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MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED

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Financial Highlights

As of December 31 2003 2004 2005

Total Asset (Million baht) 3,659 6,661 7,394Total Liabilities (Million baht) 1,5121,5121,5121,5121,512 4,0494,0494,0494,0494,049 4,4694,4694,4694,4694,469Interest-bearing debt (Million baht) 645645645645645 2,7142,7142,7142,7142,714 2,7962,7962,7962,7962,796Total Equity (Million baht) 2,1462,1462,1462,1462,146 2,6122,6122,6122,6122,612 2,9242,9242,9242,9242,924

Number of shares (Million) 587.71587.71587.71587.71587.71 709.32709.32709.32709.32709.32 709.32709.32709.32709.32709.32Book value (Baht) 3.65 3.68 4.12Earnings per share (Baht) 0.720.720.720.720.72 -0.77-0.77-0.77-0.77-0.77 0.750.750.750.750.75Dividend per share (Baht) 0.60 0.05 0.64Dividend payout 83% 82%* 85%

Net interest-bearing D/E (times) 0.25 0.92 0.85Return on asset 13% -9% 7%Return on equity 22% -20% 18%

* Dividend is paid from 4Q04 performance only

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January 1, 2005 Opened a new bowling alley at Piyaromserving 36 bowling lanes

April 1, 2005 Added 4 screens, 16 bowling lanes and 13karaoke rooms at Fashion Island branch aswell as change brand name from EGV to MajorCineplex

April 13, 2005 Added 5 screens at Pinklao branch

April 22, 2005 Opened a new branch at Orm-Yai serving 5screens 12 bowling lanes and 12 karaoke rooms

August 6, 2005 Opened a new branch at Ubonratchathaniserving 5 screens

September 29, 2005 Opened a new branch at Petchkasem serving 6screens 12 bowling lanes and 9 karaoke rooms

October 31, 2005 Invested 40% of registered capital in Major On-line Co.,Ltd for 400,000 baht

November 25, 2005 Invested 80% of registered capital in MPictures Co.,Ltd for 80 million baht

Milestone

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2005 was a memorable year with much emphasis on solidifying Major Cineplex'sleading entertainment position in terms of market share, innovative services and strategic investments. For the year ahead we anticipate the company will begin to reap the benefits from our yesteryearefforts and continue to dominate the industry in terms of market share and services. In 2006 we willlook to embrace international standards across all aspects of our business especially areas of corporategovernance and in our assessment of investments, keeping in our core competencies. The Companyunderstands that good corporate governance is just as fundamental in adding value to the company asis becoming a world class cinema and total entertainment center. In this occasion, I would like to thank all shareholders, customers, business partners, financialinstitutions, related government organizations and all supporters of the Company for their endlesssupport and confidence to develop all aspects of our Company.

Best Regards,

Somchainuk EngtrakulChairman

Message from Chairman

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In 2005, Major Cineplex Group PLC added 4 branches in strategic locations both in andoutside of Bangkok, not including an additional 6 branches which are still in the pipeline following ourstrategy to be the leader in entertainment in Thailand. By the end of 2005, the Company had 32branches 258 screens over 59,500 seats and over 360 bowling lanes. In addition, the Company hassegmented its markets according to locations and customer groups which has helped us market effec-tively. As a result of continuous promotional activities all year round, the Company's movie ticketsales have grown to 21 million. The Company's policy in 2006 will focus on internationalization. The Company has restructuredmanagement with the goal to be professional, soundly competent able to identify opportunities to growthe business. Our view of making further strategic investments has not slowed as we aim to be theworld class leader in total entertainment. With a goal to reach all our customers' entertainment needs around the country, the Companyexpects to have at least 50 branches 100,000 seats in the next 3 years. The Company grows withconfidence and principally focuses on business strength; therefore, the Company's performance andshareholders wealth will certainly be healthier in long-term.

Best Regards,

Vicha PoolvaraluckExecutive Chairman

Message from Executive Chairman

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I have a great opportunity to join Major Cineplex Group PLC as chief executive officersince the beginning of 2006. By applying technology to management and operation, I expect tofirmly grow the Company, creating innovative services and marketing campaigns as well as accen-tuating its leadership of the world class total entertainment center.

More importantly, by applying technology to create productivity in asset management, theCompany aims to secure greater cashflow, increased customers' satisfaction and establish a higherbenchmark for the entire Thai film industry.

I expect Major Cineplex Group PLC to be the Company with good management, excellenttechnology that translates to higher customers' satisfaction and return to all shareholders. Our goalis to be a leader in an entertainment industry and world class in total entertainment.

Best Regards,

Kittsanan NgamphathipongChief Executive Officer

Message from Chief Executive Officer

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ContentDirectors and management teamDirectors and management teamDirectors and management teamDirectors and management teamDirectors and management team 16Organization chartOrganization chartOrganization chartOrganization chartOrganization chart 28Group structureGroup structureGroup structureGroup structureGroup structure 30General information of the Company, subsidiaries and associated companies 32Business characteristicsBusiness characteristicsBusiness characteristicsBusiness characteristicsBusiness characteristics 35Cinema businessBowling and karaoke businessAdvertising businessRental space and services businessFilm distribution businessRisk factorsRisk factorsRisk factorsRisk factorsRisk factors 45Corporate governanceCorporate governanceCorporate governanceCorporate governanceCorporate governance 35Corporate governanceInternal information controlManagement structureManagement and staff remunerationEmployee stock option planRelated transactionsMajor shareholdersSocial activiteisReport from Board of directors and management teamReport from Board of directors and management teamReport from Board of directors and management teamReport from Board of directors and management teamReport from Board of directors and management team 67Management discussion and analysisAudit committee reportResponsibility statement from Board of directors to financial statementFinancial statementFinancial statementFinancial statementFinancial statementFinancial statement 71Certified auditor reportBalance sheetProfit and loss statementStatement of changes in shareholder's equityCashflow statementNotes to financial statementReferenceReferenceReferenceReferenceReference 116

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Directors and Management team

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01 03 04 05

13 14 15

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Directors and Management team11 12

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1. Mr.Somchainuk Engtrakul2. Mr.Vicha Poolvaraluck3. Mr.Kittsanan Ngamphathipong4. Mr. Thanakorn Puliwekin5. Mr.Verawat Ongvasith6. Mrs. Paradee Poolvaraluck7. Dr.Vachara Phannachet8. Mr.Wichai Poolworaluk9. Mr.Chai Jroongtanapibarn10. Mr.Wallop Tangtrongchitr11. Mr. Hester Chew12. Mr. Brian Hall13. Mr. Anavach Ongvasith14. Artorn Techatantiwong15. Mrs.Jinda Wantanahatai16. Mrs.Aorravan Kowathana17. Mr.Jiradej Nusthit18. Mr. Sermsak Khwanpuang19. Mr. Chattaphum Khantiviriya

06 07 08 09

191716 18

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Directors and Management

Age 61Shareholding (%) -Relationship with Management -Education Ph.D (Honorary Degree) in Public Administration, Sripathum University Bachelor Degree of Law , Sripathum University Bachelor Degree of Art (Economics) , UPSALA COLEGE NEW JERSEY, USAExperience (Last 3 positions)Period Title Company Name1. Oct 2004 - Present Chairman Major Cineplex Group PLC.2. 2000 - 2004 Permanent Secretary Ministry of Finance3. 1997 - 2000 Director - General The Customs Department, Minis

try of Finance4. 1996 - 1997 Director - General The Excise Department, Ministry

of FinanceOther positionsTitle Company Name1. Vice Minister Office of the Prime Minister2. Chairman Thai Military Bank PLC.3. Chairman Dhipaya Insurance PLC.

Mr.Somchainuk EngtrakulChairman of the Board

Mr.Vicha PoolvaraluckDirector and Chairman

Age 42Shareholding (%) 45.5%Relationship with Management -Education Master Degree of Business Administration , United States International Univer- sity of Sandiego,USA Bachelor Degree of Business Administration , Chulalongkorn UniversityExperience (Last 3 positions)Period Title Company Name1. 1995 - Present Chairman Major Cineplex Group PLC.2. 2003 - Present Director Siam Future Development PLC.3. 2003 - Present Director California WOW Xperience PLC.Other positionsTitle Company Name1. Director Listed Companies Association2. Director Member Activities Chulalongkorn University Alumni Association

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Mr. Thanakorn PuliwekinDirector and Chief FilmsProgramming & BusinessRelations

Mr.Kittsanan NgamphathipongDirector & Chief ExecutiveOfficer

Age 46Shareholding (%) -Relationship with Management -Education Master Degree of Business Administration , Chulalongkorn University Master Degree of Business Administration , University of Thai Chamber of Commerce Bachelor Degree of Business Administration , Chulalongkorn UniversityExperience (Last 3 positions)Period Title Company Name1. December 2002 - April 2005 "Executive Vice President,

Marketing & CorporateStrategic Planning Advance Info Service PLC

2. March 2002 Executive Vice President,Strategic Planning Advance Info Service PLC

3. 1994 - 2002 Managing Director &Country Manager AreaManager forSouth East Asia Nokia (Thailand) Co.,Ltd

4. 1992 - 1993 Senior Business Director Samart Corporation PLC

Age 48Shareholding (%) 0.07%Relationship with Management -Education Master Degree of Business Administration , United State International University ,USA Bachelor Degree of Business Administration, Bangkok UniversityExperience (Last 3 positions)Period Title Company Name1995 - current Director / Chief Films

Programming & Business Relations Major Cineplex Group PLC

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Mr.Verawat OngvasithDirector and ExecutiveDirector

Mrs. Paradee PoolvaraluckDirector and ExecutiveDirector

Age 35Shareholding (%)* 3.2%Relationship with Management Younger brother of the Chairman's spousEducation Master Degree of Business Administration , Boston University USA Bachelor Degree of Business Administration , Chulalongkorn UniversityExperience (Last 3 positions)Period Title Company Name1. 2002 - Present Director /

Executive Director Major Cineplex Group PLC.

2. 2003 - PresentDirector Siam Future Development PLC.3. 2003 - PresentDirector California WOW Xperience PLC.

*Includes holding by spouse and children

Age 42Shareholding (%) 4.13%Relationship with Management Chief Executive Officer 's spouseEducation Master Degree of Business Administration, United States International University of Sandiego, USA Bachelor Degree of Business Administration, Chulalongkorn UniversityExperience (Last 3 positions)Period Title Company Name1998 - Current Director /

Executive Director Major Cineplex Group PLC.

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Dr.Vachara PhannachetDirector

Mr.Wichai PoolworalukDirector

Age 45Shareholding (%) -Relationship with Management -Education Doctorate Degree of Business Administration, Pacific Western University, USA Master Degree of Business Administration, Miami University, USA Bachelor Degree of Mechnical Engineering, Chulalongkorn UniversityExperience (Last 3 positions)Period Title Company Name1. 2004 - Present Director Major Cineplex Group PLC.2. Mar-Oct 2003 Vice Minister Office of the Prime Minister3. 2002 - 2003 Strategic Investment Consultant Ministry of Industry4. 2001 - 2003 Director Office of the Board of InvestmentOther positionsTitle Company Name1. Vice Minister Ministry of Health2. Chairman of the Board German Auto Co.,Ltd.3. Chief Executive Officer Wanmani Group Co.,Ltd.4. Chairman of the Board Sittipol Sales Group Co.,Ltd.

Age 44Shareholding (%) -Relationship with Management Cousin of ChaimanEducation Bachelor Degree of Econimics , Thammasat University Marketing Management Program , Chulalongkorn University Mini Master of Business Administration Programme, Chulalongkorn UniversityExperience (Last 3 positions)Period Title Company Name1 2005 - Present Director Major Cineplex Group PLC.2 2003 - 2004 Chief Executive Officer EGV Entertainment PLC.3 2002 - 2004 Chairman EGV Entertainment PLC.Other positionsTitle Company Name1. President Thai Investors Associate

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Mr.Wallop TangtrongchitrIndependent Director andAudit Committee

Mr.Chai JroongtanapibarnIndependent Director &Chairman of AuditCommittee

Age 51Shareholding (%) -Relationship with Management -Education Master Degree of Science Accounting , Thammasart University Bachelor Degree of Accounting , Chulalongkorn UniversityExperience (Last 3 positions)Period Title Company Name1. 2002 - Present Independent Director & Major Cineplex Group PLC.

Chairman of Audit committee2. 1980 - 1997 Executive Director &

Chief Finance Officer Minor Food Group PLC.Other positionsTitle Company Name1. Chairman of Audit Committee Team Precision PLC.2. Chairman of Audit Committee Thai Metal Trade PLC.3. Director Siam Future Development PLC.4. Audit Committee 124 Communications PLC.5. Audit Committee Sahathai Steel Pipe PLC.

Age 54Shareholding (%) -Relationship with Management -Education Master Degree of Business Administration , Chapman University , USA Bachelor Degree of Business Administration, Sandiego University , USAExperience (Last 3 positions)Period Title Company Name1. 2002 - PresentIndependent Director /

Audit Committee Major Cineplex Group PLC.2. 1995 - 1997 Co-Ordinator Regency Co.,Ltd.3. 1983 - 1995 Manager Wellcom Co.,Ltd.4. 520 - 2526 Project Co-Ordinator Viwat Construction Ltd.Other positionsTitle Company Name1. Managing Director Potara Co.,Ltd

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Mr. Brian HallChief Cinema BusinessParagon Cineplex

Mr. Hester ChewIndependent Director andAudit Committee

Age 44Shareholding (%) -Relationship with Management -Education Executive Program, Michigan Business School, University of Michigan, Ann ArborExperience (Last 3 positions)Period Title Company Name1. 1998 PresentIndependent

Director/Audit Committee Major Cineplex Group PLC.2. 2003 Present Managing

Partner HC & A Consultancy Pte Ltd.3. 2002 - 2003 CEO Delifrance Asia4. 1987 - 2002 MD KFC & PH

- Thailand/ Singapore/ IndochinaOther positionsTitle Company Name1.Consultant Oishi Group PLC.

Age 43Shareholding (%) -Relationship with Management -Education Bachelor Degree of Communication, Queen's University Kingston , CanadaExperience (Last 3 positions)Period Title Company Name1. 2004 Current Chief Cinema

Business Paragon CineplexMajor Cineplex Group PLC2. 2000 - 2003 Sr. Vice President Theatre Operations Imax

Corporation Ltd., USA"3. 1997 - 2000 Managing Director/ CEO Cinema Plus Ltd., Sydney, Australia

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Mr. Anavach OngvasithChief Cinema BusinessMajor & EGV / Media Sales

Mr. Artorn TechatantiwongChief Bowling Business /Head of Sales

Age 38Shareholding (%) 0.01%Relationship with Management Cousin of the Chairman's spouseEducation Master Degree of International business, Boston University USA Bachelor Degree of Business Administration, Assumption UniversityExperience (Last 3 positions)Period Title Company Name1. Present Chief Cinema Business Major & EGV / Media Sales

Major Cineplex Group PLC.2. 1997 - 2005 Chief Marketing Officer Major Cineplex Group PLC.3. 1992 - 1996 Marketing Manager Siam Retail Development Ltd.

Age 36Shareholding (%) -Relationship with Management -Education Master Degree of Business Administration, Assumption University Bachelor Degree of Business Administration, Assumption UniversityExperience (Last 3 positions)Period Title Company Name1. Sep. 1996 - May 2005 Marketing Manager Advanced Info Service PCL. (AIS)2. Aug. 1992 - Aug. 1995 Sales Manager Chevalier OA (Thailand) Ltd.3. Jun. 1991- Jul. 1992 Assistant Export Manager Satien Stainless Steel Co.,Ltd.

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Mrs.Aorravan KowathanaChief Service Operations

Mrs.Jinda WantanahataiChief Retails Business

Age 43Shareholding (%) -Relationship with Management -Education Bachelor Degree of Arts, Chandrakasem Rajabhat UniversityExperience (Last 3 positions)Period Title Company Name1. 1993 - 1995 Marketing Manager The Mall Group Co.Ltd2. 1990 - 1992 Marketing Manager AG Wilkinson Property3. 1982 - 1989 Marketing Manager Dynasty Agency

Age 41Shareholding (%) -Relationship with Management -Education Bachelor Degree of Business Administration, Assumption UniversityExperience (Last 3 positions)Period Title Company Name1. 2004 - 2005 Senior Human Resource

and Training Manager McThai Co.,Ltd2. 2001 - 2004 Quality Assurance and

Menu DevelopmentManager McThai Co.,Ltd

3. 1994 - 2001 Training Manager McThai Co.,Ltd

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Mr. Sermsak KhwanpuangChief Portfolio Management

Mr. Jiradej NusthitChief Corporate Strategy &Investor Relations


Age 37Shareholding (%) -Relationship with Management -Education Master Degree of Business Administration , United States International University of Sandiego,USA Bachelor Degree, Computer Science, University of California - San Diego, La JollaExperience (Last 3 positions)Period Title Company Name1. Jan 2003 - Aug 2005 Manager - Strategic Planning Advanced Info Service Plc.2. Feb 2002 - Dec 2002 Specialist - Corporate Planning Advanced Info Service Plc.3. Dec 1999 - Jan 2002 Specialist - Investor Relations Shin Corporation Plc.

Age 46Shareholding (%) -Relationship with Management -Education Master Degree of Economics, National Institure of Development Administration (NIDA) Bachelor Degree of Economics, Chiengmai UniversityExperience (Last 3 positions)Period Title Company Name1. 2002 - 2005 Director and Chief Financial Officer EGV Entertainment Public Co.,Ltd.2. 1997 - 2002 Director and General Manager Surapon Foods Public Co.,Ltd.3. 1996 - 1997 Asistant Managing Director Supalai Public Co.,Ltd.Other positionsTitle Company Name1. Director EGV Entertainment Public Co.,Ltd.2. Director M Pictures Co.,Ltd.3. Director Pacific Marketing and Entertainment Group Co.,Ltd.

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Mr. Chattaphum KhantiviriyaChief Financial Officer

Age 44Shareholding (%) 0.05%Relationship with Management -Education Master Degree of Business Administration, Kasetsart University Bachelor Degree of Accounting, Chulalongkorn UniversityExperience (Last 3 positions)Period Title Company Name1. 1998 - current Chief Finance Officer Major Cineplex Group PLC

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Organization Chart

Chairman of the BoardChairman of the BoardChairman of the BoardChairman of the BoardChairman of the Board

ChiefFilmsProgramming& BusinessRelations

ChiefCinemaBusinessParagonCineplex

ChiefCinemaBusinessMajor & EGV

ChiefMedia Sales

ChiefBowlingBusiness

Head ofSales

ChiefRetailsBusiness

ΩÉ“¬µ√«®„

ChairmanChairmanChairmanChairmanChairman

Chief Executive OfficerChief Executive OfficerChief Executive OfficerChief Executive OfficerChief Executive Officer

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Chairman of the Audit Committee Chairman of the Audit Committee Chairman of the Audit Committee Chairman of the Audit Committee Chairman of the Audit Committee

ChiefServiceOperations

ChiefCorporateStrategy &InvestorRelations

ChiefPortfolioManagement

D i r e c t o r -ConstructionProject Man-agement

Director-RetailsService

Finance&Accounting

DirectorHumanResources

Director-OrganizationDevelopment

Admin& Purchasing

D i r e c t o r-Project De-velopment

I n t e r n a lAudit

ChiefPortfolioManagement

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California Wow Aperience PLC.36.75%

I - major Co.,ltd.50% Major On-line Co,.ltd.

40.00%

Siam Future Development PLC.26.43 %

Group structure

MAJOR CINEPLEX GROUPMAJOR CINEPLEX GROUPMAJOR CINEPLEX GROUPMAJOR CINEPLEX GROUPMAJOR CINEPLEX GROUPPUBLIC COMPANY LIMITEDPUBLIC COMPANY LIMITEDPUBLIC COMPANY LIMITEDPUBLIC COMPANY LIMITEDPUBLIC COMPANY LIMITED

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Major Bowl Co.,ltd.99%

Chieng MaiCineplex Co.,ltd.

99.99%

TheatreTheatreTheatreTheatreTheatreBusinessBusinessBusinessBusinessBusiness

Udon Five StarCineplex80.0%

Bangkok ImaxTheatre Co.,ltd.

99.93%

Bangkok ImaxTheatre Co.,ltd.

99.99%

Siam cineplex Co.,ltd.100%

EGV EntertainmentPLC.

99.98%

Major CIneplexProperty Co.,ltd.

99.99%

Major CIneplexService Co.,ltd.

99.99%

Ratchayotin RealtyCo.,ltd.99.99%

RatchayothinManagement Co.,ltd.

99.99%

Major Cinead Co.,ltd.99.93% Pacific Marketing &

EntertainmentGroup Co.,ltd.

80%

M picture Co.,ltd.80%

Bowling & KaraokeBowling & KaraokeBowling & KaraokeBowling & KaraokeBowling & KaraokeBusinessBusinessBusinessBusinessBusiness

Rental & ServiceRental & ServiceRental & ServiceRental & ServiceRental & ServiceBusinessBusinessBusinessBusinessBusiness

AdvertisingAdvertisingAdvertisingAdvertisingAdvertisingBusinessBusinessBusinessBusinessBusiness

DistributionDistributionDistributionDistributionDistributionBusinessBusinessBusinessBusinessBusiness

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Major Cineplex Group PLC.Major Cineplex Group PLC.Major Cineplex Group PLC.Major Cineplex Group PLC.Major Cineplex Group PLC.Registration no. 4085400677Head office 11839 Phaholyothin Rd.,

Ladyao, Jatuchak, Bangkok10900

Nature of business Cinema & EntertainmentComplex operator, concessionvendor

Registered capital 897,000,000Paid up capital 709,323,903% of investment 100.00%

Chiang Mai Cineplex Co.,Ltd.Chiang Mai Cineplex Co.,Ltd.Chiang Mai Cineplex Co.,Ltd.Chiang Mai Cineplex Co.,Ltd.Chiang Mai Cineplex Co.,Ltd.Registration no. (2)1502/2543Head office 1839 ∂Phaholyothin Rd.,


Nature of business Cinema operator, rental andservices business, concessionvendor


Udon Five Star Cineplex Co.,Ltd.Udon Five Star Cineplex Co.,Ltd.Udon Five Star Cineplex Co.,Ltd.Udon Five Star Cineplex Co.,Ltd.Udon Five Star Cineplex Co.,Ltd.Registration no. 10554601114Head office 1839Phaholyothin Rd.,


Nature of business Cinema operatorRegistered capital 39,000,000Paid up capital 39,000,000% of investment 80.00%

Bangkok Imax Theatre Co.,Ltd.Bangkok Imax Theatre Co.,Ltd.Bangkok Imax Theatre Co.,Ltd.Bangkok Imax Theatre Co.,Ltd.Bangkok Imax Theatre Co.,Ltd.Registration no. ( 2 ) 51/2544Head office 1839 Phaholyothin Rd.,


Nature of business Cinema operator, concessionvendor


Theatre Business

Ratchayothin Cinema Co.,Ltd.Ratchayothin Cinema Co.,Ltd.Ratchayothin Cinema Co.,Ltd.Ratchayothin Cinema Co.,Ltd.Ratchayothin Cinema Co.,Ltd.Registration no. ( 4 ) 589/2541Head office 1839 Phaholyothin Rd.,




Siam Cineplex Co.,Ltd.Siam Cineplex Co.,Ltd.Siam Cineplex Co.,Ltd.Siam Cineplex Co.,Ltd.Siam Cineplex Co.,Ltd.Registration no. 0108254 704840Head office 1839 Phaholyothin Rd.,




EGV Entertainment PLC.Registration no. 40854500695Head office 989 Rama I Rd., Patumwan,

Bangkok 10330Nature of business Cinema & Entertainment

Complex operator, concessionvendor


General Informations of the company,General Informations of the company,General Informations of the company,General Informations of the company,General Informations of the company,subsidiaries and associated companiessubsidiaries and associated companiessubsidiaries and associated companiessubsidiaries and associated companiessubsidiaries and associated companies

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Major Bowl Group Co.,Ltd.Major Bowl Group Co.,Ltd.Major Bowl Group Co.,Ltd.Major Bowl Group Co.,Ltd.Major Bowl Group Co.,Ltd.Registration no. ( 4 ) 590/2541( Ratchayothin Bowl Co.,Ltd. ) 1839Phaholyothin Rd.,


Nature of business Bowling alley operator,concession vendor


Bowling BusinessBowling BusinessBowling BusinessBowling BusinessBowling Business

Major Cineplex Property Co.,Ltd.Major Cineplex Property Co.,Ltd.Major Cineplex Property Co.,Ltd.Major Cineplex Property Co.,Ltd.Major Cineplex Property Co.,Ltd.Registration no ( 2 ) 2930/2537Head office 1221/39 Sukkhumvit Rd.,

North Klongton, Wattana,Bangkok

Nature of business Rental and services businessRegistered capital 78,000,000Paid up capital 78,000,000% of investment 99.99%

Major Cineplex Service Co.,Ltd.Major Cineplex Service Co.,Ltd.Major Cineplex Service Co.,Ltd.Major Cineplex Service Co.,Ltd.Major Cineplex Service Co.,Ltd.Registration no ( 4 ) 307/2540Head office 1221/39 Sukkhumvit Rd.,

North Klongton, Wattana,Bangkok

Nature of business Rental and services business∑ÿπ®¥∑–‡∫’¬π 23,000,000Registered capital 23,000,000Paid up capital 99.99%

Rental and Services BusinessRental and Services BusinessRental and Services BusinessRental and Services BusinessRental and Services Business

Ratchayothin Realty Co.,Ltd.Ratchayothin Realty Co.,Ltd.Ratchayothin Realty Co.,Ltd.Ratchayothin Realty Co.,Ltd.Ratchayothin Realty Co.,Ltd.Registration no. ( 1 ) 2123/2539Head office 1839 Phaholyothin Rd.,



Ratchayothin Management Co.,Ltd.Registration no. ( 4 ) 306/2540Head office 1839 Phaholyothin Rd.,



Major Cinead Co.,Ltd.Registration no. °∑05-0289-44Head office 1839 Phaholyothin Rd.,


Nature of business Advertising agencyRegistered capital 1,000,000Paid up capital 1,000,000% of investment 99.93%

Advertising BusinessAdvertising BusinessAdvertising BusinessAdvertising BusinessAdvertising Business

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Pacific Marketing & Entertainment Group Inc.Pacific Marketing & Entertainment Group Inc.Pacific Marketing & Entertainment Group Inc.Pacific Marketing & Entertainment Group Inc.Pacific Marketing & Entertainment Group Inc.Registration no. 10854500976Head office 5th floor 598 Q.House

Building, Ploenchit, Lumpini,Patumwan Bangkok

Nature of business Films Licensee fordistributions


Distribution BusinessDistribution BusinessDistribution BusinessDistribution BusinessDistribution Business

California Wow Xperience PLC.California Wow Xperience PLC.California Wow Xperience PLC.California Wow Xperience PLC.California Wow Xperience PLC.Registration no. 01075 74700895Head office 287 Liberty Square Building,

Silom, Bangrak, BangkokNature of business Fitness club operatorRegistered capital 200,000,000Paid up capital 200,000,000% of investment 36.75%

Siam Future Development PLC.Siam Future Development PLC.Siam Future Development PLC.Siam Future Development PLC.Siam Future Development PLC.Registration no. 40854500691Head office 7/5 Ramkumhang Rd.,

Sapansoong, BangkokNature of business Neighborhood shopping mall

developer, rental and servicesbusiness


I - Major Co.,LtdI - Major Co.,LtdI - Major Co.,LtdI - Major Co.,LtdI - Major Co.,LtdRegistration no. 127354 706569Head office 24th Floor 99/12 Software

Park Building, ChangwatanaRd., Nontaburi

Nature of business Information and ticketservices thru mobile phone


Strategic InvestmentStrategic InvestmentStrategic InvestmentStrategic InvestmentStrategic Investment

Major On-line Co.,Ltd.Registration no. 08454822762Head office 1839 Paholyothin Rd.,Jatujak,

Bankok 10900Nature of business Computer system and

software counsellingRegistered capital 1,000,000Paid up capital 1,000,000% of investment 40.00%

l Major Cinepictures Co.,LtdMajor Cinepictures Co.,LtdMajor Cinepictures Co.,LtdMajor Cinepictures Co.,LtdMajor Cinepictures Co.,LtdRegistration no. 105548154744Head office 8 SCB Park Plaza(Nontanund Entertainment Co.,Ltd.) Ratchadapisek Rd., Jatujak,

BangkokNature of business Films Licensee for

distributionsRegistered capital 100,000,000Paid up capital 100,000,000% of investment 80.00%

General Informations of the company,General Informations of the company,General Informations of the company,General Informations of the company,General Informations of the company,subsidiaries and associated companiessubsidiaries and associated companiessubsidiaries and associated companiessubsidiaries and associated companiessubsidiaries and associated companies

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Business Characteristics

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With vision and experience in cinema busi-ness, Major Cineplex Group PLC has solidly grownto be the leader in Thailand's cinema business.The Company still emphasizes and refines to be"The World's best cinema and entertainment com-plex". The Company's business are categorizedas follows:

1. Cinema business

2. Bowling and Karaoke business

3. Advertising media business

4. Rental and Services business

5. Films Distribution business

Business Characteristics

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Cinema Business

The Company owns and operates multiplex cin-ema, which serve at least 4 screens per complex to showmany films released at the same time. As well, multiplexcinemas are able to offer various choices of films to sat-isfy customers. The Company's theatre is furnished in amodern luxurious interior concept, which differs by com-plex. Also, the Company offers various seating styles withdifferent pricing. The Company installs megascreen whichhas a width full of cinema's width, providing the audiencefrom any location an unobstructed view. The modern soundtechnology system in All Digital Sound SDDS, DTS, SRD,Dolby Digital Surround EX and JBL 3 ways is also themain principle of services of the Company.

Presently, the Company has a total of 30 branches,of which 19 branches serving 162 screens and 39,900seats are Major Cineplex including 600 seats of an IMAXtheatre at Ratchayothin branch. Another 11 branches serving96 screens and 19,600 seats are under EGV brand. Theater'sdetails are as followed:

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Branch under Major Cineplex Number of Screens Number of Seats1. Sukumvit 8 1,8002. Ratchayothin 15 4,1003. Rangsit 16 3,5004. Ramkamhang 7 2,1005. Central World Plaza 6 1,3006. Chiangmaià 7 2,0007. Pinklao 13 4,2008. Rama III 9 2,6009. Bangna 10 2,00010. Bangkapi 10 2,30011. Seri Center 6 1,00012. Rama II 9 1,80013. Nakornsawan 5 1,10014. Udornthani 7 2,00015. Nontaburi 7 1,40016. Chachoengsao 5 1,70017. Fashion Island 11 2,40018. Ubonratchathani 5 80019. Petchkasem 6 1,800Total 162 39,900

Branch under EGV Number of Screens Number of Seats

1. Bangkae 10 1,9002. Seacon Square 14 2,9003. Rangsit 10 1,8004. Lardprao 7 1,5005. Pinklao 14 2,5006. Sriracha 4 1,3007. Siam Discovery 7 1,6008. Kora 6 2,2009. Samrong 6 1,10010. Ratchdamri 13 1,60011. Orm-Yai 5 1,200Total 96 19,600

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The Company remains good relationshipwill all film distributors and continues to share ticketrevenues with film distributors in a proportion of48% to 50% upon film popularity. In 2005, 185films were screened in Major Cineplex from a totalof 384 films screened in Thailand. On average, theCompany released 7-8 new films a week. With notenough screens to serve all films, Major Cineplexhas to screen only good quality films of only 185or 48% of total released films in Thailand.

With the goal of becoming a world class cin-ema operator, Major Cineplex continuously ensuresit remains professionally competitive with variousmarketing strategies to promote sales and satisfycustomers. As a result, the Company has a widerange of customers from teenagers, adults, retiredage and family. Also, the Company has improved itsdistribution channels.

The Thai film industry has continuously grownfrom investment and support by many partners. Thevalue of Thai film industry in 2005 was approxi-mately 3,800 million baht with 28 million viewers.

The competition in the cinema industry still re-mains in multiplex system with an improvement intechnology and sound system as well as location'sdesign and services to match with customers' taste.The Company believes that expansion opportunityin upcountry especially neighboring cities is high asconsumers have excessive purchasing power butlack modern entertainment venues.

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Bowling and Karaoke business

With marketing strategy tooffer various services un-der the concept "The to-tal lifestyle entertainmentcomplex", "Major BowlHit" is not merely sportactivity but adopts bowl-ing equipment in a bou-tique bowl atmosphere. Toadd more entertainmentrange for customers, theCompany provideskaraoke " Hit TrackKaraoke" where perfectlyfit with bowling custom-ers. The Company alsoserves food, beveragesand tournaments. Pres-ently, the Company has atotal of 18 Major Bowl Hitbranches as followed.

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Bowling Branches Numbers of bowling lanes Numbers of karaoke rooms

1. Sukumvit 20 10 2. Ratchayothin 38 35 3. World Trade Center 28 18 4. Rangsit 26 20 5. Seri Center 12 9 6. Rama II 30 13 7. Rama III 34 11 8. Nakornsawan 12 9 9. Udornthani 16 910. Thonglor 8 1111. Chachoengsao 12 712. Bangkapi 16 613. Bangna 18 1514. Pinklao 20 1515. Piyarom 30 -16. Fashion Island 16 1317. Petchkasem 12 918. Orm-Yai 12 12Total 360 222

Bowling and karaoke business is an enter-tainment that has grown continually. Presently, thereare 2 major players who operate more than 5branches in the industry. The competition in theindustry mainly focuses on service and promotion.Several constraints in the bowling business suchas large space required plus capital intensive limitnew entrants into the industry. Presently, the Com-pany is a leader with the highest number of alleysand lanes.

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Advertising media business

Screen advertising is an efficient channel due to its penetration todirect targets more than other media. "Major Cinead Co.,Ltd", a sub-sidiary of the Company operates advertising media in Major Cineplexcomplex; for instance, movie screen, VDO screen and TV screen atconcession counters, restrooms and parking, tri-fold billboard, websitewww.majorcineplex.com, "Tick a seat" magazine and outdoor media.

In 2005, advertising through theatre has a growth rate of 28%from last year to a worth of 1,705 million baht whilst total industryexpanded only 5.7% to a value of 88,931 million baht. The Companyhas the greatest share in the cinema advertising business of roughly70%-80% owing to a number of admissions in 2005 of over 20million.

The competitive trends in cinema advertising are among screenexpansion as well as cinema improvement to attract attendance.However, the Company is a total lifestyle entertainment complex,offering various products and services for entertainments and rentalspaces for marketing events. Therefore, the Company has gainedrecognition above competitors, increasing its competitive advantage.

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The Company operates rental and services business withinMajor Cineplex's complex to fulfill and offer various services forcustomers. The Company selects trendy shops that offer dis-tinctive products and services which match with customers'lifestyle. Rental spaces has 2 types of contracts - a long termwhich is more than 3 years and short term which is less than 3years accounted for 36.4% and 63.6%, respectively. Presently,the Company has a total of 237 shops occupying 100% of the27,320 sq.m available for rent. Services accompanied spacerental are electricity, cooler, fire system, cleaning and securitysystem as well as common area services such as elevator,escalator and parking.

With experiences and distinction from competitors, the Company attracts various tenants to expand alongwith its new branches' expansion, resulting full occupancy rate in every location. Since prime rental retail spaces inshopping centers continue to be scarce particularly in community areas, the Company has invested in Siam FutureDevelopment PLC, a neighborhood shopping mall development and management company. With its experiences andexpertise along with its anchor tenants, Siam Future Development PLC will be an expansion vehicle for the Company.

Major Cineplex branch Rental space (sq.m) Number of shops Occupancy rate (%) 1. Sukumvit 3,900 20 96 2. Ratchayothin 10,000 53 81 3. Ramkamhang 450 6 83 4. Central World Plaza 1,000 10 100 5. Chiangmai 100 2 100 6. Rangsit 3,800 33 95 7. Bangkapi 330 7 86 8. Rama II 500 7 100 9. Nakornsawan 190 3 7710. Udornthani 350 1 100Total 20,620 142 88

EGV branch Rental space (sq.m) Number of shops Occupancy rate (%)1. Metropolis 5,400 67 462. Siam Discovery 380 17 873. Rangsit 540 7 914. Orm-Yai 380 4 100Total 6,700 95 55

Rental and Servicesbusiness

44

Films Distribution business

Films distribution business can be pro-vided into 2 sections: films distribution totheatre and films distribution to home en-tertainment such as VCD and DVD. TheCompany operates under Pacific Market-ing and Entertainment Group Inc and Mpictures Co.,Ltd.

High growths in Thai films indus-try were driven by cheaper VCD and DVDplayers, higher purchasing power of con-sumers and higher number of films re-leased each year. Additionally, limited num-ber of screens and only 52 weeks in ayear force a high degree of competition inthe industry not only for prime period butalso for large number of screens to showtheir films.

45

Risk Factors

46

Risk Factors

1.1 Risk from business operations1.1 Risk from business operations1.1 Risk from business operations1.1 Risk from business operations1.1 Risk from business operations

Risk from films releaseRisk from films releaseRisk from films releaseRisk from films releaseRisk from films release

Theatre operators and exhibitor rely on a steadyflow of film releases as a main source of revenue. Approxi-mately, 60% - 70% of the Company's total revenue comesfrom revenue sharing determined by movie ticket saleswhich depend on number of films release and filmspopularity. At present, theatre is the first and most impor-tant distribution window which films producer and distribu-tor rely on in order to boost further sales in homeentertainment market such as VCD and DVD. Accordingly,trade among exhibitor, producer and distributor are highlyinterdependent with the aim of growing together whichlessen risk from films reliance of exhibitor.

Currently, the Company underscores its leader-ship position in the market with a firm market share of over70%. The Company has increased bargaining power withfilm producers and distributors. Moreover, the Company'svertical integration into film distribution businessesdiminishes exhibitor's risk in films reliance fromdistributors.

The Company has a policy to manage potential risks thatmight happen in the business. These can be classified asfollowed:

Risk from competitionRisk from competitionRisk from competitionRisk from competitionRisk from competition

The main competitors in business are VCD andDVD both legal and illegal. We do not view these as maturedthreats to our revenues and growth of the theatre businessas Major Cineplex serves various lifestyle entertainments inthe complex more than just an entertainment from movie.The Thai government has taken a serious stand toeliminate illegal media with strict measures which proveremarkable progress in illegal media reduction.

Regarding competition in theatre business, MajorCineplex is a leader in the industry both in facilities andmodern equipment. The Company has expanded newbranches as well as regularly renovates existing branches.The Company also realizes competition from an expansionby competitors. Therefore, the Company emphases onbuilding and maintaining customer base by introducingconsistently marketing strategy and offering entirely lifestyleentertainments including theatre, bowling and karaoke, retailshops as well as constantly expand new branches to covermore areas. Consequently, Major Cineplex has outstandingcompetition advantage over others.

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Risk from new expansionRisk from new expansionRisk from new expansionRisk from new expansionRisk from new expansion

Any new expansion faces uncertainty on its return oninvestment. However, with previous successful experiences,the Company has on average payback period of 3-4 yearsand an internal rate of return of 15% which is inaccordance with a feasibility study. With businessexpertise and expansion policy which discreetly considerresidential areas and downtown areas where educationalinstitutes and offices are nearby, the Company is confidentof its new branch expansion and growth prospects. TheCompany expects to have at least 38 branches in totalwithin 2006. The capital expenditures are approximately10-12 million baht per a screen and 2 million bath per abowling lane. The Company spots plenty of opportunitiesfor expansion both in and out of Bangkok especially bigcities outside Bangkok where no pleasurable entertainmentcenters and recreational areas are.

Risk from contagious diseaseRisk from contagious diseaseRisk from contagious diseaseRisk from contagious diseaseRisk from contagious disease

With the outbreak of Severe Acute RespiratorySyndrome (SARs) among densely populated areas in Asiasuch as China, Hong Kong and Singapore, the Companyhas taken preemptive closely followed the announcementsmade by the Ministry of Public Health and has measuresby installing air purifiers, distributing masks for customersand spraying antibacterial disinfections in every screens.

Risk from management relianceRisk from management relianceRisk from management relianceRisk from management relianceRisk from management reliance

Major Cineplex has been established andsuccessfully operated by Mr. Vicha Poolvaraluck'smanagement team. The Company is heavily relied onexperience and M reputation of Mr. Vicha Poolvaraluck;therefore, the Company may have risk from the reduction inshareholding and resignation from management of Mr. VichaPoolvaraluck. However, Mr. Vicha Poolvaraluck is a founderand has relationship with Major Cineplex for over adecade. He has strong intention to grow Major Cineplex asa management and majority shareholder.

Risk from fire accidentRisk from fire accidentRisk from fire accidentRisk from fire accidentRisk from fire accident

Every construction has a risk from fire accident.However, the Company has an insurance agreementincluding a fire case pursuant to the nature and generalconditions of theatre business which terms and amountscovers all losses and damages that might be arisen.

1.2 Risk from major shareholder1.2 Risk from major shareholder1.2 Risk from major shareholder1.2 Risk from major shareholder1.2 Risk from major shareholderowns over 50% of total sharesowns over 50% of total sharesowns over 50% of total sharesowns over 50% of total sharesowns over 50% of total shares

As of February 7, 2006 Poolvaraluck group holds50% of total shares of the Company. Therefore, Poolvaraluckgroup led by Mr. Vicha Poolvaraluck is able to controlalmost all resolutions of shareholder meeting includingdirector appointments or other concerns which requiredmajority vote except issues required 3/4 vote. Consequently,other shareholders may not be able to gather votes tomonitor and balance issues proposed by major shareholder.

Considering the Company's management structurewhich includes the Board of directors, Board of executivedirectors and Audit committee, the Company hasorganized management with expertise and established clearand transparent responsibilities. Additionally, managementwho is related or has conflict of interests has no rights tovote on that related or conflict of interest transactions.

49

Good Corporate Governance

50

Good Corporate Governance

The practice of good corporate governance is encouraged at every staff level from Chairman, directors, managementto operation level for an open and unmistakable business to satisfy customers and assure confidence of both domesticand international investors. The Company believes that good corporate governance is a key to achieving all sustainablegoals including wealth of all stakeholders.‚¬∫“¬°“√°”°—∫¥Ÿ·≈°‘®°“√∑’Ë¥’

Corporate Governance PolicyCorporate Governance PolicyCorporate Governance PolicyCorporate Governance PolicyCorporate Governance Policy

The Company sets policy, monitors, controls and con-duct internal audits to manage and control risk, improveoperations and ensure information is communicated effec-tively and efficiently to management. The Management setsthe corporate standards for good corporate governancepractices. Board of directors, down to line staff are respon-sible to the Company and shareholders, and are encour-aged to operate transparently and disclose information forthe maximum benefits of all stakeholders.

Shareholder: Rights and EqualityShareholder: Rights and EqualityShareholder: Rights and EqualityShareholder: Rights and EqualityShareholder: Rights and Equality

The Company has regular shareholder meetings in ac-cordance with rules and regulations. In 2005, the Companyheld an annual ordinary shareholder meeting. The Com-pany notifies all shareholders, at least, 14 days in advanceof all meetings to let shareholders consider ahead of vot-ing. Also, the Company allows shareholders an option totransfer their rights to an independent director to attendthe meeting on behalf of shareholders. The Company recordscomprehensive minutes, transparent information includingfinancial, general and important information that concernthe Company's share price. The Company discloses allinvestor information to the Stock Exchange of Thailandand the Company's website www.majorcineplex.com. TheCompany also has an investor relations department as aninformation center which can be contacted at phone num-ber +662-511-5427-36 extension 893 or at email [email protected]

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Rights of all related parties and Conflicts of interestsRights of all related parties and Conflicts of interestsRights of all related parties and Conflicts of interestsRights of all related parties and Conflicts of interestsRights of all related parties and Conflicts of interests

The Company gives importance to rights of all related parties including setting policy and procedures regulating allrelated transactions so as to prevent conflicts of interests

Shareholder Equally of returns including voting rights in the meetings and and investor: access to timely and complete information of the Company including

financial and other activities. The Company has consistently meets withinvestors both local and foreign, presenting regularly at seminars andexhibitions to disseminate the Company's information.

Supplier: The Company treats all partners as per agreed business terms

Creditor: The Company adheres to all agreed business terms

Customer: The Company pays attention to all customers by placingopinion boxes for customers' comments that the Company willuse to improve operations and services for better satisfaction.

Competitor: The Company has anti-monopoly policy by not exploiting its market leaderposition to take advantage of competitors. The Company believes in competition since it fosters innovation for superior operations and services.

Staff: The Company implements a well-defined human resources developmentplan, encouraging all staff levels to improve their knowledge and skills forbetter services. Also, the Company is an equal opportunity employer adhering to local market and labor laws.

Related Partner: Related partner transactions are done at an arms length basis at commercial terms so as to ensure maximum benefits and transparent operationsboth for community and all related partners under good corporate gover-nance.

Conflicted Partner: The Company has clearly set a policy and procedure to prevent all business conflicts.

Community: The Company has many public activities to develop community such asprovide parking spaces for Bangkok Metropolitan to promote public transportation usage and movie for charities.

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Leadership, Vision and Business EthicsLeadership, Vision and Business EthicsLeadership, Vision and Business EthicsLeadership, Vision and Business EthicsLeadership, Vision and Business Ethics

Our Board of directors are respectable people withknowledge, ethics, expertise, and experiences in variousbusinesses. They have set policy and strategy for theCompany as well as supervised the operation ofmanagement team for better efficiency and maximum wealthfor the Company and shareholders. The Board of directorsalso regularly review and update its corporate governancepolicy. Moreover, the audit committee has assignedinternal control department to arrange operation systemand human resources management for all staff level tokeep on as guidelines for ethical operations.

Balance of non-executive directors and sub-committeeBalance of non-executive directors and sub-committeeBalance of non-executive directors and sub-committeeBalance of non-executive directors and sub-committeeBalance of non-executive directors and sub-committee

The Company's Board of directors consists of 11persons, of whom 2 persons are executives, 4 areexecutive directors and 6 are independent directors of whom3 persons are also on the audit committee. The Companyalso has 5 sub-committees to supervise the operations.Management structure of the Company comprises of theBoard of directors, the Audit committee, Executive board,the Remuneration committee and the Management team.

Conflicts of interestsConflicts of interestsConflicts of interestsConflicts of interestsConflicts of interests

All related transactions between the Company includingall subsidiaries and related parties must be approved bythe audit committee. Using market price and conditions asother suppliers, the Audit committee will consider whetherit is a general business transaction. In case of significantrelated transactions, the Audit committee, the internalcontrol department and the Company's auditor willconsider the transaction as set by the guidelines of theSecurities and Exchange Commission and the StockExchange of Thailand and disclose in the notes to financialstatements, newsletters to SEC and SET. In addition, theBoard of directors requires the disclosure of stockholdingof the Company's directors and management regularly.

Remuneration of directors and managementRemuneration of directors and managementRemuneration of directors and managementRemuneration of directors and managementRemuneration of directors and management

The Board of directors has resolved to appoint theRemuneration committee which consists of 3 persons whowill be in their post for 1 year at a time. The Remunerationcommittee considers total remuneration for directors andmanagement in terms of organization management,performance and invaluable personnel maintenance.

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The Board of directors' meetingThe Board of directors' meetingThe Board of directors' meetingThe Board of directors' meetingThe Board of directors' meeting

The Company meets, at least, once every 3 months. In 2005, the Company held 7 Board of directors' meeting. Detailsof director's meeting attendance are as followed:

Director Title Attendance/Meetings (times)

1. Mr. Somchainuk Engtrakul Chairman 7/7 2. Mr. Vicha Poolvaraluck Director 7/7

3. Mr. Verawat Ongvasith Director 6/7 4. Mrs. Paradee Poolvaraluck Director 7/7 5. Mr. Thanakorn Puliwekin Director 6/7 6. Mr. Brian Hall Director 7/7 7. Dr. Vachara Phannachet Director 4/7 8. Mr. Wichai Poolvaraluck Director 4/7 9. Mr. Chai Jroongtanapibarn Independent director 7/710. Mr. Wallop Tangtrongjitr Independent director 7/711. Mr. Hester Chew Independent director 5/7

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Internal Information Control

The Company has policy and methodology for management in using internal information of the Company for personalbenefit according to good corporate governance principle as followed

1. The Company has acknowledged at all levels of management regarding their duty in reporting their holdings in theCompany shares including their spouse and children as well as the changing in their holdings to the Securities andExchange Commission according to section 59 and penalty section 275 of Securities and Exchange Commission Act B.E2535 and regulations of the Stock Exchange of Thailand.

2. The Company has set regulations for all staff regarding revealing or using the Company's confidential informationas well as restricting the use of the Company's information and misusing title or information which received duringworking in the Company for personal benefits or lessen the Company's benefits. The Company will use the highestpenalty if management use internal information or incline to damage the Company.

3. The Company has policy for directors and management not to use internal confidential information of the Companyfor personal benefits including trading on the Company's shares. Directors, management and staff in related departmentshould avoid or pause trading the Company's shares within a month before announcing financial statement.

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Management Structure

Management structure of the Company consists of 5 teams: the Board of directors, Audit committee, ExecutiveBoard, Remuneration committee and Management team. To comply with good corporate governance, the Company has11 experienced and knowledgeable directors, of whom 5 are non-executive directors and 3 out of 5 are independentdirectors. Roles and responsibilities of 5 committees are as followed:

1. Board of directors1. Board of directors1. Board of directors1. Board of directors1. Board of directors

At the end of 2005, the Company has 11 directors onboard who are

Mr. Somchainuk Engtrakul Chairman

Mr. Vicha Poolvaraluck Director

Mr. Verawat Ongvasith Director

Mrs. Paradee Poolvaraluck Director

Mr. Vachara Phannachet Director

Mr. Thanakorn Puliwekin Director

Mr. Wichai Poolvaraluck Director

Mr. Brian Hall * Director

Mr. Chai Jroongtanapibarn Independent Director

Mr. Wallop Tangtrongchitr Independent Director

Mr. Hester Chew Independent Director

* Mr. Brian Hall has resigned from a director position since December31, 2005. In accordance with the Board of directors' resolution no. 7/2005,Mr. Kittsanan Ngamphathipong is a director since January 1, 2006.

Roles and Responsibilities of Board of directorsRoles and Responsibilities of Board of directorsRoles and Responsibilities of Board of directorsRoles and Responsibilities of Board of directorsRoles and Responsibilities of Board of directors

1. The Board of directors must perform with knowl-edge, expertise and experience for the benefits of the Com-pany in accordance with laws, objectives and regulationsof the Company and shareholders' resolutions. The Boardof directors must perform with honesty, ethics and care forthe benefits of the Company and appoint directors to beexecutive directors to manage all matters of the Companyexcept the following which must be approved by theshareholder's meeting.

a) Matters needed by laws to have shareholders' reso lutions

b) Matters related to directors which needed by laws orrules of the Stock Exchange of Thailand to have shareholders' resolutionsDirectors who are related to or have conflicts of interests must not vote for that related or conflicts ofinterest transactions.

c)Sell or transfer major parts or all business of theCompany

d) Buy or transfer other company's business to theCompany

e) Enter, amend or cancel agreements to lease some orall business of the Company to others. Appoint others to manage the Company's business or unite business with others with an objective to share returns.

f) Amend the Company's memorandum of associationor the Company's regulations

g)Increase or decrease capital, issue bond, merge orcancel the Company

2. The Board of directors are responsible for settingpolicy and strategy of the Company and monitoring andensuring that management effectively and efficiently obtainthe highest economic value and wealth to the Companyand shareholders

3. The Board of directors are responsible for monitoringthe management to follow the policy effectively and notifyall important matters to business of the Company, relatedtransactions to the Board of directors in accordance withrules and regulations of Securities and Exchange Commis-sion

4. The Board of directors are responsible for arrangingall internal control and audit systems by appointing com-pliance to monitor and audit s and coordinate with auditcommittee

5. The Board of directors must be honest and ethical inmanaging business, truly interest in business of the Com-pany and willingly to continually manage the Company

6. The Board of directors must be responsible to share-holders persistently, manage by considering shareholder'sbenefits and disclose information to shareholders conciselyand transparently

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2. Audit Committee2. Audit Committee2. Audit Committee2. Audit Committee2. Audit Committee

At the end of 2005, the Company's audit committeeincludes 3 respectable persons who are:

Mr. Chai Jroongtanapibarn Chairman of AuditCommittee

Mr. Wallop Tangtrongchitr Audit CommitteeMr. Hester Chew Audit Committee

Roles and Responsibilities of Audit CommitteeRoles and Responsibilities of Audit CommitteeRoles and Responsibilities of Audit CommitteeRoles and Responsibilities of Audit CommitteeRoles and Responsibilities of Audit Committee

1. Ensure the Company has concise and sufficient fi-nancial reports

2. Ensure the Company has appropriate and efficientinternal control and audit system3. Ensure the Company follows rules and regulations of theStock Exchange of Thailand and related laws4. Consider and propose the Company's auditor and theirremuneration5. Concisely and completely disclose all related and/orconflicts of interest transactions of the Company6. Prepare audit committee report signed by the Chairmanof the audit committee and disclose in annual report7. Perform other assignments from the Board of directorswith consent from audit committee

3. Executive Committee3. Executive Committee3. Executive Committee3. Executive Committee3. Executive Committee

At the end of 2005, the Company's executive commit-tee consists of 4 persons who are

Mr. Vicha Poolvaraluck Chairman of ExecutiveCommittee

Mr. Verawat Ongvasith Executive DirectorMrs. Paradee Poolvaraluck Executive DirectorMr. Thanakorn Puliwekin Executive Director

Roles and Responsibilities of Executive CommitteeRoles and Responsibilities of Executive CommitteeRoles and Responsibilities of Executive CommitteeRoles and Responsibilities of Executive CommitteeRoles and Responsibilities of Executive Committee

1. Operate and manage the Company's business inaccordance with laws, objectives and regulations of theCompany as assigned by the Board of directors

2. Operate and manage the Company's business inaccordance with policy and strategy set by the Board ofdirectors

3. Follow shareholders' resolutions with honesty, ethicsand care for the Company's benefits

4. Approve borrowings or lending from/to financial in-stitutions including guarantee or make payment in ordinarybusiness of the Company such as capital expenditureswith in 60 million baht per each transaction

5. Appoint or cancel staff of the Company whose titleare lower than chief executive officer

6. Prepare, propose and set business policy and strat-egy to the Board of directors

7. Organize the Company's structure and managementincluding interviewing, employing, training and unemployingstaff

8. Set business plan, authority and budget as well asmanage business according to policy and strategy pro-posed to the Board of directorsAll related or conflict of interest transactions with executivedirectors in accordance with rules and regulations of Secu-rities and Exchange Commission must not be voted bythose executive directors who are related or have conflictof interests.

4. Remuneration Committee4. Remuneration Committee4. Remuneration Committee4. Remuneration Committee4. Remuneration Committee

At the end of 200, the Company has a remunerationcommittee which consists with 3 respectable persons asfollowed

Mr. Chai Jroongtanapibarn DirectorMr. Wallop Tangtrongchitr DirectorMr. Hester Chew Director

Roles and Responsibilities of Remuneration CommitteeRoles and Responsibilities of Remuneration CommitteeRoles and Responsibilities of Remuneration CommitteeRoles and Responsibilities of Remuneration CommitteeRoles and Responsibilities of Remuneration Committee

Consider and propose to the Board of directors allappropriate remuneration for Board of directors and man-agement of the Company in a money form and other ben-efits by taking into account all necessity and other benefitswhich the Company will get from managing, returns andvaluable staff maintaining.

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5. Management Team5. Management Team5. Management Team5. Management Team5. Management Team

At the end of 2005, the Company's management teamconsists of 8 people as followed

Mr. Vicha Poolvaraluck Chief Executive OfficerMr. Verawat Ongvasith* Deputy Chief Executive

Officer - AdministrationMr. Thanakorn Puliwekin Deputy Chief

ExecutiveOfficer - FilmsProgramming

Mr. Brian Hall Chief Operating OfficerMr. Anavach Ongvasith Chief Marketing OfficerMr. Chataphum Khantiviriya Chief Finance OfficerMr. Teerachai Triwongwaranat Chief Cinema OfficerMr. Naiyason Chantrasri Chief Bowling Officer

* Mr. Verawat Ongvasith has resigned from a post of Deputy Chief ExecutiveOfficer - Administration since September 1, 2005. However, he still remainshis position as a director and executive director of the Company.

On January 1, 2006 the Company has restructured itsorganization; thus management team are as followed

Mr. Kittsanan Ngamphathipong Chief Executive OfficerMr. Thanakorn Puliwekin Chief Films Program-

ming & Business Rela-tions

Mr. Brian Hall Chief Cinema BusinessParagon Cineplex

Mr. Anavach Ongvasith Chief Cinema BusinessMajor & EGV / MediaSales

Mr.Artorn Techatantiwong Chief Bowling Business/ Head of Sales

Ms.Jinda Wantanahatai Chief Retails BusinessMs.Aorravan Kowathana Chief Service Opera

tionsMr.Jiradej Nusthit Chief Corporate Stategy

& Investor RelationsMr.Sermsak Khwanpuang Chief Portfolio Manage

mentMr.Chattaphum Khantiviriya Chief Financial Officer

Roles and Responsibilities of Chief Executive OfficerRoles and Responsibilities of Chief Executive OfficerRoles and Responsibilities of Chief Executive OfficerRoles and Responsibilities of Chief Executive OfficerRoles and Responsibilities of Chief Executive Officer

Perform as assigned by the Board of directors or theExecutive Committee which are in accordance with rulesand regulations of the Company. However, Chief ExecutiveOfficer's authority must not be able to approve any trans-actions which related or have conflicts of interest with ChiefExecutive Officer.

Roles and Responsibilities of Management TeamRoles and Responsibilities of Management TeamRoles and Responsibilities of Management TeamRoles and Responsibilities of Management TeamRoles and Responsibilities of Management Team

Set operating goals in accordance with objectives, policyand plan from the Executive Directors. Also, plan, operateand solve problems that may arise from operating.

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Remuneration for directorsand management

1. Monetary remuneration for 20051. Monetary remuneration for 20051. Monetary remuneration for 20051. Monetary remuneration for 20051. Monetary remuneration for 2005

Board of directorsBoard of directorsBoard of directorsBoard of directorsBoard of directors

At the end of 2005, the Company has remunerated 11 directors of the Board for a total of 3.4 million baht, in a form of director fee and meeting fee.

Remuneration for directors are classified as followed:Remuneration for directors are classified as followed:Remuneration for directors are classified as followed:Remuneration for directors are classified as followed:Remuneration for directors are classified as followed:

Director Director fee and Meeting fee (Baht)

Mr.Somchainuk Engtrakul 540,000Mr.Vicha Poolvaraluck 280,000Mrs.Paradee Poolvaraluck 280,000Mr.Verawat Ongvasith 280,000Mr.Thanakorn Puliwekin 280,000Mr.Brian Hall 280,000Dr.Vachara Phannachet 280,000Mr.Wichai Poolvaraluck 280,000Mr.Chai Jroongthanapibarn 340,000Mr.Wallop Tangtrongjitr 280,000Mr.Hester Chew 280,000

Management TeamManagement TeamManagement TeamManagement TeamManagement Team

At the end of 2005, the Company compensated executive directors and management in a form of salary, bonus,traveling expense, phone bill.

2005Number of person Amount(Million Baht) Details of remuneration

Executive Director 4 0 -Management 8 15.18 Salary, bonus, traveling ex-

pense, phone bill etc.

Note: Remuneration for management was excluded Mr. Vicha Poolvaraluck's remuneration, which was paid to Well Ad Co.,Ltd.

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2. Other remuneration2. Other remuneration2. Other remuneration2. Other remuneration2. Other remuneration

Employee stock option (ESOP-W1) was distributed among directors and management as followed:Employee stock option (ESOP-W1) was distributed among directors and management as followed:Employee stock option (ESOP-W1) was distributed among directors and management as followed:Employee stock option (ESOP-W1) was distributed among directors and management as followed:Employee stock option (ESOP-W1) was distributed among directors and management as followed:

Name Title Number of options (Million) Percentage

Mr. Vicha Poolvaraluck Executive Chariman/Chief Executive Officer 4.5 23.08%Mr. Thanakorn Puliwekin Director / Chief Films Programming &

Business Relations 2.1 10.77%Mr. Chai Jroongthanapibarn Chairman of audit committee 0.95 4.35%Mr. Verawat Ongvasith Director/Executive director 0.75 3.85%Mrs. Paradee Poolvaraluck Director/Executive director 0.5 2.56%Mr. Wallop Tangtrongjitr Independent director 0.5 2.56%Mr. Hester Chew Independent director 0.5 2.56%Mr. Anavach Ongvasith Chief Marketing Officer 1.5 7.69%Mr. Chatpoom Kantiviriya Chief Finance Officer 1.15 5.90%

Employee stock option (ESOP-W2) was distributed among directors and management as followed:Employee stock option (ESOP-W2) was distributed among directors and management as followed:Employee stock option (ESOP-W2) was distributed among directors and management as followed:Employee stock option (ESOP-W2) was distributed among directors and management as followed:Employee stock option (ESOP-W2) was distributed among directors and management as followed:

Name Title Number of options (Million) Percentage

Dr. Vachara Phannachet Director 0.5 14.29%Mr. Brian Hall Director 3.0 85.71%

PersonnelPersonnelPersonnelPersonnelPersonnel

The Company and subsidiaries' employees as of December 31, 2005 are classified by business unit as followed:

Business Unit Number of Employees

Head Office 387Cinema 1,603Bowling and Karaoke 723Rental space and Services 153Advertising 29Film Distribution 62

Total Employee 2,957

Total Remuneration including salary, bonus, overtime payment, welfare and provident fund for all employees in 2005was 353.96 million baht. The Company never has any labor disputes since establishment.

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Employee Stock Option Program #1 (ESOP-W1)Employee Stock Option Program #1 (ESOP-W1)Employee Stock Option Program #1 (ESOP-W1)Employee Stock Option Program #1 (ESOP-W1)Employee Stock Option Program #1 (ESOP-W1)

Type indicate holder and non-transferableTerm 5 years from the issuing dateAmount 19,500,000 unitsOffering method allot to 39 directors and employees without offering

price (-0- baht a unit)Exercise ratio 1 warrant for 1.068 common shares*Exercise price 12.32 baht per share*Exercise period last working day of March and September till

expiry on which the last date is March 31, 2008.

Employee Stock Option Program #2 (ESOP-W2)Employee Stock Option Program #2 (ESOP-W2)Employee Stock Option Program #2 (ESOP-W2)Employee Stock Option Program #2 (ESOP-W2)Employee Stock Option Program #2 (ESOP-W2)

Type indicate holder and non-transferableTerm 4 years from the issuing dateAmount 3,500,000 unitsOffering method allot to 2 directors and employees without offering

price (-0- baht a unit)Exercise ratio 1 warrant for 1 common share*Exercise price 15.28 baht per share*Exercise period last working day of March and September till

expiry on which the last date is March 31, 2008.

Warrant offerings to existing shareholders #1 (MAJOR-W1)Warrant offerings to existing shareholders #1 (MAJOR-W1)Warrant offerings to existing shareholders #1 (MAJOR-W1)Warrant offerings to existing shareholders #1 (MAJOR-W1)Warrant offerings to existing shareholders #1 (MAJOR-W1)

Type indicate holder and transferableTerm 3 years from the issuing dateAmount 146,927,500 unitsOffering method allot to existing shareholders at 4 existing shares for

1 unit of warrant without offering price (-0- baht aunit)

Exercise ratio 1 warrant for 1.016 common shares*Exercise price 12.796 baht per share*Exercise period last working day of March, June, September and

November till expiry on which the last date is March31, 2007.

* Note: Exercise ratio and exercise price have been adjusted according to an adjustment condition that dividend payment is over 50% of net profit after tax

Employee Stock Option Plan

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Exercise Result ESOP-W1Exercise Result ESOP-W1Exercise Result ESOP-W1Exercise Result ESOP-W1Exercise Result ESOP-W1

1st exercise period, September 30, 2003 Warrant holders has exercised their rights for a total of 710,000 common shares or a total of 10,053,600 Baht in capital increase which isused as a working capital in the Company.

2nd exercise period, March 31, 2004 No exercising

3rd exercise period, September 30, 2004 Warrant holders has exercised their rights for a total of 22,620,752Baht in capital increase which is used as a working capital in theCompany.

4th exercise period, March 31, 2005 No exercising

5th exercise period, September 30, 2005 No exercising

Exercise Result ESOP-W2

1st exercise period, September 30, 2004 No exercising2nd exercise period, March 31, 2005 No exercising3rd exercise period, September 30, 2005 No exercising

Exercise Result MAJOR-W1Exercise Result MAJOR-W1Exercise Result MAJOR-W1Exercise Result MAJOR-W1Exercise Result MAJOR-W1

1st exercise period, March 31, 2005 No exercising

2nd exercise period, June 30, 2005 No exercising

3rd exercise period, September 30, 2005 No exercising

4th exercise period, December 30, 2005 Warrant holders has exercised their rights for a total of 1,270 common shares or a total of 16,250.92 Baht in capital increase which isused as a working capital in the Company.

62

Related transaction

The company has related transactions disclosed in a consolidated financial statement for a period ofJanuary 1 to December 31, 2005 which included related transactions between the company and/or associatedcompanies. All related transactions are normal business transactions and are disclosed in notes to financial state-ments ended December 31, 2005 which is audited by auditor.

Related transaction in 20055Related transaction in 20055Related transaction in 20055Related transaction in 20055Related transaction in 20055The company and/or subsidiaries and/or associated companies are comprised of 6 companies which is Siam

Future Development PLC, Udom Fivestar Cineplex Co.,Ltd, Media Logistic Co.,Ltd, Well Ad Co., Ltd, and PetchPinklao Co.,Ltd.

Major Details/conditionsMajor Details/conditionsMajor Details/conditionsMajor Details/conditionsMajor Details/conditions

To rent rental space to operate cinema and bowlingbusinesses in Chachoengsao, Thonglor, Piyarom andPetchkasem brances

leasehold rights for Chachoengsao branch

Management fee charged for Udonthani branchwhich is a normal business transaction

Pacific Marketing and Entertainment Group Co., Ltdhold 50% in and financially support by lending withan interest rate of 0.50% p.a.

2,528

1,622

9,390

3,600

3,600

556

6,749

502,350

Person/Juristic personPerson/Juristic personPerson/Juristic personPerson/Juristic personPerson/Juristic personwho may have conflictwho may have conflictwho may have conflictwho may have conflictwho may have conflictof interestsof interestsof interestsof interestsof interests

SIAM FutureDevelopment PLC

Udom FivestarCineplex Co.,Ltd

Media Logistic Co.,Ltd

Type of transactionsType of transactionsType of transactionsType of transactionsType of transactions

Expense1. Rent and Service fee2. Utilities fee

Asset and Liabilities1. leasehold rights

Revenue1. Management fee2. Other revenue

Expense1. Cost of gift voucher

Asset and Liabilities1. Other accountreceivables

Asset and Liabilities1. Unearned interestincome2. Loan

Amount Amount Amount Amount Amount(thousand baht)(thousand baht)(thousand baht)(thousand baht)(thousand baht)

63

Person/JuristicPerson/JuristicPerson/JuristicPerson/JuristicPerson/Juristicperson who mayperson who mayperson who mayperson who mayperson who mayhave conflict ofhave conflict ofhave conflict ofhave conflict ofhave conflict ofinterestsinterestsinterestsinterestsinterests

Wellad Co.,Ltd

Well CineplexCo.,Ltd

Petchpinklao Co.,Ltd

RelationshipRelationshipRelationshipRelationshipRelationship

Holding by Mr. Vichaand Mrs. ParadeePoolvaraluck

Holding by Mr. VichaPoolvaraluck's father

Holding by Mr. VichaPoolvaraluck'smother

Type of transactionsType of transactionsType of transactionsType of transactionsType of transactions

Management fee which somepart is recorded as cost

Management revenue

Prepaid leasehold rights

Major details/conditionsMajor details/conditionsMajor details/conditionsMajor details/conditionsMajor details/conditions

1.95 million baht a monthfor 5 years started fromJanuary 1, 2002 toDecember 31, 2006

400,000 baht a month

15 installments at 4.50million baht each started inJanuary 2004

23,400

4,800

67,403

Amount Amount Amount Amount Amount(thousand baht)(thousand baht)(thousand baht)(thousand baht)(thousand baht)

64

Major Shareholders

Top ten major shareholders as of February 7, 2006 are as followed:Top ten major shareholders as of February 7, 2006 are as followed:Top ten major shareholders as of February 7, 2006 are as followed:Top ten major shareholders as of February 7, 2006 are as followed:Top ten major shareholders as of February 7, 2006 are as followed:

Shareholder Number of shares Percentage (Million)

1. Mr. Vicha Poolvaraluck 322.85 45.5 2. Mrs. Paradee Poolvaraluck 29.35 4.1 3. Thai NVDR Limited 26.38 3.7 4. Goldman Sachs International 26.29 3.7 5. OCBC Securities Private Limited 20.00 2.8 6. Mr. Verawat Ongvasith 19.04 2.7 7. HSBC (Singapore) Nominees Pte Ltd 18.72 2.6 8. Government of Singapore Investment Corporation 14.20 2.0 9. American International Assurance Co.,Ltd 12.30 1.710. State Street Bank and Trust Company For Australia 11.50 1.6

65

28 December 2004 - 7 January 2005:28 December 2004 - 7 January 2005:28 December 2004 - 7 January 2005:28 December 2004 - 7 January 2005:28 December 2004 - 7 January 2005: Major Cineplex and EGV held "Ruam Jai Ruam Palang Thai fortsunami victims" project to encourage donations for tsunamivictims in the southern part of Thailand throughout 27 branchesaround the country. The contributions totaled 1,105,620 Baht.

8 January 2005:8 January 2005:8 January 2005:8 January 2005:8 January 2005: Major Cineplex held "Major Cineplex Children Day" for 2548 kidsto enjoy free movie at Major Cineplex Ratchayothin, Pinklao,Rangsit, Bangkapi, Sukumvit and Chachoengsao

18 January 2005:18 January 2005:18 January 2005:18 January 2005:18 January 2005: Major Bowl Hit together with Phra Sarasawadee Foundation forkids and education in HRH Princess Maha Chakri Sirindhornlaunched "This Book for Kids" project to receive all kinds ofbooks for upcountry schools.

18 January 2005:18 January 2005:18 January 2005:18 January 2005:18 January 2005: Major Cineplex and EGV offered food to 99 monks to contributegood deeds to tsunami victims at Major Cineplex Ratchayothin.

13-23 January 2005:13-23 January 2005:13-23 January 2005:13-23 January 2005:13-23 January 2005: Major Cineplex together with Tourism Authority of Thailand heldmovie charity to help tsunami victims in Bangkok InternationalFilm Festival 2005 at Major Cineplex Central World Plaza.

6-20 April 2005:6-20 April 2005:6-20 April 2005:6-20 April 2005:6-20 April 2005: Major Cineplex had special promotion for "Luang Pe Teng"customers to buy 2nd tickets at 50% off at every branches ofMajorCineplex. For kids and senior citizen, Major Cineplex gave50% off of their 1st ticket.

26 May - 19 June 2005:26 May - 19 June 2005:26 May - 19 June 2005:26 May - 19 June 2005:26 May - 19 June 2005: Major Cineplex held auction charity in "Europe Film Festival 2005"for celebrity's personal belongings. All contributions weredonated to Mr.Korn Tapparangsri, the minister of Science andTechnology to help improve Phuket and tsunami victims.

28 June 2005:28 June 2005:28 June 2005:28 June 2005:28 June 2005: Major Bowl Hit together with Satit Pathumwan Alumni held SatitPathumwan bowling charity for HRH Princess Maha ChakriSirindhorn's trophy at Major Bowl Hit Ratchayothin. Somecontributions were donated to her private expenditures.

20 September 2005:20 September 2005:20 September 2005:20 September 2005:20 September 2005: Major Cineplex together with WPM Film International Co.,Ltd andCP 7-11 held charity movie "Doraemon attacks robot kingdom"for over 200 kids from Duang Prateep foundation's kids, BaanPakkred's boy orphanage and Foundation for kids and family.Also, an auction for shirts painted by celebrity under "Doraemonin my imagination" theme on Major Cineplex's website andPanthip.com was donated all contributions to those 3 foundations.

22 September 2005:22 September 2005:22 September 2005:22 September 2005:22 September 2005: Major Bowl Hit together with Phra Sarasawadee Foundation forkids and education in HRH Princess Maha Chakri Sirindhorn heldbowling charity "Major Bowl Star Challenge 2005" and donated10,000 books to the foundation at Major Bowl Hit Ratchayothin.

22 November 2005:22 November 2005:22 November 2005:22 November 2005:22 November 2005: Major Bowl Hit together with bowling association of Thailandheld bowling charity to donate all contributions to HM KingBhumibol Adulyadej Rama IX on his birthday December 5th at 5branches of Major Bowl Hit.

Social Activities

67

Report from Board of directors andmanagement team

68

Management discussion and analysis

The Company overviewThe Company overviewThe Company overviewThe Company overviewThe Company overview

The company has 5 core businesses, which are cinema, bowling and karaoke, rental and services, advertisingmedia and film distribution. Following a merger with EGV Entertainment PLC (EGV) and an expansion of 4 branches in2005, the company has expanded its capacity to 258 screens serving 59,500 seats, 360 bowling lanes, 222 karaokerooms and 27,320 sq.m. rental spaces. Film distribution business is another related and synergized business with cinemabusiness. To be a total lifestyle entertainment company, the company has also invested in Siam Future DevelopmentPLC, a neighborhood shopping mall developer and California WOW Xperience PLC, an entertainment fitness club.

2005 Performance2005 Performance2005 Performance2005 Performance2005 Performance

In 2005, the company has total revenue of 4,832 million baht, increased 1,920 million baht or 66% from an earlieryear. The revenue can be classified as followed:

Revenue from cinema business 58%Revenue from bowling and karaoke business 10%Revenue from rental and services business 6%Revenue from advertising business 12%Revenue from film distribution business 11% andOther revenue 3%

Total revenue increase from an earlier year due to a merger with EGV and Pacific Marketing and EntertainmentInc (PMEG) along with a 12% higher contribution from associated companies.

Total expense in 2005 is 3,975 million baht, up 734 million baht or 23% from a year ago mainly from higherexpenses from EGV and PMEG

However, the company is able to maintain its gross profitability and decrease SG&A expense to sales. As aresult, the operating profit is 369 million baht, up to 76% from an earlier year.

The company has interest expense 103 million baht, double from last year, owing to the merger with EGV andPMEG and the company's expansion during a year which in turn grow the company's liabilities.

Accordingly, the company has a net profit in 2005 of 535 million baht or a profit per share of 0.75 baht.

Financial position as of 2005 year-endFinancial position as of 2005 year-endFinancial position as of 2005 year-endFinancial position as of 2005 year-endFinancial position as of 2005 year-end

AssetAssetAssetAssetAssetThe company has total asset of 2005 year-end 7,394 million baht, up 11% from an earlier year. The company

has current asset of 1,105 million baht, increased 9% from a year ago, largely on a back of a growth in accountreceivables from film distribution businesses along with a rise in inventories from film distribution business.

The company has cash and its equivalent of 323 million baht. This is an outcome of operating activities 1,337million baht, financing activities 166 million baht and investing activities 1,168 million baht which can be primarilyclassified into purchasing asset 697 million baht, decreasing in short-term loan 395 million baht and increasing in long-term 486 million baht.

Non-current asset of the company rise 11% or 642 million baht from 2004, of which plant and equipment grew8% to 4,589 million baht, film license grew 115% to 339 million baht.

Source of fundsSource of fundsSource of fundsSource of fundsSource of funds

The company has total liabilities of 4,469 million baht, up 10% from an earlier year, of which 59% or 2,649million baht are current liabilities and 41% or 1,820 million baht are non-current liabilities. The company has short-termloan 778 million baht, account payable 614 million baht and long-term 480 million baht.

Due to a merger with EGV and PMEG, the company has 2005 net profit of 535 million baht and inappropriateretained earning of 348 million baht at 2005 year-end.

69

Audit Committee Report

Audit committee of Major Cineplex Group PLC comprises of 3 persons who are independent from management ofthe Company and has chief financial officer as a secretary of the committee. The audit committee is assigned by theboard of directors to review all information related to financial reports, internal and external audits and ensure theCompany follows the rules of regulating organizations relating to the Company's businesses.

In 2005, audit committee had 8 meetings to review the audited financial statements of the Company. The auditcommittee has independent meetings with management and internal auditor to review and assess accounting policy,internal processes, efficiency of internal control system and audit plan. The audit committee has reviewed every quarterlyfinancial statement of 2005 as well as advised the Board of directors regarding risk management plan.

Audit committee endorses the efficiency of the company's internal control system that its assets are well protected,efficiently used and has appropriated accounting.

Audit committee has considered and proposed Pricewaterhousecoopers ABAS Limited as the Company's auditorfor 2006. The annual ordinary shareholder meeting on April 4, 2006 shall consider the auditor and auditor fee.

Mr. Chai Jarungtanapibal

Chairman of the audit committee

70

Responsibility statementof the Board of directors to the financial statement

The Board of directors is responsible for the Company and consolidated financial statements as well asfinancial information as publicized in annual report. The financial statements are prepared according to generallyaccepted accounting standard in Thailand which applied appropriate policy, consistent practice with careful consider-ation and best estimation as well as enough disclosure of information in the notes to financial statement. Moreover, theBoard of directors has provided and maintained efficient internal control system to ensure that accounting records areaccurate, complete and adequate to preserve assets and prevent fraud or materially irregular operations.

Also, the Board of directors has appointed audit committees who are independent directors and not be a partof management team to take responsibility of financial statements, internal control system and to ensure and opine overrelated and conflict of interests transactions that are accurate and complete. The audit committee's opinion has beenshown in the audit committee report in this annual report.

The Board of directors believes that the Company's internal control system is sufficient and be able to ensurethat the Company and consolidated financial statements as of December 31, 2005 are reasonably trusted.

Mr. Somjainuk Engtrakul Mr. Vicha Poolvaraluck

Chairman Executive Chairman

71

Financial Statement

72

INDEPENDENT AUDITOR'S REPORTINDEPENDENT AUDITOR'S REPORTINDEPENDENT AUDITOR'S REPORTINDEPENDENT AUDITOR'S REPORTINDEPENDENT AUDITOR'S REPORT

To The Shareholders and Board of Directors of MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED.To The Shareholders and Board of Directors of MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED.To The Shareholders and Board of Directors of MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED.To The Shareholders and Board of Directors of MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED.To The Shareholders and Board of Directors of MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED.

I have audited the accompanying consolidated and the Company balance sheets as of December 31, 2005and 2004, the related consolidated and the Company statements of income, the related consolidated and the Companystatements to changes in shareholders' equity and the related consolidated and the Company cash flow statements forthe years then ended of MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED and its subsidiaries, and of MAJORCINEPLEX GROUP PUBLIC COMPANY LIMITED, respectively. These financial statements are the responsibility of thecompany's management as to their correctness and completeness of the presentation. My responsibility is to expressan opinion on these financial statements based on my audits. I did not audit the financial statements of CaliforniaWow Xperience Public Co., Ltd. which is associated companies. The consolidated and the Company financialstatements included investment in such associated company in accordance with equity method as of December31, 2005 and 2004 by Bath 195.31 millions (equivalent to 2.64% of consolidated total assets) and 174.75 millions(equivalent to 2.62% of consolidated total assets) respectively and participating profit (loss) of associated companiesfor the year end on December 31, 2005 and 2004 by Baht 20.56 millions (equivalent to 3.84% of consolidated net profit)and (5.70) millions (equivalent to 1.19% of consolidated net loss) respectively. Apart from this, the consolidated andCompany financial statements for the year end on December 31, 2004 it combined participation profit of Siam FutureDevelopment Public Co., Ltd. by Baht 46.06 millions whereby I did not review interim financial statements of Siam FutureDevelopment Public Co., Ltd. which is associated company. The interim financial statements of such associatedcompanies have been reviewed by other auditors. I have been furnished by the report of the other auditor. Myreport, insofar as it relates to the amount of various transactions of such associated companies is based solelyon the report of those auditor.

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

In my opinion, the consolidated and the company financial statements referred to above present fairly, inall material respects, the consolidated and the company's financial position as of December 31, 2005 and 2004, theresults consolidated and the company operations and cash flows for the years then ended of MAJOR CINEPLEX GROUPPUBLIC COMPANY LIMITED and its subsidiary and the Company of MAJOR CINEPLEX GROUP PUBLIC COMPANYLIMITED respectively, in accordance with generally accepted accounting principles.

S.K. ACCOUNTANT SERVICES COMPANY LIMITED

(Somchai Kurujitkosol)

Authorized Auditor No.3277

73

MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIESBALANCE SHEETSBALANCE SHEETSBALANCE SHEETSBALANCE SHEETSBALANCE SHEETS

As of December 31, 2005 and 2004 As of December 31, 2005 and 2004 As of December 31, 2005 and 2004 As of December 31, 2005 and 2004 As of December 31, 2005 and 2004

CONSOLIDATED THE COMPANY ONLY 2005 2004 2005 2004 BAHT BAHT BAHT BAHT

ASSETSASSETSASSETSASSETSASSETS

CURRENT ASSETS

Cash and Its Equivalent 323,281,424.55 320,847,645.76 146,419,414.78 109,066,175.33Temporary Investments (Note 8) 1,030,290.42 1,235,980.15 - 172,430.94Accounts and Notes Receivable-Net (Note 9) 207,579,918.36 151,025,973.18 23,928,865.32 21,208,060.10Accounts Receivable-Advertisement-Net(Note 6.2,10) 225,117,521.32 225,618,728.40 32,689,659.00 5,243,000.00Inventories-Net (Note 11) 91,568,124.87 70,828,973.33 8,811,567.71 9,908,934.12Other Current Assets

Other AccountsReceivable-Subsidiary Companies (Note 6.2) - - 312,986,869.39 149,612,538.21Accrued Interest Receivable-Subsidiary and Related Companies (Note 6.2) 50,413.43 30,016.85 24,332,298.01 1,428,439.40Accounts Receivable-Revenue Department 51,654,102.55 35,202,303.90 - 4,591,352.88Prepaid Deposit ofShare-Subscription (Note 12) - 65,000,000.00 - 65,000,000.00Suspended Input Tax 65,192,787.89 43,248,572.86 12,962,892.18 15,947,957.95Other Accounts Receivable-Sale Promotion 13,935,196.84 18,952,813.70 7,729,196.84 18,952,813.70Cash Guarantee (Note 13) - 11,760,750.00 - -Others (Note 14) 125,492,777.68 70,994,372.41 16,804,069.64 21,500,763.97 TOTAL CURRENT ASSETSTOTAL CURRENT ASSETSTOTAL CURRENT ASSETSTOTAL CURRENT ASSETSTOTAL CURRENT ASSETS 1,104,902,557.911,104,902,557.911,104,902,557.911,104,902,557.911,104,902,557.91 1,014,746,130.541,014,746,130.541,014,746,130.541,014,746,130.541,014,746,130.54 586,664,832.87586,664,832.87586,664,832.87586,664,832.87586,664,832.87 422,632,466.60422,632,466.60422,632,466.60422,632,466.60422,632,466.60

NON-CURRENT ASSETS

Investments in Subsidiary Companies (Note 15) - - 2,024,657,576.84 1,821,925,804.81Investments in Associated Companies (Note 16) 467,029,953.06 455,629,052.25 466,882,222.34 454,301,816.77Loans to Subsidiary andRelated Companies (Note 6.2) 2,350,000.00 2,950,000.00 1,110,574,309.18 261,935,641.56Loans to Employees 8,117,739.38 8,247,581.70 5,362,377.86 4,456,080.68Property Plant and Equipment - Net (Note 17) 4,589,136,993.58 4,245,332,558.28 1,407,019,911.17 1,366,117,361.65Other Non-Current Assets

Leased and ServicesAccounts Receivable 7,105,600.00 5,000,000.00 - -Leased and Services Contract Bond (Note 18) 80,465,949.70 65,443,720.82 43,768,562.91 37,660,138.32Prepaid Leasehold Right FeeRepayable Instead of Subsidiary (Note 19) - 200,000,000.00 - 200,000,000.00Deferred BuildingArea Leasehold Rights (Note 20) 529,850,959.59 227,558,525.98 86,270,097.82 63,796,610.15Deferred Land Leasehold Rights-Net(Note 21) 59,668,827.03 62,537,345.55 - -Deferred Film Copy Rights-Net (Note 22) 339,328,096.83 133,458,658.22 - -Asset Not Used for Operations-Net (Note 23) 1.00 1.00 1.00 1.00Goodwill - Net (Note 24) 167,082,640.10 193,281,097.74 - -Negative Goodwill - Net (Note 25) (3,620,198.61) (3,960,959.41) - -Others 42,537,758.89 51,220,361.26 1,168,726.72 5,189,213.24TOTAL NON-CURRENT ASSETSTOTAL NON-CURRENT ASSETSTOTAL NON-CURRENT ASSETSTOTAL NON-CURRENT ASSETSTOTAL NON-CURRENT ASSETS 6,289,054,320.55 5,646,697,943.39 5,145,703,785.84 4,215,382,668.18 TOTAL ASSETS TOTAL ASSETS TOTAL ASSETS TOTAL ASSETS TOTAL ASSETS 7,393,956,878.46 6,661,444,073.93 5,732,368,618.71 4,638,015,134.78

74



CONSOLIDATED THE COMPANY ONLY2005 2004 2005 2004BAHT BAHT BAHT BAHT

LIABILITIES AND SHAREHOLDERS' EQUITYLIABILITIES AND SHAREHOLDERS' EQUITYLIABILITIES AND SHAREHOLDERS' EQUITYLIABILITIES AND SHAREHOLDERS' EQUITYLIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Bank Overdraft (Note 26) 34,072,291.84 2,206,929.78 772,077.84 -Short - Term Loans fromFinance Institute (Note 26,27) 778,000,000.00 1,173,067,447.73 570,000,000.00 400,000,000.00Notes Payable 11,797,173.13 14,486,791.53 6,259,681.86 13,882,828.34Accounts Payable 613,544,985.79 364,914,642.18 174,965,046.52 132,817,874.21Short-Term Loans from Other Company (Note 28) - 29,009,850.00 - -Current Portion of Long-Term Loans (Note 29) 545,500,000.00 356,000,000.00 439,000,000.00 251,000,000.00Current Portion of Liabilitiesunder Financial Lease Agreement (Note 30) 43,178,239.45 41,337,382.59 42,249,595.87 40,317,952.53Other Current Liabilities

Accrued Expenses 69,558,445.23 97,525,615.83 24,868,586.50 43,039,853.46Accrued Film Copy Rights - 16,050,000.00 - -Other Accounts Payable 98,248,663.94 85,777,001.45 20,002,140.34 13,452,016.51Accrued Corporate Income Tax 127,951,755.23 46,304,021.36 64,936,353.13 14,838,225.97Accounts Payable for AssetsPurchased and Construction Works 166,963,089.21 171,984,239.18 7,721,191.03 9,443,371.23Advance Received Income 52,520,161.76 25,041,047.03 31,074,813.58 12,634,850.03Others 108,080,325.70 59,213,575.16 32,941,029.46 21,788,208.88 TOTAL CURRENT LIABILITIES TOTAL CURRENT LIABILITIES TOTAL CURRENT LIABILITIES TOTAL CURRENT LIABILITIES TOTAL CURRENT LIABILITIES 2,649,415,131.28 2,482,918,543.82 1,414,790,516.13 953,215,181.16

NON-CURRENT LIABILITIES

Loans from Subsidiary Companies (Note 6.2) - - 86,130,000.00 122,678,800.00Long-Term Loans (Note 26,29)1,393,938,141.59 1,097,438,141.59 1,276,000,000.00 875,000,000.00Other Non-Current Liabilities

Rental Bond 63,212,715.55 50,730,267.85 16,139,292.55 11,595,156.00Deferred Leasehold Revenue (Note 31) 196,144,315.51 195,853,445.28 - -Deferred Service Revenue (Note 32) 131,814,460.07 131,716,419.55 - -Liabilities under FinancialLease Agreement-Net (Note 30) 1,341,646.87 57,129,189.65 590,588.62 55,742,416.16Advance Received fromSales Promotion (Note 33) 22,000,000.00 19,999,999.97 22,000,000.00 19,999,999.97Others 11,591,683.87 13,406,595.82 4,710,918.56 9,985,882.53TOTAL NON-CURRENT LIABILITIESTOTAL NON-CURRENT LIABILITIESTOTAL NON-CURRENT LIABILITIESTOTAL NON-CURRENT LIABILITIESTOTAL NON-CURRENT LIABILITIES 1,820,042,963.46 1,566,274,059.71 1,405,570,799.73 1,095,002,254.66 TOTAL LIABILITIES TOTAL LIABILITIES TOTAL LIABILITIES TOTAL LIABILITIES TOTAL LIABILITIES 4,469,458,094.74 4,049,192,603.53 2,820,361,315.86 2,048,217,435.82

75



CONSOLIDATED THE COMPANY ONLY2005 2004 2005 2004BAHT BAHT BAHT BAHT

SHAREHOLDERS' EQUITYSHAREHOLDERS' EQUITYSHAREHOLDERS' EQUITYSHAREHOLDERS' EQUITYSHAREHOLDERS' EQUITY

Share Capital

Authorized Share Capital (Note 34) 897,000,000 Ordinary Shares @ Baht 1.00 897,000,000.00 897,000,000.00 897,000,000.00 897,000,000.00

Issued and Paid-up Share Capital 709,322,633 Ordinary Shares @ Baht 1.00 709,322,633.00 709,322,633.00 709,322,633.00 709,322,633.00Premiums on Share Capital (Note 36) 1,840,199,567.10 1,840,199,567.10 1,840,199,567.10 1,840,199,567.10Share SubscriptionReceived in Advance (Note 35) 16,250.92 - 16,250.92 -Unrealized Gain (loss) on TemporaryInvestments in available for sale of Subsidiary and Associated Companies (0.94) 598.88 - -Retained Earnings Appropriated Legal Reserve (Note 37,38) 14,405,494.67 - 14,405,494.67 - Unappropriated 348,063,357.16 40,275,498.86 348,063,357.16 40,275,498.86Minority Shareholders' Interest 12,491,481.81 22,453,172.56 - - TOTAL SHAREHOLDERS' EQUITYTOTAL SHAREHOLDERS' EQUITYTOTAL SHAREHOLDERS' EQUITYTOTAL SHAREHOLDERS' EQUITYTOTAL SHAREHOLDERS' EQUITY 2,924,498,783.72 2,612,251,470.40 2,912,007,302.85 2,589,797,698.96 TOTAL LIABILITIES ANDTOTAL LIABILITIES ANDTOTAL LIABILITIES ANDTOTAL LIABILITIES ANDTOTAL LIABILITIES AND

SHAREHOLDERS' EQUITY SHAREHOLDERS' EQUITY SHAREHOLDERS' EQUITY SHAREHOLDERS' EQUITY SHAREHOLDERS' EQUITY 7,393,956,878.46 6,661,444,073.93 5,732,368,618.71 4,638,015,134.78

76

MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES STATEMENT OF INCOME STATEMENT OF INCOME STATEMENT OF INCOME STATEMENT OF INCOME STATEMENT OF INCOME

For the Year ended on December 31, 2005 and 2004 For the Year ended on December 31, 2005 and 2004 For the Year ended on December 31, 2005 and 2004 For the Year ended on December 31, 2005 and 2004 For the Year ended on December 31, 2005 and 2004

CONSOLIDATED THE COMPANY ONLY2005 2004 2005 2004

BAHT BAHT BAHT BAHT

REVENUES FROM OPERATION

Revenue from Cinema Business 2,703,143,187.46 1,826,831,839.94 1,406,082,886.36 1,180,127,877.09Revenue from Bowling and Karaoke Business 467,608,849.39 297,696,368.79 145,467,007.05 225,113,712.65Revenue from Rentals and Services Business 304,547,621.15 290,468,217.44 43,555,009.44 47,469,444.81Revenue from Advertisement Business 586,667,845.09 296,102,614.76 141,791,870.00 58,966,297.20Revenue from Sales VCD,DVD and Movie Copy Right Business 502,902,346.01 47,398,328.49 - -Revenue from Fitness Center Business 22,644,638.05 3,223,989.37 - -Other IncomesSale Promotion Revenue 99,422,541.62 64,063,643.30 64,149,807.09 53,194,686.56

Administrative Revenue 10,300,000.00 4,800,000.00 277,525,718.51 191,492,165.69Amortized Negative Goodwill (Note 25) 340,760.80 340,760.80 - -Others 91,243,453.58 42,585,758.91 62,228,629.61 25,912,125.94

Participating Profit in Subsidiary Companies - - 121,833,454.64 107,829,035.45Participating Profit in Associated Companies 42,998,994.41 38,229,929.33 44,178,499.17 38,055,445.38

TOTAL REVENUESTOTAL REVENUESTOTAL REVENUESTOTAL REVENUESTOTAL REVENUES 4,831,820,237.56 2,911,741,451.13 2,306,812,881.87 1,928,160,790.77

EXPENSES FROM OPERATION

Cost of Cinema Business 2,009,059,005.42 1,355,498,284.95 1,083,789,635.02 911,465,303.10Cost of Bowling and Karaoke Business 285,726,523.32 173,884,363.83 101,192,165.55 158,353,782.10Cost of Rentals and Services Business 203,720,032.88 200,732,461.18 7,577,877.89 8,726,735.53Cost of Advertisement Business 23,493,729.69 18,076,594.66 - -Cost of Sales VCD,

DVD and Movie Copy Right Business 417,882,794.13 28,976,046.01 - -Cost of Fitness Center Business 23,660,528.64 5,766,644.09 - -Amortized Good will (Note 24) 26,198,457.64 21,409,120.69 - -Selling and Administrative Expenses 981,916,398.01 618,051,531.79 390,785,682.48 429,243,088.15Directors' Remuneration (Note 39) 3,400,000.00 1,610,000.00 3,400,000.00 1,610,000.00

TOTAL EXPENSESTOTAL EXPENSESTOTAL EXPENSESTOTAL EXPENSESTOTAL EXPENSES 3,975,057,469.73 2,424,005,047.20 1,586,745,360.94 1,509,398,908.88

PROFIT BEFORE AMORTIZATION OF THE EXCESS OF COST OF ACQUISITION OVERPROFIT BEFORE AMORTIZATION OF THE EXCESS OF COST OF ACQUISITION OVERPROFIT BEFORE AMORTIZATION OF THE EXCESS OF COST OF ACQUISITION OVERPROFIT BEFORE AMORTIZATION OF THE EXCESS OF COST OF ACQUISITION OVERPROFIT BEFORE AMORTIZATION OF THE EXCESS OF COST OF ACQUISITION OVERFAIR VALUE OF SUBSIDIARIES,FAIR VALUE OF SUBSIDIARIES,FAIR VALUE OF SUBSIDIARIES,FAIR VALUE OF SUBSIDIARIES,FAIR VALUE OF SUBSIDIARIES,

INTEREST EXPENSES AND CORPORATEINTEREST EXPENSES AND CORPORATEINTEREST EXPENSES AND CORPORATEINTEREST EXPENSES AND CORPORATEINTEREST EXPENSES AND CORPORATEINCOME TAXINCOME TAXINCOME TAXINCOME TAXINCOME TAX 856,762,767.83 487,736,403.93 720,067,520.93 418,761,881.89

AMORTIZATION OF THE EXCESS OF COST OF ACQUISITION OVERFAIR VALUE OF SUBSIDIARIES (Note 3,15.2) - (816,939,353.70) - (816,939,353.70)PROFIT(LOSS) FROM OPERATION BEFORE INTEREST EXPENSES ANDPROFIT(LOSS) FROM OPERATION BEFORE INTEREST EXPENSES ANDPROFIT(LOSS) FROM OPERATION BEFORE INTEREST EXPENSES ANDPROFIT(LOSS) FROM OPERATION BEFORE INTEREST EXPENSES ANDPROFIT(LOSS) FROM OPERATION BEFORE INTEREST EXPENSES ANDCORPORATE INCOME TAXCORPORATE INCOME TAXCORPORATE INCOME TAXCORPORATE INCOME TAXCORPORATE INCOME TAX 856,762,767.83 (329,202,949.77) 720,067,520.93 (398,177,471.81) INTEREST EXPENSES (102,830,551.74) (44,475,082.68) (70,486,120.67) (33,465,240.88) CORPORATE INCOME TAX (Note 40) (228,004,687.64) (106,298,360.30) (114,591,257.39) (47,769,870.39)NET PROFIT(LOSS) BEFORE NET (PROFIT) LOSS OF MINORITYNET PROFIT(LOSS) BEFORE NET (PROFIT) LOSS OF MINORITYNET PROFIT(LOSS) BEFORE NET (PROFIT) LOSS OF MINORITYNET PROFIT(LOSS) BEFORE NET (PROFIT) LOSS OF MINORITYNET PROFIT(LOSS) BEFORE NET (PROFIT) LOSS OF MINORITYSHAREHOLDERS' INTERESTSHAREHOLDERS' INTERESTSHAREHOLDERS' INTERESTSHAREHOLDERS' INTERESTSHAREHOLDERS' INTEREST 525,927,528.45 (479,976,392.75) 534,990,142.87 (479,412,583.08)NET (PROFIT) LOSS OF MINORITYSHAREHOLDERS' INTEREST 9,062,614.42 563,809.67 - -NET PROFIT(LOSS)NET PROFIT(LOSS)NET PROFIT(LOSS)NET PROFIT(LOSS)NET PROFIT(LOSS) 534,990,142.87 (479,412,583.08) 534,990,142.87 (479,412,583.08)

BASIC EARNING(LOSS)PER SHARE (Unit : Baht) (Note 41) 0.75 (0.77) 0.75 (0.77)DILUTED EARNING(LOSS)PER SHARE (Unit : Baht) (Note 41) 0.74 (0.75) 0.74 (0.75)WEIGHTED AVERAGE OFORDINARY SHARES (Unit : Share) (Note 41) 709,322,633 619,061,401 709,322,633 619,061,401THE NUMBER OF DILUTEDORDINARY SHARES (Unit:Share) (Note 41) 710,248,182 640,852,579 710,248,182 640,852,579

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-

-

-

- 1,55

7,09

4,92

9.00

Incr

ease

d Sh

are

Cap

ital

from

ESO

P Ex

ercise

s(N

ote

35)

1,83

6,10

0.00

2

0,78

4,65

2.00

-

-

-

-

-

2

2,62

0,75

2.00

Unr

ealiz

ed G

ain

inSe

curit

ies

Availabl

e fo

r Sa

le(N

ote1

6.2)

-

-

-

(2

25,843

,143

.20)

-

-

-

(225

,843

,143

.20)

Paym

ent f

or D

ivid

ends

(Not

e 3

8) -

-

-

-

- (3

52,626

,000

.00)

-

(352

,626

,000

.00)

Net

Pro

fit(lo

ss)

-

-

-

-

- (4

79,412

,583

.08)

-

(479

,412

,583

.08)

Tran

sfer

Pre

mium

s on

Sha

re C

apita

l(N

ote

36)

-

(2

79,764

,396

.89)

-

-

-

279

,764

,396

.89

-

-

Tran

sfer

App

ropr

iate

d Le

gal R

eser

ve(N

ote

37)

-

-

-

-

(37,45

1,06

4.26

) 37

,451

,064

.26

-

-

Balanc

e as

of D

ecem

ber 31

, 200

4Ba

lanc

e as

of D

ecem

ber 31

, 200

4Ba

lanc

e as

of D

ecem

ber 31

, 200

4Ba

lanc

e as

of D

ecem

ber 31

, 200

4Ba

lanc

e as

of D

ecem

ber 31

, 200

4 70

9,32

2,63

3.00

70

9,32

2,63

3.00

70

9,32

2,63

3.00

70

9,32

2,63

3.00

70

9,32

2,63

3.00

1,84

0,1

1,84

0,1

1,84

0,1

1,84

0,1

1,84

0,1 9

9,56

7.10

99,567

.10

99,567

.10

99,567

.10

99,567

.10

---- -

---- -

-

-

-

-

-

40,27

5,49

8.86

40,27

5,49

8.86

40,27

5,49

8.86

40,27

5,49

8.86

40,27

5,49

8.86

-

2,58

9,79

7,69

8.96

- 2

,589

,797

,698

.96

- 2

,589

,797

,698

.96

- 2

,589

,797

,698

.96

- 2

,589

,797

,698

.96

Rece

ipt o

f Sha

re s

ubsc

riptio

n in a

dvan

ce(N

ote

35)

-

-

16

,250

.92

-

-

-

- 16

,250

.92

Appr

opria

ted

Lega

l Res

erve

(Not

e 3

8) -

-

-

-

14

,405

,494

.67

(14,40

5,49

4.67

) -

-

Paym

ent f

or D

ivid

ends

(Not

e 3

8) -

-

-

-

- (2

12,796

,789

.90)

-

(212

,796

,789

.90)

Net

Pro

fit -

-

-

-

-

534,99

0,14

2.87

-

534

,990

,142

.87

Balanc

e as

of D

ecem

ber 31

, 200

5Ba

lanc

e as

of D

ecem

ber 31

, 200

5Ba

lanc

e as

of D

ecem

ber 31

, 200

5Ba

lanc

e as

of D

ecem

ber 31

, 200

5Ba

lanc

e as

of D

ecem

ber 31

, 200

5 70

9,32

2,63

3.00

70

9,32

2,63

3.00

70

9,32

2,63

3.00

70

9,32

2,63

3.00

70

9,32

2,63

3.00

1,840

,199

,567

.10

1,840

,199

,567

.10

1,840

,199

,567

.10

1,840

,199

,567

.10

1,840

,199

,567

.10

1

6,25

0.92

1

6,25

0.92

1

6,25

0.92

1

6,25

0.92

1

6,25

0.92

---- -

14

,405

,494

.67

14

,405

,494

.67

14

,405

,494

.67

14

,405

,494

.67

14

,405

,494

.67

348,06

3,35

7.16

348,06

3,35

7.16

348,06

3,35

7.16

348,06

3,35

7.16

348,06

3,35

7.16

- 2

,912

,007

,302

.8 - 2

,912

,007

,302

.8 - 2

,912

,007

,302

.8 - 2

,912

,007

,302

.8 - 2

,912

,007

,302

.85555 5

79

MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIESCASH FLOW STATEMENTSCASH FLOW STATEMENTSCASH FLOW STATEMENTSCASH FLOW STATEMENTSCASH FLOW STATEMENTS



CASH FLOW FROM OPERATING ACTIVITIESCASH FLOW FROM OPERATING ACTIVITIESCASH FLOW FROM OPERATING ACTIVITIESCASH FLOW FROM OPERATING ACTIVITIESCASH FLOW FROM OPERATING ACTIVITIESNet Profit(Loss) 534,990,142.87 (479,412,583.08) 534,990,142.87 (479,412,583.08)Adjustments to Net Profit (Loss)for Cash provided (used) from Operations

Depreciation 562,552,971.63 382,191,484.02 218,084,435.29 191,294,842.45Participating Loss (Profit) in Subsidiary Companies - - (121,833,454.64) (107,829,035.45)Participating Loss (Profit)in Associated Companies (42,998,994.41) (38,229,929.33) (44,178,499.17) (38,055,445.38)Amortized Expenses 8,958,751.17 - - -Amortized Film Copy Right 169,189,924.47 25,548,030.67 - -Amortized Revenue Leasehold and Services (17,725,235.30) (16,773,189.70) - (1,046,743.88)Amortized Revenue Sales Promotion (19,999,999.96) (10,000,000.03) (9,999,999.96) (10,000,000.03)Amortized Expense Leasehold and Services 15,012,467.13 5,076,369.29 2,449,409.53 203,389.85Amortized Interest Expenses of Financial Lease 2,187,590.83 - 1,966,648.90 -Doubtful Debt 43,680,714.86 2,625,854.00 286,959.87 818,527.80Loss (Gain) of Minority Shareholders' Interest (9,062,614.42) (563,809.67) - -Amortization of the Excess of Cost ofAcquisition Over Fair Value of Subsidiaries 953,587.61 816,939,353.70 953,587.61 816,939,353.70Unrealized Loss (Gain) in TemporaryInvestment - Securities Available for Trade (4,086.40) (68,344.97) - (1,237.79)Loss(Gain) sales of TemporaryInvestment - Securities Available for Trade (1,383,118.67) (627,765.67) (1,420,463.86) (369,891.79)Loss(Gain) from Reduction in Asset Liability 1,213,820.46 - - -Loss from Cancelled for Business Operation-Bowling - 10,890,722.05 - 10,890,722.05Loss from Liquidation of Subsidiary Companies - - - 2,877,216.19Allowance for WithholdingIncome Tax Exceeding 3 Years 933,357.08 2,009,380.48 - -Loss from Amortization Goodwillfrom Liquidation of Subsidiary Companies - 9,207,986.87 - -Amortized Goodwill 26,198,457.64 21,409,120.69 - -Amortized Negative Goodwill (340,760.80) (340,760.80) - - Profit (Loss) from Operating Activities before Change in Operating Assets and Liabilities 1,274,356,975.79 729,881,918.52 581,298,766.44 386,309,114.64Purchase of Temporary Investment-Securities Available for Trade (280,000,000.00) (150,000,000.00) (280,000,000.00) (150,000,000.00)Sales of Temporary Investment -Securities Available for Trade 281,592,894.80 170,521,939.71 281,592,894.80 150,264,065.83(Increase) Decrease in Accountsand Notes Receivable (94,129,559.15) (40,867,163.88) (2,982,697.29) (8,053,135.00)(Increase) Decrease in AccountsReceivable - Advertisement 530,737.08 (29,060,353.50) (27,446,659.00) 8,560,000.00(Increase) Decrease in Inventories (21,952,972.00) (13,059,289.71) 1,097,366.41 (2,222,967.65)(Increase) Decrease in Other AccountsReceivable - Subsidiary and Related Companies - 3,287,768.84 (57,386,450.83) (27,925,907.22)(Increase) Decrease in AccruedInterest Receivable (20,396.58) (30,016.85) (34,172,441.35) 945,822.40(Increase) Decrease in AccountsReceivable - Revenue Department (16,451,798.65) 2,200,314.37 4,591,352.88 -(Increase) Decrease in Prepaid inShare Subscription 65,000,000.00 (65,000,000.00) 65,000,000.00 (65,000,000.00)(Increase) Decrease in Suspended Input Tax (21,944,215.03) 221,990.55 2,985,065.77 1,403,392.50(Increase) Decrease in Other AccountsReceivable - Sale Promotion 5,017,616.86 3,300,370.01 11,198,549.06 3,300,370.01(Increase) Decrease in Cash Guarantee 11,760,750.00 (11,760,750.00) - -(Increase) Decrease in Other Current Assets (61,566,393.24) (25,970,711.54) 4,923,637.39 (16,311,162.83)(Increase) Decrease in AccountsReceivable - Leasehold and Services (2,105,600.00) (5,000,000.00) - -Increase (Decrease) in Notes Payable (2,689,618.40) (9,133,606.91) (7,623,146.48) (3,901,650.34)Increase (Decrease) in Accounts Payable 16,741,955.97 52,383,906.45 42,147,172.31 (22,356,268.93)Increase (Decrease) in Accrued Expenses (27,967,170.60) 32,819,588.70 64,600,191.29 100,048,328.41Increase (Decrease) in Accrued Dividends (208,316.40) (22,068,416.10) (208,316.40) 182,216.40Increase (Decrease) in Other Accounts Payable 12,471,662.49 3,745,659.57 6,550,123.83 (4,747,514.11)

Notes to financial statements are an integral part of these statementsIncrease (Decrease) in AccruedCorporate Income Tax 81,647,733.87 (45,319,595.86) 50,098,127.16 (27,408,826.86)

80

Increase (Decrease) in AdvanceReceived from Sales 27,209,114.73 - 8,439,963.54 -Increase (Decrease) in Other Current Liabilities 49,253,897.50 6,043,915.98 14,395,051.04 4,589,803.99Increase (Decrease) in AdvanceReceived from Sales Promotion 22,000,000.00 30,000,000.00 22,000,000.00 30,000,000.00Increase (Decrease) in Deferred ServiceRecognized as Income 7,105,600.00 - - -Increase (Decrease) in Deferred LeaseholdRecognized as Income 11,008,546.05 - - -

NET CASH PROVIDED (USED) FROMNET CASH PROVIDED (USED) FROMNET CASH PROVIDED (USED) FROMNET CASH PROVIDED (USED) FROMNET CASH PROVIDED (USED) FROMOPERATING ACTIVITIESOPERATING ACTIVITIESOPERATING ACTIVITIESOPERATING ACTIVITIESOPERATING ACTIVITIES 1,336,661,445.09 617,137,468.35 751,098,550.57 357,675,681.24CASH FLOW FROM INVESTING ACTIVITIESCASH FLOW FROM INVESTING ACTIVITIESCASH FLOW FROM INVESTING ACTIVITIESCASH FLOW FROM INVESTING ACTIVITIESCASH FLOW FROM INVESTING ACTIVITIESShare Subscription Received in Advance 16,250.92 - 16,250.92 -

Cash Purchase of Investment inSubsidiary Companies (1,852,605.00) (297,245,133.52) (81,851,905.00) (550,008,691.37)Cash Receive from refundable Share Capitalfrom Liquidation of Subsidiary Companies - - - 27,740,000.00Cash Purchase of Investment inAssociated Companies (400,000.00) (82,140,282.00) (400,000.00) (82,140,282.00)Dividend Received 31,998,093.60 6,000,000.00 31,998,093.60 50,499,367.50(Increase) Decrease in Loans toSubsidiary and Related Companies 600,000.00 - (731,410,125.87) (250,735,797.16)(Increase) Decrease in Loans to Employees 129,842.32 (2,541,055.55) (906,297.18) (904,467.92)Purchase of Fixed Assets (697,142,862.05) (506,924,804.06) (384,115,423.02) (276,209,395.05)Increase (Decrease) in Accounts Payablefor Assets Purchased-Subsidiary Company - - - (852,144.94)Increase (Decrease) in Accounts Payable forAssets Purchased and Construction Works (246,622,694.85) (54,466,157.01) (6,290,644.04) (31,258,637.18)Sales of Fixed Assets - 97,312,564.56 32,989,178.70 45,769,880.17(Increase) Decrease in Lease andService Contract Bond (15,022,228.88) 1,873,400.00 (6,108,424.59) 2,600,000.00Cash paid for Prepaid Leasehold Rightsfee Repayable instead of Subsidiary Companies - (50,000,000.00) - (50,000,000.00)(Increase) Decrease in Building AreaLeasehold Rights (80,686,382.22) (64,000,000.00) (24,922,897.20) (64,000,000.00)(Increase) Decrease in Land Leasehold Rights - (20,000,000.00) - -(Increase) Decrease in Deferred FilmCopy Right (159,220,975.44) (91,718,510.98) - -(Increase) Decrease in Prepaid Deposit - (1,754,350.00) - -(Increase) Decrease in Other Non -Current Assets (276,148.81) 4,269,110.33 4,020,485.52 1,561,772.71

NET CASH PROVIDED (USED)NET CASH PROVIDED (USED)NET CASH PROVIDED (USED)NET CASH PROVIDED (USED)NET CASH PROVIDED (USED)FROM INVESTING ACTIVITIESFROM INVESTING ACTIVITIESFROM INVESTING ACTIVITIESFROM INVESTING ACTIVITIESFROM INVESTING ACTIVITIES (1,168,479,710.41) (1,061,335,218.23) (1,166,981,708.16) (1,177,938,395.24)CASH FLOW FROM FINANCING ACTIVITIESCASH FLOW FROM FINANCING ACTIVITIESCASH FLOW FROM FINANCING ACTIVITIESCASH FLOW FROM FINANCING ACTIVITIESCASH FLOW FROM FINANCING ACTIVITIESIncrease (Decrease) in Bank Overdraft 31,865,362.06 2,019,520.67 772,077.84 (187,409.11)

Increase (Decrease) in Short -Term Loan due to Finance Institute (395,067,447.73) 123,067,447.73 170,000,000.00 200,000,000.00Increase (Decrease) in Liabilities underFinancial Lease Agreement (57,497,276.75) (101,323,389.53) (56,549,833.10) (93,979,440.69)Increase (Decrease) in Loans fromSubsidiary and Related Companies - - (36,548,800.00) 94,959,349.00Increase (Decrease) in Loans fromOthers Companies (29,009,850.00) (37,758,099.87) - -Increase (Decrease) in Long - Term Loans 486,000,000.00 993,100,000.00 589,000,000.00 1,001,000,000.00Increase (Decrease) in Rental Bond 12,482,447.70 (883,084.18) 4,544,136.55 (1,744,664.00)

MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES CASH FLOW STATEMENTS CASH FLOW STATEMENTS CASH FLOW STATEMENTS CASH FLOW STATEMENTS CASH FLOW STATEMENTS



81

MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES CASH FLOW STATEMENTS CASH FLOW STATEMENTS CASH FLOW STATEMENTS CASH FLOW STATEMENTS CASH FLOW STATEMENTS



Increase (Decrease) in Other Non - Current Liabilities (1,814,970.89) 590,698.69 (5,274,963.97) 4,450,452.71

Cash Received from Share Subscription - 22,621,452.00 - 22,620,752.00Dividend Payment (212,706,220.28) (352,626,000.00) (212,706,220.28) (352,626,000.00)

NET CASH PROVIDED (USED)NET CASH PROVIDED (USED)NET CASH PROVIDED (USED)NET CASH PROVIDED (USED)NET CASH PROVIDED (USED)FROM FINANCING ACTIVITIESFROM FINANCING ACTIVITIESFROM FINANCING ACTIVITIESFROM FINANCING ACTIVITIESFROM FINANCING ACTIVITIES (165,747,955.89) 648,808,545.51 453,236,397.04 874,493,039.91

Cash on Hand and Cash EquivalentCash on Hand and Cash EquivalentCash on Hand and Cash EquivalentCash on Hand and Cash EquivalentCash on Hand and Cash EquivalentIncrease(Decrease)-NetIncrease(Decrease)-NetIncrease(Decrease)-NetIncrease(Decrease)-NetIncrease(Decrease)-Net 2,433,778.79 204,610,795.63 37,353,239.45 54,230,325.91Cash on Hand and CashCash on Hand and CashCash on Hand and CashCash on Hand and CashCash on Hand and CashEquivalent at Beginning of the PeriodEquivalent at Beginning of the PeriodEquivalent at Beginning of the PeriodEquivalent at Beginning of the PeriodEquivalent at Beginning of the Period 320,847,645.76 116,236,850.13 109,066,175.33 54,835,849.42Cash on Hand and CashCash on Hand and CashCash on Hand and CashCash on Hand and CashCash on Hand and CashEquivalent at Ending of the PeriodEquivalent at Ending of the PeriodEquivalent at Ending of the PeriodEquivalent at Ending of the PeriodEquivalent at Ending of the Period 323,281,424.55 320,847,645.76 146,419,414.78 109,066,175.33

Additional Disclosure :Additional Disclosure :Additional Disclosure :Additional Disclosure :Additional Disclosure :

Cash Payment During The Year

1. Interest Paid 105,640,534.71 86,265,106.04 66,830,304.08 43,370,403.02 2. Corporate Income Tax 165,235,374.01 147,343,978.70 59,650,662.43 75,254,309.11 3. Cash Payment to Purchase Investment in Subsidiary Companies Calculated as Follows:

Investment in Subsidiary Company - - 79,999,300.00 -Fair Value of Subsidiaries at acquisition(in accordance to Shareholding) - 993,621,699.57 - 1,143,620,999.57Goodwill - 146,543,267.10 - 146,543,267.10Cost of Business Acquisition OverFair Value of Subsidiaries 953,587.61 816,939,353.70 953,587.61 816,939,353.70Minority Shareholders' Interest 899,017.39 - 899,017.39 -Cost of Business Acquisition 1,852,605.00 1,957,104,320.37 81,851,905.00 2,107,103,620.37Less Purchased Transactions by share swap - (1,557,094,929.00) - (1,557,094,929.00)Cash payable to purchase investment 1,852,605.00 400,009,391.37 81,851,905.00 550,008,691.37Less Cash and Cash Equivalentof subsidiary companies - (102,764,257.85) - -Net cash purchase of acquisition 1,852,605.00 297,245,133.52 81,851,905.00 550,008,691.37

4.Investments Activities made not affecting Cash Flow StatementPurchase of Fixed Assets in Aggregate Cost 906,357,406.93 542,803,533.53 406,162,264.26 286,825,593.58Unpaid Liabilities Payable from Investment in Building and Equipment During this periodAccount Payable for Assets Purchasedand Construction Works 207,851,544.88 34,454,691.67 4,568,463.84 9,192,160.73Liabilities under Financial Lease Agreement 1,363,000.00 1,424,037.80 1,363,000.00 1,424,037.80Paid from debt offsetting with account receivable - - 16,115,377.40 -

5.Transaction of Debt Receipt which not affect Cash Flow from debt offsetting - - 82,771,458.25 81,393,525.78 6.Cash on Hand and Cash Equivalent

Cash on hand 42,365,805.19 26,857,488.52 24,903,882.00 15,063,213.00Bank Deposit - Current Accounts 17,902,845.68 40,083,145.37 4,818,589.36 21,993,239.62Bank Deposit - Saving Accounts 263,007,375.98 253,890,592.80 116,696,943.42 72,009,722.71Bank Deposit - Fixed Accounts 5,397.70 16,419.07 - - Total 323,281,424.55 320,847,645.76 146,419,414.78 109,066,175.33

The Company Only 7. For the year ended on December 31, 2004, the company has dividends from subsidiary company amount of Baht 27.92 million which

take to offset debt with accounts payable for assets purchased-subsidiary company and these transaction non-effect cash flow of the company. 8. For the year ended on December 31, 2005, the company sold bowling equipment to one subsidiary in the price of Baht 116.78 millionswhich there is no receipt of repayment. 9. For the year ended on December 31, 2005, the company received accrued interest receivable by amount of Baht 14.93 millions byoffsetting against related trading payable in amount of Baht 11.27 millions and accrued interest in amount of Baht 3.67 millions. 10. For the year ended on December 31, 2005, the company had transferred leasehold right fee which paid in advance to subsidiarycompanies in amount of Baht 200.00 million to Loan to Subsidiary Companies.Consolidated 11. For the year ended on December 31, 2005, the subsidiary company purchased copyright of film in amount of Baht 215.84 millionswhich there is no paid of repayment.

82

MAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITEDMAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITEDMAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITEDMAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITEDMAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITEDAND ITS SUBSIDIARY COMPANIESAND ITS SUBSIDIARY COMPANIESAND ITS SUBSIDIARY COMPANIESAND ITS SUBSIDIARY COMPANIESAND ITS SUBSIDIARY COMPANIES

NOTES TO FINANCIAL STATEMENTSNOTES TO FINANCIAL STATEMENTSNOTES TO FINANCIAL STATEMENTSNOTES TO FINANCIAL STATEMENTSNOTES TO FINANCIAL STATEMENTSDECEMBER 31, 2005 AND 2004DECEMBER 31, 2005 AND 2004DECEMBER 31, 2005 AND 2004DECEMBER 31, 2005 AND 2004DECEMBER 31, 2005 AND 2004

1. Basis of Financial Statement Preparation1. Basis of Financial Statement Preparation1. Basis of Financial Statement Preparation1. Basis of Financial Statement Preparation1. Basis of Financial Statement Preparation

1.1 The financial statements were prepared in accordance with the generally accepted accounting principlesunder the Accounting Act B.E. 2543 which is the accounting standard determined by the Institute of Certified Accoun-tants under the Accounting Act B.E. 2547. To classified transactions in the financial statements, it must be comply withthe Board of Supervision of Auditing Practices, appointed by Minister of Commerce under the Accounting Act. B.E. 2544,resolved and announced to be implemented and in accordance with the determination of the office of the Securities andExchange Commission on the subject of preparation and presentation of the financial reports.

1.2 In order to prepare the financial statements to comply with generally accepted accounting standards, theCompany's management had to make some estimates and suppositions which may have an effect on the amount shownfor revenues, expenses, assets and liabilities and also on the disclosures concerning assets and contingent liabilities,therefore the actual result may differ from the estimated amount.

1.3 In accordance with the consolidated and the Company financial statements as of December 31,2004, were reclassified accounting items in order to comparing the financial statements for the year ended onDecember 31, 2005.

2. General Information2. General Information2. General Information2. General Information2. General Information2.1 Additional information concerning the parent company and subsidiary companies as shown in the consoli-

dated financial statements and the financial statements of the company only is as follows :

Company NameCompany NameCompany NameCompany NameCompany Name RegisteredRegisteredRegisteredRegisteredRegistered RegisteredRegisteredRegisteredRegisteredRegistered Type ofType ofType ofType ofType ofDateDateDateDateDate NumberNumberNumberNumberNumber Business Business Business Business Business

Major Cineplex Group Public Company Limited 22 Feb 2002 40854500677 Cinema services,immovable property for rent andentertainment services,sales food and beverage.

Major Cineplex Property Co., Ltd. 7 Jul 1994 (2)2930/2537 Building for rent.Major Cineplex Service Co., Ltd. 13 Feb 1997 (4)307/2540 Utilities services.Chiang Mai Cineplex Co., Ltd. 16 Nov 2000 (2)1502/2543 Cinema services,

sales food beverage andimmovable property for rent.

Company NameCompany NameCompany NameCompany NameCompany Name RegisteredRegisteredRegisteredRegisteredRegistered RegisteredRegisteredRegisteredRegisteredRegistered Type ofType ofType ofType ofType ofDateDateDateDateDate NumberNumberNumberNumberNumber BusinessBusinessBusinessBusinessBusiness

Major Bowl Co., Ltd. 28 Jan 1997 (4)183/2540 Entertainment services,(Presently, itssales food and beverage.business is liquidated)

Ratchayothin Realty Co., Ltd. 3 Sep 1996 (1)2123/2539 Building for rent.Ratchayothin Cinema Co., Ltd. 4 Jun 1998 (4)589/2541 Cinema services,

sales food and beverage.Major Bowl Group Co., Ltd. 4 Jun 1998 (4)590/2541 Entertainment services,

sales food and beverage.Major Cinema Co., Ltd. 3 Jun 1999 (4)572/2542 Cinema services,

(Presently, itssales food beverage andbusiness is liquidated)immovable property for rent.

Ratchayothin Management Co., Ltd. 13 Feb 1997 (4)306/2540 Utilities services.Major Cinead Co., Ltd. 24 Oct 2001 Kor Tor 05-0289-44 Advertising services and

business advisory services.Bangkok Imax Theater Co., Ltd. 11 Jan 2001 (2)51/2544 Cinema services,

sales food and beverage.Udorn Five Star Cineplex Co., Ltd. 1 Oct 2003 10554601114 Cinema services,

sales food and beverage.Siam Cineplex Co., Ltd. 26 Apr 2004 0108254704840 Cinema services,

sales food and beverage.EGV Entertainment Public Co., Ltd. 3 Sep 2002 40854500695 Cinema services,

sales food and beverage.EGV Entertain Golden Village Exhibition Co., Ltd. 28 Sep 1995 (3) 2232/2538 Cinema services,

Advertising services,Area for rent ofsales food beverage

EGV Exhibition Co., Ltd. 27 Dec 1996 (3) 2547/2539 Cinema services,Advertising servicesArea for rent of

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sales food beverageEGV Five Star Co., Ltd. 19 May 2000 Bor Or Jor

Cinema services,Nor Mor 2070Advertising services,Area for rent ofsales food beverage

Exertainment Co., Ltd. 21 Aug 2003 10554600922 Business Operation in re-spect of

Health Center, exercise cen-ter and

Other related servicePacific Marketing and Entertainment Group Co., Ltd. 16 Aug 2002 (2)121012540 Sales VCD, DVD and Film

Copy RightPacific Media Sale Co., Ltd. 13 Dec 2004 0107554726053 Sale/Rent Tape, CD, VDOTape,

VCD and DVDM Pictures Co., Ltd. 25 Nov 2005 0105548154744 Distribution, let and agent

representative in the distri-bution film VCD and DVD

2.2 Company's locations are as following:

Major Cineplex Group Public Company Limited Head office 1839 Phaholyothin Road, Ladyao, Chatuchak, Bangkok.Major Cineplex Property Co., Ltd. Head office 1221/39 Sukumvit Road , Klong Tan Neau ,Wattana, Bangkok. Branch 1 439 Moo.2 Phaholyothin Road, Prachathipud, Tunyaburi, Prathumtanee.Major Cineplex Service Co., Ltd. Head office 1221/39 Sukumvit Road, Klong Tan Neau, Wattana, Bangkok. Branch 1 439 Moo.2 Phaholyothin Road, Prachathipud , Tunyaburi, Prathumtanee.Chiangmai Cineplex Co., Ltd. Head Office 1839 Phaholyothin Road, Ladyao, Chatuchak, Bangkok. Branch 1 Chiangmai, 2 Central Airport Plaza Building, 4th Floor, Mahidon Road, Haiya, Muang, Chiang Mai.Ratchayothin Realty Co., Ltd. 1839 Phaholyothin Road, Ladyao, Chatuchak, Bangkok.Ratchayothin Cinema Co., Ltd. 1839 Phaholyothin Road, Ladyao, Chatuchak, Bangkok.Siam Cineplex Co., Ltd. 1839 Phaholyothin Road, Ladyao, Chatuchak, Bangkok.Ratchayothin Management Co., Ltd. 1839 Phaholyothin Road, Ladyao, Chatuchak, BangkokMajor Cinead Co., Ltd. 1839 Phaholyothin Road, Ladyao, Chatuchak, BangkokBangkok Imax Theater Co., Ltd. 1839 Phaholyothin Road, Ladyao, Chatuchak, Bangkok.Major Bowl Group Co., Ltd. Head office 1839 Phaholyothin Road, Ladyao, Chatuchak, Bangkok As of December 31, 2005 and 2004 constitutes number of 16 branches and 4 branches respectively.EGV Entertainment Public Co., Ltd. Head office 1839 Phaholyothin Road, Ladyao, Chatuchack, Bangkok.

As of December 31, 2005 and 2004 constitutes number of 9 branches for two years.Entertainment Golden Village Exibition Co., Ltd. Head office 1839 Phaholyothin Road, Ladyao, Chatuchack, Bangkok.EGV Fivestar Co., Ltd. 1242/2 Mitrapap Road, Naimang, Nakornratchsema.EGV Exibition Co., Ltd. Head office 1839 Phaholyothin Road, Ladyao, Chatuchack, Bangkok. As of December 31, 2005 and 2004 constitutes equal number of 3 branches for two years.Exertainment Co., Ltd. 989 Rama 1 Road, Phathomwan, Phathomwan, Bangkok.Pacific Marketing and Entertainment Group Co., Ltd. 598 5th Q.HOUSE Ploenjit Lumpinee, Pathumwan, Bangkok.Pacific Media Sales Co., Ltd. 598 5th Q.HOUSE Ploenjit Lumpinee, Pathumwan, Bangkok.M Pictures Co., Ltd. 18 Building of Plaza Park Siam Commercial, Rajchadapisek Road., Chatuchak, Chatuchak, Bangkok.

2.3 Branch's information

The Major Cineplex Group Public Company Limited has continuously been opening new branches so theStatements of Income for the year ended on December 31, 2005 and 2004 show a combined operating resulf for 17branches and 14 branches respectively.

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3. Merger3. Merger3. Merger3. Merger3. MergerAs of July 14, 2004, the extra - ordinary shareholders meeting no. 1/ 2004, it is resolved that the Company to

make a tender offer to acquire all shares of EGV Entertainment Public Co., Ltd. and subsidiary ("EGV") by means of ashare swap, with no cash alternative. The Company proceeded with the increment of registered share capital of thecompany by number of 125.0 million shares, par value of Baht 1 per share and offered such increased shares to EGVEntertainment Public Co., Ltd. shareholders in the ratio as follows 1 new share of the Company to 2.27426 EGV sharesand 1 new share of the Company to 11.44905 units of EGV Entertainment Public Co., Ltd. warrant. Moreover, it is resolvedthe listing of the increased shares to swap for the shares of EGV on the Stock Exchange of Thailand, followingcompletion of the share swap.

In August 2004, the Company filed notice of tender offer EGV Entertainment Public Co., Ltd. shares withthe Securities and Exchange Commission. The period of the purchase is commenced from August 24, 2004 to September27, 2004. As of the period of the purchase date ended, the Company had been able to acquire EGV Entertainment PublicCo., Ltd. shares by number of 259,522,559 shares which equivalent to 99.82 % of EGV Entertainment Public Co., Ltd.shares already issued and warrants by number of 64,851,000 units. The Company issued increased ordinary shares bynumber of 114,112,425 shares and 5,664,108 shares, par value of Baht 1 per share in order to exchange with EGVEntertainment Public Co., Ltd. shares and EGV Entertainment Public Co., Ltd. warrants, respectively. As a result, EGVEntertainment Public Co., Ltd. becomes subsidiary of the Company. However, EGV Entertainment Public Co., Ltd.requested the delisting of its shares from the Stock Exchange of Thailand, and the Board of the Stock Exchange ofThailand approved such delisting since October 12, 2004.

4. Summary of Significant Accounting Policies4. Summary of Significant Accounting Policies4. Summary of Significant Accounting Policies4. Summary of Significant Accounting Policies4. Summary of Significant Accounting Policies

4.1 Recognition of income by the Company and subsidiaries is done as follows:4.1.1 Revenue from Cinema Business

- Revenue from the sale ticket are recognized when the film is already on service.- Revenue from sale foods and beverages are recognized when goods are sold to customer.- Revenue from the sale of Gift Voucher is recognized as revenue in accordance with period of service.

4.1.2 Revenue from Bowling and Karaoke Business- Revenue from games, services, amusements and goods are recognized when service or goods have been provided to customer.

4.1.3 Revenue from Rentals and Services Business- Rent and service revenue are recognized when service has been provided to customer.- Revenue from deferred leasehold rights and deferred services are recognized as revenue by the company over the average lease and service contract period by straight line method over the esti mated 23-26 years.- Revenue from public utility is recognized when the service has been provided to customer.

4.1.4 Revenue from Advertisement Business- Revenue from advertisement is recognized when the service has been provided to customer.

4.1.5 Revenue from business of distribution of VCD, DVD and film copyright- Revenue from the distribution of VCD and DVD is recognized when the merchandise is already handovered to customer.- Participating revenue of film copyright, which is shown in the cinema is recognized when the service has been provided.- Revenue from the distribution of film copyright so as for broadcasting via cable TV and free television is recognized as revenue when the right is handovered.

4.1.6 Revenue from the Fitness Business- Revenue from enrollment fee of new membership is recognized as revenue on the transaction dated.- Revenue of monthly membership fee is recognized as revenue in the period in which services are provided, while the term membership fee with the pre-collection type is recognized as revenue based on membership agreement period.

4.1.7 Other Revenue- Interest revenue when it is received, calculated on the accrued principal balance.- Revenue from management is recognized when the service has been provided to customer.- Revenues of sales promotion support are recognized when the sale promotion support is already granted.

4.2 The Company and its subsidiary recorded expenses on an accrual basis.4.3 Cash and equivalent to cash transactions includes bank deposit in type of current, saving and not exceeding three - month fixed deposit with no guarantee obligation.4.4 Short-Term investment is trading securities reflected by fair value. Gain (loss) derived from disposal of trading securities and unrealized gain (loss) derived from the adjustment of fair value is recognized as revenue or expense in the statement of income.4.5 Allowance for doubtful debt is estimated from trade receivable and each note receivable which are

unlikely to be collectable.4.6 Estimate of allowance of debt reduction which incurred from the returned receipt of merchandise, VCD and DVD is computed from average estimated rate of returned merchandise multiplied with sales of

merchan dise which customers can return merchandise.4.7 Inventories are valued at cost or net realisable value whichever is lower as following :

- Foods and Beverages are valued at cost under FIFO method.- VCD and DVD are valued at cost under average method.

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4.8 Estimate of cost of merchandise returned of VCD and DVD is computed from average estimation rateof merchandise returned multiplied with sales of merchandise which customers can return merchandise de ducted by gross profit margin rate from average sales of merchandise.

4.9 Investment in subsidiaries is recorded by equity method.4.10 Film copyright is recorded in accordance with cost price by allocation of copyright cost to copyright

fee of film, VCD and DVD and free television in accordance with the proportion of revenue in thehistory and amortised to expense which is divided into 2 types as follows:- Film copyright which is shown in the cinema is amortized as expense when film is shown in cinema

. - Film copyright which is not shown in the cinema is amortized as expense when there is preparationin form of VCD and DVD and distribution of copyright so as for broadcasting via free television

4.11 Goodwill is amortized in accordance with the straight line method for the period of 10 years commenced from the date of entity acquisition.

4.12 Negative goodwill is reflected as transaction deducted from assets in the balance sheet by amortizedin accordance with the straight line method according with the remaining useful life for definableassets of subsidiary Companies for the period of 2 years, 2.3 years, 9.3 years and 17.3 yearscommenced from the date of entity acquisition.

4.13 Building and equipment are recorded at cost on the transaction date and the depreciation is computed by straight line method in accordance with the useful life by estimated as follows :

Buildings 20 YearsTheatres 5,10,20 Years and the life of leased contractTheatre Improvements, Office Building Improvements and Systems 5,10 YearsTools and equipment 5,10,15 YearsFurniture and Fixtures 5 YearsVehicles 5 YearsUtilities System 5 Years

4.14 Cost of loan, interest expense incurred from loan carried to use in the construction of assets iscombined as cost price of assets until such assets are ready to be used in accordance with thepurpose or alternatively the construction is ceased.

4.15 Deferred land leased right and deferred leasehold right of Buliding area are recorded as expense byaveraged pursuant to the life of leased contract by STRAIGHT LINE METHOD for the period of 9 years,20 years , 25 years and 27 years.

4.16 The financial instrument, the financial assets reflected in the balance sheet consist of cash and bankdeposit, investment, trade accounts receivable, Financial liabilities reflected in the balance sheetconsist of loans, trade accounts payable which the particular accounting policy for each transactionis separately disclosed in each related caption.

4.17 Items denominated in foreign currencies are recorded at the exchange rates ruling on the day thattransactions occurred, while the remaining balances of assets and liabilities denominated in foreign

curren cies at the year end are converted into at the prevailing rates on that date, and the gain or lossarising from such conversion is included in the related income statements.

4.18 The basic earning per share is computed by divided net profit for the year by the number of weightedaverage of common stocks which hold by outside party issued during the year.

Diluted earning per share is computed by divided net profit for the year by aggregate amountof weighted average number of common stock issued during the year and the weighted averagenumber of common stock which the Company may have to issue for conversion of the whole ofwarrants to common stocks.

4.19 Appropriation of retained earnings is complied with the public company Act, B.E. 2535 and publiccompany Act B.E. 2544 where by the company will appropriate as legal reserve when it is approved bythe shareholders meetings.

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5. Basis of Consolidated Financial Statements Preparation5. Basis of Consolidated Financial Statements Preparation5. Basis of Consolidated Financial Statements Preparation5. Basis of Consolidated Financial Statements Preparation5. Basis of Consolidated Financial Statements Preparation5.1 In preparation of the consolidated financial the company will only take its subsidiary companies which

is under the main control of Major Cineplex Group Public Company Limited into account. Which , TheCompany holds shares in subsidiary companies with the percentage of shareholding as follow :

Company NameCompany NameCompany NameCompany NameCompany Name Shareholding Percentage Ending of Country Shareholding Percentage Ending of Country Shareholding Percentage Ending of Country Shareholding Percentage Ending of Country Shareholding Percentage Ending of Country As of As of Accounting Period As of As of Accounting Period As of As of Accounting Period As of As of Accounting Period As of As of Accounting Period

December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 20052005200520052005 20042004200420042004

Major Cineplex Property Co., Ltd. 99.99 99.99 December 31 ThailandMajor Cineplex Service Co., Ltd. 99.99 99.99 December 31 ThailandChiangmai Cineplex Co., Ltd. 99.99 99.99 December 31 ThailandRatchayothin Realty Co., Ltd. 99.99 99.99 December 31 ThailandRatchayothin Cinema Co., Ltd. 99.99 99.99 December 31 ThailandMajor Bowl Group Co., Ltd. 99.99 99.99 December 31 ThailandRatchayothin Management Co., Ltd. 99.99 99.99 December 31 ThailandMajor Cinead Co., Ltd. 99.93 99.93 December 31 ThailandBangkok Imax Theater Co., Ltd. 99.94 99.94 December 31 ThailandUdorn Five Star Cineplex Co., Ltd. 80.00 80.00 December 31 ThailandSiam Cineplex Co., Ltd. 99.99 99.99 December 31 ThailandEGV Entertainment Public Co., Ltd. 99.97 99.82 December 31 ThailandPacific Marketing and Entertainment Group Co., Ltd. 80.00 80.00 December 31 ThailandM Pictures Co., Ltd. 79.99 - December 31 Thailand

5.2 The consolidated financial statements combine the subsidiaries which is under the control of EGVEntertainment Public Co., Ltd. which is holding share in subsidiary in accordance with the proportionas follows:

Company Name Percentage Of Shareholding Ending of CountryCompany Name Percentage Of Shareholding Ending of CountryCompany Name Percentage Of Shareholding Ending of CountryCompany Name Percentage Of Shareholding Ending of CountryCompany Name Percentage Of Shareholding Ending of Country As of As of As of As of As of As of AccountingAs of AccountingAs of AccountingAs of AccountingAs of Accounting December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, Period Period Period Period Period

20052005200520052005 20042004200420042004

EGV Entertain Golden Village Exhibition Co., Ltd. 99.82 99.82 December 31 ThailandEGV Exhibition Co., Ltd. 99.82 99.82 December 31 ThailandEGV Five Star Co., Ltd. 89.84 89.84 December 31 ThailandExertainment Co., Ltd. 59.89 59.89 December 31 Thailand

5.3 The consolidated financial statements combine the subsidiary which is under the control of PacificMarketing and Entertainment Group Co., Ltd. which is holding share in subsidiary in accordance with the proportion asfollows.

Company Name Company Name Company Name Company Name Company Name Percentage Of Shareholding Percentage Of Shareholding Percentage Of Shareholding Percentage Of Shareholding Percentage Of Shareholding Ending of Ending of Ending of Ending of Ending of Country Country Country Country Country As of As of As of As of As of As of As of As of As of As of AccountingAccountingAccountingAccountingAccounting December 31, December 31, December 31, December 31, December 31, December 31, Period December 31, Period December 31, Period December 31, Period December 31, Period 20052005200520052005 20042004200420042004

Pacific Media Sale Co., Ltd. 79.52 79.52 December 31 Thailand

5.4 On September 27, 2004 , The Company invested in ordinary shares of EGV Entertainment Public Co.,Ltd. and its subsidiary. Moreover, on September 28, 2004, the company invested in ordinary sharesof Pacific Marketing and Entertainment Group Co., Ltd., which is regarded as subsidiary. As a result,the consolidated statement of income for the year ended on December 31, 2004, includes revenue andexpense of EGV Entertainment Public Co., Ltd. and its subsidiary and Pacific Marketing and Entertain

87

ment Group Co., Ltd. for the period from October 1, 2004 to December 31, 2004.5.5 On November 17 , 2004, the Major Bowl Co., Ltd. and Major Cinema Co., Ltd., which are subsidiaries

retired their business and accounting is liquidated. The Company received ordinary shares subscription from the two subsidiaries. As a result , the consolidated statement of income for the year endedon December 31, 2004 includes revenue and expense of Major Bowl Co., Ltd. and Major Cinema Co.,Ltd. for the period from January 1, 2004 to November 17, 2004.

5.6 Investment in subsidiaries which the Company holding shares from 99.90% in the preparation of consolidatedfinancial statements and the record of investment in subsidiaries by equity method, the Company computessuch investment in subsidiaries as if the Company is holding 100% of registered share capital.

5.7 The consolidated financial statements are prepared under the rules and regulation of The StockExchange of Thailand with the only objective to show the combined financial position and operatingresult of the Major Cineplex Group Public Company Limited and its subsidiaries. Use of information inthe consolidated financial statements for any other purpose may be restricted by the differences inbusiness nature of its subsidiaries.

5.8 The preparation of consolidated financial statement were eliminated significant inter-assets andliabilities and inter-transaction.

5.9 Accounting policy for the subsidiary companies will utilize the same policy as that of theMAJOR CINEPLEX GROUP PUBLIC COMPANY LIMITED. in the preparation of the consolidated financial statements.

6. Inter-Transaction6. Inter-Transaction6. Inter-Transaction6. Inter-Transaction6. Inter-TransactionThe Company had significant inter-transactions with the subsidiary companies, associated companies, related

companies and directors which could be summarized as follows:6.1 Inter-income and expenses

Consolidated For the Year

Ended on December 31, 2005 2004

'000 Baht '000 BahtRevenueRevenueRevenueRevenueRevenueManagement Fee Income

Wel Cineplex Co., Ltd. 4,800 4,800ExpensesExpensesExpensesExpensesExpensesExpense Recorded as Capital Expenditure

Wel Ad Co., Ltd. 23,400 23,400Common Area Service Revenue Siam Future Development Public Co., Ltd. 2,528 1,851Public Uitlity Expense Siam Future Development Public Co., Ltd. 1,622 1,359

The Company Only For the Year

Ended on December 31, 2005 2004

'000 Baht '000 BahtIncomeIncomeIncomeIncomeIncome

Management Fee IncomeRatchayothin Cinema Co., Ltd. 32,232 29,964

Chiangmai Cineplex Co., Ltd. 23,047 23,769 Major Cinead Co., Ltd. 197,147 117,581 Major Bowl Group Co., Ltd. 6,000 6,000 Ratchayothin Management Co., Ltd. 4,800 4,830 Ratchayothin Realty Co., Ltd. 400 4,548 Wel Cineplex Co., Ltd. 4,800 4,800 Udorn Five Star Cineplex Co., Ltd. 3,600 -Advertising Income

Major Cinead Co., Ltd. 118,500 58,800Assets Rent Revenue Ratchayothin Cinema Co., Ltd. 606 1,047 Major Bowl Group Co., Ltd. 35,150 -

88

The Company Only For the YearEnded on December 31, 2005 2004'000 Baht'000 Baht'000 Baht'000 Baht'000 Baht '000 Baht'000 Baht'000 Baht'000 Baht'000 Baht

Interests Revenue Major Cineplex Property Co., Ltd. 2,217 1,483 Major Cineplex Service Co., Ltd. 1,219 1,785 Ratchayothin Cinema Co., Ltd. 1,010 2,250 Ratchayothin Management Co., Ltd. 3,194 2,219 Major Bowl Group Co., Ltd. 6,940 - Ratchayothin Realty Co., Ltd. 72 718 EGV Entertainment Public Co.,Ltd 18,498 326 Udorn Five Star Cineplex Co., Ltd. - 358 Bangkok Imax Theater Co., Ltd. 1,183 - Siam Cineplex Co., Ltd. 5,151 -

The Company Only For the YearEnded on December 31, 2005 2004'000 Baht'000 Baht'000 Baht'000 Baht'000 Baht '000 Baht'000 Baht'000 Baht'000 Baht'000 Baht

Sale Gift Voucher RevenueMajor Cinead Co., Ltd. 8,598 2,852

Major Bowl Group Co., Ltd. 1,272 - EGV Entertainment Public Co.,Ltd - 3,022Other Income

Major Cinead Co., Ltd. - 2,000 Major Bowl Group Co., Ltd. - 901 EGV Entertainment Public Co.,Ltd 3,930 - Udorn Five Star Cineplex Co., Ltd. 3,600 -ExpensesExpensesExpensesExpensesExpensesRentals Expense

Major Cineplex Property Co., Ltd. 29,700 39,601Assets Rent Expense

EGV Entertainment Public Co.,Ltd 27,000 -Common Area Service Expense

Major Cineplex Service Co., Ltd. 25,050 33,600Electricity Expense

Major Cineplex Service Co., Ltd. 6,778 7,634Premises Tax

Major Cineplex Property Co., Ltd. 3,713 4,950Expense Recorded as Capital Expenditure

Wel Ad Co., Ltd. 23,400 23,400Interest Expense Chiangmai Cineplex Co., Ltd. 941 420 Major Cinema Co., Ltd. - 479 Major Bowl Group Co., Ltd. - 214 Siam Cineplex Co., Ltd. - 266 Major Bowl Co., Ltd. - 833 Ratchayothin Realty Co., Ltd. 811 - Ratchayothin Cinema Co., Ltd. 251 -

The Company Only For the Year

Ended on December 31, 2005 2004'000 Baht '000 Baht

Sale Promotion ExpenseRatchayothin Cinema Co., Ltd. - 393

Major Bowl Group Co., Ltd. - 1,097Cost from used Gift Voucher

Chiangmai Cineplex Co., Ltd. 1,498 708 Udorn Five Star Cineplex Co., Ltd. 556 288 Ratchayothin Cinema Co., Ltd. 11,901 5,620 Major Bowl Group Co., Ltd. 1,515 1,864 Bangkok Imax Theater Co., Ltd. 87 -Advertise Expense

Major Cinead Co., Ltd. - 1,485

89

Management Fee Revenue was received by the Company for acting as consultant and providing managementservices for several subsidiaries. Such services covered management, marketing, plus taking responsibility for variousjoint expenses and marketing overheads. The Management Fee was set at a fixed rate and/or to be a percentage of thesubsidiaries revenue as monthly mutually agreement.

Revenue, cost and expense incurred from sales and inter-service comprise the price determination as follows :-- Revenue from advertisement fee incurred by subsidiaries is determined in the package rate as monthly installment and equivalent to percentage rate of revenue in accordance with the inter-memorandum.- Space rental fee and central service fee is charged by lum sum rate per month pursuant to the mutually agreed-upon and / or percentage rates of revnue in accordance with mutually agreed upon.- Public utility fee is computed pursuant to quantity of actual usage, pursuant to rates which are mutually agreed upon.- Others in accordance with agreed-upon rate.

6.2 Inter-Assets and Liabilities

Consolidated The Company Only As of As of

December 31, 2005 December 31, 2004 December 31, 2005 December 31, 2004 '000 Baht '000 Baht '000 Baht '000 Baht

AssetsAssetsAssetsAssetsAssetsOther Account Receivable EGV Entertainment Public Co.,Ltd - - 1,014 - Major Cinead Co., Ltd. - - 912 - Major Bowl Group Co., Ltd. 1,809- - 3,735 -

Accounts Receivable - Advertisement Major Cinead Co., Ltd. - - 32,690 5,243Notes Receivable Ratchayothin Management Co., Ltd. - - - 1,338 Ratchayothin Realty Co., Ltd. - - - 1,091

- - - 2,429Accounts Receivable - Other Chiangmai Cineplex Co., Ltd. - - 5,075 2,970 Ratchayothin Cinema Co., Ltd. - - 2,882 - Major Bowl Co., Ltd. - - 103,008 55,151 Major Cinead Co., Ltd. - - 127,530 80,771 Udorn Five Star Cineplex Co., Ltd. - - 6,749 10,721 Bangkok Imax Theatre Co., Ltd. - - 3,210 - Siam Cineplex Co., Ltd. - - 64,105 - 4 Subsidiary Companies - - 428 -

- - 312,987 149,613

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Leasehold RightsPetchpinklao Co., Ltd. 67,403 54,000 67,403 54,000

Siam Future DevelopmentPublic Co., Ltd. 9,390 10,000 9,390 10,000

Loans toEGV Entertainment Public Co.,Ltd - - 569,640 20,000

Ratchayothin Management Co., Ltd. - - 44,600 71,000 Ratchayothin Realty Co., Ltd. - - - 16,000 Major Bowl Group Co., Ltd. - - 196,900 39,500 Major Cineplex Property Co., Ltd. - - 47,120 34,239 Ratchayothin Cinema Co., Ltd. - - - 39,850 Bangkok Imax Theatre Co., Ltd. - - 59,568 2,400 Major Cineplex Service Co., Ltd. - - 5,919 38,947 Media Logistic Co., Ltd. 2,350 2,950 - - Siam Cineplex Co., Ltd. - - 186,828 -

2,350 2,950 1,110,575 261,936

For the year ended on December 31, 2005 there were movement transactions of the loan to the subsidiary and associatedcompanies as follows:

(Unit : '000 Baht)

Balance Balance As of In the period As of

December 31, 2004 Increase Decrease December 31, 2005

ConsolidatedConsolidatedConsolidatedConsolidatedConsolidatedMedia Logistic Co., Ltd. 2,950 - (600) 2,350 The Company Only The Company Only The Company Only The Company Only The Company OnlyRatchayothin Cinema Co., Ltd. 39,850 9,400 (49,250) -Ratchayothin Management Co., Ltd. 71,000 1,000 (27,400) 44,600Ratchayothin Realty Co., Ltd. 16,000 - (16,000) -Major Bowl Group Co., Ltd. 39,500 256,150 (98,750) 196,900Major Cineplex Property Co., Ltd. 34,239 75,019 (62,138) 47,120Major Cineplex Service Co., Ltd. 38,947 13,500 (46,528) 5,919EGV Entertainment Public Co., Ltd. 20,000 585,000 (35,360) 569,640Bangkok Imax Theatre Co., Ltd. 2,400 79,568 (22,400) 59,568Siam Cineplex Co., Ltd. - 327,328 (140,500) 186,828

For the year ended on December 31, 2004 there were movement transactions of the loan to the subsidiary and relatedcompanies as follows :



Accrued Interest ReceivableRatchayothin Cinema Co., Ltd. - - 5 198

Ratchayothin Management Co., Ltd. - - 2,196 352 Ratchayothin Realty Co., Ltd. - - - 83 Major Cineplex Property Co., Ltd. - - 2,217 180 EGV Entertainment Public Co., Ltd. - - 11,764 326 Udorn Five Star Cineplex Co., Ltd. - - - 53 Major Cineplex Service Co., Ltd. - - 1,219 193 Major Bowl Group Co., Ltd. - - 3,598 43 Media Logistic Co., Ltd. 50 30 - - Bangkok Imax Theatre Co., Ltd. - - 998 - Siam Cineplex Co., Ltd. - - 2,335 -

50 30 24,332 1,428

91

(Unit : '000 Baht)



ConsolidatedConsolidatedConsolidatedConsolidatedConsolidatedMedia Logistic Co., Ltd. 2,950 - - 2,950 The Company OnlyThe Company OnlyThe Company OnlyThe Company OnlyThe Company OnlyRatchayothin Cinema Co., Ltd. - 247,654 (207,804) 39,850Ratchayothin Management Co., Ltd. - 153,680 (82,680) 71,000Ratchayothin Realty Co., Ltd. - 36,000 (20,000) 16,000Major Bowl Group Co., Ltd. - 40,500 (1,000) 39,500Major Cineplex Property Co., Ltd. 34,563 116,730 (117,054) 34,239Major Cineplex Service Co., Ltd.Q 29,860 94,213 (85,126) 38,947EGV Entertainment Public Co., Ltd.. - 30,000 (10,000) 20,000Udorn Five Star Cineplex Co., Ltd. - 10,751 (10,751) -Bangkok Imax Theatre Co., Ltd. - 4,400 (2,000) 2,400



LiabilitiesLiabilitiesLiabilitiesLiabilitiesLiabilitiesAccount Payable

Chiangmai Cineplex Co., Ltd. - - 678 46 Ratchayothin Cinema Co., Ltd. - - 3,292 1,572 Major Cinead Co., Ltd - - 1,836 - EGV Entertainment Public Co., Ltd. - - 8,062 - 4 Subsidiary Companies - - 682 -

- - 14,550 1,618

Accrued Interest ExpenseChiangmai Cineplex Co., Ltd. - - 432 31

Siam Cineplex Co., Ltd. - - - 266 Ratchayothin Realty Co., Ltd. - - 559 - Ratchayothin Cinema Co., Ltd. - - 246 -

- - 1,237 297

Accrued ExpenseMajor Cineplex Service Co., Ltd. - - 32 94

Ratchayothin Cinema Co., Ltd. - - - 111 Major Cinead Co., Ltd. - - - 629 Major Bowl Co., Ltd. - - - 1,105

- - 32 1,939

Suspended Output Tax Major Cinead Co., Ltd. - - 3,824 5,628 Major Bowl Group Co., Ltd. - - 35 1,023 Wel Cineplex Co., Ltd. - 308 - - 4 Subsidiary Companies - - 209 222

- 308 4,068 6,873

Rental Revenue Received in Advance Ratchayothin Cinema Co., Ltd. - - - 606

Loans fromChiangmai Cineplex Co., Ltd. - - 22,650 6,000

Siam Cineplex Co., Ltd. - - - 116,679 Ratchayothin Realty Co., Ltd. - - 36,880 - Ratchayothin Cinema Co., Ltd. - - 22,600 -

- - 86,130 122,679

92

For the year ended on December 31, 2005, there were movement transactions of the loan from the subsidiary companiesas follows:



The Company OnlyThe Company OnlyThe Company OnlyThe Company OnlyThe Company Only

Chiangmai Cineplex Co., Ltd. 6,000 30,000 (13,350) 22,650Siam Cineplex Co., Ltd. 116,679 - (116,679) -Ratchayothin Realty Co., Ltd. - 38,000 (1,120) 36,880Ratchayothin Cinema Co., Ltd. - 27,200 (600) 26,600

For the year ended on December 31, 2004, there were movement transactions of the loan from the subsidiary companiesand director as follows:



Consolidated Consolidated Consolidated Consolidated ConsolidatedMr. Pronchai Ungthanaphisan - 2,500 (2,500) - The Company OnlyThe Company OnlyThe Company OnlyThe Company OnlyThe Company OnlyMajor Bowl Co., Ltd. 15,969 - (15,969) -Chiangmai Cineplex Co., Ltd. 3,000 12,000 (9,000) 6,000Major Cinema Co., Ltd. 8,750 - (8,750) -Siam Cineplex Co., Ltd. - 149,679 (33,000) 116,679

Consolidated/ The Company Consolidated/ The Company Consolidated/ The Company Consolidated/ The Company Consolidated/ The Company OnlyOnlyOnlyOnlyOnlyAs of December 31, 2005 and 2004, the whole amount of loan to subsidiary companies to make loan contract together

with interest rate at 5.75%- 6.50 % per annum and 5.75%- 6.25 % per annum respectively.As of December 31, 2004 the whole amount of loan from director were loans in the form director to make loan contract

together carried at 1.00 % per annum.As of December 31, 2005 and 2004, loan due to subsidiary companies to make loan contract together carried

interest rate of 5.75%-6.50 % per annum and 5.75%-6.25 % per annum respectively.

93

6.3 Relationship to other Companies and Individuals

Consist of :

Name of company / personName of company / personName of company / personName of company / personName of company / person RelationshipRelationshipRelationshipRelationshipRelationshipMajor Cineplex Property Co., Ltd. Subsidiary by direct shareholdingMajor Cineplex Service Co., Ltd. Subsidiary by direct shareholdingChiangmai Cineplex Co., Ltd. Subsidiary by direct shareholdingMajor Bowl Co., Ltd. Subsidiary by direct shareholdingMajor Cinema Co., Ltd. Subsidiary by direct shareholdingRatchayothin Management Co., Ltd. Subsidiary by direct shareholdingRatchayothin Cinema Co., Ltd. Subsidiary by direct shareholdingRatchayothin Realty Co., Ltd. Subsidiary by direct shareholdingMajor Bowl Group Co., Ltd. Subsidiary by direct shareholding(former name Ratchayothin Bowl Co., Ltd.)Major Cinead Co., Ltd. Subsidiary by direct shareholdingBangkok Imax Theater Co., Ltd. Subsidiary by direct shareholdingUdorn Five Star Cineplex Co., Ltd. Subsidiary by direct shareholdingSiam Cineplex Co., Ltd. Subsidiary by direct shareholdingEGV Entertainment Public Co., Ltd. Subsidiary by direct shareholdingEntertain Golden Village Exhibition Co., Ltd. Subsidiary by indirect shareholdingEGV Exhibition Co., Ltd. Subsidiary by indirect shareholdingEGV Five Star Co., Ltd. Subsidiary by indirect shareholdingExertainment Co., Ltd. Subsidiary by indirect shareholdingPacific Marketing and Entertainment Group Co., Ltd. Subsidiary by direct shareholdingPacific Media Sale Co., Ltd. Subsidiary by indirect shareholdingM Pictures Co., Ltd. Subsidiary by direct shareholdingCalifornia Wow Xperience Co., Ltd. Associated by direct shareholding(former California Fitness Centers Co., Ltd.)Siam Future Development Public Co., Ltd. Associated by direct shareholdingI-Major Co., Ltd. Associated by direct shareholdingMedia Logistic Co., Ltd. Associated by indirect shareholdingMajor Online Co., Ltd. Associated by direct shareholdingWel Ad Co., Ltd. A related company with joint directorWel Cineplex Co., Ltd. A related company with related directorPetchpinklao Co., Ltd. A related company with related directorMr.Pornchai Ungthanaphisan Director of subsidiary companies

94

7. Adjusted transaction from the change of accounting policy of associated company7. Adjusted transaction from the change of accounting policy of associated company7. Adjusted transaction from the change of accounting policy of associated company7. Adjusted transaction from the change of accounting policy of associated company7. Adjusted transaction from the change of accounting policy of associated companyIn quarter 4 of 2004, California Wow Xperience Co., Ltd. which is an associated company constitutes the

change of accounting policy in respect of the recognition of revenue and expense so as to comply with the generalpractice guidance for the companies in the same business group. The result of such change of accounting policyresults in the investment value in California Wow Experience Public Co., Ltd. as of December 31, 2003 which isreflected by over-stated value of Baht 2.75 millions. The Company adjusted the rectification of such affect in 2004whereas the company adjusted the reduction of beginning retained earnings of 2004 by Baht 2.75 millions andadjusted the reduction of investment value in such associated company by the same amount.

8.Temporary Investment8.Temporary Investment8.Temporary Investment8.Temporary Investment8.Temporary Investment Consist of :

ConsolidatedAs of December 31, 2005 As of December 31, 2004Cost Fair value Cost Fair valueBaht Baht Baht Baht

Temporary investment in open fund 699,786.93 1,030,290.42 1,236,407.84 1,235,980.15 Total 699,786.93 1,030,290.42 1,236,407.84 1,235,980.15

The Company OnlyAs of December 31, 2005 As of December 31, 2004Cost Fair value Cost Fair valueBaht Baht Baht Baht

Temporary investment in open fund - - 171,030.39 172,430.94 Total - - 171,030.39 172,430.94

9. Accounts and Notes Receivable-Net9. Accounts and Notes Receivable-Net9. Accounts and Notes Receivable-Net9. Accounts and Notes Receivable-Net9. Accounts and Notes Receivable-NetConsist of :

Notes Receivable 13,262,266.24 19,241,188.94 1,081,901.70 3,123,062.72Account Receivable - Cinema Business 32,429,105.94 64,124,505.22 21,741,495.69 15,455,650.45Account Receivable - Bowling and Karaoke Business 2,841,405.45 1,538,239.31 1,809,440.00 1,006,332.76Account Receivable - Rentals and Services Business 14,675,442.71 16,124,624.52 - 2,114,121.97Account Receivable - Sales DVD andVCD Business 208,990,561.23 130,298,239.82 - - Total 272,198,781.57 231,326,797.81 24,632,837.39 21,699,167.90Less Allowance for Doubtful Debt (18,868,544.72) (12,520,729.58) (703,972.07) (491,107.80) Estimation of Account Receivable-Returned of of DVD and VCD Business (45,750,318.49) (67,780,095.05) - - Net 207,579,918.36 151,025,973.18 23,928,865.32 21,208,060.10

Accounts Receivable can be separated pursuant to Accounts Receivable Aging as follows :

Notes Receivable 13,262,266.24 19,241,188.94 1,081,901.70 3,123,062.72Accounts Receivable

Within credit term 158,974,378.72 112,876,036.27 13,204,741.41 16,297,090.95Over Due

1-30 Days 46,779,143.29 58,988,301.30 7,975,062.60 1,006,744.1531-60 Days 2,708,843.91 17,497,151.94 594,343.56 563,272.3361-90 Days 7,572,336.76 3,653,909.97 35,354.00 20,613.00

Consolidated The Company Only As of As ofDecember 31, 2005 December 31, 2004 December 31, 2005 December 31, 2004 Baht Baht Baht Baht


95




91-120 Days 10,053,817.52 2,228,547.12 53,238.03 15,820.00Over 120 Days 32,847,995.13 16,841,662.27 1,688,196.09 672,564.75

Total 272,198,781.57 231,326,797.81 24,632,837.39 21,699,167.90Less Allowance for Doubtful Debt (18,868,544.72) (12,520,729.58) (703,972.07) (491,107.80)

Estimation of Account Receivable-Returned ofSales DVD and VCD Business (45,750,318.49) (67,780,095.05) - - Net 207,579,918.36 151,025,973.18 23,928,865.32 21,208,060.10

10. Accounts Receivable-Advertisement-Net10. Accounts Receivable-Advertisement-Net10. Accounts Receivable-Advertisement-Net10. Accounts Receivable-Advertisement-Net10. Accounts Receivable-Advertisement-NetConsist of :

Accounts ReceivableWithin credit term 202,321,278.54 97,925,922.39 11,073,779.00 5,243,000.00Over Due 1-30 Days 1,824,670.93 27,470,135.52 10,636,180.00 -31-60 Days 4,586,530.85 75,365,169.39 10,785,380.00 -61-90 Days 2,557,954.00 2,702,659.50 21,190.00 -91-120 Days 454,750.00 1,144,365.00 49,534.00 -Over 120 Days 32,194,951.26 21,131,444.60 123,596.00 -

Total 243,940,135.58 225,739,696.40 32,689,659.00 5,243,000.00Less Allowance for Doubtful Debt (18,822,614.26) (120,968.00) - -

Net 225,117,521.32 225,618,728.40 32,689,659.00 5,243,000.00

As of December 31, 2005 trading account receivable which is overdue over 120 days up. Management is beingin the process of speed up of debt collection whereby as of February 20, 2006, such account receivable which is overduefor repayment has mainly repaid debt to the company. The management believes that the Company holds no risk in debtuncollection and allowance of doubtful debt which is recorded is sufficient.

11. Inventories-Net11. Inventories-Net11. Inventories-Net11. Inventories-Net11. Inventories-NetConsist of :

Inventories - Food and Beverage- Cinema Business 13,277,155.83 11,442,344.08 5,744,561.43 5,405,057.92- Bowling and Karaoke Business 3,959,979.30 2,154,600.96 450,572.84 937,466.01

inventories - Sales DVD and VCD Business 59,111,206.26 35,863,212.53 - -Supplies 4,131,358.64 4,221,579.35 2,616,433.44 3,566,410.19

Total 80,479,700.03 53,681,736.92 8,811,567.71 9,908,934.12Add Esimate of cost of merchandise returned 12,607,527.55 17,452,518.66 - -Less Allowance for Decliningin Value of Inventories(1,519,102.71) (305,282.25) - -

Net 91,568,124.87 70,828,973.33 8,811,567.71 9,908,934.12

96

12. The Prepaid Deposit of Share-Subscription12. The Prepaid Deposit of Share-Subscription12. The Prepaid Deposit of Share-Subscription12. The Prepaid Deposit of Share-Subscription12. The Prepaid Deposit of Share-SubscriptionIn accordance with the consolidated and the Company financial statements as of December, 31, 2004, the whole

amount of prepaid deposit of share-subscription was deposit for the investment in the Major Cinepictures Co., Ltd.(former name Nontanun Entertainment Co., Ltd.) which the Company plans to invest in the proportion of 80% ofregistered share capital by using investment not greater than Baht 80 millions. Such repayment is for confidence in theinvestment in Nontanun Entertainment Co., Ltd. Which complies with the resolution of the Board of Directors Meeting no.6/2547 held on June 22, 2004.

However, in accordance with the minute of Board of Directors Meeting no.6/2005 which held on November 14, 2005,the meeting resolved that investment in such company is cancelled. Presently the company fully received deposit refund.

13. Cash Guarantee13. Cash Guarantee13. Cash Guarantee13. Cash Guarantee13. Cash GuaranteeIn accordance with consolidated financial statements as of December 31, 2004 the whole amount is guarantee

amount against the short term loan from the finance institute, while the company will receive when such loan is fullyrepayable. During 2005, subsidiary company has repaid such loan and fully received guarantee refund.

14. Other Current Assets14. Other Current Assets14. Other Current Assets14. Other Current Assets14. Other Current AssetsConsist of :

Accrued Income 27,200,940.86 18,329,059.74 226,943.06 95,731.59Prepaid Expenses 8,146,855.96 10,707,870.39 1,102,829.65 2,572,147.88Prepaid Interest 3,947,515.08 7,821,129.90 3,947,515.08 7,821,129.90Cash Advance 8,193,451.63 6,193,409.81 8,686,313.05 5,874,749.32Other Accounts Receivable 55,003,341.80 19,453,721.88 2,447,740.98 2,187,792.19Others 23,000,672.35 8,489,180.69 392,727.82 2,949,213.09 Total 125,492,777.68 70,994,372.41 16,804,069.64 21,500,763.97


97

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15.1 During year 2004, the Company holds additionally investment in subsidiary by the shares acquisition in theRatchayothin Group in number of 5 Companies comprising Major Bowl Co., Ltd., Ratchayothin Realty Co., Ltd., RatchayothinCinema Co., Ltd., Ratchayothin Management Co., Ltd. and Bangkok Imax Theater Co., Ltd. from the minority shareholderswho are foreigners in accordance with the Contract of Purchase-Sale of Investment dated March 22, 2004. The amountof investment purchase-sale is aggregated to Baht 320 millions, which is price compared from that of the independentfinancial advisor computed pursuant to Discounted Cash Flow Approach. The Contract is specified that the minorityshareholders contribute benefit in the participating profit (loss) of such subsidiary for the quarter ended on March 31,2004 to the Company ; as a result, the Company has to record participating profit (loss) of subsidiaries for such periodas it the Company had purchased investment since January 1, 2004.

15.2 As of September 27, 2004, the Company invested in EGV Entertainment Public Co., Ltd. and its subsidiary bynumber of 259,522,559 shares which equivalent to 99.82% of equity which already issue and paid-up of EGV Entertain-ment Public Co., Ltd. and its subsidiary. Therefore, EGV Entertainment Public Co., Ltd. and its subsidiary become theCompany's subsidiary. The Company has written off the excess of cost of acquisition over fair value which theindependent appraiser computed in accordance with the Income Approach only fait of the Company's behalf, as of thepurchase date of EGV Entertainment Public Co., Ltd. and its subsidiary amount of Baht 816.94 millions as the wholeexpense during the present period. Moreover, the company recognized the excess of fair value in accordance with theIncome Approach over fair value of definable assets amount of Baht 25.88 millions as Goodwills. Moreover, in quarter 1of 2005, the Company accepted the shares purchase of EGV Entertainment Public Co., Ltd. from minor shareholders bynumber of 411,690 shares in the purchased price as cash of Baht 4.50 per share, equivalent to Baht 1,852,605.00.Therefore, presently, the Company holds shares in EGV Entertainment Public Co., Ltd. by number of 259,934,249 shares,equivalent to 99.97% from the former 99.82% while the purchased share price is greater than net asset in accordancewith book value by amount of Baht 953,587.61. Moreover, the Company fully recorded as expense in the statement ofincome.

Net Asset Value of EGV Entertainment Public Co., Ltd. and its subsidiary as of investment date are composed of thefollowing transaction.

'000 Baht'000 Baht'000 Baht'000 Baht'000 BahtAssets

Cash and Equivalent 93,826Temporary Investment 20,959Accounts and Notes Receivable 62,009Inventories 5,136Other Current Assets 126,836Improvement Building and Equipment-Net 1,462,935Other Assets 233,646

Total Assets 2,005,347 LiabilitiesShort Term Loan 750,000Accounts Payable 73,293Other Current Liabilities 262,883Long Term Loan 335,338Other Liabilities 6,604

Total Liabilities 1,428,118Net Book Values of Assets 577,229Plus The Excess of Fair Value of Definable Assets Over Book Value 138,341

Total Net Assets 715,570Proportion of the Company Investment (percentage) 99.82%Net Asset in proportion of Company Investment 714,282Plus The Excess of Fair Value in accordance with Income Approach

(Income Approach) over Fair Value of Definable Assets and Liabilities 25,884Fair Value inaccordance with Income Approach 740,166Purchasing Price 1,557,105The Excess of Cost of Acquisition over Fair Value ofDefinable Assets and Liabilities (Goodwill) 816,939Purchasing Price 1,557,105Less Purchased Transactions by the repayment of increased shares (1,557,095)Cash payable to acquisition ordinary shares ofEGV Entertainment Public Co., Ltd. and its subsidiary 10Less Cash and Cash Equivalent of EGV Entertainment Public Co., Ltd. and its subsidiary (93,826)Net Cash receipt from the acquisition ordinary shares ofEGV Entertainment Public Co., Ltd. and its subsidiary 93,816

15.3 As of September 28, 2004, the Company invested in Pacific Marketing and Entertainment Group Co., Ltd.. Innumber of 1,199,995 shares equivalent to 80% of Capital issued and already paid-up of Pacific Marketing and Entertain-ment Group Co., Ltd. become the Company subsidiary.

99

15.4 In accordance with the minute of the Company Board of Directors Meeting No. 3/2004 which held on March19, 2004, it is unanimously resolved that the investment is proceeded in Siam Cineplex Co., Ltd., which is the newlyCompany established in the ratio of shares holding of 99.99% by number of 1,500,000 shares in the share price of Baht100 per share. Therefore, as of December 31, 2004, the company constitutes investment in such company by the costprice of Baht 150 millions

15.5 In accordance with the resolution of the company Board of Directors Meeting No.10/2004 which held onNovember 11, 2004, it is resolved that two subsidiaries are liquidated, i.e. Major Bowl Co., Ltd. and Major Cinema Co.,Ltd. which two companies have registered the entities liquidation and winding up their business. Two companies repaidordinary shares subscription to the company by amount of Baht 27.79 millions; as a result, the company incurred lossfrom the liquidation of subsidiaries by Baht 2.88 millions.

15.6 On December 20, 2004, Pacific Marketing Entertainment Group Co., Ltd. which is subsidiary, it is unanimouslyresolved that the investment is proceeded in Pacific Media Sales Co., Ltd. Which is newly established in the ratio ofshareholding of 99.40% by number of 994 shares in the share price of Baht 100.00 per share; therefore, as of December31, 2004, Pacific Marketing and Entertainment Group Co., Ltd. constitutes investment in such company by cost price ofBaht 0.10 millions.

15.7 In accordance with the minute of Board of Directors Meeting No.6/2005 which held on November 14, 2005, themeeting unanimously resolved that investment in M Pictures Co., Ltd. is carried on proceeding which is newly establishedcompany in the proportion of shareholding of 79.99% in number of 799,993 shares, in par value of Baht 100.0 per sharewhich is subsidiary, carried the purpose so as for expansion of service of full cycle model in film business.

Net Asset Value of Pacific Marketing and Entertainment Group Co., Ltd. as of investment date are composed of thefollowing transaction.

' ' ' ' ' 000 Baht000 Baht000 Baht000 Baht000 Baht AssetsCash and Equivalent 8,938Accounts and Notes Receivable-Net 78,370Inventory 42,680Other Current Assets 3,894Loan to 4,665Investment in Associated Companies Building and Equipment-Net 1,153Improvement Building and Equipment-Net 6,374Deferred Film Copy Right 51,261Other Current Assets 500 Total Assets 197,835 LiabilitiesAccounts Payable 33,400Other Current Liabilities 24,448Short Term Loan 66,768Other Liabilities 2,052 Total Liabilities 126,668Net Book Value of Assets 71,167Plus The Excess of Fair Value of Deferred Film Copy Right Over Book Value 20,034

Total Net Assets 91,201Proportion of the Company Investment (percentage) 80%Net Asset in proportion of Company Investment 72,961Purchasing Price 80,000The excess of acquisition cost over Net Assets Value (Goodwill) 7,039Cash payable to purchase Pacific Marketing and Entertainment Group Co., Ltd. 80,000Less Cash and Cash Equivalent of Pacific Marketing and Entertainment Group Co., Ltd. (8,938)Net Cash payable from the acquisition ordinary shares ofPacific Marketing and Entertainment Group Co., Ltd. 71,062

Such both subsidiary as stated in Note 15.2 and 15.3 do not prepare any financial statements as of the date theCompany acquired the business. As a result, the Company management will apply the financial statements of suchsubsidiary as of September 30,2004 which were reviewed by auditors as the financial statements as of the date ofinvestment acquisition whereby the discrepancy of such number of days does not materially affect upon the financialstatements.

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101

16.1 As of November 8, 2005, the California Wow Xperience Public Co., Ltd. has taken its ordinary shares by numberof 50 millions shares to be appropriated and offered to public and management directors and the company staff. Aftersuch appropriation and public offering is conducted, the Company holds the shareholding proportion in the CaliforniaWow Xperience Public Co., Ltd. which is associated company has been changed from the former 49% to 36.75%.

However, investment in California Wow Xperience Public Co., Ltd. is marketable security. As of December 31, 2005such security comprises fair value per share equivalent Baht 6.85 equivalent to the total amount of Baht 503.48 millions.

16.2 As of June 30, 2004, the Company exercised rights in accordance with the warrants to purchase ordinary sharesin the Siam Future Development Public Co., Ltd. in number of 17.75 millions unit by the proportion of right exercise of 1unit to 2.62875 ordinary shares in the exercised price of Baht 1 per share. The Siam Future Development Public Co., Ltd.has registered the increased share capital issued and called for paid-up from such right exercise on July 7, 2004. AsDecember 31, 2004, the Company holds the proportion investment of The Siam Future Development Public Co., Ltd.amount of 26.43%.

However, investment in Siam Future Development Public Co., Ltd. is marketable security. As of December 31, 2005and 2004 such security comprises fair value per share equivalent Baht 6.70 and Baht 6.20 respectively equivalent to thetotal amount of Baht 714.62 millions and Baht 661.29 millions respectively.

16.3 In the Consolidated and the Company financial statements as of December 31, 2005 5 investment in theCalifornia Wow Xperience Public Co., Ltd. and Media Logistic Co., Ltd. and as of December 31,2004, investment in SiamFuture Development Public Co., Ltd. and California Wow Xperience Public Co., Ltd. the Company computes the invest-ment amount from financial statements which were audited by other auditors. Moreover, regarding the investment in I-Major Co., Ltd. The Company computed investment value from the financial statements were prepared by managementwhich were not yet reviewed by other auditors by recognizing the participating profit (loss) in the associated companyas follows.

('000 Baht) For the YearsEnded on December 31,2548 2547

California Wow Xperience Public Company Limited 20,562 (5,698)Siam Future Development Public Company limited 23,622 46,062I-Major Co., Ltd. 16 (2,308)Major Online Co., Ltd. (22) -Media Logistic Co., Ltd. (1,179) 174

16.4 In quarter 4 of 2004, California Wow Xperience Public Co., Ltd. constitutes the change of accounting policy inrespect of the recognition of revenue and expense in accordance with the Note no. 7. The result of such change ofaccounting policy results in the participating profit in California Wow Xperience Public Co., Ltd. For the period of 9months ended on September 30, 2004 which ever recognized by Baht 22.12 millions declined. California Wow XperiencePublic Co., Ltd. is being the process of adjustment the affect on the financial statements for the period of 9 months.However, the company recognized participating profit in California Wow Xperience Public Co., Ltd. for the year ended onDecember 31, 2004 by Baht (5.70) millions.

16.5 In accordance with the minute of the company Board of Directors No.6/2005 which held on November 14, 2005,it is unanimousty resolved that investment in Major Online Co., Ltd. is carried on proceeding which is newly establishedcompany in the proportion of shareholding of 40% of 4,000 shares, in the price of Baht 100.0 per share which isassociated company, carried the purpose of development in technology of film business.

102

17. Property and Equipment-Net17. Property and Equipment-Net17. Property and Equipment-Net17. Property and Equipment-Net17. Property and Equipment-Net Consist of:

Consolidated Balance Increase/ Sale / Balance As of Transfer in Transfer out As ofDecember 31, 2004 December 31, 2005 Baht Baht Baht Baht

Cost : Cost : Cost : Cost : Cost :Land 34,909,552.84 - - 34,909,552.84Building 899,312,491.54 1,207,627.18 - 900,520,118.72Theatres 2,207,623,308.10 82,206,262.40 - 2,289,829,570.50Tools 1,222,154,162.65 238,480,066.18 - 1,460,634,228.83Vehicles 23,687,904.57 4,851,784.80 - 28,539,689.37Furniture and Fixtures 1,069,465,665.19 116,844,113.42 - 1,186,309,778.61Theatre Improvements ,Office BuildingImprovements and Systems 213,199,951.66 36,775,257.61 - 249,975,209.27Utilities System 585,159,060.88 78,052,225.65 - 663,211,286.53Construction in Progress 69,805,612.15 1,042,210,452.23 (694,270,382.54) 417,745,681.84 Total 6,325,317,709.58 1,600,627,789.47 (694,270,382.54) 7,231,675,116.51 Accumulated Depreciation :Accumulated Depreciation :Accumulated Depreciation :Accumulated Depreciation :Accumulated Depreciation :Building (216,235,880.82) (40,763,758.49) - (256,999,639.31)Theatres (554,287,187.81) (79,580,716.35) - (633,867,904.16)Tools (429,555,964.63) (227,208,099.32) - (656,764,063.95)Vehicles (7,022,079.81) (4,372,785.12) - (11,394,864.93)Furniture and Fixtures (292,105,772.35) (76,591,590.67) - (368,697,363.02)Theatre Improvements , Office BuildingImprovements and Systems (289,442,713.10) (86,948,973.10) - (376,391,686.20)Utilities System (291,335,552.78) (47,087,048.58) - (338,422,601.36) Total (2,079,985,151.30) (562,552,971.63) - (2,642,538,122.93) NetNetNetNetNet 4,245,332,558.284,245,332,558.284,245,332,558.284,245,332,558.284,245,332,558.28 4,589,136,993.584,589,136,993.584,589,136,993.584,589,136,993.584,589,136,993.58

Depreciation in the Statements of IncomeDepreciation in the Statements of IncomeDepreciation in the Statements of IncomeDepreciation in the Statements of IncomeDepreciation in the Statements of Income

For the year Ended on December 31, 2005 562,552,971.63 Ended on December 31, 2004 382,191,484.02

In accordance with the consolidated financial statements, as of December 31, 2005 and 2004, the Company hadassets with the depreciation fully calculated but still in use which had a cost value of Baht 821.49 million and Baht 438.15million respectively. The net book value of which was now Baht 11,651.24 and Baht 5,051 respectively.

In accordance with the consolidated financial statements, as of December 31 , 2005 and 2004, cost of theatre andbowling equipment for the amount of Baht 200.00 millions and Baht 216.17 millions repectively and cost of vehicle partlyfor the amount of Baht 9.08 millions and Baht 5.72 millions respectively was assets under financial lease agreement.

In accordance with the consolidated financial statements for the year ended on December 31, 2005 and 2004, thecompany included cost of loan which is specifically borrow so as to use in the project of Siam Paragon combined as costprice of such project by Baht 3.02 millions and amount of Baht 1.50 millions respectively.

103

The Company Only Balance Increase/ Sale / Balance As of Transfer in Transfer out As ofDecember 31, 2004 December 31, 2005 Baht Baht Baht Baht

Cost : Cost : Cost : Cost : Cost :Theatres 848,893,145.13 81,700,517.70 - 930,593,662.83Tools 787,007,639.30 86,262,078.40 - 873,269,717.70Vehicles 5,800,257.55 1,700,000.00 - 7,500,257.55Furniture and Fixtures 88,020,332.38 32,644,651.56 - 120,664,983.94Theatre Improvements ,Office BuildingImprovements and Systems 65,736,856.51 4,962,494.73 - 70,699,351.24Utilities System 28,617,156.14 38,517,766.44 - 67,134,922.58Construction in Progress 27,624,645.13 691,247,778.02 (678,048,302.04) 40,824,121.11 TotalTotalTotalTotalTotal 1,851,700,032.14 1,851,700,032.14 1,851,700,032.14 1,851,700,032.14 1,851,700,032.14 937,035,286.85 937,035,286.85 937,035,286.85 937,035,286.85 937,035,286.85 (678,048,302.04)(678,048,302.04)(678,048,302.04)(678,048,302.04)(678,048,302.04) 2,110,687,016.952,110,687,016.952,110,687,016.952,110,687,016.952,110,687,016.95 Accumulated Depreciation :Accumulated Depreciation :Accumulated Depreciation :Accumulated Depreciation :Accumulated Depreciation :Theatres (158,355,477.90) (66,254,643.20) - (224,610,121.10)Tools (251,584,562.60) (123,622,892.07) - (375,207,454.67)Vehicles (1,676,814.94) (1,315,180.76) - (2,991,995.70)Furniture and Fixtures (43,279,719.51) (14,185,722.01) - (57,464,882.13)Theatre Improvements , Office BuildingImprovements and Systems (13,765,499.75) (5,743,452.21) - (19,508,828.21)Utilities System (16,920,595.79) (6,962,545.04) - (23,883,140.83) Total (485,582,670.49) (218,084,435.29) - (703,667,105.78) NetNetNetNetNet 1,366,117,361.65 1,366,117,361.65 1,366,117,361.65 1,366,117,361.65 1,366,117,361.65 718,950,851.56 678,048,302.04 1,407,019,911.77 718,950,851.56 678,048,302.04 1,407,019,911.77 718,950,851.56 678,048,302.04 1,407,019,911.77 718,950,851.56 678,048,302.04 1,407,019,911.77 718,950,851.56 678,048,302.04 1,407,019,911.77Depreciation in the Statements of IncomeDepreciation in the Statements of IncomeDepreciation in the Statements of IncomeDepreciation in the Statements of IncomeDepreciation in the Statements of IncomeFor the year Ended on December 31, 2005 218,084,435.29 Ended on December 31, 2004 191,294,842.45

In accordance with the company financial statements, as of December 31, 2005 and 2004, the Company had assetswith the depreciation fully calculated but still in use which had a cost value of Baht 92.20 million and Baht 43.43 million,respectively. The net book value of which was now Baht 557 and Baht 257 respectively.

In accordance with the company financial statements, as of December 31, 2005 and 2004, cost of theatre and bowlingequipment for the amount 200.0 millions and vehicle partly amount of 3.43 millions and amount of 4.39 millions respec-tively was assets under financial lease agreement. In accordance with the company financial statements for theyear end on December 31, 2005, the company included cost of loan which is specifically borrow so as to use in theproject of Siam Paragon combined as cost price of such project by Baht 1.48 millions and amount of Baht 1.50 millionsrespectively.

In accordance with the consolidated and the company financial statements, building and some equipment werepledged against credit facility received from bank and financial institute.

In accordance with the consolidated and the Company financial statements, as of December 31, 2005 and2004, the film building, public utility system and other fixed assets of the parent and subsidiary companiesare located on area of leased building and leased land carried the leased contract of approximately 10-30years. In accordance with the contract, it is mainly specified that when the leased period is terminated, theentire ownership of property in the nature of fixture to leased place will be belonged to lesser or have toimmediately remove so as that the leased place is in the former condition.

18.18.18.18.18. Lease and Services Contract BondLease and Services Contract BondLease and Services Contract BondLease and Services Contract BondLease and Services Contract Bond

In the consolidated and the company financial statements as of December 31, 2005 and 2004, the guaranteed depositagainst the contract of rental partly in amount of Baht 24.37 millions and Baht 18.26 millions respectively is guaranteeddeposit against the area rental of the cinema and others. The contract is respectively conducted and memorandum ofunderstanding between the lessor and the Company comprises the period of rental of 10-24 years.

In addition, according to the consolidated and the company financial statements as of December 31, 2005 and 2004,partly in amount of Baht 19.40 millions and Baht 21.80 millions respectively is leasing contract bond of Cinema'sequipments, and 15 years service contract of Major Cineplex (Pinklao). The deposit for leasing and servicing is totalamount of Baht 24.0 million, without being charged of interest. The deposit can be reimbursed each time at Baht 0.20million for the period of 10 years beginning February 2004.

104



19. Prepaid Leasehold Right Fee Repayable lnstead of Subsidiary19. Prepaid Leasehold Right Fee Repayable lnstead of Subsidiary19. Prepaid Leasehold Right Fee Repayable lnstead of Subsidiary19. Prepaid Leasehold Right Fee Repayable lnstead of Subsidiary19. Prepaid Leasehold Right Fee Repayable lnstead of Subsidiary

Advance payment for leasehold rightRepayable instead of subsidiarySiam Cineplex Co., Ltd. - 135,000,000.00 - 135,000,000.00Bangkok Imax Theater Co., Ltd. - 20,000,000.00 - 20,000,000.00Major Bowl Group Co., Ltd. - 45,000,000.00 - 45,000,000.00

- 200,000,000.00 - 200,000,000.00

In accordance with the consolidated and the Company financial statements as of December 31, 2004, the prepaidleasehold right fee repayable instead of subsidiary is wholely the financial support of construction fee so as for leaseholdright of the area of 7th and 8th floor of the Project of Siam Paragon Trading Center in accordance with the contract ofleasehold right reservation dated March 27, 2003, while the Company agreed to repay the financial support of construc-tion fee by the total amount of Baht 300.0 millions. Moreover, on November 16, 2004, the company performed thememorandum attached to the contract of leasehold right reservation on the subject of the transfer of leasehold right. TheCompany will transfer the leasehold right to 3 subsidiary companies which resulted in the leasehold right that thecompany prepaid before the right transfer date is regarded as prepaid leasehold right instead of subsidiaries . Moveroverin 1st quarter, of 2005, the Company has performed the contract to transfer the leasehold right to such subsidiaries.

20.20.20.20.20. Deferred Building Area Leasehold RightsDeferred Building Area Leasehold RightsDeferred Building Area Leasehold RightsDeferred Building Area Leasehold RightsDeferred Building Area Leasehold Rights Consist of :

Deferred Building Area LeaseholdRights-Beginning 227,558,525.98 - 63,796,610.15 -The Building Area Leasehold Rightis Increased from the Acquisition ofInvestment in Subsidiary. - 166,016,376.04 - -Deferred Building Area LeaseholdRights-Increased during period 314,436 ,382.22 64,000,000.00 24,922,897.20 64,000,000.00Amortized Deferred BuildingArea Leasehold Rights (12,143,948.61) (2,457,850.06) (2,449,409.53) (203,389.85)Deferred Building AreaLeasehold Rights-Ending 529,850,959.59 227,558,525.98 86,270,097.82 63,796,610.15

In accordance with the consolidated financial statements as of December 31, 2005 leasehold right of building areawhich is incremented during period, some part in amount of Baht 283.75 millions is derived from contract of leaseholdright subscription on the subject of leasehold right transfer dated on November 16, 2004 while it is the receipt of righttransfer which will lease some area in the 7th floor and 8th floor of Siam Paragon Trading Center building for the periodof 25 years commenced from the date the Siam Paragon Trading Center opened its operation from Major Cineplex GroupPublic Co., Ltd. While it carried the value of leasehold right which has to repay by total of baht 300.0 millions

In accordance with the consolidated financial statements and the Company financial statements as of December31, 2005 and 2004 deferred building area leasehold right some part which is incremented during 2005 and 2004 inamount of Baht 15.25 millions and Baht 54.0 millions respectively is the Project of Pinkrao Branch which is the financialsupport of construction fee so as for leasehold right of internal building area in the project of Petch Pinkrao Co., Ltd.which is related company by related director whereby the leased contract constitutes the period of 25 years where as theamount of financial support of construction fee which has to be repayable in entire amount of Baht 69.25millions. Moreover, some part which is incremented during 2005 by amount of Baht 9.67 millions is derived fromleasehold right of Ubonrajathani branch project while it carried the leased contract for the period of 20 years and somepart which is incremented during 2004 in amount of Baht 10.0 millions is leasehold right of the Chachengchaow BranchProject which is the construction for support for the leasehold right of Siam Future Power Center ChachengchaowProject whereby the lease contract holds the period of 25 years and the whole value of leasehold right whichhas to be repaid is Baht 10 millions.

In accordance with the consolidated financial statements as of December 31, 2005 and 2004 some part which isincremented is leasehold right Building Area of EGV Entertainment Public Co., Ltd. and its subsidiary whereby it ismainly advance lease fee and construction fee support in accordance with the leased contract of working place cinemaof Ratchadamri Project which holds the lease contract of 20 years and the whole value of leasehold right which has tobe repaid is Baht 180.23 millions and 174.43 millions respectively.

105

21. Deferred Land Leasehold Rights21. Deferred Land Leasehold Rights21. Deferred Land Leasehold Rights21. Deferred Land Leasehold Rights21. Deferred Land Leasehold Rights Consist of :

Consolidated As of As of

December 31, 2005 December 31, 2004 Baht Baht

Deferred Land Leasehold Rights-Beginning 62,537,345.55 45,155,864.08Deferred Land Leasehold Rights-Increased during period - 20,000,000.00Amortized Deferred Land Leasehold Rights (2,868,518.52) (2,618,518.53)Deferred Land Leasehold Rights-Ending 59,668,827.03 62,537,345.55

In the consolidated financial statements as of December 31, 2005 and 2004, the whole amount of deferred landleasehold rights was land leasehold of a subsidiary company which has contract of land leasehold for the constructionof the Major Cineplex, Rangsit for 27 years. When the lease period is terminated, the entire ownership of property withthe leased land will belong to lessor. The subsidiary has transferred to one merchant bank as security for the credit ofthe Parent company. The transfer of such leased right was consented by the lessor.

The right of land lease is increased during the year 2004 which is derived from land lease so as for the constructionof business building plus car park, Sukhumvit Branch whereas the contract of land lease constitutes 20 years and theleased right value which needs to fully repay is Baht 20 millions.

22. Deferred Film Copy Right22. Deferred Film Copy Right22. Deferred Film Copy Right22. Deferred Film Copy Right22. Deferred Film Copy RightConsist of:

Deferred Film Copy Rights Beginning - Net 133,458,658.22 - - -Add Increase Film Copy Right fromInvestment in Subsidialy Companies - 67,288,177.41 - -Deposit Film Copy Right 91,043,358.88 - - -Increase during period 284,016,004.20 91,718,511.48 - -Less Amortization of Film Copy Right (169,189,924.47) (25,548,030.67) - -Deferred Film Copy Right Ending - Net 339,328,096.83 133,458,658.22 - -

23. Asset Not Used for Operations-Net23. Asset Not Used for Operations-Net23. Asset Not Used for Operations-Net23. Asset Not Used for Operations-Net23. Asset Not Used for Operations-Net Consist of:

Cost:Cost:Cost:Cost:Cost:Tools 7,840,571.47 - - 7,840,571.47IMAX Equipment 18,687,941.50 - - 18,687,941.50Equipments and Tools Bowling 11,610,153.99 - - 11,610,153.99

Total 38,138,666.96 - - 38,138,666.96Accumulated Depreciation:Accumulated Depreciation:Accumulated Depreciation:Accumulated Depreciation:Accumulated Depreciation:

Tools (1,052,569.86) - - (1,052,569.86)IMAX Equipment (18,687,940.50) - - (18,687,940.50)Equipments and Tools Bowling (719,431.94) - - (719,431.94)

Total (20,459,942.30) - - (20,459,942.30)Book Value 17,678,724.66 - - 17,678,724.66

Less Allowance from non used Asset Impairment (17,678,723.66) - - (17,678,723.66)Asset Not used for Operation-NetAsset Not used for Operation-NetAsset Not used for Operation-NetAsset Not used for Operation-NetAsset Not used for Operation-Net 1.001.001.001.001.00 ----- ----- 1.00 1.00 1.00 1.00 1.00

Depreciation in the Statements of IncomeDepreciation in the Statements of IncomeDepreciation in the Statements of IncomeDepreciation in the Statements of IncomeDepreciation in the Statements of IncomeFor the year Ended on December 31, 2005 - Ended on December 31, 2004 617,117.70


Consolidated/The Company Only Balance Increase/ Sale / Balance As of Transfer in Transfer out As ofDecember 31, 2004 December 31, 2005 Baht Baht Baht Baht

106


26. Credit and Obligations26. Credit and Obligations26. Credit and Obligations26. Credit and Obligations26. Credit and Obligations

Bank overdrawn account, loan due to merchant bank and finance institute of the parent company and subsidiarycompanies are guarantees by bank deposits, building and equipment, Leasehold Rights, Land Leasehold Rights, com-pany directors and personal land of one shareholder.

27.27.27.27.27. Short-Term Loans due to Finance InstituteShort-Term Loans due to Finance InstituteShort-Term Loans due to Finance InstituteShort-Term Loans due to Finance InstituteShort-Term Loans due to Finance Institute Consist of :

Bill of Exchange 370,000,000.00 1,060,000,000.00 370,000,000.00 400,000,000.00Promissory Notes 408,000,000.00 113,067,447.73 200,000,000.00 - Total 778,000,000.00 1,173,067,447.73 570,000,000.00 400,000,000.00

In accordance with the consolidated financial statement and the company only as of December 31, 2005 and 2004,the whole amount was loan in form of bill of exchange and promissory notes with finance institute for the period of 3-6 months carried interest rates of 3.80 - 6.00% and 1.80 - 6.0% per annum respectively.

28.28.28.28.28. Short Term Loan from Other CompanyShort Term Loan from Other CompanyShort Term Loan from Other CompanyShort Term Loan from Other CompanyShort Term Loan from Other CompanyIn accordance with the consolidated financial statements as of December 31, 2004 , the whole amount of short term

loan is loan in form of promissory note in type of at call on demand with one company carried interest rate of 5% perannum.

24. Goodwill - Net24. Goodwill - Net24. Goodwill - Net24. Goodwill - Net24. Goodwill - Net Consist of:

Goodwill as of Purchase 251,437,875.95 96,387,446.45Less Amortization of Goodwill (58,156,778.21) (27,539,670.65)Net Goodwill - Beginning 193,281,097.74 68,847,775.80Add Goodwill Increase during Period - Parent Companyà - 146,543,267.10 Goodwill Increase during Period - Subsidiary Companies - 8,507,162.40 Total 193,281,097.74 223,898,205.30Less Amortization of Goodwill to be expense During Period (26,198,457.64) (21,409,120.69) Amortization of Goodwill from Liquidation of Subsidiary Companies - (9,207,986.87)Goodwill - Net 167,082,640.10 193,281,097.74

25. Negative Goodwill - Net25. Negative Goodwill - Net25. Negative Goodwill - Net25. Negative Goodwill - Net25. Negative Goodwill - Net Consist of:

Negative Goodwill as of Purchase 27,166,011.44 27,166,011.44Less Amortization of Negative Goodwill (23,205,052.03) (22,864,291.23)Net Nagative Goodwill - Beginning 3,960,959.41 4,301,720.21Less Amortization Negative Goodwill to be Revenue (340,760.80) (340,760.80)During Period (340,760.80) (340,760.80)Negative Goodwill - Net 3,620,198.61 3,960,959.41





107

29. Long-Term Loans29. Long-Term Loans29. Long-Term Loans29. Long-Term Loans29. Long-Term Loans Consist of:

Loan from Commercial Bank 1,939,438,141.59 1,453,438,141.59 1,715,000,000.00 1,126,000,000.00Less Current Portion of Long-Term Loans (545,500,000.00) (356,000,000.00) (439,000,000.00) (251,000,000.00) Net 1,393,938,141.59 1,097,438,141.59 1,276,000,000.00 875,000,000.00

In accordance with the consolidated and the Company financial statements as of December 31, 2005 and2004 , long term loan is loan due to serveral commercial banks which constitutes the detail of loan as follows:

Parent CompanyParent CompanyParent CompanyParent CompanyParent Company

1) As of December 31, 2005 and 2004, it is loan due to one merchant bank as follows:- As of December 31, 2005 and 2004, the availment of Baht 300.0 millions while the amount of Baht 225.0millions and 300.0 millions respectively is used. It is loan due to one merchant bank for the period of 5 years,carried interest rate of 3.25 % per annum for the period of 2 years after which the interest rate of 3 months fixeddeposit plus 2.5 % per annum is applied. The installment of 6 months is semi-annually repayable totally for 8installments for the amount of Baht 37.50 millions per installment. The first installment in repayable on June 30,2005.- As of December 31, 2005 and 2004, the loan availment of Baht 600.0 millions while the amount of Baht 480.0million and 360.0 millions respectively is used. It is loan due to one merchant bank for the period of 4 years carriedinterest rate of year 1 of 3 % per annum, another year, interest rate of MLR% - 2% per annum is applied or interestrate of the first 12 months fixed deposit plus 2% per annum is applied whichever is quarter . The installment of 3month is repayable totally 14 installments aggregating to Baht 60.0 million per installment. The first installment isrepayment on May 31, 2005.

The collateral, i.e. title-deed of Rachayothin Cinema Co., Ltd., land leasehold right of Rachayothin Realty Co., Ltd.and property which is the building of Major Cineplex, Rachayothin Branch.

2) As of December 31, 2005 and 2004, it is loan due to one merchant bank as follows:- As of December 31, 2005 and 2004, the availment of Baht 280.0 millions while the amount of Baht 210.0million and 266.0 million respectively is used. It is loan due to one commercial bank for the period of 5 years,carried interest rate of year 1-3 of 2% per annum and year 4-5 of 1% per annum. The three-month installment isrepayable, totally 20 installment for the amount of Baht 14.0 million per installment. The first installment is repayableon November 30, 2004.- As of December 31, 2005, the loan availment of Baht 300.0 millions which is used in amount of Baht 300 millionscarried the period of 5 years, carried interest rate of year 1 by the rate of MLR minus by the spread of 1.50% perannum and year 4-5 by the rate of MLR minus by the spread of 1.00% per annum. It is gradually repayable as per3 months installment totally 19 installments. Installment of 1-18 is repayable by amount of Baht 16.0 million perinstallment and installment of 19 is repayable by Baht 12.0 millions per installment. The first installment is repayablein May, 2006.

The collateral of land title and property on the piece of land of Major Cineplex Property Co., Ltd. also jointguarantee.

3) As of September 30, 2005 and December 31, 2005 and 2004, the loan availment of Baht 500.0 millions while theamount of Baht 500.0 millions and 200.0 millions respectively is used. It is loan due to one merchant bank for the periodof 7 years, carried interest rate of year 1 of 3 % per annum, year 2-3 of 3.50 % per annum and year 4 onwards carriedinterest rate of MLR % - 1.375 % per annum. The leasehold right of the project of Siam Paragon Trading Center ispledged against the repayment for the period of 84 months commenced from the first installment of loan withdrawal. Forthe month of 1-24, interest is monthly repayable. For the month of 25-84, the principle is repayable for every 6 monthsinstallment tatalling 10 installments, equivalent to amount of Baht 50.00 millions per installment while interest is reparatelyrepayable every month.

Subsidiary CompaniesSubsidiary CompaniesSubsidiary CompaniesSubsidiary CompaniesSubsidiary Companies

1) As of December 31, 2005 and 2004, loan in credit line of Baht 530.0 millions is repayable and remained amount ofBaht 166.50 million and 256.50 millions respectively is used. It loan due to one merchant bank for the period of 6.50 years,carried interest rate of MLR% - 0.75% per annum but not below MLR% per annum of Thai Farmers Bank Public Co.,Ltd. It is monthly repayable. For the installment of 1-18, amount of Baht 4.50 millions per installment is repayable. For theinstallment 19-77 amount of Baht 7.50 millions per installment is repayable and amount of Baht 6.50 millions for the finalinstallment is repayable. The first installment is repayable in November, 2002. The right in accordance with the leasecontract, right in accordance with the contract of service of public utility of EGV Entertainment Public Co., Ltd. and 3Subsidiaries and directors are collateral.

As of March 31, 2005, such subsidiaries changed guarantors where by EGV Five Star Co., Ltd., EntertainmentGolden Village Exhibition Co., Ltd., EGV Exhibition Co., Ltd., and Major Cineplex Group Public Co., Ltd. become thenew guarantors in replacement of former guarantors.

Consolidated The Company Only As of As of December 31, 2005 December 31, 2004 December 31, 2005 December 31, 2004 Baht Baht Baht Baht

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31.31.31.31.31. Deferred Leasehold RevenueDeferred Leasehold RevenueDeferred Leasehold RevenueDeferred Leasehold RevenueDeferred Leasehold Revenue Consist of :

Beginning Deferred Leasehold Revenue 195,853,445.28 205,909,638.12 - -Plus Deferred Leasehold Revenue 11,008,546.05 - - -Less Recongnized as Revenue inthe Accounting Period (10,717,675.82) (10,056,192.84) - -Ending Deferred Leasehold Revenue 196,144,315.51 195,853,445.28 - -

In accordance with the consolidated financial statements as of December 31, 2005 and 2004, the whole amount ofdeferred leasehold revenue was written off pending for recognized as revenue in accordance with the period of leasedcontract approximately 23-26 years.

32.32.32.32.32. Deferred Service RevenueDeferred Service RevenueDeferred Service RevenueDeferred Service RevenueDeferred Service Revenue Consist of :

Beginning Deferred Service Revenue 131,716,419.55 138,433,416.41 - -Plus Recongnized as Revenue inthe Accounting Period 7,105,600.00 - - -Less Sevice Revenue ofcontract cancellation (7,007,559.48) (6,716,996.86) - -Ending Deferred Leasehold Revenue 131,814,460.07 131,716,419.55 - -

In accordance with the consolidated financial statements as of December 31, 2005 and 2004, the whole amount ofdeferred leasehold revenue was written off pending for recognized as revenue in accordance with the period of leasedcontract approximately 23-26 years.

30. Liabilities Under Financial Lease Agreement - Net30. Liabilities Under Financial Lease Agreement - Net30. Liabilities Under Financial Lease Agreement - Net30. Liabilities Under Financial Lease Agreement - Net30. Liabilities Under Financial Lease Agreement - Net Consist of :

Liabilities Under Financial Lease Agreement 45,104,261.32 101,005,671.10 43,347,808.00 98,416,301.10Less Deferred Interest Expense Under Financial Lease Agreement (584,375.00) (2,539,098.86) (507,623.51) (2,355,932.41) Current Portion of Liabilities Under Financial Lease Agreement (43,178,239.45) (41,337,382.59) (42,249,595.87) (40,317,952.53) Net 1,341,646.87 57,129,189.65 590,588.62 55,742,416.16

2) As of December 31, 2005 and 2004, loan in credit line of Baht 60.0 million is repayable and remained amount of Baht45.94 millions and Baht 55.94 millions respectively is loan due to one merchant bank for the period of 5 years, carriedinterest rate of MLR-1 or equivalent to 5.5% per annum . It is monthly repayable for the amount of Baht 1.0 millions perinstallment. Which the Company has to finish payment within August 2009. The first installment is repayable inSeptember 2004. From November, 2005 onwards, the subsidiary company has negotiated by verbal to repay principleinstallment of Baht 0.50 millions per month while there is improvement of leased place, equipment and leasehold right invarious branch and assets of Exertainment Co., Ltd. are collateral.

3) As of December 31, 2005 and 2004, the loan in credit line of Baht 15.0 million is repayable and remained amount ofBaht 12.0 millions and Baht 15.0 millions respectively is loan at one merchant bank carried interest rate of MLR% perannum. The term of repayment of principle is within 5 years. While the principle is gradually repayable by Baht 0.25millions per month plus interest. The first installment is repayable in January 2005.




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33. Advance Received from Sales Promotion33. Advance Received from Sales Promotion33. Advance Received from Sales Promotion33. Advance Received from Sales Promotion33. Advance Received from Sales Promotion

In accordance with the Company financial statements as of December 31, 2005, Revenue receivable from salepromotion in some part of Baht 22.0 Millions (amount in accordance with the contract of Baht 205.0 millions) is receiptof sponsorship fee of sale promotion from two companies, while carried the contract of total period of 5 years,commenced from the date the Siam Paragon Trading Center opened its operation and as of December 31, 2004, somepart of Baht 20.0 Millions (amount in accordance with the contract of Baht 30.0 millions) is receipt of advance revenue-sales promotion fee received from one company carried the contract for the period of 3 years. The Company recognizedthe revenue by amortization of straight-line method pursuant to the period.

34. Authorized Share Capital34. Authorized Share Capital34. Authorized Share Capital34. Authorized Share Capital34. Authorized Share Capital

Year 2004 The Company's increase share capital is as follows :Year 2004

In accordance with the minute of General Shareholders' Meeting no. 3/2547 held on April 22, 2004 the followingresolutions were approved unanimously ;

1.The increased share capital is approved of 15.0 millions in par value of Baht 1.0 per share aggregating toregistered share capital of 772.0 millions shares equivalent to total amount of Baht 772.0 millions so as to reserve forconversion to ordinary shares warrants which are issued.

2.The appropriation of ordinary shares is approved 15 millions shares for2.1 The conversion to ordinary shares of warrants to purchase ordinary shares in order to appropriate to

directors and of the Company (ESOP-W2) in number 3,500,000 shares.2.2 The right exercise in accordance with ESOP-W1 and MAJOR-W1 is additionally reserved when there is right

adjustment which is resulted in dividend payment exceeding 50% of net profit after corporate income taxin number of 11,500,000 shares.

2.3 In case of ordinary shares remaining due to unexercised conversion in accordance with warrants appropriated directors and staff (ESOP-W2) ,the board of directors consider and propose to shareholders meetingfor further approval.

3.The issuance and offer of warrants to purchase the company ordinary shares are approved to directors and staff(ESOP-W2) in number of 3,500,000 units.

The company additionally registered such shares capital with the Ministry of commerce on April 27, 2004.In accordance with the Extra-ordinary Shareholders Meeting no.1/2547 held on July 14, 2004, it was resolved that

the increased share capital is 125.0 millions shares in par value of Baht 1 per share aggregating to new registered sharecapital of 897.0 millions shares equivalent to aggregated amount of Baht 897.0 million with the appropriation as follows

1.The appropriation of increased ordinary shares in number of 120,000,000 shares, par value of Baht 1 per shareto shareholders and warrants-holders of EGV so as for repayment in replacement shares EGV in accordancewith the merger plan.

2.The appropriation of increased ordinary shares in number of 5,000,000 shares, par value of Baht 1 per shareso as for reservation of additional might exercise in accordance with the Company warrants, for instance, ESOP-W1, MAJOR-W1 and ESOP-W2 when there right adjustment which is resulted from the new increased shareissuance so as for repayment of shares fee by shares and warrants of EGV in accordance with the merger plan.

The Company registered such increased share capital at the Ministry of commerce on July 29, 2004. After themerger of such business the Company constitutes the paid-up share capital of Baht 707.49 million whereby theCompany has registered the change of paid-up share capital at the Ministry of Commerce on September 30,2004.

35.35.35.35.35. WarrantsWarrantsWarrantsWarrantsWarrants

ESOP-W2ESOP-W2ESOP-W2ESOP-W2ESOP-W2

As of July 6, 2004, the Company issued warrants to purchase the Company ordinary shares (ESOP-W2) to thedirectors and employees in number of 3,500,000 units the offered price per unit zero Baht. Such warrant not exceeding4 years from issued date. The rate of right exercise is one unit of warrant is entitled to purchase 1 ordinary share in theexercised price of Baht 15.28 per one ordinary share.

As of December 31 , 2005 , non warrants holders of ESOP-W2 exercised their right.

ESOP-W1ESOP-W1ESOP-W1ESOP-W1ESOP-W1

As of May 27, 2003, the Company Issued warrants to purchase the Company ordinary shares (ESOP-W1) to thedirectors and employees in number of 19,500,000 units the offered price per unit zero Baht. Such warrant not exceeding5 years from issued date. The rate of right exercise is one unit of warrant is entitled to purchase 1 ordinary share in theexercised price of Baht 13.16 per one ordinary share.

As of November 25, 2003, the company amended the price of right exercise and the rate of right exercise topurchase ordinary shares new warrants to one unit of warrant (ESOP-W) which is entitled to purchase ordinary share of1.051 shows in the exercise price of Baht 12.516 per one ordinary share.

As of February 24, 2004, the company amended the price of right exercise and the rate of right exercise topurchase ordinary shares new warrants to one unit of warrant (ESOP-W) which is entitled to purchase ordinary share of1.068 shows in the exercise price of Baht 12.320 per one ordinary share.

As of December 31, 2003, the warrants-holders of ESOP-W exercised their rights to purchase ordinary shares innumbers of 710,000 units remaining non-exercised warrants in number of 18,790,000 units. After such right exercise, the

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Company constitutes the paid-up share capital in number of 587.71 millions shares in par value of Baht 1 per shareaggregating to Baht 587.71 millions. The Company has already amended the paid-up share capital with the ministry ofcommerce since October 3, 2003.

As of September 30, 2004, warrants holders of ESOP exercise their rights to subscribe ordinary shares of 1,719,195units, remaining unexercised warrants of 17,070,805 units. After such exercise, the Company constitutes paid-up sharescapital of 709.32 millions shares, par value of Baht 1 per share aggregating to Baht 709.32 millions. The Company hasamended the paid-up share capital at the ministry of commerce since October 8, 2004.

As of December 31 , 2005, non warrants holders of ESOP-W2 exercised their right.

MAJOR-W1MAJOR-W1MAJOR-W1MAJOR-W1MAJOR-W1

As of January 30, 2004, the Company issued warrants to purchase the Company ordinary shares (MAJOR-W1) toformer shareholder in number of 146,926,992 units the offered price per unit zero Baht. Such warrant last for 3years commenced from issued date. The rate of right exercise is one unit of warrant is entitled to purchase 1 ordinaryshare in the exercised price of Baht 13.00 per one ordinary share.

As of February 24, 2004, the company amended the price of right exercise and the rate of right exercise topurchase ordinary shares new warrants to one unit of warrant (MAJOR-W1) which is entitled to purchase ordinary shareof 1.016 shows in the exercise price of Baht 12.796 per one ordinary share.

As of December 31, 2005, there are right exercisers in accordance with warrants to purchase ordinary shares bynumber of 1,250 units remained unexercised warrants which will purchase ordinary share in number of 146,925,742 units.The Company has reflected receipt from such right exercise by Baht 16,250.92 which is receipt in advance of sharesubscription fee in the balance sheet since the company has registered share capital increment which is issued and fullcalled for paid up from such right exercise and Ministry of Commerce on January 16, 2006.

36.36.36.36.36. Premiums on Share CapitalPremiums on Share CapitalPremiums on Share CapitalPremiums on Share CapitalPremiums on Share Capital

As of December 16, 2004, the Company extra-ordinary shareholders meeting no. 2/2004, it is resolved thatthe company transferred premiums on share capital by Baht 279,764,396.89 so as to compensate the company'saccumulated loss as of September 30, 2004.

37.37.37.37.37. Legal ReserveLegal ReserveLegal ReserveLegal ReserveLegal Reserve

As of December 16, 2004, the Company extra-ordinary shareholders meeting no. 2/2004, it is resolved thatthe company transferred the legal reserve by Baht 37,451,064.26 so as to compensate the Company'saccumulated loss as of September 30, 2004.

38. Dividends38. Dividends38. Dividends38. Dividends38. Dividends

In accordance with the Minute of Board of Directors Meeting no.4/2005 which held on August 11, 2005, it isunanimously resolved that the Company repays dividend for the operation result for the period of 6 months, 2005 by therate of Baht 0.25 per share to the total shareholders by number of 709.32 millions shares aggregating to total amount ofBaht 177.33 millions. Moreover, the legal reservation is appropriated by amount of Baht 12.39 millions. Presently, thedividend is fully repayable.

In accordance with the resolution of the Company Board of Directors no. 1/2005 held on February 25, 2005 and inaccordance with the minute of General Shareholders' Meeting no. 4/2005 held on April 5, 2005, it was unanimouslyresolved to approve the dividend payment for the operating result of 4th quarter, of 2004 in the rate of Baht 0.05 pershare to the whole shareholders in number of 709.32 millions shares aggregating to total Baht 35.47 millions andappropriated legal reserve in amount of Baht 2.10 million. The dividend is fully repayable to shareholders.

In accordance with the resolution of the Company Board of Directors no. 2/2004 held on February 24, 2004 and inaccordance with the minute of General Shareholders' Meeting no. 3/2004 held on April 22, 2004, it was unanimouslyresolved to approve the dividend payment for the operating result of year 2003 in the rate of Baht 0.60 per share to thewhole shareholders in number of 587.71 millions shares aggregating to total Baht 352.63 millions.

39. Director's Remuneration39. Director's Remuneration39. Director's Remuneration39. Director's Remuneration39. Director's Remuneration

Director's remuneration is contributed to directors of the parent company as per section 90 of the Public companyAct, (B.E. 2535) excluding salaries and related fringe benefit paid to management directors.

40. Corporate Income Tax40. Corporate Income Tax40. Corporate Income Tax40. Corporate Income Tax40. Corporate Income Tax

The parent company computed corporate income tax pursuant to the decree basis no. 387 which reduces corporateincome tax from 30% to 25% for the 5 consecutively accounting periods commenced from the initial accounting periodin or after the date the company constitutes securities listed in the Stock Exchange of Thailand (as of May 23, 2002), inaccordance with the law of Securities and Security Market. Therefore, the company computed at the rate of 25% ofaccounting net profit before recognition of equity from investment in the subsidiary and associated companies, but aftermaking adjust transaction in accordance with the Revenue Code respectively.

The subsidiary computed the corporate income tax rate of 30% and the rate for small to medium enterprisesoperator (SMEs) of the accounting net profit after adding back the adjusted transactions pursuant the Revenue Code.

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41.41.41.41.41. Earnings per ShareEarnings per ShareEarnings per ShareEarnings per ShareEarnings per Share

The company calculated the earnings (loss) per share by dividing the Net Profit (Loss) of the period by the weightedaverage number of ordinary shares as follows:

41.1 For the Year ended on December 31, 2005

The weighted averageNet Profit Number of ordinary Earnings per share

shares (Baht) (Shares) (Baht)

Basic earnings per shareBasic earnings per shareBasic earnings per shareBasic earnings per shareBasic earnings per shareNet Profit (LOSS) 534,990,142.87 709,322,633 0.75

Effect of diluted potential common share warrantsEffect of diluted potential common share warrantsEffect of diluted potential common share warrantsEffect of diluted potential common share warrantsEffect of diluted potential common share warrantsWarrants convertable into ordinary shares No.1 (MAJOR-W1)

146,926,992 Unit Conversion Right 1 unit of warrantwill be entitled to 1.016 ordinary share. The exercise pricefor ordinary shares will be baht 12.796 per share. - 221,324 -

Warrants convertable into ordinary shares to Directors andemployees (ESOP-W) 17,070,805 Unit Conversion Right 1 unit of warrant will be entitled to 1.068 ordinary share. Theexercise price for ordinary shares will be Baht 12.320 per share. - 704,225 -

Diluted earning per shareDiluted earning per shareDiluted earning per shareDiluted earning per shareDiluted earning per shareProfit of Common Share holders assumedas conversion to common share 534,990,142.87 710,248,182 0.74

41.2 For the Year ended on December 31, 2004

Basic earnings per shareBasic earnings per shareBasic earnings per shareBasic earnings per shareBasic earnings per shareNet Profit (LOSS) (479,412,583.08) 619,061,401 (0.77)Effect of diluted potential common share warrantsEffect of diluted potential common share warrantsEffect of diluted potential common share warrantsEffect of diluted potential common share warrantsEffect of diluted potential common share warrants

Warrants convertable into ordinary shares No.1 (MAJOR-W1)146,926,992 Unit Conversion Right 1 unit of warrantwill be entitled to 1.016 ordinary share. The exercise price

for ordinary shares will be baht 12.796 per share. - 18,891,542 -Warrants convertable into ordinary shares to Directors and

employees (ESOP-W) 18,790,000 Unit Conversion Right1 unit of warrant will be entitled to 1.068 ordinary share. The

exercise price for ordinary shares will be Baht 12.320 per share. - 2,899,636 -Diluted earning per shareDiluted earning per shareDiluted earning per shareDiluted earning per shareDiluted earning per share

Profit of Common Share holders assumed as conversion to common share (479,412,583.08) 640,852,579 (0.75)

42. Number and Expenses of Employees42. Number and Expenses of Employees42. Number and Expenses of Employees42. Number and Expenses of Employees42. Number and Expenses of Employees

Consolidated The Company Only

2548 2547 2548 2547

The average number of employee (persons) 8,968 2,817 4,029 1,381Employee Expenses (millions baht)For the year ended on December 31 404.08 247.67 176.64 169.35

The weighted averageNet Profit Number of ordinary Earnings per share

shares (Baht) (Shares) (Baht)

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The Company and its subsidiaries are engaged in 6 types of business namely cinema business which involvesshowing films and selling food and beverage business, bowling and karaoke Business, rentals and service business,advertising business, fitness center business and Sale VCD DVD and film copy right and profit on each typeof business arises from total sales less cost of sales and administrative expenses of each business.

The fixed assets of each type of business are used for its operation whereas joint assets include other assets notclassed as fixed assets.

Determination of transferred prices between sectors which is materialised as follows :

43. Disclosure of Sectoral Business Operation43. Disclosure of Sectoral Business Operation43. Disclosure of Sectoral Business Operation43. Disclosure of Sectoral Business Operation43. Disclosure of Sectoral Business Operation

Information on sectoral business operation is as follows:

ConsolidatedFor the Year ended on December 31, 2005

Cinema Bowling and Rentals and Services Fitness Sales VCD DVD Written-off TotalBusiness Karaoke Services Advertising Center and Film Copy Right Items

Revenue fromsales and services 2,730,274 502,799 474,935 820,703 22,645 554,919 (518,761) 4,587,514Profit(Loss)from operation 586,253 164,515 270,015 566,536 (1,016) 106,999 (69,331) 1,623,971Common Expense 1,011,515Interest Expense 102,831Corporate Income Tax 228,005Net Profit(Loss) 534,990Fixed Assets 2,765,106 700,939 835,311 9,627 60,949 8,193 209,011 4,589,136Common Assets 2,804,821Total Assets 7,393,957

'000 Baht '000 Baht '000 Baht '000 Baht '000 Baht '000 Baht '000 Baht '000 Baht

ConsolidatedFor the Year ended on December 31, 2005

Cinema Bowling and Rentals and Services Fitness Sales VCD DVD Written-off TotalBusiness Karaoke Services Advertising Center and Film Copy Right Items

Revenue fromsales and services 1,837,286 301,053 425,323 372,525 3,224 108,199 (240,097) 2,807,513Profit(Loss)from operation 402,053 103,340 222,190 272,520 (2,543) 20,573 (39,346) 978,787Common Expense 1,458,009Interest Expense 44,475Corporate Income Tax 106,298Net Profit(Loss) (479,412)Fixed Assets 2,614,634 483,029 819,314 4,437 67,407 6,122 250,390 4,245,333Common Assets 2,416,111Total Assets 6,661,444

'000 Baht '000 Baht '000 Baht '000 Baht '000 Baht '000 Baht '000 Baht '000 Baht

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Basis in the determination of transferred prices between sectors of the Parent Company and its subsidiaries andrelated companies (see note to financial statements no. 6.1)

Basis in the determination of transferred prices between sectors of subsidiaries and related companies incurredbetween each other which is materialised as follows :

Policy of Price Determination- Revenue/Cost from leased area and central service fee Lumsum price monthly installment pursuant to

contract- Interest receivable/payable Referred to interest rates of merchant banks plus

spread or cost acquired plus price spread- Revenue/Cost of advertising expense In accordance with mutual memorandum/Lum Sum

rate per month and to be a percentage of revenue

44. Financial Instruments44. Financial Instruments44. Financial Instruments44. Financial Instruments44. Financial Instruments

The Company and its subsidiary has disclosed information concerning financial instruments in accordance with theguidelines under accounting standard No.48 concerning disclosure of information relating to financial instruments.Financial instruments, both shown and not shown in the balance sheets, are as follows :

44.1 Risk Management

The Company and its subsidiary have no policy to deal in financial instruments for speculation or trade.

44.2 Interest Rate Risk

Interest rate risk arises from the fluctuation of interest rates in the future which will affect operations and cashflow of the Company and subsidiary because its cash deposits, short term loans and long term loans frombanks and financial institutions carry a floating interest rate, which is similar to the current fair market rate forloans and have similar repayment terms.

The Company had assets and liabilities instruments to hedge against this risk as follow :

Consolidated The Company Only Interest Rate As of As of As of

Dec.31, 05 Dec.31, 04 Dec.31, 05 Dec.31, 04 Dec.31, 05 Dec.31, 04 Million Baht Million Baht Million Baht Million Baht % %

Loans to Subsidary amdRelated Compamies 2.35 2.95 1,110.57 261.94 5.75-6.50 5.75-8Loans to Director and Employees 8.12 8.25 5.36 4.46 3.00 3.00Short Term Loans fromFinancial Institute 778.00 1,173.07 570.00 400.00 3.80-5.25 1.80-6.00Loans from Subsidary Companies - - 86.13 122.68 5.75-6.50 5.75-8Long Term Loans 1,393.94 1,097.44 1,276.00 875.00 3.25-3.50, MLR -0.75 3-3.5,

MLR-1.50,MLR-2 MLR -1,MLR-2

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44.3 Exchange Rate RiskThe Company is not exposed to any risk from foreign exchange rate fluctuations because its main enterprise isconducted locally except for the purchase of some overseas assets. In any case the Company has not enteredinto any foreign exchange forward contracts because the amount is insignificant.

44.4 Credit Risk

The Company has not significant credit risk because most of its customers pay cash.

44.5 Fair Value

Because most of the cash financial assets and liabilities are of short term nature and loans have a fixed interestat market rate, thus management of the Company and subsidiary believe that the book value of such financialassets and liabilities does not differ significantly from the fair value.

45. Obligations and Contingent Liabilities45. Obligations and Contingent Liabilities45. Obligations and Contingent Liabilities45. Obligations and Contingent Liabilities45. Obligations and Contingent Liabilities

45.1 In accordance with the consolidated financial statements, the Ratchayothin Cinema Company Limited which issubsidiary company conducted the contract with Imax Corporation Co., Ltd. (Canada) so as to jointly appointthe Bangkok Imax Theatre Co., Ltd., a subsidiary company as an agent in running theater of Bangkok ImaxTheater with the term and covenant as follows:

1. Ratchayothin Cinema Co., Ltd. is responsible for area appropriation of as theater including supervision ofsales promotion, maintenance and quality control including standard of theater. In addition, it is responsible forexpense of insurance and risk from assets.

2. Imax Corporation Co., Ltd. (Canada) is responsible for appropriation and supervision of instruments of filmshowing.

Under such contract, if the results of operation of Bangkok Imax Theater Co., Ltd. generated net profitor net loss, Ratchayothin Cinema Co., Ltd. and Imax Corporation Co., Ltd. (Canada) will jointly receive results ofprofit or loss at the rate of 50: 50. Moreover, if the results of operation incurred gross loss, Imax CorporationCo., Ltd., (Canada) will cancel the term of consideration receipt from Bangkok Imax Theater Co., Ltd. in thehighest amount of US Dollars 0.10 millions. The contract maturity is terminated in December, 2010.

Presently, Ratchayothin Cinema Co., Ltd. and Imax Corporation Co., Ltd. (Canada) have not conducted any contract to appoint Bangkok Imax Theater Co., Ltd. as agent in management.

45.2 In accordance with the consolidated financial statements as of December 31, 2005, subsidiaries in number of3 companies constitute commitment obligation of leasehold right fee in amount Baht 61.25 millions in accordance with the contract of leasehold right subscription on the subject of leasehold right transfer dated onNovember 16, 2004, while it was receipt of some part of area leasehold right transfer in the area of 7th floorand 8th floor of Siam Paragon Trading Center Building for the period of 25 years, commenced from the dateSiam Paragon Trading Center opened its operation from Major Cineplex Group Public Co., Ltd.

45.3 In accordance with the consolidated and the Company financial statements, the Company constitutesobligation commitment from guarantee loan to Pacific Marketing and Entertainment Group Co., Ltd.which is subsidiary, to one merchant bank by Baht 240.0 millions which constitutes one yearcommitment so as for financial support to subsidiary company.

45.4 In accordance with the consolidated and the Company financial statements, the Company constitutesobligation commitment from guarantee loan to M Pictures Co., Ltd. which is subsidiary, to onemerchant bank by Baht 200.0 millions commitment so as for financial support to subsidiary company.

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45.5 The company holds commitment obligation and contingent liability as follows:

Letter of Credit 24.45 30.94 24.45 30.94Letter of Guarantee 31.41 32.98 12.23 16.48Cheque Payable to Guarantee 3.11 - 3.11 -

Apart form this, one subsidiary constitutes commitment obligation from letter of guarantee which is foreign currencyby amount of USD 0.50 millions.

45.6 In accordance with the consolidated and the Company financial statements as of December 31, 2005, theCompany and subsidiaries comprised commitment obligation in accordance with the contract of long termlease whit outside party from the lease of land, lease of building area and contract of long term service withoutside party as follows:

45.6.1Leased fee and service fee which is called for collection in the constant rate in number of 45 contracts and 9contracts respectively, carried the life of service and leased contract of 2-30 years while the commitmentobligation in accordance with the contract as follows:

Consolidated The Company Only Million Baht Million Baht

Within 1 year 415.07 140.37over 1 year, but not over 5 years 1,386.31 598.10over 5 years 3,695.94 1,091.07

45.6.2 Leased fee and service fee which is asked for collection in accordance with percentage rate over revenue ofeach operation place in number of 16 contracts and 5 contracts respectively, carried the contract of leased andservice of 3-25 years while it computes rate of leased fee and service of 3.00-25.00% per annum and 4.50-15.00% per annum over revenue of each operation place respectively.

However, the leased fee and service fee for the year ended on December 31, 2005 as follows :

Consolidated The Company Only Million Baht Million Baht

Rentals 250.83 85.91Services 175.26 80.04

46. Approval of the Interim Financial Statements.46. Approval of the Interim Financial Statements.46. Approval of the Interim Financial Statements.46. Approval of the Interim Financial Statements.46. Approval of the Interim Financial Statements.

These interim financial statements have been approved by the company's directors.

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Reference

Share RegistrarShare RegistrarShare RegistrarShare RegistrarShare Registrar Thailand Securities Depository Co., Ltd.62 Stock Exchange of Thailand, Floor 4,6 and 7Rachadapisek Rd., Klongtoey, Bangkok 10110Tel: 02-359-1200-1

Financial AdvisorFinancial AdvisorFinancial AdvisorFinancial AdvisorFinancial Advisor Asia Plus Securities Plc.11st Floor, Sathorn City Tower,175 South Sathorn Rd., Tungmahamek,Sathorn, Bangkok 10120Tel: 02-680-1111

AuditorAuditorAuditorAuditorAuditor Mr. Somchai KurujitkosolAuthorized Auditor No. 3277S.K. Accountant Services Co., Ltd.128/151 14th Floor, Phayathai Plaza Building,Phayathai Rd., Rachthevee, Bangkok 10400Tel: 02-216-5621-22

Legal AdvisorLegal AdvisorLegal AdvisorLegal AdvisorLegal Advisor Mr. Chaiwat MaraprungsavanC.B. Law Office Ltd.2/22 10th Floor Sathornthani 2 BuildingNorth Sathorn Rd., Silom, Bangrak, Bangkok 10500Tel: 02-238-3689-90, 02-233-5399

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