MIRA INFORM REPORT

Report Date :

02.12.2011

IDENTIFICATION DETAILS

Name :	GMM GRAMMY PUBLIC COMPANY LIMITED
Registered Office :	Gmm Grammy Place, 50 Sukhumvit 21 Road, Klongtoeynua, Wattana, Bangkok 10110
Country :	Thailand
Financials (as on) :	31.12.2010
Date of Incorporation :	11.11.1983
Com. Reg. No.:	0107537000955
Legal Form :	Public Limited Company
Line of Business :	Entertainment Operator
No. of Employees :	1,819 Persons

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	No Complaints
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – September 30^th, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
Thailand	b1	b1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

Company name

GMM GRAMMY PUBLIC COMPANY LIMITED

SUMMARY

BUSINESS ADDRESS : GMM GRAMMY PLACE, 50 SUKHUMVIT 21 ROAD,

KLONGTOEYNUA, WATTANA, BANGKOK 10110

TELEPHONE : [66] 2669-9000

FAX : [66] 2669-9009

E-MAIL ADDRESS : cs@gmmgrammy.com

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 1983

REGISTRATION NO. : 0107537000955

CAPITAL REGISTERED : BHT. 530,556,100

CAPITAL PAID-UP : BHT. 530,264,947

FISCAL YEAR CLOSING DATE : DECEMBER 31

LEGAL STATUS : PUBLIC LIMITED COMPANY

EXECUTIVE : MS. BOOSABA DAORUENG, THAI

CO-CHIEF EXECUTIVE OFFICER

NO. OF STAFF : 1,819

LINES OF BUSINESS : ENTERTAINMENT OPERATOR

CORPORATE PROFILE

OPERATING TREND : STABLE

PRESENT SITUATION : OPERATING NORMALLY

REPUTATION : GOOD WITH NORMAL BUSINESS ENGAGEMENT

MANAGEMENT STANDARD : MANAGEMENT WITH GOOD PERFORMANCE

HISTORY

The subject was formed on November 11, 1983, originally as a private limited company under the registered name “Grammy Entertainment Co., Ltd.”, by Thai groups. On March 25, 1994, its status was changed to be a public company, namely “Grammy Entertainment Public Company Limited”. On October 25, 2001, its finally registered name was changed to GMM GRAMMY PUBLIC COMPANY LIMITED. Its objective to be engaged in musical and entertainment business through the subject and their subsidiaries. Subject currently employs 1,819 staff.

The subject’s registered address is 50 Sukhumvit 21 Rd., Klongtoeynua, Wattana, Bangkok 10110, and this is the subject’s current operation address.

THE BOARD OF DIRECTOR

Name		Nationality	Age
Mr. Paiboon Damrongchaitham		Thai	-
Ms. Boosaba Daorueng	[x]	Thai	-
Ms. Suwimon Chungjotikapisit	[x]	Thai	-
Mrs. Saithip Montrikul Na Ayudhya	[-]	Thai	-
Mr. Krij Thomas	[-]	Thai	-
Mr. Takonkiet Viravan	[-]	Thai	-
Mr. Kriengkarn Kanjanpokin	[-]	Thai	-
Mr. Sataporn Panichraksapong	[-]	Thai	-
Mr. Dej Bulsuk		Thai	-
Mr. Chai Nasylvanta		Thai	-
Mr. Weerawong Chittmittrapap		Thai	-
Ms. Suvabha Charoenying		Thai	-

AUTHORIZED PERSON

Any of the mentioned directors [x] can jointly sign with anyone of the mentioned directors [-] on behalf of the subject with company’s affixed.

MANAGEMENT

Ms. Boosaba Daorueng is the Co-Chief Executive Officer.

She is Thai nationality.

Mrs. Saithip Montrikul Na Ayudhya is the Co-Chief Executive Officer.

She is Thai nationality.

Mr. Kittisak Chuang-A-Roon is the Senior Executive VP [CEO Office].

He is Thai nationality.

Mr. Krij Thomas is the Senior Executive VP [Music Business].

He is Thai nationality.

Mr. Premon Pinskul is the Chief Financial Officer.

He is Thai nationality.

M.L. Kornkasiwat Kasemsri is the Chief Operating Officer.

He is Thai nationality.

Mr. Chanchai Phansopha is the Chief Marketing Officer.

He is Thai nationality.

BUSINESS OPERATIONS

The subject is engaged in operating a complete range of musical and entertainment business, divided into 4 main businesses as follows:

1. Music business and related businesses:

Music business

Digital business

Show business

Artists management

2. Media Business:

Radio business

Television business

Publishing business

Full service events creation and management business

Broadcasting (Satellite Television) business

3. Movie Business:

Movie business produces featured films for screening in movie theatres

4. Other Businesses:

Other businesses include fitness club service, call center service and education related

Business (Mifah Music Academy)

PURCHASE

Entertainment and broadcasting equipment and supplies are purchased from suppliers both domestic and overseas in Japan, Republic of China, U.S.A. and European countries.

SALES/SERVICES

100% of the products is sold and serviced locally to traders and end-users.

SUBSIDIARY AND AFFILIATED COMPANY

The group of companies consist of:

• GMM Music Publishing International Co., Ltd.
• GMM Media Public Company Limited.
• GMM Tai Hub Co., Ltd.
• GMM Holding Co., Ltd.
• Nadao Bangkok Co., Ltd.
• Sawasdee Thaweesuk Co., Ltd.
• GMM Media Co., Ltd.
• Exact Co., Ltd.
• GMM TV Co., Ltd.
• Deetalk Co., Ltd.
• Scenario Co., Ltd.
• Image On Air Co., Ltd.
• Channel [V] Music [Thailand] Co., Ltd.
• Family Know How Co., Ltd.
• GTH On Air Co., Ltd.
• One Sky Co., Ltd.
• Image Publishing Co., Ltd.
• GMM Inter Publishing Co., Ltd.
• Bliss Publishing Co., Ltd.
• GMM Studio Co., Ltd.
• GMM Digital Domain Co., Ltd.
• Mass Monitor Co., Ltd.
• Global Music and Media Co., Ltd.
• etc.

LITIGATION

Bankruptcy and Receivership

There are no litigation on bankruptcy and receivership cases filed against the subject found at Legal Execution Department for the past five years.

Others

There are no legal suits filed against the subject for the past two years.

CREDIT

Sales are by cash or on the credits term of 30-60 days.

Local bills are paid by cash or on the credits term of 30-60 days.

Imports are by L/C at sight or T/T on negotiated terms.

BANKING

Bangkok Bank Public Co., Ltd.

[Head Office, 333 Silom Rd., Silom, Bangrak, Bangkok]

Kasikornbank Public Co., Ltd.

[Phaholyothin Office, 400/22 Phaholyothin Rd., Samsennai, Phyathai, Bangkok]

EMPLOYMENT

The subject employs 1,819 staff.

LOCATION DETAILS

The premise is owned for administrative office at the heading address. Premise is located in a prime commercial area.

REMARK

MAXIMUM CREDIT SHOULD BE GRANTED AT US$ 10,000,000.

COMMENT

The company is a leader in entertainment and multimedia business in Thailand. It creates produce and distribute music and are engaged in commercial spot, television and radio, publishing, edutainment and digital-business with over 30 subsidiaries.

The company’s fundamentals showed solid growth even though Thailand continued to face political and economic problems.

FINANCIAL INFORMATION

The capital was registered at Bht. 530,556,100 divided into 530,556,100 shares of Bht. 1 each, with Bht. 530,264,947 paid-up.

MAIN SHAREHOLDERS : [as at August 26, 2011] at Bht. 530,264,947 of capitalization

NAME	HOLDING	%
Mr. Paibul Damrongchaitham Nationality: Thai Address : -	266,093,230	50.18
Chase Nominees Limited 42 Nationality: Singaporean Address : -	47,186,400	8.90
Mr. Thaveechat Jurangkul Nationality: Thai Address : -	27,754,800	5.23
Mr. Paibul Damrongchaitham Nationality: Thai Address : -	22,968,400	4.33
State Street Bank and Trust Company for Switzerland Nationality: Swiss Address : -	21,335,200	4.02
State Street Bank and Trust Company for Australia Nationality: Australian Address : -	17,989,766	3.39
Thai NVDR Co., Ltd. Nationality: Thai Address : -	17,329,717	3.27
Nortrust Nominees Ltd. Nationality: Thai Address : -	14,580,854	2.75
Others	95,026,580	17.93

Total Shareholders : 2,273

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO. :

Ms. Siraporn Ua-anankul No. 3844

BALANCE SHEET [BAHT]

The latest financial figures published for December 31, 2010 & 2009 were:

ASSETS

Current Assets	2010	2009
Cash & Cash Equivalent	198,295,185	216,821,395
Trade Accounts Receivable Related Parties & Directors	95,039,262	39,473,081
Unrelated Parties	677,451,172	718,148,684
Less: Allowance for Doubtful Accounts	[44,376,772]	[51,718,229]
Trade Accounts Receivable - Net	728,113,662	705,903,536
Advances to, Interest Receivable & Dividends Receivable from Related Parties & Directors-Net	246,297,106	50,421,902
Short-term Loan to Related Company	590,866,181	636,602,213
Other Current Assets Advance Payments - Net	18,856,093	21,663,560
Accrued Income Related Parties	17,921,141	27,960,626
Unrelated Parties	102,462,257	143,246,007
Prepaid Expenses	5,430,108	10,273,800
Input Tax Refundable	5,646,293	5,626,878
Withholding Tax deducted at Source	4,482,887	33,671,824
Others	21,766,489	12,795,532
Total Current Assets	1,940,137,402	1,864,987,273
Investment in Subsidiary Companies - Net	901,839,630	905,835,817
Investment in Associates	25,000,000	25,000,000
Other Long-term Investments - Net	453,135,483	344,977,393
Goodwill	41,500,000	47,000,000
Property, Plant & Equipment - Net	136,650,054	159,458,814
Intangible Assets - Net	268,110,810	261,275,100
Other Assets Deposits	31,310,582	32,763,003
Leasehold Rights - Net	14,673,415	24,472,072
Others	43,836,892	4,552,756
Total Assets	3,856,194,268	3,670,322,228

LIABILITIES & SHAREHOLDERS' EQUITY [BAHT]

Current Liabilities	2010	2009
Bank Overdraft & Short-term Loan from Bank	70,000,000	150,000,000
Trade Accounts Payable & Accrued Cost Related Parties, Management & Directors	140,970,336	106,210,872
Unrelated Parties	551,637,438	555,368,732
Total Trade Accounts Payable & Accrued Cost	692,607,774	661,579,604
Accrued Payable - Purchase of Assets Related Parties	10,511,748	10,511,748
Unrelated Parties	3,703,899	883,693
Current Portion of Liabilities under Finance Lease Agreements	9,133,055	7,568,583
Other Current Liabilities Accrued Expenses	125,412,556	116,855,124
Unearned Income	56,170,131	54,060,273
Undue Output Tax	58,488,603	58,117,513
Others	37,252,920	42,495,186
Total Current Liabilities	1,063,280,686	1,102,071,724
Liabilities under Finance Lease Agreements - Net of Current Portion	23,609,884	27,001,251
Total Liabilities	1,086,890,570	1,129,072,975
Shareholders' Equity
Share capital : Baht 1 par value Authorized & issued share capital 530,556,100 shares	530,556,100	530,556,100
Capital Paid	530,264,947	530,264,947
Share Premium	1,626,117,776	1,626,117,776
Unrealized Gain / [Loss] Revaluation Surplus on Changes in Value of Investments	218,782,888	109,027,157
Retained Earning Appropriated for Statutory Reserve	53,055,610	53,055,610
Unappropriated	341,082,477	222,783,763
Total Shareholders' Equity	2,769,303,698	2,541,249,253
Total Liabilities & Shareholders' Equity	3,856,194,268	3,670,322,228

PROFIT & LOSS ACCOUNT

Sale	2010	2009
Sales of Audio Products & Copyrights	2,172,707,341	2,372,383,675
Sale from Production of Concerts	236,703,896	229,764,708
Artist Management Income	569,547,206	624,170,767
Sales from Production of Television Programmes	17,418,680	537,141
Sales from Production of Satellite Television Programmes	114,821,431	45,842,409
Sale from Advertising & Sales of Publishing Media & Teaching Aids	7,686,182	4,160,173
Other Income Sales from Studio Service	221,567	111,238
Sales from Production & Service	56,977,631	21,805,958
Management Fee & consultant Fee Income	95,398,804	59,283,996
Interest Income	10,039,296	13,517,707
Dividend Received & Profit Sharing from Jointly Controlled Entities	373,465,908	261,451,344
Others	94,182,186	83,207,388
Total Sales	3,749,170,128	3,716,236,504
Expenses
Cost of Sales & Productions	1,899,749,433	1,911,488,697
Selling Expenses	78,791,043	78,008,223
Administrative Expenses	1,148,505,138	1,146,650,301
Management Benefit Expenses	67,760,000	75,923,000
Total Expenses	3,194,805,614	3,212,070,221
Profit / [Loss] before Financial Cost & Income Tax	554,364,514	504,166,283
Financial Cost	[5,677,061]	[8,789,980]
Income Tax	[48,598,553]	[12,230,732]
Net Profit / [Loss]	500,088,900	483,145,571

FINANCIAL ANALYSIS

ITEM	UNIT	2010	2009
LIQUIDITY RATIO
CURRENT RATIO	TIMES	1.82	1.69
QUICK RATIO	TIMES	1.66	1.46
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	23.24	20.69
TOTAL ASSETS TURNOVER	TIMES	0.82	0.90
INVENTORY CONVERSION PERIOD	DAYS	-	-
INVENTORY TURNOVER	TIMES	-	-
RECEIVABLES CONVERSION PERIOD	DAYS	77.85	79.46
RECEIVABLES TURNOVER	TIMES	4.69	4.59
PAYABLES CONVERSION PERIOD	DAYS	105.99	106.05
CASH CONVERSION CYCLE	DAYS	(28.13)	(26.59)
PROFITABILITY RATIO
COST OF GOODS SOLD	%	59.81	57.95
SELLING & ADMINISTRATION	%	40.78	39.43
INTEREST	%	0.18	0.27
GROSS PROFIT MARGIN	%	58.23	54.71
NET PROFIT MARGIN BEFORE EX. ITEM	%	17.45	15.28
NET PROFIT MARGIN	%	15.75	14.65
RETURN ON EQUITY	%	18.06	19.01
RETURN ON ASSET	%	12.97	13.16
EARNING PER SHARE	BAHT	0.94	0.91
LEVERAGE RATIO
DEBT RATIO	TIMES	0.28	0.31
DEBT TO EQUITY RATIO	TIMES	0.39	0.44
TIME INTEREST EARNED	TIMES	97.65	57.36
ANNUAL GROWTH
SALES GROWTH	%	(3.72)
OPERATING PROFIT	%	9.96
NET PROFIT	%	3.51
FIXED ASSETS	%	(14.30)
TOTAL ASSETS	%	5.06

PROFITABILITY RATIO

Gross Profit Margin	58.23	Impressive	Industrial Average	29.12
Net Profit Margin	15.75	Impressive	Industrial Average	0.34
Return on Assets	12.97	Impressive	Industrial Average	0.60
Return on Equity	18.06	Impressive	Industrial Average	1.49

Gross Profit Margin used to assess a firm's financial health by revealing the proportion of money left over from sales after accounting for the cost of goods sold. Gross profit margin serves as the source for paying additional expenses and future savings. The company’s figure is 58.23%. When compared with the industry average, the ratio of the company was higher, this indicated that company was more profitable than the same industry.

Net Profit Margin is the indicator of the company's efficiency in that net profit takes into consideration all expenses of the company. A low profit margin indicates a low margin of safety, higher risk that a decline in sales will erase profits and result in a net loss. The company’s figure is 15.75% compared with those of its average competitors in the same industry, indicated that business was an efficient operator in a dominant position within its industry.

Return on Assets measures how efficiently profits are being generated from the assets employed in the business when compared with the ratios of firms in a similar business. A low ratio in comparison with industry averages indicates an inefficient use of business assets. Return on Assets ratio is 12.97%, higher figure when compared with those of its average competitors in the same industry, indicated that business was an efficient profit in a dominant position within its industry.

Return on Equity indicates how profitable a company is by comparing its net income to its average shareholders' equity, ROE measures how much the shareholders earned for their investment in the company. Return on Equity ratio is 18.06%, higher figure when compared with those of its average competitors in the same industry, indicated that business was an efficient profit in a dominant position within its industry.

Trend of the average competitors in the same industry for last 5 years

Return on Assets Downtrend

Return on Equity Downtrend

LIQUIDITY RATIO

Current Ratio	1.82	Satisfactory	Industrial Average	1.99
Quick Ratio	1.66
Cash Conversion Cycle	(28.13)

The Current Ratio is to ascertain whether a company's short-term assets are readily available to pay off its short-term liabilities. The company's figure is 1.82 times in 2010, increase from 1.69 times, then it is generally considered to have good short-term financial strength. When compared with the industry average, the ratio of the company was lower.

The Quick Ratio is a liquidity indicator that further refines the current ratio by measuring the amount of the most liquid current assets there are to cover current liabilities. The company's figure is 1.66 times in 2010, increase from 1.46 times, although excluding inventory so the company still have good short-term financial strength.

The Cash Conversion Cycle measures the number of days a company's cash is tied up in the production and sales process of its operations and the benefit from payment terms from its creditors. It meant the company could survive when no cash inflow was received from sale for -29 days.

Trend of the average competitors in the same industry for last 5 years

Current Ratio Uptrend

LEVERAGE RATIO

Debt Ratio	0.28	Impressive	Industrial Average	0.92
Debt to Equity Ratio	0.39	Impressive	Industrial Average	2.29
Times Interest Earned	97.65	Impressive	Industrial Average	1.83

Debt to Equity Ratio a measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed. A lower the percentage means that the company is using less leverage and has a stronger equity position.

Times Interest Earned measuring a company's ability to meet its debt obligations. Ratio is 97.65 higher than 1, so the company can pay interest expenses on outstanding debt.

Debt Ratio shows the proportion of a company's assets which are financed through debt. The company's figure is 0.28 less than 0.5, most of the company's assets are financed through equity.

Trend of the average competitors in the same industry for last 5 years

Debt Ratio Uptrend

Times Interest Earned Uptrend

ACTIVITY RATIO

Fixed Assets Turnover	23.24	Impressive	Industrial Average	5.25
Total Assets Turnover	0.82	Deteriorated	Industrial Average	2.43
Inventory Conversion Period	-
Inventory Turnover	-		Industrial Average	17.66
Receivables Conversion Period	77.85
Receivables Turnover	4.69	Satisfactory	Industrial Average	5.67
Payables Conversion Period	105.99

Trend of the average competitors in the same industry for last 5 years

Fixed Assets Turnover Uptrend

Total Assets Turnover Uptrend

Inventory Turnover Uptrend

Receivables Turnover Uptrend

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.51.65
UK Pound	1	Rs.81.06
Euro	1	Rs.69.51

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
----	NB	New Business	----

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.