Notification of subscription rights for newly issued shares Section 2 General Information of GMM Grammy PCL 1. Name and Location of the Company Name GMM Grammy PCL (“The Company”) Head Office 50 GMM Grammy Place, Sukhumvit 21 Road (Asoke), Klongtoeinuea, Wattana, Bangkok 10110 Telephone (662) 669-9000 Facsimile (662) 669-9009 2. Types of Business and Business description of the Core Business of the Company and its Subsidiaries 2.1 Business Description The Company’s business can be divided into four main categories as follows. 1. Music Business and related businesses operates under the “Total Music Business” model, consisting of music production and copyrights, digital content business, show business, and artist management business. Physical Products and Distribution Business is directly related with music creation and show businesses in that music and recorded live shows are sold in the forms of CDs, VCDs, DVDs, and MP3s via modern trade outlets (superstores and discount stores) and traditional trade channels (wholesalers and retailers) nationwide. In addition, they are also sold via Call Center and Online channel at www.shopping8000.com. Publishing Management Business involves collecting copyrights fees from other parties using the Company’s property for commercial purposes. Digital Management Business is the digitization of music content for distribution through mobile phone networks, the internet, and external parties via downloading services for ringtones, ring back tones, full song downloads, and even complete music videos (full MVs). These services are available on an à la carte basis or through monthly subscription on mobile phones (*123), and website (www.gmember.com). Show Business is the business of creating and producing various staged events, such as concerts and theatrical performance. Artist Management Business handles the selection and development of new artists, including managing, and sourcing assignments to music and non-music artists. 8 Notification of subscription rights for newly issued shares 2. Media Business comprises the followings. Radio Business produces and hosts F.M. radio programs. Television Business involves the production of television programs and the provision of production services for airtime rented from Channels 3, 5, 7, and 9. Publishing Business is the production and distribution of magazines. 3. Movie Business produces feature films to be screened in movie theatres. 4. Full-service of events management and other 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 Creative Village PCL and its subsidiaries are responsible and operate this line of business. It also includes other businesses, such as Home Shopping business, Call-Center Business and Studio Rental and etc. 5. Satellite TV Business consists of the production of television channels to be aired on satellite TV and the “GMM Z” satellite TV platform, comprising the sale of set-top box, the provision of pay TV services, and the resale of the Company’s acquired broadcasting rights. 9 Notification of subscription rights for newly issued shares Investment Structure of The Company GMM Grammy Plc. More Music Co., Ltd. 1) GMM Tai Hub Co., Ltd. GMM Holding Co., Ltd. GMM Z Co., Ltd. 100% 51% 100% 100% MGA Co., Ltd. 1) Sawasdee Thaweesuk Co., Ltd. Global Music and Media GMM Fitness Club Co., Ltd. 1) GMM B Co., Ltd. 1) 100% 100% (China) Limited 100% 100% 100% Digital Gen Co., Ltd. 1) Nadao Bangkok Co., Ltd. GMM Digital Domain Co., Ltd. 1) Grammy Publishing Bang Channel Co., Ltd. 100% 30% 100% House Co., Ltd. 1) 100% 100% Extraorganizer Co., Ltd. 1) GTH on Air Co., Ltd. Digital Arms Co., Ltd. 1) Magic Film Co., Ltd. 1) Green Channel Co., Ltd. (Held 20% by Image Publishing Co., Ltd. & 100% held 30% by GMM Z Co., Ltd. 50% 100% 91% 100% GR Vocal Studio Co., Ltd. J K Network Co., Ltd. GMM Studio Co., Ltd. Maxxi TV Co., Ltd. 100% 100% 100% 100% GMM Music Publishing Mifah Co., Ltd. 1) The News TV Co., Ltd. International Co., Ltd. 100% 100% 51% GDC Co., Ltd. STGMM Co., Ltd. 100% 50% GMM Z Trading Co., Ltd. 3) Lucks Satellite Co., Ltd. 100% 25% 3-RD Co., Ltd. 70% Fan TV Co., Ltd. (Held 49% by GMM Holding Co., Ltd.) 51% GMM CJ O Shopping Co., Ltd. GMM Media Plc. 51% 99.92% Family Know-how Co., Ltd. Radio Concept Co., Ltd. 1) Deetalk Co., Ltd. Image Publishing Co., Ltd. Index Creative Village Plc. 50% 100% 100% 70% 50% K Arena Co., Ltd. A-Time Media Co., Ltd. GMM TV Co., Ltd. Image On Air Co., Ltd. 1) Event Solutions Co., Ltd. Joint Venture Index D103 Maco 50% 100% 100% 100% 100% 70% G S-one Co., Ltd. 1) 50% A-Time Traveller Co., Ltd. Me Miti Co., Ltd. Bliss Publishing Co., Ltd. Aspen Index Event Co., Ltd. Joint Venture ID2 50% 20% 70% 100% 50% 67% JSL Channel Co., Ltd. A Gen Event Agency Co., Ltd. Teen Talk Co., Ltd. GMM Inter Publishing Co., Ltd. Tresbien Co., Ltd. Joint Venture Index Cityneon 30% 70% 100% 70% 100% 50% Exact Co., Ltd. GMM Times Co., Ltd. Index Creative Online Co., Ltd. 100% 70% 70% 50% In Publishing Co., Ltd. D-63 Co., Ltd. Acts Studio Co., Ltd. 70% 50% 50% Scenario Co., Ltd. Envirosell (Thailand) Co., Ltd. 25% 60% Channel [V] Music Inspire Image Co., Ltd. (Thailand) Co., Ltd. 25% 60% Media Vision (1994) Co., Ltd. 51% G Communications Co., Ltd. 50% Max Creative Co., Ltd. Remark: 50% Index and V Co., Ltd. 1) Curently non-active 50% 2) Investment in new associate in the first Quarter Index and M Co., Ltd. 3) GMM Grammy Plc. purchase investment of subsidiaries in the first Quarter . 50% I Think Ad Co., Ltd. 40% Blue Media Communication Co,Ltd. 40% Big Event Co., Ltd 2) 50% 10 Notification of subscription rights for newly issued shares Music Business and Music Related Businesses Physical Products and Distribution Business In 2012, the Company released 257 music albums, encompassing every consumer target group, namely pop, rock, alternative, country/‘songs for life’, R&B, soul, and compilation of top hits during the year. Sales and distribution is carried out through modern trade channels (superstores and discount stores), traditional trade channels (wholesalers and retailers) throughout the country, and the Company’s own retail stores, Imagine. As of December 2012, there were 38 Imagine retail stores. Publishing Management Business The Company manages and collects copyrights fees from food operators, restaurants, radio operators, karaoke outlets, and karaoke booths and other operators who use the Company’s music for commercial purposes. Digital Content Business In 2012, digital business - the consumption of music via mobile telephone and the Internet is still one of the main channels to sell music. The Company offers music downloading services on an ‘a la carte’ (individual song) basis, and monthly subscription basis, to leading mobile telephone network operators in Thailand. In addition, the www.gmember.com website is the core site for music, news about artists, music downloads, and other activities. Show Business This business employs its music and artist resources in producing a variety of concerts in various formats, such as promoting albums and theme concerts. In 2012, the Company organized 20 large-scale concerts. The largest ones were Body Slam Nung Len,The Lylics of Love Concert, Anniversary 20 years J Jetrin, 25 years Baab Byrd Byrd Concert. In addition, it also organized 2 music festivals, namely Chick Mountain Music Festival and Big Mountain Music Festival. Besides generating revenues from the sale of tickets and sponsorship, this business also generates additional revenues from the sale of VCD and DVD recordings of live performances. Artist Management Business The Company has a policy to train and develop both Music and Non-music artists to enhance their capabilities in singing, acting, and dancing. In addition, it also tries to expand 11 Notification of subscription rights for newly issued shares revenue channels for those artists in the forms of live performance in pubs and bars, as well as employment opportunities as product presenters. Policy and Characteristics of Music Business Market Competitive strategy • To issue products with quality and variety for all target groups by a professional music team of Thailand • To have a comprehensive entertainment business structure incorporating music business, movies business, and media business, including radio, television, print media and satellite television • To have efficient distribution channels and systems for physical products (CD, VCD, and DVD) and digital products Physical products (DC, VCD, and DVD) The Group has expanded “Imagine” retail stores to cover vast areas, for more convenience to consumers. As at December 31, 2012, the Company had a total of 38 “Imagine” stores, with efficient sofftwares being used in the management of goods distribution. Digital products The Company has provided an unlimited download service through monthly subscription, where customers may download new songs and songs from the Company’s music inventory at all times through all mobile telephone networks, which is well received by the customer. • To have music copyrights and company artists with capabilities to create market values in the future. With in-house production of over 40,000 songs and over 300 artists, all the songs can be recreated as new issues in various forms, while company artists may, in addition to issue new albums, organize concerts and take up various jobs, such as presenters in advertising and show events. Characteristics of customers and target customer groups The customers of music products in the forms of CD, VCD, and DVD can be divided into two major groups, namely modern trade (major retailers) and traditional trade (wholesalers and retailers), while customers of music products under music copyrights can be divided into three 12 Notification of subscription rights for newly issued shares major groups, namely karaoke shops, restaurants, and other entrepreneurs, such as radio stations, airlines, and department stores.