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(Extracted from Annual Report 2017)

DEAR SHAREHOLDERS,

The financial year ended December 31, 2017 ("FY2017") was a challenging one for Ntegrator International Ltd. ("Ntegrator" or the "Group"). Nonetheless, the Group continued to focus on our Project Sales as well as Project Management and Maintenance Services segments by pressing on with our business development eff orts in key markets of Singapore, Myanmar and Vietnam.

Backed by our established track record and strong relationships with our customers, we were encouraged by the success of our eff orts which materialised during FY2017 and at the beginning of 2018. However at the same time, we were faced with a blip in Vietnam as a result of unforeseen technical issues. Correspondingly, this had an impact on our financial performance for the financial year.

2017 in review

In FY2017, the Group recorded revenue of S$33.1 million, as compared to S$66.9 million achieved in the previous corresponding financial year. The reduction in revenue was largely due to lower revenue contribution from our Project Sales segment. During the financial year under review, the segment posted a revenue of S$10.5 million, against S$47.6 million in FY2016. The lower sales was mainly due to a number of technical issues faced in Vietnam, which resulted in the Group's customers declining to sign any new contracts and hence, impacting the Group's overall revenue.

Notwithstanding this, the Group's Project Management and Maintenance Services segment continued to provide a steady stream of recurring income, reported a 16.9% increase in revenue to S$22.6 million in FY2017.

In line with the lower Group revenue, Ntegrator's gross profit declined by 40.5% to S$7.0 million in FY2017. Gross profit from the Project Sales Segment decreased by S$1.9 million from S$3.7 million in FY2016 to S$1.8 million in FY2017, while gross profit from the Project Management and Maintenance Services Segment fell by 35.9% to S$5.2 million in FY2017 despite the segment's higher turnover. This is due to the additional costs incurred for a nationwide project which the Group had tendered for, where the project had been delayed for almost a year.

Overall, Ntegrator incurred a net loss of S$2.0 million in FY2017 compared to a net profit of S$2.9 million in FY2016.

At the close of FY2017, the Group maintained a sound balance sheet, with cash and cash equivalents of S$7.4 million, while total borrowings stood at S$20.6 million as at December 31, 2017. Shareholder's equity amounted to S$18.7 million as at December 31, 2017, while it stood at S$21.0 million as at December 31, 2016.

Moving into 2018: Building on a firm foundation

As we moved into 2018, the Group expects the business environment to stay challenging. With rising costs and keen competition to persist in the sector, margins are expected to be undermined.

Nevertheless, we are pleased to be awarded four new contracts from our repeat customers in Myanmar and Singapore in February 2018. Also, aft er resolving the technical issues in Vietnam, we have resumed discussions with our customers in Vietnam, including sending proposals to them. Additionally, we are awaiting the outcome of a tendered nationwide project in Singapore which has been pushed back for a year.

Moving forward, we will build on our firm foundation to drive growth and further strengthen our brand name in the industry. The Group will continue to capitalise on our strong relationships with existing customers and proven capabilities, as well as seek opportunities to expand our clientele base and strengthen our order book further. As at December 31, 2017, the Group's orderbook came to an all-time high of S$75.5 million, since our listing on the Singapore Exchange in 2005.

We reaff irm our commitment to sustainability with the publication of our maiden sustainability report guided by the Global Reporting Initiative Standards: Core option. For this sustainability report, we provide insights into the way we do business, while highlighting our environmental, social, governance and economic performance.

As a leading integration specialist for network infrastructure and voice communication systems, we are committed to maintain a sound sustainability reporting ("SR") framework to fulfil our social responsibility and safeguard the interest of the Group's stakeholders.

Appreciation

In closing, I would like to express my sincere appreciation to our suppliers and customers for their unwavering support, which has helped us to build and reinforce our position as one of the leading players in the IT and telecommunications industries in the region.

I would also like to thank our Board members, management team and staff for their commitment and valuable contribution to the Group. Finally, to our shareholders, your continued faith in us will drive us to press ahead to overcome any unforeseen challenges and seize growth opportunities in our targeted markets.

Han Meng Siew
Executive Chairman

April 2, 2018