(Translation of the Acknowledgement Letter in Report 56

Transcription

(Translation)
Annual Registration
(Report form 56-1)
True Corporation Public
Company Limited
Contents
Page
1
Part I
Executive Summary
Part II
The Listed Company
1. Risk Factors
2. Nature of Business
3. Details of each Business Line
3.1 Products and Services
3.2 Marketing Strategy
3.3 Distribution Scheme and Distribution Channel
3.4 Procurement of Products and Services
3.5 Thai Telecom Industry
4. Research and Development
5. Operating Assets
6. Future Projects
7. Legal Disputes
8. Capital Structure
8.1 Company’s Securities
8.2 Shareholders
8.3 Dividend Policy
8.4 Liabilities Structure
9. Management
9.1 Management Structure
9.2 Remuneration for the Company’s Directors and Executive Officers
9.3 Corporate Governance Compliance Report
9.4 Insider Trading Policy
9.5 Personnel
10. Internal Controls
11. Connected Transactions
12. Financial Status and Performance
12.1 Company Auditors and Significant Accounting Policies
12.2 Summary of Financial Statements
12.3 Financial Ratios
12.4 Management’s Discussion and Analysis
12.5 Audit Fees
13. Other Related Information
Appendix 1: Information of Directors and Executive Officers
Appendix 2: Information of Director of Subsidiaries
2
3
6
18
18
27
28
29
30
37
38
40
41
42
42
51
53
54
73
73
78
83
90
90
93
94
112
112
113
116
118
126
127
128
140
Part III
Acknowledgement of the correctness of the information
145
True Corporation Public Company Limited
Annual Registration Statements (Report Form 56-1)
PART I
EXECUTIVE SUMMARY
True Corporation Public Company Limited, (“TRUE” or the “Company”)
formerly named TelecomAsia Corporation Public Company Limited and its affiliates, provide
telecommunications services under the Agreement for Joint Operation and Joint
Investment for Expansion of Telephone Services (“Agreement for Joint Operation and
Joint Investment”) awarded by the Telephone Organization of Thailand (currently is TOT
Corporation Plc. or “TOT”) and True’s subsidiary made the Agreement to Operate and to
Provide Cellular System Radio Telecommunication Services of Digital PCN (Personal
Communication Network) 1800 (“Agreement to Operate and to Provide Cellular System
Radio Telecommunication Services”) with the Communications Authority of Thailand
(currently is CAT Telecom Plc. or “CAT”). The Company’s and its subsidiaries’
businesses could be classified into five categories as follows: 1) Fixed line services and
value-added services from which the companies earn major income about 50.40 percent
of the total income, 2) Personal Communication Telephone services and Mobile Phone
business, 3) Data Transmission Services, 4) Multimedia Services and Broadband, 5)
Internet and e-commerce services.
The Company aims to become a communication solution provider that
responses to the communication needs knitting consumers, the public at large, society,
economics and the world on an integrated basis. The company continually develops new
services to meet requirements of the customers both from business segmentation and
consumer segmentation to correspond the customer centric strategy. More details could
be found in Section 2 of this report which is corporate information.
In this Form 56-1, “TRUE”, “Company”, “Affiliates”, and “Subsidiaries” refer to True Corporation Public
Company Limited and/or its affiliates and/or its subsidiaries. In case of uncertainty of which
company is responsible or execute and of which businesses appeared in the Form 56-1, you may
send your questions to
IR Office
18 True Tower, Ratchadaphisek Road, Huai Khwang, Bangkok 10310
Telephone 66 (0) 2699-2515 Fax 66 (0) 2643-0515
E-mail: [email protected]
TRUETB: Executive Summary
1
PART II
THE LISTED COMPANY
True Corporation Public Company Limited, Type of Business: Telecommunication
Head Office: 18 True Tower, Ratchadaphisek Road, Huai Khwang, Bangkok 10310
Public Company Registration No. Bor Mor Jor. 82
Telephone: 66(0) 2643-1111
TRUETC: The Listed Company
Home Page: www.truecorp.co.th
Fax: 66(0) 2643-1651
2
1. RISK FACTORS
While True sees many opportunities to grow in 2005, there are a number of general and
specific factors that could impact the company’s performance and that of its subsidiaries.
Industry Risks
True and its subsidiaries, particularly TA Orange and its Internet and Broadband
businesses, face increasing competition from cellular operators, TOT and new ISP market
entrants. As a result, the tariff for mobile phone calls and Broadband service has fallen
steadily over the past year, which has had, and will continue to have, an impact on
operational results.
We expect competition to remain intense in the future, but believe True is well positioned
to meet this given its leadership position in the Internet/Broadband market and TA
Orange’s strong 2004 revenue growth and expanding customer base. In addition, rapid
technological change could also adversely affect the viability of True’s business and make
its own technology less competitive. However, at the time of writing no such new
technology has been identified as a major current or imminent business threat.
Regulatory and Liberalization Risks
True and its subsidiaries operate under the “Agreement for Joint Operation and Joint
Investment for Expansion of Telephone Services” granted by TOT Corporation Public
Company Limited (“TOT”) and “Agreement to Operate and to Provide Cellular System
Radio Telecommunication Services of Digital PCN (Personal Communication Network)
1800” granted by CAT Telecom Public Company Limited. (“CAT”).
A dispute with either TOT or CAT over compliance with said agreements could affect
True’s ability to conduct business. The Agreement for Joint Operation and Joint
Investment could be cancelled by TOT if True violates laws relating to public or national
security, the Company is placed under receivership by a court in a bankruptcy case, or it
willfully and continually breaches a said agreement in any material respect. However, TOT
must submit the case to the Arbitration Tribunal for adjudication before it can cancel the
concession agreement with True.
TRUETD: Risk Factors
3
Under revenue sharing provisions of the Agreement for Joint Operation and Joint
Investment, TOT collects all of True’s fixed line revenues and retains a portion for the
revenue sharing. TOT may withhold or delay payments from revenues collected for True to
offset any obligations it believes it is owed (although this has not occurred to date).
As well as being the granter of True’s Agreement for Joint Operation and Joint
Investment, TOT is also a competitor in the BMA fixed line market. This has and could
continue to lead to disputes between True and TOT, which can deny or put on hold
True’s requests to launch new services. TOT and True have brought some disputes to
the Administrative Court and the Arbitration Tribunal for adjudication.
In August 2002 True asked the Arbitration Tribunal for compensation from TOT for access
charge revenues TOT generated using True’s network. In August 2004, True asked the
Arbitration Tribunal for compensation from TOT for sharing on revenues generated from
additional public phones apart from the first 20,000 sets. In January 2005, True also asked
the Arbitration Tribunal to ensure TOT shared revenues from incoming international calls
based on the rate indicated in the Agreement for Joint Operation and Joint Investment.
In July 2004 TOT asked the Arbitration Tribunal to require True to pay advertising cost for
placing True’s logo on Payphone booths. And in December 2004, TOT also sought costs
for placing the True logo on invoice/receipt and tax invoices.
The pending liberalization of the Thai telecommunications industry is expected to reduce
or eliminate these conflicts of interest, but proposed initiatives could put True at a
disadvantage to competitors. It is also possible that certain policies to be imposed by the
National Telecommunications Committee may affect True’s operating costs and/or
increase competition in the sectors in which it operates.
Risks related to financial situation
True’s operation is restricted by a number of debt and other financial agreements. These
agreements could prohibit True from exploiting good business opportunities or lead to
accelerated debt repayment if TOT cancels the concession agreement with the Company.
However, TOT must seek an arbitration decision in order to cancel the concession
agreement.
4
True is subject to exchange rate fluctuations, which could increase interest payments.
True had total debt of Baht 84 billion as at December 31, 2004, with 13 percent of this
being denominated in foreign currencies (Japanese Yen and US Dollar). In 2004, the
Company had consolidated capital expenditure of approximately Baht 4.0 billion,
approximately 40 percent of which was in foreign currencies. The Company has put in
place hedging tools to reduce its exposure to exchange rate fluctuations, primarily for the
majority portion of a USD 170 million loan belonging to a subsidiary.
Out of the Company’s total debt, about 50 percent is subject to floating interest rates and
vulnerable to rate increases. All TA Orange debt, accounting for approximately 37 percent
of total consolidated debt, is subject to floating rates. However, TA Orange debt interest
rates will step down over time if it is able to achieve conditions set out in its loan
agreement.
5
2. NATURE OF BUSINESS
Company Background and Major Developments
True Corporation is the most fully integrated nationwide communications solutions provider in
Thailand and one of the country’s largest brands.
Since being established in 1990 to build and jointly operate 2.6 million fixed lines in the
Bangkok Metropolitan Area (BMA) under a 25-year term of the Agreement for Joint Operation
and Joint Investment, it has grown rapidly to meet the lifestyle needs of Thai consumers.
Backed by Asia’s largest agro-conglomerate, the Charoen Pokphand Group (with a 36.08
percent shareholding), True’s subsidiary businesses currently include cellular operator TA
Orange, Asia Wireless Communication (operator of WE PCT), True Multimedia, True Internet and
pay TV operator United Broadcasting Corporation (UBC).
Through these companies True provides home consumers, small and medium enterprises and
corporates with the full range of cellular, wireless and wireline, Internet, data and entertainment
products and services in customized packages.
It is firmly established as the BMA’s leading wireline service provider with 56 percent market
share, is the country’s largest Broadband provider with more than 85 percent market share, and
the country’s leading Internet Service Provider. In TA Orange True owns the fastest growing and
third largest mobile operator.
The company was listed (as TelecomAsia Corporation Public Company Limited) on the Stock
Exchange of Thailand in December 1993 with the security symbol “TA”. At this time it had an
annual turnover of Baht 2 billion and employed 1,500 staff.
TRUETE: Nature of Business
6
At the end of December 2004 the True Group (which rebranded and adopted the “TRUE”
security symbol in April 2004) had an annual group turnover of more than Baht 40 billion
(including 100 percent of TA Orange and UBC), a market capitalization of Baht 33.1 billion,
infrastructure investments of more than Baht 100 billion and employed more than 8,000 staff.
Key Developments in 2004
December 2004
- TA Orange achieved 3.4 million subscriber base, exceeding its target.
- True strengthens its balance sheet, significantly reduces debt and
increases equity by Baht 2.7 billion. It achieved this by selling 398
million new ordinary shares at Baht 6.8 per share via a seven-time
oversubscribed private placement in Thailand’s first Accelerated
Global Tender.
Funds raised were used to complete debt restructuring of a subsidiary
with a creditor, enabling the True Group, excluding TA Orange, to
reduce debt by approximately Baht 9.3 billion in 2004 including a Baht
2.7 billion gain from debt forgiveness from the debt restructuring.
November 2004
- True becomes Thailand’s largest Internet Service Provider with
more than one million customers.
October 2004
- True announces that in cooperation with UBC it will launch
Thailand’s first TV via Broadband service.
September 2004
- True completes negotiations on long term debt financing for TA
Orange, enabling it to increase its shareholding in TA Orange to
83 percent.
NC True online game company is formed in a joint venture with
Korea’s NCsoft to market the hugely popular Lineage II game in
Thailand.
7
August 2004
- True announces it will inject Baht 6 billion into TA Orange so
the mobile operator can expand network capacity and coverage
to approximately 90 percent of Thailand’s population.
June 2004
- True raises Baht 2.4 billion by issuing seven year maturity Thai
Baht debentures. The funds are used to refinance debt to
German creditor Kreditanstalt Fur Wiederaufbau (KfW).
May 2004
- TA Orange’s network quality is judged “Best in Bangkok” by a
Synovate and King Mongkut’s Institute survey.
April 2004
- TelecomAsia changes its name to True as part of an “inside out”
rebranding to position the company for strong future growth.
True launches the “All Together Bonus” campaign which provides
True telephone, WE PCT and Internet users with the equivalent free
TA Orange talk time for every baht they spend on True services.
Key developments before 2004
December 2003
PCT provider Asia Wireless Communication joined forces with KDDI Japan
(parent company of KDDI-Pocket, the biggest PHS phone system provider in
Japan) to enable international roaming between the Pocket PHS system and
PCT. This allowed subscribers in Bangkok and Japan to use the service.
Reduced high-speed Internet charges to as low as Baht 550 per month for
transmission speed of 256 Kbps. Also offered special price TA Cable Modem
service to cover the Chiang Mai, Khon Kaen, Korat and Hat Yai provinces.
8
Expanded on-line game business by signing contract with Korean company
Triglow Picture to be the sole provider of PristonTale in Thailand. This was a
milestone of the Company as it signaled its move to become a content and
application aggregator for home solutions consumers. Opened new
subsidiary True Digital Entertainment, which is 99.99 percent owned by
Asianet Corporation to operate on-line game business.
November 2003
Decision made to change the Company’s name to True Corporation Public
Company Limited at Extraordinary General Shareholders Meeting No. 1/2003.
The name change, which is in line with the Company’s strategy to become a
customer-centric provider of voice and non-voice communications solutions,
will take effect after the new name is registered at the Ministry of Commerce.
October 2003
Signed a new Baht 21,419 million loan with local banks and financial
institutions to refinance all existing Baht loans, resulting in an
approximately Baht 200 million a year reduction in interest expense
and greater operational flexibility.
Launched another three TA easy Click services, including the TA easy
Ragnarok online game and the TA easy Mail and TA easy Entrance
applications.
September 2003
Reduced tariffs for domestic long distance calls from September 1 to
November 30 as part of a joint promotion with TOT and TT&T. The
promotion offered two packages. The second package offered a
reduction of tariffs for long distance domestic call and calls to mobile
phone to Baht 3 per minute. After the promotion was launched the
ICT Ministry approved a flexible tariff promotion under which charges
should not be higher than those provided by the packages. The
promotion will expire on June 30, 2005.
August 2003
Launched PCT Next service. It provides wireless Internet access at
the stable speed of 32 Kbps via a PCT Next Data Card that can be
connected to a PDA and Notebook computer.
Launched Billing Solution, which consolidates fixed line and TA
easy Click statements into one bill for customers who use both
services.
9
True
July 2003
Nynex Network System (Thailand), one of the Company’s major
shareholders, sold all its 369,500,126 TelecomAsia (TA) shares (or
10.001 percent) to Golden Tower Trading Ltd. (a representative from
CP Group) and Mission Gain Investments Ltd, which made the CP
Group the largest TA shareholder with 45.03 percent. The July 17 sale
was in line with Verizon Communication Inc.’s policy to focus on US
investments and had no effect on the Company’s operations.
Launched hi-speed Internet solution that bundles Broadband and
Internet Access for customer convenience. The service can provide
Internet access from 128 Kbps to 8 Mbps. Also launched TA Station,
a public high-speed Internet kiosk.
June 2003
Launched TA Caller ID, an additional fixed line service that shows
incoming call numbers through Caller ID phone.
Launched TA WiFi, a wireless Broadband service and signed contract with
the Queen Sirikit National Convention Center to install first WiFi facility.
April 2003
An increase in registered capital to Baht 43,892.28 million (up from
Baht 38,897.79 million) was approved by shareholders at the Annual
General Meeting. An Allotment of 499.45 million new shares with par
value of 10 Baht each was reserved, including 450 million shares for
private placement, 19.86 million shares for the ESOP and 29.59 million
shares for offering to the International Finance Corporation.
Asianet Corporation takes a 70 percent shareholding in True Internet
Data Center Company Ltd (True IDC). Other shareholders include
DACOM Corporation and Korean Internet Data Center (a DACOM’s
subsidiary). True IDC plans to provide the largest Internet Data Center
in Thailand and began operation in 2004.
March 2003
TA easy Click, a post-paid Internet service for fixed-line customers
launched by Asianet Corporation, a Company subsidiary. Customers
are charged for actual time used. Monthly service charges are
consolidated into the fixed-line statement.
10
Launched PCT Wireless Group call service. This post-paid service
allows for unlimited calls among group members using a special
four-digit number and is designed for business customers.
February 2003
Placed 3,319 million Baht in new debentures on February 18. The
proceeds were used to repay all remaining US dollar-denominated
debt of $78 million.
January 2003
Organizational structure changed to help the Company transform
into a customer-centric communication solutions provider. Top
executives appointed to take responsibility for the three core
customer segments - Corporate, SMEs, and Home/Consumer.
December 2002
Bought back Yen-denominated, long-term trade accounts worth Baht
3.6 billion (Yen 10.1 billion) at a 81.3% discount to their book value,
representing a gain from the buy-back of Yen-denominated notes of
approximately Baht 3.1 billion in the Company’s fourth quater 2002
results.
October 2002
Successfully placed Baht 18,465 million in new debentures, the largest
offering of corporate debentures rated by TRIS and the second largest
offering in Thai history.
Prepayment of the Company’s indebtedness in the amount of US
Dollar 452 million or Baht 19,590 million, funded by the proceeds from
Thai Baht Debentures of Baht 18,465 million and Baht loan from IFC
of Baht 1,125 million.
Offered new ordinary shares to the existing shareholders. The number of total
shares subscribed was 461,997,236 shares or 85.75% of the total shares
offered to the existing shareholders. The Company registered the change in
the Company’s paid up capital from Baht 32,325 million to Baht 36,945 million.
The proceeds from this rights offering of Baht 3,003 million, which came from
the CP Group and other existing shareholders, was used for additional
11
investment in TA Orange through Bangkok Inter Teletech Company Limited.
The Company’s holding stake in TA Orange increased from 41% to 44% after
the transaction.
September 2002
Approval granted by the Extraordinary General Shareholders Meeting
No. 1/2545 to increase the registered capital of the Company from
Baht 34,278 million to Baht 44,461 million by issuing 1,018 million new
shares at a par value of Baht 10 each. The proceeds were used for
investment in TA Orange and repayment of debts.
Launch of a new business Broadband solution called “TA Metronet”,
which is based on Fiber-to-Building technology. This technology
provides transmission rates of 512 Kbps to 1 Gbps for each customer.
August 2002
The Company signed a Memorandum Of Understanding with Thailand’s 10
leading providers of information, entertainment, healthcare, financial services
and on-line games in order to jointly promote and develop fully integrated
services for Thailand’s first Broadband Community.
July 2002
Telecom Holding Company Limited and its subsidiaries entered into a
Restructuring Agreement with its creditors.
Further prepayment of loans of Baht 345 million from the Company’s
cash surplus.
April 2002
The Company gained approval to install and operate an additional
6,000 public phone sets, increasing the Company’s capability to
provide public phone service to 26,000 sets.
March 2002
TA Orange, a 41% joint venture of TelecomAsia Corporation Public
Company Limited launched its cellular service under the “Orange”
brand name.
Additional prepayment of loan of Baht 948 million from the Company’s
cash surplus.
December 2001
Entered into a new Baht loan agreement of Baht 5 billion to repay US
dollar-denominated debt to reduce foreign exchange risk.
12
October 2001
Invested 41% in shares of Bangkok Inter Teletech Co., Ltd (“BITCO”),
which holds 99.81% of shares in TA Orange Company Limited (formerly
known as CP Orange Company Limited) via a share swap transaction. TA
Orange is a GSM 1800 cellular operator under the Agreement to Operate
and to Provide Cellular System Radio Telecommunication Services of
Digital PCN (Personal Communication Network) 1800 granted by the
Communication Authority of Thailand (“CAT”).
September 2001 Entered into a cross-currency swap agreement with KfW for repayment
of loans of $US97 million in Baht to reduce foreign exchange risk.
July 2001
True’s subsidiary launched high-speed data transmission services,
including ADSL, Cable Modem and TA Megaport services launched.
Prepayment of loan of Baht 368 million from cash surplus.
April 2001
True’s subsidiary launched prepaid PCT service under the name “PCT Buddy”.
February 2001
Prepayment of loans of Baht 532 million from cash surplus.
November 2000
“TA 1234” service, an economical rate for long distance calls launched.
August 2000
Start of Click TA service, an alternative Internet service that allows
customers to log on for up to 2 hours.
March 2000
Debt restructuring successfully completed with a principle term that
Kreditanstalt für Wiederaufbau (KfW), a major foreign creditor, subscribed
702 million preference shares totaling USD 150 million, equal to 24 % of
total shares of the Company after the capital increase.
November 1999
Official start of PCT service.
13
May 1998
UTV and International Broadcasting Corporation PLC (IBC) merged to
become a leading cable TV service provider under the name of United
Broadcasting Corporation PLC (UBC).
January 1997
The Company received approval to provide a public telephone service
in the BMA.
August 1996
The Company gained approval to provide PCT service.
May 1996
Company gained approval to provide value-added services, such as
digital network services and TA Connex.
September 1995 Company received approval for additional 600,000 fixed lines
expansion in the BMA.
March 1995
Start of cable TV service of UTV Cable Network Company Limited
(UTV), one of the Company’s affiliates.
December 1993
Company listed on the Stock Exchange of Thailand with registered
capital of Baht 22,230 million.
July 1992
Fifteen percent shareholding in the Company acquired by Nynex
Network System (Thailand) Company Limited.
December 1991 Telecom Holding Company Limited established to
invest in telecommunications projects.
August 1991
Entered into the BTO concession with the TOT to build, install, jointly
operate and maintain a 2 million fixed telephone lines in the Bangkok
Metropolitan Area (BMA) for a period of 25 years.
November 1990
Company established with registered capital of Baht 1,000 million.
14
Business Profile of the Company, Subsidiaries and Associated Companies
Currently, the Company’s products and services can be classified into major categories as follows:
1. Fixed line Services and Value Added Services
2. Wireless Services; Personal Communication Telephone (PCT) and Mobile Phone (TA Orange)
3. Data Transmission Services
4. Multimedia Network and Broadband
5. Internet, Content and Application Services
6. Other Services
15
BUSSINESS GROUP STRUCTURE
As at 31 December 2004
2.6 million line Telephone Services, Value Added
Service and Digital Data Network
True Corporation Public Company
Wireless
Multimedia Network and
(PCT & Mobile Phone)
Broadband
Q Asia Wireless Communication Co., Ltd. Q True Multimedia Co., Ltd.
Q Bangkok Inter Teletech
- TA Orange
- TA Orange Retail Co., Ltd.
Digital Data Network
Internet
True Corporation Public Company Limited Q True Internet Co., Ltd.
Q True Multimedia Co., Ltd.
Q Asia Infonet Co., Ltd.
Q True Digital Entertainment Co., Ltd.
Q True Internet Data Center Co., Ltd.
Q NC True Co., Ltd.
Q
Other Business
Construction and Distributor
Q Wire & Wireless Co., Ltd.
Rental Business
Q True Properties Co., Ltd.
Q True Fleet Management Co., Ltd.
Others
Q Telecom Training and Development Co., Ltd.
Q Thai Smart Card Company Limited
Q T pay Co., Ltd.
NOTE : Non activities companies
The group registration in Thailand as K.I.N. (Thailand) Co., Ltd., Tele Engineering and Services Co., Ltd., Yai Kaew Co., Ltd.,
Asia DBS Public Company Limited, Telecom International Co., Ltd.,U-Net Co., Ltd.,
Telecom Equipment Manufacturing Co., Ltd., Song Dao Co.,
The group registration in foreign as Telecom International China Co.,Ltd., TA Orient Telecom Investment Co., Ltd., Telecom Asia (China) Co., Ltd.,
K.I.N. (Thailand) Co., Ltd., Nilubon Co., Ltd.,
16
Revenues breakdown by business group
Business Group / Operation by
1.
Percentage of 31 December
Shares Held
2004
by the
Baht
%
Company Million
31 December
2003
Baht
%
Million
31 December
2002
Baht
%
Million
Fixed line and Value Added Se rvice 1
2.
Revenues
Wireless (PCT & Mobile Phone)
Wire & Wireless Company Limited
Asia Wireless Communication Company Limited
Bangkok Inter Teletech Company Limited
3.
Revenues
Multimedia Network and Broadband
True Multimedia Company Limited
4.
90.45%
16,893 60.4%
16,125 62.5%
11,730 35.5%
7,228 25.9%
6,096 23.6%
1,408
4.3%
1,097
3.9%
954
3.7%
1,029
3.1%
1,183
4.2%
1,199
4.7%
887
2.7%
471
1.7%
198
0.8%
Data Service
5.
Revenues
87.50%
99.99%
82.86%
16,632 50.4%
Revenues
90.45%
Internet
True Internet Company Limited
Asia Infonet Company Limited
True Digital Entertainment Company Limited
True Internet Data Center Company Limited
Revenues
6.
Other Business
99.99%
65.00%
99.99%
70.00%
True Fleet Management Company Limited
True Properties Company Limited
Other Companies
99.99%
99.99%
87.50%
Total Revenues
Revenues
1,324 4.0%
33,010 100%
1,078 3.9%
27,950 100%
1,203 4.7%
25,775 100%
Source: The Company
1
Includes Fault Reporting and Dropwiring, Public Phone and Audiotext
17
3. DETAILS OF EACH BUSINESS LINE
3.1 Products and Services
True Corporation is the most fully integrated nationwide communications solutions provider in
Thailand and one of the country’s largest brands. Backed by Asia’s largest agro-conglomerate, the
Charoen Pokphand Group (with a 36.08 percent shareholding), True’s subsidiary businesses
currently include cellular operator TA Orange, Asia Wireless Communication (operator of WE PCT),
True Multimedia, True Internet and pay TV operator United Broadcasting Corporation (UBC).
Through these companies True provides home consumers, small and medium enterprises
and corporates with the full range of cellular, wireless and wireline, Internet, data and
entertainment products and services in solutions or customized packages.
True is firmly established as the BMA’s leading wireline service provider with around 56
percent market share is the country’s largest Broadband provider with more than 85
percent market share, and the country’s leading Internet Service Provider. In TA Orange
True owns the fastest growing and third largest mobile operator.
1.
Fixed line and Value-Added Services
In 1991, the Company was formally awarded the Agreement for Joint Operation and Joint
Investment under a Build Transfer Operate (BTO) 25-year term, by TOT to construct, install and
jointly operate a 2.6 million wireline telephone expansion in the BMA. The Company shares its
revenue with TOT. TOT collects service charges from customers and then sends back a proportion
of revenue to the Company. Under the said agreements, our revenue sharing is based on gross
revenue before the deduction of related expenses, at the rate of 84 percent for 2 million lines and
79 percent for 600,000 lines. The Company has 82 percent revenue sharing from each valueadded service and 76.5 percent of the public phone. As at December 31, 2004 True had 1,944,521
fixed line subscribers - the highest BMA market share at approximately 56 percent.
TRUETF: Details of each business line
18
Telephone Subscription and Installation
Customers can subscribe for wireline telephone services at 57 True Shops throughout the BMA,
or through the Tele-ordering Center, an account executive or a direct sales representative.
Customers can contact the Call Center and report faults using the same easy to remember
number (02900-9000). They can also report faults through the 1177 Service Center, which
provides 24-hour service. Technical support is provided by 35 Bangkok Service Area and
Maintenance Centers throughout the BMA, which can fix business customer problems within four
to eight hours and residential faults within 24 hours.
Value-Added Services
In addition to fixed line or wireline services, the Company offers a range of value-added
services to meet customers’ needs, including:
•
The Company has provided a public phone service in the BMA since 1997 with
20,000 telephone units. In April 2002, the Company gained approval to install an
additional 6,000 telephone units, bringing the total number of units to 26,000.
•
Voice Mailbox, Call Waiting, Conference Calling, Call Forwarding, Hot Line,
Abbreviated Dialing, Automatic Call Repetition and Outgoing Call Barring.
•
Caller ID displays incoming call number on Call ID phone.
The Company also provides services for corporate customers requiring a large
number of telephone lines and provides a range of valued-added services including:
•
Direct Inward Dialing (DID automatically directs incoming calls to a party).
•
The Hunting Lines service bundles two or more telephone lines at one
location into a single number.
•
The Integrated Service Digital Network (ISDN) enables a telephone network
to handle all forms of voice, data and image communications
simultaneously on the same telephone line.
•
Televoting is a special service for companies with peak periods of short message
traffic. It enables companies to perform a lot of marketing activity without investing
in infrastructure. Vote results are available in as little as five seconds.
19
•
•
(2)
Free Phone 1-800 allows businesses to provide their customers with a free
contact call service. The cost of customer Free Phone calls are automatically
billed to the business. Customers can call from any telephone by dialing 1-800
followed by six digits.
Voice Conference enables to make a conference via telephone line
wherever and whenever customer are.
Personal Communications Telephone (WE PCT) and Mobile Phone Business (TA Orange)
The WE PCT business is operated by Asia Wireless Communication Company Limited,
(AWC) a True subsidiary. The mobile phone business is operated by TA Orange Co., Ltd.
(TA Orange). The Company has an almost 83 percent shareholding in TA Orange, held
through Bangkok Inter Teletech Co., Ltd. (BITCO).
2.1 Personal Communications Telephone (PCT)
Together with AWC, the Company officially launched its PCT Service in November 1999. PCT
is a wireless service that has the same number as a fixed line telephone, therefore it is easy to
remember. PCT can be used anywhere within the inner area of the BMA. In September 2004
the PCT brand was repositioned as “WE PCT” to reflect the strategy of building communities
and bringing together people via free calls within the WE PCT network.
All revenue from the PCT service is collected by TOT and the Company is paid 82 percent of
this, before deduction of related expenses, of which about 70 percent is paid to AWC as
compensation for operating the PCT service. The PCT service is also available to TOT
subscribers. Because the PCT network belongs to the Company, TOT shares approximately
80 percent of revenue received from its subscribers to the Company as a PCT network rental
fee (in the event that the foreign exchange rate is below Baht 38 per USD1) or approximately
82 percent of revenue (in the event that the foreign rate is Baht 38-45 per USD1). As at
December 31, 2004 the Company had 472,846 PCT subscribers, including PCT Buddy
(Prepaid PCT service) subscribers.
20
2.2
Mobile Phone Business (TA Orange)
In October 2001, the Company invested in a 41 percent shareholding in BITCO, which holds
99.86 percent of the shares in TA Orange to operate a GSM 1,800 MHz cellular business
under the Agreement granted by the Communication Authority of Thailand (CAT) until 2013.
In March 2002, TA Orange formally launched its business in both post-paid and pre-paid mobile
phone services. In September 2004, the Company completed the purchase of European mobile
operator Orange Group’s 39 percent shareholding in TA Orange and took an 83 percent
shareholding in the company. At December 31, 2004, TA Orange had 3,380,383 subscribers and
a 12.5 percent market share, making it the third largest mobile operator in the Thai market.
During 2004 TA Orange leveraged on synergies with the True Group to emphasize the
enhanced convenience and benefits of using a wide range of True services. In April 2004,
TA Orange and True unveiled the “All Together Bonus” campaign, which provided
customers with free TA Orange talk time for every Baht they spent on home telephone,
PCT, Click Internet, Easy Internet and hi-speed Internet services. By the end of 2004,
more than 200,000 customers had benefited from this “best for value” promotion.
TA Orange services
Talk Plan
TA Orange’s Talk Plan post-paid service allows customers to choose a monthly services
plan from a range of Baht 500, 800 or 1300 per month.
Just Talk
Just Talk is TA Orange’s prepaid service. TA Orange led the market during 2004 with a steady
stream of innovative pricing promotions, including the Just Talk 1 Baht per minute campaign. Once
the prepaid balance has been spent, top-up can be done via many channels including “Easy Top
Up” range
21
of services, which offers Just Talk customers convenient new ways to top up their mobile phone
accounts. “Mobile Top Up” lets Just Talk customers transfer prepaid credits from one mobile phone
to another. Another Easy Top Up is “Home Top Up”, which allows TA Orange customers to use their
True fixed-line account to top up their mobile phone.
Direct Business
TA Orange offers Direct Business, an advisory service dedicated to helping businesses find the
best possible solutions to their communication needs. Through careful analysis, dedicated
teams can identify and create customized communication solutions for businesses.
Multi-Media Services
TA Orange provides a range of multi-media services to enhance customer’s lifestyles. These can be
downloaded via GPRS under the Orange World portal and include four new services launched in 2004:
•
•
•
•
“Photo World”, a complete suite of photo-based communication and community services.
“Financial World”, which offers a range of financial information services to meet
the needs of Thai investors.
“Toon World”, which enables customers to download games, cartoons, screen
savers and ring tones featuring well known cartoon characters.
“Game World”, a complete games portal that offers the best selection of the
most popular games to mobile phone users.
Other TA Orange services launched in 2004 include:
•
•
•
Voice messaging: TA Orange and True launched Thailand’s first Voice SMS that
lets users send audio messages to fixed-line phones on any network in the
country. True customers can also send Voice SMS messages to any mobile or
fixed-line phone in Thailand.
International SMS including International SMS service reaching 123 countries.
Welcome SIM: enables tourists to make calls whenever they want across all
wireless communication networks without worrying about reconfiguring the
handset or having to buy a new one. They will also enjoy free calls for tourist
information and can get emergency assistance while in Thailand.
22
•
3.
Wi-Fi/GPRS: True and TA Orange launched Thailand’s first combined WiFi/GPRS package. This package provides unlimited access to both high-speed
data services at a flat monthly rate with a single monthly bill.
Data Transmission Services
True data transmission services include:
•
•
•
•
Digital Data Network (DDN) or Leased Line - a private network that facilitates voice,
data and image transmission between two different points at a stable speed. This
service is especially suited to customers, such as banks and financial institutions, which
rely upon continuous transmission of accurate data or information, often in large
volumes. The Company can provide a wide range of DDN speeds to suit customer
needs, starting from 64 kbps to more than 140 Mbps with guaranteed service quality. As
of December 31, 2004 the Company had installed 9,001 circuits. The Company is
offering DDN service in BMA and upcountry areas. True Multimedia, the Company’s
subsidiary, has expanded its DDN network into business centers of 40 provinces.
IP Access Service (IPAS), offered under the name Megaport, provides a total remote dial
access solution for customers who require an external access port. These include
Internet service providers, Web information providers, and business groups, which require
a Virtual Private Network Service, but do not want to bear the additional cost for
equipment and management of the access port.
Trunking access is an Internet connection circuit, which connects to your
access server to receive 30 lines (or multiple of 30 lines) dialing concurrently
from a nationwide telephone system, with a single easy to remember number.
Metronet is fiber-to-the-building technology that enables high-speed data transmission
through Fiber-optic cable, with reliable ring network architecture. It is designed to provide
a simple network configuration, with wider bandwidth capacity for business customers.
Metronet offers a range of data transmissions speeds from 512 Kbps to 1 Gbps.
23
•
•
4.
Network Manager is an outsourced network management service that can
advise on a range of functions, from infrastructure investment to network
design and implementation. The service also provides network system
monitoring, performance reporting and planning for future network expansion.
Mail Fax enables customers to send via a traditional fax and recipients to
receive it via their e-mail.
Multimedia and Broadband Services
Multimedia services are provided by subsidiary Asia Multimedia Co., Ltd. (AM), which changed
its name in November 2004 to True Multimedia Co., Ltd. True Multimedia (TM) has permission
from the TOT to provide non-fixed-line telephone services for 20 years from October 20, 1997.
True Multimedia has rented its HFC network of 35 analog channels to United Broadcasting
Corporation Public Company Limited (UBC), the Company’s affiliate, for broadcasting cable TV
programs. In addition, TM is a drop-wire distributor and provides UBC subscribers with drop-wire
installation services, including the maintenance of UBC set-top boxes installed at a subscriber’s house.
High-speed Internet (Broadband) Services
True Multimedia also provides wireline Broadband services through two technologies.
Cable Modem is an external device that allows computers to send and receive data via
the HFC network at very high speed. The transmission speed through AM’s cable modem
service is up to 100 times higher than other dial-modems currently used by Internet users.
As at December 31, 2004 the Company had 1,613 Cable Modem subscribers.
ADSL (Asymmetric Digital Subscriber Line), launched under the name TA Express, which
has been changed to “hi-speed Internet” later, is an always-on, high-speed Internet
service. Customers can select the speed (up to 4 Mbps) that suits their needs and can
surf the Internet and talk on the phone at the same time. As at December 31, 2004 the
Company had total consumer broadband subscribers of 164,775 with a market share of
approximately 85 percent.
24
In July 2004, the Company launched unlimited hi-speed Internet packages including local and
international websites. Monthly charges start at Baht 590 per month and in October 2004 True
announced its leadership in Broadband communications with the introduction of a new highvalue promotion for hi-speed Internet enthusiasts – a free modem and no registration fee, an
offer valued at 3,800 Baht. True also provided two special services for Internet fans including
Turbo on demand, an express channel that delivers a 2 Mbps connection speed with rates
charged for actual use per minute; and Broadband TV On PC, which enables users to view their
choice of diverse programs on a computer whenever they want at www.hispeedworld.com.
Wi-Fi Internet by True uses latest wireless communication technology and provides data
transmission at speeds of up to 11 Mbps. The Company offers “Wi-Fi Internet by TRUE” service
in 110 areas covering key convention centres, hospitals, and food and coffee outlets.
TA Station
TA station is a coin-operated kiosk offering Internet access at a speed of 512 Kbps. Each
station of True’s 70 sets of stations in the BMA has a built-in digital camera so users can
take their photographs and email them to their friends. The station can also provide
movie, music, game, ring-tone and logo downloads, as well as karaoke services.
5.
Internet, Content and Applications
Since receiving approval from CAT in November 1996, True subsidiaries, Asia Infonet Co.,
Ltd (AI) has provided Internet and e-commerce services under the name of True Internet.
True is currently one of the biggest Internet service providers in Thailand. As at December
31, 2004 it had 1,231,344 subscribers.
True’s customers are offered various service alternatives. Corporate customers can, for example,
select leased line, ISDN and web-hosting services, while private users can select from monthly or
hourly membership packages, or purchase an Internet kit or international roaming services.
25
The Company also offers an economical Internet service designed to exclusively serve its
telephone subscribers via the www.trueclick.net website. Trueclick.net is an on-line portal
that provides customers with high-speed, data transmission through a special gateway to
the Internet. Trueclick.net contains a variety of useful information and entertainment
content and has a free e-mail service for its subscribers. Customer can connect to the
Internet using True phone number 0-2900-9600-2 and stay connected for up to 3 hours
per dialup (with unlimited dialup). Service charges collected by AI are shared with the
Company at different ratios according to subscriber numbers.
In the first quarter of 2003 the Company and AI launched another Internet service for fixed line
customers under the name TA easy Click and changed to Easy Internet, which charges for actual
time used at the rate Bt 9 per hour. Charges are billed to customers together with the fixed-line
charges. Customers can connect to Easy Internet by dialing True phone number 0-2900-0000.
The Company provides corporate and institutional customers with e-commerce services and
end-to-end web development solutions. In the second quarter of 2003 AsiaNet Corporation Ltd.
(ANC) which changed its name to True Internet Co., Ltd. in August 2004, a Company’s affiliate,
entered a joint-venture with Dacom Corporation (the biggest IDC provider in Korea and Asia) to
create the True Internet Data Center Co., Ltd. The True Internet Data Center opened in April
2004 and provides a full range of Internet services to business customers.
Since the end of 2002 the Company has signed agreements with more than 20 information providers,
health and financial services and online game companies to setup a Broadband Community and
provide a range of content and applications through the website www.hispeedworld.com.
In January 2004, True Digital Entertainment launched PristonTale, a popular online game
which has received awards from the Cultural and Tourism Ministry of Korea. In May 2004
it launched ‘Home Entertainment by TRUE’, a high speed online music service delivered
via www.entertain.tv in association with R.S. Promotion Public Company Limited, an
entertainment provider.
In July, 2004 True formed a joint venture company “NC True” with NCsoft, the world’s
leading developer and publisher of online computer games in Korea. The first game
launched in early 2005 was ‘Lineage II’ the number one Massively Multiplayer Online Role
26
Playing Game (MMORPG) of Korea. In November 2004 True joined hands with R.S.
Promotion to deliver “Karaoke-on-demand and Movies" via high-speed Internet.
6.
Other services
The Company also provides:
An outsourced contact call center service under the name ContactAsia. Using
•
ContactAsia can reduce technology investment and overhead costs for customers,
while providing the highest levels of customer relationship management.
True Moving Home is an installation moving service for fixed line telephone, PCT
•
and Internet customers
Home Wiring Care to help customers solve telephone wiring problems.
•
3.2 Marketing Strategy
The Company aims to provide customers with tailored solutions and a range of bundled
telecommunications services. It believes that demand for a combination of wireline,
wireless, Internet and multimedia products and services will increase significantly in future.
In addition to providing access to the latest products and services, the Company and its
subsidiaries want to become more customer-centric and improve distribution channels.
Nature of Customers and Target Group
The Company recently separated its customers into two segments (Corporate and
Consumer) to enable staff to better focus on providing these segments with the most
appropriate high technology products and services.
27
Corporate Segment – categorized into 8 main groups:
1. Banking, Finance & Insurance
2. Government & State Enterprise
3. Industrial
4. Distribution
5. Carriers
6. Service Providers
7. Services
8. Business Partners
Corporate segment also includes small and medium sized companies that have revenue of
more than 300 million Baht per year or have less than 200 employees and need
telecommunications and ICT technologies to improve their business.
Consumer Segment - customers are dependent on type of products.
1. Fixed line and value added services – General customers
2. Internet and Broadband - Younger generation and students, existing dial-up Internet
users, high-value segments such as UBC members & credit card holders
3. Home Solutions - New houses and higher value home
3.3 Distribution Scheme and Distribution Channels
Distribution channels are divided into two sections:
1) Business Channel (for Corporate and Medium Enterprises):
1.1 Account Executives who are trained to understand customers’
requirements.
1.2 Technical Specialists/ Engineer Teams who give technical consultancy.
2) Consumer Channel
2.1 True Shops at 57 locations and Orange Shop at 27 around the BMA.
2.2 Teleordering centers, which customer can call to request a new phone
line or other services.
28
2.3 Direct Sales are by area, which have dedicated sales managers and
executives. Marketing activities are tailored and include mail drops,
promotional activities, and mobile outlets.
2.4 www.truecorp.co.th is the online channel to serve customers.
3.4 Procurement of Products and Services
Network Capacity for Services
The Company believes that its extensive fiber-optic network covering all over BMA gives it
a key competitive advantage. Voice and data travel through the fiber-optic cable network
at a higher speed than through copper wire or radio wave. In addition, the network
architecture can eliminate call failures due to accidental interruption or any other causes.
The network has a spider web design covering all of the service area, which enables True
to utilize other routes when one breaks down.
Network Acquisition
The Company has employed a number of suppliers to assist in network acquisition and
installation (including outside plant installation) to expand its service coverage, and is not
dependent upon any specific distributor or supplier.
Technical and Management Support
The Company has acquired technical and management support from Verizon
Communications, Inc. No further support has been provided since the middle of 2003 after
Verizon sold its shareholding in the Company. However, Verizon had transferred
substantial telecommunication expertise to the Company during the period of time when it
was a shareholder of the Company. The Company’s management team is capable of
operating without support from Verizon.
29
3.5 Thai Telecom Industry
Fixed line Telephone Business
Fixed-line telephone growth has slowed since 2003, due to the competition from cellular
business and the reintroduction of installation fees for new phone lines.
Table : Number of fixed line subscribers as of September 30, 2004
As of September 30, 2004
BMA
Provinces
Total
TOT*
1,485,690
1,912,762
3,398,452
The Company**
1,925,696
1,925,696
TT&T*
1,188,013
1,118,013
Total
3,411,386
3,100,775
6,512,161
source: * Data from www.tot.co.th
**Data from the Company
Fixed-line operator
Competition within the Thai fixed line telephone market increased in 2004 as the TOT
improved its marketing to compete with private companies. In addition, aggressive
promotion campaigns were launched by cellular operators. The traffic migration from fixed
line to mobile showed sign of leveling off as the cellular market growth slowed and cellular
operators moved their focus to retaining their customer base instead of attracting new
customers through price cuts. In addition, fixed line telephone operators have been offering
value-added services to better serve customers’ needs, for example Caller ID service, TT&T
and the Company joined forces to provide throughout the country.
From September 1, 2003, fixed line operators have been allowed to launch reduced-tariff
promotions for domestic long distance calls and calls to mobile phones. In early 2004
fixed-line operators were allowed to launch 6-month promotions under a flexible tariff
structure, with the two earlier packages setting ceiling rates. All these measures have
made fixed line services more competitive. In addition, to creating a more level playing
field between mobile and fixed line operators, the Flexible Tariff provided valuable market
intelligence in the run up to the introduction of an interconnection regime.
30
Cellular and PCT businesses
In 2004 the cellular market grew 22 percent, down on the 27 percent growth in 2003.
Subscribers increased 4.7 million to 27 million. The penetration rate at the end of 2004
was at 41 percent, an increase from the 34 percent rate in 2003. Most analysts expect
competition to stabilize as operators focus on increasing ARPU, Customer Relationship
Management (CRM) and providing new value-added services especially in non-voice
business such SMS, MMS, game and content.
Three new cellular operators have entered the market since 2002. TA Orange, which
provides GSM 1800 MHz cellular services, officially opened for business in March 2002.
Thai Mobile (joint venture between TOT and CAT), which provides Digital 1900 MHz
cellular services started operating in November 2002. Hutchison CAT Wireless Media
Company Limited, a joint venture between Hutchison Wireless Multimedia Holding Limited
and CAT, provides CDMA cellular services and started operating in November 2002.
Table : Number of cellular subscribers as of December 31, 2004
Cellular operator
Subscribers as at December 31, 2004
AIS
15,184,000
DTAC
7,786,165
TA Orange
3,380,383
Hutch & Thai Mobile
772,432
Total
27,122,980
As at December 31, 2004 TA Orange had 3,380,383 subscribers. As at December 31, 2004
WE PCT had 472,846 Subscribers.
Digital Data Network (DDN) business
The DDN market in Thailand continues to grow at about 20-30 percent a year due to the
popularity of on-line data transmission and an increase in Internet users. There is high
competition between the large number of DDN operators and suppliers of alternatives,
such as ADSL providers.
31
The Company has a competitive advantage in having the most modern network. In
addition, it seeks to differentiate itself from competitors through a focus on service quality.
In 2003 the Company launched the Managed Data Network service, which combines three
network operation services including network performance management, fault management
and configuration management. In 2004 True launched data network solutions to suit
different needs of customers.
Broadband business
The Broadband business is at an early stage of development with the relatively small
number of subscribers growing at a rapid rate. In 2002 the Company’s Broadband
customers more than doubled to approximately 3,700 subscribers, representing more than
50 percent of the total market share. In 2003, Broadband subscribers grew by 214 percent
to 11,661 (as at December 31, 2003). In 2004 True became firmly established as the
Broadband market leader with 85 percent share. As at December 2004, the True
Broadband subscribers grew more than 13 folds year-on-year to 164,775.
One of the drivers of this rapid subscriber growth has been the falling cost of modems. In
addition, on-line content such as games has become more popular. Broadband monthly
fees have also fallen as Broadband service providers have increased the size customer
bases. The Government has also reduced International Internet Gateway fees, lowering
costs for service providers.
Broadband penetration in Thailand remains low (less than 1 percent of population)
compared to penetration rates in other developed Asian countries, such as Korea (23.3
percent), Hong Kong (18.0 percent), Japan (11.7 percent) and Singapore (10.1 percent).
(Source: ITU World Telecommunication Indicators Database, 2004). This suggests that the
Thailand market has a lot of room to grow.
There are several operators in the Thailand Broadband market; United Broadband
Technology Co., Ltd. (UBT) under the UCOM group; Lenso DataCom Co.,Ltd (under Q-Net
service); Samart; CS Loxinfo; TOT; TT&T; Advance Data Network (ADC) under the Shin
Corporation Group and the Company. Only TOT and True own a fixed line network in
the BMA, which gives both companies a competitive advantage. True has more network
coverage and the most modern network with extensive fiber optic cabling, which is most
32
suitable for providing Broadband services. In addition, True can offer a wider range of
Broadband services at a reasonable price because of its ability to leverage synergies
between Group subsidiaries.
In early 2003 some service providers, including True, started offering wireless Broadband
services or WiFi (Wireless Fidelity). Competition in this market is not high because of the
small number of providers.
Internet Services
There were an estimated seven million Internet users in Thailand at the end of 2004, an
increase of approximately 17 percent compared with 2003. [Source: National Electronics
and Computer Technology Center (NECTEC)]. This represents a penetration rate of
approximately eleven percent. This is relatively low when compared with other developed
countries, such as Korea (61 percent), Singapore (51 percent), Japan (48 percent), Hong
Kong (47 percent) and Taiwan (39 percent). (Source: International Telecommunication
Union, 2003).
The growth in Internet users was partly the result of Government ICT initiatives designed
to transform Thailand into a knowledge society. These initiatives were grouped into five
projects; e-Government, e-Commerce, e-Industry, e-Education and e-Society. To support
this goal the Government has provided low-cost computers and Internet access and
reduced the cost of international lease circuits. It has also approved the installation of an
additional 565,500 fixed-line telephones across the country in 2004 and supported the
introduction of low-cost hi-speed Internet in order to increase the number of users to one
million by the end of 2004.
Competition among Internet businesses was high in 2004 because of the large number
(18) of Internet Service Providers (ISPs). However, service charges were relatively stable at
approximately Bt 7-9 per hour for a dial up service.
True provides Internet services through its subsidiary, Asia Infonet Co., Ltd. (AI), and True
Internet which became Thailand’s biggest ISP in 2004. As at December 31, 2004 True had
1,231,344 subscribers. Other major operators, include CS Loxinfo, KSC Internet, and
Internet Thailand,
33
In 2005, the Company expects to see continued rapid growth in Internet services and
more ISP providing Broadband services.
Regulatory Update
Key developments in 2004 included;
The establishment of the National Telecommunications Commission (NTC)
- August 27, 2004, The Senate selected the seven members of the NTC, Rianchai
Reowilaisuk, Prasit Prapinmongkolkarn, Suchart Suchatvejapoom, Sethaporn
Kusripituk, Chuchart Promprasit, Artorn Chantawimol and Sutham Yoonaitham.
- September 1, 2004, General Chuchart Promprasit was voted chairman of the
NTC.
- His Majesty the King endorsed the seven NTC members on October 1, 2004.
- The NTC officially took office on November 1, 2004 and announced urgent
tasks, including the formation of the NTC office and the telecommunication
master plan.
- The NTC received USD 270,000 dollars for operating expenditures from the World Bank.
- December 1, 2004, The NTC announced the details of its organizational
structure,– Telecommunication Resources Bureau, Competition Bureau,
Customer and USO Bureau, International Bureau, Policy and Regulatory
Development Bureau and Administration Bureau.
- The NTC said it expected to grant new operating licenses in June 2005,
starting with permits for state-owned carriers TOT and CAT and including
private companies that do not have concessionions with TOT or CAT.
- The NTC announced it planned to introduce an Interconnection charge in mid
June 2005. The telecommunication master plan is expected to be complete in
February to March 2005.
- Mid-December 2004, the NTC imposed an ethical code of conduct on its seven
members.
34
TOT and CAT Privatization
- In the 2004 there was no further development on the planned TOT and CAT privatization.
Concession Conversion
- The Government has been trying to facilitate the concession conversion for the
telecom sector since 2000. It has appointed committees and advisors to
perform a feasibility study and outline the concession conversion framework,
but cannot find the solution that all parties can agree on.
- May 2004, The concession conversion committee including TOT, CAT and
financial consultants identified three options for the concession conversion
process: (1) no conversion; (2) compensation to be calculated for “x” years of
revenue sharing and the buy back of assets would be allowed; and (3) revenue
sharing would be maintained as started in their concession, but assets could
be bought back at the end of concession.
Interconnection Regime
- In 2003, the ICT Ministry initiated a study on Interconnection charges in order
to create a fairer playing field for all operators. The ICT Ministry appointed the
Post and Telegraph Department to be a coordinator and to hold meetings with
telecom operators to study and recommend rules and regulations for the
interconnection regime.
- May 2004, The ICT ministry released a study on interconnection charges and
recommended a termination charge rate of 1.07 Bt/min.
- In August 2004, the Post and Telegraph Department was dissolved and the NTC was
established to regulate the telecom industry, including the interconnection regime.
Reduced tariff for domestic long distance calls for fixed line service
- From September 1 to November 30, 2003, all fixed-line operators were given
approval by the ICT Ministry to jointly launch three-month reduced tariff
35
promotions for domestic long-distance and call-to-mobile services via two
packages. The promotion was extended one more month to December. Details
of the two options are as follows. For package one, the monthly fee (Baht
100) and local call tariff (Baht 3 per call) remained the same. The domestic
long-distance call tariff was reduced to Baht 3,6 and 9 per minute (from Baht
3,6,9,12, 15 and 18 per minute). Charges for calls to mobiles within the same
area remained the same (Baht 3 per minute), but reduced to Baht 6 per minute
(from Baht 8, 12 per minute) for different areas. For the second package, the
rates were reduced to Baht 3 per minute nationwide for calls from fixed-line to
fixed-line and to mobile phones, while the monthly fee was raised by Baht 100
to Baht 200.
- At the start of 2004 fixed-line operators were allowed to launch 6-month
promotions under a flexible tariff structure, which used the previous two
packages as ceiling rates.
- July 2004, TOT extended the flexible tariff promotions to June 30, 2005 after
the six-month trial. Only TOT and True provided these promotions because
TT&T refused to join the program.
Reduced tariff for international long distance calls for fixed line service
- TOT began offering international direct dial services (IDD) on July 1, 2004 to
nine countries on a trial basis (the United States, United Kingdom, Australia,
Germany, Japan, China, Taiwan, Hong Kong and Singapore) at 9 Bt/min.
- In the same period, CAT reduced rates of an international phone service via
voice-over internet protocol (VoIP) named “eFONE” from 7-33 Bt/min to 7
Bt/min in 30 countries and “CAT PhoneNET”(pre-paid card) from 7-33 Bt/min
to 6 Bt/min.
- August 2004, TOT launched an international phone service via voice-over
internet protocol (VoIP) by dialing the prefix 008 at 7 Bt/min in 29 countries.
- November 2004, TOT expanded destinations for an international phone service
via voice-over internet protocol (VoIP) to 151 countries.
36
4. RESEARCH AND DEVELOPMENT
The Company did not invest any on Research and Development (R&D) activities for the
technology or communication apparatuses as technology network and equipments that
the Company used in providing the services to the customers. The Company decided to
purchase the ready-made communication networks and equipments from the various
suppliers which the Company has an opinion that those products are efficient, hightechnological and appropriate to the Company’s activities. Therefore, it was unnecessary
for the Company to invest on the R&D to create and build its own network and
communication equipments.
However, most of its R&D Budget is contributed to the marketing which the Company
strongly developed and intended to improve on its service to meet the growing demands
and the customers’ needs. The Budget was divided into three main areas, R&D in
Marketing, New Services and Service System. During the last three years, the total
expenses for R&D are as follows:
YEAR
Thai Baht (thousand)
2004
29,900.71
2003
4,659.67
2002
17,410.11
TRUETG: Research and Development
37
5. OPERATING ASSETS
5.1 Property, plant and equipment
Network equipment and non-network equipment are included in property, plant and
equipment. Under the Joint Operation and Joint Investment for Expansion of Telephone
Services Agreement of 2.6 million lines, PCT, Mobile phone and Internet services, the
assets pertaining to these agreements must be transferred to TOT and CAT.
As at 31 December 2004, the Group's assets are listed below :
Network equipment
Net book value (Baht Million)
Consolidated
Company
Land and land improvement
1,848
1,848
Building and construction
1,118
1,118
Telephone network equipment
24,523
24,612
Mobile phone network equipment
36,940
1,658
Public Phone
1,050
992
Multimedia network equipment
1,717
Power supply and computer
340
340
Work in progress
92
89
Total
67,628
30,657
Network equipment in the consolidated financial statements at net book value of
Baht 30,952 million was transferred to TOT and CAT under the various Agreements and
Baht 29,758 million of the Company was transferred to TOT under the the Agreements
for Joint Operation and Joint Investment. According to the agreements, the Group has
the right to operate and maintain these assets over the agreements periods. The
Company assign the right to operate network equipment which transfer to TOT
(according to the conditional assignment over the Agreement for Joint Operation and
Joint Investment) to secure of the Thai Baht borrowings. Non-network assets are the
right of the Group to operated, utilised and disposal those assets. As at 31 December
2004, the Group's assets are listed below :
Non-network equipment
Net book value (Baht Million)
Consolidate
Company
d
Land and land improvement
293
Leasehold right & improvement
1,376
81
Furniture, fixture and equipment
688
213
Vehicle
1,552
1
Power Supply & computer
4,036
351
Work in progress
102
52
Total
8,047
698
TRUETH: Operating Assets
38
5.2
Intangible assets
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the
Group’s share of the net assets of the acquired associated at the date of acquisition. At 31
December 2004, goodwill from acquisition of an associate (UBC) at the amount of Baht 3,263
million was presented in the balance sheet under the investment in subsidiaries, joint venture
and associates. And goodwill from acquisition of Bangkok Inter Teletech Co., Ltd (“BITCO”)
amount of Baht 997 million was presented in the balance sheet under intangible asset.
Computer software development cost
Computer software development cost which enhances or extends the performance
of computer software programmers beyond their original specifications is recognised as a
capital improvement and added to the original cost of the software. At 31 December
2004 net book value is Baht 1,112 million.
Trademarks
Trademarks represent the consideration paid by a subsidiary to use another
venture’s trademark in Thailand. At 31 December 2004 net book value is Baht 59 million.
The right to operate NON-POTS and to hang dropwire
The right to operate NON-POTS and to hang dropwire is expenditure for license,
which represent fair value of subsidiaries’ share exchange. At 31 December 2004 net
book value is Baht 400 million.
Investment in subsidiaries and associates policy
Investment in subsidiaries and associates of the Company has been done through
Telecom Holding Co., Ltd. (“TH”), which the Company holds 99.99% of TH shares. TH was
established as a holding company to invest in telecommunication projects and related
business. The Company has policy to invest in provisions that it will be the major shareholder
of subsidiaries or associates and/or will be the operator or manage the invested project on its
own, except when conditions in the market does not allow the Company to do so. The amount
of investment made by TH will not be more than the existing issued capital of TH. The
Company can not borrow new money to invest in any projects unless the creditors under the
Company’s debt restructuring agreement permit. Thus, the risk associated with the investment
would be limited by the amount of issued capital of TH. Moreover, the Company will appoint a
representative to be the director of subsidiaries or associates as per the percentage of
shareholding to closely monitor the management of such subsidiaries or associates.
TRUETH: Operating Assets
39
6. FUTURE PROJECTS
The Company and its subsidiaries have investment plans in 2005 for the following projects:
1. Retail Distribution Center
The Company plans to upgrade outlets that offer Company and subsidiary products, as
well as other IT products, so that they are in line with the new corporate branding.
2. Corporate ICT
The Company plans to provide ICT services as one-stop-service for corporate customers.
This investment will support the Company strategy of becoming a customer-centric
communications solutions provider.
3. Capacity Expansion of Broadband Service
The Company plans to expand capacity of its broadband network service. To cope with
the expected market growth, this will serve 500,000 customers with more efficiency.
4. Data Network Expansion to provinces
The Company’s subsidiary, True Multimedia, plans to expand its upcountry Fiber Optic
network to the more provinces to support the mobile phone network expansion of TA
Orange and the Internet service of Asia Infonet. Part of this Fiber Optic network will also
support the DDN and Broadband network of True Multimedia, which will reduce
duplication of investment between subsidiaries, and improve network management
efficiency.
TRUETI: Future Projects
40
7. LEGAL DISPUTES
(1) Lawsuits that may have negative effect on the Assets of the Company
and subsidiaries in the amount of over 5% of the shareholders equity
as at December 31, 2004
: None
(2) Lawsuits that may have material effect on the Company’s business
but could not be appraised the quantitative amount
: None
TRUETJ: Legal Disputes
41
8. CAPITAL STRUCTURE
8.1 Company’s Securities
As of 31st December 2004, the Company has 7 securities namely:
1. Ordinary Shares
2. Preferred Shares
3. Warrants under the Employee Stock Option Plan Year 2000 (“ESOP 2000”)
7. NVDR (Non-Voting Depository Receipt)
Details of each security are as follows:
1. Ordinary Shares
At 31st December 2004, the Company has registered capital in total of THB 46,583.39
million, consisting of 3,958.87 million ordinary shares with par valued THB 10 each and
699.46 million preferred shares with par valued THB 10 each, of which THB 40,925.27
million are paid up capital divided into 3,393.06 million ordinary shares of THB 10 each
and 699.46 million preferred shares with par valued THB 10 each.
2. Preferred Shares
At 14th February 2000, the Extraordinary General Shareholders Meeting No.1/2000 has
resolved to approve the allocation of 702,000,000 news preferred shares to offer for sale to
KfW and/or wholly owned subsidiaries of KfW and/or the Thai Trust Fund with the total
offering price of USD 150 Million. On March 30, 2000 the Company allocated 343.98
million preferred shares or 49% to KfW and 358.02 million preferred shares or 51% to Thai
Trust Fund, the details of preferred shares’ rights, as summarized below:
a. During the period between the date of the issuance of the Preferred Shares to and
including the 8th anniversary of the issuance of the said Preferred Shares, the rights
conferred to the holders of Preferred Shares shall be as follows:
TRUETK: Capital Structure
42
(1)
The holders of Preferred Shares shall be entitled to receive dividends in
priority to the holders of the ordinary shares at the rate of THB 1 per share
per fiscal year (except for the first fiscal year in which the Preferred Shares
have been issued and for the last fiscal year of the said 8-year period).
(2)
The right of the holders of the Preferred Shares to receive dividends
at the rate specified in Clause a (1) above is the right to receive
cumulative dividends for any fiscal year in which the payment of
such dividends has not been at all declared or not been declared in
full (the “Cumulative Dividends in Arrears”).
The holders of the Preferred Shares shall first receive the dividends
before the holders of ordinary shares.
After the Preferred Shareholders have received the foregoing dividends
in full, any remaining profits shall be divided in equal amount per share
and paid to the Preferred Shareholders and the ordinary shareholders.
(3)
Upon liquidation or dissolution of the Company, any assets remaining
after payment of all amounts payable in respect of indebtedness and
other obligations of the Company shall be paid to the holders of the
Preferred Shares in priority to the holders of the ordinary shares, in the
amount equivalent to the par value of Preferred Share per each share
held by such holder of the Preferred Shares plus any Cumulative
Dividends in Arrears.
If there remains proceed of liquidation of the assets of the Company,
they shall be divided and paid to the holders of the ordinary shares.
(4)
(5)
And if there still remains proceeds of liquidation of the assets of the
Company, they shall be divided and paid in equal amount to the holders
of the preferred shares and the holders of the ordinary shares.
The Preferred Shares may be converted into ordinary shares at any time.
Each Preferred Share shall carry the right to one vote at any
meeting of the shareholders of the Company.
43
b. After the 8th anniversary of the issuance of the Preferred Shares and onwards, the
rights conferred to the Preferred Shares shall be as follows:
(1)
The holders of the Preferred Shares shall be entitled to receive
dividends in priority to the holders of the ordinary shares at a rate
of THB 0.01 per share per fiscal year (plus any Cumulative
Dividends in Arrears). In case there are remaining profits which are
to be paid as dividends in any fiscal year after the foregoing
dividends have been paid in full, such remaining profits shall be
divided in equal amount per share and paid to the holders of the
Preferred Shares and the holders of the ordinary shares.
(2)
The Preferred Shares under Clause b (1) above, the right of the
holders of the Preferred Shares to receive dividends at the rate of
THB 0.01 per share per fiscal year is not the right to receive
dividends on a cumulative basis for any fiscal year.
(3)
The holders of the Preferred Shares shall also have the rights as
specified in Clause a (3), (4) and (5).
Provided always that ordinary shares resulting from conversion shall have
no right to receive any Cumulative Dividends in Arrears during the time they
were Preference Shares.
However, KfW issued Purchase Rights to all shareholders of the Company.
The Purchase Rights entitle holders to be able to buy back those preferred
shares from KfW at the ratio of 1 Purchase Rights to 1 preferred share. The
Purchase Rights Holders can exercise their rights on the second anniversary
of Purchase Rights Issuance as the first time and semiannually from year 3
to year 8. The exercise price on the second anniversary date will be equal
to KfW’s cost plus 20% per annum. The exercise prices for other periods
will be in different formulas, which factor in share price changes.
44
The Annual General Meeting of the Shareholders of the Company for the year 2000 held
on April 27, 2000 has approved the issuance and the offer of non-transferable warrants to
certain Directors and employees at executive level not exceeding 35 persons. Details of
which are summarized as follows:
Number of Warrants : 36,995,000 units
Issued and Outstanding
Issuing Date
: 9th June 2000
Maturity
: 10 years from the issuance date
Expiry Date
: 9th June 2010
Exercise Period
: (a) Warrant Type 1: Each Warrant Holder received 3
separate warrant certificates. Each
certificate represented 1/3 of the whole
amount of warrants allotted and is
exercisable for subscribing ordinary
shares starting from June 30, 2000,
2001 and 2002 respectively.
(b) Warrant Type 2: Each Warrant Holder received 3
separate warrant certificates. Each
certificate represented 1/3 of the whole
amount of warrants allotted and is
exercisable for subscribing ordinary
shares starting from December 31,
2000, 2001 and 2002 respectively.
Exercise Ratio
: One unit of warrant entitles its holder to purchase one
ordinary share of the Company at Baht 10.60
45
Directors and employees at executive level not exceeding 35 persons. Details of which are
summarized as follows:
Number of Warrants
: 37,131,597 units
Issuing Date
: 14th June 2002
Maturity
Expiry Date
: 13th June 2007
Exercise Period
: Each Warrant Holder received 3 separate warrant certificates. Each
certificate represented 1/3 of the whole amount of warrants allotted
and shall be exercisable for subscribing ordinary shares as follow:
The 1st Certificate: Warrant Holders shall be starting
exercising from 14th June 2003 until
its expiration.
The 2nd Certificate: Warrant Holders shall be starting
its expiration.
The 3rd Certificate: Warrant Holders shall be starting
its expiration.
Exercise Ratio
: One unit of warrant entitles its holder to purchase one ordinary
share of the Company at Baht 10.60
46
Directors and employees at executive level not exceeding 35 persons. Details of which are
summarized as follows:
Number of Warrants : 18,097,664 units
(as of 28th February 2005)
Issuing Date
: 17th June 2003
Maturity
Expiry Date
: 16th June 2008
Exercise Period
: Each Warrant Holder received 3 separate warrant certificates. Each
its expiration.
its expiration.
Exercising from 17th June 2006 until
its expiration.
Exercise Ratio
: One unit of warrant entitles its holder to purchase one
ordinary share of the Company at Baht 5.20
47
(6) Warrants under the Employee Stock Option Plan Year 2004 (“ESOP 2004”)
The Extraordinary General Shareholders Meeting No. 2/2547 of the Company for the year
2004 held on 10th June 2004 has approved the issuance and the offer of non-transferable
warrants to purchase the Company’s ordinary shares to certain Directors and employees at
executive level totaling not exceeding 35 persons. Summary details are as follows:
Number of Warrants
: 18,274,444 units
Date of Issuance
: 7th February 2005
Maturity
Date of Expiry
: 6th February 2010
Exercise Period
: Each Warrant Holder received 3 separate warrant certificates.
Each certificate represented 1/3 of the whole amount of
warrants allotted and shall be exercisable for subscribing
ordinary shares as follow:
exercising from 7 February 2006
until its expiration.
Exercise Ratio
: One unit of warrants entitles to purchase one ordinary share at
Baht 11.20
48
(7) NVDR (Non-Voting Depository Receipt)
An NVDR or is a Non-Voting Depository Receipt trading instrument issued by the Thai
NVDR Company Limited, a subsidiary wholly owned by The Stock Exchange of Thailand
(SET). The NVDR is a security as specified by the SEC and is automatically regarded as a
listed security in the SET. By investing in NVDRs, investor will receive all financial benefit,
as if they had invested in a company’s ordinary shares. The only difference between
investing in the NVDR and the company’s ordinary shares is NVDR holders have no right
to vote.
As at 18th March 2005, Thai NVDR Company Limited invested in a company’s ordinary
shares in the amount of 78,059,276 shares, which represents 1.91% of the total shares to
be issued and paid-up of said company.
Obligation in stock issuance in the future
1. For Convertible Preferred Shares
In the successful debt restructuring process, Kreditanstalt fur Wiederaufbau (“KfW”) has an
equity injection of USD 150 million in the Company and the Company issued 702 million
convertibles preferred shares to KfW and Thai Trust Fund. Due to the terms specified that
the preferred shares are set to be converted into ordinary shares before distributed to
Purchase Rights Holders who exercise their rights, as described above. Therefore, the
Company is obliged to issue the ordinary shares to replace the preferred shares as per the
amount of the exercised Purchase Rights on each exercise date.
2. For Exercise of Warrants under the Employee Stock Option Plan (ESOP 2000)
The Annual General Shareholders Meeting for the year 2000 held on 27 April 2000 has
resolved to approve the Company’s Employee Stock Option Plan 2000. The warrants of
58,150,000 units were issued and offered to certain Directors and employees at executive
level. In this regard, the Shareholders Meeting has resolved to approve the allocation of
58,150,000 new ordinary shares to be reserved for exercise of the warrants rights
according to such plan.
49
The Annual General Shareholders Meeting for the year 2002 held on 12th April 2002 has approved
the issuance and the offer of non-transferable warrants to certain Directors and Employees at
executive level, not exceeding 35 persons in the total of 37,131,597 units (“ESOP 2002”). In this
regard, the Shareholders Meeting has resolved to approve the allocation of 37,131,597 new
ordinary shares to be reserved for exercise of the warrants rights according to such plan.
The Annual General Shareholders Meeting for the year 2003 held on 11th April 2003 has approved
the issuance and the offer of non-transferable warrants to certain Directors and Employees at
executive level, not exceeding 35 persons in the total of 19,862,729 units (“ESOP 2003”). In this
regard, the Shareholders Meeting has resolved to approve the allocation of 19,862,729 new
ordinary shares to be reserved for exercise of the warrants rights according to such plan.
The Extraordinary General Shareholders Meeting No. 3/2547, held on 23rd September 2004 has
approved the issuance and the offer of non-transferable warrants to certain Directors and
Employees at executive level, not exceeding 35 persons in the total of 19,111,159 units (“ESOP
2004”). In this regard, the Shareholders Meeting has resolved to approve the allocation of
19,111,159 new ordinary shares to be reserved for exercise of the warrants right according to
such plan. (This resolution is merely to replace the former resolution of the Extraordinary General
Shareholders Meeting No. 2/2547, held on 10th June 2004)
6. For the capital increase to reserve for IFC
The Extraordinary General Shareholders Meeting No. 3/2547 held on 23rd September 2004 has
resolved to approve the capital increase from Baht 38,096,415,400 to Baht 46,583,393,190 by
issuing new ordinary shares 848,697,779 shares at a par value of Baht 10 each in order to
reinvest in the cellular business, TA Orange Co., Ltd. through Bangkok Interteletech Co., Ltd. and
to partly repay indebtedness. The Company also allocated part of these increasing shares to
reserve for IFC under the C Loan Agreement.
Secondary Market of Common shares in the Present
Presently, Ordinary shares of the company are now available on SET. The Company has delisted
all Global Depository Receipts – GDR in the amount of 2.5 million GDR (1 GDR equal to 10
ordinary shares of the Company), from the foreign stock exchange, as foreign investors can directly
invest by trading a company’s ordinary shares or NVDRs in the Stock Exchange of Thailand.
50
8.2 SHAREHOLDERS
Major Shareholders1
as at 18th March 2005
(The latest share register book closing date)
NAME
No. of Shares
(Million Shares)
% of Total
Issued Shares
1,477.02
36.08
1.
CP Group2
2.
THAI TRUST FUND
357.99
8.74
3.
KREDITANSTALT FÜR WIEDERAUFBAU (“KfW”)
341.47
8.34
4.
HSBC (SINGAPORE) NOMINESS PTE LTD.
155.40
3.80
5.
STATE STREET BANK AND TRUST COMPANY
128.65
3.14
6.
MORGAN STANLEY & CO INTERNATIONAL LIMITED
115.70
2.83
7.
THAI NVDR CO., LTD.
78.06
1.91
8.
CLEARSTREAM NOMINEES LTD.
70.29
1.72
9.
GOLDMAN SACHS INTERNATIONAL
66.69
1.63
10.
LITTLEDOWN NOMINEES LIMITED 3
58.06
1.42
1
2
Including common shares and preferred shares.
There are 1)Charoen Pokphand Group Co., Ltd. and its report declare group named, 2)Bangkok Telecom Holding Company
Limited, 3)Charoen Pokphand Foods Public Company Limited, 4)Bangkok Produce Merchandising Public Company Limited, 5)
Bangkok Agro-Industrial Products Public Company Limited, 6)Charoen Pokphand Northeastern Public Company Limited,
7)Kasetphand Industry Company Limited, 8)Charoen Pokphand Enterprise Company Limited, 9)Unique Network Company Limited,
10)Wide Broad Cast Company Limited, 11)C.P. Interfood (Thailand) Company Limited, 12)Star Marketing Company Limited, 13)Advance
Pharma Company Limited and 14)Golden Tower Trading Limited.
51
The Shareholders Agreement
The Shareholders Agreement dated December 22, 1999
Kreditanstalt fur Wiederaufbau ("KfW"), Nynex Network Systems (Thailand) Company
(“Verizon”), and the CP Group (comprising of Charoen Pokphand Feedmill Public Company
Limited, Bangkok Produce Merchandising Public Company Limited, Charoen Pokphand
Group Company Limited and Bangkok Telecom Holding Company Limited) entered into a
Shareholders Agreement dated December 22, 1999. Terms and conditions specified
therein shall be summarized as follows:
1
In addition to the right of KfW under the Debt Restructuring Agreement, KfW is
entitled to nominate its representatives to the Company's Board of Directors in
proportion to the percentage of its shareholding as against the total number of
the directors representing the parties to the Shareholders Agreement. However,
in any case, KfW is entitled to appoint at least one director and said right shall
exist as long as KfW holds shares in the Company, directly or indirectly, not
less than 5% of total shares of the Company.
2
During the first three years from the date of KfW's subscription of the shares in the
Company and so long as KfW holds shares in the Company, directly or indirectly, at
least 5% of the paid-up shares, the parties to the Shareholders Agreement will vote
against each of the following actions unless KfW agrees to such action:
(i)
any amendment to the Memorandum and Articles of Association
and amendments to rights attached to shares;
(ii)
any increase or reduction in the authorized share capital of the
Company or any issuance of new shares or the private placement
of shares or a proposed public offering;
(iii) any voluntary liquidation, dissolution, cease of the business,
recapitalization or reorganization of the Company or any merger,
consolidation, amalgamation or other business combination of the
Company with or into another person or any sale of all or a substantial
part of the assets of the Company or any of its material subsidiaries;
(iv) any change in the number of directors or the quorum for meetings
of the Board of directors;
(v)
delisting of the shares in the Stock Exchange of Thailand; and
(vi) carry on any business other than Authorized Businesses (as defined
in the Debt Restructuring Agreement).
52
3
Subject to any other conditions binding on KfW with regard to the right granted to
the Company's shareholders, KfW may sell or enter into an agreement to sell for a
cash selling price all of its shares or not less than 25% of its shareholding, at any
time after the expiration of the first three years from the date KfW was allotted the
shares in the Company. The foregoing does not prohibit KfW from selling its
shares when its shareholding is illegal or restricted by the applicable law.
4
During the first three years from the date of KfW’s subscription of shares,
the parties to the Shareholder Agreement (other than KfW) agree to refrain
from transferring more than 10% of the shares so held by each party as
specified in the Shareholders Agreement.
5
The parties agree to refrain from amending or modifying the Verizon Shareholders
Agreement dated June 23, 1992 except obtaining prior written consent from KfW.
6
Each party shall disclose to the other party any conflict of interest or
related transactions which the party, or any of its subsidiaries, has entered
into or will enter into with the Company.
7
In each fiscal year, subject to availability of cash flow (without incurring additional
indebtedness), other legal requirements, the SET regulations and restrictions
imposed by the Debt Restructuring Agreements or any other agreements, the
parties agree to cause the Company to pay dividends at least 50% of the net profit
of the Company after statutory reserves have been established to its shareholders.
8.3 Dividend Policy
The Company has not paid or declared any dividends on its issued shares since operation
commencement. The Company can pay dividends only out of its profits after deducting its
cumulative losses, and only if it has set aside as a legal reserve. The Company’s restructuring
agreement also limits its ability to pay dividends until all of its indebtedness is repaid in full.
The Company’s principal shareholders have entered into a shareholders’ agreement
under which they agreed to vote for and cause their representatives appointed to the Company’s
Board of Directors to declare an annual dividend equal to at least 50% of its net profits for that
year, after statutory reserves and subject to availability of cash, the regulations of SET, and its
credit facilities. Before dividends can be paid to holders of its ordinary shares, however, dividend
payments on preferred shares must be paid in full. Within March 31, 2008, the eighth anniversary
53
from the date its preferred shares were issued, the Company’s preferred shareholders are
entitled to receive cumulative dividends at the rate of THB 1 per share per fiscal year. After
March 31, 2008, holders of our preference shares are entitled to a non-cumulative dividend at
the rate of THB 0.01 per share per fiscal year. The right to receive cumulative dividends for any
fiscal year in which the payment of those dividends was not declared ceases once a holder
converts its preferred shares into ordinary shares.
For dividend policy of subsidiary company, each subsidiary company’s Board of Directors will
consider the payment of dividends from the balance of cash flows compare with capital
investment of individually subsidiary company. Subject to the availability of cash flows of
subsidiary company and only if it has set aside as a legal reserve, each Board of Directors of
individually subsidiary company shall consider the payment of dividends just in case.
8.4 Liabilities Structure
As of December 31, 2004, the total liabilities of the Company and its subsidiaries according to
the consolidated financial statements is Baht 97,888 million. The details are as follows:
Liabilities of the Company on consolidated basis
Current liabilities
Short-term borrowings
Trade account payable
Current portion of long-term borrowings
Unearned income
Accrued expenses
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term borrowings
Long-term trade account payable
Other non-current liabilities
Total non-current liabilities
Total liabilities
(Unit:million Baht)
Amount
218
4,108
4,450
1,353
3,301
2,884
16,314
79,971
1,246
357
81,574
97,888
54
As of December 31, 2004, the total borrowings including the total long-term trade account
payable (which is consisting of both current portion and long-time portion) of the
Company and its subsidiaries was Baht 86,044 million. This consisted of the borrowings
and long-term trade account payable that were denominated in Baht currency of Baht
74,651 million; denominated in US Dollar currency of Baht 6,664 million (or USD 170
million); and denominated in Yen currency of Baht 4,729 million (or Yen 12,483 million).
Since the debt restructuring on December 22, 1999 until December 31, 2004, the Company has
always made repayment of its secured loan on due date. And it had made prepayment to its
Secured Creditor by the Company’s excess cash in the amount of approximately Baht 2,000
million to decrease its interest payment obligation and to reduce its foreign currency exposure.
In the past, the Company had large amount of US Dollar loan. It has had policy to reduce
fluctuation from foreign currency exchange, and has successfully reduced US dollar loan
through the following measures:
February 2001
The Company used its excess cash to partially prepay its
secured loan in the amount of approximately Baht 532 million.
June 2001
As of June 28, 2001, the Extraordinary Shareholder Meeting No.
1/2001 had a resolution to approve the Company to issue and
offer debentures to the public in the amount not exceeding Baht
36,000 million with the term that is not longer than 20 years to
prepay the Company’s existing foreign debt.
July 2001
The Company used its excess cash to partially prepay its
secured loan in the amount of approximately Baht 368 million.
September 2001
The Company entered into the currency swap transaction with
KfW, its major foreign creditor, in the amount of approximately
USD 97 million or around Baht 4,483 million.
December 2001
The Company borrowed New Baht Loan in the amount of 5,000
million Baht, and used the proceeds from the new loan to
partially prepay its US Dollar loan
March 2002
The Company and its subsidiaries repaid its loan in the amount
of approximately Baht 948 million.
55
July 2002
October 2002
December 2002
February 2003
October 2003
February 2004
June 2004
The Company used its excess cash to partially prepay its secured loan
in the amount of approximately Baht 345 million.
As of July 31, 2002, the Company entered into several financing
agreements with the former Secured Creditors, IFC as the lender of C
Loan and the guarantor of the debentures No. 2/2002, and the trustee of
the debentures No. 1/2002 to set up a mechanism for collateral sharing
between the new Secured Creditors and the former Secured Creditors.
As of October 15, 2002, the Company issued 2 tranches of Baht
debentures, i.e., the debentures No.1/2002 and the debentures
No.2/2002. The aggregate amount of proceeds received from both
tranches of the debentures was Baht 18,465 million. And the
Company borrowed Baht loan from IFC (C Loan) in the amount of
Baht 1,125 million as of October 17, 2002. The Company used the
proceeds from the debentures and IFC loan to prepay US Dollar
loan in the amount of USD 452 million. The holders of both tranches
of the debentures have participated in collateral sharing with the
former Secured Creditors after the issuance of the debentures.
The Company used its internal cash flow to repurchase the deferred
payment notes denominated in Yen currency in the amount of
approximately Yen 10.1 billion or around Baht 3.6 billion.
As of 18 February 2003, the Company issued Baht debentures No.
1/2546 which is the third tranche in the amount of Baht 3,319 million.
The company used the proceeds received from the debentures to
prepay remaining US Dollar loan in the amount of USD 78 million.
The company signed a loan agreement with a group of local commercial
banks and financial institutions in the amount of Baht 21,419 million to
refinance Baht loan in equal amount. The new Baht loan bear lower
interest rate resulting in reduction of the Company’s interest expense.
approximately Yen 331 million or around Baht 120 million.
As of 25 June 2004, the Company issued Baht debentures No. 1/2547
which is the fourth tranche in the amount of Baht 2,413 million. The
company used the proceeds received from the debentures to prepay all
remaining US Dollar loan that the Company already swapped in the
amount of USD 51 million.
56
October 2004
approximately Yen 190 million or around Baht 74 million.
When the Company prepaid the secured loan by its excess cash, the proceeds of
prepayment was applied to the repayment schedule by Inverse Chronological Order and
was pro-rated per the outstanding of each Secured Creditor.
After the implementation of all measures as described above to reduce the foreign
currency exchange fluctuation, the Company has decreased the portion of the foreign debt
from 68.3% at the end of 2000 to 13.3% as of December 31, 2004.
Chart : Loan Structure Movement
100,000
Unit: million Baht
86,044
80,000
76,520
78,710
6,591
75,051
8,205
73,634
73,379
77,187
4,729
6,664
11,581
16,091
16,239
60,000
11,376
3,153
5,624
37,657
32,253
25,242
35,134
40,000
74,651
56,379
20,000
32,271
38,252
62,453
32,152
23,826
Thai Baht
Debentures
0
1998
1999
2000
2001
2002
2003
2004
loan US$General
Loan Yen
Loan
On 28th June 2002, The Baht
Extraordinary
Shareholders
Meeting No. 1/2544 has
approved the issuance and offer to sell various types of debentures in order to repay
existing foreign debt. The principal amount of debentures will not exceed Baht 36,000
million and maturity is not exceeding 20 years. Therefore, the Company offered the Thai
Baht Debenture as follows:
57
1. Early Redeemable Secured Debenture with Periodic Payments No. 1/2545, Due 2008
1) Name of the debentures : Early Redeemable Secured Debenture with Periodic
Payments of TelecomAsia Corporation Public
Company Limited No. 1/2545, due 2008
2) Type of the debentures
: Early Redeemable Secured Debenture with Periodic
Payments in registered form, unsubordinated, with a
debentureholders’ representative
3) Amount and value of
the debentures
: 11,715,400 units, valuing in the amount of Baht
11,715,400,000 (eleven billion seven hundred fifteen
million and four hundred thousand Baht)
4) Par value per unit
: 1,000 Baht (one thousand Baht)
5) Offering price per unit
6) Issuing Date
: 15 October 2002
7) Maturity Date
: 7 July 2008
8) Status of the
debentures
: The debentures are indebtedness of the Company,
which rank equally among themselves and have no
less favorable status than other current and future
secured indebtedness of the Company throughout
the duration of the debentures
9) Principal Repayment
: The Company shall repay principal by installment on
every interest payment date commencing on 7
January 2003 onwards. The last principal repayment
date will occur on the date of redemption.
58
Table of Principal repayment
Installment Date
7th January 2003
7th April 2003
7th July 2003
7th October 2003
7th January 2004
7th April 2004
7th July 2004
7th October 2004
7th January 2005
7th April 2005
7th July 2005
7th October 2005
7th January 2006
7th April 2006
7th July 2006
7th October 2006
7th January 2007
7th April 2007
7th July 2007
7th October 2007
7th January 2008
7th April 2008
7th July 2008
10) Interest Rate and
Interest Payment
(unit : Baht)
Principal repayment per unit
5.00
8.00
8.00
10.00
10.00
16.00
16.00
19.00
19.00
19.00
45.00
45.00
55.00
55.00
60.00
60.00
70.00
70.00
70.00
70.00
90.00
90.00
90.00
: The Company shall pay interest of the debentures at
the rate of 6.1% p.a. during every three (3)-month
period on 7 January, 7 April, 7 July and 7 October of
each year commencing on 7 January 2003. The
amount of interest on the debentures during each
59
interest period shall be calculated on the unpaid
principal amount multiplied by the actual number of
days elapsed of the relevant debenture interest period,
multiplied by the interest rate as specified above and
divided by three hundred and sixty five (365) days.
11) Redemption of the
debentures
: The redemption of the debentures will be made by
paying the last installment of unpaid principal amount
including the last interest payment then due in whole to
the debentureholders per one (1) unit of the debentures.
12) Repurchase of the
debentures
: Subject to the Inter-Creditor Agreement, the Company is
entitled to purchase the Debentures No. 1/2545 in the
secondary market or anywhere and at any time. When
the Company has purchased the Debentures No. 1/2545,
indebtedness under the Debentures No. 1/2545 shall be
deemed extinguished. The Company must notify the
Registrar to immediately terminate the purchased
Debentures No. 1/2545
: Subject to the Inter-Creditor Agreement the Company is
entitled to call for an early redemption of the Debentures
No. 1/2545 under the following conditions: The Call
Option Date is on any Interest Payment Date after the
third anniversary of the Issuing Date; The redemption
prices (excluding unpaid interest) must be the Unpaid
Principal; The Company must pay the Debentureholders
a fee at the rate of one half of one percent. (0.50%) of
the Unpaid Principal on the Call Option Date; And in
relation to a partial early redemption of the Debentures
No. 1/2545 the Company shall redeem not less than
Twenty Five percent. (25%) of the unredeemed
Debentures No. 2/2545 at that time and the redemption
of the Debentures No. 1/2545 held by each
Debentureholder is pro-rated against the number of
Debentures No. 1/2545 held by each of them.
13) Early Redemption
60
14) Collateral
: Throughout the duration of the Debentures No. 1/2545,
the Company will provide and maintain security for
being collateral of the debenture, such as, Conditional
Assignment of Concession, Conditional Assignment of
Debenture Payment Account and etc. According to the
Security Documents and the Debenture Collateral
Documents, upon fully repayment of the debt of the
Original Secured Creditors, some security would cease
to be operative.
Except the Assignment of Insurances, in respect of
which the Company will cause security contemplated
therein to be perfected no later than Sixty (60) days
after the Issuing Date, within Seven (7) days of the
close of the offering period, unless the Company
provides and maintains security for payments, both
interest and principal, under the Terms & Conditions,
Lead Underwriter or Underwriter (as the case may be)
would return the subscription proceeds with accrued
interest (if any) to the subscribers who subscribed for
purchasing of the debenture through
such Lead Underwriter or Underwriter within Fourteen
(14) days after the Issuing Date.
15) Credit Rating
: The Company will cause the Debentures No. 1/2545
to be rated by TRIS Rating Co., Ltd. (or other credit
rating companies approved by the SEC) throughout
the duration of the Debentures No. 1/2545. The
Debentures No. 1/2545 are rated by TRIS Rating Co.,
Ltd. at “BBB” on January 14, 2004. The rating is
subject to change from time to time under credit
review performed by TRIS Co., Ltd.
2. Partially Guaranteed Early Redeemable Secured Debenture with Periodic Payments
No. 2/2545, Due 2011
1) Name of the debentures : Partially Guaranteed Early Redeemable Secured
Debenture with Periodic Payments of TelecomAsia
Corporation Public Company Limited No. 2/2545, due
2011
61
: Partially Guaranteed Early Redeemable Secured
Debenture with Periodic Payments in registered form,
unsubordinated, with a debentureholders’ representative
3) Amount and value of the : 6,750,000 units, valuing in the amount of Baht
debentures
6,750,000,000 (six billion seven hundred fifty million
Baht)
6) Issuing Date
: 15 October 2002
7) Maturity Date
: 3 February 2011
8) Status of the debentures : The debentures are indebtedness of the Company,
: The Company shall repay principal by installment
on every interest payment date commencing on 3
November 2009 onwards. The last principal
repayment date will occur on the date of
redemption.
62
Installment Date
3rd November 2009
3rd February 2010
3rd May 2010
3rd August 2010
3rd November 2010
3rd February 2011
Interest Payment
(unit : Baht)
160.00
160.00
160.00
160.00
180.00
180.00
: The Company shall pay interest of the debentures at the
rate of MLR p.a. during every three (3)-month period on
3 February, 3 May, 3 August and 3 November of each
year commencing on 3 February 2003. The amount of
interest on the debentures during each interest period
shall be calculated on the unpaid principal amount
multiplied by the actual number of days elapsed of the
relevant debenture interest period, multiplied by the
interest rate as specified above and divided by three
hundred and sixty five (365) days.
MLR or Minimum Lending Rate means in respect of any
debenture interest period, the average of the reference
rates quoted by Bangkok Bank Public Company Limited,
The Siam Commercial Bank Public Company Limited,
Krung Thai Bank Public Company Limited and Thai
Farmers Bank Public Company Limited as of the third
Thai Business Day before the beginning of the relevant
debenture interest period. If on such date there are less
than four (4) above captioned banks offering the
reference rated for any reason, the calculation of the
average interest rate will be based upon the remaining
reference rates, as determined in Terms and Conditions.
63
debentures
debentures
: Subject to the Inter-Creditor Agreement, the Company is
entitled to purchase the Debentures No. 2/2545 in the
secondary market or anywhere and at any time. When
the Company has purchased the Debentures No.
2/2545, indebtedness under the Debentures No. 2/2545
shall be deemed extinguished. The Company must notify
the Registrar to immediately terminate the purchased
Debentures No. 2/2545.
13) Early Redemption
: Subject to the Inter-Creditor Agreement the Company is
entitled to call for an early redemption of the Debentures
No. 2/2545 under the following conditions: The Call
Option Date is on any Interest Payment Date after the
third anniversary of the Issuing Date; The redemption
prices (excluding unpaid interest) must be the Unpaid
Principal; The Company must pay the Debentureholders
a fee at the rate of one half of one per cent. (0.50%) of
the Unpaid Principal on the Call Option Date; And in
relation to a partial early redemption of the Debentures
No. 2/2545 the Company shall redeem not less than
Twenty Five percent. (25%) of the unredeemed
Debentures No. 2/2545 at that time and the redemption
of the Debentures No. 2/2545 held by each
Debentureholder is pro-rated against the number of
Debentures No. 2/2545 held by each of them.
14) Collateral
the Company will provide and maintain security for being
collateral of the debenture, such as, Conditional
64
to be operative. In addition, the Debenture No. 2/2545
has been partially guaranteed by International Finance
Corporation (“IFC”), who is a guarantor for the payment
of principal and interest of the debentures, not exceeding
Fifty (50) percent of Debentures
Except the Assignment of Insurances, in respect of
which the Company will cause security contemplated
therein to be perfected no later than Sixty (60) days after
the Issuing Date, within Seven (7) days of the close of
the offering period, unless the Company provides and
maintains security for payments, both interest and
principal, under the Terms & Conditions, Lead
Underwriter or Underwriter (as the case may be) would
return the subscription proceeds with accrued interest (if
any) to the subscribers who subscribed for purchasing
of the debenture through such Lead Underwriter or
Underwriter within Fourteen (14) days after the Issuing
Date.
15) Credit Rating
Ltd. at “A” on January 14, 2004. The rating is subject
to change from time to time under credit review
performed by TRIS Co., Ltd.
65
3. Secured Debenture with Periodic Payments No. 1/2546, Due 2007
1) Name of the debentures : Secured Debenture with Periodic Payments of
TelecomAsia Corporation Public Company Limited
No. 1/2546, due 2007
: Secured Debenture with Periodic Payments with
the particulars of the holders, have a trustee.
3) Amount and value of the : 3,319,000 units, valuing in the amount of Baht
3,319,000,000 (three billion three hundred and
debentures
nineteen million Baht)
6) Issuing Date
: 18 February 2003
7) Maturity Date
: 7 October 2007
8) Status of the debentures : The debentures are indebtedness of the Company,
: The Company shall repay principal by installment
on every interest payment date commencing on 7
January 2005 onwards. The last principal
repayment date will occur on the date of
redemption.
66
Installment Date
January 2005
th
7 April 2005
7th July 2005
7th October 2005
7th January 2006
7th April 2006
7th July 2006
7th October 2006
7th January 2007
7th April 2007
7th July 2007
7th October 2007
7th
Interest Payment
(unit : Baht)
12.50
12.50
97.50
97.50
97.50
97.50
97.50
97.50
97.50
97.50
97.50
97.50
: The Company shall pay interest of the debentures
at the rate of fixed at 5.8% during every three
(3)-month period on 7 January, 7 April, 7 July
and 7 October of each year commencing on 7
April 2003. The amount of interest on the
debentures during each interest period shall be
calculated on the unpaid principal amount
multiplied by the actual number of days elapsed
of the relevant debenture interest period,
multiplied by the interest rate as specified above
and divided by three hundred and sixty five (365)
days.
67
debentures
including the last interest payment then due in whole
to the debentureholders per one (1) unit of the
debentures.
debentures
: Subject to the Inter-Creditor Agreement, the Company
is entitled to purchase the Debentures No. 1/2546 in
the secondary market or anywhere and at any time.
When the Company has purchased the Debentures
No. 1/2546, indebtedness under the Debentures No.
1/2546 shall be deemed extinguished. The Company
must notify the Registrar to immediately terminate the
purchased Debentures No. 1/2546.
13) Collateral
:
Throughout the duration of the Debentures No. 1/2546,
to be operative.
Within Seven (7) days of the close of the offering
period, unless the Company provides and maintains
security for payments, both interest and principal, under
the Terms & Conditions, Lead Underwriter or
Underwriter (as the case may be) would return the
subscription proceeds with accrued interest (if any) to
the subscribers who subscribed for purchasing of the
debenture through such Lead Underwriter or
Underwriter within Fourteen (14) days after the Issuing
Date.
68
14) Credit Rating
Ltd. at “BBB” on January 14, 2004. The rating is
subject to change from time to time under credit
review performed by TRIS Co., Ltd.
69
4. Secured Debenture with Periodic Payments No. 1/2547, Due 2011
1) Name of the debentures :
Secured Debenture with Periodic Payments of True
Corporation Public Company Limited No. 1/2547,
due 2011
:
Secured Debenture with Periodic Payments with
the particulars of the holders, have a trustee.
3) Amount and value of the
debentures
:
2,413,000 units, valuing in the amount of Baht
2,413,000,000 (two billion four hundred and
thirteen million Baht)
:
1,000 Baht (one thousand Baht)
:
1,000 Baht (one thousand Baht)
6) Issuing Date
:
25 June 2004
7) Maturity Date
:
7 July 2011
8) Status of the
debentures
:
The debentures are indebtedness of the Company,
:
The Company shall repay principal by installment on
every interest payment date commencing on
7 October 2008 onwards. The last principal
repayment date will occur on the date of redemption.
70
Installment Date
7th October 2008
7th January 2009
7th April 2009
7th July 2009
7th October 2009
7th January 2010
7th April 2010
7th July 2010
7th October 2010
7th January 2011
7th April 2011
7th July 2011
(unit : Baht)
83.33
83.33
83.33
83.33
83.33
83.33
83.33
83.33
83.33
83.33
83.33
83.37
Interest Payment
: The Company shall pay interest of the debentures at
the rate of fixed at 6.80% during every three (3)month period on 7 January, 7 April, 7 July and 7
October of each year commencing on 7 October
2004. The amount of interest on the debentures during
each interest period shall be calculated on the unpaid
principal amount multiplied by the actual number of
days elapsed of the relevant debenture interest period,
multiplied by the interest rate as specified above and
divided by three hundred and sixty five (365) days.
debentures
71
debentures
13) Collateral
14) Credit Rating
: Subject to the Inter-Creditor Agreement, the Company
is entitled to purchase the Debentures No. 1/2547 in
the secondary market or anywhere and at any time.
When the Company has purchased the Debentures
No. 1/2547, indebtedness under the Debentures No.
1/2547 shall be deemed extinguished. The Company
must notify the Registrar to immediately terminate the
purchased Debentures No. 1/2547.
to be operative.
Within Seven (7) days of the close of the offering period,
unless the Company provides and maintains security for
payments, both interest and principal, under the Terms &
Conditions, Lead Underwriter or Underwriter (as the case
may be) would return the subscription proceeds with
accrued interest (if any) to the subscribers who
subscribed for purchasing of the debenture through such
Lead Underwriter or Underwriter within Fourteen (14)
days after the Issuing Date.
: The Company will cause the Debentures No. 1/2547 to be
rated by TRIS Rating Co., Ltd. (or other credit rating
companies approved by the SEC) throughout the duration
of the Debentures No. 1/2547. The Debentures No. 1/2547
are rated by TRIS Rating Co., Ltd. at “BBB” on June 11,
2004. The rating is subject to change from time to time
under credit review performed by TRIS Co., Ltd.
Secondary Market of Debentures
Currently, Debentures of the Company can be traded and invested on Thai Bond Dealing Centre.
72
9. MANAGEMENT
9.1 Management Structure
Management Structure of the Company consists of the Board of Directors, the Committees and the
executive officers, details of which are as follows:
Board of Directors
As of 31st December 2004, the Board of Directors comprises of 20 directors who are (a) Executive
Directors (b) Non-Executive Directors including directors representing the creditors, and (c)
Independent Directors means a director who is independent from a major shareholder or a group of
major shareholders and having the qualification as follows: not being an employee or a staff member or an advisor who receives a regular salary or any
other benefit from the Company, an affiliated company, associated company or a related
company
not holding shares exceeding 0.5 per cent, including shares held by a related person, of paid-up
capital of the Company or an affiliated company, associated company or a related company
the ability to take care of the interest of all shareholders equally
the ability to prevent conflict of interest among the Company and its management,
major shareholders or other companies which have the same group of management
or major shareholders as the Company
The Board of Directors of the Company is as follows:
1.
Mr. Narong
Srisa-an
Independent Director
2.
Mr. Vitthya
Vejjajiva
Independent Director and
Chairman of the Audit Committee
3.
Dr. Kosol
Petchsuwan
Member of the Audit Committee
4.
Mr. Joti
Bhokavanij
5.
Mr. Dhanin
Chearavanont
Chairman
6.
Mr. Sumet
Jiaravanon
Vice Chairman
7.
Dr. Ajva
Taulananda
Vice Chairman
8.
Mr. Chaleo
Souvannakitti
Vice Chairman
9.
Mr. Athueck
Asvanund
Vice Chairman and Group General Counsel
10.
Mr. Supachai
Chearavanont
Director, President and Chief Executive Officer
11.
Mr. Soopakij
Chearavanont
Director
TRUETL: Management
73
12.
Mr. Chatchaval
Jiaravanon
13.
Mr. Vichaow
Rakphongphairoj
14.
15.
16.
17.
18.
19.
20.
Mr. Umroong
Mr. Heinrich
Mr. Klaus
Mr. Claus
Mr. Andreas
Mr. Harald
Dr. Lee G.
Sanphasitvong
Heims
Tuengeler
Stadler
Klocke
Link
Lam
Remark :
Director and Managing Director-Group
Investment
Director, Managing Director and
Chief Operating Officer
Director
Director
Director
Director
Director
Director
Director
Additional information related to the Company’s Board of Directors is as follows:
a) History of Offence
: none
b) Debt owed to the Company or its Subsidiaries
: none
c) Material Connected Transactions
: none
Mr. Narong Srisa-an Dr. Kosol Petchsuwan and Mr. Joti Bhokavanij has already taken “Directors
Accreditation Program” (DAP) from Thai Institute of Directors Association (IOD)
Mr. Vitthya Vejjajiva Dr. Kosol Petchsuwan and Mr. Joti Bhokavanij has already taken “Chairman 2000”
from Thai Institute of Directors Association (IOD)
Authority and responsibility of the Board of Directors
The Board of Directors is granted the authority and duty to manage the Company in compliance with
the objectives and articles of association of the Company and the resolutions of the shareholders
meetings. With regard to the management of the Company, the Board of Directors has authority to
make any decision related to the Company’s regular operation except for the matter required the
approval of the shareholders meeting as specified by law.
In addition, the Board of Directors may grant the authorization to one director or more or any other
person to perform any acts on its behalf, however, any decision on major operations such as major
investment and major procurement of loan, the management team shall propose the said transactions
to the Board of Directors for approval.
TRUETL: Management
74
Authorized Directors
Mr.Supachai Chearavanont or Mr. Vichaow Rakphongphairoj jointly sign with Mr. Athueck Asvanund or
Mr. Soopakij Chearavanont or Mr. Chatchaval Jiaravanon to with the Company’s seal affixed, execute any
act, thing or legal action whatsoever on the Company’s behalf.
Appointment of Directors
The Compensation and Nominating Committee assists the Board of Directors in reviewing and
proposing the compensation and nominating directors of the Company prior to proposing to the
Company’s shareholders meeting for final approval.
With regard to the right of shareholders to appoint directors, each shareholder shall appoint the
directors by a majority vote. All Shareholders have the rights to appoint directors. Each shareholder
shall have one right to vote per one share and shall appoint one director or more, provided that he cannot
divide his votes to any person to any extent.
In selecting an independent director, the Company will take into account of the prospect’s qualifications the
required by the Stock Exchange of Thailand together with the background and experiences appropriate for the
Company business prior to proposing the nomination of the prospect to Audit Committee, the Board of
Directors and the shareholders meeting, respectively, for further approval.
Audit Committee
As of 31st December 2004, the Audit Committee of the Company consists of 3 persons as follows:
1.
Mr. Vitthya
Vejjajiva
2.
Dr. Kosol
Petchsuwan
3.
Mr. Joti
Bhokavanij
The scope of duty and responsibility of the Audit Committee is as follows:
1. To review the Company’s financial reports to ensure accuracy and adequate information for public disclosure;
2. To ensure the appropriateness and effectiveness of internal control system and internal auditing
system of the Company;
3. To consider and propose the appointment and remuneration of an external auditor of the Company;
4. To regularly review the practice of the Company to ensure the compliance with the regulations of
the Securities and Exchange Act, Rules and Regulations of the Stock Exchange of Thailand and
related law and regulations;
TRUETL: Management
75
5. To review the disclosure of information of the Company to ensure the accuracy and adequacy of said
information in case that there is a connected transaction that may lead to a conflict of interest;
6. To prepare the Audit Committee Report on the Corporate Governance with the approval of the Chairman
of the Committee appeared therein to be disclosed in the annual report of the Company; and
7. To perform any other act as required by law or as delegated by the Board of Directors.
Independent Committee
The Independent Committee is responsible
connected transactions, which may involve a
consists of the following members:
1. Mr. Narong
Srisa-an
2. Mr. Joti
Bhokavanij
3. Mr. Klaus
Tuengeler
4.
5.
Mr. Supachai
Mr. Athueck
Chearavanont
Asvanund
for reviewing and monitoring the entering into any
conflict of interest with the Company. The Committee
KfW-nominated Director (with the alternate of Mr. Andreas
Klocke or Mr. Claus Stadler)
CP-nominated Director
CP-nominated Director
In the case of any major shareholder having a conflict of interest, Directors nominated by the said
shareholder will abstain from the Independent Committee Meeting.
Compensation and Nominating Committee
The Compensation and Nominating Committee is responsible for determining the compensation and
considering the nomination of the directors of the Company. The committee consists of the following
members:
1.
Mr. Dhanin
Chearavanont
2.
Mr. Heinrich
Heims
3.
Mr. Soopakij Chearavanont
4.
Mr. Umroong Sanphasitvong
Finance Committee
The Finance Committee assists the Company in reviewing and monitoring the financial management of
the Company. The committee consists of the following members:
1. Dr. Ajva
Taulananda
2. Mr. Chaleo
Souvannakitti
3. Mr. Heinrich
Heims
(alternates being Mr. Klaus Tuengeler or
Mr. Andreas Klocke)
4. Mr. Umroong
Sanphasitvong
TRUETL: Management
76
Corporate Governance Committee
Corporate Governance Committee is responsible for setting policy on Corporate Governance of the
Company. The Committee consists of the following members:
1. Dr. Ajva
Taulanada
2. Mr. Vitthya
Vejjajiva
3. Mr. Claus
Stadler
4. Mr. Athueck
Asvanund
5. Mr. Supachai
Chearavanont
6. Mr. William E.
Harris
Executive Officers
As of 31st December 2004, the executive officers of the Company are as follows:
1.
Mr. Supachai
Chearavanont
2.
Mr. Vichaow
Rakphongphairoj
3.
Mr. Chatchaval
Jiaravanon
4.
Mr. Athueck
Asvanund
5.
6.
Mr. William
Mr. Thiti
E. Harris
Nantapatsiri
7.
Mr. Adhiruth
Thothaveesansuk
8.
Mr. Songtham
Phianpattanawit
Director, President and
Chief Executive Officer
Director, Managing Director and
Director and Managing Director-Group
Investment
Vice Chairman, Group General
Counsel and Acting Company Secretary
Chief Financial Officer
Managing Director
Home / Consumer Solution & Highspeed Access
Managing Director
Office / SME Solution & Wireless Access
Managing Director
Corporate Solution, Wholesales & Data
Remark:
1. Executive Officers mean Directors, President or persons with managerial authority who are
among the top four ranking individuals in the Company, after the President, and all other
persons who occupy a position equivalent to such a top four ranking individual.
TRUETL: Management
77
2. Additional information related to the Company’s Executive Officers is as follows:
a) History of Offence
: none
b) Debt owed to the Company or its Subsidiaries
: none
c) Material Connected Transactions
: none
Authority and Responsibility of the President
The President has the authority to supervise and carry on the Company’s day-to-day business, and in
case any matter/ transaction is important, the President will submit said matter/ transaction to the
independent directors and/or the relevant Committee (such as the Finance Committee, the
Compensation and Nominating Committee or the Independent Committee) and/or the Board of
Directors, as the case may be, to approve said matter/ transaction. In addition, the President has no
authority to approve any matter/ transaction that he or the person who may have a conflict of interest
or any other form of conflict, which the Company or the Company’s subsidiaries have or propose to
enter into, with the Company or the Company’s subsidiaries. In such case, such matter/ transaction
shall have to be approved by the independent directors and/or the relevant Committee and/or the
Board of Directors, as the case may be.
9.2 Remuneration for the Company’s Directors and the Executive Officers
(1)
Remuneration of the Directors
The 20 committee members are remunerated Baht 37.20 million for the Year 2004.
Details of Remuneration of each Director are as follow :
Chairman
Baht 300,000 per month
Honorary Chairman
Vice Chairman
Director
In this connection, any director being the Company’s employee shall receive the director’s
remuneration in addition to his salary as employee.
Furthermore, Independent Directors who hold a position in the Committee, shall receive the additional
remuneration as follows:
Independent Director who is also
the Chairman of the Committee Baht 300,000 per month
Independent Director who is also
a director in the Committee Baht 200,000 per month
TRUETL: Management
78
Whereby the remuneration of the Independent Directors who are not the directors in the Committee
and directors who are not the Independent Directors shall remain the same.
(2) Remuneration of the Executive Officers
The 8 executives at the top level received remuneration totaling Baht 96.05 million for the Year 2004
from January to December, which included Baht 85.20 million for salary, Baht 6.94 million for bonus
and Baht 3.90 million for provident fund
(3) Other Compensation
(3.1) Employee Stock Option Plan 2004
(3.1)
Employee Stock Option Plan 2004
The Extraordinary General Shareholders Meeting No. 2/2547 of the Company for the year 2004 held on
10th June 2004 has approved the issuance and the offer of non-transferable warrants to purchase the
Company’s ordinary shares to certain Directors and employees at executive level totaling not
exceeding 35 persons. Summary details are as follows:
Number of Warrants
: 18,274,444 units
Date of Issuance
:
7th February 2005
Maturity
:
5 years from the issuance date
Date of Expiry
:
6th February 2010
Exercise Period
:
Each Warrant Holder received 3 separate warrant certificates. Each
certificate represented 1/3 of the whole amount of warrants allotted and
shall be exercisable for subscribing ordinary shares as follow:
TRUETL: Management
79
The 1st Certificate: Warrant Holders shall be starting exercising from
7 February 2006 until its expiration.
The 2nd Certificate: Warrant Holders shall be starting exercising from
The 3rd Certificate: Warrant Holders shall be starting exercising from
Exercise Ratio
(3.2)
:
One unit of warrants entitles to purchase one ordinary share at Baht 11.20
The Annual General Shareholders Meeting of the Company for the year 2003 held on April 11, 2003 has approved
the issuance and the offer of non-transferable warrants to purchase the Company’s ordinary shares to certain
Directors and employees at executive level totaling not exceeding 35 persons. Summary details are as follows:
Number of Warrants
: 18,097,664 units
(as of 28th February 2005)
Maturity
:
Date of Issuance
:
17th June 2003
Date of Expiry
:
16th June 2008
Exercise Period
:
certificate represented 1/3 of the whole amount of warrants allotted and
shall be exercisable for subscribing ordinary shares as follow:
The 1st Certificate: Warrant Holders shall be starting exercising
from 17th June 2004 until its expiration.
The 2nd Certificate: Warrant Holders shall be starting exercising
The 3rd Certificate: Warrant Holders shall be starting exercising
Exercise Ratio
TRUETL: Management
:
80
the issuance and the offer of non-transferable warrants to purchase the Company’s ordinary shares to certain
Directors and employees at executive level totaling not exceeding 35 persons. Summary details are as follows:
Number of Warrants
: 37,131,597 units
Date of Issuance
:
14th June 2002
Maturity:
:
Date of Expiry
:
13th June 2007
Exercise Period:
:
The 1st Certificate: Warrant Holders shall be starting exercising
The 2nd Certificate: Warrant Holders shall be starting exercising
The 3rd Certificate: Warrant Holders shall be starting exercising
Exercise Ratio:
TRUETL: Management
:
81
(3.4)
the issuance and offer of non-transferable warrants to purchase the Company’s ordinary shares to certain Directors
and employees at executive level totaling not exceeding 35 persons. Summary details are as follows:
Number of Warrants
: 36,995,000 units
Date of Issuance
:
9th June 2000
Maturity
:
Date of Expiry
:
9th June 2010
Exercise Period
:
(a) Warrant Type 1:
certificate represented 1/3 of the whole amount of warrants allotted and is
exercisable for subscribing ordinary shares starting from June 30, 2000,
2001 and 2002 respectively.
(b) Warrant Type 2:
certificate represented 1/3 of the whole amount of warrants allotted and is
exercisable for subscribing ordinary shares starting from December 31,
2000, 2001 and 2002 respectively.
Exercise Ratio
TRUETL: Management
:
82
Details of Warrant-holding under ESOP Plan
Name
Warrants under
ESOP 2004
No. of
% of
warrants project
Warrants under
ESOP 2003
No. of
% of
warrants project
Warrants under
ESOP 2002
No. of
% of
warrants project
Warrants under
ESOP 2000
No. of
% of
warrants project
1. Dr.Ajva
Taulananda
-
-
-
-
-
-
2,240,000
6.06
2. Mr.Soopakij
Chearavanont
-
-
-
-
-
-
4,130,000
11.16
3. Mr.Supachai
Chearavanont
2,434,077
12.74
3,696,402
18.61
7,058,824
19.01
6,510,000
17.60
4. Mr. Vichaow
Rakphongphairoj
1,277,890
6.69
1,617,176
8.14
3,088,235
8.32
2,800,000
7.57
5. Mr.Chatchaval
Jiaravanon
1,277,890
6.69
1,940,611
9.77
3,705,882
9.98
4,130,000
11.16
6. Mr.Athueck
Asvanund
1,331,136
6.97
2,021,470
10.18
3,860,294
10.40
5,320,000
14.38
7. Mr.William
E. Harris
1,277,890
6.69
1,297,838
6.53
3,000,000
8.08
945,000
2.55
8. Mr.Adhiruth
Thothaveesansuk
1,277,890
6.69
850,404
4.28
1,503,662
4.05
-
-
9. Mr.Thiti
Nantapatsiri
1,277,890
6.69
-
-
-
-
-
-
10. Mr.Songtham
Phianpattanawit
1,277,890
6.69
-
-
-
-
-
-
9.3 Corporate Governance Compliance Report 2003
The heart of True is personified by the 4 Cs: being Credible, being Creative, being Caring and being Courageous.
These 4 core values are expressed in the principles by which True governs itself. The results have been positive.
2004 marked the third consecutive year that True has ranked amongst the very top companies in The Corporate
Governance Report of Thai Listed Companies. The Corporate Governance Report is published annually by the
Thai Institute of Directors Association (Thai IOD) under the auspices of the Stock Exchange of Thailand (SET) and
the Securities and Exchange Commission (SEC). In making its determinations, Thai IOD looks at five core criteria: 1)
rights of shareholders, 2) equitable treatment of shareholders, 3) role of stakeholders, 4) disclosure and transparency,
and 5) board responsibilities.
TRUETL: Management
83
1.
Rights of Shareholders
True strives to ensure that every shareholder is given an opportunity to hear, to be heard and to make a difference.
Caring
“We treat people the way we want to be treated.”
Over the course of 2004 shareholders were invited to participate in four meetings conveniently held at
True’s Bangkok headquarters. One was a general meeting, and three were extraordinary meetings. At
least 7 days before each meeting, detailed information on every agenda topic was disseminated by
post. Additionally, in order to ensure dissemination of information to the general public, the agenda
was shared by publication in local newspapers and on True’s web site. At the beginning of each
meeting, the procedures of the meeting was explained to all shareholders in attendance, and every
shareholder was given the opportunity to express an opinion on any matter discussed. Director, the
chairman or a representative of each Board committee and members of management attend each
meeting so that effective responses can be provided for all shareholder comments and questions.
By having allocated not less than four Board seats to Independent Directors (the definition and course
training from Thai Institute of Directors Association (Thai IOD) are provided in Management content), the
opinions of minority shareholders can be heard at the highest levels of the company. Independent
Directors are free of any interest concerning personal benefit or position and free from the control of any
particular special interest. Each is obligated to express his or her independent opinion to the Board.
Moreover, every Director must stand for election every 3 years and his performance is, thereby,
subjected regularly to the voting scrutiny of the shareholders. On all shareholder voting matters, each
shareholder is entitled to exercise votes equal in number to the amount of shares held by him or her.
Prior to each shareholder meeting, a proxy form is provided for those True shareholders who may wish
to designate a proxy to vote on their behalf during the meeting.
2.
Equitable Treatment of Shareholders
As a publicly listed company, True’s shareholder base is large and diverse. True recognizes the importance of keeping
every shareholder timely, accurately and appropriately informed. Important information is posted promptly on the
investor relations pages of True’s web site, accessible via www.truecorp.co.th and www.true-corp.com, so that it reaches
all shareholders, whether they are a significant or a minority shareholder and wherever located, at the same time.
Credible
“We communicate with integrity, always keeping the best interest of the company in mind.”
TRUETL: Management
84
True’s corporate web site gives the public a wealth of information about the company, its people and its
performance. Copies of minutes of meetings, investor presentations, past annual reports and filings with the
Stock Exchange of Thailand are just a part of the resources available 24/7/365 in both English and in Thai.
Financial information dating back to 1999 is available for downloading or by contacting True’s Investor
Relations department.
The Investor Relations department and the Corporate Secretary of True each bear important responsibilities to
True’s shareholders. Together, they are True’s contact points with its shareholders. Corporate information to the
general public and shareholders flows through the Investor Relations department, whereas information to the
general public and our regulators is channeled through the Corporate Secretary.
Maintaining True’s credibility is essential for gaining the investor confidence that is necessary to maximize and
sustain the value of the company and the wealth of True’s shareholders. Analysts from Thailand’s major
securities firms track True and, therefore, the Investor Relations department works cooperatively with these
analysts. These analysts’ reports lead to an open discussion of True’s operations and financial prospects, and
are accessible by the general public and by True’s shareholders.
In 2004, True increased its equity interest in its subsidiary, TA Orange. As assurance that the terms of the
transaction were “fair” to True’s shareholders, “fairness opinions” were given by BT Securities Company
Limited. The transaction was completed while providing utmost transparency for the benefit of all shareholders.
3.
The Role of Stakeholders
The continued success of True relies upon the ability of stakeholders to influence positively True’s
conduct and activities, and vice-versa.
Caring
“We are dedicated to working together in harmony to do what's right for our
customers, colleagues and partners.”
True’s Code of Conduct defines the term “stakeholders” to include customers, shareholders, creditors,
employees and their families, the government, business partners, business competitors and the citizens of
Thailand. The Code of Conduct is a roadmap that provides clear direction to Directors, management and
employees alike, of True and of True affiliates, towards melding the 4 Cs into the corporate culture.
The Code of Conduct encourages all to make a positive contribution to Thai society and to the well-being
of Thai people. The year 2004 continued True’s position as a corporate and community leader in enriching
and providing assistance for the well being of Thai society.
TRUETL: Management
85
• True and the True affiliates provided immediate assistance to the victims of the December 26th
tsunami, and relief for their families and friends. TA Orange provided free of charge calls to those in
the tsunami-affected areas, allowing them to contact loved ones. Within a day or so, food, clothing
and materials donated by employees had reached the victims.
• Now in service to the nation for more than 10 years, True’s Nature Classroom, Arts and Culture
Classroom and Science Classroom are programs that aim to foster self-improvement and are
designed to help students gain knowledge and insight from the classrooms, adding valuable and
enriching experiences to their lives.
• Pirab Noi invites students studying mass communications in Thailand’s universities to participate in
the production of high quality content, while also promoting responsibility and ethics in the area of
communications/journalism.
• True works closely with the Bangkok Metropolitan Administration (BMA), Education Department to
guide Thailand towards becoming a “knowledge-based society”. Through collaborative efforts, the
“Internet for a Knowledge-Based Society” program has connected more than 300 schools in
Bangkok to resources they never had access to before. True believes if young people have access to
the latest information from around the world via the Internet, then they will be empowered to explore
new boundaries and improve their lives. This, in turn, will enable them to make even more valued
contributions for the benefit of the country.
True understands that it has a responsibility to safeguard the interests of its stakeholders. As it has for many
years, True has kept an open and cooperative working dialogue with Marsh UK Ltd., which is the insurance
advisor to True’s secured creditors. In addition, last year True and its insurance broker procured a competitive,
comprehensive, secure a cost-effective insurance package for True and its affiliated companies. There is also a
strong national interest in True’s ability to continue business operations even in the event of a significant
accident or disaster. True continues to make investments and to allocate resources to ensure that its key
services have adequate backups and will continue to operate under virtually any circumstances.
Internal safeguards are implemented under the management of True’s Audit Department. The
effectiveness of the Audit Department oversight and internal controls is enhanced through utilization of
the expertise of PricewaterhouseCoopers Risk Management Services Limited.
4.
Disclosure and Transparency
Through its own initiative, over four years ago the Board established a committee to enhance the governance
of the company by adopting international best practices. Three years ago the Corporate Governance
Guidelines were placed into practice. A complete copy of the Corporate Governance Guidelines is available
on True’s web site. The Guidelines encompass :
TRUETL: Management
86
•
•
•
•
•
•
•
•
•
Duties and responsibilities of the Board of Directors
Composition and selection of the Board of Directors
Board structure and procedure
Board Leadership
Board relationship to management
Meeting procedures
Committees of the Board of Directors
General Committee Matters
Policy regard related party transactions and code of conduct
Courageous
“We recognize that with opportunity comes accountability and with accountability, ownership.”
Adoption of the Corporate Governance Guidelines led to the formation of a new Board committee, the
Independent Committee. The work of the Independent Committee includes oversight responsibility over
any Board matter involving a related party transaction or a corporate opportunity, as well as all matters
that are covered by the Stock Exchange of Thailand’s Rules and Procedures and Disclosure of
Connected Transactions of Listed Companies. Details of Connected Transactions that occurred during
2004 are provided at page [number] of this Annual Report for 2004.
True has its own complementary standards for transactions with related entities, which are stated in
the Policy Regarding Related Party Transactions. Situations such as trading on insider information and
having a personal relationship in matters involving True are explained and explored in detail in the
Code of Conduct that every employee is asked to read and acknowledge.
5.
Board Responsibilities
True stakeholders are served by 20 hard-working persons, each of whom is able to work with colleagues as
one and yet who can complement the value of the Board with his own particular strengths.
Creative
“We share our ideas with each other to create strong synergies.”
The schedule of the Board meetings for the coming year is set by consensus at the final Board
meeting of the prior year and written notice of each meeting is provided to each Director in
accordance with all applicable rules and regulations.
TRUETL: Management
87
In 2004, 8 Board meetings were held. Director attendance at those meetings was as follows:
Directors
Attendance / Number of Meetings (times)
1. Mr. Narong
Srisa-an
7/8
2. Mr. Vitthya
Vejjajiva
7/8
3. Dr. Kosol
Petchsuwan
8/8
4. Mr. Joti
Bhokavanij
8/8
5. Mr. Dhanin
Chearavanont
5/8
6. Mr. Sumet
Jiaravanon
0/8*
7. Dr. Ajva
Taulananda
8/8
8. Mr. Chaleo
Souvannakitti
8/8
9. Mr. Athueck
Asvanund
8/8
10. Mr. Supachai
Chearavanont
7/8
11. Mr. Soopakij
Chearavanont
3/8
12. Mr. Chatchaval
Jiaravanon
6/8
13. Mr. Vichaow
Rakphongphairoj
8/8
14. Mr. Umroong
Sanphasitvong
8/8
15. Mr. Heinrich
Heims
3/8
16. Mr. Klaus
Tuengeler
6/8
17. Mr. Claus
Stadler
3/8
18. Mr. Andreas
Klocke
5/8
19. Mr. Harald
Link
4/8
Lam
5/8
20. Dr. Lee
G.
* On overseas business, nevertheless, he always considers the information and provides valuable opinions to
the Board of Directors
TRUETL: Management
88
Individual strengths are utilized, and efficiency is achieved, by the delegation of 5 key Board
responsibilities to these standing committees:
• Audit Committee
• Finance Committee
• Corporate Governance Committee
• Compensation and Nominating Committee
• Independent Committee
Further detail on each Board committee and their committee members, including copies of their
respective committee charters, can be obtained from the investor relations pages of True’s web site.
The current number and allocation of seats on the Board reflect a fair proportion of each shareholder
group’s investment. Non-executive directors remain a majority of True’s Board, keeping the balance of
power with non-executives and ensuring decision-making independence and credible oversight of
management. The seat of Chairman of the Board remains with a non-executive director.
In order to maximize the value to True of the knowledge and experience of each Director, True does
not limit the number of times that a Director may be re-elected or impose a mandatory retirement age.
Compensation of top executives and the Board is recommended by the Compensation and Nominating
Committee and approved by the entire Board. Remuneration consists of a fixed salary and, when
deemed appropriate, a variable component. The variable component is linked to individual and
corporate performance. True’s shareholders have approved the remuneration presently paid to Board
members. Key members of executive Management have also been provided, with approval of the
Company’s shareholders, Stock Options (which utilized the services of an independent advisor in
performing this function, particularly within Thailand’s telecommunication industry) as a key component
of their compensation in order to link their compensation to corporate performance and to establish a
long term performance incentive. Details of such remuneration are provided within the Management
content of this annual report.
True has disclosed publicly in filings made with the Stock Exchange of Thailand significant actions
taken by its Board over the course of 2004.
TRUETL: Management
89
9.4 Insider Trading Policy
The Company is currently in compliance with applicable laws to monitor and prevent the personal use
of confidential information of the Company by its management, including the use of said information
for the purpose of insider trading. Material information which has not yet been disclosed will be kept
confidential but will be disclosed only to the relevant senior management of the Company. The relevant
senior management of the Company who shall access or receive said information are required to
report their trading of shares in the Company pursuant to the Regulations of the Office of Securities
and Exchange Commission Regarding Rules, Conditions, and Procedures Governing the Preparation
and Disclosure of Reports on Securities Holdings, in order to prevent insider trading using internal
information, and to ensure that the trading of shares by “insiders” of the Company is transparent.
In addition, the Company has been carrying on the comparative study of the insider trading policies of
various foreign institutions to be applied as a guideline to enhance transparency and boost the
confidence in the Company amongst the analyst and investor community.
9.5 Personnel
As of 31st December 2004, the total number of employees is as follows:
Work Group and Classification
Management
Service Area & Network Operation
Marketing & Sales
Information Technology
Customer Services
Finance & Accounting
Supporting
Total
Source : the Company
No. of Employees
82
2,273
425
242
799
230
286
4,337
Remuneration for the Company’s Employees
Remuneration
In 2004, the total remuneration for employees was approximately Baht 2,026.89 million which consists
of wages, salaries, bonus, overtime compensation, commission, provident fund and others. (please see
details in the note 27 to the financial statements)
TRUETL: Management
90
Other Compensation & Benefits
-
Health Plans and Employee Welfare
Â In-house clinic
Â Annual Medical Check-up
Â New Employees’ Medical Check-up
Â Group Health Insurance
Â Group Accident Insurance
Â Group life Insurance
- In case of death: Baht 30,000. - / Person
Â Social Security Fund
- Each of the Company and employees contributes 5% of monthly salary (If any
employee’s salary is more than Baht 15,000 a month, it was calculated only Baht
15,000 as the basic of funding). Said employee will gain special benefits from the Fund
to have medical treatment at designated hospitals.
-
Paid Annual Leave
Â After 1 year of service, employees are eligible for annual leave as below:
- Assistant Director Level and upwards are eligible for 15 days per annum and the
others are eligible for 10 days per annum
Â Employees have to take accountability to complete their annual leave by December
otherwise, annual leave can not be accumulated to the subsequent year.
Â Annual leave can be accumulated to the subsequent year only in case of urgent of work.
The accumulation should be approved by authorized superior, but the total days should
not be more than 30 for level of Assistant Director and upwards and 20 for the others.
- Compensation
Â Monthly Salary
Â Annual Performance Pay: between 0-4 times of monthly salary, subject to the Company’s
performance and financial status.
Â Retirement: the employee must be at the age of 60 years or early retirement by
agreement of company and employee, severance pay will be paid accord to the labor law.
TRUETL: Management
91
Employee Training and Development
Employee Training and Development Policy
To encourage all employees to develop their knowledge, skills and attitude to be able to perform their
jobs effectively and to be more competent for career advancement, which assists the Company in
achieving its corporate strategy and goals. At present, the Company provides employees with various
training and development programs, such as Core Competency Program, Functional Competency
Program, True Core Business Program, etc.
TRUETL: Management
92
10. INTERNAL CONTROLS
After an assessment of the Company’s internal controls with all the Audit Committee, the
Board of Directors Meeting no. 1/2548 held on 25th February 2005, which all 3 members
of the Audit Committee directors attended the meeting, has an opinion that the
Company’s internal controls are adequate and suitable. Moreover, the external auditor has
an opinion that it did not encounter any matter involving internal controls and its
operation which are considered to be material weaknesses that could have a material
effect on the financial statements. The Board also emphasized the development of the
Company’s Corporate Governance in order to help improve the internal controls within the
Company on a continuing basis.
TRUETM: Internal Controls
93
11. CONNECTED TRANSACTIONS
During 2004, the Group carried out the transactions with subsidiaries, associates, joint
ventures and related companies as disclosed in the financial statements for the year
ended 31 December 2004 Note 9.
The related transactions of the Company and subsidiaries were carried out with associate
and related companies are as follows:
Details of transactions
1. Sales of goods
1.1 True Multimedia Co., Ltd. (TM)
Sales of Cable modem to
Asia Infonet Co., Ltd. (AI)
Sales of network equipment to UBC
Cable Network Public Company
Limited
(UBC CABLE)
31
December
2004
(Baht'000)
Rationale and
necessity
749
The Company indirectly holds 90.45% in TM’s
equity interest and 65.00% in AI’s equity interest.
These companies are related through
directorships, i.e. Mr. Soopakij Chearavanont,
Mr. Supachai Chearavanont, and
Mr. Chatchaval Jiaravanon.
The transactions
arose in ordinary
course of business
that TM proposed to
the third party.
12
UBC directly holds 99.02% in UBC CABLE’s
equity interest. The Company indirectly holds
39.24% in UBC’s equity interest and 90.45%
in TM's equity interest. These companies are
related through directorships, i.e.
Mr. Soopakij Chearavanont,
Mr. Supachai Chearavanont,
Mr. Chatchaval Jiaravanon,
Mr. Athueck Asvanund and
Mr. Vichaow Rakphongphairoj.
The transactions
arose in ordinary
course of business
that TM proposed to
the third party.
CPG is a major hareholder of the
Company. The Company indirectly holds
99.99% in AWC’s equity interest. These
companies are related through
directorships.
The transactions
arose in ordinary
course of business
that AWC proposed
to the third party.
1.3 Asia Wireless Communication Co., Ltd. (AWC)
Sales of goods and PCT accessories to
796
Charoen Pokphand Group of
companies (CPG)
TRUETN: Connected Transactions
Relationship
94
31 December
2004
(Baht'000)
Sales of goods and PCT accessories
223
to
Bangkok Inter Teletech Group of
companies (BITCO)
Rationale and
necessity
The transactions
arose in ordinary
course of business
that AWC proposed
to the third party.
The Company indirectly holds 99.99% in
AWC’s equity interest and 70.00% in
TIDC’s equity interest. These companies
are related through directorships, i.e.
Mr. Supachai Chearavanont and
The transactions
arose in ordinary
course of business
that AWC proposed
to the third party.
AWC’s equity interest and 65.00% in AI’s
equity interest. These companies are
Mr. Soopakij Chearavanont ,
Mr. Supachai Chearavanont, and
The transactions
arose in ordinary
course of business
that AWC proposed
to the third party.
555
CPG is a major shareholder of the
Company. The Company directly holds
87.50% in WW’s equity interest. These
directorships.
The transactions
arose in ordinary
course of business
that WW proposed
to the third party.
80
The Company directly holds 87.50% in
WW’s equity interest and indirectly holds
65.00% in AI’s equity interest. These
directorships, i.e.
Mr. Chatchaval Jiaravanon and
Mr. William Edward Harris.
The transactions
arose in ordinary
course of business
that WW proposed
to the third party.
3
to
1.8 Wire & Wireless Co., Ltd. (WW)
to
Relationship
BITCO is an investor in cellular telephone
operator which the Company directly holds
43.86% and indirectly holds 39.00% of equity
interest and indirectly holds 99.99% in AWC’s
equity interest. These companies are related
through directorships, i.e.
Mr. Athueck Asvanund.
1
to
True Internet Data Center Co., Ltd.
(TIDC)
Sales of communication equipment to
companies (CPG)
95
31 December
2004
(Baht'000)
Relationship
1,437
CPG is a major shareholder of the Company.
The transactions arose
in ordinary course of
business that the
Company proposed to
the third party.
81
UBC directly holds 99.99% in CN’s equity
interest. The Company indirectly holds
39.24% in UBC’s equity interest and
business that the
Company proposed to
the third party.
3,416
interest and related through directorships, i.e.
Mr.Dhanin Chearavanont, Mr. Joti Bhokavanij,
Mr. Soopakij Chearavanont, Mr. Athueck
Asvanund and Mr. Heinrich Heims.
business that the
Company proposed to
the third party.
The Company indirectly holds 65.00% in AI’s
equity interest and related through
directorships, i.e. Mr. Supakij Chearavanont,
Mr. Ajva Taulananda.
1.13 Bangkok Inter Teletech Group of companies (BITCO)
Sales of mobile handset to
10,934
companies (CPG)
interest. These companies are related through
directorships.
Total Sales of goods
18,313
business that the
Company proposed to
the third party.
1.9 Company
Sales of router to
companies (CPG)
1.10 Company
Sale of good to
Cineplex Co., Ltd. (CN)
1.11 Company
Sales of good to
Bangkok Inter Teletech Group
of companies (BITCO)
1.12 Company
Sales of good to
26
Rationale and
necessity
business that BITCO
proposed to the third
party.
96
2. Sales of services
2.1 Asia Infonet Co., Ltd. (AI)
Sales of internet services to
companies (CPG)
Sales of internet services to
Services of network maintenance to
Satellite Services Co., Ltd. (SS)
Cable TV network services to
UBC Cable Network Public
Company Limited
(UBC CABLE)
31 December
2004
(Baht'000)
Relationship
Rationale and
necessity
28,817
CPG is an investor in major shareholder of
the Company. The Company indirectly holds
companies are related through directorships.
business that AI
party.
1
BITCO is a cellular telephone operator which
the Company directly holds 43.86% and
indirectly holds 39.00% of equity interest and
indirectly holds 65.00% in AI’s equity interest.
directorships, i.e. Mr. Soopakij Chearavanont
and Mr. Supachai Chearavanont
business that AI
party.
3,326
UBC directly holds 97.17% in SS’s equity
interest. The Company indirectly holds 39.24%
in UBC’s equity interest and 90.45% in TM’s
business that TM
party.
Same as 1.2
TM is the owner of
multimedia network.
UBC CABLE and TM
have entered into the
agreement to rent the
network and providing
dropwire installation
services. The
transactions arose in
ordinary course of
business that AM
party.
834,677
97
Commission charges to
United Broadcasting
Corporation Public Company
Limited (UBC)
Digital Data Network services to
companies (BITCO)
companies (CPG)
31 December
2004
(Baht'000)
840
Relationship
Rationale and
necessity
UBC is a pay television operator which the
Company indirectly holds 39.24% of equity
interest and 90.45% in AM’s equity interest.
Mr. Vichaow Rakphongphairoj,.
TM is the
representative to
acquire subscriber for
UBC. TM obtain the
reward at the ordinary
course of business
that UBC gives to the
third party.
120,110
Same as 1.1
business that TM
party.
96,061
interest and indirectly holds 90.45% in TM’s
Mr. Athueck Asvanund.
business that TM
party.
30,111
TM’s equity interest. These companies are
related through directorships.
business that TM
party.
Same as 1.6
business that AWC
party.
Other service to
106
98
2.10 True Internet Co., Ltd. (TI)
Sales of internet service to
companies (CPG)
Sales of internet and audiotext
services to
United Broadcasting
Corporation Public Company
Limited (UBC)
services to
services to
2.14 True Properties Co., Ltd. (TP)
Office rental and related
services to
companies (CPG)
31 December
2004
(Baht'000)
Relationship
Rationale and
necessity
9,077
The Company directly holds 99.99% in TI’s
through directorships.
business at market
price.
1,461
UBC is a pay television operator which the
Company indirectly holds 39.24% of equity
interest. The Company directly holds 99.99%
in TI’s equity interest. These companies are
Mr. Soopakij Chearavanont, Mr. Supachai
Chearavanont and Mr. Chatchaval Jiaravanon.
business that TI
party.
1,330
The Company directly holds 99.99% in TI’s
equity interest and indirectly holds 65.00% in
AI’s equity interest. These companies are
related through directorships, i.e. Mr. Soopakij
Chearavanont, Mr. Supachai Chearavanont,
business that TI
party.
3,232
interest and 99.99% in TI’s equity interest. These
companies are related through directorships, i.e.
Mr. Supachai Chearavanont and Mr. Soopakij
Chearavanont.
business that TI
party.
9,042
The Company indirectly holds 99.99% in TP’s
business. The maturity
are normally in 3 years
and are allowed to be
renewed.
99
Office rental and related services to
Company Limited
(UBC
CABLE)
companies. (BITCO)
(TIDC)
NC True Co., Ltd. (NC True)
31 December
2004
(Baht'000)
Relationship
Rationale and
necessity
460
39.24% in UBC’s equity interest and 99.99%
in TP’s equity interest. These companies are
Mr. Soopakij Chearavanont and
are normally in 3 years
renewed.
518
equity interest and 65.00% in AI’s equity interest.
are normally in one
year and are allowed
to be renewed.
563
interest. The Company indirectly holds 99.99%
in TP’s equity interest. These companies are
Mr. Kachorn Chiaravanont.
are normally in one
to be renewed.
1,423
equity interest and 70.00% in TIDC’s equity
directorship, i.e. Mr. Chatchaval Jiaravanon.
are normally in one
to be renewed.
116
The Company directly holds 40.00% in NC
True’s equity interest and indirectly holds
99.99% in TP’s equity interest. These
companies are related through directorship, i.e.
business and at
market prices.
100
31 December
Relationship
2004
(Baht'000)
2.20 True Digital Entertainment Co., Ltd. (TDE)
Game online services to
25
TDE’s equity interest and 65.00% in AI’s
through directorship, i.e.
2.21 T Pay Co., Ltd. (T Pay)
Payment service center to
18
in T Pay's equity interest. These companies
are related through directorships, i.e.
Mr. Supachai Chearavanont
2.22 T Pay Co., Ltd. (T Pay)
Payment service center to
264
The Company directly holds 49.00% in
T Pay’s equity interest and indirectly holds
Mr. Supachai Chearavanont.
2.23 True Internet Data Center Co., Ltd. (TIDC)
Rental of internet server to
288
TIDC’s equity interest and 65.00% in AI’s
through directorship, i.e. Mr. Supachai
Chearavanont and
Rental of internet server to
562
The Company directly holds 40.00% in NC
NC True Co., Ltd. (NC True)
True’s equity interest and indirectly holds
70.00% in TIDC’s equity interest. These
2.25 True Fleet Management Co., Ltd. (TFM)
Car rental and related services to
502,491
The Company directly holds 99.99% in TFM’s
companies (CPG)
Rationale and
necessity
business and at
market prices.
business and at
market prices.
business and at
market prices.
business and at
market prices.
business and at
market prices.
business and at
market prices. The
maturity are normally in
3 years basis.
101
31 December
2004
Relationship
(Baht'000)
Car and office equipment rental
101
The Company indirectly holds 65.00% in AI’s
services to
equity interest and directly holds 99.99% in
TFM’s equity interest. These companies are
Chearavanont, Mr. Chatchaval Jiaravanon and
2.27 True Fleet Management
Co., Ltd. (TFM)
12,603
Company Limited (UBC CABLE)
39.24% in UBC’s equity interest and directly
holds 99.99% in TFM’s equity interest. These
companies are related through directorships,
i.e. Mr. Soopakij Chearavanont and
4
companies (BITCO)
in TFM's equity interest. These companies are
Chearavanont and Mr. Kachorn Chiaravanont.
Installation of telephone systems to
51
Same as 1.7
companies (CPG)
Installation of telephone systems to
184
Same as 1.8
Rationale and
necessity
business and at
market prices. The
maturity are normally
in 3 years basis.
business and at
market prices. The
in 3 years basis.
business and at
market prices. The
in 3 years basis.
business that WW
party.
business.
102
Network installation to
Network installation to
(TIDC)
31 December
2004
(Baht'000)
Relationship
80,343
interest and directly holds 87.50% in WW’s
through directorships, i.e. Mr. Soopakij
Chearavanont, Mr. Supachai Chearavanont
and Mr. Athueck Asvanund.
business that WW
party.
4,806
TIDC’s equity interest and directly holds
87.50% in WW’s equity interest. These
i.e. Mr. Supachai Chearavanont,
Mr. William Edward Harris.
business that WW
party.
Sales of scratch card to
1,298,118
Same as 1.13
companies (CPG)
Sales of scratch card to
103
interest and indirectly holds 65.00% in AI’s equity
directorships, i.e. Mr. Soopakij Chearavanont, and
2.35 Company
826
Consulting service – SAP to
equity interest. The Company indirectly
holds 39.24% in UBC’s equity interest and
Company Limited (UBC
related through directorships, i.e. Mr. Supachai
CABLE)
Chearavanont, Mr. Soopakij Chearavanont,
Mr. Chatchaval Jiaravanon, Mr. Vichaow
Rakphongphairoj and Mr. Athueck Asvanund.
Rationale and
necessity
business that BITCO
party.
business that BITCO
party.
business.
103
2.36 Company
Coin distribution services to
companies (CPG)
2.37 Company
Data Communication via TA
Easy Click services to
2.38 Company
Land rental to
(TIDC)
2.39 Company
Digital Data Network and other
services to
Total sales of services
3. Purchase of services
Office rental and related
services from
companies (CPG)
Mobile phone monthly fee from
31 December
2004
(Baht'000)
Relationship
Rationale and
necessity
3,387
Same as 1.9
business that the
Company proposed to
the third party.
9,966
Same as 1.12
business that the
Company proposed to
the third party.
106
TIDC’s equity interest. These companies are
related through directorships, i.e. Mr. Supachai
business that the
Company proposed to
the third party.
6,076
Same as 1.11
business, net of
discount rate.
8,415
Same as 2.1
business at market
price on annually basis
renewed.
103
Same as 2.2
business.
3,061,593
104
Cable TV services from
Company Limited
(UBC CABLE)
31 December
2004
(Baht'000)
41
Car park rental from
747
companies (CPG)
Internet services from
89
37
Company Limited
(UBC
CABLE)
Caliabration service from
375
NEC Corporation (Thailand)
Co., Ltd. (NEC)
Office rental and related services
from
companies (CPG)
5,265
Relationship
Rationale and
necessity
UBC indirectly holds 99.02% in UBC CABLE’s The transactions arose
equity interest. The Company indirectly holds in ordinary course of
39.24% of UBC’s equity interest and 65.00% business.
in AI’s equity interest. These companies are
Chearavanont, Mr. Supachai Chearavanont
and Mr. Chatchaval Jiaravanon.
Same as 1.3
business.
Same as 1.6
The transactions
arosed in ordinary
course of business.
39.24% of UBC’s equity interest and 99.99% business.
in AWC’s equity interest. These companies are
Chearavanont, Mr. Chatchaval Jiaravanon,
Mr. Vichaow Rakphongphairoj and Mr. Athueck
Asvanund.
The Company indirectly holds 9.62% in NEC’s The transactions arose
equity interest and 99.99% in AWC’s equity
interest. These companies are related through business.
directorships, i.e. Mr. Chatchaval Jiaravanon
Same as 2.10
business.
105
31 December
2004
(Baht'000)
Service Click TA and dealer from
47,326
Company Limited
(UBC
CABLE)
companies (BITCO)
Cost of revenue sharing from
True internet Data Center (TIDC)
Other services from
companies (CPG)
companies (BITCO)
Relationship
Same as 2.12
Rationale and
necessity
business.
63
39.24% in UBC’s equity interest and directly business.
holds 99.99% in TI’s equity interest. These
companies are related through directorships, i.e.
922
Same as 2.13
business.
1,452
TIDC’s equity interest and directly holds
99.99% in TI’s equity interest. These
i.e. Mr. Supachai Chearavanont and Mr.
Chatchaval Jiaravanon.
business.
247
Same as 2.14
business at market
price with 3 years long
renewed.
6
Same as 2.16
business.
25
Same as 2.17
business.
106
3.16 Telecom Holding Co., Ltd. (TH)
Service charge from
companies (CPG)
Insurance premium charge from
companies (CPG)
Company Limited (UBC
CABLE)
Insurance premium charge and
other services from
companies (CPG)
31 December
2004
(Baht'000)
Relationship
Rationale and
necessity
12
Company. The Company direct and
indirect holds 99.99% in TH’s equity
interest. These companies are related
The transactions
arose in ordinary
course of business.
266
Same as 1.7
The transactions
arose in ordinary
course of business.
321
Same as 2.31
The transactions
arose in ordinary
course of business.
13,785
Same as 1.2
The transactions
arose in ordinary
course of business.
379
Same as 2.8
The transactions
arose in ordinary
course of business.
82
Same as 1.1
The transactions
arose in ordinary
course of business.
Same as 2.7
The transactions
arose in ordinary
course of business.
Same as 2.28
The transactions
arose in ordinary
course of business.
Company. The Company indirectly holds
70.00% in TIDC’s equity interest. These
directorships.
The transactions
arose in ordinary
course of business.
426
49
Entertainment services from
1
companies (CPG)
107
31 December
2004
(Baht'000)
1,278
from
companies (CPG)
2
companies (BITCO)
Relationship
TDE’s equity interest. These companies are
related through directorships.
interest and indirectly holds 99.99% in TDE’s
through directorships, i.e. Mr. Supachai
Chearavanont.
27,279
Same as 1.13
from
companies (CPG)
Advertising services from
5,382
UBC indirectly holds 99.02% in UBC CABLE’s
equity interest. The Company directly holds
Company Limited
(UBC
43.86% and indirectly holds 39.00%in BITCO’s
CABLE)
equity interest and indirectly holds 39.24% in
UBC’s equity interest. These companies are
Chearavanont and Mr. Athueck Asvanund.
3.29 Company
Repair and maintenance services
5,173
from
NEC’s equity interest and related through
NEC Corporation (Thailand) Co.,
directorship by Mr. Chatchaval Jiaravanon.
Ltd. (NEC)
3.30 Company
Rental of internet server from
499
Same as 2.38
(TIDC)
3.31 Company
Rental space for public phone from
10,533
Same as 1.9
companies (CPG)
Rationale and
necessity
business.
business.
business.
business.
business.
business.
business.
108
3.32 Company
from
companies (CPG)
3.33 Company
Other services from
companies (CPG)
3.34 Company
Promotion and support project
Academy fantasia from
Cineplex Co., Ltd. (CN)
3.35 Company
3.36 Company
Promotion expenses and mobile
phone monthly fee from
companies (BITCO)
Total purchase of services
4. Purchase of goods
Purchase of internet service from
Purchase of goods from
companies (BITCO)
4.3 Company
Purchase of internet service from
31 December
2004
(Baht'000)
Relationship
Rationale and
necessity
32,816
Same as 1.9
are normally in the
to be renewed.
15,645
Same as 1.9
business.
17,022
Same as 1.10
business.
22
Same as 1.12
business.
1,879
Same as 2.39
business.
16
Same as 1.8
business.
18,085
Same as 2.31
business.
205
Same as 1.12
business.
197,964
109
4.4 Company
Purchase equipment from
NEC Corporation (Thailand) Co.,
Ltd. (NEC)
4.5 Company
Mobile handsets from
companies (BITCO)
31 December
2004
(Baht'000)
Relationship
14,456
Same as 3.29
business.
22,065
Same as 2.39
business.
Total purchase of goods
54,827
5. Interest expense
Payment of interest expense to
60,496
Kreditanstalt fuer Wiederaufbau
(KfW)
interest and KfW is the only preference
shareholder of the Company and holds
17.09% of issued and paid-up share capital.
5.2 Company
Payment of interest expense to
30,077
KfW is the only preference shareholder of the
Kreditanstalt fuer Wiederaufbau
Company and holds 17.09% of issued and
(KfW)
paid-up share capital.
Total interest expense
Rationale and
necessity
in repayment interest
expense of borrowing
to KfW at the rate as
stipulated in the
agreement.
in repayment interest
expense of borrowing
to KfW at the rate as
stipulated in the
agreement.
90,573
Measures and Procedures for Approving the Entering into of Connected Transactions
The Company has measures and procedures for approving the entering into the connected transactions
in compliance with the Rules and Regulations of the office of Securities and Exchange Commission
(“SEC”) and the Stock Exchange of Thailand (“SET”), and the provisions of the Public Companies Act,
i.e. related party transactions must obtain approval from the Independent Directors. If any related party
transaction is deemed to be a connected transaction, said transaction must obtain approval from the
Audit Committee, the Board of Directors and/or Shareholders Meeting as the case may be, according to
the Regulation of the Stock Exchange of Thailand. Moreover, the Company must comply with the terms
and conditions of the Common Terms Agreement First Amendment and Restatement Agreement dated
14th October 2003 which is the principal debt agreements executed between the Company and its
Secured Creditors, and related agreements. The key terms and conditions in said Agreement and related
agreements with regard to connected transactions specify that the Company shall not enter into any
110
contract, agreement, or arrangement with any affiliates other than on arms’ length open market terms.
Apart from the foregoing obligation, the terms and conditions of the Shareholders Agreement executed
with Kreditanstalt fÜr Wiederaufbau dated 22nd December 1999 specify that the Company shall have to
disclose the entering into any connected transactions of the major shareholders or its affiliates.
Policy for Future Connected Transactions
In addition, in order to strictly comply with the rules and regulations of the SEC and the SET, the
Company has applied said rules and regulations in implementing an internal guideline for connected
transactions by undertaking a comparative study of the connected transactions guidelines from various
foreign institutions to enhance transparency and create parallel understanding with foreign analysts and
investors. With regard to future connected transactions, the Company anticipates that there will be
connected transactions in the ordinary course of business of the Company with its affiliates and the
Company shall proceed with such transactions in a transparent manner pursuant to the good
corporate governance policy of the Company as well as all relevant regulations.
111
12. FINANCIAL STATUS AND PERFORMANCE
12.1 Company’s Auditor and Significant Accounting Policies
The auditors appointed by the Board of Directors to be the Company’s auditor in order to
perform the audit of the Company and consolidated financial statements during the past three
years were as follows:
Financial statements for the year ended 31 December 2004 : PricewaterhouseCoopers ABAS Limited
According to the three (3) years’ Reports of Certified Public Accountant, the Company’s
auditors had expressed his/her unqualified opinions on the financial statements as follows:
The Year Ended 31 December 2004
The auditor had expressed his/her unqualified opinion that the consolidated and Company
financial statements present fairly, in all material respects, the consolidated and Company
financial position as at 31 December 2004 and results of operations and cash flows for the year
then ended in accordance with generally accepted accounting principles.
TRUETO: Financial Status and Performance
112
12.2 Summary of Financial Statements
TRUE CORPORATION PUBLIC COMPANY LIMITED
Consolidated Balance Sheet
As at 31 December 2004, 2003 and 2002
(Unit: Thousand Baht)
31 December
2004
Assets
Current assets
Cash and cash equivalents
Restricted cash
Short-term investments
Trade accounts receivable, net
Short-term loans to related parties
Inventories, net
Income tax deducted at source
Claimable value added tax
Other current assets
Total current assets
Common
Size (%)
31 December
2003
Common
Size (%)
31 December
2002
Common
Size (%)
4,469,146
1,739,248
1,357,653
6,264,259
984,225
544,187
2,569,866
1,519,586
19,448,170
4.35
1.70
1.32
6.10
0.96
0.53
2.50
1.49
18.95
2,815,869
1,819,957
3,537,953
5,510,171
727,158
1,113,611
1,176,625
468,046
17,169,390
3.24
2.10
4.08
6.35
0.84
1.28
1.36
0.54
19.79
3,135,696
4,482,279
21,210
6,897,931
781
1,184,275
680,153
895,507
1,331,246
18,629,078
3.37
4.82
0.02
7.42
0.01
1.27
0.73
0.97
1.43
20.04
3,645,417
97,071
53,874
75,674,473
3.56
0.09
0.05
73.74
3,623,336
75,571
53,874
63,018,960
4.18
0.09
0.06
72.64
4,009,108
75,572
53,874
66,870,643
4.31
0.08
0.06
71.92
2,947,677
758,498
83,177,010
2.87
0.74
81.05
1,887,057
931,873
69,590,671
2.17
1.07
80.21
1,771,042
1,567,935
74,348,174
1.90
1.69
79.96
102,625,180
100.00
86,760,061
100.00
92,977,252
100.00
Liabilities and shareholders' equity
Current liabilities
Short-term borrowings
Trade accounts payable
Current portion of long-term borrowings
Unearned income
Accrued expenses
Other current liabilities
Total current liabilities
217,658
4,108,555
4,449,677
1,353,122
3,300,645
2,884,000
16,313,657
0.21
4.00
4.34
1.32
3.22
2.81
15.90
773,216
2,434,231
19,132,993
489,710
2,205,862
2,370,917
27,406,929
0.89
2.81
22.05
0.57
2.54
2.73
31.59
721,933
2,244,583
5,132,246
230,511
3,260,268
2,536,669
14,126,210
0.78
2.40
5.52
0.25
3.51
2.73
15.19
Non-current liabilities
Long-term borrowings
Long-term trade accounts payable
Other non-current liabilities
Total non-current liabilities
79,970,768
1,246,350
356,853
81,573,971
77.92
1.21
0.35
79.48
49,423,049
7,857,920
577,100
57,858,069
56.97
9.06
0.66
66.69
59,329,885
8,012,583
4,310,326
71,652,794
63.81
8.62
4.64
77.07
Total liabilities
97,887,628
95.38
85,264,998
98.28
85,779,004
92.26
Non-current assets
Investments:
- Investments in subsidiaries,
joint ventures and associates
- Other long-term investments
- Investment property
Property, plant and equipment, net
Other assets:
- Intangible assets, net
- Other non-current assets
Total non-current assets
Total assets
Shareholders' equity
Share capital
Authorised share capital
Preferred shares
Common shares
Issued and fully paid-up share capital
Preferred shares
Common shares
Premium on share capital
Common shares
Discount on share capital
Preferred shares
Common shares
Foreign currency translation adjustment
Unrealised gain(loss) on changes of
fair value on available- for-sale securities
Retained earnings (deficit)
Appropriated legal reserve
Deficit
Total parent's shareholders'equity
Minority interest in subsidiaries
Total shareholders’ equity
34,881
(43,400,745)
4,366,617
370,935
4,737,552
0.03
(42.32)
4.25
0.37
4.62
34,881
(44,005,658)
1,078,180
416,883
1,495,063
Total liabilities and shareholders' equity
102,625,180
100.00
86,760,061
6,994,655
39,588,738
6,996,485
36,895,796
6,997,535
37,463,647
6,994,655
33,930,617
6.82
33.09
6,996,485
29,948,487
8.06
34.52
6,997,535
29,947,437
7.53
32.21
11,432,046
11.15
11,432,046
13.18
11,432,046
12.30
(1,493,070)
(3,260,734)
104,344
(1.46)
(3.18)
0.10
(1,493,459)
(1,943,495)
104,344
(1.72)
(2.24)
0.12
(1,493,683)
(1,943,271)
104,344
(1.61)
(2.09)
0.11
(2,713)
(0.01)
0.04
(50.72)
1.25
0.47
1.72
34,881
(38,331,553)
6,745,023
453,225
7,198,248
0.04
(41.23)
7.25
0.49
7.74
100.00
92,977,252
100.00
24,623
0.02
4,549
0.01
113
Consolidated Statements of Income
For the year ended 31 December 2004, 2003 and 2002
31 December
2004
Revenues
Revenues from telephone and other services
Revenues from product sales
Total revenues
Costs
Cost of providing services
Cost of sales
Total costs
Gross profit
Selling and administrative expenses
Profit from sales and providing services
Other revenues
Other expenses
Operating results
Share of results in subsidiaries,
joint ventures and associates
Loss on impairment of investment
Gain on sale of investment
Other non-operating income (expenses)
Profit(loss) before interest and tax
Interest income
Interest expense
Foreign exchange gain (loss)
Loss before income tax
Income tax
Loss before extraordinary item
Extraordinary item
Gain from debt restructuring
Profit (loss) before minority interest
Loss attributable to minority interest
Profit (loss) for the year
Basic and diluted loss per share
Loss from ordinary activities
Extraordinary item
Net loss for the year
30,648,684
2,361,556
33,010,240
22,094,271
2,039,605
24,133,876
8,876,364
Common
Size (%)
92.85
7.15
100.00
31 December
2003
27,001,000
948,950
27,949,950
20,203,343
1,001,422
21,204,765
6,745,185
7,497,004
1,379,360
633,058
(179,372)
1,833,046
66.93
6.18
73.11
26.89
22.71
4.18
1.92
(0.54)
5.56
(124,144)
156,695
1,865,597
41,251
(4,212,697)
255,222
(2,050,627)
(87,521)
(2,138,148)
2,726,305
588,157
16,756
604,913
Common
Size (%)
96.60
3.40
100.00
31 December
2002
24,214,524
1,568,462
25,782,986
Common
Size (%)
93.92
6.08
100.00
17,651,533
1,758,073
19,409,606
6,373,380
6,468,524
276,661
343,251
(933,125)
(313,213)
72.28
3.58
75.86
24.14
23.14
1.00
1.23
(3.34)
(1.11)
6,171,230
202,150
245,620
(1,827,048)
(1,379,278)
68.46
6.82
75.28
24.72
23.94
0.78
0.95
(7.09)
(5.36)
(0.38)
0.47
5.65
0.12
(12.76)
0.77
(6.22)
(0.27)
(6.49)
(444,249)
3,989
(77,452)
(830,925)
37,614
(4,483,235)
(311,132)
(5,587,678)
(122,769)
(5,710,447)
(1.59)
0.01
(0.28)
(2.97)
0.13
(16.04)
(1.11)
(19.99)
(0.44)
(20.43)
1,844,460
(5,721,988)
943,248
3,196,229
(1,117,329)
54,299
(3,880,857)
(403,466)
(5,347,353)
(143,683)
(5,491,036)
7.15
(22.19)
3.66
12.40
(4.34)
0.21
(15.05)
(1.56)
(20.74)
(0.56)
(21.30)
8.26
1.77
0.05
1.82
(5,710,447)
36,342
(5,674,105)
(20.43)
0.13
(20.30)
95,454
(5,395,582)
1,133
(5,394,449)
0.37
(20.93)
(20.93)
(0.93)
(2.13)
(2.37)
0.90
(0.03)
(2.13)
0.03
(2.34)
114
Consolidated Statements of Cash Flow
For the year ended 31 December 2004, 2003 and 2002
31 December
2004
Cash flows from operating activities
Profit (loss) before minority interest
Add : Interest expense
Income tax
Profit (loss) before interest and tax
Adjustments for:
Depreciation and amortisation
(Gain)loss on disposal of property, plant and equipment
Doubtful accounts
Impairment charge of investment
Impairment charge of fixed assets
Obsolete inventories
Other operating assets and liabilities written-off
Gain on sale of available-for-sale securities
Unrealised (gain) loss on foreign exchange
Gain on repayment of borrowings
Gain from forgiveness
Share of loss in subsidiaries, joint ventures and associates
Changes in operating assets and liabilities
- Trade accounts receivable
- Short-term investment-trading securities
- Inventories
- Other current assets
- Other non-current assets
- Trade accounts payable
- Accrued expenses and other current liabilities
- Other non-current liabilities
Cash generated from operations
Less: Interest paid
Income tax paid
Net cash from operating activities
Cash flows from investing activities
Withdrawal (deposit) in restricted cash
Withdrawal (deposit) in short-term investments- time deposit
Acquisition of intangible assets
Acquisition of property, plant and equipment
Acquisition of subsidiaries, net of cash acquired
Additional share call up on other long-term investments
Additional investments in subsidiaries and associate
Proceeds from sale of available-for-sale securities
Proceeds from disposals of property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
(Repayments) proceeds from short-term borrowings
Issue from common shares
Proceeds from borrowings, net of cash paid for debt issuance cost
Preceed received from minority from share call up by a subsidiary
Repayments on long-term trade accounts payable
Repayments on borrowings
Net cash (used in) received from financing activities
Net increase (decrease) in cash and cash equivalents
Openning balance
Closing balance
31 December
2003
31 December
2002
588,157
4,212,697
87,522
4,888,376
(5,710,446)
4,483,235
122,769
(1,104,442)
(5,395,582)
3,880,857
143,683
(1,371,042)
11,785,068
(73,030)
558,421
8,330
26,454
22,891
(566,826)
(2,726,305)
(156,695)
(165,044)
124,144
11,365,829
(54,540)
665,321
647,962
225,951
20,152
(3,982)
232,982
(5)
444,249
9,276,717
20,681
828,512
5,721,988
1,613,414
180,418
2,968
(943,249)
394,881
(95,454)
(3,196,229)
(27)
(1,844,460)
(851,859)
(200,856)
(469,247)
1,030,723
200,757
(1,100,736)
1,353,217
(815,356)
12,872,427
(4,758,224)
(732,831)
7,381,372
942,590
(304,175)
43,041
742,857
(9,052)
94,705
(2,255,887)
(54,878)
11,638,678
(3,803,949)
(759,221)
7,075,508
(2,352,324)
(552,798)
(112,838)
(131,082)
(373,585)
874,241
560,355
8,501,087
(3,538,548)
(507,093)
4,455,446
81,037
2,401,190
(163,924)
(3,962,576)
613,689
(21,500)
(64,005)
208,665
(907,424)
2,662,323
(3,207,193)
(181,277)
(10,378,024)
5,832
135,051
(10,963,288)
94,171
161,264
(279,922)
(8,753,438)
(548,263)
2,663,450
10,059,584
15,300
(4,078,754)
(12,931,988)
(4,820,671)
27,868
11,155,131
(181,124)
(7,433,922)
3,567,953
670,045
2,998,136
25,786,973
(677,547)
(23,661,538)
5,116,069
1,653,277
2,815,869
4,469,146
(319,827)
3,135,696
2,815,869
451,440
2,684,256
3,135,696
(23,250)
(402,162)
83,262
(9,120,075)
115
12.3 Financial Ratios
FINANCIAL RATIOS
True Corporation Public Company Limited and Subsidiaries
2004
2003
2002
Liquidity Ratios
Current Ratio
Times
1.19
0.63
1.31
Quick Ratio-Accrual Basis
Times
0.85
0.50
1.03
Quick Ratio-Cash Basis
Times
0.34
0.34
0.31
Receivable Turnover Ratio
Times
5.61
4.01
4.51
Average Collection Period
Days
64.20
79.91
89.68
Average Collection Period *
Days
42.18
49.80
47.82
* Excluding accounts receivable from TOT which represents the amount that was already paid by customers
but TA has not yet received its revenue sharing from TOT.
Inventory Turnover Ratio
Times
28.20
21.96
16.65
Average Inventory Turnover Period
Days
12.76
16.39
21.63
Payable Turnover Ratio
Times
7.38
8.97
7.67
Average Payment Period
Days
48.80
40.12
46.92
Cash Cycle
Days
28.17
56.18
64.39
Profitability Ratios
Gross Margin
Net Profit Margin
Return on Equity
Efficiency Ratios
Return on Total Assets
Return on Fixed Assets
Assets Turnover Ratio
%
%
%
26.89%
1.83%
19.41%
24.90%
-20.30%
-130.54%
24.70%
-20.93%
-89.21%
%
%
Times
0.64%
16.22%
0.35
-6.31%
7.61%
0.31
-6.00%
5.43%
0.29
116
2004
2003
2002
Times
Times
Times
%
18.08
2.77
0.67
-
51.11
2.61
0.48
-
10.17
2.18
0.33
-
Per Share Analysis
Book Value per Share
Baht
Earnings (Loss) per Share (Basic and Diluted)
Dividend per Share
Baht
1.16
(0.03)
-
0.40
(2.13)
-
1.95
(2.34)
-
Financial Policy Ratios
Debt to Equity Ratio
Interest Coverage Ratio
Cashflow Coverage Ratio-Cash Basis
Dividend Ratio
Growth Ratios
Total Assets
%
18.29%
-6.69%
7.83%
Total Liabilities
%
14.80%
-0.60%
5.48%
Revenues from Sales and Services
%
18.10%
8.40%
24.90%
Total Operating Expenses
%
15.19%
8.70%
28.82%
Net Profit
%
NM
-5.18%
-57.50%
Note :
1/ Operating expenses excluded one-off transactions which consisted of the followings;
- out-of-period booking for leased circuit and conduit rentals of Baht 286 million in 2002.
- one-time compensation for staff of Baht 33 million in 2002.
2/ Depreciation and amortization for FY2003 excluded a write-off of PCT subscriber acquisition cost of Bt 215
million.
117
12.4 Management’s Discussion and Analysis
Overview
In 2004, True largely completed the groundwork for its transformation into a nationwide
integrated communication solutions provider and strengthened all aspects of its business in
preparation for a new more competitive era.
As well as successfully rebranding in April, highlights during the year included True’s ability to
stabilize and strengthen its fixed line and WE PCT businesses and the phenomenal growth of
its Internet/Broadband and mobile phone businesses after innovative marketing campaigns.
The successful launch of the “All Together Bonus” after the rebranding provided the first proof
that Thai customers want the benefits of bundled packages that only an integrated solutions
provider like True can provide.
In 2004 True’s revenue profile started to change significantly as the newer Internet/Broadband
and mobile phone businesses dramatically increased their revenue contribution. In 2003, these
new business units contributed 26 percent of company revenue (compared to 17 percent in
2002) and in 2004 this jumped to 37 percent, a trend we expect to continue.
The increase was led by True’s Broadband business whose ability to offer free modems and
unlimited high speed Internet access at rates as low as Baht 590 a month led to a 13-fold
increase in subscribers over the year.
With the Broadband business having obtained a critical mass of customers and establishing
itself as the market leader, and our Internet business emerging as the number one ISP in
Thailand (with more than one million “dial up Internet” users), we expect both businesses to
grow just as strongly in 2005.
This growth will be driven by the lure of lower high-speed Internet access charges brought about
through increased competition, the increased willingness of Thais to pay more for faster services
118
and a steady increase in the Internet penetration rate, currently at 11 percent of the population
and below 1 percent for Broadband.
TA Orange was the other key growth driver, beating expectations and increasing total
subscribers by 85 percent to 3.4 million in 2004.
It grew faster than any other mobile operators during the year and, despite being less than
three years old, started generating enough EBITDA to cover interest expense. TA Orange is
moving towards the target of net income break even point by the end of this year.
The completion of negotiations over a long term debt facility for TA Orange during Q3, 2004
and the purchase of Orange SA’s 39 percent shareholding by True means that in 2005 TA
Orange can be fully absorbed into the True Group.
This has allowed True to become a fully integrated operator, provide the full range of
telecommunications solutions in a single customized package and realize benefits from fixedmobile convergence.
True’s fixed line business generated small profits from ongoing operations in every quarter of
2004 and is expected to do the same in 2005, barring unforeseen circumstances, although
overall revenue is not expected to increase significantly and total subscriber numbers may fall
slightly.
The biggest financial transaction of the year was the sale of 398 million new True ordinary
shares via a private placement in Q4, raising Baht 2.7 billion. The proceeds were used to fund
a debt restructuring of one of subsidiaries, which strengthened the Company’s balance sheet by
increasing equity by Baht 4.3 billion (including a Baht 1.6 billion accounting gain from debt
forgiveness) and reducing debt by Baht 4 billion.
Throughout 2004, True maintained strong cash flow growth from non-TA Orange businesses
and steadily increased consolidated revenues and EBITDA, while reducing debt. This positive
trend is expected to continue in 2005.
119
Consolidated Results of Operations
The results of operations are discussed on a normalized basis without non-recurring items,
which are disclosed in the consolidated profit and loss statement on an adjusted basis.
In Q4, 2004, True changed its accounting method for recognizing TA Orange results and
balance sheets to full consolidation, from joint venture accounting. This occurred after True
increased its shareholding in TA Orange by 39 percent to 82.86 percent at the end of
September 2004, after long-term financing for TA Orange was completed.
•
•
•
•
•
True posted improved full year 2004 consolidated results, underpinned by strong TA
Orange, Broadband and Internet business performances. Consolidated revenue grew 18.1
percent or Baht 5.1 billion to Baht 33.0 billion in 2004. Surging Broadband revenue fully
offset a decline in basic fixed line voice revenues and helped non-TA Orange revenues to
grow 2.3 percent to 23.5 billion.
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) grew 13.1
percent to Baht 13.2 billion in FY 2004. However, EBITDA margin declined 177 basis points
to 39.9 percent due to higher promotion and advertising costs, and a higher contribution
from TA Orange, which has a lower margin.
Consolidated operating expenses increased 15.2 percent in FY 2004 due mainly to the
full consolidation of TA Orange in Q4 and TA Orange growth. However, True’s core opex
(cash operating expenses less cost of sales and revenue sharing) as a percentage of
revenue continued to improve to 34.3 percent in 2004 (from 35.3 percent in 2003).
Net loss from ongoing operations fell to Baht 3.0 billion (from Baht 4.5 billion in 2003) as
EBITDA improved in 2004. In addition, interest expense and equity loss from affiliates
decreased.
True posted a net profit of Baht 605 million in FY 2004 (compared to a Baht 5.7 billion
loss in 2003) after a Baht 3.6 billion gain from non-recurring items. This included gains from
120
•
debt restructuring (Baht 2.7 billion), the settlement of Deferred Payment Notes (Baht 157
million), other income (Baht 454 million) and a foreign exchange gain (Baht 255 million).
Consolidated Results of Operations - Adjusted Basis
(Unaudited)
(Baht in millions unless otherwise indicated)
Revenues
Revenues from telephone and other services
Revenues from product sales
FY 2004
FY 2003
% Change
FY 2004/
FY 2003
30,649
2,362
27,001
949
13.5
148.9
33,010
27,950
18.1
22,094
10,438
6,489
5,167
2,040
7,497
19,989
10,123
5,452
4,414
1,001
6,469
10.5
3.1
19.0
17.1
103.7
15.9
31,631
27,459
15.2
EBITDA
Depreciation & amortization
13,164
11,785
11,642
11,151
13.1
5.7
Operating profit
Interest income
Interest expense
Tax
1,379
41
(4,213)
(88)
491
38
(4,483)
(123)
180.8
9.7
(6.0)
(28.7)
Income from continuing operations
Share of results in associates
(2,880)
(124)
(4,077)
(444)
29.4
72.1
Net income (loss) from continuing operations
including share of results in subsidiaries
(3,004)
(4,521)
33.6
3,592
255
454
157
2,726
(1,189)
(311)
(215)
(667)
4
-
NM
NM
(100.0)
NM
NM
(100.0)
NM
Net profit (loss) before minority interest
(Income) loss attributable to minority interest
588
17
(5,710)
36
NM
(53.9)
Net profit (loss) for the period
605
(5,674)
NM
Total revenues
Operating expenses
Cost of services
Depreciation and amortization
Revenue sharing
Network operating expenses
Cost of sales
Selling and administrative expenses
Total operating expenses
Non recurring items
Gain ( loss ) on foreign exchange
Write-off of PCT acquisition cost
Other (expenses) income
Gain from DPN buy-back
Gain on sale of investment
Note :
1/ There were retroactive adjustments for FY2003 results relating to reclassification in accounts. These resulted in slight
changes in the following accounts from the previous release ; interest expenses and other income (expenses).
2/ Depreciation and amortization for FY2003 excluded a write-off of PCT subscriber acquisition cost of Baht 215 million.
121
SEGMENT RESULTS
Turnover
(Baht in millions)
Wireline - voice
Basic (POTS)
Value-added services
Digital Data Network (DDN)
Wireless
PCT
Mobile (TA Orange) 1/
Internet
Multimedia/Broadband
Others
Group
Unallocated Costs
2004
16,632
13,212
3,419
1,029
11,730
1,799
9,930
888
1,409
1,324
33,010
2003
16,893
13,644
3,249
1,183
7,228
2,087
5,141
471
1,097
1,079
27,950
Segment Results
% Change
(1.5)
(3.2)
5.2
(13.0)
62.3
(13.8)
93.1
88.6
28.4
22.7
18.1
2004
2003
% Change
5,312
5,373
(1.1)
618
(1,374)
689
(2,754)
(10.3)
50.1
376
254
199
5,386
(3,553)
182
102
169
3,761
(3,859)
107.3
148.0
18.0
43.2
(7.9)
Notes :
1/ Including handset sales by other subsidiaries.
2/ Segment results excluding non-recurring items.
3/ Segment results for wireline and DDN businesses represent gross profit but those for wireless, multimedia and internet
segments represent operating profit.
Fixed Line
• Fixed line business was stable in 2004, maintaining its market share in the Bangkok
Metropolitan Area. Revenue declined slightly (1.5 percent) to Bt 16.6 billion in FY 2004,
compared to Baht 16.9 billion in 2003.
• The number of fixed line subscribers declined by 17,553 to 1.94 million in 2004, a
smaller fall than the 58,328 loss in 2003. Business line customers increased as a
proportion of subscribers (29 percent at year-end 2004, compared to 27.7 percent at
year-end 2003).
• A 5.2% increase in Value Added Service revenues (mainly fault reporting, drop wiring,
fiber optic and duct rentals) to Baht 3.4 billion in 2004 helped to offset declines in basic
fixed line voice revenue (down 3.2 percent to Baht 13.2 billion, compared to Baht 13.6
billion in 2003) and public phone (down 6.7 percent to Baht 2.0 billion, compared to
Baht 2.1 billion in 2003).
• Average Revenue Per User (ARPU) declined slightly to Baht 538 in 2004, compared to
Baht 542 in 2003.
122
Wireless
WE PCT (Personal Communication Telephone)
• The rate of subscriber losses slowed in the second half of 2004 as initiatives to
reposition the service as WE PCT, the introduction of a Baht 1 per minute price plan
and free on-net calls and a handset promotion began to make a positive impact.
Subscribers declined by 13.9 percent to 472,846 in FY 2004 compared to 549,295 in FY
2003.
• Revenue declined by 13.8 percent to Baht 1.8 billion in FY 2004, but increased in Q3
and Q4, 2004.
TA Orange
• TA Orange added 1.6 million new subscribers to reach 3.4 million subscribers at yearend 2004 - an 85 percent increase on year-2003.
• TA Orange’s revenue contribution almost doubled to Baht 9.9 billion in FY 2004 as a
result of its improved performance and full results consolidation in Q4, 2004.
• ARPU fell 9.6 percent to Baht 437 in FY2004 (compared to Baht 484 in FY 2003), but
grew steadily during the second half of 2004.
• TA Orange mobile market share increased to 12.5 percent at end-2004 compared to 8.2
percent at end-2003.
DDN (Digital Data Network)
• DDN Revenue declined 13 percent to Baht 1.0 billion in FY 2004, mainly due to TA
Orange disconnections as it built its own network.
• However, non-TA Orange circuit revenue enjoyed steady growth, increasing 19.6 percent
to Baht 806 million in FY 2004, driven by a 20.2 percent increase in non-TA Orange
circuits to 7,845.
123
Internet
• Asia Infonet Co., Ltd., one of True’s subsidiaries established itself as Thailand’s leading
ISP with more than 1 million users at year-end 2004 (up 88.6 percent on year-end
2003). It also had the highest number of post-paid customers among ISPs in Thailand
at around 525,000.
• Internet revenue increased 88.6 percent to Baht 888 million in FY 2004 (compared to
Baht 471 million in FY 2003), aided by strong consumer Broadband revenue growth.
Multimedia/Broadband
• Multimedia revenue increased 28.4 percent to Baht 1.4 billion, mainly due to increased
Broadband revenue.
• Consumer Broadband revenue jumped 207 percent to Baht 725 million in FY 2004
(Baht 471 million of this was recognized in the Multimedia segment as ADSL network
revenue. The remainder was recognized under the Internet segment).
• Consumer Broadband subscribers surged 13-fold to 164,775 by year-end 2004, giving
True an 85 percent market share.
• In 2005, True will expand Consumer Broadband capacity by up to 500,000 ports to
meet demand.
Consolidated Balance sheets and Cash Flows
FY 2004
FY 2003
(Baht in millions unless otherwise indicated)
Balance Sheets
Current assets
Property, plant and equipment, net
Total assets
Current liabilities
Borrowing
Total liabilities
Shareholder's equity
Cash Flows
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Ending cash balance
19,448
75,674
102,625
16,314
79,971
97,888
4,738
7,381
(907)
(4,821)
4,469
% Change
FY 2004/
FY 2003
17,169
63,019
86,760
27,407
49,423
85,265
1,495
13.3
20.1
18.3
(40.5)
61.8
14.8
216.9
7,076
(10,963)
3,568
2,816
4.3
(91.7)
NM
58.7
124
FINANCIAL POSITION
True consolidated assets amounted to Baht 102.6 billion as at the end of December 2004, an
increase of 18.3 percent (Baht 15.9 billion) on end-2003 due mainly to full consolidation of TA
Orange property, plant and equipment assets.
True’s consolidated liabilities also increased Baht 12.6 billion to Baht 97.9 billion at end-2004
from the full consolidation of TA Orange. Total liabilities of non-TA Orange businesses
decreased 12.6 percent to Baht 59.8 billion as True reduced debt by Baht 9.3 billion.
Consolidated borrowings, including current portion, increased Baht 15.8 billion to Baht 84.4
billion (including TA Orange’s debts of Baht 31.4 billion, net of debt issuance cost) in the 12
months to end-2004. The proportion of short term borrowing decreased significantly as TA
Orange completed its long term financing in September 2004. Short-term debt was converted
into debt with a 7-year maturity and a two-year grace period for principal repayment. The first
scheduled repayment is due in September 2006.
Long term trade accounts payable decreased from Baht 8.2 billion at the end of 2003 to Baht
1.4 billion at end-2004 due to the completion of debt restructuring of a subsidiary. True paid
Baht 4.1 billion in cash to a subsidiary’s creditor and received a Baht 2.7 billion debt
forgiveness.
Shareholders’ equity increased from Baht 1.5 billion at end-2003 to Baht 4.7 billion at end 2004.
This was due to the Q4 Baht 2.7 billion capital increase and the Baht 605 million full year net
profit.
Liquidity
True’s consolidated net cash flow from operations increased Baht 306 million or 4.3 percent to
Baht 7.4 billion in the 12 months to end-2004. Free cash flows (cash flow from operations less
capex) increased to Baht 3.4 billion from a negative Baht 3.3 billion in 2003. Excluding TA
Orange, True’s free cash flows increased 20.7 percent to Baht 6.2 billion, enabling True to inject
Baht 5 billion funding for TA Orange network expansion. An additional Baht 1 billion will be
invested in TA Orange in March 2005.
125
Conclusion
True strengthened its financial position in 2004. Our core fixed line business continued to
generate strong cash flows, providing a solid platform for debt reduction and further investment
into high growth business areas. Our liquidity improved consistently throughout the year and our
net debt to EBITDA ratio (excluding TA Orange) fell to 4.3 times at the end of 2004 (compared
with 4.7 times at end-2003). Our EBITDA interest coverage ratio increased to 3.6 times (from 3.1
times). If TA Orange is included our net debt to EBITDA ratio remained stable at around 6 times
at the end of 2004, while our EBITDA interest coverage ratio increased to 3.1 times.
12.5 Audit fees
1.
Audit fees
The Company and subsidiaries paid for audit fees of Baht 13,431,000 for the year 2004
to appointed auditing firm.
2.
Other non-audit fees
The Company paid of other non-audit fees, i.e. engagement to perform agree-upon
procedures and IT internal audit consulting services to appointed auditing firm. The fee
amount of Baht 2,208,000 was paid during the year and the remaining amount of Bath
366,800 was carried forward to the following year upon the completion of work.
126
13. OTHER RELATED INFORMATION
- None -
TRUETP: Other Related Information
127
Appendix 1
DIRECTORS’ INFORMATION (AS OF 31st DECEMBER 2004)
Name
Mr. Narong Srisa-an
Mr. Vitthya Vejjajiva
Position
Age
(year)
Independent
Director
77
and
Chairman of the
Audit Committee
68
TRUE Share
Ownership
(31/12/04)
10,000 shares
-
Family
Relationship
-
-
Education
Experience
Honorary Master Degree of Economics,
Thammasat University
1998-Present
Master Degree of Laws
Harvard University, U.S.A.
1998-Present
Master Degree of Arts
University of Cambridge, London
Bachelor of Laws
University of Cambridge, London
English Barrister
Gray’s Inn Association
Present
1991-1992
1988
1984
1981
1979
Chairman
Advanced Agro Public Company Limited
Chairman
Prida Pramote Company Limited
Chairman
Thanakorn Vegetable Oil Products Company Limited
Chairman
Surabangyikhan Company Limited
Chairman of Executive Board
Thai Beverage Can Limited
Chairman
Eastern Seaboard Industrial Estate (Rayong) Company Limited
Chairman
Thai Alcohol Public Company Limited
Siam Food Products Public Company Limited
Beer Thai (1991) Public Company Limited
Vice Chairman
Berli Jucker Public Company Limited
Vice Chairman
General Tobacco Company Limited
Vice Chairman
Thai Beverages Public Company Limited
Executive Director
Com-link Company Limited
Independent Director and Chairman of the Audit Committee,
Chairman
K Line (Thailand) Company Limited and its subsidiaries
Permanent Secretary of the Ministry of Foreign Affairs
Ambassador Extraordinary and Plenipotentiary of the
United States of America
Ambassador Extraordinary and Plenipotentiary of Belgium
and the European Community
Ambassador Extraordinary and Plenipotentiary of Canada
Director
General of Department of Economic Affairs
128
Name
Dr. Kosol Petchsuwan
Position
Age
(year)
and Member of the
Audit Committee
66
TRUE Share
Ownership
(31/12/04)
-
Family
Relationship
Education
-
Doctorate of Engineering,
University of London, England
Bachelor of Engineering,
University of London, England
Appendix 1
Experience
1999-Present
1999-Present
2000-2001
1997-2001
1998-2000
Mr. Joti Bhokavanij
Mr. Dhanin Chearavanont
and
Member of the Audit
Committee
Chairman
62
-
-
Fellow of The Association of Chartered
Certified Accountants, England
Programme for Management Development,
Harvard Business School(U.S.A.)
65
-
Mr. Supachai and
Mr. Soopakij’s
father
Marketing Management Programme,
Stanford University, Graduate School of
Business (U.S.A.)
Commercial School
Hong Kong
Shantou Secondary School
The People’s Republic of China
1999-Present
2000-2001
1994-1997
1992-1994
1989-Present
Independent Director and member of the Audit Committee
President
The Telecommunications Association of Thailand
Chairman
The Aeronautical Radio of Thailand Limited
Director
The Press Council of Thailand
Independent Director and Member of the Audit Committee
PTT Exploration and Production Public Company Limited
Independent Director and member of the Audit Committee
Executive Chairman
TISCO Finance Public Company Limited
President & CEO
Thai Wah Group of Companies
Managing Director and Consul-General of Denmark for Bangkok
The East Asiatic Company (Thailand) Limited
Chairman
Chairman and Chief Executive Officer
Charoen Pokphand Group Company Limited and Chia Tai
Group Company Limited
Chairman
Charoen Pokphand Foods Public Company Limited
129
Name
Mr. Sumet Jiaravanon
Position
Age
(year)
TRUE Share
Ownership
(31/12/04)
Vice Chairman
70
150,000 shares
Family
Relationship
Appendix 1
Education
Secondary School
Sarasitphitayalai, Ratchaburi
Experience
1993-Present
Vice Chairman
Executive Chairman
Charoen Pokphand Group Company Limited
Dr. Ajva Taulananda
Vice Chairman
67
-
-
Honorary Doctorate of Engineering
Ramkhamhaeng University
1992-Present
Vice Chairman
Honorary Doctorate of Engineering
Chulalongkorn University
Vice Chairman
Doctorate of Industrial Engineering and
System, Illinois Institute of Technology,U.S.A.
Chairman
Master Degree of Industrial Engineering,
Iowa State of University, U.S.A.
Bachelor of Industrial Engineering,
The Thai Chamber of Commerce and Board of Trade of Thailand
1993-1999
Director and President
1991-1992
Deputy Minister, Ministry of Agriculture and Cooperatives
1992-Present
Vice Chairman
Special Certificate: Public – Private joint
defence curricum, Class 1
The National Defence College of Thailand
Mr. Chaleo Souvannakitti
Vice Chairman
76
3,500,000 shares
-
Master Degree of Business Administration
Indiana University, U.S.A.
Bachelor of Accounting
The faculty of Commerce and Accountancy,
Director
Telecom Holding Company Limited
130
Name
Position
Age
(year)
Mr. Athueck Asvanund*
Vice Chairman
and
Group General Counsel
Mr. Supachai Chearavanont*
Mr. Soopakij Chearavanont*
*Authorized Signatory
Family
Relationship
53
TRUE Share
Ownership
(31/12/04)
-
-
Master Degree of Laws specialized in
International Legal Studies New York
University, U.S.A.
Bachelor of Laws (Honours)
Director, President
and
37
1,240,000 shares
-
Bachelor of Business Administration in
Financial Management
Boston University, U.S.A.
Director
40
-
-
Bachelor of Business Administration
New York University, U.S.A.
Appendix 1
Education
Experience
1997-Present
Director
Director
Director
CP Seven Eleven Corporation Public Company Limited
Director
United Broadcasting Corporation Public Company Limited
2002 – Present Director
TA Orange Company Limited
Director
Present
Aqua-Agri Foods International, Inc
Baker & McKenzie
1978-1997
1999-Present Director, President and Chief Executive Officer
1992- 1999
Director and Senior Executive Vice President
1992-Present Director
2000-Present Executive Chairman
1998-Present Chairman
1991-Present Chairman
Lucent Network Technology (Thailand) Company Limited
131
Name
Position
Age
(year)
Mr. Chatchaval Jiaravanon*
Director
and
Managing Director
Group Investment
42
TRUE Share
Ownership
(31/12/04)
-
Family
Relationship
-
Appendix 1
Education
Bachelor of Science Business Administration
University of Southern California, U.S.A.
Experience
1993-Present
2001-Present
2000-Present
1998-Present
1997-Present
1992-Present
1990-Present
Mr. Vichaow Rakphongphairoj*
Director
Managing Director
and
47
-
-
Pepperdine University, U.S.A.
Master Degree of Electrical Engineering
University of Wisconsin, U.S.A.
Bachelor of Electrical Engineering
Arizona State University, U.S.A.
2000-Present
1998-2000
1997-1998
1996-1997
1995-1996
Director and Managing Director-Group Investment
Director and member of Audit Committee
Ticon Industrial Connection Public Company Limited
President and C.E.O.
Cal-Comp Electronics (Thailand) Public Company Limited
Executive Chairman
Cambodia Mobile Telephone Company Limited
C.E.O.,
Director
Thai Kodama Company Limited
Director
Metro Machinery Public Company Limited
Director, Managing Director and Chief Operating Officer
E.V.P., Business & Enterprise
E.V.P., Central Operation & Information Technology
Region Director, Bangkok-Southeast Region
Region Director, Bangkok-West Region
* Authorized Signatory
132
Name
Position
Age
(year)
Director
51
TRUE Share
Ownership
(31/12/04)
384,000 shares
Family
Relationship
Education
-
Master Degree of Accounting,
Bachelor of Accounting,
Mr. Heinrich Heims
Director
53
-
-
Abitur at Schiller Gymnasium,
Hameln Studies at the Freie University Berlin
Educational Sciences.
Studies at the Freie University Berlin, with
State Examination.(Graduate in Economics)
Mr. Klaus Tuengeler
Director
63
-
-
Appendix 1
Experience
2001-Present
Present
2000-Present
2004-Present
1998-Present
1978-1998
Abitur (leaving examination)
Liebig Gymnasium,Frankfurt/M
2000-Present
Commercial apprenticeship at
Metallgesellschaft AG
Present
Graduated as Technischer Diplombetriebswirt
from Karlsruhe University
Degree:dipl. rer. pol.(techn)
Mr. Claus Stadler
Director
47
-
-
Law School of the University of Bielefeld,
Germany
2000-Present
Present
Director
Deputy Group CFO
Director
C.P. Seven Eleven Public Company Limited
Director
Vinythai Public Company Limited
Director
Ayudhya Allianz C.P. Public Company Limited
Director
CPPC Public Company Limited
Director
COO and Member of the Board of Managing Directors of
KfW IPEX-Bank
Senior Vice President - Export and Project Finance KfW
Export Finance
KfW
Director
First Vice President-Export and Project Finance
Telecommunications, Natural Resources
KfW
Director
Deputy General Counsel, Head of the Legal Department (Frankfurt)
KfW
133
Name
Mr. Andreas Klocke
Mr. Harald Link
Position
Age
(year)
Director
48
Director
49
TRUE Share
Ownership
(31/12/04)
3,500 shares
50,000 shares
Appendix 1
Family
Relationship
Education
-
M.A. International Relations,
University of KANSAS, U.S.A.
2000-Present
DIPLOMA VOLKSWIRT
University of Hamburg, Germany
Present
MBA,
St. Gallen University, Switzerland
2000-Present
-
Experience
1987-Present
1981-1986
1979-1980
Dr. Lee G. Lam
Director
45
-
-
Doctorate of Philosophy from the University of 2003-Present
Hong Kong
Master Degree of Systems Science and MBA
from the University of Ottawa, Canada
2001-2003
Bachelor of Sciences and Mathematics from
the University of Ottawa, Canada
1999-2001
1998-1999
Post-graduate Diploma of Public Administration
from Carlton University, Canada
1996-1998
1993-1995
1989-1993
1981-1989
EXECUTIVE OFFICERS’ INFORMATION (AS OF 31st DECEMBER 2004)
Director
Head of KfW’s South-East Asia Regional office in Bangkok in
Charge of KfW Affairs in Thailand and South- East Asia Region
Director
Managing Partner
B. Grimm & Co. R.O.P.
Chairman
B. Grimm Group of Companies
Director, Executive Committee
Assistant to Managing Partner
Director
Vice Chairman / President & CEO
Chia Tai Enterprises International Limited
Managing Director
BOC International Holdings Limited (“BOCI”)
Executive Director
Singapore Technologies Telemedia
Partner-in-charge
Heidrick & Struggles
President & CEO
Millicom International Cellular Asia Pacific Operations
Managing Partner
A.T. Kearney, Inc.
General Manager
Cable & Wireless/Hongkong Telecom
Senior Executive
Bell Canada
134
Name
Position
Age
(year)
Mr. Supachai Chearavanont
Director, President
and
37
Director
Managing Director
and
47
Mr. Vichaow Rakphongphairoj
TRUE Share Family Relationship
Ownership
(31/12/04)
1,240,000 shares
-
-
-
Education
Director
and
Managing Director
Group Investment
1999-Present
Pepperdine University, U.S.A.
2000-Present
Master Degree of Electrical Engineering
University of Wisconsin, U.S.A.
42
-
-
Experience
Bachelor of Business Administration in
Financial Management
Boston University U.S.A.
Bachelor of Electrical Engineering
Arizona State University, U.S.A.
Mr. Chatchaval Jiaravanon
Appendix 1
Bachelor of Science Business Administration
University of Southern California, U.S.A.
1992- 1999
1998-2000
1997-1998
1996-1997
1995-1996
1993-Present
2001-Present
2000-Present
1998-Present
1997-Present
1992-Present
1990-Present
Director, President and Chief Executive Officer
Director and Senior Executive Vice President
Director, Managing Director and Chief Operating Officer
E.V.P., Business & Enterprise
E.V.P., Central Operation & Information Technology
Region Director, Bangkok-Southeast Region
Region Director, Bangkok-West Region
Director and Managing Director-Group Investment
Director and member of Audit Committee
Ticon Industrial Connection Public Company Limited
President and C.E.O.
Cal-Comp Electronics (Thailand) Public Company Limited
Executive Chairman
Cambodia Mobile Telephone Company Limited
C.E.O.,
Director
Thai Kodama Company Limited
Director
Metro Machinery Public Company Limited
135
Name
Position
Age
(year)
Mr. Athueck Asvanund
Vice Chairman
and
Mr. William E. Harris
Mr. Adhiruth Thothaveesansuk
Family Relationship
53
TRUE Share
Ownership
(31/12/04)
-
Chief Financial
Officer
43
100,000 shares
-
Managing Director
Office / SME Solution &
Wireless Access
42
-
-
-
Appendix 1
Education
Experience
Director
Director
Bachelor of Laws (Honours),
Director
CP Seven Eleven Corporation Public Company Limited
Director
2002 – Present Director
Director
Present
Aqua-Agri Foods International, Inc
Baker & McKenzie
1978-1997
Master Degree of Business Administration,
2001-Present Chief Financial Officer
Major in Finance and Marketing, Wharton School
of the University of Pennsylvania
1998-2000
Executive Vice President - Corporate Finance
Bachelor of Science in Economics, Wharton
1993-1998
Director
School of the University of Pennsylvania
Credit Policy, Verizon Communications, Philadelphia
Master Degree of Finance & Marketing,
2003-Present Managing Director, Office / SME Solution & Wireless Access
Indiana University of Pennsylvania, U.S.A.
Acting President
Bachelor of Industrial Management,
2002
Chief Commercial Officer
2001
Executive Vice President
1998-2002
General Manager
1998-2001
President
Master Degree of Laws specialized in
International Legal Studies
New York University, U.S.A.
1997-Present
136
Name
Position
Mr. Songtham Phianpattanawit Managing Director
Corporate Solution,
Wholesales & Data
Age
(year)
47
TRUE Share
Ownership
(31/12/04)
100,000
Family Relationship
-
Appendix 1
Education
Bachelor of Science (Computer Science)
University of South Alabama, U.S.A.
Experience
Present
2001-2003
2001-2002
2000
1998
1997
Mr. Thiti Nantapatsiri
Managing Director
Home / Consumer
Solution & Highspeed
Access
51
-
-
Bachelor Degree of Engineering (Electrical)
King Mongkut’s Institute of Technology,
Ladkrabang Campus
Present
1999-2003
2001-2002
1992-2000
1997-1999
Managing Director - Corporate Solution ,Wholesales & Data
Executive Director – Corporate Solution
Acting President
Acting President
President
True Internet Data Center Company Limited
Country General Manager / MD
IBM Thailand Company Limited
Chairman
IBM Solution Delivery Company Limited
Director
IBM Storage Product Thailand Company Limited
Director, Sales & Marketing
Country Manager, System Sales
Country Manager Finance & Administration and CFO
Service Business Executive
Managing Director - Home / Consumer Solution & Highspeed Access
Executive Vice President
Loxley Public Company Limited
President & CEO
Hutchison CAT Wireless Multimedia Company Limited
President & CEO
Hutchison Telecommunications (Thailand) Company Limited
First Senior Vice President
Loxley Public Company Limited
137
Appendix 1
Information of Directors and Executive Officers (As of December 31,2004)
2.
Mr. Sumet
Jiaravanon
X
/
3.
Mr. Joti
Bhokavanij*
/
4.
Mr. Chaleo
Souvannakitti
X
/
/
5.
Dr. Ajva
Taulanda
X
X
/
/
6.
Dr. Kosol
Petchsuwan *
/
7.
Mr. Chatchaval
Jiaravanon
/
/
/
/
8.
Mr. Soopakij
Chearavanont
/
/
/
/
9.
Mr. Supachai
Chearavanont
/
/
10. Mr. Narong
Srisa-an *
/
X
11. Mr. Vitthya
Vejjajiva *
/
12. Mr. Athueck
Asvanund
X
13. Mr. Heinrich
Heims
/
14. Mr. Klaus
Tuengeler
/
15. Mr. Claus
Stadler
/
16. Mr. Andreas
Klocke
/
17. Mr. Harald
Link
/
18. Mr. Vichaow
Rakphongphairoj
/
19. Mr. Umroong
Sanphasitvong
/
20. Mr. Lee
G. Lam
/
Remark :
* = External Director
XX = Chairman
ARM
NEC
/
TSC
/
NTU
/
UBC
Nilubon
(BVI)
K.I.N. (BVI)
True digital
True-IDC
True
Multimedia
AWC
AI
Asia DBS
True Internet
U-NET
W&W
TEMCO
TT&D
K.I.N.
/
Song Dao
/
NC True
XX
Ta Orange
Retail
Chearavanont
TAO
Mr. Dhanin
BITCO
1.
TI
TE
True Fleet
Manageme
nt
Yaikaew
True
True
Properties
Name
TH
Subsidiaries/Associated Companies
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
XX
/
/
/
/
XX
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
XX
/
/
/
/
/
/
/
/
/
/
/
/
X = Vice Chairman / = Director
138
Appendix 1
Remark :
Abbreviation
Full Name
True
True Corporation PLC.
(Formerly named TelecomAsia Corporation PLC.)
TH
Telecom Holding Co., Ltd.
True Properties
TE
True Fleet
Management
Yaikaew
TI
True Properties Co., Ltd.
(Formerly named Nilubon Co., Ltd.)
Tele Engineering and Services Co., Ltd.
True Fleet Management Co., Ltd.
(Formerly named W7 Rental Services Co., Ltd.)
Yai Kaew Co., Ltd.
Telecom International Co., Ltd.
Abbreviation
AWC
True Multimedia
True-IDC
Full Name
Asia Wireless Communication Co., Ltd.
(Formerly named Multimedia Network Co., Ltd.)
True Multimedia Co., Ltd.
(Formerly named Asia Multimedia Co., Ltd.)
(Formerly named TA Internet Data Center Co., Ltd.)
True digital
True Digital Entertainment Co., Ltd.
Nilubon (BVI)
Nilubon Co.,Ltd. (Registerred at BVI)
K.I.N. (BVI)
BITCO
K.I.N. (Thailand) Co.,Ltd. (Registerred at BVI)
Bangkok Inter Teletech Co., Ltd.
K.I.N.
K.I.N. (Thailand) Co., Ltd.
TAO
TA Orange Co., Ltd.
TT&D
Telecom Training and Development Co., Ltd.
UBC
United Broadcasting Corporation PLC.
TEMCO
Telecom Equipment Manufacturing Co., Ltd.
NTU
N.T.U. (Thailand) Limited
W&W
Wire & Wireless Co., Ltd.
TSC
Thai Smart Card Co., Ltd.
U-NET
U-Net Co., Ltd.
NEC
NEC Corporation (Thailand) Co., Ltd.
(Formerly named NEC Communication Systems Co., Ltd.)
True Internet Co.,Ltd.
(Formerly named Asianet Corporation Limited Co., Ltd.)
ARM
Asia Remanufacturing Industries Co., Ltd.
True Internet
Asia DBS
Ta Orange Retail
Asia DBS PLC.
Ta Orange Retail Co.,Ltd
AI
Asia Infonet Co., Ltd.
Song Dao
Song Dao Co., Ltd.
139
Appendix 2
Information of Directors of Subsidiaries (As of December 31,2004)
Tieanworn
2.
Mr. Sunthorn
Arunanondchai
3.
Gen. Suchinda
Kraprayoon
4.
Mr. Montree
Navikapol
5.
Mr. Chaturong
Chatupparisoot
6.
Mr. Khachorn
Chiarawanont
7.
Mr. Anat
Mekpaiboonvatana
8.
Mr. Somchai
Putthipornset
9.
Mr. Phattarapong
Phansiri
10.
Mr. Surapol
Methidol
11.
Mr. Rolf Herman
Laus
12.
Maj.Gen.M.R.Suphawat
Khasemsri
13.
Mr. William E.
Harris
14.
Mr. Noppadol
Dejudom
15.
Mr. Thanachai
Wongthongsri
16.
Mr. Thavorn
Nakbutr
17.
Mr. Pakkaporn
Sathiconpakiranakorn
18.
Mr. Manit
Saikraw
19.
Mr. Adhiruth
Thothaveesansuk
20.
Mr. Samran
Pongprayoon
/
/
/
/
/
/
/
/
/
/
/
NC True
Ta Orange
Retail
Song Dao
ARM
/
NEC
/
TSC
/
NTU
/
UBC
K.I.N. <BVI>
Nilubon <BVI>
T-Pay
True digital
AWC
True
Multimedia
True-IDC
AI
Asia DBS
True Internet
U-NET
W&W
TEMCO
K.I.N.
TT&D
TI
/
/
TAO
Mr. Min
BITCO
1.
Yaikaew
TH
True
Properties
TE
Name
True Fleet
Management
Subsidiaries
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
140
Appendix 2
Wuttisarn
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
Mr. Visit
Mr. Songtham
Mr. Kul Pyo
Mr. Jin Sok
Mr. Chitchai
Mr. Ong-ard
Mr. Kashem
Mr. Taj
Mr. Ngampol
Mr. Vallobh
Mr. Hans Roger
Mr. Bunsong
Mr. Antonie Andries
Mr. John James
Mr. Visit
Mrs. Aranrat
Mrs. Phenthippha
Mr. Sahai
Ms. Elizabeth
Mr. Subin
Rakvisitwong
Phianpattanawit
Hong
Kim
Nantapat
Prapakamol
Kornseri
Singusaha
Wichagonrakul
vimolvanich
Snook
Lujananont
Roux
Volkwyn
Tantisunthorn
Youkong
Dulyachinda
Supsunthornkul
Wang
Pinkayan
NC True
Ta Orange
Retail
Song Dao
ARM
NEC
TSC
/
/
/
NTU
/
/
UBC
K.I.N. <BVI>
Nilubon <BVI>
T-Pay
True digital
True-IDC
True Multimedia
AWC
AI
Asia DBS
True Internet
U-NET
TEMCO
TT&D
K.I.N.
Yaikaew
TI
True Fleet
Management
W&W
/
TAO
Mrs. Thippawan
BITCO
21.
TE
TH
Name
True Properties
Subsidiaries
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
141
Appendix 2
42.
Mr. Songrit
Kusumarasananant
43.
Mrs. Doris Gold
Wibulsin
44.
Mr. Damrong
Kasemset
45.
Mr. Thavee
Lerdpanyawit
46.
Mr. Veerasak
Hunmekhawit
47.
Mr. Kosak
Chairasamisak
48.
Mr. Pisit
Pakkasem
49.
Mrs. Preeprem
Seriwong
50.
Mr. Surat
Palalikit
51.
Mr. Suttisak
Rujisumphan
52.
Mr. Prakorn
Martrakul
53.
Mrs. Urairat
Bun-akad
54.
Mr. Ri-eki
Tanaka
55.
Mr. Kuji
Hidenori
56.
Mr. Jin
Ikarachi
57.
Mr. Akihisa
Arika
58.
Mr. Takeo
Chimada
59.
Mr. Kiyofumi
Kusaka
60.
Mr.Jean Miches
Thibaud
61.
Mr.Eben
Greyling
62.
Mr.Boonsee
Busabatorn
NC True
Ta Orange
Retail
Song Dao
ARM
NEC
TSC
NTU
UBC
TAO
BITCO
K.I.N. <BVI>
Nilubon <BVI>
T-Pay
True digital
AI
AWC
True
Multimedia
True-IDC
Asia DBS
True Internet
U-NET
TEMCO
W&W
TT&D
K.I.N.
TI
Yaikaew
True Fleet
Management
TE
TH
Name
True Properties
Subsidiaries
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
142
Appendix 2
63.
Ms.Ratee
Keeratibumroongpong
64.
Mr.Thanakorn
Keeratibumroongpong
65.
Mr.Taek Jin
Kim
66.
Mr.Heung Joon Kim
67.
Ms.Su Jin
Kim
Song Dao
Ta Orange Retail
NC True
ARM
NEC
TSC
NTU
UBC
TAO
BITCO
K.I.N. <BVI>
Nilubon <BVI>
T-Pay
True digital
True-IDC
True Multimedia
AWC
AI
Asia DBS
True Internet
U-NET
W&W
TEMCO
K.I.N.
TT&D
TI
Yaikaew
True Fleet
Management
TE
True Properties
Name
TH
Subsidiaries
/
/
/
/
/
143
Appendix 2
Remark :
Abbreviation
Full Name
True
True Corporation PLC.
(Formerly named TelecomAsia Corporation PLC.)
TH
Telecom Holding Co., Ltd.
True Properties
TE
True Fleet Management
Yaikaew
TI
K.I.N.
TT&D
TEMCO
W&W
U-NET
True Internet
Asia DBS
AI
Ta Orange Retail
True Properties Co., Ltd.
(Formerly named Nilubon Co., Ltd.)
Tele Engineering and Services Co., Ltd.
True Fleet Management Co., Ltd.
(Formerly named W7 Rental Services Co., Ltd)
Yai Kaew Co., Ltd.
Telecom International Co., Ltd.
K.I.N. (Thailand) Co.,Ltd.
Telecom Training and Development Co., Ltd.
Telecom Equipment Manufacturing Co., Ltd.
Wire & Wireless Co., Ltd.
U-Net Co., Ltd.
True Internet Co., Ltd
(Formerly named Asianet Corporation Co., Ltd.)
Asia DBS PLC.
Asia Infonet Co.,Ltd.
Ta Orange Retail Co.,Ltd.
Abbreviation
AWC
True Multimedia
True-IDC
True digital
T-Pay
Nilubon <BVI>
K.I.N. <BVI>
BITCO
TAO
UBC
NTU
TSC
NEC
ARM
Song Dao
Full Name
Asia Wireless Communication Co., Ltd.
(Formerly named Multimedia Network Co., Ltd.)
True Multimedia Co., Ltd.
(Formerly named Asia Multimedia Co., Ltd.)
True Internet Data Center Co.,Ltd.
(Formerly named TA Internet Data Center Co., Ltd.)
True Digital Entertainment Co., Ltd.
T Pay Co., Ltd.
Nilubon Co., Ltd. (Registerred at BVI)
K.I.N. (Thailand) Co., Ltd. (Registerred at BVI)
Bangkok Inter Teletech Co., Ltd.
TA Orange Co., Ltd.
United Broadcasting Corporation PLC.
N.T.U. (Thailand) Limited
Thai Smart Card Co., Ltd.
NEC Corporation (Thailand) Co., Ltd.
(Formerly named NEC Communication Systems Co., Ltd.)
Asia Remanufacturing Industries Co., Ltd.
Song Dao Co.,Ltd.
144
(Translation of the Acknowledgement Letter in Report 56-1)
PART III
ACKNOWLEDGEMENT OF THE CORRECTNESS OF THE INFORMATION
1.
Acknowledgement of the correctness of the information by the Executive Directors and
I have reviewed the information in this Annual Registration Statements with due care in a
capacity as an Executive Director or Chief Accounting Officer of the Company and hereby
certify that said information is accurate or complete, not untrue, misleading or missing such
material information that otherwise should inform. In addition, I hereby certify that
(1)
(2)
(3)
The financial statements and financial information as summarized in the Annual Registration
Statements are complete and accurate and represent material information regarding
financial position, operating results and cash flow of the Company and its subsidiary;
I am responsible for arranging for the Company to have a good information disclosure
system to ensure that the Company has disclosed material information of both the
Company and its subsidiary in a complete and accurate manner and for ensuring
compliance with the said system;
I am responsible for arranging for the Company to have a good internal controls
system and for ensuring compliance with the said system, and I have already
informed the auditor and the Audit Committee of the Company the information with
respect to an evaluation of an internal controls system as of 17th February 2004
which covers such defect and major changes of the internal controls system,
including wrongful acts that may affect the preparation of financial reports of the
Company and its subsidiary.
To witness that all documents that I have certified are those same set of documents, I have authorized
Dr. Pishnu Suntharanund, Mr. Thanit Vinijsorn and Mrs. Rangsinee Sujaritsunchai to initial every page of
those documents. In case any of those documents does not have the initial signature of Dr. Pishnu
Suntharanund, Mr. Thanit Vinijsorn and Mrs. Rangsinee Sujaritsunchai, it will be deemed that I have not
certified the information contained in such document.
Correct Certification of Disclosed Information
145
Name
Title
1. Mr. Supachai Chearavanont
2. Mr. Vichaow
Director, President and
Signature
………………………
Rakphongphairoj Director, Managing Director ………………………
and Chief Operating Officer
3. Mr. Chatchaval Jiaravanon
Director and Managing Director ………………………
Group Investment
4. Mr. Athueck
Vice Chairman,
………………………
Group General Counsel and
Acting Company Secretary
Asvanund
………………………
Dr. Pishnu Suntharanund
Director
Treasurer
………………………
Mr. Thanit Vinijsorn
Deputy Director,
Head of Accounting
………………………
Mrs. Rangsinee Sujaritsunchai
Deputy Company Secretary ………………………
5. Mr.William E. Harris
Authorized Person
146
2.
Acknowledgement of the correctness of the information by the Non-Executive Directors
I have reviewed the information in this Annual Registration Statements with due care in my
capacity as a Non-Executive Director of the Company and I have no reason to suspect that
said information is inaccurate or incomplete, is untrue or misleading or missing such material
information that otherwise should inform.
To witness that all documents that I have reviewed are those same set of documents which I
have reviewed and have no reason to suspect that said information is inaccurate or
incomplete, is untrue or misleading or missing such material information that otherwise should
inform, I have authorized Dr. Pishnu Suntharanund, Mr. Thanit Vinijsorn and Mrs. Rangsinee
Sujaritsunchai to initial every page of those documents. In case any of those documents does
not have the initial signature of Dr. Pishnu Suntharanund, Mr. Thanit Vinijsorn and Mrs.
Rangsinee Sujaritsunchai, it will be deemed that I have not reviewed the information contained
in such document.
Name
Title
Signature
………………………
Director
Treasurer
………………………
Deputy Director,
Head of Accounting
………………………
Mr. Narong Srisa-an
Authorized Person
147
2.
in such document.
Name
Mr. Vitthya
Title
Vejjajiva
Signature
………………...…………
Authorized Person
Director
Treasurer
………………………
Deputy Director,
Head of Accounting
………………………
148
2.
in such document.
Name
Dr. Kosol
Title
Petchsuwan
Signature
………………………
Authorized Person
Director
Treasurer
………………………
Deputy Director,
Head of Accounting
………………………
149
2.
in such document.
Name
Mr. Joti Bhokavanij
Title
Signature
Independent Director and …………………………
Authorized Person
Director
Treasurer
………………………
Deputy Director,
Head of Accounting
………………………
Deputy Company Secretary
………………………
150
2.
in such document.
Name
Title
Signature
Chairman
………………………
Director
Treasurer
………………………
Deputy Director,
Head of Accounting
………………………
………………………
Mr. Dhanin
Chearavanont
Authorized Person
151
2.
in such document.
Name
Title
Signature
Vice Chairman
………………………
Director
Treasurer
………………………
Deputy Director,
Head of Accounting
………………………
Mr. Sumet Jiaravanon
Authorized Person
152
2.
in such document.
Name
Dr. Ajva Taulananda
Title
Vice Chairman
Signature
………………………
Authorized Person
Director
Treasurer
………………………
Deputy Director,
Head of Accounting
………………………
………………………
153
2.
in such document.
Name
Title
Signature
Vice Chairman
………………………
Director
Treasurer
………………………
Deputy Director,
Head of Accounting
………………………
………………………
Mr. Chaleo
Souvannakitti
Authorized Person
154
2.
in such document.
Name
Title
Signature
Director
………………………
Director
Treasurer
………………………
Deputy Director,
Head of Accounting
………………………
Mr. Soopakij Chearavanont
Authorized Person
155
2.
in such document.
Name
Title
Signature
Director
………………………
Director
Treasurer
………………………
Deputy Director,
Head of Accounting
………………………
………………………
Authorized Person
156
2.
in such document.
Name
Title
Signature
Director
………………………
Director
Treasurer
………………………
Deputy Director,
Head of Accounting
………………………
………………………
Mr. Heinrich
Heims
Authorized Person
157
2.
in such document.
Name
Title
Signature
Director
………………………
Director
Treasurer
………………………
Deputy Director,
Head of Accounting
………………………
Mr. Klaus
Tuengeler
Authorized Person
158
2.
in such document.
Name
Title
Signature
Director
………………………
Director
Treasurer
………………………
Deputy Director,
Head of Accounting
………………………
Mr. Claus Stadler
Authorized Person
159
2.
in such document.
Name
Title
Signature
Director
………………………
Director
Treasurer
………………………
Deputy Director,
Head of Accounting
………………………
Mr. Andreas Klocke
Authorized Person
160
2.
in such document.
Name
Title
Signature
Director
………………………
Director
Treasurer
………………………
Deputy Director,
Head of Accounting
………………………
Mr. Harald Link
Authorized Person
161
2.
in such document.
Name
Title
Signature
Director
………………………
Director
Treasurer
………………………
Deputy Director,
Head of Accounting
………………………
Dr. Lee G. Lam
Authorized Person
162

(Translation of the Acknowledgement Letter in Report 56

Transcription

Similar documents

Nana review Tsubohachi Nihonmachi

AVS24 2.4 GHZ Wireless Audio/Video Sender

FOL-1-FORMA 2 - Service Alberta

Project Description: In 2008 Hoyne Savings Bank realized that their

HEMINEVRIN - Alcohol and Alcoholism

No trophy could ever fully express our

Chaise Lounge

Hawaiian Party

A golden opportunity to A golden opportunity to

In2m pr1 - Home of Kelly McNulty