Information of the capital increase of Nation Broadcasting Corporation Limited, Offering to the Public and Shareholders of Nation Multimedia Group Public Company Limited Nation Broadcasting Corporation Limited ("the subsidiary" or "NBC"), a subsidiary company of Nation Multimedia Group Public Company Limited ("the Company" or "NMG") which the Company holds 23,999,994 common shares or equivalent to 99.99 percent of total paid-up capital, will offer 50,000,000 newly issued common shares (par value of Baht 1.00 each) via an initial public offering ("IPO"), equivalent to 29.41 percent of total registered and paid-up capital after IPO. The plan of offering the newly issued shares of NBC to the public and to the Company's shareholders is subject to an approval of the Extraordinary General Meeting of Shareholder of NBC. The Company would like to summarize the details of the event as follows: (1) The Company established Nation Broadcasting Corporation Company Limited in 1993 to operate and provide various forms of content (Content provider) and broadcast through television, radio and other media. Consequently, NBC has expanded its business by providing new media service such as live broadcasting and video streaming on internet, SMS/MMS news alert on mobile and other electronic media services. NBC also operated other related businesses, for example, VCD and DVD production, special events, seminar etc. At present, the Company's shareholding stake in NBC is equivalent to 99.99 percent of total paid-up capital. (2) In Quarter 1/2008, NBC will decrease its registered and paid-up capital from Baht 240,000,000 to Baht to 120,000,000 via the reduction of number of common shares to 12,000,000 shares (par value of Baht 10.00 each) in order to offset the deficit in retained earning and change its par value from Baht 10.00 to Baht 1.00 per share. (3) NBC will increase its registered and paid-up capital from Baht 120,000,000 to Baht 170,000,000 by issuing 50,000,000 newly common shares (par value of Baht 1.00 each) which will be offered to the public and to the Company's shareholders. Consequently, NBC's status will be converted from limited company to public company in order to prepare for its listing in the Market for Alternative Investment ("MAI"). (4) NBC will offer a total of 50,000,000 newly issued common shares (par value of Baht 1.00 each) to the public, equivalent to 29.41 percent of total registered and paid-up capital after IPO, and authorize the Board of Directors and/or the Chief Executive Officer and/or the person(s) entrusted by the Board of Directors or the Chief Executive Officer of NBC to have the power to take any acts which are necessary and relevant to the IPO in all respects. In addition, NBC will allocate not exceeding 20,000,000 newly issued common shares (par value of Baht 1.00 each) to the Company's shareholders in proportionate to their shareholding percentage in the Company ("Pre-emptive Right"), equivalent to 11.76 percent of total registered and paid-up capital after IPO. The details of the transaction are as follows: Details of the Allocation of NBC's Initial Public Offering to NMG's Shareholders in proportionate to their pre-emptive right. Offering securities: The newly issued common shares of Nation Broadcasting Corporation Limited ("the subsidiary" or "NBC") (Currently, NBC is a non-listed company.) Number of offering shares: Not exceeding 20,000,000 shares, equivalent to 40.00 percent of total IPO shares of NBC. Share allotment ratio and share The Company's Board of Directors is authorized to determine the share register book closing date: allotment ratio and the closing date of share register book to determine eligible shareholders to subscribe for the aforementioned shares, which will be specified after the Office of the Securities and Exchange Commission ("SEC") has approved the initial public offering of NBC. In accordance to the regulation of the Stock Exchange of Thailand ("SET"), the Company must notify the closing date of share register book at least 14 days in advance. Offering price: Same as the offering price of the shares offered to the public which will be specified and notified later (par value of Baht 1.00 each). Subscription and/or payment Close to the subscription period of the IPO which will be specified and Date: notified later. Other Information: The Company's common shareholders have the rights to subscribe for newly issued common shares of NBC not exceeding their rights. The 1 remaining of unsubscribed shares and/or the fraction of shares from the computation of right will be authorized by the Board of Directors or the Underwriter of NBC to allocate the remaining shares to the public, including to specify conditions and details of the offering as appropriated and not contradict to any laws and/or rules or any regulations of the SEC and the SET and/or any other related agencies, in order to accomplish the highest achievement of the initial public offering. (5) According to the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Assets, 2004, the maximum size of this disposition transaction including the maximum size of the disposition transaction of Nation International Edutainment Public Company Limited ("NINE"), the Company's subsidiary that will be spin-off closely to NBC, using the value of asset disposed compare with the value of NMG's assets is equivalent to 13.92 percent which is not qualified to any classes of transaction specified in the Section 1 of the Notification. Consequently, the Company is not required to disclose information to the SET. Nevertheless, the Company would like to distribute this Information Memorandum of the decision to enter into this proposed transaction to shareholders in order that shareholders can take into consideration. (6) After the initial public offering of 50,000,000 newly common shares and the listing of NBC in the MAI, total registered and paid-up capital of NBC will equivalent to Baht 170,000,000. Further, the selling of not exceeding 15,000,000 existing common shares of NBC held by the Company will result in a 38.24 percent decrease in the Company's shareholding stake in NBC. Nevertheless, NBC still be the Company's subsidiary. In addition, the Company will still maintain its listing status and has complied with the qualifications of maintaining the status of listed companies in the exchange as follows: - There is positive operating profit from its Press printing and Advertising Business. - Shareholders' equity is more than Baht 300 million. The details are as follows: Table 1: Summary of Operating Performance of Press Printing and Consolidated Financial Statement of NMG Press Printing and Advertising Business Consolidated (Unit: Baht million) 2005 2006 2007 Jan-Sep 2005 2006 2007 Jan-Sep 2008 2008 Net sales 3,257.70 2,861.52 2,742.01 1,999.52 3,474.18 3,087.86 3,208.50 2,274.36 Profit from 85.19 7.27 (610.66) 94.19 114.84 55.74 (552.47) 72.55 operation Shareholders' 1,798.27 1,568.44 809.62 752.83 equity of parent company Total shareholders' 1,816.41 1,675.04 922.50 860.90 equity For the future business plan of NMG, the Company will concentrate on expanding its Press Printing and Press-related Business, such as Special Events and Special Publications Business, to maintain and strengthen its market positioning, generate long term revenues and secure the Company's financial position. (7) The Company has clearly business structure and obviously divides each business units in which its managements are independent of each other. Each of business units has its own capital funds and management teams in order that they can timely response to changes in business and competitive environments and accurately serves the needs of targeting customers. Even the Company and NBC have exchanged some business collaborations, those transactions are considered normal business transactions and are arranged in order to create a synergy of each other. In addition, total value of business transactions between the Company and NBC compare with total revenues of the Company is considered very few, besides, revenues and cost sharing policy between the Company and NBC is complied with normal business condition. Therefore, the initial public offering and the listing of NBC in MAI are not considered as the conflict of interest transaction. (8) For the plan of the offering of IPO shares of NBC to the public and the Company's shareholders, NBC will convene the Extraordinary General Meeting of Shareholders to consider and approve the 2 aforementioned and related issues in March 2008. NBC is expected to submit the offering application to the SEC and the listing application to the SET in Quarter 2/2008. The listing of NBC's shares in MAI is expected to be in Quarter 4/2008. 3