Osim FR 050407.indd

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Capital ExpenditureCapexS$’000 Leasehold Land & Buildings 21 Plant and Machinery 17 Computers 1,520 Motor Vehicles 1,135 Shop Renovations 16,090 Furniture and Fittings 4,285 Office Equipment 81823,886Furnitureand FittingsOfficeEquipmentLeaseholdLand &BuildingsComputersMotor VehiclesPlant andMachineryShopRenovationsGroup Cash Flow (S$m)2006 2005Operating profit before working capital changes 79.4 57.5Net cash flows generated from operating activities 56.9 85.9Net cash flows used in investing activities (34.0) (187.9)Net cash flows used in financing activities (45.0) 95.8Net increase/(decrease) in cash and cash equivalents (22.1) (6.2)Cash and cash equivalents at beginning of year 56.1 61.4Net effect of exchange rate changes (4.2) 0.9Cash and cash equivalents at end of year 29.8 56.1 Net cash flows from operating activities hasdecreased due to lower improvement in workingcapital changes Net cash flows used in investing activities foroutlets renovation and purchase of shares insubsidiaries Net cash flows used in financing activities hasdecreased due to repayment of bank loansand dividendsFinancial Highlights 41 Annual Report 2006
Risk FactorsIndustry specific risksCompany specific risks1. Changes in consumer tastesAs with all other consumer products, sales of our products aredependent on consumers’ demand for our products and aresusceptible to changes in consumer tastes. There is no assurancethat our intensive efforts in niche marketing, brand managementand product innovation will continue to enable us to satisfy theevolving consumer tastes.2. Susceptibility to downturns in economic cyclesThe nature of our healthy lifestyle products make us moresusceptible to reduced demand in times of economic downturnthan other kinds of businesses because our products may notbe considered as essential health products.3. Health epidemics, terror alerts, terror attacks and other acts ofviolence or war may adversely affect sales.A large part of our outlets are located at high traffic malls andairports. Any of the above events will lead to a decrease inconsumer traffic in malls and airports and consequently mayhave a material adverse effect on sales.4. Inferior quality and unsubstantiated product performance claimsby imitators may lead to adverse media publicity and negativemarket sentimentsA number of our products have always attracted imitationproducts traders. Their inferior quality and unsubstantiatedproduct performance claims may lead to adverse media publicityand negative market sentiments and may have a materialadverse effect on sales.5. Foreign exchange risksWhile our sales are mainly denominated in the respective localcurrencies in which the sales arise, namely the S$, RM, HK$,RMB, NT$, A$ and US$, our costs of procurement of productsfrom our contract manufacturers are incurred mainly in US$,Yen and Euro. There is therefore an exchange transaction risk.6. Expansion of business and franchisee networkWe plan to open OSIM Focus and Chair Spa stores in existingand new geographical markets and sign on new franchisees.There are risks that these initiatives may not be successful.7. The results of Brookstone are highly dependant on sales duringthe fourth quarter of the year.A high percentage of our joint venture company, Brookstone’ssales are transacted during the fourth quarter of the year. Asa result, Brookstone’s annual profits are substantially madeduring the year end. If there should be any unfavourable externalevents or deviation from projected demand for products, thesecould have a material adverse effect on Brookstone’s sales andprofitability.Financial Highlights 42 Annual Report 2006
Page 1: Process and Performanceas the growt
Page 5: Customer Service Department“I put
Page 9: Sales Department“I look forward t
Page 13: Research & Development“Every prod
Page 17 and 18: Contents17 CEO’s Message22 The Ro
Page 19 and 20: ... ensuring that as we grow,they g
Page 21 and 22: previous year. Q4 2006 revenue rose
Page 23 and 24: The Role ModelsThe Role Models 22 A
Page 25 and 26: Ms Teo Sway HeongNon-Executive Dire
Page 27 and 28: Mr Peter Lee Hwai KiatMs Celine Cha
Page 29 and 30: Result of our Growth StrategyThe Gr
Page 31 and 32: Performance ReviewIn building a glo
Page 33 and 34: ProfitabilityIn FY2006, buoyant rev
Page 35 and 36: An Environment of GrowthMarch 2006
Page 38 and 39: Financial HighlightsOur goal is to
Page 40 and 41: Number of OutletsOSIM OutletsNorth
Page 44 and 45: Corporate Structure as at 21 Februa
Page 46 and 47: OSIM Global NetworkSINGAPORECHINATA
Page 48 and 49: Corporate InformationBoard of Direc
Page 50 and 51: Non Executive DirectorMs Teo Sway H
Page 52 and 53: Corporate Governance Report 51 Annu
Page 54 and 55: The Company worked closely with a p
Page 56 and 57: New directors are at present appoin
Page 58 and 59: In 2006, the Audit & Risk Managemen
Page 60 and 61: The aggregate value of interested p
Page 63 and 64: Financial Contents64 Directors’ R
Page 65 and 66: Directors’ ReportFor the Year end
Page 67 and 68: Directors’ Report (cont’d)Share
Page 69 and 70: Directors’ Report (cont’d)Share
Page 71 and 72: Directors’ Report (cont’d)Audit
Page 73 and 74: Independent Auditors’ Reportto th
Page 75 and 76: Balance Sheetsas at 31 December 200
Page 77 and 78: Consolidated Profit and Loss Accoun
Page 79 and 80: Statements of Changes in Equity for
Page 81 and 82: Consolidated Cash Flow Statementfor
Page 83 and 84: Consolidated Cash Flow Statement fo
Page 85 and 86: Notes to the Financial Statements -
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Major PropertiesUnexpiredterm ofDes
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Shareholdings Statistics as at 8 Ma
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Notice of Annual General Meeting (c
Page 177 and 178:
Notice of Annual General Meeting (c
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Appendix (cont’d)DEFINITIONSIn th
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Appendix (cont’d)PROPOSED RENEWAL
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Appendix (cont’d)3.1.3 The Direct
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Appendix (cont’d)4. Rationale and
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Appendix (cont’d)11. ACTION TO BE
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OSIM INTERNATIONAL LTDCompany Regis
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SINGAPOREOSIM International Ltd65 U
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