OSIM International Annual Reoprt 2009

OSIM INTERNATIONAL LTD
Annual Report 2009

OUR FOCUS:
Continue to build profitability, positive cash flow and expand the business.
Strengthen our balance sheet and build long term value for all our stakeholders.
Net Cash Flows from 2009 2008 Growth

Operating Activities
65
For year ended 31 December
$ Sales $477m $457m +$20m
Profit / (Loss)
million EBITDA $51m $39m +32%
Before tax $38m ($92m)
+ 181 % After tax $23m ($99m)
Net cash flows from $65m $23m +181%

operating activities
EBITDA
$
51
Per share (cents)
Diluted earnings 3.7 (18.35)
Net assets value 15 13
million
+ 32%
At year end
Cash & cash equivalents
Shareholders funds
$63m
$97m
$26m
$69m
+142%
+41%
Net cash / (borrowings) $28m ($37m)
Profit Before Tax
38
Returns on shareholders funds
$ Profit before tax
Profit after tax
39%
24%
Nm
Nm
million Shareholders value

Returns on Final dividends in May 2010 ($m) 6.6 -
Shareholders Funds 39% Share price at 31 December (cents) 53 6.7 +690%
OUR FOCUS
Performance Review
Building strong balance sheet and profitability is a key focus and priority.
In FY 2009, revenue rose by $20 million to $477 million. The increase in sales is driven by launch of new products during
the year.
EBITDA grew 32% to $51 million (EBITDA margin 11% vs 8.5% in 2008) due to new product innovation and better
operating efficiency.
Profit before tax at $38 million was due to better margins, more effective shop & salesman productivity and better control
of financial expenses.
Profit after tax for the year was $23 million.
Revenue by Region – New Products Contributing
Region FY 2009 FY 2008

$m % $m %
North Asia 259 54 225 49
South Asia 160 34 160 35
America/Africa/Europe/
58 12 72 16
Middle East/Oceania
Total 477 100 457 100
OSIM INTERNATIONAL LTD 03 ANNUAL REPORT 2009

OUR FOCUS
During the year, we have positive sales growth of $20 million due to contribution from new products. Our range of products
such as massage chairs, foot massagers, head massagers, neck & shoulder massagers and nutrition supplements all
contributed positively.
Sales from North Asia accounted for 54% of total sales. Sales from the rest of the world should be better when the US
market recovers.
Strengthened Balance Sheet – Net Cash Position
During the year, net cash flow from operating activities rose by 181% to $65 million compared with $23 million in FY2008.
This was due to higher sales, better operating margins & working capital management and non-cash impairment of
goodwill.
The prudent one-off non-cash impairment of goodwill of $9.6 million was for GNC Australia where goodwill has been fully
written down.
As at 31 December 2009, the cash & cash equivalents were $63 million compared with $26 million a year ago. This was
achieved after paying down bank loans of $27 million and investing in fixed assets of $6 million.
Net assets rose to $104 million compared with $76 million as at 31 December 2008.
Our financial ratios remain strong from improved demand for our products and better operating efficiency.

OUR BRANDS
We inspire people to take control over their well-being and achieve their own
definition of feeling great and looking good.
Brand OSIM RICHLIFE GNC BROOKSTONE
North Asia China South Asia America

Geographical South Asia
Presence Africa
Europe
Middle East
Number of
Outlets
534 42 146 314
Pillars of
Innovation

FOUNDER, CHAIRMAN & CEO’S LETTER
My Dear Fellow Shareholders

On behalf of the Board of Directors, I am pleased to present to you a strong set of results for the financial year ended 31 December 2009. This
remarkable performance was achieved despite unprecedented global financial crisis which had impacted most economies. For this, I am grateful
for the hard work, courage and optimism of our people who have once again shown they are resourceful and resilient. Together we have rebuilt
OSIM.
WE CREATE DEMAND
30 years of innovative excellence
OSIM is an innovative and competitive company. We are still hungry. If you are hungry, you fight. When you fight, you find solutions.
From one table in People’s Park in 1980, we have expanded to 29 countries and are serving our customers in more than 1,000 outlets globally.
We celebrate our 30th anniversary this year. Almost every 10 years there will be some kind of market crisis. Each crisis is an opportunity to
rebuild, to reflect on where we can get better, where we have gone wrong. We got stronger after each crisis.
Full year PBT $38 million

Returns on shareholders funds 39%
For the year, profit before tax was $38 million. You will be pleased to know we registered returns on shareholders funds of 39%.
We successfully launched a new range of products such as uDream, uDesire, uCrown 2, uPapa Hug & uKimono. These products have
contributed to group sales of $477 million. Sales from North Asia namely China, Hong Kong & Taiwan accounted for 54% of total sales.
Profit after tax is $23 million. In my mind, this turnaround is the result of our renewal process. I believe we have laid the foundation for our next
sustainable phase of growth.
Net cash flows from operating activities $65 million +181%

EBITDA $51 million +32%
Net cash flows from operating activities jumped 181% to $65 million compared with $23 million in FY2008. This was due to higher sales, better
operating margins and working capital management and non-cash impairment of goodwill.

OSIM is an
Innovative and Competitive company.
I am confident about the future.
We Create Demand.
Mr Ron Sim
Founder, Chairman and CEO
Building strong balance sheet and profitability is a key focus and priority for me and my team. Shareholders funds strengthened to $97 million
from $69 million a year ago. EBITDA at $51 million was up 32%.
Net borrowings of $37 million at end 2008 turned into strong net cash position of $28 million at 31 December 2009. Cash and cash equivalents
at year end was $63 million.
Increasing shareholders value

Because of the strong results, the Board of Directors is pleased to recommend a final tax exempt dividend of 1 cent per share or about 28% of
FY2009 profit after tax. If you have bought OSIM shares at 10 cents, your yield would have been 10%.
You will be happy to know that OSIM was among the top stock gainer in the year, moving from 6.7 cents at end December 2008 to 53 cents at
end December 2009.
Growing our brands

Today we have 534 OSIM, 42 RichLife, 146 GNC and 314 Brookstone outlets, giving us a total count of 1,036 outlets.
We have been in China for 16 years. Our first shop was in Beijing. China is like at least 30 countries. There is so much to do and so many more
cities to go. This year, we intend to open 50 to 80 OSIM outlets and 60 to 100 RichLife outlets.
Our GNC and RichLife outlets are doing well under the leadership of CEO Cynthia Poa. At Brookstone, we survived and it should get better under
new CEO Ron Boire.
We are the market leader in all our key markets. With a strong balance sheet and net cash position, we have the financial strength to build our
portfolio of brands in Asia and the rest of the world. Our vision is to be the global leader in healthy lifestyle products.
Upholding corporate governance standards

Board renewal
We are committed to high corporate governance standards. We are consistently within the top 30 companies on Business Times’ Governance
Transparency Index.

On 1 February this year, two of our independent directors, Mr Michael Kan and Mr Ong Kian Min retired from their positions. I would like to
express my gratitude for their contribution and support since OSIM went public in year 2000.
At the same time, I would like to welcome Mr Tan Soo Nan and Mr Sin Boon Ann who were elected to the Board on the same day as Independent
Directors. Mr Tan is currently CEO of Singapore Totalisator Board & Singapore Pools (Private) Limited while Mr Sin is a director at Drew & Napier
LLC and a Member of Parliament at Tampines GRC.
What is the outlook for 2010?

I believe there will be many opportunities for us in 2010. We will increase our focus on creating demand through our innovative products. Product
innovation and competitive positioning will continue to drive consumer demand.
We are optimistic in the coming year that our new range of products will drive growth. We launched the World’s First Little Massage Sofa, uSoffa
Petit in January 2010 with international celebrity Lin Chi Ling to strong market reception.
The consumer market in China is expanding. We continue to enjoy strong sales and with more new products being introduced, this market will
contribute positively.
Overall, our focus is to continue to build profitability, positive cash flow and expand the business. This will strengthen our balance sheet and build
long term value for all our stakeholders.
Our talents
Our gratitude
What remains is for me to acknowledge again the contribution of our people. I am proud they have risen to the occasion and overcome the
challenges. They have many talents and strengths and have practised our core values of Integrity, Interactive and Innovative.
At the same time, my gratitude to all our customers, suppliers, bankers and business associates for their unwavering support in a turbulent year.
A special mention should be given to you my fellow shareholders who supported us during the credit crunch.
I am confident about the future. We Create Demand.

BOARD OF DIRECTORS
UPHOLDING CORPORATE GOVERNANCE STANDARDS

BOARD RENEWAL
We are consistently in the top 30 companies on Business Times’ Governance Transparency Index.
We welcome to the Board:

1. Mr Tan Soo Nan (CEO of Singapore Totalisator Board & Singapore Pools (Private) Limited)
2. Mr Sin Boon Ann (Director at Drew & Napier LLC & Member of Parliament at Tampines GRC)
First row left to right
Mr Ron Sim
Founder, Chairman and
Chief Executive Officer
Mr Charlie Teo
Executive Director and
Chief Operating Officer
(HQ & South Asia)
Second row left to right
Mr Peter Lee
Executive Director,
Chief Financial Officer and
Company Secretary
Mr Richard Leow
(North Asia)

BOARD OF DIRECTORS
First row left to right
Ms Teo Sway Heong

Non-Executive Director
Mr Tan Soo Nan

Independent Non-Executive Director
(Chairman of Audit Committee)
Second row left to right
Mr Khor Peng Soon

Mr Sin Boon Ann

(Chairman of Remuneration Committee
and Nominating Committee)
Our gratitude to Mr Ong Kian Min and Mr Michael Kan for their contribution since year 2000.
“It has been my honour and privilege to serve on “Under Ron & his team, OSIM is now a well
OSIM’s Board since its IPO and public listing in known name and leader in the healthy lifestyle
July 2000. During this period stretching over industry, both locally and internationally.
more than 9 years, I have seen OSIM grow to
During my ten years on OSIM's Board, it was
become the successful and competitive global
inspiring and gratifying to witness and be part of
company it is today, through an exciting era of
the Company's expansion and growth.
high double-digit expansion as well as through
its most difficult and challenging period. I am optimistic that OSIM will rise to greater
heights and further realise its full potential as the
I wish OSIM all the very best in all future endeavours.”
leader of the healthy lifestyle industry.”
Mr Ong Kian Min
Mr Michael Kan Yuet Yun, PBM
(Outgoing Independent Non-Executive Director)
(Outgoing Independent Non-Executive Director)

MANAGEMENT TEAM
OPTIMISTIC, COURAGEOUS & FORWARD LOOKING

We have overcome the challenges and emerged stronger.
Left to right
Mr Tan Kia Tong

Chief Technology Officer
Mr Charlie Teo
(HQ and South Asia)
Mr Ron Sim
Founder, Chairman and
Chief Executive Officer
Mr Richard Leow
(North Asia)
Mr Peter Lee
Executive Director,
Chief Financial Officer and
Company Secretary
Ms Celine Cha
Chief Merchandising Officer
SHAREHOLDINGS (including deemed interests)

As at 17 February 2010, Mr Ron Sim owns 405,078,135 shares or 61.1% of the outstanding
shares and 73,722,139 warrants or 53.6% of outstanding warrants.
In total, the four executive directors and management team own 414,239,035 shares or
62.5% of the outstanding shares and 74,677,033 warrants or 54.3% of outstanding warrants.

MANAGEMENT TEAM
RICHLIFE & GNC, our nutrition supplement brands are expanding well under Cythnia Poa’s leadership.
We appointed Jackson Tai as Chairman of Brookstone effective January 2009. Under Jack's stewardship,
Brookstone made good progress. In October 2009, we welcomed Ron Boire who was most recently
President at Toys “R” Us and held key positions at Sony and Best Buy.
Mr Jackson Tai Mr Ron Boire Ms Cynthia Poa

Chairman President and CEO Group CEO and
Brookstone Brookstone Executive Director
Global Active Limited

DIRECTORS & MANAGEMENT PROFILE
Executive Directors
Mr Ron Sim Chye Hock 51 Mr Peter Lee Hwai Kiat 46

Founder, Chairman and Chief Executive Officer Executive Director and Chief Financial Officer
and Company Secretary
Mr Sim is a multi-awarded businessman, an inspiration not just to the OSIM team
but to other entrepreneurs as well. Inspiring and leading by example, his spirited Mr Lee is in charge of OSIM’s financial strategy and control, investor relations, talent
business sense has earned him the Business Times “Businessman of the Year”, as management, human resources and administration, and management information
well as the Ernst & Young “Entrepreneur of the Year 2003”. He was also conferred system. Mr Lee was Group Financial Controller of Golden Village prior to joining the
educational recognition like PhD in Business Administration in 2000 and Doctor of group in 2000. Appointed to the Board in 2005, he is also an Advisory member of
Philosophy in Marketing Management in 2002 from the prestigious Wisconsin Spring SEEDS (Startup Enterprise Development Scheme) and Republic Polytechnic
International University and the American University of Hawaii, and Honorary Fellow CIE (Centre for Innovation and Enterprise). A Certified Public Accountant, he
of the Marketing Institute of Singapore in 2007. Likewise, Mr Sim is an Advisory graduated from the National University of Singapore with a Bachelor’s degree in
Board member of SMU Lee Kong Chian School of Business. Accounting, and obtained his MBA from Manchester Business School in 2005.
Mr Charlie Teo Chay Lee 51

Executive Director and Chief Operating Officer Non Executive Directors
(HQ & South Asia)
Ms Teo Sway Heong 47
With his mastery ofmore than 20 years of experience leading OSIM sales,
Non-Executive Director
marketing and operations, Mr Teo executes well to achieve our business
goalshandles his responsibilities with aplomb. Stretching across boundaries in
During OSIM’s formative years, Ms Teo played a crucial role as the Group’s Head of
the Southeast Asian region, which includes countries like Malaysia, Thailand,
Administration and Human Resources. Appointed to the Board in March 2000, Ms
Indonesia, and the Singapore headquarters, his leadership and insight make him
Teo has been a long-time valued member of OSIM, consistently contributing to the
a key figure in the company.
various endeavours of the company.
He joined OSIM in 1989 and was appointed to the Board in 2000. Mr Teo is a
council member of Singapore Retailers Association.
Independent Non Executive Directors
Mr Richard Leow Lian Soon 50
Executive Director and Chief Operating Officer
(North Asia)
Mr Khor Peng Soon 59
Extensive experience in handling the North Asia operations has enabled Mr Leow
Mr Khor brought with him sterling credentials when he was appointed to the
to effectively tackle the challenges in the Greater China territory. He looks after
Board in 2000. He was a Managing Director of Temasek Holdings (Pte) Ltd, and
OSIM’s China business spanning more than 30 cities. His energy and dedication
held positions in the Sembawang Group of Companies, Ernst & Young, and the
to OSIM is noteworthy. He has spent most of his time outside Singapore since
Economic Development Board and Telecoms Malaysia. As a Colombo Plan
joining the Group in 1987 and was appointed to the Board in 2000. He is based
scholar in 1969, he was conferred a Bachelor of Mechanical Engineering (First
in Shanghai, China.
Class Honours) by the University of Auckland, New Zealand in 1972 and a
Masters Engineering Science (Industrial Engineering) from the University of New
South Wales, Australia in 1981.

DIRECTORS & MANAGEMENT PROFILE
Mr Sin Boon Ann, 51 Ms Celine Cha 42

Independent Non-Executive Director Chief Merchandising Officer
An educator before joining Drew & Napier in 1992, Mr Sin taught at the Faculty Ms Cha is responsible for the Group’s product design, development and
of Law of the National University of Singapore from 1987. At Drew & Napier LLC, merchandising and quality assurance. A professional par excellence, Ms Cha's
he specializes in corporate finance, banking, joint ventures, investments & outstanding achievements in the merchandising department has been a
acquisitions with a directorial role. A Bachelor of Arts & Bachelor of Laws fundamental force in growing OSIM's a strong presence in the market. Thorough
(Honours) degree holder from National University of Singapore and Master of and meticulous, with a strong understanding of the company’s diverse
Laws from the University of London, he is also a Member of Parliament for the merchandising strategies and successful implementation, Ms Cha rose from the
Tampines Group Representative Constituency. Mr Sin joined the Board on 1 ranks, joining the Group in 1995 and was promoted to Chief Merchandising
February 2010. Officer in June 2005.
Mr Tan Soo Nan, 61 Mr Jackson Tai, 58

Independent Non-Executive Director Chairman, Brookstone Inc
Mr Tan is the Chief Executive Officer of Singapore Pools (Private) Limited, a Mr Tai was appointed Chairman of Brookstone in January 2009. He was former
wholly owned subsidiary of Singapore Totalisator Board where he is concurrently vice-chairman and chief executive officer of DBS Group Holdings and previously
the Chief Executive. A Bachelor of Business Administration (Honours) degree managing director in the Investment Banking Division of J.P. Morgan & Co. Mr
holder from The University of Singapore, he is also a Member of the Income Tax Tai is currently non-executive director of ING Groep NV, MasterCard
Board of Review, Goods and Services Tax Board of Review, and Council Member Incorporated, and CapitaLand, Member of the Bloomberg Asia Pacific Advisory
of Football Association of Singapore. Mr Tan was formerly the Chief Executive Board and of the Harvard Business School Asia Pacific Advisory Board and
Officer of Temasek Capital (Private) Limited and Senior Managing Director of Trustee of Rensselaer Polytechnic Institute.
DBS Bank and had over 29 years of experience. Mr Tan joined the Board on 1
February 2010. Mr Ron Boire, 48
President and CEO, Brookstone Inc
Management Team Before joining Brookstone in October 2009, Mr Boire held key positions at Sony
Electronics, Inc and Best Buys where he served as a member of the Executive
Mr Tan Kia Tong 54 Committee among others. After which he joined Toys “R” Us, Inc. where he
ultimately became President. A Masters in Business Administration degree
Chief Technology Officer
holder from Columbia Business School and London Business School, the
Anti-Defamation League awarded Mr. Boire the S. David Feir International
A Chartered Engineer, Mr Tan has steered OSIM’s R&D department to greater
Humanitarian Award in 2002. He is also actively involved with the National
heights since joining in 2002. Collaborating with various international teams, he
Multiple Sclerosis Society and currently serves as Vice Chairman of the Board of
has spearheaded OSIM’s technical product development capabilities in the
Directors.
international market creating some of the world’s firsts in design and
technologies. A member of the Institution of Engineering and Technology UK, he
holds a Master of Science in Electrical & Electronic Engineering from the Ms Cynthia Poa Kheng Bee 56
University of Bradford/UMIST, and was awarded the Public Administration Medal Group CEO and Executive Director, Global Active Limited
(Bronze) in 2000.
Founder of Nature’s Farm in 1982, which she later sold, Ms Poa is today is a
shareholder and chief executive officer of Global Active, the sole franchisee for
GNC in Singapore, Malaysia and Australia and the franchisor for RichLife in
China. With 28 years experience in the retail and distribution industry of
nutritional supplements, her insightful knowledge of the industry and passion for
the business help Global Active continue to expand and build brand equity for all
the brands it represents.

OUR GLOBAL TEAM
TRUSTED PARTNER
Our approachable people help
our customers look after their
well-being & lifestyle, through
understanding our products
& their benefits.
OSIM Singapore Team
OSIM Malaysia Team OSIM Hong Kong Team
OSIM Shanghai Team OSIM Taiwan Team

OSIM Headquarters, Singapore
Brookstone Headquarters, USA OSIM Philippines OSIM New Zealand OSIM Bahrain
OSIM Romania OSIM Korea OSIM Saudi Arabia
OSIM India OSIM Guangzhou Team

OSIM Iran OSIM UK OSIM Oman OSIM Australia OSIM Thailand
OSIM International Business Team Global Active Team
OSIM Indonesia Team OSIM Beijing Team

OUR CUSTOMER EXPERIENCE
HEARTS WINNING HEARTS

At OSIM, we adopt a warm, sincere and professional approach to serve you.
We provide you with solutions to improve your well-being.
We build lifetime relationship with you.

OUR MOTTO
CHALLENGING YOUR SPIRIT
TO DO YOUR BEST
Since 2001, we have been sponsoring the OSIM International Triathlon -
our continuing commitment toward cultivating a positive attitude in life.
OUR KEY MILEST0NES
RELEVANT INNOVATION
For 30 years, we consistently offer innovative and high quality
products, and services to meet our customers’ needs.
1997 1998
Lydia Sum & Moses Lim Carina Lau
OSIM Leisure Massage Chair OSIM Air Chair
2000 2002
Gong Li
OSIM Mermaid
Michael Wong
OSIM Millennium Chair
2002 Introduced four business divisions - Healthfocus, Hygienefocus, Fitnessfocus & Nutritionfocus.
2005
2008
2003 Launched a “four in one” new

concept store - OSIM Focus
2009
OSIM introduces the
innovative concept
store, Chair Inspirations
at ION Orchard
Jeanette Aw
OSIM uSqueez Warm
Title sponsorship of OSIM

Singapore International
Triathlon 2009
OSIM uDream
2010
S.H.E Lin Chi-Ling
OSIM uKimono OSIM uSoffa Petit
CORPORATE HIGHLIGHTS
5-Year Financial Highlights 27
Corporate Governance Report 33
Corporate Information 40
Group Structure 41
OSIM Global Network 42

5-YEAR FINANCIAL HIGHLIGHTS
Summarised Profit & Loss Accounts

Year ended 2005 2006 2007 2008 2009
$'m $'m $'m $'m $'m
Restated
Turnover 503 623 524 457 477

Profit before tax (excluding Brookstone results) 45 57 15 22 38
Net profit after tax (excluding Brookstone results) 37 48 12 15 23
Net profit after tax (including Brookstone results) 47 34 3 (99) 23
Turnover ($’M) Profit Before Tax ($’M)

(excluding Brookstone results)
2005 503 2005 45
2006 623 2006 57
2007 524 2007 15
2008 457 2008 22
2009 477 2009 38
OSIM INTERNATIONAL LTD 27

2 ANNUAL REPORT 2009
5-YEAR FINANCIAL HIGHLIGHTS (CONT’D)
Summarised Cash Flows

Year ended 2005 2006 2007 2008 2009
$'m $'m $'m $'m $'m
Operating cash flows before working capital changes 58 79 44 42 64

Net cash flows generated from operating activities 86 57 51 23 65
Net cash flows used in investing activities (188) (34) (8) (8) (4)
Net cash flows generated from /
(used in) financing activities 96 (45) (43) (15) (23)
Net (decrease)/increase in cash and cash equivalents (6) (22) (0) 0 38
Cash and cash equivalents at beginning of year 61 56 30 28 26
Net effect of exchange rate changes 1 (4) (2) (2) (1)
Cash and cash equivalents at end of year 56 30 28 26 63
Net Cash Flows Generated from Cash and Cash Equivalents ($’M)
Operating Activities ($’M) at end of year
2005 86 2005 56
2006 57 2006 30
2007 51 2007 28
2008 23 2008 26
2009 65 2009 63

Summarised Balance Sheets

Year ended 2005 2006 2007 2008 2009
$'m $'m $'m $'m $'m
Restated Restated Restated
Shareholders' equity 167 170 159 70 97

Minority interests 7 6 7 6 7
174 176 166 76 104
Represented by:
Fixed assets 42 49 39 30 20
Associated companies and a Joint Venture 166 141 128 13 12
Goodwill on consolidation 21 22 20 20 10
Intangible assets 18 18 15 14 12
Other non current assets 11 16 20 15 10
258 246 222 92 64
Current assets 204 174 143 122 167

Current liabilities (190) (171) (151) (112) (123)
Net current assets/(liabilities) 14 3 (8) 10 44
Less: Non-current liabilities

Term loans (90) (67) (44) (23) (0)
Deferred taxation (4) (4) (3) (3) (3)
Others (4) (2) (1) (0) (1)
(98) (73) (48) (26) (4)
174 176 166 76 104
Other ratio:
Net asset value per share (cents) 37 31 30 13 15
Shareholders’ Equity ($’M) Net Asset Value Per Share (Cents)

2005 167 2005 37
2006 170 2006 31
2007 159 2007 30
2008 70 2008 13
2009 97 2009 15

Number of Outlets
Year ended 2005 2006 2007 2008 2009
North Asia 312 329 322 329 301

South Asia 231 323 291 227 194
America/Africa/Europe/Middle East/Oceania 45 34 36 36 39
OSIM 588 686 649 592 534
RichLife / GNC 144 139 133 153 188

Brookstone 304 310 322 315 314
1,036 1,135 1,104 1,160 1,036
Number of Outlets
OSIM RichLife / GNC Brookstone

2005 588 2005 144 2005 304
2006 686 2006 139 2006 310
2007 649 2007 133 2007 322
2008 592 2008 153 2008 315
2009 534 2009 188 2009 314

Turnover by Geographical Segments

Year ended 2005 2006 2007 2008 2009
$'m $'m $'m $'m $'m
North Asia 291 342 252 225 259

South Asia 150 204 180 163 160
America/Africa/Europe/Middle East/Oceania 62 77 92 69 58
503 623 524 457 477
Turnover by Geographical Segments ($’M)
North Asia South Asia America/Africa/Europe/Middle East/Oceana

2005 291 2005 150 2005 62
2006 342 2006 204 2006 77
2007 252 2007 180 2007 92
2008 225 2008 163 2008 69
2009 259 2009 160 2009 58

RISK FACTORS
INDUSTRY SPECIFIC RISKS COMPANY SPECIFIC RISKS
1. Changes in consumer tastes 5. Foreign exchange risks
As with all other consumer products, sales of our products are While our sales are mainly denominated in the respective local
dependent on consumers’ demand for our products and are susceptible currencies in which the sales arise, namely the S$, RM, HK$, RMB,
to changes in consumer tastes. There is no assurance that our intensive NT$, A$ and US$, our costs of procurement of products from our
efforts in niche marketing, brand management and product innovation contract manufacturers are incurred mainly in US$ and Yen. There is
will continue to enable us to satisfy the evolving consumer tastes. therefore an exchange transaction risk.
2. Susceptibility to downturns in economic cycles 6. Expansion of business and franchisee network
The nature of our healthy lifestyle products make us more susceptible We plan to open OSIM stores in existing and new geographical markets
to reduced demand in times of economic downturn than other kinds and sign on new franchisees. There are risks that these initiatives may
of business because our products may not be considered as essential not be successful.
health products.
3. Health epidemics, terror alerts, terror attacks and other acts of

violence or war may adversely affect sales.
A large part of our outlets are located at high traffic malls and airports.
Any of the above events will lead to a decrease in consumer traffic in
malls and consequently may have a material adverse effect on sales.
4. Inferior quality and unsubstantiated product performance claims by

imitators may lead to adverse media publicity and negative market
segments.
A number of our products have always attracted imitation product

traders. Their inferior quality and unsubstantiated product performance
claims may lead to adverse media publicity and negative market
sentiments and may have a material adverse effect on sales.

CORPORATE GOVERNANCE REPORT
The Directors and management of OSIM are committed to high standards the Company’s interested person transaction policy.
of corporate governance in order to protect the interests of our employees,
customers and shareholders. This report is in compliance with the continuing The Board conducts regular scheduled meetings on a quarterly basis. When
obligations stipulated under Chapter 7 of the Singapore Exchange Security circumstances require, ad-hoc meetings are arranged. Board meetings are
Trading Ltd (“SGX-ST”) Listing Manual. OSIM has complied substantially conducted in Singapore and attendance by Directors are regular. There is
with the requirements of the Code of Corporate Governance (“Code”) and therefore no requirement to conduct meetings by way of a tele-conference
will continue to review its practices on an ongoing basis. It has disclosed or video-conference. The attendance of the directors at meetings of the
any deviation from any guideline of the Code together with an appropriate Board and Board committees, as well as the frequency of such meetings
explanation for such deviation in the annual report. held during the financial year ended 31 December 2009, is disclosed in
the “Directors’ Attendance at Board and Committee Meetings” section of
This Report describes OSIM’s corporate governance processes and activities this Report.
that were in place throughout the financial year. For proper reference, the
relevant provisions of the Code under discussion are identified in bold. The Company worked closely with a professional corporate secretarial firm,
SAMAS Management Consultants Pte Ltd., to provide its Directors with
regular updates on the latest corporate governance and listing policies.
Board of Directors All Directors are also updated regularly concerning any changes in the
Company policies.
Principle 1: Board’s Conduct of its Affairs
The principal functions of the Board are: The Company also has an on-going training budget for the existing Directors
to fund the Directors’ participation at industry conferences and seminars,
1) Approving the broad policies, strategies and financial objectives of the and to fund directors’ attendance at any course of instruction/training
Company and monitoring the performance of management; programme in connection with their duties as directors, if such participation
or attendance is required. This budget may be utilised by each Director
2) Overseeing the processes for evaluating the adequacy of internal subject to approval by the Chairman.
controls, risk management, financial reporting and compliance;
The Company has adopted a policy that Directors are also welcome to request
3) Approving the nominations of board directors and appointment of key further explanations, briefings or informal discussions on any aspects of
personnel; the Company’s operations or business issues from the management. The
Chairman and CEO will make the necessary arrangements for the briefings,
4) Approving annual budgets, major funding proposals, investment and informal discussions or explanations required by the director.
divestment proposals; and
Principle 2: Board Composition and Balance
5) Assuming responsibility for corporate governance. The Board consists of three Independent Non-Executive Directors, one Non-
Executive Director and four Executive Directors. The independence of each
Matters which are specifically reserved to the full Board for decision director is reviewed annually by the Nominating Committee (“NC”),which
are those involving a conflict of interest for a substantial shareholder was constituted on 27 December 2002. The NC adopts the Code’s definition
or a director, material acquisitions and disposal of assets, corporate or of what constitutes an Independent Director in its review. As a result of the
financial restructuring and share issuances, dividends and other returns to NC’s review of the independence of each Director, the NC is of the view
shareholders and matters which require Board approval as specified under that the Non-Executive Directors of OSIM are independent directors (except

CORPORATE GOVERNANCE REPORT (CONT’D)
for Ms Teo Sway Heong), and further, that no individual or small group of activities is also provided to the Board. Analysts’ reports on the Company
individuals dominate the Board’s decision making process. Key information are forwarded to the directors on an on-going basis as and when received.
regarding the directors is given in the “Directors and Management Profile” The directors have also been provided with the phone numbers and email
section of this annual report. The NC is of the view that the current Board particulars of the Company’s senior management and company secretary to
comprises persons who, as a group, provide core competencies necessary facilitate independent access.
to meet the Company’s targets.
Should directors, whether as a group or individually, need independent
The NC is of the view that the current size of its board of directors is professional advice, the company secretary will, upon direction by the Board,
appropriate, taking into account the nature and scope of the Company’s appoint a professional advisor selected by the group or the individual, and
operations. approved by the Chairman and CEO, to render the advice. The cost of such
professional advice will be borne by the Company.
Principle 3: Role of Chairman and Chief Executive Officer (“CEO”)
The Company has the same Chairman and CEO, Mr Ron Sim Chye Hock The company secretary attends all board meetings and is responsible to
and he is an Executive Director. ensure that board procedures are followed. It is the company secretary’s
responsibility to ensure that the Company complies with the requirements
OSIM believes that the Independent Directors have demonstrated high of the Companies Act. Together with the other management staff of SGX,
commitment in their role as directors and have ensured that there is a good the company secretary is responsible for compliance with all other rules and
balance of power and authority. As such, there is no need for the role of the regulations which are applicable to the Company.
Chairman and CEO to be separated.
Please refer to the “Corporate Information” section of the annual report for the
The Chairman and CEO is the most senior executive in the Company and composition of the Company’s Board of Directors, and Board committees.
bears executive responsibility for the Company’s business, as well as the
responsibility for the workings of the Board. The Chairman and CEO ensure
that board meetings are held when necessary and sets the board meeting BOARD COMMITTEES
agenda in consultation with the directors. The Chairman and CEO review most
board papers before they are presented to the Board and ensures that board Nominating Committee (“NC”)
members are provided with complete, adequate and timely information. As Principle 4: Board Membership
a general rule, board papers are sent to directors in advance in order for The Chairman of the NC, Mr Sin Boon Ann, is an Independent Non-Executive
directors to be adequately prepared for the meeting. Management staffs Director. There are five members in the NC, three of whom are independent
who have prepared the papers, or who can provide additional insight into non-executive directors.
the matters to be discussed, are invited to present the paper or attend at the
relevant time during the board meeting. The Chairman assists to ensure that The NC’s principal functions are:
procedures are introduced to comply with the Code.
1) To identify candidates and review all nominations for the appointment
Principle 6: Access to Information or re-appointment of members of the Board of Directors; the CEO of the
Company; and the members of the various Board Committees, for the
In order to ensure that the Board is able to fulfill its responsibilities,
purpose of proposing such nominations to the Board for its approval;
management provides the board members with regular updates of the
financial position of the Company. A quarterly report of the Company’s
2) To determine the criteria for identifying candidates and reviewing

nominations for the appointments referred to in paragraph 1. One of the Audit Committee (“AC”)
criteria for the appointment of a director is the independent status of the Principle 11: Audit Committee
candidate; Principle 12: Internal Controls
The AC comprises three members, all of whom are independent non-
3) To decide how the Board’s performance may be evaluated and propose executive directors. The chairman of the AC, Mr Tan Soo Nan,and the other
objective performance criteria for the Board’s approval; and members of the AC bring together a wealth of many years of experience in
business management, finance and legal services. The NC is of the view
4) To assess the effectiveness of the Board as a whole, and the contribution that the members of the AC have sufficient financial management expertise
by each individual director to the effectiveness of the Board. and experience to discharge the AC’s functions.
5) To evaluate whether or not a director is able to and has been adequately The AC performs the following functions:
carrying out his/her duties as director of the company, when he/she has
multiple board representations. 1) Reviews the audit plans of the internal and external auditors of the
Company and ensures the adequacy of the Company’s system of
6) To assess independent directors and confirm their independence. accounting controls and the co-operation given by the Company’s
management to the external and internal auditors;
New directors are at present appointed by way of a board resolution, after
the NC approves their appointment. Such new directors must submit 2) Reviews the quarterly and annual financial statements and the auditors’
themselves for re-election at the next AGM of the Company. Article 92 of the report on the annual financial statements of the Group and the Company
Articles requires one third of the Board to retire by rotation at every AGM. before their submission to the board of directors;
With a view to renewing the composition of the Board and upholding good
corporate governance practice, retiring directors Mr Michael Kan Yuet Yun 3) Reviews effectiveness of the Group and the Company’s material internal
and Mr Ong Kian Min have opted not to be re-elected for a further term, The controls, including financial, operational and compliance controls and
NC has interviewed and recommended the appointment of Mr Tan Soo Nan risk management via reviews carried out by the internal auditors;
and Mr Sin Boon Ann at the forthcoming AGM.
4) Meets with the external auditors, other committees, and management
Principle 5: Board Performance in separate executive sessions to discuss any matters that these groups
The NC, in considering the re-appointment of any director, evaluates the believe should be discussed privately with the AC;
performance of the director. The Chairman & CEO will assess each director’s
contribution to the Board, and discuss the results with the chairman of the 5) Reviews legal and regulatory matters that may have a material impact on
NC. The assessment parameters includes attendance record at meetings of the financial statements, related compliance policies and programmes
the Board and Board committees, intensity of participation at meetings, the and any reports received from regulators;
quality of interventions and special contributions.
6) Reviews the cost effectiveness and the independence and objectivity of
The NC will evaluate the Board’s performance as a whole. The assessment the external auditors;
process adopted both quantitative and qualitative criteria, such as return
on equity, the success of the strategic and long-term objectives set by the 7) Reviews the nature and extent of non-audit services provided by the
external auditors;
Board, and the effectiveness of the Board in monitoring management’s
performance against the goals that have been set by the Board. The NC will
8) Recommends to the board of directors the external auditors to be
be working with an external professional firm on the evaluation criteria.
nominated, approves the compensation of the external auditors, and

reviews the scope and results of the audit; The Company has also begun procedures for the adaptation of a code
of Ethics and Conduct to be observed by Employees in daily business
9) Reports actions and minutes of the AC to the board of directors with practice.
such recommendations as the AC considers appropriate; and
Principle 13: Internal Audits
10) Reviews interested person transactions in accordance with the The Internal Audit (“IA”) function is currently performed by an Audit &
requirements of the Singapore Exchange Securities Trading Limited Risk Management (“A&RM”) team. The A&RM team reports directly to the
(SGX-ST)’s Listing Manual. chairman of the AC on audit matters, and to the Chief Financial Officer
on administrative matters. The AC reviews A&RM team’s reports on a
The AC has the express power to conduct or authorise investigations into quarterly basis. The AC also reviews and approves the annual audit plans
any matters within its terms of reference. Minutes of the AC meetings are and resources to ensure that the A&RM team has the necessary resources
regularly submitted to the Board for its information and review. to adequately perform its functions. The A&RM team has adopted the
Standards for Professional Practice of Internal Auditing set by The Institute
The AC, having reviewed all non-audit services provided by the external of Internal Auditors.
auditors to the Group, is satisfied that the nature and extent of such services
would not affect the independence of the external auditors. The AC has also To ensure the adequacy of the internal audit function, the AC reviews the
conducted a review of interested person transactions. A&RM team’s activities on a half yearly basis. In 2002, the team, together
with PricewaterhouseCoopers and the supervision of the AC, has completed
The AC also conducts a review to ensure that there are no improper activities the development of the Minimum Acceptable Controls and Control Self-
of the Company (if any). Assessment programmes for the Company. The assessment exercises are
done on an ongoing basis.
The AC convened four meetings during the year with full attendance from all
members. The AC has also met with internal and external auditors, without In 2006, the A&RM team, together with KPMG, has developed the Enterprise
the presence of the Company’s management, at least once a year. Risk Management framework in the Company for better assessment and
management of the Company risks.
The Company’s external auditors, Ernst & Young LLP (“EY”), carry out, in the
course of their statutory audit annually to the extent of their scope as laid out The Company has implemented Control Self-Assessment in the majority of its
in their audit plan. Material non-compliance and internal control weaknesses subsidiaries and is in the process of setting up Enterprise Risk Management
noted during their audit, and the auditors’ recommendations, are reported programmes for the Group.
to the AC. The Internal Audit follows up on EY’s recommendations as part of
its role in the review of the Company’s internal control systems.
REMUNERATION COMMITTEE (“RC”)
Principle 7: Procedures for Developing Remuneration Policies
The AC has reviewed the Company’s risk assessment, and based on the
Principle 8: Level and Mix of Remuneration
IA audit reports and management controls in place, it is satisfied that there
are adequate internal controls in the Company. The AC expects the risk Principle 9: Disclosure on Remuneration
assessment process to be a continuing process. The RC was formed on 27 December 2002 by combining the previous
Compensation Committee and OSIM Share Option Scheme Committee.
On the recommendation of the AC, the Company has implemented a
whistle blowing policy which provides for the mechanisms which staff of the The RC consists of five directors, of whom three are independent non-
Company may in confidence, raise concerns about possible improprieties in executive directors. The RC is chaired by Mr Sin Boon Ann, an Independent
matters of financial reporting or other matters. Non-Executive director.

The RC’s principal responsibilities are to: base salary. The variable component is in the form of a variable bonus that
is linked to the Company and individual performance. Another element of
1) Approve the structure of the compensation programme for directors the variable component is the grant of share options to staff under the OSIM
and senior management to ensure that the programme is competitive ESOS. This seeks to align the interests of staff with that of the shareholders.
and sufficient to attract, retain and motivate senior management of the Staff appraisals are conducted twice in a year.
required quality to run the Company successfully;
One of the Top Key Executives (excluding Directors) of the Company received
2) Review directors’ and senior management’s compensation annually and remuneration within $250,000 to $500,000.
determine appropriate adjustments; and
No employee of the Company was an immediate family member of a
3) Administer the OSIM Employee Share Option Scheme (the “OSIM Director or the CEO and whose remuneration exceeded $150,000 during
ESOS”). Any matter pertaining or pursuant to the OSIM ESOS and any the financial year.
dispute and uncertainty as to the interpretation of the OSIM ESOS, any
rule, regulation or procedure thereunder or any rights under the OSIM COMMUNICATION WITH SHAREHOLDERS
ESOS shall be determined by the RC. Principle 10: Accountability and Audit
Principle 14: Communication with Shareholders
Directors are encouraged to purchase and hold shares in the Company. The Principle 15: Greater Shareholder Participation
Board has recognised that a personal stake in the Company is an added The Company has adopted quarterly results reporting since the third quarter
incentive to perform. of 2001. OSIM holds a media and analysts briefing of its quarterly, half-year
and full-year results. The results are published through the SGXNET, news
The CEO and executive directors’ remuneration packages include a variable releases and the Company’s website and investor relations sites AsiaOne.
bonus element which is performance-related. com, Zaobao.com and Shareinvestor. All information on the Company’s new
initiatives are first disseminated via SGXNET followed by a news release,
Directors’ fees are set in accordance with a remuneration framework which is also available on the website.
comprising basic fees. Executive directors do not receive directors’ fees.
Non-executive directors are paid directors’ fees, subject to shareholders’ Price sensitive information is first publicly released, either before the
approval at the AGM. Company meets with any group of investors or analysts or simultaneously
with such meetings. Results and annual reports are announced or issued
For competitive reasons, the Company is not disclosing each individual within the mandatory period and are available on the Company’s website.
director’s remuneration. Instead, we are disclosing the band of remuneration
in note 34 to the financial statements. The Company does not practise selective disclosure. The Company
communicates with its investors on a regular basis and attends to their
Number of directors of the Company in remuneration bands: queries. The Company also retained an Investor Relations and Public
2009 2008 Relations firm. All shareholders of the Company receive the annual report
$500,000 and above 1 1 and notice of AGM. The notice is also advertised in newspapers and made
$250,000 to $499,000 3 3 available on the SGXNET. At AGMs, shareholders are given the opportunity
Below $250,000 4 4 to air their views and ask directors or management questions regarding the
8 8 Company.
The Company adopts a remuneration policy for staff comprising a fixed The Articles allow a member of the Company to appoint one or two proxies
component and a variable component. The fixed component is in form of a to attend and vote instead of the member.

Dealings in Securities Interested Person Transactions

The Company has adopted internal codes pursuant to the SGX-ST Best The Company has adopted an internal policy in respect of any transactions
Practices Guide applicable to all its officers in relation to dealings in the with interested persons and has set out the procedures for review and
Company’s securities. Its officers are not allowed to deal in the Company’s approval of the Company’s interested person transactions.
shares during the period commencing one month before the announcement
of the Company’s quarterly results and ending on the date of the
announcement of the results. In addition all employees and directors of the
companies are required to observe the insider trading laws at all times.
The aggregate value of interested person transactions entered into during the financial year under review is as follows:
Aggregate value of all IPT Aggregate value of all IPT

during the financial year under conducted under shareholder’s
review (excluding transactions mandate pursuant to Rule
< $100,000 & transactions 920 (excluding transactions <
conducted under shareholders’ $100,000)
mandate pursuant to Rule 920)
12 months ended 31 Dec 12 months ended 31 Dec
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Sales:
OSIM (Guangzhou) Co., Ltd – – 2,746 3,080
OSIM (Langfang) Co., Ltd – – 2,192 2,131
FK Marketing – – 710 1,029
– – 5,648 6,240

Material Contracts
No material contracts to which the Company or its subsidiaries, is a party and which involve interests of the Chief Executive Officers, each director or
controlling shareholders subsisted at the end of the financial year or have been entered into since the end of the previous financial year.
Directors’ Attendance at Board and Committee Meetings

Meeting of Board Audit Committee Nominating Committee Remuneration Committee
Total held in FY2009 6 4 1 1
Ron Sim Chye Hock 6 N.A. 1 1
Charlie Teo Chay Lee 6 N.A. 1 1
Richard Leow Lian Soon 6 N.A. N.A. N.A.
Peter Lee Hwai Kiat 6 N.A. N.A. N.A.
Teo Sway Heong 6 N.A. N.A. N.A.
Michael Kan Yuet Yun 6 4 1 1
Ong Kian Min 6 4 1 1
Khor Peng Soon 6 4 1 1
N.A. = Not applicable
Peter Lee Hwai Kiat

Company Secretary

CORPORATE INFORMATION
BOARD OF DIRECTORS AUDIT COMMITTEE REGISTERED OFFICE REGISTRAR AND SHARE

TRANSFER OFFICE
Executive Chairman Chairman 65 Ubi Avenue 1
Mr Ron Sim Chye Hock Mr Tan Soo Nan OSIM Headquarters B.A.C.S. Private Limited
Singapore 408939 63 Cantonment Road
Executive Directors Mr Khor Peng Soon Singapore 089758
Mr Charlie Teo Chay Lee Mr Sin Boon Ann
Mr Richard Leow Lian Soon AUDITORS
Mr Peter Lee Hwai Kiat PRINCIPAL BANKERS
REMUNERATION COMMITTEE Ernst & Young LLP
Non-Executive Director Public Accountants and Certified The Hongkong and Shanghai
Ms Teo Sway Heong Chairman Public Accountants Banking Corporation
Mr Sin Boon Ann The Royal Bank of Scotland PLC
Independent Non-Executive 1 Raffles Quay
Directors Mr Tan Soo Nan North Tower, Level 18 United Overseas Bank Limited
Mr Khor Peng Soon Mr Khor Peng Soon Singapore 048583 RHB Bank Berhad
Mr Sin Boon Ann Mr Ron Sim Chye Hock Partner-in-charge
Mr Tan Soo Nan Mr Charlie Teo Chay Lee (Since financial year ended 31 Sumitomo Mitsui Banking
December 2008) Corporation
Mr Philip Ling Soon Hwa
CHIEF OFFICERS NOMINATING COMMITTEE
Chairman Chairman COMPANY SECRETARY

Mr Ron Sim Chye Hock Mr Sin Boon Ann
Mr Peter Lee Hwai Kiat
Mr Charlie Teo Chay Lee Mr Tan Soo Nan
Mr Richard Leow Lian Soon Mr Khor Peng Soon
Mr Peter Lee Hwai Kiat Mr Ron Sim Chye Hock
Mr Tan Kia Tong Mr Charlie Teo Chay Lee
Ms Celine Cha

GROUP STRUCTURE as at 17 February 2010
as at 17 February 2010
OSIM
International
87.57% OSIM (M) 100% Trading
Sdn Bhd
(Shanghai)
Co Ltd
OSIM
100% OSIM (China) 100% (Taiwan)
Co Ltd
Co Ltd
OSIM
International
Ltd
OSIM
82.84% Global Active 100% (HK) Company
Limited
Limited
Daito-OSIM
OSIM Brookstone
55.56% 30% Healthcare
Holdings, Inc
(Suzhou) Co Ltd KEY ASSOCIATED COMPANY
KEY SUBSIDIARIES
JOINT VENTURE

OSIM GLOBAL NETWORK
SINGAPORE OSIM（CHINA）CO., LTD AUSTRALIA INDIA

OSIM International Ltd ShenZhen Office OSIM INTERNATIONAL OSIM INDIA
65 Ubi Avenue 1 A Block,6F,TianJi Building,TianAn (AUSTRALIA) PTY LTD - A Division of PARAMOUNT
OSIM Headquarters Digital Town, 201B / 3-9 Spring Street SURGIMED LTD
Singapore 408939 Futian District，Shenzhen 518040, Chatswood New South Wales Okhla Industrial Area.
Tel: 65-6-747-6866 China NSW 2067, Australia Okhla Main Road
Fax: 65-6-747-6769 Tel: 86-755-8237 8127 Tel: 61-2-9411-8498 Okhla Phase II,
Fax: 86-755-8237 8137 Fax: 61-2-9415-3166 New Delhi 110020
Global Active Limited India
65 Ubi Avenue 1 Tel: 91-11-41070000
OSIM Headquarters HONG KONG & MACAU BAHRAIN Fax: 91-11-41616555
Singapore 408939 OSIM (HK) Co. Ltd. ELHAM AL HAYAT WLL
Tel: 65-6-749-7206 Room 1812 - 22, 18/F Store #1200 INDONESIA
Fax: 65-6-745-2623 No. 1 Hung To Road Building #2102, Road #2825 PT. OPTIMAL SEMANGAT INTI
Kwun Tong, Kowloon, Hongkong Block #428, Seef Mall MAKMUR
Tel: 852-2790-2300 Postal address: Jl. Daan Mogot KM 12.8 No 156
CHINA Fax: 852-2342-8510 PO Box 214 Jakarta Barat 11730 Indonesia
OSIM（CHINA）CO., LTD Manama Bahrain Tel: 62-21-5437-5999
BeiJing Office Tel/Fax: 973-17-581331 Fax: 62-21-5437-3925
4F, Unit 3, Bldg.1, D Area, MALAYSIA & BRUNEI
Zhaowei Industry Park, No.14 OSIM (M) Sdn. Bhd.
Jiuxianqiao Road No 4, Jalan 13/6, Section 13 CAMBODIA IRAN
Chaoyang District, Beijing, 46200 Petaling Jaya, OSIM CAMBODIA ASAY AVARAN-E-ARIYA
100015,China Selangor, Malaysia R. M C IMPEX CO., LTD. No. 2359
Tel: 86-10-8456-5789 Tel: 603-7965-9898 No-37E(3rd Floor), Attwood Across from DAY hospital
Fax: 86-10-8456-5810 Fax: 603-7965-9999 Business Center (3th Floor) VALI-E-ASR Ave
Sangkat Teuk Thlar, Tehran, Iran
OSIM（CHINA）CO., LTD TAIWAN Khan Russey Koe, Phnom Penh, Tel: 98-21-88786065/6
ShangHai Office OSIM (Taiwan) Co., Ltd. Kingdom of Cambodia Fax: 98-21-88786065
5F, NO 326 Yan Qiao Road 11F, No.176, Jian Yi Road Tel: 855 2399 5300
Pudong New Area Shanghai Far East Century Park Fax: 855 2399 5200
200125 China (Building G) ITALY
Tel: 86-21-5196-2828 Chung Ho City 235, Taipei Hsien, OSIM ITALIA SRL
Fax: 86-21-5196-2880 Taiwan, R.O.C. Via Nomentana 1018
Tel: 886-2-8227-1589 00137 Roma
OSIM（CHINA）CO., LTD Fax: 886-2-8227-1556 Tel: 39 338 4677600
GuangZhou Office Fax: 39 06 41220974
10F,West Tower, Tianhe entertain-
ment Plaza, 623 Tianhe Road ,
Tianhe District, Guangzhou
510620, China
Tel: 86-20-8753-2421
Fax: 86-20-8753-0404

OSIM GLOBAL NETWORK (CONT’D)
OSIM GLOBAL NETWORK (CONT’D)
KUWAIT PAKISTAN SAUDI ARABIA UNITED KINGDOM

ALI ALGHANIM & SONS (C) BEE ENTERPRISES LTD AL-SAWANI GROUP FK MARKETING LTD
Shuwaikh Industrial Area, 59-K, COMMERCIAL AREA, P.O. Box 9411, Jeddah 21413 The Weston Centre
Block #1 Building #100 PHASE-I, DHA, LAHORE Kingdom of Saudi Arabia ton Road
PO Box 21540, Safat 13076 PAKISTAN Tel : 9662-6912612 Crewe Cheshire
Kuwait TEL: 92 42 3589 7441 Fax : 9662-6911320 CW1 6FL
Tel: 965-2230000 #1805 FAX: 92 42 3572 6054 Tel: 44-1270-253377
Fax: 965-4834655 Fax: 44-1270-253399
SOUTH KOREA
PHILIPPINES OSIM KOREA INC
MYANMAR ASIAN THERAPEUTICS INC Myung Shin Bldg., VIETNAM
OSIM MYANMAR 845 S. Laurel St. Addition Hills 366-16 Shindang-dong, DTL INTERNATIONAL TRADING
FMI Centre #501 Mandaluyong City Jung-gu, Seoul Korea 100-830 & SERVICE CORPORATION
380, Bogyoke Aung San Rd 1550 Philippines Korea 24/7 Street of D3, Ward 25, Binh
Pabedan Township Tel: 63-2-7236746 Tel: 82-2-724-4900 Thanh District,
Yangon, Myanmar. Fax: 63-2-7215940 Fax: 82-2-724-4901 Ho Chi Minh City,
Tel/Fax: 951-240289 Vietnam
Tel: 84 8 3512 5164
QATAR THAILAND Fax: 84 8 3512 5467
NEW ZEALAND ALI BIN ALI MEDICAL OSIM (THAI) CO., LTD.
LC DISTRIBUTION LIMITED Doha, State of Qatar No 17 Soi Pattanakarn 13,
Shop 2, Heards Building Al Jelaiat St. #37 Pattanakarn Road, Kwang USA
168 Parnell Road, Behind Hamad Medical Suanluang, BROOKSTONE INC
Parnell, Auckland Corporation Khet Suanluang Bangkok 10250 One Innovation Way
New Zealand P. O. Box 75 Tel: 662-7174648 Merrimack, NH 03054, USA
Tel/Fax: 64-93-666633 Tel: 974- 486-3457 / Fax: 662-7174650 Tel: 1800-846-3000
974-486-7871 #258 Fax : 1-603-577 8003
Fax: 974- 4882-585
OMAN UNITED ARAB EMIRATES
OMAN INTERNATIONAL RSH (MIDDLE EAST) LLC
ELECTRONICS AND TRADING CO ROMANIA Juma Al Majid Commercial
LLC DIVERTA RETAIL 3000 SA Building (Top Floor)
PO Box 889, Muscat Postal CODE Anchor Plaza Office Building ET. 6 Opp. Bur Juman Centre,
113 B-Dul Timisoara NR. 26Z, P.O. Box 20764,
Sultanate of Oman Sector 6, Bucuresti 6 Dubai - U.A.E.
Tel: 968-2456-5490 061331 Romania Tel : 971-4-3966676
Fax: 968-2456-5491 Tel: 021-317-88-82/83 Fax : 971-4-3966679
Fax: 021-317-88-84
OSIMINTERNATIONAL
OSIM INTERNATIONALLTD
LTD 15
43
16 ANNUAL REPORT
ANNUAL REPORT 2009
2009
FINANCIAL REPORTS
Directors’ Report 45
Statement by Directors 52
Independent Auditors’ Report 53
Balance Sheets 55
Consolidated Statement of
Comprehensive Income 58
Statement of Changes in Equity 59
Consolidated Cash Flow Statement 62
Notes to the Financial Statements 64

DIRECTORS’ REPORT
for the year ended 31 December 2009
(Amounts in Singapore Dollars)
The directors present their report to the members together with the audited consolidated financial statements of OSIM International Ltd (the “Company”)
and its subsidiaries (collectively, the “Group”) and the balance sheet and statement of changes in equity of the Company for the financial year ended 31
December 2009.
Directors
The directors of the Company in office at the date of this report are:
Ron Sim Chye Hock

Teo Sway Heong
Charlie Teo Chay Lee
Richard Leow Lian Soon
Peter Lee Hwai Kiat
Khor Peng Soon
Tan Soo Nan (appointed on 1 February 2010)
Sin Boon Ann (appointed on 1 February 2010)
Arrangements to enable directors to acquire shares and debentures

Except as described below, neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose objects are,
or one of whose object is, to enable directors of the Company to acquire benefits by means of the acquisition of shares or debentures of the Company or
any other corporate body.
Directors’ interests in shares, warrants and debentures

The following directors, who held office at the end of the financial year, had, according to the register of directors’ shareholdings required to be kept under
section 164 of the Singapore Companies Act, Cap. 50, an interest in shares, warrants and share options of the Company and related corporations (other
than wholly-owned subsidiaries), as stated below:
Other shareholdings in which the
Held by director as at director is deemed to have an interest
1 January 31 December 1 January 31 December
2009 2009 2009 2009
OSIM International Ltd
Ordinary shares
Ron Sim Chye Hock 128,690,938 238,757,978 160,218,058 161,320,157

Teo Sway Heong 4,059,448 5,161,547 283,970,548 394,916,588
Charlie Teo Chay Lee 1,462,000 1,954,000 – 300,000
Richard Leow Lian Soon 2,250,000 2,550,000 67,500 67,500
Peter Lee Hwai Kiat 580,000 1,720,000 – 950,000
Michael Kan Yuet Yun* 382,498 900,000 – –
Ong Kian Min* 382,497 4,134,162 – –
Khor Peng Soon 36,000 52,000 – –

DIRECTORS’ REPORT (CONT’D)
Directors’ interests in shares, warrants and debentures (cont’d)

Other shareholdings in which the
Held by director as at director is deemed to have an interest
1 January 31 December 1 January 31 December
2009 2009 2009 2009
Warrants to subscribe for ordinary shares
Ron Sim Chye Hock 72,236,710 72,691,666 1,014,862 1,030,473
Teo Sway Heong 1,014,862 1,030,473 72,236,710 72,691,666
Charlie Teo Chay Lee 365,500 371,122 – –
Richard Leow Lian Soon 300,000 304,614 – –
Peter Lee Hwai Kiat 70,000 71,076 – –
Michael Kan Yuet Yun* 95,624 97,094 – –
Ong Kian Min* 195,624 198,633 – –
Khor Peng Soon 29,000 29,446 – –
At 1 January At 31 December Exercise price Expiry

2009 2009 $ date
Options to subscribe for ordinary shares
Charlie Teo Chay Lee 247,500 247,500 0.178 14.01.2011
247,500 247,500 0.236 14.01.2012
198,000 198,000 0.442 26.12.2012
95,040 95,040 0.917 15.02.2014
Richard Leow Lian Soon 40 40 0.917 15.02.2014
Peter Lee Hwai Kiat 135,000 – 0.178 14.01.2011

135,000 – 0.236 14.01.2012
144,000 144,000 0.442 26.12.2012
69,120 69,120 0.917 15.02.2014
Michael Kan Yuet Yun* 21,600 – 0.917 15.02.2009
Ong Kian Min* 21,600 – 0.917 15.02.2009
Khor Peng Soon 21,600 – 0.917 15.02.2009
* Resigned on 1 February 2010
By virtue of section 7 of the Singapore Companies Act, Cap. 50, both Ron Sim Chye Hock and Teo Sway Heong are deemed to have interests in the shares
held by the Company in its subsidiaries.
There was no change in any of the abovementioned interests between the end of the financial year and 21 January 2010.

Directors’ interests in shares, warrants and debentures (cont’d)

Except as disclosed in this report, no director who held office at the end of the financial year had an interest in shares, share options, warrants or debentures
of the Company, or of related corporations, either at the beginning of the financial year, or at the end of the financial year.
Directors’ contractual benefits

Except as disclosed in the financial statements, since the end of the previous financial year, no director of the Company has received or become entitled to
receive a benefit by reason of a contract made by the Company or a related corporation with the director, or with a firm of which the director is a member,
or with a company in which the director has a substantial financial interest.
Share options
The OSIM Share Option Scheme (the “Option Scheme”) is administered by the Remuneration Committee comprising the following members:
Ong Kian Min (Chairman)

Ron Sim Chye Hock
Charlie Teo Chay Lee
Michael Kan Yuet Yun
Khor Peng Soon
Subsequent to the year-end, Sin Boon Ann and Tan Soo Nan have replaced Ong Kian Min and Michael Kan Yuet Yun as the Chairman and member of
the Remuneration Committee respectively.
Only confirmed full-time employees as well as directors of the Group (other than Ron Sim Chye Hock and Teo Sway Heong) who are not controlling
shareholders and their associates are eligible to receive options granted under the Option Scheme.
The aggregate number of ordinary shares subject to outstanding options granted under the Option Scheme will not at any time exceed 15% of the issued
share capital of the Company. The exercise price of the options shall be determined by the Remuneration Committee and fixed at:
(i) a price (the “Market Price”) equal to the average of the last dealt prices of the Company’s share, as determined by reference to the Financial News
or other publication published by the Singapore Exchange Securities Trading Limited (SGX-ST) for the 3 consecutive trading days immediately
preceding the date of grant, rounded up to the nearest whole cent in the event of fractional prices; or
(ii) a price which is set at a discount to the Market Price, provided that:
(a) the maximum discount shall not exceed 20% of the Market Price (or such other percentage or amount as may be determined by the
Remuneration Committee and permitted by the SGX-ST); and
b) the shareholders of the Company in general meeting shall have authorised the making of offers and grants of options under the Option
Scheme at a discount not exceeding the maximum discount as aforesaid.
Where the exercise price as determined above is less than $0.05, the exercise price shall be $0.05.
The exercise period of options with exercise price at Market Price commences on the first anniversary of the date of grant while the exercise period of
options with exercise price at a discount to the Market Price commences on the second anniversary of the date of grant. Options granted to executive
directors and employees expire on the tenth anniversary of the date of grant while options granted to non-executive directors and employees of associated
companies expire on the fifth anniversary of the date of grant.

Share options (cont’d)

The movement in share options during the financial year is as follows:
Group and Company

2009 2008

At beginning of year 4,582,165 4,582,165
Lapsed during the year (141,320) –
Exercised during the year (270,000) –
At end of year 4,170,845 4,582,165
During the financial year ended 31 December 2009, 270,000 ordinary shares were issued pursuant to the Option Scheme.
Details of all the options to subscribe for ordinary shares of the Company pursuant to the Option Scheme as at 31 December are as follows:
Exercise price Number of options

Expiry date 2009 2008 2009 2008
$ $
15.02.2009 0.917 0.917 – 64,800

14.01.2011 0.178 0.178 450,000 585,000
14.01.2012 0.236 0.236 585,565 720,565
15.08.2012 0.506 0.506 143,000 143,000
26.12.2012 0.442 0.442 708,480 708,480
18.06.2013 0.488 0.488 116,000 116,000
15.02.2014 0.917 0.917 2,167,800 2,244,320
4,170,845 4,582,165
Since the commencement of the Option Scheme till the end of the financial year:
• No options have been granted to the controlling shareholders of the Company and their associates;
• No participant has received 5% or more of the total options available under the Option Scheme;
• No options that entitle the holder to participate, by virtue of the options, in any share issue of any other corporation have been granted; and
• No options have been granted at a discount.
Details of the options to subscribe for ordinary shares of the Company granted to directors and employees of the Group and associated companies pursuant
to the Option Scheme are as follows:

Share options (cont’d)

Aggregate options Aggregate Aggregate
granted (including options options
bonus issue) since exercised since lapsed since Aggregate
commencement commencement commencement options
of the Option of the Option of the Option outstanding
Scheme to end Scheme to end Scheme to end as at end of Exercise
Name of directors Exercise period of financial year of financial year of financial year financial year price ($)
Charlie Teo Chay Lee 15.01.2002 - 14.01.2011 247,500 – – 247,500 0.178

15.01.2003 - 14.01.2012 247,500 – – 247,500 0.236
27.12.2003 - 26.12.2012 198,000 – – 198,000 0.442
16.02.2005 - 15.02.2014 95,040 – – 95,040 0.917
Richard Leow Lian 15.01.2002 - 14.01.2011 247,500 (247,500) – – –
Soon 15.01.2003 - 14.01.2012 247,500 (247,500) – – –
27.12.2003 - 26.12.2012 198,000 (198,000) – – –
16.02.2005 - 15.02.2014 95,040 (95,000) – 40 0.917
Peter Lee Hwai Kiat 15.01.2002 - 14.01.2011 135,000 (135,000) – – –
15.01.2003 - 14.01.2012 135,000 (135,000) – – –
27.12.2003 - 26.12.2012 144,000 – – 144,000 0.442
16.02.2005 - 15.02.2014 69,120 – – 69,120 0.917
Michael Kan Yuet Yun 15.01.2003 - 14.01.2006 39,063 (39,063) – – –
15.01.2003 - 14.01.2007 39,063 (39,063) – – –
27.12.2003 - 26.12.2007 31,250 (31,250) – – –
16.02.2005 - 15.02.2009 21,600 – (21,600) – –
Ong Kian Min 15.01.2003 - 14.01.2006 46,876 (46,876) – – –
15.01.2003 - 14.01.2007 46,876 (46,876) – – –
27.12.2003 - 26.12.2007 45,000 (45,000) – – –
16.02.2005 - 15.02.2009 21,600 – (21,600) – –
Khor Peng Soon 16.02.2005 - 15.02.2009 21,600 – (21,600) – –
Staff 15.01.2002 - 14.01.2006 30,000 (30,000) – – –
15.01.2002 - 14.01.2011 1,649,057 (1,294,682) (151,875) 202,500 0.178
30.08.2002 - 29.08.2011 412,186 (348,436) (63,750) – –
15.01.2003 - 14.01.2007 46,875 (46,875) – – –
15.01.2003 - 14.01.2012 2,424,620 (1,852,180) (234,375) 338,065 0.236
16.08.2003 - 15.08.2012 1,048,200 (695,600) (209,600) 143,000 0.506
27.12.2003 - 26.12.2007 54,000 (54,000) – – –
27.12.2003 - 26.12.2012 2,720,830 (1,935,450) (418,900) 366,480 0.442
19.06.2004 - 18.06.2013 1,215,000 (840,000) (259,000) 116,000 0.488
16.02.2005 - 15.02.2009 28,800 (28,800) – – –
16.02.2005 - 15.02.2014 4,140,200 (1,154,860) (981,740) 2,003,600 0.917
16,141,896 (9,587,011) (2,384,040) 4,170,845

Warrants
On 28 March 2008, the Company announced a proposed renounceable non-underwritten rights issue of warrants to shareholders of the Company to
subscribe for new ordinary shares at $0.35 each in the capital of the Company. 135,459,476 warrants were allotted and issued by the Company pursuant
to the Warrants Issue. These warrants were listed and quoted on the SGX-ST on 26 June 2008.
On 20 March 2009, the Company announced 2,083,351 additional warrants to be issued and allotted to the warrant holders as a consequence of the
issuance of Rights Shares. These warrants were listed and quoted on SGX-ST on 23 March 2009.
For the year ended 31 December 2009, no warrants were exercised and converted into ordinary shares. These warrants will expire on 23 June 2011.
Rights Shares
On 14 March 2009, the Company announced to undertake a renounceable non-underwritten issuance of up to 120,408,442 rights shares at an issue
price of $0.055 per rights issue. The basis of allotment for the issue is every two rights shares for every nine existing ordinary shares in the capital of the
Company. Subsequently, the rights issuance were fully subscribed during the financial year.
Audit committee
The Audit Committee (the “AC”) comprises three independent non-executive directors. The members of the AC are:
Michael Kan Yuet Yun (Chairman)

Ong Kian Min (Non-executive Director)
Khor Peng Soon (Non-executive Director)
Subsequent to the year-end, Tan Soo Nan and Sin Boon Ann have replaced Michael Kan Yuet Yun and Ong Kian Min as the Chairman and member of the
Audit Committee respectively.
The AC performs the functions in accordance with section 201B(5) of the Singapore Companies Act, Cap. 50, including the following:
• Reviews the audit plans of the internal and external auditors of the Company and ensures the adequacy of the Company’s system of accounting controls
and the co-operation given by the Company’s management to the external and internal auditors;
• Reviews the quarterly and annual financial statements and the auditors’ report on the annual financial statements of the Group and the Company before
their submission to the board of directors;
• Reviews effectiveness of the Group’s and the Company’s material internal controls, including financial, operational and compliance controls and risk
management via reviews carried out by the internal auditors;
• Meets with the external auditors, other committees, and management in separate executive sessions to discuss any matters that these groups believe
should be discussed privately with the AC;
• Reviews legal and regulatory matters that may have a material impact on the financial statements, related compliance policies and programmes and any
reports received from regulators;

Audit committee (cont’d)

• Reviews the cost effectiveness and the independence and objectivity of the external auditors;
• Reviews the nature and extent of non-audit services provided by the external auditors;
• Recommends to the board of directors the external auditors to be nominated, approves the compensation of the external auditors, and reviews the scope
and results of the audit;
• Reports actions and minutes of the AC to the board of directors with such recommendations as the AC considers appropriate; and
• Reviews interested person transactions in accordance with the requirements of the SGX-ST’s Listing Manual.
The AC, having reviewed all non-audit services provided by the external auditors to the Group, is satisfied that the nature and extent of such services would
not affect the independence of the external auditors. The AC has also conducted a review of interested person transactions.
The AC convened four meetings during the year with full attendance from all members. The AC has also met with internal and external auditors, without
the presence of the Company’s management, at least once a year.
Further details regarding the audit committee are disclosed in the Report on Corporate Governance.
Auditors
Ernst & Young LLP have expressed their willingness to accept re-appointment as auditors.
On behalf of the board of directors,
Ron Sim Chye Hock

Director
Peter Lee Hwai Kiat

Director
Singapore
19 February 2010

STATEMENT BY DIRECTORS
Pursuant to Section 201(15)
We, Ron Sim Chye Hock and Peter Lee Hwai Kiat, being two of the directors of OSIM International Ltd, do hereby state that, in the opinion of the
directors,
(i) the accompanying balance sheets, consolidated statement of comprehensive income, statements of changes in equity and consolidated cash flow
statement together with notes thereto, are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31
December 2009 and of the results, changes in equity and cash flows of the Group and the changes in equity of the Company for the year ended on that
date; and
(ii) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.
On behalf of the board of directors,
Ron Sim Chye Hock

Director
Peter Lee Hwai Kiat

Director
Singapore
19 February 2010

INDEPENDENT AUDITORS’ REPORT
to the Members of OSIM International Ltd
We have audited the accompanying financial statements of OSIM International Ltd (the “Company”) and its subsidiaries (collectively, the “Group”) which
comprise the balance sheets of the Group and the Company as at 31 December 2009, the statements of changes in equity of the Group and the Company,
the consolidated statement of comprehensive income and consolidated cash flow statement of the Group for the year then ended, and a summary of
significant accounting policies and other explanatory notes.
Management’s responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with the provisions of the Singapore
Companies Act, Cap. 50 (the Act) and Singapore Financial Reporting Standards. This responsibility includes devising and maintaining a system of
internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition;
and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss account and
balance sheet and to maintain accountability of assets; selecting and applying appropriate accounting policies; and making accounting estimates that are
reasonable in the circumstances.
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore
Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected
depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

INDEPENDENT AUDITORS’ REPORT to the Members of OSIM International Ltd (cont’d)
Opinion
In our opinion,
(i) the consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company are properly drawn up in
accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group
and the Company as at 31 December 2009 and the results, changes in equity and cash flows of the Group and the changes in equity of the Company
for the year ended on that date; and
(ii) the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are
the auditors have been properly kept in accordance with the provisions of the Act.
Ernst & Young LLP

Public Accountants and
Certified Public Accountants
Singapore
19 February 2010

BALANCE SHEETS
as at 31 December 2009
Note Group Company

31 December 31 December 31 December 31 December
2009 2008 2009 2008
$’000 $’000 $’000 $’000
(Note 48)
Equity attributable to equity holders of the Company

Share capital 3a 49,252 42,574 49,252 42,574
Treasury shares 3b (2,289) – (2,289) –
Accumulated profits 63,395 41,017 20,637 4,439
Enterprise expansion funds 4 545 545 – –
Capital reserves 5 2,340 1,384 700 748
Hedging reserve 6 – – – –
Warrant reserve 7 12,191 12,191 12,191 12,191
Revaluation reserve 8 5,237 5,237 – –
Premium on purchase of minority interests’ shares 9 (7,862) (7,875) – –
Foreign currency translation reserve 10 (26,130) (25,617) – –
96,679 69,456 80,491 59,952
Minority interests 7,659 6,298 – –
Total equity 104,338 75,754 80,491 59,952
Non-current assets
Fixed assets 11 19,555 29,469 3,953 5,930
Investment property 12 – 545 – 545
Subsidiaries 13 – – 87,810 87,789
Associated companies and a joint venture 14 11,846 13,227 913 913
Intangible assets 15 22,952 34,014 – 819
Long-term investment 16 930 930 930 930
Long-term receivables 17 7,596 8,627 1,357 1,425
Deferred tax assets 38 1,366 5,107 – –
64,245 91,919 94,963 98,351
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.

BALANCE SHEETS as at 31 December 2009 (cont’d)
Note Group Company

2009 2008 2009 2008
$’000 $’000 $’000 $’000
(Note 48)
Current assets
Loan to associated company 18 176 303 176 303
Stocks 19 57,601 63,254 7,462 10,150
Trade debtors 20 32,570 23,252 3,448 5,570
Other debtors deposits and prepaid operating expenses 21 8,074 7,460 1,213 1,137
Due from subsidiaries (trade) 22 – – 9,148 8,993
Due from subsidiaries (non-trade) 22 – – 855 734
Due from affiliated companies (trade) 22 1,090 596 – –
Due from affiliated companies (non-trade) 22 4 2 – –
Due from associated companies (non-trade) 22 32 19 32 19
Due from a joint venture (trade) 22 406 360 406 360
Due from a joint venture (non-trade) 22 – 5 – 5
Properties held-for-sale 23 3,290 – 522 –
Fixed deposits 24 29,321 4,854 15,500 4,500
Cash and bank balances 24 33,913 21,439 11,687 7,193
166,477 121,544 50,449 38,964

BALANCE SHEETS as at 31 December 2009 (cont’d)
Note Group Company

2009 2008 2009 2008
$’000 $’000 $’000 $’000
(Note 48)
Current liabilities
Trade creditors 25 21,211 21,463 7,496 8,100
Other creditors and accruals 26 35,587 29,714 9,975 6,126
Provisions 27 5,430 4,629 2,858 2,848
Due to subsidiaries (trade) 22 – – – 60
Due to subsidiaries (non-trade) 22 – – 2,223 139
Due to affiliated companies (trade) 22 – 10 – –
Due to affiliated companies (non-trade) 22 114 23 – –
Due to associated companies (trade) 22 16,345 8,591 11,236 7,008
Due to associated companies (non-trade) 22 306 261 306 261
Due to a joint venture (trade) 22 223 364 223 364
Short-term bank loans 28 3,622 7,380 – –
Provision for income tax 8,538 6,279 1,979 1,862
Bank loans – current portion 29 22,523 20,469 20,000 20,000
Obligations under finance leases – current portion 30 59 363 – –
Bills payable to banks (unsecured) 8,773 12,249 8,445 10,212
Bank overdrafts 24 – 12 – –
122,731 111,807 64,741 56,980

Net current assets/(liabilities) 43,746 9,737 (14,292) (18,016)
Non-current liabilities
Bank loans – non-current portion 29 353 22,889 – 20,000
Obligations under finance leases – non-current portion 30 49 99 – –
Provision for pension benefits 31b 400 357 – –
Deferred tax liabilities 38 2,851 2,557 180 383
3,653 25,902 180 20,383
Net assets 104,338 75,754 80,491 59,952

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Note Group
2009 2008
$’000 $’000
Revenue 32 476,767 456,661
Other operating income 33 12,348 7,499
Changes in inventories of finished goods (5,653) (8,444)
Finished goods purchased (171,786) (164,466)
Employee benefits expense 31 (78,888) (79,242)
Depreciation and amortisation expenses (13,234) (14,439)
Other operating expenses 35 (181,458) (173,039)
Financial expenses 36a (1,253) (4,499)
Financial income 36b 119 274
36,962 20,305
Share of profits/(losses) of associated companies and a joint

venture before financial expenses and impairment loss 692 (20,498)
Share of financial expenses of a joint venture 37 – (14,684)
Share of impairment loss of a joint venture – (77,314)
Share of profits/(losses) of associated companies and a joint

venture after financial expenses and impairment loss 692 (112,496)
Profit/(loss) before taxation 37,654 (92,191)

Taxation 38 (13,092) (5,844)
Profit/(loss) for the year 24,562 (98,035)
Other comprehensive income:

Net gain in hedging reserve – 12
Foreign currency translation (349) (2,787)
Other comprehensive income for the year, net of tax (349) (2,775)
Total comprehensive income for the year 24,213 (100,810)
Profit/(loss) attributable to:

Equity holders of the Company 23,334 (99,436)
Minority interests 1,228 1,401
24,562 (98,035)
Total comprehensive income attributable to:

Equity holders of the Company 22,821 (101,686)
Minority interests 1,392 876
24,213 (100,810)
Earnings/(loss) per share (cents)

Basic 39 3.68 (18.35)
Diluted 39 3.66 (18.35)

STATEMENTS OF CHANGES IN EQUITY
Minority Total
Attributable to equity holders of the Company interests equity
Premium on
purchase Foreign
Enterprise of minority currency
Share Treasury expansion Capital Warrant Revaluation interests’ translation
2009 capital shares Accumulated funds reserves reserve reserve shares reserve
Group (Note 3a) (Note 3b) profits (Note 4) (Note 5) (Note 7) (Note 8) (Note 9) (Note 10) Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
At 31 December 2008 as
previously reported 42,574 – 41,626 545 1,384 12,191 5,237 (7,875) (25,617) 70,065 6,424 76,489
Effect of adopting INT
FRS 113 (Note 48) – – (609) – – – – – – (609) (126) (735)
At 1 January 2009
as restated 42,574 – 41,017 545 1,384 12,191 5,237 (7,875) (25,617) 69,456 6,298 75,754
Total comprehensive
income for the year – – 23,334 – – – – – (513) 22,821 1,392 24,213
Transfer to capital reserves
(Note 5) – – (1,004) – 1,004 – – – – – – –
Exercise of employees’
share options 56 – – – – – – – – 56 – 56
Lapse of employees’
share options – – 48 – (48) – – – – – – –
Issuance of rights
shares (Note 3a) 6,622 – – – – – – – – 6,622 – 6,622
Purchase of treasury
shares (Note 3b) – (2,289) – – – – – – – (2,289) – (2,289)
Premium on purchase
of minority interest
shares (Note 13c) – – – – – – – 13 – 13 – 13
Acquisition of minority
interest (Note 13c) – – – – – – – – – – (31) (31)
At 31 December 2009 49,252 (2,289) 63,395 545 2,340 12,191 5,237 (7,862) (26,130) 96,679 7,659 104,338

STATEMENTS OF CHANGES IN EQUITY for the year ended 31 December 2009 (cont’d)
Minority Total
Attributable to equity holders of the Company interests equity
Premium on
purchase Foreign
Enterprise of minority currency
Share expansion Capital Hedging Warrant Revaluation interests’ translation
2008 capital Accumulated funds reserves reserve reserve reserve shares reserve
Group (Note 3a) profits (Note 4) (Note 5) (Note 6) (Note 7) (Note 8) (Note 9) (Note 10) Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
At 31 December 2007
as previously stated 42,574 141,062 545 1,384 (12) – 5,237 (7,720) (23,355) 159,715 6,940 166,655
Effects of adopting
INT FRS 113 (Note 48) – (609) – – – – – – – (609) (126) (735)
At 1 January 2008,
as restated 42,574 140,453 545 1,384 (12) – 5,237 (7,720) (23,355) 159,106 6,814 165,920
Total comprehensive
income for the year – (99,436) – – 12 – – – (2,262) (101,686) 876 (100,810)
Issuance of warrants
(Note 7) – – – – – 12,191 – – – 12,191 – 12,191
Increase in investment
by a minority
shareholder (Note 13g) – – – – – – – – – – 135 135
Gain on deemed increase
in shareholding
in a subsidiary (Note 13g) – – – – – – – – – – 155 155
Premium on deemed
increase in shareholding
in a subsidiary (Note 13g) – – – – – – – (155) – (155) – (155)
Dividends paid to minority
shareholders by subsidiaries – – – – – – – – – – (1,355) (1,355)
Disposal of a subsidiary
(Note 13h) – – – – – – – – – – (327) (327)
At 31 December 2008,
as restated 42,574 41,017 545 1,384 – 12,191 5,237 (7,875) (25,617) 69,456 6,298 75,754

STATEMENTS OF CHANGES IN EQUITY for the year ended 31 December 2009 (cont’d)
Share Treasury Capital Warrant

2009 capital shares Accumulated reserves reserve
Company (Note 3a) (Note 3b) profits (Note 5) (Note 7) Total equity
$’000 $’000 $’000 $’000 $’000 $’000
At 1 January 2009 42,574 – 4,439 748 12,191 59,952

Total comprehensive income for the year – – 16,150 – – 16,150
Issuance of rights shares (Note 3a) 6,622 – – – – 6,622
Exercise of employees’ share options 56 – – – – 56
Lapse of employees’ share options – – 48 (48) – –
Purchase of treasury shares (Note 3b) – (2,289) – – – (2,289)
At 31 December 2009 49,252 (2,289) 20,637 700 12,191 80,491
Share Capital Hedging Warrant

2008 capital Accumulated reserves reserve reserve
Company (Note 3a) profits (Note 5) (Note 6) (Note 7) Total equity
$’000 $’000 $’000 $’000 $’000 $’000
At 1 January 2008 42,574 122,988 748 (12) – 166,298

Total comprehensive income for the year – (118,549) – 12 – (118,537)
Issuance of warrants (Note 7) – – – – 12,191 12,191
At 31 December 2008 42,574 4,439 748 – 12,191 59,952

CONSOLIDATED CASH FLOW STATEMENT
Note Group
2009 2008
$’000 $’000
Cash flows from operating activities
Profit/(loss) before taxation 37,654 (92,191)
Adjustments for:
Share of (profits)/losses of associated companies and a joint venture (692) 112,496
Depreciation of fixed assets 11 11,506 12,743
Depreciation of investment property 12 23 24
Loss on disposal of fixed assets 1,271 1,300
(Gain)/loss on disposal of subsidiaries 13f, 13h (535) 475
Amortisation of intangible assets 15 1,704 1,672
Impairment loss on goodwill 15 9,604 –
Impairment loss on fixed assets 11 1,422 1,544
Financial income 36b (119) (274)
Financial expenses 36a 1,253 4,499
Provisions 801 (1,268}
Operating cash flows before working capital changes 63,892 41,020
(Increase)/decrease in:
Stocks 5,660 8,410
Trade debtors (9,368) 6,552
Other debtors, deposits and prepaid operating expenses 842 3,142
Due from affiliated companies (trade) (495) 215
Due from affiliated companies (non-trade) (1) –
Due from associated companies (trade) – 1,370
Due from associated companies (non-trade) (13) 730
Due from joint venture (trade) (46) 323
Due from joint venture (non-trade) 5 222
(Decrease)/increase in:
Trade creditors (252) 570
Other creditors and accruals 6,382 (5,370)
Due to affiliated companies (trade) – (3)
Due to affiliated companies (non-trade) 91 23
Due to associated companies (trade) 7,753 (1,191)
Due to associated companies (non-trade) 45 258
Due to joint venture (trade) (141) (445)
Bills payable to banks (3,476) (26,555)
Cash flows generated from operations 70,878 29,271
Income tax paid, net of refund (6,162) (6,243)
Net cash flows generated from operating activities 64,716 23,028

CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 2009 (cont’d)
Note Group
2009 2008
$’000 $’000
Cash flows from investing activities
Purchase of fixed assets A (5,930) (8,401)
Proceeds from disposal of fixed assets 263 155
Interest received 119 211
Dividend received from an associated company 1,722 2,091
Dividends paid to minority shareholders by subsidiaries – (1,355)
Increase in investment by a minority shareholder 13g – 135
Acquisition of additional interest in a subsidiary 13c (21) –
Acquisition of intangible assets 15 (279) (672)
Repayment of loan from an associated company 127 454
Net cash outflow on disposal of a subsidiary 13h – (175)
Net cash flows used in investing activities (3,999) (7,557)
Cash flows from financing activities

Receipts from new bank loans 2,605 14,497
Repayment of bank loans (26,822) (37,129)
Repayment of finance lease obligations (440) (528)
Purchase of treasury shares 3b (2,289) –
Proceeds from issuance of warrants 7 – 12,191
Net proceeds from issuance of rights shares 6,622 –
Proceeds from exercise of employees’ share options 3a 56 –
Interest paid (2,110) (4,083)
Net cash flows used in financing activities (22,378) (15,052)
Net increase in cash and cash equivalents 38,339 419

Net effect of exchange rates changes (1,386) (1,885)
Cash and cash equivalents at beginning of year 26,281 27,747
Cash and cash equivalents at end of year (Note 24) 63,234 26,281
Note A: Fixed assets

During the financial year, the Group acquired fixed assets with an aggregate cost of $5,930,000 (2008: $8,433,000) of which $Nil (2008: $32,000) were
acquired by means of finance leases. Cash payments of $5,930,000 (2008: $8,401,000) were made to purchase fixed assets. The Group has provided for
additional restoration cost of $355,000 (2008: $265,000) for shop renovations.

NOTES TO THE FINANCIAL STATEMENTS
31 December 2009
1. Corporate information
OSIM International Ltd (the “Company”) is a limited liability company, which is domiciled and incorporated in Singapore and listed on the Singapore
Exchange Securities Trading Limited.
The registered office and principal place of business of the Company is located at 65, Ubi Avenue 1, OSIM Headquarters, Singapore 408939.
The principal activities of the Company are those of marketing, distributing and franchising of healthy lifestyle products. The principal activities of its
subsidiaries are as shown in Note 13 to the financial statements.
There have been no significant changes in the nature of these activities during the financial year.
2. Summary of significant accounting policies
2.1 Basis of preparation

The consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company have been
prepared in accordance with Singapore Financial Reporting Standards (“FRS”).
The financial statements have been prepared on a historical cost basis except as disclosed in the accounting policies below.
The financial statements are presented in Singapore dollars (SGD or $) and all values in the tables are rounded to the nearest thousand
($’000) as indicated.
2.2 Changes in accounting policies

The accounting policies adopted are consistent with those of the previous financial year except as follows:
On 1 January 2009, the Group adopted the following standards and interpretations mandatory for annual financial periods beginning on or
after 1 January 2009.
• FRS 1 Presentation of Financial Statements (Revised)

• Amendments to FRS 18 Revenue
• Amendments to FRS 23 Borrowing Costs
• Amendments to FRS 32 Financial Instruments: Presentation and FRS 1 Presentation of Financial Statements – Puttable Financial
Instruments and Obligations Arising on Liquidation
• Amendments to FRS 101 First-time Adoption of Financial Reporting Standards and FRS 27 Consolidated and Separate Financial
Statements – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate
• Amendments to FRS 102 Share-based Payment – Vesting Conditions and Cancellations
• Amendments to FRS 107 Financial Instruments: Disclosures
• FRS 108 Operating Segments

NOTES TO THE FINANCIAL STATEMENTS – 31 December 2009 (cont’d)
2. Summary of significant accounting policies (cont’d)
2.2 Changes in accounting policies (cont’d)

• Improvements to FRSs issued in 2008
• INT FRS 113 Customer Loyalty Programmes
• INT FRS 116 Hedges of a Net Investment in a Foreign Operation
• Amendments to INT FRS 109 Reassessment of Embedded Derivatives and FRS 39 Financial Instruments: Recognition and
Measurement – Embedded Derivatives
• INT FRS 118 Transfers of Assets from Customers
Adoption of these standards and interpretations did not have any effect on the financial performance or position of the Group except for INT
FRS 113 Customer Loyalty Programmes. These standards and interpretations did however give rise to additional disclosures, including, in
some cases, revisions to accounting policies.
The principal effects of these changes are as follows:
FRS 1 Presentation of Financial Statements – Revised presentation
The revised FRS 1 separates owner and non-owner changes in equity. The statement of changes in equity includes only details of transactions
with owners, with all non-owner changes in equity presented in the statement of other comprehensive income. In addition, the Standard
introduces the statement of comprehensive income which presents income and expense recognised in the period. This statement may be
presented in one single statement, or two linked statements. The Group has elected to present this statement in one single statement.
Amendments to FRS 107 Financial Instruments: Disclosures
The amendments to FRS 107 require additional disclosure about fair value measurement and liquidity risk. Fair value measurements are
to be disclosed by source of inputs using a three level hierarchy for each class of financial instrument. In addition, reconciliation between
the beginning and ending balance for Level 3 fair value measurements is now required, as well as significant transfers between Level 1 and
Level 2 fair value measurements. The amendments also clarify the requirements for liquidity risk disclosures. The fair value measurement
disclosures and liquidity risk disclosures are presented in Note 46 and Note 45 to the financial statements respectively.
FRS 108 Operating Segments
FRS 108 requires disclosure of information about the Group’s operating segments and replaces the requirement to determine primary and
secondary reporting segments of the Group. The Group determined that the reportable operating segments are the same as the business
segments previously identified under FRS 14 Segment Reporting. Additional disclosures about each of the segments are shown in Note 44,
including revised comparative information.
INT FRS 113 Customer Loyalty Programmes
On 1 January 2009, the Group adopted INT FRS 113 Customer Loyalty Programmes, which is effective for annual periods beginning on or
after 1 July 2008.
One of the subsidiary companies operates the Bonus$ scheme as part of their customer loyalty strategy. Bonus$ are awarded to VIP
members for purchases made. The VIP members can use the Bonus$ earned to redeem products at retail price.

INT FRS 113 Customer Loyalty Programmes (cont’d)
On adoption of INT FRS 113, the Group changed its policy for revenue recognition such that consideration received from the sale of goods is allocated
to the goods sold and the points issued that are expected to be redeemed.
The consideration allocated to the points issued is measured at the fair value of the points. It is recognised as a liability (deferred revenue) on the
balance sheet and recognised as revenue when the points are redeemed, have expired or are no longer expected to be redeemed. The amount of
revenue recognised is based on the number of points that have been redeemed, relative to the total number expected to be redeemed.
The change in accounting policy has been applied retrospectively. The effects of adoption on the financial statements are as follows:
At 1 January and 31 December 2008, increases/(decreases) in the Group’s:

• Other creditors and accruals by $1,649,000;
• Provisions by ($914,000)
• Accumulated profits by ($609,000); and
• Minority interest by ($126,000).
With the retrospective restatement of the financial statements, the revised FRS 1 requires the Group to present, as a minimum, three statements of
financial position. The current and prior year statements of financial position are presented in the balance sheets of the financial statements. The
presentation of the balance sheet as at the beginning of the earliest comparative period is presented in Note 48 to the financial statements.
Improvements to FRSs issued in 2008
In 2008, the Accounting Standards Council issued an omnibus of amendments to FRS. There are separate transitional provisions for each amendment.
The adoption of the following amendments resulted in changes to accounting policies but did not have any impact on the financial position or
performance of the Group:
• FRS 1 Presentation of Financial Statements: Assets and liabilities classified as held for trading in accordance with FRS 39 Financial Instruments:
Recognition and Measurement are not automatically classified as current in the balance sheet. The Group amended its accounting policy
accordingly and analysed whether management’s expectation of the period of realisation of financial assets and liabilities differed from the
classification of the instrument. This did not result in any re-classification of financial instruments between current and non-current in the
balance sheet.
• FRS 16 Property, Plant and Equipment: Replaces the term “net selling price” with “fair value less costs to sell”. The Group amended its
accounting policy accordingly, which did not result in any change in the financial position.

Improvements to FRSs issued in 2008 (cont’d)
• FRS 23 Borrowing Costs: The definition of borrowing costs is revised to consolidate the two types of items that are considered components of
“borrowing costs” into one – the interest expense calculated using the effective interest rate method calculated in accordance with FRS 39.
The Group has amended its accounting policy accordingly which did not result in any change in its financial position.
2.3 Standards issued but not yet effective

The Group has not adopted the following standards and interpretations that have been issued but not yet effective:
Effective for annual periods

Description beginning on or after
Amendments to FRS 27 Consolidated and Separate Financial Statements 1 July 2009

Amendments to FRS 39 Financial Instruments: Recognition and Measurement – Eligible Hedged Item 1 July 2009
Revised FRS 103 Business Combinations 1 July 2009
Amendments to FRS 105 Non-current Assets Held for Sale and Discontinued Operations 1 July 2009
INT FRS 117 Distributions of Non-cash Assets to Owners 1 July 2009
Improvements to FRSs issued in 2009:
– Amendments to FRS 38 Intangible Assets 1 July 2009
– Amendments to FRS 102 Share-based Payment 1 July 2009
– Amendments to FRS 108 Operating Segments 1 July 2009
– Amendments to INT FRS 109 Reassessment of Embedded Derivatives 1 July 2009
– Amendments to INT FRS 116 Hedges of a Net Investment in a Foreign Operation 1 July 2009
– Amendments to FRS 1 Presentation of Financial Statements 1 January 2010
– Amendments to FRS 7 Statement of Cash Flows 1 January 2010
– Amendments to FRS 17 Leases 1 January 2010
– Amendments to FRS 36 Impairment of Assets 1 January 2010
– FRS 39 Financial Instruments: Recognition and Measurement 1 January 2010
– Amendments to FRS 105 Non-current Assets Held for Sale and Discontinued Operations 1 January 2010
– Amendments to FRS 108 Operating Segments 1 January 2010
Except for the revised FRS 103 and the amendments to FRS 27, the directors expect that the adoption of the other standards and interpretations
above will have no material impact on the financial statements in the period of initial application. The nature of the impending changes in
accounting policy on adoption of the revised FRS 103 and the amendments to FRS 27 are described below.

2.3 Standards issued but not yet effective (cont’d)
Revised FRS 103 Business Combinations and Amendments to FRS 27 Consolidated and Separate Financial Statements
The revised standards are effective for annual periods beginning on or after 1 July 2009. The revised FRS 103 introduces a number of chang-
es in the accounting for business combinations occurring after 1 July 2009. These changes will impact the amount of goodwill recognised,
the reported results in the period that an acquisition occurs, and future reported results. The Amendments to FRS 27 require that a change
in the ownership interest of a subsidiary (without loss of control) is accounted for as an equity transaction. Therefore, such transactions will
no longer give rise to goodwill, nor will they give rise to a gain or loss. Furthermore, the amended standard changes the accounting for losses
incurred by the subsidiary as well as the loss of control of a subsidiary. Other consequential amendments were made to FRS 7 Statement of
Cash Flows, FRS 12 Income Taxes, FRS 21 The Effects of Changes in Foreign Exchange Rates, FRS 28 Investments in Associates and FRS
31 Interests in Joint Ventures. The changes from revised FRS 103 and Amendments to FRS 27 will affect future acquisitions or loss of control
and transactions with minority interests.
2.4 Significant accounting estimates and judgements

The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions that affect the
reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However,
uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount
of the asset or liability affected in the future.
Estimates and assumptions concerning the future and judgments are made in the preparation of the financial statements. They affect the
application of the Group’s accounting policies, reported amounts of assets, liabilities, income and expenses, and disclosures made. They are
assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed
to be reasonable under the circumstances.
a) Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
discussed below:
i) Impairment of goodwill
The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value in
use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires the Group to make
an estimate of the expected future cash flows from the cash-generating unit and also to choose a suitable discount rate in
order to calculate the present value of those cash flows. The carrying amount of the Group’s goodwill at 31 December 2009
was $10,543,000 (2008: $20,147,000). More details are given in Note 15.

2.4 Significant accounting estimates and judgments (cont’d)
a) Key sources of estimation uncertainty (cont’d)

ii) Income taxes
The Group has exposure to income taxes in numerous jurisdictions. Significant judgement is involved in determining
the group-wide provision for income taxes. There are certain transactions and computations for which the ultimate tax
determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues
based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the
amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period
in which such determination is made.
The carrying amount of the Group’s tax payables, deferred tax liabilities, deferred tax assets and income tax recoverable as
at 31 December 2009 were summarised as follows:
Provision for income tax : $8,538,000 (2008: $6,279,000)

Deferred tax liabilities : $2,851,000 (2008: $2,557,000)
Deferred tax assets : $1,366,000 (2008: $5,107,000)
Income tax recoverable : $394,000 (2008: $1,090,000)
iii) Depreciation of fixed assets

Fixed assets are depreciated on a straight-line basis over their estimated useful lives. Management estimates the useful lives
of these fixed assets, except for freehold and leasehold buildings, to be within 1 to 10 years. The carrying amount of the
Group’s fixed assets at 31 December 2009 was $19,555,000 (2008: $29,469,000) (Note 11). Changes in the expected level
of usage and technological developments could impact the economic useful lives and the residual values of these assets,
therefore future depreciation charges could be revised.
iv) Provision for warranties

Provision for warranties is accrued based on the estimated costs of fulfilling the total obligation, including handling and
transportation costs. The amount of the provision for warranty is estimated based on sales volumes and past experience of
the level of repairs and return. The estimation basis is reviewed on an ongoing basis and revised where appropriate. The
provision for warranties at 31 December 2009 was $1,369,000 (2008: $1,183,000) (Note 27).
v) Deferred revenue
The Group allocates the consideration received from the sale of goods to the goods sold and the points issued under one
of its subsidiary’s VIP card programme. The consideration allocated to the points issued is measured at their fair value. Fair
value is determined by applying statistical techniques, of which factors such as changing patterns in the redemption rates
were considered.
The carrying amount of deferred revenue allocated to the award credits at 31 December 2009 is $1,484,000 (2008:
$1,649,000) (Note 26).

2.4 Significant accounting estimates and judgments (cont’d)
a) Key sources of estimation uncertainty (cont’d)

vi) Provision for restoration costs
Provision for restoration costs is accrued based on the expected cost of restoring the leasehold premises, retails outlets and
warehouse to their state and condition as at the commencement of the lease and to the satisfaction of the landlord. The
provision for restoration costs at 31 December 2009 was $4,061,000 (2008: $3,446,000) (Note 27).
vii) Impairment in investments in a joint venture and an associated company

The Company assesses impairment based on an estimation of the value in use of these investments. The value in use
calculation requires the Company to estimate the future cash-flows expected from the cash-generating units and an
appropriate discount rate in order to calculate the present value of the future cash-flows. Management has evaluated the
recoverability of these investments based on such estimates and recorded impairment losses of $Nil (2008: $145,298,000)
and $Nil (2008: $116,000) on investments in a joint venture and an associated company respectively (Note 14a).
viii) Allowance for stocks obsolescence

Management makes allowance for stocks obsolescence based on historical obsolescence and slow-moving experiences. An
allowance for stocks obsolescence is made if stocks are deteriorated, damaged, obsolete or slow-moving. The allowance for
stocks obsolescence at 31 December 2009 was $4,240,000 (2008: $3,751,000).
b) Critical judgements made in applying accounting policies

The following are the judgements made by management in the process of applying the Group’s accounting policies that have the
most significant effect on the amounts recognised in the financial statements:
i) Impairment of financial assets

The Group follows the guidance of FRS 39 on determining when a financial asset is considered impaired. This determination
requires significant judgement. The Group evaluates, among other factors, the duration and extent to which the fair value
of a financial asset is less than its cost; and the financial health of and the near-term business outlook of the issuer of the
instrument, including factors such as industry performance, changes in technology and operational and financing cash
flows.
ii) Impairment of non-financial assets

The Group assesses whether there are any indicators of impairment for all non-financial assets at each reporting date.
Goodwill is tested for impairment annually and at other times when such indicators exist. Other non-financial assets are
tested for impairment when there are indicators that the carrying amounts may not be recoverable.

2.5 Functional and foreign currency
a) Foreign currency transactions

Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are
recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates.
Monetary assets and liabilities denominated in foreign currencies are translated at the closing rate of exchange ruling at the balance
sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using
the exchange rates at the date when the fair value was determined.
Exchange differences arising on the settlement of monetary items or on translating monetary items at the balance sheet date
are recognised in the profit and loss except for exchange differences arising on monetary items that form part of the Group’s net
investment in foreign subsidiaries, which are recognised initially in a separate component of equity as foreign currency translation
reserve in the consolidated balance sheet and recognised in the profit and loss on disposal of the subsidiary.
b) Foreign currency translation

On consolidation, the results and financial position of foreign operations are translated into SGD using the following procedures:
• Assets and liabilities for each balance sheet presented are translated at the closing rate ruling at that balance sheet date;
and
• Income and expenses for each profit and loss are translated at average exchange rates for the year, which approximates the
exchange rates at the dates of the transactions.
All resulting exchange differences are recognised in a separate component of equity as foreign currency translation reserve.
On disposal of a foreign operation, the cumulative amount of exchange differences deferred in equity relating to that foreign operation
is recognised in the profit and loss as a component of the gain or loss on disposal.

2.6 Subsidiaries and principles of consolidation
a) Subsidiaries
A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits
from its activities. The Group generally has such power when it, directly or indirectly, holds more than 50% of the issued share capital,
or controls more than half of the voting power, or controls the composition of the board of directors.
In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less any impairment losses.
b) Principles of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the balance sheet
date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for
the same reporting date as the holding company. Consistent accounting policies are applied to like transactions and events in similar
circumstances.
All intra-group balances, transactions, income and expenses and unrealised gains and losses resulting from intra-group transactions
are eliminated in full.
Acquisitions of subsidiaries are accounted for using the purchase method. The cost of an acquisition is measured as the fair
value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly
attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination
are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest.
Any excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities
and contingent liabilities represents goodwill. The goodwill is accounted for in accordance with the accounting policy for goodwill
stated in Note 2.14.
Any excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of
business combination is recognised in the profit and loss account on the date of acquisition.
When the Group acquires a business, embedded derivatives separated from the host contract by the acquiree are not reassessed on
acquisition unless the business combination results in a change in the terms of the contract that significantly modifies the cash flows
that would otherwise be required under the contract.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to
be consolidated until the date that such control ceases.

2.6 Subsidiaries and principles of consolidation (cont’d)
c) Transactions with minority interests

Minority interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group and are presented
separately in the profit and loss and within equity in the consolidated balance sheet, separately from parent shareholders’ equity.
Transactions with minority interests are accounted for using the entity concept method, whereby, transactions with minority
interests are accounted for as transactions between equity holders. On acquisition of minority interests, the difference between the
consideration and net carrying value of the share of the net assets acquired is reflected as being a transaction between owners and
recognised directly in equity. Gain or loss on disposal to minority interests is recognised directly in equity.
2.7 Associated companies
An associated company is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. The associated
company is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant
influence over the associated company.
The Group’s investments in associated companies are accounted for using the equity method. Under the equity method, the investment in
associated company is carried in the balance sheet at cost plus post-acquisition changes in the Group’s share of net assets of the associated
company.
Any excess of the Group’s share of the net fair value of the associated company’s identifiable assets, liabilities and contingent liabilities over
the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of
the Group’s share of the associated company’s profit or loss in the period in which the investment is acquired.
When the Group’s share of losses in an associated company equals or exceeds its interest in the associated company, the Group does not
recognise further losses, unless it has incurred obligations or made payments on behalf of the associated company.
After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the
Group’s investment in its associates. The Group determines at each balance sheet date whether there is any objective evidence that the
investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the
recoverable amount of the associate and its carrying value and recognises the amount in the profit or loss.
The financial statements of the associated company are prepared as of the same reporting date as the Company. Where necessary,
adjustments are made to bring the accounting policies in line with those of the Group.
In the Company’s separate financial statements, investments in associated companies are accounted for at cost less impairment loss.

2.8 Joint venture

The Group’s investments in joint venture are accounted for using the equity method. Under the equity method, the investment in joint venture
is carried in the balance sheet at cost plus post-acquisition changes in the Group’s share of net assets of the joint venture. The joint venture
is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have joint control over the
joint venture.
When the Group’s share of losses in a joint venture equals or exceeds its interest in the joint venture, the Group does not recognise further
losses, unless it has incurred obligations or made payments on behalf of the joint venture.
In the Company’s separate financial statements, interests in joint ventures are accounted for at cost less impairment losses.
2.9 Affiliated companies

An affiliated company is a company, not being a subsidiary or an associated company, in which one or more of the directors or shareholders
of the Company have a significant equity interest or exercise significant influence.
2.10 Related parties

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party
in making financial and operating decisions.
2.11 Fixed assets

All items of fixed assets are initially recorded at cost. The cost of an item of fixed assets is recognised as an asset if, and only if, it is probable
that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.
Subsequent to recognition, fixed assets are measured at cost less accumulated depreciation and accumulated impairment losses. When
significant parts of fixed assets are required to be replaced in intervals, the Group recognises such parts as individual assets with specific
useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of
the fixed assets as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in the income
statement as incurred. Freehold land and buildings are measured at fair value less accumulated depreciation on buildings and impairment
losses recognised after the date of the revaluation. Valuations are performed with sufficient regularity to ensure that the carrying amount does
not differ materially from the fair value of the freehold land and buildings at the balance sheet date.
Any revaluation surplus is recognised in other comprehensive income and accumulated in equity under the asset revaluation reserve, except
to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss, in which case the increase is
recognised in profit or loss. A revaluation deficit is recognised in profit or loss, except to the extent that it offsets an existing surplus on the
same asset carried in the asset revaluation reserve.

2.11 Fixed assets (cont’d)

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount
is restated to the revalued amount of the asset. The revaluation surplus included in the asset revaluation reserve in respect of an asset is
transferred directly to retained earnings on retirement or disposal of the asset.
Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation is computed on a straight-line basis over the estimated
useful lives of the assets as follows:
Rate of depreciation
Freehold buildings 2% - 3%
Leasehold buildings 1.42% - 3%
Plant and machinery 10%
Computers 18% - 100%
Motor vehicles 18% - 40%
Shop renovations Shorter of lease terms or 331/3%
Furniture and fittings 10% - 331/3%
Office equipment 10% - 20%
The carrying values of fixed assets are reviewed for impairment when events or changes in circumstances indicate that the carrying value
may not be recoverable.
The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted prospectively, if appropriate.
An item of fixed assets is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain
or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised.
2.12 Investment property

Investment property is stated at cost, net of depreciation and any impairment loss. Depreciation is provided on a straight-line basis so as to
write-off the cost of the investment property over its estimated useful live as follows:
Rate of depreciation
Leasehold building 4%
The carrying value of investment property is reviewed for impairment when events or changes in circumstances indicate that the carrying
value may not be recoverable.
The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the amount, method and
period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits
embodied in the investment property.
Investment property is derecognised when either it has been disposed of or when the investment property is permanently withdrawn from
use and no future economic benefit is expected from its disposal. Any gain or loss on the retirement or disposal of an investment property is
recognised in profit and loss in the year of retirement or disposal.

2.12 Investment property (cont’d)

Transfers are made to or from investment property only when there is a change in use. For both transfer from investment property to owner
occupied property or owner occupied property to investment property, the deemed cost for subsequent accounting is the cost at the date
of acquisition of property. In addition, for a transfer from owner occupied property to investment property, the property is accounted for in
accordance with the accounting policy for fixed assets set out in Note 2.11 up to the date of change in use.
2.13 Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date: whether
fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset. For
arrangements entered into prior to 1 January 2005, the date of inception is deemed to be 1 January 2005 in accordance with the transitional
requirements of INT FRS 104.
a) As lessee
Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item, are
capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease
payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the finance
charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance
charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in the periods in which they are incurred.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no
reasonable certainty that the Group will obtain ownership by the end of the lease term.
Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate
benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.
b) As lessor
Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified as operating leases.
Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised
over the lease term on the same bases as rental income. The accounting policy for rental income is set out in Note 2.26(f).

2.14 Intangible assets
a) Goodwill
Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less accumulated impairment
losses.
For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the Group’s cash-
generating units that are expected to benefit from the synergies of the combination.
The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication
that the cash-generating unit may be impaired, by comparing the carrying amount of the cash-generating unit, including the allocated
goodwill, with the recoverable amount of the cash-generating unit. Where the recoverable amount of the cash-generating unit is less
than the carrying amount, an impairment loss is recognised in the profit or loss. Impairment losses recognised for goodwill are not
reversed in subsequent periods.
Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is disposed of, the
goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain
or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values of the
operations disposed of and the portion of the cash-generating unit retained.
Goodwill and fair value adjustments arising on the acquisition of foreign operation on or after 1 January 2005 are treated as assets
and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated in
accordance with the accounting policy set out in Note 2.5.
Goodwill and fair value adjustments which arose on acquisitions of foreign operation before 1 January 2005 are deemed to be assets
and liabilities of the Company and are recorded in SGD at the rates prevailing at the date of acquisition.
b) Club membership
Club membership is measured at cost less accumulated amortisation and any impairment loss. Club membership is amortised on a
straight-line basis over the estimated useful life of 22 years.
c) Other intangible assets

Intangible assets acquired separately are measured initially at cost. The cost of intangible assets acquired in a business combination
is their fair value as at the date of acquisition. Following initial acquisition, intangible assets are measured at cost less any accumulated
amortisation and accumulated impairment losses.

2.14 Intangible assets (cont’d)
c) Other intangible assets (cont’d)

Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for impairment whenever there is
an indication that the intangible asset may be impaired. The amortisation period and the amortisation method are reviewed at least
at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits
embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in
accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the profit or loss in the expense
category consistent with the function of the intangible asset.
Intangible assets with indefinite useful lives or not yet available for use are tested for impairment annually, or more frequently if the
events and circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level.
Such intangible assets are not amortised. The useful life of an intangible asset with an indefinite useful life is reviewed annually to
determine whether the useful life assessment continues to be supportable. If not, the change in useful life from indefinite to finite is
made on a prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds
and the carrying amount of the asset and are recognised in the profit or loss when the asset is derecognised.
The following classes of intangible assets are acquired by the Group through the acquisition of subsidiaries:
i) Franchise rights and trademarks

Franchise rights are paid to the franchisor, General Nutrition International, Inc. (“GNC”), in respect of every retail store
opened by the Group and entitle the Group the right to operate each retail store using the franchisor’s trademarks, trade
names and operating system. Franchise rights are amortised over 20 years on a straight-line basis.
Trademark registration costs relate to fees paid to register the “L.A.C” trademark and are amortised over 20 years on a
straight-line basis.
ii) Distribution rights

Distribution rights relate to fees paid to GNC for the exclusive rights to distribute GNC products to other retailers, distributors
and merchants in Singapore and rights granted to third parties to distribute certain products exclusively in a specified territory
for a limited period of time. The distribution fees paid to GNC are amortised over 20 years on a straight-line basis, and the
third party distribution rights are amortised over the agreement period ranging from 1 to 4 years.

2.14 Intangible assets (cont’d)
c) Other intangible assets (cont’d)
iii) Product development costs

Product development costs arising from development expenditure on a product is recognised when the Group can demonstrate
the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete
and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to
complete and the ability to measure reliably the expenditure during the development. Product development costs have a
finite useful life and are amortised over the period of expected sales from the related product ranging from 2 to 3 years on a
straight line basis.
Gain or loss arising from derecognition of an intangible asset is measured as the difference between the net disposal proceeds
and the carrying amount of the asset and are recognised in profit and loss when the asset is derecognised.
2.15 Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or
when annual impairment testing for an asset (i.e. an intangible asset with an indefinite useful life, an intangible asset not yet available for use,
or goodwill acquired in a business combination) is required, the Group makes an estimate of the asset’s recoverable amounts.
An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use and is
determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets
or groups of assets. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of
an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses
of continuing operations are recognised in profit and loss or treated as a revaluation decrease for assets carried at revalued amount to the
extent that the impairment loss does not exceed the amount held in the asset revaluation reserve for that same asset.
Impairment losses are recognised in the profit or loss except for assets that are previously revalued where the revaluation was taken to other
comprehensive income. In this case the impairment is also recognised in other comprehensive income up to the amount of any previous
revaluation.

2.15 Impairment of non-financial assets (cont’d)

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses recognised
for an asset other than goodwill may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A
previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable
amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable
amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment
loss been recognised for the asset in prior years. Reversal of an impairment loss is recognised in the profit and loss unless the asset is carried
at revalued amount, in which case the reversal in excess of impairment loss previously recognised through the profit and loss is treated as
a revaluation increase. After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying
amount, less any residual value, on a systematic basis over its remaining useful life. The Group does not reverse in a subsequent period, any
impairment loss recognised for goodwill.
2.16 Financial assets

Financial assets are recognised on the balance sheet when, and only when, the Group becomes a party to the contractual provisions of the
financial instrument.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through
profit or loss, directly attributable transaction costs.
A financial asset is derecognised where the contractual rights to receive cash flows from the asset have expired. On derecognition of a
financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain
or loss that had been recognised in other comprehensive income is recognised in profit or loss.
On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received
(including any new asset obtained less any new liability assumed) and any cumulative gain or loss that has been recognised directly in equity
is recognised in profit and loss.
All regular way purchases and sales of financial assets are recognised on the trade date (i.e. the date that the Group commits to purchase
the asset). Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally
established by regulation or convention in the marketplace concerned.
a) Financial assets at fair value through profit or loss

Financial assets as held for trading (including derivative financial instruments) are classified financial assets at fair value through
profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term.
Derivative financial instruments are also classified as held for trading unless they are designated as effective hedging instruments.
Gain or losses on financial assets classified at fair value through profit or loss are recognised in profit and loss.

2.16 Financial assets (cont’d)
b) Loan and receivables

Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and
receivables. Such assets are carried at amortised cost using the effective interest method, less impairment losses. Gains and losses
are recognised in profit and loss when the loans and receivables are derecognised or impaired, as well as through the amortisation
process.
The Group classifies the following financial assets as loan and receivables:
• cash and cash equivalents
• trade and other debtors, including amounts due from subsidiaries, associated companies, affiliated companies and a joint
venture, loans to associated companies and long-term deposits
c) Available-for-sale financial assets

The Group classifies its long-term investment as available-for-sale financial assets.
Available-for-sale financial assets are those non-derivative financial assets that are designated as available-for-sale or are not classified
in any of the other categories. After initial recognition, available-for-sale financial assets are measured at fair value with gains or losses
being recognised in the fair value adjustment reserve until the investment is derecognised or until the investment is determined to be
impaired at which time the cumulative gain or loss previously reported in equity is included in profit and loss.
For investments where there is no active market, fair value is determined using valuation techniques. Investments in equity instruments
that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost
less impairment losses.
2.17 Impairment of financial assets
The Group assesses at each balance sheet date whether there is any objective that a financial asset or group of financial assets is
impaired.
a) Assets carried at amortised cost

If there is objective evidence that an impairment loss on financial assets carried at amortised cost has been incurred, the amount
of the loss is measured as the difference between the asset’s carrying amount and the present value of estimate future cash flows
discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an
allowance account. The amount of the loss is recognised in profit and loss.
When the asset becomes uncollectible, the carrying amount of impaired financial assets is reduced directly or if an amount was
charged to the allowance account, the amounts charged to the allowance account are written off against the carrying value of the
financial asset.

2.17 Impairment of financial assets (cont’d)
a) Assets carried at amortised cost (cont’d)

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group considers
factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in
payments.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of
an impairment loss is recognised in the profit and loss account, to the extent that the carrying value of the asset does not exceed its
amortised cost at the reversal date.
b) Assets carried at cost

If there is objective evidence that an impairment loss on a financial asset carried at cost has been incurred, the amount of the loss is
measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at
the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods.
c) Available-for-sale financial assets

Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor, and the disappearance
of an active trading market are considerations to determine whether there is objective evidence that investment securities classified
as available-for-sale financial assets are impaired.
If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of any principal payment
and amortisation) and its current fair value, less any impairment loss previously recognised in profit and loss, is transferred from
equity to profit and loss. Reversals of impairment loss in respect of equity instruments are not recognised in profit and loss. Reversals
of impairment losses on debt instruments are reversed through profit and loss, if the increase in fair value of the instrument can be
objectively related to an event occurring after the impairment loss was recognised in profit and loss.
2.18 Stocks
Stocks are valued at the lower of cost (determined on a weighted average basis) and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business less estimated costs necessary to make the sale.
Allowance is made for deteriorated, damaged, obsolete and slow-moving stocks.

2.19 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits, and short-term, highly liquid investments that are readily convertible
to known amounts of cash and which are subject to an insignificant risk of changes in values. These also include bank overdrafts that form
an integral part of the Group’s cash management.
2.20 Financial liabilities

Financial liabilities include trade and other amounts payable, which are normally settled on 30-90 day terms, and payables to subsidiaries,
associated companies, affiliated companies and interest-bearing loans and borrowings. Financial liabilities are recognised on the balance
sheet when, and only when the Group becomes a party to the contractual provisions of the financial instrument. Financial liabilities are initially
recognised at fair value of considerations received less directly attributable transaction costs and subsequently measured at amortised cost
using the effective interest method.
Subsequent to initial recognition, derivatives are measured at fair value. Other financial liabilities (except for financial guarantee) are measured
at amortised cost using the effective interest method.
For financial liabilities other than derivatives, gains and losses are recognised in profit or loss when the liabilities are derecognised, and
through the amortisation process. Any gains or losses arising from changes in fair value of derivatives are recognised in profit or loss. Net
gains or losses on derivatives include exchange differences.
A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by
another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange
or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective
carrying amounts is recognised in the profit or loss.
2.21 Financial guarantee

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs
because a specified debtor fails to make payment when due.
Financial guarantees are recognised initially at fair value. Subsequent to initial recognition, financial guarantees are recognised as income
in profit and loss over the period of the guarantee. If it is probable that the liability will be higher than the amount initially recognised less
amortisation, the liability is recorded at the higher amount with the difference charged to the profit and loss.
2.22 Borrowing costs

Borrowing costs are generally expensed as incurred. Borrowing costs are capitalised if they are directly attributable to the acquisition,
construction or production of a qualifying asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its
intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets
are ready for their intended use.

2.23 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) where, as a result of a past event, it is probable
that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow
of resources embodying economic benefits will be required to settle the obligation, the provision is reversed. If the effect of the time value
of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability.
Where discounting is used, the increase in the provision due to the passage of time is recognised as finance costs.
a) Provision for warranties

The Group and the Company provides free repair services and free replacement of major components of its products for a period of
twelve months after sales.
The costs of the warranty obligation under which the Group and the Company agree to remedy defects in its products are accrued
at the time the related sales are recognised. Provision for warranty is accrued based on the estimated costs of fulfilling the total
obligation, including handling and transportation costs. The costs are estimated by management based on historical experience. The
assumptions used to estimate warranty accruals are reviewed periodically in light of actual experience.
b) Provision for restoration costs

In accordance with the lease agreements, the Group and the Company has an obligation to restore the retail outlets, warehouses
and leasehold properties to their state and condition as at the commencement of the lease and to the satisfaction of the landlord.
A provision is recognised at the balance sheet date for expected restoration costs based on past experience of sale outlets and
warehouses closure.
2.24 Employee benefits
a) Defined contribution plans

The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. In
particular, the Singapore companies in the Group make contributions to the Central Provident Fund scheme in Singapore, a defined
contribution pension scheme. Contributions to national pension schemes are recognised as an expense in the period in which the
related service is performed.
b) Employee leave entitlement

Employee entitlements to annual leave are recognised as a liability when they accrue to employees. The estimated liability for leave
is recognised for services rendered by employees up to balance sheet date.

2.24 Employee benefits (cont’d)
c) Defined benefit plans

The cost of providing defined benefit plan is determined using actuarial valuation method. Actuarial gains and losses are recognised
as income or expense when the cumulative unrecognised actuarial gains or losses for each plan exceed 10% of the defined benefit
obligation and the fair value of the plan assets. These gains or losses are recognised over the expected average remaining working
lives of the employees participating in the plans.
d) Employee share option plans

Employees of the Group receive remuneration in the form of share options as consideration for services rendered (‘equity-settled
transactions’).
The cost of equity-settled transactions with employees is measured by reference to the fair value at the date on which the share
options are granted. In valuing the share options, no account is taken of any performance conditions, other than conditions linked to
the price of the shares of the Company (‘market conditions’), if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in the employee share option reserve,
over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees
become fully entitled to the award (‘the vesting date’). The cumulative expenses recognised for equity-settled transactions at each
reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the
number of equity instruments that will ultimately vest. The charge or credit to profit and loss for a period represents the movement
in cumulative expense recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market
condition, which are treated as vested irrespective of whether or not the market condition is satisfied, provided that all other
performance conditions are satisfied. The employee share option reserve is transferred to retained earnings upon expiry of the share
options. When the options are exercised, the employee share option reserve is transferred to share capital if new shares are issued,
or to treasury shares if the options are satisfied by the reissuance of treasury shares.

2.25 Discontinued operation

A component of the Group is classified as a ‘discontinued operation’ when the criteria to be classified as held for sale have been met or it has
been disposed of and such a component represents a separate major line of business or geographical area of operations or is part of a single
co-ordinated major line of business or geographical area of operations. A component is deemed to be held for sale if its carrying amounts will
be recovered principally through a sale transaction rather than through continuing use.
Upon classification as held for sale, non-current assets and disposal groups are not depreciated and are measured at the lower of carrying
amount and fair value less costs to sell. Any differences are recognised in profit and loss.
Prior period comparatives are re-presented so that the disclosures relate to all operations that have been discontinued by the balance sheet
date of the current financial year.
2.26 Revenue
Revenue is recognised to the extent that probable the economic benefits will flow to the Group and the revenue can be reliably measured.
Revenue is measured at the fair value of consideration received or receivable.
a) Sale of goods
Revenue is recognised upon the transfer of significant risk and rewards of ownership of the goods to the customer, which generally
coincides with delivery and acceptance of the goods sold. Revenue is not recognised to the extent where there are significant
uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.
b) Franchise fees
Franchise fees are recognised upon the execution of the Master Franchise Agreements.
c) Royalty income
Royalty income is recognised upon the sale of goods by franchise outlets and the amount is determined based on a certain percentage
of net sales in accordance with the terms of the Master Franchise Agreements.
d) Interest income
Interest income is recognised as interest accrues (using the effective interest method) unless collectibility is in doubt.
e) Dividend income
Dividend income is recognised when the Group’s right to receive payment is established.
f) Rental income
Rental income is accounted for on a straight-line basis over the lease terms. The aggregate costs of incentives provided to lessees
are recognised as a reduction of rental income over the lease terms on a straight-line basis.

2.27 Income taxes
a) Current tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid
to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted
by the balance sheet date.
Current taxes are recognised in profit and loss except that tax relating to items recognised outside profit or loss, either in other
comprehensive income or directly in equity.
b) Deferred tax
Deferred income tax is provided using the liability method on temporary differences at the balance sheet date between the tax bases
of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all temporary differences, except:
– where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit
or loss; and
– in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused
tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and
the carry forward of unused tax credits and unused tax losses can be utilised except:
– where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and
– in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, deferred income tax assets are recognised only to the extent that it is probable that the temporary differences will
reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
Deferred income tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are
recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax
arising from a business combination is adjusted against goodwill on acquisition.

2.27 Income taxes (cont’d)
c) Sales tax
Revenues, expenses and assets are recognised net of the amount of sales tax except:
• Where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case
the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
• Receivables and payables that are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in
the balance sheet.
2.28 Segments
For management purposes, the Group is organised on a world-wide basis into two major operating businesses. The divisions are the basis on
which the Group reports its primary segment information.
Segment revenue, expenses and results include transfers between business segments and between geographical segments. Such transfers
are accounted for on an arm’s length basis.
2.29 Share capital and share issuance expenses

Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental costs directly attributable to the issuance
of ordinary shares are deducted against share capital.
2.30 Government grants

Grants and subsidies from government are recognised at their fair value where there is a reasonable assurance that the grant/subsidy will be
received and all attaching conditions will be complied with. When the grant or subsidy relates to an expense item, it is recognised as income
over the periods necessary to match them on a systematic basis to the costs which it is intended to compensate. Where the grant relates to
an asset, the fair value is credited to a deferred income account and is released to profit and loss over the expected useful life of the relevant
asset by equal annual installments.
2.31 Cumulative preference shares

Cumulative preference shares that exhibit the characteristics of a liability are recognised as a liability and accordingly, the corresponding
dividends on these preference shares are charged as an interest expense in profit and loss.
Preference shares of a joint venture of the Group that have the potential to become redeemable upon occurrence of certain events as
stipulated in the partnership agreement are recorded as a liability.

2.32 Contingencies
A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group.
Contingent liabilities and assets are not recognised on the balance sheet of the Group.
2.33 Treasury shares

When shares recognised as equity are reacquired, the amount of consideration paid is recognised directly in equity. Reacquired shares are
classified as treasury shares and presented as a deduction from total equity. No gain or loss is recognised in profit or loss on the purchase,
sale, issue or cancellation of treasury shares.
3. Share capital and treasury shares
a) Share capital
Group and Company

2009 2008
$’000 $’000
Issued and fully paid:
At beginning of year 541,837,989 (2008: 541,837,989) ordinary shares 42,574 42,574
Exercise of options under the OSIM Share Option Scheme:

135,000 (2008: Nil) ordinary shares at $0.178 per share 24 –
135,000 (2008: Nil) ordinary shares at $0.236 per share 32 –
Issuance of 120,408,442 (2008: Nil) rights shares 6,622 –
At end of year 662,516,431 (2008: 541,837,989) ordinary shares 49,252 42,574
The holders of ordinary shares (except treasury shares) are entitled to receive dividends as and when declared by the Company. All ordinary shares
carry one vote per share without restriction. The ordinary shares have no par value.
The Company has one employee share option scheme (Note 31) under which options to subscribe for the Company’s ordinary shares have been
granted to employees.

3. Share capital and treasury shares (cont’d)

b) Treasury shares
Group and
Company
2009
$’000
Issued and fully paid:
Purchase of treasury shares and at end of year 4,538,000 ordinary shares (2,289)
Treasury shares relate to ordinary shares of the Company that is held by the Company.
The Company acquired 4,538,000 shares in the Company through purchases on the Singapore Exchange Limited (“SGX”) during the financial year.
The total amount paid to acquire the shares was $2,289,000 and this was presented as a component within shareholders’ equity.
4. Enterprise expansion funds

Up to financial year ended 31 December 2002, in accordance with the relevant laws and regulations of the People’s Republic of China (“PRC”),
OSIM International Trading (Shanghai) Co., Ltd and OSIM (China) Co., Ltd (“the subsidiaries”) appropriated tax refunds from accumulated profits
to enterprise expansion fund. The enterprise expansion fund may be used to increase the registered capital of the subsidiaries, subject to approval
from the PRC authorities. The enterprise expansion fund is not available for dividend distribution to the shareholders.
5. Capital reserves
a) China statutory reserve
In accordance with the relevant laws and regulations of the PRC, OSIM International Trading (Shanghai) Co., Ltd and OSIM (China) Co.,
Ltd (“the subsidiaries”) are required to set up a statutory reserve by way of appropriations from its statutory net profit. The subsidiaries
are required to allocate at least 10% of its net profit to the statutory reserve until the balance of the statutory reserve reaches 50% of its
registered capital. The statutory reserve may be used to offset accumulated losses or increase the registered capital of the subsidiary, subject
to approval from the PRC authorities. The statutory reserve is not available for dividend distribution to the shareholders.
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
At beginning of year 636 636 – –

Appropriation of profits during the year 1,004 – – –
At end of year 1,640 636 – –

5. Capital reserves (cont’d)

b) Employees share option reserve
Included in the capital reserves is the employees share option reserve. Employees share option reserve represents the equity-settled share
options granted to employees. The reserve is made up of the cumulative value of services received from employees recorded over the
vesting period commencing from the grant date of equity-settled share options, and is reduced by the expiry, lapse and exercise of the share
option.
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
At beginning of year 748 748 748 748

Lapse of employees share options (48) – (48) –
At end of year 700 748 700 748
Total capital reserves 2,340 1,384 700 748
6. Hedging reserve
Hedging reserve records the portion of the fair value changes on derivative financial instruments designated as hedging instruments in cash flow
hedges that is determined to be an effective hedge.
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
At beginning of year – (12) – (12)

Net change – 12 – 12
At end of year – – – –
Net change arises from:

• Net gain on fair value changes during the year – 87 – 87
• Removed from equity and included in profit and loss under other
operating expenses – (75) – (75)
At end of year – 12 – 12

7. Warrant reserve
In 2008, the Company issued 135,459,476 warrants on the basis of one warrant for every four existing ordinary shares held by the shareholders of
the Company at an issue price of $0.09 for each warrant. Each warrant carries the right to subscribe for one new ordinary share in the capital of the
Company at an exercise price of $0.35.
On 20 March 2009, the Company announced 2,083,351 additional warrants to be issued and alloted to the warrant holders as a consequence of the
issuance of Rights Shares. The exercise price of the warrant for one new ordinary share in the capital of the Company remained at $0.35.
The value ascribed to the warrants less issue expenses is credited as a reserve in equity under warrant reserve and an appropriate amount is
transferred to the share capital account as and when the warrants are exercised.
The warrants issued by the Company do not entitle the holders of the warrants, by virtue of such holdings, to any right to participate in any share
issue of any other subsidiaries.
During the financial year, no warrants were exercised and converted to ordinary shares. The number of warrants outstanding at the end of the
financial year was 137,542,827 (2008: 135,459,476).
The proceeds from the issuance of warrants have been fully utilised for working capital purposes as at the balance sheet date.
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
At beginning of year 12,191 – 12,191 –

Issuance of warrants – 12,191 – 12,191
At end of year 12,191 12,191 12,191 12,191
8. Revaluation reserve
The revaluation reserve records the adjustment to the fair value of subsidiaries’ identifiable net assets at the date of acquisitions attributable to
previously held ownership interests.
Group
2009 2008
$’000 $’000
At beginning and end of year 5,237 5,237

9. Premium on purchase of minority interests’ shares

Group
2009 2008
$’000 $’000
At beginning of year (7,875) (7,720)
Premium arising from purchase of minority interests’ shares (Note 13c) 13 –
Premium arising from deemed increase in shareholding in a subsidiary (Note 13g) – (155)
At end of year (7,862) (7,875)
10. Foreign currency translation reserve

The foreign currency translation reserve records exchange differences arising from the translation of the financial statements of foreign operations
whose functional currencies are different from that of the Group’s presentation currency.
Group
2009 2008
$’000 $’000
At beginning of year (25,617) (23,355)
Net effect of exchange differences arising from translation of financial statements of foreign operations (513) (2,276)
Realisation of reserve upon disposal of a subsidiary (Note 13h) – 14
At end of year (26,130) (25,617)
11. Fixed assets

Freehold Freehold Leasehold Plant and Motor Shop Furniture Office
Group land buildings buildings machinery Computers vehicles renovations and fittings equipment Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Cost
As at 1 January 2008 3,246 1,400 5,738 9,936 8,658 3,360 30,595 20,572 3,473 86,978
Additions – – – 88 457 144 6,878 1,104 27 8,698
Disposals – – – (2) (74) (482) (5,255) (1,668) (84) (7,565)
(Note 13h) – – – – (14) – (629) (37) (2) (682)
Net exchange differences – – 12 (3) (81) 60 190 (1,495) (409) (1,726)
As at 31 December 2008
and 1 January 2009 3,246 1,400 5,750 10,019 8,946 3,082 31,779 18,476 3,005 85,703
Additions – – 110 79 483 2 4,397 1,204 10 6,285
Disposals – – – (1) (3) (565) (3,130) (3,021) (47) (6,767)
Transfer to properties
held-for-sale (Note 23) – – (3,253) – – – – – – (3,253)
Net exchange differences – – (5) 6 5 (13) (105) 1,564 (31) 1,421
As at 31 December 2009 3,246 1,400 2,602 10,103 9,431 2,506 32,941 18,223 2,937 83,389

11. Fixed assets (cont’d)

Freehold Freehold Leasehold Plant and Motor Shop Furniture Office
Group (cont’d) land buildings buildings machinery Computers vehicles renovations and fittings equipment Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Accumulated depreciation
and impairment
As at 1 January 2008 30 108 1,441 5,651 7,023 2,110 21,046 9,318 2,107 48,834
Depreciation charge
for the year – 29 138 1,119 764 381 7,250 2,792 270 12,743
Disposals – – – (2) (63) (468) (4,466) (1,063) (48) (6,110)
(Note 13h) – – – – (5) – (251) (29) (1) (286)
Impairment loss (Note 35) – – – – – – 1,490 54 – 1,544
Net exchange differences – (2) 4 (3) (73) 61 274 (611) (141) (491)
As at 31 December 2008
and 1 January 2009 30 135 1,583 6,765 7,646 2,084 25,343 10,461 2,187 56,234
Depreciation charge
for the year – 27 249 1,122 690 387 5,089 3,711 231 11,506
Disposals – – – (1) (3) (448) (2,994) (1,758) (29) (5,233)
Impairment loss (Note 35) – – 157 – – – 1,097 168 – 1,422
Transfer to properties
held-for-sale (Note 23) – – (485) – – – – – – (485)
Net exchange differences – – – 3 (12) (17) (333) 774 (25) 390
As at 31 December 2009 30 162 1,504 7,889 8,321 2,006 28,202 13,356 2,364 63,834
Net carrying amount

As at 31 December 2009 3,216 1,238 1,098 2,214 1,110 500 4,739 4,867 573 19,555
As at 31 December 2008 3,216 1,265 4,167 3,254 1,300 998 6,436 8,015 818 29,469

Leasehold Plant and Motor Shop Furniture Office

Company buildings machinery Computers vehicles renovations and fittings equipment Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Cost
As at 1 January 2008 2,230 9,733 2,646 1,549 5,401 3,657 813 26,029
Additions – – 36 15 545 69 4 669
Disposals – – – (112) (1,059) (5) – (1,176)
As at 31 December 2008 and
1 January 2009 2,230 9,733 2,682 1,452 4,887 3,721 817 25,522
Additions – – 34 1 765 106 3 909
Disposals – – – (565) (1,748) (879) – (3,192)
As at 31 December 2009 2,230 9,733 2,716 888 3,904 2,948 820 23,239
Accumulated depreciation and impairment

As at 1 January 2008 1,138 5,526 2,620 930 3,337 2,409 537 16,497
Depreciation charge for the year 67 1,059 52 177 1,449 273 73 3,150
Disposals – – – (112) (967) (2) – (1,081)
Impairment loss – – – – 988 38 – 1,026
As at 31 December 2008 and
1 January 2009 1,205 6,585 2,672 995 4,807 2,718 610 19,592
Depreciation charge for the year 67 1,059 28 176 219 294 72 1,915
Disposals – – – (448) (1,748) (533) – (2,729)
Impairment loss – – – – 503 5 – 508
As at 31 December 2009 1,272 7,644 2,700 723 3,781 2,484 682 19,286
Net carrying amount

As at 31 December 2009 958 2,089 16 165 123 464 138 3,953
As at 31 December 2008 1,025 3,148 10 457 80 1,003 207 5,930

Assets held under finance leases
As at 31 December 2009, the carrying amount of fixed assets held under finance leases are as follows:
Group
2009 2008
$’000 $’000
Motor vehicles 115 169
Plant and machinery – 47
Computers – 39
Shop renovations – 533
115 788
Assets pledged as security
In addition to assets held under finance leases, the Group’s freehold and leasehold land and buildings with carrying amounts of $4,454,000 (2008:
$7,447,000) are mortgaged to secure the Group’s bank loans (Notes 28 and 29).
Impairment of assets
Impairment loss on fixed assets was recognised in the following line item of the statement of comprehensive income as follows:
Group
2009 2008
$’000 $’000
Other operating expenses (Note 35) 1,422 1,544
The impairment loss recognised by the Group largely represents the write down of certain fixed assets of the Group to their recoverable amounts as
certain retail outlets were loss-making or were intended to be closed down and the write-down of the carrying value of the leasehold building to the
lower of the carrying value and face value less costs to sell. The recoverable amounts were determined on the basis of value-in-use calculation at the
cash-generating units and the selling price under the provisional agreement respectively.
Transfer to properties held-for-sale
In November 2009, one of the subsidiaries entered into a provisional agreement with an external party to sell a leasehold building within the next
twelve months. Accordingly, the Group transferred the carrying value of the leasehold building to properties held-for-sale as at year-end.

12. Investment property
Group and Company

2009 2008
$’000 $’000
Cost
At beginning of year 821 821
Transfer to properties held-for-sale (Note 23) (821) –
At end of year – 821
Accumulated depreciation and impairment

At beginning of year 276 252
Depreciation for the year 23 24
Transfer to properties held-for-sale (Note 23) (299) –
At end of year – 276
Net carrying amount – 545
Transfer to properties held-for-sale
In December 2009, the Company entered into a provisional agreement with an external party to sell the investment property within the next twelve
months. Accordingly, the Group transferred the carrying value of the investment property to properties held-for-sale as at year-end.
13. Subsidiaries
a) These comprise:
Company
2009 2008
$’000 $’000
Unquoted equity shares, at cost 87,810 87,789

13. Subsidiaries (cont’d)
b) Details of subsidiaries are as follows:

Country of Percentage of Cost of
Name of company Principal activities incorporation equity held investment
2009 2008 2009 2008
% % $’000 $’000
Held by the Company
OSIM International Trading Import, trading and People’s Republic of 100 100 295 295
(Shanghai) Co., Ltd # distribution of healthy China
lifestyle products
OSIM (M) Sdn Bhd # Sale and marketing of Malaysia 87.57 87.57 9,640 9,640
healthy lifestyle products
OSIM (HK) Company Sale and marketing of Hong Kong 100 100 17,700 17,700
Limited # healthy lifestyle products
OSIM (Taiwan) Co., Ltd # Sale and marketing of Taiwan 92.50 92.50 7,156 7,156
Nutrition Focus (USA) Dormant British Virgin Islands – 100 – –

Inc ++
Global Active Limited # Specialty retailer and Singapore 82.84 82.77 42,011 41,990
distributor of nutraceutical
products
OSIM (China) Co., Ltd # Sale and marketing of People’s Republic of 100 100 11,008 11,008
healthy lifestyle products China
87,810 87,789

b) Details of subsidiaries are as follows (cont’d):

Country of Percentage of
Name of company Principal activities incorporation equity held
2009 2008
% %
Held through Global Active Limited
Nutri Active Pte Ltd # Wholesale of nutraceutical Singapore 82.84** 82.77**

products and supplements
Victoria House Pte Ltd # Retailing of nutraceutical Singapore 82.84** 82.77**

VHE China Limited ## Dormant Hong Kong – 82.77**
RichLife (Shanghai) Co., Wholesale and retailing of People’s Republic of 82.84** 82.77**
Ltd (formerly known as VHE nutraceutical products and China
Shanghai Limited)^ supplements
RichLife (Beijing) Co., Wholesale and retailing of People’s Republic of 82.84** –

Ltd ^^ nutraceutical products and China
supplements
RichLife (Guangzhou) Co., Wholesale and retailing of People’s Republic of 82.84** –

Ltd ^^ nutraceutical products and China
supplements
Nutrition Imports Pty Ltd+ Wholesale of nutraceutical Australia 82.84** 82.77**

Green Valley Nutrition Pty Retailing of nutraceutical Australia 82.84** 82.77**

Ltd + products and supplements
USB Inc ## Retailing of nutraceutical Guam – 82.77**

Held through Victoria House Pte Ltd
Victoria House Sdn Retailing of nutraceutical Malaysia 70.41** 70.35**

Bhd # products and supplements
Nutri Active Sdn Bhd # Wholesale of nutraceutical Malaysia 70.41** 70.35**


b) Details of subsidiaries are as follows (cont’d):

Country of Percentage of
Name of company Principal activities incorporation equity held
2009 2008
% %
Held through OSIM (China) Co., Ltd
OSIM (Shenzhen) Trading Sale and marketing of People’s Republic of 100** 100**
Co., Ltd * healthy lifestyle products China
OSIM (Guangzhou) Trading Sale and marketing of People’s Republic of 100** 100**
Co., Ltd & healthy lifestyle products China
OSIM (Beijing) Trading Co., Dormant People’s Republic of 100** 100**

Ltd && China
OSIM (Hangzhou) Trading Dormant People’s Republic of 100** –

Co., Ltd ^^ China
# Audited by member firms of Ernst & Young Global, in the respective countries.
+ Audited by Banks Group Assurance Pty Ltd, Chartered Accountants, Australia.
^ Audited by Shanghai Wan Long, Certified Public Accountants Co., Ltd, People’s Republic of China.
* Audited by Shenzhen Lianjie Great Wall Certified Public Accountants Co., Ltd, People’s Republic of China.
& Audited by Guangdong Better Certified Public Accountants Co., Ltd, People’s Republic of China.
&& Audited by Beijing Everhonest Certified Public Accountants Co., Ltd, People’s Republic of China.
^^ Not required to be audited under the laws of its country of incorporation.
** Group’s effective shareholdings.
## Disposed during the year.
++ Liquidated during the year.
c) Acquisition of additional interests in subsidiaries in financial year ended 31 December 2009
• Global Active Limited (“GAL”)

During the year, the Company acquired additional shares of GAL totalling 0.07% from the minority shareholders. The cash
consideration for acquiring the additional interests was $21,000 and this resulted in a decrease in premium on purchase of minority
interests’ shares of $13,000. As at 31 December 2009, the total percentage of equity held by the Company in GAL was 82.84%.

d) Incorporation of new subsidiaries

During the year, the Company, through OSIM (China) Co., Ltd, set up a subsidiary, OSIM (Hangzhou) Trading Co., Ltd. The cost of investment
was $103,000. The subsidiary is dormant since the date of its incorporation.
During the year, the Company, through GAL, set up two new subsidiaries, RichLife (Beijing) Co., Ltd and RichLife (Guangzhou) Co., Ltd.
The cost of investments were $277,000 and $794,000 respectively. The principal activities of the subsidiaries are wholesale and retailing of
nutraceutical products and supplements.
e) Liquidation of a subsidiary
During the year, Nutrition Focus (USA) Inc was liquidated.
The management believes that the disclosure of the revenue and profit of the Group had the liquidation taken place at the beginning of the
year, would not provide meaningful information as the results of this subsidiary is insignificant to the Group.
f) Disposal of subsidiaries of GAL
• VHE China Limited

In 2009, GAL disposed of VHE China Limited, a dormant subsidiary company, for a total consideration of $1. This resulted in a
gain of $9,000 including translation gain. The management believes that the disclosure of the revenue and profit of the Group
had the disposal taken place at the beginning of the year, would not provide meaningful information as this subsidiary company is
insignificant to the Group.
• USB Inc
In 2009, GAL disposed of USB Inc. for a total consideration of $1. This resulted in a gain of $526,000 including translation gain. The
management believes that the disclosure of the revenue and profit of the Group had the disposal taken place at the beginning of the
year, would not provide meaningful information as this subsidiary company is insignificant to the Group.
g) Acquisition of additional interests in subsidiaries in financial year ended 31 December 2008
• OSIM (M) Sdn Bhd

In 2008, the Company and a minority shareholder subscribed for additional issued and paid up capital in OSIM (M) Sdn Bhd,
amounting to $2,286,000 and $135,000 respectively. This resulted in a deemed increase in premium on purchase of minority
interests’ shares of $155,000. As at 31 December 2008, the total percentage of equity held increased from 80% to 87.57%.
• OSIM (HK) Company Limited

In 2008, the Company increased its investment in OSIM (HK) Company Limited through capitalisation of amount due from the
subsidiary of $5,630,000. As at 31 December 2008, the total percentage of equity held remained at 100%.

h) Disposal of a subsidiary
In 2008, OSIM International (Australia) Pty Ltd was disposed for a consideration of $1.
The effect on the Group’s cash flows arising from the disposal of the subsidiary is shown in the statement of cash flows as a single item. The
net identifiable assets disposed are set out below:
Disposal
2008
$’000
Deferred tax assets 369

Fixed assets (Note 11) 396
Trade and other debtors 207
Stocks 134
Cash and bank balances 175
1,281
Trade and other creditors (465)
Minority interest (327)
Net identifiable assets disposed 489
Transfer from shareholders’ equity
– currency translation differences (Note 10) (14)
475
Loss on disposal of a subsidiary (Note 35) (475)
Purchase consideration received, satisfied in cash –
Less: Cash and cash equivalents of subsidiary disposed (175)
Net cash outflow on disposal of a subsidiary (175)
The management believed that the disclosure of the revenue and profit of the Group had the disposal taken place at the beginning of 2008,
would not provide meaningful information as the results of this subsidiary was insignificant to the Group.

14. Associated companies and a joint venture
a) These comprise:
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Unquoted equity shares, at cost 146,815 146,815 146,327 146,327

Share of post-acquisition losses of associated companies
and a joint venture (25,829) (26,521) – –
Dividends received from associated companies (12,226) (10,504) – –
Share of impairment loss of a joint venture (77,314) (77,314) – –
Impairment losses on associated companies and a joint venture – – (145,414) (145,414)
31,446 32,476 913 913
Translation reserve (18,449) (18,098) – –
Losses on deemed changes in shareholdings in a joint venture (1,151) (1,151) – –
11,846 13,227 913 913

14. Associated companies and a joint venture (cont’d)
b) Details of associated companies are as follows:

Country of
incorporation and Percentage of Cost of
Name of company Principal activities place of business equity held investment
2009 2008 2009 2008
% % $’000 $’000
Held by the Company
Daito-OSIM Healthcare Manufacturer and exporter People’s Republic of 30 30 346 346

(Suzhou) Co., Ltd * of healthy lifestyle products China
Daito-OSIM (Thailand) Co., Manufacturer and exporter Kingdom of Thailand 30 30 567 567
Ltd ^ of healthy lifestyle products
OSIM (Thai) Co., Ltd + Sale and marketing of Kingdom of Thailand 49 49 116 116
1,029 1,029
* Audited by Welsen Certified Public Accountants Co., Ltd, People’s Republic of China.
^ Audited by Me Bless Audit Office Co., Ltd, Certified Public Accountants, Kingdom of Thailand.
+ Audited by Sunantanawat Karnbanchee, Certified Public Accountants, Kingdom of Thailand.
The Group has not recognised losses relating to OSIM (Thai) Co., Ltd where its share of losses exceeds the Group’s interest in this associated
company. The Group’s share of unrecognised losses at the balance sheet date was $311,000 (2008: $88,000). The Group has no obligation
in respect of these losses.

c) The summarised financial information of the associated companies, not adjusted for the proportion of ownership interest held by the Group,
is as follows:
Associated companies 2009 2008

$’000 $’000
Assets and liabilities:
Current assets 53,609 55,818
Non-current assets 11,584 13,126
Total assets 65,193 68,944
Current and total liabilities (28,119) (26,652)
Results:
Revenue 136,540 150,237
Expenses (134,930) (145,372)
Profit for the year 1,610 4,865
d) Details of a joint venture are as follows:

Country of Percentage of Cost of
Name of company Principal activities incorporation equity held investment
2009 2008 2009 2008
% % $’000 $’000
Held by the Company
OSIM-Brookstone Holdings, Innovative product United States of 55.56* 55.56* 145,298 145,298
Inc (“OBH”)# development and sales of America
specialty lifestyle products
# Audited by member firm of Ernst & Young Global

* Based on voting rights

By virtue of a partnership agreement, the Company only has joint control, together with the rest of the joint-venture partners, over the financial
and operating policies of OBH.
Upon the occurrence of certain events as stipulated in the partnership agreement, the management of OBH will be entitled to receive
common shares of OBH. This would have the effect of diluting the Group’s interest in the joint venture.

d) Details of a joint venture are as follows (cont’d):

At the end of the financial year, the Group’s percentage of equity held in OBH was 55.56% (2008: 55.56%).
The Group has not recognised losses relating to OBH where its share of losses exceeds the Group’s interest in this joint venture. The Group’s
share of unrecognised losses at the balance sheet date was $32,447,000 (2008: $16,409,000). The Group has no obligation in respect of
these losses.
e) The aggregate amounts of each of the current assets, non-current assets, current liabilities, non-current liabilities, income and expenses
related to the Group’s interests in the jointly-controlled entity are as follows:
Joint venture 2009 2008

$’000 $’000
Assets and liabilities:
Current assets 111,242 100,647
Non-current assets 208,755 227,265
Total assets 319,997 327,912
Current liabilities (52,469) (47,043)

Non-current liabilities (326,423) (328,059)
Total liabilities (378,892) (375,102)
Results:
Revenue 347,055 389,341
Expenses (107,145) (210,425)
Loss for the year (16,478) (130,436)

15. Intangible assets
Franchise
rights and Distribution Club Product
Group trademarks rights membership development Total
$’000 $’000 $’000 $’000 $’000
Cost
As at 1 January 2008 14,834 2,055 123 2,239 19,251
Additions during the year 628 44 – – 672
Net exchange differences (898) (38) – – (936)
As at 31 December 2008 and 1 January 2009 14,564 2,061 123 2,239 18,987
Additions during the year 264 15 – – 279
Transfer to key management personnel – – (123) – (123)
Write-off (27) – – – (27)
Net exchange differences 53 20 – – 73
As at 31 December 2009 14,854 2,096 – 2,239 19,189
Accumulated amortisation
As at 1 January 2008 2,068 1,470 45 746 4,329
Amortisation for the year 738 182 6 746 1,672
Net exchange differences (856) (25) – – (881)
As at 31 December 2008 and 1 January 2009 1,950 1,627 51 1,492 5,120
Amortisation for the year 767 184 6 747 1,704
Transfer to key management personnel – – (57) – (57)
Write off (13) – – – (13)
Net exchange differences 15 11 – – 26

As at 31 December 2009 2,719 1,822 – 2,239 6,780
Net carrying amount

As at 31 December 2009 12,135 274 – – 12,409
As at 31 December 2008 12,614 434 72 747 13,867
Average remaining amortisation period (years) - 2009 15 15 – –
Average remaining amortisation period (years) - 2008 16 16 13 1

15. Intangible assets (cont’d)

Amortisation expenses of intangible assets (excluding goodwill on consolidation) is included in the following line item in the statement of
comprehensive income:
Group
2009 2008
$’000 $’000
Amortisation expenses 1,704 1,672
Goodwill on consolidation
Group 2009 2008
$’000 $’000
Cost:
At beginning and end of year 23,836 23,836
Accumulated impairment:
At beginning of year 3,689 3,689
Impairment loss (Note 35) 9,604 –
At end of year 13,293 3,689
Net carrying amount of goodwill on consolidation 10,543 20,147
Total intangible assets 22,952 34,014

Club Product Total

Company membership development
$’000 $’000 $’000
Cost:
As at 1 January and 31 December 2008 and 1 January 2009 123 2,239 2,362
Transfer to key management personnel * (123) – (123)
As at 31 December 2009 – 2,239 2,239
Accumulated amortisation
As at January 2008 45 746 791
Amortisation for the year 6 746 752
As at 31 December 2008 and 1 January 2009 51 1,492 1,543
Amortisation for the year 6 747 753
Transfer to key management personnel * (57) – (57)
As at 31 December 2009 – 2,239 2,239
Net carrying amount

As at 31 December 2009 – – –
As at 31 December 2008 72 747 819
* In 2009, the club membership was transferred to a key management personnel for $Nil consideration as part of the compensation for the
key management personnel. The estimated fair value of the club membership as at the date of transfer was $205,000.
Impairment testing of goodwill
Goodwill acquired through business combinations has been allocated to three individual cash-generating units (“CGUs”) for impairment testing as
follows:
• Singapore segment;
• Australia segment; and
• Malaysia segment

Impairment testing of goodwill (cont’d)
Carrying amount of goodwill allocated to each of the Group’s CGU is as follows:
Goodwill on consolidation
2009 2008
$’000 $’000
Singapore segment 10,373 10,373
Australia segment – 9,604
Malaysia segment 170 170
10,543 20,147

The recoverable amount of a CGU is determined based on value-in-use calculation, using cash flow projections based on financial budgets approved
by management covering a five year period. The discount rate applied to the cash flow projections is 10.20% (2008: 5.42% to 10%) per annum.
Impairment loss recognised
During the year, an impairment loss was recognised to write-down the carrying amount of goodwill attributable to the Australia segment. The
impairment loss of $9,604,000 (2008: $Nil) has been recognised in the statement of comprehensive income under the line item “other operating
expenses”.

16. Long-term investment

Group and Company
2009 2008
$’000 $’000
Available-for-sale
Unquoted equity shares, at cost 930 930
Unquoted shares are denominated in Japanese Yen. Unquoted shares stated at cost have no market prices and the fair value cannot be reliably
measured using valuation techniques.
17. Long-term receivables

Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Long-term deposits (Note 21) 7,596 8,627 1,357 1,425
Long-term deposits relate to deposits placed for the lease of retail outlets and building.
18. Loan to associated company

Loan to associated company is unsecured, interest-free and repayable upon demand. Loan to associated company is to be settled in cash.
19. Stocks
Group Company
2009 2008 2009 2008
Balance sheet $’000 $’000 $’000 $’000
Finished goods 55,806 55,598 6,756 9,387

Goods in transit 1,795 7,656 706 763
Total stocks at lower of cost and net realisable value 57,601 63,254 7,462 10,150

19. Stocks (cont’d)

Group Company
2009 2008 2009 2008
Statement of comprehensive income: $’000 $’000 $’000 $’000
Inventories recognised as an expense, being cost of sales 177,439 172,910 102,585 102,260
Inclusive of the following charge/(credit):
– Inventories written-down 1,905 412 257 –
– Reversal of write-down of inventories – (2,023) – (824)
The reversal of write-down of inventories was made when the related inventories were sold above their carrying amounts.
20. Trade debtors

Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Trade debtors 35,296 25,446 6,056 6,681

Allowance for doubtful debts (2,726) (2,194) (2,608) (1,111)
32,570 23,252 3,448 5,570
Trade debtors
Trade debtors are non-interest bearing and are generally on 30 to 90 day terms. They are recognised at their original invoice amounts which
represents their fair values on initial recognition.
At the balance sheet date, trade receivables arising from export sales amounting to $260,000 (2008: $643,000) are arranged to be settled via letter
of credits issued by reputable banks in countries where the customers are based.

20. Trade debtors (cont’d)
Receivables that are past due but not impaired
The Group has trade receivables amounting to $3,080,000 (2008: $3,759,000) that are past due at the balance sheet date but not impaired. These
receivables are unsecured and the analysis of their aging at the balance sheet date is as follows:
Group
2009 2008
$’000 $’000
Trade debtors past due:
Lesser than 30 days 2,480 2,460
30-60 days 326 120
61-90 days 110 118
91-120 days 69 597
More than 120 days 95 464
3,080 3,759
Receivables that are impaired
The Group’s trade receivables that are impaired at the balance sheet date and the movement of the allowance account used to record the impairment
is as follows:
Group
Individually impaired
2009 2008
$’000 $’000
Trade debtors - nominal amounts 2,726 2,194

Less: Allowance for impairment (2,726) (2,194)
– –
Movement in allowance account:
At 1 January 2,194 1,193
Charge for the year 2,086 1,024
Write back (537) (26)
Written off (1,017) –
Exchange differences – 3
At 31 December 2,726 2,194
Trade receivables that are individually determined to be impaired at the balance sheet date relate to debtors that are in significant financial difficulties
and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

20. Trade debtors (cont’d)
Allowance for doubtful debts
For the year ended 31 December 2009, an impairment loss of $2,086,000 (2008: $1,024,000) is recognised in the “other operating expenses” in
the statement of comprehensive income subsequent to a debt recovery assessment performed on trade debtors as at 31 December 2009.
21. Other debtors, deposits and prepaid operating expenses

Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Deposits 2,729 2,944 69 48

Advances to employees 186 113 – –
Other debtors 2,558 1,608 214 235
Income tax recoverable 394 1,090 – –
Prepaid operating expenses 2,207 1,705 930 854
8,074 7,460 1,213 1,137
Other debtors, deposits and prepaid operating expenses due:
Within 12 months 8,074 7,460 1,213 1,137
After 12 months (Note 17) 7,596 8,627 1,357 1,425
15,670 16,087 2,570 2,562
For the year ended 31 December 2009, an impairment loss of $86,000 (2008: $531,000) is recognised in the “other operating expenses” in the
statement of comprehensive income subsequent to a debt recovery assessment performed on other debtors as at 31 December 2009.
22. Due from/(to) subsidiaries/affiliated companies/associated companies/a joint venture
These amounts are unsecured, interest free, repayable upon demand and are to be settled in cash.

23. Properties held-for-sale

Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Cost
At beginning of the year – – – –
Transfer from fixed assets (Note 11) 3,253 – – –
Transfer from investment property (Note 12) 821 – 821 –
At end of the year 4,074 – 821 –
Accumulated depreciation and amortisation

At beginning of the year – – – –
Transfer from fixed assets (Note 11) 485 – – –
Transfer from investment property (Note 12) 299 – 299 –
At end of the year 784 – 299 –
Net carrying amount 3,290 – 522 –
Assets pledged as security
As at 31 December 2009, the Group’s properties held-for-sale with carrying amount of $2,768,000 is mortgaged to secure the Group’s bank loans
(Note 29).
24. Cash and cash equivalents

Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Cash and bank balances 33,913 21,439 11,687 7,193

Fixed deposits 29,321 4,854 15,500 4,500
Bank overdrafts – (12) – –
Cash and cash equivalents in the consolidated cash flow statement 63,234 26,281 27,187 11,693

24. Cash and cash equivalents (cont’d)
Cash at banks earns interest at floating rate on daily bank deposit rates. Fixed deposits are made for varying period between one day and three
months depending on the immediate cash requirements of the Group, and earn interests at the respective fixed deposit rates. The weighted effective
interest rate of fixed deposits range from 0.11% to 1.57% (2008: 0.03% to 1.95%) per annum.
Fixed deposits amounting to $264,000 (2008: $291,000) are pledged as collateral for bank loan (Note 28) and guarantee for purchases of stocks
by a subsidiary.
25. Trade creditors
Trade creditors are non-interest bearing and are normally settled on 30 to 90 day terms.
26. Other creditors and accruals
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
(Note 48)
Other creditors 9,113 9,277 2,859 2,569

Accrued operating expenses 9,189 9,787 1,718 2,149
Deposits received 5,884 3,606 1,234 979
Custom duties payable – 411 – –
Accrued payroll costs 9,885 4,965 4,132 410
Fair value of forward contracts (Note 46b) 32 19 32 19
Deferred revenue 1,484 1,649 – –
35,587 29,714 9,975 6,126
Other creditors are non-interest bearing and are normally settled on 30 to 90 day terms.
Deferred revenue relates to the consideration received from the sale of goods that is allocated to the reward points issued under the Groups “VIP
cards” programme. Deferred revenue is recognised in the statement of comprehensive income as revenue when the VIP points are redeemed in
exchange for free goods.

27. Provisions
Provision for Provision for

warranties restoration costs
(Note A) (Note B) Total
Group 2009 2008 2009 2008 2009 2008
$’000 $’000 $’000 $’000 $’000 $’000
At beginning of year 1,183 1,458 3,446 3,852 4,629 5,310

Provided during the year 326 307 355 265 681 572
Utilised during the year (117) (119) (166) (75) (283) (194)
Unused amounts reversed during the year (16) (468) (70) (428) (86) (896)
Net exchange differences (7) 5 496 (168) 489 (163)
At end of year 1,369 1,183 4,061 3,446 5,430 4,629
Provision for Provision for

warranties restoration costs
(Note A) (Note B) Total
Company 2009 2008 2009 2008 2009 2008
$’000 $’000 $’000 $’000 $’000 $’000
At beginning of year 498 453 2,350 2,395 2,848 2,848

Provided during the year 35 45 45 30 80 75
Utilised during the year – – (70) (75) (70) (75)
At end of year 533 498 2,325 2,350 2,858 2,848

27. Provisions (cont’d)
Note A Provision for warranties
The Group provides a maximum of two year warranty to its customers on certain of its products, during which faulty products are
repaired or replaced. The amount of the provision for warranty is estimated based on sales volumes and past experience of the level
of repairs and return. The estimation basis is reviewed on an ongoing basis and revised where appropriate.
As at 31 December 2009, the Group provided $1,369,000 (2008: $1,183,000) for expected warranty claims on merchandise sold
during the year. The provision is expected to be incurred in the next financial year.
The above provision has not been discounted as the effect of discounting is not significant.
Note B Provision for restoration costs
Provision for restoration costs of $4,061,000 (2008: $3,446,000) is the estimated costs of restoring leasehold premises, retail outlets
and warehouse, which are capitalised and included in the cost of fixed assets. The provision is expected to be incurred at the end of
the lease terms.
28. Short-term bank loans

Group
2009 2008
$’000 $’000
Secured bank loan – New Taiwan dollars 1,320 5,720
Unsecured bank loans – Ringgit Malaysia 2,302 1,660
3,622 7,380

The secured short-term bank loan is secured by fixed deposits amounting to $264,000 (2008: $291,000) and a freehold land and building of a
subsidiary (Note 11). This loan bears interest at the rates of 2.000% to 2.660% (2008: 2.450% to 3.287%) per annum and is repayable within the
next twelve months from the balance sheet date.
The unsecured short-term bank loans bear interest at the rates of 3.310% to 5.050% (2008: 6.000%) per annum and are repayable within the next
twelve months from the balance sheet date.

29. Bank loans
Effective
interest rate
per annum Maturities Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Bank loan A – Singapore dollars 4.13% 2010 2,115 2,199 – –

Bank loan B – Singapore dollars 3.48% 2010 20,000 40,000 20,000 40,000
Bank loan C – Ringgit Malaysia 6.74% 2011 761 1,159 – –
22,876 43,358 20,000 40,000
Due within 12 months (22,523) (20,469) (20,000) (20,000)
Due after 12 months 353 22,889 – 20,000
Bank loan A, taken up by a subsidiary, is repayable in 2010 (2008: monthly over a period of 25 years from the date of drawdown). This loan was
secured by the leasehold building of a subsidiary (Note 23). The terms of the bank loan were revised in January 2008 and bears interest at the rate
of 3.500% per annum for the first year, 4.125% per annum for the second year, and thereafter at 0.750% per annum above the lending bank’s
prevailing prime rate calculated on monthly rests basis.
During the year, the subsidiary granted an option to an external party to purchase the leasehold building and the sale is expected to be completed
within the next twelve months (Note 23). The pledge was subsequently discharged by the bank.
Bank loan B, taken up by the Company, is repayable half yearly over a period of 5 years from the date of drawdown. This is a syndicated loan
supported by corporate guarantees from fellow subsidiaries. The terms of this bank loan were revised in June 2009 and bears interest at SGD Swap
Offer Rate plus 2.000% (2008: 2.000%) per annum.
Bank loan C, taken up by a subsidiary, is repayable in 36 monthly installments commencing from 1 month after the full drawdown. This loan is
secured by a corporate guarantee from the Company and personal guarantee from a director of a subsidiary. The bank loan bears interest at the rate
of 6.000% per annum or 1.750% per annum over the 3 years effective cost of fund whichever is higher on monthly rests.

30. Obligations under finance leases
The Group has finance leases for motor vehicles, plant and machinery, computers and shop renovations (Note 11). Lease terms range from 1 year to
5 years and do not contain restrictions concerning dividends, additional debt or further leasing. These leases have varying terms of renewal, purchase
options and escalation clauses. The effective interest rates in the leases range from 2.80% to 8.50% (2008: 2.80% to 8.50%) per annum.
Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows:
Minimum Present
lease value of
Group Maturities payments Interest payments
$’000 $’000 $’000
2009
Not later than 1 year 2010 64 (5) 59
More than 1 year and not later than 5 years 2013 53 (4) 49
117 (9) 108
2008
Not later than 1 year 2009 381 (18) 363
More than 1 year and not later than 5 years 2013 106 (7) 99
487 (25) 462
31. Employee benefits
Employee benefits expense (including executive directors):
Group
2009 2008
$’000 $’000
Wages, salaries, bonuses and other costs 72,832 71,310

Central Provident Fund contributions 6,006 7,925
Pension costs (Note 31b) 50 7
78,888 79,242


31. Employee benefits (cont’d)
a) OSIM Share Option Scheme
Share options are granted to confirmed full time employees and directors of the Group who are not controlling shareholders. The options will
vest if the employee remains in service for one year period from the date of grant. The exercise price of the options is equal to the market
price of the shares on the date of grant. The contractual life of the options granted to executive directors and employees is ten years. There
are no cash settlement alternatives.
The following table illustrates the number and weighted average exercise prices (“WAEP”) of, and the movements in, share options during
the year:
No. WAEP No. WAEP
2009 2009 2008 2008
’000 $ ’000 $
Outstanding at beginning of year 4,582 0.62 4,582 0.62

Lapsed during the year (141) 0.92 – –
Exercised during the year 1 (270) 0.21 – –
Outstanding at end of year 2 4,171 0.74 4,582 0.62
Exercisable at end of year 4,171 0.74 4,582 0.62
1
The weighted average share price at the date of exercise for the options exercised was $0.21 (2008: $Nil).
2
The range of exercise prices for options outstanding at the end of the year was $0.178 to $0.917 (2008: $0.178 to $0.917). The
weighted average remaining contractual life for these options is 3.28 years (2008: 4.17 years).
The fair value of share options as at the date of grant is estimated by an external valuer using a Trinomial option pricing model, taking into
account the terms and conditions upon which the options were granted. The inputs to the model used are shown below:
2009 and 2008

Dividend yield (%) 22.00
Expected volatility (%) 34.00
Historical volatility (%) 34.00
Risk-free interest rate (%) 1.346 to 1.792
Expected life of option (years) 2 to 10
Weighted average share price ($) 1.34
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected
volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual
outcome. No other features of the option grant were incorporated into the measurement of fair value.

b) Pension benefits plan
This relates to the amount of pension cost provided for by a subsidiary in Taiwan. This subsidiary has a retirement plan covering all its regular
employees. Benefits under the plan are based on the length of service and estimated based pay at the time of retirement. The subsidiary
made a monthly contribution at certain percentage of the salaries to the pension fund, which is administered by a pension committee and
deposited in its name with the Central Trust of China.
Certain pension information is as follows:
i) Net periodic pension costs are as follows:
Group
2009 2008
$’000 $’000
Service cost 27 24
Interest cost 40 36
Actual returns on plan assets (29) (34)
Net amortisation and deferral 12 (19)
Net pension costs 50 7
ii) Based on the actuarial report which measures the pension assets and liabilities, the reconciliation between the funding status of
pension plan and accrued pension liability was as follows:
Group
2009 2008
$’000 $’000
Benefit obligation
Non-vested benefit obligation 792 692
Effect of projected future salary increase 980 919
Projected benefit obligation 1,772 1,611
Fair value of plan assets (1,210) (1,176)
Status of pension plan 562 435
Unrecognised net transitional obligation (162) (174)
Unamortised actuarial gain – 96
Provision for pension benefits 400 357

b) Pension benefits plan (cont’d)

iii) Changes in the present value of the projected benefit obligation are as follows:
Group
2009 2008
$’000 $’000
Benefit obligation at beginning of year 1,611 1,181

Service cost 27 24
Interest cost 40 36
Actuarial loss on obligation 93 377
Exchange differences on foreign plan 1 (7)
Benefit obligation at end of year 1,772 1,611
iv) Changes in the fair value of plan assets are as follows:

Group
2009 2008
$’000 $’000
Fair value at beginning of year (1,176) (1,128)

Expected returns (29) (34)
Contribution by employer (8) (9)
Actuarial loss/(gain) 3 (5)
Fair value at end of year (1,210) (1,176)
v) Actuarial assumptions are as follows:

Group
2009 2008
% %
Discount rate used in determining present values 2.25 2.50

Future salary increase rate 3.00 3.00
Expected rate of return of plan assets 2.25 2.50

32. Revenue
Income from sale of goods is recognised upon delivery of goods and acceptance by customers.
33. Other operating income
Group
2009 2008
$’000 $’000
Royalty income 776 967

Repair income 3,804 2,374
Government development grant 237 187
Grant income from jobs credit scheme 1,658 –
Foreign currency gains, net 2,223 –
Handling income 812 352
Reversal of provision for redemption of customers’ reward points – 718
Gain of disposal of subsidiaries 535 –
Others 2,303 2,901
12,348 7,499

During the financial year ended 31 December 2009, the Singapore Finance Minister announced the introduction of a Jobs Credit Scheme (“the
Scheme”). Under this Scheme, the Group received a 12% cash grant on the first $2,500 of each month’s wages for each employee on their Central
Provident Fund payroll. The Group received its grant income of $1,658,000 (2008: $Nil) in four receipts in March, June, September and December
2009.
34. Directors’ remuneration
Number of directors of the Company in remuneration bands are as follows:

2009 2008
$500,000 and above 1 1

$250,000 to $499,000 3 3
Below $250,000 4 4
Total 8 8

35. Other operating expenses

The following items have been included in arriving at other operating expenses:
Group
2009 2008
$’000 $’000
Allowance for doubtful debts, net:
– Trade 1,549 998
– Non-trade 86 531
Non-audit fees paid to:
– Auditors of the Company 73 25
– Other auditors * 68 64
Impairment loss on goodwill (Note 15) 9,604 –
Impairment loss on fixed assets (Note 11) 1,422 1,544
Loss on disposal of fixed assets 1,271 1,300
Loss on disposal of a subsidiary (Note 13h) – 475
Foreign currency losses, net – 938
Inventories recognised as an expense, being cost of sales 177,439 172,910
* Includes $54,000 (2008: $30,000) paid to member firms of Ernst & Young Global.
36. Financial expenses and financial income

Group
2009 2008
$’000 $’000
(a) Financial expenses
Interest expenses
– bank loans 827 2,949
– lease obligations 20 66
– bills payable 397 1,477
– bank overdraft 9 7
1,253 4,499
(b) Financial income
Interest income
– fixed deposits 50 108
– bank balances 52 92
– gain on interest rate swaps – 63
– others 17 11
119 274

37. Share of financial expenses of a joint venture
In 2008, share of financial expenses of a joint venture relates to the Group’s share of dividends accrued on the joint venture’s cumulative preference
shares, which were accounted for in accordance with the accounting policy stated in Note 2.31. The preference shares carried a dividend of 12%
per annum and the dividend rights were cumulative.
Under the revised Limited Partnership Agreement, no further distributions shall accrue on the preference shares.
38. Taxation
a) Major components of income tax expense
The major components of income tax expense for the years ended 31 December 2009 and 2008 are:
Group
Statement of comprehensive income: 2009 2008
$’000 $’000
Current income tax
– current year 9,399 6,332
– overprovision in respect of previous years (1,116) (1,075)
Deferred tax
– movement in temporary differences 5,274 480
– (over)/underprovision in respect of previous years (465) 107
Income tax expenses recognised in profit and loss 13,092 5,844

b) Reconciliation between tax expenses and accounting profit/(loss) 1
A reconciliation between the tax expense and the product of accounting profit/(loss) multiplied by the applicable tax rate for the years
ended 31 December 2009 and 2008 is as follows:
Group
2009 2008
$’000 $’000
Accounting profit/(loss) before income tax 37,654 (92,191)
Tax at the domestic rates applicable to profits in the countries where the Group operates 5,189 (1,261)
Adjustments:
Permanent differences/expenses not deductible for tax purpose 911 3,238
Income not subject to taxation (654) (37)
Difference in corporate tax rate and IHQ concessionary tax rate (660) (1,199)
Effect of change in tax rates (51) 85
Overprovision in respect of previous years (1,581) (968)
Deferred tax assets not recognised 9,937 2,010
Effect of partial tax exemption and tax relief (60) –
Utilisation of tax losses/unabsorbed capital allowances from previous years (897) –
Deferred tax for undistributed earnings of overseas subsidiaries 928 –
Share of results of associated companies and a joint venture 30 3,976
Income tax expense recognised in profit and loss 13,092 5,844

1
The reconciliation is prepared by aggregating separate reconciliations for each national jurisdiction.

38. Taxation (cont’d)
c) Deferred tax assets and liabilities as at 31 December relate to the following:
Group Company
Consolidated Consolidated Profit
Balance Sheet & Loss Balance Sheet
2009 2008 2009 2008 2009 2008
$’000 $’000 $’000 $’000 $’000 $’000
Deferred tax liabilities
Excess of net book value over tax written
down value of fixed assets (2,126) (2,703) (698) (775) (271) (566)
Undistributed earnings of overseas subsidiaries (817) (300) 517 300 – –
Others – – – – (300)
Gross deferred tax liabilities (2,943) (3,003) (271) (866)
Deferred tax assets

Excess of tax written down value over net book
value of fixed assets – – – 490 – –
Provisions 684 811 402 310 91 483
Unutilised tax losses 46 3,925 4,499 (143) – –
Unrealised profits on sale of inventories to
related companies 728 817 89 405 – –
Gross deferred tax assets 1,458 5,553 91 483
Net deferred tax (liabilities)/assets (1,485)* 2,550* (180) (383)
Deferred income tax expenses 4,809 587
* Including a translation loss of $744,000 (2008: $736,000)

c) Deferred tax assets and liabilities as at 31 December relate to the following (cont’d):
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set-off current tax assets against current tax liabilities
and when the deferred taxes relate to the same taxation authority. The amounts determined after appropriate offsetting are included in the
balance sheets as follows:
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Net deferred tax assets 1,366 5,107 – –

Net deferred tax liabilities (2,851) (2,557) (180) (383)
(1,485) 2,550 (180) (383)
Unrecognised tax losses and unabsorbed capital allowance
The Group has tax losses and unabsorbed capital allowance of approximately $25,805,000 and $757,000 (2008: $16,810,000 and
$1,619,000) that are available for offset against future taxable profits of the companies in which the losses arose, for which no deferred tax
asset is recognised due to uncertainty of its recoverability. The use of these tax losses is subject to the agreement of the tax authorities and
compliance with certain provisions of the tax legislation of the respective countries in which the companies operate.
d) The Group and Company
The Company was awarded DEI under the IHQ Award on 8 September 2004. The commencement date is 1 January 2005 and is for a period
of 5 years. The qualifying income from IHQ activities during the 5-year period will enjoy a concessionary tax rate, stipulated in the EDB’s offer
letter.
OSIM International Trading (Shanghai) Co., Ltd and OSIM (China) Co., Ltd
As a wholly foreign-owned enterprise registered in the Zone, Pudong New Area, the companies are subject to PRC income tax at the rate of
20% (2008: 18%).
OSIM (Taiwan) Co., Ltd
Pursuant to the Income Tax Law (“ITL”), beginning with 1998, annual distributable net earnings as determined under the ITL that are not
distributed to shareholders in the following year are subject to additional income tax at a rate of 10%. The 25% income tax and additional
10% tax paid by the Company for 1998 and onwards may be used by individual resident shareholders of the Company as individual income
tax credits. Pursuant to the ITL, the additional 10% income tax paid may be used by the shareholders, other than domestic corporate
shareholders as tax credits when the undistributed earnings are ultimately distributed.
According to the newly revised Income Tax Law of the Republic of China (“R.O.C”) on May 27, 2009, the statutory rate of the Company is
changed from 25% to 20% effective January 1, 2010.

d) The Group and Company (cont’d)
OSIM International Limited and Global Active Limited
The corporate income tax rate applicable to the Singapore companies of the Group was reduced from 18% for the year of assessment 2009
to 17% for the year of assessment 2010 onwards.
OSIM (M) Sdn Bhd and Victoria House Sdn Bhd
The corporate income tax rate applicable to OSIM (M) Sdn Bhd and Victoria House Sdn Bhd was reduced from 27% for the year of
assessment 2007 to 26% and 25% respectively, for the year of assessment 2008 onwards.
39. Earnings/(loss) per share
Basic earnings/(loss) per share amounts are calculated by dividing profit/(loss) for the year that is attributable to ordinary equity holders of the
Company by the weighted average number of ordinary shares (excluding treasury shares) outstanding during the year.
Diluted earnings/(loss) per share amounts are calculated by dividing profit/(loss) for the year that is attributable to ordinary equity holders of the
Company by the weighted average number of ordinary shares (excluding treasury shares) outstanding during the year plus the weighted average
number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.
The following table reflects the profit and loss and share data used in the computation of basic and diluted earnings/(loss) per share for the years
ended 31 December:
Group
2009 2008
$’000 $’000
Profit/(loss) for the year attributable to ordinary equity holders of the Company
used in computation of basic and diluted earnings per share 23,334 (99,436)
Number of shares
’000 ’000
Weighted average number of ordinary shares for basic earnings/(loss) per share computation 634,603 541,838
Effects of dilution:
– share options 3,487 –
– warrants – * –
Weighted average number of ordinary shares adjusted for the effect of dilution 638,090 541,838
* Warrants are anti-dilutive as the 12-month average share price is below the price of warrants.

39. Earnings/(loss) per share (cont’d)

For the purposes of calculating the diluted earnings/(loss) per share, the weighted average number of ordinary shares in issue is adjusted to take
into account the dilutive effect arising from the exercise of all outstanding share options granted to employees where such shares would be issued
at a price lower than the fair value (average share price during the financial year). The difference between the number of shares to be issued at the
exercise prices under the options and the number of shares that would have been issued at the fair value based on the assumed proceeds from the
issue of these shares are treated as ordinary shares issued for no consideration. The number of such shares issued for no consideration is added
to the weighted average number of ordinary shares outstanding in the computation of diluted earnings/(loss) per share.
40. Dividends
Group and Company

2009 2008
$’000 $’000
Proposed but not recognised as liability as at 31 December
Dividends on ordinary shares, subject to shareholders’ approval at Annual General Meeting:
- A final exempt (one-tier) dividend of one cent (2008: Nil cents) per share for 2009 6,625 –
41. Related party disclosures

An entity or individual is considered a related party of the Group and the Company for the purposes of the financial statements if: i) it possesses the
ability (directly or indirectly) to control or exercise significant influence over the operating and financial decisions of the Group and the Company or
vice versa; or ii) it is subject to common control or common significant influence.
a) Sale and purchase of goods and services

In addition to those related party information disclosed elsewhere in the financial statements, the following significant transactions between
the Group/Company and related parties took place during the year on terms agreed between the parties:
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Sales of finished goods to:
- Subsidiaries – – 88,630 81,100
- Associated companies 1,988 1,451 1,988 1,451
- Joint venture 12,566 15,708 12,566 15,708
- Affiliated companies 5,648 6,240 – –
Purchases of finished goods from:
- Associated companies 51,820 40,347 36,628 27,094
- Joint venture 29 685 29 685
Royalty income:
- Subsidiaries – – 4,642 1,933
- Associated companies 131 – 131 –
Spare part income:
- Subsidiaries – – 1,546 1,465
Management fees:
- Subsidiaries – – 516 230

41. Related party disclosures (cont’d)

b) Compensation of key management personnel
Group
2009 2008
$’000 $’000

Short-term employee benefits* 5,637 2,584
Central Provident Fund contributions 62 67
Directors’ fees 173 173
Total compensation paid to key management personnel 5,872 2,824
Comprise amounts paid to:

- Directors of the Company 5,284 2,277
- Other key management personnel 588 547
5,872 2,824
* This includes the club membership transferred to a key management personnel (Note 15).
The remuneration of key management personnel are determined by the remuneration committee having regards to the performance of
individuals and market trends.
Directors’ interests in an employee share option plan
At 1 January 2009 and 31 December 2009, the following directors held options to purchase ordinary shares of the Company under the
OSIM Share Option Scheme as follows:
At 1 At 31
January December Exercise Expiry
2009 2009 price Date
$
Options to subscribe for ordinary shares
Charlie Teo Chay Lee 247,500 247,500 0.178 14.01.2011

247,500 247,500 0.236 14.01.2012
198,000 198,000 0.442 26.12.2012
95,040 95,040 0.917 15.02.2014
Richard Leow Lian Soon 40 40 0.917 15.02.2014
Peter Lee Hwai Kiat 135,000 – 0.178 14.01.2011

135,000 – 0.236 14.01.2012
144,000 144,000 0.442 26.12.2012
69,120 69,120 0.917 15.02.2014

41. Related party disclosures (cont’d)
b) Compensation of key management personnel (cont’d)
At 1 At 31
January December Exercise Expiry
2009 2009 price Date
$
Michael Kan Yuet Yun 21,600 – 0.917 15.02.2009

Ong Kian Min 21,600 – 0.917 15.02.2009
Khor Peng Soon 21,600 – 0.917 15.02.2009
No share options were granted to the directors during the financial year.
Apart from the remuneration paid and share options granted to directors and key management, the Group did not enter into any significant
transactions with related parties who are not members of the Group.
42. Non-cancellable operating lease commitments
The Group and the Company have lease commitments with respect to the rental of shop and office premises. The leases have varying terms,
escalation clauses and renewal rights. The lease commitments include commitments for basic operating lease payments, as well as commitments
for additional contingent rental payable when turnover of certain retail outlets exceeds pre-determined levels. Lease terms do not contain restrictions
on the Group’s activities concerning dividends, additional debt or further leasing. Operating lease payments recognised in the statement of
comprehensive income during the year amounted to $45,308,000 (2008: $57,412,000).
Future minimum lease payments payable under non-cancellable operating leases as at 31 December are as follows:
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Not later than 1 year 37,281 38,449 8,058 8,656

Later than 1 year but not later than 5 years 50,426 48,681 20,007 18,226
Later than 5 years 3,678 11,205 1,869 5,817
91,385 98,335 29,934 32,699

43. Capital commitments
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Capital expenditure for shop

renovations approved but not contracted 1,210 1,300 – 84
44. Segment information
For management purposes, the Group is organised into business units based on their products and services, and has two reportable operating
segments as follows:
i) Retail: Outlets and counters operated by the Group in selected shopping centers and departmental stores where the products are sold
directly to end user customers.
ii) Distribution: Products distributed by the Group and franchisees in overseas markets.
Except as indicated above, no operating segments have been aggregated to form the above reportable operating segments.
Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and
performance assessment. Segment performance is evaluated based on operating profit or loss which in certain respects, as explained in the table
below, is measured differently from operating profit or loss in the consolidated financial statements.
Group financing (including financial expenses) and income taxes are managed on a group basis and are not allocated to operating segments.
Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.

44. Segment information (cont’d)
Business segments
The Group is organised on a worldwide basis into two main operating divisions, namely retail and distribution.
The following tables present revenue and results information regarding the Group’s business segments for the years ended 31 December 2009 and
2008:
Retail Distribution Elimination Group

2009 $’000 $’000 $’000 $’000
Revenue
Sales to external customers 451,132 25,635 – 476,767
Inter-segment sales – 142,453 (142,453)* –
Total revenue 451,132 168,088 (142,453) 476,767
Results
Segment results 26,849 22,203 (10,956) 38,096
Financial expenses, net – – – (1,134)
Share of results of associated companies and a joint venture – 692 – 692
Tax expense – – – (13,092)
Profit for the year 24,562
Assets
Segment assets 152,596 53,444 – 206,040
Investments in associated companies and a joint venture 488 11,358 – 11,846
Unallocated assets – – – 12,836
Total assets 230,722
Liabilities
Segment liabilities 36,509 42,707 – 79,216
Unallocated liabilities – – – 47,168
Total liabilities 126,384
* Inter-segment sales are eliminated on consolidation.

Business segments (cont’d)

2009 $’000 $’000 $’000 $’000
Other segment information

Capital expenditure
• Fixed assets 4,851 1,079 – 5,930*
• Intangible assets – 279 – 279
Depreciation of fixed assets 9,685 1,821 – 11,506
Depreciation of investment property – 23 – 23
Amortisation of intangible assets 1,083 621 – 1,704
Impairment loss on fixed assets 1,422 – – 1,422
* This does not include provision for restoration costs of $355,000.

Business segments (cont’d)

2008 $’000 $’000 $’000 $’000
Revenue
Sales to external customers 421,215 35,446 – 456,661
Inter-segment sales – 132,519 (132,519) –
Total revenue 421,215 167,965 (132,519) 456,661

Results
Segment results 12,590 7,994 3,946 24,530
Financial expenses, net – – – (4,225)
Share of results of associated companies and a joint venture (114,183) 1,687 – (112,496)
Tax expense (5,844)
Loss for the year (98,035)

Assets
Segment assets 128,303 45,749 – 174,052
Investments in associated companies and a joint venture 488 12,739 – 13,227
Unallocated assets 26,184
Total assets 213,463
Liabilities
Segment liabilities 35,926 29,129 – 65,055
Unallocated liabilities 72,654
Total liabilities 137,709
Other segment information
Capital expenditure
• Fixed assets 7,934 499 – 8,433*
• Intangible asset – 672 – 672
Depreciation of fixed assets 11,252 1,491 – 12,743
Depreciation of investment property – 24 – 24
Amortisation of intangible assets 1,507 165 – 1,672
Impairment loss on fixed assets 1,544 – – 1,544
* This does not include provision for restoration costs of $265,000.

Geographical information
Revenue and non-current assets information based on the geographical location of customers and assets respectively are as follows:
America/Africa/Europe/
North Asia South Asia Eliminations Total
Middle East Oceania
2009 2008 2009 2008 2009 2008 2009 2008 2009 2008
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Turnover
Sales to external
258,642 225,135 159,915 159,996 58,210 71,530 – – 476,767 456,661
customers
Inter-segment sales 53,813 50,713 88,640 81,806 – – (142,453) (132,519) – –
312,455 275,848 248,555 241,802 58,210 71,530 (142,453) (132,519) 476,767 456,661
Non-current assets 9,585 10,829 25,130 36,308 7,792 16,891 – – 42,507 64,028
Non-current assets information presented above consist of fixed assets, investment property and intangible assets.
45. Financial risk management objectives and policies

The Group’s principal financial instruments, other than derivative financial instruments, comprise bank loans and overdraft, finance leases and hire
purchase contracts, and cash and short term deposits. The main purpose of these financial instruments is to finance the Group’s operations The
Group has various other financial 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 forward currency contracts. The purpose is to manage the currency risks
arising from the Group’s operations and its sources of financing.
It is, and has been throughout the year under review, the Group’s policy that no trading in derivative financial instruments shall be undertaken.
The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk, foreign exchange risk and credit risk. The board
reviews and agrees policies for managing each of these risks and they are summarised below.
The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned financial risks and the objectives,
policies and processes for the management of these risks.

45. Financial risk management objectives and policies (cont’d)
a) Interest rate risk
The Group obtains additional financing through bank borrowings and leasing arrangements. The Group’s policy is to obtain the most
favourable interest rates available without increasing its foreign currency exposure. Surplus funds are placed with reputable banks and/or
financial institutions.
The Group’s policy is to manage its exposure to interest risks using a mix of fixed and variable rate debts.
Sensitivity analysis for interest rate risk

At the balance sheet date, if SGD, RM and NTD interest rates had been 50 (2008: 50) basis points lower/higher with all other variables held
constant, the Group’s profit net of tax would have been $185,000 (2008: $422,000) higher/lower, arising mainly as a result of lower/higher interest
expense on floating rate loans and borrowings and lower/higher interest income from floating rate loans. The assumed movement in basis points for
interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatility as in prior year.

b) Liquidity risk
The Group’s exposure to liquidity risks may arise due to mismatches of financial assets and liabilities.
In the management of liquidity risk, the Group monitors and maintains a level of cash and cash equivalents and banking facilities deemed
adequate by management to finance the Group’s operations and mitigate the effect of fluctuations in cash flows.
The table below summaries the maturity profile of the Group’s and the Company’s financial liabilities at the balance sheet date based on
contractual undiscounted payments.
2009 2008
1 year 1 to 5 Over 5 1 year 1 to 5 Over 5
Group Total Total
or less years years or less years years
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Trade creditors 21,211 – – 21,211 21,463 – – 21,463

Other creditors and accruals 34,103 – – 34,103 28,065 – – 28,065
Due to affiliated companies 114 – – 114 33 – – 33
Due to associated companies 16,651 – – 16,651 8,852 – – 8,852
Due to a joint venture 223 – – 223 364 – – 364
Short-term bank loans 3,622 – – 3,622 7,380 – – 7,380
Bank loans 22,523 353 – 22,876 20,469 21,006 1,883 43,358
Finance leases 64 53 – 117 381 106 – 487
Bills payable 8,773 – – 8,773 12,249 – – 12,249
Bank overdrafts – – – – 12 – – 12
107,284 406 – 107,690 99,268 21,112 1,883 122,263
Company
Trade creditors 7,496 – – 7,496 8,100 – – 8,100
Other creditors 9,975 – – 9,975 6,126 – – 6,126
Due to subsidiaries 2,223 – – 2,223 199 – – 199
Due to associated companies 11,542 – – 11,542 7,269 – – 7,269
Due to a joint venture 223 – – 223 364 – – 364
Bank loan 20,000 – – 20,000 20,000 20,000 – 40,000
Bills payable 8,445 – – 8,445 10,212 – – 10,212
59,904 – – 59,904 52,270 20,000 – 72,270

c) Foreign exchange risk

The Group has transactional currency exposures arising from sales or purchases that are denominated in a currency other than the
respective functional currencies of Group entities, primarily SGD, Renminbi (“RMB”), Malaysian Ringgit (“RM”), New Taiwan dollars
(“NTD”), Australia Dollars (“AUD”) and Hong Kong dollars (“HKD”). The foreign currencies in which these transactions are denominated
are SGD, United States dollar (“USD”) and Japanese Yen (“JPY”).
Approximately 5% (2008: 6%) of the Group’s sales are denominated in foreign currencies (mainly in USD) while 99% (2008: 99%) of
purchases by the Company are denominated in JPY and USD. 100% (2008: 100%) of purchases by the subsidiaries are denominated in
SGD, JPY and USD. The Group’s trade receivable and trade payable balances at the balance sheet date have similar exposure.
The Group and the Company also hold cash and cash equivalent denominated in foreign currencies for working capital purposes. At the
balance sheet date, such foreign currency balances (mainly in USD) amount to $8,033,000 and $4,527,000 for the Group and Company
respectively.
The Group uses foreign exchange contracts in managing its foreign exchange risk resulting from cash flows from anticipated transactions
and financing arrangements denominated in foreign currencies, primarily the JPY and USD. Transaction risk is calculated in each foreign
currency and includes foreign currency denominated assets and liabilities and firm and probable purchase and sale commitments.
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible change in the Group’s foreign
currencies against the respective functional currencies of the Group’s entities, with all other variables held constant.
Group
2009 2008
$’000 $’000
Profit net of tax Profit net of tax

USD/SGD - strengthened 3% (2008:3%) -608 -549
- weakened 3% (2008:3%) +608 +549
JPY/SGD - strengthened 3% (2008:3%) -147 -162

- weakened 3% (2008:3%) +147 +162
SGD/RMB - strengthened 3% (2008:3%) -1 -63

- weakened 3% (2008:3%) +1 +63
SGD/RM - strengthened 3% (2008:3%) -71 -39

- weakened 3% (2008:3%) +71 +39
SGD/NTD - strengthened 3% (2008:3%) – -14

- weakened 3% (2008:3%) – +14

c) Foreign exchange risk (cont’d)

Group
2009 2008
$’000 $’000
Profit net of tax Profit net of tax

SGD/HKD - strengthened 3% (2008:3%) – -168
- weakened 3% (2008:3%) – +168
SGD/AUD - strengthened 3% (2008:3%) -153 +67

- weakened 3% (2008:3%) +153 -67
d) Credit risk
Credit risk, or the risk of counterparties defaulting, is managed through the application of credit approvals, credit limits and monitoring
procedures.
The carrying amount of cash and cash equivalents, trade debtors and other debtors represent the Group’s maximum exposure to credit risk
in relation to financial assets. No other financial assets carry a significant exposure to credit risk.
As the nature of the Group’s business is in retail, the majority of outstanding trade receivables are due from department stores and financial
institutions.
There are no significant concentrations of credit risk within the Group or the Company.
Exposure to credit risk
At the balance sheet date, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amount of each
class of financial assets recognised in the balance sheets.
Information regarding credit enhancements for trade debtors is disclosed in Note 20.

d) Credit risk (cont’d)
Credit risk concentration profile
The Group determines concentrations of credit risk by monitoring the country and industry sector profile of its trade debtors on an on-going
basis. The credit risk concentration profile of the Group’s trade debtors at the balance sheet date is as follows:
Group
2009 2008
$’000 % of total $’000 % of total
By region:
North Asia 26,981 82.9% 15,852 68.2%
South Asia 5,477 16.8% 7,384 31.7%
Others 112 0.3% 16 0.1%
32,570 100% 23,252 100%
By business segments:
Retail 31,626 97.1% 19,819 85.2%
Distribution 944 2.9% 3,433 14.8%
32,570 100% 23,252 100%
Financial assets that are neither past due nor impaired
Trade and other debtors that are neither past due nor impaired are creditworthy debtors with good payment record with the Group. Cash
and cash equivalents and derivatives that are neither past due nor impaired are placed with or entered into with reputable financial
institutions or companies with high credit ratings and no history of default.
Financial assets that are either past due or impaired
Information regarding financial assets that are either past due or impaired is disclosed in Note 20 (Trade debtors).

46. Financial instruments
a) Fair value of financial instruments
• Fair value of financial instruments that are carried at fair value
The following table shows an analysis of financial instruments carried at fair value by level of fair value hierarchy:
Group
2009
$’000
Quoted prices
in active markets Significant
for identical Significant other unobservable
instruments observable inputs inputs
(Level 1) (Level 2) (Level 3) Total
Financial liabilities:
Derivatives
– Forward currency contracts – 32 – 32
At 31 December 2009 – 32 – 32
Fair value hierarchy
The Group classify fair value measurement using a fair value hierarchy that reflects the significance of the inputs used in making the
measurements. The fair value hierarchy have the following levels:
• Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as
prices) or indirectly (i.e., derived from prices); and
• Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs)
Determination of fair value
Derivatives: Forward currency contracts are valued using a valuation technique with market observable inputs. The most frequently applied
valuation techniques include forward pricing and swap models, using present value calculations. The models incorporate various inputs
including foreign exchange spot and forward rates.

46. Financial instruments (cont’d)
a) Fair value of financial instruments (cont’d)
• Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are reasonable
approximation of fair value.
Cash and cash equivalents and other current financial assets and liabilities, short-term and long-term borrowings.
The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-
term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the balance sheet date.
The fair value of financial assets and liabilities by classes that are not carried at fair value and whose carrying amounts are not
reasonable approximation of fair value are as follows:
2009 2008
Carrying Estimated Carrying Estimated
amount fair value amount fair value
$’000 $’000 $’000 $’000
Group
Financial assets:
Long-term investment
in equity shares (unquoted) 930 (i) 930 (i)
Long-term receivables 7,596 6,981 8,627 7,669
Financial liabilities:
Obligations under finance leases 108 94 462 407
Company
Financial assets:
Long-term investment
in equity shares (unquoted) 930 (i) 930 (i)
Long-term receivables 1,357 1,247 1,425 1,267
(i) Fair value information has not been disclosed for the Group’s investment in equity instrument that is carried at cost because fair
value cannot be measured reliably. This equity instrument represents ordinary shares in a Japanese manufacturing company that
is not quoted on any market. The Group does not intend to dispose of this investment in the foreseeable future.

• Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are reasonable
approximation of fair value (cont’d)
Determination of fair value
Long-term receivables and obligations under finance leases
The fair values as disclosed in the table above are estimated by discounting expected future cash flows at market incremental
lending rate for similar types of lending, borrowing or leasing arrangements at the balance sheet date.
Set out below is a comparison by category of the carrying amounts of the Group’s and the Company’s financial instruments that are
carried on the financial statements:
Loans and Available- Liabilities at

2009 receivables for-sale amortised cost
$’000 $’000 $’000

Group
Assets
Long-term investment (Note 16) – 930 –
Long-term receivables (Note 17) 7,596 – –
Loan to associated company (Note 18) 176 – –
Trade debtors (Note 20) 32,570 – –
Other debtors and deposits 5,867 – –
Due from affiliated companies
– trade (Note 22) 1,090 – –
– non-trade (Note 22) 4 – –
Due from associated companies
Due from a joint venture
– trade (Note 22) 406 – –
Fixed deposits (Note 24) 29,321 – –
Cash and bank balances (Note 24) 33,913 – –
Total 110,975 930 –

46. Financial instruments
Set out below is a comparison by category of the carrying amounts of the Group’s and the Company’s financial instruments that are carried
on the financial statements:

$’000 $’000 $’000

Group (cont’d)
Liabilities
Bank loans (Note 29) – – 22,876
Obligations under finance leases
(Note 30) – – 108
Trade creditors (Note 25) – – 21,211
Other creditors and accruals – – 34,103
Due to affiliated companies –
non-trade (Note 22) – – 114
Due to associated companies –
trade (Note 22) – – 16,345
Due to associated companies –
non-trade (Note 22) – – 306
Due to a joint venture – trade
(Note 22) – – 223
Short-term bank loans (Note 28) – – 3,622
Bills payable to banks (unsecured) – – 8,773
Total – – 107,681


$’000 $’000 $’000

Group (cont’d)
Assets
Other debtors and deposits 5,755 – –
– trade (Note 22) 596 – –
Due from associated companies
– trade (Note 22) 360 – –
Total 65,212 930 –

$’000 $’000 $’000

Group (cont’d)
Liabilities
Obligations under finance leases (Note 30) – – 462
Other creditors and accruals – – 28,065
Due to affiliated companies – trade (Note 22) – – 10
Due to affiliated companies – non-trade (Note 22) – – 23
Due to associated companies – trade (Note 22) – – 8,591
Due to associated companies – non-trade (Note 22) – – 261
Due to a joint venture – trade (Note 22) – – 364
Short-term bank loans (Note 28) – – 7,380
Bank overdrafts (Note 24) – – 12
Total – – 122,238

$’000 $’000 $’000

Company
Assets
Other debtors and deposits 283 – –
Due from subsidiaries – trade (Note 22) 9,148 – –
Due from subsidiaries – non-trade (Note 22) 855 – –
Due from associated companies – non-trade (Note 22) 32 – –
Due from a joint venture – trade (Note 22) 406 – –
Total 42,892 930 –

$’000 $’000 $’000

Company (cont’d)
Liabilities
Other creditors and accruals (Note 26) – – 9,975
Due to subsidiaries – non-trade (Note 22) – – 2,223
Total – – 59,904

$’000 $’000 $’000

Company (cont’d)
Assets
Other debtors and deposits 283 – –
Due from subsidiaries – trade (Note 22) 8,993 – –
Due from subsidiaries – non-trade (Note 22) 734 – –
Due from associated companies – non-trade (Note 22) 19 – –
Due from a joint venture – trade (Note 22) 360 – –
Due from a joint venture – non-trade (Note 22) 5 – –
Total 29,385 930 –

$’000 $’000 $’000

Company (cont’d)
Liabilities
Other creditors and accruals (Note 26) – – 6,126
Due to subsidiaries – trade (Note 22) – – 60
Due to subsidiaries – non-trade (Note 22) – – 139
Total – – 72,270

b) Derivative financial instruments and hedging activities

Derivative financial instruments included in the balance sheets at 31 December are as follows:
2009 2008
Group and Company Assets Liabilities Assets Liabilities
$’000 $’000 $’000 $’000
Forward currency contracts* – 32 – 19
Total held for trading liabilities – 32 – 19
* The above forward currency contracts are entered into for hedging purposes and hedge accounting is not applied.
i) Cash flow hedges
Hedge of highly probable forecasted purchases

In 2008, the Group held forward currency contracts designated as hedges of the currency risk related to highly probable forecasted
purchases, which were expected to materialise in the twelve months following the balance sheet date.
The terms of the forward currency contracts have been negotiated to match the terms of the forecasted transactions.
The revaluation of derivatives assessed to be highly effective hedging instruments resulted in a net unrealised loss of $12,000,
which was included in the hedging reserve (Note 6).
ii) Fair value hedges
Hedge of financial liabilities

As at 31 December 2009, the Group held forward currency contracts designated as hedges of the currency risk related to recognised
financial liabilities.
The terms of the foreign currency contracts have been negotiated to match the terms of the financial liabilities.
These derivatives were assessed to be highly effective and the change in fair value of the financial liability attributable to the hedged
risk, amounting to $32,000 (2008: $19,000), is recognised as a liability at 31 December 2009 with a corresponding loss recognised
in the profit and loss. This loss has been offset by an equivalent gain on the hedged risks.

47. Capital management
The objective of the Group’s capital management is to ensure that it maintains healthy ratios in order to support its business operation and maximise
shareholders value.
The Group manages its capital structure and makes adjustment to it, as deemed appropriate by management. In order to maintain or adjust the
capital structure, the Group may issue new shares, declared dividend or any other means as deemed appropriate by management. No changes
were made in the objectives, policies or processes during the years ended 31 December 2009 and 2008.
As disclosed in Note 5(a), two subsidiaries of the Group are required by the Foreign Enterprise Law of the PRC to contribute to and maintain a
non-distributable statutory reserve fund whose utilisation is subject to approval by the relevant PRC authorities. This externally imposed capital
requirement has been complied with by the above-mentioned subsidiaries for the financial years ended 31 December 2009 and 2008.
The Group monitors capital using the gearing ratio, calculated as Net Debt over Total Capital. The Group policy is to keep the gearing ratio between
50% to 100%. Net debt includes all loans and borrowings less cash and cash equivalent (including fixed deposits). Capital means all equities
attributable to the equity holders of the Company, less the abovementioned statutory reserve fund.
Group
2009 2008
$’000 $’000

Short-term bank loans Note 28 3,622 7,380
Bank loans Note 29 22,876 43,358
Finance leases obligations Note 30 108 462
Bills payable 8,773 12,249

35,379 63,449
Less: - Cash and cash equivalent Note 24 (63,234) (26,281)
Net (cash)/debt (27,855) 37,168
Equity attributable to the equity holders of the Company 96,679 69,456

Less: - China statutory fund (Note 5a) (1,640) (636)
Total capital 95,039 68,820
Gearing ratio –* 54%
* The Group is in net cash position.

48. Comparative figures

Comparatives in the financial statements have been changed from the previous year due to the adoption of INT FRS 113 Customer Loyalty
Programmes during the current year as follows:
Group
Restated Previously reported
2008 2008
$’000 $’000
Balance Sheet of the Group
Accumulated profits 41,017 41,626
Minority interests 6,298 6,424
Other creditors and accruals 29,714 28,065
Provisions 4,629 5,543
81,658 81,658
As required under the revised FRS 1, the restated financial position as at the beginning of the earliest comparative period, due to the adoption of
INT FRS 113, is as follows:
Group
1 January 2008
$’000
(Restated)
Equity attributable to equity holders of the Company
Share capital 42,574
Accumulated profits 140,453
Enterprise expansion funds 545
Capital reserves 1,384
Hedging reserve (12)
Revaluation reserve 5,237
Premium on purchase of minority interests’ shares (7,720)
Foreign currency translation reserve (23,355)

159,106
Minority interests 6,814
Total equity 165,920
Non-current assets
Fixed assets 38,144
Investment property 569
Associated companies and a joint venture 127,595
Intangible assets 35,069
Long-term investment 930
Long-term receivables 11,746
Deferred tax assets 7,368
221,421

48. Comparative figures (cont’d)

Group
1 January 2008
$’000
Current assets (Restated)
Loan to associated company 757
Stocks 71,698
Trade debtors 29,641
Other debtors, deposits and prepaid operating expenses 8,328
Due from affiliated companies (trade) 811
Due from affiliated companies (non-trade) 2
Due from associated companies (trade) 1,370
Due from associated companies (non-trade) 749
Due from a joint venture (trade) 683
Due from a joint venture (non-trade) 227
Fixed deposits 5,621
Cash and bank balances 23,413
143,300
Current liabilities
Trade creditors 20,893
Other creditors and accruals 36,603
Provisions 5,310
Due to affiliated companies (trade) 1
Due to associated companies (trade) 9,782
Due to associated companies (non-trade) 3
Due to a joint venture (trade) 809
Short-term bank loans 8,594
Provision for income tax 6,951
Bank loans – current portion 21,208
Obligations under finance leases – current portion 629
Bills payable to banks (unsecured) 38,804
Bank overdrafts 1,287
150,874
Net current liabilities (7,574)

Non-current liabilities
Bank loans – non-current portion 43,908
Obligations under finance leases – non-current portion 534
Provision for pension benefits 359
Deferred tax liabilities 3,126
47,927
Net assets 165,920

49. Events occurring after the balance sheet date

a) On 21 January 2010, the Company increased its shareholdings in OSIM (Taiwan) Co., Ltd by 7.5% through cash purchase of shares from
the minority shareholders of the subsidiary.
The aggregate cash consideration for the acquisition of shares is $833,000. With the acquisition, OSIM (Taiwan) Co., Ltd became a wholly-
owned subsidiary company of the Group.
b) On 28 and 29 January 2010, the Company acquired additional 4,937,000 and 525,000 shares in the Company respectively, through
purchases on the SGX. The total amount paid to acquire the shares was $3,187,000.
50. Authorisation of financial statements for issue

The financial statements for the year ended 31 December 2009 were authorised for issue in accordance with a resolution of the directors on 19
February 2010.

MAJOR PROPERTIES
Unexpired term of
Description Location Area (sq m) Tenure (years) lease (years)
Strata units in commercial building Rochor Canal Road, 86 99 72

# 01-08 and # 01-41
Sim Lim Square,
Singapore 188504
Strata units in commercial building (2) 6 Xuanwumenwai Street, 186 50 35

Junefield Plaza,
Tower 1 15th floor,
Unit 1526 & 1527
Beijing, PRC
Residential condominium Unit 8C, 1523-2 165 68 53

Dong Fang Road, Pudong
New Area, Shanghai, PRC
Strata units in commercial building 11F, 11F-1, 11F-2 and 11F-3, 1,572 Freehold NA
No.176, Jian Yi Road,
Chung Ho City, Taipei, Taiwan
Land (1) Jian Kang section, 779/10000 Freehold NA

Chung Ho City, Taipei, Taiwan share of 30,072.47
Industry property (3) 9 Ubi Crescent Singapore 408572 616 60 47
Note:-
(1)
This is the land on which the building at 11F, 11F-1, 11F-2 and 11F-3, No.176, Jian Yi Road, was constructed on.
(2)
The building is held for sale
(3)
The building is held for sale

SHAREHOLDINGS STATISTICS
Number of Issued Shares (excluding Treasury Shares): 652,662,396

Number/Percentage of Treasury Shares: 10,000,000 (1.53%)
Class Of Shares: Ordinary shares
Voting Rights (excluding Treasury Shares): One Vote Per Share
SIZE OF NO. OF
SHAREHOLDINGS SHAREHOLDERS % NO. OF SHARES %
1 – 999 309 6.92 133,926 0.02

1,000 – 10,000 2,412 53.98 13,336,161 2.04
10,001 – 1,000,000 1,714 38.36 93,288,850 14.30
1,000,001 & ABOVE 33 0.74 545,903,459 83.64
TOTAL 4,468 100.00 652,662,396 100.00

TOP TWENTY SHAREHOLDERS NO. OF SHARES %
CITIBANK NOMINEES SINGAPORE PTE LTD 230,730,295 35.35

RON SIM CHYE HOCK 171,911,732 26.34
DBS NOMINEES PTE LTD 35,773,339 5.48
HSBC (SINGAPORE) NOMINEES PTE LTD 18,434,378 2.82
UNITED OVERSEAS BANK NOMINEES PTE LTD 13,869,165 2.13
PHILLIP SECURITIES PTE LTD 7,330,092 1.12
MORGAN STANLEY ASIA (SINGAPORE) PTE LTD 5,753,880 0.88
TEO SWAY HEONG 4,961,547 0.76
HSIEH WEN-HSU OR YANG PAO-FENG 4,511,560 0.69
KIM ENG SECURITIES PTE. LTD. 4,442,666 0.68
DBS VICKERS SECURITIES (S) PTE LTD 4,191,310 0.64
TAY SIM KIM 4,092,800 0.63
HONG LEONG FINANCE NOMINEES PTE LTD 3,249,866 0.50
OCBC NOMINEES SINGAPORE PTE LTD 3,030,960 0.46
OCBC SECURITIES PRIVATE LTD 2,966,160 0.45
UOB KAY HIAN PTE LTD 2,854,200 0.44
CHOU JEN CHUNG 2,715,000 0.42
FAMILY CO. LTD. 2,696,400 0.41
CIMB-GK SECURITIES PTE. LTD. 2,636,278 0.41
LEOW LIAN SOON 2,550,000 0.39
TOTAL 528,701,628 81.00
SUBSTANTIAL SHAREHOLDERS DIRECT INTEREST DEEMED INTEREST %
RON SIM CHYE HOCK 243,757,978 161,320,157 61.13
PERCENTAGE OF SHAREHOLDING IN PUBLIC’S HAND
Approximately 37% of the company’s shares are held in hand of public. Accordingly, the Company has complied with the Rule 723 of the Listing Manual
of the SGX-ST.

WARRANTHOLDINGS STATISTICS
SIZE OF NO. OF
SHAREHOLDINGS WARRANTHOLDERS % NO. OF WARRANTS %
1 – 999 102 16.01 32,808 0.02

1,000 – 10,000 316 49.61 1,179,532 0.86
10,001 – 1,000,000 212 33.28 14,123,365 10.27
1,000,001 & ABOVE 7 1.10 122,196,157 88.85
TOTAL 637 100.00 137,531,862 100.00

TOP TWENTY WARRANTHOLDERS NO. OF WARRANTS %
CITIBANK NOMINEES SINGAPORE PTE LTD 44,451,135 32.32

RAFFLES NOMINEES (PTE) LTD 41,700,135 30.32
RON SIM CHYE HOCK 30,030,264 21.84
KIM ENG SECURITIES PTE. LTD. 2,659,317 1.93
CIMB-GK SECURITIES PTE. LTD. 1,268,583 0.92
DB NOMINEES (S) PTE LTD 1,056,250 0.77
TEO SWAY HEONG 1,030,473 0.75
LEE SEOK CHEE MRS SEOK CHEE LEE ENG 958,269 0.70
LIM CHOK FIN 867,383 0.63
PHILLIP SECURITIES PTE LTD 681,073 0.50
ANG KIAN HUAT 655,000 0.48
DBS VICKERS SECURITIES (S) PTE LTD 495,457 0.36
YIP FONG WAI 427,000 0.31
TEO CHAY LEE 371,122 0.27
KO KAY HYONG 362,000 0.26
NG POH CHENG 336,252 0.23
ONG SWEE LENG 325,000 0.24
LEOW LIAN SOON 304,614 0.22
LIAO MINGHAO 279,000 0.20
OCBC SECURITIES PRIVATE LTD 254,876 0.19
128,513,203 93.44
SUBSTANTIAL WARRANTHOLDERS DIRECT INTEREST DEEMED INTEREST %
RON SIM CHYE HOCK 72,691,666 1,030,473 53.60
PERCENTAGE OF SHAREHOLDING IN PUBLIC’S HAND
Approximately 46% of the company’s shares are held in hand of public. Accordingly, the Company has complied with the Rule 723 of the Listing Manual
of the SGX-ST.

Notice of Annual General Meeting 163
Appendix l 168
Appendix ll 178
Proxy Form 196

NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Annual General Meeting of OSIM International Ltd (“the Company”) will be held at 65 Ubi Avenue 1, OSIM Headquarters,
Singapore 408939 on Wednesday, 12 April 2010 at 6.30 p.m. for the following purposes:
AS ORDINARY BUSINESS
1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the year ended 31 December 2009 together with the
Auditors’ Report thereon. (Resolution 1)
2. To declare a final one-tier tax exempt dividend of 1.00 cent per ordinary share for the year ended 31 December 2009 (Resolution 2)
3.
To re-elect the following Directors, each of whom will cease to hold office pursuant to Article 97 of the Company’s Articles of Association and who,
being eligible, will offer themselves for re-election:

Mr Tan Soo Nan (Independent Director and Chairman of the Audit Committee) (Resolution 3)
Mr Sin Boon Ann (Independent Director and member of the Audit Committee) (Resolution 4)
Mr Tan will, upon re-election as Director of the Company, remain as a member of the Remuneration and Nominating Committees and be considered
independent.
Mr Sin will, upon re-election as Director of the Company, remain as a member of the Audit Committee, and chair the Remuneration and Nominating
Committees and will be considered independent.
4. To approve the payment of Directors’ fees of $147,500 for the year ended 31 December 2009 (2008: $147,500) (Resolution 5)
5. To re-appoint Messrs Ernst & Young LLP as the Company’s Auditors and to authorise the Directors to fix their remuneration. (Resolution 6)

6. To transact any other ordinary business which may properly be transacted at an Annual General Meeting.
AS SPECIAL BUSINESS
To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any modifications:
7. Authority to issue shares up to 50 per centum (50%) of the issued shares in the capital of the Company
That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading
Limited, the Directors of the Company be authorised and empowered to:

NOTICE OF ANNUAL GENERAL MEETING (CONT’D)
(a) (i) issue shares in the Company (“shares”) whether by way of rights, bonus or otherwise; and/or
(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be issued, including
but not limited to the creation and issue of (as well as adjustments to) options, warrants, debentures or other instruments convertible
into shares,
at any time and upon such terms and conditions and for such purposes and to such persons as the Directors of the Company may in their
absolute discretion deem fit; and
(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument
made or granted by the Directors of the Company while this Resolution was in force,
provided that:
(1) the aggregate number of shares (including shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution)
and Instruments to be issued pursuant to this Resolution shall not exceed fifty per centum (50%) of the total number of issued shares
(excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate
number of shares and Instruments to be issued other than on a pro rata basis to existing shareholders of the Company shall not exceed
twenty per centum (20%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in
accordance with sub-paragraph (2) below);
(2) (subject to such calculation as may be prescribed by the Singapore Exchange Securities Trading Limited) for the purpose of determining
the aggregate number of shares and Instruments that may be issued under sub-paragraph (1) above, the percentage of issued shares and
Instruments shall be based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time of the
passing of this Resolution, after adjusting for:
(a) new shares arising from the conversion or exercise of the Instruments or any convertible securities that have been issued pursuant
to any previous shareholder approval and which are outstanding as at the date of the passing of this Resolution;
(b) new shares arising from exercising share options or vesting of share awards outstanding and subsisting at the time of the passing of
this Resolution; and
(c) any subsequent bonus issue, consolidation or subdivision of shares;
(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the Singapore
Exchange Securities Trading Limited for the time being in force (unless such compliance has been waived by the Singapore Exchange
Securities Trading Limited) and the Articles of Association of the Company; and

(4) unless revoked or varied by the Company in a general meeting, such authority shall continue in force (i) until the conclusion of the next
Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held,
whichever is earlier or (ii) in the case of shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution,
until the issuance of such shares in accordance with the terms of the Instruments.
[See Explanatory Note (i)] (Resolution 7)
8. Authority to issue shares under the OSIM Share Option Scheme

That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors of the Company be authorised and empowered to offer and grant options
under the OSIM Share Option Scheme (“the Scheme”) and to issue from time to time such number of shares in the capital of the Company as may be
required to be issued pursuant to the exercise of options granted by the Company under the Scheme, whether granted during the subsistence of this
authority or otherwise, provided always that the aggregate number of additional ordinary shares to be issued pursuant to the Scheme shall not exceed
fifteen per centum (15%) of the total number of issued shares (excluding treasury shares) in the capital of the Company from time to time and that
such authority shall, unless revoked or varied by the Company in a general meeting, continue in force until the conclusion of the next Annual General
Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier.
[See Explanatory Note (ii)] (Resolution 8)
9. Renewal of Shareholders’ Mandate for Interested Person Transactions

That for the purposes of Chapter 9 of the Listing Manual of the Singapore Exchange Securities Trading Limited:
(a) approval be given for the renewal of the mandate for the Company, its subsidiaries and target associated companies or any of them to enter
into any of the transactions falling within the types of Interested Person Transactions as set out in Appendix I to the Annual Report dated
17 February 2010 (“Appendix I”) with any party who is of the class of Interested Persons described in Appendix I, provided that such
transactions are carried out in the normal course of business, at arm’s length and on commercial terms and in accordance with the guidelines
of the Company for Interested Person Transactions as set out in Appendix I (the “Shareholders’ Mandate”);
(b) the Shareholders’ Mandate shall, unless revoked or varied by the Company in a general meeting, continue in force until the conclusion of the
next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be
held, whichever is earlier; and
(c) authority be given to the Directors of the Company to complete and do all such acts and things (including executing all such documents as
may be required) as they may consider necessary, desirable or expedient to give effect to the Shareholders’ Mandate as they may think fit.
[See Explanatory Note (iii)] (Resolution 9)

10. Renewal of Share Buy-back Mandate

That the Directors of the Company be and are hereby authorised to make purchases from time (whether by way of market purchases or off-market
purchases on an equal access scheme) of up to 10% of the total number of issued ordinary shares of the Company (excluding treasury shares) as
at the date of passing of this Resolution at any price up to but not exceeding the Maximum Price as defined and set out in Appendix II (the “Share
Buy-back Mandate”) in accordance with the guidelines as set out, and this mandate shall, unless revoked or varied by the Company in general
meeting, continue in force until the date on which the next Annual General Meeting of the Company is held or is required by law to held, whichever
is the earlier. [See Explanatory Note (iv)] (Resolution 10)
By Order of the Board
Lee Hwai Kiat

Company Secretary
Singapore, 15 March 2010

Explanatory Notes:
(i) The Ordinary Resolution 7 in item 7 above, if passed, will empower the Directors of the Company from the date of this Meeting until the date of the
next Annual General Meeting of the Company, or the date by which the next Annual General Meeting of the Company is required by law to be held
or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares, make or grant instruments
convertible into shares and to issue shares pursuant to such instruments, up to a number not exceeding, in total, 50% of the total number of issued
shares (excluding treasury shares) in the capital of the Company, of which up to 20% may be issued other than on a pro-rata basis to existing
shareholders of the Company.
For determining the aggregate number of shares that may be issued, the percentage of issued shares in the capital of the Company will be calculated
based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this Ordinary Resolution is passed
after adjusting for new shares arising from the conversion or exercise of the Instruments or any convertible securities, the exercise of share options
or the vesting of share awards outstanding or subsisting at the time when this Ordinary Resolution is passed and any subsequent bonus issue,
consolidation or subdivision of shares.
(ii) The Ordinary Resolution 8 in item 8 above, if passed, will empower the Directors of the Company, from the date of this Meeting until the next Annual
General Meeting of the Company, or the date by which the next Annual General Meeting of the Company is required by law to be held or such
authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares in the Company pursuant to the exercise
of options granted or to be granted under the Scheme up to a number not exceeding in total (for the entire duration of the Scheme) fifteen per centum
(15%) of the total number of issued shares (excluding treasury shares) in the capital of the Company from time to time.
(iii) The Ordinary Resolution 9 proposed in item 9 above, if passed, will authorise the Interested Person Transactions as described in Appendix I and
recurring in the year and will empower the Directors of the Company to do all acts necessary to give effect to the Shareholders’ Mandate. This
authority will, unless previously revoked or varied by the Company in a general meeting, expire at the conclusion of the next Annual General Meeting
of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held whichever is the earlier.
(iv) The Ordinary Resolution 10 proposed in item 10 above, if passed, will authorise the Directors of the Company from the date of this Meeting until the
next Annual General Meeting of the Company, or the date by which the next Annual General Meeting of the Company is required by law to be held
or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to purchase up to 10% of the total number of
issued ordinary shares in the capital of the Company.
Notes:
1. A Member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint a proxy to attend and vote in his/
her stead. A proxy need not be a Member of the Company.

2. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 65 Ubi Avenue 1, OSIM Headquarters,
Singapore 408939 not less than forty-eight (48) hours before the time appointed for holding the Meeting.

APPENDIX I

(Incorporated In The Republic of Singapore with Limited Liability)
(Company Registration No. 198304191N)
APPENDIX I IN RELATION TO DETAILS OF THE

PROPOSED RENEWAL OF THE SHAREHOLDERS’ MANDATE FOR
INTERESTED PERSON TRANSACTION
17 February 2010
This Appendix is circulated to Shareholders of OSIM International Ltd (the “Company”) together with the Company’s Annual Report. Its purpose is to
provide Shareholders with the relevant information relating to, and to seek Shareholders’ approval for, the renewal of the Shareholders’ mandate to be tabled
at the Annual General Meeting to be held on 12 April 2010 at 6.30pm at 65 Ubi Avenue 1 OSIM Headquarters Singapore 408939.
The Notice of Annual General Meeting and a Proxy Form are enclosed with the Annual Report. The Singapore Exchange Securities trading Limited takes
no responsibility for the correctness of any of the statements made, reports contained/referred to, or opinions expressed in this Appendix.

APPENDIX I (CONT’D)
DEFINITIONS
In this appendix (“Appendix I”), the following definitions apply throughout unless otherwise stated:
“AGM” : the annual general meeting of the Company to be convened on 12 April 2010, notice of which is set out in
the Annual Report 2009 despatched together with this Appendix I.
“Audit Committee” : the audit committee of the Company as at the date of this Appendix, comprising of Mr Tan Soo Nan
(Chairman), Mr Khor Peng Soon and Mr Sin Boon Ann.
“CDP” : the Central Depository (Pte) Limited
“Companies Act” : the Companies Act, Chapter 50, of Singapore as amended by the Companies (Amendment) Act
“Company” or “OSIM” : OSIM International Ltd
“Directors” : the Directors of the Company for the time being.
“Group” : the Group refers to the Company, its subsidiaries, joint ventures and associated companies
“Interested Persons Transactions” : defined in paragraph 3.2 of this Appendix
“Latest Practicable Date” : the latest practicable date prior to the printing of this Appendix, being 17 February 2010
“Listing Manual” : the listing manual of the SGX-ST, which became effective on July 1, 2002, including amendments made
thereto up to the date of this Appendix.
“Notice of AGM” : the notice of AGM as set out on page 138 of this Annual Report
“NTA” : net tangible assets
“SGX-ST” : the Singapore Exchange Securities Trading Limited
“Shares” : ordinary shares in the capital of the Company.

“Share Options” : options to subscribe for new Shares granted pursuant to share option schemes/plans implemented by the
Company.
“Shareholders” : registered holders of Shares, except that where the registered holder is CDP, the term “Shareholders” shall,
where the context admits, mean the Depositors whose Securities Account are credited with Shares.

“Shareholders’ Mandate” : defined in paragraph 2.4 of this Appendix
“$” and “cents” : Singapore dollars and cents, respectively.
“%” or “per cent” : Per centum or percentage

The terms “Depositor” and “Depository Agent” shall have the meanings ascribed to them respectively in Section 130A of the Companies Act.
Words importing the singular shall, where applicable, include the plural and vice versa. Words importing the masculine gender shall, where applicable,
include the feminine and neuter genders. References to persons shall include corporations.
Any reference in this Appendix to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defined under
the Companies Act or any statutory modification thereof and not otherwise defined in this Appendix shall have the same meaning assigned to it under the
Companies Act or any statutory modification thereof, as the case may be.
Any reference to a time of day in this Appendix is made by reference to Singapore time unless otherwise stated.

PROPOSED RENEWAL OF THE SHAREHOLDERS’ MANDATE

FOR INTERESTED PERSON TRANSACTIONS
1. INTRODUCTION
1.1 The purpose of this Appendix is to provide the Shareholders of the Company with information relating to, and to seek Shareholders’ approval at the
AGM to renew the Shareholders’ Mandate that will enable the Company to enter into transactions with the Interested Persons in compliance with
Chapter 9 of the Listing Manual.
1.2 Pursuant to Chapter 9 of the Listing Manual, the Shareholders’ Mandate was renewed at an annual general meeting held on 30 April 2009, will
continue in force until the forthcoming annual general meeting. Accordingly, the Directors propose that the Shareholders’ Mandate be renewed at the
AGM to Shareholders’ Mandate to be held on 12 April 2010. The Shareholders’ Mandate will take effect from the date of the passing of the Ordinary
Resolution approving the Shareholders’ Mandate until the next Annual General Meeting of the Company
1.3 There are no modifications to the existing Shareholders’ Mandate in relation to the nature of Interested Person Transactions which covers the
following categories of transactions:
1.3.1 franchising, distribution and licensing agreements

1.3.2 the sale of healthy lifestyle products
1.4 There are no modifications to the review procedures for such transactions (as described in paragraph 3.4)
2. Chapter 9 of the Listing Manual

2.1 Chapter 9 (“Chapter 9”) of the Listing Manual of the SGX-ST deals with transactions in which a listed company or any of its subsidiaries or associated
companies (that are not listed on the SGX-ST or an approved exchange, provided that the listed group, or the listed group and its interested
person(s) (as defined in paragraph 2.5.1) has control over) proposes to enter with a party who is an Interested Person (as defined below) of the listed
company.
2.2 Save for transactions which are not considered to put the listed company at risk and which are therefore excluded from the ambit of Chapter 9,
shareholder approval and/or an immediate announcement would be required in respect of transactions with Interested Persons if certain financial
thresholds are reached or exceeded. Specifically, an immediate announcement is required for the following transactions of a certain threshold
where:-
2.2.1 the value of a proposed transaction is equal to or exceeds 3% of the Group’s latest audited NTA; or
2.2.2 the aggregate value of all transactions entered into with the same Interested Person during the same financial year, is equal to or more than
3% of the Group’s latest audited NTA. An announcement will have to be made immediately of the latest transaction and all future transactions
entered into with that same interested person during the financial year,
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; or

2.2.4 the aggregate value of all transactions (including the subject transaction) entered into with the same Interested Person during the same
financial year, is equal to or more than 5% of the Group’s latest audited NTA. The aggregation will exclude any transaction that has been
approved by shareholders previously, or is the subject of aggregation with another transaction that has 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 for recurrent transactions
with Interested Person of a revenue or trading nature necessary for its day-to-day operations such as sales of 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 officer or controlling shareholder of the listed company, or an associate of such
director, chief executive officer 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 shares in the listed
company (unless otherwise excepted by SGX-ST) or in fact exercises control over a company; and
2.5.3 an “associate” in relation to any director, chief executive officer or controlling shareholder (being an individual) means his immediate family
(i.e., spouse, children, adopted children, step-children, siblings and parents), the trustees of any trust of which he or his immediate family is
a beneficiary or, in the case of a discretionary trust, is a discretionary object, and any 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 or holding company or is a subsidiary of such holding company or one in the equity of which it and/or
such other company or companies taken together (directly or indirectly) have an interest of 30% or more.
.
3. SHAREHOLDERS’ MANDATE
3.1 Background
3.1.1 The principal activities of OSIM are marketing, distributing and franchising of a comprehensive range of healthy lifestyle products. Other than
Daito-OSIM Healthcare Appliance (Suzhou) Co., Ltd, and Daito-OSIM (Thailand) Co., Ltd, all the Group’s production needs are outsourced, for
example, to contract manufacturers in Japan, China and Taiwan as the Group focuses on its strengths in marketing and brand management.
As at the Latest Practicable Date, the Group has 1,036 point-of-sales outlets over 29 countries worldwide.
3.1.2 It is envisaged that in the normal course of business of the Group, transactions involving the sale, purchase, provision or supply of services
and/or products between the Group and Interested Persons will likely occur from time to time. Such transactions include, but are not limited
to, licensing and distribution agreements, franchise agreements, transactions of a revenue and trading nature.

3.1.3 The Directors are seeking the approval from Shareholders for the proposed renewal, of the Shareholders’ Mandate for the Group to enter,
in their normal course of business, with the class of Interested Persons described in paragraph 3.3, into the Interested Person Transactions
described in paragraph 3.2, provided that such transactions are made at arm’s length and on 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 AGM until the next
annual general meeting of the Company. Thereafter, approval from Shareholders for a subsequent renewal of the 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’ Mandate
3.2.1 Franchising, distribution and licensing agreements
Within the ambit of this category are franchising arrangements with FK Marketing Ltd, and distribution and licensing agreements with the
PRC affiliates (as defined in paragraph 3.3.1).
3.2.2 Sales of healthy lifestyle products
This category covers the sale of healthy lifestyle products such as, but not limited to, massage chairs, foot reflexology rollers, handheld
massagers and fitness equipments to Interested Persons, including, without limitation, agreements for the sale, supply and distribution of
such products.
3.3 Class of Interested Persons
3.3.1 Interested Person refers to a director, chief executive officer or controlling shareholder of OSIM, or an associate (as defined in paragraph
2.5.3 of the Appendix) of such director, chief executive officer 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
(the above collectively known as the “PRC affiliates”)
– FK Marketing Ltd
Note: 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. Ms Tao Dong Mei and OSIM
(Langfang) Co., Ltd each owns 50 per cent in OSIM (Guangzhou) Co., . Mr Francis Leow Lian Teck who is the brother of Mr Leow
Lian Soon owns 50 percent interest in the shares of FK Marketing Ltd.
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 of any one or more of
the persons named above. The term “associate” has the meaning set out in paragraph 2.5.3 of the Appendix.
3.3.3 Transactions with Interested Persons which do not fall within the ambit of the Shareholders’ Mandate shall be subject to the relevant
provisions of Chapter 9 of the Listing Manual.

3.4 Review Procedures for Interested Person Transactions
3.4.1 To ensure that the Interested Person Transactions arising in the normal course of business of the Group are undertaken at arm’s length
and on the Group’s normal commercial terms, and will not be prejudicial to the interests of the Company and its minority Shareholders, the
following guidelines will be implemented for the review and approval of Interested Person Transactions under the proposed renewal of the
Shareholders’ Mandate:-
(a) Franchising, distribution and licensing agreements

No franchising, distribution and licensing fees are payable by the PRC Affiliates.
(b) Sales of healthy lifestyle products

The sale of healthy lifestyle products by the Group shall not be approved unless the pricing policy and the terms are no more
favourable to the Interested Person than the usual commercial terms extended to unrelated third parties taking into consideration
factors such as, but not limited to, market conditions, brand awareness and tax structures, in the relevant markets.
The selling price of products is reviewed by the Chief Executive Officer, the Chief Operating Officer and the Chief Financial Officer on
a regular basis.
The following transactions are subject to review by the Audit Committee and approval by the Board of Directors:-
(i) transactions of value above $1 million; or

(ii) transactions with the same Interested Person with aggregated value of above 3% of the Company’s NTA. The Audit Committee
will review the transactions which are subject to the aggregation.
3.4.2 Each Interested Person Transaction will be properly documented and submitted to Audit Committee which will review such transactions on
a quarterly basis to ensure that they are carried out on normal arm’s length and commercial terms.
3.4.3 In addition to the guidelines set out above, the Audit Committee of the Company will also undertake the following periodic reviews:
(a) the Audit Committee will carry out an annual review to ascertain that the established guidelines and procedures for the Interested
Person Transactions have been compiled with; and
(b) the Audit Committee will consider from time to time whether the established guidelines and procedures for the Interested Person
Transactions have become inappropriate or are unable to ensure that the transactions will be on the Group’s normal commercial
terms and will not be prejudicial to the interests of the Company and its minority Shareholders.
(c) If a member of the Audit Committee has an interest in an Interested Person Transaction to be reviewed by the Audit Committee,
he will abstain from any decision-making in respect of that transaction and the review and approval of that transaction will be
undertaken by the remaining members of the Audit Committee.

4. Rationale and Benefit

The Shareholders’ Mandate will enhance the ability of companies in the Group to pursue business opportunities which are time-sensitive in nature,
and will eliminate the need for OSIM to announce, or to announce and convene separate general meetings on each occasion to seek Shareholder
prior approval for the entry by the relevant company in the Group into such transactions. This will substantially reduce the expenses associated with
the convening of general meetings on an ad hoc basis, improve administrative efficacy considerably, and allow manpower resources and time to be
channeled towards attaining other corporate objectives.
5. Validity Period of the Shareholders Mandate

The renewal of the Shareholders Mandate will take effect from the passing of the ordinary resolution relating thereto, and will (unless revoked or
varied by the Company in general meeting) continue in force until the next Annual General Meeting of the Company following thereafter. Approval
from Shareholders will be sought for the renewal of the Shareholders Mandate at the subsequent Annual General Meeting of the Company and
each Annual General Meeting thereafter, subject to satisfactory review by the Audit Committee of its continued application to the transactions with
Interested Persons.
6. Disclosure of Interested Person Transactions pursuant to Shareholders Mandate

6.1. The Company will announce the aggregate value of transactions conducted with Interested Persons pursuant to the Shareholders Mandate
for the quarterly financial periods which the Company is required to report on pursuant to the Listing Manual and within the time required for
the announcement of such report.
6.2. Disclosure will also be made in the Company’s Annual Report of the aggregate value of transactions conducted with Interested Persons
pursuant to the Shareholders Mandate during the financial year, and in the Annual Reports for subsequent financial years that the Shareholders
Mandate continues in force, in accordance with the requirements of Chapter 9 of the Listing Manual.
7. INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS

7.1 As at the Latest Practicable Date, the direct and indirect interests of each of the Directors in the Shares and Share Options of the Company
are as follows:-
Number of Shares Number of Warrants Number of shares
Direct Interest Indirect Interest Direct Interest Indirect Interest comprised in
outstanding Share
Number %(1) Number %(1) Number %(2) Number %(2)
Options
Ron Sim Chye Hock 243,757,978 36.78 161,320,157 24.34 72,691,666 52.85 1,030,473 0.75 –
Teo Sway Heong 5,161,547 0.78 399,916,588 60.35 1,030,473 0.75 72,691,666 52.85 –
Teo Chay Lee 1,954,000 0.29 300,000 0.05 371,122 0.27 – – 788,040
Leow Lian Soon 2,550,000 0.38 67,500 0.01 304,614 0.22 – – 40
Lee Hwai Kiat 1,720,000 0.26 950,000 0.14 71,076 0.05 – – 213,120
Tan Soo Nan – – – – – – – – –
Sin Boon Ann – – – – – – – – –
Khor Peng Soon 52,000 0.008 – – 29,446 0.02 – – –
Note:-
(1)
Based on the total issued and fully paid-up ordinary share capital (including treasury shares) of 662,662,396 shares as at the Latest Practicable
Date
(2)
Based on the total issued warrants of 137,531,862 as at the Latest Practicable Date

7.2 Substantial Shareholders as at 17 February 2010, being the Latest Practicable Date, the sole substantial Shareholder of the Company is Mr Ron Sim
Chye Hock who has a direct interest in 243,757,978 shares and a deemed interest in 161,320,157 shares, together comprising 61.13 per cent of
the total issued and fully paid-up ordinary share capital of the Company.
7.3 Substantial Warrantholders as at 17 February 2010, being the Latest Practicable Date, the sole substantial Warrantholder of Company is Mr Ron Sim
Chye Hock who has a direct interest in 72,691,666 warrants and a deemed interest in 1,030,473 warrants, together comprising 53.60 per cent of
the total issued warrants of the Company.
7.4 Mr Ron Sim Chye Hock and Mr Leow Lian Soon will abstain, and have undertaken to ensure that their associates will abstain, from voting at the AGM
in respect of the Shares held by them respectively on Resolution 9 in the Notice of AGM on page 140 of the Annual Report relating to the proposed
renewal of, the Shareholders’ Mandate.
8. Statement of the Audit Committee

The Audit Committee of the Company has reviewed the terms of the proposed Shareholders’ Mandate subject to renewal. Having considered, inter
alia, the scope, the guidelines on review procedures, the rationale and the benefits of the Shareholders’ Mandate, the Audit Committee confirms
that
(i) the review procedures for determining the prices of Interested Person Transactions have not changed since approval for the Shareholders’
Mandate was last given; and
(ii) the review procedures referred to in the above paragraph are sufficient to ensure that the Interested Person Transactions will be transacted
on normal commercial terms and will not be prejudicial to the Shareholders nor disadvantageous to the Group. However, should the Audit
Committee subsequently no longer be of this opinion, the Company will revert to the Shareholders for a fresh mandate based on new review
procedures for transactions with Interested Persons.
An independent financial adviser’s opinion is not required for renewal of this general mandate as the Audit Committee has confirmed that the
methods and procedures for determining the transaction prices have not changed since the last Shareholders’ approval and the foregoing said
methods and procedures are sufficient to ensure that the transactions will be carried out on normal commercial terms and will not be prejudicial to
the interests of the Company and its minority shareholders.
9. DIRECTORS’ RECOMMENDATION
The Directors who are considered independent for the purpose of the proposed renewal of the Shareholders’ Mandate are Mr Khor Peng Soon, Mr
Tan Soo Nan and Mr Sin Boon Ann (the “Independent Directors”). The Independent Directors are of the opinion that it is in the interests of the Group
to be permitted to enter into the transactions in their normal course of business with the class of Interested Persons described in paragraph 3.3 of
this Appendix provided that such transactions are made at arm’s length and on normal commercial terms and will not be prejudicial to the interest
of the Company and its minority Shareholders, and in accordance with the guidelines set out in paragraph 3.4 of this Appendix. They accordingly
recommend that Shareholders vote in favour of Resolution 9 set out in the Notice of AGM on page 140 of this Annual Report.
10. APPROVALS AND RESOLUTIONS

Your approval for the proposed renewal of the Shareholders’ Mandate is sought at the Company’s AGM to be held at 65 Ubi Avenue 1, OSIM
Headquarters, Singapore 408939 on 12 April 2010 at 6.30 pm or immediately after the AGM.

11. ACTION TO BE TAKEN BY SHAREHOLDERS

If a Shareholder is unable to attend the AGM and wishes to appoint a proxy to attend and vote on his behalf, he should complete, sign and return the
enclosed Proxy Form in accordance with the instructions printed thereon as soon as possible and, in any event, so as to arrive at the registered office
of the Company at 65 Ubi Avenue 1, OSIM Headquarters, Singapore 408939 not later than 48 hours before the time fixed for the AGM. Completion
and return of the Proxy Form by a Shareholder does not preclude him from attending and voting at the AGM if he so wishes.
12. DOCUMENTS FOR INSPECTION

The following documents may be inspected at the registered office of the Company during normal business hours from the date hereof up to and
including the date of the AGM:-
(i) the Memorandum and Articles of Association of the Company; and
(ii) the Annual Report of the Company and of the Group for the financial year ended 31 December 2009.
13. DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors collectively and individually accept responsibility for the accuracy of the information given in Appendix I and confirm, having made
all reasonable enquiries, that to the best of their knowledge and belief, the facts stated and the opinions expressed in this Appendix are fair and
accurate in all material respects as at the date hereof and that there are no other material facts the omission of which would make any statement in
this Appendix I misleading.
Yours faithfully
Ron Sim Chye Hock

Chairman
for and on behalf of the Board

APPENDIX II

(Incorporated in the Republic of Singapore)
(Company Registration No. 198304191N)
APPENDIX II IN RELATION TO DETAILS OF THE

PROPOSED RENEWAL OF THE SHARE
BUY-BACK MANDATE
17 February 2010
This Appendix II is circulated to Shareholders of OSIM International Ltd (the “Company”) together with the Company’s Annual Report. Its purpose is to
provide Shareholders with the relevant information relating to, and to seek Shareholders’ approval for, the renewal of the Share Buy-back Mandate to be
tabled at the Annual General Meeting to be held on 12 April 2010 at 6.30pm at 65 Ubi Avenue 1 OSIM Headquarters Singapore 408939.
The Notice of Annual General Meeting and a Proxy Form are enclosed with the Annual Report. The Singapore Exchange Securities trading Limited takes
no responsibility for the correctness of any of the statements made, reports contained/referred to, or opinions expressed in this Appendix.

APPENDIX II (CONT’D)
1. INTRODUCTION
On 18 December 2009, the Company obtained shareholders’ approval at the Extraordinary General Meeting (“2009 EGM”) of the Company to
authorise the Directors to exercise all powers of the Company to purchase acquire its issued ordinary shares in the capital of the Company (the
“Shares”) (“Share Buy-back Mandate”) on the terms of the Share Buy-back Mandate which has taken effect from the date of 2009 EGM until the
date on which the next annual general meeting (“AGM”) of the Company is held or is required by applicable law to be held, whereupon it will lapse
unless renewed at such meeting. Accordingly, approval for the renewal of the Share Buy-back Mandate will be sought again at the AGM to be held
on 12 April 2010.
2. DEFINITIONS
In this Circular, the following definitions apply throughout unless otherwise stated:
General
“Articles” : the Articles of Association of the Company, as amended from time to time
“Audit Committee” : the audit committee of the Company as at the date of this Circular, comprising of Mr Tan Soo Nan (Chairman),
Mr Khor Peng Soon and Mr Sin Boon Ann
“CDP” : the Central Depository (Pte) Limited
“CLOB trading system” : the Central Limit Order Book trading system
“Code” : Singapore Code on Take-overs and Mergers, as amended, supplemented or modified from time to time
“Companies Act” : the Companies Act, Chapter 50, of Singapore as amended or modified from time to time
“Companies (Amendment) Act” : the Companies (Amendment) Act 2005 of Singapore
“Company” or “OSIM” : OSIM International Ltd
“Directors” : the Directors of the Company for the time being
“Group” : the Group refers to the Company, its subsidiaries, joint ventures and associated companies
“Latest Practicable Date” : the latest practicable date prior to the printing of this Appendix, being 17th February 2010

“Listing Manual” : the listing manual of the SGX-ST, which became effective on July 1, 2002, including amendments made
thereto up to the date of this Circular.
“Maximum Price” : The maximum price to be paid for the Shares as determined by the Directors under paragraph 2.3.4 of the
Letter to Shareholders contained in this Circular
“Notice of AGM” : the notice of AGM as set out on page 138 of this Annual Report
“NTA” : net tangible assets
“SGX-ST” : the Singapore Exchange Securities Trading Limited
“Securities Account” : securities accounts maintained by Depositors with CDP, but not including securities accounts maintained
with a Depository Agent
“Shares” : ordinary shares in the capital of the Company
“Share Buy-back Mandate” : A general unconditional mandate given by Shareholders to authorise the Directors to purchase or acquire,
on behalf of the Company, Shares, in accordance with the terms set out in the Circular as well as the rules
and regulations set forth in the Companies Act and the Listing Manual
“Share Options” : options to subscribe for new Shares granted pursuant to share option schemes/plans implemented by the
Company
“Shareholders” : registered holders of Shares, except that where the registered holder is CDP, the term “Shareholders” shall,
where the context admits, mean the Depositors whose Securities Account are credited with Shares
“Warrants” : 137,542,827 Warrants issued during a Rights issue of Warrants on 28 May 2008 at an issue price of S$0.09
for each Warrant, each Warrant carrying the right to subscribe for one (1) ordinary share in the capital of the
company at an exercise price of S$0.35 for each new share.
“$” and “cents” : Singapore dollars and cents, respectively
“%” or “per cent” : Per centum or percentage

The terms “Depositor” and “Depository Agent” shall have the meanings ascribed to them respectively in Section 130A of the Companies Act.
Words importing the singular shall, where applicable, include the plural and vice versa. Words importing the masculine gender shall, where applicable,
include the feminine and neuter genders. References to persons shall include corporations.
Any reference in this Appendix to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defined under
the Companies Act or any statutory modification thereof and not otherwise defined in this Circular shall have the same meaning assigned to it under the
Companies Act or any statutory modification thereof, as the case may be.
Any reference to a time of day in this Circular is made by reference to Singapore time unless otherwise stated.

3 RENEWAL OF THE SHARE BUY-BACK MANDATE
3.1 Rationale of Share Buy-back Mandate

The renewal of the Share Buy-back Mandate would give the Company the flexibility to undertake buy-backs of the Shares at any time, subject
to market conditions, during the period when the Share Buy-back Mandate is in force. Further, Share purchases provide the Company with a
mechanism to facilitate the return of surplus cash over and above its ordinary capital requirements in an expedient and cost-efficient manner. The
Directors also expect that Share buy-backs may also help mitigate against short term volatility of share price and offset the effects of short term
speculation. Share buy-backs will allow the Directors greater flexibility over the Company’s share capital structure with a view to enhancing the
earnings and/or net asset value per share.
Shareholders can be assured that Share buy-backs by the Company would be made in circumstances where it is considered to be in the best
interests of the Company, after taking into account the amount of surplus cash available and the prevailing market conditions. Further, the Directors
do not propose to carry out buy-backs to such an extent that would, or in circumstances that might, result in a material adverse effect on the
liquidity, the orderly trading of the Shares, the working capital requirements of the Company or its gearing positions which are, in the opinion of the
Directors, appropriate from time to time, or result in the Company being de-listed from the SGX-ST. For example, the Directors will ensure that the
Share buy-back will not be carried out to such an extent that the free float of the Company’s Shares held by the public falls to below ten per cent.
(10%).
3.2 Share Buy-back Mandate

Approval is being sought from Shareholders at the AGM for the renewal of the Share Buy-back Mandate for the purchase by the Company of its
issued Shares. If approved, the Share Buy-back Mandate will take effect from the date of the AGM and continue in force until the date of the next
annual general meeting of the Company or such date as the next annual general meeting is required by law to be held, unless prior thereto, Share
buy-backs are carried out to the full extent mandated or the Share Buy-back Mandate is revoked or varied by the Company in a general meeting.
The Share Buy-back Mandate will be put to Shareholders for renewal at each subsequent annual general meeting of the Company.
Any purchase of its Shares by the Company has to be made in accordance with, and in the manner prescribed by, the Companies Act, the Listing
Rules and such other laws and regulations as may for the time being be applicable.
3.3 Terms of the Proposed Share Buy-back Mandate

The authority and limitations placed on the Share buy-back Mandate, if renewed at the AGM, are substantially the same as previously approved by
the Shareholders at the EGM. The authority and limits on the Share Buy-back Mandate are summarised below:
3.3.1 Maximum number of Shares

Only Shares which are issued and fully paid-up may be purchased or acquired by the Company. The total number of Shares that may be
purchased or acquired by the Company is limited to that number of Shares representing not more than ten per cent. (10%) of the issued
ordinary share capital of the Company as at the date of the EGM at which the Share Buy-back Mandate is approved (“Approval Date”).
For the purposes of calculating the percentage of issued Shares, any Shares which are held by the Company as treasury shares will be
disregarded for the purposes of computing the ten per cent. (10%) limit. For illustrative purposes, on the basis of 652,662,396 Shares in
issue as at the Latest Practicable Date, not more than 652,662,396 Shares

(representing ten per cent. (10%) of the Shares in issue as at that date) may be purchased or acquired by the Company pursuant to the
proposed Share Buy-back Mandate.
3.3.2 Duration of authority

Purchases or acquisitions of Shares may be made, at any time and from time to time, from the Approval Date up to the earlier of:
(i) the date on which the next annual general meeting of the Company is held or required by law to be held;
(ii) the date on which the authority contained in the Share Buy-back Mandate is varied or revoked by the Company in a general
meeting; or
(iii) the date on which the Share buy-backs are carried out to the full extent mandated.
3.3.3 Manner of purchases or acquisitions of Shares

Purchases or acquisitions of Shares may be made by way of:
(i) on-market purchases (“Market Purchases”), transacted on the SGX-ST through the SGX-ST’s CLOB trading system or, as the case
may be, any other stock exchange on which the Shares may for the time being be listed and quoted, through one or more duly
licensed stockbrokers appointed by the Company for the purpose; and/or
(ii) off-market purchases (“Off-Market Purchases”) effected pursuant to an equal access scheme (as defined in section 76C of the
Companies Act).
The Directors may impose such terms and conditions, which are consistent with the Share Buy-back Mandate, the Listing Rules and the
Companies Act, as they consider fit in the interests of the Company in connection with or in relation to an equal access scheme or schemes.
Under the Companies Act, an equal access scheme must satisfy all the following conditions:
(i) offers for the purchase of issued Shares shall be made to every person who holds issued Shares to purchase or acquire the same
percentage of their issued Shares;
(ii) all of those persons shall be given a reasonable opportunity to accept the offers made; and
(iii) the terms of all the offers are the same, except that there shall be disregarded:
(a) differences in consideration attributable to the fact that the offers may relate to Shares with different accrued dividend
entitlements;
(b) (if applicable) differences in consideration attributable to the fact that the offers relate to Shares with different amounts
remaining unpaid; and
(c) differences in the offers introduced solely to ensure that each member is left with a whole number of Shares.
In addition, the Listing Rules provide that, in making an Off-Market Purchase, the Company must issue an offer document to all Shareholders
which must contain at least the following information:
(i) the terms and conditions of the offer;

(ii) the period and procedures for acceptances;

(iii) the reasons for the proposed Share buy-back;
(iv) the consequences, if any, of Share buy-backs by the Company that will arise under the Code or other applicable takeover rules;
(v) whether the Share buy-back, if made, would have any effect on the listing of the Shares on the SGX-ST; and
(vi) details of any Share buy-backs (whether Market Purchases or Off-Market Purchases) made by the Company in the previous twelve
(12) months, giving the total number of Shares purchased, the purchase price per Share or the highest and lowest prices paid for
the purchases, where relevant, and the total consideration paid for the purchases.
3.3.4 Maximum purchase price
The purchase price (excluding brokerage, stamp duties, applicable goods and services tax and other related expenses) to be paid for the
Shares will be determined by the Directors.
However, the purchase price to be paid for a Share as determined by the Directors must not exceed:
(i) in the case of a Market Purchase, one hundred and five per cent. (105%) of the Average Closing Price (as defined
hereinafter); and
(ii) in the case of an Off-Market Purchase pursuant to an equal access scheme, one hundred and ten per cent. (110%) of the Average
Closing Price, (the “Maximum Price”) in either case, excluding related expenses of the purchase or acquisition.
For the above purposes:

“Average Closing Price” means the average of the closing market prices of the Shares over the last five (5) market days, on which
transactions in the Shares were recorded, immediately preceding the day of the Market Purchase, and deemed to be adjusted for any
corporate action that occurs after such five-market day period;
“day of the making of the offer” means the day on which the Company announces its intention to make an offer for the purchase of Shares
from Shareholders, stating the purchase price (which shall not be more than the Maximum Price calculated on the foregoing basis) for each
Share and the relevant terms of the equal access scheme for effecting the Off-Market Purchase; and
“market day” means a day on which the SGX-ST is open for trading in securities.
3.4 Status of purchased or acquired Shares

Under the Companies Act, any Shares purchased or acquired by the Company are deemed cancelled immediately on purchase or acquisition,
and all rights and privileges attached to those Shares expire on cancellation, unless such Shares are held by the Company as treasury shares.
Accordingly, the total number of issued Shares will be diminished by the number of Shares purchased or acquired by the Company and which are
not held as treasury shares.
3.5 Treasury Shares

Under the Companies Act, Shares purchased or acquired by the Company may be held or dealt with as treasury shares. Some of the provisions
relating to treasury shares under the Companies Act, are summarised below:-

3.5.1 Maximum Holdings
The number of Shares held as treasury shares cannot at any time exceed ten per cent. (10%) of the total number of issued Shares.
3.5.2 Voting and Other Rights
The Company cannot exercise any right in respect of treasury shares. In particular, the Company cannot exercise any right to attend or vote
at meetings and for the purposes of the Companies Act, the Company shall be treated as having no right to vote and the treasury shares
shall be treated as having no voting rights.

In addition, no dividend may be paid, and no other distribution (whether in cash or otherwise) of the Company’s assets (including any
distribution of assets to members on a winding up) may be made, to the Company in respect of the treasury shares. However, the allotment
of Shares as fully paid bonus shares in respect of the treasury shares is allowed. Also, a subdivision or consolidation of any treasury share
into treasury shares of a smaller amount is allowed so long as the total value of the treasury shares after the subdivision or consolidation is
the same as before such subdivision or consolidation, as the case may be.
3.5.3 Disposal and Cancellation
Where Shares are held as treasury shares, the Company may at any time:-
(a) sell the treasury shares (or any of them) for cash;
(b) transfer the treasury shares (or any of them) for the purposes of or pursuant to an employees’ share scheme;
(c) transfer the treasury shares (or any of them) as consideration for the acquisition of shares in or assets of another company
or assets of a person;
(d) cancel the treasury shares (or any of them); or
(e) sell, transfer or otherwise use the treasury shares for such other purposes as may be prescribed by the Minister for
Finance.
3.6 Source of funds

Previously, any payment made by a company in consideration of the purchase or acquisition of its own Shares could only be made out of the
Company’s distributable profits. The Companies Act now permits the Company to pay for the consideration for the purchase or acquisition of its
Shares out of capital or profits provided the Company is solvent.
The Directors do not propose to exercise the Share Buy-back Mandate in a manner and to such an extent that the liquidity and capital adequacy
position of the Group would be materially adversely affected.
3.7 Financial Effects

The financial effects on the Company and the Group arising from purchases or acquisitions of Shares which may be made pursuant to the Share
Buy-back Mandate will depend on, inter alia, whether the Shares are purchased or acquired out of profits and/or capital of the Company, the
number of Shares purchased or acquired, the price paid for such Shares and whether the Shares purchased or acquired are held in treasury or
cancelled.

Under the Companies Act, purchases or acquisitions of Shares by the Company may be made out of the Company’s profits and/or capital so long
as the Company is solvent.
Where the consideration paid by the Company for the purchase or acquisition of Shares is made out of profits, such consideration (excluding
brokerage, commission, goods and services tax and other related expenses) will correspondingly reduce the amount available for the distribution
of cash dividends by the Company.
Where the consideration paid by the Company for the purchase or acquisition of Shares is made out of capital, the amount available for the
distribution of cash dividends by the Company will not be reduced.
The financial effects on the Company and the Group, based on the audited financial statements of the Company and the Group for the financial
year period from 1 January 2009 to 31 December 2009, are based on the assumptions set out below.
3.7.1 Number of Shares Acquired or Purchased
Although the Share Buy-back Mandate (if approved by Shareholders) will permit the Company to purchase or acquire up to 10% of its
issued Shares (excluding treasury shares), based on the audited financial statements of the Company and the Group for the financial period
from 1 January 2009 to 31 December 2009, the purchase or acquisition of up to 10% of its issued Shares would not result in negative
Shareholders’ funds. The illustrative financial effects shown below are based on a purchase or acquisition of Shares by the Company of up
to 2% of its issued Shares which, based on the number of issued and paid-up Shares as at the Latest Practicable Date and assuming no
further Shares are issued and no Shares are held by the Company as treasury shares on or prior to the EGM, is 652,662,396 Shares.
Shareholders should note that the financial effects set out below are for illustrative purposes only. It should be noted that the above analyses
are based on the audited financial statement for the financial year ended 31 December 2009 and is not necessarily representative or future
financial performance.
A 10% buy-back (and not any other percentage) was assumed so that a positive Shareholders’ funds could be maintained solely for the
purposes of these illustrative financial effects. Although the Share Buyback mandate would authorise the Company to purchase or acquire
up to ten per cent (10%) of the issued Shares, the Company may not necessarily purchase or acquire or be able to purchase or acquire
the entire ten per cent (10%) of the total issued ordinary share capital of the Company. In additional, the Company may cancel all or part
or the Shares repurchased or hold all or part of the Shares repurchased in treasury.
3.7.2 Maximum Price Paid for Shares Acquired or Purchased
In the case of Market Purchases by the Company and assuming that the Company purchases or acquires 13,053,248 Shares at the
maximum price of $0.6374 for one Share (being the price equivalent to 5% above the Average Closing Price of the Shares immediately
preceding the Latest Practicable Date), the maximum amount of funds required for the purchase or acquisition of 13,053,248 Shares is
$8,320,140.03.

In the case of Off-Market Purchases by the Company and assuming that the Company purchases or acquires 13,053,248 Shares at the
maximum price of $0.6677 for one Share (being the price equivalent to 10% above the Average Closing Price of the Shares immediately
preceding the Latest Practicable Date), the maximum amount of funds required for the purchase or acquisition of 13,053,248 Shares is
$8,715,653.69.
3.7.3 Illustrative Financial Effects
For illustrative purposes only and on the basis of the assumptions set out in paragraphs 2.7.1 and 2.7.2 above, the financial effects of
the purchase or acquisition of Shares by the Company pursuant to the Share Buy-back Mandate on the audited financial statements of
the Group and the Company for the financial year period from 1 January 2009 to 31 December 2009 are set out below and assuming the
following:
(a) the purchase or acquisition of 13,053,248 Shares by the Company pursuant to the Share Buy-back Mandate by way of Market
Purchases made entirely out of capital and cancelled or held in treasury;
(b) the purchase or acquisition of 13,053,248 Shares by the Company pursuant to the Share Buy-back Mandate by way of Market
Purchases made entirely out of borrowings and cancelled or held in treasury;
(c) the purchase or acquisition of 13,053,248 Shares by the Company pursuant to the Share Buy-back Mandate by way of Off-Market
Purchases made entirely out of capital and cancelled or held in treasury;
(d) the purchase or acquisition of 13,053,248 Shares by the Company pursuant to the Share Buy-back Mandate by way of Off-Market
Purchases made entirely out of borrowings and cancelled or held in treasury.
Market Purchases
The financial effects set out below are for illustrative purposes only. However, the illustrations are based on historical numbers for the
financial period from1 January 2009 to 31 December 2009 and are not necessarily representative of future financial performance.
Although the Share Buy-back Mandate would authorise the Company to purchase or acquire up to 10% of the issued Shares, the Company
may not necessarily purchase or acquire part of or the entire 10% of the issued Shares. In addition, the Company may cancel all or part of
the Shares repurchased or hold all or part of the Shares repurchased in treasury.
Even if the Share Buy-back Mandate is approved, the Directors will not exercise the Share Buy-back Mandate if the Group’s working capital
requirements, current dividend policy for the financial year ended 31 December 2009 and ability to service its debts would be adversely
affected.

Scenario 1
Market Purchases of up to 2% out of capital and cancelled
Group Company
Before Share Purchase After Share Purchase Before Share Purchase After Share Purchase
$’000 $’000 $’000 $’000
As at 31 December 2009(1)
Share Capital 49,252 49,252 49,252 49,252
Treasury Shares (2,289) (10,609) (2,289) (10,609)
Revenue Reserves 63,395 63,395 20,637 20,637
Capital Reserves 2,340 2,340 700 700
Warrant Reserve 12,191 12,191 12,191 12,191
Other Reserves (28,210) (28,210) – –
Shareholders’ Funds 96,679 88,359 80,491 72,171
NTA 82,871 74,551 80,671 72,351

Current Assets 166,477 158,157 50,449 42,129
Current Liabilities 122,731 122,731 64,741 64,741
Total Borrowings 35,379 35,379 28,445 28,445
Cash & Cash equivalents 63,234 54,914 27,187 18,867
Number of Shares(‘000) 662,516 649,463 662,516 649,463
Financial Ratios
Basic EPS (cents) 3.68 3.75 2.55 2.60
NTA per share (cents) 12.5 11.5 12.2 11.1
Gearing (%) – – 1.6 13.3
Current Ratio (times) 1.36 1.29 0.78 0.65

Scenario 2
Off-Market Purchases of up to 2% out of capital and cancelled
Group Company
$’000 $’000 $’000 $’000
Share Capital 49,252 49,252 49,252 49,252
Treasury Shares (2,289) (11,005) (2,289) (11,005)
Warrant Reserve 12,191 12,191 12,191 12,191
Other Reserves (28,210) (28,210) – –
NTA 82,871 74,155 80,671 71,955

Current Assets 166,477 157,761 50,449 41,733
Number of Shares(‘000) 662,516 649,463 662,516 649,463
Financial Ratios
Basic EPS (cents) 3.68 3.75 2.55 2.60
Gearing (%) – – 1.6 13.9
Note:
(1) The figures for the Group and the Company are based on the audited financial statements as at 31 December 2009.
Off-Market Purchases
The financial effects set out below are for illustrative purposes only. However, the illustrations are based on historical numbers for the financial
period from 1 January 2009 to 31 December 2009 and are not necessarily representative of future financial performance. Although the Share Buy-
back Mandate would authorise the Company to purchase or acquire up to 10% of the issued Shares, the Company may not necessarily purchase

or acquire part of or the entire 10% of the issued Shares. In addition, the Company may cancel all or part of the Shares repurchased or hold all or
part of the Shares repurchased in treasury.
Even if the Share Buy-back Mandate is approved, the Directors will not exercise the Share Buy-back Mandate if the Group’s working capital
requirements, current dividend policy for the financial year ended 31 December 2009 and ability to service its debts would be adversely affected.
Scenario 3
Market Purchases of up to 2% out of borrowings and cancelled
Group Company
$’000 $’000 $’000 $’000
Share Capital 49,252 49,252 49,252 49,252
Treasury Shares (2,289) (10,609) (2,289) (10,609)
Warrant Reserve 12,191 12,191 12,191 12,191
Other Reserves (28,210) (28,210) - –
NTA 82,871 74,551 80,671 72,351

Current Assets 166,477 166,477 50,449 50,449
Number of Shares(‘000) 662,516 649,463 662,516 649,463
Financial Ratios
Basic EPS (cents) 3.68 3.75 2.55 2.60
Gearing (%) – – 1.6 13.3

Scenario 4
Off-Market Purchases of up to 2% out of borrowings and cancelled
Group Company
$’000 $’000 $’000 $’000
Share Capital 49,252 49,252 49,252 49,252
Treasury Shares (2,289) (11,005) (2,289) (11,005)
Warrant Reserve 12,191 12,191 12,191 12,191
Other Reserves (28,210) (28,210) – –
NTA 82,871 74,155 80,671 71,955

Current Assets 166,477 166,477 50,449 50,449
Number of Shares(‘000) 662,516 649,463 662,516 649,463
Financial Ratios
Basic EPS (cents) 3.68 3.75 2.55 2.60
Gearing (%) – – 1.6 13.9
Note:
(1) The figures for the Group and the Company are based on the audited financial statements as at 31 December 2009.
3.8 Taxation
Shareholders who are in doubt as to their respective tax positions or the tax implications of Share purchases or acquisitions by the Company, or,
who may be subject to tax whether in or outside Singapore, should consult their own professional advisers.

3.9 Listing Status of the Shares

The Listing Manual specifies that a listed company shall report all purchases or acquisitions of its shares to the SGX-ST not later than 9.00 a.m.:
(a) in the case of a Market Purchase, on the market day following the day of purchase or acquisition of any of its shares; and (b) in the case of an
Off-Market Purchase under an equal access scheme, on the second market day after the close of acceptances of the offer. Such announcement
currently requires the inclusion of details of the total number of shares purchased, the purchase price per share or the highest and lowest prices
paid for such shares, as applicable.
While the Listing Manual does not expressly prohibit any purchase of shares by a listed company during any particular time or times, because the
listed company would be regarded as an “insider” in relation to any proposed purchase or acquisition of its issued shares, the Company will not
undertake any purchase or acquisition of Shares pursuant to the proposed Share Buy-back Mandate at any time after a price sensitive development
has occurred or has been the subject of a decision until the price sensitive information has been publicly announced. In particular, the Company
would not purchase or acquire any Shares through Market Purchases during the period of one month immediately preceding the announcement
of the Company’s full-year results and the period of two weeks before the announcement of the Company’s financial statements for each of the first
three quarters of its financial year.
The Listing Manual requires a listed company to ensure that at least full ten per cent. (10%) of any class of its listed securities must be held by public
shareholders. As at the Latest Practicable Date, approximately 36.78 per cent (36.78%) of the issued Shares are held by public Shareholders.
There are 137,531,862 warrants in issue of which approximately 45.85 per cent (45.85%) are held by public Shareholders. Accordingly, the
Company is of the view that there is a sufficient number of the Shares in issue held by public Shareholders which would permit the Company to
undertake purchases or acquisitions of its Shares through Market Purchases up to the full ten per cent (10%) limit pursuant to the Share Buy-back
Mandate without affecting the listing status of the Shares on the SGX-ST, and that the number of the Shares remaining in the hands of the public
will not fall to such a level as to cause market illiquidity or to affect orderly trading.
3.10 Take-over Obligations

Appendix 2 of the Take-over Code contains the Share Buy-Back Guidance Note. The take-over implications arising from any purchase or acquisition
by the Company of its Shares are set out below.
3.10.1 Obligation to make a Take-over Offer

If, as a result of any purchase or acquisition by the Company of its Shares, the proportionate interest in the voting capital of the Company of
a Shareholder and persons acting in concert with him increases, such increase will be treated as an acquisition for the purposes of Rule 14
of the Take-over Code. Consequently, a Shareholder or a group of Shareholders acting in concert with a Director could obtain or consolidate
effective control of the Company and become obliged to make an offer under Rule 14 of the Take-over Code.
3.10.2 Persons Acting in Concert

Under the Take-over Code, persons acting in concert comprise individuals or companies who, pursuant to an agreement or understanding
(whether formal or informal) co-operate, through the acquisition by any of them of shares in a company, to obtain or consolidate effective
control of that company.

Unless the contrary is established, the following persons will, inter alia, be presumed to be acting in concert:
(a) A company with any of its directors (together with their close relatives, related trusts as well as companies controlled by any of the
directors, their close relatives and related trusts);
(b) A company with its parent company, subsidiaries, its fellow subsidiaries, any associated companies of the above companies, and
any company whose associated companies include any of the above companies. For this purpose, a company is an associated
company of another company if the second company owns or control at least 20% but not more than 50% of the voting rights of
the first-mentioned company;
(c) A company with any of its pension funds and employee share schemes;
(d) A person with any investment company, unit trust or other fund in respect of the investment account which such person manages
on a discretionary basis;
(e) A financial or other professional adviser, with its client in respect of the shareholdings of the adviser and the persons controlling,
controlled by or under the same control as the adviser and all the funds which the adviser manages on a discretionary basis, where
the shareholding of the adviser and any of those funds in the client total 10% or more of the client’s equity share capital;
(f) Directors of a company, together with their close relatives, related trusts and companies controlled by any of them, which is subject
to an offer or where the directors have reason to believe a bona fide offer for their company may be imminent;
(g) Partners; and
(h) An individual, his close relatives, his related trusts, and any person who is accustomed to act according to his instructions and
companies controlled by any of the above.
The circumstances under which Shareholders of the Company (including Directors) and persons acting in concert with them respectively
will incur an obligation to make a take-over offer under Rule 14 after a purchase or acquisition of Shares by the Company are set out in
Appendix 2 of the Take-over Code.
3.11 Effect of Rule 14 and Appendix 2 of the Take-over Code

In general terms, the effect of Rule 14 and Appendix 2 is that, unless exempted (or if exempted, if such exemption is subsequently revoked), the
Directors of the Company and persons acting in concert with them will incur an obligation to make a take-over offer for the Company under Rule 14
if, as a result of the Company purchasing or acquiring Shares, the voting rights of such Directors and their concert parties would increase to 30% or
more, or if the voting rights of such Directors and their concert parties fall between 30% and 50% of the Company’s voting rights, the voting rights
of such Directors and their concert parties would increase by 1% in any period of six months.
Under Appendix 2, a Shareholder not acting in concert with the Directors of the Company will not be required to make a take-over offer under Rule
14 if, as a result of the Company purchasing or acquiring its Shares, the voting rights of such Shareholder in the Company would increase to 30%
or more, or, if such Shareholder holds between 30% and 50% of the Company’s voting rights, the voting rights of such Shareholder would increase
by more than 1% in any period of six months. Such Shareholder need not abstain from voting in respect of the resolution authorising the Share
Buy-back Mandate, unless so required under the Companies Act.

Based on substantial Shareholders’ notifications received by the Company as at the Latest Practicable Date which is set out in paragraph 3 of this
Circular, none of the Substantial shareholders would become obliged to make a take-over offer for the Company under rule 14 of the Take-over
Code as a result of the purchase by the Company of the maximum limit of ten per cent. (10%) of its issued Shares.
Shareholders are advised to consult their professional advisers and/or the Securities Industry Council at the earliest opportunity as to whether an
obligation to make a takeover offer would arise by reason of any share purchase by the Company.
4 INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS
4.1 Directors
As at the Latest Practicable Date, the direct and indirect interests of each of the Directors in the Shares and Share Options of the Company
are as follows:-
Number of Shares Number of Warrants Number of shares
Direct Interest Indirect Interest Direct Interest Indirect Interest comprised in
outstanding Share
Number %(1) Number %(1) Number %(2) Number %(2)
Options
Ron Sim Chye Hock 243,757,978 36.78 161,320,157 24.34 72,691,666 52.85 1,030,473 0.75 –
Teo Sway Heong 5,161,547 0.78 399,916,588 60.35 1,030,473 0.75 72,691,666 52.85 –
Teo Chay Lee 1,954,000 0.29 300,000 0.05 371,122 0.27 – – 788,040
Leow Lian Soon 2,550,000 0.38 67,500 0.01 304,614 0.22 – – 40
Lee Hwai Kiat 1,720,000 0.26 950,000 0.14 71,076 0.05 – – 213,120
Tan Soo Nan – – – – – – – – –
Sin Boon Ann – – – – – – – – –
Khor Peng Soon 52,000 0.008 – – 29,446 0.02 – – –
Note:-
(1)
Based on the total issued and fully paid-up ordinary share capital (including treasury shares) of 662,662,396 shares as at the Latest Practicable
Date
(2)
Based on the total issued warrants of 137,531,862 as at the Latest Practicable Date

4.2 Substantial Shareholders

As at the Latest Practicable Date, the only substantial Shareholder of the Company is Mr Ron Sim Chye Hock who has a direct interest in
243,757,978 shares and a deemed interest in 161,320,157 shares, together comprising 61.13 per cent of the total issued and fully paid-up
ordinary share capital of the Company.
4.3 Substantial Warrantholders

As at the Latest Practicable Date, the only substantial Warrantholder of the Company is Mr Ron Sim Chye Hock who has a direct interest in
72,691,666 warrants and a deemed interest in 1,030,473 warrants, together comprising 53.60 per cent of the total issued warrants of the
Company.
5. DIRECTORS’ RECOMMENDATION
Proposed Renewal of the Share Buy-back Mandate
The Directors are of the opinion that the proposed renewal of the Share Buy-back Mandate is in the best interest of the Company. Accordingly, they
recommend that Shareholders vote in favour of resolution 10 in the notice of AGM, being the ordinary resolution relating to the proposed renewal
of the Share Buy-back Mandate.
6. APPROVALS AND RESOLUTIONS

Your approval for the proposed renewal of the Share Buy-back Mandate is sought at the Company’s AGM to be held at 65 Ubi Avenue 1, OSIM
Headquarters, Singapore 408939 on 12 April 2010 at 6.30 pm or immediately after the AGM.
7. ACTION TO BE TAKEN BY SHAREHOLDERS

If a Shareholder is unable to attend the AGM and wishes to appoint a proxy to attend and vote on his behalf, he should complete, sign and return
the enclosed Proxy Form in accordance with the instructions printed thereon as soon as possible and, in any event, so as to arrive at the registered
office of the Company at 65 Ubi Avenue 1, OSIM Headquarters, Singapore 408939 not later than 48 hours before the time fixed for the AGM.
Completion and return of the Proxy Form by a Shareholder does not preclude him from attending and voting at the AGM if he so wishes.
8. DOCUMENTS FOR INSPECTION

The following documents may be inspected at the registered office of the Company during normal business hours from the date hereof up to and
including the date of the AGM:-
(iii) the Memorandum and Articles of Association of the Company; and
(iv) the Annual Report of the Company and of the Group for the financial year ended 31 December 2009.
9. DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors collectively and individually accept responsibility for the accuracy of the information given in Appendix II and confirm, having made
all reasonable enquiries, that to the best of their knowledge and belief, the facts stated and the opinions expressed in this Appendix are fair and
accurate in all material respects as at the date hereof and that there are no other material facts the omission of which would make any statement
in this Appendix II misleading

OSIM INTERNATIONAL LTD IMPORTANT:
[Company Registration No. 198304191N] 1. For investors who have used their CPF monies to buy OSIM International Ltd’s shares,
this Report is forwarded to them at the request of the CPF Approved Nominees and is
(Incorporated In The Republic of Singapore) sent solely FOR INFORMATION ONLY.
2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all
PROXY FORM
intents and purposes if used or purported to be used by them.
3. CPF investors who wish to attend the Meeting as an observer must submit their
requests through their CPF Approved Nominees within the time frame specified. If
they also wish to vote, they must submit their voting instructions to the CPF Approved
(Please see notes overleaf before completing this Form) Nominees within the time frame specified to enable them to vote on their behalf.
I/We,
of
being a member/members of OSIM International Ltd (the “Company”), hereby appoint:
Name NRIC/Passport No. Proportion of Shareholdings

No. of Shares %
Address
and/or (delete as appropriate)

Name NRIC/Passport No. Proportion of Shareholdings
No. of Shares %
Address
or failing the person, or either or both of the persons, referred to above , the Chairman of the Meeting as my/our proxy/proxies to vote for me/us on my/
our behalf at the Annual General Meeting (the “Meeting”) of the Company to be held on 12 April 2010 at 6.30 p.m. and at any adjournment thereof. I/
We direct my/our proxy/proxies to vote for or against the Resolutions proposed at the Meeting as indicated hereunder. If no specific direction as to voting
is given or in the event of any other matter arising at the Meeting and at any adjournment thereof, the proxy/proxies will vote or abstain from voting at
his/her discretion. The authority herein includes the right to demand or to join in demanding a poll and to vote on a poll.
(Please indicate your vote “For” or “Against” with a tick [√] within the box provided.)
No. Resolutions relating to: For Against

1 Directors’ Report and Audited Accounts for the year ended 31 December 2009
2 Declare a final one-tier tax exempt dividend of 1.00 cent per ordinary share for the year ended 31 December 2009
3 Re-election of Mr Tan Soo Nan as a Director
4 Re-election of Mr Sin Boon Ann as a Director
5 Approval of Directors’ fees amounting to S$147,500
6 Re-appointment of Messrs Ernst & Young LLP as Auditors
7 Authority to allot and issue new shares
8 Authority to allot and issue shares under the OSIM Share Option Scheme
9 Renewal of Shareholders’ Mandate for Interested Person Transactions
10 Renewal of Share Buy-back Mandate
Dated this day of 2010 Total number of Shares in: No. of Shares
(a) CDP Register
(b) Register of Members
Signature of Shareholder(s)
or, Common Seal of Corporate Shareholder
#

Notes :
1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as defined in Section
130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you have Shares registered in your name in the
Register of Members, you should insert that number of Shares. If you have Shares entered against your name in the Depository Register and Shares
registered in your name in the Register of Members, you should insert the aggregate number of Shares entered against your name in the Depository
Register and registered in your name in the Register of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be
deemed to relate to all the Shares held by you.
2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote in his/
her stead. A proxy need not be a member of the Company.
3. Where a member appoints two proxies, the appointments shall be invalid unless he/she specifies the proportion of his/her shareholding (expressed
as a percentage of the whole) to be represented by each proxy.
4. Completion and return of this instrument appointing a proxy shall not preclude a member from attending and voting at the Meeting. Any appointment
of a proxy or proxies shall be deemed to be revoked if a member attends the meeting in person, and in such event, the Company reserves the right
to refuse to admit any person or persons appointed under the instrument of proxy to the Meeting.
5. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 65 Ubi Avenue 1, OSIM Headquarters,
Singapore 408939 not less than 48 hours before the time appointed for the Meeting.
6. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the
instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an officer or
attorney duly authorised. Where the instrument appointing a proxy or proxies is executed by an attorney on behalf of the appointor, the letter or power
of attorney or a duly certified copy thereof must be lodged with the instrument.
7. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its
representative at the Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore.
General:
The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible, or where the true
intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition,
in the case of Shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being
the appointor, is not shown to have Shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the
Meeting, as certified by The Central Depository (Pte) Limited to the Company.

OSIM International Annual Reoprt 2009

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OSIM International Annual Reoprt 2009

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OSIM INTERNATIONAL LTD

Annual Report 2009

Net Cash Flows from 2009 2008 Growth

$ Sales $477m $457m +$20m

+ 181 % After tax $23m ($99m)

Net cash flows from $65m $23m +181%

Profit Before Tax

million Shareholders value

Profit after tax for the year was $23 million.

Revenue by Region – New Products Contributing

Region FY 2009 FY 2008

OSIM INTERNATIONAL LTD 03 ANNUAL REPORT 2009

Strengthened Balance Sheet – Net Cash Position

OSIM INTERNATIONAL LTD 04 ANNUAL REPORT 2009

Brand OSIM RICHLIFE GNC BROOKSTONE

North Asia China South Asia America

OSIM INTERNATIONAL LTD 05 ANNUAL REPORT 2009

My Dear Fellow Shareholders

Full year PBT $38 million

Net cash flows from operating activities $65 million +181%

OSIM INTERNATIONAL LTD 06 ANNUAL REPORT 2009

Increasing shareholders value

Growing our brands

Upholding corporate governance standards

OSIM INTERNATIONAL LTD 08 ANNUAL REPORT 2009

What is the outlook for 2010?

I am confident about the future. We Create Demand.

OSIM INTERNATIONAL LTD 09 ANNUAL REPORT 2009

UPHOLDING CORPORATE GOVERNANCE STANDARDS

We welcome to the Board:

First row left to right

Second row left to right

OSIM INTERNATIONAL LTD 10 ANNUAL REPORT 2009

First row left to right

Ms Teo Sway Heong

Mr Tan Soo Nan

Second row left to right

Mr Khor Peng Soon

Mr Sin Boon Ann

OSIM INTERNATIONAL LTD 11 ANNUAL REPORT 2009

OPTIMISTIC, COURAGEOUS & FORWARD LOOKING

Mr Tan Kia Tong

SHAREHOLDINGS (including deemed interests)

OSIM INTERNATIONAL LTD 12 ANNUAL REPORT 2009

Mr Jackson Tai Mr Ron Boire Ms Cynthia Poa

OSIM INTERNATIONAL LTD 13 ANNUAL REPORT 2009

Mr Ron Sim Chye Hock 51 Mr Peter Lee Hwai Kiat 46

Mr Charlie Teo Chay Lee 51

OSIM INTERNATIONAL LTD 14 ANNUAL REPORT 2009

Mr Sin Boon Ann, 51 Ms Celine Cha 42

Mr Tan Soo Nan, 61 Mr Jackson Tai, 58

OSIM INTERNATIONAL LTD 15 ANNUAL REPORT 2009

OSIM Singapore Team

OSIM Malaysia Team OSIM Hong Kong Team

OSIM Shanghai Team OSIM Taiwan Team

OSIM Romania OSIM Korea OSIM Saudi Arabia

OSIM India OSIM Guangzhou Team

OSIM International Business Team Global Active Team

OSIM Indonesia Team OSIM Beijing Team

HEARTS WINNING HEARTS

OSIM INTERNATIONAL LTD 20 ANNUAL REPORT 2009

2003 Launched a “four in one” new

Title sponsorship of OSIM