ANNUAL REPORT 2013

BEAUTY COMMUNITY PUBLIC COMPANY LIMITED

Contents
Annual Report 2013
BEAUTY COMMUNITY PUBLIC COMPANY LIMITED

8 • Executive Summary
17 • Report of the Board of Directors
18 • The Board of Directors’ Report
21 • Vision and Mission
22 • General information of the Company
23 • Risk factors
26 • Business Operations
32 • Business Operation of the company by Product Line
60 • Corporate Social Responsibility
66 • Research and Development
67 • Assets Used in Business Operation
78 • Future Projects “Beauty…Promises
78 • Legal Disputes
79 • Capital Structure
80 • Management
Happiness”
95 • Internal Control
100 • Related party transactions of the Company
106 • Report of the committee responsibilities to the financial Statement
107 • Report of Audit Committee
108 • Financial Position and Overall Operation
121 • Auditor’s report
122 • Appendix 1 Detail of Board of Director and Company Executives
128 • Appendix 2 Position information of the directors, management members, and controller of the company
129 • Appendix 3 Internal Controlling System Adequacy Assessment Form Beauty Community Public Company Limited
139 • Appendix 4 Beauty Community Public Company Limited Statement of Financial Position as at 31 December 2013

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Multi Brands
Meets the needs of various target groups.

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Multi Products
Cover all customer needs with
different price levels to meet
purchasing power and lifestyle.

Multi Channels
Expanded to cover all distribution channels
and reach wider target groups.
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Summary

Executive
Summary
Beauty Community Public Company Limited

Formerly known as Monapolitan Company Limited, Beauty

Community Public Company Limited (“Company” or
“Beauty”) was established on October 19, 2000 by M.D.
Suwin Kraibhubes and Mrs. Tanyapon Kraibhubes with the
registered capital of 1 million Baht. The “Company” conducts
the business of retail sales of cosmetics and skincare
products that aims to offer consumers alternative beauty
products of premium quality from carefully selected raw
materials and excellent packaging design. The “Company”
has a total registered capital of 300 million Baht. The beauty
products sold can be categorized into three types including
make-up product, skincare product, and accessories. Each
product type is sold according to five major concepts in-
cluding Beauty Buffet, Beauty Cottage, Beauty Market,

“Beauty….
Made in Nature, and Girly Girl. Each concept is unique in
terms of product design, distribution channel, and market

promises happiness”
positioning. This is to match the demands of each target
group and building large scale customer base that covers
all beauty-product customer levels as follows:

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Beauty Buffet
“Beauty Buffet” is a cross concept between an all-
you-can-eat-buffet and a cosmetics retail shop in order to
create an outstanding uniqueness. Similar to the buffet where
a wide selection of fascinating dishes is waiting for you to
taste, Beauty Buffet offers a wide range of cosmetic products
so that customers can try different kinds of beauty product
before confidently selecting the best choices. Designed in a
“The Most
buffet style of restaurant and decorated in vividly attracting
colors, Beauty Buffet offers warmly and friendly service.
Customers are free to test different kinds of product before
Delicious
selecting the ones that best suit them. In front of each Beau-
ty Buffet shop will be a chef mascot, which is the symbol of
the shop designed to attract customers as well as to match
Beauty Shop
its buffet concept and the slogan of “The Most Delicious
Beauty Shop in Town.” Beauty Buffet presents itself through
Multi-brands. Each brand has been developed and registered
its trademark under the name of the “Company”. Not only
in Town”
was each brand carefully selected, its image, pricing level,
and market positioning were determined differently as follows
in order to cover a large scale of target groups of dissimilar
demands.

A cosmetic and make-up accesso-

ries brand offering vivid colors, A Personal Care product brand that offers a wide selection of natural
unique packaging, and suitable extract skincare products for deep nourishing effect including shower
price for working-age group cream, shampoo, conditioner, facial cream, body lotion, body scrub as
to professional make-up artist. well as hand and foot cream.

A beauty product brand for

Functional Skin Care that
A cosmetic and make-up accessories enhances good points and
brand with stylishly modern and diminishes weak points such
colorful design that best suits as facial care product, body
teenage group or make-up firming product, dark spot
amateurs. corrector, and anti-wrinkle
product.

The price of Beauty Buffet products are relatively lower compared to other cosmetic brands sold in overall retail stores and even
at counters of department store. There is a wide range of color selection to meet the demands of each target group from early teenage to
working-age group that are looking for beauty and personal care products to better enhance their personality in modern style. Beauty Buffet
products are distributed through its retail branches nationwide. The “Company” runs its business under the policy of continuous branch
expansion in order to cover every consumer group by focusing on opening its Beauty Buffet branches in different leading department stores
and trade areas such as department stores and large supermarkets. Now, Beauty Buffet branches are expanding to the neighboring markets
such as Cambodia and Vietnam.
In the near future, the “Company” is expected to develop or import new beauty product
brands to meet the dynamic trend of customer demands and increase its level of competitiveness
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Beauty Cottage
“Beauty Cottage” is a blend between naturally ex-
tracted products and Vintage style whether in terms of shop
interior design and packaging. It is the perfect combination
of arts & crafts that matches between nature and elegant
charms of Victorian women from the western world under
the slogan of “Natural Crafted Beauty”. These beauty products
sold in retail shops under a single brand of “Beauty Cottage”.
Under this brand, selection of natural raw materials is highly
essential. Some of the natural ingredients include flower
extracts, fruit and vegetables extracts, herbal extracts, and
many other plants that possess outstanding qualities in
terms of skin nourishment, moisture protection, skin firming,
anti-wrinkles, and skin brightening. “Beauty Cottage” is
made especially for those who are looking for a natural way
to care for their health and well-being. The target group for
this brand is mainly university students and career group
who prefers deep skincare effect and at the same time
values simple yet elegant beauty. “Beauty Cottage” was
launched in August 2001. Its product distribution channel
includes retail shops nationwide, which is part of its policy in
expanding its branches among leading shopping centers
both in Bangkok and other provincial areas.
Nevertheless, the market positioning of “Beauty Cottage”
products aims at premium level, which is higher than “Beauty
Buffet” products as it mainly focuses on selling natural
beauty products for deep skin nourishment whereas “Beauty
Buffet” is commonly known for its wide selection of
cosmetic products of vibrant colors and stylish trend.

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Beauty Market

The concept of “Beauty Market” is the mix between the

idea of supermarket and cosmetic shop. This unique
concept highlights the wide selection of products as
seen in convenient stores and combines it with the
excitement of cosmetic shopping. “Beauty Market” is
a Beauty Special Store, meaning that it mainly focuses
on selling beauty products in particular. Covering a total
space of 100 square meters, this special beauty shop is
a Multi-brand cosmetic shop that offers all kinds of fa-
mous domestic make-up brands including Inter Brands
from USA, Europe, Korea, Japan, etc. Amongst some
300 brands sold from 4,000 – 9,000 SKUs, “Beauty
Market” also offers an alternative brand that is available
only at its branches. This Multi-brand aims at selling
various kinds of beauty brands of different functions
in order to enlarge its customer base. The main target
group consists of both male and female customers
who prefer make-ups and skincare products in order to
enhance their stylish and modern personality. “Beauty
Market” aims at expanding its business by launching
new branches in major shopping centers and trade
areas such as department stores and large community.

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“Made in Nature” presents the concept of natural products

under a slogan of “Live Natural Life”. By using product
packaging of natural colors, “Made in Nature” offers
Premium Mass products through major retail stores or
modern trade stores. During the second quarter of 2012, the
“Company” managed to launch its shower cream and body
lotion, which are part of daily personal care products. The
target groups include both male and female consumers who
give importance to personal care and regular customers of
that particular supermarket. Base on the Company’s policy,
continuous launching of new product under the concept of
“Made in Nature” is practiced. In 2013, a total of 5 SKUs
new “Made in Nature” products were added including
shower cream, skin serum, facial foam, night time skincare
product, and mineral water spray. The products were
launched under the concept of Collagen & Q10 that uses
active ingredients from Korea. This is to answer the needs
of large scale consumer demands. The distribution channel
of “Made in Nature” products includes eleven modern trade
stores and leading supermarkets such as Big C Supercenter
(over 115 branches), Tesco Lotus (153 branches), and Tops
Supermarket (49 branches).

“Live a Natural Life”

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Girly Girl
“Girly Girl” mainly consists of facial and cosmetics prod-
ucts for teens produced under the concept of White & Baby using
active ingredients from Japan. With stylishly modern and miniature
packaging designs sold at low price, “Girly Girl” is specially made
for teenage group. This Fighting Brand is distributed through many
channels including convenient stores and catalog such as 7-Eleven,
Family Mart, Seven Catalog, Friday Catalog, and traditional trade.
Having launched in the fourth quarter of 2013, “Girly Girl” brand
mainly focuses on teenage consumer group.

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Industrial Status
Cosmetic and skincare products are one of com- culture, lifestyle, and skin type of their trading countries. Lan-
mon consumer products in modern days, particularly among guage skills, particularly English, will play a significant role in
ladies who wish to enhance their personality and always business operation. In addition, good understanding regard-
maintain great and healthy looking skin. The consumer group ing official contacting, rules and regulations are highly es-
of cosmetic products ranges from early teenage group to sential especially among CLMV member countries (Cambo-
elderly group. Today, however, the use of cosmetic and skin- dia, Laos, Burma, and Vietnam) as proper interpretation is
care products have become widespread among male con- still needed. This is considered as one of the difficulties in
sumers. It was due to this reason that cosmetics industry market expansion. However, this can be solved by finding
continues to grow in Thailand. In addition, cosmetic and sk- specialized trade partners or establishing good relationship
incare business has been least affected by the economic with state’s agency and understanding local administration of
downfall despite the facts that they are considered as ex- that particular community. By this, the Company’s business
travagant and unnecessary products and somewhat costly. can enlarge through dealers which require no investment
This is due to the social values today that emphasize on from the Company, which helps to minimize risks in terms of
great personality, resulting in consumer’s willingness to pay investment.
for this particular expense. What’s more, this consumer trend
will likely continue to increase due to two reasons: (1) the Competitiveness Level
widespread use of cosmetic and skincare products among
an emerging consumer group that has never before use this Cosmetic and skincare industry is a highly com-
type of product such as early teens and male consumers that petitive market whether in terms of imported market of cos-
are becoming more concern of their looks and personality metic products with trademark registration and copyrights
than before and (2) the expansion of current consumer group from foreign countries or domestic market of cosmetic prod-
that becomes more concern with their well-being. Both have ucts under Thai brand. This is because cosmetic industry is
led to an increase in demands of cosmetic and skincare a high value market with the tendency to grow continuously.
products. Base on these statistical facts, the Company is Small business entrepreneurs can initiate their business op-
therefore certain that the tendency of cosmetic industry in eration easily by starting from opening minimal branches or
Thailand will continue to enlarge and remain stable. Nonethe- distribution centers, which requires small amount of invest-
less, the manufacturers and distributors must continuously ment and working capital. This is why a larger number of new
develop and improve its production technology and innova- entrepreneurs began to emerge in the market. In long term
tion to be able to meet the growing demands of consumers, business survival, however, it is considered a highly challeng-
including building outstanding and unique product image in ing task for this emerging group of entrepreneurs as impor-
order to create market differentiation and gain market expan- tant competitive competency is required including distribu-
sion as well as increasing product value. New marketing tion-location advantages, building unique product
strategies are required in order to handle the risk factors characteristics, and achieving memorable product brand
originating from the present economic situation. Currently, among consumers. Today, most of the good locations have
the Company practice product promotions and public rela- already been occupied by existing entrepreneurs. New entre-
tions via various media. Apart from this, the company must preneurs must expand their branches or establish a large
establish brand acceptance among the consumers as well. number of dealers in order to access the consumers in wider
Regarding cosmetic products distribution through retail scale, all of which requires an extensive amount of working
shops and business expansion through branching, good capital. In addition, building product uniqueness and out-
management system is needed in order to handle the grow- standing characteristics often requires experience and exper-
ing market. A wide range of distribution channel is also cru- tise in the business. Hence, small business entrepreneurs
cial in order to access and cover consumers in large scale. within the cosmetic and skincare distribution industry are not
Additionally, Thailand has a balance of trade deficit only minimal in size but their product distribution market is
in terms of cosmetics industry, which means that its export also limited.
value has continue to exceed its import value in both ASEAN Most of the cosmetic and skincare products entre-
and world markets. The upcoming ASIAN Economic Com- preneurs use three main distribution channels. The majority
munity (AEC) and Free Trade Area (FTA) have resulted in 0% chose to distribute their products through direct sales and
import and export duty of most cosmetic products of Thai- counter sales service at department stores, both of which are
land as well as ASEAN member countries since the begin- considered as indirect competitors of the Company since the
ning of 2010. This led to a dramatic rise in import and export purchasing behavior of their target customer group is differ
values of cosmetic products in 2010 compared to the previ- from the Company’s target customer group. Direct competi-
ous year, which continues to increase in 2011. Moreover, the tors of the Company, on the other hand, include entrepre-
marketing opportunity due to the AEC and FTA has led to an neurs who distribute their products through general retail
increase in Thailand’s exportation of cosmetic products, par- stores whether they are international firms or Thai entrepre-
ticularly among ASEAN member countries. Simultaneously, neurs who sell similar products as the Company. This also
however, this rising export value of cosmetic products has includes entrepreneurs whose target group ranges from
resulted in higher competition level in cosmetics industry teenagers to career group and offers almost the same pricing
within the country as a number of leading cosmetic brands level as the Company. Most importantly, they have brands
from Europe, USA, and Japan are expected to enter domes- that are memorable to consumers and have consumer ac-
tic market. These costly Inter brands mainly aim for upper cess in a large scale. Currently, the Company’s market share
class customers. Meanwhile, the lower class market will be is at medium level comparing to the mentioned direct com-
competed by low quality cosmetic products from China as petitors. Nevertheless, corporate income and branching has
well as from countries with low labor cost such as Indonesia. expanded relatively fast comparing to its direct competitors
Hence, Thai entrepreneurs must enhance its level of com- that have higher market share. With corporate competitive-
petitiveness, particularly in middle-class market, by building ness level, industrial growth opportunity, upcoming FTA, and
unique brands and product in order to compete in world business experience in the field, the Company is highly con-
market. The Company’s products are considered as beauti- fident that it can make some adjustments to pave way for
fully designed products of fine quality sold at affordable industrial advantages both in domestic and international mar-
price, which is why it is widely accepted among international kets, which is expected to allow continuous business growth
consumers. Thai entrepreneurs must also understand the in the future.

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Performance Summary
Beauty Buffet, Beauty Cottage, and Beauty Market On the other hand, products made under the con-
products are mainly distributed through retail shops. Beauty cept of Beauty Market were introduced during the third quar-
Cottage brand was launched during the third quarter of 2011 ter of 2013. By the end the same year, the Company estab-
whereas Beauty Market was launched during the third quar- lished a total of 3 branches of Beauty Market, generating
ter of 2013. Recently, a number of new branches were total revenue of 11.50 million Baht.
opened in Bangkok and Vicinity, including other provincial Meanwhile, the total revenues of products under the
areas nationwide. New distribution channels for “Girly Girl” concept of Made in Nature by 2013 and 2012 (from sum-
products were added through modern trade stores during ming up all distribution channels) were 25.77 million Baht
the second quarter of 2012 and the fourth quarter of 2013, and 6.92 million Baht in respective order, or approximately
respectively. This result in continuous increase in the busi- 272.49% of growth rate. Girly Girl products, on the other
ness revenue from 777.65 million Baht in 2012 to 1, 002.66 hand, was launched during the fourth quarter of 2013, giving
million Baht in 2013, or approximately 28.93% of growth rate. a total sales of 0.40 million Baht within the same year.
The main source of the Company’s revenue gener- The sales cost in 2013 and 2012 were 287.87 mil-
ates from “Beauty Buffet” product distribution. In 2013 and lion Baht and 221.16 million Baht in respective order, or ap-
2012, the Company’s revenues (from summing up all distri- proximately 70.51% and 71.27% of gross profit margin, re-
bution channels) were 792.36 million Baht and 676.06 million spectively. It can be noticed that the gross profit margin in
Baht in respective order, or approximately 79.03% and 2013 is relatively lower than in 2012. This is due to the rising
86.94% of total revenue in respective order which is about sales revenue of Made in Nature products through modern-
17.20% of growth rate. This is due to the Company’s branch- trade distribution channel in that year, which has lower gross
ing expansion nationwide in order to access larger customer profit margin compared to retail-shop distribution channel.
scale. By the end o 2013, there are a total of 183 branches Also, the launch of Beauty Market shops during the third
established nationwide and in other countries (179 branches quarter of 2013 has led to lower gross profit margin rate
within the country and 4 branches in other countries), which comparing to Beauty Buffet and Beauty Cottage, resulting in
increased from the year 2012 that has only 149 branches a slight reduction in the overall gross profit margin rate in
(148 branches within the country and 1 branch in other 2013 when compared to 2012.
country). The Company’s net profit in 2013 and 2012 were
Beauty Buffet is unique in terms of its cosmetic 211.41 million Baht and 172.96 million Baht (revised) in re-
products presentation that includes vibrant colors and stylish spective order, or approximately 21.08% and 22.24% of net
packaging designs, resulting in the highest sales compared profit margin rates, respectively. Despite the slight decrease
to other products, or approximately 48.32% of the overall in net profit margin rate, the company’s net profit is still ris-
sales of Beauty Buffet products. Meanwhile, the total sales of ing. One major cause of this is due to the launch and rapid
skincare products, dietary supplements (launched in 2013), expansion of both Beauty Buffet and Beauty Cottage branch-
and beauty accessories were approximately 45.33%, 0.11%, es, including the opening of Beauty Market shops and in-
and 6.24% in respective order. creasing revenue while partial costs remain constant, result-
Regarding Beauty Cottage products, a total of 52 ing in economy of scale in business operation. Another
branches were established by the end of 2013 (50 branches reason is due to the reduction of corporate income tax in
within the country and 2 branches in other country), which 2013 from 23% to 20%.
increased by 21 branches compared to the year 2012 that
has only 31 branches established (nationwide). The Compa-
ny’s total revenue in 2013 and 2012 (from summing up all
distribution channels) were 146.21 million Baht and 86.91
million Baht in respective order, which is approximately
68.23% of growth rate. Unlike Beauty Buffet, Beauty Cottage
mainly focuses on skincare products made from natural ex-
tracts containing outstanding skin nourishment qualities. As s
result, the average sales of skincare product under this brand
remained at 48.55% compared to its overall sales. Mean-
while, the total sales of cosmetic products and accessories
were 43.83% and 7.62%, respectively.

“ Create unique products with

outstanding image to drive
market differentiation and gain
market expansion ”
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Summary of Financial Status

As at December 31, 2013 and December 31, 2012, the Company’s total assets were 1,138.06 million Baht and
1,078.89 million Baht (revised), respectively. In 2013, the Company’s current assets were 893.76 million Baht, or
approximately 78.53% of the overall assets. Most importantly, the Company’s cash and cash equivalent was192.14 million
Baht, or about 16.88% of the overall assets whereas the Company’s temporary investment was 500.00 million Baht, or about
43.93%. This is due to the continuous profit gained from business operation and money raised from the Company’s public
offering of common shares in December 2012. In 2013, the Company’s merchandise inventory was worth 175.77million Baht,
or approximately 15.45% of the overall assets, whereas its sales period for finished products was by an average of 132 days.
This is because the Company needs to reserve some products to be distributed among a large number of retail stores as
well as for the holiday season and emergency cases such as political conflicts or flooding. Nevertheless, 98.11% of the
normal merchandise inventory consists of products manufactured less than one year, which has low risk of deterioration. The
Company’s account receivable was worth 25.84 million Baht, which is considered relatively low since the majority of products
are sold in cash and there are no account receivables with outstanding balance over 1 year. Regarding non-current assets,
the Company had a total of 244.30 million Baht, or approximately 21.47% of the total assets. Most importantly, the net value
of property, building, and equipment altogether was 157.01 million Baht, or about 13.80% of the total assets. Other
non-current assets included long-term rental of Maboonkrong branch. The Company’s intangible assets, on the other hand,
included computer software for business operation.
As at December 31, 2013, the Company’s total liabilities was 134.84 million Baht. The Company mainly depended
on cash liquidity and credit terms from trade accounts payable. Hence, most of the Company’s liabilities were in a form of
current liabilities worth 130.69 million Baht, most of which derived from trade accounts payable worth 53.07 million Baht and
other accounts payable (accrued expenses, revenue department payable, and assets payable) worth 52.14 million Baht.
Furthermore, in terms of shareholders, the Company had a total shareholders’ equity of 1,003.22 million Baht, or a debt to
equity ratio of 0.13. Apparently, it can be observed that the majority of corporate source of capital comes from shareholders’
equity, resulting in lower financial risk and flexible business operation.

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The Board of Directors’ Report

The economy and consumer spending power of 2013 has slowed down, as political unrest and weak economy
which had been taken from the middle until the end of the year. Such events affects overall economic growth of the country,
and however slightly impact the performance of the company and only in short term. The company had already planned to
handle such situations by advance planning both marketing and sales strategy and accelerating new products launching to
boost sales; including providing training product knowledge, sales and service technique to sales staffs. As a result, the
Company’s performance of 2013 was achieved the target with total revenue of Baht 1,002.66 million, which was increased
from the preceding year’s revenue of Baht 777.65 million or equivalent to 28.93% increased. The net profit was Baht 211.41
million, which was Baht 38.45 million higher than the preceding year’s net profit of Baht 172.96 million or equivalent to 22.23
% increased.
In 2013, the Company has expanded and grown continuously with the strategies of “Multi brands, Multi products
and Multi channels”, the key approaches to drive the business’s performance and expansion. Thus, the Company has
launched Beauty Market, the new brand concept which is different from Beauty Buffet and Beauty Cottage. This concept
combined idea of supermarket and cosmetics shop together to be a beauty specialty store, where focuses specifically on
beauty products sale. The stores have average size of 100 square meter for selling multi brands with almost 300 well-known
brands from international sourcing, containing 4,000 - 9,000 SKUs of beauty products. The first store was opened in July
2013 at Seacon Square Srinakarin and received good response from customers and suppliers.
Made In Nature has launched new 5 SKUs additional to the existing 2 SKUs to be sold in large supermarkets and
modern trades. Moreover, the Company has launched new products under Girly Girl brand in the 4th quarter of 2013. The
products are in skin care and teenager cosmetics categories which are fighting brand and to be sold in convenience stores
and catalog, e.g. 7-11, Family Mart, 7-Catalog, Friday Catalog, and traditional trade.
In addition, the Company focused on human resource development for all employees in head office and its retail
branches to improve individual performance along with sustainable growth of the Company. Employees were trained on their
work and related business line, including receiving training from the professional. In the preceding year, the Company also
focused on customer relation management (CRM) by conducting various activities for member customers, including
launching loyalty campaign since July 2013 with good response from customers. Customers could collect the points received
from buying the products and redeem for discount. This campaign could help boosting sales and retain the Company’s
customers.
Finally, on behalf of the Board Directors, the Company would like to thank shareholders, customers, business
partners and all employees for their cooperation. The management is determined to lead the Company to sustainable growth
and success, operate its business with transparency and good governance, and aware of social responsibility, with the
best interests of all.

The Board of Directors

Beauty Community Public Company Limited

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Board Of Directors
Col. ATTAPON SRISANGWARN
Col. ATTAPON SRISANGWARN
Position
Independent Director and Audit Commit-
tee
Age (year) 47 years old
Educational Qualifications
- Bachelor of Laws , Ramkhamhaeng
University
- Student of Royal Thai Army War
College, 58th class
- Certificate of Director Accreditation Pro
gram (DAP), Thai Institute of Directors
Work Experiences
2011 – Present Audit Committee and
Independent Director of Beauty Commu-
nity PCL
2011 – 2012 Chief of Staff Officer
to the Royal Thai Army Commander Divi-
sion, the Provost Marshal General
2006 – 2011 Chief of Investigation
Department, the Provost Marshal General
Lt.Gen. PADET % of Shareholding - None -
CHARUCHINDA
Lt.Gen. PADET CHARUCHINDA
Position
Board Director
Independent Director and Chairman of VIBOON
Age (year) 74 years old POJANALAI
Educational Qualification Mr. VIBOON POJANALAI
- Bachelor of Science, Chulachomkloa Royal Military Academy Position Independent Director
- Certificate of Director Accreditation Program (DAP), Thai
Institute of Directors and Audit Committee
Works experiences last five years Age (year) 38 years old
2012 – Present Chairman of the Board and Independent Educational Qualifications
Director, Beauty Community PCL
2000 – Present Advisor of Royal Thai Army, Director of the - Master of Science in Risk
Provost Marchal General Management and Financial
% of Shareholding - None– Derivatives, Georgia State Uni-
versity
- Bachelor of Accounting, Thammasart University
- Certificate of Director Accreditation Program (DAP), Thai Institute of Directors
Work Experiences
2013 – Present Executive Director of BRP Audit and Advisory Co., Ltd.
2011 – Present Audit Committee and Independent Director of Beauty
Community PCL
2008 – Present Director of Asia Mineral Processing Co., Ltd.
2004 – 2013 Senior Account Audit Manager of AST Master Co.,
Ltd.
% of Shareholding - None -
Dr. PEERAPONG KITIVESHPOKAWAT
Position Independent Director and Chairman of Audit Committee.
Age (year) 52 years old
Educational Qualifications
- Doctor of Management, Sripatum University
- Master of Business Administration Program in Marketing, Thammasat University
And Gothenberg University, Sweden
- Mini MBA in Franchise Nova Southeastern University, USA.
- Bachelor of Science, Chiangmai University
- MBA (Retail Management) Stirling University, UK
- Certificate of Director Accreditation Program (DAP), Thai Institute of Directors
Work Experiences
2011 – Present Chairman of Audit Committee and Independent Director of Beauty Community PCL
2012 – 2013 Director of International Licensing Co., Ltd.
2007 – Present Managing Director of Business Coach & Consulting Co., Ltd.
PEERAPONG 1995 – Present Director of B.T.C. Parts Center Co., Ltd.
% of Shareholding - None –
KITIVESHPOKAWAT
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KRAIBHUBES
TANYAPON
Mrs. TANYAPON KRAIBHUBES
SUWIN Position Director / Deputy Chief Executive Officer
KRAIBHUBES Age (year) 45 years old
Educational Qualifications
SUWIN KRAIBHUBES M.D. - Certificate in Nursing, Baromarajonani College of Nursing, Phayoa
Position Director / Chief Executive Officer - Certificate of Director Accreditation Program (DAP), Thai Institute of
Age (year) 47 years old Directors
Educational Qualifications Work Experiences
- Bachelor of Science, Faculty of Medicine, Chiang Mai University 2000 – Present Deputy Chief Executive Officer and Director of
- Certificate of Director Accreditation Program (DAP), Thai Institute of Beauty Community PCL
Directors % of Shareholding 21.67 %
Work Experiences
2000 – Present CEO / Director / Deputy Director of Marketing Divi-
sion and Deputy Director of Product Development & Purchasing Division,
Beauty Community PCL
% of Shareholding 32.33%

Miss Monsoothatip Malaukcaranun

Position Director
Age (year) 38 years old
Educational Qualifications
- Bachelor of Science, Associated Medical
Sciences, Chiang Mai University
- Certificate of Director Accreditation Program
(DAP), Thai Institute of Directors
PRATYA LEVAN
Mr. PRATYA LEVAN
Work Experiences Position Director / Executive Director
2012 – Present Director Beauty Com- Age (year) 45 years old
munity PCL Educational Qualifications
2012 –2013 Executive Director
and Director of Business Development and - Master of Science (M.S.), Mechanical Engineering, Uni-
Corporate Communications Division, Beauty versity of Kansas
Community PCL - Bachelor of Engineering (B.E), Mechanical Engineering,
2010 – 2011 Assistant Manager of University of Maine
Products Division, Beauty Community PCL - Certificate of Director Accreditation Program (DAP),
2009 – 2010 Assistant Manager of Thai Institute of Directors
Sales Division, Beauty Community PCL Work Experiences
2005 – 2009 Sales Department Man- 2012 – Present Director / Executive Director, and
ager, Beauty Community PCL Director of Information Technology System Division,
% of Shareholding 1.33 % Beauty Community PCL
2005 – 2011 Deputy Director of Information
Technology System Division, Beauty Community PCL
MONSOOTHATIP MALAUKCARANUN % of Shareholding 1.33 %
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SURAPON
PHETKLUENG
Mr. SURAPON PHETKLUENG
Position Executive Director / Director of Account & Finance Divi-
sion
Age (year) 49 years old
Educational Qualifications
- Master of Business Administration , Kasetsart University
- Bachelor of Accountancy (Accounting), Chiangmai University
Work Experiences
2011 – Present Executive Director / Director of Account & Finance Divi-
sion, Beauty Community PCL
2005 – 2011 Account & Finance Division Manager, Thai-Scandic Steel
Co., Ltd.
% of Shareholding 0.03 %

SIRIKRAN
PUTTIVERANON
Ms. SIRIKRAN PUTTIVERANON
Position Executive Director / Director of Sales Division
Age (year) 48 years old
Educational Qualifications
- Bachelor of Business Administration (Second Class Honours), Faculty of Commerce and
Accountancy Chulalongkorn University
Work Experiences
2011 – Present Director / Director of Sales Division, Beauty Community PCL
2010 – 2011 Sales Division Manager, Areeya Property PCL
2009 – 2010 Operation Division Manager, K D N Co., Ltd. (Krispy Kreme Thailand)
2004 – 2009 Franchise Operation Division Manager, Swensen’s (Thai) Co., Ltd.
% of Shareholding 0.01 %

NATTAPONG
KHUEANPHAN
Mr. NATTAPONG KHUEANPHAN
Position Executive Director /Director of Inventory & Office Manage-
ment Division
Age (year) 39 years old
Educational Qualifications
- Bachelor of Science, Faculty of Food Science and Technology, Chiangmai
University
Work Experiences
2012 – Present Executive Director /Director of Inventory & Office Manage-
ment Division, Beauty Community PCL
2006 – 2012 Inventory and Delivery Division Manager, and Advisor of
Human Resources and Administration Division
% of Shareholding 0.06 %
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BEAUTY COMMUNITY PUBLIC COMPANY LIMITED

Vision & Mission

Vision
Mission &
Beauty Community Public Company Limited

Corporate Philosophy
“ Creative Dynamic Sustainable ”
Vision
“ We Create Beauty Products For a Beautiful Life ”
Mission
1. Innovate good quality and modernized beauty products to meet the needs of modern lifestyle.
2. Introduce the products to target group of customers by expanding the distribution channels nationwide and to regional
level.
3. Develop the capabilities in organizational competitiveness, in order to accommodate the changes to contribute the
sustainable growth
4. Conduct the business with good corporate governance by considering in the benefits and impacts of the shareholders,
employees, and societies.

“ We Create Beauty Products

For a Beautiful Life “
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General Information
of the Company

Company Name บริษัท บิวตี้ คอมมูนิตี้ จำ�กัด (มห�ชน)

Company Name in English

BEAUTY COMMUNITY PUBLIC COMPANY LIMITED
Initial Name The Company has been listed for trading in Stock Exchange of Thailand (SET)
under the ticker symbol of “BEAUTY” in the Commerce group
Type of Business Retail distribution of Cosmetics and Skin Care Products under the
followings concepts
- BEAUTY BUFFET
- BEAUTY COTTAGE
- MADE IN NATURE
- BEAUTY MARKET
- GIRLY GIRL
Management Policy Multi brands , Multi products , Multi channels
Headquarter Address No. 10/915 Nuan Chan 34 Alley, Nuan Chan
Sub-district, Bung Kum District, Bangkok Metropolis
10230 Telephone : 02 946 0700 – 6 Facsimile : 02 946 1571
Registration No. 0107555000244
Home Page Web Page for General information of the Company, including with the
information related to Investor Relations (IR).
www.beautycommunity.co.th
Web Page for Beauty Buffet
www.beautybuffetshop.com
www.facebook.com/beautybuffetfanpage
Web Page for Beauty Cottage
www.beautycottageshop.com / www.facebook.com/beautycottageshop
Web Page Made in Nature
www.made-in-nature.com / www.facebook.com/madeinnaturefanpage
Web Page Beauty Market
www.beautymarket-shop.com / www.facebook.com/beautymarketfanpage
References
• The Certified Public Accountant Auditor from DIA International Auditing Company Limited
• Thailand Securities Depository Company Limited (TSD)

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Risk Factors
1. Business Operational Risks executives expect that it would be merely a short-term impact
for the company can give explanations to the consumers via
• Risks of Reliance on Beauty Buffet several channels so that they are informed of the facts rapid-
The main revenue of the company had been from ly.
selling products under the concept of Beauty Buffet. In 2013
and 2012 the company’s total revenue from selling Beauty Buf- • Risks of the Products being Counterfeited
fet products was THB 770.50 THB and 651.68 THB, or 76.84% The company has no policy to produce the products
and 83.80% of the total revenue respectively. Almost all of the by itself, but hires manufacturers with expertise of producing
revenue was from from the retail sales to consumers through- several types of products. The manufacturer provides all the
out the country under the trademark ‘Beauty Buffet’. Cosmetic materials and also controls the production formula in details. In
products are sensitive in terms of consumption, especially fa- addition, some manufacturers are responsible for both the cos-
cial cosmetic products the consumers are relatively sensitive to metic raw materials and the Packaging, enabling them to go
information regarding to the products in both positive and though the whole production process which causes the risk of
negative ways. Therefore, if any circumstances have a negative products the being counterfeited that likely affects the com-
impact on the image of Beauty Buffet, i.e. consumers’ allergies pany’s performance.
triggered by the cosmetics, it might also significantly affect the As the company is well aware of such risk, it has formulated
sales volume and the company’s performance contracts with every manufacturer that controls the production
Beauty Buffet is established under the concept of formula of the company. The content of the contract is that the
unique Shop Brand development, which is merely one of the manufacturers must not disclose or disseminate the formula of
selling channels. The company is able to develop the concept the cosmetic substances as well as the production process to
of Shop Brand as a replacement such as Beauty Cottage other parties, and not produce the cosmetic themselves for
which was another type of Shop Brand focusing on selling sales. The contract is effective both during the manufacturer
products under its own trademark. In addition, under the Shop production under the company’s employment and 1-3 years
Brand Beauty Buffet also divides the products into several after the company terminates the employment.
brands, each having clear target groups. The company can The company’s products are highly varied. At presents, there
develop new brands for replacements continuously based on are more than 1,100 products and the company keeps creating
the popular fashion at the time. In 2013, the company debuted new products regularly. 29 manufacturers produce different
Beauty Market in the form of large Multi-Brand retail shops. products, preventing one from knowing the production formula
The shop’s concept is a mixture of shopping in supermarkets or completely counterfeit the products. Besides, the company
with excitement of buying cosmetics in beauty specialty stores is confident about creating concept of products and enhancing
focusing on selling cosmetics and beauty products. There are service quality in order to be comparable to high-end cosmet-
almost 300 brands of beauty and cosmetics products from ics. This is to build customers’ loyalty to the company’s inimi-
4,000 to 9,000 SKU. At the same time, new products under table products.
Girly Girl brand were also debuted. These products are Fighting
Brand against skin cares and teenage cosmetics with White & • Risks of Reliance on Manufactures
Baby concept of which the active ingredients are imported
from Japan. The design of the product package is modern, Regarding new products development, in spite of the
teenager-attracted and small-sized for selling through conveni- fact that the company primarily specifies active ingredients and
ent stores and catalogues, for example, Seven Eleven, Family features of the products, and cooperates with the manufactur-
Mart, Seven Catalogue, Friday Catalogue and Traditional Trade. ers in detailing and developing the formula and some of pro-
With inexpensive price, the products’ target groups is teenag- duction process, the manufacturers are the ones who gener-
ers. ally provide all the ingredients. Should the manufacturers halt
The company, therefore, is certain that the reliance on the production, the company would not be able to provide
the revenue from selling Beauty Buffet’s products would de- every exact same ingredient. This could affect the company’s
crease progressively when the sales volume of products sold performance in overall picture if such incident occurs to popu-
under other Shop Brands, i.e. Beauty Cottage, Beauty Market, lar products with high sales volume.
Made in Nature or Girly Girl, increase and when additional The case has never occurred to the company; how-
products development based on the strategy and target mar- ever, the company’s risk management policy is to distribute the
keting takes place in the future. manufacturing order to a number of manufacturers in order not
Moreover, the company is confident that the feasibil- to rely solely on one manufacturer. The order proportion from
ity of risk of negative impact on the company’s image is low. the largest manufacturer in 2013 and 2012 were 11.99% and
The negative impact has never occurred as the company gives 13.47% of the total order volume respectively. As for the pop-
the most priority to the quality of the products. The company ular products, the company hires 2 manufacturers simultane-
always tests every lot of the products ordered and has a policy ously. Furthermore, the company has primary knowledge of the
to guarantee customers satisfaction in order that the custom- formula and ingredients and if any manufacturers terminate the
ers are certain of the quality of the products. If unsatisfied, the production, the company is able to adjust the formula and cre-
customers are able to return the products within 14 days ( ate new products comparable to or better than the former
based on Customer Satisfaction Guarantee project, begun products in order to meet the need of the consumers increas-
since 2009). Until now, the value of the products returned is ingly.
relatively low, 0.01% of the total revenue. Besides, the com-
pany has communicated with the customers via online chan-
nels and advertising media. Should any circumstances that
might have a negative impact on the company’s image occur,
the

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BEAUTY COMMUNITY PUBLIC COMPANY LIMITED

• Risks of Inventory Impairment the risks of sales volume to decrease due to the new com-
Cosmetic and skin care products are always petitors would not be as high. Besides, not only does the
changeable, yet it is necessary for the company to order company focus on selling the products, but it also prioritize
enough amount of products and have sufficient inventory in the presentation of the products’ concept, benefits, how to
order to distribute them nationwide. In 2013 and 2012 the maximize the products’ benefits, the attractiveness of the
company’s inventory proportion were 15% and 11% of total packages, shops decoration, good service, brand develop-
assets respectively, and the average selling period were ment and popularization in order to be in line with target
176-187 days (calculated from the existing goods including groups popularity, and brand loyalty maintenance. These no-
the packages. The average selling period of ready-made tions are difficult to be imitated by retail sellers who sell or
products were 113-132 days). Consequently, the company import illegal and counterfeited goods; therefore, the com-
exposes to risks of inventory impairment if the popularity of pany has different target gropus from those of these retail
the consumers changes and cause the existing inventory to sellers without any impact on the company’s sales volume.
become unsalable or impaired. In addition, some of the company’s products are manufac-
The company expects that the impact from such tured by Korean manufacturers such as Beauty Buffet’s
risks is insignificant as it has always conducted surveys re- GINO McCray; Heritage series, while others are produced by
garding the market and the consumers’ behavior, and also Japanese factories situated in Thailand. The company is,
has information technological system that maintain the data consequently, confident that its products’ quality is compa-
of every products sold. Therefore, the company is able to rable and competitive with products imported from Korea
analyze the selling statistic, for instance, the speed of each and Japan which have become increasingly popular in cos-
product sealing and life cycle, enabling the company to plan metic market at present.
the order in line with the market demand. The company’s
average selling period is rather long as it has to make sure • Risks of lease agreement cancellation
that it has sufficient products to distribute to numerous The company has retail shops selling a vast number
braches, and in case of emergency such as flood. of the cosmetics under the concept of Beauty Buffet, Beauty
However, the company has always verified the existing life Cottage and Beauty Market. In December 2013, the com-
cycle of the products and appropriately manage the remain- pany’s had 232 branches in total nationwide (including 6
ing products based on their age. For example, if a product is franchises). Almost all the branches are with 1-3 years space
to be expired in the next 15 months, it would be considered lease agreement (exclusive of MBK 1 branch of which the
a product to be monitored and the marketing and sales team agreement is long-term). If the space owner cancels the
would inform the storefront staffs to focus on selling the lease agreement, the company might not be able to sell it
product. If a product is to be expired in 8-12 months, it will products and its performance might be affected.
be put in the sales promotion period in order to increase he Mostly, the owners of the spaces the company is
selling speed. renting for its business operation are department stores and
large supermarkets such as Tesco Lotus, Big C, Central Pla-
• Risks of being among highly competitive za, The Mall, Robinson, etc. The company is considers a key
account of such space owners and the owners have re-
industries newed the lease agreement as per the company’s request.
Cosmetic and skin care retail business is highly They also offer new space to the company before their other
competitive. In the beginning, it does not require large retail customers so that the company could open new
amount of investment and the business structure is not com- branches before these owners, department stores and su-
plicate; as a result, it is easy for new entrepreneur to start permarkets, open their new branches. Therefore, the com-
such a business which, therefore, increases the competition pany is confident that the impact on its performance from
rate. The entrepreneur can be both Thais and foreigners such risks are rather low.
who debuted their own brands in Thailand, especially cos-
metic products from Asian countries, i.e. Korea and Japan. • Risks of Reliance on Computer System in
The target groups of these entrepreneurs are similar to those Operating Business
of the company, causing the company to be among highly- The company uses computer systems to manage
competitive environment which might have an effect on per- storefront selling of every Beauty Buffet and Beauty Cottage
formance. In addition, the company exposes to risks of retail branch, which is linked to all the inventories of the company.
sellers counterfeiting its products and importing products il- The system is also set to keep the existing products data-
legally. This can have an impact on the company’s sales base, customers data and others and, consequently, if any
volume. being counterfeited by retail sellers, and of imported errors occur it might have an impact on the company’s busi-
illegally. ness.
However, even though it is not difficult for the new competi- The Point of Sales (POS) program of each shop has indi-
tors to start their own business, to create a notable brand, vidual processing system and is connected with the com-
increase sales volume and maintain customer base cannot pany’s inventory data at the end of every day. If any errors
be achieved easily as it requires a larger amount of cash flow occur at one shop, the others will not be effected. Moreover,
for public relations and branch expansion. Most new entre- the company has a policy to support sales process, if there
preneurs lack of power to negotiate renting golden location, is any problem with the system by training the employees to
resulting in their potential incomparable to the existing com- sell its products and issue the bills without using the com-
panies. The company thus expect that puter system.
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BEAUTY COMMUNITY PUBLIC COMPANY LIMITED

In the past, there were some errors of POS program occur-

ring, but the company managed to solve the problems with-
in a short amount of time without any impact on the com-
pany’s performance. As for the inventory management
system via C-Smile program, the company has always
backed up it data regularly and also had alternate servers so
that it can restore data in case of error of main system.
• Risks of Currency Exchange
The company’s products are manufactured by
some foreign manufacturers such as Korean, Chinese, Indo-
nesian and Austrian manufacturers, and pay their service fee
in USD, while all of the company’s products are sold in THB.
This cause the company to expose risk of currency exchange
in case of THB depreciation. However, the total order value
in foreign currency in 2013 and 2012 amounted to 4-6 million
per annum, less than 3% of the total cost without the ten-
dency to increase. The risks of currency exchange of the
company is rather low, thus the company has no need to
stipulate any risk management policy to handle the currency
exchange risks at present. However, if the order from foreign
countries increase, the company would consider formulating
a forward contract case by case properly.

2.Risks of the Company’s Major

Shareholders Holding More than 50%
of the Shares in Total
On 15 August 2012, Mr. Suwin Kraibhubes’s
group held 212,499,800 shares of the company, 97.90% of
the already-sold shares of the company at present. After the
public share offer for sales, the share proportion of Mr. Suwin
Kraibhubes’s group remained 64.06% of the already-sold
“Focuses on
shares of the company (source: Thailand Securities Deposi-
tory (Thailand) Co., Ltd. on 12 March 2014), and the group
has become the major shareholder who has the right to offering the
control most of the votes in the shareholder’s meeting, ex-
cept for the matters that require at least three fourth of the
votes in the shareholder’s meeting according to the law or best products,
the company’s regulations, i.e. capital increasing, capital de-
creasing, business selling or transfer both wholly and par-
with the highest
level of
tially. As a result, other shareholders may not collect the
votes to verify or equipoise the matters suggested by the

quality ”
major shareholder.
The company is aware of the risks and thus forms a commit-
tee consisting of external parties which are 4 independent
committees as the chairmen of the committee. 3 of 8 com-
mittees are appointed as audit committees to audit and equi-
poise the operation of the committee and the executives. In
addition, the committee’s operational policy is to give the
most prioritize to the shareholder’s benefits with clear roles
and responsibilities of the company’s committee, executive
committee and audit committee. If the company is to have
transactions with a person who might bring about a conflict,
the company will strictly follow the approval process of the
transactions and the criteria of the Stock Exchange of Thai-
land. The person who might bring about a conflict may not
cast his or her vote for the matter consideration.

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Business Operations
Background
Beauty Community Public Community Limited
(“Company” or “Beauty”), formerly known as Monapolitant
Company Limited. It was found on 19 October 2000 with
registered capital
of THB 1,000,000 which was already called upon. The
founder were Doctor Suwin Kraibhubes and Mrs. Tanyapon
with the objectives to run cosmetics and skin care retail
sales and to present the variety of cosmetic products well-
selected in terms of the ingredients and packages as an
alternative choice for the consumers.
Significant Changes and Development
1998 – 1999 The first cosmetic and skin care retail shop named ‘Neo’ is open at a shopping mall in Siam
Square area. Later, the business was expanded by opening an imported cosmetic and skin care
retail shop named ‘Mona’ at MBK Center shopping mall.
19 October 2000 Monapolitan Company Ltd. was establish (the former name of the company) with the registered
capital already called upon of THB 1,000,000: 10,000 common shares, THB 100 per share. The
objectives were to run a full cosmetics and skin care retail business under the name ‘Mona’ with
the concept of presenting several brands of well-selected cosmetic products which are both the
imported ones and the domestically-manufactured ones. The target group is teenagers who
prefer colorful cosmetics. There were 7 branches of Mona shops in different shopping malls.
2004 The shop was remodel to be more modern and its name was changed to ‘Cosmeda’ with the
following differences:
More products were imported to meet the need of the customers and the company started
ordering products from qualified domestic factories that export goods to foreign countries, from
Japanese factories in Thailand, and from Korean factories. The ingredients were both domestic
and imported, leading the company to meet the need of the customers more effectively.
Customer base was expanded to university students and first jobbers.
The company started applying information technology to shop management for the same standard
and smother management.
3 March 2005 The company increased registered capital into THB 5,000,000: 50,000 shares, THB 100 per
share as cash flow for branch expansion. From 2004 to 2006, Cosmeda had opened
approximately 20 branches in total.

2006 - 2007 In December 2006, the company developed the shop and change its name to ‘ Beaty Buffet’.
The remodeling enhanced the quality of the products and packages under the concept of
Beauty Buffet which focused on the following notions; easy to access, easy to use, testable,
variable and reasonable price. These notions are the same as those of buffet restaurants where
customers are allowed to try variable food and get ones that meets their needs.
The products of Beauty Buffet are developed under Private label which are variable enough for
the customers to select products suitable for themselves under the slogan ‘The most delicious
beauty shop in town’.
The first Beauty Buffet shop is opened at Central World, Wong Sawang branch, and received
satisfied feedback. After that, the company then remodeled all Cosmeda shops into Beauty
Buffet and has kept expanding its branches under the new name since 2007.
2008 – 2010 Beauty Buffet shops were widely patronized by customers, leading to the following expansion:
In 2008 the shops were expanded into Northern and Eastern parts of Thailand with the total 34
branches at the end of the year.
In 2009 the shops were expanded into Northeastern and Southern and Western parts of Thai-
land with the

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BEAUTY COMMUNITY PUBLIC COMPANY LIMITED

total 74 branches at the end of the year

In 2010 the company continued expanding branches nationwide and had total 97 branches at
the end of the year.
Beauty Buffet continued expanding it branches especially in Northeastern parts of Thailand
where the customers were of high purchasing power. At the end of 2011, there were 120
branches in total. In addition, the company debuted a new cosmetic and skin care retail shop
named ‘Beauty Cottage’, presenting natural and non-harmful chemical products in the shop of
vintage style. The first branch of this shop was opened at Central Plaza, Ladprao, under the
slogan ‘Natural Crafted Beauty’ Beauty Cottage had also been expanded. Since the first branch
in August 2011, the company had kept expanding the branches in Bangkok and vicinity, and
into Northen, Northeastern and Eastern part of Thailand. At the end of the year, there were 10
branches in total.
23 December 2011 The company increased the registered capital into THB 55,000,000: 555,000 common shares,
THB 100 per share for buying a land which was o be the headquarter, and for the business cash
flow.
2012 In January 2013, the company made a contract of selling Beauty Buffet products with a retailer,
allowing it to sell the products in Cambodia under the standard of the company. The first
Beauty Buffet shop was opened in Cambodia in 2013.
In April 2013, the company debuted a product named ‘Made in Nature’ which was a natural skin
care product under the slogan ‘Live a Natural Life’, sold through Modern Trades. It was sold at
Foodland department store for the first time.
31 July 2012 In the Shareholders’ Meeting No. 2/2013, the resolution was that the company was to convert
itself into a public limited company and change its name into Beauty Community Public Com-
pany Limited. Besides, the resolution of the meeting was that the company was to change the
value of the shares from THB 100 per share into THB 1 per share. The meeting also approved
increasing the registered capital for THB 245,000,000, THB 300,000,000 in total, and registering
the company in Stock Exchange Market of Thailand. The new allocation of common shares for
capital mobilization were as follows:
162,500,000 common shares allocated for the company’s committee
80,000,000 common shares allocated for public
2,500,000 common shares allocated for the company’s executives and employees
The remaining common shares after offer for sales to the company’s executives and employees
were to be offered for sales to public.
12 December 2012 First Day Trade with Stock Exchange Market of Thailand
December 2012 Beauty Buffet had expanded 142 branches in total; Beauty Cottage had expanded 31branches
in total and 6 franchises; 1 international branch. There were 180 branches in total.
July 2013 The company debuted Beauty Market in the pattern of a large Multi-Brand retail shop. The
shop’s concept is a mixture of shopping in supermarkets with excitement of buying cosmetics
in beauty specialty stores focusing on selling cosmetics and beauty products. The space
cover 100 sq.m. There are almost 300 brands of beauty and cosmetics products from 4,000 to
9,000 SKU, which were widely know. There were both inter brands such as American, European,
Korean and Japanese brands, and alternative brands sold only at Beauty Market which was
Beauty Cuisine brand consisting of Make-ups, Skin cares, Body Hygienes, Perfumes, Hair
Cares, Deodorants, Beauty Drinks, Food Supplements, Accessories, Men’s Cares and other
types of cosmetic products. The target group were both men and women who wanted cosmet-
ics products that could beautify themselves and adjust their personality. The first branch was
opened at Seacon Square, Srinakarin.

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BEAUTY COMMUNITY PUBLIC COMPANY LIMITED

November 2013 The company debuted new products under Girly Girl brand were also debuted. These products are
Fighting Brand of skin cares and teenage cosmetics with White & Baby concept of which the
active ingredients are imported from Japan. The design of the product package is modern,
teenagers-attracted and small-sized for selling through convenient stores and catalogues, for
example, Seven Eleven, Family Mart, Seven Catalogue, Friday Catalogue and Traditional Trade. The
products’ target groups is teenagers. The products were first for sales though Seven Catalogue.
December 2013 Beauty Buffet had expanded 173 branches in total; Beauty Cottage had expanded 50 branches in
total; Beauty Market had expanded 3 branches and 6 franchises; 6 international branch. There were
238 branches in total.

The Company’s Overall Business Operation

The company runs a cosmetic and naturally-extracted skin care retail business, The company at present is selling
its products under 5 concepts: Beauty Buffet, Beauty Cottage, Beauty Market, Made in Nature and Girly Girl, each is different
from each other in terms of packing design, selling channels, and market shares in order to meet the need of different groups
of customers, with the objectives to build customer base covering every type of cosmetic products as follow:
Beauty Buffet
The concept is a mixture between buffet restaurant business and cosmetic retail shops focusing on presenting
multi-brand cosmetic products that are viable, colorful, distinctive with informal service so that the customer could try using
the products as much as possible before purchasing the most suitable ones for themselves. The products under Beauty Buf-
fet concept are not of expensive price when compared to those sold through retail shops in the market, and those sold
through counters in shopping malls. The products are colorful, in line with the need of the target groups which are teenagers
from junior high school students to white collars who need cosmetics for beautification and personality adjustment. On 31
December 2013, Beauty Buffet had 179 branches in total nationwide. The company has a policy to keep expanding the
branches in order to distribute the products to the consumers throughout the country by focusing on opening branches in
shopping malls, large supermarkets. At the end of 2013, there were 4 international branches; 3 branches in Cambodia and 1
branch in Vietnam. As of 31 December 2012, Beauty Buffet had 148 retail branches in total nationwide, and 1 international
branch in Cambodia.
Beauty Cottage
The concept is to present naturally-extracted products with vintage-styled shops, a perfect deluxe combination. All
the products of Beauty Cottage are single brand. The distinctive features of this brand is that ots products are naturally-ex-
tracted, suitable for health concerned people. The target groups are university students and white collars who wants to take
intensive care of their skin and also adjust their look to be more luxurious. Beauty Cottage was debuted in August 2011 and
had kept expanding its branches since. On 31 December 2013, Beauty Cottage had 50 retail branches in total nationwide,
focusing on opening the branches at leading shopping malls and shopping areas in Bangkok and vicinity. At the end of 2013,
Beauty Cottage had 2 international branches; 1 branch in Cambodia and another one in Vietnam. At 31 December 2012,
Beauty Cottage had 31 retail branches in total nationwide.
Beauty Buffet and Beauty Cottage will present 3 main products to the consumers, divided into 3 groups which
cover all the need of the customers: Make-ups, Skin cares and Accessories. While Beauty Buffet is distinctive for its cosmet-
ics selling, Beauty Cottage focuses on skin care products.
Beauty Market
The concept is a mixture between supermarkets and cosmetic shops. Combining shopping in supermarkets with the
excitement of buying several types of cosmetics in beauty specialty stores focusing on selling cosmetics and beauty
products. This has brought a difference in the cosmetic shop line which none has ever done. The shops provides the
customers with the remarkable complete beautification with the shop size larger than that of Beauty Buffet and Beauty, 100
sq.m. Beauty Market is a large Multi-Brand retail shops of which the products are widely-known . There are both inter brands
such as American, European, Korean and Japanese brands, and alternative brands sold only at Beauty Market. There are
almost 300 brands of beauty and cosmetics products from 4,000 to 9,000 SKU, with more variation and specific usage to
penetrate wider target groups.

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Beauty Market presents mainly the consumers the followings: Make-ups, Skin cares, Body Hygienes, Perfumes, Hair
Cares, Deodorants, Beauty Drinks, Food Supplements, Accessories, Men’s Cares and other types of cosmetic products. The
target group were both men and women who wanted cosmetics products that could beautify themselves and adjust their
personality.
Beauty Market was first debuted in July 2013 and at the end of 2013 the company had 3 branches of Beauty Market; at
Seacon Square, Srinakarin; at Future Park, Rangsit and at Cental Airport, Chiang Mai. The company has a policy to keep
expanding the branches in order to distribute its products to the customers throughout the country by focusing on opening
the branches at leading shopping centers and shopping areas such as shopping malls and large communities.
Made in Nature
The concept is natural products with nature-link packages, presenting high-quality skin care products of which the
ingredients are imported from foreign countries especially from Korea which could attract premium mass. The products are
sold through retail shops or Modern Trade.
Made in Nature was fisrt debuted in 2nd quarter of 2012 with body hygiene products and lotion, which are used in daily life.
The target group are both men and women who are health-concerned and are customers of ordinary supermarkets. In 2013,
the company debuted additional 5 SKUs: body hygienes, skin serums, facial foam, night treatment products and mineral
water sprays under the concept ‘Collagen&Q10’. The active Ingredients are imported from Korea in order to meet the need
of the customers widely. The products are sold in Modern Trade form and at 11 leading supermarkets: Big C, 115 branches
of Supercenter, 153 branches of Tesco Lotus and 49 branches of Top Supermarket.
Girly Girl
The products under this brand are Fighting Brand of skin cares and teenage cosmetics with White & Baby concept
of which the active ingredients are imported from Japan. The design of the product package is modern, teenagers-attracted
and small-sized for selling through convenient stores and catalogues, for example, Seven Eleven, Family Mart, Seven
Catalogue, Friday Catalogue and Traditional Trade. The products’ target groups is teenagers. The company debuted 8 SKUs
under the brand Girly Girl at the end of 4th quarter of 2013.

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Revenue Structure
Sales structure by channel (Unit: Million Baht)
2013 2012 Changed
Revenue structure by channel % to % to
Amount % to sales Amount % to sales Amount %
total revenue total revenue
Retail shops :
- Beauty Buffet 770.50 76.85% 78.92% 651.68 83.80% 84.65% 118.81 18.23%
- Beauty Cottage 140.21 13.98% 14.36% 84.98 10.93% 11.04% 55.23 64.99%
- Beauty Market 13.32 1.33% 1.36% - 0.00% 0.00% 13.32 100.00%
Total sales from retail shops 924.03 92.16% 94.65% 736.67 94.73% 95.69% 187.36 25.43%
Franchises 23.90 2.38% 2.45% 20.84 2.68% 2.71% 3.05 14.65%
Wholesales & Oversea 9.39 0.94% 0.96% 6.12 0.79% 0.79% 3.27 53.39%
Modern Trade 13.87 1.38% 1.42% 1.39 0.18% 0.18% 12.47 896.36%
Other channel 5.07 0.51% 0.52% 4.87 0.63% 0.63% 0.20 4.11%
Total sales 976.25 97.37% 100.00% 769.89 99.00% 100.00% 206.36 26.80%
Other revenue 26.42 2.63% - 7.77 1.00% - 18.65 240.13%
Total revenue 1,002.66 100.00% - 777.65 100.00% - 225.01 28.93%

Revenue structure by product (Unit: Million Baht)

2013 2012 Changed
Revenue structure by product % to % to
Amount % to sales Amount % to sales Amount %
total revenue total revenue
Make up 452.68 45.15% 46.37% 383.67 49.34% 49.83% 69.01 17.99%
Skin care 461.14 45.99% 47.24% 333.03 42.82% 43.26% 128.11 38.47%
Food supplement 1.13 0.11% 0.12% - 0.00% 0.00% 1.13 100.00%
Accessories 61.30 6.11% 6.28% 53.19 6.84% 6.91% 8.11 15.25%
Total sales 976.25 97.37% 100.00% 769.89 99.00% 100.00% 206.36 26.80%
Other revenue 26.42 2.63% - 7.77 1.00% - 18.65 240.13%
Total revenue 1,002.66 100.00% - 777.65 100.00% - 225.01 28.93%

Revenue structure by brand (Unit: Million Baht)

2013 2012 Changed
Revenue structure by brand % to % to
Amount % to each product Amount % to each product Amount %
total revenue total revenue
Beauty Buffet
Make up 382.84 38.18% 48.32% 347.42 44.68% 51.39% 35.42 10.20%
Skin care 359.21 35.83% 45.33% 281.64 36.22% 41.66% 77.57 27.54%
Food supplement 0.87 0.09% 0.11% - 0.00% 0.00% 0.87 100.00%
Accessories 49.45 4.93% 6.24% 47.00 6.04% 6.95% 2.45 5.21%
Total Beauty Buffet 792.37 79.03% 100.00% 676.06 86.94% 100.00% 116.31 17.20%
Beauty Cottage
Make up 64.09 6.39% 43.83% 36.25 4.66% 41.71% 27.84 76.80%
Skin care 70.98 7.08% 48.55% 44.47 5.72% 51.17% 26.51 59.61%
Accessories 11.14 1.11% 7.62% 6.19 0.80% 7.12% 4.95 79.97%
Total Beauty Cottage 146.21 14.58% 100.00% 86.91 11.18% 100.00% 59.30 68.23%
Beauty Market
Make up 5.75 0.57% 50.00% - - - 5.75 100.00%
Skin care 4.78 0.48% 41.57% - - - 4.78 100.00%
Food supplement 0.26 0.03% 2.26% - - - 0.26 100.00%
Accessories 0.71 0.07% 6.17% - - - 0.71 100.00%
Total Beauty Market 11.50 1.15% 100.00% - - - 11.50 100.00%
Made in Nature 25.77 2.57% 100.00% 6.92 0.89% 100.00% 18.85 272.49%
Girly Girl 0.40 0.04% 1.56% - - - 0.40 100.00%
Other revenue 26.42 2.63% 100.00% 7.77 1.00% 100.00% 18.65 240.13%
Total revenue 1,002.66 100.00% - 777.65 100.00% - 225.01 28.93%

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Constantly create new products that are in

line with unique concepts and adding selling
channels constantly
Business Goals
The company believes in sustainable growth without relying on product brands or one selling channel; therefore, it
has shown that the company has focused on building concepts or creating new brands along with creating new products
that are in line with the concepts, including adding selling channels constantly. The principles lead to the following consistent
business goals:
• To become a leader of the marketing terms of cosmetic shops by developing the business to cover the demand
of the consumers related to beauty by ways of multi products, multi brands and multi channels.
• To create variable cosmetic products, not only cosmetics and skin cares but also cover all other types of products
to meet the customers’ need. Also to maintain the standard to be comparable with international brands by focusing on
naturally-extracted products both the substance and the packages. This is to enhance the competition ability both domestic
and international with new innovations that cover customers’ needs widely.
• To expand the selling channels nationwide and also internationally in order to reach more the target group.

• To develop Customer Relationship Management system (CRM) in order to analyze the customers’ needs in details
and to create promotion activates that could satisfy the customers precisely and continuously.
The objective of the company’s business goals is mainly for the business to be expanded smoothly and effectively
in order to be superior in terms of competition, which is expected to return high yield to te company’s shareholders.

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Business Operations of the Company

by product line

Products and Services

Beauty
The Company operates its retail business on cosmetics and skin care products that compose of natural
extracts under the concepts of Beauty Buffet, Beauty Cottage, Beauty Market, Made In Nature, and Girly Girl. The
concepts of Beauty Buffet and Beauty Cottage are presented in retail shops with different products, packaging, and
shop design. Their products are also placed in different market position, pricing, and target group. The retail shops
under Beauty Buffet and Beauty Cottage concepts locate in leading shopping malls and business centers, e.g.
department stores, large modern trades in Bangkok, territories, and other provinces. Moreover, Beauty Buffet started
penetrating its shop into our neighboring countries such as Cambodia and Vietnam.
Beauty Market concept was launched in the 3rd quarter of 2013 by representing in large multi-brands stores.
This concept combined idea of shopping for various products in supermarkets and convenience stores with feeling
and excited feeling from cosmetics shopping in beauty specialty store where focuses specifically on beauty products
sale. It differentiate and create novelty of cosmetics shops by building multi-brands stores with larger area than
Beauty Buffet’s shops and Beauty Cottage’s shops. Its stores have average size of 100 square meter for selling al-
most 300 famous brands, both local brands and inter brands e.g. America, Europe, Korea, Japan, etc.,, containing
around 4,000 - 9,000 SKUs of beauty products. In addition, there are products of a selective brand, Beauty Cuisine,
sold only in Beauty Market’s stores. The products only in Beauty Market’s stores comprised of make-up, skin care,
body hygiene, perfume, hair care, deodorant, beauty drink, food supplement, accessories, men’s care, and other
beauty products. The target group of this brand includes either men or women who requires using cosmetics and
body cares for self-treatment and trendy personalities.
Beauty Market started opening its stores in July 2013 with the policy of continuous expansion. At the end of
2013, there were 3 stores of Beauty Market in 3 locations i.e. Seacon Square Srinakarin, Future Park Rangsit, and
Central Airport Chiangmai, to achieve the objective to widely distribute products to most consumers. The stores were
opened mainly in leading shopping malls and business centers, e.g. department store and large community malls,
under the concept of beauty supermarket containing outstanding decoration and variety kind of products. It achieve
good response from customer, suppliers, and area owners.
In 2013, the Company launched Collagen&Q10 series as new products of Made In Nature with 5 SKUs which
are body bath, Skin care serum, facial foam, night skin care, and mineral spray, under the concept of “Bright&White”.
The active ingredients of these series were imported from Korea for producing 2 additional SKUs (body hygiene and
skin lotion) to be sold in large retail shops or modern trade stores. This can response customer need more effi-
ciently and help increasing sustainability of Company’s sale growth.

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At the end of 4th quarter of 2013, the Company launched 8 SKUs of new products under Girly Girl brand. These
products are fighting brand in skin care and teenager cosmetics categories with the concept of “White&Baby”. The active
ingredients were imported from Japan. The trendy and young-look package came with compact size of products to be
suitable for selling via convenience stores and catalog, e.g. 7-11, Family Mart, 7-Catalog, Friday Catalog, and traditional trade.
As the target group of these products is teenager, their prices are in medium range. All products started being published
and sale through 7-Catalog since the end of 2013. The products sold under the concepts of Beauty Buffet,
Beauty Cottage, Made In Nature, Girly Girl, and Beauty Market are jointly developed by the Company and manufacturers,
both domestic and international.
The production was made by selection and development of beauty innovation in both raw
materials and packages which are popular in many western and eastern countries, popular in beauty, such as France, Swit-
zerland, United State of America, Korea, and Japan. The ingredients were selected and improved for matching with Thai skin
and favorite. The package was designed to be consistent with concept and brand of the products. The details of products
developed and sold by the Company are as follows.

Business
Supermarket, Hypermarket,
Traditional trade and Convenience Store, Traditional
Channel Retail Cosmetic Shop Retail Cosmetic Shop Retail Cosmetic Shop E-Commerce trade,E-Commerce and catalogue
Multi Brands Single Brand Multi Brands Single Brand Single Brand
Brand ( Private Label ) ( Private Label ) ( Int'l Sourcing and private label ) ( Private Label ) ( Private Label )
Cross concept between Premium natural beauty products Mixed concept between the High quality skincare products with Japanese style functional
excitement of cosmetic shop and with vintage inspired design convenience of supermarket and premium ingredients imported skincare and trendy make up
the fun of buffet restaurant - Natural Ingredient beauty store. from Korea - Set as a fighting brand
- Easy Access - Less in preservative - Beauty Specialty Store - Tarket premium mass market - Lower Price
Brand Concept and - Wide Variety of Products - Art&Craft Style decoration - Our Largest Format Shop - For natural-conscious consumer - Smaller Pack Size
brand positioning - All in One - Higher Positioning and higher - Average Area 100 Sqm - Compete with imported brands - Teenager attractive design
- Reasonable Price - price than Beauty Buffet - Almost 100 Suppliers and from Korea,Japan, USA and - 11 SKUs
- Fun and Exciting - 351 SKUs more than 300 Brands Europe
- 848 SKUs - 4,000-9,000 SKUs - 7 SKUs

Make up Make up Make up Skincare Skincare

Skincare Skincare Facial Care Make up
Accessory Accessory Body Hygiene
Body Care
Hair Care
Product Coverage Perfume
Deodorant
Beauty Drink
Food Supplement
Beauty Accessory
Men's Care
GINO McCRAY General Brand
THE BAKERY Alternative Brand
Product Brand SCENTIO BEAUTY COTTAGE Exclusive Brand MADE IN NATURE GIRLY GIRL
LANSLEY Private Brand

Young teenager - College Student- Young teenager -

Target Group Working Women Working Women All ages from 13-65+ All ages Working Women
Shop Size Average 35 sqm Average 35 sqm Average 100 sqm No shop. No shop.

Beauty
Specialty
Store
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A brand of make-up and accessories with pattern, color, pack-

aging identity, and pricing that are designed to be suitable for
working-age customers, including professional make-up artist.
The products sold under GINO McCray can be categorized into
4 series of Pro Make-Up, Pink Passion, Heritage, and The Artist.
Each of them has different tone, identity, and product
positioning available for customer’s selection.

Beauty Buffet
“Beauty Buffet” came from the idea to integrate buffet res-
taurant with cosmetics retail business. It differentiate and
create outstanding by adapting buffet food serving which
provide variety kinds of food for tasting and having with A brand of make-up items and accessories in the same cate-
beautiful and attractive decoration. After sufficient tasting, gory as GINO McCray. To match with teenagers or new users
consumers will be able to select the most wanted things need, It comes with trendy pattern and brilliant colors with
confidently. As a result, Beauty Buffet apply the same con- lower price than GINO McCray.
cept by providing many products for selection and decorat-
ing its shops to be attractive, including provide friendly
service. The shops allow customer testing products before
buying to receive the one which match their requirement.
Beauty Buffet put chef’s statue, designed pursuant to the
shop’s slogan of “The Most Delicious Beauty Shop in Town”,
in front of shops to attract customers. Key concepts of
Beauty Buffet are;
Easy Access A brand of personal care products, e.g. body bath, shampoo,
Variety conditioner, face and body cream, skin scrubbing cream, hand
All in One and foot cream, which are composed of natural extracts and
Reasonable Price provide deep nourishing for whole body.
Fun and Excitement
To be consistent with Beauty Buffet’s concept, the shops
include several products in multi-brands which were selected
and determined by different identity, pricing, and market
positioning to meet various needs of prospects. This will
bring wider group of customers to Beauty Buffet. A brand of functional
skin care, e.g. facial
Now the products in Beauty Buffet’s shops can be catego- whitening, body fit,
rized as make-up, skin care, and accessories. All of them will flawless, and stretch
be sold under the four brands with private labels as follows. mark products, which
enhance your appear-
ance and reduce de-
fects.
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GIRL DE PROVENCE Perfume

The Company has made the corporate contract
with the partner ; DEES SUPREME CO.,LTD. so
that be the only one who distribute GIRL DE
PROVENCE Perfume in Thailand. And for Retail
channel, we have the Hottest Girl Group; Girls’
Generation to be our presenter. Meantime, that
product has released in BEAUTY BUFFET in
July,2013.

In 2013 Beauty buffet continuously launch new product to

completely serve the customer need and was well accepted

BEAUTY BUFFET
PRODUCT HERO.
BRAND GINO McCRAY
HERITAGE

BRAND SCENTIO
MILK PLUS
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BEAUTY COMMUNITY PUBLIC COMPANY LIMITED

NEW
PRODUCT
2013

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Beauty Cottage focuses on selling the cos-

metics with color from natural extracts ac-
cording to the concept of natural beauty,
e.g. eye shadow and brush-on with color
extracted from berry fruits, including skin
nourishing by mix ingredients of Vitamin E,
Beauty Cottage Collagen, Aloe Vera, etc. Moreover, there is
facial treatment in some Beauty Cottage’s
“Beauty Cottage” is a concept to present shops for for full beauty services.
products which composed of natural extracts
in vintage shop and package by focusing on
balancing between art & craft. Beauty
Cottage’s shops and products are designed
in natural art style mix with gentle of western
lady in Victorian age under the slogan of
“Natural Crafted Beauty” which cause classy
and luxury style.
All products under Beauty Cottage’s concept are sold in the single
brand of “Beauty Cottage” and categorized into 3 types of make-up, skin
care, and accessories. The key focus is on raw materials selection i.e. extracts
of flower, fruit, vegetable, herbal, and other plants, which have good properties
of skin nourishing, skin moisturizing, skin firming, stretch mark reducing, in-
cluding skin brightening.
Beauty Cottage is outstanding in selling of skin care products by
grouping them based on extracts compositions. One sample group is the
product with milk protein and wall nut extracts, i.e. body bath, body scrub,
body care, and body spray, which help in body firming and whitening. An-
other example is the group of products with olive extracts, i.e. facial cream,
face and eye serum, and facial massage cream, which help in skin nourishing,
skin moisturizing, stretch mark reducing. The product grouping can help cus-
tomer to select the products that completely match with their requirement.

In addition, products of Beauty Cottage stay in

more premium market position than Beauty Buffet with
higher price and focus on the target group who are mainly
concern in deep nourishing by natural products. On the
other hand, Beauty Buffet’s products focus on the target
group who love in colorful, trendy, and variety of products

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BEAUTY COTTAGE
PRODUCT HERO

Victorian &
Romance

Make up Milk & Walnut

NEW PRODUCT 2013

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Beauty
Market Beauty
rd
Market concept was launched in
the 3 quarter of 2013 by representing in
large multi-brands stores. This concept
combined idea of shopping for various
products in supermarkets and convenience
stores with feeling excited from cosmetics
shopping in beauty specialty store where
focuses specifically on beauty products
sale. Its stores have almost 300 famous
brands, both local brands and inter brands
e.g. America, Europe, Korea, Japan, etc.,,
containing around 4,000 - 9,000 SKUs of
beauty products. In addition, there are
products of a selective brand, Beauty Cui-
sine, sold only in Beauty Market’s stores.

The Supermarket
of Beauty
The products sold in Beauty Market’s stores comprised of
make-up, skin care, body hygiene, perfume, hair care,
deodorant, beauty drink, food supplement, accessories,
men’s care, and other beauty products. The samples of
brands in Beauty Market’s stores are as follows;

BEAUTY CUISINE

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MADE IN
NATURE nd
In the 2 quarter of 2013, the Company launched
“Made In Nature” concept with 2 KUs of natural
products, i.e. body bath and skin lotion, under the
slogan of “Live a Natural Life”. The product’s pack-
age comes with natural color containing premium
mass products which are sold in large retail shops or
modern trade stores. In 2013, the Company launched
5 SKUs of new Made In Nature’s products under the
concept of “Collagen&Q10”. The active ingredients
of these series were imported from Korea to com-
pletely fulfil customer need.

“Live a Natural Life”

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Girly Girl th
At the end of 4 quarter of 2013, the Company launched 8
SKUs of new products under Girly Girl brand. These prod-
ucts are fighting brand in skin care and teenager cosmetics
categories with the concept of “White&Baby”. The active
ingredients were imported from Japan. The trendy and
young-look package came with compact size of products
to be suitable for selling via convenience stores and cata-
log, e.g. 7-11, Family Mart, 7-Catalog, Friday Catalog, and
traditional trade, so that it’s easy to penetrate into the
target group who are teenager.

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Key Operation Policy Beam means sale volume which implies sale
boosting to support a roof which means customer. The
As the Company has its major revenue from product Company has set both company’s target and individual
sale via retail shops, the key policy focus on efficient shop shop’s target, then follow up all progress periodically so
management. The Company also has other sup- that strategy modification can be done promptly if required.
plementary policies, i.e. location decision policy, pricing Performance evaluation is made by counting of people en-
policy, and inventory management policy, to smooth its try, number of bills, sale volume per bill, and number of
business expansion and achieve customer’s satisfaction as per memberships. This can also evaluate employees’
the following details. performance and successfulness of promotion campaign.
In addition, the Company provides training for its
• Shop Management Policy employees regarding sale technique, e.g. how to sell dur-
The Company use the home model for business man- ing low and peak numbers of customers, how to persuade
agement as per details shown in the following figure; customers to entry the shop.
4 Poles means the parts to support and
interface with customer and create sale, which are
• Shop: Decoration can also make better sale
environment. Beauty Buffet and Beauty Cottage decorate
their shops in different style, although, each shop is based
on same standard to make customers accustom and
comfort in buying in any shops.
• Product: In addition to product quality and
attractive package, the Company also concerns in product
presentation e.g. product arrangement, product display,
tester, price label ordering, which can attract customer.
• Sale Force: It means salesman performance.
The Company has its policy to provide training about
product knowledge and service standard to employees. In
addition, salesman are assigned in suitable numbers
matching with shop’s size and number of customers in
each area to maximize sales efficiency.
The Company’s policy for shop management has key • Marketing tools: They are different activities of
principal that all compositions in a shop should be matched and sales promotion which are continuously held by the
support one another. This implied foundation, pole, beam, and Company to retain existing customers and attract new
roof of a house. Each part must be connected unitedly to build a customers. The Company has its policy to arrange new
secure, beautiful, and comfortable house. marketing activities to match with customers’ lifestyle and
A retail shop can be compared with a house. All meet their requirements. Thus, the activities are designed
compositions; pattern, products, management, including sale; for both member and non-member groups for continue
must be combined in perfect ratio to boost sale and achieve joining of customers. In addition, the Company has
customer’s satisfaction. satisfaction guarantee campaign by allowing customers
The compositions of home model imply meaning returning products within 14 days after the date of receipt.
and importance as follows; Customer can request for refund or changing of products
at buying point. Such policy is developed to creating
Roof means customers who imply a roof of confidence in product quality. However, there were only a
house or the top of sales operation that make all few customers returned the products.
compositions stable. The Company focuses on building
good relationship with customers, studying customer’s Foundation means management which can sup-
taste and needs, presenting suitable products and port and enhance the poles to be strong and
promotion for each customer, provide quality services to stay in good condition. The management
customer, and also respect customer. of the Company is responsible for managing
of products, personnel, documentation to
smooth shops’ operation and maximize
their efficiency.

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• Location Decision Policy The Company’s pricing policy starts by setting the
As growth of company’s business depends on re- product’s price, then create production plan to be corre-
tail shop expansion, thus shop location is a key factor for sponding with the set price. This approach receive the ben-
its achievement. Now the Company has its policy to locate efit in controlling price range of all products in competitive
most shops in department stores; e.g. Central Plaza, level, including gain reasonable gross profit margin.
Robinson, The Mall, Major; including big supermarkets, e.g. Regarding outsourcing products, that are mainly
Lotus, Big C. The Company has location advantage because sold in Beauty Market, R&D and purchasing team will coordi-
our shops is interesting and is acceptable for many department nate with sales and marketing team of Beauty Market will
stores, then they treat us as their key account. When any select supplier by studying market opportunity, purchasing
department stores will have new subsidiaries, they will terms and conditions, making price comparison with com-
send the Company their layouts for selecting shop petitors. After that, they will set the reasonable price by major
location. The Company has criteria to select shop location concerning in gross profit margin.
as follows;
Overview consideration, e.g. the province of such • Inventory Management Policy
subsidiaries, are they near community or university?, In addition to attractive and efficient shops man-
income per capita of population in the area. agement, inventory management is another key factor
Location consideration, e.g. how many of people which is important to business operation. As the Company
should pass such location? Is it near a theatre, supermar- has variety kinds of products with plenty of SKUs and all
ket, or escalators? of them have certain expiry date that are around 2.5-5
After considering suitable location, the Company years after manufacturing date, thus the Company has to
will run sale forecast compared to sale volume of other develop the inventory management policy for consistency
shops in the same province or nearby. The consideration among central warehouse and all shops’ warehouse. The
includes rental fee per sale because it is the most signifi- policy focus on reducing risks of obsolete products and
cant in administration expenses. If the ratio is acceptable, avoid selling expired products to customers, which can
the Company will start rental process. However, the Com- discredit the Company’s image. Moreover, the policy is set
pany may consider opening its shop in the subsidiaries to avoid product loss which mainly affect the Company’s
with high rental fee, if such location can enhance Compa- cost.
ny’s image or support public relation, e.g. shop in BTS
station or department stores at the central of Bangkok. Warehouse Management Policy
In addition, the Company will analyze turnover of The Company implement C-Smile program for in-
each shop periodically and may consider closing down ventory management of central warehouse and link it with
some unachieved shops where cannot increase their sale. POS (Point of Sales) that used for sale and inventory
In 2013, there were 4 shops closed from total 232 shops. management of each shop. Inventory summary of each
The 2 Beauty Buffet’s shops were closed because of shop will be linked to update the inventory of central ware-
agreement was expired and unable to extend. Another 2 house so that overall inventory can be checked at the cen-
closed shops were Beauty Cottage’s shops where was tral warehouse. In addition, the physical stock check will
opened because the 2 locations reserved for Beauty Mar- be done in monthly basis.
ket were ready earlier than the schedule. Once the opening For good inventory management, order of
schedule of Beauty Market arrived, the Company then outsourcing products will be minimize as less as good
modified those 2 shops and also sell some products of purchasing conditions can be maintained. The Company
Beauty Cottage. However, business development team and will manage inventory turnover efficiently by keeping
interior design team of the Company have the plan to find sufficient stock and avoid loosing of sales opportunity
replacement place for those 4 closed shops to cover cus- from stock shortage.
tomers’ needs. In addition, the Company uses First in – First out
method for inventory management by focusing on design
• Pricing Policy of product layout. Moreover, the central warehouse will
Management of the Company engages in check actual remaining life of each product periodically
launching new products continuously to response trendy and set the policy to relocate stock based on remaining life
consumers. R&D and purchasing team will coordinate with as follows;
sales and marketing team to design basic concept and • The products with remaining life of 15 months
formula of the products to meet market requirement. The will be grouped as the monitored products. The Company
price will be set in the suitable range for market situation will calculate covered date by considering inventory per
of both direct and indirect competitors, including corre- sale. If the result shows that there is a risk of uncovered
spond with current price range. After that the team will sale, the Company will notice staff of each shop to boost
coordinate with manufacturer for production plan by con- sale of such products. R&D and purchasing team, includ-
trolling raw materials’ price and operating expenses in the ing sales team will follow up for inventory of this product
limit level. group for further plan and purchase.
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• If there are any products with remaining life of 8

- 12 months, warehouse team will inform R&D and
purchasing team, marketing and sales team to establish
some promotion campaign for boosting sale so that such
products can be quick distributed and avoid obsoleting.
• For the products with remaining life of 5 - 7
months, higher level of promotion such as clearance sales
will be arranged to stimulate their turnover.
• For the products with remaining life less than 4
months, the central warehouse will not deliver them for sale
at any shops. However, there was no record of any inventory
with remaining life less than 4 months.
In addition to inventory management, the C-Smile
and POS program also have key function in recording of
customers’ information and sales history. Both systems will
record general information of customers, date of purchase,
including all purchased products which will be useful for
CRM (Customer Relationship Management).
Stock obsolescence allowance policy
The Company has its policy to set the allowance of
stock obsolescence by considering products’ life. The
products are categorized into 2 types which are finished
goods and packages. Regarding finished goods, there are
several kinds of them, e.g. make-up, facial care, body care,
hair care, gift set. The policy will be set differently based on
product’s life of each type. The highest allowance of 100 will
be set for the products with longer life than 3 years. However,
as of December 31, 2013 and 2012, there were the finished
goods that had been stored for longer than 1 year at 0.06
and 0.05 million baht respectively (exclude defected
inventory). In 2013, there were the finished goods that had
been stored for longer than 2 years at 0.06 million baht.
Regarding packages, which have longer life than finished
goods, as of December 31, 2013 and 2012, there were the
packages that been stored for longer than 2 years at 0.25
and 0.17 million baht respectively.
Regarding damaged products, expired products, or
packages of obsolete products that unable to reuse; the
Company has its policy to separate them in defect inventory.
All defect inventories will be set the obsolescence allowance
at 100 and stored separately for deposit in accordance with
the rule of Revenue Department. However, there were not
any expired item identified as defect inventory.
Loss Protection Policy
Although the Company set up monthly physical
stock take at each shop, the loss can be taken because of
small piece and large quantity of products. Thus, the
Company established the policy to set up a monthly budget
to be intensive for shops’ staff. If any shop operates its
business without product loss, all staff of such shop will
receive full amount of such intensive. On the other hand, if
there is product loss in any shop, the staff of such shop must
compensate for the lost product in reasonable amount. This
policy focuses on team work. However, there were a few lost
products in the part, equal to 0.3% of total sale.
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Marketing and Competition

Distribution Channel
The Company has 5 distribution channels as follows;
Sales structure by channel (Unit: Million Baht)
2013 2012 Changed
Revenue structure by channel % to % to
Amount % to sales Amount % to sales Amount %
total revenue total revenue
Retail shops :
- Beauty Buffet 770.50 76.85% 78.92% 651.68 83.80% 84.65% 118.81 18.23%
- Beauty Cottage 140.21 13.98% 14.36% 84.98 10.93% 11.04% 55.23 64.99%
- Beauty Market 13.32 1.33% 1.36% - 0.00% 0.00% 13.32 100.00%
Total sales from retail shops 924.03 92.16% 94.65% 736.67 94.73% 95.69% 187.36 25.43%
Franchises 23.90 2.38% 2.45% 20.84 2.68% 2.71% 3.05 14.65%
Wholesales & Oversea 9.39 0.94% 0.96% 6.12 0.79% 0.79% 3.27 53.39%
Modern Trade 13.87 1.38% 1.42% 1.39 0.18% 0.18% 12.47 896.36%
Other channel 5.07 0.51% 0.52% 4.87 0.63% 0.63% 0.20 4.11%
Total sales 976.25 97.37% 100.00% 769.89 99.00% 100.00% 206.36 26.80%
Other revenue 26.42 2.63% - 7.77 1.00% - 18.65 240.13%
Total revenue 1,002.66 100.00% - 777.65 100.00% - 225.01 28.93%

1 Company’s shops
The Company use its retail shops as main distribution channels of Beauty Buffet and Beauty Cottage. The Company
had average sales volume through its shops at 95% of total sale in 2013 and 2012 respectively. The first shop of Beauty Buffet
started opening in 2006 at Central Department Store, Wongsawang, while the first shop of Beauty Cottage started opening in the
3rd quarter in 2011 at Central Plaza, Ladprao. The first store of Beauty Market started opening in the 3rd quarter in 2013 at
Seacon Square, Srinakarin. Shops under those concept were expanded continuously. The number of shops at the end of 2013
and 2012 were shown in the table below.
Number of Beauty Buffet Branch Number of Beauty Cottage Branch Number of Beauty Market Branch
Region
2013 2012 Changed 2013 2012 Changed 2013 2012 Changed
BKK & Vicinity 74 69 5 23 15 8 2 - 2
Middle 14 10 4 5 3 2 - - -
North 13 8 5 4 2 2 1 - 1
South 24 16 8 6 2 4 - - -
North-East 17 11 6 6 4 2 - - -
East 21 19 2 4 4 - - - -
West 10 9 1 2 1 1 - - -
Totol 173 142 31 50 31 19 3 - 3
Franchise 6 6 - - - - - - -
Total THAILAND 179 148 31 50 31 19 3 - 3
Oversea 4 1 3 2 - 2 - - -
Grand Total 183 149 34 52 31 21 3 - 3

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Number of Beauty Buffet Branch Number of Beauty Cottage Branch Number of Beauty Market Branch
shopping center
2013 2012 Changed 2013 2012 Changed 2013 2012 Changed
Tesco Lotus 64 52 12 5 1 4 - - -
Big-C 38 31 7 5 3 2 - - -
Central Plaza 20 17 3 20 12 8 1 - 1
The Mall 6 6 - 5 4 1 - - -
Robinson 7 4 3 5 1 4 - - -
Major Cineplex 4 4 - - - - - - -
BTS 4 4 - - - - - - -
Other 30 24 6 10 10 - 2 - 2
Total 173 142 31 50 31 19 3 - 3
Franchises 6 6 - - - - - - -
Total THAILAND 179 148 31 50 31 19 3 - 3
Oversea 4 1 3 2 - 2 - - -
Grand Total 183 149 34 52 31 21 3 - 3

2 Franchises
In the past, the Company had its policy to expand retail shops of Beauty Buffet by franchising. Now the Company has the policy
to expand domestic shops by itself and will not open for franchise at this time. Currently, there are 6 branches of franchise shops.
However, the Company still allows the existing franchisees to continue their distribution by entering franchise agreement in written
for clear management. In 2013 and 2012, the Company had average sales volume through franchises around 2.45% and 2.71%
of total revenue respectively.

3 Wholesale (domestic and international)

The Company also make wholesale available for any distributor who requires selling the products in the area without any Com-
pany’s shop. However, the Company does not focus on wholesale distribution. Thus the more Company’s shops opened, the less
revenue from this channel.
For international market, the Company has its policy to find some distributors who accustom with each area for
selling the products. This because the Company lack of professional in area, including procedures and rules of shop
establishment in foreign countries. In 2012, the Company started selling through the first distributor in Cambodia by using
pattern of Beauty Buffet’s retail shop, which were controlled for decoration and service quality according to the same
standard as the shops in Thailand. In 2013, new 5 shops; 3 shops in Cambodia (totally 4 shops) and 2 shops in Vietnam
( 1 Beauty Buffet’s shop and 1 Beauty Cottage’s shop) ; were opened through distributors. In 2013 and 2012, the
Company had average sales volume through wholesale at 0.96% and 0.79% of total sale respectively.
4Large retail shop or modern trade became a distribution channel of Made In Nature since the middle of 2012. It
Modern Trade
focuses on sale in large supermarket e.g. Villa Market, TOPs, Foodland, Gourmet Market (The Mall), Golden Place, Fuji
Supermarket, 7-Catalog. The products are positioned in “Premium Mass” which represent high quality products for several
target groups in competitive price level.
In 2013, the Company sold Beauty Buffet’s products and Beauty Cottage’s products in modern trade, e.g.
7-Catalog, Zalora website, and Ensogo. In addition, in the 4th quarter of 2013, the Company also sold Girly Girl’s product
through 7-catalog. In 2013 and 2012, the Company had average sales volume through modern trade at 0.96% and 0.79% of
total sale respectively.

5Selling through other distribution channels, i.e. selling for the Company’s employees in welfare’s price, including
Other distribution channels
selling in Beauty Open House, where the products with special discount are sold in special occasion such as the year end.
In 2013 and 2012, the Company had average sales volume through other distribution channels at 0.52% and 0.63% of total
sale respectively

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Marketing Strategies
The Company has developed marketing strategies by considering customer buying behavior. In management’s point of
view about make-up and skin care products, customers previously engaged in the product itself or high product loyalty. Such
trend seemed to be decline as the time pass because manufacturers could develop their products to have similar qualification
and quality. Thus, in make-up and skin care market, both current and future trend, will compete mainly in building of brand
loyalty and create brand value. However, each brand cannot be created to meet all market’s or consumer’s needs. As a result,
the Company focuses on creating variety, confidence, and value-added for each brand; determining different market positions to
cover customers’ requirement; including engage in customer retention of each brand. The market strategies of the Company are
• Branding Strategies
Currently, the Company achieves in creating the concepts or brands of Beauty Buffet, Beauty Cottage, and Beauty
Market to be aware or recognized by the target group. The major revenue of the Company comes from selling of products through
retail shops. The Company has launched new 5 SKUs of Made In Nature’s products for larger consumer group to be sold through
modern trade. In addition, new 8 SKUs of Girly Girl’s products have also been launched for selling through convenience stores
and catalogs, i.e. 7-11, Family Mart, 7-Catalog, Friday Catalog, and traditional trade. The Company has the concept of branding
strategies as follows;
• Brand identity
The Company makes brand recognition for consumers by creating brand identity. The identities of each brand are as follows;
(1) Beauty Buffet: product variety as buffet food;
(2) Beauty Cottage: classy luxury;
(3) Beauty Market: beauty supermarket presenting in beauty specialty store;
(4) Made In Nature: implies to nature;
(5) Girly Girl: a fighting brand under the concept of ‘White&Baby’ with the active Ingredient imported from Japan, small product
size, and reasonable price.
The Company has designed products and packages, including shop decoration by matching with each product’s
identity. Such identities are key factors in determination of target group, price range, and marketing approach for each brand. In
addition, the Company has its policy to develop new concept or brand which is different from the existing ones for different target
group. This is diversification of depending on any brand with expectation to create sustainable growth of the Company.
• Service Differentiate
Beauty Buffet, Beauty Cottage, and Beauty Market do not focus only product sale, but also present overall beauty
concept. Customer will receive friendly service. The staff, who receive training as the Company’s standard, can suggest make-up
method which is suitable for each customer’s characteristic, including suggestion of the product to suit skin condition. The
objectives are to make customer feel comfortable in product selection, feel confident and easy access to the Company’s
products. However, consumer will receive better service compared to other make-up retail shops which have similar price range.
• Branding for market approach through other distribution channels
Branding for market approach through new distribution channel is a pattern of marketing strategy of the Company. In
2013, the Company has developed Beauty Market brand for wholesale. The Company has launched new 5 SKUs of Made In
Nature’s products to be sold through modern trade. In addition, new 8 SKUs of Girly Girl’s products, which are fighting brand in
skin care and teenager make-up groups, have also been launched for selling through convenience stores and catalogs, i.e. 7-11,
Family Mart, 7-Catalog, Friday Catalog, and traditional trade. Those are different channels from the existing ones
where can help increasing customer base. The Company also has
its policy to create more brands for selling beauty products in other
distribution channels.

Build confidence and

added value to each
brand with the different
market positions.

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Customer Retention Strategy

In addition to new concept or brand development for penetrating into many target groups, retention of
existing customer base or creation of recurring revenue is a key factor for business and income sustainability. Thus, the
Company engages in customer retention strategy as follows;
• Increasing distribution channels
The Company has its policy to expand shops continuously, starting from shop opening in Bangkok and territories
for consumer awareness then penetrate into other regions. Currently, Beauty Buffet has its shops nationwide, while Beauty
Cottage started expanding to large provinces in each region for easy access, recurring buying conveniently, including creating
brand recognition. Beauty Market plans to build more stores in Bangkok, territories, and large provinces. Girly Girl plans to
sell its products through convenience stores and catalogs, i.e. 7-11, Family Mart, 7-Catalog, Friday Catalog, and traditional
trade. In addition, the Company has a plan to increase distribution channel through e-commerce system for more conveni-
ence and easy access.
• Maintain product’s quality together with new product development
Product’s quality is a key factor to create recurring revenue. As Consumer’s satisfaction and good attitude to the brand
comes from good quality and reasonable price of product, thus the Company focuses on developing and maintaining
product’s quality to be suitable for Thai skin nature and color. The product will be tested in every batch to make customer
confident in product’s quality and suitability for user. In addition, the Company engages in launching new product
continuously to response customer’s trend. Since popularity in make-up market is dynamic and there are new inter brands
coming from Korea and Japan that have the same target group, thus the Company has created product development strat-
egy by doing market survey in Thailand and international market continuously. The survey result is used for development of
product’s pattern to be matched with consumer’s trend. The Company has its policy to widely open for manufacturer
selection. The Company will either order from some factory located in Thailand, Thai company or international company e.g.
Japanese company; or import from some factory located in foreign countries e.g. Korea, to develop product quality to be
suitable for competition and quick response to consumer’s needs.
• Customer Relationship Management
The Company has developed information system to store customer database for the purpose of Customer Relationship
Management (CRM) which can specifically response customer needs. The CRM system will be started by promoting
membership campaign to customers. Customers should be persuaded by offering member discount and free membership
application during shop opening period or when their buying reach set amount. Once customers become member, the
Company will record general personal information i.e. address, age, gender, education, etc., including individual buying
information e.g. buying pattern, frequency, frequent bought product, comment to product, other specific requirement.
By using those information, the Company will be able to create marketing activities and sales promotion
corresponding to the target group’s needs. In 2013, the Company launched point collection campaign of Beauty Buffet for
customers. The member will receive some points for collection and then exchange with product discount. This campaign is
also planned to be used with other distribution channels. “Special For Privilege Member” was a campaign allowing members
buying new products earlier than non-member customers with 20% discount. “Midnight Sale” was a campaign giving double
points to members who bought products at Central and The Mall during the midnight sale. “Funny Birthday Shopping” was
a campaign providing 25% discount for Beauty Buffet’s members and 20% discount for Beauty Cottage’s members who went
shopping in their birth month. In addition, staff can browse members’ buying history at any time to match the products with
customers’ requirement or to solve customers’ problem in time.

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• “ Beauty Community ” creation

As online media plays more important roles in communication nowadays, the Company recognizes marketing
opportunity to approach the target group via many kind of internet media. Those media can support convenience and
rapid interaction with customers. Thus, the Company can know individual need, including product or service problem.
The Company has created many online media as follows;
For Beauty Buffet Website : www.beautybuffetshop.com
Facebook :www.facebook.com/beautybuffetfanpage
Youtube channel: Beautybuffet live
Istragram : BEAUTYBUFFETSHOP
For Beauty Cottage Website :www.beautycottageshop.com
Facebook : www.facebook.com/beautycottageshop
Youtube channel: Beautybuffetcottageshop
Istragram : BEAUTYCOTTAGESHOP
For Beauty Market Website :www.beautymarket-shop.com
Facebook :www.facebook.com/beautymarketfanpage
Istragram : BEAUTYMARKETSHOP
For Made in Nature Website :www.made-in-nature.com
Facebook :www.facebook.com/madeinnaturefanpage

Creating of such online media not only focus on information delivery for public relation and sales promotion, but also
present life style that match with brand’s concept. The online media can increase interesting and create customers’
engagement in presenting new idea e.g. new make-up style, implementing brand decoration to daily life. Moreover, there
were many activities e.g. make-up contest, arranged for attract customer to follow up in the pattern of “Beauty Community”.
The “Beauty Community” is create to create two-way communication and long-term relationship with customers. The
Company implies the host of community, while customers imply the Company’s friends who come to visit the community.

Workshop
The company has held
workshops for various organizations
regularly, to promote company’s
products and to provide tips on skin
care and make-up to the employees
of those organizations. This is a way
to create a “beauty community” and
all get very well responses.

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• Continuous Promotion
Campaign
The Company create sales
promotions for all distribution
channels continuously to deliver
information to consumers via both
traditional media and digital media
in various patterns. They help
emphasize consumers’ rec-
ognition and provide information
of new product. The Company
make public relation in the following
media to reach the target group.

VTR Free TV advertisement media – VTR of Ruang Lao

Chao Ni that is the most favorite program for news
follow up;

Advertising
Magazines – emphasize on the target
and popular magazines in Thailand,
e.g. CLEO ,In Style Ray’s, S Cawaii ,
Koosangkoosom, Praew;
Promotion

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Awards
Receive excellent products award from popular magazines, de-
termined by well-known Beauty Editor ,Beauty Bloggers, and
Makeup Artist from CLEO , In Style, Lips;

Magazine Tie-in
Publishing some information in many channels,
e.g. www.pantip.com, www.jeban.com, www.cute-
castle.com; and some magazines, e.g. Lisa, CLEO,
Vogue ,Ray’s, S Cawaii, Lips, etc.;

Micro Agencies
Promote via digital media for rapid communication. Emphasize brand
and products awareness through well-known bloggers, who really use
the products; and micro agencies, users who really us the products
and then tell other consumers via digital media.
Now the Company creates brand recognition for all of its brands via traditional media and Digital
media for easy access and maximize effectiveness of advertisement.
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Target Group
Since the Company’s products are consumer products and the Company focuses on retail business, thus the target
group are end-user, especially women who love using make-up and skin care more than men. The products; that are sold
through Beauty Buffet, Beauty Cottage, Beauty Market, modern trade, convenience store, catalog, and traditional trade; are
placed in different market positions. Thus, the target group of each product are different.

• Target Group of Beauty Buffet

The products sold in Beauty Buffet’s shops are variety and colorful with lower price, compared to other make-up
sold in other retail shops. Thus, the target group vary from teenager in junior high school to working age, who require using
cosmetics for self-treatment and trendy personality.

• Target Group of Beauty Cottage

The products sold in Beauty Cottage’s shops are skin care that are made from several natural extracts and con-
tained in attractive package. Thus, the target group vary from university student to working age, who require higher level of
treatment with classy luxury personality.

• Target Group of Beauty Market

The products sold in Beauty Market’s shops are Multi-Brands cosmetics, categorized into make-up, skin care, body
hygiene, perfume, hair care, deodorant, beauty drink, food supplement, accessories, men’s care, and other beauty groups.
Thus, the target group are both women and men in all age, who require using cosmetics and treatment product for self-
treatment and trendy personality.

• Target Group of Made In Nature

Made In Nature’s products, that are sold through modern trade, are the products for daily life. They are differ-
entiated by using high-quality raw materials and made from natural essence. Thus, the target group are both women and
men, who engage in self-treatment and being customers of supermarket.

• Target Group of Girly Girl

Girly Girl’s products; that are sold through convenience stores and catalog, e.g. 7-11, Family Mart, 7-Catalog, Friday
Catalog, and traditional trade; are skin cares and teenager cosmetics for using in daily life. They are differentiated by using
raw materials imported from Japan. Thus, the target group are women vary from teenager to working age, who engage in
beauty treatment and being customers of the above distribution channels.

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Industry and Competitive Situation

1. Industry Situation
• Opportunity in Thailand
In Thailand, the cosmetics market has been growing up continuously because cosmetics and skin care products are
most favorite consumer products for daily life. This is specifically in women in all ages who require enhance their personality
and take good care of their skin for good looking. Now many men also use cosmetics and skin care products to take care
of themselves. We can notice that many advertisements focus on men as the target group. There are more products
imported from other countries penetrating into middle-end and low-end market. In addition, there are many SMEs come into
this business because cosmetics business has low cost, high return, and low economic impact. The opportunity also comes
from consumer behavior that take better care in their personalities. Thus, the cosmetics and skin care market likely to grow
up along with higher consumers’ demands.
From the above trend, cosmetics market in Thailand will grow up continuously and sustainably. However, both
manufacturers and distributors must move along with dynamic consumers’ trends to survive their business by doing as
follows;
- Improve manufacturing technology with modern innovation to meet consumers’ need widely;
- Create outstanding and different image of products for market penetration and build up value-added of products;
- Improve marketing strategies to keep up with risk factor from current economic, create sales promotion activities or
communication via many media, create popular branding;
- Cosmetics sale through retail shops and shop expansion must have good sale management system to support
business growth;
- Must have wide and cover distribution channels to access large consumer group.
With expansion trend of cosmetics industry and key success factors above, the Company confident that our busi-
ness will also group up and expand as well as the industry.
• Opportunity in foreign countries
Preparation for entry ASIAN Economic Community (AEC) and opening of Free Trade Area (FTA) cause the duty of
most cosmetics products import and export among Thailand and ASEAN countries reduce to 0% since the beginning of 2010.
As a result, import and export value of cosmetics in 2010 step up from the previous year and continuously grow up in 2011.
By comparison between cosmetics import and export of Thailand, it shows that Thailand gains trade surplus from export
compared with other ASEAN countries. Opening of ASIAN Economic Community (AEC) in 2015 will bring many advantages
to Thailand as a hub of cosmetics business and manufacturing either for sale domestically or for export sale because there
are many cosmetics factory in Thailand operated by both foreign company and Thai company. In addition, Thailand has
advantage in cosmetics production knowledge from being hub for long time. We produce world-standard cosmetics for
selling in many countries includes AEC countries who have good attitude with Thai products. They love in good quality,
beautiful design, and reasonable price of our products. Moreover, Thailand has good system for being a hub of transportation.
Regarding competition trend in cosmetics market, we forecast that there will be pricey products under premium
brands from Europe, America, and Japan penetrating into our high-end market. Moreover, there also be cheap and
low-quality products from China and Indonesia, where have low labor cost, join competition in low-end market. To have more
advantages in competition, especially in middle-end market, Thai entrepreneur should make more improvement in creating
individual’s brand and product identity for export in the international market (source: information compiling from the document
in seminar of “AEC vs challenge of Thai cosmetics industry” and the document of Thai custom department). The Company’s
products have good quality, attractive design, and reasonable price, thus they are accepted by foreign customers. The key
concerns of entrepreneur are to understand lifestyle, skin characters and colors of foreign customers, English language, rules
and regulations in government contact. In some countries, especially CLMV group (Cambodia, Laos, Myanmar, and Vietnam),
the rules and regulations require interpretation which deems to be obstruction of expansion. However, the Company solve
these problems by finding some partners, who are professional and have good relationship with government in each local
area, so that the Company expand its business rapidly through distributors to reduce investment risk.
Since the beginning of 2012, the Company started opening cosmetics market internationally, starting from Cambo-
dia. At the end of 2013, there were 6 shops; 4 shops in Cambodia (3 Beauty Buffet’s shops and 1 Beauty Cottage’s shop)
and 2 shops in Vietnam (Beauty Buffet’s shop and Beauty Cottage’s shop). The Company also has its plan to expand
distribution to other countries. We believe that our brand identity, standard quality of products, understanding in skin color
and foreign culture, can help increase our competitive opportunity and advantage international market.

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2. Competitive Situation
Cosmetics and skin care distributions, both import cosmetics with international trademark and Thai brand, are in high
competitive market because they have high market value and tend to have continuous growth. As this business can be started
easily by opening a few shops or centers which require low investment and working capital, thus it attracts many new SMEs
joining this competition. However, the challenge of new entrepreneur is to operate business in long term because the key
competency in competition are to have location advantage and to create brand and products identity to achieve consumers’
recognition. Currently, almost outstanding locations are reserved by existing entrepreneurs. Shop expansion and training for
plenty of salesman to approach larger consumer groups require high amount of working capital. To make products interesting
and attractive require high experience and professional. As a result, many SMEs in cosmetics and skin care distribution business
are small and distribute their products in limited area.
The Company’s direct competitors, both multinational companies and Thai company, are the distributors who sell
cosmetics and skin care products through general retail shops. The Company focuses on the competitors who sell the products
with similar characteristics to the Company’s products, have their target group vary from teenager to working age, offer similar
price range, and specifically, achieve customers’ brand recognition and access wide group of consumers. Those competitors
are;
Orient The Body
Brand Princess
Cute Press BB, BC,BM(1) Karmarts
Shop
Yves Rocher Etude House Skin Food

Distributor O.P. Natural SSUP Bangkok BEAUTY Karmarts PLC. Earth Care Yves Rocher Cosmecca Malachi Co.,Ltd.
Product Co., Ltd. 1991 Co., Ltd. Co.,Ltd. (Thailand) Co.,Ltd.
Year of establishment 1985 1976 2000 (2) 1993 1992 2000 2005
1994
Number of operating years 28 years 37 years 13 years 19 years 20 years 21 years 22 years 8 years
Paid Capital
(3)
78 70 300 360 55 12.5 1 30
Total revenue (3)
3,042.87 1,188.67 777.65 709.05 423.02 394.52 352.06 446.56
Distribution points (4) 299 743 232 (5) 64 50 50 42
834

Notes: (1) Beauty Buffet ,Beauty Cottage, and Beauty Market;

(2) Karmarts PLC. was established in 1994 but started cosmetics business in 2011;
(3) Unit in million baht, reference financial statement at the end of December 31, 2012, except of SSUP Bangkok 1991 Co., Ltd. that reference
financial statement at the end of March 31, 2012 and BEAUTY’s paid capital that refer to paid capital after registration;
(4) Distribution points mean shop and other distribution points, mainly collect from website and facebook of each brand in March 2014;
(5) Karmarts has total 82 shops (reference from www.karmarts.com) 752 distribution points (at the end of 2012), and also sell through other
distribution channels e.g. convenience stores, catalog, distributer, call center. (information from the Form 56-1 of Karmarts PLC. in 2012)

The Company has revenue growth and shop expansion rapidly. The management consider that our competitive
competency and business advantages caused by;
• The Company has various brands under the concept of shop brand, which are Beauty Buffet, Beauty Cottage,
and Beauty Market, including other brands with their individual identities to be sold under such shop brand concept. This can
increase interesting of the Company’s image and products.
• We follow up for both domestic and international market’s trend continuously to be guidelines in product
development to be in line with consumers’ needs.
• The product’s quality almost similar to international cosmetics but it is modified to be suitable with skin condition
and color of Thai identity.
• The package is designed in good-looking and then attract consumers.
• We split order to many factories where have professional in different kinds of products. This brings us flexibility in
production, including new product design.
• Administration system is planned by using computer system in controlling of sale and warehouse management.
In addition, the Company has the system to collect customer’s information to develop customer relation system so that we
can make more understanding in consumers’ needs.
• The Company has power to negotiate with department stores regarding shop expansion because we are key
account of many department stores. We receive good condition to open new shop more rapidly and have higher negotiation
power than other customers.

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In conclusion, although there is high competitiveness in cosmetics and skin care market caused from both domestic
competitors and from import products, which tend to be increased from AEC and FTA, the Company still confident that our
competency and business experience can support the Company improvement. Thus, the Company will create competitive
advantage in the industry, domestically and internationally, which may support continuous growth in the future.

LOCAL BRAND BEAUTY IMPORTED BRAND

More products and Brand Variety -
Less product variety- Single Brand Mostly Single Brand
multibrand, multiconcept
Middle - high price Offer best products at reasonable price Very High Price

Some product base and color are not

Products developed to suit local people Products developed to suit local
suitable for local people skin color and
skin condition people skin color and condition
condition

Plain and unattractive packaging design Appealing packaging design Appealing packaging design

They operate their own factory and

OEM by Various leading manufacturers,
have to manage the raw material which
flexible in production with specific
tend to go out of style rapidly due to
expertise and potential to produce high Comparable quality with a higher price
quick change in trend and popularity,
quality product comparable to top
could cause a conflict between
Brands
marketing and manufacturing unit

Targeting Mid-End market , accessing a

large customer base. With a potential to
High end price, high positioning and
expand retail and distribution channels
Limited in some location especially high target group make it difficult to
and as a key account client, retail
rural small town due to price positioning expand the retail channel to the
space provider gives us a very first
upcountry
opportunity to choose and secure the
best retail space

Limited distribution channel – available Available at various distribution Limited distribution channel – available
only at retail shop channels only at retail shop

Product Procurement
1. Procurement process
The Company does not have the policy to produce the products by itself. All products are made by many manufac-
turers who have professional in various kinds of products. The products procurement process are shown below.

New product development is responsible by R&D and purchasing team, corporate with marketing and sales team.
The process starts from (1) Survey for popularity and trend of both domestic and international markets; (2) Plan for initial
concept of product which means identify initial characteristics and specification of product to meet market requirement. This
includes general specification, e.g. color, smell, intensity, specific property such as anti-oxidant and reduce stretch-mark.
Then determine the active ingredient which provides specific specification; (3) design the package for such products.

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Regarding product production, the Company will find product manufacture and package manufacture separately by
(4) the package designed by the Company will be delivered to package manufacturing plant in Thailand and other countries.
The prototype of package will be testes at product manufacturing plant to ensure matching of product and package, without
leakage or other defect; (5) Produce all packages and deliver them to product manufacturing plant.
After finishing initial concept planning for products (6) R&D tem will make order to manufacturers in Thailand and
other countries, who are professional in producing each kind of products. The manufacturers will procure all raw materials by
themselves. However, some product manufacturing plant will also be responsible for package manufacturing, depending on
professional of each plant; (7) Product will be tested for chemical and physical properties at the plant. Some products with
specific chemical properties will be tested outsource for confirmation. In addition, the Company will also test the product by
itself to ensure that the product’s qualification match with its requirement before sale (8) Finished products for consumers.
Regularly, ordering price will not be changed dynamically. If manufacturers require increasing price, the negotiation
must be done in advance. In addition, the Company makes annual plan for manufacturing and new product launching which
cause flexibility in selling price adjustment plan.
2. Purchasing
rd
Process
In the 3 quarter of 2013, the Company has launched Beauty Market under the concept of large multi-brands stores
which are beauty specialty stores, where focuses specifically on beauty products. The store contains almost 300 famous
brands, both local brands and inter brands e.g. America, Europe, Korea, Japan, etc.,, containing around 4,000 - 9,000 SKUs
of beauty products. In addition, there are products of a selective brand, Beauty Cuisine, sold only in Beauty Market’s stores.
Thus, the purchasing process is important for business operation. The process is shown below;

1. Market Survey
Product purchase is responsible by R&D and purchasing team, corporate
with marketing and sales team. The process starts from (1) Survey for
popularity and trend of both domestic and international markets; (2) Se-
2. Product Selection lect the product to be purchase, which means determination of product’s
characteristics and specification to meet market requirement; (3) Select
purchasing source that must be brand’s owner or standard source; (4)
3. Source selection
Plan for order quantity. Since Beauty Market has 4,000-9,000 SKUs, thus
the Company try to maximize inventory management efficiency by mini-
4. Order planning mize order quantity which can still keep good purchasing condition. The
Company will also maximize efficiency of inventory turnover by keeping
sufficient stock and avoid loosing of sales opportunity from stock short-
5. Price/terms negotiation age. The ordering policy of Beauty Market focuses on low order quantity
with suppliers for quick stock turnover to meet customers’ needs; (5) Price and/or terms
negotiation for maximize efficiency to maintain gross profit margin; (6)
6. P.O. issuance Issue purchase order according to agreed price and purchasing terms; (7)
The suppliers will deliver products to the Company’s warehouse. The
Company strict seriously on delivery date because low inventory, thus the
7. Product delivery delivery must be on time for greatest performance of inventory manage-
ment.

Customer Satisfaction Guarantee

Since 2008, the Company allow customers, who is unsatisfied with any product, returning it within 14 days after the
date of receipt. This policy is developed to create customer’s confidence in quality and safety, including to collect suggestions
about returned product for improvement. However, there were only a few customers returned the products, equal to 0.1% of
total sale. Other than customers’ suggestion regarding the returned product, the Company has never received any complaint
about product’s quality from either customer or authorized agent from Food and Drug Administration of Thailand.
Cosmetics and skin care products (exclude accessories) are subjected to receive permission from Food and Drug
Administration of Thailand (“FDA”) according to the announcement of Ministry of Public Health. There are 2 categories of
products, which are
• Controlled cosmetics: Ministry of Public Health has determined all cosmetic groups as controlled cosmetics,
effective on September 26, 2008. The controlled cosmetics are subjected to submission of cosmetics registration application
and presenting registration number on the products label. Most of the Company’s cosmetics fall into this category.

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• Specially-controlled cosmetics: They are the cosmetics composed of specially-controls substance. There are 1 item
of the Company’s products fall into this category that is Lansley White Cream Body Hair Invisible. Its label must represent
registration number and FDA no. for specially-controlled cosmetics.
Label sample of controlled cosmetics

The official registration labels

Label sample of specially-controlled cosmetics

The spcially-controlled
cosmetics number

The official registration labels

Cosmetics manufacturer or importer has responsibility to submission of registration application with FDA. The Com-
pany will jointly verify product’s label to be comply with Thai law. All of the Company’s products have already received FDA’s
permission.
The Standards of Manufacturer Selection.
The company focuses on the quality of manufacturer and distributors, all the manufacturers must have been ap-
proved legally by the Food and Drug Administration and there should be the evaluation rules for the manufacturer and dis-
tributors. The rules should first focus on the quality. The evaluation rules are classified as below;
• Quality level/score 50%
• Price level/score 20%
• Delivery’s Punctuality level/score 10%
• Service level/score 10%
• Credit level/score 10%

Most of the company’s major manufacturers obtain the GMP Standard (Good Manufacturing Practice) (Some are in
process). The company continuously evaluates the manufacturers and distributors in every year for ensuring that each of them
can preserve the quality and standard in the appropriated level continuously. Nowadays, the company has got the product
supplying from around 20 manufacturers which have its own proficiencies. For the popular products, the company will have
2 manufacturers to supply the product simultaneously.

Environmental problem ---- No

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Agreement on the operation of business

• Beauty Buffet Franchise Agreement
The company supplies the products in Franchise Program to the 6 distributors and has issued the policy not to
permit setting up any franchise in Thailand. However, if one of 6 distributors closes down, the franchisee can move and find
another location to set up the business. In this case, the company offers to make the franchise agreement for the obviousness
in management. The content of the agreement are as follow;
Agreement (for Franchisee)

No. Franchisee Location Sign date

1. C&N International ordinary partnership by Mr. Pratya Big C (Bangna) April 1st, 2011
Levan
2. V & P ordinary partnership by Mr. Wasan Korjareun Big C (Prae) April 1st, 2011
3. Chanakarn Trading Assemblyby Central (KornKaen) April 1st, 2011
Mr. Weerapol Nantanirun
4. Ms. Chanakarn Nantanirun Big C (Skolnakorn) April 1st, 2011
5. Mrs. Nanporn Siriwattanalert Central July 2nd, 2011
(Udonthani)
6. S and V ordinary partnership by Tesco Lotus July 11th, 2011
Mr. Wasan Korjareun (Uttaradit)

Relationship: Mr. Pratya Levan has served the board and the executive of the company since the second
trimester of 2012.
there is no any reference to the other company agreement or any board and executives.
Agreement Term: The agreement shall have the effect for 5 years, starting from the sign date. The agreement is
extendable in case of the franchisee is not in any infringement and work under the
agreement correctly.
Content • Franchisee has the right to set up the franchise of Beauty Buffetas the stated location.
Franchisee has to use the “Franchise Beauty Buffet system” which had been indicated
by the company. It is including the decoration, pricing, employee training, Product
quality control and Services, trading by computer system and etc. these indicating factors
is to take the same standard as the original business.
Any expenses which come from the decoration, employment, rental and etc. would be
under the responsibility of the Franchisee.
The company will sporadically provide the evaluation for preserving the brand’s standard
of the company.
Franchisee has no right to transfer any right to another unless getting the commitment
from the company. Moreover, as long as the agreement is still effective, Franchisee has
no right to adjust or change the rate of shareholders or any investment otherwise getting
the commitment from the company. All 5 years after the agreement ends, franchisee has
to keep all information as the confidence and has not operated any business as the
competitor of the company.
Payment is followed the company policy.
Franchisee’s Expenses: Entrance fee which have pay once at the sign date.
Franchisee can purchase the products in the discount rate as in the agreement stated.
In the case that Franchisee need any accessories, Franchiser can provide the accessories or
utilities that is necessary to run the business and also support the permanent employee to
Franchisee. Franchisee will pay the Franchisor as the reasonable expenses combined
with the expenses on operating business.
Franchisee will monthly pay for the transportation charge and service charge to the company
as the agreement stated mutually.
The company considers and confirms that all conditions are the same conditions in every
agreement.
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• Beauty Buffet Distribution Agreement

In 2012, the company had expended market into the foreign countries. The main policy is to set the local
distributors for selling the products in the region efficiency. The company starts the policy at Cambodia, it’s because we see
the capability of distributors. The brief content of agreement is below;
Partner Market Five Co., Ltd. (“Distributors”)
Relationship: Distributor has no any relevance with the company.
Agreement Term: this agreement shall take an effect for 1 year. The effective date is from 31 January, 2012.
This agreement is expandable mutually by the written letter.
Content: • Distributor has the right to distribute or sell the company’s products under the trading mark
“by Beauty Buffet” “by Beauty Cottage” in Cambodia,Laos, Vietnam (“Sale Territory”).
Within the effective date, the distributor has no right to appoint other party as the sale
representatives to sell the products in the Sale Territory and the Distributor will not
distribute or serve as the sale representatives for same kind of the company’s products.
-Distributors must build and decorate the work location following the approved structure
of the company.
-The company will sell the products to the distributor in the retailer price with the
discounted rate as the agreement stated mutually and the distributors can adjust the
price without the company’s commitment.
-The Distributor pays the payment in THB, If there is a letter of guarantee worth more
than 200,000 baht from Siam Commercial Bank, if there is no letter of guarantee from
Siam Commercial Bank, the distributor must pay in full amount before the delivery of goods.
-For any claims, the distributor can request for the claim, but the claim price should not
exceed over the mutually-agreed price and the action would be taken place within 30 days
after the date when the defects were found.

• Ordering agreement (agreement on the secret of production formula)

Normally, the company will place orders to the factories that specialize in different productivities. The company offers
the agreement to every factory that participate in the production formula. The main point of agreement is to state that the
manufacturers will not disclose any formula or ingredient of the products including the processes of the production to any
other companies. The manufacturers will not produce the products for distributing without the appointment from the com-
pany even if while the manufacturers are still producing the products for the company or the company has terminated the
production, all conditions in this agreement shall take effect continuously for 1-3 years. (Each manufacturer has the different
terms, but generally between 1-3 years)
Undelivered Order
The company do not provide a manufacturing by customer order, so the company does not have any undelivered order.

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Corporate Social Responsibility(CSR)

Beauty Community Public Company Limited was established in 2000 and registered in The Stock Exchange of Thailand
on December 2012 with registered capital at 300 million baht. The Company operates retail business of cosmetics and skin
care under 5 concepts, those are BEAUTY BUFFET, BEAUTY COTTAGE,BEAUTY MARKET), MADE IN NATURE, andGirly
Girl. In 2013, the Company’s business achieved good performance result with continuous growth based on the following
guidelines;

Corporate Philosophy
“ Creative Dynamic Sustainable ”

Vision
“ We Create Beauty Products For a Beautiful Life ”

Mission
1. Create unique high quality beauty products to meet the demands of modern life style.
2. Offering the products to the target groups by expanding distribution channels across the country and region.
3. Developing competitive abilities of the organization to support the ever-changing market and enhance sustainable
growth.
4. Operating the business with good governance and maximize the benefits of shareholders, employees, and the
society.

B E A U T Y Core Values
B Beyond customer’s Expectation
E Endless Creativity
A Accountability
U Undertake 100 % result
T Trustworthy Teamwork
Y Young lifestyle
Color codes of the Company’s logo

No.1 Pink = BEAUTY We believe that beauty is also happiness. We dedicate ourselves to create customers’
pleasure by providing them both internal and external beauty for their healthy.
No.2 Orange = COMMUNITY Our customers are their main part in the beauty community. We will always
share beauty knowledge and tips by arranging activities with customers continuously.
No.3 Pale Blue = LIFE STYLE We will always create new innovation to meet trendy and dynamic lifestyle.
No.4 Brown = ECO FRIENDLY We will select materials and composition that are friendly with environment.

The organization’s philosophy, vision, missions, value and logo’s color codes show that the Company takes roles
and responsibilities on shareholders, partners, employees, clients, community, society, and environment into account. In
addition, the Company commit in social responsibility by integrating good corporate governance into its policy for
efficient, transparent, verifiable management. To create development and sustainable growth, the Company usesthe
following 8 principles as guidelinesfor its operation.
1. Fair operating practices
2. Anti-Corruption
3. Respect for human rights
4. Fair treatment for labor
5. Consumer Responsibility
6. Environmental Preservation
7. Community or society involvement and development
8. Creation and disclosure of innovation from operation

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1. Fair operating practices

The Company respects the rights of every group of stakeholders and has created a policy which is important in treating
all stakeholders as follows;
Shareholders : The Company is committed to dealing businesses with the knowledge and management skills as best as
possible in all cases with the honesty and fairness to both major and minor shareholders for the best
interest of shareholders as a whole. This includes disclosure of information on a regular basis with
completeness and accuracy.
Employees : The Company will provide fair compensation to employees, maintain the working environment that is safe
for life and property and give an emphasis on the development of employees’ potential thoroughly and
consistently. It will also strictly comply with laws and regulations that are employee-related and avoid any
action that is deemed unfair which may affect the career integrity of the employees as well as treat the
employees with courtesy and listen to opinions and suggestions from all employee levels equally and fairly.
Clients : The Company is committed to create customers’ satisfaction and confidence, including take care and
responsible for customers. Our customers will receive products and services with quality and standards
at a reasonable priceand comply with applicable standard. The Company will also comply with terms and
condition of the agreement entered into by the Company and customer, along with developing higher
standard of products and services continuously.
Partners and creditors :The Company will not practice corruption in dealing businesses with its partners and creditors and is
committed to comply with conditions strictly prescribed with creditors, e.g. the purposes of payment,
reimbursement, the regulations of the quality of collateral and any other agreements with creditors to
achieve mutual benefits.
Competitors : The Company will conduct operations under the rules of good competition, will not seek competitors’
confidential information by dishonest or improper means, and will not damage the reputation of its
alleged competitors without unfounded grounds.
Society : The Company will not take any action that may result in damage to society, natural resources, and
environment. Instead, it seeks opportunities to support creative social activities and social responsibility
among employees at all levels continuously and seriously as well as to control the practice strictly in
accordance with the spirit of the law and regulations issued by regulatory agencies.
2. Anti-Corruption
The Company has defined a business code of conduct to control employees for working with honesty, comply with
laws, respect for others’ rights, including preserve internal and external environment. Focusing on the business code of conduct
will cause honest performance and efficient internal control. As a result, it will generate the confidentiality of capital market
and reliability of investor. In addition, the Company has defined a policy about conflict of interests, covering 2 topics which
are (1) related items: the Company will consider the appropriateness before carefully making any transaction item or deter-
mining the price and condition of any transaction, as if the company is making a transaction with a third party (Arm’s Length
Basis). Also, the Audit Committee will consider and verify the necessity and reasonability of the transaction; and(2)other
situations: the Company will not involve in any other situations which may cause conflict of interests by not requesting,
receiving, or making any payment of corruption benefits for other related parties.
3. Respect for Human Rights
The Company is aware of and respects in human rights, including support equality in society. Thus, the employees’
welfare committee was established directly from employees’ election to be their representative in requesting and
communication with the Company’s management regarding employees’ rights and welfares.
The employees’ welfare committee composts of 5 members. The objectives of the committee are to be the employees’
representative in consulting, controlling, monitoring, and proposing opinion regarding welfare provision. The committee’s
authorizations are as follows;
1. To join the consultation with employer for employee’s welfares provision;
2. To provide opinion and suggestion to employer for employee’s welfares provision;
3. To monitor, control, and take care of employee’s welfares provided by employer;
4. To offer opinion and guideline about welfares, which can be employees’ benefit, to the employees’ welfare committee
4. Fair treatment for labor
The Company has defined in section 3of the good corporate governance principles regarding employees’ topic. The
Company will provide fair compensation to employees, maintain the working environment that is safe for life and property and
give an emphasis on the development of employees’ potential thoroughly and consistently. It will also strictly comply with
laws and regulations that are employee-related and avoid any action that is deemed unfair which may affect the career
integrity of the employees as well as treat the employees with courtesy and listen to opinions and suggestions from all
employee levels equally and fairly.
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The Company considers providing financial compensation to employees fairly based on their qualifications and experi-
ences with annual adjustment. Bonus payment is also provided according to the Company’s performance, together with other
expenses e.g. .g. overtime allowance, allowance, commission, branch management fee. In addition, the Company also provides
special rewards depending on employees’ competency regularly. The Company will provide basic welfares to employees by
respecting human rights and complying with Thai labor law.
The Company has organized the provident fund named “Sinsathaporn Registered Provident Fund” which is managed
by BBL Asset Management Co.,Ltd. Both the Company and employees will make monthly deposit of their part at 3% - 5% of
salary. Establishment of the provident fund has the objectives to create employees’ moral and to attract them to work with the
Company in long term.
The Company has a policy to make continuous improvement for its employees. The key objective of the policy is to
develop employees’ knowledge and understanding in performing their duties efficiently. This is the way to develop career path
of employees and to focus on increasing competitive advantage.
5. Consumer Responsibility
The Company operates its business in cosmetics and beauty products retail business which have large product variety
to cover all consumers’ demand. The Company is committed in customer’s satisfaction and confidence by take good care and
responsible for customers by providing good quality and safe products in reasonable price according to defined standard. In
addition, the Company will also comply with terms and condition of the agreement entered into by the Company and cus-
tomer, along with developing higher standard of products and services continuously.
• Cosmetics and skin care products (exclude accessories) are subjected to receive permission from Food and Drug
Administration of Thailand (“FDA”) according to the announcement of Ministry of Public Health. There are 2 categories
of products; (1) controlled cosmetics, which are subjected to submission of cosmetics registration application and
presenting registration number on the products label; (2) specially-controlled cosmetics, which composed of specially-
controls substance and its label must represent registration number and FDA no. for specially-controlled cosmetics.
• The products must present details of application method clearly for maximum benefit of consumers.
• The Company has defined the policy to allow customers returning products within 14 days after the date of receipt to be
if they are not satisfied since 2008 (Customer Satisfaction Guarantee). However, the value of returned product was
only0.01% of total sale value.
• The Company has provided many channels; e.g. website, webboard, call center, social media; to receive staff’s and
customer’s opinion for improvement of products.
• There are also several channels to provide consumers the information e.g. website, webboard, call center, social Media.
• The Company concerns in manufacturer’s and supplier’s quality for greatest benefit of consumers. The Company has
determined criteria for manufacturer and supplier evaluation by putting product quality as the 1st priority, followed by
price, on-time delivery, service, and credit term, respectively.
• As the Company will not produce the products by itself, thus it focuses on manufacturer selection. All products are made
by many manufacturers who have specific professional in each kind of products to receive greatest quality of products.
• The Company take good care of both member and non-member customers by arranging marketing activities and sales
promotion regularly, such as
1. For Beauty Buffet, customers will receive some points when buying the products and use the points as product discount
in next buying.
2. Special for Privilege Member to buy new products with special discount20%
3. Member customers who buy products at Central or The Mall department store at midnight (Mid Night Sale)will receive
double points.
4. Customers who go shopping in the birth month will receive 25% discount but not exceed5000 baht (Birthday Promotion
offers20% discount).
6. Environment Preservation
The Company will not take any action that may result in damage to society, natural resources, and environment. Instead,
it seeks opportunities to support creative social activities and social responsibility among employees at all levels continuously
and seriously as well as to control the practice strictly in accordance with the spirit of the law and regulations issued by regu-
latory agencies. The Company is also aware of importance in environment preservation by starting from inside the organization.
Thus, the project of “Wonderful glasses” was created with the objectives as follows;
1. To implant employees’ conscious for cooperation in energy saving and cost saving of the Company;
2. To support team work for achievement in the common target;
3. To support enjoyment of work and create activity among employees;
4. To provide some chance to allow employees showing energy saving in their daily life, both internal and external the organization;
5. To enhance company’s image regarding good environment and society.
This project received good response from the organization at whole and achieved the set objectives.

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7. Community or society involvement and development

• Donation for blind scholarship
The Company donated money for blind scholarship, together with clothes and personal stuffs to the Christian Founda-
tion for the Blind in Thailand “CFBT”

Smiling faces of the blinds made BEAUTY full with happiness at

the Christian Foundation for the Blind in Thailand “CFBT”, Petchaburi Province

• Conduct the skin care and make-upworkshop

The Company allowed skilled people joining the workshop that provided knowledge of skin care and make-up in correct
manner for applying in their lives. The workshops are held for whole year in interested organizations or department stores.

Photos ofskin care and make-up workshop environmentin the interested organizations or department stores

• Supporting in Breast Cancer Treatment Project

Beauty Buffet has cooperated with Woman&Home magazine to pro-
duce the T-shirt, designed by Ms. PichitraBoonyarat who is a famous de-
signer, for selling at 450 baht per piece. The revenue of this project was do-
nated to Queen Sirikit Center for Breast Cancer to use as expenses of breast
patient treatment.

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• Donation for flood victims through Krobkruakao 3

The Company donated 100,000 baht plus employees’ donation of 8,000 baht and10,000 bottles of drinking water for
helping flood victims through Krobkruakao 3.

• Dektoh Fund
Beauty Buffet invited some beautiful ladies to join Ms. Areeya (Pop) for supporting innocent children
All were happy with donation of some revenue from selling Winter Wish Gift Set to Dektoh fund at100,000 baht.
Ms. Areeya (Pop) was a representative to receive this amount of money.

• Help almost 200 sick and disabled dogs

Beauty Cottage coordinated with volunteers of the animal help center of Rajamangala to help almost 200 sick and disa-
bled dogs, that were under responsible of Ms. Rattana and Ms. SomjaiHohklong. Beauty Cottage donated30,000 baht, to-
gether a lot of food and medical supplies.

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• Joined donation with Morning News for breath Fund

“The Company joined donation with Morning News for breath Fund to purchase
the aspirators for lacked hospital at the amount of 100,000 baht”

In addition, the Company also joined many activities of communities or society development. For example;
• Supporting of charity bowling game of the Directorate of Personnel to earn money for social service activities;
• Supporting of charity golf competition of the students of Royal Thai Army War College to donate for public charity;
• Supporting of soccer games of Anusorn Academy team to bring them joining the Bangkok Academy League No. 7;
• Donation of money for conducting artist camp in the topic of “Art for All : Art for life quality”
• Providing computer, accessories, and computer tables to SuanKaew temple, Bang Laen sub-district, Bang Yai
district, Nonthaburi province.
8. Creation and disclosure of innovation from operation
The Company always distributes the knowledge about its business operation to third parties e.g. how to use cosmetics,
make-up technique for matching with place and opportunity via website, call center, social media.

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Research and Development

The Product Development Section and Purchase Department, together with the Marketing Section and Sales Op-
eration Section are responsible for introducing new ideas in producing new products and exploring the market trends and
market direction. They observed the opinion of salesperson and conducted the meeting to find the best knowledge, technol-
ogy, innovation and active ingredients, in order to develop the products that meet the needs of the markets. The Product
Development Section will gather sales information of each product, which representing the demand of the customer, and use
the said information as the guidelines to decide whether which product should be developed further. After that, they observed
the market trends, both domestically and internationally, to follow up the popularity of the products among the customers,
including new popular active ingredient, which has been launched by the Company. The information were analyzed and used
as a plan to develop new product, which can be summarized as follows:
• Increase the volume of the existing products: in which the existing products have high sale volume; this group
of products will be continuously launched or may change the appearance to meet the need of the customers.
• Develop new products in accordance with the market trend, in order to meet the trend and keep customer
attraction.
• Develop new products to replace the existing products; this is done when the sales volume started decrease
and the products did not meet the market trend. The research team will develop the replacement products,
which creates more opportunities to attract the customers.

Research
Development
Beauty Community Public Company Limited
&

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Assets Used in Business Operation

Fixed Assets
The assets that Company used in business operation at December 31, 2013 are as follows:
• Land
The Company owns 1 Land, title deed no. 1699 with the area of 1 Rai, 1 Ngan, and 20 Square Wah, located at Nuan
Chan Sub-District, Bung Kum District, Bangkok Metropolis. In the present days, this land is used as the headquarter of the Com-
pany, with the net value at December 31, 2013 and 2012 of 19.24 Million Baht, without any obligation.
• Leasehold
The Leasehold Assets of the Company are as follows:
The leasehold building for operating the retail business, such as Beauty Buffet MBK Branch 1, which calculated at cost
less the accumulated depreciation cost using straight-line basis according to the lease term of 7 years, the Company has no
obligation to pay the rental cost of the leasehold, as it is onetime lease payment only. As at December 31, 2013 and 2012, the
value of leasehold were 11.10 million Baht and 12.04 million Baht respectively. The Company has used the leasehold right as a
guaranteed for long-term loan from financial institution. However, in 2nd quarter of 2013, the Company has paid back total loan
amount and has redeemed such securities,
Though the leasehold right of MBK Branch 1 will be ended in year 2013, the Company has renewed the contract for 10
years, which will be ended in year 2023.
The leasehold right for other areas, which are nearby the headquarter, with the purpose of using as parking area, and office sup-
plies storage as follows:

Lease Area Details of Contract

Land and Building, total area of 203.5 Square Wah, located at Lessor : Mrs. Tanyapon Kraibhubes
10/833Nuan Chan 34 Alley, Nuan Chan Road, Nuan Chan Sub- Duration : 1 January2012–31 December 2014
district, Bung Kum District, Bangkok Metropolis Rental Fees : 29,000 Baht per month

Land and Building, total area of 203.5 Square Wah, located at Lessor : Mrs. Jinda Piripant
Nuan Chan 34 Alley, Nuan Chan Road, Nuan Chan Sub- Duration : 1 June 2012-31 May 2015
district, Bung Kum District, Bangkok Metropolis Rental Fees : 11,500 Baht per month

• Operating leases
The Company has made a short-term operating lease for few years to operate the retail shops, by opening branches to
reduce the cost and to provide the flexibility for business expansion. As at December 31, 2012, the Company has the short-term
lease contract, which was conducted with non-related person as follows:

Operating leases for Beauty Buffet Branches at December 2013

No. Branch Starting date of operation
1 MBK CENTER 1 1-Aug-2000
2 TESCO LOTUS - BANGKAPI 1-Nov-2004
3 THE MALL - BANGKAPI 23-Dec-2004
4 TESCO LOTUS - BANGNA 1-Jan-2005
5 CENTRAL PLAZA - RAMA 2 16-Mar-2005
6 THE MALL - NGAMWONGWAN 29-Apr-2005

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6 THE MALL - NGAMWONGWAN 29-Apr-2005

7 TESCO LOTUS - CHAREONPHOL 6-Aug-2005
8 FORTUNE TOWN, RACHADAPHISEK RD. 22-Oct-2005
9 TESCO LOTUS - BANG PHLI 19-Nov-2005
10 THE MALL - RAMKHAMHAENG 2-Dec-2005
11 THE MALL - THAPRA 13-Dec-2005
12 CENTRAL PLAZA - PINKLAO 12-Apr-2006
13 LAEMTONG - BANGSAEN 2-Jun-2006
14 TESCO LOTUS - LAK SI 31-Aug-2006
15 CENTURY THE MOVIE PLAZA 17-Oct-2006
16 BTS - SALADAENG 28-Nov-2006
17 CENTRAL PLAZA - WONG SAWANG 25-Dec-2006
18 TESCO LOTUS - NAVA NAKHON 28-Mar-2007
19 BIG-C SUPERCENTER - HUA MAK 28-Apr-2007
20 MAJOR HOLLYWOOD - RAMKHAMHAENG 9-Apr-2008
21 MAJOR HOLLYWOOD - PAKKRED 5-Jun-2008
22 BIG-C SUPERCENTER - SAMUTPRAKAN 23-Aug-2008
23 MAJOR CINEPLEX - RATCHAYOTHIN 2-Sep-2008
24 MAJOR CINEPLEX - PINKLAO 10-Sep-2008
25 MBK CENTER 2 21-Oct-2008
26 BIG-C SUPERCENTER - LAMPANG 10-Nov-2008
27 FASHION ISLAND 16-Nov-2008
28 CENTRAL PLAZA - CHAENGWATTANA 27-Nov-2008
29 BIG-C SUPERCENTER - BANGNA 1-Dec-2008
30 CENTRAL PLAZA - RATTANATHIBET 2-Dec-2008
31 TESCO LOTUS - SRINAKARIN 12-Dec-2008
32 TESCO LOTUS - LAEMCHABANG 15-Dec-2008
33 TESCO LOTUS - RAYONG 9-Jan-2009
34 CENTRAL PLAZA - PATTAYA BEACH 21-Jan-2009
35 CENTRAL CHINA WORLD 28-Feb-2009
36 UNION MALL 12-Mar-2009
37 SEACON SQUARE 2 - SRINAKARIN 28-Mar-2009
38 TESCO LOTUS - KRABI 10-Apr-2009

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37 SEACON SQUARE 2 - SRINAKARIN 28-Mar-2009

38 TESCO LOTUS - KRABI 10-Apr-2009
39 CENTRAL PLAZA - CHIANG MAI AIRPORT 28-May-2009
40 CENTRAL PLAZA - CHONBURI 29-May-2009
41 TESCO LOTUS - SAMUI 1 29-May-2009
42 TESCO LOTUS - KLONG 7 23-Jun-2009
43 BIG-C SUPERCENTER - PHRAE 13-Jul-2009
44 BIG-C SUPERCENTER - PHITSANULOK 17-Jul-2009
45 BIG-C SUPERCENTER - CHONBURI 24-Jul-2009
46 AYUTTHAYA PARK 2 1-Aug-2009
47 THE PACIFIC PARK SRIRACHA 12-Aug-2009
48 BIG-C SUPERCENTER - NAKHON SAWAN 15-Aug-2009
49 TESCO LOTUS - LUM LUK KA 26-Aug-2009
50 TESCO LOTUS - SAMUI LAMAI 2 1-Oct-2009
51 ROBINSON - RATCHABURI 9-Oct-2009
52 TESCO LOTUS - KANCHANABURI 19-Oct-2009
53 BIG-C SUPERCENTER - CHAENGWATTANA 20-Oct-2009
54 TESCO LOTUS - AMATA NAKHON 20-Oct-2009
55 TESCO LOTUS - BANPONG 6-Nov-2009
56 TESCO LOTUS - SUKHAPHIBAN 1 10-Nov-2009
57 TESCO LOTUS - PRANBURI 15-Nov-2009
58 CENTRAL PLAZA - KHONKAEN 3-Dec-2009
59 THE MALL - KORAT 12-Dec-2009
60 TESCO LOTUS - ARANYA PRATHET 17-Dec-2009
61 BIG-C SUPERCENTER - RATCHADA 19-Dec-2009
62 BIG-C SUPERCENTER - SRINAKARIN 20-Dec-2009
63 SAHATHAI PLAZA - THUNG SONG 23-Dec-2009
64 TESCO LOTUS - PHUKET 24-Dec-2009
65 BIG-C SUPERCENTER - PHUKET 25-Dec-2009
66 TESCO LOTUS - PINKLAO 13-Feb-2010
67 BIG-C SUPERCENTER - UBON RATCHATANI 13-Feb-2010
68 CENTRAL PLAZA - RAMA 3 5-Mar-2010

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67 BIG-C SUPERCENTER - UBON RATCHATANI 13-Feb-2010

68 CENTRAL PLAZA - RAMA 3 5-Mar-2010
69 IMPERIAL WORLD - SAMRONG 1-Apr-2010
70 BIG-C SUPERCENTER - MAHACHAI 1-Apr-2010
71 HUA HIN MARKET VILLAGE 1-Apr-2010
72 THE MALL - BANGKAE 12-Apr-2010
73 BIG-C SUPERCENTER - CHAENGWATTANA 2 1-May-2010
74 BIG-C SUPERCENTER - LAM LUK KA 12-May-2010
75 BIG-C SUPERCENTER - RAMA 2 22-May-2010
76 BTS - PHROM PHONG 13-Jun-2010
77 BTS - SIAM PARAGON 21-Jun-2010
78 BTS - CHID LOM 24-Jun-2010
79 TESCO LOTUS - NORTH PATTAYA 1-Jul-2010
80 BIG-C SUPERCENTER - PHETCHABURI 1-Jul-2010
81 BIG-C SUPERCENTER - NAKHON PRATHOM 20-Jul-2010
82 BIG-C SUPERCENTER - RATTANA TIBETH 14-Aug-2010
83 BIG-C SUPERCENTER - SAKON NAKHON 15-Aug-2010
84 CENTRAL PLAZA - PATTAYA 14-Sep-2010
85 TESCO LOTUS - RAMA 2 15-Sep-2010
86 TESCO LOTUS - SUKHAPHIBAN 3 1-Oct-2010
87 BIG-C SUPERCENTER - RAMA 4 3-Oct-2010
88 BIG-C SUPERCENTER - LAM LUK KA 2 8-Oct-2010
89 ROBINSON - CHANTHABURI 10-Oct-2010
90 TESCO LOTUS - KRA TUM BAEN 21-Oct-2010
91 TESCO LOTUS - CHUMPHON 29-Oct-2010
92 FUTURE PARK - RANGSIT 17-Oct-2010
93 ROBINSON - TRANG 11-Nov-2010
94 DIANA - HAD YAI 23-Nov-2010
95 BIG-C SUPERCENTER - RANGSIT 24-Nov-2010
96 TESCO LOTUS - BOWIN 24-Nov-2010
97 BIG-C SUPERCENTER - KAMPHAENGPHET 2-Dec-2010
98 TESCO LOTUS - NONGCHOK 12-Jan-2011

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99 TESCO LOTUS - PRACHUAB 13-Jan-2011

100 BIG-C SUPERCENTER - RATCHADAMRI 2-Feb-2011
101 TESCO LOTUS - CHUMPHAE 16-Feb-2011
102 TESCO LOTUS - SALAYA 28-Feb-2011
103 CENTER ONE - VICTORY MONUMENT 9-Mar-2011
104 BIG-C SUPERCENTER - HAT YAI 2 15-Mar-2011
105 CENTRAL PLAZA - CHIANG RAI 30-Mar-2011
106 BIG-C SUPERCENTER - SUKSAWAT 1-May-2011
107 TESCO LOTUS - KALASIN 6-May-2011
108 BIG-C SUPERCENTER - HAD YAI 23-May-2011
109 TESCO LOTUS - RAMA 4 1-Jul-2011
110 TESCO LOTUS - TRAD 10-Aug-2011
111 TESCO LOTUS - CHANTHABURI 15-Aug-2011
112 CENTRAL PLAZA - LADPRAO 28-Aug-2011
113 TESCO LOTUS - BUENGKAN 29-Sep-2011
114 TESCO LOTUS - THALANG 5-Oct-2011
115 TESCO LOTUS - TAK 6-Oct-2011
116 CENTRAL PLAZA - PHITSANULOK 20-Oct-2011
117 ICON SHOPPING CENTER - SURAT THANI 10-Nov-2011
118 TESCO LOTUS - KABIN BURI 30-Nov-2011
119 TESCO LOTUS - KHONKAEN 1-Dec-2011
120 BIG-C SUPERCENTER - HANG DONG 3-Dec-2011
121 CENTRAL PLAZA - RAMA 9 14-Dec-2011
122 TESCO LOTUS - THAYANG 21-Dec-2011
123 TESCO LOTUS - PRACHINBURI 11-Jan-2012
124 CENTRAL PLAZA - UDON THANI 27-Mar-2012
125 BIG-C SUPERCENTER - SISAKET 9-Apr-2012
126 MEGA BANGNA 3-May-2012
127 ZEER - RANGSIT 9-May-2012
128 THE OLD SIAM PLAZA 15-May-2012

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125 BIG-C SUPERCENTER - SISAKET 9-Apr-2012

126 MEGA BANGNA 3-May-2012
127 ZEER - RANGSIT 9-May-2012
128 THE OLD SIAM PLAZA 15-May-2012
129 TESCO LOTUS - BANBUENG 25-May-2012
130 TESCO LOTUS - PHAYAO 25-Jul-2012
131 BIG-C SUPERCENTER - SATOON 15-Aug-2012
132 FAIRY PLAZA - KHON KAEN 21-Aug-2012
133 LAEMTONG - RAYONG 21-Aug-2012
134 TESCO LOTUS - WARIN 5-Sep-2012
135 TESCO LOTUS - NAKHON-IN 27-Sep-2012
136 CENTRAL PLAZA - SURAT THANI 11-Oct-2012
137 TESCO LOTUS - SA DAO 18-Oct-2012
138 SEACON SQUARE - BANGKAE 1-Nov-2012
139 CENTRAL PLAZA - LAMPANG 30-Nov-2012
140 BIG-C SUPERCENTER - CHIANG RAI 1-Dec-2012
141 TESCO LOTUS - KUMPHA WAPI 6-Dec-2012
142 TESCO LOTUS - UTTARADIT 16-Dec-2012
143 THE HARBOUR - CHIANG MAI 20-Dec-2012
144 BIG-C SUPERCENTER - SAPHAN KWAI 25-Dec-2012
145 TESCO LOTUS - NONGBUA LAMPOO 26-Dec-2012
146 TESCO LOTUS - PHITSANULOK 2 27-Dec-2012
147 TESCO LOTUS - SERMTHAI MAHASARAKHAM 27-Dec-2012
148 TESCO LOTUS - MAESOD 10-Jan-2013
149 BIG-C SUPERCENTER - RAMINTRA 29-Jan-2013
150 BIG-C SUPERCENTER - ROI-ET 31-Jan-2013
151 TESCO LOTUS - NAKHON SAWAN 21-Feb-2013
152 TERMINAL 21 SHOPPING MALL 26-Feb-2013
153 ROBINSON - KANCHANABURI 28-Feb-2013
154 SIRIBAN SHOPPING CENTER 5-Mar-2013
155 IT SQUARE - LAKSI 5-Apr-2013

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154 SIRIBAN SHOPPING CENTER 5-Mar-2013

155 IT SQUARE - LAKSI 5-Apr-2013
156 CENTRAL PLAZA - UBON RATCHATANI 5-Apr-2013
157 TESCO LOTUS - BANGPAKONG 14-May-2013
158 BIG-C SUPERCENTER - ANGTHONG 28-May-2013
159 JUNGCEYLON - PHUKET 16-Jun-2013
160 TESCO LOTUS - CHIANGKHONG 25-Jul-2013
161 BIG-C SUPERCENTER - KALASIN 31-Jul-2013
162 TESCO LOTUS - RUAMCHOK CHIANGMAI 1-Aug-2013
163 BIG-C SUPERCENTER - LAMPHUN 21-Aug-2013
164 BIG-C SUPERCENTER - ISSARAPHAP 23-Aug-2013
165 TESCO LOTUS - MINBURI 1-Sep-2013
166 TESCO LOTUS - LADPRAO 16-Sep-2013
167 BIG-C SUPERCENTER - SUPHANBURI 27-Sep-2013
168 TESCO LOTUS - KLAENG 3-Oct-2013
169 TESCO LOTUS - WIANGSA 10-Oct-2013
170 SAHATHAI - NAKHON SITHAMMARAT 20-Oct-2013
171 CENTRAL PLAZA - CHIANG MAI 14-Nov-2013
172 ROBINSON - SARABURI 22-Nov-2013
173 TESCO LOTUS - SONGKHLA 28-Nov-2013
174 ROBINSON - BANGRAK 5-Dec-2013
175 TESCO LOTUS - CHALONG 12-Dec-2013
176 CENTRAL FESTIVAL - HAD YAI 14-Dec-2013
177 ROBINSON - SURIN 20-Dec-2013
178 TESCO LOTUS - PHATTHALUNG 20-Dec-2013
179 BIG-C SUPERCENTER - KHONKAEN 27-Dec-2013
Oversea
1 CAMBODIA 1 25-Feb-2012
2 VIETNAM 21-Sep-2013
3 CAMBODIA 2 12-Dec-2013
4 CAMBODIA 3 12-Dec-2013

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Operating leases for Beauty Cottage Branches at December 2013

No. Branch Starting date of operation

1 CENTRAL PLAZA - LADPRAO 28-Aug-2011
2 TERMINAL 21 SHOPPING MALL 11-Oct-2011
3 CENTRAL PLAZA - PHITSANULOK 20-Oct-2011
4 TESCO LOTUS - KHONKAEN 1-Dec-2011
5 CENTRAL PLAZA - RAMA 9 14-Dec-2011
6 BIG-C SUPERCENTER - CHANTHABURI 19-Dec-2011
7 THE MALL - BANGKAE 23-Dec-2011
8 THE MALL - BANGKAPI 27-Dec-2011
9 CENTRAL PLAZA - PATTAYA BEACH 29-Dec-2011
10 DIANA - HAD YAI 21-Jan-2012
11 CENTRAL WORLD 7-Feb-2012
12 CENTRAL PLAZA - CHAENGWATTANA 11-Feb-2012
13 ROBINSON - SUPHANBURI 2-Mar-2012
14 CENTRAL PLAZA - RATTANA THIBET 22-Mar-2012
15 CENTRAL PLAZA - UDON THANI 27-Mar-2012
16 FASHION ISLAND 3-Apr-2012
17 BIG-C SUPERCENTER - RATCHADAMRI 28-Apr-2012
18 MEGA BANGNA 3-May-2012
19 HUA HIN MARKET VILLAGE 29-May-2012
20 CENTRAL PLAZA - CHIANG RAI 7-Jul-2012
21 LAEMTONG - RAYONG 21-Aug-2012
22 SEACON SQUARE - BANGKAE 10-Sep-2012
23 CENTRAL PLAZA - SURAT THANI 11-Oct-2012
24 CENTRAL PLAZA - CHONBURI 15-Oct-2012
25 THE MALL - KORAT 1-Nov-2012
26 CENTRAL PLAZA - LAMPANG 29-Nov-2012
27 THE MALL - NGAM WONG WAN 3-Dec-2012
28 SERMTHAI - MAHASARAKHAM 21-Dec-2012
29 BIG-C SUPERCENTER - NAKHON SAWAN 24-Dec-2012
30 CENTRAL PLAZA - CHIANG MAI AIRPORT 13-Feb-2013
31 ROBINSON - KANCHANABURI 28-Feb-2013
32 TESCO LOTUS - BANGNA-TRAD 8-Mar-2013

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33 CENTRAL PLAZA - PINKLAO 12-Mar-2013

34 TESCO LOTUS - RAMINTRA 14-Mar-2013
35 BIG-C SUPERCENTER - HUA MAK 19-Mar-2013
36 CENTRAL PLAZA - RAMA 2 22-Mar-2013
37 CENTRAL PLAZA - RAMA 3 28-Mar-2013
38 TESCO LOTUS - NAVA NAKHON 30-Mar-2013
39 CENTRAL PLAZA - UBON RATCHATANI 5-Apr-2013
40 THE MALL - THAPRA 25-May-2013
41 JUNGCEYLON - PHUKET 16-Jun-2013
42 ROBINSON - SAKON NAKHON 27-Jun-2013
43 BIG-C SUPERCENTER - SUPHANBURI 27-Sep-2013
44 CENTRAL PLAZA - CHIANG MAI 14-Nov-2013
45 ROBINSON - SARABURI 22-Nov-2013
46 CENTER ONE - VICTORY MONUMENT 27-Nov-2013
47 TESCO LOTUS - SONGKHLA 28-Nov-2013
48 BIG-C SUPERCENTER - TRANG 4-Dec-2013
49 ROBINSON BANGRAK 5-Dec-2013
50 CENTRAL PLAZA - FESTIVAL HAT YAI 14-Dec-2013
Oversea
1 VIETNAM 21-Sep-2013
2 CAMBODIA 12-Dec-2013

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Operating leases for Beauty Market Branches at December 2013

No. Branch Starting date of operation

1 SEACON SQUARE - SRINAKARIN 19-Jul-2013
2 FUTURE PARK - RANGSIT 18-Oct-2013
3 CENTRAL PLAZA - CHIANG MAI AIRPORT 26-Nov-2013

• Other Fixed Assets

(Unit: Million Baht)

Type of asset Type of right Net value after deducted the accumulated
depreciation (Baht)
2013 2012 Changed
Building and improvement Owner 20,551,918.04 22,242,008.06 -7.60%
Furnitures Owner 88,368,559.85 60,852,252.63 45.22%
Tools and office equipments Owner 9,521,401.21 8,881,845.56 7.20%
Computers Owner 7,069,838.66 3,640,219.82 94.21%
Vehicles Owner 9,791,857.32 5,462,604.01 79.25%
Lessee (Leasing contract with financial
institution) - 1,168,269.04 -100.00%
Construction in progress Owner 2,470,000.00 624,000.00 295.83%
Total 137,773,575.08 102,871,199.12 33.93%

However, other fixed assets as mentioned in the table are the properties own by the Company without any obligation.

• Intangible assets
The Company has invested in software C-Smile and Point of Sales (POS). Moreover, the Company has invested to
develop the software such as Microsoft Dynamic AX 2012 to gain better internal management system. It was estimated that
in year 2014, the intangible assets will be 12.68 million Baht and net value at December 31, 2013 and 2012 are 10.76 and
1.85 million Baht respectively.

Trademark
The Company has registered its trademark, including the products with Department of Intellectual Property, in order
to prevent the infringement. Each trademark will last for 10 years, in which the Company have used for selling products, can
be summarized as follows:

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Despite the above trademark, the Company has owned more than 37 trademarks, which were used in the past
products, including some trademarks that will be used as future brand of the Company.
In year 2013, the Company has filled the application to register the international trademarkof the Company and the
Company’s products: Beauty Buffet, Beauty Cottage, Made in Nature, Beauty Market, and Girly Girl, to avoid the infringement.
The application will be handle to 7 countries, including Vietnam, Cambodia, Lao PDR, Myanmar, China, Indonesia, and
Malaysia. In the present, the registration process is under review of each country.

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Future Projects
In order to meet the business goal, which fo-
cuses on creation of innovative concepts along
with the development of new products, including
the increasing of distribution channel, the
Company has been conducting the following
projects during the past few years:
1. The development of products based
on new concepts
The Company has conducted the project to
develop the new products based on new
concepts that are related to beauty, health and
lifestyles, which are the main expertise of the
Company. This project is done to serve the
needs of the consumers and distribute the
products to different target group of customer.

2. Increasing of product distribution channel

The Company always seeks for new product distribution channel,
despite the existing channel, by developing own the E-Commerce
channel such as Facebook: Beautyplaza and Website: www.
beautyplazaonline.com to allow the customers from different area
to reach the product easily.
3branches
. Continuously expanding new
The distribution through retailer shop is the main in-
come and the most important distribution channel of
the Company in the present days. Therefore, the
Company always keeps on increasing the number of
branches of Beauty Buffet, Beauty Cottage, and
Beauty Market throughout the Country, in order to
distribute more products. The Company plan to open
210 more branches for Beauty Buffet, 70 more
branches for Beauty Cottage and 18 more branches
for Beauty Market in the end of year 2014, with the

4. estimate cost of 180-200 Million Baht.

Investment for improvement of operational systems to support the business
expansion
The Company has invested more money for improving the operational systems to support the business expansion, including
the new branches and new products distribution channels. The Company has constructed the Inventory Building, to support
more product, and Employee Training Center. The construction plan will begin around June 2014 (after the 2014 annual
meeting of shareholder) and end around December 2015. Moreover, the Company has invested in developing of Information
Technology System, Point of Sales (POS), Enterprise Resource Planning (ERP), in which the Company has signed the pur-
chase contract to buy the MICROSOFT DYNAMICS AX 2012 R2 + AX RETAIL Software + Hardware with Tectura (Thailand)
Co., Ltd.. The Company expects to invest for 160 Million Baht for developing the operational system to support business
expansion in the upcoming future.
Legal Disputes
To the present, December 31, 2013, the Company has no legal dispute and any other dispute that may
cause the damage and impact to more than 5 percent of the shareholder’s equity and to business
operations, significantly.
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Capital Structure
Company’s Securities
As at December 31, 2013 and 2012, the registered capital of the Company was 300,000,000.00 Baht, with 300,000,000
ordinary shares par value of 1 Baht per share. The issued and paid up ordinary shares are 300,000,000.00 Baht, with
300,000,000 ordinary shares par value of 1 Baht per share.

• Shareholders
List of 10 major shareholders, at March 12, 2014, are as follows:

At March 12, 2014

List of Shareholders
Number of Shares Percentage

1. Mr. Suwin Kraibhubes Group consists of:

Mr. Suwin Kraibhubes 97,000,000 32.33
Mrs. Tanyapon Kraibhubes 64,999,800 21.67
Mrs. Thurian Sriyong 22,185,300 7.40
Miss Monsuthatip Malaukcaranun 4,000,000 1.33
Mr. Boonchuai Yokkrabut 3,982,400 1.33
Total 192,167,500 64.06
2. Mr. Pracha Dumrongsutthipong 11,200,000 3.73
3. Thai NVDR CO., LTD. 8,411,600 2.80
4. HSBC (SINGAPORE) NOMINEES PTE LTD 5,349,400 1.78
5. Mr. Pratya Levan 4,000,000 1.33
6. STATE STREET BANK AND TRUST COMPANY 3,038,800 1.01
7. Mr. Sunthorn Koorattanaphisarn 2,509,000 0.84
8. Mr. Jeeradej Jongwattanasilkul 2,300,000 0.77
9. Mr. Atthapol Thummanon 2,162,400 0.72
10. Mr. Amornwat Thirakittaporn 2,150,000 0.72

• Dividend Payment Policy

The Company’s dividend payment is made to the shareholder with not less than 50 percent of the profit, after
deducting the income tax payment. The dividend payment is based on Company’s operational performance, Company’s
financial position, Company’s liquidity, business expansion, and other factors that relate to the administration of the
Company. However, the Company may pay the dividend less than the percentage mentioned above, if the profit is needed
to be used for expanding the business.

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Management
Organization Chart Beauty Community Public Company Limited
Board Of Directors
ANNUAL REPORT 2013

Audit Committee

Executive Committee

Internal Audit
BEAUTY COMMUNITY PUBLIC COMPANY LIMITED

Chief Executive Officer

Suwin Kraibhubes M.D.

Company Secretary and Secretary to Chief Executive
Officer
Deputy Chief Executive Officer

Tanyapon Kraibhubes Investor Relations

Director Of Marketing Director Of Operations Director Of Product Development Director Of Logistics and Director Of Finance and Director Of Information
Department Department and Purchasing Department Administration Department Accounting Department Technology Department
Suwin Kraibhubes M.D. (Acting) Sirikan Phattiveranon Suwin Kraibhubes M.D. (Acting) Nattapong Khueanphan Surapon Phetklueng Pratya Levan

Information Technology
Marketing Department Operations Department - Product Development and Warehouse and Logistics Finance and
Department
Beauty Buffet Purchasing Department Department Accounting Department

Operations Department - Human Resource

Business Development and Beauty Cottage and Administration
Interior Design Department
Department
Operations Department -
Beauty Market and
Graphic and Design
Specialty Store
Department
Department

Consumer Product
Department

Sales Training &

Development Department
 ANNUAL REPORT 2013
BEAUTY COMMUNITY PUBLIC COMPANY LIMITED

Management Structure
The management structure has constituted four sets of boards/committees including Board of Directors, Executive
Board, Audit Committee, and Nomination and Remuneration Committee as per below details.
1. Board of Directors
The Board of Directors of the Company constitutes 8 directors as follows.
1. Pol.Lt. Gen. Phadet Charuchinda Independent Director and Chairman of the Board
2. Suwin Kraibhubes M.D. Director / Chief Executibe Officer
3. Mrs. Tanyapon Kraibhubes Director / Deputy Chief Executibe Officer
4. Ms. Monsoothathip Malaukcaranun Director
5. Mr. Pratya Levan Director / Executive Director
6. Dr. Peerapong Kitiveshpokawat Independent Director and Chairman of Audit Committee
7. Col. Attapon Srisangwarn Independent Director and Audit Committee
8. Mr. Viboon Pojanalai Independent Director and Audit Committee
Mrs. Daranee Pathetang has acted as Company Secretary.

The authorized directors acting and binding on behalf of the Company are “Mrs. Thanyaporn Kraipuhbet and Mr.
Suwin Kraiphubet co-sign with affixation of the Company’s seal; or Mrs. Thanyaporn Kraipuhbet or Mr. Suwin Kraiphubet
mutually co-sign with Ms. Monsuthathip Malaakaranan or Mr. Pratchaya Lewan, two persons in total with affixation of the
Company’s seal; or in any document submission to Revenue Department, Ministry of Labour and Social Welfare, Immigration
Bureau, Customs Department, Department of Lands, and Office of Area Land, the submission of request for entry in the
immovable property right register and legal act to Department of Land or Office of Area Land, and the request submission
for registration, financial statements and list of shareholders to Department of Business Development, Ministry of Commerce,
Mrs. Thanyaporn Kraiphubet or Mr. Suwin Kraiphubet or Ms. Monsuthathip Malaakaranan or Mr. Pratchaya Lewan, two of
four persons co-sign with affixation of the Company’s seal.”
Term of office of board of directors
In every Annual General Meeting, the directors must be retired for at least one-third by ratio. If the number of the directors
left the post cannot be equally divided into exact three parts, that number of directors retired will be the nearest figure of
one-third. The directors required for retirement in the first year and the second year after the Company registration, the
casting shall be conducted for which directors will be retired. In next following year, the director holding the post for longest
time shall be the retired director and that director left the post may be re-elected to assume the position again.
Scope of Duties and Responsibilities of Board of Directors
The Board of Directors has authority and responsibility with honesty and care to protect Company’s interest in
Company management according to law, objective, and articles of associations as well as legal resolution of the shareholders’
meeting. The scope of duties and responsibilities of Board of Directors shall be summarized as follows.
1. Legally supervise and manage the Company according to law, objective and articles of association as well as legal
resolution of the Shareholders’ Meeting.
2. Hold the Shareholders’ Meeting to be Annual General Meeting of Shareholders within 4 months from the ending date of
the Company’s accounting period.
3. Hold the Board of Directors’ Meeting at least once within 3 months.
4. Prepare Statement of Financial Position, Statement of Comprehensive Income as of the ending date of accounting period.
They should be approved by the auditor and proposed to the Shareholders’ Meeting for consideration and approval.
5. The Board of Directors may authorize a director or several directors or other persons to perform whatsoever on behalf of
the Board of Directors under the Board of Directors’ control; or may authorize power to such person as the Board of Directors deems
appropriate within the period of time as the Board of Directors deems appropriate. The Board of Directors may cancel, annul, change
or alter the authorized person or that power when viewing as proper.
In addition, the Board of Directors may authorize the Executive Board to have the authority in actions with details of
authorization according to the scope of authority of the Executive Board for the purpose that such authorization should not be in the
way that the Executive Board or the attorney can consider and approve the transaction that the Executive Board or the attorney is the
person who is concerned or has interest or other conflict of interests with the Company or its subsidiary, unless it is the approval of
the transaction according to policy and criteria already considered and approved by the Board and also as required by law.

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6. Determine target, guideline, policy, program and budget of the Company; control and govern the administration and man-
agement of the Executive Board in accordance with the assigned policy unless in the following matters, the Board of Directors must
gain the approval resolution from the Shareholders’ Meeting before any actions including the matter required by law for approval
resolution from the Shareholders’ Meeting such as increase in stock capital, decrease in stock capital, debenture issuance, selling or
transfer of the entire or some important parts of business to other persons or buying or accepting of business transfers of other
Company to belong to the Company, and amendment of Memorandum of Association or Articles of Association, etc.
Moreover, the scope of duties of the Board also includes the governance of the Company according to the Securities and
Exchange Law, the regulations of the Stock Exchange such as connected transaction execution, and buying or selling the important
assets pursuant to the rule of the Stock Exchange of Thailand or laws relevant to the Company’s business.
7. Consider management structure, appoint Executive Board, Chief Executive Officer and other Committees as appropriate.
8. Continuously follow the operating performance according to the program and budget.
9. The directors must not engage in the same nature of business being competitive with the Company’s business or involved
as the partner in ordinary partnership or the general partner in limited partnership or the director of private Company or other
companies engaged in the same nature of business being competitive to the Company’s businesses either for self interest or for
other people’s interests unless notified to the Shareholders’ Meeting for acknowledgement before any appointment resolutions.
10. The director shall notify the Company for acknowledgement without delay if any direct or indirect interests are available
in the contract made by the Company or on increase or decrease in holding of shares or other securities in the Company or associate
Company.
2. Audit Committee
The Audit Committee of the Company constitutes 3 persons as follows.
1. Dr. Peerapong Kitiveshpokawat Independent Director and Chairman of Audit Committee
2. Col. Attapon Srisangwarn Independent Director and Member of Audit Committee
3. Mr. Viboon Pojanalai Independent Director and Member of Audit Committee who is adequately intellectual
and experienced to perform the review of reliability of financial statements.
Ms. Mondakarn Karnpakdee has acted as the Secretary of Audit Committee according to the resolution of the Meeting of
Audit Committee No. 1/2014 on 25th February 2014 ( in 2013, Mrs. Daranee Pathetang acted as the Secretary of Audit Committee ).
Term of office of Audit Committee
The member of Audit Committee shall have the term for holding of the post for 3 years in each time unless the case
of retirement by rotation according to the Article of Associations that the re-election for holding the post again can be done.
Scope of Duties and Responsibilities of Audit Committee
The scope of duties and responsibilities of Audit Committee is summarized as follows.
1. Review the accuracy and adequacy of the Company’s financial statements;
2. Review the appropriateness and efficiency of internal control and internal audit system; and consider the independence
of internal audit unit as well as confirm the consideration on appointment, removal and dismissal of Chief of Internal Audit or other units
responsible for internal audit.
3. Review the Company’s compliance with Securities and Exchange Law, the Stock Exchange’s regulation or any laws
relevant to Company’s business.
4. Consider, select and nominate for appointment of independent person to act as the Company’s business auditor and
propose the remuneration of such person as well as attend the meeting with auditor without the meeting attendance of the
management for at least once a year.
5. Consider connected transaction or transaction that may have conflict of interest in accordance with law and regulation of
the Stock Exchange so as to assure that such transaction is reasonable and extremely beneficial to the Company.
6. Prepare Audit Committee’s report for disclosure in the Company’s Annual Report. Such report must be signed by the
Chairman of Audit Committee and must at least comprise of following data.
(a) Opinion on accuracy, completeness and reliability of the Company’s financial reports
(b) Opinion on adequacy of the Company’s internal control system
(c) Opinion on compliance with the Securities and Exchange Law
(d) Requirement of Stock Exchange of Thailand or laws relevant to the Company’s business
(e) Opinion on appropriateness of the auditor
(f) Opinion on transaction that may have conflict of interest
(g) Number of meetings of Audit Committee and meeting attendance of each member of Audit Committee
(h) Overall opinion or observation acquired from function according to the charter
(i) Other transactions deemed to be recognized by shareholders and general investors under scope of duties and respon-
sibilities gained from the Board of Directors
7. Perform any actions according to the assignment of the Board of Directors with consent from Audit Committee.

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3. Executive Committee
The Company’s Executive committee constitutes 6 persons as follows.
1. Suwin Kraibhubes M.D. Director / Chief Executibe Officer
2. Mrs. Tanyapon Kraibhubes Director / Deputy Chief Executibe Officer
3. Mr. Pratya Levan Director / Executive Director
4. Mr. Surapon Phetklueng Executive Director / Director of Account & Finance Division, Beauty Community PCL.
5. Ms. Sirikran Puttiveranon Executive Director / Director of Sales Division
6. Mr. Nattapong Khueanphan Executive Director / Director of Inventory & Office Management Division

Scope, Duty and Responsibility of Executive Committee

The Executive Board has authority, duty and responsibility for management in regards to the operation in
Company’s usual tasks and administrative works; determine policy, business plan, budget, organization chart and
Company’s administrative power and rule of business operation conforming to economic situations in order to propose
to the Board of Directors’ Meeting to consider and approve and/or consent as well as check and monitor the Company’s
operating performance according to the determined policy. The followings are the summary of the important authority,
duties and responsibilities.
1. Run the business and manage the Company’s affairs according to objective, regulation, policy, rule, requirement, instruc-
tion, and resolution of the Board of Director’s Meeting and/or resolution of the Company Shareholders’ Meeting in all aspects.
2. Consider to determine policy, direction and strategy for Company’s business operation; determine financial plan and
budget, human resource management, investment, work expansion, publication according to the framework considered for approval
by the Board of Directors; and control and govern the operation of the appointed working group to attain on target.
3. Consider annual budget allocation as proposed by the management before proposing to the Board of Directors for
consideration and approval, as well as consider and approve any change and addition in annual expenditure budget during no meeting
held by the Board of Directors, and propose the Board of Directors for approval or ratification in next meeting.
4. Stipulate organizational structure, organizational administrative power including appointment, employment, removal,
determination of pay, remuneration and bonus of executive level officer, and dismissal.
5. Empower the authorization power to a director or several directors or other persons to perform any actions subject to the
control of the Executive Board; or may authorize such person the power as the Executive Board deems appropriate and within the
period of time the Executive Board deems proper. The Executive Board may cancel, annul, change or alter the attorney or that power
as deemed proper. The authorization should not be granted to any persons who may have conflict of interests in operation.
6. Authorize for financial operation approval as follows.
(a) Approve the disbursement of usual operating expenses and procurement of assets and services for Company’s benefit
in the limit for not over than 10 million Baht per time and the approval limit for not over than 30 million Baht per quarter. If the deter-
mined limit is exceeded, the approval from the Board of Directors should be requested.
(b) Approve the selling, buying or service provision according to usual Company’s business such as approval of product
selling, approval of product buying or product ordering, etc. in the limit for not over than 20 million Baht per transaction and not over
than 500 million Baht per quarter. If the determined limit is exceeded, the approval from the Board of Directors should be requested.
(c) Approve the borrowing or application for Company’s credits as well as request to the bank for issuance of letter of
guarantee for Company’s business operation benefit in usual business condition, and the money spending for investment such as
purchase and sale of investment or immovable property in the limit for not over than 25 million Baht per time and not over than 50
million Baht per quarter. If the determined limit is exceeded, the approval from the Board of Directors should be requested.
(d) Approve the use of Company’s assets for mortgage and pledge as the security of all types of existing Company’s debts
or those will be occurred in the future in the limit for not over than 25 million Baht per transaction and not over than 50 million Baht
per quarter. If the determined limit is exceeded, the approval from the Board of Directors should be requested.
(e) Approve the opening/closing of all types of deposit accounts with the banks or financial institutions and simultaneously
determine the condition for money withdrawal or legal transaction of such deposit account.
(f) Approve the crucial investment spending prescribed in annual disbursement budget as assigned from the Board of
Directors or as ever approved in principle by the Board of Directors; and perform any actions according to the occasional assignment
of the Board of Directors.

The Executive Board shall not consider and approve the transaction with interest of the Executive Board or other
conflict of interests with the Company or its subsidiary unless it is the approval of transaction according to the policy and
criteria the Executive Board or the Shareholders’ Meeting has ever considered and approved and as required by law. The
Board of Directors may cancel, annul, change or alter the power of the Executive Board with the resolution of the Executive
Board.
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Executive officers
As of 31th December 2013, the Company’s executive officers have constituted 6 persons as follows.
1. Suwin Kraibhubes M.D. Director / Chief Executibe Officer
2. Mrs. Tanyapon Kraibhubes Director / Deputy Chief Executibe Officer
3. Mr. Pratya Levan Director / Executive Director
4. Mr. Surapon Phetklueng Executive Director / Director of Account & Finance Division, Beauty Community PCL.
5. Ms. Sirikran Puttiveranon Executive Director / Director of Sales Division
6. Mr. Nattapong Khueanphan Executive Director / Director of Inventory & Office Management Division

Scope of Duties and Responsibilities of Chief Executive Officer

1. Have operating power as the executive, and control and supervise the usual Company’s business operation.
2. Have operating power as assigned by the Board of Directors and/or Executive Board as well as have power to
assign other persons deemed proper by the Chief Executive Officer to representatively manage. Anyhow,
the sub-authorization should not be granted to other persons who may have conflict of interests in operation.
3. Have power to issue the instruction, rule, announcement and memo for operation according to the Company’s policy
and benefit and for maintaining the working discipline within the organization.
4. Have power to act on behalf and represent thyself as the representative of the Company to outsider in the
business relevant to the Company and beneficial to the Company.
5. Consider and scrutinize the investments for proposal to Board of Directors and/or Executive Board.
6. Consider to appoint the consultants who are necessary for Company’s business operation for proposal to
Board of Directors and/or Executive Board.
7. Have the power to approve the following financial operation.
(a) Approve the disbursement of usual operating expenses and procurement of assets and services for Company’s
benefit in the limit for not over than 5 million Baht per time and not over than 15 million Baht per quarter but
excluding the transaction for loan approval or Company’s credit application. The Executive Board and/or Board of
Directors should be requested for approval for the entry to execute such transaction.
(b) Approve selling, buying or service provision as Company’s usual business such as product selling approval, product
buying approval or product production ordering, etc. in the limit for not over than 10 million Baht per transaction and
not over than 300 Baht million per quarter. If the determined limit is exceeded, the approval from the Executive
Board and/or the Board of Directors should be requested.
8. Perform other duties as occasionally assigned from the Board of Directors and/or Executive Board.

The Chief Executive Officer shall not consider and approve the transaction with interest of the Chief Executive
Officer or other conflict of interests with the Company or its subsidiary unless it is the transaction according to policy and
criteria which has ever been considered and approved by the Board of Directors or the Shareholders’ Meeting and as required
by law. The Board of Directors may cancel, annul, change or alter the power of the Chief Executive Officer with the resolution
of the Executive Board.
4. Nomination and Remuneration Committee
The Company’s Nomination and Remuneration Committee has constituted 3 persons as follows.
1. Dr. Peerapong Kitiveshpokawat Independent Director and Chairman of Audit Committee
2. Mr. Viboon Pojanalai Independent Director and Audit Committee
3. Suwin Kraibhubes M.D. Director / Chief Executibe Officer

Scope of Duties and Responsibilities of Executive Board

1. Advise the Board of Directors relating to remuneration rates of the Chairman of the Board, the Company’s director,
the Chairman of Audit Committee, the member of Audit Committee and Subcommittees (if any) (by request for
consent from the Shareholder’s Meeting later).
2. Proceed the recruitment and nominate the list of proper and qualified person for induction as the director for the
first time; and consider the achievement, qualification and aptitude of the director retired by rotation who should be
re-elected and then nominate to the Board of Directors for consideration on approval, and propose to the
Shareholders’ Meeting for appointment as the Company’s director henceforth.

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3. Consider and advise the Board of Directors, and monitor and supervise the operation relating to the Company’s
human resource vision and strategy as well as Company’s executive development program.
4. Evaluate the Company’s operating performance in order to determine bonus granting and annual pay rise of the
entire Company using proper industrial standard criteria to support the consideration.
5. Suggest the Company’s salary structure including other benefits and rewards.

Company Secretary
In Board of Directors’ Meeting No. 4/2012 on 13th July, 2012, the Board of Directors resolved to appoint Mrs.
Daranee Pathetang to take a position of Company Secretary according to Section 89/15 of the Securities and Exchange Act
B.E. 2535 (A.D. 1992) amended by the Securities and Exchange Act (Issue No. 4) B.E. 2551 (A.D. 2008) with following duties
and responsibilities of Company Secretary.
1. Supervise and advise the Company’s directors and executives about the compliance with laws, regulations,
rules and articles of associations as well as rules of the Stock of Exchange of Thailand and the Office of the
Securities and Exchange Commission; and monitor and supervise correct and regular practices.
2. Supervise the disclosure of information and information report according to rule and regulation of the Stock Exchange
of Thailand and the Office of the Securities and Exchange Commission.
3. Prepare and keep the following documents.
(a) Director Register
(b) Appointment Notice of Board of Directors’ Meeting and Meeting Minutes of Board of Directors’ Meeting
(c) Appointment Notice of Shareholders’ Meeting and Meeting Minutes of Shareholders’ Meeting
(d) Company Annual Report
(e) Report on Interests of Directors and Executives
4. Perform any other actions according to the rules statutory in Securities and Exchange Law.

Nomination of Directors and Executives

• Criteria for Selection and Appointment of Boards and Executives
The Nomination and Remuneration Committee will perform to select the persons appointed as Company’s director
or Company’s executive and propose to the Board of Directors. The person with skill and experience essential for Company’s
business operation will be emphasized in consideration. The consideration criteria shall be summarized as follows.
1. Posses the qualification corresponding to Public Limited Company Act, Securities and Exchange Act, rule of Stock
of Exchange of Thailand and Office of Securities and Exchange Commission including the principle of good
corporate governance of the Company.
2. Possess knowledge, competence and experience in different professional fields proper for the lines that will be useful
and create value addition to the Company.
3. Possess the characteristic supporting and promoting the corporate governance operation in order to build value to
the Company; perform duty with accountability, care and loyalty; and enable to fully dedicate time.
4. The selection and appointment of the Company’s director will follow the criteria specified above. In addition,
the directors for not less than half of total number of directors must have the residences in the Kingdom.
The Shareholder’s Meeting will be the appointer of the directors using majority vote according to following
criteria and method.
1. A shareholder has the vote equal to 1 share per 1 vote according to the number of his holding shares.
2. In election of Company’s directors, the voting method may be used to vote the nominated person one by one
or several persons in one time, depending on what will be viewed as proper by the Shareholders’ Meeting.
However, every shareholder shall exercise their rights according to total existing votes in Item 1 in voting or
resolving but more or less votes must not be shared to other people anymore.
3. The voting for director election should be in accordance with the majority vote. If there are equal votes, the
Chairman of the Meeting shall have one vote added as the casting vote.
In every Annual General Meeting, the directors must be retired for at least one-third by ratio. If the number of the
directors left the post cannot be equally divided into exact three parts, that number of directors retired will be the nearest
figure of one-third. The directors required for retirement in the first year and the second year after the Company registration,
the casting shall be conducted for which directors will be retired. In next following year, the director holding the post for
longest time shall be the retired director and that director left the post may be re-elected to assume the position again.

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• Criteria for Selection and Appointment of Independent Director

The Nomination and Remuneration Committee will primarily consider the qualifications of the person who will hold
the post of independent director and then propose to the Board of Directors by considering from the qualifications according
to Public Limited Company Act, Securities and Exchange Law, Notification of the Securities and Exchange Commission,
Notification of Capital Market Supervisory Board including other relevant notifications, regulations and/or other rules in
acCompanying with the consideration on other qualifications such as working experience and wisdom, and then propose to
the Shareholders’ Meeting for consideration on appointment of such person to be the Company’s director. At least one-third
of total number of directors and not less than 3 persons shall be appointed according to the Company’s independent
committee appointment policy.
Qualification of Independent Director
1. Hold the shares not exceeding 1% of total number of voting stocks of the Company, holding Company, its
subsidiary, corporation, major shareholders, and Company’s regulator by counting in the shareholdings of the
people concerned as well.
2. Not be or ever be the director involved in the employee management; consultant officer who gained regular salary;
the regulator of the Company, its subsidiary, holding Company, same level of subsidiary; the major shareholder or
Company’s regulator unless free from aforesaid characteristic for at least 2 years ago before holding the post.
Such prohibited characteristic shall exclude the case that the independent director used to be the government officer
or consultant of the government office and has been the major shareholders or the Company’s regulator.
3. Not be the person with consanguinity or legal registration in type of parents, spouse, relatives, and children as well
as spouse of the children of major shareholder, regulator or person who is going to be nominated as the executive or
the regulator of the Company or its subsidiary.
4. Not be or ever have business relationship with the Company, holding Company, subsidiary, corporation, major
shareholder or Company’s regulator in type that may hinder the use of his own independent discretion; never be or
ever be the tacit shareholder or the regulator of the person who has the relationship with the business of the Company,
holding Company, subsidiary, corporation, major shareholders, or Company’s regulator unless free from such
characteristics for at least less than 2 years before holding the post.
Anyhow, the above business relationships include commercial transaction normally performed for business
engagement, rent or letting of immovable property, service or asset-related item, or offering or obtaining the financial
aid by receipt or lending, guarantee, giving asset for debt collateral including other similar actions, affecting the
debt existent and obliged by the Company or the party and payable to the other party from 3 percent of
net tangible assets of the Company or from 20 million Baht and over depending upon which amount will be lower.
Such debt shall be calculated according to the calculation method for value of connected transaction according to
the notification of Capital Market Supervisory Committee on the criteria of connected transaction execution with
deference. However in considering such debts, total debts occurred during one year before the date of having
business relationship with the same person should be counted in.
5. Not be or ever be the auditor of the Company, holding Company, its subsidiary and corporation; the major
shareholders or Company’s regulator; and never be the tacit shareholder, regulator or partner of auditing office that
the auditors of the Company, holding Company, its subsidiary, corporation, major shareholders or Company’s
regulator are the members, unless free from such characteristics for not less than 2 years before assuming the position.
6. Not be or ever be any professional service provider including the service provision as legal consultant or financial
consultant with receipt of service fee for over than 2 million Baht per year from the Company, holding Company,
its subsidiary and corporation; the major shareholder or Company’s regulator; and never be the tacit shareholder,
regulator or partner of that professional service provider unless free from such characteristics for not less than
2 years before assuming the position.
7. Not be the director getting appointed as the representative of the director of the major shareholder’s Company or
the shareholder who is the person related to the major shareholder such as agreement made in Shareholders
Agreement on director appointment to be the representative and oversee the benefit of any groups of shareholders.
8. Not engage in the business with the same nature and tacitly competitive with the business of the Company, its
subsidiary; or not be the tacit partner in partnership or the director who is involved in management, customer,
employee and consultant with regular salary receipt; or hold the shares exceeding 1 percent of total number of
voting stocks of other Company which engages in the same nature of business and is tacitly competitive to the
business of the Company or its subsidiary.
9. Does not possess any other characteristics incapable for independent opinion expression on Company operation.
Generally, the independent opinion expression means opinion expression or reporting according to the assigned
mission irrespective of any interests relating to properties or positions and not fall under the influence of the individual
or any group of individuals as well as not be under any situations that may coerce for inability to straightforwardly
express the opinion.

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• Guidelines in selection and appointment of Audit Committee

The Nomination and Remuneration Committee will consider appointing the Audit Committee that consists of at least
3 Auditors and then propose to the Board of Directors. The Auditors will be selected from the Company Independent
Directors. The Independent Directors who are Auditors must have the additional qualifications as follows;
1. Is not the Director who is authorized by the Board of Directors to make decision in business operation of the
Company, its parent Company, subsidiaries, associates, same-level subsidiaries, major shareholders, or controlling
parties.
2. Is not the Director of the parent Company, subsidiaries, associates, same-level subsidiaries that is the listed Company.
3. Has enough knowledge and experience to responsible for assigned mission as an auditor. The Auditor must
delicate himself/herself sufficiently in working for the Audit Committee’s responsibilities.
4. The Auditor should not be a director in more than 5 listed companies because it may cause him/her unable to
make full effort in working for each Company, except in the case that such auditor is a key person in providing the
Company’s guidelines and can make suitable time allocation.
5. At least one of Auditors must have enough knowledge or experience in accounting or financial to responsible for
reviewing financial statement’s reliability.

Directors and Management Remuneration

(1) Financial Compensation
• Total remuneration of Directors
The Board of Directors, Audit Committee, and Nomination and Remuneration Committee will receive remuneration
in term of meeting fees. The Company shall start paying meeting fees when the Audit Committee is nominated pursuant to
the resolution of 2013 Shareholders’ Meeting dated April 25, 2013. The details of meeting fees payable for Directors and
Audit Committee are as follows;

Position Meeting fees (Baht/time)

Board of Directors’ Meeting
Chairman of the Board of Directors 21,000
Director 15,700
Audit Committee’s Meeting
Chairman of the Audit Committee 21,000
Auditor 15,700
Nomination and Remuneration Committee’s Meeting
Chairman of the Nomination and Remuneration Committee 21,000
Nomination and Remuneration Director 15,700

In addition, the Directors who are management will not receive meeting fees because they already receive the
management remuneration. Currently, the Directors who do not receive meeting fees are (1) Mr. Suwin Kraibhubes; (2) Mrs.
Tanyapon Kraibhubes; (3) Ms. Monsuthathip Malaakkaranunt; and (4) Mr. Pratchaya Laywan. Thus, there are only 4 In-
dependent Directors who receive meeting fees.

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Summary of remuneration payment to the Board of Directors in 2013 (until December 31, 2013) are shown in the
below table.
Meeting Attendance Total remunerations
Name- Surname
(times) (Baht)
Lt.Gen. Padet Charuchinda 5/5 105,000
Mr. Suwin Kraibhubes 5/5 -
Mrs. Tanyapon Kraibhubes 5/5 -
Ms. Monsoothatip Malaukcaranun 5/5 -
Mr. Pratya Levan 5/5 -
Mr. Peerapong Kitiveshpokawat 5/5 78,500
Col. Attapon Srisangwarn 5/5 78,500
Mr. Viboon Pojanalai 5/5 78,500

Summary of remuneration payment to the Audit Committee in 2013 and 2012 (until December 31, 2013) are shown
in the below table.

2012 2013
Meeting Total Meeting Total
Name- Surname
Attendance remunerations Attendance remunerations
(times) (Baht) (times) (Baht)
Mr. Peerapong Kitiveshpokawat 6/6 120,000 4/4 84,000
Col. Attapon Srisangwarn 6/6 90,000 4/4 63,000
Mr. Viboon Pojanalai 6/6 90,000 4/4 63,000

• Management Remuneration
The Company paid management remuneration in term of salary, bonus, and contribution of provident fund as summa-
rize below;
Description 2012 2013

Number of management* 7 persons 9 persons

Total Management Remuneration (Million Baht)

18.34 22.07

Note: * The Organization Chart 2013 was effective on December 19, 2012. However, all 9 managements in the organization chart joined the
Company before 2012 (except Mr. Thitipat Vongsripuek, who was appointed to be accounting and finance manager in 2013 and
Ms.Ratchanee Treeranurat, who joined the Company in 2013). Thus, in 2013, number and total remuneration of management are
counted for such 9 managements.

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(2) Other Remuneration

The Company also provided other remuneration in term of Company car for the management in some positions.

Corporate Governance
The Company is aware of the importance to perform in accordance with Corporate Governance Principle. Thus the
Board of Directors has developed the policy to comply with Code of Best Practices for Directors of Listed Company
according to the Stock Exchange of Thailand (SET) guidelines, which are determined to be practical. Moreover, the
Company follows Good Corporate Governance as a guideline in development of the policy to cover rights and equitable
treatment of shareholders, stakeholders, structures, roles and responsibility and independency of directors, disclosure and
transparency, risk control and management, including code of conduct; to make business management and business
operation efficient and transparent. The Good Corporate Governance includes 5 sections as follows;

Section 1 The Rights of Shareholders

The Company realizes and respects to the rights of the shareholders by not proceeding in any action that violates
the right of shareholders. Moreover, it will support the shareholders to exercise their fundamental rights, e.g. sale or transfer
of shares, sharing of the Company’s profits, receiving adequate information regarding the Company, attending shareholders’
meetings to exercise the right to vote in the removal of directors, selecting auditors and making decisions on matters that
affect the Company such as the allocation of the dividend, the provision or amendment of regulations and memorandum of
association, the reduction or increase of capital, and the approval of special items.
In addition to the fundamental rights as stated above, the Company will support any matter that encourages and
facilitates the exercise of rights of the shareholders as follows:
• The Company will encourage the Board of Directors, the management, and relevant organizations, including the
auditor to participate shareholders’ meetings simultaneously.
• The Company will assign the Board of Directors to provide a written appointment for a shareholders’ meeting with
adequate information for the shareholders to be notified about 7 days prior to the date of the Meeting or to follow
the prescription of the Securities and Exchange Commission and the Stock Exchange of Thailand.
• In each shareholders’ meeting, the chairman will clarify the rules for the meeting including voting procedures and
allocate time sufficiently for the meeting.
• The shareholders will be given extreme opportunities to raise questions and give comments and suggestions in any
meeting with the presence of the board members and directors. After the Meeting is adjourned, the Company will
produce the meeting minutes by showing accurate and complete information for the scrutiny of the shareholders.
• The Company will arrange vote submission and record in the resolution of Shareholders’ Meeting clearly in the Minute
of Meeting. The number of votes received; agreed, not agreed, and no vote; will be recorded for each agenda of
the Shareholders’ Meeting which required voting.
• In the case that any shareholder cannot attend the meeting by him- or herself, the Company grants an opportunity
to these shareholders the privilege of authorizing any independent director or person to attend the meeting in his or
her name.

Section 2 The Equitable Treatment of Shareholders

The Company will treat all shareholders equally and fairly including shareholders who are director, non-director,
foreign shareholders as well as minor shareholders with the following principles:
• The Board of Directors will not raise an additional agenda without informing the Shareholders in advance if it is not
necessary, especially an important agenda that requires the Shareholders time to study before making any decision.
• The Company has set up a policy to prevent any unauthorized use of information by prohibiting agencies that were
exposed to the information from revealing it to other agencies or non-related personals. In the event that any
employee or director reveals the information or use it to benefit themselves or their accomplices, it will be considered
a serious offense and will receive a disciplinary punishment.
• In a shareholders’ meeting, the Board members and Chief Executive Officer will share information about their interests
in each agenda in order for the Board of Directors to consider any transaction that may be in conflict with the interests.
This will allow them to make decisions for the benefit of the Company as a whole. The Board members and the
Board of Directors whose interests are in conflict with the Company’s will be revoked the right to vote in that agenda.

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Section 3 The Role of Stakeholders

The Company respects the rights of every group of stakeholders and has created a policy which is important in
treating all stakeholders as follows.
Shareholders: The Company is committed to dealing businesses with the knowledge and management skills as best as
possible in all cases with the honesty and fairness to both major and minor shareholders for the best
interest of shareholders as a whole. This includes disclosure of information on a regular basis with
completeness and accuracy.
Employees : The Company will provide fair compensation to employees, maintain the working environment that is safe
for life and property and give an emphasis on the development of employees’ potential thoroughly and
consistently. It will also strictly comply with laws and regulations that are employee-related and avoid any
action that is deemed unfair which may affect the career integrity of the employees as well as treat the
employees with courtesy and listen to opinions and suggestions from all employee levels equally and fairly.
Clients: The Company is committed to create customers’ satisfaction and confidence, including take care and
responsible for customers. Our customers will receive products and services with quality and standards
at a reasonable price and comply with applicable standard. The Company will also comply with terms
and condition of the agreement entered into by the Company and customer, along with developing
higher standard of products and services continuously.
Partners and creditors: The Company will not practice corruption in dealing businesses with its partners and creditors and
is committed to comply with conditions strictly prescribed with creditors, e.g. the purposes of payment,
reimbursement, the regulations of the quality of collateral and any other agreements with creditors to
achieve mutual benefits.
Competitors: The Company will conduct operations under the rules of good competition, will not seek competitors’
confidential information by dishonest or improper means, and will not damage the reputation of its
alleged competitors without unfounded grounds.
Society: The Company will not take any action that may result in damage to society, natural resources, and
environment. Instead, it seeks opportunities to support creative social activities and social responsibility
among employees at all levels continuously and seriously as well as to control the practice strictly in
accordance with the spirit of the law and regulations issued by regulatory agencies.
Section 4 Disclosure and Transparency
The Company recognizes the importance of disclosure of accurate, complete and timely information and meets
the standards of the Stock Exchange of Thailand in terms of financial reports and general information as well as other impor-
tant information affecting stock prices and the decision-making process of investors and stakeholders of the Company.
Moreover, to provide all the relevant information equally, the Company releases the public information through the Stock
Exchange of Thailand and the website at www.beautycommunity.co.th.
The Board of Directors is responsibly aware of the significance of the accurate and reasonable financial report.
The statement of the Company was prepared in accordance with the well-accepted accounting standard by the selection of
appropriate accounting policies and accounting records which have enough accuracy to maintain the property. This is to
identify the weaknesses in order to prevent fraud or irregularities of the material which is consistently implemented and to
make sure that the key information is adequately disclosed in the notes to financial statements. Furthermore, the Board has
appointed the Audit Committee to review financial reports, transactions and internal control system. The Audit Committee will
report the audit results to the Board in every meeting. The Board of Directors, the Audit Committee and the Auditor’ reports
are detailed in the annual report. As for the investor relations, the Company has no plan to establish an investor relation
section in nearly future. However, the Company has assigned Mr. Suwin Kraibhubes, Chief Executive Officer; Mr. Surapon
Petchkleung, Chief of Accounting and Financial Division; and Ms. Sirikarn Pattiveeranont, Chief Operational Officer; to be
responsible for communicating with shareholders, analysts and those involved.
Section 5 Responsibilities of the Board of Directors
(1) The Board of Directors’ structure
The Board of Directors consists of the directors who have knowledge, competency and experience in doing
business which is beneficial for the Company. The Company’s Board of Directors is appointed by the General Meeting of
Shareholders. It consists of 8 Directors, including 4 Independent Directors: one Chairman of the Audit Committee and two
Audit Committees. At least one Audit Committee must have enough accounting knowledge to be able to audit and ensure
the reliability of financial statements. The Company also regulates that at least one-third of the Board, but not fewer than 3
persons, is to be Independent Directors representing the minority of shareholders. They have to check and balance the
Company’s administration of the affairs to provide the best, fairest and most accurate interests to the shareholders.
The Chairman of the Board must be the Independent Director and must not be the same person as the Managing Director
and Chief Executive Officer to achieve the balance and the review of the management. To achieve this, the Company has
clearly set the scopes of power, duties and responsibilities of the Board of Directors, Executive Committee and the Managing
Director to prevent them from having unlimited managing and financial power.

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(2) Sub-Committee
The Board of Directors has appointed the following sub-committee to assist in the Company’s operations:
• 7 Executive Committees who help facilitate operations with the powers and duties assigned by the Board of Directors.
• The Audit Committee has at least 3 persons to monitor and assist in overseeing the operations of the Company’s
scope of duties as assigned by the Board of Directors. All members have qualifications stated in the Securities and
Exchange Act or in the rules and regulations of the Securities and Exchange Commission or the Securities and
Exchange Commission or the Stock Exchange of Thailand.
• 3 Nomination and Remuneration Committees who provide suggestion about remuneration of the Directors,
appointment of the Board of Directors and sub-committee, nominate and propose the person whose qualification is
suitable for being the Director; including follow up and operate human resource activities, e.g. evaluation for bonus
and salary increment, etc.
However, the Company may recruit other sub-committees to perform their assigned tasks to alleviate the admin-
istrative burden of the Board of Directors in the future.

(3) Roles, Duties, and Responsibilities of the Board of Directors

The Board of Directors is responsible for determining the policy, vision, strategy, goal, business plan and budget as well as
oversees the effective and efficient administration and management to ensure compliance with agreed policies and strategies
within the framework of the law, the Company’s objectives, regulations and resolutions of the shareholders’ meeting. The
Board will perform its duties with full competency to create value-added for long-term business, and manage the Company’s
business carefully and prudentially to avoid conflict of interests. The Board will manage operation according to the following
guidelines.
Business Code of Conduct
The Company has written a procedure on the business code of conduct for the Board, the Audit Committee, and the
working parties to use as a guideline. Its key issues are the discretion of the Company’s confidentiality, honest and
law-abiding operations, respect of the legitimate rights of each other and caution of the resources, both internal and external
environment. This important focus of ethics in business will bring integrity in performances and the efficiency of an internal
control, resulting in faith in capital markets and confidence to establish credibility with investors.
The Policy on Conflicts of Interest
The Company’s policy on conflict of interest is based on a principle that all employees are required to act only in the best
interest of the Company. Any actions or decisions must be free from influences of the needs of themselves, their family,
relatives, siblings or other parties of their own acquaintances. The policy covers two following issues:
• Transactions:
The Company will consider the appropriateness before carefully making any transaction item or determining the price
and condition of any transaction, as if the Company is making a transaction with a third party (Arm’s Length Basis).
Also, the Audit Committee will consider and verify the necessity and reasonability of the transaction. The Company
will make any transaction by following regulations, conditions, and procedures prescribed in the announcement of
the Stock Exchange of Thailand and the announcement of Securities and Exchange Commission Thailand.
In addition, the Company will reveal the said item in its annual report and registration statement (Type 56-1).
This is done for the transparency of any transaction and to eliminate the problems of conflict of interest and other
related situations.
• Other situations that can lead to conflicts of interest can be categorized as follows:
1. General investment: The Company will not allow its employees who are also shareholders, or those who benefit from
its competitors, or vendors/suppliers who are in business contact with the Company to take part in any decision
making regarding business relationship, unless approved by the Board of Directors.
2. Receiving gifts: Personnel of all levels should not receive gifts, transportation tickets, sport tickets, travel offers,
accommodation or personal offers, etc., if such action can lead the Company to any binding conditions or make
the Company lose profit.
3. Accepting work in academia or public service, a lecturer post, or any position: Personnel of all levels can ask the head
of their department to approve the acceptance of work in academic institutions or public service, or a lecturer post or
any position such as Company director or adviser that will help broaden their vision and offer them experience.
However, all personnel are not allowed to involve the Company or their positions in the Company with any external
activity, unless approved by the Board of Directors.

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The Policy on Conflicts of Interest

The Company’s policy on conflict of interest is based on a principle that all employees are required to act only in
the best interest of the Company. Any actions or decisions must be free from influences of the needs of themselves, their
family, relatives, siblings or other parties of their own acquaintances. The policy covers two following issues:
• Transactions:
The Company will consider the appropriateness before carefully making any transaction item or determining
the price and condition of any transaction, as if the Company is making a transaction with a third party
(Arm’s Length Basis). Also, the Audit Committee will consider and verify the necessity and reasonability
of the transaction. The Company will make any transaction by following regulations, conditions, and
procedures prescribed in the announcement of the Stock Exchange of Thailand and the announcement of
Securities and Exchange Commission Thailand. In addition, the Company will reveal the said item in its
annual report and registration statement (Type 56-1). This is done for the transparency of any transaction and
to eliminate the problems of conflict of interest and other related situations.
• Other situations that can lead to conflicts of interest can be categorized as follows:
1. General investment: The Company will not allow its employees who are also shareholders, or those who benefit from
its competitors, or vendors/suppliers who are in business contact with the Company to take part in any decision
making regarding business relationship, unless approved by the Board of Directors.
2. Receiving gifts: Personnel of all levels should not receive gifts, transportation tickets, sport tickets, travel offers,
accommodation or personal offers, etc., if such action can lead the Company to any binding conditions or make
the Company lose profit.
3. Accepting work in academia or public service, a lecturer post, or any position: Personnel of all levels can ask the head
of their department to approve the acceptance of work in academic institutions or public service, or a lecturer post or
any position such as Company director or adviser that will help broaden their vision and offer them experience.
However, all personnel are not allowed to involve the Company or their positions in the Company with any external
activity, unless approved by the Board of Directors.

Internal Control
The Company has an internal control system to give the investors’ confidence that the Company operates
efficiently and increase the financial budget credibility. From the end of 2010 until now, the Company has hired Well Planning
Solution Co., Ltd, who has its professional in internal control with experiences of internal audit for many listed companies., to
be an internal auditor of the Company.
Moreover, Miss Hassaya Jaibuchasak, an internal inspector of Well Planning Solution Co., Ltd, has been appointed
to report the result of the internal inspection to the Audit Committee at least once every three months.
(4) The Board of Directors’ Meeting
The Board of Directors has set to held at least one meeting every three months as well as other special meetings
if necessary. A monthly report is also expected to be compiled and distributed among the Board of the Directors to help
them direct, control and supervise the operation of the management section promptly and continuously. A meeting invitation
has to be sent to the Board of Directors for consideration at least seven days before a meeting is held, except in urgent
cases to protect the Company’s rights or profits. The Board of Directors can ask for any extra information from the secretary
if needed.
The Chairman and Chief Executive Officer will consider the agenda, and each member of the Board can also
propose an agenda. The Chief Executive may join the Meeting in order to give extra information in certain occasions.
(5) Remuneration
The Company has its policy to provide the remuneration of the Board of Directors and Audit members at the level
which can motivate them to maintain the desired qualities. The remuneration will be at the same level as that of other groups
in the same industry, and is linked to the Company’s performance. The remuneration of the Board of Directors must be
approved in the Shareholders’ Meeting.
The remuneration of the Managing Director and Chief Executive is set to match their responsibilities and authorities ac-
cording to the rules and policies determined by the Board of Directors for the highest benefits of the Company. The level of
remuneration, including salary, bonus and long-term incentive, is set in accordance with the performance of the Company
and each Director.
(6) The Board of Directors and Executives’ development
The Board of Directors supports and provides training and workshops to all employees who are involved in the
Corporate Governance system, such as the Directors, Audit Committees, and Executives, in order to continuously help
improve their performance. Training and workshops may be arranged in the office or at other external institutes.
If there is any change in the Board of Directors, the Company’s secretary will provide useful documents to the new members,
as well as arrange for advice on the business type and model to be given to the new Boards of Directors.

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Insider Trading Policy

The Company has its policy and procedure which cover monitoring the Directors and senior management about
their usage of inside information for their interests as follows;
1. To provide knowledge for the Directors and other managements about their responsibilities to report changes in
securities holding of them, their spouse, and minor children to The Securities and Exchange Commission and Stock
Exchange of Thailand. This complies with Section 59 and the announcement of The Securities and Exchange
Commission No. SorChor. 12/2552 prescribed “Preparation and Disclosure of Report on Securities Holding of Director,
Executive and Auditor”, and the penalty stated in Section 275 of the Securities and Exchange Act B.E. 2535.
2. The Company assigns the Executives to report changes in securities holding of them, their spouse, and minor
children to The Securities and Exchange Commission and Stock Exchange of Thailand. This complies with Section
59 and the announcement of The Securities and Exchange Commission No. SorChor. 12/2552 prescribed
“Preparation and Disclosure of Report on Securities Holding of Director, Executive and Auditor”. Thus, the Company
is able to monitor shares selling/buying of all Executives.
3. The Executives who are informed any material inside information, which has some impact on securities’ price change,
must stop their securities buying/selling for 1 month before publishing such financial statement or inside information.
They must not exploit such material information to others. If any person in the Board of Directors or
Executive Committee uses the inside information to cause some damages to the Company or the Shareholders,
The Board of Directors will consider the penalty appropriately. If the person in other level exploited the inside
information, the penalty will be considered by the Executive Committee.
Auditor’s Renumeration
(1) Audit Fee
In 2013 The company paid audit fees to DIA International Co.,Ltd., in the amount of 800,000 Bath. And the member
of auditor team consist of
1. Mrs. Suwimol Krittayakean Permit no. 2982
2. Mrs. Wilairat Rojnakarin Permit no. 3104
3. Ms. Somjintana Polhirunrat Permit no.5599
(2) Non-audit Service
In 2013 the company and affiliate company didn’t get the services form DIA International Co.,Ltd.
Personnel
1. Number of employees and remuneration
Number of the Company’s employees (exclude Executives) categorized by business line are shown below;
Number of employees
(persons)
No. Key function As of
December 31, 2012
2013
1 Marketing 6 6
2 Operation (at branches) 510 449
3 Research & Development and Purchasing 15 12
4 Warehouse and Logistics 87 76
5 Finance and Accounting 27 24
6 Information Technology 8 6
7 The Company’s secretary and Chief Executive Officer’s secretary 2 3
8 Consumer Product Store and Specialty store 16 3
9 Arts and Design 6 6
10 Human Resources and Administration 15 13
11 Operation (Office section) 29 27
12 Training 7 7
13 Business Development and interior decoration 8 -
Total
Total (persons) 736 632
(persons)

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The Company paid financial remuneration to employees (exclude Executives) in term of salary, bonus, and
others e.g. overtime allowance, allowance, commission, branch management fee, product storage fee. The total remuneration
is shown below;

Description 2013 2012

Number of employees (person) 736 632
Total remuneration (million baht) 149.47 104.19

2. Provident Fund
The Company has organized the provident fund named “Sinsathaporn Registered Provident Fund” which is
managed by BBL Asset Management Co., Ltd. Both the Company and employees will make monthly deposit of their part at
3% - 5% of salary. Establishment of the provident fund has the objectives to create employees’ moral and to attract them to
work with the Company in long term.
3. Employees Training and Development Policy
The Company has a policy to make continuous improvement for its employees. The key objective of the policy is to
develop employees’ knowledge and understanding in performing their duties efficiently. This is the way to develop career path
of employees and to focus on increasing competitive advantage. In addition, the Company also has the policy to enhance
good practice culture for employees so that they can work simultaneously in the same direction and focus on identity of
organizational culture. As a result, the Company has developed “BEAUTY CORE VALUE” campaign to support such policy.
All shops’ staff will be trained about all products’ details and specification, including make-up method, personality
development, service, sales technique, communication with customers, making suggestion to customer, sales promotion,
products arrangement, including using of POS which is linked with the Company’s program. Total training periods are 14 days
to completely cover key contents. In addition, all staff will be tested before working to ensure that all shops are efficient in
the same standard.
However, the staff in other departments will receive both internal and external training according to their function to
improve the skill on their responsible jobs.

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Internal Control
The Company gives precedence to internal control management system for the most efficiency, in order to
achieve Company’s goals. We focus on the internal control system covering all activities on the purpose of sufficiency
and suitability for business operations, the most efficiency and effectiveness of operations, resources use, and asset
management. Furthermore, the accurate accounting system and financial reports based on Company law, rules and
regulations are included. The Company’s internal audit is independent in evaluation of internal control system regarding
the efficiency and sufficiency. The Company committee assigns the audit committee to examine the result of the
evaluation of the Company’s internal control and regularly provide suggestion for development of the internal control
system.
The audit committee had attended the Company committee meeting of 1/2556 on February 22, 2013. The audit
committee evaluated the internal control system by questioning the Company management about the sufficiency of five
parts of Company’s internal control system as follows
(1) Organization and Environments
(2) Risk Management
(3) Control of Management Operations
(4) Information Systems and Data Communications
(5) Tracking System

The audit committee concluded that the Company possesses the sufficient internal control system of business
transaction process with major shareholders, committee, management, or other related people. The five parts of the internal
control system are appropriate and sufficient for the purpose of asset protection concerning wrongfully being used by the
management. In additional, the system possesses independence in tracking and evaluating the internal control. Lastly, the
Company’s document management system is able to be examined by the committee, auditor, and authorized persons in the
timely manner.

Auditor’s observation for Company’s internal control system

- NO -

Operation Policy of the Internal Audit

The Company gives precedence to the internal control management system concerning completeness and suffi-
ciency on the purpose of being able to take control all kinds of risks from business operations to be acceptable. The Com-
pany determines policies, regulations, and operation manual that completely cover all main operation processes in writing.
Additionally, the division of authority according to check and balance system is included in the policy. To strengthen and
develop the Company’s internal control system constantly in the long term, the Company appointed “Well Planning Solution
Co., Ltd.”, which experiences in internal auditing for many listed companies, to become the Company’s internal auditor at the
end of the year of 2010. Furthermore, the Company also appointed Ms. Hatchthaya Jaibucha, who is the management of
Well Planning Solution Co., Ltd., presents the result of the internal auditing to the Company’s committee every three months.

Observation of the Internal Auditor

In 2013, Well Planning Solution Co., evaluated the risks of Company’s operation and presented to the audit
committee, then planed the internal auditing by considering the audit procedures based on level of effect on business
operation. The audit procedure will be started examining the major activity strongly affecting the Company’s business
operation. This audit plan has been approved by the audit committee; moreover, the internal auditor evaluated the suf-
ficiency of the Company’s internal control system at that period of time. The audit procedures include the examination of
three main processes of internal control system including (1) Human Resources Management, (2) Shop operation control,
and (3) Purchasing process. The internal auditor concluded that the Company has determined the internal control processes
generating efficiency and effectiveness of the operation.
However, the internal auditor had evaluated the inappropriate procedures and provided suggestion of improvement
to the Company. Actually, the Company places important of the improvement according to the suggestion mentioned above.
The internal auditor reported the result of the internal audit consisting of the progress of improvement to the Company
committee constantly as below

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(1) Human Resources Management

Manpower Planning
No. Detailed Observations Management’s Opinions
1. According to the collation of manpower of 1/2013 The Company has assigned Human Resources and
comparing with the approval letter for new positions of Administration Department to prepare work manual
1/2013, the human resources department had recruited and regarding manpower planning in writing. The detail of work
hired new employees without official management manual is as follows
endorsement of the approval letter for new positions (for • Each department must plan their manpower, sub
the head office). Moreover, the manpower of 1/2013 didn’t organization chart, and job description and presents to the
include those positions. management meeting for approval (this will be considered
in the same time as annual budget approval)
• After getting the manpower approval from management, a
department must officially inform Human Resources
Department in writing to recruit the new employees and
state position(s) and starting date of employment. Therefore,
Human Resources Department will recruit the new
employee(s) according to the order of approved manpower
mentioned above.

Recruitment
No. Detailed Observations Management’s Opinions
2. According to the collation of new employees’ case history Human Resources and Administration Department to revise
duration October 2012 to February 2013, the deficiency work manual regarding selecting a candidate for clarity and
and incompleteness of documents in the process of suitability. This can increase the efficiency of recruitment
recruitment were founded. This directly affected the and reduce redundancy of employee’s operations.
efficiency of recruitment process due to the redundancy of Meanwhile, Company’s work regulations were uploaded to
employment agreement preparation and preliminary Company’s website or blog. Therefore, all employees can
assessment of recruitment, which caused time wasting for be informed and be able to check Company’s work
recruiting an inefficient employee. regulations including the right of employee for taking leave.

Training
No. Detailed Observations Management’s Opinions
3. According to Human Resources Chief and the collation of Human Resources and Administration Department to
training plan of 2013, the Company already has determined revise the work manual and all forms relating to training for
annual training plan indicated in the work procedures. On clarity
the examined date (April 23, 2013), the training plan was
under the proposed procedure to the management for
consideration. The training plan consisted of four courses
for chef level or higher positions. It was not consistent with
the HR’s operation goal of 2013, which is indicated to
provide training for operating staff at least two times/year.
Moreover, there was no recording of employees’ training
history, which was determined in the work manual.
According to the collation of training proposal of 2012
presented to Department of Skill Development, the
Company had never summarized the cost of internal
training for beauty advisor staff. Additionally, there was no
request to assure the basic fire training course, this causes
the Company was not eligible to claim tax reduction for
staff training, according to Department of Revenue’s
announcement.

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Resignation
No. Detailed Observations Management’s Opinions
4. According to the collation of 21 employees’ resignation Human Resources and Administration Department to prepare
history of March 2013 and the interview with Chief of HR the work manual of resignation in writing for clarity on the
regarding work procedures, currently, the procedures were purpose of development of human resources management
filling resignation form and money guarantee refund. process and the integrity of data in computer system.
However, there was no interview procedure (Exit Interview)
for the reason of leaving that can be use for improvement.
According to the conversation with Manager of Information
Technology Department, the resigned employee list was
recorded in the thumb drive monthly and the IT would use
the information from thumb drive to eliminate the right of the
resigned employee on C-Smile or/and POS. However, there
was no official record of resignation in writing.
Regarding no work procedures of resignation in writing, it
might affect the efficiency of Human Resources Management.

(2) The Control of Shop Operation

Standard Work Manual of Sales Person
No. Detailed Observations Management’s Opinions
1. According to the collation of standard work manual of Sales BB and BC operation department to revise the standard
person that had been currently used at the shop “Beauty work manual for shop operation. In addition, the revised
Buffet” and “Beauty Cottage”, the manual was not up to work manual was delivered to every branch and the old
date. There were some rules not consistent with the training version of work manual was already returned to the
or regulations of work operations indicated by HR Company.
department.
Regarding no improvement of standard work manual for
sales person at “Beauty Buffet” and “Beauty Cottage”, it
might affect the understanding of sales person at a shop
due to the inconsistency of work guidelines and work
manual from the Company.

Training
No. Detailed Observations Management’s Opinions
2. According to the collation of training for new 49 and 28 BA Training department to revise the training criteria for BA staff
staff of the shop “Beauty Buffet” and “Beauty Cottage” for clarity and suitability, particularly to append the additional
duration April-May 2013 respectively, comparing to training work procedures in work manual according to the actual
score from training department of the batch 1-5/2512, two work process, which also covered the process of operation
BA staff, who didn’t’ complete the training course due to department, staff appointment, and HR department who
having an accident, were replacing the staff, who suddenly records training history for all staff. ฀
resigned. Additionally, there were five staffs who had never
attended the training.
Regarding to the interview with management, the Company
would try to provide training for all staff in the next training
batch particularly. For the staff not finishing the training,
Company might provide training at the shop.
Moreover, the training manual of training department stated
that the training would be provided for the next batch.
However, the training manual didn’t mention the training
guideline or provided the test in the case of uncontrollable
situation happened. These generated the ambiguousness for
staff training.
Due to lack of certain criteria of staff training, the BA staff
might not be able to gain knowledge from attending the
training for the appropriate knowledge development and sales
skills.

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Training
No. Detailed Observations Management’s Opinions
3. According the collation of training for Make Up Specialist Training department to revise the training criteria for Make
(MS) Staff and training document for Make UP Specialist UP Specialist (MS) and Management Trainee (MT) staff
from training department of 2012 comparing to the based on the actual operation process. It must cover the
document of “position adjustment/ branch rotation” from task process of operation department, staff appointment,
HR department referencing to information from BB and HR department recording the training history.
operation department in position adjustment routine in
the HR application, one course still didn’t include the
position adjustment of staff.
Due to the above issue, it showed that the operation
process of position adjustment was not complete and
precise. This created missing of position adjustment
record.

Shop Expense Control

No. Detailed Observations Management’s Opinions
4. According to the interview with director, deputy mangers of The Director of Operation Department to have a meeting
BB operation department, and operation manager of BC with related people in order to specify the standard criteria
department, presently the operation department didn’t of appropriate shop expense by referencing the statistic of
precisely specify the standard expense of each branch. the year 2012 to be a part of consideration.
Actually, the Shop Manager and Area Supervisor are the
ones who appropriately control all the expenses of the
branch, for where they are responsible.
However, the Company’s ERP system is able to access all
reports of Tester and Non Cosmetic expenses for each
branch analysis. But the information had never been used to
specify the standard criteria of shop expenses. It showed
that the Company didn’t use the information of shop
expense to increase efficiency of expense management.

(3) Purchasing Process

Purchasing Process – Cosmetic
No. Detailed Observations Management’s Opinions
1. According to the collation of evaluation of seller (goods and The Company had revised the operation procedure regarding
packaging) in 2012, the seller evaluation had scored the seller evaluation (MC-WP-004) and prepared seller evaluation
work delivering and pricing different from the criteria forms in the AVL separated from the new seller.
specified in the work operation procedure regarding seller
evaluation (MC-WP-004). The meeting resolution in 2013
was to change the proportion of mentioned score.
However, purchasing department had never revised the
documents of operation procedures regarding seller
evaluation (MC-WP-004) according to the meeting resolution
mentioned above.

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Purchasing Process - Non Cosmetic

No. Detailed Observations Management’s Opinions
2. According to the collation of purchasing forms of Non On behalf of the Company, Director of Warehouse and
Cosmetic duration August to September 2012, purchasing Office immediately grasped the correct purchasing and
staff didn’t understand the purchasing procedures clearly, operation procedures with the purchasing department of Non
especially the price comparison; hence, two items of non Cosmetic.
price comparison were found.

No. Detailed Observations Management’s Opinions

3. According to the collation of purchasing detail of Non The Company by Chief or Non Cosmetic Purchasing
Cosmetic duration August-September 2012, a purchasing Department had a meeting with other relating sections in
document was delayed by relating departments. It showed order to fully grasp the operation procedure regarding
that the purchasing procedure had never been taken requirement of purchasing approval.
important as it specified. It might affect the efficiency of
purchasing process.

No. Detailed Observations Management’s Opinions

4. According to the collation of seller evaluation of Non The Company by Director of Warehouse and Office assigned
Cosmetic in 2012, the seller evaluation was different from Chief of Non Cosmetic Purchasing Department to revise the
the criteria specified in the operation process regarding seller work procedure of Sales Evaluation (HR-NC-WP-005) to be
evaluation (HR-NC-WP-005) as follows consistent with the actual operation process. Additionally,
the forms and notification letter to seller must be prepared
• Criteria of seller scoring summary and promulgated.
• Notification of the evaluation result to the seller

Shop Decoration Outsourcing

No. Detailed Observations Management’s Opinions
5. According to the collation of Non Cosmetic purchasing The Company organized the improvement of two parts as
forms duration August to September 2013 regarding shop below
decoration outsourcing, the Company’s work process was • Preparation of the standard check list document for being
included form preparation of job delivery. The staff always used in the job delivery process of each branch
used the contractor’s delivery form. • Revision of work procedure of the other outsourcing
inspections by identifying the value of the work for which
the inspection document must be provided.

Information about Chief of Internal Audit

1. Internal Audit Company Well Planning Solution Co., Ltd,
2. Chief of Internal Audit Miss Woralux Limsukprasert
Position: Managing Director
3. Education qualification/Certificate Bachelor of Accountancy, Second Class Honors,
University of the Thai Chamber of Commerce
Master of Accountancy, Thammasat University
• Certified Public Accountant (C.P.A.) of Thailand
4. Work Experience
1995 - 2002 : S.G.V. Na Talang Co., Ltd.
2003 - 2004 : KPMG Phoomchai Holdings Co., Ltd.
2005 – Present : Well Planning Solution Co., Ltd,
5. Related Training
• TSQC1 Workshop about monitoring and EQCR for capital market auditor
• How to comply with Thai Standard on Quality Control Vol.1 (TSQC1)
• Guidelines of Thai Standard on Quality Control Vol.1 (TSQC1) for audit office
• COSO - 2013 Latest internal control framework
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 Related Party Transaction of the Company

100
Related Party Transaction for the Year Ended as of 31st December, 2013
Beauty Community Public Company Limited
Person/ Transaction Value (Baht) Balance (Baht)
ANNUAL REPORT 2013

Juristic Person that Type of

Relationship As of 31th As of 31th Necessity and Reasonability Audit Committee's Opinion
may have conflict Transaction 2012 2013
Dec 12 Dec 13
of interest
BEAUTY COMMUNITY PUBLIC COMPANY LIMITED

Mr. Suwin Shareholder and Borrowing from - - - - The company borrowed money from the It was the transaction
Kraibhubes and Company's Director director for use as working capital occurred in the past and
Mrs. Tanyapon Director without interest charging. The company will not occur again in the
Kraibhubes paid back all outstanding of the future.
borrowing from the director in Quarter 2
of 2012 and none of any transaction for
borrowing from the director will be
occurred in the future anymore.
Renting of Land 348,000 348,000 - - The company rented 203 sqw. size of the The renting of such land
and Building land and building from Thanaphum Juristic was reasonable and
Body owned by Mrs. Tanyapon necessary for business
Kraibhubes at rental fee of 29,000 Baht engagement. The rental fee
per month to be used for the company's has been the fair fee
warehouse. The term of the rental contract appraised by the
has been 3 years from 1st Jan 12 - 31th independent appraiser.
Dec 15 and the rental fee was pursuant to The Audit Committee's
the fee appraised by the independent Meeting No. 5/2012 held
appraiser. on 5th October, 2012
resolved to approve the
company to proceed the
change of the party of
such land renting from
Thanaphum Juristic Body
to be Mrs. Tanyapon
Kraibhubes and it was
 Person/ Transaction Value (Baht) Balance (Baht)
Juristic Person that Type of
Relationship As of 31th As of 31th Necessity and Reasonability Audit Committee's Opinion
may have conflict Transaction 2012 2013
Dec 12 Dec 13
of interest
effective since 1st October
2012 and the condition has
still been according to the
primary rental contact.
Guarantee for - - 824,635 - Mrs. Tanyapon Kraibhubes personally Such guarantee transaction
Hire-Purchase guaranteed the motor vehicle hire- was reasonable and the
Contract purchase contract and long-term loan for company could gain the
the company without getting any benefit since the guarantor
Guarantee for - - 5,971,327 -
compensations (As of 30th June, 2013, did not charge any
Long-Term Loan
the debt according to the loan contract compensation for this
was completely paid back.) guarantee.
OP. C&N Mr. Pratya Product Selling* 3,755,926 3,362,719 351,674 655,887 OP. C&N International is the franchisor of It was the normal trade
International Levan, the Beauty Buffet, Big C Bang Na Branch and transaction with reasonable
Director and its franchise distribution has been the trade condition.
Company's same as the condition that the company
Shareholder for has given to other franchisors.
20% in OP.
Other Incomes* 8,970 4,830 - - The company charged the handling
charges according to the condition of
franchise contract such as transportation
expense, product inspection expense, etc.
which have been the same condition that
the company has given to other
franchisors.

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 Person/ Transaction Value (Baht) Balance (Baht)

102
Juristic Person that Type of
Relationship As of 31th As of 31th Necessity and Reasonability Audit Committee's Opinion
may have conflict Transaction 2012 2013
Dec 12 Dec 13
of interest
Mr. Wasan Mr. Wasan Product Selling 276,073 - - - OP. V&P is the Beauty Buffet franchisor at It was the normal trade
ANNUAL REPORT 2013

Khorcharoen, OP. Khorcharoen

(Wasan
Big C Bangna Branch and OP. S&V is the transaction with reasonable
V&P and OP. S&V who is the Beauty Buffet franchisor at Lotus Uttaradit trade condition.
shareholder for Khorcharoen) Branch. The distribution condition of such
50% of both OP. franchise has been the same condition
BEAUTY COMMUNITY PUBLIC COMPANY LIMITED

- - -
2,767,838
is the relative of that the company has given to other
Selling of
Mrs. Tanyapon franchisors.
Product
Kraibhubes
(OP. V&P)

Other Incomes 4,379 - - - The company has charged the handling

charges according to the condition in
(Mr. Wasan
franchise contract such as transportation
Khorcharoen) - - -
438,098 expense, production inspection expense,
etc. which was the same as the condition
Other Incomes that the company gave to other
- - -
(OP. V&P) 18,692 franchisors.
Other income that the company charged
to OP. V&P was more than what was
Other Incomes
charged to OP. C&P International due to
(OP. S&V)
the collection for permanent branch staff
expense (according to Franchise
Contract) while OP. C&P International
supplied its own permanent branch staff.
Other income was from OP. S&V such as
franchise fee.
 Person/ Transaction Value (Baht) Balance (Baht)
Juristic Person that Type of
Relationship As of 31th As of 31th Necessity and Reasonability Audit Committee's Opinion
may have conflict Transaction 2012 2013
Dec 12 Dec 13
of interest
B Vita International Mrs. Rakchanok Product 5,259,346 5,404,206 980,000 922,500 The company ordered Lansley instant It was the normal trade
Co., Ltd. (“B Vita”) Chiangthong Purchase* coffee product from B Vita which is the transaction with reasonable
who is the distributor and the price B vita sold to the trade condition.
Director and company was cheaper than other
Shareholder is customers due to the company's high
the relative of purchase order volume. In addition, this
brother of Mr. price was cheaper than the price quoted
Pratya Levan from other distributors to the company and
the company's gross profit rate yielded
from such instant coffee distribution was in
the same level as some types of the
company's product.

Remark: * Transaction and balance value for related party transaction execution with OP. C&N International and B Vita International Co., Ltd. was started to be counted from 20th April
2012 which was the date that Mr. Pratya Levan was appointed as a company's director but the value and balance according to above Table was started to be counted from
the beginning period in order to indicate the transaction continuity.

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BEAUTY COMMUNITY PUBLIC COMPANY LIMITED

Related Transaction Which Will Be Taken In The Future

In addition, the Company Board of Directors’ Meeting No. 6/2555 and the resolution of the Shareholders’ Meeting
No. 3/2555 hadthe resolution to approve the budget at the amount of Baht 73.29 million (exclude decoration expense),
estimated building construction cost as of October 5, 2012,for construction the buildings in the rented land. The buildings will
be used as warehouse, training center, office, and employees’ dormitory (integrally referred as “Constructions”). After that the
Company Board of Directors’ Meeting No.3/2557, dated March 5, 2014 had its resolution to approve the additional budget
at the amount of Baht 59.83 million (exclude decoration expense), for modification of the Constructions. Thus, total cost of
building construction, infrastructures, and additional parts are around Baht 133.12 million (This amount is estimated by the
designed company. It is not the final amount caused by bidding of construction work). The revision of Constructions’ value
is caused by (1) increasing of construction price per square meter, compared to the price in 2012; and (2) extension of scope
of work and increasing in work quantity to cover and support increased product quantities and turnovers caused by
expansion of contribution channels.
However, the consideration was made based on, after the expiry date, no extension of the land rental agreement
and no transferring of ownership of the building to the Tenant. Thus, the Tenant is subjected to return the land to the Tenor
in the original condition. To make it transparent, shareholders will be informed about the changed value of building con-
struction and utilization of the Constructions for the benefits of Company’s business. Although, the land rental value which is
increased by the agreement term extension is not subjected to approval of the Shareholders’ Meeting resolution according
to the list of related transaction, the Board of Directors’ Meeting considered submitting the details of land rental for 30
year-term and the Constructions’ value for requesting the approval from the Annual Shareholders’ Meeting.
Accordingly, BEAUTY , then, disclose the information in relation with any related transaction to the Stock Exchange
of Thailandor make any other related action to comply with rules of the Securities and Exchange Commission. The Company
will also conduct the Shareholders’ Meeting to request for the resolution to approve for making such transaction by receiving
3 of 4 of total votes from shareholders or authorized persons without counting the votes of the shareholders who have
conflict of interests (if any), Thus, the Company has its responsibility to conduct the Shareholders’ Meeting to request for
approval of such transaction and other related transaction, then making the report and disclose the information of such items
(see details about information of land rental, investment in construction, and opinion of independent financial consultant
regarding list of rented land and construction investment of Beauty Community Public Company Limited; showing in the
Shareholders’ Meeting materials of 2014, which will be held on April 25, 2014 at Crystal Ball Room 1,2, 2nd floor, E building,
Crystal Design Center (CDC), 1420/1, Praditmanoondham Road, Klong Chan sub-dirtrict, Bung Kum district, Bangkok
10240)
The key contents of changing in approval for land rental and building construction are summarized as follows;

Description The resolution of the Board of The resolution of the Board of

Directors’ Meeting dated October Directors’ Meeting No. 2/2557,
5, 2012 and the resolution of the dated February 2 5, 2014 and
Shareholders’ Meeting dated No. 3/2557, dated March 5, 2014
October 17, 2012
Land rental period Land rental for 20 years Land rental for 30 years
Rental value Baht 21.84 million Baht 38.28 million
Building construction Baht 73.29 million (exclude VAT) Baht 133.12 million (exclude VAT)
(Exclude VAT)
Building construction Baht 78.42 million (include VAT) Baht 142.43 million (include VAT)
(Include VAT)
Rent and Building Construction Baht 100.26 million Baht 180.71 million
(Include VAT)

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The amendment of land lease from Mrs. Tanyapon Kraibhubes (“ Lesser “), a director and major shareholder of the
Company by making notes at the end of lease to extend the lease term for 10 years, totaling 30 years as compensation for
10 years extension of the lease, the amount of Baht 16.44 million is considered as a related transaction by Capital Market
Supervisory Board No. 21/2008 Re: Rules on Related Transactions of the Company. And the Notification of the Stock
Exchange of Thailand: Disclosure of Information and Other Acts of Listed Companies Regarding the related transactions 2003
(Disclosure of Related Transaction “) with a size of 16.44 million baht or 1.66 percent of the Tangible asset value of the
company as at December 31, 2013, which less than baht 20 million, or 3 percent of the tangible assets value of the Company.
However, at the end of the lease, there will be no transfer of ownership of the building to the lesser. The lessee is
obligated to deliver the return of land to the lesser in its original condition. However for the purposes of using the buildings
for business of the Company the Board of Directors has decided to lease the land in the period of 30 years and this
resolution requires shareholder approval at a general meeting of the shareholders.
Criteria or procedure of approval for connected transaction
The Company has the policy in presenting the connected transaction with transparancy. In which, the Company concerned
for the highest benefits. The transaction that may create the conflict of interest be presented to the board of director for
approval, in order to allow the highest benefits and to protect the investors of the company. Such transaction must follow the
regulation annoucned by the board of director of SET or related law. For any connect transaction that is deemed to have
some conflict of interest, the approval will not be granted.
In case of the connected transaction in ordinary sales such as buying prpducts and selling product, the company has the
policy that will manage each regulation to be consistant with the nature of selling and the price can be compared with the
price sold to other person. The audit committe will consider and provide the opinion for such transaction and will report to
the board of director each quarter with reason, including the impact that may affect the company business.

The tendency of connected transaction in future

In the connected transaction that may arise in the future, the regulation must be consistant with the nature of transaction
and condition of maret. The company and/or its subsidiary will allow the audit committe to provide the opinion for the
commission rate, including the nessesity and appropriatio of such transaction. If there is any conflict of interest arises, the
company will follow the regulation of SET to solve such issue and used the law enforcement. More over, the opinion of the
audit commotte will be used for consideration of the board of director and the shareholders. The company may provide the
connected transaction in the note to the financial statement that has been approved by the auditor, and may be apprears i
the annual report as well.

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Report of the committee responsibilities

to the financial Statement
The Board of Directors is responsible for the financial position of Beauty Community Public Company Limited,
including all financial information appearing in the annual report, which is prepared under the general accepted Thai
Accounting Policy, and enclose with important information for the benefits of shareholders and general investors.
In this regard, the Board of Directors has assigned Audit Committee to audit and report the performance in the
financial statement to the Board of Directors. The Opinion of Audit Committee will be presented in the report of the Board
of Directors as appeared in this annual report.
The Board of Directors believes that, the internal control system of the Company is conducted with transparency
and can create the confidence that the financial statement of Beauty Community Public Company Limited for the year
ended December 31, 2013 is reliable and presented according to the general accepted Thai Accounting Policy.

(Pol.Lt.Gen. Padet Charuchinda) (Suvin Kraiphubet MD.)

Chief Executive Officer

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Report of Audit Committee

The Independent Audit Committee of Beauty Community Public Company Limited is consisted of 3 persons as
follows:
1. Dr. Peerapong Kitiveshpokawat Independent Director and Chairman of Audit Committee
2. Col. Attapon Srisangwarn Independent Director and Audit Committee
3. Mr. Viboon Pojanalai Independent Director and Audit Committee

The Audit Committee mentioned above are qualified auditors according to the announcement of Stock Exchange
of Thailand on Qualification and Scope of Audit Committee (Edition 2) B.E. 2552 (2009).
In year 2013, the Audit Committee had conducted 4 meetings and the Audit Committee had performed their
duty with prudence, and used their knowledge and capabilities according to the scopes, duties, and responsibilities to
perform the given mission independently. The Audit Committee had performed their duties such as, being the
co-manager, internal auditor, and auditor for the benefits of all stakeholders, which can be summarized as follows:
1. Verify the accuracy and the adequacy of disclosure of the quarterly and annual financial statement year 2013 of the
Company, in order to ensure that the accounting system and report of financial statement is prepared under the general accepted
Thai Accounting Policy with adequacy, completeness and confidence.
2. Verify the internal audit and internal control system, in order to ensure that the Company has an appropriate and ef-
fective internal audit and internal control system.
3. Ensure that the operations of the Company is compliance with the guidelines set forth by the Securities and Exchange
Commission, Regulations of the Exchange Commission, and other laws related to business of the Company.
4. Ensure the adequacy and effectiveness of risk management.
5. Advise and Supervise the Company to conduct the business with Good Corporate Governance, in order to ensure the
transparency of operation, including the disclosure of related records or records that might contain conflicts of interests.
6. Propose the appointment and remuneration of the auditors of the Company, in order to grant the approval from the
shareholders’ meeting.
According to the internal control system, the opinion of the Audit Committee suggested that the internal control system
of the Company is overall in good position, in which the report is prepared under the general accepted Thai Accounting Policy with
adequacy, completeness and confidence. Moreover, the Company has an adequate risk management system, with Good
Corporate Governance, including with the steadily improved operational quality.

(Dr. Peerapong Kitiveshpokawat)

Independent Director and Chairman of Audit Committee

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Financial Position and Overall Operation

Report of the Auditor

Financial StatementDecember 31,Financial Statement for the year ended

December 31, 2013
The opinion of Miss. Somjintana Ponhirunrat, Certified Public Accountant No. 5599 from DIA International Audit-
ing Co., Ltd., represented that financial statementrepresenting the financial position of the Company as on December 31,
2013December 31,, the overall operation and cash flow for the year endedare presented with correctness according to
the significant conformity with generally accepted accounting principles

For the year ended of December 31,Financial Statement for the year ended of
December 31, 2012
The opinion of Miss.Somjintana Ponhirunrat, Certified Public Accountant No. 5599 from DIA International Audit-
ing Co., Ltd., represented that financial statementrepresenting financial position of the Company on December
31,December 31, 2012, overall operation and cash flow are presented with correctness according to the significant con-
formity with generally accepted accounting principles for the year ended.

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Summarized of financial statement of Beauty Community Public Company Limited

Statement of Financial Position
For the year endedDecember 31, 2013 and 2012
31 December 31 December 31 December
% % %
STATEMENTS OF FINANCIAL POSITION 2013 2012 2011
(Restated)
Current assets
Cash and cash equivalents 192,136,883.93 16.88% 298,264,197.19 27.65% 105,236,513.11 29.81%
Temporary investments 500,000,000.00 43.93% 460,000,000.00 42.64% - 0.00%
Trade and other receivables 25,844,476.05 2.27% 11,763,267.71 1.09% 6,997,606.45 1.98%
Inventories 175,773,668.59 15.45% 123,574,042.18 11.45% 92,645,953.72 26.24%
Total current assets 893,755,028.57 78.53% 893,601,507.08 82.83% 204,880,073.28 58.03%
Non-current assets
Property, plant and equipment 157,013,575.08 13.80% 122,111,200.12 11.32% 94,643,138.90 26.81%
Leasehold rights 11,100,410.71 0.98% 12,035,852.20 1.12% 13,261,480.60 3.76%
Intangible assets 10,763,824.62 0.95% 1,847,966.94 0.17% 1,357,803.31 0.38%
Deferred tax assets 409,123.99 0.04% 360,983.15 0.03% - 0.00%
Other non-current assets 65,015,928.68 5.71% 48,928,634.13 4.54% 38,890,672.65 11.02%
Total non-current assets 244,302,863.08 21.47% 185,284,636.54 17.17% 148,153,095.46 41.97%
Total assets 1,138,057,891.65 100.00% 1,078,886,143.62 100.00% 353,033,168.74 100.00%
Current liabilities
Trade and other payables 105,207,450.98 9.24% 68,832,567.88 6.38% 63,800,108.74 18.07%
Current portion of financial lease liabilities - 0.00% 266,129.62 0.02% 373,500.27 0.11%
Current portion of long-term loans from
- 0.00% 1,052,214.69 0.10% 1,016,724.04 0.29%
financial institutions
Accrued income tax 25,483,262.52 2.24% 12,951,319.69 1.20% 50,317,866.59 14.25%
Total current liabilities 130,690,713.50 11.48% 83,102,231.88 7.70% 115,508,199.64 32.72%
Non-current liabilities
Financial lease liabilities - 0.00% 558,505.27 0.05% 815,089.86 0.23%
Long-term loans from financial institutions - 0.00% 4,919,111.94 0.46% 6,086,461.39 1.72%
- 0.00% - 0.00% 954,073.32 0.27%
Employee benefit obligations 1,599,437.00 0.14% 1,281,551.00 0.12% 987,304.00 0.28%
Other non-current liabilities 2,546,550.00 0.22% 2,212,754.30 0.21% 1,616,400.00 0.46%
Total non-current liabilities 4,145,987.00 0.36% 8,971,922.51 0.83% 10,459,328.57 2.96%
Total liabilities 134,836,700.50 11.85% 92,074,154.39 8.53% 125,967,528.21 35.68%
Shareholders' equity
Share capital
Authorized share capital 300,000,000
300,000,000.00 300,000,000.00 55,000,000.00
common shares of Baht 1 each
Issued and paid-up share capital
300,000,000.00 26.36% 300,000,000.00 27.81% 55,000,000.00 15.58%
300,000,000common shares of Baht 1 each
Premium on share capital 556,439,628.87 48.89% 556,439,628.87 51.58% - 0.00%
Retained earnings
Appropriated
Legal reserve 27,858,528.96 2.45% 10,787,500.00 1.00% - 0.00%
Unappropriated 118,923,033.32 10.45% 119,584,860.36 11.08% 172,065,640.53 48.74%
Total shareholders' equity 1,003,221,191.15 88.15% 986,811,989.23 91.47% 227,065,640.53 64.32%
Total liabilities and shareholders' equity 1,138,057,891.65 100.00% 1,078,886,143.62 100.00% 353,033,168.74 100.00%

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Profit and Loss Statement

For the year ended December 31, 2013 and 2012

STATEMENTS OF
2013 % 2012 % 2011 %
COMPREHENSIVE INCOME
(Restated)
Revenues from sales 976,246,542.32 97.37% 769,887,779.59 99.00% 612,075,315.29 99.47%
Cost of sales (287,874,459.53) -28.71% (221,161,961.08) -28.44% (175,161,521.77) -28.47%
Gross profit * 688,372,082.79 70.51% 548,725,818.51 71.27% 436,913,793.52 71.38%
Other income
Interest income 21,565,359.95 2.15% 4,178,036.85 0.54% 950,193.45 0.15%
Others 4,850,538.58 0.48% 3,588,297.61 0.46% 2,287,775.19 0.37%
Total other income 26,415,898.53 2.63% 7,766,334.46 1.00% 3,237,968.64 0.53%
Total revenue 1,002,662,440.85 100.00% 777,654,114.05 100.00% 615,313,283.93 100.00%
Selling expenses (348,199,471.56) -34.73% (255,071,421.39) -32.80% (168,660,614.38) -27.41%
Administrative expenses (101,732,336.62) -10.15% (82,450,901.06) -10.60% (72,803,075.42) -11.83%
Finance costs (207,397.89) -0.02% (456,496.46) -0.06% (978,875.83) -0.16%
Profit before income tax 264,648,775.25 26.39% 218,513,334.06 28.10% 197,709,196.53 32.13%
Income tax (53,239,573.33) -5.31% (45,552,497.12) -5.86% (63,485,366.59) -10.32%
Total comprehensive income for the year 211,409,201.92 21.08% 172,960,836.94 22.24% 134,223,829.94 21.81%
* Gross profit calculated to sales

* Percentage rate of gross profit is calculated from dividing gross profit value with main sale revenue (other revenues excluded)
which is in accordance with gross profit rate that is disclosed in significant financial ratio.

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Statement of Cash Flow

For the year ended December 31, 2013 and 2012

STATEMENTS OF CASH FLOWS 2013 2012 2011

Cash flows from operating activities
Profit before income tax 264,648,775.25 218,513,334.06 197,709,196.53
Adjustment profit before income tax to cash receipt (disbursement)
from operating activities
Depreciation and amortization 32,160,800.03 22,667,566.17 17,346,389.54
Doubtful accounts 246,000.00 - -
Loss (reversal) on devaluation of inventories (48,900.81) (3,489,463.27) 784,907.87
Gain on sales of assets (204,927.13) (104,998.00) (50,899.91)
Loss on write off of assets 1,497,460.17 404,754.33 1,606,739.54
Employee benefit expenses 317,886.00 294,247.00 744,079.00
Interest expenses 207,397.89 456,496.46 978,875.83
Profit from operation before changes of
operating assets and liabilities 298,824,491.40 238,741,936.75 219,119,288.40
(Increase) Decrease in changes of operating assets
Trade and other receivables (14,327,208.34) (4,765,661.26) (3,668,395.48)
Inventories (52,150,725.60) (27,438,625.19) (20,372,952.31)
Other non-current assets (16,087,294.55) (10,037,961.48) (19,845,958.55)
(Increase) Decrease in changes of operating assets (82,565,228.49) (42,242,247.93) (43,887,306.34)
Increase (Decrease) in changes of operating liabilities
Trade and other payables 16,524,181.67 (8,386,440.57) (1,932,408.03)
Other non-current liabilities 333,795.70 596,354.30 402,697.55
Increase (Decrease) in changes of operating liabilities 16,857,977.37 (7,790,086.27) (1,529,710.48)
Cash generated (paid) from operation 233,117,240.28 188,709,602.55 173,702,271.58
Interest paid (207,397.89) (456,496.46) (978,875.83)
Income tax paid (40,755,771.34) (82,184,144.28) (26,162,497.77)
Net cash provided by (used in) operating activities 192,154,071.05 106,068,961.81 146,560,897.98
Cash flows from investing activities
(Increase) Decrease in changes of
temporary investments (40,000,000.00) (460,000,000.00) -
Building and equipment acquisition (47,916,425.78) (35,384,780.32) (22,160,652.10)
Proceeds from sales of equipment 1,272,442.99 105,000.00 2,624,252.34
Leasehold rights acquisition (300,000.00) - -
Intangible assets acquisition (9,541,440.00) (1,001,238.92) (945,680.52)
Net cash provided by (used in) investing activities (96,485,422.79) (496,281,019.24) (20,482,080.28)
Cash flows from financing activities
Payments for financial lease liabilities (824,634.89) (363,955.24) (2,464,269.17)
Repayments for long-term loans from financial institutions (5,971,326.63) (1,131,858.80) (1,436,801.22)
Decrease in loans from directors - (954,073.32) (33,039,899.16)
Proceeds from share capital increase - 822,500,000.00 -
Payments for cost of sale share capital - (21,060,371.13) -
Dividend paid (195,000,000.00) (215,750,000.00) -
Net cash provided by (used in) financing activities (201,795,961.52) 583,239,741.51 (36,940,969.55)
Net increase (decrease) in cash and cash equivalents (106,127,313.26) 193,027,684.08 (57,423,049.83)
Cash and cash equivalents as at the beginning of year 298,264,197.19 105,236,513.11 16,098,664.96
Cash and cash equivalents as at the end of year 192,136,883.93 298,264,197.19 (41,324,384.87)

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Significant Financial Ratio

For the year ended December 31, 2013 and 2012

Financial ratio 2013 2012 2011

Liquidity ratio
Current ratio / Liquidity ratio (Time) 6.84 10.75 1.77
Quick ratio (Time) 5.49 9.27 0.93
Cash ratio (Time) 1.80 1.07 1.59
Account receivable turnover (A/R) (Time) 147.80 303.59 402.40
Account Receivable (A/R) days (Day) 2 1 1
Inventory turnover (Time) 1.92 2.05 2.11
Inventory days (Day) 187 176 170
Finished goods turnover (Time) 2.73 3.20 3.19
Finished goods days (Day) 132 113 113
Account payable turnover (A/P) (Time) 6.38 6.21 5.60
Account Payable (A/P) days (Day) 56 58 64
Cash cycle (Day) 133 119 107
Profitability ratio
Gross profit margin (GP) (%) 70.51% 71.27% 71.38%
Operating profit margin (%) 26.42% 28.16% 32.46%
Operating cash flow margin (%) 72.55% 48.44% 109.19%
Net profit margin (%) 21.08% 22.34% 21.81%
Return on equity (ROE) (%) 21.25% 28.63% 99.37%
Efficiency ratio
Return on assets (ROA) (%) 19.07% 24.27% 49.68%
Return on fixed assets (%) 173.19% 179.58% 110.49%
Total assets turnover (Time) 0.90 1.09 2.28
Financial policy ratio
Debt to equity ratio (D/E) (Time) 0.13 0.09 0.55
Interest coverage ratio (Time) 1,184.2 331.53 177.45
Coverage ratio (Time) 0.64 0.15 2.48
Dividend payout ratio (%) 92.24% 124.21% 0.00%
Earning per share(EPS) (fully diluted) (Baht) 0.70 0.58 0.45

Note: Calculated from authorized capital for 300 million shares, its value is 1 Baht/share

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Explanation and analysis of financial position and overall operation

• Previous Overall operation
Beauty Community Public Company Limited was established on 19 October 2000 (originally known as
Monapolitan Company Limited) operatingretail business of beauty products such as Make-up, skin care and accessories.
In present day, these products are distributed in retail shops such as Beauty Buffet, Beauty Cottage and Beauty Market.
Moreover, the Made in Nature brand and Girly Girl brand are being distributed through Modern Trade.The products are
distributed through convenient stores, catalog and traditional trade, with different concepts such as different packaging
design, distribution channel and marketing position, in order to meet the needs of different target groups of customers.
Moreover, it is the best way to build customer base to cover all target groups of customers

Beauty Buffet, Beauty Cottage and Beauty Marketdistributed their products through retail shops. In which, the
Beauty Buffet is best in distributing the Make-up products, while Beauty Cottage, launched in 3rd quarter of
2011focuses on distributing natural products for skin care. In the 2nd quarter of year 2012, the Company has launched
the products under the concept of Made in Nature and being distributed by Modern Trade channel, in order to reach the
target groups of customers in wider range.

Most products are naturally madedaily used products such as shower cream and skin lotion/. For Beauty Market,
it firstly appeared in 3rd quarter of 2012 by having the concept of presenting mixture of Super Market and Beauty Shop
concept. Beauty Market is beauty specialty store that mainly sell beautyproducts. Hence, creates the difference and
noveltyin beauty shop industry. Girly Girl Products were launched in 2013 with 5 items 11 SKU, which were sold
throughconvenient store, catalog and traditional stores. In the present days, these products are available in 7-catalog. In
addition, the Company is seeking for new distribution channels for increasing the market.

The Company has continuously expanded the branches of retail shops both Bangkok and its vicinity, including
other provinces all over Thailand. Hence the total revenue of the Company continually grows from 777.65 million Baht in
2012 to 1,002.66 million Baht in 2013 or about 28.93%. The net profitof the Company in 2013 and 2012 was 211.41
million Baht and 172.96 million Baht (newly revised) or 21.08% and 22.24% respectively. However, the net profit of the
Company that increases continually is the result of debut of Beauty Cottage and its rapid expansion which has gross
profit higher than Beauty Buffet including that incomes increase while expenditures are stable leading to economy of
scale to run business along with income tax paying of corporate has lower rate from 23% to 20% in 2013.

At any rate, to make the Company grow sustainably; according to the tendency of make-up market value in
Thailand and Make-up exporting value that has continuous growth resulted by ASEAN Economic Community :AEC and
Free Trade Area: FTA, the Company has assigned the projects to develop new concepts of products that are related to
beauty, health and lifestyle, which are the Company’s specialist, in order to meet various needs of consumers. Moreover,
the Company continue to expand the branches and increase the distribution through E-commerce so that consumers
can access products easily.

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• Operation Analysis for year 2013- 2012

Company’s operation analysis in 2013 and 2012 are as follows:

Income
Sales structure by channel (Unit: Million Baht)
2013 2012 Changed
Revenue structure by channel % to % to
Amount % to sales Amount % to sales Amount %
total revenue total revenue
Retail shops :
- Beauty Buffet 770.50 76.85% 78.92% 651.68 83.80% 84.65% 118.81 18.23%
- Beauty Cottage 140.21 13.98% 14.36% 84.98 10.93% 11.04% 55.23 64.99%
- Beauty Market 13.32 1.33% 1.36% - 0.00% 0.00% 13.32 100.00%
Total sales from retail shops 924.03 92.16% 94.65% 736.67 94.73% 95.69% 187.36 25.43%
Franchises 23.90 2.38% 2.45% 20.84 2.68% 2.71% 3.05 14.65%
Wholesales & Oversea 9.39 0.94% 0.96% 6.12 0.79% 0.79% 3.27 53.39%
Modern Trade 13.87 1.38% 1.42% 1.39 0.18% 0.18% 12.47 896.36%
Other channel 5.07 0.51% 0.52% 4.87 0.63% 0.63% 0.20 4.11%
Total sales 976.25 97.37% 100.00% 769.89 99.00% 100.00% 206.36 26.80%
Other revenue 26.42 2.63% - 7.77 1.00% - 18.65 240.13%
Total revenue 1,002.66 100.00% - 777.65 100.00% - 225.01 28.93%

Total income of the Company in 2013 and 2012 is 1,002.66 Million Baht and777.65 million Baht respectively or
it is 28.93% of growth rate.The income from sale of the Company is from distribution 4 main products such as Make-up,
Skin care, Food supplement and Accessories by having average distribution proportion in 2013 around 46.73%, 47.24%,
0.12% and 6.28% respectively.

Revenue structure by product (Unit: Million Baht)

2013 2012 Changed
Revenue structure by product % to % to
Amount % to sales Amount % to sales Amount %
total revenue total revenue
Make up 452.68 45.15% 46.37% 383.67 49.34% 49.83% 69.01 17.99%
Skin care 461.14 45.99% 47.24% 333.03 42.82% 43.26% 128.11 38.47%
Food supplement 1.13 0.11% 0.12% - 0.00% 0.00% 1.13 100.00%
Accessories 61.30 6.11% 6.28% 53.19 6.84% 6.91% 8.11 15.25%
Total sales 976.25 97.37% 100.00% 769.89 99.00% 100.00% 206.36 26.80%
Other revenue 26.42 2.63% - 7.77 1.00% - 18.65 240.13%
Total revenue 1,002.66 100.00% - 777.65 100.00% - 225.01 28.93%

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The income of the Companycontinuously grows as the result of branch expansion of retail shops like Beauty
Buffet and Beauty Cottage and also the debut of Beauty market in 3rd quarter of 2013 including providing distribution
channels to modern trade with the concept of Made in Nature Brand, which was debuted in the 2nd quarter of 2012 and
Girly Girl Brand that was dispensed in convenient stores, catalog and traditional trade debuted in the last quarter of 2013
with following details

Revenue structure by brand (Unit: Million Baht)

2013 2012 Changed
Revenue structure by brand % to % to
Amount % to each product Amount % to each product Amount %
total revenue total revenue
Beauty Buffet
Make up 382.84 38.18% 48.32% 347.42 44.68% 51.39% 35.42 10.20%
Skin care 359.21 35.83% 45.33% 281.64 36.22% 41.66% 77.57 27.54%
Food supplement 0.87 0.09% 0.11% - 0.00% 0.00% 0.87 100.00%
Accessories 49.45 4.93% 6.24% 47.00 6.04% 6.95% 2.45 5.21%
Total Beauty Buffet 792.37 79.03% 100.00% 676.06 86.94% 100.00% 116.31 17.20%
Beauty Cottage
Make up 64.09 6.39% 43.83% 36.25 4.66% 41.71% 27.84 76.80%
Skin care 70.98 7.08% 48.55% 44.47 5.72% 51.17% 26.51 59.61%
Accessories 11.14 1.11% 7.62% 6.19 0.80% 7.12% 4.95 79.97%
Total Beauty Cottage 146.21 14.58% 100.00% 86.91 11.18% 100.00% 59.30 68.23%
Beauty Market
Make up 5.75 0.57% 50.00% - - - 5.75 100.00%
Skin care 4.78 0.48% 41.57% - - - 4.78 100.00%
Food supplement 0.26 0.03% 2.26% - - - 0.26 100.00%
Accessories 0.71 0.07% 6.17% - - - 0.71 100.00%
Total Beauty Market 11.50 1.15% 100.00% - - - 11.50 100.00%
Made in Nature 25.77 2.57% 100.00% 6.92 0.89% 100.00% 18.85 272.49%
Girly Girl 0.40 0.04% 1.56% - - - 0.40 100.00%
Other revenue 26.42 2.63% 100.00% 7.77 1.00% 100.00% 18.65 240.13%
Total revenue 1,002.66 100.00% - 777.65 100.00% - 225.01 28.93%

(1) Income from Beauty Buffet

The Company’s main income from sales was from distributing products under Beauty Buffet concept. In 2013 and
2012, the income was 792.36 million Baht and 676.06 million Bahtor 79.03% and 86.94% of total income respectively. The
growth rate was estimated for17.20% which resultedfrom branch expansion in every region of Thailand. At the end of 2013,
there were 183 branches (179 domestic branches and 4international branches), increasing from the end of 2012 with 149
branches (148domestic branches and 1 international branch). Product distribution under Beauty Buffet concept has the
distinction in presentation ofmodern, charming and colorful make-up, affecting high proportion of cosmetics distribution of
Beauty Buffet compared to other products, or48.32% of total turnover of Beauty Buffet. For Skin Care, Food Supplement and
Accessories, the average distribution proportions were 45.33%, 0.11% and 6.24% respectively.
Apart from distribution through retail shops operated by the Company, Beauty Buffetproducts are also
distributed through other channelssuch as franchises appointed by the Company and wholesalers who sell the products
in area where none of the company branches are existent including wholesale to foreign customers as the Company has
had a policy of abroad distributionthrough agent in term of wholesale. Theaverage turnover via such channels wereabout
2.97% and 0.07% of total turnover respectively. In present, the Companyhas not hadany policy of additional franchising.
The turnover through domestic wholesalers.has tended to decline in the future due to the Company’s branch expansion
policy for more area coverage in the future. However, the wholesale turnover of foreign customers has been likely
increased.

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(2) Income from BeautyCottage

Products under Beauty Cottage Concept wasfirstly debuted in the 3rd quarter of 2011 and by the end of 2011, the
Company has already opened 52 branches of Beauty Cottage (50 domestic branches and 2 foreign branches).The total
income was 146.21 million Baht or its growth rate was around 68.23% from 2012. For 2012, the Companyearned from
Beauty Cottage for 86.91 million Baht with total of 31 branches at the end of 2012 (31domestic branches).
Beauty Cottage has focused on presenting products produced fromdiverse types of natural extracts with
outstanding skin care property. Therefore, the average proportion of skin care turnover was 48.55 % compared to total
turnover of Beauty Cottage while the average proportions of Make-Up and Accessories were 43.83 % and 7.62% respec-
tively. Beauty Cottage productshave also distributed to wholesalers same as Beauty Buffet with the proportion of distribution
about 2.40 % of turnover without any distribution through franchise.
(3) Income from Beauty Market
Products under Beauty Market concept wasfirstly debuted in 3rd quarter of 2013 and at the end of 2013; the
Company opened 3 branches of Beauty Market in total with total income earned for 11.51 million Baht.
Beauty Market is theconcept presenting the form of integration between Supermarket and Make-up shop
concepts. Under this concept, the advantages of buying various products in super Market and convenient stores and
excitement of shopping Make-up have been integrated. Beauty Market is beauty specialty store focusing on particular
selling of beauty products, resulting in differentiation and originality in Make-up store field.
(4) Income from Made in Nature and Girly Girl
The Company debuted products under Made in Nature concept through the channel of big-sized retail shops
or modern trade in April 2012 that is high-quality natural product concept with income from distribution in 2013 and 2012
for 25.77 million Baht and 6.92 million Bahtrespectively or the growth rate of 272 %. Today, the display of Made in Nature
products for 7 SKU products has been distributed in modern trade and famous supermarket for total of 11 locations such
as 115 branches of Big C Supercenter, 153 Branches of Tesco Lotus, and 49 branches of Tops Supermarket. For Girly
Girl Products, they were debuted in the last quarter of 2013 with 5 items and 11 SKU. They have been skin care products
distributed through convenient stores, catalogs and traditional trade. Now, they have already been distributed in
7-catalog but for other channels, new distribution method has been under considerationwith 0.40 million Baht of income
from distribution in 2013.
(5) Other incomes
Other incomes in 2013 and 2012 were 26.42 million Baht and 7.77 million Baht, respectively. Other incomes of the
Companywere income from interest received with 21.57 million Baht and 4.18 million Baht respectively in 2013 and 2012.
Furthermore, the Companyalso had other incomes in 2013 and 2012 for 4.85 million Baht and 3.59 million Baht, mostly
includingfranchise service fee and income from employee such as uniform cost, etc.
Cost of Goods Sold and Gross Profit
Cost of sales of the Company in 2013 and 2012 was 287.87 million Baht and 221.16 million Baht respectively or
70.51% and 71.27% respectively. According to gross profit margin in 2013, in the 3rd quarter of 2013, the Company debuted
new design of Beauty Market stores with lower gross profit than the distribution through Beauty Buffet and Beauty Cottage
retail shops, causing the decrease in overall gross profit rate in 2013 compared with 2012.
As the Company has had no policy of goods production by itself, the main component of cost of sales is cost of
goods production order for Beauty buffet, Beauty Cottage and Beauty Market or its proportion has been more than 99% of
total cost. Such proportion has been quite stable in each year due to quite low rate of fluctuation in production order price.
The Company will yearly plan the production order and launch of new products ,resulting the Company’s flexibility in update
of sale price determination conforming to production order cost. Other costs of goods sold includegoods transportation cost,
tax and other expenses for import and their average proportion was approximately 0.5% of total cost of sales.
In part of Made in Nature products, their cost structure has been different from other types of products due to the
distribution of the Company through modern trade. Modern trade distribution is the term of outright sale that the owner will
charge 2 portions of expense including the first portion for initial fee of around 5,000-900,000 Baht (bookkeeping as sales
expense) and profit share from sales for around 25-40% (bookkeeping as deduction amount from turnover). Such expense
has been different depending on the terms of each department store.
Furthermore, in 2013 and 2012, the Company distributedMade in Nature products in term of consignment towith 2
agents consisting of the distribution through 7–catalog of CP All PCL. An amount of the printing media, advertisement,
product storage and distribution costswill be paid every 2 months. Product sale price quoted for CP All PCL.will have
discount level similar to profit share from sales in case of outright sale via modern trade and the distribution by consignment
method to Wuttisak Clinic owed byWuttisal Pharmacy Inter Co., Ltd. Theproduct sale price quoted for Wuttisal Pharmacy
Inter Co., Ltd. will also have discount level similar to profit share from sales in case of consignment through modern trade.

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Anyhow, the terms of product distribution for both outright sale and consignment have affected thecost of sales of
Made in Nature products to be in higher level than Beauty Buffet and Beauty Cottage. However, this kind of distribution will
help reduce selling and administrative expense of the Company such as salesperson expense, rental fee, training cost,
commission, etc., causing net profit ratioof distribution of Made in Nature products to be in similar level with other products
of the Company.
At the end of the last quarter in 2013, the Companylaunched new products under Girly Girl brand for 8 SKUs. They
are fighting brand of teenager skin care and make-up group with “White and Baby” concept. The raw material used for
production (active ingredient)has been imported from Japan. Packaging design has focused on modern teenagers and small
size of products for placing on sale in convenient stores and catalog, such as 7-Eleven, Family Mart, 7-Catalog, Friday
Catalog and Traditional Trade emphasizing on penetration of teenager target group and reasonable price. At the end of
2013,these products have already been distributed via 7-Catalog. The cost structure and distribution term of Girly Girl
products have been similar to Made InNature products.
Selling and Administrative Expense
Selling expense in 2013 and 2012 was 348.20 million Baht and 255.07 million Baht respectively or its proportion of
34.73 % and 32.80% of total income respectively. Main selling expense of the Companyincluded rental fee and service charge
forbranch operation of retail shops. In 2013 and 2012, total expense was 166.56 and 122.13 million Baht respectively or its
proportion of 16.61 and 15.71% of total income respectively. Other important selling expenses included employee-related
expense and commission of salespersons in 2013 and 2012 estimated for the average proportion of 10.69% and 9.93% of
total income respectively, and advertising expense and sales promotion product estimated for the average proportion of
2.18% and 2.16% of total income of the Company respectively. Theproportion of selling expense to total income increased
from 2012 due to the proportional increase in rental fee and service charge from continual branch expansion, including initial
fee paid to Modern Trade stores for Made in Nature product distribution and employee-related expense increased from
minimum wage adjustment as well as annual wage adjustment.
Administrative expenses in 2013 and 2012 were101.73 million Baht and 82.45 million Baht respectively or its propor-
tion was 10.15% and 10.60% of total income respectively. The important administrative expense wasemployee-related
expense. In 2013 and 2012, this expense was 73.54 and 53.87 million Baht respectively or its proportion is 7.33% and 6.93%
of total income. Other administrative expenses included travelling cost, training cost, any fees, office expense, depreciation
expense, and others,with their proportions for 2.82% and 3.67% of total income. Anyhow, in 2013, such proportion decreased
due to increase in total income growth while some administrative expense was stable or grew in lesser proportion than
income such as travelling cost, expense in office and depreciation expense, etc. However, in 2013 and 2012, the Company
paid 7.24 million Baht and 9.18 million Baht respectively for fees and professional consulting fees such as audit fee, internal
audit fee, legal expense and any fees as a result of registration in the Stock Exchange of Thailand including other profes-
sional consulting fees. Anyhow, the Companyhas considered on administrative expenses for maximum benefit to the
Company and controlledthem not to be too high. The cost saving program has been applied in order to control the
controllable expenses for optimum efficiency.
Net profit
The Company’s net profits in 2013 and 2014 were 211.41 million Baht and 173.70 million Baht respectively or the
proportion was 21.08% and 22.34% respectively. The net profit ratio increasingly adjusted due to increase in turnover and
corporate income tax payment at declining rate from 23% in 2012 to 20% in 2013. However, in 2012, the Company’s
expenses in selling common stocks for capital increase to the plebes in the Stock Exchange of Thailand included
underwriting fee for capital increase in common stocks paid to financial consultants, filing fee for application submission paid
to the Office of the Securities and Exchange Commission and initial fee paid to the Stock Exchange of Thailand, totaling to
21.06 million Baht. This amount was deducted from premium on share capital in part of shareholders’ equity but in term of
tax, it could be deducted as expense for calculating corporate income tax, affecting decrease in corporate income tax in
2012. In 2013, some accounting entries were adjusted according to the application of new issue of accounting standard
which has been enforced in this year such as deferred income tax, etc. (please see the detail in Annual Financial Statement).
Financial Position Analysis for 2013 and 2012
Asset
Total asset of the Company at the end of year 2013 and 2012 was 1,138.06 million Baht and 1,078.89 million Baht
respectively or its growth rate proportion was 5.48%. The main reason from total asset growth in 2013 was because of con-
tinual turnover growth from products under Beauty Buffet and Beauty Cottage concepts including the roll-out of Beauty
Market concept, causing more cashes from operation, more inventories, more fixed assets from business expansion to the
Company including money receipt from capital increase in common stocks sold to people in December 2012.
Current asset at the end of year 2013 and 2012 was 893.76 million Baht and 893.60 million Baht respectively or its
proportion was 78.53% and 82.83% of total asset respectively. The company’s current assets consisted of following main
assets;

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(1) Cash and cash equivalent at the end of year 2013 and 2012 was 192.14 million Baht and 298.26 million Baht
respectively or its proportion was 16.88% and 27.65% of total asset respectively. In 2012, cash and cash equivalent
considerably increased from operating profit and money receipt from capital increase in common stock sold to people in
December 2012.
(2) At the end of 2013 and 2012, the Company had current investments for 500 million Baht and 460
million Baht respectively or 43.93% and 42.64% of total asset respectively. It was short-term deposit with many domestic
financial institutionsand it was the money obtained from capital increase in common stocks sold to people in December 2012
( current investment means short-term deposit with financial institutions with due within over than 3 months but not over than
a year)
(3) Net accountreceivablesatthe end of year 2013 and 2012 were 10.04 million Baht and 3.17 million Baht
respectively or its proportion was 0.88% and 0.29% of total asset respectively. The Company had account receivables in very
low proportion compared to total assets as the Company soldalmost of its products in cash with 2 days for collection period.
The Company has granted trade credit to franchise receivable, foreign wholesale receivable and company employees. In
2012, the Company started to distribute Made in Nature products through modern trade channel, resulting in the increase in
trade credit granted for partner in this part as well as increase in franchise turnover, causing increase in total account
receivables. However, the collection period still remained at the level of 2 days. Anyhow, most of overdue receivables were
modern trade account receivables, franchise account receivables from product selling, foreign wholesale receivables and
employee receivables. Moreindulgence on company uniform cost was given than normal receivables. However, over than 6
months overdue account receivables were unavailable for the Company.
2556 2555 Variance
Description
Amount % Amount % Amount %
Due in term 7.40 73.72% 2.97 93.75% 4.43 149.2%
Overdue : Less than 3 months 2.23 22.25% 0.19 5.88% 2.05 1098.6%
Overdue : Over 3 months but less than 1 year 0.40 4.03% 0.01 0.37% 0.39 3344.2%
Total trade account receivable 10.04 100.00% 3.17 100.00% 6.87 216.9%

(4) Other Receivables at the end of 2013 and 2012 were 15.80 million Baht and 8.59 million Baht respectively
or its proportion was1.39% and 0.80% of total asset respectively. Most of them wereproduct deposit, prepaid expense,
accrued interest received, etc.
(5) Inventories at the end of 2013 and 2012 were 175.77 million Baht and 123.57 million Baht respectively or it
was 15.45% and 11.45% of total asset respectively. The Company’s inventories could be separated into ready-made
products, packages and consumables as shown in following table.
Inventories (Unit: Million Baht)
2013 2012 Variance
Description
Amount % Amount % Amount %
Finished goods 127.87 72.65% 83.24 67.20% 44.64 53.63%
Packaging 35.92 20.41% 31.63 25.54% 4.29 13.57%
Work in process 10.09 5.73% 7.57 6.11% 2.51 33.18%
Supplies 2.13 1.21% 1.42 1.15% 0.71 49.80%
Total 176.01 100.00% 123.86 100.00% 52.15 42.10%
Deduct Allowance for devaluation of inventories - 0.24 - - 0.29 - 0.05 -16.98%
Net 175.77 - 123.57 - 52.20 42.24%

The Company has had no policy to produceproducts by itself but applied the production order by allowing the
manufacturers to supply all materials used in production. Therefore, almost inventories of the Companyhave been in form of
ready-made products and packages with average value of 93% of total inventories. However, ready-made products will have
policy for setting allowances of product devaluation and deteriorated products by considering from product aging day. For
example, the allowance of skin care product has been set in faster rate than make-up and accessories due to their shorter
sale life. If any products have been found damaged, expired or cancelled for sale, the allowances will be 100% set for reserve.
For packages, the allowance setting policy of the Company has been in the slower rate than ready-made products since most
packages can be used with many kinds of products and some parts can be reprinted for new labels in case of cancellation
for product manufacturing. For consumables, most of them included employee uniform and other equipment and their
devaluation and deterioration have already been set.
Inventories that have been set for devaluation and deterioration allowance reserves were mostly bottle, box, and
stickers. The products with manufacturing cancellation and inability for reuse as well as damaged ready-made products will
be separated as damaged warehouse. In 2013 and 2012, the Company set the allowance reserve in part of damaged prod-
uct warehouse for 0.11 million Baht and 0.21 million Baht respectively. The damaged product warehouse quantity was
reduced in 2013 due to the Company’s good stock management and destruction of damaged product in December 2013
and 2012. Such destruction has complied with all criteria of Revenue Department.
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At the end of 2013 and 2012, the Companyhadaverage sale period for 187 days and 176 days respectively, increasing
due to the calculation inclusive inventory in type of package. However, if calculating only for sale period of ready-made prod-
uct by the end of 2013 and 2012, it will be 132 days and 113 days respectively and that has been reasonable for great
amount of products reserved for retail shopsales. The Company needed to stock a large number of products for newly
opened branches as well as for support on the store opening with new concept of Beauty Market store which has been the
bigger sized store. However, the Companyhas regularly checkedaging day of inventories and managed them according to the
remaining aging day for each type of product, resulting in 98% of inventories in normal warehouse of the Companyhas
beenthe product with not over than one year aging day and this has been regarded as the availability of low deteriorated
product risk.
Non-current asset by the end of 2013 and 2012 was 244.30 million Baht and 185.28 million Baht respectively or its
proportion was 21.47% and 17.17% of total asset respectively. Major non-current asset of the Companyincluded land,
building and equipment. By the end of 2013 and 2012, such assets were 157.01 million baht and 122.11 million baht
respectively or 28.58% of growth rate. Mostly, it was the investment inoffice automation and furnishingsfor branch expansion
of Beauty Buffet, Beauty Cottage and Beauty Marketretail shops
Other significant non-current assets included long-term leasehold of retail shops at Mahboonkrong Department
Store for 1 year with amortization for 7 years according to straight-line method and the contract expired in 2013. Anyhow,
the Companyhas renewedsuch contract for 10 years more and this new contract will expire in 2023. In addition, other non-
current assets includedrental deposit that has continually increased from branch expansion and intangible asset included
computer programs used for the Company’s operation.
However, the capital raising from the public in December 2012, the Company will invest in expansion as well as
invest in internal operation system improvementsuch as computer program system, warehouse expansion, and training sec-
tion, etc. in order to support the business expansion in the future, resulting in increase in total asset of the Company after
registration in the Stock Exchange. Currently, the construction of warehouse and training section has been in construction
design and permission request process. It has been expected that the construction will be finished within 2015. For
computer system, the Company investedin new system development for improvement of information technology system both
of Point of Sale (POS) and Enterprise Resource Planning (ERP)(accounting program) by already signing sale contract of
programs andMICROSOFT DYNAMICS AX 2012 R2 + AX RETAIL with Tectura (Thailand) Co., Ltd.Now it has been in the
process that Tectura (Thailand) Co., Ltd.has entered for data collection in order to develop program and it has been
expected to be operational within this 2014.
Liquidity
(1) Cash Flow Liquidity
Cash flow from operating activity of the Company in 2013 and 2012 was 192.15 million Baht and 106.07 million Baht
respectively. Most of them were resulted from the increase in the Company’s inventory for support on increasing turnover
expansion and corporate income tax payment to Revenue Department in 2013 and 2012 for 40.76 million baht and 82.18
million Baht respectively (the Company complied with laws in all aspects for tax payment). Cash flow frominvestment
activity in 2013 and 2012 was 96.49 million baht and 496.28 million baht respectively due to the use of money to increase in
current investment for 40.00 million baht more in 2013 and fixed asset investment such as building construction, purchase of
equipment and office furnishings and investment for purchase of computer programs used for management. For cash flow
from funding activity in 2013 and 2012, it was 201.80 million Baht and 583.24 million Baht respectively. In 2013, the
Company had deficit cash flow from funding activitydue to payback of long-term loan from financial institutions for 5.97
million Baht, payback of debt according to financial lease for 0.82 million Baht and payment of dividend for 195.00 million
Baht. In 2012, the Company mainly paid the dividend for 215.75 million Baht but had cash flow received from increase in
capital for 822.50 million Baht.
(2) Liquidity Ratio
In 2013 and 2012, the Company had liquidity ratio for 6.84 times and 10.75 times respectively which was in good
level since the Company had quite high cash requirement from operation. The liquidity ratio in 2012 increased significantly as
the Company received money from capital increase in common stocks sold to people in December 2012. However, when
considering from cash cycle, it was seen that the Company’s cash cycle lasted longer. In 2013 and 2012, the Company had
cash cycle for 133 days and 119 days respectively with main cause from increase in average product sale period and a bit
decrease in debt payback period. However, the Company still hadadequate liquidity for such long-term cash cycle
management, resulting independence for short-term loan from financial institutions.
Source of Capital
Total liability of the Company by the end of 2013 and 2012 was 134.84 million Baht and 92.07 million Baht
respectively. The important current liability has been as follows.

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(1) Account payable by the end of 2013 and 2012 was 53.07 million baht and 37.11 million baht respectively or its
proportion was 4.66% and 3.44% of total assets respectively. The pay-back periodwas 56 days and 58 days respectively.
Account payable increased in 2013 partly due to product ordering for import in order to be distributed in Beauty Market shop
which is a big-size shop and product reservation for the end of the year.
(2) Other liabilities consisted ofaccrued expense of Revenue Department creditor andasset cost’s creditor such as
rental fee of building and office automation. By the end of 2013 and 2012, it was 52.14 million baht and 31.73 million Baht
respectively or its proportion for 4.58% and 2.94% of total assets respectively.
Non-current liability of the Companyat the end of 2013 and 2012 was 4.15 million Baht and 8.97 million Baht
respectively. By the end of year 2013, the Company had to pay long-term loan from financial institutions for 5.97 million Baht
and paid back the debts according to financial lease which has been hire-purchase of motor vehicles’ executives for 0.82
million Baht. Moreover, other non-current liability of the Companyhas been non-current liability occurred from obligation of
employee benefit thathas been the estimate of benefit compensation for employees after resignation and pension according
to Labor Act B.E. 2541 in benefit provision when retirement and other long-term benefits to employees according to right and
working duration pursuant to Accounting Standard Issue 19 with effective date started in 2011.
Shareholder’s equity by the end of 2013 and 2012 was 1,003.22 million baht and 986.81 million Baht respectively.
In 2013, shareholder’s equity increased from 2012 since profitable turnover caused higher retained earnings. From 2013 Annual
Shareholders’ Meeting on 25 April 2013, the meeting approved the Company to pay dividend from overall operation in 2012
inthe rate of 0.35 Baht/share for 300 million shares in the amount of 105 million Baht and it was on 22nd May 2013. From
the Board of Directors’ Meeting No. 4/2013on 13th August 2013, the resolution was the approval for interim payment of
dividend from 6-month period of overall operation ended on 30thJune 2013 in the rate of 0.30 Baht/share for 300 million
shares in the amount of 90 million Baht and it was on 12th September 2013.
For 2012, shareholder’s equity increased from year 2011 because of profitable turnover that led to higher retained
earnings. Furthermore, the Company increased authorized capital from 55 million Baht to 300 million Baht (1 Baht/share). It
has been paid-up authorized capital for 300 million Baht by allocating to 2 directors for 162.50 million shares for 162.50 million
Baht and has already been paid on 31 July 2012 and 1 August 2012. The amount of shares offeredfor sales to the plebes
and employees were 82.50 million shares at 8.00 Baht/share of share price andhas already been paid on 4 December 2012
for 660 million Baht. This caused premium on common stocks for577.50 million Baht and the Companyreduction the stock
selling expense in premiumon common stocks for 21.06 million Baht, resulting in the premium on common stocksfor 556.44
million Baht accompanying with interim payment of dividend from retained earnings for 215.75 million Baht and the balance
of retained earnings for 119.22 million Baht (please seethe details in financial statement report on December 31, 2012 and
2011: Notes toFinancial StatementItem 19 on Authorized Capital on page 17).
Debt to Equity Ratio at the end of 2013 and 2012 was 0.13 times and 0.09 times respectively. It trivially increased
due to more increase in total debts than increase in shareholder’s equity. It was seen that theCompany used most of investment
fund sourcefrom shareholder’s equity to run the business, causing low financial risk and availability of liquidity in business
operation.
However, in the 3rd quarter of 2012, the Company adjusted par value from 100 Baht/share to 1 Baht/share as well
as transformed into the public company by allocating 82.50 million ordinary shares for sale offering to the plebes as well as
executives and employees.

Auditor Compensation
The financial statement of the Companywas audited by Miss. SomjintanaPonhirunrat, the Certified Public Account
with license no. 5599 from D.I.A International Auditing Co., Ltd. with total expense in 2013 and 2012 for 0.80 million Baht
and 0.80 million Baht respectively.
Factors Affecting Future Operation or Financial Position of the Company
Effect fromChange of Distribution Channel
As in the 2nd quarter of 2012, the Companylaunched new products under Made in Nature concept by distributing
through major retail shops or modern trade. The cost of sales for such channelwas higher thanthe distribution through retail
shop channel that has currently been the major channel of the Company. If the Companyhad more sale proportion through
this channel, it might likely cause decrease in gross profit rate of the Company.. However, product distribution of both type
of sale and consignment will reduce selling and administrative expense of the Company such as salesperson expense,
rental fee, training cost and commission, etc., resulting in net profit ratio of distribution through modern trade in similar level
to other products of the Company. However, the Companyhas expected that the product distribution through modern trade
can access to consumers in wider range and it has expected that total income and net profit of the Company will increasingly
adjust in the future.

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AUDITOR’S REPORT
To The Shareholders of
BEAUTY COMMUNITY PUBLIC COMPANY LIMITED
I have audited the accompanying financial statements of BEAUTY COMMUNITY PUBLIC COMPANY LIMITED,
which comprise the statement of financial position as at December 31, 2013, and the statement of comprehensive income,
statement of changes in shareholders’ equity and statement of cash flows for the year then ended, including notes of summary
of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance
with The Financial Reporting Standards, and for such internal control as management determines is necessary to enable
the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility
My responsibility is to express an opinion on these financial statements based on my audit. I conducted my
audit in accordance with standards on auditing. Those standards require that I comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’ s preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’ s internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit
opinion.

Opinion
In my opinion, the financial statements present fairly, in all material respects, the financial position of BEAUTY
COMMUNITY PUBLIC COMPANY LIMITED as at December 31, 2013, and its financial performance and cash flows for
the year then ended in accordance with The Financial Reporting Standards.

Emphasis of Matter
Without qualifying my opinion, I draw your attention to notes 3.1 and 5 to the financial statements as explained
involving the impacts on the Company from changes in new accounting policy since Thai accounting standard No.12
“Income Taxes” was applied.
D I A International Audit Co., Ltd.

(Miss Somjintana Polhirunrat)

C.P.A. (Thailand)
Registration No. 5599

February 25, 2014

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Appendix 1
Detail of Board of Director and Company Executives

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 Biography of Director and Executive of Beauty Community Public Company Limited
Family Working Experience in the Past 5 Years
Shareholdi
Name-Surname / Age Relationshi
Educational Qualification ng in the Period of Institute / Company's
Citizen Identity No. (Years) p among Position Type of Business
Executives
Company Time Name
Lt. Gen. Padet 73 - Bachelor of Science - - 2012 – Chairman of the Board Beauty Community Public Distribution of Skin Care and Cosmetics
Charuchinda Chulachomklao Royal Military Present and Independent Company Limited Products
Academy Director

Passing for Director Accreditation 2000 – Army Senior Advisor Army Government Sector
Program (DAP) Training from Thai Present
Institute of Directors
Mr. Suwin Kraibhubes 45 - Bachelor of Science Mrs. 32.33% 2000 – Chief Executive Officer, Beauty Community Public Distribution of Skin Care and Cosmetics
Faculty of Medicine Tanyapon Present Director, Acting for Company Limited Products
Chiang Mai University Kraibhubes Director of Marketing
's Husband Department, Acting for
Passing for Director Accreditation Director of Product
Program (DAP) Training from Thai Development and
Institute of Directors Procurement
Department
Mrs. Tanyapon Kraibhubes 44 - Diploma of Nursing, Mr. Suwin 21.67% 2000 – Deputy Chief Executive Beauty Community Public Distribution of Skin Care and Cosmetics
Preliminary Level Kraibhubes Present Officer and Director Company Limited Products
Boromarajonnani College of 's Wife
Nursing, Phayao

Passing for Director Accreditation

Program (DAP) Training from Thai
Institute of Directors

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 Family Working Experience in the Past 5 Years

124
Shareholdi
Name-Surname / Age Relationshi
Educational Qualification ng in the Period of Institute / Company's
Citizen Identity No. (Years) p among Position Type of Business
Executives Company Time Name
Ms. Monsoothatip 38 - Bachelor of Science (Medical Younger 1.33% 2013 – Director Beauty Community Public Distribution of Skin Care and Cosmetics
Malaukcaranun Technology), Chiang Mai Sister of Present Company Limited Products
ANNUAL REPORT 2013

University Mrs.
Tanyapon 2012 – 2013 Executive Director and Beauty Community Public Distribution of Skin Care and Cosmetics
Passing for Director Accreditation Kraibhubes Director of Business Company Limited Products
BEAUTY COMMUNITY PUBLIC COMPANY LIMITED

Program (DAP) Training from Thai Development and

Institute of Directors Corporate
Communication
Department

2010 – 2011 Assistant Manager of Beauty Community Public Distribution of Skin Care and Cosmetics
Product Department Company Limited Products

2009 – 2010 Assistant Manager of Beauty Community Public Distribution of Skin Care and Cosmetics
Sales Operation Company Limited Products
Department
2005 – 2009 Head of Sales Beauty Community Public Distribution of Skin Care and Cosmetics
Operation Division Company Limited Products

Mr. Pratya Levan 45 - Bachelor of Engineering (B.E), - 1.33% 2012 – Director, Executive Beauty Community Public Distribution of Skin Care and Cosmetics
Mechanical Engineering, Present Director and Director of Company Limited Products
University of Maine Information Technology
- Master of Science (M.S.), Department
Mechanical Engineering, 2005 – 2011 Acting for Information Beauty Community Public Distribution of Skin Care and Cosmetics
University of Kansas Technology Department Company Limited Products
Manager

Passing for Director Accreditation

Program (DAP) Training from Thai
Institute of Directors
 Family Working Experience in the Past 5 Years
Shareholdi
Name-Surname / Age Relationshi
Educational Qualification ng in the Period of Institute / Company's
Citizen Identity No. (Years) p among Position Type of Business
Executives Company Time Name
Mr. Peerapong 52 - Bachelor of Science - - 2011 – Chairman of Audit Beauty Community Public Distribution of Skin Care and Cosmetics
Kittiveshpokawat Chiang Mai University Present Committee and Company Limited Products
- Master of Marketing Independent Director
Thammasat University and
Gothenberg University, Sweden
- Mini MBA in Franchise 2012 – 2013 Director International Licensing 1. To be consultant and develop patents,
Nova Southeastern University, Co., Ltd. franchise and retail businesses, branch
USA. shops and copyright license.
-MBA (Retail Management) 2. To be the agent of products and services
Striling University,UK and patents, the agent and distribution of
- Doctor of Management producer of printing businesses.
Sripatum University
2007 - Present Managing Director Business Coach Service provision as the consultant to advise
Consulting Co., Ltd. commercial work
Passing for Director Accreditation
Program (DAP) Training from Thai 1995 - Present Director B.T.C. Part Center Co., Distribution of Motorcycle Parts
Institute of Directors Ltd.
Col. Attapon Srisangwarn 47 - Bachelor of Law, - - 2011 – Audit Director and Beauty Community Public Distribution of Skin Care and Cosmetics
Ramkhamhaeng University Present Independent Director Company Limited Products

Passing for Director Accreditation 2011 - 2012 Staff Officer to Provost Marshal General's Government Sector
Program (DAP) Training from Thai Commander-in-Chief Department
Institute of Directors
2006 – 2011 Chief of Investigation Provost Marshal Government Sector
Division General's Department

Mr. Viboon Pojanalai 38 - Bachelor of Accounting, - - 2013 – Executive Director BPR Audit and Advisory Services for accounting audit, internal audit,
Thammasat University Present Co., Ltd. tax and accounting consultant
- Master of Science, Risk

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 Family

126
Shareholdi Working Experience in the Past 5 Years
Name-Surname / Age Relationshi
Educational Qualification ng in the Period of Institute / Company's
Citizen Identity No. (Years) p among Position Type of Business
Executives
Company Time Name
Management and Derivatives 2011 – Audit Director and Beauty Community Plc. Distribution of Skin Care and Cosmetics
Department Present Independent Director Products
ANNUAL REPORT 2013

Georgia State University

2004 - Present Senior Manager of AST Master Co., Ltd. Accounting audit service
Passing for Director Accreditation Accounting Audit
BEAUTY COMMUNITY PUBLIC COMPANY LIMITED

Program (DAP) Training from Thai 2008 - Present Department Asia Mineral Processing Manufacturing and Distribution of Feldspar
Institute of Directors Director Co., Ltd.
Mr. Surapon Phetklueng 49 - Bachelor of Accounting - 0.03% 2011 – Executive Director and Beauty Community Plc. Distribution of Skin Care and Cosmetics
Chiang Mai University Present Director of Accounting Products
- Master of Business and Finance
Administration, Kasetsart Department
University
2005 – 2011 Accounting and Thai-Scandic Steel Co., Manufacturing Galvanized Steel Structure
Finance Department Ltd. and Zinc Plating
Manager
Ms. Sirikan 48 -Bachelor, Faculty of - 0.01% 2011 – Executive Director and Beauty Community Plc. Distribution of Skin Care and Cosmetics
Puttiveranon Commerce and Accountancy Present Director of Sales Products
Chulalongkorn University Department

2010 – 2011 Sales Department Areeya Property Plc. Buying and Selling of Real Estate and
Manager Serving for Hire in House Construction

2009 – 2010 Operation Department KDN Co., Ltd. Trading of Breadstuff, Bakery Machine,
Manager (KrispyKreme Thailand) Bakery Mold including Materials used for
manufacturing and admixture for all types of
confections.

2004 - 2009 Franchise Operation Swensen (Thai) Co., Ltd. Distribution of Ice Cream and Beverage
Department Manager
 Family Working Experience in the Past 5 Years
Shareholdi
Name-Surname / Age Relationshi
Educational Qualification ng in the Period of Institute / Company's
Citizen Identity No. (Years) p among Position Type of Business
Executives
Company Time Name
Mr. Nattapong 39 - Bachelor of Science, Science - 0.06% 2012 – Executive Director and Beauty Community Plc. Distribution of Skin Care and Cosmetics
Khueanphan and Food Technology Program Present Director of Warehouse Products
Chiang Mai University and Office Department

2006 -2012 Warehouse and Beauty Community Plc. Distribution of Skin Care and Cosmetics
Transport Department Products
Manager, and Advisor
of Personnel and
Administration
Department
Mrs. Daranee Pathetang 34 - Bachelor, Faculty of - 0.003% 2012 – Company’s Secretary Beauty Community Plc. Distribution of Skin Care and Cosmetics
Economic Kasetsart University Present Products

2002 - Present Secretary of CEO Beauty Community Plc. Distribution of Skin Care and Cosmetics
Products

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APPENDIX 2
Position information of the directors, management members,
and controller of the company

Details of executive and controlling person’ s tenure of the company in related companies.
A= Chairman, B= Director, C= Executive Board, D= Executive
E= Advisor/Board of Advisors
X= Chairman of the Audit Committee, Y= Audit Committee, Z= Independent
Director
Ms. MONSOOTHATIP MALAUKCARANUN

Name
Dr. PEERAPONG KITIVESHPOKAWAT

Mr. NATTAPONG KHUEANPHAN

Ms. SIRIKRAN PUTTIVERANON
Col. ATTAPON SRISANGWARN
Mrs. TANYAPON KRAIBHUBES
Lt.Gen.PADET CHARUCHINDA

Mr. SURAPON PHETKLUENG

SUWIN KRAIBHUBES MD.

Mr.VIBOON POJANALAI
Mr. PRATYA LEVAN

Related Companies
BAUTY COMMUNITY PCL. A,Z B,C,D B,C,D B,C,D B,C,D X,Z Y,Z Y,Z C,D C,D C,D

INTERNATIONAL RETAIL AND B

FRANCHISE BESINESS R&D CENTER
BUSINESS COACH AND CONSULTING D
CO., LTD.
B.T.C.PARTS CENTER CO., LTD. B
ASIA MINIERAL PROCESSING CO., LTD. B
BRP AUDIT AND ADVISORY CO., LTD. C

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APPENDIX 3
Internal Controlling System Adequacy Assessment Form
Beauty Community Public Company Limited

Dated December 31, 2013

This assessment is commissioned by the Company committee.

The committee’s comment is about
The Sufficiency of Control Environment System

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Internal Control
1. The organization has manifested the adherence to integrity and ethics code
Questions Yes No
1.1 The committee and management have identified guidance and operation process based on
integrity and ethical adherence


1.1.1 Day-to-day work duties and all decision making that has been made


1.1.2 Corporate Responsibility to business partner, customer, and other people

1.2 Identifying provisions in writing for management and employees to strictly follow in regard to
integrity and adhering ethics


1.2.1 Identifying the proper code of conduct for management and employees)
1.2.2 Identifying the restrictions for management and employees to protect conflicts affected
business benefits. Moreover, corruptions causing damage to the organization is prohibited. 1
1.2.3 Identifying the appropriate punishment regarding the breach of the aforementioned 
restrictions.


1.2.4 Providing communication regarding the aforementioned provisions and punishment to clarify
the management and employees. For instance, employees must sign to acknowledge the aforesaid
terms of ethical conduct during new staff orientation. Moreover, the code of conduct must be publicized
to all employees and other people. 

1.3 Providing monitoring process and assessment for the practices in accordance with Code of


Conduct
1.3.1 Monitoring process and assessment are provided by the internal inspection unit or the
compliance unit. 

1.3.2 Self-assessment of the management and employees
1.3.3 Assessment is provided by an expert independent of the organization
1.4 Suddenly taking actions, if there is a breach of provisions in regard to integrity and ethical


adherence.
1.4.1 Providing monitoring process that can examine, if a breach is happened within the appropriate
time.

1.4.2 Providing proper process that can punish or manage, if a contravention is happened within
the appropriate time.
1.4.3 Being able to reform within the appropriate time, if an action against integrity and ethical
adherence is occurred. 

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2. The committee is independent of the management and has oversight and development of the
control environment
Question Yes No
2.1 Identifying the committee’s roles completely separated from the management. Moreover, the 
authority of the committee’s rights is explicitly reserved.
2.2 The Company committee oversees the indication of clear business goals which is able to be 
assessed. This can be guidance of work for either management or/and employees.
2.3 The Company committee oversees the indication of the committee and management’s roles in 
accordance with law and charters. Furthermore, the roles are expected to cover the key roles of the
inspection committee, auditor, and a person in charge of financial reports.
2.4 The Company committee possesses knowledge relating to Company’s business and expertise 
benefitting the Company. Moreover, the Company can get advice from the specialist in a specific area.
2.5 The Company committee consists of the independent committee who possesses knowledge, ability, 
reliability, and independence to wholly perform his/her duties. The committee, for example, has no
relationship to the Company, which influences the discretion and self-determining appropriately and
sufficiently.
2.6 The Company committee oversees the development and performance of the control environment 
including the control’s environment creation, risk assessment, control activity both data and
communication, and monitoring.

3. The management has determined the structure of reporting lines, authority to order, and proper
responsibility in order to achieve the organization goals with the conduct on oversight of the committee.
Question Yes No
3.1 The top management determines organization’s structure, which supports achievement of the Company’s goals, 
with the consideration of suitability of both business and law and efficient control environment, such as the
distribution of duties in the major tasks generating checks and balances between each other, internal inspection
unit directly reporting to the inspection committee, and obvious reporting lines.
3.2 The top management identifies the Company’s reporting lines with the consideration of the properness relating 
to authority, responsibilities, and data communication.

3.3 Identifying, assigning, and confining the authority and responsibilities suitably between Company’s committee, 
top management, management, and operating staff.

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4. The organization indicates the determination of motivation, development, and maintaining

competent staff
Question Yes No
4.1 The Company has policy and operation process to recruit, develop, and maintain competent staff 
properly. Moreover, the Company also focuses on the collation process of the aforementioned policy
and operation process regularly.
4.2 The Company has operation assessment process, generating motivation or awarding the highly 
capable staff, and managing staff whose performance doesn’t meet the aim of work. In addition, the
communication process presenting theses process to the management and staff.
4.3 The Company appropriately has problem solving process or preparation process for the short of 
capable staff within the right time.
4.4 The Company has processes of recruitment, development, and maintaining the management and all 
staff, such as mentoring and training.
4.5 The Company has succession plan, especially the essential position. 

5. The organization has determined the duties and responsibilities of staff in the control environment
process in order to achieve the organization goals.
Question Yes No
5.1 The Company committee and management expected staff to seriously take responsibilities for the 
control environment. Moreover, the staff must provide improvement of operation process if it is needed.
5.2 The Company committee and management has properly identified the operation process indicators, 
motivating, and awarding with the consideration of compliance with the Code of Conduct and both
short term and long term Company’s objectives.
5.3 The Company committee and management consistently have assessed motivation and awarding, 
which link with the success of duties in the operation process of control environment indeed.
5.4 The Company committee and management considerate no having too much pressure towards the 
employee in charge of operation process of control environment.

Risk Assessment

6. The organization has specified the objectives properly and adequately in order to identify and
assess risks relating to the organization’s goal achievement.
Question Yes No
6.1 The Company can perform according to the general standard accounting and properness with the 
type of business at that time. It is able to perfectly provide the actual financial report, correct rights or
proper value obligations, and showing complete and precise information.

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Question Yes No
6.2 The Company identifies the essentials of financial report with the consideration of the key functions, 
such as people using the financial reports, size of reports, and business trends.
6.3 The Company’s financial reports actually show the operation activities of the Company. 
6.4 The committee or risk management committee approves and communicates risk management 
policies to the management and all staff in order to understand and obey as they are a part of
organization culture.

7. The organization specifies and analyses all kinds of risks that may affect the goal achievement
through the organization

Question Yes No

7.1 The Company identifies all kinds of risks that may affect the business operation of entire 
organization, business unit, work unit, and other work duties.
7.2 The Company analysts all kinds of risks from both internal and external factors. These risks are 
caused by strategic risk, operational risk, reports, conducting compliant with rules and regulations, and
information technology.
7.3 All levels management must participate in risk management. 

7.4 The Company assesses the importance of risk with the consideration of opportunity of happening 
and the effects that may be happened.
7.5 The Company has measure and operation process on the purpose of elimination of risks including 
risk acceptance, risk reduction, risk avoidance, and risk sharing.

8. The organization has considered the possibility of frauds occurred during the assessment process

Question Yes No

8.1 The Company has assessed the possibility of all types of frauds, such as fraudulent financial reports, 
losses of property, corruptions, management’s override of internal controls, information change in an
important report, and invalid having or use of assets.
8.2 The Company carefully reviews work objectives by using the conditions of the possibility of the 
determined objectives, justification for awarding/prizing to the employee, which doesn’t encourage the
employee to conduct an inappropriate activity, such as no aim of inflated target persuading into
changing to fraudulent higher target number.
8.3 The inspection committee has considered and questioned the management regarding the possibility 
of frauds and fraud prevention measures.
8.4 The Company has communicated to all employees for understanding and following the Company’s 
policies and guidelines.

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9. The organization can identify and assess the change that may affecting the internal control system
(Control Environment)

Question Yes No

9.1 The Company evaluates the change of external factors, which may affect business operation, the 
internal control, and financial reports. Moreover, the Company provides the proper countermeasures.
9.2 The Company evaluates the change of business model, which may affect business operation, 
internal control, and financial report. In addition, the appropriate countermeasures are provided.
9.3 The Company evaluates the change of organization leader, which may affect business operation, 
internal control, and financial report, the appropriate countermeasures are provided.

Control Activities

10. The organization provides control measures for reducing risk s obstructing to achieve the
organization’s goals to become acceptable.

Question Yes No

10.1 The Company’s control measures are suitable with the risks and organization determinant, for 
example, environment, work complication, work characteristics, scope of work, and other determinants.
10.2 The Company provides internal control measures in writing, which hold all activities properly, for 
instance, policies and conducts regarding financial activity, purchasing, and general management.
Moreover, the measures states scope of duty and precise approval authority level of management for
the purpose of fraud prevention. For example, position level of management declares scope of
approval for amount, authority, project approval procedure, purchasing procedure, seller outsourcing
procedure, data recording for purchasing decision, or recording equipment pick up. The measures are
classified according to cases as the following


10.2.1 Information recording of major shareholders, committee, management, and relating people
including relatives or persons occurred in order to be able to monitor and collate all transactions
happened between each other, or transactions in conflict with benefit. Additionally, all information is
regularly updated.
10.2.2 In case of a long term approval of business traction or contract, such as trading contract,
loan contract, and warrantee contract, it is important that the Company can always keep monitoring
operation process in order to be in accordance with the conditions and terms stated in the agreement, 
for example, paying back the debt follow-up within the specified period of time, or reviewing the
appropriateness of contract.
10.3 The Company has divided the internal controls into the proper variety, such as manual control, 
automatic control, or prevention and monitoring control

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Question Yes No

10.4 The Company specifies that all business sections of the organization must have the internal control 
system, e.g., Company group, business unit, work line, work department, division, or process

10.5 The Company has completely separated three responsibilities apart from each other in order to
assess the others. The three responsibilities are
(1) Approval
(2) Data recording of accounting and information system and
(3) Property control

11. The organization chooses and develops the general control activities running under technology
systems in order to achieve organization goals.
Question Yes No
11.1 The Company indicates the relation between use of technologies in operation process and the 
general control via information system.
11.2 The Company should suitably indicate the control of basic information system structure. 

11.3 The Company should appropriately identify the control of information system security. 

11.4 The Company should properly specify the control of acquisition , development, and maintenance of 
the information system.

12. The organization organizes control activities according to policies stating expectation and
operation process for the purpose of the actual use of the specified policies.
Question Yes No
12.1 The Company possesses precise policies for monitoring a business transaction approved by major 
shareholder, committee, management, or relating people. It’s required to go through all approval
processes specified, such as Company’s regulations, and/or criteria of Stock Exchange of
Thailand/Company’s administrative office in order to prevent taking advantage or personnel use of
Company’s benefit.
12.2 The Company provides policies that a business transaction must be considered for approval by 
person(s) who has no benefit towards the business transaction
12.3 The Company provides policies that deliberation of a business transaction approval must importantly 
be focused on the utmost Company’s benefit and must be considered as outsider’s action (at arm’s
length’s basis)
12.4 The Company provides monitoring process for operation process of subsidiary or joint venture. The 
monitoring process includes indicating guidelines for the subsidiary/joint venture’s
committee/management appointed by the Company to conduct (this is not required, if there is no
investment in subsidiary/joint venture)
12.5 The Company indicates duties and responsibilities which is performed by the management and staff 
to meet in terms of compliance with Company’s policies and operation processes

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Question Yes No
12.6 The Company’s policies and operation process are used at the right time by capable staff. 
Moreover the aforementioned uses include error correction process happened in work process.
12.7 The Company usually reviews policies and operation process for appropriateness. 

Information & Communication

13. The organization provides related and qualified information in order to support the internal control
to run smoothly as it is expected.
Question Yes No
13.1 The Company specifies information wanted to be used in the operation process. The information can 
be internal and external and is qualified and related to the work.
13.2 The Company considers both cost and profit that Company can gain. Moreover, the consideration 
includes quantity and accuracy of data.
13.3 The Company operates to provide adequately essential data for the committee to for decision 
making. The samples of important data are detail of topic for consideration, Company’s effects, and other
choices.
13.4 The Company operates to provide the committee with meeting invitation letter and document 
relating to the meeting prior to the meeting time at lease the minimum period of time according to the
law. The document includes adequate and important information used for consideration.
13.5 The Company operates to provide committee’s meeting report with proper details in order to be 
able to trace back regarding appropriateness of each committee performance, such as recording of
committee’s questioning, committee’s opinions/observations occurring to consideration, and opinions of
the committee disagreeing about a topic proposed with reasons.
13.6 The Company operates as follows
13.6.1 Filing all essential documents in category. 
13.6.2 The Company always fixed all errors founded by the internal control process, when it is
informed by auditor of internal inspector. 

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14. The organization communicates data internally including objectives and responsibilities towards the
internal control on the purpose of running the operation smoothly as it’s expected.
Question Yes No
14.1 The Company has internal efficient data communication process and appropriate communication 
channel in order to support the internal control.
14.2 The Company constantly presents the committee with report containing essential information.
Furthermore, the Company committee is able to access source of information system that is important for


work operating and collation of reports as required. For example, the Company specifies a contact
person for whom the committee can ask more information besides the information received for the
management. Moreover, it is possible to be able to question information from auditor or internal
inspector. Apart from committee meeting, a meeting can be arranged for conferring between the
committee and management.
14.3 The Company provides special or confidential communication channel in order to be used for 
reporting corruptions happened in the Company with confidentiality and safety. (whistle-blower hotline)

15. The organization communicates with external agency regarding any issue that may affect the
internal control
Question Yes No
15.1 The Company possesses effective communication process to external stakeholder with appropriate 
ways, e.g., investor relation, or call center for the purpose of support the internal control of the Company.
15.2 The Company arranges special or confidential communication channels which can be used by 
external stakeholder to report corruptions to the Company with safety. (whistle-blower-hotline)

Monitoring Activities

16. The organization monitors and assess the internal control in order to be sure that the internal
control is running precisely and appropriately
Question Yes No
16.1 The Company provides monitoring process of business ethics conduct and restrictions that the 
management and staff must obey in order to prevent conflict relating to benefit. For example, each unit
must monitor ethical adherence and report to superior or report to internal inspection unit for following
up. Lastly, the report goes to the inspection committee.
16.2 The Company provides monitoring processes of acting in accordance with procedures that the 
internal control determines. The processes include self-assessment and/or independent assessment by
internal inspector.
16.3 Frequency of monitoring and assessment rely on the change of the Company. 
16.4 Monitoring process and assessment of the internal control is performed by expert(s) 

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Question Yes No
16.5 The Company identified guidelines of internal inspection process directly reported to the inspection 
committee.
16.6 The Company encourages internal inspector to perform in accordance with International Standard for 
the Professional Practice of Internal Auditing, IIA.

17. The organization assesses and communicates error of the internal control in time to person in
charge including the top management and committee as appropriate.
Question Yes No

17.1 The Company will assess and communicate error of the internal control and operate the correction
of all errors found immediately, if the operation result doesn’t’ meet the specified goal significantly.
17.2 The Company’s policies of reporting are as below


17.2.1 The management must report to the committee immediately, in the case of happening of an
event occurring or having possibility for a serious corruption, breach happened, or unusual action that
may harm the Company’s reputation or cause damage to the Company’s financial status significantly.
17.2.2 Reporting an important fault and the way for solving (although the fault is already fixed) to

the Company committee/inspection committee for consideration in the appropriate time.
17.2.3 Reporting progress of significant fault improvement to the Company’s committee/inspection


committee.

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APPENDIX 4
Beauty Community Public Company Limited
Statement of Financial Position as at 31 December 2013

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STATEMENTS OF FINANCIAL POSITION

AS AT DECEMBER 31, 2013

(Unit: Baht)

Assets Note December 31, 2013 December 31, 2012 January 1, 2012

(Restated) (Restated)

Current assets

Cash and cash equivalents 6 192,136,883.93 298,264,197.19 105,236,513.11

Temporary investments 7 500,000,000.00 460,000,000.00 -

Trade and other receivables 8, 19 25,844,476.05 11,763,267.71 6,997,606.45

Inventories 9 175,773,668.59 123,574,042.18 92,645,953.72

Total current assets 893,755,028.57 893,601,507.08 204,880,073.28

Non-current assets

Property, plant and equipment 10 157,013,575.08 122,111,200.12 94,643,138.90

Leasehold rights 11 11,100,410.71 12,035,852.20 13,261,480.60

Intangible assets 12 10,763,824.62 1,847,966.94 1,357,803.31

Deferred tax assets 5 ,13 409,123.99 360,983.15 1,095,882.89

Other non-current assets 14 65,015,928.68 48,928,634.13 38,890,672.65

Total non-current assets 244,302,863.08 185,284,636.54 149,248,978.35

Total assets 1,138,057,891.65 1,078,886,143.62 354,129,051.63

Notes to financial statements are parts of these financial statements.

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STATEMENTS OF FINANCIAL POSITION (CONTINUED)

AS AT DECEMBER 31, 2013

(Unit: Baht)

Liabilities and shareholders' equity Note December 31, 2013 December 31, 2012 January 1, 2012

(Restated) (Restated)

Current liabilities

Trade and other payables 15, 19 105,207,450.98 68,832,567.88 63,800,108.74

Current portion of financial lease liabilities 16 - 266,129.62 373,500.27

Current portion of long-term loans

from financial institutions 17 - 1,052,214.69 1,016,724.04

Accrued income tax 25,483,262.52 12,951,319.69 50,317,866.59

Total current liabilities 130,690,713.50 83,102,231.88 115,508,199.64

Non-current liabilities

Financial lease liabilities 16 - 558,505.27 815,089.86

Long-term loans from financial institutions 17 - 4,919,111.94 6,086,461.39

Loans from directors - - 954,073.32

Employee benefit obligations 18 1,599,437.00 1,281,551.00 987,304.00

Other non-current liabilities 2,546,550.00 2,212,754.30 1,616,400.00

Total non-current liabilities 4,145,987.00 8,971,922.51 10,459,328.57

Total liabilities 134,836,700.50 92,074,154.39 125,967,528.21

Shareholders' equity

Share capital

Authorized share capital

300,000,000 common shares of Baht 1 each 300,000,000.00 300,000,000.00

550,000 common shares of Baht 100 each 55,000,000.00

Issued and paid-up share capital

300,000,000 common shares of Baht 1 each 300,000,000.00 300,000,000.00

550,000 common shares of Baht 100 each 55,000,000.00

Premium on share capital 556,439,628.87 556,439,628.87 -

Retained earnings

Appropriated

Legal reserve 20 27,858,528.96 10,787,500.00 -

Unappropriated 118,923,033.32 119,584,860.36 173,161,523.42

Total shareholders' equity 1,003,221,191.15 986,811,989.23 228,161,523.42

Total liabilities and shareholders' equity 1,138,057,891.65 1,078,886,143.62 354,129,051.63

Notes to financial statements are parts of these financial statements.

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STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2013

(Unit: Baht)

2013 2012

(Restated)

Revenues from sales 976,246,542.32 769,887,779.59

Cost of sales (287,874,459.53) (221,161,961.08)

Gross profit 688,372,082.79 548,725,818.51

Other income

Interest income 21,565,359.95 4,178,036.85

Others 4,850,538.58 3,588,297.61
Total other income 26,415,898.53 7,766,334.46
Selling expenses (348,199,471.56) (255,071,421.39)
Administrative expenses (101,732,336.62) (82,450,901.06)
Finance costs (207,397.89) (456,496.46)
Profit before income tax 264,648,775.25 218,513,334.06
Income tax
13 (53,239,573.33) (45,552,497.12)
Profit for the year 211,409,201.92 172,960,836.94
Other comprehensive income - -

Total comprehensive income for the year 211,409,201.92 172,960,836.94

Basic earnings per share

Earnings per share 0.70 1.35

Number of weighted average common shares (share) 300,000,000 128,565,574

Notes to financial statements are parts of these financial statements.

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STATEMENTS OF CHANGES IN SHREHOLDERS' EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2013

(Unit: Baht)

Issued and Retained earnings

paid-up Premium on Appropriated Total

Note share capital share capital Legal reserve Unappropriated shareholders' equity

Balance as at December 31, 2011 (as previously reported) 55,000,000.00 - - 172,065,640.53 227,065,640.53

Cumulative effect of changes in accounting policy 5 - - - 1,095,882.89 1,095,882.89

Balance as at December 31, 2011 (after restated) 55,000,000.00 - - 173,161,523.42 228,161,523.42

Increase - ordinary shares 245,000,000.00 556,439,628.87 - - 801,439,628.87

Total comprehensive income for the year (restated) - - - 172,960,836.94 172,960,836.94

Legal reserve 20 - - 10,787,500.00 (10,787,500.00) -

Dividend paid - - - (215,750,000.00) (215,750,000.00)

Balance as at December 31, 2012 300,000,000.00 556,439,628.87 10,787,500.00 119,584,860.36 986,811,989.23

Balance as at December 31, 2012 (as previously reported) 300,000,000.00 556,439,628.87 10,787,500.00 119,223,877.21 986,451,006.08

Cumulative effect of changes in accounting policy 5 - - - 360,983.15 360,983.15

Balance as at December 31, 2012 (after restated) 300,000,000.00 556,439,628.87 10,787,500.00 119,584,860.36 986,811,989.23

Total comprehensive income for the year - - - 211,409,201.92 211,409,201.92

Legal reserve 20 - - 17,071,028.96 (17,071,028.96) -

Dividend paid 21 - - - (195,000,000.00) (195,000,000.00)

Balance as at December 31, 2013 300,000,000.00 556,439,628.87 27,858,528.96 118,923,033.32 1,003,221,191.15

Notes to financial statements are parts of these financial statements.

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STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2013

(Unit: Baht)

2013 2012

Cash flows from operating activities

Profit before income tax 264,648,775.25 218,513,334.06

Adjustment profit before income tax to cash receipt (disbursement)

from operating activities

Depreciation and amortization 32,160,800.03 22,667,566.17

Doubtful accounts 246,000.00 -

Loss (reversal) on devaluation of inventories (48,900.81) (3,489,463.27)

Gain on sales of assets (204,927.13) (104,998.00)

Loss on write off of assets 1,497,460.17 404,754.33

Employee benefit expenses 317,886.00 294,247.00

Interest expenses 207,397.89 456,496.46

Profit from operation before changes of

operating assets and liabilities 298,824,491.40 238,741,936.75

(Increase) Decrease in changes of operating assets

Trade and other receivables (14,327,208.34) (4,765,661.26)

Inventories (52,150,725.60) (27,438,625.19)

Other non-current assets (16,087,294.55) (10,037,961.48)

(Increase) Decrease in changes of operating assets (82,565,228.49) (42,242,247.93)

Increase (Decrease) in changes of operating liabilities

Trade and other payables 16,524,181.67 (8,386,440.57)

Other non-current liabilities 333,795.70 596,354.30

Increase (Decrease) in changes of operating liabilities 16,857,977.37 (7,790,086.27)

Cash generated (paid) from operation 233,117,240.28 188,709,602.55

Interest paid (207,397.89) (456,496.46)

Income tax paid (40,755,771.34) (82,184,144.28)

Net cash provided by (used in) operating activities 192,154,071.05 106,068,961.81

Notes to financial statements are parts of these financial statements.

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STATEMENTS OF CASH FLOWS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2013

(Unit: Baht)

2013 2012

Cash flows from investing activities

(Increase) Decrease in changes of

temporary investments (40,000,000.00) (460,000,000.00)

Building and equipment acquisition (47,916,425.78) (35,384,780.32)

Proceeds from sales of equipment 1,272,442.99 105,000.00

Leasehold rights acquisition (300,000.00) -

Intangible assets acquisition (9,541,440.00) (1,001,238.92)

Net cash provided by (used in) investing activities (96,485,422.79) (496,281,019.24)

Cash flows from financing activities

Payments for financial lease liabilities (824,634.89) (363,955.24)

Repayments for long-term loans from financial institutions (5,971,326.63) (1,131,858.80)

Decrease in loans from directors - (954,073.32)

Proceeds from share capital increase - 822,500,000.00

Payments for cost of sale share capital - (21,060,371.13)

Dividend paid (195,000,000.00) (215,750,000.00)

Net cash provided by (used in) financing activities (201,795,961.52) 583,239,741.51

Net increase (decrease) in cash and cash equivalents (106,127,313.26) 193,027,684.08

Cash and cash equivalents as at the beginning of year 298,264,197.19 105,236,513.11

Cash and cash equivalents as at the end of year 192,136,883.93 298,264,197.19

Notes to financial statements are parts of these financial statements.

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NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2013

1. GENERAL INFORMATION

Beauty Community Public Company Limited (“the Company”), the Company registered as a listed company

in The Stock Exchange of Thailand on December 12, 2012. The registered address is located at 10/915, Soi

Nuanchan 34, Nuanchan, Bungkum, Bangkok

The principle business of the Company is to retail of cosmetics.

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements have been prepared in conformity with the financial reporting standards, enunciated
under the Accounting Professions Act B.E. 2547 and presented in accordance with the notification of

Department of Business Development, the Ministry of Commerce dated September 28, 2011 regarding the
condensed form should be included in the financial statements B.E. 2554 and the regulation of the Securities
and Exchange Commission regarding the preparation and presentation of the financial reporting under the

Securities and Exchange Act B.E. 2535.

The financial statements have been prepared under the historical cost convention, except as transaction
disclosed in related accounting policy.

3. NEW ACCOUNTING STANDARDS ISSUANCE

3.1 Accounting standards adoption during the period

The Federation of Accounting Professions issued accounting standards, financial reporting standards,

standing interpretations and accounting guidance which is expected to be effective for the financial
statements beginning on or after January 1, 2013 as follows:

Contents

Accounting Standards
TAS 12 Income Taxes
TAS 20 (Revised 2009) Accounting for Government Grants and Disclosure of

Government Assistance
TAS 21 (Revised 2009) The Effects of Changes in Foreign Exchange Rate

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Contents
Financial Reporting Standards
TFRS 8 Operating Segments
Standing Interpretations
TSIC 10 Government Assistance-No Specific Relation to Operating
Activities
TSIC 21 Income Taxes-Recovery of Revalued
Non-depreciable Assets
TSIC 25 Income Taxes-Changes in the Tax Status of an Enterprises
or its Shareholders
Accounting Guidance Transfers of Financial Assets

Those accounting standards, financial reporting standards, standing interpretations and accounting
guidance will have no significantly impacts on these financial statements except for TAS 12 "Income
Taxes" and disclosed in notes 5 to financial statements

3.2 New accounting standards in issue not yet effective

The issued and revised financial reporting standards which are effective for the financial statements
beginning on or after January 1, 2014 onwards and have not been adopted for preparation of these
financial statements as follows:

Contents Effective date

Accounting Standard
TAS 1 (Revised 2012) Presentation of Financial Statements January 1, 2014
TAS 7 (Revised 2012) Statement of Cash Flows January 1, 2014
TAS 12 (Revised 2012) Income Taxes January 1, 2014
TAS 17 (Revised 2012) Leases January 1, 2014
TAS 18 (Revised 2012) Revenue January 1, 2014
TAS 19 (Revised 2012) Employee Benefits January 1, 2014
TAS 21 (Revised 2012) The Effects of Changes in Foreign Exchange Rate January 1, 2014
TAS 24 (Revised 2012) Related Party Disclosures January 1, 2014
TAS 28 (Revised 2012) Investments in Associates January 1, 2014
TAS 31 (Revised 2012) Interests in Joint Venture January 1, 2014
TAS 34 (Revised 2012) Interim Financial Reporting January 1, 2014
TAS 36 (Revised 2012) Impairment of Assets January 1, 2014
TAS 38 (Revised 2012) Intangible assets January 1, 2014

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-3-

Contents Effective date

Financial Reporting Standard

TFRS 2 (Revised 2012) Share - Based Payments January 1, 2014

TFRS 3 (Revised 2012) Business Combinations January 1, 2014

TFRS 4 Insurance Contracts January 1, 2016

TFRS 5 (Revised 2012) Non-current Asset Held for Sale and Discontinued January 1, 2014

Operations

TFRS 8 (Revised 2012) Operating Segments January 1, 2014

Standing Interpretations

TSIC 15 Operating Leases-Incentives January 1, 2014

TSIC 27 Evaluating the Substance of Transactions Involving January 1, 2014

the Legal Form of a Lease

TSIC 29 Service Concession Arrangements: Disclosures January 1,2014

TSIC 32 Intangible Assets-Web Site Costs January 1,2014

Financial Reporting Interpretations

TFRIC 1 Changes in Existing Decommissioning, Restoration and January 1,2014

Similar Liabilities

TFRIC 4 Determining whether an Arrangement contains a Lease January 1,2014

TFRIC 5 Rights to Interests arising from Decommissioning, January 1,2014

Restoration and Environmental Rehabilitation

Funds

TFRIC 7 Applying the Restatement Approach under TAS 29 January 1,2014

Financial Reporting in Hyperinflationary

Economies

TFRIC 10 Interim Financial Reporting and Impairment January 1,2014

TFRIC 12 Service Concession Arrangements January 1,2014

TFRIC 13 Customer Loyalty Programmes January 1,2014

TFRIC 17 Distributions of Non-cash Assets to Owners January 1,2014

TFRIC 18 Transfers of Assets from Customers January 1,2014

The management of the Company is being evaluated the effects of those standards on financial

statements in the year in which they are applied.

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

4.1 Revenues and Expenses recognition

Revenues from sales

Revenues from sales of goods are recognized as income whenever the goods, the significant risk and
rewards of ownership have been transferred to the buyer.

Other income and expenses

Other income and expenses are recognized on accrual basis.

4.2 Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, cash at banks, bills of exchange which are due
within not exceed three months and without withdrawal restrictions.

4.3 Temporary investments

Temporary investments consist of short-term deposit with financial institution due over three months

but not over 1 year and without withdrawal restrictions.

4.4 Trade and other receivables

Trade accounts and other receivable are stated at the net realizable value. Allowance for doubtful
accounts is provided for the estimated losses that may be incurred in collection of receivables. The
allowance is generally based on collection experiences and analysis of debtor aging.

4.5 Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined by the average
basis.

4.6 Property, plant and equipment

Land is stated at cost. Building and equipment are stated at cost less accumulated depreciation and
provision for impairment of assets (if any).

Depreciation of building and equipment is calculated by reference to its cost on the straight-line basis
over the following estimated useful lives: -

Number of years
Building and improvement 20, 5
Furniture 5
Office tools and equipment 5
Computer 3
Vehicles 5

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Land and construction in progress were not depreciated.

The Company includes the initial estimate of the cost of assets dismantling, removing the item and
restoring the site on which it is located, the oblgation for which the Company incurs as parts of cost of
property, plant and equipment, the depreciation charge has to be determined separately for each
significant part of property, plant and equipment with the cost that is significant in relation to the total
cost of assets item. In addition, the entity is required to review the useful lives, residual value and
depreciation method at least at each financial year-end.

4.7 Intangible assets

Intangible assets are computer software which is stated at cost less accumulated amortization and
provision for impairment of assets (if any).

Amortization is determined by reference to the cost of assets on a straight-line basis over the
estimated useful lives for approximate 5 years.

4.8 Leasehold rights

Leasehold rights are stated at cost less accumulated amortization. Amortization is calculated by
reference to cost of leasehold right on a straight-line basis over the lease periods for 10 years.

4.9 Impairment of assets

The Company has assessed the impairment of assets whenever events or changes indicate that the
carrying amount of assets exceeds its recoverable value. The impairment loss will be recognized in
statements of comprehensive income. The Company will reverse the impairment loss whenever there
is no longer impairment or reduction in impairment.

Recoverable value of asset is the net selling price of the asset under current operations or its
utilization values whichever is higher. The impairment will be asseesed for each asset item or each
asset unit generating cash flow, whichever is practical.

4.10 Related parties

Enterprise and individuals that directly, or indirectly through one or more intermediaries, control or
are controlled by, or are under common control with, the company, including holding companies,
subsidiaries and fellow subsidiaries are related parties of the Company. Associates and individuals
owning, directly or indirectly, an interest in the voting power of the Company that gives them
significant influence over the enterprise, key management personnel, including directors and officers
of the Company which has a power in planning and operating control.

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4.11 Long-term lease

Operating Lease

Lease in which substantially all the risks and rewards of ownership of assets remain with the lessor is
accounted for as operating lease. Rentals applicable to such operating leases are charged to the
statement of comprehensive income over the lease term.

Finance leases

Lease in which substantially all the risks and rewards of ownership other than legal title are
transferred to the Company is accounted for as a financial lease. The Company capitalized the
equipment at the lower of estimated present value of the underlying lease payments or at the fair value
of the equipment at the contractual date. The lease obligation reduced with financial costs will be
recorded as long-term liability. Interest is recognized as expenses in the statements of comprehensive
income over the period of the lease. The depreciation policy for assets acquired under financial lease
agreement is determined on the useful lives or over the period of the lease whichever is lower.

4.12 Transactions in foreign currencies

The Company records the transactions in foreign currencies converting into Thai Baht by using the
exchange rates ruling on the transaction dates. The outstanding balances of accounts in foreign
currencies as at the statements of financial position date are converted into Thai Baht by using the
exchange rates ruling on the same day.

Gain or loss on exchange is taken into income or expense as incurred.

4.13 Employee benefits and provident fund

4.13.1. Employee benefits

The Company provide for post employment benefits, payable to employees under the Thai
Labor Law. The present value of employee benefit liabilities recognized in the statements of
financial position is estimated on an actuarial basis using Projected Unit Credit Method. The
calculation was made by utilizing various assumptions about future events. The Company is
responsible for the selection of appropriate assumptions. The assumptions used in
determining the net period cost for employee benefits include the discount rate, the rate of
salary increment, and employee turnover. Any changes in these assumptions will impact the
net periodic cost recorded for employee benefits. On an annual basis, the Company
determines the appropriate discount rate, which represents the interest rate that should be
used to determine the present value of future cash flows currently expected to be required to
settle the employee benefits. In determining the appropriate discount rate, the Company and
consider the market yield based on Thai government bonds with currency and term similar to
the estimated term of benefit obligation.

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The principal actuarial assumptions used were as follows;

Discount rate At 4.31 % per annum for monthly staff

At 4.57% per annum for daily staff
Employee turnover rate Separate by age of monthly and daily staff

Mortality rate At 50% of TMO 2008 for monthly staff

At 100 % of TMO 2008 for daily staff

4.13.2 Provident fund

The Company establish provident fund under the defined contribution plan. The fund’s assets
are separated entitles which are administered by the external fund manager. The Company
employees made contribution into such provident fund. The Company’s contribution
payments to the provident fund were recorded as expenses in the statements of
comprehensive income in the incurred period.

4.14 Income tax

Income tax expense for the period comprises current and deferred tax. Current and deferred tax is

recognized in profit or loss except to the extent that they relate to items recognized directly in equity

or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using

tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in

respect of previous period.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets

and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred

tax is not recognized that it is probable that they will not utilize in the foreseeable future.

Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences

when they adjust, using tax rates enacted or substantively enacted at the reporting date.

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In determining the amount of current and deferred tax, the Company takes into account the impact of
uncertain tax positions and whether additional taxes and interest may be due. The Company believes
that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many
factors, including interpretations of tax law and prior experience. This assessment relies on estimates
and assumptions and may involve a series of judgements about future events. New information may
become available that causes the Company to change its judgement regarding the adequacy of
existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a
determination is made.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes levied by the same tax authority on the same
taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a
net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be
available against which the temporary differences can be utilized. Deferred tax assets are reviewed
at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit
will be realized.

4.15 Financial instruments

Financial assets shown in statements of financial position consist of cash and cash equivalents and
temporary investments and trade accounts receivable. Financial liabilities shown in statements of
financial position consist of short-term loans from financial institutions, trade accounts payable,
financial lease liabilities and long-term loans. Accounting policies regarding to recognition and
measurement have been disclosed for each related transaction.

4.16 Accounting estimates

Preparation of financial statements in conformity with financial reporting standards requires

management to make estimates and assumptions in certain circumstances, affecting amounts reported
in these financial statements and related notes. Actual results could differ from these estimates.

The Company makes estimates and assumptions concerning the future factors. The results of
accounting estimates may be differed from the related actual results. The estimates and assumptions
that may have a risk of causing an adjustment to the assets in the next financial year related to
allowance for doubtful accounts, and provision for impairment of assets at the statements of financial
position date. Other estimates are further described in the corresponding disclosures.

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4.17 Provisions
The Company recognizes a provision when an entity has a present legal or constructive obligation as
a result of a past event. It is probable that an outflow of economic benefits resources will be required
to settle the obligation and reliable estimate can be made of the amount of the obligation. If some or
all the expenditure is required to settle a provision, it is expected to be reimbursed when it is virtually
certain that reimbursement will be received if the Company settles the obligation. The amount
recognized should not exceed the amount of the provision.

4.18 Basic earnings per share

Earnings (Loss) per share as presented in the statements of comprehensive income is the basic
earnings (loss) per share which is determined by dividing the profit for the year by the number of
weighted average common shares issued and paid-up during the periods.

5. CUMULATIVE EFFECTS OF CHANGES IN ACCOUNTING POLICY FROM NEW ACCOUNTING

STANDARDS ADOPTION

Since January 1, 2013, the Company has changed the significant accounting policy as stated in notes 3.1 to financial
statements caused by the Company adopted TAS 12 “Income Taxes”. The Company has recorded deferred tax on
temporary differences of carrying value of assets and liabilities at the end of the reporting period with tax bases of
those assets and liabilities using the tax rates enacted or substantively enacted. The Company recorded deferred
tax as an adjustment to the beginning retained earnings of 2013 and made retroactively adjustment the 2012
financial statements by using cumulative effects of such changes in accounting policy.

The amounts of adjustments reflected to the statements of financial position and the statements of
comprehensive income are summarized below.

(Unit: Baht)
Statement of financial position
As at January 1, 2012

Before After
adjustment Adjustment adjustment

Deferred tax assets - 1,095,882.89 1,095,882.89

Unappropriated retained earnings 172,065,640.53 1,095,882.89 173,161,523.42

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(Unit: Baht)
Statement of financial position
As at December 31, 2012
Before After
adjustment Adjustment adjustment
Deferred tax assets - 360,983.15 360,983.15
Unappropriated retained earnings 119,223,877.21 360,983.15 119,584,860.36

Statement of comprehensive income

for the year ended December 31, 2012
Before After
adjustment Adjustment adjustment
Income tax 44,817,597.38 734,899.74 45,552,497.12
Profit for the year 173,695,736.68 (734,899.74) 172,960,836.94
Earning per share (after convertible share) 1.35 - 1.35

6. CASH AND CASH EQUIVALENTS

Cash and cash equivalents as at December 31, 2013 and 2012 are as follows:

(Unit: Baht)
2013 2012
Cash 4,363,421.12 3,044,785.80
Current accounts 26,650,332.09 17,907,422.33
Savings deposit 160,398,144.22 146,561,520.81
Fixed deposits - 100,000,000.00
Bills of exchange - 30,000,000.00
Unbilled for credit card slip 724,986.50 750,468.25

Total 192,136,883.93 298,264,197.19

7. TEMPORARY INVESTMENTS

The Company has temporary investment in form of short-term deposits at various local financial institutions
as at December 31, 2013 and 2012 are as follows:
(Unit: Baht)
At interest rate per annum

2013 2012 2013 2012

Fixed deposits 3.00 -3.38 3.10 - 3.25 500,000,000.00 460,000,000.00

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8. TRADE AND OTHER RECEIVABLES

Trade and other receivable as at December 31, 2013 and 2012 are as follows:

(Unit: Baht)
2013 2012

Trade accounts receivable

Related parties 655,887.38 351,673.50
Other parties
- Franchise receivable 4,069,462.66 2,132,655.71

- Employees receivable 124,226.70 141,491.34

- Other parties receivable 5,192,357.73 543,028.91

Total other parties receivable 9,386,047.09 2,817,175.96

Total trade accounts receivable 10,041,934.47 3,168,849.46

(Unit: Baht)
2013 2012

Other receivables
Prepaid expenses 1,992,277.84 1,472,660.07
Accrued income 8,110,476.71 3,940,056.73
Goods deposit 1,607,384.51 1,234,317.90
Advance payment 697,027.00 253,176.00

Others 3,395,375.52 1,694,207.55

Total other receivables 15,802,541.58 8,594,418.25

Total trade and other receivables 25,844,476.05 11,763,267.71

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As at December 31, 2013 and 2012 the Company has outstanding trade accounts receivable classified by
aging as follows:

(Unit: Baht)

2013 2012

Trade accounts receivable due in term 7,402,909.72 2,970,687.40

Overdue trade accounts receivable

- Less than 3 months 2,234,463.12 186,415.72

- Over 3 months but less than 1 year 404,561.63 11,746.34

Total trade accoutns receivable 10,041,934.47 3,168,849.46

9. INVENTORIES

Inventories as at December 31, 2013 and 2012 are as follows:

(Unit: Baht)

2013 2012

Finished goods 127,874,992.12 83,236,928.12

Packaging 35,921,070.91 31,629,635.99

Work in process 10,086,318.77 7,573,321.24

Supplies 2,130,326.92 1,422,097.77

Total 176,012,708.72 123,861,983.12

Allowance for devaluation of inventories (239,040.13) (287,940.94)

Net 175,773,668.59 123,574,042.18

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158
10. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment as at December 31, 2013 and 2012 consist of:

(Unit: Baht)
ANNUAL REPORT 2013

Building and Office tools and Construction in

Land improvement Furniture equipment Computer Vehicles progress Total

Cost:
BEAUTY COMMUNITY PUBLIC COMPANY LIMITED

As at December 31, 2011 19,240,000.00 28,801,913.79 63,983,467.26 10,541,742.93 6,415,901.39 4,626,369.16 - 133,609,394.53
Acquistion - 1,246,438.03 33,482,945.75 3,848,543.89 2,961,164.02 5,546,728.98 624,000.00 47,709,820.67
Disposal - - - - - (425,000.00) - (425,000.00)

Write off/adjustment - 42,200.00 (3,175,510.63) 1,060,477.16 (212,437.42) 3,900.00 - (2,281,370.89)

As at December 31, 2012 19,240,000.00 30,090,551.82 94,290,902.38 15,450,763.98 9,164,627.99 9,751,998.14 624,000.00 178,612,844.31

Acquistion - 9,000.00 49,932,410.30 3,558,192.35 5,871,823.63 5,925,700.93 2,470,000.00 67,767,127.21

Disposal - - (83,000.00) - - (2,532,000.00) - (2,615,000.00)
Write off/adjustment - - (2,111,891.77) (288,054.57) (301,179.83) - (624,000.00) (3,325,126.17)

As at December 31, 2013 19,240,000.00 30,099,551.82 142,028,420.91 18,720,901.76 14,735,271.79 13,145,699.07 2,470,000.00 240,439,845.35

Depreciation:

As at December 31, 2011 - (6,262,820.54) (21,684,812.84) (4,693,200.16) (3,850,481.41) (2,474,940.68) - (38,966,255.63)

Depreciation - (1,575,130.62) (14,237,403.70) (2,171,623.43) (1,875,638.69) (1,071,066.04) - (20,930,862.48)
Disposal - - - - - 424,998.00 - 424,998.00

Write off/adjustment - (10,592.60) 2,483,566.79 295,905.17 201,711.93 (115.37) - 2,970,475.92

As at December 31, 2012 - (7,848,543.76) (33,438,649.75) (6,568,918.42) (5,524,408.17) (3,121,124.09) - (56,501,644.19)

Depreciation - (1,699,090.02) (21,555,644.23) (2,859,866.22) (2,421,077.99) (1,764,097.76) - (30,299,776.22)

Disposal - - 16,104.04 - - 1,531,380.10 - 1,547,484.14

Write off/adjustment - - 1,318,328.88 229,284.09 280,053.03 - - 1,827,666.00

As at December 31, 2013 - (9,547,633.78) (53,659,861.06) (9,199,500.55) (7,665,433.13) (3,353,841.75) - (83,426,270.27)

Net book value:

As at December 31, 2012 19,240,000.00 22,242,008.06 60,852,252.63 8,881,845.56 3,640,219.82 6,630,874.05 624,000.00 122,111,200.12

As at December 31, 2013 19,240,000.00 20,551,918.04 88,368,559.85 9,521,401.21 7,069,838.66 9,791,857.32 2,470,000.00 157,013,575.08
 ANNUAL REPORT 2013
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Depreciation for the year ended December 31, 2013 and 2012 amounted to Baht 30.30 million and Baht 20.93
million respectively.

As at December 31, 2013 and 2012, the Company has fixed assets at cost amount of Baht 17.41 million and Baht
10.67 million respectively which have been fully depreciated but are still in use.

As at December 31, 2012, the Company has vehicles under financial lease at carrying value amount of Baht 1.17
million.

11. LEASEHOLD RIGHTS

(Unit: Baht)

2013 2012

Cost:

Beginning balance as at January 1 20,408,980.80 20,408,980.80

Increase 300,000.00 -

At the end as at December 31 20,708,980.80 20,408,980.80

Accumulated amortization:

Beginning balance as at January 1 8,373,128.60 7,147,500.20

Amortization 1,235,441.49 1,225,628.40

At the end as at December 31 9,608,570.09 8,373,128.60

Net book value 11,100,410.71 12,035,852.20

Amortization of leasehold right for the year ended Dectember 31, 2013 and 2012 amounted to Baht 1.24

million and Baht 1.23 million respectively.

The Company used leasehold right at carrying as at December 31, 2013 amount of Baht 12.04 million as

guarantee against long-term loans from financial institution as stated in note 17.

In the second quarter of 2013, the Company has made the payment of loans in full and redeemed such

collateral.

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12. INTANGIBLE ASSETS

(Unit: Baht)
2013 2012
Computer software
Cost:
Beginning balance as at January 1 3,138,394.44 2,137,155.52
Acquisition 510,000.00 1,001,238.92
At the end as at December 31 3,648,394.44 3,138,394.44
Accumulated amortization:
Beginning balance as at January 1 1,290,427.50 779,352.21
Amortization 625,582.32 511,075.29
At the end as at December 31 1,916,009.82 1,290,427.50
Net book value 1,732,384.62 1,847,966.94
Software under installation 9,031,440.00 -
Total 10,763,824.62 1,847,966.94

Amortization of intangible assets for year ended December 31, 2013 and 2012 amounted to Baht 0.63
million and Baht 0.51 million respectively.

13. DEFERRED TAX/ INCOME TAX EXPENSES

(Unit :Baht)
2013 2012
Deferred tax assets
Allowance for devaluation of inventories 47,808.03 66,226.42
Employee benefit obligations 319,887.40 294,756.73
Provisions 41,428.56 -
Total 409,123.99 360,983.15

Movements of deferred tax assets and liabilities incurred during the year as follows:
(Expense) (Expense)
As at income in As at income in As at
January statement of December statement of December
1, 2012 income 31, 2012 income 31, 2013

Deferred tax assets

Allowance for devaluation of good 868,802.97 (802,576.55) 66,226.42 (18,418.39) 47,808.03
Employee benefit obligations 227,079.92 67,676.81 294,756.73 25,130.67 319,887.40

Provisions - - - 41,428.56 41,428.56

Total 1,095,882.89 (734,899.74) 360,983.15 48,140.84 409,123.99

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Income tax expenses for the year ended December 31, 2013 and 2012 can be summarized as follows:
(Unit :Baht)
2013 2012
Current tax:
Income tax for the year 53,287,714.17 44,817,597.38
Deferred tax
Deferred tax resulted from temporary differences and
reversal of temporary differences (48,140.84) 734,899.74

Income tax expenses presented in statements of 53,239,573.33 45,552,497.12

comprehensivc income

Reconciliation amount between income tax expenses and multiplication of taxable profits and tax rates
used for the year ended December 31, 2013 and 2012 can be presented as follows:

(Unit :Baht)
2013 2012
Accounting profit before income tax 264,648,775.25 218,513,334.06
Income tax rates 20% 23%
Accounting profit before income tax multiply by tax rates 52,929,755.05 50,258,066.83

Taxable effects for :

Accounting base differ from tax base - (5,678,794.32)
Taxable expenses, increase (104,804.78) (32,200.00)
Prohibited expenses 414,623.06 1,005,424.61

Total 309,818.28 (4,705,569.71)

Income tax expenses presented in statements of

comprehensive income 53,239,573.33 45,552,497.12

Effective income tax rate 20.12% 20.85%

14. OTHER NON-CURRENT ASSETS

Other non-current assets as at December 31, 2013 and 2012 consist of:

(Unit: Baht)
2013 2012
Rental and services deposit 63,391,342.54 47,911,662.17
Others 1,624,586.14 1,016,971.96
Total 65,015,928.68 48,928,634.13

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15. TRADE AND OTHER PAYABLES

Trade and other payables as at December 31, 2013 and 2012 consist of:

(Unit: Baht)
2013 2012
Trade accounts payable

-Related parties 922,500.00 980,000.00

-Other parties 52,149,823.96 36,125,258.92

Total trade accounts payable 53,072,323.96 37,105,258.92

Other payables

Accrued expenses 24,003,743.46 14,924,903.52

Revenue Department payable 6,337,129.71 4,254,544.91

Assets payables 21,209,879.16 12,535,040.35

Others 584,374.69 12,820.18

Total other payables 52,135,127.02 31,727,308.96

Total trade and other payables 105,207,450.98 68,832,567.88

16. FINANCIAL LEASE LIABILITIES

Long-term financial lease liabilities will be due under financial lease as follows:

(Unit: Baht)

2013 2012

Within 1 year - 297,527.96

Over 1 year but less than 5 years - 558,505.27

Total - 856,033.23

Less: Deferred interest - (31,398.34)

Present value of the minimum amount to be paid under

financial lease - 824,634.89
Less: Current portion of liabilities - (266,129.62)

Net - 558,505.27

In the second quarter of 2013, the Company has made payment for the remaining financial lease liabilities
before maturity.

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17. LONG-TERM LOANS FROM FINANCIAL INSTITUTION

(Unit: Baht)
2013 2012

Long-term loans from bank - 5,971,326.63

Less: Current portion of loans - (1,052,214.69)

Net - 4,919,111.94

On July 31, 2009, the Company has obtained loans in Thai Baht currency from local bank for credit amount
of Baht 9.46 million (withdrawn in full) in order to settle leasehold right and related other expenses. These
loans are charged interest rate at the rate of MLR-1.5% for the first three year and MLR-1% thereafter. The

principal and interest is repayable on a monthly basis not less than Baht 0.13 million each, commenced in
October 2009 and the loans repayment should be completed in September 2017.

Such loans are guaranteed by assigning leasehold right agreement as stated in note 11 including the benefit
from insurance policy of those assets to the lender and the Company’s director guarantee.

In the second quarter of 2013, the Company has made payment such loans before maturity and already
redeemed the leasehold right collateral.

18. EMPLOYEE BENEFIT OBLIGATIONS

Long-term employee benefit obligations are compensation paid to employees when they retired as at

December 31, 2013 and 2012 are as follows:

(Unit: Baht)

2013 2012

Employee benefit obligations as at January 1 1,281,551.00 987,304.00

Current costs of services and interest 317,886.00 294,247.00

Benefits paid during the period - -

Employee benefit obligations as at December 31 1,599,437.00 1,281,551.00

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19. TRANSACTION WITH RELATED PERSONS AND PARTIES

The Company had transaction with related persons and parties. These transactions are related in the normal

course of business and on the basis of the Company and related persons or parties concerned

Relationship of the Company and related persons and parties can be summarized as follows:

Related persons and persons name Relationship Related transactions

1. Persons consist of:-

Mr.Suwin Kraibhubes Shareholder and director Loans form director

Mrs. Tanyapon Kraibhubes Shareholder and director Loans form director,

guarantee liabilities

without remuneration

Mr. Pratya Levan Shareholder and director (since 20 Sale of goods (franchise),

April 2012) purchase of goods

Mr. Wasan Khocharoen Director’s relative and authorized Sale of goods

person from directors of Thanaphumi

Body of persons

2. Body of persons consist of:-

Thanaphumi Body of persons Director’s relative, shareholder and Land rental, land with its

director construction rental

(by Mr. Wasan Khocharoen and Mrs.

Tanyapon Kraibhubes )
C&N International Ordinary Shareholder and director , and Sale of goods (franchise)
Partnership director’s relative
( by Mr. Pratya Levan)
Bevita International Co., Ltd. Director’s relative
(Mrs. Rukchanok Chiangtong is near Purchase of goods
relative of Mr. Pratya Levan)
V&P Ordinary Partnership Director’s relative Sale of goods (franchise)
(by Mr. Wasan Khocharoen )
S&V Ordinary Partnership Director’s relative Sale of goods (franchise)
(by Mr. Wasan Khocharoen)

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(Note: from 1 October 2012, Mr. Wasan Khocharoen is not related person of the Company since there is no
any land lease transactions with Thanaphumi Body of persons.)

Related transactions Pricing policy

Revenues from sales (franchise) Market price as applicable to other franchises

Other income As indicated in agreement

Purchase of goods Market price as applicable to major customers

Land rental As indicated in agreement

Land with its construction rental As indicated in agreement equal to appraisal value of

independent appraiser

19.1 Transactions between the Company with related persons and parties can be summarized as follow:

(Unit: Baht)

For the years ended December 31,

2013 2012

Revenues from sales

C&N International Ordinary Partnership 3,362,719.12 3,755,926.07

V&P Ordinary Partnership - 2,767,838.21

Mr. Wasan Khocharoen - 276,072.58

Other income

C&N International Ordinary Partnership 4,830.00 8,970.00

V&P Ordinary Partnership - 438,098.37

S&V Ordinary Partnership - 18,691.59

Mr. Wasan Khocharoen - 4,379.26

Purchase of goods

Bevita International Co., Ltd. 5,404,205.62 5,259,346.00

Land with its construction rental

Thanaphumi Body of persons - 348,000.00

(since 1 October 2012, rented from Mrs. Tanyapon Kraibhubes )

Mrs. Tanyapon Kraibhubes 348,000.00 -

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19.2 The balance with its related persons and parties as at 31 December 2013 and 2012 are as follow:
(Unit: Baht)
2013 2012
Trade accounts receivable
C&N International Ordinary Partnership 655,887.38 351,673.50
Trade accounts payable
Bevita International Co., Ltd. 922,500.00 980,000.00
19.3 Guarantees

As at December 31 2013, Mrs. Tanyapon Kraibhubes, the Compnay’s director got into guarantee
without remuneration as follow:-
Guarantee financial lease liabilities (note 16)
Guarantee loans under long-term loans agreement (note 17)
As at December 31, 2013, the above mentioned guarantee is ended since the payment for liabilities
is made in full.

19.4 Land lease agreement obligations

The Company has commitment under land lease agreement for warehouse construction in
accordance with agreement dated June 11, 2013 for the period of 20 years. The rental is determined
equal to the value of the independent appraiser commenced from January 1, 2014. As at December
31, 2013, the Company is liable on payment the remaining rental as follows:

(Unit:Baht)
Payment within
1 year 874,800.00
Over 1 year not exceed 5 years 3,499,200.00
Over 5 years 17,467,020.00
Total 21,841,020.00
20. LEGAL RESERVE

By virtue of the Public Companies Act B.E. 2535, the Company is required to set aside a legal reserve at
least 5% of annual net profit after deduction with deficit brought forwards (if any) until the reserve reaches
an amount of 10% of the authorized share capital. Such legal reserve is not available for dividend
distribution

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21. DIVIDEND PAID

According to the minutes of sharehoders’ general meeting for the year 2013 held on April 25, 2013, passed

the resolution to pay dividend from the 2012 results of operation for the increment from interim dividend

payment to the shareholders for 300 million shares at Baht 0.35 each, totaling Baht 105.00 million. The

dividend payment was made on May 22, 2013.

Accordance to the minutes of the Board of directors’ meeting No 4/2013 held on August 13, 2013, passed the

resolution to pay interim dividend from the results of operation for the six-month periods ended June 30,

2013 to the shareholders whose the name listed in the shareholders register as at August 28, 2013 for 300

million shares at Baht 0.30 each, amounting to Baht 90 million. The dividend payment was made on

September 12, 2013.

The Company has paid the above mentioned dividend total amount of Baht 195.00 million.

22. DIRECTORS’ REMUNERATION AND MANAGEMENT BENEFIT EXPENSES

22.1 Directors’ remuneration

Directors’ remuneration is benefit paid to the Company’s directors in accordance with the Section

90 of the Public Company Limited Act B.E. 2535 excluded salaries and related benefits to be paid to

executive directors.

22.2 Management benefit expenses

Management benefit expenses focus salaries, remunerations and other benefits paid to their directors

and management, in accordance with the definitions of the Office of the Securities and Exchange

Commission. Management under definition includes a chief executive officer, the next four

executive levels immediately below that chief executive officer and all persons in positions

comparable to these fourth executive levels and includes the accounting and financial executive

officer, the manager level above or persons in position comparable.

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23. PROVIDENT FUND

The Company and employees have jointed to be a member of provident fund name “THE SIN SATA

PORN REGISTERED PROVIDENT FUND” in accordance with the Provident Fund Act B.E. 2530. The
Company and employees have to contribute to the fund at the same rate 3-5% of employees’ salaries. The
provident fund is managed by BBL Asset Management Co., Ltd. The employees will entitle the
accumulation and benefit when they retired according to the provident fund regulation.

The Company has paid the contributation to the fund for the year 2013 amount of Baht 1.99 million.

24. EXPENSE ANALYZED BY NATURE

The significant expenses analyzed by nature for the year ended December 31, 2013 and 2012 are as follow:

(Unit:Baht)
2013 2012
Changes in finished goods
and work in progress (47,151,061.53) (32,820,447.10)
Purchase of goods 338,701,379.85 252,119,487.01

Employee benefit expenses 162,569,283.92 116,743,452.97

Management benefit expenses 20,288,657.21 15,773,511.38
Directors’ remuneration 1,071,948.19 1,013,827.00
Depreciation and amortization 32,160,800.03 22,667,566.17
Rental and services 146,536,828.63 107,645,713.00
Advertising and sale promotion expenses 14,629,008.01 17,507,632.37

Reversal of loss on devaluation of

inventories (48,900.81) (3,489,463.27)

25. FINANCIAL INFORMATION BY SEGMENT

Opereting segment information is reported corresponding with the internal reports of the Company that are
regularly reviewed by the chief operating decision maker in order to make decision about the allocation of
resources to the segment and assess its performance.

The Company's operations involve virtually a single in retail of cosmetics business in the geographical
segment in Thailand and chanel of distribution for selling goods to franchise and business centre. Besides,
the Company has overseas income, and selling to franchise and business centre lower than 10 % of total
sale amount so the Company did not present financial information by segent.

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26. COMMITMENT AND CONTINGENT LIABIILTIES

26.1 The Company has obligations under lease of space and services agreements of the Company’s
branches for the periods from 1 year to 3 years. The Company is liable on payment rental and
service under agreement as at December 31, 2013 as follows:

(Unit:Baht)
Payment within
1 year 149,360,294.62
Over 1 year but less than 3 years 126,259,008.27
Total 275,619,302.89

26.2 The Company is liable on payment building construction plan agreement as at December 31, 2013
amount of Baht 0.13 million.

26.3 The Company is liable on payment for computer software installation as at December 31, 2013
amount of Baht 6.51 million.

26.4 The Company is liable on payment for commitment under lease of car as at December 31, 2013
amount of Baht 4.39 million.

27. DISCLOSURE AND PRESENTATION OF FINANCIAL INSTRUMENTS

For off-statement of financial position, the Company has no policy to hold derivative financial instruments
for speculation and trading.

27.1 Management risk policy

The significant financial instruments of the Company under the definition of TAS 32 “Financial
Instruments: Disclosure and Presentation” principally comprise cash and cash equivalents, trade
accounts receivable and payable, financial lease liabilities and long-term loans. The Company has a
risk in respect of such financial instruments and has management risk policy as follow:

Credit risk

The Company is exposed to credit risk primarily with respect to trade and other receivables. The
Company manages the risk by adopting appropriate credit control policies and procedures and therefore
do not expect to incur material financial losses. In addition, the Company do not have high
concentrations of credit risk since it has a little of customer base since its policy is in the form of cash
selling. The maximum exposure to credit risk is limited to the carrying amounts of receivables and loans
as stated in the statement of financial position.

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Interest rate risk

The Company’s exposure to interest rate risk relates primarily to their cash at financial institutions,

bank overdrafts, loans, and short-term and long-term borrowings. However, since most of the

Company’s financial assets and liabilities bear floating interest rates or fixed interest rates which are

close to the market rate. The interest rate risk is expected to be minimal. Details of interest and

maturity of loans have been disclosed in notes 17 to financial statements.

Exchange rate risk

The Company exposed to foreign currencies exchange rate risk in the minimum level since the

business transactions denominated in Thai Baht currency.

27.2 Fair value of financial instruments

Most of the Company's financial assets and liabilities are classified as short-term, and the rates of

loan interest are based on the market value. The book value of financial assets and liabilities shown

in statements of financial position are close to their fair value. Fair value is the amount for which an

asset could be exchanged between knowledgeble, willing parties in an arm’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.

28. CAPITAL MANAGEMENT

The objective of capital management of the Company is to appropriate properly financial structure and to

preserve the ability to continue its operation as a going concern.

As at December 31, 2013 the Company has debt to equity ratio equal to 0.13

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 ANNUAL REPORT 2013
BEAUTY COMMUNITY PUBLIC COMPANY LIMITED

29. EVENTS AFTER THE REPORTNG PERIOD

According to the minutes of Board of directors’ meeting No. 2/2014 held on February 25, 2014, passed the

resolution as follows:

1. To propose the approval for dividend payment from the 2013. Be paid to the

shareholders of 300 million shares at Baht 0.65 per share, amount of Baht 195 million, for

which the interim dividend was paid in 2013 at Baht 0.30 per share, amount of Baht 90

million, the remaining dividend to be paid at Baht 0.35 per share, amount of Baht 105

million to the general shareholder’s meeting.

2. To amend land lease agreement (as stated in note 19.4) by making 1 issue of

attachment with land lease agreement for the significant matter is to extend the lease

period for the next 10 year to be 30 year and determine lease remuneration in accordance

with the price of the independent appraiser and amend the ownership of other

constructions on leased land from belong to the lessor to the lessee and the lessee has to

demolish such constructions when the lease is terminated. The lessor started to charge

rental when the construction is completed or not over January 1, 2016.

30. FINANCIAL STATEMENTS APPROVAL

These financial statements were approved and authorized for issue by the Company's Board of directors on

February 25, 2014.

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