IR Overview
Chairman's Statement

Tan Siok Chin
Non-Executive Chairman

With an improving business environment and advancement in our transformation process, I am optimistic towards the overall outlook for the Group’s prospect. Barring any unforeseen circumstances, I am confdent that the management team will be able to deliver on its promise and achieve positive results in FY2018.

Dear Shareholders,

On behalf of the Board of Directors, I am pleased to present the Annual Report of Design Studio Group Ltd (“The Group”) for the fnancial year ended 31 December 2017 (“FY2017”).

FY 2017 was a challenging year for us. The Group’s performance was adversely affected by the continued slowdown in our core markets, competitive price pressure, as well as by the internal organisational restructuring that we initiated during the year to transform the Group.

The ebbs and flows of business cycles are unavoidable. While we put into place measures to mitigate effects of cycles, we will not be distracted by short-term volatility and will stay focused on implementing our strategy for long-term sustainable growth. This is the reason why we have enhanced our best practices and discarded systems that are inefcient and loss-making.

Attaining Sustainable Growth for the Long-Term

We have implemented fundamental changes to transform our business model and strategy to promote proftability and ensure continued success of the Group.

We launched a three-phase transformation strategy across the Group in 2017 with the objective of setting up the business for growth both locally in Singapore and internationally.

We have completed the frst phase of restructuring and stabilising the Group in 2017, and we are already seeing positive results. The management team will continue to drive the next phases to focus on reinvigorating the business and achieving sustainable growth. These include strengthening our internationally diversifed portfolio, increasing efciency and cost-savings, as well as actualising proftability of projects through increased revenue streams. The plan is elaborated in the CEO’s business review in this report.

Our fundamentals remain sound. We have a healthy balance sheet, with low gearing and positive cash balances. Our strengths are underpinned by a strong brand image, broad expertise, extensive network across the region, intimate knowledge of the industry and the markets we operate in, as well as the talents and diversity of our workforce.

Nonetheless, we can do more to build on our strengths. In particular, we will leverage technology to increase productivity and bolster efciency of our operations. We will train our people to acquire the requisite skill sets so as to reap the benefts of enhanced innovative solutions and systems.

We have introduced a new management team who are focused and committed, and are able to make tough yet pragmatic decisions for the future of the Group. Many initiatives have been implemented during the year and much has been done to gear up the Group for the uncertainties we will face in the different markets we operate in.

As our business expand internationally, we have to operate in an increasingly complex environment with diverse regulations and practices. We continue to strengthen our compliance and control processes to ensure that our people are wellequipped to navigate the challenges of myriad laws and regulations in different jurisdictions. We adopt a zero-tolerance policy to all forms of corruption. We regularly review our processes to safeguard against corruption, as well as to protect the integrity of the Group.

Integrity is an invaluable asset in our business. It gives us a competitive advantage in the international marketplace. Through the years, we have earned a strong reputation of trust, credibility and reliability among our clients. We will employ all efforts to maintain our solid position in the market and fortify our competitiveness.

Outlook for 2018

The global economy entered 2018 on a surer footing. With a strong track record, we are wellpositioned to grow our interior ft-out business and increase market share in countries we operate in. The Group will increasingly seek to tap opportunities in turnkey projects which typically provide higher margins.

With an improving business environment and advancement in our transformation process, I am optimistic towards the overall outlook for the Group’s prospect. Barring any unforeseen circumstances, I am confdent that the management team will be able to deliver on its promise and achieve positive results in FY2018.

Acknowledgements

My heartfelt appreciation goes to the management and staff of the Group for their commitment and diligence in carrying out the transformation for the business.

I would also like to thank the Board of Directors for their guidance through this difcult year.

Last but not least, I would like to express my deep appreciation to shareholders for their patience and support as we transform our business and reinvigorate the Group for the future.

I look forward to continuing this journey together.



Tan Siok Chin (Ms)
Non-Executive Chairman &
Independent Director