MAJOR: Annual Report 2013 by Piyanat Kimhamanon

Financial Highlights As of December 31

Revenue Bt.million EBITDA Bt.million Net profit Bt.million EBITDA margin3 Net margin

Lifestyle

EBITDA (Bt.million)

entertainment

2011

6,7486 2,127 7828 2% 12%1

*2012

,965 2,328 46 33%3 2%

2013

7,711 2,542 1,052 3% 14%

Total assets Bt.million Total liabilities Bt.million Total equity Bt.million

10,988 4,9315 6,0565

Number of shares million Book value Bt. Earnings per share Bt. Divendend per share Bt. Dividend payout9

881.98 6.87 0.90 0.82 1%

87.6 6.72 0.96 0.87 91%8

887.6 6.87 1.18 1.00 5%

Net interest-bearing D/E Return on assets Return on equity

0.42 7% 13%1

0.40 7% 4%

0.70 8% 17%

1Q11 2Q11 3Q11 4Q11

1Q12 2Q12 3Q12 4Q12

11,330 ,369 ,961

13,630 7,530 6,099

1Q13 2Q13 3Q13 4Q13

Contents MESSAGES

05 06

Chairman of the Board of Director Chairman of the Executive Commitee & CEO

PEOPLE

Directors & Management Team

ORGANIZATION

12 14 16

Organization Chart Group Structure General Information of Company, Subsidiaries, Associates & Joint Ventures

BUSINESSES

18 20 22 23 24 25 26

Cinema Bowling, Karaoke & Ice Skating Advertisng Services Rental & Services Movie content Strategic Investment Risk Factors

January 2013

GOVERNANCE

28 37 42 44 45 52 53

Good Corporate Govenance Corporate Management Structure Internal Control Human Resources Related Transactions Major Shareholders Employee Stock Option Program

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social and Environment Responsibility

FINANCIALS

57 59 60 61 62 71

Management Discussion & Analysis Audit Committee Report Responsibility Statement Auditor’s Report Financial Statement Notes to the Financial Statement

MILESTONE

• Opening of EGV Cinema at Lotus Mae-Sod with 4 theaters. • Opening Major Cineplex at Big C Roi-Et with 5 theaters. • On 8 January 2556, the Company established a subsidiary company, Major Holdings International Company Limited (“MHD”) as an investment company with the registered capital at 1 million Baht; the Company has the shareholding proportion at 99.96%. • Two subsidiaries decreased the registered ordinary shares: - Chiang Mai Cineplex Co., Ltd. reduced its share price from 25 baht per share to 7 baht per share for 200,000 shares, totaling Baht 3.6 million. - Udon Five Star Cineplex Co., Ltd. reduced its share price from 25 baht per share to 7 baht per share for 390,000 shares, Baht 7.02 million.

February 2013

• Opening Major Cineplex at Lotus Nakhonsawan with 4 theaters.

April 2013

• • • •

Opening Major Cineplex at Central Plaza UbonRatchathani with 7 theaters. Opening Major Cineplex at Lotus NongbuaLamphu with 4 theaters. On 3 April 2013, the Annual General Meeting of Shareholders has approve the decrease of the registered capital from Baht 904,500,990 to Baht 896,266,347 by eliminating the remaining registered ordinary shares amount of 8,234,643 shares at the par value of THB 1 per share, at the total amount Baht 8,234,643 due to the expiration of the warrants (ESOP - W3). The company registered the decrease of the registered capital at the Ministry of Commerce on 24 July 2013. On 3 April 2013, the Annual General Meeting of Shareholders has approved to pay the remaining dividend from the results of business operation for the period of July 2012 to December 2012 at the rate of Baht 0.48 per share, totaling Baht 425.95 million. The Company has scheduled the record date on 5 March 2013 to determine the shareholders entitled to receive dividend. The dividend payment shall be made on 2 May 2013.

• • •

On 3 May 2013, the company purchased 99.99% of share in Digital Projector Management Company Limited (“DPM”), which is a service provider for projector and system management, totally value at Baht 5 million. On 15 May 2013, the Company purchased additional shares in PVR BluO Entertainment Limited (“PVR BluO”) to retain the percentage of shareholding at 49% as of Rupee 67.30 million or equal to Baht 38.70 million. On 15 May 2013, the company issued 3-year debentures which can be characterized as an amortization, bullet payment, unsecured, with Debentureholders’ representative for Baht 800 million and the fixed interest rate was paid at 3.54% per annum.

May 2013

June 2013

• Opening Major Cineplex at Robinson Sakonnakhon with 4 theaters.

August 2013

• •

Opening Major Cineplex at The Sky Ayutthaya with 4 theaters. On 9 August 2013, the Board of Directors has approved to pay the dividend from the results of business operation for the period of January 2013 to June 2013 at the rate of Baht 0.50 per share, totaling Baht 443.78 million. The Company has scheduled the record date on 28 August 2013 to determine the shareholders entitled to receive dividend. The dividend payment shall be made on 6 September 2013.

• Opening Major Cineplex at Big C Suphanburi with 4 theaters.

• •

• Opening Major Cineplex at Robinson Saraburi with 6 theaters. • Opening Major Cineplex at Central Festival Chiangmai with 10 theaters, for digital 2D, 3D, 4DX and three-dimensional IMAX plus an ice-skating rink.

September 2013 October 2013

Opening Major Cineplex at Lotus Klaeng with 4 theaters. On 3 October 2013, a subsidiary made additional investment in Subsidiary “TLO” of 0.04 million shares totalling Baht 4.00 million. The acquisition resulted in the change in shareholding percentage from 80.00% to 90.00%. The difference from additional investment of Baht 5.21 million was recognized as “Change in parents’ ownership interest in subsidiaries” presented under shareholders’ equity.

November 2013

December 2556

• Opening the new brand, Hatyai Cineplex at Central Festival Hatyai with 10 theaters, for digital 2D, 3D, 4DX and three-dimensional IMAX with a 15-lane bowling and 10 karaoke rooms under the Blu-O Rhythm and Bowl plus an ice-skating rink. • During the year ended 31 December 2013, the Company made an additional investment in M Picture Entertainment Public Company Limited (“MPIC”) of 165.89 million shares for a total of consideration of Baht 426.87 million. Consideration paid included cash payment of Baht 383.43 million (mainly through tender offer) and exchange of ordinary shares of subsidiary “TLO” and joint venture “MKB” totaling amount Baht 43.44 million. The acquisition resulted in the change in shareholding percentage from 67.86% to 91.37%. • Gradual change of the investing fund in Siam Future Development Public Company Limited (from January – December 2013) by additional purchase of 102.97 million shares (7.80 baht per share), equivalent to 526,84 million baht while selling 30.52 million shares at the amount 313.03 million baht, The Company received a share dividend of 29.48 million. The cause resulted in the change in shareholding percentage from 20.49% to 23.72 %. 02

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

MESSAGES

SOMCHAINUK ENGTRAKUL CHAIRMAN OF THE BOARD OF DIRECTOR

“BUILDING MOVIE CULTURE BY INNOVATION”

The year 2013 was evident in underscoring the leading role of Major in entertainment industry. Major had largest branch expansion and introduced new technology to cater moviegoers with better experience. It also developed other relevant businesses to unleash its potentials. At present, digital communication provides fimovie - lovers with quick access to movie information. Evidently, newgeneration people prefer consuming information from online media and they tend to spend more and even more time with online social networks. Accordingly, many movies are introduced and promoted via various channels of online media. Such methods are able to enhance popularity of the movies, even before the production is completed. In this backdrop, Major adapts ourselves into Digital Platform the new dimension of digital entertainment world. This is the synchronization with the new industry trend of movie digitalization. For 2013 policy, Major plans to deepen the root of principal business for robust growth and continues to play an important role to promote Thai movie industry to flourish in both quantity and quality. It also plans to expand the branches to other provinces. This will be the foundation for the further growth of this industry as a whole. On behalf of the management team, I wish to express my thankfulness to our clients, staffs, shareholders, business alliances and other parties concerned for their trust, assistance and support in all fronts. I am deeply grateful in your confidence in us and continue to believe that such cooperation will be endless.

Best regards,

SOMCHAINUK ENGTRAKUL CHAIRMAN OF THE BOARD OF DIRECTOR

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

MESSAGES

Vicha Poolvaraluk

Chairman of the Executive Committee & CEO In 2013, Major enjoyed continued impressive top line and bottom line growth, strengthening its market position and stability even further. Our gross revenue grew significantly largely due to growing public interest in Thai produced films and our phenomenal expansion, adding 66 new theaters in strategic locations in Thailand. The expansion was mostly in other provinces out of Bangkok with the desirable combination of high consumer demand and low operating overhead. We reached out to small provinces and cities like Mae Sot (Tak), Rot Et, Nong Bua Lam Phu, Sakon Nakhon, Prachin Buri, Suphan Buri, while we increased our presence in major provinces and big cities including Ubon Ratchathani, Songkla (Hatyai) and Chiang Mai. Our bottom line profit was the largest since our inception, accompanied with improvements in all primary profit ratios. This was largely the result of our ability to implement offsetting effiffiiciency to respond to extraneous events affecting our business such as minimum wage increases, rising utility costs and the general political concerns.

We will continue to be the leader, using global standards, to provide the best technology, design, comfort and service for our customers to secure continued growth. We are very appreciative of the support of our dedicated Thai customers enabling us to obtain remarkable improvements in both our top and bottom line during a year that many considered challenging. Finally, on behalf of the Executive Committee, I wish to extend my heartfelt gratitude to all shareholders and partners for their confidence in us and their belief in us to build a strong future together.

“ASEAN AND NATIONWIDE EXPANSION

Major’s mantra is now “Transformation”. It involves change in all sectors of the organization, equipping us with swift, yet effiffiicienct, customer responsiveness to ensure sustainable growth via ever increasing customer satisfaction. Our transformation is being implemented in all corners of our business, using advances in technology as they become viable. For example, we changed all our 35-mm film projectors to a digital platform, enabling less projectionist overhead while gaining increasing advertising revenues due to the new flexibility and ease of operation. We shifted much of our ticket sales at box offiffiices to automatic E-ticket kiosks. Even in our in-theater communications, we converted our posters and banners to superior digital signage that enables greater effififi ciencies and better advertising revenues. For public communications, we increasingly use advanced social media options such as Facebook, Instagram, Twitter and Line, as vehicles to economically carry our news, offers and information to our clients. The response has been overwhelming. In 2014, Major plans to expand to other ASEAN countries but only when the economics and terms are appealing. Our consistent transformation has made Major the paramount leader in the Thai movie industry and the topic of numerous, favorable international reports. In Thailand, we lead in market share and technology employed. We have special or exclusive relationships with Digital Real D, Digital 2D, 3D, 4DX, IMAX to best serve our customers.

WITH SUSTAINABLE GROWTH”

Best regards,

Vicha Poolvaraluk Chairman of the Executive Committee & CEO

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

PEOPLE

Directors & Management Team Somchainuk Engtrakul Chairman of the Board

MAJOR Iconic Leadership Professionalism Adaptability Speed Service Excellence Innovation Optimism Networking

Age 69

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, USA Experience • 2004 - Present : Chairman of the Board, Major Cineplex Group Plc. • 2000 - 2004 : Permanent Secretary, Ministry of Finance • 1997 - 2000 : Director - General, The Customs Department, Ministry of Finance • 1996 - 1997 : Director - General, The Excise Department, Ministry of Finance Other positions • Chairman, Dhipaya Insurance PLC. • Chairman, Vejthani Public Company Limited • Chairman, Energy Absolute Public Company Limited Director Training Program • RCP - Role of the Chairman Program, Thai Institute of Director (IOD) • DAP – Director Accreditation Program, Thai Institute of Directors (IOD)

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

Relationship with Management • Chairman’s spouse Education • Master Degree of Business Administration, United States International University of Sandiego, USA • Bachelor Degree of Business Administration, Chulalongkorn University Experience • 1998 - Current : Director and Executive Director, Major Cineplex Group Plc.

Pol. Sub. Lt. Kriengsak Lohachala Director

Age 71

Education • Doctor of Public Administration, Ramkhamhaeng University • Master of Public Administration, Kent State University, USA • Bachelor of Laws, Thammasat University Experience • Present : Director, Major Cineplex Group Plc. • 2000-2002: Permanent Secretary, Bangkok Governor • 1990-2000: Deputy Permanent Secretary, Bangkok Governor Other positions • Consultant, Bureau of the Crown Property • Chairman of the board, MASTER AD PLC. • Member, Rajaprajanugroh Foundation under the Royal Patronage Director Training Program • DAP - Directors Accreditation Program, Thai Institute of Director (IOD)

• Member, Ruk Muangthai Foundation • Independent Director and Audit Committee, Pricha Group Plc.

Education • Master Degree of Accounting, Thammasart University • Bachelor Degree of Accounting, Chulalongkorn university Experience • 2002 - Present : Independent Director and Audit Committee, Major Cineplex Group Plc. • 1980 - 1997 : Executive Director and Cheif Finance Offif fi icer, The Minor Group Other Positions • Chairman of Audit Committee, Team Precision Plc. • Chairman of Audit Committee, Thai Metal Trade Plc. • Director, Siam Future Development Plc. • Audit Committee, Oishi Group Plc. • Audit Committee, Siam Food Plc. Director Training Program Thai Institute of Director (IOD) • ACP - Audit Committee Program • DCP - Director Certiffi ifi cation Program,

Shareholding 34.49%

Relationship with Management • Younger brother of the Chairman’s spouse Education • Master Degree of Business Administration, Boston University USA • Bachelor Degree of Business Administration, Chulalongkorn University Experience • 2002 - Present: Director and Executive Director, Major Cineplex Group Plc. • 2003 - Present: Director, Siam Future Development Plc. Other positions • President, Hofi tel Soffi itel So Bangkok • President, Veranda Resort and Spa • President, Viwat Construction Co.,Ltd. Director Training Program • DAP - Directors Accreditation Program, Thai Institute of Director (IOD)

Shareholding 3.43%

Shareholding 0.08%

Education • Master Degree of Business Administration, United States International University of San Diego, USA • Bachelor Degree of Business Administration, Chulalongkorn University Experience • 1995 - Present : Chairman, Major Cineplex Group Plc. • 2012 - Present : Chairman, Major Care Foundation • 2003 - Present : Director, Siam Future Development Plc. Other positions • Director, Member Activities, Chulalongkorn University Alumni Association • MAI Advisory Committee, Market of Alternative Investment Director Training Program • DCP - Director Certifif i fi cation Program, Thai Institute of Director (IOD)

Shareholding 0.89%

Director and Executive Director

Chai Jroongtanapibarn Age 59

Director, Chairman of Executive Committee and CEO

Director and Executive Director

Paradee Poolvaraluk Age 50

Independent Director & Chairman of Audit Committee

Vicha Poolvaraluk Age 50

Verawat Ongvasith Age 43

PEOPLE

M Passion

Naruenart Ratanakanok Age 58

Independent Director and Audit Committee

Education • Bachelor of Business Administration (Economics), University of Detroit, USA Experience • 2002 - Present : Independent Director and Audit Committee, Major Cineplex Group Plc. • 2010 - 2011: Director and Executive Director, Krung Thai Bank PLC Other positions • Consultant, Watcharapol Co., Ltd. • Director, CTH Public Company Limited Director Training Program • ACP - Audit Committee Program, Thai Institute of Director (IOD)

Wallop Tangtrongchitr

Age 62

Independent Director and Audit Committee

Education • Master Degree of Business Administration, Chapman University, USA • Bachelor Degree of Business Administration, San Diego University, USA Experience • 2002 - Present : Independent Director & Audit Committee, Major Cineplex Group Plc. • 1995 - 1997 : Co-Ordinator, Regency Co.,Ltd. • 1983 - 1995 : Manager, Wellcom Co., Ltd. • 1977 - 1983 : Project Co-Ordinator, Viwat Construction Co.,Ltd. Other Positions • Managing Director, Potara Co., Ltd. Director Training Program Thai Institute of Director (IOD) • FSD - Financial Statement for Director • DAP - Directors Accreditation Program • DCP - Director Certifi ffi ication Program • FND - Finance for Non - Finance Directors

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

Director

Age 51

Shareholding 0.44%

Dr.Satian Pooprasert

Thanakorn Puriwekin Age 57 Director and Chief Films Offififfiicer Shareholding 0.06%

Education • Master Degree of Business Administration, United States International University of San Diego ,USA • Bachelor Degree of Business Administration, Bangkok University Experience • 1995 - Present : Director and Chief Films Offiffiicer, Major Cineplex Group Plc. Director Training Program • DAP - Directors Accreditation Program, Thai Institute of Director (IOD)

Kitikorn Poomsawang Age 59 Chief Construction Offfiificer

Education • Thonburi Commercial Collage Experience • 2013 - present : Chief Construction Offiffi ifi cer, Major Cineplex Group Plc. • 1990 - 1995 : Administration Dept. Manager, Welco Department Store • 1978 - 1990 : Branch Asst. Manager, First Bangkok City Bank

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

Chief Retails Offiffiicer Shareholding 0.01%

Education • Bachelor Degree of Arts, Chandrakasem Rajabhat University Experience • 2008 - Present: Chief Retails Offififfiicer, Major Cineplex Group Plc. • 2006 - 2008: Deputy Head of Retails, Major Cineplex Group Plc. • 1995 - 2006: Retails Manager, Major Cineplex Group Plc. • 1993 - 1995: Marketing Manager, The Mall Group Co.,Ltd. • 1990 - 1992: Marketing Manager, AG Wilkinson Property • 1982 - 1989: Marketing Manager, Dynasty Agency

Niti Pattanapakdee Age 47 Chief Media Offiffiicer

Education • Bachelor Degree of Business Administration, Department of Advertising and Public Relations, Ramkhamhaeng University Experience • 2013 - Present : Chief Media Offfiificer, Major Cineplex Group Plc. • 2003 - 2013 : General Manager, Major CineAd Co., Ltd. • 1999 - 2003 : Vice President, Nation Multimedia Group • 1996 - 1999 : Managing Director, Creative Syndicate Co.,Ltd. • 1990 - 1996 : Senior Sales Manager, Nation Multimedia Group Other positions • Board of Directors, ThaiTicketMajor Co., Ltd.

Age 61

Education • Bachelor’s degree in Medicine, Mahidol University, Thailand • Diploma American Board of Internal Medicine • Diploma American Board of Rheumatology • 2012 - 2013 : Thailand Energy Academy - TEA • 2012 : Top Executive Program in Commerce and Trade • 2009 : Cambridge-Thammasat Executive Education Program, United Kingdom • 2007 : Capital Market Academy Leader Program, Thailand • 2001 - 2002 : Diploma National Defence College, The Joint State-private Sector Course, Thailand Experience • 2012 - Present : Independent Director, Major Cineplex Group Plc. • 2003 - Present : Managing Director & CEO, Praram 9 Hospital • 1995 - Present : Member Board of Directors, Rely (Thailand) Co., Ltd. • 1992 - Present : Member Board of Directors, Praram 9 Hospital • 2011 - 2013 : Member Board of The Foundation of International Education (FIE), NIST International School • 2005 - 2006 : Member Board of Directors, Thailand Center of Excellence for Life Sciences • 2004 - 2006 : Board Member of Metropolitan Electricity Authority • 2002 - 2006 : Member Board of Directors, The Government Pharmaceutical Organization • 2002 - 2006 : Executive Board of Member of Sports Authority of Thailand Director Training Program • DAP - Directors Accreditation Program, Thai Institute of Director (IOD)

Jinda Wantanahatai Age 50

Relationship with Management • Cousin of Chairman Education • Bachelor Degree of Economics, Thammasart University • Modern Manager Program (MMP), Faculty of Commercial and Accountancy, Chulalongkorn University • The Boss, Management and Psychology Institute • CEO Development Institute • Capital Market Acedemy Experience • 2005 - Present : Executive Director, Major Cineplex Group Plc. • 2007 - Present : Chairman of the Board, International Research Corporation Public Limited (IRCP) • 2006 - Present : President, Woraluck Property Co.,Ltd. • 1993 - 2004 : Director & President, EGV Entertainment Plc. (EGV) Other Positions • Sub-committee for Construction of SET, The Stock Exchange of Thailand (SET) • Committee Member, Thammasat Economics Association • President 2005-2009, Thai Investors Association (TIA) Director Training Program • DCP - Director Certiffiification Program, Thai Institute of Director (IOD)

Independent Director

PEOPLE

Wichai Poolvaraluk

Apichart Kongchai Age 47 Chief Cinema Offiffiicer

Education • MBA, Concentration Hotel & Restaurant Management, New Haven University CT, USA • Bachelor of Science Sociology and anthropology, Chieangmai University Experience • 2013 - Present: Chief Cinema Offiffiicer, Major Cineplex Group PLC. • 2009 - 2013: Head of Cinema, Major Cineplex Group PLC. • 2008 - 2009: Deputy Head of Cinema, Major Cineplex Group PLC. • 2002 - 2008: Cinema Manager, Major Cineplex Group PLC. • 1994 - 2002: Genaral Marketing Manager, OGC Group Ltd. • 1992 - 1994: Resident Manager, Centre Point Q-House PLC.

Thitapat Issarapornpat Age 45 Chief Finance offfiificer

Education • Master of Business Administration, Chulalongkorn University • Bachelor of Business Administration, Major in Accounting, Ramkhamhaeng University Experience • 2013 - Present : Chief Finance offfiificer, Major Cineplex Group Plc. • 2009 - 2013 : Head of Accounting & Finance, Company Secretary, Major Cineplex Group Plc.ß • 1991 - 2009 : Accounting Manager, Wiik & Hoeglund Public Co., Ltd. Other positions • Director, EGV Entertainment Plc. • Director, Thai Ticketmajor Co., Ltd. • Director, M Picture Entertainment Plc. • Director, Talent One Co., Ltd • Director, K Arena Co., Ltd.

Sudaporn Trongpanich Age 39 Chief Technology Offiffiicer

Education • Master of Science(Economics), Kasetsart University • Bachelor Degree of Business Administration(Business Computer), Siam University Experience • 2013 - Present : Chief Technology Offiffiicer (CTO), Major Cineplex Group Public Co.,LTD • 2011 - 2013 : Head of IT, Major Cineplex Group Plc. • 2008 - 2011 : IT Department Manager, Major Cineplex Group Plc. • 1999 - 2008 : IT Application Development-Manager(VP), TISCO Information Technology Co.Ltd

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

ORGANIZATION

Board of Directors Chairman

Nomination & Remuneration Committee

Audit Committee Internal Audit

CEO Chief Films Offﬁ i cer

Chief Cinema Offﬁ i cer

Chief Bowling Offﬁ i cer

(Deputy acting by CEO)

Chief Media Offﬁ i cer

Chief

Construction

Offﬁ i cer

Head of

Construction

Head of Cinema Operations

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

Head of Bowling Business

Head of Media Business

ORGANIZATION

Organization Chart

Shareholders

Chief

Human Resources Offﬁ i cer

Chief Retails Offﬁ i cer

Technology

Head of Human Resources

Head of Retails Business

Head of Information Technology

(Deputy acting by CEO)

Head of Shopping Center

Head of Purchasing & Expense Management

Chief

Offﬁ i cer

Chief

Chief Finance

Offﬁ i cer and Company Secretary

Head of Finance & Accounting

Corporate Strategy & IR (Deputy acting by CEO)

Legal & Compliance

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

ORGANIZATION

Bangkok Imax Theater Co., Ltd. 99.93% Udorn Five Star Cineplex Co., Ltd. 99.99%

Major Cineplex Lifestyle Leasehold Property Fund 33%

BOWLING Major Bowl Group Co., Ltd. 99.99%

ADVERTISING Major Cinead Co., Ltd. 99.93%

Siam Cineplex Co., Ltd. 99.99%

Entertain Golden Village Exhibition Co.,Ltd. 99.96%

EGV Entertainment PLC. 99.98%

EGV Exhibition Co.,Ltd. 99.96%

Digital Projector Management Co., Ltd. 99.99%

EGV Five Star Co.,Ltd. 99.96%

Major Holding International Co., Ltd. 99.96%

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

ORGANIZATION

Chiangmai Cineplex Co., Ltd. 99.99%

PVR blu-O Entertainment Limited 49%

PVR Ltd. 6.41%

K Arena Co.,Ltd. 50%

RENTAL & SERVICES Major Cineplex Property Co., Ltd. 99.99%

Major Cineplex Services Co., Ltd. 99.99% Ratchayothin Management Co., Ltd. 99.99%

Ratchayothin Realty Co., Ltd. 99.99% Ratchayothin Cinema Co., Ltd. 99.99%

Thaiticketmajor Co., Ltd. 40% Siam Future Development PLC. 23.72% Ratchayothin Avenue Co.,Ltd. 50%(Direct), 11.86% (Indirect Via SF)

ASSOCIATES

Group Structure CINEMA

Major Cineplex Group Public Company Limited

MOVIE CONTENT M Picture Entertainment PLC. 91.37% TV Forum Co.,Ltd. 91.37% M Pictures Co.,Ltd. 91.37% M V D Co.,Ltd. 91.37% M Thirty Nine Co.,Ltd. 91.37% Talent One Co.,Ltd. 82.23%

PacicďŹ Media Sale Co., Ltd. 90.82%

Major Kantana Broadcasting Co.,Ltd. 41.11% ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

ORGANIZATION

of the Company Subsidiaries, Associates & Joint Ventures

Registration no. 0105539139100 Head Offﬁice 1839 Phaholyothin Rd., Ladyao, Jatujak, Bangkok 10900 Nature of business Cinema & Entertainment Complex operator, concession vendor Registered capital 100,000,000 Baht Paid up capital 100,000,000 Baht % of investment 99.96%

Theatre Business Major Cineplex Group Plc.

Theatre Business EGV Five Star co., Ltd.

Registration no. 0107545000047 Head Offﬁice 1839, 1839/1-6 Phaholyothin Rd., Ladyao, Jatujak, Bangkok 10900 Nature of business Cinema & Entertainment Complex operator, concession vendor Registered capital 887,576,343 Baht Paid up capital 896,226,347 Baht % of investment 100.00%

Registration no. 0305543000551 Head Offﬁice 1839 Phaholyothin Rd., Ladyao, Jatujak, Bangkok 10900 Nature of business Cinema & Entertainment Complex operator, concession vendor Registered capital 20,000,000 Baht Paid up capital 20,000,000 Baht % of investment 99.96%

Theatre Business Chiangmai Cineplex co., Ltd.

Theatre Business Digital Projector Management Co., Ltd.

Registration no. 0105543106571 Head Offﬁice 1839 Phaholyothin Rd., Ladyao, Jatujak, Bangkok 10900 Nature of business Cinema & Entertainment Complex operator, concession vendor Registered capital 1,400,000 Baht Paid up capital 1,400,000 Baht % of investment 99.99%

Theatre Business Udon Five Star Cineplex co., Ltd. Registration no. 0105546119569 Head Offﬁice 1839 Phaholyothin Rd., Ladyao, Jatujak, Bangkok 10900 Nature of business Cinema & Entertainment Complex operator, concession vendor Registered capital 2,730,000 Baht Paid up capital 2,730,000 Baht % of investment 99.99%

Theatre Business Bangkok Imax Theater Co., Ltd. Registration no. 0105544003725 Head Offﬁice 1839 Phaholyothin Rd., Ladyao, Jatujak, Bangkok 10900 Nature of business Cinema & Entertainment Complex operator, concession vendor Registered capital 1,000,000 Baht Paid up capital 1,000,000 Baht % of investment 99.93%

Theatre Business Siam Cineplex Co., Ltd. Registration no. 0105547057656 Head Offﬁice 1839 Phaholyothin Rd., Ladyao, Jatujak, Bangkok 10900 Nature of business Cinema & Entertainment Complex operator, concession vendor Registered capital 150,000,000 Baht Paid up capital 150,000,000 Baht % of investment 99.99%

Theatre Business EGV Entertainment Plc. Registration no. 0107545000225 Head Offﬁice 1839 Phaholyothin Rd., Ladyao, Jatujak, Bangkok 10900 Nature of business Cinema & Entertainment Complex operator, concession vendor Registered capital 260,001,575 Baht Paid up capital 260,001,575 Baht % of investment 99.98%

Theatre Business Entertain Golden Village Exhibition Co.,Ltd. Registration no. 0105538116343 Head Offﬁice 1839, Phaholyothin Rd., Ladyao, Jatujak, Bangkok 10900 Nature of business Cinema & Entertainment Complex operator, concession vendor Registered capital 500,000 Baht Paid up capital 500,000 Baht % of investment 99.96%

Theatre Business EGV Exhibition co., Ltd.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

Registration no. 0105554048284 Head Offﬁice 1839 Phaholyothin Rd., Ladyao, Jatujak, Bangkok 10900 Nature of business Projector rental and system management Registered capital 5,000,000 Baht Paid up capital 5,000,000 Baht % of investment 99.99%

Theatre Business Major Holding International Co., Ltd. Registration no. 0105556003661 Head Offﬁice 1839 Phaholyothin Rd., Ladyao, Jatujak, Bangkok 10900 Nature of business Holding Business Registered capital 1,000,000 Baht Paid up capital 1,000,000 Baht % of investment 99.96%

Bowling Business Major Bowl Group Co., Ltd.

Registration no. 0105541034263 Head Offﬁice 1839, Phaholyothin Rd., Ladyao, Jatujak, Bangkok 10900 Nature of business Bowling, Karaoke and entertainment services Registered capital 36,000,000 Baht Paid up capital 36,000,000 Baht % of investment 99.99%

Rental and Service Business Major Cineplex Property Co., Ltd. Registration no. 0105537078910 Head Offﬁice 1221/39 ,1239 Sukhumvit Rd., North Klongton, Wattana, Bangkok 10110 Nature of business Building space for rent Registered capital 78,000,000 Baht Paid up capital 78,000,000 Baht % of investment 99.99%

Rental and Service Business Major Cineplex Services Co., Ltd. Registration no. 0105540016130 Head Offﬁice 1221/39 ,1239 Sukhumvit Rd., North Klongton, Wattana, Bangkok 10110 Nature of business Utilities services Registered capital 23,000,000 Baht Paid up capital 23,000,000 Baht % of investment 99.99%

Rental and Services Business Ratchayothin Management Co.,Ltd. Registration no. 0105540016121 Head Offﬁice 1839, Phaholyothin Rd., Ladyao, Jatujak, Bangkok 10900 Nature of business Utilities services Registered capital 5,000,000 Baht Paid up capital 5,000,000 Baht % of investment 99.99%

Registration no. 0105539097628 Head Offﬁice 1839 Phaholyothin Rd., Ladyao, Jatujak, Bangkok 10900 Nature of business Building space for rent Registered capital 100,000,000 Baht Paid up capital 100,000,000 Baht % of investment 99.99%

Rental and services business Ratchayothin Cinema Co., Ltd. Registration no. 0105541034255 Head Offﬁice 1839 Phaholyothin Rd., Ladyao, Jatujak, Bangkok 10900 Nature of business Building space for rent Registered capital 10,000,000 Baht Paid up capital 10,000,000 Baht % of investment 99.99%

Advertising Business Major Cinead Co.,Ltd. Registration no. 0105544103711 Head Offﬁice 1839, Phaholyothin Rd., Ladyao, Jatujak, Bangkok 10900 Nature of business Advertising and advisory services Registered capital 1,000,000 Baht Paid up capital 1,000,000 Baht % of investment 99.93%

Movie content M Pictures Entertainment Plc.

Registration no. 107544000124 Head Offfiice 234 Suzuki Avenue Building (Ratchayothin), 13th Floor Ratchadapisek Rd., Ladyao Jatujak, Bangkok 10900 Nature of business Pulishing, advertising and distribution of fiffiilm rights Registered capital 675,902,500 Baht Paid up capital 657,829,978 Baht % of investment 91.37%

Movie content TV Forum Co., Ltd.

Registration no. 0105538027090 Head Offﬁice 234 Suzuki Avenue Building (Ratchayothin), 13th Floor Ratchadapisek Rd., Ladyao Jatujak, Bangkok 10900 Nature of business Television Media Business Registered capital 100,000,000 Baht Paid up capital 100,000,000 Baht % of investment 91.37%

Movie content M Pictures Co., Ltd.

Registration no. 0105548154744 Head Offfiice 234 Suzuki Avenue Building (Ratchayothin), 13th Floor Ratchadapisek Rd., Ladyao Jatujak, Bangkok 10900 Nature of business Distribution of fiffiilm rights for cinema, VCD/DVD production and TV broadcast Registered capital 150,000,000 Baht Paid up capital 150,000,000 Baht % of investment 91.37%

Movie content M V D Co., Ltd.

Registration no. 0105545084664 Head Offﬁice 234 Suzuki Avenue Building (Ratchayothin), 13th Floor Ratchadapisek Rd., Ladyao Jatujak, Bangkok 10900 Nature of business Distribution of VCD/DVD, Blu-ray and fﬁilm rights Registered capital 200,000,000 Baht Paid up capital 200,000,000 Baht % of investment 91.37%

Movie content M Thirty Nine Co., Ltd.

Registration no. 0105552004395 Head Offﬁice 234 Suzuki Avenue Building (Ratchayothin), 13th Floor Ratchadapisek Rd., Ladyao Jatujak, Bangkok 10900 Nature of business Film production Registered capital 100,000,000 Baht Paid up capital 100,000,000 Baht % of investment 91.37%

Movie content Talent One Co., Ltd.

Registration no. 010554068617 Head Offﬁice 59/1 Soi Sukhumvit 39, Wattana, Bangkok 10110 Nature of business Film production, services for all forms of entertainment and sales of pocket books. Registered capital 40,000,000 Baht Paid up capital 40,000,000 Baht % of investment 82.23%

ORGANIZATION

General Information

Rental and Service Business Ratchayothin Realty Co., Ltd.

Movie content Pacifﬁic Media Sale Co.,Ltd.

Registration no. 0105547163570 Head Offﬁice 234 Suzuki Avenue Building (Ratchayothin), 13th Floor Ratchadapisek Rd., Ladyao Jatujak, Bangkok 10900 Nature of business CD and DVD Distribution Registered capital 100,000 Baht Paid up capital 100,000 Baht % of investment 90.82%

Movie content Major Kantana Broadcasting Co., Ltd.

Registration no. 105553012928 Head Offfiice 991 Siam Paragon, 5th - 6th Floor Rama 1 Rd., Phathumwan, Bangkok 10330 Nature of business Satellite broadcasting and distribution of fiffiilm rights Registered capital 40,000,000 Baht Paid up capital 40,000,000 Baht % of investment 41.11%

Strategic Invesment Siam Future Development Plc. Registration no. 107545000187 Head Offﬁice 99 Rachadapisek Rd., Dindang, Bangkok 10400 Nature of business Rental of building space and utilities services Registered capital 1,316,105,475 Baht Paid up capital 1,316,020,126 Baht % of investment 23.72%

Strategic Investment “Major Cineplex Lifestyle Leasehold Property Fund”

Registration no. 179/2550 Head Offﬁice Kasikorn Asset Management Co., Ltd 400/22 KASIKORNBANK Building, 6th Floor, Phaholyothin Rd.Samsen Nai, Phaya Thai, Bangkok 10400 Nature of business Rental of building and utilities service Registered capital 3,300,000 Baht Paid up capital 3,300,000 Baht % of investment 33.00%

Strategic Investment Thaiticketmajor Co., Ltd.

Registration no. 105543020073 Head Offﬁice 3199 Maleenon Tower, 27th Floor, Rama 4 Rd., Klongton, Khlongtoei, Bangkok 10110 Nature of business Agent for selling of tickets Registered capital 10,000,000 Baht Paid up capital 10,000,000 Baht % of investment 40.00%

Strategic Investment Ratchayothin Avenue co., Ltd. Registration no. 105550006391 Head Offﬁice 99 Rachadapisek Rd., Dindang, Bangkok 10400 Nature of business Rental of building space and utilities services Registered capital 135,000,000 Baht Paid up capital 135,000,000 Baht % of investment 50.00% (Indirect 11.86%)

Strategic Investment K Arena Co., Ltd.

Registration no. 0105555064356 Head Offﬁice 50, Sukhumvit 21 Rd. (Asoke), North Khlongton, Wattana, Bangkok 10110 Nature of business Karaoke services Registered capital 20,000,000 Baht Paid up capital 20,000,000 Baht % of investment 50.00%

Strategic Investment PVR bluO Entertainment Limited Registration no. U74120DL2008PLC176081 Head Offﬁice 61 Basnt Lok, Vasant Vihar, New Delhi 110 057 India Nature of business Bowling alley operator Registered capital INR 400,000,000 (INR 400,000,000 x 0.4947 = 197,880,000 Baht) Paid up capital INR 343,571,420 (INR 343,571,420 x 0.4947 = 169,964,781 Baht) % of investment 49.00%

Strategic Investment PVR Limited Registration no. 55-67827 Head Offﬁice 61 Basnt Lok, Vasant Vihar, New Delhi 110 057 India Nature of business Multiplex cinema operator Registered capital INR 937,000,000 Paid up capital INR 399,129,370 x 0.4947 = 197,449,299 Baht % of investment 6.41%

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

BUSINESSES

Major Cineplex Group PLC (MAJOR) is Thailand’s leading Lifestyle Entertainment Company with core business in cinema, bowling, karaoke and ice skating rink, rental and services, advertising media and movie content. To broaden its network of lifestyle entertainment portfolio as well as establishing partnerships for sustainable future growth, MAJOR also invests: • 23.72% in Siam Future Development Plc (SF) – a lifestyle-neighborhood-mall developer, • 40% in Thaiticketmajor Co., Ltd. (TTM) – a ticket sales channel for concerts, sport events, transportation, etc., • 33% in Major Cineplex Lifestyle Leasehold Property Fund (MJLF) – a real-estate investment trust (REIT) as rental of building and utilities service, • 91.37% in M Pictures Entertainment Plc. (MPIC) - a media & theatrical film distribution company, • 6.41% in PVR Limited (PVRL) - a leading, premium multiplex cinema exhibition company in India, • 49% in PVR blu-O Entertainment Ltd.- Joint Venture with PVR Ltd., a leading, premium multiplex cinema exhibition company in India, to set-up bowling alleys, karaoke centers across India, • 50% in K arena Co., Ltd. – a karaoke service. MAJOR was listed on the Stock Exchange of Thailand (SET) in May 2002.

“Cinema Business” The “Cineplex” concept was first introduced to the Thais in 1995 when Mr. Vicha Poolvaraluk, the founder of MAJOR, built standalone “Cineplex” concept with typically built on a long-term leasehold land (20-30 year). A Standalone Cineplex is about 7-10 story building combines customer experiences of Cinema & Entertainment complex That means, moviegoers are offered; not only a wide range of films selection in the multiplex cinema format, but also a vast variety of restaurants, gift shops, bookstores and many other lifestyle shops in one stop with a strong “movie culture” which ensures continuous flow of moviegoers traffic every week, the retails space in the Standalone Cineplexes has been able to sustain a high occupancy rate in access of 90% and above at all time. By year 2013, Major has got 5 branches Standalone Cineplex located surrounding Bangkok, Pinklao (The first standalone in Thailand), Sukhumvit, Ratchayothin, Major Rangsit and Esplanade Ngamwongwan – Kaerai

“Lifestyle Entertainment Company”

Besides the Standalone Cineplexes, MAJOR also deploys three other expansion models to populate Cineplexes around the country: • • •

Shopping mall model Lifestyle neighborhood mall model Hypermarket model

The shopping mall model was used more in the past when the shopping malls were sprouting up rapidly & practically everywhere. It was a handy growth vehicle as Cineplexes could ride on their historically high growth phase without too much capital outlay as for the Standalone Cineplex model.

As an alternative vehicle for growth, the lifestyle neighborhood mall model was created in 2004 when MAJOR took a stake in a lifestyle-neighbor-mall developer, Siam Future Development Plc. (Siam Future). A lifestyle neighborhood mall is typically built on a smaller plot of land (3 - 5 acres) next to the residential areas. Because of its compact size, it takes only 6-12 months for a lifestyle neighborhood mall construction to complete, thus serving as an excellent vehicle to populate Cineplexes in the metropolitan areas as well as more urbanized areas around the country.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

The hypermarket model is used to populate the Cineplexes in the provincial areas. MAJOR builds cinemas & bowling in the hypermarket structures as an anchor tenant. For the provincial dwellers, hypermarket or discount store supercenter serves as a perfect destination, not only for shopping but also for family entertainment, in a very similar fashion as shopping malls are to the urban people. MAJOR joins with two hypermarket operators, Tesco Lotus & Big-C. Currently MAJOR commands nearly 80% market share of the Thai cinema industry’s admissions revenue, in year 2004 MAJOR was due to the acquisition of EGV Entertainment Plc., the #2 player at that point with about 23% share. Subsequent to that M&A activity, there was no foreign cinema operator left in the Thai cinema industry. At year-end 2013, MAJOR operated 7 different brands:

• • • •

Major Cineplex EGV Cinemas Paragon Cineplex Esplanade Cineplex

• • •

Paradise Cineplex Mega Cineplex Hatyai Cineplex

with a total of 68 branches, 479 screens and about 114,750 seats. MAJOR continues to add about 30-40 new screens in year 2014 and another 20 – 30 new screen in expansion plan in the next year. Thailand is still in the “underscreened” situation. MAJOR deploys the 4 expansion models discussed above as the growth vehicle depending upon the demography of each location. Major concentrate every segment of customers and provide all kind of innovation to serve customers as of RealD, 2D, 3D, 4DX, IMAX to complete customer’s entertainment and experiences. MAJOR offers cinema services covering the full spectrum of the customer segments. The mass-segment cinema, “Major Cineplex” brand, is used for the geographical expansion & tapping the new markets. Various international designs are adopted for the customer experiences, unlike what the global cinema operator’s offer. For example, Las Vegas style interior design is adopted for the local mass-segment customers to experience. On the high-end, plenty of service & product innovations are created and installed for the “Future of Entertainment Civilization” customer experiences in the “six-star” ambience at the “Paragon Cineplex.” For example, the “Bangkok Airways Blue Ribbon” at the Paragon Cineplex is equipped with nothing but fully-reclined, genuine leather seats in cubicles along with pillows & blankets for the entire auditorium seatings. Another product innovation at the Paragon Cineplex is the “ENIGMA: the Shadow Screen”, a luxurious movie club exclusively for members only. Thirtyfour exclusive seats, resembling living room couches adjacent to an exclusive club equipped with full bar services, are perfect for private parties. The venue has become very popular, not only among the high net-worth individuals, but also the corporate customers who prefer using the ENIGMA for entertaining their VIP customers in an exclusive atmosphere. In year 2011, the state-of-the-art 4DX Theater is available only at Paragon Cineplex. With specially designed seats, 24 types of incredible effects and the 3D digital screening system, this celluloid innovation exposes movie-goers to all sensational experience of motion pictures, light, sound, tactility, and scents. All effects—3 degree-of-freedom movements, air blows, scents, vibration and leg tickler—will excite the audiences with new flavors of movie-watching. Via special 4D glasses, audiences will enjoy lively motion pictures shown on silver screen of Masterimage 3D system, by year 2013, MAJOR operated 4 locations of 4DX theater: Paragon, Ratchayothin, Central festival Chiangmai, Central festival Hatyai. ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

BUSINESSES

Nature of Business

With the strong movie culture and having Cineplexes as anchor tenant, Siam Future has grown exponentially with retails space increased by over 10 folds to over 240,000sqm. in the past 4 years. The synergy is extremely well pronounced. MAJOR could rapidly penetrate into the residential areas providing an enhanced convenience access to the moviegoers. Siam Future, on the other hand, could fill up its retail space easily having cinema & bowling anchoring in its lifestyle neighborhood malls.

BUSINESSES

Bowling & Karaoke was added to the portfolio of lifestyle entertainment services in 1997. The first 20 lanes were put up in Major Sukhumvit Standalone Cineplex. Rather than being a typical sports bowling venue, “Major Bowl Hit” was launched with an “entertainment bowling” concept and positioning, where friends & families could come in & enjoy the game. Major Bowl Hit is decorated with a modern & trendy design with the latest releases of music being played, perfectly enticing to the younger & family segments of consumers.

BUSINESSES

“Bowling, Karaoke, Ice Skating Business”

At year-end 2013, MAJOR operated 24 bowling locations with 397 lanes, 256 karaoke rooms, 5 ice skating rinks.

“Major Karaoke” is a perfect complement of the entertainment bowling as it provides, not only a better utilization of the space, but also another alternative form of lifestyle entertainment. Similar to bowling, karaoke rooms are modernly designed and decorated, perfect for the segment of consumers that bowling attract. While “Major Bowl Hit” offers the entertainment bowling to the mass segment around the country, “Blu-O Rhythm & Bowl” was introduced in 2006 as a “club fashion bowling,” targeting at the higher-end of the consumer segments in the metro areas. The first Blu-O Rhythm & Bowl was put up in the Siam Paragon (a mega shopping mall in the heart of Bangkok) offering 38 bowling lanes, 15 karaoke rooms, and 2 Platinum rooms equipped with 4 exclusive bowling lanes each & karaoke facilities. In 2009, MAJOR operated totally 8 branches under brand “Blu-O Rhythm & Bowl,” comprising of Paragon, Esplanade Ratchada, Pattaya, Ratchayothin, Sukhumvit, Esplanade Ngamwongwan-Kaerai, Mega Cineplex and Central festival Hatyai.

In 2008, the concept of entertainment bowling expanded internationally into India. A joint venture company, PVR bluO Entertainment Co.,Ltd. (PVR BluO) was set up to operate entertainment bowling business in India in partnership with PVR Limited, a leading cinema operator incorporated and listed in Stock Exchange of India. The first “Club Fashion Bowling” operated by PVR bluO has been commercially opened since March 2008 in Ambiance mall – Gurgaon, New Delhi. By year 2013, PVR BluO operated bowling in 6 locations in India at Gurgaon (24 Lanes), Vasant Kunj (26 Lanes), Orion Mall, Bangalore (27 Lanes), Market City, Pune (17 Lanes), Market City, Bangalore (16 Lanes), Elante mall, Chandigarh (25 Lanes) as total are 135 Lanes.

The “sub-zero: the Ice Skate Club” is the latest lifestyle entertainment that had been added to the portfolio. It has quickly become one of the most popular meeting joints for the hip & cool customer segments in town. Locating in the newest Arte-tainment venue, sub-zero offers a compact ice skating rink of about 800 – 1,000 sq.m. By year 2013, MAJOR operated 5 locations of ice skating at following Esplanade Ngamwongwan Kaerai (Since December 2009), Sukhumvit (March 2011), Mega Cineplex (May 2011), Central festival Chiangmai (November 2013), Central festival Hatyai (December 2013). 20

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

BUSINESSES

Advertising services business leverages off the traffic that cinema & other lifestyle entertainment attract. MAJOR is able to draw between 25-30 million customers into the Cineplexes around the country annually. A subsidiary called CineAd Co.,Ltd. has been established to entice the advertisers and media agencies with full-range of advertising services, ranging from simple cinema screen advertising to fully-integrated below-the-line media solutions incorporating all media available in the Cineplex network around the country. With additional revenues generated on the existing assets, advertising service revenues and cinemedia enjoy a hefty margin in access of 85%.

BUSINESSES

“Advertising Services Business”

“Rental and Services Business” In the Standalone Cineplex, MAJOR operates retail space to complement the lifestyle entertainment model by offering the customers with more variety of entertainment service beyond movie, bowling, karaoke, and ice skating. MAJOR selects trendy brands that offer distinctive products and services that match customers’ lifestyle. Retail spaces are packaged in 2 types – long-term lease contracts which are more than 3 years and short-term rental contracts which are less than 3 years.

Today, Cinemedia integrate below-the-line media solutions for many dominant players in many industries. The solutions include not only the screen advertising but also new media like VDO walls, tri-vision, plasma screens, Menu Board, outdoor media (Billboard/Cut-out) and 4D adds, the new innovation only used for theatre. As one of the most effective, direct-to-target media alternatives, the cinemedia is among the highest growth in the entire media industry. In 2013, the cinemedia contributed about 6% of the advertising expenditures for the entire media industry.

As the Cineplex becomes “destination” for lifestyle entertainment, MAJOR is able to attract many leading international chains as well as the newly emerging local brands. With the intense competition among the quick-serve restaurant chains, every brand is in need of new space to populate their new branches and expand their network every year. This has resulted in high occupancy rate at every location. Services accompanied space rental are the electricity, air-conditioned services, fire protection system, cleaning and security system as well as common area management services such as elevator, escalator and parking.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

BUSINESSES

MAJOR has a strategic investment in the film distribution business through its 91.37% stake in M Pictures Entertainment Plc. (MPIC). Originally MAJOR’s investments in film distribution business was direct. On the theatrical side, MAJOR held a stake in M Pictures Co., Ltd. (MP) which provided the upstream theatrical distribution services. On the downstream home entertainment distribution side, MAJOR held a stake in Pacific Marketing and Entertainment Group Co., Ltd. whose name has subsequently been changed to MVD Co., Ltd. (MVD). Completed in July 2009, both MP & MVD have now been included into MPIC to create an integrated distribution company under one roof. For the upstream theatrical distribution, MP is to manage the 52-week film programming and smoothen out the revenue seasonality imposed by the Hollywood’s numerous summer releases in 2Q and holiday seasons releases in 4Q. Distributing films from independent studios as well as other Asian films from Japan & Korea, MP could lessen the impacts of quarterly revenue shortfalls by releasing these films in 1Q & 3Q. With MAJOR’s dominant market position in the exhibition window, MP is riding on a solid platform to maximize its revenue as well. For the downstream home entertainment distribution, MVD is to manage the timing of the DVD/VCD releases as well as the DVD/VCD pricing in bid to optimize revenue generating ability in each window and protect the core cinema business. With the appropriate timing of the DVD/VCD releases (typically 3-4 months subsequent to theatrical releases) and with proper pricing, a film can maximize its revenues in the cinema window as well as in the home entertainment distribution window itself. In 2009, MPIC Group also set up a film production company, namely M Thirty-nine Co. Ltd. (M39), to stimulate and advocate growth in Thai films production. Leveraging of MPIC’s own integrated distribution capability, combining with MAJOR’s dominant market share in cinema, the Group ultimately aims to grow Thailand’s film industry as a whole. In 2013 MPIC group had made additional investment in Talent One Co., Ltd., film production, service for all forms of entertainment, represented 90% of shareholder. Additionally, MPIC group acquired ordinary shares in Major Kantana Broadcasting Co.Ltd. (Mchannel), satellite broadcasting and distribution of film rights, from Major Cineplex Group PLC. (MAJOR) by way of exchange of the company’s newly issued ordinary shares, represented 44.99% of the paid-up share capital.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

BUSINESSES

“Movie Content Business”

“Strategic Investments”

Siam Future Development Plc (Siam Future)

MAJOR currently invests 23.72% in Siam Future, a lifestyle-neighborhood-mall developer. The lifestyle malls that Siam Future develops are low-rise, open-air building next to the residential areas. The rationale for the investment in 2004 was to help each other grow. With the “movie culture,” MAJOR is an anchor tenant that generate traffic to the lifestyle malls. With its rapid pace of expansion, Siam Future provides MAJOR with an excellent vehicle for growth, especially in the metropolitan areas where MAJOR wants to improve cinema-access convenience to its customers. Siam Future is listed on the Stock Exchange of Thailand with the symbol SF.

Major Cineplex Lifestyle Leasehold Property Fund (MJLF)

A major milestone that took place also in June 2007 was the completion of the REIT. Two of the Standalone Cineplexes (Major Ratchayotin & Major Rangsit) were initially injected into the MJLF, raising Bt2.3 billion in cash. With the proceed, MAJOR reinvests 33.0% back into the fund, while the remaining amount was reinvested into a brand-new Standalone Cineplex in Ngamwongwan-Kaerai area and a new lifestyle mall, Major Avenue @ Ratchayotin, a 50:50 joint venture between MAJOR & Siam Future. This development marks an important step for the Group as MJLF becomes a vital vehicle for sustainable future growth. MAJOR can now expand with the original Standalone Cineplex model without fresh capital calls. The Standalone Cineplexes with much larger number of cinema screens & bowling lanes are expected to drive higher rate of growth for the income statements than the balance sheets, enabling MAJOR to adopt the “asset-light” strategy with hope to generate higher rate of returns going forward. MJLF is listed on the Stock Exchange of Thailand with the symbol MJLF.

K-Arena Co.,Ltd

In May 2012, MAJOR holds 50% shareholding K-Arena Co.,Ltd. which is karaoke business. Thaiticketmajor Co.,Ltd. (TTM)

In June 2007, MAJOR took 40.0% stake in Thai Ticket Master Dot Com Co.,Ltd., whose name was subsequently changed to Thai Ticket Major Co.,Ltd. (TTM). The rationale was to expand MAJOR’s business into ticketing sales channel as well as enhancing value from the existing assets. Cinema ticket box offices are turned into also ticketing services counters for concerts, sports events, transportation. Not only better utilization of the resources at the box offices, TTM also generates additional traffic into the Cineplexes which could also be enticed to consume other entertainment services. PVR Limited. (PVRL)

Incorporated and listed in the Stock Exchange of India, PVR is a leading and premium Multiplex Cinema Exhibition company in India. PVR pioneered the multiplex revolution in India by establishing the fi rst multiplex cinema in 1997 and the largest 11-screens multiplex cinema in the country in year 2004. Currently, our geographically diverse cinema circuit in India consists of 85 cinemas with 360 screens. By year 2013, MAJOR’s shareholding in PVR is 6.41% PVR is listed on the Stock Exchange of India with the symbol PVRL. PVR blu-O Entertainment Ltd.

A joint venture company, namely PVR blu–O Entertainment Ltd. (PVR blu-O), was set up in 2008 by PVR Limited & MAJOR. While adding a new lifestyle entertainment to PVR’s business model, PVR blu-O is to introduce a new experience of entertainment bowling to the Indian patrons and provide MAJOR with an opportunity to unlock potential growth to Indian market. By year 2013, MAJOR holds 49% of PVR BluO. Both of these investments (in PVR and PVR blu-O) can be considered as a great opportunity to tap into the enormous growth potentials that the Indian market has to offer.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

BUSINESSES

Major has its own risk management policy. The following are business risks and rusk mitigation.

Risk from ﬁlm release

Risk from competition

Risk from new expansion

Cinema exhibitors have to greatly rely on the steady flow of films. The absence of new movies definitely bright about loss in revenue because income from movie show accounts for 53% of the whole revenue. The main income of the cinema is from ticket sale and the sale amount depends on the number of movies show as well as the popularity of each movie. Indeed, cinema is the primary and paramount channel to deliver the movie, so the movie producer and movie owner have to rely on the cinema so as to pave the way for the subsequent movie redistribution in the form of DVD and VCD. Consequently, the interaction among cinema exhibitors, movie representative and movie producers are independent in nature. In this regard, the common goal of the 3 mentioned parties to attain constant growth significantly mitigates the risk of film release. At present, the market share of MAJOR is approximately 80% (The evaluation of market share bases on ticket sale for each movie during the first week of show). MAJOR holds market leadership which enhances its bargaining power against movie owners and movie representatives. In addition, Major’s entry into movie producing business though M Pictures Entertainment Plc. Also lessens the risk resulting from the off-peak period in which there is no grand movie from Hollywood. Nevertheless, MAJOR is committed to foster cooperative relationship with international and domestic movie producers because the nature of the industry requires interdependence. MAJOR also makes agreement with the m o v i e p ro d u c e r r i g h t f ro m t h e production planning of the movie to ensure effective risk management from film release.

As the industry leader in terms of modern facilities and prime locations, MAJOR has incessantly continued the expand its branches and modernize the existing theaters. There are four models of expansion: standalone cinema, shopping mall, lifestyle mall and hypermarket. This strategy aims at expanding customer base. However, the expansion and growth in branch of competitors also has impacts on MAJOR in terms of possible revenue reduction and comparison of service and facilities by the consumers. MAJOR is fully aware of such competition and hence it focuses on maintaining customer base and explore new customer group by offering additional entertainment experiences including bowling centers, karaoke service and other boutiques in the branch. MAJOR also has constant revamp of the cinemas. These efforts enhance the potentials of MAJOR, making it paramount cinema operator. The other competitor for the cinema is VCD and DVD, legally and illegally produced. The DVD and VCD segment is growing because of a shorter cinema show period of each movie. However it is deemed that this risk is significant because visitors to MAJOR branches can also enjoy other entertainments in addition to watching movies. For the piracy problem, the governments also make serious effort in suppressing those illegal DVDs and VCDs, driving down the number of these illegal media.

In 2014, MAJOR is planning to increase 30-40 additional cinemas in Bangkok and the vicinity. It is also opening 7 screens and 13 lanes of bowling in Cambodia with Aeon Mall. The total investment is 600 million baht, with 450 million for domestic investment and 150 million for the investment in Cambodia. The expansion will be financed from financial institutions and/ or from the insurance of debenture and/ or from the cash in operation. The investment for the expansion may induce uncertainty, resulting from retur n on investment. The new operations may face delayed opening or higher expenditure due to increasing project cost. However, thanks to the well-established experience, MAJOR has average pay-back period of 3-4 years per branch and the average IRR (internal rate of return) for each project is 15-20%. Prior to the project, a feasibility study is carefully conducted. Plus, the project locations are always situated in the residential areas, downtowns or near business districts. These factors ensure fruitful expansion. Nonetheless, if the payback period is longer than expected, MAJOR may consider adjust the number of cinemas, bowling lanes, rental space or rental fee. Sometime, the expansion is coinvested with other partners including Siam Future Development Plc., and operator of the shopping mall. Such cooperation makes MAJOR aware of the updated market insights as well.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

Risk from management The business of MAJOR has been established and become successful under the helm of Mr.Vicha Poolvaraluk, the founder of MAJOR. Hence, it has been perceived that MAJOR has to reply on his stature and experience while there is perceived risk from the change in shareholding among MAJOR founders. Any change related to the founder may not only have ramifications on the relations with the movie producers but also has implication on the confidence in MAJOR and the company revenue as a whole. However, such risk is unlikely given the ownership and bound which Mr.Vicha has developed with MAJOR. His commitment to MAJOR has resulted in uninterrupted growth and he is determined to take MAJOR into another level. Moreover, MAJOR has the policy to constantly develop new executives for each business operation. They will be groomed by seasoned senior executives. This enhances the capability to handle risk from management.

Risk from

terrorism and Unrest

The domestic unrest remains persistent. Though the risk in this regard may lead to reducing number of moviegoers and decrease in MAJOR revenue, it is considered that the risk from unrest and public security is insignificant. MAJOR always places important on strict security measures. Stringent security surveillance is employed as preventive measure in order to reduce the chance for any disorder in the areas under MAJOR jurisdiction. The company is also equipped with CCTV system and metal-detection machines to further secure the property for all people concerned.

Unexpected Risk disease In case of unexpected situation, MAJOR prepares Business Continuing Plan for deal with all risk management. This plan can be adapted for all situation. Then, Major could manage and adjust itself to mollify all risk by efficiency.

BUSINESSES

Risk Factors

Risk from ﬁre accident The fire accident causes halt in business operation, leading to loss in revenue. However, Major has insurance policy for variance type of accident including fire with sufficient financial coverage for property, business stoppage and third-party liability. As preventive measure, MAJOR has mandatory fire drills which are facilitated and organize by firefighters.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

GOVENANCES

The Company is strongly committed to direct and operate its business by adhering to the Stock Exchange of Thailand’s Good Corporate Governance (CG) practice guideline for listed companies. With this in mind, the Company’s Board of Directors and the management has implemented, reviewed and improved good corporate governance practice to ensure that the Company has an efficient and transparent management system. The Company also strongly respects shareholders’ right and has equal treatment towards shareholders; providing accurate, sufficient and timely disclosure of significant information for the best benefits of shareholders; clearly defining qualifications of independent directors; appointing various committees; stipulating roles and responsibilities of its directors and top level management; and continuously encouraging directors and executives’ skill development. Such measures have been carried out to create and strengthen confidence among the Company’s shareholders, investors, stakeholders and all concerned parties that MAJOR’s business operations fully comply with good corporate governance practice and business ethic. The Company shall be perceived as a quality listed company with high responsibility and transparency in all parts of its operation. Since 2009, the Company has implemented and maintained good corporate governance practices, which can be divided into 5 sections as follows :

1. Shareholders’ right

questions to the Company prior to the annual shareholders’ meeting and the right to openly express opinions and ask questions at the shareholders’ meeting. 3. The Board of Directors shall not take any action which may infringe or limit shareholders’ right. 4. The Board of Directors has responsibility to facilitate the applying of the shareholders’ rights such as giving the significant information updated via website, inviting the shareholders to visit the theatre, etc.

1.1 Shareholders’ right protection policy • The Company’s Board of Directors formulates the shareholders’ right protection policy in writing in 2009. The policy emphasizes on allowing shareholders to have equal rights to have access to the Company’s operational performance; participating in various decision making; and protecting, promoting, and encouraging shareholders to fully exercise their 1.2 Allowing shareholders to study rights; and not infringing shareholders’ information prior to the shareholders’ meeting rights. Key policies are as follows: • The Board of Directors and the Policy on shareholders’ right Company’s administration have implemented a policy on shareholders’ protection 1. The Board of Directors is responsible right, which covers the areas beyond for protecting and respecting basic those required by law, especially the rights of the Company’s shareholders, right to receive information and such as a right to purchase, sell or significant information. At the Annual transfer shares, a right to the Company’s General Meeting of the Shareholders profit sharing; right to obtain sufficient for the Year 2013 on 3 April 2013, the information about the Company’s C o m p a n y p r o v i d e d s u f fi c i e n t o p e r a t i o n ; r i g h t t o a t t e n d t h e opportunity for shareholders to study shareholders’ meeting to appoint or the information for 30 days prior to the terminate directors and independent m e e t i n g d a t e . T h e i n f o r m a t i o n auditors, approve dividend payment, published on the Company’s website: formulate or amend Article and corporate.majorcineplex.com are as Memorandum of Association, and also follows: a right to approve capital increase or 1. Invitation to the Annual General Meeting of the Shareholders for the reduction and special items. 2. The Board of Directors has duty to Year 2013 promote and support shareholders to 2. Attachment 1 : The minutes of the exercise their right in various areas at Annual General Meeting of the the Annual General Shareholders’ Shareholders for the Year 2012 Meeting, including the right to propose 3. Attachment 2 : Annual Report for the meeting agenda in advance, the right Year 2012 in CD-ROM format to nominate persons as directors, the 4. Attachment 3 : Financial Statements for year ended 31 December 2012 right to submit 5. Attachment 4 : Information about net profit and dividend payment allocation 28

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

6. Attachment 5 : Background of directors who are nominated for reappointment replacing directors who retire at the expiration of their terms, and directors’ authority for 4 persons 7. Attachment 6 : Directors remuneration details 8. Attachment 7 : List of independent auditors and auditors’ remuneration 9. Proxy form A (general) 1 0 . P ro x y f o r m B ( M i n i s t r y o f Commerce’s form) 11. Proxy form C (for custodian) 12. Independent directors’ details (for proxy) 13. Document to confirm shareholders’ right to attend the meeting 14. The Company’s rules related to shareholders’ meeting 15. Map of the meeting venue • The information and document were published in both Thai and English languages and are the same as the printed document mailed to shareholders. Shareholders were given sufficient time to study the information before receiving the printed document from the Company 7 days in advance before the meeting • In the meeting day, the company facilitated shareholders to exercise their rights to attend the meeting by implementing a barcode system for registration and vote counting, as well as providing the stamps for proxy authorization. The label of registered shareholders was provided for access convenience while meeting, without timeless to recheck their documents. • After the Annual General Meeting of the Shareholders for the Year 2013, the Company compiled the document, including agenda, meeting resolutions, voting results,

1.3 P r e v e n t i n g l i m i t a t i o n o f shareholders’ right • In 2013, the Company’s Board of Directors did not take any action that might infringe or limit shareholders’ right to study information and significant information as stated in the Company’s policy on shareholders’ right protection. The Company has published all the information on its website prior to the Annual General Meeting of the Shareholders for the Year 2013. The Company did not distribute additional document containing significant information during the meeting, or add or change meeting agenda or amend significant information without prior notice. The Company also encouraged the shareholders to exercise their rights to openly and sufficiently question the Company’s Board of Directors during each agenda. The Board of Directors also implemented measures to prevent possible limitation of shareholders’ right or limit the right of the shareholders who arrived late to attend the meeting. 1.4 Providing convenience in shareholders’ right exercising • The Company provided sufficient convenience for shareholders and shareholders’ proxy to register to attend the meeting by implementing a barcode system for registration and vote counting as well as distributing voting ballots to the shareholders before the meeting began. • The Company clearly stated shareholders’ meeting rules and process in the meeting invitation. The moderator of the meeting also informed the attending shareholders of the rule and voting process at the meeting. The shareholders’ meeting minutes also included a record that the meeting was informed of the rules and voting process. • The Company invited its shareholders to exercise their right to site visit. The company also regularly updates information and significant information published on its website. 1.5 Giving sufﬁcient time and opportunity for shareholders to express their opinions • The Company provided opportunity for shareholders to ask questions related to the meeting agenda

openly express their opinion. The Chairman of the Board of Directors asked the meeting at the end of each agenda. Questions related to the meeting agenda or the Company and shareholders’ opinion, as well as the answers or clarification by the Board of Directors or the Company’s management were all recorded in the meeting minutes. • The Company arranged for voice recording of the shareholders’ meeting, and disclosed the significant issues raised during the meeting in the meeting minutes for reference in the future and enable shareholders who could not attend the meeting to catch up with the meeting details. 1.6 M e e t i n g a t t e n d a n c e o f directors • With fully respect of shareholders’ right, all the 11 members of the Board of Directors attended Annual General Meeting of the Shareholders for the Year 2013. It could conclude that the company still developed organizing the 2013 Annual General Meeting of Shareholders as more strict than the CG guideline.

2. Equitable treatment toweards shareholders Equitable treatment towards minor shareholders • The Company allowed shareholders, individual or in groups holding minor shares of at least 100,000 shares for no more than 12 consecutive months, to propose meeting agenda 4 months prior to the Annual General Meeting of the Shareholders for the Year 2013 or from 1 October 2012 to 31 January 2013. The criteria for proposing meeting agenda in advance was published on the Company’s website. The Board of Directors’ Secretary was assigned to compile the meeting agenda and proposed to the independent directors for consideration and to make them the official meeting agenda. In 2013, none of shareholders proposed meeting agenda. • The Company opened opportunity for shareholders, individual or in groups holding minor shares of at least 100,000 shares for no more than 12 consecutive months to nominate persons to be appointed as directors or submit questions related to the meeting agenda to the Company’s

Board of Directors prior to the Annual General Meeting. The company’a secretary was assigned to compile the nominated persons’s details and proposed to the nomination committee to consider the qualifications of person nominated by minor shareholders in accordance with the company’s nomination procedure. In 2013, none of shareholders made nomination. • The Board of Directors arranged the shareholders’ meeting according to meeting agenda published on the Company’s website in advance and sent in document form to the shareholders prior to the meeting date and time. In order to allocate appropriate time for consideration and to conform to the meeting regulations, the Company did not propose new agenda during the meeting or distribute additional document for shareholders’ consideration without prior notice. • The Board of Directors encouraged shareholders to select the proxy form that provides them with freedom to select voting decision – agree, not agree, abstain, by preparing Proxy B form. The Company also prepared the Proxy A (general) and Proxy C (for custodian) for its shareholders and published them for easy download on the Company’s website 30 days prior to the meeting. • The Board of Directors provided convenience for shareholders who could not attend the meeting but wish to exercise their voting rights by allowing them to assign proxy. The Company arranged for 2 independent directors to attend the meeting and vote on behalf of t h e s h a r e h o l d e r s ; ( i ) M r. C h a i Jroongtanapibarn, Independent Director and Chairperson of Audit Committee (ii) Mr. Naruenart Ratanakanok, Independent Director and Audit Committee Member. Shareholders can appoint one of the two independent directors as their proxy. • The Board of Directors encouraged the meeting to use voting ballots. Voting ballots were prepared for each agenda, such as dividend payment and independent auditor remuneration, for transparency and reference in case of objection later Conﬂict of interest prevention • The Board of Directors formulated measures and approval process for related transaction between the Company and its subsidiaries or other persons who may have conflict of interest. Persons with direct conflict of interest are not allowed to participate in the consideration and decision making on the items they may have conflict of interest. ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

GOVENANCES

Good Corporate Governance

questions and shareholders’ opinion expressed at the meeting, and prepared the “Annual General Meeting of the Shareholders for the Year 2013 Minutes” for publishing on the Company’s website.

GOVENANCES

3. Roles of stakeholders 3.1 Good corporate governance policy related to stakeholders • The Board of Directors has stipulated and concerned for all stakeholders. Not only follow regulation but aslo create new policy To reach both of good corporate governance and corporate social and environment responsibilities, by measuring related to stakeholders as follows: 1. Employees and families The Company sets policy on treatment towards employees as follows : Policy on treatment towards employees 1. The Company shall appropriately reward employees by considering each e m p l o y e e ’s p e r f o r m a n c e u s i n g measurable tools and with fairness. The rewards include monthly remuneration, overtime payment, bonus, production reward, life and health insurance and provident fund. 2. The Company shall promote and develop employees’ knowledge and skills, for example, by arranging training and seminar for executives and employees of all levels. 3. The Company shall fairly and equally treat all employees, such as in performance appraisal, work record confidentiality, and employees’ benefits. 4 . T h e C o m p a n y s h a l l re s p e c t e m p l o y e e s ’ r i g h t a n d p ro v i d e opportunities for employees to speak up in case they are not treated properly by providing comment box or through Human Resources Department. 5. The Company shall provide safe and hygienic work environment that e n h a n c e w o r k e f fi c i e n c y a n d effectiveness. 2. Customers and creditors The Company sets policy on treatment towards customers as follows : 30

2.the Company has the duty to build customer satisfaction with sufficient and appropriate responsibility and care, as well as giving priority to customers’ problems and needs. The management and all employees shall respect the following measures: • Committed to deliver quality products that directly meet the customers’ requirement. • Respect the conditions agreed with the customers. • Equally propose price and trade conditions to customers in the same category. • Provide the customers with accurate information about the product quality and qualifications to ensure confidence and fairness to the Company’s customers. • Willing to address customers’ needs and concerns as well as to handle complaints, to recommend and to monitor progress of the matters informed by the customers. Creditors The Company sets policy on treatment towards creditors as follows : Policy on treatment towards creditors 1. The Company shall build relationship with and treat creditors with integrity and trust. 2. The Company shall be responsible and best respect all conditions agreed with the creditors. 3. Shareholders The Board of Directors has formulated policy related to shareholders as follows : Policy on treatment towards shareholders 1. The Company has duty to protect and respect basic rights of shareholders which are the right to purchase or transfer shares; the right to receive the Company’s profit share, the right to receive sufficient information about the Company’s operation; the right to participate in the shareholders’ meeting to appoint or terminate directors, appoint external auditor, approve dividend payment, allocate annual net profit, set or amend Article or Memorandum of Association, capital increase or decrease and approve special items. 2. The Company has the right to promote and encourage shareholders to exercise their right at the Annual General Shareholders’ Meeting, including the right to propose agenda in advance, the right to nominate directors in advance, the right to propose questions to the meeting prior to the meeting date, and the right to express opinion and ask questions in the meeting. 3. The Company shall not take any action that may infringe or limit the shareholders’

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

4. Business partners The Company sets policy on treatment towards business partners as follows : Policy on treatment towards business partners 1. The Company is responsible for building good relationship with every business partner. 2. The Company is responsible for providing equal opportunity for each business partner to propose products a n d s e r v i c e s . T h e C o m p a n y ’s management and employees who are responsible for dealing with customers shall follow the measures below : • Equally and fairly treat all business partners. • Consider and make decision by comparing quality of products and related conditions for the best benefits of the Company in both short and long term. • Keep confidentiality in relations to customers, not accept bribes or commissions from business partners and not disclose information or one or many business partners to other partners. 5. Analysts, Investors and Financial Institutions The Company sets policy on treatment towards Analysts, Investors and Financial Institutions as follows : Policy on treatment towards business partners 1. The Company provide information to Analysts, Investors and Financial Institutions including the information about the financial performances, business outlook accordance with the regulations and good corporate governance policy. 2. All information including the news that might affect investment decision will be provided in the corporate website 3.2 Compensation to stakeholders in case of damage caused by infringement • The Board of Directors has implemented measures on the use of internal information that directors, executives and the Company’s employees shall follow which are Measures on preventing the use of internal information by directors, executives and employees 1. The Board of Directors’ Secretary is responsible for reporting to the C o m p a n y ’s d i r e c t o r s a n d t h e management the shareholdings of the directors and

executives, spouses and children who have not yet reached manhood, and report the changes in shareholdings according to the article 59 and punishment article 275 of the Securities and Exchange Act B.E. 2535. 2. The Board of Directors shall advise directors, executives and employees who have access to significant internal information to avoid trading the Company’s shares one month before and one week after the distribution of such significant information, including financial statements which affect changes in share prices. This is to avoid possible frauds under the Securities and Exchange Act. • The Company has stipulated the measures to prevent directors and the Company’s executives from using internal information for own or others’ benefits. The measures are stated in the Company’s Code of Ethics for the Management and Employees which are as follows : Measures on preventing conflict of interest of directors, executives and employees 1. The Company’s management and employees shall not take any action for personal benefits or to obtain assets of the Company or customers. 2. The directors and employees shall not be engaged in or have own business or activities that may cause conflict of interest that may conflict with the responsibilities of the directors and employees. 3. In case that the position and responsibilities of the executives and employees may directly or indirectly provide benefits to themselves or members of their family (spouse, father, m o t h e r, c h i l d r e n , c o u s i n s ) o r acquaintance, the directors and employees shall not be involved in decision making and immediately report to their immediate supervisors. 4. The Company shall avoid assigning the directors or employees to perform a task that may lead to a situation that causes conflict of interest to the Company or the Company’s customers. 5. In case the Company’s directors and employees are involved in external activities or hold positions in other organizations, such as being directors, advisors, representatives or employees, such condition must not cause direct or indirect conflict of interest to the Company and its customers or affect the persons’ ability to perform their duty. 6. Directors and employees are not

to work for or hold positions in other organizations which operate similar business or compete with or may have conflict of interest with the Company. • T h e C o m p a n y ’s B o a rd o f Directors has consistently received information about possible conflict of interest of directors, executives and e m p l o y e e s i n t h e C o m p a n y ’s transactions. The Internal Audit Department is responsible for reporting information related to conflict of interest to the Audit Committee for acknowledgement and consideration and the Audit Committee consistently monitor, review and report the information to the Board of Directors for acknowledgement and consideration. In 2013, there is no report that the Company’s directors, executives and employees having conflict of interest that causes damage to the Company. • The Company has stipulated the following measures on compensating stakeholders in case of damage due to infringement. 1. Employees and families Measures to prevent damage from employees’ rights infringement The Company has arranged for sufficient remuneration and benefits for its employees and strictly followed the treatment towards employees policy. A comment box is provided for employees as a channel to receive complaints and recommendation from employees affected by unpleasant work conditions. In 2013, there is no employees’ complaint related to infringement. 2. Customers Measures to prevent damage from customers’ rights infringement The Company has taken good care of its customers in accordance with its treatment towards customers policy. Customer Liaison unit was set up as a channel for customers to file complaint in case they have problems and need help. Customers affected by infringement can contact the Customer Liaison through 2 channels which are via telephone to contact the Marketing Department or via the Company’s website. 3. Shareholders Measures to prevent damage from shareholders’ rights infringement The Company has implemented measures in protecting the basic rights of shareholders, including the right to receive information, and the right to participate in shareholders’ meeting,

exercise their rights beyond those required by law, such as to propose meeting agenda in advance to the meeting date, and nominating persons to be elected as directors in advance. The Company shall evaluate and monitor the results of the implemented measures in order to prevent possible damages from shareholders’ rights infringement. The evaluation shall be done internally through departments which are responsible for shareholders’ rights protection, and externally through the AGM Checklist program organized on annual basis by the SEC, Thai Investors Association and the Association of Listed Companies. In 201, there is no shareholders’ complaint related to right infringement nor limitation. 4. Analysts, Investors and Financial Institutions Measures to prevent damage from Analysts, Investors and Financial Institutions’ rights infringement The Company provide information to Analysts, Investors and Financial Institutions including the information about the financial performances, business outlook at least once a quarter or not less than 4 times per year. In addition, The information are provided in several channels such as IR line (02511-5427 ext. 893), corporate website, one-on-one meeting, group meeting and site visit. 3.3 Stakeholders’ participation mechanism • The Board of Directors has set mechanism for stakeholders’ participation as follows : 1. The Company provided a box to receive comment, complaints or opinion at the front of the office. 2. The Company provided opportunities for investors to express their opinions to the Board of Directors through the Company’s website, under Investers Relations (IR) section. 3.4 Mechanism for protection of those who report frauds • The Board of Directors provided various channels for report on frauds, unethical or illegal practice related to financial statements and internal control system through the Internal Audit Department via telephone or the Company’s website. • The Board of Directors ensured that the persons who report frauds would be well protected by keeping all information about the reporting person highly confidential.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

GOVENANCES

• The Audit Committee is required to consider and provide opinion on the necessity and justification of the items for the best benefits of the Company. T h e i n f o r m a t i o n a b o u t re l a t e d transaction is disclosed in the notes to the financial analysis, which is prepared in accordance with the generally accepted accounting principles, in Annual Report of the Year 2013 (in Related transaction chapter) and the Form 56-1.

GOVENANCES

reports irregularity. Initially, the Internal Audit Department will make a summary and submit it to the Audit Committee for further investigation and report to the Board of Directors in case the matters are true and may have impact on the Company’s operation.

4. Information disclosure and transparency 4.1 Results of the execution of corporate governance policy • In 2013, The Company reported accurate, appropriate and timely quarterly and annually for 2013 financial statements as well as other information through various channels for shareholders, investors and stakeholders to equally reach the information. In 2013, the Company accurately, adequately, timely and transparently disclosed the information required by the SEC and SET through SET’s online channel and the Company’s website. The Company has never been punished by the SEC or SET for not disclosing the information as required. The Company also regularly appraises the efficiency of information disclosure process and strictly follows the regulations on information disclosure. • The Company also published and regularly updated all significant information submitted to the SET and other information on its website as well as provided such information both in Thai and English for all stakeholders to have equal access to the information. 4.2 Remuneration of the directors and the management • The Remuneration Committee formulated the 2013 policy on remuneration of directors, Chief Executive Officer and top executives as follows: Policy on remuneration of directors, Chief Executive Officer and top executives 1. Remuneration of the Company’s directors, Chief Executive Officer and top executives shall be set in accordance with their duty, scope of r e s p o n s i b i l i t y, f a i r n e s s a n d attractiveness, which should be equal to remuneration for directors in other listed companies in the same industry and similar size, as well as the 32

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

and overall economic condition 2. The Remuneration Committee shall be responsible for initial consideration and propose for the approval of the Board of Directors and the Annual General Meeting of the Shareholders the maximum remuneration of the year, position remuneration and meeting allowance 3. The Remuneration Committee shall respect the resolution of the Annual General Meeting of the Shareholders on the remuneration budget and details which are also disclosed in the annual report. Remuneration that the directors received from positions in other companies, such as consultancy fee, and directorship in the Company’s subsidiaries shall also be disclosed. 4. Any director who currently holds management position in the Company and receives remuneration in the forms of monthly salary will not be entitled for the remuneration. • The Remuneration Committee proposed to the Board of Directors and the Annual General Meeting of the Shareholders for the Year 2013 to approve a total of no more than Baht 10.6 million remunerations for the nonexecutive directors. Remunerations for the directors are shown in remunerations of borad of directors section. The Company’s directors who also hold directorship in subsidiaries did not receive remunerations from the subsidiaries.

Board of Directors Report The Company prepared the Board of Directors’ responsibility towards financial statements together with the independent auditor’s report (published in the annual report under chapter Board of Directors’ responsibility towards financial statements). 4.4 Roles and duties of the Board of Directors and Committees • T h e C o m p a n y ’s B o a rd o f Directors appointed committees to assist the Board in studying details, monitoring and supervising the Company’s operations, as well as screening assigned tasks. Scope of authority, duty and responsibilities are clearly stated.

Board of Directors • In 2013, the Board of Directors convened 4 times. All meetings were arranged in compliance with the Company’s Article of Association and the Public Limited Company Act B.E. 2535. Meeting invitation and related significant information were distributed to the directors 10 days prior to the meeting. The Board also provided adequate and equal opportunities for the directors to discuss significant issues. The Board of Directors’ Secretary and legal advisor attended and recorded the meeting, questions, and recommendations by the directors in order to allow directors and concerned parties to study and audit. Directors’ attendance is as follow table.

Board of Directors’ Meeting / Total Meetings

Position

Name 1. Mr. Somchainuk Engtrakul

Chairman of the Board

3/4

2. Mr. Vicha Poolvaraluk

Director

4/4

3. Verawat Ongvasith

Director

4/4

4. Mrs. Paradee Poolvaraluk

Director

3/4

5. Mr. Thanakorn Puriwekin

Director

4/4

GOVENANCES

• The Board of Directors has stipulated size, as well as the Company’s 4.3 an effective process to handle the performance, business environment •

2013 Annual General Meeting

3/4

6. Pol.Sub.Lt. Kriengsak Lohachala Independent Director 7. Mr. Wichai Poolvaraluk

Director

3/4

8. Mr.Chai Jroongtanapibarn

Independent Director

4/4

Chairperson of Audit Committee 9. Mr.Wallop Tangtrongchitr

4/4

Independent Director Audit Committee

10. Mr. Naruenart Ratanakanok

4/4

Independent Director Audit Committee

11. Dr.Satian Pooprasert

3/4

Independent Director

Executive Committee • In 2013, the Executive Committee performed their duties in managing the Company’s operation; reviewing policies, business plan, investment plan, and annual budget plan to present to the Board of Directors for approval; monitoring, supervising and controlling the execution of plans to achieve the preset goals earlier approved by the Board of Directors or as assigned; and reporting the quarterly and annual operational performance to the Board of Directors for acknowledgement. The Executive Committee also provided its opinion on the committee’s performance in the Message from the Chief Executive Officer as published in the annual report. Audit Committee • The Audit Committee performed its duties in reviewing the financial statements of the Company and its subsidiaries, auditing the internal control report submitted every month by the Internal Audit, meeting with independent auditors to discuss various matters. The Audit Committee Chairman reported significant matters to the Board of Directors for consideration by including those matters as meeting agenda. The Audit Committee also provided its opinion in the Audit Committee Report as published in the annual report. • In 2013, the Audit Committee convened 10 times and committee members’ attendance is as follows :

Audit Committee

Rank 1. 2. 3.

Audit Committee Meeting / Total Meetings

Mr.Chai Jroongtanapibarn Mr.Wallop Tangtrongchitr Mr. Naruenart Ratanakanok

10/10 10/10 9/10 ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

GOVENANCES

telephone and email : ir@majorcineplex. com. • The Company prepared a rough investors relations plan which is subjected to change depending on conditions and environment as follows : 1. Organize a quarterly analysts meeting. The Company will also organize a meeting between its Investors Relations and analysts when analysts need more information on additional matters. 2. Arrange roadshows at least once a year to provide information to domestic and overseas investors. 3. Participate in exhibitions held to provide information to investors, such I n 2 0 1 3 , t h e R e m u n e r a t i o n as the exhibitions arranged by SET, Committee performed its duties in Brokers’ Association and other setting remunerations for directors who organizations. were not the Company’s executives or employees for the year 2013, remunerations for committees for the year 2013, by considering their duties, scope of responsibilities, which were equal to the remunerations paid to directors in listed companies of the same size and in the same industry, as 5.1 Policy on Good Corporate well as considering the Company’s Governance • T h e C o m p a n y ’s B o a rd o f performance, business environment a n d t h e o v e r a l l e c o n o m y. T h e Directors is committed to direct the remunerations were submitted to the business in compliance with the good Board of Directors and the Annual corporate gover nance which is General Meeting of the Shareholders beneficial and important to promote for approval. In 2013, the Remuneration efficiency and transparency of the Committee convened one time. All Company’s operation, increase competitive advantages, and add longcommittess attend the meetings. term value to the shareholders. The 4.5 Relationship with shareholders Board of Directors and the administration • T h e C o m p a n y ’s B o a rd o f have formulated good corporate Directors formulated a policy to governance practice and made them accurately, adequately, transparently the Company’s policy in writing. The and timely disclose reliable significant Board of Directors approved the policy information and information that may which has essence as follows : • Respecting shareholders’ right affect the Company’s share price. It assigned the Investors Relations to be on various matters, including allowing the Company’s representative in shareholders to propose agenda in communicating to institute and advance for the shareholders’ meeting, individual investors as well as analysts and nominating in advance persons to and concerned government agencies. be selected as directors, etc. and not The Company’s website (corporate. taking any action which may infringe or majorcinplex.com) is used as a channel limit the rights of shareholders. • Equitably and fairly treating all to distribute all information, including the information about the Company, shareholders, investors, stakeholders business, financial information, news and related parties. • A c c u r a t e l y, a d e q u a t e l y, that may affect investment decision, reports submitted to the SET, the equitably, and timely disclosing Company’s activities, and shareholders’ information to shareholders, investors, meeting details, to enable shareholders stakeholders and related parties to keep updated of the Company’s through appropriate channels, including movement and required information. website, to enable shareholders and The Investors Relations is directly stakeholders to have easy access to responsible for information provision. the information. Investors may contact the Investors

5.The Board of Directors’ Responsibilities

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

• Performing its duties and responsibility in supervising and directing the operations of the Company with integrity, ethics and prudence to achieve the Company’s goal and for the best benefits of the Company and its shareholders, as well as preventing conflict of interests. • Managing the Company with transparency under sufficient internal control and audit system. • Controlling and managing risks at the appropriate level. • Operating the Company with integrity and in compliance with laws and business ethics. 5.2 Structure of the Board of Directors and Committees • The Board of Directors viewed that, considering its current scope of responsibilities, it is appropriate to have 11 members who have different qualification, skill, experience and specialization that will benefit the Company, and ability to contribute time and efforts to perform duty to strengthen the Board of Directors. • The Board of Directors gives priority to transparency and therefore stipulated that the Board of Director Chairman is an independent director and shall not be the same person as the Chief Executive Officer or President. • The Board of Directors stipulated a formal and transparent process of directors nomination which is free from influence from shareholders with control authority. The Nomination Committee shall nominate directors by considering education, capability, experience, etc. in accordance with the scope of responsibilities of the Board of Directors or committees. The nominee list will be proposed to the Board of Directors’ consideration and appointment. • The Board of Directors disclosed the list of the directors and committee members in terms of names, positions, age, education, shareholdings, work experience and relationship with the Company’s executives in various channels, including the annual report and the Company’s website. 5.3

Leadership and vision • The Board of Directors has strong leadership, vision and independence in making decision for the best benefit of the Company and its shareholders. Roles and responsibilities of each committee are clearly separated. The Administration

information for the Board of Directors’ consideration. • With a goal to ensure stable business with long-term sustainability and success, the Board of Director, in cooperation with the management in reviewing and ensuring that vision and mission best address the changing environment. The business goals, business plan and budget were prepared by taking into consideration the maximum added value and longterm stability of the Company and its shareholders. The Board of Directors also direct the business and ensure that the business operation is efficiently executed by the management. • The Board of Directors encouraged good corporate governance within the organization and formulated good corporate governance practice, code of ethics, measures and a p p ro v a l p ro c e d u re o f re l a t e d transaction between the Company and related parties or persons who may have conflict of interest, as well as clearly separated the authority of shareholders from that of the Board of Directors and between the Board of Directors and the executives and other committees, in order to create balance of power and independence and transparency. 5.4

Conﬂict of interest • The Board of Directors shall consider related transaction that may cause conflict of interest between shareholders, directors and the management with best prudence, i n t e g r i t y, r e a s o n a b l e n e s s a n d independence within good business ethic framework, and disclose complete information for the best benefit of the Company. The Board of Directors shall strictly conform to the criteria and procedures or regulations set by SET and ask the Audit Committee to provide information about the necessity and appropriateness of such transaction. • The Board of Directors formulated measures and approval procedure of related transaction between the Company and its subsidiaries or persons who may have conflict of interest. The persons who may have direct and indirect conflict of interest shall not be allowed to make decision on the matter. The Audit Committee is required to participate in the consideration and provide opinions on the necessity and reasonableness of the items proposed for the best benefits of the Company. The Board of

the financial statements prepared by 5.8 Role and responsibilities of the using the generally accepted accounting Board of Directors principles published in the annual • In 2013, the Board of Directors report and the Form 56-1. reviewed and approved significant operational matters and directed the 5.5 Business ethics management to efficiently implement • The Board of Directors prepared the policy and effectively manage the the Management and Employees’ Code budget. o f E t h i c s f o r t h e C o m p a n y ’s • The Board of Directors reviewed management and employees to use as the approved written good corporate guideline in performing their duties and governance policy at least once a year. to strictly and consistently implement • The Board of Directors prepared in terms of business operations, and distributed the Code of Ethics in equitable and fair treatment towards writing to directors, executives and stakeholders, matters related to conflict employees; and reviewed other ethics of interest, information confidentiality for directors, executives and employees and possible fraudulent use of to understand ethical standards applied information, bribes, and gifts. The to its business operation. The Board of Board of Directors assigned the Internal Directors assigned the Internal Audit Audit unit to monitor and audit the Department to monitor the execution implementation of Code of Ethics. of such standards. • The Board of Directors shall • The Board of Directors provided monitor and ensure that the Company’s financial statement control and business operation, directors’ ability to regulations implementation. The perform their duties, operation by the Internal Audit Department independently management, and employees’ work are performed its duty in monitoring the within ethical framework in addition to implementation of these regulations the Company’s regulations and related and control measures and reviewed the laws. system at least once a year. 5.6 Balance of power for nonexecutive directors • The Board of Directors structure comprised 6 non-executive and independent directors and 5 executive directors. As of 31 December 2013, the Company had 11 members of the Board of Directors. The balance of power by non-executive directors was as follows : Executive directors 4 persons (35 percent) Non-executive and independent directors 7 persons (65 percent) 5.7 Integration or segregation positions for managerial balance of power • The Board of Directors clearly divides scopes of roles and responsibilities among the Board of Directors, Executive Committee, Audit Committee, Nomination Committee, Remuneration Committee and Risk Management Committee, as well as the Chief Executive Officer with a clear stipulation that the Chairman of the Board of Directors shall not be the same person as the Chairman of the Executive Committee or Chief Executive Officer and shall not have any relations with the management in order to prevent any executive to have unlimited

GOVENANCES

Nomination and Remuneration Committee In 2013, the Nomination Committee performed its duties in nominating 4 directors to replace a director who left office at the end of their terms. The committee considered the qualification, knowledge, capability, experience, good work history, and ethic. As a result, the 4 directors were nominated to be re-elected, which was approved by the Board of Directors and the annual general shareholders’ meeting. In 2013, the Nomination Committee convened one time. All committess attend the meetings.

5.9 T h e B o a rd o f D i re c t o r s ’ meeting • The Board of Directors convened at least 4 times a year and arranged the meeting in accordance with the Company’s rules, the Public Limited Company Act B.E. 2535 and SET’s regulations. The Chairman of the Board of Directors, in the capacity of the meeting chairman, shall promote prudence in any consideration, provide sufficient time for the management to present significant information and for directors to discuss the matter. Meeting minutes for every meeting was made for future reference and checking. The directors are responsible for attending every meeting of the Board of Directors except in case of extreme necessity. • Before the Board of Directors’ meeting in 2013, the Board of Directors’ Secretary prepared meeting agenda for whole year 2013 for the Board of Directors to be able to schedule themselves for the meeting. In considering the number of meetings, the Board of Directors considered the duty and responsibility of the Board of Directors. The Board of Directors’ Secretary shall prepare the whole year meeting agenda and matters to be considered in each meeting in order to provide sufficient detailed information for the Board of Directors to understand. ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

GOVENANCES

5.10 Self assessment of the Board of Directors • The Board of Directors jointly assessed their performance, solved problems, and improved their work efficiency and effectiveness. The Board of Directors, evaluated meeting attendance and ensured that the number of directors attending the meeting was sufficient for the meeting. The Board of Directors’ Secretary prepared criteria for self assessment of the whole directors for the Board of Directors’ consideration and self assessment at the end of every year. 5.11 Remuneration of directors and executives • The Board of Directors appointed the Remuneration Committee to be responsible for ensuring that the current remuneration of directors was in line with the pre-set criteria and in similar range as that offered by other companies 36

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

5.12 Directors and executives development • The Board of Directors encouraged and provided training opportunities for the Company’s directors and members of committees to further improve their ability to perform their tasks. In 2013, 10 directors attended courses organized by the Thailand Institute of Directors. • The Secretary to the Board of Directors prepared Directors’ Guidebook and criteria on information disclosure, profile, shareholdings, changes to shareholding of directors, etc. and distributed to new directors. • The Board of Directors stipulated that the Chief Executive Officer shall prepare a regular report for the Board o f D i re c t o r s t o u p d a t e o n t h e development and succession plans that the Chief Executive Officer and the President prepared in case they could not perform their duties. • The Board of Directors approved the executive development plan by assigning the Chief Executive Officer to report progress of executive development plan undertaken during the year. This plan is considered in parallel to the succession plan. __________________________________

Corporate Management Structure

The Company’s Management Structure, as of 31 December 2013, comprises of the Board of Directors and 3 committees namely Executive Committee, Audit Committee and Nomination and Remuneration Committee. The committees’ scopes of authorities as responsibilities are as follows:

(1) Board of Directors 1.1 Non-Executive Directors Non-Executive Directors mean outside directors who are not the Company’s executive or employees, nor executive directors, nor authorized signatory directors, independent from major s h a r e h o l d e r, e x e c u t i v e s a n d stakeholders, able to equally protect the benefit of all shareholders, and prevent conflict of interest between the Company and related parties. 1.2 Executive Directors Executive Directors mean directors who are involved in routine operation and management as well as are authorized signatory directors. The Board of Directors comprises the Chairman who is an Independent director, 6 non-executive independent directors and 5 executive directors. (Mr. Attasith Damrongrat resigned from independent director on date 14 February 2013 and replace with Dr. Satian Pooprasert started on date 15 February 2013, at the Board of d i re c t o r s m e e t i n g N o . 1 / 2 0 1 3 approved.

The number of 11 members of the Board of Directors is supposed to be appropriate, as well as the composition of 45 percent executive directors all are knowledgeable and can provide ind e p t h c o m m e n t i n re g a rd s t o entertainment industry as well as formulate strategic business plan, while non-executive independent directors shall be account for 55 percent. The non-executive directors shall have good knowledge and understanding of the overall entertainment industrial sector, finance and banking, asset management, auditing, law and others, which would encourage positive opinion expression in the Board of Directors’ meetings. The Board of Directors shall make decision for the best benefits of the Company. Authorized signatory director on the Company’s behalf is “Mr. Vicha Poolvaraluk Mrs. Paradee Poolvaraluk Mr. Verawat Ongvasith Mr. Thanakorn Puriwekin two in four jointly sign and combined with the Company Seal will be binding upon the Company”

Authorities of the Board of Directors 1. The Board may assign one or more directors to act on behalf. 2. The Board may authorize a director to sign together with the Company seal on behalf of the Company. 3. The Board may appoint or empower any person to conduct MAJOR’s business under its supervision with suitable issues and timings. Its appointment or empowerment may be withdrawn by the Board itself. 4. Directors, who might have interests on any matter, must have no right to vote on such matters. 5. The Board might approve the interim dividend payment if the Company has sufficient profit to do so. This payment should be reported to the next Shareholders’ Meeting. 6. Regarding to the Public Company Limited Act B.E 2535 indicated that some transactions, e.g., the consideration and approval of the Company’s Financial statements, the consideration of profit and capital reserve allocation, the election for directors’ replacement due to term expiration , the determination of remuneration,

GOVENANCES

meeting, the Board of Directors shall approve financial statement, schedule the annual general shareholders’ meeting and set the date of closing of the Company’s registration book, while the meetings in May, August and December are scheduled for reviewing and approving financial statements for the first, second and third quarters, and the December meeting is organized to consider budget for the following year. • Meeting agenda and related information were distributed to the directors 7 days prior to the meeting date to provide sufficient time for the directors to study and discuss important issues. • The Board of Directors’ Secretary and legal advisors attended the meeting and prepared record, questions and directors’ recommendation in the meeting for future reference and crosschecking. • The meetings were strictly held in compliance with the Company’s rules and regulations, and the Public Limited Company Act B.E. 2535. • In each meeting, the Chairman of the Board of Directors would conduct the meeting to last for 1-2 hours, which was sufficient for the management to present the matters for consideration and for the directors to carefully and equally discuss the important issues. The Chairman of the Board of Directors also encouraged attending directors to use their best consideration, ask questions and make recommendation on each agenda in every meeting.

As of December 31, 2013, MAJOR’s Board of Directors consisted of eleven directors as follow:

Name 1. Mr. Somchainuk Engtrakul 2. Mr. Vicha Poolvaraluk 3. Mr. Verawat Ongvasith 4. Mrs. Paradee Poolvaraluk 5. Mr. Thanakorn Puriwekin 6. Mr. Wichai Poolvaraluk 7. Mr. Chai Jroongtanapibarn 8. Mr. Wallop Tangtrongchitr 9. Mr. Naruenart Ratanakanok 10. Pol.Sub.Lt. Kriengsak Lohachala 11. Dr. Satian Pooprasert

% of Shareholding

Position Chaiman / Independent Director Director Director Director Director Director Independent Director / Chairman of Audit Committee Independent Director / Audit Committee Member Independent Director / Independent Director Director / Independent Director

34.49% 0.89% 3.43% 0.06% 0.44% 0.08% -

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

GOVENANCES

Responsibilities of the Board of Directors 1. The Board must conduct the business in compliance with laws, the Company’s Objectives, Articles of Association, and resolutions of the Shareholders’ Meetings with integrity and prudence for MAJOR’s best interests. 2. The Board must inform the Company immediately their direct or indirect interests regarding to the company’s contracts occurred during the fiscal year. Furthermore, they must inform their changes on their holding common shares or bond in the Company itself or the Affiliate Companies during the fiscal year. 3. The Board must arrange the meeting at least every three month with more than a half of total directors attending the meetings. The resolutions of the meetings are based on the majority votes. 4. The Board must organize the Annual General Shareholders’ Meeting within four months after the ending of the Company’s fiscal year. 5. All directors are restricted from conducting, investing, and being partner in the companies having the same business as MAJOR. In case that any director or parties with possible conflict of interest, as per announcements of the Securities and Exchange Commission (SEC) and/or the Stock Exchange of Thailand (SET), may have conflict of interest, the director(s) shall have no authority to approve the matter thus for the best b e n e fi t s o f t h e C o m p a n y a n d shareholders.

(2) Independent Directors 38

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

Criteria in selecting independent directors The Company selects independent directors by considering knowledge, experience, and profound understanding of related businesses, vision, sufficient time to perform duty and qualities as stated in the concerned government agencies’ announcements, regulations and rules. The Company would invite qualified persons to be its independent directors. The Company considers that the independent directors are able to exercise their knowledge and capability as well as provide opinions that are useful and appropriate to support the Company’s business operation.

(3) Audit Committee The meeting of the Board of Directors resolved the qualifications of the Audit Committee in accordance with and under the international standards as promulgated by SEC. Moreover, the authority scope of the Audit Committee was adjusted according to and under the SET notification. Deﬁnition Audit Committee members mean persons appointed by the Board of D i r e c t o r s o r t h e c o m p a n y ’s shareholders. The Audit committee members must be independent directors and not to be directors assigned by the Board of Directors to make decision on business operations of the company, parent companies, subsidiaries, joint venture, similar subsidiaries, or any juristic persons that may have conflict of interst. They must be neither the director of parent companies, subsidiaries, joint venture and similar subsidiaries. They must have qualifications and responsibilites as announced by the SEC and as per the SET regulations on the qualifications and work scope of Audit Committee. They shall also have sufficient knowledge and experience to review the reliability of the financial statements and perform other duties under their roles as Audit Committee members.

Independent directors shall perform their duty independently to ensure that the company’s politics, plans and operations are correct, appropriate and in line with the company’s objectives and rules as well as the shareholders’ meeting resolution and related laws in order to equally protect shareholders’ benefits. Furthermore, this definition of The Board of Directors considered independent directors has been revised that all the Audit Committee members so as to be more strictly than that are qualified according to the company’s defined by SEC. definition and comply with the SEC and SET regulations. The Audit Committee

At the end of 2013, Audit Committee all are Independent Directors, has passed the “Audit Committee Program” arranged by Institute of Directors. SET regulations. The Audit Committee meeting also considered that Mr. Chai Jroongtanapibarn has good knowledge and expertise in accounting and finance, as well as experience in auditing which is adequate to review the relaibility of the financial statements. Therefore, he was appointed as the Chairman of the Audit Committee, the biography has been disclosed in the Audit Committee member’s certificate of biography submitted to SET according to the new regulation. Responsibilities of Audit Committee 1. Ensure accurate and adequate financial reports. 2. Ensure appropriate and efficient internal control and internal audit system. 3. Review the Company’s operation to comply with the Securities and Exchange Act, the Stock Exchange of Thailand’s regulation or other related laws. 4. Consider, assort, appoint external auditors and consider the compensation for them. 5. Consider the disclosure of the Company’s information regarding to the connected transactions or conflicts of interest transaction to ensure the completeness and accuracy. 6. Prepare the corporate governance report, signed by the chairperson of the Audit Committee, and disclose in the Company’s Annual Report. 7. Perform other duties as assigned by the Board of Directors. 8. Be accountable to the Board of Directors as per roles and responsibilities entrusted and shall report to them the performance, recommendations and findings at least twice a year. In any case where any Audit Committee member or parties with possible conflict of interest, have conflict of interest which the company or its affiliates, the acquisition or sale of assets of listed companies and related transactions (if any), as per announcements of the SEC and/or SET, the Audit Committee shall report the matter to the Board of Directors and/ or the shareholders’ meeting for c o n s i d e r a t i o n a n d a p p ro v a l i n compliance with referred law and regulations.

Three members of Audit Committee are;

Name

Position

1.Chai Jroongtanapibarn Chairman of Audit Committee 2.Mr.Wallop Tangtrongchitr Audit Committee Member 3.Mr. Naruenart Ratanakanok Audit Committee Member

GOVENANCES

the appointment of external Auditors with their compensation, the sales and transfers of MAJOR’s partial or overall business, the purchase or transfer the ownership from other companies, the preparation, amendment or revocation of MAJOR’s leasing contracts and the empowerment to any person to conduct the business on behalf of MAJOR or the merger with other persons to share profits and losses, the Board must have the resolution from the shareholders’ meeting on such matters.

Deﬁnition Independent directors mean director that have specifications as follows: 1. Hold not exceeding 0.5% of total voting shares of the company, its subsidiaries, affiliates or other jurustic persons with possible conflict of interest, including the shares held by their related persons (under section 258 of securities and exchange act) 2. Neither involving in management, non controlling nor being authorized signatory person, nor being the company’s executive’ employees, salaried consultant, competent authorized person to control the company, its subsidiaries, affiliates or other jurustic persons and in the last 3 years before appointment. 3. Not being a person related by blood or legal registration such as father, mother, spouse, and child including spouse of the child to executives, major shareholders, controlling persons, or persons to be nominated as executive or controlling person of the company or its subsidiary and be independent from major shareholders executives and controlling persons. 4. Not having a business relationship with the company in occasional service and commercial business, in accordance with the SET’s requirement on the related transaction. 5. Not being a person who has been appointed as a representative of the company’s director, major shareholders or shareholders who are related to the major shareholders. 6. Not having any characteristics which make him/her incapable in expressing independent opinions. 7. Be capable in protecting all shareholders/ benefits equally and supervising in order to prohibits any conflict of interest between the company and related persons, and able to attend the meetings of the Board of directors in order to make a decision on significant issues.

(4) Executive Committee AT the end of 2013 Executive Committee of MAJOR consisted of four members;

Position

Name 1. Mr. Vicha Poolvaraluk 2. Mr. Verawat Ongvasith 3. Mrs. Paradee Poolvaraluk 4. Mr. Thanakorn Puriwekin

Responsibilities of Executive Committee 1. Operate and manage the Company’s business in accordance with laws, objectives and regulations of the Company as assigned by the Board of directors. 2. Operate and manage the Company’s business in accordance with policy and strategy set by the Board of directors. 3. Follow shareholders’ resolutions with honesty, ethics and care for the Company’s benefits. 4. Approve borrowings or lending from/to financial institutions including guarantee or make payment in ordinary business of the Company such as capital expenditures with in 60 million baht per each transaction. 5. Appoint or cancel staff of the Company whose title are lower than chief executive officer. 6. Prepare, propose and set business policy and strategy to the Board of directors. 7. Organize the Company’s structure and management including interviewing, employing, training and unemploying staff. 8. Set business plan, authority and budget as well as manage business according to policy and strategy proposed to the Board of directors. All related or conflict of interest transactions with executive directors in accordance with rules and regulations of Securities and Exchange Commission must not be voted by those executive directors who are related or have conflict of interests.

Chairman of Executive Committee Executive Committee Executive Committee Executive Committee

(5) Nomination and Remuneration Committee Deﬁnition • Nomination and Remuneration Committee The Company’s Nomination and Remuneration Committee means group of persons appointed by the Board of Directors as the Nomination and Remuneration Committee. The Nomination and Remuneration Committee Chairman shall be an independent director. At least three fourths of the Nomination and Remuneration Committee members shall be independent directors in order t o m a i n t a i n t r a n s p a re n c y a n d independence in performing their duty. The committee members shall have good knowledge and sufficient experience to nominate directors and top management of the Company, as well as to perform other tasks as the Nomination Committee. The Company’s Nomination and Remuneration Committee comprises the Committee Chairman who is an independent director, 2 independent directors and 1 executive director (information of the Nomination and Remuneration Committee members are under the Information about the Board of Directors and Management chapter). The Board of Directors considered that all members of the Nomination and Remuneration Committee have the qualifications ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

(7) Chief Executive Officer and Management Team

GOVENANCES

(6) Company secretary The Board of Directors appointed Ms. Krittiyanat Techasukthaworn to perform the duties of company secretary on giving the advices regarding laws and regulations which the Board of Directors shall be aware, to monitor the Board of Directors’ conduct as well as to coordinate and follow up the execution to be according to the Board of Directors’ resolution.

At the end of 2013, Management team of Major consisted 8 members;

Name 1. Mr. Vicha Poolvaraluk

2. Mr. Thanakorn Puriwekin 3. Mrs. Jinda Wantanahatai 4. Ms. Thitapat Issarapornpat 5. Mr. Kitikorn Poomsawang 6. Mr. Niti Pattanapakdee 7. Mr. Apichart Kongchai 8. Ms. Sudaporn Trongpanich

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

Position Chief Executive Officer Deputy - Chief Bowling Business Deputy - Chief Corporate Strategy & IR Chief Films Officer Chief Retails Officer Chief Finance Officer Chief Construction Officer Chief Media Officer Chief Cinema Officer Chief Technology Officer

7. To appoint advisors in various respects significant to the operations for the best benefits of the company. The CEO is empowered to appoint attorney(s) to the lawsuit or defend case related to the company. 8. To assign person(s) to perform task on his/her behalf as deemed appropriate. Such authorization can be terminated, changed or modified. 9. To report the company’s performance, progress of any projects and financial status to the executive committee and the Board of Directors. 10. To perform other works assigned by the executive committee or the Board of Directors. In case that the CEO or other persons with possible conflict of interest may have conflict of interest, the CEO shall have no right to approve such matter.

GOVENANCES

As of 31 December 2013, the Nomination and Remuneration Committee comprises

T h a i l a n d . T h e N o m i n a t i o n a n d 4 members with 3 years term. They are as follows: Remuneration Committee considered Name Position that Mr.Chai Jroongthanapibarn, an Chairman of the Nomination and Remuneration Committee independent director, is knowledgeable Mr. Chai Jroongtanapibarn Mr. Wallop Tangtrongchitr Nomination and Remuneration Committee Member and has experience in nomination and Nomination and Remuneration Committee Member remuneration of directors and top Mr. Naruenart Ratanakanok Mr. Verawat Ongvasith Nomination and Remuneration Committee Member management, and therefore appointed him the Committee Chairman. Responsibilities of the company Responsibilitites of the Chief Executive secretary Ofﬁcer Responsibilities on Nomination 1. To give basic advice to the Board of 1. To formulate business plan, investment Function Directors on related laws, regulations plan, and annual budget plan for approval 1. To formulate criteria and policy in and provisions in accordance with the by the executive committee and/or the nominating directors, members of good practices as well as follow up and Board of Directors. different committees and the Chief monitor the compliance to be accurate 2. To be responsible for the overall Executive Officer. and consistent. management and to deliberate all the 2. To consider and nominate appropriate 2. To arrange meetings of the Board of company’s policies to achieve the preset persons to be appointed as directors, Directors, committees and shareholders objectives and within the policy, business and members of different committees in accordance with the applicable laws, plan and budget plan approved by the and the Chief Executive Officer for the company’s regulations and practices, Board of Directors. approval by the Board of Directors and/ as well as complying wit the good 3. To be responsible an execution or or Shareholders’ Meeting. corporate governance policy of the payment according to the company’s 3. To report to the Board of Directors company and SET. authorization regulations or annual budget the results of the Nomination Committee 3. To monitor the disclosing of data and approved by the Board of Directors. meetings or other matters that the i n f o r m a t i o n t o t h e re s p o n s i b l e 4. To recruit, hire, transfer, reshuffle, Board of Directors should be informed. government agencies according to the suspend or terminate employment of any 4. To perform any tasks assigned by regulations and requiremetns of related executives or employees and to stipulate the Board of Directors. organizaitons, including communicating scope of roles and responsibilities and with shareholders and take care of them appropriate remuneration. An execution Responsibilities on Remuneration appropriately. of position equivalent to senior vie Function 4. To provide and keep the following president or higher shall be reported to 1. To set all rules and policies on documents; the Board of Directors, while an execution remunerations for the Board of a) Directors’ record of positions equivalent to the internal audit Directors, committees and Chief b) Invitation letter and minutes if the department executives shall be made with Executive Officer for the approval by Board of Directors meeting, as well as the Audit Committee’s consideration. the Board of Directors and/or, as the the company’s annual report. 5. To appoint respective authorized case may be, the shareholders’ meeting. c) Invitation letter to shareholders and persons to sign the company’s document 2. To set necessary and appropriate its mitnues. in the area of accounting, finance, annual remunerations for the Board of 5. To keep the conflict of interest report purchase, production, sale and general Directors, committees and the Chief provided by directors or executives. management as well as other important Executive Officer 6. To support the assignment given by document. 3. To report to the Board of Directors the Board of Directors. 6. To set, change, revise or cancel any the Remuneration Committee’s meeting 7. To operate others as specified by the rules, regulations, order, announcement, results or other matters the Board of Capital Market committee of SET. punishment measures and internal control Directors should be informed. systems for use as guideline for all 4. To perform any tasks assigned by employees and to enable the internal the Board of Directors. management is executed as per the company’s policies.

Remuneration of the Board of Directors The Board of Directors’ meeting no.1/2013 on 15 February 2013 resolved to approve the 2013 remunerations of no more than Baht 10,600,000 for the directors. Separate to annual compensation and meeting fee Baht 6,600,000 Noted that the Company pays an additional Baht 4,000,000 of special remuneration to director’s base on year performance.

Name

Position

Annual Remuneration (Baht)

Special Remuneration (Baht)

1. Mr. Somchainuk Engtrakul

Chairman of the Board /Independent Director

800,000

816,500

2. Mr. Vicha Poolvaraluk

Director

662,500

816,500

3. Mr. Verawat Ongvasith

Director

608,333

263,000

4. Mrs. Paradee Poolvaraluk

Director

583,334

263,000

5. Mr. Thanakorn Puriwekin

Director

583,333

263,000

500,000

263,000

6. Pol.Sub.Lt. Kriengsak Lohachala Independent Director Independent Director 7. Mr. Athasith Damrongrat

(Resigned effective date on 14 February 2013)

8. Mr. Wichai Poolvaraluk

Director

500,000

263,000

9. Mr. Chai Jroongtanapibarn

Independent Director Chairman of Audit Committee

687,500

263,000

Independent Director Audit Committee Member Nomination and Remuneration Committee Independent Director Audit Committee Member Nomination and Remuneration Committee Independent Director

587,500

263,000

587,500

263,000

500,000

Chairman of the Nomination and Remuneration Committee

10. Mr. Wallop Tangtrongchitr 11. Mr. Naruenart Ratanakanok 12. Dr. Satian Pooprasert

(Effective date on 15 February 2013 , approved by the Board of Director’s Meeting)

Employee stock option (ESOP-W4) was distributed among directors and managment as followed:

Other Remuneration Name In addition to ordinary remuneration, The Company also allocate Employee Stock Options 1. Mrs. Jinda Wantanahatai Program for the company directors and 2. Ms. Thitapat Issarapornpat employees (prior to the company’s initial public 3. Mr. Kitikorn Poomsawang offering) in the recognition of the directors and employees’ contribution to the company as well 4. Mr. Niti Pattanapakdee as motivation to work for the company in the 5. Mr. Apichart Kongchai long run. The details are shown in ESOP section. 6. Mr. Sudaporn Trongpanich

Position

Chief Retails Offfi icer Chief Finance Offfi icer Chief Construction Offfi icer Chief Media Offfi icer Chief Cinema Offfi icer Chief Technology Offfi icer Remuneration of MAJOR’s Management as of year 2013 Remuneration

Salary, Bonus and Provident Fund

Persons 7

Shares (Milion Baht)

0.35 0.35 0.35 0.25 0.35 0.25 Remuneration (Milion Baht)

21.09

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

GOVENANCES

The Board of directors stresses on the internal control system and internal audit in both management and operational levels. The board of directors and the management are directly responsible for providing and maintaining internal control system, and evaluating the sufficiency of the internal control. The internal control c o n s i s t s o f fi v e c o m p o n e n t s : organization and environment, risk management, operational control of management, information system and communication, and monitoring system. These components help determine business direction, develop information and communication to ensure well-informed decisions, divide authority and determine the financial approval for each management level, and set clear operational procedure for each line of work. These areas of control also determine ethical practice, set transaction process to prevent conflict of interest with any parties, e n s u re a p p ro p r i a t e a c c e s s t o information, and uphold the generally accepted accounting principles which support the work of independent auditors.

The internal control of Major examines financial transactions, operations and other functions which involve business activities. It helps make sure that all the activities are conducted in accordance with the efficient and determined directions. To secure the independence, the internal audit department directly reports to audit committee. In 2013, the audit committee had 10 meetings to consider the transactions and the sufficiency of internal control. It also had meetings with auditors to review and scrutinize the financial disclosure in the financial statements as well as considering annual audit plan. Control on Inside Information Major requires that its executives, member of the board and the employees adhere to the ethical use of inside information. The information, especially the trading of the company’s shares, must be kept confidential. The measures to prevent the use of inside information for personal gain are following: 42

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

1. All the executives are informed of their responsibility in reporting the shareholding of individual, spouse and underage children. Any change in shareholding has to be reported as required by Sections 59 and 275 of Securities and Exchange Act (B.E. 2535) 2. All executives who have access to significant inside information and the financial statement are notified by written communication that they should refrain from trading the shares of the companies for one month. They are also reminded that such information is confidential and cannot be revealed to any individuals before the financial statement or such information is publicized. Punitive measures for violators range from verbal warning to termination of employment. Labor Dispute

the board meeting 1/2014 on 13 February 2014. The evaluation of sufficiency for internal control took into account five elements i n c l u d i n g ( 1 ) o rg a n i z a t i o n a n d environment, (2) risk management, (3) operational control of management, (4) information system and communication, and (5) monitoring system. The board was of the view that the internal control was sufficient. In addition, the board viewed that the control on transaction with major shareholders and the management was ample, and encouraged consistent internal control to uphold good corporate governance. Assessment of Sufﬁciency for Internal Control The board scrutinizes the sufficiency for 2013 internal control system with details as following:

1. Organization and Environment Currently, Major does not have any The committee sets clear and labor dispute. measurable target for operation. For example, it requires annual operation Personnel Development Policy plan and three-year plan which contributes to the achievement of Major has internal trainings to improve vision and mission. After the approval, skills of staff. The training involves on- these plans will be translated into the-job training and coaching by senior action plan for the execution of each staff in each line of work. Major also business unit. The management then encourages its employees to attend c o n s t a n t l y m o n i t o r s t h e p l a n external seminars and has decent implementation. If problems arise or remuneration to ensure long-term work any situation is likely to derail the plan, commitment. the management will adapt the plan and seek the board approval before Dividend Policy implementing the adaption. The board reviews the goal and Major has policy to pay dividend to the business plan to make sure that the shareholders. In case of sufficient cash management has prudently conducted flow and there is no need for additional the business based on the past and investment, Major will pay dividend of present performance, vision and 40% of net profit. However, the mission of the company, overall national company board may set a different economic data, and direction set by dividend level in respond to the the board. The board also reviews the circumstance of the company, the efficiency of personnel and the situation of the company’s liquidity, the appropriateness of remuneration economic condition and market relative to economic conditions. outlook. The company establishes departments which are suitable for Internal Control operation. A review on the company structure is made to determine if it is The internal audit department did the respondent to the change of business assessment of the sufficiency for 2013 environment. For operational efficiency, internal control on 7 February 2014. the head office is structured into The assessment was approved by the various departments to ensure strong audit committee and was forwarded to support organization-wide.

The company has clear procedure in approving the transaction with major shareholders, and executive committee members. The board and the audit committee have a clear ethical policy for this. The conduct of any transaction is always made with awareness of corporate long-term benefit. Any transaction with possible conflict of interest must be reported to the audit committee for review. The company ensures compliance of obligation to all parties concerned. The company monitors the operation of its subsidiaries. If the company invests in any subsidiary companies, it will send a representative into the board of the subsidiary. Likewise, the subsidiary sends a representative in the debtor committee of the company. The company conducts its business in accordance with the law. A legal department is established to follow up 2. Risk Management change in laws and regulations, and provide internal legal advice. The company regularly conducts risk The company never violates the law. management to establish external and It supports lawful practice. internal risk factors which may impact the company. All risks are properly 4. I n f o r m a t i o n S y s t e m a n d handled and closely followed up. Communication The company carefully analyzes the situation which may lead to risks. This The company always prepares serves as early warning which will be documents and information in advance brought to attention of the board for risk of the board’s meetings. Additional management. documents may be provided to the The company has the policy to board on the meeting day. control risks and maintain follow-up Invitation letters, meeting documents measures to reduce risk for the company. and report of previous meeting are Executive meetings are held monthly always sent out to the participants prior or when emergency case arises. There to the meeting date. are also channels to communicate Meeting minutes are made to organization-wide to urge staff to capture essential details, suggestion, observe risk management measures. concerns and opposition (if any). The Risks are also prioritized for systematic minutes may be amended and will be response. approved in the subsequent meeting. Follow-up mechanism is established The documents for accounting to make sure the compliance of risk records are well kept. management plan with indicators for The company uses appropriate relevant risks. This will be reported to accounting methods under the the board every month. generally accepted accounting principles. It is also audited by certified 3. Operation Control of Management public accountants. The company has written instruction to set approving authority for each management level and all employees are informed of this authority. This authority is regularly reviewed to reflect business operation. The company delegate (1) approval function, (2) account recording function, and (3) property custodianship with clear workflow. This is to ensure mutual control.

performance index. This not only ensures the goal achievement and reduces risk but also allows the company to adjust itself in respond to the changing environment. The company establishes the audit committee and the audit department. This is to enhance internal control and compliance to the regulations. This department gives advice to other departments by encouraging self control. It reports to the management and the audit committee. Though the management directs the internal control, the audit department is independent and reports to the audit committee. It provides guidance to ensures compliance to internal control system. The work of internal audit is also reported to the high-level management. The audit department reports to the board and the audit committee every month. Any default which needs urgent attention will be reported to the audit committee immediately for prompt action. The audit department regularly follows up the default and report to the board and the audit committee. The management is responsible for reporting to the board of its decision which may have significant impacts on the reputation and financial situation of the company. This includes any issues related to malfeasance and violation of law.

GOVENANCES

Internal Control

The company has code of conduct as part of good corporate governance. The code of conduct is announced company-wide. Especially, it reminds the management and the employees to refrain from conflict of interest with any trading partners. Punitive measures are also clearly written. The company has operation manual and business process flow for financial transactions, procurement activities and administration. This is to prevent malpractice and corruption. The announcements, regulations and instructions are always updated to keep pace with the change in business practice. As a service provider, the company takes into consideration the fairness to all business partners for common benefits. All partners are treated equally, responsibly with transparency.

5. Monitoring System The company sets its annual goal and seeks approval from the board. The management regularly reports the progress to the board. Each business unit is evaluated on daily, monthly and yearly basis in various platforms, such as key performance index. This not only ensures the goal achievement and ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

GOVENANCES

Personnel As of December 31, 2013, MAJOR re c o rd e d t h e n u m b e r o f 2 , 9 0 1 employees, to be well-prepared for the continual growth on Cinema & Concession Business, Bowling & Karaoke Business, Advertising Business and Rental Business. In year 2013, MAJOR opened 12 new cineplexes at to cover the full spectrum of customer segments.

*Exclude temporary staffs

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

Staff Remunerations Staff remunerations, consisting of salary, overtime payment, bonus and provident fund, totaled to Baht 649,778,125 in 2013. Recruitment and Motivation MAJOR places a focus on internal recruitment and then gives additional trainings since promotion from within will not only get staff acquainted with the companyâ&#x20AC;&#x2122;s operations and help create morale in working, but also attract them to stay longer with the company, who provides them with the comparable compensation with other companies in the same industry. In addition, MAJOR has provided nice working environment that would increase staffs enthusiasm.

GOVENANCES

Human Resources

Related Transactions Human Resource Management Policy Human Resource Development MAJOR arranges for the staff both on-the-job training and functional training. For on-the-job training, senior staffs give advices and recommendations all through the whole process to junior staffs. With respect to functional trainings, various in-house training courses will be arranged by both internal and external lecturers or sending staff to attend outside seminar programs such as those organized consistently by The Management and Psychology Institute (MPI). MAJOR arranges other Soft Skills such as Leadership skill, Selling & negotiation technique, Marketing skill, Team work development etc. In addition, MAJOR has co-operated with Stock Exchange of Thailand (SET), which is a long-term program with an objective to promote and serve students who need to utilize their free time by working to get experiences. In this connection, MAJOR offers the students a chance to practice in some position considered to be appropriate with their maturity, skill, and spare time of each student.

Person/Juristic person who may % of Ownership have conďŹ&#x201A;ffilict of interest interests Siam Future Development Plc.

Associate with 23.72% holding

Type of transactions

2013 Amount (million baht)

Major details/conditions

Revenue 1. Dividend income 3.27 2. Other income 1.42 Expense 1. Rental, service and utilities fee 27.73 2. Other expense 0.97 Trade account receivable 1.64 Other receivable 26.47 Deposits received 5.52 Other payable 2.90

To rent rental space to operate cinema and bowling business in Chachoengsao, Thonglor and Esplanade branches, approved by audit committee to be comparable to market price. This is a normal business transaction. This is a normal business transaction. This is a normal business transaction. This is a normal business transaction. This is a normal business transaction.

1.46 0.47

This is a normal business transaction. and interest 8% per year This is a normal business transaction.

37.55

Property management fee which is a normal business transaction. Approved by Audit Committee to be comparable to market price.

Ratchayothin Avenue Co., Ltd.

Associates with 50% direct holding and 11.86% indirect holding through SF

Expense 1. Interest expense 2. Other expenses

Major Cineplex Lifestyle Leasehold Property Fund

Associates with 33% holding

Revenue 1. Management fee income

The transaction is from investment. This is a normal business transaction.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

GOVENANCES

2013 Amount (million baht)

Major details/conditions

2. Utilities fee income 24.76 Utilities and service fee which is a normal business transaction. Approved by Audit Committee to be comparable to market price. 3. Dividend income 105.63 The transaction is from investment. Expense 1. Rental and service 136.57 Rental space to operate cinema and bowling businesses under MJLF area. This is a normal business transaction, approved by Audit Committee to be comparable to market price. 2. Advertising expense 6.18 This is a normal business transaction. 3. Other expense 1.30 This is a normal business transaction. Trade account receivable 1.51 This is a normal business transaction. Other receivable 8.86 This is a normal business transaction. Deposit 3.46 This is a normal business transaction. Trade account payable 0.97 This is a normal business transaction. Other payable 0.07 This is a normal business transaction. Advance receipt from property 28.10 This is a normal business transaction. lease (included in other non-current liabilities) Deposit receipt from property 120.00 This is a normal business transaction. lease (included in other non-current liabilities) Finance lease liabilities 20.65 This is a normal business transaction. (included in long-term borrowings from ffi ifi nancial institutions) Thai Ticketmajor Co., Ltd.

Associates with Revenue 40.00% holding 1. Dividend income 2. Other income Expense Other expense Other receivable Other payable

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

20.00 4.73

The transaction is from investment. This is a normal business transaction.

This is a normal business transaction. This is a normal business transaction. Money from selling ticket and payback next month

0.60 2.39 1.81

Person/Juristic person who may % of Ownership Type of have conﬂfﬂlict of interest transactions interests

2013 Amount (million baht)

Major details/conditions

PVR BluO Joint ventures entertainment Co., with 49.00% Ltd. holding

Other receivable

3.98

This is a normal business transaction

Major Kantana Broadcasting Co., Ltd.

Joint ventures with 41.11% indirect holding through MPIC (MAJOR’s subsidiary company)

Revenue 1. Management fee income 2. Rental and service income 3. Advertising income 4. Dividend income Trade account receivable Other receivable Other payable

0.48 1.69 0.19 6.75 0.32 0.04 0.42

This is a normal business transation. This is a normal business transation. This is a normal business transation. The transaction is from investment. This is a normal business transation. This is a normal business transation. This is a normal business transation.

K Arena Co., Ltd.

Joint ventures with 50.00% holding

Revenue Management fee income Trade account receivable Other receivable Other payable

1.51 0.56 0.37 1.81

This is a normal business transaction. This is a normal business transaction. This is a normal business transaction. This is a normal business transaction.

McThai Co., Ltd.

100% holding by Revenue Mr. Vicha 1. Rental, service 32.31 Poolvaraluk and utilities fee income 2. Advertising income 4.39 3. Interest income 0.14 4. Other income 1.10 Trade account receivable 2.12 Other receivable 0.05 Finance lease receivable 1.77 Trade account payable 0.06 Advance receipt for 15.58 rental and service (included in other non-current liabilities)

GOVENANCES

Person/Juristic Type of person who may % of Ownership have conflffllflict of interest transactions interests

Rental space of MAJOR Group at Ratchayothin, Sukhumvit, Rangsit, Samrong, and Metropolis branches. This is normal transaction and approved by audit committee to be comparable to market price. This is a normal business transaction. This is a normal business transaction. This is a normal business transaction. This is a normal business transaction. This is a normal business transaction. This is a normal business transaction. This is a normal business transaction. This is a normal business transaction.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

GOVENANCES

2013 Amount (million baht)

Deposit receipt from property lease (included in other non-current liabilities)

5.24

23.40

Bt 1.95 million per month started from 1 January 2012 – 31 December 2016. Approved by Audit Committee. The agreed price as stipulated in the agreements and is no more than 1% of revenue with corperative less than compensation for Managing Director in listed companies.

4.80

400,000 baht a month for manage pinklao branch owned by Mr.Vicha’s father. This is normal transaction and approved by audit committee to be comparable to market price.

18.51 0.10

1.8 million baht a month covered 8 theatres for 15 years started from 1 February 2002 to 31 January 2017. The agreed price was comparable for those of EGV cinema at Central Pinklao and was approved by Audit Committee This is a normal business transaction.

Well Ad Co., Ltd.

Holding by Mr. Vicha Poolvaraluk 70% and Mrs. Paradee Poolvaraluk 25%

Management fee

Well Cineplex Co., Ltd.

Holding by Mr. Vicha Poolvaraluk’s father 20%, Mr. Vicha Poolvaraluk’s mother 20% and Mr. Vicha Poolvaraluk 10%

Revenue 1.Management fee income Expense Equipment rental Deposit

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

Major details/conditions

This is a normal business transaction.

Person/Juristic person who may % of Ownership have conﬂfﬂlict of interest interests

2013 Amount (million baht)

Type of transactions

GOVENANCES

Person/Juristic person who may % of Ownership Type of have conflflffllflict of interest transactions interests

Major details/conditions

Well Entertainment Part, Ltd.

Holding by Mr. Vicha Poolvaraluk’s father 50%, Mr. Vicha Poolvaraluk’s mother 10%

Expense 1. Rental, service and utilities fee 2. Other expense Other receivable Deposits received Trade account payable Other payable

26.22 0.20 0.02 0.10 0.62 0.02

Rental spaces and service charges amount to 800 baht a month a sq.m. for operate cinema business at pinklao branch for 15 years started from 1 February 2002 to 31 January 2017, The agreed price is comparable for those of EGV cinema at Central Pinklao and was approved by Audit Committee. This is a normal business transaction. This is a normal business transaction. This is a normal business transaction. This is a normal business transaction. This is a normal business transaction.

Petch Pinklao Co., Ltd.

Holding by Mr. Vicha Poolvaraluk 99.99%

Expense 1. Rental, service and utilities fee 2. Advertising expense 3. Other expense Trade account payable Other payable

Paid for the right to rent MAJOR Cineplex pinklao branch. The agreed price was comparable Central Pinklao’s project and was approved by Audit Committee. This is a normal business transaction. This is a normal business transaction. This is a normal business transaction. This is a normal business transaction.

30.37 0.30 0.62 0.33 1.02

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

GOVENANCES

Ratchayothin Avenue Management Co., Ltd

SF Development Co., Ltd.

PVR Limited

11.86% Indirect holding through Siam Future Development Plc. and 50.00% Indirect holding through Ratchayothin Avenue Co., Ltd.

11.62% Indirect holding through Siam Future Development Plc. Related with 6.41 % holding

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

Type of transactions

2013 Amount (million baht)

Revenue Management fee income Expense 1.Utilities expense 2. interest expense Other receivable Other payable Expense 1. Rental, service and utilities fee 2. Other expense Other payable Revenue Dividend income

Major details/conditions

0.81

22,500 baht a month for manage ratchayothin branch. This is normal transaction and approved by audit committee to be comparable to market price .

1.43 0.65 9.32 0.11

This transaction was for rental space with purpose of operating the company’s offi ffi ice at Ratchayothin avenue. Approved by Audit Committee to be comparable to market price. This is a normal business transaction and interest 8% per year This is a normal business transaction. This is a normal business transaction.

Person/Juristic person who may % of Ownership have conflflffllflict of interest interests

1.30

This is a normal business transaction. This is a normal business transaction. The transaction is from investment

2013 Amount (million baht)

Major details/conditions

Well Place Construction Co., Ltd.

Other payable Holding by Mr. Vicha Poolvaraluk 50% and Mrs. Paradee Poolvaraluk 45%

We Fitness Co., Ltd.

Holding by Mrs. Paradee Poolvaraluk 99.99%

Revenue 1.Management fee income 2. Rental, service 3.Other income Trade account receivable Other receivable Other payable

0.61 Management fees charged to income as salary and commission. This is normal transaction and approved by audit committee to be comparable to market price . 2.05 To rent space and service in the building of the and utilities fee MAJOR Group. 0.48 This is a normal business transaction. 1.07 This is a normal business transaction. 0.22 This is a normal business transaction. 0.97 This is a normal business transaction.

Siam Future Property Co., Ltd

23.72% Indirect holding through Siam Future Development Plc.

Expense 1. Rental, service and utilities fee 2. Other expense Other receivable Other payable

11.99 1.00 16.56 1.21

35.19 This is a normal business transaction. 1.49 4.23

Type of transactions

GOVENANCES

Person/Juristic person who may % of Ownership have confﬂlﬂict of interest interests

0.12 This is a normal business transaction.

To rent rental space and service to operate cinema and bowling business in Esplanade branch. This is normal transaction and approved by audit committee to be comparable to market price . This is a normal business transaction. This is a normal business transaction. This is a normal business transaction.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

GOVENANCES

Employee Stock Option Program

Major Shareholders

According to the Annual General Meeting of the Sharehold for the Year 2013, the shreholders approved the company issued and offered grants of warrants to employees as follow:

(ESOP-W4) Type Term Amount Offering method Offering price Exercise Ratio Exercise price Exercise period

Percentage

VICHA POOLVARALUK

306,140,100

34.49%

STATE STREET BANK AND TRUST COMPANY

80,643,700

9.09%

THAI NDVR COMPANY LIMITED

79,683,770

8.98%

STATE STREET BANK EUROPE LIMITED

50,527,684

5.69%

THE BANK OF NEW YORK (NOMINEES) LIMITED

36,055,293

4.06%

PARADEE POOLVARALUK

30,470,436

3.43%

THE BANK OF NEW YORK MELLON

28,088,900

3.16%

HSBC (SINGAPORE) NOMINEES PTE LTD

20,067,600

2.26%

MORGAN STANLEY & CO. INTERNATIONAL PLC

16,543,300

1.86%

PERSHING LLC

10,497,629

1.18%

Shareholder

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

indicate hold and non-transferable 5 year from the issuing date 8,690,000 units allot to 108 directors and employees without offering price (-0- baht a unit) 1 warrant for 1 common share 15.44 baht per share last working day of March, June, September and December till to expiry on which the last date is 9 April 2017, and start exercise date is 30 June 2014

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

GOVENANCES

Corporate Social and Environment Responsibility

Major Cineplex Group in partnership with PTT Group held “Let’s Go Green Together” to showcase “Friendly Pop”, the 100% biodegradable popcorn bucket. This green innovation a i m s a t r a i s i n g a w a re n e s s o f environment among new generations and reducing waste problems. Major Cineplex Group is the first to introduce Bio Polybutylene Succinate (BioPBS), aka biodegradable plastic which is made from crops such as sugarcane and tapioca. BioPBS is safety for food contact application and is resistant to fat and oil in food, making it a perfect container of popcorn.

Fanfare for Kids on National Children Day 2013 with 25,556 Gift Cards from Major Cineplex Group Major Cineplex Group brought the joy to kids with its “Major Kids Day Pass” in celebration of National Children Day 2013. The 25,556 cards were presented to Her Excellency Prime Minister Yingluck Shinawatra who would distribute them to the children attending National Children Day at Government House. The Major Kids Day Pass offered one movie seat (on 12 January – 12 February 2013), one popcorn set, one bowling game and one-hour ice-skate round at all Major entertainment outlets nationwide including Major Cineplex, EGV, Esplanade Cineplex, Paragon Cineplex, Paradise Cineplex, Mega Cineplex, Major Bowl Hit, Blu-O Rhythm and Bowl, and Sub-Zero Ice-skate. Celebration of National Mother Plus, all Major outlets also held Major Day. Free Movies for Moms! Cineplex KIDS Day 2012. The event Major Cineplex Group celebrated gave kids of age under 12 free movie tickets, bowling games and free ice- National Mother Day with free tickets skate rounds on 12-13 January 2013 for moviegoers taking mothers to any movies whole day in every subsidiary (before 2 p.m.) (normal seats and 2-D digital system) under its six brands: Major Cineplex, EGV, Paragon Cineplex, Esplanade Cineplex, Paradise Cineplex and Mega Cineplex. All mothers would receive 60% discount coupon for health examination at Bangkok Hospital. Daughters and sons with M-Generation card membership would also enjoy free popcorn (46 ounce) with their moms.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

GOVENANCES

Friendly Pop: 100% Biodegradable Popcorn Bucket of Environmentally Friendly Major

Indeed, this innovation is in accordance with business practice of Major Cineplex Group which always strives to deliver environmentally friendly products and service to our clients in a bid to encourage them to take care of our environments and consume our resources sensibly. Less waste from using BioPBS would also raise living quality. The Friendly Pop is available for three years from June 2013 at eight main branches of Major Cineplex Group including Major Cineplex Ratchayothin, SukhumvitEkkamai, Pinklao, Central Pinklao, Bang Kapi, Rama 2, Rama 3 and Paragon Cineplex.

Free Movies for Dads on National Father Day Major Cineplex Group joined all Thais in celebrating National Father Day on 5 December with free seats for fathers (normal seats and 2-D digital system) in all branches under its six brands: Major Cineplex, EGV, Paragon Cineplex, Esplanade Cineplex, Paradise Cineplex and Mega Cineplex. For M-Generation card holder, free popcorn (46 ounce) was free and daddies would also join the draw to get free heath examination package from Bangkok Hospital.

Friendly Pop is the biodegradable popcorn bucket which is 100% decomposable in 180 days. Unlike paper utensils coated with polyethylene (PE) which leaves plastic, BioPBS is able to entirely decompose into carbon dioxide (CO2), soil and water. The CO2 would then become part of photosynthesis of plants. This is the example of our attempt to add value to our products and services, and bring environmentally-friendly innovation to our consumers.

and schools, because these institutions were the key element in cultivating our kids and our future. So, it organized “Share Love with Schools Project”. It chose Municipal School 1, Ban Nongsak-ngiaw. The school was under the municipality of Huay Yai Sub-district in Bang Lamung District of Chonburi Province. The school buildings and facilities had been in dilapidated conditions and lacked the budget for renovation. Vicha Poolvaraluk, Chief Executive Officer (CEO) of Major Cineplex Group led the executives and more than 250 staff to help renovate. The school’s building and hall were repainted. Roof leakage as well as broken fences was fixed, and trees were planted around the school to improve the landscape for a better learning environment. Plus, teaching equipment for students of classes from kindergarten level to Grade 6 was also donated to the school.

Municipal School 1, Ban Nong-sakngiaw was established in 1949 by Ajarn Jaroon Phokaew with support of the community. It has 333 students from kindergarten level to grade 6 with 19 teachers plus a school director.

Students enjoyed the lunch feast plus

Share Love with Schools: ice-cream and popcorn, and returned Renovation of School for their gratitude to their brothers and Students sisters of Major Cineplex Group with two As a socially responsible corporate, Major Cineplex Group always lent its hand for the betterment of our society with a particular focus on education

performances. The event ended with the handover of renovated buildings to Mr. Pairat Traisuphashoke, mayor of Huay Yai Municipality and Ms. Naraporn Salak, deputy director of the school

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

GOVENANCES

FINANCIALS GOVENANCES

Management Discussion & Analysis Movie Content 6% Rental and services Business 6% Bowling and Karaoke Business 6%

The Company overview Major Care Foundation for the Disabled and Underprivileged Children: We gave people smile Thai society at present has been plagued with underprivileged children and senior citizens. The kids lack the access to education and essential developments. With the awareness of these problems, Vicha Poolvaraluk, Chief Executive Officer (CEO) of Major Cineplex Group would like to address these issues and make our society a better one. So, he established Major Care Foundation to open the world and create the smile. The foundation aims at improving living conditions for disabled and underprivileged children, senior citizens and lending other supports for public interest. It focuses on providing education, especially the extracurricular ones to develop, inspire and paint the smile on the needy so that they would grow into quality adults of the society. Esplanade Cineplex Takes Kids to 3D Animation Car 2

Purpose of the Foundation 1. Help and improve living conditions of underprivileged children in the society so that they would become quality people of the society in the future. 2. Develop and enhance living conditions of the elderly so that they can become self-reliant and live a happy life. 3. Cooperate with government agencies and non-governmental organizations (NGOs), private sector and other charitable organizations to conduct activities for public interest.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

4. Not get involved with any political consistently provide DVDs in order to encourage the extracurricular activities activities. in the schools. Movies are part of edutainment learning as they are a fun Objective medium of instruction. Major Care Foundation is registered After the opening ceremony, the as a charitable organization on 3 July 2012. It has an opening ceremony in foundation organized “the Open the 12 January 2013. In the first three years, World and Bring Smiles” activities. As it plans to achieve the following of December 2013, the foundation brought 21,655 children for movies and objectives: - It will give free movie tickets as well gave 21,655 stationery kits. It also a s s t a t i o n e r y k i t s t o 1 0 0 , 0 0 0 brought 5,396 senior citizens for underprivileged children with 6-8 years movies in Bangkok, Chiang Rai, Chiang M a i , Ta k , K a m p h a e n g P h e t , of age. - It will give free movie tickets to Phetchabun, Phitsanulok, Nakhon 15,000 senior citizens with age above Sawan, Ubon Ratchathani, Udon Thani, 60. The tickets will be available in all Nong Bua Lam Phu, Sakon Nakhon, branches of Major Cineplex Group in N a k h o n R a t c h a s i m a , S a r a b u r i , Bangkok and other provinces. Tickets Ayutthaya, Chanthaburi, Chon Buri, may be distributed in 200-300 seats. Chachoengsao, Nakhon Pathom, The tickets giveaway does not include Nakhon Si Thammarat and Hat Yai and Samui. the accompanying caretakers. - It will provide 20 scholarships a year. Each scholarship is worth 10,000 baht. Each scholarship applicant is required to submit the foundation an essay reflecting their inspiration after watching any movie. - It will build a movie corner for 10 schools in need each year and

The company operates in 6 main businesses: cinema, recreation (including bowling, karaoke and ice skating), rental and services, advertising media and Movie content. Expanding 12 branches in 2013, since managing the asset effectively, there were 479 screens with 114,750 seats, 397 bowling lanes, 256 karaoke rooms, 5 ice skate rinks with 50,403 square meter rental area at year end. For the Movie content Group, which has been strategically restructured and expanded to best synergies with the core cinema business in 2013, M Pictures Entertainment Public Company Limited (MPIC) has purchased the o rd i n a r y s h a re f ro m s u b s i d i a r y companies and joint venture companies which are; 1) The Company had made additional investment in T1 of 40,000 shares totaling Baht 4,000,000. The acquisition resulted in the change in shareholding percentage from 80.00% to 90.00%. T h e d i ff e re n c e f ro m a d d i t i o n a l investment of Baht 5,212,261 was recognized as “Change in parents’ ownership interest in subsidiaries” in the consolidated shareholders’ equity. 2) The Company acquired ordinary shares in Major Kantana Broadcasting Company Limited (M Channel) from Major Cineplex Group Public Company Limited (Major). The consideration was made by way of exchange of the Company’s newly issued ordinary shares for M Channel’s ordinary shares at the rate of 5.30 Company’s ordinary shares for 1 ordinary share of M Channel. The total exchanged ordinary shares represented 9,539,978 shares at Baht 2.62 per share, totaling Baht 24,994,743. Investment in M Channel

Advertising Business 14%

Cinema Business 53%

Concession Business 15%

is classified as joint ventured company of the Group. The Group holds M Channel’s ordinary shares 1,799,996 shares, representing 44.99% of the paid-up share capital. The equity method of accounting is applied to this investment in the consolidated financial information. As the result, the restructuring process has more completely as started off from putting MVD Co., Ltd., a home entertainment distributor of DVD, VCD and Blu-ray discs, under M Pictures Entertainment Public Company Limited Group. The intention was to create an integrated films distribution company when combining with MPIC’S existing subsidiary, M Pictures Company Limited, an upstream theatrical distributor. In an effort to be a total lifestyle entertainment company, the company has also invested in Siam Future Development Public Company Limited. – a lifestyle neighborhood shopping mall developer and Thai Ticket Major Company Limited an “Online Real-time” ticketing services for performances and exhibitions. Nevertheless, the company also invested in Major Cineplex Lifestyle Leasehold Property Fund also known as (“MJLF”) in June 2007. MJLF was founded in order to gather fund to invest in real estate and property in Major Cineplex Ratchayothin and

Major Cineplex Rangsit. The total value was 2,300 million baht. Which the company held Fund - share at 33%. Consequently, MJLF has invested by renting Suzuki Avenue Ratchayothin at the end of 2009 with the capital registration and the paid capital was increased to 3,300 million baht. The company will continually invest to retain 33% shares. In 2013, the company has set up the Major Holding International Company Limited (“MHD”) as the holding company with the capital registration was 1 million baht. The company held the 99.96% of the total value of share. Later, the company bought 99.99% of share of DPM which is a company of renting and service of projectors and equipment, totally value at 5 million baht to gain more business and increase the value for the company in the future. For International investment, the company invests in PVR Limited., which be listed company in the Stock Exchange of India, PVR is a leading and premium Multiplex Cinema Exhibition company in India. PVR pioneered the multiplex revolution in India by publishing the first multiplex cinema in 1997. Currently, its geographically diverse cinema circuit in India consists of 360 cinemas with 85 branches. The business relationship with PVR began in 2008 when setting up a joint venture company, PVR bluO Entertainment Limited with PVR. While adding a new lifestyle entertainment to ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

FINANCIALS

2013 Performance At year-end 2013, the company’s revenue was 7,711 million baht, increasing 745 million baht or 11% from year 2012. The revenue and grow proportion are as the following below: The revenue growth was mainly from cinema business. The company increased the revenue from success movies which made more than 200 million baht, mostly came from “Pee Mak Prakanong” and international movies which are Iron man 3 and Fast and Furious 6. And also more MGEN customers of 2.2 million of the company which brought the customers back to use the services faster. In addition, the company has gained more revenue from selling more advertising. The total costs and expenses of selling and administrative of the Company at year-end 2013, is 6,790 million Baht comparing with the year 2012 which the Company had total costs and expenses of selling and administrative at the amount of 6,384 million Baht. The cause is increasing of cost of cinema and selling of concession business accordance with the total of increase revenues, and cinema branches expansion. However, the proportion of costs and selling and administrative expenses to the total revenues of the year 2013, There are decreased to 3.60% by the effectiveness of the Company’s administration. (the proportion in 2013 is 88.06% compare with the year 2012 which has the proportion at 91.66%) At the end of year 2013, the Company had other operating income at the amount of 340 million Baht, it was decreased 93 million Baht or 21%. The significant cause is the Company received the compensation from Insurance Company.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

In summary, the profit at year-end 2013 was 1,052 million baht or 1.18 earnings per share which was 201 million baht or 24% higher than year2012.

Financial position as of year-end Asset As of year-end 2013, the company’s total assets valued 13,630 million baht, increasing 2,299 million baht or 20% from year 2012. The main reason was from receiving the Property, Plant and equipment around 1,364.19 million baht or 25.6% from 12 branches expansion, the increase of investment of the Joint Ve n t u re C o m p a n y ( S i a m f u t u re development) totally 435.29 million baht and the increase of the investment of the available for sale securities from increasing market price of PVR limited 448 million baht. Liability As of year-end 2013, the company’s total liabilities valued 7,530 million baht, increasing 2,161 million baht or 40% from year 2012. The main reason was s h o r t - t e r m l o a n f ro m fi n a n c i a l institutions and other payable for braches expansion. Cash As of year-end 2013, the company’s total cash and cash equivalent valued 496 million baht, increasing 15 million baht from year 2012. The reason was from 1,045 million baht generated from operating cash flow, used in 1,180 million baht in investing activities and received 160 million baht from financing activities mainly from short-term loan of the company. Source of funds As of year-end 2013, the company’s total liabilities valued 7,530 million baht, increasing 2,161 million baht or 40% from prior year. The current liabilities valued 4,352 million baht and Noncurrent liabilities valued 3,178 million baht. Also, the company issued 3-year debentures for 800 million baht. The maturity date would be on 15 May 2016 and the fixed interest rate was paid at 3.54% per annum. As of year-end 2013, the bank overdraft and short-term loan from financial institutions cost 2,240 million baht.

Liquidity and Profitability As of year-end 2013, the company’s liquidity was 0.49% which was decrease from year 2012 at 0.17%. The main reason was increase in current liabilities from short-term loan for using as a circulating fund of the company. About profitability ratio, though the company had higher revenue, the company still took the higher operating c o s t . H o w e v e r, t h e e f f e c t i v e administration has led to the better cost. Therefore, there was a slight increase in profitability ratio from 11.35% to 13.28%.

Report of the Audit Committee

FINANCIALS

PVR’s business model, PVR bluO was to i n t ro d u c e a n e w e x p e r i e n c e o f entertainment bowling to the Indian patrons. The entertainment bowling concept has been very well received in New Delhi, the first location of PVR bluO. Thus, the full rollout plan to other major cities in India is underway. This joint venture activity provides the company with a great opputunity to unlock potential growth in the Indian market.

The Audit Committee of Major Cineplex Group Public Company Limited is comprised of three independent directors. The Audit Committee is empowered by the Board of Directors to examine all matters related to the financial status of the Company, and its internal and external audits. The company pursues and promotes good corporate governance by actively creating awareness and providing advice to management on sound risk management and internal control practices For the fiscal year 2013, the Audit Committee held 10 meetings. In such meetings, the Audit Committee met external auditor to review the Company’s consolidated financial statement every quarter-end and provided assessments and recommendations to the Board of Directors and also met independently with the management and the internal and external auditors of the Company, conducted reviews and evaluations of accounting policies, the procedures relative to the accounting policies, the internal control assessment, and the audit plan. Where weaknesses were identified in internal controls, corrective action plan has been taken to eliminate or reduce the associated risks. Accordingly, in our opinion, the internal control of Major Cineplex Group Public Company Limited operated effectively throughout the year to ensure that the Company’s assets were safeguarded, proper accounting records were maintained, and resources were utilized efficiently. The Audit Committee has recommended to the Board of Directors that Mr. Pisit Thangtanagul CPA License no. 4095, Mr. Chanchai Chaiprasit CPA License no. 3760 and Mr. Boonlert Kamolchanokkul CPA License no. 5339 of PricewaterhouseCoopers ABAS Limited, be re-appointed as the Company’s auditor for the financial year ending December 31, 2013. The re-appointment of the auditor and acceptance of its fee will be subjected to the approval of the shareholders at the Annual General Meeting to be held on April 3, 2014

Chai Jroongtanapibarn Chairman of Audit Committee February 7th, 2014

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

FINANCIALS

Responsibility Statement of the Board of Director to the Financial Statement The Board of directors is responsible for the Company and consolidated financial statements as well as financial information as publicized in annual report. The financial statements are prepared according to generally accepted accounting standard in Thailand which applied appropriate policy, consistent practice with careful consideration and best estimation as well as enough disclosure of information in the notes to financial statement. Moreover, the Board of directors has provided and maintained efficient internal control system to ensure that accounting records are accurate, 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 part of management team to take responsibility of financial statements, internal control system and to ensure and opine over related and conflict of interests transactions that are accurate and complete. The audit committee’s opinion has been shown 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 ensure that the Company and consolidated financial statements as of December 31, 2013 are reasonably trusted.

FINANCIALS

Auditor’s Report

To the Shareholders of Major Cineplex Group Public Company Limited

I have audited the accompanying consolidated and company financial statements of Major Cineplex Group Public Company Limited and its subsidiaries and of Major Cineplex Group Public Company Limited, which comprise the consolidated and company statements of financial position as at 31 December 2013, and the related consolidated and company income statements, and the related consolidated and company statements of comprehensive income, changes in shareholders’ equity and cash flows for the year then ended, and a summary of significant accounting policies and other notes. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion

(Mr. Somjainuk Engtrakul) Chairman of the Board

(Mr. Vicha Poolvaraluk) Chairman

In my opinion, the consolidated and company financial statements referred to above present fairly, in all material respects, the consolidated and company financial position of Major Cineplex Group Public Company Limited and its subsidiaries and of Major Cineplex Group Public Company Limited as at 31 December 2013, and consolidated and company results of operations and cash flows for the year then ended in accordance with Thai Financial Reporting Standards.

Pisit Thangtanagul Certified Public Accountant (Thailand) No. 4095 PricewaterhouseCoopers ABAS Ltd. Bangkok 13 February 2014

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

FINANCIALS

Statements of Financial Position

Major Cineplex Group Public Company Limited

Statements of Financial Position

Statements of Financial Position (Cont’d)

As at 31 December 2013

Unit: Baht Consolidated

Consolidated

Restated

Company

Restated

31 December

1 January

31 December

1 January

2013

2012

2013

2012

Notes

Unit: Baht

Company

Assets

Restated Notes

Restated

31 December

1 January

31 December

1 January

2013

2012

2013

2012

Liabilities and shareholders’ equity Current liabilities

Current assets

Bank overdrafts and short-term Cash and cash equivalents

Short-term investment

495,681,689

480,732,922

460,800,247

394,325,295

331,372,894

358,312,884

50,595,828

2,238,928,172

801,468,051

473,121,537

1,545,703,160

200,000,000

Trade account and other payables

borrowings from financial institutions

1,736,382,154

1,527,442,595

1,260,879,916

1,218,515,977

945,118,841

908,306,016 1,540,048,220

Trade account and other receivables

1,159,047,792

1,453,975,069

1,090,004,044

648,402,246

850,623,961

782,886,695

Current portion of long-term borrowings

203,846,510

880,790,505

1,546,393,362

40,264,935

840,297,642

Short-term loans to related parties

526,664,219

462,148,376

475,369,892

Short-term loans from related parties

25,000,000

610,514,424

467,777,630

65,607,579

Inventories, net

174,908,045

132,240,700

153,850,831

58,359,623

38,110,958

33,255,926

37,982,207

126,244,198

82,854,356

17,103,698

93,895,593

52,916,986

61,140,461

38,426,052

17,799,723

109,413,805

137,820,724

142,112,152

38,715,401

36,591,961

42,836,904

Current portion of prepaid rents

34,153,853

34,653,397

34,657,257

9,472,507

Other current assets

211,989,966

162,839,694

184,660,948

60,130,726

26,826,609

36,317,087

4,351,552,848

3,473,766,073

3,505,361,323

3,470,817,595

2,583,681,667

2,609,715,705

2,136,921,806

2,302,867,834

1,992,368,878

1,697,354,616

1,718,555,305

1,746,210,819 960,859,937

Films under production

Accrued income tax Other current liabilities

Total current liabilities Non-current liabilities

Total current assets

Long-term borrowings from financial institutions

Non-current assets Available-for-sale investment

Restricted cash Finance lease receivables Account receivable - long-term contract

2,351,861,649

1,169,696,005

967,003,723

1,881,137,363

1,121,402,298

Deferred income tax liabilities

333,773,783

251,779,749

248,416,330

91,600,342

12,655,147

Employee benefit obligations

22,919,045

18,869,662

16,532,500

16,006,045

10,431,741

9,191,596

470,322,788

454,847,501

442,522,322

86,926,910

60,438,414

20,252,900

820,571,703

372,406,147

177,457,846

820,571,703

372,406,147

177,457,846

4,453,282

7,932,206

5,989,137

Other non-current liabilities

12,727,726

12,782,128

12,381,352

Total non-current liabilities

3,178,877,265

1,895,192,917

1,674,474,875

2,075,670,660

1,204,927,600

990,304,433

20,132,597

38,788,773

20,132,597

38,788,773 Total liabilities

7,530,430,113

5,368,958,990

5,179,836,198

5,546,488,255

3,788,609,267

3,600,020,138

896,266,347

904,500,990

906,000,000

896,266,347

904,500,990

906,000,000

Investment in subsidiaries, net

2,741,449,932

2,351,200,286

1,911,916,647

Investment in associates

2,212,868,495

1,714,929,163

1,789,228,485

2,168,239,563

1,716,422,344

1,792,353,449

Interest in joint ventures

255,757,329

235,204,047

110,151,257

237,490,575

216,793,035

103,119,735

Long-term loans to related parties

3,197,578

6,612,057

10,695,183

755,968,861

1,006,612,936

1,274,419,154

Property, plant and equipment, net

6,696,317,791

5,332,125,834

5,180,795,378

3,360,543,354

2,432,848,855

2,268,640,894

Goodwill, net

287,065,399

342,112,936

Shareholders’ equity Share capital

Authorised share capital Ordinary shares, 896,266,347 shares

Intangible assets, net

368,597,032

366,907,289

424,759,957

50,444,706

49,475,279

30,062,430

(31 December 2012: 904,500,900 shares,

Deferred income tax assets

316,412

253,259

19,922,563

19,728,004

1 January 2012: 906,000,000 shares)

Long-term prepaid rents

487,283,860

520,938,169

555,324,895

159,403,371

168,875,879

178,348,386

Other non-current assets

343,679,936

150,173,271

156,765,502

230,986,061

118,111,686

124,468,205

Total non-current assets

11,492,836,543

9,027,461,566

8,824,373,264

10,525,098,126

8,452,879,044

7,919,303,523

Total assets

13,629,758,349

11,330,329,400

10,816,742,142

12,222,452,742

10,171,434,349

9,665,514,342

at par value of Baht 1 each Issued and fully paid-up share capital Ordinary shares, 887,576,343 shares (31 December 2012: 887,576,343 shares, 1 January 2012: 881,897,219 shares) at paid-up of Baht 1 each Share premium

Warrants

887,576,343

881,897,219

887,576,343

881,897,219

3,919,499,372

3,839,673,605

3,919,499,372

3,839,673,605

21,441,823

9,191,064

20,989,867

8,900,000

Retained earnings Appropriated Legal reserve

Unappropriated Other components of shareholders’ equity Equity attributable to owners of the parent Non-controlling interest Director ______________________________________

Director ______________________________________

Total shareholders’ equity Total liabilities and shareholders’ equity

90,600,000

822,278,811

640,387,269

483,262,178

1,058,809,437

1,136,292,344

1,068,726,448

361,581,619

326,970,948

184,596,932

698,489,468

339,957,023

184,596,932

6,102,977,968

5,874,224,996

5,480,029,934

6,675,964,487

6,382,825,082

6,065,494,204

(3,649,732)

87,145,414

156,876,010

6,099,328,236

5,961,370,410

5,636,905,944

6,675,964,487

6,382,825,082

6,065,494,204

13,629,758,349

11,330,329,400

10,816,742,142

12,222,452,742

10,171,434,349

9,665,514,342

The accompanying notes on pages 12 to 78 are an integral part of these financial statements.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

FINANCIALS

3 Major Cineplex Group Public Company Limited

FINANCIALS

Statements of Comprehensive Income

Income Statements

Major Cineplex Group Public Company Limited Statements Comprehensive Income For the yearofended 31 December 2013

ForCineplex the year Group ended Public 31 December 2013 Major Company Limited Income Statements For the year ended 31 December 2013

For the year ended 31 December 2013

Unit: Baht Unit: Baht Notes Revenues

Consolidated 2013

Company 2013

2012

Consolidated Notes Profit for the year

Services income Sales

6,075,747,301 1,634,790,045

5,224,404,943 1,740,856,065

3,572,849,381 916,626,744

2,948,657,598 714,902,804

Total revenues

7,710,537,346

6,965,261,008

4,489,476,125

3,663,560,402

Other comprehensive income

for the year, net of income tax

Costs Cost of providing services Cost of sales

(4,115,908,837) (895,139,818)

(3,603,853,287) (1,113,573,416)

(2,667,962,354) (280,506,546)

(2,215,768,554) (246,943,842)

Total costs

(5,011,048,655)

(4,717,426,703)

(2,948,468,900)

(2,462,712,396)

Profit before income tax Income tax

2,699,488,691 339,734,506 (527,167,834) (1,251,543,821) (149,013,467)

2,247,834,305 432,695,044 (451,926,049) (1,214,965,106) (133,087,371)

1,541,007,225 509,788,146 (189,941,115) (776,010,555) (121,822,387)

1,200,848,006 628,473,270 (158,040,640) (627,030,029) (102,839,750)

189,156,607

176,292,034

1,300,654,682 (276,313,524)

1,056,842,857 (266,136,565)

963,021,314 (170,768,275)

941,410,857 (184,950,501)

1,024,341,158

790,706,292

792,253,039

756,460,356

1,051,627,488 (27,286,330)

846,019,550 (55,313,258)

792,253,039 -

756,460,356 -

1,024,341,158

790,706,292

792,253,039

756,460,356

1.18 1.18

0.96 0.95

0.89 0.89

0.86 0.85

Profit for the year

2012

2013

2012

1,024,341,158

790,706,292

792,253,039

756,460,356

358,532,445

155,360,091

358,532,445

155,360,091

358,532,445

155,360,091

358,532,445

155,360,091

946,066,383 1,150,785,484

911,820,447

1,410,159,933 1,001,379,641 1,150,785,484

911,820,447

1,382,873,603

Total comprehensive income for the year

Total comprehensive income attributable to: Shareholders of the parent

2013

2012

Other comprehensive income (expense): Gain on remeasuring of available-for-sale investments

Gross profit Other operating income Selling expenses Administrative expenses Finance costs Share of profit of investments in associates and joint ventures

Company

Non-controlling interest

(27,286,330) 1,382,873,603

(55,313,258)

946,066,383 1,150,785,484

911,820,447

Attributable profit to: Shareholders of the parent Non-controlling interest

Earnings per share Basic earnings per share Diluted earnings per share

The accompanying notes on pages 12 to 78 are an integral part of these financial statements. 6

The accompanying notes on pages 12 to 78 are an integral part of these financial statements.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC. ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC. 67

887,576,343

Total comprehensive income for the period Closing balance as at 31 December 2013

90,600,000

822,278,811

1,051,627,488

(869,735,946)

640,387,269

(410,559,720)

1,050,946,989

640,387,269

846,019,550

(688,894,459)

483,262,178

(445,437,568)

928,699,746

288,424,625

(336,907,849)

Major Cineplex Group Public Company Limited

3,919,499,372

887,576,343

Total comprehensive income for the period Closing balance as at 31 December 2013

The accompanying notes on pages 12 to 78 are an integral part of these financial statements.

3,919,499,372

Dividends payment (Note 34)

887,576,343

3,919,499,372

Warrants

Changes in equity for period

Opening balance after adjustment

accounting policy (Note 6)

Retrospective adjustment from change in

887,576,343

3,919,499,372

887,576,343 Closing balance as at 31 December 2012

Opening balance as at 1 January 2013

Total comprehensive income for the period

79,825,767

3,839,673,605

5,679,124

881,897,219

3,839,673,605

881,897,219

20,989,867

12,089,867

8,900,000

90,600,000

1,058,809,437

792,253,039

(869,735,946)

1,136,292,344

227,952

1,136,064,392

1,136,292,344

756,460,356

(688,894,459)

1,068,726,447

(6,199,769)

1,074,926,216

288,424,625

(Note 25)

premium

share capital

Share Treasury share

361,581,619

358,532,445

Total

6,102,977,968

1,410,159,933

(869,735,946)

(323,921,774)

12,250,759

5,874,224,996

(423,442,819)

6,297,667,815

5,874,224,996

1,001,379,641

(688,894,459)

(12,986,075)

9,191,064

85,504,891

5,480,029,934

(419,509,795)

5,899,539,729

the parent

owners of

410,064,843

358,532,445

51,532,398

(12,883,099)

64,415,497

51,532,398

155,360,091

(103,827,693)

25,927,773

(129,755,466)

investment

for-sale

Available-

income (expense)

Other comprehensive

Non-

(3,649,732)

(27,286,330)

(63,508,816)

87,145,414

(55,313,258)

(10,870,674)

(3,546,664)

156,876,010

interest

controlling

698,489,468

358,532,445

339,957,023

(12,883,099)

352,840,122

339,957,023

155,360,091

184,596,932

25,927,773

158,669,159

of equity

component

Total other

Other components of shareholders’ equity

410,064,843

reserve Unappropriated

358,532,445

paid-up

Legal

326,970,948

(12,883,099)

339,854,047

326,970,948

155,360,091

(12,986,075)

184,596,932

25,927,773

158,669,159

of equity

component

other

Total

- (323,921,774)

51,532,398

(12,883,099)

64,415,497

51,532,398

155,360,091

(103,827,693)

25,927,773

(129,755,466)

investment

for-sale

Available-

income (expense)

premiumWarrants

Retained earnings Appropriated

Company

Other comprehensive

Issued and

Dividends payment (Note 34)

Increase during the period

Changes in equity for period

Opening balance after adjustment

accounting policy (Note 6)

Retrospective adjustment from change in

Opening balance as at 1 January 2012

For the year ended 31 December 2013

Statements of Changes Shareholders’ Equity For the year endedin 31 December 2013

(323,921,774)

(12,986,075)

subsidiaries

interest in

ownership

parent’s

Change in

Statements of Changes in Shareholder’s Equity

The accompanying notes on pages 12 to 78 are an integral part of these financial statements.

3,919,499,372 21,441,823

interest (Note 13)

9,191,064

- 12,250,759

3,919,499,372

887,576,343

Dividends payment (Note 34)

purchasing shares from non-controlling

Addition of investment in subsidiary by

Warrants

Changes in equity for period

Opening balance after adjustment

accounting policy (Note 6)

3,919,499,372

887,576,343

Opening balance as at 1 January 2013 -

3,919,499,372

887,576,343

Closing balance as at 31 December 2012

Retrospective adjustment from change in

Total comprehensive income for the period

79,825,767

3,839,673,605

5,679,124

881,897,219

3,839,673,605

(Note 25)

881,897,219

reserve Unappropriated

premium

share capital

Warrants

Treasury share

Legal

paid-up

Share premium -

Appropriated

Retained earnings

Other components of shareholders’ equity

Attributable to owners of the parent

Consolidated

Issued and

Dividends payment (Note 34)

interest

purchasing shares from non-controlling

Addition of investment in subsidiary by

Warrants

Increase during the period

Changes in equity for period

Opening balance after adjustment

accounting policy (Note 6)

Retrospective adjustment from change in

Opening balance as at 1 January 2012

For the year ended 31 December 2013

Statements of Changes in Shareholders’ Equity

For the year ended 31 December 2013

Statements of Changes in Shareholder’s Equity

Major Cineplex Group Public Company Limited

6,675,964,487

1,150,785,484

(869,735,946)

12,089,867

6,382,825,082

(12,655,147)

6,395,480,229

6,382,825,082

911,820,447

(688,894,459)

94,404,891

6,065,494,203

19,728,004

6,045,766,199

equity

shareholders’

Total

Unit: Baht

6,099,328,236

1,382,873,603

(869,735,946)

(387,430,590)

12,250,759

5,961,370,410

(423,442,819)

6,384,813,229

5,961,370,410

946,066,383

(699,765,133)

(12,986,075)

9,191,064

81,958,227

5,636,905,944

(419,509,795)

6,056,415,739

equity

shareholders’

Total

Unit: Baht

FINANCIALS

Major Cineplex Group Public Company Limited Statements of Cash Flows (Cont’d) For 31 31 December 20132013 For the theyear yearended ended December

Statements of Cash Flows For the year ended 31 December 2013 For the year ended 31 December 2013

Unit: Baht

Unit: Baht Notes Cash flows from operating activities Cash generated from operations Interest paid Income tax paid

Net cash generated from operating activities Cash flows from investing activities Proceeds from sales of short-term investment Short-term loans made to related parties Proceeds from settlements of short-term loans to related parties Long-term loans made to related parties Proceeds from settlements of long-term loans to related parties Loans to third parties Proceeds from loans to third parties Payments for investment in subsidiaries Proceeds from shares reduction of subsidiaries Payments for investment in associates Proceeds from disposals of investment in associates Payments for investment in joint ventures Purchases of property, plant and equipment Proceeds from disposals of property, plant and equipment Payments for intangible assets Dividends received from subsidiaries and associates Dividends received from long-term investments Interest received Net cash used in investing activities

Consolidated 2013

2012

Company 2013

1,572,529,521 (134,429,805) (403,309,017)

1,800,445,566 (127,680,454) (238,524,872)

667,076,369 (121,246,475) (258,248,087)

816,801,754 (96,188,720) (150,399,615)

1,034,790,699

1,434,240,240

287,581,807

570,213,419

36 36 36

(910,750)

1,800,000 (1,419,976)

1,019,534,385 (410,886,000)

1,583,453,389 (1,193,551)

4,305,230 (701,475) 8,193,239 (526,839,775)

5,633,351 (7,800,000) 21,856,480 (33,025,890)

607,771,482 (701,475) 8,193,239 (389,429,888) 10,619,784 (526,839,775)

260,999,769 (7,800,000) 11,356,480 (486,532,739) 44,249,100 (33,025,890)

313,027,450 (38,697,500) (696,683,925)

220,048,357 (113,673,300) (465,447,643)

313,027,450 (38,697,500) (518,092,328)

220,048,357 (113,673,300) (275,528,309)

3,216,905 (419,739,809)

21,998,224 (488,884,390)

1,197,584 (17,043,978)

7,236,240 (29,500,709)

135,658,232 1,296,070 38,112,236

121,345,342 2,779,970 20,337,355

135,658,232 1,296,070 87,066,008

159,529,571 2,779,970 112,639,926

(1,179,763,872)

(643,029,369)

(801,376,938)

(57,631,809)

13 13

Notes

2012

13 13 13

FINANCIALS

Statements of Cash Flows (Cont’d)

Major Cineplex Group Public Limited Statements ofCompany Cash Flows

53,222,751 53,222,751 (1,800,000) (1,084,050,228) (1,565,892,864)

Cash flows from financing activities Increase (decrease) in restricted cash Proceeds from short-term loans from related parties Repayments of short-term loans from related parties Proceeds from bank overdrafts Proceeds from short-term loans from financial institutions Repayments of short-term loans from financial institutions Repayments of finance lease liabilities Proceeds from long-term borrowings Repayments of long-term borrowings Proceeds from issuance of debenture Repayments of debentures Proceeds from exercised warrants Dividends paid to shareholders Payments for investment purchased from non-controlling interest Dividends paid to non-controlling interest

Consolidated 2013

2012

Company 2013

2012

3,478,924

(1,943,069)

25,000,000

1,459,015,999

1,238,610,875

23,750,120

- (1,316,279,205) 10,146,514 703,160

(832,779,833) -

4,024,010,000

21 21 21 21 25 34

2,659,500,000

3,535,000,000

2,250,000,000

(2,610,300,000) (2,341,300,000) (2,190,000,000) (2,050,000,000) (64,151,805) (4,379,976) (1,995,006) (1,995,006) 123,990,000 91,800,000 (108,727,293) (54,340,616) (40,000,000) (40,000,000) 800,000,000 1,000,000,000 800,000,000 1,000,000,000 (800,000,000) (1,500,000,000) (800,000,000) (1,500,000,000) 85,504,891 85,504,891 (869,697,416) (688,862,527) (869,697,416) (688,862,527) (387,430,590) -

(16,532,739) (10,870,674)

Net cash received (used in) from financing activities

159,921,940

(771,278,196)

576,747,532

(539,521,600)

Net increase (decrease) in cash and cash equivalents Opening balance of cash and cash equivalents

14,948,767 480,732,922

19,932,675 460,800,247

62,952,401 331,372,894

(26,939,990) 358,312,884

495,681,689

480,732,922

394,325,295

331,372,894

Closing balance of cash and cash equivalents

13 28

The accompanying notes on pages 12 to 78 are an integral part of these financial statements.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

Major Cineplex Group Public Company Limited Statements of Cash Flows (Cont’d) For the year ended 31 December 2013

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

FINANCIALS

For the year ended 31 December 2013

Unit: Baht Consolidated 2013

FINANCIALS

Notes to the Consolidated and Company Financial Statements

Statements of Cash Flows (Cont’d)

Major Cineplex Group Public Company Limited Notes to the Consolidated and Company Financial Statements For the year ended 31 December 2013 For the years ended 31 December 2013 1

General information

Company 2012

2013

2012

Major Cineplex Group Public Company Limited (“the Company”) is a public company incorporated and resident in Thailand. The address of the Company’s registered office is as follows:

Non-cash transactions

1839,1839/1-6 Phaholyothin road, Ladyao, Jatujak, Bangkok 10900. Significant non-cash transactions are as follows: Investment in property, plant and equipment, not yet paid Purchases of intangible assets, not yet paid Purchases of equipment under finance leases Disposal of property, plant and equipment, not yet received Disposal of investment in associates, not yet received Dividends paid, not yet paid Offsetting long-term loans to related parties with loans from related parties Offsetting amount due from related parties with long-term loan to related parties Offsetting long-term loans to related parties with trade accounts payable related parties Purchase of investment in subsidiary by share swap Addition of warrants

The Company is listed on the Stock Exchange of Thailand. For reporting purposes, the Company and its subsidiaries are referred to as “the Group”. 889,456,439 6,787,680 474,745,715

305,407,282 35,823,055 2,026,486

736,968,597 -

150,629,857 1,094,000

29,055,423

1,348,031

38,530

141,111,020 31,932

38,530

141,111,020 31,932

130,250

20,000

10,000,000

12,250,759

9,191,064

43,758,594 43,439,541

12,089,867

8,900,000

The Group principally engages in cinema operations and entertainment services. The principal business operations of the Group are summarised as follows: • • • • •

Cinema operations Advertising and media services Bowling and Karaoke services Rental and services Movie content

These consolidated and company financial statements were authorised for issue by the Board of Directors on 13 February 2014.

Accounting policies

The principal accounting policies adopted in the preparation of these consolidated and company financial statements are set out below:

2.1

Basis of preparation The consolidated and company financial statements have been prepared in accordance with Thai generally accepted accounting principles under the Accounting Act B.E. 2543, being those Thai Accounting Standards issued under the Accounting Professions Act B.E. 2547, and the financial reporting requirements of the Securities and Exchange Commission under the Securities and Exchange Act B.E. 2535. The consolidated and company financial statements have been prepared under the historical cost convention except as disclosed in the accounting policies below. The preparation of financial statements in conformity with Thai generally accepted accounting principles requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4. An English version of the consolidated and company financial statements have been prepared from the statutory financial statements that are in the Thai language. In the event of a conflict or a difference in interpretation between the two languages, the Thai language statutory financial statements shall prevail.

The accompanying notes on pages 12 to 78 are an integral part of these financial statements. 11

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP12 PLC.

FINANCIALS

Notes to the Consolidated and Company Financial Statements For the year ended 31 December 2013

Accounting policies (Cont’d)

2.2

Revised accounting standards, revised financial reporting standards, and related interpretations

2.2

Revised accounting standards, revised financial reporting standards, and related interpretations (Cont’d)

New/revised accounting standards which are effective on 1 January 2013 and are relevant and have an impact to the Group are:

Revised accounting standards, revised financial reporting standards, and related interpretations that are not yet effective and have not been early adopted by the Group: (Cont’d)

TAS 12 TAS 21 (Revised 2009) TFRS 8

Income Taxes The Effects of Changes in Foreign Exchange Rates Operating Segments

TAS 12 requires tax expenses to be recognised for current and deferred tax. New accounting policy of income taxes is provided in Note 2.18 and the significant impact to the Company are described in Note 6. TAS 21 (Revised 2009) requires the Group to determine the functional currency which is the currency of the primary economic environment in which the entity operates. The Group assessed and concluded that Thai Baht is the Group’s functional currency. As a consequence, applying TAS 21 (Revised 2009) has no impact to assets, liabilities and retained earnings. New accounting policy is described in Note 2.4. TFRS 8 requires the operating segment to be described in the same manner as internal reporting used by the chief operating decision-maker. New accounting policy is described in Note 2.22. The impact to the Group in applying this standard is only on a disclosure.

Revised accounting standards, revised financial reporting standards, and related interpretations that are not yet effective and have not been early adopted by the Group:

FINANCIALS

Notes to the Consolidated and Company Financial Statements For the year ended 31 December 2013

Revised accounting standards which are effective for the periods beginning on or after 1 January 2014 (Cont’d) TAS 12 (revised 2012) amends an exception to the existing principle for the measurement of deferred tax assets or liabilities on investment property measured at fair value. TAS 12 currently requires an entity to measure the deferred tax relating to an asset depending on whether the entity expects to recover the carrying amount of the asset through use or sale. This amendment therefore adds the rebuttable presumption that the carrying amount of an investment property measured at fair value is entirely recovered through sale. As the result of the amendment, TSIC 21 - Income tax - recovery of revalued non-depreciable assets is incorporated in to TAS 12 (revised 2012). This standard has no impact to the Group. TAS 17 (revised 2012) deletes the guidance for a lease of land with an indefinite useful life to be classified as an operating lease. The standard has been amended to clarify that when a lease includes both land and buildings, classification as a finance or operating lease is performed separately in accordance with TAS 17’s general principles. The management is currently assessing the impact of applying this standard. TAS 18 (revised 2012) removes the appendix to TAS 18. This standard has no impact to the Group.

Revised accounting standards which are effective for the periods beginning on or after 1 January 2014 TAS 1 (Revised 2012) TAS 7 (Revised 2012) TAS 12 (Revised 2012) TAS 17 (Revised 2012) TAS 18 (Revised 2012) TAS 19 (Revised 2012) TAS 21 (Revised 2012) TAS 24 (Revised 2012) TAS 28 (Revised 2012) TAS 31 (Revised 2012) TAS 34 (Revised 2012) TAS 38 (Revised 2012) TFRS 2 (Revised 2012) TFRS 3 (Revised 2012) TFRS 5 (Revised 2012) TFRS 8 (Revised 2012)

TAS 19 (revised 2012) deletes the transition provisions of the current TAS 19. This standard has no impact to the Group.

Presentation of Financial Statements Statement of Cash Flows Income Taxes Leases Revenue Employee Benefits The Effects of Changes in Foreign Exchange Rates Related Party Disclosures Investments in Associates Interest in Joint Ventures Interim Financial Reporting Intangible Assets Share-based Payment Business Combinations Non-current Assets Held for Sale and Discontinued Operations Operating Segments

TAS 21 (revised 2012) clarifies the method of recording cumulative amount of the exchange different relating to disposal or partial disposal of a foreign operation. This matter should be adjusted prospectively effective for the period begins on or after 1 January 2014. This standard has no impact to the Group. TAS 24 (revised 2012) removes the requirement for government-related entities to disclose details of all transactions with the government and other government-related entities. It also clarifies and simplifies the definition of related parties. This standard has no impact to the Group. TAS 28 (revised 2012) clarifies that when an entity moves from an equity accounting to cost accounting in the separate financial statements, the standard requires this to be adjusted retrospectively. An entity losses significant influence, the remaining interest of investment should be valued at fair value. This matter should be adjusted prospectively effectively for the period begins on or after 1 Jan 2014. This standard has no impact to the Group.

TAS 1 (revised 2012) clarifies that conversion features that are at the holder’s discretion do not impact the classification of the liability component of the convertible instrument. TAS 1 also explains that, for each component of equity, an entity may present the breakdown of other comprehensive income either in the statement of changes in equity or in the notes to the financial statements. This standard has no impact to the Group.

TAS 31 (revised 2012) clarifies that when an entity moves from an equity accounting to cost accounting in the separate financial statements, the standard requires this to be adjusted retrospectively. An entity losses of joint control in its interest in joint control, the remaining interest of investment should be valued at fair value. This matter should be adjusted prospectively effectively for the period begins on or after 1 Jan 2014. This standard has no impact to the Group.

TAS 7 (revised 2012) clarifies that only expenditures that result in a recognised asset in the statement of financial position are eligible for classification as investing activities. This standard has no impact to the Group.

TAS 34 (revised 2012) emphasises the existing disclosure principles for significant event and transactions. Additional requirements cover disclosure of changes in fair value measurements (if significant), and the need to update relevant information from the most recent annual report. The management is currently assessing the impact of applying this standard.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

For the year ended 31 December 2013

Accounting policies (Cont’d) Revised accounting standards, revised financial reporting standards, and related interpretations (Cont’d)

2.2

Revised accounting standards, revised financial reporting standards, and related interpretations (Cont’d)

Revised accounting standards, revised financial reporting standards, and related interpretations that are not yet effective and have not been early adopted by the Group: (Cont’d)

Revised accounting standards which are effective for the periods beginning on or after 1 January 2014 (Cont’d) TAS 38 (revised 2012) clarifies that an intangible asset acquired in a business combination might be separable, but only together with a related contract, identifiable asset or liability. In such cases, intangible asset is recognised separately from goodwill, but together with related item. Intangible assets are recognised as a single asset provided the individual assets have similar useful lives. This standard has no impact to the Group. TFRS 2 (revised 2012) expands the scope to cover classification and accounting of both cash-settled and equity-settled share-based payment transactions in group situation. The management is currently assessing the impact of applying this standard. TFRS 3 (revised 2012) amends the measurement required for non-controlling interests. The choice of measuring non-controlling interests at fair value or at the proportionate share of the acquiree’s net assets applies only to instruments that represent present ownership interests and entitle their holders to a proportionate share of net assets in the event of liquidation. All other component of non-controlling interests is measured at fair value unless another measurement basis is required by TFRS. The application guidance in TFRS 3 (revised 2012) also applies to all share-based payment transactions that are part of a business combination, including unreplaced and voluntarily replaced share-based payment awards. The management is currently assessing the impact of applying this standard. TFRS 5 (revised 2012) specifies the disclosures required for assets held for sale and discontinued operations. Disclosures in other standards do not apply, unless those TFRS requires. The management is currently assessing the impact of applying this standard. TFRS 8 (revised 2012) clarifies that an entity is required to disclose a measure of segment assets only if the measure is regularly reported to the chief operating decision-maker. The management is currently assessing the impact of applying this standard.

Changes in Existing Decommissioning, Restoration and Similar Liabilities Determining Whether an Arrangement Contains a Lease Rights to Interests Arising from Decommissioning, Restoration and Environmental Rehabilitation Funds Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies Interim Financial Reporting and Impairment Service Concession Arrangements Customer Loyalty Programmes Distributions of Non-cash Assets to Owners Transfers of Assets from Customers Operating Leases - Incentives Evaluating the Substance of Transactions in the Legal Form of a Lease Service Concession Arrangements: Disclosure Intangible Assets - Web Site Costs

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

b) Interpretations of Thai Financial Reporting Interpretations Committee (TFRIC) and Thai Standard Interpretations Committee (TSIC) which are effective for the periods beginning on or after 1 January 2014 (Cont’d) TFRIC 1 provides guidance on accounting for changes in the measurement of an existing decommissioning, restoration and similar liability that results from changes in estimated timing or amount of the outflow of resources embodying economic benefits required to settle the obligation, or a change in the discount rate. This interpretation has no impact to the Group. TFRIC 4 requires the determination of whether an arrangement is or contains a lease to be based on the substance of the arrangement. It requires an assessment of whether: (a) fulfilment of the arrangement is dependent on the use of a specific asset or assets (the asset); and (b) the arrangement conveys a right to use the asset. This interpretation has no impact to the Group. TFRIC 5 provide guidance on accounting in the financial statements of a contributor for interests arising from decommissioning funds that the assets are administered separately and a contributor’s right to access the assets is restricted. This interpretation is not relevant to the Group’s operations. TFRIC 7 provides guidance on how to apply the requirements of TAS 29, Financial Reporting in Hyperinflationary Economics, in a reporting period in which an entity identifies the existence of hyperinflation in the economy of its functional currency, when the economy was not hyperinflationary in the prior period. This interpretation is not relevant to the Group’s operations. TFRIC 10 prohibits reversal of an impairment losses recognised in a previous interim period in respect of goodwill. This interpretation has no impact to the Group. TFRIC 12 applies to public-to-private service concession arrangements whereby a private sector operator participates in the development, financing, operation and maintenance of infrastructure for public sector services. This interpretation is not relevant to the Group’s operations. TFRIC 13 clarifies that where goods or services are sold together with a customer loyalty incentive (for example, loyalty points or free products), the arrangement is a multiple-element arrangement, and the consideration received or receivable from the customer is allocated between the components of the arrangement using fair values. The management is currently assessing the impact of applying this interpretation. TFRIC 17 provides guidance on accounting for the distributions of non-cash assets to owners acting in their capacity as owners. The interpretation addresses the issues on the dividend payable recognition and measurement and the accounting for any difference between the carrying amount of the assets distributed and the carrying amount of the dividend payable when an entity settles the dividend payable. This interpretation has no impact to the Group. TFRIC 18 sets out the accounting for transfers of items of property, plant and equity by entities that receive such transfers from their customers. Agreements within the scope of this interpretation are agreements in which an entity receives from a customer an item of property, plant and equipment that the entity must then use either to connect to a network or to provide the customer with ongoing access to supply of goods or services. The interpretation addresses the issues on the initial recognition and the accounting treatment of the transferred assets. This interpretation has no impact to the Group.

Accounting policies (Cont’d)

2.2

FINANCIALS

Notes to the Consolidated and Company Financial Statements For the year ended 31 December 2013

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

FINANCIALS

For the year ended 31 December 2013

Accounting policies (Cont’d)

2.2

Revised accounting standards, revised financial reporting standards, and related interpretations (Cont’d)

Revised accounting standards, revised financial reporting standards, and related interpretations that are not yet effective and have not been early adopted by the Group: (Cont’d)

Group accounting - Investments in subsidiaries and associates and interests in joint ventures (Cont’d)

a) Subsidiaries (Cont’d) Investments in subsidiaries are accounted for at cost less impairment. Cost is adjusted to reflect changes in consideration arising from contingent consideration amendments. Cost also includes direct attributable costs of investment.

TSIC 27 provides guidance on evaluating the substance of transactions in the legal form of a lease between the entity and the investor whether a series of transactions is linked and should be accounted for as one transaction and whether the arrangement meets the definition of a lease under TAS17 “Leases”. The accounting shall reflect the substance of the arrangement. The management is currently assessing the impact of applying this interpretation.

Intercompany transactions, balances and unrealised gains or loss on transactions between Group companies are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

New accounting standard which is effective for the periods beginning on or after 1 January 2016 TFRS 4

Insurance Contracts

TFRS 4 applies to all insurance contracts (including reinsurance contracts) that an entity issues and to reinsurance contracts that it holds. TFRS 4 is not relevant to the Group’s operations.

2.3

TSIC 15 sets out the accounting for the recognition of incentive that a lessor provides to a lessee in an operating lease. This interpretation has no impact to the Group.

TSIC 32 provides guidance on the internal expenditure on the development and operation of the entity web site for internal or external access. The entity shall comply with the requirements described in TAS 38 “Intangible Assets”. This interpretation has no impact to the Group.

Accounting policies (Cont’d)

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in profit or loss.

TSIC 29 contains disclosure requirements in respect of public-to-private service arrangements. This interpretation has no impact to the Group.

FINANCIALS

For the year ended 31 December 2013

A list of the Group’s principal subsidiaries and the financial effects of acquisitions and disposals of subsidiaries are shown in Note 13.

b) Transactions and non-controlling interests The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity. When the Group ceases to have control or significant influence, any retained interest in the entity is re-measured to its fair value, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities.

Group accounting - Investments in subsidiaries and associates and interests in joint ventures a)

Subsidiaries

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.

Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are fully considered when assessing whether the Group controls another entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They de-consolidated from the date that control ceases.

, unless it has incurred obligations or made payments on behalf of the associate.

The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree at the non-controlling interest’s proportionate share of the acquiree’s net assets. 17

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

FINANCIALS

For the year ended 31 December 2013

Accounting policies (Cont’d)

2.3

Group accounting - Investments in subsidiaries and associates and interests in joint ventures (Cont’d)

FINANCIALS

For the year ended 31 December 2013

Accounting policies (Cont’d) 2.4

Foreign currency translation

a) Functional and presentation currency c)

Associates

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated and company financial statements are presented in Thai Baht, which is the company’s functional and the Group’s presentation currency.

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost. The Group’s investment in associates includes goodwill identified on acquisition, net of any accumulated impairment loss. (see Note 2.12 for the impairment of assets including goodwill).

b) Transactions and balances The Group’s share of its associates’ post-acquisition profits or losses is recognised in the profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit or loss.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

When a gain or loss on a non-monetary item is recognised in other comprehensive income, any exchange component of that gain or loss is recognised in other comprehensive income. Conversely, when a gain or loss on a non-monetary item is recognised in profit and loss, any exchange component of that gain or loss is recognised in profit and loss.

Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group. Dilution gains and losses arising in investments in associates are recognised in the income statement.

c) In the Company’s separate financial statements, investments in associates are accounted for using the cost method of accounting.

Group companies The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

A list of the Group’s principal associates and the financial effects of acquisitions and disposals of associates are shown in Note 13.

 

d) Joint ventures The Group’s interests in jointly controlled entities are initially recorded at cost and accounted for by the equity method in the consolidated financial statements. The Group’s share of its joint ventures’ post-acquisition profits or losses is recognised in the consolidated income statement. The cumulative post-acquisition movements are adjusted against the carrying amount of the interest in joint ventures. When the Group’s share of losses in joint ventures equal or exceed its interest in joint venture, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the joint ventures.



Assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position; Income and expenses statement of comprehensive income are translated at average exchange rates; and All resulting exchange differences are recognised as a separate component of equity.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

2.5

Cash and cash equivalents In the consolidated and Company statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less.

In the Company’s separate financial statements, interest in jointly controlled entities are accounted for using the cost method. A list of the Group’s joint ventures and the financial effects of the acquisitions and disposals of joint ventures are shown in Note 13.

2.6

Trade accounts receivable Trade accounts receivable are carried at original invoice amount and subsequently measured at the remaining amount less allowance for doubtful receivables based on a review of all outstanding amounts at the year end. The amount of the allowance is the difference between the carrying amount of the receivable and the amount expected to be collectible. Bad debts are written off during the year in which they are identified and recognised in the income statement within administrative expenses.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

FINANCIALS

For the year ended 31 December 2013

Accounting policies (Cont’d)

2.7

Inventories consist of foods and beverages, cinema supplies, and VCD and DVD. Inventories are stated at the lower of cost or net realisable value. Costs of foods and beverages and cinema supplies are determined by the first-in, first-out (FIFO) method. Costs of VCD and DVD are determined using weighted average method. The cost of purchase comprises both the purchase price and costs directly attributable to the acquisition of the inventory, such as import duties and transportation charges, less all attributable discounts, allowances or rebates. Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses. Allowance is made, where necessary, for obsolete, slow-moving and defective inventories.

2.8

Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred. Land is not depreciated. Depreciation is calculated on the straight-line basis to write off the cost of each asset, except for land which is considered to have an indefinite life, to its residual value over the estimated useful life or, if it is shorter, the lease term, as follows:

Films under production are costs of films under production which will be recognised as cost of films upon the sale or release of the films, basing on the future revenue expected from various channels. Costs of films comprise costs directly attributable to films production and are stated at cost.

Building Cinema and cinema improvement

Investments

Utility system Tool equipment and fixture Office equipment Vehicle

Investments other than investments in subsidiaries, associates and interests in joint ventures are available-for-sale investments. The classification is dependent on the purpose for which the investments were acquired. Management determines the appropriate classification of its investments at the time of the purchase and re-evaluates such designation on a regular basis. Investments intended to be held for an indefinite period of time, which may be sold in response to liquidity needs or changes in interest rates, are classified as available-for-sale; and are included in noncurrent assets unless management has expressed the intention of holding the investment for less than 12 months from the balance sheet date or unless they will need to be sold to raise operating capital, in which case they are included in current assets. Available for sale investments are initially recognised at cost, which is equal to the fair value of consideration paid plus transaction cost. Available for sale investments are subsequently measured at fair value. The fair value of investments is based on quoted bid price at the close of business on the statement of financial position date by reference to the National Stock Exchange of India Limited. The unrealised gains and losses of available for sale investments are recognised in equity. A test for impairment is carried out when there is a factor indicating that an investment might be impaired. If the carrying value of the investment is higher than its recoverable amount, impairment loss is charged to the income statement. On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the profit or loss. When disposing of part of the Company's holding of a particular investment in debt or equity securities, the carrying amount of the disposed part is determined by the weighted average carrying amount of the total holding of the investment.

Accounting policies (Cont’d)

2.9

Inventories and films under production

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

FINANCIALS

For the year ended 31 December 2013

20 years 10, 20 years and the lease contracts periods 5, 10, 15 years 5, 10, 15, 20 years 5 years 5 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in income statements.

2.10 Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary undertaking at the date of acquisition. Goodwill on acquisitions of subsidiaries is separately reported in the consolidated statement of financial position. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose, identified according to operating segment.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

FINANCIALS

For the year ended 31 December 2013

Accounting policies (Cont’d)

2.11 Other intangible assets

FINANCIALS

For the year ended 31 December 2013

Accounting policies (Cont’d)

2.13 Leases

Film rights

Leases - where the Group is the lessee

Film rights are capitalised at the purchase price including costs directly attributable to the acquisition of rights. Film rights are amortised and charged to direct costs of exhibition, VCD and DVD and TV broadcasting at the ratio relating to the expected revenue earned from each of the revenue-generated channels over the lifetime of rights. In the event that an ultimate loss is projected for each right, an amount equivalent to this loss will be written-off in the income statement immediately.

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease.

Computer software Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives 5 years. Costs associated with developing or maintaining computer software programmes are recognised as an expense as incurred. Costs that are directly associated with identifiable and unique software products controlled by the Group and will probably generate economic benefits exceeding costs beyond one year, are recognised as intangible assets. Direct costs include staff costs of the software development team and an appropriate portion of relevant overheads.

The Group leases certain building and equipment. Leases of building or equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in other long-term payables. The interest element of the finance cost is charged to profit or loss over the lease period so as to achieve a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant or equipment acquired under finance leases is depreciated over the shorter period of the useful life of the asset and the lease term. Leases - where the Group is the lessor

Expenditure which enhances or extends the performance of computer software programmes beyond their original specifications is recognised as a capital improvement and added to the original cost of the software. Computer software development costs recognised as assets are amortised using the straight-line method over their useful lives, not exceeding a period of 5 years.

2.12 Impairment of assets Assets that have an indefinite useful life, for example goodwill, are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the assets exceeds its recoverable amount which is the higher of an asset’s net selling price and value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which there is separately identifiable cash flows. Assets other than goodwill that suffered an impairment are reversed for possible impairment loss of the estimation of the recoverable amount were changed in subsequent period after the Group’s recognition of impairment.

When assets are leased out under a finance lease, the present value of the lease payments is recognised as a receivable. The difference between the gross receivable and the present value of the receivable is recognised as unearned finance income. Lease income is recognised over the term of the lease using the net investment method, which reflects a constant periodic rate of return. Initial direct costs are included in initial measurement of the finance lease receivable and reduce the amount of income recognised over the lease term. Assets leased out under operating leases are multi-purpose property, the significant portions are owneroccupied property held for use in the supply of goods and services, therefore are included in building and equipment in the statement of financial position. They are depreciated over their expected useful lives on a basis consistent with other similar building and equipment owned by the Group. Rental income (net of any incentives given to lessees) is recognised on a straight-line basis over the lease term.

2.14 Borrowings Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent that there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the end of reporting date.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

For the year ended 31 December 2013

Accounting policies (Cont’d)

2.15 Employee benefits

FINANCIALS

For the year ended 31 December 2013

Accounting policies (Cont’d)

2.16 Share-based payment (Cont’d)

Employee benefits obligations Group companies operate various employee benefit schemes. The Group has both defined benefit and defined contribution plans. A defined contribution plan is a plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. A defined benefit plan is a retirement plan that is not a defined contribution plan. Typically defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. The liability recognised in the statement of financial position in respect of defined benefit obligations is the present value of the defined benefit obligation at the end of the reporting period with adjustments for unrecognised past-service costs. The defined benefit obligation is calculated every three years by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using market yield of government bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability.

Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-marketing vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. When the options are exercised, the Company issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised. The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings in the Group is treated as a capital contribution. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity. For share-based payment transaction where the Company issued options prior to 2011, the Company will record the transaction when the options are exercised. The Company issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to income statement in the period in which they arise. Past-service costs are recognised immediately in income statement, unless the changes to the retirement plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past-service costs are amortised on a straight-line basis over the vesting period. For defined contribution plans, the Group pays contributions to trustee-administered fund on a contractual basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

2.16 Share-based payment The Group operates a number of equity-settled, share-based compensation plans, under which the entity receives services from employees as consideration for equity instruments (warrant) of the Group. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted:   

2.17 Provisions Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense. Provisions for goods returns in related to VCDs and DVDs is estimated based on historical experience and other relevant market factors. Provision for goods returns are provided for the sales profit margins and presented netting this of sales.

including any market performance conditions; excluding the impact of any service and non-market performance vesting conditions (for example, profitability, sales growth targets and remaining an employee of the entity over a specified time period); and excluding the impact of any non-vesting conditions (for example, the requirement for employees to safe).

The Company sets aside the provision for bonus point redemption based on consideration of historical redemption rate and bonus point outstanding balance on the financial position date.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

FINANCIALS

For the year ended 31 December 2013

Accounting policies (Cont’d)

2.18 Current and deferred income taxes

FINANCIALS

For the year ended 31 December 2013

Accounting policies (Cont’d)

2.20 Revenue recognition

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case the tax is also recognised in other comprehensive income or directly in equity, respectively. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of reporting period in the countries where the company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Revenues of the Group consist principally admissions, concession sales, advertising services, bowling and Karaoke services, rental and services, sales of VCD/DVD and film rights distribution and sponsorship income. Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services net of output tax, rebates and discounts, and after eliminating sales within the Group for the consolidated financial statements. Revenue from sales of goods is recognised when significant risks and rewards of ownership of the goods are transferred to the buyer. Revenue from providing services is recognised when the services are rendered.

Deferred income tax is recognised, using the liability method, on temporary differences arising from differences between the tax base of assets and liabilities and their carrying amounts in the financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Where loyalties from film rights or film production are charged at fixed amounts for which the licensee cannot be refunded and the licensor has no further obligations subsequent to granting of the rights, the loyalties are recognised as income in full when the licensee is entitled to exploit the rights under the terms of the agreement.

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred income tax is provided on temporary differences arising from investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

Revenue from leases and services are recognised over the period of the lease agreement.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Interest income

The effects of the adoption of the standard on the consolidated and company financial statements of the Group are shown in Note 6.

Revenue from advertising is recognised when the media are appeared. Revenue from cable television service is recognised when the services are rendered over the contract periods.

Deferred revenue from leases and services are recognised when services are rendered. Other revenues are recognised on the following basis:

Dividend income

- on a time proportion basis, taking account of the principal outstanding and the effective rate over the period to maturity, when it is determined that such income will accrue to the Group. - when the right to receive payment is established.

2.21 Dividend payment Dividend payment is recorded in the consolidated and company financial statements in the period in which they are approved by the shareholders.

2.19 Share capital Ordinary shares are classified as equity.

2.22 Segment reporting Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Segment information has been prepared based on the internal report of the Group, which disaggregates its business by services or products.

Where any Group company purchases the Company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the company’ s equity holders until the shares are cancelled or reissued. Where such shares are subsequently reissued, any consideration received, net of any directly attributable incremental transact costs and the related income tax effects, is included in equity attributable to the company’s equity holders.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as Cheif Executive Officer that makes strategic decisions.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

FINANCIALS

For the year ended 31 December 2013

Financial risk management

3.1

Financial risk factors

Critical accounting estimates, assumptions and judgements

Estimates, assumptions and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance. Risk management is carried out by a central treasury department (Group Treasury) under policies approved by the Board of Directors. The Group Treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative and non-derivative financial instruments, and investment excess liquidity.

4.1

Critical accounting estimates and assumptions The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below. a) Estimated impairment of goodwill The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in Note 2.12. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations or fair value less cost to sell as appropriate. These calculations require the use of estimates (Note 15).

3.1.1 Foreign exchange risk The Group has no significant exposure to foreign currency risk relates due to its accounts receivable and accounts payable are mainly made in Thai Baht. The group has foreign exchange transaction from purchase of film rights mainly dominated in various currencies, primarily with respect to USD. The Group does not use any derivative financial instruments to hedge foreign currency exposure.

If the estimated cost of capital used in determining the pre-tax discount rate applied to the discounted cash flows had been 1% higher than management’s estimates (for example, 11.1% instead of 10.1%), goodwill for all business would have not been impaired. In the preparation of forecast financial statement; however, management based on the past operating result and the expected growth in the industry, the growth rate is consistent with the past actual result. The base case is considered as the appropriate base in evaluation of goodwill.

3.1.2 Interest rate risk The Group’s income and operating cash flows are not substantially independent of changes in market interest rates. Interest rate risk is the risk that future movements in market interest rates will affect the results of the Group’s operations and its cash flows. The loan interest rates of the Group are mainly fixed. The Group does not use the interest rate derivative to manage exposure from fluctuation in interest rate on specific borrowing.

b) Impairment of receivables The Group maintains an allowance for doubtful accounts to reflect impairment of trade receivables relating to estimated losses resulting from the inability of customers to make required payments. The allowance for doubtful accounts is significantly impacted by the Group’s assessment of future cash flows, such assessment being based on consideration of historical collection experience, known and identified instances of default and consideration of market trends.

3.1.3 Credit risk The Group has no significant concentrations of credit risks due to the large number of customer from which the income is charged in cash. The Group has policies in place to ensure that sales of products and services are made to customers with appropriate credit history. Cash transactions are limited to high credit quality financial institutions. 3.1.4 Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying business, Group Treasury aims at maintaining flexibility in funding by keeping committed credit lines available.

3.2

FINANCIALS

For the year ended 31 December 2013

Allowance for obsolete, slow-moving and defective inventories The Group has made allowance, where necessary, for obsolete, slow moving and defective inventories by estimating the net realisable value was calculated from the selling price in the ordinary course of business, less the cost of completion and selling expenses. Furthermore, the calculation of the net realisable estimation was based on historical experience, management’s knowledge of the industry and future market trends.

d) Provision for goods returns The management has estimated the provision for goods returns in relation to VCDs and DVDs. The percentage of goods returned is estimated based on historical information, experiences and existing business models.

Fair value The book values of financial assets and financial liabilities with a maturity of less than one year are approximate their fair values. Loans made with related parties carried an interest at the market interest rate. Management believe that their net book values are assumed to approximate their fair value.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

FINANCIALS

For the year ended 31 December 2013

Critical accounting estimates, assumptions and judgements (Cont’d)

4.1

Valuation of films under production The cost of films under production is recognised when incurred. When there is an indicator, the Group tests impairment on a title by title basis, and if the estimated remaining net cash flows are not sufficient to recover each title cost, the impairment will be recognised. The estimation of net cash flow is calculated and estimated by the management.

Change in accounting policies

As described in Note 2, the Group has adopted the Accounting Standard No.12 Income taxes, effective on 1 January 2013, and has accounted for the adoption retrospectively in accordance with the accounting standard. The comparative financial statements and financial information have been restated accordingly.

Critical accounting estimates and assumptions (Cont’d) e)

FINANCIALS

For the year ended 31 December 2013

The effects of the adoption on the statements of financial position of the Group as at 1 January 2012 are as follows; Unit: Baht Consolidated At 1 January 2012 Originally stated Adjustments

Employee benefit obligations The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for pensions include the discount rate. Any changes in these assumptions will have an impact on the carrying amount of pension obligations. The Group determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. In determining the appropriate discount rate, the Group considers the market yield of government bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension liability. Other key assumptions for pension obligations are based in part on current market conditions. Additional information is disclosed in Note 23.

g) Provision for customers loyalty program The Company sets aside the provision for bonus point redemption based on consideration of historical redemption rate and bonus point outstanding balance on the date of statement of financial position.

Increase in deferred tax assets Increase in deferred tax liabilities Decrease in investment in associates and interest in joint ventures Decrease in retained earnings Increase (decrease) in other components of shareholders’ equity

At 31 December 2012 Originally stated Adjustments

Restated

19,922,563 (248,416,330)

253,259 (251,779,749)

2,090,395,770 928,699,746

(191,016,028) (445,437,568)

1,899,379,742 483,262,178

2,122,049,539 1,050,946,989

(171,916,329) (410,559,720)

1,950,133,210 640,387,269

(129,755,466)

25,927,773

(103,827,693)

64,415,497

(12,883,099)

51,532,398 Unit: Baht

Company At 1 January 2012 Originally stated Adjustments Increase in deferred tax assets Increase in deferred tax liabilities Decrease (increase) in retained earnings Decrease (increase) in other components of shareholders’ equity

Restated

At 31 December 2012 Originally stated Adjustments

Restated

19,728,004 -

(12,655,147)

1,074,926,216

(6,199,769)

1,068,726,447

1,136,064,392

227,952

1,136,292,344

(129,755,466)

25,927,773

(103,827,693)

64,415,497

(12,883,099)

51,532,398

The effect on the income statements and the statement of comprehensive income for the year ended 31 December 2012 are as follows; 5

Unit: Baht

Capital risk management Consolidated

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debts.

Originally Stated Adjustments Increase in share of result of investments - equity method Decrease in income tax Increase in profit for the period Decrease in other comprehensive income for the period Basic earnings per share (Baht) Diluted earnings per share (Baht)

Company Restated

Originally stated Adjustments

Restated

157,192,335 281,914,714

19,099,699 (15,778,149)

176,292,034 266,136,565

191,378,222

(6,427,721)

184,950,501

811,141,702

34,877,848

846,019,550

750,032,635

6,427,721

756,460,356

194,170,963

(38,810,872)

155,360,091

194,170,963

(38,810,872)

155,360,091

0.92

0.04

0.96

0.85

0.01

0.86

0.91

0.04

0.95

0.85

During the year, the Group has presented change in accounting policies in preparation the interim 2013 consolidated and company financial information. The effect of the adoption on such policies which has presented in the interim consolidated and company for prior period were adjusted due to error in calculation.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC. ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

Consolidated total assets

1,386

Consolidated total assets

Segment fixed assets Investments in associates and interest in joint ventures Unallocated assets

Net profit 19

778 68 214 (55) 9

6,965

7,551 (586)

11,330

5,332 1,950 4,048

791

1,057 (266)

(50)

(210)

858

981 (123)

Profit before income tax Income tax

807

505

605 (100)

1,014 (133) 176

3,074

512

597 (85)

Operating profit Finance costs Share of profit of associates and joint ventures

425

505

(5)

649

4,441 Net revenues Segment results Compensation income Gain on disposal of investment Impairment of goodwill Unallocated income

669 (20)

4,699 (258)

Unit: Million Baht Consolidated Bowling and Rental and services Movie content Cinema Advertising Karaoke business business business business business Total Revenues - Gross segment revenues - Inter segment revenues

For the year ended 31 December 2012

Segment information (Contâ&#x20AC;&#x2122;d)

13,630

6,696 2,469 4,465

Segment fixed assets Investments in associates and interest in joint ventures Unallocated assets

1,024

Net profit 18

1,300 (276)

1,145 13 221 (119)

7,710

8,500 (790)

Profit before income tax Income tax

1,307

(295)

500

770 (270)

1,260 (149) 189

796

481

589 (108)

Operating profit Finance costs Share of profit of associates and joint ventures

569

794

Compensation income Gain on disposal of investment Unallocated income

4,521

490

788

5,451

Net revenues

562 (72)

789 (1)

5,790 (339)

Segment results

FINANCIALS

Unit: Million Baht Consolidated Bowling and Rental and Cinema Advertising Karaoke services Movie content business business business business business Total

Revenues - Gross segment revenues - Inter segment revenues

For the year ended 31 December 2013

Financial information by business segment is follows:

Segment information

Major Cineplex Group Public Company Limited Notes to the Consolidated and Company Financial Statements For the year ended 31 December 2013

FINANCIALS

92 93

FINANCIALS

For the year ended 31 December 2013

Segment information (Contâ&#x20AC;&#x2122;d)

Trade account and other receivables Consolidated 2013

Unallocated costs represent corporate expenses. Segment assets consist primarily property and equipment, intangible assets, inventories, receivables and operating cash and mainly exclude investments.

Third parties - Trade accounts receivable - Unbilled revenue

773,228,671 154,373,471

828,289,046 147,506,084

150,520,060 13,718,332

65,915,475 36,203,791

Cash and cash equivalents

Total Less Allowance for doubtful accounts

927,602,142 (52,600,177)

975,795,130 (50,436,954)

164,238,392 -

102,119,266 -

875,001,965

925,358,176

164,238,392

102,119,266

33,055,941 73,415,497 117,689,640 59,884,749

8,860,461 43,904,035 397,502,420 78,349,977

100,585,964 253,805,874 86,195,151 43,576,865

132,621,634 280,199,584 283,912,002 51,771,475

1,159,047,792 1,453,975,069

648,402,246

850,623,961

Cash on hand Deposits held at call with banks

38,613,426 457,068,263

31,471,741 449,261,181

30,025,415 364,299,880

22,895,066 308,477,828

Trade accounts receivable - Third parties, net Trade accounts receivable - Related parties (Note 36) Amounts due from related parties (Note 36) Other accounts receivable Prepaid expenses

Cash and cash equivalents

495,681,689

480,732,922

394,325,295

331,372,894

Trade account and other receivables

Consolidated 2013

2012

The effective interest rates on short-term bank deposit are ranging from 0.10% to 2.25% per annum (2012: 0.10% to 3.25% per annum).

2012

Unit: Baht Company 2013 2012

Liabilities are mainly borrowings purposed to be used for all segments and for the Groupâ&#x20AC;&#x2122;s liquidity. Accordingly, the Group does not present the liabilities segment information.

Unit: Baht Company 2013 2012

Outstanding trade accounts receivable - third parties as at 31 December can be analysed according to ages as follows:

Available-for-sale investment

Consolidated 2013

The movement of available-for-sale investment over the year is as follows: Unit: Baht Consolidated and Company 2013 2012 Opening book value Change in fair value of investments Less allowance for impairment

372,406,147 448,165,556 -

177,457,846 194,948,301 -

Closing book value

820,571,703

372,406,147

FINANCIALS

For the year ended 31 December 2013

2012

Unit: Baht Company 2013 2012

Unbilled revenue Trade accounts receivable Current Overdue less than 3 months 3 - 6 months Over 6 months

154,373,471

147,506,084

13,718,332

36,203,791

341,661,124 237,080,251 49,686,876 144,800,420

392,684,328 220,243,525 75,602,717 139,758,476

89,196,843 47,055,641 4,464,700 9,802,876

32,465,406 31,110,275 545,044 1,794,750

Total Less Allowance for doubtful accounts

927,602,142 (52,600,177)

975,795,130 (50,436,954)

164,238,392 -

102,119,266 -

Trade accounts receivable, net

875,001,965

925,358,176

164,238,392

102,119,266

The fair values of the investments are as follows: 11

Inventories, net

Unit: Baht Consolidated and Company 2013 2012 Cost Unrealised gain

307,990,650 512,581,053

307,990,650 64,415,497

Fair value

820,571,703

372,406,147

Consolidated 2013 Foods and beverages VCD and DVD, net of allowance Supplies and others Goods in transit Inventories, net

2012

Unit: Baht Company 2013 2012

69,267,049 82,359,982 21,359,087 1,921,927

48,594,571 71,267,512 11,650,351 728,266

51,039,170 7,320,453 -

33,104,262 5,006,696 -

174,908,045

132,240,700

58,359,623

38,110,958

Cost of inventory was recognised as an expense and included in cost amounting to Baht 429.78 million and Baht 280.49 million in the consolidated and company income statements, respectively (2012: Baht 500.40 million and Baht 246.94 million). The Group recorded loss from obsolescence and allowance for diminution in value to inventories in the consolidated income statement for the year ended 31 December 2013 amounting to Baht 12.86 million (2012: Baht 32.95 million).

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

FINANCIALS

For the year ended 31 December 2013

Other current assets Consolidated 2013 Value added tax receivable Withholding tax deducted at sources Others

Unit: Baht Company 2013 2012

2012

Investments in subsidiaries and associates and interests in joint ventures, net (Cont’d) a)

Movements of investments in subsidiaries and associates and interests in joint ventures are as follows: (Cont’d)

158,962,592 28,582,099 24,445,275

122,038,261 26,437,635 14,363,798

53,116,646 7,014,080

23,629,542 3,197,067

Investment in subsidiaries, net (Cont’d)

211,989,966

162,839,694

60,130,726

26,826,609

Talent One Co., Ltd. (“TLO”)

Investments in subsidiaries and associates and interests in joint ventures, net Movements of investments in subsidiaries and associates and interests in joint ventures are as follows: Investment in subsidiaries, net Unit: Baht Company 2013

FINANCIALS

For the year ended 31 December 2013

Disposal of investment in subsidiaries

During the year ended 31 December 2013, the Company exchanged 0.32 million ordinary shares of TLO with 7.04 million ordinary shares of MPIC. Loss from the share swap of Baht 13.55 million was recognised as “Other income” in the company income statements. The discount, which is a difference between the consideration paid and amount of non-controlling interests of Baht 1.11 million was recognised as “Changes in parent’s ownership interest in subsidiaries” under shareholder’s equity in the consolidated financial statements. Share reduction of subsidiaries

2012 Chiangmai Cineplex Co., Ltd. (“CMC”)

Investment in subsidiaries Less Allowance for impairment

2,744,449,932 (3,000,000)

2,354,200,286 (3,000,000)

Investment in subsidiaries, net

2,741,449,932

2,351,200,286

Udorn Five Star Cineplex Co., Ltd. (“UDF”)

For the years ended 31 December Opening net book amount Acquisitions Disposals Share reduction Impairment Closing net book amount

2,351,200,286 432,869,430 (32,000,000) (10,619,784) 2,741,449,932

1,911,916,647 486,532,739 (44,249,100) (3,000,000)

M Picture Entertainment Public Company Limited (“MPIC”) During the year ended 31 December 2013, the Company made an additional investment in MPIC of 165.89 million shares for a total of consideration of Baht 426.87 million. Consideration paid included cash payment of Baht 383.43 million (mainly through tender offer) and exchange of ordinary shares of subsidiary “TLO” and joint venture “MKB” totalling amount Baht 43.44 million. The acquisition resulted in the change in shareholding percentage from 67.86% to 91.37%. The difference between consideration paid and amount of non-controlling interests of Baht 318.71 million was recognised as “Changes in parent’s ownership interest in subsidiaries” in the consolidated shareholders’ equity. On 3 October 2013, a subsidiary made additional investment in Subsidiary TLO of 0.04 million shares totalling Baht 4.00 million. The acquisition resulted in the change in shareholding percentage from 80.00% to 90.00%. The difference from additional investment of Baht 5.21 million was recognised as “Change in parents’ ownership interest in subsidiaries” presented under shareholders’ equity. Digital Projector Management Co., Ltd. (“DPM”) On 3 May 2013, the Company purchased 99.99% of shares in DPM, a service provider for projector and system management, totalling Baht 5.00 million. Major Holding International Co., Ltd. (“MHD”) On 8 January 2013, the Company purchased 99.96% of shares in MHD, a holding company, totalling Baht 1.00 million.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

The shareholders of UDF have approved to decrease the registered share capital from par value of Baht 25 per share to Baht 7 per share for 390,000 shares, totalling Baht 7.02 million. The Company received a share reduction totalling Baht 7.02 million on 2 January 2013. Investment in associates Consolidated 2013

2,351,200,286

Addition of investment in subsidiaries

The shareholders of CMC have approved to decrease the registered share capital from par value of Baht 25 per share to Baht 7 per share for 200,000 shares, totalling Baht 3.60 million. The Company received a share reduction totalling Baht 3.60 million on 2 January 2013.

2012

Unit: Baht Company 2013 2012

Opening net book amount Effect from change in accounting policy

1,883,886,016

1,977,166,901 1,716,422,344

1,792,353,449

(168,956,853)

(187,938,416)

Opening balance after adjustment Acquisitions Disposals Dividend received Share of result

1,714,929,163 526,839,775 (91,545,034) (128,908,248) 191,552,839

1,789,228,485 1,716,422,344 33,025,890 526,839,775 (150,892,414) (75,022,556) (121,345,342) 164,912,544 -

1,792,353,449 33,025,890 (108,956,995) -

Closing net book amount

2,212,868,495

1,714,929,163 2,168,239,563

1,716,422,344

The Group’s intercompany gain on disposals of assets to Major Cineplex Lifestyle Leasehold Property Fund is realised on the straight-line basis over the lease contracts periods of the buildings leased out to the Property Fund. During 2013, the Group realised gain on disposal in the consolidated income statement of Baht 16.32 million (2012: Baht 16.32 million). As at 31 December 2013, investment in associates included net book value of goodwill in the consolidated financial statements amounting to Baht 44.12 million (2012: Baht 44.12 million). During the year ended 31 December 2013, the Company received dividends income from associates amounting to Baht 128.91 million, which was recognised in “Other income” in the company income statement and recognised in “Investment in associates” in the consolidated statement of financial position.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

23.72 50.00 11.86 33.00 40.00 324,094,030 38,074,999 29,106,661 5,352,046 Indirect shareholding via SF 152,733,656 126,384,240 100,845,796 21,741,554

20.49 50.00 10.25 33.00 40.00

% Ownership interest Profit (loss) Baht

Movements of investments in subsidiaries and associates and interests in joint venture are as follows: (Cont’d) Investment in associates (Cont’d) Siam Future Development Public Company Limited (“SF”) Addition of investment in associate During the year ended 31 December 2013, the Company made additional investment in SF of 102.97 million shares totalling Baht 526.84 million. Disposal of investment in associate

Ratchayothin Avenue Company Limited is controlled by Siam Future Development Public Company Limited.

Major Cineplex Lifestyle Leasehold Property Fund Thaiticketmajor Company Limited

1,347,087,413 70,235,897

39,504,367 45,555,900

301,242,584 8,775,319 27,669,724 3,710,040 Indirect shareholding via SF 160,145,398 132,242,348 82,468,560 20,184,837 823,707,872 183,669,738 1,464,330,270 353,483,538 Year ended 31 December 2012 Associates Siam Future Development Public Company Limited Ratchayothin Avenue Company Limited

37,910,281 76,384,276 1,352,231,079 102,368,385 Major Cineplex Lifestyle Leasehold Property Fund Thaiticketmajor Company Limited

1,991,605,412 351,061,686

944,480,076 178,206,004

Year ended 31 December 2013 Associates Siam Future Development Public Company Limited Ratchayothin Avenue Company Limited

Revenues Baht Liabilities Baht Assets Baht

The Group’s share of results of its associates and its share of the assets liabilities, revenues and result of the joint ventures are as follows:

Investment in subsidiaries, net (Cont’d)

a) Movements of investments in subsidiaries and associates and interests in joint ventures are as follows: (Cont’d)

Investment in associates (Cont’d)

Investments in subsidiaries and associates and interests in joint ventures, net (Cont’d)

During the year ended 31 December 2013, the Company disposed investment in SF of 30.52 million shares for the considerations of Baht 313.02 million and recognised gain on disposal of investment amounting to Baht 221.48 million, and Baht 238.00 million, which included in “Other income” in the consolidated and company income statements, respectively. The aforesaid change of investment resulted in addition of shareholding percentage from 20.49% to 23.72%. Interest in joint ventures

Consolidated 2013

2012

Unit: Baht Company 2013 2012

Opening book amount Effect from change in accounting policy

238,163,523

113,228,869

216,793,035

103,119,735

(2,959,476)

(3,077,612)

Opening balance after adjustment Additional investment Additional investment in joint venture under control of a subsidiary Disposal Dividend income Share of result

235,204,047 38,697,500

110,151,257 113,673,300

216,793,035 38,697,500

103,119,735 113,673,300

28,229,350 (28,229,350) (15,747,986) (2,396,232)

11,379,490

(17,999,960) -

Closing book amount

255,757,329

235,204,047

237,490,575

216,793,035

Major Cineplex Group Public Company Limited Notes to the Consolidated and Company Financial Statements For the year ended 31 December 2013

FINANCIALS

For the year ended 31 December 2013

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

FINANCIALS

For the year ended 31 December 2013

Investments in subsidiaries and associates and interests in joint ventures, net (Cont’d)

Interest in joint ventures (Cont’d) a)

Investments in subsidiaries and associates and interests in joint ventures, net (Cont’d)

The details of investments in subsidiaries and associates and interests in joint ventures are as follows:

Movements of investments in subsidiaries and associates and interests in joint venture are as follows: (Cont’d) Subsidiaries

Interest in joint ventures The Group’s share of results of its joint ventures and its share of the assets, liabilities revenue and expenses are as follows: Unit: Baht Consolidated 2013 2012 Non-current assets Current assets

280,466,623 109,390,462

248,215,462 81,848,504

Total assets

389,857,085

330,063,966

Non-current liabilities Current liabilities

30,764,700 130,254,828

53,862,406 63,955,830

Total liabilities

161,019,528

117,818,236

Net assets

228,837,557

212,245,730

Revenue

206,258,459

143,120,183

Expenses

207,120,383

133,002,997

Nil

Proportionate interest in joint venture commitments

There are no contingent liabilities relating to the Group’s interest in the joint ventures.

Addition of investment in joint ventures

Major Cineplex Property Co., Ltd. Major Cineplex Services Co., Ltd. Chiangmai Cineplex Co., Ltd. Ratchayothin Management Co., Ltd. Ratchayothin Cinema Co., Ltd. Ratchayothin Realty Co., Ltd. Major Bowl Group Co., Ltd. Major Cinead Co., Ltd. Bangkok Imax Theater Co., Ltd. Udorn Five Star Cineplex Co., Ltd. Siam Cineplex Co., Ltd. EGV Entertainment Public Company Limited M Picture Entertainment Public Company Limited (“MPIC”) Talent One Co., Ltd. (“TLO”)

Major Holding International Co., Ltd.* Digital Projector Management Co., Ltd.

Subsidiaries under EGV Entertain Golden Village Exhibition Co., Ltd. EGV Exhibition Co., Ltd.

EGV Five Star Co., Ltd.

PVR Bluo Entertainment Co., Ltd. (“PVR bluO”) On 11 November 2011, the Board of Directors Meeting No. 4/2554, the directors approved for the additional investment of Rupee 276.00 million to retain the percentage of shareholding at 49%. On 25 November 2011, the Company paid for a share subscriber in PVR bluo of Rupee 40.00 million, equivalents to Baht 25.20 million, the remaining will be paid in the year 2013. On 15 May 2013, the Company paid for a share subscriber in PVR bluo of Rupee 67.30 million, equivalents to Baht 38.70 million to retain the percentage of shareholding at 49%.

M Picture Co., Ltd.

M.V.D. Co., Ltd.

Disposal of investment in joint venture

M Thirtynine Co., Ltd.

Major Kantana Broadcasting Company Limited (“MKB”)

Talent One Co., Ltd. (“TLO”)

During the year ended 31 December 2013, the Company exchanged 1.80 million ordinary shares of MKB with 9.54 million ordinary shares of MPIC. Gain from the share swap of Baht 7.00 million was recognised as “Other income” in the company income statements. The discount, which is a difference between the consideration paid and amount of non-controlling interests of Baht 7.02 million was recognised as “Changes in parent’s ownership interest in subsidiaries” under Shareholder’s equity in the consolidated shareholders’ equity.

100

Subsidiaries under MPIC TV Forum Co., Ltd.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

Nature of business

Nature of relationship

% Ownership Interest 2013 2012

Building space for rent Utilities services Cinema services Utilities services Cinema services Building space for rent Bowling, Karaoke and entertainment services Advertising and advisory services Cinema services Cinema services Cinema services Cinema services

Shareholder Shareholder Shareholder Shareholder Shareholder Shareholder Shareholder

99.99 99.99 99.99 99.99 99.99 99.99 99.99

Shareholder

99.93

Shareholder Shareholder Shareholder Shareholder

99.93 99.99 99.99 99.98

Publishing, advertising and distribution of film rights Film production and services for all forms of entertainment Holding business Projector rental and system management

Shareholder

91.37

67.86

Shareholder

80.00

Shareholder Shareholder

99.96 99.99

Cinema services, advertising services Cinema services, advertising services, area for rent Cinema services, advertising services

Indirect shareholding Indirect shareholding

99.96

Indirect shareholding

99.96

Television media business Distribution of film rights for cinema services, VCD/DVD production and TV broadcast Distribution of VCD/DVD, Blu-ray and film rights Film production

Indirect shareholding Indirect shareholding

91.37

67.86

91.37

67.86

Indirect shareholding

91.37

67.86

Indirect shareholding Indirect shareholding

91.37

67.86

82.23

Film production, services for all forms of entertainment and sales of packet books

FINANCIALS

For the year ended 31 December 2013

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

101

Ratchayothin Avenue Co., Ltd.

Major Cineplex Lifestyle Leasehold Property Fund Thaiticketmajor Co., Ltd.

Joint ventures PVR blu-O Entertainment Limited (“PVR blu-O”) K Arena Co.,Ltd. Major Kantana Broadcasting Company Limited (“MKB”)

Joint venture under MPIC Major Kantana Broadcasting Company Limited (“MKB”)

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC. Rental of building space and utilities services Rental of building space and utilities services Shareholder 23.72 20.49

Shareholder Indirect shareholding via SF Shareholder 50.00 11.86 50.00 10.25

33.00 33.00

Shareholder 40.00 40.00

Bowling, Karaoke and entertainment Karaoke services Sattellite broadcasting and distribution of film rights Shareholder 49.00 49.00

Shareholder Shareholder 50.00 50.00 44.99

Sattellite broadcasting and distribution of film rights Shareholder 41.11 -

* New company established in this period.

All subsidiaries, associates and joint ventures are incorporated in Thailand except PVR bluO which is incorporated in India. All holdings are investments in ordinary shares and investment unit in the Property Fund. 1,059,055,558

1,059,055,558 3,843,449 8,537,752 223,592,872 (3,298) (1,763,163) (85,523,535) 1,207,739,635

1,810,314,486 3,054,524,305 (602,574,851) (1,458,990,602) 1,207,739,635

208,316,998

208,316,998 208,316,998

Net book value For the year ended 31 December 2012 Opening net book value Additions Transfer Reclassification Disposals, net Write-off, net Depreciation charge Impairment charge Closing net book value At 31 December 2012 Cost Less Accumulated depreciation Allowance for impairment Net book value

1,595,533,703

1,759,384,610 100,260,183 102,765,163 (212,128,647) (364,209) (2,420,510) (151,962,887) -

1,759,384,610

1,414,363,876 3,265,393,123 (355,308,318) (1,506,008,513) -

208,316,998 -

1,578,545,202

1,468,459,096 314,110,638 78,523,364 (11,464,225) (12,904,708) (34,869,677) (221,130,847) (2,178,439)

1,468,459,096

50,688,175

51,980,008 21,192,114 10,295,451 (817,070) (10,408) (31,657,891) (294,029)

51,980,008

576,981,544

1,578,545,202

50,688,175

51,176,153

51,176,153 -

8,865,143

105,455,434

105,455,434 -

105,455,434

8,242,948 51,176,153 4,136,153 271,054,563 - (216,775,282) (3,513,958) -

8,242,948

16,112,643 (7,869,695) -

1,103,862,201 4,037,033,307 287,732,842 20,248,796 (525,236,206) (2,451,434,064) (236,374,953) (11,383,653) (1,644,451) (7,054,041) (669,714) -

576,981,544

574,180,007 58,284,311 16,653,552 (2,362,578) (8,457,150) (60,820,828) (495,770)

574,180,007

1,049,659,221 3,912,109,628 305,922,849 (474,330,533) (2,438,774,929) (253,567,156) (1,148,681) (4,875,603) (375,685)

5,332,125,834

10,627,488,369 (5,285,994,329) (9,368,206)

5,332,125,834

5,180,795,378 772,881,411 (16,451,863) (47,520,908) (554,609,946) (2,968,238)

5,180,795,378

10,223,054,491 (5,035,859,144) (6,399,969)

Total

Unit: Baht

The details of investments in subsidiaries and associates and interests in joint ventures are as follows: (Cont’d)

At 1 January 2012 Cost Less Accumulated depreciation Allowance for impairment

Rental of building and utilities services Agent for selling of tickets

% Ownership Interest 2013 2012 Construction in progress

67.46 Vehicle

90.82

Office equipment

Indirect shareholding

Cinema and cinema Improvement

Distribution of CD, VCD and DVD

Land

Associates Siam Future Development Public Company Limited (“SF”) Nature of relationship

Building and building improvement

Subsidiary under MVD Pacific Media Sale Co., Ltd. Nature of business

Consolidated Tool, Utility equipment system and fixture

Subsidiaries

Property, plant and equipment, net

Investments in subsidiaries and associates and interests in joint ventures, net (Cont’d)

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

FINANCIALS

102

Major Cineplex Group Public Company Limited Notes to the Consolidated and Company Financial Statements For the year ended 31 December 2013

FINANCIALS For the year ended 31 December 2013

103

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC. ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

1,140,976,719

1,832,918,909 (691,942,190) 1,140,976,719

208,316,998

208,316,998 208,316,998

Closing net book value At 31 December 2013 Cost Less Accumulated depreciation Allowance for impairment Net book value

1,913,062,573 (740,189,727) 1,172,872,846

1,172,872,846 89,408,658 95,865,713 (359,709) (14,754) (118,211,028) 1,239,561,726

2,084,728,464 (845,166,738) 1,239,561,726

173,406,998 173,406,998

Net book value For the year ended 31 December 2012 Opening net book value Additions Transfer Disposals, net Write-off, net Depreciation charge Closing net book value At 31 December 2012 Cost Less Accumulated depreciation Net book value

Land At 1 January 2012 Cost Less Accumulated depreciation

Property, plant and equipment, net (Contâ&#x20AC;&#x2122;d)

Utility system

263,066,097

377,971,505 (114,905,408)

263,066,097

261,739,869 14,944,220 11,465,599 (25,083,591)

261,739,869

122,193,099

50,688,175 27,156,877 89,490,200 (40,623) (32,992) (45,068,538) -

Office equipment

678,914,722

1,616,393,062 (937,478,340)

678,914,722

591,676,562 133,889,829 50,196,620 (4,525) (96,843,764)

591,676,562

1,469,436,699 (877,760,137)

Office equipment

6,402,176

31,641,167

180,068,344 (148,427,177)

31,641,167

35,176,063 13,864,606 3,791,873 (145) (21,191,230)

35,176,063

Vehicle

2,849,552

9,001,886 (6,152,334)

2,849,552

2,627,712 1,557,300 (1,335,460)

2,627,712

6,696,317,791

5,332,125,834 2,068,400,085 (34,445,570) (3,705,080) (633,590,299) 2,032,821 (34,500,000)

Total

Unit: Baht

184,132,172

43,408,593

43,408,593 -

43,408,593

31,140,844 173,587,554 (161,319,805) -

31,140,844

31,140,844 -

2,432,848,855

4,484,978,852 (2,052,129,997)

2,432,848,855

2,268,640,894 427,252,167 (364,379) (14,754) (262,665,073)

2,268,640,894

4,118,484,879 (1,849,843,985)

Total

Unit: Baht

6,696,317,791

184,132,172 12,493,432,750 - (5,755,279,574) (41,835,385)

184,132,172

Construction in progress

6,402,176

7,444,586 (4,816,874)

122,193,099

170,221,532 (135,045,469)

Company

2,584,199,659

Construction in progress

8,865,143 105,455,434 1,697,603 923,452,470 - (844,775,732) (1,358,466) (1) (2,802,103) -

Vehicle

5,279,925,986 331,095,990 18,787,587 (2,660,442,791) (208,233,177) (12,385,411) (35,283,536) (669,714) -

2,584,199,659

Tool, equipment and fixture

665,685,926

1,251,366,000 (583,297,939) (2,382,135)

665,685,926

1,578,545,202 849,650,086 497,073,975 12,789 (24,191,423) (3,070,993) (285,590,481) 1,770,504 (30,000,000)

Consolidated Tool, Utility Equipment system and fixture

576,981,544 100,247,154 62,554,064 (12,789) (8,544,815) (601,094) (64,200,455) 262,317 (1,000,000)

353,771,647 (92,031,778)

1,784,411,042

3,386,889,108 (1,598,978,066) (3,500,000)

1,784,411,042

1,595,533,703 144,751,364 194,667,602 (170,000) (310,243) (146,561,384) (3,500,000)

Cinema and cinema improvement

Buildings, cinema and cinema Improvement

1,207,739,635 21,444,531 989,891 170,000 (89,367,338) -

208,316,998 -

Building and building improvement

For the year ended 31 December 2013 Opening net book value Additions Transfer Reclassification Disposals, net Write-off, net Depreciation charge Reversal of impairment Impairment charge

Land

Property, plant and equipment, net (Contâ&#x20AC;&#x2122;d)

Major Cineplex Group Public Company Limited Notes to the Consolidated and Company Financial Statements For the year ended 31 December 2013

FINANCIALS

104 105

3,360,543,354 143,254,832 94,589,385

As at 31 December 2013, the costs of fully depreciated properties and equipments that are still in use are amounting to Baht 1,762.67 million (2012: Baht 1,780.07 million), and Baht 925.57 million (2012: Baht 921.34 million) in the consolidated and the company financial statements, respectively. As at 31 December 2013, the Group has pledged land and buildings with the net book value of Baht 37.57 million (2012: Baht 38.12 million) to be used pledged as collateral for debts or performance under the land and building rental contract. During 2013, additions in the consolidated financial statements included assets acquired under finance lease agreements amounting to Baht 422.40 million (2012: Baht 2.03 million). Leased assets included above, where the Group and the Company are lessees under finance lease, comprise lease space, motor vehicles and equipments:

Consolidated 2013 Cost - capitalised finance leases Less Accumulated depreciation Net book amount

1,422,928,041

610,167,936 (169,503,884)

27,852,687 (6,169,094)

21,906,697 (4,741,581)

21,906,697 (3,566,517)

440,664,052

21,683,593

17,165,116

18,340,180

Unit: Baht Consolidated 2013 2012 At 1 January Cost Less Allowance for impairment

342,112,936 (55,047,537)

342,112,936 -

Net book value

287,065,399

342,112,936

For the years ended 31 December Opening net book value Impairment

287,065,399 -

342,112,936 (55,047,537)

Closing net book value

287,065,399

At 31 December Cost Less Allowance for impairment

342,112,936 (55,047,537)

Net book value

287,065,399

Net book value

173,406,998

2012

Unit: Baht Company 2013 2012

Goodwill, net

349,043,463

1,173,672,721

3,647,914

5,563,821,338 (2,168,777,984) (34,500,000) 143,254,832 203,304,166 (108,714,781) At 31 December 2013 Cost Less Accumulated depreciation Allowance for impairment

173,406,998 -

2,380,057,344 (953,629,303) (3,500,000)

493,740,669 (143,697,206) (1,000,000)

2,159,417,653 (955,744,932) (30,000,000)

10,639,676 (6,991,762) -

3,360,543,354 143,254,832 94,589,385 Closing net book value

173,406,998

1,422,928,041

349,043,463

1,173,672,721

3,647,914

2,432,848,855 1,255,060,925 (2,196,846) (733,503) (289,936,077) (34,500,000) 43,408,593 794,954,722 (695,108,483) 2,849,552 1,697,603 (1) (899,240) 31,641,167 21,804,278 73,562,914 (211) (30,438) (32,388,325) For the year ended 31 December 2013 Opening net book value Additions Transfer Disposals, net Write-off, net Depreciation charge Impairment charge

173,406,998 -

1,239,561,726 133,534,389 168,360,984 (252,174) (114,776,884) (3,500,000)

263,066,097 71,445,831 44,900,848 (555,081) (28,814,232) (1,000,000)

678,914,722 231,624,102 408,283,737 (1,389,380) (703,064) (113,057,396) (30,000,000)

Construction in progress Vehicle Office equipment Tool, Equipment and fixture Land

Property, plant and equipment, net (Contâ&#x20AC;&#x2122;d)

Major Cineplex Group Public Company Limited Notes to the Consolidated and Company Financial Statements For the year ended 31 December 2013

Building, cinema and cinema improvements

Utility system

Company

Total

Unit: Baht

FINANCIALS

For the year ended 31 December 2013

106

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

107

287,065,399 212,832,027

Key assumptions used in the recoverable amount assessment include:

Gross margin1 Growth rate2 Discount rate3

52,746,610

342,112,936 (55,047,537) 262,832,027 (50,000,000) 52,746,610 -

287,065,399 212,832,027 52,746,610

342,112,936 (55,047,537) 262,832,027 (50,000,000) 52,746,610 -

Total

For the purposes of assessing impairment, assets are grouped at the lowest level of each identifiable cash flows (cash-generating unit). For goodwill of movie content segment which is significant to financial statements, the Group has engaged an independent certified financial advisor to assess the recoverable amount. The recoverable amount assessment is based on a ten-year pre-tax cash flow projection by referring to an approved financial and business plan by management.

1,327,239

For the year ended 31 December 2012 Opening net book value Additions Write-off Amortisation Impairment charge Closing net book value

Net book value

For the year ended 31 December 2012 Cost Less Allowance for impairment

15% 3% 12.9%

9% 3% 12.9%

6% 5% - 10% 13.4%

20% - 50% 3% 10.1%

Film rights

Net book value

Movie content business

Intangible assets, net

20,159,523

25,207,060 (5,047,537)

20,159,523

25,207,060 (5,047,537)

Rental and services business

Budgeted gross margin. Weighted average growth rate used to extrapolate cash flows beyond the budget period. Pre-tax discount rate applied to the cash flow projections.

At 1 January 2012 Cost Less Accumulated amortisation Allowance for impairment

For the year ended 31 December 2013 Cost Less Allowance for impairment

Bowling and Karaoke business

Management determined budgeted gross margin based on past performance and its expectations of market development. The weighted average growth rates used are consistent with the forecasts included in industry reports. The discount rates used are pre-tax and reflect specific risks relating to the relevant segments.

Goodwill allocation

Cinema business

These assumptions have been used for the analysis of each CGU within the business segment.

1,327,239 -

Advertising business

1,327,239 -

Cinema business

Unit : Baht

Movie content business Consolidated Bowing and Rental and Karaoke services business business

Goodwill is allocated to the Group’s cash-generating units (CGUs) identified according to business segment. A segment-level summary of the goodwill allocation is presented below.

Goodwill, net (Cont’d)

At 31 December 2012 Cost Less Accumulated amortisation Allowance for impairment Net book value

2,832,964,628 (2,385,411,902) (56,320,846)

Total

Unit: Baht Company Computer program

50,443,502 2,883,408,130 (16,915,425) (2,402,327,327) (56,320,846)

42,346,845 (12,284,415) -

Consolidated Computer program

391,231,880

33,528,077

424,759,957

30,062,430

391,231,880 420,686,803 (2,696,763) (482,901,412) (12,455,784)

33,528,077 31,959,077 (241,496) (10,887,084) (1,316,009)

424,759,957 452,645,880 (2,938,259) (493,788,496) (13,771,793)

30,062,430 29,500,709 (10,087,860) -

313,864,724

53,042,565

366,907,289

49,475,279

82,048,579 3,333,003,246 (27,690,005) (2,896,003,317) (1,316,009) (70,092,640)

71,847,554 (22,372,275) -

3,250,954,667 (2,868,313,312) (68,776,631) 313,864,724

53,042,565

366,907,289

49,475,279

Major Cineplex Group Public Company Limited Notes to the Consolidated and Company Financial Statements For the year ended 31 December 2013

FINANCIALS

For the year ended 31 December 2013

108

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

109

For the year ended 31 December 2013

Intangible assets, net (Contâ&#x20AC;&#x2122;d)

Film rights

Consolidated Computer program

Total

Unit: Baht Company Computer program

Deferred income taxes (Contâ&#x20AC;&#x2122;d) The movement in deferred tax assets and liabilities during the year is as follows: Unit: Baht

For the year ended 31 December 2013 Opening net book value Additions Amortisation Impairment charge Closing net book value At 31 December 2013 Cost Less Accumulated amortisation Allowance for impairment

53,042,565 18,893,660 (16,858,598) -

366,907,289 412,952,131 (397,386,845) (13,875,543)

49,475,279 17,043,978 (16,074,551) -

313,519,405

55,077,627

368,597,032

50,444,706

3,645,013,138 (3,248,841,559) (82,652,174)

Net book value

313,864,724 394,058,471 (380,528,247) (13,875,543)

313,519,405

100,942,239 3,745,955,377 (44,548,603) (3,293,390,162) (1,316,009) (83,968,183) 55,077,627

368,597,032

88,891,532 (38,446,826) 50,444,706

Deferred income tax assets and liabilities

Consolidated At 1 January 2013

Charged (credited) to profit or loss

FINANCIALS

For the year ended 31 December 2013

Charged directly to At 31 December equity 2013

Deferred tax assets Impairment loss of investment Depreciation Impairment loss of assets Fixed assets under finance lease contracts Prepaid rents Finance lease liabilities Employee benefit Provision for customers loyalty program Construction grants

600,000 2,295,344 -

(679,206) 6,900,000

600,000 1,616,138 6,900,000

40,008,723 422,340 4,435,811 2,913,479 3,374,000 6,066,380

(5,663,879) (24,568) 78,945,082 380,255 (514,000) 6,920,000

34,344,844 397,772 83,380,893 3,293,734 2,860,000 12,986,380

Total

60,116,077

86,263,684

146,379,761

The analysis of deferred tax assets and deferred tax liabilities are as follows:

Consolidated 2013

2012

Unit: Baht Company 2013 2012

Deferred tax liabilities Available-for-sale investment Investment in associates and joint ventures Amortisation Finance lease receivables Depreciation Prepaid rental and services income

(12,883,099)

(89,633,111)

(102,516,210)

(23,498,737) (6,640,588) (2,558,691) (32,119,473) (233,941,979)

(1,521,024) 1,845,609 2,265 (91,464,312) 12,576,008

(25,019,761) (4,794,979) (2,556,426) (123,583,785) (221,365,971)

Deferred tax assets: Deferred tax asset to be recovered within 12 months Deferred tax asset to be recovered after more than 12 months

6,881,653

7,711,083

641,858

476,441

139,498,108

52,404,994

29,828,484

16,503,497

Total

(311,642,567)

(78,561,454)

(89,633,111)

(479,837,132)

Total

146,379,761

60,116,077

30,470,342

16,979,938

Deferred tax, net

(251,526,490)

7,702,230

(89,633,111)

(333,457,371)

Deferred tax liabilities: Deferred tax liabilities to be settled within 12 months Deferred tax liability to be settled after more than 12 months

(14,423,882)

(21,703,169)

(922,672)

(324,952)

(465,413,250) (289,939,398) (121,148,012)

(29,310,133)

(479,837,132) (311,642,567) (122,070,684)

(29,635,085)

(333,457,371) (251,526,490)

(12,655,147)

Deferred tax, net

(91,600,342)

The gross movement and the deferred income tax account is as follows:

Consolidated 2013

2012

Unit: Baht Company 2013 2012

At 1 January Credited to profit or loss Tax charged directly to equity

(251,526,490) (228,493,767) 7,702,230 15,778,149 (89,633,111) (38,810,872)

(12,655,147) 10,687,916 (89,633,111)

19,728,004 6,427,721 (38,810,872)

At 31 December

(333,457,371) (251,526,490)

(91,600,342)

(12,655,147) 51

110

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

111

For the year ended 31 December 2013

Deferred income taxes (Cont’d)

The movement in deferred tax assets and liabilities during the year is as follows: (Cont’d)

At 1 January 2012 Deferred tax assets Available-for-sale investment Impairment loss of investment Depreciation Fixed assets under finance lease contracts Prepaid rents Finance lease liabilities Employee benefit Provision for customers loyalty program Construction grants Total

Unit: Baht

Consolidated Charged Charged (credited) to directly to At 31 December profit or loss equity 2012

Company Charged Charged (credited) to directly to At 31 December profit or loss Equity 2013

26,106,561 3,473,177

600,000 (1,177,833)

(26,106,561) -

600,000 2,295,344

46,198,880 436,433 4,391,338 2,554,425 3,703,000 -

(6,190,157) (14,093) 44,473 359,054 (329,000) 6,066,380

40,008,723 422,340 4,435,811 2,913,479 3,374,000 6,066,380

86,863,814

(641,176)

(26,106,561)

60,116,077

Deferred tax liabilities Available-for-sale investment Investment in associates and joint ventures Amortisation Finance lease receivables Depreciation Prepaid rental and services income

(178,788)

(12,704,311)

(12,883,099)

(29,693,985) (8,483,361) (2,470,468) (26,923,853) (247,607,126)

6,195,248 1,842,773 (88,223) (5,195,620) 13,665,147

(23,498,737) (6,640,588) (2,558,691) (32,119,473) (233,941,979)

Total

(315,357,581)

16,419,325

(12,704,311)

(311,642,567)

Deferred tax, net

(228,493,767)

15,778,149

(38,810,872)

(251,526,490)

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

Deferred income taxes (Cont’d) The movement in deferred tax assets and liabilities during the year is as follows: (Cont’d)

112

BUSINESSES

FINANCIALS

For the year ended 31 December 2013

At 1 January 2013 Deferred tax assets Impairment loss of investment Depreciation Provision for impairment of assets Finance lease liabilities Employee benefit Provision for customers loyalty program Construction grants

600,000 768,777 4,084,432 2,086,348 3,374,000 6,066,380

(127,858) 6,900,000 46,320 265,943 (514,000) 6,920,000

600,000 640,919 6,900,000 4,130,752 2,352,291 2,860,000 12,986,380

16,979,937

13,490,405

30,470,342

Deferred tax liabilities Available-for-sale investment Amortisation Depreciation

(12,883,099) (407,322) (16,344,663)

(515,350) (2,287,139)

(89,633,111) -

(102,516,210) (922,672) (18,631,802)

Total

(29,635,084)

(2,802,489)

(89,633,111)

(122,070,684)

Deferred tax, net

(12,655,147)

10,687,916

(89,633,111)

(91,600,342)

Total

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

113

For the year ended 31 December 2013

Deferred income taxes (Contâ&#x20AC;&#x2122;d)

The movement in deferred tax assets and liabilities during the year is as follows: (Contâ&#x20AC;&#x2122;d)

Consolidated 2013

Unit: Baht

At 1 January 2012 Deferred tax assets Available-for-sale investment Impairment loss of investment Depreciation Impairment loss of assets Fixed assets under finance lease contracts Employee benefit Provision for customers loyalty program Construction grants

Company Charged Charged (credited) to directly to At 31 December profit or loss Equity 2012

26,106,561 916,218 -

600,000 (147,441) -

(26,106,561) -

600,000 768,777 -

4,047,976 1,838,319 3,703,000 -

36,456 248,029 (329,000) 6,066,380

4,084,432 2,086,348 3,374,000 6,066,380

36,612,074

6,474,424

(26,106,561)

16,979,937

Deferred tax liabilities Available-for-sale investment Amortisation Depreciation

(178,788) (732,274) (15,973,008)

324,952 (371,655)

(12,704,311) -

(12,883,099) (407,322) (16,344,663)

Total

(16,884,070)

(46,703)

(12,704,311)

(29,635,084)

19,728,004

6,427,721

(38,810,872)

(12,655,147)

Total

Deferred tax, net

The financial position of deferred tax assets and liabilities is as follows:

Consolidated 2013

2012

Unit: Baht Company 2013 2012

Deferred tax assets Deferred tax liabilities

316,412 253,259 (333,773,783) (251,779,749)

(91,600,342)

(12,655,147)

Deferred tax, net

(333,457,371) (251,526,490)

(91,600,342)

(12,655,147)

114

Prepaid rents

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

2012

Unit: Baht Company 2013 2012

Current portion Long-term portion

34,153,853 487,283,860

34,653,397 520,938,169

9,472,507 159,403,371

9,472,507 168,875,879

Total prepaid rents

521,437,713

555,591,566

168,875,878

178,348,386

FINANCIALS

ORGANIZATION

For the year ended 31 December 2013

As at 31 December 2013, leasehold rights with the net book value of Baht 22.80 million (2012: Baht 24.00 million) are pledged as collateral for bank borrowings (Note 21).

Other non-current assets, net

Consolidated 2013 Deposits Others

2012

Unit: Baht Company 2013 2012

227,671,185 116,008,751

137,624,983 12,548,288

116,373,421 114,612,640

106,207,283 11,904,403

343,679,936

150,173,271

230,986,061

118,111,686

Trade account and other payables

Consolidated 2013 Trade account payables Amounts due to related parties (Note 36) Other payables Accrued expenses Rental and service incomes received in advance Trade account and other payables

620,359,485 72,947,147 473,006,746 255,721,999 314,346,777

2012

642,280,408 35,392,103 275,803,012 334,915,638 239,051,434

Unit: Baht Company 2013 2012 481,790,127 99,652,944 326,997,300 130,725,100 179,350,506

443,585,649 114,534,989 128,694,051 120,693,630 137,610,522

1,736,382,154 1,527,442,595 1,218,515,977

945,118,841

Rental and service incomes received in advance included cash advanced from customers amounting to Baht 49.74 million (2012: Baht 58.41 million), which received from selling of cash cards, being deposited at banks. In order to comply with the Notification of the Bank of Thailand applicable to the electronic card business, the balance of the deposit has to be maintained at the outstanding value of the cash cards on hands of the customers as the minimum.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

115

FINANCIALS

For the year ended 31 December 2013

Borrowings

Consolidated 2013 Current Bank overdrafts Short-term loans from financial institutions Total bank overdrafts and short-term loans from financial institutions

2012

Unit: Baht Company 2013 2012

Borrowings (Cont’d)

The exposure of the Group’s and the Company’s borrowings (excluded finance leases liabilities) to interest rate changes and the contractual re-pricing dates at the statement of financial position dates are as follows: Unit: Baht

60,418,172 2,178,510,000 2,238,928,172

36,668,051 703,160 764,800,000 1,545,000,000

200,000,000

801,468,051 1,545,703,160

200,000,000

Current portion of long-term borrowings: - Finance lease liabilities - Bank borrowings - Debentures

71,922,239 131,924,271 -

1,336,177 79,454,328 800,000,000

264,935 40,000,000 -

297,642 40,000,000 800,000,000

Total current portion of long-term borrowings

203,846,510

880,790,505

40,264,935

840,297,642

6 months or less

Consolidated 6 - 12 months 1 - 5 years

FINANCIALS

For the year ended 31 December 2013

Total

At 31 December 2013

2,198,510,000

20,000,000 1,860,000,000 4,078,510,000

Total borrowings

2,198,510,000

20,000,000 1,860,000,000 4,078,510,000

At 31 December 2012

1,584,800,000

20,000,000 1,100,000,000 2,704,800,000

Total borrowings

1,584,800,000

20,000,000 1,100,000,000 2,704,800,000 Unit: Baht

Non-current portion of long-term borrowings - Finance lease liabilities - Bank borrowings - Debentures

443,408,418 24,035,538 21,137,363 21,402,298 108,453,231 145,660,467 60,000,000 100,000,000 1,800,000,000 1,000,000,000 1,800,000,000 1,000,000,000

Total non-current portion of long-term borrowings Total borrowings and debentures

Company 6 months or less 6 - 12 months

1 - 5 years

Total

At 31 December 2013

1,565,000,000

20,000,000 1,860,000,000 3,445,000,000

2,351,861,649 1,169,696,005 1,881,137,363 1,121,402,298

Total borrowings

1,565,000,000

20,000,000 1,860,000,000 3,445,000,000

4,794,636,331 2,851,954,561 3,467,105,458 2,161,699,940

At 31 December 2012

1,020,000,000

20,000,000 1,100,000,000 2,140,000,000

Total borrowings

1,020,000,000

20,000,000 1,100,000,000 2,140,000,000

The interest rates exposure on the borrowings of the Group and the Company (excluded finance leases liabilities) are as follows:

The effective interest rates at the statement of financial position date are as follows: Consolidated 2013 Borrowings: - Fixed rates - Floating rates

2012

Unit: Baht Company 2013 2012

4,078,510,000 2,704,800,000 3,445,000,000 2,140,000,000 200,795,674 121,782,846 703,160 -

Consolidated 2013 - Bank overdrafts - Bank borrowings - Debentures

7.38% - 8.00% 2.86% - 6.75% 3.54% - 4.60%

2012

7.38% - 7.90% 3.08% - 7.00% 2.99% - 4.60%

Company 2013 7.38% - 8.00% 2.86% - 4.60% 3.54% - 4.60%

2012

3.08% - 4.62% 2.99% - 4.60%

4,279,305,674 2,826,582,846 3,445,703,160 2,140,000,000

116

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

117

FINANCIALS

For the year ended 31 December 2013

Borrowings (Contâ&#x20AC;&#x2122;d)

The carrying amounts and fair values of certain long-term borrowings (excluded finance leases liabilities) are as follows:

Borrowings (Contâ&#x20AC;&#x2122;d)

The present value of finance lease liabilities is as follows:

Unit: Baht Consolidated Carrying amounts 2013 2012 Long-term bank borrowings Debentures

Fair values 2013

2012

Consolidated 2013 Not later than 1 year Later than 1 year

108,453,231 145,660,467 107,297,645 179,407,556 1,800,000,000 1,000,000,000 1,824,643,350 1,001,570,580 1,908,453,231 1,145,660,467 1,931,940,995 1,180,978,136

2012

71,922,239 443,408,418

1,336,177 24,035,538

264,935 21,137,363

297,642 21,402,298

515,330,657

25,371,715

21,402,298

21,699,940

The movements in bank borrowings (exclude finance lease liabilities) can be analysed as follows:

Unit: Baht Consolidated 2013

Company Carrying amounts 2013 2012 Long-term bank borrowings Debentures

Fair values 2013

2012

60,000,000 100,000,000 58,844,414 133,747,089 1,800,000,000 1,000,000,000 1,824,643,350 1,001,570,580

Opening balance Additions Repayments

1,860,000,000 1,100,000,000 1,883,487,764 1,135,317,669

Closing balance

The fair values are based on discounted cash flows using a discount rate based upon the borrowing rate which the management expects would be available to the Group and the Company at the statement of financial position date. The carrying amounts of short-term borrowings, and lease obligations approximate their fair values.

Maturity of bank borrowings is as follows:

Finance lease liabilities-minimum lease payments are as follows:

Between 1 year and 2 years Between 2 years and 5 years

Consolidated 2013 Not later than 1 year Later than 1 year but not later than 5 years Later than 5 years

2012

Unit: Baht Company 2013 2012

92,800,133 449,965,161 62,052,420

3,300,369 10,611,218 48,072,405

1,979,656 6,715,163 45,602,210

1,995,006 8,694,819 45,602,210

604,817,714

61,983,992

54,297,029

56,292,035

Less Future finance charges on finance leases

(89,487,057)

(36,612,277)

(32,894,731)

(34,592,095)

Present value of finance lease liabilities

515,330,657

25,371,715

21,402,298

21,699,940

118

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

Unit: Baht Company 2013 2012

FINANCIALS

For the year ended 31 December 2013

Within 1 year

2012

Unit: Baht Company 2013 2012

225,114,795 123,990,000 (108,727,293)

187,655,411 91,800,000 (54,340,616)

140,000,000 (40,000,000)

180,000,000 (40,000,000)

240,377,502

225,114,795

100,000,000

140,000,000

131,924,271

79,454,328

40,000,000

88,453,231 20,000,000

74,321,079 71,339,388

40,000,000 20,000,000

40,000,000 60,000,000

108,453,231

145,660,467

60,000,000

100,000,000

240,377,502

225,114,795

100,000,000

140,000,000

Short-term loans from financial institutions represent bills of exchange and promissory notes denominated in Thai Baht bearing interest at the rates ranging from 2.86% to 6.50% per annum (2012: 3.08% to 6.50% per annum). Long-term bank borrowings bear interest at the rates ranging from 4.60% to 6.75% per annum (2012: 4.60% to 7.00% per annum) and are secured by the pledge of building and leasehold rights (Note 14 and Note 18). Lease liabilities are effectively secured as the right to the leased asset revert to lessor in the event of default.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

119

FINANCIALS

For the year ended 31 December 2013

Borrowings (Cont’d)

Employee benefit obligations The amounts recognised in the statement of financial position are as follows:

Debentures Consolidated

Unit: Baht Company

Opening amount Issuance of debenture Repayment of debenture

1,800,000,000 800,000,000 (800,000,000)

Closing amount

1,800,000,000

Consolidated 2013

2012

Unit: Baht Company 2013 2012

Present value of unfunded obligation

22,919,045

18,869,662

16,006,045

10,431,741

Liability in the statement of financial position

22,919,045

18,869,662

16,006,045

10,431,741

FINANCIALS

For the year ended 31 December 2013

The movement in the defined benefit obligation over the year is as follows: During 2013, the Company issued unsubordinated debenture of Baht 800.00 million. The debenture is one-time return the principal on maturity date, unsecured, with a representative of the bondholders. The term of the debenture is 3 years from the issuance date. The interest rate is 3.54% per annum. The Company received considerations of Baht 800.00 million on 15 May 2013. The Company used proceeds from the debentures to repay bank borrowings.

Consolidated 2013

The Company issued a straight, unsecured and unsubordinated Baht debentures at par value of Baht 1,000 per unit. Details of the debentures are as follows:

Term

Issue date

Maturity date

Debentures Baht Million

3 years 5 years 3 years

9 April 2010 10 August 2012 15 May 2013

17 May 2013 10 August 2017 15 May 2016

800 1,000 800

Fixed interest rate (%) per annum

At 1 January Current service cost Interest cost Acturial losses

18,869,662 731,896 584,464 2,733,023

16,532,500 1,820,147 517,015 -

10,431,741 937,867 391,845 4,244,592

9,191,596 895,591 344,554 -

At 31 December

22,919,045

18,869,662

16,006,045

10,431,741

The amounts recognised in the income statements are as follows:

3.35 4.60 3.54

Consolidated 2013

2012

Unit: Baht Company 2013 2012

Interest is due for payment every three-month and six-month periods. The Company has to maintain the debt to equity ratio at the ratio stipulated in the prospectus.

Current service cost Interest cost Acturial losses

731,896 584,464 2,733,023

1,820,147 517,015 -

937,867 391,845 4,244,592

895,591 344,554 -

The Company used proceeds from the debentures to repay borrowings from financial institutions, for operation and expansion of its business.

Total, included in staff costs

4,049,383

2,337,162

5,574,304

1,240,145

Borrowing facilities

Of the total charge, Baht 4.05 million and Baht 5.57 million (2012: Baht 2.34 million and Baht 1.24 million) are included in “administrative expenses” in consolidated and company financial statements, respectively. The principal actuarial assumptions used are as follows:

As at 31 December 2013, the available credit facilities from financial institutions of the Group and the Company are Baht 2,295.70 million, and Baht 1,879.30 million, respectively, (2012: Baht 4,843.42 million, and Baht 4,375.00 million, respectively). The facilities expiring within 3 years are annual facilities subject to review at various dates during years which will mainly be used for cinema construction and working capital.

2012

Unit: Baht Company 2013 2012

Consolidated 2013 Discount rate Inflation rate Future salary increases

Other current liabilities Consolidated 2013 Undue output value added tax Provision for customers loyalty program Provision for goods returned Others

2012

Unit: Baht Company 2013 2012

37,452,732 14,300,000 30,152,640 27,508,433

50,210,515 16,870,000 28,943,703 41,796,506

12,711,978 14,300,000 11,703,423

11,567,131 16,870,000 8,154,830

109,413,805

137,820,724

38,715,401

36,591,961

2012

Company 2013

2012

4.10% 3.80% 4.10% 3.80% 3.00% 3.00% 3.00% 3.00% 3.00% - 9.00% 3.00% - 9.00% 3.00% - 9.00% 3.00% - 9.00%

Other non-current liabilities Consolidated 2013 Deposit received Rental and services income received in advance Construction grants

2012

Unit: Baht Company 2013 2012

221,778,071

209,904,513

21,995,010

22,106,514

183,612,817 64,931,900

206,611,088 38,331,900

64,931,900

38,331,900

470,322,788

454,847,501

86,926,910

60,438,414

During 2013, the Company received construction grants from the lessors amounting to Baht 28.60 million (2012: Baht 38.40 million). Such amount is recognised as a discount rental fee based on period of lease agreements in consolidated and company financial statements. 61

120

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

121

For the year ended 31 December 2013

Share capital and premium on share capital

26 Authorised number of shares

Issued and fully paid-up Ordinary Share Number of shares premium shares Baht Baht

At 1 January 2012 Issuance of shares - Reserve for exercise of warrants - ESOP-W4 - Exercised warrant - ESOP-W3 Share reduction

906,000,000

881,897,219

881,897,219 3,839,673,605

8,690,000 (10,189,010)

5,679,124 -

At 31 December 2012 Share reduction

904,500,990 (8,234,643)

887,576,343 -

887,576,343 3,919,499,372 -

At 31 December 2013

896,266,347

887,576,343

887,576,343 3,919,499,372

5,679,124 -

79,825,767 -

The total authorised number of ordinary shares is 896,266,347 shares (2012: 904,500,990 shares) with a par value of Baht 1 per share (2012: Baht 1 per share). The issued and fully paid-up ordinary shares is 887,576,343 shares (2012: 887,576,343 shares). At the Annual General Shareholders Meeting held on 3 April 2013, the shareholders approved the reduction of registered share capital from Baht 904,500,990 to Baht 896,266,347 by eliminating remaining unissued shares of the company for 8,234,643 shares at a par of Baht 1 per share totalling Baht 8,234,643 because of the expiration of warrants (ESOP-W3). The Company registered the decrease of share capital with the Ministry of Commerce on 24 July 2013.

Share-based payment - Warrants

26.1 Warrants issued and offered to employees of the Company (ESOP) The Company issued and offered grants of warrants to employees (ESOP) of the Company and its subsidiaries, which are in registered form and are non-transferable. The warrants have no offered price and their terms do not exceed 5 years from the issued date.

FINANCIALS

For the year ended 31 December 2013

The exercise ratio and price on issued date are detailed belows:

Issued date ESOP-W4

10 April 2012

Issued units Million

Exercise price Baht/unit

8.69

15.440

Exercise period Start End 30 June 2014

9 April 2017

The exercise prices and ratio of warrants are as follows:

ESOP-W4

Exercise Ratio unit/share

Exercise price Baht/unit

1.017

15.182

26.2 Warrants issued and offered to employees of a subsidiary (ESOP)

At the Annual General Shareholders Meeting dated 3 April 2012, the shareholders approved the reduction of registered share capital from Baht 906,000,000 to Baht 895,810,990 by eliminating remaining unissued shares of the Company for 10,189,010 shares at a par of Baht 1 per share.

The subsidiary issued and offered grants of warrants to employees (ESOP) of the subsidiaries, which are in registered form and are non-transferable. The warrants have no offered price and their terms do not exceed 5 years from the issued date.

At the Annual General Shareholders Meeting dated 3 April 2012, the shareholders approved the increase of registered share capital from Baht 895,810,990 to Baht 904,500,990 by issuing new ordinary shares of 8,690,000 shares at a par value of Baht 1 per share to reserve for exercise of warrants (ESOP-W4). The Company registered the decrease and increase of share capital with the Ministry of Commerce on 12 April 2012 and 17 April 2012, respectively.

The exercise ratio and price on issued date are detailed below:

During 2012, warrants (ESOP-W3) have been excerised 5,679,124 options totalling Baht 85,504,891 including share premium of Baht 79,825,767.

ESOP-W1

Issued date 10 April 2012

Issued units Million

Exercise price Baht/unit

4.42

1.590

Exercise period Start End 30 June 2014

23 April 2017

The exercise prices and ratios of warrants are as follows: Share premium - Treasury share During 2009, the Company repurchased 40.91 million shares through the Stock Exchange of Thailand. The total amount paid to repurchase of the shares was Baht 267.92 million which has been presented as treasury shares under the shareholders’ equity. The treasury shares are held for reissuance at a later date. The Company allocated retained earnings as a reserve for treasury shares amounting to Baht 267.92 million in accordance with section 66/1(2) of the Security and Exchange Act B.E. 2535 which requires the Company to set aside retained earnings as reserve.

ESOP-W1

Exercise Ratio unit/share

Exercise price Baht/unit

1.000

1.590

During 2011, the Company sold all treasury shares for the considerations of Baht 556.34 million, gain from disposal of treasury shares amounting to Baht 288.42 million is recognised as “Share premium - treasury shares” under Shareholders’ equity.

122

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

123

For the year ended 31 December 2013

Share-based payment - Warrants (Cont’d)

Movements in the number of warrants outstanding and their related weighted average exercise prices are as follows: Consolidated Company Average Average exercise price exercise price Baht per share Option Baht per share At 1 January 2012 Granted by the Company ESOP - W4 by the subsidiary ESOP - W1 Exercised by the Company ESOP - W3 Expired by the Company ESOP - W3

12,489,920

16.45

12,489,920

15.44 1.59

8,690,000 4,424,625

15.44 -

8,690,000 -

15.05

(5,097,960)

15.05

(5,097,960)

15.05

(7,391,960)

15.05

(7,391,960)

13,114,625

At 31 December 2012 At 1 January 2013 Forfeited by the subsidiary ESOP - W1 Change in condition of warrants by the Company ESOP - W4 At 31 December 2013

Condition of warrants Exercise price (Baht per share) Exercise ratio (Unit per share) Variable Fair value of warrant (Baht per option) Volatility (%) Dividend yield (%) Weighted average share price at the grant date (Baht per share) Expected option life (year) Risk-free interest rate (%)

8,690,000

10.77

13,114,625

15.44

8,690,000

1.59

(2,436,750)

15.18

(120,000)

15.18

(120,000)

10,557,875

During the year ended 31 December 2013, there is no change in the condition of warrants (ESOP - W4 and ESOP - W1). However, the Company made a dividend payment higher than the dividend rate that met the condition as stipulated in the condition of warrants, resulted to change the exercise price and assumptions using the Black-Scholes valuation model as follows:

Option

16.45

ESOP - W4 ESOP - W1 Original As adjusted Original 15.440 15.182 1.590 1:1 1 : 1.017 1:1 Original Adjusted Original assumptions assumptions assumptions 3.90 - 4.69 5.58 - 6.00 0.28 - 0.65 32.01 - 37.58 24.34 - 29.67 37.15 - 62.70 4.41 - 6.55 4.72 – 5.23 2.12 18.20 2.22 - 4.22 3.39 - 3.59

21.30 1.33 - 3.33 2.76 - 2.94

1.49 2.18 - 4.18 3.34 - 3.47

Volatility is derived from historical fluctuation of MAJOR and MPIC stock price. Historical period under consideration is based on remaining life of MAJOR-ESOP-W4 and MPIC-ESOP-W1, given that value of MAJOR-ESOP-W4 and MPIC-ESOP-W1 will rise when there is high fluctuation of MAJOR and MPIC stock price, respectively.

8,570,000

As at 31 December 2013, the Group and the Company recognised the value of warrants over the vesting period. the amount of Baht 12,250,759 and Baht 12,089,867, respectively, are recognised as an expense in the consolidated and company income statements with a corresponding credit to the consolidated and company equity.

During 2012, warrants (ESOP-W3) of 5,097,960 options have been exercised amount of Baht 85,504,891 (Note 25). The remaining warrants of 7,391,960 options have been expired on 15 November 2012. As at 31 December 2013, the Company and its subsidiary have 8,570,000 and 1,987,875 outstanding warrants, respectively, exercisable (2012: the Company and its subsidiary have 8,690,000 and 4,424,625 outstanding warrants respectively). No option was exercisable until 30 June 2014.

Share-based payment - Warrants (Cont’d)

FINANCIALS

For the year ended 31 December 2013

Legal reserve

Under the Public Limited Company Act B.E. 2535, the Company is required to set aside as a legal reserve at least 5% of its net profit after accumulated deficit brought forward (if any) until the reserve is not less than 10% of the registered capital of the Company. The reserve is non-distributable.

Non-controlling interest Unit: Baht Consolidated 2013 2012 Opening balance Addition of investment in subsidiary by purchasing share from non-controlling interest Share of profit from subsidiaries Dividend payment Closing balance

87,145,414

156,876,010

(63,508,816) (27,286,330) -

(3,546,664) (55,313,258) (10,870,674)

(3,649,732)

87,145,414

65 66

124

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

125

FINANCIALS

For the year ended 31 December 2013

Other operating income Consolidated 2013 Dividend income Gains on disposals of property, plant and equipment Gains on disposals of investments (Note 13) Management fee income Interest income Gain on exchange rate Property tax income Compensation income Others

Unit: Baht Company 2013 2012

1,296,070

2,779,970

136,954,303

162,309,542

(2,646,850) 221,482,416 46,567,793 12,804,745 939,520 24,425,915 12,935,954 21,928,943

6,100,475 213,671,224 43,876,614 19,011,178 3,093,939 25,124,574 67,828,723 51,208,347

231,444,476 44,036,616 66,694,384 3,062,213 12,935,954 14,660,200

6,871,861 255,606,643 42,367,554 82,384,322 1,028,477 3,175,701 57,961,638 16,767,532

339,734,506

432,695,044

509,788,146

628,473,270

Expenses by nature Consolidated 2013 Depreciation of property and equipment (Note 14) Amortisation of intangible assets - Film rights (Note 16) - Computer software (Note 16) Amortisation of prepaid rents Impairment of investment (Note 13) Impairment of goodwill (Note 15) Impairment of assets (Notes 14 and 16) Repairs and maintenance expenditure Staff costs Loss from written-off of property, plant, equipment and intangible assets Doubtful debts and bad debts (reversal) Loss on diminution in value of inventories Loss on goods returns (reversal) Inventory - Cost of inventories recognised as expense (included in “Cost of sales”)

2012

633,590,299

2012

554,609,946

Unit: Baht Company 2013 2012 289,936,077

380,528,247 16,858,598 34,153,853 -

482,901,412 10,887,084 34,390,586 55,047,537

16,074,551 9,472,508 -

10,087,860 9,472,507 3,000,000 -

46,342,721 78,099,404 820,064,550

16,740,031 60,418,305 693,374,686

34,500,000 45,461,481 475,636,731

31,076,737 372,550,412

3,705,080 2,434,125 (12,861,069) (1,208,937)

50,459,167 13,818,766 32,951,984 (23,473,259)

733,503 (37,810) -

14,754 1,069,133 -

429,776,738

500,403,367

280,478,916

2012

246,943,842

Unit: Baht Company 2013 2012

57,166,734 1,458,003 16,601,982 73,786,748

53,130,009 1,983,531 77,973,831

22,449,754 23,888,522 1,697,364 73,786,747

17,316,040 5,857,089 1,692,789 77,973,832

149,013,467

133,087,371

121,822,387

102,839,750

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

2012

Current tax: Current tax on profits for the year Adjustments in respect of prior year

283,010,825 1,004,929

281,510,506 404,208

180,533,696 922,495

191,126,733 251,489

Total current tax

284,015,754

281,914,714

181,456,191

191,378,222

(7,702,230)

(15,778,149)

(10,687,916)

(6,427,721)

Total deferred tax

(7,702,230)

(15,778,149)

(10,687,916)

(6,427,721)

Total tax expense

276,313,524

266,136,565

170,768,275

184,950,501

Deferred tax: Origination and reversal of temporary differences Impact of change in tax rate

The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the basic tax rate of the home country of the company as follows:

Consolidated 2013 Profit before tax

Consolidated 2013

126

Consolidated 2013

Unit: Baht Company 2013 2012

2012

Unit: Baht Company 2013 2012

262,665,073

Finance costs

Interest expenses: Bank borrowings Borrowings from subsidiaries and associates Finance lease Debentures

Income tax

FINANCIALS

For the year ended 31 December 2013

Tax calculated at a tax rate of 20% (2012: 23%) Tax effect of: Associate and joint ventures results reported net of tax Income not subject to tax Expenses not deductible for tax purpose Expense that are deductible at a greater amount from actual expenses Utilisation of previously unrecognised tax losses Tax losses for which no deferred income tax asset was recognised Unrealised losses from intercompany transaction Re-measurement of deferred tax - change in tax rate Adjustment in respect of prior year Tax charge

1,300,654,682

1,056,842,857

963,021,314

941,410,857

260,130,936

243,073,857

192,604,263

216,524,497

(36,423,379) (25,781,649) 20,836,542

(46,742,417) (48,600,751) 43,968,247

(25,781,650) 4,550,936

(37,331,194) 5,080,175

(1,689,654)

(578,010)

(1,527,769)

(479,509)

(8,827,325)

(1,361,420)

31,245,234

23,300,184

35,805,595

52,269,929

12,295 1,004,929

402,738 404,208

922,495

905,043 251,489

276,313,524

266,136,565

170,768,275

184,950,501

The weighted average applicable tax rate was 21% (2012: 25%). The decrease is caused by a change in corporate income tax rate announced by the Government.

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

127

For the year ended 31 December 2013

Income tax (Contâ&#x20AC;&#x2122;d)

The tax (charge) credit relating to component of other comprehensive income is as follows:

For the year ended 31 December 2013

Consolidated and Company 2013

2012

Before tax Baht

Tax (charge) credit Baht

After tax Baht

Before tax Baht

Tax (charge) credit Baht

After tax Baht

Fair value gains: Short-term investment Available-for-sale financial asset

448,165,556

(89,633,111)

358,532,445

(777,338) 194,948,301

178,788 (38,989,660)

(598,550) 155,958,641

Other comprehensive income

448,165,556

(89,633,111)

358,532,445

194,170,963

(38,810,872)

155,360,091

Current tax Deferred tax

Dividends

(89,633,111)

178,788 (38,989,6660)

(89,633,111)

(38,810,872)

At the Board of Directors Meeting held on 9 August 2013, the directors passed the resolution to approve interim dividends in respect of the operating results for the period from January to June 2013 at Baht 0.50 per share, totalling Baht 443.78 million. The dividends were distributed to shareholders listed in the register on 28 August 2013. The dividends were distributed to the shareholders on 6 September 2013.

FINANCIALS

For the year ended 31 December 2013

At the Board of Directors Meeting held on 15 February 2013, the directors passed a resolution to approve dividends in respect of the operation results for the period from July to December 2012 at Baht 0.48 per share, totalling Baht 425.95 million. The dividends were distributed to the shareholders listed in the register on 5 March 2013 that approved by the Annual Ordinary Shareholders Meeting on 3 April 2013. The dividends were distributed to the shareholders on 2 May 2013. For the year ended 31 December 2012 At the Board of Directors Meeting held on 14 August 2012, the directors passed a resolution to approve interim dividends in respect of the operating results for the period from January to June 2012 at Baht 0.39 per share, totalling Baht 344.96 million. The dividends were distributed to shareholders listed in the register on 28 August 2012. The dividends were distributed the shareholders on 11 September 2012.

Earnings per share Basic earnings per share is calculated by dividing the profit attributable to shareholders by the weighted average number of paid-up ordinary shares in issue during the year. The diluted earnings per share is calculated adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has one category of dilutive potential ordinary shares: warrants (as detailed in Note 26). A calculation of warrants is made to determine the number of shares that could have been acquired at fair value based on the monetary value of the subscription rights attached to outstanding warrants. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the warrants. The difference is added to the denominator as an issue of ordinary shares for no consideration.

At the Board of Directors Meeting held on 16 February 2012, the directors passed a resolution to approve dividends in respect of the operating results for the period from July to December 2011 at Baht 0.39 per share, totalling Baht 343.94 million. The dividends were distributed to the shareholders listed in the register on 5 March 2012 that approved by the Annual Ordinary Shareholders Meeting on 3 April 2012. The dividends were distributed the shareholders on 2 May 2012.

The basic earnings per share and the diluted earnings per share are as follows:

For the years ended 31 December

Profit Baht 2013

Consolidated Weighted average number of shares shares 2013 2012

2012

Earnings per share Baht 2013 2012

Basic earnings per share The effect of dilutive potential shares

1,051,627,488

846,019,550

887,576,343

884,194,660

1.18

0.96

1,880,039

2,806,472

(0.01)

Diluted earnings per share

1,051,627,488

846,019,550

889,456,382

887,001,132

1.18

0.95

For the years ended 31 December

Profit Baht 2013

Basic earnings per share The effect of dilutive potential shares

792,253,039

Diluted earnings per share

792,253,039

2012

Company Weighted average number of shares shares 2013 2012

756,450,356 887,576,343 884,194,660

Earnings per share Baht 2013 2012 0.89

0.86

2,806,472

(0.01)

756,450,356 889,456,382 887,001,132

0.89

0.85

1,880,039

128

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

129

FINANCIALS

For the year ended 31 December 2013

Cash flows from operating activities

Reconciliation of net profit to cash flows from operating activities:

Notes Profit before income tax Adjustments for: Depreciation and amortisation Doubtful accounts and bad debts (reversal) Provision for goods returns (reversal) Loss on diminution in value of inventories (reversal) Loss from allowance for doubtful of interest receivable Loss on impairment of investment in subsidiary Loss on impairment of assets Loss on impairment of goodwill Loss on written-off of assets Loss (gain) on disposals of property, plant and equipment Loss on write-off of property, plant and equipment and intangible assets Shares of profit from associates and joint ventures Gain on disposals of investment in subsidiaries, associates and joint venture Gain on disposal of short-term investment Provision for loyalty program Provision for employee benefit Warrants Dividend income Interest income Finance costs Changes in operating assets and liabilities: - trade account and other receivable - inventories - films under production - other current assets - receivables under finance lease agreements - accounts receivable long-term contract - other non-current assets - trade account and other payables - other current liabilities - other non-current liabilities Cash flows from operating activities

30 30 30 11

13 15

Consolidated 2013

2012

Unit: Baht Company 2013 2012

1,300,654,682 1,056,842,857

963,021,314

941,410,857

1,065,282,397 1,082,789,028

315,483,135

282,225,440

2,434,125 (1,208,937)

13,818,766 (23,473,259)

(37,810) -

1,069,134 -

(12,861,069)

32,951,984

68,000

46,342,721 -

16,740,031 55,047,537 4,928,913

34,500,000 -

(6,894,392)

999,262

(6,871,861)

3,705,080

50,459,167

733,503

14,754

(189,156,607) (176,292,034)

(221,482,416) (210,266,963) (231,444,477) (252,202,382)

22 23 26 29 29 31

(2,570,000) 4,049,383 12,250,759 (1,296,070) (12,804,745) 149,013,467

(3,404,261) (3,404,261) 770,000 (2,570,000) 770,000 2,337,162 5,574,304 1,240,145 9,191,064 12,089,867 8,900,000 (2,779,970) (136,954,303) (162,309,542) (19,011,178) (66,694,384) (82,384,322) 133,087,371 121,822,387 102,839,750

310,574,097 (236,834,644) (29,806,277) (11,441,853) (22,714,409) (20,626,329) 88,393,708 6,401,103 54,401 20,132,597 (103,685,614) (783,872,677) (74,753,755) 15,475,287

181,887,901 (20,248,665) 18,283,685

42,049,015 (4,855,031) 9,490,477

(400,776) 18,656,177 20,132,597 18,656,177 3,035,752 (120,366,138) 2,800,038 (6,579,993) (460,317,747) (118,807,204) 19,069,128 4,693,440 (7,014,943) 12,325,178 26,488,498 40,185,513

1,572,529,521 1,800,445,566

667,076,369

Enterprises and individuals that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the Group, including holding companies, subsidiaries and fellow subsidiaries are related parties of the Group. Associates and individuals owning, directly or indirectly, an interest in the voting power of the Group that gives them significant influence over the enterprise, key management personnel, including directors and officers of the Group and close members of the family of these individuals and companies associated with these individuals also constitute related parties. In considering each possible related-party relationship, attention is directed to the substance of the relationship, and not merely the legal form. Other related companies are companies belonging to directors and directors’ family of the Company and is therefore related parties. The following transactions were carried out with related parties: i)

Sales of goods and services and others Consolidated 2013

3,000,000 -

10,311,393 14, 16

Related-party transactions

Sales of goods and services Subsidiaries Associates Leasehold property fund Joint ventures Related parties

ii)

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

3,508 62,994 3,798 57,528

282,993 28,005 143,545 7,236 8,525

313,531 17,075 143,532 677 10,805

150,980

127,828

470,404

485,620

22,811

614 -

7,160

22,811

614

7,160

Purchase of goods and services and others Consolidated 2013 Purchases of goods and services Subsidiaries Associates Leasehold property fund Joint ventures Related parties

Purchases of fixed assets Subsidiaries

Management’s remunerations Management

130

2012

Unit: Baht’000 Company 2013 2012

6,145 62,309 14,094 68,432

Sale of equipment Subsidiaries Joint ventures

816,801,754

FINANCIALS

For the year ended 31 December 2013

2012

Unit: Baht’000 Company 2013 2012

31,229 144,059 375 150,962

41,837 142,744 124,558

230,505 24,396 112,721 20 139,139

175,584 31,604 103,873 109,377

326,625

309,139

506,781

420,438

50,813

46,104

33,938

25,974

50,813

46,104

33,938

25,974

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

131

FINANCIALS

For the year ended 31 December 2013

Related-party transactions (Cont’d)

iii)

Outstanding balances arising from sales/purchases of goods/services and others

Consolidated 2013 Trade accounts receivable (include unbilled revenue) Subsidiaries Associates Joint venture Related parties

Amounts due from related parties Subsidiaries Associates Joint venture Related parties

Deposit (included in “Other non-current assets”) Subsidiaries Associates Related parties

2012

Related-party transactions (Cont’d)

iii)

Outstanding balances arising from sales/purchases of goods/services and others (Cont’d)

Unit: Baht’000 Company 2013 2012

3,158 26,787 3,111

3,984 1,647 3,230

98,326 1,257 240 763

130,858 1,075 436 253

33,056

8,861

100,586

132,622

37,720 4,388 31,307

22,812 10,173 10,919

226,702 11,073 4,087 11,944

258,704 6,945 4,110 10,441

73,415

43,904

253,806

280,200

8,979 200

8,979 2,600

18,688 3,460 200

3,460 2,600

9,179

11,579

22,348

6,060

Finance lease receivables

1,768

1,827

Related parties

1,768

1,827

Trade accounts payable (included in “Trade accounts and notes payable”) Subsidiaries Associates Related parties

Other payables (included in “Amounts due to related parties”) Subsidiaries Associates Joint venture Related parties Board

Advance received for rental and services (included in “Other non-current liabilities”) Associate Related parties

Deposits received (included in “Other non-current liabilities”) Subsidiaries Associates Joint venture Related parties

Finance lease liabilities (included in “Long-term borrowings from financial institutions”) Associates Related parties

132

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

Unit: Baht’000 Company 2013 2012

Consolidated 2013

2012

978 1,014

9,130 1,056

101,173 1 901

86,435 7,723 952

1,992

10,186

102,075

95,110

5,647 2,026 61,516 3,758

22,404 2,186 6,960 3,842

44,083 4,864 47,406 3,300

83,396 21,286 139 6,414 3,300

72,947

35,392

99,653

114,535

28,103 15,579

29,150 17,090

43,682

46,240

120,003 420 5,237

120,003 5,796

983 135

125,660

125,799

1,118

12,392 8,262

12,253 8,169

12,392 8,262

12,253 8,169

20,654

20,422

20,654

20,422

FINANCIALS

For the year ended 31 December 2013

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133

FINANCIALS

For the year ended 31 December 2013

Related-party transactions (Cont’d)

iv)

Short-term loans to related parties

Related-party transactions (Cont’d)

vi)

The short-term loans to related parties are loans to subsidiaries of Major Cineplex Group Public Company Limited (“Major Group”) in Thailand for the use of financing to other companies under the Major Group in Thailand. The short-term loans to related parties as at 31 December 2013 are unsecured loans repayable within 1 month, carrying interest rate of 4.00% per annum.

Short-term loans from related parties The short-term loans from related parties are loans from fellow subsidiaries of Major Cineplex Group Public Company Limited (“Major Group”) in Thailand for the use of financing to other companies under Major Group in Thailand. The short-term loans from related parties as at 31 December 2013 are unsecured loans repayable within 1 month, carrying interest rate of 4.00% per annum. On-call promissory note of Baht 25.00 million bears interest rate of 3.10% per annum.

FINANCIALS

For the year ended 31 December 2013

The movements of short-term loans to related parties are shown below. The movements of short-term loans from related parties are shown below.

For the years ended 31 December

Consolidated 2013

2012

Unit: Baht’000 Company 2013 2012

Opening balance Loans advanced during the year Loans repayments during the year Reclassification

1,800 (1,800) -

462,148 1,084,050 (1,019,534) -

475,370 1,565,893 (1,583,454) 4,339

Closing balance

526,664

462,148

For the years ended 31 December

The related interest income was Baht 18,711,003 (2012: Baht 18,859,251). At 31 December 2013, the accrued interest income was Baht 1,747,074 (2012: Baht 1,456,590).

Consolidated 2013

2012

Subsidiaries and associates Opening balance Loans borrowed during the year Loans repaid during the year Reclassification

25,000 -

Closing balance

25,000

Unit: Baht’000 Company 2013 2012

467,778 1,459,016 (1,316,279) -

65,608 1,238,611 (832,780) (3,661)

610,515

467,778

The related interest expense was Baht 23,888,522 (2012: Baht 5,857,089). At 31 December 2013, the accrued interest expense was Baht 2,446,932 (2012: Baht 1,650,662). v)

Long-term loans to related parties

For the years ended 31 December Subsidiaries and associates and employees Opening balance Loans advanced during the year Loans repayments during the year Reclassification Closing balance

Consolidated 2013

2012

Unit: Baht’000 Company 2013 2012

6,612 911 (4,325) -

10,695 1,550 (5,633) -

1,006,613 410,886 (661,530) -

1,274,419 1,194 (261,000) (8,000)

3,198

6,612

755,969

1,006,613

viii)

Management’s remuneration During 2013 the total remuneration of the directors and management approximate Baht 50.81 million (2012: Baht 46.10 million), including salaries and other benefits.

ix)

Investments in subsidiaries, associates and joint ventures Details of investments in subsidiaries, associates and joint ventures are set out in Note 13.

The loans to related parties are carrying interest at the rates ranging from 3.50% to 6.13% per annum (2012: 4.00% to 6.13% per annum) and there is no specific repayment date. Staff loans of Baht 3.20 million and Baht 2.97 million (2012: Baht 6.61 million and Baht 5.85 million) in the consolidated and company financial statements, respectively, comprise of staff loan of Baht 2.41 million and Baht 2.40 million bearing no interest and Baht 0.79 million and Baht 0.57 million bearing interest rate of ranging of 2.00% - 3.00% per annum (2012: amount Baht 1.73 million and Baht 1.67 million bearing no interest and Baht 4.88 million and Baht 4.19 million bearing interest rate of 2.00% 3.00% per annum).

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ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

135

FINANCIALS

For the year ended 31 December 2013

Commitments and contingencies

Bank guarantees and letter of credits

Information on quality of assets

The quality of assets classified in accordance with the guidelines of the Securities Exchange Commission as at 31 December 2013 are as follows:

As at 31 December 2013 the Group has outstanding bank guarantees and letter of credit Baht 167.83 million (2012: Baht 183.57 million) given to third parties.

ii)

iii)

Consolidated 2013

Guarantees As at 31 December 2013, the Company and a subsidiary have given guarantees for bank loans granted to subsidiaries and associates for a total of Baht 833.61 million (2012: Baht 681.71 million).

Trade account receivable Trade account receivable (net of deposit received from customer) Less Allowance for doubtful account

6,549 (6,549)

1,069 (1,069)

Operating lease commitments - where the Group is the lessee

Trade account receivable, net

The Company and its subsidiaries have commitment obligations in terms of long-term lease of land, buildings and service contracts. The future aggregate non-cancellable minimum lease and service payments under the contracts are as follows: Unit: Million Baht Consolidated Company 2013 2012 2013 2012

Events after the reporting date

At the Board of Directors Meeting held on 13 February 2014, the Board passed the following resolutions: a)

Not later than 1 year Later than 1 year but not later than 5 years Later than 5 years

573

766

618

499

1,941 4,847

3,093 5,235

2,023 2,429

2,032 2,503

7,361

9,094

5,070

5,034

Approved dividends in respect of the operating results for the period from July to December 2013 at Baht 0.50 per share, totaling Baht 443.79 million. The dividend will be distributed to shareholders listed in the register on 16 April 2014.

At the Board of Directors Meeting of a subsidiary held on 11 February 2014, the Board passed the following resolutions: a)

In addition to the minimum lease and service payments, the Group also has obligations in respect of lease of buildings and service contracts based on revenue sharing with the lessors.

iv)

2012

Unit: Bahtâ&#x20AC;&#x2122;000 Company 2013 2012

FINANCIALS

For the year ended 31 December 2013

Approved the incorporation of a Thai film production company, whose registered share capital is Baht 300,000,000 representing 3,000,000 ordinary shares at a par value of Baht 100 per share. The Company will own 40% or equivalent to Baht 120,000,000. It is expected that this new company will be incorporated by the end of the 1st quarter of 2014.

Capital commitments Capital expenditure contracted for at the balance sheet date, but not recognised in the financial statements is presented as follows:

Currency

Unit : â&#x20AC;&#x2DC;000 Company 2013 2012

Property, plant and equipment Intangible assets

THB THB USD EURO

45,772 78,000 4,737 33

67,286 43,500 6,671 62

45,772 -

45,207 -

Total

THB USD EURO

123,772 4,737 33

110,786 6,671 62

45,772 -

45,207 -

281,322

318,650

45,772

45,207

Total in Thai Baht

Consolidated 2013 2012

Commitment for film productions As at 31 December 2013, the Group has commitments in respect of payments to film directors amounting to Baht 47.28 million (2012: Baht 10.79 million). 77

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137

FINANCIALS

Share Registrar Ltd. Thailand Securities Depository Co., Ltd. 62 Stock Exchange of Thailand, Floor 4,6 and 7 Rachadapisek Rd., Klongtoey, Bangkok 10110 Tel: 02 229 2800 Fax: 02 654 5427 Auditor

Mr. Pisit Thangtanagul Certiﬁed Public Accountant (Thailand) No.4095 Pricewaterhouse Coopers ABAS Co., Ltd. 15th Floor, Bangkok City Tower, 179/74-80 South Sathorn Road, Bangkok 10120 Tel: 02 344 1000 Fax: 02 286 9999

Legal Advisor

Ms. Kulkanist Khamsirivatchara Siam Premier International Law Ofﬁce Ltd. 26th Floor, The Ofﬁces at Central World, 999/9 Rama I Road, Pathumwan, Bangkok 10330 Tel: 02 646 1888

Debenture Registrar KASIKORNBANK Public Company Limited 400/22 Phaholyothin Road, Samsen-nai District, Phayathai, Bangkok 10400 Tel :02 222 0000 press 2 Fax : 02 470 1144-5 TMB Bank Public Company Limited 3000 Phaholyothin Rd., Jomphol, Jatuchak, Bangkok Tel :02 470 1982 Fax : 02 470 1998 Debenture Representative Limited

KASIKORNBANK Public Company Limited 400/22 Phaholyothin Road, Samsen-nai District, Phayathai, Bangkok 10400 Tel :02 222 0000 press 2 Fax : 02 470 1144-5 TMB Bank Public Company Limited 3000 Phaholyothin Rd., Jomphol, Jatuchak, Bangkok Tel :02 470 1982 Fax : 02 470 1998

56-2 CHECKLIST

PAGE

1. GENERAL INFORMATION 1.1 COMPANY NAMES AND ADDRESS 1.2 JURISTIC ENTITIES IN WHICH COMPANY HOLDS AT LEAST 10% INTEREST 1.3 REFERENCES 2. FINANCIAL HILIGHTS

3. NATURE OF BUSINESS 3.1 BUSINESS CHARACTERISTIC 3.2 REVENUE STRUCTURE 3.3 SIGNIFICANT CHANGES DURING THE PAST FISCAL YEAR

18 - 25 57 - 58 18 - 25

4. RISK FACTOR

26 - 27

5. SHAREHOLDERS, MANAGEMENT STRUCTURE, & CORPORATE GOVERNANCE 5.1 SHAREHOLDERS 5.2 MANAGEMENT & CORPORATE GOVERNANCE 5.3 DIVIDEND POLICY 6. RELATED TRANSACTIONS 7. MANAGEMENT DISCUSSION & ANALYSIS OF FINANCIAL POSITION & PERFORMANCE 8. FINANCIAL STATEMENT 8.1 REPORT OF THE AUDIT COMMITTEE 8.2 RESPONSIBILITY STATEMENT OF THE BOARD OF DIRECTORS 8.3 AUDITOR’S REPORT PRODUCED & DISTRIBUED by Major Cineplex Group Plc. 1839, 1839/1-6 Phaholyothin Rd. Jatuchak Ladyao, Bangkok 10900. Thailand Tel. +66 2511 5427-36 Fax. +66 2511 5752 http://corporate.majorcineplex.com http://www.majorcineplex.com

138

Inside Front Cover, 71 16 - 17 138

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

8 - 11, 52 28 - 41 129 45 - 51 57 - 58 62 - 137 59 60 61

DESIGNED & PRINTED by AT HOMEs DIGITAL Co., Ltd. 368 Ratchadapisek42 Junkaseam Jatuchak, Bangkok 10900. Thailand Tel. +66 2939 0216 Fax. +66 2930 0327

ANNUAL REPORT 2013 MAJOR CINEPLEX GROUP PLC.

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