MESSAGE FROM THE CHAIRMAN AND THE CO-CHIEF EXECUTIVE OFFICERS

MESSAGE FROM THE CHAIRMAN AND THE CO-CHIEF EXECUTIVE OFFICERS

Dear Shareholders, In 2009, Grammy embarked on two significant missions. Firstly, Thais living abroad and for foreigners who enjoy listening to Thai the Company strongly emphasized businesses that are considered music. By expanding into this untapped market, the Company ‘Star Businesses’ or those that show potential in bringing about can export more content in terms of physical products and digital future prosperity. Secondly, we adjusted our strategies to better formats, as well as managing our music publishing business to meet changes in consumer behavior and constantly evolving many countries, and together with our foreign partners, groom technology. more artists under projects such as “Asian Hero”. Grammy views that ‘Star Businesses’ are those that can take The second mission is adjusting the Company’s strategies to advantage of the Group’s vast content, manage and adapt them better meet changing consumer behavior and technological to suit modern consumers’ lifestyles, or are capable of creating innovations by increasing the variety of distribution channels so new businesses through our existing content. These businesses that consumers can more readily access our music. This has include Digital Business, Satellite Television Business, Show been done by increasing the number of mobile sales units and Business, and International Music Business. expanding our telesales capacity, in addition to expanding the Our Digital Business has, on average, grown 50% over the past range of music products such as VCDs and DVDs of concerts, and two years due to our strategy of introducing monthly subscription edutainment products. services through every leading mobile telephone operator. We are The Company’s remaining core businesses showed satisfactory considered pioneers in creating this highly successful business growth despite Thailand facing an economic and political crisis. model, which manages content in a new format. Television program production for free television channels For our Satellite Television Business, Grammy was able to harness continued to grow, spurred by primetime dramas, sit-coms, both its longstanding expertise in targeting a wide spectrum of reality shows such as ‘The Star’, which proved popular across a viewer segments and the strength of its content to launch four wide audience. The latter also is an avenue for recruiting new channels within one year, all of which were well-received by both artists. Variety shows and dramas targeting teenaged audiences the audience and sponsors. have done particularly well, with GMM Grammy retaining its ‘Fan TV’ is the leading channel for fans who enjoy Thai country leadership in these two genres. music, and it has rapidly risen to become the third highest ranking Although revenue from the Radio Business declined in line channel on national cable television. ‘Bang Channel’ is among with economic conditions, new strategies to boost and retain the top tier cable channels favored by teenagers, while ‘Green its radio-related revenue share such as concerts, activities, and Channel’ wins the hearts of working age viewers who enjoy travel agencies yielded results indicating that these changes are contemporary music and rare footages of concerts, whilst ‘Acts pushing the business in the right direction. Channel’ caters to sit-com and drama fans. The Publishing Business has increasingly embraced new media. In addition, the Company and the Stock Exchange of Thailand have One example is creating Maxim’s “e-gazine”. In addition, we are jointly invested in Family Know-how Company Limited, which working to transfer magazine content to the satellite television operates the ‘Money Channel’, currently considered a central programs. source of information on finance and investments in Thailand. Through our subsidiary GTH, four films were produced in 2009. And in 2010, the Company plans to launch two to three more BTS: Bangkok Traffic (Love) Story earned 146 million baht in box satellite television channels to tap into opportunities available office sales, making it the most financially successful Thai film in in other viewer segments, and to strengthen the overall media 2009, in addition to being a winner of numerous awards. business platform. Thus, 2009 is a year that Grammy has set its goals on being a Show Business, which focuses on organizing concerts, is one leader in entertainment content by creating a high quality content of the best ways to make use of music content. In 2009, the platform to meet the needs of various consumer groups. Grammy emphasis was on creating new types of concerts, particularly firmly believes in ability to utilize its strong content over a long music festivals, which are the latest trend. One such concert was period of time, and delivered through the appropriate media or the ‘Dee Boy Pop Fest’ in Nakorn Ratchasima, a highland resort products which most conveniently matches the lifestyle of its about one and a half hour from Bangkok. target consumers. In parallel, the Company has created a media At the beginning of 2010, GMM Grammy also organized the ‘Big platform that is suited with the changing times, whether it be new Mountain Music Festival’, which showcases creativity for such media or segmented media, with the full backing of Grammy’s event in Thailand. Besides offering a wide expanse for artist leadership in a comprehensive range of mass media businesses. to perform and welcoming the largest audience the Company Nonetheless, Grammy’s missions could not be accomplished had ever managed, other forms of entertainment and activities without the support from every shareholder, members of the were available to ensure that all thoroughly enjoyed themselves management team, business partners, financial institutions, throughout the duration of the festival which lasted three days and related government agencies and our customers, as well as every two nights. employee in the Group, for their wholehearted cooperation in As a result of this successful music festival, the Company plans to weathering the challenging times together. make it an annual event, jointly developed with the expertise and On behalf of the Board of Directors, I wish to thank you and hope support of our subsidiaries, Index Event Agency Plc. that our Company will grow and progress sustainably, and bring One business that shows promising growth is the International excellent returns to every shareholder in the long run, as befits Music Business, which emphasizes creating new markets for the trust that you have always had in us.

Mr. Paiboon Damrongchaitham Ms. Boosaba Daorueng Mrs.Saithip Montrikul na Audhaya Chairman Chief Executive Officer Co - Chief Executive Officer

04 AUDIT COMMITTEE REPORT GMM Grammy Public Company Limited and Its Subsidiaries

AUDIT COMMITTEE REPORT GMM Grammy Public Company Limited and Its Subsidiaries

The Audit Committee (“the Committee”) has been appointed 5. Reviewed related transactions or conflict of interest issues by a resolution passed by the Board of Directors which to ensure that transactions were reasonable and fair in comprises 4 independent Directors. Mr. Chai Nasylvanta was accordance with the rules or announcements of the SET and appointed Chairman of the Audit Committee and the other the disclosures were correct and complete. members are Mr. Dej Bulsuk, Mr. Weerawong Chittmittrapap 6. Reviewed and acknowledged internal audit results quarterly. and Mr. Wanich Jarungidanan. The Director of the Internal Followed up management actions and progresses on Audit Department serves as the secretary to the Committee. the internal and external audit findings and recommendations. In 2009, the Committee had performed according to the Audit Approved the internal audit plan for the year 2010. Committee Charter which complies with the relevant rules In addition, the Committee reviewed the Independence of the and regulations set forth by the Stock Exchange of Thailand Internal Audit and concurred to the performance evaluation and the Good Corporate Governance policy. The Committee of the Internal Audit staffs and their remunerations which conducted 4 meetings, The summary of attendance of Audit were assessed and proposed by Chief Executive Officer. Committee members is as follows : 7. Annually reviewed and updated the Charter of Audit Committee Name Position Regular Meeting and Internal Audit, to ensure that the Charters still suit with 1. Mr. Chai Nasylvanta Chairman 2/4 the Company’s business environment. 2. Mr. Dej Bulsuk Member 4/4 8. Conducted the Audit Committee self assessment on its 3. Mr. Weerawong Chittmittrapap Member 4/4 composition, qualification, activities in compliance to 4. Mr. Wanich Jarungidanan Member 3/3 the audit Committee Charter, training, authority and the The Committee activities could be summarized as follows: independence. For the year 2009, the Committee concluded 1. Reviewed the quarterly and the annual financial statements that the Committee has adequately completed its duty as for the year 2009 regarding the disclosure of significant assigned and reported the assessment results along with information, rendered by the Internal Audit Department, the Committee’s activities to the Board of Directors Meetings the External Auditors and the Management, to ensure on February 26, 2010. the accuracy, reliability and adequacy. 9. Reviewed that the Company abided by the Good Corporate 2. Reviewed the efficiency and the adequacy of the GMM Governance and Code of Ethics Policies. Reviewed and Grammy Group’s internal control system in cooperation with updated the policy with the Management and internal the Internal Audit Department, the External Auditors and auditor to suit with the Company’s business environment the Management. before rendering it to the Board of Directors for approval. 3. Reviewed that the Company abided by the SEC and SET rules As the result of the above obligations, the Committee agreed and regulations, other related laws, the Company’s good that in general, the internal control system of the company and corporate governance and Code of Ethics Policies, through subsidiaries was adequate, fairly established and appropriate coordination with Management and Internal Audit Department to the Company’s businesses. There also was no significant 4. Considered and recommended the appointment of external weakness of internal control which would affect the accuracy auditors and their audit fee. For the year 2010, The Committee, and reliability of financial statements and the efficiency and in coordination with the Internal Audit Department and effectiveness to achieve the business goals. In addition, there the Management, Considered the independence and was adequate control system for the connected transactions the qualities of the audit task and recommended associated with the Major Shareholders, Directors, Management the reappointment of Mr. Narong Puntawong or Miss. Siraporn or other related persons. The Committee and the management Ouaanunkun or Mr. Supachai Phanyawattano or Mr. Khitsada recognized the importance of good corporate governance, Lerdwana (for subsidiaries) or Mr. Ruth Chaowanagawi internal control, and continuous risk management, which would (for subsidiaries), Certified Public Accountant (Thailand) ensure good corporate governance principles of company, No. 3315, 3844, 3930 4958 and 3247 respectively, of Ernst & acceptable level of internal control and risk management, Young Office Limited as the Company’s and its’ subsidiaries’ accurate and reliable accounting and financial reporting External Auditors and the audit fee for the fiscal year 2009. practices, together with compliance with the laws, the rules The appointment of the External Auditor for the year 2010 or announcements of the SET and regulations related to the was approved by the Board of Directors and will be proposed Company’s businesses to the Shareholders for their further approval. For the year 2009, the Committee conducted 1 meeting with External Auditor.

(Mr. Chai Nasylvanta) Chairman of the Audit Committee February 26, 2010

05 BOARD OF DIRECTORS

BOARD OF DIRECTORS

Ms. Boosaba Daorueng Vice Chairman, Director, Co-Chief Executive Officer, Mr. Paiboon Damrongchaitham Chief Creative Officer (Creative Division) Chairman, Chairman of the Company Advisor, Chairman of the Risk Management Committee Chairman of the Nomination Education: and Remuneration Committee • Bachelor of Liberal Arts, Thammasat University Experience: Education: Feb. 2009 – Present Co-Chief Executive Officer • Bachelor of Arts (Mass Communications) (Honors), 2008 – Present Vice Chairman Chulalongkorn University 2005 – Present Chairman of the Risk • Doctoral of Business Administration (Honorary), Management Committee Christian University 2001 – Present Chief Creative Officer (Creative Division) Experience: 1994 – Present Director 2008 – Present Chairman of the Company Advisor 2002 – Feb. 2009 Chief Executive Officer 2005 – Present Chairman of the Nomination and 2003 – 2008 Advisor to the Board of Director / Remuneration Committee Advisor to the Executive Committee, 1998 – Present Chairman GMM Media Plc. Nov. 2009 – Present Director / Vice Chairman, Family Know How Co., Ltd. 1983 – 2001 Executive Vice President 2008 – Present Chairman of the Company Advisor, GMM Media Plc. (Music Business Division), 2005 – Feb. 2009 Chairman of the Nomination and Remuneration Grammy Entertainment Plc. Committee, GMM Media Plc. 2002 – Feb. 2009 Chairman, GMM Media Plc. 2007 – 2008 Advisor to the Executive Committee, GMM Media Plc. 1998 – 2008 Advisor to the Executive Committee 2005 – 2007 Chairman of the Risk Management Committee, GMM Media Plc. 2002 – 2007 Chief Executive Officer, GMM Media Plc. 2005 – 2006 (Acting) Managing Director, Sanamluang Gandontree Co.,Ltd. 1983 – 1998 Managing Director, Grammy Entertainment Plc.

Mr. Krij Thomas Director, Executive Director, Chief Operating Officer (Music Business Division)

Education: • Bachelor of Arts (Mass Communications), Chulalongkorn University Experience: 2008 – Present Director / Executive Vice President (Music Business Division) 2004 – Present Executive Director 2003 – Present Managing Director (Grammy Gold Division) 2007 – Present Director, 3-RD Co., Ltd. 2005 - 2006 (Acting) Managing Director (GMM International Division) 2001 – 2003 Assistant Managing Director (Grammy Gold Division) 1999 – 2001 Assistant Vice President (Grammy Gold Division)

06 Mrs. Saithip Montrikul Na Audhaya Mr. Sumeth Damrongchaitham Director, Co-Chief Executive Officer, Director, Executive Director, Chief Operating Officer, Member of the Risk Management Committee (Corporate Support and Business Development), Chairman of the Sub-CG and Ethics Committee, Education: • Bachelor of Arts (Mass Communications), Chulalongkorn University Member of the Nomination and Remuneration Committee, Experience: Member of the Risk Management Committee, Company Feb. 2009 – Present Co-Chief Executive Officer Secretary, Secretary to the Board of Director, 2002 - Present Director Secretary to the Executive Committee Feb. 2009 – Present Chairman, GMM Media Plc. 2007 – Present Chief Executive Office, GMM Media Plc. 2007 – Present Director / Managing Director, A-Time Traveller Co., Ltd. Education: 2006 – Present Director / Managing Director, Open Radio Co., Ltd. • Bachelor of Economics, Chulalongkorn University 2002 – Present Director / Managing Director, GMM Media Plc. • Bachelor of Science (Construction Management), 1991 – Present Director / Managing Director, Radio Concept Co.,Ltd. King Mongkut’s Institute of Technology Ladkrabang 1989 – Present Director / Managing Director, A-Time Media Co.,Ltd. • Bachelor of Business Administration (General Management), 2008 – Feb. 2009 Vice Chairman, GMM Media Plc. Ramkhamhaeng University 2007 – Feb. 2009 Chairman of the Risk Management Committee, • M.B.A. (Finance), Thammasat University GMM Media Plc. Seminar Accomplishment: 1989 – Feb. 2009 Executive Director The Thai Institute of Directors (IOD): 2005 – 2007 Member of the Risk Management Committee, • Company Secretary Program (CSP) (Class 28/2008) GMM Media Plc. • D&O Insurance: Mitigating Directors Liabilities Risk / 2002 – 2007 Executive Director, GMM Media Plc. Special Seminar (Class 3/2008) 1995 – 2007 Managing Director, GMM TV Co., Ltd. • Role of the Compensation Committee (Class 3/2007) (formally known as Grammy Television Co.,Ltd.) • Director Accreditation Program (DAP) (Class 21/2004) Capital Market Academy (CMA): • Leader Program, Capital Market Academy (Class 8/2009) Experience: 2008 – Present Company Secretary / Chairman of the Sub-CG and Ethics Committee 2005 – Present Member of the Nomination and Remuneration Committee Member of the Risk Management Committee 2004 – Present Director / Executive Director Secretary to the Board of Director / Secretary to the Executive Committee Chief Operating Officer, (Corporate Support and Business Development) Nov. 2009 – Present Director / Managing Director, Family Know How Co., Ltd. Apr. 2009 – Present Director, Post Publishing Plc. Feb. 2009 – Present Vice Chairman, GMM Media Plc. 2008 – Present Company Secretary, GMM Media Plc. 2007 – Present Assistant to Chief Executive Officer, GMM Media Plc. 2005 – Present Member of the Nomination and Remuneration Committee, Member of the Risk Management Committee, GMM Media Plc. Mr. Takonkiet Viravan 2006 – Present Member of the Recruitment and Remuneration Committee, SE-EDUCATION Plc. Director, Executive Director 2005- Present Director, SE-EDUCATION Plc. 2004 – Present Director / Secretary to the Board of Director, GMM Media Plc. Education: 2004 – Feb. 2009 Executive Director, Secretary to the Executive Committee, • Bachelor of Communication & Theatre, Boston College U.S.A. GMM Media Plc. • M.S. (Broadcasting), Boston University, U.S.A. 2000 - 2004 First Vice President, National Finance Plc. Experience: 2000 Vice President, National Finance Plc. Apr. 2009 - Present Director 1999 – 2000 Manager Special Asset Management, National Finance Plc. Feb. 2009 - Present Executive Director 1996 – 1999 Assistant Vice President, National Securities Plc. 2002 – Present Director, GMM Media Plc. 2004 - Present Director / Managing Director, Scenario Co.,Ltd. 2003 - Present Director / Managing Director, Teentalk Co.,Ltd. 1991 - Present Director / Managing Director, Exact Co.,Ltd. 2002 – Feb. 2009 Executive Director, GMM Media Plc.

07 BOARD OF DIRECTORS

BOARD OF DIRECTORS

Mr. Chai Nasylvanta Mr. Kreingkarn Kanjanapokin Independent Director, Chairman of the Audit Committee, Director, Executive Director Member of the Nomination and Remuneration Committee Education: Eucation: • Bachelor of Engineering (Electrical Engineering), Chulalongkorn University • Bachelor of Political Science, Chiang Mai University • M.B.A. (Finance), University of Pennsylvania, U.S.A. Seminar Accomplishment: Experience: The Thai Institute of Directors (IOD): Feb. 2009 – Present Chairman of the Audit Committee, • Financial Statement for Directors Program, 2008 Member of the Nomination and Remuneration Committee • Director Accreditation Program (DAP) (Class 30/2004) 1999 – Present Independent Director Experience: 2007 – Present Director, National Power Supply Co., Ltd. Apr. 2009 - Present Director / Executive Director 2007 – Present Director, National Power Co., Ltd. 2008 – Present Director, GMM Media Plc. 2006 – Present Director / Vice Chairman, Advance Aviation Co., Ltd. 2004 - Present Director / Co-Chief Executive Officer, 2006 – Present Independent Advisor, Benchachinda Holding Co., Ltd. Index Event Agency Plc. 1993 – Present Director, AON (Thailand) Ltd. 2001 – 2004 Managing Director, Index event Agency Co., Ltd. 1989 – Present Director, AON Group (Thailand) Ltd. Other present works: 1989 – Present Director / Chairman, Marketing & Image Advertising Co., Ltd. • Advisor, Marketing Association of Thailand (MAT). 2006 – Apr. 2009 Director, Post Publishing Plc. • Special Speaker, Master Degree, School of Communication Arts, 2005 – Feb. 2009 Member of the Nomination and Remuneration University of the Thai Chamber of Commerce. Committee, GMM Media Plc. • Special Speaker, Famous Institutes and Organization. 2002 – Feb. 2009 Independent Director / Chairman of the Audit Committee, GMM Media Plc. 1999 – Feb. 2009 Member of the Audit Committee 2005 – 2006 Director, Total Access Communication Plc. 1995 – 2006 Independent Advisor, United Communication Industry Plc. 1984 – 1995 Senior Vice President, Project Finance Department, Bangkok Bank Plc.

Mr. Sataporn Panichraksapong Director, Executive Director, Member of the Risk Management Committee, Assistant to Executive Vice President (Music Business Division)

Education: • Bachelor of Journalism and Mass Communications (Cinematography), Thammasat University Experience: Apr. 2009 - Present Director Feb. 2009 – Present Executive Director / Member of the Risk Management Committee 2008 – Present Assistant to Executive Vice President (Music Business Division) Apr. 2009 - Present Director, GMM Media Plc. 2007 – Present Director / Managing Director, GMM TV Co., Ltd. (formally known as Grammy Television Co., Ltd.) 2005 – 2006 Senior Vice President, Chief Executive Officer Office 2007 – Feb. 2009 Member of the Risk Management Committee, GMM Media Plc. 2005 – 2007 Deputy Managing Director, Grammy Television Co., Ltd. 2000 – 2002 Director – Music Business Division, RS Promotion Co., Ltd.

08 Mr. Dej Bulsuk Mr. Weerawong Chittmittrapap Independent Director, Member of the Audit Committee, Independent Director, Member of the Audit Committee Member of the Nomination and Remuneration Committee

Education: Education: • Bachelor of Laws, Chulalongkorn University • Bachelor of Business Administration, Thammasat University • Master of Laws, University of Pennsylvania, U.S.A Seminar Accomplishment: • Thai Barrister-at-Law and the first Thai lawyer admitted to The Thai Institute of Directors (IOD): the New York State Bar • Director Accreditation Program (DAP) (Class 23/2004) Seminar Accomplishment: Experience: The Thai Institute of Directors (IOD): Feb. 2009 – Present Member of the Audit Committee • Director Certification Program (DCP) (Class 0/2000) 2006 – Present Member of the Nomination and Remuneration Committee Experience: 2002 – Present Independent Director 2006 – Present Independent Director / Member of the Audit Committee 2004 – Present President, CCC Business Development Co., Ltd. Apr. 2009 – Present Director / Member of the Audit Committee, Director, Thailand Convention and Exhibition Bureau Thai Airways International Plc. (TCEB) (Public Organization) Director, Nok Airlines Co., Ltd. Chairman of the Good Governance, Recruitment and 2008 – Present Chairman, Weerawong, Chinnavat & Peangpanor Ltd. Remuneration Committee, TCEB (formally known as “White & Case (Thailand) Ltd.”) Director, Siam Future Development Plc. 2008 – Present Director, National Power Supply Co.,Ltd. Independent Director / Member of the Audit Committee, 2008 – Present Director, National Power Co.,Ltd. The Erawan Group Plc. 2007 – Present Director / Member of the Audit Committee, 2002 – Present Independent Director / Member of the Audit Committee, Siam Food Products Plc. Jay Mart Plc. 2001 – Present Director / Member of the Audit Committee, Berli Jucker Plc. 2001 – Present Independent Director / Member of the Audit Committee, 1996 – 2008 Executive Partner, White & Case (Thailand) Co., Ltd AEON Thana Sinsap (Thailand) Plc. 2001 – 2007 Director / Member of the Audit Committee, ITV Plc. 2006 – Jun. 2009 Advisor to the Board, President Bakery Plc. 2005 – 2006 Director, Nutrix Plc. 2006 – Feb. 2009 Chairman of the Audit Committee 2002 – Feb. 2009 Independent Director / Member of the Audit Committee, Other present works: GMM Media Plc. • Qualified Member to Trade Competition Committee, Ministry of Commerce 2004 – 2006 Honorary Chairman, McThai Co.,Ltd. (McDonald’s Thailand) • Special Speaker, Thai Institute of Directors 1984 – 2004 President & Joint Venture Partner, McThai Co.,Ltd. • Special Advisor, Thai Listed Company Association (McDonald’s Thailand) • Special Lecturer, Institute of Legal Education, Thai Bar Association

Mr. Wanich Jarungidanan Independent Director, Member of the Audit Committee

Education: • Bachelor of Fine Arts (Printmaking), Silpakorn University • Master of Arts (Printmaking), California State University, Long Beach California U.S.A. Experience: Apr. 2009 – Present Independent Director / Member of the Audit Committee 2005 – Feb. 2009 Independent Director / Member of the Audit Committee, GMM Media Plc. Other present works: 1978 - Present Writer (S.E.A. Write Award (Short Stories) for the year

09 EXECUTIVE COMMITTEE

EXECUTIVE COMMITTEE

Ms. Boosaba Daorueng Mr. Yongsak Ekprachyasakul Co - Chief Executive Officer Executive Director

Mrs.Saithip Montrikul Na Audhaya Mr. Takonkiet Viravan Co - Chief Executive Officer Executive Director

Mr. Kittisak Chuang-a-roon Mr. Kamron Pramoj na Ayutthaya Executive Director Executive Director

Mr. Krij Thomas Mr. Kreingkarn Kanjanapokin Executive Director Executive Director

Mr. Wichian Rerkpaisan Mr. Sataporn Panichraksapong Executive Director Executive Director

Mr. Santisuk Chongmankong Mr. Sirichai Tantiponganant Executive Director Executive Director

Mr. Suwat Damrongchaitham Mr. Sumeth Damrongchaitham Executive Director Executive Director and Secretary to the Executive Committee

010 BUSINESS STRUCTURE AND INVESTMENT STRUCTURE

BUSINESS STRUCTURE AND INVESTMENT STRUCTURE

Total Music Business Media Business

• Music Business • Radio Business • GMM Grammy Plc. • GMM Media Plc. • Luck Music 999 Co.,Ltd • A-Time Media Co.,Ltd. • Sanamluang Garndontree Co.,Ltd • Television Business • Global Music and Media (Thailand) Co.,Ltd. • Exact Co.,Ltd. • MGA Co.,Ltd. • GMM TV Co.,Ltd. • GMM Music Publishing International Co., Ltd. • Teen Talk Co., Ltd. • GIP Management Co.,Ltd. • Mass Monitor Co.,Ltd. • Clean Karaoke Co.,Ltd. • Deetalk Co.,Ltd. • Show Business • Scenario Co.,Ltd. • GMM Grammy Plc. • Channel (V) Music (Thailand) Co.,Ltd. • GMM Media Plc. • Family Know-how Co., Ltd. • Artist Management • Publishing Business • GMM Grammy Plc. • Image Publishing Co.,Ltd. • G-Gram Co., Ltd. • GMM Inter Publishing Co., Ltd. • Digital Business • GMM Times Co., Ltd. • GMM Grammy Plc. • Bliss Publishing Co.,Ltd. • GMM Digital Domain Co.,Ltd. • In Publishing Co.,Ltd. • Digital Arms Co.,Ltd. • Event Creation and Management Business • Index Event Agency Plc. • Event Solutions Co.,Ltd. Movies Business • Aspen Index Event Co.,Ltd. • Tresbien Co.,Ltd. • GMM Tai Hub Co.,Ltd. • Media Vision (1994) Co.,Ltd. • Sawasdee Thaweesuk Co., Ltd.* • G Communications Co.,Ltd. • Tifa Co.,Ltd. • Inspire Image Co.,Ltd. • Nadao Bangkok Co.,Ltd. • I Think Ad Co.,Ltd. • D 63 Co.,Ltd. • Encore Co.,Ltd. • Index Creative Online Co., Ltd. • Blue Media Communications Co., Ltd.

Other Business

• GMM Holding Co., Ltd. • GMM Studio Co.,Ltd. • Mifah Co.,Ltd. • GMM Fitness Club Co.,Ltd. • 3-RD Co.,Ltd.

* Formerly known as Two To Film Co., Ltd.

011 BUSINESS STRUCTURE AND INVESTMENT STRUCTURE

GMM GMM GRAMMY PLC. MEDIA PLC. 99.89%

Music Business Radio Business

• 100% Global Music and Media (Thailand) Co.,Ltd. • 100% A-Time Media Co.,Ltd. • 50% Lucks Music 999 Co.,Ltd.1 • 20% A-Time Traveller Co.,Ltd. 8 • 100% MGA Co.,Ltd. • 100% Open Radio Co.,Ltd.* • 100% Clean Karaoke Co.,Ltd. • 100% Radio Concept Co.,Ltd.* • 100% GMM Music Publishing International Co.,Ltd. Television Business • 100% GIP Management Co.,Ltd. • 50% G-Gram Co.,Ltd 2 • 100% Deetalk Co.,Ltd • 100% More Music Co.,Ltd.* • 100% GMM TV Co.,Ltd. • 100% Extraorganizer Co.,Ltd.์* • 100% Teentalk Co.,Ltd • 100% Aratist Management Co., Ltd. * • 100% Mass Monitor Co.,Ltd • 100% Music Copyright Collection Co.,Ltd.* 49% • 100% Global Music and Media Limited* • 51% Exact Co.,Ltd 9 Movies Business • 25% Scenario Co.,Ltd • 25% Channel (V) Music (Thailand) Co.,Ltd. 10 3 • 51% GMM Tai Hub Co.,Ltd. Publishing Business • 100% Sawasdee Thaweesuk Co.,Ltd. ** • 70% Image Publishing Co.,Ltd. 11 • 51% Phenomena Motion Pictures Co.,Ltd*4 • 70% GMM Inter Publishing Co.,Ltd. 12 • 30% Nadao Bangkok Co.,Ltd. 5 • 70% GMM Times Co.,Ltd.13 • 100% Tifa Co.,Ltd • 100% Bliss Publishing Co.,Ltd. • 100% Upper Cut Co.,Ltd. * • 70% In Publishing Co.,Ltd. 14 Other Business Event Creation and • 70% 3-RD Co.,Ltd. 6 Management Business • 50% Family Know-how Co., Ltd. 7 • 50% Index Event Agency Plc. 15 • 50% G Communications Co.,Ltd. 16 • 100% Event Solutions Co.,Ltd. • 50% Aspen Index Event Co.,Ltd. 17 • 100% Tresbien Co.,Ltd. • 51% Media Vision (1994) Co.,Ltd. 18 • 37% Encore Co.,Ltd. 19 • 60% Inspired Image Co.,Ltd. 20 • 40% I Think Ad Co.,Ltd. 21 • 50% D 63 Co.,Ltd. 22 • 70% Index Creative Online Co.,Ltd. 23 • 40% Blue Media Communications Co.,Ltd.24

012 BUSINESS STRUCTURE AND INVESTMENT STRUCTURE

GMM HOLDING CO.,LTD. 100%

• 100% Sanamlung Garndontree Co.,Ltd. Note * Non-active • 100% GMM Digital Domain Co.,Ltd. ** Formerly known as Two To Film Co., Ltd. • 100% Digital Arms Co.,Ltd. 1. Lucks Music 999 Co.,Ltd. : Mr. Kiettisak Udomnak with 30% shareholding and Mr. Chatchawan Pukkahut with 20% • 100% GMM Studio Co.,Ltd. shareholding 2. G-Gram Co.,Ltd. : Na Fah Co.,Ltd with 50% shareholding • 100% Mifah Co.,Ltd. 3. GMM Tai Hub Co.,Ltd. : Poolvoralaks Group with 27% • 100% GMM Fitness Club Co.,Ltd. shareholding, Hub Ho Hin Bangkok Co.,Ltd. with 14% shareholding and others with 8% shareholding • 100% Grammy Publishing House Co.,Ltd.* 4. Phenomena Motion Pictures Co.,Ltd. : Phenomena Co.,Ltd. • 100% Global Music and Media (China) Limited with 49% shareholding * 5. Na Dao Bangkok Co.,Ltd : Mr. Songyos Sukmakanand with • 91% Magic Film Co.,Ltd.* 45% shareholding, Hub Ho Hin Bangkok Co.,Ltd. with 10% shareholding and others with 15% shareholding 6. 3 - RD Co., Ltd.: Miss Kanokdao Karnjanapusakij with 10%, Mrs. Kanokporn Nitrteeranont with 10% and Mr. Chatchawan Kusmith with 10% respectively 7. Family Know-how Co.,Ltd : The Stock Exchange of Thailand with 50% shareholding 8. A-time traveller Co.,Ltd. : Mr. Worarit Waijeranai with 60% shareholding and Miss Saratchaya Chantanithi with 20% shareholding 9. Scenario Co.,Ltd.: Mr. Takonkiet Viravan with 52% shareholding and others with 23% shareholding 10. Channel (V) Music (Thailand) Co.,Ltd. : Channel(V) Natherlands No.2B.V with 49% shareholding and TRUE Vision with 26% shareholding 11. Image Publishing Co.,Ltd.: Mr. Kamron Pramoj na Ayutthaya with 30% shareholding 12. GMM Inter Publishing Co.,Ltd.: Ms. Laikram Lerdvitayaprasit with 19% and others with 11% shareholding. 13. GMM Times Co.,Ltd.: TP Ventures Private Ltd. with 30% shareholding 14. In Publishing Co.,Ltd.: Osotspa Holding Co.,Ltd. with 30% shareholding 15. Index Event Agency Plc.: Kanjanapokin Group with 50% shareholding 16. G Communications Co., Ltd.: Ms. Monya Thongdeelert with 50% shareholding 17. Aspen Index Event Co.,Ltd. was registered in the United Arab Emirates, with 50% shareholding by Mr. Hashem Al Marzouqi 18. Media Vision (1994) Co., Ltd.: Mrs. Nongrak Hongsakul with 49% shareholding 19. Encore Co., Ltd.: A.V. Systems Co.,Ltd., Light Source Co.,Ltd. and others with 33%, 20% and 10% shareholding respectively 20. Inspire Image Co., Ltd.: Mr. Phichet Lakdee with 40% shareholding 21. I Think Ad Co., Ltd.: Mr. Phised Kanjanapokin and others with 25% and 25% respectively 22. D 63 Co.,Ltd. : Miss Supaluck Suwat and others with 33% and 17% shareholding respectively 23. Index Creative Online Co.,ltd. : Mr. Adilfetri Prapruksujarit with 25% shareholding and Mr. Mongkol Paoobnang with 5% shareholding 24. Blue Media Communications Co.,Ltd. : Mr. Burapaporn Musiksindhorn with 40% shareholding and Mr. San Birombhadhi with 20% shareholding

013 SOCIAL AND PUBLIC ROLES

GMM Grammy Pcl. signs blessings and best wishes for His Majesty the King

GMM Grammy Pcl., Chairman Paiboon Damrongchaitham, CO-CEO Miss Boosaba Daorueng, together with the Management team and artists, signed their blessings and best wishes for His Majesty the King at Siriraj Hospital. They also presented flowers to His Majesty’s portrait at the 100 Year Memorial Building of the Princess Mother alongside the general public, to show their loyalty and warm wishes for His Majesty’s health.

Mr. Paiboon Damrongchaitham donates “Klai Jai” (‘Close to the Heart’) to youths

The Crown Property Bureau Foundation launched books under the “Close to Heart” programme led by Thanpuying Oranuj Isarangkun na Ayudhya who served as the editor. On this occasion, Paiboon Damrongchaitham, Chairman of GMM Grammy and a team of Grammy artists donated sets of “Klai Jai” books to Suan Kularb School students in Mathayom 4 through 6, as the content was deemed useful to youths.

014 SOCIAL AND PUBLIC ROLES

Striding into the 27th Anniversary of GMM Grammy Pcl.

GMM Grammy entered its 27th year as Thailand’s leading entertainment purveyor in terms of its outstanding capacity and performance. It is with such dedication that the company will continue to develop and improve, as a leader in Thailand and in its bid to become a leading entertainment contender in Asia, and eventually recognized in international circles. Well aware of its responsibilities towards society, Grammy remains an active participant in various social activities that aim to develop and support Thai society.

Damrongchaitham Foundation Lauded by the Ministry of Education

Paiboon Damrongchaitham, Chairman of the Damrongchaitham Foundation received an honorary plaque from Saengchai Meesunthorn, Head of Social Services and Welfare for Youths, Office of The Basic Education Commission (OBEC), Ministry of Education, for the Foundation’s work in providing education equitably to Thai children and youths.

Damrongchaitham Foundation: Marking the 11th Anniversary of providing education opportunities to Thai children

On 13 September 2007, the Ministry of Finance announced that Damrongchaitham Foundation, which has provided education opportunities to Thai youths for 11 years, has been ranked 643th in a special national recognitions list for public service organizations. Damrongchaitham Foundation was established by Paiboon Damrongchaitham, Chairman of GMM Grammy, to support academically strong, well-behaved Thai children who exhibit high potential, but possessed limited financial means. Therefore, an annual scholarship was provided to each qualified recipient until they complete their Bachelor’s degree. In 2009, the Foundation supported a total of 275 students. To date, 133 scholars have completed their first degree. Funds have also been allocated to activities for youths and those who were accepted into the Foundation, include THB 100 million earmarked to cover living and education expenses for 100 orphans left by the tsunami approximately 10 years ago. Another programme is “Funds for Mass Communications Events” in 2004 amounted to THB 1.5 million, of which the sum is divided into two portions, whereby five research and development (R & D) projects are funded, while another portion is used to support four Mass Communication projects. Presently, the five R & D projects have been completed. The results have been donated by the Foundation to 15 schools, government departments and other organizations throughout the country.

015 SOCIAL AND PUBLIC ROLES

Blood Drive

GMM Grammy in cooperation with Damrongchaitham Foundation Received A “Golden God” Award the Thai Red Cross Society held its annual blood drive by inviting as an Outstanding Organization the management, staff and artists, The Broadcaster’s Association of Thailand under the Royal Patronage of H.M. the King along with members of the public hosted the 10th “Golden God” Award ceremony in 2008, which evaluates organizations in the neighbourhood to donate and individuals for their outstanding contributions in broadcasting radio and television blood. programmes. The judging committee awarded Grammy the “Golden God” Award for ‘Outstanding Organization’ to the Damrongchaitham Foundation. Praphawadee Thanirananont, Deputy Managing Director of Public Relations and Communications, represented Paiboon Damrongchaitham in receiving the award at the Sala Saha Thai Samakhom at the Grand Palace

“Just Say No” Campaign

The ‘Just Say No’ campaign against drugs and substance abuse is one project that GMM Grammy has taken the lead over the years, given the company’s awareness of the dangers this addiction poses to society and the country’s stability. Besides ‘Just Say No’, GMM Grammy has campaigned on related areas such as “World No Smoking Day”, “World Anti-Drug Day” and “Alcohol Alert for Youths”.

016 SOCIAL AND PUBLIC ROLES

GMM Grammy continues the “To Be Number One” Campaign

The “To Be Number One” campaign under the patronage of Her Royal Highness Princess Ubolratana Rajakanya Sirivadhana Phannavadi is jointly operated by the Ministry of Public Health and GMM Grammy. Activities of these outreach programmes include “To Be Number One” nationwide concert tours so members in different provinces can better use their spare time doing something beneficial while steering clear from drugs. Grammy artists and “To Be Number One” members have organized concerts in every region, including Surat Thani, Khon Kaen, Cholburi, Nakhon Sri Thammarat, Prae, Maha Sarakham, Uttaradit, Ratchaburi, Nakorn Ratchasima, and Bangkok. Many artists have continued to participate in the campaign, namely: Aof Pongsak, Boy Peacemaker, Chin Chinnawut Indracusin, Peck Palitchoke, Praew Kanitkul, Ploy Natcha Sawasdirakiat, Cham Chamrum, Grand the Star 5, Ging the Star 5, Mint Sawanya, Techin Chayut, Atom – Ten Mike Idol, Ikkyu – Peeraphol Senakhun, and bands like B.O.Y., Brazia, Hangman, Buddha Bless, Klear, Sweet Mullet, Seal, Go Kai Gub Nai Son, and Kala.

Campaigns for Children and Youths

GMM Grammy’s created these programmes to support and develop children and youths so they have a positive outlook and attitude towards themselves, as well as towards others around them, and to society. Activities included gift giving on Children’s Day, events on Youth Day, donating books to youths, treating underprivileged children to a good meal, providing moral support, and campaigns to encourage merit making for destitute children on individuals’ birth months. “Ta-non Sai Sang Tawan” (“Road of Sunlight”) Programme to Support a Better Quality of Life in Society

This programme is a collaborative effort between Grammy, government bureaus and other groups to support socially beneficial campaigns such as World AIDS Day, “Stop violence against women and children”, as well as relief efforts under the auspices of the Thai Red Cross Society like “World Blood Donation Day”, auctioning celebrity items for the International Red Cross, encouraging eye donations, participating in activities for the disabled, and publicizing the sale of Mahidol Day Flags for Siriraj Foundation to raise funds for destitute patients.

017 SOCIAL AND PUBLIC ROLES

SOCIAL AND PUBLIC ROLES

Campaign to Instill Public Conscience against Violating Intellectual Property Rights

Grammy has collaborated with the government and related organizations to promote intellectual property rights. “Took, Took Jai, Took Godemai” (‘Cheap, Satisfactory, Lawful’) is a campaign to instill public conscience under the slogan “Don’t Buy, Don’t Sell, Don’t use counterfeit products”. It is hoped that this will stimulate greater public awareness and reduce long-term intellectual property right violations. Moreover, the company created three special songs to promote intellectual property right: “Intellectual property Right” (‘Sup Sin Taang Punya’) sung by Tai Orathai; “Sailing on the Wisdom of Esarn” (‘Lum Long Poom Punya Esarn’) sung by Monkhaen Kaenkhun; and “Creative Esarn” (‘Esarn Sarng Sun’) sung by Dok Or Thung Thong, Garntong Thung Ngern and Newkoy Kannika. These songs were given to the Department of Intellectual Property, Minitry of Commerce, for broadcasting.

Additionally, some special social programmes were added, such as:

Paiboon Damrongchaitham, Chairman of Grammy, brought his management and artists to participate in a major merit making event in “Kaew Ta-Duang Jai Terd Tai Ong Racha Rachinee” (‘Eyes and Hearts in Honour of The King and Queen’) in 2010, to mark Their Majesties’ 60th Wedding Anniversary. Organized by the Ministry of Public Health, National Health Security Office, the Department of Medical Services, Thai Pueng Thai Foundation, and private sector organizations, the funds will be used to pay for heart and eye surgeries, as well as chemotherapy treatment, for the impoverished and disadvantaged, to make merit for Their Majesties.

Sumeth Damrongchaitham, Chief Operating Officer of Corporate Support and Business Development of GMM Grammy presented a collection of Thai literary classics enjoyed by youths at the Damrongchaitham Foundation to Patreeya Benjapolchai, Director and President of the Stock Exchange of Thailand under the “Song Nung Sue Seu Kwarm Roo Soo Hong Samud” (‘Send books that endow knowledge to libraries’), which was subsequently distributed to the Department of Corrections’ libraries nationwide.

Grammy donated the proceeds from the “Gong Tub Thai Gub Khon Hua Jai Singh Asanee -Wasan” Concert to Her Royal Highness Princess Maha Chakri Sirindhorn to purchase medical equipment for the animal hospital and contribute to a welfare fund for the Army, primarily for scholarships to assist the families of soldiers who have died in carrying out their duties at the borders, by presenting the funds to Army Chief General Anuphong Paochinda.

Grammy is determined to continue its social activities to enable Thai society to develop and prosper.

018 There are many social awards received by Grammy artists for participating in these activities for the betterment of society, as well as numerous honorary awards for artists who have promoted many campaigns and served as role models, with their social contributions. SOCIAL AWARDS

019 Award Recipient Organization

Honorary Shield - Outstanding Organization GMM Grammy Pcl. National Office for for Supporting the Disabled 2009 Empowerment of Persons with Disability

Commemorative Pins – Artists and Departments who GMM Grammy Pcl. The Faculty of Medicine, helped raise funds for the “Ananda Mahidol Foundation” Chin – Chinnawut Indracusin Chulalongkorn University which will be used to assist impoverished patients B.O.Y.

“Alongkorn Honorary Award” GMM Grammy Pcl. Ministry of Public Health for supporting a smoke-free society

Certificate of merit for supporting the production of GMM Grammy Pcl. The House of Representatives “Loom Nam Diew Gun” song under the “Din Dan Hang Committee on religion, Ariyatham Santisuk” project arts and culture, the Royal Cambodian Embassy and the Embassy of the Lao People’s Democratic Republic.

Commemorative Plaque from His Royal Highness Crown GMM Grammy Pcl. Faculty of Medicine, Prince Maha Vajiralongkorn for being an organization that Siriraj Hospital supports various activities by the Faculty of Medicine, Siriraj Hospital on Mahidol Day.

Honorary Plaque for being an organization that GMM Grammy Pcl. The National Council on continually supports International Day of Persons with Social Welfare of Thailand, Disabilities under Royal Patronage of HM the King

“Golden Angel” Award for Outstanding Organization Damrongchaitham Broadcaster’s Association Foundation of Thailand, under the Royal Patronage of HM the King

Diamond Song Awards: Office of Literature and Best Rendition in Thai – Thai Contemporary Song (Male Singer) History, * Award of Merit – “Pai Tiew Gun” (Let’s Travel!) Singer: Thongchai McIntyre Fine Arts Department, * Award of Merit – “Jed Wun Ti Chan Ngao” (Seven days of Loneliness) Singer: Sukrit Wisetkaew Ministry of Culture Best Rendition in Thai – Thai Contemporary Song (Female Singer) * Award of Merit – “Sang Lae Ngao” (Light and Shadow) Singer: Wichanee Piaklin * Award of Merit – “Jao Ying Korng Rao” (Our Princess) Singer: Ann - Thitima Pratumtip Best Rendition in Thai – Thai Look Thung Song (Male Singer) * Award of Merit – “Sang Duean Tarm Khao, Sang Dao Num Tarng” (Moonlight asks for news, Starlight Guides the Way) Singer: Pongsatorn Srichan Best Rendition in Thai – Thai Look Thung Song (Female Singer) * Award of Merit – “Mai Tae Tee Mae Tor” (Real Silk that Mother Wove) Singer: Tai – Oratai Best Contemporary Thai Music Lyrics *Award of Merit – “Pai Lu Lom” (Bamboo Blowing in the Wind) Composer: Saenkom Somkid Best Thai Look Thung Lyrics * Winner – “Mai Tae Tee Mae Tor” Lyricist: Paiwarin Khao-ngarm

“Filial Children” Awards on Bie – Sukrit Wisetkaew The National Council on the occasion of Mother’s Day 2009 Chin – Chinnawut Indracusin Social Welfare of Thailand, under Royal Patronage of HM the King

020 SOCIAL AND PUBLIC ROLES

Award Recipient Organization

Award for Outstanding Youth of Thailand, in the category Bie – Sukrit Wisetkaew Office of Welfare Promotion, of Media for Children and Youths against Social Problems Protection and Empowerment of Vulnerable Groups, and the Ministry of Social Development and Human Security

“Golden God” Award for Outstanding Radio Peck – Preamanut Broadcaster’s Association and Television Personality Suwananon of Thailand, under the Royal Patronage of HM the King

Award for people who have outstanding contributions in Ruj – Supparuj Techananon Office of the Narcotics preventing and correcting drug problems in 2009 Control Board

Award for being a Role Model for Youths in the Singto – Singharat Ministry of Culture “Khon Dee, Kit Dee, Sungkom Dee” (Good People, Good Chanpakdee Thoughts, Good Society)

Certificate of Merit, as a representative of Thai artists Mike Piromporn The House of who participated in singing “Loom Nam Diew Gun” under Representatives the “Garn Dern Din Dan Hang Ariyatham Santisuk” project Committee on religion, arts and culture, the Royal Cambodian Embassy and the Embassy of the Lao People’s Democratic Republic.

PRESENTERS

021 SOCIAL AND PUBLIC ROLES

Presenter Artist Organization

Presenter: “Thieo Thai Khruek Khreun Settakit Thai Kheuk Khuk” Bird Thongchai McIntyre Tourism Authority of Thailand

Campaign Presenters: “Stop violence towards children, Pepper - Rattasart Ministry of Social women, and family violence” Kanasut Development and John – Winyu Human Security Wongsurawat

Lead Artists in Campaign for “1 Rian 1 Kum Attitarn Christina Aguilar Foundation on Puea Nai Luang” (‘One Coin, One Wish for the King’) Singto – Singharat International Chanpakdee Human Resources View – Wannarat Development, Ministry Sontichai of Finance and private sector

Presenters promoting Jasmine flowers for Mother’s Day 2009 Dome - Pakorn Lum The National Council Aof - Pongsak on Social Welfare of Oak - Smit Aryasakul Thailand, under Royal Patronage of H.M. the King

Presenter for campaign against Drugs 2009, under the theme Ruj – Supparuj Office of the Narcotics “Teh…Dee…Mai Torng Mee Ya Sep Tid” (‘It’s cool not to be Techatanon Control Board addicted to drugs’) and a representative of Communities under the “5 Rua Lom Thai…Pon Pai Ya Sep Tid” Campaign

Presenters promoting Mahidol Flags for Mahidol Day Oak – Smit Aryasakul Siriraj Foundation Ikkyu – Peeraphol Senakhun Ice – Saranyu Winaipanich

022 Presenter Artist Organization

Presenters promoting Dok kaew Kallaya and Disabled People’s Mike Piromporn The National Council Day 2009 Phee Saded on Social Welfare of Earn the Star Thailand, under Royal Praewa Patcharee Patronage of H.M. the King

Lead Presenter in a campaign to reduce infectious respiratory Nicole Theriault Department of Disease diseases Control, Ministry of Public Health

Lead Presenter for campaign “Nai lae nork Mor Mai Khor Iew Ice – Saranyu Thai Health Lao” (‘No drinking on or off campus’) Winaipanich Promotion Foundation

Lead Presenters of “Suk Lerk Lao” (‘The Pleasures of Giving Tai – Orathai Thai Health up Alcohol’) under the “Ngod Lao Khao Punsa” (‘Abstain from Pai – Pongsatorn Promotion Foundation drinking during Buddhist Lent’) campaign

Presenter for “Khon Thai Rak Sai Song” (‘Thai People Love Tik Shiro – Manasawin Electricity Generating Transmission Lines’) Nantasen Authority of Thailand

Presenter for “Khae Kayab = Rerm Ork Kumlang Gai” Bie – Sukrit Wisetkaew Thai Health (‘Just Move = Exercise’) Promotion Foundation

Presenter for “World No Tobacco Day” Ruj – Supparuj Ministry of Techatanon Public Health

Lead Artist on “Prevent AIDS Infection” Singto – Singharat AIDS Research Center, on World AIDS Day 2009 Chanpakdee Thai Red Cross Society R – Anatpol Sirichumsang Ikkyu – Peeraphol Senakhun

Music Ambassadors to strengthen Thai-Chinese relations Nat – Myria Bangkok Metropolitan during Chinese New Year in Yaowaraj Nicole Theriault Authority B.O.Y.

Music Ambassadors for Thai-Chinese Relations under the Rose – Sirintip National Broadcasting “Thai-Zhong Yo Yee Dontree Hang Mitraparp” Pop – Calories Blah Blah Services of Thailand, Public Relations Department

Presenters promoting Poppies on Veterans Day Bie – Sukrit Wisetkaew Welfare Foundation for Ruj – Supparuj Veterans and Families Techananon

Lead Artists in the “Deum Laew Kub Took Jub Nae” (Drinkers B.O.Y. Accident Network who drive will be arrested) to reduce driving accidents during Bureau, Thai Health holidays Promotion Foundation and the Royal Thai Police

Lead Artists in raising funds for the Ananda Mahidol B.O.Y. Faculty of Medicine, Foundation which assists impoverished patients Chin – Chinnawut Chulalongkorn Indracusin University Chacha – Rita Ramnarong

Presenter for “365 Days of Being Healthy” campaign to Taechin Chayut Ministry of promote the necessity of controlling and preventing non- Public Health infectious chronic diseases Leading Artists for “Sai Jai Larng Meu Harng Glai Khai Wad Yai R – Anatpol Thai Health Promotion Sai Pun Mai” (Wash your hands to prevent Influenza H1N1) Sirichumsang Foundation together Kal – Kalorin with The Secretariat Nemayothin of the House of Dew – Pongsatorn Representatives Supinyo

023 FINANCIAL HIGHLIGHTS GMM GRAMMY PLC.

Financial Highlights GMM Grammy Plc. and Subsidiaries

(Unit:Million Baht) CONSOLIDATED 2009 2008 2007

Total revenues 8,124 7,806 7,286 Revenue from sales and service 7,878 7,546 7,008 Total costs 4,796 4,234 4,012 Gross profit 3,082 3,312 2,996 Earnings before minority interest 541 828 594 Net earnings for the year 511 705 502

Dividend paid* 461 639 319

Total assets 6,926 6,813 6,719 Total liabilities 3,440 3,138 3,071 Minority interest 501 707 663 Equity attributable to the Company’s shareholders 2,984 2,968 2,985

Number of ordinary shares (Million) 527.4 490.0 490.0 Net earning per share (Baht) 0.97 1.44 1.02 Dividend paid per share (Baht) 0.87 1.25 0.65 Book value per share (Baht) 5.63 6.06 6.09 Net profit margins 6% 9% 7% Return on equity 17% 24% 17% Return on assets 7% 10% 8%

Dividends paid out at 0.65 baht per share consists of: The interim dividend payment for the first half-year operational result of 2007 was 0.13 baht per share, according to the resolution at the Board of Directors meeting 4/2007 on 10 August 2007. Dividend payment for the second half-year operational result of 2007 was 0.52 baht per share, as

2007 2007 determined at the 2008 Annual General Meeting of Shareholders held on 23 April 2008.

Dividends paid out at 1.25 baht per share consists of: The interim dividend payment for the first half-year operational result of 2008 was 0.60 baht per share, according to the resolution at the Board of Directors meeting 4/2008 on 13 August 2008. Dividend payment for the second half-year operational result of 2008 was 0.65 baht per share, as

2008 determined at the 2009 Annual General Meeting of Shareholders held on 27 April 2009.

Dividends paid out of 0.87 baht per share* in 2009 consists of: The interim dividend payment for the first half-year operational result of 2008 was 0.55 baht per share, according to the resolution at the Board of Directors meeting 4/2009 on 13 August 2009. Dividend payment for the second half-year operational result of 2009 was 0.32 baht per share*, as proposed at the Board of Directors meeting held on 26 February 2010. 2009

Note: * Dividends paid during the remaining 6 months of 2009 of 0.32 baht per share has to be approved by the 2010 Annual General Meeting of Shareholders which will be held on 26 April 2010, before this payment can be approved for disbursal. 024 REVENUE STRUCTURE 2008-2009

REVENUE STRUCTURE 2008-2009 2008 2009 Audio Products and Copyrights Audio Products and Copyrights 27% 22%

Digital Digital 8% 11%

Concert Concert 5% 4%

Artist Management Artist Management 7% 7%

Movies Movies 3% 4%

Television Television 19% 20%

Satellite Television Satellite Television 0% 1%

Radio Radio 9% 7%

Event Advisor and Organizer and Event Advisor and Organizer and Provision of Event Equipment Provision of Event Equipment 15% 17%

Publishing Publishing 3% 2%

Other Other 4% 4%

Total Total 100% 100%

025 GENERAL INFORMATION

GENERAL INFORMATION

Company Name : GMM Grammy Pcl (“The Company”) Business : Entertainment and media Head Office : 50 GMM Grammy Place, Sukhumvit 21 Road (Asoke), Klongtoey Nua, Wattana, Bangkok 10110 Company Registration : PCL. 0107537000955 Company Homepage : www.gmmgrammy.com Telephone : 0-2669-9000 Facsimile : 0-2669-9009

Business Description The Company’s businesses can be divided into four main categories according to each industry and functions: 1. Music Business and related businesses Operates under the Total Music Business Model which consists of music production and copyrights, digital content business, show business, and artist management. • Music Production and Copyrights - Physical Products include tapes, CDs, and VCDs that are sold via Modern Trade outlets (superstores and discount stores) and traditional trade channels (trading companies and retailers) nationwide. - Rights Management Business is collecting copyrights from operators who use the Company’s music for commercial purposes and collecting copyrights from karaoke venues, as well as collecting copyrights and management fees from karaoke booths. • Digital Business is the digitalization of music content for distribution through mobile telephone networks, the internet, the Company’s online retailer (www.gmember.com) and external operators such as iTunes. The Company provides various mobile downloading services for ringtones, ringback tones, full song downloads, and even complete music videos (full MVs) via monthly subscription services and *1234 Music Cupid service which sends music to members’ friends. Moreover, the www.gmember.com website is a home for all types of music, news, song downloads, and various activities. • Show Business is the business of creating, hiring and producing productions such as concerts and theatrical productions. • Artist Management Business handles the selection and development of new artists, which includes managing them and sourcing music and non-music assignments for the Company’s artists. 2. Media Business comprises - Radio Business, which produces and hosts F.M. radio programs. At the end of 2009, the Company has 4 music radio stations - Television Business The Company rents airtime from Channels 3, 5, 7, 9, NBT and TV THAI to produce television programs and provide production services. In 2009, the Company produced 33 television programs, averaging 45 hours 35 minutes airtime per week - Publishing Business is the production and distribution of Image fashion magazine, two women’s magazines, Madame Figaro, and Her World, Maxim for men, and an entertainment publication, In Magazine, and pocket books in various popular genres - Full-service events creation and management business runs through the entire spectrum from proposing ideas to organizing events, sourcing contractors, and coordinating with all related parties to ensure that results achieve clients’ goals. Index Event Agency Pcl and its subsidiaries monitor and operate this line of business. - Broadcasting (Satellite Television) is the business of producing entertainment content for airing on 4 satellite television channels: Fan TV, Bang Channel, Green Channel, and ACTS Channel, as well as through the Money Channel in collaboration with the Stock Exchange of Thailand. 3. Movie Business Movie Business produces featured films for screening in movie theatres. 4. Other Businesses Other Businesses include fitness club service, call center service, and education related businesses like Mifah Music Academy.

026 Revenue Structure of the Group 2009 2008 2007 Product / Service Operated by Million Baht % Million Baht % Million Baht %

Sales of audio products GMM Grammy Plc. 1,394.7 17.2 1,700.8 21.8 1,926.8 26.4 Other subsidiaries (0.1) 0.0 0.0 0.0 6.1 0.1

Total sales of audio products 1,394.6 17.2 1,700.8 21.8 1,932.9 26.5

Revenue from copyrights Revenue of copyrights from Digital Business GMM grammy Plc. 860.3 10.6 529.0 6.8 176.1 2.4 GMM Digital Domain Co., Ltd. 23.1 0.3 59.6 0.8 169.6 2.3 Digital Arms Co., Ltd. 6.8 0.1 20.4 0.3 73.0 1.0 Revenue from other copyrights GMM Grammy Plc. 19.6 0.2 44.4 0.6 14.0 0.2 GMM Music Publishing International Co., Ltd. 187.3 2.3 189.5 2.4 179.0 2.5 Clean Karaoke Co., Ltd. 148.9 1.8 164.7 2.1 155.2 2.1 GMM Tai Hub Co., Ltd 11.6 0.1 0.4 0.0 0.0 0.0 Other Subsidiaries 10.5 0.1 23.5 0.3 0.1 0.0

Total revenue from other copyrights 1,268.1 15.6 1,031.6 13.2 768.0 10.5

Total sales of audio products and copyrights 2,662.7 32.8 2,732.4 35.0 2,700.9 37.1

Revenue from production of concerts GMM Grammy Plc. 214.1 2.6 305.5 3.9 232.4 3.2 GMM Media Plc. 58.0 0.7 44.1 0.6 57.0 0.8 Other Subsidiaries 31.4 0.4 28.4 0.4 1.9 0.0

Total revenue from production of concerts 303.6 3.7 378.0 4.8 291.3 4.0

Artists Management income GMM Grammy Plc. 566.0 7.0 551.2 7.1 538.1 7.4 Exact Co., Ltd. 31.6 0.4 18.4 0.2 0.0 0.0 Sawasdee Thaweesuk Co.,Ltd. 6.1 0.1 0.0 0.0 0.0 0.0 Other Subsidiaries 1.7 0.0 7.8 0.1 5.4 0.1

Total artist management income 605.4 7.5 577.4 7.4 543.5 7.5

Revenue from production of motion pictures and advertising films Upper Cut Co., Ltd. 0.0 0.0 0.1 0.0 67.3 0.9 GMM Tai Hub Co., Ltd. 328.6 4.0 217.7 2.8 327.5 4.5 Joint Venture Dek Hor 0.0 0.0 0.1 0.0 4.9 0.1 Other Subsidiaries 0.1 0.0 2.5 0.0 2.0 0.0

Total revenue from production of motion 328.7 4.0 220.4 2.8 401.7 5.5 pictures and advertising films

Revenue from production of television programs GMM Grammy Plc. 0.2 0.0 22.2 0.3 56.7 0.8 Exact Co.,Ltd. 1,049.5 12.9 802.8 10.3 644.5 8.8 GMM TV Co., Ltd. 392.7 4.8 444.0 5.7 360.2 4.9 Deetalk Co., Ltd. 126.1 1.6 123.4 1.6 124.2 1.7 GMM Tai Hub Co., Ltd. 35.2 0.4 8.4 0.1 0.0 0.0 GMM Media Plc. 43.7 0.5 47.7 0.6 0.0 0.0

Total revenue from production of television 1,647.4 20.3 1,448.5 18.6 1,185.6 16.3 programs

Revenue from production of satellite television programs GMM Grammy Plc. 43.8 0.5 2.0 0.0 0.0 0.0 Exact Co.,Ltd. 22.6 0.3 0.0 0.0 0.0 0.0 GMM TV Co., Ltd. 27.0 0.3 0.0 0.0 0.0 0.0 GMM Media Plc. 23.3 0.3 0.0 0.0 0.0 0.0

Total revenue from production of satellite 116.7 1.4 2.0 0.0 0.0 0.0 television programs

Revenue from production of radio programs GMM Media Plc. 579.6 7.1 666.5 8.5 612.7 8.4 Other Subsidiaries 0.0 0.0 2.6 0.0 0.0 0.0

Total revenue from production of radio 579.6 7.1 669.2 8.6 612.7 8.4 programs

027 GENERAL INFORMATION

Revenue Structure of the Group 2009 2008 2007 Product / Service Operated by Million Baht % Million Baht % Million Baht %

Revenue from event advisor and organizer Index Event Agency Plc. 662.1 8.2 697.6 8.9 612.5 8.4 Media Vision (1994) Co., Ltd. 98.1 1.2 117.6 1.5 120.6 1.7 Event Solutions Co., Ltd. 53.4 0.7 39.1 0.5 36.0 0.5 Inspire Event Co., Ltd. 0.0 0.0 0.0 0.0 12.1 0.2 Tresbien Co., Ltd. 5.7 0.1 4.4 0.1 10.6 0.1 G Communications Co., Ltd. 8.0 0.1 11.3 0.1 17.0 0.2 Inspire Image Co., Ltd. 60.6 0.7 49.0 0.6 28.7 0.4 D 63 Co.,Ltd. 95.9 1.2 72.3 0.9 0.0 0.0 I Think Ad Co.,Ltd. 43.5 0.5 44.7 0.6 0.9 0.0 Joint Venture ID2 117.9 1.5 0.0 0.0 0.0 0.0 3-RD Co.,Ltd. 91.4 1.1 88.2 1.1 43.7 0.6 GMM Media Plc. 147.0 1.8 42.2 0.5 42.1 0.6 Other Subsidiaries 4.5 0.1 13.3 0.2 1.8 0.0

Total revenue from event advisor and organizer 1,388.0 17.1 1,179.7 15.1 926.0 12.7

Revenue from advertising in publishing media GMM Grammy Plc. 3.3 0.0 36.6 0.5 32.7 0.4 Image Publishing Co., Ltd. 51.6 0.6 71.7 0.9 91.2 1.3 GMM Inter Publishing Co., Ltd. 11.0 0.1 13.3 0.2 17.2 0.2 GMM Times Co., Ltd. 18.9 0.2 22.5 0.3 26.3 0.4 In Publishing Co., Ltd. 16.6 0.2 19.9 0.3 12.3 0.2 Other Subsidiaries 3.7 0.0 1.4 0.0 0.0 0.0

Total revenue from advertising in 105.1 1.3 165.5 2.1 179.7 2.5 publishing media

Sales of books, teaching aids and magazines Image Publishing Co., Ltd. 5.2 0.1 6.3 0.1 10.9 0.1 GMM Times Co., Ltd. 9.9 0.1 12.6 0.2 12.9 0.2 Bliss Publishing Co., Ltd. 49.7 0.6 47.2 0.6 34.7 0.5 In Publishing Co., Ltd. 17.9 0.2 19.6 0.3 18.0 0.2 Other Subsidiaries 1.6 0.0 2.6 0.0 4.8 0.1

Total sales of books, teaching aids and 84.3 1.0 88.4 1.1 81.3 1.1 magazines

Total revenue from advertising and sales of 189.3 2.3 253.8 3.3 261.0 3.6 books, teaching aids and magazines

Revenue from studio service GMM grammy Plc. 0.0 0.0 9.0 0.1 8.3 0.1 GMM Studio Co., Ltd. 3.5 0.0 3.7 0.0 5.6 0.1 Other Subsidiaries 0.0 0.0 0.0 0.0 0.1 0.0

Total revenue from studio service 3.5 0.0 12.7 0.2 14.0 0.2

Revenue from production and service GMM grammy Plc. 19.7 0.2 4.4 0.1 39.6 0.5 GMM Inter Publishing Co., Ltd. 10.9 0.1 6.9 0.1 10.6 0.1 Tifa Co., Ltd. 0.0 0.0 37.3 0.5 0.4 0.0 Other Subsidiaries 19.8 0.2 8.2 0.1 12.9 0.2

Total revenue from production and service 50.4 0.6 56.8 0.7 63.5 0.9

Management fee and consultant fee income GMM grammy Plc. 0.0 0.0 11.6 0.1 0.2 0.0 Exact Co., Ltd. 2.8 0.0 2.8 0.0 3.0 0.0 Other Subsidiaries (0.5) 0.0 0.3 0.0 4.1 0.1

Total management fee and consultant fee 2.3 0.0 14.7 0.2 7.3 0.1 income

Interest income 18.7 0.2 33.7 0.4 39.2 0.5 Dividend received 48.5 0.6 49.3 0.6 51.6 0.7 Other income 179.5 2.2 177.5 2.3 187.8 2.6

Total revenue 8,124.3 100.0 7,806.1 100.0 7,286.2 100.0

028 GENERAL INFORMATION

Music Business and Music Related Businesses

• Music Business and Copyrights In 2009, the Company produced 262 music albums to meet the needs of every consumer target group, namely pop, rock, alternative, country/‘songs for life’, R & B, soul and compilations of top hits. The trading department is responsible for sales and distribution to retailers and wholesalers. Products are distributed via modern trade channels (superstores and discount stores), traditional trade channels (traders and retailers) throughout the country, and via the Company’s own retail store, Imagine. As of December 2009, there are 161 Imagine retail stores. The Company manages and collects copyright fees from food operators, restaurants, radio operators, karaoke shops, and karaoke booths or other operators who use the Company’s music for commercial purposes. • Digital Content Business In 2009, digital business or the consumption of music via mobile telephone and internet networks, is the fastest growing channel in the music industry. The Company offers download services on an ‘a la carte’ (individual song) basis and with monthly subscriptions to leading mobile telephone network operators. Moreover, music content is constantly developed to match technological innovations, to allow downloads through more channels such as the internet and iPods. • Artist Management Business The Company has a policy of training and developing artists so they can sing, act and dance in order to entertain audiences at music and non-musical venues, which will increase revenue channels for the artists, both in the form of concerts, performances in pubs and bars, as well as seeking employment opportunities as product presenters. In 2009, many artists were chosen as product presenters, including Bie the Star, Golf Mike and various rock groups.

• ShowBiz Business This business uses considerable music and artist resources and extends the Company’s business by arranging shows and producing concerts in different formats to promote albums and theme concerts. In 2009, the Company organized 24 concerts. The larger concerts included “Fancy Fan Son Concert” by Brid Thongchai, “Love Mak-My Concerts” by Bie the Star, and Loso’s “12th Anniversary Concert”. Besides generating sales from tickets to the shows and financial support from sponsors, the business also sells VCD and DVD recordings of the performances.

029 Marketing and Competition Competitive Strategies • Produce high quality work that encompasses every target group The Company emphasises producing quality music to cover every target group, primarily divided into five music genres, handled by teams of top Thai music professionals in those fields. All these elements together have enabled the Company’s music to continue retaining its market share in Thailand for every target group. • Full-Service Entertainment Business The Company’s structure presently operates a full-service entertainment business, distributing music, movies and media business such as radio, television and publishing, as well as satellite television and digital business which partners with leading mobile telephone networks to create the latest innovations for downloading new services, such as unlimited music downloads for monthly subscribers. Creating this type of full-service business structure requires considerable lead time and ample funding. • Effective Distribution and Sales Channels for Physical Products (CDs, VCDs and DVDs) and Digital Products Physical Products (CDs, VCDs and DVDs) The Company has expanded its Imagine retail stores across a wider area, making it more convenient for consumers. Moreover, an effective software system is used to manage product sales and distribution. In 2009, the Company employed the Direct Response Television strategy (DRTV) which is the placement of product advertisements of specific products that target viewers of certain programs on GMM Channels to stimulate the purchase of the Company’s products. It is hoped that this will increase sales through a new channel, “Imagine Direct”, to sell more physical music. This includes CDs, VCDs and DVDs of older music and films which are harder to find through newer channels, or to purchase new products before they are released in the market through GMM Channel programs. All purchases will be delivered to the consumers’ homes, to satisfy the needs of those who do not have the time to personally look for the products. Digital Products The Company has increased its digital product offering to unlimited downloads of new and old music for monthly subscribers via mobile telephone networks, according to individual providers’ packages. This service was warmly received by consumers. In addition, the Company and its subsidiaries have begun promoting digital services more widely through free television and cable television, radio programs, publications, and even in movies. • Own copyrights to songs and manage artists who can create additional market value in the future Presently, the Company has a cache of nearly 20,000 songs in its Music Library and manages more than 300 artists. All the music has been stored in master tapes and digital formats, which are easily retrieved and created into new forms such as compilation of popular songs or producing covers which is the resetting the melody using original lyrics. Besides producing new songs, artists can perform concerts, take on various assignments and serve as product presenters and actors, which are important means of generating revenue for the Company. Characteristics of clients and target clients Two types of clients purchase music in the form of tapes, CDs and VCDs: modern trade channels (superstores and discount stores) and traditional trade channels (traders and retailers). Clients of copyright collectors are divided into three categories: Karaoke shops, restaurants and other operators like radio stations, airlines and department stores. Digital music clients tend to be more varied, as they include both male and female music lovers ranging from students of all ages to working professionals. Those who use the downloading services are adept with GPRS and WAP systems on mobile telephones. This target group is interested in the latest technological innovations such as broadband and 3G connections. The Company is well aware of the importance of keeping up to date with trends in order to provide content and services to support this group, faster and easier. Sales and Distribution Channels Music products such as tapes, CDs and VCDs are distributed via modern trade channels (superstores and discount stores) as well as traditional trade channels (traders and retailers) nationwide. Digital music services available for downloading via mobile telephones include: ringtones, ringback tones, full songs and music videos (full MVs) through monthly subscriptions and through the *1234 Music Cupid service which delivers content to subscribers’ friends. Additionally, the Company’s www.gmember.com website offers information about music and news and activities of every artist. Competitive Environment The Company has a structure that encompasses a complete service music business that also includes media and movie businesses. This means that there are no direct competitors, but indirect competitors according to the business lines it operates. In 2009, the music industry grew through the expansion of its digital content sales, while sales of music CDs and VCDs reduced due to changes in consumer preferences which have shifted to downloading music. Market share and Size of competitors The Thai music market can be divided into two major categories, namely Thai music and international music, which respectively corner 90% and 10% market share. Thai music is further subdivided into two genres, namely contemporary (Thai sakol) and country music (luk thung). Contemporary music is constantly adjusted to cater to consumers’ changing preferences while country music focuses on improving the content and adapting the music styles to the lifestyles of its target audience. The Company’s market share in the Thai music market is approximately 70%. It is a leader in both these Thai music categories.

030 GENERAL INFORMATION

Although there are several competitors in the market, the Company has only one direct competitor in terms of sharing its target consumers. Industry trends – environment and In 2010, competition is expected to continue in the same way as it did over the past year, in that the digital business has positive growth prospects from growing consumer preferences for this channel, especially since more people listen to music via their mobile telephones. Key strategies in the digital music business include increasing service formats, activities and to support the business through creative marketing. It is expected that its ‘Buffet Download’ service which permits unlimited song downloads will remain its top service option in 2010. The Company will cooperate with all mobile telephone networks, regardless of whether it is AIS, DTAC, True Move, Hutch, TOT or CAT, in order to increase its market share, and by simultaneously rolling out the services nationwide at strategic points. It is expected that this system can also be transferred to networks abroad, in countries such as Laos. The Company has prepared itself to capture market share on all types of technological innovations, especially through the 3G network which can accommodate a greater variety of content and services enabled by high speed downloads. At the same time, physical music products will continue to slowly shrink in accordance with world trends at the rate of 10 – 15%. Consequently, the company has increasingly catered to customers who demand better sound quality and are true fans of the artists by designing each album as a collector’s item. In terms of international business, the Company has increased its sales channels in the following ways: 1. Exporting music in the form of CDs, VCDs and DVDs to countries like Australia. 2. The Company sells its digital content through two channels: iTunes and through major telecommunication operators in various countries, such as using Chunghwa in Taiwan. 3. The company handles its rights management abroad by selling copyrights to the melody which is then set to foreign lyrics. 4. Artist Management / Show business is jointly managed by the Company’s counterparts and representative offices abroad which are officially appointed to handle the hiring of Thai artists to perform legally abroad. Representatives have been appointed in the US and Australia, and there are plans to organize concerts in those countries, such as “Bird in USA” in May 2010.

Media Business The overall advertising budget across all media in 2009 increased 0.8% from 89,488 million baht in 2008 to 90,217 million baht. This is partly due to the revival in media advertising during the second half of the year after witnessing a 5% drop off during the first half due to clients that were slower in using up their budgets, and fewer marketing campaigns and launches. After the overall economy began to exhibit signs of picking up, and political violence abated, clients started to spend their advertising budgets, which led to an upsurge during the second half of the year. New media expanded with the internet-based medium soaring 51% - the most of all media. Television advertising, the mainstay of this industry grew by 4%, and remains most clients’ preferred medium after the economic recovery. Radio and newspaper related spending dropped sharply by 11% and 13% 100,000 respectively of total advertisement spending. 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 Total advertising spending across all media as at 31 December 2009 revealed that television advertisements still remain the most popular medium, attracting 58.68% of the market share. Newspapers came in second place with 15.68% followed by radio at 6.83%, magazines at 5.79%, movie theatres brought in 5.48% and open air media and others contributed 7.54%. (Source: Nielsen Media Research (Thailand) Ltd.) 2009 6% 1% 5%

Media Market Share of Advertising Expenditures2008 in 2009 100,000 Total advertising6% expenditures in 2009 amounted10,000 20,000 to 90,21730,000 million40,000 50,000 Baht60,000 70,000 80,000 90,000 2007 Value of various media advertising expenditure

(million Baht) 100,000 2006 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 16% 2009 6% 1% 5% 59% 2005 7% 2008 6% 2004 2009 6% 1% 5% 2007 2003 2008 6% 2006 16% 2002 2007 59% 2005 16% 2001 2006 7% 2004 59%2000 2005 7% 2003 2004 2002 2003 2001 2002 TV Radio Newspaper Magazine 2000 2001 Cinema Outdoor Others 2000

TV Radio Newspaper Magazine 031 TV Radio Newspaper Magazine Cinema Outdoor Others Cinema Outdoor Others GENERAL INFORMATION

The Group has five media business lines, radio, television, satellite television, publishing and event creative management with details as follows:

Radio Business

Producing radio programs that will be broadcasted through a station requires participating in bidding for airtime for commercial purposes from various FM radio stations. In 2009, the Group has four radio program segments, as follows:

Radio Station Day/Airtime/ Type of Program Target Group Concession Network Coverage

F.M. 106.5 MHz. 24 Hours daily/Bangkok A program that campaigns for Working professionals, The National Green Wave Metropolitan, Petchburi the environment. The first and both male and female Telecommunications and Prachuab Khiri Khan only program in Thailand that airs aged 30 and up who Commission easy listening music program in are financially stable all styles and from all eras, and and possess high remains the longest standing top consumption power. program. Listeners keep up –to- date and are creative, thoughtful, considerate, who cares about the environment, as well as things happening around them.

F.M. 94.0 MHz. 24 Hours daily in Top ranked entertainment Teenagers and working The Royal Thai Army EFM Bangkok Metropolitan, business-oriented radio station professionals aged Radio Station Ang Thong, and the only station of its kind between 18 – 35 Kanchanaburi, some in Thailand. It is the “Talk of interested in modern parts of Chon Buri and the Town” in being the fastest things, and follow the Ratchaburi provider of in-depth reports. latest trends in all forms of entertainment.

F.M. 91.5 MHz. 24 hours daily / Bangkok A top-rated radio program for Male and female Broadcast Armor Hot FM 1 Metropolitan, Ayutthaya, trendy teenagers and the new teenagers aged Radio Station Saraburi, Chon Buri generation who want something between 15-25 new and novel.

F.M. 89.0 MHz. 24 hours daily / Bangkok Offering the trendiest, most Trendy young Broadcast Armor Chill FM 2 Metropolitan, Chon Buri varied, and newest selection working Radio Station of Thai and international easy professionals, aged listening music in town. between 24 and 34 who enjoy listening to trendy music.

1 The name changed from Hot Wave 91.5 FM to Hot FM 91.5 on 1 January 2009., 2 The program changed from 89 Banana FM to CHill FM 89 on 1 january 2009

032 Moreover, we also have a multimedia content entertainment available on the internet which can be downloaded and updated from Atime Media, which offers Live Radio on four channels via the internet and watch the DJs in action through the web cam. Moreover, communities have webboards and conduct live chats online easily and quickly. This is supplemented by seven Atime media websites chock full of additional information. www.atimemedia.com : The Station of Happiness…For every music lovers’ moods www.chill89.fm : Easy listening music…in style www.hot915.fm : The newest, hottest hits that you can listen to every day www.efm.fm : The First and Only Top Entertainment Channel in Thailand www.greenwave.fm : Good songs, good vibes www.green-channel.com : Beautiful music 24 hours daily. www.atimetraveller.com : Travel in the way that you want to, select the travel schedule that you prefer at any time. In 2010, we created a new Social Network online to assemble people who enjoy and love music in one place – the ATime Family Network – where listeners can discuss and post comments in real-time to their DJs, and to get the latest updates on DJs more quickly. There is also additional space allowing friends in the community to chat with each other. Market Conditions In 2009, the radio industry was as intense as 2008, in terms of operators competing with each other to win market share, target listeners and radio media advertisement buyers. The latter especially was a tough battle due to the changes in consumer behaviour. Previously, clients had purchased long-term annual advertisement contracts. Now, they prefer purchasing short- term contracts ranging from six months, three months, and even one month per quarter, or on a monthly basis. All business operators have had to employ all types of marketing tactics to win the hearts of its clients and listeners. There were relatively few changes in operators compared to previous years, with only one new station emerging at the beginning of the year and the closure of one station at the end of 2009. Competitors Competitors’ programs that have similar target listeners to the Company’s programs are:

Target Audience The Group’s Competitors Radio Stations

Working professionals, both males and F.M. 106.5 MHz. F.M. 93.0 MHz. Cool Fahrenheit females, from the age of 35 and up Green Wave F.M. 103.5 MHz. FM ONE

Teenagers and working professionals aged F.M. 94.0 MHz. F.M. 93.0 MHz. Cool Fahrenheit between 18-30 who are interested in modern EFM F.M. 95.5 MHz. Virgin Hitz things, and follow the latest trends in the F.M. 97.5 MHz. SEED entertainment business.

Male and female teenagers aged between F.M. 91.5 MHz. F.M. 103.0 MHz. FM Max3 15-24 Hot FM F.M. 97.5 MHz. SEED FM F.M. 95.5 MHz. Virgin Hitz

Male and female working professionals, aged F.M. 89.0 MHz. F.M. 103.5 MHz. FM ONE between 24-34 Chill FM F.M. 93.0 MHz. Cool Fahrenheit

3 FM Max moved from F.M. 94.5 MHz. to F.M. 103.0 MHz. since 1 January 2009 and closed itself at the end of this year. Advertising Market Share in Radio According to Nielsen Media Research (Thailand) Ltd., total media advertising in 2009 increased by 0.81% from 89,488 million baht to 90,217 million baht, while public relations via the radio shrank, and continue to show signs of shrinking further both in terms of the value of advertisements and as a share of total media spending. The primary reasons are product owners slashing their advertisement budgets, terminating activities sponsorship on radio programs during the economic downturn, as well as switching over to advertise on digital media which is cheaper and growing in popularity. Nevertheless, the radio industry still manages to grow because it is the most effective media for Bangkokians. It is the medium that reaches the greatest number of target listeners and is relatively affordable compared to other media. Thus, the radio industry remains the third favorite medium after television and newspapers. A study and comparison by Nielsen Research Media of various media advertising, as of 31 December 2009, that radio advertising takes up 6.83% market share, falling 11.1% from 6,933 million baht to 6,165 million baht.

033 Value of Radio Advertising Expenditure (Million Baht)

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

2009 2008 2007 2006 2005 2004 2003 2002 2001

Source: Nielsen Media Research (Thailand) Ltd.

Based on the preceding graph, it is clear that the radio industry was fairly tumultuous over the past decade. The period from 2001 to 2004 was one of continued growth until it slowed down in 2005 before turning up a little in 2006. The industry remained volatile, slightly seesawing in opposite directions every year, to a slight increase in 2008 and dip in 2009. Notwithstanding these changes, operators competed to create new formats to please advertising customers with straitened budgets, by providing quality services that satisfy these customers and deliver value for money. As a business operator that produces radio programs, it is necessary for the Company to focus on producing great programs that retain their ratings amongst its competitors in order to attract advertising clients who, having the upper hand, will only select highly rated programs that offer the best value for money in deciding which programs they want to advertise. Consequently, this is a market that is exceedingly difficult for new operators to enter, and to remain operational in the long run. Industry and Competition Trends Although competition will continue to intensify as witnessed in the past, the basis for competing today has changed from bidding for airwave concessions at yearend when contracts are slated for renewal, to competing for market share. As a result of the domestic and global economic slowdown, most customers have to be more careful with their advertising budgets, and be more selective in choosing operators whom they believe can best reach their target consumers. Operators have to seek strategies that enable them to create strong brand for each station to retain their existing audience and attract new listeners by emphasizing attractive marketing activities. Moreover, radio business operators have to develop and manage their operations to the highest capacity and be nimble in adjusting its strategies to handle various situations, in order to maintain their market share.

Television Business

Television business encompasses producing programs and being commissioned to produce programs aired on the following channels:

034 GENERAL INFORMATION

Station Operator Licence

Channel 3 Bangkok Entertainment Co., Ltd. Concession

Channel 5 The Thai Royal Army Owner

Channel 7 Bangkok Broadcasting & Concession Television Co., Ltd.

Channel 9 MCOT Public Company Limited Owner

TV Thai Thai Public Broadcasting Service Proceeding under the Thai Public Broadcasting Service Act B.E. 2551 (2008)

Types of Television Programs in the Group in 2009 GAME SHOWS VARIETY SHOWS 9% 33%

37% DRAMAS 21% AND SITCOMS MUSIC

In 2009, the Group aired 33 television programs which can be divided into various types as follows:

Program Type Program Channel Day/Airtime Producer

Music OIC Channel 5 Monday – Friday 12.30-13.10 GMM TV Five Live Channel 5 Monday – Friday 00.15-01.05 GMM TV Kleun Sag Kleun Sab Channel 5 Monday – Friday 01.10 - 02.00 GMM TV Kleun Sag Kleun Sab Soodsupda Channel 5 Saturday – Sunday 01.55 – 02.20 GMM TV e-Mouth Channel 7 Friday 00.25-01.25 GMM TV Hello Wan Yood Channel 7 Public Holidays 10.00 -11.00 GMM TV The Star 5 Channel 9 Saturday – Sunday 21.00 – 23.30 Exact

Dramas Pen Tor Channel 3 Thursday 23.00 – 24.00 Scenario Heng Heng Heng Channel 3 Saturday 10.15-11.00 Exact Pu Korng Chao Saneh Channel 3 Sunday 10.15 – 11.00 Scenario Prime Time Dramas Channel 5 Monday – Thursday 20.25-21.25 Exact & Scenario Zen…Seu Rak Seu Winyarn Channel 5 Friday 20.25 – 21.25 Exact Drama reruns Channel 5 Monday – Friday 10.45 - 11.35 Exact & Scenario Bang Rak Soi 9 Channel 9 Saturday 18.00 – 19.00 Exact Baan Nee Mee Rak Channel 9 Sunday 18.00 – 19.00 Scenario Nut Gub Nat Channel 9 Sunday 17.00 – 18.00 Scenario Ubat Rak Kharm Khorb Fah 2 Channel 9 Saturday – Sunday 20.40 – 21.40 GMM TV Neua Khoo Pratu Tud Pai Channel 9 Saturday 14.00 – 15.00 GTH Sai Lub Delivery Channel 9 Saturday – Sunday 20.40 – 21.30 GTH

Game Shows Game Wad Duang Channel 5 Saturday 12.50-13.40 GMM TV Anubarn Champion Channel 7 Wednesday 16.30 – 17.00 GMM TV Suan Sat Maha Sanuk TV Thai Sunday 07.00 – 07.45 GMM TV

Variety Shows Rueang Khorng Rueang Channel 5 Monday 21.25 – 22.00 Exact Saam Noom Saam Moom Tonight Channel 5 Wednesday 22.15 – 23.15 Exact & Scenario Dara Story Channel 5 Saturday – Sunday 17.30 - 18.00 Scenario Wake Club Channel 5 Sunday 10.55 – 11.45 GMM TV Roht Rong Rian Channel 5 Sunday 13.00 – 13.55 GMM TV Dhamma Delivery Channel 5 Public Holidays 12.30–13.20 GMM TV Someone Ahkantuka Channel 5 Saturday 14.50 – 15.40 GMM TV Tee Nee Morchit Channel 7 Sunday 22.25 -23.55 Dee Talk Oot Talud Joot Fun Channel 9 Saturday 10.00-10.45 GMM TV Khon Song Sai 9 Channel 9 Sunday 14.00 – 15.00 GMM TV Ta Sawang Channel 9 Wednesday 22.00 -24.00 Dee Talk

035 GENERAL INFORMATION

Program Details Program Type Format Target Audience Number of Programs

Music Music programs featuring various artists’ music videos and Teenagers aged 7 concerts helps promote and publicize the Group’s latest 15 years and up/ music releases. The Company created new programs high school and combining entertainment with reality show to ride the college students/ wave that the market and the Company’s target consumers housewives who enjoy the novelty of observing the talents of program participants, such as in singing contests. Dramas This type of program is one that the Group is most adept at The entire family, 12 producing and continues to offer its programs to television suitable for all stations. During the past year, the Group’s dramas that genders and ages were aired received positive audience ratings, and were among the leaders in this genre, in terms of prime time soap operas and sit-coms. The Group is considered the leader in producing sit-coms and continues to win the highest ratings, in addition to their acclaim for constructive dramas that target teenage audiences. Game Shows These programs remain popular among viewers because The entire family, 3 they combine fun, knowledge and entertainment in a suitable for all complete package. Moreover, as the shows are open to genders and ages participation from the general public, the game shows differ from competing programs. With formats that are distinct, lively, and exciting, and a key selling points include audience and celebrity participation, elements that improve society and uphold cultural traditions, the Group’s shows continue to win the hearts of its viewers. Variety Shows A clear and well-defined target audience. Program Teenagers and 11 angles are usually based on a variety of formats: popular families, suited entertainment, current issues and ideas, combined with for general current events that integrate knowledge and fun through viewing famous show hosts by highlighting topics of current interest by presenting ideas, often by including a socially constructive angle, in interesting and effective way. This is an area that allows the Group to effectively showcase and maximize the organization’s potential capacity and range as a complete entertainment media giant.

Television Market Conditions Although the global economy continued to languish during the first half of 2009, especially in leading economies such as the US, Dubai and many European countries, this has had repercussions on the Thai economy. Consequently, it was estimated to have a knock- on effect on the advertising media businesses since consumers are more careful in spending and various manufacturers have become more cautious in disbursing their budgets for advertising and public relations. During the second half of the year, the economy revived along with the political stability. With clients beginning to market their products, advertising spending in 2009 was on par with 2008. A study by Neilsen Media Research (Thailand) Co., Ltd., comparing advertising expenditures through various media revealed that television advertising expenditures remained the most popular medium, cornering 58.68 % market share in 2009. Compared to 2008, the figures for television advertising expenditures grew from 51,137 million Baht to 52,935 million Baht, or an increase of 4% as a result of clients flocking to the medium when the economy began to recover. Programs have to remain clear in their agenda, with interesting content and variety, to draw the greatest number of viewers. On the part of program producers, they continue to compete with each other for the best programs and vie for the best broadcasting hours, especially prime time airtime.

036 0 10,000 20,000 30,000 40,000 50,000 60,000

2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 Competitors Source: Neilsen Media Research (Thailand) Co., Ltd. 2009 continues to be a year where many small programs emerged in the domestic television business. Key program producers remain the same, such as Workpoint Entertainment Pcl., JSL Global Media Co., Ltd., Polyplus Entertainment Co., Ltd., Kantana Group Pcl., Media of Medias Plc., Bond Co., Ltd., TV Thunder Co., Ltd., and Broadcast Thai Television Co., Ltd. Nonetheless, these numerous large and small producers cannot be considered direct competitors because every company has a standpoint and working style that differs from each other. Industry Trends and Competition It is expected that advertising spending will grow by 5 – 7% in 2010, to 9.3 billion baht, compared to the previous year, as a result of observing the strong growth in television advertisements in 4Q 2009, which led large producers such as Exact, Polyplus and JSL to announce 5 – 10% advertisement price hikes. In 2010, Channel 3 announced that it would raise it prime time advertising prices by approximately 10%, while Channel 7 had already adjusted its prices since 2009. Although advertising this year has improved, but selecting advertising media continues to be executed cautiously, and with more advertisers, increasingly intense competition for market share follows in its wake. Therefore, the key to success in media strategy in 2010 lies in being able to reach consumers and to work closely with the media owners. Moreover, in leasing airtime for programs, station owners will evaluate the programs on the basis of its quality, attractiveness of the program format, whether it is in line with the station’s policies, and whether it has a high chance of earning high ratings. All these factors together create the demand for various advertisements during the program airtime, compared to its competitors. Therefore, television program producers have to be well prepared in terms of financing, experience, expertise, personnel and have a strong relationship with both public and private station operators. Most importantly, producers have to be ready to adjust and develop quality programs so that they retain their popularity. Nevertheless, increasing demand for all types of television programs points to the greater possibility of the industry witnessing higher growth and greater competition in the future. Thus, program producers who have creative personnel that can offer a wide variety of quality programs will continue to have an edge over its competitors.

Satellite Television Business The Group has embarked on a new business line – satellite television, which is a fairly low cost investment business. Compared to the past, satellites today have much wider domestic and international coverage, which mitigates the need to install additional receiving towers. All that it takes to operate this business are television channel licenses and good programs for broadcasting. The Group has five channels that are aired through Thaicom Satellite PCL.

Grammy Channels Genres Target Audience First Aired

Fan TV Contemporary Thai Look Thung General audience nationwide October 2008

Bang Channel Variety shows that cater to teenagers Pre-teens and teenagers February 2009

Green Channelupdate 10-11-2009 Contemporary music programs and footage Working professionals March 2009 of rare concerts, as well as lifestyle shows targeting working professionals.

Acts Channel Dramas, sit-coms and variety shows General audience nationwide April 2009

Money Channel* Programs on financial matters General audience and working October 2009 and investments professionals with an interest in finance and investments

* The channel is jointly-owned (50% each) with the Stock Exchange of Thailand, through the Group’s subsidiary Family Know-How Co. Ltd.

037 Market Conditions for Satellite Television After the announcement of the Broadcasting and Public Media Act BE 2551 (2008) on the 5th March 2008, cable and satellite television industry operators became more alert since they are now permitted to legally operate and earn advertisement revenue from spots that of not more than six minutes per hour. Consequently, the cable and satellite television business has became more attractive and is considered a viable channel for new television operators since there are more than 6.3 million households nationwide who watch cable and satellite television worth, equivalent to one-third of all television viewers in Thailand. (Source: AGB Nielsen August 2009) Together with the rapid growth of technological innovations which have made both signal transmitters and receivers easy to install and increasingly cheaper, as well as offering more channels than free television, this has led to a rapid expansion of viewers turning to cable and satellite television. In the past, there have been many large producers of program content that have been interested in the business, and are now stepping into satellite television. They are focused on the quality of their pictures and offering a wide variety of program formats. By making their programs on satellite television a new alternative for viewers, this has made television viewers who receive satellite signals from dishes in 2009 skyrocket 400% from figures in 2008. (Source: Initiative, November 2009) With more channels, viewers are better able to select programs that they like, in line with current television viewing consumption trends, which has shifted to watching television programs that deliver specifically to their lifestyle needs and they generally stay tuned for a long time, a marked difference from that of free television viewers. This makes clients and advertisement agencies of products and services increasingly interested in purchasing commercial spots on satellite television, given that the number of viewers will grow and this enables them able more effectively reach their target audience segment. Moreover, advertisements on satellite television are many times cheaper than advertisement spots on free television. For these reasons, competition in the satellite and cable television businesses have begun to heat up as more operators come on board. It is also an industry which has the capacity to capture a significant share of advertising revenue from free television. It is estimated that amount will be approximately 10% of the THB 50 billion television advertisement revenue stream over the next two years. Competitors Previously, satellite and cable television businesses were limited by the willingness to invest in such a small market. Now, due to the potential of an open market, there is greater competition from more business operators. Thus, this makes the business an arena for producers who are ready in every aspect, in terms of content, personnel, and even marketing strategies in tapping and delivering what the audience wants. The channels that are considered a competitor of Grammy’s channels, which is the leader in entertainment programs are listed below:

Grammy Channel Genres Competitors’ Programs Producer

Fan TV Thai Look Thung Thai Chaiyo Life TV Co., Ltd. Hit Station Chang Thai Co., Ltd. Sabai Dee TV RS PCL

Bang Channel Teenage lifestyle programs POP Life TV Co., Ltd. U Channel RS PCL

Green Channel Working professional lifestyle programs Majung True Corporation PCL

Acts Channel Dramas and sit-coms Media Channel Media of Medias PCL

Money Channel Money and investments channel - -

Industry Trends and Competitive Environment Since 2008, the satellite television business continues to grow and is set to improve its performance in 2010. It is estimated that of 20.9 million households in Thailand, there are approximately 6.3 million households that do not use television aerials. It is expected that within two years, the ratio of free television and satellite television viewers will be equal. In 2015, Thailand will have 24.8 million households1, and that 98.58% (nearly 100%), that will watch television using satellite reception or via cable television, or abandon television aerials. Moreover, satellite television has garnered interest from clients and advertising agencies for more advertisement spots. In 2010, AGB Nielsen will start collecting information on advertisement spending via satellite television which will inspire clients with greater confidence in their advertisements. Next year, it is expected that 2 – 3 % of free television advertisement’s THB 50 billion in revenue will be diverted to satellite television. Presently, there are more than 80 – 100 Thai satellite channels, with expectations that it will continue to increase next year, at a rate of not less than 40 new channels, totaling investments of not less than THB 2 – 3 billion.2 Therefore, the Group’s target is to become a leader in the satellite television industry in terms of producing programs that receive top ratings in each target audience, and program genre, as well as generating sufficient revenue to payback its investments within two years. It is hoped that the Group has the capacity to capture profits according to the changing consumer preferences who have shifted over from free television to cable and satellite television, over the next 3 – 5 years. 1 Satellite Television Association of Thailand, 2 Satellite Television Association of Thailand

038 GENERAL INFORMATION

Publishing Business The Group’s publishing business produces monthly and bi-weekly fashion, women’s and men’s and entertainment magazines, as well as being the publisher and distributor of pocket books. There are a total of five publications comprising two local magazines and three magazines produced under foreign licensing. Each magazine’s unique characteristics are as follows:

Magazine/Publication Content Description Target Group

Image Fashion, beauty and entertainment. Noted No limitation on gender or age of readers. for its trendy photographs. For general audience, from students to working professionals

Madame Figaro A magazine for women who are interested Well-educated working women between 25- in fashion and appreciative of beautiful 35 years with a refined taste in beauty and artwork. Provides entertainment and fashion information to well-educated women with good taste.

Her World Covers fashion, beauty, current issues, Women ranging from students to working entertainment and lifestyles of modern professionals aged between 18 - 28 women who use their time for personal development, in preparation for the changing world as they mature.

Maxim Encompasses various aspects of a modern Confident modern men aged men between lifestyle for individualistic men: informative 18 - 40 years interested in current social and entertaining covering fashion, lifestyle, events, fashion, entertainment, and cutting- technology and health. edge technology.

In Magazine Emphasizes celebrities’ romantic Urban women, from university students relationships, in-depth interviews, and to working professionals aged 18-29, with celebrity style tips that are adapted to the middle to high income levels average Thai woman. Most readers tend to be optimistic.

Pocket Books Topics covered include Fiction, Non-Fiction, Style, and Self Esteem which encourage Women between 17-35 of age who are readers to see their own value. There are interested in trendy and current issues, also J Books which are translations of and are open-minded towards a variety of Japanese contemporary literature. viewpoints

039 GENERAL INFORMATION

Market Conditions Competition in the publishing industry since 2005 has continued to intensify with the emergence of many new domestic and international magazines, many of which have increasingly targeted niche markets more so than previously. Many long-standing magazines have been forced to close down despite having weathered several decades, due to political and economic uncertainty which has forced consumers to be more selective than ever, resulting in low overall magazine sales amid rising operating costs. Moreover, advertising budgets allocated to magazines have reduced. In 2009, Nielsen Media Research (Thailand) Limited, the budget allocated to magazines is only 5.79% market share of total print media spending. More significantly, advertising budget via magazines contracted by 12.85% compared to 2008, dropping to 5,227 million baht from 5,998 million baht, reducing the average 2009 revenues of every publishing house accordingly. Pocket book publishers regard this year as one of growth, of approximately 4% across the industry. Although more people purchase books, they tend to do so because of the books’ quality and the publishers’ reputation. Readers tend to select books from leading publishing houses which tend to guarantee a high standard of writing and content quality. Thus, given consumer preferences and strong competition, only solid brand names and leading publishers will survive in the long run. The book publishing industry can be divided into three types of operators. Large players like Amarin Printing and Publishing Plc which encompasses most market genres and has many subsidiaries catering to specific areas such as Amarin Publishing House, Praew Sudsupda, Clinic Baan Lae Suan, and Arun Books. Other large publishing houses are Nanmee Books Group, The Nation Group, and Matichon Group. GMM Grammy Group’s subsidiary, Bliss Publishing, is considered a medium sized publishing house with a distinct business strategy which focuses on niches that fewer players exist and do not have market leaders yet. The third type of operator is small publishing houses. The book publishing business is more highly competitive than ever due to the growth of new published books rising to an average of 37 books daily while the readership growth trends remains unclear. Most books are purchased according to popular trends. Bliss Publishing continues to compete at a satisfactory level due to its clear target readers and retains its leading position in its market segments of translated books and translated romantic comedies for women. In the J-book market, Bliss has only 2 – 3 competitors. Recently, translated romantic comedies for women is experiencing growing competition from Thai writers or translations of Korean books, forcing Bliss Publishing to expand its offerings to meet new market demand for mysteries, romances or fantasies that increasingly incorporate illustrations. One crucial element during economic downturns is to retain existing customers and generate satisfactory sales by conducting constant Customer Relationship Management (CRM). In 2009, Geography based CRM was stepped up, such as by visiting major cities in the provinces like Chiang Mai, to learn more about customer needs, which enables the Company to retain its customer base and leading market share. Value of Magazine Advertising Expenditures (million Baht)

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 Source: Nielsen Media Research (Thailand)

Industry Trends and Competition Competition in the magazine publishing industry in 2010 is expected to intensify in terms of content, format, the date magazines are circulated to the stands, as well as changes in consumer behavior in light of digital innovations. These new changes include reading magazines through websites or by using hand held devices such as e-books. These channels have attracted the attention of many publishing companies including GMM Grammy and its foreign magazines. For instance, Maxim recently launched Maxim e-gazine in October 2009 allowing readers to download the publication for free from www.thaiegazine.com, the first digital magazine portal in Thailand. This format has received a warm reception from advertising clients, as well as fans of Maxim, who like this new format. It is expected that more readers will migrate to the internet. Nonetheless, the economic and political conditions which remain uncertain will have an effect on the consumption patterns, which will become even more selective. Therefore, it is imperative that the Company retain its old customer base, and to seek opportunities to increase the number of new clients through more channels, to cater to readers who prefer print and those who prefer online formats, of which the latter is also another means of reaching out to internet savvy readers. Moreover, the company has adjusted its content and format to remain trendy and ready to meet the demands of its every changing consumer behavior. Marketing is emphasized along with sales and advertising. But ultimately, the key lies in delivering what the readers wants, as much as possible. The book publishing business is expected to improve due to the recovery of the economy and supporting policies from the government that encourage reading, to create a Lifelong Learning Society which is a part of the Stimulus Package 2 Program (Krong Garn Thai Khem Khaeng). It is expected that in 2010, the book publishing market will reach 19.6 billion baht, a growth of 4%. With the advent of rapidly changing technology, we may soon see more people reading e-books, which will be yet another channel to expand readership.

040 Event Creation & Management

041 Event Creation & Management is a business that offers a complete range of event management services from proposing ideas, sourcing various contractors and coordinating with related parties, to producing and managing work to meet the clients’ needs and aims. Index Event Agency Plc. and its subsidiaries are responsible for overseeing and managing related businesses which can be divided into 2 groups: 1. Creating and managing marketing media – This group is responsible for proposing creative ideas and developing marketing strategies to create a complete range of marketing communications services demanded by clients, including event marketing, advertising and public relations. 2. Equipment sourcing, production and special event performances - this group is responsible for producing and sourcing light, sound and special effects equipment, as well as providing cameras and light and sound editing equipment for rent. The group organizes and sets up performance stages for exhibitions, in addition to designing and producing backdrops for television programs. By collaborating with business associates and partners worldwide, the Group also brings in interesting and attractive performances for special marketing activities. The Events creation & management group’s innovative and varied offerings continue to make waves in this industry in terms of creativity and technology. Many projects have been widely acclaimed, the recipient of the most domestic and international awards, compared to its peers. Target Group There are two target groups: Private sector – businesses in this sector are its primary customers and target group. These clients need to penetrate through to their consumers as much as possible. Most of their needs focus on event marketing and brand activation such as launching new products or services, sales enhancing activities, and organizing banquets for sales representatives. Clients in this group include multinational corporations like Unilever, Amway and Chevrolet; domestic clients are large companies or conglomerates such as PTT, Siam Cement Group, Thai Life Insurance and True Corporation. These companies need a company that is reliable, has a proven track record and has the ability to offer creative new ideas which can be transformed into reality. Public sector – Clients in the group generally select activities to communicate with the general public, usually in the form of exhibitions, special activities or organizing international conferences. Clients include the Tourism Authority of Thailand, Ministry of Science and Technology, Department of Export Promotion (Ministry of Commerce), Bank of Thailand, Stock Exchange of Thailand, Bangkok Metropolitan Administration and the Administrative Court of Thailand. These organizations require a company that provides a complete array of services from organizing the events and activities to public relations, which are areas that Index Group can readily provide. Market Condition Though the events management business has more than 200 operators, the majority are companies that have fewer than 20 employees. Only 25 companies have staff sizes not exceeding 50 employees. Fewer than 10 companies employ more than 50 people. Therefore, the overall market is one where market segmentation according to company size is clearly delineated. Index Group is the only company capable of providing comprehensive services that are creative and delivers results, as well as a wide range of rental equipment. Thus, competition is considered relatively low in this industry. Industry Trends and Competition The event creation and management industry continues to show growth prospects because these activities are no longer limited to the private sector alone as it has expanded to encompass the public sector. Many government organizations have begun to increasingly use events organizers to broadcast information to the public as well as to support government policies. Due to the current economic situation, private sector businesses have a greater need for media or activities to communicate through to their consumers as much as possible, while maximizing the efficacy and value in spending their marketing budgets. Moreover, trends indicate an increase in the use of more frequent and large-scale marketing activities. Therefore, larger and more reputable companies will have a greater chance of winning assignments compared to medium and small companies. Among large companies in this market, only three operators generate sales exceeding 700 million baht, so competition in this industry is not too intense.

042 GENERAL INFORMATION

Movie Business Movie making is a business that generates about 3 – 5% of the Company’s revenues. The business requires fairly high investments and considerable planning and production periods of approximately 8 months to 1 ½ years, depending on the size of the project.

Distribution Channels/Sources of Revenue 1. Revenue from ticket price profit sharing when screened in Bangkok movie theatres.The Company and theatre owners share their profits equally at 50% each. 2. Movie copyrights from provincial cinema networks 3. Revenue from selling movie copyrights to home entertainment business operators who produce VCDs and DVDs. 4. Copyrights from cable television channels 5. Copyrights from free television channels 6. Movie copyrights sales to foreign companies. Over the past five years, GTH Co., Ltd., a subsidiary of the Company, had aimed to continue producing quality films at a rate of 5 – 6 movies a year. The movie genres will differ from each other: comedies, romances, romantic comedies, and horror movies. The company is well-equipped in terms of personnel, with skilled teams working together in conducting in-depth research of the market and moviegoers before investing in new projects. This is a key reason that enables the company to offer new and novel things that have consistently been popular among viewers. In 2009, the total Thai movie market was worth 3.6 billion baht (box office figures only), which increased by 9% from 2008. Foreign movies won 62% of the market share, Thai movies captured approximately 35% and independent movies made up the remaining 3%. In 2009, 48 Thai movies raked in box office revenues of 1,250 million baht. A total of 4 movies by GTH Co., Ltd. were screened, generating 322 million baht in terms of box office revenue, equivalent to a 30% increase over revenues in 2008. In 2009, the Group screened four films: Best of Times (Kwarm Jum Sun…Tae Rak Chan Yao), Dear Galileo (Nee Tarm Galileo), Phobia 5 (Haa Prang), and BTS: Bangkok Traffic (Love) Story (Rot Fai Fah Ma Ha Na Ter). These movies received great responses from the audience, with BTS: Bangkok Traffic (Love) Story generating the highest box office revenues of all Thai films in 2009. The Company’s marketing strategy of promoting campaigns that reach target viewers to draw them to the cinemas is a common industry practice. Emphasis is given to setting promotional budgets and channels appropriate for the intended audience. Promoting movies before they are screened is an essential element in the modern film industry the audience will know what movies are going to be showing soon. Moreover, new ways of promoting movies are considered very important. Industry Trends and Competition The key operators in the industry that have continuously released movies are GTH Co., Ltd., Sahamongkol International Co. Ltd., RS Film Co., Ltd., Five Star Production Co., Ltd., Phranakorn Film, film related subsidiaries of Kantana Group, and a new operator, M39. In 2010, the Thai film market size is expected to reach 3.7 billion baht because there will be Thai epic movies such as The Legend of King Naresuan III and IV scheduled for screening mid-year. However, GTH Co., Ltd., expects that there will be fewer movie audiences during the World Cup 2010 which will run from mid-June until mid-July, and it will be telecast live from 18.30 hrs onwards. Therefore, the Company has already planned not to release any movies during this period. GTH expects to continue growing by 10 – 15% according to set targets. There are plans to release five movies to the company’s primary target audience aged between 15 – 30 years.

043 Risk Factors

Risk factors that the Company and companies in the group, (“The Group”) that are expected to have an impact on investors’ investment are as follows: Operational Risk 1. Development of content and new services together with technology development Rapid technological changes today affect the demand for content and different types of consumer services through various technological advances such as mobile phones and the high speed internet which has resulted in the continuous development of new types of entertainment content delivered through new channels. Consequently, the Company established a business unit in 2004 that provides digital content services to develop new services that cater to the latest technological innovations and changes in consumer behavior such as call waiting tunes for incoming mobile phone calls, gmember websites which is an online music society providing online music, downloading services for singles and entire albums, as well as collaborating with mobile telephone network operators in offering different services, meeting consumers’ needs. The Group also has a Music Library that digitalizes all of its proprietary products from various content formats. Digital formats allow systematic storage and easy access, as well as paving the way for future transition into other formats according to technological advances. Moreover, the Company has adjusted its Enterprise Resource Planning (ERP) internal management system to improve its analyses, to better plan, manage its resources and run its operations more efficiently. 2. Piracy Piracy is one factor that uniformly affects music and movie industries worldwide. Every year, the Group has to contend with adaptation and duplication of their music, which are then sold cheaply in large quantities. New forms of piracy have emerged with the latest technological developments, such as using the Group’s products for commercial purposes on the internet. Consequently, the Group loses substantial valuable business opportunities every year. Nonetheless, the government has issued various measures in a serious attempt to improve the protection and reduction of piracy. The latest measures are comprehensive, ranging from import controls of machines that can be used to produce pirated products, to controlling production and distribution processes. Penalties and fines have been increased against violators. Rewards are handed to police or to people who offer leads to the production, storage and retail sites of pirated goods. Moreover, new channels to sell music via the internet have facilitated music purchases while ongoing campaigns help promote the purchase of legal products among Thai consumers. In the film industry, the Company has received warm cooperation from theatre operators in issuing various measures to reduce illegal recordings. The Group expects that with serious and continual collaboration between the government and private sectors, the use of pirated products will decrease significantly, benefiting the entire music industry in the future. 3. Renewal of Concessions/Rental Contracts Because the Group produces radio and television programs, and leases predominantly short-term airtime from radio and television stations to air these programs. The lease for radio stations runs between 1 – 3 years, while rental terms for television airtime range between 2 – 12 months, the scope of business expansion is limited. The Group runs the risk of failing to get renewals on their concessions and rental contracts from various agencies with the authority to allocate radio and television frequencies. If the Group cannot renew the concessions and/or airtimes, the continuity of the radio and television programs will be affected as new concessions have to be found. Moreover, there are risks that contract terms such as the cost of the concession, lease or rental fees, payment conditions, or the proportion of advertising time and airtime, may change, and consequently affect the core revenue of the Group. However, station owners select operators on the basis of their program formats, the popularity of the program and the producer’s ability to pay the concession lease or airtime rental. Therefore, with the Group’s caliber and readiness, in terms of production technology, capital, and high skilled and experienced staff, a quality track record as a leading market player, wide acceptance from the audience, and good relations with station owners, the Group has reduced its risks in not getting the concession and rental contracts renewed. 4. Risks in the Movie Business Movie production is a capital intensive industry, in the range of 20 – 25 million Baht per movie and as much as 50 million Baht for blockbusters. Risks pertaining to movie making are as follows: 1. Selecting a project that does not match viewers’ preferences: While it is true that viewers demand novelty, movies that are too avant garde may diverge from fare preferred by the audience, thereby causing the movie to fail to meet revenue targets. 2. Competitors whose movies are released concurrently: (Competitors refer to both Thai and foreign movies that are being simultaneously screened in cinemas) If the competitors’ movies prove more popular, this can affect the Company’s income from that particular movie. 3. Misuse of Funds: The movie budget exceeds it’s original target. 4. Piracy: Most frequent incidences are secret filming of the movie in the theatres which are then copied for sale. Another method is replicating from genuine VCDs or DVDs for illegal sale. These types of piracy reduce revenue flow from the sale of movie VCDs and DVDs, which contributes to lower copyrights-based revenue shared by producers and distributors of VCDs and DVDs. 5. Risks of New Entrants The Organization of Frequency Allocation and Supervision of Radio Broadcasting, Television and Telecommunication Enterprises Act B.E. 2543 (2000), commonly referred to as the Frequency Allocation Act, and the Operation of Radio and Television Broadcasting Business Act 2551 (2008) is now use. This 2008 Broadcasting Act permits private entities to own

044 RISK FACTORS and operate radio and telecommunication media businesses. It is expected that the future establishment of the National Broadcasting and Telecommunications Commission (NBTC) will mean that growing numbers of competitors in a mature and already intensely competitive industry may significantly affect the Company’s operations. Nonetheless, because the Company expects that liberalization will lead to longer concession periods, operators possessing sufficient capital and modern technology will be competitively positioned to invest as they can set clearer, longer term business strategies. In any case, with an efficient and experienced management team, staff, a firmly established customer base, as well as solid backing from the media, financiers, and teams of professionals, the Company will continue to operate with stability, develop its capacity and adapt according to changing circumstances. According to the temporary 2008 Broadcasting Act which determined that the selection of the NBTC committee has not been finalized. Therefore, the National Telecommunications Commission (NTC), according to the Frequency Allocation Act 2000, should serve during the interim, and be vested with the authority to carry out its duties so that radio broadcasting business and businesses that do not use frequency waves (television businesses that are broadcasted via satellites) can apply for a permit to serve the public. Businesses that do not use frequency waves will be granted a temporary permit not exceeding one year. This is an opportunity for the Company to apply for a temporary permit to operate a satellite television business. Presently, the NTC has appointed a sub-committee on radio broadcasting and television to draft various regulations or rules on issuing temporary permits as dictated by the temporary Act for the NTC. And when this process completes the Company with an opportunity to apply for a temporary satellite television business. 6. Changes in Consumer Preference The risks of the producing radio and television programs and print media are changes in consumers’ preferences and satisfaction with the content. Today, with the rapid change in consumer preferences, which constantly alters with their ages, this factor is the key reason affecting the popularity of mass media content. To ensure greater accuracy in producing content, the Company constantly researches and develops product content to match consumer interests. The Group aims to increasingly target a broad swathe of audiences across different groups. The products in line with consumer preferences, such as surveys of total sales volume of each album to adjust production levels and sales distribution, as well as providing song downloading service through websites and mobile telephones. Ratings surveys of the Group’s radio or television programs or publications have been done to develop formats and content in accordance with both consumers’ and advertisers’ interests. The Company also arranges open-air media and below-the-line marketing activities, which have been consistently well received, which allows the company considerable flexibility in its operations because the Company has a complete range of media for both above- and below-the-line marketing efforts. 7. Artists or Producers defection to other companies or internal transfers within the Group In the music business, personnel, regardless of whether they are the artist or all the different supporting teams, are all valuable members who have an impact on the Group’s operations. Therefore, whenever these personnel move to a different Group or corporate affiliate, this means a valuable loss which requires the Group to spend additional time developing new artists or supporting teams to replace them. Nevertheless, the Group continues to place great importance on developing and supporting their personnel by involving them more in business operations, so they feel that they are part of the Group’s success. The dedicated artist management unit is responsible for sourcing jobs for the artists, from music related work to other assignments such as acting, emceeing/hosting programs, and modeling, throughout the duration of their career in the Group. The Group also places great importance on developing new artists. Today, there is a large pool of artists covering many music genres, to cater to target customers of all genders and age groups. 8. Risks associated with dependence on staff The Group places great importance on the production team members for every radio and television programs, and print media, from program hosts, producers, editorial team or various supporting team members who are important in contributing to the Group’s success. The Group has placed great importance on the development and support of these personnel by providing them with more active roles at work. Personnel turnover rates in key positions have always been very low, which reflects staff loyalty, as well as their confidence in the organization. Controlling Management Risk Managing the Organization when a Major Shareholder Holds More than 50% of the Company On 31 August, 2009, which is the latest date the Group closes its shareholding registrar, the Damrongchaithams hold shares worth 54.87% of the Group’s total outstanding shares. As the Damrongchaithams have a controlling interest of the Group, they can determine almost all resolutions during the general shareholders’ meetings on matters including the appointment of directors or requesting a decision that requires a majority vote at the Annual General Meetings. The only exceptions are issues that by law or by the Group’s articles of association, that require at least three-quarters vote from all shareholders present at the general meetings. As a result, other shareholders may not be able to accumulate enough votes to review and perform an adequate checks-and-balance on issues proposed by the major shareholder. However, the Group abides by the SET’s announcement regarding disclosures of connected transactions, which clearly specifies that shareholders with vested interests cannot vote on those particular resolutions, to protect the interests of minority shareholders.

Even though the Damrongchaithams are major shareholders with majority voting rights, they intend to give the Group the freedom and transparency in managing itself and be audited by its shareholders. This is evident from the corporate structure which comprises six committees, namely the Board of Directors, Executive Committee, Audit Committee, Nomination and Compensation Committee, Risk Management Committee, and the Corporate Governance and Ethics Sub-Committee. Each committee consists of capable and knowledgeable members who have clearly delineated roles and responsibilities.

045 Capital Structure and Management Structure

Capital Structure 1. The Company’s Security As at 31 December 2009, the Company has registered capital of 530,556,100 baht, (the Company increased capital on 10 October 2008) consisting of 530,264,947 baht in paid-up capital, consisting of 530,556,100 common shares with a par value of Baht 1 each. 2. Shareholders 2.1) Top shareholders according the share registration on 31 August 2009 are:

Number Rank Shareholders of Shares % Holding 1. Paiboon Damrongchaitham Group* 290,978,030 54.87 2. CHASE NOMINEES LIMITED 42 40,339,900 7.61 3. STATE STREET BANK AND TRUST COMPANY 25,405,600 4.79 FOR SWITZERLAND 4. Mr. Taweechat Chulangkoon 25,310,800 4.77 5. Thai NVDR Co., Ltd. 22,099,817 4.17 6. STATE STREET BANK AND TRUST COMPANY 12,114,600 2.28 7. STATE STREET BANK AND TRUST COMPANY FOR AUSTRALIA 9,242,300 1.74 8. Mr. Takonkiet Viravan 5,775,700 1.09 9. MELLON NOMINEES (UK) LIMITED 2,973,273 0.56 10. Mr. Kriengkrai Kanjanapokin 2,869,000 0.54 Total 437,109,020 82.43

*Paiboon Damrongchaitham Group consists of Mr. Paiboon Damrongchaitham (holding 285,095,430 shares equivalent to 53.76%) and Geurt Fah Co., Ltd. (holding 5,882,600 shares, equivalent to 1.11%) Nonetheless, the Company has five large shareholders that hold 22,099,817 shares or 4.17% of total paid up capital through Thai NVDR Co., Ltd. Number of Rank Shareholders Shares % Holding 1. NORTRUST NOMINEES LTD. 4,790,200 0.90 2. MELLON BANK,N.A. 4,031,600 0.76 3. HSBC (SINGAPORE) NOMINEES PTE LTD 2,917,000 0.55 4. MELLON NOMINEES (UK) LIMITED 2,633,100 0.50 5. DANSKE BANK A/S 1,468,000 0.28 6. THE BANK OF NEW YORK NOMINEES LTD-CGT EXEMPT 877,000 0.17 7. RBC DEXIA INVESTOR SERVICES TRUST 844,000 0.16 8. MELLON NOMINEES (UK) LIMITED 795,000 0.15 9. NORTRUST NOMINEES LIMITED-NTGS 760,000 0.14 10. THE BANK OF NEW YORK (NOMINEES) LIMITED 576,200 0.11 11. CITIBANK NOMINEES SINGAPORE PTE LTD-CBOSC ATF 514,900 0.10 OFFICERS’ SUPE 12. MRS.MALEE TANG 359,000 0.07 13. CITIBANK (CHANNEL ISLANDS) LTD 344,000 0.06 14. GOLDMAN SACHS INTERNATIONAL 197,900 0.04 15. CITIBANK NOMINEES SINGAPORE PTE LTD 130,000 0.02 -COGENT-INSURANCE COMMISS

046 CAPITAL STRUCTURE AND MANAGEMENT STRUCTURE

Number of Rank Shareholders Shares % Holding 16. Minority Shareholders 861,917 0.16 Total 22,099,817 4.17

Source: http://www.set.or.th/set/companyholder.do?symbol=GRAMMY-R&language=en&country=US

Distribution of Shareholders by Nationality The distribution of shareholders according to their nationality, as of the last day of the registration book, 31 August 2009, is as follows:

Individuals Corporations Grand Total Shareholders Number of Number of Number of Number of Number of Number of shareholders share % shareholders share % shareholders share %  Thai Shareholders 2,847 381,962,973 72.03 17 31,617,017 5.96 2,864 413,579,990 77.99  Foreign shareholders 21 724,800 0.14 45 115,960,157 21.87 66 116,684,957 22.01

Total 2,868 382,687,773 72.17 62 147,577,174 27.83 2,930 530,264,947 100.00

2.2) The major shareholder that has a significant influence on the management policies or the operation of the Company is Paiboon Damrongchaitham Group. 3. Dividend Policy The Company and its subsidiaries has a policy of paying dividends to shareholders at a rate not less than 40% of the Group’s net profit after corporate tax and regulatory reserve, subject to economic conditions and future operations. Management 1. Management Structure The Company’s management structure currently comprises a Board of Directors and 4 Sub-committees appointed by the Board: the Executive Committee, the Audit Committee, the Nomination and Remuneration Committee, the Risk Management Committee, and the Sub-CG and Ethics Committee, in addition to one Management Team (as defined by the Securities and Exchange Commission [SEC] and Stock Exchange of Thailand [SET]), as follows:

Board of Directors

Audit Committee Executive Committee Nomination Risk Management Committee and Remuneration Committee

Co-Chief Executive Officer Co-Chief Executive Officer Ms. Boosaba Daorueng Mrs. Saithip Montrikul Na Audhaya

Music Business Division Creative Division Corporate Support Senior Executive Vice President Senior Executive Vice President and Business Development Mr. Krittisak Chuang-a-roon Ms. Boosaba Daorueng Senior Executive Vice President Mr. Sumeth Damrongchaitham Executive Vice President Mr. Krij Thomas

Managing Director Mr. Wichian Rerkpaisan Show Biz Business Division Digital Business Division Accounting & Finance Division Managing Director Managing Director Executive Vice President (CFO) Mr. Santisuk Chongmankong Mr. Suwat Damrongchaitham Mr. Sirichai Tantiponganant

047 CAPITAL STRUCTURE AND MANAGEMENT STRUCTURE

1) Board of Directors As at 31 December 2009, the Board of Directors consists of 12 distinguished directors, with the Chief Operation Officer of Corporate Support and Business Development acting as Secretary to the Board of Directors.

Name Title

1. Mr. Paiboon Damrongchaitham Chairman 2. Mr. Chai Nasylvanta Independent Director 3. Mr. Dej Bulsuk Independent Director 4. Mr. Weerawong Chittmittrapap Independent Director

5. Mr. Wanich Jarungidanan\1 Independent Director 6. Ms. Boosaba Daorueng Director and Vice-Chairman 7. Mrs. Saithip Montrikul Na Audhaya Director 8. Mr. Krij Thomas Director 9. Mr. Sumeth Damrongchaitham Director

10. Mr. Takonkiet Viravan\1 Director

11. Mr. Kreingkarn Kanjanapokin\1 Director Note: 1) Mr. Takonkiet Viravan, Mr. Kriengkarn Kanjanapokin, Mr. Sataporn Panichraksapong and 12. Mr. Sataporn Panichraksapong \1 Director Mr. Wanich Jarungidanan were appointed additional Directors, as voted on in the 2009 Annual General Mr. Sumeth Damrongchaitham Secretary to the Board of Directors Meeting, effective as of 27 April 2009, so that there and Company Secretary are a total of 12 members in the Board of Directors.

Directors with signing authority on behalf of the Company are Ms. Boosaba Daorueng or Mr. Sumeth Damrongchaitham, who have to co-sign with Mrs. Saithip Montrikul Na Audhaya or Mr. Krij Thomas or Mr. Takonkiet Viravan or Mr. Kreingkarn Kanjanapokin, so there are two signatures and the Company seal on the document. During the Board of Directors Meeting No. 1/2009 on 27 February 2009, the Board evaluated and approved changes in the qualifications of Independent Directors to match requirements stipulated by the SET and SEC. The Company’s Independent Directors are qualified and independent as required by the Stock Exchange of Thailand (SET) andthe Securities and Exchange Commission (SEC), in the following ways: 1. Does not hold shares exceeding 1% of paid-up capital in the Company, the Company’s subsidiaries, associated companies and related companies or any organizations that may have conflicts of interest with the Company. This injunction also includes shares held by related parties. 2. Is a director who is not involved in management; is not an employee or corporate advisor receiving a regular salary; does not provide professional services such as external audit or legal advisory; or has controlling power of the Company, subsidiaries, associated or related companies, or organizations that may have conflicts of interest with the Company; or is a major Company shareholder. 3. Does not benefit or have any conflicts of interests directly or indirectly from financial or management-related matters in the Company: has no business relations such as being a customer, supplier, trade creditor/debtor; and is not a (financial) creditor/debtor of the Company, its subsidiaries, associated or related companies, organizations that may have conflicting interests, or is major shareholder of the Company. For a period of 2 years prior to being appointed an independent director, the Director must not fall under any of the categories listed in Criteria 2 and 3, unless the Board of Directors has duly considered that such these parties who formerly had vested interests or conflicts of interests will not affect the Director’s ability to operate or express independent views. 4. Is a Director who is not a related by blood or by law; is not a related party or a close relative of management or a major shareholder of the Company, its subsidiaries, associated or related companies, or any organizations that may potentially present conflicts of interest. 5. Is a Director who has not been appointed to protect the interests of the Board of Directors, major shareholder or shareholders who are related parties to the Company’s major shareholders, its subsidiaries, associated or related companies, or organizations that may have conflicts of interest. 6. Is not a Director assigned by the Board of Directors to make organizational decisions in the corporate headquarters, associated companies, subsidiaries at the same level as associated companies, or organizations that may potentially be in conflict with the Company. 7. Is able to independently fulfill the responsibilities and express views or report results in accordance with the roles and responsibilities assigned by the Board of Directors, autonomous of the management, major shareholders of Company and its subsidiaries, including all related parties or close relatives of such persons. 8. Does not simultaneously hold identically ranked Director positions at the corporate headquarters and its subsidiaries.

048 Duties and Responsibilities of the Board of Directors 1. Performs all duties using their knowledge, abilities and experience for the benefit of the Company in accordance with the law, the Company’s objectives and Articles of Association, shareholders’ resolution, with honesty, integrity and prudence in protecting the Company’s interests. 2. Sets the corporate vision and mission, approves strategies, policies, business plans and budgets, and supervises the management so they follow established policies effectively and efficiently to increase economic value of the Company and maximize shareholders’ wealth. 3. Clearly delineates and sets forth the duties, responsibilities and authority of the Board of Directors, smaller Committees and Management team in the Company’s Authorization and Procedure Manual. 4. Approves or agrees to significant transactions, such as new investments, acquiring or disposing assets, in accordance with SEC and SET rules and regulations, and the Company’s Authorization and Procedure Manual. 5. Provides advice or evaluate and approves every connected transaction and any transaction which may have potential conflicts of interest of the Company and subsidiaries, in compliance with SEC and SET rules and regulations, and Company’s Authorization and Procedure Manual. 6. Ensures that the Company has reliable accounting systems, financial reports and accounting audits. 7. Ensures that the Company has sufficient and effective internal controls and risk management systems, monitored by an internal audit department that collaborates with the Audit Committee on significant risks. 8. Is honest and loyal, possesses integrity and ethics in running the business; has a genuine interest in the Company, and is dedicated to running the business in the long-term. 9. Is always mindful of its responsibility to shareholders, by operating the business in the interest of shareholders and transparently disclosing accurate, complete information of a high standard to investors. 10.Is responsible for the management team’s performance and operations by ensuring that the team is dedicated and cautious in operating the business. 11.Prepares a report on the Board of Directors’ responsibility for financial reports, to be included in the annual report, and submitted together with the auditor’s report. The duties and responsibilities of the Board of Directors have been reviewed to be in line with the Good Corporate Governance Policy, and were effective on 18 February 2005. In addition, the Company sees the importance of a Good Corporate Governance Policy, and has enrolled four directors in requisite training programs by the by Thai Institute of Directors (IOD). Mr. Sumeth Damrongchaitham attended the Director Accreditation Program (DAP) in 2004, studied the “Role of Compensation Committee (RCC)” in 2007, and the “Company Secretary Program (CSP)” and the D&O Insurance: Mitigating Directors Liabilities Risk / Special Seminar in 2008. Mr. Dej Bulsuk completed the DAP training course in 2004, while Mr. Weerawong Chittmittrapap attended the Director Certification Program (DCP) in 2000. Mr. Kreingkarn Kanjanapokin passed the DAP in 2004 and enrolled in the Financial Statements for Directors course in 2007. 2) Audit Committee As at 31 December 2009, the Audit Committee comprises 4 reputable independent directors who possess qualifications as required by SEC and SET. The Director of the Internal Audit Department serves as Secretary to the Audit Committee. Details of the Audit Committee are as follows: Name Title

1. Mr. Chai Nasylvanta \1-2 Chairman of the Audit Committee

2. Mr. Dej Bulsuk \1 Member of the Audit Committee

3. Mr. Weerawong Chittmittrapap Member of the Audit Committee

4. Mr. Wanich Jarungidanan \1 Member of the Audit Committee

Mr. Wichai Santadanuwat Secretary to the Audit Committee

Note: 1) At the Board of Directors Meeting no. 1/2009 held on 27 February 2009, resolutions were passed to appoint Mr. Chai Nasylvanta, Independent Director and member of the Audit Committee, as Chairman of the Audit Committee, and Mr. Dej Bulsuk will become a member of the Audit Committee, effective immediately. There was also another resolution to appoint Mr. Wanich Jarungidanan to the Audit Committee after he was nominated and appointed an Independent Director at the 2009 Annual General Meeting. 2) Mr. Chai Nasylvanta is a member of the Audit Committee who is qualified and sufficiently experienced in financial matters to conduct financial audits. During the Board of Directors Meeting No. 1/2009 on 27 February 2009, the Board evaluated and approved changes in the qualifications of Independent Directors to match requirements stipulated by the SET and SEC. Duties and Responsibilities of the Audit Committee 1. Ensure the accuracy, completeness and reliability of financial statements, and that sufficient information is disclosed. 2. Ensure that the Company has sufficient, appropriate and effective internal controls, risk management, and internal audit systems. 3. Ensure that the Company appropriately and effectively abides by the Good Corporate Governance Policy and Code of Ethics. 4. Ensure that the Company abides by all relevant SEC and SET rules and regulations, and other regulations and laws related to the Company’s businesses. 5. Select and propose the Company’s auditors and determine their compensation.

049 6. Evaluate connected transactions so they comply with the law and regulations stipulated by the SET, and that the transactions are reasonable and benefit the Company. 7. Supervise the Internal Audit Unit policies and operations so that they are aligned with the Internal Audit Charter, by evaluating the independence of its audits, the scope of work and audit schedules. 8. Evaluate and appoint, transfer, and terminate the head of Internal Audit Department, as well as assess the performance and approve compensation for the Internal Audit Department, as initially appraised by the Chief Executive Officer. 9. Review both the external and internal audit and recommendations conducted by the external Auditor and the Internal Audit Department, as well as monitor the management team to ensure that recommendations have been sufficiently followed and effective action has been taken within an appropriate timeframe. 10.The Audit Committee can request that any member of the management or any employee to report or present information, attend meetings or deliver documents as deemed relevant and necessary. 11. As necessary, the Audit Committee can request assistance from external advisors or experts related to the Audit, at the Company’s expense, in accordance with the Company’s Articles of Association. 12.Consider and amend the Audit Committee Charter at least once a year or as necessary, so it is up-to-date and appropriate to the Company’s environment, and to present the results to the Board of Directors for approval. 13.Prepare an Audit Committee’s Report, attached in the Company’s annual report, signed by the Chairman of the Audit Committee. 14.Execute other tasks as assigned by the Board of Directors, as agreed to by the Audit Committee.

The Audit Committee has to be reviewed at least once a year (Audit Committee Self-Assessment). In 2009, the Audit Committee had performed its duty knowledgeably and to the best of its ability, within its scope of authority in accordance with the Audit Committee Charter and good corporate governance for Audit Committees. In addition, a report summarizing the duties and activities of the Committee and its views arising from the Committee’s work during 2009 was presented to the Board of Directors meeting 1/2010 on the 26 February 2010. However, in the event that Internal Audit Department determines that there is a need for additional measures regarding good corporate governance, the Audit Committee will take the suggestions into consideration and submit them to the Board of Directors for further evaluation and amendment as appropriate. 3) Executive Committee As at 31 December 2009, the Executive Committee comprises 14 members with the Chief Operating Officer of Corporate Support and Business Development acting as Secretary to the Executive Committee, as follows:

Name Title

1. Ms. Boosaba Daorueng Co-Chief Executive Officer\1

2. Mrs. Saithip Montrikul Na Audhaya Co-Chief Executive Officer\1 3. Mr. Kittisak Chuang-a-roon Executive Director 4. Mr. Krij Thomas Executive Director 5. Mr. Wichian Rerkpaisarn Executive Director 6. Mr. Santisuk Chongmankong Executive Director 7. Mr. Sumeth Damrongchaitham Executive Director 8. Mr. Suwat Damrongchaitham Executive Director Note: \2 9. Mr. Takonkiet Viravan Executive Director 1) At the Board of Directors Meeting 1/2009 resolution on the 27 February, 2009, the Board agreed to appoint \2 10. Mr. Kamron Pramoj na Ayutthaya Executive Director Mrs. Saithip Montrikul Na Audhaya Co-Chief Executive Office, effective as of 27 February, 2009. \2 11. Mr. Yongsak Ekprachyasakul Executive Director 2) At the Board of Directors Meeting 1/2009, the Board also appointed Mr. Takonkiet Viravan, Mr. Kamron Pramoj \2 12. Mr. Sataporn Panichraksapong Executive Director na Ayutthaya, Mr. Yongsak Ekprachyasakul, and Mr. Sataporn Panichraksapong as Executive Directors, \3 13. Mr. Kriengkarn Kanjanapokin Executive Director effective the same day. 3) At the Board of Directors Meeting 2/2009 held on \3 14. Mr. Sirichai Tantiponganant Executive Director 3 April, 2009, the Board appointed Mr. Kriengkarn Kanjanapokin and Mr. Sirichai Tantiponganant as Mr. Sumeth Damrongchaitham Secretary to the Executive Committee Executive Directors, effective the same day.

Duties and Responsibilities of the Executive Committee 1. Determine and propose the Company’s business strategies, policies, business plans and budgets to the Board of Directors for approval. 2. Invested with the authority, duty and responsibility to make decisions, relay instructions, and execute assignments determined by Board of Directors, in accordance with the Company’s Authorization and Procedure Manual. 3. Operate the business according to policies and directives issued by the Board of Directors

050 CAPITAL STRUCTURE AND MANAGEMENT STRUCTURE

4. Assign responsibilities to the management and monitor them, with the supervision of the Chief Executive Officers, and carry out duties as determined by the Board of Directors. 5. Be responsible for other tasks as assigned periodically by the Board of Directors. 6. To carry out shareholders’ and Board of Directors’ resolutions, and to abide by rules and regulations with honesty and integrity for the benefit of the Company, in accordance with the law, the Company’s objectives and Articles of Association.

The above duties and responsibilities do not give the Executive Committee and Chief Executive Officer the authority to approve transactions in which themselves or any persons may have any potential conflicts of interest (as defined by the SEC) with the Company or subsidiaries. These transactions must comply with the SET announcement regarding disclosure concerning connected transactions and/or acquisitions and disposition of assets.

The duties and responsibilities of the Board of Directors have been reviewed to be in line with the Good Corporate Governance Policy, and were effective as of 18 February 2005.

4) Nomination and Remuneration Committee As at 31 December 2009, the Nomination and Remuneration Committee comprised 4 reputable members as follows:

Name Title 1. Mr. Paiboon Damrongchaitham Chairman of the Nomination and Remuneration Committee

2. Mr. Chai Nasylvanta\1 Member of the Nomination and Remuneration Committee 3. Mr. Dej Bulsuk Member of the Nomination and Remuneration Committee Note: At the Board of Directors Meeting 1/2009 4. Mr. Sumeth Damrongchaitham Member of the Nomination on 27 February 2009, the Board appointed Mr. and Remuneration Committee Chai Nasylvanta a Member of the Nomination and Remuneration Committee, effective the same day. Duties and Responsibilities of the Nomination and Remuneration Committee Nomination 1. Set guidelines and policies in nominating Board of Directors and other Committee members by considering what would be the appropriate number, structure and composition of members, outline necessary directors’ qualifications, and propose these ideas for approval by Board of Directors and/or shareholders as appropriate. 2. Search, select and propose appropriate persons to assume the position of the Company’s directors whose terms have expired or became vacant 3. Responsible for other tasks related to the nomination as assigned by the Board of Directors Assess the performance of Chief Executive Officers and report to the Board of Directors for their evaluation. Remuneration 1. Prepare guidelines and policies in determining the Board of Directors and smaller committees’ remuneration, and propose it to the Board of Directors and/or shareholders’ approval. 2. Determine necessary and appropriate monetary and non-monetary remuneration, for individual members of Board of Directors each year, taking into consideration each director’s duties and responsibilities, performance and comparisons against similar businesses, and the benefits expected to receive from the director. The report will be submitted to the Board of Directors for consent and to the shareholders’ meeting for approval. 3. Reports to the Board of Directors and is responsible for explaining and answering any questions regarding the Board of Directors’ remuneration in shareholders’ meeting. 4. Report policies and principles/reasons in determining the remuneration of directors and management according to SET guidelines by disclosing them in the Company’s annual information disclosure (56-1) and annual report. 5. Responsible for other tasks related to the remuneration as assigned by the Board of Directors, in terms of business strategies, policies, business plans and budgets, which will be proposed to the Board of Directors for consideration and approval. 5) Risk Management Committee As at 31 December 2009, the Risk Management Committee comprised 9 reputable members as follows:

Name Title

1. Ms. Boosaba Daorueng Chairman of the Risk Management Committee 2. Mrs. Saithip Montrikul Na Audhaya Member of the Risk Management Committee 3. Mr. Kittisak Chuang-a-roon Member of the Risk Management Committee

051 CAPITAL STRUCTURE AND MANAGEMENT STRUCTURE

Name Title 4. Mr. Sumeth Damrongchaitham Member of the Risk Management Committee 5. Mr. Sataporn Panichraksapong Member of the Risk Management Committee 6. Mr. Sirichai Tantiponganant Member of the Risk Management Committee 7. Mrs. Montana Thawaranont Member of the Risk Management Committee 8. Mr. Wichai Suntadanuwat Member of the Risk Management Committee 9. Ms. Sunetra Saengratanakul Member and Secretary to the Risk Management Committee Duties and Responsibilities of the Risk Management Committee 1. Assess and present policies, set risk management policy and framework and propose to the Board of Directors for approval. 2. Examine and agree on acceptable risk levels, approve risk management plans, and present to the Board of Directors. 3. Continuously monitor, develop and comply with policies and the risk management framework so that the Group will have a risk management system that is uniformly effective throughout the organization and that policies continue to be observed. 4. Assess risk identification and assessment procedures, report on significant risk management activities and enforce procedures to ensure that the organization has sufficient and appropriate risk management systems in place. 5. Coordinate with the Audit Committee about significant risk factors and appoint an internal risk assessment team to ensure that the Company’s risk management system is appropriate to the exposure, adapted as needed and adopted throughout the organization. 6. Continually report to the Board of Directors on significant risks and risk management solutions. 7. Recommend and advise the Risk Management Sub-Committee and/or departments and/or the relevant working committee about significant risks about risk management, as well as evaluate the appropriate means to improve various databases that are related to the development of risk management solutions 8. Appoint Sub-Committees and/or additional related personnel, or replacements in the Risk Management Sub-Committee and/or the Department and/or the working team that is related to managing risks as necessary, as well as determine their roles and responsibilities for the benefit of achieving the objectives. 9. Carry out any other activities that pertain to managing risks as assigned by the Board of Directors 6) The Sub-CG and Ethics Committee As at 31 December 2009, the Sub-CG and Ethics Committee has 10 qualified members, as follows:

Name Title 1. Mr. Sumeth Damrongchaitham Chairman of the Sub-CG and Ethics Committee 2. Mr. Sirichai Tantiponganant Member and Secretary to the Sub-CG and Ethics Committee 3. Mr. Prasert Sirichongmechai Member of the Sub-CG and Ethics Committee 4. Ms. Chitralada Hengyotmark Member of the Sub-CG and Ethics Committee 5. Mrs. Somsri Preutthipan Member of the Sub-CG and Ethics Committee 6. Mrs. Montana Thawaranont Member of the Sub-CG and Ethics Committee 7. Ms. Napaporn Ujjin Member of the Sub-CG and Ethics Committee 8. Ms. Sunetra Saengratanakul Member of the Sub-CG and Ethics Committee 9. Mr. Wichai Santadanuwat Member of the Sub-CG and Ethics Committee 10. Mr. Apivich Asavasrivorakul Member of the Sub-CG and Ethics Committee

Duties and Responsibilities of the Sub-CG and Ethics Committee Propose Corporate Governance Policies and a Code of Ethics of the Group to the Board of Directors for approval. 1. Monitor and supervise the Group to ensure that corporate governance policies and business ethics specified by the Company are complied with. 2. Continuously assess the Group’s corporate governance policies and code of ethics to ensure that they comply with international standards and/or recommendations from related government organizations, and propose these findings for approval from the Board of Directors. 3. Evaluate and propose a Code of Best Practices to the Board of Directors and/or smaller committees of the Group.

052 4. Encourage the dissemination of the good corporate governance culture over the organization and ensure that it is actually practiced. 5. Evaluate, appoint and outline the working team’s roles in supporting the monitoring and supervision of business operations and ethics, as appropriate. 6. Perform other duties as assigned by the Board of Directors. 7) Management Team (‘Management’ as defined by SEC and SET) As at 31 December 2009, the Company’s management team comprises 10 qualified members as follows:

Name Title

1. Mr. Paiboon Damrongchaitham\1 Chairman of the Company Advisor

2. Ms. Boosaba Daorueng\2 Co-Chief Executive Officer; Chief Creative Officer (Creative Division)

3. Mrs. Saithip Montrikul Na Audhaya\2 Co-Chief Executive Officer 4. Mr. Kittisak Chuang-a-roon Chief Operating Officer (Music Business Division) 5. Mr. Sumeth Damrongchaitham Chief Operating Officer (Corporate Support and Business Development) 6. Mr. Krij Thomas Chief Operating Officer (Music Business Division), Managing Director (Grammy Gold) 7. Mr. Wichian Rerkpaisarn Managing Director (Genie Records) 8. Mr. Santisuk Chongmankong Managing Director (GMM Live) 9. Mr. Suwat Damrongchaitham Managing Director (Digital Business) 10. Mr. Sirichai Tantiponganant Chief Financial Officer

Note: 1) Mr. Paiboon Damrongchaitham was appointed the Chairman of the Company Advisor according a resolution reached at the 3/2008 Board of Directors Meeting held on 31 July 2008, effective as of 1 August 2008. The roles and responsibilities of this position will be to focus on determining strategies, providing advice and searching in three areas, namely business operations, investment management and centralized management under the new management framework where the Chairman of the Company Advisor will report directly to the Board of Directors. Moreover, Mr. Paiboon is not a member of the Management Team, as defined by the SEC and SET, but is a person who is privy to the information and a participant in setting the Company’s policies. 2) At the Board of Directors Meeting 1/2009 held on 27 February, 2009, the resolution was to appoint Mrs. Saithip Montrikul Na Audhaya as Co-Chief Executive officer together with Ms. Boosaba Daorueng

Details of each director and senior manager is in Management Team Table page 129

The Company has reported all changes in share ownership of Grammy at the Board of Directors meeting every six months. The summary of shares held by members of the Board of Directors, Executive Committee and members of the Management (as defined by the SEC and SET) as at 31 December, 2009, compared to 2008 is as follows:

Number of Shares Held Name Position As at 31 December As at 31 December Increase/ 2009 2008 (decrease)

1. Mr. Paiboon Damrongchaitham A 285,095,430 280,647,930 4,447,500

2. Mr. Chai Nasylvanta\1 A 1,300,000 - 1,300,000 3. Mr. Dej Bulsuk A - - - 4. Mr. Weerawong Chittmitrapap A - - -

5. Mr. Wanich Jarungidanan\1-2 A 405,500 - 405,500

6. Ms. Boosaba Daorueng\1-2 A,B,C 1,500,200 1,500,000 200

7. Mrs. Saithip Montrikul Na Audhaya\1 A,B,C 100 - 100

8. Mr. Krij Thomas\1 A,B,C 1,320,000 900,000 420,000 9. Mr. Sumeth Damrongchaitham A,B,C - - - 10. Mr. Takonkiet Viravan A,B 5,775,700 5,775,700 - 11. Mr. Kreingkarn Kanjanapokin\1 A,B 1,546,800 - 1,546,800

053 Number of Shares Held Name Position Asat 31 December Asat 31 December Increase/ 2009 2008 (decrease)

12. Mr. Sataporn Panichraksapong\1 A,B 200,000 - 200,000

13. Mr. Kittisak Chuang-a-roon\1-2 B,C 1,960,400 1,960,000 400

14. Mr. Wichian Rerkpaisarn\1 B,C 540,100 540,000 100

15. Mr. Santisuk Chongmankong\1-2 B,C 1,500,200 1,500,000 200 16. Mr. Suwat Damrongchaitham B,C - - - 17. Mr. Kamron Pramoj na Ayutthaya B - - - 18. Mr. Yongsak Ekprachyasakul B - - - 19. Mr. Sirichai Tantiponganant B,C - - -

Meaning of each position: A: A member of the Board of Directors B: A member of the Executive Committee C: A member of the Management Team (as defined by the SEC and SET) Note: 1) The number of shares that increased from resulted from an equity buy-out from GMM Media PCL (Media). On 19 February, 2009, Media delisted from the Stock Exchange of Thailand, and thus the company’s shares converted into GMM Grammy PCL shares. 2) Included shares held by spouses.

2. Selection of Directors and Management Selection of Directors The Nomination and Remuneration Committee is responsible for setting guidelines and policies in nominating Board of Directors and various committee members, listing directors’ qualifications and to search, select and propose appropriate persons for the position of Company’s director, whose terms have expired or become vacant and to propose candidates for approval from the Board of Directors and/or shareholders. Moreover, the Company’s Articles of Association has stipulated that the Shareholders’ meeting elect the Company’s Directors using the following methods: 1. Each shareholder has the number of votes equal to the number of shares held. 2. Each shareholder must use all votes as per method number 1 to vote for one director or a group of directors. The votes cannot be split. 3. Candidates with the greatest number of votes and all runners up are elected directors, based on the number of directors needed at that time. In the event that the last director position to be filled is met with more than one qualified candidate winning equal numbers of votes, the Chairman of the meeting has the final vote. Selection of Management Team The Company’s Authority and Procedure Manual has set the following guidelines: 1. The appointment of the Chief Executive Officer must be proposed to the Board of Directors for approval. 2. The appointment of senior management, from the level of Executive Vice President and up shall be approved by the Executive Committee. 3. Appointment of management below the level of Executive Vice President shall be approved by the Chief Executive Officer. 3. Management Remuneration 1) Monetary Remuneration (A) Directors Monetary remuneration for directors consists of meeting allowances and annual directors’ gratuity, which varies with the Company’s annual performance. Allocating remuneration to the Board of Directions is dependent upon each member’s individual attendance at the Board of Directors meetings. Remuneration for 12 directors, including 4 members of the Audit Committee, in 2009 amounted to 5,746,000 baht in total, with details as follows:

Remuneration Remuneration Total Name Title for the Board of for the Audit remuneration in Directors\2 Committee 2009 (Baht/year)

1. Mr. Paiboon Damrongchaitham Chairman 783,000 - 783,000

Independent Director/ 2. Mr. Chai Nasylvanta Chairman of Audit 313,000 200,000 513,000 Committee

054 CAPITAL STRUCTURE AND MANAGEMENT STRUCTURE

Remuneration Remuneration Total Name Title for the Board of for the Audit remuneration in Directors\2 Committee 2009 (Baht/year)

Independent Director/ 3. Mr. Dej Bulsuk Member of Audit 522,000 150,000 672,000 Committee Independent Director/ 4. Mr. Weerawong Chittmitrapap Member of Audit 522,000 150,000 672,000 Committee Independent Director/ 5. Mr. Wanich Jarungidanan\1 Member of Audit 313,000 150,000 463,000 Committee

6. Ms. Boosaba Daorueng Director 472,000 - 472,000

7. Mrs. Saithip Montrikul Na Audhaya Director 472,000 - 472,000 8. Mr. Krij Thomas Director 472,000 - 472,000

9. Mr. Sumeth Damrongchaitham Director 472,000 - 472,000

10. Mr. Takonkiet Viravan\1 Director 189,000 - 189,000

11. Mr. Kreingkarn Kanjanapokin\1 Director 283,000 - 283,000

12. Mr. Sataporn Panichraksapong\1 Director 283,000 - 283,000 Total 5,096,000 650,000 5,746,000

Note: 1) Mr. WanichJarungidanan , Mr. Takonkiet Viravan, Mr. Kreingkarn Kanjanapokin and Mr. Sataporn Panichraksapong were appointed additional directors at the 2009 Annual General Meeting, effective on 27 April 2009 2) The Directors’ remuneration includes meeting gratuities for 2009.

(B) Executive Committee and Management Executive Committee members do not receive monetary remuneration for their position. Monetary remuneration for the Management Team is in the form of salaries, bonuses and other remuneration such as company cars, car allowances in lieu of company cars and mobile phones for 9 management team members (excluding the Chairman of the Company Advisor) totaled 92.44 million baht in 2009. 2) Other Remuneration None 4. Corporate Governance The Board of Directors intends to adopt the Good Corporate Governance policies outlined by The Organization for Economics Co-operation and Development (OECD) and principles of Good Corporate Governance that the SET encourages listed companies to practice, to create an organization that is effective and lays the foundation for sustainable growth. The Company has incorporated these guidelines as part of its business practice, as follows. 1. Corporate Governance Policy The Company’s Board of Directors recognizes the importance of good corporate governance in order to increase transparency, the Company’s competitiveness and confidence for shareholders, investors and stakeholders, and to create additional long-term value for the Company. In 2005, the Board of Directors announced that the Company will pursue a Good Corporate Governance Policy effective from 18 February 2005 onwards. A portable version of the Company’s corporate governance handbook with concise and easy-to-understand content was produced and distributed, together with postings on the Company’s intranet and website. www.gmmgrammy.com The Board has supported the revision and amendments to the corporate governance policies so that they are up-dated and applicable to the organization’s changing environment, as well as being relevant for supervising the varied and new business units that have emerged. During the Board of Directors’ meeting 1/2551 on 28 February 2008, the Board evaluated and approved a few amendments to policies related to supervising and operating the Company’s businesses, in accordance with various Divisions’ new rules. The Good Corporate Governance policies are divided into 8 categories as follows: 1. Board of Directors and the Sub-Committees 2. Shareholders’ rights and equitable treatment of all shareholders 3. Role toward stakeholders 4. Information disclosure and transparency 5. Policy on connected transactions 6. Treatment of insider information 7. Internal controls and risk management 8. Business Ethics

055 CAPITAL STRUCTURE AND MANAGEMENT STRUCTURE

The Company continually evaluates its policies and work plans, as well as monitors the progress of the organization’s adherence to and development of good corporate governance policies to raise itself to international standards. The Company also encourages its employees to apply these policies to their work, making it a part of the organization’s culture. During the 1/2551 Board of Directors’ meeting held on 28 February 2007, the Board approved amendments and additions to the principles and policies of good corporate governance, so that it is more up-to-date and clearer. The main principles are summarized as follows: 1. Treating Shareholders with Equality 1.1 The Company uses voting ballots on occasions that require special resolutions from shareholders like raising capital, changing the Company’s regulations or Articles of Association. This is done for greater transparency and verifying purposes if a dispute later arises. 1.2 Improve the system and channels of communication for shareholders and stakeholders to that will allow them to easily notify the independent Audit Committee by regular postal service, the Company’s website, or via e-mail at [email protected] These independent directors will take on requests, illegal or unethical acts, and answer queries about financial statements or the internal audit system, which will be pursued and presented to the Board of Directors. The Audit Committee can be contacted from January 2008 onwards. The Secretary of the Audit Committee is responsible for summarizing and presenting issues to the Audit Committee for further action. 1.3 Improve the system so that minority shareholders can still play a part in the Annual General Meeting in 2010, by presenting the agenda ahead of time, and submitting the names and qualifications of Director nominees through the company website (http://www.gmmgrammy.com) under the heading “Investors’ Information” between 18 December 2009 and 31 January 2010. However, during this period, no shareholders had proposed any additional agenda ahead of time or nominated any other suitably qualified candidates as Directors. 2. Responsibilities of the Board of Directors The Chairman and senior management team members assuming director positions in other companies is premised on guidelines in the Public Company Limited Act, B.E. 2535 3. Other 3.1 Good corporate governance policies will be revised every 2 years or as appropriate to ensure that the documents are up-dated and relevant to the changing business environment and the Stock Exchange of Thailand’s or other regulatory bodies’ additional policies. 3.2 Determine new conditions for authorizing proxies during the general shareholders’ meeting, as announced by the Department of Business Development, Issue no. 5, B.E. 2550 (effective as of 1 January 2007) 3.3 The Management will prepare and present reports, detailing the Board of Directors and the Executive Committee’s shareholdings, every 6 months to the Board of Directors. 3.4 The Company Secretary will summarize and report on all stakeholders: directors, management and persons with connected transactions with the Company, and all the changes that had occurred at the Board of Directors meeting every 6 months.

The Board of Directors remains seriously committed to using Good Corporate Governance Policies to manage and operate the Company, and will continue to develop itself with external assessments by the following institutions: - The Corporate Governance Report of Thai Listed Companies 2009, assessed by the Thai Institute of Directors (IOD), together with the support of the SET and SEC, listed GMM Grammy Pcl was classified as “Very Good”, as it was assessed in 2008. (In 2007, there was no Corporate Governance Report of Thai Listed Companies) The results have improved over last year from 84% to 88%. In 2009, the Company was rated among 290 listed companies that were screened by analysts and investors. In 2008, the list assessed 448 companies. - The Thai Investors Association assessed the Company at its 2009 Annual General Meeting through its AGM Checklist. The Company was rated “Excellent Role Model” because it had received the full 100 points. (In 2009, grades did not have 10 point bonus scores). This assessment was conducted at 497 companies, of which only 41 companies attained the “Excellent Role Model” score. In 2008, the Company’s score on the AGM Checklist was 105.5 points, which was rated “Excellent”. In 2008, in addition to a 100 points for full score, there was an additional 10 point bonus, bringing the grand total to 110 possible points. Such results reflects the Company’s determination to develop its corporate governance systems and processes, through its Board of Directors, Executive Committee and Management team, and employees to help build the Company’s credibility image amongst shareholders, investors and stakeholders, and is a way of adding value to the corporation, ensuring stable long-term growth.

The Company has appointed a working team to monitor good corporate governance and another team to oversee business ethics since 2004 to encourage the Company and its subsidiaries’ adherence to the policies. This was done to instill confidence in its shareholders, investors, trade partners and all related parties. In 2009, the Company created a Good Corporate Governance and Ethics Sub-Committee to replace the temporary Good Corporate Governance working team for greater efficacy in ensuring that good corporate governance and business ethics policies are practiced. A list of names, scope of authority and responsibilities of this Sub-Committee as assigned by the Board of Directors is detailed in the “Management Structure” page 052 2. Shareholders’ Rights and Equal Treatment of Shareholders The Company has a policy of treating all shareholders equally in that shareholders have the right to: receive stock certificates and transfer stocks; be notified of all Company’s news and information consistently, accurately, and in a timely manner; receive dividends and any other benefits from the Company; attend shareholders’ meeting, express opinions and suggestions and consider important changes; and receive information about or approve of significant connected transactions, wherein the Company facilitates all shareholders on an equal basis. The date, time and venue

056 for shareholders’ meeting are set and invitations sent out in advance together with the list of identification documents required to attend the meeting. In addition, shareholders can send a proxy or authorize the Company’s independent director to vote on behalf of the shareholder in the event that the shareholder is unable to personally attend. The Company will use ballot cards to vote on topics that require special resolutions from shareholders like increasing capital, changing company regulations or amendments to the Company’s articles of association, which will allow greater transparency and is used for verification purposes in the event of disputes. Shareholders are given equal opportunity and encouraged to ask questions and express their views at Annual General Meetings. All members, and the Chairmen in particular, of the Board of Directors and all Committees, are encouraged to attend the shareholders’ meeting to provide details in the shareholders’ meeting. In 2009, the Company has issued additional measures so that minority shareholders can participate in the 2010 Annual General Meeting, by being notified of the meeting’s agenda ahead of time and submitting the list of qualifications of nominees suited for directorship through the company’s website www.gmmgrammy.com under the heading “Investor Relations”. During 18 December 2009 to 31 January 2010. Yet, no shareholder proposed any agendas or qualified and suitable candidates for the Company. Moreover, the Company posts its invitation letter to the Annual General Meeting, supporting documents, proxy forms and other necessary information in Thai and in English, on the Company’s website (www.gmmgrammy.com) for at least 30 days before the meeting, in addition to sending the actual documents to shareholders, for their support in making their voting decision. The Company also posts the minutes of the Annual General Meeting on the Company’s website within 14 days after the Meeting has concluded. 3. Stakeholders’ Rights The Company recognizes the importance of rights of all stakeholders, including parties both within the Company and outside, which include shareholders, employees, customers, trade partners and/creditors, competitors and the general public. For transparency and fairness to all stakeholders, the Company has set forth policies for the Board of Directors, management and employees to follow in the Code of Ethics and Employee Manual. The Code of Ethics, approved by the Board of Directors at 3 February 2005, has been communicated to every director, manager, and employee so they can understand and comply with. The summary of the code of conduct is as follows: To Shareholders The Company is committed to operating with knowledge, ability, loyalty, honesty, transparency and fairness, for the Company’s growth and stability, and for shareholders to receive lasting returns from effective and efficient operations. Shareholders are to receive accurate, factual reports with reasonable supporting documents on the status and performance of the Company in a consistent and timely manner. To Customers The Company focuses on conducting business that is correct, fair, and responsive to customers’ needs by providing good products and/or services at reasonable prices through quality employees, using innovative modern technology, while protecting customers’ confidentiality. The Company also provides the opportunity for customers to complain and find corrective measures and/or respond to the customers’ needs as appropriate. To Trade Partners and/or Creditors The Company strictly abides by the conditions and contracts agreed to with trade partners and/or creditors, and does not request or accept goods or other benefits that are not a part of honest business transactions. If the Company cannot abide by such conditions, or if there is evidence of fraud, the Company will inform or release such information to the trade partners and/or creditors to together correct the problem and to prevent any damage. To Competitors The Company treats competitors with good business manners and does not seek their confidential information through inappropriate or unlawful approaches. The Company will not intentionally destroy any competitors’ reputation through groundless allegations. To Employees The Company encourages continuous knowledge development to enhance employees’ ability at all levels, and provide them with appropriate, fair compensation and welfare in accordance with labor and welfare laws. The Company respects the employees’ personal rights and responsibilities and ensures a good working environment for the health and safety of employees’ lives and properties. In addition, the Company encourages employees to conduct themselves with good values and to work together harmoniously within the organization. The Company also promotes employee participation in determining the outcome of their work and in solving the Company’s problems. To Society The Company creates and supports activities beneficial to the community and society at large, and consciously fosters the concept of social responsibility to the community and the general public in all employees. The Company does not enter into nor support actions which are illegal or damaging to the reputation of the country, natural resources and the environment, and may be dangerous to the society and the stability of the country. The Company has also provided a channel for receiving requests, opinions and suggestions, as well as reports about actions that indicate employee related fraud or misdemeanors. Reports can be filed by employees, those who have interests and direct dealings with the Company to the Audit Committee via the website (www.gmmgrammy.com) so the information can be used to develop, correct and improve the issue more effectively. To protect the confidentiality of the party filing the report, the parties with knowledge of the report will be limited to related parties and those assigned to pursue the issue.

057 4. Annual General Shareholders Meeting The Company is aware of the importance of organizing the Annual General Meeting (AGM), in accordance with Good Corporate Practices and encourages the arrangement of an AGM because it gives shareholders the right to participate in monitoring the Company’s progress and be a part of important decision making sessions. Thai and English language invitations, annual reports and supporting documents were sent to shareholders at least 14 days before the meeting, with the Board of Directors’ opinion on each agenda, specifying reasons, explaining the necessity for the decision, and the positive and negative implications of each agenda’s decision, so shareholders can study the information prior to the meeting. In addition, proxy forms are enclosed for shareholders who cannot attend. The Company announces the same information (excluding the annual reports) both in Thai and English in the Company’s website (http://www.gmmgrammy.com) 30 days before the meeting to provide sufficient time to study the agenda. The Company will also post a notice the date, time and venue of the meeting (in Thai and English) in newspapers for at least 3 days before the meeting over 3 consecutive days, in case shareholders want to authorize someone else to attend the meeting, or an independent director of the Company to attend the meeting and vote on his/her behalf. These measures comply with conditions laid out by the Department of Business Development, Ministry of Commerce and other regulatory authorities. The minutes of the Annual General Meeting, in Thai and in English, will be broadcasted to shareholders via the Company website within 14 days of the meeting convening. At the 2009 Annual General Meeting, a total of 10 directors attended, including the Company’s Chairman, Chief Executive Officer, and Chairs of various the Sub-Committees (the Audit Committee, Nomination and Remuneration Committee, and Risk Management Committee), as well as a member each from the Board of Directors, Executive Committee, Audit Committee, Nomination and Remuneration Committee, and the Auditor. The chairman of the meeting gave equal opportunity to shareholders to review the Company’s operations, ask questions, and make suggestions, all of which have been duly documented in the minutes of the meeting. The minutes of the meeting was posted to the Company’s website within 14 days after the meeting, so shareholders could review it without waiting until the next meeting. In addition, the Company has good system of documenting the minutes of each meeting for review and reference purposes. 5. Leadership and Vision The Board of Directors is determined to move the Company’s business forward with stable growth, to create suitable returns to investors. On the whole, the Board of Directors has fulfilled its responsibilities using their knowledge, abilities, expertise, determination and caution, to their utmost to manage the Company, abide by rules, regulations, and good business conduct, whilst remaining mindful of the interests of all stakeholders. The Board of Directors has appointed an Executive Committee to manage daily operations, and has clearly delineated different duties and responsibilities for the Board of Directors, Executive Committee and other Committees. The Board of Directors will set forth the vision and mission of the Company and evaluate the strategies, policies, business plans and budgets proposed by the management, while ensuring that there is a mechanism to control, review and evaluate so objectives and policies are carried out to achieve the highest benefits of the shareholders, while taking benefits for all stakeholders into consideration. In 2005, the Board of Directors amended and announced the new vision and mission of the Company as follows: Vision: To be a leader in creating and producing of all forms of entertainment, in tandem with all types of media and technological developments, which provides a great quality of life and unlimited happiness. Mission: Engage in the continuous creation of excellent and innovative work Encourage a learning organization Enrich people so they are passionate and skillful in their work and enjoy a better quality of life Endorse social responsibilities and activities To enable the Board of Directors to fulfill their objectives and roles and responsibilities within their scope of assigned authority, the Company has supported training directors on Good Corporate Governance, including the introduction of the Company’s business and the way its business is conducted, as well as providing documents and information that would benefit new directors. 6. Conflicts of Interest To prevent conflicts of interest in potentially problematic transactions, the Board of Directors has carefully specified policies and procedures for approving connected transactions in the Company’s Authorization and Procedure Manual. The Company also follows the SET rules and regulations by setting prices and conditions on an arm’s length basis, and disclosing details on the value of the transaction, listing the contracting parties, and explaining the reasons why the transaction is necessary, as per SET rules and regulation in the information memorandum and/or Company’s annual information disclosure (form 56-1) and in the annual report’s “Connected Transactions” section. The Company has deemed that changes in securities holdings by directors, executive members and those in management (as per definition of SEC and SET), including spouses and offspring (minors), be reported in the Board of Directors’ meeting at least twice a year for full disclosure and transparency in accordance to Good Corporate Governance policies. Moreover, the Company emphasizes the importance in the safekeeping and usage of the Company’s insider information, to avoid misuse for personal benefit and affiliates’ gains. 7. Code of Ethics The Company conducts its business with integrity, transparency, fairness, and ethics, to gain the confidence of its shareholders, customers, trade partners and/or creditors, competitors, employees and the public. The Company abides by the law, standards and good business conduct including the disclosure of financial information, and will not seek

058 CAPITAL STRUCTURE AND MANAGEMENT STRUCTURE personal interests by using inside information, disclose such information to outsiders, or cause any conflicts of interest. The Company continuously supports and encourages activities which are beneficial to society, culture and traditions. The Company also encourages, develops and respects intellectual property rights and evaluates such intellectual property with fairness, without barriers, discrimination or unequal treatment. In addition, the Company has established a written Code of Ethics and Procedure Manual, approved by the Board of Directors on 3 February 2005, and has since been communicated to all directors, management and employees so they acknowledge, understand, and comply by them. The Board of Directors has also installed enforcement procedures to ensure that the code is strictly followed. 8. Checks and Balance with Non-Management Directors The Company’s Board of Directors as at 31 December 2009 comprises 12 qualified members: Management Directors 8 persons Independent non-management Directors 4 persons (33.33% of total Board of Directors) 9. Aggregation or Segregation of Management The Company has clearly stipulated the segregation of the authority and duty of the management to approve and manage in the Company and its subsidiaries. This is further delineated by type of business transactions in different categories: management, human resources, investment, finance, production and procurement of goods, fixed assets, expenses, approval of connected transactions, and authorization for payments to bank accounts, all of which are included in the Company’s Authorization and Procedure Manual issue 1/2002 dated 30 October 2002, and policies on authorizing connected transactions amended with approval by Board of Directors’ Meeting No. 5/2004 on 15 November 2004, in accordance with changes announced by the SET. 10. Directors’ and Management’s Remuneration • Board of Directors’ and Committees’ Remuneration: The Nomination and Remuneration Committee determined the criteria and policy or calculating compensation for Board of Directors and Sub-Committees, by evaluating each director on the basis of their duty, workload, accountability and responsibility, performance, and expected contributions. The Committee also compared the compensation levels against companies in similar industries, before presenting the proposal to the Board of Directors and/or shareholders meeting for approval. • Management’s Remuneration: Compensation for management is in accordance to principles and policies set out by the Board of Directors, which correlates with the performance of the Company and the performance of each manager, and requires approval from the Board of Directors. • Remuneration in 2009: Details of compensation of the Company’s directors and management are shown under clause “Board of Directors, Executive Committee and Management Remuneration” on page 054 11. Board of Directors Meetings Board meetings are set one year in advance, with at least 4 meetings in a year. Extraordinary meetings may be called as necessary. Agendas are set in advance, divided into clear categories, such as to approve, ratify, evaluate, acknowledge, and monitor progress. The Secretary to the Board sends invitations together with the meeting’s agenda and supporting documents 7 days before the meeting so that directors have sufficient time to study the information. Each meeting normally lasts 1-2 hours. At each meeting, the Chairman grants every director the opportunity to freely express their opinions. In 2009, the Board of Directors held 4 regular meetings and 1 extraordinary meeting. Details of attendance of each of the directors are as follows:

Attendance/Total Number of Meetings Name Ordinary Extraordinary Total Meetings Meetings

1. Mr. Paiboon Damrongchaitham 3/4 1/1 4/5 2. Mr. Chai Nasylvanta 2/4 1/1 3/5 3. Mr. Dej Bulsuk 4/4 1/1 5/5 4. Mr. Weerawong Chittmitrapap 4/4 1/1 5/5 5. Mr. Wanich Jarungidanan\1 3/3 - 3/3 6. Ms. Boosaba Daorueng 4/4 1/1 5/5 7. Mrs. Saithip Montrikul Na Audhaya 4/4 1/1 5/5 8. Mr. Krij Thomas 4/4 1/1 5/5 9. Mr. Sumeth Damrongchaitham 4/4 Note: 1/1 5/5 1) Mr. Wanich Jarungidanan, 10. Mr. Takonkiet Viravan\1 2/3 Mr. Takonkiet Viravan, Mr. Kreingkarn - 2/3 Kanjanapokin, and Mr. Sataporn 11. Mr. Kreingkarn Kanjanapokin\1 3/3 Panichraksapong were appointed - 3/3 to the Board of Directors at the 12. Mr. Sataporn Panichraksapong\1 3/3 2009 Annual General Meeting held - 3/3 on 27 April 2009.

059 CAPITAL STRUCTURE AND MANAGEMENT STRUCTURE

Complete details of all meetings were documented in the meetings’ minutes, certified by the Board of Directors and are available for review by directors and related parties. 12. The Sub-Committees The Board of Directors has established the Sub-Committees, whose members include the Board of Directors, independent directors and management, possessing the expertise and knowledge appropriate for each Committee, to perform special responsibilities as assigned prior to presenting the results to the Board of Directors for endorsement or confirmation. The Sub-Committees include: • Audit Committee • Executive Committee • Nomination and Remuneration Committee • Risk Management Committee • The Sub-CG and Ethics Committee Audit Committee The Audit Committee of GMM Grammy Plc. and subsidiaries (GMM Grammy Group Plc) was first appointed on 13 May 1999 in accordance with SET regulations. The 1/2009 Board of Directors’ meeting held on 27 February 2009, appointed Mr. Chai Nasylvanta, an Independent Director and member of the Audit Committee, Chairman of the Audit Committee. During the 2009 Annual General Meeting, it was agreed that Mr. Wanich Jarungidanan be appointed an Independent Director, effective as of 27 April 2009. Moreover, during the Board of Directors Meeting No. 1/2009 held on 27 February 2009, the Board evaluated and approved a change in the qualifications of Independent Directors and amended the Audit Committee Charter in line with changes stipulated by the SET and SEC. Therefore, of the four Independent Directors in the Board of Directors, there is at least one director who possesses a keen understanding of financial matters and is sufficiently experienced to review financial statements. (Mr. Chai Nasylvanta, Chairman of the Audit Committee). The list of names and scope of duties and responsibilities assigned by the Board of Directors is in accordance with rules for Audit Committee Charter and good corporate governance. Details are shown in section “Management Structure” pages 049 , to support a good corporate governance system. In 2009, the Audit Committee held 4 meetings. The summary of attendance of Audit Committee members is as follows:

Name Ordinary Meetings

1. Mr. Chai Nasylvanta\ 1 - 2 2/4 Chairman of the Audit Committee

2. Mr. Dej Bulsuk\ 1 4/4 Member of the Audit Committee 3. Mr. Weerawong Chittmittrapap 4/4 Member of the Audit Committee 4. Mr. Wanich Jarungidanan 3/3 Member of the Audit Committee Notes: 1) At the Board of Directors Meeting No. 1/2009 held on 27 February 2009, the resolution was passed to appoint Mr. Chai Nasylvanta, Independent Director and a member of the Audit Committee, Chairman of the Audit Committee, and Mr. Dej Bulsuk would become a member of the Audit Committee, effective as of 27 February 2009. Moreover, there was a resolution to appoint Mr. Wanich Jarungidanan as a member of the Audit Committee, after being appointed an Independent Director during the 2009 Annual General Meeting. 2) Mr. Chai Nasylvanta is a member of the Audit Committee is sufficiently knowledgeable and experienced enough to perform financial reviews. Complete details of all meetings were documented in the minutes of the meeting, certified by the Audit Committee and available for review by audit committee members and related parties. Executive Committee The Executive Committee was appointed by the Board of Directors, and comprises 14 directors whose names, roles and responsibilities are detailed in section “Management Structure”, pages 050 In 2009, the Executive Committee held 12 meetings regarding the daily operations of the Company to determine corporate strategies, policies, business plans and other duties. The directors’ attendance is summarized as follows:

Name Position Ordinary Meetings (Times)

1. Ms. Boosaba Daorueng\1 Co-Chief Executive Officer 12/12

2. Mrs. Saithip Montrikul Na Audhaya\1 Co-Chief Executive Officer 9/12 3. Mr. Kittisak Chuang-a-roon Executive Director 12/12 4. Mr. Krij Thomas Executive Director 12/12 5. Mr. Santisuk Chongmankong Executive Director 12/12 6. Mr. Wichian Rerkpaisarn Executive Director 11/12 7. Mr. Sumeth Damrongchaitham Executive Director and Secretary 11/12 to the Executive Committee

8. Mr. Suwat Damrongchaitham Executive Director 10/12

060 Name Position Ordinary Meetings (Times)

9. Mr. Takonkiet Viravan\2 Executive Director 4/10

10. Mr. Kamron Pramoj na Ayutthaya\2 Executive Director 5/10

11. Mr. Yongsak Ekprachyasakul\2 Executive Director 8/10

12. Mr. Sataporn Panichraksapong\2 Executive Director 9/10

13. Mr. Kreingkarn Kanjanapokin\3 Executive Director 7/9

14. Mr. Sirichai Tantiponganant\3 Executive Director 9/9

Note: 1) At the Board of Directors Meeting No. 1/2009 held on 26 February 2009, there was a resolution to appoint Mrs. Saithip Montrikul Na Audhaya Co-Chief Executive Officer, effective on 27 February 2009. 2) At the same meeting, the Board appointed Mr. Takonkiet Viravan, Mr. Kamron Pramoj na Ayutthaya, Mr. Yongsak Ekprachyasakul, and Mr. Sataporn Panichraksapong as Executive Directors, effective on 27 February 2009. 3) On the 2/2009 Board of Directors meeting held on 3 April 2009, there was a resolution to appoint Mr. Kreingkarn Kanjanapokin and Mr. Sirichai Tantiponganant as Executive Directors, effective on 3 April 2009. Detailed content of all meetings were documented in the minutes of the meeting, certified by the Executive Committee, are complete and available for review by Executive Committee members and related parties. Nomination and Remuneration Committee The Nomination and Remuneration Committee was appointed by Board of Directors’ Meeting no. 1/2009 held on 27 February 2009. Names, roles and responsibilities of the four-person committee are detailed in Section “Management Structure” on pages 051 In 2009, the Nomination and Remuneration Committee held 1 meeting to evaluate the Board of Directors and Audit Committee’s compensation in 2009, including proposing candidates for appointment as directors in place of those whose tenures have expired, and appointing additional directors. The summary of attendance of Nomination and Remuneration Committee members is as follows:

Name Ordinary Meetings

1. Mr. Paiboon Damrongchaitham 1/1 Chairman of the Nomination and Remuneration Committee 2. Mr. Chai Nasylvanta 1/1 Member of the Nomination and Remuneration Committee 3. Mr. Dej Bulsuk 1/1 Member of the Nomination and Remuneration Committee 4. Mr. Sumeth Damrongchaitham 1/1 Member of the Nomination and Remuneration Committee

Detailed and complete content of all meetings were documented in the minutes of the meeting, certified by the Nomination and Remuneration Committee and are available for review by Nomination and Remuneration Committee members and related parties. Risk Management Committee The Risk Management Committee was appointed by the Board of Directors’ Meeting no. 1/2005 held on 3 February 2005 and additional members were appointed in 2007 and 2008. As at 31 December 2008, the Committee comprises 9 members, whose names, roles and responsibilities, are detailed in Section “Management Structure” pages 051

In 2009, there was 1 meeting held on the 25 February 2009, attended by all the members of the Risk Management Committee, to acknowledge the operations of the Sub-Risk Management Committee in 2008, and approve plans to improve risk management in 2009. On 26 February 2009, the Risk Management Committee presented its annual report on the operations and progress made in developing the Group’s risk management system in 2009, which can be summarized as follows:

1. Advised the Sub-Committee on developing a risk management system that will achieve the Group’s risk management policies and framework 2. Assessed and acknowledged the Sub-Committee’s performance in 2009 3. Assessed, acknowledged and approved risk management system development plans in 2010.

Detailed and complete content of all meetings were documented in the minutes of the meeting, certified by the Risk Management Committee and are available for review by Risk Management Committee members and related parties.

061 13. Internal Control and Internal Audit The Board of Directors recognizes the importance of an internal control system, and has installed an internal control system that governs the financial, management and operational aspects for greater effectiveness and efficiency, in accordance with related laws and regulations, while emphasizing continuous improvement according to COSO (The Committee of Sponsoring Organizations of the Treadway Commission). The Board has set clearly written guidelines of duties and authorities for the management, as well as laying down controls and ways that the Company’s assets can be used to generate the greatest benefits. To serve as checks and balances, the roles and duties of front-line operators, supervisors and evaluators are also clearly delineated. In addition, the Company ensures that there is a financial reporting system to be presented to those in the direct line of responsibility. The Board of Directors has expressed its opinion on the sufficiency of the Company and subsidiaries’ internal control system in Section “Internal Controls” on page 064 The Company’s Internal Audit Department is responsible for reviewing the operation systems as well as evaluating the efficiency and sufficiency of the Company and subsidiaries’ internal control system. To ensure that major operations and important financial transactions of the Company and subsidiaries are conducted efficiently and that thepolicy and objectives set by the management have been fulfilled. The Department also reviews whether the Company abides by relevant laws and regulations. So that the Internal Audit Department remains independent in order to be able to fully assess and perform its duty as a checks and balances, the Board of Directors has stipulated that the Internal Audit Department report directly to the Audit Committee and perform internal audit tasks according to an annual plan approved by the Committee. The Department reports on the results of the review and makes suggestions to the Audit Committee and Chief Executive Officer in a timely and consistent manner. The Company views the importance of having risk management procedures to minimize internal and external risk factors to a level appropriate and acceptable for the conditions of each business unit by actively encouraging the participation of management and employees at all levels. In 2009, the Board of Directors evaluated and approved the Risk Management Committee Charter, as well as the risk management framework and policies for the Company as proposed by the Risk Management Committee. The Board has reviewed the appointment of a Risk Management Sub- Committee, and the scope of work and responsibilities of this Sub-Committee. The Risk Management Committee will coordinate with the Audit Committee on reporting important risks and solutions to the Board of Directors and the management team. The Risk Committee will also review the risk management policies and framework as necessary and propose to the Board of Directors for approval. 14. Board of Directors’ Report The Board of Directors is responsible for reporting the consolidated financial statement of the Company and subsidiaries (after being audited by the Company’s external auditor) and financial information as reported in the annual report. The financial statements are prepared in accordance with generally accepted accounting standards, using appropriate and consistent accounting policies and that sufficient information is disclosed in the notes to financial statements. The Board of Directors has appointed an Audit Committee of independent directors responsible for the quality of financial reports and the internal control system. The Audit Committee’s opinion is stated in the Audit Committee report on page 05 3 of the 2009 Annual Report. In the Board of Directors’ meeting on 26 February 2010 attended by every member in the Audit Committee, the Executive Committee and Internal Audit Department to evaluate the sufficiency of the Company and subsidiaries’ internal control system that the management had divided into 5 categories: The Organization and the Environment, Risk Management, Management Operations Control, Management Information Systems, and Information Communication and Monitoring System. The Board of Directors has expressed its opinion, which was in line with the Audit Committee, on the adequacy of the Company and subsidiaries’ internal controls system in Section 7 “Internal Controls”, on page 064 The Board of Directors continues to be seriously committed to using Good Corporate Governance policies to manage and operate the Company. This commitment helps build the Company’s credibility and image in the investment community and the public. The Board of Directors has initiated an annual Board Self-Assessment to create a framework for evaluating the Board’s ability to perform its duties. The Company started using a new evaluation form from The Stock Exchange of Thailand’s Corporate Governance Center since 2007. In 2009, the Board Assessment results indicated that the number of Board members was suited to the business. Moreover, the Board consists of knowledgeable, capable, highly experienced members who are well-versed in the business. Moreover, there is at least 1 out of 3 Board members who are not in the Management team, and there are various Committees to support the Board’s work, namely the Audit Committee, Executive Committee, Nomination and Remuneration Committee, and Risk Management Committee. These Committees’ duties and responsibilities are clearly stated and allows the directors adequate time to perform well in their capacity as the Company’s Director.

The Board of Directors participates in the setting of vision, mission, strategy, goals, and consistently reviews and follows up on the Company’s performance. The scope of authority in operating, evaluating and approving financial decisions are clearly set out, emphasizing the importance of accurate financial reports, adequacy of information disclosure and ensuring that there are no conflicts of interest and that all transactions are conducted on an arm’s length basis. In connected transactions and transactions with conflicts of interest, directors with vested interests are prohibited from voting. The Board has cordial relations with the investigation/assessment team that pursues investigations and does not interfere with them while performing their duty. The Board of Directors monitors that the Company has sufficient internal control and risk management systems appropriate for the business and encourages the Company to continue abiding by the SET and SEC’s rules and

062 CAPITAL STRUCTURE AND MANAGEMENT STRUCTURE regulations, Good Corporate Governance Policies and Code of Ethics. 15. Investor Relations The Board of Directors sees the importance of disclosing information which is correct, sufficient, transparent, credible, readily available and timely, including both financial reports and general information which may affect the decision making process of investors and stakeholders of the Company, and ensures that the disclosure is in accordance with SEC and SET guidelines and regulations. The information is disclosed through various means, such as through ELCID available on the SET website (www.set.or.th) and the Company’s website (www.gmmgrammy.com) for quick and easy access. The information disclosed includes business profiles, financial statements, press releases, shareholding structure, organizational structure and annual reports. The Company also posts shareholders’ meeting invitation letters and supporting documents, including proxy forms and other necessary information on the Company’s website (www.gmmgrammy.com) prior to sending the documents to shareholders. The information on Company’s website is consistently updated. Moreover, there is a section for investors to ask questions or lodge any complaints, as a channel of communication between the Company, shareholders and investors. Investors may contact the Investor Relations team at:

Investor Relations Department, 40th Floor GMM Grammy Place, 50 Sukhumvit 21, Klong Toey Nua, Wattana, Bangkok 10110. Telephone : 02-669-9952 and 02-669-9734 Fax : 02-669-9737 E-mail Address : [email protected]

Investor Relations Activities The Company has an investor relations team on hand to provide details on Company’s information, and news of its activities to investors, shareholders, analysts and the general public. In 2009, the IR team’s activities included: 1. Hosting 4 quarterly Analyst Meetings after financial statements for 2008 and Q1 – 3 2009 were submitted, so analysts could meet the Company’s Management team. 2. Participating in 4 “Opportunity Day” activities held at the SET to meet and present quarterly performance and new investments to retail investors.

Organizing a meeting on 4 June 2009 so retail investors can meet the management team and visit the Company’s operations while broadcasting and making a studio tour. Participating in various activities and events organized by securities companies to present information to domestic and foreign institutional investors and analysts on 23 company visits, distribute IR Monthly Releases, and write up press releases whenever there are significant new activities and investments, or business transactions.

5. Treatment of Insider Information The Company emphasizes the importance of safekeeping and protecting against the use of the Company’s insider information. It is stated in the employment contract, working principles, corporate governance policy, Code of Ethics, and Employee Manual that employees shall not seek to benefit themselves or related parties by using Company information or news which is confidential and has not been released to the public. Management staff with access to insider information should not buy or sell the Company’s securities one month before financial statements are publicly disclosed. Moreover, the Company controls and protects the data via information systems that control and/or prevent outsiders from gaining access. The Company also sets the levels of employees’ data accessibility according to their authority and responsibility. In cases where external parties are involved in special projects dealing with information undisclosed to the public and is in the negotiation stage, such projects fall into the scope of insider information as the news may affect the price of the Company’s securities. These external parties must sign confidentiality agreements with the Company until the information is disclosed to the SET and SEC. The management will prepare an annual report on the effectiveness of safe-keeping and preventing the use of insider information for the Board of Directors. 6. Human Resources The Group regards human resources as the most important factor in the organization as it allows the Company’s business to most effectively and efficiently achieve the targets outlined in the Company’s vision. The Company’s policy is to support the development of their personnel at every level in terms of general skills, management and specific professional techniques, as well as making the company a learning organization. Activities that support employee learning and training, both in terms of in-house and external seminars, are encouraged so they continue to develop new ways of thinking and acquiring knowledge from experienced experts in various professions. The Company created the “Berg Fah Library” to facilitate additional research and study as a way of meeting the corporate mission to create a learning organization. Additional employee activities have been arranged so they become better acquainted across the Group, which helps them when they need to coordinate across companies. Moreover, these activities prepare employees for handling competition and adapt to changes in the business, to create new work more effectively and ethically. The Company is aware that internal communication is important, so employees are encouraged to learn as a group and are given opportunities to participate in different ways through intranet postings, public relations boards and internal newsletters. The Company also realizes the importance of improving their employees’ quality of life beyond

063 CAPITAL STRUCTURE AND MANAGEMENT STRUCTURE good social security and compensation plans demanded by law. The Company offers additional rights and benefits such as health care benefits, first aid room, Plearn Kids (special activities during the summer holidays for employees’ children), special loans, life insurance and accident insurance, health checks prior to employment and annual health check-ups and financial assistance. This is to create moral and emotional support as well as helps lightening expenses so that employees feel that there is a certain level of stability at work and for their families, because the Company takes into consideration the greatest possible benefits received by employees. 7. Internal Control The Company values the importance of internal controls and has ensured that the internal control system effectively encompasses financial, managerial and operational aspects according to related rules and regulations, and focuses on continuous development guidelines, of COSO (The Committee of Sponsoring Organizations of the Treadway Commission). The duties and responsibilities of staff and management have to be clearly documented, and the Company’s assets used efficiently. There is a segregation of duties between operators, supervisors and evaluators for the checks and balances purposes. In addition, the Company ensures that there is a financial reporting system to the direct line of responsibility. The Audit Committee appointed by the Board of Directors in accordance with SET guidelines at present comprises 4 independent directors, with the Director of the Internal Audit Department acting as secretary to the Audit Committee. The Committee has duties and responsibilities to ensure the accuracy, completeness and reliability of the financial statements and connected transactions as well as the disclosure of any conflicts of interest. The Committee also coordinates with the Internal Audit Department, External Auditors and the Management team to review the internal control system and ensure compliance with relevant laws and regulations. In addition, the Committee is responsible for reviewing and endorsing the internal audit plan, evaluating the performance and compensation of the Internal Audit Department, selecting and proposing the appointment of annual External Auditors and their audit fees, and performing other functions as assigned by the Board of Directors. The Audit Committee also performed self-assessment evaluation to ensure that it has adequately and effectively completed its duty as assigned. Every member of the Board of Directors, Management team and Internal Audit Department jointly reviewed the internal control system’s sufficiency throughout 2009 at the Board of Directors’ meeting held on 26 February 2010, attended by the Board of Directors, the Audit Committee, Management team and Internal Audit Department, to discuss the sufficiency of the Company and subsidiaries’ internal control systems, that the Management has divided into 5 categories, namely Organization and the Environment, Risk Management, Management Operation Control, Management Information System, and Information Communication and Monitoring System. The Board of Directors was of the same opinion as the Audit Committee that the overall internal control system of the Company and subsidiaries is fairly well established and appropriate to the Company business. There were no malfunctions in the internal control system that could significantly affect the accuracy and reliability of financial statement and hamper the achievement of business goals. Moreover, there is an adequate and appropriate control system for transactions with major shareholder, directors, management and related parties. The Audit Committee and the Management team recognises the importance of good corporate governance supported by continued implementation of quality internal control and risk management systems that are appropriate to the business. Moreover, these systems help limit risks to an acceptable standard, and are necessary to ensure reliable and accurate accounting systems and financial reporting, in accordance with the law and the Company’s Procedure Manual.

064 CONNECTED TRANSACTIONS

Connected Transactions

1. Parties which may have conflicts of interest that have entered into connected transactions with the Company and its subsidiaries In 2009, the Company and its subsidiaries entered into connected transactions with the Company and connected persons where conflicts of interest may have occurred. These included both transactions which were the normal course of business by the Company and subsidiaries, and transactions which were not. Business groups that conducted connected transactions are divided into 3 categories as follows: A) The Group The Group comprises GMM Grammy Pcl. (“the Company”) and subsidiaries of the Company. Details of the Group are as follows:

% Holding by the Company Company Business Type (As at 31 December 2009)

GMM Grammy Public Co., Ltd Complete one-stop music business: creates and produces - various types of music products and in digital formats, collects music copyrights, manages artists and organizes concerts.

Subsidiaries Directly held by the Company MGA Co., Ltd. Rent equipment and accessories 100 % Music Copyright Collection Co., Ltd. Currently inactive 100 % GMM Media Public Co., Ltd. Produces radio programs 99.89 % Extraorganizer Co., Ltd. Currently inactive 100 % Upper Cut Co., Ltd. Currently inactive 100 % GMM Music Publishing Manage music copyrights 100 % International Co., Ltd. Global Music and Media (Thailand) Manage foreign music copyrights 100 % Co., Ltd. More Music Co., Ltd. Currently inactive 100 % Aratist Management Co., Ltd. Currently inactive 100 % Global Music and Media Limited Currently inactive 100 % (Registered on Cayman Islands) GMM Holding Co. Ltd. Invest in other companies 100 % GMM Tai Hub Co., Ltd. Produces and distributes television programs 51 % Tifa Co., Ltd. Currently inactive 100 % Clean Karaoke Co., Ltd. Manages Karaoke Booths 100 % Lucks Music 999 Co., Ltd. Produce original music master copies 50 % 3-RD Co., Ltd. Design marketing strategies 70 % G-Gram Co., Ltd. Manage artists 50 % Joint Venture The Shutter Produces films 80 %

Subsidiaries held by GMM Media Public Co., Ltd. A - Time Media Co., Ltd. Subleases radio stations 100 % Radio Concept Co., Ltd. Currently inactive 100 % Open Radio Co., Ltd. Currently inactive 100 % Exact Co., Ltd. Produces television programs 51 % (49% held by Mass Monitor Co., Ltd.) GMM TV Co., Ltd. Produces television programs 100 % Mass Monitor Co., Ltd. Investments in other companies 100 % Teen Talk Co., Ltd. Subleases television stations 100 % Deetalk Co., Ltd. Produces television programs 100 % Bliss Publishing Co., Ltd. Produces and distributes books 100 % Image Publishing Co., Ltd. Produces and distributes magazines 70 % GMM Inter Publishing Co., Ltd. Produces and distributes magazines 70 % GMM Times Co., Ltd. Produces and distributes magazines 70 % In Publishing Co., Ltd. Produces and distributes magazines 70 % Index Event Agency Public Co., Ltd. Events organizer for all forms of marketing 50%

065 CONNECTED TRANSACTIONS

% Holding by the Company Company Business Type (As at 31 December 2009)

Subsidiaries held by GMM Holding Co., Ltd. GMM Studio Co., Ltd. Provider of studio related services 100 % Sanamluang Garndontree Co., Ltd. Music creation and production 100 % Mifah Co., Ltd. Music academy 100 % GMM Digital Domain Co., Ltd. Digital content provider 100 % Magic Film Co., Ltd. Currently inactive 90.91 % Grammy Publishing House Co., Ltd. Distribute educational publications and media 100 % Global Music and Media (China) Currently inactive 100 % Limited (Registered in Hong Kong) GMM Fitness Club Co., Ltd. Manage fitness center 100 %

Subsidiary held by GMM Digital Domain Co., Ltd. Digital Arms Co., Ltd. Provider of digital content 100 %

Subsidiary held by GMM Music Publishing International Co., Ltd. G.I.P. Management Co., Ltd. Manage copyrights 100 %

Subsidiaries held by GMM Tai Hub Co., Ltd. Sawasdee Taweesuk Co., Ltd. Designs productions, coordinate with media, advertisers 100 % (formerly known as Two To Film Co., Ltd. ) and films; PR service for films Phenomena Motion Pictures Co., Ltd. Produce and distribute films 51 %

Subsidiaries held by Index Event Agency Public Co., Ltd. Event Solutions Co., Ltd. Provide equipment for entertainment at events 100 % Tresbien Co., Ltd. Personal event organizer – decorations and equipment 100 % for all types of events Media Vision (1994) Co., Ltd. Colour, lights, sound systems equipment rentals 51 % G Communications Co., Ltd. Public relations and organizer for all types of exhibitions 50 % Inspire Image Co., Ltd. Design, produce and remove posters and media that 60 % supports sales I Think Ad Co., Ltd. Consultant for creative advertising and public relations 40 % D-63 Co., Ltd. Design and set up stage backdrops 50 % Index Creative Online Co., Ltd. Consultant and designer, producer and adjusts Websites/ 70 % Flash Media

Subsidiary held by Event Solutions Co., Ltd. Aspen Index Event Co., Ltd. Events advisor and organizer in the Middle East 50 % (Based in United Arab Emirates)

Joint Controlled entities held by Sawasdee Co., Ltd Joint Venture Dek Ho (30% held by Produce films 70 % Phenomena Motion Pictures Co., Ltd.)

Joint Ventures with Index Event Agency Public Company Limited Joint Venture I D 2 Design, construct and manage exhibition halls in Thailand 67 % OR Thai-style exhibition halls Joint Venture Fast Track World Expo Tourism business 50% Tours

066 B) Associated Companies

% Holding by the Company Company Business Type (As at 31 December 2009)

Associated company held by the Company Family Knowhow Co., Ltd. Produce television programs 50 %

Associated companies held by GMM Media Public Co., Ltd. Scenario Co., Ltd. Produce television programs 25 % Channel (V) Music (Thailand) Co., Ltd. Produce television programs 25 %

Associated company held by GMM Tai Hub Co., Ltd. Na Dao Bangkok Co., Ltd. Produces films and casts actors 30 %

Associated company held by Index Event Agency Public Co., Ltd. Blue Media Communications Co., Design, produce and distributes print media and other 40 % Ltd. media

Associated company held by Media Vision (1994) Co., Ltd. Encore Co., Ltd. Advise and organize all types of marketing events 37 %

C) Related Companies through Common Directors

Company Type of Business Relationship

Hou Yuu Company Limited Japanese restaurant - Mr. Paiboon Damrongchaitham and Mr. Sumeth Damrongchaitham, who are Directors of the Company and many subsidiaries, are also Directors with signing authority of Hou Yuu Company Limited - Mr. Paiboon Damrongchaitham, the major shareholder of the Company and a shareholder of many subsidiaries, is a major shareholder (46.20%) of Hou Yuu Company Limited - Mr. Chai Nasylvanta who is an Independent Director and Chairman of the Audit Committee holds 4% shares in Hou Yuu Co. Ltd.

Hou Yuu Central World Japanese restaurant - Mr. Paiboon Damrongchaitham and Mr. Sumeth Company Limited Damrongchaitham, who are Directors of the Company and many subsidiaries, are also Directors with signing authority of Hou Yuu Central World Company Limited - Mr. Paiboon Damrongchaitham, a major shareholder of the Company and a shareholder of many subsidiaries, is a major indirect shareholder (48.50%) of Hou Yuu Central World Company Limited

Geurt Fah Company Limited Property rental and related services - Mr. Paiboon Damrongchaitham and Mr. Sumeth Damrongchaitham, who are Directors of the Company and many subsidiaries, are also Directors with signing authority at Geurt Fah Company Limited - Mr. Paiboon Damrongchaitham, a major shareholder of the Company and shareholder of many subsidiaries, is the largest shareholder of Geurt Fah Company Limited with 99.99% holdings

Ruam Fah Company Limited Property rental and related services - Mr. Paiboon Damrongchaitham and Mr. Sumeth Damrongchaitham, who are Directors of the Company and many subsidiaries, are also Directors with signing authority at Ruam Fah Company Limited - Mr. Paiboon Damrongchaitham, a major shareholder of the Company and shareholder of many subsidiaries, is the largest (99.99%) shareholder of Ruam Fah Company Limited

067 Company Type of Business Relationship

Se-Education Public Company Produces books and technical - Mr. Sumeth Damrongchaitham is a Director of the Company Limited publications, serves as a distribution and many subsidiaries, is also a Director of Se-Education and sales channel, and operates Se- Public Company Limited Ed Book Center and its network

Damrongchaitham Foundation Support education and develop - Mr. Paiboon Damronchaitham is a Company Director and culture in youths Chairman of the Foundation Mr. Sumeth Damrongchaitham is a Company Director and Vice-Chairman of the Foundation

CCC Business Development Provides training and seminars - Mr. Dej Bulsuk, an Independent Director and a member of Company Limited the Company’s Audit Committee, is the largest shareholder (94% holdings) and Director with signing authority of CCC Business Development Co. Ltd.

Weerawong, Shinawatra and Piang Law Advisory Firm - Mr. Weerawong Chittmitrapap, an Independent Director Panor Company Limited and a member of the Company’s Audit Committee, is a Director and Chairman of Weerawong, Shinawatra and Piangpanor, with shareholdings of 22.50%.

Ditech Disc Production Company Produces and produces OEM - Mr. Sumeth Damrongchaitham, Director of the Company Limited compact discs and pictures and its subsidiaries, is a Director with signing authority at Ditech Disc Production.

Methee 1 Company Limited Produces and directs theatrical - Mr. Takonkiet Viravan, a Director of the Company is the plays on radio, television. Produces largest shareholder (99.95%) and Chairman of Methee 1. magnetic picture and sound recordings.

2. Characteristics of Connected Transactions The Company creates and produces music, distributes music products including digital music, organizes concerts and manages its artists. Many of the Company’s subsidiaries operate a variety of media businesses to support the core business. Therefore, there are many connected transactions between the Company and its subsidiaries, as well as with the Group, associated companies and related companies with common directors. Connected transactions can be divided into 2 major categories, as follows: • Transactions which are the normal course of business consists of revenue from the sale of music products and copyrights, production and distribution of motion pictures, advertising fees, public relations and sales promotions, profit sharing from tape sales, studio rental services fees, artist management fees, production fees, rental of radio stations, concert production services fees and event organization fees. • Transactions which are not the normal course of business such as rental of office space, loans to subsidiaries, shared administrative management fees, professional fees and purchase of assets which are not related to the Company’s normal course of business.

068 CONNECTED TRANSACTIONS

Connected transactions between the Group and Related Companies with Common Directors, which are the normal course of business

Se-Education Public Company Limited (Produces Relationship shown in 1 C) books and technical publications, serves as a distribution and sales channel. Operates Se-Ed Parties that may have conflicts Book Center network) of interest Weerawong, Shinawatra, and Piangpanor Relationship shown in 1 C) Company Limited (Legal Advisory)

Revenue for the Company consists of: Types of Transaction 1) Selling CDs, VCDs and DVDs 2) Artist management fees

Baht 27.10 million determined by operating costs plus gross profit Total Consideration (divided into the Company’s revenue of Baht 11.12 million and subsidiaries’ revenues of Baht 15.98 million.)

The Audit Committee has the opinion that revenues based on operating costs plus gross profits is according Opinion of the Audit Committee to the normal course of business; the Audit Committee has the opinion that such price setting is reasonable and fair.

069 CONNECTED TRANSACTIONS

Connected transactions between the Group and Related Companies with Common Directors, which are the normal course of business (continued)

1) Hou Yuu Company Limited Relationship shown in 1 C) (operates a Japanese restaurant)

2) Hou Yuu Central World Company Limited Relationship shown in 1 C) (operates a Japanese restaurant)

3) Geurt Fah Company Limited Relationship shown in 1 C) (Property rental and related services)

4) Ruam Fah Company Limited Relationship shown in 1 C) Parties that may have conflicts (Property rental and related services) of interest 5) Se-Education Public Company Limited (Producer Relationship shown in 1 C) of books and technical publications; book sales and distributo, and operator of Se-Ed Book Center and its network)

6) Weerawong, Shinawatr and Piangpanor Company Relationship shown in 1 C) Limited (Legal Advisory)

7) Metee 1 Company Limited (Produces and directs Relationship shown in 1 C) stage plays, and produces magnetic sound and picture recordings)

Service related expenses for the Company consists of: Types of Transaction 1) Food expenses for entertainment and meetings 2) Utilities and parking fees 3) Fees for product displays 4) Legal advisory fees 5) Emcee/show host fees

Baht 43.01 million is the mutually agreed upon price Total Consideration (divided into the Company’s service expense of Baht 22.77 million and the subsidiaries’ service expenses of Baht 20.24 million.)

Outstanding Accounts Payable As at 31 December 2009, the amount is Baht 7.08 million (Company’s accounts payable of Baht 3.97 million and subsidiaries’ accounts payable of Baht 3.11 million)

Opinion of the Audit Committee The Audit Committee has the opinion that other service expenses based on market rates and contract prices, which are also based on market levels, is according to the normal course of business; the Audit Committee has the opinion that such price setting is reasonable and fair.

Damrongchaitham Foundation Relationship shown in 1 C) (Support, develop education and culture for youths) Parties that may have conflicts of interest CCC Business Development Company Limited Relationship shown in 1 C) (Training and seminars)

These companies are the Company’s creditors for: Types of Transaction 1) Managing funds on behalf of the Foundation (Deposit books and deliveries to donors) 2) Creditors from purchasing products such as CDs for distribution and sale.

As of the 31 December, 2009 the amount is Baht 3.99 million Total Consideration (Creditors of the Company of Baht 0.96 million and Subsidiaries’ creditors of Baht 3.03 million)

Note - Donations received on behalf of Damrongchaitham Foundation arises from subsidiaries willing to help distribute books to donors

- Purchasing CDs for distribution and sale (repay debt when the products are sold) is the normal course of Opinion of the Audit Committee business. Therefore the Audit Committee is of the opinion that the conditions for trade are reasonable and fair.

070 Connected transactions between the Group and Associated Companies, which are the normal course of business

1) Scenario Company Limited Relationship shown in 1 B) (Produce television programs) 2) Channel (V) Music (Thailand) Company Limited Relationship shown in 1 B) (Produce programs that support sales. Sell products and services related to music) Parties that may have conflicts 3) Encore Company Limited Relationship shown in 1 B) of interest (Sale and rent equipment and accessories for all types of lights, sound and pictures) 4) Blue Media Communications Company Limited Relationship shown in 1 B) (Design, produce and sell publications and other media) 5) Family Knowhow Company Limited Relationship shown in 1 B) (Produce television programs)

1) Sell products 2) Produce television programs that generate revenue from advertisement sales 3) Revenue from organizing concerts and theatrical performances Types of Transactions that 4) Revenue from advertising, public relations and printed material for theatrical performances generate Revenue 5) Revenue from issuing press releases and shared administrative management costs 6) Marketing Consulting fees 7) Other revenue

In the amount of Baht 37.24 million. Price is set at actual cost of production and operations plus profit. Total Consideration (Revenue belonging to the Company is Baht 6.08 million and Baht 31.16 million to its subsidiaries)

Outstanding Accounts As of 31 December 2009 the amount is Baht 8.96 million (The Company is a trade creditor owed Baht Receivable 0.19 million while its subsidiaries are owed Baht 8.77 million)

The Audit Committee has the opinion that revenues derived from advertisements in producing television Opinion of the Audit Committee programs, determined by using the cost of production and operation plus a profit is according to the normal course of business, whereby the Audit Committee has the opinion that such price setting is reasonable and fair.

Service fees, consisting of: 1) Cost of advertisement spots on television and sponsorship paid to Scenario Company Limited. 2) Share of copyrights from the sale of television programs such as dramas and drama soundtracks Types of Transaction on tapes, CDs and VCDs to Scenario. 3) Media operating costs and rental expenses to produce programs paid to Scenario 4) Operating costs of sourcing equipment related to light, sound and picture

The amount is Baht 195.31 million. The price is determined on the basis of the quality of the work and Total Consideration services rendered, where the final price depends on negotiations between the service recipient and service provider. (The Company’s cost of services is Baht 5.64 million and Baht 189.67 million to its subsidiaries).

Trade creditor with outstanding As of 31 December 2009, Baht 48.67 million (These companies are trade creditors of the Company and investments payable its subsidiaries at Baht 0.46 million and Baht 48.21 million respectively)

The Audit Committee has the opinion that service expenses based on market rates and contract Opinion of the Audit Committee prices, which are also based on market levels, is according to the normal course of business; the Audit Committee has the opinion that such price setting is reasonable and fair.

071 CONNECTED TRANSACTIONS

Connected transactions between the Group and Related Companies with Common Directors

Directors of the Board and Executive Directors 1. Paiboon Damrongchaitham Chairman of the Company Advisor and Chairman Parties which may have 2. Boosaba Daorueng Director and Co-Chief Executive Officer conflicts of interest 3. Sumeth Damrongchaitham Director and Executive Director 4. Sataporn Panichraksapong Director and Executive Director

Cash Advances : Cash advances for the Company’s directors is used in conducting business on behalf of the Type of Transaction Company, so there is no interest charged on these advances.

31 December 2009 for the following amount (Baht million) Company 11.75 Subsidiaries 9.16 Minus long-term outstanding advances (12.37) Advance Payments – net 8.54 Note: Advance payments are cash reserves used to pay for operations that are the normal course of Total Consideration business. In some activities or projects a considerable amount is require and over a duration exceeding one year, which may pose a risk if employees are held responsible for the sums. The long-term outstanding advances are due to the partial usage akin to petty cash, which is then reimbursed whenever payments are made. Therefore, this amount will remain full at the end of the accounting period. However, this outstanding advance has reduced from the previous year. Therefore, the outstanding funds will seem to have no movement on the day the accounts are closed. The Company will evaluate and set the reserves in accordance with the conservative accounting standards by controlling and monitoring these advances payments, and reviews company’s regulations in order to support the changes in each line of business.

Opinion of the Audit Committee The Audit Committee is of the opinion that cash advances to the Company’s directors were used for used for businesses related to the Company, therefore no interest charged on such cash advances is reasonable.

Parties that may have conflicts Directors in the Company and its subsidiaries who are skilled in composing music, serving as program of interest hosts, directing and writing scripts.

Type of transaction The Group paid copyright fees, program host fees, director’s fees and screenwriter’s fees to these Directors.

Amount of Baht 1.39 million. Prices are determined by the unit cost of products/goods sold at market Total consideration: prices. Prices also depend on the quality and service received. The final service fee will depend on negotiations between the customer and the service provider (divided into Company’s expense of Baht 0.92 million and subsidiaries’ expense of Baht 0.47 million)

Trade creditor and outstanding As of 31 December 2008, Baht 0.71 million (The Company owes this entire amount) payments due

The Audit Committee has the opinion that composing songs, being program hosts, program directors and screenwriters by those with extensive expertise and experience in the business has benefited the Company. Therefore, fees for the composition of songs, being program hosts, directors and screenwriters depends on many factors such as the scope and level of difficulty of the work, creativity, reputation and Opinion of the Audit Committee experience of the service provider. The Company has taken these factors into consideration in setting the preliminary price, but the final price depends on negotiations between the customer and service provider. The Audit Committee has the opinion that setting prices by taking into consideration the scope and level of difficulty of the work, and the creativity, reputation and experience of the service provider, as is commonly practiced in the entertainment business, is reasonable and fair.

072 Connected transactions that are not the normal course of business between the Group and Related Companies with Common Directors

Lessee: The Group

Lessor (Company or persons Geurt Fah Company Limited which may have conflict):

1) Mr. Paiboon Damrongchaitham and Mr. Sumeth Damrongchaitham, who are directors of the Company Relationship: and many subsidiaries, are also directors of Geurt Fah Company Limited 2) Mr. Paiboon Damrongchaitham who is a major shareholder of the Company and holds shares in many subsidiaries, is also a major shareholder of Geurt Fah Company Limited

Characteristic of connected The Group rents a 43 storey office building, located at 50 Sukhumvit Soi 21 (Asoke Road), Klongtoey Nuea, transaction: Wattana, Bangkok from Geurt Fah Company Limited

Size of rented space : Approximately 30,200 sq.m. on floors 2-3, 5-6, 9-14, and 16-43, accounting for 78% of total rental space

Contract tenure: 3 years (from 1 May 2007 to 30 April 2010), where the lessee can renew the lease another 3 times, for a period of 3 years each time

Rental and service rate: Increased by 15% from original rental and service rate of Baht 264.50 per sq.m. per month to Baht 304.180 per sq.m. per month

Price setting policy: In compliance with the original contract conditions of having renewal options every 3 years at market rates, except for the first rental renewal, where the rental and service rates increase cannot exceed 15%.

Total rent and service fees that Baht 105.16 million the Group pays to Geurt Fah (The rental and service fees of the Company in the amount of Baht 68.14 million and subsidiaries in the amount of Baht 37.02 million)

Total consideration: Approximately Baht 340 million for the 3 years (excluding VAT and related taxes)

The Audit Committee has the opinion that the rental rate which the Company and subsidiaries paid to Geurt Opinion Fah Company Limited in the amount of Baht 304.18 per sq.m. per month is reasonable and fair. This rate is of the Audit Committee : in the range of market rental rates, between Baht 290-350 per sq.m. per month, according to an appraisal report by Siam Appraisal and Services Company Limited, which is an independent appraiser on the SEC’s approved list.

073 Connected transactions that are not the normal course of business between the Group and Related Companies with Common Directors (continued)

Lessee: Image Publishing Company Limited

Lessor (Company or persons Jaktranubhab Limited Partnership which may have conflict):

As lessee: Mr. Kamron Pramoj na Ayutthaya is a director and member of the management team Relationship: of the Company’s subsidiary As lessor: Mr. Kamron Pramoj na Ayutthaya is the managing partner of Jaktranubhab Limited Partnership

Characteristic of connected Image Publishing Company Limited rented an office building located at 217/7 Sukhumvit 63 (Ekamai), transaction: Sukhumvit Road, Wattana, Bangkok from Jaktranubhab Limited Partnership

Size of rented space : Approximately 1,250 square meters

Contract tenure: 3 years (from 1 January 2009 – 31 December 2011) with plans to adjust rent at the end of the third year.

Rental and service rate: During the first 3 years, the rental rate is Baht 250 per sqm per month or Baht 360,000 per month

Price setting policy: Conventional conditions according to market rates

Total rent and service fees that Baht 4.32 million the Group pays to Geurt Fah (Entire amount is for the Company’s subsidiary’s rent and services)

Total consideration: Baht 12.96 million throughout 3 years (excluding VAT and other related taxes)

Opinion The Audit Committee has the opinion that the rental rate of 250 baht per sqm per month which Image of the Audit Committee : Publishing Company Limited paid to Jaktranubhab Limited Partnership is reasonable and fair. Such a rate is comparable with average office rental rates in the vicinity.

074 CONNECTED TRANSACTIONS

Connected transactions that are not the normal course of business between the Group and Related Companies with Common Directors (continued)

Lessee: Mifah Company Limited

Lessor (Company or persons Ruam Fah Company Limited which may have conflict):

As lessee: Mr. Paiboon Damrongchaitham is a major shareholder and holds a Director position in Relationship: the Company and many subsidiaries As lessor: Mr. Paiboon Damrongchaitham is a major shareholder and a Director of Ruam Fah Company Limited Characteristic of connected Mifah Company Limited rented an office building located at 59/1 Sukhumvit 39, Wattana, Bangkok from transaction: Ruam Fah Company Limited and land title deed (chanote) No. 4263, Land No. 488 on survey page 969, Klongton Sub-District, Phrakanong District, Bangkok from from Ruam Fah Company Limited

Size of rented space : Approximately 1,336.21 sqm (office space) and 1 rai 84 wah 1 (land)

Contract tenure: 3 years from 26 August 2008 – 25 August 2011, subject to extensions every 3 years and has the right to extend the rental contract until 2011

Rental and service rate: Rent and related service fees of Baht 0.22 million per month

Price setting policy: Conventional conditions according to market rates

Total rent and service fees that Baht 3.20 million (The Company’s rent and services were Baht 0.43 million and its subsidiaries were the Group pays to Geurt Fah Baht 2.76 million)

Total consideration: Baht 7.93 million over the 3 year term

Opinion The Audit Committee has the opinion that the rental rate which Mifah Company Limited paid to Ruam Fah of the Audit Committee : Company Limited at the rate of Baht 0.22 million per month is reasonable and fair, as it is a renewal of an existing contract, where the rental and service rate remains unchanged, and is charged in line with market prices.

075 CORPORATE GOVERNANCE REPORT GMM GRAMMY PUBLIC COMPANY LIMITED

Corporate Governance Report GMM Grammy Public Company Limited

The Board of Directors is well aware of the significance of good corporate governance and has encouraged the Company to adopt the measures. For greater transparency and to inspire confidence in shareholders, investors and stakeholders, five Sub-committees have been appointed, namely, the Audit Committee, Executive Committee, Nomination and Remuneration Committee, Risk Management Committee and the Sub-Corporate Governance and Ethics Committee. In 2004, Sub-Corporate Governance and Ethics Committee has been appointed, presently consists of 11 members, to ensure that the Company comply with good corporate governance and conscientiously practices these principles.

In 2005, the Company announced the adoption of Corporate Governance Policies for the Group. It has continued to revise and adapt the policies as appropriate to changing circumstances and policy guidance from the Stock Exchange of Thailand or other regulatory bodies. The Company has issued a portable concise and easy to understand policy manual and has broadcasted the information on the intranet and company website for the benefit of investors and the general public. Good corporate governance policies and related plans are reviewed, revised and the progress is monitored to ensure that the policies are put into practice throughout the entire Group and continuously develop to the international standard. The Company also encourage the employees to fully understand the policies and learn how to apply the principles at work, making it as a part of Grammy’s corporate culture.

From 2008 onwards, to encourage equal treatment of all shareholders, including minority shareholders, in light of the warm relationship and cooperation that exists between the Company and stakeholders which have helped the Company prosper sustainably over the years, the Sub-Committee has proposed that minority shareholders participate in setting the agenda in the Annual General Meeting. The suggestions are submitted ahead of time, as well as a list of nominees for the Board of Directors through the Company website. The Sub-Committee also proposed that additional channels and procedures are set up so shareholders and stakeholders can notify the Audit Committee of various matters such as complaints, violations of the law, business ethics and Code of Ethics in the Company. The channels can also be queries about financial statements or internal control systems so that issues are duly handled and submitted to the Board for further processing.

Due to the Company’s efforts to continually develop and conscientiously govern its business, the Thai Institute of Directors Association (IOD), in collaboration with by the Stock Exchange of Thailand (SET) and the Securities and Exchange Commission (SEC), has announced the Company’s corporate governance rating in 2006, 2008 and 2009 as being “Very Good”. (There is no CG survey in 2007). Moreover, the assessment of the 2008 and 2009 Annual General Meeting in a project organized by the SEC, Thai Investors Association and the Thai Listed Companies Association rated the Company “Excellent” and “Excellent, recognized as Good Example” respectively.

The Company will continue to adhere to its Good Corporate Governance policies, whilst encouraging the updating and development of better ways to apply them at work, as well as providing more frequent disclosure on how the Company incorporates good governance in practice, to assure shareholders, stakeholders and the general public.

(Sumeth Damrongchaitham) Chairman of Sub-Corporate Governance and Ethics Committee 9 March 2010

076 MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Overall Performance in 2009 GMM Grammy Group revenues in 2009 amounted to 8,124.3 million baht, or a 4% increase over the previous year. Growth was primarily due to the media business, which accounted for 48% of the Group’s total revenues. Most revenue were generated by the production of television programs especially prime time dramas and sit-coms, which had always been popular and satellite television programs aired on four channels: Fan TV, Bang Channel, Green Channel and X Channel, which grew much faster than expected. Moreover, the event creation and management business expanded to win market share. The radio and publishing businesses on the other hand, continued to contract in line with industry trends. However, the movie business was boosted by two films, Phobia 2 (‘Haa Prang’), and BTS: Bangkok Traffic (Love) Story (‘Rot Fai Fah Ma Ha Na Ter’), that brought in new box office records of 106 million baht and 145 million baht respectively. The Music Business contributed to 44% of total revenues, which fell 3% from 2008 levels. This consists of revenue from the sale of music products and copyrights, artist management fees, and organizing concerts. This is due to the economic slowdown which lessened demand for music products such as CDs and VCDs. Nonetheless, the Company was able to raise its revenues through digital channels which rose by 46%. Revenue from organizing concerts this year was also slightly lower than that of the preceding year. Thus, total profit of 510.8 million baht was 28% lower than 705.3 million baht in 2008, as a result of higher costs of sales and production and expenses in distributing and managing rising 11% to 7,425.3 million baht. These costs were due to expanding three businesses that have grown rapidly, namely the Event Creation and Management Business which has added newer services to ensure that all clients’ needs are met given the growth in demand for events marketing; producing satellite television programs for four channels; and hiring more staff for the digital business which has expanded into newer networks and services. Moreover, the distribution of music products has increased with more sales points at Imagine and modern trade channels to better meet changing music consumption patterns, and to make the products more readily available to consumers. Capital Structure In 2009, the Group’s total assets grew by 112 million baht to 6,925 million baht over the previous year because of a 131 million baht increase in current assets, and an 18 million baht reduction in non-current assets. Total liabilities amounted to 3,440 million baht, consisting of 1,315 million baht of short-term and long-term loans, 68 million baht of liabilities under hire purchase and finance lease agreements, and trade accounts payable of 1,070 million baht. Shareholders’ equity is 3,485 million baht. Share capital issued and share premium that accrued throughout the year amount of 40 million baht and 347 million baht respectively, was a result of raising funds through new common stock issues to pay for the stocks of GMM Media Plc, which was delisted in February 2009. Audit Fees In 2009, the Group appointed Khun Siraporn Ouaanunkun of Ernst & Young as auditor and the person certifying the Group’s financial statements. The Group’s audit fees amounted to 8.85 million baht. There are no additional fees for the services rendered this year, or to be rendered in future audits for any outstanding services carried forward.

077 REPORT ON THE BOARD OF DIRECTOR’S RESPONSIBILITY TOWARDS THE FINANCIAL STATEMENTS

Report on the Board of Director’s Responsibility towards the Financial Statements

The Board of Directors recognizes the importance of the Corporate Governance Management Policy and the preparing process of the financial statement and financial information as reported in the annual report enable to ensures that the statements are prepared in accordance with the Thai generally accepted accounting standards, using appropriate and consistent accounting policy and sufficient information is disclosed in the notes to financial statements. The Board of Directors has appointed Audit Committee, which comprises independent directors, to be responsible for the quality of financial reports. This also reasonable assurance the existing of the efficiency and effectiveness of internal control such as safeguarding of assets connected or potential conflict of interest transactions and the compliance to applicable laws and regulations, which the Audit Committee’s opinion is stated in the Audit Committee report on page 05.

Moreover, in the Board of Directors’ meeting on 26 February 2010, which every Audit Committee members, management and internal audit department attended, the sufficiency of the Company’s internal control system for the year 2009 has been evaluated. The system, set by the management which compliance with the SET regulations and COSO guideline, was divided into 5 major components in Control Environment, Risk Assessment, Control Activities, Information and Communication and Monitoring and Evaluation. The Board agreed with the Audit Committee that the GMM Grammy Group’s quarterly and the annual financial statement for the year 2009 (which has been audited by the Company’s external auditor) has been prepared in accordance with generally accepted accounting principles and disclosed sufficiently, accurately and reliably. In general, the internal control system of the Company and subsidiaries was fairly established and appropriate to the Company business. There were no internal control deficiencies which would affect the accuracy and reliability of financial statement and the achievement of the entity’s business goal. The Board of Directors has expressed the opinion on the sufficient of the Company and subsidiaries’ internal control system in “Internal Control” section, on page 064.

Furthermore, the Board encourages the Management in continuous developing the GMM Grammy Group’s quality of internal control system, risk management and good corporate governance. The adequate and appropriate supervision should also be in place to enable the achievement of the established objective and goal.

Mr. Paiboon Damrongchaitham Ms. Boosaba Daorueng Mrs.Saithip Montrikul na Audhaya Chairman Chief Executive Officer Co - Chief Executive Officer

078 REPORT OF INDEPENDENT AUDITOR

Report of Independent Auditor

To the Shareholders of GMM Grammy Public Company Limited I have audited the accompanying consolidated balance sheets of GMM Grammy Public Company Limited, its subsidiaries and its jointly controlled entities as at 31 December 2009 and 2008, the related consolidated statements of income, changes in shareholders’ equity and cash flows for the years then ended, and the separate financial statements of GMM Grammy Public Company Limited for the same years. These financial statements are the responsibility of the management of the Company and its subsidiaries as to their correctness and the completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audits.

I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of GMM Grammy Public Company Limited, its subsidiaries and its jointly controlled entities and of GMM Grammy Public Company Limited as at 31 December 2009 and 2008, the results of their operations and cash flows for the years then ended, in accordance with generally accepted accounting principles.

Siraporn Ouaanunkun Certified Public Accountant (Thailand) No. 3844

Ernst & Young Office Limited Bangkok: 24 February 2010

079 BALANCEGMM Grammy SHEETS Public Company Limited, its subsidiaries and its jointly controlled entities

Balance sheets

BALANCEAs at 31 December SHEETS 2009 and 2008 AS AT 31 DECEMBER 2009 AND 2008

(Unit: Baht)

Consolidated financial statements Separate financial statements

Note 2009 2008 2009 2008

Assets

Current assets

Cash and cash equivalents 908,252,127 1,067,687,672 216,821,395 305,554,136

Current investment 78,520,075 64,098,495 - -

Trade accounts receivable

Related parties and directors 6,7 9,940,178 8,286,334 39,473,081 52,131,052

Unrelated parties 7 1,921,439,201 1,941,631,484 718,148,684 811,797,418

Less: Allowance for doubtful accounts (206,295,747) (208,117,044) (51,718,229) (53,824,180)

Trade accounts receivable - net 1,725,083,632 1,741,800,774 705,903,536 810,104,290

Advances to and interest receivable from related parties

and directors - net 6 9,355,015 26,624,980 50,421,902 87,607,293

Inventories - net 8 734,282,083 631,497,016 636,602,213 527,129,533

Other current assets

Advance payments - net 99,139,744 105,520,048 21,663,560 30,999,668

Accrued income

Related parties 6 7,490 7,490 27,960,626 49,522,081

Unrelated parties 292,667,157 175,337,435 143,246,007 62,114,291

Prepaid expenses 50,462,065 35,472,536 10,273,800 6,624,891

Input tax refundable 52,726,966 43,662,607 5,626,878 4,548,785

Withholding tax deducted at source 79,096,773 10,816,525 33,671,824 -

Others 41,555,712 37,542,101 12,795,532 9,950,968

Total other current assets 615,655,907 408,358,742 255,238,227 163,760,684

Total current assets 4,071,148,839 3,940,067,679 1,864,987,273 1,894,155,936

Non-current assets

Investments in subsidiary companies - net 9 - - 905,835,817 594,680,022

Investments in joint ventures 10 - - - -

Investments in associated companies 11 182,403,220 128,348,464 25,000,000 -

Other long-term investments - net 12 1,181,877,093 1,249,314,558 344,977,393 251,614,858

Loans to related parties 6 - - 47,000,000 34,470,000

Goodwill 79,857,240 79,857,240 - -

Property, plant and equipment - net 13 1,002,738,007 961,367,719 159,458,814 174,380,442

Intangible assets - net 14 280,364,956 301,754,708 261,275,100 263,134,508

Other non-current assets

Deposits 62,561,007 50,495,539 32,763,003 27,176,920

Leasehold rights - net 27,251,272 37,049,930 24,472,072 34,270,730

Others 37,615,731 65,073,579 4,552,756 17,777,419

Total other non-current assets 127,428,010 152,619,048 61,787,831 79,225,069

Total non-current assets 2,854,668,526 2,873,261,737 1,805,334,955 1,397,504,899 Total assets 6,925,817,365 6,813,329,416 3,670,322,228 3,291,660,835

The accompanying notes are an integral part of the financial statements.

080 GMM Grammy Public Company Limited, its subsidiaries and its jointly controlled entities BALANCE SHEETS (CONTINUED)

Balance sheets (continued)

As at 31 December 2009 and 2008

(Unit: Baht)

Consolidated financial statements Separate financial statements

Note 2009 2008 2009 2008

Liabilities and shareholders' equity

Current liabilities

Bank overdraft and short-term loans from banks 15 894,010,436 284,312,974 150,000,000 -

Trade accounts payable and accrued cost

Related parties, management and directors 6 62,957,461 45,643,493 106,210,872 103,010,591

Unrelated parties 1,007,712,864 911,287,506 555,368,732 552,948,537

Total trade accounts payable and accrued cost 1,070,670,325 956,930,999 661,579,604 655,959,128

Accounts payable - purchase of assets

Related parties 6 - - 10,511,748 10,511,748

Unrelated parties 9,643,041 5,099,526 883,693 265,978

Current portion of long-term loans 16 132,603,397 519,678,769 - 125,000,000

Current portion of liabilities under finance lease agreements 17 19,043,832 16,478,570 7,568,583 5,430,132

Other current liabilities

Corporate income tax payable 31,929,453 41,425,613 - 816,812

Accrued expenses 271,881,416 255,938,686 116,855,124 92,208,280

Accrued commission expenses 114,329,790 93,376,160 - -

Unearned income 260,939,976 247,712,968 54,060,273 77,096,911

Undue output tax 156,893,175 142,419,616 58,117,513 54,909,976

Others 106,786,351 112,259,008 42,495,186 36,313,538

Total other current liabilities 942,760,161 893,132,051 271,528,096 261,345,517

Total current liabilities 3,068,731,192 2,675,632,889 1,102,071,724 1,058,512,503

Non-current liabilities

Long-term loans - net of current portion 16 288,919,705 391,709,312 - -

Liabilities under finance lease agreements

- net of current portion 17 48,807,355 39,649,205 27,001,251 19,662,968

Other non-current liabilities 33,990,478 31,317,025 - -

Total non-current liabilities 371,717,538 462,675,542 27,001,251 19,662,968

Total liabilities 3,440,448,730 3,138,308,431 1,129,072,975 1,078,175,471

The accompanying notes are an integral part of the financial statements.

081 GMMBALANCE Grammy SHEETS Public (CONTINUED) Company Limited, its subsidiaries and its jointly controlled entities

Balance sheets (continued)

AsBALANCE at 31 December SHEETS2009 and 2008 AS AT 31 DECEMBER 2009 AND 2008

(Unit: Baht)

Consolidated financial statements Separate financial statements

Note 2009 2008 2009 2008

Shareholders' equity

Share capital

Registered 9,18 530,556,100 ordinary shares of Baht 1 each 530,556,100 530,556,100 530,556,100 530,556,100

Issued and fully paid up

530,264,947 ordinary shares of Baht 1 each 530,264,947 490,000,000 530,264,947 490,000,000

(2008: 490,000,000 ordinary shares of Baht 1 each)

Paid-in capital

Share premium 9 1,626,117,776 1,278,796,343 1,626,117,776 1,278,796,343

Transferred of share premium to offset deficit in

separate financial statements 271,203,657 271,203,657 - -

Capital surplus from share premium of subsidiaries 860,964,766 860,964,766 - -

Capital deficit from Business Combination under Common Control (274,800,348) (282,203,434) - -

Difference resulting from share swap between the Company

and a subsidiary company 9 (189,604,191) - - -

Unrealised gain (loss)

Revaluation surplus (deficit) on changes in

value of investments (396,387,546) (335,836,331) 109,027,157 15,678,373

Translation adjustments 1,300,193 4,256,048 - -

Retained earnings

Appropriated - statutory reserve 19 53,055,610 53,055,610 53,055,610 53,055,610

Transfer of statutory reserve to offset deficit

in separate financial statements 50,000,000 50,000,000 - -

Unappropriated 452,077,560 577,600,601 222,783,763 375,955,038

Equity attributable to the Company's shareholders 2,984,192,424 2,967,837,260 2,541,249,253 2,213,485,364

Minority Interest - equity attributable to minority

shareholders of subsidiaries 501,176,211 707,183,725 - -

Total shareholders' equity 3,485,368,635 3,675,020,985 2,541,249,253 2,213,485,364

Total liabilities and shareholders' equity 6,925,817,365 6,813,329,416 3,670,322,228 3,291,660,835

- - - -

The accompanying notes are an integral part of the financial statements.

082 INCOME STATEMENTS GMM Grammy Public Company Limited, its subsidiaries and its jointly controlled entities Income statementsINCOME STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 For the years ended 31 December 2009 and 2008

(Unit: Baht)

Consolidated financial statements Separate financial statements

Note 2009 2008 2009 2008

Revenues

Sales of audio products and copyrights 2,662,770,231 2,732,370,608 2,372,383,675 2,392,385,190

Revenues from production of concerts 303,565,650 378,028,281 229,764,708 326,921,069

Artist management income 605,385,666 577,426,376 624,170,767 570,571,503

Revenues from production of motion pictures 328,667,034 220,448,260 - -

Revenues from production of television programmes 1,647,359,307 1,448,498,590 537,141 26,529,932

Revenues from production of satellite television programmes 116,716,593 1,955,000 45,842,409 1,955,000

Revenues from production of radio programmes 579,610,105 669,150,269 - -

Revenues from event advisor and organizer and provision

of event equipment 1,388,027,622 1,179,679,536 - -

Revenues from advertising and sales of publishing media

and teaching aids 189,334,563 253,846,879 4,160,173 37,033,947

Other income

Revenues from studio service 3,512,372 12,725,427 111,238 9,019,838

Revenues from production and service 50,387,443 56,826,245 21,805,958 5,496,049

Management fee and consultant fee income 2,303,160 14,672,977 59,283,996 76,192,636

Interest income 18,660,424 33,723,920 13,517,707 13,510,537

Dividend received 48,509,098 49,286,432 261,451,344 302,625,070

Others 179,517,600 177,465,480 83,207,388 65,575,616

Total other income 302,890,097 344,700,481 439,377,631 472,419,746

Total revenues 8,124,326,868 7,806,104,280 3,716,236,504 3,827,816,387

Expenses

Cost of sales and productions 4,795,928,057 4,234,102,611 1,911,488,697 1,882,352,546

Selling expenses 367,251,324 394,408,609 78,008,223 84,235,498

Administrative expenses 2,162,664,619 1,957,215,394 1,146,650,301 1,030,750,228

Management benefit expenses 99,417,000 103,391,000 75,923,000 64,965,000

Total expenses 7,425,261,000 6,689,117,614 3,212,070,221 3,062,303,272

Income before share of income from investments in associates

and joint ventures, finance cost and corporate income tax 699,065,868 1,116,986,666 504,166,283 765,513,115

Share of income from investment in

associates and joint ventures 36,554,947 28,849,755 - -

Income before finance cost and corporate income tax 735,620,815 1,145,836,421 504,166,283 765,513,115

Finance cost (55,195,793) (72,213,463) (8,789,980) (13,328,254)

Income before corporate income tax 680,425,022 1,073,622,958 495,376,303 752,184,861

Corporate income tax (139,263,761) (245,814,011) (12,230,732) (70,959,562) Net income for the year 541,161,261 827,808,947 483,145,571 681,225,299

Net income attributable to:

Equity holders of the parent 510,793,805 705,318,945 483,145,571 681,225,299

Minority interests of the subsidiaries 30,367,456 122,490,002 541,161,261 827,808,947

Basic earnings per share 21

Net income attributable to equity holders of the parent 0.97 1.44 0.92 1.39

Weighted average number of ordinary share (shares) 527,396,149 490,000,000 527,396,149 490,000,000

The accompanying notes are an integral part of the financial statements.

083 STATEMENTS OFCHANGESINSHAREHOLDERS’EQUITY 084 STATEMENTSGMM Grammy Public Company Limited, OF its subsidiaries CHANGES and its jointly controlled IN entities SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 Statements of changes in shareholders' equity For the years ended 31 December 2009 and 2008

(Unit: Baht) Consolidated financial statements Equity attributable to the parent's shareholders

Difference resulting Transfer of Capital surplus from share swap Retained earnings share premium (deficit) from between the Revaluation Transfer of statutory Total Minority interest - Issued and to offset deficit Capital surplus from Business Company surplus (deficit) on reserve to offset equity attributable equity attributable to fully paid-up Share in separate share premium Combination under and a subsidiary changes in value Translation Appropriated - deficit in separate to the parent's minority shareholders Note share capital premium financial statements of subsidiaries Common Control Company of investments adjustments statutory reserve financial statements Unappropriated shareholders of subsidiaries Total Balance as at 31 December 2007 490,000,000 1,278,796,343 271,203,657 860,964,766 (222,805,982) - (223,570,805) 5,920,697 23,156,676 50,000,000 450,979,694 2,984,645,046 663,050,217 3,647,695,263 Income and expenses recognised directly in equity: Investment in available-for-sale securities Loss recognised in shareholders' equity ------(112,265,526) - - - - (112,265,526) - (112,265,526) Translation adjustments ------(1,664,649) - - - (1,664,649) - (1,664,649) Net income and expenses recognised directly in equity ------(112,265,526) (1,664,649) - - - (113,930,175) - (113,930,175) Net income for the year ------705,318,945 705,318,945 - 705,318,945 Total income and expenses for the year ------(112,265,526) (1,664,649) - - 705,318,945 591,388,770 - 591,388,770 Capital deficit from Business Combination under Common Control - - - - (59,397,452) ------(59,397,452) - (59,397,452) Dividend paid 24 ------(548,799,104) (548,799,104) - (548,799,104)

Transferred to statutory reserve ------29,898,934 - (29,898,934) - - - Minority interest - equity attributable to minority shareholders of subsidiaries ------44,133,508 44,133,508 Balance as at 31 December 2008 490,000,000 1,278,796,343 271,203,657 860,964,766 (282,203,434) - (335,836,331) 4,256,048 53,055,610 50,000,000 577,600,601 2,967,837,260 707,183,725 3,675,020,985

Balance as at 31 December 2008 490,000,000 1,278,796,343 271,203,657 860,964,766 (282,203,434) - (335,836,331) 4,256,048 53,055,610 50,000,000 577,600,601 2,967,837,260 707,183,725 3,675,020,985 Income and expenses recognised directly in equity: Investment in available-for-sale securities

Loss recognised in shareholders' equity ------(60,551,215) - - - - (60,551,215) - (60,551,215) Translation adjustments ------(2,955,855) - - - (2,955,855) - (2,955,855) Net income and expenses recognised directly in equity ------(60,551,215) (2,955,855) - - - (63,507,070) - (63,507,070)

Net income for the year ------510,793,805 510,793,805 - 510,793,805 Total income and expenses for the year ------(60,551,215) (2,955,855) - - 510,793,805 447,286,735 - 447,286,735

Share capital issued 18 40,264,947 347,321,433 ------387,586,380 - 387,586,380 Difference resulting from share swap between the Company and a subsidiary company 9 - - - - - (189,604,191) - - - - - (189,604,191) - (189,604,191) Capital surplus from Business Combination under Common Control - - - - 7,403,086 ------7,403,086 - 7,403,086 Dividend paid 24 ------(636,316,846) (636,316,846) - (636,316,846) Minority interest - equity attributable to minority shareholders of subsidiaries ------(206,007,514) (206,007,514) Balance as at 31 December 2009 530,264,947 1,626,117,776 271,203,657 860,964,766 (274,800,348) (189,604,191) (396,387,546) 1,300,193 53,055,610 50,000,000 452,077,560 2,984,192,424 501,176,211 3,485,368,635

- The accompanying notes are an integral part of the financial statements. GMM Grammy Public Company Limited, its subsidiaries and its jointly controlled entities STATEMENTSStatements of changes inOF shareholders' CHANGES equity (continued)IN SHAREHOLDERS’ EQUITY (continued) FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 For the years ended 31 December 2009 and 2008

(Unit: Baht)

Separate financial statements

Revaluation

Issued and surplus on Retained earnings

fully paid-up Share changes in value Appropriated -

Note share capital premium of investments statutory reserve Unappropriated Total

Balance as at 31 December 2007 490,000,000 1,278,796,343 170,418,576 23,156,676 273,427,777 2,235,799,372

Income and expenses recognised directly in equity:

Investment in available-for-sale securities

Loss recognised in shareholders' equity - - (154,740,203) - - (154,740,203)

Net income and expenses recognised directly in equity - - (154,740,203) - - (154,740,203)

Net income for the year - - - - 681,225,299 681,225,299

Total income and expenses for the year - - (154,740,203) - 681,225,299 526,485,096

Dividend paid 24 - - - - (548,799,104) (548,799,104)

Transferred to statutory reserve - - - 29,898,934 (29,898,934) - Balance as at 31 December 2008 490,000,000 1,278,796,343 15,678,373 53,055,610 375,955,038 2,213,485,364

Balance as at 31 December 2008 490,000,000 1,278,796,343 15,678,373 53,055,610 375,955,038 2,213,485,364

Income and expenses recognised directly in equity:

Investment in available-for-sale securities

Gain recognised in shareholders' equity - - 93,348,784 - - 93,348,784

Net income and expenses recognised directly in equity - - 93,348,784 - - 93,348,784

Net income for the year - - - - 483,145,571 483,145,571

Total income and expenses for the year - - 93,348,784 - 483,145,571 576,494,355

Share capital issued 18 40,264,947 347,321,433 - - - 387,586,380

Dividend paid 24 - - - - (636,316,846) (636,316,846) Balance as at 31 December 2009 530,264,947 1,626,117,776 109,027,157 53,055,610 222,783,763 2,541,249,253

-

The accompanying notes are an integral part of the financial statements. 085

GMM Grammy Public Company Limited, its subsidiaries and its jointly controlled entities

Cash flow statements CASH FLOW STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 For the years ended 31 December 2009 and 2008

(Unit: Baht)

Consolidated financial statements Separate financial statements

2009 2008 2009 2008

Cash flows from operating activities

Net income before tax 680,425,022 1,073,622,958 495,376,303 752,184,861

Adjustments to reconcile net income before tax to net cash

provided by (paid from) operating activities:

Depreciation and amortisation 481,683,260 479,628,535 120,017,139 160,933,185

Reversal of allowance for doubtful accounts (1,821,297) (7,420,615) (2,105,951) (6,461,928)

Allowance for stock obsolescences 2,361,142 8,358,560 1,600,000 7,516,081

Allowance (reversal of allowance) for sales returns (1,835,982) (19,334,738) 2,170,000 (16,930,000)

Allowance for advances 1,540,000 3,438,426 1,540,000 3,438,426

Reversal of allowance for investments in subsidiaries - - (1,140,000) (6,613,579)

Allowance (reversal of allowance) impairment loss on intangible assets 430,734 (1,904,766) - (404,766)

Impairment loss on other investments 6,000,000 6,000,000 - -

Losses (gains) on disposal of equipment 3,274,700 6,935,633 (3,097,619) 315,213

Dividend received from other long-term investments (48,509,098) (49,286,432) (25,029,098) (23,756,431)

Dividend received from subsidiaries - - (236,422,246) (278,868,639)

Share of income from investments in associated companies

accounted for under equity method (36,554,947) (28,849,755) - -

Loss on sale of invesment in subsidiaries - - - 27,709,133

Interest income (18,660,424) (33,723,920) (13,517,707) (13,510,537)

Interest expenses 50,175,531 68,615,326 7,275,824 11,949,998

Income from operating activities before changes in operating

assets and liabilities 1,118,508,641 1,506,079,212 346,666,645 617,501,017

Operating assets (increase) decrease

Trade accounts receivable - related parties (1,653,844) 4,298,668 12,657,971 (356,616)

Trade accounts receivable - unrelated parties 20,192,283 (49,075,686) 93,648,734 (52,104,727)

Advances to and interest receivable from related parties and directors 17,775,866 (10,817,326) 61,089,075 2,301,449

Inventories (105,146,209) (30,215,378) (111,072,680) (71,430,300)

Advance payments 4,334,403 (37,229,955) 7,290,207 (14,964,308)

Other current assets (134,580,696) (58,744,634) (67,141,827) (23,065,129)

Other non-current assets (137,273,722) (232,110,748) (17,387,688) (126,937,352)

The accompanying notes are an integral part of the financial statements.

086 CASH FLOW STATEMENTS (CONTINUED) GMM Grammy Public Company Limited, its subsidiaries and its jointly controlled entities

Cash flow statements (continued) CASH FLOW STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 For the years ended 31 December 2009 and 2008

(Unit: Baht)

Consolidated financial statements Separate financial statements

2009 2008 2009 2008

Operating liabilities increase (decrease)

Trade accounts payable and accrued cost - related parties,

management and directors 17,313,968 9,692,443 3,200,281 10,253,197

Trade accounts payable and accrued cost - unrelated parties 96,425,358 1,791,392 2,420,195 (7,103,842)

Accrued expenses 18,395,145 23,476,764 24,569,721 (7,756,851)

Accrued commission 20,953,630 34,321,709 - -

Unearned income 13,227,008 75,900,318 (23,036,638) 57,064,526

Other current liabilities 10,836,884 9,284,282 7,219,185 2,789,890

Other non-current liabilities 2,673,453 7,723,003 - -

Cash flows from operating activities 961,982,168 1,254,374,064 340,123,181 386,190,954

Cash paid for interest expenses (52,627,946) (68,954,920) (7,198,701) (12,074,673)

Cash paid for corporate income tax (227,856,694) (299,160,399) (46,719,368) (113,231,328)

Net cash flows from operating activities 681,497,528 886,258,745 286,205,112 260,884,953

Cash flows from investing activities

Purchases of equipment (315,287,196) (296,789,671) (53,934,044) (76,595,612)

Decrease in accounts payable - purchase of assets - (22,516,190) - (9,278,592)

Cash received from sale on investment in subsidiaries 876,300 - - 10,128,745

Cash paid to purchase additional investments in subsidiaries (16,881,201) (86,271,889) (15,869,251) (19,871,889)

Cash paid to purchase additional investments in associated companies (29,449,799) (14,210,000) (25,000,000) -

Cash paid to purchase of other long-term investments (13,750) (200,000) (13,750) (200,000)

Cash received from disposal of equipments 9,741,043 10,447,143 4,757,200 2,961,908

Cash received from returning of investments in subsidiary - - 93,439,836 77,999,610

Cash received from disposal of other long-term investments 900,000 1,361,039 - 781,039

Cash received from redemption of debt secruities held for maturity - 10,000,000 - -

Decrease (increase) in loans to related parties - - (12,530,000) 11,579,000

Dividend received from other long-term investments 48,509,098 49,286,432 25,029,098 23,756,431

Dividend received from subsidiaries and associated companies 11,949,990 5,250,000 213,024,463 224,871,498

Interest income 18,660,424 33,637,533 13,517,707 13,510,537

Decrease (increase) in current investment (14,421,580) 26,098,952 - 89,366,644

Net cash flows from (used in) investing activities (285,416,671) (283,906,651) 242,421,259 349,009,319

The accompanying notes are an integral part of the financial statements.

087 CASH FLOW STATEMENTS (CONTINUED) GMM Grammy Public Company Limited, its subsidiaries and its jointly controlled entities CashCASH flow FLOWstatements STATEMENTS (continued) FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 For the years ended 31 December 2009 and 2008

(Unit: Baht)

Consolidated financial statements Separate financial statements

2009 2008 2009 2008

Cash flows from financing activities

Increase (decrease) in bank overdraft and short-term loans from banks 609,697,462 (66,167,793) 150,000,000 -

Cash received from long-term loans 8,500,000 485,971,781 - -

Repayment of long-term loans (498,364,979) (443,092,747) (125,000,000) (125,000,000)

Repayment of liabilities under finance lease agreements -18,745,295 (18,679,374) -6,042,266 -4,275,411

Dividend paid (636,316,846) (548,799,104) (636,316,846) (548,799,104)

Dividend paid to minority interest of subsidiaries (17,330,889) (73,853,102) - -

Cash received from minority interest of subsidiaries

from additional investments in subsidiaries - 2,900,000 - -

Net cash flows used in financing activities (552,560,547) (661,720,339) (617,359,112) (678,074,515)

Translation adjustments (2,955,855) (1,664,649) - -

Net decrease in cash and cash equivalents (159,435,545) (61,032,894) (88,732,741) (68,180,243)

Cash and cash equivalents at beginning of year 1,067,687,672 1,128,720,566 305,554,136 373,734,379 Cash and cash equivalents at end of year 908,252,127 1,067,687,672 216,821,395 305,554,136

- - - -

Supplemental cash flows information:

Non-cash transactions:

Assets purchases which payment has yet to be made 4,543,515 - 617,715 -

Increase in assets from finance lease agreements 30,468,707 31,506,633 15,519,000 14,637,257

Increase in investment in subsidiary resulting from

increase in share capital 387,586,380 - 387,586,380 -

The accompanying notes are an integral part of the financial statements.

088 NOTES TO FINANCIAL STATEMENTS GMM Grammy Public Company Limited, its subsidiaries and its jointly controlled entities NOTES TO FINANCIAL STATEMENTS Notes to financial statements FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 For the years ended 31 December 2009 and 2008

1. General information GMM Grammy Public Company Limited (“The Company”) is a public company incorporated and domiciled in Thailand. The Company is principally engaged in various entertainment businesses, including production and distribution of audio products and digital products, copyrights collection, artist managements and production of concerts. It has a registered address is 50 Sukhumvit 21 (Asoke), Klongtoey Nua, Wattana, Bangkok.

2. Basis of preparation 2.1 The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Professions Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 30 January 2009, issued under the Accounting Act B.E. 2543. The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from the Thai language financial statements. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies. 2.2 Basis of consolidation a) The consolidated financial statements include the financial statements of GMM Grammy Public Company Limited (“the Company”) and the following subsidiary companies (“the subsidiaries”) and jointly controlled entities (“jointly controlled entities” - accounted for proportionately to interests):

Revenues as a Assets as a percentage to the percentage to the consolidated total Percentage of Country of consolidated total revenues for the assets as at year ended Company’s name Nature of business shareholding incorporation 31 December 31 December 2009 2008 2009 2008 2009 2008 Percent Percent Percent Percent Percent Percent Subsidiaries directly held by the Company 1. Aratist Management Company Currently non-active 100 100 Thailand - - - - Limited 2. Clean Karaoke Company Limited Karaoke service 100 75.1 Thailand 2 2 2 2 provider 3. Extraorganizer Company Limited Currently non-active 100 100 Thailand - - - - 4. Global Music and Media Manage imported 100 100 Thailand - - - - (Thailand) Company Limited music 5. Global Music and Media Limited Currently non-active 100 100 Cayman Islands - 1 - - 6. GMM Media Public Company Production of radio 99.89 79.75 Thailand 48 48 48 46 Limited programmes 7. GMM Music Publishing Management of 100 100 Thailand 2 2 2 2 International Company Limited music copyrights

1

089 NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

Revenues as a Assets as a percentage to the percentage to the consolidated total Percentage of Country of consolidated total revenues for the assets as at year ended Company’s name Nature of business shareholding incorporation 31 December 31 December 2009 2008 2009 2008 2009 2008 Percent Percent Percent Percent Percent Percent 8. GMM Holding Company Limited Holding company 100 100 Thailand 2 3 1 2 9. GMM Tai Hub Company Limited Production of films 51 51 Thailand 5 4 5 3 10. Lucks Music 999 Company Production of music 50 50 Thailand - - - - Limited master tapes 11. MGA Company Limited Lease of machine 100 100 Thailand - 1 - - and equipment 12. More Music Company Limited Currently non-active 100 100 Thailand - - - - 13. Music Copyright Collection Currently non-active 100 100 Thailand - - - - Company Limited 14. Tifa Company Limited Currently non-active 100 100 Thailand - - - - 15. Upper Cut Company Limited Currently non-active 100 100 Thailand - - - - 16. 3-RD Company Limited Create strategy of 70 70 Thailand 1 1 1 1 marketing 17. G-Gram Company Limited Artist Management 50 - Thailand - - - - Jointly controlled entity 1. Joint Venture The Shutter Production of films 80 80 Thailand - - - -

Percentage of indirect Country of Company’s name Nature of business shareholding incorporation 2009 2008 Percent Percent Subsidiaries held by GMM Media Public Company Limited 1. A-Time Media Company Limited Sub - lease of radio stations 100 100 Thailand 2. GMM TV Company Limited Production of television programmes 100 100 Thailand 3. Teen Talk Company Limited Sub - lease of television stations 100 100 Thailand 4. Bliss Publishing Company Limited Production and distribution of pocket 100 100 Thailand books 5. Mass Monitor Company Limited Holding company 100 100 Thailand 6. Image Publishing Company Limited Production and distribution of 70 70 Thailand magazine 7. Radio Concept Company Limited Currently non-active 100 100 Thailand 8. Exact Company Limited Production of television programmes 51 100 Thailand (Held 49 percent by Mass Monitor Company Limited) 9. GMM Inter Publishing Company Limited Production and distribution of 70 70 Thailand magazine 10. GMM Times Company Limited Production and distribution of 70 70 Thailand magazine 11. Deetalk Company Limited Production of television programmes 100 49 Thailand 12. Index Event Agency Public Company Limited Business events advisor and 50 50 Thailand organizer 13. Open Radio Company Limited Currently non-active 100 100 Thailand

090 2

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

Percentage of indirect Country of Company’s name Nature of business shareholding incorporation 2009 2008 Percent Percent 14. In Publishing Company Limited Production and distribution of 70 70 Thailand magazine Subsidiaries held by GMM Holding Company Limited 1. GMM Studio Company Limited Studio service 100 100 Thailand

2. Sanamluang Garndontree Company Limited Music creation and production 100 100 Thailand 3. Mifah Company Limited Music academy 100 100 Thailand 4. GMM Digital Domain Company Limited Digital content Provider 100 100 Thailand 5. Magic Film Company Limited Currently non-active 90.91 90.91 Thailand 6. Grammy Publishing House Company Limited Distribution of education 100 100 Thailand publication 7. Global Music and Media (China) Limited Currently non-active 100 100 Hong Kong 8. GMM Fitness Club Company Limited Management of Fitness center 100 100 Thailand

Subsidiary held by GMM Digital Domain Company Limited 1. Digital Arms Company Limited Digital content Provider 100 100 Thailand

Subsidiary held by Global Music and Media Limited 1. Global Music and Media (Asia) Limited Deregistered - 100 Hong Kong

Subsidiary held by GMM Music Publishing International Company Limited 1. G.I.P. Management Company Limited Management of music copyrights 100 100 Thailand

Subsidiaries held by GMM Tai Hub Company Limited 1. Sawasdee Taweesuk Company Limited Design and postproduction of 100 100 Thailand (Formerly known as ‘’Two To Film Company Limited’’) advertising media and films and public relations for films 2. Phenomena Motion Pictures Company Limited Production and distribution of films 51 51 Thailand

Subsidiaries held by Index Event Agency Public Company Limited 1. Event Solutions Company Limited Provision of equipment for 100 100 Thailand entertainment events 2. Tresbien Company Limited Decoration and provision of 100 89.6 Thailand equipment for conferences and ceremonial events 3. Media Vision (1994) Company Limited Light and sound system installation 51 51 Thailand for entertainment events 4. G Communications Company Limited Provision of public relations and 50 50 Thailand event services 5. Inspire Image Company Limited Preparation, installation and 60 60 Thailand removal of advertising boards 6. I Think Ad Company Limited Advertising and public relations 40 50 Thailand services 7. D-63 Company Limited Service provider of design screen 50 50 Thailand and stage 091

3

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

Percentage of indirect Country of Company’s name Nature of business shareholding incorporation 2009 2008 Percent Percent 8. Index Creative Online Company Limited Consultancy, design and 70 - Thailand development services for web sites and flash media.

Subsidiary held by Event Solutions Company Limited 1. Aspen Index Event Company Limited Provision of service and 50 50 United Arab organization of activities in Middle Emirates East

Jointly controlled entities held by Sawasdee Taweesuk Company Limited 1. Joint Venture GFIVE Ceased the operation - 50 Thailand 2. Joint Venture BG Ceased the operation - 50 Thailand 3. Joint Venture Dek Ho (Held 30 percent by Phenomena Production of films 70 70 Thailand Motion Pictures Company Limited)

Jointly controlled entities held by Index Event Agency Public Company Limited 1. Joint Venture ID2 Construction Designed and 67 - Thailand Management of Thai exhibition Building 2. Joint Venture Fast Track World Expo Tour Tourism 50 - Thailand

b) Subsidiaries and jointly controlled entities are fully consolidated as from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. c) During the year 2009, there were the following changes in the composition of the subsidiaries and the jointly controlled entities: 1) In February 2009, the Company made additional investment in the ordinary shares of GMM Media Public Company Limited (a subsidiary), issuing 40,264,947 new ordinary shares to swap with shares of the minority shareholders of the subsidiary at a ratio of 1 new ordinary share of the Company for 1 ordinary share of the subsidiary. As a result, the Company’s shareholding in that company increased from 79.75 percent to 99.86 percent. In the same month, the Company acquired a further 63,600 ordinary shares, at prices of Baht 7.0 – 9.5 per share, for a total of Baht 0.6 million. As a result, its shareholding rose from 99.86 percent to 99.89 percent. In April 2009, the Company acquired a further 3,000 ordinary shares in that company at prices of Baht 8.5 per share, for a total of Baht 0.03 million. As a result, its shareholding in that company remains unchanged at 99.89 percent. 2) In March 2009, Index Event Agency Public Company Limited, a subsidiary, additionally invested in 30,000 ordinary shares of Tresbien Company Limited, a subsidiary, at a price of Baht 10.47 per share, for a total of Baht 0.3 million. As a result, its shareholding in that company increased from 89.6 percent to 100 percent. 3) In April 2009, Index Event Agency Public Company Limited, a subsidiary, invested in 34,999 ordinary shares of Index Creative Online Company Limited at a price of Baht 100 per share, for a total of Baht 3.5 million, which registered its incorporation 4

092 NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

with the Ministry of Commerce on 25 March 2009. The Company’s investment represents 70 percent of the registered capital of such company. 4) In April 2009, Index Event Agency Public Company Limited, a subsidiary, invested in the Joint Venture ID2, which is participated by another two companies which are Design 103 International Limited and R.N.C (Thailand) Company Limited. The Company acquires 67 percent interest in such joint venture. 5) In September 2009, the Company invested in 49,998 ordinary shares of G-Gram Company Limited at a price of Baht 5 per share, for a total of Baht 0.25 million (50 percent paid up) which registered its incorporation with the Ministry of Commerce on 3 September 2009. The Company’s investment represents 50 percent of the registered capital of such company. 6) In September 2009, the joint controllers of Joint Venture GFIVE agreed to cease its operation. 7) In October 2009, Index Event Agency Public Company Limited, a subsidiary, invested in the Joint Venture Fast Track World Expo Tour, which is participated by the other company which is Starbridge Intertrade Company Limited. The Company acquires 50 percent interest in such joint venture. 8) In November 2009, Index Event Agency Public Company Limited, a subsidiary, sold some of the 5,000 ordinary shares comprising its investment in I Think Ad Company Limited, a subsidiary, to the minority interest of such company at a price of Baht 175.26 per share, for a total of Baht 0.9 million. As a result of this divestment, Index Event Agency Public Company Limited’s shareholding in the company decreased from 50 percent to 40 percent. Since Index Event Agency Public Company Limited still has the control over the company, the investment is presented as a subsidiary. 9) In December 2009, the Company additionally invested in 498,000 ordinary shares of Clean Karaoke Company Limited, a subsidiary, at a price of Baht 30.12 per share, for a total of Baht 15 million. As a result, its shareholding in that company increased from 75.1 percent to 100 percent. 10) In December 2009, Global Music and Media (Asia) Limited, a subsidiary, deregistered. 11) In December 2009, the joint controllers of Joint Venture BG agreed to cease its operation. d) The financial statements of the subsidiaries and jointly controlled entities are prepared for the same reporting period as the parent company, using consistent significant accounting policies. e) The financial statements of oversea subsidiary companies are translated into Thai Baht at the closing exchange rate as to assets and liabilities, and at the monthly average exchange rates as to revenues and expenses. The resultant differences are shown under the caption of “Translation adjustment” in shareholders’ equity. f) Material balances, and transactions between the Company, its subsidiaries and its jointly controlled entities and intercompany profit on inventories outstanding as at the balance sheet date have been eliminated from the consolidated financial statements. g) Minority interests represent the portion of net income or loss and net assets of the subsidiaries that are not held by the Company and are presented separately in the consolidated income statement and within equity in the consolidated balance sheet.

5

093 NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

2.3 The separate financial statements, which present investments in subsidiaries, joint ventures and associates presented under the cost method, have been prepared solely for the benefit of the public.

3. Adoption of new accounting standards In June 2009, the Federation of Accounting Professions issued Notification No. 12/2552, assigning new numbers to Thai Accounting Standards that match the corresponding International Accounting Standards. The numbers of Thai Accounting Standards as referred to these financial statements reflect such change. The Federation of Accounting Professions has issued Notification No. 86/2551 and 16/2552, mandating the use of new accounting standards, financial reporting standard and accounting treatment guidance as follows: 3.1 Accounting standards, financial reporting standard and accounting treatment guidance which are effective for the current year Framework for the Preparation and Presentation of Financial Statements (revised 2007) TAS 36 (revised 2007) Impairment of Assets TFRS 5 (revised 2007) Non-current Assets Held for Sale and Discontinued Operations Accounting Treatment Guidance for Leasehold Right Accounting Treatment Guidance for Business Combination under Common Control These accounting standards, financial reporting standard and accounting treatment guidance became effective for the financial statements for fiscal years beginning on or after 1 January 2009. The management has assessed the effect of these standards and believes that TFRS 5 (revised 2007) are not relevant to the business of the Company, while Framework for Preparation and Presentation of Financial Statements (revised 2007), TAS 36 (revised 2007), Accounting Treatment Guidance for Leasehold Right and Accounting Treatment Guidance for Business Combination under Common Control do not have any significant impact on the financial statements for the current year. 3.2 Accounting standards which are not effective for the current year Effective date TAS 20 Accounting for Government Grants and Disclosure 1 January 2012 of Government Assistance TAS 24 (revised 2007) Related Party Disclosures 1 January 2011 TAS 40 Investment Property 1 January 2011 However, TAS 24 (revised 2007) and TAS 40 allow early adoption by the entity before the effective date. The management of the Company has assessed the effect of these standards and believes that TAS 20 and TAS 40 are not relevant to the business of the Company, while TAS 24 (revised 2007) does not have any significant impact on the financial statements for the year in which it is initially applied.

4. Significant accounting policies 4.1 Revenue recognition a. Sales of goods Sales of goods are recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Sales are the invoiced value, excluding value added tax, of goods supplied after deducting discounts and allowances. b. Revenues from production of radio, television and satellite television programmes

6

094 NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

Revenues from production of radio and television programmes represent the service income from advertising, promotion and production of television programmes and are stated on the basis of the invoiced value, after deducting discounts and allowances. Service income from advertising and promotion is recognised when services have been rendered and programmes broadcast. Service income from production of television programmes’s recognised when the production is completed. c. Revenues from production of concerts Revenues from production of concerts represent income from production of concerts and are recognised as income when the performances take place. d. Revenues from production of motion pictures Income from box-office sharing is recognised as income when the motion pictures have been exhibited. Sales of motion pictures and advertising income are the invoiced value of the films delivered and the services rendered after deducting discounts and allowances. In cases where royalties from motion pictures are charged at fixed amounts which the licensee cannot refund and the licensor has no further obligations subsequent to granting the rights, the royalties are recognised as income in full when the licensee is entitled to exploit the rights under the terms of the agreement. e. Revenues from copyrights Revenues from copyrights are recognised when the right to receive the copyrights is established. f. Revenues from advertising in publishing media Revenues from advertising in publishing media are recognised as income when service is rendered. g. Sales of books, teaching aids and magazines Sales of books, teaching aids and magazines are recognised when the significant risks and rewards of ownership of books, teaching aids and magazines have passed to buyer. Sales of books, teaching aids and magazines are the invoiced value, excluding value added tax, of books, teaching aids and magazines supplied after deducting discounts and allowances. h. Management fee and consultant fee income Management fee and consultant fee income are recognised when service has been rendered. i. Artist management incomes Artist management incomes are recognised when service has been rendered. j. Revenues from studio service Revenues from studio service are recognised when service has been rendered. k. Revenues from event advisor and organizer and provision of event equipment Revenues from event advisor and organizer and provision of event equipment are recognised when service has been rendered. l. Revenues from production and service Revenues from production and service are recognised when service has been rendered. m. Interest income Interest income is recognised as interest accrues based on the effective rate method. n. Dividends Dividends are recognised when the right to receive the dividends is established. Revenues are reflected in the financial statements exclusive of value added tax.

7

095 NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

4.2 Cash and cash equivalents Cash and cash equivalents consist of cash in hand and cash at bank, and all highly liquid investments with an original maturity of three months or less and not subject to restrictions.

4.3 Trade accounts receivable Trade accounts receivable are stated at the net realisable 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 experience and analysis of debt aging. 4.4 Inventories a. Tape reels, cassette tapes and compact discs are valued at the lower of cost (moving average method) and net realisable value. b. Cassette tapes and compact discs licensed from overseas companies, video tapes and laser discs are valued at the lower of cost (moving average method) and net realisable value. c. Television programmes represent the accumulated production costs of television programmes in progress and those which are completed and ready for broadcasting. The costs, which consist of expenses directly associated with programme production, are charged against income when the programmes are broadcasted. d. Master tapes represent the accumulated costs of master tape production in progress and which has been completed. The costs, which consist of expenses directly associated with production, are charged against income when the tapes are released. e. Motion picture production represents the accumulated production and filming costs of films which are currently in production. f. Magazine and pocket books are valued at the lower of cost (average method) and net realisable value. g. Other inventories are valued at the lower of cost (first-in, first-out and average method) and net realisable value. 4.5 Investments a) Investments in available-for-sale securities are stated at fair value. Changes in the carrying amounts of securities are recorded as separate items in shareholders’ equity until the securities are sold, when the changes are then included in determining income. b) Investments in debt securities, both due within one year and expected to be held to maturity, are recorded at amortised cost. The premium/discount on debt securities is amortised by the effective rate method with the amortised amount presented as an adjustment to the interest income. c) Investments in non-marketable equity securities, which the Company classifies as other investments, are stated at cost net of allowance for loss on diminution in value (if any). d) Investments in associates are accounted for in the consolidated financial statements using the equity method. e) Investments in joint ventures are accounted for in the consolidated financial statements using the proportionate consolidation method. f) Investments in subsidiaries, joint ventures and associates are accounted for in the separate financial statements using the cost method. The fair value of marketable securities is based on the latest bid price of the last working day of the year as quoted on the Stock Exchange of Thailand. The fair value of debt instruments is determined based on the required rate of return or the yield rates quoted by the Thai Bond Market Association. The fair value of unit trusts is determined from their net asset value. The weighted average method is used for computation of the cost of investments. 8

096 NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

In the event the Company reclassifies investments in securities, such investments are adjusted to their fair value as at the reclassification date. Differences between the carrying amount of the investments and their fair value on that date are included in determining income (loss) or recorded as surplus (deficit) from changes in the value of investments in shareholders’ equity, depending on the type of investment which is reclassified. 4.6 Property, plant and equipment/Depreciation Land is stated at cost. Building and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of assets (if any). Depreciation of building and equipment is calculated by reference to their costs on a straight- line basis over the following estimated useful lives: Buildings - 20 years Building improvement - 5 years Operating equipment - 5 years Furniture, fixtures, and office equipment - 3, 5 and 7 years Motor vehicles - 5 years Others - 5 years Depreciation is included in determining income. No depreciation is provided for land, construction in progress and equipment under installation. 4.7 Intangible assets Intangible assets acquired in a business combination are recognised at fair value on the date of acquisition. Other acquired intangible assets are measured at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses (if any). Intangible assets with finite lives are amortised on a systematic basis over the useful economic useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation expense is charged to the income statement. A summary of the intangible assets with finite useful lives is as follows: Film production and shooting costs are amortised on the basis of projected revenues within 10 years from the time the motion pictures are exhibited. Computer software and game licenses are amortised on a straight-line basis over the lease period. Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually either individually or at the cash generating unit level. The assessment of indefinite life is reviewed annually. Intangible asset with indefinite useful lives is the copyrights to musical compositions. 4.8 Goodwill Goodwill is initially measured at cost, which is the excess of the cost of the business combination over the Company’s share in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement. Goodwill is carried at cost less any accumulated impairment losses. Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the Company’s cash generating units (or group of cash-generating units) that are expected to benefit from the synergies of the combination. The Company estimates the recoverable amount of each cash-generating unit (or group of cash-generating units) to which 9

097 NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods. 4.9 Related party transactions Related parties comprise enterprises and individuals that control or are controlled by the Company, its subsidiaries and its jointly controlled entities, whether directly or indirectly, or which are under common control with the Company, its subsidiaries and its jointly controlled entities. They also include associated companies and individuals which directly or indirectly own a voting interest in the Company, its subsidiaries and its jointly controlled entities that gives them significant influence over the Company, its subsidiaries and its jointly controlled entities, key management personnel, directors and officers with authority in the planning and direction of the Company’s, its subsidiaries’ and its jointly controlled entities’ operations. 4.10 Long-term leases Leases of property, plant or equipment which transfer substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lower of the fair value of the leased assets and the present value of the minimum lease payments. The outstanding rental obligations, net of finance charges, are included in other long-term payables, while the interest element is charged to the income statements over the lease period. The property, plant or equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset and the lease period. 4.11 Foreign currencies Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rate ruling at the balance sheet date. Gains and losses on exchange are included in determining income. 4.12 Impairment of assets At each reporting date, the Company performs impairment reviews in respect of the property, plant and equipment and other intangible assets whenever events or changes in circumstances indicate that an asset may be impaired. The Company also carries out annual impairment reviews in respect of goodwill and intangible assets with indefinite useful lives. An impairment loss is recognised when the recoverable amount of an asset, which is the higher of the asset’s fair value less costs to sell and its value in use, is less than the carrying amount. In determining value in use, the estimated future cash flows are discounted to their present value using a pre- tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by a valuation model that, based on information available, reflects the amount that the Company could obtain from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal. An impairment loss is recognised in the income statement. 4.13 Provision for goods returns Provision for goods returns is estimated with reference to actual goods returns occurring during the year and calculated at the rate of sales made during the year. 4.14 Employee benefits Salaries, wages, bonuses and contributions to the social security fund and provident fund are recognised as expenses when incurred.

10

098 NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

4.15 Provisions Provisions are recognised when the Company, its subsidiaries and its jointly controlled entities have a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. 4.16 Income Tax Income tax is provided in the accounts based on taxable profits determined in accordance with tax legislation.

5. Significant accounting judgments and estimates The preparation of financial statements in conformity with generally accepted accounting principles at times requires management to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgments and estimates affect reported amounts and disclosures and actual results could differ. Significant judgments and estimates are as follows: Leases In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to use judgment regarding whether significant risk and rewards of ownership of the leased asset has been transferred, taking into consideration terms and conditions of the arrangement. Allowance for doubtful accounts In determining an allowance for doubtful accounts, the management needs to make judgment and estimates based upon, among other things, past collection history, aging profile of outstanding debts and the prevailing economic condition. Impairment of equity investments The Company treats available-for-sale investments and other investments as impaired when the management judges that there has been a significant or prolonged decline in the fair value below their cost or where other objective evidence of impairment exists. The determination of what is “significant” or “prolonged” requires judgment. Property plant and equipment/Depreciation In determining depreciation of plant and equipment, the management is required to make estimates of the useful lives and salvage values of the Company’s plant and equipment and to review estimate useful lives and salvage values when there are any changes. In addition, the management is required to review property, plant and equipment for impairment on a periodical basis and record impairment losses in the period when it is determined that their recoverable amount is lower than the carrying amount. This requires judgments regarding forecast of future revenues and expenses relating to the assets subject to the review. Goodwill and intangible assets The initial recognition and measurement of goodwill and other intangible assets, and subsequent impairment testing, require management to make estimates of cash flows to be generated by the asset or the cash generating units and to choose a suitable discount rate in order to calculate the present value of those cash flows. Litigation The Company has contingent liabilities as a result of litigation. The Company’s management has used judgment to assess of the results of the litigation and believes that no loss will result. Therefore no contingent liabilities are recorded as at the balance sheet date.

11

099 NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

6. Related party transactions During the years, the Company, its subsidiaries and its jointly controlled entities had significant business transactions with related parties. Such transactions, which are summarised below, arose in the ordinary course of business and were concluded on commercial terms and bases agreed upon between the Company and those related parties. (Unit: Million Baht) Consolidated financial statements Pricing policy 2009 2008 Transactions among the Company, its subsidiaries and its jointly controlled entities and their related companies Rental expenses and Other service expenses 151 138 (1) / (5) / (7)

Transactions among the Company, its subsidiaries and its jointly controlled entities and their associated companies Revenues from production of television programmes 24 26 (2) Other service income 9 6 (5) Service expenses 195 142 (5)

Transactions among the Company, its subsidiaries and its jointly controlled entities and their management and directors Service expenses 17 20 (3)/(5) Loans from directors 3 8 (6)

(Unit: Million Baht) Separate financial statements Pricing policy 2009 2008 Transactions between the Company and its subsidiaries (eliminated from the consolidated financial statements) Artist management income 13 19 (4) Sales of audio products 5 4 (4) Revenues from copyrights 93 111 (3) Revenues from production of concerts 16 21 (4) Other service income 92 86 (5) Service expenses 354 308 (5) Purchases of equipment - 18 (8) / (9) Purchase of copyrights on motion pictures - 59 (7)

Transactions between the Company and the associated companies Service expenses 6 8 (5)

Transactions between the Company and its related companies Rental and Other service expenses 91 69 (1) / (5) / (7)

Transactions between the Company and its management and directors Service expenses 5 8 (3)/(5)

(1) Contract price with the rental rate as appraised by independent valuer or the contract price (2) With reference to prices charged to third parties depending on when the sales were made and the agreement. (3) Charge per unit sold with reference to market price (4) Cost plus margin (5) Mutually agreed price (6) Minimum interest rate charged on loans from directors is charged at the rate not lower than the fixed deposit rate of local commercial banks (7) Contract price (8) Net book value (9) Market price as appraised by independent valuer

12

0100 NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

The balances of the accounts as at 31 December 2009 and 2008 between the Company and those related parties are as follow: (Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2009 2008 2009 2008 Trade accounts receivable - related parties and directors Subsidiaries: GMM Music Publishing International Company Limited - - 7,648 9,377 Exact Company Limited - - 4,920 16,380 GMM Media Public Company Limited - - 6,597 6,692 Magic Film Company Limited - - 13,878 13,867 Other subsidiaries - - 5,828 5,226 Total trade accounts receivable - subsidiaries - - 38,871 51,542 Jointly controlled entities 567 84 - - Associated companies: Scenario Company Limited 7,804 7,794 194 181 Other associated company 1,161 - - - Total trade accounts receivable - associated companies 8,965 7,794 194 181 Related companies 408 408 408 408 Total trade accounts receivable - related parties and directors 9,940 8,286 39,473 52,131

Advances to and interest receivable from related parties and directors Subsidiaries: GMM Music Publishing International Company Limited - - 22,439 20,414 Exact Company Limited - - 1,943 5,559 GMM Inter Publishing Company Limited - - 6,250 5,332 GMM Times Company Limited - - 5,501 4,743 GMM Holding Company Limited - - - 35,000 Other subsidiaries - - 14,146 15,965 Total advances to and interest receivable from subsidiaries - - 50,279 87,013 Jointly controlled entities - 17 - 86 Associated companies 151 126 101 96 Related companies 42 50 42 50 Directors 21,031 38,806 11,869 12,736 Total advances to and interest receivable from related parties and directors 21,224 38,999 62,291 99,981 Less: Allowance for long-term outstanding advances (11,869) (12,374) (11,869) (12,374) Advances to and interest receivable from related parties and directors – net 9,355 26,625 50,422 87,607

Accrued income from related parties Subsidiaries: GMM Digital Domain Company Limited - - 14,268 21,454 Digital Arms Company Limited - - 2,085 23,301

13

0101 NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

(Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2009 2008 2009 2008 GMM TV Company Limited - - 11,608 4,740 Other subsidiaries - - - 27 Total accrued income from subsidiaries - - 27,961 49,522 Associated company 7 7 - - Total accrued income from related parties 7 7 27,961 49,522

Loans to related parties Subsidiaries: Tifa Company Limited - - 3,500 4,490 Clean Karaoke Company Limited - - 19,500 7,980 3-RD Company Limited - - 24,000 22,000 Total loans to related parties - - 47,000 34,470

Trade accounts payable and accrued cost – related parties, management and directors Subsidiaries: GMM TV Company Limited - - 32,510 16,355 Exact Company Limited - - 9,588 4,146 GMM Media Public Company Limited - - 25,324 14,944 GMM Tai Hub Company Limited - - 980 15,445 MGA Company Limited - - 10,062 26,248 Mifah Company Limited - - 2,087 7,532 GMM Fitness Club Company Limited - - 9,434 1,385 Other subsidiaries - - 7,697 8,378 Total trade accounts payable and accrued cost – subsidiaries - - 97,682 94,433 Jointly controlled entities - 281 - - Associated companies: Scenario Company Limited 45,500 26,069 192 435 Other associated companies 3,169 5,059 267 - Total trade accounts payable and accrued cost - associated companies 48,669 31,128 459 435 Related companies: Geurt Fah Company Limited 5,818 5,375 3,586 3,615 Other related companies 3,378 3,569 61 48 Total trade accounts payable and accrued cost - related companies 9,196 8,944 3,647 3,663 Management and directors 5,092 5,290 4,423 4,480 Total trade accounts payable and accrued cost - related parties, management and directors 62,957 45,643 106,211 103,011

Account payable – purchase of assets from related party Subsidiary GMM Fitness Club Company Limited - - 10,512 10,512 Total Account payable - purchase of assets from related party - - 10,512 10,512

14

0102 NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

During 2009, movements of loans to related parties were as follows: (Unit: Thousand Baht) Separate financial statements Balance as at During the year Balance as at 1 January 2009 Increase Decrease 31 December 2009 Loans to related parties Subsidiaries: Tifa Company Limited 4,490 - (990) 3,500 Clean Karaoke Company Limited 7,980 11,520 - 19,500 3-RD Company Limited 22,000 2,000 - 24,000 34,470 13,520 (990) 47,000

Minimum interest rate charged on loans to subsidiaries is charged at the rate not lower than the rate of minimum loan rate (MLR) minus interest rate 1 percentage per annum.

7. Trade accounts receivable The balances of trade accounts receivable as at 31 December 2009 and 2008, aged on the basis of due dates, are summarised below.

(Unit: Thousand Baht) Consolidated financial statements Separate financial statements 2009 2008 2009 2008 Trade accounts receivable - related parties and director Not yet due 6,236 5,118 17,277 35,523 Pass due Up to 3 months 2,828 2,209 6,871 3,764 3 - 6 months - - 439 1,049 6 - 12 months - 36 3,092 5,008 Over 12 months 876 923 11,794 6,787 Total 9,940 8,286 39,473 52,131

Trade accounts receivable – unrelated parties Not yet due 896,076 1,191,127 358,046 558,930 Pass due Up to 3 months 672,594 465,178 248,765 177,332 3 - 6 months 80,913 38,875 46,723 15,576 6 - 12 months 42,049 33,904 19,762 7,690 Over 12 months 229,808 212,548 44,853 52,269 Total 1,921,440 1,941,632 718,149 811,797 Less: Allowance for doubtful accounts (206,296) (208,117) (51,718) (53,824) Net 1,715,144 1,733,515 666,431 757,973 Trade accounts receivable - net 1,725,084 1,741,801 705,904 810,104

15

0103 NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

8. Inventories (Unit: Thousand Baht) Consolidated financial statements Allowance for stock Cost obsolescence Inventory-net 2009 2008 2009 2008 2009 2008 Tape reels, cassette tapes, CDs, video tapes and laser discs 598,136 524,127 (79,117) (77,518) 519,019 446,609 Motion picture production 29,069 33,444 - - 29,069 33,444 Television programmes 49,558 50,493 - - 49,558 50,493 Work in process 72,220 29,114 - - 72,220 29,114 Books, teaching aids and magazines 47,731 54,671 (19,732) (18,970) 27,999 35,701 Others 36,417 36,136 - - 36,417 36,136 Total 833,131 727,985 (98,849) (96,488) 734,282 631,497

(Unit: Thousand Baht) Separate financial statements Allowance for stock Cost obsolescence Inventory-net 2009 2008 2009 2008 2009 2008 Tape reels, cassette tapes, CDs, video tapes and laser discs 606,307 535,780 (74,841) (73,241) 531,466 462,539 Television programmes 3,965 6,193 - - 3,965 6,193 Work in process 71,876 28,747 - - 71,876 28,747 Others 29,295 29,651 - - 29,295 29,651 Total 711,443 600,371 (74,841) (73,241) 636,602 527,130

9. Investments in subsidiaries Details of investments in subsidiaries as presented in separate financial statements are as follows:

(Unit: Thousand Baht) Separate financial statements

Dividend received during the Company’s name Paid-up capital Shareholding percentage Cost year

2009 2008 2009 2008 2009 2008 2009 2008 (Million Baht) (Million Baht) (Percentage) (Percentage) Investments in subsidiaries MGA Company Limited 10.5 42 100 100 10,500 42,000 - - Music Copyright Collection 2 2 100 100 2,000 2,000 - - Company Limited GMM Media Public Company 200 200 99.89 79.75 556,977 168,771 184,027 183,654 Limited Extraorganizer Company Limited 1 1 100 100 999 999 - 1,499 Upper Cut Company Limited 20 20 100 100 19,999 19,999 - 13,100 Global Music and Media 30 30 100 100 30,000 30,000 - - (Thailand) Company Limited More Music Company Limited 13 13 100 100 12,500 12,500 1,400 - Aratist Management Company Limited 20 20 100 100 19,999 19,999 - -

16

104 NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

(Unit: Thousand Baht) Separate financial statements

Dividend received during the Company’s name Paid-up capital Shareholding percentage Cost year

2009 2008 2009 2008 2009 2008 2009 2008 (Million Baht) (Million Baht) (Percentage) (Percentage) GMM Holding Company Limited 100 100 100 100 100,000 100,000 4,000 35,000 Global Music and Media Limited 2 million US 2 million US 100 100 9,820 71,760 - - dollar dollar Hub Ho Hin Film Company ------621 Limited GMM Music Publishing International 5 5 100 100 4,999 4,999 46,995 44,995 Company Limited GMM Tai Hub Company Limited 225 225 51 51 181,050 181,050 - - Tifa Company Limited 10 10 100 100 10,000 10,000 - - Clean Karaoke Company Limited 200 200 100 75.1 164,270 149,270 - - Lucks Music 999 Company 20 20 50 50 9,999 9,999 - - Limited 3-RD Company Limited 18 18 70 70 12,733 12,733 - - G-Gram Company Limited 0.5 - 50 - 250 - - -

Total 1,146,095 836,079 236,422 278,869

Less: Allowance for impairment loss on investments (240,259) (241,399)

Net 905,836 594,680

a) The Extraordinary General Meeting of the Company’s shareholders No.1/2008 passed a resolution to purchase shares of GMM Media Public Company Limited’s from all of its minority shareholders. On 12 February 2009, the Company swapped shares with minority shareholders of GMM Media Public Company Limited, based on a ratio of 1 new ordinary share of the Company, with a market price of Baht 9.5-9.7 per share, for a total of Baht 387.6 million, for 1 ordinary share of that company; acquiring a total of 40,264,947 ordinary shares with a net book value of Baht 198.0 million. The Company recorded the excess of the market price of the ordinary shares of the Company over the attributable net asset value of such subsidiary company at the acquisition date, amounting to Baht 189.6 million, in shareholders’ equity under the caption of “Difference resulting from share swap between the Company and a subsidiary company”. As a result of the share swap, the Company’s shareholding in GMM Media Public Company Limited increased from 79.75 percent to 99.86 percent, and in the same month, the Company acquired a further 63,600 ordinary shares, at prices of Baht 7.0-9.5 per share, for a total of Baht 0.6 million. Increasing its shareholding from 99.86 percent to 99.89 percent. In April 2009, the Company acquired a further 3,000 ordinary shares in that company at prices of Baht 8.5 per share, for a total of Baht 0.03 million. As a result, its shareholding in that company remains unchanged at 99.89 percent. The Company registered the change in the paid-up share capital from Baht 490,000,000 (490,000,000 ordinary shares of Baht 1 each) to Baht 530,264,947 (530,264,947 ordinary shares of Baht 1 each) with the Ministry of Commerce on 12 February 2009, and recorded the difference between the par value of the Company’s ordinary shares and the market price, totaling Baht 347 million, under the caption of “Share premium” in shareholders’ equity. On 19 February 2009, the Board of the Stock Exchange of Thailand approved the delisting of GMM Media Public Company Limited’s ordinary shares from the Stock Exchange of Thailand.

17 105

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

b) In April 2009, GMM Media Public Company Limited acquired an additional 5,100 ordinary shares of Deetalk Company Limited from Mass Monitor Company Limited (a subsidiary company held by GMM Media Public Company Limited.) at a price of Baht 43,515.40 per share or a total of Baht 222 million. This represents 51 percent of the registered share capital of that company. However, changes in shareholding is the restructuring within GMM Grammy Group which have no impact on the consolidated financial statements. c) In April 2009, Mass Monitor Company Limited acquired an additional 294,000 ordinary shares of Exact Company Limited from GMM Media Public Company Limited at a price of Baht 111.02 per share or a total of Baht 32.6 million. This represents 49 percent of the registered share capital of that company. However, changes in shareholding is the restructuring within GMM Grammy Group which have no impact on the consolidated financial statements. d) In August 2009, Index Event Agency Public Company Limited, a subsidiary, purchased 160,000 additionally issued ordinary shares of Event Solutions Company Limited, its subsidiary company, at a price of Baht 100 per share, for a total of Baht 16 million. As a result its shareholding in that company remains unchanged at 100 percent. e) In September 2009, the Company invested in 49,998 ordinary shares of G-Gram Company Limited at a price of Baht 5 per share, for a total of Baht 0.25 million (50 percent paid up) which registered its incorporation with the Ministry of Commerce on 3 September 2009. The Company’s investment represents 50 percent of the registered capital of such company. f) In December 2009, the Company additionally invested in 498,000 ordinary shares of Clean Karaoke Company Limited, a subsidiary company, at a price of Baht 30.12 per share, for a total of Baht 15 million. As a result, its shareholding in that company increased from 75.1 percent to 100 percent. g) In December 2009, MGA Company Limited, a subsidiary company, reduced of its registered share capital by Baht 31.5 million, from its prior level of Baht 42 million, by reducing the par value of the shares from Baht 35 to Baht 8.75 per share. As a result the registered share capital of this Company is Baht 10.5 million, consisting of 1,200,000 shares of Baht 8.75 each. The capital reduction has no effect to the Company’s shareholding in that Company. h) In December 2009, Global Music and Media Company Limited, a subsidiary company, returned investment of the Company for a total of Baht 61.9 million. As at 31 December 2009, it is on the process of liquidation.

10. Investments in joint ventures 10.1 Details of investments in joint ventures: Investments in joint ventures represent investments in entities which are jointly controlled by the Company and other companies. Details of these investments are as follows: (Unit: Thousand Baht) Separate financial statements Provision for Carrying amounts Jointly controlled Nature of Shareholding impairment of based on cost entities business percentage Cost investments method - net 2009 2008 2009 2008 2009 2008 2009 2008 (%) (%) Joint Venture The Production of 80 80 ------Shutter films Total ------18

106 NOTES TO FINANCIAL STATEMENTS

In 2005, Joint Venture The Shutter returned all investment of the Company, in proportion to its interest. (Unit: Thousand Baht) Consolidated financial statements Shareholding Jointly controlled entities Nature of business percentage Cost 2009 2008 2009 2008 (%) (%) Joint Venture The Shutter Production of films 80 80 - - Joint Venture GFIVE Ceased the operation - 50 - 5,500 Joint Venture BG Ceased the operation - 50 - 18,500 Joint Venture Dek Ho Production of films 100 100 1,000 2,000 Joint Venture ID2 Construction Designed 67 - 27,060 - and Management of Thai exhibition Building Joint Venture Fast Track Travel Agent 50 - 125 - World Expo Tour Total 28,185 26,000 In April 2009, Index Event Agency Public Company Limited, a subsidiary, invested in the Joint Venture ID2, which is participated by another two companies which are Design 103 International Limited and R.N.C (Thailand) Company Limited. The Company acquires 67 percent interest in such joint venture. In October 2009, Index Event Agency Public Company Limited, a subsidiary, invested in the Joint Venture Fast Track World Expo Tour, which is participated by the other company which is Starbridge Intertrade Company Limited. The Company acquires 50 percent interest in such joint venture. In September 2009, the joint controllers of Joint Venture GFIVE agreed to cease its operation. In December 2009, the joint controllers of Joint Venture BG agreed to cease its operation. 10.2 Summarised financial information of jointly controlled entities (Unit: Million Baht) As at 31 December 2009 2008 Current assets 60.7 8.6 Non-current assets 1.5 2.1 62.2 10.7 Current liabilities (22.8) (1.4) Non-current liabilities - - Net assets 39.4 9.3

(Unit: Million Baht) For the year ended 31 December 2009 2008 Revenue 117.6 4.3 Cost of sales (108.9) (3.4) Selling and administrative expenses (0.4) (0.5) Income before corporate income tax 8.3 0.4 Corporate income tax (2.6) - Net income 5.7 0.4

107 19

NOTES TO FINANCIALSTATEMENTS 108 NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

11. Investments in associates 11.1 Details of associates: (Unit: Thousand Baht) Consolidated financial statements Nature of Country of Percentage of Carrying amounts Company’s name business incorporation Paid up capital shareholding Cost based on equity method 2009 2008 2009 2008 2009 2008 2009 2008 (Million Baht) (Million Baht) (Percentage) (Percentage) Associates held by the subsidiaries

Scenario Company Limited Production of Thailand 70 70 25 25 17,500 17,500 110,069 80,573 television programmes Encore Company Limited Business events Thailand 42 37 37 37 15,540 13,690 15,775 16,846 advisors and organizer Channel [V] Music (Thailand) Company Production of Thailand 110 110 25 25 27,500 27,500 26,624 30,929 Limited television programmes Nadown Bangkok Company Limited Films production Thailand 2 - 30 - 600 - 620 - and talent agency services Blue media Communications Company Provider of Thailand 5 - 40 - 2,000 - 1,617 - Limited media design, production and distribution services Associates held by the Company

Family Know How Company Limited Production of Thailand 50 - 50 - 25,000 - 27,698 - television programmes 88,140 58,690 182,403 128,348

20

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

(Unit: Thousand Baht)

Separate financial statements

Nature of Country of Percentage of Allowance for Carrying amounts

Company’s name business incorporation shareholding Cost Impairment of investments based on cost method - net

2009 2008 2009 2008 2009 2008 2009 2008

(Percentage) (Percentage) (Million Baht) (Million Baht)

Family Know How Company Production Thailand 50 - 25,000 - - - 25,000 - Limited of television programmes

25,000 - - - 25,000 -

a) In February 2009, Media Vision (1994) Company Limited, a subsidiary company which is held by Index Event Agency Public Company Limited, paid in share capital of Encore Company Limited amounting to Baht 1.85 million (an additional 5 percent was called up) and as a result its shareholding in that company remains unchanged at 37 percent. b) In September 2009, GMM Tai Hub Company Limited, a subsidiary company, invested in 5,998 ordinary shares of Nadown Bangkok Company Limited at a price of Baht 100 per share, for a total of Baht 0.6 million which registered its incorporation with the Ministry of Commerce on 9 September 2009. The Company’s investment represents 30 percent of the registered capital of such company. c) In September 2009, Index Event Agency Public Company Limited, a subsidiary company, invested in 19,999 ordinary shares of Blue Media Communications Company Limited at a price of Baht 100 per share, for a total of Baht 2 million which registered its incorporation with the Ministry of Commerce on 23 April 2009. The Company’s investment represents 40 percent of the registered capital of such company. d) In November 2009, the Company invested in 2,500,000 ordinary shares of Family Know How Company Limited at a price of Baht 10 per share, for a total of Baht 25 million. The Company’s investment represents 50 percent of the registered capital of such company. The other 50 percent of the registered capital is the preferred shares owned by the Stock Exchange of Thailand.

21

109

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

11.2 Share of income (loss) and dividend received During the year, the Company and its subsidiaries have recognised its share of net income (loss) from investments in associate companies in the consolidated financial statements and dividend income in the separate financial statements as follows: (Unit: Thousand Baht) Consolidated financial statements Share of income(loss) from investments in associates Dividend received Company’s name during the year during the year 2009 2008 2009 2008 Associates held by the subsidiaries Scenario Company Limited 34,746 23,976 5,250 5,250 Encore Company Limited 779 2,265 3,700 - Channel [V] Music (Thailand) Company (1,306) 2,609 3,000 - Limited Nadown Bangkok Company Limited 20 - - - Blue media Communications Company (382) - - - Limited Associates held by the Company Family Know How Company Limited 2,698 - - - Total 36,555 28,850 11,950 5,250

11.3 Summarised financial information of associates Financial information of the associated companies is summarised below. (Unit: Million Baht) Net Paid-up capital Total assets Total liabilities Total revenues for income(loss) for as at as at as at the year ended the year ended Company’s name 31 December 31 December 31 December 31 December 31 December 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 Scenario Company Limited 70 70 644 534 203 211 753 646 139 96 Encore Company Limited 42 37 44 48 2 2 16 18 2 6 Channel [V] Music (Thailand) 110 110 115 146 8 22 76 90 (2) 11 Company Limited Nadown Bangkok Company 2 - 5 - 3 - 4 - - - Limited Blue Media Communications 5 - 8 - 4 - - - (1) - Company Limited Family Know How Company 50 - 82 - 25 - 142 - (6) - Limited

110 22

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

12. Other long-term investments

(Unit: Thousand Baht) Consolidated financial statements 2009 2008 Cost Fair Value Cost Fair Value Securities available-for-sale Unit Trusts in Tisco Fixed - Income Fund 5,498 65 5,498 46 SE-Education Public Company Limited 233,236 341,499 233,236 248,170 Matichon Public Company Limited 455,499 278,800 455,499 291,100 The Post Publishing Public Company Limited 972,572 554,600 972,572 696,200

Total 1,666,805 1,174,964 1,666,805 1,235,516 Add: Unrealised gain on changes in value of investments 109,030 15,682 Less: Unrealised loss on changes in value of investments of subsidiary (594,671) (440,771) : Allowance for impairment of investment (6,200) (6,200) Securities available-for-sale - net 1,174,964 1,235,516 Other investments Siam Telemarketing Company Limited 3,000 3,000 Dyntec Disc Production Company Limited 14,200 14,200 Lighthouse Films Service Company Limited 2,500 2,500 Karaoke Center Company Limited 2,399 2,399 Lives and rich Company Limited 1,000 1,000 A-Time Traveller Company Limited 400 400 Total 23,499 23,499 Less: Allowance for impairment of investment (19,000) (13,000) Other investments - net 4,499 10,499 Others Government Savings Bank Bond 2,414 3,300 Total others 2,414 3,300 Total other long - term investments - net 1,181,877 1,249,315

In September 2005, GMM Media Public Company Limited, a subsidiary, acquired ordinary shares of the Post Publishing Public Company Limited and Matichon Public Company Limited, companies listed on the Stock Exchange of Thailand. These represents 23.6 percent and 20 percent respectively of the paid up share capital of such companies. Since GMM Media Public Company Limited does not have significant influence over the above two companies, these investments are presented as available-for-sale securities. GMM Media Public Company Limited has placed most of the shares of these two companies with a bank as security for loans.

23 111

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

During the year, Matichon Public Company Limited, The Post Publishing Public Company Limited and SE-Education Public Company Limited declared to pay dividend of Baht 16.4 million, Baht 7.1 million and Baht 25.0 million, respectively.

(Unit: Thousand Baht) Separate financial statements 2009 2008 Cost Fair Value Cost Fair Value Securities available-for-sale Unit Trusts in Tisco Fixed-Income fund 5,498 65 5,498 46 SE-Education Public Company Limited 233,236 341,499 233,236 248,170 Total 238,734 341,564 238,734 248,216 Add: Unrealised gain on changes in value of investments 109,030 15,682 Less: Allowance for impairment of investment (6,200) (6,200) Securities available-for-sale - net 341,564 248,216 Other investments Siam Telemarketing Company Limited 3,000 3,000 Karaoke Center Company Limited 2,399 2,399 Total 5,399 5,399 Less: Allowance for impairment of investment (3,000) (3,000) Other investments - net 2,399 2,399 Others Government Savings Bank Bond 1,014 1,000 Total others 1,014 1,000 Total other long-term investments - net 344,977 251,615

112 24

NOTES TO FINANCIAL STATEMENTS 25

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 - (7,895) 961,368 263,167 288,017 2,789,977 1,787,239 1,002,738 Total

- - - - - (55,796) - 350,298 - 288,017 - (42,780) (Unit: Thousand Baht) 645 645 645 1,542,002 645 2,503,370 Others

------69,826 91,991 69,826 91,991 (168,315) under equipment installation progress and Construction in

- - 75,841 79,715 32,631 146,150 26,994 213,731 134,016 Motor vehicles

61 621 23,788 72,026 64,028 29,730 (6,743) (20,128) (4,127) (18,365) 295,090 231,062 fixturesand Furniture andFurniture Consolidated financial statementsConsolidated financial office equipment

9 60,769 333,240 360,952 1,377,432 1,016,480 Operating equipment

(70) 18,227 129,502 99,030 70,958 160,335 (8,499) (11,789) 762,924 405,036 317,941 357,888 building improvement Buildings andBuildings

- - 342,647 867,925 205,398 125,387 - - - - - (14,921) (14,004) - 70,329 660,588 1,201,165 277,424 201,228 70,329 70,329 70,329 Land Additions Cost: Cost: As at31 December2008 As at31 December2009 depreciation: Accumulated As at31 December2009 Net book value: As at31 December2008 As at31 December2009 Depreciation year for the millionproductions,balance in sellingandofsales and (Baht costand2009administrative expenses)139.8 the in included As at31 December2008 Disposals / Transfersin (out) on disposals depreciation Accumulated Transfers in / (out) / Transfersin (out) millionproductions,balance in sellingandofsales and costand (Baht administrative expenses)2008 the 67.7 in included Depreciation for the Depreciation year for the 13. plant equipment and Property, FOR THE YEARS ENDED 31 DESEMBER 2009 AND 2008 FOR FINANCIAL STATEMENTS TO NOTE

113 NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

(Unit: Thousand Baht) Separate financial statements Furniture Construction Building and and fixtures in progress building Operating and office Motor and equipment improvement equipment equipment vehicles under installation Total Cost: As at 31 December 2008 204,549 55,176 244,981 106,454 2,536 613,696 Additions 8,079 3,139 35,152 15,788 7,913 70,071 Disposals (1,195) (1,128) (3,929) (12,063) - (18,315) Transfers in / (out) - 540 633 - (8,702) (7,529) As at 31 December 2009 211,433 57,727 276,837 110,179 1,747 657,923 Accumulated depreciation: As at 31 December 2008 159,793 34,421 169,966 75,136 - 439,316 Depreciation for the year 16,073 6,879 40,994 11,857 - 75,803 Accumulated depreciation on disposals (271) (1,007) (3,726) (11,651) - (16,655) As at 31 December 2009 175,595 40,293 207,234 75,342 - 498,464 Net book value: As at 31 December 2008 44,756 20,755 75,015 31,318 2,536 174,380

As at 31 December 2009 35,838 17,434 69,603 34,837 1,747 159,459

Depreciation for the year 2008 (Baht 1.3 million included in cost of sales and productions, and the balance in selling and administrative expenses) 65,596

2009 (Baht 1.5 million included in cost of sales and productions, and the balance in selling and administrative expenses) 75,803

As at 31 December 2009, the Company, its subsidiaries and its jointly controlled entities had vehicles and equipment under finance lease agreements with net book values amounting to Baht 81 million. As at 31 December 2009, the Company, its subsidiaries and its jointly controlled entities had certain building and equipment items have been fully depreciated but are still in use. The original cost, of those assets amounted to approximately Baht 1,046 million (2008: Baht 837 million) (Separate financial statements: Baht 346 million and, 2008: Baht 274 million). Three subsidiaries have mortgaged land with structures thereon with a total net book value as at 31 December 2009 of Baht 312 million as collateral for long-term credit facilities granted by commercial banks.

114 26

NOTES TO FINANCIAL STATEMENTS 27 NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

-

431 7,622 20,563 20,132 301,755 280,365 Total 1,706,172 1,405,244

- - -

(Unit: Thousand Baht) 9,591 8,390 8,507 3,694 4,224 5,085 1,247,335 8,779 1,569,222 12,731 10,407 155,357 11,078 183,866 Others

- - - - - (16,046) (26,029) - - (16,046) (25,957)

665 167 8,210 7,712 28,226 27,561 19,849 28,059 Deferred expenses

------

9,501 9,501 30,392 20,891 20,891 30,392 Games licenses

- - - -

(468) (396) Consolidated financial statements 7,622 95,525 84,631 91,164 77,574 18,347 17,330 186,689 software Computer

- - -

10,631 30,811 12,652 10,631 991,914 968,631 copyrights Motion picture

-

431 431 (515) (9,000) (515) (9,000) (9,591) (8,390) 15,817 130,912 14,700 112,753 174,409 456,220 284,129 171,660 277,217 846,719 451,626 888,161 162,205 musical compositions Copyrights to Written off Transfer in/(out) Amortisation for the year Accumulated amortisation on off written Transfer in/(out) As at 31 December 2008 As at 31 December 2008 As at 31 December 2008 As at 31 December 2008 Additions Cost: As at 31 December 2009 Accumulated amortisation: As at 31 December 2009 impairmentProvision for assets: of As at 31 December 2009 book Net value: As at 31 December 2009 Increase during the year 14. assets Intangible FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 FOR FINANCIAL STATEMENTS TO NOTES

115 NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

(Unit: Thousand Baht) Separate financial statements Copyrights to musical Motion picture Computer Deferred compositions copyrights software expenses Total Cost: As at 31 December 2008 299,927 297,364 101,356 14,909 713,556 Additions 10,934 6,825 7,112 167 25,038 Written off - (46,000) (415) - (46,415) Transfers in - - 7,529 - 7,529 As at 31 December 2009 310,861 258,189 115,582 15,076 699,708 Accumulated amortisation: As at 31 December 2008 130,516 267,718 36,566 11,358 446,158 Amortisation for the year - 19,980 10,732 3,695 34,407 Accumulated amortisation on written off - (46,000) (396) - (46,396) As at 31 December 2009 130,516 241,698 46,902 15,053 434,169 Provision for impairment of assets: As at 31 December 2008 - 4,264 - - 4,264 As at 31 December 2009 - 4,264 - - 4,264 Net book value: As at 31 December 2008 169,411 25,382 64,790 3,551 263,134

As at 31 December 2009 180,345 12,227 68,680 23 261,275

Baht 158 million of the current year’s amortisation has been charged to cost of sales and productions, with the remaining Baht 26 million charged to selling and administrative expenses. As at 31 December 2009, this represents the Company’s, its subsidiaries’ and its jointly controlled entities’ deferred copyrights to musical compositions, with net carrying values amounting to Baht 138 million (2008: Baht 141 million) and Baht 122 million for the Company only (2008: Baht 150 million) for the copyrights to compositions which have already been recorded and released on albums. The value of the copyrights in such musical compositions depends on the popularity of the artist and possibility of further distribution or re-release of such compositions. However, the management of the Company, its subsidiaries and its jointly controlled entities believe that the compositions will generate future benefits in excess of their net book values through their re-release in various forms, and therefore no allowance for loss on impairment of deferred copyrights is required.

15. Bank overdraft and short-term loans from banks (Unit: Thousand Baht) Consolidated Separate Interest rate financial statements financial statements (percent per annum) 2009 2008 2009 2008 Bank overdrafts 6.15, MOR, MOR+2 22,010 13,313 - - Short-term loans from banks 2.0-5.0 872,000 271,000 150,000 - Total 894,010 284,313 150,000 -

Bank overdrafts are guaranteed by subsidiary’s director and secured by the mortgage of the company’s land with structures thereon and unrelated party. Short-term loans from Commercial Bank of a subsidiary company are secured by two listed equity securities held by a subsidiary.

116 28

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

16. Long - term loans The outstanding balances as of 31 December 2009 and 2008 consisted of: (Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2009 2008 2009 2008 16.1 A Baht loan amounting to Baht 1,000 million, for which principal is to be paid in five annual installments. The first to third installments are Baht 250 million each, while the fourth and fifth installments are of Baht 125 million. The loan is to be repaid within 5 years commencing July 2004. For the first 3 years, interest is charged at a fixed rate of 3.68 percent per annum, payable semi- annually, and for the last 2 years it is charged at the minimum loan rate (MLR) minus 1.75 percent per annum, and payable monthly. - 125,000 - 125,000 16.2 A Baht loan amounting to Baht 25 million. Principal and interest are to be paid in 84 monthly installments commencing March 2004, with interest charged at the minimum loan rate (MLR) minus interest rate 1.00 percentage per annum for the first 24 installments and the minimum loan rate (MLR) after the 24th installment. 1,882 6,009 - - 16.3 A Baht loan amounting of Baht 150 million. Principal and interest are to be paid in 72 monthly installments commencing October 2006, with interest charged at the rate of minimum loan rate (MLR) minus interest rate 1.25 percentage per annum for the first 24 installments and the minimum loan rate (MLR) minus interest rate 1.00 percentage per annum after the 24th installment. 66,000 91,200 - - 16.4 A Baht loan amounting to Baht 878 million. Principal is to be paid in 16 quarterly installments but interest is to be paid monthly commencing July 2006, with interest charged at the minimum loan rate (MLR) minus interest rate 1.50 percentage per annum for the first 24 installments and the minimum loan rate (MLR) minus interest rate 1.00 percentage per annum after the 24th installment. - 263,220 - - 16.5 A Baht loan amounting to Baht 467 million. Principal is to be paid in 20 quarterly installments but interest is to be paid monthly commencing May 2008, with interest charged at the minimum loan rate (MLR) minus interest rate 1.75 percentage per annum for the first 24 installments and the minimum loan rate (MLR) minus interest rate 1.00 percentage per annum after the 24th installment. 325,000 391,500 - -

117 29

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

(Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2009 2008 2009 2008 16.6 A Baht loan amounting to Baht 11 million. Principal and interest are to be paid in 120 monthly installments commencing July 2002, with interest charged at the minimum loan rate (MLR). 92 2,342 - - 16.7 A Baht loan amounting to Baht 35 million. Principal and interest are to be paid in 120 monthly installments commencing February 2008, with interest charged at the minimum loan rate (MLR) minus interest rate 1.50 percentage per annum for the first 24 installments and the minimum loan rate (MLR) minus interest rate 0.50 percentage after the 24th installment. 28,549 32,117 - - Total 421,523 911,388 - 125,000 Less: Current portion due within one year (132,603) (519,679) - (125,000) Long-term loans - net of current portion 288,920 391,709 - -

The long-term loan in Note 16.5 is secured by two listed equity securities held by a subsidiary. This loan agreement contains certain covenants and restrictions. These relate to, among other things, the maintenance of their financial ratios. In addition, the long-term loans of two subsidiaries amounting to approximately Baht 96.5 million are guaranteed by directors of subsidiaries and secured by the mortgage of land with structures thereon of the two subsidiaries. These guarantees are effective so long as the underlying obligations have not been discharged by the subsidiaries. No guarantee fee is charged by the directors.

17. Liabilities under finance lease agreements (Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2009 2008 2009 2008 Liabilities under finance lease agreements 71,438 59,458 35,048 26,023 Less: Deferred interest expenses (3,587) (3,330) (478) (930) Total 67,851 56,128 34,570 25,093 Less: Current portion due within one year (19,044) (16,479) (7,569) (5,430) Liabilities finance lease agreements - net of current portion 48,807 39,649 27,001 19,663

The Company, its subsidiaries and its jointly controlled entities have entered into the finance lease agreements with leasing companies for rental of motor vehicles and equipment for use in its operation, whereby it is committed to pay rental on a monthly basis. The terms of the agreements are generally between 3 and 5 years. Finance lease agreements are non- cancelable. As at 31 December 2009, Future minimum lease payments required under the finance lease agreements are as follows:

30 118

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

(Unit: Million Baht) Consolidated financial statements Less than Over 5 1 year 1-5 years years Total Future minimum lease payments 23.10 54.21 - 77.31 Deferred interest expenses (4.06) (5.40) - (9.46) Present value of future minimum lease payments 19.04 48.81 - 67.85

(Unit: Million Baht) Separate financial statements Less than Over 5 1 year 1-5 years years Total Future minimum lease payments 9.80 30.29 - 40.09 Deferred interest expenses (2.23) (3.29) - (5.52) Present value of future minimum lease payments 7.57 27.00 - 34.57

18. Share capital On 25 September 2008, the Extraordinary General Meeting of the Company’s shareholders No.1/2008 passed resolutions to increase of the Company’s registered share capital for Baht 40,556,100 from the registered share capital of Baht 490,000,000 (490,000,000 ordinary shares of Baht 1 each) to Baht 530,556,100 (530,556,100 ordinary shares of Baht 1 each), through the issuance of 40,556,100 additional ordinary shares with a par value of Baht 1 each. The Company registered the increase of its share capital with the Ministry of Commerce on 10 October 2008 The Company registered the change in the paid-up share capital from Baht 490,000,000 (490,000,000 ordinary shares of Baht 1 each) to Baht 530,264,947 (530,264,947 ordinary shares of Baht 1 each) with the Ministry of Commerce on 12 February 2009 19. Statutory reserve Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside to a statutory reserve at least 5 percent of its net income after deducting accumulated deficit brought forward (if any), until the reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividend distribution. 20. Expenses by nature Significant expenses by nature are as follow: (Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2009 2008 2009 2008 Salary and wages and other employee benefits 1,776,419 1,637,603 843,388 780,281 Depreciation expenses 288,017 263,167 75,803 65,596 Amortisation expenses 193,666 216,461 44,214 95,337 Raw materials and consumables used 114,754 121,734 114,855 121,734 Changes in inventories of finished goods and work in progress (104,698) (35,178) (114,018) (72,687) 21. Earnings per share Basic earnings per share is calculated by dividing the net income for the year by the weighted average number of ordinary shares in issue during the year. 31 119

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 32 - 828 (246) 7,461 5,852 6,813 Total 2008 - 541 (139) 7,821 5,923 6,926 (Unit: Million Baht) (Unit: 2009 - (24) (784) (784) (988) (990) mation mation for the year ended 31 2008 - financial statements to set the sic, media (radio, television and revenues revenues 47 (814) (814) (858) (858) Elimination Elimination of inter-segment 2009 73 56 (16) 398 565 623 2008 Others 18 50 (12) 492 593 627 2009 (51) 036 036 474 325 - - 7,821 7,461 175 112 542 1,211 1,036 2008 (9) (9) (11) (8) (10) 26 33 (55) (72) 28 (14) (14) (14) (13) (4) 42 7 (367) (394) (15) 203 561 Consolidated financial statements 1,351 1,063 Marketing events events Marketing 2009 (88) 341 237 628) 628) (181) (189) (171) ( 146) 6 118 (2,262) (2,061) 2,802 2,716 2,799 2008 Media Media (80) 432 244 rried rried on in Thailand. Below is the consolidated financial infor 3,162 2,674 2,867 2009 (91) 195 649 1,125 1,100 236 360 121 447 32 100 86 3,024 3,227 3,639 3,639 2,730 2,461 1,148 1, 3,834 3,017 3,345 ries and its jointly controlled entities by segment: segment: by entities controlled jointly its and ries 2008 - - - (141) - - - - - 141 - - - Music 3 3 - 34 27 - 2 - - - - 37 29 17 17 24 19 31 - - 9 13 (26) (34) 19 34 (87) (87) (110) (295) (273) (11) (11) (16) (53) (68) (32) 161 172 274 274 328 193 83 502 494 34 58 - (2) 1,003 961 213 213 207 178 136 11 15 124 187 (242) (234) 284 311 3,469 3,469 3,630 2,953 3,227 1,442 1,442 1, (1,373) (1,373) (1,216) (543) ( 2009 publishing) publishing) and marketing events. These operations are mainly ca The Company, its subsidiaries and its jointly controlled entities’ business operations involve three principal segments i.e. mu December 2009 and 2008 of the Company, its subsidia its Company, the of 2008 and 2009 December The Company, its subsidiaries and its jointly controlled entities have applied the pricing policies as set out in Note 6 to the transfer prices. transfer Revenue from Revenue from external customers Inter-segment revenues Administrative Administrative expenses on sale Loss of in subsidiaries investment of incomeShare of associated companies income tax Corporate Finance cost Other income income Other expensesSelling Other assets Total revenues Total revenues income operating Segment the for income Net year equipment and plant Property Total assets Interest income income Interest 22. information Segment

FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 FOR FINANCIAL STATEMENTS TO NOTES

120 NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

23. Provident fund The Company, its subsidiaries and their employees have jointly established a provident fund in accordance with the Provident Fund Act B.E. 2530. Both employees and the Company and its subsidiaries contributed to the fund monthly at the rate of 3 and 5 percent of basic salary. The fund, which is managed by BT Asset Management Company Limited and Finansa Asset Management Limited, will be paid to employees upon termination in accordance with the fund rules. During the year 2009, the Company and its subsidiaries contributed Baht 31 million (2008: Baht 27 million) to the fund and Baht 16 million for the Company only (2008: Baht 14 million).

24. Dividend paid Dividends Approved by Total dividends Dividends per share (Million Baht) (Baht) Final dividends on 2007 income Annual General Meeting of the 254.8 0.52 shareholders on 28 April 2008 Interim dividends on 2008 income Board of Directors’ meeting on 294.0 0.60 (1 January 2008 - 30 June 2008) 13 August 2008 Total dividend paid for 2008 548.8 1.12

Final dividends on 2008 earnings Annual General Meeting of the 344.7 0.65 shareholders on 27 April 2009 Interim dividends on 2009 earnings Board of Directors’ Meeting on 291.6 0.55 (1 January 2009 - 30 June 2009) 13 August 2009 Total dividend paid for 2009 636.3 1.20

25. Commitments and contingent liabilities 25.1 Investing commitments The Company and its subsidiaries have uncalled portions of investments in two associated companies registered in Thailand, totaling Baht 39.0 million (31 December 2008: Baht 40.8 million in two associated companies) of which Baht 253.8 million are from investments of the Company only in six subsidiaries registered in Thailand (31 December 2008: Baht 252.0 million in five subsidiaries). 25.2 Operating lease commitments a) The Company, its subsidiaries and its associated companies have entered into several lease agreements with third parties and three related parties in respect of the lease of air time for programme broadcasting and advertising placement at certain radio and television stations, the lease of office building and shop space, and space in which to install coin-operated karaoke booths, theatre lease, equipment leases and the provision of related services and market research and survey services. Under certain agreements, payments are to be made based on a percentage of sales, before deducting expenses, as stipulated in the individual agreement, and the Company, its subsidiaries and its associated companies have to comply with various conditions laid out in the agreements. Future minimum rentals payable under these leases as at 31 December 2009 are as follow: Consolidated Separate financial statements financial statements (Million Baht) (Million Baht) Payable within: 1 year 508 49 2 to 5 years 59 12 Thereafter 128 - 33 121 NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

b) The Company has entered into an agreement with a company to lease space to operate an entertainment business. Under this agreement, the Company has to pay a fee to that company at a minimum rate of 16.2 percent of its gross margin on sales of its products and to comply with various conditions stipulated in the agreement. 25.3 Long-term service commitments a) The Company and its subsidiaries have entered into agreements with producers and singers to provide certain services to the Company and its subsidiaries under which the Company and its subsidiaries are to pay compensation at fixed rates based on the volume of sales generated as a result of the provision of these services, once sales exceed minimum quantity guarantees set out in the agreements. b) A subsidiary has entered into an agreement with a company granting it the right to use a karaoke computer program for a period of 50 years. The subsidiary has to pay a fee to that company at a rate of three percent of the wholesale price, after deducting discounts, whenever the subsidiary is able to sell such program. The subsidiary and that company have to comply with various conditions stipulated in the agreement. c) Under the agreement with a foreign company in relation to the use its trademark and copyright in the production and distribution of a magazine for a period of 4 years, which the expiry date is in 2010, a subsidiary is obliged to pay royalty fee calculated at a certain percentage of its net turnover but not less than the minimum amount stipulated in the agreements and to pay the copyright fee on an annual basis at the amount as stipulated in the agreements. The subsidiary company is thereby required to comply with conditions stipulated in the contract. d) Under the agreement with a foreign company in relation to use its trademark and license in the production and distribution of a magazine for a period of 10 years, which the expiry date is in 2014, a subsidiary is obliged to pay royalty fee calculated at a certain percentage of its gross advertising revenue and gross circulation revenue on an annual basis as stipulated in the agreements. The subsidiary is thereby required to comply with conditions stipulated in the contract. e) Under the agreements with a company licensing to broadcast to the public, the subsidiary is committed to pay a royalty fee at a percentage of its revenues from sales of advertising, before deducting expenses for a period of 1 year, ending in the year 2010, as specified in the agreements. f) The Company has obligations under agreement with a company in respect of advertising and promotion of song on the radio. Under this agreement, the Company is obliged to pay advertising fee in 2010 totaling Baht 1.1 million. g) The Company and its subsidiaries have entered into agreements with a company and two foreign companies, who are to provide satellite transmission services for periods of 2 years to 5 years, ending in 2010 to 2014. The Company and its subsidiaries are obliged to pay transmission service fees and other expenses incurred in relation to such services, as stipulated in the agreements, and are thereby required to comply with conditions stipulated in the agreements. Under the agreements, the Company and its subsidiaries are obliged to pay transmission service fees totaling Baht 22 million and US dollar 6 million from 2010 to 2014. 25.4 Other service commitments a) A subsidiary entered into agreements hiring two companies to provide marketing and legal consultancy services in 2010, totaling Baht 18 million and Baht 1.5 million, respectively. b) A subsidiary entered into an agreement hiring a company to provide public relations management services in 2010, totaling Baht 7.5 million. 34

122 NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

25.5 Guarantees a) As at 31 December 2009, the Company and its subsidiaries have provided guarantees to banks for credit facilities granted to other company amounting to Baht 1.4 million (Separate financial statements: Baht 1.4 million). Generally, the Company’s guarantee is binding for as long as the underlying obligations have not yet been discharged by that other company. No fees are charged for the provision of this guarantee. b) As at 31 December 2009, there were outstanding bank guarantees of approximately Baht 123 million and Baht 6.7 million of the Company only issued by banks on behalf of the Company, its subsidiaries and its jointly controlled entities in respect of certain performance bonds as required in the normal course of business. These included letters of guarantee amounting to Baht 0.8 million to guarantee payments due to creditors, Baht 120 million to guarantee contractual performance and Baht 2.2 million to guarantee electricity use, among others.

26. Financial instruments 26.1 Financial risk management The Company, its subsidiaries and its jointly controlled entities’ financial instruments, as defined under Thai Accounting Standard No. 32 “Financial Instruments: Disclosure and Presentations”, principally comprise cash and cash equivalents, trade accounts receivable and notes receivable, loans, investments, short-term loans, long-term loans and liabilities under hire purchase and finance lease agreements. The financial risks associated with these financial instruments and how they are managed in described below. Credit risk The Company, its subsidiaries and its jointly controlled entities are exposed to credit risk primarily with respect to trade accounts receivable. The Company, its subsidiaries and its jointly controlled entities’ management manages the risk by adopting appropriate credit control policies and procedures and therefore does not expect to incur material financial losses. In addition, the Company, its subsidiaries and its jointly controlled entities do not have high concentration of credit risk since they have a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of receivables as stated in the balance sheet. Interest rate risk The Company’s, its subsidiaries’ and its jointly controlled entities’ exposure to interest rate risk relates primarily to its cash at banks, bank overdrafts, short-term and long-term borrowing. However, since most of the Company, its subsidiaries and its jointly controlled entities’ 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. Significant financial assets and liabilities as at 31 December 2009 classified by type of interest rates are summarized in the table below, with those financial assets and liabilities that carry fixed interest rates further classified based on the maturity date or the repricing date if this occurs before the maturity date. Consolidated financial statements Fixed interest rates Within 1-5 Over Floating Non- interest 1 year years 5 years interest rate bearing Total Interest rate (Million Baht) (% p.a.) Financial assets Cash and cash equivalent 400 - - 508 - 908 0.25-1.25 Current investment 79 - - - - 79 0.75-1.25 Trade accounts receivable - - - - 1,931 1,931 -

35

123 NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

479 - - 508 1,931 2,918 Financial liabilities Bank overdraft and short-term loans - - - 894 - 894 Note 15 Trade accounts payable and accrued cost - - - - 1,071 1,071 - Long-term loans - - - 422 - 422 Note 16 Liabilities under finance lease agreements 19 49 - - - 68 7.0-8.5 19 49 - 1,316 1,071 2,455

Separate financial statements Fixed interest rates Within 1-5 Over Floating Non- interest 1 year years 5 years interest rate bearing Total Interest rate (Million Baht) (% p.a.) Financial assets Cash and cash equivalent 60 - - 157 - 217 0.25-1.08 Trade accounts receivable - - - - 758 758 - Loans to related parties 47 - - - - 47 Note 6 107 - - 157 758 1,022 Financial liabilities Bank overdraft and short-term loans - - - 150 - 150 Note 15 Trade accounts payable and accrued cost - - - - 662 662 - Liabilities under finance lease agreements 8 27 - - - 35 7.0-8.5 8 27 - 150 662 847 Foreign currency risk The exposure of the Company and its subsidiaries to foreign currency risk relates primarily to its investments in foreign subsidiaries, which currently are not hedged by any derivative financial instrument. However, the Company and its subsidiaries believe that there will be no material impact on the Company, its subsidiaries and its jointly controlled entities’ financial statements because the amount of its investments in foreign subsidiaries are immateriality. 26.2 Fair values of financial instruments Since the majority of the Company’s, its subsidiaries’ and its jointly controlled entities’ financial instruments are short-term in nature or bear floating interest rates, their fair value is not expected to be materially different from the amounts presented in the balance sheets. A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, 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. 27. Capital management The primary objective of the Company’s capital management is to ensure that it has an appropriate financial structure and preserves the ability to continue its business as a going concern. According to the balance sheet as at 31 December 2009, the Group's debt-to-equity ratio was 0.99:1 (2008: 0.85:1) and the Company's was 0.44.:1 (2008: 0.49:1). 28. Approval of financial statements These financial statements were authorised for issue by the authorised director on 24 February 2010.

124 36

COMPAINIES IN WHICH GMM GRAMMY HOLDS MORE THAN 10% OF THEIR SHARES

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 800 530,264,947

Issued Shares pe Number y T 3473331 Common Shares Fax ) 4 ( 02 669 9009 Common Shares 530264947 02 669 900902 662 340502 662 3405 Common Shares Common Shares Common Shares 30,000,000 100,000 10,000 02 713 0913 Common Shares 330,000 02 665 8966 Common Shares 425,000 02 713 1669 Common Shares 50,000 02 669 9009 Common Shares 7,000,000 02 669 9009 Common Shares 1,000,000 02 669 9009 Common Shares 500,000 02 665 8242 Common Shares 200,255,500 02 731 1377 Common Shares 30,000 02 669 900902 530 7460 Common Shares Common Shares 200,000 200,000 02 669 900902 261 448802 669 9398 Common Shares Common Shares Common Shares 500,000 450,000 4,000,000 02 669 847902 669 8479 Common Shares Common Shares 100,000 3,100,000 02 619 9367 Common Shares 10,000 02 713 0066 Common Shares 60,000 02 713 0913 Common Shares 172,000,000 02 669 900902 669 900902 669 9009 Common Shares02 665 8181 Common Shares Common Shares02 669 900902 690 4567 Common Shares 500,000 02 665 8326 Common Shares 1,507,500 20,000 02 669 9009 Common Shares02 669 9009 Common Shares 10,000 02 665 8242 Common Shares 200,000 02 665 8242 Common Shares 200,000 02 669 8242 Common Shares 200,000 1,650,000 Common Shares Common Shares 22,000 200,000 1,000,000 500,000 02 669 9228 Common Shares 2,000,000 02 669 9009 Common Shares 500,000 02 669 9211 Common Shares02 669 9009 Common Shares 50,000 500,000 02 665 827202 665 833502 669 8699 Common Shares Common Shares Common Shares 600,000 200,000 200,000 02 665 8242 Common Shares 10,000 02 713 0913 Common Shares 50,000 02 669 9009 Common Shares 2,500,000 02 665 9940 Common Shares 500,000 02 381 4963 Common Shares 290,000 02 353-6500 Common Shares 180,000 3473330 971 Tel ) 4 ( 2 669 9000 02 669 9000 02 662 3404 02 662 3404 02 725 9333 02 669 9964 02 713 1667 02 669 9666 02 669 9000 02 669 9000 02 669 9333 02 731 2345 02 669 9000 02 530 7461 02 669 9000 02 259 4545 02 669 9399 02 669 8484 02 669 8484 02 669 9379 02 713 0900 02 725 9333 02 669 9000 02 669 9000 02 669 9000 02 669 9191 02 669 9000 02 690 4555 02 669 9321 02 669 9000 02 669 9000 02 669 9333 02 669 9333 02 669 9000 02 669 9000 02 669 9666 02 669 9000 02 669 9000 02 669 9260 02 669 9050 02 669 9000 02 669 9333 02 669 9000 02 669 8940 02 381 4949 02 951 0101 02 965-9679-80 Common Shares 408,910 0 02-353 6500 02 381 2501-6 02 669 9009 Common Shares 1,000,000 02 669 8186-7 02 669 8139-41 Common Shares 1,200,000 971 02 667 0174-6 Ext.101 02 667 0174-6 Ext.113 Common Shares 50,000 istration 02 725 9333 g azine rammes rammes rammes g g g g ro ro ro rammes p p p g ro p h the internet g roduction of radio roduction of television roduction of television roduction of television p p p p roduction website, domain name re p t roduction and distriution of ma romotion g p p pe g y rams n and g g hone uses and throu ement and ement and ement and ement and ement roducts ro p g g g g g p p azines azines ublic relations releases g g Business T p of music g ublic relations consultin p /billboard and marketin roduce television roduce ma roduce ma g p p p ment s and theatres p p ramme and internet, desi g ui ment for conferences and ceremonial events rintin anizer q hics, sound to mobile tele p p hts ro azine g p g ui p g n ri q ra g ocketbooks g anization of activities in the Middle Eas anization of activities p creation and py g g and distribution channel mana and distribution channel mana and distribution channel mana and distribution channel mana and distribution channel mana and create interactive uter g roduce movies e backdro g g g g g p p g gy hts ans karaoke business y hts hts g g g roductione sta ri ri ri p com p p ointl ment for entertainment events j py py py strate rovision of e p g p ram ui g q roduce music roduce music ement orted music co p p g ital content p g stem installation services for entertainment events inactive inactive inactive inactive inactive inactive inactive inactive inactive inactive inactive y y y y y y y y y y y y e im e music co e music co n marketin ns and sets u n and develo g g g onsible for marketin onsible for marketin onsible for marketin onsible for marketin onsible for marketin onsible for creative desi onsible for advertisin g g g p p p p p p p rtist mana Prodution and distriution of Produtionand distriution Res Market, find distribution channels and Currentl Prodution and distriution of ma Res Rent assets and machineries for manufacturin Mana Res Res business, show business and artist management Fully-integrate entertainment businesses, including production and copyright of music business, digital content Produce and distribute movies Currentl Invest in other businesses Market, find distribution channels and Desi A Rental TV Pro TV Rental Sound s Business events advisor and or Seek investors to Provide di Currentl Desi Res Create and Currentl Musical school Fitness Center Currentl Currentl Create and Provides download of data, Provision of service and or Provision of service and or Provision of e Currentl Market, find distribution channels and Res Sublease of radio stations Currentl Produce and distribute movies Currentl Res Desi Currently inactive Decoration and Handles music co ) Co., Ltd. Mana ) holds more than 10% of their shares Limited Currentl y ) y Thailand China ( ( International Co., Ltd. Mana g Co., Ltd. g Plc. Co., Ltd. House Co., Ltd. ) y Compan g Co., Ltd. g Co., Ltd.Co., enc g t Co., Ltd. 1994 ht Collection Co., Ltd. g ement Co., Ltd. Co., Ltd. ( p g Co.,Ltd. Garndontree Co., Ltd. g g e Co.,Ltd. ri g y g ement Co., Ltd. g g known as "Two To Film Co., Ltd" ital Domain Co., Ltd. py Publishin y g y e Publishin ic Film Co.,Ltd. ire Ima er Cut Co., Ltd. en Index Event Co., Ltd. g ital Arms Co., Ltd. g p en Radio Co., Ltd. p g p pp -Time Media Co., Ltd. s ratist Mana Formerl GMM Grammy Plc. ( A A A 2 Di 1 GMM Di 3 Global Music and Media 4 GMM Music Publishin 6 Luck Music 999 Co., Ltd. 7 GIP Mana 9 MGA Co., Ltd. 5 Sanamluan 8 Clean Karaoke Co., Ltd. 18 GMM Holdin 39 Index Creative Online Co.,Ltd. 27 GMM Times Co., Ltd. 28Publishin Bliss 25 Ima 37 I Think Ad Co.,Ltd. 26 GMM Inter Publishin 44 35 G Communications Co., Ltd. 32 Event Solutions Co., Ltd. 36 Ins 22 GMM TV Co.,Ltd. 23 Teen Talk Co., Ltd. 24 Deetalk Co., Ltd. 11 GMM Tai Hub Co., Ltd. 12 Sawasdee Thaweesuk Co.,Ltd. 40 More Music Co., Ltd. 33 29 In Publishin 10 G-Gram Co.,Ltd. 38 D 63 Co.,Ltd. 30 Index Event A 14 GMM Studio Co., Ltd. 13 Tifa Co., Ltd. 20 15 Mifah Co., Ltd. 16 GMM Fitness Club Co., Ltd. 17 3-RD Co.,Ltd. 31 Media Vision 41 Music Co 42 Global Music and Media 43 Extraorganizer Co., Ltd. 45 Phenomena Motion Pictures Co., Ltd.46 U 47 Gramm 48 Ma 49 Currentl Radio Conce 50 O 51 Mass Monitor Co., Ltd. 34 Tresbien Co., Ltd. 21 Exact Co., Ltd. 19 GMM Media Plc. Subsidiaries Parent compan GMM GRAMMY PUBLIC COMPANY LIMITED, AND ITS SUBSIDIARIES Companies in which GMM Gramm COMPAINIES IN WHICH GMM GRAMMY HOLDS MORE THAN 10% OF THEIR SHARES COMPAINIES LIMITED AND ITS SUBSIDIARIES GMM GRAMMY PUBLIC COMPANY

125 COMPAINIES IN WHICH GMM GRAMMY HOLDS MORE THAN 10% OF THEIR SHARES

Issued Shares pe Number y T Fax 02 662 3405 Common Shares 20,000 02 591 3396 Common Shares 1,000,000 02 325 3333 Common Shares 323,921,130 02 669 9857 Common Shares 14,000,000 02 589 704902 240 3790 Common Shares Common Shares 185,349,200 500,000,000 02 940 8008 Common Shares 120,000 02 713 0913 Common Shares 50,000 02 654 5178 Common Shares 2,500,000 Tel 02 662 3404 02 739 8000 02 669 8500 02 589 0020 02 240 3700 02 940 8761 02 664 2275 02 229 2614 06 665 9922 02 669 9550 Common Shares 20,000 02 435 4717-20 02 435 4284 Common Shares 10,000,000 02 712 5459 ext. 200 02 712 8217 Common Shares 1,100,000 icture 02 951 0101 p kok kok kok kok kok kok kok kok kok ht, sound and g kok kok y g g g g g g g g g g g kok g kok , , Ban ) g kok y kok g rak, Ban g g kok g g Toe kok Asoke g ( g , Ban , Wattana, Ban , Wattana, Ban , Wattana, Ban , Wattana, Ban , Wattana, Ban , Wattana, Ban g Kon g g g g g g g lan g kok kok Na, Ban g , Hon g g tonnua, Wattana, Ban tonnua, Wattana, Ban kok ocket books y , Khet Klon toeinuea, Wattana, Ban thon g g g p kok y g g tonnua, Wattana, Ban g ton, Wattana, Ban g Ba pe g and accessories used for li kok y i, Ban y kok roducts rams y g Toe p g p g g ao, Chatuchuk, Ban ocket books ocket books ka rak, Ban y ement for music ro kok , Khlon p p g g g p ) g , Ban Klon g g Place, Sukumvit 21 Rd. lat, Ban y rovide advisories for the movie industr lao Rd., Wan eriodicals and p p Asoke gp a, Ban na-Trad Rd., Ban p ( Business T kok an, Ban y g g Kwan gj y arts, machiner ra service ton, Wattana, Ban azines and azines and p p p g g g nonthaburi, Nonthaburi nonthaburi, Nonthaburi , Sukhumvit Rd., Klon , Sukhumvit Rd., Klon ) ) g g tonnuea, Wattana, Ban , Sukhumvit Rd, Klon , Si are ) g , Sukhumvit Rd., Klon g related media and p ) g san Avenue, Causewa lao 94, Lad toei, Ban ement and roduce television bumru, Ban y p g g p ublications, ers ma ers ma g p p p a a row Rd. Klon ,Unit No. 608-609 Rama 1 Rd., Pathumwan, Ban p p y p Akamai Sawasdee Sawasdee ( ( ( ublishin avadee 60, Luk Si, Ban khen, Muen khen, Muen Sawasdee p ments p 42, Sukhumvit Soi 71 Rd., North Prakanon 42, Sukhumvit Soi 71 Rd., North Prakanon 42, Sukhumvit Soi 71 Rd., North Prakanon 42, Sukhumvit Soi 71 Rd., North Prakanon 42, Sukhumvit Soi 71 Rd., North Prakanon 42, Sukhumvit Soi 71 Rd., North Prakanon ( g g p ment and s g g g g g g in economic, financial and stock market investment information p Rd., Ban ui g on on on on on on g q ui Plaza, 10 H and distribution channel mana y y y y y y Place, Sukumvit 21 Rd. q g g e y g hisek Rd., Khlon in row 107 Lad p g p istered office at 50 GMM Gramm ecializin g p kok Post, Sunthorn Kosa Rd., Kwan g anies p rovide rent of e roduce and distribute p p com act disc manufacturer. n, onsible for marketin onsible for domestic and international tri g p anies have re g p p p Office : 999, 999/9 Moo 2 Ban Office : 217/7 Sukhumvit Soi 63 Office : P.O. Box 21994, Dubai, United Arab Emirates Office : 545 Pridi Bhanom Prodution and distribution of news Office : 136 Ban Produces movies, conduct artist mana Office : 104 Soi Sukhumvit 31 Office : 555 Soi Lad Office : 59/1 Sukumvit 39 Rd., Klon Office : 92/11 Soi Sukhumvit 31 Office : 545 Pridi Bhanom Office : 999, 999/9 Moo 2 Ban Office : Nation Tower, Floor 19, 1858/87-90, Ban Office : 545 Pridi Bhanom Office : 1213/391, 2nd-3rd Fl., Soi Lad Office : 545 Pridi Bhanom Sell and Office : 957/28-30 Sukhumvit Soi 71 Klon Market, find distribution channels and Media business, s Office : 62 Ratchada Office : 21/38-39 Moo. 2 Soi Vi Prodution and distribution of news Office : 222 14th-16th Fl., Woravit Buildin Com Office : 498 Jarunsanitwon Office : 92/56-57 E Sathontanee tower 2, 19th floor, Sathonnuea Rd., Silom, Ban Res Office : 50 GMM Gramm Office : 12 Tethsaban-Narueman Rd., Prachanivate 1, Lad Office : 92/11 Soi Sukhumvit 31 desi Produce, distribute and retail books, Produce and sell sin Office : 545 Pridi Bhanom Office : 545 Pridi Bhanom ) t the followin p anies are follows; p Limited Office : 6th Floor, Sunnin ) kok exce Co.,Ltd. Res Co.,Ltd. Office : 989 6th Fl. Siam Discover g ) ) y China ( Plc. Co., Ltd. Thailand Thailand ) ( ( y Compan Co., Ltd. g Plc. Plc. enc g g 1994 g ( Plc., subsidiaries and associated com kok Co.,Ltd. kok Co.,Ltd. e Co., Ltd. y Music Music g g ) ) g V V known as "Two To Film Co., Ltd" ( ( y Know How Co., Ltd. Know How Co., Ltd. istered office of the other com toeinuea, Wattana, Ban y y g e Publishin g ire Ima en Index Event Co., Ltd. g p ntec Disc Production Co., Ltd. ntec Disc Production Co., Ltd. p y y -Time Traveller Co.,Ltd. s -Time Traveller Co.,Ltd. Formerl A ( A A 4 Blue Media Communication Co,Ltd. 3 Channel 1 D 2 Encore Co., Ltd. 3 Post Publishin 4 Media Center Co.,Ltd. 1 Scenario Co., Ltd. 5 5 Nadao Ban 2 Matichon Plc. 6 Famil 6 SE-Education Plc. 1.4 GMM Tai Hub Co., Ltd. 1.5 Sawasdee Thaweesuk Co.,Ltd. 1.9 Event Solutions Co., Ltd. 2.6 SE-Education Plc. 1.7 Index Event A 2.5 1.1 Luck Music 999 Co., Ltd. 2.3 Post Publishin 2.4 Karaoke Center Co., Ltd. 1.3 Ima 1.6 Phenomena Motion Pictures Co., Ltd. Office : 14 Soi Suwanmanee, Samsennok, Hua 1.2 Global Music and Media 1.8 Media Vision 2.2 Matichon Plc. 2.1 D 1. GMM Gramm Other companies Khlon 2. The re Associated companies 1.11 Tresbien Co., Ltd. 1.23 Famil 1.10 1.12 G Communications Co., Ltd. 1.15 D 63 Co., Ltd. 1.17 Mifah Co.,Ltd. 1.22 Nadao Ban 1.13 Ins 1.20 Channel 1.19 Encore Co., Ltd. 1.14 I Think Ad. Co., Ltd. 1.21 Blue Media Communication Co,Ltd. 1.16 Index Creative Online Co.,Ltd. 1.18 3-RD Co., Ltd COMPAINIES IN WHICH GMM GRAMMY HOLDS MORE THAN 10% OF THEIR SHARES COMPAINIES LIMITED AND ITS SUBSIDIARIES GMM GRAMMY PUBLIC COMPANY

126 MANAGEMENT TEAM GMM Grammy Public Company Limited The Company Management

Name Age Education % of Share Inter-Family Experience in past 5 years (Yrs.) Owned relationship Period Job Title Employment Records (31/12/09)

1 Mr. Paiboon Damrongchaitham 60 Bachelor of Arts (Mass Communications) (Honors) 53.76% - 2008 – Present Chairman of the Company Advisor GMM Grammy Plc.

Chulalongkorn University 2005 – Present Chairman of the Nomination and Remuneration Committee GMM Grammy Plc.

Doctoral of Business Administration (Honorary) 1998 – Present Chairman GMM Grammy Plc.

Christian University Nov. 2009 - Present Vice Chairman Family Know How Co., Ltd.

1998 – 2008 Advisor to the Executive Committee GMM Grammy Plc.

2008 – Present Chairman of the Company Advisor GMM Media Plc.

2005 – Feb. 2009 Chairman of the Nomination and Remuneration Committee GMM Media Plc.

2002 – Feb. 2009 Chairman GMM Media Plc.

2007 – 2008 Advisor to the Executive Committee GMM Media Plc.

2005 – 2007 Chairman of the Risk Management Committee GMM Media Plc.

2002 – 2007 Chief Executive Officer GMM Media Plc.

2005 – 2006 (Acting) Managing Director Sanamluang Gandontree Co.,Ltd.

1983 – 1998 Managing Director Grammy Entertainment Plc.

2 Mr. Chai Nasylvanta 51 Bachelor of Engineering (Electrical Engineering) 0.25% - Feb. 2009 - Present Chairman of the Audit Committee GMM Grammy Plc.

Chulalongkorn University Member of the Nomination and Remuneration Committee GMM Grammy Plc.

M.B.A. (Finance) University of Pennsylvania U.S.A. 1999 – Present Independent Director GMM Grammy Plc.

2007 – Present Director National Power Supply Co.,Ltd.

2007 – Present Director National Power Co.,Ltd.

2006 – Present Vice Chairman Advance Aviation Co.,Ltd.

2006 – Present Independent Advisor Benchachinda Holding Co.,Ltd

2006 – Apr. 2009 Director Post Publishing Plc.

2005 – Feb. 2009 Member of the Nomination and Remuneration Committee GMM Media Plc.

2002 – Feb. 2009 Independent Director / Chairman of the Audit Committee GMM Media Plc.

1999 - Feb. 2009 Member of the Audit Committee GMM Grammy Plc.

1993 – Present Director AON (Thailand) Ltd.

1989 – Present Director AON Group (Thailand) Ltd.

Director / Chairman Marketing & Image Advertising Co., Ltd.

2005 – 2006 Director Total Access Communication Plc.

1995 – 2006 Independent Advisor United Communication Industry Plc.

1984 – 1995 Senior Vice President, Project Finance Department Bangkok Bank Plc. MANAGEMENT TEAM 127

ประวัติผูบริหาร (E) (clean) : 1/7 128

MANAGEMENT TEAM GMM Grammy Public Company Limited The Company Management

Name Age Education % of Share Inter-Family Experience in past 5 years (Yrs.) Owned relationship Period Job Title Employment Records (31/12/09)

3 Mr. Dej Bulsuk 59 Bachelor of Business Administration - - Feb. 2009 - Present Member of the Audit Committee GMM Grammy Plc.

Thammasat University 2006 – Present Member of the Nomination and Remuneration Committee GMM Grammy Plc.

2002 – Present Independent Director GMM Grammy Plc.

Seminar Accomplishment: 2004 – Present President CCC Business Development Co.,Ltd.

The Thai Institute of Directors (IOD): Director Thailand Convention and Exhibition Bureau

Director Accreditation Program (DAP) (class 23/2004) (TCEB) (Public Organization) Chairman of the Good Governance, Recruitment and Remuneration Committee, TCEB TCEB

Director Siam Future Development Plc.

Independent Director / Member of the Audit Committee The Erawan Group Plc.

2002 - Present Independent Director / Member of the Audit Committee Jay Mart Plc.

2001 – Present Independent Director / Member of the Audit Committee AEON Thana Sinsap (Thailand) Plc.

2006 – Jun. 2009 Advisor to the Board President Bakery Plc.

2002 – Feb. 2009 Independent Director / Member of the Audit Committee GMM Media Plc.

2006 – Feb. 2009 Chairman of the Audit Committee GMM Grammy Plc.

2002 – 2006 Member of the Audit Committee GMM Grammy Plc.

2004 – 2006 Honorary Chairman McThai Co.,Ltd. (McDonald's Thailand)

1984 – 2004 President & Joint Venture Partner McThai Co.,Ltd. (McDonald's Thailand)

4 Mr. Weerawong Chittmittrapap 52 Bachelor of Laws - - 2006 – Present Independent Director / Member of the Audit Committee GMM Grammy Plc.

Chulalongkorn University Apr. 2009 - Present Director / Member of the Audit Committee Thai Airways International Plc.

Master of Laws Director Nok Airlines Co., Ltd.

University of Pennsylvania U.S.A. 2008 - Present Chairman Weerawong, Chinnavat & Peangpanor Ltd.

(formally known as “White & Case (Thailand) Ltd.”)

* Thai Barrister-at-Law and the first Thai lawyer 2008 – Present Director National Power Supply Co.,Ltd.

admitted to the New York State Bar 2008 – Present Director National Power Co.,Ltd.

2007 – Present Director and Member of Audit Committee Siam Food Products Plc.

2001 - Present Director and Member of Audit Committee Berli Jucker Plc.

Seminar Accomplishment: 1996 – 2008 Executive Partner White & Case (Thailand) Ltd.

The Thai Institute of Directors (IOD): 2001 – 2007 Director and Member of Audit Committee ITV Plc.

Director Certification Program (DCP) (Class 0/2000) 2005 - 2006 Director Nutrix Plc.

Other Present works:

- Qualified Member to Trade Competition Committee, Ministry of Commerce

- Special Speaker, Thai Institute of Directors

- Special Advisor, Listed Company Association

- Special Lecturer, Institute of Legal Education, Thai Bar Association

ประวัติผูบริหาร (E) (clean) : 2/7 MANAGEMENT TEAM (E) (clean) 3/7 : ิ หาร ู  บร ิ ผ ั ต (E) (clean) 3/7 : ิ หาร Employment Records ประว ู  บร ิ ผ ั ต ammy Plc. Employment Records ประว ammy Plc. GMM Grammy Plc. GMM Grammy Plc. GMM Grammy Plc. GMM Media Plc. GMM Grammy Plc. GMM Grammy Plc. GMM Media Plc. GMM Media Plc. GMM Grammy Plc. GMM Media Plc. GMM Grammy Plc. GMM Grammy Plc. GMM Grammy Plc. GMM Media Plc. Atime Traveller Co., Ltd. Open Radio Co., Ltd. GMM Media Plc. Radio Concept Co.,Ltd. A-Time Media Co.,Ltd. GMM Media Plc. GMM Grammy Plc. GMM Media Plc. GMM Media Plc. GMM Media Plc. GMM TV Co.,Ltd. Grammy Entertainment Plc. GMM Gr GMM Media Plc. (formally known as "Grammy Television Co.,Ltd.") GMM Grammy Plc. GMM Grammy Plc. GMM Grammy Plc. GMM Media Plc. GMM Grammy Plc. GMM Grammy Plc. GMM Media Plc. GMM Media Plc. GMM Grammy Plc. GMM Media Plc. GMM Grammy Plc. GMM Grammy Plc. GMM Grammy Plc. GMM Media Plc. Atime Traveller Co., Ltd. Open Radio Co., Ltd. GMM Media Plc. Radio Concept Co.,Ltd. A-Time Media Co.,Ltd. GMM Media Plc. GMM Grammy Plc. GMM Media Plc. GMM Media Plc. GMM Media Plc. GMM TV Co.,Ltd. Grammy Entertainment Plc. GMM Gr GMM Media Plc. (formally known as "Grammy Television Co.,Ltd.") it Committee Experience in past 5 years it Committee Job Title Experience in past 5 years Job Title Advisor to the Executive Committee for the year 1984) Member of the Risk Management Committee Advisor to the Executive Committee for the year 1984) Member of the Risk Management Committee Feb. 2009 - Present Co-Chief Executive Officer 2008 – Present2005 – Present Vice Chairman 2001 – Present Chairman of the Risk Management Committee 1994 – Present Chief Creative Officer (Creative Division) Director 2551 - Present2002 – Feb. 2009 Advisor Chief Executive Officer 2003 – 2551 Advisor to the Board of Director 1983 – 2001 Executive Vice President (Music Business Division) Feb. 2009 - Present Chairman 2007 – Present Director / Managing 2002 - Present Director 2007 – Present Chief Executive Officer 2006 – Present2002 – Present Managing Director 1991 – Present Director / Managing 1989 – Present Managing Director 2008 – Feb. 2009 Managing Director 2007 – Feb. 2009 Vice Chairman 1989 – Feb. 2009 Chairman of the Risk Management Committee 2005 – 2007 Executive Director 2002 – 20071995 – 2007 Member of the Risk Management Committee Executive Director Managing Director 1978 - Present Writer (S.E.A. Write Award (Short stories) 2002 - Feb. 2009 Independent Director / Member of the Audit Committee 2551 - Present2002 – Feb. 2009 Advisor Chief Executive Officer Feb. 2009 - Present Co-Chief Executive Officer 2008 – Present2005 – Present Vice Chairman 2001 – Present Chairman of the Risk Management Committee 1994 – Present Chief Creative Officer (Creative Division) Director 2003 – 2551 Advisor to the Board of Director 1983 – 2001 Executive Vice President (Music Business Division) Feb. 2009 - Present Chairman 2007 – Present Director / Managing 2002 - Present Director 2007 – Present Chief Executive Officer 2006 – Present2002 – Present Managing Director 1991 – Present Director / Managing 1989 – Present Managing Director 2008 – Feb. 2009 Managing Director 2007 – Feb. 2009 Vice Chairman 1989 – Feb. 2009 Chairman of the Risk Management Committee 2005 – 2007 Executive Director 2002 – 20071995 – 2007 Member of the Risk Management Committee Executive Director Managing Director 1978 - Present Writer (S.E.A. Write Award (Short stories) 2002 - Feb. 2009 Independent Director / Member of the Audit Committee - Feb. 2009 - Present Co-Chief Executive Officer - Apr. 2009 - Present Independent Director / Member of the Aud wife The Company Management Mr. Santisuk Chongmankong's - Feb. 2009 - Present Co-Chief Executive Officer - Apr. 2009 - Present Independent Director / Member of the Aud wife GMM Grammy Public Company Limited The Company Management Mr. Santisuk Chongmankong's - 0.08% 0.28% Owned relationship Period spouse) spouse) GMM Grammy Public Company Limited (including (including (31/12/09) % of Share Inter-Family - 0.08% 0.28% Owned relationship Period spouse) spouse) (including (including (31/12/09) % of Share Inter-Family Education Education Thammasat University Silpakorn University California State University Long Beach California U.S.A. Chulalongkorn University Master of Arts (Printmaking) Thammasat University Silpakorn University California State University Long Beach California U.S.A. Chulalongkorn University 61 Bachelor of Fine Arts (Printmaking) 57 Bachelor of Liberal Arts Age (Yrs.) Master of Arts (Printmaking) 61 Bachelor of Fine Arts (Printmaking) 57 Bachelor of Liberal Arts Age (Yrs.) Name Name 5 Mr. Wanich Jarungidanan 7 Mrs.Saithip Montrikul Na Audhaya 53 Bachelor of Arts (Mass Communications) 6 Ms. Boosaba Daorueng 5 Mr. Wanich Jarungidanan 7 Mrs.Saithip Montrikul Na Audhaya 53 Bachelor of Arts (Mass Communications) 6 Ms. Boosaba Daorueng MANAGEMENT TEAM MANAGEMENT

129 MANAGEMENT TEAM 130

MANAGEMENT TEAM GMM Grammy Public Company Limited The Company Management

Name Age Education % of Share Inter-Family Experience in past 5 years (Yrs.) Owned relationship Period Job Title Employment Records (31/12/09)

8 Mr. Krij Thomas 50 Bachelor of Arts (Mass Communications) 0.25% - 2008 - Present Executive Vice President ( Music Business Division) GMM Grammy Plc.

Chulalongkorn University 2004 - Present Executive Director GMM Grammy Plc.

2003 - Present Managing Director (Grammy Gold Division) GMM Grammy Plc.

2007 - Present Director 3-RD Co.,Ltd.

1997 - Present Managing Director Krij Thomas Co.,Ltd.

2005 - 2006 (Acting) Managing Director (GMM International Division) GMM Grammy Plc.

2001 - 2003 Assistant Managing Director (Grammy Gold Division) GMM Grammy Plc.

1999 - 2001 Assistant Vice President (Grammy Gold Division) GMM Grammy Plc.

9 Mr.Sumeth Damrongchaitham 46 Bachelor of Economics - - 2008 – Present Company Secretary GMM Grammy Plc.

Chulalongkorn University 2008 - Present Chairman of the Sub-CG and Ethics Committee GMM Grammy Plc.

Bachelor of Science (Construction Management) 2005 – Present Member of the Nomination and Remuneration Committee GMM Grammy Plc.

King Mongkut's Institute of Technology Ladkrabang Member of the Risk Management Committee GMM Grammy Plc.

Bachelor of Business Administration 2004 – Present Director / Executive Director / Secretary to the Board of Directors GMM Grammy Plc.

(General Management), Ramkhamhaeng University Secretary to the Executive Committee GMM Grammy Plc.

M.B.A. (Finance) Chief Operating Officer,(Corporate Support and Business Development) GMM Grammy Plc.

Thammasat University Nov. 2009 - Present Director / Managing Director Family Know How Co., Ltd.

Apr. 2009 - Present Director Post Publishing Plc.

Seminar Accomplishment: Feb. 2009 - Present Vice Chairman GMM Media Plc.

The Thai Institute of Directors (IOD): 2008 – Present Company Secretary GMM Media Plc.

1 Company Secretary Program (CSP) (Class 28/2008) 2007 – Present Assistant to Chief Executive Officer GMM Media Plc.

2 D&O Insurance: Mitigating Directors Liabilities Risk / 2006 – Present Member of the Recruitment and Remuneration Committee SE-EDUCATION Plc.

Special Seminar (Class 3/2008) 2005 - Present Director SE-EDUCATION Plc.

3 Role of the Compensation Committee (Class 3/2007) 2004 – Present Director / Secretary to the Board of Directors GMM Media Plc.

4 Director Accreditation Program (DAP) (Class 21/2004) 2005 – Feb. 2009 Member of the Nomination and Remuneration Committee, GMM Media Plc.

Member of the Risk Management Committee GMM Media Plc.

Capital Market Academy (CMA): 2004 - Feb. 2009 Executive Director / Secretary to the Executive Committee GMM Media Plc.

Leader Program (Class 8/2009) 2000 - 2004 First Vice President National Finance Plc.

2000 Vice President National Finance Plc.

1999 – 2000 Manager Special Asset Management National Finance Plc.

1996 – 1999 Assistant Vice President National Securities Plc.

ประวัติผูบริหาร (E) (clean) : 4/7 MANAGEMENT TEAM GMM Grammy Public Company Limited The Company Management

Name Age Education % of Share Inter-Family Experience in past 5 years (Yrs.) Owned relationship Period Job Title Employment Records (31/12/09)

10 Mr. Takonkiet Viravan 43 Bachelor of Communication & Theatre 1.09% - Apr. 2009 - Present Director GMM Grammy Plc.

Boston College U.S.A. Feb. 2009 - Present Executive Director GMM Grammy Plc.

M.S. (Broadcasting) 2004 - Present Director / Managing Director Scenario Co.,Ltd.

Boston University U.S.A. 2003 - Present Director / Managing Director Teentalk Co.,Ltd.

2002 - Present Director GMM Media Plc.

1991 - Present Director / Managing Director Exact Co.,Ltd.

2002 - Feb. 2009 Executive Director GMM Media Plc.

11 Mr. Kreingkarn Kanjanapokin 47 Bachelor of Political Science 0.29% - Apr. 2009 - Present Director / Executive Director GMM Grammy Plc.

Chiang Mai University 2008 - Present Director GMM Media Plc.

2004 - Present Director / Co-Chief Executive Officer Index Event Agency Plc.

2001 - 2004 Managing Director Index event Agency Co., Ltd.

Seminar Accomplishment: Other Present works:

The Thai Institute of Directors (IOD): - Advisor, Marketing Association of Thailand (MAT)

1. Financial Statement for Directors Program, 2008 - Special Speaker, Master Degree, School of Communication Arts,

University of the Thai Chamber of Commerce

2. Director Accreditation Program (DAP) (Class 30/2004) - Special Speaker, Famous Institutes and Organization

12 Mr. Sataporn Panichraksapong 42 Bachelor of Journalism and Mass Communications 0.04% - Apr. 2009 - Present Director GMM Grammy Plc.

(Cinematography) Feb. 2009 - Present Executive Director / Member of the Risk Management Committee GMM Grammy Plc.

Thammasat University 2008 - Present Assistant to Executive Vice President (Music Business Division) GMM Grammy Plc.

Apr. 2009 - Present Director GMM Media Plc.

2007 - Present Director / Managing Director GMM TV Co., Ltd.

(formally known as "Grammy Television Co., Ltd.")

2007 - Feb. 2009 Member of the Risk Management Committee GMM Media Plc.

2005 - 2006 Senior Vice President, Chief Executive Officer Office GMM Grammy Plc.

2005 - 2007 Deputy Managing Director Grammy Television Co., Ltd.

2000 - 2002 Director – Music Business Division RS Promotion Plc. 131

ประวัติผูบริหาร (E) (clean) : 5/7 132

MANAGEMENT TEAM GMM Grammy Public Company Limited The Company Management

Name Age Education % of Share Inter-Family Experience in past 5 years (Yrs.) Owned relationship Period Job Title Employment Records (31/12/09)

13 Mr. Kittisak Chuang-a-roon 55 Bachelor of Arts (Mass Communications) 0.37% - 2005 – Present Member of the Risk Management Committee GMM Grammy Plc.

Chulalongkorn University (including 2001 – Present Executive Director GMM Grammy Plc.

spouse) Chief Operating Officer (Music Business Division) GMM Grammy Plc.

1994 – Apr. 2009 Director GMM Grammy Plc.

14 Mr. Wichian Rerkpaisan 51 Bachelor of Political Science 0.10% - 1995 - Present Executive Director GMM Grammy Plc.

Chulalongkorn University Managing Director (Genie Records Division) GMM Grammy Plc.

Managing Director Aratist Management Co., Ltd

1992 - 1996 Manager, Creative and Music Production Department Grammy Entertainment Plc.

15 Mr. Santisuk Chongmankong 53 Bachelor of Arts (Mass Communications) 0.28% Ms.Boosaba 2005 - Present Managing Director (GMM LIVE Division) GMM Grammy Plc.

Chulalongkorn University (including Daorueng's 1999 - Present Executive Director GMM Grammy Plc.

spouse) Husband 1995 - Present Managing Director Extraorganizer Co., Ltd

16 Mr. Suwat Damrongchaitham 43 Bachelor of Business Administration (Marketing) - - 2005 - Present Executive Director GMM Grammy Plc.

Assumption University (ABAC) 2004 - Present Managing Director (Digital Division) GMM Grammy Plc.

1998 - Present Managing Director (Grammy Big Division) GMM Grammy Plc.

2007 - Present Director 3-RD Co.,Ltd.

2006 - Present Director / Managing Director Digital Arms Co.,Ltd.

2005 - Present Director / Managing Director GMM Digital Domain Co., Ltd

2005 - 2006 Advisor Siam Infinit Co., Ltd

2004 - 2005 Managing Director Siam Infinit Co., Ltd

2002 - 2005 Managing Director GMM Music Publishing International Co., Ltd

2004 Managing Director (E-Business Division) GMM Grammy Plc.

ประวัติผูบริหาร (E) (clean) : 6/7 MANAGEMENT TEAM GMM Grammy Public Company Limited The Company Management

Name Age Education % of Share Inter-Family Experience in past 5 years (Yrs.) Owned relationship Period Job Title Employment Records (31/12/09)

17 Mr. Kamron Pramoj na Ayutthaya 47 Bachelor of Communication Arts - - Feb. 2009 - Present Executive Director GMM Grammy Plc.

Otis Person School of Design 2002 - Present Director GMM Media Plc.

Los Angeles U.S.A. 1987 - Present Managing Director Image Publishing Co.,Ltd.

2002 - Feb. 2009 Executive Director GMM Media Plc.

18 Mr. Yongsak Ekprachyasakul 51 Mini M.B.A. - - Feb. 2009 - Present Executive Director GMM Grammy Plc.

University of the Thai Chamber of Commerce 2008 - Present Managing Director (G"Gard Business Unit) GMM Grammy Plc.

2002 - Present Managing Director (Sales and Marketing Business Unit) GMM Grammy Plc.

Seminar Accomplishment: 2007 - Present Director 3-RD Co.,Ltd.

The Thai Institute of Directors (IOD): 2007 - Present Director U STAR (Thailand) Co., Ltd.

- Director Accreditation Program (DAP) (Class 17/2008) 2005 - Present Director / Managing Director Clean Karaoke Co., Ltd.

Management and Psychology Institute: 2005 - Present Director / Managing Director GMM Music Publishing International Co., Ltd.

- The BOSS Program, (class 30) 2005 - Present Director SE-EDUCATION Plc.

1999 - 2002 Sales Director MGA Co., Ltd.

1988 - 1999 Sales Manager MGA Co., Ltd.

19 Mr. Sirichai Tantiponganant 46 Bachelor of Arts (Economics) - - Apr. 2009 - Present Executive Director GMM Grammy Plc.

Boston University, U.S.A. 2008 - Present Member and Secretary of the Sub-CG and Ethics Committee GMM Grammy Plc.

Master of Arts (Economics) 2006 - Present Chief Financial Officer GMM Grammy Plc.

University of Southern California, U.S.A. 2006 - Present Member of the Risk Management Committee GMM Grammy Plc.

Master of Business Administration 2007 - Present Director 3-RD Co.,Ltd.

University of Southern California, U.S.A. 2006 - Present Acting Chief Financial Officer GMM Media Plc.

2006 - Feb. 2009 Member of the Risk Management Committee GMM Media Plc.

2006 Assistant to Chairman GMM Media Plc.

2005 - 2006 Managing Director Devonshire Capital (Thailand) Ltd.

1998 - 2005 Director ABN AMRO Asia Corporate Advisors (Thailand) Ltd. MANAGEMENT TEAM 133

ประวัติผูบริหาร (E) (clean) : 7/7 OTHER REFERENCE PERSONS

Other Reference Persons

REGISTERED OFFICE GMM Grammy Public Company Limited 50 GMM GRAMMY PLACE, Sukhumvit 21 Rd. (Asoke), Khlongtoeinuea, Wattana, Bangkok 10110 Tel (662) 669-9000, FAX (662) 669-9737

SHARE REGISTRAR Thailand Securities Depository Co., Ltd. 62 The Stock Exchange of Thailand Building, 4, 6-7th Floor, Rajadapisek Rd., Khlongtoey, Bangkok 10110 Tel (662) 229-2800, Fax (662) 359-1259

AUDITOR Ernst & Young Office Limited 33rd Floor, 193/136-137 Lake Rajada Office Complex, New Rajadapisek Rd., Bangkok 10110 Tel (662) 264-0777, (662) 661-9190, Fax (662) 264-0789-90, (662) 661-9192

LEGAL ADVISOR BAKER & MCKENZIE Co.,Ltd 22nd-25th Floors, Abdulrahim Place, 990 Rama IV Road, Silom, Bangrak, Bangkok 10500 Tel (662) 636-2000 Fax (662) 636-2111 Kriengkrai Legal Counselling Ltd. 410/117 Ratchadapisek Rd., Samsennok, Huaykwang, Bangkok 10310 Tel (662) 541-5444-5 Fax (662) 541-5660 Weerawong, Chinnavat and Peangpanor Ltd. 22nd Floor Mercury Tower 540 Plearnjit Road Lumpini Pathumwan Bangkok 10330 Tel (662) 264-8000 Fax (662) 657-2222

PRINCIPAL BANKERS Siam Commercial Bank Public Company Limited CIMB Thai Bank Public Company limited Kasikorn Bank Public Company Limited

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