-translation from thai text- contents part i : executive summary...

-Translation from Thai Text-

Contents

Page Part I : Executive Summary 1 Part II : Security Issuing Company 2

1. Risk Factors 3 2. Scope of Business 4 3. Description of Services 12 4. Research and Development 20 5. Assets employed in the conduct of business 21 6. Future Plan 23 7. Legal Dispute 24 8. Capital Structure 25 9. Management 26 10. Internal Control 37 11. Intercompany Transactions 39 12. Operating Results and Financial Standings 49 13. Other Information 59

Part III : Certification of factual accuracy 60 Attachment 1 :Details on Executive and authorized managers of the company 62 Attachment 2 :Details on directors of subsidiaries and associated company 66 Attachment 3 :Others 67

Form 56-1-07 Pico (Thailand) Plc.

Page 1

- Translation from Thai Text-

Part I : Executive Summary

Pico ( Thailand) Public Company Limited is a member of the worldwide network of Pico Far East Holding Limited (Pico Far East), a world class leader in the trade show and exhibition with 30 branches in 26 countries.

Face to face marketing through event marketing such as trade show, product launch and knowledge communication such as museum display is the company’s principal line of business. The main objective is to effectively communicate the customer’s message to the target audience.

• Adjustments to accommodate increased market competition.

• Research and human resources development to improve product Quality and delivery process.

• Strict adherence to good governance. transparency and responsibility to social.

• Future policy setting to accommodate changes.

Principal products: Event marketing, Knowledge communication and subsidiaries and associated companies

Tracking and situation forecasting with specific strategic changes. To reduce operational risks.

Face to Face marketing

Message

Political Risk, Economic Risk, Changes in customer’s expectation and social value

Target Group

Past strategic changes have permitted us to maintain our core business turnover at the same level as in the previous year. Profitability decline is attributed to our investment in organizer business , increased personnel training expenses and investment in additional operating processing system.

Our 2007 revenue of Baht 1,042 million is 6.3% down from the previous year. Net income of

Baht 50 million is also down 29%.



Part II : Security issuing company Company Name : Pico (Thailand) Public Company Limited Principal Business : Management of event marketing activities. Integrated

Business / brand awareness promotion, knowledge communication business through events such as trade show, product launch, decoration, multimedia presentation, museum, learning centers. Customers include corporations, major government agencies, and sponsors of major projects at the national level.

Address : 10, Soi Lasalle 56, Sukhumvit Road, Kwang Bangna, Khet Bangna, Bangkok 10260

Corporate Registration : Bor Mor Jor. 0107546000296 Telephone : 0-2748-7007 Facsimile : 0-2745-8521 / 0-2748-7591

Web Site : www.picothai.com

Page 2


Page 3


1. Factors Risk

Risk factors that may affect the company’s operation are:

Risk management Due to the uncontrollable nature of these risks efforts are directed toward: • Close tracking and

assessment of situation • Minimizing potential

adverse effects by altering strategic objectives to reduce risks.

Risk Factors management To minimize risks facing operation the followings are adopted: • Integrated business

approach from concept generation to project organizing and from upstream to downstream business.

• To increase the market

share from overseas to reduce risk from uncertainty of local market.

Politics Political instability and southern unrest have an adverse effect on investment.

Economy External economic factors such as the sub- prime debacle, the non performing assets and unsettled oil prices

Clients Political/economic instability may delay investment decision

Social Economic slowdown may increase crime rate and reduce confidence.



2. Business Operation 2.1 Historical development and major changes

Background

Pico (Thailand) Public Company Limited was formed in 1981 as a joint venture between Thai investors led by Mr. Pised Chungyampin and Pico Art International Pte Ltd. (“Pico Art”) of Singapore, a world class leader in the design and construction of the trade show and exhibition business. The joint venture was named Pico Thai Exhibition Contractor Co. Ltd.

Subsequently, Pico Art became listed on the Hong Kong Exchange under Pico Far East Holding Limited (“Pico Far East”) with business expansion covering the entire value chain. Additional investments were also made in the real estate and construction materials. Currently, Pico Far East operates 30 branches in 26 countries.

Changes and development

Pico International Enterprise (Thailand) Co., Ltd. was formed 15 March 1992 with changes in capital structure and shareholding to accommodate increased challenges. Capital was at Baht 15 million with Pico Far East Holding through Pico Art at 49% and Thai investors at 51%.

PX System Co., Ltd. was established in 1995.

Changes made to accommodate strategic objectives Of Pico Thailand Public Co., Ltd.

Multi Designs Co., Ltd. was established in 1995.

Artcom Graphic Co., Ltd. was established in 1996.

Inkjet Images (Thailand) Co., Ltd. was established in 1996.

Name has been changed to Pico (Thailand) Co., Ltd., and registered as a public company. Capital also increased to Baht 65 million.

Became listed company as Pico (Thailand) Public Co., Ltd. in the Market for Alternative Investment (MAI) of the SET on 19 April 2004.

Registered capital increase from Baht 65 million to Baht 115 million on 25 February 2005.

Page 4



2.2 Overview of the business of the company, subsidiaries and associated companies

Pico (Thailand) Public Co., Ltd. main business is in the face to face marketing business which covers marketing events that allow direct contact with 2 ways communication. Our growth form the trade show and exhibition business has been expanded to cover greater scope and service model in line with the changes in the market and client’s expectation.

The company has 3 principal services: 1. Event marketing 2. Knowledge communication 3. Others

Below illustrates our past work in the face to face marketing concept:

Event Marketing Knowledge Communication

Trade Exhibition (B2B)

Bangkok International Motor Show Bangkok International ICT Expo 2007

EDUCA 2007, Bio Asia 2007

Trade Exhibition (B2C)

National Science and Technology Fair 2007

Event Exhibition/Road Show

Road Show of auto industry : Mercedes Benz, Toyota Yaris, Chevrolet

Launching of museum exhibits

Permanent Exhibition

BLCP Visitor Center, IRPC Visitor Center

The National Discovery Museum, The second Children museum, and The Rama VII museum

Organizer

Bangkok International ICT Expo 2007

EDUCA 2007, Sign Asia, Media Asia

Others (Tents, POPs) POPs of Nokia, Sony Ericsson,

Temporary building for huge exhibitions

Provide large temporary tent to exhibit organizers, Education mobile exhibits.

From the above it is clear that both event marketing and knowledge communication cover

all aspects of face to face marketing. Experience and readiness are necessary to offer an integrated services approach to the business.

Page 5



Principal Business Operation

Overview: Research, select and design a process to communicate customer’s message to the target market group. Accurate information must be received by the target group of customer with desired response in line with their marketing plan.

Changes and past year’s operation: The company entered into the new area of business by generating and organizing our own show to cover from upstream through downstream of exhibition business, e.g. Bangkok International ICT Expo 2007, Sign Asia and Media Asia

Event Marketing

Future direction: To expand the business through generating and organizing our own shows together with going overseas.

Overview: Create an effective knowledge communication to a target group to increase learning and understanding so as to add value of their knowledge base.

Changes and past development: Similar to the event marketing, we have adopted the same integrated approach from concept generating to organizing the exhibition of EDUCA 2007.

Knowledge

Communication

Future Direction: Again as in the event marketing, we plan top grow on the current approach and to increase our overseas expansion.

.

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Page 7

The business of subsidiaries and associated companies

Remark : During 2007, Pico (Thailand) Plc., sold investment in BEC Tero Exhibition Co., Ltd.


Subsidiaries and associated companies were formed to provide variety of services

To create, design and supply of innovation, electronic medias for exhibition

To design and installation of graphic

To provide the facilities for event marketing e.g. booth rental in exhibition

To organize the trade exhibition and related business

Affiliated Company : Design Lab MISC Company Limited

Subsidiary company : Multi Designs Company Limited

Affiliated Company : Inkjet Images (Thailand) Company Limited

Subsidiary Company : Artcom Graphic Company Limited

Subsidiary Company : PX System Company Limited

Affiliated Company : Ibrix Company Limited


Page 8


Company Structure/ subsidiaries and associated companies as at 31 October 2007

Pico (Thailand) Public Company Limited

Inkjet Images (Thailand) Co., Ltd.

22.22%

Affiliated CompaniesSubsidiary Companies

Creative, design and supply of innovation in exhibition, marketing activities and

permanent exhibit.

All types of graphic design and production

Design and construction of

booths in an exhibition hall

Multi Designs Co., Ltd. 59.99%

Artcom Graphic Co., Ltd. 99.99%

PX System Co., Ltd. 89.99%

Graphic design and production of large-

format printing

Trade Exhibition Specialized design company such as

architectural, interior decoration

Ibrix Co., Ltd. 40.00%

DesignLab MISC Co., Ltd.

20%


Page 9


Business operation of subsidiary companies 1. PX System Company Limited (“PX”)

Shareholders % Pico (Thailand) Plc. 89.99 Mr. Chuchai Kasemsuk 10.00* Others 0.01Total 100.00 Capital Registration : 11.0 Million Baht Business Type : Design and construction of booths in an exhibition hall. Signs and

billboards and other structural works in the merchandise exhibition or display. Services also cover related construction such as flooring and performing stage and props.

2. Artcom Graphics Company Limited (“Artcom”)

Shareholders %Pico (Thailand) Plc 99.99 Others 0.01Total 100.00 Capital Registration : 10.0 Million Baht

Business Type : All types of graphic design and production for interior and exterior displays e.g. billboards, automotive stickers etc.

3. Multi Designs Company Limited (“Multi Designs”)

Shareholders % Pico (Thailand) Plc. 59.99 Mr. Foo Kwee Chong 20.00*

Others 20.01 Total 100.00 Capital Register : 4.0 Million Baht Business type : Creative, design and supply of innovation in exhibition, marketing activities and permanent exhibits.

Business operation of associated company

1. Inkjet Images (Thailand) Company Limited (“Inkjet”) Shareholders %Master Ad Plc. Inkjet Images (M) Sdn.Bhd. Co.,Ltd. Pico (Thailand) Plc. Others

33.33 22.22

22.22 22.23

Total 100.00

Capital Register : 6.0 Million Baht Shareholders : Master Ad Plc. is a billboard structural builder. This is a continuing

business of graphic printing works. Inkjet Images (M) Sdn. Bhd. Ltd. is a Malaysian company engaged in the same graphic and printing business like Inkjet.

Business Type : Graphic Design printing. Billboards


Page 10


2. IBRIX Co., Ltd. (“IBRIX”) Shareholders %Industrial Design Network Co., Ltd.. Pico (Thailand) Plc. Others

59.99 40.00 0.01

Total 100.00

Capital Register : 5.0 Million Baht Shareholders : Industrial Design Network Co. Ltd. is a industry consultant serving

clients who are looking to improve product design, packaging and the design department to international standard.

3. DesignLab MISC co., Ltd.

Shareholders %Mr. Nopadol Limwatanakul Pico (Thailand) Plc. Others

79.99* 20.00 0.01

Total 100.00

Capital Register : 2.0 Million Baht Shareholders : Mr. Nopadol Limwatanakul is an experienced architect in design

solutions for exhibition and interior design. He was the design director at DesignLab during 2000- 2004.

Remarks: 1. * Member of the management of subsidiary companies in accordance with Pico’s policy 2. The above shareholding are as at October 31, 2007 3. During 2007, the company has already sold the investment in BEC Tero Exhibition Co., Ltd.


Page 11


2.3 Revenue Structure for the past 3 years ended 31 October Past 3 years revenue structure for year ending 31 October

2007 2006 2005 Revenue of the company % of

share holding

MB % MB % MB %

Pico (Thailand) Public Co., Ltd. - Event marketing business1

- Knowledge communication business2

- Others services - Income from subsidiaries - Other income

508.35276.32116.35

0.0033.91

54.3729.5612.440.003.63

602.66261.3884.990.009.91

62.85 27.26 8.86 0.00 1.03

459.30 108.19 44.51 10.10 4.21

73.3317.277.121.610.67

Total 934.93 100.00 958.94 100.00 626.31 100.00 PX System Co., Ltd.

89.99 94.14 100.00 65.87 100.00 71.59 100.00

Total 94.14 100.00 65.87 100.00 71.59 100.00 Artcom Graphic Co., Ltd.

99.99 32.07 100.00 51.56 100.00 35.31 100.00

Total 32.07 100.00 51.56 100.00 35.31 100.00 Multi Designs Co., Ltd.

59.99 24.09 100.00 20.09 100.00 20.08 100.00

Total 24.09 100.00 20.09 100.00 20.08 100.00

Remarks: 1. Income from the trade shows exhibition is recorded in the "Event Marketing Business " 2. Income from the permanent exhibition and museum exhibits is recorded in the " Knowledge Communication

Business"

2.4 Business objectives 4 key business objectives of Pico (Thailand) Public Company Limited are: 1) Maximize returns to our shareholders. 2) Create value with measurable results to services rendered to our customers. 3) Value the contribution of our employees with a fair compensation and benefits program, which

will enhance our ability to recruit future talents. 4) Be a good corporate citizen with a strong commitment to social responsibility


Page 12

- Translation from Thai Text-

3. Description of Services The company has 3 principal services:

1. Event Marketing 2. Knowledge Communication 3. Others

3.1 Service description

3.1.1 Event Marketing The scope of business covers the marketing communication for business provider

in all areas of the business value-chain such as:

• Product Owners • Planner • Trade Show Organizer, Event Owner • Event Organizer, Show Managers • Project management • Event Service Providers • Logistic & Supporting


Page 13


Pico’s service is aimed directly at the product owner and captures all stages of production from project conceptualization, design, construction and installation of the event. This comprehensive service package may include transportation. The customer’s objective and message that need to be communicated to the target group which be divided into 4 main areas: Business to Business (B to B) Event marketing between those who are business operators. Example is trade show/exhibition. Business to Consumer (B to C) Event marketing between business operators targeted at their consumers such as product launch, concerts/entertainment all of which is aimed at creating and bolstering our customer’s relationship with the consumers. Government to Consumer (G to C) Event marketing featuring communication between the government sector and the public such as the public event on government’s achievements. Corporate Identity (CI) Event marketing designed to create and bolster corporate image of a business such as a new image launch.

Significant Projects in 2007 Bangkok International Motor Show 2007eg. Booth and exhibition for Mercedes Benz/

Chevrolet/ Ford/ Toyota/ Subaru/ Kiatnakin

Road Show for auto industry; Mercedes Benz, Toyota Yaris, Chevrolet, Ford

“Boon Rawd Brewery” booths in “NBWA” in Las Vegas, USA and “ANUGA” Cologne, Germany

Trade shows of Thailand Convention Exhibition Bureau (TCEB) in Germany, Spain, Thailand, Australia and USA.

Others BLCP Visitor Center Road shows for Thailand Elite Card of Tourism Authority of Thailand in Taiwan and

Korea Yaris Dealer Launching for DELPHYS HAKUHODO Bangkok International Motor Show 2006 for Mercedes Benz, Chevrolet, Ford, Isuzu,

Volvo, THAIRUNG and CARIO Road show for Nokia (Thailand) in “Nokia on Wheel” and “Nokia N-series Road show” Commemorative Pavilion Exhibition Commemorating the 60th Anniversary of His

Majesty the King’s Accession to the Throne for Boon Rawd Brewery Co., Ltd. In commemoration of The 60th Anniversary Celebration of his Majesty the King’s

Accession to the throne, the design and arrangement for graphic waterfall, sufficiency economy display/exhibit and the history of the Chakri Dynasty.

3.1.2 Knowledge Communication

We provide services to the public and private sector that need to communicate knowledge to the public in the form of temporary exhibition, semi permanent exhibition, permanent exhibition, visitor center, learning center and museum.

Our services are built upon how to effectively deliver the knowledge to the public. Which means that, beside premise design and construction, we are also responsible in creating the contents of the learning program appropriate to the client’s role. Here we need to focus on the visitor or learner, the appropriateness of the text with the goal that the visitor will gain an in-depth learning experience and be able to use the knowledge gained to further his knowledge quest to the fullest extent.


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Our operation covers each step of the project’s process from project outline, topic research, learning program, exhibition design, production and the subsequent museum management.

o Significant Projects in 2007

• The National Discovery Museum

• The second Children Museum, Bangkok

• The Rama VII museum, Larn Luang

• EDUCA 2007

• Bio Asia 2007

• National Science and Technology Fair 2007

Others

• Design and installation of indoor display for H.R.H. the Princess Mother’s archive for the Mae Fah Luang foundation and the Tourism Authority of Thailand

• Rama VII Museum with display depicting life and activities history of Rama VII at Rama VII Institute, Larn Luang

• Design and installation display for H.R.H. the Princess Mother’s archive for the Mae Fah Luang Foundation and the Tourism Authority of Thailand.

• Historical archive of the Bangkok University’s Surat Osathanugraha library. Rangsit Campus

• Museum of the lignite mining in honor of King RamaVII at Mae Moh Mine, Lampang.

• Royal Flora Ratchaphruek 2006 International Horticultural Exposition for His Majesty the King, Chiengmai for Boon Rawd Brewery Co., Ltd.

3.1.3 Others

Beside the services mentioned, we have other services to support and facilitate the customer’s business. • Rental of large air-conditioned tents from 1,000 sq.m. up to more than 20,000

sq.m. This serves to provide additional temporary space to exhibition organizers or large projects requiring significant covered space.

• Graphic design for signage and banner projects used in advertising and/or public relation work.

• Furnishings to complement the counter display as product point of purchase. These are eye catching units placed in the exhibition booth or department store to increase sale in accordance with the target’s marketing plan

• Interior design of offices and corporate identity.

Significant Projects 2007

• Temporary Tents : Thai Metalex 2007

• POPs for Nokia, Sony Ericsson • Decoration of Dealer shop for “ACER” nationwide


Page 15

-Translation from Thai Text- Others • Large tents rental : Bangkok International Motor Show 2001- 2007 at BITEC • Furnishing of Siemens retail shops • Corporate identity design for financial institutions • Road shows for Chevrolet using large tents • Interior design for retail banking of Land and Houses Retail Bank Plc. • Fuel economy races as an event marketing during Ford road shows

3.2 Market and competition

Market and competition Competition: Increased

competition resulting from greater economic interdependency.

Market Description: Higher competition

Overview • Despite improving signs for

recovery in 4th Quarter, unsettled external factors continue to prevail such as Sub prime situation.

• Free trade policy creating larger market place with entry of more foreign players. Conversely experienced and strong capitalized Thai companies can expand overseas.

Competitive Factors • Competitors: More

open economy means more foreign players

• Risks: Instability resulting in the decrease of marketing activities.

Market Share : Due to the lack of reliable institutional data, the company’s market share cannot be accurately stated.

The company’s operation in light of stated market description and competition

• Increased overseas marketing • Focus on niche market despite increased competition opportunity exists in

this segment which needs Pico’s specialized expertise.


Page 16

-Translation from Thai Text- • Customer Profile

Our customers are those with a track record of consistent growth with an international aspiration. These are state and/or state supported companies and private operation which need to increase market awareness/penetration and turnover. They are divided into 2 categories as follows: 1. State enterprise and other government agencies. The public sector regularly conducts events to publicize the workings of its units in order to increase public awareness and understanding. This includes also the promotional activities for government supported industries aimed at sustaining the economic growth. The agencies that are responsible for such activities are: the Ministry of Culture, the Ministry of Information and Communication Technology, Ministry of Science and Technology, Ministry of Education and the Department of Export Promotion. 2. The private sector:

The automobile sector. This group emphasizes event marketing as it provides a venue for the consumer to make the decision immediately.

The telecommunication sector. This is a business characterized by high growth and intense competition and pays a significant interest in the event marketing / communication.

The energy sector. This group has a record of consistent growth and recognizes the importance of corporate social responsibility. It regularly conducts activities aimed at increasing the public understanding of its organizations.

The financial institution sector. The retail banking business is characterized by intense competition with constantly changing marketing strategy to meet customer’s demand. Event marketing is therefore the preferred choice of communication for this industry.

Other sectors. With the continued economic growth the consumer product, business also needs to communicate more to meet the challenges of greater competition e.g. the apparel, food and jewelry industry.

The contribution of these various groups to our business is as follows

Income Portion Business Group 2550 2549

Million Baht

% Million Baht

%

1. State enterprises / Government 397 39.15 322 31.02 2. Private sectors - Automotive 254 25.05 364 35.07 - Telecommunication -Energy - Financial Institutions - Food & Beverage

65 0

28 12

6.41 0

2.76 1.18

45 60 60 29

4.34 5.78 5.78 2.79

- Others 258 25.45 158 15.22 Total 1,014 100.00 1,038 100.00


Page 17


• Our project management process

Direct Customer Contact: Our marketing team constantly tracks customer’s business and needs. Specific product/service package is then tailored and presented to customer to match his objectives and budget. If selected, the marketing team will pass on the package to the production department which will carry on with the customer.

Customer Relationship Management: We are committed to an international standard of excellence. Customer’s trust and complete satisfaction are foremost on our agenda. This assures us of repeat business.

Our group of companies reach the customers through :

Business alliances: Business alliances with the trade organizers and other players in the event marketing industry is a channel that provides a marketing channel to customer.

Customer’s recommendation: With over 20 years experience with international standard operation, we often receive referral business from our satisfied clients.

Pico Far East and the extensive worldwide network: With our Pico Far East affiliation and its extensive network in 26 countries we have direct access to various institutional names when they come to Thailand.


Page 18


3.3 Products Sourcing The keys step in our products sourcing process are as follows:

Study customer’s background/information.

Marketing Customer contact to determine their marketing and objective and requirements.

Conceptual design and operational plan.

Research on specific requirements of customer.

Realization of conceptual design, structure

or exhibition with support from subsidiaries such as Multi Designs Co., Ltd. or Design Lab MISC Co.,

Ltd.

Design

Budget and breakdown presented to client.

We will either do the construction or sub-contract out

to outside specialists with tracking on quality. We will perform the supervision and final survey before

handing over to client.

Construction

Once production is completed, we will commence to

build a stand by team to manage all aspects of the project to ensure of success e.g. publicity, cleaning and security. We will be in charge of these services until the end of

the project.

Project Management


Page 19


3.4 Work in Progress as at October 31, 2007

Undelivered works Total value (Million Baht)

1. Event marketing 164.23

2. Knowledge communication 70.23

3. Others 11.76

Total 246.22



4. Research and Development

Research and Development : Research and development The company’s R&D focuses on the enhancement of our capability to convey the professionalism in each line of business and utilize the knowledge to the upmost extent.

Personnel : Sending of personnel for training in and outside of the country and always on the lookout for overseas talents to join our team.

Business Structure : Adjustment of business model to keep abreast of the market and competition.

Products, Process, Equipment : Research and find ways to adapt new products and procedures to be used in individual projects e.g. the use of portable planetarium projector in simulating solar eclipses from the past to the future. Another example is the introduction of the three dimensional graphic waterfall used as prop in the project celebrating H.M. the King’s 60 years accession to the throne.

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5. Assets employed in the conduct of business 5.1 Land, buildings as at 31 October 2007

Details of the company’s land and building Land, Office building

Area

Type of rights

Net value (Baht) Encumbrances

1. Title deeds no. 216194-7 Soi Sukhumvit 105 (Lasalle

56) Sukhumvit Road, Bangna District, Bangna Sub-district Bangkok 10260

2. Office Building 10 Soi Lasalle 56 Sukhumvit

Road, Bangna District, Bangna Sub-district Bangkok 10260

3. Land Improvement

2 rai 200 sq. wah

4,097 sq. metre

Deeded outright owner

Outright owner

Outright owner

43,700,000

32,649,224

1

None

None

Details of other assets

Assets Type of ownership Net book value as at 31 Oct 2007

(Baht)

Encumbrances

Vehicles

Outright owner

355,987.00

None

Vehicles On hire purchase 7,340,767.00 65,227 Vehicles under Hire Purchase from The Siam Industrial Credit Public Co., Ltd.

Office Equipment

Outright owner 4,399,355.00

1,693,664

1,759,700

2,434,470

1,287,706

None

GE Capital Auto Leasing Public Co., Ltd. TISCO Leasing Co., Ltd. BMW Leasing (Thailand) Co., Ltd. Ayudhya Capital Lease Co., Ltd.

Computer Outright owner 5,703,222.00 None Equipment and machinery


None

Office decoration


None

Operating accessories


None

Page 21


-Translation from Thai Text- 5.2 Intangible assets

The company pays an annual royalty equals to 2.53 % of total revenue to Pico Art International Pte. Ltd. (“Pico Art”). This is in connection with an “Offshore Services Agreement and “Intellectual Property License Agreement” dated 10 July 1992 and amended 3 November 2003. Under this agreement, the company is entitled to use the logo, trade name, technology and new innovation of Pico Art International Pte., Ltd. in its conduct of business. This privilege will continue, irrespective of Pico’s Art’s shareholding in the company, provided that the royalty payment is paid until the company terminates the agreement. Additionally, Pico Art agrees not to compete for business in Thailand directly or indirectly. The agreement does not preclude Pico to serve foreign clients in a foreign country provided that it is a direct request by the clients. 5.3 Investment Policy

Pico’s policy is to invest in a business operation that will complement and enhance its ability to deliver an integrated product offering e.g. a design company.

Pico invested in PX System Co., Ltd. and Multi Designs Co., Ltd. in 1995 and Artcom

Graphic Co., Ltd. and Inkjet Images (Thailand) Co., Ltd. in 1996. Additional investments were made in 2006 in IBRIX Co., Ltd., and DesignLab MISC Co., Ltd. in order to extend our product range. These investments permit Pico to offer a comprehensive and integrated product/service to clients.

In the management of these companies, Pico is represented on the executive board and

participates in the setting of policy and the implementation thereof. The subsidiaries and joint ventures are encouraged to seek outside businesses to lessen dependence on Pico with no greater than 30% of turnover being “captive” business. This will encourage independent growth and reduce the overall operating risks.

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6. Future Projects

Future projects are drawn up using existing market factors and competition with a focus on expected changes in the market place.

Expand our expertise to overseas market.

Current Situation :

Political and economic risks, customer’s expectation changes and social values, all play a part in determining future projects;

Expand our integrated marketing approach covers concept generating to show organizing from upstream to downstream business. This is expected to generate significant benefits to the company in 5 years time.

Expand the scope and benefits return to the community especially on educational projects.



7. Legal Disputes

As of 31 October 2007, there are no outstanding legal disputes or litigation that may materially affect the performance of Pico group of companies.

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8. Capital Structure

8.1 Stock of the company

The company has a registered capital of Baht 115,000,000 with Baht 114,999,980 paid up divided into 114,670,000 common shares and 330,000 preferred shares at Baht1 par value.

Rights of common and preferred shares

With respect to receipt of dividend payment, the company’s bylaws establish no difference in rights between common and preferred shares. In voting rights, preferred shares will be subordinated to common shares. 10,000 preferred shares will count as 1 vote whereas one common share equals one vote. 8.2 Shareholders List of top ten shareholders as of 31 October 2007 Items Shareholders Share amount Portion (%)

1. Pico Art International Pte., Ltd. 46,000,100 40.12 2. Mr. Pised Chungyampin 29,003,138 25.29 3. Thai NVDR Co., Ltd 4,971,292 4.34 4. Citibank International Plc. (Luxembourg Branch) 3,020,000 2.63 5. Mr. Supawit Wattanphan 2,177,400 1.90 6. Mrs. Jiraphan Sathienpakiranakorn 2,000,000 1.74 7. Mr. Silchai Kiatpapan 1,536,985 1.34 8. Mr. Suwiphan Ditsayamolthon 1,276,138 1.11 9. Credit Suisse Singapore Trust account clients 1,160,000 1.01 10. Mrs. Asara Tulyathan 1,074,455 0.94

Total 10 major shareholders 92,219,508 80.42 Total minor shareholders 22,450,472 19.58 114,669,980 100.00 Remarks : 1 Chairman of the company is a director of Pico Art International Pte Ltd. 2,3 Be an executive director of Pico (Thailand) Public Co., Ltd.

8.3 Dividend Policy

Provided that there are no other needs such as major business expansion or an investment plan, the policy is to pay out 40% of net profit after taxes. With regard to the 3 subsidiaries PX System, Artcom Graphic and Multi Designs, the policy is the same at 40% of net profit after tax provided that there are no business expansion needs.

Page 25


-Translation from Thai Text- 9. Management

9.1 Company structure as at 31 October 2007

Page 26

Board of Directors

Executive Committee

Executive Chairman

Mr. Pised Chungyampin

Senior Executive Vice President Event Marketing & Special ProjectMr. Chokchai Vatcharanirunkul

Chief Executive Officer

Mr. Silchai Kiatpapan

Chief Financial Officer Miss Nitida Thamasoontra

Audit Committee

Executive Vice President Event Marketing I

Miss Supaporn Sawangjitt

Human Resources Manager General Affairs

Miss Teerisara Jumpawan

Vice President Strategic Marketing

Mr. Pornchai Tangsunawan

Company’s Secretary

Deputy Finance Manager

Accounting Manager Accounting

Miss Amara Banditakon

Vice President Event Marketing II

Mr. Chayaphol Kalapaphongse

General Manager Event Marketing III

Mr. Sukit Jirayupapong

General Manager Special Project I

Mr. Thitinan Nantanapramoth

General Manager Special Project II

Mr. Petai Panmanee

General Manager Event Marketing I (Team VW)

Mr. Thitipongdej Rongkawongse

General Manager Event Marketing I (Team YZ)

Miss Suthira Silakote


Page 27

-Translation from Thai Text- Organization Structure of Directors There are 3 boards in Pico’s structure. 1. The Board of Directors

As of 31 October 2007 there are 9 members of the Board of Directors. 5 of whom are non management and 3 are independent directors. 6 Board of directors’ meetings were held in 2007 with principal agenda prepared in advance throughout the year. The agenda and related materials were distributed to the directors to study prior to the meetings. Consideration is given to the maximum benefits to the shareholders and all stakeholders in the deliberation of issues. Adequate time is provided to the discussion and directors are encouraged to present their opinions freely. The chairman is responsible for time allocation in the meetings.

1. Mr. Chia Song Heng Chairman 2. Mr. Pised Chungyampin Vice Chairman 3. Mr. Silchai Kiatpapan Director 4. Ms. Nitida Thamasoontra Director 5. Mr. Chong Mang Yong Director 6. Mr. Viriya Pholpoke Director and Executive Advisor 7. Mr. Chaiyod Bunyagidj Independent director and Chairman of the audit

committee 8. Mr. Sern Vithespongse Independent director and audit committee member

9. Mrs.Sasitorn Phongsathorn Independent Director and audit committee member With Miss Nitida Thamasoontra as the secretary to the Board of directors

Terms of office

Members of the Board serve a period of 3 years. 1/3 of all directors must retire by rotation with the longest serving directors retiring first. Retiring directors may be reelected to serve another term.

Directors authorized to sign and bind the company:

Directors authorized to sign and bind the company are Mr. Pised Chungyampin together with Mr. Chia Song Heng or Mr. Silchai Kiatpapan or Miss Nitida Thamasoontra or Mr. Chong Mang Yong, constituting 2 signatures with the company’s seal affixed. Scope of authority of the Board of Directors 1.1 The Board of Director’s functions

The Board of Directors shall act to ensure maximum benefits from the conduct of the company’s business by using its knowledge and experience to the fullest capability. It shall conduct its role according to the company’s memorandum of association and bylaws with due care and discretion to protect the rights of and be responsible to the shareholders.

1.2 Establishing the company’s objectives, business direction and policy The Board is charged with the setting of appropriate policy and business direction of the company except the policy or business direction which requires shareholders’ approval.

1.3 Appointment and Supervision of the Executive Committee The Board is empowered to appoint a committee consisting of directors as it deems appropriate to act as an Executive Committee to manage on its behalf. In this respect the Board of Directors at its meeting 1/2003 held on 29th August 2003 resolved to appoint an Executive Committee and clearly established its scope, power and duties. The Board of Directors will be responsible for the supervision to ensure that the Executive Committee effectively carries out the approved policies.

1.4 Appointments and delegation of authority to other persons.


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The Board of Directors may appoint any other person to conduct the company’s business under its supervision or it may delegate authority to said person as it deems appropriate. The time period of this authority delegation shall be set as the Board deems appropriate and the Board may rescind, remove, alter or modify such delegation. Such appointment or delegation shall fall under the following rules: (1) Any appointment and authority delegation shall not be bestowed on person(s) with a vested

interest in or is in conflict with the company or its subsidiaries. (2) Person(s) so appointed and delegated shall not be able to approve transactions that involve

themselves or persons that may be in conflict with, possessing vested interest in or having any other potential conflict of interest against the company or its subsidiaries

(3) Appointment and delegation must be accompanied by a clear establishment of scope of authority, duty, and responsibility and must be in accordance with the resolution of the Board of Directors meeting attended by independent directors or members of the audit committee. In the case that such delegation of power is objected to by a member of the independent director or an audit committee member such objection shall be clearly recorded in the minutes of the meeting.

2. The Executive Committee

As of 31 October 2007, the company has 4 executive committee members. 1. Mr. Pised Chungyampin Executive Chairman 2. Mr. Chia Song Heng Executive Committee Member 3. Mr. Silchai Kiatpapan Chief Executive Officer 4. Ms. Nitida Thamasoontra Chief Financial Officer

Scope of duty and authority of the Executive Committee 2.1 To propose for the Approval by the Board of Directors the followings:

• Business objectives and direction. • Business strategy and policy. • Annual business plan and budget. • Organizational structure and management including details on selection, training,

recruitment and termination of employees. 2.2 Supervision and overseeing that the company’s business operation follows the Board’s

approved business strategy, policy and plan 2.3 Screening of business contractual obligations of the company, acquisition of assets or rights to

be used to the benefit of the company. This includes the setting up of negotiating processes in the closing of the said contracts.

2.4 Screening of fiduciary contracts, lending, borrowing and undertaking of guarantee by the company.

2.5 Acting on contract amendment and termination in accordance with the Executive Committee’s discretion.

2.6 To consider the profit and loss account of the company and the proposal of an interim or annual dividend payment to the Board of Directors for approval.

2.7 To engage in any other action in order to support the above or as may be delegated by the Board of Directors from time to time.

The foregoing duties and powers of the Executive Committee shall be under the law and the company’s bylaws. The Executive Committee shall not have the authority to approve transaction that its members or others may be in conflict with or possess a vested interest in or having any conflict of interest against the company or its subsidiaries. Should such a case arise, the Executive Committee shall refer the case for consideration by the Board of Directors.


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-Translation from Thai Text- Management: 6 senior management executive comprise the management team: 1. Mr. Pised Chungyampin Executive Chairman 2. Mr. Chia Song Heng Executive Committee 3. Mr. Silchai Kiatpapan Chief Executive Officer 4. Ms. Nitida Thamasoontra Chief Financial Officer 5. Mr. Chokchai Vatcharanirunkul Senior Executive Vice President / Event Marketing &

Special Project 6. Ms. Supaporn Sawangjitt Executive Vice President / Event Marketing I

3. The Audit Committee As of 31 October 2007, there are 3 members of the audit committee.

1. Mr. Chaiyod Bunyagidj Chairman of Audit Committee 2. Mr. Sern Vithespongse Audit Committee 3. Mrs. Sasitorn Phongsathorn Audit Committee Ms. Nitida Thamasoontra servicing as secretary to the committee

Qualifications of the independent directors 1) Holding less than 5% of the outstanding shares with voting rights in the company, subsidiaries,

associated companies or persons deemed to represent conflict of interest (including such persons described in code 258 of the Securities and Exchange Act B.E. 2535)

2) Having no part in management including not being a member of the employees, staff, salaried advisor or authorized management of the company, subsidiaries, associated companies or a person deemed to represent a conflict of interest during the past year.

3) Having no direct or indirect business relationship, benefits, stake in the company. This covers the financial and administration of the company, subsidiaries, associated companies or persons where conflicts could compromise independence.

4) Not being closely related to management, major shareholders of the company, subsidiaries, associated companies or persons who may be in conflict. Not also having been appointed as attorneys representing the interest of the directors or the major shareholders.

Scope of authority of the audit committee 1. Review to ensure that the company’s financial reports are correct and with adequate disclosure.

This is done through coordination with the external auditor and line management tasked with the preparation of quarterly and annual financial reports.

2. Review to ensure that the company has an adequate and effective internal control and audit process.

3. Review to ensure that the company’s operation is in compliance with the laws concerning securities and the Stock Exchange of Thailand (SET), the decrees of the SET or the laws pertinent to the company’s business.

4. Selection of the company’s auditor and set its remuneration to be proposed to the company’s Board of Directors to be forwarded to the shareholders for appointment.

5. Release a complete and accurate disclosure of intercompany transactions or other transactions that may be of conflict of interest in nature.


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6. Preparation of the audit committee’s report on its supervision of the company’s operation and to disclose this in the company’s annual report under the signature of the committee’s chairman.

7. Engage in any other functions as assigned by the Board of Directors. 9.2 Selection of Directors and Management Executives

The Company's selection process for directors is by the delegation of the chairman to the directors to assist in the search for an appropriately qualified person who is not held in contrary to the laws pertaining to the Public Company Act. The search focuses on the vision, basic qualifications and the extensive experience which will be beneficial to the business operation, moral and ethical values all of which must be in compliance with the code 68 of the B.E. 2535 Public Company Act and the pertinent announcements of the SEC. The selection made is to be submitted to the Board of Directors for further screening. There is no specific selection committee appointed.

Should a seat on the Board of directors become vacant for any reason the remaining members may elect a person they deem qualified to become a director and attend the following board meeting without calling for a shareholder’s meeting for ratification. This director will only assume the remaining tenure of the director whom he/she replaces only.

As for executive management position, the selection by the Executive Committee uses similar criteria and procedure. 9.3 Directors’ Compensation (1) Monetary compensation

Directors The 2007 Annual General Meeting of Shareholders held on 16 February 2007 approved

directors’ remuneration 2007 in the amount not exceeding Baht 6,000,000 and a special directors’ bonus for 2006 of Baht 1,000,000 with the disbursement to be decided by the Board of directors. This is effective from the date of the Annual General Meeting of Shareholders until otherwise changed by another shareholders’ resolution

Details of the director’s remuneration payment 1. Monthly compensation of Baht 5,000 each for 9 directors totaling Baht 540,000 per

annum 2. Meeting attendance allowance of Baht 15,000 per person per attendance. 6

meetings were held with a total of Baht 750,000 paid for the year. 3. Annual compensation for 3 audit committee members at Baht 200,000 each payable

on a quarterly basis for a total of Baht 600,000 for the year. 4. Directors’ bonus

Given the responsibility of the 3 audit committee members and executive advisor, the Board of Directors voted to approve a bonus payment of Baht 3,110,000 to these 4 members. The 2007 Annual General Meeting of Shareholders held on 16 February 2007 voted

to approve a special bonus to these 4 directors for 2006 to the amount of Baht 1,000,000. The total bonus amounts to Baht 4,110,000

Total directors’ remuneration Baht 6,000,000

Monetary compensation to directors in 2007 is in the form of monthly compensation, meeting attendance, audit fee and bonus totaling Baht 6,000,000 as per the following details:


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Director compensation Name-Surname

Monthly Fee (person/year)

Attending Fee Audit committee

Bonus

Total (Baht/Year)

Special bonus 2006

Grand Total

1. Mr. Chia Song Heng 60,000 75,000 135,000 135,000

2. Mr. Pised Chungyampin 60,000 90,000 150,000 150,000

3. Mr. Silchai Kiatpapan 60,000 90,000 150,000 150,000

4. Ms. Nitida Thamasoontra 60,000 90,000 150,000 150,000 5. Mr. Chong Mang Yong 60,000 60,000 120,000 120,000

6. Mr. Viriya Pholpoke 60,000 90,000 770,000 920,000 250,000 1,170,000

7. Mr. Chaiyod Bunyagidj 60,000 90,000 200,000 800,000 1,150,000 250,000 1,400,000

8. Mr. Sern Vithespongse 60,000 90,000 200,000 770,000 1,120,000 250,000 1,370,000

9. Ms. Sasitorn Phongsathorn 60,000 75,000 200,000 770,000 1,105,000 250,000 1,355,000 540,000 750,000 600,000 3,110,000 5,000,000 1,000,000 6,000,000

Management In 2006 monetary compensation of Baht 33,952,960 was paid to 9 management executive

members and 1 executive advisor in form of salary and bonuses. In 2007 this amount was Baht 30,404,400 paid to 6 management executive members and 1 executive advisor.

(2) Other compensation

-None- 9.4 Good Corporate Governance

The company’s policy is for its members of the Board to comply with the regulations of listed companies with respect to the duty and responsibility of directors. Subsequent to the company’s transformation to a public company, the Board of Directors and the Audit Committee together established supervisory guidelines in overseeing the company’s operation and to clearly define the scope of authority of directors and management. This covers compliance to the law, memorandum of the association, bylaws and the resolutions of the shareholders with honesty, integrity and utmost care to ensure maximum benefits to the company. The directors are also charged with establishing the company’s policy and business direction and to ensure that the set policy is followed by management.

Pursuant to the guidelines established by the SET for listed companies in 2006 on operation oversight 5 principal areas are established:

1. Rights of Shareholders

Shareholders are the rightful owners of the company whose rights and privileges are recognized and respected. These are: shares buy/sell, shares transfer, profit sharing, rights to attend meetings, participate in agenda deliberation and voting.

The Board of Directors shall arrange a shareholders’ meeting with a 7 days advance notice to all shareholders. Shareholders will be informed in writing of all agenda together with the directors; opinion and recommendation for each of the agenda presented. During the meeting the shareholders will have the rights to freely question and express their opinion during the deliberation of each issue. Minutes of the meeting will be recorded accurately and in full covering questions and answers for shareholders’ later perusal. 2. Equal Treatment to all shareholders.

Each shareholder or group of shareholders is treated equally whether they are management or non management, majority or minority shareholders or foreign shareholders:


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- Shareholders unable to attend meeting may appoint proxy holders to attend and vote on their behalf.

- To ensure transparency and accountability - Shareholders who are executive committee members shall not add unnecessary agenda to the

meeting especially significant issues where shareholders need time to study the motion prior to making a decision.

3. Stakeholders

All stakeholders are equally treated to foster a harmonious relationship leading to the growth and prosperity of the company in the long run.

The followings are undertaken: Employees: The Company is fully cognizant that employees are its most important

asset and the key to its growth. Training programs are established and on going to develop the best talents in the business. Competitive compensation package and benefits such as provident fund, life and health insurance are periodically reviewed to ensure that we remain competitive in the market. Feedbacks are encouraged so that management can learn of grievances and work toward a mutually acceptable resolution.

Trading partners: Honor the market practice and contractual obligations in dealing with our trading partners

Customers: Maximum benefits to the customers through the best and highest service quality, product standard, responsive to needs and respect of customer’s privileged information.

Competitors: We believe that competition induces creative development and we abide by the rules of a good competition. We will not resort to predatory practices on our competitors.

Creditors: We believe that contractual obligations must be honored to foster a mutually beneficial relationship in the longer term.

Community: We are aware of our duty and responsibility to the community and strive to ensure that the rights of all stakeholders are protected through strict compliance to the law and regulations. In cooperation with General Motor Sales (Thailand) and Chevrolet Sales (Thailand) we have built 15 libraries for provincial schools with 4 completed and handed over: Banrongdu School in Petchaboon, Baanphonoi School in Trang, Huahis Rajbamrung School in Karasin and Baan Huay Plu Nang School in Trang with additional 11 to be completed throughout Thailand.

4. Disclosure and Transparency.

We are committed to disclosure of information financial or otherwise to the public through legally sanctioned channels: the SET, Form 56-1, annual report and company’s website, the periodic meetings with market analysts. We believe that through these channels shareholders will be fully informed. Additionally, shareholders and the general public can always access information through our investor relationship manager. A shareholders’ visit was conducted on 20 June 2007.

Miss Nitida Thamasoontra, our Chief Financial Officer is our appointed investor’s relationship manager. She can be contacted at 02-748-7007 or email: [email protected].

mailto:[email protected]


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-Translation from Thai Text- 5. Directors’ Responsibility

The Board of Directors - There are 9 members of the Board of Directors with one third or 3 being independent

directors pursuant to the regulation stipulated by the SET. Directors serve for a period of 3 years with 1/3 of longest serving members retiring in annual rotation.

- 4 directors are appointed as executive directors responsible for oversight to ensure that the operation meets with established objectives, direction, plan and annual budget. The responsibility of the executive board and the board of directors is clearly delineated. The Board of Directors is responsible for the oversight of the executive board in carrying out the established policy.

Additionally, an audit committee is appointed with 3 independent directors with oversight objective on the company’s operation. This is to ensure that the planning and decision making are justified and not dominated by the executive directors or by any one group.

- Non management directors The members of the Board of Directors are elected so that no person or group of persons has the sole authority in decision making. This is to foster effective management and provide a check and balance within the company.

Executive committee Board members 4 Non executive committee Board members 5 Independent directors 3

- The Board of Directors has appointed an audit committee composing of all independent directors for oversight. The audit committee meets quarterly and reports to the Board of Directors.

- The Chief Financial Officer serves as the secretary to the Board and the audit committee to advise on legal matters of interest to the directors and to ensure that the board’s resolutions are carried out.

Board meetings

The Board supports regular attendance and encourages the participation of the members at meetings which are scheduled quarterly at the minimum. Meetings are held to inform of events with members encouraged in the business deliberations and participate in the decision making processes. Directors are informed in advance of the meeting date and venue with agenda and pertinent material supplied. During each meeting directors may introduce additional agenda for discussion. Open and meaningful discussions are encouraged with the secretary to the board responsible for the recording of the minutes. 6 meetings were held in 2007 as per the following details:

Total attendance

Directors 6 Board of directors meetings in 2007 Total

1. Mr. Chia Song Heng 5 5/6 2. Mr. Pised Chungyampin 6 6/6 3. Mr. Silchai Kiatpapan 6 6/6 4. Ms. Nitida Thamasoontra 6 6/6 5. Mr. Chong Mang Yong 4 4/6 6. Mr. Viriya Pholpoke 6 6/6 7. Mr. Chaiyod Bunyagidj 6 6/6 8. Mr. Sern Vithespongse 6 6/6 9. Ms. Sasitorn Phongsathorn 5 5/6


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Other committees In 2007, 6 audit committee meetings were held.

Total attendance Audit committee members 6 audit committee meetings in 2007 Total

1. Mr. Chaiyod Bunyagidj 6 6/6 2. Mr. Sern Vithespongse 6 6/6 3. Ms. Sasitorn Phongsathorn 6 6/6

Directors and management’s compensation

Directors’ compensation: Compensation is based upon responsibility, duty, role which is clearly defined. The compensation is in line with industry’s norm. Executive directors’ compensation: The compensation is based upon the company’s performance and individual performance of each director and is in line with industry. The chairman of the Boards and the non connecting directors conduct the performance review.

Insider information supervision

A policy is established so that inside information is not to be used for personal gain. This covers spouses and minor children of employees. The details are as follows: 1. All members of management in every department must be informed of their

responsibility to report their stockholding and the penalties for failure to comply in accordance with Securities and Exchange Act B.E. 2535 and the regulations of the SET.

2. The company’s policy is to allow senior management to disclose only minimal internal information to staff so as to permit the conduct of operation. Additionally members of management are prohibited to use insider information in the trading of the company’s stock.

Internal control The company has an adequate internal control process which is regularly reviewed and

improvements made to remain current with market development. An outsider internal auditor reporting directly to the audit committee is engaged for a regular internal control; review.

9.5 Personnel

1. There are a total of 163 employees in Pico and subsidiaries as at 31 October 2007

Employee Daily Employee Pico (Thailand) Public Company Limited 113 2 PX System Company Limited 27 63 Artcom Graphic Company Limited 12 3 Multi Designs Company Limited 11 -

Total 163 68

Pico’s 115 staff composition

Person

Management 16 Strategic Marketing 4 General Affairs 13 Finance and Accounting 13 Marketing 69


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2. Compensation of staff 2.1 In 2007 total monetary compensation for all staff of Pico and subsidiaries consist of

salaries and bonus totaling Baht 86.51 million Unit : Baht 2007

(Million Baht) 2006

(Million Baht) Salary 72.14 63.26 Bonus 14.37 22.56

Total 86.51 85.82

2.2 Other compensation Provident fund contribution 2007 Employees of Pico and subsidiaries contribute 3% of monthly salary to the provident

fund plan which is matched by equal contribution from the companies. Employees are entitled to the benefits based upon their length of service with 2, 3 and 5 years of service drawing 30%, 50% and 100% from the fund on leaving. The company has contributed Baht 1.89 million to the fund.

Unit : Baht 2007 (Million Baht)

2006 (Million Baht)

Provident Fund 1.89 1.10

3. Past 3 years staff turnover and recruitment. In 2007, 9 resigned with 24 recruited In 2006, 24 resigned with 23 recruited In 2005, 26 resigned with 26 recruited

4. Past 3 years labor disputes

None

5. Human Capital Development Policy To ensure of a consistent growth the company is committed to training aiming at an

efficient workforce with the latest know how and available tools ready to address the competition and challenges in the market.

The company recognizes the importance of human capital development which goes hand in hand with a harmonious working environment.

Human capital development and job satisfaction goes hand in hand as follows: Recruitment The company is committed to the competency in its recruitment process which searches for

talents that will be responsive to the business objectives, Allocation of manpower will depend on job suitability and business direction of the company.

Staff Training Human capital is our most important asset and must receive appropriate training and

encouragement to reach his/her potential. Extensive and various training programs in and outside of the company are available e.g. Team Work Builder Leadership Skill Program, The Manager, Career Management. Overseas training and observation trips were also conducted such as IAA 2007, Tokyo Motor Show 2007 and K 2007: International Trade Fair No.1 for Plastic and Rubber Worldwide

Additionally, a reading culture is actively promoted and a reading corner was established to encourage reading among staff. A clean and peaceful working environment have direct bearing on staff morale and productivity and to this end we are committed to maintaining our offices just like our staff’s second home.


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Employees’ relationship All employees are encouraged to join in all group activities aimed at promoting office unity e.g.

birthday celebration, new year festivities and community service projects like books donation to needy students.

Staff Benefits We are committed to a fair and competitive compensation program. A provident fund, life and

health insurance plan are available to staff. Other benefits such as car and telephone allowances and uniforms are regularly reviewed so that the benefits are in line with the prevailing market situation. A communication channel is established to handle complaints and suggestions to the management to consider to foster a mutually beneficial relationship.

Security, Occupational safety and Working Environment We are committed to a safe and secure working environment. A committee is set up to oversee

the security and occupational hazards and working environment in general. Building security is regularly reviewed with training conducted to ensure that contingencies are handled in a safe and professional manner.


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10. Internal Control

The Board of Directors has appointed an audit committee consisting of 3 independent

directors none of whom holds management position. The audit committee’s responsibility is for the oversight of the financial report preparation for accuracy, adequate disclosure, compliance to the governing rules and regulations and effective internal control process. The company has engaged a consultant to supervise the internal audit process with a report done on a quarterly basis in 2007. The consultant regularly meets with the audit committee to review the audit results and the adequacy of the internal control process. The audit committee’s report is attached.


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Audit Committee Report to the Shareholders To the Shareholders of Pico (Thailand) Public Company Limited The audit committee of Pico (Thailand) Public Company Limited consists of Mr. Chaiyod Bunyagidj as chairman and Mr. Sern Vithespongse and Mrs. Sasitorn Phongsatorn as members of the committee. The audit committee performes its duty and responsibility pursuant to the delegation of the Board of Directors. In 2007, 6 meetings were held with executive management and the independent auditor. The results of the meetings are as follows:

• Financial Report Preparation: The committee diligently reviewed the quarterly and annual financial report for 2007 with management and the independent auditor to ensure that the consolidated statements are presented accurately and in accordance with the generally accepted accounting principles. Disclosures were also reviewed to ensure of accuracy and adequacy. Observation remarks were also made to management with remedial management plan received. Intercompany transactions were vetted for strict compliance to the rules and regulations of the SET.

• Internal Control: The committee reviewed the 2007 internal audit program with suggestions to improve the process made. Operation of each department was reviewed to determine that adequate control process exists.

• Related Transactions: The committee reviewed all related transactions to ensure that they were conducted at arms length and are strictly normal trade transactions and that the company closely abides by its commitment to good governance.

• Compliance: The committee reviewed transactions for compliance to the rules and regulations of the SET and other laws. Complete compliance is noted.

• Good Governance: The Company is found to abide by its commitment to the concept of good governance. Its operation is conducted in a transparent and accountable manner with all stakeholders’ interest in mind.

The committee also reviewed the selection of the independent auditor for the Board of Directors to present to the shareholders for ratification. Mrs. Nachalee Boonyakarnkul certified public accountant# 3126, Mr. Niti Jungnitnirundr certified public accountant# 3809 and Miss Vipavee Boonyaprasit certified public accountant# 3096 of Deloitte Touche Tomatsu Jaiyos Co., Ltd. are recommended to be elected as the company’s independent auditor for 2008 with a stipend of Baht 2,040,000 for the financial year.

On behalf of the audit committee Chaiyod Bunyagidj (Mr. Chaiyod Bunyagidj) Chairman of the audit committee




11. Intercompany Transactions

During the year transactions were made between affiliated companies with prices and charges levied for merchandises sold and services rendered. The prices and charges constituted our normal business transaction with subsidiaries, joint ventures and persons who may be seen as having conflicts of interest. The terms and conditions in these transactions are in line with normal business transaction. These transactions are disclosed in the notes to financial statements no 22 as of October 31, 2007. Details of transactions with affiliated companies and persons described above are as follows:

Account

Transaction Value (Baht) Reason/Noted

Company Relationship 2007 2006

1 Nov 06-31 Oct 07 1 Nov 05-31 Oct 06 1. Revenues from

the rendering of services

Pico Art International Pte Ltd Pico Art Exhibition Inc. Pico International Taiwan Ltd Pico International Ltd. Pico International (M) Sdn. Bhd. Pico International (China) Limited Pico IES Group Limited Bejing Pico Exhibition services Co.,Ltd. Pico International (B) Sdn. Bhd. Pico Australia Pty Ltd. Pico Exhibition (UK) Ltd. Pico International (HK) Ltd. Pico North Asia Ltd. MP International (HK) Ltd. Pico Chicago U-Rent Company Limited Joint venture

Major Shareholder Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company

Associated Company Joint Venture

6,519,287 115,000

- 1,970,482 1,938,630

- 690,000

20,542 100,000

58,879 1,153,279 4,646,041

154,960 273,200

- 1,518,330 7,801,446

4,945,942 17,664

2,316,391 -

181,673 1,091,519

- - -

137,383 1,258,016 1,947,620

- -

936,027 1,549,772

37,988,052

Income is from service rendered to companies with common shareholders. This is due to the corporate policy to provide a comprehensive product package to customers by leveraging the available services of companies within the group. Pricing is cost plus a mark up that is similar to that charged outside companies. Considered normal trade transactions.

26,960,076 52,370,059

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Account



1 Nov 06-31 Oct 07 1 Nov 05-31 Oct 06 2. Trade

accounts receivable

Pico Art International Pte Ltd Pico International (China) Limited Pico International Taiwan Ltd Pico International (M) Sdn. Bhd. Pico Australia Pty Ltd. Pico International (HK) Ltd. Bejing Pico Exhibition Services Pico Art Exhibit, Inc. Pico IES Group Limited. Pico International (B) Sdn. Bhd. Pico Exhibition (UK) Ltd. U-Rent Co., Ltd.

Major Shareholder Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company

Associated Company

2,829,303--

637,837-

1,857,76421,980

123,050738,300107,000

1,137,923942,697

110,0001,093,033

260,000119,840147,000570,000

-----

26,584

Trade receivables are from services performed in 1. Credit terms for outside customers, subsidiaries and associated companies are normal market at 60 to 90 days. Considered normal trade transactions.

8,395,854 2,326,457

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Account Transaction Value (Baht) Reason/Noted


1 Nov 06-31 Oct 07 1 Nov 05-31 Oct 06 3. Costs of the

rendering of services

Pico Art International Pte Ltd Pico International (M) Sdn. Bhd. Pico International (Dubai) L.L.C. Pico International (China) Limited Pico Australia Pty Ltd. Pico Atlanta Pte Ltd. Meeting Planners International (HK) Ltd. Pico International (HK) Ltd. Pico Art Exhibit, Inc. Intertrade Pte Ltd. GMC Hong Kong Limited Shanghai Pico Exhibition Services Co., Ltd. Pico Chicago Inc. U-Rent Co., Ltd. Inkjet Images (Thailand) Co., Ltd. DesignLab MISC Co., Ltd.

Major Shareholder Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company

Associated Company Associated Company Associated Company

2,703,663346,209969,936

-658,096

--

469,2931,850,748

70,687952,579411,380536,480

9,780,614149,230

14,212,000

-327,859

-780,000

-819,652

21,219------

10,252,654964,690

7,552,000

Cost of services purchased form companies with common shareholders. These are specialist companies in their respective area and the charges are at market as charged to outside companies. Considered normal trade transactions.

33,110,915 20,718,074

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Account



1 Nov 06-31 Oct 07 1 Nov 05-31 Oct 06 4. Trade accounts Pico Art International Pte Ltd. Major Shareholder 2,803,039 - payable Pico International (China) Limited Same Ultimate Holding Company - 722,782 Pico International (M) Sdn. Bhd. Same Ultimate Holding Company 343,958 110,635 Pico International (HK) Ltd. Same Ultimate Holding Company 76,257 - Intertrade Pte Ltd. Same Ultimate Holding Company 68,246 - Pico Art Exhibit, Inc. Same Ultimate Holding Company 1,838,025 - U-Rent Co., Ltd.

Inkjet Images (Thailand) Co., Ltd. DesignLab MISC Co., Ltd.

Associated Company Associated Company Associated Company

1,587,8779,931

1,693,810

1,197,440102,858

1,027,200

The trade payables are from the services received in (3) from companies with common shareholders. Credit terms received is normal market at 60 to 90 days. Considered normal trade transactions.

8,421,143 3,160,915 5. The gross

amount due from customers for contract work

Pico Art International Pte Ltd. Pico International Taiwan Ltd Pico International (HK) Ltd. Pico Exhibition (UK) Ltd. U-Rent Co., Ltd.

Major Shareholder Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company

Associated Company

1,455,657-

1,600,00089,80023,450

-24,95098,598

--

Amount due from customers. This represents service progressively performed and income recognized but not yet invoiced to customers as the project is not fully completed. Once completed, the customers will be invoiced and the amount will revert to become trade receivables as in 2.

3,168,907 123,548

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1 Nov 06-31 Oct 07 1 Nov 05-31 Oct 06 6. Accrued Cost Pico Chicago Inc.

Pico International (China) Limited Shanghai Pico Exhibition Services Co., Ltd. U-Rent Co., Ltd.

Same Ultimate Holding Company Same Ultimate Holding Company Same Ultimate Holding Company

Associated Company

275,100-

150,0002,104

-38,744

173,900

Accrued expenses represent cost of services due to the company received from related companies but as of closing has not yet been invoiced. Once invoiced, the amount will revert to become trade payable with credit terms as in (4)

427,204 212,644 7. Amounts due

to related parties

Pico Art International Pte Ltd. Pico Global Services Limited

Major Shareholder Same Ultimate Holding Company

20,557,34285,759

11,681,64138,440

This amount is the accrued expenses for management fee due to Pico Art International Pte Ltd. as in 9, media expenses and cost for materials due to companies in the Pico network. The prices charged by other Pico units to the Thai operation is the same as that charged to other companies within the group and is considered normal trade transactions.

20,643,101 11,720,081

Page 43


-Translation from Thai Text

Account Transaction Value (Baht) Reason/Noted Company Relationship 2007 2006

1 Nov 06-31 Oct 07 1 Nov 05-31 Oct 06 55,92555,1083,016

257,335-

13,600

8. Amounts due from related parties

Pico Art International Pte Ltd Pico International (Dubai) L.L.C U-Rent Co., Ltd.

Major shareholders Same Ultimate Holding Company

Associated Company

114,049 270,935

This amount is payment for utilities advanced by Pico Thailand on behalf of the subsidiaries and associated companies. 60 to 90 days credit is extended and considered normal trade transaction.

19,633,930 22,745,446

9. Management fee (Expenses)

Pico Art International Pte Ltd. Major shareholders

19,633,930 22,745,446

Management fee is pursuant to the Intellectual Property License Agreement and Offshore service Agreement at 2.53% of turnover. This covers managerial assistance, technological consultation, training, human resource development and marketing cooperation.

Page 44





1 Nov 06-31 Oct 07 1 Nov 05-31 Oct 06 10. Other income Pico Art International Pte Ltd

Pico Global Services Limited U-Rent Co., Ltd.

Major shareholders Same Ultimate Holding Company

Associated Company

95,938--

-47,667

486,261

Damage compensation claimed from group insurance policy with Pico Art International Pte. Ltd.

95,938 533,928

11. Dividends Pico Art International Pte Ltd. Directors

Major shareholders Directors

12,650,0109,501,266

12,707,50010,724,519

Dividend payment of Baht 12,650,000, Baht 8,799,941.40, Baht 422,303.10 and Baht 279,021.00 was made to Pico Art International Pte. Ltd. Mr. Pisec Chungyampin, Mr. Silchai Kiatpapan and Miss Nitida Thamasoontra respectively. The payment is consistent with the payment made to other shareholders.

22,151,276 23,432,019

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Account



1 Nov 06-31 Oct 07 1 Nov 05-31 Oct 06 12. Other expenses Pico Art International Pte Ltd

Pico International (M) Sdn. Bhd. Pico Global Services Limited U-Rent Co., Ltd.

Major shareholders Same Ultimate Holding Company Same Ultimate Holding Company

Associated Company

228,5364,574

627,96940,525

476,488-

189,517-

Payments made to Pico Art network for office supplies with Pico logo for company’s operation. Prices paid are the same as those paid by other companies in the network and are considered normal trade transactions.

901,604 666,005

13. Directors’ remuneration

Directors Directors 6,000,000 4,400,000 Directors’ remuneration is in accordance with the amount approved by the shareholders

14. Short – term loan to a related party

Joint Venture Joint Venture 4,899,476 5,054,915 Loan made to a joint venture to be used as cash collateral for a bank guarantee issued on behalf of the joint venture

15. Other current asset

Joint Venture Joint Venture - 4,064,722 Retention guarantee deducted from each progress payment received from the joint venture which is normal trade practice

16. The gross amount due to customers for contract work

Pico Australia Pty Ltd. Same Ultimate Holding Company - 136,796 Advance payment received for contract from related company. Considered normal trade transaction.

17. Deposits received from customers

Joint Venture Joint Venture - 974,496 Advance payment received from joint ventures. Considered normal trade transaction

Page 46


Page 47




1 Nov 06-31 Oct 07 1 Nov 05-31 Oct 06 5,166,329

0993,278

1,863,1432,929,499

4,884,319366,906487,543

2,212,6552,316,743

18. Investments using the equity method

Inkjet Images (Thailand) Co., Ltd. BEC Tero Exhibition Co., Ltd. DesignLab MISC Co., Ltd. Ibrix Co., Ltd. U-Rent Co., Ltd.

Associated Company Associated Company Associated Company Associated Company Associated Company

10,952,249 10,268,166

The company invested in Inkjet Images Co. Ltd., BEC Tero Exhibition Co. Ltd., DesignLab MISC Co. Ltd., and Ibrix Co. Ltd. In the proportion of 22.22%, 39%, 20% and 40% respectively. The subsidiary PX System Co. Ltd. Holds 22.5% in U-Rent co. Ltd. Booking the investment at net book value which is considered to approximate far market value as of closing. Note: In September 2007 the company completely divested its entire holding in BEC Tero Exhibition Co., Ltd.

* The company is an indirect shareholder of U-Rent Co. Ltd. through PX System Co., Ltd. at 22.5% of total.


-Translation from Thai Text- • Procedures for approval of intercompany transactions.

The policy for approval of intercompany transactions calls for deliberation by independent

directors and final approval by the Board of Directors during which directors with vested interest shall abstain from voting.

• Trend for future intercompany transaction

There were intercompany transactions that management was involved in the approval

process with related companies and individuals related to intellectual property rights, which were considered normal business transactions. In the conduct of these transactions, the maximum benefits to the company were of primary concern.

It is expected that such transaction with related companies such as sale or purchases with credit terms extended or received will continue in a normal course of business. These transactions with related individuals will be screened by independent directors to ensure that they are consistent with normal trade transaction. The company will strictly comply with the relevant SET announcements with no person with vested interest taking part in the approval process of such transaction.

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Page 49


12. Operating Results and Financial Standing

1) Summary of auditor’s opinion The past unqualified opinion of the auditor for the 5 years between 2003 to 2007 confirms that the company’s financial statements, operating results and accompanying cash flows conform materially to the generally accepted accounting principles.

Fiscal Year

Certified Public Accountant (Thailand)

Auditor’s Office Registration No.

Auditor’s opinion

2007 Nachalee Boonyakarnkul

Deloitte Touch Tohmatsu Jaiyos Audit Co., Ltd. 3126 Unqualified

2006 Nachalee Boonyakarnkul

Deloitte Touch Tohmatsu Jaiyos Audit Co. 3126 Unqualified

2005 Somporn Dulyavit Deloitte Touch Tohmatsu Jaiyos Audit Co. 3709 Unqualified



2) Summary of operating results and financial standing

Summary of Pico’s operating results and financial condition for 2005 to 2007 are as follows:

Thousand Baht

Consolidated Company 2007 2006 2005 2007 2006 2005

Total Revenue 1,042,477 1,112,375 720,220 934,935 958,935 626,313

Total Expenses 975,960 1,017,772 662,664 854,889 873,738 575,901

Net Income 50,138 71,254 41,702 69,207 68,041 41,702

Earnings per share Weighted average no. of ordinary share

0.44 114,670

0.62 114,670

0.36 114,670

0.60 114,670

0.59 114,670

0.36 114,670

Total Assets 626,717 527,333 429,237 576,838 460,326 391,816

Total Liabilities 298,548 209,762 114,869 262,049 180,245 116,413

Total company shareholder’s equity 328,169 317,571 284,368 314,789 280,082 275,403

Book value per share (Baht) 2.86 2.78 2.48 2.75 2.68 2.4

No. of shares issued and outstanding as at year end (Thousand shares)

115,000

115,000

115,000

115,000

115,000

115,000

Remarks - Fiscal year of the company October 31

- In 2007 there are 330,000 preferred shares and 114,669,980 common shares both at Baht 1 par value

The comparison of earning per share and book value per share 2006 and 2007 of shares is based on weighted average of shares

Form 56-1-07 (Thailand) Plc.

Page 50


Pico (Thailand) Public Company Limited Balance Sheets

As at October 31 Thousand Baht

Assets Consolidated The company only 2007 2006 2005 2007 2006 2005

Current assets

Cash and cash equivalents 82,602 115,637 55,669 68,835 91,093 28,238 Cash and cash equivalents – Joint Venture 3,391 433 -

-

-

-

Current investments 317 20,596 76,467 - 20,126 75,014 Trade account receivables, net Related parties 8,396 2,326 6,398 5,569 2,180 6,278 Others 166,033 115,986 104,102 149,313 105,668 84,912 Trade accounts receivable, net 174,429 118,312 110,500 154,882 107,848 91,912 Amount due from related parties - JC 114 271 20 689 619 701 Amount due from related parties 18 - - - - - Short-term loan to a related party 4,899 5,055 - 8,166 8,425 - Inventories - 367 271 - 367 271 Other current assets

The gross amount due from customers for contract work 171,179 83,157 73,197 161,390 78,872 69,253

Deposits a banks used as collateral - Joint Venture - 4,920 - - - - Bill of exchange used as collateral – Joint Venture 1,476 - - - - - Others 58,472 43,148 20,364 54,322 43,611 18,307

Others – Joint Venture 852 9,880 - - - -

Total Current Assets 497,749 401,776 336,488 448,284 350,961 282,974 Non-Current Assets Deposits at banks used as collateral - 810 810 - - - Investments using the equity method 10,952 10,268 5,608 32,051 13,565 33,319 Other long-term investment 2,867 1,210 930 - - - Property, plant and equipment, net 109,799 109,169 82,509 91,943 91,991 72,726 Intangible assets, net 3,628 2,640 1,588 3,434 2,400 1,493 Other non-current assets 1,722 1,460 1,304 1,126 1,409 1,304 Total Non-current Assets 128,968 125,557 92,749 128,554 109,365 108,842 TOTAL ASSETS 626,717 527,333 429,237 576,838 460,326 391,816


Page 51


Pico (Thailand) Public Company Limited Balance Sheets (Continued)

As at October 31

Thousand Baht Liabilities and Shareholder’s Equity Consolidated The company only

2007 2006 2005 2007 2006 2005 Current Liabilities Bank overdrafts and short-term loan from financial institutions 292 - - - - - Trade accounts payable Related Parties 8,848 3,374 1,727 13,735 7,099 4,358 Others 169,214 104,372 80,817 145,807 92,491 64,246 Total trade accounts payables 178,062 107,746 82,544 159,542 99,590 68,604 Short-term loan from a related party-Joint Venture 1,654 1,550 - - - - Current portion of obligations under hire-purchase agreement 1,760 2,214 1,831 1,760 2,199 1,830 Amount due to related parties 20,643 11,720 4,536 20,646 11,720 4,573 Amount due to a related party-Joint Venture 423 974 - - - -

Other current liabilities Accrued expenses 26,486 33,645 24,626 21,064 28,635 17,238 Accrued expensed- Joint Venture 37 - - - - - The gross amount due to customers for contract work 13,802 5,483 9,144 9,704 1,821 5,455 Deposits received from customers 23,267 7,434 644 22,199 8,051 644 Dividend payable - 2,077 - - - -

Others 27,150 26,519 17,386 22,456 22,940 13,821

Others-Joint Venture 295 5,110 - - - -

Total Current Liabilities 293,871 204,472 140,711 257,372 174,956 112,255 Non Current Liabilities Obligations under hire-purchase agreements 4,678 5,290 4,158 4,678 5,289 4,158 Total Non-current Liabilities 4,678 5,290 4,158 4,678 5,289 4,158 Total liabilities 298,548 209,762 144,869 262,049 180,245 116,413


Page 52


Pico (Thailand) Public Company Limited Balance Sheets (Continued)

As at October 31

Thousand Baht Shareholders’ Equity Consolidated The company only

2007 2006 2005 2007 2006 2005

Share Capital 330,000 preferred shares of Baht 1 each 330 330 330 330 330 330

114,670,000 ordinary shares of Baht 1 each 114,670 114,670 114,670 114,670 114,670 114,670

115,000 115,000 65,000 115,000 115,000 115,000 Issued and paid-up share capital 330,000 preferred shares of Baht1 each, fully paid 330 330 330 330 330 330 114,669,980 ordinary shares of Baht 1 each, fully paid 114,670 114,670

114,670 114,670 114,670 114,670

115,000 115,000 115,000 115,000 115,000 115,000 Additional Paid-in Capital Premium on ordinary shares, net 101,250 101,250 101,250 101,250 101,250 101,250

Land Revaluation Surplus 27,917 27,917 27,917 27,917 27,917 27,917 Retained Earnings Appropriated Legal reserve 11,500 10,713 7,150 11,500 10,713 7,150 Unappropriated 67,528 52,677 24,086 59,122 25,201 24,086 Total company shareholders’ equity 323,195 307,557 275,403 314,789 280,081 275,403 Minority Interest 4,974 10,014 8,965 - - - Total shareholders’ equity 328,169 317,571 284,368 314,789 280,081 275,403 Total Liabilities and Shareholders’ Equity 626,718 527,333 429,237 576,838 460,326 391,816


Page 53


Pico (Thailand) Public Company Limited Statements of Income

For the years ended October 31

Thousand Baht Revenues Consolidated The company only

2007 2006 2005 2007 2006 2005

Revenues

Revenues from the rendering of services 1,014,399 1,037,604 716,499 901,019 949,030 611,994 Revenues from the rendering of services -Joint Venture 20,772 71,191 - - - -

Dividend income 1,177 324 - 28,617 4,499 -

Other income 3,971 2,945 3,278 5,299 5,409 4,216

Other income – Joint Venture 262 - - - - -

Share of profits from investments using the equity method 1,897 311 443 - - 10,103

Total revenues 1,042,477 1,112,375 720,220 934,935 958,938 626,313

Expenses

Cost of the rendering of services 793,349 815,889 533,995 717,945 745,086 472,309 Cost of the rendering of service –Joint Venture 14,004 45,579 - - - -

Selling and administrative expenses 167,209 155,917 128,669 136,945 128,652 103,591 Selling and administrative expenses –Joint Venture 1,398 387 - - - -

Total expenses 975,960 1,017,772 662,664 854,890 873,738 575,900 Income Before Interest Expenses and Income Tax 66,517 94,603 57,556 80,045 85,200 50,413

Interest Expenses (610) (566) (318) (535) (562) (318)

Interest Expenses – Joint Venture (262) - - - - -

Income Tax (13,755) (20,233) (12,899) (10,303) (16,597) (8,393)

Income Tax – Joint Venture (273) - - - - -

Income After Income Tax 51,617 73,805 44,339 69,207 68,041 41,702

Net Income of Minority Interest (1,479) (2,551) (2,637) - - -

Net income 50,138 71,254 41,702 69,207 68,041 41,702

Basic earnings per share 0.44 0.62 0.36 0.60 0.59 0.36 Weighted average number of ordinary shares 115,000 115,000 115,000 115,000 115,000 115,000


Page 54



Statements of Cash flows For the years ended October 31

Thousand Baht Consolidated The company only 2007 2006 2005 2007 2006 2005

Cash flows from operating activities

Net Income 50,138 71,254 41,702 69,207 68,041 41,702 Item to reconcile net income to net cash flows from operating activities: Depreciation and amortization of intangible assets 16,829 14,495 11,776 10,543 8,109 6,349

Doubtful accounts and bad debt 1,019 655 1,406 787 228 702 (Gain) losses on sale of fixed assets 237 (907) (1,020) 272 (960) (263) Loss on writing off of fixed assets 186 2,631 310 13 2,612 288 Unrealized (gain) loss on exchange rate 88 (22) (18) 88 (23) - Dividends received from investments using the equity method 917 - - - - 6,303 Share of profits from investments using the equity method (1,897 ) (311) (443) - - (10,102) Losses on sales of investment in associated company 168 - - 1,821 - - Net income of minority interest 1,479 2,551 2,637 - - - Income from operations before changes in operating assets and liabilities 69,164 90,346 56,350 82,731 78,007 44,979 Operating assets (increase) decrease

Trade accounts receivable (56,340 ) (8,471) (12,403) (47,026) (16,888) (11,992) Amounts due from related parties 157 (251) 61 (70) 82 5

Amounts due from related parties joint venture (18) - - - - - Inventories 367 (96) 285 367 (96) 285 The gross amount due from customs for contract work (88,809) (9,959) 13,982 (83,305) (9,619) 16,461 Other current assets (15,219) (22,770 ) (6,267) (10,711) (25,304) (5,693) Other current assets – Joint Venture 9,029 (9,880 ) - - - - Other non-current assets (263) (155) 519 283 (105) 476 Operating liabilities increase (decrease) Trade accounts payable 70,241 25,224 13,106 59,876 31,008 10,096 Amounts due to related parties 8,902 7,188 (2,606) 8,906 7,150 (2,563) Amounts due to related parties- Joint Venture (552) 974 - - - - Accrued expenses (7,159) 9,018 1,483 (7,571) 11,307 (778) Accrued expenses – Joint Venture 37 - - - - - The gross amount due to customers for contract work 8,318 (3,661) 3,448 7,883 (3,633) 3,550 Deposits received from customers 15,834 6,790 612 14,148 7,407 612 Deposits received from customers – Joint Venture (2,077) - - - - - Other current liabilities 3,772 6,065 1,171 3,377 6,284 1,862 Other current liabilities – Joint Venture (4,814) 7,187 - - - - Net cash provided by operating activities 10,570 97,54 9 69,741 28,889 85,600 57,300


Page 55


Pico (Thailand) Public Company Limited Statements of Cash flows (Continued)

For the years ended October 31 Thousand Baht

Consolidated The company only 2007 2006 2005 2007 2006 2005

Cash flows from investing activities Cash received from deposit at bank used as collateral 810 - 2,000 - - 2,000 Cash payment from deposit at bank used as collateral – Joint Venture - (4,920) - - - - Cash received from deposit at bank used as collateral – Joint Venture 4,920 - - - - - Cash payment for bill of exchange used as collateral – Joint Venture (1,476) - - - - - Cash received from short term loan to a related party 155 - - 259 - - Cash payment for purchase of fixed assets (18,690) (37,104) (10,645) (12,197) (23,553) (7,872) Cash payment for purchase of intangible of assets (2,205) (408) (328) (2,205) (237) (325) Cash received from sale of fixed assets 393 1,068 1,992 237 1,050 806 Cash payment for capital investment in Joint Venture - - - - (160) - Purchase of investment in subsidiaries - - - (20,436) - - Cash payment to minority interest on purchase of the additional share (3,876) - - - - - Purchase of investment in associated company - (4,350) - - (4,350) - Purchase of investment in other company (1,657) (280) (450) - - Cash received from sale of investment in associated company 129 - - 129 - - Short-term loan to a related party - (5,055) - - (8,425) - Cash received from short-term loan to a related company - - - - - 300 Net cash used in investing activities (21,497) (51,049) (7,431) (34,213) (35,675) (5,091) Cash Flows from Financing Activities Bank overdraft and short-term loan from financial institution 292 - - - - - Cash payment for obligations under hire-purchase agreements (2,575) (2,917) (1,793) (2,559) (2,857) (1,793) Increased share capital of minority shareholders 6,040 - - - - - Dividends paid (34,500) (39,100) (21,655) (34,500) (39,100) (21,655) Dividends of subsidiary paid to minority shareholders (8,7900 (1,502) (2,3070 - - - Short-term loan from a relate party-Joint Venture 103 1,550 - - - - Net cash used in financing activities (39,430) (41,969) (25,755) (37,059) (41,957) (23,448) Net increase (decrease) in cash equivalents (50,357) 4,531 36,892 (42,385) 7,968 28,761 Cash and cash equivalent balance as at beginning 136,666 132,135 95,243 111,220 103,252 74,491 Cash and cash equivalent balance as at ending 86,309 136,666 132,135 68,835 111,220 103,252


Page 56


Comparative financial Ratios 2005-2007

Financial ratios

Consolidated The Company only 2007 2006 2005 2007 2006 2005

Liquidity Ratio Current Ratio (time) 1.69 1.96 2.39 1.74 2.01 2.52 Quick Ratio (time) 1.67 1.81 1.72 1.71 1.84 1.74 Cash current ratio (time) 0.29 0.57 0.53 0.27 0.52 0.54 Receivable turnover (time) 6.86 9.50 6.65 6.83 9.44 7.03 Collection (day) 53 38 54 53 38 51 Trade payable turnover (time) 5.65 9.05 7.29 5.54 8.86 7.43 Payment (day) 64 40 49 65 41 48 Profitability ratios Gross operating profit (%) 22.01 22.31 25.47 20.32 21.49 22.82 Operating profit (%) 6.43 8.53 8.03 8.88 8.98 8.24 Net profit (%) 4.81 6.41 5.82 7.40 7.10 6.81 Return on equity (%) 15.53 23.67 15.79 23.27 24.50 16.29 Operating Efficiency Return on assets(%) 8.69 14.90 10.44 13.35 15.97 11.44 Return on fixed assets (%) 59.12 87.37 67.05 83.69 90.16 80.02 Assets turnover (time) 1.81 2.33 1.80 1.80 2.25 1.71 Key Financial indicators Total debts to equity ratio (time) 0.91 0.66 0.51 0.83 0.64 0.42 Long-term debts to equity ratio (time) 0.01 0.02 0.01 0.01 0.02 0.01 Interest coverage (time) 76.23 167.27 262.16 149.51 151.54 207.58 Book value per share (Baht) 2.86 2.77 2.48 2.75 2.44 2.40 Earning per share (Baht) 0.44 0.62 0.36 0.60 0.59 0.36 Dividend per share (Baht) * 0.37 0.31 * 0.37 0.31

Remark: * During 2007, the company paid Baht 0.10 interim dividend per share.


Page 57


3) Explanation and Analysis

Operation Overview For 2007 the consolidated revenue amounted to Baht 1,042 million, a decline of Baht 70

million or 6.3% from the previous year. Net profit is Baht 50 million or 4.8% of total revenue.

Revenue from services rendered Revenue from trade show and exhibition amounted to Baht 413 million, an increase of

Baht 63 million or 18.1% rise due to new type of exhibition such as the Readers Expo, Exhibitions in honor of H.M. the King and the expansion of our market share in regular exhibitions.

Revenue from event marketing amounted to Baht 156 million, a decline of Baht 130 million or 45.6% due to the completion of a one off large project ( Baht 72 million) “H.M. King’s 60th anniversary accession to the throne” of 2006 and the slowdown in activities due to political and economic uncertainty.

Revenue from knowledge communication totaled Baht 292 million declined by Baht 15 million for the year. This income represents carryovers from 2006 e.g. Children Museum, The Rama VII museum, The National Discovery Museum and a few medium sized museums of 2007.

Other services amounted to Baht 174 million, an increase of Baht 9 million due mainly to large tent rentals, design and installation of counters display for many retail outlets. The design and printing of inkjet banners, however, declined as clients withheld spending in face of market uncertainty.

Cost and Operating Profit Cost of services is Baht 807 million with the gross margin of Baht 228 million or 22% of revenue. The cost structure for shorter term medium size projects is more predictable resulting in higher profitability. The larger government undertakings generally stretched over a longer period and were aggressively tendered under heavy competition resulting in lower profitability.

Selling and General Administrative expenses (SGA) Selling and General Administrative Expenses increased to Baht 169 million which is 7.9% due to increased employee benefits reflecting the company’s commitment to its most important assets. Details of the expenses are as follows:

- Salaries and Bonus 86.51 Million Baht - Directors’ fees 6.00 Million Baht - Auditor’s fees 2.04 Million Baht

Net Income Consolidated net profit of Baht 50 million is 29.6% or Baht 21 million down from 2006 with earnings per share at Baht 0.44.

Financial Standing

Assets Consolidated assets of baht 626.7 million consist of: - Baht 86.3 million in cash or 13.7% of total assets down by Baht 50.4 from the previous year

due to increased working capital needs.


Page 58


- Baht 411.4 million or 65.7% are current assets consisting of baht 174.4 million in trade

receivables and baht 171.2 million in accrued income. The large increase is due to the completion of major projects in the last quarter of 2007.

- Non current assets of Baht 129 million or 20.6% of total assets consist of land, buildings, fixtures and other investments representing no material change from the previous level.

Liabilities Consolidated liabilities of Baht 298.5 million consist mostly of current liabilities such as trade payables, customers’ deposit. Long term obligations are only Baht 4.6 million. Equity An increase of Baht 10.6 million to Baht 328.2 million resulting mostly from the annual profit and the reduction in dividend payment.

Sources of Fund Internal operation generated cash primarily from suppliers’ credit was used to fund working capital needs with no bank borrowing resulting a total debt to equity of 0.9. Liquidity indicators continue to be high with the current position at 1.7 with almost all of the total obligations of Baht 298.5 million consisting of short term liabilities of Baht 293.9 million . Net worth stands at Baht 328.2 million at fiscal closing.

Liquidity and cash generation Increased operating needs from receivables growth were matched by payables with a decreased of Baht 87 million in operating cash. Non operating needs declined by Baht 29.5 million with the completion of the premises renovation in 2006. The operation continued to be debt free in 2007 with a year end cash balance of Baht 86.3 million.

Contingent liabilities As of October 31, 2007 consolidated contingent liabilities of Baht 61.2 million, down by Baht 5.6 million, consisted mostly of outstanding bank issued performance bonds and retention guarantees issued on our behalf



13. Other Information

-None -

Page 59



Part III Certification of factual accuracy

“We have carefully reviewed the annual information disclosure format with due care and

attention, as executive directors of the company or as the senior-most office-holder in accounting. We certify that the said information is complete, factual and containing no untruths or lacking in material information that should be disclosed. Further, we certify that:

1) The financial statements and related financial information are part of the annual information disclosure. The information so presented displays complete and material information related to the financial condition, operating results and cash flows of the company.

2) We are responsible to ensure that the company adopt an effective information disclosure and that pertinent and material information of the company be disclosed correctly and completely. This also covers the supervision of the implementation of the said disclosure process.

3) We are responsible to ensure that the company implement a good internal control system and to supervise that the said system is adhered to. We have informed the auditors and the audit committee of our assessment of the internal control system on December 14, 2007. This covers the deficiencies and material changes to the internal control system including the misdeeds which may affect the preparation of the company’s financial report.

Therefore, as evidence that all of the documents presented are the same documents that we have certified, we have delegated Miss Nitida Thamasoontra to sign on each page of these documents on our behalf. Should Miss Nitida Thamasoontra’s signature be missing from any page, we shall consider that it is not the information that we have certified.


Name Position Signature

1. Mr. Chia Song Heng Director/Chairman of the Company ........................... 2. Mr. Pised Chungyampin Director/Executive Chairman ........................... 3. Mr. Silchai Kiatpapan Director/Chief Executive Officer ........................... 4. Miss Nitida Thamasoontra Director/Chief Financial Officer ...........................

Authorized Person Name Position Signature Miss Nitida Thamasoontra Chief Financial Officer ...........................

We have reviewed the information contained in this annual report. With due care and

diligence as directors of the company we have no reason to believe that the stated information is not complete or containing untruths which may falsely lead others to believing, or lacking in material information that should be disclosed.

Page 60



Therefore, to signify that all documents hereby presented, are the same as what we have certified we delegate Miss Nitida Thamasoontra to sign on all pages on our behalf. Should Miss Nitida Thamasoontra’s signature be missing from any page, we shall consider that it is not the information that we have certified.

Pico (Thailand) Public Company Limited Name Position Signature

1. Mr. Chaiyod Bunyagidj Chairman of Audit Committee and Independent Director ...................................... 2. Mr. Sern Vithespongse Audit Committee / Independent Director ...................................... 3. Mrs. Sasitorn Phongsathorn Audit Committee / Independent ...................................... Director 4. Mr. Chong Mang Yong Director ...................................... 5. Mr. Viriya Pholpoke Director and Advisor ......................................

Authorized person

Name Position Signature Miss Nitida Thamasoontra Chief Financial Officer ....................................

Page 61


Page 62

- Translation from Thai Text -

Attachment 1 : Details on Executive and authorized manager of the company

Work experience Name / Position Age Education % Share holdings

Period Position Organization

1. Mr. Chia Song Heng

55 High School Certificate - 2003-present

2001-present

Chairman of the Board of Directors Vice chairman of the Executive Committee Director

Pico (Thailand) Public Co., Ltd. Pico Far East Holding Pte Ltd.

2. Mr. Pised Chungyampin

53 Bachelor’s Degree from the Faculty of Architecture King Mongkut’s Institute of Technology Mini MBA Thammasat University Directors Accreditation Program Directors Certification Program (DCP) Class 51/2004 Thai Institute of Directors Association

(including shares held

by close relatives and

minor children)

25.29

1 Nov 2006-present

2003-31 Oct 2006

1992-2003

2001-2003

Vice chairman and Executive Chairman Vice chairman and Chief Executive Officer Director President

Pico (Thailand) Public Co., Ltd. Pico (Thailand) Public Co., Ltd. Pico (Thailand) Public Co., Ltd. Trade Exhibition Association (Thai) (TEA)

3. Mr. Silchai Kiatpapan

51 Bachelor’s Degree in Public Health, Mahidol University Directors Accreditation Program Directors Certification Program (DCP) Class 48/2004 Thai Institute of Directors Association

1.34

1 Nov 2006-present

2003-31 Oct 2006

1992-present

Chief Executive Officer Chief Operating Officer Director

Pico (Thailand) Public Co., Ltd. Pico (Thailand) Public Co., Ltd. Pico (Thailand) Public Co., Ltd.


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Work experience Name / Position Age Education % Share holdings Period Position Organization

4. Ms. Nitida Thamasoontra

46 Master’s Degree in Business Administration (Finance) National Institute of Development Administration (NIDA) Directors Accreditation Program Directors Certification Program (DCP) Class 55/2005 Thai Institute of Directors Association

0.81 2003-present

1991-present

Chief Financial Officer Director

Pico (Thailand) Public Co., Ltd. Pico (Thailand) Public Co., Ltd.

5. Mr. Viriya Pholpoke

54 Bachelor of Science Degree Accountancy, Kasetsart University B.S. (Computer) University of Central Oklahoma, USA. Directors Accreditation Program, Thai Institute of Directors Association

-

2 Sep 2005-present

2003 -1Sep 2005

Director and Advisor Audit Committee and Independent Director


6. Mr. Chaiyod Bunyagidj

53 Ph.D. in Chemistry The American University, Washington D.C., USA. Directors Accreditation Program, Thai Institute of Directors Association

- 2003-present

1997-present

Chairman of the Audit Committee and Independent Director Vice President

Pico (Thailand) Public Co., Ltd. Thailand Environment Institute (TEI)

7. Mr. Sern Vithespongse

54 Bachelor of Architecture, Silpakorn University, Bangkok Directors Accreditation Program, Thai Institute of Directors Association

- 2003-present

1992-present

Audit Committee and Independent Director Director

Pico (Thailand) Public Co., Ltd. Palmer & Turner (Thailand) Co., Ltd.


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8. Mrs. Sasitorn Phongsathorn

50 Bachelor of Science in Chemical Engineering, Chulalongkorn University Master’s Degree in Business Administration, Notre Dame University, California, U.S.A Directors Certification Program (DCP) Class 58/2005 Thai Institute of Directors Association

- 17 Nov 2005-present

19 Dec 2005-present

1 Jul 2005-18 Dec 2005

2004-2005

2000-2003

Audit Committee and Independent Director President Vice President President Senior Director, Corporate Finance

Pico (Thailand) Public Co., Ltd. Land and Houses Retail Bank Public Co., Ltd. Book Club Finance Public Co., Ltd. United Securities Public Co., Ltd. United Advisory Services Co., Ltd.

9. Mr. Chong Mang Yong

51 Member of Association of Chartered and Certified Accountants

- 2003-present

2000-present

Director Vice-President Finance, South Asia

Pico (Thailand) Public Co., Ltd. Pico Art International Pte. Ltd.

1995-2000

Group Financial Officer

United Motor Works International Pte. Ltd.

10. Mr. Chokchai Vatcharanirunkul

47 Bachelor’s Degree in Political Science, Ramkhamhaeng University

0.54 2001-present

1995-2000

Senior Executive Vice President Event Marketing & Special Project General Manager Event Marketing



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11.Ms. Supaporn Sawangjitt

39 Bachelor’s Degree in Fine Arts and

Applied Art, Majoring in Creative Art, Chulalongkorn University

0.32 2005-present

2003-present

2000-2002

Executive Vice President Event Marketing I General Manager Event Marketing Assistant General Manager Event Marketing

Pico (Thailand) Public Co., Ltd. Pico (Thailand) Public Co., Ltd. Pico International Enterprise (Thailand) Co., Ltd.


Attachment 2 : Details on directors of subsidiaries and associated company

Name-Surname Pico (Thailand) Plc.

PX System Co., Ltd.

Artcom Graphic Co., Ltd.

Multi-Designs Co., Ltd.

Inkjet Images Co., Ltd.

IBRIX Co., Ltd.

DesignLab MISC

Co., Ltd. 1. Mr. Pised Chungyampin ,

2. Mr. Chaiyod Bunyagidj

3. Mr. Sern Vithespongse

4. Mr. Viriya Pholpoke

5. Mr. Chia Song Heng ,

6. Mr. Silchai Kiatpapan ,

7. Ms. Nitida Thamasoontra ,

8. Mr. Chong Mang Yong

9. Mrs. Sasitorn Phongsathorn

= Chairman = Director = Management

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-Translation from Thai Text- Attachment 3 : Others

-translation from thai text- contents part i : executive summary...

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