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Message from Chairman of the Board

Dear Shareholders: During the first half of fiscal year 2010, Thai economy was strongly recovered from the global economic recession crisis and was rated as the top ranking countries in Asia following Singapore, Taiwan and China for strong recovery. The rising of Thailand’s economy was due to our flourished export growth with the country’s major trade alliances in addition to the country’s FTAs initiative and strategy within the Framework Agreement and with the liberalization adhere to the ASEAN Agreement (AFTA) along with the government’s invigorated economic scheme to stimulate the country’s economic growth. As a result, BGT Corporation PLC, had gained a positive edge on cost control. On the contrary, the latter part of the year took opposite turn with negative impact due to the political fragile in the country causing the economy downturn in conjunction with a major flood that occurred in the last quarter of the year; many of the Body Glove stores had to close down for renovation due to flash flood damage. But, with the vision and attentive preparation of the management team, BGT Corporation PLC was able to effectively manage through the crisis, evidenced by distinct sales growth and increased profits persistently. It was considered another year of challenge for the management despite all the unfortunate circumstances with satisfying performance on the overall operating results.

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It can be said that BGT Corporation PLC is one of the leading retailers. For more than 20 years, we aim to develop and drive forward Body Glove brand awareness by introducing a wave of California lifestyles and setting the trend locally through its unique value which clearly differentiated our positioning from the competitors. The same can be said for our new addition brand of People’s Market’ [PM] that we will bring the street smart of London cultures to our local customers. The company believe in our innovative strengths of our business strategies to deliver the “On trend” genuine assortments and products with high quality best value, affordable for the larger groups of customers, focuses on building brand awareness with onward aggressive marketing strategies, using ranges of medias and online tools as medium to create closed network with our customers, introducing and updating new products, which in hope the end result is customers strong ‘Brand Loyalty’. Furthermore, BGT has attributed great importance to corporate social responsibility with strong commitment to support the worthy causes to our local communities and the environment. Last year, we had donated clothes to the flood victims of natural disaster and took part as a leader in the “Keep the Ocean Blue” campaign locally to protect the ocean and beaches following our BG principles in the U.S. continuously.

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We believe that CSR initiatives across all aspects allow us to build social awareness and in turn strengthen the Body Glove and People’s Market (PM) brands worldwide and trust that our contribution will capture the customer’s hearts and will generate cooperation and sharing ideas to create a model of knowledge development at all levels of our society for the community we live in. Finally, I strongly believe that the fiscal year 2011 will be another fruitful year for the company. We will continue to move forward and strive towards success and future growth to capitalize business gains and optimize sales and profitability in the best interests of all shareholders, cherished customers, stakeholders and other business alliance of BGT Corporation PLC as well as our management and staff whose efforts and dedications had contributed to the continued success of the company

Nopdol Tumwattana Chairman of the Board

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CEO MESSAGE Dear Shareholders, On behalf of the Board of Directors, I am pleased to present the Annual Report and Account of the Company and BGT Corporation PLC financial year ended 31 December 2010. I like to begin by expressing my gratitude to all of you for your believing in Body Glove and the lifestyle we present. The total company revenue for 2010 is increased by 21.74 % from the year prior with the figure of 811.94 million baht. Net Profit positively increased to 61.97 million baht or 33.31 %. BGT Corporation PLC aims to move forward on the path of growth and creativity to differentiate ourselves in the retail sector. At BGT, we’ve worked hard to achieve this high standard by staying focused on our core customer s and by exemplifying California Lifestyle and Surf culture herit age. Nevertheless, BGT’s mission is not only to be recognized among our target customers, but also to provide the absolute best value to our customer and shareholders. On top of the company’s onward aggressive strategies, we continued to focus on the emphasis of genuine products and designs development to diversify greater selections for the customers. At the same time, we maximize new communication channels and New Media marketing to create an ever-expandin g network of customers through Platinum Membership providing the members with special privileges with BG promotions, and newsletters on updating products to match every lifestyle. In addition, we have developed our online new media to update information via www.

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bodyglove.co.th and Facebook Fan page to allow our customers to reach us in a more modern dynamic place up close and personal. These social new media allow us to easily introduce, assist and answer the customers about the products on a “Real time” basis which proven a great success as our Facebook Fan page has become very popular, attracting thousands of fans and new customers for both Body Glove and People’s Market today Our performance in 2010 had reflected once again on the strengths of the operating disciplines, strong vision, clear marketing strategies and dedication of our management team along with the talent and energy of our personnel whose effort and knowledge had contributed to our achievements of significance sales and profits. It is my duty to once again thank all shareholders, bankers, suppliers and customer for their continued support. My thanks also go to the management and staff for their dedication and commitment to the Group in the light of less than favorable trading conditions.

Goh Kok Cheng, Dickson Chief Executive Officer / President

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FINANCIAL HIGHLIGHTS

2007

2008

2009

2010

Total Revenues

485,295,586.51 600,795,279.75

666,947,717.60 811,937,219.59

Profit Before Income Tax

52,028,784.81

53,869,996.71

59,367,579.70

84,521,752.00

Net Profit

39,602,340.36

41,546,013.46

46,490,776.91

61,974,632.49

Earnings per Share*

0.32

0.26

0.30

0.24

Dividend per Share

0.25

0.10

0.60

0.03 592,926,641.65

Total Assets

404,374,416.58 381,985,561.36

449,725,926.25

Total Liabilities

188,584,342.99 149,939,444.31

179,059,712.29 271,387,079.20

Total Shareholders’ Equity

215,790,073.59 232,046,117.05

270,666,213.96 321,539,562.45

Book Value per Share*

1.35

1.45

1.69

1.01

Notes 2010 : EPS and Book value per share decreased due to an increasing of register capital from 160,000,000 shares to 319,573,300 shares on May 20th, 2010.

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2010 Total Revenues (M.Baht)

2007

2008

2009

2010 Net Profit (M.Baht)

2007

2008

2009

2010 Total Liabilities (M.Baht)

2007

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2008

2009

2007

2008

2009

2010

Profit Before Income Tax (M.Baht)

2007

2008

2009

2010

Total Assets (M.Baht)

2010 Total Shareholders’ Equity (M.Baht) 2007

2008

2009

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CORPORATE MANAGEMENT BOARD OF DIRECTOR

Mr. Nopdol Tumwattana Chairman of The Board

Mr. Goh Kok Cheng, Dickson Director

Mr. Goh Kok Beng

EXECUTIVE OFFICERS

Mr. Nopdol Tumwattana

Share Registrar Thailand Securities Depository Co.,Ltd.

Mr. Goh Kok Cheng, Dickson

Capital Market Academy Building 2/7 Moo.4 ( North Park Project ) Vibhavadi- Rangsit Rd. Tung Song Hong Laksi Bangkok 10210 Tel : 66 (0) 2596-9000 Fax : 66 (0) 2832-4994-6

Chairman of The Board

President / Chief Executive Officer

Ms. Waristha Thapanasakulvong

Chief Financial Officer

Director

Mrs. Nuttamon Bualah Chief Business Officer

Auditor A.M.T. Associates

Ms. Dolnapa Tumwattana

491/27 Silom Plaza Silom Road Bang Ruk Bangkok 10550 Tel : 66 (0) 2234-1676 Fax : 66 (0) 2237-2133

Mrs. Mallika Leeraphant Director

Chief Marketing Officer

Asst. Prof. Dr. Nantarika Chansue Director

Pol. Gen. Sereepisuth Temeeyaves Director, Independent Director Chairman of Audit Committee

Prof.Dr. Surapone Virulrak Director, Independent Director Audit Committee Member

Mr. Panu Kongtan Director, Independent Director Audit Committee Member

CORPORATE INFORMANTION

Ms. Methira Thongsuwan Senior Account Manager

Mr. Chai Ratanamahawong Senior Financial Manager

Mr. Thammarak Khunying Warehouse Manager

Mr. Thanawoth Chaikrue Regional Sales Manager

Ms. Nattanant Simsa Assistant Area Manager

Mr. Thamrongpon Limratanapant Assistant Area Manager

Legal Advisor Allen & Overy (Thailand) Company Limited 22nd Floor Sindhorn Building Tower III 130-132, Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Thailand Tel : 66 (0) 2263-7600 Fax : 66 (0) 2263-7699 www.allenovery.com

Registered Office 299/9 Moo 7 , Phaholyothin Rd.Anusawaree Bangkhen Bangkok 10220 Tel : 66 (0) 2972-3460-9 Fax : 66 (0) 2972-3479 Corporate Website

www.bodyglove.co.th Investor Relation Website

www.bodyglove.co. th/investor

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Board of Directors’ Profiles

Mr. Nopdol Tumwattana Chairman of the Board · Age 59 · Thai

Mr. Nopdol Tumwattana was appointed as the Chairman of Body Glove (Thailand) Company Limited in 2000 to May 2007. The Company’s name has been changed to BGT Corporation Public Company Limited on May 6th, 2007 then he has been appointed as the Chairman of the Board of the Company in June 2007. At the beginning he and Mr. Mark J. Walden, an American business entrepreneur were entering into a joint venture to form Thai Segway International Co., Ltd., which its main objective to distribute ready-to-wear apparels under the trademarks of Walt Disney and Body Glove to the U.S.A based companies. As a result, he has gained a closed reputable business relationship with the Body Glove trademark owner. He has been appointed as the Managing Director of Gold Master Public Company Limited since 1991 till present. Moreover, he has been the Chairman of TSI International Company Limited since 1988 until now. For his educational background, he is a candidate Doctoral in Educational Administration Program, Doctor of Philosophy of Siam University. And he received his master degree, Political Science, Political Management Program from Ramkhamhaeng University. Additionally he received the Certificate in Lawyer Program Class 23 from the Institute of Training Center of Lawyers Council 2004 and passed IOD Training “Director Accreditation Program” (DAP) Class 50/2006 in January 25th, 2006. His ratio and number of shares is 12.22% or 39,064,000 shares.

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Board of Directors’ Profiles

Mr. Goh Kok Cheng, Dickson

President / Chief Executive Officer · Age 44 · Malaysian He has been appointed as the President / Chief Executive Officer of Body Glove (Thailand) Company Limited since 2004. The formerly name of the Company was changed to BGT Corporation Public Company Limited in 2007. Educationally he received his secondary education at Chung Ling High School in Penang and subsequently continued his higher education in overseas for 4 years. He has more than 22 years of extensive experience in the garment industry and has a comprehensive understanding and in-depth knowledge of the apparel market. His rise to success and prominence is attributed to his business acumen, his vast experience in the retail industry and his canny ability to spot business opportunities. He was the co- founder of Body Glove (M) Sdn Bhd which was instrumental for introducing Body Glove into the Malaysian market back in 1995. In 2004, spurred by the success in the Malaysian market, he decided to venture offshore and move into repeating the same business formula in Thailand. His other business interests span far and wide across the globe into other countries. He is the Founding Director of Body Glove Asia Office, Body Glove Japan. He is also one of the major shareholders of Yen Global Berhad a company listed on Main Market of Bursa Malaysia Berhad and deemed interested by virtue of his shareholdings in Extreme Lifestyle (M) Sdn Bhd. His ratio and number of shares is 15.97% or 51,046,400 shares.

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Mr. Goh Kok Beng Director · Age 49 · Malaysian

He was appointed as the Director of Body Glove (Thailand) Company Limited from 2004 to May 2007 and as the Director of BGT Corporation Public Company Limited after its name was changed in 2007. He received his secondary education at Chung Ling High School in Penang and subsequently continued his studies in Singapore. He was a founding member of Body Glove (M) Sdn. Bhd. (BGM) and has more than 29 years if extensive and comprehensive experience and network in the apparel industry and market both locally and internationally. He is was one of the major shareholders and Executive Chairman of Yen Global Berhad a listed company on the Main board of Bursa Malaysia Berhad and sits on the Board of several private limited companies.

Mrs. Mallika Leelaphant Director · Age 57 · THAI

She was appointed as the Director of Body Glove (Thailand) Company Limited in 2000 to May 2007 until the company’s name has been changed to BGT Corporation Public Company Limited then she also has been appointed as the Director of its. Additionally she has joined Yentafo 2005 Changwattana Company Limited since 2005 and held as the Director. Additionally she has been appointed as the Director of Yentafo 2004 Motorway Company Limited and Pang Yim Company Limited in 2004. Finally she has been with Pang Yim Company Limited as its Director. She received her Master degree, Education, California Polytechnic University, Pomona, USA. She is Mr. Nopdol Tumwattana’s sister and Miss Dolnapa Tumwattana’s aunt.

His ratio and number of shares is 16.29% or 52,064,400 shares.

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Board of Directors’ Profiles

Asst. Prof. Dr. Nantarika Chansue Director · Age 49 · Thai

She was appointed as the Director of Body Glove (Thailand) Company Limited from 2004 to May 2007 and as the Director of BGT Corporation Public Company Limited after its name was changed in 2007. In 2001 she has been appointed as the Director of the Education Alliance Company Limited. She has been as the Director of Education First Co., Ltd. since 2000 till present. Moreover she has been appointed as Assistant Professional (C9) of Aquatic Animal Medicine Unit, Department of Medicine, Faculty of Veterinary Medicine, Chulalongkorn University, a position she still holds at present. She received her Doctor of Philosophy, Marine Science (Immunotoxicology), College of William and Mary, U.S.A. Her ratio and number of shares is 0.88 % or 2,800,000 shares.

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Pol.Gen. Sereepisuth Taemeeyaves

Director, Independent Director and Chairman of Audit Committee · Age 62 · Thai He was appointed as the Director Independent Director and Chairman of Audit Committee of Body Glove (Thailand) Company Limited in 2000 to May 2007. The Company’s name has been changed to BGT Corporation Public Company Limited on May 6th, 2007 then he has been appointed as the Director, Independent Director and Chairman of Audit Committee of the Board of the Company in June 2007 till the present. Additionally he also holds as an Independent Director, Nomination, Remuneration Committee and Audit of PTTAR Public Company Limited at present. He was appointed as National Police Chief of Royal Thai Police from 2007 to 2008. He is a graduate from the Royal Police Cadet Academy, Thailand with a Bachelor of Science Degree majoring in Public Administration.

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Professor Emeritus Dr. Surapone Virulrak

Director, Independent Director and Chairman of Audit Committee 路 Age 66 路 Thai He has been appointed as the Director, Independent Director and Audit Committee of Body Glove (Thailand) Company Limited until its name has been changed to BGT Corporation Public Company Limited in June 2007, he stills hold at present. He has been the Director of Gold Master Public Company Limited since 1995. He received his Doctor of Philosophy, Drama and Theatre, University of Hawaii, U.S.A

Mr. Panu Kongtan

Director, Independent Director and Chairman of Audit Committee 路 Age 46 路 Thai I n February 2009 he has been appointed as the Director, Independent Director and Audit Committee of Body Glove (Thailand) Company Limited until its name has been changed to BGT Corporation Public Company Limited in June 2007, he stills hold at present. He has been the Vice President of Globlex Advisory Public Company Limited in Investment Banking Department since January 2011 and has been also appointed as the Senior Vice President of Globlex Advisory Public Company Limited in Investment Banking Department in June 1st, 2009. Formerly, he was the Deputy Director of TMB Bank Public Company Limited in Corporation Finance Department. He was appointed as an Investment Banking Manager of Seamico Securities Public Company Limited during 2007-2008. He joined Bangkok Bank Public Company Limited in Corporation Finance Department from 2006 to 2007 as a Specialist. About his educational, he received his Master degree of Business Administration and Bachelor degree of Science from Songkhlanakarin University.

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Milestones and Significant Changes and Development

1987 Mr. Nopdol Tumwattana and Mr. Mark J. Walden, an American business entrepreneur were entering into a joint venture to form Thai Segway International Co., Ltd., which its main objective to distribute ready-to-wear apparels under the trademarks of Walt Disney and Body Glove to the U.S.A based companies. As a result, Mr. Nopdol Tumwattana has gained a closed reputable business relationship with the Body Glove trademark owner. 1988 Body Glove (Thailand) Public Company Limited was found by Mr.Nopdol Tumwattana, established on March 31st, 1988 with registered capital of Baht 10 million, its main objectives is to distribute ready-to-wear apparels and accessories under the Body Glove trademark. 1991

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

1994

The Company has increased its share capital to support the Company’s business expansion from Baht 20 million to Baht 40 million.

2000

The Company has increased its share capital to support the Company’s business expansion from Baht 40 million to Baht 60 million.

2004 There was change in the shareholding and management structure as Mr. Goh Kok Cheng, Dickson and Mr. Goh Kok Beng become 49% shareholders in the total equity of BGT. Both have experience in the management of Body Glove (M) Sdn. Bhd. which engages in distribution of apparels under Body Glove trademark in Malaysia. Mr.Goh Kok Cheng, Dickson, is no longer involved in Body Glove (M) Sdn. Bhd. but is actively involved in the Thailand operations. This effectively turned around the company’s operations and performance. 2005 Mr. Goh Kok Cheng, (Dickson) and Mr.Nopdol Tumwattana, restructure the company by concentrated on opening own Body Glove retail store chain and implemented new product line by set new target market and brand positioning. Also introduce matured retail chain system & management information system of the company. 2006 At the end of 2006 YoY Revenue Growth 36.84% Gross Profit margin is 54.31% and Net Profit Growth 88.31%. (All time highest record on company Sales revenue & Net Profit) 2007

• On May 3rd, 2007 the Company entered into a 99-Year exclusive operating, License and Sub-License for 6 territories in Asia included Thailand with IP Global Investments America (IPG), the holder of the license for Asia Pacific. • On June 29th, 2007 the Company increased its share capital to support the Company’s business expansion from Baht 60 million to Baht 80 million, and changed the name from “Body Glove (Thailand) Co., Ltd.” to “Body Glove (Thailand) Public Company Limited”.

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• On November 23rd, 26th and 27th, 2007 the Company has initiated public offering of 20 million shares with par value Baht 1.00 each to public at Baht 4.70 per share. • On November 30th, 2007 Registered Paid-up capital of Baht 80 million with Ministry of Commerce. • On December 11th, 2007 the Company registered as a listed company in the stock exchange of Thailand/mai • At the end of 2007, YoY Revenue Growth 27.83%, Gross Profit Margin is 53.80% and Net Profit Growth 53.87%

2008

• On May 6th, 2008 the Company’s name has been changed from “Body Glove (Thailand) Public Company Limited” to “BGT Corporation Public Company Limited”

2009

• Signing new brand “Peoples Market” with London base company Two Agent See International Limited (TAS) to implement London Fashion Culture to Thailand and Asia at affordable price. • At the end of 2009, YoY Revenue Growth 11.01%, Gross Profit margin is 49.91% and Net Profit Growth 11.90% which was consistent growth for five consecutive years.

2010

• On May 20th, 2010, registered an increasing of the authorized share capital from Baht 80 million to Baht 160 million. • June 2010, total stores are 100 stores in all major shopping throughout Thailand. • On Dec 31st, 2010, total stores are 131 stores in all major shopping throughout Thailand. In the past years, the Company has constantly developed and introduced new designs of ready-to-wear apparels and related accessories under the trademark of Body Glove to match the target group of customers and their demand at different times. At the beginning, the selling of Body Glove apparels in Thailand were emphasized on the bright and colorful design pattern, and later, developed new pattern to match the target customer’s preference and lifestyle under the concept of Surf Fashion & Easy Lifestyle. As a result, the Company’s products had gained a broaden popularity among the target group of customers extensively. By the rights of Body Glove trademark, it included the expansion of retails operation and being a representative of the manufacturer and distributor of ready-to-wear apparels and related products under the exclusive rights of Body Glove trademark in 6 countries: Thailand, Vietnam, Burma, Laos, Cambodia and Philippines. Moreover, the Company has granted the right to extend such rights of Body Glove trademark to other individuals as deem appropriate.

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MAJOR SHAREHOLDERS AS OF Dec 31st 2010

No.

Stockholder name

No. of shares

1.

Miss Dolnapa Tumwattana

77,250,000

2.

MR. Goh Kok Beng

52,064,400

3.

MR. Goh Kok Cheng, Dickson

51,046,400

4.

Mr. Nopdol Tumwattana

39,064,000

5.

Mr. Somsak Tirakanon

11,520,100

6.

Mr. Peeranart Chockwattana

7,458,500

7.

Peerapoom Group, by Peeranart

6,457,200

8.

Peeranadda Group, by Peeranart

6,016,500

9.

Mr. Napat Panchakunathorn

4,400,000

10.

Mr. Rungsak Kamsiritrakul

4,000,000

11.

Mrs. Sujedtana Sodtipan

3,957,100

12.

Miss Pinsiri Saotong

2,967,000

13.

MR. Siew Theam Hee

2,956,200

14.

Mrs. Nantarika Chansue

2,800,000

15.

Miss Nampueng Saeng-nguen

2,606,200

16.

MR. LIEW KIAN HUAT

2,456,000

17.

Miss Thunyaporn Sopajitwattana

2,440,000

18.

MR. MATTHEW DRAKE WALDEN

2,400,000

19.

Lanpoo Group, by Peeranart

2,370,000

20.

Peerasu Group, by Peeranart

2,088,700

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No.

Stockholder name

No. of shares

21.

Mr. Chayaphol Lheerapun

1,900,000

22.

Peeramanee Group, by Peeranart

1,715,400

23.

Mrs. Manoon Potipuk

1,633,800

24.

Mr. Kritpech Sriparn

1,400,000

25.

Mr. Nattachart Kamsiritrakul (Mario)

1,200,000

26.

MISS Lok Phoy Li

970,000

27.

Mr. Jumlong Anantaumporn

956,100

28.

Thai NVDR Co., Ltd.

889,100

29.

Miss Saifon Tungjaitong

829,000

30.

Pol.Gen. Olan Payakkaporn

804,000

31.

MISS LAI KUEN FONG

800,000

32.

Mr. Pisit Sodtipanchai

781,000

33.

Miss Waristha Thapanasakulvong

760,000

34.

Mr. Theerachart Kitrungreaungpaisarn

750,000

35.

Miss Kornwipa Srijamreon

728,000

36.

Miss Boonsri Boonpiti

700,000

37.

Mr. Somsak Jaruswasinkul

619,600

38.

Mrs. Supranee Srisuda

611,500

39.

Mr. Taveesak Wiwatjaroenkul

599,200

40.

Peeratorn Group, by Peeranart

585,900

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Contents Audit Committee’s Report

2

Financial Highlights

4

Profiles of Board of Directors and Executives

5

Major Shareholders

9

Nature of the Business

10

Management’s Discussion and Analysis

19

Risk Factors

29

Connected Transactions

32

Management

38

Financial Statements

52

Remuneration of the Auditor

75

Company Profile

76

1


Report of the Audit Committee on Corporate Governance To: The shareholders of BGT Corporation Public Company Limited The Audit Committee of BGT Corporation Public Company Limited comprising of Pol.Gen. Sereepisuth Taemeeyaves as Chairman of the Audit Committee, Professor Emeritus Dr. Surapone Virulrak and Mr. Panu Kongtan as Audit Committee. All of the Audit Committee is independent directors possessing qualifications. There were 4 Audit Committee meetings in the financial year of 2010 and attended every meeting with management executives, external auditors and internal auditors when appropriate, pertaining to the following issues: • Review the interim and annual financial statement of 2010 In order that the interim and annual financial statement is correct adhering to the general accepted accounting principles and the information disclosure is adequate. The Audit Committee has reviewed, questioned and listened to the management and the external auditor’s clarifications, concerning the correctness and completeness of the financial statements and the adequacy of information disclosure. The Audit Committee agreed with the external auditors that the financial statements were correct adhering to the general accepted accounting principles. • Review the internal control system The Audit Committee has reviewed the operation information and the internal control system in order to evaluate the sufficiency and appropriateness of the internal control system by considering the Company’s risk factors, and has acknowledged the operation information and suggestions of the internal control department based on the analysis of the workflow of internal control system and propose to the management executives to adjust the policy and follow up on par with standard continually. The Audit Committee has found no weakness or significant deficiency, appropriate asset safeguarding, correct, complete and reliable information disclosure that the Company had good internal control system. • Review compliance with the Securities and Exchange Acts, Regulations of the Stock Exchange of Thailand (SET) The Audit Committee has considered in accordance to compliance with the Securities and Exchange Acts, Regulations of the Stock Exchange of Thailand (SET), and any other relevant laws, including the compliance with the Company’s requirement and obligations to external parties. The Audit Committee did not find any significant incompliance to the law, Regulations and the Company’s obligations to external parties. • Review and give opinion to connected transactions or transactions that may have conflict of interests In order that the information disclosure of such transactions are to comply with Regulation of the Stock Exchange of Thailand (SET), and the office of the Securities and Exchange Commission (SEC). The External Auditors had opinion that the significant transactions with the connected persons were disclosed and shown in the Financial Statements and Note to Financial Statements and the Audit Committee had opinion as same as the External auditors and also considered that such transactions were reasonable and the most beneficial to the business of the Company and were disclosed correctly and completely. • Consider Appointing the External Auditors The Audit Committee has considered appointing the External auditors and their Remuneration to propose to the Board of Directors to ask for an approval of the Annual Shareholder’s Meeting. In summary, the Audit Committee had fulfilled the responsibility of the Audit Committee Charter that was approved by the Board of Directors and found that the Company disclosed financial and operation information properly and correctly, had appropriate and effectiveness internal control and audit, and risk management, complied with laws, regulations and obligations, disclosed the connected transactions correctly, performed duties in compliance with the good corporate governance principles, with adequacy, transparency and reliably. Pol.Gen......................................................... (Sereepisuth Taemeeyaves) Chairman of the Audit Committee

2


Milestones and Significant Changes and Development 1987 Mr. Nopdol Tumwattana and Mr. Mark J. Walden, an American business entrepreneur were entering into a joint venture to form Thai Segway International Co., Ltd., which its main objective to distribute ready-to-wear apparels under the trademarks of Walt Disney and Body Glove to the U.S.A based companies. As a result, Mr. Nopdol Tumwattana has gained a closed reputable business relationship with the Body Glove trademark owner. 1988 Body Glove (Thailand) Company Limited was found by Mr.Nopdol Tumwattana, established on March 31st, 1988 with registered capital of Baht 10 million, its main objectives is to distribute ready-to-wear apparels and accessories under the Body Glove trademark. 1991 The Company has increased its share capital to support the Company’s business expansion from Baht 10 million to Baht 20 million. 1994 The Company has increased its share capital to support the Company’s business expansion from Baht 20 million to Baht 40 million. 2000 The Company has increased its share capital to support the Company’s business expansion from Baht 40 million to Baht 60 million. 2004 There was change in the shareholding and management structure as Mr. Goh Kok Cheng, Dickson and Mr. Goh Kok Beng become 49% shareholders in the total equity of BGT. Both have experience in the management of Body Glove (M) Sdn. Bhd. which engages in distribution of apparels under Body Glove trademark in Malaysia. Mr.Goh Kok Cheng, Dickson, is no longer involved in Body Glove (M) Sdn. Bhd. but is actively involved in the Thailand operations. This effectively turned around the company’s operations and performance. 2005 Mr. Goh Kok Cheng, (Dickson) and Mr.Nopdol Tumwattana, restructure the company by concentrated on opening own Body Glove retail store chain and implemented new product line by set new target market and brand positioning. Also introduce matured retail chain system & management information system of the company. 2006 At the end of 2006 YoY Revenue Growth 36.84% Gross Profit margin is 54.31% and Net Profit Growth 88.31%. (All time highest record on company Sales revenue & Net Profit) 2007 ● On May 3rd, 2007 the Company entered into a 99-Year exclusive operating, License and Sub-License for 6 territories in Asia included Thailand with IP Global Investments America (IPG), the holder of the license for Asia Pacific. On June 29th, 2007 the Company increased its share capital to support the Company’s business expansion from Baht 60 million to Baht 80 million, and changed the name from “Body Glove (Thailand) Co., Ltd.” to “Body Glove (Thailand) Public Company Limited”. rd th th ● On November 23 , 26 and 27 , 2007 the Company has initiated public offering of 20 million shares with par value Baht 1.00 each to public at Baht 4.70 per share. th ● On November 30 , 2007 Registered Paid-up capital of Baht 80 million with Ministry of Commerce. th ● On December 11 , 2007 the Company registered as a listed company in the stock exchange of Thailand/mai ● At the end of 2007, YoY Revenue Growth 27.83%, Gross Profit Margin is 53.80% and Net Profit Growth 53.87% 2008 ● On May 6th, 2008 the Company’s name has been changed from “Body Glove (Thailand) Public Company Limited” to “BGT Corporation Public Company Limited” 2009 ● Signing new brand “Peoples Market” with London base company Two Agent See International Limited (TAS) to implement London Fashion Culture to Thailand and Asia at affordable price. ● At the end of 2009, YoY Revenue Growth 11.01%, Gross Profit margin is 49.91% and Net Profit Growth 11.90% which was consistent growth for six consecutive years. 2010 ● On May 20th, 2010, registered an increasing of the authorized share capital from Baht 80 million to Baht 160 million. ● June 2010, total stores are 100 stores in all major shopping throughout Thailand. st ● On Dec 31 , 2010, total stores are 131 stores in all major shopping throughout Thailand. In the past years, the Company has constantly developed and introduced new designs of ready-to-wear apparels and related accessories under the trademark of Body Glove to match the target group of customers and their demand at different times. At the beginning, the selling of Body Glove apparels in Thailand were emphasized on the bright and colorful design pattern, and later, developed new pattern to match the target customer’s preference and lifestyle under the concept of Surf Fashion & Easy Lifestyle. As a result, the Company’s products had gained a broaden popularity among the target group of customers extensively. By the rights of Body Glove trademark, it included the expansion of retails operation and being a representative of the manufacturer and distributor of ready-towear apparels and related products under the exclusive rights of Body Glove trademark in 6 countries: Thailand, Vietnam, Burma, Laos, Cambodia and Philippines. Moreover, the Company has granted the right to extend such rights of Body Glove trademark to other individuals as deem appropriate.

3


FINANCIAL HIGHLIGHTS (Btm) BALANCE SHEETS (Btm)

2008

2009

2010

TOTAL ASSETS

381.99

449.73

592.93

TOTAL LIABILITIES

149.94

179.06

271.39

TOTAL SHAREHOLDERS’ EQUITY

232.05

270.67

321.54

Revenue from sale of goods

598.50

663.25

807.06

Total Revenues

600.80

666.95

811.94

Cost of sale of goods

287.98

332.23

384.43

Selling expenses

162.43

181.20

227.50

53.22

49.22

63.10

542.61

604.70

722.08

58.19

62.25

89.85

4.32

2.88

5.33

Income tax expenses

12.32

12.88

22.55

Net Profit

41.55

46.49

61.97

FINANCIAL RATIOS

Revenue growth (%)

23.80%

11.01%

21.74%

Net Profit growth (%)

4.91%

11.90%

33.31%

EBIT growth (%)

1.20%

6.99%

44.34%

51.88%

49.91%

52.37%

6.92%

6.97%

7.63%

0.65 time

0.66 time

0.84 time

ROA (%)

10.57%

11.18%

11.89%

ROE (%)

18.55%

18.50%

20.93%

STATEMENTS OF INCOME (Btm)

Administrative expenses Total Expenses Profit before Finance cost and Income tax exp. Finance Cost

Gross profit margin (%) Net profit margin (%) DE ratio (time)

4


5

Name Position

Age (Yrs.)

Highest Educational

43 - Chung Ling High School (A Level)

49 - Chung Ling High School

(A Level)

2. Mr. Goh Kok Cheng, (Dickson)* (President / Chief Executive Officer)

3. Mr. Goh Kok Beng* (Director)

1 Mr. Nopdol Tumwattana* 59 - Candidate Doctor of Philosophy (Chairman of the Board) Program in Educational Administration, Siam University - M.A. Political Science, Political Management Program, Ramkhamhaeng University

No.

Relationship Period

Director

2002 - present

Director Director Director Director Director Director

Director

Director

2002 - present

2004 - May 2007 Director

16.29% Mr. Goh Kok Cheng, June 2007 - present or (Dickson)’s brother 52,064,400 shares 2004 - May 2007 2002 - present 2002 - present 1999 - present 1995 - present 1995 - present

15.97% or 51,046,400 shares

1991 - present Managing Director 1988 - present Chairman Mr. Goh Kok Beng’s June 2007 - present President / Chief brother Executive Officer

BGT Corporation Public Company Limited (Former name was Body Glove (Thailand) Public Company Limited) Body Glove (Thailand) Company Limited Yen Group Holding Corporation Sdn Bhd Yen Club Asia Sdn Bhd Yen Group Properties (M) Sdn Bhd Yen Shoes (M) Sdn Bhd Irama Pilihan Sdn Bhd

Yen Group Holding Corporation Sdn Bhd

Yen Club Asia Sdn Bhd

Gold Master Public Company Limited TSI International Co., Ltd. BGT Corporation Public Company Limited (Former name was Body Glove (Thailand) Public Company Limited) Body Glove (Thailand) Company Limited

BGT Corporation Public Company Limited (Former name was Body Glove (Thailand) Public Company Limited) Body Glove (Thailand) Company Limited

5 Years’ Working Experience Position Company

12.22% Mrs. Mallika June 2007 - present Chairman of the or Leeraphant’s brother Board 39,064,000 shares and Miss Dolnapa Tumwattana’s father 2000 - May 2007 Chairman

Ratio and No. of shares as of Dec. 31, 2010

Profiles of Board of Directors and Executives


6

6.

5.

Pol.Gen. Sereepisuth 62 Taemeeyaves (Director, Independent Director and Chairman of Audit Committee)

- B.S. Public Administration (Royal Police Cadet Academy, Thailand)

-

-

Director Director Director Director

5 Years’ Working Experience Position Company Director BGT Corporation Public Company Limited (Former name was Body Glove (Thailand) Public Company Limited) Director Yentafo 2005 Changwattana Co., Ltd.

Yentafo 2004 Motorway Co., Ltd. Pang Yim Co., Ltd. Body Glove (Thailand) Company Limited BGT Corporation Public Company Limited (Former name was Body Glove (Thailand) Public Company Limited) Director Body Glove (Thailand) Company Limited Director The Education Alliance Co., Ltd. Director Education First Co., Ltd. Assistant Professional Aquatic Animal Medicine Unit, (C9) Department of Medicine, Faculty of Veterinary Medicine, Chulalongkorn University June 2007 - present Director, Independent BGT Corporation Public Company Limited Director and (Former name was Body Glove (Thailand) Chairman of Audit Public Company Limited) Committee At present Independent Director, PTTAR Public Company Limited Nomination, Remuneration Committee and Audit Committee May - June 2007 Director, Independent Body Glove (Thailand) Company Limited Director and Chairman of Audit Committee 2007 - 2008 National Police Chief Royal Thai Police

Age Highest Ratio and No. of shares Relationship (Yrs.) Educational as of Dec. 31, 2010 Period 57 - M.A. Education, - Mr. Nopdol June 2007 - present California Polytechnic University, Tumwattana’s sister Pomona, USA and Miss Dolnapa Tumwattana’s aunt 2005 - present 2004 - present 2004 - present 2000 - May 2007 Asst. Prof. Dr. Nantarika 49 - PhD. Marine Science 0.88 % - June 2007 - present Chansue (Immunotoxicology), College of or (Director) William and Mary, U.S.A. 2,800,000 2004 - May 2007 shares 2001 - present 2000 - present 1989 - present

No. Name Position 4. Mrs. Mallika Leelaphant* (Director)

Profiles of Board of Directors and Executives (Cont’d)


7

46 - Master of Business

Administration, Songkhlanakarin

University.

29 - Master of Science in Marketing Program (MIM), Thammasat University.

9. Miss Dolnapa Tumwattana (Chief Marketing Officer)

Highest Educational

8. Mr. Panu Kongtan (Director, Independent Director and Audit Committee)

Age (Yrs.)

66 - Ph. D. (Drama and Theatre),

University of Hawaii, U.S.A.

Name Position

7. Professor Emeritus Dr. Surapone Virulrak (Director, Independent Director and Audit Committee)

No.

24.17% or 77,250,000 shares

-

-

Ratio and No. of shares as of Dec. 31, 2010

5 Years’ Working Experience Period Position Company - June 2007 - present Director, Independent BGT Corporation Public Company Director and Audit Limited (Former name was Body Glove Committee (Thailand) Public Company Limited) May - June 2007 Director, Independent Body Glove (Thailand) Company Limited Director and Audit Committee 1995 - present Director Gold Master Public Company Limited - February 2009 Director, Independent BGT Corporation Public Company present Director and Audit Limited (Former name was Body Glove Committee (Thailand) Public Company Limited) January 2011 Vice President Globlex Advisory Public Company present Investment Banking Limited June 1st, 2009 - Senior Vice President Globlex Advisory Public Company present of Investment Limited Banking 2008 - May 30th, Deputy Director TMB Bank Public Company Limited 2009 2007 - 2008 Investment Banking Seamico Securities Public Company Manager Limited 2006 - 2007 Capitalized Banking Bangkok Bank Public Company Limited Specialist 2 Mr. Nopdol February 2009 Chief Marketing BGT Corporation Public Company Tumwattana’s present Officer Limited (Former name was Body Glove daughter and Mrs. (Thailand) Public Company Limited) Mallika Leeraphant’s June 2007 Operations Director Body Glove (Thailand) Company Limited niece February 2009 2004 - May 2007 Marketing and Body Glove (Thailand) Company Limited Operation Manager June - October Assistant Designer Bisou Jeans / True Meaning, USA 2004 Internship

Relationship

Profiles of Board of Directors and Executives (Cont’d)


8

- B.S. Business Administration, Department of Accounting, Ramkhamhaeng University

- Master of Business Administration, SME Management, Ramkhamhaeng University

42

39

12. Miss Methira Thongsuwan (Senior Account Manager) 13. Mrs. Natthamon Bualar (Chief Business Officer)

Remark: * The Director number 1, 2, 3 and 4 are authorized directors

- B.S. Business Administration, Finance and Banking, Assumption University

Highest Educational

11. Mr. Chai 43 Ratanamahawong (Senior Finance Manager)

Age (Yrs.)

- B.S. Business Administration, Management, Ramkhamhaeng University

Name Position

10. Miss Waristha 47 Thapanasakunvong (Chief Financial Officer)

No.

-

-

-

0.24 % or 760,000 shares

Ratio and No. of shares as of Dec. 31, 2010

-

-

-

-

Relationship Position

5 Years’ Working Experience Company

Body Glove (Thailand) Company Limited Body Glove (Thailand) Company Limited BGT Corporation Public Company Limited (Former name was Body Glove (Thailand) Public Company Limited) 2006 - 2007 Finance Manager Body Glove (Thailand) Company Limited 2001 - 2005 Financial Analyst Tuntex (Thailand) Public Co., Ltd. June 2007 - present Senior Account BGT Corporation Public Company Limited Manager (Former name was Body Glove (Thailand) Public Company Limited) 1991-May 2007 Account Manager Body Glove (Thailand) Company Limited February 2009 Chief Business BGT Corporation Public Company Limited present Officer (Former name was Body Glove (Thailand) Public Company Limited) June 2007 Personal Assistant BGT Corporation Public Company Limited February 2009 (Former name was Body Glove (Thailand) Public Company Limited) 2004 - May 2007 Personal Assistant Body Glove (Thailand) Company Limited 1996 - 2002 Executive Secretary Uniroyal (Thailand) Company Limited

2006 - May 2007 Financial Controller 1996 - 2006 Account Manager June 2007 - present Senior Finance Manager

June 2007 - present Chief financial Officer BGT Corporation Public Company Limited (Former name was Body Glove (Thailand) Public Company Limited)

Period

Profiles of Board of Directors and Executives (Cont’d)


Major Shareholders

List of the top 10 shareholders as shown in the Share Registration Book as of December 31st, 2010 Shares 1. Miss Dolnapa Tumwattana 2. Mr. Goh Kok Beng 3. Mr. Goh Kok Cheng, (Dickson) 4. Mr. Nopdol Tumwattana 5. Mr. Somsak Tirakanant 6. Mr. Peeranart Chockwattana 7. Peerapoom Group, by Peeranart 8. Peeranadda Group, by Peeranart 9. Mr. Napat Panchakunathorn 10. Mr. Rungsak Kamsiritrakul   Total Shares

77,250,000 52,064,400 51,046,400 39,064,000 11,520,100 7,458,500 6,457,200 6,016,500 4,400,000 4,000,000 259,277,100

Ratio (%) 24.17 16.29 15.97 12.22 3.60 2.33 2.02 1.88 1.38 1.25  81.13

The groups of major shareholders responsible for setting company policies is from Tumwattana’s Family being Mr. Nopdol Tumwattana as Directors, in addition to members Malaysian Investors being Mr. Goh Kok Cheng, (Dickson) and Mr. Goh Kok Beng.

9


Overview of Nature of the Business BGT Corporation Public Company Limited has been in a retail business of Ready-to-wear apparels and related accessories under the trademark of Body Glove with Hand Device as its logo. The distribution has passed through both own stores and department stores since 1988 and expanded to all over regions of Thailand. In 2010, one of the Company’s strategic focuses is to continuously develop store expansion by adding more flagship stores and counters in the department stores. The company differentiates itself with uniqueness in store designs and consistently redecorates existing flagship stores to be as up-to-date as newly opened stores. Additionally, the Company places high emphasis on the selection of new store location, which is in prime areas and serve well with market demands. Additionally, the Company is the authorized exclusive licensee to carry out its retail and distribution under the licensed trademark Peoples Market (PM). As of December 31st, 2010, the products have been distributed and sold through 66 Body Glove flagship stores located in prime business locations and through 65 counters in the leading department stores in Thailand. Moreover, the Company also has its head office and one warehouse, located at the address 299/9 Moo 7, Phaholyothin Road, Bangkhen, Bangkok, where is convenient for distributing products to various stores and overseeing the inventory. As of December 31st, 2010, the Company distributes the products domestically through the following channels: (1) Distribution passes through 66 Body Glove and Peoples Market flagship stores located in major shopping malls/complex in Bangkok and major provinces in all regions of the country:

Province (brand) Bangkok and Vicinity Areas (Body Glove) (Peoples Market) Provincial Areas (Body Glove)

10

No. of Shops 18 2 46

Address (1) MBK Center (2) Seacon Square (3) Fashion Island (4) The Mall BangKapi (5) Central Plaza, Ladprao (6) Central City Bangna (7) Central Plaza, Pinklao (8) Central Plaza, Rama 2 (9) The Mall, Ngamwongwan (10) The Mall, ThaPra (11) Tesco Lotus, Rama 4 (12) Thaniya Plaza, BTS Wing (13) Future Park, Rangsit (14) Central Town, Rattanathibet (15) Central Plaza, Chaengwattana (16) Tesco Lotus, Srinakarin (17) Central Plaza, Rama 3 (18) Future Park, Rangsit (G-19) (1) Central Plaza, Pinklao (2) Fashion Island (1) Central Airport Chiangmai (2) Kad Suan Kaew Shopping Center (3) Big C Supercenter, Chiangrai (4) Central Plaza Pattaya Center (5) Royal Garden, Pattaya (6) Harbor Mall, Chonburi (7) Ayudhya Park (8) Premium Outlet Project : Cha-am (9) Hua-Hin Market Village (10) The Mall, Nakorn Ratchasima (11) Big C, Ubon Ratchatani (12) SK Shopping Center, Ubon Ratchathani (13) Charoensi Arcade, Udonthani (14) Big Chiang Shopping Center (15) Com Building Shopping Plaza (16) Fairy Plaza, Khonkaen (17) Tesco Lotus, Surat Thani (18) Indra Hotel, Had Yai (19) Tesco Lotus, Phuket (20) Tesco Lotus, Krabi (21) Carrefour, Nakorn Sritammarat (22) Tesco Lotus, Tung Song Nakorn Sritammarat (23) Fairy Land, Nakorn Sawan (24) Tesco Lotus, Salaya Nakorn Pathom (25) Tesco Lotus, Ranong (26) Big C Supercenter, Yasothorn (27) Coliseum, Pattalung (28) Surin Plaza, Surin


Province (brand)

Total

No. of Shops

66

Address (29) Tesco Lotus, Petchaboon (31) Big C, Si Sa Ket (33) Coliseum, Surat Thani (35) Tesco Lotus, Amata Chonburi (37) Sukanan Park, Saraburi (39) Sahathai, Nakorn Sritammarat (41) Tesco Lotus, Udonthani (43) Coliseum, Phuket (45) Big C, Kampangpeth

(30) Central Festival Pattaya Beach (32) Central Plaza Chonburi (34) Carrefour, Lop Buri (36) City mall, Ubon Ratchathani (38) Central, Khon Kaen (40) Carrefour, Chumporn (42) Big C, Samut Sakhon (44) Pacific Park, Sriracha (46) Laemthong-Bangsaen

(2) Distribution passes through 65 Body Glove and Peoples Market counters in the leading department stores in Bangkok and major provinces in all regions of the country.

Province (brand) Bangkok and Vicinity Areas (Body Glove) (Peoples Market)

No. of Shops

Provincial Areas (Body Glove)

41

21 3

Address (1) Bangkok Tokyu Department Store Ltd., Maboonkrong Center (2) Robinson Department Store, Ratchadapisek Branch (Women’s Apparels Section) (3) Robinson Department Store, Sukhumvit Branch (4) Robinson Department Store, Bangrak Branch (5) Robinson Department Store, Ratchadapisek Branch (Men’s Apparels Section) (6) The Mall Department Store, Bangkhae Branch (7) The Mall Department Store, BangKapi Branch (8) The Mall Department Store, Thapra Branch (9) The Mall Department Store, Ngamwongwan Branch (10) Robinson Department Store, Rangsit Branch (11) Robinson Department Store, Srinakarin Branch (12) Robinson Department Store, Radyha Branch (13) Super sports, Pinklao Branch (14) Super sports, Bangna Branch (15) Super sports, Chidlom Branch (16) Central Plaza, Chaengwattana Branch (17) Super sports, Central World Branch (18) Robinson Department Store, Rattanathibet Branch (19) The Mall Department Store, Bangkhae Branch (20) Robinson Department Store, Rangsit Branch (21) The Mall Department Store, Thapra Branch (1) Siam Paragon Department Store (2) The Mall Department Store, BangKapi Branch (3) The Mall Department Store, Bangkhae Branch (1) Vogue Department Store, Krabi (2) Ocean Shopping Mall Phuket, Amphur Muang, Phuket (3) Robinson Department Store, Phuket Branch (4) Active Nation Co., Ltd., Phuket Jungceylon, Phuket (5) Robinson Department Store, Had Yai Branch (6) Robinson Department Store, Nakhon Sritammarat Branch (7) Fairy Plaza Co., Ltd., Muang City Hall, Amphur Muang, Konkaen

11


Province (brand)

No. of Shops

Total

65

Address (8) Robinson Department Store, Chanthaburi Branch (9) Laemthong Department Store, Rayong Branch (10) Robinson Department Store, Ayudhya Branch (11) Kanokkarn Department Store, Kanchanaburi Branch (12) Robinson Department Store, Chiangmai Branch (13) Klang Plaza, Nakorn Ratchasima (14) Lampang Seri Department Store, Lampang (15) Chumporn Ocean Group, Chumporn (16) Soon Heng Department Store, Sri Sa Ket (17) Robinson Department Store, Ratchaburi Branch (18) Robinson Department Store, Ubonrachathani Branch (19) Sermthai Department Store, Maha Sarakham (20) Chaisaeng Department Store, Sing Buri (21) Diana Department Store, Had Yai, Songkhla (22) Robinson Department Store, Khon Kaen Branch (23) Robinson Department Store, Trung Branch (24) The Mall Department Store, Nakorn Ratchasima Branch (25) Super Sports, Phuket Branch (26) Outlet Mall, Udonthani (27) Outlet Mall, Kao Yai (28) Laemthong Department Store, Rayong Branch (29) Fairy Plaza, Khonkaen (30) Chumporn Ocean Group, Chumporn (31) Fairy Land, Nakorn Sawan (32) Lee Subsin Department Store, Had Yai (33) Robinson Department Store, Chanthaburi Branch (34) Robinson Department Store, Phuket Branch (35) Taweekij Department Store, Burirum (36) Robinson Department Store, Trung Branch (37) Jamfha Department Store, Lumphun (38) Sahathai Department Store, Nakorn Sritammarat (39) Nasa Shopping Mall, Suphanburi (40) Roi-Ed Plaza, Roi-Ed ( 41) Odean Shopping Mall, Had Yai Branch

Nature of the Business

Product Characteristics of Body Glove The Company’s products are divided into 2 categories as follows: 1. Ready-to-wear Apparels under Body Glove Trademark The Company is a distributor of ready-to-wear apparels which designed for men and women, ages 15 - 35 years. The product varieties are in the range of choices, captivating designs and colors, also are featured with high absorbency, soft and durable fabric to make it easy to wear and take care of its long lasting colors. The ready-to-wear apparels are classified into 3 types as follows: (1) Surf & Trend: Ready-to-wear apparels which designs are taken an emphasis on the California lifestyle and used of innovative and unique designs of Body Glove trademark to be imprinted on the products. Some of the products are

12


T-shirt, V-neck T-shirt, sheer T-shit, seamless T-shirt, collared T-shirt, 3-quarter shorts, 4-quarter shorts, casual shorts, nylon shorts, cargo shorts and other modern and trendy style fashion products, etc. The product prices range from Baht 690 - 2,190 and gears to target youngsters and working professionals as main customers. (2) Easy Lifestyle: Ready-to-wear apparels that based its design on simplicity while still are stylish, trendy, and easy to wear in all occasions. The designs are kept at minimal, clear-cut, not flashy with less emphasis on the Body Glove trademark and logo; that is the products may or may not have Body Glove trademark and hand logo imprinted. Some of the products are Polo shirt, shirt, long sleeves shirt, collared shirt, 5 pockets trousers, basic trousers, jeans, etc. The product prices range from Baht 599 - 1,990, and gears to target working professionals as main customers. (3) Body Glove Denim: Denim Collections, a compilation of jeans inspired by California and USA beach’s title such as Redondo, Laguna, and Manhattan, imported under Body Glove trademark. The denim collections offer the alternative choices; classic, simple for every lifestyle and contemporary styling. The texture of each model is made from Ringspun cotton which yarn characteristic is long line with tight and durable binding. In a result of Mercerize treatment in all models, the shiny fabric, more comfortable and durable texture. Additionally, Body Glove Denim is the first brand in Thailand which uses Aircell technology to increase the value of the product. The prominent point of this innovation is good ventilation, refreshing resulting from the heat while wearing, reducing damp and making more comfortable wearing. The product prices range from Baht 1,590 - 2,290 and gears to target youngsters and working professionals as main customers.

2. Accessories under Body Glove Trademark The products in this category have become a valuable component in the product mix. They are offered in wide ranges of selection with different types and designs, for example, shoulder bag, backpack, traveling bag, wallet, pencil case, cap, socks, etc. The product prices range from Baht 290 - 2,290, and gears to target youngsters and working professionals as main customers.

Market Conditions and Competitiveness

Industry Outlook Thai Garment Manufacturers Association had experienced a rapid growth rate that spread over the ready-to-wear apparel industry for men, women and children. For the market section of ready-to-wear apparels in the country is highly competitive among the local ready-to-wear entrepreneurs, the importers of ready-to-wear apparels under international license trademark and the importers of low-cost ready-to-wear from China, Vietnam and India. However, there is no collective data from any trustworthy source that verify total market value branded ready-to-wear apparels in the country. During the past years, the market sector of ready-to-wear apparels in the country was steadily growing. Because each corporation has implemented a full marketing strategy to build brand awareness and popularity and to expand the number of distribution channel for through stand alone Flagship Stores and counters in the department stores. The tendency of an apparel industry tends to expand at close proximity as to the rate of economic growth expansion. However, the industry will highly remain at a competitive level for local entrepreneurs and ready-to-wear importers. Therefore, a strong emphasis must be taken on developing quality and up-to-date designs to match customer’s preferences, as well as building brand awareness and implementing strategies to gain loyalty from consumers. Market Conditions and Competition Policy a) Competitive Strategy - Product Quality The Company’s products have unique California lifestyle identity, thus the Company places a high emphasis on the selection of designs for Surf & Trend and Easy lifestyle products to match customer everyday lifestyle and their demands in the market. The Company values in the importance of product quality and uses only the high quality cotton fabrics to ensure high absorbency rate, softness, durability, comfortableness to wear, ease in cleaning; the products are with ranges of designs and colors to fulfill the needs of the target customers whilst keeping modern and trendy styles to match customer’s everyday life.

13


b)

14

- Flagship Stores Environments The importance of Flagship Store environments was given to the Visual Merchandise Display (“VM Display”), which are consisted of products displays, POP signage displays, store arrangements and decoration equipments. Each Flagship Store will be arranged in a standard uniformity to enhance brand recognition to target customers, be giving the emphasis on modernity and unique identity of Body Glove. As for the product presentation, there are 2 types of displays as follows: 1. Arrangement by color scheme such as cool, hot, pastel, bright, gray and displayed in terms of shade, i.e., light to dark, dark to light, light in the center, or dark in the center, etc. 2. Arrangement by category according to the size of the store such as small-sized store, medium-sized store or largesized store. VM Display is considered an effective way of product presentation due to (1) the format is clean, simple and clear that is easy to remember and select the merchandise; (2) the display of merchandise has clear dimension and easy to highlight the prominent product by using the light and color coordination; (3) able to present new collections continuously; and (4) able to display the product by Product Theme or Store Theme to emphasize the sales volume and brand image. - Service Area The Company emphasizes on the value added service by serving the customers with highly trained staff to assure the customer excellent service. The staff will be able to respond to the requirement of the customer’s preference and can give useful advice about the products. The staff will be trained to invite the customers to try on the clothing and take care of the customers as deem appropriate in order to increase the customer satisfaction. Moreover, the Company had installed the internet web camera at various Flagship Stores and linked to the head office. As a result, the head office could follow-up on the services provided by the staff at each store location on a real-time basis. - Pricing Policy The pricing policy for the Company’s products is based on cost, type of product, model and gross profit margin as preliminary set wherein each store there is only One Price Policy which may be varied on store promotion at different intervals to match the requirement of each target group of customers at each location. In addition, the Company’s policy is to offer a reasonable and competitive price to the customer. With this, the Company had launched a super value program by offering a Combo set or selling in pairs by applying to simple clothing that are comfortable to wear, able to mix and match with other products easily, The program is a super value as the products are sold in pairs but can be sold separately as well, for example, Polo shirt, T-shirt, Mini Polo shirt, etc. The price range for this product category is from Baht 490 890, and the target customers are school and college students and young working professionals. When compared the selling price of the Company to local brand distributors, it can be concluded that our company status is at the competitive edge, especially the “Combo” set products of the same price point as of those local brand due to the Body Glove Trademark is more universally accepted. - Market Support and Public Relations The Company has continued its market support through various advertising campaigns via mass media such as, radio, newspaper, magazines, leaflets, billboard at various locations, through event marketing and social network as facebook in order to build brand awareness under Body Glove Trademark. Additionally, the Company had introduced its product through the company’s website www.bodyglove.co.th to promote new products and news update to the customers. The Company also organized special activities, such as, launching seasonal and special holiday promotion, highlighting promotional area to attract the customer’s interest, offering the customer to buy special premium with regular purchased items. Offering Gift Voucher during holiday season, PR on various promotions via different media, building strong relationship with other suppliers, i.e., joined with department stores in renting the area for product distribution and participated in the joint promotion, joined with the government and private entrepreneur for social contribution activities, etc. Nature of Customers and Target Groups of Customer The Company separates its target customers into 2 major groups as follows: (1) School and college students, men and women, ages 12-25 years (2) Young working professionals and adults, men and women, ages 25 years and over.


The Company placed high emphasis on the continuity of product development to be in line with the requirement of these two groups of target customers. During the previous 3 years, the Company had not sold to any one particular customer in excess of 30% of total sales revenues due to the nature of retails business operated by the Company. c) Sales and Distribution Channels The Company has distributed the products through flagship stores and counters in department stores. Product Characteristics of Peoples Market The Company’s products are divided into 2 categories as follows: (1) Ready-to-wear Apparels under Peoples Market (PM) Trademark The Company is a distributor of ready-to-wear apparels which designed for men and women, ages 18 - 35 years. The product varieties are in the range of choices, captivating designs and colors, also are featured with high absorbency, soft and durable fabric to make it easy to wear and take care of its long lasting colors. The ready-to-wear apparels are classified into 2 types as follows: (1) Fashion: Ready-to-wear apparels of Peoples Market, like the name suggests, on trend and made with individuality in mind. And used of innovative and unique designs of Peoples Market trademark to be imprinted on the products. Some of the products are T-shirt, V-neck T-shirt, sheer T-shit, collared T-shirt, 4-quarter shorts, casual shorts, nylon shorts, nylon trousers and other modern and trendy style fashion products, etc. The product prices range from Baht 690 3,890 and gears to target youngsters and working professionals as main customers. (2) Half 9: Ready-to-wear apparels that based its design on simplicity while still are stylish, trendy, and easy to wear in all occasions. The designs are kept at minimal, clear-cut, and not flashy with less emphasis on the PM trademark and logo; that is the products may or may not have PM trademark with portraiture imprinted. Some of the products are Polo shirt, shirt, long sleeves shirt, collared shirt, trousers, skirt, suit, overcoat, basic trousers and jeans etc. The product prices range from Baht 690 - 6,590, and gears to target working professionals as main customers. (2) Accessories under Peoples Market (PM) Trademark The products in this category have become a valuable component in the product mix. They are offered in wide ranges of selection with different types and designs, for example, necktie and scarf. The product prices range from Baht 890 - 1,450, and gears to target working professionals as main customers.

Market Conditions and Competition Policy

Industry Outlook Thai Garment Manufacturers Association had experienced a rapid growth rate that spread over the ready-to-wear apparel industry for men, women and children. For the market section of ready-to-wear apparels in the country is highly competitive among the local ready-to-wear entrepreneurs, the importers of ready-to-wear apparels under international license trademark and the importers of low-cost ready-to-wear from China, Vietnam and India. However, there is no collective data from any trustworthy source that verify total market value branded ready-to-wear apparels in the country. During the past years, the market sector of ready-to-wear apparels in the country was steadily growing. Because each corporation has implemented a full marketing strategy to build brand awareness and popularity and to expand the number of distribution channel for through stand alone Flagship Stores and counters in the department stores. The tendency of an apparel industry tends to expand at close proximity as to the rate of economic growth expansion. However, the industry will highly remain at a competitive level for local entrepreneurs and ready-to-wear importers. Therefore, a strong emphasis must be taken on developing quality and up-to-date designs to match customer’s preferences, as well as building brand awareness and implementing strategies to gain loyalty from consumers.

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Market Conditions and Competition Policy a) Competitive Strategy - Product Quality The Company’s products have unique lifestyle identity, thus the Company places a high emphasis on the selection of designs and Easy lifestyle products to match customer everyday lifestyle and their demands in the market. The Company values in the importance of product quality and uses only the high quality cotton fabrics to ensure high absorbency rate, softness, durability, comfortableness to wear, ease in cleaning; the products are with ranges of designs and colors to fulfill the needs of the target customers whilst keeping modern and trendy styles to match customer’s everyday life. - Flagship Stores Environments The importance of Flagship Store environments was given to the Visual Merchandise Display (“VM Display”), which are consisted of products displays, POP signage displays, store arrangements and decoration equipments. Each Flagship Store will be arranged in a standard uniformity to enhance brand recognition to target customers, be giving the emphasis on modernity and unique identity of PM. As for the product presentation, there are 2 types of displays as follows: 1. Arrangement by categorized according to styling: Fashion group such as T-shirt and jeans. Half 9 group such as shirt, trousers, skirt, and working suit etc. 2. Arrangement by categorized according to the size of the store such as small-sized store, medium-sized store or large-sized store. VM Display is considered an effective way of product presentation due to (1) the format is clean, simple and clear that is easy to remember and select the merchandise; (2) the display of merchandise has clear dimension and easy to highlight the prominent product by using the light and color coordination; (3) able to present new collections continuously; and (4) able to display the product by Product Theme or Store Theme to emphasize the sales volume and brand image. - Service Area The Company emphasizes on the value added service by serving the customers with highly trained staff to assure the customer excellent service. The staff will be able to respond to the requirement of the customer’s preference and can give useful advice about the products. The staff will be trained to invite the customers to try on the clothing and take care of the customers as deem appropriate in order to increase the customer satisfaction. - Pricing Policy The pricing policy for the Company’s products is based on cost, type of product, model and gross profit margin as preliminary set wherein each store there is only One Price Policy which may be varied on store promotion at different intervals to match the requirement of each target group of customers at each location. In addition, the Company’s policy is to offer a reasonable and competitive price to the customer. With this, the Company had launched a super value program by offering a Combo set or selling in pairs by applying to simple clothing that are comfortable to wear, able to mix and match with other products easily, The program is a super value as the products are sold in pairs but can be sold separately as well, for example, Polo shirt, T-shirt, Mini Polo shirt, etc. The price range for this product category is from Baht 690 1,250 and the target customers are college students and young working professionals. When compared the selling price of the Company to local brand distributors, it can be concluded that our company status is at the competitive edge, especially the “Combo” set products of the same price point as of those local brand due to the Peoples Market Trademark is more universally accepted. - Market Support and Public Relations The Company has continued its market support through various advertising campaigns via mass media such as, radio, newspaper, magazines, leaflets, billboard at various locations, TV and game show sponsorship through event marketing in order to build brand awareness under Peoples Market Trademark. Additionally, the Company had introduced its product through the company’s website www.peoples-market.com to promote new products and news update to the customers. The Company also organized special activities, such as, launching seasonal and special holiday promotion, highlighting promotional area to attract the customer’s interest, offering the customer to buy special premium with regular purchased items.

16


Offering Gift Voucher during holiday season, PR on various promotions via different media, building strong relationship with other suppliers, i.e., joined with department stores in renting the area for product distribution and participated in the joint promotion, joined with the government and private entrepreneur for social contribution activities, etc. b) Nature of Customers and Target Groups of Customer The Company separates its target customers into 2 major groups as follows: (1) College students, men and women, ages 18-25 years (2) Young working professionals and adults, men and women, ages 25 years and over. The Company placed high emphasis on the continuity of product development to be in line with the requirement of these two groups of target customers. During the previous year, the Company had not sold to any one particular customer in excess of 30% of total sales revenues due to the nature of retails business operated by the Company. c) Sales and Distribution Channels The Company has distributed the products through flagship stores and counters in department stores. In summary, the proportion of distribution channel is shown in ratio as follows: Distribution Ratio 2008 2009 2010 Through Flagship Stores 72% 74% 69%

Through Counters in Department Stores Total

28% 100%

26% 100%

31% 100%

Sales revenues from Bangkok and vicinity areas are approximately 36% of total sales revenue.

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Revenue Structure Revenue structure of the company is classified by product lines during 2008 - 2010: 2008 2009 2010 Operated Items by M.Baht % M.Baht % M.Baht % 1. Sales revenue 1.1 Apparel sales Company 548.24 91.25 599.09 89.83 728.74 89.75 1.2 Related products sales Company 50.26 8.37 64.16 9.62 78.32 9.65 Total sales revenue Company 598.50 99.62 663.25 99.45 807.06 99.40 2. Adjustment of decline in value of obsolete inventories Company - - 1.73 0.26 - - 3. Gain on exchange rate Company 0.76 0.13 0.53 0.08 0.94 0.11 4. Other incomes Company 1.53 0.25 1.44 0.21 3.94 0.49 Total revenue Company 600.79 100.00 666.95 100.00 811.94 100.00 Additional Explanation: - All sales revenue is from domestic sales - Related products included backpacks, shoulder bags, traveling bags, wallets, pencil case, caps, socks, necktie and scarf. Revenue structure of the company is classified by regions during 2008 - 2010: 2008 2009 2010 Operated Items by M.Baht % M.Baht % M.Baht % 1. Sales revenue 1.1 Sales revenue from Bangkok and vicinity Company 269.25 44.99 268.95 40.55 289.94 35.93 areas 1.2 Sales revenue from provincial areas Company 329.25 55.01 394.30 59.45 517.12 64.07 Total sales revenue Company 598.50 100.00 663.25 100.00 807.06 100.00 Additional Explanation: - Sales revenue from Bangkok and vicinity areas during 2010 is earned from 20 shops and 24 department store counters. - Sales revenue from provincial areas during 2010 is earned from 46 shops and 41 department store counters.

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Description and analysis of financial status and operation result 1. Summary of Financial Statements

Balance Sheet, Income Statement and Statement of Cash Flows for the past three years for fiscal year ended December 31st, 2008, 2009 and 2010 are shown in the tables hereunder: BGT Corporation Public Company Limited

Balance Sheets

For fiscal years ended December 31st, 2008, 2009 and 2010             CURRENT ASSETS   Cash and cash equivalents Current investment   Trade account receivables Inventories - net Other current assets Total Current Assets NON-CURRENT ASSETS Property, plant and equipment - net Intangible assets - net   Other non - current assets - Leasehold rights - shop area - net - Rental deposits Total Non-Current Assets TOTAL ASSETS CURRENT LIABILITIES Bank overdrafts Trade Accounts Payables Current portion of finance lease obligations   Current portion of long-term loan from related person   Current portion of long-term loans from others   Current portion of accrued trademark fee Other current liabilities - Accrued expense - Accrued income tax expenses   - Account payables - fixed assets

- Others Total Current Liabilities NON-CURRENT LIABILITIES Finance lease obligations Long-term loan from related person   Long-term loan from others   Other non-current liabilities - Accrued Trademark Fee   - Employee deposits   - Deposit received   Total Non-Current Liabilities TOTAL LIABILITIES

2008 Amount % 16,251 4.25

24,592 6.44 26,201 6.86 158,650 41.53 4,613 1.21 230,306 60.29 75,397 19.74 16,032 4.20 31,217 8.17

29,033 7.60 151,679 39.71 381,986 100.00 477 0.12 55,645 14.57 1,446 0.38 6,000 1.57 6,724 1.76 2,631 0.69

17,246 4.51

4,249 1.11 6,213 1.63

1,264 0.33 101,894 26,67 1,554 0.41 23,500 6.15 12,027 3.15 7,894 2.07 2,351 0.61 720 0.19 48,046 12.58 149,940 39.25

2009 Amount %   16,723 3.72

58,081 12.91 33,172 7.38 187,125 41.61 6,209 1.38 301,309 67.00     73,952 16.44 13,631 3.03 27,145 6.04

33,688 7.49 148,417 33.00 449,726 100.00     2,199 0.49 95,179 21.16 1,279 0.28 6,000 1.33 6,467 1.44 3,352 0.75

19,258 4.28

5,624 1.25 7,238 1.61

1,601 0.36 148,198 32.95     269 0.06 17,500 3.89 5,480 1.22 4,190 0.93 2,703 0.60 720 0.16 30,862 6.86 179,060 39.82

(Unit: Baht Thousand) 2010 Amount % 33,280 5.61 12,896 2.17 43,294 7.30 238,833 40.28 10,111 1.71 338,413 57.08 149,905 25.28 11,690 1.97 47,779 8.06 45,140 7.61 254,513 42.92 592,927 100.00 0 0.00 116,478 19.64 3,748 0.63 0 0.00 25,051 4.22 3,030 0.51 24,243 4.09 8,730 1.47 7,165 1.21 1,375 0.23 189,819 32.01 12,682 2.14 0 0.00 64,062 10.80 757 0.13 3,347 0.56 720 0.12 81,568 13.76 271,387 45.77

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SHAREHOLDERS’ EQUITY Share Capital   Issued and paid-up share capital    Premium on share capital Retained Earning Appropriated - Legal reserve  - Treasury stock reserve   Unappropriated   Less Treasury stocks   Total Shareholders’ Equity TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

20

2008 Amount % 80,000 20.94 69,680 18.24 4,427 1.16 5,290  1.38 77,939 20.40 (5,290) (1.38) 232,046 60.75 381,986 100.00

2009 Amount %     80,000 17.79 69,680 15.49 6,752 1.50 5,290 1.18 114,234 25.40 (5,290) (1.18) 270,666 60.18 449,726 100.00

2010 Amount % 159,787 26.95 69,680 11.75 9,851 1.66 0 0.00 82,222 13.87 0 0.00 321,540 54.23 592,927 100.00


BGT Corporation Public Company Limited

Statements of Income and Expenditure

For fiscal years ended December 31st, 2008, 2009 and 2010

        REVENUES   Revenues from sale of goods Adjustment of decline in value of obsolete inventories   Gain on exchange rate   Other income Total Revenues EXPENDITURE Cost of sale of goods Royalty Fee Selling expenses Administrative expenses Management benefit expenses Other expenses Total Expenses Profit before finance cost and income tax expenses Finance cost Income tax expenses Net Profit Par Value (Baht) Earnings per share (Baht)

2008 Amount %  

2009 Amount %

(Unit: Baht Thousand) 2010 Amount %

          598,503 99.62 663,250 99.45 807,062 99.40 0 0.00 1,733 0.26 0 0.00 762 0.13 528 0.08 937 0.12 1,531 0.25 1,437 0.22 3,938 0.49 600,795 100.00 666,948 100.00 811,937 100.00 287,977 47.93 332,226 49.81 384,428 47.35 23,920 3.98 26,494 3.97 32,229 3.97 162,426 27.04 181,203 27.17 227,497 28.02 53,216 8.86 49,222 7.38 63,101 7.77 14,750 2.46 13,885 2.08 14,429 1.78 320 0.05 1,666 0.25 402 0.05 542,609 90.32 604,696 90.67 722,085 88.93 58,186 9.68 62,252 9.33 89,853 11.07 4,316 0.72 2,884 0.43 5,331 0.66 12,324 2.05 12,877 1.93 22,547 2.78 41,546 6.92 46,491 6.97 61,975 7.63 0.50* 0.50 0.50 0.26* 0.30 0.24

Note: 1. The Financial Statements for the fiscal year 2008 and 2009 have been adjusted in accordance with the updated version of

Accounting Standards, in place of the previous versions which were cancelled. 2. The Financial Statement for the fiscal year 2008 * the auditor adjust the par value (Baht) and net profit per share (Baht) in

accordance with the Financial Statement for the fiscal year 2009 which adjusted the par value from 1.00 Baht to 0.50 Baht per

share

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BGT Corporation Public Company Limited

Statements of Cash Flows

For fiscal years ended December 31st, 2008, 2009 and 2010

CASH FLOWS FROM OPERATING ACTIVITIES Net profit   Adjustments to reconcile net profit to net cash provided by (used in) from operating

activities: Interest income   Depreciation and amortization

Interest expenses

Income tax expense Increase (decrease) in adjustment of decline in value of obsolete inventories Unrealized loss (gain) on exchange rate

Loss (gain) on sales of current investment

Unrealized loss (gain) on change in value of current investment

Loss from property, plant and equipment written - off Loss (gain) on sale of property, plant and equipment Loss (gain) from insurance claim on assets

Payment for acquisition in current investment

Proceeds from sales of current investment Proceeds from insurance claim on inventories Decrease (increase) in trade account receivables Decrease (increase) in inventories Decrease (increase) in other current assets Decrease (increase) in other non - current assets - rental deposits Increase (decrease) in trade account payables Increase (decrease) in other current liabilities - accrued expenses Increase (decrease) in other current liabilities - account payables - fixed assets Increase (decrease) in other current liabilities - others Increase (decrease) in other non - current liabilities - accrued trademark fee Increase (decrease) in other non - current liabilities - employee deposits Increase (decrease) in other non - current liabilities - deposit received Income tax paid Net cash inflow (outflow) from operating activities

22

(Unit: Baht Thousand) 2008 2009 2010     41,546 46,491 61,975 (364)  (81)  (69) 27,178

29,095

33,890

4,316

2,884

5,331

12,324 12,877 22,547 4,093 (1,733) 4,042 359

(352) (403)

(150)

- (966)

(245)

(489)

650

320 1,949 402 (178) (505) (1,265) - - (497)

(74,200)

(33,000) (55,000)

50,004 - 100,500 - - 1,800 727 (6,971) (10,122) (5,689) (26,742) (57,244) 43 (1,596) (3,878) (6,240) (4,655) (11,452) (22,901) 39,535 21,299 1,445 2,023 4,820 (3,843) (6,213) (7,238) 323 338 (226) - (2,631) (3,352) 587

352 644 720 - - (12,930) (11,502) (19,466) 17,244 39,074 86,722


BGT Corporation Public Company Limited

Statements of Cash Flows

For fiscal years ended December 31st, 2008, 2009 and 2010 (Unit: Baht Thousand) 2008 2009 2010 439  81 69 (18,902) (15,889) (75,404) 178 505 2,113 (26,577) (549) - 1,000 - - (18,834) (15,303) (98,799) (4,363) (2,894)  (5,167) (7,704) 1,722 (2,199) (1,592) (1,452) (6,564) (6,000) (6,000) (23,500) (6,249) (6,804) 77,165 (5,290) - 4,856 (20,000) (7,871) (15,957) (51,198) (23,299) 28,634 (52,788) 472 16,557 69,039 16,251 16,723 16,251 16,723 33,280

CASH FLOWS FROM INVESTING ACTIVITIES Interest received Payment for purchase of property, plant and equipment Proceeds from sale of property, plant and equipment Payment for purchase of leasehold rights - shop area Proceeds from insurance claim on fixed assets Net cash inflow (outflow) from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Interest paid Increase (decrease) in bank overdrafts Increase (decrease) in finance lease obligations Increase (decrease) in long - term loan from related person Increase (decrease) in long - term loans from others Proceeds from sale of treasury stocks Dividend paid Net cash inflow (outflow) from financing activities Increase (decrease) in cash and cash equivalents - net Cash and Cash Equivalent, Beginning of the Year Cash and Cash Equivalent, End of the Year Note: The Financial Statement for the fiscal year 2008 has been adjusted in accordance with the updated version of Accounting

Standards (Revised 2007), in place of the previous version which was cancelled.

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BGT Corporation Public Company Limited

Financial Ratios

At December 31st, 2008, 2009 and 2010   Liquidity Ratio Liquidity ratio (times) Current liquidity ratio (times) Current accounts receivables ratio - (times) Average collection period (days) Current inventories (times) Average selling period - (days) Current accounts payable (times) Collection period - (days) Cash Cycle - (days) Profitability Ratio Gross profit margin (%) Profit from operation (%) Net profit (%) ROE (%) Efficiency Ratio) ROA (%) Ratio of fixed assets (times) Financial Policy Ratio DE ratio (time) Ratio of interest payable ratio (time) Share Profile Par value (Baht) Book value per share (Baht) Net profit (loss) per share (Baht)

2008

2009

2010

  2.26 0.66 6.74 54 1.83 200 5.18 71 183   51.88% 9.68% 6.92% 18.55%   10.57% 1.52 0.65 13.48 0.50* 1.45* 0.26*

  2.03 0.73 5.40 68 1.92 190 4.41 83 175   49.91% 9.33% 6.97% 18.50%   11.18% 1.59 0.66 21.58 0.50 1.69 0.30

1.78 0.47 5.92 62 1.81 202 3.63 101 163 52.37% 11.07% 7.63% 20.93% 11.89% 1.55 0.84 16.86 0.50 1.00 0.24

Note: Share Profie for the fiscal years 2008* the auditor adjust the par value (Baht), book value per share (Baht) and net profit per share (Baht) in accordance with the Financial Statement for the fiscal year 2009.

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

The Company’s operation results for the past three years (Y2008-2010) were relatively growing due to the increasing of sales growth in total revenues. The Company’s net profit before interest and income tax expenses for the fiscal year ending December 31st, 2010 was Baht 89.85 million. The finance cost was Baht 5.33 million and income tax expense was Baht 22.55 million; thus, net profit was Baht 61.97 million, increased Baht 15.48 million or 33.31% when compared to the previous year. Revenues In Y2010, the sales revenues was Baht 807.06 million, increasing 21.68% when compared to Y2009 sales revenues of Baht 663.25 million. The growth in sale revenues was due to continuously opened flagship stores and counters in department store. Basically, the total sale revenues were generated from 59 flagship stores and 34 counters in department stores in Y2009 to 66 stores and 65 counters at the end of Y2010. The Company’s revenues from flagship stores were accounted for 69.42% and revenues from counters in the department store were accounted for 30.58% of total sales revenues. The Company believes that continuity of marketing activities and welled-selection of products as to be correspondent to the demand of the target customers contribute to our success. Therefore, the Company has consistantly developed and introduced newly designed ready-to-wear apparels to match the customers’ needs while following the trend of unique California Lifestyle to cultivate the customers’ admiration of “Body Glove” brand. Cost of Goods Sold In Y2010, the cost of goods sold was Baht 384.43 million, increasing 15.71% when compared to Y2009 of Baht 332.23 million. The gross profit margins were 49.91% and 52.37% in Y2009 and Y2010, respectively, due to the Company’s primacy on the cost of goods sold control policy as well as the efficiency of procurement plan management for retail products. Trademark Copyright Fee In Y2010, the copyrifht fee was Baht 32.23 million, the rate as set in the agreement, according to the sales growth based when compared to Y2009 of Baht 26.49 million. Selling Expenses In Y2010, the selling expenses was Baht 227.50 million, increasing 25.55% when compared to Y2009 of Baht 181.20 million. Administrative Expenses In Y2010, the administrative expenses were Baht 63.10 million, increasing 28.20% when compared to Y2009 of Baht 49.22 million. Finance cost In Y2010, the finance cost was Baht 5.33 million, or 0.66% of total revenues when compared to Y2009 of Baht 2.88 million, or 0.43% of total revenues. In Y2010, the interest payment increased from the previous year 84.83% was mainly due to the Company make loan contracts with financial institutions for supporting our expansion. Net profit for Y2009 and Y2010 was equivalent to 6.97% and 7.63% respectively.

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Financial Status Assets As of the end of 2009 and 2010, the Company has total assets of Baht 449.73 million and Baht 592.93 million, respectively. The Company business nature is to operate a retailing business to distribute ready-to-wear clothing and related products through various shops in Bangkok and major provinces in all regions of the country. Thus, the assets are mainly comprised of; (1) Property, plant and equipment such as land during construction, building and building improvement, decorative, office supplies and vehicles. As of the end of 2009 and 2010 net property, plant and equipment were total of Baht 73.95 million and Baht 149.90 million, respectively. (2) Inventories are such as finished goods and raw material. As of the end of 2009 and 2010 net inventories were total of Baht 187.13 million and Baht 238.83 million, respectively. (3) Net leasehold right - shop area as of the end of 2009 and 2010 were total of Baht 27.15 million and Baht 47.78 million, respectively. The current assets as of the end of 2009 and 2010 were Baht 301.31 million and Baht 338.41 million, respectively. The current assets mainly composed of inventories, current investment, and cash and cash equivalents. Asset quality The Company has other account receivable - net of Baht 33.17 million and Baht 43.29 million as of the end of 2009 and 2010, respectively, whereas all receivables are from department stores. Details of receivable - other business as of the end of 2008, 2009 and 2010 (Unit: Baht) Account receivable - Other business As of Dec 31st, 2008 As of Dec 31st, 2009 As of Dec 31st, 2010 (Department store receivable) Not due 26,201,293.48 33,171,988.89 43,294,112.60 Overdue Less than 3 months - - - 3 to 6 months - - - 6 to 12 months - - - Over 12 months - - - Total 26,201,293.48 33,171,988.89 43,294,112.60 The Company normally provides 60-day credit term for customers. During 2009 and 2010, the Company has average collection period of 68 days and 62 days, respectively. The Company has its own policy to collect debt according to the given credit term and never has any collection problem. Presently trade account receivables increase due to 31 counters increase from 2009. The Company has inventories-net as at the end of 2009 and 2010 of Baht 187.13 million and Baht 238.83 million, respectively. Inventories as of 2008, 2009 and 2010 were as follow: (Unit: Baht) st st Inventories As of Dec 31 , 2008 As of Dec 31 , 2009 As of Dec 31st, 2010 163,376,509.10 190,149,279.77 245,550,383.40 Finished goods (5,011,603.50) (3,278,378.38) (7,320,045.78) Deduct Reserve for obsolete stock 158,364,905.60 186,870,901.39 238,230,337.62 Finished goods - Net 284,982.90 254,435.99 602,310.84 Raw materials 158,649,888.50 187,125,337.38 238,832,648.46 Inventories - Net

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During 2009 and 2010, the Company has average inventory turnover period of 190 days and 202 days, respectively. The Company implements various marketing plans to match specific product lines or designs such as sales promotion or special prices in special time period, etc. Presently inventories increase due to 38 flagship stores and counters including new products under Peoples Market (PM) trademark increase from 2009. Trademark The Company records Baht 17.36 million for trademark, and has accounting policy for trademark by stating at cost net of accumulated amortization, with amortization period over 10 years in straight - line method, starting from July 2007. As of 31 December 2010, the Company has recorded Baht 11.29 million of trademark - net, decreased of Baht 6.07 million from accumulated amortization. Liquidity Changes in cash flow during each accounting period are as follow. During 2009, the Company reported net profits of Baht 46.49 million but the operating net cash flow of Baht 39.07 million, mainly due to increased of depreciation and amortization expenses of Baht 29.10 million, decreased by paid for acquisition in current investment-net of Baht 33.00 million, decreased by inventory increasing of Baht 26.74 million and increased by an increasing of other trade account payables of Baht 39.53 million. For net cash flow from investing activities in 2009 was Baht 15.30 million of cash outflow, due to the Company has purchased plant and equipment in amount of Baht 15.89 million, mainly for shop decorations. The net cash flow from financing activities during 2009 was Baht 23.30 million of cash outflow, mainly pay for dividend of a Baht 7.87 million, decreased Baht 6 million of long-term loan from related person and decreased Baht 6.80 million of long-term loan from other financial institutions. During 2010, the Company reported net profits of Baht 61.97 million, and net cash flow from operation activities of Baht 86.72 million of cash inflow, mainly due to increased of depreciation and amortization expenses of Baht 33.89 million, increased by proceeds from sales of current investment-net of Baht 45.50 million, decreased by an increasing of trade account receivables of Baht 10.12 million, decreased by inventory increasing of Baht 57.24 million, decreased by an increasing of the rental deposits of Baht 11.45 million and increased by increasing of other trade account payables of Baht 21.30 million. For net cash flow from investing activities in 2010 was Baht 98.80 million of cash outflow, due to the Company has purchased net plant and equipment in amount of Baht 73.30 million and purchased the leasehold rights - shop area in amount of Baht 26.58 million. The net cash flow from financing activities during 2010 was Baht 28.63 million of cash inflow, the Company has paid back long-term loan from related person of a Baht 23.50 million, paid for dividend of a Baht 15.96 million and increased Baht 77.17 million of long-term loan from other financial institutions. 2009 and 2010 liquidity ratios were 2.03 times and 1.78 times, respectively. The liquidity management of the Company in late 2009 has changed by an inventory increasing in order to support the upcoming launch of new products. And since the overall picture of global economics tends to be positive thus the Company increasing the volume of purchases of merchandise have effects on the slightly decrease of the liquidity ratio. In 2009 and 2010 quick liquidity ratios were 0.73 times and 0.47 times, respectively. The Company invests more in current investment in order to emphasize on expanding domestic market meanwhile sell more products, which resulting the quick liquidity ratios also to be increased. 2009 and 2010 cash cycles were 175 days and 163 days, respectively. Mainly due to (1) the Company has average collection period of 68 days and 62 days during 2009 and 2010, which is consistent with the Company’s credit term of 60 days. The Company has policy to collect debt according to the given credit term, and has no any collection problem. (2) During 2009 and 2010, the Company has average inventory turnover period of 190 days and 202 days. An inventory increasing in order to support the upcoming launch of new products both Body Glove and Peoples Market which is relevant to the amount of flagship stores and counters for 2010. (3) The Company has average payment period of 83 days and 101 days during 2009 and 2010, which is consistent with the Company’s payment credit term of 90 days. Sources of fund The Company’s shareholders’ equity as of the end of 2009 and 2010 were at Baht 270.67 million and Baht 321.54 million, respectively. The increases were partly due to continually profitable operation. Moreover, the Company’s funds are partly from profitable operation, and others from loans from directors and financial institutions also from capital increase during late of 2007. For debt to shareholders’ equity ratio as of the end of 2009 and 2010 were 0.66 times and 0.84 times, respectively. The Company has following obligations as at the end of December 31st, 2010: (1) The Company has long-term lease obligations to lease shops with leasehold terms of 1-29 years, which could be classified into 61 short-term leases and 5 long-term leases, with expiration date ranging from 2011 to 2024. Moreover, the Company has a 3-year lease obligation on a land and a building, starting from May 2004 and March 2006, respectively, which belong to a related person. The term is extendable every 3 years with total lease no longer than 20 years. At the end of contract term in 2024, the Company shall return right to warehouse to the lessor at the end of contract. Afterwards, on September

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17th, 2008, the mentioned related person has signed the agreement to transfer the reaping right and requirement right in the said land lease agreements to another related person without any recompense, and the agreement of the said rights will be ended on April 30th, 2024. The rental payment and minimum service fees will pay as follow:

(Unit: Million Baht)

Period of Time Over a year Less than a year but less than 5 years Over 5 years

Leased Shop area and service Land with building Land for warehouse building construction

72.14 1.26 0.63

62.18 5.95 2.97

14.30 16.39 8.20

(2) The Company paid for initial fees quarterly as determined in the agreement. The payment started from April 2009 to January 2012. The additional royalty fee shall be paid on the percentage of sales revenue based as determined in the agreement, starting from July 2007 onwards. The said source of fund shall come from working capital and/or loan and/or capital increased, depending on monetary and capital market conditions. Liabilities Total liabilities as at the end of 2009 and 2010 were Baht 179.06 million and Baht 271.39 million, respectively. Total liabilities were increased by increasing the inventories investment. Liabilities were mainly comprised of overdraft, short-term loans from financial institutions, account payable-other parties, long-term loan from related person and other long-term loans with following details: (1) Overdraft and short-term loans from financial institution as at the end of 2009 and 2010 were Baht 2.20 million and Baht 0.00 million, respectively. The overdraft was from local banks are guaranteed by lease rights. (2) Account payable-other parties as of the end of 2009 and 2010 were Baht 95.18 million and Baht 116.48 million, respectively. The payable terms were 83 days and 101 days respectively. (3) Long-term loans from related person (including current portion of long-term loans) as of the end of 2009 and 2010 were Baht 23.50 million and Baht 0.00 million, respectively. In 2010 the Company has paid back long-term loan from related person prematurely due to high liquidity. (4) Other long-term loans (including current portion of long-term loans) as of the end of 2009 and 2010 were Baht 11.95 million and Baht 89.11 million, respectively. During the past, the Company has strictly complied with the loan conditions and pay principal and repayments according to the repayment schedule. Factors that may affect business operation or future financial status The Company operates retailing business to distribute the ready-to-wear clothing and related products under trademark of “Body Glove and Peoples Market (PM).� The performance depends on clothing preference and lifestyle of the Company’s target group of customers and their purchasing power. Therefore, the Company must select the products to be consistent with the needs of prospective target group. The Company must implement appropriate marketing strategies in term of products, pricing, distribution channels and promotion. Moreover, the Company must control cost of sales, selling-related expenses and utilize technology to ensure efficient inventories control and distribution process.

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Risk Factors The Company’s risk factors are classified as follows:

1. Risk from Business Operations

1.1 Risk from breach of contract on significant terms The Master Licensing Agreement for the exclusive right in Body Glove Trademark entered by and between the Company and IP Global Investments America, Inc, (“IPG”), the contract party, have setforth the significant terms as follows: (1) The Company must pay a royalty fee which consisted of the initial fee and quarterly royalty fee based on the confirmed sales. (2) Responsible for Brand Regional Marketing Contribution at the rate as agreed upon mutual determination between the Company and IPG as stated in the Agreement. Presently, such contribution for the said Brand Regional Marketing had been waived for the Company. (3) The expansion into authorized territories: Vietnam, Burma, Laos, Cambodia and the Phillippines, or any other country, within the first 3 years starting from July 1st, 2007, should the Company fail to enter such country to sell Body Glove products within the terms and conditions as setforth in the Agreement., the Company may receive a written notice to remove a particular country from the authorized list. However, should the Company expand the business into the authorized territory within 6 months after received the written notice from IPG, it deems as the Company could fulfil its task according to the condition as setforth in the Agreement. Moreover, in the event of the Company has ceased sales or operations or failed to submit the sales reports for 6 months consecutively to the newly expanded country in the authorized territory; then, IPG has written notice, the Company must resume to operate the business in such country within 6 months. If the Company fails to do so, the said country will be terminated from the authorized list. 1.2 Risk from Change of Target Customers and their Preference on Ready-to-wear Apparel The Company operates a retail business of ready-to-wear apparel and accessories under the Body Glove and Peoples Market (PM) trademark where these ready-to-wear apparel and accessories are considered as fashionable items that tend to change with popularity and demand subject to personal preference and individual lifestyle of the target customers. If the Company cannot promptly provide the products to match the target customer’s preference, this may cause an effect on the Body Glove and Peoples Market (PM) trademark: to be unapproved by consumers and out of their consideration set, resulting in negative impact on sales revenue, operating results, as well as financial status of the company. Nevertheless, the Company has been operating its business under the concept of Surf Fashion and Easy Lifestyle, while also continueously researching and studying on lifestyle and patterns of the target customers and changes of ready-to-wear trends and consumer popularity towards related products. The findings from such researches and studies have played a major role in product design and development, that is; correspondent to trends and requirements of the target customers at different period of time. The target groups of customers are divided into 2 major groups, for example: school and college students, both men and women, age 12-25 years; and young working professionals to adults, both men and women, age 25 years old and over. With this, the Company continues to alter its products in every 4-6 months period, in terms of patterns, colors, designs to be in line with the changes of consumer’s preference. Additionally, the Company always ensures its products to be made of high quality fabrics and materials that provide comfort and ease in caring; it is the Company’s policy to deliver only the finest quality goods with the best service to the customers. As a result, the Company has earned its reputation and continuous support from our target customer up to now. 1.3 Risk from Renewal Contract of Flagship Store The major income propotion from the Company’s sales of more than 70% of total sales revenues derived from the sales through Flagship Stores. As these aforementioned stores are under lease agreement of 3 - 29 years term with contract ending

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date from year 2010 - 2024 onward, the Company may risk a chance of non-renewal lease agreement or risk from rental rate and service fee increase in proportion. However, all lease agreements authorized the Company the full right option to extend the term of the lease at the expiration period of the agreement where such clause relating to the rental adjustment are clearly stated. Throughout the past years, the Company had strictly followed the terms and conditions as set in the said agreements and never once an agreement were terminated by the lessor. In addition, the Flagship Stores located in the department stores help drawing the consumer’s attention to use the service from the department stores are offering which in turn benefiting both the department store business and the Company. Therefore, we believe that we will receive a continued support in extending the lease agreement from the lessor in

the future.

2. Risk from Procurement and Product Accessibility

Risk from Dependency on Suppliers The Company’s main operation is retail business of ready-to-wear apparel and accessories under the Body Glove and Peoples Market (PM) trademark where the Company has no policy to manufacture its own clothing or accessories by oneself. However, it is the Company’s policy that all the clothings and accessories are purchased through the reputable suppliers under the Company’s direction on product design pattern. Additionally, each supplier must get an approval from the exclusive master licensee prior to the said arrangement. In the event of the Company is unable to place product orders through quality suppliers, this may result in the shortage of different products and may have an effect on the quality of the Company’s products as a whole. If this happens, it will have negative impact on the Company’s reputation and Body Glove and Peoples Market (PM) trademark as well as the sales volume. However, the Company has a policy to order products from various reputable and worthy suppliers, both domestic and oversea. Furthermore, the Company has a policy to build up strong relationship and commitment with each supplier on a continual basis and have never faced any problem about the suppliers in the past years.

3. Risk from Management Administration

3.1 Risk in Control by Two Major Shareholder Groups with Total Shares Held Over 50% The Company has the Tumwattana family which consisted of Miss Dolnapa Tumwattana and Mr. Nopdol Tumwattana, and Malaysian Investors which consisted of Mr. Goh Kok Cheng, (Dickson) and Mr. Goh Kok Beng as two major shareholder groups. If the shareholders of these two groups added up the vote at the Meeting, they can take control over the resolution of the Shareholder’s Meeting in almost all area including the appointment of directors or other decisions which require majority vote by shareholders with exception on the law or company’s regulations that require 3 out of 4 votes from the Shareholder’s Meeting. Hence, other shareholders may not be able to control the collective voting rights for inspection and control power balance with a majority shareholder. Nevertheless, the two groups of shareholders can control power balance over the management administration between them. In consideration of the Company’s operation structure which consisted of Board of Directors and Audit Committee, it clearly specifies the structure of management administration providing qualified individuals with scope of responsibilities and authorization levels of the Board of Directors and Audit Committee that clearly identified and transparent. As for the procedure on any connected transactions with the Board of Directors, major shareholders, the control power authority or any party which may be potentially causing the conflicts of interest, such individual will not be allow to authorize the respective transactions. It will be reported to the Audit Committee for control power balance to ensure transparency and confident of the shareholders whilst controlling power balance of the Company’s management administration.

3.2 Risk from Dependency on the Executives (a) Dependency on Loan from the Executive The Company received a loan from Mr. Nopdol Tumwattana who takes a position of the authorized signatory of the Company and postions of the Chairman of the Board, and also as a major shareholder. If the Company did not receive such loan, the result may have an impact of the Company’s cash flows. The aforementioned loan is without collateral in which the Company had entered a loan agreement with principle repayment of Baht 0.50 million per month for 7 years as from January 1st, 2007, and fixed interest charge at MOR rate provided by Kasikorn Bank PLC plus 0.25% per annum. The interest for such loan is payable every 3 month in which the Company has been able to pay the principle repayment and interest charges as setforth in the loan agreement in the past. As of 31st December

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2009, The Company has an outstanding loan of Baht 23.50 Million The Company has repaid the loan from Mr. Nopdol Tumwattana as mentioned above on December 17th, 2010 which results in no risks from dependency on loan from the Executive. (b) Dependency on Hire of Land, Building and Condominium from the Executive The Company hired a piece of land and partial building from Mr. Nopdol Tumwattana, a total area of 2,266 square meters, which partial building on the land is a 2-storey office building for use mainly as a Head Office of the Company that is situated in a close proximity with Mr. Nopdol Tumwattana’s residence. However, the said piece of land and building was clearly separated and could be used as office building, with easy access to main public road. The period of lease right is no longer than April 30th, 2024 at the rental rate that is lower than the rental rate for hire the land with building from surrounding area. The necessity and reasonableness of this transaction was due to the requirement of having a Head Office situated within a close proximity to the warehouse building to conveniently coordinating activities relating to product delivery to the stores as well as to perform physical inventory check respectively. The Company hired another piece of land from Mr. Nopdol Tumwattana, a total area of 954 square meters, to construct the warehouse building separated from office building in which the said land is situated in a close proximity with Mr. Nopdol Tumwattana’s residence which is easy accessible to main public road. The said land has been registered with the Department of Land under the lease right for the period ending April 30th, 2024. At the expiration of the lease right for the land, the Company agreed to waive the right of ownership of the warehouse building to the land owner, Mr. Nopdol Tumwattana. However, the rental rate for the said land is higher than the rental rate for the land in surrounding area. Nevertheless, the Company disburses for both leases in total amount of 157,500 baht monthly. It means, the Company disburses lower than market rate which is around 323,200 baht per month. The necessity and reasonableness of this transaction was due to the requirement of having a Head Office situated within a close proximity to the warehouse building to conveniently coordinating activities relating to product delivery to the stores as well as to perform physical inventory check respectively. On September 17th, 2008, Mr. Nopdol Tumwattana has signed the agreement to transfer the requirement right and reaping right in the said land lease agreements as mentioned above to Miss Dolnapa Tumwattana without any recompense, also has already registered the said lease rights transferred at Department of Land and shall be effected for the rental fee from October 2008 onward. The Company leased a condominium suite of President Park, Park View Tower from Mr. Nopdol Tumwattana, a total area of 260.54 square meters including furniture and fixture with the objective of providing a residence for the Executive who is nonresident in Thailand. The lease agreement is for one year as from January 1st, 2010 to December 31st, 2010. Upon the expiration of the lease term, Mr. Nopdol Tumwattana agreed to extend the lease term for an additional of one year. The rental rate is lower than the market rate when compared to the rental of the suite at surrounding area. The necessity and reasonableness of this transaction was due to the objective of providing accommodation facilities and welfare benefit to the Executive who is nonresident in Thailand. Therefore, the Company has a risk in dependency on the Executive, Mr. Nopdol Tumwattana, with respect to the hiring of land, building and the condominium. However, the concerned Executive is willing to allow the Company to hire the land, building and the condominium according to the conditions as setforth in the agreements. As well as the land lease for construction of warehouse buildings has been registered with the Department of Land. However, on March 26th, 2010 the Company bought new land at Tambol Minburi (Sai Kong Din) Aumphur Minburi (Muaeng) Bangkok, total area is 4 rais 1 ngarn 96 square wah for new office and warehouse construction. Currently it has been on process.

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Mr. Nopdol Tumwattana is a Chairman of the Board and holds 12.22% of shares as of December 31st, 2010.

RELATIONSHIP 1. List of Hire Mr. Nopdol Tumwattana provided a condominium suite at President Park, Park View Tower for hire by the Company, with total area of 260.54 sq.m., situated at No. 25A Oak, No. 99 Sukhumvit 24, Klongton, Klongtoey, Bangkok, furnished with furniture and fixture, for the purpose of providing the accommodation for the Executive who is non-resident in Thailand. The lease is for 1 year as from January 1st, 2008 to December 31st, 2008 and the monthly hire fee is Baht 70,000 (or equivalent to Baht 268.67/sq.m./month At the end of the expiration term, Mr. Nopdol Tumwattana agreed to renew the agreement for 1 more year. On January 1st, 2010 the Company has renewed the agreement for a period of 1 year as from January 1st, 2010 to December 31st, 2010 and the monthly hire fee is Baht 70,000 as the same previous rate.

CONNECTING TRANSACTIONS

**** Note: Compared to the other condominium suite in the same tower, be rented by CBRE Richard Ellis

1. Mr. Nopdol Tumwattana

PARTY WITH POTENTIAL CONFLICT

AMOUNT (Million Baht) DEC 31st, DEC 31st, 2009 2010 0.84 0.84

As of December 31st, 2009 to December 31st, 2010, the Company has Connected Transactions with person who may have conflict as follows:

Connected Transactions

1. The hire fee of this transaction is below the

market rate when compared to the other

condominium suite in the same area which

is around Baht 290 / sq.m. / month***

COMMENTS OF AUDIT COMMITTEE


33

1. (Continued)

PARTY WITH POTENTIAL CONFLICT

RELATIONSHIP 2. Loans Transactions On April 1st, 2006, Mr. Nopdol Tumwattana has provided a longterm loan for the Company in the amount of Baht 41,500,000 with interest rate of MOR (refer to Kasikorn Bank PLC) + 0.25% per annum, which is subjected to loan payment of Baht 500,000 on a monthly basis. The company must make the first payment on January 1st, 2007 and pay interest every 3 months by paying the loan and interest in full amount within the period of 7 years as from the first installment. - Beginning balance - (Paid) Ending balance Interest paid The Company has repaid the loan from Mr. Nopdol Tumwattana as mentioned above on December 17th, 2010.

CONNECTING TRANSACTIONS

1.74

1.27

AMOUNT (Million Baht) DEC 31st, DEC 31st, 2009 2010 29.50 23.50 ( 6.00 ) ( 23.50 ) 23.50 0.00

As of December 31st, 2009 to December 31st, 2010, the Company has Connected Transactions with person who may have conflict as follows (continued):

2. These transactions are benefitial to the company in terms of operation and are to stengthen the Company’s liquidity in the operation. Moreover, these transactions are without collateral, and carry the market interest rate of MOR + 0.25% per annum.

COMMENTS OF AUDIT COMMITTEE


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PARTY WITH POTENTIAL RELATIONSHIP CONFLICT 2. Miss Dolnapa Miss Dolnapa Tumwattana is a Chief Tumwattana Marketing Officer of the Company and holds 24.17% of shares as of December 31st, 2010 On September 17, 2008, Mr. Nopdol Tumwattana has signed the agreement to transfer the requirement right and reaping right on the land lease with building and the land lease for warehouse construction to Miss Dolnapa Tumwattana without any recompense, also already registered the said lease rights transferred with Department of Land and be effected for the rental fee of October 2008 onward. Leases List 1. Land with building, located at head office of BGT Corporation PLC. 2. Land for warehouse construction Since March 1st, 2009 to February 28th 2012, the rate of hire fee increase 5% of the same rate as follows; 1. Hire Fee of land and building from Baht 100,000 per month to Baht 105,000 per month. 2. Hire Fee of land for warehouse construction from Baht 50,000 per month to Baht 52,500 per month. An increasing rate is less than stated in previous agreement which has the right to increase the hire fee for each 3-year of renewal agreement, at the rate not exceed 15% of last month rental fee.

CONNECTING TRANSACTIONS

1.25 0.63 1.26 0.63

AMOUNT (Million Baht) DEC 31st, DEC 31st, 2009 2010

As of December 31st, 2009 to December 31st, 2010, the Company has Connected Transactions with person who may have conflict as follows (continued):

The transference of requirement right and reaping right are according to land lease with building and land lease for warehouse construction between Mr.Nopdol Tumwattana and Miss Dolnapa Tumwattana only, which do not impact to the Company.

COMMENTS OF AUDIT COMMITTEE


35

CONNECTING TRANSACTIONS Mr. Goh Kok Beng indirectly holds 64% of total shares of Twoagentsee International Limited (TAS). Furthermore, Twoagentsee International Limited (TAS) has entered into an agreement to allow and appoint the Company to be an exclusive distributor and licensee under the licensed trademark Peoples Market (PM). The initial term of an agreement shall be for a period of five (5) years, commencing from January 1st, 2010. After the expiration of the initial term, an agreement may be renewed for up to four (4) additional four (4) years term periods The transaction occurred between the parties as follows; - Copyright Fee - Accrued Copyright Fee Miss Waristha Thapanasakulvong holds 46.67% of total shares of Light Spot Polypac Company Limited. The transaction occurred between the parties as follows; - Plastic bag - Accrued Account Payable (Plastic bag)

RELATIONSHIP

Mr. Goh Kok Beng is a Director of the Company and holds 16.29% of shares as of December 31 st, 2010. He is Mr.Goh Kok Cheng, (Dickson)’s brother

4. Miss Waristha Miss Waristha Thapanasakulvong is a Thapanasakulvong Chief Financial Officer of the Company and holds 0.24% of shares as of December 31st, 2010.

PARTY WITH POTENTIAL CONFLICT 3. Mr. Goh Kok Beng

- - - - 0.50 0.27 0.45 -

AMOUNT (Million Baht) DEC 31st, DEC 31st, 2009 2010

As of December 31st, 2009 to December 31st, 2010, the Company has Connected Transactions with person who may have conflict as follows (continued):

COMMENTS OF AUDIT COMMITTEE


36

PARTY WITH POTENTIAL RELATIONSHIP CONNECTING TRANSACTIONS CONFLICT 5. Mrs. Nutthamon Mrs. Nutthamon Bualha is Chief Business Mrs. Nutthamon Bualha and Mr. Pisol Bualha (husband) Bualha Officer of the Company and not hold holds 33.33% and 33.33%, respectively of total shares of Degree any shares in the Company Digital Partnership. Then Mrs. Nutthamon Bualha holds 66.67% of total shares of Degree Digital Partnership. The transaction occurred between the parties as follows; - Printing - Accrued Account Payable (Printing)

- - 0.95 0.06

AMOUNT (Million Baht) DEC 31st, DEC 31st, 2009 2010

As of December 31st, 2009 to December 31st, 2010, the Company has Connected Transactions with person who may have conflict as follows (continued):

COMMENTS OF AUDIT COMMITTEE


2. Necessity and Reasonableness of Transactions

The Connected Transactions are based on the necessity and reasonableness of the ordinary course of business for the best interests of the Company operation and carry a fair price.

3. Procedures for the Approval of Connected Transactions

In the case of Connected Transactions, such consideration must be approved by the Board of Directors and the Shareholder’s Meeting, whichever case may be. The Board of Directors or the authorized persons from the Board of Directors are not allowed to participate in the decision on any transaction that a stake-holder or party with potential conflict having common interests or may have conflict of interest in any way with the Company or its subsidiaries. Moreover, the Company must comply with all legal orders concerning securities and the Stock Exchange. In the event the Company has registered securities in the Stock Exchange of Thailand, the Company shall comply with all regulations, announcements, orders or procedures of the Stock Exchange of Thailand in addition to the procedures on disclosure of information on the Connected Transactions and the acquisition or disposal of assets.

4. Policy on Connected Transactions in the Future

The Company has a policy that the future connected transactions may occur under the Board of Directors’s consideration based on the necessity and reasonableness of the ordinary course of business and have prices comparable to prevailing market rates for the best interests of the Company. However, the Company may allow the Audit Committee or the Company’s Auditor or Independent Advisor to review and comment on the prices and the reasonableness of any future transaction. Whereas the Company shall comply with all legal and regulatory orders as stipulated by related departments on Connected Transactions, i.e., the Securities and Exchange Commission, the Stock Exchange of Thailand.

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38

SENIOR FINANCE MANGER (Mr.Chai R.) INVENTORY CONTROL MANAGER

CHIEF FINANCIAL OFFICER (Miss Waristha Thapanasakunvong)

A&P EXECUTIVE

REGIONAL SALES MANAGER

CHIEF BUSINESS OFFICER (Mrs.Natthamon Buala)

PRESIDENT/ CHIEF EXECUTIVE OFFICER (Mr.Goh Kok Cheng, (Dickson)

CHAIRMAN OF THE BOARD (Mr.Nopdol Tumwattana)

BOARD OF DIRECTORS

CHIEF MARKETING OFFICER (Miss Dolnapa Tumwattana)

HUMAN RESOURCE & ADMIN MANAGER

Organization Chart of BGT Corporation Public Company Limited

SENIOR ACCOUNT MANAGER (Miss Methira T.)

(1) Management Structure

Management

WAREHOUSE MANAGER

PURCHASING MANAGER INFORMATION TECHNOLOGY

OPERATION DIRECTOR (Mr.Goh Kok Cheng, Dickson)

INTERNAL AUDIT

AUDIT COMMITTEE


As of December 31st, 2010, the management structure of the Company has comprised into two sets of Committees, namely, the Board of Directors and the Audit Committee as follows: (a) The Board of Directors is comprised of 8 directors as follows: 1. Mr. Nopdol Tumwattana Chairman of the Board 2. Mr. Goh Kok Cheng, (Dickson) President / Chief Executive Officer 3. Mr. Goh Kok Beng Director 4. Mrs. Mallika Leeraphant Director 5. Asst. Prof. Dr. Nantarika Chansue Director 6. Pol.Gen. Sereepisuth Taemeeyaves Director, Independent Director and Chairman of Audit Committee 7. Professor Emeritus Dr. Surapone Virulrak Director, Independent Director and Audit Committee Member 8. Mr. Panu Kongtan Director, Independent Director and Audit Committee Member With Miss Waristha Thapanasakunvong served as Secretary to the Board of Directors Authorized Persons The names and numbers of authorized persons to sign on behalf of the Company are Mr.Nopdol Tumwattana or Mrs.Mallika Leeraphant, either one director, to co-sign with Mr.Goh Kok Cheng, (Dickson) or Mr.Goh Kok Beng, either one director, total two persons and accompanied with a stamp of the Company’s Seal. Scope of Duties and Responsibilities of Board of Directors The Board of Directors shall perform their duties and responsibility to carry out the Company’s business in compliance with the laws, the objectives, the Articles of Association of the Company, and the resolutions of Shareholder’s Meetings in good faith, with due diligence and care in the best interests of the Company. The importance scopes of responsibilities are as follows: (1) Conduct an Annual Shareholders Meeting within 4 months as from the last day of the Company’s fiscal year period. (2) Conduct a Board of Directors meeting at least once every 3 months. (3) Responsible and verify the Company’s financial statements with the Auditor at the end of fiscal year period and propose to the Shareholders Meeting for consideration and approval. (4) The Board of Directors may appoint one or more directors or other person to carry out any act on behalf of the Board and under the monitoring of the Board, or may appoint such person an authority in a specified period, which the Board deep appropriate. The Board of Directors may abrogate, revoke change or adjust the appointed authority as deem appropriate. With respect to the foregoing approval, a person or persons delegated shall not be able to approve any transaction in which he or any person may have conflict of interest or beneficiary’s conflict with the Company or its subsidiaries (if any), unless such approval is executed on general commercial terms in accordance with the policy and criteria approved by the Board of Directors except. (5) Define vision, mission, strategy, operating plan as well as budgetary plan of the Company including control and monitor administrative functions, and the Board of Directors operation in accordance to the Company’s policy, with exception of the following which require consent from the Shareholders Meeting: capital increase; capital splitting; sales or transfer the Company operation, either whole or partial to other person; acquisition or transfer other company operation for the Company; or amend the Articles of Association or regulation, etc. In addition, the Board of Directors should control and monitor the Company’s operation to be in compliance with the law regarding the Securities and Stock Exchange policy and regulation such as making a transaction with respect to connected transactions or buying and selling significant assets in accordance to the SET policy and relating business transaction law. (6) Review the administrative structure, appointment of the President and other Committee Member as may deem appropriate. (7) Monitor the operation performance to assure that it is in accordance to the plan and budgetary continuously.

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(8) The director shall not perform or involve in any similar business and/or compete with the Company; become a partner in an ordinary partnership with unlimited liability; or assume a director position in a private entrepreneur or other company with similar business and/or compete with the Company either for personal interest or others, except to acquire a consent from the Shareholders Meeting prior to the appointment. (9) The director must inform the Company without hesitation if there is any direct or indirect interest involving any contract conducted by the Company; or holds shares or bonds of the Company or its subsidiaries at an increasing or decreasing number.

(b) Authorization from the Board of Directors The Board must scope the duties and responsibilitiy of the Chief Executive Officer and President as well as administrative authority for any ordinary operation. The important responsibility and authority are summarized as follows: Scope of Duties and Responsibilities of Chief Executive Officer (1) Monitor and follow-up on the Company’s operating results with the management. (2) Review annual budgetary plan as submitted by the management prior to submission to the Board of Directors for review and approval. (3) Monitor and follow-up on the Company’s operation as assigned by the Board of Directors. (4) Authorize to appoint, transfer, revoke or terminate the employment of the Executive level staff. (5) Approve and/or delegate authorities to approve acquisition of fixed assets other than ordinary business transaction within the credit limit of Baht 5 million per transaction. (6) Approve and/or delegate authorities to approve other ordinary transactions within the credit limit of Baht 10 million per transaction for the benefit of business liquidity. (7) Approve and/or delegate authorities to approve other ordinary transaction in business operation within the credit limit of Baht 100,000 per transaction. (8) Perform duties in good faith and utmost care for the benefits of the Company. (9) Approve on the performance of principle of trading agreement, generally for transaction processing between the company and any subsidiary firm, which may have connected transactions with Committees, Executive administrators or any person who may concern in the future. Those transactions with the same commercial terms as those an ordinary person would agree with any unrelated counterparty under the similar circumstances, on the basis of commercial negotiation, and without any dependent interest can be resulted from the status of the director, executive or related person. Also, any transaction of greater than Baht 5 million should be reported to the Board of Director’s meeting quarterly. The authority of Chief Executive Officer excludes an approval in any transaction, personal or person which may perceive as potentially causing conflict of interest or benefit with the Company or its subsidiary (if any) unless such approvals are deemed as ordinary course of business in accordance to the Company’s policy and criteria as have been approved by the Board of Directors. Scope of Duties and Responsibilities of President (1) Execute and carry out ordinary coursee of business relating to the general operation of the Company. (2) Perform duties as assigned by the Board of Directors or the Executive Chairman. (3) Authorize to appoint, transfer, revoke, terminate, set and increase salary, allocate reward, compensation and bonus to all employee of the Company below management level, including appoint a representative of the employer as Provident Fund Committee of the Company. (4) Approve and/or delegate authorities to approve acquisition of fixed assets other than ordinary business transaction within the credit limit of Baht 5 million per tranction. (5) Approve and/or delegate authories to approve other ordinary transactions within the credit limit of Baht 10 million per transaction for the benefit of business liquidity.

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(6) Approve and/or delegate authorities to approve other ordinary transaction in business operation within the credit limit of Baht 100,000 per transaction. (7) Authorize to issue instructions, regulations, announcement, and memos to ensure the business operations are in compliance with the Company’s policy and its best interest, with exception of matters regarding employee benefits. (8) Authorize to act and represent the Company on related business activities that are of best interest to the Company. (9) Perform other duties as assigned by the Board of Directors from time to time. (10) Perform duties in good faith and utmost care for the benefits of the Company. (11) Approve on the performance of principle of trading agreement, generally for transaction processing between the company and any subsidiary firm, which may have connected transactions with Committees, Executive administrators or any person who may concern in the future. Those transactions with the same commercial terms as those an ordinary person would agree with any unrelated counterparty under the similar circumstances, on the basis of commercial negotiation, and without any dependent interest can be resulted from the status of the director, executive or related person. Also, any transaction of greater than Baht 5 million should be reported to the Board of Director’s meeting quarterly.

However, the authority of President excludes an approval in any transaction, personal or person which may perceive as potentially causing conflict of interest or benefit with the Company or its subsidiary (if any) unless such approvals are deemed as ordinary course of business in accordance to the Company’s policy and criteria as have been approved by the Board of Directors (c) The Audit Committee is comprised with 3 members as follows: 1. Pol.Gen. Sereepisuth Taemeeyaves Chairman of Audit Committee 2. Professor Emeritus Dr. Surapone Virulrak Audit Committee Member 3. Mr. Panu Kongtan Audit Committee Member The Audit Committee number 3, Mr.Panu Kongtan has adequately expertise and experience to review creditability of financial reports. Term of Officer for Audit Committee is 3 years. With Miss Chirapha Chansuta served as the Secretary to the Audit Committee. Scope of Duties and Responsibilities of Audit Committee (1) to review the Company’s financial reporting process to ensure that it is accurate and adequate; (2) to review the Company’s internal control system and internal audit system to ensure that they are suitable and efficient, to determine an internal audit unit’s independence, as well as to approve the appointment, transfer and dismissal of the chief of an internal audit unit or any other unit in charge of an internal audit; (3) to review the Company’s compliance with the law on securities and exchange, the Exchange’s regulations, and the laws relating to the Company’s business; (4) to consider, select and nominate an independent person to be the Company’s auditor, and to propose such person’s remuneration, as well as to attend a non-management meeting with an auditor at least once a year; (5) to review the Connected Transactions, or the transactions that may lead to conflicts of interests, to ensure that they are in compliance with the laws and the Exchange’s regulations, and are reasonable and for the highest benefit of the Company; (6) to prepare, and to disclose in the Company’s annual report, an audit committee’s report which must be signed by the audit committee’s chairman and consist of at least the following information: (a) an opinion on the accuracy, completeness and creditability of the Company’s financial report, (b) an opinion on the adequacy of the Company’s internal control system, (c) an opinion on the compliance with the law on securities and exchange, the Exchange’s regulations, or the laws relating to the Company’s business, (d) an opinion on the suitability of an auditor,

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(e) an opinion on the transactions that may lead to conflicts of interest, (f) the number of the audit committee meetings, and the attendance of such meetings by each committee member, (g) an opinion or overview comment received by the audit committee from its performance of duties in accordance with the charter. (h) other transactions which, according to the audit committee’s opinion, should be known to the shareholders and general investors, subject to the scope of duties and responsibilities assigned by the Company’s board of directors. (7) To perform any other act as assigned by the Company’s board of directors, with the approval of the audit committee. (8) In its performance of duties, if it is found or suspected that there is a transaction or any of the following acts which may materially affect the Company’s financial condition and operating results, the audit committee shall report it to the board of directors for rectification within the period or time that the audit committee thinks fit: (1) transaction which causes a conflict of interest; (2) any fraud, irregularity, or material defect in an internal control system; or (3) an infringement of the law on securities and exchange, the Exchange’s regulations or any law relating to the Company’s business. If the Company’s board of directors or management fails to make a rectification within the period of time under the first paragraph, any audit committee member may report on the transaction or act under the first paragraph to the Office of the Securities and Exchange Commission or the Exchange. (d) The Independent Directors Committee is comprised with 3 members as follows: 1. Pol.Gen. Sereepisuth Taemeeyaves Independent Director 2. Professor Emeritus Dr. Surapone Virulrak Independent Director 3. Mr.Panu Kongtan Independent Director (e) The Executives Members are consisted of 7 persons as follows: 1. Mr. Nopdol Tumwattana Chairman of the Board 2. Mr. Goh Kok Cheng, Dickson President / Chief Executive Officer 3. Miss Waristha Thapanasakunvong Chief Financial Officer 4. Miss Dolnapa Tumwattana Chief Marketing Officer 5. Mrs. Natthamon Bualar Chief Business Officer 6. Mr. Chai Ratanamahavong Senior Finance Manager 7. Miss Methira Thongsuwan Miss Methira Thongsuwan (f) Company Secretary Company Secretary is a key person to help the Company perform according to laws and related regulations. The Company Secretary is responsible not only for collecting the information of the meetings but also oversee the meetings of the Board and shareholders’ meetings to be orderly and correct. Also, the company secretary must be a representive of the Company to contact with any compliance officers. Thus, the Company Secretary must be skillful and be responsible for any duty in the authority. The Board of Directors has appointed Miss Waristha Thapanasakunvong as a Company Secretary and scoped the duties and responsibilities as follows: Scope of Duties and Responsibilities of the Company Secretary (1) Meeting of the Board of Directors.  Set the meeting agendas with the Executive Committee.  Prepare the meeting agendas and documentations to be delivered with notice of director meeting.  Conduct the meetings as smoothly and legitimately.  Participate in the meetings and prepare minutes of the meeting.  Certify copy of the minutes of the Board of Directors meeting to various organizations.  Record and file the minutes of the meeting

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(2) Meeting of the Particular Committees  Set the meeting agendas with the Chairman of the Particular Committees.  Prepare meeting agendas and documentation to be delivered with notice of Particular Committee meeting.  Conduct the meetings as smoothly and legitimately.  Participate in the meetings and prepare minutes of the meeting.  Certify the minutes of the Particular Committee meeting.  Record and file the minutes of meeting. (3) Meeting of Shareholders  Prepare a meeting of shareholders as to be compliantly with the law.  Prepare and send notice of shareholder meetings and the company’s annual report to shareholders and compliance

officers.  Coordinate with shareholders to bring various proposals to management and executives for reviewing.  Prepare shareholders’ meeting agenda for the Chairman of the meeting.  Participate in the shareholders’ meetings and maintain in the meeting as smooth legitimacy.  Prepare and keep records on the minutes of shareholders meeting for delivering to any compliance officers, shareholders and be responsible for posting the meeting munites on the website. (4) Preparation of the registration and file the company documents.  Prepare and collect the Directors’ registeration forms as well as Annual Reports of the Company.  Track and collect reports on interest filed by a director or an executive.  File records of various policies and regulations of the Company which are to be approved, completed, and vertified by the Board of Directors, such as the original rules, etc. (5) Tasks of SET, SEC, Office of the National Anti-Corruption Commission (NACC)  To ensure that the listed company, Directors and Executives are in compliance with the regulations of SET, SEC and NACC.  Act as a coordinator for various matters with SET, SEC and NACC.  Notify to SET and SEC in regards to Directors and Executives of the listed company. (6) Duties and Responsibility of the Board of Directors and other Particular Committee.  Consult and give advice for a new establishment of Company’s Director.  Give advice and report to the Directors on responsibilities in terms of legitimacy and regulations according to SET and SEC as part of the Director of the Company’s duty.  File the records of the Board of Directors.  Consult and give advice to the Directors of the Company and be responsible for communications between the Directors.  Prepare any necessary information to the Board for recruiting the company’s Directors and Particular Committee and remuneration.  Act as a coordinator between the Board and other Executives.  Prepare and collect the performance assessment of the Board of Directors and Particular Committee. (7) Duties and Responsibility to the Shareholders.  Coordinate with a good relationship to the shareholders.  Answer questions and consider the proposals from shareholders.  Report to the Board and Executives as in regards to the shareholders’ requirements.  Act as a mediator between shareholders, the Board and Executives.  Notify the shareholders on any matters, such as the minutes of shareholders’ meeting.

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(8) Compliance of Rules and regulations  To ensure that the Company is in compliance with the rules and regulations, such as to process Information Disclosure Report (Form 56-1). (9) Corporate Governance  Support and provide information of Corporate Governance, and carry forward the Board to follow as well as to monitor the compliant requirements of these principles.  Provide information and give advice to the Directors and Executives for making various reports which to be complied with laws or regulations. As given, the information must be disclosed to the public for transparency such as to acknowledge of obligations as regards to the stocks holding reports and any reports of stock holding.  To ensure that the operation of the Company is in compliance with the Article of Association of the Company and SET. (10) Registration of Directors  Coordinate any registeration of Directors as based on Directors or the regulations.

(2) Selection of Directors and Executives

(a) Selection of Directors The Company has not appointed a Nomination Committee. In the selection of candidates, the directors shall be elected in accordance with the following rules and procedures: (1) The Board of Directors shall consist of at least 5 members being elected at the meeting of shareholders based on majority votes in accordance with the following criteria and methods: (1.1) each shareholder shall have a number of votes equal to the number of shares held; (1.2) each shareholder may exercise all the votes he or she has under (1.1) to elect one or several persons as

director or directors, but may not allot his or votes to any person. (1.3) after the vote, the candidates shall be ranked in order descending from the highest number of votes received to the lowest, and shall be appointed as directors in that order, until all of the director positions are filled. Where there is an equality of votes cast for candidates in descending order causing the number of directors to be exceeded, the Chairman of the meeting shall cast one extra vote. (2) At every annual ordinary meeting of shareholders, one-third of the directors shall vacate in proportion where the Committee members who were in the post for the longest period shall be retired. If the number of directors is not a multiple of three, the number of directors closest to one-third shall vacate. (b) Selection of Independent Directors and Audit Committee The Independent Directors and Audit Committee shall be elected in accordance with the following criteria: (1) Holding no more than 1% of the Company’s paid up capital, or that of an affiliated company, a related company or an associate company, including the shares holding by related persons. (2) Not involve in the day to day management of the Company, an affiliated company, a related company, an associate company; and not an employee, staff or an advisor receiving a regular salary from the company, an affiliated company, a related company, an associate company, or major shareholders of the Company. (3) Administrative operation of the Company, an affiliated company, a related company, an associate company, or major shareholders of the Company; and have no benefit or conflict of interest with reference to the aforementioned for 2 years during an accounting year prior to the appointment as Independent Directors or Audit Committee unless approved by the Board of Directors after careful consideration that such benefit or conflict of interest shall have no influence to the performance and ability to give opinion in an independent manner. (4) No relationship or being related to the Executives or major shareholders of the Company.

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(5) Not be appointed as a representative or to safeguard the interests of the Company’s directors, major shareholders or shareholders who are related to the Company’s major shareholders. (6) Must be capable of his or her performing duties, giving his or her opinions or reporting the results of work performance according to the duties delegated by the Board, free and clear of the control of management or major shareholders of the Company including related persons or close relatives of the said persons (7) Not an Audit Committee of other corporates in the same industry (8) At least 1 person of Audit Committee must have adequate expertise and experience to review creditability of financial reports.

(c) Number of directors who are major shareholders

Number of directors who are major shareholders is consisted to 3 directors as follows:

Director who is major shareholder from the Tumwattana Family is Mr. Nopdol Tumwattana Director who are major shareholders from Malaysian Investors are Mr. Goh Kok Cheng, (Dickson) and Mr. Goh Kok Beng.

(3) Executive Remuneration (a) Monetary Compensation Directors

Year 2010 Attendance Fee Director Pension (Baht) (Baht) 100,000.- - 80,000.- - 20,000.- - 80,000.- - 60,000.- - 180,000.- - 160,000.- - 160,000.- - 840,000.- -

Name Mr. Nopdol Tumwattana Mr. Goh Kok Cheng, Dickson Mr. Goh Kok Beng Mrs. Mallika Leeraphant Asst. Prof. Dr. Nantarika Chansue Pol.Gen. Sereepisuth Taemeeyaves Professor Emeritus Dr. Surapone Virulrak Mr.Panu Kongtan Total

Executive remuneration whose names are listed as Executive Members Remuneration Salary Bonus Provident Fund Accommodation Insurance Policy Entertainment Other Total

Year 2010 No. of Executive (Person) Total Remuneration (Baht) 7 7,779,600.- 7 3,183,800.- 7 227,628.- 1 840,000.- 2 1,014,000.- 2 420,780.- 4 9,280.- 13,475,088.-

(b) Other Moneraty Compensation The Company and its employee had established a Provident Fund in which the Company’s contribution equivalent 2 - 3% of monthly salary. The Company started to pay the said contribution for the executives and employees as from June, 2007 onward.

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(4) Corporate Governance

The Company recognizes the importance of carry out the responsibilities of business operation, in nurturing a good corporate governance practice. Therefore, the Company strives to operate its business in compliance with the guidelines of the Stock Exchange of Thailand’s (SET) Code of Best Practice for Directors of Listed Companies. In addition, the Company resolved to adopt the Principle of Good Corporate Governance following the guidelines of the SET to ensure the highest benefits to the Company and to strengthen the transparency and efficiency of the management that could strengthen the confidence of the shareholders, investors and all related parties concerned as follows: Section 1 Right of the Shareholder (1) The Company shall place utmost importance on the rights of every shareholder. On each Shareholder’s meeting, the Company shall send a written notice calling the meeting with relevant information to the shareholders not less than 7 days prior to the date of the meeting. Moreover, in the event the Securities & Exchange Commission or the Stock Exchange of Thailand requiring that the Company should send a written notice calling the meeting to the shareholders more than 7 days in advance, the Company shall promptly comply with such regulation, i.e., a written notice calling the meeting to consider connected transactions or acquisitions and dispositions of assets; or a written notice calling the meeting to consider Employee Stock Option Program, etc., the Company shall send such written notice calling the meeting of shareholders not less than 14 days prior to the date of the meeting. On the day of shareholders’ meeting, the Company shall provide equal opportunity for every shareholder to audit the Company’s performance and express opnion and comment freely and the Company shall prepare minutes of all shareholders’ meetings that are accurate and complete in order to be examined by the shareholders. (2) Shareholders’ Meeting At the Shareholders’ Meeting, the Chairman of the Meeting provides equal opportunity for every shareholder to examine the Company’s operation, to ask questions or comment on any suggestions. The Company recognizes the importance of the shareholders’ meeting; thus, it is the Company’s policy to prepare and provide sufficient and adequate information to the shareholders providing equitiable treatment to express their opinions and raise any questions at the shareholders’ meeting. The following procedures relating to preparation of the shareholders’ meeting are adopted by the Company, namely: (a) Receive Notice of the Meeting: The company shall prepare a written notice calling the meeting that indicate the place, date, time, agenda of the meeting and the matters to be proposed to the meeting together with sufficient detail to the shareholders not less than 14 days prior to the date of the meeting. The notice calling for the meeting shall also be posted in the Company’s website. (b) Conduct the Meeting: At the Shareholders’ Meeting, the Chairman of the Meeting shall explain the voting procedure and vote count prior to the commencement of the meeting, and provide opportunity for the shareholders to ask questions, express opinions and suggestions on various agendas in which significant topics in questions and suggestions will be recorded in the minutes of the meeting. In addition, the Company shall arrange to have representatives from the Board of Directors, the Management, the Audit Committee, the Auditor and Legal Advisor to attend the Shareholders’ Meeting for questions clarification. (c) Minutes of the Shareholders’ Meeting: The Company shall disclose the Minutes of the Shareholders/ Meeting via the Company’s website and shall propose to the shareholders to consider confirmation of the Minutes at the next meeting. The Company shall maintain the Minutes of Shareholders’ Meeting and keep them at a safe place for related party to examine. Section 2 Right and Equitable Treatment (1) For shareholders who are unable to attend the meeting, the Company provides a proxy form to allow the shareholders to appoint an Independent Director or Audit Committee as a proxy to vote on behalf of the shareholders.

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(2) Control and Usage of Insider’s Information The Company place importance on the effective controlling system and the internal audit for both the Executives and operation level staff. Therefore, clear job descriptions and lines of authority and reporting and responsibilities for each unit are defined in writing to support the control and monitoring the use of company’s assets for the benefits of the Company. There are segregation of positions for operation staff, managment staff and performance appraisal staff to balance off the power and cross-examination as appropriate. In addition, there is an internal control system for Sales in which the Company has set up reporting system for submission to respective Executive for approval. With this, the Company has signed an agreement to appoint, RPJM Coaching Company Limited, as the Company’s Internal Audit, with the scope of responsibility consisted of 4 systems as follows: 1. Sales and Collection System 2. Procurement and Payment System 3. Inventory Control and Warehouse System 4. Human Resources Management System The Company’s internal audit officer shall submit the report of performance appraisal on internal audit activities to the Audit Committee. Additionally, the Company’s internal audit officer shall review any significant connected transactions as assigned by the Audit Committee for submission to the Audit Committee. The secretary of Audit Committee shall act as a coordinator between an internal auditor and the Company’s Executive. The Board of Directors highly recognizes the importance of Risk Management. Therefore, the Company has set up a risk assessment for the operation and has set a preventive measurement and mitigation, including the risk that will have an impact on the Company’s business operation as specified in the risk factors. Section 3 Role to Stakeholders (1) Rights of Stakeholders The Committee assigns the highest priority to the rights of all stakeholders as follows: (a) Employees: The Company treats all employees as equal, fair with reasonable compensation whilst continues to hold training and development on skilled knowledge and foreign lanquage. (b) Business Parters and Creditors: The Company strictly observes and adheres to all its obligations to partners and creditors on a fair basis in compliance with the commercial conditions and/or joint agreement for mutual benefits of both parties. (c) Customers: The Company is honest and sincere to the customers and continues to provide quality products whilst gathering feedback and comments from the customer. (d) Competitors: The Company abides by rules and ethics of fair competition, and will not destroy its competitors through unethical strategies. (e) Shareholders: The Company continues to develop the organization toward continuous growth for higher sales revenues and increase of net profit which shall benefit the shareholders in terms of reasonable return on investment based on the present business situation. (f) Society and Community: The Company continues to play an active role in the community environment and society, including takes part in social activities for the benefit of the community. Section 4 Disclosure of Information and Transparency (1) Corporate Governance Policy The Board of Directors adopted the principal good governance policy as it recognizes the significant roles in nurturing the practice which facilitating continous growth and stability. The Board is determined and intended to follow the principal by setting policy and direction for the Company’s operation to place importance on the internal control system and the internal audit; to monitor the administrative management in carry out the operation effectively for the long-term benefit of the shareholders under the governing laws and business ethics including the disclosure of information and transparency and appropriate risk management.

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(2) Business Ethics The Company has clear regulations on Code of Ethics or Statement concerning the duty of the Board of Directors, the Executives and all employees of the Company, as guidelines in performing one’s duties with honesty, integrity and moral principles. The Company shall sincerely monitor and follow-up to encourage the best practice on Code of Ethics or Statement among the employees as well as the disciplinary action otherwise. (3) Investor Relation The Board of Directors understands the importance of disclosed the Company’s information regarding finance and non-finance information in terms of transparency and accuracy. Thus, the Company has appointed Miss Waristha Thapanasakunvong to be responsible for the disclosure of the Company’s important information, including creating a good relationship and communicate to investors, shareholders and other analysts. General investors can contact the Company for more information at Telephone: 0 - 2972 - 3460 Ext. 818 or www.bodyglove.co.th Section 5 Responsibilities of Board of Directors (1) The Board of Directors specifies the policy and participate in the consideration and approve to determines the vision, missions, strategies, business plan and budget of the Company, as well as having good corporate governance so that the executives perform the work under the policy as specified effectively and efficiency whilst increase more valued added at the height of the economy for the business and the highest stability for the shareholders. (2) Balance of Power for Non-Executive Directors There are 8 persons on the Board of Directors, namely  2 directors from the Executives  3 directors not from the Executives  3 directors as Independent Directors Therefore, the Company has 3 directors as Independent Directors who represent 37.5% of the whole Board of Directors. Moreover, the numbers of director from major shareholders are consisted of 3 directors, or 37.5% of the whole Board of Directors, namely (1) directors from major shareholders of Tumwattana’s Family is Mr. Nopdol Tumwattana and (2) directors from major shareholders of Malaysian Investors are Mr. Goh Kok Cheng, (Dickson) and Mr. Goh Kok Beng. The directors from these two major shareholders groups can balance off the power of the administrative operation among themselves. (3) Aggregration or Segregation of Positions The Chairman of the Board is not the same person as the President as to clearly define and separate role of dties in directing the Company’s policies and management. (4) Conflict of Interest In order to prevent conflict of interest transaction, it is the Board of Directors’s authorization to specify that an authorized person shall not approve any transaction of his own or a person who may have conflict of interest or benefit unless such transaction is of ordinary business transaction of the Company under general commercial terms. In addition, the Company shall comply with the Security and Exchange of Thailand’s notification governing the connected transaction of the registered company, or on the acquisition or disposition of assets of the registered company, whichever case may be. Furthermore, the Company shall set policy and procedure that no members of the Executives or related parties can use non-disclosure information of the Company for personal benefit.  The Company has potential conflict of interest transactions.  The Company shall require that the Executives report changes of the securities hold to the Securities Exchange Commission, Section 59, of the Securities and Exchange Act, B.E. 2535 within three working days. In addition, The Directors, Executives or employees who receive the internal information are prohibited to disclose internal information to outside individual or non-related person, and the said Directors, Executives or employees must not buy or sell shares of the Company for a period of one month before the release of the Company’s financial statements to the public.

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The Company’s policies on transactions that may have potential conflict of interest or connected transactions are as follows:  to set a price and term following the same procedure as may entered with other invidivual.  to strictly follow the procedures of the Stock Exchange of Thailand.  to disclose information on connected transactions in the Company’s Financial Statements, Annual

Report and Information Disclosure Report (Form 56-1) for inspection by the shareholders. (5) Remuneration for the Board of Directors and Executives. Remuneration for the Board: The Company has defined a clear and transparent remuneration policy, which is determined to be an equitable manner with the industry standards as approximately as the size of the operation base and must be approved by the Shareholders’ Meeting. Remuneration for the Executives: Remuneration for the Executives is in compliance with the principle and policy as set by the Board of Directors which related to the Company’s performance and individual performance of the Executives. The Company has no Remuneration Committee at present. (6) Board of Directors Meeting The Board of Directors shall hold a meeting at least once every 3 months and hold additional meetings as deem necessary. The Company Secretary served a written notice, the agenda, and any documents to the directors not less than 7 days prior to the date of meeting to ensure sufficient time for the directors to study and review the agenda before attending the meeting. The Company shall maintain the minutes of meetings and keep the said documents receiving the confirmation from the Board of Directors for future examine by the Board or related party. In 2010, the Board of Directors held meetings as follows: Year 2010 BOARD OF DIRECTORS No. of Attendance / No. of Meeting Board of Directors Meeting Audit Committee Meeting 1. Mr. Nopdol Tumwattana 4/4 - 2. Mr. Goh Kok Cheng, Dickson 4/4 - 3. Mr. Goh Kok Beng 1/4 - 4. Mrs. Mallika Leeraphant 4/4 - 5. Asst. Prof. Dr. Nantarika Chansue 3/4 - 6. Pol.Gen. Sereepisuth Taemeeyaves 4/4 4/4 7. Professor Emeritus Dr. Surapone Virulrak 4/4 4/4 8. Mr.Panu Kongtan 4/4 4/4 (7) Sub-Committee The Company appointed the Audit Committee to monitor and review the Company’s operation with clear scope of duties and responsibility of Audit Committee (details as shown in Item 1 (c)). The Company has no Remuneration Sub-Comiittee. However, the Company has taken appropriate procedure in consideration for the remuneration, and determined in a manner equitable with industry standards of approximately the size operation, and is performance-based. (8) Board of Directors’s Report The Board of Directors is responsible for the financial statements of the Company and the fiancial information as shown in the Annual Report. The financial statements shall comply with the generally accepted accounting standards in Thailand, which considered appropriate for the Company. In addition, the Board of Directors is accountable for reviewing the accuracy of the Company’s financial statements and ensures there is adequate disclosure in notes to financial statements. Moreover, the Company has stipulated the Audit Committee to scrutinize and review the financial statements as well as to disclose the financial statements of the Company.

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(5) Internal Information Usage

The Company has a concise policy and procedure on the control and usuage of internal information, especially the information on the Company’s financial status that must be audited / reviewed by the Certified Public Accountant and receive approval from the Audit Committee Meeting every time before propose to the Board of Directors and the Stock Exchange of Thailand or general public. The Company has come up with the rules to prevent the usage of inernal data for personal benefits for the Board of Directors, Executives and employees as follows: (1) To prohibit the Board of Directors, Executives as well as their spouses and children under legal age the use of internal information for the purpose of acquisition, disposition, transfer or take over the securities of the Company before such information is disclosed to the general public, especially within 30 days before the disclosure of the Company’s financial statements to the public. Moreover, following the release of such information, the aforementioned individuals are prohibited to acquire or dispose of the securities of the Company until the public acknowledge the information receipt for appropriate time (7 days from the disclosure date) (2) To acknowledge the Board of Directors and Executives as well as their spouses and children under legal age to be aware of their duties that they have the duties to submit reports on the securities holding of the Company in accordance to the Securities and Exchange Commission Notification No. Sor. Jor. 14/2540, Re: Preparation and Disclosure of Reports on Securities Holding of directors, Executives and auditor of the company. In case of any violation of the aforementioned regulations, the Company shall proceed with a disciplinary action as may deem appropriate, i.e., verbal warning with written confirmation, deduction of salary, suspend, or termination of employment, etc.

(6) Employees

(a) Total number of employees as of December 31st, 2010 was 559 persons (b) Total remuneration and type of compensation provided to the employees (excluded Directors and Executives) Types of Remuneration Salary / Wages Bonus Employees benefits expenses Total

Y2010 (Baht) 64,164,202.- 3,396,872.- 25,362,948.- 92,924,022.-

(c) Policy on Human Resources Development As the Company’s operation is distribution of ready-to-wear apparels and accessories under Body Glove Trademark which place high emphasis on the continuation of product development and quality service to promote sales. The Company, therefore, recognizes the importance of Human Resources Development to ensure the highest benefits for the Company and for the customer’s satisfacton on impressive service rendered. With these objectives, we strive to strengthen the effectiveness in various areas, such as, (1) the administrative management of Flagship Store and product presentation; (2) the complete quality service rendered by skillful staff who understand the products and brand trademark; (3) increment sales volumes and profits; and (4) building strong and binding relationship among co-workers and working effectively as teamwork. The Company’s Human Resrouces Department is in charge of the training, both in-house and public. For in-house training, the speaker is represented by the Company member and/or special guest speaker from outside. For public training, the Company will send the employees to attend courses by considering the position, duty and responsibility for selection of suitable courses and contents as well as the Training Institution for the benefit of the employee and the Company as a whole.

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(7) Internal Control

The Company recognizes the importance of an internal control system with sufficiency to protect or minimize probable risks. Whereas the Board of Directors has established an Internal Audit Department by hiring an outside company, to review the operation systems in accordance to the annual audit plan as approved by the Audit Committee. It is the Company’s objectives to ensure and evaluate the efficiency and sufficiency of the Company Internal Control System; to ensure that all resources are utilized to full benefits whilst control on other company’s operations are in line with the law governing and the government regulations, and important financial transactions of the Company are conducted efficiently and accurately. Therefore, in order for the Internal Audit Department to be independet and to be able to assess and perform its checks and balances task, the Board of Directors has stipulated that the Internal Audit Department report directly to the Audit Committee. As for the Risk Management, the Company views the importance of the risk management procedure by consider the present risk factors and expected risk together and thus analyze probable impact or possibility that such risk will take affect in order to set a preventive measurement and manage such risk. After careful consideration, the Company has prepared a report on Risk Management and constantly follow-up on the results. For major Risk Factors of the Company, details are summarized in a separate topic under Risk Factors. The Board of Directors and the Audit Committee had evaluated the Internal Control System in accordant to the Appraisal of the Sufficiency of Internal Control and concluded that the Company had sufficient Internal Control System and appropriate for the business operation. In addition, there was no significant faults relating to the Internal Control System and that the system can protect the Company’s assets from unjustify or wrongly usuage by the Executives. The Audit Committee Board had expressed that the Company develop the 15 Principles of Good Corporate Governance as set by the Stock Exchange of Thailand to the full extent.

(8) Dividend Policy

The Company has a policy of making annual dividend payment to its shareholders at a rate of no less than 40% of the Company’s net profit after deduction of income tax; however, are subject to change to a lower rate than aforementioned depending on the Company’s investment plan on business operation.

51


BGT Corporation Public Company Limited

FINANCIAL STATEMENTS For The Years Ended December 31, 2010 และ 2009 And Independent Certified Public Accountants’ Report

52


INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS’ REPORT To The Shareholders and Board of Directors of BGT Corporation Public Company Limited I have audited the accompanying balance sheet of BGT Corporation Public Company Limited as of December 31, 2010, the related statements of changes in shareholders’ equity, income and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. My responsibility is to express an opinion on these financial statements based on my audit. The financial statements of BGT Corporation Public Company Limited for the year ended December 31, 2009, presented herein for comparison, were audited in accordance with generally accepted auditing standards by another auditor in my office, expressed an unqualified opinion in her report dated February 8, 2010. I conducted my audit in accordance with generally accepted auditing standards. Those Standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provide a reasonable basis for my opinion. In my opinion, the financial statements present fairly, in all material respects, the financial position of BGT Corporation Public Company Limited as of December 31, 2010, the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. (SUMIT KHOPAIBOON) Certified Public Accountant Registration No. 4885 A.M.T. & ASSOCIATES Bangkok, Thailand February 1, 2011

53


BALANCE SHEETS

BGT CORPORATION PUBLIC COMPANY LIMITED AS OF DECEMBER 31, 2010 AND 2009

BAHT

ASSETS CURRENT ASSETS

NOTE

Cash and cash equivalents Current investment Trade account receivables Inventories - net Other current assets Total Current Assets NON - CURRENT ASSETS Property, plant and equipment - net Intangible assets - net Other non - current assets Leasehold rights - shop area - net Rental deposits Total Non - Current Assets TOTAL ASSETS

21.2

33,280,228.53

16,722,656.84

3

12,895,788.98

58,080,623.92

4

43,294,112.60

33,171,988.89

5

238,832,648.46

187,125,337.38

10,110,536.81

6,208,789.13

338,413,315.38

301,309,396.16

6, 11, 20 and 21.1

149,904,763.99

73,952,151.07

7 and 18

11,690,082.22

13,631,233.41

8, 11, 20 and 21.1

47,778,537.62

27,145,119.04

21.1

45,139,942.44

33,688,026.57

254,513,326.27

148,416,530.09

592,926,641.65

449,725,926.25

2010

The accompanying notes to financial statements are an integral part of these statements.

54

2009


BALANCE SHEETS

BGT CORPORATION PUBLIC COMPANY LIMITED AS OF DECEMBER 31, 2010 AND 2009

LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Bank overdrafts Trade account payables Current portion of finance lease obligations Current portion of long - term loan from related person Current portion of long - term loans from others Current portion of accrued trademark fee Other current liabilities Accrued expenses Accrued income tax expenses Account payables - fixed assets Others Total Current Liabilities NON - CURRENT LIABILITIES Finance lease obligations Long - term loan from related person Long - term loans from others Other non - current liabilities Accrued trademark fee Employee deposits Deposit received Total Non - Current Liabilities Total Liabilities

NOTE

2010

BATH

2009

-

2,199,346.48

116,478,083.17

95,179,460.25

9

3,747,801.94

1,278,639.82

10

-

6,000,000.00

11

25,050,519.58

6,466,706.60

18

3,029,630.00

3,351,680.00

24,242,508.02

19,258,488.40

8,730,225.12

5,624,338.93

7,164,957.54

7,237,529.67

1,375,139.82

1,601,492.20

189,818,865.19

148,197,682.35

9

12,682,490.55

269,420.95

10

-

17,500,000.00

11

64,061,545.96

5,480,031.99

18

757,407.50

4,189,600.00

3,346,770.00

2,702,977.00

720,000.00

720,000.00

81,568,214.01

30,862,029.94

271,387,079.20

179,059,712.29

The accompanying notes to financial statements are an integral part of these statements.

55


BALANCE SHEETS

BGT CORPORATION PUBLIC COMPANY LIMITED AS OF DECEMBER 31, 2010 AND 2009

LIABILITIES AND SHAREHOLDERS’ EQUITY หมายเหตุ SHAREHOLDERS’ EQUITY Share capital 12 and 16 Authorized share capital 320,000,000 ordinary shares of Baht 0.50 each as of December 31, 2010 and 160,000,000

ordinary shares of Baht 0.50 each as of December 31, 2009 Issued and paid - up share capital 319,573,300 ordinary shares of Baht 0.50 each as of December 31, 2010 and 160,000,000

ordinary shares of Baht 0.50 each as of December 31, 2009 Premium on share capital Retained earnings Appropriated Legal reserve 13 Treasury stock reserve 14 Unappropriated Total Shareholders’ Equity Less Treasury stocks 15 Total Shareholders’ Equity - net TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

2553

2552

160,000,000.00

80,000,000.00

159,786,650.00

80,000,000.00

69,680,000.00

69,680,000.00

9,850,688.16

6,751,956.54

-

5,289,970.00

82,222,224.29

114,234,257.42

321,539,562.45

275,956,183.96

-

(5,289,970.00)

321,539,562.45

270,666,213.96

592,926,641.65

449,725,926.25

The accompanying notes to financial statements are an integral part of these statements.

56

BATH


57

16

13

16

15

15

14

16

13

Dividend payment

Appropriated legal reserve

End balance as of December 31, 2009

Increase in share capital from stock dividend payment

Net profit

Sale of treasury stocks

Loss on sale of treasury stocks

Reverse of treasury stock reserve

Dividend payment

Appropriated legal reserve

End balance as of December 31, 2010

159,786,650.00

-

-

-

-

-

-

79,786,650.00

80,000,000.00

-

-

-

80,000,000.00

share capital

paid-up

Issued and

69,680,000.00

-

-

-

-

-

-

-

69,680,000.00

-

-

-

69,680,000.00

share capital

Premium on

The accompanying notes to financial statements are an integral part of these statements.

NOTE

Net profit

Beginning balance as of January 1, 2009

FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

BGT CORPORATION PUBLIC COMPANY LIMITED

9,850,688.16

3,098,731.62

-

-

-

-

-

-

6,751,956.54

-

-

2,324,538.85

-

-

4,427,417.69

Legal reserve

-

-

-

(5,289,970.00)

-

-

-

-

(2,324,538.85)

(7,870,680.00)

46,490,776.91

77,938,699.36

82,222,224.29

(3,098,731.62)

(15,957,330.00)

5,289,970.00

(433,924.00)

-

61,974,632.49

(79,786,650.00)

Baht

-

(7,870,680.00)

46,490,776.91

-

-

-

-

-

5,289,970.00

-

-

321,539,562.45

-

(15,957,330.00)

-

(433,924.00)

5,289,970.00

61,974,632.49

-

(5,289,970.00) 270,666,213.96

-

-

-

(5,289,970.00) 232,046,117.05

Unappropriated Treasury stocks Total

5,289,970.00 114,234,257.42

-

5,289,970.00

Treasury stock reserve

Appropriated

Retained earnings

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY


STATEMENTS OF INCOME BGT CORPORATION PUBLIC COMPANY LIMITED

FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

NOTE

2010

Baht

2009

REVENUES

Revenue from sale of goods

Other income

- Adjustment of decline in value of obsolete inventories

5

-

1,733,225.12

- Gain on exchange rate

936,603.27

527,832.17

- Others

3,938,124.30

1,436,937.58

Total Revenues

811,937,219.59

666,947,717.60

EXPENSES

Cost of sale of goods

384,427,942.78

332,225,774.04

18

32,228,521.72

26,494,195.14

Selling expenses

227,497,433.51

181,202,915.88

Administrative expenses

63,100,532.23

49,221,740.09

Management benefit expenses

14,428,659.66

13,885,125.73

Other expenses

401,611.45

1,666,255.16

Total Expenses

17

722,084,701.35

604,696,006.04

PROFIT BEFORE FINANCE COST AND INCOME TAX EXPENSES

89,852,518.24

62,251,711.56

FINANCE COST

5,330,766.24

2,884,131.86

PROFIT BEFORE INCOME TAX EXPENSES

84,521,752.00

59,367,579.70

INCOME TAX EXPENSES

22,547,119.51

12,876,802.79

NET PROFIT

61,974,632.49

46,490,776.91

0.24

0.30

Royalty fee

BASIC EARNINGS PER SHARE

2.17

The accompanying notes to financial statements are an integral part of these statements.

58


STATEMENTS OF CASH FLOWS BGT CORPORATION PUBLIC COMPANY LIMITED

FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

CASH FLOWS FROM OPERATING ACTIVITIES Net profit Adjustments to reconcile net profit to net cash provided by (used in) from operating activities Interest income Depreciation and amortization Interest expenses Income tax expenses Increase (decrease) in adjustment of decline in value of obsolete inventories Unrealized loss (gain) on exchange rate Loss (gain) on sales of current investment Unrealized loss (gain) on change in value of current investment Loss from property, plant and equipment written - off Loss (gain) on sale of property, plant and equipment Loss (gain) from insurance claim on assets Payment for acquisition in current investment Proceeds from sales of current investment Proceeds from insurance claim on inventories Decrease (increase) in trade account receivables Decrease (increase) in inventories Decrease (increase) in other current assets Decrease (increase) in other non - current assets - rental deposits Increase (decrease) in trade account payables Increase (decrease) in other current liabilities - accrued expenses Increase (decrease) in other current liabilities - account payables - fixed assets Increase (decrease) in other current liabilities - others Increase (decrease) in other non - current liabilities - accrued trademark fee Increase (decrease) in other non - current liabilities - employee deposits Income tax paid Net cash inflow (outflow) from operating activities

2010

BAHT

2009

61,974,632.49

46,490,776.91

(68,875.67) 33,890,304.94 5,330,766.24 22,547,119.51 4,041,667.40 (402,562.50) (965,727.26) 650,562.20 401,611.45 (1,265,108.79) (497,260.44) (55,000,000.00) 100,500,000.00 1,800,000.00 (10,122,123.71) (57,244,414.92) (3,877,519.77) (11,451,915.87) 21,298,622.92 4,819,678.87 (7,237,529.67) (226,352.38) (3,351,680.00) 643,793.00 (19,465,461.23) 86,722,226.81

(80,640.41) 29,095,193.90 2,884,131.86 12,876,802.79 (1,733,225.12) (352,260.00) - (488,863.83) 1,948,783.73 (504,671.90) - (33,000,000.00) - - (6,970,695.41) (26,742,223.76) (1,595,572.63) (4,654,770.61) 39,534,729.25 2,023,090.64 (6,213,028.61) 337,816.21 (2,631,180.00) 352,180.00 (11,501,848.50) 39,074,524.51

59


STATEMENTS OF CASH FLOWS BGT CORPORATION PUBLIC COMPANY LIMITED

FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

CASH FLOWS FROM INVESTING ACTIVITIES Interest received

2010

BAHT

2009

68,875.67

80,640.41

(75,403,457.23)

(15,888,992.43)

Proceeds from sale of prope rty, plant and equipment

2,112,803.74

504,672.90

Payment for purchase of leasehold rights - shop area

(26,576,800.00)

-

1,000,000.00

-

Payment for purchase of property, plant and equipment

Proceeds from insurance claim on fixed assets Net cash inflow (outflow) from investing activities

(98,798,577.82)

(15,303,679.12)

Interest paid

(5,166,425.49)

(2,894,561.85)

Increase (decrease) in bank overdrafts

(2,199,346.48)

1,722,295.47

Increase (decrease) in finance lease obligations

(6,564,348.28)

(1,451,778.53)

(23,500,000.00)

(6,000,000.00)

77,165,326.95

(6,804,021.19)

CASH FLOWS FROM FINANCING ACTIVITIES

Increase (decrease) in long - term loan from related person Increase (decrease) in long - term loans from others Proceeds from sale of treasury stocks Dividend paid

4,856,046.00

-

(15,957,330.00)

(7,870,680.00)

Net cash inflow (outflow) from financing activities

28,633,922.70

(23,298,746.10)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS - NET

16,557,571.69

472,099.29

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

16,722,656.84

16,250,557.55

CASH AND CASH EQUIVALENTS, END OF YEAR

33,280,228.53

16,722,656.84

7,164,957.54

7,237,529.67

ACTIVITIES NOT AFFECTING CASH : Increase in account payables - fixed assets from purchase of property, plant and equipment Increase in finance lease obligations from purchase of vehicles

21,446,580.00

Decrease in retained earnings from deduction of loss on sales of treasury stocks Increase in share capital from stock dividend payment

-

433,924.00

-

79,786,650.00

-

The accompanying notes to financial statements are an integral part of these statements.

60


NOTES TO FINANCIAL STATEMENTS BGT CORPORATION PUBLIC COMPANY LIMITED

FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

1. GENERAL INFORMATION

1.1 General matter The Company was incorporated as a limited company under the Thai Civil and Commercial Code on March 31, 1988, and changed its status to a public limited company under the Public Limited Company Act on June 29, 2007 and the Company’s shares had been approved to be listed in the Market for Alternative Investment (MAI) on December 11, 2007. The address of its registered office is 299/9 Moo 7, Phaholyothin Road, Anusawaree, Bangkhen, Bangkok. The Company operates in Thailand, and its principal activities are retail of ready-to-wear clothes. 1.2 Basis for preparation financial statements The financial statements of the company have been prepared in accordance with generally accepted accounting standards including related interpretations and guidelines promulgated by the Federation of Accounting Professions. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies. 1.3 Related parties 1.3.1 Related companies are related through joint directors and/or related through the key management personnel as follows: - Twoagentsee International Limited - Light Spot Polypack Co., Ltd. - Degree Digital Ltd. Part. 1.3.2 Related persons are the directors of company and/or the shareholders and/or the key management personnel as follows: - Mr. Nopdol Tumwattana - Mr. Goh Kok Beng - Ms. Dolnapa Tumwattana - Ms. Waristha Thapanasakulvong - Ms. Natthamon Bualah 1.4 Adoption of new accounting standards In May 2009, the Federation of Accounting Professions (FAP) has issued Notifications No. 12/2552 regarding the renumbering of Thai Accounting Standards to match correspondingly with the International Accounting Standards. Therefore the numbers of Thai Accounting Standards as used in these financial statements are corresponding to those according to this notification. During the current year, the Federation of Accounting Professions (FAP) has issued a number of revised and new accounting standards which have been published in the Royal Gazette as follows : 1) An accounting standard which is effective for the current year as follows : Framework for the Preparation and Presentation of Financial Statements (revised 2009) However, the management has considered the effect of this accounting standard that it does not have any significant effect on the financial statements for the current year. 2) Accounting standards and financial reporting standards which are not effective for the current year as follows :

61


62

Effective date

TAS 1 Presentation of Financial Statements (revised 2009) TAS 2 Inventories (revised 2009) TAS 7 Statement of Cash Flows (revised 2009) TAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (revised 2009) TAS 10 Events after the Reporting Period (revised 2009) TAS 11 Construction Contracts (revised 2009) TAS 12 Income Taxes TAS 16 Property, Plant and Equipment (revised 2009) TAS 17 Leases (revised 2009) TAS 18 Revenue (revised 2009) TAS 19 Employee Benefits TAS 20 Accounting for Government Grants and Disclosure of Government Assistance (revised 2009) TAS 21 The Effects of Changes in Foreign Exchange Rates (revised 2009) TAS 23 Borrowing Costs (revised 2009) TAS 24 Related Party Disclosures (revised 2009) TAS 26 Accounting and Reporting by Retirement Benefit Plans TAS 27 Consolidated and Separate Financial Statements (revised 2009) TAS 28 Investments in Associates (revised 2009) TAS 29 Financial Reporting in Hyperinflationary Economies TAS 31 Interests in Joint Ventures (revised 2009) TAS 33 Earnings per Share (revised 2009) TAS 34 Interim Financial Reporting (revised 2009) TAS 36 Impairment of Assets (revised 2009) TAS 37 Provisions, Contingent Liabilities and Contingent Assets (revised 2009) TAS 38 Intangible Assets (revised 2009) TAS 40 Investment Property (revised 2009) TFRS 2 Share - based Payment TFRS 3 Business Combinations (revised 2009) TFRS 5 Non - current Assets Held for Sale and Discontinued Operations (revised 2009) TFRS 6 Exploration for and Evaluation of Mineral Resources TFRI 15 Agreements for the Construction of Real Estate

January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2013 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2013 January 1, 2013 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011

The management of the Company has considered that TAS 11 (revised 2009), TAS 20 (revised 2009), TAS 26, TAS 27 (revised 2009), TAS 28 (revised 2009), TAS 29, TAS 31 (revised 2009), TAS 40 (revised 2009), TFRS 2, TFRS 3 (revised 2009), TFRS 5 (revised 2009), TFRS 6 and TFRI 15 are not relevant to the Company’s business. The Company will apply the related accounting standards and financial reporting standards on the effective date which the management considers that those standards do not have material effect on the financial statements. This excludes TAS 12 for which the management is still considering the effect to the financial statements for the year in which it is initially applied. However, the management of the Company has assessed the effect relating to the adoption of TAS 19 on the financial statements for the year in which it is initially applied and elected the alternative method under the said accounting standard by adjust the effect directly to the beginning retained earnings balance of year 2011 as follows :


Balance sheet as of December 31, 2011 Increase in estimated liabilities for post - retirement benefits Decrease in beginning balance of unappropriated retained earnings Statement of income for the year ended December 31, 2011 Increase in expenses due to employee benefits : - Selling expenses - Administrative expenses - Management benefits expenses Decrease in basic earnings per share

BAHT 7,526,689.00 6,107,877.00 483,846.00 361,845.00 573,121.00 0.0044

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Revenues recognition The Company recognizes revenue from sale when goods are delivered and the risk and reward of goods ownership are transferred to customers. 2.2 Cash and cash equivalents Cash and cash equivalents are comprised of cash on hand and deposits at banks. 2.3 Current investment Investment in securities held for trading are shown at fair value. Gains or losses arising from changes in the carrying amount of securities are included in the statements of income. If the Company disposes of part of its holding of a particular investment, the deemed cost of the part sold is determined using the weighted average method. 2.4 Inventories Finished goods are stated at the lower of cost (moving average method) or net realizable value. Raw materials are stated at the lower of cost (First-in, First-out) or net realizable value. 2.5 Property, plant and equipment Property are stated at cost. Other fixed assets are stated at cost net of accumulated depreciation. Depreciation is calculated on the straight-line method over the estimate of useful lives as follows: Note YEARS Building and building improvement 20 Period of land and construction lease agreement (20) Furniture, fixture and office equipment 5 Vehicles 5 2.6 Intangible assets Intangible assets are stated at cost net of accumulated amortization. Amortization is calculated on the straight - line method over a period as follow : YEARS Trademark 10 Computer software 5

63


2.7 Leasehold right - shop area Leasehold right - shop area are amortized by the straight-line method over the existing agreement term of 6 - 29 years. 2.8 Financial Leases The Company records vehicle under financial leases, as assets and liabilities in the balance sheets at amount equal to the fair value of the leased property at the inception of the lease or, if lower, at the present value of the minimum lease payments. In calculating the present value of the minimum lease payments, the discount factor used is the interest rate implicit in the lease. The interest charge is recorded to periods during the lease term based on the remaining balance of the liability for each period. 2.9 Borrowing costs Borrowing costs are recognized as expenses in the period when incurred except the borrowing costs that are directly attributable to the acquisition, construction or production of asset as part of the cost of that assets. The capitalization of borrowing costs are ceased when substantially all the activities necessary to prepare the asset for its intended use or sale are complete. The Company shall suspend capitalization of borrowing costs during extended periods in which it suspends active development of asset. If the capitalized carrying amount of the asset exceeds its recoverable amount, a impairment loss is recorded. The interest capitalized for the year amounted to Baht 734,514.58 in year 2010. 2.10 Foreign currency transaction Transactions in foreign currencies are converted at the exchange rate of the transaction date. Assets and liabilities in foreign currencies at the end of year are converted at average bank buying and selling rate at the date respectively. Gains or losses from the translations are included in determining earnings. 2.11 Financial instruments Financial instruments on the balance sheets include cash and deposits at banks, current investment, trade account receivables and payables, loan, accrued expenses, account payables - fixed assets, accrued trade mark fee and finance lease obligations. The particular recognition methods adopted are disclosed in the individual policy statements associated with each items. 2.12 Treasury stocks Treasury stocks are stated at cost and presented as a deduction from shareholders’ equity. Gains on disposal of treasury stocks are determined by reference to the carrying amount and are presented as premium on treasury stocks. Losses on disposal of treasury stocks are determined by reference to the carrying amount and are presented as a deduction from premium on treasury stocks, with any remaining amount charged to retained earnings. 2.13 Accounting judgments and estimates The preparation of financial statements in conformity with generally accepted accounting principles at times requires management to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgments and estimates affect reported amounts and disclosures and actual results could differ. 2.14 Employee benefits Salaries, wages, bonuses, contributions to the social security fund and provident fund and other benefits are recognized as expenses when incurred. The Company does not recognize liabilities in respect of employee benefit potentially payable under the Thai Labour Law. 2.15 Management benefit expenses Management benefit expenses consist of salary, bonus and other benefits of directors and management. 2.16 Income tax expenses Income tax expenses are provided for in the accounts based on the taxable profits determined in accordance with tax legislation. Corporate income tax reduction rate Royal Decree No. 467 B.E. 2550 dated October 17, 2007 grants companies listed in the Market for Alternative Investment (MAI) under regulations of the Stock Exchange of Thailand within December 31, 2008 a reduction in the corporate income tax rate from 30% to 20% for taxable profit for the 3 consecutive accounting periods begins on or after enactment. The Company was listed in MAI on December 11, 2007 which was the day after the Royal Decree came into force and the Company has successfully complied with the rules, procedures and conditions identified therein. The Company has, accordingly, calculated income tax on its taxable profit for the years ended December 31, 2009 and 2008 at the 20% corporate income tax rate. The grant for corporate income tax reduction under the Royal Decree shall be expired in the accounting period ended December 31, 2010.

64


2.17 Basic earnings per share Basic earnings per share is determined by dividing net profit by the weighted average number of ordinary shares outstanding as follow : Note 2010 2009 Net profit (Baht) 61,974,632.49 46,490,776.91 Weighted average number of ordinary shares (share) : Number of ordinary shares 157,587,600 160,000,000 Add Number of increased ordinary share from stock dividend payment 16 98,804,290 - Number of sold treasury stocks 15 2,106,741 - Less Number of treasury stocks 15 - (2,412,400) 258,498,631 157,587,600 Basic earnings per share (Baht) 0.24 0.30

3. CURRENT INVESTMENT

Current investment : Trading securities - investment units Add Unrealized gain on change in value of securities Total current investment

BAHT 2010

2009

12,812,217.65 83,571.33 12,895,788.98

57,346,490.39 734,133.53 58,080,623.92

4. TRADE ACCOUNT RECEIVABLES

As of December 31, 2010 and 2009, trade account receivables classified by aging as follows : 2010 Not overdue 43,294,112.60 Overdue Less than 3 months - 3 months to 6 months - 6 months to 12 months - over 12 months - Total trade account receivables 43,294,112.60

BAHT 2009 33,171,988.89 - - - - 33,171,988.89

65


5. INVENTORIES - NET

Finished goods Less Provision for obsolete inventories Finished goods - net Raw materials Inventories - net

BAHT 2010 245,550,383.40 (7,320,045.78) 238,230,337.62 602,310.84 238,832,648.46

2009 190,149,279.77 (3,278,378.38) 186,870,901.39 254,435.99 187,125,337.38

The change in the provision for obsolete inventories during the year ended December 31, 2010 are as follow : Balance as of 31 December 2009 Add Increasing during the year Balance as of 31 December 2010

BAHT 3,278,378.38 4,041,667.40 7,320,045.78

6. PROPERTY, PLANT AND EQUIPMENT - NET

BAHT Building Furniture, Land under and building fixture and office construction improvement equipment Vehicles of building Total COST As of December 31, 2009 25,328,873.56 114,852,353.56 11,011,046.47 - 151,192,273.59 Increase - 31,069,125.19 22,230,400.00 50,715,469.58 104,014,994.77 Decrease - (15,293,165.26) (5,928,939.00) - (21,222,104.26) As of December 31, 2010 25,328,873.56 130,628,313.49 27,312,507.47 50,715,469.58 233,985,164.10 ACCUMULATED DEPRECIATION As of December 31, 2009 (7,716,455.32) (60,251,231.51) (9,272,435.69) - (77,240,122.52) Increase (1,714,468.71) (20,265,969.99) (4,025,333.63) - (26,005,772.33) Decrease - 14,084,249.69 5,081,245.05 - 19,165,494.74 As of December 31, 2010 (9,430,924.03) (66,432,951.81) (8,216,524.27) - (84,080,400.11) NET BOOK VALUE As of December 31, 2009 17,612,418.24 54,601,122.05 1,738,610.78 - 73,952,151.07 As of December 31, 2010 15,897,949.53 64,195,361.68 19,095,983.20 50,715,469.58 149,904,763.99 In year 2010 and 2009, the company’s management had approved to write off the retired from active use and unexisting equipment (net of accumulated depreciation) amounted to Baht 1.21 million and Baht 1.95 million respectively, which are included in determining earnings. Depreciation charge for the years amounted to Baht 26.01 million in year 2010 and Baht 22.62 million in year 2009 are included in determining earnings.

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As of December 31, 2010 and 2009, the Company has fully depreciated fixed assets but are still in use in the original cost of Baht 27.16 million and Baht 21.73 million respectively. Land and warehouse building on land lease are mortgaged to secure credit facilities of banks. As of December 31, 2010 and 2009, the Company has the assets under finance lease agreements in the original cost and its accumulated depreciation as follows : Cost of finance lease assets Less Accumulated depreciation Net book value

BAHT 2010 23,194,942.05 (4,212,595.25) 18,982,346.80

2009 6,893,481.05 (5,430,072.75) 1,463,408.30

7. INTANGIBLE ASSETS - NET

BAHT COST As of December 31, 2009 Increase As of December 31, 2010 ACCUMULATED AMORTIZATION As of December 31, 2009 Increase As of December 31, 2010 NET BOOK VALUE As of December 31, 2009 As of December 31, 2010

Trademark 17,363,700.00 - 17,363,700.00 (4,340,925.00) (1,736,370.00) (6,077,295.00) 13,022,775.00 11,286,405.00

Computer software Total 5,511,951.37 22,875,651.37 - - 5,511,951.37 22,875,651.37 (4,903,492.96) (9,244,417.96) (204,781.19) (1,941,151.19) (5,108,274.15) (11,185,569.15) 608,458.41 13,631,233.41 403,677.22 11,690,082.22

Amortization expenses for the years 2010 and 2009 amount to Baht 1.94 million and Baht 2.40 million respectively.

8. LEASEHOLD RIGHTS - SHOP AREA - NET

COST As of December 31, 2009 Increase As of December 31, 2010 ACCUMULATED AMORTIZATION As of December 31, 2009 Increase As of December 31, 2010 NET BOOK VALUE As of December 31, 2009 As of December 31, 2010

BAHT 56,505,726.00 26,576,800.00 83,082,526.00 (29,360,606.96) (5,943,381.42) (35,303,988.38) 27,145,119.04 47,778,537.62

Amortization expenses for the years 2010 and 2009 amount to Baht 5.94 million and Baht 4.07 million respectively. Leasehold rights are mortgaged to secure credit facilities of banks.

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9. FINANCE LEASE OBLIGATIONS

Finance lease obligations Less Deferred interest Less Current portion Finance lease obligations - net

BAHT 2010 18,253,009.73 (1,822,717.24) 16,430,292.49 (3,747,801.94) 12,682,490.55

2009 1,617,970.93 (69,910.16) 1,548,060.77 (1,278,639.82) 269,420.95

As at December 31, 2010 and 2009, the Company has finance lease obligations with the period of payment as follows : Payment due within 1 year Payment due over 1 year to 5 years Total

BAHT 2010 Principal Deferred interest Total 3,747,801.94 757,659.86 4,505,461.80 12,682,490.55 1,065,057.38 13,747,547.93 16,430,292.49 1,822,717.24 18,253,009.73

Payment due within 1 year Payment due over 1 year to 5 years Total

BAHT 2009 Principal Deferred interest Total 1,278,639.82 59,641.38 1,338,281.20 269,420.95 10,268.78 279,689.73 1,548,060.77 69,910.16 1,617,970.93

Under the term of lease contracts referred to above, the Company shall have the right to purchase the assets at the quoted price at the expiry date of the leases contracts and the Company shall have to comply with certain conditions and restriction as specified in the lease contracts.

10. LONG - TERM LOAN FROM RELATED PERSON

Principal Less Current portion Net

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BAHT 2009 23,500,000.00 (6,000,000.00) 17,500,000.00

Increase -

Decrease (23,500,000.00)

2010 - - -

On April 1, 2006, the Company had signed a loan agreement with a related person amounted to Baht 41.50 million, principal is repayable in monthly installments of Baht 0.50 million for 7 years commencing January 1, 2007 with interest at the rate of MOR plus 0.25% p.a. and interest is repayable in quarterly installments. In year 2010, the said loan was paid in full before the due date.


11. LONG - TERM LOANS FROM OTHERS

Loans from local banks - bearing interest at the rate of MLR p.a. and repayable in monthly installments commencing year 2003 through year 2010 - bearing interest at the rate of MLR-1% p.a. and repayable in monthly installments commencing year 2006 through year 2011 - bearing interest at the rate of MLR p.a. and repayable in monthly installments commencing year 2007 through year 2012 - bearing interest at the rate of MLR - 0.25% p.a. and repayable in monthly installments commencing year 2010 through year 2018 - bearing interest at the rate of MLR - 0.25% p.a. for the first six installments and interest at the rate of MLR p.a. for the remaining installments, repayable in monthly installments commencing year 2010 through year 2015 *- bearing interest at the rate of MLR - 0.75% p.a. and repayable in monthly installments commencing year 2011 through year 2014 Total Less Current portion Net

BAHT 2010

2009

- 1,547,769.91 3,931,011.16 18,201,284.47

1,020,228.32 4,918,421.52 6,008,088.75 -

37,990,000.00

-

27,442,000.00 89,112,065.54 (25,050,519.58) 64,061,545.96

- 11,946,738.59 (6,466,706.60) 5,480,031.99

The above loans are guaranteed by mortgage of land, warehouse building on land lease and leasehold rights. * In year 2010, the Company has signed the loan agreement with a bank for credit facility of loan amounted Baht 88.50 million, bearing interest at the rate of MLR - 0.75% p.a. The loan facility of Baht 44.25 million shall be used within year 2010, with a grace period of principal until year 2011 and repayable in monthly installments commencing year 2011 through year 2014. The remaining loan facility of Baht 44.25 million shall be used within year 2011, with a grace period of principal until year 2011 and repayable in monthly installments commencing year 2012 through year 2015. The said loans are guaranteed by mortgage of part of leasehold rights. Under the conditions of the loan agreement, the Company shall comply to maintain the ratio of total liabilities to total shareholders’ equity (Debt to Equity Ratio) as specified in the loan agreement.

12. SHARE CAPITAL

At the ordinary shareholders’ meetings held on April 27, 2009, the shareholders approved to decrease the par value of the ordinary shares from Baht 1.00 per share to Baht 0.50 per share, which accumulate a total 80,000,000 shares to become 160,000,000 shares. This was registered by the Ministry of Commerce on May 7, 2009. At the ordinary shareholders’ meetings on April 27, 2010 the shareholders approved to increase the authorized share capital from Baht 80.00 million (160,000,000 ordinary shares at Baht 0.50 each) to Baht 160.00 million (320,000,000 ordinary shares at Baht 0.50 each). This was registered by the Ministry of Commerce on May 20, 2010.

13. LEGAL RESERVE

In accordance with the provisions of the Public Limited Company Act, the Company has to set aside a minimum of 5% of its net profit of each year after deduction of deficit (if any) until the reserve reaches 10% of authorized capital. The reserve is not available for dividend distribution.

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14. TREASURY STOCK RESERVE

The Company had appropriated an amount of retained earnings for the treasury stock reserve equal to the amount paid to acquire the shares. The treasury stock reserve shall be reversed when the shares are sold.

15. TREASURY STOCKS

On November 11, 2008, a meeting of the Company’s Board of Directors approved a resolution to repurchase the Company’s shares, in order to manage excess liquidity. The details are as follows: a) The maximum budget for the share repurchase plan is Baht 32 million. b) The number of shares to be repurchased is not to exceed 16 million shares at par value of Baht 0.50 per share (change from previously 8 million shares at par value of Baht 1.00 per share due to change in par value of the ordinary share as mentioned in notes to the financial statement 12), equal to not to exceed 10% of the total issued shares. c) The period for the share repurchase is December 1, 2008 to June 1, 2009. d) The period for the resale of the treasury stocks is December 2, 2009 to June 1, 2012. Details of treasury stock are as follows: 2010 2009 Value of treasury stocks (Baht) - 5,289,970.00 Number of treasury stocks (Shares) - 2,412,400 Average cost per share (Baht) - 2.19 The percentage of number of treasury stocks to number of common stocks issued by the Company - 1.51 During year 2010, the Company sold 2,412,400 shares of treasury stocks at an average price of Baht 2.0129 per share, totaling Baht 4,856,046.00 and loss on sales of treasury stocks in the amount of Baht 433,924.00 had been deducted from retained earnings.

16. DIVIDEND PAYMENT

At the ordinary shareholders’ meetings on April 27, 2010 the shareholders approved as follows : - Pay dividend at Baht 0.10 per share totaling Baht 15.96 million. - Pay stock dividends to the existing shareholders at the ratio of 1 existing ordinary share to 1 ordinary share and the fraction less than 1 stock dividend shall be pay cash at Baht 0.50 per share totaling Baht 79.79 million (159,573,300 ordinary shares of Baht 0.50 each) The dividend and stock dividend payment were paid on May 19, 2010. At the ordinary shareholders’ meeting held on April 27, 2009, the shareholders approved the resolution to pay dividend at Baht 0.10 per share totaling 7.87 million which was paid on May 21, 2009.

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17. EXPENSES BY NATURE

The significant expenses classified by nature for the years ended December 31, 2010 and 2009 are as follows : บาท 2010 2009 Changes in inventories of finished goods (55,401,103.63) (26,772,770.67) Purchase finished goods 440,262,039.03 358,726,300.66 Raw material and consumables used 1,436,395.15 1,161,881.86 Employee benefits expenses 91,796,450.06 72,826,078.92 Depreciation and amortization expenses 33,890,304.94 29,095,193.90 Management benefit expenses 14,428,659.66 13,885,125.73

18. OPERATION , LICENSE AND SUB-LICENSE RIGHTS AGREEMENTS

On May 3, 2007, the Company has entered into the agreement with a foreign company to operate its retail and distribution business in the products in the countries as specified in the agreement under the license and sub-license rights in trademark “BODY GLOVE” and the hand device. The said agreement terms are totaling 99 years by automatically renewal for 9 successive 10 year terms with a final term of 9 years. The said agreement shall be effective commencing July 1, 2007. Under the agreement, the Company has to pay the following fees : 1) Royalty fee at the rate with the minimum fee as specified in the agreement 2) Advertising contribution at the rate specified in the agreement 3) Initial upfront fee as specified in the agreement (pay within 120 days following the date of the addendum) 4) Upfront fee as specified in the agreement (pay in quarterly installments commencing April 2009 through January 2012) However, on December 31, 2007, the Company had been informed by the said foreign Company that, the Company does not require to set up the advertising fund as specified in the agreement. Should the fund need to be set up, the Company shall be noticed 90 days in advance by the said foreign company. On January 12, 2010, the Company has entered into the agreement with a foreign related party to operate its retail and distribution business in the products in the countries as specified in the agreement under the license and sub-license rights in trademark “Peoples Market” and / or “PM”. The initial term of the agreement shall be for a period of five (5) years commencing from January 1, 2010. After the expiration of the initial term, the agreement may be renewed for up to four (4) additional four (4) year term periods. Under the agreement, the Company has to pay the following fees : 1) Royalty fee at the rate with the minimum fee as specified in the agreement 2) Advertising contribution at the rate specified in the agreement As of December 31, 2010 and 2009, the Company had recorded the accrued trademark fee for upfront fee (net of current portion) of Baht 0.76 million and Baht 4.19 million respectively.

19. PROVIDENT FUND

On June 15, 2007, the Company has joined and employee provident fund scheme with a local entity. The employee shall contributes at the rate of 2% - 3% of the gross salary and the Company contributes the same rate. The Company had contributed to the fund for the years ended December 31, 2010 and 2009, amounted to Baht 0.84 million and Baht 0.80 million respectively.

20. OPERATING LEASE AGREEMENTS

The Company has commitments under various operating lease agreements as follows : - Lease agreements on shop area and services for the period of 1 - 29 years with the expiration date range from year 2010 2024

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- Land and construction lease agreement and land lease for warehouse construction agreement with a related person for the period of 3 years commencing in May 2004 and March 2006 respectively, the said agreements shall be renewed for every 3 years with totaling rental period not exceed 20 years and the expiration date of the agreement is year 2024. Under the agreement, the ownership on warehouse building shall be transferred to the said related person when lease agreement is expired. On September 17, 2008, the said related person has signed the agreements to transfer reaping right and requirement right in the said land lease agreements to another related person without any recompense and the agreements to transfer the said rights shall be ended on April 30, 2024. Future minimum payments under the above operating leases are as follows : Lease agreements Shop area and services Land and construction Land (for warehouse construction)

PERIODS (MILLION BAHT) Later than one year and Not later than one year not later than five years 72.14 62.18 1.26 5.95 0.63 2.97

Later than five years 14.30 16.39 8.20

Rental and service expenses were Baht 87.22 million in year 2010 and Baht 72.12 million in year 2009.

21. COMMITMENTS AND CONTINGENT LIABILITIES

21.1 As of December 31, 2010, the Company has commitments and contingent liabilities as follows : - Commitment under the shop area reserve agreements (rental deposit and leasehold rights) totaling Baht 23.76 million. - Commitment under the signboard installation agreements totaling Baht 1.49 million. - Commitment under the advisor agreement for information technology & retail application development Baht 1.00 million. - Commitment under the consultant agreement for construction and the service agreements for architect and interior design of new head office and warehouse buildings totaling Baht 2.55 million. 21.2 As of December 31, 2010 and 2009, the Company has contingent liabilities to bank for letters of guarantee amounted to Baht 0.42 million guaranteed by part of deposits at banks

22. TRANSACTIONS WITH RELATED PARTIES

The transactions with related parties as of December 31, 2010 and 2009 are as follows : The outstanding balances Related party Accrued royalty fee - Twoagentsee International Limited Related person Long - term loan from related person - Mr. Nopdol Tumwattana

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BAHT 2010

2009

0.27 -

- 23.50


Transactions with related parties for the years ended December 31, 2010 and 2009 are as follows : MILLION BAHT 2010 2009 Transfer pricing policy The transactions during the years Related parties Royalty fee - Twoagentsee International Limited 0.50 - at the rate specified in the agreements Expenses - Light Spot Polypack Co., Ltd. 0.45 - not different from unrelated parties - Degree Digital Ltd. Part. 0.95 - not different from unrelated parties Related persons Interest expense - Mr. Nopdol Tumwattana 1.27 1.74 at the rate of MOR plus 0.25% p.a. Rental expenses - Mr. Nopdol Tumwattana 0.84 0.84 at the rate specified in the agreements - Ms. Dolnapa Tumwattana 1.89 1.88 at the rate specified in the agreements

23. FINANCIAL INFORMATION BY SEGMENT

The operations of the Company involve a single business segment, retail of ready to wear and are carried on in a single geographic area, Thailand. As a result, all of the revenues, operating profits and assets reflected in these financial statements pertain to the aforementioned business segment and geographic area.

24. FINANCIAL INSTRUMENTS

Foreign currency risk As of December 31, 2010 and 2009, the Company is exposed to foreign currency risk primarily to foreign currency denominated liabilities, which currently are not hedged by any derivative financial instrument as follows: Million USD 2010 2009 Foreign currency denominated liabilities Accrued expense 0.32 0.23 Accrued trademark fee 0.13 0.23

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Interest rate risk As of December 31, 2010 and 2009 the Company has financial assets and liabilities exposed to interest rate risk as follows: Financial assets Deposits at banks Financial liabilities Finance lease obligations Long - term loans from others

2010 Amount (Million Baht) Financial assets and liabilities with interest rate Average Interest Rate (%) Fixed Maturing In: 1 year over 1 to Floating or less 5 years Floating Fixed 11.29 0.45 - 0.55 - 0.65 0.50 - 2.25 - 4.51 13.75 - 3.05 - 6.10 89.11 - - 5.50 - 6.50 -

Financial assets Deposits at banks Financial liabilities Bank overdrafts Finance lease obligations Long - term loan from related person Long - term loans from others

2009 Amount (Million Baht) Financial assets and liabilities with interest rate Average Interest Rate (%) Fixed Maturing In: 1 year over 1 to Floating or less 5 years Floating Fixed 0.04 0.45 - 0.25 - 0.50 0.50 - 2.25 2.20 - - 6.875 - - 1.34 0.28 - 3.05 - 4.20 23.50 - - 6.40 - 11.95 - - 5.375 - 6.375 -

Credit risk Credit risk refers to the risk primarily deal with the trade account receivables. However, since the majority of sales are supplied to creditworthy customers, the Company does not anticipate material losses from their debt collection. In the case of recognized account receivables, the carrying amount of account receivables recorded in the balance sheet represents maximum exposure to credit risk. Fair value The managements believe that the fair value of the Company’s financial assets and liabilities does not materially differ from their carrying value.

25. RECLASSIFICATION OF ACCOUNTS

Certain accounts in financial statements as presented herein for comparative purpose have been reclassified to conform with the current year classifications, with no effect on the net profit or shareholders’ equity as previously reported.

26. APPROVAL OF FINANCIAL STATEMENTS

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The financial statements have been approved by authorized directors of the Company on February 1, 2011.


Remuneration of the Auditor During the fiscal year ending December 31st, 2010, the Company paid the remuneration to Company’s Auditor, A.M.T. & Associates, in the amount of Baht 840,155.00.- which consisted of audit fee of Baht 789,000.- and other related expenses such as traveling and miscellaneous expenses, etc of Baht 51,155.00.- In addition to the said remuneration, the Company had no other obligation to pay the Auditor, the Audit Firm of the Certified Public Accountant and individual or business relating to the Auditor or the Audit Firm of the Auditor.

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Company Profile

Name

: BGT Corporation Public Company Limited

Type of Business

: The main business lines in readymade clothing and accessories for retail industry, i.e., backpacks, shoulder bag, traveling bag, wallet, pencil case, cap, socks, etc., under the trademark of “Body Glove” and distinctively recognized “Hand Device” black on yellow background. And distribution ready-to-wear apparels under the license trademark of Peoples Market (PM) from United Kingdom. Head Office Address : No. 299/9 Moo 7 Phaholyothin Road, Anusawaree, Bangkhen, Bangkok 10220 Registration No. : 0107550000106 Website : www.bodyglove.co.th Telephone: : 66 (0) 2972-3460-9 Fax: : 66 (0) 2972-3479 st Capital as of December 31 , 2010 Authorized Capital : Baht 160,000,000 (Share Capital 320,000,000 shares, par value Baht 0.50) Paid up Capital : Baht 159,786,650 (Share Capital 319,573,300 shares, par value Baht 0.50)

References (a) (b) (c)

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Registrar Thailand Securities Depository Company Limited Capital Market Academy Building, 2nd Floor, 2/7 Moo 4 (North Park Project) Vibhavadi-Rangsit Road, Tung Song Hong, Laksi, Bangkok 10210 Telephone: 66 (0) 2596-9000 Fax: 66 (0) 2832-4994-6 Auditors Mrs.Kesree Narongdej Certified Public Accountant No. 76 or Mrs.Natsarak Sarochanunjeen Cetfified Public Accountant No. 4563 or Mr.Sumit Khopibool Cetfified Public Accountant No. 4885 A.M.T. & Associates 491/27 Silom Plaza, Silom Road, Bangrak, Bangkok 10550 Telephone: 66 (0) 2234-1676 Fax: 66 (0) 2237-2133 Legal Consultant Ms.Manunya Thitinuntawan Allen & Overy (Thailand) Company Limited 22nd Floor Sindhorn Building Tower III, 130-132, Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Thailand Telephone: 66 (0) 2263-7600 Fax: 66 (0) 2263-7699 www.allenovery.com


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