14th August, 2003 The President The Stock Exchange of Thailand Dear Sir, Clarification on Operating Result for the Second Quarter of 2003 The Company's operating result for the second Quarter of 2003 which has been reviewed by the auditor has shown a net profit of THB17.94 m, a decrease of THB5.96 m or 24.9% from the same period last year. This smaller net profit could be attributed to the following: 1. Net Sales Revenue decreased by THB21.6 m or 5.3% as a result of lower demand from tourism sector. The war in the Middle East and particularly the spread of the Severe Acute Respiratory Syndrome (SARS) in some countries, such as the People's Republic of China, Taiwan, Singapore and Canada, have deterred people from traveling and caused a significant drop in number of tourists visiting Thailand. The impact of this was particularly felt in some provinces in the South of Thailand (such as Phuket) which are some of a few top destinations for tourists, both overseas and local. The drop in number of tourists also reduced purchasing power of people working in the tourism industry as some hotels, restaurants and entertainment places had to completely or partially close the operations, while some employers had to reduce number of staffs or temporarily reduced their remuneration. 2. Furthermore, the Company experienced some short deliveries of certain products, in particular PET packages, to our customers as a result of supply shortages from another Coca-Cola Bottler in Bangkok, coupled with the delay in commissioning our new PET production line. The two afore-mentioned reasons resulted in lower sales volume in a slow-down consumption trend. However, the installation of our new PET production line is nearing completion and we believe that the supply of products in PET packages would be on stream thus it would help enhancing our sales opportunity in the future. 3. A reduction in overall sales revenue led to a corresponding THB10 m lower cost of goods sold, or a decrease of 3.7% compared to the second Quarter of 2002. However, because of various fixed costs which could not be lowered with the smaller sales volume, the gross margin dropped from 32.6% a year ago to 31.4% in the second Quarter of 2003. The gross profit for this quarter was THB120.9 m, a decrease of THB11.5 m or 8.7% from THB132.4 m recorded in the second quarter of 2002. 4. To alleviate the impact from a lower demand in the second Quarter of 2003, the Company managed to lower the sales and administration expenses by 5.0%. The overall reduction of THB6.0 m was largely in the marketing and sales expenses. - 2 - 5. The interest expenses increased by THB0.5 m or 187% largely because the Company started to expense the cost of borrowing for the new filling line. The situation for tourism industry in the South has shown sign of recovery. This is a result of effective controls of SARS by all governments in this region coupled with an effort to promote traveling within Thailand by the Tourism Authority of Thailand (TAT) together with the private sector. (The Company also took part in pioneering the "1 company, 1 destination" project with TAT, which translated into taking dealers to stay in Phuket for 3 days, 2 nights instead of an overseas holiday as done in the past.) With "sensitivities" issues still hanging somewhat over our head, we shall be prepared for any eventualities. Yours sincerely, Sec.Lt. (Phairoch Rattakul) Managing Director Office of the Managing Director Tel. (0)2391-0169 ext. 108