OSIM INTERNATIONAL LTD

Transcription

1 OSIM INTERNATIONAL LTD (Incorporated in the Republic of Singapore) (Registration No.: N) ANNOUNCEMENT OF UNAUDITED RESULTS FOR THE QUARTER ENDED 30 SEPTEMBER 2014 HIGHLIGHTS: ($ million) Q3 14 Q3 13 Growth 9M 14 9M 13 Growth Sales % % Operating EBITDA % % Profit before tax % % Profit after tax % % Basic earnings per share 2.11 cts 3.14 cts 9.87cts 10.21cts Interim dividend per share 1 ct 1 ct 4 cts 4 cts Fundamentals remain positive 9M Sales $513 million +10% 9M PBT $98 million +3% Interim dividend of 1 cent per share Cash & Cash Equivalents and Fixed Income Investments as at 30 September 2014 were $462 million (net $272 million) 1

2 REVIEW OF PERFORMANCE OF THE GROUP COMMENTARY ON CURRENT YEAR PROSPECTS Following 22 consecutive quarters of record profit and with a strong balance sheet following the recent convertible bond issue, OSIM has embarked on a period of increased investment across the group especially at TWG Tea and OSIM. New TWG Tea outlets have opened with supporting infrastructure including central kitchens, offices, warehouses and employees. The fundamentals remain positive as OSIM is the dominant brand in healthy lifestyle products in its key 5 countries of China, Taiwan, Hong Kong, Singapore and Malaysia, ONI is progressing steadily, while TWG Tea continues its outlet expansion opening its first outlet in China. We have 565 OSIM outlets. China continues to be our No.1 market and we are in 45 cities with 256 outlets. New products like uinfinity Luxe, udiva, usqueez Air and ushape Music will help us sustain our market leadership position. Our GNC outlets are doing well. GNC Taiwan is progressing well. There is a total of 231 GNC/RichLife outlets in ONI Global and we are growing our sales through new products. TWG Tea has 37 outlets. In Q3, we opened new outlets at Taipei 101 and Shanghai Grand Gateway. We are targeting to have about 45 outlets by end of the year. We are creating new lines of luxury tea like Imperial Oolong & Ti Kuan Yin, Iced Teabags and Christmas Collection. The directors are pleased to recommend an interim dividend of 1 cent per share. 2

3 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Note 3 months ended 30 Sep 9 months ended 30 Sep $'000 $'000 $'000 $'000 Revenue 158, , , ,050 Other income 1,776 4,424 10,611 10,302 Changes in inventories of trading goods (2,903) 9,304 5,930 15,614 Trading goods purchased (43,161) (57,247) (156,629) (157,486) Employee benefits expense (31,745) (26,699) (93,199) (79,727) Depreciation and amortisation expenses (5,538) (3,012) (16,363) (8,969) Other operating expenses (54,703) (51,826) (167,544) (156,624) Interest expenses (478) (1,413) (2,240) (4,211) Interest income 942 1,410 3,238 3,860 Share of results of associates 475 1,683 1,032 3,727 Profit before taxation 22,862 29,581 98,309 95,536 Taxation D (6,712) (6,685) (23,780) (21,076) Profit for the period 16,150 22,896 74,529 74,460 Other comprehensive income: Items that may be reclassified subsequently to profit or loss Foreign currency translation 3,535 (1,588) (2,105) 4,018 Other comprehensive income for the period, net of tax 3,535 (1,588) (2,105) 4,018 Total comprehensive income for the period 19,685 21,308 72,424 78,478 Profit attributable to: Equity holders of the Company 16,404 22,725 74,779 73,975 Non-controlling interests (254) 171 (250) ,150 22,896 74,529 74,460 Total comprehensive income attributable to: Equity holders of the Company 19,927 21,160 72,660 78,170 Non-controlling interests (242) 148 (236) ,685 21,308 72,424 78,478 Earnings per share (cents) - Basic F Diluted F

4 REVIEW OF PERFORMANCE OF THE GROUP Profit before tax of $23 million Q3 sales were $158 million +3%. TWG Tea became a subsidiary in October The overall weaker environment, including the loss of sales to Brookstone, has slowed topline sales growth for the group this quarter. Q3 profit before tax was $23 million. The increase in operating expenses was due to startup and legal costs at TWG Tea, increases in wages and rental has resulted in lower profit. During Q3, other income fell mainly due to higher foreign exchange losses. Interest expenses fell due to the conversion of convertible bonds. Share of results of associates is less mainly due to TWG Tea becoming a subsidiary. Q3 profit after tax was $16 million. Revenue by Region Q3 FY 2014 Q3 FY 2013 Region $m % $m % North Asia 80 51% 81 53% South Asia 67 42% 59 39% America/Africa/Europe/ Middle East/Oc eania 11 7% 13 8% Total % % Today OSIM operates in 29 countries around the world. For the 3 months ended 30 September 2014, South Asia sales increased mainly due to consolidation of sales of TWG Tea while sales in other parts of the world was lower due to lower sales to Brookstone. 4

5 CONSOLIDATED STATEMENT OF CASH FLOW 3 months ended 30 Sep 9 months ended 30 Sep $ 000 $ 000 $ 000 $ 000 Cash flow from operating activities Profit before taxation 22,862 29,581 98,309 95,536 Adjustments for: Share of profits of associates (475) (1,683) (1,032) (3,727) Depreciation of fixed assets 3,154 2,793 9,232 8,315 Amortisation of intangible assets 2, , Loss on disposal of fixed assets Gain on disposal of quoted equity shares (9) Fair value loss / (gain) on short term investments, net 300 (336) (1,140) 575 Impairment loss on fixed assets Impairment loss on quoted and unquoted equity shares Write-off of fixed assets Dividend income from quoted equity shares (152) (152) (304) (260) Interest income (942) (1,410) (3,238) (3,860) Interest expenses 478 1,413 2,240 4,211 Operating cash flows before working capital changes 27,719 30, , ,954 (Increase) / decrease in: Stocks 2,946 (9,557) (6,009) (15,873) Trade debtors 8,418 6,408 5,982 1,713 Other debtors, deposits and prepaid operating expenses (4,431) (2,906) (6,557) 56 Increase / (decrease) in: Trade and other creditors and provisions (18,303) (2,749) (18,403) 7,168 Deferred revenue 2, ,773 - Cash flow generated from operations 19,043 22,137 90,117 95,018 Income tax paid, net of refund (4,084) (6,236) (20,315) (22,707) Net cash flow generated from operating activities 14,959 15,901 69,802 72,311 5

6 CONSOLIDATED STATEMENT OF CASH FLOW (Continued) Cash flow from investing activities 3 months ended 30 Sep 9 months ended 30 Sep $ 000 $ 000 $ 000 $ 000 Purchase of fixed assets (9,500) (2,268) (16,130) (6,246) Proceeds from disposal of fixed assets Interest received 942 1,410 3,238 4,053 Dividend income from an associated company 1,209 1,359 1,209 1,359 Dividend income from quoted equity shares Acquisition of intangible assets (162) (161) (327) (278) Loan to a joint venture - (3,157) - (3,157) Repayment of loan from an associated company - 6,500-7,300 (Increase) / decrease in investment securities, net (3,090) 335 (2,845) (4,385) Net cash flow (used in) / generated from investing activities (10,440) 4,175 (14,531) (1,058) Cash flow from financing activities Acquisition of non-controlling interests (107) (1) (215) (45) Dividend paid to non-controlling interest (2,093) - (2,093) - Increase / (decrease) in bills payable to banks 5,489 4,269 (6,865) 4,406 Receipts from new finance lease obligations Repayment of bank loans - - (6,030) - Repayment of finance lease obligations (3) (17) (10) (22) Purchase of treasury shares - (1,176) - (6,894) Proceeds from exercise of employees share options Payment for redemption of convertible bonds (15,614) - (15,614) - Proceeds from issuance of convertible bonds (net) 167, ,970 - Dividend paid on ordinary shares (Note B) (7,791) (7,236) (29,897) (21,727) Interest paid (110) (1,767) (456) (1,994) Net cash flow generated from / (used in) financing activities 147,741 (5,812) 106,790 (25,995) Net increase in cash and cash equivalents 152,260 14, ,061 45,258 Net effect of exchange rates changes 3,026 (1,395) (2,050) 3,452 Cash and cash equivalents at beginning of period 272, , , ,731 Cash and cash equivalents at end of period (Note A) 427, , , ,441 6

7 CONSOLIDATED STATEMENT OF CASH FLOWS (Continued) Note A: Cash and cash equivalents Cash and cash equivalents included in the consolidated statement of cash flows comprise the following balance sheet amounts: 30-Sep Sep-13 $ 000 $ 000 Cash and bank balances 115,667 87,305 Fixed deposits 311, , , ,441 Note B: Dividend paid on ordinary shares During the 9 months ended 30 September 2014, the paid $29,897,000 (30 September 2013: $21,727,000), of which $7,227,000 (30 September 2013:$Nil) was declared out of profits in the previous year ended 31 December 2013, and $38,253,000 (30 September 2013: $36,187,000) was declared in the current year. 7

8 REVIEW OF PERFORMANCE OF THE GROUP ( CASH FLOW ) Positive Cash Flow 3 months net cash flow from operating activities was $15 million. During the quarter, we invested $4.5 million to open new outlets, upgrade existing outlets and expand development of TWG Tea outlets in North Asia (Q3 2013: $2.3 million). We also invested $5 million in office and warehouse space for own use in Taiwan (Q3 2013: Nil). Financing cash inflow increased mainly due to the issuance of new convertible bonds. As at 30 September 2014, the cash and cash equivalents of the stood at $427 million. Including fixed income investments of $35 million, total cash & cash equivalents and fixed income investments was $462 million. Global Network of Outlets Region 30-Sep Jun Mar Dec Sep-13 North Asia South Asia America/Africa/Europe/ Middle East/Oceania Total OSIM Outlets GNC/RichLife Outlets TWG Tea outlets Total We regularly review performance of our outlets and, during the 9-month period, we opened 9 OSIM outlets and closed 25 non-performing OSIM outlets in China. We have 256 outlets in China. For OSIM international business, during the year we opened 6 outlets in Australia. For ONI nutritional supplements, we continue to rationalise RichLife stores. During the quarter, we opened our first TWG Tea in China at Grand Gateway Shanghai. Total capital expenditure for the quarter was $9.5 million. 8

9 BALANCE SHEETS Company 30-Sep Dec Sep Dec-13 Note $ 000 $ 000 $ 000 $ 000 Assets Non-current assets Fixed assets 30,316 25,176 2,557 3,141 Subisidiaries , ,779 Associates 18,259 18,454 2,657 2,657 Intangible assets 182, , Deferred tax assets 5,499 5, Long-term investments 15,810 14,527 15,810 14,527 Long-term receivables 10,429 7,480 1,394 1,184 Current assets 263, , , ,288 Stocks 78,439 72,508 4,398 8,122 Trade debtors 36,932 42,913 5,230 6,428 Other debtors, deposits and prepaid operating expenses 18,200 13,100 1,609 2,479 Due from subsidiaries - - 6,849 9,570 Short-term investments 26,239 23,537 26,239 23,537 Fixed deposits 311, , ,500 10,544 Cash and bank balances 115, ,607 54,071 49, , , , ,561 Total assets 850, , , ,849 Current liabilities Trade and other creditors and provisions 95, ,589 37,645 47,479 Deferred revenue 8,236 4, Due to subsidiaries - - 4,014 2,551 Dividend payable 15,583 7,227 15,583 7,227 Provision for income tax 21,758 17,017 4,414 5,065 Bank loan B - 6, Obligations under finance leases current portion B Liability component of convertible bonds (unsecured) B - 119, ,038 Bills payable to banks (unsecured) B 22,628 29,493 22,628 29, , ,871 84, ,853 Net current assets / (liabilities) 423, , ,612 (100,292) 9

10 BALANCE SHEETS (Continued) Company 30-Sep Dec Sep Dec-13 Note $ 000 $ 000 $ 000 $ 000 Non-current liabilities Liability component of convertible bonds (unsecured) B 167, ,157 - Obligations under finance leases non-current portion B Provision for pension benefits 2,018 2, Deferred tax liabilities 35,826 37, ,046 39, , Total liabilties 368, , , ,891 Net assets 481, , ,527 64,958 Equity attributable to equity holders of the Company Share capital A 114,459 65, ,459 65,036 Treasury shares A (31) (36,962) (31) (36,962) Equity component of convertible bonds 1,180 3,773 1,180 3,773 Accumulated profits 287, , ,466 31,912 Enterprise expansion funds Capital reserves 28,460 6,206 23, Fair value adjustment reserve Revaluation reserve 2,724 2, Discount / (premium) on purchase of non-controlling interests' (NCIs') shares 2,275 (14,532) - - Foreign currency translation reserve (9,276) (7,156) , , ,527 64,958 Non-controlling interests 53,348 72, Total equity 481, , ,527 64,958 Total equity and liabilities 850, , , ,849 10

11 REVIEW OF PERFORMANCE OF THE GROUP ( BALANCE SHEET ) Strengthened Balance Sheet Net Cash Position As at 30 September 2014, we were in a net cash position of $237 million. Including fixed income investments of $35 million, the total net cash and fixed income investments was $272 million. Net assets as at 30 September 2014 were $482 million. The Board is pleased to propose an interim dividend of 1 cent per share. 11

12 STATEMENTS OF CHANGES IN EQUITY Attributable to equity holders of the Company 2014 Equity component Discount on Foreign of Enterprise purchase of Fair value currency Non- Share Treasury convertible Accumulated expansion Capital Revaluation NCIs' adjustment translation controlling Total capital shares bonds profits funds reserves reserve shares reserve reserve Total interests equity $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 At 1 July ,427 (31) , ,976 2,724 2, (12,799) 429,780 55, ,518 Profit for the period , ,404 (254) 16,150 Other comprehensive income Foreign currency translation ,523 3, ,535 Other comprehensive income for the period Total comprehensive income for the period Contributions by and distributions to equity holders ,523 3, , , ,523 19,927 (242) 19,685 Redemption of convertible bonds - - (484) Dividend on ordinary shares (23,374) (23,374) - (23,374) Issue of convertible bonds - - 1, ,180-1,180 Dividend to NCI (2,093) (2,093) New shares issued pursuant to convertible bonds conversion 1,032 - (32) ,000-1,000 Total contributions by and distributions to equity holders 1, (23,374) (21,194) (2,093) (23,287) 12

13 STATEMENTS OF CHANGES IN EQUITY (Continued) Attributable to equity holders of the Company 2014 (cont'd) Equity component Discount on Foreign of Enterprise purchase of Fair value currency Non- Share Treasury convertible Accumulated expansion Capital Revaluation NCIs' adjustment translation controlling Total capital shares bonds profits funds reserves reserve shares reserve reserve Total interests equity $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 Changes in ownership interests in subsidiaries that do not result in a loss of control Premium on purchase of NCIs' shares (52) - - (52) - (52) Acquisition of non-controlling interest (55) (55) Total changes in ownership interests in subsidiaries that do not result in a (52) - - (52) (55) (107) loss of control Total transactions with equity holders 1, (23,374) (52) - - (21,246) (2,148) (23,394) in their capacity as equity holders At 30 September ,459 (31) 1, , ,460 2,724 2, (9,276) 428,461 53, ,809 13

14 STATEMENTS OF CHANGES IN EQUITY (Continued) Attributable to equity holders of the Company 2013 Equity component of convertible Premium on purchase of NCIs' Foreign currency translation Enterprise Fair value Non- Share Treasury Accumulated expansion Capital Revaluation adjustment controlling Total capital shares bonds profits funds reserves reserve shares reserve reserve Total interests equity $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 At 1 July ,763 (34,884) 3, , ,262 2,724 (14,529) - (26,589) 233,183 4, ,454 Profit for the period , , ,896 Other comprehensive income Foreign currency translation (1,565) (1,565) (23) (1,588) Other comprehensive income for the period (1,565) (1,565) (23) (1,588) Total comprehensive income for the period , (1,565) 21, ,308 Contributions by and distributions to equity holders Exercise of employees share options (7) Purchase of treasury shares - (1,176) (1,176) - (1,176) Treasury shares reissued pursuant to purchase of NCI's shares Dividend on ordinary shares (21,696) (21,696) - (21,696) Total contributions by and distributions to equity holders 27 (1,162) - (21,696) (22,827) - (22,827) 14

15 STATEMENTS OF CHANGES IN EQUITY (Continued) Attributable to equity holders of the Company 2013 (cont'd) Equity component of convertible Premium on purchase of NCIs' Foreign currency translation Enterprise Fair value Non- Share Treasury Accumulated expansion Capital Revaluation adjustment controlling Total capital shares bonds profits funds reserves reserve shares reserve reserve Total interests equity $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 Changes in ownership interests in subsidiaries that do not result in a loss of control Premium on purchase of noncontrolling interest shares (1) - - (1) - (1) Acquisition of non-controlling interest (22) (22) Total changes in ownership interests in subsidiaries that do not result in a loss of control Total transactions with equity holders in their capacity as equity holders (1) - - (1) (22) (23) 27 (1,162) - (21,696) (1) - - (22,828) (22) (22,850) At 30 September ,790 (36,046) 3, , ,266 2,724 (14,530) - (28,154) 231,515 4, ,912 15

16 STATEMENTS OF CHANGES IN EQUITY (Continued) 2014 Company Share capital Treasury shares Equity component of convertible Accumulated bonds profits Capital reserves Fair value adjustment reserves Total equity $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 At 1 July ,427 (31) ,932 22, ,813 Profit, representing total comprehensive income, for the period , ,908 Contributions by and distributions to equity holders Redemption of convertible bonds - - (484) Dividend on ordinary shares (23,374) - - (23,374) Issue of convertible bonds - - 1, ,180 New shares issued pursuant to convertible bonds conversion 1,032 - (32) ,000 Total contributions by and distributions to equity holders 1, (23,374) (21,194) At 30 September ,459 (31) 1, ,466 23, , Company Share capital Treasury shares Equity component of convertible Accumulated bonds profits Capital reserves Fair value adjustment reserves Total equity $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 At 1 July ,763 (34,884) 3,773 44, ,311 Profit, representing total comprehensive income, for the period , ,960 Contributions by and distributions to equity holders Exercise of employees share options (7) - 20 Purchase of treasury shares - (1,176) (1,176) Treasury shares reissued pursuant to purchase of NCI's shares Dividend on ordinary shares (21,696) - - (21,696) Total contributions by and distributions to equity holders 27 (1,162) - (21,696) 4 - (22,827) At 30 September ,790 (36,046) 3,773 33, ,444 16

17 NOTES TO THE FINANCIAL STATEMENTS A. SHARE CAPITAL (i) Share capital and Company and Company 3 months ended 30 Sep 3 months ended 30 Sep Number of ordinary shares Issued and fully paid up ( 000) ($ 000) Issued and fully paid At beginning of period 778, , ,427 64,763 Exercise of share options New shares issued pursuant to convertible bonds conversion 542-1,032 - At end of period 779, , ,459 64,790 (ii) Treasury shares ( 000) ($ 000) At beginning of period (25) (29,473) (31) (34,884) Acquired during the financial period - (605) - (1,176) Treasury shares reissued pursuant to purchase of NCIs' shares and Company and Company 3 months ended 30 Sep 3 months ended 30 Sep Number of treasury shares At end of period (25) (30,066) (31) (36,046) and Company and Company 3 months ended 30 Sep 3 months ended 30 Sep Number of shares excluding treasury shares Issued and fully paid Share capital ( 000) 779, ,064 ($ 000) 114,459 64,790 Less: Treasury shares held (25) (30,066) (31) (36,046) Share capital excluding treasury shares 779, , ,428 28,744 As at 30 September 2014, total number of issued shares excluding treasury shares was 779,127,000 (31 December ,720,000) 17

18 NOTES TO THE FINANCIAL STATEMENTS (Continued) B. GROUP BORROWINGS AND DEBT SECURITIES Amount repayable in one year or less, or on demand Company 30-Sep Dec Sep Dec-13 $'000 $'000 $'000 $'000 Obligations under finance lease (secured) Liability component of convertible bonds (unsecured) - 119, ,038 Bank loan (unsecured) - 6, Bills payable to banks (unsecured) 22,628 29,493 22,628 29,493 22, ,575 22, ,531 Amount repayable after one year Obligations under finance lease (secured) Liability component of convertible bonds (unsecured) 167, , , ,157 - During the quarter, $1,000,000 of convertible bonds (31 December 2013: $Nil) were converted. As at 30 September 2014, the outstanding number of convertible debt securities that may be issued as shares was 48,226,950 (30 September 2013: 64,171,123) at a conversion price of S$3.525 (30 September 2013 S$1.87) 18

19 NOTES TO THE FINANCIAL STATEMENTS (Continued) C. NET ASSETS VALUE PER SHARE Company 30-Sep Dec Sep Dec-13 Net assets value per share based on existing issued share capital as at end of respective period / year 55 cents 36 cents 31 cents 9 cents D. TAXATION This comprises: 3 months ended 30 Sep 9 months ended 30 Sep $'000 $'000 $'000 $'000 Current tax - Current period 6,206 8,146 25,230 20,727 Deferred tax - Movement in temporary differences 513 (1,455) (1,731) (Over) / under provision in respect of previous period (7) (6) Income tax expenses recognised in profit or loss 6,712 6,685 23,780 21,076 E. INTERESTED PERSON TRANSACTIONS Aggregate value of all interested person transactions conducted under shareholder's mandate pursuant to Rule 920 (excluding transactions < $100,000) 9 months ended 30 Sep $'000 $'000 Sales FK Marketing Ltd

20 NOTES TO FINANCIAL STATEMENTS (Continued) F. EARNINGS PER SHARE The weighted average number of ordinary shares is determined as follows: Basic earnings per share: 3 months ended 30 Sep 9 months ended 30 Sep No. of shares No. of shares No. of shares No. of shares ('000) ('000) ('000) ('000) Weighted average number of shares used in calculation of basic earnings per share 779, , , ,479 Basic earnings per share (cents) Diluted earnings per share: Weighted average number of shares used in calculation of basic earnings per share 779, , , ,479 Effects of dilution: - Share options Convertible bonds 21,996 64,171 29,509 64,171 Weighted average number of shares used in calculation of diluted earnings per share 801, , , ,830 Diluted earnings per share (cents) Adjusted profit used for calculation of diluted earnings per share: 3 months ended 30 Sep 9 months ended 30 Sep $'000 $'000 $'000 $'000 Profit attributable to equity holders 16,404 22,725 74,779 73,975 Add: Interest expense for convertible bonds 367 1,296 1,784 3,867 Adjusted profit used for calculation of diluted earnings per share 16,771 24,021 76,563 77,842 20

21 NOTES TO FINANCIAL STATEMENTS (Continued) G. DIVIDENDS Details of the dividend for present year are appended below: (i) Present Year Name of Dividend: Dividend Rate Date Payable 1 st Interim 1 cent per ordinary share 24 July nd Interim 2 cents per ordinary share 2 October rd Interim 1 cent per ordinary share 8 January 2015 Dividend Type: Cash (ii) Previous corresponding year Name of Dividend: Dividend Rate Date Paid 1 st Interim 1 cent per ordinary share 3 July nd Interim 2 cents per ordinary share 2 October rd Interim 1 cent per ordinary share 31 December 2014 (iii) Book Closure Date for Interim Dividend The Share Transfer Books and Register of Members of OSIM International Ltd ( the Company ) will be closed on 5pm, 31 December (iv) Date Payable The 3 rd interim dividend will be paid on 8 January H. USE OF PROCEEDS The proceeds of S$167,970,000 (net) from the issue of Convertible Bonds due 2019 have been utilized as follows: $'000 Net proceeds of the Convertible Bonds 167,970 Balance of proceeds as at 18 September ,970 Use of proceeds during the period - Balance of proceeds as at 30 September ,970 21

22 ACCOUNTING POLICIES The has applied the same accounting policies and methods of computation in the preparation of financial statements for the current reporting period compared with the audited financial statements as at 31 December 2013, except for the adoption of the Financial Reporting Standards (FRS) and INT FRS that are mandatory for financial years beginning on or after 1 January The adoption of these FRS and INT FRS has no significant impact on the financial statements. AUDIT The figures have not been audited or reviewed by the Company s auditor. 22

23 CONFIRMATION BY THE BOARD We, Ron Sim and Peter Lee, being two directors of OSIM International Ltd (the Company), do hereby confirm on behalf of the directors of the Company that, to the best of our knowledge, nothing has come to the attention of the Board of Directors of the Company which may render the 3 rd quarter 2014 financial results to be false or misleading. 23