30 September 2002

Singapore Exchange Limited
2 Shenton Way #19-00
SGX Centre 1
Singapore 068804.

Attention: Ms Siew Wun Mui
Vice President
Issuer Regulation

Dear Madam,

OKP HOLDINGS LIMITED ("the Company")
CLARIFICATION ON INTERIM RESULTS FOR THE PERIOD ENDED 30 JUNE 2002

We refer to your letter of 27 September 2002 and would like to provide the following information in response to your queries:

(A)

Query

The Company had provided the comparative balance sheet for the previous corresponding period instead of the comparative balance sheet as at the end of its most recently announced statements, which is required by Para 1(ii) of Appendix 7.2 of the Listing Manual. Please provide the Company's most recently announced balance sheet as at 31 December 2001 (which was disclosed on pages 56 and 57 of the Company's prospectus dated 13 July 2002) together with any explanatory notes that are material to an understanding of any changes to the Company's financial position.

Response

Balance sheet

	Group	Group
	$'000	$'000
	30/6/2002	31/12/2001
Fixed assets	5,395	5,596
Subsidiaries	-	-
Investment properties	2,371	2,971
Intangible assets	1,822	50
Preliminary expenses	350	-

Current assets
Construction in progress	1,179	113
Trade debtors	4,849	7,842
Amount due from related parties (non-trade)	-	118
Other debtors, deposits and prepayments	344	210
Amount due from director of the company (non-trade)	-	1,590
Amount due from director of subsidiaries (non-trade)	-	75
Amount due from shareholders of the company (non-trade)	-	14
Fixed deposits	4,507	4,394
Cash and bank balances	1,558	1,710

	12,437	16,066
Current liabilities
Trade creditors	3,966	6,850
Other creditors	38	60
Amount due to a subsidiary (non-trade)	-	-
Amount due to a director of a subsidiary (non-trade)	-	11
Hire purchase creditors	279	576
Long term bank loans (secured) - current portion	80	195
Short term bank loan (secured)	-	50
Bank overdrafts (secured)	488	1,017
Accrued operating expenses	574	391
Provision for income tax	1,086	1,328

	6,511	10,478

Net current assets	5,926	5,588
Less:
Non-current liabilities
Hire purchase creditors	(735)	(543)
Long term bank loans (secured)	(1,996)	(2,042)
Deferred taxation	(415)	(415)

	12,718	11,205
Represented by:

Share capital	11,426	11,426
Unappropriated profits	1,292	(221)
	12,718	11,205

The decrease in investment properties was due mainly to the disposal of a leasehold building at Ang Mo Kio Ave 4 in 1st half of FY2002.

The increase in intangible assets represents mainly goodwill on consolidation which amounted to $1.892 million in connection with the restructuring exercise which was set out in the Company's Prospectus dated 13 July 2002.

The construction in progress resulted from more work performed than advance billings. The increase was due to more delays in payment certification in 1st half of FY2002 in respect of road maintenance projects.

The decrease in trade debtors and trade creditors is in line with the decline in turnover.

The decrease in amounts due from directors, directors of subsidiaries and shareholders was due to full settlement in FY2002.

The decrease in bank overdraft was due mainly to repayments.

(B)

Query

Having reviewed the commentary provided in your performance review on the Group's Half Year Results, we are of the view that it does not contain sufficient details to enable investors to understand the factors that had led to the material changes in earnings of the business segments. In particular, please explain

(i) the significant decrease of 41% in profit before interest and tax for the road construction segment from $2,714,000 for 1st half of FY2001 to $1,603,000 for 1st half of FY2002, while revenue decreased marginally by 1%; and

(ii) the decrease of 61% in profit before interest and tax for the road maintenance segment from $753,000 for 1st half of FY2001 to $297,000 for 1st half of FY2002, while revenue decreased by 38%.

Response

Profit before interest and tax for the road construction segment dropped by $1.1 million or 41% from $2.7 million for 1st half of FY2001 to $1.6 million for 1st half of FY2002 while the revenue decreased marginally by 1% as profit before interest and tax margin for the road construction segment dropped from 19.7% for 1st half of FY2001 to 11.7% for 1st half of FY2002. The reason for the decrease in profit margin was because in FY2001 (including the 1st half of FY2001), the Upper Serangoon C3218 project had substantial labour cost savings as the project required dredging works & sand backfilling which utilised mainly plant and machinery. In addition, the Eu Tong Sen C3225 project utilised an alternative design and construction method which resulted in cost savings. These 2 projects mentioned contributed less profit margin in 1st half of FY2002. The profit margin contributed by new projects AYE RR0103 and Buangkok Green RR0102 was not as high as the profit margin contributed by the Eu Tong Sen C3225 project and the Upper Serangoon C3218 project although in terms of revenue, the revenue from these new projects was able to compensate for the loss of revenue contribution from the existing road construction projects.

Profit before interest and tax for the road maintenance segment dipped by $0.5 million or 61% from $0.8 million for the 1st half of FY2001 to $0.3 million for the 1st half of FY2002 as the profit before interest and tax margin declined from 4.9% to 3%. This decrease in profit before interest and tax margin for the road maintenance segment is because new road maintenance projects yield a fairly low profit margin at the initial start up phase of the project. The Group has taken a conservative approach by accruing substantial costs at the early stages of certain projects.

(C)

Query

Clarify whether the 2 road maintenance projects which are worth $18.6 million and which will contribute to the Group's turnover and profitability from FY2002 to FY2004 are included in the revenue of $62 million which was expected to be recognised for FY2003 and thereafter from contracts on hand, as disclosed on page 61 of the Company's IPO prospectus.

Response

The directors of the company wish to clarify that the revenue of $62 million which is expected to be recognised for FY2003 and thereafter from contracts on hand, as disclosed on page 61 of the Company's IPO prospectus, does not include the 2 road maintenance projects which are worth $18.6 million and which will contribute to the Group's turnover and profitability from FY2002 to FY2004.