Osim FR 050407.indd

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Notes to the Financial Statements - 31 December 2006 (cont’d)41. Segment information (cont’d)Geographical segmentsTurnover, assets and capital expenditure are allocated based on the location of the business operations.North AsiaSouth AsiaAmerica / Africa / Europe /Middle East / Oceania Eliminations Total2006 2005 2006 2005 2006 2005 2006 2005 2006 2005$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000TurnoverSales to external customers 341,965 291,027 203,502 150,178 77,469 61,299 – – 622,936 502,504Inter-segment sales 50,831 4,812 183,330 158,701 – – (234,161) (163,513) – –392,796 295,839 386,832 308,879 77,469 61,299 (234,161) (163,513) 622,936 502,504Other segment informationSegment assets 156,359 136,962 84,450 126,460 10,316 8,105 – – 251,125 271,527Investment in associatedcompanies and a joint venture 11,093 10,381 1,064 1,077 128,581 154,579 – – 140,738 166,037Unallocated assets 27,913 24,336Total asset 419,776 461,900Capital expenditure• Fixed assets 11,929 5,086 10,985 11,933 1,462 5,684 – – 24,376* 22,703*• Intangible assets 31 3,956 1,179 7,856 173 7,336 – – 1,383 19,148* This does not include provision for restoration costs of $390,000 (2005: $3,735,000), of which $Nil (2005: $855,000) wasacquired through a subsidiary during the year.42. Financial risk management objectives and policiesThe Group’s principal fi nancial instruments, other than derivative fi nancial instruments, comprise bank loans and overdraft, financeleases and hire purchase contracts, and cash and short term deposits. The main purpose of these fi nancial instruments is to fi nancethe Group’s operations. The Group has various other fi nancial assets and liabilities such as trade receivables and trade payables,which arise directly from its operations.The Group also enters into derivative transactions, including principally interest rate swaps and forward currency contracts. Thepurpose is to manage the interest rate and currency risks arising from the Group’s operations and its sources of fi nancing.It is, and has been throughout the year under review, the Group’s policy that no trading in derivative fi nancial instruments shall beundertaken.Notes to the Financial Statements 161Annual Report 2006
Notes to the Financial Statements - 31 December 2006 (cont’d)42. Financial risk management objectives and policies (cont’d)The main risks arising from the Group’s fi nancial instruments are interest rate risks (both fair value and cash fl ow), liquidity risk,foreign currency risk and credit risk. The board reviews and agrees policies for managing each of these risks and they are summarisedbelow. The Group’s accounting policies in relation to derivative fi nancial instruments are set out in Note 2.28.a) Interest rate riskThe Group obtains additional fi nancing through bank borrowings and leasing arrangements. The Group’s policy is to obtainthe most favourable interest rates available without increasing its foreign currency exposure. Surplus funds are placed withreputable banks and/or fi nancial institutions.The Group’s policy is to manage its exposure to interest risks using a mix of fi xed and variable rate debts. The Group’s policyis to keep between 30% to 75% of its bills payable for working capital at fi xed rates of interest. As at 31 December 2006, aftertaking into account an interest rate swap, approximate 61% (2005: 40%) of the Group’s bills payables for working capital areat fi xed rate.The Group’s policy is to hedge 100% of the term loan for investment in joint venture. As at 31 December 2006, the Grouphas entered into two interest rate swaps to hedge 100% (2005: 100%) of the term loan.b) Liquidity riskIn the management of liquidity risk, the Group monitors and maintains a level of cash and cash equivalents deemed adequateby management to fi nance the Group’s operations and mitigate the effect of fl uctuations in cash fl ows.c) Foreign exchange riskThe Group’ foreign exchange risk arises both from its subsidiaries operating in foreign countries, which generate revenueand incur costs denominated in foreign currencies and from those operations of its local subsidiaries which are in foreigncurrencies.The Group uses foreign exchange contracts in managing its foreign exchange risk resulting from cash fl ows from anticipatedtransactions and fi nancing arrangements denominated in foreign currencies, primarily the United States dollars and JapaneseYen. Transaction risk is calculated in each foreign currency and includes foreign currency denominated assets and liabilitiesand fi rm and probable purchase and sale commitments.Notes to the Financial Statements 162Annual Report 2006
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Process and Performanceas the growt
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Customer Service Department“I put
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Sales Department“I look forward t
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Research & Development“Every prod
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Contents17 CEO’s Message22 The Ro
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... ensuring that as we grow,they g
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previous year. Q4 2006 revenue rose
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The Role ModelsThe Role Models 22 A
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Ms Teo Sway HeongNon-Executive Dire
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Mr Peter Lee Hwai KiatMs Celine Cha
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Result of our Growth StrategyThe Gr
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Performance ReviewIn building a glo
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ProfitabilityIn FY2006, buoyant rev
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An Environment of GrowthMarch 2006
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Financial HighlightsOur goal is to
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Number of OutletsOSIM OutletsNorth
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Capital ExpenditureCapexS$’000 Le
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Corporate Structure as at 21 Februa
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OSIM Global NetworkSINGAPORECHINATA
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Corporate InformationBoard of Direc
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Non Executive DirectorMs Teo Sway H
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Corporate Governance Report 51 Annu
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The Company worked closely with a p
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New directors are at present appoin
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In 2006, the Audit & Risk Managemen
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The aggregate value of interested p
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Financial Contents64 Directors’ R
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Directors’ ReportFor the Year end
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Directors’ Report (cont’d)Share
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Directors’ Report (cont’d)Share
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Directors’ Report (cont’d)Audit
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Independent Auditors’ Reportto th
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Balance Sheetsas at 31 December 200
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Consolidated Profit and Loss Accoun
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Statements of Changes in Equity for
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Consolidated Cash Flow Statementfor
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Consolidated Cash Flow Statement fo
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Notes to the Financial Statements -
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Page 171 and 172: Major PropertiesUnexpiredterm ofDes
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Page 179 and 180: Appendix (cont’d)DEFINITIONSIn th
Page 181 and 182: Appendix (cont’d)PROPOSED RENEWAL
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