BEST WORLD INTERNATIONAL LTD (Company Registration: 199006030Z) Incorporated in the Republic of Singapore Financial Statements And Related Announcement For the 3 months ended 31 March 2012
BEST WORLD INTERNATIONAL LIMITED FINANCIAL STATEMENTS ANNOUNCEMENT FOR THE THREE MONTHS ENDED 31 MARCH 2012 TABLE OF CONTENTS CONSOLIDATED STATEMENT OF INCOME 2 STATEMENTS OF FINANCIAL POSITION BORROWINGS AND DEBT SECURITIES 4 5 CONSOLIDATED STATEMENT OF CASH FLOWS 6 STATEMENT OF CHANGES IN EQUITY 7 SHARE CAPITAL 8 AUDIT 9 ACCOUNTING POLICIES 9 EARNINGS PER SHARE 10 NET ASSET VALUE PER SHARE 10 REVIEW OF THE PERFORMANCE OF THE GROUP 11 Overview 11 Revenue by Business Segments 12 Revenue by Geographical Locations 13 Financial Position and Cash Flow 14 COMMENTARY ON THE CURRENT PERIOD S PROSPECTS 15 DIVIDENDS 16 1
CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED 31 MARCH 2012 (Amounts expressed in Singapore dollars) 1(a)(i). An income statement and statement of comprehensive income, or a statement of comprehensive income for the group, together with a comparative statement for the corresponding period of the immediately preceding financial year. 3 months 3 months Ended Ended 31.03.12 31.03.11 Change $'000 $ '000 % Revenue 9,326 9,308 0.2 Cost of Sales (2,021) (1,685) 19.9 Gross Profit 7,305 7,623 (4.2) Other Items of Income Interest Income 47 43 9.3 Other Operating Income 316 79 300.0 Other Items of Expense Distribution Costs (3,345) (3,711) (9.9) Administrative Expenses (4,634) (4,498) 3.0 Other Charges, Net (376) (167) 125.1 Loss Before Tax from Continuing Operations (687) (631) 8.9 Income Tax Expenses (22) (94) (76.6) Loss from Continuing Operations, Net of Tax (709) (725) (2.2) Loss Net of Tax Attributable to: - Owners of the Parent Company - Non-Controlling Interests (701) (588) 19.2 (8) (137) (94.2) (709) (725) (2.2) Additional notes: Gross Profit Margin 78.3% 81.9% Net Loss Margin (7.5%) (6.3%) Loss Per Share (cents) (0.34) (0.29) 2
CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE THREE MONTHS ENDED 31 MARCH 2012 Statement of Comprehensive Income for the three months ended 31 March 2012: Group 3 months 3 months Ended Ended 31.03.12 31.03.11 Change $'000 $'000 % Loss for the Period, Net of Tax (709) (725) (2.2) Other Comprehensive Expenses Exchange Differences on Translating Foreign Operations (470) (249) 88.8 Other Comprehensive Expenses for the period, Net of Tax (470) (249) 88.8 Total Comprehensive Expenses for the Period Attributable to: Owners of the Parent Company Non-Controlling Interests Total Comprehensive Expenses for the Period (1,179) (974) 21.0 (1,172) (819) 43.1 (7) (155) (95.5) (1,179) (974) 21.0 1(a)(ii). Profit before Income tax is determined after charging (crediting): Group 3 months Ended 31.03.12 31.03.11 $'000 $'000 Depreciation of Property, Plant and Equipment 278 459 Depreciation of an Investment Property 5 5 Amortisation of Intangible Assets 38 39 Reversal for Impairment on Trade Receivables - (2) Unrealized Foreign Exchange Loss, Net 237 137 Realized Foreign Exchange Loss, Net 142 13 (Gain) Loss on Disposal of Property, Plant and Equipment (3) 19 Interest Income (47) (43) 3
STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2012 (Amounts expressed in Singapore dollars) 1(b). (i) A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year. Group Company 31.03.12 31.12.11 31.03.12 31.12.11 $ '000 $ '000 $ '000 $ '000 ASSETS NON-CURRENT ASSETS Property, Plant and Equipment 4,831 4,697 2,042 1,736 Investment Property 1,268 1,273 - - Intangible Assets 2,149 1,344 238 257 Investment in Subsidiaries - - 26,324 24,383 Deferred Tax Assets 238 245 - - Other Receivables - - 2,564 2,415 Other Financial Assets 1,274 1,274 1,274 1,274 Total Non-Current Assets 9,760 8,833 32,442 30,065 CURRENT ASSETS Inventories 4,615 5,103 3,164 3,181 Trade and Other Receivables 5,329 5,528 6,118 8,341 Other Assets 5,230 3,633 2,993 2,059 Other Financial Assets - 205 - - Cash and Cash Equivalents 29,814 31,975 7,859 9,175 Total Current Assets 44,988 46,444 20,134 22,756 TOTAL ASSETS 54,748 55,277 52,576 52,821 EQUITY AND LIABILITIES EQUITY Share Capital 17,205 17,205 17,205 17,205 Retained Earnings 30,500 31,201 32,913 33,607 Other Reserve (501) (30) - - Equity, Attributable to Owners 47,204 48,376 50,118 50,812 of the Parent Company Non-Controlling Interests 251 (607) - - Total Equity 47,455 47,769 50,118 50,812 NON-CURRENT LIABILITIES Deferred Tax Liabilities 102 102 55 55 Total Non-Current Liabilities 102 102 55 55 CURRENT LIABILITIES Income Tax Payable 409 452 171 296 Trade and Other Payables 6,782 6,954 2,232 1,658 Total Current Liabilities 7,191 7,406 2,403 1,954 Total Liabilities 7,293 7,508 2,458 2,009 TOTAL EQUITY AND LIABILITIES 54,748 55,277 52,576 52,821 4
BORROWINGS AND DEBT SECURITIES (Amounts expressed in Singapore dollars) 1(b). (ii) Aggregate amount of Group s borrowings and debt securities. The Group has no borrowings and debt securities as at 31 March 2012 and 31 December 2011. Details of any collateral Certain leasehold land and property of a subsidiary at carrying value of $568,000 as at 31 March 2012 (31 December 2011: $569,000) are mortgaged to bank to secure bank facilities granted by the bank. Certain fixed deposits of the group are pledged to banks for facilities granted. See 1 (c) for pledged details. 5
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED 31 MARCH 2012 (Amounts expressed in Singapore dollars) 1(c). A statement of cash flows (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year. Group 3 Months 3 Months Ended Ended 31.03.12 31.03.11 Cash flows from Operating Activities: $ '000 $ '000 Loss before Tax (687) (631) Interest Income (47) (43) Depreciation of Property, Plant and Equipment 278 459 Depreciation of an Investment Property 5 5 Amortisation of Intangible Assets 38 39 (Gain) Loss on Disposal of Property, Plant and Equipment (3) 19 Net Effect of Exchange Rate Changes in Consolidating Foreign Subsidiaries (417) (217) Operating Cash Flows before Changes in Working Capital (833) (369) Inventories 488 (686) Trade and Other Receivables 219 249 Other Assets (1,597) (156) Trade and Other Payables (172) (1,257) Net Cash Flows used in Operations before Interest and Tax (1,895) (2,219) Income Tax Paid (77) (206) Net Cash Flows used in Operating Activities (1,972) (2,425) Cash flows from Investing Activities: Purchase of Property, Plant and Equipment (446) (320) Disposal of Property, Plant and Equipment 9 - Increase in Intangible Assets - (76) Decrease (Increase) in Other Financial Assets 205 (1,015) Interest Received 47 43 Net Cash Flows used in from Investing Activities (185) (1,368) Cash flows from Financing Activities: Purchase of Treasury Shares - (26) Increase in Cash Restricted in Use (4) - Net Cash Flows used in Financing Activities (4) (26) Net Decrease in Cash and Cash Equivalents (2,161) (3,819) Cash and Cash Equivalents, Statement of Cash Flows, Beginning Balance 30,212 34,974 Cash and Cash Equivalents, Statement of Cash Flows, Ending Balance Note A 28,051 31,155 Note A : Group 3 Months 3 Months Ended Ended 31.03.12 31.03.11 $ '000 $ '000 Cash and bank balances 29,814 32,914 Less: Cash pledged (1,763) (1,759) Cash and Cash Equivalents in the Consolidated Cash Flow Statement 28,051 31,155 6
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2012 1(d). (i) A statement (for the Group and company) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalization issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year. Attributable to Owners of the Parent Company Foreign Currency Non- Total Share Treasury Retained Translation Controlling Group Equity Total Capital Shares Earnings Reserve Interests $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 Balance at 1 January 2012 47,769 48,376 17,640 (435) 31,201 (30) (607) Movements in Equity Total Comprehensive Expenses for the Period (1,179) (1,172) - - (701) (471) (7) Acquisition of a Non-Controlling Interest with a Change in Control 865 - - - - - 865 Balance at 31 March 2012 47,455 47,204 17,640 (435) 30,500 (501) 251 Balance at 1 January 2011 50,249 50,629 17,640 (289) 34,209 (931) (380) Movements in Equity Share Buy Back - Held as Treasury Shares (26) (26) - (26) - - - Total Comprehensive Expenses for the Period (974) (819) - - (588) (231) (155) Balance at 31 March 2011 49,249 49,784 17,640 (315) 33,621 (1,162) (535) Attributable to Owners of the Parent Company Total Share Treasury Retained Company Equity Capital Shares Earnings $'000 $'000 $'000 $'000 Balance at 1 January 2012 50,812 17,640 (435) 33,607 Movements in Equity Total Comprehensive Expenses for the Period (694) - - (694) Balance as at 31 March 2012 50,118 17,640 (435) 32,913 Balance at 1 January 2011 53,005 17,640 (289) 35,654 Movements in Equity Share Buy Back - Held as Treasury Shares (26) - (26) - Total Comprehensive Income for the Period 384 - - 384 Balance as at 31 March 2011 53,363 17,640 (315) 36,038 7
NOTES TO FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MARCH 2012 (Amounts expressed in Singapore dollars) SHARE CAPITAL 1(d). (ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles as well as the number of shares held as treasury shares, if any, against the total number of issued shares excluding treasury shares of the issuer, as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year. (a) Share Capital Group and Company Issued ordinary shares No. of shares Group and Company Issued and fully paid up capital $'000 2012 2011 2012 2011 At 1 January 204,751,997 205,431,997 17,205 17,351 Share buy back - held as Treasury Shares - (101,000) - (26) At 31 March 204,751,997 205,330,997 17,205 17,325 (b) Treasury Shares Group and Company Group and Company No. of shares $'000 2012 2011 2012 2011 At 1 January 1,498,000 818,000 435 289 Share buy back - held as Treasury Shares - 101,000-26 At 31 March 1,498,000 919,000 435 315 For the three months ended 31 March 2012, the company did not purchase its ordinary shares (3 months ended 31 March 2011: 101,000 shares) to be held as treasury shares. In July 2010, the Company completed its issue of up to 41,249,999 nonrenounceable bonus warrants on the basis of one (1) warrant for every five (5) existing ordinary shares held by shareholders of the Company, on books closure date, fractional entitlements to be disregarded. Each warrant will entitle the warrant holder to subscribe for one (1) new ordinary share in the ordinary share capital of the Company at the exercise price of $0.30, exercisable during the period commencing on and including the date six (6) months from the date of listing of the warrants and expiring on the market day immediately preceding the third (3 rd ) anniversary of the date of issue of the warrants. 41,140,995 warrants were listed on SGX Main Board on 12 July 2010. 8
No options were granted and no new shares were issued pursuant to the Employee Share Option Scheme. (iii) To show the total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year. The total number of issued ordinary shares excluding treasury shares as at 31 March 2012 and 31 December 2011 was 204,751,997. The total number of treasury shares as at 31 March 2012 and 31 December 2011 was 1,498,000. (iv) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at the end of the current financial period reported on. Not applicable. AUDIT 2. Whether the figures have been audited or reviewed and in accordance with which auditing standard or practice. The figures have not been audited, or reviewed by auditors. 3. Where the figures have been audited or reviewed, the auditors report (including any qualifications or emphasis of a matter). Not applicable. ACCOUNTING POLICIES 4. Whether the same accounting policies and methods of computation as in the Group and company s most recently audited annual financial statements have been applied. The Group has applied the same accounting policies and methods of computation in the financial statements for the current period as compared with those used in the audited financial statements for the financial year ended 31 December 2011. 5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change. The adoption of new and revised FRS does not have significant impact on the Group. 9
EARNINGS PER SHARE 6. Earnings per ordinary share of the Group for the current financial period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends. Loss per share of Group: GROUP 3 months 3 months ended ended Change 31.03.12 31.03.11 % (a) Based on weighted average number of ordinary shares on issue (cents); and (0.34) (0.29) 17.2 (b) On a fully diluted basis (cents) (0.34) (0.29) 17.2 For comparative purposes, the earnings per ordinary shares for the 3 months ended 31 March 2012 and 31 March 2011 are calculated based on the loss for the period of approximately $0.7 million and $0.6 million respectively. The weighted average number of ordinary shares (excluding treasury shares) for the 3 months ended 31 March 2012 is 204,751,997 (31 March 2011: 205,423,019). On a fully diluted basis, earnings per share for the 3 months ended 31 March 2012 is not computed as the average price of the shares for the period is lower than the warrant s exercise price of $0.30. NET ASSET VALUE PER SHARE 7. Net asset value (for the Issuer and group) per ordinary share based on the total number of issued shares excluding treasury shares of the issuer at the end of the: (a) current financial period reported on; and (b) immediately preceding financial year. GROUP COMPANY 31.03.12 31.12.11 31.03.12 31.12.11 Net asset value per ordinary shares (cents) 23.05 23.63 24.48 24.82 Note: The number of ordinary shares of the Group and Company (excluding treasury shares) as at 31 March 2012 and 31 December 2011 was 204,751,997. 10
REVIEW OF THE PERFORMANCE OF THE GROUP 8. A review of the performance of the Group, to the extent necessary for a reasonable understanding of the Group s business. It must include a discussion of the following:- (a) any significant factors that affected the turnover, costs, and earnings of the Group for the current financial period reported on, including (where applicable) seasonal or cyclical factors; and (b) any material factors that affected the cash flow, working capital, assets or liabilities of the Group during the current financial period reported on. Overview Group revenue for 1Q2012 improved marginally by 0.2% as compared to the same period last year due to higher revenue generation from Malaysia, Taiwan and China, as well as new revenue contribution from Korea. However Loss Attributable to Owners of the Parent Company was 19.2% higher at $0.7 million, vis-a-vis a loss of $0.6 million for the same period last year. This was mainly attributable to the following factors: Gross profit margin for the Group declined from 81.9% to 78.3% for 1Q2012 as a result of higher cost of goods incurred vis-a-vis the same period last year; Administrative expenses for the Group saw a 3.0% increase from $4.5 million in 1Q2011 to $4.6 million for 1Q2012 largely due to full contribution of expenses from new regions such as Korea and Philippines. On top of this, rental expenses was higher than the corresponding period last year as the Group had to incur lease expenses for both Changi office (terminated in April 2012) and Tai Seng simultaneously, due to the latter s renovation works; Higher realized and unrealized exchange losses suffered by the Group as a result of appreciation in Singapore Dollar. Higher unrealised exchange losses were due to the revaluation of the Group s receivables denominated in US Dollar and unsettled trade and non trade balances in the subsidiaries books. Realized exchange losses were also incurred as a result of a one-off capitalisation of outstanding inter-company trade receivables to owner s equity in one of the Group s subsidiaries as part of the Group s restructuring exercise. Other Operating Income increased 300.0% to $0.3 million for 1Q2012 as compared with the corresponding period last year, in part due to higher Agency fee income from an overseas agent and rental income received from our Singapore property. In addition, there was also a write-back of unclaimed commission amounting to $0.1 million during the quarter. Distribution costs, comprising of commission and other sales related costs declined 9.9% from $3.7 million in 1Q2011 to $3.3 million for 1Q2012 due to lower advertising and promotion expenses incurred during the quarter. The Group incurred Income Tax Expenses of $0.02 million despite losses in 1Q2012 due to certain companies in the Group being profitable for the period. As a result, Loss Attributable to Owners of the Parent Company for 1Q2012 stood at $0.7 million. 11
Revenue by Business Segments For Quarter: 1Q2012 Vs 1Q2011 Business Segment Direct selling & sales through agencies 3 months ended 3 months ended 31.03.12 31.03.11 Revenue Revenue Change $'000 % $'000 % % 8,904 95.5 8,972 96.4 (0.8) Retail 422 4.5 336 3.6 25.6 Total 9,326 100.0 9,308 100.0 0.2 For Quarter: 1Q2012 Vs 4Q2011 Business Segment Direct selling & sales through agencies 3 months ended 3 months ended 31.03.12 31.12.11 Revenue Revenue Change $'000 % $'000 % % 8,904 95.5 12,287 97.3 (27.5) Retail 422 4.5 335 2.7 26.0 Total 9,326 100.0 12,622 100.0 (26.1) Revenue from Direct selling & sales through agencies remains the Group s core business making up 95.5% of the Group s total revenue for 1Q2012. This 0.8% decline from $9.0 million in 1Q2011 to $8.9 million this quarter is attributable to weaker revenue contribution from Singapore and Thailand, offsetting the increased revenue generation from Malaysia and Taiwan, as well as new revenue contribution from Korea. Comparing 1Q2012 against 1Q2011, retail revenue increased 25.6% from $0.3 million in 1Q2011 to $0.4 million in 1Q2012 on the back of stronger export sales to China. As of 31 March 2012, the Group s number of Lifestyle Centres increased from 55 to 56 and total membership rose 2.7% to 252,108 members, when compared to 31 December 2011. 12
Revenue by Geographical Locations For Quarter: 1Q2012 Vs 1Q2011 3 months ended 3 months ended 31.03.12 31.03.11 Revenue Revenue Change Geographical Locations $'000 % $'000 % % Singapore 2,297 24.6 2,489 26.7 (7.7) Malaysia 1,122 12.0 996 10.7 12.7 Indonesia 1,130 12.1 1,185 12.7 (4.6) Thailand 1,342 14.4 2,146 23.1 (37.5) Taiwan 1,223 13.1 759 8.2 61.1 Others 2,212 23.8 1,733 18.6 27.6 Total 9,326 100.0 9,308 100.0 0.2 For Quarter: 1Q2012 Vs 4Q2011 3 months ended 3 months ended 31.03.12 31.12.11 Revenue Revenue Change Geographical Locations $'000 % $'000 % % Singapore 2,297 24.6 2,618 20.7 (12.3) Malaysia 1,122 12.0 1,068 8.5 5.1 Indonesia 1,130 12.1 2,083 16.5 (45.8) Thailand 1,342 14.4 2,153 17.1 (37.7) Taiwan 1,223 13.1 2,592 20.5 (52.8) Others 2,212 23.8 2,108 16.7 4.9 Total 9,326 100.0 12,622 100.0 (26.1) Singapore Sales from Singapore declined 7.7% to $2.3 million for 1Q2012 from $2.5 million in 1Q2011 partly as a result of stiff market competition and weaker demand for the Group s product offerings. The first quarter is also the weakest quarter due to the seasonal nature of our business and the Chinese New Year holidays. Malaysia Revenue from Malaysia improved 12.7% for 1Q2012 from $1.0 million to $1.1 million when compared with the corresponding period in FY2011. Management shall maintain its effort to adopt effective marketing and promotional campaigns to rejuvenate its Malaysian business in the coming quarters. 13
Indonesia Revenue declined 4.6% to $1.1 million vis-a-vis the same period in FY2011. The decrease in revenue was a result of a slowdown in revenue generation in 1Q2012 due to a strong 4Q2011. The Group remains cautiously optimistic of the long term prospects of this market despite the quarter-on-quarter decline in revenue. Plans to further intensify its sales and marketing activities are in the pipeline. Thailand 1Q2012 revenue declined 37.5% to $1.3 million from $2.1 million for 1Q2011 due to weak consumer confidence, which was affected due to losses incurred from the floods in late 2011 and have thus scaled back their consumption other than daily esentials. Management acknowledges these challenges and have laid out plans to promote membership growth and drive sales demand in the coming quarters. Taiwan In line with management s expectation, revenue from Taiwan improved 61.1% for 1Q2012 from $0.8 million to $1.2 million when compared with the corresponding period in FY2011. This improvement was achieved on the back of steady growth in market share. The management will continue to embark on a series of campaigns and activities to promote brand awareness and membership growth in the coming months in preparation for the upcoming regional convention to be held in Taipei this June. Others Other markets showed a 27.6% increase in revenue to $2.2 million in 1Q2012 from $1.7 million in 1Q2011. This increase is mainly attributable to higher contributions from Korea and China, offsetting the lower revenue from Hong Kong and Vietnam. Financial Position and Cash Flow Non-current assets of the Group increased from $8.8 million as at 31 December 2011 to $9.8 million as at 31 March 2012, mainly due a $0.8 million increase in intangible asset (Goodwill on consolidation) associated with the increase in shareholdings in a subsidiary. Property, plant and equipment also increased from $4.7 million to $4.8 million in relation to the purchase of new equipment for the Group s new Tai Seng headquarters. Inventory was lower at $4.6 million as at 31 March 2012 as the Group maintained lower inventory holdings as compared with 31 December 2011. As at 31 March 2012, inventory turnover was 208 days. Trade and other receivables declined from $5.5 million as at 31 December 2011 to $5.3 million as at 31 March 2012 as a result of higher receipts from our debtors during the quarter. Trade receivables turnover was 26 days as at 31 March 2012. Other assets increased from $3.6 million as at 31 December 2011 to $5.2 million as at 31 March 2012 mainly as a result of an increase in renovation deposits held in relation to the fitting out of our new Tai Seng office. 14
Other financial assets decreased $0.2 million as at 31 March 2012 due to the maturity and non-renewal of certain financial assets during the quarter. Trade and other payables reduced from $7.0 million as at 31 December 2011 to $6.8 million as at 31 March 2012 due to payments to trade creditors and lower accruals of freelance commissions. Net decrease of $2.2 million in cash and cash equivalents in the cash flow statements during the reporting period is mainly attributable to the increase in other assets amounting to $1.6 million and the Group s net loss before tax in 1Q2012 amounting to $0.7 million. As at 31 March 2012, the Group maintained a sound balance sheet and working capital position, with approximately $29.8 million of cash and cash equivalents. COMMENTARY ON THE CURRENT PERIOD S PROSPECTS 9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results. The results are in line with the section 10 of the last quarter s result announcement. 10. A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the Group operates and any known factors or events that may affect the Group in the next reporting period and the next 12 months. The Group registered a 0.2% revenue growth in 1Q2012 when compared against the corresponding period last year. Revenue growth although positive, was subdued during the quarter due to global economic uncertainties and weak consumer confidence affecting most of the key markets that the Group operates in. Despite these challenges, our management team will continue to roll out innovative marketing campaigns and grow our regional markets. China, Taiwan and Korea s growth and positive contribution in 1Q2012 was in line with management s expectation. Management is confident and expects better financial performance in these regions in the coming quarters. Malaysia has also registered revenue growth this quarter as a result of a series of aggressive marketing activities which improved sales demand. Management will continue to build on this sales momentum to drive revenue recovery. Higher operating expenses, cost of goods and fluctuations in foreign currencies exchange rates especially with the appreciation of the Singapore Dollar remain key factors that will affect the Group s performance moving forward. The Group also expects higher depreciation expenses in the coming quarters due to renovation works done as well as the purchase of new equipment for the fitting out of the Group s new Tai Seng headquarters. Market acceptance, brand awareness and consumers trust and loyalty are the Group s most valuable assets. Management acknowledges that the business of direct selling has an image problem due to the lack of understanding on the consumers part. The Group will continue to work closely with the local direct selling association of various territories to promote public education to reduce any misconceptions about the direct selling business. 15
Other factors that continue to affect the Group s performance include timeline required for product registration in various markets, natural disasters, local direct selling regulations and stiff market competition. Management will continue to be vigilant and implement necessary measures to mitigate any potential impact that these factors may have on the Group s business. DIVIDENDS 11. (a) (i) Current Financial Period Reported On None (ii) Corresponding Period of the immediately Preceding Financial Year None (b) Date payable for dividend and date of allotment and issue for bonus issue Not applicable (c) Books closure dates for dividend and bonus issue Not applicable 12. If no dividend has been declared/ recommended, a statement to that effect. No dividend has been recommended or declared for the period ended 31 March 2012. 13. If the Group has obtained a general mandate from shareholders for IPTs, the aggregate value of such transactions as required under Rule 920(1)(a)(ii). If no IPT mandate has been obtained, a statement to that effect. The Group did not obtain a general mandate from shareholders for Interested Person Transactions. 16
14. Board Negative Assurance Confirmation for Interim Financial Results We, Dr. Dora Hoan Beng Mui and Dr. Doreen Tan Nee Moi, being two directors of Best World International Limited (the "Company"), do hereby confirm, to the best of our knowledge, nothing has come to the attention of the Board of Directors of the Company which may render the unaudited interim financial results for the three months ended 31 March 2012 to be false or misleading. On behalf of the Board of Directors Dr. Dora Hoan Beng Mui Group Managing Director & CEO Dr. Doreen Tan Nee Moi Chairman 14 th May 2012 17