Osim FR 050407.indd

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Appendix (cont’d)and shareholder approval (in addition to an immediate announcement) is required where:-2.2.3 the value of a proposed transaction is equal to or exceeds 5% of the latest Group’s audited NTA; or2.2.4 the aggregate value of all transactions (including the subject transaction) entered into with the same Interested Person duringthe same fi nancial year, is equal to or more than 5% of the Group’s latest audited NTA. The aggregation will exclude anytransaction that has been approved by shareholders previously, or is the subject of aggregation with another transaction thathas been approved by shareholders.2.3 For the purposes of aggregation, Interested Persons Transactions below $100,000 each are to be excluded.2.4 Part VIII of Chapter 9 allows for a listed company to seek a mandate (the “Shareholders’ Mandate”) from its shareholders forrecurrent transactions with Interested Person of a revenue or trading nature necessary for its day-to-¬day operations such as salesof supplies and materials, but not in respect to the purchase or sale of assets, undertakings or businesses.2.5 For the purposes of Chapter 9:-2.5.1 an “interested person” means a director, chief executive offi cer or controlling shareholder of the listed company, or anassociate of such director, chief executive offi cer or controlling shareholder;2.5.2 a “controlling shareholder” is a person who holds directly or indirectly 15% or more of the nominal amount of all voting sharesin the listed company (unless otherwise excepted by SGX-ST) or in fact exercises control over a company; and2.5.3 an “associate” in relation to any director, chief executive offi cer or controlling shareholder (being an individual) means hisimmediate family (i.e., spouse, children, adopted children, step-children, siblings and parents), the trustees of any trustof which he or his immediate family is a benefi ciary or, in the case of a discretionary trust, is a discretionary object, andany company in which he and his immediate family together (directly or indirectly) have an interest of 30% or more. An“associate” in relation to a controlling shareholder (being a company) means any other company which is its subsidiary orholding company or is a subsidiary of such holding company or one in the equity of which it and/or such other company orcompanies taken together (directly or indirectly) have an interest of 30% or more.3. SHAREHOLDERS’ MANDATE3.1 Background3.1.1 The principal activities of OSIM are marketing, distributing and franchising of a comprehensive range of healthy lifestyleproducts. Other than Daito-OSIM Healthcare Appliance (Suzhou) Co., Ltd, and Daito-OSIM (Thailand) Co., Ltd, all theGroup’s production needs are outsourced, for example, to contract manufacturers in Japan and Taiwan as the Group focuseson its strengths in marketing and brand management. As at the Latest Practicable Date, the Group has 1,135 point-of-salesoutlets over 28 countries worldwide.3.1.2 It is envisaged that in the normal course of business of the Group, transactions involving the sale, purchase, provision orsupply of services and/or products between the Group and Interested Persons will likely occur from time to time. Suchtransactions include, but are not limited to, licensing and distribution agreements, franchise agreements, transactions of arevenue and trading nature.Appendix 181Annual Report 2006
Appendix (cont’d)3.1.3 The Directors are seeking the approval from Shareholders for the proposed renewal, of the Shareholders’ Mandate for theGroup to enter, in their normal course of business, with the class of Interested Persons described in paragraph 3.3, into theInterested Person Transactions described in paragraph 3.2, provided that such transactions are made at arm’s length andon the Group’s normal commercial terms and not prejudicial to the interests of the Company and its minority Shareholders.3.1.4 The Shareholders’ Mandate will take effect from the date of the passing of Ordinary Resolution 9 to be proposed at the AGMuntil the next annual general meeting of the Company. Thereafter, approval from Shareholders for a subsequent renewal ofthe Shareholders’ Mandate will be sought at each subsequent Annual General Meeting of the Company.3.2 Nature and Scope of the Interested Person Transactions Contemplated under the Shareholders’ Mandate3.2.1 Franchising, distribution and licensing agreementsWithin the ambit of this category are franchising arrangements with FK Marketing Ltd, and distribution and licensingagreements with the PRC affi liates (as defi ned in paragraph 3.3.1).3.2.2 Sales of healthy lifestyle productsThis category covers the sale of healthy lifestyle products such as, but not limited to, massage chairs, foot refl exology rollers,handheld massagers and fi tness equipments to Interested Persons, including, without limitation, agreements for the sale,supply and distribution of such products.3.3 Class of Interested Persons3.3.1 Interested Person refers to a director, chief executive offi cer or controlling shareholder of OSIM, or an associate (as defi nedin paragraph 2.5.3 of the Appendix) of such director, chief executive offi cer or controlling shareholder. The Shareholders’Mandate, if renewed, will apply to the following class of Interested Persons only:- OSIM (Langfang) Co., Ltd- OSIM (Guangzhou) Co., Ltd- OSIM (Beijing) Co., Ltd(the above collectively known as the “PRC affi liates”)- FK Marketing LtdNote: Ms Tao Dong Mei, who is the wife of Mr Leow Lian Soon, has a 90 per cent interest in the shares of OSIM (Langfang)Co., Ltd. As such, Mr Leow Lian Soon is deemed to have a 90 percent interest in the shares of the same company. MsTao Dong Mei and OSIM (Langfang) Co., Ltd each owns 50 per cent in both OSIM (Guangzhou) Co., Ltd and OSIM(Beijing) Co., Ltd. Mr Francis Leow Lian Teck who is the brother of Mr Leow Lian Soon owns 50 percent interest in theshares of FK Marketing Ltd. Accordingly, Mr Leow Lian Soon is deemed to have a 50 percent interest in the shares ofthe aforementioned three companies.3.3.2 Any person or company who, at the point in time when the transaction is proposed to be entered into, is an associate ofany one or more of the persons named above. The term “associate” has the meaning set out in paragraph 2.5.3 of theAppendix.3.3.3 Transactions with Interested Persons which do not fall within the ambit of the Shareholders’ Mandate shall be subject to therelevant provisions of Chapter 9 of the Listing Manual.Appendix 182Annual 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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