Osim FR 050407.indd

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New directors are at present appointed by way of a board resolution,after the NC approves their appointment. Such new directors mustsubmit themselves for re-election at the next AGM of the Company.Article 92 of the Articles requires one third of the Board to retireby rotation at every AGM.Principle 5: Board PerformanceThe NC, in considering the re-appointment of any director, evaluatesthe performance of the director. The Chairman & CEO will assesseach director’s contribution to the Board, and discuss the resultswith the chairman of the NC. The assessment parameters includesattendance record at meetings of the Board and Board committees,intensity of participation at meetings, the quality of interventionsand special contributions.The NC will evaluate the Board’s performance as a whole. Theassessment process adopted both quantitative and qualitativecriteria, such as return on equity, the success of the strategic andlong-term objectives set by the Board, and the effectiveness of theBoard in monitoring management’s performance against the goalsthat have been set by the Board. The NC will be working with anexternal professional firm on the evaluation criteria.Audit Committee (“AC”)Principle 11: Audit CommitteePrinciple 12: Internal ControlsThe AC comprises three members, all of whom are independentnon-executive directors. The chairman of the AC, Mr Michael KanYuet Yun, is by profession a Chartered Accountant. The othermembers of the AC have many years of experience in businessmanagement, finance and legal services. The NC is of the view thatthe members of the AC have sufficient financial managementexpertise and experience to discharge the AC’s functions.The AC performs the following main functions:1) Reviews the audit plans of the internal and external auditors ofthe Company and ensures the adequacy of the company’ssystem of accounting controls and the co-operation given bythe Company’s management to the external and internal auditors;2) Reviews the quarterly and annual financial statements and theauditors’ report on the annual financial statements of the Groupand the Company before their submission to the board ofdirectors;3) Reviews effectiveness of the Group and the Company’s materialinternal controls, including financial, operational and compliancecontrols and risk management via reviews carried out by theinternal auditors;4) Meets with the external auditors, other committees, andmanagement in separate executive sessions to discuss anymatters that these groups believe should be discussed privatelywith the AC;5) Reviews legal and regulatory matters that may have a materialimpact on the financial statements, related compliance policiesand programmes and any reports received from regulators;6) Reviews the cost effectiveness and the independence andobjectivity of the external auditors;7) Reviews the nature and extent of non-audit services providedby the external auditors;8) Recommends to the board of directors the external auditors tobe nominated, approves the compensation of the externalauditors, and reviews the scope and results of the audit;Corporate Governance Report 55 Annual Report 2006
9) Reports actions and minutes of the AC to the board of directorswith such recommendations as the AC considers appropriate;and10) Reviews interested person transactions in accordance with therequirements of the Singapore Exchange Securities TradingLimited (SGX-ST)’s Listing Manual.The AC has the express power to conduct or authorise investigationsinto any matters within its terms of reference. Minutes of the ACmeetings are regularly submitted to the Board for its informationand review.The AC, having reviewed all non-audit services provided by theexternal auditors to the Group, is satisfied that the nature and extentof such services would not affect the independence of the externalauditors. The AC has also conducted a review of interested persontransactions.The AC also conducts a review to ensure that there are no improperactivities of the Company (if any).The AC convened four meetings during the year with full attendancefrom all members. The AC has also met with internal and externalauditors, without the presence of the Company’s management, atleast once a year.The Company’s external auditors, Ernst & Young (“EY”), carry out,in the course of their statutory audit, a review of the effectivenessof the Company’s material internal controls, including financial,operational and compliance controls, and risk management annuallyto the extent of their scope as laid out in their audit plan. Materialnon-compliance and internal control weaknesses noted during theiraudit, and the auditors’ recommendations, are reported to the AC.The Internal Audit follows up on EY’s recommendations as part ofits role in the review of the Company’s internal control systems.The AC has reviewed the Company’s risk assessment, and basedon the IA audit reports and management controls in place, it issatisfied that there are adequate internal controls in the Company.The AC expects the risk assessment process to be a continuingprocess.The AC has also instructed the Company to embark on the EnterpriseRisk Management (“ERM”) initiatives for better assessment andmanagement of the company risks. The Company has engagedKPMG as its consultant for the development of ERM framework.Principle 13: Internal AuditsThe Internal Audit (“IA”) function is currently performed by anAudit & Risk Management (“A&RM”) team. The A&RM team reportsdirectly to the chairman of the AC on audit matters, and to theChief Financial Officer on administrative matters. The AC reviewsA&RM team’s reports on a quarterly basis. The AC also reviewsand approves the annual audit plans and resources to ensure thatthe A&RM team has the necessary resources to adequately performits functions. The A&RM team has adopted the Standards forProfessional Practice of Internal Auditing set by The Institute ofInternal Auditors.To ensure the adequacy of the internal audit function, the ACreviews the A&RM team’s activities on a half yearly basis. In 2002,the team, together with PricewaterhouseCoopers and the supervisionof the AC, has completed the development of the MinimumAcceptable Controls and Control Self-Assessment programmes forthe Company. The assessment exercises are done on an ongoingbasis.Corporate Governance Report 56 Annual Report 2006
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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 42 and 43: Capital ExpenditureCapexS$’000 Le
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 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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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
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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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