Half Year Financial Statement And Dividend Announcement

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

1(a) An income statement (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year

Financial statement on consolidated results for the half year ended 30 June 2003.
Certain items reported for the half year ended 30 June 2002 have been reclassified to conform with this report for the half year ended 30 June 2003.

Notes:
1) Included in other operating income are:

2) Included in administrative expenses are:

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Additional Information

Engineered Environmental Systems sales comprise sales of Engineered Water Systems, Engineered Air Pollution Control Systems and Engineered Solid Waste Systems.



1(b)(i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year

BALANCE SHEET


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

Amount repayable in one year or less, or on demand



As at 30/6/2003

As at 31/12/2002

Secured	Unsecured	Secured	Unsecured
4,124,000	0	4,893,000	0



Amount repayable after one year



As at 30/6/2003

As at 31/12/2002

Secured	Unsecured	Secured	Unsecured
948,000	0	932,000	0



Details of any collateral

(a) Short term bank loans (secured)
The Group's borrowings are secured by properties, assignment of credit insurance policy and corporate guarantee by Darco Water Technologies Limited.

(b) Bank term loans (secured)
The Group's borrowings are secured by properties and corporate guarantee by Darco Water Technologies Limited.


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

Summary of effect of acquisition of subsidiaries


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

STATEMENT OF CHANGES IN EQUITY

* Amount is less than $1,000



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 or cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles 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

During the 6 month period ended 30 June 2003, the company issued an aggregate of 32,233,137 new ordinary shares in the capital of the Company for the following purposes:-

a) 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, at an aggregate purchase consideration of $1,000,000. The purchase consideration was 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 were issued in March 2003 at an issue price of $0.4478 per share.

b) In May 2003, the Company issued 30,000,000 new ordinary shares at an issue price of S$0.425 per share by way of a private placement. The shares represented a discount of 9.10 per cent from the weighted average price for trades done for the ordinary shares of the Company on the Stock Exchange of Singapore Dealing and Automated Quotation System ("SGX-SESDAQ").



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)

These figures have not been reviewed by the auditors.


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

Not Applicable


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

In FY2003, the Group changed its accounting policy from the completed projects method to the percentage completion method to account for revenue for projects.



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 is no material impact for the change in accounting policy on the financial statements for the period under review. The percentage completion method of accounting for projects is in line with Financial Reporting Standard 11.



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


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


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

The Group recorded growth in turnover and profit in the first half of 2003 despite challenging business conditions.

Following its listing in July 2002, the Group has expanded geographically into South East Asia and North Asia, principally in China, Taiwan, Philippines and Indonesia.

Turnover

For 1H FY2003, group turnover rose 118% to $13.1 million. The growth was broad based, and included a significant turnover increase of 198% to $7.6 million for Engineered Environmental Systems ("EE Systems") as well as a 67% increase in turnover for Water Management Services ("WM Services") to $4.5 million. Group turnover remained well diversified, with EE Systems and WM Services accounting for 58% and 34% of group turnover respectively in 1H FY2003.

The significant increase in turnover for EE Systems was largely due to the geographical expansion into new markets in China and Taiwan. In the previous corresponding period, EE Systems sales was mainly generated from the manufacturing sector in Malaysia, the Group's principal market prior to its listing.

The increase in turnover for WM Services was mainly derived from an NT$ 237,800,000 (approximately S$12 million) service maintenance contract to operate and maintain a Municipal Sewerage Waste Water Treatment Facility located at the Tan Shui River, Taipei, Taiwan for a period of 30 months. The contract commenced in March 2003.

The Group has achieved geographical diversification of turnover post IPO. The share of Singapore and Malaysia of group turnover fell from 100% in the previous period to 42% in 1H FY 2003. By focusing its attention on the vast market in North Asia, the Group has managed to record turnover of $4.5 million and $2.9 million for China and Taiwan respectively in 1H FY2003. Together, the North Asian countries accounted for 56% of group turnover in the first half.

Profitability
The Group achieved a gross margin of 35.9% for 1H FY2003, as compared to a gross margin of 27.6% in 1H FY2002. The improvement in gross margin was mainly the result of higher margins from our water management operations in Malaysia. This was a result of better manpower and cost management of service contracts at our Malaysian operations.

The Group incurred $1.1 million in selling and distribution expenses for 1H FY2003 to support the expanded turnover, an increase of approximately $0.8 million from that of 1H FY2002. This was mainly due to higher traveling costs for our sales and management team to pursue new customers in the Philippines, Indonesia and to secure projects in Taiwan and China. Prior to the Group's listing on SESDAQ, its main market was Malaysia. The sales and management team in Singapore and Malaysia will continue to provide sales and technical support to the Group's overseas subsidiaries in marketing to potential new customers.
The Group's administrative expenses also increased by $1.5 million, to $2.3 million, in 1H FY2003. This was a result of higher costs, including staff costs to support the Group's operations in new markets, like Taiwan, China, Indonesia and Philippines. These overseas subsidiaries were incorporated in 2H FY 2002.

Notwithstanding higher expenses, group operating profit rose 150% to $1.4 million in 1H FY 2003. As a result of higher turnover, group net profit increased 136% to $1.2 million. The net profit increased marginally from 8% in 1H FY2002 to 9% in 1H FY2003.

Balance Sheets

Property, plant and equipment increased by $2.4 million as at 30 June 2003, an increase of 48% compared to 31 December 2002. This increase is mainly the result of the following:-

1. $0.6 million for the construction of our fabrication-cum-service centre in the Songjiang Development Zone, Shanghai, PRC. Construction work is expected to be completed in the 4th quarter of 2003; and

2. $1.5 million for a Pure Water system owned by our subsidiary, Shanghai Challenge Environmental Engineering Limited for a 5 year build-own-operate contract.

Other assets of $2.2 million mainly consist of the refundable deposit of $0.86 million for the proposed acquisition of PT Air Bintan Biru and $1.1 million in retention monies amounting to 15% of the contract sum retained by customer for our municipal project in Taiwan in accordance with the contractual terms.

Inventories increased by $0.4 million as at 30 June 2003, an increase of 42% compared to 31 December 2002, mainly as a result of inventories purchased by the Group to support the increased number of EE System sales.

Contract work-in-progress was $3.0 million higher as a result of significant increase in projects since 31 December 2002.

Cash and cash equivalents increased by $9.0 million as at 30 June 2003 an increase of 3.9 times compared to the balance sheet as at 31 December 2002. The increase in the Group's cash balance was the result of the private placement of 30 million new shares issued by the Company in May 2003 at an issue price of 42.5 cents per share. The Company raised gross proceeds of $12.75 million from the private placement.

Trade payables increased by $0.9 million compared to 31 December 2002, an increase of 42%. This is mainly due to payables due to suppliers for equipment purchased for our projects in PRC.

Shareholders' equity increased by $14.4 million as compared to 31 December 2002, an increase of 100%. This was the result of the private placement of 30 million new shares and the issue of new shares as consideration for the acquisition of PV Vacuum Engineering Pte Ltd in March 2003.

Cash flow statement

The Group's cash position improved significantly from $0.7 million at 30 June 2002 to $12 million at 30 June 2003. This was mainly the result of the issue of 30 million new shares by way of a private placement in May 2003 which generated gross proceeds of $12.75 million.

There was a net cash outflow of S$3.5 million to fund operating and investing activities as a result of the substantial increase of projects in FY2003.



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

In the announcement of the Group's full year financial statement for FY2002, it was announced that the Group's order book for projects for delivery in FY2003 was $36.0 million, and the Directors expect the Group Revenue and Profits to be significantly better in FY2003.

The Group expects the remaining order book as reported, of approximately S$23 million, to be completed within FY2003.



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

The Group expects the business environment in its major markets to remain challenging for the rest of FY2003. In spite of these difficulties, the Group will reap the fruits of its geographical diversification, and expects its overseas operations in Taiwan, China, the Philippines and Indonesia to contribute to group turnover in 2H FY2003 and beyond.

In addition to its geographical diversification, the Group has also broadened its range of environmental services offered to customers. This has enabled the Group to secure a recent S$2.4 million contract to construct a leachate waste water treatment plant for a landfill in Malaysia and a S$12 million contract to treat pesticide contaminated soil in Taiwan.

These recent contracts have strengthened the Group's capabilities in the environmental engineering business, which encompasses the management of water, air and solid waste. This reinforces the Group's objectives of being a total solutions provider of environmental engineering services. With an expanded range of environmental engineering services on offer, the Group will be able to achieve greater market synergy by offering existing customers a wider range of engineering solutions.



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

Not applicable.


(d) Books closure date

Not Applicable.


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

No dividend has been declared by the Company for the financial period ended 30 June 2003.

13. Segmented revenue and results for business or geographical 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

Not Applicable.


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

Not Applicable.


15. A breakdown of sales

Not Applicable.


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

BY ORDER OF THE BOARD

Thye Kim Meng
Director
26/08/2003

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Additional Information on the Half Year Financial Statement For 
the 6 Months ended 30 June 2003

1 September 2003

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

Attention : Ms June Sim, Vice President


Dear Sir

Darco Water Technologies Limited ("Darco" or "the Company")
Half Year Financial Statement For the 6 Months ended 30 June 2003

We refer to the announcement made by the Company on 26 August 2003 of the results for the half year ended 30 June 2003 and to your query which is reproduced below:-

"(a) How the "Goodwill on consolidation" arose; and
(b) Reasons for the increase in "Other Payables and accrued liabilities"."

The Company wishes to clarify the following:-

1) How the "Goodwill on consolidation" arose?

The Company consolidates the financial statements of its subsidiaries for purposes of presenting the results of the Group, in accordance with the provisions of the Companies Act, Cap. 50 and Statements of Accounting Standards in Singapore.

Other payables and accrued liabilities increased by $3 million compared to 31 December 2002. The increase was mainly due to initial down-payments received from our customers for projects, and retention monies that are pending claims from contractors, amounting to $1.8 million and $0.5 million respectively.

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FULL YEAR FINANCIAL STATEMENT ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2003

The Board of Darco Water Technologies Limited are pleased to announce its full year results for the year ended 31 December 2003:


Darco Full Year Results

Submitted by Thye Kim Meng, Director on 27/02/2004 to the SGX

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HALF YEAR FINANCIAL STATEMENT ANNOUNCEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2004

Darco Half Year Results

Submitted by Thye Kim Meng, Director on 13/08/2004 to the SGX

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Attachments:

FY2004.pdf Total size = 97K (2048K size limit recommended)

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DarcoHalfYearResults30June2005.pdf Total size = 300K (2048K size limit recommended)

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FY2005Results220206.pdf Total size = 1128K (2048K size limit recommended)

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Darco-HalfYrAnnt06.pdf Total size = 97K (2048K size limit recommended)

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DWTL_GroupFY2006ResultsAnnouncement_280207.pdf Total size = 136K (2048K size limit recommended)

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DWTL_1HFY2007Results_Final.pdf Total size = 98K (2048K size limit recommended)

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PressRelease.pdf   FYResults.pdf Total size = 306K (2048K size limit recommended)

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DWTL_1HFY2008.pdf Total size = 247K (2048K size limit recommended)

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