Half Year Financial Statement And Dividend Announcement

Set out below are the financial statements for the six months ended 30th June 2002. The Company was incorporated only on 13 October 2001 and there are no comparative numbers for the Group and Company for the period ended 30th June 2001.
These figures have not been audited.

-	-	Group			Company
-	-	S$'000		%	S$'000		%
-	-
-	-	Jan-June 2002	Proforma Previous Corresponding Period	Increase/ (Decrease)	Jan-June 2002	Proforma Previous Corresponding Period	Increase/ (Decrease)
1.(a)	Turnover	6,028	0	nm	0	0	nm
1.(b)	Cost of sales or classification as followed in the most recent audited annual financial statements	(4,361)	0	nm	0	0	nm
1.(c)	Gross profit/(loss)	1,667	0	nm	0	0	nm
1.(d)	Investment income	0	0	nm	0	0	nm
1.(e)	Other income including interest income	4	0	nm	0	0	nm
2.(a)	Operating profit before income tax, minority interests, extraordinary items, interest on borrowings, depreciation and amortisation, foreign exchange gain/(loss) and exceptional items	521	0	nm	(4)	0	nm
2.(b)(i)	Interest on borrowings	(23)	0	nm	0	0	nm
2.(b)(ii)	Depreciation and amortisation	(11)	0	nm	0	0	nm
2.(b)(iii)	Foreign exchange gain/(loss)	41	0	nm	0	0	nm
2.(c)	Exceptional items (provide separate disclosure of items)	0	0	nm	0	0	nm
-	-
-	-	S$'000		%	S$'000		%
-	-
-	-	Jan-June 2002	Proforma Previous Corresponding Period	Increase/ (Decrease)	Jan-June 2002	Proforma Previous Corresponding Period	Increase/ (Decrease)
2.(d)	Operating profit before income tax, minority interests and extraordinary items but after interest on borrowings, depreciation and amortisation, foreign exchange gain/(loss) and exceptional items	528	0	nm	(4)	0	nm
2.(e)	Income derived from associated companies (With separate disclosure of any items included therein which are exceptional because of size & incidence)	0	0	nm	0	0	nm
2.(f)	Operating profit before income tax	528	0	nm	(4)	0	nm
2.(g)	Less income tax (Indicate basis of computation)	(42)	0	nm	0	0	nm
2.(g)(i)	Operating profit after tax before deducting minority interests	486	0	nm	(4)	0	nm
2.(g)(ii)	Less minority interests	16	0	nm	0	0	nm
2.(h)	Operating profit after tax attributable to members of the company	502	0	nm	(4)	0	nm
2.(i)(i)	Extraordinary items (provide separate disclosure of items)	0	0	nm	0	0	nm
2.(i)(ii)	Less minority interests	0	0	nm	0	0	nm
2.(i)(iii)	Extraordinary items attributable to members of the company	0	0	nm	0	0	nm

-	-	Group			Company
-	-	S$'000		%	S$'000		%
-	-
-	-	Jan-June 2002	Proforma Previous Corresponding Period	Increase/ (Decrease)	Jan-June 2002	Proforma Previous Corresponding Period	Increase/ (Decrease)
2.(i)(iv)	Transfer to/from Exchange Reserve	0	0	nm	0	0	nm
2.(i)(v)	Transfer to Capital Reserve	0	0	nm	0	0	nm
2.(i)(vi)	Transfer to Reserve Fund	0	0	0	0	0	0
2.(j)	Operating profit after tax and extraordinary items attributable to members of the company	502	0	nm	(4)	0	nm

Note: nm - not meaningful

Group Figures
-	-	Latest period	Previous corresponding period
3.(a)	Operating profit [2(g)(i) above] as a percentage of turnover [1(a) above]	8.06%	0.00%
3.(b)	Operating profit [2(h) above] as a percentage of issued capital and reserves at end of the period	7.74%	0.00%
3.(c)	Earnings per ordinary share for the period based on 2(h) above after deducting any provision for preference dividends:-
	(i) Based on weighted average number of ordinary shares in issue *	0.41 cents	0
	(ii) On a fully diluted basis (To disclose the basis used in arriving at the weighted average number of shares for the purposes of (c)(i) above and to provide details of any adjustments made for the purpose of (c)(ii) above) *	0.41 cents	0
3.(d)	Net tangible asset backing per ordinary share based on existing issued share capital as at the end of the period reported on *	5.32 cents	0

3.(e) To provide an analysis of expenses based on their function within the group for

the current and previous corresponding period



	Group			Company
	30 June 02 S$'000	Proforma Previous Corresponding Period	Change %	30 June 02 S$'000	Proforma Previous Corresponding Period	Change %
Selling and Distribution	361	0	nm	0	0	nm
General & Administration	788	0	nm	0	0	nm

3(b) to (d) nm	-*Based on pre-invitation share capital of 121,956,380 shares of S$0.05 each - not meaningful
-

-	-	Group			Company
Item 4 is not applicable to interim results		S$'000		%	S$'000		%
-	-
-	-	Jan-June 2002	Proforma Previous Corresponding Period	Increase/ (Decrease)	Jan-June 2002	Proforma Previous Corresponding Period	Increase/ (Decrease)
4.(a)	Sales reported for first half year	0	0	0	0	0	0
4.(b)	Operating profit [2(g)(i) above] reported for first half year	0	0	0	0	0	0
4.(c)	Sales reported for second half year	0	0	0	0	0	0
4.(d)	Operating profit [2(g)(i) above] reported for second half year	0	0	0	0	0	0

Nil

Nil

5.(c) Amount of profits on any sale of investments and/or properties

Item 5c Table

Sale of investments/properties	$Profit/(Loss)
Nil

None

6. Segmental Results

	Group
	Jan-June 02		Proforma Previous Corresponding period
	S$'000	%	S$'000	%
SALES
By Geographical Market
Singapore	2,156	35.8%	0	nm
Malaysia	3,862	64.1%	0	nm
Others	10	0.2%	0	nm
	6,028	100.0%	0	nm
SALES
By Activity
EW Systems	2,562	42.5%	0	nm
WM Services	2,681	44.5%	0	nm
Trading	785	13.0%	0	nm
	6,028	100.0%	0	nm
PROFIT BEFORE TAXATION
By Geographical Market
Singapore	172	32.6%	0	nm
Malaysia	395	74.8%	0	nm
Others	(39)	(7.4)%	0	nm
	528	100.0%	0	nm
PROFIT BEFORE TAXATION
By Activity
EW Systems	101	19.1%	0	nm
WM Services	367	69.5%	0	nm
Trading	60	11.4%	0	nm
	528	100.0%	0	nm

The expected recovery in the electronics and semiconductor industries failed to materialize up to the end of the period under review. As a result, our customers in these industries held back on making significant capital expenditure in plant and machinery. Accordingly, for the period ended 30 June 2002, the Group recorded a modest level of EW sales although sales of WM services remained fairly consistent with past level of operations. The trading division commenced early this year and has registered encouraging sales of $0.78 million during the period under review.

The Group achieved profit attributable to shareholders amounting to $0.5 million during the period.

In line with our expansion plans set out in the Company's prospectus dated 28 June 2002, the Group has increased its manpower resources significantly and has set up new offices to support and pursue business and projects in the region. The Company incorporated three new subsidiaries in Taiwan, China and Malaysia. We are in the process of incorporating additional subsidiaries in Taiwan, China, Indonesia and Philippines.

As at the end of August 2002, the order book has arisen to $42 million, all of which are expected to be recognized by December 2003. Approximately 32% of the orders were sourced from China, another 30% from Taiwan and the rest from Malaysia and Singapore. In line with the Company's diversification strategy, we have succeeded in securing a substantial portion of the orders from industries outside of electronics and semiconductors, e.g. construction of potable water treatment plant in China, sewage and solid waste treatment projects in Taiwan.

the issuer must explain any variance between the forecast or prospect statement and the
actual results

No profit forecast or profit guarantee has been issued for the period under review.

7.(c) A statement by the Directors of the Company whether any item or event of a material or

unusual nature, which would have affected materially the results of operations of the Group
and Company, has occurred between the date to which the report refers and the date on
which the report is issued. If none, to give a negative statement.

In the opinion of the Directors, no item, transaction or event of a material and unusual nature that would affect substantially the results of the operation of the Company and the Group has occurred between 30 June 2002 and the date on which this report issued.

8. A commentary at the date of this announcement of the 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

As mentioned earlier, our order book stands at $42 million. We expect to recognize significant revenue from a number of high value projects throughout the region in the second half of this year.

The WM services will continue to be healthy and trading revenue is expected to grow steadily.

The Directors expect Group revenue and profits to be significantly better in the second half of this year as compared to the first half.

9. Dividend

(a) Any dividend for the present financial period? -		None	-
(b) Any dividend declared for the previous corresponding period?		None
(c) Total Annual Dividend
-
-	Latest Year ()	Previous Year ()
Ordinary
Preference	0	0
Total:

Not applicable

Not applicable

(f) Any other comments relating to Paragraph 9

Nil

10.(a) Balance sheet

	Group		Company
	S$'000		S$'000
	30 June 02	31 Dec 01	30 June 02	31 Dec 01
Non Current Assets	3,913	1,545	5,317	0
Total current assets	5,906	5,598	1,081	0
Total current liabilities	(2,158)	(2,025)	(304)	0
Net current assets	3,748	3,573	777	0
Long term liabilities	(1,087)	(101)	0	0
Net assets	6,574	5,017	6,094	0
Shareholders' Equity	6,485	5,017	6,094	0
Minority Interest	89	0	0	0
Total share capital and reserves	6,574	5,017	6,094	0

	Group
	S$'000
	30 June 02	30 June 01
Cash flows from operating activities
Profit before tax	528	0
Adjustments	30	0
Operating profit before working capital changes	558	0
Working capital changes	(1,044)	0
Cash used in operations	(486)	0
Interest income received	4	0
Interest paid	(23)	0
Income tax paid	(319)	0
Net cash used in operating activities	(824)	0
Net cash used in investing activities	(1,598)	0
Net cash from financing activities	987	0
Net effect of exchange rate changes in consolidation foreign subsidiary	(115)	0
Net increase in cash and cash equivalents	(1,550)	0
Cash and cash equivalent at beginning of period	2,213	0
Cash and cash equivalents at end of period	663	0



Note:
The cashflow statement does not include net proceeds of $6.8 million from the IPO of the Company which took place on 15 July 2002.

10.(c) Statement of changes in equity

	Company
	S$		%
	Jan-Jun 02	Previous Period	Change
Issued Capital
Balance, beginning of the year	2	0	nm
Equity issue of new ordinary shares of $1.00 each	1,081,000	0	nm
Restructing Exercise issue of new ordinary shares of $1.00 each	5,016,817	0	nm
	6,097,819	0
Subdivision of ordinary shares into
121,956,380 issued and fully paid-up shares of $0.05 each	6,097,819	0	nm

Notes:
nm - not meaningful
The statement of changes in equity does not take into account the issue of new shares pursuant to the IPO of the Company.

10.(a), (b) and (c) above

Nil

There is no change in the Company's issued capital after its listing on SGX-SESDAQ.

on, and comparative figures as at the end of the most recently announced financial
statements



(a) Amount repayable in one year or less, or on demand
As at 30/06/2002		As at 31/12/2001
Secured	Unsecured	Secured	Unsecured
$112,000	0	$109,000	0





(b) Amount repayable after one year
As at 30/06/2002		As at 30/12/2001
Secured	Unsecured	Secured	Unsecured
$949,000	0	$73,000	0

The increase in secured borrowings is due to the draw down of a 10 year term loan amounting to $1 million from United Overseas Bank Limited for the purchase of the Company's new premises at 41 Loyang Drive, Singapore.

13. A statement that the same accounting polices and methods of computation are followed

in the financial statements as compared with the most recent audited annual financial
statements. Where there have been any changes or departure from the accounting policies
and methods of computation, including those required by an accounting standard, this
should be disclosed together with the reasons for the change and the effect of the change

The Group profit and loss statement for the period ended 30 June 2002 and the balance sheet as at 30 June 2002 are prepared in accordance with generally accepted accounting principles in Singapore. They are also in line with the accounting policies and methods of computation used to prepare the last audited financial statements for the year ended 31 December 2001 for which SAS 12 on Income Tax was not adopted as it had come into effect only on 1 April 2001

BY ORDER OF THE BOARD

Thye Kim Meng
Managing Director and Chief Executive Officer
25/09/2002

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Full Year Financial Statement And Dividend Announcement

PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS

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

Amount repayable in one year or less, or on demand



As at 31/12/2002

As at 31/12/2001

Secured	Unsecured	Secured	Unsecured
4,893,000	0	109,000	0



Amount repayable after one year



As at 31/12/2002

As at 31/12/2001

Secured	Unsecured	Secured	Unsecured
932,000	0	73,000	0

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

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

Subsequent to the balance sheet date, the company had entered into a conditional sale and purchase agreement for the acquisition of 150,000 ordinary shares in the share capital of PV Vacuum Engineering Pte Ltd, representing 60% of the issued and paid up capital of PV Vacuum Engineering Pte Ltd for an aggregate purchase consideration of $1,000,000, that will be satisfied by the issue of an aggregate of 2,233,137 new ordinary shares in the capital of the Company. The 2,233,137 new ordinary shares will be issued at an issue price of $0.4478 per share.

The Company does not have any outstanding convertible securities as at 31 December 2002.

2. Whether the figures have been audited, or reviewed and in accordance with which standard (e.g. the Singapore Standard on Auditing 910 (Engagements to Review Financial Statements), or an equivalent standard)

The figures have not been audited or reviewed.

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

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

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

There are no changes in the accounting policies and methods of computation except for the adoption of the following accounting standards:

SAS 12 Income Taxes
Revision to SAS 26 Consolidated Financial Statements and Accounting for Investments Subsidiaries.
SAS 30 Interim Financial Reporting

None of the above accounting standards required any material modification of the measurement method or presentation in the financial statements.

6. Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends

* Based on post listing share capital of 148,956,380 shares of $0.05 each

* Based on post listing share capital of 148,956,380 shares of $0.05 each

8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group's business. The review must discuss 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. It must also discuss any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on

Income Statements

The Group transformed itself after its listing on SESDAQ, expanding into SE Asia and North Asia, targeting markets in Taiwan, PRC, Philippines and Indonesia. We acquired the licence to design, commission and provide consultancy services for Environmental Engineering systems in PRC, a very important capability for our PRC operations. In the second half of 2002, we managed to secure significant projects in PRC and Taiwan. Projects secured from these two markets, which are major markets for the water and wastewater industry, enabled our Group to reduce its dependence on the Malaysian market.

The performance of our Group is satisfactory as our Group managed to generate sales of $14 million for the second half of FY2002, which was a marked improvement over the first half sales of $6 million. Overall, the Group registered a marginal increase in sales of $1.4 million or 8% as compared to the previous year for the proforma Group. The increase in Group turnover includes the sales from the trading division of $1.6 million which commenced in the first quarter. An increase in sales from Water Management ("WM") services of $878k cushioned the impact of a decrease in Engineered Water ("EW") systems sales of $1.0 million.

The Group achieved a gross margin of 34.4% for FY2002, which is lower than the gross margin achieved for FY2001 of 38.3%. The lower gross margin for FY2002 was largely attributable to EW systems sales, for which gross margins declined by 9.2%. This decline in gross margins was mainly due to a municipal project that was completed in the last quarter of FY2002, which had a lower gross margin. The gross margins for WM services and trading sales remained stable.

Profit attributable to shareholders amounted to $1.7 million for the year, which is $1.1 million less than that in the previous year of $2.8 million. The decline in profit attributable to shareholders is mainly due to the following:-

1) The Group incurred significantly higher administration expenses of $2.2 million for FY2002, an increase of $0.7 million from that of the previous year. The higher administration expenses were incurred by the Group in its regional expansion into overseas markets. In FY2002, the Company incorporated five new overseas subsidiaries and acquired two overseas companies in Taiwan, China, Indonesia, Philippines and Malaysia.

2) The Group incurred significantly higher distribution expenses of $2.0 million for FY2002, an increase of $0.5 million from that of the previous year. This was due to higher travelling costs of our sales and management team as they pursued new customers and projects in the Philippines, Indonesia, Taiwan and the PRC. The sales and management team in Singapore and Malaysia will continue to provide sales and technical support to our overseas subsidiaries.

The costs relating to the regional expansion efforts incurred in FY2002 have significantly affected our FY2002 results. However, we believe that this has laid a good foundation for our overseas subsidiaries to generate sales in these markets, namely Taiwan, PRC, Philippines and Indonesia, and we expect the rewards of this regional expansion efforts to be reaped in 2003 and beyond.

The Group recorded a lower tax provision in FY2002 mainly due to tax exemption on foreign sourced income of our Malaysian subsidiaries. In addition, one of our Malaysian subsidiaries, Darco Water Systems Sdn Bhd, has been granted Pioneer status.

Balance Sheets

Property, plant and equipment increased by $3.5 million as at 31 December 2002, an increase of 226% compared to the previous year. This increase is mainly the result of our purchase of our factory at Loyang Drive of $2.0 million, and the cost of our new factory at Nilai, Malaysia of $2.2 million.

Trade receivables increased by $7.7 million as at 31 December 2002, an increase of 287% compared to the previous year. This is mainly due to billings for a municipal project in Taiwan of $6.3 million and billings for consultancy fees of $0.4 million due from a customer from Indonesia.

Other receivables and prepayments increased by $1.4 million as at 31 December 2002, an increase of 286% compared to the previous year. This is mainly due to deposits placed for the leasing of properties for the new subsidiaries set up during the year of $0.3 million, a $0.3 million refundable deposit placed with the vendors of PV Vacuum Engineering Pte Ltd during the due diligence period, and $0.5 million as an advance payment to suppliers for our BOT project in Deqing, PRC.

Long term trade receivables of $1.1 million relate to retention monies amounting to 15% of the contract sum retained by the customer for our municipal project in Taiwan.

Trade payables increased by $1.3 million as at 31 December 2002, an increase of 184% compared to the balance as at 31 December 2001. This is mainly due to payables due to suppliers for equipment purchased for our BOT project and other projects and purchases of stocks.

Short term borrowings increased by $4.7 million as at 31 December 2002 from $0.1 million in the previous year as a result of a trust receipts facility of $3.9 million drawn-down to finance the purchase of equipment for our municipal project in Taiwan.

Shareholders' equity increased by $9.0 million as at 31 December 2002, a 185% increase compared to the balance as at 31 December 2001 as a result of the issue of new shares relating to the listing exercise in July 2002 and retained profit of $1.7 million for FY2002.

Cash flow statement

The Group's operations utilized approximately $8.0 million of funds from its operating activities, largely to finance the purchase of equipment and supply of services for our projects. In addition, the Group purchased property, plant and equipment during the year, utilizing $3.8 million of funds. The utilization of funds of approximately $11.8 million was financed by funds generated from our operations of $2.2 million and funds of $13.3 million generated from the Group's financing operations, which included $9.2 million generated from the proceeds of the issue of new shares and borrowings from banks of $5.0 million.

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

No profit forecast or profit guarantee has been issued for the period under review.

10. A commentary at the date of the announcement of the 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

11. Dividend

(a) Current Financial Period Reported On

Any dividend declared for the current financial period reported on? None
(b) Corresponding Period of the Immediately Preceding Financial Year

Any dividend declared for the corresponding period of the immediately preceding financial year? None

(c) Date payable

NA

(d) Books closure date

NA

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

No dividend has been declared

PART II - ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT
(This part is not applicable to Q1, Q2, Q3 or Half Year Results)

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

The Singapore division recorded improved revenue as compared to FY2001. The sales were attributed to EW systems sales and trading division.

The sales from Malaysia reduced significantly as there were no major investment by MNCs in the electronics and semiconductor industries in the first three quarters of 2002. However, there is a slight increase of WM services sales of S$600,000 from the Malaysia operations.

Taiwan division commenced operations after the IPO. A municipal project which was secured and completed in the second half of the year contributed significantly to the Group's total sales.

Malaysia and Singapore recorded a lower profit before tax mainly due to the significant increase in manpower resources during the year as compared to 2001. Key managers travelled extensively from Singapore and Malaysia to Taiwan, PRC, Philippines and Indonesia to pursue new customers and projects. Our profit from EW systems was reduced significantly as a result of our decision to pursue high growth sectors beyond Singapore and Malaysia.

Profit from WM services was comparable to that of the previous year.

15. A breakdown of sales

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

Total Annual Dividend (Refer to Para 16 of Appendix 7.2 for the required details)


	Latest Full Year (S$'000)	Previous Full Year (S$'000)
Ordinary	0	0
Preference	0	0
Total:	0	0

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Additional Information on the Full Year Financial Statement and Dividend Announcement For the Year ended 31 December 2002 ("Full Year Results Announcement")

Singapore Exchange Limited
Issuer Regulation Dept
2 Shenton Way
#19-00 SGX Centre 1
Singapore 068804

Attention : Mr Ashley Seow
(Assistant Vice President)


Dear Sir


Darco Water Technologies Limited ("Darco" or "the Company") Full Year Financial Statement and Dividend Announcement For the Year ended 31 December 2002 ("Full Year Results Announcement")

Further to the announcements made by the Company on 21 March 2003 (for the results for the full year ended 31 December 2002) and 25 September 2002 (for the results for the half year ended 30 June 2002), the Directors wish to make the following clarification to your questions raised on the Company's full year results:-

1. Paragraph 9 of the Full Year Results Announcement - Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results.

In our announcement dated 25 September 2002 relating to the Company's half year results ended 30 June 2002, the Directors made the following statement:- "As mentioned earlier, our order book stands at $42 million. We expect to recognize significant revenue from a number of high value projects throughout the region in the second half of this year" and "The Directors expect Group revenue and profits to be significantly better in the second half of this year as compared to the first half".

Our Directors wish to clarify that our revenue and profits achieved for the second half of 2002 were significantly better compared to the first half. A comparison is tabulated below:-

	6 months results 1 January 2002 to 30 June 2002 S$'000	6 months results 1 July 2002 to 31 December 2002 S$'000	Increase S$'000 / %
Turnover	6,028	20,204	14,176 / 135%
Operating profit after tax and extraordinary items attributable to members of the Company ("Profit after Tax")	502	1,714	1,212 / 141%

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