bgt 07

Message from the Chairman of the Board of Directors

Dear Shareholders:

Fiscal 2007 was a remarkable year for Body Glove (Thailand) Public Company Limited. It was our third consecutive year of the record high profitability and industry – leading performance. We delivered strong results, while also investing in the future growth within our core brand “Body Glove”.

Our performance in 2007 reflected the strength of the Body Glove brand, driven by our relentless customer focus, as well as the depth and diversity of talents within our team. By making appropriate investments in the areas of research, design, quality assurance and merchandising, we have further strengthened the “ever – important connection” with our customers and our ability to deliver “on – trend assortments” with a “high quality-to-price value” ratio.

I would like to put a highlight on an important milestone that took place near the end of 2007. On December 11th , Body Glove (Thailand ) Public Company’s common stock began trading on the Market for Alternative Investment (mai) under the symbol “BGT”. Joining The Stock Exchange of Thailand was a significant true mark of our progress in building a Body Glove brand and delivering successful financial performance. I thank all of our BGT associates whose effort over the years has contributed to our achievements.

BODY GLOVE (THAILAND) PUBLIC CO., LTD

ANNUAL REPORT 2007

At BGT, we are passionate about providing support to worthy causes and giving back to our societies, we have donated both cash and clothing to various non-profit organizations across the country over the years.

As we look toward 2008, we are excited about our plans to maximize the growth of the Body Glove brand by expand new stores, step into other territories and further strengthen our financial performance. I am confident that our effort to forge a strong connection with customers, our commitment to operating disciplines, talent and energy of our team will deliver profitable growth to our shareholders for years to come.

On behalf of the Board of Directors, I would like to take this opportunity to express my sincere gratitude to all our stockholders, customers and business alliances for continuous support the Company’s business operations, and extend my appreciation to the Board members, executives and employees for their hard work and full dedication.

Sincerely,

Nopdol TumwattanaChairman of the Board of Directors


ANNUAL REPORT 2007

Message from the CEO

Dear Shareholders:

BGT marketing mission is to be the most relevant, valuable and important Surf lifestyle brand among our targeted customers. We will never stop learning about what’s important to our customers – investing in focus groups, fit clinics and customer intercepts to sharpen our awareness of their passions, perspectives and preferences. Underlying everything we do at BGT is a strong commitment to operatingdiscipline and solutions that contribute to our growth by enhancing the customer experience and promoting advances in productivity and cost-efficiency.

BGT is well-positionedto sustain strong performance up 28% and High Dividend.

Total revenue reached 485 million baht for 2007, up 28% from the prior year. Contributing to the record sales, comparable shops sales rose 19% and our counters sales rose 61%. Our operating profit was 12%, an improvement over last year’s record 18%, reflecting our efforts to deliver a strong merchandise margin and a commitment to operational excellence. Net profit for 2007 increased 54% to THB 40 million, or THB 0.64 per share. We also strengthenedthe company’s cash position to THB 100 million at year-end, while continuing to invest in our growth initiatives.


ANNUAL REPORT 2007

The Board recommended a final dividend of THB 0.25 per share for the total of 80,000,000 shares approval by the shareholders at the forthcoming Annual General Meeting. BGT to pay dividend greater than its 40% dividend payout policy which we would be 50%.

As we look ahead, we are confident that Body Glove is well-positioned to sustain strong performance. We are excited about our growth strategies and continue to invest in talent and strengthen our operations with new systems and upgraded facilities.

Reformulated marketing Strategy driving up net profit 54% from prior year and ROE above 26%

We are driving growth through selectively opening new stores and upgrading existing locations. In 2007, new Body Glove stores continued to perform extremely well, quickly achieving sales productivity comparable to our mature stores, and ROE of more than 26% and net profit was increase 54% from prior year. We also focused on maximizing existing real estate by increasing the size of our smaller Body Glove stores, as well as relocating stores to better sites. This strategy not only benefited sales productivity, but also had a meaningful lift to store profitability.


ANNUAL REPORT 2007

Base on positive results, BGT plans to utilize its IPO proceeds to open not less 20 branches in 2008. From the current 71 retail shops and counters, this would help BGT to better penetrate its targeted market segment. On top of this, BGT will benefit from economy of scale, which will become a key growth driver over the next three years.

Body Glove No.1 surf lifestyle apparel in Thailand and Asia

In 2004 we celebrated a major milestone with launch of “Body Glove Surf & Trend Apparel line” our new intimates line. Our collection feature surf and trendy wear with a comfortable, trend, cool and sweetly sexy feeling for the 15 to 25 year-old BG Girls and Guys. Customer have responded enthusiastically to BG Surf & Trend line, which is offered today in all Body Glove 41 stand alone shop and 30 counters at Departmental store.

Our new easy lifestyle line category launched in 2005, represents an important long-term growth opportunity. Target at 20 to 35 year-olds. BG lifestyle line provides this underserved demographic with sportswear-influenced fashion that can go effortlessly from the workplace to leisure activities. As with any new line collection, there are elements that have been well-received and others that we are refining. Based on the response from customer, we are confidence that the brand, demographic and store environment are right on the target.

We also have opportunities to build the brand further by expanding our collection line and adding categories. We are excited about the growth potential of this business.


ANNUAL REPORT 2007

Building powerfulbrand-defining categoriesis at the heart of ourDestination BGT strategy.

Building powerful brand-defining categories that resonate with our customers is at the heart of our “Destination Body Glove” strategy. A perfect example is our Value to Buy yarn dye Combo Polo Tee business. Over the past several years, we have established a dominant position in round neck hi-tech surf printed Tee, which have become a cornerstone for the Body Glove brand, driven by consistent fits, on-trend styles and a strong value and quality offering.

Looking ahead, we will continue to build upon our number one market share position by offering innovation and newness in Polo Tee that is on-target for the Body Glove customer. We will also pursue similar growth in categories such as woven tops, jeans, slipper, boxer pant, mask snorkel combo, swimwear, hard goods and accessories, where we see meaningful opportunity to be the brand-of-choice. To build these categories, we are devoting extensive resources in merchandising, design and sourcing to offer our customers on surf-trend styling combined with unsurpassed quality and value.

I thank you for your support of BGT and look forward to sharing our achievements with you in the future.

Sincerely,

Goh Kok Cheng, DicksonChief Executive Officer & Executive Director


ANNUAL REPORT 2007

Total Revenues 485.30 379.65 277.43

Revenue growth (%) 27.83% 36.84% 81.36%

Revenue from sale 483.48 378.59 276.10

Profit before Interest exp.

and Income tax 57.49 48.84 18.89

EBIT growth (%) 17.71% 158.55% N.A.

Gross profit margin (%) 53.80% 54.31% 53.73%

Income tax 12.43 16.67 0.00

Interest expenses 5.47 6.43 5.22

Net Profit 39.60 25.74 13.67

Net profit growth (%) 53.87% 88.31% N.A.

Net Profit Margin (%) 8.16% 6.78% 4.93%

Total Assets 404.37 241.28 209.29

Return on Asset (%) 12.27% 11.42% 7.51%

Total Liabilities 188.58 154.77 148.52

DE ratio (time) 0.87 1.79 2.44

Total Shareholders’ equity 215.79 86.51 60.77

Return on Equity (%) 26.20% 34.95% 25.34%

Financial Highlights

PROFIT AND LOSS YEAR ENDED YEAR ENDED YEAR ENDED(In million baht) 2007 2006 2005

BALANCE SHEET


ANNUAL REPORT 2007

Mr. Nopdol Tumwattana Chairman of The Board and Executive Director

Mr. Goh Kok Cheng, (Dickson) Chief Executive Officer and Executive Director

Ms. Waristha ThapanasakulwongChief Financial Officer

Ms. Dolnapa TumwattanaOperation Director

Mrs. Nuttamon Bualah Personnal Assistant to CEO ( Sales Dept. )

Ms. Mathira ThongsuwanSenior Accounting Manager

Mr. Chai RatanamahawongSenior Financial Manager

Mrs. Thanamon EkthanuttProduct Manager

Mrs. Thanya ThungvachiragunHR&Admin. Manager

Mr. Thammarak KhunyingWarehouse Manager

Mr. Thanawoth ChaikrueRegional Sales Manager

Ms. Nattanant SimsaAssistant Area Manager

Mr. Thamrongpon Limratanapant Assistant Area Manager

Mr. Nopdol Tumwattana Chairman of The Board

Mr. Goh Kok Cheng, (Dickson) Director

Mr. Goh Kok BengDirector

Mrs. Mallika LeeraphanteDirector

Asso. Prof. Nantarika ChansueDirector

Pol. Gen. Sereepisuth TemeeyavesChairman of the Audit Committee

and Independent Director

Prof.Dr. Surapone VirulrakAudit Committee and Independent

Director

Mrs. Arthivon BunnagAudit Committee and Independent

Director

Share RegistrarThailand Securities Depository Co.,Ltd.

Capital Market Academy Building 2/7

Moo.4 ( North Park Project )

Vibhavadi- Rangsit Rd. Tung Song Hong

Laksi Bangkok 10210

Tel : 66 (0) 2596-9000

Fax : 66 (0) 2832-4994-6

Auditor A.M.T. Associates

491/27 Silom Plaza Silom Road Bang Ruk

Bangkok 10550

Tel : 66 (0) 2234-1676

Fax : 66 (0) 2237-2133

Legal AdvisorInternational Legal Counsellors

Thailand Co.,Ltd.

No. 175 Sathorn City Tower 18Fl.

South sathorn Rd. Bangkok 10120

Tel : 66 (0) 2697-6005

Fax : 66 (0) 2697-6041

Registered Office 299/9 Moo 7 , Phaholyothin Rd.

Anusawaree Bangkhen

Bangkok 10220 Thailand

Tel : 66 (0) 2972-3460

Fax : 66 (0) 2972-3479

Corporate Websitewww.bodyglove.co.th

DIRECTORS, OFFICERS & CORPORATE INFO

BOARD OF DIRECTOR EXECUTIVE OFFICERS CORPORATE INFORMANTION


ANNUAL REPORT 2007

1 MS. DOLNAPA TUMWATTANA 20,130,000

2 MR. GOH KOK BENG 13,006,100

3 MR. GOH KOK CHENG, DICKSON 12,756,100

4 MR. NOPDOL TUMWATTANA 9,736,000

5 MR. TAWAT TASSANEEPONG 2,990,000

6 THAI N VDR CO.,LTD. 2,103,600

7 MR. WITIT PONGPIRODOM 1,050,000

8 MR. PISIT SOTIPANCHAI 725,000

9 MR. SIEW THEAM HEE 700,000

10 MR. LIEW KIAN HUAT 600,000

11 MR. MATTHEW D. WALDEN 600,000

12 MRS. NUNTARIKA CHANSUE 500,000

13 MRS. SOMLUX CHINDAPAN 400,000

14 MR. PITIRAT OSOTSAPA 374,300

15 MR. SUWAT MEKPATTANAPINYO 300,000

16 MR. PISIT RUNGSIWATTANA 263,000

17 MRS. JINSUPANG KOSOLPAN 232,000

18 HELLO BANGKOK TRIVISION CO.,LTD. 200,000

19 MRS. MEENA AWASDANON 200,000

20 MS. BRIGIT SAISAMORN 200,000

21 MR. KOSAK SIRITO 200,000

22 MR. SOMJET LIMNARAPORN 200,000

23 MR. ORLAN PAYAKKAPORN 200,000

24 MR. TANUN TANASANPISUT 200,000

25 MRS. MANOON POTIPAK 200,000

26 MS. LADDAWAN CHUEPETCH 200,000

27 MISS LAI KUEN FONG 200,000

28 MS. PRAPASSORN INGKANUN 200,000

29 MR. PANTEP KEERATIPOJ 192,800

30 MR. PRASERT JIARAWONG 190,000

31 MS. WARITTHA THAPANASAKULWONG 190,000

32 MR WASIN PATIKULSET 180,000

33 MR. SOPHON TAVORNKIJPANICH 175,000

34 MS. KORNVIPA SRICHAMROEN 170,300

35 MS. NOPPAPOON JITTRATORN 170,000

36 MS. NITTAYA SUWANNIKKA 160,000

37 MRS. ARPORN WATCHARA 150,000

38 MRS. KORAKAN ANUPONGRAT 148,000

39 MR. SOMCHAI PENSIRINAPA 138,000

40 MR. PIPAT PARUSMETHEEKUL 130,000

MAJOR SHAREHOLDERS

No. Stockholder name No. of shares

(As per 29th

Feb 2008 )


ANNUAL REPORT 2007

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ANNUAL REPORT 2007

BODY GLOVEStakeholderPriviledge Card

Receive your Stockholder Plantinum Card on the Thai version side.

Body Glove (Thailand) Public Company Limited page 1

Annual Report 2007

Audit Committee’s Report 3Financial Highlights 5Profile of Board of Directors and Executives 6Major Shareholders 16Nature of Business 17Management’s Discussion and Analysis 28Risk Factors 33Connection Transactions 37Management 48Financial Statements 61Remuneration of the Auditor 82Company Profile 83

pages

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Body Glove (Thailand) Public Company Limited

Annual Report 2007


Annual Report 2007

The Audit Committee is consisted of three independent directors, tenure a term of two years each. TheAudit Committee was appointed through the Board of Directors resolution to promote and encourage the company tofulfill its responsibilities of listed company; to monitor corporate compliance; to advise the Board of Director andExecutives on risk management and internal control system; to assure that the Company’s internal control departmentis assigned to ensure that the Company’s internal control systems are adequate and systematically operated; andto provide follow-up reports subsequent to the internal audit to the Audit Committee on a regular basis.

In 2007, the Audit Committee of Body Glove (Thailand) Public Company Limited, held 5 meetings toreview and consider the relevant matters appertained to its duty and responsibility including other matters in viewof the regulations and guidelines provided by the Stock Exchange of Thailand which could be summarized asfollows:

Review the Company’s financial reports, quarterly and annual financial statements with Internal Auditand Certified Public Accountant to ensure compliance with the generally accepted accounting standards anddisclosure of adequate key information.

Review connected transactions and other transactions which may be perceived as potentially causingconflicts of interest between the Company and concerned individuals to determine appropriate and transparentdisclosure of information to be in complete compliance with all rules and regulations and to ensure that notransaction had significant impact to the Company.

Review the risk management system to ensure it is appropriate and effective. Report the appraisal onthe performance of the internal control system to the Board of Directors and avail to make comments during eachBoard of Director meeting including follow-up on the set up of the internal control system and assessment pro-gram to be in line with the rules and regulations of the Stock Exchange of Thailand.

Review regularly with the Internal Audit to ensure that the Company performs in accordance with acorporate governance role and in compliance with the regulations, “Code of Best Practice for the Company’sExecutives and Employees” as submitted to the Board of Directors.

Consider and approve the internal audit plan and annual budget to assure that the objective and scopeof work govern the significant risk appertain to business operation.

Consider and nominate the Company’s Certified Public Accountant and the remuneration for approvalof the Ordinary General Shareholder’s Meeting.

At all Board of Directors Meetings, the Audit Committee and Internal Audit Department prepared sum-mary reports on the assessment of the internal control systems with recommendations on related activities oc-curred during the fiscal year for submission to the Board of Directors Meeting in order to acknowledge theperformance of the Audit Committee and to prevent any error in management by the Executives.

Pol.Gen. ….............................................................(Sereepisuth Taemeeyaves)

Chairman of Audit Committee


Annual Report 2007

1987 Body Glove Thai Segway International Co., Ltd., has evolved from a joint investment of Mr. Nopdol Tumwattana andMr. Mark J. Walden, an American business entrepreneur with the objective of being the manufacturer ofreadymade apparel under the trademarks of Walt Disney and Body Glove to the U.S. based companies. Asa result, Mr. Nopdol Tumwattana has gained a reputable business relationship with the Body Glovetrademark owner.

1988 The Company was established on March 31st, 1988 with registered capital of Baht 10 million, with theobjective of being the distributor of readymade apparel and accessories under the Body Glove trademark .The Company was awarded the Body Glove trademark from IP Global Investments America, INC. (“IPG”).

1991 The Company increased its share capital to support the Company’s business expansion from Baht 10million to Baht 20 million.



2007 On June 29th, 2007, the Company increased its share capital to support the Company’s businessexpansion from Baht 60 million to Baht 80 million, and changed the name from Body Glove (Thailand) Co.,Ltd. to Body Glove (Thailand) Public Company Limited.

On November 23rd, 26th and 27th, 2007, the Company had made the initial public offering of 20 million sharesat par value Baht 1.00, public offered at Baht 4.70 per share.

Registered Paid-up Capital of Baht 80 million with Ministry of Commerce on November 30th, 2007. On December 11th, 2007, the Company’s share capital was established as registered securities in the MAI

During the year 1988 to May 2nd, 2007, the Company was awarded by IPG for the distribution of readymadeapparel and accessories under the trademark of Body Glove without any agreement whereas the Company hadbeen paying for the copyright or Body Glove trademark rights regularly. On May 3rd, 2007, the Company hadentered and duly signed the Master Licensing Agreement and Rights to Body Glove trademark with IPG and lateron June 1st, 2007, the Company had duly signed the Addendum to the Master Licensing Agreement and Rights toBody Glove Trademark with IPG.

Throughout the years, the Company had constantly developed and introduced new designs of readywearand related accessories under the trademark of Body Glove to match the Company’s target group customer’spreference and demand at different times. At the beginning, Body Glove readywear sold in Thailand were empha-sized on the bright and colorful design pattern and later developed new pattern to match the target groupcustomer’s preference and lifestyle under the concept of Surf Fashion & Easy Lifestyle. As a result, the Company’sproduct had gained a broaden popularity among the target group customer extensively. The Body Glovetrademark rights awarded to the Company was the exclusive rights that extended to the retails operation andbeing a representative of the manufacturer and distributor of readywear apparel including other related productsunder the trademark of Body Glove in 6 countries such as Thailand, Vietnam, Burma, Laos, Cambodia and thePhilippines. Moreover, the Company was granted the right to extend such rights of Body Glove trademark to otherindividuals as deem appropriate,


Annual Report 2007

Financial Highlights

Balance Sheet (Btm) 2005 2006 2007 Business Highlights

Total Assets 209.29

241.28

404.37

Total Liabilities 148.52

154.77

188.58

Total Shareholders' equity 60.77

86.51

215.79

P/L (Btm) 2005 2006 2007

Revenue from selling 276.10

378.59

483.48

Total Revenues 277.43

379.65

485.30

Cost of sale of goods (127.75) (172.97) (223.37)

Selling and administrative expenses (126.65) (152.16) (190.69)

Total Expenses (258.54) (330.81) (427.80) Profit before Interest exp.and Income tax

18.89

48.84

57.49

Income tax expenses (16.67) (12.43)

Interest expenses (5.22) (6.43) (5.47)

Net Profit 13.67

25.74

39.60

Finacial Ratios 2005 2006 2007

Revenue growth (%) 36.84% 27.83%

Net profit growth (%) 88.31% 53.87%

EBIT growth (%) 158.55% 17.71%

Gross profit margin (%) 54.31% 53.80%

Net Profit Margin (%) 6.78% 8.16%

DE ratio (time) 2.44

1.79

ROA (%) 11.42% 12.27%

ROE (%) 34.95% 26.20%

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81.36%

N.A.

N.A.

53.73%

4.93%

0.87

7.51%

25.34%


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.

Body

Glove

(M) S

dn Bh

d

Yen C

lub As

ia Sdn

Bhd

Yen G

roup H

olding

Corpo

ration

Sdn

Bhd

Yen G

roup P

ropert

ies (M

) Sdn

Bhd

Idama

n Berli

an Sd

n Bhd

Yen S

hoes

(M) S

dn Bh

dYo

gen F

ruz (M

) Sdn

Bhd

Irama

Piliha

n Sdn

Bhd

Sunsh

ine Sq

uare J

ewelle

rs Sdn

Bhd

Profi

les of

Boa

rd of

Direc

tors a

nd E

xecu

tives

No.

Name

Age

Educ

ation

No. o

f sha

resRe

lation

ship

Worki

ng E

xperi

ence

Posit

ion (Y

rs.)

( in

ratio

)Pe

riod

Posit

ionCo

mpan

yUp

dated

Feb

29,20

08

Note:

* Auth

orized

Perso

ns


Annual Report 2007

Profi

les of

Boa

rd of

Direc

tors a

nd E

xecu

tives

4. (Co

ntd.)

1991

-prese

nt19

91-pr

esent

1990

-prese

nt19

89-pr

esent

1988

-prese

nt19

86-pr

esent

1986

-prese

nt

Direc

torDir

ector

Direc

torDir

ector

Direc

torDir

ector

Direc

tor

No.

Name

Age

Educ

ation

No. o

f sha

resRe

lation

ship

Worki

ng E

xperi

ence

Posit

ion (Y

rs.)

( in

ratio

)Pe

riod

Posit

ionCo

mpan

yUp

dated

Feb

29,20

08Su

ntech

Enter

prise

Sdn B

hdGr

and C

ompo

nents

Sdn B

hdIm

age N

etwork

Sdn B

hdYe

n Grou

p Gold

smith

(M) S

dn Bh

dTrip

le G Ho

lding S

dn Bh

dHo

o Hwa

Const

ruction

Sdn B

hdTa

keawa

y Fash

ion Sd

n Bhd

Note:

* Auth

orized

Perso

ns


Annual Report 2007

Profi

les of

Boa

rd of

Direc

tors a

nd E

xecu

tives

5.Mr

. Goh

Kok B

eng

Direc

tor46

-Chu

ng Lin

g High

Scho

ol(A

Level

)-A

ttende

d Direc

tor Ac

credita

tionPro

gram,

Class

65/20

07 on

Augu

st 7th , 20

07

Mr. G

oh Ko

k Che

ng’s

brothe

rJun

e 200

7-pre

sent

2004

-May

2007

2002

-prese

nt20

02-pr

esent

1999

-prese

nt19

95-pr

esent

1995

-prese

nt19

95-pr

esent

1991

-prese

nt19

91-pr

esent

1990

-prese

nt19

89-pr

esent

1988

-prese

nt19

86-pr

esent

1986

-prese

nt

16.26

%13

,006,1

00sha

resDir

ector

Direc

torDir

ector

Direc

torDir

ector

Direc

torDir

ector

Direc

torDir

ector

Direc

torDir

ector

Direc

torDir

ector

Direc

torDir

ector

No.

Name

Age

Educ

ation

No. o

f sha

resRe

lation

ship

Worki

ng E

xperi

ence

Posit

ion (Y

rs.)

( in

ratio

)Pe

riod

Posit

ionCo

mpan

yUp

dated

Feb

29,20

08Bo

dy Gl

ove (Th

ailand

) Pub

licCo

m[any

Limited

Body

Glove

(Thaila

nd) C

o., Ltd

.Yen

Group

Holdin

g Corp

oration

Sdn B

hdYe

n Club

Asia S

dn Bh

dYe

n Grou

p Prop

erties

(M) S

dn Bh

dYe

n Sho

es (M

) Sdn

Bhd

Irama

Piliha

n Sdn

Bhd

Yoge

n Fruz

(M) S

dn Bh

dGr

and C

ompo

nents

SDN.B

HD.

Sunte

ch En

terpri

se Sd

n Bhd

Imag

e Netw

ork Sd

n Bhd

Yen G

roup G

oldsm

ith (M

) Sdn

Bhd

Triple G

Holdin

g Sdn

Bhd

Takea

way F

ashion

Sdn B

hdHo

o Hwa

Const

ruction

Sdn B

hd

Note:

* Auth

orized

Perso

ns


Annual Report 2007

Profi

les of

Boa

rd of

Direc

tors a

nd E

xecu

tives

6.Po

l.Gen

. Seree

pisuth

Taem

eeyav

es(Di

rector

, Inde

pend

ent

Direc

tor an

d Cha

irman

of Au

dit Co

mmitte

e

59-B

.S. Pu

blic Ad

ministr

ation

(Royal

Police

Cade

t Aca

demy

,Tha

iland)

-Atten

ded D

irector

Accre

ditation

Progra

m, Cl

ass 62

/2006

-Jun

e 200

7-pre

sent

Janua

ry 200

7-Ma

y 200

7

Presen

tPre

sent

2007

-prese

nt

2004

Octob

er 17

th ,199

8

-Dir

ector

,Ind

epend

entDir

ector

and

Chairm

an of

Audit

Comm

ittee

Direc

tor,

Indep

ende

ntDir

ector

and

Chairm

an of

Audit

Comm

ittee

Direc

torDir

ector

Nation

al Polic

eCh

iefNa

tional J

aray

Police

Depu

ty Natio

nal

Police

Chief

No.

Name

Age

Educ

ation

No. o

f sha

resRe

lation

ship

Worki

ng E

xperi

ence

Posit

ion (Y

rs.)

( in

ratio

)Pe

riod

Posit

ionCo

mpan

yUp

dated

Feb

29,20

08Bo

dy Gl

ove (Th

ailand

) Pub

licCo

mpany

Limited

Body

Glove

(Thaila

nd) C

o., Ltd

.

Airpo

rt of Th

ailand

Co., L

td.IRP

C (Pu

blic) C

o., Ltd

.Ro

yal Th

ai Polic

e

Royal

Thai P

olice

Royal

Thai P

olice

Note:

* Auth

orized

Perso

ns


Annual Report 2007

Profi

les of

Boa

rd of

Direc

tors a

nd E

xecu

tives

6. (Co

ntd.)

Octob

er 2nd

,199

8De

cemb

er 6th ,

1997

Octob

er 6th ,

1997

March

16th ,

1995

Depu

ty Polic

e Chie

f

Comm

ission

er,Ce

ntral Inv

estiga

tionBu

reau

Comm

ission

er,Ro

yal Po

lice Ca

det

Acad

emy, T

hailan

dDe

puty

Comm

issioner

,Centra

lInv

estiga

tionBu

reau

No.

Name

Age

Educ

ation

No. o

f sha

resRe

lation

ship

Worki

ng E

xperi

ence

Posit

ion (Y

rs.)

( in

ratio

)Pe

riod

Posit

ionCo

mpan

yUp

dated

Feb

29,20

08Ro

yal Th

ai Polic

e

Royal

Thai P

olice

Royal

Thai P

olice

Royal

Thai P

olice

Note:

* Auth

orized

Perso

ns


Annual Report 2007

Profi

les of

Boa

rd of

Direc

tors a

nd E

xecu

tives

Profes

sor Em

eritus

Dr. Su

rapon

e Viru

lrak

(Direc

tor, In

depe

nden

tDir

ector

and A

udit

Comm

ittee)

Mrs. A

rtivon

Bunn

ag(Di

rector

, Inde

pend

ent

Direc

tor an

d Aud

itCo

mmitte

e)

63 37

-Ph. D

. (Dram

a and

Thea

tre),

Unive

rsity o

f Haw

aii, U.

S.A.

-M.A.

(Dram

a and

Thea

tre),

Unive

rsity o

f Wash

ington

, U.S.A

.-A

ttende

d Direc

tor Ac

credita

tionPro

gram,

Class

62/20

06

-MBA

Busin

ess Ad

ministr

ation

Unive

rsity o

f Arka

nsas a

tLitt

le Roc

k, U.S.

A.-A

ttende

d Direc

tor Ac

credita

tionPro

gram,

Class

61/20

06

- -Jun

e 200

7 -pre

sent

Janua

ry 200

7-Ma

y 200

7

July 1

995 -

presen

tOc

tober

25th ,

1967

–Se

ptemb

er 30th ,

2004

June 2

007 -

presen

t

Janua

ry 200

7 -Ma

y 200

7

2006

-prese

nt20

04-20

06

2001

-2004

- -Dir

ector

,Ind

epend

entDir

ector

and A

udit

Comm

ittee

Direc

tor,

Indep

endent

Direc

tor an

d Aud

itCo

mmitte

eDir

ector

Profes

sor Em

eritus

Direc

tor,

Indep

endent

Direc

tor an

d Aud

itCo

mmitte

eDir

ector

,Ind

epend

entDir

ector

and A

udit

Comm

ittee

Direc

torAs

sistan

t to CE

O(Inv

estor R

elation

s)As

sistan

t to CE

O

No.

Name

Age

Educ

ation

No. o

f sha

resRe

lation

ship

Worki

ng E

xperi

ence

Posit

ion (Y

rs.)

( in

ratio

)Pe

riod

Posit

ionCo

mpan

yUp

dated

Feb

29,20

08Bo

dy Gl

ove (Th

ailand

) Pub

licCo

mpany

Limited

Body

Glove

(Thaila

nd) C

o., Ltd

.

Gold M

aster

(Public

) Co.,

Ltd.

Facu

lty of C

omme

rcial

Arts,

Chula

longk

orn Un

iversit

y

Body

Glove

(Thaila

nd) P

ublic

Comp

any Lim

ited

Body

Glove

(Thaila

nd) C

o., Ltd

.

Triwa

ntra C

o., Ltd

.Ka

ntana

Grou

p (Pu

blic) C

o., Ltd

.

Trinity

Advis

ory (2

001)

Co., L

td.No

te: * A

uthori

zed Pe

rsons

7. 8.


Annual Report 2007

Profi

les of

Boa

rd of

Direc

tors a

nd E

xecu

tives

Miss D

olnap

aTum

wattan

a(O

perat

ions D

irecto

r)

Miss W

aristh

aTh

apan

asakul

vong

(Chief

Finan

ce Of

ficer)

26 44

-B.S.

Busin

ess Ad

ministr

ation,

Marke

ting, U

nivers

ity of S

anFra

ncisc

o, Calif

ornia,

U.S.A.

-CA P

rofess

ional D

esign

ation

Degre

e, Majo

r: Merc

hand

ising

Produ

ct Deve

lopme

nt, Fas

hion

Institu

te of D

esign

&Me

rchan

dising

(FIDM

) Los

Ange

les, U

.S.A.

-B.S.

Busin

ess Ad

ministr

ation,

Manag

ement

, Ramk

hamhae

ngUn

iversit

y

Mr. N

opdo

lTum

wattan

a’sda

ughte

r and M

rs.Ma

llikar L

eerap

han’s

niece

-

June 2

007 -

presen

t20

04-M

ay 20

07

June-O

ctobe

r200

4

March

-June

2003

June 2

007 -

presen

t20

06-M

ay 20

0719

96-20

06

25.16

%20

,130,0

00sha

res

0.24 %

190,00

0sha

res

Opera

tions

Direc

torMa

rketing

and

Opera

tions

Manag

erAs

sistan

tDe

signe

rInte

rnship

Interns

hip

Chief

Finan

ceOff

icer

Finan

ce Co

ntrolle

rAc

coun

t Man

ager

No.

Name

Age

Educ

ation

No. o

f sha

resRe

lation

ship

Worki

ng E

xperi

ence

Posit

ion (Y

rs.)

( in

ratio

)Pe

riod

Posit

ionCo

mpan

yUp

dated

Feb

29,20

08Bo

dy Gl

ove (Th

ailand

) Pub

licCo

mpany

Limited

Body

Glove

(Thaila

nd) C

o., Ltd

.

Bisou

Jean

s / Tru

e Mea

ning,

USA

Body

Glove

(Thaila

nd) C

o., Ltd

.

Body

Glove

(Thaila

nd) P

ublic

Comp

any Lim

itedBo

dy Gl

ove (Th

ailand

) Co.,

Ltd.

Body

Glove

(Thaila

nd) C

o., Ltd

.

Note:

* Auth

orized

Perso

ns

9. 10.


Annual Report 2007

Profi

les of

Boa

rd of

Direc

tors a

nd E

xecu

tives

Mr. C

hai

Ratan

amaha

wong

(Senio

r Fina

nce

Mana

ger)

Miss M

ethira

Thon

gsuw

an(Se

nior

Acco

unt M

anag

er)

40 39

-B.S.

Busin

ess Ad

ministr

ation,

Finan

ce an

d Ban

king,

Assum

ption U

nivers

ity

-B.S.

Busin

ess Ad

ministr

ation,

Depa

rtmen

t of Ac

coun

ting,

Ramk

hamh

aeng

Unive

rsity

- -

June 2

007-

presen

t20

06-M

ay 20

0720

01-20

05

June 2

007-

presen

t19

91-M

ay 20

07

- -

Senio

r Fina

nce

Manag

erFin

ance

Mana

ger

Finan

cial An

alyst

Senio

r Acc

ount

Manag

erAc

coun

t Man

ager

No.

Name

Age

Educ

ation

No. o

f sha

resRe

lation

ship

Worki

ng E

xperi

ence

Posit

ion (Y

rs.)

( in

ratio

)Pe

riod

Posit

ionCo

mpan

yUp

dated

Feb

29,20

08Bo

dy Gl

ove (Th

ailand

) Pub

licCo

mpany

Limited

Body

Glove

(Thaila

nd) C

o., Ltd

.Tu

ntex (T

hailan

d) Pu

blic Co

., Ltd.

Body

Glove

(Thaila

nd) P

ublic

Comp

any Lim

itedBo

dy Gl

ove (Th

ailand

) Co.,

Ltd.

Note:

* Auth

orized

Perso

ns

11. 12.


Annual Report 2007

List of the top 10 shareholders as shown in the Share Registration Book as of February 29th, 2008

1. Miss Dolnapa Tumwattana 20,130,000 25.162. Mr. Goh Kok Beng 13,006,100 16.263. Mr. Goh Kok Cheng, Dickson 12,756,100 15.954. Mr. Nopdol Tumwattana 9,736,000 12.175. Mr. Tawat Tassaneepong 2,990,000 3.746. Thai N VDR Co.,Ltd. 2,103,600 2.637. Mr. Witit Pongpirodom 1,050,000 1.318. Mr. Pisit Sotipanchai 725,000 0.919. Mr. Siew Them Hee 700,000 0.8810.Mr. Liew Kian Huat 600,000 0.75

Total Shares 63,796,800 79.76

The groups of major shareholders responsible for setting company policies are consisted of members ofTumwattana’s Family being Mr. Nopdol Tumwattana as Directors in addition to members Malaysian Investorsbeing Mr. Goh Kok Cheng, Dickson and Mr. Goh Kok Beng.


Annual Report 2007

Body Glove (Thailand) Public Company Limited operate a retail business on the distribution of readywearapparel and related accessories under the trademark of Body Glove with Hand Device.

The high quality product at affordable price being distributed by the Company under the trademark ofBody Glove consisted of readywear apparel for men and women, ages 15 – 35 years including related accesso-ries such as back pack, shoulder bag, traveling bag, wallet, pencil case, cap and socks.

The Company constantly developed store expansion to cover all regions during the year 2007 by addingmore flagship stores and outlets in the department stores including regularly redecorated the existing flagshipstores in terms of design and uniqueness to be in line with the new stores. In addition, the Company also placedhigh emphasis on the selection of new location for flagship stores in terms of prime location and to be in line withthe demand of the market region.

As at December 31st, 2007, the Company sold the product through 41 Body Glove flagship stores situatedin prime business locations and through 30 counters in the leading department stores. The said flagship storesand Body Glove counters are situated in Bangkok and major provinces in all regions of the country such asNonthaburi, Chiangmai, Chiangrai, Chonburi, Chanthaburi, Rayong, Kanchanaburi, Ayudhya, Phetchaburi, NakhonRatchasima, Ubon Ratchatani, Udon Thani, Nongkhai, Konkaen, Prachuap Khiri Khan, Surat Thani, Phuket, Krabi,Songkhla, Nakhon Si Thammarat, Chumphon, Lampang and Nakhon Sawan. Moreover, the Company also hasone warehouse situated at No. 299/9 Moo 7, Phahonyothin Road, Bangkean, Bangkok, the area as the head officewhich is convenient for product distribution arrangement to various stores and to oversee the inventory.

As at December 31st, 2007, the Company sold the product through local channels only through distribu-tion channels as follows:

(1) Distribution through 41 Body Glove Flagship Stores located major shopping mall in Bangkok andmajor provinces in all regions of the country.

Province No. of Outlets Address

Bangkok 17

(3)

(4) The Mall Bangkapi

(5) Cenral Plaza, Ladprao

(7) Central Plaza, Pinklao

(9) Central Plaza, Ratchada-Rama 3

(11) (12) Tesco Lotus, Laksi

(13) (14) Siam Square Soi 4

(15) Thaniya Plaza, BTS Wing

(17)

Nonthaburi 1 (1) Central Town, Rattanathibet

Chiangmai 2 (2) Kad Suan Kaew Shopping Center

Chiangrai 1

Chonburi 5 (2) Tesco Lotus, South Pattaya

(3) Bang Lamung

(5) Royal Garden

(1) MBK Center (2) Seacon Square

Fashion Island

(6) Central City Bangna

(8) Central Plaza, Rama 2

(10) The Mall, Thapa

Tesco Lotus, Rama IV

Big C Supercenter, Rajdamri

(16) Union Mall

Central World Plaza

(1) Central Airport Chiangmai

(1) Big C Super Center, Chiangrai

(1) Central Festival, Pattaya

(4) Carrfourre


Annual Report 2007


Bangkok 10

Building

(2) Robinson Department Store, Ratchadaphisek Branch (Women’s

Clothing Section)

(3) Robinson Department Store, Sukhumvit Branch

(4) Robinson Department Store, Bangrak Branch

(5) Robinson Department Store, Ladya Branch

(6) Robinson Department Store, Srinakarin Branch

(7) Robinson Department Store, Silom Road Branch

(8) Robinson Department Store, Ratchadaphisek Branch (Men’s

Clothing Section)

(9)

(10)

(1) Bangkok Tokyu Department Store Ltd., Mahboonkrong Center

The Mall Department Store, Bangka Branch

The Mall Department Store, Bangkapi Branch


Ayudhya 1 (1) Ayudhya Park

Phetchaburi 1 (1) Premium Outlet Project – Cha-am

Nakhon

Ratchasima

1 (1) The Mall, Nakorn Ratchasima

Ubon

Ratchatani

2 (1) Big C, Ubon Ratchatani (2) S K Shopping Center

Udon Thani 1 (1) Charoensi Arcade

Nongkhai 1 (1)

Konkaen 1 (1)

Prachuap

Khiri Khan

1 (1)

Surat Thani 1 (1) Tesco Lotus, Surat Thani

Phuket 1 (1) Tesco aLotus, Phuket

Krabi 1 (1)

Songkhla 1 (1) Indra Hotel, Had Yai

Nakhon

Thammarat

1 (1) Carrfourre

Nakhon

Sawan

1 (1)

Total 41

Si

Big Chiang Shopping Center, Nongkhai

Com Building, Shopping Plaza, Konkaen

Hua-hin Market Village

Tesco Lotus, Krabi

Fairyland

(2) Distribution through 30 Body Glove Counters in leading department stores in Bangkok and majorprovinces in all regions of the country.


Annual Report 2007


2 (1) Robinson Department Store, Rattanathibet Branch

(2)

1 (1) Robinson Department Store, Rangsit Branch

1 (1) Chokpatara Paisan Co., Ltd., Amphur Muang, Krabi Province

5 (1) Ocean Shopping Mall Phuket, Amphur Muang, Phuket Province

(2)

(3)

(4)

Phuket Province

(5)

Songkhla 1 (1)

Province

Nakhon

Thammarat

1 (1) C R Nakhon Si Thammarat (Thailand) Co., Ltd., Amphur Muang,

Nakhon Si Thammarat Province.

1 (1) Fairy Plaza Co., Ltd., Muang City Hall, Amphur Muang, Konkaen

Province

1 (1) C R Chanthaburi (Thailand) Co., Ltd., Amphur Muang,

Chanthaburi Province

1 (1) Sirat Theppratan Co., Ltd., Branch 4, Amphur Muang, Rayong

1 (1) Robinson Department Store, Ayudhya Branch

1 (1) Kanokphet Center Co., Ltd., Amphur Muang, Kanchanaburi

Si

Province

1 (1) Warehouse Plaza Department Store

1 (1) Seri Department Store, Lampang

1 (1) Ocean Department Store, Chumphon

Total 30

Nonthaburi

Pathum Thani

Krabi

Phuket

Konkaen

Chanthaburi

Rayong

Ayudhya

Kanchanaburi

Nakhon

Ratchasima

Lampang

The Mall Department Store, Ngamwongwan Branch

Robinson Department Store, Amphur Muang, Phuket Province

Ocean Plaza Pa Tong Co., Ltd., Amphur Kratu, Phuket Province

Ocean Plaza Pa Tong Co., Ltd., Bang La Branch, 31 Tambol Kratu,

Jangsilon, Amphur Kratu, Phuket Province.

C R Hadyai (Thailand) Co., Ltd., Amphur Had Yai, Songkhla

Chiangmai 1 (1) Robinson Department Store, Chiangmai Branch


Annual Report 2007

Product CharacteristicThe Company’s products are divided into 2 categories as follows:

Readywear Apparel under Body Glove TrademarkThe Company is a distributor of readywear apparel for both men and women, ages 15 - 35 years. The

product varieties include range of choices, captivating designs and colors, featuring high absorbance, soft anddurable fabric, easy to wear and care with long lasting colors.

The readywear apparels are allotted into 2 types as follows:(1) Surf & Trend – featuring readywear clothing with high emphasis on innovative and uniqueness of

California Lifestyle with Body Glove trandemark imprinted on the product. Some of the products are T-shirt,V-neck T-shirt, sheer T-shit, seamless T-shirt, collared T-shirt, undershirt, tank top, 3 quarter shorts, 4 quartershorts, casual shorts, nylon shorts, cargo shorts and other modern and trendy style fashion products, etc. Theproduct price range is Baht 600 - 1,500 and the target group customers are youngsters and working professional.

(2) Easy Lifestyle – featuring readywear clothing based on simplicity but stylish and trendy that can beworn in various occasions. The design highlights are kept at minimal, clear-cut, not flashy without emphasizing theBody Glove trandemark (the product may or may not have Body Glove trademark and hand logo imprinted). Someof the products are Polo shirt, shirt, long sleeves shirt, collared shirt, 5 pockets trousers, basic trousers,jeans, etc. The product price range is Baht 400 - 1,000, and the target group customers are workingprofessional.

Accessories under Body Glove TrademarkThe products in this category have become a valuable component in the product mix which offer

the widest range of accessories such as different types of bags, i.e., shoulder bag, backpack, travelingbag, wallet, pencil case, cap, socks, etc. The product price range is Baht 290 - 1,000, and the target groupcustomers are yongsters and working professional.

Market and Competitive Condition

Industry OutlookThai Garment Manufacturers Association had experienced a rapid growing rate which also spread over

the readywear clothing for men, women and children. This phenomenon is believed to be new for Thai people asthough the fashion product with trademark brand had launched its fist appearance in the Kingdom of Thailandduring the past 25 years only. Presently, the Textile Industry of Thailand has played a significant role in the NationalEconomy System, accountable for 17% of the National GDP, with total export value of US Dollar 6,842 million andtotal import value of US Dollar 3,453 in Y2006. Whereas the market section for readywear in the country is highlycompetitive among the local readywear entrepreneur, the importer of readywear apparel under internationallicense trademark and the importer of low-cost readywear from China, Vietnam and India. However, there is nodata collection from any trustworthy source to verify the total market value for the distribution of readywear apparelwithin the country. As for the distribution of readywear apparel featuring California Lifestyle in Thailand, no otherentrepreneur has been awarded the license trademark directly from the trademark owner besides our company.

During the past year, the market sector of readywear apparel of the country was steadily growing (Sources:


Annual Report 2007

Body Glove (Thailand) Public Company Limited) as a result of the market strategy conducted by each entrepre-neur to build popularity in the Brand in addition to the greater number of distribution channels for consumersthrough stand alone Flagship Stores and Outlets in the department stores.

The tendency for readywear industry outlook tends to expand at the close proximity as the rate of eco-nomic growth expansion. However, the competitive edge will remain at a highly competitive level for local entre-preneur and readywear importer. Therefore, each entrepreneur must place strong emphasis on product qualityand design to match the preference of the target group customer, to build brand loyalty and to have differentmarket strategies to win over the consumer,

Market Conditions and Competition Policy(a) Competition Strategy- Product QualityThe Company’s products are the products of unique identity with the accent of California Lifestyle in

which the Company place a high emphasis on product selection to match the lifestyle of its target group custom-ers. With this, the Company had developed its product to be in line with the target group customers’ demandunder the concept of Surf Fashion & Easy Lifestyle. Therefore, the Company value the importance of productquality and only use first-class quality COTTON material that ensure high absorbency, soft and durable fabric,comfortable to wear, easily clean, with ranges of designs and colors to fulfil the needs of the target group custom-ers whilst styles are modern and trendy to match everyday lifestyle.

- Flagship Stores EnvironmentThe importance of Flagship Store environment was given to the Visual Merchandise Display (“VM Dis-

play”) which covered all area of store environment, product display, POP signage display, store arrangement anddecoration equipment. Each Flagship Store will be arranged in standard uniformity to enhance brand recogni-tion on the target group customers. The emphasis will be given to the modernity and unique identity of Body Glove.As for product presentation, there are 2 types of display as follows:

1. Arranged by color scheme such as cool, hot, pastel, bright, gray and displayed in terms of shade, i.e.,light to dark, dark to light, light in the center, or dark in the center, etc.

2. Arranged by category according to the size of the store such as small-sized store, medium-sized storeor large-sized store.

VM Display is considered an effective way of product presentation due to (1) the format is clean, simpleand clear that is easy to remember and select the merchandise; (2) the display of merchandise has clear dimen-sion and easy to highlight the prominent product by using the light an color coordination; (3) able to present newcollections continuously; and (4) able to display the product by Product Theme or Store Theme to emphasize thesales volume and brand image.

- Service AreaThe Company emphasizes on the valued add service by serving the customers with highly trained staff to

assure the customer excellent service. The staff will be able to respond to the requirement of the customer’spreference and can give useful product advice. The staff will be trained to invite the customers to try on the clothingand take care of the customers as deem appropriate in order to increase the customer satisfaction. Moreover, theCompany had installed the internet web camera at various Flagship Stores and linked to the head office. As aresult, the head office could follow-up on the services provided by the staff at each store location on a real-time basis.

- Pricing PolicyThe pricing policy for the Company’s products is based on cost, type of product, model and gross profit

margin as preliminary set wherein each store there is only One Price Policy which may be varied on store promo-tion at different intervals to match the requirement of each target group customer at each location. In addition, the


Annual Report 2007

Distribution Ratio Y2005 Y2006 Y2007

Through Flagship Stores 84% 79%

Through Body Glove Counters in

Department Stores

16% 21%

Total 100% 100% 100%

73%

%27

Company’s policy is to offer a reasonable and competitive price to the customer. With this, the Company hadlaunched a super value program by offering a Combo set or selling in pairs by applying to simple readywearclothing that are comfortable to wear, able to mix and match with other products easily, The program is a supervalue as the products are sold in pairs but can be sold separately as well, for example, Polo shirt, T-shirt, Mini Poloshirt, undershirt, tank top, etc. The price range for this product category is from Baht 250 to 400, and the targetgroup customers are school and college students and young working professional.

When compared the Company’s selling price to local brand distributor’s selling price, it was concluded that ourcompany was in a highly competitive position and could compete in terms of “Combo” set products of the sameprice point as of those local brand due to the Body Glove Trademark was more universally accepted than localbrand.

- Market Support and Public RelationsThe Company had continued its market support through various advertising campaigns via mass media

such as, radio, newspaper, magazines, leaflets, billboard at various locations and through event marketing inorder to build brand awareness under Body Glove Trademark. Additionally, the Company had introduced itsproduct through the company’s website <http://www.bodyglove.co.th/> to promote new products and news up-date to the customers. The Company also organized special activities, such as, launching seasonal and specialholiday promotion, highlighting promotional area to attract the customer’s interest, offering the customer to buyspecial premium with regular purchased items, offering Gift Voucher during holiday season, PR on variouspromotions via different media, building strong relationship with other suppliers, i.e., joined with department storesin renting the area for product distribution and participated in the joint promotion, joined with the government andprivate entrepreneur for social contribution activities, etc.

(b) Nature of Customer and Target Group CustomerThe Company separates its customers and target group customers into 2 major groups as follows:(1) school and college students, both men and women, ages 12-25 years.(2) young working professional and adults, both men and women, ages 25 years and over.The Company placed high emphasis on the continuity of product development to be in line with the

requirement of both target group customers.

During the previous 3 years, the Company had not sold to any one particular customer in excess of 30%of total sales revenues due to the nature of retails business operated by the Company.

(c) Sales and Distribution ChannelsThe Company’s distribution channels are through Flagship Stores and Outlets in department stores. The

distribution through aforementioned channels during the past years are shown in ratio as follows:The total sales derived from Bangkok and its perimeter was accountable for 51% of total sales revenues.


Annual Report 2007

Revenue Structure

Revenue structure of the company during 2005 – 2007, classified by the product lines:

Year 2005 Year 2006 Year 2007 Items Operated

by M.Baht % M.Baht % M.Baht %

1. Sales revenue

1.1 Clothing sales Company 256.77 92.55 352.09 92.74 433.05 89.23

1.2 Related product sales Company 19.33 6.97 26.50 6.98 50.43 10.39

Total sales revenue Company 276.10 99.52 378.59 99.72 483.48 99.63

2. Foreign exchange gains Company - - 0.54 0.14 1.07 0.22

3. Other incomes Company 1.33 0.48 0.52 0.14 0.75 0.15

Total revenue Company 277.43 100.00 379.65 100.00 485.30 100.00

Additional Explanation:

- All sales revenue is from domestic sales

- Related products include bag pack, bag, luggage, wallet, stationary bag, hat and socks.

- Sales revenue for clothing and related products in 2005 and 2006 are estimate figures. However,

the company starts collecting actual figures from 2007 onwards.

Revenue structure of the company during 2005 – 2007, classified by geographical regions:

2005 2006 2007 Items Operated

by M.Baht % M.Baht % M.Baht %

1. Sales revenue

1.1 Sales revenue from Bangkok and

Greater Bangkok

Company 185.73 67.27 213.79 56.47 243.63 50.39

1.2 Sales revenue from provincial areas Company 90.37 32.73 164.80 43.53 239.85 49.61

Total Sales revenue Company 276.10 100.00 378.59 100.00 483.48 100.00

Additional Explanation:

- Sales revenue from Bangkok and boundaries during 2007 came from 19 shops and 14 department store counters.

- Sales revenue from provincial areas during 2007 came from 22 shops and 16 department store counters.


Annual Report 2007

(Unit: Baht Thousand)

Y 2005 Y 2006 Y 2007

Amount % Amount % Amount %

CURRENT ASSETS

Cash on hand and at banks 2,698 1.29 16,667 6.91 69,039 17.07

Accounts Receivablea – Connection Transactions 710 0.34 - - - -

Accounts Receivables – Others – net 12,643 6.04 17,352 7.19 26,929 6.66

Inventories – net 79,235 37.86 71,063 29.45 157,054 38.84

Other current assets 3,417 1.63 1,837 0.76 4,731 1.17

Total Current Assets 98,703 47.16 106,919 44.31 257,752 63.74

NON-CURRENT ASSETS

Plant and equipment – net 93,202 44.53 113,672 47.11 107,334 26.54

Trademark – net - - - - 16,496 4.08

Other non-current assets – deposit 17,385 8.31 20,691 8.58 22,793 5.64

Total Non-Current Assets 110,587 52.84 134,363 55.69 146,622 36.26

TOTAL ASSETS 209,290 100.00 241,282 100.00 404,374 100.00

CURRENT LIABILITIES

Overdrafts and short-term borrowing from financial

institutions 36,486 17.43 14,191 5.88 8,181 2.02

Trade Accounts Payable – Connection Transactions 998 0.48 - - - -

Trade Accounts Payable – Others 48,882 23.36 44,891 18.61 78,545 19.42

Current portion of liability under financial lease

contract due within 1 year

2,479 1.18 2,332 0.97 1,829 0.45

Current portion of long-term loan from related parties

due within 1 year

- - 6,000 2.49 6,000 1.48

Other current portion of long-term loan due within 1

year 1,385 0.66 4,081 1.69 6,300 1.56

Other current liabilities

Other current liabilities - accrued 10,

Total Current Liabilities 101,059 48.28 99,082 41.07 126,342 31.24

NON-CURRENT LIABILITIES

Liabilities under financial lease contract 5,381 2.57 3,576 1.48 2,113 0.52

Long-term loan from related parties 35,500 16.97 35,500 14.71 29,500 7.30

Other long-term loan 5,630 2.69 15,390 6.38 18,700 4.62

Other non-current liabilities

Accrued Trademark - - - - 10,166 2.51

Employee Bond 948 0.45 1,227 0.51 1,764 0.44

Total Non-Current Liabilities 47, 22. 55,693 23.08 62,242 15.39

TOTAL LIABILITIES 148,518 70.96 154,775 64.15 188,584 46.64

SHAREHOLDERS’ EQUITY

Share Capital

Issued and Paid-up Share Capital 60,000 28.67 60,000 24.87 80,000 19.78

Share Premium - - - - 69.680 17.23

Retained Earning

Appropriate – Legal Reserve 370 0.18 370 0.15 2,350 0.58

Unappropriate 402 0.19 26,137 10.83 63,760 15.77

Total Shareholders’ Equity 60,772 29.04 86,507 35.85 215,790 53.36

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 209,290 100.00 241,282 100.00 404,374 100.00

829 5.17 27,587 11.43 25,487 6.30

459 68

1. Summary of Financial StatementsBalance Sheets, Statements of Income and Expenditure, and Statement of Cash Flows for the past three

years for fiscal years ending December 31st , 2005, 2006 and 2007 are shown in the Tables hereunder:Body Glove (Thailand) Public Company Limited

Balance SheetsAs of December 31st , 2005, 2006 and 2007


Annual Report 2007


Y 2005 Y 2006 Y 2007

Amount % Amount % Amount %

REVENUES

Revenues from selling 276,103 99.52 378,588 99.72 483,479 99.63

Revenues from exchange rate - - 537 0.14 1,071 0.22

Other revenues 1,328 0.48 522 0.14 746 0.15

Total Revenues 277,431 100.00 379,647 100.00 485,296 100.00

EXPENDITURE

Cost of goods sold 127,745 46.05 172,968 45.56 223,373 46.03

Selling and administrative expenses 1 , 4 . 15 , 4 . , .

Total Expenditure 258,540 93.19 330,806 87.14 427,801 88.15

Profit (loss) before interest and income tax expenses 18,891 6.81 48,841 12.86 57,494 11.85

Interest expenses 5,225 1.88 6,431 1.69 5,466 1.13

Income tax expense - - 16,674 4.39 12,426 2.56

Net Profit (loss) 13,666 4.93 25,735 6.78 39,602 8.16

Par Value (Baht) 1,000 1,000 1

Net Profit per share (Baht) 227.77 428.92 0.64

30 795 7 14 7 835 1 57 204 429 42 12

⌧


Annual Report 2007


Y 2005 Y 2006 Y 2007

CASH FLOWS FROM OPERATING ACTIVITIES

Net profit 13,666 25,735 39,602

Adjustments for net profit (loss) of cash provided by (used in) operating

activities:

Depreciation 14,415 18,940 23,658

Aloowance for bad debts and doubtful accounts 1,684 246 -

Allowance for discount on outdated goods (reveral) 1,056 103 (239)

Loss from amortization of fixed assets 2,054 799 1,244

Unrealized loss (gain) on exchange rate - 149 (237)

Loss (gain) on disposal of fixed assets - 130 (122)

Accounts receivables – Connection Transactions (increase) (710) 710 -

Accounts receivables – Others decrease (increase) 3,593 (4,955) (9,577)

Inventories decrease (increase) (30,545) 8,070 (85,751)

- - (2,598)

Others current assets – credit on value added tax decrease (increase)

- Others decrease (increase) 605 1,580 1,102

Other non-current assets – deposit decrease (increase) (6,751) (3,307) (2,101)

Trade accounts payable – Connection Transactions increase (decrease) 724 (998) -

Trade accounts payable – others increase (decrease) 36,454 (4,137) 33,639

Other current liabilities – Accrued income tax expense increase

(decrease) - 13,524 (8,668)

Other current liabilities – Accrued expense increase (decrease) 2,953 (1,103) 8,580

Other current liabilities – Assets payable increase (decrease) (1,751) (1,209) (4,108)

Other current liabilities – Others increase (decrease) (768) 1,435 (1,745)

Other non-current liabilities – Employee Bond increase (decrease) 249 279 536

Net cash provided by (used in) operating activities 36,927 55,991 (6,785)

CASH FLOWS FROM INVESTING ACTIVITIES

Cash payment for purchase of plant and equipment (32,033) (36,785) (15,254)

Cash received from sales of plant and equipment - 993

Cash payment of initial fee for purchase of trademark - -

124

(6,945)

Net cash provided by (used in) investing activites (32,033) (35,792) (22,075)

CASH FLOWS FROM FINANCING ACTIVITIES

Overdrafts and short-term borrowing from financial institutions increase

(decrease) 403 (22,295) (6,011)

Short-term borrowing from related party increase (decrease) (10,000) - -

Liability under financial lease contract increase (decrease) (2,144) (2,390) (1,966)

Long-term loan from related parties increase (decrease) 8,500 6,000 (6,000)

Other long-term loan increase (decrease) (1,348) 12,456 5,529

Cash received from capital increase - - 89,680

Net cash provided by (used in) financing activities (4,589) (6,230) 81,232

Cash and Cash Equivalent Items increase (decrease) – Net 305 13,969 52,372

Cash and Cash Equivalent Items as at the Beginning of the Year 2,393 2,698 16,667

Cash and Cash Equivalent Items as at the End of the Year 2,698 16,667 69,039


Annual Report 2007

Y 2005 Y 2006 Y 2007

Liquidity Ratio

Liquidity ratio (time) 0.98 1.08 2.04

Current liquidity ratio(time) 0.16 0.34 0.76

Current accounts receivables ratio – (time) 3.60 5.23 5.12

Average collection period (day)

Current inventories (time) 1.73 2.34 1.98

Average selling period – (day) 211 156 184

Current accounts payable (time) 2.56 3.55 2.84

Collection period – (day) 143 95 129

Cash Cycle – (day)

131 126

Profitability Ratio)

Gross profit margin (%) 53.73% 54.31% 53.80%

Profit from operation (%) 6.84% 12.90% 11.89%

Net profit (%) 4.93% 6.78% 8.16%

ROE (%) 25.34% 34.95%

Efficiency Ratio)

ROA (%) 7.51% 11.42% 12.27%

Ratio of fixed assets (time) 1.52 1.68 1.50

Financial Policy Ratio

DE ratio (time) 2.44 1.79 0.87

Share Profile

Par value (Baht) 1,000.00 1,000.00 1.00

Book value per share (Baht) 1,012.87 1,441.80 0

Net profit (loss) per share (Baht) 227.77 428.92 0.64

2.7

Time interest earned (time) 3.62 7.59 10.52

169

26.20%

101 70 71


Annual Report 2007

2. Management Discussion and Analysis on Financial Status and Operating Results

The Company’s operation results for the past three years (Y2005-2007) were relatively growing due to theincreasing of sales growth in total revenues. The Company’s net profit before interest and income tax expenses forthe fiscal year ending December 31st, 2007 was Baht 57.49 million. The interest expense was Baht 5.47 millionand income tax expense was Baht 12.42 million; thus, net profit was Baht 39.60 million, increased Baht 13.87million or 53.87% when compared to the previous year.

RevenuesIn Y2007, the sales revenues was Baht 483.48 million, increasing 27.72% when compared to Y2006 sales

revenues of Baht 378.59 million. The growth in sales revenues was due to the continuity of flagship stores andoutlets expansion in the department stores. Such growth stems from 37 flagship stores and 22 outlets in thedepartment stores in Y2006 to 41 stores and 30 outlets at the end of Y2007 respectively.

The Company’s revenues from flagship stores were accounted for 73.03% and revenues from outlets in thedepartment store were accounted for 26.97% of total sales revenues.

The Company believes in the importance of the continuation of marketing activities and the selection ofproduct that correspond to the demand of the target group customer. Meanwhile, the Company has constantlydeveloped and introduced new design of modern and trendy readywear to match the customers’ needs whilstmaintain the unique California Lifestyle of full color and texture that cultivating the customers’ admiration of “BodyGlove” brand extensively.

Cost of Goods SoldIn Y2007, the cost of goods sold was Baht 223.37 million, increasing 29.14% when compared to Y2006

of Baht 172.97 million. The gross profit margins were 54.44% and 53.97% in Y2006 and Y2007, respectively dueto the Company’s precedence on the cost of goods sold control policy to be at appropriate level.

Trademark LicenseIn Y2007, The Royalty fee was Baht 13.74 million while in Y2006 was Baht 5.67 million which was increased

by Baht 8.07million. This is due to increasing in sales growth. Since 1st July 2007 hereinafter (Operating License &Sublicense right agreement become effective) the company had paid for the royalty fee as set in the agreement inratio which is compliance to the sale revenue with appropriate price.

Selling and Administrative ExpensesIn Y2007, the selling and administrative expenses were Baht 190.69 million, increasing 25.32% when

compared to Y2006 of Baht 152.16 million. The selling and administrative expenses was increased at a lower ratein relation to sales growth rate of 27.71%. This is due to some part of expense constant while sales revenueincreased, together with the company’s cost control policy on selling and administrative expenses at appropriate level.

Interest ExpenseIn Y2007, the interest expense was Baht 5.47 million, or 1.13% of total revenues when compared to Y2006

of Baht 6.43 million, or 1.69% of total revenues. The decrease in interest expense of 15.02% in Y2007 was mainlydue to the increase of liquidity of cash flows from flagship stores in addition to the cash received from capitalincrease from the sales of share capital of 20 million shares in November 2007, totaling Baht 29.19 million as cash flows.

Net profit for Y2006 and Y2007 was equivalent to 6.78 percent and 8.18 percent respectively.


Annual Report 2007

Financial Status

AssetsThe company has total assets as at the end of 2006 and 2007 of Baht 241.28 million and Baht 404.37

million, respectively. As the company operate finish cloth and related retailing buiness through many shops bothin Bangkok and major provinces in the countries, assets comprised mainly of (1) building and equipment, suchas right to shop lease, building and building improvement, building decoratives, office equipment and vehicles.As at the end of 2006 and 2007, the building and equipment – net were total of Baht 113.67 million and Baht 107.33million, respectively. (2) 2006 and 2007 inventories-net, such as finished goods and raw materials were total ofBaht 71.06 million and Baht 157.05 million, respectively.

The current assets as at the end of 2006 and 2007 were at Baht 106.92 million and Baht 257.75 million,respectively. The current assets mainly composed of inventories, account receivable, cash and bank deposit.

Right to shop lease as at the end of 2006 and 2007 were Baht 41.42 million and Baht 35.29 million,respectively. The decline in 2007 was due to long-term lease cancellation of the Living Asset Development’sproject in Samui in October 2007.

Asset qualityThe Company has other account receivable-net of Baht 17.35 million and Baht 26.93 million during 2006

and 2007, respectively. All receivables are from department stores.

Details of receivable – other business as of the end of 2005, 2006 and 2007: (Unit: Baht)

Account receivable – Other businesses As at 31 Dec. 2005 As at 31 Dec. 2006 As at 31 Dec. 2007

(Department store receivable)

Not due 12,616,208.87 17,351,967.87 26,887,739.78OverdueLess than 3 months - - 41,036.213 to 6 months - - -6 to 12 months - - -Over 12 months 1,060,201.40 1,092,519.01 -Total 13,676,410.27 18,444,486.88 26,928,775.99Deduct Allowance for doubtful account (1,033,673.91) (1,092,519.01) -Receivable-other business – net 12,642,736.36 17,351,967.87 26,928,775.99

The company normally provides 60-day credit term for customers. During 2006 and 2007, the companyhas average collection period of 70 days and 71 days, respectively. The company has policy to collect debtaccording to the given credit term. The company never has collection problem.

The company has policy to set aside allowance for doubtful account by considering customer’s currentfinancial status and collection track record with specific customers. Then the company will estimate the amountthat could be default. The company has already wrote down all allowance for doubtful account.

The company has inventories-net as at the end of 2006 and 2007 of Baht 71.06 million and Baht 157.05million, respectively. Inventories climbed during 2007 as the company prepare more goods to anticipate highersales during 2008, and many producers took long holidays. The Company has set aside allowance for obsoletestock worth Baht 0.92 million.


Annual Report 2007

Inventories as of 2005, 2006 and 2007 were as follow:

(Unit: Baht)Inventories As of 31 Dec.2005 As of 31 Dec. 2006 As of 31 Dec.2007

Finished goods 77,330,639.77 70,719,573.63 154,356,405.24Raw materials (halogram, trademark tag) 2,960,790.92 1,502,352.81 193,315.92goods in transit - - 3,422,902.41

Total 80,291,430.69 72,221,926.44 157,972,623.57Deduct Allowance for obsolete stock (1,055,946.88) (1,158,699.16) (919,086.78)

Inventories – net 79,235,483.81 71,063,227.28 157,053,536.79

During 2006 and 2007, the company has average inventory turnover period of 156 days and 184 days,respectively. The company implements various marketing plans to fit specific product lines or designs, such asproduct sales or special prices in special time period, etc. To anticipate higher sales in 2008 and many producerswent on long holidays, the company ordered more inventories.

TrademarkThe company records Baht 17.36 million for the company’s trademark. The company has accounting

policy for trademark by recording net cost from accumulated amortization, with amortization period over 10 yearsin straight - line method, starting from July 2007. As of 31 December 2007, the company recorded Baht 16.50million worth of trademark, decreasing by Baht 0.87 million from amortization.

LiquidityChanges in cashflow during each accounting period are as followed.During 2006, the company reported net profits of Baht 25.74 million, but the operating cash inflow was at

Baht 55.99 million, mainly due to increasing in depreciation expenses of Baht 18.94 million and inventory declineof Baht 8.07 million. For investing cashflow in 2006, the company buy building and equipment worth Baht 36.79million, which comprised of shop leasehold of Baht 19.68 million, decoratives and equipment of Baht 14.40million, and vehicles of Baht 0.59 million. The financial cash flow during 2006 was Baht 6.23 million of cashoutflow, mainly due to a Baht 22.30 million decline in overdraft and short-term loan from financial institutions, Baht2.39 million falling financial and operating lease, while long-term borrowing from related person and long-termloans from financial institution rose Baht 6 million and Baht 12.46 million, respectively.

During 2007, the company reported net profits of Baht 39.60 million, but the operating cash outflow wasat Baht 6.79 million, mainly due to increasing in depreciation expenses of Baht 23.66 million and inventoryincrease of Baht 85.75 million as the company keep more inventories to anticipate higher sales in 2008 due tomany producers went on long holidays. However, a Baht 33.64 million increases in account payable offset part ofthe cash outflow. For investing cashflow in 2007, the company bought building and equipment worth Baht 15.25million, which comprised mostly of shop decoratives, initial fees and trademark fee which was worth Baht 6.94million. The financial cash inflow during 2007 was Baht 81.23 million as the company sold 20 million shares togeneral public at Baht 4.70 a share, which make a total of Baht 94 million.

2006 and 2007 current ratios were at 1.08x and 2.04x, respectively. The liquidity improved in 2007 mainlydue to Baht 94 million of capital raising during 2007.

2006 and 2007 quick ratios were at 0.34x and 0.76x, respectively. The quick ratio improved in 2007mainly due to increases in the company’s current assets, such as cash, bank deposits and account receivable.


Annual Report 2007

2006 and 2007 cash cycles were at 131 days and 126 days, respectively. The cycle shortened due to(1) the company has average collection period of 70 days and 71 daysduring 2006 and 2007, respectively, whichis consistent with the company’s credit term of 60 days. The company has policy to collect debt according to thegiven credit term. The company never has any collection problem. (2) During 2006 and 2007, the company hasaverage inventory turnover period of 156 days and 184 days, respectively, which is consistent with the targetturnover period of 4-6 months. The company implements various marketing plans to fit specific product lines ordesigns, such as product sales or special prices in special time period, etc.

During 2007, the company has operating cash outflow of Baht 6.79 million, down from Baht 55.99 millionin 2006. The decline was due to Baht 86 million increases in inventory. Moreover, the company begin to repayloans from related person since January 2007 for Baht500,000 a month.

Sources of fundThe company’s shareholders’ equity as at the end of 2006 and 2007 were at Baht 86.51 million and Baht

215.79 million, respectively. The increases were partly due to continually profitable operation. Moreover, during23, 26 and 27 November 2007, the company increased paid-up capital from Baht 60 million to Baht 80 million byoffering 20 million new shares to public with par value of Baht 1 a share. The shares were sold at Baht 4.70 a share,with a total of Baht 94 million. The company registered an increase capital to the Ministry of Commerce on 30November 2007. The company’s funds are partly from profitable operation, and others from loans from directorsand financial institutions and capital increase during late 2007. Debt to equity ratio as at the end of 2006 and 2007were at 1.79x and 0.87x, respectively. Debt to equity ratio tended to decline.

The company has following obligations as at the end of 31 December 2007:(1) The company has long-term lease obligations to lease shops with leasehold terms of 3-29

years, which could be classified into 37 short-term leases and 4 long-term leases, with expiration date rangingfrom 2007 to 2024. Moreover, company has a 3-year lease obligation on a land and a building, starting from May2004 and March 2006, respectively, which belong to a related person. The term is extenable every 3 years withtotal lease no longer than 20 years. At the end of contract term in 2024, the company shall return right to warehouseto the lessor at the end of contract. The rental payment and minimum service fees are as follow:

(Unit: Million Baht)

2008 39.84 1.20 0.60 41.642009 24.64 1.35 0.68 26.67

Afterward 26.22 27.23 13.61 67.06(2) The company repay loans to director Mr. Noppadol Thammawattana with monthly installment of

Baht 0.50 million for 7 years, starting from 1 January 2007.(3) The company paid initial fees in quarterly installment as determined in the contract. The

payment started from April 2009 to January 2012. The additional royalty fee shall be paid base on the percentageof revenue as determined in the contract for any sales revenue starting from July 2007 onwards.

The source funding shall come from working capital and/or loan and/or capital raising, depending onmoney and capital market conditions.

Year Area of shop andservice area as agreed

with the outsider.

Land with building on thecontract made with the

related person.

Land (to build warehouse) ascontracted with the person with

potential conflict of interests.

Total


Annual Report 2007

LiabilitiesTotal liabilities as at the end of 2006 and 2007 were Baht 154.77 million and Baht 188.58 million, respectively.

Rising liabilities were used to finance rapid expansion and increased inventories. Liabilities were mainly comprisedof overdraft, short-term loans from financial institutions, account payable-other parties, long-term loan from relatedperson and other long-term loans with following details:

(1) Overdraft and short-term loans from financial institution as at the end of 2006 and 2007 were Baht14.19 million and Baht 8.18 million, respectively. The overdraft and short-term loans from local banks are guaranteedby directors and leasehold rights.

(2) Account payable-other parties as at the end of 2006 and 2007 were Baht 44.89 million and Baht 78.54million, respectively. The payable terms were 95 days and 129 days respectively.

(3) Long-term loans from related person (including current portion of long-term loans) as at the end of2006 and 2007 were Baht 41.50 million and Baht 35.50 million, respectively.

(4) Other long-term loans (including current portion of long-term loans) as at the end of 2006 and 2007were Baht 19.47 million and Baht 25.00 million, respectively.

During the past, the company has strictly complied with the loan conditions and pay principal andrepayments according to the repayment schedule.

Factors that may affect business operation or future financial status

The company operates finished clothing and related products retailing business under trademark “Body Glove.”The performance depends on clothing preference and life-style of the target market and their purchasing power.Therefore, the company must select the products to be consistent with the needs of prospective target group.The company must implement appropriate marketing strategies in term of product, pricing, penetrating distributionoutlets, and promotion. Moreover, the company must control cost of sales and selling-related expenses.The company must utilize technology to ensure efficient inventories control and distribution process.


Annual Report 2007

The Company’s risk factors are classified as follows:

1. Risk from Business Operation1.1 Risk from breach of contract on significant termsThe Master Licensing Agreement for the exclusive right in Body Glove Trademark entered by and

between the Company and IP Global Investments America, Inc, (“IPG’), the contract party, have setforth thesignificant terms as follows:

(1) The Company must pay a royalty fee which consisted of the initial fee and quarterly royalty fee basedon the confirmed sales. The company paid part of the initial fees. The company is confident that it could pay theremaining initial fees and monthly royalty fees from an operating cash flow, as sales continued to grow.

(2) Responsible for Brand Regional Marketing Contribution at the rate as agreed upon mutual determina-tion between the Company and IPG as stated in the Agreement. Presently, such contribution for the said BrandRegional Marketing had been waived for the Company.

(3) The expansion into authorized territories such as Vietnam, Burma, Laos, Cambodia and the Phillippines,any one country, within the first 3 years as of July 1st, 2007; in the event the Company cannot initiate businessoperation for the selling of Body Glove product in the said countries within the terms and conditions as setforth inthe Agreement, the Company may receive a written notification to terminate one or more countries from the authorized list.

However, in the event the Company is able to expand the business into the authorized territory within 6months as from the date the written notification from IPG was received, it is considered as the Company had fulfilits task according to the terms as setforth in the Agreement. Moreover, in the event the Company closed the salesor its operation or failed to submit the sales reports appertained to the newly business operated in the authorizedterritory for a period of 6 months consecutively; the Company must continue to operate the business in such countrywithin 6 months upon receipt of IPG’s written notification. If the Company failed to do so, the said country will beterminated from the authorized list.

1.2 Risk from Change of Target Group Customer Preference on Readywear ApparelThe Company operates a retail business of readywear apparel and accessories under the Body Glove

trademark where these readywear clothing and accessories are considered as fashionable items that tend tochange with popularity and demand subject to personal preference and individual lifestyle of the target groupcustomers. If the Company cannot produce the product to match the change of target group customer preferencepromptly, this may have an impact on Body Glove trademark due to disapproval of consumer which will have anegative effect on the sales volume as well as the Company’s operation and financial status of the company.

Nevertheless, the Company has been operating its business under the concept of Surf Fashion and EasyLifestyle for decade bywhich the Company has spent time on extensive research and study on the liftstylepattern of the target group customers and the changes of readywear consumer popularity. Such study has been


Annual Report 2007

done continually whereas the findings have played a major factor on the selection of product design and developmentto correspond with the fashion trend and the requirement of the target group customer at different time period. Thetarget group customers are divided into 2 major groups, for example, school and college students, both men andwomen, ages 12-25 years; and young working professional to adults, both men and women, ages 25 years andover. With this, the Company continues to change the products in terms of pattern, colors, design to be in line with thechange of consumer preference every 4-6 month period. Additionally, the Company ensures that its products are ofhigh quality fabric and material that provide comfort and easy care as it is the Company’s policy to deliver only thefinest quality goods with the best service to the consumer. As a result, the Company have earned its reputation andcontinued support from the target group customer to date.

1.3 Risk from Renewal Contract of Flagship StoreThe major income proportion from the Company’s sales of more than 70% of total sales revenues derived

from the sales through Flagship Stores. As these aforementioned stores are under lease agreement of 3 – 29 yearsterm with contract ending date from year 2007 – 2025 onward, the Company may risk a chance of non-renewallease agreement or risk from rental rate and service fee increase in proportion.

However, all lease agreements authorized the Company the full right option to extend the term of thelease at the expiration period of the agreement where such clause relating to the rental adjustment are clearlystated. Throughout the past years, the Company had strictly followed the terms and conditions as set in the saidagreements and never once an agreement were terminated by the lessor. In addition, the Flagship Stores locatedin the department stores help drawing the consumer’s attention to use the service from the department stores areoffering which in turn benefiting both the department store business and the Company. Therefore, we believe thatwe will receive a continued support in extending the lease agreement from the lessor in the future.

2. Risk from Procurement and Product AccessibilityRisk from Dependency on SuppliersThe Company’s main operation is retail business of readywear apparel and accessories under the Body

Glove trademark where the Company has no policy to manufacture its own clothing or accessories by oneself.However, it is the Company’s policy that all the clothings and accessories are purchased through the reputablesuppliers under the Company’s direction on product design pattern. Additionally, each supplier must get anapproval from IPG prior to the said arrangement. In the event the Company is unable to place product ordersthrough quality suppliers, this may result in the shortage of different products and may have an effect on the qualityof the Company’s products as a whole. If this happens, it will have negative impact on the Company’s reputationand Body Glove trademark as well as the sales volume.

However, the Company has a policy to order products from various reputable and worthy suppliers, bothdomestic and oversea. Furthermore, the Company has a policy to build up strong relationship and commitmentwith each supplier on a continual basis and have never faced any problem about the suppliers in the past years.


Annual Report 2007

3. Risk from Management Administration3.1 Risk in Control by Two Major Shareholder Groups with Total Shares Held Over 50%The Company has the Tumwattana family which consisted of Miss Dolnapa Tumwattana and Mr. Nopdol

Tumwattana, and Malaysian Investors which consisted of Mr. Goh Kok Cheng and Mr. Goh Kok Beng as two majorshareholder groups. If the shareholders of these two groups added up the vote at the Meeting, they can takecontrol over the resolution of the Shareholder’s Meeting in almost all area including the appointment of directorsor other decisions which require majority vote by shareholders with exception on the law or company’s regulationsthat require 3 out of 4 votes from the Shareholder’s Meeting. Hence, other shareholders may not be able to controlthe collective voting rights for inspection and control power balance with a majority shareholder.

Nevertheless, the two groups of shareholders can control power balance over the management admin-istration between them. In consideration of the Company’s operation structure which consisted of Board of Direc-tors and Audit Committee, it clearly specifies the structure of management administration providing qualifiedindividuals with scope of responsibilities and authorization levels of the Board of Directors and Audit Committeethat clearly identified and transparent. As for the procedure on any connected transactions with the Board ofDirectors, major shareholders, the control power authority or any party which may be potentially causing theconflicts of interest, such individual will not be allow to authorize the respective transactions. It will be reported tothe Audit Committee for control power balance to ensure transparency and confident of the shareholders whilstcontrolling power balance of the Company’s management administration.

3.2 Risk from Dependency on the Executives(a) Dependency on Loan from the Executive

The Company received a loan from Mr. Nopdol Tumwattana who takes a position of the authorizedsignatory of the Company and postions of the Chairman and Executive Chairman, and also as a major share-holder. If the Company did not receive such loan, the result may have an impact of the Company’s cash flows.

The aforementioned loan is a personal loan without guarantee in which the Company had entered a loanagreement with principle repayment of Baht 0.50 million per month for 7 years as from January 1st, 2007, and fixedinterest charge at MOR rate provided by Kasikorn Bank PLC plus 0.25% per annum. The interest for such loan ispayable every 3 month in which the Company has been able to pay the principle repayment and interest chargesas setforth in the loan agreement in the past. As at 31st December 2007 , The company has an outstandingpersonal loan Baht 35.50 Million.

As for the policy for the source of investment funds in the future, the Company has no policy to raiseadditional loans from the Executives. The Company’s policy for the source of investment funds is from workingcapital of the operation and/or to borrow the funds from financial institutions and/or through share capital byconsidering the appropriate proceeding for business operation and money market and capital market situations.

(b) Dependency on Hire of Land, Building and Condominium from the ExecutiveThe Company hired a piece of land and partial building from Mr. Nopdol Tumwattana, a total area of

2,266 square meters with partial building on the land, i.e., a 2-storey office building for use mainly as a Head Officeof the Company that is situated in a close proximity with Mr. Nopdol Tumwattana’s residence. However, the said


Annual Report 2007

piece of land and building was clearly separated and could be used as office building, with easy access tomain public road. The land and building have been registered with the Department of Land under the lease rightfor the period of no longer than April 30th, 2024 at the rental rate that is lower than the rental rate for hire the landwith building from surrounding area. The necessity and reasonableness of this transaction was due to therequirement of having a Head Office situated within a close proximity to the warehouse building to convenientlycoordinating activities relating to product delivery to the stores as well as to perform physical inventory checkrespectively.

The Company hired a piece of land from Mr. Nopdol Tumwattana, a total area of 954 square meters, tobuild a warehouse building in which the said land is situated in a close proximity with Mr. Nopdol Tumwattana’sresidence. However, the land used to construct the warehouse building was clearly separated with easy accessto main public road. The said land has been registered with the Department of Land under the lease right for theperiod ending April 30th, 2024. At the expiration of the lease right for the land, the Company agreed to waive theright of ownership of the warehouse building to the land owner, Mr. Nopdol Tumwattana. Although the rentalrate for the said land is higher than the rental rate for the land in surrounding area, the lessee of the surroundingarea land must pay advance rental on the date the lease right is signed. In the case of hiring the land from Mr.Nopdol Tumwattana, the Company did not have to pay any advance rental. The necessity and reasonableness ofthis transaction was due to the requirement of having a Head Office situated within a close proximity to thewarehouse building to conveniently coordinating activities relating to product delivery to the stores as well as toperform physical inventory check respectively.

The Company leased a condominium suite of President Park View Tower from Mr. Nopdol Tumwattana,a total area of 260.54 square meters including furniture and fixture with the objective of providing a resident for theExecutive who is not a residence of Thailand. The lease agreement is for one year as from January 1st, 2007 toDecember 31st, 2007. Upon the expiration of the lease term, Mr. Nopdol Tumwattana agreed to extend the leaseterm for additional 2 periods of one year each. The rental rate is lower than the market rate when compared to therental of the suite at surrounding area. The necessity and reasonableness of this transaction was due to theobjective of providing accommodation facilities and welfare benefit to the Executive who is not a residence ofThailand.

Therefore, the Company has a risk in dependency on the Executive, Mr. Nopdol Tumwattana, with respectto the hiring of land, building and the condominium. However, the concerned Executive was willing to allow theCompany to hire the land, building (the Company has already registered the lease hold from Department of Land)and the condominium according to the conditions as setforth in the agreements.

(c) Dependency on the Executives for Loan Collateral of the CompanyAs at December 31st, 2007, Major Shareholders and/or the Company’s Executives who has put up collat-

eral for the Company’s loan are as follows: (1) Mr. Nopdol Tumwattana and Mr. Goh Kok Cheng, put up jointcollateral for company loan with a financial institution for a total credit of Baht 29.64 million; (2) Mr. NopdolTumwattana, Mr. Goh Kok Cheng and Mrs. Mallikar Leeraphan, put up joint collateral for company loan with afinancial institution for a total credit of Baht 45 million; and (3) Mr. Nopdol Tumwattana and Mrs. Mallikar Leeraphan,put up a joint collateral for company’s bank overdraft with a financial institution for a total credit of Baht 6 million.

Therefore, the Company has a risk in the event the aforementioned Executives withdrawn the collateralwhich may result in the denial of the loan and may have an impact on the financial liquidity of the Company.However, the aforementioned Company’s Executives are willing to put up the collateral for the Company’s loanwithout any fee.


Annual Report 2007

1.C

onnection T

ransactions

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Annual Report 2007

AM

OU

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.


Annual Report 2007

AM

OU

NT (M

illio

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aht)

PAR

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2007

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q.m

./m

on

th


Annual Report 2007

AM

OU

NT (M

illio

n B

aht)

PAR

TY W

ITH

PO

TEN

TIA

L

CO

NFLIC

T

RELATIO

NSH

IP

CO

NN

EC

TIO

N T

RAN

SAC

TIO

NS

31 D

EC

2006

31 D

EC

2007

CO

MM

EN

TS O

F A

UD

IT C

OM

MIT

TEE

1.

(Co

ntd

.)

2

. L

oa

ns T

ran

sa

ctio

ns

O

n A

pril 1

st ,

20

06

, M

r. N

op

do

l

Tu

mw

att

an

a p

rovi

de

d a

lon

g-t

erm

loa

n f

or

the

Co

mp

an

y in

th

e a

mo

un

t o

f B

ah

t

41

,50

0,0

00

with

inte

rest

ra

te M

OR

(re

fer

to

Ka

siko

rnb

an

k P

LC

) +

0.2

5%

pe

r a

nn

un

,

sub

jec

t to

loa

n p

aym

en

t o

f B

ah

t 5

00

,00

0 o

n

a m

on

thly

ba

sis,

with

th

e f

irst

pa

yme

nt

as

fro

m J

an

ua

ry 1

st,

20

07

an

d in

tere

st p

aya

ble

eve

ry 3

mo

nth

. T

he

Co

mp

an

y m

ust

pa

yba

ck

the

loa

n a

nd

inte

rest

in f

ull

with

in t

he

pe

rio

d

of

7 y

ea

rs a

s fr

om

th

e f

irst

inst

allm

en

t

pa

yme

nt.

-

Be

gin

nin

g b

ala

nc

e

-

(P

aid

)

-

En

din

g b

ala

nc

e

A

cc

rue

d I

nte

rest

-

Be

gin

nin

g b

ala

nc

e

-

(Pa

id)

-

En

din

g b

ala

nc

e

Inte

rest

pa

id

41

.50

-

41

.50

- - -

3.3

1

41

.50

( 6

.00

)

35

.50

- - -

2.9

4

2.

Th

ese

tra

nsa

ctio

ns b

en

efit

the

op

era

tio

n o

f th

e C

om

pa

ny,

an

d

ste

ng

the

n t

he

Co

mp

an

y’s

liq

uid

ity in

the

op

era

tio

n.

M

ore

ove

r, t

he

se

tra

nsa

ctio

ns a

re

with

ou

t c

olla

tera

l, a

nd

ca

rry t

he

ma

rke

t in

tere

st

rate

MO

R +

0.2

5%

pe

r

an

nu

m.


Annual Report 2007

AM

OU

NT (M

illio

n B

aht)

PAR

TY W

ITH

PO

TEN

TIA

L

CO

NFLIC

T

RELATIO

NSH

IP

CO

NN

EC

TIO

N T

RAN

SAC

TIO

NS

31 D

EC

2006

31 D

EC

2007

CO

MM

EN

TS O

F A

UD

IT C

OM

MIT

TEE

1. (C

on

td.)

3.

Gu

ara

nte

e T

ran

sa

ctio

ns

3.1

M

r. N

op

do

l T

um

wa

tta

na

an

d M

r. G

oh

Ko

k C

he

ng

, D

ickso

n jo

intly p

ut

up

a

gu

ara

nte

e lo

an

with

a c

red

it o

f B

ah

t

14

,63

8,7

00

with

Th

an

ac

ha

rt B

an

k

Pu

blic

Co

mp

an

y L

imite

d d

ate

d A

ug

ust

22

nd,

20

06

3.2

M

r. N

op

do

l T

um

wa

tta

na

, M

r. G

oh

Ko

k

Ch

en

g,

Dic

kso

n a

nd

Mrs

. M

alli

ka

r

Le

era

ph

an

d jo

intly p

ut

up

a g

ua

ran

tee

loa

n w

ith

a c

red

it o

f B

ah

t 4

5 m

illio

n

with

Sia

m C

om

me

rcia

l B

an

k P

ub

lic

Co

mp

an

y L

imite

d d

ate

d O

cto

be

r 2

8th ,

20

04

3.3

Mr.

No

pd

ol T

um

wa

tta

na

an

d M

rs.

Ma

llika

r L

ee

rap

ha

nd

jo

intly p

ut

up

a

gu

ara

nte

e lo

an

with

a c

red

it o

f B

ah

t 6

mill

ion

with

Th

an

ac

ha

rt B

an

k P

ub

lic

Co

mp

an

y L

imite

d d

ate

d J

un

e 2

3rd

,

20

04

3.4

Mr.

No

pd

ol T

um

wa

tta

na

an

d M

r. G

oh

Ko

k C

he

ng

, D

ickso

n jo

intly p

ut

up

a

gu

ara

nte

e lo

an

with

a c

red

it o

f B

ah

t 1

0

mill

ion

with

Th

an

ac

ha

rt B

an

k P

ub

lic

Co

mp

an

y L

imite

d d

ate

d S

ep

tem

be

r

19

th,

20

07

3.5

Mr.

No

pd

ol T

um

wa

tta

na

an

d M

r. G

oh

Ko

k C

he

ng

, D

ickso

n jo

intly p

ut

up

a

gu

ara

nte

e lo

an

with

a c

red

it o

f B

ah

t 5

mill

ion

with

Th

an

ac

ha

rt B

an

k P

ub

lic

Co

mp

an

y L

imite

d d

ate

d S

ep

tem

be

r

19

th,

20

07

14

.64

45

.00

6.0

0

- -

14

.64

45

.00

6.0

0

10

.00

5.0

0

3.

Th

ese

gu

ara

nte

e t

ran

sa

ctio

ns b

en

efit

the

op

era

tio

n o

f th

e C

om

pa

ny.

Mo

reo

ve

r, it

is c

om

ply

to

th

e

co

nd

itio

ns o

f th

e f

ina

nc

ial in

stitu

tio

ns

req

uir

ing

th

e B

oa

rd o

f D

ire

cto

rs t

o

pu

t u

p c

olla

tera

l fo

r th

ese

tra

nsa

ctio

ns.


Annual Report 2007

AM

OU

NT (M

illio

n B

aht)

PAR

TY W

ITH

PO

TEN

TIA

L

CO

NFLIC

T

RELATIO

NSH

IP

CO

NN

EC

TIO

N T

RAN

SAC

TIO

NS

31 D

EC

2006

31 D

EC

2007

CO

MM

EN

TS O

F A

UD

IT C

OM

MIT

TEE

2. T

SI

Inte

rna

tio

na

l

Co

., L

td.

TS

I In

tern

atio

na

l C

o.,

Ltd

., a

nd

th

e C

om

pa

ny

ha

ve

1 C

o-D

ire

cto

r, M

r.

No

pd

ol T

um

wa

tta

na

Pre

se

ntly,

Mr.

No

pd

ol

Tu

mw

att

an

a h

old

s 3

2%

sh

are

s o

f T

SI

Inte

rna

tio

na

l C

o.,

Ltd

.,

as a

t D

ec

em

be

r 3

1st ,

20

07

.

Th

e C

om

pa

ny p

urc

ha

se

d r

ea

dyw

ea

r

ap

pa

rel fr

om

TS

I In

tern

atio

na

l C

o.,

Ltd

.

(Su

pp

lier)

-

rea

dyw

ea

r p

rod

uc

ts p

urc

ha

se

d

-

Ac

co

un

ts P

aya

ble

0.6

1 -

- -

Th

ese

tra

nsa

ctio

ns a

re in

th

e n

orm

al

co

urs

e o

f b

usin

ess a

nd

ca

rry a

fa

ir

pri

ce

wh

en

co

mp

are

d t

o o

the

r

su

pp

liers


Annual Report 2007

AM

OU

NT (M

illio

n B

aht)

PAR

TY W

ITH

PO

TEN

TIA

L C

ON

FLIC

T

RELATIO

NSH

IP

CO

NN

EC

TIO

N T

RAN

SAC

TIO

NS

31 D

EC

2006

31 D

EC

2007

CO

MM

EN

TS O

F A

UD

IT C

OM

MIT

TEE

3. N

eo

Sta

tic

Lim

ite

d

Mr.

Go

h K

ok C

he

ng

, D

ickso

n

form

erl

y h

eld

50

% o

f N

eo

Sta

tic

Lim

ite

d s

ha

res a

nd

late

r so

ld a

ll sh

are

s t

o o

uts

ide

ind

ivid

ua

ls o

n A

ug

ust

1st ,

20

06

Mr.

Go

h K

ok C

he

ng

, D

ickso

n

wa

s a

form

er

Dir

ec

tor

of

Ne

o S

tatic

Lim

ite

d

an

d la

ter

resig

ne

d f

rom

th

e p

ost

on

Ap

ril 1

3th,

20

07

.

Mr.

Go

h K

ok C

he

ng

, D

ickso

n

is

a D

ire

cto

r a

nd

Ch

ief

Exe

cu

tive

Off

ice

r o

f th

e C

om

pa

ny a

nd

ho

lds

18

.31

25

% o

f sh

are

s a

s a

t D

ec

em

be

r

31

st ,

20

07

.

no

t c

on

sid

ere

d a

s p

art

y w

ith

po

ten

tia

l c

on

flic

t e

ffe

cte

d f

rom

da

te

as m

en

tio

ne

d a

bo

ve

.

In t

he

pa

st,

th

e C

om

pa

ny p

aid

co

pyri

gh

t

fee

fo

r B

od

y G

love

Tra

de

ma

rk t

o N

eo

Sta

tic

Lim

ite

d a

s s

tip

ula

ted

by I

P G

lob

al

Inve

stm

en

ts A

me

ric

a,

INC

. w

he

re t

he

re

are

no

sig

ne

d a

gre

em

en

t in

vo

lve

d.

On

Ma

y 3

rd,

20

07

, th

e C

om

pa

ny e

nte

red

the

Op

era

tin

g,

Lic

en

se

an

d S

ub

-Lic

en

se

Rig

hts

Ag

ree

me

nt

with

IP

Glo

ba

l

Inve

stm

en

ts A

me

ric

a,

INC

. fo

r th

e L

on

g-

Te

rm E

xc

lusiv

e C

op

yri

gh

t o

f B

od

y G

love

Tra

de

ma

rk.

- C

op

yri

gh

t F

ee

- A

cc

rue

d C

op

yri

gh

t F

ee

1.7

7

0.5

0

0.5

0 -

Th

ese

tra

nsa

ctio

ns a

re c

om

pri

se

d o

f c

op

yri

gh

t

fee

fo

r B

od

y G

love

Tra

de

ma

rk a

cc

ord

ing

to

th

e

co

nd

itio

ns s

et

by I

P G

lob

al In

ve

stm

en

ts

Am

eri

ca

, IN

C.

wh

ere

th

ere

are

no

sig

ne

d

ag

ree

me

nt

invo

lve

d.

Th

e R

oya

lty f

ee

pa

ya

ble

to

IP

Glo

ba

l

Inve

stm

en

ts A

me

ric

a,

INC

. w

hic

h is in

ra

tio

th

at

co

mp

lian

ce

to

th

e s

ale

s r

eve

nu

e w

ith

ap

pro

pri

ate

d p

ric

e.

Ho

we

ve

r, f

ollo

win

g t

he

ag

ree

me

nt

sig

ne

d in

th

e

Ma

ste

r L

ice

nse

Ag

ree

me

nt

eff

ec

tive

as o

f Ju

ly

1st ,

20

07

.

So

Ne

o S

tatic

Lim

ite

d

is


Annual Report 2007

AM

OU

NT (M

illio

n B

aht)

PAR

TY W

ITH

PO

TEN

TIA

L C

ON

FLIC

T

RELATIO

NSH

IP

CO

NN

EC

TIO

N T

RAN

SAC

TIO

NS

31 D

EC

2006

31 D

EC

2007

CO

MM

EN

TS O

F A

UD

IT C

OM

MIT

TEE

4. M

r. G

oh

Ko

k C

he

ng

,

Dic

kso

n

Mr.

Go

h K

ok C

he

ng

, D

ickso

n is a

Dir

ec

tor

an

d C

hie

f E

xe

cu

tive

Off

ice

r

of

the

Co

mp

an

y a

nd

ho

lds 1

8.3

12

5%

of

sh

are

s a

s a

t D

ec

em

be

r 3

1st ,

20

07

.

Gu

ara

nte

e T

ran

sa

ctio

ns

1.1

Mr.

Go

h K

ok C

he

ng

, D

ickso

n a

nd

Mr.

No

pd

ol T

um

wa

tta

na

jo

intly p

ut

up

a

gu

ara

nte

e lo

an

with

a c

red

it o

f B

ah

t

14

,63

8,7

00

with

Th

an

ac

ha

rt B

an

k

Pu

blic

Co

mp

an

y L

imite

d d

ate

d A

ug

ust

22

nd,

20

06

.

1.2

M

r. G

oh

Ko

k C

he

ng

, D

ickso

n M

r.

No

pd

ol T

um

wa

tta

na

an

d M

rs.

Ma

llika

r

join

tly p

ut

up

a g

ua

ran

tee

lo

an

with

a

cre

dit o

f B

ah

t 4

5 m

illio

n w

ith

Sia

m

Co

mm

erc

ial B

an

k P

ub

lic C

om

pa

ny

Lim

ite

d d

ate

d O

cto

be

r 2

8th,

20

04

.

1.3

Mr.

Go

h K

ok C

he

ng

, D

ickso

n a

nd

Mr.

No

pd

ol T

um

wa

tta

na

jo

intly p

ut

up

a g

ua

ran

tee

lo

an

with

a c

red

it o

f B

ah

t

10

mill

ion

with

Th

an

ac

ha

rt B

an

k P

ub

lic

Co

mp

an

y L

imite

d d

ate

d S

ep

tem

be

r

19

th,

20

07

1.4

Mr.

Go

h K

ok C

he

ng

, D

ickso

n a

nd

Mr.

No

pd

ol T

um

wa

tta

na

jo

intly p

ut

up

a g

ua

ran

tee

lo

an

with

a c

red

it o

f B

ah

t

5 m

illio

n w

ith

Th

an

ac

ha

rt B

an

k P

ub

lic

Co

mp

an

y L

imite

d d

ate

d S

ep

tem

be

r

19

th,

20

07

14

.64

45

.00

-

-

14

.64

45

.00

10

.00

5.0

0

Th

ese

gu

ara

nte

e t

ran

sa

ctio

ns b

en

efit

the

op

era

tio

n o

f th

e C

om

pa

ny.

Mo

reo

ve

r, it

is

co

mp

ly t

o t

he

co

nd

itio

ns o

f th

e f

ina

nc

ial

institu

tio

ns r

eq

uir

ing

th

e B

oa

rd o

f D

ire

cto

rs t

o

pu

t u

p c

olla

tera

l fo

r th

ese

tra

nsa

ctio

ns.


Annual Report 2007

AM

OU

NT (M

illio

n B

aht)

PAR

TY W

ITH

PO

TEN

TIA

L C

ON

FLIC

T

RELATIO

NSH

IP

CO

NN

EC

TIO

N T

RAN

SAC

TIO

NS

31 D

EC

2006

31 D

EC

2007

CO

MM

EN

TS O

F A

UD

IT C

OM

MIT

TEE

5. M

rs.

Ma

llika

r

Le

era

ph

an

d

Mrs

. M

alli

ka

r L

ee

rap

ha

nd

is a

Dir

ec

tor

of

the

Co

mp

an

y

Gu

ara

nte

e T

ran

sa

ctio

ns

1.1

Mrs

. M

alli

ka

r p

ut

up

a g

ua

ran

tee

lo

an

with

a c

red

it o

f B

ah

t 1

2 m

illio

m w

ith

Ka

sik

orn

ba

nk P

CL

da

ted

Au

gu

st

25

th,

20

00

.

1.2

M

rs.

Ma

llika

r L

ee

rap

ha

nd

pu

t u

p a

gu

ara

nte

e p

rom

isso

ry n

ote

with

a

cre

dit o

f B

ah

t 3

.5 m

illio

n w

ith

Ka

sik

orn

ba

nk P

CL

da

ted

Au

gu

st

25

th,

20

00

.

1.3

Mrs

. M

alli

ka

r L

ee

rap

ha

nd

, M

r. G

oh

Ko

k

Ch

en

g,

Dic

kso

n a

nd

Mr.

No

pd

ol

Tu

mw

att

an

jo

intly p

ut

up

a g

ua

ran

tee

loa

n w

ith

a c

red

it o

f B

ah

t 4

5 m

illio

n

with

Sia

m C

om

me

rcia

l B

an

k P

ub

lic

Co

mp

an

y L

imite

d d

ate

d O

cto

be

r 2

8th,

20

04

.

1.4

Mrs

. M

alli

ka

r L

ee

rap

ha

nd

an

d M

r.

No

pd

ol T

um

wa

tta

na

jo

intly p

ut

up

a

gu

ara

nte

e lo

an

with

a c

red

it o

f B

ah

t 6

mill

ion

with

Sia

m C

om

me

rcia

l P

ub

lic

Co

mp

an

y L

imite

d d

ate

d J

un

e 2

3rd,

20

03

.

12

.00

3.5

0

45

.00

6.0

0

12

.00

3.5

0

45

.00

6.0

0

Th

ese

gu

ara

nte

e t

ran

sa

ctio

ns b

en

efit

the

op

era

tio

n o

f th

e C

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Annual Report 2007

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Annual Report 2007

2. Necessity and Reasonableness of TransactionsThe Connection Transactions are based on the necessity and reasonableness of the ordinary course of

business for the best interests of the Company operation and carry a fair price.3. Procedures for the Approval of Connection TransactionsIn the case of Connection Transactions, such consideration must be approved by the Board of Directors

and the Shareholder’s Meeting, whichever case may be. The Board of Directors or the authorized persons from theBoard of Directors are not allowed to participate in the decision on any transaction that a stake-holder or partywith potential conflict having common interests or may have conflict of interest in any way with the Company or itssubsidiaries. Moreover, the Company must comply with all legal orders concerning securities and the StockExchange. In the event the Company has registered securities in the Stock Exchange of Thailand, the Company shallcomply with all regulations, announcements, orders or procedures of the Stock Exchange of Thailand in additionto the procedures on disclosure of information on the Connection Transactions and the acquisition or disposal ofassets.

4. Policy on Connection Transactions in the FutureThe Company has a policy that the future connection transactions may occur under the Board of Directors’

s consideration based on the necessity and reasonableness of the ordinary course of business and have pricescomparable to prevailing market rates for the best interests of the Company. However, the Company may allow theAudit Committee or the Company’s Auditor or Independent Advisor to review and comment on the prices and thereasonableness of any future transaction. Whereas the Company shall comply with all legal and regulatoryorders as stipulated by related departments on Connection Transactions, i.e., the Securities and ExchangeCommission, the Stock Exchange of Thailand


Annual Report 2007

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Annual Report 2007

As at December 31st, 2007, the management structure of the Company comprised two sets of Commit-tees, namely, the Board of Directors and the Audit Committee as follows:

(a) The Board of Directors was comprised of 8 directors as follows:1. Mr. Nopdol Tumwattana Chairman of the Board2. Mrs. Mallikar Leeraphan Director3. Asst. Prof. Dr. Nantarika Chansue Director4. Mr. Goh Kok Cheng ,Dickson Director5. Mr. Goh Kok Beng Director6. Pol.Gen. Sereepisuth Taemeeyaves Director / Independent Director

and Chairman of Audit Committee7. Professor Emeritus Dr. Surapone Virulrak Director / Independent Director

and Audit Committee Member8. Mrs. Artivon Bunnag Director / Independent Director

and Audit Committee Memberwith Miss Waristha Thapanasakulvong as Secretary to the Board of DirectorsAuthorized Persons

The names and number of authorized persons to sign on behalf of the Company are Mr. NopdolTumwattana or Mrs. Mallikar Leeraphand or Asst. Prof. Dr. Nantarika Chansue, either one director, to co-sign withMr. Goh Kok Cheng, Dickson or Mr. Goh Kok Beng, either one director, total two persons and accompanied witha stamp of the Company’s Seal.

Scope of Duties and Responsibility of Board of DirectorsThe Board of Directors shall perform their duties and responsibility to carry out the Company’s business

in compliance with the laws, the objectives, the Articles of Association of the Company, and the resolutions ofShareholder’s Meetings in good faith, with due diligence and care in the best interests of the Company. Theimportance scopes of responsibilities are as follows:

(1) Conduct an Annual Shareholders Meeting within 4 months as from the last day of the Company’s fiscal year period.(2) Conduct a Board of Directors meeting at least once every three month.(3) Responsible and verify the Company’s financial statements with the Auditor at the end of fiscal year

period and propose to the Shareholders Meeting for consideration and approval.(4) The Board of Directors may appoint one or more directors or other person to carry out any act on behalf

of the Board and under the monitoring of the Board, or may appoint such person an authority in a specified period,which the Board deep appropriate. The Board of Directors may abrogate, revoke change or adjust the appointedauthority as deem appropriate.

With respect to the foregoing approval, a person or persons delegated shall not be able to approve anytransaction in which he or any person may have conflict of interest or beneficiary’s conflict with the Company or itssubsidiaries (if any), unless such approval is executed on general commercial terms in accordance with thepolicy and criteria approved by the Board of Directors except.

(5) Define vision, mission, strategy, operating plan as well as budgetary plan of the Company includingcontrol and monitor administrative functions, and the Board of Directors operation in accordance to the Company’s policy, with exception of the following which require consent from the Shareholders Meeting: capital increase;capital splitting; sales or transfer the Company operation, either whole or partial to other person; acquisition ortransfer other company operation for the Company; or amend the Articles of Association or regulation, etc.

In addition, the Board of Directors should control and monitor the Company’s operation to be in compli-ance with the law regarding the Securities and Stock Exchange policy and regulation such as making a transactionwith respect to connected transactions or buying and selling significant assets in accordance to the SET policyand relating business transaction law.

(6) Review the administrative structure, appointment of Chief Executive Officer and other CommitteeMember as may deem appropriate.


Annual Report 2007

(7) Monitor the operation performance to assure that it is in accordance to the plan and budgetarycontinuously.

(8) The director shall not perform or involve in any similar business and/or compete with the Company;become a partner in an ordinary partnership with unlimited liability; or assume a director position in a privateentrepreneur or other company with similar business and/or compete with the Company either for personal interest orothers, except to acquire a consent from the Shareholders Meeting prior to the appointment.

(9) The director must inform the Company without hesitation if there is any direct or indirect interestinvolving any contract conducted by the Company; or holds shares or bonds of the Company or its subsidiaries atan increasing or decreasing number.

(b) Authorization from the Board of DirectorsAt the Board of Directors Meeting No. 1/2007 held on February 23rd, 2007, with the presence of Independent

Directors and Audit Committee; the Board had passed a resolution regarding scope of duties and responsibilitiyof the Executive Chairman and Chief Executive Officer as well as administrative authority for ordinary operation.The important responsibility and authority are summarized as follows:

Scope of Duties and Responsibility of Executive Chairman(1) Monitor and follow-up on the Company’s operating results with the management.(2) Review annual budgetary plan as submitted by the management prior to submission to the Board of

Directors for review and approval.(3) Monitor and follow-up on the Company’s operation as assigned by the Board of Directors.(4) Authorize to appoint, transfer, revoke or terminate the employment of the Executive level staff.(5) Approve and/or delegate authorities to approve acquisition of fixed assets other than ordinary business

transaction within the credit limit of Baht 5 million per tranction.(6) Approve and/or delegate authorities to approve other ordinary transactions within the credit limit of

Baht 10 million per transaction for the benefit of business liquidity.(7) Approve and/or delegate authorities to approve other ordinary transaction in business operation

within the credit limit of Baht 100,000 per transaction.(8) Perform duties in good faith and utmost care for the benefits of the Company.The authority of Executive Chairman excludes an approval in any transaction, personal or person which

may perceive as potentially causing conflict of interest or benefit with the Company or its subsidiary (if any) unlesssuch approvals are deemed as ordinary course of business in accordance to the Company’s policy and criteriaas have been approved by the Board of Directors.

Scope of Duties and Responsibility of Chief Executive Officer(1) Execute and carry out ordinary coursee of business relating to the general operation of the Company.(2) Perform duties as assigned by the Board of Directors or the Executive Chairman.(3) Authorize to appoint, transfer, revoke, terminate, set and increase salary, allocate reward, compensation

and bonus to all employee of the Company below management level, including appoint a representative of theemployer as Provident Fund Committee of the Company.

(4) Approve and/or delegate authorities to approve acquisition of fixed assets other than ordinary busi-ness transaction within the credit limit of Baht 5 million per tranction.

(5) Approve and/or delegate authories to approve other ordinary transactions within the credit limit of Baht10 million per transaction for the benefit of business liquidity.

(6) Approve and/or delegate authorities to approve other ordinary transaction in business operationwithin the credit limit of Baht 100,000 per transaction.

(7) Authorize to issue instructions, regulations, announcement, and memos to ensure the business op-erations are in compliance with the Company’s policy and its best interest, with exception of matters regardingemployee benefits.

(8) Authorize to act and represent the Company on related business activities that are of best interest to the Company.


Annual Report 2007

(9) Perform other duties as assigned by the Board of Directors from time to time.(10) Perform duties in good faith and utmost care for the benefits of the Company.However, the authority of Chief Executive Officer exclude an approval in any transaction, personal or

person which may perceive as potentially causing conflict of interest or benefit with the Company or its subsidiary(if any) unless such approvals are deemed as ordinary course of business in accordance to the Company’s policyand criteria as have been approved by the Board of Directors

(c) The Audit Committee was comprised of 3 members as follows:1. Pol.Gen. Sereepisuth Taemeeyaves Chairman of Audit Committee2. Professor Emeritus Dr. Surapone Virulrak Audit Committee Member3. Mrs. Artivon Bunnag Audit Committee Member

With Miss Chirapha Chansuta as the Secretary of Audit Committee.Term of Officer for Audit CommitteeChairman of Audit Committee and Audit Committee members 2 yeats

At the end of the term, Chairman of Audit Committ and Audit Committee members whose term is expiredcould be re-appointed as Audit Committee for the next term.

Scope of Duties and Responsibility of Audit Committee(1) Review the accuracy of the Company’s financial reports and disclosure of information to ensure it is

appropriate and effective with the Company’s Auditor and concerned Executive who is responsible for prepara-tion of a quaterly and annually financial reports. The Audit Committee may suggest the Auditor to review or auditany transaction as may deem necessary and significant during the annual closing of the Company.

(2) Review the Internal Control and Internal Audit systems joinly with the Company’s Auditor and InternalAuditor to ensure these are appropriate and effective.

(3) Review and ensure that the Company performs in accordance with the laws governing Securities andExchange, the regulations of the Stock Exchange of Thailand, and other laws applicable to the Company’s business.

(4) Consider, select, propose the appointment and remuneration of the Company’s Auditor in which variouscriteria should be considered such as credibility, efficiency of resources, quantity of audit tasks applicable to suchAudit Firm as well as knowledge and business-related experience the candidate being appointed to conductthe audit tasks of the Company must have.

(5) Consider the disclosure of the Company data in case there is any related transaction or items that maylead to possible conflicts of interest to ensure it is appropriate and effective.

(6) Perform other duties as assigned by the Board of Directors and the Audit Committee’s consent, i.e.,review financial policy and risk management, review the management operation is under business code of ethics,review important transaction with Executive Directors which have to disclose to public according to the law suchas Annual Report and Administrative Analysis, etc.

(7) Prepare an annual disclosure report on the corporate governance of the Audit Committee to beincluded in the Annual Report, addixing the signature of the Chaiman of Audit Committee.

(8) Report the performance of the Audit Committee to the Board of Directors at least once every quarter.(9) Consider and comment the performance appraisal, appointment, termination and remuneration of

the Internal Auditor.

(d) The Independent Directors Committee was comprised of 3 members as follows:1. Pol.Gen. Sereepisuth Taemeeyaves Independent Director2 Professor Emeritus Dr. Surapone Virulrak Independent Director3. Mrs. Artivon Bunnag Independent Director


Annual Report 2007

(e) The Executives Members were consisted of 6 persons as follows:1. Mr. Nopdol Tumwattana Executive Chairman2. Mr. Goh Kok Cheng, Dickson Chief Executive Officer

and Sales & Marketing Director3. Miss Dolnapa Tumwattana Operations Director4. Miss Waristha Thapanasakulvong Chief Finance Officer5. Mr. Chai Ratanamahavong Senior Finance Manager6. Miss Methira Thongsuwan Senior Account Manager

2. Selection of Directors and Executives(a) Selection of Directors

The Company has not appointed a Nomination Committee. In the selection of candidates, the directorsshall be elected in accordance with the following rules and procedures:

(1) The Board of Directors shall consist of at least five members being elected at the meeting of share-holders based on majority votes in accordance with the following criteria and methods:

(1.1) each shareholder shall have a number of votes equal to the number of shares held;(1.2) each shareholder may exercise all the votes he or she has under (1.1) to elect one or several persons

as director or directors, but may not allot his or votes to any person.(1.3) after the vote, the candidates shall be ranked in order descending from the highest number of votes

received to the lowest, and shall be appointed as directors in that order, until all of the director positions are filled.Where there is an equality of votes cast for candidates in descending order causing the number of directors to beexceeded, the Chairman of the meeting shall cast one extra vote.

(2) At every annual ordinary meeting of shareholders, one-third of the directors shall vacate in proportionwhere the Committee members who were in the post for the longest period shall be retired. If the number ofdirectors is not a multiple of three, the number of directors closest to one-third shall vacate.

(b) Selection of Independent Directors and Audit CommitteeThe Independent Directors and Audit Committee shall be elected in accordance with the following criteria:(1) holding no more than 5% of the Company’s paid up capital, or that of an affiliated company, a related

company or an associate company, including the shares holding by related persons.(2) not involve in the day to day management of the Company, an affiliated company, a related company,

an associate company; and not an employee, staff or an advisor receiving a regular salary from the company, anaffiliated company, a related company, an associate company, or major shareholders of the Company.

(3) no benefit or conflict of interest whether direct or indirect in terms of financial and administrativeoperation of the Company, an affiliated company, a related company, an associate company, or major shareholdersof the Company; and have no benefit or conflict of interest with reference to the aforementioned during anaccounting year prior to the appointment as Independent Directors or Audit Committee unless approved by theBoard of Directors after careful consideration that such benefit or conflict of interest shall have no influence to theperformance and ability to give opinion in an independent manner.

(4) no relationship or being related to the Executives or major shareholders of the Company.(5) not be appointed as a representative or to safeguard the interests of the Company’s directors, major

shareholders or shareholders who are related to the Company’s major shareholders.(6) must be capable of his or her performing duties, giving his or her opinions or reporting the results of work

performance according to the duties delegated by the Board, free and clear of the control of management ormajor shareholders of the Company including related persons or close relatives of the said persons

(c) Number of directors who are major shareholdersNumber of directos who are major shareholders are consisted to 5 directors as follows:Directors who are major shareholders from the Tumwattana group are Mr. Nopdol Tumwattana, Mrs.

Mallikar Leeraphan and Asst. Prof. Dr. Nantarika Chasue.Directors who are major shareholders from Malaysian Investors are Mr. Goh Kok Cheng and Mr. Goh Kok Beng.


Annual Report 2007

3.

(a) Monetary Compensation

- Directors

2007 NAME

DIRECTOR FEE

(Baht)

DIRECTOR REMUNERATION

(Baht)

1. Mr. Nopdol Tumwattana 120,000 -

2. Mrs. Mallikar Leeraphan 100,000 -

3. Asst. Prof. Dr. Nantarika Chansue 220,000 -

4. Mr. Goh Kok Cheng, Dickson 120,000 -

5. Mr. Goh Kok Beng - -

6. Pol.Gen. Sereepisuth Taemeeyaves 275,000 -

7. Professor Emeritus Dr. Surapone Virulrak 180,000 -

8. Mrs. Artivon Bunnag 220,000 -

Total 1,235,000 -

Remark: Directors No. 6 – 8 assumed the position of Board of Directors on January 25th, 2007

At the Extraordinary Meeting of Shareholders No. 4/2007 held on June 14th, 2007, the Commiittee set the Director

compensation for attendance of meeting as director fee, namely, Chairman Baht 20,000 per meeting, Director Baht 20,000 per

person per meeting, Chairman of Audit Committee Baht 25,000 per meeting, Audit Committee Member Baht 20,000 per person

per meeting whereas the total compensation for 8 Directors shall not exceed Baht 3 million per year.

- Management (Remuneration applied to Executives whose names are listed as Executive Members)

2007 REMUNERATION

NO. OF EXECUTIVES TOTAL REMUNERATION (Baht)

Salary 6 5,572,000

Bonus 6 1,029,000

Accommodation 1 840,000

Insurance Policy 1 996,000

Entertainment 2 565,641

Total 6 9,002,641

Remark: Two Executives, namely, Senior Account Manager and Senior Finance Manager assumed the Executive positions on

June 1st, 2007.

Executive Remuneration


Annual Report 2007

(b) Other Moneraty CompensationThe Company and its employee had established a Provident Fund in which the Company’s contribution

equivalent 2 – 3% of monthly salary. The Company started to pay the said contribution for the executives andemployees as from June, 2007 onward.

4. Corporate GovernanceThe Company recognizes the importance of carry out the responsibilities of business operation, in nurturing

a good corporate governance practice. Therefore, the Company strives to operate its business in compliance withthe guidelines of the Stock Exchange of Thailand’s (SET) Code of Best Practice for Directors of Listed Companies.

In addition, the Company resolved to adopt the Principle of Good Corporate Governance following theguidelines of the SET to ensure the highest benefits to the Company and to strengthen the transparency andefficiency of the management that could strengthen the confidence of the shareholders, investors and all relatedparties concerned as follows:

Section 1 Rights of the Shareholders(1) The Company shall place utmost importance on the rights of every shareholder. On each Shareholders’

meeting, the Company shall send a written notice calling the meeting with relevant information to the shareholdersnot less than seven days prior to the date of the meeting. Moreever, in the event the Securities & ExchangeCommission or the Stock Exchange of Thailand requiring that the Company should send a written notice callingthe meeting to the shareholders more than seven days in advance, the Company shall promptly comply with suchregulation, i.e., a written notice calling the meeting to consider connected transactions or acquisitions anddispositions of assets; or a written notice calling the meeting to consider Employee Stock Option Program, etc.,the Company shall send such written notice calling the meeting of shareholders not less than 14 days prior to thedate of the meeting. On the day of shareholders’ meeting, the Company shall provide equal opportunity for everyshareholder to audit the Company’s performance and express opnion and comment freely and the Companyshall prepare minutes of all shareholders’ meetings that are accurate and complete in order to be examined bythe shareholders.

(2) Shareholders’ MeetingAt the Shareholders’ Meeting, the Chairman of the Meeting provides equal opportunity for every

shareholder to examine the Company’s operation, to ask questions or comment on any suggestions.The Company recognizes the importance of the shareholders’ meeting; thus, it is the Company’s policy

to prepare and provide sufficient and adequate information to the shareholders providing equitiable treatment toexpress their opinions and raise any questions at the shareholders’ meeting. The following procedures relatingto preparation of the shareholders’ meeting are adopted by the Company, namely:

(a) Receive Notice of the Meeting: The company shall prepare a written notice calling the meeting thatindicate the place, date, time, agenda of the meeting and the matters to be proposed to the meeting together withsufficient detail to the shareholders not less than 14 days prior to the date of the meeting. The notice calling for themeeting shall also be posted in the Company’s website.

(b) Conduct the Meeting: At the Shareholders’ Meeting, the Chairman of the Meeting shall explain thevoting procedure and vote count prior to the commencement of the meeting, and provide opportunity for theshareholders to ask questions, express opinions and suggestions on various agendas in which significant topics inquestions and suggestions will be recorded in the minutes of the meeting. In addition, the Company shall arrangeto have representatives from the Board of Directors, the Management, the Audit Committee, the Auditor and LegalAdvisor to attend the Shareholders’ Meeting for questions clarification.

(c) Minutes of the Shareholders’ Meeting: The Company shall disclose the Minutes of the Shareholders/Meeting via the Company’s website and shall propose to the shareholders to consider confirmation of the Minutesat the next meeting. The Company shall maintain the Minutes of Shareholders’ Meeting and keep them at a safeplace for related party to examine.


Annual Report 2007

Section 2 Rights and Equitable Treatment(1) For shareholders who are unable to attend the meeting, the Company provides a proxy form to allow

the shareholders to appoint an Independent Director or Audit Committee as a proxy to vote on behalf of theshareholders.

(2) Control and Usage of Insider’s InformationThe Company place importance on the effective controlling system and the internal audit for both the

Executives and operation level staff. Therefore, clear job descriptions and lines of authority and reporting andresponsibilities for each unit are defined in writing to support the control and monitoring the use of company’sassets for the benefits of the Company. There are segregation of positions for operation staff, managment staff andperformance appraisal staff to balance off the power and cross-examination as appropriate. In addition, there isan internal control system for Sales in which the Company has set up reporting system for submission to respectiveExecutive for approval. With this, the Company has signed an agreement to appoint, A.C.C. Audit Firm, as theCompany’s Internal Audit, with the scope of responsibility consisted of 4 systems as follows:

1. Sales and Collection System2. Procurement and Payment System3. Inventory Control and Warehouse System4. Human Resources Management SystemThe Company’s internal audit officer shall submit the report of performance appraisal on internal audit

activities to the Audit Committee. Additionally, the Company’s internal audit officer shall review any significantconnected transactions as assigned by the Audit Committee for submission to the Audit Committee. The secretaryof Audit Committee shall act as a coordinator between an internal auditor and the Company’s Executive.

The Board of Directors highly recognizes the importance of Risk Management. Therefore, the Companyhas set up a risk assessment for the operation and has set a preventive measurement and mitigation,including the risk that will have an impact on the Company’s business operation as specified in the risk factors.

Section 3 Role to Stakeholders(1) Rights of StakeholdersThe Committee assigns the highest priority to the rights of all stakeholders as follows:a) Employees: The Company treats all employees as equal, fair with reasonable compensation

whilst continues to hold training and development on skilled knowledge and foreign lanquage.(b) Business Parters and Creditors: The Company strictly observes and adheres to all its obligations to

partners and creditors on a fair basis in compliance with the commercial conditions and/or joint agreement formutual benefits of both parties.

(c) Customers: The Company is honest and sincere to the customers and continues to provide qualityproducts whilst gathering feedback and comments from the customer.

(d) Competitors: The Company abides by rules and ethics of fair competition, and will not destroy itscompetitors through unethical strategies.

(e) Shareholders: The Company continues to develop the organization toward continuous growth for highersales revenues and increase of net profit which shall benefit the shareholders in terms of reasonable return oninvestment based on the present business situation.

(f) Society and Community: The Company continues to play an active role in the community environment andsociety, including takes part in social activities for the benefit of the community.

Section 4 Disclosure of Information and Transparency(1) Corporate Governance PolicyThe Board of Directors adopted the principal good governance policy as it recognizes the significant

roles in nurturing the practice which facilitating continous growth and stability. The Board is determined andintended to follow the principal by setting policy and direction for the Company’s operation to place importance


Annual Report 2007

on the internal control system and the internal audit; to monitor the administrative management in carry out theoperation effectively for the long-term benefit of the shareholders under the governing laws and business ethicsincluding the disclosure of information and transparency and appropriate risk management.

(2) Business EthicsThe Company has clear regulations on Code of Ethics or Statement concerning the duty of the Board of

Directors, the Executives and all employees of the Company, as guidelines in performing one’s duties withhonesty, integrity and moral principles. The Company shall sincerely monitor and follow-up to encourage the bestpractice on Code of Ethics or Statement among the employees as well as the disciplinary action otherwise.

(3) Investor RelationThe Board of Directors understands the importance of disclosed the Company’s information regarding

finance and non-finance information in terms of transparency and accuracy. Thus, the Company has appointedMiss Waristha Thapanasakulwong to be responsible for the disclosure of the Company’s important information,including creating a good relationship and communicate to investors, shareholders and other analysts. Generalinvestors can contact the Company for more information at Telephone: 02 - 972 - 3460 Ext.. 818 orhttp://www.bodyglove.co.th

Section 5 Responsibilities of Board of Directors(1) The Board of Directors specifies the policy and participate in the consideration and approve to

determines the vision, missions, strategies, business plan and budget of the Company, as well as having goodcorporate governance so that the executives perform the work under the policy as specified effectively andefficiency whilst increase more valued added at the height of the economy for the business and the higheststability for the shareholders.

(2) Balance of Power for Non-Executive DirectorsThere are eight persons on the Board of Directors, namely- 2 directors from the Executives- 3 directors not from the Executives- 3 directors as Independent DirectorsTherefore, the Company has 3 directors as Independent Directors who represent 37.5% of the whole

Board of Directors.Moreover, the number of directors from major shareholders are consisted of 5 director, or 62.5% of the

whole Board of Directors, namely(1) directors from major shareholders of Tumwattana’s Group are Mr. Nopdol Tumwattana; Mrs. Mallikar

Leeraphan and Asst. Prof. Dr. Nantarika Chansue; and (2) directors from major shareholders of Malaysian Inves-tors are Mr. Goh Kok Check and Mr. Goh Kok Beng. The directors from these two major shareholders groups canbalance off the power of the administrative operation among themselves.

(3) Aggregration or Segregation of PositionsThe Chairman is not the same person as the Chief Executive Officer as to clearly define and separate role of dtiesin directing the Company’s policies and management.

(4) Conflict of InterestIn order to prevent conflict of interest transaction, it is the Board of Directors’s authorization to specify that

an authorized person shall not approve any transaction of his own or a person who may have conflict of interet orbenefit unless such transaction is of ordinary business transaction of the Company under general commercialterms. In addition, the Company shall comply with the Security and Exchange of Thailand’s notification governingthe connected transaction of the registered company, or on the acquisition or disposition of assets of the regis-tered company, whichever case may be. Furthermore, the Company shall set policy and procedure that nomembers of the Executives or related parties can use non-disclosure information of the Company for personal benefit.

- Potential conflict of interest transactions: The Board of Directors is well aware of any transaction whichcould lead to a potential conflict of interest, and, has considered very carefully with a view to full compliance andconcludesthat the terms and prices in these transactions are comparative to other individuals.


Annual Report 2007

In 2007, the Board of Directors held meetings as follows:

2007

NO. OF MEETING / NO. OF ATTENDANCE

BOARD OF DIRECTORS

Board of Directors Meeting Audit Committee Meeting

1. Mr. Nopdol Tumwattana 8/8 -

2. Mrs. Mallikar Leeraphan 8/7 -

3. Asst. Prof. Dr. Nantarika Chansue 8/8 -

4. Mr. Goh Kok Cheng 8/8 -

5. Mr. Goh Kok Beng 8/ - -

6. Pol.Gen. Sereepisuth Taemeeyaves 6/6 5/5

7. Professor Emeritus Dr. Surapone Virulrak 6/5 5/4

8. Mrs. Artivon Bunnag 6/6 5/5

Remark: Reasons for absence of Mr. Goh Kok Beng were due to previous business engagements.

, Dickson

- The Company shall require that the Executives report changes of the securities hold to the SecuritiesExchange Commission, Section 59, of the Securities and Exchange Act, B.E. 2535 within three working days.In addition, The Directors, Executives or employees who receive the internal information are prohibited to discloseinternal information to outside individual or non-related person, and the said Directors, Executives or employeesmust not buy or sell shares of the Company for a period of one month before the release of the Company’s financialstatements to the public.

The Company’s policy on transactions that may have potential conflict of interest or connected transactionsare as follows:

- to set a price and term following the same procedure as may be entered with other invidivual.- to strictly follow the procedures of the Stock Exchange of Thailand.- to disclose information on connected transactions in the Company’s Financial State

ments, Annual Report and Information Disclosure Report (Form 56-1) for inspection by he shareholders(5) Remuneration for the Board of Directors and ExecutivesRemuneration for the Board:: The Company has a clearly and transparently defined remuneration policy,

with remuneration for directors reviewed and approved by the Shareholders’ Meeting. Remuneration is adequate,determined in a manner equitable with industry standards, and is performance-based as a way to motivate andretain qualified directors.

Remuneration for the Executives: Remuneration for the Executives is in compliance with with the principleand policy as set by the Board of Directors which related to the Company’s performance and individual perfor-mance of the Executives. The Company has no Remuneration Committee at present.

(6) Board of Directors MeetingThe Board of Directors shall hold a meeting at least once every three month and hold additional meetings

as deem necessary. The Company Secretary served a written notice, the agenda, and any documents to thedirectors not less than seven days prior to the date of the meeting to ensure sufficient time for the directors to studyand review the agenda before attending the meeting. The Company shall maintain the minutes of meetings and keepthe said documents receiving the confirmation from the Board of Directors for future examine by the Board orrelated party.

(7) Sub-CommitteeThe Company appointed the Audit Committee to monitor and review the Company’s operation with clear

scope of duties and responsibility of Audit Committee (details as shown in Item 1 (c)).The Company has no Remuneration Sub-Comiittee. However, the Company has taken appropriate

procedure in consideration for the remuneration, and determined in a manner equitable with industry standardsof approximately the size operation, and is performance-based.


Annual Report 2007

(8) Board of Directors’s ReportThe Board of Directors is responsible for the financial statements of the Company and the fiancial infor-

mation as shown in the Annual Report. The financial statements shall comply with the generally accepted account-ing standards in Thailand, which considered appropriate for the Company. In addition, the Board of Directors isaccountable for reviewing the accuracy of the Company’s financial statements and ensures there is adequatedisclosure in notes to financial statements.

5. Internal Information UsageThe Company has a concise policy and procedure on the control and usuage of internal information,

especially the information on the Company’s financial status that must be audited / reviewed by the CertifiedPublic Accountant and receive approval from the Audit Committee Meeting every time before propose to the Boardof Directors and the Stock Exchange of Thailand or general public.

The Company has come up with the rules to prevent the usage of internal data for personal benefits for theBoard of Directors, Executives and employees as follows:

(1) To prohibit the Board of Directors, Executives as well as their spouses and children under legal agethe use of internal information for the purpose of acquisition, disposition, transfer or take over the securities of theCompany before such information is disclosed to the general public, especially within 30 days before the disclo-sure of the Company’s financial statements to the public, Moreover, following the release of such information, theaforementioned individuals are prohibited to acquire or dispose of the securities of the Company until the publicacknowledge the information receipt for appropriate time (7 days from the disclosure date)

(2) To acknowledge the Board of Directors and Executives as well as their spouses and children underlegal age to be aware of their dities that they have the duties to submit reports on the securities holding of theCompany in accordance to the Securities and Exchange Commission Notification No. Sor. Jor. 14/2540, Re:Preparation and Disclosure of Reports on Securities Holding of directors, Executives and auditor of the company.

In case of any violation of the aforementioned regulations, the Company shall proceed with a disciplinaryaction as may deem appropriate, i.e., verbal warning with written confirmation, deduction of salary, suspend, ortermination of employment, etc.

To prohibit the Board of Directors, Executives as well as their spouses and children under legal age theuse of internal information for the purpose of acquisition, disposition, transfer or take over the securities of theCompany before such information is disclosed to the general public, especially within 30 days before the disclo-sure of the Company’s financial statements to the public, Moreover, following the release of such information, theaforementioned individuals are prohibited to acquire or dispose of the securities of the Company until the publicacknowledge the information receipt for appropriate time (7 days from the disclosure date)

6. Employees(a) Total number of employees as at December 31st, 2007 was 382 persons(b) Total remuneration and type of compensation provided to the employees (excluded

Directors and Executives)

TYPES OF REMUNERATION 2007 (Baht)

Salary / Wages 29,371,283.34

Wages 3,976,786.00

Employees benefits rpenses 22,764,404.20

Total 56,112,473.54


Annual Report 2007

(c) Policy on Human Resources DevelopmentAs the Company’s operation is distribution of readywear apparel and accessories under Body Glove

Trademark which place high emphasis on the continuation of product development and quality service to pro-mote sales, the Company; therefore, recognizes the importance of Human Resources Deveopment to ensure thehighest benefits for the Company and for the customer’s satisfacton on impressive service rendered. With thisobjectives, we strive to strengthen the effectiveness in various areas, such as, (1) the administrative managementof Flagship Store and product presentation; (2) the complete quality service rendered by skillful staff who under-stand the products and brand trademark; (3) increment sales volumes and profits; and (4) building strong andbinding relationship among co-workers and working effectively as teamwork.

The Company’s Human Resrouces Department is in charge of the training, both in-house andpublic. For in-house training, the speaker is represented by the Company member and/or special guest speakerfrom outside. For public training, the Company will send the employees to attend courses by considering theposition, duty and responsibility for selection of suitable courses and contents as well as the Training Institution forthe benefit of the employee and the Company as a whole.

7. Internal ControlThe Company recognizes the importance of an internal control system with sufficiency to protect or

minimize probable risks. Whereas the Board of Directors has established an Internal Audit Department by hiring anoutside company, namely, A.A.C. Audit Firm, to review the operation systems in accordance to the annual auditplan as approved by the Audit Committee. It is the Company’s objectives to ensure and evaluate the efficiencyand sufficiency of the Company Internal Control System; to ensure that all resources are utilized to full benefitswhilst control on other company’s operations are in line with the law governing and the government regulations,and important financial transactions of the Company are conducted efficiently and accurately . Therefore, in orderfor the Internal Audit Department to be independet and to be able to assess and perform its checks and balancestask, the Board of Directors has stipulated that the Internal Audit Department report directly to the Audit Committee.

As for the Risk Management, the Company views the importance of the risk management procedure byconsider the present risk factors and expected risk together and thus analyze probable impact or possibilitythat such risk will take affect in order to set a preventive measurement and manage such risk. After carefulconsideration, the Company has prepared a report on Risk Management and constantly follow-up on the results.For major Risk Factors of the Company, details are summarized in a separate topic under Risk Factors, page 33to page 36

The Board of Directors and the Audit Committee had evaluated the Internal Control System in accordance tothe Appraisal of the Sufficiency of Internal Control at the Board of Directors’ Meeting held on February 23rd, 2008and concluded that the Company had sufficient Internal Control System and appropriate for the business operation.In addition, there was no significant faults relating to the Internal Control System and that the system can protect theCompany’s assets from unjustify or wrongly usuage by the Executives. The Audit Committee Board had expressedthat the Company develop the 15 Principles of Good Corporate Governance as set by the Stock Exchange ofThailand to the full extent.

8. Dividend PolicyThe Company has a policy of making annual dividend payment to its shareholders at a rate of no less than

40% of the Company’s net profit after deduction of income tax; however, are subject to change to a lower rate thanaforementioned depending on the Company’s investment plan on business operation.


Annual Report 2007


Annual Report 2007

INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS’ REPORT

To The Shareholders of Body Glove (Thailand) Public Company Limited

(Formerly the name of Body Glove (Thailand) Company Limited)

I have audited the accompanying balance sheets of Body Glove (Thailand) Public

Company Limited as of December 31, 2007 and 2006, the related statements of changes in

shareholders’ equity, income and cash flows for the years then ended. These financial statements are

the responsibility of the Company’s management as to their correctness and completeness of the

presentation. My responsibility is to express an opinion on these financial statements based on my

audits.

I conducted my audits in accordance with generally accepted auditing standards. Those

Standards require that I plan and perform the audit to obtain reasonable assurance about whether the

financial statements are free of material misstatement. An audit includes examining, on a test basis,

evidence supporting the amounts and disclosures in the financial statements. An audit also includes

assessing the accounting principles used and significant estimates made by management, as well as

evaluating the overall financial statement presentation. I believe that my audits provide a reasonable

basis for my opinion.

In my opinion, the financial statements present fairly, in all material respects, the financial

position of Body Glove (Thailand) Public Company Limited as of December 31, 2007 and 2006, the

results of its operations and its cash flows for the years then ended in conformity with the generally

accepted accounting principles.

(KESREE NARONGDEJ)

Certified Public Accountant

Registration No. 76

A.M.T. & ASSOCIATES

Bangkok, Thailand

February 23, 2008


Annual Report 2007

BODY GLOVE (THAILAND) PUBLIC COMPANY LIMITED

(FORMERLY THE NAME OF BODY GLOVE (THAILAND) COMPANY LIMITED)

BALANCE SHEETS

AS OF DECEMBER 31, 2007 AND 2006

A S S E T S

B A H T

NOTE 2007 2006

CURRENT ASSETS

Cash and cash equivalents 3 69,039,344.66 16,667,014.05

Trade account receivables

4 26,928,775.99 17,351,967.87

Inventories - net 5 157,053,536.79 71,063,227.28

Other current assets

Value added tax credit balance 2,597,856.62 -

Others 2,132,814.96 1,836,589.60

Total Current Assets 257,752,329.02 106,918,798.80

NON - CURRENT ASSETS

Plant and equipment - net 6,8,11 and 16 107,333,772.98 113,671,815.20

Trademark - net 7 and 14 16,495,515.00 -

Other non - current assets - deposits 22,792,799.58 20,691,674.76

Total Non - Current Assets 146,622,087.56 134,363,489.96

TOTAL ASSETS 404,374,416.58 241,282,288.76

- net


Annual Report 2007



BALANCE SHEETS

AS OF DECEMBER 31, 2007 AND 2006

LIABILITIES AND SHAREHOLDERS' EQUITY

B A H T

NOTE 2007 2006

CURRENT LIABILITIES

Bank overdrafts and short - term loan

from financial institution 8 8,180,561.37 14,191,108.79

Trade account payables 78,545,293.92 44,890,695.18

Current portion of hire purchase and

finance lease obligations 9 1,828,941.96 2,332,143.96

Current portion of long - term loan

from related person 10 6,000,000.00 6,000,000.00

Current portion of other long-term loans 11 6,299,816.24 4,081,261.11

Other current liabilities

Accrued expenses 15,848,318.93 7,268,815.25

Accrued income tax expenses 4,855,866.74 13,523,977.88

Account payables - fixed assets 3,842,975.35 4,107,915.38

Others 940,309.27 2,686,003.04

Total Current Liabilities 126,342,083.78 99,081,920.59

NON - CURRENT LIABILITIES

Hire purchase and finance lease obligations 9 2,112,750.36 3,575,615.59

Long - term loan from related person 10 29,500,000.00 35,500,000.00

Other long - term loans 11 18,700,408.85 15,389,619.35

Other non - current liabilities

Accrued trademark fee 14 10,165,500.00 -

Employee deposits 1,763,600.00 1,227,400.00

Total Non - Current Liabilities

Total Liabilities 188,584,342.99 154,774,555.53

62,242,259.21 55,692,634.94


Annual Report 2007

SHAREHOLDERS’ EQUITY

Share capital 12

Authorized share capital

80,000,000 ordinary shares of Baht

1.00 each

as of December 31, 2007 and 60,000

ordinary shares

of Baht 1,000.00 each as of December

31, 2006

80,000,000.00

60,000,000.00

Issued and paid - up share capital

80,000,000 ordinary shares of Baht

1.00 each

as of December 31, 2007 and 60,000

ordinary shares

of Baht 1,000.00 each as of December

31, 2006 80,000,000.00 60,000,000.00

Premium on share capital 12 69,680,000.00 -

Retained earnings

Appropriated - legal reserve 13 2,350,117.02 370,000.00

Unappropriated 63,759,956.57 26,137,733.23

Total Shareholders’ Equity 215,790,073.59 86,507,733.23

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 404,374,416.58 241,282,288.76


Annual Report 2007



STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

B A H T

Issued and Retained earnings

paid - up Premium on Appropriated

Note share capital share capital legal reserve Unappropriated Total

Beginning balance as of

60,000,000.00 - 370,000.00 402,450.57 60,772,450.57

Net profit - - - 25,735,282.66 25,735,282.66

End balance as of December 31, 2006 60,000,000.00 - 370,000.00 26,137,733.23 86,507,733.23

Increased share capital 12 20,000,000.00 - - - 20,000,000.00

Premium on share capital 12 - 69,680,000.00 - - 69,680,000.00

Net profit - - - 39,602,340.36 39,602,340.36

Appropriated legal reserve 13 - - 1,980,117.02 (1,980,117.02) -

End balance as of

80,000,000.00 69,680,000.00 2,350,117.02 63,759,956.57 215,790,073.59

January 1, 2006

December 31, 2007


Annual Report 2007



STATEMENTS OF INCOME


B A H T

Note 2007 2006

(Restated)

REVENUES

Revenue from sale of goods 483,479,375.64 378,588,049.17

Gain on exchange rate 1,070,653.33 536,692.55

Other income 745,557.54 522,157.82

Total Revenues 485,295,586.51 379,646,899.54

EXPENSES

Cost of sale of goods 223,372,532.12 172,968,055.89

Royalty fee 14 13,738,951.46 5,673,212.66

Selling and administrative expenses 190,689,729.02 152,164,896.08

Total Expenses 427,801,212.60 330,806,164.63

PROFIT BEFORE INTEREST

AND INCOME TAX EXPENSES 57,494,373.91 48,840,734.91

INTEREST EXPENSES 5,465,589.10 6,431,474.37

INCOME TAX EXPENSES 12,426,444.45 16,673,977.88

NET PROFIT 39,602,340.36 25,735,282.66

BASIC EARNINGS PER SHARE 2.10 0.64 0.43

THE WEIGHTED AVERAGE NUMBER OF

ORDINARY 2.10 61,666,667 60,000,000

SHARES (SHARE)


Annual Report 2007



STATEMENTS OF CASH FLOWS


B A H T

Note 2007 2006

CASH FLOWS FROM OPERATING ACTIVITIES

Net profit 39,602,340.36 25,735,282.66

Adjustments to reconcile net profit to net cash provided by (used in ) from

operating activities

Depreciation and amortization 23,658,174.86 18,940,131.59

Increase (decrease) in adjustment of doubtful accounts - 246,239.70

Increase (decrease) in adjustment of decline in value

of obsolete inventories (239,612.38) 102,752.28

Unrealized loss (gain) on exchange rate (236,621.05) 148,537.01

Loss from fixed assets written - off 1,244,148.71 799,330.74

Loss (gain) on sale of plant and equipment (121,854.53) 129,763.21

Decrease (increase) in trade account receivable - related party - 710,034.46

Decrease (increase) in trade account receivables - other parties (9,576,808.12) (4,955,471.21)

Decrease (increase) in inventories (85,750,697.13) 8,069,504.25

Decrease (increase) in other current assets - value added tax credit balance (2,597,856.62) -

Decrease (increase) in other current assets - others 1,102,130.80 1,580,419.82

Decrease (increase) in other non - current assets - deposits (2,101,124.82) (3,306,879.51)

Increase (decrease) in trade account payable - related party - (997,609.02)

Increase (decrease) in trade account payables - other parties 33,638,499.79 (4,136,957.79)

Increase (decrease) in other current liabilities - accrued expenses 8,579,503.68 (1,102,810.98)

Increase (decrease) in other current liabilities - accrued income tax expenses (8,668,111.14) 13,523,977.88

Increase (decrease) in other current liabilities - accrued payables - fixed assets (4,107,915.38) (1,209,142.37)

Increase (decrease) in other current liabilities - others (1,745,693.77) 1,434,932.79

Increase (decrease) in other non - current liabilities - employee deposits 536,200.00 279,000.00

Net cash inflow (outflow) from operating activities (6,785,296.74) 55,991,035.51

CASH FLOWS FROM INVESTING ACTIVITIES

Payment for purchase of plant and equipment (15,253,546.93) (36,785,807.67)

Proceeds from sale of plant and equipment 123,924.30 993,364.47

Payment for initial upfront fee from purchase of trademark (6,945,480.00) -

Net cash inflow (outflow) from investing activities (22,075,102.63) (35,792,443.20)

CASH FLOWS FROM FINANCING ACTIVITIES

Increase (decrease) in bank overdrafts and short - term loan

from financial institution (6,010,547.42) (22,295,360.92)

Increase (decrease) in hire purchase and finance lease obligations (1,966,067.23) (2,390,401.91)

Increase (decrease) in long - term loan from related person (6,000,000.00) 6,000,000.00

Increase (decrease) in other long - term loans 5,529,344.63 12,456,111.59

Cash received from share capital increase 89,680,000.00 -

Net cash inflow (outflow) from financing activities 81,232,729.98 (6,229,651.24)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS - NET 52,372,330.61 13,968,941.07

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 16,667,014.05 2,698,072.98

CASH AND CASH EQUIVALENTS, END OF YEAR 3 69,039,344.66 16,667,014.05


Annual Report 2007



STATEMENTS OF CASH FLOWS


B A H T

2007 2006

ACTIVITIES NOT AFFECTING CASH :

Increase in account payables - fixed assets

from purchase of plant and equipment 3,842,975.35 4,107,915.38

Increase in hire purchase and finance lease obligations

from purchase of vehicles - 438,878.50

Increase in trademark and accrued trademark fee

under the license rights agreement 7,198,200.00 -

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

Cash paid during the year for

Interest expenses 5,503,425.06 6,663,964.51

Income tax expenses 21,094,555.59 3,158,588.07


Annual Report 2007

BODY GLOVE (THAILAND) PUBLIC COMPANY LIMITED(FORMERLY THE NAME OF BODY GLOVE (THAILAND) COMPANY LIMITED)

NOTES TO FINANCIAL STATEMENTSFOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

1. GENERAL INFORMATION1.1 General matter

The Company was incorporated as a limited company under the Thai Civil and Commercial Code on March 31,1988, and changed its status to a public limited company under the Public Limited Company Act on June 29,2007 and the Company’s shares had been approved to be listed in the Market for Alternative Investment (MAI) onDecember 11, 2007. The address of its registered office is 299/9 Moo 7, Phaholyothin Road, Anusawaree, Bangkhen,Bangkok. The Company operates in Thailand, and its principal activities are retail of ready to wear clothes. As ofDecember 31, 2007 and 2006, the Company’s employees and employee expenses are as follows :

2007 2006The number of employees at the end of year (persons) 382 327Employee expenses for the year (million Baht) 63.71 46.41

1.2 Basic for preparation and presentation of financial statementsThe financial statements of the Company are prepared in accordance with the generally accepted accountingstandards and presented in brief in accordance with the Department of Business Development’s announcementon September 14, 2001.

1.3 Related parties1.3.1 Related companies are related through joint directors and/or related through the key

management personnel as follows:- Neo Static Ltd. (a related party through March 2007)- TSI International Co.,Ltd.- Light Sport Plastic Co., Ltd.1.3.2 Related persons are the directors of company and/or the shareholders and/or the key management personnel as follows:- Mr. Nopdol Tumwattana- Mr. Goh Kok Cheng- Ms. Mallika Leelaphan- Ms. Waristha Thapanasakulvong


Annual Report 2007

1.4 Adoption of new accounting standardsThe Federation of Accounting Professions (FAP) has issued Notifications No. 9/2550, No. 38/2550 and

No. 62/2550 regarding Accounting Standards, and these have been published in the Royal Gazette. The Notifica-tions mandate the use of the Accounting Standards (Revised 2007) in place of the previous versions, which arecancelled. Accounting Standards (revised version) which are not effective for the current period are as follow :

Accounting Standards No. 25 Cash Flows Statements (revised 2007)Accounting Standards No. 29 Leases (revised 2007)Accounting Standards No. 31 Inventories (revised 2007)Accounting Standards No. 33 Borrowing Costs (revised 2007)Accounting Standards No. 35 Presentation of Financial Statements (revised 2007)Accounting Standards No. 39 Accounting Policies, Changes in Accounting Estimates and

Errors (revised 2007)Accounting Standards No. 41 Interim Financial Reporting (revised 2007)Accounting Standards No. 43 Business Combinations (revised 2007)Accounting Standards No. 49 Construction Contracts (revised 2007)Accounting Standards No. 51 Intangible Assets

These accounting standards will become effective for the financial statements for fiscal yearsbeginning on or after 1 January 2008.

However, the management has assessed the effect of these revised accounting standards and believesthat they will not have any significant impact on the financial statements for the period in which they are initially applied.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES2.1 Revenues recognitionThe Company recognizes revenue from sale when goods are delivered and the risk and reward of goods

ownership are transferred to customers.2.2 Cash and cash equivalentsCash and cash equivalents are comprised of cash on hand, deposits at banks and highly liquid short -

term investment.2.3 Allowance for doubtful accountsThe Company provides allowance for doubtful accounts equal to an estimate of those amounts which

may prove to be uncollectible based on historical collection experience and a review of the current status of theexisting receivables.

2.4 InventoriesFinished goods are stated at the lower of cost (moving average method) or net realizable value.Raw materials are stated at the lower of cost (First-in, First-out) or net realizable value.


Annual Report 2007

2.5 Plant and equipmentLeasehold right and building and building improvement are amortized by the straight-line method over

the existing agreement term.Equipment are stated at cost net of accumulated depreciation.Depreciation is calculated on the straight-line method over the estimate of useful lives as follows:

Note YEARSLeasehold right - shop area 16 Period of leasehold right (6 - 29)Building and building improvement 16 Period of land and construction

lease agreement (20)Furniture, fixture and office equipment 5Vehicles 5

2.6 TrademarkTrademark is stated at cost net of accumulated amortization. Amortization is calculated on the straight -

line method over a period of 10 years commencing July 1, 2007.2.7 Financial LeasesThe Company records vehicle under financial leases, as assets and liabilities in the balance sheets at

amount equal to the fair value of the leased property at the inception of the lease or, if lower, at the present value ofthe minimum lease payments. In calculating the present value of the minimum lease payments, the discountfactor used is the interest rate implicit in the lease. The interest charge is recorded to periods during the leaseterm based on the remaining balance of the liability for each period.

2.8 Foreign currency transactionTransactions in foreign currencies are converted at the exchange rate of the transaction date. Assets and

liabilities in foreign currencies at the end of year are converted at average bank buying and selling rate at the daterespectively.Gains or losses from the translations are included in determining earnings.

2.9 Financial instrumentsFinancial instruments on the balance sheets include cash and deposits at banks, highly liquid short -

term investment, trade account receivables and payables, loan, accrued expenses, account payables - fixedassets, accrued trade mark fee and hire purchase and finance lease obligations. The particular recognitionmethods adopted are disclosed in the individual policy statements associated with each items.

2.10 Basic earnings per shareBasic earnings per share is determined by dividing net profit by the weighted average number of ordi-

nary shares outstanding.The Company had restated the weighted average number of ordinary shares used in computation of the

basic earnings per share for the year 2006 from 60,000 shares to 60,000,000 shares to reflect the change in parvalue of the ordinary share as mentioned in notes to the financial statements 12. As a result, the earnings per sharefor the year 2006 had been changed from Baht 428.92 per share to Baht 0.43 per share.


Annual Report 2007

4. TRADE ACCOUNT RECEIVABLES - NET

As of December 31, 2007 and 2006, there are 1 and 3 trade account receivables respectively that have been overdued for

payments, classified by aging as follows :

B A H T

2007 2006

Not overdue 26,887,739.78 17,351,967.87

Overdue

Less than 3 months 41,036.21 -

3 months to 6 months - -

6 months to 12 months - -

over 12 months - 1,092,519.01

Total 26,928,775.99 18,444,486.88

Less Allowance for doubtful accounts - (1,092,519.01)

Trade account receivables - net 26,928,775.99 17,351,967.87

5. INVENTORIES - NET

B A H T

2007 2006

Finished goods 154,356,405.24 70,719,573.63

Raw materials 193,315.92 1,502,352.81

Goods in transit 3,422,902.41 -

Total 157,972,623.57 72,221,926.44

Less Provision for obsolete inventories (919,086.78) (1,158,699.16)

Inventories - net 157,053,536.79 71,063,227.28

3. CASH AND CASH EQUIVALENTS

B A H T

2007 2006

Cash and deposits at banks 9,039,344.66 16,667,014.05

Highly liquid short - term investment - bill of exchange 60,000,000.00 -

Total cash and cash equivalents 69,039,344.66 16,667,014.05


Annual Report 2007

6. P

LAN

T

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Annual Report 2007

As of December 31, 2007 and 2006, the Company has the assets under finance lease agreements in the original cost and its

depreciation as follows :

B A H T

2007 2006

Cost of finance lease assets 5,928,939.00 5,928,939.00

Less Accumulated depreciation (2,709,669.49) (1,518,467.16)

Net book value 3,219,269.51 4,410,471.84

7. TRADEMARK - NET

B A H T

2006 Increase Decrease 2007

Cost - 17,363,700.00 - 17,363,700.00

Less Accumulated

amortization - (868,185.00) - (868,185.00)

Trademark - net - 16,495,515.00

8. BANK OVERDRAFTS AND SHORT - TERM LOAN FROM FINANCIAL INSTITUTION

B A H T

2007 2006

Bank overdrafts 3,180,561.37 4,191,108.79

Promissory note (bearing interest at the rate of MOR p.a.)

Total 8,180,561.37 14,191,108.79

Bank overdrafts and short - term loan from financial institution are guaranteed by directors and parts of leasehold right.

9. HIRE PURCHASE AND FINANCE LEASE OBLIGATIONS

B A H T

2007 2006

Hire purchase and finance lease obligations - vehicles

(bearing interest at the rate 2.70% - 4.20% p.a.

with monthly repayment and the final payment

due in year 2008 - 2010) 3,941,692.32 5,907,759.55

Less Current portion (1,828,941.96) (2,332,143.96)

Hire purchase and finance lease obligations - net 2,112,750.36 3,575,615.59

The above obligations are guaranteed by a director of the Company.

accumulated

5,000,000.00 10,000,000.00


Annual Report 2007

10. LONG - TERM LOAN FROM RELATED PERSON

B A H T

2006 Increase Decrease 2007

Principal 41,500,000.00 - (6,000,000.00) 35,500,000.00


Net 35,500,000.00 29,500,000.00

On April 1, 2006, the Company had signed a loan agreement with a related person amounted to Baht 41.50 million, principal is

repayable in monthly installments of Baht 0.50 million for 7 years commencing January 1, 2007 with interest at the rate of MOR plus 0.25%

p.a. and interest is repayable in quarterly installments.

11. OTHER LONG - TERM LOANS

B A H T

2007 2006

Loans from local banks

- bearing interest at the rate of MLR p.a. and

repayable in monthly installments commencing

year 2003 through year 2010 4,249,135.65 5,683,829.84

- bearing interest at the rate of MLR-1% p.a. and


year 2006 through year 2011 11,050,262.11 13,787,050.62

- bearing interest at the rate of MLR p.a. and


year 2007 through year 2012 9,700,827.33 -

Total 25,000,225.09 19,470,880.46


Net 18,700,408.85 15,389,619.35

The above loans are guaranteed by directors, mortgage of warehouse building on land lease and parts of leasehold right.


Annual Report 2007

12. SHARE CAPITAL AND CHANGES OF THE COMPANYAt the extraordinary shareholders’ meetings No. 3/2007 held on May 30, 2007 and No. 4/2007 held on

June 14, 2007, the shareholders approved the special resolutions as follows :- Convert the Company to a public limited company and change the Company’s name from Body Glove

(Thailand) Company Limited to Body Glove (Thailand) Public Company Limited. These were approved by theMinistry of Commerce on June 29, 2007.

- Approve to list the Company in the Market for Alternative Investment (MAI).At the extraordinary shareholders’ meetings No. 4/2007 held on June 14, 2007, the shareholders approved todecrease the par value of the ordinary shares from Baht 1,000.00 per share to Baht 1.00 per share and increase theauthorized share capital from Baht 60.00 million (60,000 ordinary shares at Baht 1,000.00 each) to Baht 80.00million (80,000,000 ordinary shares at Baht 1.00 each). These were approved by the Ministry of Commerce on June29, 2007. The allotment of the increased shares shall be offered to the general public as the Board deemsappropriate.At the Board of Directors meeting No. 6/2007 held on November 14, 2007, the board approved the resolution tomake the initial public offering of the increased 20 million share at Baht 4.70 per share resulting the premium onshare capital of Baht 69.68 million (net of related expenses of Baht 4.32 million).


Annual Report 2007

13. LEGAL RESERVEIn accordance with the provisions of the Public Limited Company Act, the Company has to set aside a

minimum of 5% of its net profit of each year after deduction of deficit (if any) until the reserve reaches 10% ofauthorized capital. The reserve is not available for dividend distribution.

14. OPERATION , LICENSE AND SUB-LICENSE RIGHTS AGREEMENTOn May 3, 2007 , the Company has entered into the agreement with a foreign company to operate its retail

and distribution business in the products in the countries as specified in the agreement under the license andsub-license rights in trademark “BODY GLOVE” and the hand device. The said agreement terms are totaling 99years by automatically renewal for 9 successive 10 year terms with a final term of 9 years. The said agreement shallbe effective commencing July 1, 2007. Under the agreement, the Company has to pay the following fees :

1) Royalty fee at the rate with the minimum fee as specified in the agreement2) Advertising contribution at the rate specified in the agreement3) Initial upfront fee amounted USD 0.20 million (pay within 120 days following the date of the addendum)4) Upfront fee amounted USD 0.30 million (pay amounted USD 25,000 in quarterly installments

commencing April 2009 through January 2012)However, on December 31, 2007, the Company had been informed by the said foreign Company that, the

Company does not require to set up the advertising fund as specified in the agreement. Should the fund need tobe set up, the Company shall be noticed 90 days in advance by the said foreign company.As of December 31, 2007, the Company had recorded the accrued trademark fee for upfront fee of Baht 10.17million (USD 0.30 million).

15. PROVIDENT FUNDOn June 15, 2007, the Company has joined and employee provident fund scheme with a local entity. The

employee shall contributes at the rate of 2% - 3% of the gross salary and the Company contributes the same rate.


Annual Report 2007

MILLION BAHT

2007 2006 Transfer pricing policy

The transactions during the years

Related companies

Purchase inventories

- TSI international Co., Ltd. - 0.61 - not different from unrelated parties

Expenses

- Neo Static Ltd. 0.50 1.77 - at the rate agreed upon by both parties without

contract arrangement

- Light Sport Plastic Co., Ltd. - 0.89 - not different from unrelated parties

Related person

Interest expense

- Mr. Nopdol Tumwattana 2.94 3.31 - at the rate of 7.35% - 8.25% p.a. in year 2007

and 7.00% - 8.25% p.a. in year 2006

Rental expenses

- Mr. Nopdol Tumwattana 2.64 1.80 - at the rate specified in the agreements

16. LONG - TERM LEASE AGREEMENTSThe Company has entered into long - term lease agreements on shop area and services for 3 - 29 years

with the expiration date range from year 2007 - 2024 and the Company has also entered into the land andconstruction lease agreement and land lease for warehouse construction agreement with a related person for 3years commencing in May 2004 and March 2006 respectively, the said agreements shall be renewed for every 3years with totaling rental period not exceed 20 years and the expiration date of the agreement is year 2024. Underthe agreement, the ownership on warehouse building shall be transferred to the said related person when leaseagreement is expired.

17. TRANSACTIONS WITH RELATED PARTIESThe transactions with related parties as of December 31, 2007 and 2006 are as follows :

B A H T2007 2006

The outstanding balances Related company:

Accrued expense- Neo Static Ltd. - 0.50

Related personLong - term loan from related person

- Mr. Nopdol Tumwattana 35.50 41.50

Future minimum payments under operating leases are as follows :MILLION BAHT

LandShop area Land and (for warehouse

Year and services construction construction) Total2008 39.14 1.20 0.60 40.942009 24.46 1.35 0.68 26.492010 11.61 1.38 0.69 13.68

Thereafter 17.52 25.85 12.92 56.29

Rental and service expenses were Baht 50.71 million in year 2007 and Baht 49.96 million in year 2006

Transactions with related parties for the years ended December 31, 2007 and 2006 are as follows :


Annual Report 2007

18. FINANCIAL INFORMATION BY SEGMENT

The operations of the Company involve a single business segment, retail of ready to wear and are carried on in a single

geographic area, Thailand. As a result, all of the revenues, operating profits and assets reflected in these financial statements pertain to

the aforementioned business segment and geographic area.

19. FINANCIAL INSTRUMENTS

Foreign currency risk

As of December 31, 2007 and 2006, the Company is exposed to foreign currency risk primarily to foreign currency

denominated liabilities, which currently are not hedged by any derivative financial instrument as follows:

2007 2006

Million

USD

Million

MYR

Million

USD

Million

MYR

Foreign currency denominated liabilities

Trade account payables 0.39 0.07 - 0.87

Accrued expense 0.18 - 0.04 -

Accrued trademark fee 0.30 - - -

Interest Rate RiskAs of December 31, 2007 and 2006 the Company has financial assets and liabilities exposed to interest rate risk as

follows:2007

Million BahtFixed Interest Rate Maturing In: Average Interest Rate (%)

Floating 1 year over 1 toInterest Rate or less 5 years Floating Fixed

Deposits at banks 0.28 0.43 - 2.00 2.00 - 2.375Bill of exchange - 60.00 - - 4.125Bank overdrafts and

short - term loan fromfinancial institution 8.18 - - 7.125 - 7.50 -

Hire purchase andfinancial lease - 1.83 2.11 - 2.70 - 4.20obligations

Long - term loan fromrelated person 35.50 - - 7.35 -

Other long - term loans 25.00 - - 6.00 - 7.00 -


Annual Report 2007

2006Million BahtFixed Interest Rate Maturing In: Average Interest Rate (%)

Floating 1 year over 1 toInterest Rate or less 5 years Floating Fixed

Deposits at banks 10.07 0.15 - 2.50 3.25 - 4.00Bank overdrafts and

short - term loan fromfinancial institution 14.19 - - 8.00 - 8.50 -

Hire purchase andfinancial leaseobligations - 2.33 3.58 - 2.70 - 4.20

Long - term loan fromrelated person 41.50 - - 8.25 -

Other long - term loans 19.47 - - 7.00 - 7.75 -

Credit riskCredit risk refers to the risk primarily deal with the trade account receivables. However, since the majority

of sales are supplied to creditworthy customers, the Company does not anticipate material losses from their debtcollection.In the case of recognized account receivables, the carrying amount of account receivables recorded in thebalance sheet represents maximum exposure to credit risk.

Fair valueThe managements believe that the fair value of the Company’s financial assets and liabilities does not

materially differ from their carrying value.20. RECLASSIFICATION OF ACCOUNTS

Certain accounts in financial statements as presented herein for comparative purpose have been reclas-sified to conform with the current year classifications, with no effect on the net profit or shareholders’ equity aspreviously reported.21. APPROVAL OF FINANCIAL STATEMENTS

The financial statements have been approved by the board of directors of the Company on February 23, 2008.


Annual Report 2007

Remuneration of the Auditor

During the fiscal year ending December 31st, 2007, the Company paid the remuneration to Company’sAuditor, A.M.T. & Associates, in the amount of Baht 902,190.00 which consisted of audit fee of Baht 660,000,restatement fee of Baht 150,000 and other related expenses such as traveling and miscellaneous expenses, etcof Baht 92,190.00. In addition to the said remuneration, the Company had no other obligation to pay the Auditor,the Audit Firm of the Certified Public Accountant and individual or business relating to the Auditor or the Audit Firmof the Audifor.


Annual Report 2007

Name : บริษทั บอดี ้โกลฟ (ประเทศไทย) จำกดั (มหาชน)Body Glove (Thailand) Public Company Limited

Type of Business : The main business lies in readymade clothing andaccessories for retail industry, i.e., back pack, shoulderbag, traveling bag, wallet, pencil case, cap, socks, etc.,under the trademark of “Body Glove” and distinctivelyrecognized “Hand Device” black on yellow background.

Head Office Address : No. 299/9 Moo 7 Phaholyothin Road, Anusaowaree,Bangkhen, Bangkok 10220

Registration No. : 0107550000106

Website : www.bodyglove.co.th

Telephone: : 66 (0) 2972-3460

Fax: : 66 (0) 2972-3479

Capital as of December 31st,,2007Authorized Capital : Baht 80,000,000 (Share Capital) 80,000,000 shares , par value

Baht 1.00)Paid up Capital : Baht 80,000,000 (Share Capital) 80,000,000 shares, par value

Baht 1.00 )


Annual Report 2007

References

(a) RegistrarThailand Securities Depository Company LimitedCapital Market Academy Building, 2nd Floor, 2/7 Moo 4 (North Park Project)Vibhavadi-Rangsit Road, Tung Song Hong, Laksi, Bangkok 10210Telephone: 66 (0) 2596-9000 Fax: : 66 (0) 2832-4994-6

(b) AuditorsMrs. Kesari Narongdej Certified Public Accountant No. 76Mrs.Natsarak Sarachanunjeen Cetfified Public Accountant No. 4563A. M. T. & Associates491/27 Silom Plaza, Silom RoadBang Ruk, Bangkok 10550Telephone: 66 (0) 2234-1676 Fax: 66 (0) 2237-2133

(c) Legal ConsultantMr. Pradit SahachaiyanInternational Legal Counsellors Thailand18th Fl., Sathorn City Tower,175 South Sathorn Road, Tungmahamek,Sathorn, Bangkok 10120Telephone: 66 (0) 2679 – 6005 Fax: 66 (0) 2679 - 6041

bgt 07

Documents

body glove brand

core brand body glove

strong performance

targeted customers

important connection

strong commitment

symbol bgt

strong connection