REVIEW REPORT OF THE INDEPENDENT CERTIFIED PUBLIC …corporate.wacoal.co.th/.../2552_wacoal_q109_e.pdf · As at As at As at As at March 31, December 31, March 31, December 31, 2009

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, 2009, and the related consolidated and separate statements of income, changes in equity and cash flows for the quarters ended March 31, 2009 and 2008. 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, 2008, and expressed an unqualified opinion in our report dated February 17, 2009. The consolidated and the separate balance sheets as at December 31, 2008, 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 11, 2009 DELOITTE TOUCHE TOHMATSU JAIYOS AUDIT CO., LTD.

As at As at As at As atMarch 31, December 31, March 31, December 31,

2009 2008 2009 2008 ASSETS

CURRENT ASSETSCash and cash equivalents 488,637 207,809 437,206 167,300Current investments (Note 4) 963,262 1,148,411 755,116 941,381Trade accounts receivable (Note 5)

Related parties (Note 13) 630,955 492,060 724,564 585,702Other companies 17,558 10,349 11,598 5,300

648,513 502,409 736,162 591,002Short-term loans to related parties (Note 6) 195,730 324,150 185,730 314,150Other short-term loans (Note 7) 35,000 35,000 5,000 5,000Inventories 772,894 823,554 615,405 671,116Other current assets

Refundable VAT - 753 - 753 Supplies 20,839 20,651 14,955 15,130Accrued income 7,591 7,288 7,415 6,394Advance payment for investment - 42,548 - 42,548Others 11,771 5,283 9,761 4,622

40,201 76,523 32,131 69,447Total Current Assets 3,144,237 3,117,856 2,766,750 2,759,396

NON-CURRENT ASSETSLong-term deposits at financial institutions 50,000 50,000 50,000 50,000Investments in subsidiaries (Note 8) - - 122,036 122,036Other long-term investments (Note 9) 1,285,607 1,246,154 1,270,512 1,230,234Property, plant and equipment - net (Note 10) 708,504 715,469 571,878 576,663Intangible assets - net 16,638 17,493 16,226 17,026Leasehold rights - net 13,418 13,719 13,418 13,719Other non-current assets (Note 11) 12,085 12,696 11,036 11,936

Total Non-Current Assets 2,086,252 2,055,531 2,055,106 2,021,614TOTAL ASSETS 5,230,489 5,173,387 4,821,856 4,781,010

THAI WACOAL PUBLIC COMPANY LIMITED AND SUBSIDIARIESBALANCE SHEETS

AS AT MARCH 31, 2009 AND DECEMBER 31, 2008BAHT : ’000

CONSOLIDATED SEPARATE

See notes to the interim financial statements

“Unaudited” “Unaudited”


2009 2008 2009 2008LIABILITIES AND EQUITY

CURRENT LIABILITIESTrade accounts payable

Related parties (Note 13) 176,432 188,574 267,828 271,034Other companies 138,490 104,856 101,767 82,018

314,922 293,430 369,595 353,052Other current liabilities

Accrued income tax 78,688 50,750 63,343 39,249Accrued bonus expense 39,561 105,732 29,324 77,265Accrued royalty fee (Note 13) 49,439 39,414 49,439 39,414Provision for loss from goods returned 40,000 52,000 40,000 52,000Others 39,245 37,833 24,856 25,807

246,933 285,729 206,962 233,735Total Current Liabilities 561,855 579,159 576,557 586,787

TOTAL LIABILITIES 561,855 579,159 576,557 586,787

THAI WACOAL PUBLIC COMPANY LIMITED AND SUBSIDIARIESBALANCE SHEETS (CONTINUED)

AS AT MARCH 31, 2009 AND DECEMBER 31, 2008

“Unaudited” “Unaudited”

BAHT : ’000CONSOLIDATED SEPARATE


2009 2008 2009 2008LIABILITIES AND EQUITY (CONTINUED)

EQUITYSHARE CAPITAL

Authorized share capital120,000,000 ordinary shares of

Baht 1.00 each 120,000 120,000 120,000 120,000Issued and paid-up share capital

120,000,000 ordinary shares ofBaht 1.00 each, fully paid 120,000 120,000 120,000 120,000

PREMIUM ON COMMON STOCKS 297,190 297,190 297,190 297,190RETAINED EARNINGS

AppropriatedLegal reserve 12,000 12,000 12,000 12,000General reserve 204,776 204,776 204,776 204,776

Unappropriated 3,524,141 3,418,281 3,103,807 3,021,935

UNREALIZED GAINS ON THE CHANGES IN VALUE OF AVAILABLE-FOR-SALE SECURITIES (Note 9.3) 510,266 541,729 507,526 538,322

TOTAL EQUITY OF THE COMPANY 4,668,373 4,593,976 4,245,299 4,194,223MINORITY INTEREST 261 252 - - TOTAL EQUITY 4,668,634 4,594,228 4,245,299 4,194,223TOTAL LIABILITIES AND EQUITY 5,230,489 5,173,387 4,821,856 4,781,010


THAI WACOAL PUBLIC COMPANY LIMITED AND SUBSIDIARIESBALANCE SHEETS (CONTINUED)

AS AT MARCH 31, 2009 AND DECEMBER 31, 2008BAHT : ’000

CONSOLIDATED SEPARATE“Unaudited” “Unaudited”

2009 2008 2009 2008

906,216 871,487 977,747 957,431 Cost of sale of goods and rendering of services (675,955) (651,776) (793,344) (786,491) Gross Profit 230,261 219,711 184,403 170,940 Other income 33,749 50,697 33,058 50,425 Profit before expenses 264,010 270,408 217,461 221,365 Selling expenses (12,370) (11,482) (12,150) (11,352) Administrative expenses (101,317) (112,002) (83,713) (95,194) Management benefit expenses (11,554) (10,580) (10,670) (9,719) Other expenses (4,414) (7,130) (4,414) (7,130) Total expenses (129,655) (141,194) (110,947) (123,395) Profit before income tax 134,355 129,214 106,514 97,970 Income tax (Note 20) (28,486) (34,015) (24,642) (28,390) NET PROFIT FOR THE PERIOD 105,869 95,199 81,872 69,580

PROFIT ATTRIBUTABLE TOEquity holders of the parent company 105,860 95,190 - - Minority interest 9 9 - -

105,869 95,199 - -

BASIC EARNINGS OF THE COMPANY PER SHARE BAHT 0.88 0.79 0.68 0.58

WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES SHARES 120,000,000 120,000,000 120,000,000 120,000,000

BAHT : ’000CONSOLIDATED

THAI WACOAL PUBLIC COMPANY LIMITED AND SUBSIDIARIESSTATEMENTS OF INCOME

FOR THE QUARTERS ENDED MARCH 31, 2009 AND 2008"UNAUDITED"


SEPARATE

Revenues from sale of goods and rendering of services

TotalTotal

retained earnings

Beginning balance : January 1, 2008 120,000 297,190 12,000 185,763 3,150,814 600,955 4,366,722 261 4,366,983Decrease during the period - - - - - (60,285) (60,285) - (60,285)Net profit - - - - 95,190 - 95,190 9 95,199Ending balance : March 31, 2008 120,000 297,190 12,000 185,763 3,246,004 540,670 4,401,627 270 4,401,897

Beginning balance : January 1, 2009 120,000 297,190 12,000 204,776 3,418,281 541,729 4,593,976 252 4,594,228Decrease during the period - - - - - (31,463) (31,463) - (31,463)Net profit - - - - 105,860 - 105,860 9 105,869Ending balance : March 31, 2009 120,000 297,190 12,000 204,776 3,524,141 510,266 4,668,373 261 4,668,634

changes in value of

capital available-for-salestocksshare

paid-up retained earnings

“UNAUDITED”

Minority Premium on

Equity of the CompanyIssued and Appropriated Appropriated

THAI WACOAL PUBLIC COMPANY LIMITED AND SUBSIDIARIESSTATEMENTS OF CHANGES IN EQUITY

CONSOLIDATEDFOR THE QUARTERS ENDED MARCH 31, 2009 AND 2008


BAHT : ’000

Unappropriated

securities

retained earningsgeneral reserve

Unrealized gain on the

legal reserve

interestcommon

Total

Beginning balance : January 1, 2008 120,000 297,190 12,000 185,763 2,733,641 597,790 3,946,384Decrease during the period - - - - - (61,541) (61,541)Net profit - - - - 69,580 - 69,580Ending balance : March 31, 2008 120,000 297,190 12,000 185,763 2,803,221 536,249 3,954,423

Beginning balance : January 1, 2009 120,000 297,190 12,000 204,776 3,021,935 538,322 4,194,223Decrease during the period - - - - - (30,796) (30,796)Net profit - - - - 81,872 - 81,872Ending balance : March 31, 2009 120,000 297,190 12,000 204,776 3,103,807 507,526 4,245,299


capital

Premium oncommon

“UNAUDITED”

retained earningsIssued and

paid-upstocksshare

BAHT : ’000

THAI WACOAL PUBLIC COMPANY LIMITED AND SUBSIDIARIESSTATEMENTS OF CHANGES IN EQUITY

SEPARATEFOR THE QUARTERS ENDED MARCH 31, 2009 AND 2008

securities

retained earningsUnrealized gain on theUnappropriated

changes in value ofAppropriated Appropriated

retained earnings available-for-salelegal reserve general reserve

2009 2008 2009 2008CASH FLOWS FROM OPERATING ACTIVITIESProfit before income tax 134,355 129,214 106,514 97,970Adjustments :

Depreciation 19,372 22,091 12,869 12,989Amortization of other assets 1,170 999 1,115 945Gain on sale of property, plant and equipment (355) (369) (261) (258)Loss on exchange rate 1,802 370 1,802 370Dividend income from general investment (1,485) (19,160) (1,485) (19,160)Provision for impairment of general investment 4,415 7,130 4,415 7,130Allowance for loss from goods returned (reversal) (12,000) 4,000 (12,000) 4,000Loss on devaluation of inventories 11,143 15,541 10,813 15,526Gain on sale of investments (1,728) (1,588) (1,496) (1,464)

Income from operations before changes in operating assets and liabilities 156,689 158,228 122,286 118,048Operating assets (increase) decrease

Trade accounts receivable (146,104) (57,355) (145,160) (74,741)Inventories 39,517 3,233 44,898 12,855Refundable VAT 753 (585) 753 (585)Supplies (188) (491) 175 (35)Others current assets 35,980 (13,728) 36,388 (12,160)

Operating liabilities increase (decrease)Trade accounts payable 21,492 37,167 16,543 71,083Accrued bonus expenses (66,171) (44,293) (47,941) (32,121)Accrued royalty fee 10,025 9,899 10,025 9,899Other current liabilities (186) (908) (1,107) (3,130)Cash received from operations 51,807 91,167 36,860 89,113Cash paid for income tax (771) (725) (548) (468)

Net cash provided by operating activities 51,036 90,442 36,312 88,645

SEPARATECONSOLIDATED

THAI WACOAL PUBLIC COMPANY LIMITED AND SUBSIDIARIESSTATEMENTS OF CASH FLOWS

FOR THE QUARTERS ENDED MARCH 31, 2009 AND 2008

BAHT : ’000“UNAUDITED”

2009 2008 2009 2008CASH FLOWS FROM INVESTING ACTIVITIES

(Increase) decrease in current investments 186,086 (211,676) 186,811 (195,176)Proceeds from short-term loans to related parties 132,420 5,000 132,420 5,000Payment for short-term loans to related parties (4,000) (5,000) (4,000) (5,000)Payment for purchase of available-for-sale securities - (4,011) - (4,011)Payment for purchase of general investments (54,427) - (54,427) - Payment for purchase of held-to-maturity securities (20,000) - (20,000) - Proceeds from sale of property, plant and equipment 1,287 903 905 786Payment for purchase of property, plant and equipment (11,741) (5,676) (8,572) (2,588)Dividends received 1,485 4,350 1,485 4,350(Increase) decrease in other non-current assets 595 (1,850) 885 (1,850)

Net cash provided by (used in) investing activities 231,705 (217,960) 235,507 (198,489)

Effect of exchange rate changes on cash and cash equivalents (1,913) 53 (1,913) 53Net increase (decrease) in cash and cash equivalents 280,828 (127,465) 269,906 (109,791)Cash and cash equivalents as at January 1, 207,809 323,851 167,300 266,251Cash and cash equivalents as at March 31, 488,637 196,386 437,206 156,460

Additional informationCash and cash equivalents

Cash in hand 509 325 362 217Deposit at banks and financial institutions 488,128 196,061 436,844 156,243

488,637 196,386 437,206 156,460

Non-cash transactions Increase (decrease) in payable on purchase of machinery, furniture,

fixtures and office equipment 1,598 (579) 156 (483)

Decrease in unrealized gains on the changes in value of available-for-sale securities in equity (31,463) (60,285) (30,796) (61,541)


SEPARATE

THAI WACOAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES

“UNAUDITED”BAHT : ’000

CONSOLIDATED

STATEMENTS OF CASH FLOWS (CONTINUED)FOR THE QUARTERS ENDED MARCH 31, 2009 AND 2008

THAI WACOAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES NOTES TO THE INTERIM FINANCIAL STATEMENTS FOR THE QUARTERS ENDED MARCH 31, 2009 AND 2008 “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, 2009 and 2008 are as follows:

2. BASIS FOR PREPARATION OF THE INTERIM CONSOLIDATED AND THE SEPARATE

FINANCIAL STATEMENTS 2.1 These interim financial statements are prepared in accordance with Thai Accounting Standard

No. 41 (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 Notification of the Department of Business Development regarding “The Brief Particulars in the Financial Statements B.E. 2552” dated January 30, 2009 and 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.

…/2

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

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2.2 The consolidated and separate balance sheets as at December 31, 2008, presented herein for

comparison, has been derived from the consolidated and separate financial statements of the Company for the year then ended which had been previously audited.

2.3 The unaudited results of operations presented in the quarters ended March 31, 2009 and 2008

are not necessarily an indication nor anticipation of the operating results for the full years. 2.4 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 should be read in conjunction with the audited financial statements for the year ended December 31, 2008.

2.5 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 share capital of the subsidiaries. Subsidiaries are those companies which Thai Wacoal Public Company Limited holds, directly or indirectly, more than fifty percent of the issued 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, 2009 2008 % 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

2.6 Certain reclassifications have been made to the consolidated and separate balance sheets as at December 31, 2008, to conform to the classifications used in the financial statements for the quarter ended March 31, 2009 as follows:

- Leasehold rights - net of Baht 13.72 million has been separately presented, which was

previously included in intangible assets - net. - Short - term investment of bill of exchange of Baht 104.32 million has been presented in

current investments, which was previously included in cash and cash equivalents.

…/3

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2.7 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, 2008.

4. CURRENT INVESTMENTS

BAHT ’000

CONSOLIDATED SEPARATE March 31, December 31, March 31, December 31, 2009 2008 2009 2008

Time deposit - HKD currency (HKD 1.5 million) 6,802 6,690 6,802 6,690 - BAHT currency 372,000 368,500 282,000 274,000

Investments in held-to-maturity securities due within 1 year 466,314 609,629 466,314 609,629 Short-term investments in available-for-sale securities - equity securities 118,146 163,592 - 51,062 963,262 1,148,411 755,116 941,381

The Company has used the time deposit with maturity term of 12 months amounting to HKD 1.5 million as collateral for credit facility from financial institution in favor of a certain related company (Note 15). 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,

2009 2009 Available-for-sale securities Equity securities - Other companies 117,654 492 - 118,146

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BAHT ’000 CONSOLIDATED Cost Value Unrealized Unrealized Fair Value December 31, gross profit gross loss December 31, 2008 2008

Available-for-sale securities Equity securities

- Other companies 162,197 1,395 - 163,592

BAHT ’000 SEPARATE

Cost Value Unrealized Unrealized Fair Value December 31, gross profit gross loss December 31,

2008 2008 Available-for-sale securities Equity securities

- Other company 50,000 1,062 - 51,062 5. TRADE ACCOUNTS RECEIVABLE

Analysis of trade accounts receivable aging are as follows:

BAHT ’000


Current 568,915 456,018 653,516 530,579 Overdue

Within 3 months 73,039 39,155 76,138 53,228 Between 3 and 6 months 1,438 2,139 1,387 2,098 Between 6 and 12 months 4,943 4,919 4,943 4,919 More than 12 months 178 178 178 178

Trade accounts receivable 648,513 502,409 736,162 591,002

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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, 2008 2009

CONSOLIDATED Short-term loans to related parties

- Thai Naxis Co., Ltd. 9,000 4,000 (2,000) 11,000 - Thai Itokin Co., Ltd. 10,000 - - 10,000 - SSDC (Tigertex) Co., Ltd. 50,000 - - 50,000 - Erawan Textile Co., Ltd. 255,150 - (130,420) 124,730

Total 324,150 4,000 (132,420) 195,730 SEPARATE

Short-term loans to related parties - Thai Naxis Co., Ltd. 9,000 4,000 (2,000) 11,000 - SSDC (Tigertex) Co., Ltd. 50,000 - - 50,000 - Erawan Textile Co., Ltd. 255,150 - (130,420) 124,730

Total 314,150 4,000 (132,420) 185,730

Related party relationships are described in Notes 9 and 13.

Short-term loans to 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 related parties are at the rates from 3.25% to 4.75% per annum for the quarter ended March 31, 2009 (Company : 3.25% to 4.75% per annum) and from 3.75% to 5.50% per annum for the year ended December 31, 2008 (Company : 3.75% to 5.50% per annum).

7. OTHER SHORT-TERM LOANS As at March 31, 2009 and December 31, 2008, other short-term loans in the consolidated and the separate financial statements are promissory notes, with interest rate at 2.70% - 5.50% per annum (Company : 5.50% per annum) and 3.25% - 5.50% per annum (Company : 5.50% per annum), respectively.

8. INVESTMENTS IN SUBSIDIARIES BAHT ’000

SEPARATE Company Business Type Paid-up capital Cost method

March 31, December 31, March 31, December 31, 2009 2008 2009 2008

Subsidiary companies SR.W. Garment Co., Ltd. Manufacturing clothing 20,000 20,000 22,038 22,038 Wacoal Lamphun Co., Ltd. Manufacturing clothing 50,000 50,000 49,999 49,999 Wacoal Kabinburi Co., Ltd. Manufacturing clothing 50,000 50,000 49,999 49,999

Total investments in subsidiaries 122,036 122,036 …/6

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9. 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, 2009 2008 2009 2008

Available-for-sale securities Ordinary shares

- Related companies 621,837 653,065 609,762 640,165 - Other companies 209,120 208,454 209,120 208,454

Total 830,957 861,519 818,882 848,619 General investments

Ordinary shares - Related companies 296,757 242,330 296,757 242,330 Less Allowance for impairment (56,704) (55,534) (56,704) (55,534)

240,053 186,796 240,053 186,796

- Other companies 133,622 133,622 130,602 130,602 Less Allowance for impairment (34,020) (30,776) (34,020) (30,776)

99,602 102,846 96,582 99,826 Total 339,655 289,642 336,635 286,622

Held-to-maturity securities

Debentures 100,000 80,000 100,000 80,000 The Bank of Thailand’s bonds 14,995 14,993 14,995 14,993

114,995 94,993 114,995 94,993 1,285,607 1,246,154 1,270,512 1,230,234

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9. OTHER LONG-TERM INVESTMENTS (CONTINUED)

9.1 Details of investments in related companies 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, 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008

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 51,365 164,374 164,374 16.91 16.91 51,365 51,365 164,374 164,374

ICC International Distributor The Company’s major Public Co., Ltd. shareholder has over

10% shareholding 290,634 290,634 3.79 3.79 128,217 128,217 443,537 473,842 3.69 3.69 118,392 118,392 431,462 460,942 Saha Pathana Inter Holding company The major

Holding Public Co., Ltd. shareholder 494,034 494,034 0.17 0.17 8,257 8,257 13,926 14,849 0.17 0.17 8,257 8,257 13,926 14,849 Total available- for-sale securities

187,839 187,839 621,837 653,065 178,014 178,014 609,762 640,165

…/8

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9.1 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, 2009 2008 2009 2008 2009 2008 2009 2008

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 Printing Labels 20,000 20,000 16.46 16.46 2,866 2,866 2,866 2,866 Guangdong Xiezhong Garment Co., Ltd. Manufacturing clothing Mutual directorship 116,640 116,640 18.00 18.00 3,015 3,015 3,015 3,015 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


Raja Uchino Co., Ltd. Lining The Company’s major 81,000 81,000 4.47 4.47 2,847 2,847 2,847 2,847 shareholder has over 10% shareholding

* Net of allowance for impairment

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9.1 Details of investments in related companies (Continued) BAHT ’000 Companies Business Type Relationship Paid-up capital % of CONSOLIDATED SEPARATE


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 2,700 2,700 2,700 2,700 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 - 970 - 970


QB (Thailand) Co., Ltd. Barber/Beauty Salon The Company’s major 25,000 25,000 15.00 15.00 714 814 714 814 shareholder has over 10% shareholding

* Net of allowance for impairment …/10

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9. OTHER LONG-TERM INVESTMENTS (CONTINUED) 9.1 Details of investments in related companies (Continued)

BAHT ’000 Companies Business Type Relationship Paid-up capital % of CONSOLIDATED SEPARATE


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 1,290 1,390 1,290 1,390 shareholder has over 10% shareholding Mit Patana Home Shopping Co., Ltd. Direct sale & Internet The Company’s major 30,000 30,000 5.67 5.67 532 532 532 532 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 composit Co., Ltd. Manufacturer of vehicle’s parts The Company’s major 50,000 50,000 15.00 15.00 400 400 400 400 shareholder has over 10% shareholding Waseda Education (Thailand) Co., Ltd. Institute of Japanese The Company’s major 28,000 28,000 7.14 7.14 1,900 1,900 1,900 1,900 shareholder has over 10% shareholding Thai Bunka Fashion Co., Ltd. Institute of Fashion Design Mutual directorship 25,000 25,000 8.00 8.00 730 730 730 730 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 72,732 15.18 13.00 63,854 9,427 63,854 9,427 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 240,053 186,796 240,053 186,796

* Net of allowance for impairment …/11

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9.2 Gain (loss) on sale of investments

For the quarters ended March 31, gain (loss) on sale of investments consist of the following:

BAHT ’000

CONSOLIDATED SEPARATE 2009 2008 2009 2008

Gain (Loss) on sale of investments - Available-for-sale securities 1,728 1,588 1,496 1,464

9.3 Net unrealized gains on changes in value of available-for-sale securities

Net unrealized gains on changes in value of available-for-sale securities consist of the following:

BAHT ’000


Beginning balance 541,729 600,954 538,322 597,790 Additions (deductions) (31,463) (59,225) (30,796) (59,468) Ending balance 510,266 541,729 507,526 538,322

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, 2009 2009 Available-for-sale securities

Equity securities - Related parties 187,839 433,998 - 621,837 - Other companies 133,342 101,583 (25,805) 209,120

Total 321,181 535,581 (25,805) 830,957

…/12

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9.3 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, 2008 2008 Available-for-sale securities


Total 321,183 567,043 (26,707) 861,519

BAHT ’000 SEPARATE Cost Value Unrealized Unrealized Fair Value March 31, gross profit gross loss March 31, 2009 2009 Available-for-sale securities


Total 311,356 533,331 (25,805) 818,882

BAHT ’000 SEPARATE Cost Value Unrealized Unrealized Fair Value December 31, gross profit gross loss December 31, 2008 2008 Available-for-sale securities


Total 311,359 563,968 (26,708) 848,619

9.4 Maturities of held-to-maturity securities

As at March 31, 2009 and December 31, 2008, maturities of held-to-maturity securities consist of the following:

BAHT ’000 CONSOLIDATED SEPARATE

March 31, December 31, March 31, December 31, 2009 2008 2009 2008 Between 1 and 5 years 94,995 94,993 94,995 94,993 Over 5 years 20,000 - 20,000 - Total 114,995 94,993 114,995 94,993

…/13

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10. PROPERTY, PLANT AND EQUIPMENT - NET

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,

2009 19,372 2008 22,091

…/14

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10. 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,

2009 12,869 2008 12,989

Cost of fixed assets which are fully depreciated and still in use of the Company and subsidiaries as at March 31, 2009 and December 31, 2008 is approximately Baht 1,115.53 million and Baht 1,103.25 million, respectively (The Company : Baht 674.59 million and Baht 669.40 million, respectively).

.../15

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11. OTHER NON-CURRENT ASSETS

Other non-current assets as at March 31, 2009 and December 31, 2008 in the consolidated and the separate financial statements mainly represent deposits for the rent of land and vehicle with related parties and other deposits.

12. BANK OVERDRAFTS AND SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS

As at March 31, 2009 and December 31, 2008, the Company and subsidiaries have unsecured credit facilities as follows:

UNIT : MILLION BAHT


Facilities for bank overdrafts and short-term loan from financial institutions 1,127.90 1,127.90 970.90 970.90

The facilities for bank overdrafts and short-term loan from such financial institutions bear interest rates of MOR per annum. As at March 31, 2009 and December 31, 2008, the Company has no outstanding balance of bank overdraft.

…/16

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13. 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, 2009 2008 2009 2008

Trade accounts receivable ICC International Public Co., Ltd. Mutual major shareholder 447 366 447 366 Wacoal America Subsidiary of major 27 26 27 26 shareholder company Wacoal Corporation The major shareholder company 77 37 77 37 Pattaya Manufacturing Co., Ltd. Mutual major shareholder 8 9 7 9 Wien Co., Ltd. Mutual major shareholder 37 25 37 25 SR.W. Garment Co., Ltd. Subsidiary company - - 41 50 Wacoal Lamphun Co., Ltd. Subsidiary company - - 8 10 Wacoal Kabinburi Co., Ltd. Subsidiary company - - 30 21 Pattaya Kabinburi Co., Ltd. Subsidiary company - - 17 14 Others 35 29 34 28

Total trade accounts receivable 631 492 725 586 Trade accounts payable

Textile Prestige Public Co., Ltd. Mutual major shareholder 98 99 56 58 SR.W. Garment Co., Ltd. Subsidiary company - - 60 62 Wacoal Lamphun Co., Ltd Subsidiary company - - 28 20 Wacoal Kabinburi Co., Ltd. Subsidiary company - - 32 29 Pattaya Kabinburi Co., Ltd. Subsidiary company - - 31 23 Grand Star Industry Co., Ltd. Mutual major shareholder 33 21 19 13 Thai Takeda Lace Co., Ltd. Mutual major shareholder 7 6 4 5 Wacoal Corporation The major shareholder company 20 24 20 24 Others 18 39 18 37

Total trade accounts payable 176 189 268 271 Others

Accrued royalty fee Wacoal Corporation The major shareholder company 49 39 49 39

…/17

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13. TRANSACTIONS WITH RELATED PARTIES (CONTINUED)

Significant transactions with the related companies for the quarters ended March 31, are as follows:

BAHT ’000 Relationship CONSOLIDATED SEPARATE 2009 2008 2009 2008 Sale of raw materials to subsidiaries Subsidiary companies - - 83,577 106,030 Sale of raw materials and finished products

to related parties Mutual major shareholder 703,993 742,176 703,415 741,156 The major shareholder 164,636 77,144 164,636 77,144 Purchase of finished products from subsidiaries Subsidiary companies - - 289,071 305,663 Purchase of raw materials and finished products

from related parties Mutual major shareholder 189,042 212,529 132,693 152,835 The major shareholder 40,708 27,069 40,708 27,069

Others Hire of work income & rental income 8,679 7,567 5,072 3,984 Wage hire of work & rental expense 7,335 7,081 8,014 8,425 Royalty fee 10,421 10,371 10,421 10,371 Interest income 3,507 408 3,507 408 Dividend received - 7,643 - 7,643

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 (see Note 14). The Company pays other services in accordance with conditions in the agreement.

14. 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.

…/18

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15. 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, 2009 2008 2009 2008

Contingent liabilities in respect of guarantees issued on behalf of

- Related company (Note 4) 6.80 6.69 6.80 6.69 - Other companies 3.00 3.00 3.00 3.00

Bank’s letters of guarantee issued on behalf of the Company 23.61 22.81 21.60 20.81

16. 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 2009 2008 2009 2008 2009 2008

Revenues from sale of goods and rendering of services 654.36 640.51 251.85 230.98 906.21 871.49

Segment result 91.90 85.61 13.12 0.04 105.02 85.65 Unallocated expenses (4.41) (7.13) Other income 33.75 50.70 Income tax (28.49) (34.02) Net profit of minority interest (0.01) (0.01) Net profit 105.86 95.19

…/19

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16. BUSINESS SEGMENT INFORMATION (CONTINUED)

Unit : Million Baht SEPARATE Domestic sales Export sales Total 2009 2008 2009 2008 2009 2008

Revenues from sale of goods and rendering of services 725.90 726.45 251.85 230.98 977.75 957.43

Segment result 65.17 56.00 12.70 (1.32) 77.87 54.68 Unallocated expenses (4.42) (7.13) Other income 33.06 50.42 Income tax (24.64) (28.39) Net profit 81.87 69.58

The Company is unable to allocate fixed assets into each segment due to joint-production of the products.

17. 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 companies thus have to comply with the terms and conditions as stipulated in the promotional certificates.

…/20

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18. 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 IDR CNY LKR THB

As at March 31, 2009 Cash and cash equivalent - 10 33,130 1 2 18 3 5 12,349 Current investments - - - 1,500 - - - - 6,802 Trade accounts receivable 30 - 120 1,342 174,040 2,547 - - - - 121,266 1,352 207,170 4,048 2 18 3 5 140,417 Trade accounts payable 30 324 58,183 - 3 - - - 32,967 As at December 31, 2008 Cash and cash equivalent - 4 37,602 1 4 18 1 5 14,676 Current investments - - - 1,500 - - - - 6,690 Trade accounts receivable 30 - 120 933 84,863 2,624 - - - - 76,494 937 122,465 4,125 4 18 1 5 97,860 Trade accounts payable 30 355 92,188 45 21 - - - 49,657

…/21

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19. SUBSEQUENT EVENTS

The Company and its subsidiaries’ shareholders meetings approved dividend payment and set aside general reserve as follows:

2009 2008 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 27 1.50 180.00 23.17 April 21 1.30 156.00 19.01 SR.W. Garment Co., Ltd. April 23 400.00 80.00 3.04 April 25 400.00 80.00 2.98 Wacoal Kabinburi Co., Ltd. April 23 78.00 39.00 2.05 April 25 76.00 38.00 1.92 Wacoal Lamphun Co., Ltd. April 23 70.00 35.00 1.83 April 25 80.00 40.00 2.08 Pattaya Kabinburi Co., Ltd. April 23 190.00 38.00 1.79 April 25 180.00 36.00 1.69

Dividends in the year 2009 are the appropriation of net profit for the year 2008, and will be paid in May 2009. 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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20. 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. The corporate income tax rate for the quarter ended March 31, 2009 and 2008 is 25% and 30%, respectively.

21. APPROVAL OF FINANCIAL STATEMENTS

These interim financial statements have been approved for issue by the audit committee on May 11, 2009.

Documents

REVIEW REPORT OF THE INDEPENDENT CERTIFIED PUBLIC …corporate.wacoal.co.th/.../2552_wacoal_q109_e.pdf · As at As at As at As at March 31, December 31, March 31, December 31, 2009