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REVIEW REPORT OF THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS TO THE BOARD OF DIRECTORS THAI WACOAL PUBLIC COMPANY LIMITED We have reviewed the consolidated balance sheet of Thai Wacoal Public Company Limited and its subsidiaries and the separate balance sheet of Thai Wacoal Public Company Limited as at March 31, 2010, and the related consolidated and separate statements of income, changes in equity and cash flows for the quarters ended March 31, 2010 and 2009. These financial statements are the responsibility of the Company’s management as to their correctness and completeness of the presentation. Our responsibility is to report on these financial statements based on our reviews. We conducted our reviews in accordance with the Standard on Auditing applicable to review engagements. This Standard requires that we plan and perform the reviews to obtain moderate assurance as to whether the financial statements are free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit in accordance with generally accepted auditing standards and, accordingly, we do not express an opinion. Based on our reviews, nothing has come to our attention that causes us to believe that such consolidated and separate financial statements identified in the first paragraph are not presented fairly, in all material respects, in accordance with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated financial statements of Thai Wacoal Public Company Limited and its subsidiaries and the separate financial statements of Thai Wacoal Public Company Limited for the year ended December 31, 2009, and expressed an unqualified opinion in our report dated February 15, 2010. The consolidated and the separate balance sheets as at December 31, 2009, presented herein for comparison, have been derived from such consolidated and separate financial statements which we have audited and reported on. We have not performed any other audit procedures subsequent to such report date.
Niti Jungnitnirundr Certified Public Accountant (Thailand) BANGKOK Registration No. 3809 May 10, 2010 DELOITTE TOUCHE TOHMATSU JAIYOS AUDIT CO., LTD.
NOTES
As at As at As at As at
March 31, December 31, March 31, December 31,
2010 2009 2010 2009
ASSETS
CURRENT ASSETS
Cash and cash equivalents 446,462 233,212 365,386 217,815
Temporary investments 4 773,980 1,154,020 574,137 916,417
Trade accounts receivable - net 5
Related parties 14 564,278 435,740 673,120 514,746
Other companies 25,682 17,298 19,598 14,081
589,960 453,038 692,718 528,827
Short-term loans to related parties 6 149,850 140,000 140,000 130,000
Other short-term loans 7 4,500 4,600 4,500 4,600
Inventories 696,269 760,885 548,170 634,165
Other current assets
Supplies 19,887 19,720 14,490 14,677
Accrued income 10,622 4,796 10,405 4,576
Others 13,660 3,884 12,243 3,589
44,169 28,400 37,138 22,842
Total Current Assets 2,705,190 2,774,155 2,362,049 2,454,666
NON-CURRENT ASSETS
Deposit at bank under obligation 8 6,181 6,380 6,181 6,380
Long-term deposits at financial institutions 85,000 85,000 85,000 85,000
Investments in subsidiaries 9 - - 122,036 122,036
Other long-term investments 10 1,821,388 1,586,128 1,806,493 1,571,408
Property, plant and equipment - net 11 772,988 785,893 648,001 656,666
Intangible assets - net 17,057 17,499 16,395 16,759
Leasehold rights - net 12,200 12,500 12,200 12,500
Other non-current assets 12 12,316 12,316 11,267 11,267
Total Non-Current Assets 2,727,130 2,505,716 2,707,573 2,482,016
TOTAL ASSETS 5,432,320 5,279,871 5,069,622 4,936,682
CONSOLIDATED SEPARATE
See notes to the interim financial statements
“Unaudited”
THAI WACOAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES
BALANCE SHEETS
AS AT MARCH 31, 2010 AND DECEMBER 31, 2009BAHT : ’000
“Unaudited”
NOTES
As at As at As at As at
March 31, December 31, March 31, December 31,
2010 2009 2010 2009
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Trade accounts payable
Related parties 14 182,072 157,842 276,189 240,870
Other companies 137,736 101,754 110,270 88,084
319,808 259,596 386,459 328,954
Other current liabilities
Accrued income tax 56,704 35,547 39,379 24,345
Accrued bonus expense 36,384 88,775 27,004 64,176
Accrued royalty fee 14 47,296 37,854 47,296 37,854
Provision for loss from goods returned 55,000 45,000 55,000 45,000
Others 34,664 35,764 23,614 23,950
230,048 242,940 192,293 195,325
Total Current Liabilities 549,856 502,536 578,752 524,279
TOTAL LIABILITIES 549,856 502,536 578,752 524,279
THAI WACOAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES
BALANCE SHEETS (CONTINUED)
AS AT MARCH 31, 2010 AND DECEMBER 31, 2009
“Unaudited” “Unaudited”
BAHT : ’000
CONSOLIDATED SEPARATE
NOTES
As at As at As at As at
March 31, December 31, March 31, December 31,
2010 2009 2010 2009
LIABILITIES AND EQUITY (CONTINUED)
EQUITY
SHARE CAPITAL
Authorized share capital
120,000,000 ordinary shares of
Baht 1.00 each 120,000 120,000 120,000 120,000
Issued and paid-up share capital
120,000,000 ordinary shares of
Baht 1.00 each, fully paid 120,000 120,000 120,000 120,000
PREMIUM ON COMMON STOCKS 297,190 297,190 297,190 297,190
UNREALIZED GAINS ON THE CHANGES
IN VALUE OF AVAILABLE-FOR-SALE
SECURITIES 10.3 588,120 549,620 586,216 547,289
RETAINED EARNINGS
Appropriated
Legal reserve 12,000 12,000 12,000 12,000
General reserve 227,941 227,941 227,941 227,941
Unappropriated 3,636,961 3,570,342 3,247,523 3,207,983
TOTAL EQUITY OF THE COMPANY 4,882,212 4,777,093 4,490,870 4,412,403
MINORITY INTEREST 252 242 - -
TOTAL EQUITY 4,882,464 4,777,335 4,490,870 4,412,403
TOTAL LIABILITIES AND EQUITY 5,432,320 5,279,871 5,069,622 4,936,682
See notes to the interim financial statements
THAI WACOAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES
BALANCE SHEETS (CONTINUED)
AS AT MARCH 31, 2010 AND DECEMBER 31, 2009BAHT : ’000
CONSOLIDATED SEPARATE
“Unaudited” “Unaudited”
NOTES2010 2009 2010 2009
Revenues from sale of goods and rendering of services 869,186 906,216 953,302 977,747
Cost of sale of goods and rendering of services (663,175) (675,955) (798,934) (793,344)Gross Profit 206,011 230,261 154,368 184,403 Other income 28,172 33,749 29,919 33,058Profit before expenses 234,183 264,010 184,287 217,461 Selling expenses (11,435) (12,370) (10,771) (12,150)Administrative expenses (121,603) (101,317) (106,134) (83,713)Management benefit expenses (12,260) (11,554) (11,708) (10,670)Other expenses (630) (4,414) (630) (4,414)Total expenses (145,928) (129,655) (129,243) (110,947) Profit before income tax expenses 88,255 134,355 55,044 106,514 Income tax 21 (21,626) (28,486) (15,504) (24,642)PROFIT FOR THE PERIOD 66,629 105,869 39,540 81,872
PROFIT ATTRIBUTABLE TOEquity holders of the parent company 66,619 105,860 - - Minority interest 10 9 - -
66,629 105,869 - -
BASIC EARNINGS OF THE COMPANY PER SHARE BAHT 0.56 0.88 0.33 0.68
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES SHARES 120,000,000 120,000,000 120,000,000 120,000,000
THAI WACOAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF INCOME
FOR THE QUARTERS ENDED MARCH 31, 2010 AND 2009
"UNAUDITED"
See notes to the interim financial statements
SEPARATE
BAHT : ’000
CONSOLIDATED
Total Total
equity of equity
the Company
Beginning balance : January 1, 2009 120,000 297,190 541,729 12,000 204,776 3,418,281 4,593,976 252 4,594,228
Decrease in unrealized gains on the changes
in value of available-for-sale securities - - (31,463) - - - (31,463) - (31,463)
Net profit - - - - - 105,860 105,860 9 105,869
Ending balance : March 31, 2009 120,000 297,190 510,266 12,000 204,776 3,524,141 4,668,373 261 4,668,634
Beginning balance : January 1, 2010 120,000 297,190 549,620 12,000 227,941 3,570,342 4,777,093 242 4,777,335
Increase in unrealized gains on the changes
in value of available-for-sale securities - - 38,500 - - - 38,500 - 38,500
Net profit - - - - - 66,619 66,619 10 66,629
Ending balance : March 31, 2010 120,000 297,190 588,120 12,000 227,941 3,636,961 4,882,212 252 4,882,464
capital
available-for-salestocks Legal reserveshare
See notes to the interim financial statements
BAHT : ’000
Unappropriated
securities
Unrealized gain on the
paid-up
Premium onIssued and
interest
General reserve
Appropriated Appropriated changes in value ofcommon
THAI WACOAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF CHANGES IN EQUITY
CONSOLIDATED
FOR THE QUARTERS ENDED MARCH 31, 2010 AND 2009
Minority
“UNAUDITED”
Retained earnings
Total
equity
Beginning balance : January 1, 2009 120,000 297,190 538,322 12,000 204,776 3,021,935 4,194,223
Decrease in unrealized gains on the changes
in value of available-for-sale securities - - (30,796) - - - (30,796)
Net profit - - - - - 81,872 81,872
Ending balance : March 31, 2009 120,000 297,190 507,526 12,000 204,776 3,103,807 4,245,299
Beginning balance : January 1, 2010 120,000 297,190 547,289 12,000 227,941 3,207,983 4,412,403
Increase in unrealized gains on the changes
in value of available-for-sale securities - - 38,927 - - - 38,927
Net profit - - - - - 39,540 39,540
Ending balance : March 31, 2010 120,000 297,190 586,216 12,000 227,941 3,247,523 4,490,870
See notes to the interim financial statements
“UNAUDITED”BAHT : ’000
stocks
Premium on
THAI WACOAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF CHANGES IN EQUITY
SEPARATE
FOR THE QUARTERS ENDED MARCH 31, 2010 AND 2009
Issued and
paid-up Unappropriated
Unrealized gain on the
available-for-sale
changes in value of
Retained earnings
General reserveLegal reserve
Appropriated Appropriated
share
capital securities
common
2010 2009 2010 2009
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax 88,255 134,355 55,044 106,514
Adjustments :
Depreciation 18,144 19,372 12,515 12,869
Amortization of intangible assets and leasehold rights 1,353 1,170 1,275 1,115
Gain on sale of property, plant and equipment (45) (355) - (261)
Unrealized loss on exchange rate 229 1,802 229 1,802
Dividend income from investment (5,722) (1,485) (5,722) (1,485)
Loss on impairment of investments 631 4,415 631 4,415
Loss from goods returned (reversal) 10,000 (12,000) 10,000 (12,000)
Loss on devaluation of inventories 12,075 11,143 12,069 10,813
Gain on sale of investments (2,925) (1,728) (2,388) (1,496)
Interest income (10,166) (15,026) (9,782) (14,267)
Income from operations before changes
in operating assets and liabilities 111,829 141,663 73,871 108,019
Operating assets (increase) decrease
Trade accounts receivable (136,922) (146,104) (163,891) (145,160)
Inventories 52,541 39,517 73,926 44,898
Refundable VAT - 753 - 753
Supplies (167) (188) 187 175
Accrued income 453 1,465 390 922
Other current assets (9,523) 36,459 (8,654) 35,179
Operating liabilities increase (decrease)
Trade accounts payable 60,212 21,492 57,505 16,543
Accrued bonus expenses (52,391) (66,171) (37,172) (47,941)
Accrued royalty fee 9,442 10,025 9,442 10,025
Other current liabilities (1,285) (186) -1,047 (1,107)
Cash received from operations 34,189 38,725 4,557 22,306
Cash received from interest 8,123 13,082 7,799 14,554
Cash paid for income tax (722) (771) (470) (548)
Net cash provided by operating activities 41,590 51,036 11,886 36,312
SEPARATECONSOLIDATED
THAI WACOAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
FOR THE QUARTERS ENDED MARCH 31, 2010 AND 2009
BAHT : ’000
“UNAUDITED”
2010 2009 2010 2009
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in current investments 380,752 186,086 342,807 186,811
Proceeds from short-term loans to related parties 150 132,420 - 132,420
Payment for short-term loans to related parties (10,000) (4,000) (10,000) (4,000)
Proceeds from short-term loans to others 100 - 100 -
Proceeds from sale of general investments 20 - - -
Payment for purchase of general investments (270) (54,427) - (54,427)
Payment for purchase of available-for-sale securities (215,133) (20,000) (215,133) (20,000)
Proceeds from sale of available-for-sale securities 20,206 - 20,206 -
Proceeds from sale of property, plant and equipment 253 1,287 - 905
Payment for purchase of property, plant and equipment (5,262) (11,741) (3,139) (8,572)
Dividends received 1,486 1,485 1,486 1,485
(Increase) decrease in other non-current assets (612) 595 (612) 885
Net cash provided by investing activities 171,690 231,705 135,715 235,507
Effect of exchange rate changes on cash and cash equivalents (30) (1,913) (30) (1,913)
Net increase in cash and cash equivalents 213,250 280,828 147,571 269,906
Cash and cash equivalents as at January 1, 233,212 207,809 217,815 167,300
Cash and cash equivalents as at March 31, 446,462 488,637 365,386 437,206
Additional information
Cash and cash equivalents
Cash in hand 326 509 167 362
Deposit at banks and financial institutions 446,136 488,128 365,219 436,844
446,462 488,637 365,386 437,206
Non-cash transactions
Increase in payable on purchase of machinery, furniture,
fixtures and office equipment 185 1,598 711 156
Increase (decrease) in unrealized gains on the changes in value of
available-for-sale securities 38,500 (31,463) 38,927 (30,796)
See notes to the interim financial statements
STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE QUARTERS ENDED MARCH 31, 2010 AND 2009
SEPARATE
THAI WACOAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES
“UNAUDITED”
BAHT : ’000
CONSOLIDATED
THAI WACOAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES NOTES TO THE INTERIM CONSOLIDATED AND THE SEPARATE FINANCIAL STATEMENTS FOR THE QUARTERS ENDED MARCH 31, 2010 AND 2009 “UNAUDITED” 1. OPERATIONS OF THE COMPANY AND SUBSIDIARIES
Thai Wacoal Public Company Limited which was registered in The Stock Exchange of Thailand and its subsidiaries are companies that registered in Thailand. The principal business of the Company and subsidiaries is to manufacture clothes which mainly are ladies’ lingerie. Locations of the Company and subsidiaries as at March 31, 2010 and 2009 are as follows:
NAME LOCATION Thai Wacoal Public Co., Ltd. 930/1 Soi Pradoo 1, Sathupradith Road, Khwang Bangkhlo, Bangkholaem District, Bangkok 10120 Direct subsidiaries
SR.W. Garment Co., Ltd. 173/2 Moo 5, Sukaphibal 8 Road Tambol Bung, Sriracha District, Chonburi 20230 Wacoal Kabinburi Co., Ltd. 121, 121/1 Moo 5, Suwannasorn Road, Tambol Nonsee, Kabinburi District, Prachinburi 25110 Wacoal Lamphun Co., Ltd. 99, 99/4 Moo 5, Liongmuang Road,
Tambol Paa-Sak, Muanglamphun District, Lamphun 51000 Indirect subsidiary
Pattaya Kabinburi Co., Ltd. 123, 123/1 Moo 5, Suwannasorn Road, Tambol Nonsee, Kabinburi District, Prachinburi 25110
The Company and subsidiaries has extensive transactions and relationships with the related companies. Accordingly, the accompanying financial statements may not necessarily be indicative of the conditions that would have existed or the results of operations that would have occurred if the Company had operated without such affiliation.
2. BASIS FOR PREPARATION OF THE INTERIM CONSOLIDATED AND THE SEPARATE
FINANCIAL STATEMENTS
2.1 These interim consolidated and the separate financial statements are prepared in accordance with Thai Accounting Standard (TAS) No. 34 (Revised 2007) “Interim Financial Statements” with the Company choosing to present condensed interim financial statements. However, some additional line items are presented in the balance sheets, statements of income, changes in equity and cash flows as presented in the annual financial statements. In addition, the interim consolidated and the separate financial statements have been prepared in accordance with the regulations of The Stock Exchange of Thailand (SET) dated January 22, 2001 regarding preparation and submission of financial statements and reports for the financial position and results of operations of listed companies B.E. 2544. The format of presentation of the financial statements is not significantly different from the Notification of the Department of Business Development dated January 30, 2009 regarding “The Brief Particulars in the Financial Statements B.E. 2552”.
- 2 -
2.2 The Federation of Accounting Professions issued the Notification of Federation of Accounting Professions No. 16/2552 dated May 21, 2009 regarding the following accounting standards that were announced in the Royal Gazette, but not yet in effect:
Thai Accounting Standard Effective date
Accounting Framework (Revised 2007) January 1, 2011 TAS 20 Accounting for Government Grants and
Disclosure of Government Assistance January 1, 2012
TAS 24 (Revised 2007) Related Party Disclosures (previously TAS 47) January 1, 2011 TAS 40 Investment Property January 1, 2011
The Company’s management has assessed the impact of these TASs when they are effective for financial periods beginning on or after the effective date, and does not expect them to have a material effect on the Company's financial statements.
2.3 The consolidated and separate balance sheets as at December 31, 2009, presented herein for
comparison, have been derived from the consolidated and separate financial statements of the Company for the year then ended which had been previously audited.
2.4 The unaudited results of operations presented in the quarters ended March 31, 2010 and 2009 are not
necessarily an indication nor anticipation of the operating results for the full years.
2.5 Certain financial information which is normally included in financial statements prepared in accordance with generally accepted accounting principles, but which is not required for interim reporting purposes, has been omitted. In addition, the interim financial statements for the quarter ended March 31, 2010 should be read in conjunction with the audited financial statements for the year ended December 31, 2009.
2.6 The consolidated financial statements incorporate the accounts of Thai Wacoal Public Company
Limited and subsidiaries by eliminating significant related parties transactions and intercompany balances, investments in and equity of the subsidiaries.
Subsidiaries are those companies which Thai Wacoal Public Company Limited holds, directly or indirectly, more than fifty percent of the issued and paid-up share capital, or those companies whose financial and operating policies are controlled by Thai Wacoal Public Company Limited.
The subsidiaries incorporated in the consolidated and separate financial statements are as follows:
March 31, December 31, 2010 2009 % of % of Ownership Ownership
Subsidiary companies Direct subsidiaries
SR.W. Garment Co., Ltd. 99.94 99.94 Wacoal Kabinburi Co., Ltd. 99.99 99.99 Wacoal Lamphun Co., Ltd. 99.99 99.99
Indirect subsidiary
(Equity held by SR.W. Garment Co., Ltd.) Pattaya Kabinburi Co., Ltd. 99.93 99.93
- 3 -
2.7 A reclassification has been made to the consolidated and separate balance sheets as at
December 31, 2009 by separately presenting deposit at bank under obligation of Baht 6.38 million in non-current assets, which was previously presented as temporary investments, to conform to the classification used in the consolidated and separate balance sheets as at March 31, 2010.
2.8 The preparation of financial statements in conformity with generally accepted accounting
principles also requires the Company’s management to exercise judgments in order to determine the accounting policies, estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Although these estimates are based on management’s reasonable consideration of current events, actual results may differ from these estimates.
3. SIGNIFICANT ACCOUNTING POLICIES
The interim financial statements have been prepared based on the basis, accounting policies and method of computation consistent with those used in the financial statements for the year ended December 31, 2009.
4. TEMPORARY INVESTMENTS
BAHT ’000 CONSOLIDATED SEPARATE March 31, December 31, March 31, December 31, 2010 2009 2010 2009
Time deposit 272,000 132,000 135,000 20,000
Investments in held-to-maturity securities due within 1 year 64,999 191,918 64,999 191,918 Short-term investments in available-for-sale securities - equity securities 184,028 370,435 121,185 244,832 Short-term investments in available-for-sale securities - debt securities 252,953 459,667 252,953 459,667 773,980 1,154,020 574,137 916,417
Additional details of investments in held-to-maturity securities due within 1 year consist of the following:
BAHT ’000 CONSOLIDATED AND SEPARATE
Cost Value Unrealized Unrealized Fair Value March 31, gross profit gross loss March 31,
2010 2010 Held-to-maturity securities
Debentures 50,000 768 - 50,768 The Bank of Thailand’s bonds 14,999 47 - 15,046
64,999 815 - 65,814
BAHT ’000 CONSOLIDATED AND SEPARATE
Cost Value Unrealized Unrealized Fair Value December 31, gross profit gross loss December 31, 2009 2009 Held-to-maturity securities
Debentures 77,158 1,092 - 78,250 The Bank of Thailand’s bonds 14,998 140 - 15,138 Bill of exchange 99,762 - - 99,762
191,918 1,232 - 193,150
- 4 -
Additional details of short-term available-for-sale securities consist of the following:
BAHT ’000
CONSOLIDATED Cost Value Unrealized Unrealized Fair Value March 31, gross profit gross loss March 31,
2010 2010 Available-for-sale securities Equity securities
- Other companies 182,737 1,291 - 184,028 Debt securities
- The Bank of Thailand’s bonds 252,940 13 - 252,953
BAHT ’000 CONSOLIDATED Cost Value Unrealized Unrealized Fair Value December 31, gross profit gross loss December 31, 2009 2009
Available-for-sale securities Equity securities
- Other companies 367,146 3,289 - 370,435 Debt securities
- The Bank of Thailand’s bonds 459,646 21 - 459,667
BAHT ’000 SEPARATE
Cost Value Unrealized Unrealized Fair Value March 31, gross profit gross loss March 31,
2010 2010 Available-for-sale securities Equity securities
- Other company 120,000 1,185 - 121,185 Debt securities
- The Bank of Thailand’s bonds 252,940 13 - 252,953
UNIT : BAHT SEPARATE
Cost Value Unrealized Unrealized Fair Value December 31, gross profit gross loss December 31,
2009 2009 Available-for-sale securities Equity securities
- Other companies 242,000 2,832 - 244,832 Debt securities
- The Bank of Thailand’s bonds 459,646 21 - 459,667
- 5 -
5. TRADE ACCOUNTS RECEIVABLE - NET
Analysis of trade accounts receivable aging are as follows:
BAHT ’000
CONSOLIDATED SEPARATE March 31, December 31, March 31, December 31, 2010 2009 2010 2009
Current 509,862 427,423 608,235 493,989 Overdue
Within 3 months 72,991 18,654 77,189 27,888 Between 3 and 6 months 1,397 1,293 1,584 1,282 Between 6 and 12 months 2,462 3,723 2,462 3,723 More than 12 months 3,426 2,123 3,426 2,123
Total trade accounts receivable 590,138 453,216 692,896 529,005 Less Allowance for doubtful accounts (178) (178) (178) (178) Trade accounts receivable - net 589,960 453,038 692,718 528,827
6. SHORT-TERM LOANS TO RELATED PARTIES
Short-term loans to related parties consist of the following: BAHT ’000
Balance Additions Settlements Balance as at as at December 31, March 31, 2009 2010
CONSOLIDATED Short-term loans to related parties
- Thai Itokin Co., Ltd. 10,000 - (150) 9,850 - SSDC (Tigertex) Co., Ltd. 50,000 - - 50,000 - Erawan Textile Co., Ltd. 80,000 10,000 - 90,000
Total 140,000 10,000 (150) 149,850 SEPARATE Short-term loans to related parties
- SSDC (Tigertex) Co., Ltd. 50,000 - - 50,000 - Erawan Textile Co., Ltd. 80,000 10,000 - 90,000
Total 130,000 10,000 - 140,000
The Company has relationship with such related parties by mutual major shareholder which has over 10% shareholding.
Short-term loans to such related parties carry interest at the rate of fixed deposit plus the rate specified by the Company and the special business tax rate. Interest rates of the Company and subsidiaries charging to the related parties are at the rates from 3.00% to 4.75% per annum for the quarter ended March 31, 2010 (Company : 3.00% to 3.25% per annum) and from 2.75% to 4.50% per annum for the year ended December 31, 2009 (Company : 2.75% to 3.25% per annum).
- 6 -
7. OTHER SHORT-TERM LOANS
As at March 31, 2010 and December 31, 2009, other short-term loans in the consolidated and the separate financial statements are promissory notes at call term, with interest rate at 5.50% per annum.
8. DEPOSIT AT BANK UNDER OBLIGATION
Deposit at bank under obligation as at March 31, 2010 and December 31, 2009 in the consolidated and the separate financial statements are time deposit with maturity term of 12 months amounting to HKD 1.5 million which the Company used as collateral for credit facility from financial institution in favor of a certain related company (Note 16).
9. INVESTMENTS IN SUBSIDIARIES
BAHT ’000 SEPARATE
Company Business Type Paid-up capital Cost method March 31, December 31, March 31, December 31, 2010 2009 2010 2009
Subsidiary companies SR.W. Garment Co., Ltd. Manufacturing clothing 20,000 20,000 22,038 22,038 Wacoal Kabinburi Co., Ltd. Manufacturing clothing 50,000 50,000 49,999 49,999 Wacoal Lamphun Co., Ltd. Manufacturing clothing 50,000 50,000 49,999 49,999
Total investments in subsidiaries 122,036 122,036
- 7 -
10. OTHER LONG-TERM INVESTMENTS
Other long-term investments consist of the following:
BAHT ’000 CONSOLIDATED SEPARATE As at As at As at As at March 31, December 31, March 31, December 31, 2010 2009 2010 2009
Available-for-sale securities Ordinary shares
- Related companies 637,183 599,776 625,558 588,076 - Other companies 290,184 287,232 290,184 287,232
Less Allowance for impairment (3,000) (3,000) (3,000) (3,000) 287,184 284,232 287,184 284,232
Debt securities 235,258 39,976 235,258 39,976 Total 1,159,625 923,984 1,148,000 912,284
General investments
Ordinary shares - Related companies 277,761 277,761 277,761 277,761 Less Allowance for impairment (37,654) (37,123) (37,654) (37,123)
240,107 240,638 240,107 240,638
- Other companies 129,676 129,426 126,406 126,406 Less Allowance for impairment (35,520) (35,420) (35,520) (35,420)
94,156 94,006 90,886 90,986 Total 334,263 334,644 330,993 331,624
Held-to-maturity securities Debentures 327,500 327,500 327,500 327,500
327,500 327,500 327,500 327,500 1,821,388 1,586,128 1,806,493 1,571,408
- 8 -
10. OTHER LONG-TERM INVESTMENTS (CONTINUED)
10.1 Details of investments in related companies (Note 14) BAHT ’000
CONSOLIDATED SEPARATE
Companies Business Type Relationship Paid-up capital % of Cost value Fair value % of Cost value Fair value
ownership Ownership
March 31, December 31, March 31, December 31, March 31, December 31, March 31, December 31, March 31, December 31, March 31, December 31, March 31, December 31,
2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009
Available-for-sale securities
Textile Prestige Manufacturing The Company’s major
Public Co., Ltd. garment shareholder has over
10% shareholding 108,000 108,000 16.91 16.91 51,365 51,365 177,158 136,065 16.91 16.91 51,365 51,365 177,158 136,065
ICC International Distributor The Company’s major
Public Co., Ltd. shareholder has over
10% shareholding 290,634 290,634 3.81 3.81 130,210 130,210 428,947 431,714 3.71 3.71 120,385 120,385 417,322 420,014
Saha Pathana Inter Holding company The major
Holding Public Co., Ltd. shareholder 494,034 494,034 0.37 0.37 25,803 25,803 31,078 31,997 0.37 0.37 25,803 25,803 31,078 31,997
Total available-for-sale securities 207,378 207,378 637,183 599,776 197,553 197,553 625,558 588,076
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10. OTHER LONG-TERM INVESTMENTS (CONTINUED)
10.1 Details of investments in related companies (Continued) (Note 14)
BAHT ’000
Companies Business Type Relationship Paid-up capital % of CONSOLIDATED SEPARATE
Ownership Carrying value* Carrying value*
March 31, December 31, March 31, December 31, March 31, December 31, March 31, December 31,
2010 2009 2010 2009 2010 2009 2010 2009
General investments
S.T.G.C. Co., Ltd. Garment research Mutual directorship 2,500 2,500 13.00 13.00 356 356 356 356
Grand Star Industry Co., Ltd. Manufacturing garment The Company’s major 20,000 20,000 17.80 17.80 3,560 3,560 3,560 3,560
shareholder has over
10% shareholding
Pattaya Manufacturing Co., Ltd. Manufacturing clothing The Company’s major 30,000 30,000 14.67 14.67 11,611 11,611 11,611 11,611
shareholder has over
10% shareholding
SSDC (Tigertex) Co., Ltd. Dying The Company’s major 270,000 270,000 18.72 18.72 58,746 58,746 58,746 58,746
shareholder has over
10% shareholding
T.U.C. Elastic Co., Ltd. Manufacturing elastic The Company’s major 160,000 160,000 10.75 10.75 10,258 10,258 10,258 10,258
shareholder has over
10% shareholding
Thai Naxis Co., Ltd. Weaving and Mutual directorship 20,000 20,000 16.46 16.46 2,866 2,866 2,866 2,866
printing labels
Wien Co., Ltd. Direct sales The Company’s major 10,000 10,000 17.90 17.90 10,772 10,772 10,772 10,772
shareholder has over
10% shareholding
Raja Uchino Co., Ltd. Lining The Company’s major 81,000 81,000 4.47 4.47 2,848 2,848 2,848 2,848
shareholder has over
10% shareholding
* Net of allowance for impairment
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10. OTHER LONG-TERM INVESTMENTS (CONTINUED)
10.1 Details of investments in related companies (Continued) BAHT ’000
Companies Business Type Relationship Paid-up capital % of CONSOLIDATED SEPARATE
Ownership Carrying value* Carrying value*
March 31, December 31, March 31, December 31, March 31, December 31, March 31, December 31,
2010 2009 2010 2009 2010 2009 2010 2009
Champ Ace Co., Ltd. Garment The Company’s major 40,000 40,000 10.00 10.00 4,000 4,000 4,000 4,000
shareholder has over
10% shareholding
Thai Monster Co., Ltd. Garment The Company’s major 20,000 20,000 5.00 5.00 1,000 1,000 1,000 1,000
shareholder has over
10% shareholding
Belle Maison (Thailand) Co., Ltd. Direct sale & internet The Company’s major 80,000 80,000 11.63 11.63 - - - -
shareholder has over
10% shareholding
Thai Asahi Kasei Spandex Co., Ltd. Manufacturer of spandex fiber The Company’s major 1,350,000 1,350,000 2.00 2.00 27,000 27,000 27,000 27,000
shareholder has over
10% shareholding
Morgan De Toi (Thailand) Co., Ltd. Distributor Brand “MORGAN” The Company’s major 25,000 25,000 12.00 12.00 3,000 3,000 3,000 3,000
shareholder has over
10% shareholding
Five Stars Plus Co., Ltd. Manufacturer of leather coats The Company’s major 50,000 50,000 17.00 17.00 - - - -
shareholder has over
10% shareholding
QB (Thailand) Co., Ltd. Barber/Beauty Salon The Company’s major 25,000 25,000 15.00 15.00 614 614 614 614
shareholder has over
10% shareholding
* Net of allowance for impairment
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10. OTHER LONG-TERM INVESTMENTS (CONTINUED)
10.1 Details of investments in related companies (Continued) BAHT ’000
Companies Business Type Relationship Paid-up capital % of CONSOLIDATED SEPARATE Ownership Carrying value* Carrying value* March 31, December 31, March 31, December 31, March 31, December 31, March 31, December 31, 2010 2009 2010 2009 2010 2009 2010 2009
International Commercial Distributor The Company’s major 8,805 8,805 18.00 18.00 - - - - Coordination (HK) shareholder has over 10% shareholding Sriracha Bsc.Bowling Co., Ltd. Bowling The Company’s major 47,000 47,000 4.26 4.26 970 1,090 970 1,090 shareholder has over 10% shareholding Mit Patana Home Shopping Co., Ltd. Direct sale & internet The Company’s major 30,000 30,000 5.67 5.67 321 432 321 432 shareholder has over 10% shareholding Indonesia Wacoal Garment The Company’s major 108,472 108,472 6.00 6.00 6,508 6,508 6,508 6,508 shareholder has over 10% shareholding Dome Composites (Thailand) Co., Ltd. Manufacturer of vehicle’s parts The Company’s major 72,500 72,500 10.34 10.34 1,900 2,200 1,900 2,200 shareholder has over 10% shareholding Waseda Education (Thailand) Co., Ltd. Institute of Japanese The Company’s major 56,000 56,000 7.14 7.14 4,000 4,000 4,000 4,000 shareholder has over 10% shareholding Thai Bunka Fashion Co., Ltd. Institute of Fashion Design Mutual directorship 25,000 25,000 8.00 8.00 530 530 530 530 Sun Color Co., Ltd. Retail The Company’s major 100,000 100,000 5.00 5.00 - - - - shareholder has over 10% shareholding Janome (Thailand) Co., Ltd. Sewing machine The Company’s major 88,000 88,000 7.73 7.73 15,394 15,394 15,394 15,394 shareholder has over 10% shareholding Erawan Textile Co., Ltd. Textile spinning and weaving The Company’s major 181,832 181,832 15.18 15.18 63,853 63,853 63,853 63,853 shareholder has over 10% shareholding Bangkok Tokyo Socks Co., Ltd. Men’s socks The Company’s major 102,300 102,300 12.22 12.22 10,000 10,000 10,000 10,000
shareholder has over 10% shareholding Total general investments 240,107 240,638 240,107 240,638
* Net of allowance for impairment
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10. OTHER LONG-TERM INVESTMENTS (CONTINUED)
10.2 Gain (loss) on sale of investments
For the quarters ended March 31, 2010 and 2009 gain (loss) on sale of investments consist of the following:
BAHT ’000
CONSOLIDATED SEPARATE 2010 2009 2010 2009
Gain (Loss) on sale of investments - Available-for-sale securities 2,925 1,728 2,388 1,496
10.3 Net unrealized gains on changes in value of available-for-sale securities
Net unrealized gains on changes in value of short-term and long-term of available-for-sale securities as at March 31, 2010 and December 31, 2009 consist of the following:
BAHT ’000
CONSOLIDATED SEPARATE March 31, December 31, March 31, December 31, 2010 2009 2010 2009
Beginning balance 549,620 541,729 547,289 538,322 Additions 38,500 7,891 38,927 8,967 Ending balance 588,120 549,620 586,216 547,289
Additional details of long-term available-for-sale securities consist of the following:
BAHT ’000
CONSOLIDATED Cost Value Unrealized Unrealized Fair Value March 31, gross profit gross loss March 31, 2010 2010 Available-for-sale securities
Equity securities - Related parties 207,378 429,805 - 637,183 - Other companies 130,344 159,450 (2,610) 287,184
Debt securities - Debentures 195,038 333 (166) 195,205 - The Bank of Thailand’s bonds 40,047 86 (80) 40,053
Total 572,807 589,674 (2,856) 1,159,625
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10. OTHER LONG-TERM INVESTMENTS (CONTINUED)
10.3 Net unrealized gains on changes in value of available-for-sale securities (Continued)
BAHT ’000
CONSOLIDATED Cost Value Unrealized Unrealized Fair Value December 31, gross profit gross loss December 31, 2009 2009 Available-for-sale securities
Equity securities - Related parties 207,378 392,398 - 599,776 - Other companies 130,344 157,229 (3,341) 284,232
Debt securities - Debentures 20,000 1 - 20,001 - The Bank of Thailand’s bonds 19,951 24 - 19,975
Total 377,673 549,652 (3,341) 923,984
BAHT ’000 SEPARATE Cost Value Unrealized Unrealized Fair Value March 31, gross profit gross loss March 31, 2010 2010 Available-for-sale securities
Equity securities - Related parties 197,553 428,005 - 625,558 - Other companies 130,344 159,450 (2,610) 287,184
Debt securities - Debentures 195,038 333 (166) 195,205 - The Bank of Thailand’s bonds 40,047 86 (80) 40,053
Total 562,982 587,874 (2,856) 1,148,000
BAHT ’000 SEPARATE Cost Value Unrealized Unrealized Fair Value December 31, gross profit gross loss December 31, 2009 2009 Available-for-sale securities
Equity securities - Related parties 197,553 390,523 - 588,076 - Other companies 130,344 157,229 (3,341) 284,232
Debt securities - Debentures 20,000 1 - 20,001 - The Bank of Thailand’s bonds 19,951 24 - 19,975
Total 367,848 547,777 (3,341) 912,284
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10.4 Maturities of held-to-maturity securities
As at March 31, 2010 and December 31, 2009, maturities of held-to-maturity securities consist of the following:
BAHT ’000 CONSOLIDATED SEPARATE
March 31, December 31, March 31, December 31, 2010 2009 2010 2009 Between 1 and 5 years 307,500 307,500 307,500 307,500 Over 5 years 20,000 20,000 20,000 20,000 Total 327,500 327,500 327,500 327,500
Additional details of held-to-maturity securities consist of the following:
BAHT ’000
CONSOLIDATED AND SEPARATE Cost Value Unrealized Unrealized Fair Value
March 31, gross profit gross loss March 31, 2010 2010 Held-to-maturity securities
Debentures 327,500 7,013 - 334,513
BAHT ’000 CONSOLIDATED AND SEPARATE
Cost Value Unrealized Unrealized Fair Value December 31, gross profit gross loss December 31, 2009 2009 Held-to-maturity securities
Debentures 327,500 3,942 (2) 331,440
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11. PROPERTY, PLANT AND EQUIPMENT - NET
BAHT ’000 CONSOLIDATED Balance as at Additions Disposals Transfer/ Balance as at December 31, Other March 31, 2009 2010
Cost Land 433,646 - - - 433,646 Land improvement 5,233 - - - 5,233 Building and structures 480,716 - - 520 481,236 Furniture, fixtures
and office equipment 450,954 956 (80) 1,324 453,154 Machinery and equipment 897,793 1,351 (321) 3,057 901,880 Vehicles 47,488 10 - - 47,498
Total property, plant and equipment 2,315,830 2,317 (401) 4,901 2,322,647
Accumulated depreciation
Land improvement (2,457) (19) - - (2,476) Building and structures (290,952) (5,033) - - (295,985) Furniture, fixtures
and office equipment (374,205) (5,661) 80 - (379,786) Machinery and equipment (834,943) (6,663) 130 - (841,476) Vehicles (39,153) (768) - - (39,921)
Total accumulated depreciation (1,541,710) (18,144) 210 - (1,559,644)
Construction in progress and machinery under installation 11,773 3,130 (17) (4,901) 9,985
Property, plant and equipment - net 785,893 772,988
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11. PROPERTY, PLANT AND EQUIPMENT - NET (CONTINUED)
BAHT ’000
CONSOLIDATED Balance as at Additions Disposals Transfer/ Balance as at December 31, Other March 31, 2008 2009
Cost Land 370,594 - - - 370,594 Land improvement 5,233 - - - 5,233 Building and structures 447,257 - - - 447,257 Furniture, fixtures
and office equipment 434,674 858 (423) 2,459 437,568 Machinery and equipment 882,846 1,067 (3,482) 1 880,432 Vehicles 44,288 3,192 - - 47,480
Total property, plant and equipment 2,184,892 5,117 (3,905) 2,460 2,188,564
Accumulated depreciation
Land improvement (2,381) (19) - - (2,400) Building and structures (271,113) (4,846) - - (275,959) Furniture, fixtures
and office equipment (354,681) (5,159) 135 - (359,705) Machinery and equipment (810,894) (8,110) 3,029 - (815,975) Vehicles (34,690) (1,238) - - (35,928)
Total accumulated depreciation (1,473,759) (19,372) 3,164 - (1,489,967)
Construction in progress and machinery under installation 4,336 8,222 (191) (2,460) 9,907
Property, plant and equipment - net 715,469 708,504
Depreciation for the quarters ended March 31,
2010 18,144 2009 19,372
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11. PROPERTY, PLANT AND EQUIPMENT - NET (CONTINUED)
BAHT ’000 SEPARATE Balance as at Additions Disposals Transfer/ Balance as at December 31, Other March 31, 2009 2010
Cost Land 397,196 - - - 397,196 Land improvement 3,784 - - - 3,784 Building and structures 323,261 - - - 323,261 Furniture, fixtures
and office equipment 300,799 755 - - 301,554 Machinery and equipment 529,526 1,081 - - 530,607 Vehicles 35,763 10 - - 35,773
Total property, plant and equipment 1,590,329 1,846 - - 1,592,175
Accumulated depreciation Land improvement (2,457) (19) - - (2,476) Building and structures (181,953) (3,184) - - (185,137) Furniture, fixtures
and office equipment (237,467) (4,290) - - (241,757) Machinery and equipment (484,123) (4,589) - - (488,712) Vehicles (30,766) (433) - - (31,199)
Total accumulated depreciation (936,766) (12,515) - - (949,281)
Construction in progress and machinery under installation 3,103 2,004 - - 5,107
Property, plant and equipment - net 656,666 648,001
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11. PROPERTY, PLANT AND EQUIPMENT - NET (CONTINUED)
BAHT ’000
SEPARATE Balance as at Additions Disposals Transfer/ Balance as at December 31, Other March 31, 2008 2009
Cost Land 334,144 - - - 334,144 Land improvement 3,784 - - - 3,784 Building and structures 289,802 - - - 289,802 Furniture, fixtures
and office equipment 288,008 150 - 1,855 290,013 Machinery and equipment 517,278 986 (3,476) - 514,788 Vehicles 32,563 3,192 - - 35,755
Total property, plant and equipment 1,465,579 4,328 (3,476) 1,855 1,468,286
Accumulated depreciation Land improvement (2,381) (19) - - (2,400) Building and structures (169,665) (2,984) - - (172,649) Furniture, fixtures
and office equipment (221,516) (3,895) - - (225,411) Machinery and equipment (470,499) (5,072) 3,023 - (472,548) Vehicles (27,670) (899) - - (28,569)
Total accumulated depreciation (891,731) (12,869) 3,023 - (901,577)
Construction in progress and machinery under installation 2,815 4,400 (191) (1,855) 5,169
Property, plant and equipment - net 576,663 571,878
Depreciation for the quarters ended March 31,
2010 12,515 2009 12,869
Cost of fixed assets which are fully depreciated and still in use of the Company and subsidiaries as at March 31, 2010 and December 31, 2009 is approximately Baht 1,184.05 million and Baht 1,157.79 million, respectively (The Company : Baht 716.08 million and Baht 706.28 million, respectively).
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12. OTHER NON-CURRENT ASSETS
Other non-current assets as at March 31, 2010 and December 31, 2009 in the consolidated and the separate financial statements mainly represent deposits for the rent of land and vehicle with related parties and other deposits.
13. BANK OVERDRAFTS AND SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS
As at March 31, 2010 and December 31, 2009, the Company and subsidiaries have unsecured credit facilities as follows:
UNIT : MILLION BAHT
CONSOLIDATED SEPARATE March 31, December 31, March 31, December 31, 2010 2009 2010 2009
Facilities for bank overdrafts and short-term loan from financial institutions 1,116.90 1,116.90 970.90 970.90
The facilities for bank overdrafts and short-term loan from such financial institutions bear interest rates of MOR per annum. As at March 31, 2010 and December 31, 2009, the Company has no outstanding balance of bank overdraft and short-term loan from financial institutions.
14. TRANSACTIONS WITH RELATED PARTIES
In the normal course of business, the Company purchases inventories from subsidiaries and related companies and purchases and sells its main raw materials with related companies. The related company has been a distributor. The financial statements reflect the effects of these transactions on the basis determined by the Company and the related parties. Significant balances with the related parties are as follows:
UNIT : MILLION BAHT Relationship CONSOLIDATED SEPARATE March 31, December 31, March 31, December 31, 2010 2009 2010 2009
Trade accounts receivable ICC International Public Co., Ltd. Mutual major shareholder 382 340 382 340 Wacoal America Subsidiary of major 54 11 54 11 shareholder company Wacoal Corporation The major shareholder company 34 11 34 11 Pattaya Manufacturing Co., Ltd. Mutual major shareholder 6 7 6 6 Wien Co., Ltd. Mutual major shareholder 60 43 60 43 SR.W. Garment Co., Ltd. Subsidiary company - - 53 38 Wacoal Lamphun Co., Ltd. Subsidiary company - - 16 15 Wacoal Kabinburi Co., Ltd. Subsidiary company - - 23 16 Pattaya Kabinburi Co., Ltd. Subsidiary company - - 19 12 Others 28 24 26 23
Total trade accounts receivable 564 436 673 515
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14. TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
UNIT : MILLION BAHT Relationship CONSOLIDATED SEPARATE March 31, December 31, March 31, December 31, 2010 2009 2010 2009
Short-term loans to related parties (Note 6) 150 140 140 130 Long-term investments in related companies
- Available-for-sale securities (Note 10.1) 637 600 626 588
- General investments (Note 10.1) 240 241 240 241 Trade accounts payable
Textile Prestige Public Co., Ltd. Mutual major shareholder 101 85 73 67 Wacoal Corporation The major shareholder company 9 20 9 20 SR.W. Garment Co., Ltd. Subsidiary company - - 61 47 Wacoal Lamphun Co., Ltd Subsidiary company - - 23 26 Wacoal Kabinburi Co., Ltd. Subsidiary company - - 24 22 Pattaya Kabinburi Co., Ltd. Subsidiary company - - 29 15 Grand Star Industry Co., Ltd. Mutual major shareholder 43 28 31 20 Thai Takeda Lace Co., Ltd. Mutual major shareholder 8 8 7 7 Others 21 17 19 17
Total trade accounts payable 182 158 276 241 Accrued royalty fee Wacoal Corporation The major shareholder company 47 38 47 38
Significant transactions with the related companies for the quarters ended March 31, 2010 and 2009 are as follows:
UNIT : MILLION BAHT Relationship CONSOLIDATED SEPARATE 2010 2009 2010 2009 Sale of raw materials and finished products
ICC International Public Co., Ltd. Mutual major shareholder 507 556 507 556 Wacoal America Subsidiary of major 99 70 99 70 shareholder company Wacoal Corporation The major shareholder company 137 165 137 165 Pattaya Manufacturing Co., Ltd. Mutual major shareholder 6 6 6 6 Wien Co., Ltd. Mutual major shareholder 54 46 54 46 SR.W. Garment Co., Ltd. Subsidiary company - - 46 35 Wacoal Lamphun Co., Ltd. Subsidiary company - - 14 7 Wacoal Kabinburi Co., Ltd. Subsidiary company - - 21 26 Pattaya Kabinburi Co., Ltd. Subsidiary company - - 17 15 Others 26 26 26 26
Total sale of raw materials and finished products 829 869 927 952
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UNIT : MILLION BAHT Relationship CONSOLIDATED SEPARATE 2010 2009 2010 2009
Purchase of raw materials and finished products
Textile Prestige Public Co., Ltd. Mutual major shareholder 78 76 55 44 Wacoal Corporation The major shareholder company 33 41 33 41 Wacoal International Hongkong Mutual major shareholder 22 46 22 46 SR.W. Garment Co., Ltd. Subsidiary company - - 118 118 Wacoal Lamphun Co., Ltd Subsidiary company - - 45 54 Wacoal Kabinburi Co., Ltd. Subsidiary company - - 48 58 Pattaya Kabinburi Co., Ltd. Subsidiary company - - 59 59 Grand Star Industry Co., Ltd. Mutual major shareholder 46 41 32 24 Thai Takeda Lace Co., Ltd. Mutual major shareholder 10 12 7 7 Others 10 14 9 11
Total purchase of raw materials and finished products 199 230 428 462
Hire of work income & rental income
Pattaya Manufacturing Co., Ltd Mutual major shareholder 1 1 1 1 Thaigunze Co., Ltd. Mutual major shareholder 3 4 - - Others 4 4 4 4
Total hire of work income & rental income 8 9 5 5
Wage hire of work & rental expense Pattaya Manufacturing Co., Ltd Mutual major shareholder 7 7 7 7 Others 4 - 5 1
Total wage hire of work & rental income 11 7 12 8
Royalty fee Wacoal Corporation The major shareholder company 10 10 10 10
Interest income Erawan Textile Co., Ltd Mutual major shareholder 1 4 1 4
The Company and subsidiaries sell finished products to related companies at the price and conditions as charging to other customers. The Company sells raw materials to subsidiaries and related companies at cost plus margin as determined. The Company purchases raw materials and finished products from related companies at the price and conditions as being charged by other suppliers.
The Company pays royalties based on percentage of sales (Note 15). The Company pays other services in accordance with conditions in the agreement.
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15. TECHNOLOGY LICENSE AGREEMENT
On January 1, 1999, the Company entered into a technology license agreement with Wacoal Corporation, the major shareholder company, for the latter to grant the use of trademark and provide technical know-how for manufacturing the products set forth on the agreement. The Company has to pay royalty fee of 2% of net sales for such products. The agreement has been effective for a period of 5 years as from January 1, 2004 until December 31, 2008, renewable for 5 years. In 2009, the Company renewed such agreement until December 31, 2013.
16. CONTINGENT LIABILITIES AND COMMITMENTS
Contingent liabilities and commitments are as follows:
UNIT : MILLION BAHT CONSOLIDATED SEPARATE
As at As at As at As at March 31, December 31, March 31, December 31, 2010 2009 2010 2009
Contingent liabilities in respect of guarantees issued on behalf of
- Related company (Note 8) 6.18 6.38 6.18 6.38 - Other companies 3.00 3.00 3.00 3.00
Bank’s letters of guarantee issued on behalf of the Company 21.04 21.70 19.03 19.70
17. BUSINESS SEGMENT INFORMATION
Business segment information of the Company and subsidiaries for the quarters ended March 31, by geographic are as follows:
Unit : Million Baht
CONSOLIDATED Domestic sales Export sales Total
2010 2009 2010 2009 2010 2009 Revenues from sale of goods
and rendering of services 618.64 654.36 250.55 251.85 869.19 906.21 Segment result 64.99 91.90 (4.27) 13.12 60.72 105.02 Unallocated expenses (0.63) (4.41) Other income 28.17 33.75 Income tax (21.63) (28.49) Net profit of minority interest (0.01) (0.01) Net profit 66.62 105.86
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Unit : Million Baht SEPARATE Domestic sales Export sales Total 2010 2009 2010 2009 2010 2009
Revenues from sale of goods and rendering of services 702.75 725.90 250.55 251.85 953.30 977.75
Segment result 29.13 65.17 (3.38) 12.70 25.75 77.87 Unallocated expenses (0.63) (4.42) Other income 29.92 33.06 Income tax (15.50) (24.64) Net profit 39.54 81.87
The Company is unable to allocate fixed assets into each segment due to joint-production of the products.
18. PROMOTIONAL PRIVILEGES
Subsidiary companies have been granted promotional privileges from the Board of Investment as the following summary:
Items Company name Wacoal Lamphun Wacoal Kabinburi Pattaya Kabinburi
- Certificate Number 1075/2544 1074/2544 1649 (1)/2544 - Issued Date January 24, 2001 January 24, 2001 October 11, 2001 - Exemption from
income tax for 8 years Jul 1, 2001 - Jun 30, 2009 Jun 1, 2001 - May 31, 2009 Jan 1, 2003 - Dec 31, 2010 - Income tax reduction of
50% of normal rate for 5 years Jul 1, 2009 - Jun 30, 2014 Jun 1, 2009 - May 31, 2014 Jan 1, 2011 - Dec 31, 2015
- Exemption from import duties for machineries Jan 24, 2001 - Jan 24, 2003 Jan 24, 2001 - Jan 24, 2003 Oct 24, 2001 - Oct 11, 2004
The above three subsidiaries thus have to comply with the terms and conditions as stipulated in the promotional certificates.
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19. RISK MANAGEMENT POLICIES FOR ASSETS AND LIABILITIES IN FOREIGN CURRENCIES
The Company and subsidiaries have adopted a policy to cover foreign exchange exposure of assets and liabilities in foreign currencies whereby the Company and subsidiaries will deposit money received from sales in foreign currencies into banks for payment of expenses and creditors in foreign currencies.
Significant assets and liabilities of the Company and subsidiaries in foreign currencies are as follows:
BAHT ’000 Term of CONSOLIDATED AND SEPARATE
Description Receipt/ AMOUNT Payment Days USD YEN HKD EURO CNY LKR THB
As at March 31, 2010 Cash and cash equivalent - 9 1,455 - - - 5 803 Temporary investments - - - 1,500 - - - 6,181 Trade accounts receivable 30 - 120 2,256 65,054 3,372 - - - 108,685 2,265 66,509 4,872 - - 5 115,669 Trade accounts payable 30 233 41,632 78 - - - 22,875 As at December 31, 2009 Cash and cash equivalent - 10 1,818 1 1 14 5 1,072 Temporary investments - - - 1,500 - - - 6,380 Trade accounts receivable 30 - 120 483 20,993 3,281 - - - 37,481 493 22,811 4,782 1 14 5 44,933 Trade accounts payable 30 470 68,555 37 25 - - 42,178
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20. SUBSEQUENT EVENTS
The Company and its subsidiaries’ shareholders meetings approved dividend payment and set aside general reserve as follows:
2010 2009 Companies Date of Baht Total General Date of Baht Total General
shareholders’ per share amount Reserve shareholders’ per share amount reserve Meeting (Million (Million meeting (Million (Million Baht) Baht) Baht) Baht) Thai Wacoal Public Company Limited April 26 1.50 180.00 19.46 April 27 1.50 180.00 23.17 SR.W. Garment Co., Ltd. April 29 400.00 80.00 2.87 April 23 400.00 80.00 3.04 Wacoal Kabinburi Co., Ltd. April 29 78.00 39.00 1.80 April 23 78.00 39.00 2.05 Wacoal Lamphun Co., Ltd. April 29 65.00 32.50 1.47 April 23 70.00 35.00 1.83 Pattaya Kabinburi Co., Ltd. April 29 200.00 40.00 1.92 April 23 190.00 38.00 1.79
Dividends in the year 2010 are the appropriation of net profit for the year 2009, and will be paid in May 2010. The Company and its subsidiaries have appropriated a portion of retained earnings for the general reserve for their business activities in the future. The exact objectives of such reserves have not been specifically identified.
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21. CORPORATE INCOME TAX
According to the Royal Decree No. 475 B.E. 2551 issued under the Revenue Code regarding the corporate income tax rate deduction effective on August 7, 2008, the corporate income tax for listed companies in the Stock Exchange of Thailand has been reduced from 30% to 25% of net profit which does not exceed Baht 300 million. This will remain in effect for three consecutive accounting periods beginning on or after January 1, 2008. Therefore, the Company has used a tax rate of 25% for the corporate income tax calculation for the quarters ended March 31, 2010 and 2009 to conform to such tax rate change.
22. APPROVAL OF FINANCIAL STATEMENTS
These interim financial statements have been approved for issue by the audit committee on May 10, 2010.