jmart 08

General Information

Financial Highlights

Report of the Board of Directors

Directors and Management Biography

Organizational Structure

Good Corporate Covernance Report

Related Transactions

Financial Statements

CSR Activities

4 5 6 7 14 19 25 29 74

C o n t e n t s

4 G e n e r a l I n f o r m a t i o n

General Information JAY MART Public Company Limited Stock code : JMART Head office : 9/121-3, 126-7 UM Tower, 12th Floor, Ramkhamheang road, Suanluang, Suanluang, Bangkok Tel : 0-2308-8000 Fax : 0-2308-8117 Registration No. : 0107545000055 (Former Registration Number 40854500678) Website : www.jaymart.co.th Type of business : Distributing Mobile Phone, Accessory, Providing Space Rental and Utilities Service Registered Capital : 300,000,000 Baht Paid-up Capital : 225,000,000 Baht Comprise of 225,000,000 common shares, Par value 1 Baht per share The Subsidiary Company JMT Network Services Company Limited Head Office : 9/143-145 UM Tower, 14th Floor,Ramkhamheang road, Suanluang, Suanluang,Bangkok Tel : 0-2308-9999, 0-2308-9907 Fax : 0-2308-9900, 0-2308-9941 Registration No : 0105537028181 (Former Registration Number (2) 1014/2537) Website : www.jmtnetwork.co.th Type of business : Debt Collection Business and Non Performing Loan Management Registered Capital : 40,000,000 Baht Paid- up Capital : 40,000,000 Baht Comprise of 400,000 common shares, Par value 100 Baht per share Share Holdings Percentage of JMART : 99.99% Auditor Mr. Somckid Tiatragul, Certified Public Accountant Number 2785 or Mrs. Sumalee Chokdeeanan, Certified Public Accountant Number 3322 Grant Thornton Ltd. 87/1 Capital Tower, All Seasons Place, 18th Floor, Wireless Road, Lumpini, Pathumwan Bangkok 10330 Tel: 0-2654-3330 Fax: 0-2654-3339 Legal Consultant Thep Co., Ltd. 1193 EXIM Building, 11th Floor, Room 1107-1108, Phaholyothin Rd., Samsean-nai, Phayathai, Bangkok 10400 Tel : 0-2278-1683-4

5 F i n a n c i a l H i g h l i g h t s

Financial Highlights Sources : The Company Only

Unit : Million Baht

2008 2004 2005 2006 2007

Financial Perfomance Total Revenues Gross Profit Net Profit Total Assets Total Liabilities Shareholdersʼ Equity Key Financial Ratio Gross Profit Margin Return on Equity (ROE) Return on Asstes (ROA) Earning per share (EPS)

5,429.2 672.5 98.6

1,283.7 887.6 396.1

1.82%

24.90% 7.68% 0.44

5,768.4 615.9 79.6

1,550.7 1,185.8 364.9

1.38%

21.82% 5.13% 0.35

5,061.4 487.0 22.7

1,412.9 1,087.1 325.8

0.45% 6.98% 1.61% 0.12

5,543.1 662.2 119.6

1,151.4 793.5 357.8

2.16%

33.42% 10.39%

0.80

5,249.7

717.9 84.7

1,394.5 1,111.2 283.3

1.61%

29.91% 6.08% 0.56

Sources : Consolidated F/S Unit : Million Baht

2008 2004 2005 2006 2007

Financial Perfomance Total Revenues Gross Profit Net Profit Total Assets Total Liabilities Shareholdersʼ Equity Key Financial Ratio Gross Profit Margin Return on Equity (ROE) Return on Asstes (ROA) Earning per share (EPS)

5,534.6 691.2 97.0

1,371.9 941.6 430.3

1.75%

22.55% 7.07% 0.43

5,897.6 639.2 66.5

1,603.8 1,203.1 400.7

1.13%

16.60% 4.15% 0.30

5,192.0 547.6 39.4

1,505.7 1,131.0 374.7

0.76%

10.51% 2.62% 0.21

5,629.3 692.0 119.6

1,160.1 802.3 357.8

2.12%

33.42% 10.31%

0.80

5,426.3 757.1 84.7

1,409.2 1,125.9 283.3

1.56%

29.91% 6.01% 0.56

Note: ROE: Return On Equity ROA: Return On Assets EPS: Earnings Per Share

(Mr. Ptisanu Pongatcha) Chairman

(Mr. Adisak Sukhumvitaya) Executive Chairman

6 R e p o r t o f t h e B o a r d o f D i r e c t o r s

Report of the Board of Directors 2008 was another important year for Jay Mart Public Company Limited. The Company was allowed to offer new shares to the public. It also performed well on the market, yielding net profits of Baht 97 million, up 45.99% from the previous yearfithis, despite the country’ s intensified political uncertainty and the global economic downturn, both of which adversely affected consumer confidence. In order to accomplish this, the Company changed its strategy to suit current economic conditions by selling mobile phone brands that maximized its gross profit margin. Our strong staff and commitment to quality service have been key to our growth during these troubling economic times. Global economic situation in the rest of 2009 may be unpredictable. Somehow crisis provides opportunity for those who differentiate themselves from competitors and continuously strengthen brand, develop organization, employees and management. Mobile phone industry projects to increase market share and have more branches and product lines, especially “house brand” which is the current hit. †“jFone” has appeared in advertising media and increasingly become widely known and accepted. To make jFone be #1 House Brand, the company shall set a decent working system for all departments to have jFone outstand from competitors, reach customer wants in terms of quality, modern design and complete functions. For debt collection and management, the Company plans to buy more non-performing loans to manage. This should create a growth for the future. The Company plans to provide a more efficient debt collection system that maximizes customer satisfaction. It will also develop its IT system to keep the companyʼ s considerable debt collection database up-to-date. The Company would like to use this opportunity to thank all of its shareholders, customers, business partners, managers, and employees for their part in the continued growth of the business. The Company is committed to the principles of good corporate governance, and to continually enhancing the Companyʼ s competitiveness. The Company will also behave in a socially responsible manner, in the hopes of providing a good role model and contributing to a more humane and sustainable society.

7

Directors and Management Biography

8 D i r e c t o r s a n d M a n a g e m e n t B i o g r a p h y


Mr. Pisnu Pong-acha Chairman of the Board

Mr. Adisak Sukumvitaya Director Selection and Remuneration Committee Chief Executive Officer

Miss Yuvadee Pong-acha Director Managing Director JMT Network Services Co., Ltd.

Mrs. Manee Soonthornvatin Director Executive Committee Chief Information Officer

Mr. Pracha Tansaenee Director Executive committee Chief Financial Officer

Mr. Phisit Dachanabhirom Director (Independent Director) Chairman of Auditor Committee Selection and Remuneration Committee

Mr. Dej Bulsuk Director (Independent Director) Audit Committee

Mr. Suwit Kingkaew Director (Independent Director) Audit Committee Chairman of the Selection and Remuneration Committee

Mr. Pichit Nimkul Director (Independent Director) Audit Committee Selection and Remuneration Committee

Mrs. Nonglak Laksanapokin Executive Committee Chief Operating Officer

Mr. Kittipong Kanokvilairat Executive Committee Chief Marketing Officer


Directors and Management Biography Mr. Pisnu Pong-acha Chairman of the Board Age 54 Education 1994 MBA, Rangsit University Previous Experience 1980-1984 General Manager Chiang Inn Hotel Since 1984 Partner Manager Hahdeng Trading Ltd., Part Mr. Adisak Sukumvitaya Director/Selection and Remuneration Committee/Chief Executive Officer Age 52 Education 1979 B.E. (Economics) Kasetsart University 1981 MBA (Economics) Kasetsart Unitversity Seminar 2008 Director Accreditation Program Thai Institute of Directors Association (69/2008) Previous Experience 1981-1984 Research officer TISCO Securities PCL. 1985-1989 Product Manager Philips Electronics (Thailand) Ltd. Miss Yuvadee Pong-acha Director/Managing Director JMT Network Services Co., Ltd. Age 52 Education 1978 B.E.(Plitical Science) Thammasat University 1980 MBA Bridgeport University, U.S.A. Seminar 2008 Director Accreditation Program Thai Institute of Directors Association (69/2008) Previous Experience 1981-1990 Deputy Vice President TISCO Securities PCL. Money Market 1990-2007 Director, Jaymart PCL. Deputy Chief Executive officer Since 2007 Managing Director JMT Network Services Co., Ltd.


Mrs. Manee Soonthornvatin Director/Executive Committee/Chief Information Officer Age 53 Education 1997 B.E. (Science) Ramkhamhaeng University Seminar 2008 Director Accreditation Program Thai Institute of Directors Association (69/2008) Previous Experience 1993-1997 Manager Support Services Degital Equipment Corporation (Thailand) Ltd. 1997-2000 Business Operation Manager Compaq (Thailand) Co., Ltd.

Mr. Pracha Tansaenee Director/Executive committee/Chief Financial Officer Age 47 Education 1984 B.E. (Business Administration) Ramkhamhaeng University 2004 MBA Ramkhamhaeng University 2007 Ph.D. (Philosophy) Ramkhamhaeng University Seminar 2008 Director Accreditation Program Thai Institute of Directors Association (69/2008) Previous Experience 2002-2002 Chief Operating Officer Yumark Bangkok Co.,Ltd. 1999-2002 Technical Advisor PT. Mobilkom TelekomindoJakarta Indonesia

Mr. Phisit Dachanabhirom Director (Independent Director)/Chairman of Auditor Committee/Selection and Remuneration Committee Age 68 Education 1964 B.E. (Accounting) Thammasat University Seminar 2004 Director Accreditation Program Thai Institute of Directors Association (13/2004) 2005 Audit Committee Program (6/2005) Thai Institute of Directors Association 2006 Director Certification Program Thai Institute of Directors Association (87/2006) Previous Experience 1960-2000 Chief Financial Officer Berli Jucker PCL. Deputy Managing Director Director, Chairman of Audit Committee


Mr. Dej Bulsuk Director (Independent Director)/Audit Committee Age 58 Education 1973 B.E. (Business Administration) Thammasat University Seminar 2004 Director Accreditation Program Thai Institute of Directors Association Previous Experience 1984-2004 Chairman of the Board Mcthai Compamy Limited (McDonaldʼ s Thailand) 2004-2006 Honorary Chairman Mcthai Compamy Limited (McDonaldʼ s Thailand) 2001-2006 Chariman McDonald House Charities Foundation Since 2004 Chief Executive Officer CCC Business Development Co., Ltd. Mr. Suwit Kingkaew Director (Independent Director)/Audit Committee/ Chairman of the Selection and Remuneration Committee Age 58 Education 1974 B.E. (Science) Kasetsart University 1995 MBA Kasetsart University Seminar 2005 Director Certification Program Thai Institute of Directors Association Previous Experience 1974-1980 Plan and Policy Analyst Office of the National Economic and Social Development Board 1980-1992 Sale Manager Charoen Pokphand Industry Co., Ltd. 1992-1994 General Manager Charoen Pokphand Engineering Co., Ltd. 1994-1996 Assistant Vice President C.P. Seven Eleven PLC. 1996-2007 Deputy Vice President C.P. Seven Eleven PLC. Since 2007 Senior Vice President CP All PLC. Mr. Pichit Nimkul Director (Independent Director)/Audit Committee/Selection and Remuneration Committee Age 58 Education 1974 B.E. (Economics) Kasetsart University 1978 MBA (Marketing) The National Institute of Development Administration Previous Experience 1982 Product Manager Berli Jucker PCL. 1982-1997 Senior Vice President Ratchaprasong Shopping Mall Co., Ltd. 2002-2006 Executive Vice President The Mall Co.., Ltd.


Mrs. Nonglak Laksanapokin Executive Committee/Chief Operating Officer Age 48 Education 984 B.E. (Science) Prince of Songkhla University 1987 M.S. (Science) Prince of Songkhla University Semimar 2008 Director Accreditation Program Thai Institute of Directors Association (69/2007) Previous Experience 1994-1997 Operating Manager, Purchase Technic Telecom Co., Ltd. and Humen Resources 1997-1999 Operating Manager, Purchase, M Link Asia Corporation Co., Ltd. Humen Resources and Warehouse

Mr. Kittipong Kanokvilairat Executive Committee/Chief Marketing Officer Age 34 Education 1994 B.E. (Business Administration) Assumption University Seminar 2008 Director Accreditation Program Thai Institute of Directors Association (69/2007) Previous Experience 1995-1996 Marketing Executive NEC Corporation (Thailand) Limited 1996-2002 Account Manager Motorola (Thailand) Co., Ltd. 2002-2006 Chief Marketing Officer Jaymart PLC. 2006-2007 General Manager Thai Samsung Electronics Co., Ltd.

14 O r g a n i z a t i o n a l S t r u c t u r e

Organizational Structure As at 31 December 2008, the Companyʼ s structure comprises of Board of Director and Sub-Committee, the Companyʼ s Committee consists of 4 groups, which are ; 1. Board of Directors 2. Nomination and Remuneration Committee 3. Audit Committee 4. Executive Committee

Board of Directors JAY MART Public Company Limited

Selection and Remuneration Committee

Executive Committee Audit Committee

Chief Executive Officer

Executive Office

Marketing and Sales Information Technology

System Operation Accounting and Finance

Internal Audit

Human Resource Department

15 S h a r e h o l d e r s S t r u c t u r e

JAY MART Public Company Limited List of shareholders as of the book closing date on 31 December 2008

Shareholders Structure

Shareholders No. of shares Percent of total shares

1. Mr. Adisak Sukumvitaya 2. Miss Yuvadee Pong-acha 3. Mrs. Noy Pong-acha 4. Miss Juthamas Sukumvitaya 5. Mr. Ekachai Sukumvitaya 6. Mr. Boonsong Nimsritrakul 7. Mr. songkak Jittrong 8. Mr. Suwit Kingkaew 9. Mrs. Manee Soonthornvatin 10. Mr. Pisnu Pong-acha 11. Mr. Yanyong Akrajindanon 12. Mr. Dej Bulsuk 13. Mr. Phisit Dachanabhirom 14. Mr. Adisak Naknouvatim 15. Mrs. Hattaya Moopradit 16. Miss Wassana Moopradit 17. Miss Somruthai Pong-acha Total

77,667,146 70,552,070 9,750,001

27,313,132 25,400,000 5,000,000 250,000 75,000 75,000 75,000 75,000 75,000 75,000

5,280,000 1,875,151 900,000 562,500

225,000,000

34.52 31.36 4.33

12.14 11.29 2.22 0.11 0.03 0.03 0.03 0.03 0.03 0.03 2.35 0.83 0.40 0.25

100.00

16 B o a r d o f D i r e c t o r s

Board of Directors As of 31 December 2008, the Companyʼ s Board of Directors comprised of 9 members, which are; 1. Mr. Pisnu Pong-acha Chairman of the Board 2. Mr. Adisak Sukumvitaya Director 3. Miss Yuvadee Pong-acha Director 4. Mrs. Manee Soonthornvatin Director 5. Mr. Pracha Tansaenee Director 6. Mr. Phisit Dachanabhirom Chairman of Audit Committee/ Independent Director 7. Mr. Dej Bulsuk Audit committee/Independent Director 8. Mr. Suwit Kingkaew Audit Committee/Independent Director 9. Mr. Pichit Nimkul Audit Committee/Independent Director Mr. Supoj Rojnuntakij is the secretary of the Board of Directors Authorized directors according to the Companyʼ s certificate To bind the Company in any obligation, Mr. Adisak Sukumvitaya or Miss. Yuvadee Pong-acha or Mr. Pisnu†Pong-acha†co-signs with Mrs. Manee Soonthornvatin or Mr. Pracha Tansaenee along with the Companyʼ s seal. Scope of responsibilities of the Board of Director 1. To ensure that the business operation is consistent with the countryʼ s laws, the Companyʼ s objective and regulations, and shareholdersʼ resolution. 2. Authority to appoint the Companyʼ s directors and/or management. The Board may appoint other person to act on behalf of the Board and remain under the Boardʼ s supervision. The Board can cancel, withdraw, change, or amend those authorities as appropriate. 3. Determine goal, guideline, policy, operational plan and the Companyʼ s budget. The Board also supervises the management and other persons who are assigned to ensure that the Boardʼ s policies are carried out. 4. Review, inspect and approve policies, strategies, business plan and major investment projects proposed by the management. 5. Follow up to ensure that operations are inline with business plan and budget. 6. Approve investment in business expansion, merger with other operators or investment in other businesses. 7. Determine policies, business strategies, and supervise the business operations of the Company and/or subsidiaries. 8. Determine companyʼ s regulations. 9. Determine and approve affairs that are crucial to the Company or the activities that may benefit the Company.


Audit Committee As of 31 December 2008, the Companyʼ s Audit Committee comprised of 4 members, which are; 1. Mr. Phisit Dachanabhirom Chairman of Audit Committee 2. Mr. Dej Bulsuk Audit Committee 3. Mr. Suwit Kingkaew Audit Committee 4. Mr. Pichit Nimkul Audit Committee Miss Samorn Khodkham is the secretary of the Audit Committee Scope of responsibilities of the Audit Committee 1. Review that the Company has complete and adequate financial information disclosure. 2. Ensure that the Company has appropriate and efficient internal control and internal audit systems. 3. Ensure that the Companyʼ s operations are consistent with the laws concerning Securities and Securities Exchange Act, the regulations of the Stock Exchange of Thailand, and laws relevant to the Companyʼ s business. 4. Select and propose accounting auditors and their remuneration. 5. Review and approve connected transaction and/or asset acquisition or disposal of the Company or subsidiary. Ensure complete and accurate information disclosure in an event of connected transaction or the transaction that may cause conflict of interests. 6. Act on other business as assigned by the Board and/or deems appropriate by the Audit Committee. 7. Prepare report of Audit Committee and disclose it in the Companyʼ s annual report. 8. Review performance of the Audit Committee 9. Other activities as assigned by the Companyʼ s Board of Directors.

Selection and remuneration committee

As of 31 December 2008, the Companyʼ s selection and remuneration committee comprised of 4 members, which are; 1. Mr. Suwit Kingkaew Chairman of the Board 2. Mr. Adisak Sukumvitaya Committee 3. Mr. Phisit Dachanabhirom Committee 4. Mr. Pichit Nimkul Committee Mr. Suphot Wanna is the secretary of the selection and remuneration committee Scope of responsibilities of the selection and remuneration committee 1. Recruit, select and propose candidates to take director positions and propose to directors and shareholders in the event of vacancy, retirement by rotation and other incidents. 2. Recruit, select and propose candidates to take chief executive officer positions in the event of vacancy and determine succession plan for top-level management. 3. Propose appropriate remuneration policy and remuneration and benefits guideline for the Board members, sub-committee, chief executive officer and management and consistent with the Companyʼ s performance and market condition.


4. Evaluate the Companyʼ s success to determine bonus and annual salary raise. 5. Review salary and benefit structure of the Company. 6. Other activities as assigned by the Companyʼ s Board of Directors. Executive Committee As of 31 December 2008, the Companyʼ s executive committee comprised of 5 members, which are; 1. Mr. Adisak Sukumvitaya Chairman of the Executive Committee 2. Mrs. Manee Soonthornvatin Executive Committee 3. Mr. Pracha Tansaenee Executive Committee 4. Mrs. Nonglak Laksanapokin Executive Committee 5. Mr. Kittipong Kanokvilairat Executive Committee Mr. Supoj Rojnuntakij is the secretary of the Executive Committee Scope of responsibilities of the executive committee 1. Consider and determine business policies, directions, strategies, management structure and principle, as well as follow up on the business progress. 2. Determine business plan, budget and management authority and propose the plan for Board approval. 3. Review, follow-up and act to ensure that the Companyʼ s policy and guideline are carried out efficiently. 4. Determine employeeʼ s remuneration and salary structure. 5. Determine the Companyʼ s corporate structure, and consider executive board member and top management appointment. 6. Review and approve budget allocation as approved by the Board. 7. Other activities as assigned by the Companyʼ s Board of Directors.

19

Good Corporate Governance Report

20 G o o d C o r p o r a t e G o v e r n a n c e R e p o r t

Good Corporate Governance Report To comply with the Code of Best Practices, the Company has determined policies concerning corporate governance to ensure transparency in all level of organization, from operational employees to the Board of Directors. The policies lay a crucial foundation to improve efficiency and effectiveness of business operation that will benefit the Company and shareholders in a long run. Therefore, the Company has completely complied with all 15 Code of Best Practices guideline provided by the Stock Exchange of Thailand. 1. Policies concerning corporate governance The Companyʼ s Board of Directors understands the importance of good corporate governance, internal standard and compliance with the policies of the Stock Exchange of Thailand. The Board appoints Audit Committee to audit and control the Companyʼ s affairs to promote good organization culture and business ethics. The Board is confident that good corporate governance practice will help support the Companyʼ s operation and is one of the key objectives that will maximize shareholdersʼ wealth. The values that the Company expects every directors and employees to keep in mind in every mission are: 1.1 Operate professionally, faithfully and ethically. 1.2 Create harmonious and cooperative workplace. 1.3 Follow good work practices to develop the Company, nations and society. 1.4 Cooperate and be flexible to respond to every situation. 2. Rights and equitable treatments of shareholders From 2002, after the Company has been converted into the public company limited status, the Company has sent meeting invitation along with documents at least 7 days prior to the meeting to comply with the legal requirement. Moreover, the Company has a policy to treat all shareholders on equitable basis. The shareholders can freely select director, vote on agendas and raised any comments and questions in the meeting according to the meeting regulation. Every shareholder will have equal right to receive complete and accurate information on timely basis. Every shareholder will be able to check out the information. Moreover, after the Company is listed in the Stock Exchange of Thailand, the Company plan to increase options for the shareholders by appointing independent directors to receive proxy from the shareholders in case the shareholders cannot attend the meeting. 3. Rights of the stakeholders The Company respects the rights of every stakeholder, whether the internal stakeholders such as employees and management of the Company and subsidiary, or external stakeholders such as customers, trade partners, competitors, creditors, regulators and other related agencies. The Company has complied with relevant laws and regulations to preserve rights of the above stakeholders. The Company has treated employees fairly by offering appropriate compensation; bought products and services from suppliers and acted according to the contract terms; cared and responsible for customers and keep their confidentiality, etc. The Companyʼ s code of ethics also indicates the practices that considered ethical competition that will not seek competitorʼ s confidential information by


unethical and inappropriate means. The Company has a policy to operate business and grow with the community. 4. The shareholdersʼ meeting The Company sends meeting invitation and documents concerning relevant agendas to the shareholders at least 7 days prior to the shareholdersʼ meeting. The Company has a policy to give shareholders equal rights to check on business operation, give suggestion or raise questions. The Company records important questions and comments in the shareholdersʼ meeting minutes. Moreover, after the Company is listed in the Stock Exchange of Thailand, the Company has a policy to appoint independent directors to take proxy from the shareholders in case the shareholders cannot participate in the meeting. The Chairman of the Audit Committee and the Chairman of the Board should participate in every Board meeting and Audit Committee meeting according to the good corporate governance practice. 5. Leadership and vision The Board of Directors comprises of knowledgeable, skilled and experienced personnel in the business that determine policy, vision, strategies, objective, mission, business plan and the Companyʼ s budgets. The Board also ensures that the management performs in accordance with the stated policy efficiently and effectively within the scope of laws, the Companyʼ s regulation and the shareholdersʼ resolution. The Board will perform duties responsibly and prudently according to the Code of Best Practices to maximize economic value and shareholdersʼ value. Moreover, the Company gave importance to the internal audit system, internal audit process, appropriate risk management measures and traceable system to make sure the operation is in compliance with the law, and the Company has good audit system to maximize benefit for the Company. Moreover, the Board of Directors clearly determines the roles and responsibilities of the Board of Directors, Audit Committee, Executive Committee and Chief Executive Officers. 6. Conflict of Interest The Board of Directors and management has prudently and ethically eliminate conflict of interest problem under the scope of good ethical guideline for the best interest of the Company. The guidelines are practiced to create transparency and prevent abusing authority for personal gain. The Company has regulations to prevent directors, management and operational employees to use undisclosed insiderʼ s information of the Company and subsidiary for personal benefit. Moreover, if there is related transaction or transaction concerning asset acquisition or disposal of the Company or subsidiary, the Company will carry out the transaction according to the criteria and procedures stated by the Stock Exchange of Thailand. 7. Business ethics The Company is committed to act ethically. Every director, management and employee has obligation to perform duties with accountability within the scope of laws and personal responsibilities. Everyone must prudently act on any transaction and withhold from any action that may damage the Company and society, despite the action may perceived to benefit the Company. The Company provided director and employee code of conduct


and code of business ethics for the employee to follow. Both codes were approved by the Board of Directors on 20 November 2007. 8. Balance of power The Board of Directors consists of 9 directors, which are 8.1 4 executive directors 8.2 1 non-executive director 8.3 4 independent directors and audit committees, or 44.44% of the Board of Directors. 9. Position aggregation or segregation The Chairman of the Board is not the same person as the Chief Executive Officer to enable balance of power and management audit process. Moreover, more than half of the Board comprises of non-executive director and independent directors to efficiently determine business policy. Moreover, the Company clearly determines scope of responsibilities, duties and responsibilities of the Chief Executive Officer to prevent complete control over the Company. 10. Director and managementʼ s remuneration The Company set up a committee to consider benefits and remuneration for the management staffs ranked Chief Executive Officer or higher. The remuneration committee will consider fair remuneration to benchmark with the Company in the same industry with similar size. The remuneration will also consider the Companyʼ s performance. The remuneration must be in appropriate level to retain staffs depending on their responsibilities. The Company also discloses remuneration paid to directors and managements as determined by the Office of Securities Exchange Commission and the Stock Exchange of Thailand. 11. Board meeting The Company requires that the meeting invitation, along with enclosed documents, must be distributed to the directors for consideration at least 7 days prior to the meeting according to the legal requirement. During 2006, the Board met 6 times and made board-certified meeting minutes for every meeting and keep them for further reference from directors and related persons. 12. Sub-committee The Company appointed Audit Committee to oversee corporate governance activities. The Audit Committee comprises of 4 independent directors with one of them is knowledgeable in account or finance. The Audit Committee has scope of responsibilities and authorities as specified in the Responsibilities and Authorities of Audit Committee. Moreover, the Company also appoints other sub-committee to oversee various businesses, as follow. 12.1 Management Subcommittee has duties to manage general affair, propose annual budget and employee appointment to the Board of Directors. 12.2 Cost Control Subcommittee has duties to control cost as planned in the budget and propose budget to the Board of Directors.


12.3 Disciplinary & Grievance Subcommittee has duties to accept and consider grievance from employee and trade partners and consider any employee fraud or corruption. 12.4 Inventory Subcommittee has duties to control level of inventories to plan and propose the inventories management guideline to the marketing and sales division. 12.5 Information & Networking Security Steering Subcommittee has duties to plan network securities policies and objectives. 13. Internal audit system The Company determined duties, responsibilities and authorities of every operator and management in written. The Company ensures that the resources are used to benefit the Company, there is segregation of authorities of the operator, controller and evaluator to ensure appropriate check and balance. The Company has internal audit department to audit, plan, follow-up and coordinate to ensure that the Companyʼ s core operations are consistent with the determined guideline and are carried out efficiently. The internal audit department is independent and can perform audit responsibilities independently. The internal audit department reports directly to the Audit Committee. In 2008, the Company has hired outsource imternal auditor is Earns & Young office Limited under the supervision of the Audit Committee. In every internal audit activities, the auditor must report findings and suggestions directly to the Audit Committee by having internal audit system plan in the company and also subsidiary company in every quarter. 14. Reports of the Board of Directors The Board of Directors is responsible for the Companyʼ s consolidated financial statements of the Company and subsidiaries and any information appears in the annual report. The Board must provide adequate internal audit measures to ensure accurate, complete and adequate financial information to maintain the Companyʼ s assets, to understand the weakness and to prevent any fraud or any significant abnormal activities. The Board meeting no. 1/2002, dated 29 March 2002, the Board appointed the Audit Committee to responsible for quality of financial reports and internal audit system. 15. Investorsʼ relation After the Company is listed in the Stock Exchange of Thailand, the Company shall establish investorsʼ relation to ensure accurate, complete, transparent and equal information disclosure on the financial information and other information that may affect the Companyʼ s share price. The investorsʼ relation unit will disseminate the Companyʼ s information to investors and public via various channels. However, the Company is preparing corporate governance guideline for the above guideline, which will be reviewed by the Audit Committee before being proposed to the Companyʼ s director for final approval. Then the corporate governance guideline will be applied for every director, management and employee of the Company and subsidiaries.


Regulations concerning the usage of insiderʼ s information 1. The Companyʼ s directors, managements, employees and staffs must preserve the Companyʼ s secret and/or insiderʼ s information. 2. The Companyʼ s directors, managements, employees and staffs must not disclose the Companyʼ s secret and/or insiderʼ s information or make personal or other peopleʼ s gain, whether directly or indirectly, and whether being compensated or not. 3. The Companyʼ s directors, managements, employees and staffs must not trade, transfer or transferred the Companyʼ s securities base on the Companyʼ s secret and/or insiderʼ s information, and/or engage with any activities that use the Companyʼ s secret and/or insiderʼ s information that could potentially cause damage to the Company, whether directly or indirectly. The requirement shall cover spouse and immature children of the Companyʼ s directors, managements, employees and staffs. Violation shall be deemed a serious offense to the Company.

25 R e l a t e d T r a n s a c t i o n s

Related person/

Nature of business/

Relationship

Details of transactions Transaction value

(Baht)

Necessity and rationale

of the transactions 2008

Jan-Dec 2007

Jan-Dec

Mr. Pradit Sukhumvitaya

has following relationship

with Jay Mart Pcl.

- Father of Adisak

Sukhumvitaya, who is

major shareholder and

Executive Chairman

Mr. Pitsanu Pongatcha

has following relationship

with Jay Mart Pcl.

- Chaiman of the Board

- Brother of Yuvadee

Pongatcha

- Holds 0.03% of the

Companyʼ s paid-up

capital.

AEON Thana Sinsap

(Thailand) Public

Company Limited

Operates hire purchase,

credit card, personal

Space rental

Muang District, Yala

Province. The contract

is valid for 3 years

starting 1 October 2006

to 30 September 2009 at

the rate of Baht 20,000

per month. (Cancel

rental contract on 1

December 2007 and

reduce rental rate for

Oct-Nov to Baht 10,000/

month).

Rent warehouse

No.35 Soi Lumsali,

Huamark, Bangkapi,

Bangkok. The contract

is valid for 3 years,

starting 1 July 2007 to 30

June 2010 at a rental

rate of Baht 70,000 per

month.

Space rental

ATM machine at 1st

floor, J-Venue, no. 98/

100-98/159 Moo 13,

Klong Nueng, Klong

-

840,000

185,400

200,000

840,000

-

The Company wish to expand

footprint to Yala Province.

The rented area is at the

heart of the province and

next to train station and in

the populated area. The

rental rate is at market price

when compared to nearby

department stores. The Audit

Committee sees that the

transaction is rational and

fairly executed.

The company does not have

enough space to store

equipment and decorative

items. The warehouse is

located near the Companyʼ s

head office, which make it

convenient for relocation.

The rental rate is charged at

market price when compared

to nearby area. The Audit


transaction is conducted at

market price.

The Company sub-lease area

to Aeon. The rental and

utility rate is charged at

market price when compared

with nearby rental space and

Related Transactions During 2008 and 2007, the Company has engaged in related transactions, all of which are considered rationally to ensure highest benefit for the Company and shareholders, as if the transactions are done with the third person to prevent any potential conflict of interest and to comply with the regulations stipulated by the Stock Exchange of Thailand. Details of the related transactions are as followed.


loan business. The

company is located at

no. 159, 1-2 floor,

Sermmit Tower, Asoke

(Sukhumvit 21), Klongton

Nua, Wattana, Bangkok

10110. It has following

relationship with Jay

Mart Pcl.

- It has co-director with

Jay Mart. Mr. Tej Bulsuk

holds independent

director of Jay Mart

and Independent

director audit

committee of AEON

Thana Sinsap (Thailand)

Pcl.

Luang, Patumthani

Province. The contract

is valid for 1 year (1

Nov 2007-30 Dec 2008)

at Baht 10,000 per

month.

No.99, Room no. 25-C9,

2nd floor,

Ratchadapisek Road,

Ratchadapisek,

Bukkalo, Thonburi,

Bangkok. It is 69 sqm

land with 3-year rental

period (1 May 2005-20

April 2008 at Baht

136,894.60 per month).

Referral fees

This is fee income for

the customers who use

hire purchase business

through Aeon. The

referral fee is collected

from Aeon as incurred.

Debt collection

Debt collection and

document delivery

service.

-

9,584,211

19,460,390

1,642,735

9,269,259

47,718,057

other lessees. The Audit



market price.

Hire-purchase business

through Aeon is normal

business practice which incur

as actual. The Audit



market price.

Debt collection and

document delivery is normal

business of JMT, the

Companyʼ s subsidiary. The

fee is charge at market

price, compared to other

customers.

Related person/

Nature of business/

Relationship


(Baht)



Jan-Dec 2007

Jan-Dec


JMT Network Services

Company Limited

Operates debt

collection business.

Head office is located

at 9/143,144,145 UM Tower,

14th floor,

Ramkamheang,

Suan Luang, Bangkok.

It has following

relationship with Jay

Mart Pcl.

- Jay Mart Pcl. Hold

99.99% of JMTʼ s paid-

up capital.

Sell mobile phone

products.

Collect management

fee for to manage

budget, finance and

accounting. Give

advice for human

resource, organization

communication and IT

function for 1 year.

(1 Jan 2008-31 Dec 2008

at Baht 348,000 per

month).

Rent 11.5 sqm, No. A08

Central Pattaya,

Pattaya 2 Road,

Banglamung, Cholburi

Province for 1 year

from 1 Apr 2008 ›

31 March 2009 at Baht

5,000 per month.

-

3,132,000

35,040

226,654

4,176,000

-

Mobile phone sales is the

Companyʼ s normal business

operation and is done at

market price, which can be

compared to other

customers.

The Company provides

service for JMT as JMT is the

subsidiary. If JMT would

conduct all those functions

by itself, it will be very costly.

The contract is extendable

every year with written

consent made at least

3 months prior to the

expiration. The audit

committee deems that the

transaction is necessary and

rational and should continue

in the future. The audit

committee will regularly

review to ensure that the

contract is carried out

rationally.

Rental and utility rate is

charge reasonably at market

price when compared to the

nearby area and other

lessees. The Audit



similar price with other

customers.

Related person/

Nature of business/

Relationship


(Baht)



Jan-Dec 2007

Jan-Dec


TAS Asset Company

Limited operates

residential business with

head office at 192 Moo

1, Baanpongyang, Mae

Rim Samung, Pongyang,

Mae Rim District,

Chiang Mai Province.

It has following

relationship with

Jay Mart Pcl.

- It has co-director and

shareholder with Jay Mart.

Khun Yuvadee

Pongatcha is director

and major shareholders

of both Jay Mart Pcl.

and TAS.

Coffee Mill Company

Limited operates food

and beverage business

with head office at 990

Abdulrahim, Rama 4

Road, Silom, Bangrak.

The Company has

co director and

shareholder with Jay

Mart Pcl. Khun

Yuvadee Pongatcha is

director and major

shareholders of both

Jay Mart Pcl. and

Coffee Mill Co., Ltd.

Space rental.

A4 Room, 12th floor,

15.4 sqm of UM Tower

with 1 year duration

from 1 Feb 2006-31 Jan

2009 at Baht 3,850 per

month.

Buy assets

46,200

-

46,200

95,926

The Company sub-leased

the remaining space to TAS

Asset. The rental rate is at

market price when

compared with nearby

space and other lessee. The

Audit Committee deems it is

at the same rate charged

with general customers.

The Company wish to use

office equipment to support

business expansion. Those

assets are relatively cheap as

they are second-hand,

which can be compared

with other customers. The

Audit Committee deems that

the transaction is reasonable.

Related person/

Nature of business/

Relationship


(Baht)



Jan-Dec 2007

Jan-Dec

Financial Statements

Responsibilities of the Board toward financial reports Financial statements and consolidated financial statements of Jay Mart Public Company Limited and subsidiary are prepared according to the Boardʼ s policy to have financial statements prepared according to generally accepted accounting standard. The Company selects appropriate accounting policies and practices them consistently and prudently. The Company provides adequate and transparent information disclosure in the notes attached to the financial statements to the best interest of investors and shareholders. The Board has provided appropriate and efficient risk management and internal audit systems to ensure that the disclosed accounting information is accurate, complete and adequate to maintain assets and prevent any fraud or significant abnormality. Therefore, the Board has formed Audit Committee to review accounting policies, quality of financial statements, quality of internal audit system, internal control, risk management system and information disclosure. The comment of Audit Committee can be found in the Report of the Audit Committee as shown in the Companyʼ s annual report. Financial statements and consolidated financial statements have been audited by the Companyʼ s accounting auditor, Grant Thornton Company Limited. During the review process, the Board has provided any necessary data and documents to enable accounting auditors to be able to audit and express comment according to the accounting standard. The accounting auditorʼ s comments are found in the Report of the Accounting Auditor as shown in the Companyʼ s annual report. The Board believes that the Companyʼ s internal audit system are in the satisfactory level and should ensure that the financial statements of Jay Mart Public Company Limited and consolidated financial statements of Jay Mart Public Company Limited and subsidiary for the accounting year ended 31 December 2008 are reliable and are prepared according to the generally accepted accounting principles and any relevant laws and regulations.

Mr. Pisnu††Pong-acha Chairman of the Board

Mr. Adisak Sukumvitaya Chairman of the Executive Committee

29 F i n a n c i a l S t a t e m e n t s


Report of the Audit Committee The Audit Committee of Jay Mart Public Company Limited comprised of 4 independent directors. 1. Mr. Phisit Dachanabhirom Chairman of Audit Committee 2. Mr. Dej††† Bulsuk Audit Committee 3. Mr. Suwit†† Kingkaew Audit Committee 4. Mr. Pichit Nimkul†† Audit Committee During 2008, Audit Committee arranged 5 meetings and has carried out duties according to the relevant guideline, regulation, criteria and law. The committee also determines accounting auditor appointment proposal and remuneration. The Audit Committee has hired Ernst and Young Company Limited to the Companyʼ s internal audit. The audit system cover the Companyʼ s main operations such as shop point of sales system, rental fee collection, bad debt auction and debt collection process. The internal audit system could give assurance that the Company and subsidiaryʼ s operations are effectively monitored and controlled. The Company has employed efficient, adequate and appropriate internal audit system that is suitable for highly competitive business. The Audit Committee believes that the Companyʼ s Board of Directors and management are ethical and determined to achieve the Companyʼ s objective. However, the Audit Committee is determined to continuously improve the Companyʼ s internal audit system. Although there are many factors affecting the Companyʼ s operation, the Audit Committee is confident that the Company could manage those factors effectively to result in long-term business growth.

Mr. Phisit Dachanabhirom Chairman of Audit Committee


Management Discussion and Analysis Overview of the past operation The Company operates IT-related business, both in retail and wholesale, with emphasis on mobile phone and accessories of all major producers, such as Nokia, Motorola, Sony Ericsson and Samsung. The Company is the authorized distributors of Motorola, Sony Ericsson and Samsung. Moreover, the Company is the major retailers of Nokia and major network operators, such as GSM, DTAC, GSM1800, TRUE, etc. The Company distributes products through the Companyʼ s distribution networks. As at 31 December 2008, the Company has 196 distribution points, covering Bangkok, greater Bangkok and major provinces, such as Chiang Mai, Kon Kean, Songkla, Phuket, etc. Moreover, the Company has expand its business to related business, such as managing mobile phone retail space under the name IT Junction, where the Company lease space and sub-lease them to sub-lessees to sell mobile phones. The Company also develops retail space specifically to sell mobile phone and technology products. The Company currently operates retail space near Nava Nakorn Industrial Estates, Patumthani Province, where the Company operates 7,400 square meters of retail space under the department store name J-Venue. Other than the core business, the Company also operate a subsidiary, JMT Network Services Company Limited to collect debt, management non-performing loan, provide legal consultant service and parcel delivery service under brand Mr. Speed. The Company and subsidiary operations can be summarized as follow: Revenue The Companyʼ s total revenue decline from Baht 5,897.58 million in 2007 to Baht 5,534.75 million in 2008, or 6.15% decline. The revenue decline was due to: 1. Sales revenue is the Companyʼ s major revenue contributor, mainly from selling of mobile phone, sim card, prepaid card, or other accessories, which declined from Baht 5,414.79 million in 2007 to Baht 5,054.93 million in 2008, or down Baht 359.86 million or 6.65% as average price of handsets has trended lower. However, the gross margin slightly improve as the Company try to sell mobile phone brands that offers higher gross margin. 2. Total revenue from debt collection and other related business fell from 164.09 million in 2007 to Baht 111.68 million in 2008, or down Baht 52.41 million or 31.94% because debt portfolio has shrunk and commission rate declined. As a result, revenue from debt collection and related business declined. The Company expects the revenue decline could be offset by improved debt collection from debt investment. 3. Rental income is the revenue from retail space management under brand IT Junction and stand-alone retail space under the brand J-Venue. The Company reported rental income of Baht 128.22 million in 2008, which is similar to Baht 128.15 million recorded in 2007.


4. Sales promotion is the revenue the Company earns from the mobile phone producers, which consists of marketing promotion, activity promotion and sales commission income. Sales promotion revenue is increased from baht 150.28 million in 2007 to Baht 210.91 million in 2008, or rising Baht 60.63 million or 40.34%, as the Company was appointed to be authorized distributor of Sony Ericsson and Samsung. So the Company received more promotion income from those two brands. Other income declined from Baht 40.28 million in 2007 to Baht 29.00 million in 2008 or down Baht 11.28 million or 28.00%. The decline is mostly from falling foreign exchange gains as the Company import less products. Cost of sales During 2008 and 2007, the Company reported cost of sales of Baht 4,843.45 million and Baht 5,258.41 million, respectively. The declining cost of sales is inline with declining sales revenue. The cost of sales as a percentage of sales revenue declined from 93.72% of 2007 sales revenue to 92.28% of 2008 sales revenue. Cost of sales comprises of cost of mobile phone and accessory products that the Company purchase from the mobile phone producers or dealers, both local and overseas. Moreover, there is also cost of sales for retail space management, cost of acquiring non-performing loans and expenses for hiring debt collector in the debt collection and management business. Sales and administration expense During 2008 and 2007, the Company reported selling and administration expense (SG&A) of Baht 509.43 million and Baht 486.20 million, respectively, or up Baht 23.23 million or 4.78% from the previous year. The increase is mainly due to rising management and staff expenses, higher rental and service expense for special activities, and rising sales promotion expense, all of which are resulted from business expansion. Net profits During 2008 and 2007, the Company reported gross profits of Baht 691.31 million and baht 639.17, respectively, up 8.16% over the period. The gross profit margin improved from 10.84% during 2007 to 12.49% during 2008 as the Company is focusing on selling mobile phone that offer high gross margin. The Company reported 2008 and 2007 operating profits of Baht 178.52 million and Baht 149.57 million, respectively, up 19.35% over the period. During 2008 and 2007, the Company reported net profits of Baht 97.11 million and Baht66.51 million, respectively, up 45.99% over the period. These translated into earning per share of Baht 0.43 and Baht 0.30, respectively. Financial Status Assets As of 31 December 2008, the Company has total asset of Baht 1,370 million, comprised of Baht 826.64 million of current assets, or 60.25% of total assets and Baht 545.36 million of non-


2008 2007 48.05 (1.88)

(77.22) (31.05)

76.46 26.01

(106.51) (4.04)

current assets, or 39.75% of total assets. When compared to 2007, the Company total assets declined by Baht 231.83 million, or 14.45%. Most of the decline was due to Baht 229.02 million and Baht 2.81 million declines in current and non-current assets, respectively. The major changes in 2008 are as followed: 1. Net receivable was at Baht 135.41 million, or 9.87% of total assets, down from Baht 31.83 million during 2007. The decline was inline with declining sales revenue. For the receivable quality, 89.67% of total receivable are not due or remain outstanding less than 30 days. Only 10.33% remain outstanding longer than 30 days. 2. Net inventories are at Baht 478.17 million, or 34.85% of total assets, down Baht 218.85 million due to efficient inventory management as a result of proper IT system utilization and good market strategy. The inventory is maintained at optimal level to reduce risk from product devaluation. As of 2008, the Companyʼ s inventory day was at 46 days. 3. Restricted cash in bank was at Baht 262.25 million, or 19.11% of total assets, down Baht 14.64 million from the previous year, inline with a declining short-term loan from financial institutes because the company has fixed deposit at the bank as a collateral for overdraft credit from financial institutes. Liabilities As of 31 December 2008, the Company has total liabilities of Baht 941.65 million, down Baht 261.44 million from the previous year or 21.73%. Most of the decline was due to Baht 259.01 million and Baht 2.42 million declines in current and non-current liabilities, respectively. The major changes of the liabilities are as follow: 1. The overdraft and short-term loans from financial institutes was at Baht 778.28 million, down Baht 3.71 million as the Company received more trade credit from mobile phone producers and distributors. 2. Trade payable was at Baht 55.79 million, down 253.26 million as the Company mostly pay for goods with cash which enable the Company to earn more trade discount. Moreover, efficient inventory management enabled the Company to have excess cash to pay up liabilities. Liquidity As at the end of 2008, the Company has cash and equivalent decline by Baht 31.05 million, which can be classified as Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Net cash increase (decrease) For the cash flow from operating activities during 2008, the Company reported Baht 48.05 million of net cash inflow from operating activities, which resulted from declining inventories and receivables. 2007 net cash outflow from operating activities was at Baht 76.46 million, mainly due to rising inventories and receivables.


During 2008, the Companyʼ s net cash outflow from investing activities was at Baht 1.88 million, which resulted from equipment investment for store expansion. While Baht 26.01 million of cash inflow from investing activities during 2007 was due to lower restricted cash as the restriction eased off. For the cash flow from financing activities during 2008, the Company reported Baht 77.22 million of net cash outflow, which resulted from short-term debt repayment and dividend payment. 2007 net cash outflow from financing activities was at Baht 106.51 million, mainly due to short-term debt repayment and dividend payment as well. The current ratio was at 0.92 times during 2008, compared to 0.91 times during 2007. The increase in liquidity ratio was due to lower inventories and receivable, while the trade payable also decline in the greater proportion. Sources of fund The Companyʼ s sources of funds are mainly comprised of shareholdersʼ equity and short-term loans from financial institutes. As of 31 December 2008, the Company has shareholdersʼ equity of Baht 430.35 million, up Baht 29.61 million from 2007 year-end or up 7.39%. The increase was due to Baht 22.11 million increase in un-appropriated retained earnings and Baht 7.5 million increase in legal reserve. During 2008, the Company paid two dividends to shareholders worth a total of Baht 67.50 million, which can be classified into Baht 38.25 million for full year dividend and Baht 29.25 million for interim dividend. The short-term loans from financial institutes as of 31 December 2008 was at Baht 778.28 million down by Baht 3.71 million or 0.47% from the previous year.


Report of the Independent Auditor To the Shareholders of Jay Mart Public Company Limited I have audited the accompanying consolidated balance sheets of Jay Mart Public Company Limited and subsidiary as at 31 December 2008 and 2007, and the related consolidated statements of income, changes in shareholdersʼ equity and cash flows for the years then ended. I have also audited the separate balance sheets of Jay Mart Public Company Limited as at 31 December 2008 and 2007, and the related statements of income, changes in shareholdersʼ equity and cash flows for the years then ended. These financial statements are the responsibility of the Companyʼ s management as to their correctness and completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that my audits provide a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all materials respects, the consolidated financial position of Jay Mart Public Company Limited and subsidiary as at 31 December 2008 and 2007 and their consolidated results of operations and cash flows for the years then ended , and the separate financial position of Jay Mart Public Company Limited at 31 December 2008 and 2007 and its results of operations and cash flows for the years then ended in conformity with generally accounting principles.

MR. SOMCKID TIATRAGUL Certified Public Accountant

Registration No. 2785

Bangkok, Thailand 23 February 2009


Consolidate Financial Statements and Notes to the Financial Statements BALANCE SHEETS JAY MART PUBLIC COMPANY LIMITED AND SUBSIDIARY AS AT 31 DECEMBER 2008 AND 2007

(Unit : Baht) SEPARATE F/S CONSOLIDATED

Notes 2008 2007 2008 2007 ASSETS

CURRENT ASSETS Cash and cash equivalents Trade accounts receivable-net Trade account receivable-related company Inventories-net Accrued income Refundable value added tax Other current assets Total Current Assets

NON-CURRENT ASSETS Investments in accounts receivable-net Restricted deposits with financial institutions Investment in subsidiary company Building and equipment-net Computer softwares-net Leasehold rights and prepaid rent-net Deposits Total Non-Current Assets TOTAL ASSETS

6 7 28 8 9

10

11

12

13 14 15 16

21,652,828 135,406,011

9,079,667

478,165,755 124,796,090

- 57,535,956

826,636,307

71,300,607

262,245,719

- 72,601,617 8,838,126

53,695,293

76,679,913 545,361,275

1,371,997,582

52,700,473 167,233,160 12,417,635

697,017,407 91,084,359 15,991,765 19,210,581

1,055,655,380

38,031,820

276,885,566

- 91,479,693 11,184,688 60,357,077

70,232,648

548,171,492

1,603,826,872

19,600,698 131,688,157

7,813,019

478,165,755 102,301,899

- 52,770,731

792,340,259

-

253,553,165

39,999,300 67,073,925 1,568,828

53,695,293

75,435,703 491,326,214

1,283,666,473

48,769,595 160,288,118

9,491,789

697,017,407 72,614,693 15,991,765 18,192,716

1,022,366,083

-

275,150,000

39,999,300 80,792,745 3,224,278

60,357,077

68,832,252 528,355,652

1,550,721,735

The accompanying notes form an integral part of these financial statements.


BALANCE SHEETS

JAY MART PUBLIC COMPANY LIMITED AND SUBSIDIARY AS AT 31 DECEMBER 2008 AND 2007


Notes 2008 2007 2008 2007 LIABILITIES AND SHAREHOLDERSʼ EQUITY

CURRENT LIABILITIES Bank overdrafts and short-term loans from financial institutions Trade accounts payable Current portion of - Liabilities under financial leases and hire-purchase agreements - Long-term loans Other payable-subsidiary company Accrued expenses Income tax payable Other current liabilities Total Current Liabilities NON-CURRENT LIABILITIES Liabilities under financial leases and hire-purchase agreements-net Long-term loans-net Rental deposit from related company Other non-current liabilities Total Non-Current Liabilities TOTAL LIABILITIES

17

18

19 28 20 25

18

19 28

21

778,281,887

55,793,879

4,401,836

1,572,000 -

31,140,293 16,978,539 11,403,028

899,571,462

3,463,278

11,378,000 804,528

26,432,506

42,078,312

941,649,774

781,994,888

309,056,787

3,449,770

2,552,000 -

35,267,106 14,590,601 11,672,423

1,158,583,575

1,619,100

12,959,000 804,528

29,119,231

44,501,859

1,203,085,434

750,781,887

36,589,467

4,401,836

1,572,000 11,296

25,018,261 16,978,539 10,171,053

845,524,339

3,463,278

11,378,000 804,528

26,432,506

42,078,312

887,602,651

781,994,888

302,345,467

3,449,770

2,552,000 23,100

29,043,835 11,980,927 9,902,999

1,141,292,986

1,619,100

12,959,000 804,528

29,119,231

44,501,859

1,185,794,845



BALANCE SHEETS JAY MART PUBLIC COMPANY LIMITED AND SUBSIDIARY AS AT 31 DECEMBER 2008 AND 2007


Notes 2008 2007 2008 2007 LIABILITIES AND SHAREHOLDERSʼ EQUITY (CONTINUE) SHAREHOLDERSʼ EQUITY Share capital, common share at Baht 1 par value Registered 300,000,000 shares Fully paid-up 225,000,000 shares Retained earnings Appropriated for statutory reserve Unappropriated Total Equity of Companyʼs Shareholders Minority interest in subsidiary company TOTAL SHAREHOLDERSʼ EQUITY TOTAL LIABILITIES AND SHAREHOLDERʼ EQUITY

22

23

300,000,000 225,000,000

30,000,000

175,347,108 430,347,108

700

430,347,808

1,371,997,582

300,000,000 225,000,000

22,500,000

153,240,738 400,740,738

700

400,741,438

1,603,826,872

300,000,000 225,000,000

30,000,000

141,063,822 396,063,822

-

396,063,822

1,283,666,473

300,000,000 225,000,000

22,500,000

117,426,890 364,926,890

- 364,926,890

1,550,721,735



STATEMENTS OF INCOME

JAY MART PUBLIC COMPANY LIMITED AND SUBSIDIARY FOR THE YEARS ENDED 31 DECEMBER 2008 AND 2007


Notes 2008 2007 2008 2007 REVENUES Sales Income from debts collection and others Income from collection of investments in accounts receivable Rental income Sales promotion income TOTAL REVENUES COSTS OF SALES AND SERVICES Costs of sales Costs of debts collection and rent TOTAL COSTS OF SALES AND SERVICES Gross profit Selling and administrative expenses Directors remuneration INCOME FROM SALES AND SERVICES Management fee income Dividend income Other income Income Before Interest Expense and Income Tax Interest expense Income tax NET INCOME FOR THE YEAR Net income attributable to: The Companyʼs shareholders Minority interests in subsidiary NET INCOME FOR THE YEAR BASIC EARNINGS PER SHARE Net income of the Company per share (Baht) Weighted average number of common shares (Shares)

28

28, 31

31 26

28 28

25

5,054,933,887

88,324,089

23,360,132

128,224,707 210,906,140

5,505,748,955

4,664,446,954 178,998,746

4,843,445,700 662,303,255

(509,430,025) (3,360,000) 149,513,230

- -

29,004,953 178,518,183

(35,669,435) (45,742,378) 97,106,370

97,106,370 -

97,106,370

0.43

225,000,000

5,414,785,124 150,156,864

13,930,562

128,145,258 150,280,776

5,857,298,584

5,074,625,338 183,783,889

5,258,409,227 598,889,357

(486,196,078) (3,405,000) 109,288,279

- -

40,283,925 149,572,204

(43,357,885) (39,700,004) 66,514,315

66,514,315 -

66,514,315

0.30

225,000,000

5,054,933,887

-

-

128,259,747 210,906,140

5,394,099,774

4,664,446,954 92,192,181

4,756,639,135 637,460,639

(489,934,205) (3,360,000) 144,166,434

3,132,000 3,199,944

28,740,389 179,238,767

(35,072,300) (45,529,535) 98,636,932

98,636,932 -

98,636,932

0.44

225,000,000

5,415,011,779

-

-

128,145,258 150,280,776

5,693,437,813

5,074,625,338 77,901,802

5,152,527,140 540,910,673

(462,630,202) (3,405,000) 74,875,471 4,176,000

30,396,173 40,409,743

149,857,387

(43,356,574) (26,893,568) 79,607,245

79,607,245 -

79,607,245

0.35

225,000,000



STATEMENTS OF CHANGES IN SHAREHOLDERSʼ EQUITY JAY MART PUBLIC COMPANY LIMITED AND SUBSIDIARY FOR THE YEARS ENDED 31 DECEMBER 2008 AND 2007

(Unit : Baht) Paid-up Share

Capital CONSOLIDATED Balance as at 1 January 2007 Net income for the year Appropriated for statutory reserve Dividend payment Balance as at 31 December 2007 Balance as at 1 January 2008 Net income for the year Appropriated for statutory reserve Dividend payment Balance as at 31 December 2008 SEPARATE F/S Balance as at 1 January 2007 Net income for the year Appropriated for statutory reserve Dividend payment Balance as at 31 December 2007 Balance as at 1 January 2008 Net income for the year Appropriated for statutory reserve Dividend payment Balance as at 31 December 2008

374,727,123

66,514,315 -

(40,500,000) 400,741,438

400,741,438

97,106,370 -

(67,500,000) 430,347,808

325,819,645

79,607,245 -

(40,500,000) 364,926,890

325,819,645

79,607,245 -

(40,500,000) 364,926,890


Notes

24

23

24

24

24

Statutory reserve

Unappropriated retained earnings

Minority interest

Total

700

- -

- 700

700

- -

- 700

-

- -

- -

-

- -

- -

129,726,423

66,514,315 (2,500,000)

(40,500,000) 153,240,738

153,240,738

97,106,370 (7,500,000)

(67,500,000) 175,347,108

80,819,645

79,607,245 (2,500,000)

(40,500,000) 117,426,890

80,819,645

79,607,245 (2,500,000)

(40,500,000) 117,426,822

20,000,000

- 2,500,000

- 22,500,000

22,500,000

- 7,500,000

- 30,000,000

20,000,000

- 2,500,000

- 22,500,000

20,000,000

- 2,500,000

- 22,500,000

225,000,000

- -

- 225,000,000

225,000,000

- -

- 225,000,000

225,000,000

- -

- 225,000,000

225,000,000

- -

- 225,000,000



STATEMENTS OF CASH FLOWS JAY MART PUBLIC COMPANY LIMITED AND SUBSIDIARY FOR THE YEARS ENDED 31 DECEMBER 2008 AND 2007


2008 2007 2008 2007 Cash flows from operating activities :- Net income before income tax Adjustments to reconcile net income to net cash provided from (used in) operating activities :- Loss (gain) on sales of fixed assets Unrealized loss (gain) on foreign exchange rate Gain from disposal of investment in securities held for trading Dividend received from subsidiary company Depreciation and amortization Allowance for doubtful accounts and bad debts Provision for slow-moving and obsolete inventories Interest income Interest expense Cash provided from operating activities before changes in operating assets and liabilities Decrease (increase) in operating assets:- Trade accounts receivable Trade accounts receivable-related company Investment in accounts receivable Inventories Accrued income Refundable value added tax Other current assets Deposits Increase (decrease) in operating liabilities: Trade accounts payable Trade account payable-subsidiary company Accrued expenses Other current liabilities Other non-current liabilities Cash received from operating activities Cash received from interest Cash paid for interest Income tax paid Net cash provided from operating activities

142,848,748

546,198 881,934

-

- 50,104,263

806,292 5,424,335

(6,670,847) 35,669,435

229,610,358

31,020,858 3,337,968

(14,858,528) 213,427,317 (33,567,058) 15,991,765

(34,761,758) (6,447,265)

(272,555,100)

- (4,126,812)

47,481 (2,686,725) 124,432,501

6,526,172 (35,986,311) (46,918,057) 48,054,305

106,214,319

39,899 (2,699,006)

(90,000)

-

51,214,673 1,313,807 4,866,457

(9,191,073) 43,357,885

195,026,961

(23,884,433)

5,014,487 6,118,893

(129,509,381) (36,347,763) (2,705,589) 1,184,981

(2,078,111)

114,939,280 -

10,349,888 64,911

2,301,699 140,475,823 11,186,137

(43,380,836) (31,816,971) 76,464,153

144,166,467

513,942 881,934

-

(3,199,944) 42,208,735

806,292 5,424,335

(6,606,141) 35,072,300

219,267,920

27,793,669 1,678,770

- 213,427,317 (29,542,531) 15,991,765

(34,578,014) (6,603,451)

(266,637,934)

(11,804) (4,025,574)

584,930 (2,686,725) 134,658,338

6,461,466 (35,389,175) (40,531,923) 65,198,706

106,500,813

(104,676) (2,699,006)

(90,000)

(30,396,173) 43,650,477 1,313,807 4,866,457

(9,079,760) 43,356,574

157,318,513

(22,885,763)

3,699,787 -

(129,509,381) (33,374,476) (2,705,589) 1,260,119

(2,098,247)

147,317,088 22,100

8,174,779 1,254,313 2,301,699

130,774,942 11,074,824

(43,379,524) (18,534,017) 79,936,225


STATEMENTS OF CASH FLOWS (CONTINUE) JAY MART PUBLIC COMPANY LIMITED AND SUBSIDIARY FOR THE YEARS ENDED 31 DECEMBER 2008 AND 2007


2008 2007 2008 2007 Cash flows from investing activities:-

Decrease in restricted deposits with financial institutions Proceeds from disposal of fixed assets Cash paid for purchases of fixed assets Cash received from dividend of subsidiary company Cash received from disposal of investment in trading securities Cash paid for investment in subsidiary company Net cash provided from (used in) investing activities Cash flows from financing activities:- Decrease in bank overdraft and short-term loans from financial institutions Repayment of liabilities under financial leases and hire-purchase agreements Repayments of long-term loans Dividend paid Net cash used in financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents-beginning of the year Cash and cash equivalents-end of the year Supplemental cash flows information: Non-cash transactions: Purchases of vehicles under financial lease agreements A subsidiary company purchased investment in accounts receivable from financial institution by installments not affecting the cash flows

14,639,847

4,314,858

(20,832,883) -

-

-

(1,878,178)

(3,713,002)

(3,449,770)

(2,561,000) (67,500,000) (77,223,772)

(31,047,645)

52,700,473 21,652,828

6,246,014

18,410,257

58,951,857

1,622,512

(36,758,359) -

2,190,000

-

26,006,010

(59,410,143)

(3,349,439)

(3,252,000) (40,500,000)

(106,511,582)

(4,041,419)

56,741,892 52,700,473

-

5,269,741

21,596,835

4,182,220

(18,622,830) 3,199,944

-

-

10,356,169

(31,213,002)

(3,449,770)

(2,561,000) (67,500,000)

(104,723,772)

(29,168,897)

48,769,595 19,600,698

6,246,014

-

57,757,953

1,107,103

(30,944,259) 30,396,173

2,190,000

(30,000,000)

30,506,970

(59,410,143)

(3,349,438)

(3,252,000) (40,500,000)

(106,511,581)

3,931,614

44,837,981 48,769,595

-

-

The accompanying notes form an integral part of these financial statements. 42

F i n a n c i a l S t a t e m e n t s


NOTES TO FINANCIAL STATEMENTS JAY MART PUBLIC COMPANY LIMITED AND SUBSIDIARY

31 DECEMBER 2008 AND 2007 1. GENERAL INFORMATION 1.1 The Company registered its incorporation in accordance with the Thai Commerce Code as a limited company in the year 1988. The Company registered the change of its status to a public company and the change of its name to “Jay Mart Public Company Limited” (the Company) on 26 March 2002. The Companyʼ s registered office is located at 9/121-3, 126-7 UM-Tower, 12th Floor Ramkhamhaeng Road, Suanluang Sub-District, Suanluang District, Bangkok. 1.2 The Company is engaged in the trading of mobile phone, computers and related accessories and space rental and public utilities service. The space rental is for periods of 1 to 3 years. In addition, the Company has a subsidiary engaged in the purchase of non-performing accounts receivable for debt collection, and debt collection service. 1.3 As at 31 December 2008 and 2007, the Company has Major shareholders as follows : Name Mr. Adisak Sukumvittaya Miss Yuwadee Pong-acha Miss Jutamas Sukumvittaya Master Aekachai Sukumvittaya 2. FINANCIAL CRISIS The financial crisis experienced by the United States of America over the past year has had far reaching adverse effect on the global economy as evidenced by sharp falls in share prices worldwide, tight squeeze on credit, including interbank lending, failures of foreign large financial institutions and reduced consumer confidence. The crisis has affected substantially business and financial plans of Thailand enterprises and asset values. Despite efforts made by governments of the foreign countries and of Thailand to contain the crisis, and to remedy the financial liquidity of financial institutions and to gain public confidence, it remains uncertain as to when the global economy will return to its normal. These financial statements have been prepared on the bases of facts currently known to the Company, and on estimates and assumptions currently considered appropriate by management. They therefore, could be adversely affected by uncertainties of future events.

Percentage of Shareholding 2008 2007

34.5 31.4 12.1 11.3

34.5 31.4 12.1 11.3

3. BASIS OF FINANCIAL STATEMENTS PREPARATION AND PRINCIPLES OF CONSOLIDATION 3.1 The accompanying financial statements have been prepared in accordance with the generally accepted accounting principles issued under the Accounting Act B.E. 2543, and accounting standards issued under Accounting Profession Act B.E. 2547, and the regulations promulgated by the Securities and Exchange Commission and the Securities Exchange of Thailand concerning the preparation and the disclosure of financial information, under the Securities and Exchange Act B.E. 2535. The financial statements have been prepared on a historical cost basis except as, otherwise, disclosed in the accounting policies. 3.2 The financial statements are officially prepared in Thai language in accordance with statutory requirement with accounting standards enumerated under the Accounting Profession Act B.E. 2547. The translation of these statutory financial statements to other language must be based on the official one. 3.3 During the years 2007 and 2008, the Federation of Accounting Professions has announced the amendments to certain accounting standards, which are effective for the accounting periods beginning on or after 1 January 2008 and 1 January 2009. The Companyʼ s management has reviewed those amended standards and believe that there is no significant impact to the Company. 3.4 The consolidated financial statements include the separate financial statements of Jay Mart Public Company Limited and subsidiary, which are significantly influenced by the Company, as follows : The percentage of subsidiaryʼ s assets and revenues included in the consolidated financial statements of Jay Mart Public Company Limited and subsidiary for the years ended 31 December 2008 and 2007 are as follows : Subsidiary company JMT Network Services Company Limited


Type of business Paid-up share capital (million Baht)

Percentage of Shareholding

Subsidiary company

2008

40

2007

40

2008

99.99

2007

99.99 JMT Network Services Company Limited

Debt collection

Percentage of subsidiaryʼ s total assets to consolidated

total assets

Percentage of subsidiaryʼ s total revenues to

consolidated total revenues 2008

9

2007 6

2008 2

2007 3


3.5 Significant intercompany transactions with subsidiary, included in the consolidated financial statements, have been eliminated. 3.6 In the event when subsidiary ceased the operations, the consolidated financial statements included the results of operations of subsidiary up to the date of liquidation. 3.7 The consolidated financial statements have been prepared with the same accounting policies for the same accounting transactions or accounting events used by the Company and subsidiary. 4. SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies adopted in the preparation of these consolidated and separate financial statements are set out below : 4.1 Cash and cash equivalents Cash and cash equivalents represent cash on hand, cash card and deposits with financial institutions with maturities of less than three months without restriction of usage or obligation. Restricted deposits with financial institutions are presented under non-current assets in the balance sheet. 4.2 Trade accounts receivable Trade accounts receivable are carried at anticipated realizable value. Allowance for doubtful accounts are based on historical collection experiences and the review of the current status of existing receivables at the year end. Bad debts are written off during the year in which they are identified to be uncollectible. 4.3 Investments in accounts receivable Investments in accounts receivable is carried at purchase cost less allowance for impairment (if any). The Company recognized loss on impairment of investment when the anticipate discounted cash flows to their present value are lower than net book value. 4.4 Inventories Inventories are stated at the lower of cost and net realizable value. Cost is determined by the first-in, first-out method. The cost of purchase comprises both the purchase price and costs directly attributable to the acquisition of the inventory, such as import duties and transportation charges, less all attribute discounts and allowances. Net realizable value is the estimate of the selling price in the ordinary course of business, less necessary costs to make inventories ready for sales. The Company set up provision

for obsolete, slow-moving and defective inventories, where necessary, from the consideration of market situation and the aged inventories as follows : Inventory aged between 90-180 days Inventory aged between 181-270 days Inventory aged between 271-365 days Inventory aged over 1 year 4.5 Investment in subsidiary company Investment in subsidiary company is accounted for in the Companyʼ s separate financial statements by the cost method. Such investment refers to investment which the Company has over 50% of the voting right, and over which the Company exercises control. 4.6 Buildings and Equipment Buildings and equipment is stated at cost. Cost is measured by the cash or cash equivalent price of obtaining the asset and bringing it to the location and condition necessary for its intended use. Buildings and equipment are presented in the balance sheet at cost less accumulated depreciation and allowance for loss on impairment of assets (if any). The Company depreciates its buildings and equipment by the straight-line method over their estimated useful lives as follows : Building improvements Office furniture Office equipments Tools and equipments Vehicles The Company and subsidiary, depreciate computer equipment acquired in the year 2006 onward, by the straight-line method over their estimate useful lives of 3 years. Where the carrying amount of an asset is greater than its estimated recoverable amount, the cost is written down immediately to its recoverable amount. Estimated recoverable amount is calculated from the anticipated discounted cash flows to their present value from the continuing use of the assets and the amount obtainable from the sale of the assets less any costs of disposal whichever is higher. 46

F i n a n c i a l S t a t e m e n t s

Allowance for diminution rate 2008

25

25-50 50-75 100

2007

25 25-50 50-75 100

Years

10 5 5

3-5 5


Gains and losses on disposal of equipment are determined by reference to their carrying amount compared to the selling price and are taken into account in statement of income. Expenditures for expansion, renewal and betterment, which result in a substantial increase in an asset current replacement value, are capitalized. Repair and maintenance costs are recognized as an expense when incurred. 4.7 Computer softwares Computer softwares with specific useful lives are recorded at costs less accumulated amortisation and allowance for impairment (if any). Amortisation is charged to the statement of income on a straight-line basis over the estimated useful lives of the computer softwares for 5 years. 4.8 Leasehold rights cost Cost of obtaining the leasehold rights is presented at cost less accumulated amortization and allowance for impairment (if any). Amortisation is charged to the statement of income on a straight-line basis over the estimated useful lives of the leasehold rights for 6 to 26 years. 4.9 Hire purchases payable Liabilities under hire-purchase contracts are presented with the contracted amounts less deferred interest. The hire purchase contracts are for 36-60 months. The fixed assets acquired under hire purchase agreements are recorded as assets of the Company at their cash price. The Company will register the assets in the name of the Company upon the completion of payments. 4.10 Long-term leases-where Company and subsidiary are the lessee Leases of equipment where the Company assumes substantially all the benefits and risks of ownership are classified as finance leases. Finance leases are capitalized at the fair value of leases of assets or estimated present value of the underlying lease payments whichever is lower. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the outstanding finance balance. Future lease payments net of financial charges are recognized as liabilities under financial lease agreements. The interest expense is charged to statement of income over the lease period. Assets acquired under finance lease agreements are depreciated over the useful lives of the assets. Leases of assets under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Payments made under operating leases are charged to statement of income on a straight-line basis over the lease period. When an operating lease is terminated before expiry date of the lease period,


any payment required to be made to the lessor by way of penalty is recognized as an expense in the period in which termination takes place. 4.11 Long-term leases-where Company and subsidiary are the lessor Assets leased out under operating leases are recorded as assets under building and equipment in the balance sheet. The Company calculates depreciation of these assets over their expected useful lives on a basis consistent with other similar assets. Rental income is recognized on a straight-line basis over the lease period. 4.12 Revenue recognition Sales are recognized upon delivery of merchandises to customers, net of sales taxes and discounts. Interest income and other income are recognized on an accrual basis. Rental income and facilities services income are recognized under the term of the agreements. Sales promotion and incentive income is recognized as income when obtained approval from suppliers. Dividend income is recognized upon the declaration of the right to receive. Revenue from investments in accounts receivable is recognized based on the amortized value of investments in receivable for each period by using effective rate. Estimate recoverable amount of investments in accounts receivable is calculated from the anticipated discounted cash flows to their present value. The subsidiary company regularly re-assesses its cash flows from collection of investments in accounts receivable and recognizes loss on impairment immediately, when there is an indication of significant decrease cash flows. In the event of the increase in estimated cash flows, the subsidiary company will re-calculate the new effective rates in investments in account receivable from the period of changes with the reversal of loss on impairment before using the new effective rates. The subsidiary company recognizes service income from debt collection when service is rendered to the customers based on the agreed rates. 4.13 Employee Benefit Salaries, wages, bonuses contraction to the social security and provident fund are recognised as expenses when incurred. 4.14 Provident fund The Company and subsidiary set up a registered provident fund contributed by employees


and by the Company for which assets are held in a separate trustee fund and manages by authorized fund manager. The Company contributions are charged to the statement of income in the period in which they relate. 4.15 Income tax The computation of corporate income tax in compliance with the Revenue Code, is based on the taxable profit for the year after adding back expenses that are not deductible in determining taxable profit and the deduction of exempted income, according to the Revenue Code. 4.16 Foreign currency translation The Company and subsidiary translated foreign currency transactions into Thai Baht for bookkeeping purposes at the exchange rates prevailing at the dates of the transactions. Balances of monetary assets and liabilities, denominated in foreign currency, at the balance sheet date are translated into Baht at the exchange rates at that date. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities, denominated in foreign currencies, are recognized as gain or loss in the statement of income. 4.17 Financial instruments Financial assets in the balance sheet include cash and bank balances, investments and trade accounts receivable. Financial liabilities in the balance sheet include trade accounts payable, financial leases and borrowings. The accounting policies for each particular transaction are disclosed under separate sections associated with each item. 4.18 Segment information Segment information is presented in respect of the Company and subsidiary businesses. The primary format of business segments are based on the Company and subsidiary management and internal reporting structure. 4.19 Dividend payment The Company and subsidiary record dividend payment in the financial statements in the fiscal year in which they are approved by the Shareholders or Board of Directors.


4.20 Basic earnings per share Basic earnings per share is determined by dividing net income for the year by the weighted average number of common shares paid up during the year. 4.21 Provisions for liabilities and expenses, and contingent assets The Company and subsidiary recognize provisions for liabilities and expenses in the financial statements when the Company and subsidiary have present legal or constructive obligations as a result of past events with probable outflow of resources to settle the obligation, and where a reliable estimate of the amount can be made. The contingent asset will be recognized as a separate asset only when the realization is virtually certain. 5. CRITICAL ACCOUNTING ESTIMATES, ASSUMPTION AND JUDGEMENT AND CAPITAL RISK MANAGEMENT 5.1 Critical accounting estimates, assumption and judgments Estimates, assumption and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances as follows : 5.1.1 Impairment of receivables The Company accounts for allowance for doubtful accounts equal to the estimated collection losses that may be incurred in the collection of receivables. The estimated losses are based on uncertainly in the collection and consider of the management. 5.1.2 Allowance for obsolete, slow-moving and defective inventories The Company estimates an allowance for obsolete, slow-moving and defective inventories to reflect impairment of inventories. The allowance is based on consideration of inventory turnovers and deterioration of each category. 5.1.3 Buildings and equipment and intangible assets Management regularly determines the estimated useful lives and residual values for the Companyʼ s buildings and equipment and intangible assets, and will revise the depreciation amortization charge where useful lives and residual values previously estimated have changed or subject to be written down for impairment or no longer in used. 5.1.4 Leases In determining whether a lease is to be classified as an operating lease or financing lease, management is required to use judgment regarding whether significant risk and rewards of ownership of the leased asset has been transferred, taking into consideration terms and conditions of the arrangement. 5.1.5 Impairment of assets The Company consider asset as impaired when there has been a significant or


prolonged decline in the fair value below their cost or where other objective evidence of impairment exists. The determination of what is “significant” or “prolonged” requires management judgment. 5.1.6 Estimated cash flow collection from Investment in account receivable Estimated cash flows from collection in the future of investment is calculated with effective interest rate using historical information of debt collection and payment ability from debtors including consider the collection period from current situation assessed by management. 5.2 Capital risk management The Companyʼ s objectives in the management of capital is to safeguard its ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may issue new shares or issue new shares or sell assets to reduce debts. 6. CASH AND CASH EQUIVALENTS The outstanding balances as at 31 December 2008 and 2007 are as follows :

(Unit : Baht) Cash on hand Undeposited collection from sales Cash cards Bank deposits-current accounts Bank deposits-saving accounts Total Saving deposits with banks bear interest at the floating rate of depository banks.

SEPARATE F/S CONSOLIDATED

2008 2007 2008 2007

10,000 8,970,608

3,030 12,188,846

480,344

21,652,828

10,000 14,328,814

10,650 37,425,819

925,190

52,700,473

- 8,970,608 3,030

10,577,933 49,127

19,600,698

- 14,328,814

10,650 34,371,440

58,691

48,769,595


7. TRADE ACCOUNTS RECEIVABLE The aged balances of accounts receivable as at 31 December 2008 and 2007 are as follows :

(Unit : Baht)

Not yet due Past due Less than 3 months 3-6 months 6-12 months Over 12 months Total Less : Allowance for doubtful accounts Trade accounts receivable-net The Company regularly evaluates risk factor from the collection of receivables. The Company believes that the booked balance of allowance for doubtful accounts is appropriate. 8. INVENTORIES

(Unit : Baht) Inventories Goods in transit Less : Allowance for slow-moving and obsolete inventories Inventories-net During the year, the movements in allowance for slow-moving and obsolete inventories are as follows: Balance as at 1 January 2008 Add : Additional allowance during the year Less : Reversal of allowance for obsolete inventories Balance as at 31 December 2008


2008 2007 2008 2007

92,983,586

39,127,718 2,784,016 640,407

6,724,223 142,259,950 (6,853,939)

135,406,011

137,115,354

24,695,784 1,946,299 1,602,133 9,728,552

175,088,122 (7,854,962)

167,233,160

90,545,509

37,847,941 2,784,016 640,407

6,724,223 138,542,096 (6,853,939)

131,688,157

135,813,876

22,600,630 1,670,317 314,045

7,744,212 168,143,080

(7,854,962)

160,288,118

Ages of receivable

CONSOLIDATED AND SEPARATE F/S

2008

491,570,947 -

(13,405,192)

478,165,755

2007

611,698,762 93,299,501 (7,980,856)

697,017,407

7,980,856 5,424,336

- 13,405,192

(Unit : Baht)


9. ACCRUED INCOME

(Unit : Baht) Accrued income from sales and services Accrued subsidy income for goods Accrued promotion income Others Total Accrued subsidy income for goods and accrued promotion income are recognized after approval of suppliers. A portion of accrued income is for services provided to Government enterprise which collection period is longer because payment process takes some time for billing and delivery of documents. During the year 2008, the subsidiary company has joined meeting with the Vice President of the district debts restructuring department and the officers of the district debts management of Government Enterprise, together with other services providers, whereby such Government enterprise has fixed the criteria to settlement debts to service providers soonest. The Companyʼ s management does not expect any problem from such debts collection in the near future. 10. OTHER CURRENT ASSETS

(Unit : Baht) Others receivable Deferred expense Advance for inventory purchasing Other prepaid expenses Prepaid income tax and withholding tax receivable Others Total As at 31 December 2008, the Company has significant advance for inventory purchasing paid to supplier. This represents advance for the contracted manufacturing of goods for the Company.


2008 2007 2008 2007

36,656,539

32,841,381

53,539,073 1,759,097

124,796,090

37,649,941

34,818,542

16,384,317 2,231,559

91,084,359

14,162,348

32,841,381

53,539,073 1,759,097

102,301,899

15,680,336

34,818,542

16,384,317 5,731,498

72,614,693


2008 2007 2008 2007

7,862,033 3,620,000

28,300,557 7,907,214 3,563,617

6,282,535

57,535,956

4,975,199 3,620,000 2,027,148 1,585,214

-

7,003,020

19,210,581

7,862,033 3,620,000

28,300,557 7,583,940

-

5,404,201

52,770,731

4,975,199 3,620,000 2,027,148 934,408

-

6,635,961

18,192,716

As at 31 December 2008, the subsidiary company has prepaid income tax and withholding tax receivable after tax calculation amounting totalling Baht 1.14 million and Baht 2.42 million, respectively. 11. INVESTMENTS IN ACCOUNTS RECEIVABLE The investments in accounts receivable represent investments which a subsidiary acquired from bidding from credit service companies at discounted values for debt collection. Under the purchase contracts at the discounted values of receivables, the subsidiary company takes all the risks in the collection without recourse. The investments portfolio classified by group of debtors as at 31 December 2008 and 2007 are as follow :

(Unit : Baht) Accounts receivable-Hire purchases Accounts receivable-Personal loans Total During the fourth quarter, the subsidiary company changed estimated cash flows from collection of investments in account receivable from 3 years to 4 years in order to reflect the re-assessed collection period. The subsidiary companyʼ s management has considered the re-assessed period of collection based on the actual collection experience for each quarter comparing with the former estimates and found that the debt collection was more than estimation. The effect from such change in the estimate result of the Company to have more revenue of Baht of 3.65 million in the year 2008. During the year, the Company had movement in investments in accounts receivable as follow :

Balance as at 1 January 2008 Add : Purchase of investment Less : Portion decreased from cash collection, net of income during the year Balance as at 31 December 2008


CONSOLIDATED 2007 2008

9,169 86,481

95,650

3,161,844 68,138,763

71,300,607

9,507 34,917

44,424

3,739,648 34,292,172

38,031,820

No. of contracts Amount No. of contracts Amount

(Unit : Baht)

38,031,820 48,600,179

(15,331,392)

71,300,607


12. RESTRICTED DEPOSITS WITH FINANCIAL INSTITUTIONS As at 31 December 2008 and 2007, the Companyʼ s and its subsidiaryʼ s fixed deposits totalling Baht 262.2 million and Baht 276.9 million, respectively, (the Companyʼ s portions are Baht 253.6 million and Baht 275.1 million, respectively), have been placed with banks as collaterals for bank overdraft facilities and bank guarantees issued by banks on behalf of the Company and its subsidiary. These fixed deposits bear interest at rates of 1.75 to 3.75 percent per annum and 2.00 to 3.00 percent per annum, respectively. 13. INVESTMENT IN SUBSIDIARY COMPANY

(Unit : Baht) Subsidiary company JMT Network Services Co., Ltd. Total 14. BUILDING AND EQUIPMENT

(Unit : Baht)

Cost Building improvement Office furniture Office equipment Tools and equipments Vehicles Assets under installation Total Less : accumulated depreciation Building improvement Office furniture Office equipment Tools and equipment Vehicles Total Building and equipment-net

SEPARATE F/S Paid-up capital Cost Percentage of

shareholding Nature of business

2008 2007 2008 2007 2008 2007

Debt collection

40,000,000 40,000,000 99.99 99.99 39,999,300

39,999,300

39,999,300

39,999,300

CONSOLIDATED 2007 Increase Decrease 2008

18,980,000 116,495,294 112,172,892

2,759,259 31,714,389

- 282,121,834

9,021,999 78,440,929 78,592,859 2,722,208

21,864,146 190,642,141

91,479,693

- 6,030,716 7,408,940

- 10,550,000

650,277 24,639,933

1,898,000 12,871,962 16,457,062

19,703 5,461,148

36,707,875

- 8,758,009 5,293,841

3,200 13,017,193

- 27,072,243

- 6,883,276 4,872,396

3,199 8,503,238

20,262,109

18,980,000 113,768,001 114,287,991

2,756,059 29,247,196

650,277 279,689,524

10,919,999 84,429,615 90,177,525 2,738,712

18,822,056 207,087,907

72,601,617


(Unit : Baht) Cost Building improvement Office furniture Office equipment Tools and equipments Vehicles Assets under installation Total Less : accumulated depreciation Building improvement Office furniture Office equipment Tools and equipment Vehicles Total Building and equipment-net Depreciation for the years ended 31 December 2008 and 2007 of the Company and its subsidiary amounted to Baht 36.7 million and Baht 38.9 million, respectively, (the Companyʼ s portions are Baht 31.5 million and Baht 33.9 million, respectively). As at 31 December 2008 and 2007, a portion of the Companyʼ s and its subsidiaryʼ s equipment had been fully depreciated, but are remained in active use. The gross carrying amounts of such assets before accumulated depreciation are totalling Baht 107.3 million and Baht 96.8 million, respectively, (the Companyʼ s portions are Baht 101.6 million and Baht 92.6 million, respectively). 15. COMPUTER SOFTWARES

(Unit : Baht) Costs Less : Accumulated amortization Computer softwares-net Amortization

SEPARATE F/S 2007 Increase Decrease 2008

18,980,000 115,918,044 89,042,413 2,749,659

29,542,123 -

256,232,239

9,021,999 78,115,381 65,515,815 2,719,373

20,066,926 175,439,494

80,792,745

- 5,964,721 7,285,782

- 10,550,000

650,277 24,450,780

1,898,000 12,744,822 11,496,624

17,783 5,367,130

31,524,359

- 8,758,009 4,608,526

3,200 13,017,193

- 26,386,928

- 6,883,276 4,351,973

3,199 8,503,239

19,741,687

18,980,000 113,124,756 91,719,669 2,746,459

27,074,930 650,277

254,296,091

10,919,999 83,976,927 72,660,466 2,733,957

16,930,817 187,222,166

67,073,925

CONSOLIDATED F/S 2007 Increase Decrease 2008

47,285,027 (36,100,339) 11,184,688

6,311,165

2,438,965 (4,508,139)

2,659,100 2,381,712

47,064,892 (38,226,766)

8,838,126

4,508,139


(Unit : Baht) Costs Less : Accumulated amortization Computer softwares-net Amortization 16. COSTS OF LEASEHOLD RIGHTS AND PREPAID RENT

(Unit : Baht) Costs of leasehold rights Less : Accumulated amortization Costs of leasehold rights-net As at 31 December 2008 and 2007, the costs of leasehold rights pre-payments and the outstanding leasehold right consisted of :

(Unit : Baht)

SEPARATE F/S 2007 Increase Decrease 2008

34,419,210 (31,194,932)

3,224,278

3,744,720

418,064 (1,796,126)

2,659,100 2,381,712

32,178,174 (30,609,346)

1,568,828

1,796,126

CONSOLIDATED AND SEPARATE F/S 2007 Increase Decrease 2008

76,170,577 (15,813,500) 60,357,077

- (6,661,784) (6,661,784)

- - -

76,170,577 (22,475,284) 53,695,293

Outstanding Costs of leasehold Right Prepayments after amortisation

Costs of leasehold Rights and Prepaid Rent

Leasehold and Rental Amortisation per month

Periods

2007 2008 25 years 23 years 26 years 18 years 21 years 25 years 6 years

12 years 20 years

Total

15,240 17,174 45,641 34,722 17,857 83,500

188,197 12,633 8,125

4,571,843 4,740,000

14,240,000 7,500,000 4,500,000

25,050,000 15,526,174 1,819,125 1,949,900

2,518,647 3,334,092 9,628,012 4,380,421 2,854,860

22,044,000 5,589,239 1,591,112 1,754,910

53,695,293

3,449,650 3,540,179

10,175,704 4,787,661 3,068,299

23,046,000 8,694,474 1,742,705 1,852,405

60,357,077

Leasehold rights of a commercial buildings have been assigned to the bank as collaterals for long › term loans referred to in Note 19 to the financial statements.


17. BANK OVERDRAFT AND SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS

(Unit : Baht) Bank overdraft Promissory notes from financial institutions Total As at 31 December 2008 and 2007, promissory notes payable bear interest at the rates of 4.95 to 5.65 percent and 4.50 to 5.20 percent per annum, respectively. As at 31 December 2008 and 2007, the Company has credit facilities covering liabilities under trust receipts, letters of credit, forward exchange contracts and other credits totalling Baht 1,463.7 million and Baht 1,424.9 million, respectively, with interest rates ranging from 4.95 to 5.65 percent and 4.50 to 5.20 percent per annum, respectively. As at 31 December 2008 and 2007, the Company and subsidiary have bank overdraft credit lines totalling Baht 21.0 million (the Company’ s portion are Baht 19.0 million). Short - term loans from financial institutions are collateralized mostly by the pledges of fixed deposits of the Company and a subsidiary, and the personal guarantees of the two directors, with a condition to withdraw the guarantees of the two directors after the listing in the Stock Exchange of Thailand. During the years 2008 and 2007, the interest rates on bank overdraft are 4.75 to 7.0 percent per annum and 4.25 to 7.125 percent per annum, respectively. 18. LIABILITIES UNDER FINANCIAL LEASE AND HIRE-PURCHASE AGREEMENTS

(Unit : Baht) Liabilities under financial lease and hire-Purchase agreements Due within one year Due over 1 year but not later than 5 years Total Less : Deferred interest Less : Current portion Balance due after one year The Company entered into financial lease and hire-purchase agreements for the leases of vehicles for use in its operations, with repayment schedules of 36 to 60 months.

SEPARATE F/S CONSOLIDATED 2008 2007 2008 2007

313,948 777,967,939

778,281,887

- 781,994,888

781,994,888

313,948 750,467,939

750,781,887

- 781,994,888

781,994,888


2008 2007 2008 2007

4,710,552 3,594,682

8,305,234 (440,120) 7,865,114

(4,401,836) 3,463,278

3,850,428 1,629,396

5,479,824 (410,954) 5,068,870

(3,449,770) 1,619,100

4,710,552 3,594,682

8,305,234 (440,120) 7,865,114

(4,401,836) 3,463,278

3,850,428 1,629,396

5,479,824 (410,954) 5,068,870

(3,449,770) 1,619,100


19. LONG-TERM LOANS As at 31 December 2008 and 2007, the Company and subsidiary have long - term loans as follow :

(Unit : Baht) Loans carrying interest at fixed deposit rate + 2.5 per annum, with principal repayment of Baht 131,000 per month (exclusive of interest), from February 2006 to February 2018 Loans carrying interest at fixed deposit rate + 2.5 per annum, with principal repayment of Baht 140,000 per month (exclusive of interest) from February 2006 to February 2009 Total Less : Current portion Long-term loans-net of current portion The long-term loans are collateralized by the mortgages of the leasehold rights on a commercial buildings and the personal guarantees of the Companyʼ s directors. During the year, the Company paid interest on long - term loans at the interest rates of 4.75-5.25 percent per annum. The movements in long-term loans as at 31 December 2008 are as follows :

(Unit : Baht)

Balance as at 1 January 2008 Add : Addition during the year Less : Repayment during the year Balance as at 31 December 2008


2008 2007 12,950,000

-

12,950,000 (1,572,000) 11,378,000

14,522,000

989,000

15,511,000 (2,552,000) 12,959,000

15,511,000 -

(2,561,000) 12,950,000


20. ACCRUED EXPENSES

(Unit : Baht) Accrued bonuses Accrued other services expenses Accrued rental and utilities expenses Accrued property tax Accrued sale promotion expenses Payables for equipment and supplies Accrued commission Others Total 21. OTHER NON-CURRENT LIABILITIES

(Unit : Baht) Tenant rental deposits Deposits from employees Others Total Tenant deposits are deposits for possible damages. The Company will repay for those deposits upon the termination of the rent. 22. SHARE CAPITAL At the Extraordinary Shareholder Meeting No. 3/2007 held on 27 September 2007, the shareholders of subsidiary passed a resolution to increase its authorized share capital from Baht 20 million (divided into 200,000 common share at Baht 100 par value) to Baht 40 million (divided into 400,000 common share at Baht 100 par value). The subsidiary company received the full amount from its shareholders and registered the increase in share capital with the Department of Business Development on 28 September 2007. At the Extraordinary Shareholder Meeting No. 2/2007 held on 29 November 2007, the shareholders pass a resolution to increase its authorized share capital from Baht 225 million (divided into 225 million common shares at Baht 1 par value) to Baht 300 million (divided into 300 million common shares at Baht 1 par value) and distribute as follows :


2008 2007 2008 2007

230,000 4,209,317 7,450,888 3,341,403 1,692,995 3,668,408

4,400,900 6,146,382

31,140,293

7,689,320 4,762,087 5,339,850 2,167,512 2,022,063 1,615,358

3,612,546 8,058,370

35,267,106

230,000 1,719,098 7,450,889 3,341,403 1,692,995 1,696,055

3,000,000 5,887,821

25,018,261

5,905,473 2,176,581 5,339,850 2,167,512 2,022,063 1,375,582

2,288,365 7,768,409

29,043,835


2008 2007 26,236,266

188,240 8,000

26,432,506

28,910,001 202,730

6,500 29,119,231


1) 60 million common shares are to be offered to the public. 2) 7.5 million common shares are to be offered to directors, management and employees. 3) 7.5 million common shares are to be offered to patronage. As at 31 December 2008, the Company does not offered such shares for distribute to other groups. 23. STATUTORY RESERVE Under the Public Companies Act B.E. 1992, the Company is required to set aside as a statutory reserve at least 5 percent of its net income, after deduction of deficit (if any), until the reserve reaches 10 percent of the registered capital. The reserve is not distributable for dividends. During the year 2008, the Companyʼ s management proposed appropriation for additional statutory reserve of Baht 7,500,000 to bring the reserve to 10 percent of the authorised share capital. The Company, therefore, is not required to make more appropriation of retained earnings to statutory reserve in the future. 24. APPROPRIATION OF NET INCOME The Company At the Meeting of the Company Shareholders No.1/2007 on 26 April 2007, the shareholders passed a resolution to appropriate cash dividend from net income after deduction of tax for the year 2006 at Baht 0.09 per share for 225,000,000 shares for a total amount of Baht 20.25 million At the Meeting of the Companyʼ s Committee No. 4/2007 on 31 August 2007, the shareholders passed a resolution to appropriate cash dividend from the year 2007 net income at Baht 0.09 per share for 225,000,000 shares for a total amount of Baht 20.25 million. At the Meeting of the Company Shareholders No.1/2008 on 17 April 2008, the shareholders passed a resolution to appropriate cash dividend from net income after deduction of tax for the year 2007 at Baht 0.17 per share for 225,000,000 shares for a total amount of Baht 38.25 million At the Meeting of the Companyʼ s Committee No. 4/2008 on 7 August 2008, the shareholders passed a resolution to appropriate cash dividend from the year 2008 net income at Baht 0.13 per share for 225,000,000 shares for a total amount of Baht 29.25 million. Subsidiary Company At the Meeting of the Subsidiary Companyʼ s Shareholders on 26 April 2007, the shareholders passed a resolution to appropriate cash dividend from net income after deduction of tax for the year 2006 in a total amount of Baht 10 million. At the Meeting of the Subsidiary Companyʼ s Committee No. 3/2007 on 31 August 2007, the shareholders passed a resolution to appropriate cash dividend from the first half year 2007


net income at Baht 169 per share for 100,000 shares for a total amount of Baht 16.9 million and to make additional appropriation as statutory reserve during the period of Baht 2.0 million. At the Meeting of the Subsidiary Companyʼ s Committee No. 4/2007 on 18 December 2007, the shareholders passed a resolution to appropriate cash dividend from the year 2007 net income at Baht 8.75 per share for 400,000 shares for a total amount of Baht 3.5 million. At the Meeting of the Subsidiary Companyʼ s Committee No. 3/2008 on 23 May 2008, the shareholders passed a resolution to appropriate cash dividend from net income after deduction of tax from the first quarter of 2008 at Baht 8 per share for 400,000 shares for a total amount of Baht 3.2 million. 25. INCOME TAX

(Unit : Million Baht) Net income Income tax Net income before income tax Add Items not yet allowable as expenses under Revenue Code Less Dividend income from subsidiary company and tax exempted income Net taxable income Income tax for the year 30 percent Prepaid income tax and withholding tax receivable Accrued income tax As at 31 December 2008, the subsidiary company prepaid income tax and withholding tax receivable was more than income tax of Baht 3.56 million as presented in part of “Other current assets”. 26. DIRECTOR REMUNERATION Director remuneration represents the benefits paid to the Companyʼ s directors in accordance with Section 90 of the Public Companies Act, exclusive of salaries and related benefits payable to executive directors. The director remuneration has been approved at the Company Annual General Meeting.


2008 2007 2008 2007

97.11 45.74

142.85 11.53

(1.90)

152.48 45.74

(28.76)

16.98

62.36 39.70

102.06 32.88

(2.61)

132.33 39.70

(25.11)

14.59

98.64 45.53

144.17 11.46

(3.87)

151.76 45.53

(28.55)

16.98

79.61 26.89

106.50 16.15

(33.00)

89.65 26.89

(14.91)

11.98

For the years ended 31 December


27. PROVIDENT FUND On 30 April 2002, the Company and subsidiary and their employees jointly established a provident fund plan as approved by the Ministry of Finance in accordance with the Provident Fund Act B.E. 2530. The fund is contributed to by employees and the Company and its subsidiaries at the rate of 3 percent of salaries. The provident fund will be paid to the employee upon termination of employment in accordance with the rules of the fund. The fund is managed by TISCO Asset Management Company Limited. During the years ended 31 December 2008 and 2007, the Company and subsidiary contributed a total of Baht 1.4 million and Baht 0.9 million (the Companyʼ s portion : Baht 1.3 million and Baht 0.8 million), respectively, to the fund. 28. RELATED PARTY TRANSACTIONS During the year, the Company had significant business transactions with its related persons and parties (related by way of common shareholding and/or management). Such transactions have been concluded on the terms and bases determined by the Company and related parties, the bases of which may be different from the bases used for transactions with unrelated parties. Significant transactions with related parties are summarised below :

(Unit : Million Baht) Sales Rental income Sale promotion income Debt collection income Messenger services income Management fee income Dividend income Office and land rental Directors remuneration During the year 2008, the Company gave the waiver for the collection of management fee for 3 months to the subsidiary company totalling Baht 1.04 million. As at 31 December 2008 and 2007, the outstanding balances of the related party transactions are separately shown in the balance sheet as follows :

Transactions with related parties

Pricing policy CONSOLIDATED SEPARATE F/S

2008 2007 2008 2007

Market price Market price As agreed by suppliers Market price Market price Baht 0.35 million per month Based on net profit Market rate As approved at Shareholder Meeting

- 0.2 9.6

17.6 1.9 -

- 0.8 3.4

- 1.6 9.3

45.1 2.5 -

- 1.0 3.4

- 0.2 9.6 - -

3.1

3.2 0.8 3.4

0.2 1.6 9.3 - -

4.2

30.4 1.0 3.4


(Unit : Baht) Trade account receivable-related company AEON Thanasin PCL Past due less than 30 days Total Other payable-subsidiary company JMT Network Services Company Limited Total Rental deposit from related company AEON Thanasin PCL Total 29. COMMITMENTS As at 31 December 2008, the Company and its subsidiary had outstanding commitments as follows : Commitments with related parties 29.1 The Company has agreements to provide management, accounting, tax filing and debt collection services for JMT Network Services Company Limited (subsidiary). The subsidiary can renew the agreement on an annual basis, with advance written notice at least 3 months before the expiration of the agreements. The contract period is for 1 year with service charge of Baht 348,000 per month. 29.2 The Company entered into a building space rental contract with a director for a godown rental with a monthly rental of Baht 70,000 for 3 years started 1 July 2007. Commitments with third parties 29.3 The Company has outstanding commitments in respect of the proposed listing of its shares for trading on the Stock Exchange of Thailand (SET) by way of an initial public offering (IPO). Under the terms of the agreement, the Company is committed to pay the following service fees : 29.3.1 An advisory fee of Baht 1 million by installments. This will be initially paid at Baht 0.2 million as first installment upon the signing of the agreement on 25 July 2007 with subsequent 5 monthly installments of Baht 0.13 million. The remaining amount of Baht 0.15 million is payable after obtaining approval for its listing of shares from the Securities and Exchange Commission.

CONSOLIDATED SEPARATE F/S 2008 2007 2008 2007

9,079,667

9,079,667

-

-

804,528 804,528

12,417,635

12,417,635

-

-

804,528 804,528

7,813,019

7,813,019

11,296

11,296

804,528 804,528

9,491,789

9,491,789

23,100

23,100

804,528 804,528


29.3.2 An underwriting and guarantee fees at 3.0 percent of the funds obtained from the listing, or Baht 3.0 million, whichever is higher. The Company accounted for such fees as deferred expense. This will be deducted from cash proceeds from sales of share capital on the initial public offering after listing in the Stock Exchange of Thailand. 29.3.3 The Company has outstanding commitments of approximately Baht 54.6 million arising from outstanding bank guarantees issued by banks on behalf of the Company in respect of certain performance bonds as required in the ordinary courses of businesses of the Company. 29.3.4 The Company has outstanding commitments in respect of service agreements which are payable in the future totaling approximately Baht 2.5 million. 29.3.5 The Company and its subsidiary have commitments under long-term lease and service agreements, mainly relating to the rental of space for retail shops, office buildings and warehouses, with minimum future rental and service fees payable under the agreements (not include the changes that may incur upon renewal) as follows :

(Unit : Million Baht) Not over 1 year Over 1 year but not over 5 years Over 5 years Total 30. FINANCIAL INSTRUMENTS Credit risk As the Companyʼ s customers are represented by individual persons and retailers from trading business, the Company provides credit terms for certain customers with stable financial status. Whereas most of customers of subsidiary company are represented by financial institutions and companies with stable financial status. The Company and subsidiary company, therefore do not expect the significant loss from collection of credit granting. Interest rate risk The interest rate risk is the risk that future movements in market interest rates will affect the results of the Companyʼ s and its subsidiaryʼ s operations and their cash flows. The Companyʼ s and its subsidiaryʼ s exposure to interest rate risk relates primarily to their deposits with financial institutions, bank overdrafts and loans as follows :

Year CONSOLIDATED SEPARATE F/S 140.7 222.9 216.4 580.0

137.6 221.9 216.4 575.9


(Unit : Million Baht) Financial assets/ liabilities Cash and cash equivalents Restricted deposits with financial institutions Bank overdrafts and short-term loans from financial institutions

(Unit : Million Baht) Financial assets/ liabilities Cash and cash equivalents Restricted deposits with financial institutions Bank overdrafts and short-term loans from financial institutions

(Unit : Million Baht) Financial assets/ liabilities Cash and cash equivalents Restricted deposits with financial institutions Bank overdraft and short-term loans from financial institutions

CONSOLIDATED As at 31 December 2008

Floating rate Fixed rate Non-interest Total

- -

778

-

262

-

21 -

-

21

262

778

CONSOLIDATED As at 31 December 2007


1 -

782

-

277

-

52 -

-

53

277

782

SEPARATE F/S As at 31 December 2008


- -

751

-

254

-

20 -

-

20

254

751


(Unit : Million Baht) Financial assets/ liabilities Cash and cash equivalents Restricted deposits with financial institutions Bank overdraft and short-term loans from financial institutions Financial instruments as of 31 December 2008 and 2007 with fixed interest rates, and the period of time from the balance sheet date to their maturity dates are as follows :

(Unit : Million Baht)

Financial assets/ liabilities Restricted deposits with financial institutions Bank overdrafts and short-term loans from financial institutions

(Unit : Million Baht) Financial assets/ liabilities Restricted deposits with financial institutions Bank overdrafts and short-term loans from financial institutions

SEPARATE F/S As at 31 December 2007


- -

782

-

275

-

49 -

-

49

275

782

CONSOLIDATED As at 31 December 2008 Interest Rate

At call 1-6 months

6-12 months

Total

-

-

262

778

-

-

262

778

1.75%-3.75%

4.75%-7.00%

CONSOLIDATED As at 31 December 2007 Interest Rate

At call 1-6 months

6-12 months

Total

-

-

277

782

-

-

277

782

2.00%-3.00%

4.25%-7.125%


(Unit : Million Baht) Financial assets/ liabilities Restricted deposits with financial institutions Bank overdrafts and short-term loans from financial institutions

(Unit : Million Baht) Financial assets/ liabilities Restricted deposits with financial institutions Bank overdrafts and short-term loans from financial institutions The Company and subsidiary do not use any derivative financial instruments to hedge risks. The details of long-term loans are presented in Note 19 to the financial statements. Since such long-term loans are immaterial, the Company does not use any financial instrument to hedge interest rate risk. Foreign currency risk As at 31 December 2008, the Company has forward exchange contracts to hedge its exchange risk for future payment for the purchase of inventories as follow : Liabilities Liabilities in foreign currency As at 31 December 2008 and 2007, the Company has unhedged assets and liabilities in foreign currency as follows :

SEPARATE F/S As at 31 December 2008 Interest Rate

At call 1-6 months

6-12 months

Total

-

-

254

751

-

-

254

751

1.75%-3.75%

4.75%-7.00%

SEPARATE F/S As at 31 December 2007 Interest Rate

At call 1-6 months

6-12 months

Total

-

-

275

782

-

-

275

782

2.00%-3.00%

4.25%-7.125%

CONSOLIDATED AND SEPARATE F/S Amount

(Thousand USD) Exchange rate

(Baht) Due

131

33.87-35.76

March 2009


(Unit : Thousand US Dollar) Assets in foreign currency Liabilities in foreign currency Fair values of financial instruments A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing parties in an armʼ s length transaction. The fair value is determined by reference to the market price of the financial instrument or by using an appropriate valuation technique, depending on the nature of the instrument. The following methods and assumptions are used to estimate the fair value of each class of financial instruments. Cash and cash equivalent-the carrying values approximate their fair values due to the relatively short-term maturity of these financial instruments. Long-term loans-the carrying values are not materially different from the fair value since the loans carry interest at the rates close to market rates.

2008 2007

218 -

615 3,318


31. EXPENSE BY NATURE

( Unit : Baht ) Salary and other employee compensation expenses Depreciation Amortization Provision for obsolete inventories Promotion expense Rental expenses Changes in finished goods

SEPARATE F/S CONSOLIDATED 2008 2007 2008 2007

193,416,792

36,707,874

8,062,443

5,424,335

44,386,424

192,860,991

(213,427,317)

188,163,439

38,938,185

8,971,262

4,810,936

31,864,823

176,829,257

129,453,859

150,348,399

31,524,359

5,352,676

5,424,335

44,386,424

188,151,027

(213,427,317)

138,863,320

33,940,435

6,404,817

4,810,936

31,864,823

170,403,405

129,453,859


32. FINANCIAL INFORMATION BY SEGMENT The Companyʼ s segmental financial information, divided into the trading business, debt collection business, office rental business and others as presented in the consolidated financial statements for the years ended 31 December 2008 and 2007, are as follows :

(Unit : Million Baht) Revenues Cost of sales Operating profit Selling and administrative expenses Interest expense Income tax Net income for the year Trade accounts receivable-net Property and equipment-net Computer softwares-net Leasehold rights and prepaid rent-net Other assets Total Assets

CONSOLIDATED 2008

Total Elimination Other Rental business

Debt collection business

Trading business

5,055

(4,664)

391

129

54

2

42

960

1,187

112

(87)

25

4

5

7

-

112

128

128

(92)

36

3

13

-

12

29

57

247

-

247

-

-

-

-

40

40

(7)

-

(7)

-

-

-

-

(40)

(40)

5,535

(4,843)

692

(513)

(36)

(46)

97

136

72

9

54

1,101

1,372


(Unit : Million Baht) Revenues Cost of sales Operating profit Selling and administrative expenses Interest expense Income tax Net income for the year Trade accounts receivable-net Property and equipment-net Computer softwares-net Leasehold rights and prepaid rent-net Other assets Total Assets

CONSOLIDATED 2007

Total Elimination Other Rental business

Debt collection business

Trading business

5,415

(5,074)

341

157

62

3

43

1,178

1,443

164

(106)

58

7

11

8

-

71

97

128

(78)

50

3

19

-

16

26

64

227

-

227

-

-

-

-

44

44

(36)

-

(36)

-

-

-

-

(44)

(44)

5,898

(5,258)

640

(490)

(43)

(40)

67

167

92

11

59

1,275

1,604


33. PRESENTATION Certain accounts in the financial statements for the year ended 31 December 2007 have been reclassified to conform with the current year classification, with no effect on previously reported net income or shareholdersʼ equity. 34. SUBSEQUENT EVENT At the meeting of the Companyʼ s board of directors No. 3/2008 on 23 February 2009, the board passed a resolution to appropriate cash dividends from net income after deduction of tax for the year 2008 at Baht 0.17 for 225,000,000 shares for a total amount of Baht 38.25 million. 35. APPROVAL OF FINANCIAL STATEMENTS These financial statements have been approved by the Companyʼ s Board of Directors on 23 February 2009.

C S R A c t i v i t i e s As part of the society, the Company believe that corporate social responsibility (CSR) activities are the crucial part of the business operation. Therefore, the Company has regularly supports and participates in various CSR activities that benefit societies. During 2008, the Company has launched following CSR activities: 1. Promote “Call Donʼ t Drive” campaign with the National Police Department. 2. Donate blankets to hill tribe villagers at Huay Rai Children Development Center at Huay Rai Village, Moo 6, Tambol Mae Rai, Amphur Mae Jan, Chiang Rai. 3. Donate scholarship and necessities to 400 orphans and unfortunate children at Voradith Church, Amphur Pakmok, Angthong Province. 4. Support shirt selling campaign to raise fund to help Blind Foundation, Kon Kaen Province. 5. Support classic CD project to publicize His Majesty the Kingʼ s genius in music talent during His Majestyʼ s birthday in 2008. 6. Support “Time is value for Life” watch campaign in honor of His Majesty the King, and donate profit from watches sold to Red Cross Foundation. The Company believe that the determination to operate business and activities in consistent with CSR policy will help the Company sustainably grow together community and society. This policy will develop youth to grow into future of the country. The Company is determined to develop quality of life for Thai youth and society.

74 C S R A c t i v i t i e s


Her Royal Highness Princess Sirindhorn graciously received stationary and blackboards from JAY MART to donate to Border Patrol Police Schools nationwide.


Support “Time is value for Life” watch in honor of His Majesty the King, and donate money received from selling watch to Red Cross Foundation.

Support classic CD to publicize His Majesty the Kingʼ s genius in music talent during His Majestyʼ s birthday in 2008.

Promote “Call Donʼ t Drive” campaign with the Nation Police Department.


Donate scholarship and necessities to 400 orphans and unfortunate children at Voradith Church, Amphur Pakmok, Angthong Province.

Hold luncheon for 400 orphans and unfortunate children at

Voradith Church, Amphur Pakmok, Angthong Province.

Raise fund for staffs who were affected from a major flood.

jmart 08

Documents

equity roe return

baht paidup capital

c o n t e n t s

g e n e r

equity roa

i n f o r

capital tower

registration number