Management Discussion and Analysis Quarter 3

had cash and cash equivalents worth 1,540.9 million Baht. In August 2004, the Company entered into an agreement to purchase a 51-rai plot of land at a price of 1,117.2 million Baht from the FIDF of the Bank of Thailand. Even when the impact of the Company land purchase and the appropriation to the Ministry of Finance for the period before its corporatization (October 1, 2003 to August 16, 2004) are taken into account, the Company still has sufficient liquidity for business operations. 2. An analysis of the Company's results of operations in the three- month period ending June 30, 2004 As for the Company's results of operations in the three-month period ending June 30, 2004 (based on the consolidated financial statements), the Company's total revenue for such period (based on the consolidated financial statements) amounted to 701.0 million Baht, an increase of 252.9 million Baht or 56.4 percent when compared to 448.1 million Baht of the same period of 2003. The major factor contributing to the significant increase is from television and radio broadcasting, which increased from the same period of last year by 246.4 million Baht, or 82.1 percent. Such increase was principally due to the increase in television advertisement income. Radio advertisement income also increased, although at a lesser amount than television advertisement income. The Company was able to increase more sellable airtime space and utilize them to generate higher advertisement incomes. In addition, the increase of the Company's total revenue was also partly a result of more revenues from the joint operation business (especially from UBC Group), which increased by 9.1 million Baht, or 6.6 percent, when compared to the same period of the previous year. However, the increase of the Company's total revenue was partly set off by the reduction of other income, which decreased from the previous year by 2.6 million Baht, or 27.7 percent. With respect to the operating expenses, the Company had total expenses in the three-month period ending June 30, 2004 (based on the consolidated financial statements) in the amount of 417.1 million Baht, an increase of 108.9 million Baht, or 35.3 percent, from 308.3 million Baht in the same period of previous year. Such increase was principally due to the increase in selling and administrative expenses, which totaled 61.1 million Baht, or 74.0 percent comparing with the same period of 2003. This resulted from the rises of advertisement commission, allowance for doubtful account, and the operating and administrative expenses (personnel). In addition, there was also an increase in the costs of television and radio broadcasting, which increased from the previous year by 48.3 million Baht, or 24.8 percent. This increase resulted from the rises of the cost of personnel, depreciation expenses, costs of electricity and maintenance, and other productions costs. Based on the reasons above, the Company had a net profit of 284.2 million Baht in the three-month period ending June 30, 2004 (based on the consolidated financial statements), an increase of 144.4 million Baht, or 103.3 percent, when compared to the same period of 2003, which had a net profit of 139.8 million Baht. This reflects that the Company's operating revenues increased substantially higher than it's operating expenses. With respect to assets, the Company had total assets as of June 30, 2004 (based on the consolidated financial statements), amounting to 5,651.9 million Baht, a decrease of 203.3 million Baht, or 3.6 percent, from March 31, 2004 (based on the consolidated financial statements), when it had 5,855.2 million Baht. The main reason for the decline was the decrease in current assets, which decreased by 203.4 million Baht, or 5.5 percent. The non-current assets experienced a slight change. The major decreasing current assets were cash and cash equivalents, which decreased by 500.9 million Baht, or 32.5 percent, due to the payment which the Company had to appropriate to the Ministry of Finance of 469.0 million Baht in April 2004. However, the decrease in current assets was partly set off by the slight increase in short-term investments, restricted cash, account receivables net, accrued income, and other current assets. The Company's total liability as of June 30, 2004 (based on the consolidated financial statements), amounted to 1,494.2 million Baht, a decrease of 303.8 million Baht, or 16.9 percent from March 31, 2004 (based on the consolidated financial statements), of which the Company's total liability was 1,798.0 million Baht. This decrease was principally due to the decrease in current liabilities, which decreased by 296.6 million Baht, or 22.7 percent. This resulted from the decrease in the accrued appropriation to the Ministry of Finance of 280.9 million Baht when the Company made the appropriation to the Ministry of Finance for 469.0 million Baht for the fiscal year 2003 in April 2004. However, those were partly added up by the appropriation to the Ministry of Finance for the three-month period ending June 30, 2004. Non-current liability slightly decreased by 7.2 million Baht, or 1.5 percent. With respect to the Company's equity, as of June 30, 2004 (based on the consolidated financial statements), the Company's equity totaled 4,157.8 million Baht, an increase of 100.5 million Baht (2.5 percent) from March 31, 2004 (based on the consolidated financial statements), when the Company's equity totaled 4,057.3 million Baht. The major factor for this increase was the increase in retained earnings of 95.7 million Baht, or 2.4 percent. The Mass Communication Organization of Thailand The Explanation of operating result for the third quarter period of 2004 as compared to the same period in 2003