Dear Valued Shareholders,

I am pleased to report that despite the crisis that has shaken financial markets and economies around the world since late 2007, the Group continued to perform well in FY2008. For the twelve months ended December 31, 2008, we achieved net profit of $13.6 million, compared to $19.6 million in FY2007 which included an exceptional investment gain of $7.4 million. Excluding this exceptional gain, net profit attributable to shareholders for FY2008 represents an increase of 11.0% over the corresponding figure in FY2007.

Earnings per share on a fully diluted basis decreased from 4.11 cents for FY2007 to 2.83 cents in FY2008. Net asset value per ordinary share increased by 1.0 cent to 24.3 cents as at December 31, 2008.

RECORD TURNOVER

Revenue surged to a record high of $213.3 million in FY2008, from $191.6 million in FY2007. This is the first time that Group revenue has crossed the $200 million milestone. The increase in revenue is driven primarily by improved sales of our Switchgear Division which serves a wide spectrum of sectors including high-end segments such as the banking and software data centres, the commercial sector, industrial sector and the Oil & Gas/Offshore & Marine sectors.

OPERATING PERFORMANCE

Our Switchgear Division, which accounts for 54.7% of Group turnover, has performed relatively well for FY2008. Both the top and bottom lines registered impressive growth. Singapore continues to be the key source of revenue for the Group, followed by the Oceania market, whose sales performance has improved relative to FY2007. The Malaysia market continues to generate revenue while the Vietnam market is up and coming.

Our Power & Technology Division, spearheaded by our subsidiary EDMI Limited ("EDMI"), continues to achieve steady sales in the leading markets of Asia, Oceania (comprising mainly Australia and New Zealand) and Europe. Revenue and earnings both improved compared to FY2007. EDMI’s profitability could have been even better if not for foreign exchange losses caused by fluctuations in foreign exchange rates.

The sales for both the Building Services Division and the Trading & Distribution Division were comparable to that for FY2007. The Building Services Division saw a slight increase in earnings and completed major projects including the NTU SPMS Laboratory Control, the Crown Plaza Hotel in Changi Airport Terminal 3 and the Energy Building in Jakarta, Indonesia in FY2008. Earnings for the Trading & Distribution Division were lower largely due to the absence of a one-off gain from the dilution of EDMI Limited as a result of a share placement made in FY2007.

LARGER SWITCHGEAR CAPACITY IN SINGAPORE

The improved sales for switchgears is driven by strong demand especially in Singapore which we were able to meet through our expanded production capacity. We have set up a second switchgear factory adjacent to our existing plant at Senoko Avenue, thus doubling the production capacity to 120,000 sq ft. This second plant, which began operations in early 2008, enables us to better leverage on the construction demand in Singapore and to take on bigger and higher-margin jobs.

GOING FORWARD

Looking ahead, we remain optimistic about our prospects for FY2009. Although the Singapore economy is in the midst of a recession, there remains a total construction demand in excess of $20 billion worth of private and public construction projects that we can identify opportunities to work on. The Singapore Government’s decision to advance some of the $4.7 billion construction projects that were earlier deferred certainly augurs well for the Group.

We will also continue with our strategy of targeting the high-yield and high-growth market sectors such as banks, telecommunications, technology, oil & gas and offshore & marine sectors. However, we will not neglect the traditional commercial and residential sectors in our drive to grow our business.

We see a continued stream of orders for both our Switchgear and Power & Technology Divisions in FY2009. Both divisions will be our twin main growth drivers going forward. We also see more contracts being offered for tender especially for the Power & Technology Division and we hope to take advantage of these opportunities.

MANAGING CHALLENGES

Given the present economic landscape that we are faced with, we are mindful of the need to respond rapidly to changing market dynamics. Our key priority is to ride out the storm and enhance our competitiveness in the long term.

We have already put in place cost management measures and initiatives to streamline production processes and upgrade our machinery to improve productivity. We will also continue to carefully manage our cash reserves given the uncertainties ahead.

In addition to adopting a competitive pricing strategy in view of the weakened market demand, we have to be careful about managing the currency exchange risks of our overseas businesses given the volatility of the global currency markets.

DIVIDEND

The Board of Directors is pleased to propose a final dividend of 1.0 cent per ordinary share for FY2008. The dividend payout will be approximately $4.8 million. This dividend is to be approved at the forthcoming AGM on April 30, 2009 and will be paid out on May 22, 2009 upon approval by shareholders.

A NOTE OF THANKS

On behalf of the Board of Directors, I would like to thank all of our customers and business associates for their continued support. I would also like to convey my appreciation to all of our employees for their dedication, hard work and perseverance in helping the Group achieve our best year in terms of revenue and operating profit. Such tough times will be a test of our mettle, but we believe that with the concerted and dedicated efforts of our team, the Group can still aim for a good performance in the current financial year.

Lee Phuan Weng
Chairman and Chief Executive Officer