CEO's Statement

Dear Fellow Shareholders

On behalf of the Board of Directors, I am pleased to present to you the Group’s annual report for the financial year ended December 2007.

EVOLVING OUR STRENGTH

In FY 2007, Group revenue was $523.7 million while Group EBITDA was $35.4 million. There continued to be consumer demand for our full range of massage chairs and innovative healthy lifestyle products.

2007 was a transitional year for OSIM’s core business. Following many years of growth, we revamped our structure, system and sharpened the strategy of the Group.

Going forward, we expect to further expand faster in China, India, Middle East and grow more territories in Europe.

OSIM’s innovative product pipeline is strong and we expect to see more aggressive marketing and creative executions.

The management team is focused on effective and competitive strategy and implementation by way of objectives and measurable performance throughout the Group.

Brookstone continued to perform strongly with a revenue of US$562.8 million. EBITDA has grown from US$32 million in 2005 to US$45 million in 2006 and US$55 million in 2007. Despite concerns over the effects of sub-prime, we completed 7 successive quarters of positive same store growth at Brookstone.

Global Active continued its healthy growth in 2007 and its vitamins and supplements business is expected to grow in a steady and sustainable manner this year.

We start the year confident that our evolving strength will help us respond to the market and deliver improved results in 2008.

PIONEERING A GROWING INDUSTRY

OSIM had the foresight to pioneer an industry about well-being and people leading a healthy lifestyle. That is why we are confident that this same innovative thinking and creative spirit will keep us on the forefront of growth.

BUILDING A GLOBAL BRAND

I am delighted that we are now validated as the No. 1 Brand in Asia for Massage Chairs and Healthy Lifestyle products by International Research Consultant Synovate. We intend to extend our brand to more customers as we further introduce products that remain the best in its class.

We have products that redefine standards like the uSpace, uPilot, uYoYo, uSqueez, uZap and the uGallop. More are in the pipeline as our Research & Development has the capability to create products that are based on science, innovative technology and cutting-edge design.

In the U.S., we remain firmly on our goals of making Brookstone better and better every quarter. Global Active has performed well and is growing at a very sustainable rate.

Our strategy is to expand to more cities, more countries and our goal is to expand to 3,000 outlets by year 2013. We are well in the process of Building a Global Brand.

KEEPING A COMPANY ABOUT PEOPLE

As it has been from the very start, our continued growth has been sustained by being a company about people. Indeed, our people are effective, competitive and have the positive attitude, to make every touch point an unique OSIM brand experience for our customers.

Our people are driven with the clarity of goals and the theme of “Inspiring Life”.

EXPRESSING OUR GRATITUDE

On behalf of the Board of Directors, allow me to convey our gratitude for the dedication and hard work that each and every staff has contributed in 2007. I am confident that this positive spirit will continue to fuel our best efforts in 2008.

I would also like to express my sincere thanks to all our customers, bankers, business associates, suppliers and shareholders for their unwavering support of Brand OSIM.

Mr. Ron Sim
Founder, Chairman and CEO