E-mail: [email protected]

SYSMA HOLDINGS LIMITED

Company Registration No: 201207614H (Incorporated in the Republic of Singapore on 28 March 2012) 2 Balestier Road, #03-669, Balestier Hill Shopping Centre, Singapore 320002 Tel:6256 2288 (4 lines) Fax:6252 4156 E-mail: [email protected]

Full Year Financial Statement and Dividend Announcement for the Financial Year Ended 31 July 2018

PART 1 - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF FULL YEAR RESULTS

1(a) An income statement and statement of comprehensive income, or a statement of comprehensive income together with a comparative statement for the corresponding period of the immediately preceding financial year

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SYSMA HOLDINGS LIMITED UNAUDITED RESULTS FOR THE YEAR ENDED 31 JULY 2018

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SYSMA HOLDINGS LIMITED UNAUDITED RESULTS FOR THE YEAR ENDED 31 JULY 2018

• 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

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SYSMA HOLDINGS LIMITED UNAUDITED RESULTS FOR THE YEAR ENDED 31 JULY 2018

1(b)(ii) Aggregate amount of group's borrowings and debt securities

Details of any collateral

In 2017, the above bank borrowings are secured by:

• (i) Legal mortgages on development properties, properties held for sale and leasehold properties;

• (ii) Assignment of rights, titles and interests of all agreements relating to the development properties and properties held for sale including sales and purchase agreements;

• (iii) Joint and several guarantees from directors and non-controlling shareholders of our subsidiaries; and (iv) Corporate guarantee provided by the Company

Finance leases are secured by certain works vehicles and office equipment of the Group with carrying amount of S$513,000 as at 31/07/2018 (31/07/2017: S$873,000)

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SYSMA HOLDINGS LIMITED UNAUDITED RESULTS FOR THE YEAR ENDED 31 JULY 2018

1(c) A statement of cash flows (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year

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SYSMA HOLDINGS LIMITED UNAUDITED RESULTS FOR THE YEAR ENDED 31 JULY 2018

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

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SYSMA HOLDINGS LIMITED UNAUDITED RESULTS FOR THE YEAR ENDED 31 JULY 2018

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SYSMA HOLDINGS LIMITED UNAUDITED RESULTS FOR THE YEAR ENDED 31 JULY 2018

• 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 the number of shares that may be issued on conversion of all the outstanding convertibles if any, against the total number of issued shares excluding treasury shares and subsidiary holdings of the issuer, 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. State also the number of shares held as treasury shares and the number of subsidiary holdings, if any, and the percentage of the aggregate number of treasury shares and subsidiary holdings held against the total number of shares outstanding in a class that is listed 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.

There were 8,651,400 treasury shares (representing 3.4% of the Company’s 252,348,600 ordinary shares (excluding treasury shares)) as at 31 July 2018. There were no treasury shares as at 31 July 2017.

The Company did not have any outstanding options or convertibles as at 31 July 2018 and 31 July 2017. There were no subsidiary holdings as at 31 July 2018 and 31 July 2017.

• 1(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.

1(d)(iv) A statement showing all sales, transfers, cancellation and/or use of treasury shares as at the end of the current financial period reported on.

Not applicable. There were no sales, transfers, cancellation and/or use of treasury shares during and as at the end of the current financial period reported on.

1(d)(v) A statement showing all sales, transfers, cancellation and/or use of subsidiary holdings as at the end of the current financial period reported on.

Not applicable. The Company did not have any subsidiary holdings during and as at the end of current financial period reported on.

2. Whether the figures have been audited or reviewed, and in accordance with which auditing standard or practice

The figures have not been audited or reviewed by the Company’s auditors.

3. Where the figures have been audited or reviewed, the auditors’ report (including any qualifications or emphasis of a matter)

Not applicable.

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SYSMA HOLDINGS LIMITED UNAUDITED RESULTS FOR THE YEAR ENDED 31 JULY 2018

4. Whether the same accounting policies and methods of computation as in the issuer’s most recently audited financial statements have been applied

The Group has applied the same accounting policies and methods of computation in the financial statements for the current financial year as those used in the Group’s most recently audited financial statements for the financial year ended 31 July 2017.

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

Not applicable.

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

The basic and diluted earnings per share are the same as there were no potentially dilutive ordinary securities in issue as at the end of the respective financial years.

7. Net asset value (for the issuer and group) per ordinary share based on the total number of issued share (excluding treasury shares) of the issuer at the end of the (a) current financial period reported on; and (b) immediately preceding financial year

As at 31 July 2018, the number of ordinary shares issued (excluding treasury shares) is 252,348,600 (31 July 2017: 261,000,000).

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 current financial period reported on, including (where applicable) seasonal or cyclical factors; and (b) any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on

Review of Group Performance for the financial year ended 31 July 2018 (“FY2018”) vs the financial year ended 31 July 2017 (“FY2017”)

Revenue

Our revenue in FY2018 of approximately S$75.2 million was S$22.0 million or 22.7% lower than the revenue of approximately S$97.2 million in FY2017.

The decrease in revenue was mainly due to lower contribution from construction projects (including Additions and Alterations projects) aggregating to S$32.6 million (FY2017: S$65.2 million). The decrease was partially offset by increase in revenue contribution from property development project Charlton 18 amounting to S$42.5 million (FY2017: 32.0 million).

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SYSMA HOLDINGS LIMITED UNAUDITED RESULTS FOR THE YEAR ENDED 31 JULY 2018

Cost of sales, gross profit and gross profit margin

Our cost of sales of approximately S$63.8 million in FY2018 was approximately S$15.5 million or 19.6% lower than the cost of sales of approximately S$79.3 million in FY2017.

The decrease in cost of sales of approximately S$15.5 million was mainly due to decrease in cost of sales attributable to construction projects (including Additions and Alterations projects) of S$27.0 million (including a provision for defective works of S$3.8 million, and provision for foreseeable losses of S$0.1 million) in line with lower construction segment revenue partially offset by higher cost of sales attributable to our property development project Charlton 18 of S$11.5 million (including a write back of provision for foreseeable losses of S$1.1 million) in line with higher property development segment revenue.

Consequently, we registered a gross profit and a gross profit margin of approximately S$11.4 million and 15.1% respectively in FY2018 (FY2017: S$17.9 million and 18.4% respectively).

Other income

Our other income of approximately S$1.9 million in FY2018 was S$0.4 million or 28.4% higher than S$1.5 million in FY2017 mainly due to higher rental income of S$0.8 million and higher interest income of S$0.7 million.

Other operating expenses

Our other operating expenses of approximately S$4.9 million in FY2018 was S$0.5 million or 10.8% higher than our operating expenses of approximately S$4.5 million in FY2017, mainly due to increased marketing expenses of S$1.8 million relating to Charlton 18 property development project, mitigated by lower operating costs of S$1.3 million in the construction projects.

Administrative expenses

Our administrative expenses of approximately S$3.3 million in FY2018 was approximately S$0.8 million or 20.7% lower than our administrative expenses of approximately S$4.2 million in FY2017 mainly due to improvements in manpower efficiencies.

Finance costs

Decrease in finance costs of approximately S$0.8 million was mainly due to repayment of bank loans. These finance costs relates to the development of some of the Group’s properties which have achieved Temporary Occupation Permit (“T.O.P.”) stage in FY2017.

Income tax

Our income tax expense was approximately S$0.5 million in FY2018. The effective tax rate of 11.2% in FY2018 was lower than statutory rate of 17% due to reversal of higher provision of prior years’ taxes. We registered an income tax expense of approximately S$1.8 million in FY2017. The effective tax rate in FY2017 was higher compared to the prevailing statutory rate of 17% mainly due to higher provision of prior year’s taxes.

Net Profit

As a result of the above, our net profit decreased by approximately S$3.6 million from S$7.9 million in FY2017 to S$4.3 million in FY2018.

Review of Group Financial Position

Non-Current Assets

As at 31 July 2018, non-current assets totalled S$0.8 million or approximately 0.9% total assets. Non- current assets decreased by approximately S$0.4 million due to depreciation of property, plant and equipment (“PPE”) of S$0.8 million offset against purchase of PPE of S$0.4 million.

Current Assets

As at 31 July 2018, current assets stood at S$81.4 million or approximately 99.1% total assets. Current assets decreased by approximately S$42.9 million.

Increase in cash and cash equivalents of approximately S$17.2 million was mainly due to net cash inflow from operating activities of S$49.4 million and net cash from investing activities of S$0.5 million. The increase was offset against net cash used in financing activities of S$32.7 million.

In FY2018, Charlton 18 project was fully sold resulting in a decrease in development properties held for sale of approximately S$39.5 million.

Decrease in trade and other receivables of S$20.5 million was mainly due to decrease in trade and other receivables from property development business of S$17.4 million as a result of completion of sales of all

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SYSMA HOLDINGS LIMITED UNAUDITED RESULTS FOR THE YEAR ENDED 31 JULY 2018

residential units, and decrease in trade and other receivables from building construction business (including amount due from construction contract customers for work in progress) of S$3.1 million in line with reduced revenue.

Non-Current Liabilities

As at 31 July 2018, non-current liabilities totalled S$0.5 million or approximately 1.9% total liabilities. Noncurrent liabilities decreased by S$0.3 million as a result of repayment of finance leases.

Current Liabilities

As at 31 July 2018, current liabilities stood at S$27.9 million or approximately 98.1% of our total liabilities.

Current liabilities decreased by approximately S$42.5 million which was mainly due to repayment of bank loans of S$27.0 million, decrease in trade and other payables of S$17.9 million, and decrease in income tax payable of S$0.5 million offset by increase in provisions of S$2.9 million.

Review of Statement of Cash Flows

Net cash from operating activities

In FY2018, net cash inflows from operating activities of approximately S$49.3 million was a result of operating cash inflows before working capital changes of approximately S$9.5 million, adjusted for net working capital inflows of approximately S$39.8 million.

The net working capital inflows of approximately S$39.8 million were mainly due to a decrease in development properties and properties held for sale of S$39.7 million and increase in trade and other receivables of S$20.8 million offset against a decrease in trade and other payables of S$19.7 million and tax paid of S$1.0 million.

Net cash from investing activities

Net cash inflow from investing activities amounted to S$0.2 million arising from bank interest received of S$0.5 million and proceeds from disposal of property, plant and equipment of S$0.1 million offset against purchase of property, plant and equipment of S$0.4 million.

Net cash used in financing activities

Net cash outflow from financing activities amounted to approximately S$32.4 million was mainly due to repayment of bank loans of S$27.0 million, Interest paid of S$0.4 million, repayment of finance leases of S$0.2 million, purchase of treasury shares of S$1.1 million and dividends paid of S$3.7 million.

9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results

Not applicable as no forecast or prospect statement has been previously disclosed to shareholders.

10. 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.

For the financial year ended 31 July 2018 (“FY2018”), the Group reported a net profit of S$4.3 million, approximately 45.8% lower than the net profit of S$7.9 million recorded in the previous financial year ended 31 July 2017 (“FY2017”).

The Group’s revenue declined by approximately 22.6% to S$75.2 million in FY2018, compared to S$97.2 million in FY2017 as our property development projects have been substantially sold.

With a healthy balance sheet and stable operating cash flow, the Group will continue to keep a lookout for suitable opportunities to grow its business strategically.

Building Construction Business

The Group’s building construction business remained stable in FY2018, as it focused on timely execution and delivery of its order book which amounted to S$56.7 million as at 31 July 2018.

In the second half of FY2018, the Group secured one contract worth S$37.7 million to erect 4 blocks of 5- storey residential flats and 3 numbers of 2-storey strata landed houses (comprising a total of 170 units) with basement carpark, clubhouse, swimming pool and communal facilities This contract is for a period of 28 months, and work has commenced in July 2018.

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SYSMA HOLDINGS LIMITED UNAUDITED RESULTS FOR THE YEAR ENDED 31 JULY 2018

Moving forward, the Group will continue to leverage its strong market reputation as a trusted builder of Good Class Bungalows (“GCBs”) and high-end landed properties, so as to actively bid for new projects that will add value to its order book, while keeping a close eye on its margins and costs.

Property Development Business

As at 31 July 2018, 100% of the residential units at all of our property developments have been sold and all have received their T.O.P. Going forward, the Group will continue to market the remaining commercial units in 28 RC Suites.

The Group will also explore local and overseas property development projects with suitable partners and strategic investors.

11. If a decision regarding dividend has been made:-

Whether an interim (final) ordinary dividend has been declared (recommended); and

A final dividend in respect of financial year ended 31 July 2018 has been recommended.

(b)(i) Amount per share (cents)

Name of Dividend: First and Final Dividend Dividend Type: Cash Dividend amount per ordinary share: 0.8 Singapore cent (based on 252 million shares) Tax Rate: One tier tax exempt

(b)(ii) Previous corresponding period (cents)

Name of Dividend: First and Final Dividend Dividend Type: Cash Dividend amount per ordinary share: 0.5 Singapore cent (based on 261 million shares) Tax Rate: One tier tax exempt

• (c) Whether the dividend is before tax, net of tax or tax exempt. If before tax or net of tax, state the tax rate and the country where the dividend is derived. (If the dividend is not taxable in the hands of the shareholders, this must be stated).

The dividend is tax exempt in the hands of the shareholders.

(d) The date the dividend is payable.

The proposed dividend for FY2018, if approved by shareholders at the forthcoming Annual General Meeting, will be paid out at a date to be announced.

(e) Book closure date

The book closure date will be announced at a later date.

12. If no dividend has been declared/recommended, a statement to that effect

Not Applicable.

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SYSMA HOLDINGS LIMITED UNAUDITED RESULTS FOR THE YEAR ENDED 31 JULY 2018

PART II – ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT

13. Segmented revenue and results for operating 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.

For the financial year ended 31 July 2018

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SYSMA HOLDINGS LIMITED UNAUDITED RESULTS FOR THE YEAR ENDED 31 JULY 2018

For the financial year ended 31 July 2017 Operating segments

Geographical segments

Not applicable as the Group only operates in the geographical area of Singapore.

14. In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the operating segments.

Please refer to Paragraphs 8 and 13.

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SYSMA HOLDINGS LIMITED UNAUDITED RESULTS FOR THE YEAR ENDED 31 JULY 2018

15. A breakdown of revenue as follows:

16. A breakdown of the total annual dividend (in dollar value) for the issuer’s latest full year and its previous full year as follows:

17. If the Group has obtained a general mandate from shares for IPTs, the aggregate value of such transactions as required under Rule 920(1)(a)(ii). If no IPT mandate has been obtained, a statement to that effect

The Group does not have a general mandate for interested person transactions. Save as disclosed below, there were no interested person transactions of S$100,000 or more entered into during FY2018.

Note:

(1) Shareholders had at the extraordinary general meeting of the Company held on 2 April 2018 approved and ratified the award of the construction contract worth approximately S$5 million awarded by Mr. Sin Ee Wuen to Sysma Construction Pte Ltd as an interested person transaction. Please refer to the Company’s circular dated 16 March 2018 for more details.

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SYSMA HOLDINGS LIMITED UNAUDITED RESULTS FOR THE YEAR ENDED 31 JULY 2018

18. 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.

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SYSMA HOLDINGS LIMITED UNAUDITED RESULTS FOR THE YEAR ENDED 31 JULY 2018

19. Confirmation that the issuer has procured undertakings from all its directors and executive officer under Rule 720(1)

The Company hereby confirms that it has procured undertakings from all the directors and executive officers under Rule 720(1).

BY ORDER OF THE BOARD

SIN SOON TENG EXECUTIVE CHAIRMAN AND GROUP CHIEF EXECUTIVE OFFICER 21 September 2018

This announcement has been prepared by the Company and its contents have been reviewed by the Company’s Sponsor, PrimePartners Corporate Finance Pte.Ltd. (the “ Sponsor ”) for compliance with the Singapore Exchange Securities Trading Limited (the “ SGX-ST ”) Listing Manual Section B: Rules of Catalist. The Sponsor has not verified the contents of this announcement.

This announcement has not been examined or approved by the SGX-ST. The Sponsor and the SGX-ST assume no responsibility for the contents of this announcement, including the accuracy, completeness or correctness of any of the information, statements or opinions made or reports contained in this announcement.

The contact person for the Sponsor is Ms Gillian Goh, Director, Head of Continuing Sponsorship (Mailing Address: 16 Collyer Quay, #10-00 Income At Raffles, Singapore 049318 and E-mail: [email protected]).

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