14th November, 2003 The President The Stock Exchange of Thailand Dear Sir, Clarification on Operating Result for the Third Quarter of 2003 The Company's operating result for the third quarter of 2003 which has been reviewed by the external auditor has shown a net profit of THB6.72 m, a decrease of THB3.64 m or 35% from the same period of last year. This smaller net profit could be attributed to the following: 1. Net Sales Revenue increased by only 1.6% as foreign tourists were still having concerns on the issue of terrorism in a country not too far from Thailand in as late as August this year. Although the spread of the Severe Acute Respiratory Syndrome (SARS) in some Asian countries have now been effectively contained, the tourism industry in the South had not fully recovered yet in Q3/2003. In addition, the rainy season has lasted longer in the third quarter of this year than normal which affected soft drinks consumption negatively. 2. Furthermore, the Company lost around 10 days of production in September for plant improvements. The inventory prepared for sales during the shutdown was insufficient and the Company lost some sales opportunity. In addition, the Company still needed to source some products in substantial volume from another Coca-Cola Bottler in Bangkok who, themselves, were short of supplies. 3. In Q3/2003, the gross profit was lowered from the same period last year by THB7.7 m or 6.9%. This was largely due to the fact that the new PET filling line machine was in its initial production stage the low production volume resulted in high unit production cost. The combined effects of reasons 2 and 3 above led to a lower gross margin in Q3/2003. 4. As for sales and administration expenses, the Company managed to control and lower the Sales and Administration expenses by THB3 m or 2.4% compared to the same period of last year. Currently the Company is in the process of improving production procedures and gradually increasing production volume of products in PET packages and reducing the volume purchased from Bangkok. With higher production volume and more familiarity with the new machine, the unit production cost should gradually be lower and the problems of short supplies solved. ...2/ - 2 - As for external factors, once the terrorists issues are behind us and the rainy season over, the soft drinks consumption in the South should pick up in the coming Fourth Quarter. Additionally, the higher income per household due to higher crops prices, i.e. rubber and palm produce, will further enhance spendings on consumer products, soft drinks included. The Company believes that its sales volume in Q4/2003 would be higher than that of Q3/2003 and profit margin per unit would also follow this trend. Yours sincerely, Sec.Lt. (Phairoch Rattakul) Managing Director Office of the Managing Director Tel. (0)2391-0169 ext. 108