Dear Shareholders,

On behalf of the Board of Directors (the “Board”) of mDR Limited (the “Company”, and together with its subsidiaries, the “Group”), I am pleased to present to you our annual report for the financial year ended 31 December 2017.

Singapore’s economy grew by 3.6% spurred by improvements in global economic growth. Despite a modest 3.6% tailwind, the Group successfully navigated through an environment of increased competition and high operating costs, recording an impressive 33.4% growth in profits from continuing operations. This was made possible because of our restructuring initiative and our continued efforts to maintain cost discipline and inventory management. Income from investments also contributed to increased profits. We are confident that the rejuvenation of the Board and proposed plans for strategic diversification will see great leaps in accelerated growth and creation of shareholder value. The progress in 2017 is just the first step towards an exciting journey for all shareholders.

Financial Review

The Group’s year-on-year revenues for continuing operations increased by 4% to $275.03 million.

Revenue contribution from the Group’s core business, the Distribution Management Solutions (“DMS”) division increased by $16.20 million to $241.76 million. This was 7% higher than DMS’s FY2016 revenue of $225.56 million. DMS achieved higher revenue mainly due to an increase in handsets distribution revenue from an increase in sales of handsets, wholesale of accessories and line connections for operators.

Year-on-year revenue from After Market Solutions (“AMS”) decreased by $4.68 million (15%) mainly due to a decrease in repair volume.

Digital Inkjet Printing for Out-Of-Home Advertising Solutions (“DPAS”) division’s revenue was relatively stable at $7.25 million (FY2016: $7.02 million).

The Group’s financial position strengthened with total net tangible assets of $62.84 million as at 31 December 2017 (FY2016: $61.55 million). The Group’s working capital decreased by $19.32 million as at 31 December 2017, compared to $55.83 million as at 31 December 2016, mainly due to investments in marketable securities. As at 31 December 2017, the Group maintained a healthy cash balance of $11.58 million.


Singapore Operations

The Group is one of the largest distributor, retailer and aftermarket service provider of mobile phones. The DMS division currently operates and manages an island wide network of retail outlets in Singapore comprising 9 Singtel stores (including 2 franchised stores), 9 M1 stores and 3 Samsung concept stores at Plaza Singapura, VivoCity and Westgate. In addition, the Group operates and manages the 3 service centers of Samsung at the same venues as the concept stores and 1 service centre of Sony at 313 Somerset.

AMS business remains an important revenue stream of the Group in its business ecosystem. The AMS Division currently provides its suite of aftermarket services both for Samsung and Sony.

Malaysia Operations

Pixio Sdn. Bhd. (“Pixio”) moved into its new office premises last year. Pixio’s new premises will assist it in meeting its expanding business needs as Pixio enters into new growth areas such as 3D products, which require large operating spaces. With its own new premises, Pixio is also no longer dependent on a third party for rental of its premises. DPAS operations have continued to contribute positively to the Group’s revenue last year and we look forward to a better performance from the DPAS Division for the coming year.

Future Outlook

The Group is a key player in the telecommunications sector in Singapore. With our long experience in the telecommunications sector and established relationship with business partners and principals, we remain positive about the future outlook for the Group. The Group will continue to work closely with its principals and telecommunication operators to deliver positive results in FY 2018, though it is anticipated that competition will likely intensify in the telecommunication market with the entry of two new MVNOs and the impending entry of a fourth operator in Singapore this year.

We believe that the Company has further potential in terms of value creation and benefits for its shareholders and various stakeholders. In the last decade or so, mDR has been a profitable company, but with a largely flat performance. The Company is working relentlessly towards its long term plans to propel the Group to an improved growth rate. Our goal is to transform the Company into a larger company with a stronger balance sheet, higher enterprise value, higher profitability and increased visibility to fund managers, investors, liquidity and exposure for strong corporate brand value.

As you would be aware, we are working to steer the Group forward by diversifying into an additional business segment ie. the property business, and also expanding the investment business as a core business of the Company. We believe that it is vital for the Group to diversify to expand its revenue streams for a higher growth and to enhance shareholder value.

Proposed Rights Issue

Given the seriousness of our intention and sincerity to boost the profitability and visibility of the Company, we have proposed a rights issue to put ideas and plans into concrete action. The scaling up of our balance sheet would be a catalyst that increases the momentum of growth from an evolution into a transformation. The rights come with free attached warrants to reward long term shareholders and these warrants have been structured over 3 tranches of different pricing and maturities to allow shareholders to assess our competence and performance over 12 financial quarters in order to make an informed decision along our journey of growth. The proposed rights issue also allows for increased alignment of interest as I myself have already committed to subscribing to all my entitlement. In theory the journey on the plane should be safer with the pilot onboard.


The Board is pleased to propose a final dividend amount of up to $1 million for shareholders’ approval at the forthcoming annual general meeting. Upon shareholders’ approval, the final dividend will be paid on 23 May 2018. The Company had earlier paid a half-yearly interim dividend of $500,000 in September 2017. Including the interim dividend, annual dividend for FY 2017 is S$1.5 million and is 15% higher than the last year dividend. Barring a nuclear war, health pandemic, cataclysmic natural disaster, or some other black swan event, we are confident of maintaining an upwards sloping dividend trend.

Note Of Appreciation

On behalf of the Board and management, I express my sincere thanks to all our business partners, shareholders and customers for their support and continued trust. I would also like to extend my heartfelt appreciation to my fellow Directors, management and employees of the Company for their dedication, efforts and teamwork that has contributed to the Group’s continued success. We look forward to a bright and successful year ahead.

Edward Lee
Executive Chairman
29 March 2018