Design Studio Furniture Manufacturer Limited 2 Quarter and Half

Design Studio Furniture Manufacturer Limited (Incorporated in Singapore) (Registration Number: 199401553D) 2nd Quarter and Half Year Financial Statement And Dividend Announcement For The Period Ended 30 June 2009 PAGE 1 OF 18 Design Studio Furniture Manufacturer Limited (Registration Number: 199401553D) 2nd Quarter and Half Year Financial Statement and Dividend Announcement PART 1 - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS 1(a) An income statement (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year. Income Statement Group 2nd Quarter ended 30.06.2009 30.06.2008 S$'000 S$'000 Revenue Cost of sales Gross profit Other income 35,672 (24,114) 11,558 123 11,681 Marketing and distribution expenses General and administrative expenses Profit from operations Finance expenses Finance income Share of result of an associate Profit before tax Tax expense Profit net of tax 1(a)(3) 1(a)(1) 1(a)(2) 1(a)(2) (880) (2,830) 7,971 (34) 15 731 8,683 (1,581) 7,102 16,344 +/(-) % 118.3 Half Year ended 30.06.2009 30.06.2008 S$'000 S$'000 58,339 (40,590) 17,749 123 17,872 (1,648) (3,266) 12,958 (95) 39 788 13,690 (2,309) 11,381 29,756 (21,407) 8,349 8,349 (1,473) (1,754) 5,122 (149) 129 (47) 5,055 +/(-) % 96.1 89.6 112.6 N.M 114.1 11.9 86.2 153.0 (36.2) (69.8) N.M 170.8 (11,655) 106.9 4,689 4,689 (738) 146.5 N.M 149.1 19.2 (789) 258.7 3,162 (59) 48 (47) 3,104 152.1 (42.4) (68.8) N.M 179.7 (665) 137.7 2,439 191.2 (926) 149.4 4,129 175.6 N..M.: Not Meaningful PAGE 2 OF 18 Design Studio Furniture Manufacturer Limited (Registration Number: 199401553D) Notes to Income Statement Note 1(a)(1) Profit from operations is determined after charging/(crediting) the following: Group 2nd Quarter ended 30.06.2009 30.06.2008 S$'000 S$'000 Depreciation of property, plant and equipment Foreign exchange loss/(gain), net Loss/(gain) on disposal of property, plant and equipment Amortisation of club membership Fair value (gain)/loss on investment securities Fair value gain of structured fixed deposit Impairment loss on doubtful receivables 574 1,321 1 2 (2) 641 (3) (1) 2 1 +/(-) % (10.5) N.M N.M 0.0 N.M N.M N.M Half Year ended 30.06.2009 30.06.2008 S$'000 S$'000 1,234 592 3 3 1 1,270 +/(-) % (2.8) 176 236.4 (1) N.M 3 1 (38) 0.0 N.M N.M N.M Note 1(a)(2) Finance expenses and finance income Group 2nd Quarter ended 30.06.2009 30.06.2008 S$'000 S$'000 Finance expenses - Bank overdrafts - Bank term loans - Bill payable and discounting - Finance leases - Bankers’ guarantee and commitment fee 23 4 6 1 34 Finance income - Fixed deposits - Sundry income 40 4 15 59 +/(-) % N.M (42.5) 0.0 (60.0) N.M (42.4) Half Year ended 30.06.2009 30.06.2008 S$'000 S$'000 59 10 23 3 95 1 5 7 136 149 +/(-) % N.M 1,080 42.9 (83.1) N.M (36.2) 15 15 46 2 48 (67.4) N.M 68.8 39 39 127 2 129 (69.3) N.M (69.8) Note 1(a)(3) Tax include the following: Group 2nd Quarter ended 30.06.2009 30.06.2008 S$'000 S$'000 Current tax Singapore Foreign Deferred tax Singapore Total 917 543 1,460 121 1,581 +/(-) % Half Year ended 30.06.2009 30.06.2008 S$'000 S$'000 1,567 621 2,188 121 2,309 880 23 903 23 926 +/(-) % 78.1 2,600 142.3 426.1 149.4 646 42.0 (4) N.M 642 127.4 23 665 426.1 137.7 PAGE 3 OF 18 Design Studio Furniture Manufacturer Limited (Registration Number: 199401553D) 1(b)(i) A balance sheet ( for the issuer and group ), together with a comparative statement as at the end of the immediately preceding financial year. Balance Sheets Group Note Non-current assets Property, plant and equipment Investment in subsidiaries Investment in an associate Club membership Deferred tax assets Loan to an associate Current assets Inventories Gross amount from customers for contract workin-progress Trade receivables - third parties - corporate shareholders - subsidiary - associate Prepayments Other receivables and deposits - third parties - subsidiaries - associate Investment securities Tax recoverable Fixed deposits Cash and bank balances Current liabilities Trade payables - third parties - subsidiaries Other payables Accrued operating expenses Deposits received Finance lease liabilities (current portion) Long-term bank loan, secured (current portion) Provision for tax 30.06.2009 S$'000 10,321 2,637 76 443 1,350 31.12.2008 S$'000 9,302 1,849 79 567 Company 30.06.2009 S$'000 6,721 1,072 2,250 76 55 1,350 31.12.2008 S$'000 5,051 1,072 2,250 79 176 - 1(b)(1) 1(b)(2) 1(b)(3) 1(b)(3) 1(b)(3) 1(b)(3) 1(b)(4) 1(b)(4) 1(b)(4) 10,484 4,777 15,087 14,633 1,325 881 679 270 4 19,638 7,393 75,171 10,484 3,362 15,691 11,047 2,022 570 4 93 28,140 3,019 74,432 2,614 5,465 14,766 14,633 1,325 395 291 1,119 270 4 19,530 7,091 67,503 929 4,102 15,143 11,047 991 1,015 229 4,537 4 28,031 2,396 68,424 1(b)(5) 6,059 757 17,229 2,150 164 3,071 29,430 45,741 86 50 60,432 5,644 680 16,081 5,868 242 313 2,855 31,683 42,749 213 2,671 50 51,612 4,179 1,178 613 15,575 2,136 17 2,617 26,315 41,188 19 50 52,643 3,699 455 13,943 5,854 65 297 2,855 27,168 41,256 78 2,671 50 47,085 Net current assets Non-current liabilities 1(b)(5) Finance lease liabilities (non-current portion) Long-term bank loan, secured (non-current portion) Convertible notes Net assets Equity attributable to equity holders of the Company Share capital Reserves Total equity 30,111 30,321 60,432 30,111 21,501 51,612 30,111 22,532 52,643 30,111 16,974 47,085 PAGE 4 OF 18 Design Studio Furniture Manufacturer Limited (Registration Number: 199401553D) Notes to Balance Sheets Note 1(b)(1) Inventories Group 30.06.2009 31.12.2008 S$'000 S$'000 Raw materials, at cost Work-in-progress, at cost 7,244 3,240 10,484 7,323 3,161 10,484 Company 30.06.2009 31.12.2008 S$'000 S$'000 2,385 229 2,614 927 2 929 Note 1(b)(2) Gross amount from customers for contract work-in-progress Group 31.12.2008 30.06.2009 S$'000 S$'000 Aggregate amount of costs incurred and recognised profits (less recognised losses) to date Less: Progress billings Contract work-in-progress in excess of progress billings Less: Expected losses on contracts Gross amount due from customers for contract work-inprogress 168,205 (163,428) 4,777 4,777 123,487 (120,125) 3,362 3,362 Company 30.06.2009 31.12.2008 S$'000 S$'000 157,754 (152,289) 5,465 5,465 114,578 (110,476) 4,102 4,102 Note 1(b)(3)Trade receivables Group 30.06.2009 31.12.2008 S$'000 S$'000 Third Parties: Trade receivables Retention monies Less: Allowance for doubtful receivables 9,303 5,840 15,143 (56) 15,087 9,692 6,054 15,746 (55) 15,691 Company 30.06.2009 31.12.2008 S$'000 S$'000 9,219 5,593 14,812 (46) 14,766 9,359 5,829 15,188 (45) 15,143 Movement in allowance accounts At beginning of the period/year Charge for the period/year At end of the period/year Corporate shareholders: Trade receivables Retention monies (55) (1) (56) (55) (55) 9,686 4,947 14,633 9,340 1,707 11,047 9,686 4,947 14,633 9,340 1,707 11,047 Subsidiary: Trade receivables Associate: Trade receivables Retention monies - - - 991 1,222 103 1,325 - 1,222 103 1,325 - PAGE 5 OF 18 Design Studio Furniture Manufacturer Limited (Registration Number: 199401553D) Note 1(b)(4)Other receivables and deposits Group 30.06.2009 31.12.2008 S$'000 S$'000 Third parties: Other receivables Deposits Amount due from subsidiaries (non-trade) Amount due from an associate (non-trade) 50 629 679 270 949 12 558 570 570 Company 30.06.2009 31.12.2008 S$'000 S$'000 86 205 291 1,119 270 1,680 72 157 229 4,537 4,766 Note 1(b)(5)Finance lease liabilities Minimum lease payments 30.06.2009 S$'000 Group Not later than one year Later than one year but not later than five years Total minimum lease payments Less: Amounts representing finance charges Present value of minimum lease payments Company Not later than one year Later than one year but not later than five years Total minimum lease payments Less: Amounts representing finance charges Present value of minimum lease payments Present value of payments 30.06.2009 S$'000 Minimum lease payments 31.12.2008 S$'000 Present value of payments 31.12.2008 S$'000 176 90 266 (15) 251 164 86 250 250 266 228 494 (39) 455 242 213 455 455 18 21 39 (3) 36 17 19 36 36 73 87 160 (17) 143 65 78 143 143 PAGE 6 OF 18 Design Studio Furniture Manufacturer Limited (Registration Number: 199401553D) 1(b)(ii) Aggregate amount of group’s borrowings and debts securities Amount repayable in one year or less, or on demand As at 30.06.2009 S$’000 Secured 164 Amount repayable after one year As at 30.06.2009 S$’000 Secured 86 S$’000 Unsecured 50 S$’000 Secured 2,884 As at 31.12.2008 S$’000 Unsecured 50 S$’000 Unsecured S$’000 Secured 555 As at 31.12.2008 S$’000 Unsecured - Details of any collateral As at 30 June 2009, our Group’s borrowings are secured by the following: (i) a mortgage over the Company’s leasehold factory building with a net book value of approximately S$3,851,000 (31 December 2008: S$3,980,000). The mortgage was related to the overdraft, trade and term loan facilities provided by the bank. The term loan was repaid in June 2009 and the Group is negotiating with the bank to review the security provided. (ii) pledge of fixed deposit of the Company amounting to approximately S$558,000 (31 December 2008: S$NIL). (iii) pledge of fixed deposit of a subsidiary amounting to approximately S$108,000 (31 December 2008: S$109,000); (iv) debenture incorporating fixed and floating charges up to S$1,645,000 (31 December 2008: S$1,656,000) over present and future assets of the subsidiary. (v) a corporate guarantee provided by the Company; (vi) plant and equipment of a subsidiary acquired under finance lease liabilities. PAGE 7 OF 18 Design Studio Furniture Manufacturer Limited (Registration Number: 199401553D) 1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year Consolidated Statement of Cash Flows Group 2nd Quarter ended 30.06.2009 30.06.2008 S$'000 S$'000 Cash flows from operating activities Profit before tax Adjustments: Impairment loss on doubtful receivables Depreciation of property, plant and equipment Loss/(gain) on disposal of property, plant and equipment Finance expenses Finance income Share of (gain)/loss of an associate Fair value gain on structured fixed deposit Amortisation of club membership Fair value loss on investment securities Currency translation difference Operating profit before working capital changes Decrease/(increase) in: Inventories Contract work-in-progress Trade receivables Prepayments, other receivables and deposits (Decrease)/increase in: Trade payables Bills payable to banks Other payables and accrued operating expenses Deposits received Cash flows from operations Finance expense paid Income taxes paid Net cash flows from operating activities Cash flows from investing activities Costs incurred for construction-in-progress Finance income received Proceeds from sale of property, plant and equipment Purchase of property, plant and equipment (Note B) Investment in an associate Loan to an associate Net cash flows used in investing activities 15 (1,057) (1,350) (2,392) (66) 48 2 (379) (900) (1,295) 39 75 (2,330) (1,350) (3,566) (300) 129 2 (630) (900) (1,699) 8,683 574 1 34 (15) (731) 2 (2) 56 8,602 827 (1,588) (7,075) 703 916 2,430 (2,525) 2,290 (34) (392) 1,864 3,104 641 (1) 59 (48) 47 2 1 3,805 (1,133) 1,286 (276) 337 634 (48) (202) 2,484 6,887 (59) (477) 6,351 13,690 1 1,234 3 95 (39) (788) 3 (12) 14,187 (1,415) (4,308) 762 415 1,225 (3,718) 7,148 (95) (1,875) 5,178 5,055 1,270 (1) 149 (129) 47 (38) 3 1 9 6,366 (1,598) (31) 7,165 562 (1,583) (396) (1,748) 2,305 11,042 (149) (811) 10,082 Half Year ended 30.06.2009 30.06.2008 S$'000 S$'000 PAGE 8 OF 18 Design Studio Furniture Manufacturer Limited (Registration Number: 199401553D) Consolidated Statement of Cash Flows (cont’d) Group 2nd Quarter ended 30.06.2009 30.06.2008 S$'000 S$'000 Cash flows from financing activities Decrease in fixed deposits pledged Dividends paid on ordinary shares by the Company Repayment of finance lease liabilities Repayment of long-term bank loan Net cash flows used in financing activities 1 (2,551) (67) (2,896) (5,513) 4 (2,551) (82) (117) (2,746) 1 (2,551) (205) (2,984) (5,739) 2,785 (2,551) (466) (239) (471) Half Year ended 30.06.2009 30.06.2008 S$'000 S$'000 Net (decrease)/ increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period (Note A) (6,041) 32,964 26,923 2,310 27,555 29,865 (4,127) 31,050 26,923 7,912 21,953 29,865 Notes to Consolidated Statement of Cash Flows A. Cash and cash equivalents 30.06.2009 S$'000 Cash and bank balances Fixed deposits Less: Fixed deposits pledged Cash and cash equivalents 7,393 19,638 27,031 (108) 26,923 30.06.2008 S$'000 6,053 23,917 29,970 (105) 29,865 B. Purchase of property, plant & equipment During the period, the Group acquired property, plant & equipment with an aggregate cost of $$2,330,000 (1H2008: $630,000) with cash. PAGE 9 OF 18 Design Studio Furniture Manufacturer Limited (Registration Number: 199401553D) 1(d)(i) A statement ( for the issuer and group ) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalization issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year. (A) Consolidated Statement of Comprehensive Income With effect from 1 January 2009, FRS 1 Presentation of Financial Statements requires an entity to present all nonowner changes in equity in a Consolidated Statement of Comprehensive Income. This is only a change in presentation and does not change the recognition, measurement or disclosure of specific transactions and other events required by other FRS. Group 2nd Quarter ended Half Year ended 30.06.2009 30.06.2008 +/(-) 30.06.2009 30.06.2008 +/(-) S$'000 S$'000 % S$'000 S$'000 % Profit net of tax Other comprehensive income Foreign currency translation Total comprehensive income attributable to equity holders of the Company 7,102 17 7,119 2,439 1 2,440 191.2 1,600 191.8 11,381 (10) 11,371 4,129 5 4,134 175.6 N.M 175.1 (B) Statement of Changes in Equity Group Share Capital S$'000 30,111 30,111 Revenue reserves S$'000 21,557 11,381 (2,551) 30,387 Other reserves S$'000 (56) (10) (66) Total S$'000 51,612 11,371 (2,551) 60,432 2009 Opening balance at 01 January 2009 Total comprehensive income for 1H2009 Dividends on ordinary shares Closing balance at 30 June 2009 2008 Opening balance at 01 January 2008 Total comprehensive income for 1H2008 Dividends on ordinary shares Closing balance at 30 June 2008 30,111 30,111 11,326 4,129 (2,551) 12,904 (49) 5 (44) 41,388 4,134 (2,551) 42,971 Company Share Capital S$'000 30,111 30,111 Revenue reserves S$'000 16,974 8,109 (2,551) 22,532 Total S$'000 47,085 8,109 (2,551) 52,643 2009 Opening balance at 01 January 2009 Total comprehensive income for 1H2009 Dividends on ordinary shares Closing balance at 30 June 2009 2008 Opening balance at 01 January 2008 Total comprehensive income for 1H2008 Dividends on ordinary shares Closing balance at 30 June 2008 30,111 30,111 7,272 3,942 (2,551) 8,663 37,383 3,942 (2,551) 38,774 PAGE 10 OF 18 Design Studio Furniture Manufacturer Limited (Registration Number: 199401553D) 1(d)(ii) Details of any changes in the company’s share capital arising from right issue, bonus issue, share buy-back, exercise of share options of warrants, conversion of other issues of equity securities, issue of share for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year. (1) Current period reported on No of ordinary shares Issued and fully paid-up ordinary shares as at 30 June 2009 255,125,887 S$’000 30,111 The outstanding Convertible Notes as at 30 June 2009 was S$50,000. Assuming these notes were converted into new shares based on 90% of the average of the five consecutive closing prices per share prior to 30 June 2009, the number of ordinary shares to be issued would be 276,396. (2) Immediately preceding financial year No of ordinary shares Issued and fully paid-up ordinary shares as at 30 June 2008 255,125,887 S$’000 30,111 The outstanding Convertible Notes as at 30 June 2008 was S$50,000. Assuming these notes were converted into new shares based on 90% of the average of the five consecutive closing prices per share prior to 30 June 2008, the number of ordinary shares to be issued would be 150,659. 1(d)(iii) To show the total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year. 30.06.2009 Total number of shares (excluding treasury shares) 255,125,887 30.06.2008 255,125,887 1(d)(iv) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at the end of the current financial period reported on. There were no sales, transfers, disposal, cancellation and/or use of treasury shares as at 30 June 2009 as the Company does not have any treasury shares. 2. Whether the figures have been audited, or reviewed and in accordance with which standard (e.g. the Singapore Standard on Auditing 910 (Engagements to Review Financial Statements), or an equivalent standard) The figures have not been audited or reviewed. PAGE 11 OF 18 Design Studio Furniture Manufacturer Limited (Registration Number: 199401553D) 3. Where the figures have been audited, or reviewed, the auditors’ report (including any qualifications or emphasis of matter) Not applicable. 4. Whether the same accounting policies and methods of computation as in the issuer’s most recently audited annual financial statements have been applied. The Group and Company have applied the same accounting policies and methods of computation in the financial statements for the current reporting period compared with the audited financial statements as at 31 December 2008, except for the adoption of accounting standards (including its consequential amendments) and interpretations applicable for the financial period beginning 1 January 2009. Please see note 5. 5. If there are any changes in the accounting policies and methods of computation including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change In the current year, the Group adopted the new/revised Financial Reporting Standards (“FRS”) and Interpretations of FRS (“INT FRS”) that are effective for annual periods beginning on or after 1 January 2009. Changes to the Group’s accounting policies have been made as required, in accordance with the transitional provisions in the respective FRS and INT FRS. The following are the new or amended FRS that are relevant to the Group: FRS 1 (Revised) FRS 108 Presentation of Financial Statements Operating Segments The adoption of the above FRS did not result in any substantial change to the Group’s accounting policies nor any significant impact on the financial statements. 6. Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends: (a) Based on weighted average number of ordinary shares on issue (b) Based on fully diluted basis (detailing any adjustments made to the earnings) Group 2nd Quarter ended Half Year ended 30.06.2009 30.06.2008 30.06.2009 30.06.2008 (a) Based on weighted average number of ordinary shares in issue of 255,125,887 (b) On fully diluted basis 2.78 cents 0.96 cents 4.46 cents 1.62 cents 2.78 cents 0.96 cents 4.46 cents 1.62 cents The basic earnings per ordinary share for the half year ended 30 June 2009 is calculated by dividing the firsthalf year profit attributable to shareholders of S$ 11.4 million (30 June 2008: S$ 4.1 million) by the weighted average number of 255,125,887 (30 June 2008: 255,125,887) shares in issue during the financial period. The basic earnings per ordinary share for the second quarter ended 30 June 2009 is calculated by dividing the second quarter profit attributable to shareholders of S$ 7.1 million (30 June 2008: S$ 2.4 million) by the weighted average number of 255,125,887 (30 June 2008: 255,125,887) shares in issue during the financial period. PAGE 12 OF 18 Design Studio Furniture Manufacturer Limited (Registration Number: 199401553D) The diluted earnings per ordinary share for the half year ended 30 June 2009 is calculated by dividing the first-half year profit attributable to shareholders of S$ 11.4 million (30 June 2008: S$ 4.1 million) by the weighted average number of 255,127,414 (30 June 2008: 255,126,714) shares in issue during the financial period. The diluted earnings per ordinary share for the second quarter ended 30 June 2009 is calculated by dividing the second quarter profit attributable to shareholders of S$ 7.1 million (30 June 2008: S$ 2.4 million) by the weighted average number of 255,128,924 (30 June 2008: 255,127,543) shares in issue during the financial period. 7. Net asset value (for the issuer and group) per ordinary share based on issued share capital of the issuer at the end of the (a) current period reported on and (b) immediately preceding financial year (1) Current period reported on Group 30.06.2009 Net asset value per ordinary share for the period based on existing issued share capital as at 30 June 2009 of 255,125,887 ordinary shares 23.69 cents Company 30.06.2009 20.63 cents (2) Immediately preceding financial year Group 31.12.2008 Net asset value per ordinary share for the year based on existing issued share capital as at 31 December 2008 of 255,125,887 ordinary shares 20.23 cents Company 31.12.2008 18.46 cents 8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group's business. The review must discuss any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors. It must also discuss any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on. Profit and Loss (2Q2009 vs 2Q2008 and 1H2009 vs 1H2008) 1. Revenue by Business Segment 2nd Quarter ended 30.06.2009 30.06.2008 S$’000 S$’000 Residential property projects Interior fitting-out projects Distributorship Total 17,617 16,862 1,193 35,672 11,134 4,517 693 16,344 Half Year ended 30.06.2009 30.06.2008 S$’000 S$’000 24,919 31,624 1,796 58,339 22,275 6,451 1,030 29,756 % 58.2 273.3 72.2 118.3 % 11.9 390.2 74.4 96.1 PAGE 13 OF 18 Design Studio Furniture Manufacturer Limited (Registration Number: 199401553D) 2Q2009 vs 2Q2008 For 2Q2009, Group’s revenue increased by 118.3% to S$35.7 million as compared to the revenue for 2Q2008. Revenue from residential property projects increased by 58.2% to S$17.6 million for 2Q2009 as compared with S$11.1 million for 2Q2008. Revenue from interior fitting-out projects increased from S$4.5 million for 2Q2008 to S$16.9 million for 2Q2009 as a result of more overseas projects completed during the period. Revenue from distributorship increased by S$0.5 million to S$1.2 million for 2Q2009 compared with S$0.7 million for 2Q2008. 1H2009 vs 1H2008 On a year-to-date basis, the increase in the Group’s revenue showed a similar trend to the quarter results. Group’s revenue in 1H2009 increased by 96.1% to S$58.3 million as compared to the revenue for 1H2008. Revenue from residential property business increased by 11.9% to S$24.9 million for 1H2009 as compared with S$22.3 million for 1H2008. Revenue from interior fitting-out projects increased from S$6.5 million for 1H2008 to S$31.6 million for 1H2009. Revenue from distributorship increased by S$0.8 million to S$1.8 million for 1H2009 compared with S$1.0 million for 1H2008. 2. Gross profit 2Q2009 vs 2Q2008 The Group achieved a gross profit of S$11.6 million for 2Q2009. The gross margin improved from 28.7% in 2Q2008 to 32.4% for 2Q2009. 1H2009 vs 1H2008 On a year-to-date basis, the gross margin improved from 28.1% for 1H2008 to 30.4% for 1H2009. 3. Expenses 2Q2009 vs 2Q2008 Marketing and distribution expenses increased by 19.2% to S$0.9 million for 2Q2009 as compared to S$0.7 million in 2Q2008. The increase was in line with the increase in revenue across all business sectors. Gross general and administrative expenses increased by 90.5% from S$0.8 million in 2Q2008 to $1.5 million in 2Q2009 and in line with the increase in sales. As a result of foreign exchange loss (net) of S$1.3 million, the net general and administrative expenses increased to S$2.8 million in 2Q2009. 1H2009 vs 1H2008 On a year-to-date basis, marketing and distribution expenses increased by 11.9% to S$1.6 million for 1H2009 as compared to S$1.5 million in 1H2008. The increase was in line with the increase in revenue across all business sectors. Gross general and administrative expenses increased by 69.5% from S$1.6 million in 1H2008 to S$2.7 million in 1H2009 and in line with the increase in sales. As a result of foreign exchange loss (net) of S$0.6 million, the net general and administrative expenses increased to S$3.3 million in 1H2009. 4. Finance expenses / income 2Q2009 vs 2Q2008 Finance expenses decreased by 42.4% to S$34,000 in 2Q2009 as compared with S$59,000 recorded in 2Q2008. The decrease was mainly due to lower utilisation of bank facilities. Finance income decreased by 68.8% to S$15,000 in 2Q2009 as compared with S$48,000 recorded in 2Q2008 as a result of lower interest rate. PAGE 14 OF 18 Design Studio Furniture Manufacturer Limited (Registration Number: 199401553D) 1H2009 vs 1H2008 On a year-to-date basis, the decrease in the finance expenses and income was similar to the half year results. Finance expenses decreased by 36.2% to S$95,000 in 1H2009 as compared with S$149,000 recorded in 1H2008. Finance income decreased by 69.8% to S$39,000 in 1H2009 as compared with S$129,000 recorded in 1Q2008. 5. Net Profit 2Q2009 vs 2Q2008 The Group achieved a net profit before tax of S$8.7 million for 2Q2009, as compared with S$3.1 million for 2Q2008. The income tax expense also increased by S$ 0.9 million from S$0.7 million in 2Q2008 to S$ 1.6 million in 2Q2009. Net profit after tax increased by S$4.7 million to S$7.1 million for 2Q2009 as compared to the previous corresponding period. 1H2009 vs 1H2008 On a year-to-date basis, the Group achieved a net profit before tax of S$13.7 million for 1H2009, registered an increase of 170.8% as compared with S$5.1 million for 1H2008. As a result of the increase in profit, the income tax expense for 1H2009 was S$ 2.3 million as compared to S$ 0.9 million in the previous corresponding period. Consequently, this resulted in an increase in net profit after tax by S$7.3 million to S$11.4 million for 1H2009. Balance Sheet (30 June 2009 vs 31 December 2008) Property, plant and equipment increased by S$1.0 million to S$10.3 million as at 30 June 2009 as compared to S$9.30 million as at 31 December 2008. The increase was mainly due to the purchase of plant and equipment during the period. Total cash and cash equivalents decreased from S$31.2 million in 31 December 2008 to S$27.0 million as at 30 June 2009. The decrease in cash and cash equivalents was mainly due to a loan extended to an associate, repayment of long term bank loan and dividends payment during the period. Trade payables decreased by S$0.4 million to S$6.1 million as at 30 June 2009 as compared with 31 December 2008. Accrued operating expenses increased by S$1.1 million to S$17.2 million as at 30 June 2009 as compared with 31 December 2008. Deposits received from customers decreased by S$3.7 million to S$2.2 million. Cash Flow (1H 2009 vs 1H2008 and 2Q2009 vs 2Q2008) 2Q2009 vs 2Q2008 For the 3 month period ended 30 June 2009, there was net cash outflow of S$6.0 million as a result of cash used in the repayment of long-term bank loan, payment of dividends and an advancement of a loan of S$1.4 million to an associate during the quarter. The increase was partly offset by cash inflow from net operating activities at S$1.9 million. 1H2009 vs 1H2008 For the 6 month period ended 30 June 2009, there was net cash outflow of S$4.1 million as a result of cash used in the repayment of long-term bank loan, payment of dividends and an advancement of a loan of S$1.4 million to an associate. The increase was partly offset by cash inflow from net operating activities at a healthy S$5.2 million as a result of higher operating profits and controlled working capital. PAGE 15 OF 18 Design Studio Furniture Manufacturer Limited (Registration Number: 199401553D) 9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results The Group’s performance is in line with the commentary previously disclosed in the results announcement via SGXNET for the first quarter ended 31 March 2009. 10. A commentary at the date of the announcement of the competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months Our order book on hand stood at S$193.5 million as at 30 June 2009. With our strong pipeline of projects on hand and barring any unforeseen circumstances, the Group is optimistic that it will continue to perform well and is expecting better performance as compared to FY2008. 11. Dividend (1) Current Financial Period Reported On Any dividend declared for the current financial period reported on? Name of dividend Dividend type Dividend amount per share (in SG cents) Tax rate Cash Interim 1.25 cents per ordinary share One-tier tax exempt (2) Corresponding Period of the immediately Preceding Financial Year Any dividend declared for the corresponding period of the immediately preceding financial year? Nil Date payable 8 September 2009 Books closure date 28 August 2009, 5.00pm 12. If no dividend has been declared/recommended, a statement to the effect. Not applicable PAGE 16 OF 18 Design Studio Furniture Manufacturer Limited (Registration Number: 199401553D) PART II - ADDITIONAL INFORMATION REQUIRED FOR (This part is not applicable to Q1, Q2, Q3 or Half Year Results) 13. FULL YEAR ANNOUNCEMENT Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer's most recently audited annual financial statements, with comparative information for the immediately preceding year Not applicable 14. In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments Not applicable 15. A breakdown of sales Not applicable 16. A breakdown of the total annual dividend (in dollar value) for the issuer's latest full year and its previous full year Not applicable AGGREGATE VALUE OF TRANSACTION UNDER RULE 920(1)(A)(II) OF THE LISTING MANUAL Aggregate value of transactions conducted pursuant to the general mandate for interested persons transactions for the 3 months period ended 30 June 2009 pursuant to Rule 920(1)(a)(ii) of the listing Manual: Name of interest person Aggregate value of all interested persons transactions during the period under review (excluding transactions less than S$100,000 and transactions conducted under shareholders’ mandate pursuant to Rule 920) Nil Aggregate value of all interested person transactions conducted under shareholders’ mandate pursuant to Rule 920 (excluding transactions less than S$100,000) Straits Construction Co (Pte) Ltd & its associates Depa Interior LLC & its associates Nil Nil S$10,084,860 BY ORDER OF THE BOARD Lim Bee Lian Eliza Secretary PAGE 17 OF 18