Chairman

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 2021.

Singapore’s economy expanded by 7.6% in 2021, rebounding from the 4.1% contraction in 2020. In tandem with the economic growth, the Group successfully made a turnaround to profitability and recorded $4.3m in profits (before tax) for the year.

The Group’s year-on-year (“YoY”) revenue decreased by $4.32m to $189.28m. After Market Solutions (“AMS”) division’s YoY revenue decreased by $0.38m to $16.95m (FY2020: $17.33m), primarily due to lesser parts changed despite higher repair volumes. Revenue contribution from Distribution Management Solutions (“DMS”) division decreased by $4.15m to $160.90m (FY2020: $165.05m), mainly due to lower sales volume generated from the distribution operations. Digital Inkjet Printing for Out-Of-Home Advertising Solutions (“DPAS”) division’s revenue was $3.17m — 4% lower than the FY2020 revenue of $3.30m, partly because of the temporary closure of Pixio’s operations in Malaysia due to COVID-19.

The Group recorded $8.26m in revenue from the Investment division. As at 31 December 2021, MDR has a portfolio of approximately $118.85m of quoted equities and debt securities (after loss allowance on investment in debt securities) assets, generating dividend and coupon payments. The Group’s investment portfolio in equities registered a total return of 34.46% in 2021. During the same period, the STI and FTSE ST Catalist’s total return (inclusive of dividend) was 13.60% and -7.95% respectively.

The Group’s net tangible assets as at 31 December 2021 was $159.38m (31 December 2020: $128.49m). Cash and cash equivalents of the Group as at 31 December 2021 increased and was $25.01m (31 December 2020: $12.32m).

Revenue contribution from the Distribution Management Solutions (“DMS”) division decreased YoY by $88.80m to $164.25m (FY2019: $253.05m) mainly due to lower sales volume generated from the retail operations because of temporary business closures during the CB period and the cessation of the M1 distribution business.

The Group is one of the largest distributor, retailer and aftermarket service provider of mobile phones in Singapore. The Company is Samsung’s authorised aftermarket services provider for mobile phones and other consumer electronic goods. The AMS division manages and operates Samsung’s 4 service centres at Plaza Singapura, VivoCity, Westgate and Causeway Point. The DMS division currently operates and manages an islandwide network of 11 retail outlets in Singapore comprising: (a) 6 Singtel retail outlets; (b) 2 Handphoneshop (HPS) multi-brand stores offering lifestyle goods and accessories, Singtel services, and ZYM Mobile services; and (c) 3 Samsung concept stores at Plaza Singapura, VivoCity and Westgate. Group’s Investment business pertains to investments in equity, debt securities, and loans.

The DPAS operations in Malaysia under Pixio offers a range of large format digital printing solutions. Pixio uses state of the art colourmanagement systems and latest machinery.

We are now in the 3rd year of the COVID-19 pandemic. The global and Singapore economy are on path to recovery, although the outlook for recovery remains uneven across business sectors and geographies.

The distribution and retail business under DMS is largely stable. We commercially launched our mobile virtual network operator (MVNO) business, ZYM Mobile, in September 2021. With more market awareness of ZYM Mobile services and competitive pricing and promotions, ZYM Mobile is expected to achieve the economy of scale required for its sustainable operations. The DPAS business under Pixio will continue to capitalise on its strengths as a cost-effective and quality service provider. The Investment business is developing and is expected to remain the Group’s growth engine in terms of bottom-line.

We will continue to explore potential investment opportunities to build new revenue streams and improve shareholders’ returns. Barring any unforeseen event, the Group is committed to achieve better performance in 2022.

We are pleased to share that we achieved 146th rank (out of 519 SGX listed companies) in the corporate governance ranking in the Singapore Governance and Transparency Index 2021. In view of the challenging and uncertain business environment due to the COVID-19 pandemic, the Group’s Executive Directors foregone a part of their bonus for FY2021. The Board is pleased to propose a final dividend of $4m (approximate) for shareholders’ approval at the forthcoming annual general meeting. The dividend translates to approximately 97% of the Group’s net profits in FY2021.

We have been holding management conference calls with shareholders/ analysts/media since March 2019. Currently we are holding management conference calls on a semi-annual basis after the publication of the Group’s half-yearly results. Investor relations being a two-way communication, management encourages dialogue and feedback with all stakeholders.

On behalf of the Board and management, I express my sincere thanks to all our shareholders, business partners and customers, for their support and confidence that helped us in the recovery. I also 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 resilience and growth. We look forward to a bright and successful year ahead.

Edward Lee
Executive Chairman
31 March 2022