,875 Shares. The Private Placement is not expected to have any material impact on the earnings per share of the Company and its subsidiaries (the "Group") for the financial year ending 31 December 2000. Based on the unaudited balance sheet of the Group as at 30 June 1999, the effect of the Private Placement and the proposed acquisition of W-Industries Inc. by the Group on the Net Tangible Assets ("NTA") of the Group is as follows:

None of the Directors, and to the best of the Company's knowledge, none of the substantial shareholders of the Company have any interest, direct or indirect, in the Private Placement.

BY ORDER OF THE BOARD

YVONNE CHOO
JOINT COMPANY SECRETARY

Date: 18 January 2000

Enclosed is the Statement of Material Facts