rich sport public company limited (“rsp”) head office ... - set

(Translation) - Information Memorandum-

Rich Sport Public Company Limited (“RSP”)

Head Office 116/20 Na Ranong Road, Klongtoey, Bangkok 10110 Tel: 0-2249-8709 Fax: 0-2249-8711 Website: www.richsport.co.th Subsidiary’s Factory Benefit Shoes Company Limited 50 Soi Tiantalay 16, Bangkhuntian-Chaitalay Road, Samaedum, Bangkhuntian,

Bangkok 10150 Listing Date As of November 10, 2017 (Trading Commencement on November 10, 2017) Listing Securities 770 million common shares with par value of Baht 1 per share, total value of

Baht 770 million Capital As of November 10, 2017 (Trading Commencement)

Registered Capital : Common Shares Baht 770 million (770 million shares) Paid-up Capital : Common Shares Baht 770 million (770 million shares)

Secondary Market Stock Exchange of Thailand (SET) Offering Price Baht 5.80 per share for both offering to public and to the directors,

executives and employees of the Company and its subsidiary. Offering Date November 3 and 6-7, 2017 (Total number of the offered shares of 200 million shares divided into 195 million

shares offered to public and 5 million shares offered to the directors, executives and employees of the Company and its subsidiary.)

Objectives and plans for utilizing the capital increase

Objectives and plans for

Utilizing the capital increase

Approximate Amount

of Proceeds

to be used

(Million Baht)*

Estimated capital

utilizing period

1. Investment in store expansion and renovation 80.50 Within 2019

2. Used as working capital and future business expansion

1,037.95 Within 2019

Note: The capital increase in the amount of Baht 1,160 million and deduct expenses in the amount of Baht 41.55 million. The remaining proceeds is in the amount of of Baht 1,118.45 million.

Green Shoe Option -None-

Type of Business and Nature of Operation Rich Sport Public Company Limited (“the Company”) operates in the business of selling and distributing shoes (Footwear) as well as apparels and other accesories (Non-footwear) under international brands: Converse and Pony.

Revenue Structure

Type of Revenue 2014 2015 2016 Jan-Jun 2017

MB % MB % MB % MB %

Revenue from Footwear Product

657.89 80.55 907.23 80.75 1,086.63 79.66 460.93 76.68

Revenue from Non-Footwear Product

153.42

18.78

210.63

18.75

272.21

19.96

136.39

22.69

Total Sales 811.31 99.34 1,117.86 99.50 1,358.84 99.62 597.32 99.37

Other Income* 5.41 0.66 5.67 0.50 5.22 0.38 3.80 0.63

Total Revenue 816.72 100.00 1,123.53 100.00 1,364.07 100.00 601.12 100.00

Note Other Income consists of interest income and gain from exchange rate

Nature of Business Categorized by Product

Currently, the Company sells and distributes two brands of products consisting of Converse and Pony as follows:

(I) “Converse” Converse is the sneakers brand from United States with the history for over 100 years. Converse shoes with the Five-pointed star symbolic are well-known and popular throughout the world over the long period of time. It was originally sport shoes, i.e., basketball, badminton and skateboarding then it has developed into lifestyle shoes for any age and gender that can be worn at any occasion with the classic and unique design. Apart from footwear, which is the main products, the Company also sells apparels and other accessories. 1. Product Characteristics Converse Product is divided into two groups as follows:

1.1 Footwear Product : Footwear is the product group that generates major income of the Company which can be divided into two types as follows: 1) Basic Footwear

Basic Footwear consists of three main models which are Chuck Taylor All Star, CONS Star Player and Jack Purcell and have only 5 colors i.e. white, black, cream, blue and red. The basic footwear is available to sell throughout the year and contributes approximately 70% of the sales of footwear product.

Chuck Taylor All Star Hi CONS Star Player Jack Purcell

2) Fashion Footwear Fashion Footwear is designed to be modern and in line with fashion trend in each moment. There are both new arrival for each season and the minor change from basic model by changing the material on the shoes to keep its modern look, with the original Converse style.

This includes the new design of shoes and the shoes that use cutting-edge technology in the production process to serve the rapidly change in fashion trends and customer needs. Fashion Footwear is designed by Converse’s designers, by the Company's designers or by the collaboration of Converse’s designer with world-class brand designer (Collaboration).

Shoes designed by Converse’s designers

Collaboration Shoes Shoes designed by the Company's designers

One Star Pro Ox CTAS Andy Warhol Hi CTAS Metallic Hi

1.2 Non-Footwear Product

Apart from Footwear Product, which is the main product, the Company also sells apparels and other accessories to make the Company’s products cover a wide range of catagories. Non-Footwear product will be redesigned in every season to respond the ever-changing fashion trends, but still keep the unique style of Converse. Non-Footwear product consists of apparels, bags and other accessories such as caps and socks.

2. Target Customer

Main customers are teenagers, students, undergraduate and first-jobber with moderate to high income.

3. Sales and Distribution Channel 3.1 Retail distribution : Selling and distributing the Company’s products to retail customers

consists of two channels as follows : 1) Company’s retail shop (Mono Brand Store) : This type of shop sells only Converse

products with selling area ranging from 80-100 square meters. The Company operates all function covering from shop design and decoration, sales magement and stock management. The Company’s retail shops are located in leading shopping centers or commercial buildings in the community which all of them are rented from the owners. As of June 30, 2017, the Company has total of 41 retail shops throughout the country.

2) Sale counters in department store (Shop-in-Shop) : The Company sells its products in the form of consignment through the sale counters in leading department stores such as Central Department Store, Robinson Department Store, The Mall Department Store and SuperSports including local department stores in each province. As of June 30, 2017, the Company has 114 sale counters in department store throughout the country.

Table representing Details of Retail Channel in Year 2014-2016 and the first half of Year 2017

Retail Channals 2014 2015 2016 Jan-Jun 2017

Stores % Stores % Stores % Stores %

Company’s retail shops 30 21.28 35 23.65 39 25.16 41 26.45

Sale counters in department stores

111 78.72 113 76.35 116 74.84 114 73.55

Total 141 100.00 148 100.00 155 100.00 155 100.00

3.2 Wholesale distribution : Selling products to wholesale customers who operate retail shops selling apparel, shoes and sports equipment in form of chain stores such as Active Nation, Sports Dome, and Outlet Mall, as well as common stores. The Company’s sale area covers Bangkok, Northern region, Northeastern region and Southern region.

Table represents Detail of Sales by Distribution Channels in Year 2014-2016 and the first half of Year 2017

Sales 2014 2015 2016 Jan-Jun 2017

MB % MB % MB % MB %

Sales from Company’s retail shops

142.57 17.57 190.09 17.01 256.02 18.84 115.40 19.32

Sales from sale counters in department stores

391.80 48.29 525.48 47.01 596.06 43.87 272.31 45.59

Sale from wholesale customers 276.94 34.13 402.28 35.99 506.77 37.29 209.61 35.09

Total Sales 811.31 100.00 1,117.86 100.00 1,358.84 100.00 597.32 100.00

(II) “Pony” Pony is the sneakers brand originated in United States with the long history since 1972. Originally, the shoes were designed and manufactured with special technology for sport only. Later, it extended the product line to lifestyle shoes for both men and women with the "Pony Chevron" symbol and easy-to-wear design. The Company has started selling Pony Product in September 2017. 1. Product Characteristics

Pony Product is divided into two groups as follows: 1.1 Footwear Product

Pony Footwear Product can be divided into two types: 1) Basic Footwear

Basic Footwear Product is the shoes with simple design for both men and women consisting of 4 main models i.e. Top Star, Shooter, Hawaii and Light which is specifically for women. Basic Footwear is available to sell throughout the year and has 4 main colors including white, black, red and blue.

Top Star Shooter Hawaii Light

2) Fashion Footwear

Fashion Footwear Product is the shoes that design in accordance with fashion trend in each season. There are 3 categories of Fashion Footwear which are (1) designed by the Company’s designers (2) designed by the Pony’s designers and (3) collaboration of Pony’s designers with world-class brand.

Pony x Atmos Slamdunk Hi Gonzales PONY x Colette

http://sneakerb0b.de/releases/pony-x-atmos-slam-dunk-hi-new-york-state-of-mind/1662

https://www.google.co.th/search?biw=1920&bih=925&tbm=isch&q=PONY+x+colette&spell=1&sa=X&ved=0ahUKEwj8zuvst7DWAhWINI8KHXStCAMQvwUIICgA

1.2 Non-Footwear Product Pony Non-Footwear Product consists of apparels, bags and caps which are either simple design with unique symbol of “Pony Chevron” or fashion design with a trendy patterns and colors.

2. Target Customer

Main customers of Pony Products are teenagers, students and undergraduate. The Pony product has the lower price ranges than Converse products.

3. Sales and Distribution Channel Pony Product is mainly sold and distributed in form of consignment through the sale counters in leading department store such as Central Department Store, Robinson Department Store, The Mall Department Store and SuperSports. As of October 31, 2017, the Company has 31 sale counters in leading department stores in Bangkok and up-country. The Company also sells its products to wholesale customers who operate retail shops selling apparel, shoes and sports equipments.

Source of Product Procurement

1. Procurement of Converse Product

Factors to determine source of product procurement are total cost of product and lead time. The procurement of Converse product can be divided into three types as follows: 1.1 Purchasing directly from Converse (In-Line)

The Company orders the product through Converse’s ordering system and has entered into a service agreement with Nike Global Trading B.V. who is responsible for supplying Converse products from Converse-certified manufacturers to the Company. The Company orders fashion footwear products and non-footwear products for each season on ordering cycle that is determined by Converse, which is usually 4-6 months before the beginning of each season. Whereas, the Company can order basic footwear products every month.

1.2 Outsourcing from the Original Equipment Manufacturer (OEM) The Company outsources the production of bags, caps and socks that are designed by the Company’s designers to both local and foreign certified-manufacturers by Converse. The design of such product must be approved by Converse before the production begins. In dealing with OEMs, the Company has to submit the production plan to the OEMs suppliers at least 12 months prior to delivery date. The Company selects the OEM supplier based on cost including product price, import tax, transport cost, as well as lead time. Currently, the Company mostly orders products from OEM suppliers in China.

1.3 Ordering from the subsidiary’s factory (“BNS”) The Company orders basic footwear products i.e. Chuck Taylor All Star and CONS Star Player models as well as fashion footwear products that designed by the Company’s designers from BNS. The Company and BNS have to set the yearly production plan in advance by informing an estimate order of each model to BNS to prepare raw materials for production. Then, the Company will send the purchase order approximately 3-4 months in advance to BNS. Such purchase order contains detail of models, colors, sizes of each lot.

Table representing Source of Procurement of Converse Product in Year 2014-2016 and the first half of Year 2017

2014 2015 2016

Jan-Jun 2017

Purchasing directly from Converse 28.20% 26.19% 33.52% 41.72%

Outsourcing from OEM 9.00% 10.28% 9.69% 13.69%

Ordering from a factory of BNS* 62.80% 63.53% 56.79% 44.59%

Total Purchase of finished goods 100.00% 100.00% 100.00% 100.00%

Note : In 2018, the Company plans to use BNS’s factory to manufacture Pony footwear product. Whereas, all of the Converse footwear product that are currently manufactured by BNS will be purchased from Converse.

2. Procurement of Pony Product Y2017

Footwear Products : The Company purchases basic footwear products and fashion footwear products designed by the Company’ designers from local OEMs and purchases fashion footwear products directly from Pony.

Non-Footwear Products : The Company purchases non-footwear products from local and foreign OEMs

Y2018 onward The Company is planning to use BNS’s factory to manufacture Pony footwear products insteads of Converse footwear products. Therefore, the procurement of Pony products from 2018 onward will be as follows. Footwear Products : The Company will purchase basic footwear products and fashion footwear

products that were designed by the Company’s designers from BNS’s factory. In addition, the Company will also purchase fashion footwear products directly from Pony to add the variety of the products.

Non-Footwear Products : The Company will purchase non-footwear products from local and foreign OEMs

Industry Overview and Market Competition

1. Thailand Retail Industry

The Office of National Economic and Social Development Board (NESDB) reported that Gross Domestic Product (GDP) in 2016 had a growth of 3.24% from 2.94% in 2015 inlined with the growth in private consumption that continued to grow from 2.17% in 2015 to 3.06% in 2016 and the Private consumption index increased by 3.33% from the previous year due to an increase in consumption of semi-durable goods such as apparels and cloths. They expectede that in 2017 Thai economy will grow by 3.5%-4.0% due to the expansion of exports and investment by the private and public sector, by 1.71%, as well as the recovery and expansion of the household income in the agriculture sector, export sector, tourism sector and related services. Thai Retailer Association reported that Thai retail business grew by 2.97% in 2016 from 2.80% in the previous year. The key factors that support such growth are an increase in household spending resulting from the recovery of agriculture sector and the number of tourists. In the first half of 2017, Thai retail business grew only by 2.81%, affected by weakening of the government spending for economic stimulus and such growth was concentrated in Bangkok and major cities, while the purchasing power of people in provincial area declined. The Research Center for Economic, Business and grassroots Economic of Government Savings Bank estimated that the retail business is expected to grow at 3.0%-3.2% in 2017, supported by economic stimulus from government spending. In particular, the sales of modern trade retailers are expected to continue to expand from expansion of new branch and renovation of existing branches and rental areas, which will help the retail business to grow continuously.

2. Apparel and Footwear Industry According to Euromonitor International's report of Apparel and Footwear in Thailand issued February 2017, the growth of the apparel and footwear industry in Thailand decreased from 4.56% in 2015 to 4.32% in 2016, because domestic consumers were more cautious in spending, as the economy remained stable and household debt levels remained high. However, the domestic apparel and footwear industry in 2016 was still growing at a higher rate than the growth of the economy resulting from the number of foreign tourists and spending of foreigners that had grown continuously at a high level throughout the year during 2015-2016 together with the health-conscious trend and the trend of sport-fashion (Athleisure) which is a combination of casual and sporty outfits. As a result, the market for sportswear products continued to grow at a high level. In 2016, sports apparel products had the market value of Baht 45,792.90 million increasing from the previous year that had the market value of Baht 40,404.60 million, representing a growth rate of 13.34%. Euromonitor International expected that the sportwear market will continue to grow but at a slower pace. The growth factors are still the health-conscious trend and the sport-fashion trend. It is expected that in the year 2017, sportwear will have a market value of Baht 50,260.10 milliion and will increase to Baht 67,403.10 million in the year 2021 with the CAGR of 8.04%

3. Market Competition

Sportswear market in Thailand is a market of many entrepreneurs and various brands, both international and domestic brands. Each entrepreneur focuses on differentiating their own products in various forms such as lauch special collections, adoption of innovative production, use popular actor to advertise their products and arrangement of event marketing to create relationship between the customers and the brand. Market positioning of Converse footwear products is the footwear designed to be worn on a daily basis with some models that can be worn for sports or exercise. The price of Converse product is ranging from medium to high closing to other international brands in the market. Competitive brands that have similar positioning and customer targeting with Converse are Adidas Neo, Vans and Onitsuka Tiger.

Environmental Impacts -None- Summary of Material Contracts 1. License Agreement

Counter Party : Licensor No. 1 and Rich Sport Public Company Limited as “Licensee”

Contract Date : June 1, 2016 Objective : The Company is granted the rights from Licensor No. 1 to manufacture

footwear, apparel and other accessories under the Licensor’s brand, including exclusive rights to use license mark for marketing, sale, distribution and advertisement in Thailand. On October 4, 2017, the Company is granted the additional exclusive rights from Licensor to market, sale and distribute of licensed products in Cambodia.

Term of a Contract : June 1, 2016 to December 31, 2018 Contract Termination : 1. Licensor shall have the right to immediately terminate the Agreement

in the following event: - Licensee is in state of receivership, bankruptcy or liquidation. - Licensee breaches any material conditions of the Agreement. - Licensee fails to comply with any of the Guaranteed Annual

Minimum Royalties or Guaranteed Minimum Sales Volumes for any Contract Year.

- Licensee or any members of its senior management is convicted of a criminal offence and Licensor considers that it may adversely affect the name or reputation of Licensor.

2. Licensor shall have the right to terminate this Agreement if Licensee has not remedied the breach within 7 days after receipt of written notice from Licensor. - Licensee fails to pay when due to Licensor any amount of

royalties or fees for the period specified in this Agreement.

3. Licensor shall have the right to terminate this Agreement by written notice to Licensee in the event that the Licensee defaults or delays the payment for more than 60 days after the occurrence of force majeure.

4. Either party shall have the right to terminate this Agreement by written notice to the other party in case that the other party fails to perform any of this Agreement conditions, and such failure is not remedied within 30 days after receipt of written notice from the terminating party.

Counter Party : Licensor No. 2 and Rich Sport Public Company Limited (“Licensee”)

Contract Date : December 21, 2016 Objective : The Company is granted the right to design, manufacture and use the

trademarks in connection with the sales, distribution, advertising and promoting the products in Thailand, Cambodia and Laos.

Term of a Contract : July 12, 2016 to December 31, 2021 Licensee may request renewal for five calendar years if Licensee is able to achieve Guaranteed Minimum Net Sales and pay Guaranteed minimum fee on time. Licensee submits a letter of intent to extend the grant period to Licensor no later than July 1, 2021.

Contract Termination : - If any royalties or fees is not paid to Licensor by the due date and Licensee fails to remedy it within 10 business days after receipt of the written notice from Licensor.

- If Licensee does not meet the Guaranteed Minimum Net Sales for any 2 consecutive contract years.

- If Licensee breaches any material conditions and fails to remedy them within 30 days after receipt of the written notice from Licensor.

- If Licensee is in state of receivership, bankruptcy or liquidation. - If Licensee has any change of control.

2. Product Sourcing Services Agreement

Counter Party : Nike Global Trading B.V. (“Service provider”) Rich Sport Public Company Limited (“Client”)

Contract Date : June 1, 2016 Scope of services : - Service provider will be responsible for supplying and coordinating

with manufacturers and/or distributors according to Client’s order. - Service provider will regularly oversee the quality of products

manufactured by manufacturers and/or distributors in accordance to Client’s standard.

- Service provider will inform Client from time to time of related industry and market information.

Term of a Contract : February 1, 2016 to December 31, 2018 Contract Termination : - In the event that either party is in state of receivership, bankruptcy or

liquidation. - In the event that Client no longer has the right to manufacture and

distribute Licensor No. 1’s licensed products - In the event that Client fails to pay any fees in accordance with this

Agreement or pay for the product purchased upon 10 days after receipt of written notice from Service provider

- In the event that either party breaches any conditions of this Agreement and not remedies them within 20 days after receipt of the written notice

- In the event that either party breaches any conditions of this Agreement for more than 60 days after the occurrence of force majeure.

Feasibility Study -None-

Technical and Management Assistance -None- Future Projects The Company started distributing Pony products in Thailand in September 2017. The distribution channel of Pony products is mainly through sale counters in the department stores. The Company plans to open Pony’s sale counters in Bangkok and upcountry in total amount of 40 Pony’s sale counters within 2017. The investment in shop decoration is approximately Baht 200,000.

Related Transactions In 2016 and the first half of 2017, the Company had transactions with related parties who may have conflict of interest as follows: 1. Ms. Papitch Wongpaitoonpiya

- Chief Executive Officer of the Company - The Company’s shareholder holding 133,000,100 shares, accounted for 23.33 percent of total paid-

up shares as of June 6, 2017.

Related Transactions

Transaction Value

(Million Baht) Necessary and Rationale of Transaction

2016 Jan - Jun

2017

Leasing Guarantee The Company has entered into the leasing agreements with the leasing company for purchasing the Company’s vehicle. Ms. Papitch Wongpaitoonpiya provided a personal guarantee for such leasing in accordance to the conditions of leasing company and did not charge any compensation from the Company for this guarantee. The audit committee reviewed and had an opinion that this transaction is necessary and benefited the Company to enter into auto leasing agreements for the Company’s operation.

Credit line Outstanding

5.82 4.59

5.82 4.12

Short Term Loans The Company had made an advance payment for personal expense of Ms. Papitch Wongpaitoonpiya which all of them has already been repaid within May 31, 2016. However, the Company has policy that there will be no more advance payment for personal expense in the future. The audit committee reiterated and directed the Company to strictly conform to aforementioned policy.

Beginning Balance Increase during the period (Decrease) during the period Ending Balance

0.90 2.72

(3.62) -

- - - -

2. Mrs. Sukanda Kuttikul

- The Managing Director of Benefit Shoes Co.,Ltd, the Company’s subsidiary


Transaction Value


2016 Jan - Jun

2017

Leasing Guarantee BNS has entered into the leasing agreements with the leasing company for purchasing the BNS’s vehicle. Mrs. Sukanda Kuttikul provided a personal guarantee for such leasing agreements in accordance to the conditions of leasing company and did not charge any compensation from BNS for this guarantee The audit committee considered and had an opinion that this transaction is necessary and benefited BNS to enter into automobile leasing agreements for BNS’s operation.

Credit line Outstanding

1.27 1.08

1.27 0.89

3. Spirit Corporation Co., Ltd. (“SPIRIT”)

- Mr. Suthep Wongpaitoonpiya, father of Ms. Papitch Wongpaitoonpiya who is Chief Executive Officer and major shareholder of the Company holding 133,000,100 shares accounted for 23.33 percent of total paid-up shares as of June 6, 2017, is the Director of SPIRIT.


Transaction Value


2016 Jan - Jun

2017

Acquisition of land and building

60.62 - In 2016, the Company received land and building transferred from SPIRIT which are assets under the agreement to buy and sell between SPIRIT and BNS dated December 26, 2014 and the amendment dated July 15, 2015. On December 26, 2014, BNS paid for such assets at Baht 60.62 million, which is based on the fair value appraised by Thai Property Appraisal Lynn Phillips Co., Ltd, an independent appraiser approved by SEC. Later, according to the agreement dated June 22, 2016, SPIRIT (“who have the right to sell”) ,BNS (“who have the right to buy”) and the Company (Transferee) had agreed SPIRIT to transfer the ownership of such land and buildings to the Company. Therefore, the Company repaid the purchased amount of land and building to BNS on June 30, 2016. The audit committee considered and had an opinion that the purchase price of land and building from BNS was reasonable because the price was based on the appraised value by the independent appraiser approved by the SEC.

4. Mr. Suthep Wongpaitoonpiya - Father of Ms. Papitch Wongpaitoonpiya, a Chief Executive Officer and shareholder of the Company

holding 133,000,100 shares and accounted for 23.33 percent of total paid-up shares at June 6, 2017


Transaction Value


2016 Jan - Jun

2017

Advisory Fee - 0.15 The Company hired Mr. Suthep Wongpaitoonpiya for providing business advisory service to the Company in regard to negotiating and coordinating with international business partners. Mr. Suthep Wongpaitoonpiya has intensive experience and expertise in footwear industry and also has a good relationship with international business partners. This advisory service is benefited to the Company’s business. The advisory fee is Baht 25,000 per month which is comparable rate with the remuneration of the Company’s management. The agreement is effective from January 1, 2017 to December 31, 2017. The audit committee considered and had an opinion that this transaction is reasonable because Mr. Suthep Wongpaitoonpiya has intensive experience and expertise in footwear industry. Such consulting and advice is benefited the Company’s operation.

Significant Contingencies and Commitments -None-

Key Risk Factors 1. Risk from relying on Converse Brand

Currently, all of the Company’s revenue is from Converse products sales. If the Company is unable to be granted an extension of the agreement from Converse or fails to comply with any of the Guaranteed Annual Minimum Royalties or Guaranteed Minimum Sales Volumes specified in the License agreement which may lead to termination of the agreement prior to the expiration, the Company may be significantly affected on its revenue and operation results. However, the Company has continuously received an extension of the agreement from Converse during the past 14 years. In addition, the Company also consistently generates sales growth in every year and complies with all of Converse’s policy and conditions stated in the agreement, therefore, the Company’s management is confident that they will obtain support and trust from Converse continuously. In order to reduce the aforementioned risk, the Company has entered into the agreement for the exclusive rights to distribute Pony products in Thailand, Cambodia and Laos on December 21, 2016. This will help the Company to expand and diversify its target customers.

2. Risk from starting business of a new brand The Company has granted the exclusive rights from Pony International Limited, Hong Kong for distribution of Pony products in Thailand, Cambodia and Laos. The license agreement has a condition in regard to the guaranteed minimum sales. If the Company is unable to meet such condition for any two consecutive contract years, the licensor may exercise its right to terminate the agreement immediately. Therefore, the Company may be exposed to the risk from termination prior to the expiration due to not able to meet such condition. Moreover, the Company just launched Pony product in September 2017 so the Company may be exposed to the risk that the Company’s sale may not achieve its estimation or may not be worth for the invesment which will affect to the Company’s operating performance. Since Pony brand is rather new for Thai market, both the Company and the licensor have to collaborate in building brand awareness, as a result, the guaranteed minimum sales volumes specified in the license agreement is reasonable and considers the time that the Company requires for advertising and promoting the brand. The Company’s management is confident that the Company can achieve such condition. Although Pony is the new brand for the Company, most of the Company’s management team have estensive experience and expertise in the footwear and accessories industry for many years and can apply marketing strategy and management policy effectively. Nevertheless, at the beginning period of selling of Pony products, the Company will focus on selling Pony products through sale counters in department stores due to low investment and reducing investment risk.

3. Risk from inventory management At the end of 2014-2016 and the second quarter of 2017, the Company’s and tis subsidiary had net inventory at the amount of Baht 134.85 million, Baht 128.83 million, Baht 198.37 million and Baht 225.50 million, respectively, representing approximately 21-25 percent of total assets. If the Company manages inventories improperly, the Company’s inventories may be outdated and causing the Company to record an allowance for obsolete inventories. On the other hand, if the Company has too few inventories, the Company may not have enough products to serve the customers’ needs. As a result, the Company may loss opportunity to sell and the Company’s performance will be impacted. However, in 2014-2016, number of day sales of inventory was continuously decreasing reflecting on efficient inventory management because the product team has an experience and expertise in selecting and ordering appropriate number of products to meets the customers’ needs. Moreover, the Company also has an inventory online system that links inventory data at main warehouses to retail stores or sale counters and allow effective inventory management. However, number of day sales of inventory of the Company for the first 6 months of 2017 increased due to unclear economic recovery.

4. Risk from investing in shop expansion

The Company plans to continuously expand retail distribution channel on potential areas, so the Company may be exposed to the risk of underperformance of the new shop. However, due to the fact that most of mono brand stores are located in leading shopping centers, coupled with the strength and popularity of Converse brand, the Company’s mono brand stores partly helps attracting customers to the shopping centers. Therefore, the Company has the opportunity to be provided potential areas from

department stores or shopping center developers. In addition, the Company’s management is able to select location and manage its shop effectively, as seen from continuously increasing of the revenue and the number of stores in every year. The Company is confident that the shop expansion will increase effective distribution channel toward the customer group.

5. Risk from the Company’s plan to source footwear directly from Converse In 2018, the Company plans to use BNS’s footwear factory, which currently manufacture Converse footware, to manufacture the footwear under Pony brand instead of Converse and plans to order all footwear products from Converse. This may cause an increasing in cost of sourcing of Converse’s footwear and more inventories of such products due to longer lead time. This may affect the Company’s financial status and operating performance. However, most Converse footwear currently manufactured by BNS is basic product which can be ordered from Converse every month. The period of ordering from Converse is closed to the period of ordering from BNS, thus, the Company does not need to stock up a large number of inventories. In order to mitigate effect of cost increase, the Company plans to increase the sale price. Moreover, according to the ASEAN-China Free Trade Agreement, the tariffs on footwear products from China will reduce from 20 percent to 5 percent in 2018. After adjusting the sale price as the Company's plan and the reduction of import tariffs, the gross margin of basic footwear manufactured by BNS is expected to decrease by 3.50-5.50 percent. Besides, the Company plans to boost sales of higher gross margins products and manufacture more Converse products from BNS from September to December 2017 for 2018 sale period. As a result, the Company is able to minimize the impact of the aforesaid declining in gross margins.

6. Risk of information technology system failure.

The Company uses an information technology system (IT system) for administration covering procurement system, sales system, warehouse management system, accounting and finance systems, and daily sales report from its branches. Therefore, if IT system fails, it will cease working process and affect to the Company's business operation. However, the Company is using the cloud server from accredited international standards providers of information security controls which is guaranteed that the Company's IT system can be used at 99.90 percent, thus reducing the risk of the whole Company's IT system failure. Moreover, the Company has not encountered the IT system failure that has affected to the business operations.

7. Risk from rent of ERP system. The Company is renting an Enterprise Resource Planning system (ERP) from an external provider. If the service provider stops providing ERP services to the Company, it may affect the Company’s business operation. However, due to the fact that the Company is able to control and manage such program and database by itself, in case the service provider stops providing ERP services to the Company, the Company’s ERP system will still be able to used but cannot be developed an additional feature. In the meantime, the Company can adopt and develop other systems to replace the current ERP system.

8. Risk from unable to renew rental agreements

The Company sells products to retail customers through its retail stores (Mono Brand Stores) representing around 20% of total sales in 2014-2016 and the first half of 2017. The Company is renting area for its mono brand stores from shopping centers or commercial buildings owners, those have the contract terms between one to three years. Consequently, the Company might have the risk from unable to renew the rental agreement; however, throughout the 14 years of operation, the Company has never experienced any difficulties in regard to unable to renew rental agreement because the Company always complies with all the terms of the contract. In addition, the Company has a good relationship with the shopping center developers and the Converse brand is popular among consumers for a long period of time. The Company’s mono brand stores also take part in attracting customers to shopping centers. Thus, the Company has been given the opportunity to get potential areas from shopping center developers that plan to expand their branches or commercial area.

9. Risk from foreign currency

The Company imports products from overseas and also pays royalty fee and procurement fees to Converse in US dollars. In addition, its subsidiary also imports some raw materials from overseas.

Moreover, the Company also has a policy to supply Converse footwear by importing all footwear products from Converse in 2018. While all of the Company’s revenues are in Thai Baht, the fluctuation in foreign exchange rates may affect to the operations of the Company’s group. In case that dollar strengthened, the cost of products of the Company would increase. The Company’s group is aware of such risk and set a pricing policy by taking the risk of fluctuations in exchange rates into account. In addition, payment of finished goods ordered from abroad mostly paid before the delivery so the company is able to set the price properly and in line with product cost. Moreover, the Company will closely monitor news, direction and movement of related currencies, and manage foreign exchange rate risk by purchasing forward contracts depend on situation and necessity.

10. Risk from change in consumer behavior

The rapid change of fashion trends both domestically and internationally is a major factor affecting the Company's business. If the Company cannot adapt to the changes in consumer behavior, the Company’s revenue and performance may be affected. However, the Company is confident that it will have little effect from such risk due to approximately 70 percent of the Company main products are basic models with classic shapes and colors which is available to sell throughout the year. The other is fashion product designed to be modern and followed the trend in each selling season. In addition, the Company has product department that keeps update a fashion trend all the time and anticipate the change of fashion trend in order to design and purchase products that meet the customes need effectively. Moreover, the Company has a policy to set an allowance for obsolete inventories. For inventories aged less than 1 year, the Company will compare inventory cost and its net realizable value (NRV). If NRV of the inventory falls below cost of inventory, the Company will record the difference of NRV and cost as an allowance for obsolete inventories. For inventories aged over one year, the Company will record the full amount of such inventories as an allowance for obsolete inventories.

11. Risk from business competition Sportswear industry in Thailand is highly competitive as there are a lot of players both international

and local Brands. Many players concentrate on differentiate their products and continuously launching new products. They also use new production technologies for developing lightweight and comfortable footwears. In addition, they implement marketing strategy to attract consumers to buy their products. However, Converse is a strong brand and widely known throught out the world. It also has variety of products to serve the customer need with both the basic footwear which has classic shape and design that made Converse being popular among customers and the fashion footwear with the modern design following to the fashion trends. Moreover, the Company’s management team has an experience in the industry for more than 15 years. This allows them to understand the business. Furthermore, the Company also emphasizes closely and consistently on assessing, monitoring and analyzing the business risk, market competition and customer need. Therefore, the Company can set a strategy or business plan appropriately and quickly response to the market changes and competitors’ movement. The Company is confident that it will be less affected by such competition.

12. Risk from employee fraud As the Company has salespersons (PC) in the company's mono brand stores and sale counters for

providing service and managing store operation, the Company may be exposed to the risk of fraud which could affect the Company’s operation. However, the Company imposed a preventive policy and procedures for any possible occurrences. For example, the heads of regional sales are responsible for monitoring and approving the suitability of the goods requisition. There are also branch visit on a regular basis to check the staff operation, and inventory check at every retail stores on a monthly basis. In addition, the Company requires each branch to transfer money received from PC staffs into the Company’s account on a daily basis and the accounts receivable officer shall be verify the accuracy of the documents. If an abnormality is detected, it will be reported to the head of the regional sales for further investigation and considering punishment in case of fraud occurrence. Besides, the Company requires PC staffs to have a fidelity guarantee insurance to provide protection against losses arising out of fraud, embezzlement or theft and in case there are any losses of goods in the store, it must be responsible of all PC staffs in the branch. The Company believes that such policy and procedures can reduce the risk of employee fraud effectively.

13. Risk from labor shortage

BNS, a subsidiary of the Company, operates in footwear production business which requires labor who has skill and expert to produce footwears that comply with Converse standard. Therefore, if BNS lacks or has not enough skilled labours, it may be unable to manufature products following to the production plan and finally affect the Company group’s operation. However, The Company group has setup the competitive compensation and welfare, comparing with other companies in similar businesses. It also supports development of employees’ knowledge and ability to perform various tasks which will advance their career. In addition, the Group has never experienced a shortage of skilled labours so the Company’s management believes that the Group will not be affected by the shortage of labor.

14. Risk from having major shareholders holding more than 50% After this initial public offering, Wongpaitoonpiya’s family will have shareholding proportion of 74.03 percent of registered and paid up capital. Therefore, the minority shareholders could have risk from unable to cast votes for checking and balancing of major shareholder’s raising matters to concern in the Company shareholders’ meeting. However, the Company has appointed the audit committee to review, consider and scrutinize in order to avoid future conflicts of interest and to ensure transparency of the Company's operations. Moreover, The Board of Directors consists of 4 independent directors (including the Chairman of the Board) from the total number of 7 directors and 3 executive directors. This structure of the Board of Directors will balance the voting for consideration of any matters, also appropriate and maximize management efficiency.

Lawsuit -None- Number of Employees As of June 30, 2017, the Company had a total of 409 employees (excluding 7 executives) and its subsidiary had a total of 503 employees (including executives) Company Background

Year Event

2001 Established and registered under the name “Rich Sport Company Limited” with registered capital of Baht 5 million on September 25, 2001

2003 The Company was granted the exclusive rights from Converse Inc. to manufacture, sell and distribute Converse product in Thailand.

2007 Benefit Shoes Company Limited was established and registered with registered capital of Baht 2 million on September 27, 2007

2014 The Extraordinary General Meeting of the Shareholders No. 1/2557 held on December 19, 2014, had the resolution to approve the investment in BNS by purchasing of 500,000 new ordinary shares of BNS at par value of Baht 100. After the transaction the Company held 96.15 percent of total issued shares of BNS.

2015 The Company purchased BNS’ ordinary shares from 4 existing shareholders, totaling 19,998 shares at the par value of Baht 100 per share and thereby increasing the Company's shareholding in BNS to 99.99% of the total issued shares of BNS.

2016 The Company was granted the exclusive rights from Pony Intenational Limited to manufacture, sell and distribute footwear, apparels and accessories under Pony brand in Thailand, Cambodia and Laos.

2017 The Company started selling its products under the Pony brand through sale counters in leading department store. The first Pony’s sales counter was opened at Central Westgate on September 1, 2017.

On October 4, 2017, the Company was granted additional exclusive rights to market, sell and distribute Converse products in Cambodia. Currently, the company is studying and consideration of proper distribution channels.

Investment in Subsidiary/Associated/Related Companies As of June 30, 2017, the Company has invested in its subsidiary as following detail.

Name Type of

business Paid-up Capital % of shareholding

Investment Cost

(As of June 30, 2017)

Benefit Shoes Company Limited

(“BNS")

Footwear manufacturer

THB 52 million 99.99 THB 52 million

Increase (decrease) in Capital in the last 3 years

Date

Capital

increase

(decrease)

MB

After the

increase

(decrease)

MB

Note/ Objective

December 25, 2014 100.00 200.00 Offering to existing shareholders for using as working capital

September 21, 2016 150.00 350.00 Offering to existing shareholders for using as working capital

April 19, 2017 220.00 570.00 Offering to existing shareholders for using as working capital

June 6, 2017 200.00 770.00 Offering 195,000,000 ordinary shares to public and 5,000,000 ordinary shares to directors, executives and employees of the Company and its subsidiary.

Accounting Period January 1 - December 31 Auditor Mr. Bunjong Pichayaprasat of Siam Truth Audit Co., Ltd. Registrar Thailand Securities Depository Co., Ltd. Financial Advisor Finansia Syrus Securities Public Company Limited Lead Underwriter Finansia Syrus Securities Public Company Limited Dividend Policy The Company and its subsidiary have a policy to pay dividend at least

40% of net profit from separate financial report annually after deduction of corporate income tax and legal reserve. However, the Company and its subsidiary may consider to pay dividend differ from the mentioned policy rate depending on performance, financial liquidity and necessary of working capital for business operations and future expansion, also depending on economic situation.

B.O.I. Certificates -None-

No. of Shareholders As of November 8, 2017 Number of Number of % of Paid-up Shareholders Shares Capital 1 Strategic shareholders 1.1 Director, manager, and executive management 11 440,005,200 57.15 Including related persons and associated persons 1.2 Shareholders who have a holding of above 5% 1 132,999,800 17.27 Including related persons 1.3 Controlling Shareholders - - - 2 Non-strategic shareholders hold >1 trading unit 6,988 196,995,000 25.58 3. Non-strategic shareholders hold < 1 trading unit - - -

Total Shareholders 7,000 770,000,000 100.00 Major Shareholder As of November 8, 2017

Shareholder Name

After IPO Before IPO

No. of

shares

% of paid-up

capital

No. of

shares

% of paid-up

capital

1. Group of Ms. Papitch Wongpaitoonpiya

1.1 Rich Sport Holding Co., Ltd. 171,000,000 22.21 171,000,000 30.00

1.2 Ms. Papitch Wongpaitoonpiya 133,000,100 17.27 133,000,100 23.33

1.3 Mr. Pasawich Wongpaitoonpiya 133,000,100 17.27 133,000,100 23.33

1.4 Mr. Panuwitch Wongpaitoonpiya 132,999,800 17.27 132,999,800 23.33

Total Group of Ms. Papitch Wongpaitoonpiya 570,000,000 74.03 570,000,000 100.00

2. Thai Life Insurance Plc. 4,273,200 0.55 - -

3. Ms. Onuma Supornsirikul 2,002,500 0.26 - -

4. Mr. Atikhun Khanutwong 2,000,000 0.26 - -

5. Mrs. Suchamon Oranthatsanakan 2,000,000 0.26 - -

6. Ms. Suratsawadee Raiput 2,000,000 0.26 - -

7. Allianz Ayudhya Assurance Plc. 2,000,000 0.26 - -

8. LH Top Pick Fund 1,892,100 0.25 - -

9. The Registered Provincial Electricity

Authority Provident Fund

1,880,900 0.24 - -

10. Mr. Chalat Tupprasert 1,800,000 0.23 - -

Total Shares 589,848,700 76.60 570,000,000 100.00

Foreign Shareholders As of November 8, 2017 The Company has 35 foreign shareholders. Total no. of share held 2,041,100 shares or 0.27 percent of paid-up

capital Note: The Company has a limitation on the percentage of equity shares held by foreign shareholders stated in the article of association no. 10 that “The Company’s shares can be freely transferred while the total shares held by foreigners must not exceed 49 percent of total paid-up capital. The Company has right to reject any transfers that will cause the proportion of shares held by foreigners to exceed the aforementioned rate.”

Board of directors

Name Position Start

1. Gen. Phairat Phoubon Chairman of the Company and Independent Director

September 7, 2016

2. Ms. Papitch Wongpaitoonpiya Director and Chief Executive Officer June 1, 2014

3. Mr. Somroj Sirisophana Director September 7, 2016

4. Mr. Chertchai Prasongphonchai Director September 7, 2016

5. Mr. Manit Nitiprateep

Chairman of the Audit Committee and Independent Director

September 7, 2016

6. Mr. Chaisak Angkasuwan Audit Committee and Independent Director September 7, 2016

7. Mr. Udom Tangmanasakul Audit Committee and Independent Director September 7, 2016

Remark : Director no. 1 and 3-7 appointed by the Board of Directors' Meeting No. 3/2016 held on August 19, 2016 and appointed by Extraordinary General Meeting of Shareholders No. 1/2016 held on September 7, 2016

Miss Amporn Prakaihongmanee is the Company Secretary Audit Committee Board of Directors Meeting No. 3/2016 held on August 19, 2016 and appointed by Extraordinary General Meeting of Shareholders No. 1/2016 held on September 7, 2016 have the resolution to appoint the Audit Committee as follows;

Name Position

1. Mr. Manit Nitiprateep Chairman of the Audit Committee and Independent Director

2. Mr. Chaisak Angkasuwan Audit Committee and Independent Director

3. Mr. Udom Tangmanasakul* Audit Committee and Independent Director

Remark : *Member of audit committee who has knowledge and experience to verify reliability of the financial statements.

Miss Lapasrada Chayapoltanakul is the secretary of the Audit Committee. Scope of Duties and Responsibilities 1. To review the accuracy and sufficiency of the financial reports of the Company. 2. To review the Company to ensure that the internal control and internal audit systems are suitable, and

effective, and to review the independence of internal audit section, including approving the appointment, transference, or termination of internal audit section supervisor (heads) or those of other workgroups responsible for internal audit.

3. To review the Company to ensure that its operation is in accordance with the laws governing Securities and Exchange, regulations of the SET and laws concerning the business of the Company.

4. To consider, propose, and appoint independent persons who shall be assigned as the Company’s auditor, to propose auditor’s remuneration, and to participate in a meeting with the auditors at least once a year without management team.

5. To review connected transactions or any other transaction that may cause potential conflicts of interest in accordance with SET laws and SET regulations in order to ensure that those items are reasonable and of utmost benefits to the Company.

6. To prepare the Report of the Audit Committee and disclose the report in the Company’s Annual Report. The Report of the Audit Committee must be signed by the Chairman of the Audit Committee and must at least contain the following information. (a) Opinions on accuracy, completeness and credibility of the Company’s financial reports; (b) Opinions on sufficiency of the Company's internal control system; (c) Opinions on the Company's compliance with the laws governing Securities and Exchange,

regulations of the SET and laws concerning the business of the Company. (d) Opinions on suitability of auditors of the Company; (e) Opinions on transactions of possible conflicts of interest (f) The number of audit committee’s meetings, and attendance of each audit committee member; (g) Opinions or observation by the audit committee during their auditing practice according to

charter; and (h) Other transactions that shareholders and public investors should be informed under the scope

of work and responsibilities assigned by the Company’s board of directors. 7. To take care of any other action assigned by the board of directors with the consent of audit

committee. Terms of holding office The Chairman of the audit committee and the members of the audit committee have held the positions for 3 years. Listing Condition -None- Silent Period Strategic shareholders and existing shareholders, holding 423,500,000

shares or 55.00% of paid up capital after the initial public offering certify to the Stock Exchange of Thailand that their shares will not be sold for the period of one year from the first trading day. Upon the expiry of 6 months period of the prescribed time, those shareholders will be allowed to sell 25% of the total amount of shares prohibited for sale and the rest after one year.

Relaxation -None-

Others 1. Operation of business in the future

At present, the Company procures the Converse footwear products through two main channels, consisting of (1) ordering from BNS’ factory accounted for 56.72% and 44.57% of total purchase in year 2016 and the first half of 2017, respectively and (2) purchasing directly from Converse accounted for 21.73% and 29.50% of total purchases in year 2016 and the first half of 2017, respectively. Since Converse has policy requiring the Company to purchase all of footwear products directly from Converse in 2018. As a result, the Company will use the BNS’ factory to manufacture Pony footwear instead of Converse footwear. Consequently, all basic footwares, Chuck Taylor All Star and CONS Star Player, will be ordered from Converse. From such cause, it will affect both the Company and its subsidiary as follows:

1.1 Impact to the Company The procurement cost of footwear products by purchasing from Converse will be higher than

ordering from BNS. As a result, the gross margins for these types of footwear are expected to decrease by approximately 9.50%-15.50%.

However, the Company is aware of the impact and plans to increase its selling price by comparing with other competitor brands in the market. In addition, from the ASEAN-China Free Trade Agreement, there will be a reduction in tariffs on imported footwear products from China from currently 20% to 5% in 2018 which will cut the cost of product procurement of the Company. As a result, the gross margins of such footwear products are expected to decrease by approximately 3.50-5.50%. Moreover, the Company also has other actions to minimize the effect of decreasing in gross margin as follows:

- The Company will increase the sales proportion of products with high gross margin - The Company will place extra orders to BNS during September to December 2017

preparingfor sales in 2018. In 2018, the Company will start to purchase all the basic footwear (consisting of Chuck Taylor All Star

models and CONS Star Player models) from Converse through its ordering system. The Company can order basic footwear products every month. The total of production time and delivery time for product purchased from Converse is close to the time ordering from BNS, which must be ordered 3-4 months in advance, so there are no needs for the Company to maintain high inventory.

1.2 Impact to the Subsidiary In 2018, the Company is planning to use BNS’ factory to manufacture Pony footwear. Since the

Company just launched the Pony brand at the beginning of September and in the period of building awareness for Pony brand, sales of Pony footwear during startup period might not be so high. As a result, the utilization rate of BNS factory will be dropped, so BNS is planning to reduce the number of its employees in the production line in December 2017 and must provide compensation for such layoff. Comparing such compensation with reserve portion in the employee benefit obligation, BNS is required to have an extra employee expense of Baht 2.51 million, which was already recorded in June 2017. This reduction in employee will result in a reduction in the full capacity of BNS factory.

However, even if the utilization rate of the BNS factory is dropped, the production costs will not increase, since the fixed costs which are mainly the depreciation of machines almost full depreciated. While the Company had to invest in the amount of Baht 1.31 million for the shoes mannequins and molds that used in the production of Pony footwear which has fully invested in June 2017. The shoes mannequins and molds that used in the production of Converse footwear cannot be used in the production of Pony footwear, that had net book value of Baht 1.80 million as at May 31, 2017 and BNS will gradually amortize them from June to December 2017.

The Company targets the proportion of its revenue in 2018 to be from the sale of goods purchased from Converse and OEMs accounted for approximately 80% of total sales and revenue from sales of BNS products, including Converse footwear stocks and Pony footwear products, accounted for approximately 20% of total sales.

2. Relationship between the Company and Wongpaitoon Group Public Company Limited The major shareholders of the Company are relatives with major shareholders and executive of

Wongpaitoon Group Public Company Limited (“WFC”) which used to be a listed company on the Stock Exchange of Thailand (SET). However, WFC had a large amount of loans with financial instuition in US dollars currency. After the Bank of Thailand announced the float of the Thai Baht in 1997, WFC’s liabilities and interest expenses had increased significantly. As a result, WFC had to record loss from the use of floating exchange in the statement of income. Moreover, WFC had to set aside allowance for obsolete inventories, resulting in lack of liquidity and negative equity of WFC. Such factors had let WFC to enter into the rehabilitation and debt restructuring process with financial institutions and finally forced to delist from SET. Eventually, in 2014, the Central Bankruptcy Court ordered WFC to be a bankrupt and liquidated from juristic person status.

Currently, the major shareholders of the Company are Ms. Papitch Wongpaitoonpiya, Mr. Pasawich

Wongpaitoonpiya and Mr. Panuwitch Wongpaitoonpiya, including the current directors and executives of the Company were never been either executives or involved in the management of WFC. Statistical Summary Rich Sport Public Company Limited

Remark: 1/ Net Profit attributable to equity holders of the parent

2/ Par value of Baht 1 per share calculates from no. of share at the ending period 3/ Calculates from a dividend payment of the Company’s performance in each period 4/ Calculates from a dividend payment of the Company’s performance in each period divided by net

profit from separated financial statement

Year In million Baht Baht /Share2/

Payout Ratio (%)

4/ Total Sales

Net Profit

(Loss)1/

Earnings

(Loss)1/

Dividend3/ Book Value

2014 811.31 67.50 0.34 0.53 2.24 155.56

2015 1,117.86 244.69 1.22 1.55 2.51 147.85

2016 1,358.84 298.76 0.85 1.21 1.89 115.72

Jan – Jun 2017 597.32 122.16 0.21 0.18 1.32 87.75

Rich Sport Public Public Company Limited As of December 31, 2014 - 2016 and June 30, 2017

Statement of Financial Position

Statement of Financial Position

Proforma

financial

statement

Consolidated financial statement

2014 2015 2016 Jun 30, 2017

MB % MB % MB % MB %

Asset Current Asset

Cash and cash equivalents 84.44 13.06 174.83 24.04 233.35 26.72 296.58 32.51 Current investments 25.00 3.87 - - - - - - Trade and other receivables 129.34 20.01 206.61 28.41 199.13 22.80 137.61 15.09 Short-term loans to a related parties

90.30 13.97 0.90 0.12 - - - -

Inventories 134.85 20.86 128.83 17.72 198.37 22.71 225.50 24.72 Other current assets 16.11 2.49 22.98 3.16 29.87 3.42 31.22 3.42

Total current assets 480.03 74.26 534.15 73.46 660.72 75.65 690.92 75.75

Non-current assets Restricted bank deposits 7.43 1.15 14.06 1.93 7.82 0.90 7.91 0.87 Advance for purchase of assets 60.62 9.38 60.62 8.34 0.18 0.02 - - Property, plant and equipment 83.34 12.89 87.65 12.05 165.47 18.95 165.30 18.12 Intangible assets 3.91 0.61 5.83 0.80 7.27 0.83 10.16 1.11 Deferred tax assets 3.38 0.52 4.81 0.66 6.47 0.74 9.43 1.03 Other non-current assets 7.68 1.19 20.04 2.76 25.40 2.91 28.44 3.12

Total non-current assets 166.36 25.74 193.02 26.54 212.62 24.35 221.23 24.25

Total assets 646.39 100.00 727.18 100.00 873.34 100.00 912.15 100.00

Liabilities Current liabilities

Trade and other payables 146.82 22.71 124.41 17.11 126.37 14.47 85.15 9.33 Current portion of long-term borrowings from financial institutions

1.38 0.21 1.22 0.17 2.16 0.25 2.19 0.24

Income tax payable 13.05 2.02 55.36 7.61 47.22 5.41 32.10 3.52 Other current liabilities 11.02 1.70 15.14 2.08 1.53 0.18 1.84 0.20

Total current liabilities 172.27 26.65 196.12 26.97 177.29 20.30 121.27 13.29

Non-current liabilities Liabilities under financial lease contract

3.00 0.46 3.27 0.45 5.59 0.64 4.48 0.49

Provision for long-term employee benefits

17.32 2.68 18.56 2.55 19.83 2.27 24.00 2.63

Other non-current liabilities 5.70 0.88 7.03 0.97 9.68 1.11 11.42 1.25

Total non-current liabilities 26.02 4.03 28.86 3.97 35.10 4.02 39.89 4.37

Total liabilities 198.29 30.68 224.99 30.94 212.39 24.32 161.16 17.67

Shareholders' equity Share capital Authorized share capital 200.00 30.94 200.00 27.50 350.00 40.08 770.00 84.42 Issued and paid-up share capital 200.00 30.94 200.00 27.50 350.00 40.08 570.00 62.49 Surplus arising from business combination under common control

47.07 7.28 50.36 6.92 50.36 5.77 50.36 5.52

Retained earnings Appropriated - statutory reserve 6.44 1.00 20.00 2.75 20.00 2.29 33.41 3.66 Unappropriated 190.70 29.50 231.83 31.88 240.60 27.55 97.22 10.66

Equity attributable to owners of the parent

444.22 68.72 502.19 69.06 660.95 75.68 750.99 82.33

Non-controlling interests 3.88 0.60 - - - - - -

Total shareholders’ equity 448.10 69.32 502.19 69.06 660.95 75.68 750.99 82.33

Total liabilities and shareholders’ equity

646.39 100.00 727.18 100.00 873.34 100.00 912.15 100.00

Statement of Comprehensive Income

Statement of

Comprehensive

Income

Proforma

financial

statement


2014 2015 2016 Jan - Jun 2016 Jan - Jun 2017

MB % MB % MB % MB % MB %

Revenues Sales 811.31 99.34 1,117.86 99.50 1,358.84 99.62 680.83 99.59 597.32 99.37 Other income 5.41 0.66 5.67 0.50 5.22 0.38 2.79 0.41 3.80 0.63

Total revenues 816.72 100.00 1,123.53 100.00 1,364.07 100.00 683.62 100.00 601.12 100.00

Expenses Cost of goods sold 397.81 48.71 492.92 43.87 636.52 46.66 319.71 46.77 281.62 46.85 Selling expenses Administrative expenses

137.61 16.85 187.38 16.68 225.16 16.51 98.49 14.41 106.27 17.68 182.28 22.32 129.90 11.56 122.66 8.99 62.00 9.07 61.61 10.25

Total expenses 717.70 87.88 810.21 72.11 984.34 72.16 480.20 70.24 449.50 74.78

Profit before finance

cost and income tax

expenses

99.02 12.12 313.33 27.89 379.73 27.84 203.43 29.76 151.62 25.22

Finance cost 0.61 0.08 0.23 0.02 0.30 0.02 0.12 0.02 0.20 0.03

Profit before income tax expenses

98.41 12.05 313.10 27.87 379.43 27.82 203.30 29.74 151.42 25.19

Income tax expenses 22.42 2.74 67.02 5.96 80.66 5.91 43.92 6.43 29.26 4.87

Net profit for the

period

75.99 9.30 246.09 21.90 298.76 21.90 159.38 23.31 122.16 20.32

Other comprehensive

income

Gains (losses) on

long-term employee

benefit

- - - - - - - - (0.15) 0.03

Tax on item that will

not be reclassified to

profit or loss

- - - - - - - - 0.03 0.01

Other comprehensive income for the period

- - - - - - - - (0.12) (0.02)

Total comprehensive income for the period

75.99 9.30 246.09 21.90 298.76 21.90 159.38 - 122.04 20.30

Profit attributable to: Equity holders of the

Company 67.50 244.69 298.76

159.38 122.16

Non-controlling interests

8.50 1.40 -

- -

Total 75.99 246.09 298.76 159.38 122.16

Total comprehensive income attributable to:

Equity holders of the Company

67.50 244.69 298.76 159.38 122.04

Non-controlling interests

8.50 1.40 - - -

Total 75.99 246.09 298.76 159.38 122.04

Earnings (loss) per

share (Fully Diluted)

(Baht)

38.00 123.04 85.36 79.69 0.21

Earnings (loss) per share (Weighted Average) (Baht)

136.39 123.04 123.56

79.69 0.31

Par Value (Baht) 100.00 100.00 100.00 100.00 1.00

Cash Flow Statement (Unit: Million Baht)

Cash Flow Statement

Proforma

financial

statement


2014 2015 2016 Jan - Jun

2017

Net cash flows from operating activities 116.34 196.14 238.86 113.08

Net cash flows used in investing activities (120.26) 86.77 (38.53) (16.56)

Net cash flows used in financing activities 35.36 (192.52) (141.82) (33.29)

Net increase (decrease) in cash and cash equivalents

31.44 90.39 58.52 63.24

Cash and cash equivalents at the beginning of period

53.00 84.44 174.83 233.35

Cash and cash equivalents at the end of period

84.44 174.83 233.35 296.58

Prepared by Finansia Syrus Securities Public Company Limited Rich Sport Public Company Limited Certified for the correctness of the information memorandum -Ms. Papitch Wongpaitoonpiya- -Mr. Somroj Sirisophana-

................................................................. ............................................................. (Ms. Papitch Wongpaitoonpiya) (Mr. Somroj Sirisophana) Director and Chief Executive Officer Director

rich sport public company limited (“rsp”) head office ... - set

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