SLM : Report of the operating progress to qualify to resume trading for the 2nd quarter of the year 2022

No. 017/2022

	17 August 2022
Subject:	Report of the operating progress to qualify to resume trading for the 2nd quarter of the year 2022
To:	President
	The Stock Exchange of Thailand
Reference	1 . Letter No. 0 1 4 / 2 022 Re: Report of the operating progress to qualify to resume trading for the
	1st quarter of the year 2022, dated 24 May 2022.

According to SLM Corporation Public Company Limited ("the Company") has reported the operating progress to qualify to resume trading (Resume Stage) to the Stock Exchange of Thailand ( "SET") following to the reference no. 1., the Company would like to report such operating progress for the 2nd quarter of the year 2022 as follows:

1. Business Operations

The Company's main business is related to investment in media production business which is divided into 5 main types as follows:

• Media Agency Business: The Company provides media planning services in various formats both online and offline and provides constructive consulting advice to meet the needs of the brand.
• Full-ServiceOnline Media Production Business (Online Content): The Company has leased the rights to produce and develop programs published online channels, including online article preparation and online media management by various channels such as YouTube, Facebook, Instagram, and Tiktok. The Company will present video clips through such channels under the name Goodday official, Tigercry, Happy Retire, and Bad Official.
• Content Production Business:The Company provides services as a media production contractor for both image and video format.
• TV Dramas and Series Production Business:The Company provides services as a full range of television dramas and series production contractor, and sourcing of actor and personnel with the ability to perform.
• Other Services Business: The Company has income from other services such as income from the exchange of goods and services, and income from other jobs of artists and actors.

The Revenue Structure of the Company

Unit: Million Baht

	Income by service			3M/2022			3M/2021			6M/2022			6M/2021			2021				2020
			Amount			%			Amount			%			Amount			%			Amount			%			Amount			%			Amount			%
	Strategic Planning and Research Service (1)	-		-		-		-		-		-		-		-		-			-		-			-
	Media Agency (2)	4.5	9.1		2.4	5.6	10.4	9.7	2.9		3.3	10.4		5.7	-			-
	Online Content Service (3)	20.2	40.9		37.3	85.7	50.5	47.1	65.0		74.5	129.0		71.3	89.1		86.9
	Content Production Service	4.8	9.7		0.1	0.1	10.9	10.2	1.7		1.9	2.0		1.2	1.9		1.9
	TV Dramas and Series Production (4)	10.0	20.2		2.5	5.7	21.4	19.9	13.9		15.9	22.0		12.2	-			-
	Other Services (5)	7.5	15.2		0.7	1.7	11.0	10.3	2.6		3.0	14.2		7.8	5.3		5.1
	Other Income (6)	2.4	4.9		0.6	1.3	3.0	2.8	1.2		1.3	3.3		1.8	6.3		6.1
	Total Income	49.4	100		43.5	100		107.2	100		87.2		100		180.9		100		102.6		100
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Remark:

1. Income from Strategic Planning and Research Service is a service provided by the Company to act as a sales department for customers. The Company will be involved in assisting customers in business planning, being a consultant to develop products or services of customers, targeting groups to be suitable for products and services, and liaison with third parties to bring in more users or buyers.
   In this regard, the Company continues to operate business of providing strategic planning and research services. However, in February 2020 the Company expanded the business by expanding its service scope into the full-service online media production business, and media production business. The Company therefore focused on doing such business. As a result, in the past, the Company had no income from providing strategic planning and research services.
2. Income from providing media planning services in various formats both online and offline and provides constructive consulting advice to meet the needs of the brand.
3. Income from Online Content Service, the Company receives revenue from selling advertisements to customers to promote their products and services in various programs that are broadcast in the media which the Company has obtained the right. And it also includes the income and fees received from promoting Facebook posts.
4. Income from TV Dramas and Series Production comes from being production contractor of TV drama and series for general employers such as a television channel.
5. Income from Other Services consists of income from exchange of goods and services, and income from other jobs of artists and actors which are not related with the media or company programs.
6. Other Income consists of income from adjustment the accrued expense item, providing media production services in part of pre-production and production, refund of court fines for late submission of financial statements, reimbursement from winning lawsuits, and other income from offset transactions and amortization of accounting items, and others.

2. Operating Results and Financial Position of the CompanyOperating Results

Operating results for the 3 month period ended 30 June 2022, the Company group had total revenue of

49.23 million Baht, increased by 5.82 million Baht or 13.40 percent when compared with total revenue at the same period last year in an amount of 43.42 million Baht; and had profit from operating activities of 8.42 million Baht, increased by 3.39 million Baht or 67.56 percent when compared with loss from operating activities at the same period last year in an amount of 5.02 million Baht. Due to an increase in income from full-service online media production business (Online Content), content production business, and TV dramas and series production business. And cost of services decreased by 0.37 million Baht or 1.44 percent. The cost of services consists of direct labor cost of production department employees, direct costs incurred from production and filming, and other overhead. The proportion of cost of services to service income was at 54.52 percent from 60.50 percent. In part of selling expenses, it consists of expenses about sales and marketing department employees, all costs spent on producing media without sponsors or customers, and indirect costs of clips without sponsors or customers; totaling 8.99 million Baht, increased by 1.84 million Baht or 25.81 percent when compared to selling expenses in the same period last year in an amount of 7.15 million Baht. Due to the increase of video clips of new programs without sponsors or customers in the company's media. The proportion of selling expenses compared to service income was 19.17 percent.

The Company has adjusted business strategies to keep up with changing situations and consumer behavior during the coronavirus disease 2019 (COVID-19) epidemic and in the future. By offering a variety of services and production of new online media programs to meet the changing needs of consumers, and continuous improvement and development of quality services. Therefore, the Company has more customers, and increased income.

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Operating Results for 3 Month Period ended 30 June 2022.

													Unit: Million Baht
	Statement of Comprehensive Income						April - June
			2022			2021			Change			% Change
Total revenues	49.23		43.41		5.82		13.40%
Total expenses	40.82		38.39		2.42		6.31%
Profit (loss) from operating activities	8.42		5.02		3.39	67.56%
Profit (loss) for the period	8.33		5.03		3.30		65.60%
Earnings (loss) per share (in Baht)	0.03		0.03		-	-

Operating Results for 6 Month Period ended 30 June 2022.

																	Unit: Million Baht
	Statement of Comprehensive Income								January - June
			2022				2021				Change			% Change
Total revenues			107.19	87.19			20.00		22.93%
Total expenses					92.50	82.68			9.82		11.88%
Profit (loss) from operating activities					14.69	4.52			10.17	225.24%
Profit (loss) for the period					14.51	4.52			9.99		220.99%
Earnings (loss) per share (in Baht)					0.06	0.03			0.03		100.00%
	Financial Position
																	Unit: Million Baht
	Statement of Financial Position		30 June 2022			31 December 2021		Change		% Change
Assets				146.81			134.95		11.87	8.79%
Liabilities				84.30		86.90		(2.60)	-2.99%
Shareholders' equity				62.51		48.05		14.46	30.10%

As of 30 June 2022 and 31 December 2021, the Company group had assets of 146.81 million Baht and

134.95 million Baht respectively, increased by 11.87 million Baht due to an increase in trade and other receivables, and equipment. As of 30 June 2022, the Company group had liabilities of 84.30 million Baht, decreased from the end of 2021 by 2.60 million Baht because of the decrease in accrued service costs, and lease liabilities. And as of 30 June 2022 and 31 December 2021, the Company group had shareholders' equity of 62.51 million Baht and 48.05 million Baht respectively, increased by 14.46 million Baht. Due to the increase of net profit during the period resulted in the increase of shareholders' equity.

				Unit: Million Baht
List	6M/2022	6M/2021	2021		2020
Cash and Cash Equivalents	27.20	36.60	42.54		15.02
Net Cash Flow from Operating Activities	(10.89)	(33.58)	(24.23)		(19.35)
Debt to Equity Ratio (times)	1.35	1.46	1.81		(4.41)
Retained Earnings (Deficit)	(65.86)	(85.93)	(80.38)		(90.45)

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The Company had net cash flow from operating activities of -10.89 million Baht due to cash paid from operations. As a result of the Company emphasizes on investment in online media production business, and TV drama and series production business that will continuously generate income and profit in the future. The TV drama and series production business has long collection period about 1 year because such business has a production period of about 1 year. And the Company will receive compensation after the filming is complete and the work has been delivered to the employer. As a result, net cash flow from operating activities is negative. But at present the filming of the TV series is complete, and the Company has already received some compensation. In this regard, the Company continues to accelerate business to generate revenue and profit for stable growth that will result in the Company can reduce retained losses and return to have retained earnings.

3. Summary Report of the Internal Auditor's Internal Control Review

The Company realizes the importance of doing business by considering the principles of business operations under good corporate governance, transparency, and adequate internal control. The Company has established an independent internal audit agency in monitoring and evaluating the results of internal control by hiring an external agency, Pro Plus IA & Consulting Company Limited ("Internal Auditor") to inspect the internal control system from the year 2020 to the present. The Internal Auditor will conduct an audit of the Company's internal control system every quarter.

In 2022, Internal Auditor has audited the internal control system to comply with the regulations of the SET to ensure that the Company has a good internal control system both in terms of efficiency and effectiveness of operations, providing accurate and reliable financial information and administrative information, and managing risks to an acceptable level to lead the operational improvements to achieve objectives and to be reliable to the stakeholders. During the year 2022, Internal Auditor has conducted a quarterly audit of the internal control system. The scope of the audit includes: (1) management process (according to the components of internal control under the framework of COSO) (2) information technology management process (3) procurement process (4) Personal Data Protection Act (PDPA) implementation process, and (5) sales & marketing process.

For the 2nd quarter of 2022, Internal Auditor audited the internal control system as follows:

1 . The internal control system, procurement processin July 2022. From the examination, no fatal errors were found or indications of fraud. And internal auditor had opinion that the purchasing department and the financial & accounting department have established rules and operating manuals for reference in the proper operation and set guidelines that are important management policies. However, internal auditor was found that there were 2 issues that should be improved to make the operation more concise and appropriate which can be summarized as follows:

	Number of Issues			Issues that should be Improved
	Risk Level			Amount
	Medium	2			1. Operating procedure "Service procurement" is out of date.
							Operation: The Company improved the operating procedure completely on 26 July 2022.
							2. Vendor/service provider registration lacked conciseness.
							Operation: The Company improved completely on 3 August 2022.
	Total	2

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Internal Auditor reported the auditing results of the internal control system of procurement process to the Audit Committee and the Board of Directors on 15 August 2022 already.

For the internal control auditing of the 3rd quarter of 2022, Internal Auditor will perform the auditing of Personal Data Protection Act (PDPA) implementation process during September and October 2022.

However, the audit plan may be changed based on consultation between Internal Auditor and the Management about the issues that need to be focused or to be consistent with changing conditions under reasonable consideration. If there is any progress or change, the Company will inform later.

Furthermore, the Internal Auditor has a meeting with the management about the issues that need to focus more on the importance of auditing in each process/unit and give suggestions or additional guidelines for improvement to operate in various fields more productive. The Company has continuously improved, corrected and developed operations in various fields to meet the requirements of the SET, and to build confidence that the Company has efficient and transparent management system, has adequate internal control, and can support operational plans of the Company to grow the business and generate continuous and sustainable returns.

4. Legal Dispute

As of 17 August 2022, the Company has pending lawsuits that are still being considered by the court as follows:

4.1 A lawsuit between the Company ( " Plaintiff") and Chuo Senko Advertising (Thailand) Company Limited ("Defendant") in case of default in debt consolidation agreement, amounting to Baht 113.7 million

On 9 September 2019, the Company filed a civil lawsuit against Chuo Senko Advertising (Thailand) Company Limited in case of default in debt consolidation agreement, amounting to 113.7 million Baht with default interest rate of 7.5% per annum from the date of default until the date of litigation.

After that, the court determined that the witnesses of plaintiff and defendant were examined on 28 - 29 October 2020. On 28 October 2020, the Company's directors and lawyers investigated the plaintiff's witnesses by appointment. But the court postponed the appointment of the defendant's witness testimony on 25 February 2021 due to the epidemic situation of the coronavirus disease 2019 (COVID-19).

On 10 February 2021, the defendant's lawyer submitted a request to the court for permission to examine witnesses via a video conference system on the original appointment date of 25 February 2021. And the court allowed the witnesses to be examined by a video conference system on such date. But on that day, the defendant did not prepare to take the witnesses through the video conference system according to the rules of the Office of the Court of Justice. Therefore, the court ordered to postpone the defendant's witness testimony to be on 3 August 2021.

On 3 August 2021, the defendant's lawyer examined the defendant's witnesses through an interpreter by a video conference system from Japan. The parties requested a period of approximately 1 month to complete the closing statement to submit to the court. The court allowed to submit within 3 September 2021 and made an appointment to hear the judgement on 30 September 2021.

On 30 September 2021, the Court of First Instance issued a judgment dismissing the case. And on 25 October 2021, a representative of the Company submitted a petition to the court requesting an extension of the time for filing an appeal by one month, to be due on 30 November 2021. And on 23 November 2021, the Company's lawyer filed a petition with the court to request an extension of the appeal filing period for another 1 month to be due on 30 December 2021 due to it is in the process of preparing a draft appeal against the judgment and documents for filing an appeal.

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