Osim FR 050407.indd

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Notes to the Financial Statements - 31 December 2006 (cont’d)2. Summary of significant accounting policies (cont’d)2.12 Intangible assets (cont’d)a) Goodwill (cont’d)Where goodwill forms part of a cash-generating unit (or group of cash-generating units) and part of the operationwithin that unit is disposed of, the goodwill associated with the operation disposed of is included in the carryingamount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of inthis circumstance is measured based on the relative values of the operation disposed of and the portion of the cashgeneratingunit retained.Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after 1 January 2005 aretreated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreignoperations and translated at the closing rate at the balance sheet date.Goodwill and fair value adjustments which arose on acquisitions of foreign subsidiaries before 1 January 2005 aredeemed to be assets and liabilities of the parent company and are recorded in SGD at the rates prevailing at the dateof acquisition.The Group does not reverse in a subsequent period, any impairment loss recognised for goodwill.b) Club membershipClub membership is measured at cost less accumulated amortisation and any impairment loss. Club membership isamortised on a straight-line basis over the estimated useful life of 22 years.c) Other intangible assetsIntangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assetsacquired in a business combination is their fair values as at the date of acquisition. Following initial recognition,intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.The useful lives of intangible assets are assessed to be either fi nite or indefi nite. Intangible assets with fi nite lives areamortised on a straight-line basis over the estimated economic useful lives and assessed for impairment wheneverthere is an indication that the intangible asset may be impaired. The amortisation period and the amortisation methodfor an intangible asset with a fi nite useful life are reviewed at least at each fi nancial year-end. The amortisationexpense on intangible assets with fi nite lives is recognised in the profi t and loss account through the ‘depreciationand amortisation expenses’ line item.Intangible assets with indefi nite useful lives are tested for impairment annually or more frequently if the eventsor changes in circumstances indicate that the carrying value may be impaired either individually or at the cashgeneratingunit level. Such intangibles are not amortised. The useful life of an intangible asset with indefi nite life isreviewed annually to determine whether the useful life assessment continues to be supportable.Notes to the Financial Statements 93Annual Report 2006
Notes to the Financial Statements - 31 December 2006 (cont’d)2. Summary of significant accounting policies (cont’d)2.12 Intangible assets (cont’d)c) Other intangible assets (cont’d)The following classes of intangible assets are acquired by the Group through the acquisition of subsidiaries:i) Franchise rights and trademarksFranchise rights are paid to the franchisor, General Nutrition International, Inc. (“GNC”), in respect ofevery retail store opened by the Group and entitle the Group the right to operate each retail store using thefranchisor’s trademarks, trade names and operating system. Franchise rights are amortised over 20 years ona straight-line basis.Trademark registration costs relate to fees paid to register the “L.A.C” trademark and are amortised over 20years on a straight-line basis.ii)Distribution rightsDistribution rights relate to fees paid to GNC for the exclusive rights to distribute GNC products to otherretailers, distributors and merchants in Singapore and rights granted to third parties to distribute certainproducts exclusively in a specifi ed territory for a limited period of time. The distribution fees paid to GNC areamortised over 20 years on a straight-line basis, and the third party distribution rights are amortised over theagreement period ranging from 1 to 4 years.Gain or loss arising from derecognition of an intangible asset is measured as the difference between the net disposalproceeds and the carrying amount of the asset and are recognised in the profi t and loss account when the asset isderecognised.2.13 Impairment of non-financial assetsThe Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any suchindication exists, or when annual impairment testing for an asset (i.e. an intangible asset with an indefi nite useful life, anintangible asset not yet available for use, or goodwill acquired in a business combination) is required, the Group makes anestimate of the asset’s recoverable amounts.Notes to the Financial Statements 94Annual 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
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
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Page 63 and 64: Financial Contents64 Directors’ R
Page 65 and 66: Directors’ ReportFor the Year end
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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
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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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Osim FR 050407.indd

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