DTac 2020 AGM ENG.indd - SET

Invitation to the 2020

Annual General Meeting of Shareholders

Total Access Communication Public Company Limited

Tuesday, 31 March 2020, at 1.00 p.m. (Bangkok time),

The Grand Ballroom, 4th Floor,

InterContinental Bangkok,

No. 973 Ploenchit Road, Lumpini Subdistrict, Pathumwan District,

Bangkok 10330, Thailand

Table of Content

Page

Invitation to the 2020 Annual General Meeting of Shareholders 1-8

Documents accompanying Agenda

Copy of the Minutes of the 2019 Annual General Meeting of Shareholders held on 4 April 2019

(Enclosure1) 9-38

The Annual Report 2019 and Sustainability Report 2019, together with the Audited Consolidated Financial Statements (including the separate financial statements) of the Company for the year ended 31 December 2019

(Enclosure 2) please see via barcode

Profiles of candidates nominated for election as directors of the Company

(Enclosure 3) 39-42

Documents accompanying the Meeting

Notification of Meeting (please bring this document to the Meeting)

(Enclosure 4) please see separate document

Registration documents, registration and meeting processes, and voting procedures and vote counting

(Enclosure 5) 43-46

Proxy Form B

(Enclosure 6) 47-50

Profiles of independent directors to serve as proxy and qualifications of independent directors

(Enclosure 7) 51-52

Articles of Association of the Company concerning shareholders’ meeting

(Enclosure 8) 53-54

Map of the meeting location

(Enclosure 9) 55

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Sensitivity: Internal

No. IR 11/2563

9 March 2020

Subject: Invitation to the 2020 Annual General Meeting of Shareholders

To: Shareholders of Total Access Communication Public Company Limited

Enclosures: Documents accompanying Agenda 1. Copy of the Minutes of the 2019 Annual General Meeting of Shareholders held on

4 April 2019 (Document accompanying Agenda Item 1)2. The Annual Report 2019 and Sustainability Report 2019, together with the Audited

Consolidated Financial Statements (including the separate financial statements) ofthe Company for the financial year ended 31 December 2019 (Documentaccompanying Agenda Items 2 and 3)

3. Profiles of candidates nominated for election as directors of the Company(Document accompanying Agenda Item 5)

Documents accompanying the Meeting 4. Notification of Meeting (Please see the separate document)5. Registration documents, registration and meeting processes, and voting procedures

and vote counting6. Proxy Form B (Shareholders can download Proxy Form C from the Company’s website

at https://investor.dtac.co.th/en/documents/shareholders-meeting?year=2020 underthe heading “Shareholder Information”, select “The Annual General Meeting of theShareholders for the Year 2020”)

7. Profiles of independent directors to serve as proxy of the shareholders andqualifications of independent directors

8. Articles of Association of the Company concerning shareholders’ meeting9. Map of the meeting location

The Board of Directors of Total Access Communication Public Company Limited (the “Company”) would like to invite you to attend the 2020 Annual General Meeting of Shareholders (the “Meeting”) on Tuesday, 31 March 2020 at 1.00 p.m. at the Grand Ballroom, 4th Floor, InterContinental Bangkok, No. 973 Ploenchit Road, Lumpini Subdistrict, Pathumwan District, Bangkok, 10330 Thailand, to consider the following agenda:

Agenda Item 1 Adoption of the Minutes of the 2019 Annual General Meeting of Shareholders held on 4 April 2019

Opinion of the Board of Directors: Shareholders are recommended to adopt the Minutes of the 2019 Annual General Meeting of Shareholders, held on 4 April 2019 at 1.00 p.m., which the Board of Directors has considered to be properly recorded. A copy of the Minutes of the 2019 Annual General Meeting of Shareholders is set out in Enclosure 1.

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Agenda Item 2 Acknowledgement of the Annual Report on the business operation of the Company for 2019

Opinion of the Board of Directors: Shareholders are recommended to acknowledge the business operations of the Company for 2019 as set forth in the Annual Report 2019 and the Sustainability Report 2019 in Enclosure 2.

Agenda Item 3 Approval of the Audited Consolidated Financial Statements of the Company and its subsidiaries for the financial year ended 31 December 2019

Opinion of the Board of Directors: Shareholders are recommended to approve the Audited Consolidated Financial Statements (including the separate financial statements) of the Company and its subsidiaries for the year ended 31 December 2019. A copy of the Audited Consolidated Financial Statements (including the separate financial statements) of the Company and its subsidiaries is included in page 132-224 in the 2019 Annual Report of the Company (Enclosure 2). A key summary of the same in comparison with the previous year is as follows:

Consolidated Financial Statements

Items THB

2018 2019

Total assets 150,957,655,013 167,338,816,149 Total liabilities 129,027,976,385 142,372,404,015 Shareholder’s equity 21,929,678,628 24,966,412,134 Total revenue from sales and services 75,289,665,295 81,167,136,402 Profit attributable to Equity holders of the Company (4,368,692,047) 5,421,893,006 Earnings per share - attributable to Equity holders of the Company

(1.85) 2.29

Agenda Item 4 Approval of annual dividend payments for 2019 and acknowledgement of the interim dividend payment

The dividend payment policy of the Company is to pay no less than 50 percent of its net profits based on the separate financial statements of the Company (after deduction of all legal reserves), depending on its financial position and future business plans. The Company aims to pay dividend on a semi-annual basis.

In 2019, the Company has net profits based on the separate financial statements of THB 9,065,172,576. The Company also withheld legal reserve at the amount of THB 453,646,244, in accordance with Section 116 of the Public Limited Companies Act B.E. 2535 (as amended) which states that the company shall allocate not less than 5% of its annual net profit, less the accumulated losses brought forward (if any), to a reserve fund until this fund attains an amount not less than 10% of the registered capital.

The Company deemed it appropriate to propose the annual dividend payment to its shareholders at the rate of THB 1.61 per share, payment to 2,367,811,000 shares, totaling THB 3,812,175,710. Together with the interim dividend declared and paid earlier at the rate of THB 1.26 per share, the total dividend payment for financial year 2019 will be THB 6,795,617,570, which is equivalent to 75 percent of the Company’s seperate net profit, in line with the Company’s dividend policy. At consolidated level, the total dividend payout for 2019 will be equivalent to 125% of consolidated net profit.

Opinion of the Board of Directors: Shareholders are recommended to approve the annual dividend payment of the Company for 2019 at the rate of THB 1.61 per share (subject to any applicable

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withholding tax), totaling 2,367,811,000 shares, totaling THB 3,812,175,710 to be paid from the retained earnings of the Company that were offset by the net loss brought forward for the periods not exceeding 5 accounting periods. The dividend payout ratio is in line with the dividend policy specified by the Company. Individual shareholder cannot be entitled to a tax credit pursuant to Section 47 bis of the Revenue Code.

The Company will make the annual dividend payment to shareholders whose names appear on the list of shareholders of the Company as at the Record Date on 12 February 2020. The annual dividend will be paid on 24 April 2020.

Please note that the right to receive the annual dividend payment remains uncertain unless and until it is approved by the shareholders at this 2020 Annual General Meeting of Shareholders.

In addition, shareholders are further recommended to acknowledge the interim dividend payment that was made once in 2019. Such interim dividend payment was paid on 9 August 2019 from the operational results for the period starting from 1 January 2019 to 30 June 2019 at the rate of THB 1.26 per share (subject to applicable withholding tax), totaling THB 2,983,441,860, pursuant to the resolution of the Board of Directors adopted at the Board of Directors’ Meeting No. 6/2019 held on 15 July 2019.

The table below sets out a comparison of dividend payments made from the operational results of the Company in 2018 and 2019.

Items 2018 2019 Separate net profit (million THB) 1,483 9,065 Separate earnings per share (THB) 0.63 3.83 Dividend per share (THB) 1.01 2.87 - Interim dividend 1.01 1.26 - Annual dividend - 1.61 Total dividend (million THB) 2,391 6,796* Pay-out ratio including interim dividend 161% 75%

Remark *Upon obtaining the approval of the shareholders at this 2020 Annual General Meeting of Shareholders.

Agenda 5 Approval of the re-election of directors in place of the retired directors

Under Article 20 of the Articles of Association of the Company, one-third of the directors must retire by rotation at every annual general meeting. Currently, the Company has a total of 10 directors. Therefore, 4 directors are retiring this year, the names of which are as follows:

1. Mr. Boonchai Bencharongkul Chair of the Board of Directors

2. Mr. Petter Boerre Furberg Vice Chair of the Board of Directors

3. Mrs. Pratana Mongkolkul Independent Director, Member of the Audit Committee, Member of the Nomination Committee, and Member of the Remuneration Committee

4. Mr. Sverre Pedersen Director

The Company announced on the Company’s website ( www.dtac.co.th ) during the period from 3 October 2019 to 15 January 2020 in order to invite the shareholders to nominate qualified persons to be elected as directors according to the criteria of the Company. The Company also invited the shareholders by an announcement through the electronics channel of the Stock Exchange of Thailand. The Company hereby informs that no shareholders nominated any candidates for election as directors of the Company.

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The Nomination Committee considered the structure of the Board of Directors taking into account the appropriate number of the directors as well as the qualifications of the directors, expertise, and experience suitable for the Company’s business. In this regard, the person, who is nominated to be the independent director of the Company, is capable of expressing her opinion independently in accordance with the relevant regulations. The Nomination Committee has considered the matter and recommended the re-election of the aforementioned directors who are due to retire by rotation to be the directors of the Company for the same positions for another term of office.

Opinion of the Board of Directors: The Board of Directors (without the interested directors), carefully and cautiously evaluated or considered to ensure that the proposed candidates are qualified for the business operation of the Company and also considered the recommendation of the Nomination Committee, taking into consideration the appropriateness and the best interests of the Company, and was of the view that the aforementioned directors who are due to retire by rotation, have all the qualifications and do not possess any prohibited characteristics prescribed by law. They are qualified, knowledgeable, competent, and have a clear vision and extensive experience in various businesses, including telecommunications, which is beneficial to the business operations of the Company. In this regard, the person, who is nominated to be the independent director of the Company, is capable of expressing her opinion independently in accordance with the relevant regulations. Shareholders are recommended to re-elect the aforementioned directors who are due to retire by rotation to be the directors of the Company for the same positions for another term of office. This is in accordance with the criteria on nomination of directors of the Company, details of which appear on page 100 of the Annual Report.

Profiles of candidates nominated for election as directors of the Company are set out in Enclosure 3. The qualifications of independent directors of the Company, which are higher than the minimum requirements of the Office of the Securities and Exchange Commission and the Stock Exchange of Thailand, are set out in Enclosure 7.

Agenda Item 6 Approval of the remuneration of directors for 2020

The policy of the Company is that the remuneration structure of directors of the Company be reviewed every 3 years, with the adjustment to the remuneration amounts being considered every year, by taking into account various factors such as the current economic situation, the Company’s business operation, the market and industry norms, the duties and responsibilities of directors and the highly complex rules and regulations of the telecommunications business, etc.

Given that the remuneration of directors of the Company was adjusted at the past 2017 Annual General Meeting of Shareholders, in this regard, the Remuneration Committee studied and compared the remuneration of directors of the Company with those of other telecommunication companies, including listed companies in Thailand, and in the Region, and considered the obtained information together with the increased roles and responsibilities of directors along with various factors. The Remuneration Committee has considered and is of opinion to maintain the remuneration structure of directors of the Company but increase the monthly fee of Audit Committee by 20% from last year.

The proposed remuneration of directors of the Company for 2020 will be an amount not exceeding THB 13,972,800 which is 2.95% higher than the total remuneration of directors approved by Annual General Meeting of Shareholders 2019 which was not exceeding THB 13,572,000.

The Company does not have any other form of director’s remuneration.

The table below sets out a comparison between the proposed remuneration structure of directors and the previous year.

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2019 2020

Monthly Fee Meeting Allowance

(None)

Monthly Fee Meeting Allowance

(None) Board of Directors Chair THB 320,000 – THB 320,000 – Independent Directors THB 110,000 – THB 110,000 – Audit Committee Chair THB 67,000 – THB 80,400 – Independent Directors THB 50,000 – THB 60,000 – Remuneration Committee Chair THB 34,000 – THB 34,000 – Independent Directors THB 17,000 – THB 17,000 – Nomination Committee Chair THB 34,000 – THB 34,000 – Independent Directors THB 17,000 – THB 17,000 – Corporate Governance Committee Chair THB 34,000 – THB 34,000 – Independent Directors THB 17,000 – THB 17,000 –

Remark: * Other directors do not receive any director remuneration.

The resolution of this Agenda requires the vote of not less than two-thirds of the total votes of shareholders attending the Meeting.

Opinion of the Board of Directors: The Board of Directors, with the recommendation of the Remuneration Committee, has considered the matter, taking into consideration the appropriateness vs. directors’ duties, scope of roles and responsibilities, the reasonableness, and performance of the directors, including the type of business and proposed business expansion of the Company and the remunerations of directors of other companies engaging in the same industry or having a comparable size, and recommended that shareholders approve the remuneration of directors of the Company for 2020 in the amount not exceeding THB 13,972,800 which is 2.95% higher than the remuneration of directors of the Company for 2019.

Agenda Item 7 Approval of the appointment of auditors of the Company and fixing their remuneration for 2020

Opinion of the Board of Directors: Article 45 of the Company’s Articles of Association states that “The Annual General Meeting shall appoint an auditor. In appointing the auditor, such meeting may re-appoint the same auditor.”

Article 46 of the Company’s Articles of Association states that “The auditor’s remuneration shall be fixed by the shareholders’ meeting.”

Article 47 of the Company’s Articles of Association states that “The Company’s directors, staffs, employees or any persons, holding any position in the Company, shall not be appointed to be the Company’s auditor.”

The Board of Directors, with the recommendation of the Audit Committee, has considered the work of the auditors of EY Office Limited (the “EY Office”) in 2019 to be satisfactory. In addition, the auditors are knowledgeable and have a sophisticated understanding of the telecommunication business as well as experience and expertise in auditing telecommunication companies. The EY office is also the auditor for most of the Company’s subsidiaries.

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Therefore, the Board of Directors recommends that the shareholders approve the followings:

1. ) Appoint either one of the following auditors of the EY Office to be the auditor of the Company forthe financial year ended on 31 December 2020:

1. Mrs. Gingkarn Atsawarangsalit (1) Certified Public Accountant No. 4496

2. Ms. Sirirat Sricharoensup Certified Public Accountant No. 5419

3. Ms. Rungnapa Lertsuwankul Certified Public Accountant No. 3516

4. Ms. Pimjai Manitkajohnkit (2) Certified Public Accountant No. 4521

Remark: (1) Mrs. Gingkarn Atsawangsalit was the auditor responsible for auditing and expressing opinions on the financial

statements of the Company for the years 2019, 2018, 2017, 2016, 2012, 2011 and 2010.(2) Ms. Pimjai Manitkajohnkit was the auditor responsible for auditing and expressing opinions on the financial

statements of the Company for the year 2015.

The aforementioned individuals are not directors, staffs, or employees of the Company, nor do they hold any position in the Company, which is in line with Article 47 of the Articles of Association of the Company. In addition, the proposed auditors and the EY Office do not have any relationship with or interest in the Company, including its subsidiaries, management, major shareholders, or any of its related persons, which may affect the independent performance of the EY Office and auditors. There is no auditor whose total years of performance as auditor exceed the maximum period stipulated by the relevant notification.

2.) If the aforementioned auditors are unable to perform their duties, the EY Office may procure another auditor to audit and express opinions on the financial statements of the Company in place of the aforementioned auditors. Such auditor shall perform its duties according to the Articles of Association of the Company.

3.) Shareholders should approve the auditing fee for the year 2020 in the amount not exceeding THB 4,000,000 (excluding VAT) which consists of the annual auditing and quarterly reviews of the financial statements. The proposed auditing fee is less than the amount in 2019 (THB 4,170,000). Furthermore, for the year 2019, the non-audit fee, which was not relevant to the auditing work, amounted to THB 2,416,407.

Agenda Item 8 Other matters (if any)

Information for Shareholders

(1) The Record Date on which the Company relied to determine the names of shareholders who havethe right to attend the Annual General Meeting of Shareholders 2020 was on 12 February 2020, inaccordance with Section 89/26 of the Securities and Exchange Act B.E. 2535 (1992).

(2) The Company invited shareholders to propose matters, which they deem necessary, to be includedas an agenda of the the 2020 Annual General Meeting of Shareholders, or to nominate candidatesqualified for election as the directors of the Comopany. Interested shareholders may propose an agendaor nominate candidates at least 3 months prior to the Annual General Meeting of Shareholders inaccordance with the good governance principles of the Stock Exchange of Thailand, which was from 3October 2019 to 15 January 2020. Proposals and nominations by the shareholders must be inaccordance with the regulation stipulated in the Company’s website ( www.dtac.co.th ). Moreover, theCompany also posted such invitation in the Stock Exchange of Thailand’s electronics channel. However, the

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Company did not receive any proposals or nominations in accordance with the Company’s regulation from shareholders.

(3 ) Shareholders who require a hard copy of the Annual Report 2019 and the Sustainability Report 2019 may obtain a copy at the reception counter of the Company, Rama 4 Rd., which is situated at Ground Floor, Chamchuri Square Building, No. 319, Phayathai Road, Pathumwan Sub-district, Pathumwan District, Bangkok 10330, Thailand, Tel. +66 2202 8106 from Monday 23 March 2020 onwards or at the venue of the Meeting.

(4) All shareholders are entitled to vote on the matters in Agenda Item 1 to 7. The resolutions of AgendaItem 1 to 7 ( except for Agenda Item 6, which requires the vote of not less than two-thirds of the totalvotes of the shareholders attending the Meeting) require a simple majority vote of the shareholdersattending the Meeting and are entitled to vote.

(5 ) The Company shall apply the barcode system for registration and vote counting at the Annual General Meeting of Shareholders 2020 in order to expedite the registration and vote counting process and make certain that registration of the Meeting is in order and in line with the law. The Company shall also invite a representative from a law firm to examine that the voting process and the Meeting is transparent and in accordance with the law and the Articles of Association of the Company, including the good governance principle, in order to comply with the shareholders’ meeting requirements of the Office of Securities and Exchange Commission.

Attendance in person Please complete, present and submit the Notification of Meeting (Enclosure 4) including other registration documents (as specified in Enclosure 5) to the registration official on the date of the Meeting from 11.00 a.m. onwards or register in advance as stated in clause (6) below.

Attendance by proxy Please complete, present and submit the Notification of Meeting (Enclosure 4) together with the registration documents (as specified in Enclosure 5), and Proxy Form B (Enclosure 6) or Proxy Form C (which can be downloaded from the Company’s website https://investor.dtac.co.th/en/documents/shareholders-meeting?year=2020 select “The Annual General Meeting of the Shareholders for the Year 2020”) to the registration official on the date of the Meeting from 11.00 a.m. onwards.

In this regard, shareholders may appoint any person to act as their proxy or may appoint either one of the following independent directors of the Company: Mrs. Chananyarak Phetcharat, or Mrs. Kamonwan Wipulakorn, or Mrs. Pratana Mongkolkul, as their proxy. The appointed independent director shall vote in each agenda as stated by the shareholder in the Proxy Form. Profiles of the independent directors are set out in Enclosure 7.

(6) Advance registration for the 2020 Annual General Meeting of Shareholders. In addition to registeringon the date of the Meeting pursuant to clause (5) above, shareholders, who attend in person or byproxy, may register in advance by submitting the aforementioned documents to the Company by 5.00p.m. on Thursday 26 March 2020 at :

Total Access Communication Public Company Limited Company Secretary Department 39th Floor, Chamchuri Square Building No. 319 Phayathai Road, Pathumwan Sub-district, Pathumwan District, Bangkok 10330, Thailand

Shareholders may download the Invitation to the 2020 Annual General Meeting of Shareholders including the relevant meeting documents and Proxy Forms at the Company’s website https://investor.dtac.co.th/en/documents/shareholders-meeting?year=2020 (select “The Annual General

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Meeting of the Shareholders for the Year 2020”). Any questions or comments concerning the agenda of the Meeting may be sent to the Company in advance of the Meeting via e-mail: [email protected]. In order for the 2020 Annual General Meeting of Shareholders to proceed smoothly, the Company would like to invite shareholders to register for the Meeting on the date of the Meeting from 11.00 a.m. onwards or register in advance as stated above.

Please attend the meeting on the date, time, and venue accordingly.

Yours faithfully,

Mr. Boonchai Bencharongkul

Chair of the Board of Directors

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(Translation)

Minutes of the 2019 Annual General Meeting of Shareholders

of


The 2019 Annual General Meeting of Shareholders (the “Meeting”) was held on Thursday, 4 April 2019 at Athenee Crystal Hall 3rd Floor, the Athenee Hotel, a Luxury Collection Hotel, Bangkok, No. 61 Wireless Road, Lumphini Sub-District, Pathumwan District, Bangkok 10330, Thailand.

The Meeting started at 13:00 hrs.

Mr. Boonchai Bencharongkul, Chair of the Board of Directors, presided as the Chair of the Meeting. The following directors, managements, auditors, and legal advisors of the Company were present at the Meeting:

Directors in attendance:

1. Mr. Boonchai Bencharongkul Chair of the Board of Directors

2. Mrs. Kamonwan Wipulakorn Independent Director, Chair of the Audit Committee, Member of the Remuneration Committee, and Member of the Corporate Governance Committee

3. Mr. Stephen Woodruff Fordham Independent Director, Chair of the Nomination Committee, Member of the Audit Committee, and Member of the Corporate Governance Committee

4. Mr. Gunnar Johan Bertelsen Director, Member of the Corporate Governance Committee, Member of the Nomination Committee, and Member of the Remuneration Committee

5. Mrs. Alexandra Reich Director and Chief Executive Officer

6. Mrs. Chananyarak Phetcharat Independent Director, Chair of the Corporate Governance Committee, Member of the Nomination Committee, and Member of the Remuneration Committee

7. Mr. Haakon Bruaset Kjoel Director, Member of the Corporate Governance Committee, Member of the Nomination Committee, and Member of the Remuneration Committee

8. Mrs. Tone Ripel Director

Directors absent:

1. Mr. Petter-Boerre Furberg Vice Chair of the Board of Directors

2. Mr. Sverre Pedersen Director

lation)

Enclosure 1 Document accompanying Agenda Item 1

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3. Mr. Chulchit Bunyaketu Independent Director, Chair of the Remuneration Committee, Member of the Audit Committee, and Member of the Nomination Committee

There were eight directors attending the Meeting out of the total of 11 directors, equivalent to 73 percent of the total number of directors.

Executives in attendance:

1. Mr. Prathet Tankuranun Chief Technology Officer

2. Mr. Rajiv Bawa Chief Corporate Affairs and Business Development Officer

3. Mr. Dilip Pal Chief Financial Officer

4. Ms. Tipayarat Kaewsringarm Chief Sales Officer

5. Ms. Nardrerdee Arj-Harnwongse Chief People Officer

6. Mr. Narupon Rattanasamaham Senior Vice President, Head of Regulatory Division

7. Mr. Raweepun Pitakchatiwong Senior Vice President, Head of General Counsel Division and Company Secretary

8. Ms. Chatsuda Santanond Senior Vice President, Head of Customer Value Management Division

9. Mr. Thibaut Loup Simon Girard Senior Vice President, Head of Strategy & Innovation Division

10. Mr. Navin Saraf Senior Vice President, Head of Finance Operation Division

11. Ms. Peeraya Rodkorn Vice President, Head of Financial Accounting and Reporting Department

12. Mr. Praphan Chivaphongse Vice President, Head of Sustainability Department

13. Mr. Chavit Sangudomlert Vice President, Head of Investor Relations Unit

14. Mr. Wutinon Trisrisak Vice President, Head of Tax Strategy Department

15. Mr. Kiti Wichitsawangwong Vice President, Head of Internal Audit Department

Auditor:

Mrs. Gingkarn Atsawarangsalit EY Office Limited

Legal Advisor:

Mrs. Veeranuch Thammavaranucupt Weerawong, Chinnavat & Partners Limited

Legal and Tax Advisor:

1. Mr. Somboon Weerawutiwong PricewaterhouseCoopers Limited

2. Mr. Kumpanat Chonsawad PricewaterhouseCoopers Limited

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Independent Financial Advisor:

1. Mr. Pitak Kittiakrasatien Silom Advisory Company Limited

2. Mr. Thonsakul Prajukjit Silom Advisory Company Limited

3. Mr. Aphisan Ongthawekiat Silom Advisory Company Limited

Company Advisor:

Mr. Teeranai Phukiat Advisor

The Company Secretary informed the Meeting that there were a total of 2,195 shareholders attending the Meeting in person and by proxy, holding 1,983,485,383 shares in aggregate, representing 83.7687 percent of the total issued shares of the Company. A quorum was thus constituted in accordance with the Articles of Association of the Company.

During the Meeting, there were an additional 430 shareholders attending the Meeting in person and by proxy, resulting in the total shareholders attending the Meeting of 2,625, holding 1,998,370,720 shares in aggregate, equivalent to 84.3974 percent of the total issued shares of the Company.

Mr. Boonchai Bencharongkul, Chair of the Board of Directors, who presided as the Chair of the Meeting (the “Chair”) declared the 2019 Annual General Meeting of Shareholders duly convened. On behalf of the Company, the Chair expressed his appreciation to the shareholders for their dedication to participate in the Meeting, and informed the overall information of the Company that the Company provides its customers the telecommunications service on the 1800 MHz and 850 MHz spectrums under the concession agreement with CAT Telecom Public Company Limited or CAT Telecom which was made since the year 1990 (the “Concession Agreement”), whereby the agreement was expired on 15 September 2018. However, in mid-2018, the National Broadcasting and Telecommunications Commission (“NBTC”) held the auctions for the 1800 MHz and 900 MHz spectrums in which the Company participated and was the winning bidder. Therefore, currently, the Company is now providing the services to its customers on three spectrums, i.e., 1800 MHz, 900 MHz, and 2100 MHz. In addition, with the collaboration with TOT Public Company Limited (“TOT”), the Company also provides the roaming service on the 2300 MHz spectrum. All of this demonstrates the intention of the Company to provide its telecommunications services to the public continuously.

The Chair requested the Company Secretary to explain the steps and procedures of the Meeting.

The Company Secretary informed the Meeting that the Company had invited the shareholders to propose matters which they considered necessary for inclusion in the agenda of the 2019 Annual General Meeting of Shareholders, as well as to nominate candidates for election as directors, and send questions relating to the agenda items in advance of the Meeting between 1 October 2018 and 31 December 2018. No shareholders proposed any agenda items or nominated any candidates for election as directors, and no questions relating to the agenda items were sent in advance of the Meeting.

In addition, the Public Limited Companies Act B.E. 2535 (1992) (including any amendment thereto) provides that when casting a vote, each share shall carry one vote. Voting shall be carried out by a show of hands, unless at least five shareholders request otherwise, and the Meeting resolves that voting be carried out in secret, in which case voting then may be carried out in secret. There were at least five shareholders who made such a request. The Meeting therefore resolved that the voting of shareholders shall be carried out in secret by way of writing votes on ballots for each agenda item. No shareholders objected to the secret method of voting. It was then concluded that the Meeting approved the secret method of voting by way of writing votes on ballots for every agenda item.

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The Company Secretary explained the voting procedure for each agenda item to the Meeting as follows:

To cast a vote, one share shall carry one vote.

A shareholder may cast his or her vote to either approve, disapprove, or abstain from voting.

For the convenience of the shareholders, the Company has arranged for a barcode system to be used to count the votes, which aims to expedite the vote computation process. For the purpose of casting votes on each agenda item, only shareholders who disapprove or abstain from voting shall enter their votes and sign their names on the ballots and hand in the same to the Company’s staff to count the votes. The shareholders who approve the agenda item are not required to enter their votes on the ballots (except for Agenda Item 8 regarding the re-election of directors in place of the retired directors).

To count the votes (except for Agenda Item 8), only ballots of the shareholders who disapprove or abstain from voting will be collected. Disapproved, abstained, and invalid votes will be deducted from the total votes of the shareholders who attend the Meeting and are entitled to vote.

For Agenda Item 8 regarding the re-election of directors in place of the retired directors, all shareholders shall enter their votes regardless of whether or not they approve, disapprove, or abstain from voting and sign their names on the ballots and hand in the same to the Company’s staff to count the votes. The shareholders who do not hand in their ballots will be deemed to have abstained from voting.

To pass a resolution, a simple majority vote of the shareholders who attend the Meeting and are entitled to vote is required, unless otherwise specified by law. That is to say, Agenda Item 4, Agenda Item 11, Agenda Item 12, and Agenda Item 13 shall be passed by the votes of not less than three-quarters of the total votes of the shareholders attending the Meeting and entitled to vote. Agenda Item 9 shall be passed by the votes of not less than two-thirds of the total votes of the shareholders attending the Meeting.

In addition, to ensure the transparency of the Meeting and in accordance with the best practices for annual general meetings, the Chair invited the legal advisor from Weerawong, Chinnavat & Partners Limited to oversee the Meeting to ensure that the Meeting complied with the legal requirements and the Articles of Association of the Company, and two shareholders to witness the vote counting. Furthermore, the Company also arranged for a video recording to be taken of the Meeting, which the shareholders would be able to view on the Company’s website after the Meeting.

Before the commencement of consideration of agenda items, the Company Secretary asked if the shareholders had any questions relating to the voting rules and procedure.

No shareholders asked any questions or expressed any opinions.

The Chair then asked the Meeting to consider the following agenda items:

Agenda Item 1: Adoption of the Minutes of the Extraordinary General Meeting of Shareholders No. 1/2018 held on 11 December 2018

The Company Secretary informed the Meeting that the Company had prepared the Minutes of the Extraordinary General Meeting of Shareholders No. 1/2018, held on 11 December 2018. The Board of Directors had considered and deemed them as properly recorded in accordance with the resolutions of the Meeting. The Company Secretary then proposed that the Meeting consider and adopt the Minutes of the Extraordinary General Meeting of Shareholders No. 1/2018, copies of which were sent to all shareholders together with the notice of this Meeting.

The Chair, then, gave the shareholders an opportunity to ask questions and express their opinions.

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The Chair proposed that the Meeting consider and adopt the Minutes of the Extraordinary General Meeting of Shareholders No. 1/2018, held on 11 December 2018.

The Meeting considered and voted as follows:

Approved: 1,984,990,143 votes, equivalent to approximately 99.9999 percent of the total votes of the shareholders attending the Meeting and entitled to vote.

Disapproved: 0 votes, equivalent to approximately 0.0000 percent of the total votes of the shareholders attending the Meeting and entitled to vote.

Abstained: 200 votes, equivalent to approximately 0.0000 percent of the total votes of the shareholders attending the Meeting and entitled to vote.

Invalid Ballots: 0 votes, equivalent to approximately 0.0000 percent of the total votes of the shareholders attending the Meeting and entitled to vote.

Resolution: The Meeting resolved, by a majority vote of the shareholders attending the Meeting and entitled to vote, to adopt the Minutes of the Extraordinary General Meeting of Shareholders No. 1/2018.

Agenda Item 2: Approval of Dispute Settlement with CAT Telecom Public Company Limited

The Company Secretary asked Mr. Teeranai Phukiat, Advisor, to inform the Meeting of the summarized details with regard to this agenda item as follows:

The Company has entered into the Agreement to Operate and Provide Cellular System Radio Telecommunication Service, dated 14 November 1990 with CAT Telecom Public Company Limited (“CAT Telecom”), whereby such agreement was expired on 15 September 2018. For the concession period of 27 years, as there were changes to the relevant laws, and rules and regulations, as well as developments in the telecommunications business, issues have subsequently arisen concerning the inconsistency of the interpretation and implementation of the Concession Agreement which has led to a number of disputes.

For the past four to five years, the Board of Directors and executives of the Company have negotiated with CAT Telecom to solve such issues in order to settle all such current and pending disputes, as well as avoid any disputes which may potentially occur under or relating to the Concession Agreement in the future. In this regard, the Company and dtac TriNet Company Limited entered into the settlement agreement on 10 January 2019 (the “Dispute Settlement Agreement”). The subject matters in the Dispute Settlement Agreement comprise three major issues which are as follows:

1. Lawsuits and disputes regarding the additional remuneration or implementation under theConcession Agreement;

2. Disputes under the legal proceedings; and

3. Other issues not previously raised by the party, regardless of whether or not the party wasaware of the cause or their rights of claim on the date of the Dispute Settlement Agreement.

Nevertheless, the disputes which are not under the scope of the Dispute Settlement Agreement are the dispute on payments of additional considerations (excise tax) under the Concession Agreement and the dispute on the calculation of additional revenue from the interconnection charges.

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The Company agreed to pay CAT Telecom the considerations with respect to the settlement of disputes amounting THB 9,510,246,120.62 (exclusive of value added tax), and on the settlement date (the date on which the shareholders meeting resolves to approve this transaction), CAT Telecom agreed to pay the Company the considerations with respect to the interconnection charges amounting THB 460,246,120.62 (exclusive of value added tax). After setting off such amounts, the Company is required to pay CAT Telecom the net consideration for the settlement of disputes amounting THB 9,050,000,000 (exclusive of value added tax). In this regard, the Company will divide the considerations to be paid into two instalments, i.e., the first instalment shall be paid after this Agenda Item 2 is approved by the Meeting, and the second instalment shall be paid after the Administrative Court issues an order permitting the withdrawal of disputes, whereby the second instalment shall be divided by virtue of the Administrative Court’s order as specified under the agreement.

The financial impacts on the Company arising out of the settlement of disputes include the Company being required to record the additional expense amounting approximately THB 8,000 million to the fourth quarter financial statement, resulting in negative retained earnings in the separated financial statements of the Company; the Company will also not be able to make dividend payment from its operating results of the year 2018 to its shareholders. However, the Company will make up such negative retained earnings by using the legal reserve and ordinary share premiums, the details of which will be proposed to the Meeting in the following agenda items. In this regard, the sources of funds for the payment of considerations will be obtained from the cash on hand of the Company, cash flow from operations, and/or current loans secured from financial institutions, which will result in an increase in the debt-to-equity ratio of the Company. Nevertheless, the ratio would still be in accordance with the agreement which the Company made with the financial institutions.

In addition, for the past year, the Company was able to settle the disputes with respect to the telecommunications towers by transferring the telecommunications towers to CAT Telecom, and using them at a reasonable fee.

Furthermore, after due consideration, the Board of Directors deemed it appropriate to propose that the Meeting consider and approve the authorization of the Chief Executive Officer or the person delegated by the Chief Executive Officer to undertake any act relevant to the Dispute Settlement Agreement, including to negotiate, amend, execute, and sign the documents, agreements, and petitions in connection with the Dispute Settlement Agreement, and/or for the purposes of the settlement under the Dispute Settlement Agreement, as well as to undertake any necessary and relevant act for the completion of the settlement under the Dispute Settlement Agreement.


Question: Mr. Chokboon Jitpradupsilp, a shareholder, asked what the debt-to-equity would be after the Meeting approves this agenda item.

Answer: Mr. Chavit Sangudomlert, Vice President, Head of Investor Relations Unit, clarified that, generally, the debt-to-EBITDA ratio will be taken into account when the Company negotiates with a financial institution. The debt-to-equity ratio as at the end of 2018 was 12.5 times. With respect to the capital, the amount includes the paid-up capital of approximately THB 4,700 million and share premiums of approximately THB 7,000 million. In addition, under the consolidated financial statements, the accumulated loss was approximately THB 9,000 million which was due to the expenses incurred from the settlement of disputes with CAT Telecom as previously informed to the Meeting. In this regard, if the Company generates profits this year, the debt-to-equity ratio would be improved.

Question: Mr. Suriyon Jitrapan, a proxy, asked: (1) whether or not the Company negotiated with CAT Telecom regarding the telecommunications towers under dispute, and he would

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like for the Company to clarify the advantages and disadvantages for this agenda item being approved or disapproved by the Meeting; (2) after the Company incurs debts with respect to the payment of considerations for the settlement of disputes, would it be possible for the Company to make dividend payment to the shareholders, and, if not, for how long will the Company be unable to make dividend payment to the shareholders; and (3) in the case where this agenda item is not approved by the Meeting, would the Company be able to include the telecommunications towers under dispute in the infrastructure fund.

Answer: Mr. Boonchai Bencharongkul, Chair of the Board of Directors, clarified questions (1) and (3) that the assets which have been built by the Company under the Concession Agreement are under the BTO (Build-Transfer-Operate) condition, i.e., after the assets are built, the Company is required to transfer the ownership thereof to CAT Telecom, whereby at present, the Company has transferred the telecommunications towers to CAT Telecom.

Mr. Dilip Pal, Chief Financial Officer, additionally provided clarifications on questions (1) and (2) that if this agenda item is approved by the Meeting, the Company will incur accumulated loss in the financial statement for the year 2018. However, in the following agenda items, the Company will propose that the Meeting consider and approve the application of legal reserve and ordinary share premiums to offset the retained loss recorded in the separated financial statements of the Company in order to improve the results for 2019 and for the Company to be able to distribute dividends to its shareholders if there are profits derived from the operation in accordance with the Company’s policy.

Question: Mr. Somchai Jensathirapan, a shareholder, asked what the result would be if the Company does not settle the disputes and continue defending the lawsuit.

Answer: Mr. Raweepun Pitakchatiwong, Company Secretary, clarified that at present the Company has several ongoing litigation cases with CAT Telecom. The preliminary estimation of damages which were brought up by CAT Telecom and specified under the Annual Report is at least THB 23,000 million in principal, exclusive of interest. The figure cannot be determined for certainty if the interest is included, resulting in more risk for the Company. In addition, the Company and CAT Telecom are also engaged in several disputes relating to the interpretation of the Concession Agreement which may lead to future litigation, and the Company is unable to predict the outcomes of the court decisions. As such, the Company may be at risk of being the losing party in the cases and, in such case, would be liable to damage. However, if the Meeting had approved this settlement of dispute, the Company shall not incur risks of paying the principal and interest as described above, the disputes relating to the interpretation of the Concession Agreement shall be settled, and CAT Telecom will not bring up the issue under the Concession Agreement against the Company. The entering into the Dispute Settlement Agreement is, however, the option of the shareholders.

Mr. Boonchai Bencharongkul, Chair of the Board of Directors, additionally clarified that it will be favourable for the Company to settle the dispute with CAT Telecom, since the telecommunications industry requires dependence between the public and private sectors, and any disputes among one another should be settled.

No other shareholders asked any questions or expressed any opinions.

The Chair proposed that the Meeting consider and approve the settlement of disputes with CAT Telecom.

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Approved: 1,893,372,978 votes, equivalent to approximately 95.2111 percent of the total votes of the shareholders attending the Meeting and entitled to vote, without counting the votes of the interested shareholders.

Disapproved: 95,218,537 votes, equivalent to approximately 4.7882 percent of the total votes of the shareholders attending the Meeting and entitled to vote, without counting the votes of the interested shareholders.

Abstained: 12,450 votes, equivalent to approximately 0.0006 percent of the total votes of the shareholders attending the Meeting and entitled to vote, without counting the votes of the interested shareholders.

Invalid Ballots: 500 votes, equivalent to approximately 0.0000 percent of the total votes of the shareholders attending the Meeting and entitled to vote, without counting the votes of the interested shareholders.

Resolution: The Meeting resolved, by a majority vote of the shareholders attending the Meeting and entitled to vote, to approve the settlement of disputes with CAT Telecom and the implementation in accordance with the Dispute Settlement Agreement including the payment of the considerations with respect to the settlement of disputes to CAT Telecom in accordance with the Dispute Settlement Agreement, and the authorization of the Chief Executive Officer or the person delegated by the Chief Executive Officer to undertake any act for the purposes of the Dispute Settlement Agreement in order to settle all such current and pending disputes, and disputes which may have arisen out of or relating to the Concession Agreement in the future, with the exception of certain disputes which are not under the scope of the Dispute Settlement Agreement.

Agenda Item 3: Acknowledgement of the Annual Report on the business operation of the Company for the year 2018

The Company Secretary informed the Meeting that the Company had prepared the Board of Directors’ report on the business operation of the Company in 2018, as detailed in the 2018 Annual Report and the 2018 Sustainability Report, copies of which were sent to all shareholders together with the notice of this Meeting.

The Chair invited Mrs. Alexandra Reich, Director and Chief Executive Officer, to present an overview and the business operation of the Company in 2018 to the Meeting with Ms. Tipayarat Kaewsringarm, Chief Sales Officer, acting as the translator. The presentation can be summarized as follows:

The year 2018 was the year in which the concession agreement for the 850 MHz and 1800 MHZ spectrum bands expired (on 15 September 2018). The Company was granted protection by the order of the Administrative Court to continue providing services on those spectrum bands until 15 December of the same year. After the expiration of the Concession Agreement and during the remedy period, the capital structure of the Company constituted a material change as follows:

1. The cost of license fees and other charges was decreased by 4 percent of the revenues from services;

2. The rental fee paid to CAT Telecom for the lease of assets under the Concession Agreement was approximately THB 3,300 million per year;

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3. The roaming service fee on 2300 MHz spectrum band paid to TOT was approximately THB4,500 million per year;

4. The amortization of the right to use assets under the Concession Agreement was decreasedby approximately THB 4,000 million per quarter;

5. The amortization of the license to use 1800 MHz and 900 MHz spectrum bands wasapproximately THB 33,000 million per year.

The Company has invested in laying foundations for the future growth. In this regard, the Company has procured the spectrum demanded in addition to the 2100 MHz spectrum, which the Company currently has i.e. the 2300 MHz spectrum, under the cooperation with TOT, including the 1800 MHz and the 900 MHz spectrums by means of auctions. In addition, the Company has executed the lease agreement under the concession agreement from CAT Telecom and created an additional network of more than 20,000 base stations on the 2300 MHz and the 2100 MHz spectrums, including the installation of signal poles called Massive MIMO, which are signal poles that are in use in areas with high information density.

In this regard, the Company places importance on the short-term implementation which comprises the following:

1. Continuous improvement of the network for the purpose of improving the user experience forthe customers;

2. Strengthening confidence in the Company’s brand;

3. Continuous promotion of innovation and enhancement of efficiency in the implementation.

The postpaid subscriber base of the Company saw a continuous growth, representing 29 percent of the total subscribers as at the end of 2018. The average revenue per number, exclusive of the interconnection charges, in 2018 increased by THB 244 per month, equivalent to 6 percent from the previous year due to the fact that the continuous switching of the subscriber bases from prepaid to postpaid. In this regard, the average revenue per number of the postpaid subscriber base is three times higher than the prepaid subscriber base. With respect to the prepaid customers, the Company was facing the challenge of handset subsidies at a high level. Nevertheless, various efforts has been spent to switch from the prepaid customers with high value to the postpaid subscribers on a regular basis.

In this regard, the revenue derived from sales of mobile telephones and interconnection charges of the Company decreased. In addition, the revenue derived from the service provision, exclusive of interconnection charges, decreased by 2.8 percent as a result of uncertainty arisen during the termination of the Concession Agreement, the introduction of Unlimited Package at a low price for the postpaid customers and Unlimited Package for each new sim card of the prepaid customers, and the arrangement for content provider access services (CPA) provision during the fourth quarter of the year 2018.

The Company’s EBITDA decreased due to a decrease in the revenue and change to the cost structure after the termination of the concession. The Company incurred a loss in the previous year due to the record of expenses in the dispute resolution under the Concession Agreement with CAT Telecom in the financial statement. However, the Company has a solid cash flow despite high investments in 2018.


Question: Mr. Sukrit Kuratchadchawan, a shareholder and proxy, inquired the Company, in 2019, of the trends of an increase in the revenue and the expansion of the subscriber bases for both prepaid and postpaid subscriber bases.

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Answer: Mrs. Alexandra Reich, Director and Chief Executive Officer, explained that, in this year, the Company will develop the network spectrum to bolster the customers’ confidence. In this regard, the Company arranged for its employees to drive to each part of Thailand in order to conduct drive tests of the network. It is found that the Company’s network speed is not less than that of other operators. However, reassuring the customers is a matter that takes time. In addition, the Company places importance on being a company with transparency and good corporate governance. In this regard, the Company has a strong postpaid subscriber base. Even though the Company has lost its market share with respect to the prepaid customers market, the Company is confident that the Company will certainly regain the customers to use the Company’s service.

Question: Mr. Suriyont Chitrapan, a proxy, asked the Company whether or not the number of customers using the postpaid and prepaid services decreased; what percentage the decrease accounted for; and why the Company’s revenue decreased significantly, and what percentage such decrease accounted for.

Answer: Mrs. Alexandra Reich, Director and Chief Executive Officer, explained that the increase in the expenses and decrease in the revenue is caused by two factors i.e. the expenses in the Concession Agreement and the revenue with respect to the CPA provision, which is the revenue derived from the subscribers to news, calling melody, text message services, etc. The decrease in the revenue derived from the CPA service is due to the fact that the Company wishes to charge the customers with the actual intent to use the service for the purpose of transparency and fairness for the customers. Since several customers informed the Company that they did not have any intent to subscribe to the services, the Company had to refund such customers.

Mr. Dilip Pal, Chief Financial Officer, further explained that the reasons for the decrease in the revenue in 2018, which are: firstly, the termination of the Concession Agreement, which caused uncertainty within the Company’s subscriber bases; secondly, the introduction of Unlimited Package at a low price and the reduction of the postpaid and the prepaid subscriber bases by the end of the previous year; and, thirdly, the service fee for the CPA provision. In this regard, one-third of the decrease in the revenue during the fourth quarter of the previous year was caused by an improvement and rectification of the CPA service fee. Taking into consideration the number of customers, it was found that the number of customers on the postpaid subscriber base has grown continuously, whereas the number of customers on the prepaid customer base has declined, resulting in the total number of customers in 2018 to be equivalent to 21.2 million. In this regard, the Company aims to develop the network in order to ensure a better user experience for the customers and to enhance the Company’s performance.

Mrs. Alexandra Reich, Director and Chief Executive Officer, further explained that, when taking into account the overall subscriber base, it is found that the foregoing base declines. However, as the prepaid subscriber base decreased by approximately 18.8 percent, the number of postpaid customers increased by approximately 7.7 percent due to the switching of prepaid subscribers, who have a high volume of service usage and have been using the Company’s services for a long time, to the postpaid subscribers, which, in turn, will increase the Company’s revenue. However, the Company has put in place giveaways or sales of mobile phones at a low price to encourage the switching. In this regard, such incentives shall be at the expense of the Company.

Mr. Dilip Pal, Chief Financial Officer, further explained that the decrease in the revenue in 2018 is caused by the switching of the prepaid subscriber base with a high value to

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the postpaid subscriber base, and by the decrease in the interconnection charge rate, equivalent to approximately THB 1,000 million of the decrease in the revenue.

Question: Mr. Somchai Jensatirapan, a shareholder, asked the Company how much the market share of the postpaid and the prepaid subscriber bases is and what the Company’s plan for the increase therein is.

Answer: Mrs. Alexandra Reich, Director and Chief Executive Officer, explained that the Company has the third highest market share of the postpaid subscriber base and the prepaid subscriber base. In this regard, the Company aims to reclaim the second rank, which will take time. However, the market share of the postpaid subscriber base has a chance to recover at a quicker pace, whereby the Company endeavours to seek what is the most appropriate and meets the demand of such subscriber base. With respect to the prepaid subscriber base, the Company is undertaking a market research campaign in order to understand the customers’ demand, and matching the value positioning with the demand of the customers in each region. In this regard, the campaign that has been commenced is the “Never Stop Caring Campaign”, in which the Company focuses and places importance on the services provided to the customers.

Question: Mr. Kitti Snidvongs na Ayudhya, a proxy, proposed to add more register points, seeing that there are a number of shareholders attending the Meeting and pending registration.

Answer: Mr. Raweepun Pitakchatiwong, Company Secretary, thanked the shareholder for the suggestion and informed that the Company will consider and improve accordingly.

Question: Mr. Prasert Tisayatikom, a proxy, informed the Company of the issue in using the Company’s mobile network in the vicinity of Bang Chak BTS Station and expressed his opinion that the product quality is important.

Answer: Mrs. Alexandra, Director and Chief Executive Officer, informed that the Company hereby apologizes and will troubleshoot accordingly without delay. In this regard, the Company is well aware that quality is important and will not cease in its development of its network quality to ensure a better user experience for the customers.

Question: Mr. Sira Pimanthip, a proxy, expressed his opinion that, in order to expedite the Meeting, the shareholders should ask only the questions which are relevant to each agenda item.


This agenda item was to report the business operation of the Company for the year 2018 to the Meeting, therefore, no voting was required.

Agenda Item 4: Ratification on the acquisition of 900 MHz spectrum license

The Chair asked Mr. Prathet Tankuranun, Chief Technology Officer, to inform the Meeting of the summarized details with regard to this agenda item as follows:

The expiry of the Concession Agreement between the Company and CAT Telecom, as well as the expiry of the protection from the Administrative Court with respect to the provision of service on the 850 MHz and 1800 MHz spectrum in 2018, results in the Company losing the low frequency spectrums that has an impact on the services to the customers. The Company, therefore, submitted its bid for the 900

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MHz spectrum which is in the same range as that of the 850 MHz spectrum with a view to achieve the following objectives:

1. To be able to provide the service in the low frequency spectrum to the customers on a continual basis;

2. To balance the possession of the low frequency spectrums and the high frequency spectrums in order that the Company will be able to provide the services to the customers on a continual basis because each spectrum will have different specifications;

3. The Company will have the rights to additional spectrums and will be able to provide more services due to the increases of its network capacity.

In this regard, dtac TriNet Company Limited, a subsidiary of the Company, participated in the auction for 900 MHz spectrum held by the NBTC on 28 October 2018 and won the 900 MHz spectrum license of one set at 2x5 MHz for THB 38,064 million and was granted the 900 MHz spectrum license on 16 December 2018 for the period of 15 years (which will expire in 2033). Accordingly, the Company is required to make payment for the license in four instalments as follows:

• First instalment of approximately THB 4,000 million, which was already paid within 90 days from the announcement of the auction results (12 December 2018);

• Second instalment of approximately THB 2,000 million;

• Third instalment of approximately THB 2,000 million

• Fourth instalment of approximately THB 30,000 million.

The reasons that the Company participated in the 900 MHz spectrum auction are as follows:

1. With respect to this 900 MHz spectrum auction, it is a condition that the winning bidder shall be able to use the existing 850 MHz spectrum until the system installation or replacement of equipment to accommodate the 900 MHz spectrum is completed, provided that such period shall be no longer than two years. Therefore, the operator will be able to provide the service continuously. Accordingly, the Company is of the view that the condition is fair to the Company.

2. If the Company does not participate in the auction, the Company will lose the low frequency spectrum which has better penetration and wide dispersion capabilities which will ultimately have an impact on the Company’s provision of its network service.

3. The right to use low frequency spectrum will save the Company the investment cost in expanding the network in the future: the lower frequency spectrum has a wider dispersion capability, therefore, the Company will be able to expand the service coverage to a wider area leading to a lower investment cost.

4. The lower frequency spectrum has a better penetration capability in penetrating walls or buildings, therefore, the Company’s network signal in the areas with high building density and high population density will be stronger.

5. The participation in the 900 MHz spectrum auction is an important step for the Company, signifying its commitment and promise to the customers that the Company will continue upgrading its service to the customers by continuously developing its network.


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Question: Mr. Kitti Snidvongs Na Ayudhya, a shareholder, asked: 1) which operators provide services on low frequency spectrums; and 2) whether or not there was any operator who provided the service on the 450 MHz spectrum.

Answer: Mr. Prathet Tankuranun, Chief Technology Officer, clarified that 1) every major operator provide service on low frequency spectrums; and 2) at present, no operator provides service on the 450 MHz spectrum.


The Chair proposed that the Meeting consider and approve the ratification on the acquisition of the 900 MHz spectrum license.



Disapproved: 1,000 votes, equivalent to approximately 0.0000 percent of the total votes of the shareholders attending the Meeting and entitled to vote.

Abstained: 2,710 votes, equivalent to approximately 0.0001 percent of the total votes of the shareholders attending the Meeting and entitled to vote.


Resolution: The Meeting resolved, by a vote of not less than three-quarters of the total votes of the shareholders attending the Meeting and entitled to vote, without counting the votes of the interested shareholders (there was no shareholder who is an interested party which not entitled to cast a vote in this agenda item) to ratify the acquisition of the 900 MHz spectrum license.

Agenda Item 5: Approval of the Audited Consolidated Financial Statements of the Company for the financial year ended 31 December 2018

The Chair invited Mr. Chavit Sangudomlert, Vice President, Head of Investor Relations Unit, to inform the Meeting of the agenda item.

Mr. Chavit Sangudomlert informed the Meeting that the Company had prepared the consolidated financial statements for the financial year ended 31 December 2018, which had been reviewed by a certified public accountant and approved by the Audit Committee and the Board of Directors, as detailed in the 2018 Annual Report, which was delivered together with the notice of this Meeting.

In 2018, the summary of the consolidated financial statements of the Company and its subsidiaries compared with those of the previous year is as follows:

The total assets amounted to approximately THB 151,000 million, an increase of 31.8 percent from that of the previous year.

The total liabilities amounted to approximately THB 129,000 million, an increase of approximately 51.3 percent from that of the previous year.

The shareholders’ equity amounted to approximately THB 22,000 million, a decrease of 25 percent from that of the previous year.

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The total revenue derived from sales and service provision amounted to approximately THB 75,000 million, a decrease of 4.2 percent from that of the previous year.

The net loss of shareholders’ equity amounted to approximately THB 4,400 million, and the net loss per share of THB 1.85 per share.


No shareholders asked any questions and/or expressed any opinions.

The Chair proposed that the Meeting consider and approve the audited consolidated financial statements (including the separated financial statements) which had been audited by the certified public accountant for the financial year ended 31 December 2018.






Resolution: The Meeting resolved, by a majority vote of the shareholders attending the Meeting and entitled to vote, to approve the audited consolidated financial statements (including the separated financial statements) which had been audited by the certified public accountant for the financial year ended 31 December 2018.

Agenda Item 6: Approval of no distribution of annual dividend for 2018 and acknowledgement of the interim dividend payment

The Chair asked Mr. Chavit Sangudomlert, Vice President, Head of Investor Relations Unit, to inform the Meeting of the summarized details with regard to this agenda item as follows:

Mr. Chavit Sangudomlert informed the Meeting that, currently, the Company has a policy to pay no less than 50 percent of its net profits based on the separated financial statements of the Company (after deduction of all legal reserves) depending on its financial position and future business plans. In this regard, the Company aims to pay dividend on a semi-annual basis.

Since the Company entered into the Dispute Settlement Agreement with CAT Telecom and in order to certify the performance of such Dispute Settlement Agreement, the Company has recorded the remuneration to settle the dispute in net amount in the Company’s statement of profit and loss, resulting in a retained loss of the separate financial statements for the financial year ended 31 December 2018, totalling THB 852 million.

The Board of Directors considered and deemed it appropriate to propose that the Meeting approve no distribution of annual dividend for the year 2018 under the Public Limited Companies Act B.E. 2535 (including any amendment thereto), and Article 43 of the Articles of Association, providing that no dividend payment shall be made if the Company sustains a retained loss.

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In addition, the shareholders should acknowledge the interim dividend payment for the year 2018, which has been made on 10 August 2018 from the operating results from 1 January 2018 to 30 June 2018 at the rate of THB 1.01 per share (before withholding tax deduction), totalling the dividend payment of THB 2,391 million, equivalent to 50 percent of the net profit according to the separated financial statements as at 30 June 2018 under the resolution of the Board of Directors at Board of Directors Meeting No. 6/2561, convened on 16 July 2018. In this regard, with respect to such interim dividend payment, the Board of Directors had considered the performance at the time and was of the view that the Company had generated sufficient profit for the interim dividend payment to be made.

The following table compares the dividend payment from the operating results for the year 2017 and 2018:

Item 2017 2018 Consolidated net profits (THB million) 2,115 (4,369) Earnings per share (THB) 0.89 (1.85) Total Dividend per share (THB) 0.24 1.01 - Interim Dividend - 1.01 - Annual dividend 0.24 - Total dividend paid (THB million) 568 2,391 Pay-out ratio including interim dividend 27% -

Remark: The Dispute Settlement Agreement with CAT Telecom impacted the net profit in the consolidated financial statements for the year ended 31 December 2018 as well as the Company’s separate financial statements.


Question: Mr. Sukrit Kuratchadchawan, a shareholder, asked the Company whether or not the Company will be able to offset the retained loss in 2018.

Answer: Mr. Chavit Sangudomlert, Vice President, Head of Investor Relations Unit, explained that the offset of the retained loss will be presented to the shareholders for consideration in Agenda Item 7.

No other shareholders asked any questions and/or expressed any opinions.

The Chair proposed that the Meeting consider and approve no distribution of annual dividend for the year 2018 and acknowledgement the interim dividend payment as proposed in all respects.




Abstained: 132,175,150 votes, equivalent to approximately 6.6377 percent of the total votes of the shareholders attending the Meeting and entitled to vote.

Invalid Ballots: 2,000 votes, equivalent to approximately 0.0001 percent of the total votes of the shareholders attending the Meeting and entitled to vote.

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Resolution: The Meeting resolved, by a majority vote of the shareholders attending the Meeting and entitled to vote, to approve no distribution of annual dividend for the year 2018 and acknowledgement the interim dividend payment, as proposed in all respects.

Agenda Item 7: Approval of the application of the Company’s legal reserve and premium on ordinary shares to offset the retained loss in the Company’s separate financial statements

The Chair asked Mr. Chavit Sangudomlert, Vice President, Head of Investor Relations Unit, to inform the Meeting of the summarized details with regard to this agenda item as follows:

Mr. Chavit Sangudomlert informed the Meeting that the Company sustained the retained loss of the Company’s separated financial statements for the year ended 31 December 2018 of THB 852 million. Section 119 of the Public Limited Companies Act B.E. 2535 (including any amendment thereto) provides that the Company may apply its legal reserve and premium on ordinary shares, respectively, to offset the retained loss of the Company.

After due consideration, the Board of Directors deemed it appropriate to propose that the Meeting approve the application of the Company’s legal reserve of THB 466 million and of premium on ordinary shares of THB 386 million to offset the retained loss in the Company’s separate financial statements. Following the offsetting process, the retained loss of the Company will be zero, which will enable the Company to resume its dividend payment should it have profit in the future.

The table below sets out details of the application of the legal reserve and premium on ordinary shares to offset the retained loss in the Company’s separate financial statements:

Item THB Retained loss as at 31 December 2018 852,060,346.00 Application of legal reserve to offset the retained loss - Other reserves 0 - Legal reserve (as at 31 December 2018, totalling THB 465,929,718) (THB 465,929,718.00) - Premium on ordinary shares (as at 31 December 2018, totalling THB

6,927,789,290)(THB 386,130,628.00)

Total 0.00


Question: Mr. Suriyont Jitrapan, a proxy, asked the Company whether the Company’s dividend payment refers to the consolidated financial statements or the separated financial statements; and informed the Company of the issue regarding the use of the Company’s network signal in the vicinity of Victory Monument BTS Station and Vibhavadi–Din Daeng area.

Answer: Mr. Chavit Sangudomlert, Vice President, Head of Investor Relations Unit, explained that the Company’s dividend payment refers to the separate financial statements.

Question: Mr. Prasert Tisayatikom, a shareholder, asked the Company of the advantage of the Company’s full offset of the retained loss of the separated financial statements; and of the reason for which the Company did not wait until it attains profits and then apply the profits to offset the loss.

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Answer: Mr. Chavit Sangudomlert, Vice President, Head of Investor Relations Unit, explained that the offset of the retained loss of the separated financial statements at an early date will allow the Company to make dividend payment to the shareholders if the Company generates profits from the operating results in 2019. If no offset of the retained loss is made, the Company shall offset the retained loss with the projected profits until profit is generated. In this regard, the dividend payment to be made to the shareholders will decrease.

Question: Mr. Anucha Ekarphaphan, a shareholder, asked from what were the premium on shares derived.

Answer: Mr. Chavit Sangudomlert, Vice President, Head of Investor Relations Unit, explained that the premium on shares were derived from the Company’s Initial Public Offering of the ordinary shares (IPO), and the sales of shares which were made at the price higher than the par value.

No other shareholders asked any questions and/or expressed any opinions.

The Chair proposed that the Meeting consider and approve the application of the Company’s legal reserve and premium on ordinary shares to offset the retained loss in the Company’s separated financial statements.



Disapproved: 36,716,481 votes, equivalent to approximately 1.8438 percent of the total votes of the shareholders attending the Meeting and entitled to vote.



Resolution: The Meeting resolved, by a majority vote of the shareholders attending the Meeting and entitled to vote, to approve the application of the Company’s legal reserve and premium on ordinary shares to offset the retained loss in the Company’s separated financial statements.

Agenda Item 8: Approval of the re-election of directors in place of the retired directors

In the interests of good corporate governance principles, the three directors who were due to retire by rotation and nominated to be re-elected left the meeting room until this agenda item is concluded. The Chair asked the Company Secretary to continue with the meeting.

The Company Secretary informed the Meeting that Article 20 of the Company’s Articles of Association provides that, at every annual general meeting, one-third of the directors shall vacate office. As there are a total of 11 directors of the Company, the four directors who were due to retire by rotation in this Meeting are:

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1. Mr. Haakon Bruaset Kjol Director, Member of the Nomination Committee, Member of the Remuneration Committee, and Member of the Corporate Governance Committee

2. Mr. Gunnar Johan Bertelsen Director, Member of the Nomination Committee, Member of the Remuneration Committee, and Member of the Corporate Governance Committee

3. Mrs. Tone Ripel Director

4. Mrs. Alexandra Reich Director and Chief Executive Officer

In this regard, Ms. Tanwadee Wongterarit, representative director of CAT Telecom, resigned from the directorship, with effect from 2 October 2018, following the expiry of the concession agreement between CAT Telecom and the Company. Mrs. Alexandra Reich, Director and Chief Executive Officer, expressed her intention not to be re-elected for another term; but would remain as the Chief Executive Officer of the Company. Therefore, there are two vacant director positions.

As there were no shareholders proposing any person to be re-elected as directors, according to the opinions of the Nomination Committee, the Board of Directors, taking into consideration the appropriateness and the best interests of the Company, was of the view that the aforementioned directors who are due to retire by rotation, have all the qualifications and do not possess any prohibited characteristics prescribed by law. They are qualified, knowledgeable, competent, and have a clear vision and extensive experience in the telecommunications business which is beneficial to the business operations of the Company and other business. Shareholders are recommended to re-elect three retired directors, namely 1. Mr. Haakon Bruaset Kjoel, 2. Mr. Gunnar Johan Bertelsen, and 3. Mrs. Tone Ripel, who are due to retire by rotation to be the directors of the Company for the same positions for another term of office. As a result, the Company’s board of directors will consist of 10 members. In this regard, the profiles of the persons nominated as the directors of the Company are set out in the Enclosure, of which copies were delivered to all shareholders along with the notice of this Meeting.

In considering the election of directors, the Chair proposed that the Meeting consider and approve the election of each director individually so that the shareholders would be able to exercise their discretion to thoroughly consider the qualifications of each director. In addition, for the purposes of transparency and concordance with the good corporate governance policy of the vote-casting in this agenda item, all shareholders, whether they are to approve, disapprove, or abstain from voting, are requested to cast their votes on the ballots and execute their names therein. The Company’s staff will collect the ballots from the shareholders once the shareholders have completed their vote casting.



The Chair proposed that the Meeting consider and approve the re-election of directors in place of retired directors as proposed.

The Meeting considered the matter and voted for the re-election of each director individually, as follows:

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Mr. Haakon Bruaset Kjol





Mr. Gunnar Johan Bertelsen





Mrs. Tone Ripel





Resolution: The Meeting resolved to approve the re-election of directors in place of retired directors, with the votes ranked from the highest as follows:

1. Mr. Gunnar Johan Bertelsen

2. Mrs. Tone Ripel

3. Mr. Haakon Bruaset Kjol

The three directors then returned to the meeting room.

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Agenda Item 9: Approval of the remuneration of directors for 2019

The Company Secretary informed the Meeting that this resolution on this agenda item shall be passed by votes of no less than two-thirds of the total votes of the shareholders attending the Meeting, and that the interested persons with respect to this agenda item, i.e., directors who are shareholders, will not cast votes in this agenda item, as well as that, in the case where the shareholders have appointed an independent director to cast vote on their behalf but have not specified how the votes should be cast, the independent director will abstain from voting in order to be in accordance with the good corporate governance principles.

The Board of Directors considered and was of the opinion that the Remuneration Committee had thoroughly considered the remuneration of directors and members of the sub-committees by taking into consideration its appropriateness in various aspects and benchmarking those in the same industry and listed companies, as well as the roles and responsibilities of the directors. The Board of Directors, therefore, deemed it appropriate to propose that the Meeting approve the remuneration of directors for the year 2019 in the amount of not exceeding THB 13,572,000, which is lower than the remuneration for the year 2018 because the representative director from CAT Telecom has resigned from the Board of Directors due to the termination of the Concession Agreement. The remuneration will be paid on a monthly basis in the amount as proposed by the Remuneration Committee.



The Chair proposed that the Meeting consider and approve the remuneration of directors for the year 2019 in the amount of not exceeding THB 13,572,000 as proposed by the Remuneration Committee.


Approved: 1,994,497,346 votes, equivalent to approximately 99.9972 percent of the total votes of the shareholders attending the Meeting.

Disapproved: 33,764 votes, equivalent to approximately 0.0016 percent of the total votes of the shareholders attending the Meeting.

Abstained: 20,010 votes, equivalent to approximately 0.0010 percent of the total votes of the shareholders attending the Meeting.

Invalid Ballots: 500 votes, equivalent to approximately 0.0000 percent of the total votes of the shareholders attending the Meeting.

Resolution: The Meeting resolved, by votes of not less than two-thirds of the total votes of the shareholders attending the Meeting, to approve the remuneration of directors for the year 2019, as proposed in all respects.

Agenda Item 10: Approval of the appointment of auditors of the Company and fixing their remuneration for 2019

The Company Secretary informed the Meeting that Article 45 of the Company’s Articles of Association provides that “The annual general meeting of shareholders shall appoint an auditor. In appointing the auditor, the current auditor may be re-appointed.”.

Article 46 of the Company’s Articles of Association provides that “The remuneration of auditors shall be fixed by the shareholders meeting.”

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Article 47 of the Company’s Articles of Association provides that “The Company’s directors, staffs, employees, or any persons holding any position in the Company, shall not be appointed as an auditor of the Company.”

As proposed by the Audit Committee, the Board of Directors has considered the performance in 2018 of the auditors from EY Office Limited. (“EY Office”) and deemed that it was satisfactory, and was of the view that the auditors were knowledgeable and had a sophisticated understanding of the telecommunications business, as well as having the necessary experience and expertise in auditing telecommunications companies. Moreover, EY Office was appointed as the auditor for most of the Company’s subsidiaries. Therefore, the Board of Directors deemed it appropriate to propose that the Meeting approve the following:

1) Appoint either one of the following auditors of the EY Office to be the auditor of the Company for the financial year ended on 31 December 2019:

1. Mrs. Gingkarn Atsawarangsalit, Certified Public Accountant No. 4496; or 2. Ms. Sirirat Sricharoensup, Certified Public Accountant No. 5419; or 3. Ms. Rungnapa Lertsuwankul, Certified Public Accountant No. 3516; or 4. Ms. Pimjai Manitkajohnkit, Certified Public Accountant No. 4521.

2) If the aforementioned auditors are unable to perform their duties, the EY Office may procure other auditors to audit and express opinions on the financial statements of the Company in place of the aforementioned auditors. Such auditor shall perform their duties according to the Articles of Association of the Company.

The Chair proposed that the Meeting consider and approve the remuneration of auditors for the year 2019 in the amount of not exceeding THB 4,170,000 (exclusive of value added tax), which comprises the fee for auditing the annual financial statements and reviewing the quarterly financial statements. The proposed audit fee was lower than that of the year 2018 (THB 5,295,000). Furthermore, for the year 2018, the non-audit fee, which was irrelevant to the auditing work, was recorded as the audit fee at THB 2,856,505.

The Company informed the Meeting that the aforementioned individuals are not directors, staff, or employees of the Company, nor do they hold any position in the Company, which is in line with Article 47 of the Articles of Association of the Company. In addition, the proposed auditors and the EY Office do not have any relationship with or interest in the Company, including its subsidiaries, management, major shareholders, or any of its related persons, which may affect the independent performance of the EY Office and auditors.


Question: Mr. Kraiwan Khatawanich, a shareholder, asked: (1) whether or not the shareholders are required to have the Board of Directors further approve the non-audit fee; (2) why was the amount of non-audit fee in 2018 is higher than half of the remuneration of auditors; and (3) what is the meaning of the non-audit fee which was specified that it was not related to the auditing works.

Answer: Mr. Chavit Sangudomlert, Vice President, Head of Investor Relations Unit, clarified that: (1) it is not necessary for the non-audit fee to be further approved by the shareholders of the Company; (2) this is because the Company was required to pay for the fee in preparing the report to the regulatory agency of the Company and other government agencies; and (3) the Company specified that the non-audit fee which is not related to the audit work was for the information for the shareholders and for transparency

30

purposes. In this regard, the non-audit fee, such as the reports required to be submitted to the government agencies, do not necessarily have to be carried out by the auditors.

Question: Ms. Suporn Pathumsuwanwadee, a shareholder, asked why the remuneration of auditors for the year 2019 decreased, and expressed her admiration to Mr. Boonchai Bencharongkul, Chair of the Board of Directors, and Mrs. Alexandra Reich, Director and Chief Executive Officer, as well as the advertising media of the Company.

Answer: Mr. Chavit Sangudomlert, Vice President, Head of Investor Relations Unit, clarified that the decrease was due to the expiration of the Concession Agreement, resulting in the complications and volume of the auditing works being reduced.

Question: Mr. Anucha Aek-arpapan, a shareholder, expressed his opinion that it is a good thing that the remuneration of auditors decreased. However, the Company should clearly disclose the information on the non-audit fee, for this part of expense was higher than half of the total amount of remuneration for the auditors.

Answer: Mrs. Gingkarn Atsawarangsalit, the auditor, clarified that the specified amount in the notice of this Meeting is the expense incurred with respect to the reviewing of the report, which is the Company’s duty as required by other agencies. If, therefore, in any year, the Company is required to prepare and submit the report to any agencies, there will be an incurrence of a non-audit fee. In this regard, as 2018 was the year in which the Concession Agreement expired, the Company thus had the duty to additionally submit the report to the NBTC, hence the additional expense on the non-audit fee was incurred.


The Chair proposed that the Meeting consider and approve the appointment of auditors of the Company and fixing the remuneration of auditors for the year 2019 in the amount of not exceeding THB 4,170,000 (exclusive of value added tax).






Resolution: The Meeting resolved, by a majority vote of the shareholders attending the Meeting and entitled to vote, to approve the appointment of auditors of the Company and fixing the remuneration of auditors, as proposed in all respects.

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Agenda Item 11: Approval of the Acquisition of the Entire Business of PaySbuy Company Limited

The Chair invited Mr. Wutinon Trisrisak, Head of Tax Strategy Department, to inform the Meeting of the agenda item.

Mr. Wutinon Trisrisak informed the Meeting that the Company aims at restructuring the Group Companies internally to increase efficiency and lower operating costs within the Group Companies by acquiring the entire business of PaySbuy Company Limited (“PaySbuy”), a subsidiary whose 99.99% of the registered capital is held by the Company. The entire business transfer is as detailed below:

PaySbuy engages in the business of the online sales of cash card and top-up card to the customers of dtac TriNet Company Limited, which is a subsidiary in which the Company is a major shareholder, holding 99.99 percent of the registered capital. In this regard, the Company expects that it will acquire the entire business of PaySbuy on 1 June 2019 by referring to the Net Book Value (NBV) as at the date of the business transfer at the market price under the conditions of the Revenue Department (31 May 2019). After the entire business transfer to the Company, PaySbuy will dissolve the company with the Ministry of Commerce.

In order to be exempted from taxes incurred out of such business transfer, the Company shall comply with the conditions for the “entire business transfer” as provided in the Revenue Code as follows:

1. The entire business of the transferor (PaySbuy) must be transferred to the transferee (the Company);

2. The transferor (PaySbuy) must dissolve the company with the Ministry of Commerce within 2019 (the same accounting period as that of the business transfer);

3. The transferee (the Company) must accept the entire transfer of assets and liabilities of the transferor (PaySbuy) at the price as set out in the transferor’s (PaySbuy) account on the date of the business transfer for the purpose of corporate income tax calculation by the transferee (the Company);

4. The transferee (the Company) and the transferor (PaySbuy) must submit correct and complete documents or forms under the conditions as provided in the Revenue Code with respect to the entire business transfer.

In this regard, the Company has engaged a relevant advisor to reassure the shareholders that the Company will be able to correctly and completely comply with the conditions as provided in the Revenue Code.

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The list of assets and liabilities of PaySbuy as at 31 December 2018 is as follows:

Description Net Book Value (NBV) (Unit : THB)

Transfer price (Unit : THB)

1. Cash 1,319,839,763

2. Accounts Receivables 1,802,895,975

3. Inventories 4,232,757

4. Current Assets 742,606 same as NBV 411,446,585 5. Fixed Assets 24,423,579

6. Deposit from Customers (832,963,053)

7. Accounts Payables (1,841,658,456)

8. Accrued Expenses (66,066,586)

Total 411,446,585

Remark: The values above may change as of 31 May 2019, which is the value to be referred to for the transfer.


Question: Mr. Sittichoke Boonvanich, a proxy, asked the Company whether or not, for this entire business transfer from PaySbuy, the lawsuits of PaySbuy be transferred to the Company.

Answer: Mr. Wutinon Trisrisak, Head of Tax Strategy Department, explained that the lawsuit to which PaySbuy currently has is mostly the one on which a final decision has been made and shall be finalized under the dissolution procedures of PaySbuy. In addition, lawsuit is an exclusive matter; therefore, no lawsuit shall be transferred to the Company.


The Chair proposed that the Meeting consider and approve the acquisition of the entire business from PaySbuy Company Limited






Resolution: The Meeting resolved, by a vote of not less than three-quarters of the total votes of the shareholders attending the Meeting and entitled to vote, to approve the acquisition of the entire business from PaySbuy Company Limited, as proposed in all respects.

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Agenda Item 12: Approval of the amendment of the Company’s objectives and the Memorandum of Association clause 3

The Chair asked Mr. Raweepun Pitakchatiwong, Company Secretary, to inform the Meeting of the summarized details with regard to this agenda item as follows:

The Company Secretary informed the Meeting that Board of Directors Meeting No. 2/2019, convened on 28 January 2019, resolved to approve the amendment of the Company’s objectives and Clause 3 of the Memorandum of Association to be in line with the acceptance of transfer of the entire business from PaySbuy Company Limited. The details of the amendment have been delivered to all shareholders along with the notice of this Meeting.

In addition, for the purposes of registration of the amendment of the Company’s objectives and Clause 3 of the Memorandum of Association which may be required revision of words or statements in the objectives and the Memorandum of Association or minutes of the shareholders’ meeting as instructed by or in accordance with the opinions of the registrar, Department of Business Development, Ministry of Commerce, or of the officer of other relevant agencies, it was deemed appropriate to authorize the Chief Executive Officer or the person delegated by the Chief Executive Officer to amend the words or statements in the documents and/or applications with respect to the filing of the registration of the amendment of the Company’s objectives and the Memorandum of Association with the Department of Business Development, Ministry of Commerce for the completion of the registration.



The Chair proposed that the Meeting consider and approve the amendment of the Company’s objectives and Clause 3 of the Memorandum of Association.






Resolution: The Meeting resolved, by a vote of not less than three-quarters of the total votes of the shareholders attending the Meeting and entitled to vote, to approve the amendment of the Company’s objectives and Clause 3 of the Memorandum of Association, and the authorisation of the Chief Executive Officer or the person delegated by the Chief Executive Officer to amend the words or statements in the documents and/or applications with respect to the filing of the registration of the amendment of the Company’s objectives and the Memorandum of Association with the Department of Business Development, Ministry of Commerce for the completion of the registration.

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Agenda Item 13: Approval of the amendment of Company’s Articles of Association

The Chair asked Mr. Raweepun Pitakchatiwong, Company Secretary, to inform the Meeting of the summarized details with regard to this agenda item as follows:

The Company Secretary informed the Meeting that Board of Directors Meeting No. 2/2019, convened on 28 January 2019, resolved to approve the amendment of the Company’s Articles of Association to be in line with Section 100 of the Public Limited Companies Act B.E. 2535 (1992), which is amended by virtue of the Orders of the Head of the National Council for Peace and Order No. 21/2560 and No. 74/2557 regarding meetings by means of electronic conferencing. The details of the amendment have been delivered to all shareholders along with the notice of this Meeting.

In addition, for the purposes of registration of the amendment of the Company’s Articles of Association, of which may be required revision of words or statements in the Articles of Association as instructed by or in accordance with the opinions of the registrar, Department of Business Development, Ministry of Commerce, or of the officer of other relevant agencies, it was deemed appropriate to authorize the Chief Executive Officer or the person delegated by the Chief Executive Officer to amend the words or statements in the documents and/or applications with respect to the filing of the registration of the amendment of the Company’s Articles of Association with the Department of Business Development, Ministry of Commerce for the completion of the registration.


Question: Mr. Sukrit Kuratchadchawan, a shareholder, asked if the Article to be amended is regarding the meetings held by means of teleconference, and if the shareholders are able to resolve on the conditions of the meetings.

Answer: Mr. Raweepun Pitakchatiwong, Company Secretary, clarified that the Articles to be amended in the Articles of Association are regarding the meetings by means of teleconference. In this regard, if the meetings are convened in accordance with the conditions prescribed under the Orders of the Head of the National Council for Peace and Order, such meetings are considered lawful. However, the Company has put in place a policy that encourages its directors to attend the meetings in person, with the exception in the case of necessity.

Question: Ms. Suporn Pathumsuwanwadee, a shareholder, suggested that the Company should improve the internet signal used in this meeting, for the images and audio transition of the video presented to the shareholders were not synchronized with each other.

Answer: Mr. Raweepun Pitakchatiwong, Company Secretary, informed the Meeting that the Company has acknowledged the suggestion and will take action to make further improvements on this matter.


The Chair proposed that the Meeting consider and approve the amendment of the Company’s Articles of Association.



Disapproved: 0 votes, equivalent to approximately 0.0000 percent of the total votes of the shareholders attending the Meeting and entitled to vote.

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Resolution: The Meeting resolved, by a vote of not less than three-quarters of the total votes of the shareholders attending the Meeting and entitled to vote, to approve the amendment of the Company’s Articles of Association, and the authorisation of the Chief Executive Officer or the person delegated by the Chief Executive Officer to amend the words or statements in the documents and/or applications with respect to the filing of the registration of the amendment of the Company’s Articles of Association with the Department of Business Development, Ministry of Commerce for the completion of the registration.

Agenda Item 14: Other Matters (if any)

Before the meeting was adjourned, the Chair gave the opportunity to the shareholders to ask any other questions or express opinions which, can be summarized as follows:

Question: Mr. Kitti Snidvongs Na Ayudhya, a shareholder, asked whether or not the Company would experience any difficulty or any impact from the uncertainty with respect to the forming of the new government in Thailand.

Answer: Mr. Raweepun Pitakchatiwong, Company Secretary, clarified that the Company had the duty to comply with the conditions specified in the operating license and perform the obligations in the agreements in which it had entered, all of which were irrelevant to the government.

Mr. Boonchai Bencharongkul, Chair of the Board of Directors, further clarified that the Company did not in any way experience any difficulties or any impact from the uncertainty with respect to the forming of the new government in Thailand.

Question: Mr. Sitthichok Boonwanit, a shareholder, asked 1) whether or not the Company would negotiate with other operators with respect to the frequencies for providing the service on the 5G network and how the frequencies were allocated; 2) informed the Company of the problem in using the network and suggested that the Company should improve the signal; 3) considering that the service fee of the Company was higher than that of other operators, what approaches the Company would apply in its business operations in order that the Company would be able to compete with other operators; and 4) suggested that the Company should choose its presenter that meets the current market demand.

Answer: Mr. Prathet Tankuranun, Chief Technology Officer, clarified that 1) at present, the Company had been working closely with the NBTC, that is, the Company was cooperating with TOT and the NBTC in conducting the test of 5G service. Currently, there were three standard frequencies for the provision of the service: 700 MHz spectrum, 2500 MHz spectrum, and 2600 - 2800 MHz spectrum. In this regard, the test would be conducted on the 2600 - 2800 MHz spectrum. With respect to the allocation of frequencies, the Company would be required to work closely with the NBTC on a continual basis. In order to acquire the right to use frequencies, it is clearly provided by law that only the operator who wins the auction shall obtain the right to use the frequency. Accordingly, the Company has followed up in terms of any development of

36

any auction condition to be imposed by the NBTC; and 2) apologized for the problem in using the network of the Company and advised the shareholder that the Company had put in place a responsible unit where the shareholder might be in a position to provide advice any problems or complaints regarding the difficulties in using the network.

Ms. Tipayarat Kaewsringarm, Chief Sales Officer, clarified that 3) and 4) the Company would appoint the Chief Marketing Officer to be responsible for the sales and service functions of the Company. Nevertheless, the Company was confident that, at present, the Company offered the lowest prices of mobile phones in the market and offered the most competitive sales promotion campaign(s). In addition, the Company would consider choosing the presenter that meets the market demand.

Question: Mr. Kraiwal Kadavanich, a shareholder, informed the Meeting of the problems in using the network signal and the DTAC Call application and suggested that the Company should use the USSD system instead of the slider for switching on and switching off the DTAC Call application because, if the user was in an area with no internet service, such user would not be able to use this application.

Answer: Mr. Prathet Tankuranun, Chief Technology Officer, clarified that the Company has duly noted of the problem, would rectify the problem in using the network signal, and would take the suggestion of the shareholder on the DTAC Call application into consideration.

Question: Ms. Yanaseth Waranonsuthee, a shareholder, suggested that 1) the Company should consider rolling over unused minutes of users’ monthly packages to the following month; and 2) the Company should consider giving additional privileges for the Blue Members for it was often the case that the privileges would be used up. Therefore, the entitlement for privileges should be separated for the Gold Members and the Blue Members.

Answer: Mrs. Alexandra Reich, Director and Chief Executive Officer, clarified that with respect to 1) the Company would accept the suggestion for consideration and the Company would be committed to launch effective sales promotion campaigns and would pay special attention to customer services; and with respect to 2) the Company would accept the suggestion for consideration and would develop more attractive sales promotion campaigns.

Question: Ms. Suporn Pathumsuwanwadee, a shareholder, gave an opinion on the conditions for the prepaid service and asked whether or not the directors who would be re-appointed were present in the Meeting and asked the directors to present themselves. The shareholder also gave an opinion that, in order to reduce the invalid ballots, the ballots should be checked more and the shareholder should be instructed to correct the ballots. However, the shareholder was aware that it was difficult to train the officers on this procedure. In addition, the Company should consider limiting the provision snacks to the shareholders and proxies attending the Meeting in order to save costs so that the Company would be able to pay dividend to the shareholders.

Answer: Mr. Boonchai Bencharongkul, Chair of the Board of Directors, thanked the shareholder for the suggestion and clarified that the directors who would be re-appointed were present in the meeting.

The directors who were re-appointed stood up to present themselves to the Meeting.

Question: Mr. Kraiwal Kadavanich, a shareholder, suggested that in granting privileges to the Blue Members, the Company should switch the cutting off date for privileges from

37

Fridays to Mondays and the Company should also negotiate with shopping retailers in giving special prices to the customers during the off-peak period in order that the customers would be able to use the privileges above during the end of a week.

Answer: Mr. Boonchai Bencharongkul, Chair of the Board of Directors, thanked the shareholder for the suggestion.

Question: Mr. Siraphop Paphatthananan, a shareholder, 1) asked the Company to clarify what the Company meant by “Fight Back” in the business operations; and 2) asked the Company to clarify what Mrs. Alexandra Reich, Director and Chief Executive Officer, meant when she said that the Company would gain the second largest market share.

Answer: Mrs. Alexandra Reich, Director and Chief Executive Officer, clarified that 1) to “Fight Back” meant making the Company gain a larger market share. In this regard, firstly, the Company would focus on developing the network and would provide benefits that meet the customers’ demand; and 2) the Company would try to gain more of the market share, that is, to achieve the goal in gaining the second largest market share.

Question: Mr. Suriyont Chitraphan, a proxy, 1) asked how the Company planned to deal with the increase in the doubtful debt 2) suggested that the Company should upgrade its application to be the main point of sale of the Company; and 3) informed the Company of the problems relating to the service of the employees at the payment counters that the employees did not possess particularly good customer service skills and suggested that the Company should develop the customer service skills of the employees.

Answer: Mr. Chavit Sangudomlert, Vice President, Head of Investor Relations Unit, clarified that 1) the doubtful debt of the Company in 2018 decreased from that of 2017 byapproximately THB 150 million.

Mr. Dilip Pal, Chief Financial Officer, further clarified that 1) the Company had endeavoured to solve its doubtful debt on a regular basis.

Ms. Tipayarat Kaewsringarm, Chief Sales Officer, thanked the shareholder for the suggestion in 2) and further clarified that the Company would continue to upgrade the application and its provision of services.


The Chair thanked the shareholders for spending their time in attending the Meeting and expressing their opinions, all of which would be in the interests of the Company and then declared the Meeting adjourned.

The Meeting was adjourned at 17:00 hrs.

Signed -signature- Chair of the Meeting

(Mr. Boonchai Bencharongkul) Chair of the Board

Signed -signature-

(Mr. Raweepun Pitakchatiwong) Company Secretary / Minutes Taker

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Profiles of candidates nominated for election as directors of the Company (information as of 31 December 2019)

Name Mr. Boonchai Bencharongkul

Nationality Thai

Age 65 years

Education - Honorary Doctoral Degree in Economic Science, Background

Ramkhamhaeng University, Thailand

- B.Sc. in Management, Northern Illinois University, USA

IOD training Role of the Chairman Program (11/2005)

Proposed type of directorship Chair of the Board of Directors

Years of directorship 29 Years 2 Months

(Appointed since 29 October 1990)

Meeting attendance in 2019 Board of Directors’ Meetings: 10 of 10 times

Shareholding interests in the Company 10 shares (0.00%)

Shareholding interests in the Company by spouse and minor children None (0.00%)

Positions in other SET listed companies None

Positions in non-SET listed companies 2 companies

Positions in companies having conflict of interest Chairman of the Board of Directors, Benchachinda Holding Co., Ltd. (Holding Company) Chairman of the Board of Directors, Private Property Co., Ltd. (Renting of self-owned or leased of residential buildings) Work experience Year Position Company 2012 – Present Director BCH Holding Co., Ltd.

1998 – Present Chairman of the Foundation Ruam Duay Chuay Kan Sam Nuek Rak Ban

Kerd Foundation

1990 – Present Chair of the Board of Directors Total Access Communication PLC.

1990 – Present Chairman of the Board of Directors Benchachinda Holding Co., Ltd.

1989 – Present Chairman of the Board of Directors Private Property Co., Ltd.

2002 – 2015 Director United Distribution Business Co., Ltd.

2002 – 2005 Chief Executive Officer and President United Communication Industry PLC.

2001 – 2006 Chairman of the Foundation Hornbill Research Foundation

2001 – 2002 Chief Executive Officer Total Access Communication PLC.

2000 – 2001 Managing Director Total Access Communication PLC.

1984 – 1999 Chairman of the Executive Committee United Communication Industry PLC.

Enclosure 3 Document accompanying Agenda Item 5

39

Name Mr. Petter-Boerre Furberg , Nationality Norwegian

Age 52 years

Education - Certified European Financial Analyst, Norwegian School of

Economics (NHH) AFA / CEFA, Norway

- Siviløkonom 4 year program in Economics and Business

Administration, Norwegian School of Economics (NHH)

IOD training None

Proposed type of directorship Vice Chair of the Board of Directors

Years of directorship 2 Years 5 Months

(Appointed since 13 July 2017)

Meeting attendance in 2019 Board of Directors’ Meetings: 5 of 10 times (via electronics 2 times)

Shareholding interests in the Company None (0.00%)

Shareholding interests in the Company by spouse and minor children None (0.00%)

Positions in other SET listed companies None

Positions in non-SET listed companies 2 Companies

Positions in companies having conflict of interest Chief Executive Officer, Telenor Norway AS (Telecommunication) Chairman of the Board of Directors, Grameenphone Ltd. (Telecommunication) Work experience Year Position Company 2017 – Present Vice Chair of the Board of Directors Total Access Communication PLC.

2019 – Present Chief Executive Officer Telenor Norway AS

2017 – Present Chairman of the Board of Directors Grameenphone Ltd.

2017 – 2019 Head of Emerging Asia Cluster Telenor ASA

2017 – 2019 Chairman of the Board of Directors Telenor Myanmar Ltd.

2017 – 2019 Chairman of the Board of Directors Telenor Pakistan Ltd.

2017 – 2019 Chairman of the Board of Directors Telenor Microfinance Bank, Pakistan

2017 – 2019 Director Telenor Health

2015 – 2019 Chairman of the Board of Directors Digital Money Myanmar Limited, Myanmar

2016 – 2017 Chief Executive Officer Grameenphone Ltd.

2016 – 2016 Head of Digital Services Division Telenor ASA

2016 – 2016 Senior Vice President Digital Business Telenor

2013 – 2016 Chief Executive Officer Telenor Myanmar Ltd.

2012 – 2013 Chief Financial Officer Total Access Communication PLC.

2010 – 2012 Chief Commercial Officer Total Access Communication PLC.

40

Name Mr. Sverre Pedersen

Nationality Norwegian

Age 56 years

Education M.Sc.E.E. Norwegian Institute of Technology (NTNU)

MBA Norwegian School of Management (BI)

IOD training None

Proposed type of directorship Director

Years of directorship 2 years 1 month

(Appointed since 8 December

2017)

Meeting attendance in 2019 Board of Directors’ Meetings: 8 of 10 times

(via electronics 5 times)

Shareholding interests in the Company None (0.00%)

Shareholding interests in the Company by spouse and minor children None (0.00%) Positions in other SET listed companies None

Positions in non-SET listed companies 2 companies

Positions in companies having conflict of interest Director, Canal Digital AS (Telecommunication)

Senior Vice President, Head of Strategy, Telenor Group (Telecommunication) Work experience Year Position Company 2017 - Present Director Total Access Communication PLC.

2018 - Present Director Canal Digital AS

2017 - Present Senior Vice President, Head of Strategy Telenor Group

2018 - 2019 Director Telenor Broadcast Holding AS

2016 - 2017 Director TeleAssets Company Limited

2015 - 2017 Chief Financial Officer Total Access Communication PLC.

2015 - 2017 Director DTAC Broadband Co., Ltd.

2015 - 2017 Director PaySbuy Co., Ltd.

2015 Senior Vice President, Strategic Finance Total Access Communication PLC.

2011 - 2015 Director M&A Telenor Group

2007 - 2011 Vice President Telenor Group

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Registration Documents

The registration desk will be open on Tuesday, 31 March 2020 from 11.00 a.m. onwards.

1 Attendance in person

- Notification of Meeting (Enclosure 4)

- An original official identification card, such as personal identification card, driving license, orpassport.

2 Attendance by proxy

2.1 Shareholder being a natural person


- A duly completed proxy form, signed by the shareholder and the proxy representative,together with THB 20 stamp duty

- A copy of the shareholder’s official identification card, such as personal identification card,driving license or passport, certified by the shareholder

- An original official identification card of the proxy representative, such as personalidentification card, driving license or passport.

2.2 Shareholder being a juristic person registered in Thailand


- A duly completed proxy form, signed by the authorized signatory(ies) of the shareholder andthe proxy representative, together with the seal affixed (if any) and THB 20 stamp duty

- A copy of the affidavit or certificate of registration of the shareholder issued by the Ministryof Commerce or relevant agency not more than three months prior to the date of the Meeting,certified by the authorized signatory(ies) of the shareholder, together with the seal affixed (ifany)

- A copy of the authorized signatory(ies)’s official identification card, such as personalidentification card, driving license or passport, certified by the authorized signatory(ies)

- An original official identification card of the proxy representative, such as personalidentification card, driving license or passport.

2.3 Shareholder being a juristic person registered overseas


- A duly completed proxy form, signed by the authorized signatory(ies) of the shareholder andthe proxy representative, together with the seal affixed (if any) and THB 20 stamp duty;

- A copy of the certificate of incorporation or equivalent constitutional document(s) of theshareholder issued by the relevant agency not more than six months prior to the date of theMeeting, containing the name of the shareholder, its registered address, and name(s) of theauthorized signatory(ies) and his/her authority, certified by the authorized signatory(ies) ofthe shareholder, together with the seal affixed (if any);

- A copy of the authorized signatory(ies)’s official identification card, such as personalidentification card, driving license or passport, certified by the authorized signatory(ies);

- An original official identification card of the proxy representative, such as personalidentification card, driving license or passport; and

- English translation is required for any original document which is not in English and suchtranslation must be certified by the authorized signatory(ies) of the shareholder.

n Documents

Enclosure 5

43

44

Shareholders who wish to appoint a proxy may appoint any one person or either one of the following independent directors of the Company: Mrs. Chananyarak Phetcharat, or Mrs. Kamonwan Wipulakorn, or Mrs. Pratana Mongkolkul as their proxy. Profiles of the independent directors are set out in Enclosure 7.

Shareholders may send the duly completed proxy form, together with the above documentation, to the registered office of the Company at:

Total Access Communication Public Company Limited Company Secretary Department 39th Floor, Chamchuri Square Building No. 319 Phayathai Road, Pathumwan Subdistrict, Pathumwan District, Bangkok 10330, Thailand

no later than 5.00 p.m. on Thursday, 26 March 2020, so that officers of the Company are given enough time to check the documentation, or shareholders may submit the same to the registration official on the date of the Meeting from 11.00 a.m. onwards at the venue of the Meeting.

Shareholders who have questions on registration documents or how to complete the proxy form may contact the Company Secretary at telephone no. +66 2202 8106 or via email at [email protected].

45

Obtain voting ballots

Enter meeting room

Meeting begins at 1.00 p.m.

Meeting proceeds in accordance with the agenda

Collect voting ballots from voters who disapprove and abstain from voting in each agenda, except Agenda 5 collect voting ballots from

voters who approve, disapprove and abstain from voting

Announce voting results to the Meeting

Registration and Meeting Processes

Shareholders attending by proxy

Document Verification Desk

Registration Desk for proxies

Present Notification of Meeting, proxy form and supporting documents

Shareholders attending in person

Registration Desk for shareholders attending in person

Present Notification of Meeting andpersonal documents

Registration opens at 11.00 a.m.

Voting Procedures and Vote Counting

1. To cast a vote, one share shall have one vote.

2. A shareholder may cast his or her vote to approve, disapprove or abstain from voting.

3. To vote in each agenda, except in Agenda 5 regarding election of directors, only shareholders whodisapprove or abstain from voting shall cast their votes and sign their names on the ballots and handin the same to the Company’s staff to count the votes. Shareholders who approve the agenda arenot required to write their votes on the ballots.

4. To count the votes, only ballots of shareholders who disapprove or abstain from voting will becollected. Disapproved, abstained and invalid votes will be deducted from the total votes of theshareholders who attend the Meeting and are entitled to vote. Invalid votes are, for example, in thecase where the vote is not clearly marked or there is no signature on the ballot.

5. For Agenda 5 regarding election of directors, all shareholders shall cast their votes, whether toapprove, disapprove or abstain from voting, and sign their names on the ballots and hand in thesame to the Company’s staff to count the votes. Shareholders who do not hand in their ballots willbe deemed to have abstained from voting.

6. Before casting the vote in each agenda, the Chair of the Meeting will give shareholders an opportunityto shareholders to make inquiries or comments on the issues related to such agenda as appropriate.In this regard, shareholders who wish to make the inquiries or comments are requested to notify theirnames before making the inquiries or comments.

7. To pass a resolution, a simple majority vote of the shareholders who attend the Meeting and areentitled to vote is required, except Agenda 6 regarding approval of the remuneration of directors,which requires the vote of not less than two-thirds of the total shares held by the shareholders whoattend the Meeting and are entitled to vote.

8. The Chair of the Meeting will announce voting result to the Meeting once the vote counting for suchagenda is completed.

46

Proxy Form B

Written at

Date

(1) I/We Nationality

residing at Road Sub-district

District Province Postal code

(2) Being the shareholder of Total Access Communication Public Company Limited, holding a

total of shares, with the voting rights equal to votes as follows:

ordinary share shares, with the voting rights equal to votes

preference share shares, with the voting rights equal to votes

(3) Hereby appoint (please choose one option):

1. Age years


District Province Postal code ; or

2. Age years


District Province Postal code ; or

3. Age years


District Province Postal code ,

The following independent directors (profiles of the independent directors are set out in Enclosure 7):

1. Mrs. Chananyarak Phetcharat; or

2. Mrs. Kamonwan Wipulakorn; or

3. Mrs. Pratana Mongkolkul

anyone of them as my/our proxy to attend and vote on my/our behalf at the 2020 Annual General Meeting of

Shareholders (the “Meeting”) to be held on Tuesday, 31 March 2020 at 1.00 p.m. at the Grand Ballroom, 4th Floor,

InterContinental Bangkok, No. 973 Ploenchit Road, Lumpini Subdistrict, Pathumwan District, Bangkok, 10330 Thailand,

or such other date, time and place as the Meeting may be adjourned.

Duty Stamp THB 20

roxy Form B

Duty Stamp

47

Enclosure 6

(4) I/We therefore authorize the proxy to vote on my/our behalf in the Meeting as follows:

Agenda Item 1 Adoption of the Minutes of the 2019 Annual General Meeting of Shareholders heldon 4 April 2019

(a) The proxy shall have the right to consider and vote on my/our behalf as he/she deems appropriate in all respects.

(b) The proxy shall have the right to vote according to my/our instruction as follows:

For Against Abstain

Agenda Item 2 Acknowledgement of the Annual Report on the business operation of the Company for 2019

Agenda Item 3 Approval of the Audited Consolidated Financial Statements of the Company and its subsidiaries for the financial year ended 31 December 2019



For Against Abstain

Agenda Item 4 Approval of annual dividend payments for 2019 and acknowledgement of the interim dividend payment



For Against Abstain

Agenda Item 5 Approval of the re-election of directors in place of the retired directors



Elect all nominated candidates

For Against Abstain

Elect individual nominated candidates


For Against Abstain

Mr. Petter Boerre Furberg

For Against Abstain

Mrs. Pratana Mongkolkul

For Against Abstain

Mr. Sverre Pedersen

For Against Abstain

48

Agenda Item 6 Approval of the remuneration of directors for 2020



For Against Abstain

Agenda Item 7 Approval of the appointment of auditors of the Company and fixing their remuneration for 2020



For Against Abstain

Agenda Item 8 Other matters



For Against Abstain

(5) Voting of proxy in any agenda that is not as specified in this proxy shall be considered as invalid and notsignify my voting as a shareholder.

(6) In case I/we have not specified, or not clearly specified, my/our voting instruction in any agenda, or in casethe Meeting considers or passes any resolutions other than those specified above, including anyamendment or addition of any fact, the proxy shall have the rights to consider and vote on my/our behalfas he/she may deem appropriate in all respects.

Any actions undertaken by the proxy at the Meeting, except where the proxy did not vote as per my/ our instruction, shall be deemed as had been undertaken by me/us in all respects.

Signature Grantor

( )

Signature Grantee

( )

Signature Grantee

( )

Signature Grantee

( )

Note:

1. A shareholder shall appoint only one proxy to attend and vote at the Meeting and may not divide his/her shares into portionsto more than one proxy in order to divide his/her votes.

2. In the agenda regarding election of new directors, the whole set of nominated candidates, or any individual nominatedcandidates, can be elected.

3. In case there are other agenda other than those specified above, the grantor of the proxy shall use the Supplement to ProxyForm B attached herewith to specify the additional agenda.

49

Supplement to Proxy Form B The appointment of proxy by a shareholder of Total Access Communication Public Company Limited for 2020 Annual

General Meeting of Shareholders (the “Meeting”) to be held on Tuesday, 31 March 2020 at 1.00 p.m. at the Grand

Ballroom, 4th Floor, InterContinental Bangkok, No. 973 Ploenchit Road, Lumpini Subdistrict, Pathumwan District,

Bangkok, 10330 Thailand, or as such other date, time and place as the Meeting may be adjourned.

Agenda Item Subject

(a) The proxy shall have the right to consider and vote on my/our behalf as he/she deems appropriate

in all respects.


For Against Abstain

Agenda Item Subject


in all respects.


For Against Abstain

Agenda Item Subject


in all respects.


For Against Abstain

Agenda Item Subject


in all respects.


For Against Abstain

Agenda Item Subject


in all respects.


For Against Abstain

Agenda Item 5 Approval of the re-election of directors in place of the retired directors (continued) Name

For Against Abstain

Name

For Against Abstain

Name

For Against Abstain

Name

For Against Abstain

Name

For Against Abstain

50

Profiles of Independent Directors to Serve as Proxy

1. Mrs. Chananyarak PhetcharatIndependent Director, Chair of the Corporate Governance Committee,Member of the Nomination Committee and Chair of the RemunerationCommitteeAge: 56 yearsAddress: Total Access Communication Public Company LimitedNo. 319 Chamchuri Square Building, 41st Floor, Phayathai Road,Pathumwan Subdistrict, Pathumwan District, Bangkok 10330, ThailandInterests in meeting agenda:Agenda Item 6 Approval of the remuneration of directors for 2020

2. Mrs. Kamonwan WipulakornIndependent Director, Chair of the Audit Committee, Member of theRemuneration Committee, and Member of the Corporate GovernanceCommitteeAge: 57 yearsAddress: Total Access Communication Public Company LimitedNo. 319 Chamchuri Square Building, 41st Floor, Phayathai Road,Pathumwan Subdistrict, Pathumwan District, Bangkok 10330, ThailandInterests in meeting agenda:Agenda Item 6 Approval of the remuneration of directors for 2020

3. Mrs. Pratana MongkolkulIndependent Director, Member of the Audit Committee, Member ofNomination Committee, and Member of the Remuneration CommitteeAge: 56 yearsAddress: Total Access Communication Public Company LimitedNo. 319 Chamchuri Square Building, 41st Floor, Phayathai Road,Pathumwan Subdistrict, Pathumwan District, Bangkok 10330, ThailandInterests in meeting agenda:Agenda 5 Item Approval of the re-election of directors in place of theretired directors and Agenda Item 6 Approval of the remuneration ofdirectors for 2020

Directors to Serve as Proxy

Enclosure 7

51

Qualifications of Independent Directors

The qualifications of the independent directors of the Company, which are higher than the minimum requirements of the Office of the Securities and Exchange Commission and the Stock Exchange of Thailand, are as follows:

(1) Holding shares not exceeding 0.5 percent of the total voting shares of the Company, its parentcompany, subsidiary, affiliate or juristic person which may have conflicts of interest, including sharesheld by related persons of the independent directors;

(2) Not being or having been an executive director, employee, staff, advisor who receives regular salary,or controlling person of the Company, its parent company, subsidiary, affiliate or juristic person whichmay have conflicts of interest, unless such characteristic ceases at least two years prior to the dateof appointment;

(3) Not being a person related by blood or legal registration, such as father, mother, spouse, sibling andchildren (including spouse of the children) of executives, major shareholders, controlling persons, orpersons to be nominated as executive or controlling person of the Company or its subsidiary;

(4) Having no business relationship with the Company, its parent company, subsidiary, affiliate or juristicperson which may have conflicts of interest, in a manner which may interfere with his independentjudgement, and not being or having been a major shareholder, non-independent director, executiveof any person having business relationship with the Company, its parent company, subsidiary, orjuristic person which may have conflicts of interest, unless such characteristic ceases at least twoyears prior to the date of appointment;

(5) Not being or having been an auditor of the Company, its parent company, subsidiary, affiliate orjuristic person which may have conflicts of interest, and not being a major shareholder, non-independent director, executive, or managing partner of the audit firm in which the auditor of theCompany, its parent company, subsidiary, affiliate or juristic person which may have conflicts ofinterest is employed, unless such characteristic ceases at least two years prior to the date ofappointment;

(6) Not being or having been any professional advisor, including legal advisor or financial advisor whichreceives service fee of more than THB two million per year from the Company, its parent company,subsidiary, affiliate or juristic person which may have conflicts of interest, and not being a majorshareholder, non-independent director, executive, or managing partner of the professional advisorwhich is a juristic person, unless such characteristic ceases at least two years prior to the date ofappointment;

(7) Not being a director appointed as representative of a director of the Company, its major shareholder,or shareholder which is a related person of the major shareholder of the Company; and

(8) Not having any characteristics which render him/her incapable of expressing independent opinionregarding the Company’s business operation.

52

Articles of Association concerning Shareholders’ Meeting

1. Convening of a meeting

Article 35 The Board of Directors shall arrange the shareholder meeting as an Annual GeneralMeeting to be held within 4 months from the last day of the financial year of the Company.

Any other shareholder meeting shall be called an Extraordinary General Meeting. The Board of Directors may call such meeting at any time the board considers it expedient to do so.

Shareholders holding shares amounting to not less than ten percent of the total number of shares sold may submit their names in a written notice requesting the Board of Directors to call an Extraordinary General Meeting at any time; provided that, they shall also specify reasons for such request in the notice. In such case, the Board of Directors must arrange for a meeting of shareholders within forty five days from the date of receipt of the notice.

In the case where the Board of the Directors fails to arrange a meeting within the period as in paragraph three, the shareholders who submitted their names or along with other shareholders amounting as given are entitled to hold the meeting. This is subject to a condition that such group of shareholders shall convene the meeting within forty five days of the lapse of the due date in paragraph three. In such case, the meeting shall be considered as a meeting called by the Board of Directors where the company must be accountable for any essential expenses incurred from the meeting and facilitate the meeting as appropriate.

In the case that the shareholders’ meeting called in accordance with paragraph four is not met by meeting quorum requirements in this Articles of Association, the shareholders who called for the meeting shall cover the expenses of that meeting themselves.

Article 36 In calling for a shareholders’ meeting, the Board of Directors shall prepare a notice of the meeting indicating the place, date, time, agenda, and matters to be proposed to the meeting together with appropriate details by clearly specifying that such matters are for acknowledgment, approval, or consideration, as the case may be, including the Board of Directors’ opinion on the said matters. The Company shall inform in writing the details of the meeting to any stock exchange where the Company’s shares were registered for buying and selling not less than 14 days prior to the meeting date and shall send the notice of the meeting to the shareholders and the Registrar not less than 7 days prior to the meeting date. Such notice of the meeting shall be published in a newspaper for 3 consecutive days, at least 3 days prior to the meeting date.

2. Quorum

Article 37 In a shareholders’ meeting, in order to constitute a quorum, there shall beshareholders or proxies (if any) attending the meeting amounting to not less than 25 persons, or one-half of the total number of shareholders, holding not less than one-third of the total number of shares sold.

A proxy need not be a shareholder of the Company. An instrument appointing a proxy shall be made in writing, signed by the shareholder and in a form as specified

rning Shareholders’ Meeting

Enclosure 8

53

54

by the Registrar. An instrument appointing a proxy shall be deemed that the shareholder delegated the rights to demand or join in demanding a poll, to remove or amend any resolution of the meeting and to speak at the meeting. A proxy shall be entitled to vote on any matter at the shareholders’ meeting.

If within an hour from the time fixed for the shareholders' meeting, the quorum prescribed by the first paragraph is not constituted, the meeting, if called upon the requisition of the shareholders, shall be dissolved. If such meeting is called other than by the shareholders' requisition, another meeting shall be called and a notice of the meeting shall be sent to the shareholders at least 7 days prior to the meeting date. At such meeting, no quorum shall be necessary.

3. Voting

Article 38 The resolutions of the shareholders’ meeting shall be passed in the followingmanners:

(1) in the ordinary event, a majority vote of shareholders who attend the meetingand are entitled to vote which shall be count one vote for each share. In thecase of a tied vote, the Chairman of the meeting shall have an additional voteas a deciding vote; and

(2) in the following events, a vote of not less than three-quarters of the totalnumber of votes of shareholders who attend the meeting and are entitled tovote which shall be count one vote for each share:

(a) the sale or transfer of the whole or the substantial part of the Company’sbusiness to any other person;

(b) the purchase or acceptance of any transfer of the business of othercompanies or private companies; and

(c) the entering into, alteration or termination of any agreement concerningthe lease, in whole or in substantial part, of the Company’s business,the assignment to any person for the management of the Company’sbusiness, or the merger with any other person for the purpose of profitand loss sharing.

Enclosure 9

Map of InterContinental Bangkok

973 Ploenchit Road, Lumpini Subdistrict, Pathumwan District, Bangkok, 10330 Thailand Tel: +66 2656 0444

Directions

By Private car

: Petchaburi Road, take the left turn toward Central World shopping mall ontoRatchadamri Road, which is on the right, and take the left turn atRatchaprasong Intersection, the hotel is on the left.

Siam Paragon, continue onto Sukhumvit Road, pass RatchaprasongIntersection, the hotel is on the left.

Ploenchit Intersection, continue onto Sukhumvit Road, toward RatchaprasongIntersection, the hotel is on the right.

By train : BTS Chidlom Station E1, Exit 6

By bus : Buses that pass in front of the hotel: 25, 38, 40 and 48

Buses that pass the nearby Ratchaprasong intersection: 2, 25, 38, 40, 48,204, 501, 504, 511 and 513

55

Total Access Communication Public Company Limited319 Chamchuri Square Building, 41st Floor, Phayathai Road, Pathumwan, Pathumwan, Bangkok 10330 Thailand

www.dtac.co.th

dtacANNUAL REPORT2019

A Year of Turning Points

NEVER STOP...

CONTENTS

4 Message from Chair and CEO

6 Our Purpose and Strategies

8 Operational & Financial Highlights

10 Turning Points

32 Board of Directors

38 Executive Management

43 Corporate Information

45 Group Structure

50 Business Performance and Outlook

55 Sustainability

57 Milestones

64 Risk Factors

69 Management

81 Corporate Governance

104 Audit Committee Report

106 Nomination Committee Report

108 Corporate Governance Committee Report

110 Remuneration Committee Report

112 Interested & Connected Person Transaction

123 Shareholder Structure

125 Dividend Policy

126 Management Discussion and Analysis

132 Report of the Board of Directors’ Responsibility for the Financial Reports

134 Independent Auditor’s Report

140 Financial Statements

150 Notes to Consolidated Financial Statements

225 Glossary

3

TOC. Annual Report 2019

OUR TURNING POINTMESSAGE FROM THE CHAIR AND CEO

Customers First

An equally important turning point for the network was

the shift to customer-centric metrics. We traded technical

metrics (such as average throughput and number of sites)

for customer-focused indicators such as the network net

promoter score (or NPS, an index of customer satisfaction)

and network complaints.

In addition, we combined data from all our customer touch-

points across the call center, sales, marketing and digital

to jointly monitor our customers’ experience in real time.

As a result, dtac’s network NPS grew fourfold from January

to December 2019 and dtac clinched top spots for network

speed and video experience in several independent net-

work measurement reports in H2’19.

The year 2019 was a turning point for dtac. As the spectrum

we held under a 30-year concession expired in late 2018,

our customers, shareholders and employees were affected

by the resulting uncertainty. We promised to never stop

doing what’s right for the customer, quickly regaining

the trust of our stakeholders through consistent network

improvements and fairer offers that deliver on what cus-

tomers really want. Having returned to growth in Q3 and

Q4, it is our firm belief we have laid a strong foundation

for 2020 and beyond.

By the start of 2019, we had reclaimed a solid spectrum

position, but much work remained on rebuilding our net-

work around these new holdings. We made substantial

investments, expanding our 4G TDD network to over 17,000

sites and acquiring 2x10 MHz of bandwidth on 700 MHz,

a reaffirmation of our ambition of achieving unbuffered

video streaming nationwide.

4

We applied the same customer-centric approach to all our

services and offers, making them simpler, more human and

more transparent. Starting from customer complaints, we

were able to identify the biggest pain points for our cus-

tomers and tackle them one by one.

One such case led to tightening our standards and in-

creasing security for value-added services and third-party

content subscriptions. We leveraged artificial intelligence

to help detect and prevent SMS or internet fraudulent ac-

tivities caused by malicious malware or ransomware. This

affected our revenue negatively, but we chose to protect

our customers and make the use of such services a very

deliberate choice for them.

Thanks to efforts like these, dtac’s overall customer com-

plaints dropped by nearly half in 2019. But we believe

that these initiatives translated to more than just cus-

tomer satisfaction. By being honest, simple and human in

everything we do, we also aim to clearly differentiate dtac

from our competitors.

Never Stop Improving

As we challenged ourselves to never stop improving our

quality of service, we also maintained a very strong focus

on the postpaid and prepaid market. Through new tools

and ways of works, we improved how marketing and sales

collaborate, reducing the time to market of our offers from

weeks to days—and providing local teams with real-time

insights. Moreover, we reenergized, retrained and restruc-

tured our sales force to improve their motivation and the

quality of dtac’s service.

Our ability to win back the prepaid segment remains one

of our proudest turning points of the year. We continued

to strengthen our foothold in the migrants’ segment, sim-

plified our portfolio and continually adjusted our product

mix to uplift average revenue per user.

The erosion of pre-to-post migrations was substituted

by a strong position in handset subsidies to assure a fair

share in gross adds. And the introduction of dtac GO, an

all-inclusive roaming proposition, was hailed as a bold first

for Thailand’s international travelers.

This year was also a turning point for our business offerings,

where we see a lot of potential to grow the portfolio and

approach our customers with simple, transparent and easy-

to-use products. The changes we initiated, particularly in

the SME segment, put us in a strong position to capture

this opportunity in 2020.

While we take pride in these early results, much of our

2019 efforts will be felt in the coming years. We made

the entire organization flatter, launched self-organized

teams working in completely new ways (using the “agile”

methodology) and entered a major partnership with

Ericsson to entrust our network operations to a global

technology leader.

Sustainable Growth

In financial terms, our efforts translated to [FINANCIAL

RESULTS FOR FY2019 GO HERE]

In addition to our services and contributions to the econ-

omy, dtac remains fully committed to ensuring mobile

connectivity has a positive impact on Thai society. For

instance, we initiated the very first online curriculum in

Thailand to teach children how to use the internet in a

responsible way, working with both the social sector and

government sector. Tens of thousands of children and

teachers have already been certified and are now taking

the lead on training their peers.

With 5G on the horizon, we believe the role of mobile

network operators will evolve in exciting new ways. In

2019, we initiated activities to prepare ourselves from a

network and technology standpoint: transitioning to a fully

virtual core network and upgrading our entire IT system to

a much more defensible architecture. Equally important,

the partnerships and new ways of work we initiated will be

critical to bolstering Thailand’s 5G future.

We would like to express our sincere gratitude to every-

one who helped make 2019 a turning point for dtac: our

customers, our shareholders, our employees, our many

partners and our public sector stakeholders. More than

ever, it is by working together that we can deliver the full

value of connectivity to Thai society. And dtac will never

stop pursuing that ambition.

By being honest, simple and human in

everything we do, we aim to clearly

differentiate dtac from our competitors.

Boonchai Bencharongkul Chair of the Board of Directors

Alexandra Reich Chief Executive Officer

5

Message From Chair and CEO. Annual Report 2019

Connecting you to what matters most. Empowering Societies.

OURPURPOSE

6

STRATEGIES

Growth: Like our customers, we never stop

We capture growth opportunities by offering unbuffered video experience nationwide at a competitive price point while being positioned as a simple, honest and human operator. We provide a seamless customer experience by following an omnichannel approach, optimizing our distribution channels and leveraging digitization and artificial intelligence. This allows us to retain and win back our prepaid customers, keep our growth momentum in postpaid and accelerate our B2B business. In parallel, we are incubating new 5G products and services like VR and AR to delight our customers.

Simplification & Efficiency: We are ready for the future

We continuously work to make our operations simpler and more efficient. We do so to create seamless, worry-free experiences for our customers and to facilitate long-term sustainable growth for our business. We modernize our organization and operating model and optimize our network costs on a continuous basis.

Winning Team: A lean, agile & strong organization

To ensure we stay relevant to our customers, react faster to their needs and serve them more efficiently, we continue to build an organization with strong and future-proof capabilities, an agile way of work and a simple and lean organizational structure. We believe in challenging the status quo, customer obsession, honesty, simplicity and fun.

Responsible Business Conduct: We positively contribute to society

We want to be a trusted partner with strong integrity, working to reduce inequalities, raise standards in our operations and supply chain, and deliver on safety, security and data privacy regulations.

Purpose & Strategies. Annual Report 2019

7

FINANCIALHIGHLIGHTS

REVENUE FROM TELEPHONE SERVICES

TOTAL REVENUES FROM SALES AND SERVICES

EBITDA*

NET PROFIT TO EQUITY HOLDERS

TOTAL ASSET

TOTAL LIABILITIES

TOTAL SHAREHOLDERS’ EQUITY

EBITDA MARGIN

RETURN ON EQUITY

NET DEBT : EBITDA **

NO. OF SHARE (MILLION)

EARNINGS PER SHARE (THB)

SHARE PRICE (THB) ***

68,083

78,275

30,446

2,115

114,501

85,266

29,235

2,368

0.89

49.00

63,333

81,167

30,417

5,422

167,339

142,372

24,966

150,958

129,028

21,930

37.5%

23.1%

1.6

2,368

2.29

53.25

2,368

(1.85)

43.25

OPERATING RESULTS (IN THB MILLION)

BALANCE SHEET (IN THB MILLION)

RATIO

SHARES

2017

2017

2017

2017

2018

2018

2018

2018

2019

2019

2019

2019

* EBITDA herein is EBITDA before other items.** EBITDA used in the calculation is EBITDA before other items before the effect from the adoption of the Thai Financial Reporting Standard No. 16*** As of the last trading day of each calendar year

38.9%

7.5%

0.8

65,325

75,290

28,391

(4,369)

37.7%

-17.1%

1.2

8

OPERATIONALHIGHLIGHTS

NUMBER OF SUBSCRIBERS (MILLION)

DATA USAGE (GB/SUB/MONTH)

TOTAL BASE STATIONS (THOUSAND)**

AVERAGE REVENUE PER USERS* (THB/MONTH)

* ARPU excludes interconnection charge, based on financial reporting standards applicable for respective year

** Installed base stations including those under license application process as well as base stations under a partnership with TOT

SMARTPHONE PENETRATION(% OF TOTAL SUBSCRIBER BASE)

2017 2018 2019

3G

4G

3G BASE STATIONS

4G BASE STATIONS

Prepaid subscribers (million)

Postpaid subscribers (million)

230 242

2018

8.3

2019

11.1 251

2017 2019

33.5 37.026.9

43.637.9

49.5

2018

2019

85

2018

2017

78

73

2017

5.8

2017

2018

2019

22.7

21.2

20.6

9

Operation & Financial Hilights. Annual Report 2019

Meet dtac customers and teams who never stopped pursuing their dreams in 2019

TURNING POINTS

10

The true test of our aspirations is whether we pursue them with tenacity. In the pages that follow, we

chose to celebrate dtac customers and teams who had turning points in 2019. We asked them to

share what inspired them, the risks they faced, their low points, and what it took for them to ultimately

reach their goals. For dtac, too, 2019 was a year of important turning points. And it was all in service of

people like the ones whose stories you’re about to read: people who rely on connectivity to learn, share

and grow. And who will never stop reaching for their dreams.

Turning Points. Annual Report 2019

11

Chaovarith Poonphol was an architect at A49, Thailand’s most renowned architectural firm. He worked there for seven years, starting as an intern before moving up the ranks to senior architect. In parallel, he was becoming an increasingly sought-after architectural photographer. The pressures of both jobs piling up, he suffered a major burnout. This is the story of how he bounced back and landed in the field of his dreams.

“For three years I had been thinking about quitting my job to become a photographer. But I wasn’t sure if I could make a living out of it. Eventually, there were more and more people coming to me with photography work, and I started getting calls from people being recommended by my previous clients. It started too look like I could really make this my job, but the pressure of having two jobs started to take its toll,” says Chaovarith.

Back then, Chaovarith was a full-time architect on weekdays and a freelance photographer on weekends, shooting the hottest new buildings around the country. As his freelance career took off, his work appeared in several magazines and books. By 2018, he was becoming a victim of his own success. He couldn’t keep up with the combined workload of his freelancing and his full-time job.

FROM BURNOUT TO BALANCE

VIEWPOINT.

“My strong belief is that the turning point for dtac is when we renewed our focus on the customer’s point of view. For example, we switched from internal network metrics to a granular measure of network NPS [net promoter score, a customer satisfaction score]. This brought up several problems that we had not identified earlier, and which allowed us to conduct root cause analysis. Everything we have done is moving from an inside-out to an outside-in view—and really dealing with the issues we uncover. We didn’t even know these problems existed in some cases! To me, this is what really changed. It’s linked to everything else you see: the brand position, the complaints reduction, the growth of the network NPS. Financial results are just an outcome of this. If customers are happy, everything follows.”

Mr. Dilip PalChief Financial Officer

In 2019, architectural photographer Chaovarith Poonphol took big risks to further his passion.


13

If places I go to have a good coverage, then I can work from anywhere.

“During my final year as an architect, my boss told me my work quality had dropped. I also missed a lot of deadlines with my photography gigs. Before, I used to submit everything on time!” Chaovarith recalls. “I was working too hard and I had a burnout. I didn’t want to do anything or talk to anyone. I didn’t want to wake up and be in the office at 8:30am. It was so bad I had to go see a psychiatrist and take medication. And I didn’t have time for my family either. That was the worst part.”

Once he realized he needed to do less, Chaovarith took the bold step of resigning from his position as an architect. A month later, he joined his friend’s 3D visualization studio to launch SkyGround, a photograph & film production service tailored for real estate clients. Today, he oversees a team of six, and trains them to become better photographers in addition to their computer graphic skills.

This year, they shot around 200 buildings, from gleaming skyscrapers, luxury residential projects, to boutique hotels. They also expanded their services to videography. Chaovarith says this is relatively new for the architectural scene here. And he relishes the opportunity to shoot award-winning architecture, such as the Choui Fong Tea cafe in Chiang Rai, one of his proudest jobs this year.

“We had to shoot video for a handful of buildings this year. This kind of work was new to us and marks a turning point in my photography career,” he says. “We just saw these video jobs as opportunities to experiment, but in the end things turned out well.”

Today as the director of photography at SkyGround, he wakes up early and looks forward to starting the day. He is no longer kept at his desk and gets to enjoy the warmth of the sun when being on site for shoots, which take place at least four days a week.

VIEWPOINT.

“Our salespeople were somewhat uncertain at the beginning of 2019. But we didn’t give up. If you go to them, and you walk the talk, and you give them hope, and you can get a bit of growth, then your teams will notice. And once they start to win again, even a little, then the momentum starts to build. By the end of Q1, I felt like we had reached a turning point. The teamwork and spirit were back. Everyone was working together tirelessly. That’s the dtac spirit. When we’re in that mood, we do wonders. The amount of promotions and campaigns we rolled out, and the speed at which they were executed, makes me feel very proud of how far the team has come this year.”

Tipayarat KaewsringarmChief Sales Officer

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“I’m an outdoorsy type. I love being behind the lens shooting beautiful spaces. I enjoy my time spent with my colleagues on a shoot, eating lunch together and staying at a beautifully-designed building for two days. Finally, I have my Saturdays and Sundays back. And I don’t miss deadlines anymore. I also get a chance to reflect on things. It was the first time I started noticing my mom was getting old. She had difficulty walking, so I got a fitness membership for her and also for myself. Every weekend I take her to the gym or eat out, and I have been working out every day for almost a year now. My body feels stronger and I’m happier too.”

Chaovarith has been a dtac customer for more than a decade. This year, he noticed the improvement in dtac’s mobile internet speed and coverage. Being able to stay connected to his customer is critical. But high-speed internet has also transformed his way of work.

“Just this year, I switched to a bigger data package as I have to sync and upload hundreds of photos to Lightroom, which is a cloud-based application I use to edit photos directly on my phone,” he says. “There was one time I went to photograph a house in Kanchanaburi, and I just uploaded everything into the cloud right after. If places I go to have a good coverage, then I can work from anywhere. These days I work mostly on my phone and hardly carry a laptop anymore. I think the cloud is a major turning point in my workflow. In the near future, I hope the speed of mobile data can even surpass fiber internet.”

BY THE NUMBERS

Increase in postpaid average revenue per user (ARPU) from Q4’18 to Q4’19.

Reduction in overall complaints from January to December 2019

Improvement in gross adds quality

(as measured by their survival rate at month 3) from Q4’18 to Q3’19.


15

THE DREAM TEAMThey joined a hackathon out of curiosity and ended up building a world first that puts customers at the heart of dtac’s network improvements.

Thapakorn Dokmai, Wanchan Islargumpot, Akebordin Duangphoommes, Orraphan Saengsawat, Sirin Pakdeesrisakda, and Montree Monkhetkorn are all dtac employees, but they come from completely different backgrounds and divisions, from marketing to software development. What brought them together was a “hackathon,” a three-day workshop to brainstorm ideas, prototype them, and pitch them to a jury—which in this case, included very big names from Thailand’s startup scene. Ten months later, their project, a complete outlier in the global telecoms industry, launched in its trial phase.

“When the team first met, we didn’t know exactly how dtac would make the improvements it promised,” says Thapakorn. “But with the launch of the ‘never stop’ tagline, we felt it was a strong show of honesty and commitment. It showed dtac was here to stay and fight back!”

With that in mind, Tapakorn and the team set out to tackle their number one concern: how dtac deals with customer complaints about network quality.

“We’d hear grumbling from friends and family. But there was no easy way to know exactly where they had encountered a network issue, the time of day, the device and operating system they were on… It was frustrating,” Wanchan says. “These complaints were really hurting our brand image. So, when the ‘Never Stop’ ad rolled out, my thought was that if dtac dared to come out and admit that we need to improve, the company was truly ready for brave new ideas.”

By the end of the hackathon, the team was standing on stage receiving a check from dtac’s CEO, Alexandra Reich. More importantly, it was decided their project would get built. The idea was to create a platform where customers can share localized reviews of their network experience—both positive and negative—right from the dtac app. While many third-party apps already allow users to test their connection, it’s unheard of for a telco to open itself to such tests and reviews in a transparent platform of its own making.

16

VIEWPOINT.

“Once we secured a solid spectrum position, we were able to proactively fix customer pain points. We fundamentally changed the metrics driving our expansion, switching from typical network-driven metrics to focusing on what customers experience on the ground. Using advanced analytics, we identified our customers’ pain points, before deploying the appropriate solutions. What we achieved is very rare and I’m very proud of the team.”

Prathet TankuranunChief Technology Officer


17

VIEWPOINT.

“In 2019, we elevated employees’ continuous learning to a burning platform. With digital transformation upon us and 5G on the horizon, we felt that it became a case of do or die. We have what we call ‘The 40-Hour Challenge,’ to encourage all employees to study both online and offline. But what’s even more important is applying it into your work life, within an ecosystem of opportunities. The hackathon dtac held this year is a great example of how you can learn something and then apply it right away. It’s not just brainstorming. We deliberately apply the ideas with customer-centric prototypes that are tested against real customers.”

Nardrerdee Arj-HarnwongseChief People Officer

“We brainstormed a bunch of ideas because we just tried to be fun and creative. But when we realized the CEO wanted our idea built for real, we were scared! Many questions started popping up in our heads. How could we come together since we all work in different parts of the company? What would be our way of work? Would we get supported by the organization?” Tapakorn says.

There were several obstacles in developing the app. Time management was one. Each team member already had full-time jobs at dtac yet needed to set aside some time to make it happen.

In addition to the short timeline, numerous stakeholders needed to be on board to build the platform, which sits within the dtac app while connecting to the call center and network operations. During the first weeks, the team were often told that what they were trying to build was impossible. But they didn’t give up.

“This was a new way of working for everyone. We needed a huge investment from several groups in dtac, but we are just ordinary employees—not senior vice presidents. But after speaking to all the heads, we got their support and got going,” Tapakorn says.

“Once people believed in what we wanted to do, they really tried their best to help us no matter how difficult it is.” Oraphan adds. “Our colleagues really wanted to see this get built.”

The team worked according to the agile methodology, which is designed to bring teams from different fields together and produce results quickly.

“At the end of the day, it was a good thing we enjoy being together. Otherwise, we wouldn’t have put in the extra effort and stayed late. The team spirit is what keeps us together,” Tapakorn said of the long hours they put in.

Network Check & Share allows users to rate their network experience for a particular location and see that of other users. Customers can get a sense of whether they are genuinely in a trouble spot, or whether the issue might sit with their device. Also, because the complaint is coming directly from their mobile device, it comes with detailed information the call center and network teams can use to investigate it. Those teams can then propose solutions to the users and fix issues on the dtac side.

“We’re certainly anxious to know how things will pan out, but we are willing to take risks. We are open to complaints, so we know where to improve,” says Wanchan. “Complaints should be treated as very valuable data.”

As dtac continues to expand and densify its network, Network Check & Share will be an important tool to ensure that roll-out is driven by real customers’ on-the-ground experience, not just traditional technical metrics. Even more importantly, the team has demonstrated that new ways of collaborating can deliver bold solutions that challenge the status quo and prove to customers that dtac is fully committed to never stop improving.

Once people believed in what we wanted to do, they really tried their best to help us no matter how difficult it is.

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BY THE NUMBERS

Number of full-scale agile teams launched in 2019. They operate

cross-functionally on 2-week sprints, to ideate, build and test new services

very rapidly.

Percentage of favorable responses to the statement “opportunities for development are available to everyone,” in the 2019 Employee Engagement Survey. It marks an

increase of 15 points compared to 2018 and is 19 points higher than the

telecom industry average.

Increase in Network Net Promoter Score (a customer satisfaction index)

from January to December 2019.


19

THE GRADUATION YEARINSKRU is a platform to empower Thai teachers with better course material—and 2019 is the year it really took off!

Chalipa Dulyakorn, a graduate from Chulalongkorn University in industrial design, is passionate about teaching. But she also feels traditional classes fail to grab Thai students’ interest and imagination. In 2017, she started INSKRU, an online platform that equips Thai teachers with more engaging course materials. This year, it made learning more enjoyable for over one million students.

“I wanted to do something impactful. Something I could continue doing after I graduated. My goal is to make students happier and more active in class, but it’s a difficult task for teachers. I saw a need for a platform where they can share and further develop ideas,” she explains.

INSKRU provides a blogging platform for teachers to share their pedagogical techniques and success stories with others. The online community also inspires them to create fun and engaging learning environments. Ideas can range from teaching English tenses through a lip sync battle to learning about social roles from popular music videos. But Chalipa says the ideas also need to be relevant and practical to follow.

“The coolest ideas often belong to teachers from remote schools. They look for ideas that most of us can relate to,” she says. “If you look at ideas from Finland, which is often named the best education system in the world, you can’t just dump those case studies on Thai teachers and expect them to be able to replicate them.”

Chalipa performed well as a student but she also notes that school was not all that exciting or applicable to her everyday life. It was in her university years that she discovered learning could be fun and relevant.

“I remember there was one teacher who taught management organization in college, and he taught us to do a SWOT analysis of ourselves and to calculate the most efficient routes to the faculty by applying the concept of manufacturing efficiency. That’s when I realized education doesn’t have to be boring,” she explains.

VIEWPOINT.

“We don’t just provide mobile connectivity, we also want to ensure it has a positive impact on Thai society. That’s why we initiated the very first online curriculum in Thailand to teach children how to use the internet in a responsible way. Launched in late 2019, safeinternetforkid.com has already empowered tens of thousands of teachers and students to make connectivity an asset for them—not a threat. Similarly, we look at 5G from both the perspective of what’s needed for the network and what’s needed for Thai society to benefit from the technology. Millions of people are still on 2G, and those who are connected to 3G and 4G don’t always know how to make the best of it. In 2019, we continued to work closely with the government to ensure mobile connectivity empowers all of Thai society durably.”

Marcus AdaktussonChief Corporate Affairs Officer


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Her other lightbulb moment was when teaching a class of primary school students in Lopburi. She had tasked them with redesigning their student bags with easily-available materials. “One group of students created a hybrid between a bag and a foldable table out of a cardboard box. And these are primary school students we are talking about!” she says.

That’s when Chalipa decided that Thai students’ potential needed to be unleashed with creative courses. And that it was individual teachers, not the education system, who held the power to make this happen.

“If we can change just one teacher, they will go on to transform thousands of students. There are 500,000 teachers in the system, and now we have reached about 100,000 of them. If every teacher had access to INSKRU, millions of students would benefit.”

In 2018, the platform received 100,000 baht for reaching the final round of dtac Plikthai, a platform to crowd-source socially-conscious initiatives. Chalipa then used the money for creative thinking workshops with teachers.

“I obtained a lot of new ideas from that workshop and also noted a high demand in teaching workshops,” she says. “We are still here today thanks to dtac.”

Interactive learning can play a significant role.

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BY THE NUMBERS

Reduction in complaints linked to third-party content

(Q1’19 vs 2018), thanks to a tightening of our standards that made billing more transparent.

dtac customers who visited dtac shops for a free checkup to ensure

their phones are 4G TDD-ready during the “Never Stop Caring” campaign.

Students and teachers trained on the safeinternetforkid.com curriculum, which boosts their resilience in the

face of online threats.This year, Chalipa reached a new turning point when dtac recruited INSKRU as a partner for the Safe Internet for Kids campaign, to tackle the problem of cyberbullying in school. INSKRU both promoted the program’s curriculum via its channels and organized workshops to further improve the teaching materials.

“The internet can bring threats, but it’s also required to organize cool activities in class. Teachers often have to rely on their own personal mobile hotspot to make up for the lack of Wi-Fi in rural schools,” Chalipa says. “Interactive learning can play a significant role in reducing the psychological distance between teachers and students.”

This year was the first time INSKRU reached over one million students, In 2019, INSKRU collected 782 ideas, transforming 6,919 classrooms and 1.66 million students. And Chalipa plans to continue growing sustainably. “We may constitute only a small part of the change, but we will keep moving forward,” she says.


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MOVING IN AND MOVING UPThis year, Myo Min Oo became the first sous-chef from Myanmar at the Michelin Guide-listed restaurant Supanniga

Myanmar’s migrant laborers often work the toughest, least paid jobs. They can at least take solace in knowing that, back home, the fruit of their hard work sends children to school and keeps aging parents in good health. But when Myo Min Oo left Myanmar, it was as a runaway teen. And his first years in Thailand offered no hint he would ever support his family, let alone become a sous-chef at Supanniga, a Thai restaurant which holds a plate in the Michelin Guide.

Myo Min Oo’s family had wanted him to finish high school. But all his friends left for Thailand, and he decided to follow them. “It nearly broke my father’s heart,” he says. “I was still young back then and just wanted to be with my friends. I was also curious about life in Thailand. But my family didn’t want me to go. The day I left, my dad cried.”

His family are Tai Yai, the second largest ethnic group in Myanmar, and live near the Mae Sot Border, where they run a small grocery shop and shuttle goods to and from Mae Sot. But Myo Min Oo’s mother is a 45-minute drive away and staying in touch proved harder than he had anticipated.

VIEWPOINT.

“What we mean by ‘never stop improving’ is a relentless focus on winning back our customers, growing month on month, and improving our service. In my view, our turning point was mid-2019, when we crystalized that ambition into a very clear strategy and brand position, supported by a fully dedicated management team. We vowed to fix the network experience, win back customers and seize the opportunity on business customers. Moreover, we resolved to do so while ensuring we remain simple, honest and human in everything we do. That clear focus helped us a lot in prioritizing our resources. It’s a collective effort by every group. Every one of us has a role to play to build back dtac and win back our customers’ trust.”

How Lih RenChief Marketing Officer

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25

When I got promoted to sous chef, I called my parents right away.

“They’re up in the mountains and there was no signal there. We had to write each other letters, or sometimes my mom would go to this place where you paid for a landline connection. It all made me terribly homesick,” Myo Min Oo recalls.

He remembers his first job delivering merchandise all over Thailand as grueling work, made all the harder because he spoke no Thai and couldn’t call home. But even when networks improved, he had other reasons to avoid getting in touch.

“I just wanted to hang out with friends. I spent a lot of my salary on drinking with them and had no money left for my parents. During those years I didn’t want to talk to them, actually. One time, my mom wanted me to come home because she missed me, but I couldn’t afford a bus ride. She had to send me the money. I felt so ashamed.”

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BY THE NUMBERS

dtac market share of mobile users from Myanmar, thanks to a very

data-driven and segmented approach.

Growth in full year topping revenue from own digital channels.

Growth in daily active app users (Dec’19 vs Dec’18).

Myo Min Oo remembers the precise moment he decided to turn his life around. It was during Songkran and he was completely penniless, so he had to share a bowl of instant noodles with a friend. That’s when he quit his job and managed to get into Supanniga as a steward—the lowest rank in the kitchen brigade system.

“When I received my first month’s salary, I sent it back home,” he recalls. “At first they couldn’t believe it. They thought I did something illegal. Not only that, but over the next five years I moved up to kitchen assistant, cook and eventually sous chef.”

Now Myo Min Oo and his family are in constant contact, either through status updates on Facebook or video calls. And he has been a dtac customer for almost a decade.

“Back home my family use Telenor. Here, I’m a dtac customer. All my friends also use dtac. I think dtac is always getting better. When I use it in Mae Sot, the signal works fine. They offer good promotions and packages, like free internet data and unlimited calls. It’s easy to choose the right offer for me as all the information they send is in Burmese.”

He also visits his family three times a year. Not only his mom isn’t paying for the ticket anymore, but he cooks Thai food for everyone when he gets there.

“I make them creamy tom yum kung, stuffed omelets, or any other Thai dishes they’ve never tried. We are a big family, and they all love my food. And now my parents believe I actually work in a restaurant!” he adds with a laugh.

Although he still works hard, Myo Min Oo is thankful that his boss gave him the opportunity to prove himself in the kitchen. And his parents don’t regret his life decision anymore.

“When I got promoted to sous chef, I called my parents right away. They were happy for me but also sad because we don’t get to live together. When I’ve saved up enough money, I will go back to Myanmar and open my own restaurant there,” he says. “I never thought I would have made it this far. And I don’t know what the future will bring, but I’m trying my best. I just want to keep moving up and up.”


27

THE SECRET SAUCEStarted from scratch by a husband and wife, healthy eating chain Jones’ Salad opened its 10th branch in 2019.

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Jones’ Salad, which began as a tiny kiosk in the basement of Chamchuri Square, opened its 10th branch this year. All began with a tumor the size of an orange. At the time of the diagnosis, Ariya Kumpilo was at the helm of 10 bubble tea stalls. The tumor was removed and proved to be benign, but he was ordered to watch his diet. That’s when he realized healthy eating options were all but inexistent around him.

“I wanted to open a health café of my own, but I didn’t know how to cook,” he says. “Still, the idea stayed in the back of my mind.”

A couple years later, he met his future wife, Yanin, who is a food enthusiast. The couple started dating. Then she went to study in Australia and stayed with her uncle-in-law, Mr. Jones, who happened to be a particularly gifted maker of salad dressings. When she told Ariya about this, he flew to learn the recipes with her uncle before returning to Bangkok to open the first branch of Jones’ Salad in 2013.

“I was running the restaurant by myself,” says Ariya. “I was worried because there was no profit. But there were a lot of customers thanking us for the food. We had customers with weight problems and diabetes. By eating Jones’ Salad every day, some said they lost 10 kg. I even met people who said they’d stopped eating vegetables until we came along. That feedback kept us going.”

Yanin then came back from Australia to help him run the restaurant, get the balance sheet in order and expand to new locations. Just when things were looking up, they were told to surrender their kiosk at Chamchuri. It was Valentine’s Day and the couple were about to go on a date.

“We felt crushed. But we kept fighting and convinced them to give us an even better, bigger spot,” says Yanin.

As they grew, they started a Facebook page to educate people to lead a healthy lifestyle, acquiring over one million followers over three years. Recently, they also added more variety to their menu, from healthy side dishes like Thai-style spicy salad to steak and poke bowls.


29

“With the new menu, we are gaining a wider customer base, including families. It makes us more confident in expanding to other locations than just downtown Bangkok,” Ariya says.

They plan to open five more branches in 2020, while also exploring the catering business: “The year 2019 was a real turning point. We added four branches and saw dramatic sales growth through delivery channels. We see a strong future there,” says Yanin.

“Attracting talented employees is a challenge for every SME. We want to become an organization that people want to work for,” she adds. “We want to make sure our employees and customers stay happy. We have one employee who used to earn minimum wage and is now a manager.”

VIEWPOINT.

“A major turning point in 2019 was to give a bigger focus to the large and underserved B2B market, which is primarily driven by small and medium enterprises. We constantly listen to what these segments need, both informally and through focus groups. What we heard from them is that business owners want more simplicity, more transparency and no bill shocks. That became the DNA of what we did and we’re now seeing early traction for our simple, transparent, worry-free product portfolio.”

Rajiv BawaChief Business Officer

We want to make sure our employees and customers stay happy.

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BY THE NUMBERS

Number of plans for SME customers, down from thousands

Growth in gross adds for business customers

Overall subscriber base increase for business customers

As a local chain restaurant, simplicity and connectivity are crucial in running business. That’s why in 2019, every branch of Jones’ Salad switched to dtac SME Worry Free.

“Previously we were on different mobile network operators at each branch. At the end of the month, we ended up with multiple bills, and keeping track of them was a headache. There was one time I forgot to pay one of the bills, and our phone got cut off. Now everything comes in a single bill. I don’t have to worry anymore,” Yanin says.

Ariya and his mother have also been dtac customers for years. “There was a rumor that dtac was going out of business in late 2018. I was a bit worried because I have used dtac for so long. Now that I see dtac fighting back, I’ve become confident and will keep using it,” he says.

The couple is also going through another major life event; they are becoming first-time parents. It’s another great turning point, especially for Yanin who normally works seven days a week.

“Now I’m trying to delegate my roles to others and do things more systematically,” she says. “It’s a new chapter of life. In the later months, I’ve become more excited. Every time the baby moves, I can feel the time is getting closer. I don’t know exactly how, but for sure our lives will become more complete.”


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BOARD OF DIRECTORSANDEXECUTIVE MANAGEMENT

32

Peter-Boerre FurbergVice Chair of the Board of Directors

Age: 52 Total Years of Directorship: 2 Years 5 Months

Number of shares held: None (0.00 %) Number of shares held by spouse and minor children: None (0.00%)

•Academic Background Certified European Financial Analyst, Norwegian School of Economics (NHH) AFA/CEFA, Norway

Siviløkonom 4 year program in Economics and Business Administration, Norwegian School of Economics (NHH)

Positions in Listed Companies in SET2017 – Present Vice Chair of the Board of Directors, Total Access Communication PLC.

Position in Other Companies or Organizations2019 – Present Chief Executive Officer, Telenor Norway AS

2017 – Present Chair of the Board of Directors, Grameenphone Ltd.

Past Experience2017 – 2019 Head of Emerging Asia Cluster, Telenor ASA

2017 – 2019 Chair of the Board of Directors, Telenor Myanmar Ltd.

2017 – 2019 Chair of the Board of Directors, Telenor Pakistan Ltd.

2017 – 2019 Chair of the Board of Directors, Telenor Microfinance Bank, Pakistan

2017 – 2019 Director, Telenor Health

2015 – 2019 Chair of the Board of Directors, Digital Money Myanmar Limited, Myanmar

2016 – 2017 Chief Executive Officer, Grameenphone Ltd.

2016 – 2016 Head of Digital Services Division, Telenor ASA

2016 – 2016 Senior Vice President, Digital Business Telenor

2013 – 2016 Chief Executive Officer, Telenor Myanmar Ltd.

2012 – 2013 Chief Financial Officer, Total Access Communication PLC.

2010 – 2012 Chief Commercial Officer, Total Access Communication PLC.

Boonchai BenjarongkulChair of the Board of Directors


Number of shares held: 10 shares (0.00%) Number of shares held by spouse and minor children: None (0.00%)

•Academic Background Honorary Doctoral Degree in Economic Science, Ramkhamhaeng University, Thailand

B.Sc. in Management, Northern Illinois University, USA

Training Program Role of the Chair Program (11/2005) by Thai Institute of Directors Association (IOD)

Positions in Listed Companies in SET1990 – Present Chair of the Board of Directors, Total Access Communication PLC.

Positions in Other Companies or Organizations1998 – Present Chair, Ruam Duay Chuay Kan Sam Nuek Rak Ban Kerd Foundation

1990 – Present Chair of the Board of Directors, Benchachinda Holding Co., Ltd.

1989 – Present Chair of the Board of Directors, Private Property Co., Ltd.

Past Experience2002 – 2015 Director, United Distribution Business Co., Ltd.

2001 – 2006 Chair, Hornbill Research Foundation

2002 – 2005 Chief Executive Officer and President, United Communication Industry PLC.

2001 – 2002 Chief Executive Officer, Total Access Communication PLC.

2000 – 2001 Managing Director, Total Access Communication PLC.

1984 – 1999 Chair of the Executive Committee, United Communication Industry PLC.

Royal Decorations2015 The Knight Grand Cordon (Special Class) of the Most Noble Order

of the Crown of Thailand

2003 The Grand Cross (Third Class, Higher Grade) of the Most Illustrious Order of Chula Chom Klao

1997 The Knight Grand Cross (First Class) of the Admirable Order of the Direkgunabhorn

1994 The Knight Grand Cross (First Class) of the Most Noble Order of the Crown of Thailand

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Board of Directors. Annual Report 2019

Kamonwan WipulakornIndependent Director, Chair of the Audit Committee,

Member of the Remuneration Committee, and Member of the Corporate Governance Committee

Age: 57 Total Years of Directorship: 5 Years 1 Month


•Academic Background Master of Business Administration (Finance), Western Illinois University, USA

Bachelor of Arts in International Relations, Faculty of Political Sciences, Chulalongkorn University

Certificate Harvard Executive Program, Harvard Business School, Harvard University, USA

Certificate Stanford Executive Program, Stanford Center for Professional Development, Stanford University, USA

Training Program Board that Make a Difference (BMD) (8/2018) by Thai Institute of Directors Association (IOD)

Advanced Audit Committee Program (AACP) (29/2018) by Thai Institute of Directors Association (IOD)

Strategic Board Master Class Retreat (SBM) (2/2017) by Thai Institute of Directors Association (IOD)

CMA-Capital Market Academy Alumni 19

Director Certification Program (DCP) (122/2009) by Thai Institute of Directors Association (IOD)

Diploma Examination (Exam) (26/2009) by Thai Institute of Directors Association (IOD)

Positions in Listed Companies in SET2019 – Present Independent Director and Member of the Audit Committee, Star

Petroleum Refining Public Company Limited

2018 – Present Director, Origin Property PLC.

2017 - Present Chair of the Audit Committee, Total Access Communication PLC.

2014 - Present Member of the Corporate Governance Committee and Member of the Remuneration Committee, Total Access Communication PLC.

2014 - 2017 Member of the Audit Committee and Member of the Nomination Committee, Total Access Communication PLC.

2014 - Present Independent Director, Total Access Communication PLC.

2011 – 2017 Director and President, The Erawan Group PLC.

Past Experience2009 - 2010 Chief Financial Officer, The Erawan Group PLC.

Chulchit BunyaketuIndependent Director, Chair of the Remuneration Committee, Member of the Audit Committee, and

Member of the Nomination Committee


Number of shares held: None (0.00%) Number of shares held by spouse and minor children: 15,000 shares (0.00%)

•Academic Background Master of Arts in Political Science, Kent State University, USABachelor of Law, Chulalongkorn University, Thailand

Training Program Director Accreditation Program (DAP) (38/2005) by Thai Institute of Directors Association (IOD)

Positions in Listed Companies in SET2017 - Present Chair of the Remuneration Committee, Member of the Audit

Committee, Total Access Communication PLC.

2015 – Present Director, BTS Group Holdings PLC.

2014 – Present Chair of the Board of Directors, WP Energy PLC.

2013 – 2017 Member of the Corporate Governance Committee, Total Access Communication PLC.

2006 – Present Member of the Nomination Committee, Total Access Communication PLC.

2006 – 2017 Chair of the Audit Committee, Total Access Communication PLC.

2000 – Present Independent Director, Total Access Communication PLC.

Positions in Other Companies or Organizations2016 – Present Advisor, King Power Group

2012 – Present Chair of the Board of Directors, dtac TriNet Co., Ltd.

2004 – Present Director, King Power Duty Free Co., Ltd.

2004 – Present Director, King Power Development Co., Ltd.

2004 – Present Director, King Power Marketing and Management Co., Ltd.

2004 – Present Director, King Power Hotel Management Co., Ltd.

2004 – Present Director, King Power Entertainment Co., Ltd.

2004 – Present Director, King Power Suvarnabhumi Co., Ltd.

1996 – Present Member of the Executive Committee, Royal Thai Army Radio and Television Channel 5

Past Experience2004 – 2016 Group Vice Chair, King Power Group

1998 – 2003 Managing Director, Thai Oil Power Co., Ltd.

1998 – 2003 Managing Director, Thai Oil Co., Ltd.

1994 – 1998 Deputy Managing Director, Thai Oil Co., Ltd.

34

Chananyarak PhetcharatIndependent Director, Chair of the Corporate Governance

Committee, Member of the Nomination Committee, and Member of the Remuneration Committee



•Academic Background Master Degree in MIS, West Virginia University, USA

Certificate, Berkeley Executive Coaching Leadership

Certificate, Special Management Program, Marshall University, USA

Bachelor Degree in Accounting, Ramkhamhaeng University

Training Program Director Accreditation Program (DAP) (162/2019) by Thai Institute of Directors Association (IOD)

CMA - Capital Market Alumni 14


Enhancing Strategic Competitiveness by IMD Switzerland

Positions in Listed Companies in SET2019 – Present Director and Chief Executive Officer, Mc Group Public Company

Limited

2017 - Present Member of the Nomination Committee and Member of the Remuneration Committee, Total Access Communication PLC

2013 - Present Chair of the Corporate Governance Committee, Total Access Communication PLC.

2011 - Present Independent Director, Total Access Communication PLC.

Position in Other Companies or Organizations2015 – Present Director, TLCA Thai Listed Companies Association

2014 - Present Director, dtac TriNet Co., Ltd.

Past Experience2008 - 2019 Managing Director, DHL Express International (Thailand) Ltd.

2004 - 2008 Managing Director, Mobile Devices Sector, Motorola (Thailand) Ltd.

1998 - 2002 General Manager, Oracle Cooperation (Thailand)

Stephen Woodruff FordhamIndependent Director, Chair of the Nomination

Committee, Member of the Audit Committee, and Member of the Corporate Governance Committee


Number of shares held: 10,000 shares and 6,000 NVDRs (0.00%) Number of shares held by spouse and minor children: None (0.00%)

•Academic Background MA Jurisprudence, Oxford University, UK

Training Program Director Certification Program (DCP) (203/2015) by Thai Institute of Directors Association (IOD)

Positions in Listed Companies in SET2017 - Present Member of the Corporate Governance Committee, Total Access

Communication PLC.

2012 - Present Chair of the Nomination Committee, Total Access Communication PLC.

2007 - Present Independent Director and Member of the Audit Committee, Total Access Communication PLC.

Position in Other Companies or Organizations2017 – Present Director, High Arctic Energy Services (Singapore) Pte Ltd

2011 - Present Director, Ceona Pte. Ltd.

2008 - Present Chair, Gram Car Carriers Holdings Pte. Ltd.

2006 - Present Director, Klaveness Asia Pte. Ltd.

1998 - Present Director, Stockbridge Pte. Ltd.

1995 - Present Chair, Masterbulk Private Limited

Past Experience2007 - 2017 Chair of the Remuneration Committee, Total Access

Communication PLC.

2007 - 2012 Independent Director and Chair of the Nomination and Remuneration Committee, Thoresen Thai Agencies PLC.

35


Sverre PedersenDirector



•Academic Background M.Sc.E.E. Norwegian Institute of Technology (NTNU)

MBA Norwegian School of Management (BI)

Positions in Listed Companies in SET2017 - Present Director, Total Access Communication PLC.

Position in Other Companies or Organizations2018 - Present Director, Canal Digital AS

2017 - Present Senior Vice President, Head of Strategy, Telenor Group

Past Experience2016 - 2017 Director, TeleAssets Company Limited

2015 - 2017 Chief Financial Officer, Total Access Communication PLC.

2015 - 2017 Director, DTAC Broadband Co., Ltd.

2015 - 2017 Director, PaySbuy Co., Ltd.

2015 Senior Vice President, Strategic Finance, Total Access Communication PLC.

2011 - 2015 Director M&A, Telenor Group

2007 - 2011 Vice President, Telenor Group

Tone RipelDirector



•Academic Background Master of Law, University of Oslo, Norway

Training Program The Mandatory Accreditation Programme (MAP) by Bursa Malaysia Securities Berhad

Positions in Listed Companies in SET2016 - Present Director, Total Access Communication PLC.

Position in Other Companies or Organizations2015 - Present Director, Telenor Networks Holding AS

2013 - Present Attorney at Law, Telenor ASA

Past Experience2018 - 2019 Director, DiGi.com Berhad and DiGi Telecommunications Sdn Bhd

2017 - 2019 Director, Telenor Norge AS

2015 - 2016 Director, Telenor Business Partner Invest AS

1999 - 2012 Associated attorney and senior attorney, Wiersholm Lawfirm

1996 - 1999 Higher executive officer, advisor and senior advisor, Norwegian Competition Authority

36

Rakesh JainDirector, Member of Corporate Governance Committee, Member of the Nomination Committee, and Member of

the Remuneration Committee

Age: 45 Total Years of Directorship: 0 Year 1 Month


•Academic Background B.Tech Electronics & Communications, R.E.C Kurukshetra, Kurukshetra University, Haryana

Positions in Listed Companies in SET2019 - Present Director, Member of Corporate Governance Committee, Member

of the Nomination Committee, and Member of the Remuneration Committee, Total Access Communication PLC.

Position in Other Companies or Organizations2018 – Present Senior Vice President, Global Network, Telenor ASA

Past Experience2014 – 2018 Senior Vice President, Network Asia, Telenor ASA

2013 – 2014 Chief Technology Officer/ Network Head, Uninor, India

2012 – 2013 Planning Head, Uninor, India

2008 – 2012 Head of Radio Frequency Planning, Uninor, India

2007 – 2008 T-Mobile USA 3G Network Design for IL State, USA., CellCite Inc, USA

Christian Wulff Soendergaard Director, Member of Corporate Governance Committee, Member of the Nomination Committee, and Member of

the Remuneration Committee

Age: 39 Total Years of Directorship: 0 Year 1 Month


•Academic Background Master in Political Science, University of Copenhagen

Bachelor in Political Science, University of Copenhagen

Positions in Listed Companies in SET2019 - Present Director, Member of Corporate Governance Committee, Member

of the Nomination Committee, and Member of the Remuneration Committee, Total Access Communication PLC.

Position in Other Companies or Organizations2018 - Present Senior Vice President, Group Public and Regulatory Affairs,

Telenor ASA

Past Experience2017 – 2018 CCAO, Telenor Hungary

2016 – 2017 Vice President, Public and Regulatory Affairs, Europe, Telenor Group

2014 – 2016 Vice President, Public Affairs, Telenor Group

2013 – 2014 CEO, Radius Kommunikation

2012 – 2013 Director, Radius Kommunikation

2010 – 2012 Head of Corporate Communications, Telenor Denmark

2009 – 2010 Head of External Affairs, Telenor Denmark

2008 – 2009 Head of Public Affairs, Telenor Denmark

2007 – 2008 Assistant Political Advisor, Danish Embassy WDC

2004 – 2006 Senior Associate, Radius Kommunikation

37


39

Executive Management. Annual Report 2019

Alexandra ReichChief Executive OfficerNumber of shares held: None (0.00 %)

Number of shares held by spouse and minor children: None (0.00%)

•Academic Background Business Administration Degree, Vienna University of Economics and Business Administration

Past Experience2018 – Present Chief Executive Officer, Total Access

Communication PLC.

2018 – Present Director and Chief Executive Officer, dtac TriNet Co., Ltd.

2019 Acting Chief Marketing Officer, Total Access Communication PLC.

2018 – 2019 Director, Total Access Communication PLC.

2016 – 2018 Chief Executive Officer, Telenor Hungary

2014 – 2016 Head of Mobile Business & Digitalization – Enterprise Customers, Swisscom Switzerland AG

2011 – 2014 Head of Marketing & Sales for Consumer, Head of Mobile Business Consumer, Swisscom Switzerland AG

2009 - 2011 Head of Swisscom Omnichannel, Swisscom Switzerland AG

2007 – 2009 COO Consumer Customers, Sunrise Communications AG

2005 – 2007 COO, Hutchison 3G (HWL Group)

2004 – 2005 COO - Sales pitch, UTA – United Telecommunications Austria

2001 – 2004 General Manager Austria, T-Online (Deutsche Telekom Group)

2000 – 2001 General Manager Austria/Germany/Switzerland, Goyada – Swedish Startup

1997 – 2000 Product Marketing, Viag Interkom/Viag Telekom

1986 – 1997 Founder/General Manager, Communication Design

Prathet Tankuranun Chief Technology OfficerNumber of shares held: 10,000 shares (0.00%)

Number of shares held by spouse and minor children: 9,400 shares (0.00%)

•Academic BackgroundMaster of Electrical Engineering, Massachusetts Institute of TechnologyMaster of Business Administration (Executive Program), Sasin Graduate Institute of Business Administration of Chulalongkorn University

Past Experience2015 - Present Chief Technology Officer, Total Access

Communication PLC.

2015 - Present Director, dtac TriNet Co., Ltd.

2013 - 2014 Chief Technology Officer, Telenor Myanmar Limited

2011 - 2013 Senior Vice President, Network Operations Division, Total Access Communication PLC.

2010 - 2011 Senior Vice President, Engineering Division, Total Access Communication PLC.

2009 - 2010 Vice President, Network Design and System Infrastructure Department, Total Access Communication PLC.

2005 - 2009 Vice President, Transmission Department, Total Access Communication PLC.

2001 - 2005 Head of Engineering, Satellite Engineer, Pacific Century Matrix (Hong Kong)

1996 - 2000 Satellite Engineer, L-Star Program, Asia Broadcasting and Communication Network/Teles at Canada

Dilip PalChief Financial OfficerNumber of shares held: None (0.00%)


•Academic BackgroundMaster’s degree in Commerce, Calcutta University, India

Bachelor of Commerce (Hons), Goenka College of Commerce, India

Chartered Accountant, Institute of Chartered Accountants of India

Cost Accountant, Institute of Cost and Works Accountants of India

Past Experience2017 – Present Chief Financial Officer, Total Access

Communication PLC.

2014 – 2017 Chief Financial Officer, Grameenphone Ltd.

2012 – 2014 Executive Vice President, Finance, Vodafone

2008 – 2010 Senior Vice President, Finance and Accounts, Vodafone

2006 – 2008 Assistant Vice President, Finance, Vodafone

2004 – 2006 General Manager, Finance, Hutchison Essar

1999 – 2004 Senior Finance Manager, Hindustan Coca-Cola Beverages

1993 – 1999 Finance Manager, TATA Tinplate

Executive Management*

* Management under definition of SEC

40

Rajiv BawaChief Business OfficerNumber of shares held: None (0.00%)


•Academic Background Masters in Computer Science, University of Maryland, USA

Bachelor of Technology, Computer Engineering, Manipal Institute of Technology, India

Certificate in Management, Wharton School of Business, University of Pennsylvania, USA

Past Experience2019 – Present Chief Business Officer, Total Access

Communication PLC.

2018 – 2019 Acting Chief Sales Officer, Total Access Communication PLC.

2017 – 2019 Chief Corporate Affairs Officer, Total Access Communication PLC.

2016 – 2017 Head of Public & Regulatory Affairs, Telenor Group, Asia

2015 – 2016 Acting Chief Corporate Affairs Officer, Total Access Communication PLC.

2011 - 2015 Chief Representative Officer, Telenor Group, India

2008 – 2011 Chief Corporate Affairs Officer, Unitech Wireless Pvt Ltd, India

2009-2011 Chief Corporate Affairs Officer, Uninor (Telenor Group India)

2002-2008 Business Development Executive, IBM Corporation NY

2000-2001 Director Business Development, ExpertCommerce NY

1994-2000 Senior Engagement Manager, IBM Consulting Group, Philadelphia

Nardrerdee Arj-HarnwongseChief People OfficerNumber of shares held: None (0.00%)


•Academic Background Master of Arts in Human Resources Development, Webster University, Missouri, USA

Bachelor of Arts majoring in English, Chulalongkorn University

Past Experience2015 - Present Chief People Officer, Total Access

Communication PLC.

2009 - 2015 Vice President, Human Resources Thailand, Myanmar, Cambodia & Laos, Unilever Thai Holdings Limited

2007 - 2009 Head of Human Resources, Sub-Region Asia North (Thailand, Bangladesh, Vietnam, Cambodia and Korea), Nokia Siemens Networks (Thailand) Ltd.

2004 - 2007 Human Resources Manager for Indochina (Thailand, Vietnam, Cambodia & Laos), Nokia (Thailand) Ltd.

1993 - 2004 Assistant Vice President, Human Resources, Retail Operations, Ek-Chai Distribution System Co. Ltd.

Tipayarat Kaewsringarm Chief Sales OfficerNumber of shares held: None (0.00%)


•Academic Background Master’s Degree in Business Administration, Saint Louis University, USA

Bachelor’s Degree in Business Administration, Southern Illinois University, USA

Past Experience2019 - Present Chief Sales Officer, Total Access

Communication PLC.

Feb 2018 – Jan 2019 Deputy Chief Executive Officer, Metro Wholesale Myanmar Ltd.

Aug – Dec 2016 Advisor, Banpu Power PLC.

Oct 2015 - May 2016 CEO Advisor, Total Access Communication PLC.,

Oct 2014 – Sep 2015 Interim Chief People Officer, Total Access Communication PLC.

Jul 2013 - Apr 2015 Chief People Officer, Telenor Myanmar

Jul 2011 - Mar 2013 Chief People Officer, Total Access Communication PLC.

Feb 2008 - June 2011 Chief Customer Officer, Total Access Communication PLC.

41

Executive Management. Annual Report 2019

How Lih Ren Chief Marketing OfficerNumber of shares held: None (0.00%)


•Academic Background Senior Executive Programme at the London Business School

Bachelor of Science (Honours) in Computer Science from Coventry University, UK

Past Experience2019 – Present Chief Marketing Officer, Total Access

Communication PLC.

2011 – Mar 2019 Head of iTelco, Digi Telecommunciations Sdn Bhd.

2002 – 2011 Senior Manager, Deloitte Consulting

Marcus Adaktusson Chief Corporate Affairs OfficerNumber of shares held: None (0.00%)


•Academic Background Master of Science (M.Sc.), Business/Management, Stockholm School of Economics (SSE) Stockholm, Sweden

Past Experience2019 – Present Chief Corporate Affairs Officer, Total

Access Communication PLC.

2017 – 2019 Vice President Public & Regulatory Affairs and Corporate Communication, Region Asia, Telenor Group (Singapore)

2015 – 2017 Vice President Communications, Region Asia, Telenor Group (Singapore)

2013 – 2015 Director Communications, Grameenphone Ltd. (Bangladesh)

2010 – 2013 Director Communications, Telenor Sweden AB (Sweden)

2008 – 2010 Press officer & Communications Strategist, Telenor Sweden AB (Sweden)

2005 – 2007 Communications Consultant, Diplomat Communications AB (Sweden)

Haakon Bruaset Kjoel Chief Strategy and Transformation OfficerNumber of shares held: None (0.00%)


•Academic Background Master of Business Administration (Executive), BI Norwegian Business School

Public Relations, BI Norwegian Business School (Norges Markeds Hoyskole)


Director Course in 2018: INSEAD - Leading from the Chair Programme, Fountainbleu, France

Past Experience2019 – Present Chief Strategy and Transformation

Officer, Total Access Communication PLC.

2019 – Present Director, Telenor Health AS

2018 – Present Senior Vice President, Partner and External Relations Asia, Telenor Group

2017 – Present Chair of the Board of Directors, DiGi Telecommunications Sdn Bhd

2017 – Present Chair of the Board of Directors, Member of Nomination Committee, Chair of Remuneration Committee, DiGi.Com Berhad

2016 - Present Director and Member of the Audit Committee, Telenor Myanmar Ltd.

2016 - Present Director and Member of the Audit Committee, Telenor Pakistan Ltd.

2011 - Present Director and member of the Nomination and Remuneration Committee, Grameenphone Ltd.

2011 - Present Director, Telenor Asia Pte. Ltd.

2018 – 2018 Acting Executive Vice President and Chief Corporate Affairs Officer, Telenor Group (July to November)

2016 – 2018 Senior Vice President, Head of Group Public and Regulatory Affairs, Telenor Group

2014 - 2019 Director, Member of the Remuneration Committee and Member of the Nomination Committee, Total Access Communication PLC.

2011 - 2013 Director, Total Access Communication PLC.

2008 - 2016 Senior Vice President, Corporate Affairs Asia, Telenor Group

42

CORPORATE INFORMATION

NAME

SYMBOL

REGISTERED NUMBER

TYPE OF BUSINESS

REGISTERED CAPITAL

PAID-UP CAPITAL

ADDRESS

TEL:

WEBSITE:


DTAC

0107538000037

Operates telecommunication business and other related business

THB 4,744,161,260 (2,372,080,630 ordinary shares of THB 2 per share)

THB 4,735,622,000 (2,367,811,000 ordinary shares of THB 2 per share)

319 Chamchuri Square Building, 41st Floor, Phayathai Road, Pathumwan Sub-district, Pathumwan District, Bangkok 10330

(66 2) 202 8000

www.dtac.co.th

Mr. Sirawit Klabdee*Company SecretaryNumber of shares held: 300 shares (0.00%)


•Academic BackgroundMaster of Business Administration, major in Finance and Marketing (honors), Sasin Graduate Institute of Business Administration, Chulalongkorn University

Bachelor of Business Administration, major in Banking and Finance (second class honors), Chulalongkorn University

Past Experience2019 – Present Company Secretary and Investor

Relations, Senior Vice President, Head of Investor Relations Division, Total Access Communication PLC.

2017 – 2019 Senior Vice President, Head of Corporate Development Division, Total Access Communication PLC.

2017 Senior Vice President, Head of Corporate Finance Division, Total Access Communication PLC.

2016 Senior Vice President, Head of Strategic Finance Department, Total Access Communication PLC.

2013 – 2016 Head of Financial Planning & Analysis Department, Telenor Myanmar Limited

2012 – 2013 Senior Vice President, Head of Financial Planning & Controlling Department, Total Access Communication PLC.

2011 – 2012 Senior Vice President, Head of Business Planning & Analysis Division, Total Access Communication PLC.

2011 Senior Vice President, Investment Banking Division, Wholesale Banking Group, The Siam Commercial Bank PLC.

2009 – 2011 Vice President, Corporate Finance Division, Wholesale Banking Group, The Siam Commercial Bank PLC.

2008 – 2009 Deputy Vice President, Corporate Finance Department, SCB Securities Co., Ltd.

* Management under definition of SEC

43

Corporate Information. Annual Report 2019

REFERENCES

SHARE REGISTRAR

AUDITOR

DEBENTURE REGISTRAR OF DTAC TRINET CO. LTD.WHICH IS A WHOLLY OWNEDSUBSIDIARIES OF THE COMPANY (99.99%)

Thailand Securities Depository Company Limited 93 Ratchadapisek Road, Dindaeng Sub-district, Dindaeng District, Bangkok 10400

Tel: (66 2) 009 9000

Fax: (66 2) 009 9991

Call Center: (66 2) 009 9999

Website: http://www.set.or.th/tsd

Mrs. Gingkarn Atsawarangsalit

Certified Public Accountant No. 4496

EY Office Limited

33rd Floor, Lake Rajada Office Complex, 193/136-137 Ratchadapisek Road,Klongtoey Sub-district, Klongtoey District, Bangkok 10110

Tel: (66 2) 264 0777

Fax: (66 2) 264 0789-90

Website: www.ey.com

Bangkok Bank Public Company Limited

333 Silom Road, Silom Sub-district, Bangrak District, Bangkok 10500

EY Office Limited

Tel: (66 2) 230 1478Fax: (66 2) 626 4545-6Website: www.bangkokbank.com

44

Group Structure. Annual Report 2019

45

GROUP STRUCTURE

Group Structure


• dtac Accelerate Co., Ltd. (99.99%)

• dtac Digital Media Co., Ltd. (99.99%)

• TeleAssets Co., Ltd. (99.97%)

• Eastern Beach Co., Ltd. (99.99%)

DTAC Broadband Co., Ltd.

(99.99%) PaySbuy Co., Ltd.

(99.99%)

dtac TriNet Co., Ltd.

(99.99%)TAC Property Co., Ltd.

(99.99%)

United Communication Industry Public Company Limited

(99.81%)

WorldPhone Shop Co., Ltd.

(99.99%)

46

dtac is one of the largest wireless communication service providers in Thailand. The Company was established in 1989 to operate telecommunication, mobile business, and internet Wi-Fi.

In December 2012, dtac TriNet Co., Ltd. “dtac TriNet” (formerly known as DTAC Network Co., Ltd.), a wholly-owned subsidiary of dtac, was granted the 15-year spectrum license for International Mobile Telecommunications (IMT) in the frequency band 2100 MHz and type III license for providing wireless communication services from the NBTC.

In 2018, TeleAssets Co., Ltd. (a subsidiary of dtac which its 99.99% shares held by dtac TriNet) and dtac TriNet have signed the Lease of Telecommunication Equipment Agreement and Domestic Roaming Service Agreement to launch the country’s first 4G LTE-TDD network on the widest bandwidth of 60 MHz in 2300 MHz spectrum.

In December, 2018 dtac TriNet received spectrum licenses for the 900 MHz and 1800 MHz bands from NBTC and, in June 2019, dtac TriNet was a licensee of 700 MHz allocated by NBTC. dtac now provides service on a complete spectrum portfolio including both low-band and high-band frequencies, forming a total of 130 MHz bandwidth with 80 MHz used for downlink.

At the end of 2019, dtac had 10 subsidiaries, and 2 associated companies (under definition of the Notification of Office of Securities and Exchange Commission), namely, (1) United Distribution Business Co., Ltd. and (2) Clearing House for Number Portability Co., Ltd.*

During year 2019, there are 4 subsidiaries under the dissolution procedure, namely, (1) dtac Digital Media Co., Ltd. (2) Eastern Beach Co., Ltd. (3) DTAC Broadband Co., Ltd. And (4) PaySbuy Co., Ltd. Moreover, there are 2 subsidiaries which complete liquidation, namely, (1) dtac Next Co., Ltd. And (2) dtac Service Co., Ltd.

dtac has continued our focus on mobile business and to invest in the subsidiaries with the purpose to mainly support its core business and asset management. Furthermore, dtac is committed to invest in businesses that create long term value for our shareholders.

Remark: *the Company does not have significant influence on this company and hence this company does not qualify as associate as presented in the Company’s financial statements.

Details of Subsidiaries and Associated Companies as of 31 December 2019

Company’s Name Address Nature of Business Registered Capital

(THB Million)

Share Types Percentage of Shareholding

(%)

Total Shares of each

Company

DTAC Broadband Co., Ltd. 319 Chamchuri Square Building, 41st Fl., Phayathai Rd., Pathumwan, Bangkok 10330 Tel: +66 2202 8000 Registered number: 0105549034424

Under liquidation process 175 Ordinary shares

99.99 1,750,000

dtac TriNet Co., Ltd. 319 Chamchuri Square Building, 41st Fl., Phayathai Rd., Pathumwan, Bangkok 10330 Tel: +66 2202 8000 Registered number: 0105549034548

Providing telecommunications services

1,160 Ordinary shares

99.99 11,600,000

dtac Digital Media Co., Ltd. 319 Chamchuri Square Building, 41st Fl., Phayathai Rd., Pathumwan, Bangkok 10330 Tel: +66 2202 8000 Registered number: 0105549034467


99.99 (through dtac

TriNet Co., Ltd.)

1,000,000


47


(THB Million)


(%)


Company

dtac Accelerate Co., Ltd. 319 Chamchuri Square Building, 2nd Fl., Phayathai Rd., Pathumwan, Bangkok 10330 Tel: +66 2202 8000 Registered number: 0105557065767

Investment and support start-up companies to develop applications

15 Ordinary shares

99.99 (through dtac

TriNet Co., Ltd.)

150,000

PaySbuy Co., Ltd. 319 Chamchuri Square Building, 41st Fl., Phayathai Rd., Pathumwan, Bangkok 10330 Tel: +66 2202 8000 Registered number: 0125547001804


99.99 2,000,000

TeleAssets Co., Ltd. 319 Chamchuri Square Building, 41st Fl., Phayathai Rd., Pathumwan, Bangkok 10330 Tel: +66 2202 8000 Registered number: 0105559061246

Lease of telecommunication equipment and device

1 Ordinary shares

99.97 (through dtac

TriNet Co., Ltd.)

10,000

TAC Property Co., Ltd. 319 Chamchuri Square Building, 41st Fl., Phayathai Rd., Pathumwan, Bangkok 10330 Tel: +66 2202 8000 Registered number: 0105539049038

Asset management 1 Ordinary shares

99.99 100,000

Eastern Beach Co., Ltd. 319 Chamchuri Square Building, 41st Fl., Phayathai Rd., Pathumwan, Bangkok 10330 Tel: +66 2202 8000 Registered number: 0105532038740


99.99 (through

TAC Property Co., Ltd.)

800,000

48


(THB Million)


(%)


Company


319 Chamchuri Square Building, 41st Fl., Phayathai Rd., Pathumwan, Bangkok 10330 Tel: +66 2202 8000 Registered number: 0107536000871

Under liquidation process 313.55 Ordinary shares

99.81 434,668,207

WorldPhone Shop Co., Ltd. 319 Chamchuri Square Building, 41st Fl., Phayathai Rd., Pathumwan, Bangkok 10330 Tel: +66 2202 8000 Registered number: 0105539069969


99.99 4,500,000

United Distribution Business Co., Ltd.* (UD)

499 Moo 3, Benchachinda Building, Kamphaeng Phet 6 Rd. Ladyao, Chatuchak, Bangkok 10900 Tel: +66 2953 2222 Fax: +66 2953 1269 Registered number: 0105545040951

Sale of mobile phone, SIM card, voucher card and supplementary equipment

200 Ordinary shares

25 20,000,000

Clearing House for Number Portability Co., Ltd.

98 Sathorn Square Office Tower, Room 403, 4th Fl., North Sathorn Rd., Silom, Bangrak, Bangkok 10500 Tel: +66 2108 1544 Fax: +66 2108 1544 Registered number: 0115553001471

Operating the Information System and the centralized database for the number portability service

2 Ordinary shares

20 (by dtac and through dtac

TriNet Co., Ltd.)

20,000

Remark TThe remaining 75% of total shares are held by Benchachinda Holding Co., Ltd. Although Benchachida Holding Co., Ltd., who is a related party to the Company, holds 75% of total shares in UD may have a conflict of interest with the Company, the Company believes that the shareholding structure will deliver the greatest benefit to the Company as the Company’s main business is not distribution which will create more burden in managing inventory and logistics system. Furthermore, the Company has preventive measure and strict policy governing connected party transactions that may lead to conflict of interests to ensure that they are in compliance with SET’s rules and regulations concerning connected party transactions.

As of 30 April 2019, Benchachinda Holding Co., Ltd. has the following shareholders: Mr. Boonchai Bencharongkul 40.0% Mr. Vichai Bencharongkul 30.0% Mrs. Wanna Jirakitti 15.0% Mr. Somchai Bencharongkul 15.0%


49

BUSINESS PERFORMANCE AND OUTLOOK

50

Business Performance and OutlookOperational HighlightsIn FY19, dtac focused on continuation of network improvement and customer experience enhancement, with the rollout and optimization of 2300 MHz network in order to provide a consistent customer experience. Network NPS improved and network complaints reduced significantly in this year. At the end of FY19, a total of approximately 17,400 nodes of 4G-2300 MHz network were installed, an additional of approximately 4,700 during the year.

In FY19, dtac also participated in the 700 MHz allocation and got allocated 2x10 MHz of 700 MHz with validity of 15 years in which the license is scheduled to commence potentially in Q420. By acquiring the 700 MHz, dtac is also eligible for the 900 MHz payment term extension, and the adjustments in our booking related to the 900 MHz payment term extension has already been reflected in FY19.

The swapping of 850 MHz equipment with 900 MHz equipment is planned to be concluded in 2020 as some delays expected, pending filter installation by CAT and finalizing funding for cost of filter installation. Regulatory process is still ongoing, however, more clarity is expected in Q120.

Market was relatively rational both in prepaid segment and postpaid segment when compared with last year and growing overall driven by strong demand for data and shift towards postpaid. While competition in postpaid was relative stable in FY19, unlimited prepaid acquisition data packages were removed in Q219 and got replaced by aggressive fixed data volume packages with unlimited anynet voice in Q319 by all operators. Heightened activities were observed in Q419 with unlimited prepaid acquisition data package reintroduced nationwide by all operators.

At the end of FY2019, total subscriber base stood at 20.6 million, declining 560k from the end of last year, due to the decline in prepaid segment from end of concession and remedy period as well as seasonal and rotational churn, which was partly offset by growth in postpaid segment. Prepaid subscriber base was 14.2 million, declining 917k from FY2018 but increasing 181k QoQ in Q419. Postpaid subscriber base increased by 357k to 6.4 million. Average Revenue per User excluding IC (ARPU) for FY2019 was THB 254 per month, showing a growth of 5.0% YoY. At the end of FY2019, postpaid subscriber base accounted for approximately 31% of total subscriber base. Postpaid ARPU for FY2019 was THB 549 per month, increasing 3.1% YoY, while prepaid ARPU was THB 137 per month, dropped 4.1% YoY, driven by lower prepaid revenue.

Financial HighlightService revenues excluding IC in Q419 increased by 3.1% YoY, bringing a reduction of service revenues excluding IC in FY19 to 1.6% YoY. Core service revenues (defined by bundle of voice and data service revenues) in FY19 increased by 0.1% YoY.

EBITDA (before other items) dropped 9.3% YoY in FY19 primarily due to cost base reset from end of concession with higher network OPEX from expanded network, as well as CAT lease costs, partially offset by a reduction in regulatory costs. EBITDA margin for FY19 was 31.3%. However, excluding revenues from CAT lease agreements and TOT network rental, EBITDA margin stood at 35.6%. Net profit for FY19 amounted to THB 5,899 million.

In FY19, dtac made all payments under the Disputes Settlement Agreement with CAT, subsequent to relevant court orders for cases withdrawal.

At the end of FY19, total assets amounted to THB 143,049 million, decreasing from THB 150,958 million at the end of FY18. Cash and cash equivalent amounted to THB 8,528 million, decreasing from THB 14,090 million at the end of FY18 due mainly to one-off CAT settlement. Interest-bearing debt increased from THB 47,000 million at the end of FY18 to THB 49,000 million. Net debt to EBITDA was 1.6x, increasing from 1.2x at the end of FY18.

CAPEX in FY19 amounted to THB 13,006 million which reflected continue network rollout. Operating cash flow (defined by EBITDA-CAPEX) amounted to THB 12,735 million.

Overall Market EnvironmentThai telecommunication market is complex, and technology driven. Customers need convenience, trust and individual appreciation from operators. In this regard, dtac commits to be Simple, Honest and Human, to be connected with what its customers want. In addition, dtac is positioned to provide unbuffered video experience nationwide. This means that dtac will plan its network capacity upgrades to guarantee at least unbuffered HD video quality in busy hours as well as improve its network coverage both indoor and outdoor nationwide. The acquisition of 900 MHz and 700 MHz spectrums, together with the densification of TOT’s 2300 MHz network would help create the most enjoyable customer’s experience and seamless usage.

The core commitment of dtac is to provide the best services to its customers with transparent communication and best care. Driving competitive market position, it has focused on three strategic areas 1) Consistent customer centric network experience 2) Win back B2C and 3) Address B2B opportunity.

51

Annual Report 2019Business Performance and Outlook.

1) Consistent customer centric network experience

Massive densification of network is part of dtac’s core focus to provide the best service experience to its customers. In the past year, as a partner of TOT, dtac has been selectively densified TOT’s 2300 MHz network and migrated customers to TDD network, a more advanced mobile network with more capacity for a smoother experience even in dense areas with many users. This partnership with TOT’s 2300 MHz high-band spectrum, combined with existing 2100 MHz and 1800 MHz, and the latest secured spectrum license on 700 MHz and 900 MHz; will put dtac in a strong position in providing consistent data network experience to best serve the customer needs. By addressing this network gap towards competition, dtac believes it will be able to regain its market share.

2) Win back B2C

To win back the customers, dtac has emphasized keeping momentum on postpaid, stabilizing prepaid and enhancing customer experience across touchpoints. With the right offer and strong sales execution, dtac believes that it will be able to win back the customers resulting in positive results.

Postpaid SegmentGrowing postpaid momentum in 2019 was mainly driven by differentiated offers in data and device as well as network experience improvement. Throughout the year, dtac continuously puts customer experience at the heart of the services to offer simple, easy and worry-free solutions.

In Q3 2019, dtac launched new postpaid portfolio called ‘dtac GO’ and ‘GO Travel’ topping to disrupt international roaming market, targeting occasional and frequent Thai travelers. This is the first time in Thailand that postpaid plan has bundled domestic package with roaming data to allow seamless connectivity locally and abroad with no sim change. Additionally, to differentiate and create easy device ownership, dtac has been piloting device financing campaign, an innovative device offer that customers can purchase top-tier smart phone with no credit card and prepayment upfront.

dtac also cares for its customers by investing in loyalty program with various lifestyle benefits, which helps sustaining high value customer segment. dtac customers can enjoy privileges in different tiers in an easy and simple redemption with no points needed.

Prepaid SegmentAmid fierce competition in prepaid market, dtac’s prepaid daily revenue has been maintained since the beginning of 2019. To stabilize prepaid business, driving quality subscribers and engagement are its core focus. In this regard, dtac has maintained competitive offering and launched many consumer campaigns throughout the year.

To highlight this, dtac introduced Thailand’s first CRM for prepaid customers called “Jaidee Jaek Suk” to retain customers in Q3 2019. Under this program, prepaid users are entitled to lucky draws worth 20 million baht and other benefits when they top-up and stay with dtac. Moreover, dtac also launched three new SIMs targeting different mass Thai segments; data sim for heavy internet usage, voice sim for heavy calling usage and sim for gamer segment. dtac has partnered with Garena, one of the biggest Online Games Providers, to offer this special package with zero rated data for Free Fire and gaming items exclusively for dtac customers.

Additionally, dtac has maintained its position as the market leader in two special segments, namely, Migrant and Tourist. It continuously offers the right SIM and prepaid package targeting migrant and tourist in different countries with on-ground activities to promote awareness and build strong engagement.

Enhance customer experience with data analytics and consistent communication

dtac has been combining digital and human touch embracing omni-channel approach by providing best experience in digital channels and digitizing processes and tools to amplify best service at physical channels. It continues to improve journey of dtac App (end consumer app) and dtac One (seller app for dtac partners) to enable dtac to directly connect with customer with seamless and consistent experience across channels.

Data analytics have also been used to provide more personalized offers along customers’ lifetime for both prepaid and postpaid customers, by synchronizing offers to be seamless across channels. Each customer can see their relevant offers at the right moment and right channel. Not only used for personalized offer and service, dtac also used data analytics in many areas to improve efficiency, mitigate risk and create incremental value e.g. network value-based roll out, predictive network maintenance, lifestyle and rewards, and commission optimization, etc.

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In terms of communication, dtac has strengthened its brand on “Never stop” through media communication and commercial activities to reflect what it does and what it says to customers. Its communication focused to drive emotional bonding and differentiation with Thais as the brand they love through relevance and consistent storytelling.

3) Address B2B opportunity

In 2019, dtac had put focus on the Business to Business segment as another strategic area. During the course of this year, strong steps were taken to develop more emphasis on this segment to improve the customer experience and simplify the product portfolio. The changes were mainly centered around promoting transparency and improving customer confidence and trust with dtac business offerings. dtac improved the customer journey; products and solutions offerings with a Worry-free portfolio for small and medium enterprises (SMEs), initiated advance business solutions investment, re-visited and launched many new sales channels to better serve the dtac business customers. With some of these changes already implemented and many under way dtac see good momentum in business performance. There is a significant increase of new acquisition across all channels and overall improvement in dtac business customer experience.

Competition and Business OutlookThailand’s telecom industry continues to grow, driven by increasing ARPU levels and a moderate increase in SIM penetration. Like in previous years, voice and messaging services continue to decline. Growth comes, for a large part, from prepaid to postpaid conversion that operators actively promote and growing data consumption. Competition is high - especially prepaid with aggressive acquisition price plans providing unlimited data and unlimited any net voice call and changing every month to attract customers. Marketing and advertising spending increased marginally versus 2018 with more efficiency thanks to a shift from traditional media to digital media. In addition, device proposition remained an important acquisition tool.

Despite high spectrum prices and intense competition, the telecom industry in Thailand remains a profitable market and revenue for the period 2019-2021 is expected to continue to grow. In 2019, dtac managed to stabilize and start to turn around from Q2 onward. This is mainly due to focused efforts to improve network NPS via a continued rollout of TOT’s 2300 MHz sites, the deployment of new sites and capacity upgrades. Furthermore, dtac simplified its product portfolio, optimized its distribution and made personalized offers to its customers based on data analytics.

dtac currently has one of the highest download bandwidths in the market and with the acquisition of 700 MHz, dtac has a strong low band spectrum position. In Q4 2019, it already started to swap 850 MHz equipment with 700/900 MHz equipment to prepare for the end of the 850 MHz grace period. Once the 700 MHz spectrum is ready for use, dtac 4G coverage position will improve significantly. Furthermore, dtac is well prepared for an upcoming 5G launch. dtac already has 100% virtualized data core, has completed a 5G EPC trial, more than 90% of its sites are fiberized, phase sync is in place. dtac is deploying 5G-ready equipment for its 700/900 MHz deployment.

Looking at 2020, some key challenges and opportunities may have a large impact on dtac performance:• Customers increasing adoption of digital services and channels,

which give dtac both new revenue from online sales and also cost savings from reduced physical sales and support. At the same time, it remains critical for dtac to keep a strong relationship with its customers through an omni-channel approach.

• Digitization of the core, which allows dtac to be much more efficient and provide more customized and relevant sales, marketing and care services to its customers

• Spectrum auctions in early 2020 of 700 MHz, 1800 MHz, 2600 MHz and mmWave band will shape how dtac can roll out 5G services to its customers

Given dtac’s network position, a strong emotional connect with its customers and continued efforts to provide seamless customer journeys and data-driven personalized offerings, dtac is confident it can continue to participate in market growth as well as deliver strong cash flows. This includes innovative growth opportunities that arise from 5G, IoT, Fixed Wireless, Data as a Service, AI & Machine Learning.

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Annual Report 2019Business Performance and Outlook.

Long-term objectives over the next 3-5 yearsdtac strives to open a whole world of amazing opportunities for its customers, based on a deep understanding of their needs. dtac believes in challenging the status quo, customer obsession, honesty, simplicity and fun.

Key focus areas over the next 3-5 years are:

1. Growth

The Company will continue to build strong and engaging customer relationships through digital and physical interactions. dtac’s new network position, with 700 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz in partnership with TOT, and future 5G spectrum is the key platform of growth. With continued investments in network quality, dtac is in a position to provide its customers with unbuffered video experience nationwide at a competitive price point. As simple, honest and human operator, dtac will offer the most relevant, enriched and personalized products and engage in productive partnerships to enrich its product portfolio. dtac will continuously simplify customer journeys and scale personalized interactions thus providing a seamless experience across all touchpoints.

dtac will also explore growth opportunities in collaboration with Large Enterprises and leverage digital tools for SME journeys. dtac plans to be an early mover in 5G and focus on Internet of Things by launching a selected vertical and horizontal IoT offerings. dtac has already taken steps to be ready for 5G. dtac has a 100% virtualized data core, has completed a 5G EPC trial, more than 90% of its sites are fiberized, phase sync is in place and will use 5G-ready equipment for the 700/900 MHz deployment.

2. Efficiency and Simplification

dtac is the most efficient operator in Thailand and will continue to make improvements to remain so. Simplification and efficiency of systems and processes leads to simplified customer’s journeys and products, enabling a faster time to market. This will further enable efficient growth, cash flow generation and make room for renewed technology and competence.

3. Winning Team

Within a rapidly changing industry landscape, dtac needs to ensure it stays relevant for its customers, reacts fast to their needs and serves them efficiently. Going forward, creating new services in an agile way of work will require more generalist capabilities and a strongly data-driven approach. dtac is therefore investing into upskilling employees in industry differentiator skills such as data analytics, digital marketing, product development and customer centricity. dtac continuously simplifies and modernizes the organization and prepare for a more agile way of work. dtac strives to challenge the status quo and build a work environment of customer obsession, simplicity, honesty and fun.

4. Responsible Business Conduct

dtac aspires to be a trusted company that empowers societies and contributes to the larger economic and social ecosystem in which it operates. dtac believes in scaling digital technologies to reduce inequalities and support policies for Thailand 4.0 that drive digital transformation such as E-KYC and data digitization, and deliver a “trusted and secured customer experience” via cyber security and data protection. dtac will continue to drive supply chain sustainability and e-waste management and support efforts that promote industry infrastructure to facilitate industry 5G rollouts. dtac will continue to ensure the highest standards of compliance and pro-active corporate governance through programs and activities that build “Do the Right Thing” culture.

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SUSTAINREBILITY

Sustainability. Annual Report 2019

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Sustainability at dtacdtac develops its sustainability policy with a view from international standards such as UN Global Compact, UN Universal Declaration of Human Rights and ILO Core Conventions in conjunction with findings in significant needs and concerns of stakeholders. This is to ensure that dtac’s business operations truly contribute to desired impacts on Thailand’s economic, social and environmental development. Aiming for strong sustainability practice, dtac sets up working principles as below.

1. Sustainability direction is implemented across the organization;

2. Responsible business and transparency practices;

3. Positive impact of the core business is leveraged for the benefit of society

4. Sustainability risks and opportunities are assessed and managed with a view to continuous improvement over time.

dtac’s sustainability effort is a part of the Governance Committee’s responsibility and driven by Sustainability Department, focusing on two following strategies.

1. Do the Right Thing

dtac profoundly values practice in anti-corruption of all forms, which refer to any action that is illegal and unethical. The Company also establishes a clear policy and guideline in personal data protection and supply chain management that reflects law- binding, fairness and transparency. Fair competition practice and human rights due diligence are also put in place to ensure business-operations risks are mitigated. dtac believes that “Do the Right Thing” strategy creates values to all stakeholders. Suppliers, for instance, benefit from the fair selection criteria and transparent assessment when engaging with dtac. Eventually, such practice will bring about significant development in telecommunication infrastructure for Thailand as a whole.

2. Empower Societies

dtac’s vision, “Empower Societies,” is reflected through the efforts of leveraging our digital technology expertise, innovations, partnerships and other resources to solve problems. dtac has scoped the social problem to focus on ‘inequality reduction’ as an approach to empower the Thai society. In the area of inequalities, dtac shapes working approach along with the “UN Sustainable Development Goals #10 Reduced Inequalities” by leveraging digital technology as a main tool.

dtac strongly believes that good corporate governance should be reflected by openness, trustful disclosure and engagement with all internal and external stakeholders inclusively. And, to ensure that dtac’s sustainability efforts are conducted internationally recognized framework, dtac upholds the Global Reporting Initiatives (GRI) Standards. For further details about dtac’s sustainability performance, please refer to the 2019 Sustainability Report.

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MILESTONES

Milestones. Annual Report 2019

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Milestones

1990

2002

1994

2003

1995

2000

1996

1999

2001

The Company’s landmark developments in the subsequent years include:

November

The Company was granted a concession from CAT to operate wireless services under the term of “Build-Transfer-Operate”.

April

The Company unlocked IMEI (International Mobile Equipment Identity) codes to allow all mobile handsets to use the Company’s network.

February

The Company entered into an Access Charge Agreement with TOT Public Company Limited (formerly known as Telephone Organization of Thailand, “TOT”)

January

Excise Tax was enforced.

October

The Company won “Disclosure Report Award 2003” from the Securities and Exchange Commission.

February

The Company was registered as a public company.

May

United Communication Industry Public Company Limited sold 5.5 million outstanding shares of dtac to Telenor Asia Pte.

November

CAT agreed to extend concession period until 2018.

July

The Company commercially launched prepaid product, so-called “Prompt”.

March

The Company launched new brand “dtac” and adopted a radically different approach of doing business in the Thai market.

October

The Company sold 13 percent of its paid-up capital to the public and listed the shares on the Singapore Exchange Trading Limited.

August

The Company issued new 48.5 million shares and sold these shares to Telenor, as a result, Telenor held 29.94 percent of the paid-up capital of the Company.

April

TOT agreed to amend the basis of calculation of the access charge for prepaid services from THB 200 per month per number to 18 percent of the value of the prepaid vouchers sold.

November

The Company launched GPRS-based data service.November

The Company issued new 42.8 million shares to TOT and TOT agreed to provide discounts on access charge payments.

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2007

2004

2008

2005

2009

2006

June

• The Company issued 82 new million shares to be listed in Stock Exchange of Thailand and became the first dual listing (SET and SGX) company in Thailand.

• The Company won “Mobile Operator of the Year Award” in Thailand organized by Asian MobileNews Magazine.

August

The Company won “Marketing Excellence Awards 2006” from Thailand Corporate Excellent Awards, organized by Thailand Management Association (TMA) and Sasin Graduate Institute of Business Administration of Chulalongkorn University.

October

The Company refreshed brand with an aim to make customers ‘feel goood’.

December

The Company won “Technology Fast 500 Asia Pacific 2004 Award” from Deloitte.

January

The Company took over “PaySbuy”, a company operated online payment system.The Company together with CAT tested 3G HSDPA technology on 850 MHz in Mahasarakram.

June

TOT agreed to cancel 16.4 million of its shares in dtac by way of capital decrease.

January

• ATM SIM was awarded the “Project of the Year” from Thailand ICT Excellence Awards 2008.

• *1677 Farmer Information Superhighway Project was awarded the “Business Enabler” from Thailand ICT Excellence Awards 2008.

June

The Company won “Mobile Operator of the Year 2006” in Thailand from Asian MobileNews Magazine.

March

The Company introduced “ATM SIM” with which customers can conduct their financial transactions via mobile phones.

November

ATM SIM was awarded the “Best Mobile Service” from Asia Mobile Award 2008, organized by GSMA’s Mobile Congress.

July

The Company relocated its headquarter from Chai Building to its new house at Chamchuri Square.

August

• The completion of capital reduction in respect of the 16.4 million shares held by TOT.

• NTC approved the term of reference on the interconnection charge as a basis for negotiation among operators.

August

The Company commenced the trial service “dtac mobile Internet on 3G” based on HSPA technology over dtac’s existing 850 MHz frequency, covering the inner Bangkok area.

November

The Company’s CSR Project “Doing Good Deeds Everyday” won CSR Award from SET awards 2009.

September

The Company implemented 10-digit mobile phone numbers by replacing the prefix 0 with 08.

November

The Company signed Interconnection Agreement with True Move and AIS.

December

The Company signed Interconnection Agreement with Triple T Broadband.


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2013

September

The Company received the “Best Senior Management IR Support and Most Consistent Dividend Policy” awards from Alpha Southeast Asia, an institutional investment magazine.

October

dtac Network (currently named as dtac TriNet) participated in the auction for spectrum licensing for International Mobile Telecommunications (IMT) in the frequency band 2100 MHz conducted by the NBTC and won 2 x 15 MHz of 2100 MHz spectrum license.

December

• dtac Network (currently named as dtac TriNet) has been granted the 15-year spectrum license for IMT in the frequency band 2100 MHz and license type III for providing wireless communication services from the NBTC.

• The Company completed the entire network modernization and 3G 850 MHz rollout in all major cities nationwide.

May

The Company launched “dtac TriNet” with the concept of 3 combined networks: 1800 MHz, 850 MHz and 2100 MHz.

July

The Company launched 3G HSPA service on 2100 MHz.

August

The Company received the “Best Senior Management IR Support and Most Consistent Dividend Policy” awards from Alpha Southeast Asia, an institutional investment magazine for 2 consecutive years.

2010

2011

2012

March

dtac Internet was awarded “Commart Innovation Awards 2010”.

July

The Company signed Interconnection agreement with CAT/Hutch.

November

The Company was awarded the “Brand of the Year” in Mobile Operator category, from Excellent Brand Survey Awards 2010, organized by HWM Thailand magazine.

December

• The Company and other 4 mobile operators soft-launched Mobile Number Portability (MNP) service.

• The new Frequency Allocation Act B.E.2553 was enforced, which preceded the establishment of NBTC.

August

The Company launched 3G HSPA service on 850 MHz.

October

• The National Broadcasting and Telecommunications Commission (NBTC) obtained royal endorsement.

• The Company won “Hall of Fame: A Decade of Excellence 2001 -2010” as one of top ten Thai leading business organizations with excellent management for the decade based on data by Thailand Management Association and Sasin Graduate Institute of Business Administration of Chulalongkorn University.

December

The Company’s CSR Project “Doing Good Deeds Everyday” won CSR Award from SET awards 2011 for 3 consecutive years.

March

The Company launched WiFi service with “Walk & Play” concept in community malls and on BTS stations.

July

The Company announced a new dividend policy which would pay at no less than 80% of net profit, depending on its financial position and future business plans, with an aim to pay quarterly.

August

The Company received the Taxpayer Recognition Award for the year 2011 arranged by The Revenue Department of Thailand.

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June

• The Company introduced “dtac prepaid” brand for using in prepaid market.

• The Company launched “dtac Super 4G” prepaid SIM focusing on digital generation segment.

2013

September

The Company received Thailand’s Corporate Brand Rising Star 2013 Award, based on the research of Department of Marketing, Faculty of Commerce and Accountancy, Chulalongkorn University. A ceremony was held to announce and award the SET listed companies with highest brand value.

2014

May

The Company launched 4G service in inner Bangkok.

June

The Board of Directors approved the delisting of the Company from The Singapore Exchange Securities Trading Limited.

December

The Company signed an Memorandum of Understanding (MoU) with CAT Telecom to strengthen long term strategic partnership and promote infrastructure sharing model in Thailand.

2015

April

The Company expanded 4G network to cover Bangkok and major 40 cities.

June

dtac introduced “Happy 4G SIM”, a prepaid SIM designed to stimulate 4G usage among prepaid users.

August

dtac TriNet and AWN mutually agreed on telecom tower sharing totaled 2,000 towers within year of 2015.

September

• The Company introduced “Blue Member” customer relationship management program for premium customers.

• The Company launched campaign “Reach Everywhere Understand Every Heart” to strengthen our brand perception and commit to deliver best experience to customers.

November

• dtac TriNet participated in 1800 MHz licence auction, arranged by NBTC.

• The Company expanded 4G services on 1800 MHz under CAT concession across Bangkok and Metropolitan Area.

• The Company received “Top 50 ASEAN Publicly Listed Companies” award from ASEAN Corporate Governance Conference and Awards.

December

• dtac TriNet participated in 900 MHz licence auction, arranged by NBTC.

• The Company increased 4G bandwidth to 15 MHz on 1800 MHz spectrum with 2,200 base stations around Bangkok and Metropolitan Area.

2016

February

The Company changed dividend policy to “To pay out dividend not less than 50% of the Company’s net profits, depending on financial position and future business plans. The Company aims to pay dividend semi-annually”.

March

The Company introduced WiFi Calling or VoWiFi (Voice over WiFi) service, helping customers to make and receive voice calls over a WiFi network.

May

The Company launched “dtac MUSIC INFINITE”, a digital service that customers can play streaming music from leading applications with no data charge.


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August

• The Company introduced the new flagship concept store “dInfinite” in order to build digital experience for our customers.

• The Company was certified as an anti-corruption organization from Thailand’s Private Sector Collective Action Coalition Against Corruption.

October

The Company launched cross-network VoLTE service with AIS.

2016

2017

February

The Company received the Thailand Sustainability Investment 2016 Award as a recognition for its outstanding performance in sustainability development from the Stock Exchange of Thailand.

March

The Company Launched “dtac WiFi Calling App” for customers to enjoy the Wifi Calling feature on any smartphone.

June

The Frequency Allocation Act (No. 2) B.E.2560 was enforced.

July

Merging Paysbuy with Omise was announced.

May

• The company has been ranked as one of the best companies in Corporate Social Responsibility while Lars Norling has been recognized as the best CEO and Sverre Pedersen, as the best CFO in the Asia’s Best Companies 2017 Polled by FinanceAsia Magazine.

• Company’s subsidiaries enter into contract negotiation with TOT for the provision of wireless service on 2300 MHz.

September

• “LINE MOBILE” was launched.

• dtac launched “SIM GO! Inter” for customers travelling abroad.

November

The Company launched “dtac call”, an application that combines 5 telephone numbers in one smartphone.

April

Company’s subsidiaries signed agreements with TOT for the provision of wireless services on 2300 MHz frequency band.

June

dtac TriNet launched wireless services on 2300 MHz frequency band under “dtac Turbo” brand, with a cooperation from TOT.

August

dtac TriNet won 2 x 5 MHz of 1800 MHz frequency band at the auction arranged by the NBTC.

October

dtac TriNet won 2 x 5 MHz of 900 MHz frequency band at the auction arranged by the NBTC.

September

• Concession Agreement to provide wireless services between dtac and CAT came to an end.

• An injunction was granted by the Administrative Court to the Company to continue providing wireless services to customers on spectrums under concession for another 90 days.

December

• Rights to provide services under concession, given by the Administrative Court came to an end.

• dtac TriNet has been granted the spectrum licenses in the frequency band 900 MHz and 1800 MHz from the NBTC.

2018

July

• The Company implemented ISO 26000, an international standard for social responsibility.

• The Company increased bandwidth of 4G-1800 MHz to 20 MHz in Bangkok Metropolitan Area and completed the expansion of 4G-1800 MHz with 15 MHz bandwidth in every province throughout Thailand.

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May

• The Central Administrative Court issued a verdict dismissing TOT’s claim on access charges against the Company in its entirety.

• TOT did not submit its appeal within the timeframe, the case is final.

June

dtac TriNet got 2 x 10 MHz of 700 MHz frequency band through an allocation by NBTC, the date of commencement of licensing is 1 October 2020 or until determined otherwise by the NBTC.

September

• launched “dtac GO”, the first mobile operator in Thailand to include international roaming in the main packs.

• changed the name of “Line Mobile” to “Finn Mobile”, as a result of agreement ending with Line.

October

• The Company is granted the Certificate of Membership of Thailand’s Private Sector Collective Action Coalition Against Corruption (CAC).

• The Company signed a partnership agreement with Ericsson to launch an advanced, customer-centric network operations model starting from January 2020.

December

• dtac TriNet entered into a strategic partnership with 3BB by signing on the MOU on Business Operation Framework.

• dtac TriNet signed Interconnection Agreement with TOT.

January

The Company and dtac TriNet entered into the Disputes Settlement Agreement with CAT to settle the disputes arising from the operation of services under the Concession Agreement between the Company and CAT.

April

The 2019 Annual General Meeting of Shareholders has approved the dispute settlement with CAT according to the Disputes Settlement Agreement.

2019


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RISK FACTORS

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dtac risk management aims at identifying, assessing and treating all relevant, foreseeable risks in a way that is effective, proactive and fit-for-purpose. Risk Management supports the organization in achieving defined ambitions and goals by having a holistic and enterprise-wide perspective, linking to the relevant goals, maintaining risk exposure at acceptable levels and managing the significant threats and exploiting the significant opportunities.

Key risks that may affect the operation of the Company and its subsidiaries are as follows:

1. Risks from the changes in laws, regulations and regulator or government policies

1.1 Risks from changes in laws, regulations and regulator or government policies

a. Uncertainties on regulation and enforcement of related laws and regulations in the telecommunications industry

The telecommunications business is governed by two main acts, namely the Frequency Act and the Telecommunications Act.

The NBTC is empowered to issue regulations to regulate the telecommunications business, such as organizing the spectrum auction, fixing service fees and tariff structure and issuing rules and measures for consumer protection, resolving frequency interference problems, etc. Such regulations might reduce the Company’s and its subsidiaries’ ability to make profits and/or might increase the cost of operation of the Company and its group companies (as the case may be). On the contrary, whereas the NBTC has announced various rules, however, the enforcement of such rules may not be clear in practice and causes delays, such as delays in the enforcement of rules governing the resolution of interference problems, etc. These may impede the operation of the Company. If this is the case, it may affect the ability of DTN for network rollout on the 900 MHz frequency band, as well as the existing spectrums that DTN is currently using.

b. Risk from unclear enforcement of laws governing foreign ownership

The principal laws which impose restrictions on foreign shareholding are as follows:

• The Land Code which prohibits a “foreigner” (as defined in the Land Code) from owning land, unless permission is granted in accordance with the law. Any foreigner who

possesses the land without permission is required to sell such land within the specified period, which shall not be less than 180 days and not more than one year;

• The Foreign Business Act which prohibits a “foreigner” (as defined in the Foreign Business Act) from engaging in certain types of business, including the provision of telecommunications services, unless prior permission is obtained from the Director-General of the Department of Business Development, the Ministry of Commerce;

• The Telecommunications Act which prohibits a “foreigner” (as defined in the Foreign Business Act) from engaging in Type II and Type III telecommunications businesses;

The violation of foreign shareholding limit may result in the revocation of the telecommunications license or termination of the Concession Agreement. The Company and/or its subsidiaries may not be able to continue the telecommunications business.

The Company believes that the Company is not a “foreigner” under the definitions of the Foreign Business Act, the Land Code and the Telecommunications Act, and has correctly and completely followed the practices applicable in Thailand.

The Company is of the opinion that the Government has no clear policy on the interpretation and enforcement of the Foreign Business Act in relation to foreign shareholding issue, resulting in the Company having to take such risk in undertaking its business. Although the Foreign Business Act has been in force for more than 10 years, there has been no Supreme Court precedent or clear practices of the Ministry of Commerce regarding a “nominee” arrangement under Section 36 of the Foreign Business Act in order for the Company to evaluate or assess the impact of the enforcement or interpretation of such provisions under the Foreign Business Act that may have over the Company and its subsidiaries.

Due to such unclear interpretation and enforcement of the Foreign Business Act, on 14 June 2011, a telecommunications operator submitted an allegation to the Royal Thai Police to take a criminal action against the Company (including its directors, certain shareholders of the Company and their directors) alleging that the Company operated the telecommunications business in violation of the Foreign Business Act. Furthermore, on 22 September 2011, a minority shareholder of the Company (holding 100 shares in the Company) filed a lawsuit against

Risk Factors

Risk Factors. Annual Report 2019

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certain state agencies, including the NBTC, before the Administrative Court, alleging that the Company is a “foreigner” under the Foreign Business Act. Both cases are being considered by the Royal Thai Police and the Supreme Administrative Court.

The Company believes that the Company is not a “foreigner” and has correctly and fully complied with the Foreign Business Act. However, if eventually it is decided (by the final Supreme Court judgment) that the Company is not a Thai company under the Foreign Business Act and the Telecommunications Act and such event is not remedied, the NBTC may revoke dtac TriNet’s Type III telecommunications license. As a result, dtac TriNet may not be able to continue the telecommunications business.

c. Risk from unclear enforcement of the law governing foreign dominance

The NBTC has issued the NBTC Notification on Determination of Foreign Dominance Restrictions B.E. 2555 (2012) (the “Foreign Dominance Notification”), which became effective on 24 July 2012. The Foreign Dominance Notification defines “dominance” as the scenario where foreigners have the controlling power or influential power in policy making, management and operation of the telecommunications business of the licensee by way of, among others, holding shares with half or more than half of the total voting rights. In this respect, the Company is of the opinion that it has not acted in any way that conflicts with the Foreign Dominance Notification and, when obligated, the Company and dtac TriNet has always submitted letter of declaration to the NBTC indicating that the Company and dtac TriNet will comply with the NBTC’s Foreign Dominance Notification. The Company only holds a Type 1 Telecommunications Business License since September 2018.

The NBTC may not agree with the Company’s interpretation mentioned above. As for dtac TriNet, it still has the risk from unclear enforcement of the law governing foreign dominance. However, based on the NBTC’s explanation to the public at the public hearing regarding the aim and objectives of the Foreign Dominance Notification and, in particular, the definition of “dominance” in 2012, the Company’s external lawyer opines that the Company and dtac TriNet would not be regarded as a company under foreign dominance pursuant to the definition of “dominance” of the NBTC. Nevertheless, the risk from unclear enforcement of law governing foreign dominance may have a material effect on the business operation and business opportunities of the Company and dtac TriNet.

d. Risk from disputes over excise tax and revenue sharing

The Government policy is still uncertain on the collection of excise tax from telecommunications services. In addition, in relation to the excise tax issue, CAT submitted a dispute to the Thai Arbitration Institute on 11 January 2008, demanding that the Company pays additional revenue sharing for the concessionary years 12 to 16, including penalty and VAT, in the amount of approximately THB 23,164 million. This was because, during said concessionary years, the revenue sharing was deducted by the excise tax paid by the Company to the Excise Department prior to making the revenue sharing payment to CAT in accordance with the Cabinet resolutions and the letter from CAT. On 28 May 2012, the Arbitral Tribunal rendered its decision to dismiss the dispute raised by CAT on the ground that the Company had fully paid the revenue sharing to CAT and all debts had already been settled. Nevertheless, CAT has appealed the Arbitral Tribunal’s decision before the Central Administrative Court. The Central Administrative Court issued the verdict in favor of the Company and dismissed CAT’s petition. Currently, the case is under the consideration of the Supreme Administrative Court.

e. Risk from the disputes

The Company and its subsidiaries had a number of disputes, especially with CAT, which used to be a party of the Concessionary Agreement with the Company. These disputes are included in the notes to the consolidated financial statements. If the Company or subsidiary loses the case, it may affect the business, financial status, and performance of the Company.

2. Risks from competition

2.1 The Thai telecommunications industry is highly competitive and sensitive to price competition

The Thai mobile telecommunications industry is highly competitive and sensitive to price competition due to the fact that SIM penetration is already very high, limiting the possibility to attract non-users. Data usage and smartphone penetration are also high, limiting the ability to increase revenue from existing base with voice and data. In 2018, fixed speed unlimited data package with low price have been used from time to time by the industry to attract customers, especially in prepaid. If this intensifies and the Company is unable to respond to such competition in a timely and cost-efficient manner, such competition may have a material effect on the result of business operations and business opportunity for the Company.

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3. Operational Risks

3.1 Risks caused by the change of low band spectrum held by the Company

To deploy 900 MHz cell site, we need to switch off existing co-site 850 MHz and nearby 850 MHz cell sites in order to mitigate the interference to 900 MHz users. However, there may be also some risk of coverage and capacity reduction for a short period when there is no other signals to serve the customer. DTN is carefully planning to deploy 900 MHz system to mitigate the interference to the user. One more risk is associated with some of user device not supporting 900 MHz. In remote areas where there is no other signal other than 900 MHz, such user may experience no service. Such situation may affect operational ability of dtac TriNet to compete in the market and may affect the business and business opportunities of the Company.

3.2 Risks of technology and information security

The amount of data continues to grow exponentially, as does the rate at which organizations share data through online Network. There is also massive IoT coming into view as millions of machines-tablets, smartphones, ATM machines, sensors, and much more- are all linked together, increasing inter-dependencies exponentially. Organizations increasingly open their IT systems to a wide range of machines and lose direct control of data security. Cyber thread are very aware of these vulnerabilities. To cope with ever increasing cyber threads, DTN has been working to build up defendable architecture, developing security competency and continuously improving the Security Operation Center (SOC). However, risks of technology and information security are still factors that may affect the business and business opportunities of the Company.

3.3 Risk of interference from the spectrum

890-895 / 935-940 MHz (or 900 MHz band) spectrum that DTN won the auction on October 28, 2018, is a spectrum with small Guard Band, therefore, this may cause interference problems. If this happens, it will affect the quality of service of the 900 MHz band. Even though it is the responsibility of each licensee to install their own filters, as well as to prevent and to resolve the problem in order to prevent interference between spectrums, if the licensee fails to comply, it is the NBTC’s authority

to enforce the law to resolve the interference problem. In this regard, DTN has coordinated with relevant authorities to prevent potential problems to ensure that the 900 MHz can be managed effectively and efficiently. However, if the risks of interference from the spectrums are not mitigated immediately, this will affect the quality of services and, then, impact to the business, and business opportunities of the Company.

3.4 Risk from interruption of network service system and other important systems which may have an impact on service users

The Company and dtac TriNet perceive the risks which may occur as a result of a disruption of the network system and other essential systems that could impact the provision of services. Therefore, the Company and dtac TriNet have continuously prepared for and developed plans to support emergency events and disruption of network system as well as other essential systems.

The Company and dtac TriNet have developed a network management system and prescribed maintenance procedures for the network and equipment so that all network and equipment function efficiently in order to provide telecommunications service to customers effectively, especially voice and data services. The degrees of redundancy in our transmission network have been enhanced through addition of fiber routes and high capacity DWDM (Dense Wavelength Division Multiplexing) network. In addition, the Company and dtac TriNet have also been developing plans to support the disruption of other essential systems, such as information system, billing system and customer services so that the services can be continuously provided to the customers. The Company and dtac TriNet also have a backup plan in case of emergency which covers an additional investment in important equipment and safety system e.g. fire protection system and real-time network and equipment monitoring system. The Company and dtac TriNet regularly conduct trainings for its staff on their responsibilities and relevant procedures, as well as strictly conduct a test run of the backup plans.

Furthermore, the Company and dtac TriNet has procured insurance policies to cover network and equipment damages in order to minimize the impact of such risk against the Company and dtac TriNet.

Risk Factors. Annual Report 2019

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3.5 The Company has to rely on third parties for telecommunications equipment

Provides mobile phone service through complex telecomm unication equipments, including mobiletelecommunication networks and 2G/3G/4G base stations nationwide. Therefore, the success of the Company’s and dtac TriNet’s businesses (which may share some of the base stations with the Company to provide 2100 MHz services) depends on the effective maintenance and repair of the network and equipment.

At present, the Company and dtac TriNet engages third parties to provide maintenance and repair services for some base station equipments and transmission networks. These service providers had gone through thorough selection process and regular performance reviews to ensure that the service levels are in accordance with the standards. If the third parties are unable to perform their duties under the agreement, or unable to perform their duties in a timely and cost-effective manner, which may affect the speed and quality of the services of the Company and dtac TriNet, the Company and dtac TriNet may choose to switch to alternative suppliers, albeit with potentially higher operating costs, to maintain quality of services.

In addition, dtac TriNet providing telecommunications services has to rely on basic network from CAT Public Company Limited and has to roam on 2300 MHz spectrum belonging to TOT. Problems related to network management by the contract partners may affect the ability to run the business, financial status, and business opportunities of the Company.

4. Risks from exchange rate fluctuation

The principal revenues of the company are denominated in Thai Baht currency, Capital expenditure constitutes the majority of the company’s expenditure. For capital expenditures, the company has established an agreement with suppliers to pay the capital expenditure in Thai Baht.

For the remaining USD exposure, the Company utilizes USD revenue from International Roaming to partially match the USD expense (Natural Hedge) and entering into FX hedging transactions as deems appropriate.

5. Major shareholders may have influence on decisions of the Company

Telenor and Thai Telco Holdings Co., Ltd. are major shareholders of the Company, holding collectively 65.05 per cent of the total issued shares of the Company (information as at 30 July 2019).

Thai Telco Holdings Co., Ltd. underwent a shareholding restructuring in July 2012, whereby Bencharongkul Group, the founder of the Company, now holds shares in the Company through Thai Telco Holdings Co., Ltd. Bencharongkul Group holds 51 per cent of the total issued shares of Thai Telco Holdings Co., Ltd.

As a result, Telenor and Thai Telco Holdings Co., Ltd. (including Bencharongkul Group) may exert influence over corporate decisions of the Company, except for matters which they are not eligible to vote due to any special interest or conflict of interest relating thereto.

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Management. Annual Report 2019

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MANAGEMENT

The management structure of the Company comprises of the Board of Directors, the Audit Committee, the Remuneration Committee, the Nomination Committee, the Corporate Governance Committee, and the Management. Additional committees have been established at the management level to supervise the implementation of internal policies to ensure maximum performance within the organization.

Board of DirectorsDuring 2019, three directors resigned from their directorship and there were two new directors. Therefore, as of 31 December 2019, the Board of Directors of the Company consists of 10 directors:

• 10 directors are non-executive directors, 4 of them are independent directors representing 40% of the Board of Directors; and

• There is no executive director

Names of the directors and their share ownership in the Company as of 31 December 2019 are as follows:

No. Name Position No. of Shares as of 31 Dec 18

No. of Shares as of 31 Dec 19

Increase/ Decrease

1 Mr. Boonchai Bencharongkul Chair 10 shares 10 shares -

Spouse - - -

Minor Child - - -

2 Mr. Petter Boerre Furberg Vice Chair - - -

Spouse - - -

Minor Child - - -

3 Mr. Chulchit Bunyaketu Independent Director - - -

Spouse 15,000 shares 15,000 shares -

Minor Child - - -

4 Mrs. Kamonwan Wipulakorn Independent Director - - -

Spouse - - -

Minor Child - - -

5 Mr. Stephen Woodruff Fordham

Independent Director 10,000 shares 6,000 NVDR

10,000 shares 6,000 NVDR

-

Spouse - - -

Minor Child - - -

6 Mrs. Chananyarak Phetcharat Independent Director - - -

Spouse - - -

Minor Child - - -

7 Mrs. Tone Ripel Director - - -

Spouse - - -

Minor Child - - -

Management

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Increase/ Decrease

8 Mr. Sverre Pedersen Director - - -

Spouse - - -

Minor Child - - -

9 Mr. Christian Wulff Soendergaard(1)

Director - - -

Spouse - - -

Minor Child - - -

10 Mr. Rakesh Jain(1) Director - - -

Spouse - - -

Minor Child - - -

Remark: (1) Mr. Christian Wulff Soendergaard and Mr. Rakesh Jain have been appointed as the new directors in replacement of Mr. Haakon Bruaset Kjoel and Mr. Gunnar Johan Bertelsen who resigned from their directorships with effect from 9 December 2019 pursuant to the resolution of the Board of Directors’ Meeting No. 10/2019 held on 9 December 2019.

Names of the directors who resigned in 2019 and their share ownership in the Company are as follows:


No. of Shares as of 31 Dec 19(1)

Increase/ Decrease

1 Mrs. Alexandra Reich(2) Chief Executive Officer - - -

Spouse - - -

Minor Child - - -

2 Mr. Gunnar Johan Bertelsen(3) Director - - -

Spouse - - -

Minor Child - - -

3 Mr. Haakon Bruaset Kjoel(4) Director - - -

Spouse - - -

Minor Child - - -

Remark: (1) There is no change in share ownership / no share sale and purchase during 2019.

(2) Mrs. Alexandra Reich expressed her intention not to be re-elected for another term; but would remain as the Chief Executive Officer of the Company pursuant to the resolution of Annual General Meeting of Shareholders for the year 2019 held on 4 April 2019.

(3) Mr. Gunnar Johan Bertelsen resigned from directorship on 9 December 2019

(4) Mr. Haakon Bruaset Kjoel resigned from directorship on 9 December 2019; but would remain as the Chief Strategy and Transformation Officer of the Company

Management

The Chief Executive Officer is the head of the management team. The Company’s organization structure is divided into 8 groups, i.e. Finance Group, Technology Group, People Group, Business Group, Sales Group, Marketing Group, Corporate Affairs Group, and Strategy and Transformation Group. Names of the Management and their share ownership in the Company as of 31 December 2019 are as follows:


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Increase/ Decrease

1 Mrs. Alexandra Reich Chief Executive Officer - - -

Spouse - - -

Minor Child - - -

2 Mr. Dilip Pal Chief Financial Officer - - -

Spouse - - -

Minor Child - - -

3 Mr. Prathet Tankuranun Chief Technology Officer 10,000 shares 10,000 shares -

Spouse 9,400 shares 9,400 shares -

Minor Child - - -

4 Ms. Nardrerdee Arj-Harnwongse

Chief People Officer - - -

Spouse - - -

Minor Child - - -

5 Mr. Rajiv Bawa Chief Business Officer - - -

Spouse - - -

Minor Child - - -

6 Miss Tipayarat Kaewsringarm(1)

Chief Sales Officer - - -

Spouse - - -

Minor Child - - -

7 Mr. How Lih Ren(2) Chief Marketing Officer - - -

Spouse - - -

Minor Child - - -

8 Mr. Lars Marcus Adaktusson(3) Chief Corporate Affairs Officer

- - -

Spouse - - -

Minor Child - - -

9 Mr. Haakon Bruaset Kjoel(4) Chief Strategy and Transformation Officer

- - -

Spouse - - -

Minor Child - - -

Remark: In 2019, there were organizational changes that affected the change of Management’s positions as follows:

(1) Miss Tipayarat Kaewsringarm was appointed as the Chief Sales Officer with effect from 1 February 2019.

(2) Mr. How Lih Ren was appointed as the Chief Marketing Officer with effect from 1 April 2019.

(3) Mr. Lars Marcus Adaktusson was appointed as the Chief Corporate Affairs Officer with effect from 2 September 2019.

(4) Mr. Haakon Bruaset Kjoel was appointed as the Chief Strategy and Transformation Officer with effect from 1 December 2019.

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The executives listed above are executives pursuant to the definition specified by the SEC, which includes managers, or persons holding the top four management positions following the managers, and every person holding a position equivalent to the fourth management position, including persons holding management position in accounting and finance at the level of department manager or higher. Each of the executives of the Company has not been an employee or partner of the external audit firm engaged by the Company during the past 2 years.

The Company’s Organization Chart as of 31 December 2019

Ethics and Compliance

Internal Audit

Culture and New Way of Work

Chief Executive Officer

Strategy Group

Technology Group

Business Group

Corporate Group

Sales Group

Finance Group

Marketing Group

People Group


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Company Secretary

The Board of Directors appointed Mr. Sirawit Klabdee, Head of Investor Relations Division, as the Company Secretary with the duties and responsibilities as prescribed in the Securities and Exchange Act. Education profile, work experience and training of the Company Secretary can be found under Section “Corporate Information”.

Further details relating to the authorities, duties and responsibilities of the Board of Directors, the sub-committees, the Chief Executive Officer and the Company Secretary can be found under Section “Corporate Governance” and from the Company’s website at www.dtac.co.th.

Remunerations of Directors and ManagementDirectors Remuneration

In determining the remuneration of the Board of Directors of the Company and the sub-committees i.e. the Audit Committee, the Remuneration Committee, the Nomination Committee and the Corporate Governance Committee, the Remuneration Committee will take into account various factors, including, among others, the Company’s business and performance, the market and industry norms, market and industrial standards, the current economic situation and the duties and responsibilities of the Board of Directors and the sub-committees. The Remuneration Committee will consider the remuneration of directors and propose the Board of Directors’ and shareholders’ meetings for consideration and approval on an annual basis. In addition, the Remuneration Committee will review the remuneration structure for the Board of Directors and the sub-committees every 3 years in order to be in line with the market and industry trends.

At present, the remuneration of directors consists of monthly allowance. The Company does not offer any kind of remuneration payable in the form of equity rewards or in any other forms to its directors. The remuneration structure for the Board of Directors and sub-committees can be found under Section “Corporate Governance”.

In 2019, the total remuneration of directors of the Company was THB 13,572,000 with the remuneration of each individual director as follows:

Names

Directors’ Remuneration (THB)*

Board of Directors

Audit Committee

Remuneration Committee

Nomination Committee

Corporate Governance Committee

Total

Mr. Boonchai Bencharongkul 3,840,000.00 - - - - 3,840,000.00

Mr. Petter Boerre Furberg - - - - - -

Mr. Chulchit Bunyaketu 1,320,000.00 600,000.00 408,000.00 204,000.00 - 2,532,000.00

Mr. Stephen Woodruff Fordham 1,320,000.00 600,000.00 - 408,000.00 204,000.00 2,532,000.00

Mrs. Chananyarak Phetcharat 1,320,000.00 - 204,000.00 204,000.00 408,000.00 2,136,000.00

Mrs. Kamonwan Wipulakorn 1,320,000.00 804,000.00 204,000.00 - 204,000.00 2,532,000.00

Mrs. Alexandra Reich - - - - - -

Mr. Haakon Bruaset Kjoel - - - - - -

Mr. Gunnar Johan Bertelsen - - - - - -

Mrs. Tone Ripel - - - - - -

Mr. Sverre Pedersen - - - - - -

Mr. Christian Wulff Sondergaard - - - - - -

Mr. Rakesh Jain - - - - - -

Total 9,120,000.00 2,004,000.00 816,000.00 816,000.00 816,000.00 13,572,000.00

* The table shows the director’s remuneration with 2 decimal places.

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Management Remuneration

The remuneration provided to CEO and Executives consists of the following components:

Element Key purpose

Base salary Provide a basis for competitive remuneration overall

Short-term incentive Enhance leadership and deliver business result to achieve the Company’s strategy.

Long-term incentive Align the interests of the CEO, Executives with the interests of the shareholders for a long-term value creation.

Other Benefits Offer insurance plans and other benefit to support in various life situations in light of economic conditions and standard of living.

1. Base salary

The level base compensation is reviewed annually based on the scope of the role, business environment, market position and performance. Key performance criterions are:

• Delivery according to business priorities

• Demonstrated leadership in accordance with the Company’s values

• Building organization capabilities

2. Short-term incentive

The short-term incentive (STI) plan is designed to help drive the leadership behaviors and deliver the expected results. It is a cash-based variable pay plan based on following key performance indicators.

The key performance indicators below applied for all members:

• Financial KPIs to drive profitable growth and generation of cash flow; gross profit, opex and net cash flow;

• Operational KPIs to drive progress on the digital transformation objective; and

• Responsible Business Conduct – this is to drive the ethical and sustainable business operations

3. Long-term incentive

The long-term incentive plan reflects the long-term value creation of the Company. The participants receive a grant of long-term incentive which is subject to four years lock-in period. If the participants leave the Company during the lock-in period, the LTI will be forfeited. In case of retirement, disability or death of the participant, the LTI will be unlocked.

4. Other Benefits

The purpose of these benefits is to establish a level of security. The company’s car, mobile package, provident fund, pension, insurance plan and other welfare provisions are in line with the market standards.

In 2019, the total remuneration of the Management of the Company was THB 82,258,221.

Human ResourcesReward Management of the Company

The objective of reward management is to attract, engage and retain the right employees to deliver sustainable value for shareholders in accordance with the Company’s values. With this objective, reward philosophy in dtac has been designed to offer total reward packages that are fair, consistent and competitive both within and outside the organization.

Total reward packages are the sum of remuneration, employee recognition, benefits, development & career opportunities and employee recognition.

Remuneration

Remuneration is monetary compensation including fixed compensation and variable pay. Fixed compensation is linked to job value that reflects impact and contribution of that job to the Company. Jobs with similar values are structured together in the same pay scale of Company’s pay structure which nable the Company to maintain internal equity and fairness of employees’ pay in similar job values. In terms of external equity and competitiveness, compensation is regularly reviewed against other companies in the market through data obtaining from third-party survey, as well as taken into account macro-economic indicators and Company’s business result.


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Variable pay is based on pay for performance principle, connecting both individual performance and Company strategic targets which are set and communicated on an annual basis. This is to award achievement of employees on the short-term basis in relation to company achievement.

Employee recognition and benefits

Employee recognition is the timely, informal or formal acknowledgement of a person’s or team’s behavior, effort or business result that supports the Company’s goals and values, and which has clearly been beyond normal expectations. Recognition program enable strong culture and building collaboration across all functions in the Company.

Benefits scheme are provided in the Company in alignment with prevalence practice in the market, which are regularly reviewed to ensure competitiveness of the scheme. Benefits scheme in the Company comprise of multiple elements and dimensions:

• Monetary as fixed allowance and non-monetary as well-being program, flexible office facility providing fitness center

• Work-related as travel expenses, uniforms and personal -related benefits as emergency loan, paternity and maternity leave which allows employees to apply for long leave days to take good care of new born baby

• Short-term basis as health care insurance, medical check-up and long-term basis as provident fund which is provided as a saving scheme for employee after retirement

As of 31 December 2019, the Company has 3,915 employees who receive payment on a fixed salary basis. The number of employees in each key function is as follows:

Key Function Number of Employees – Permanent – Expat (Persons)

Finance Group 181

Marketing Group 257

Sales Group 2,252

Technology Group 977

People Group 56

Corporate Affairs Group 53

Business Group 90

Strategy and Transformation Group 34

Office of CEO 15

Total 3,915

In 2019, the remuneration of the employees comprised of salary and bonus totaling THB 4,400,977,688. The Company has made contributions to the provident fund in an amount of THB 108,388,934.

Development & Career OpportunitiesTo enable the employee retention and engage employees to strive for delivering the best performance, career development is one of the critical enablers. In September 2019, the Company launched the new career management concept and platform. ‘PromptGROW’ has been initiated and deployed in the Company to facilitate employees to manage their own career to align with employees’ career aspiration and business needs. The Company provides opportunities for employees to grow career in various roles e.g. professional individual contributor or managerial role, from vertical advancement to higher-responsibility role, horizontal or diagonal career move to other job functions or in different job scopes. Enlarge or enrich the responsibility and accountability in current position, across-BU/regional or global roles are also other career opportunities which employees can explore. The 4D-step of ‘‘PromptGROW’’ with essential facilities and tools are in place for employees in their career management.

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1. Discover: Career Conversation with Line Manager and/ or Career Coach will help employees to understand their self-insight on career planning and competency assessment will make employees realize their competency gaps need to be developed regarding competency framework/ business requirement

2. Design: Our Performance Management System which focuses on People Dialogue and Performance with Impact is provided for employees to design their own performance goals and Individual Development Plan (IDP) for both short-term in current role and future expected role as career goal.

3. Develop according to 3E+1 Development Approach: The 3E+1 Development Approach is deployed in the Company for continuous learning and development which are Education (10%), Exposure (20%), Experience (70%), and Ecosystem for learning and development, and included coaching made by Line Manager continuously.

4. Deploy: After competency assessment, employees would know their capability and develop themselves to be ready for the new job opportunities. Once there is a vacancy of their target jobs, an employee could simply apply for the job through online system. No need to inform his or her current line manager in this stage but the manager will know after an employee gets a job offer from other units. Candidate selection will be done through Selection Committee to ensure fair treatment and suitable candidate selected. The new careermovement process is designed to promote job rotation and learning that aligned with employee’s career self-planning

From business perspective, the Development and Career Management programs will also strengthen organization capability towards high performing organization with effective talent pipeline continuity aligned with business needs to drive business goals and ambition achievement.

“dtac Academy” - center of people development

dtac Academy provides learning opportunities and offers a wide range of training programs to ensure that employees can develop their skills, knowledge, capabilities and potential with respect to both employees’ ambition and company’s business requirements. All employees will have the opportunity to explore their learning many ways including blended learning, online, training course, project based learning and etc. in accordance to their individual development plans, job requirements and their own aspiration.

dtac Academy has conducted Organization Capability Assessment to assess leaders against future capability model required to support future organization setup. The assessment covered 381 leaders in VPs level up and postpaid sales management team.

The assessment results were synthesized to identify development priorities including core, leadership and agility readiness and design 3-day extensive bootcamp with regular follow-up for Branded Retail. The bootcamp objectives were to communicate clearly defined sales management’s roles and responsibilities and uplift sales capability towards organization future expectations and covered 127 participants from sales management team.

In addition to traditional classroom training, the Company provides a blended approach including enhanced e-learning options, encourages and provides other forms of development activities, e.g. on-the-job training, engagement in strategic projects, interactive knowledge sharing sessions by guest speakers from various industries and relevant topics. The Company deploys new technology in employee development by providing digital and mobile learning platforms that enable a more flexible learning experience for its employees where learning can happen anytime, anywhere with no fixed times and schedules.

Leadership & Talent Development Programs

Development of new generation of leadership and talents has always been the focus area of the Company. The Company provides comprehensive Leadership Development Programs to ensure that leaders at all levels are equipped with essential skills to effectively lead their team and organization to achieve results. The program covers both business and people management, and is delivered in the forms of classroom training, e-learning modules, workshops and 1-on-1 executive coaching on a continuous basis.

The Company has partnered with International Institute for Management Development (IMD), one of the world-class institutes, to co-design Future Leaders Program to develop leaders in SVP level and their direct reports through the training and coaching continuously during 3 months to enhance leadership capability, agility and cross-functional collaboration for future organization setup.

The Company also provides Talent Development Programs designed to develop full potential of employees with outstanding performance. The program comprises various blended learning courses covering both business management, specialized areas and driving transformation aligned with the Company’s strategic business direction. These specific training courses are jointly developed and conducted in close collaboration with various institutions both in Thailand and internationally.

In 2019, the Company has a total budget for people development equal to THB 61.14 million (as of 31 December 2019), covering 100% of all employees with average learning hours at 61.5 per employee. (as of 31 December 2019).


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Internal ControlThe internal control system of the Company is monitored by the Board of Directors and the Management so as to provide reasonable assurance that the Company achieves the following objectives:

• Effectiveness and efficiency of operations;

• Assurance of reliability of financial reports; and

• Compliance with the Company’s corporate governance policies, applicable laws and regulations.

The Company applies internal control framework in line with the international standard for internal control framework of the Committee of Sponsoring Organizations of the Treadway Commission (COSO), the guidelines under the Sarbanes- Oxley Act Section 404 (SOX) and guidelines under the SEC. The Company has adopted the guidelines under SOX since 2006 to ensure that the activities related to the internal control over financial reporting (ICFR) are integrated into the business operation of the Company.

The internal control system of the Company consists of 5 components, which can be described as follows:

in order to enhance the accuracy and credibility of the Company’s financial reports.

Moreover, the Company has also set up a Unit responsible for occupational health, safety, security and environment (HSSE), which follows the concept of ISO 14001 & OH SAS18001 international standards as its framework.

(2) Risk Management

Risk management in the Company aims at identifying, assessing and treating all relevant, foreseeable risks in a way that is effective, proactive and fit-for-purpose. The risk management processes feed in to a holistic and enterprise-wide risk management process, which is a continuous and iterative process, in order to:

• Support the Company in achieving defined ambitions and goals

• Maintain risk exposure of the Company at acceptable levels, managing significant threats and exploiting the significant opportunities

• Enable explicit consideration of risks in decision-making by having risk management as an integral part of the decision-making processes

• Ensure compliance with external risk requirements and standards

• Timely initiate actions to reduce significant threats and to enhance significant opportunities

• Raise awareness on risk management and enhance risk culture in the Company

The Company has put in place its risk management policy and manual with a regular review. The Company risk management is inspired by both the ISO 31000 and COSO II Enterprise Risk Management standards. Risks that may affect ambitions and goals of the Company shall be identified, assessed and responded to

(1) Organizational Environment

The Company has established an organization structure that effectively supports the Management’s administration and improves the employees’ performance. The Company has also set up clear and appropriate business goals by taking into consideration the possibility of achieving these goals, and has communicated these goals to its employees as guidance in performing their work at least once a year.

The Company is committed to be extremely vigilant and proactive in adhering to our culture of conducting business the right way. The dtac’s Code of Conduct has been established and enforced as our company’s ethical standard, which imposes restrictions on the Company’s directors, management and employees in engaging in any action which may give rise to a conflict of interest with the Company, conducts towards various stakeholders, both internal and external, including conducts towards employees, customers, business partners, competitors and government agencies, and matters relating to the environment, assets, internal control, accounting, reporting and disclosure, information management and protection of personal data. Employees may consult or report any incidents of violation of the code of conduct directly to the Ethics and Compliance Officer. The policies and the code of conduct have been prescribed based on the principle of fair treatment towards stakeholders and for the long term benefits of the Company.

The Company has set up an internal control unit to oversee and support activities concerning Internal Control over Financial Reporting (ICFR) and also set up Ethics and Compliance Department to assist the Company in the development and adoption of its governance policies and manuals. The responsibility of the internal control unit includes monitoring and reporting the status of internal control over financial reporting to the Management, the Audit Committee and the Board of Directors on a regular basis,

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line managers are responsible for ensuring that risk management is embedded into the strategic and day-to-day business processes. Each employee is responsible for managing the risks within his/her areas of responsibility. Company management team is an arena where the Company’s risk picture is assessed regularly. Top risks in the Company are owned and managed by Company management team. The top risk picture will be reported to Board of Directors on a quarterly basis.

(3) Control Activities

The Company has set up appropriate control activities in response to specific risks regarding work processes, complexity, environment and entity-specific characteristics. The Company has developed policies and manuals for various management matters, including policies and manuals for entering into financial, procurement and general management transactions as well as information security management which in line with international standard ISO/IEC 27001. The Company has set out a clear and appropriate scope of authority and approval limits for the Management at each level pursuant to the Policy on Delegation of Authority, which has been approved by the Board of Directors. The segregation of duties has been appropriately established. For example, the approval function is segregated from the account and information recording function and also separated from the safeguarding of assets function for purpose of check and balance.

The Company has also put in place strict measures for monitoring transactions with major shareholders, directors, executives, and their related persons, in order to ensure that the transactions are entered into in accordance with the prescribed procedures and approval process, so as to prevent any conflict of interests and for the best interest of the Company.

(4) Information and Communication

The Company places emphasis on information and communication system in order to ensure that accurate and sufficient information is communicated to the Board of Directors, the Management, shareholders and other related persons to make informed decisions. The Company has adopted accounting policies that are in accordance with the generally accepted accounting principles and suitable for the type of business in which the Company engages. All accounting records and supporting documents are being properly kept and maintained for verification at all times. The Company has also prepared meeting notices and supporting documents, including minutes of the Board of Directors’ meetings and the shareholders’ meetings, and proposed the same to the Board of Directors and shareholders, as the case may be, for consideration in advance of the meetings and in accordance with the law.

(5) Monitoring

There are clear processes for monitoring the internal control system and reporting any significant control failures or weaknesses together with details of corrective action. These include both on-going monitoring and periodic evaluation by the Management to ensure that a strong internal control system is in place and functioning.

On-going monitoring activities include regular reviews of performance and key financial information, analysis of, and appropriate follow-up on, operation reports or metrics that might identify anomalies indicating a control failure, etc. In addition, the Management is required to immediately report to the Audit Committee and the Board of Directors cases or suspected cases of fraud, violation of laws, or other misconduct that may have a material adverse effect on the reputation and financial status of the Company.

Key periodic evaluations include the followings:

(a) The Management testing of key internal control over financial reporting – this test was carried out in 2018 and there was no significant internal control deficiency that may have a material effect to the financial reports. Furthermore, the summary of internal control testing is reported to the Audit Committee at least twice a year;

(b) The activities of the Internal Audit Department, which examines the business operation procedures of the Company through an approved internal audit plan, highlights any internal control weaknesses and proposes recommendations for corrective actions thereon. The Internal Audit Department reports its findings directly to the Audit Committee, follows up on the progress of any corrective actions with the Management and provides a summary report on the results of such actions to the Audit Committee regularly, at least on a quarterly basis; and

(c) Review of internal control matters as identified by the Company’s external auditor.

In this regard, EY Office Limited, the Company’s external auditor, has reviewed and assessed the accounting control of the Company and its subsidiaries. There are no material findings that may have a material effect on its opinion on the financial statements of the Company and its subsidiaries as of 31 December 2019. The Audit Committee accorded with the opinion of the auditor that the Company’s internal control system was sufficient and suitable for the Company’s business and capable of safeguarding the Company’s assets from undue or unauthorized use by the Management. The Board of Directors’ Meeting No. 2/2020, which was held on 28 January 2020, acknowledged the opinion of the Audit Committee on the sufficiency of the Company’s internal control system.


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Internal Audit The Internal Audit Department is obliged to perform its duties on an independent and fair basis and to provide advice in order to add value and improve the Company’s operations. The Internal Audit Department is independent from the Management and provides report with respect to the internal audit directly to the Audit Committee.

The objectives, authorities, duties and responsibilities of the Internal Audit Department towards the Company, including roles and responsibilities of the Head of Internal Audit Department are explicitly defined in the Internal Audit Charter, which is formally reviewed and approved by the Chief Executive Officer and the Audit Committee at least on an annual basis to ensure accordance between responsibilities under the Internal Audit Charter and the operation of the Internal Audit Department. The Head of Internal Audit Department is required to confirm the independence of the internal audit activities to the Audit Committee on an annual basis.

The Company has appointed Mr. Kiti Wichitsawangwong as the Head of Internal Audit Department and acts as the secretary to the Audit Committee supporting their oversight responsibilities and accountability to achieve their authorities and duties effectively.

The appointment, transfer and dismissal of the Head of Internal Audit Department and the heads of other units within the Internal Audit Department shall be approved by the Audit Committee.

The Internal Audit Department adheres to the guidance of the Institute of Internal Auditors (including the definition of Internal Auditing, the Code of Ethics and the International Standards for the Professional Practice of Internal Auditing) and the Information Systems Audit and Control Association and the internal audit manual of the Company.

The Internal Audit Department has developed a flexible annual internal audit plan by taking into account a business strategic directions and key corporate risk-based methodology, including any matters concerned by senior Management. The annual internal audit plan is reviewed and approved by the Audit Committee. Apart from implementing the approved annual internal audit plan, the Internal Audit Department also performs any special tasks or projects as requested by the Management and the Audit Committee as appropriate.

According to the approved annual internal audit plan, the Internal Audit Department identifies and reviews potential risks, reviews the adequacy and effectiveness of the internal control and reports

significant internal control weakness, non-compliance issues and recommendations for business improvements to the Management. An appropriate follow up process is implemented by the Internal Audit Department to ensure that the Management responds to and takes actions on the recommendations of the Internal Audit Department and external auditors. The audit findings, progress on any corrective actions taken by the Management and the status of the Internal Audit Department’s activities are directly reported to the Audit Committee on a quarterly basis.

Furthermore, the Internal Audit Department has the responsibility to review the connected party transactions in accordance with the Company’s internal procedure to ensure that they are in compliance with the laws and the rules and regulations of the Stock Exchange of Thailand and report the reviewed results to the Audit Committee on a quarterly basis. The Internal Audit Department also takes part in examining suspected fraudulent activities within the Company and notifies the Management and the Audit Committee of the results. In addition, the Internal Audit Department performs consulting services to assist the Management in meeting its goals and business strategy.

The staffs of the Internal Audit Department are encouraged to continually enhance their knowledge, skills and competencies through participation in various in-house and external training courses as well as overseas seminars. In addition, the staff members of the Internal Audit Department are provided with opportunities to develop themselves through the participation in the Company’s mobility program.

To ensure the Internal Audit Department’s conformance to the Institute of Internal Auditors, International Standards for the Professional Practice of Internal Auditing (IIA Standards), and internal audit activities as set forth in the Internal Audit Charter and the expectations of the Management, the Internal Audit Department has arranged for an assessment on the effectiveness of internal audit by an external independent assessor every five years. The assessment result is reported to the Company’s Board of Directors and the Audit Committee.

The Internal Audit Department is assessed through external consulting for conducting a Quality Assessment Review (QAR) every 5 years. The latest external assessment was reviewed in November 2016. The quality assessment result was that the activities of the Internal Audit Department generally conform to the International Standard for the Professional Practice of International Auditing as prescribed by the Institute of Internal Auditors.

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CORPORATE GOVERNANCE

Corporate Governance. Annual Report 2019

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The Board of Directors and the Management of the Company are committed to the principles of good corporate governance pursuant to the Corporate Governance Code for listed companies 2017 of The Securities and Exchange Commission and the Principles of Good Corporate Governance for Listed Companies 2012 of the Stock Exchange of Thailand in order to sustain and maximize long term value of the shareholders.

The Board of Directors has established corporate governance policies, which set out the key governing bodies in the Company and process in respect of risk management, strategy, financial reporting and internal control. In addition, the Board of Directors of the Company has established a code of conduct “dtac Code of Conduct”, which applies to its directors, Management, employees and other persons acting on its behalf. The Company’s code of conduct has been in effect since 2006 and has been regularly updated to cover various subjects, such as human rights, labor, occupational health, safety, security, environment, conflicts of interests, use of inside information, internal control, disclosure of information, anti-corruption and etc. in accordance with the international standard.

The corporate governance policies and the code of conduct can be found on the Company’s website at www.dtac.co.th and its intranet for easy access and reference of the directors, executives and employees of the Company. In addition, the Company has taken actions to raise awareness and understanding of the corporate governance policies and the code of conduct on a regular basis, for instance, providing the code of conduct and manuals and arranging an orientation program for new employees and additional trainings on such subjects from time to time. The Company has also developed learning media on the code of conduct in cartoon version which explains various important topics in an easy and simplified way, e.g. conflict of interest, anti-corruption, bribery, gifts and business courtesies, personal information and privacy, information security, sponsorship or donation, external communication as well as other important topics employee should be aware of. Furthermore, interactive e-learning programs are executed to increase awareness of employees over Code of Conduct and Anti-Corruption Policy. To monitor the compliance of the corporate governance policies, the Chief Executive Officer will perform an assessment of the implementation of the governing documents, the level of compliance and report the results to the Board of Directors at least once a year.

The Company has been emphasizing greatly on the principles of good corporate governance where the principles of good corporate governance of the Company are in line with the Principles of Good Corporate Governance for Listed Companies

Corporate Governanceof the SEC and the SET. From the assessment on corporate governance practices of Thai listed companies assessed by the Thai Institute of Directors Association (IOD), the Company is one of 193 companies that were awarded a level of “excellent” (CG scoring equal or above 90%) among 677 listed companies which were assessed. This shows that the Company has been committed to the Principles of Good Corporate Governance for sustainability development. Details of the Company’s practices of the good corporate governance are set out in 5 categories as follows:

Section 1 - Rights of ShareholdersThe Board of Directors realizes and places importance on the fundamental rights of the shareholders, namely the rights to trade and transfer shares, receive the Company’s profit distribution, independently and equally attend and vote at general meetings of shareholders, decide on the Company’s important matters, appoint or remove directors, determine directors’ remuneration, appoint auditors, determine auditors’ remuneration and receive the Company’s information promptly, completely, and sufficiently through an easy-to-access channel. The Company encourages its shareholders to fully exercise their rights through the general meetings of shareholders (the Company has only one type of share that is ordinary share and one share has one voting right) so that the shareholders can participate in any decision-making that affects or relates to their rights and benefits.

The Company has a policy to support and facilitate the shareholders, including institutional investors, to attend the general meetings of shareholders. The Company announced the date of the meeting in advance via channel provided by the Stock Exchange of Thailand on 28 January 2019. The Company fixed the record date to collect the list of shareholders who have the right to attend the meeting on 18 February 2019. In order to facilitate shareholders, the Company selected the meeting venue where the mass transit system is available and sufficient for the shareholders to conveniently commute, as well as, intentionally arranged the meeting in the afternoon in order to provide shareholders enough time for preparation to attend the meeting. The Company provides opportunities for the shareholders to submit registration documents for attending the meeting in advance of the meeting date in order to minimize the time for documents verification on the meeting date. The Company also provides registration channels at the meeting venue specifically for individual shareholders, juristic person shareholders, and institutional investors and also arranges for a barcode system for registration and vote counting to expedite the registration and vote computation process. To facilitate the shareholders, the Company also provides stamp duty for the appointment of proxies.

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The Company conducts the general meetings of shareholders in a transparent manner with verification mechanisms. The shareholders are provided with an opportunity to raise questions and express opinions relating to an agenda which then were summarized and recorded in the minutes. The directors, relevant senior Management and the auditor of the Company are encouraged to attend such meetings to provide answers to and acknowledge the opinions of the shareholders.

The Company held the 2019 Annual General Meeting of Shareholders on 4 April 2019 at the Athenee Crystal Hall, 3rd Floor, The Athenee Hotel, a Luxury Collection Hotel Bangkok, Thailand. There were 23 directors and senior Management attending the 2019 Annual General Meeting of Shareholders.

The Company engaged Thailand Securities Depository Co., Ltd., its registrar, to send the invitation notice to the meeting, together with the supporting documents, to the shareholders on 13 March 2019 or 21 days prior to the meeting. The invitation notice and supporting documents in both Thai and English version were published on the Company’s website at www.dtac.co.th on 4 March 2019 or 30 days prior to the meeting in order to facilitate the shareholders with an easy and prompt access to the information relating to the meeting. The invitation notice included details of each agenda, which clearly stated type of the agenda, be it for the acknowledgement or approval. The invitation notice was completed with the Meeting’s agenda items, supplementary documents, the Board’s opinions on each agenda item. A proxy form, which was stipulated by the Ministry of Commerce, was also included in the invitation notice, while 3 independent directors were available to act as shareholders’ proxy.

The Company provided opportunities in advance for the shareholders to submit questions relevant to the meeting agenda, as well as to propose agenda item, and to nominate person to be appointed as the Company’s director at the 2019 Annual General Meeting of Shareholders during 1 October - 31 December 2018 through channel provided by the Stock Exchange of Thailand and published on the Company’s website at www.dtac.co.th on 28 September 2018. However, no question, agenda item, or nominated person were submitted.

Before the meeting began, the Company explained to all shareholders the criteria and the procedures for vote. Shareholders or proxy holders have voting right equal to number of shares they held, and such voting rights could not be split (with exception of the C-type proxy). The Company also provided an independent external legal advisor (inspector) to supervise the meeting and the voting process to ensure that they were conducted in accordance with applicable laws and the Articles of Association of

the Company. At the meeting, the Chair of the meeting provided opportunities for the shareholders to express their opinions and to make inquiries relevant to the Company and the meeting agenda.

On the same day after the conclusion of the meeting, the Company informed the SET, in the form of a newsletter, the resolution of each agenda of the 2019 Annual General Meeting of Shareholders by indicating the votes as “approved”, “disapproved” or “abstained from voting”.

Section 2 - Equitable Treatment of ShareholdersThe Board of Directors places importance on fair and equitable treatment to all shareholders; as a result, the following actions have been implemented:

The Company has a policy to protect the rights of all shareholders. At the 2019 Annual General Meeting of Shareholders, the Chair of the meeting conducted the meeting in accordance with the agenda as set forth in the invitation notice to the meeting. No agenda was added without prior notification to the shareholders. All shareholders were entitled to vote based on the amount of shares held by each shareholder whereby one share was equal to one vote.

The shareholders who could not attend the meeting in person were entitled to appoint an independent director of the Company or any other person to attend the meeting and vote on their behalf. The Company prepared proxy forms as prescribed by the Ministry of Commerce, whereby the shareholders may give their proxies voting instruction. The proxy forms were delivered to the shareholders together with the invitation notice to the meeting. Additionally, the shareholders could download the proxy forms from the Company’s website at www.dtac.co.th.

The Company appointed outside experts who had experience working with Thailand Securities Depository Co., Ltd. to proceed with the registration and vote counting and provided the shareholders with voting ballots for each agenda. As for the agenda regarding election of directors, the Company provided the shareholders with an opportunity to elect each director individually. The vote counting in each agenda was conducted openly and transparently and the voting ballots were collected and maintained for further examination.

The Company prepared the minutes of the 2019 Annual General Meeting of Shareholders and posted the video record of the meeting on the Company’s website at www.dtac.co.th, within 14 days after the meeting.


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Section 3 - Roles of Stakeholders(1) Right of Stakeholders

The Company realizes the rights of all groups of stakeholders, whether inside or outside the Company, and has undertaken to ensure that such rights are well protected and treated, in order to create good understanding and co-operation between the Company and its stakeholders, which will be advantageous to the operation of the Company, create confidence and stability for the Company and its stakeholders and increase the ability of the Company to compete in the long term.

Rights of Shareholders

The Company realizes and places importance on the rights of the shareholders as the owners of the Company. The Company has ensured equal and fair treatment among all shareholders through its accurate, transparent and timely disclosure of information and safeguarding of its assets. The Company aims to operate its business in a manner which is profitable and maintains sustainable growth, so as to increase the long-term value for the shareholders. Further details on the rights of shareholders are demonstrated in Section 1 Rights of Shareholders and Section 2 Equitable Treatment of Shareholders.

Rights of Employees

The Company has always regarded its employees as valuable resources, whose roles are fundamental to the success of the Company. Accordingly, the Company aspires to increase the potential of its employees throughout their career by enhancing skills, knowledge and mindset of its employees, as well as providing every employee with an opportunity to manage and control their career progression on an equitable basis and offering appropriate remuneration to its employees. The Company has studied and reviewed the organization structure, role, and responsibility of each unit, evaluated the performance and work progress of employees regularly, in order to build internal potential and organization readiness for being the best organization. The Company also places an emphasis on employees’ remuneration policy which is needed to align with the Company’s performance both short-term and long-term.

The Company places importance on the welfare and safety of its employees. The Company provides fundamental welfare and benefits as required by law, such as working hours, holidays, annual leaves, and any other types of leave including six-month maternity leave with pay and paternity leave, as well as social security, workmen compensation fund and provident fund, and constantly communicates all benefits to its employees.

In addition to those as prescribed by law, the Company also provides other welfare to its employees, such as health insurance, which covers outpatient and inpatient treatment and dental care, life insurance, personal accident insurance, annual health check-up, and in-house medical and nursing treatment with doctors and nurses standing by at the Company’s office during working hours, as well as providing healthcare measure, such as communication of preventive measures for epidemics and provision of protective masks and alcohol-based hand gel for its employees and visitors. Furthermore, the Company encourages its employees to exercise for good health by providing facilities, sport equipment and other sport activities, such as yoga and aerobics, etc. The Company also promotes good family relationship by providing various areas and activities, such as kids’ room, library, breastfeeding room and activities during school vacation, to support employees who have the necessity to bring their children to the work place. In addition, the Company also provides financial aid to its employees in various cases, such as wedding, childbirth, ordination, death of close relatives and natural disasters, etc.

The Company promotes and supports its employees to participate in organization development by holding an election for the “House of Employee Representatives” to represent the employees and be the mediator for cooperation with the Company, in order to solve and relieve problems of its employees in addition to those welfare and benefits already provided by the Company to its employees, as well as to provide advice to and obtain opinion from its employees.

The Company has a safety and environmental management system which is in line and complies with the international standards on safety and environmental management system. The Company has set up a unit to oversee matters relating to occupational health, safety, security and environment to establish a policy and a code of conduct on health, security, safety and environment by specifying and promoting good health and the provision of safe working environment, as well as security and relevant measures to prevent accidents and illnesses from work in accordance with the internationally accepted standards. The Company has also arranged workshops and activities on safety and working environment in order to promote a culture of safe working environment in the organization. The Company has also set up an HSSE Committee for 3 groups in several areas, which consists of representatives from its employees and the management, working together to report and recommend solutions and improvement for safe working environment, and promote and encourage safe working behavior.

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In order to develop and improve the organization to truly meet the needs of its employees, the Company invites its employees to complete an online questionnaire on employees’ opinions towards the organization (Employee Engagement Survey) on an annual basis. The questionnaire covers employees’ opinions towards their line managers, working teams and the Company, as well as guidelines and suggestions that would help develop the Company’s potential. For this purpose, employees could freely express their feelings and opinions on the questionnaire; the information obtained from the questionnaire will be kept confidential.

Rights of Community, Society and Environment

The Company is strongly aware that it is a part of Thai society and had placed importance on responsibility towards community, society and environment. Hence, The Company has established a corporate responsibility framework that responds to concerns and expectations from this stakeholder group. The framework is based on the Company’s policy and strategies in sustainability: ‘Do the Right Thing’ and ‘Empower Societies to Reduce Inequalities and Raise Standards.’ Results from social and environmental risk and impact assessments as well as from stakeholder engagements are also taken into account when designing and implementing the framework.

One of the most significant frameworks for social development is to promote safe and responsible use of Internet and communication technology, especially in children and youth which are considered a vulnerable group for such technology. The Company, therefore, has been implementing the Safe Internet Project where the goal is to increase digital resilience in children and youth. Key target groups are not only 5-16 year-old children and youth, but also parents and teachers.

In the environment area, the Company has implemented an effective environmental management system to ensure low environmental impacts to communities and Thailand in general. The system also allows the Company to control and manage business activities that may be risky to environment. The most significant aspect found is management of electronic and hazardous wastes that are generated by business operations, e.g. degraded batteries from base station towers, and by external parties, e.g. used mobile phones, SIM cards and accessories.

In addition, the Company promotes efficient energy consumption in the business process. Initiatives, for instance, include designing the office at Chamchuri Square Building with an energy-saving and eco-friendly features as well as reducing energy consumption in the office by promoting ‘Digital Workplace’, or use of communication technology at work, like e-conference, to reduce carbon emission from traveling.

Rights of Customers

The Company aspires to enhance its efficiency in providing services, offer products and services which meet customers’ demand and undertake relevant actions to ensure that customers will be confident and satisfied with the services of the Company. The Company has a clear policy that every customer will be equitably and fairly treated with respect and good manner on the principle of “customer centricity” or customer focus, in which understanding of customers’ needs is a priority and shall be adhered to by all employees in performing their work on any matters. In this regard, the Company has arranged for internal activities throughout the year in order to provide all employees the opportunities to learn and exchange opinions which will be used by the Company to improve and encourage cooperation amongst divisions which will be directly or indirectly beneficial to the customers.

Currently, the Company provides service channels to support customers, namely the Service Center and the Call Center for responding the customers inquiries conducting any transactions or making complaints. Customers can visit the Company’s Service Centers which are located in prime locations of Bangkok, its vicinities and upcountry, or dial 1678 to the Call Center for 24 hours. The Company also implements digital channels such as, dtac application, website, email and social networks i.e.. Line dtac Connect and Facebook, for customer support.

The Company has a policy of protecting personal data of the customers, under which any processing of personal data must be undertaken cautiously and carefully and must be limited to the extent required for the Company to operate, provide relevant services and carry out related commercial activities for the best interest of the customers in accordance with the laws.

Rights of Business Partners

It is a policy of the Company to treat all business partners equitably and fairly. The Company has established written, easily understandable and standardized procedures for procurement so as to assure its business partners’ confidence in the vendor selection process of the Company at all events. The Company has a clear policy on procurement for competitive bidding process. Negotiation of contracts between the Company and its business partners are undertaken based on general commercial terms.

The Company has a policy requiring its business partners to comply with the supplier code of conduct in relation to various matters, such as labor, health, safety, security, environment and corruption, which shall be of the same standard as the Company, which is in line with the internationally accepted standards. The Company conducts an onsite visit and sends questionnaires


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to its business partners on a regular basis in order to follow-up on the business partners’ compliance with the supplier code of conduct. This aims to improve the standard of business operationand build sustainable growth of the business partners of the Company.

In addition, the Company also emphasizes on respecting intellectual property rights of business partners and other third parties. It is the Company’s policy that directors, executives and employees of the Company and other persons acting on behalf of the Company shall avoid infringement of intellectual property rights of business partners and other third parties. At the same time, the directors, executives and employees of the Company and other persons acting on behalf of the Company shall protect and administer the Company’s intellectual property in the interest of the Company as prescribed in the code of conduct “dtac Code of Conduct”.

Rights of Competitors

The Company encourages and supports fair and transparent competition. The Company will not perform any act which would violate or contradict to any competition law or may cause damages to the reputation of its competitors. The Company competes in the market by offering good products and services at the right price and will deal with its competitors in an honest and professional manner.

Rights of Creditors

The Company aspires to maintain sustainable relationship with its creditors. The Company has a policy to treat its creditors equitably and fairly by providing correct, transparent and verifiable information to its creditors, and to strictly honor the terms and conditions of the contracts it has with its creditors whether in relation to the repayment of principal, interest and fees, maintenance of inancial ratio or other conditions, etc. The Company will immediately inform its creditors in case the Company fails to comply with any condition in order to jointly find solutions.

In the past years, the Company had been in compliance with the terms and conditions of the contracts it has with its creditors.

(2) International Human Rights Principles

The Company supports internationally declared human rights which include declarations and treaties of the United Nations on human rights. Directors, executives and employees of the Company and other persons acting on behalf of the Company shall respect personal dignity, privacy and individual rights of each person they are in contact with in the course of their duties, and shall not take any action which results in or supports the violation of any human rights as prescribed in the code of conduct “dtac Code of Conduct”.

(3) Anti-corruption and Bribery Policy

The first dtac’s Anti-Corruption Policy was implemented in 2006 and it has been revised from time to time. At the end of October 2018, the Company had announced the amended Code of Conduct that consisted of one significant issue which was Anti-Corruption section. The key message of this section was set to clearly enhance its best practices in doing business and to effectively gain its employee acknowledgement of the Company’s policy. It was remarkably stated that “dtac has zero tolerance for corruption”. This was the Company’s commitment in conducting its business in an open and transparent manner. Therefore, dtac does not tolerate bribery or improper payments or advantages of any kind as the Company recognizes that bribery is illegal and exposes those involved and dtac to reputational and legal risk. Bribery may take many forms including facilitation payments, kick-back schemes. In this section, the Company expanded its corporate culture on Anti-corruption boundary to touch upon its key stakeholders-related matter such as “Public Officials” who were often subject to strict anti-corruption rules and so should be treated with extra caution. In addition, the Company had focused on corruption in its supply chain which might create significant risk for dtac even if it was not directly involved. The Company had to carefully select its Business Partners and monitor their commitment to ethical and lawful conducts same as what it did, since any breach of statutory duty by its business partner may cause material risks to dtac although it has not directly involved. In addition, the Company believes that business courtesies like gifts, hospitality and travel may create a conflict of interest or be considered bribery in certain circumstances. Last but not least the Company has paid more attention when it played the role as a donor. Even charitable donations or sponsorships can be seen as bribes if undertaken to secure a commercial advantage.

The Company’s amended Anti-Corruption section as stated in the current Code of Conduct was also to be aligned with the national’s strategy on Anti-corruption policy. However, in order to let all employees understand the impact of corruption and the importance of good governance and transparency in doing business, dtac’s CEO, as a role model, initiated communication program to deliver tone from the top to its employees to ensure that they are fully committed to dtac’s ethical corporate culture for sustainable development. Currently, dtac continues to implement strict sponsorship and donation policies to ensure that the Company contributes to Thailand in the responsible way. Moreover, the Company was certified as an anti-corruption organization by the Thai Institute of Directors under the Private Sector Collective Action Coalition Against Corruption. In year 2019, Company received certification renewal for a period of three more years.

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(4) Measures on Whistleblowing and Protection for Whistleblowers

The Company has set up a communication channel through its website at www.dtac.ethicspoint.com to provide opportunities for shareholders and interested persons to opine or complain directly to the Board of Directors of the Company in case there is an unfair treatment or a trouble arising from the action of the Company. It is mandatory to all employees that he or she is required to report any act that is likely to constitute a breach of the Code of Conduct to the Integrity Hotline (http://dtac. ethicspoint.com). Employees can consult Ethics and Compliance Officer or his/her leader in case advice concerning the reporting breaches is necessary. The Integrity Hotline is a confidential web-based intake system. The Hotline is operated by an independent third party. The information of the whistleblower and other details are under supervision of the Investigation Officer of a new Investigation Department. Such information will be kept confidential for the confidence of the whistleblower. Furthermore, Ethics and Compliance Officer has regularly updated to Audit Committee at least once a quarter for updating compliance program and take consideration and recommendation from the Audit Committee if there is any concern.

Section 4 - Disclosure of Information and TransparencyThe Company complies with the regulations of the SEC, the Office of SEC and the SET in respect of disclosure of significant information, in particular, disclosure of financial information, the Company’s development, operational information, business performance

and other relevant substantial information of the Company through the websites of the SET to ensure transparent and equitable disclosure. In addition, the Company regularly posts updated information, both in Thai and English, regarding its financial information, annual report, policies and CSR activities and registration statement (Form 56-1) on its website at www.dtac.co.th. The Company also holds an analyst briefing in each quarter to announce its quarterly operating results to shareholders, investors, analysts, fund managers, and other interested persons. The analyst briefing is attended by the Management of the Company who will clarify and answer inquiries raised by attending persons.

The Company realizes that the Company’s information, whether financial or non-financial information, will influence decision making of its shareholders and other general investors. Therefore, to ensure that significant information is disclosed accurately, promptly and transparently, the Company has established an Investor Relations Division to efficiently and regularly communicate with its shareholders and general investors. Any interested person can obtain the Company’s information from the Investor Relations Division at telephone number +66-2202-8882 or email address [email protected].

In 2019, the Company had disclosed material information through the channel provided by the Stock Exchange of Thailand totaling 36 times, the Company also arranged relevant activities to visit and provide publicly disclosed information to shareholders, analysts, and investors from time to time, which could be summarized as follows;

Stakeholders Engagement Channel Frequency Expectation Response

Shareholders/ Investors

• Annual General Meeting (AGM)

• Once a year • Fair treatment to all shareholders

• Disclosure with accuracy, punctuality and easy access

• Growth of business and profit for shareholders

• Consistent dividend payment

• Compliance with guidance and regulation of the Stock Exchange of Thailand and the Securities and Exchange Commission, Thailand

• Doing business with corporate governance and social responsibility

• Making investments to support the Company’s growth

• Compliance with dividend policy

• Providing a variety of channels to communicate with shareholders and investors

• Regularly participating in activities, including roadshow and conference, to meet investors both local and abroad

• Quarterly result announcement –Conference Call

• Once a quarter

• Roadshow and conference meeting both local and international shareholders/ investors

• 12 times in 2019

• Investor Company Visit/ Conference Call

• 60 times in 2019

• Investor Relations website

• Frequently update information on website

• Investor Relations email • Daily


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The Board of Directors of the Company is responsible for the Company’s financial statements and financial information contained in the annual report. The financial statements have been prepared in accordance with the generally accepted accounting principles in Thailand. The Company has chosen an appropriate accounting policy and has applied the same accounting standard for each accounting period. The Board of Directors has appointed the Audit Committee to review the quality of the financial statements and internal control system of the Company, as well as sufficient disclosure of significant information in the notes to the financial statements, in order to ensure all accounting records are accurate, complete and adequate for the benefit of the shareholders and general investors. Furthermore, the Board of Directors has prepared the Board of Directors’ report in the annual report, providing information on the results of business operation and other important matters occurred within the year for the shareholders’ acknowledgement.

In 2019, there has been no action taken against the Company by the relevant regulators on the basis of any non-disclosure of any material information within the requisite timeframe.

Section 5 – Responsibilities of the Board of Directors(1) Composition of the Board of Directors

At present, the Board of Directors of the Company consists of 10 directors, all are non-executive directors. Four directors are independent directors, two of whom are female. In addition, there is another female director who is a non-executive director. In total, the Company has three female directors representing 30% of existing directors. No director or independent director holding more than 5 directorship positions in publicly listed companies. Currently, none of any director of the Company hold more than three (3) directorships in publicly listed companies. The Company has no policy which allow executive director to hold more than 2 directorship positions in publicly listed companies, excluding subsidiaries, affiliates and joint-venture companies of the Company in order to ensure their efficiency in performing their duties and responsibilities towards the Company. More than one non-executive directors have work experience in the business of the Company.

The Chair of the Board of Directors and the Chief Executive Officer have separate functions and responsibilities and are not the same person. The Chair has been elected by the directors of the Company and acts as the Chair of the meeting. The Chair has the responsibility to ensure that the meetings of the Board of Directors of the Company proceed in accordance with the agendas, encourage all directors to participate in the meeting (such as asking questions or making observation notes), give advices and recommendations to the Management and support

the business operation of the Company. However, the Chair will not interfere with the work of the Management of the Company. The Chief Executive Officer is responsible for managing the business of the Company and supervising the business operation of the Company to ensure that it complies with the Article for Association, the resolutions of the shareholders’ meetings, the Board of Directors’ meetings, policies and business plans of the Company and applicable laws.

The Board of Directors of the Company is composed of directors who possess qualifications, knowledge, expertise and experiences in various areas, including finance and accounting, business administration, law and telecommunications business. The independent directors possess higher qualifications than those required by the SEC and the SET, details of which can be found under Section “Corporate Governance – Independent Directors”.

The Company does not require that the Chair of the Board of Directors be an independent director, given that the telecommunications business has unique and complex nature and is subject to rigorous regulations. The Company believes that its Chair and the Board of Directors possess knowledge, capacity and good understanding of the nature of the telecommunications business, which are necessary in the decision-making process in order to bring the utmost benefits to the Company and its shareholders as a whole. Despite the fact that the Chair is not an independent director, the Board of Directors of the Company is still of the opinion that the Company has good internal control system, including mechanisms which can create confidence for its shareholders and all stakeholders that any decision-making of the Board of Directors was made independently, prudently, and without being influenced or directed in any respect.

(2) Roles, duties and responsibilities of the Board of Directors

The Board of Directors of the Company approves the vision, missions, strategies, business direction and operational policy, business plan and annual budget of the Company, and directs the Management to perform in compliance with the established policies and business plans in accordance with applicable laws, objectives and Articles of Association of the Company, and resolutions of the Board of Directors’ and shareholders’ meetings, taking into account the utmost benefits of the Company and the stakeholders, in order to build sustainable growth of the Company and increase long term value for the shareholders. The Board of Directors will review and approve the vision, missions, strategies, and business direction and operational policy on an annual basis in order to adapt to the changing situation and business conditions. Further details on the authorities, duties and responsibilities of the Board of Directors can be found under Section “Corporate Governance – Board of Directors”.

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The Board of Directors of the Company ensures compliance with the requirements on actions and disclosure of information concerning transactions which may give rise to conflicts of interests pursuant to the regulations of the SEC, the SET and relevant regulators by assigning the Audit Committee to be responsible for considering, approving and giving recommendations in relation to transactions which may give rise to conflicts of interests. In addition, the Company has introduced the General Mandate for Interested Person Transactions, which sets out the types and approval procedures for transactions which may give rise to conflicts of interests, which are undertaken by the Company in its normal course of business. The Management is required to seek the Board of Directors’ approval for entries into transactions which may give rise to conflicts of interests which are of significant size or important nature to the business operation of the Company. The Company proposes Interested Person Transactions to the Board of Directors for approval or reports the entries into such transactions to the Board of Directors for acknowledgement in accordance with its policy.

The Board of Directors holds a Board of Directors’ Meeting without the presence of the executive director or member of the Management at least once a year. The meeting provides the directors with the opportunity to review the performance of the Board of Directors, the Management and the Company as well as to consider and discuss management issues or other issues which are of the interest of the Board of Directors. The resolutions of the meeting would be notified to the Chief Executive Officer for acknowledgement and consideration for further improvement. In 2019, the Board of Directors held 1 meeting witout the presence of the executive director and the Management. Moreover, the Board of Directors holds a Board of Directors’ meeting with the External Auditor without the presence of the executive director or member of the Management at least once a year. In 2019, the Board of Directors held 1 meeting with the External Auditor without the presence of the executive director and the Management.

The Board of Directors conducts an evaluation on the performance of the Board of Directors, an individual director self-assessment, and sub-committee self-assessment on an annual basis in order to provide an opportunity for each director to express his or her view on the performance of the Board of Directors and to consider and review the results, problems and obstacles on its performance over the previous year. In 2019, the Board of Directors has conducted the aforementioned evaluations with the results as set out below.

The evaluation on the performance of the Board of Directors

The Company arranges for an evaluation on the performance of the Board of Directors on an annual basis so as to assess the performances of the Board of Directors in accordance with the good corporate governance principles. The evaluation procedure can be summarized as follows.

The Company Secretary prepares and reviews the evaluation form for correction and completeness and in compliance with the criteria required by the regulators. The evaluation form will then be proposed to the Board of Directors to complete. The Company Secretary will summarize the result of the evaluation on the performance of the Board of Directors as well as the strength and improvement areas before proposing to the Nomination Committee for its recommendations for further proposing to the Board of Directors for its consideration. The Board of Directors will review the result of the evaluation in order to improve their performance.

The evaluation form for the evaluation of the performance of the Board of Directors contains six key areas, namely, (1) structures and qualifications of the Board of Directors, (2) roles, duties and responsibilities of the Board of Directors, (3) meetings of the Board of Directors, (4) performance of the Board of Directors, (5) relationship of the Management, and (6) self-improvement of the directors and executives’ development. The results of each key area are calculated in percentage, whereby 85 percent or more = excellent, more than 75 percent = very good, more than 65 percent = good, more than 50 percent = average, and less than 50 percent = need improvement. It can be concluded from the evaluation results that the Board of Directors has performed its duties in accordance with the good corporate governance principles and the code of conduct “dtac Code of Conduct” of the Company with most of the performance in the level of excellent and having an average score of 95.53 percent.

Sub-Committee Self-Assessment

In 2019, the Company has arranged for sub-committee’s self-assessment. The evaluation procedure is the same as the evaluation on the performance of the Board of Directors as mentioned above. The evaluation form for sub-committee’s self-assessment contains 3 key aspects, which are, (1) committee composition, (2) committee responsibilities, and (3) operating practices. After the evaluation, the scores of all sub-committees showed the improvement over the last year’s scores.

Individual director’s self-assessment

The Company also arranges for individual director’s self-assessment on an annual basis. The evaluation procedure is the same as the evaluation on the performance of the Board of Directors as mentioned above. The evaluation form for individual director’s self-assessment contains five key areas, namely, (1) foundational, (2) directors’ citizenship, (3) directors’ responsibilities, (4) directors’ meetings, and (5) directors’ overall performance. After the evaluation, the average results were 97.17 percent. The results showed that the Company’s directors are qualified and have performed their duties excellently and properly in accordance with the principles of good practice for directors.


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(3) Meetings of the Board of Directors

A meeting of the Board of Directors of the Company is held at least once every quarter. The Company informs the directors of the dates and time of the meetings in advance every year so that the directors can manage their schedule to attend the meetings accordingly. There are clear agendas for each meeting. The Company sends the meeting invitation, together with the supporting documents, to the directors at least seven days in advance to allow the directors’ sufficient time to study the information prior to the meeting. Each meeting takes at least three hours, except for extraordinary meeting on specific purpose. The senior Management of the Company will join the meeting in order to clarify and answer the Board of Directors’ queries. The Chair will allow every director to express his/her opinion before proceeding with the vote and concluding a resolution of the meeting in each agenda. Directors having interest, whether directly or indirectly, will not be eligible to vote and will have to leave the meeting during the consideration of the relevant agenda.

The Company records the minutes of the meetings in writing and keep the originals with the meeting invitation notices and the relevant supporting documents. Electronic copies of the documents are also maintained to facilitate the directors and relevant persons.

Since the Company sometimes has a number of directors who are not in Thailand; the Company, therefore, has arranged facilities for these directors to attend the Board of Directors’ meetings via video or teleconference, so the directors could provide opinions or recommendations which are beneficial to the Management and the business operation of the Company. Such attendance does not count as quorum, and those who attend the meetings via video- or tele-conference do not have the right to vote.

The Company imposes the policy with regard to the quorum of the Board of Directors that the quorum of each meeting must consist of no less than two-third of total directors. This policy is also applied to the vote of each agenda. However, in case that the quorum is less than two-third, it is the Chair’s discretion to proceed with quorum prescribed in the Company’s Articles of Association (no less than half of the total directors).

In 2019, the Company held 10 Board of Directors’ meetings with the rate of attendance in person of the directors of 77 percent. The attendance of each director is as follows:

Name – Surname Position Date of First Appointment

Date of Last Appointment

Attendance

Total In person

By electronics

means

Mr. Boonchai Bencharongkul Chair 29 October 1990 26 March 2015 10/10 10 -

Mr. Petter Boerre Furburg Vice Chair 13 July 2017 13 July 2017 5/10 3 2

Mr. Chulchit Bunyaketu Independent Director 6 March 2000 31 March 2017 10/10 10 -

Mrs. Kamonwan Wipulakorn Independent Director 8 December 2014 26 March 2015 8/10 8 -

Mr. Stephen Woodruff Fordham Independent Director 17 November 2006 26 March 2015 8/10 5 3

Mrs. Chananyarak Phetcharat Independent Director 5 September 2011 26 March 2015 10/10 10 -

Mrs. Tone Ripel Director 30 March 2016 30 March 2016 9/10 8 1

Mr. Sverre Pedersen Director 8 December 2017 8 December 2017 8/10 3 5

Mr. Christian Wulff Sondergaard1 Director 9 December 2019 9 December 2019 1/1 1 -

Mr. Rakesh Jain2 Director 9 December 2019 9 December 2019 1/1 1 -

Remark: 1 Mr. Christian Wulff Sondergaard was appointed as a new director in replacement of Mr. Haakon Bruaset Kjoel (who resigned from his directorship on 9 December 2019) with effect from 9 December 2019 pursuant to the resolution of the Board of Directors’ Meeting No. 10/2019 held on 9 December 2019.

2 Mr. Rakesh Jain was appointed as a new director in replacement of Mr. Gunnar Johan Bertelsen (who resigned from his directorship on 9 December 2019) with effect from 9 December 2019 pursuant to the resolution of the Board of Directors’ Meeting No. 10/2019 held on 9 December 2019.

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The attendance of the directors who resigned during 2019 is as follows:

Name – Surname Position Date of First Appointment

Date of Last Appointment

Attendance

Total By person

By electronics

means

Mrs. Alexandra Reich1 Director 14 September 2018 14 September 2018 3/3 3 -

Mr. Gunnar Johan Bertelsen Director 27 April 2010 1 February 2018 8/9 8 -

Mr. Haakon Bruaset Kjoel Director 5 September 2011 30 March 2016 9/92 8 1

Remark: 1 Mrs. Alexandra Reich expressed her intention not to be re-elected for another term; but would remain as the Chief Executive Officer of the Company pursuant to the resolution of Annual General Meeting of Shareholder for the year 2019 held on 4 April 2019.

2 Mr. Haakon Bruaset Kjoel attended the Board of Directors’ Meeting No. 10/2019 held on 9 December 2019 until the agenda of the appointment of new director and had left the meeting after Mr. Christian Wulff Sondergaard was appointed as a new director on his replacement.

(4) Subcommittees

In 2019, the sub-committees have performed its duties as follows:

Audit Committee

The Audit Committee consists of 3 Independent Directors. The Chair of the Audit Committee of dtac has experiences and professional qualifications i.e. accounting and financial skills. Prior to her presidential role, she was a Chief Financial Officer of a leading company including the listed companies in Thailand and was a financial executive with several financial institutions. Her expertise is also valuable and supportive in the telecommunication industries.

A meeting of the Audit Committee is held approximately once a month. In 2019, the Company held 10 Audit Committee meetings, the attendance of which was as follows:

Name listNo. of attendance / No. of meetings in 2019

Total In person By electronics means

Mrs. Kamonwan Wipulakorn (Chair and Independent Director) 9/10 9 -

Mr. Chulchit Bunyaketu (Independent Director) 10/10 10 -

Mr. Stephen Woodruff Fordham (Independent Director) 8/10 7 1

In 2019, the Audit Committee was responsible for reviewing the financial reporting process of the Company, the internal control system and internal audit system, compliance with laws relating to the business of the Company, considering and selecting (including proposing to terminate) the Company’s auditors and reviewing connected transactions, transactions of interested persons or transactions which may give rise to conflicts of interest, etc.

In carrying out its duty on the selection (including proposal to terminate) of the auditors of the Company, the Audit Committee will consider the selection of auditors pursuant to the Company’s assessment criteria, which consist of the auditors’ experience, performance, understanding of the telecommunications business and expertise on auditing telecommunications companies, as well as their independence in performing their works during the past year, in order to propose the appointment of the auditors to the Board of Directors and the shareholders’ meeting for consideration. At the 2019 Annual General Meeting of Shareholders, which was held on 4 April 2019, Mrs. Gingkarn Atsawarangsalit Certified Public

Accountant No. 4496, Ms. Sirirat Sricharoensup Certified Public Accountant No. 5419, Ms. Rungnapa Lertsuwankul, certified public accountant No. 3516, and Ms. Pimjai Manitkajohnkit, certified public accountant No. 4521, all from EY Office Limited were appointed as the auditors of the Company. Mrs. Gingkarn Atsawarangsalit was the auditor in charge of auditing the Company and expressed opinions on the financial statements of the Company for the year ended 31 December 2019.

In performing its duty on the audit of the internal control and audit system, the Audit Committee will meet with the auditors of the Company at least once a year without the presence of the Management of the Company. Furthermore, where the Audit Committee deems necessary and appropriate, the Audit Committee may request clarifications and opinion from the internal audit department and the auditors of the Company on information relating to financial and accounting matters to support the performance of its duties.


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The Remuneration Committee of the Company consists of 5 directors, more than half are Independent Directors (3 persons) and 2 Non-Executive Directors. Chair of the Remuneration Committee is an independent director. A meeting of the Remuneration Committee is held at least twice a year. In 2019, the Company held 6 Remuneration Committee meetings, the attendance of which was as follows:



Mr. Chulchit Bunyaketu (Chair and Independent Director) 6/6 5 1

Mrs. Kamonwan Wipulakorn (Independent Director) 5/6 3 2

Mrs. Chananyarak Phetcharat (Independent Director) 6/6 5 1

Mr. Christian Wulff Sondergaard1 (Non-Executive Director) 0/0 - -

Mr. Rakesh Jain2 (Non-Executive Director) 0/0 - -

Remark: 1 Mr. Christian Wulff Sondergaard was appointed as a new director in replacement of Mr. Haakon Bruaset Kjoel (who resigned from his directorship on 9 December 2019) with effect from 9 December 2019 pursuant to the resolution of the Board of Directors’ Meeting No. 10/2019 held on 9 December 2019. After he has been seating as a member of Remuneration Committee, there was no meeting of Remuneration Committee.

2 Mr. Rakesh Jain was appointed as a new director in replacement of Mr. Gunnar Johan Bertelsen (who resigned from his directorship on 9 December 2019) with effect from 9 December 2019 pursuant to the resolution of the Board of Directors’ Meeting No. 10/2019 held on 9 December 2019. After he has been seating as a member of Remuneration Committee, there was no meeting of Remuneration Committee.

In 2019, the Remuneration Committee was responsible for considering and giving recommendation on remuneration of the Chair and other directors, reviewing and recommending the remuneration packages and bonus scheme for the Chief Executive Officer and reviewing the engagement contract of the Chief Executive Officer, promoting and encouraging the Company to develop a Company’s remuneration philosophy and policy to be in line with the Company’s direction and talent development plan and etc.

At the 2019 Annual General Meeting of Shareholders, the meeting approved the remuneration of the Board of Directors and the sub-committees for 2019 in the amount not exceeding THB 13,572,000, which is lower than the remuneration for the year 2018 as the representative director from CAT Telecom has resigned from the Board of Directors due to the termination of the Concession Agreement. The Company does not have any other form of remuneration for directors, details are as follows:

PositionDirectors’ Remuneration Structure (THB)

Monthly Allowance

Chair 320,000

Independent director 110,000

Chair of the Audit Committee 67,000

Member of the Audit Committee 50,000

Chair of the Remuneration Committee / Chair of the Nomination Committee / Chair of the Corporate Governance Committee

34,000

Member of the Remuneration Committee / Member of the Nomination Committee / Member of the Corporate Governance Committee

17,000

In determining the remuneration of the Chief Executive Officer, the Remuneration Committee will consider the performance of the Chief Executive Officer during the previous year pursuant to the specified key performance indicators (KPIs), each of which has different weighted scores.

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The Nomination Committee of the Company consists of 5 directors, majority is 3 Independent Directors and 2 Non-Executive Directors. Chair of the Nomination Committee is an independent director. A meeting of the Nomination Committee is held at least twice a year. In 2019, the Company held 7 Nomination Committee meetings, the attendance of which was as follows:



Mr. Stephen Woodruff Fordham (Chair and Independent Director) 7/7 2 5

Mr. Chulchit Bunyaketu (Independent Director) 6/7 4 2

Mrs. Chananyarak Phetcharat (Independent Director) 7/7 6 1



Remark: 1 Mr. Christian Wulff Sondergaard was appointed as a new director in replacement of Mr. Haakon Bruaset Kjoel (who resigned from his directorship on 9 December 2019) with effect from 9 December 2019 pursuant to the resolution of the Board of Directors’ Meeting No. 10/2019 held on 9 December 2019. After he has been seating as a member of Nomination Committee, there was no meeting of Nomination Committee.

2 Mr. Rakesh Jain was appointed as a new director in replacement of Mr. Gunnar Johan Bertelsen (who resigned from his directorship on 9 December 2019) with effect from 9 December 2019 pursuant to the resolution of the Board of Directors’ Meeting No. 10/2019 held on 9 December 2019. After he has been seating as a member of Nomination Committee, there was no meeting of Nomination Committee.

In 2019, the Nomination Committee was responsible for selection of qualified candidates to be nominated for election as directors and executive management of the Company and its subsidiaries. Additionally, the Nomination Committee has considered and made recom-mendation on the Board of Directors’ self-assessment results, the restructure of the Board’s seats and top executives’ succession plan, etc.


The Corporate Governance Committee consists of 5 directors, majority is 3 Independent Directors and 2 Non-Executive Directors. Chair of Corporate Governance Committee is an Independent Director. A meeting of Corporate Governance Committee is held at least once a year. In 2019, the Company held 3 Corporate Governance Committee meetings, the attendance of which was as follows.



Mrs. Chananyarak Phetcharat (Chair and Independent Director) 3/3 3 -

Mr. Stephen Woodruff Fordham (Independent Director) 2/3 2 -

Mrs. Kamonwan Wipulakorn (Independent Director) 3/3 3 -



Remark: 1 Mr. Christian Wulff Sondergaard was appointed as a new director in replacement of Mr. Haakon Bruaset Kjoel (who resigned from his directorship on 9 December 2019) with effect from 9 December 2019 pursuant to the resolution of the Board of Directors’ Meeting No. 10/2019 held on 9 December 2019. After he has been seating as a member of Corporate Governance Committee, there was no meeting of Corporate Governance Committee.

2 Mr. Rakesh Jain was appointed as a new director in replacement of Mr. Gunnar Johan Bertelsen (who resigned from his directorship on 9 December 2019) with effect from 9 December 2019 pursuant to the resolution of the Board of Directors’ Meeting No. 10/2019 held on 9 December 2019. After he has been seating as a member of Corporate Governance Committee, there was no meeting of Corporate Governance Committee.

In 2019, the Corporate Governance Committee was responsible for developing and promoting a good corporate governance so as to be in compliance with the international standard and acceptable to shareholders, investors, regulators, and other stakeholders.


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(5) Development of Directors and Management

When appointing a new director, the Company will prepare material information with respect to business operation and the corporate governance policy of the Company as well as arrange for a meeting with the Management, so that the new director can familiarize himself/herself with the business and the corporate governance of the Company. The Company also encourages its directors to attend the trainings relating to duties of directors, which are organized by Thai Institute of Directors Association and other institutes. The Company will inform its directors of relevant trainings which would be useful for the directors in carrying out their duty as the directors of the Company. At present, there are 5 directors of the Company who have attended the courses organized by the Thai Institute of Directors Association where 2 directors (including the director who resigned from directorship this year) attended the courses this year. Details of the directors training can be found under Section “Profile of Directors”.

The Company regularly reviews the performance and skill sets of its management, and based upon this review, individual development plans have been made and executed. The Company has prepared both internal and external training courses for the development of its executives. Further details on human resources development policy can be found under Section “Management Structure – Human Resources Development Policy”.

(6) Succession Plan for Senior Executives

The Board of Directors of the Company has appointed People Group to be responsible for setting up the succession plan for the Chief Executive position. People Group will consider persons who have suitable qualifications, knowledge and ability for managing the Company’s business. The Management has proposed top executives’ succession plan to the Nomination Committee and the Board of Directors for consideration and recommendations on the appropriateness of such plan.

Board of Directors and Subcommittee

The structure of the Board of Directors of the Company is comprised of the Board of Directors and the sub-committees, namely the Audit Committee, the Remuneration Committee, the Nomination Committee, and the Corporate Governance Committee.

The scope of authorities, duties and responsibilities of the Board of Directors and the sub-committees are as follows:

Board of Directors

The authorities, duties and responsibilities of the Board of Directors are as set forth in the Public Limited Company Act, the Securities and Exchange Act, the regulations of the SET and the Articles of Association of the Company.

The authorities, duties and responsibilities of the Board of Directors, including the approval authorities are as follows:

(1) Performing its duties and responsibilities with due care and loyalty, taking into consideration the best interest of the Company and its shareholders;

(2) Responsible for the administration of the Company, managing the Company’s long-term and strategic planning, safeguarding the proper organization of the business, and overseeing the management of day-to-day operations;

(3) Setting the Company’s direction, vision, values and leadership expectations;

(4) Considering and approving to make decisions to enter into major transactions and other proceedings, and in certain cases grants authority to make decision, in accordance with applicable legislation, the Company’s objectives and Articles of Association, decisions made by the shareholders’ meetings, as well as the Company’s governing documents;

(5) Ensuring that the Company adheres to generally accepted principles for the governance and effective control of the Company’s activities;

(6) Approving and supervising targets and strategy plans and any deviations therefrom;

(7) Ensuring the accuracy and completeness of the Company’s operational and financial reporting to all shareholders and general investors;

(8) Having adequate oversight of internal control over financial reporting (ICFR) to ensure that these controls adhere to its objectives, are compliant with legal requirements and the Company’s governing documents;

(9) Evaluating and discussing the Company’s optimal capital structure, the dividend policy, the funding strategy and the optimal funding composition on a regular basis;

(10) Declaring interim dividends to shareholders from time to time when the Board is of the view that the Company has derived sufficient profits to do so;

(11) Reviewing the management’s draft of the annual accounts and ensuring that the accounts are accurately and completely prepared and that they reflect the Company’s financial condition and results of operation for the benefits of all shareholders and general investors;

(12) Together with the management, compiling the annual report;

(13) Overseeing and determining the overall organization of the Company’s and its key subsidiaries’ operations;

(14) Ensuring that risk management activities are in place to pro-actively identify and deal with critical business risks related to the Company. All strategic, operational (financial and non-financial) and legal risks of importance shall be taken into consideration;

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(15) Overseeing that transactions with potential conflicts of interest of management, Board members and shareholders, including their related persons, are undertaken on an arm’s length basis and on normal commercial terms, and are not prejudicial to the interests of the Company and the Company’s minority shareholders;

(16) Ensuring that the Company has adequate and appropriate internal controls and that an internal audit unit is established and maintained to monitor the Company’s internal controls and report any significant failures or weaknesses thereof, together with recommendations of corrective action;

(17) Preparing issues to be dealt with at shareholders’ meetings and providing recommendations thereon;

(18) dentifying potential candidates with the appropriate knowledge, competencies and expertise to complement the existing skills of the Board and the board of its key subsidiaries;

(19) Reviewing and making recommendations on remuneration of directors to shareholders for approval;

(20) Appointing (and dismissing) the Company’s Chief Executive Officer, and overseeing and undertaking an annual evaluation of the Chief Executive Officer’s execution of his/her duties;

(21) Overseeing that both safety and security risks are managed proportionally and effectively to ensure protection of personnel, information and other assets;

(22) Ensuring that the Company has adequate procedures in place to prevent the Company from being involved in corruption; and

(23) Carrying out an evaluation once a year of its work, functions and performance.

Reserved key matters for the Board’s approval

(1) Strategy, business plan, key performance indicators

(2) Capital expenditure and expenses exceeding certain material limits

(3) Strategic investments in new business and divestments

(4) Organizational structure and the appointment of the CEO and senior executives

(5) CEO and senior executives’ succession plan

(6) CEO’s compensation

(7) Appointment of directors, CEO and CFO of all subsidiaries of the Company

(8) Important transactions and any other extraordinary matters having significant importance

(9) Litigation having significant impacts

(10) Significant policies

(11) Loan commitments and lines of credit from banks and other financial institutions

(12) Dividend policy, declaration of interim dividends and proposal of annual dividend for the annual general meeting of shareholders’ approval.

Audit Committee

The Audit Committee consists of 3 independent directors, namely:

Names of Directors Position

Mrs. Kamonwan Wipulakorn (Independent Director) Chair of the Audit Committee

Mr. Chulchit Bunyaketu (Independent Director) Member of the Audit Committee

Mr. Stephen Woodruff Fordham (Independent Director) Member of the Audit Committee

The members of the Audit Committee have all the qualifications of an “Independent Director”. They are not authorized by the Board of Directors to make decisions on the business operation of the Company, its parent company, subsidiary, affiliate or juristic person which may have conflicts of interest, and are not directors of its parent company, subsidiary or affiliate, which is a listed company. Mr. Chulchit Bunyaketu and Mrs. Kamonwan Wipulakorn have the knowledge and experience in the area of accounting, sufficient to review the creditability of financial statements of the Company. The duties and responsibilities of the Audit Committee are as follows:


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(1) To review the Company’s financial reporting process to ensure that it is accurate and adequate;

(2) To review the Company’s internal control system and internal audit system, which include accounting controls, financial controls, operational and compliance controls, risk management policies and other control systems established by the management of the Company, to ensure their suitability and efficiency. Such review should be conducted by an internal auditor and/or an independent auditor at least once a year;

(3) To review the effectiveness of the Company’s internal control unit at least once a year to ensure the adequacy of its resources and the appropriateness of its position within the Company;

(4) To review the independency of the internal audit unit, as well as approving the appointment, transfer and dismissal of the Head of the Internal Audit Unit or any other unit in charge of an internal audit;

(5) To review the Company’s compliance with the Securities and Exchange Act, the rules and regulations of the SEC and the SET including any other laws and regulations relevant to the business operation of the Company;

(6) To consider, select and nominate an independent person to be the Company’s auditor, and to propose such person’s remuneration and terms of engagement (including to propose to terminate the auditor who is not qualified), as well as to attend a non-management meeting with such auditor at least once a year;

(7) To review the independency of the Company’s auditor at least once a year;

(8) To review the scope, performance and cost effectiveness of the Company’s auditor, its independency and objectivity;

(9) To review by which the Company’s employees may report, under protection, incidents on possible improprieties in financial reporting or other matters, including to arrange for investigation and take appropriate follow-up action on such matter;

(10) To review connected transactions, transactions with interested persons, or transactions that may lead to conflicts of interest, to ensure that they are in compliance with the laws and regulations of the SEC and the SET, and are reasonable and for the best interest of the Company;

(11) To prepare and disclose in the Company’s annual report, an Audit Committee’s report, which must be signed by the Chair of the Audit Committee and consists of at least the following information:

• an opinion on the accuracy, completeness and creditability of the Company’s financial report;

• an opinion on the adequacy of the Company’s internal control system;

• an opinion on the compliance with the Securities and Exchange Act, the rules and regulations of the SEC and SET, and any other laws and regulations relevant to the business operation of the Company;

• an opinion on the suitability of the auditor;

• an opinion on the transactions that may lead to conflicts of interest;

• the number of the Audit Committee meetings and the attendance of each members of the Audit Committee;

• an opinion or overview comment of the Audit Committee from its performance in accordance with the charter; and

• any other matters which, according to the Audit Committee’s opinion, should be known to the shareholders and general investors, subject to the scope of duties and responsibilities assigned by the Company’s Board of Directors; and

(12) To perform any other act as assigned by the Company’s Board of Directors, with the approval of the Audit Committee.


The Remuneration Committee consists of 5 directors, namely:


Mr. Chulchit Bunyaketu (Independent Director) Chair of the Remuneration Committee

Mrs. Kamonwan Wipulakorn (Independent Director) Member of the Remuneration Committee

Mrs. Chananyarak Phetcharat (Independent Director) Member of the Remuneration Committee

Mr. Christian Wulff Sondergaard (Non-Executive Director) Member of the Remuneration Committee

Mr. Rakesh Jain (Non-Executive Director) Member of the Remuneration Committee

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The duties and responsibilities of the Remuneration Committee are as follows:

(1) To review and recommend the remuneration of the Chair and other directors;

(2) To review and approve the remuneration of the Chief Executive Officer;

(3) To review the on-going appropriateness and relevance of the remuneration policy;

(4) To ensure that all relevant legal requirements regarding disclosure of remuneration, in all forms, are complied with;

(5) To report to the Board of Directors regarding the remuneration of the Chief Executive Officer (including base pay, incentive payments, equity awards and retirement or severance rights), having regard to the remuneration policy and whether in respect of any elements of remuneration, any shareholders’ approvals are required;

(6) To review the contractual rights of the Chief Executive Officer on termination, and any payments made or proposed, to determine whether they are reasonable in the circumstances;

(7) To provide the Board of Directors with minutes of Remuneration Committee meetings and to report the remuneration Committee’s actions to the Board of Directors with appropriate recommendations;

(8) To provide a statement for inclusion in the annual report that describes the Remuneration Committee’s composition and how its responsibilities were discharged;

(9) To review and update the Remuneration Committee’s charter to reflect any changes in the relevant laws and regulations for approval by the Board; and

(10) To perform such other functions as may be assigned to it by the Board of Directors.


The Nomination Committee consists of 5 directors, namely:


Mr. Stephen Woodruff Fordham (Independent Director) Chair of the Nomination Committee

Mr. Chulchit Bunyaketu (Independent Director) Member of the Nomination Committee

Mrs. Chananyarak Phetcharat (Independent Director) Member of the Nomination Committee

Mr. Christian Wulff Sondergaard (Non-Executive Director) Member of the Nomination Committee

Mr. Rakesh Jain (Non-Executive Director) Member of the Nomination Committee

The duties and responsibilities of the Nomination Committee are as follows:

(1) Making recommendations on qualified candidates for election as directors of the Company and its subsidiaries to be proposed to Board of Directors’ meeting for approval;

(2) Making recommendations on qualified candidates for election as Chief Executive Officer and Chief Financial Officer of the Company and its subsidiaries;

(3) Reviewing the structure, size and composition of the Board taking into account the current requirements and future development of the Company, and make recommendations to the Board with regard to any adjustments as deemed necessary by take into account beneficial of all shareholders, expertise, capacity, and diversity as needed by the Company;

(4) Paying attention to the Board self-assessment evaluation and recommends any improvement as it deems necessary;

(5) Monitoring that steps be taken to ensure that shareholders have the opportunity to propose candidates for the Board;

(6) When assessing candidates, taking into consideration if the candidates have the necessary experience, qualifications and capacity;

(7) Considering if a rotation of the members of the Board is necessary;

(8) Justifying its recommendations and thus any dissenting votes must be stated in the recommendation;

(9) Ensuring the Company’s compliance with relevant laws and regulations regarding nomination and qualifications of directors;

(10) Satisfying itself with regard to succession planning for the Board and key management appointments;

(11) Ensuring appropriate disclosure of information on its activities; and

(12) Carrying out an evaluation once a year of its work, functions, performance.


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The Corporate Governance Committee consists of 5 directors, namely:


Mrs. Chananyarak Phetcharat (Independent Director) Chair of the Corporate Governance Committee

Mr. Stephen Woodruff Fordham (Independent Director) Member of the Corporate Governance Committee

Mrs. Kamonwan Wipulakorn (Independent Director) Member of the Corporate Governance Committee

Mr. Christian Wulff Sondergaard (Non-Executive Director) Member of the Corporate Governance Committee

Mr. Rakesh Jain (Non-Executive Director) Member of the Corporate Governance Committee

The duties and responsibilities of the Corporate Governance Committee are as follows:

(1) Overseeing that the Company adheres to generally accepted principles for governance and effective control of the Company’s activities and maintain a corporate culture that encourages good corporate governance practices;

(2) Establishing and maintaining an appropriate corporate governance policy and procedures;

(3) Ensuring the implementation of the governing documents as adopted by the Board and the policy and procedures to secure adequate corporate governance in the Company and in all subsidiaries controlled directly and indirectly by the Company;

(4) Ensuring that the Chief Executive Officer at least annually perform an assessment of the implementation of the governing documents and the level of compliance, and report to the Board;

(5) Reviewing and reporting to the Board on material matters, findings and recommendations pertaining to corporate governance;

(6) Justifying its recommendations and thus any dissenting votes must be stated in the recommendation;

(7) Ensuring the Company’s compliance with relevant laws and regulations regarding good corporate governance;

(8) Ensuring appropriate disclosure of information on its activities and the Company’s corporate governance practices; and

(9) Carrying out an evaluation once a year of its work, functions, performance.

Management

The Board of Directors has specified the scope of authorities, duties and responsibilities of the Board of Directors separately from the Management. In summary, the Board of Directors is responsible for formulating policies and monitoring the performance of the Management. The Management is responsible for implementing such policies and reporting the results of its performance to the Board of Directors.

The Board of Directors has established the policy on delegation of authority in writing, which covers the delegation of authority between the Board of Directors and the Management and clearly sets out the scope of authority and approval limits for the Board of Directors and the Management.

The Chief Executive Officer holds the highest management position in the Management and has the authorities, duties, and responsibilities as follows:

(1) Responsible for the day-to-day management of the Company’s operations. The Chief Executive Officer shall adhere to the guidelines and instructions laid down by the Board, including the Company’s governing documents;

(2) Deciding on all matters where the authority does not come under the authority of the Board pursuant to applicable laws, the Company’s Rules of Procedure for the Chief Executive Officer or other instructions adopted or decisions made by the Board. The Chief Executive Officer shall act to reasonably ensure that the Company conducts and develops business in accordance with applicable legislation, the Articles of Association, decisions made by the shareholders’ meeting and/or the Board;

(3) Responsible for organizing the Company and corresponding workforce in a manner consistent with the Board’s directions;

(4) Ensuring that the Company adheres to generally accepted principles for governance and effective control of the Company’s activities;

(5) Approving and supervising budgets and business plans and any deviations therefrom;

(6) Ensuring that risk management activities are in place within the organization to pro-actively identify and dealing with the business risks related to the Company;

(7) Proposing strategic plans for the Company, including its key subsidiaries, to the Board for approval and suggest resolutions in other matters of strategic importance for the Company;

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(8) Ensuring that transactions with potential conflicts of interest of management, Board members and shareholders, including their related persons, are undertaken on an arm’s length basis and on normal commercial terms, and are not prejudicial to the interests of the Company and its minority shareholders;

(9) Ensuring that the Company has adequate and appropriate internal controls in place, and that they are included as an integral part of operations and procedures of the Company in order to provide reasonable assurance regarding the achievement of the following objectives: effective and efficient use of resources, safeguarding the Company’s assets, reliability of internal and external financial reporting, and compliance with the Company’s governing documents and applicable laws and regulations;

(10) Establishing an internal audit unit to review the Company’s business processes through an approved internal audit plan, report any significant control failures or weaknesses and make recommendations thereon. The internal audit unit reports directly to the Audit Committee;

(11) Responsible for providing appropriate level of dialogue and cooperation with employees or their representatives, to ensure a responsible business practice taking into account experience and insight of employees;

(12) Being authorized to request shareholders’ meetings and to represent the Company (or appoint a delegate) in the subsidiaries’ shareholders’ meetings, including voting in accordance with any instructions from the Board. Remaining updated of business development, positions and profit performance of the key subsidiaries;

(13) Overseeing that both safety and security risks are managed proportionally and effectively to ensure protection of personnel, information and other assets;

(14) Securing an adequate handling, including sanctions, of employees’ non-compliance with the Company’s governing documents (if any). The Chief Executive Officer shall also secure that any significant non-compliance issue is reported to the Board; and

(15) Implementing adequate procedures to prevent the Company from being involved in corruption. The Chief Executive Officer shall conduct a yearly risk-based review of these procedures and ensure that any weaknesses, if discovered, are remediated. The Chief Executive Officer shall present the review to the Board.

Company Secretary

The duties and responsibilities of the Company Secretary are set out in accordance with the Public Limited Company Act, the Securities and Exchange Act, and the Principles of Good Corporate Governance for Listed Companies 2017 of the SEC. The duties and responsibilities of the Company Secretary are as follows:

(1) Providing legal and regulatory advice pertaining to the duties and responsibilities of the Board of Directors and the business operation of the Company;

(2) Preparing documentations and supporting information for the Board of Directors’ and shareholders’ meetings;

(3) Coordinating and following-up on the implementation of the Board of Directors’ and shareholders’ resolutions;

(4) Preparing and safe-keeping the director register, notices and minutes of the Board of Directors’ meetings, annual reports, notices and minutes of the shareholders’ meetings;

(5) Safe-keeping the reports of interests of directors and management;

(6) Preparing information and arranging information sessions on the business of the Company, including other information relevant to the business operation of the Company for new directors; and

(7) Responsible for the Board of Directors’ and shareholders’ activities.

Independent Directors

The Company has set out the criteria and qualifications of an independent director, which are stricter than the requirements of the SEC and the SET, as follows:

(1) Holding shares not exceeding 0.5 percent of the total voting shares of the Company, its parent company, subsidiary, affiliate or juristic person which may have conflicts of interest, including shares held by related persons of the independent director;

(2) Not being or having been an executive director, employee, staff, advisor who receives regular salary, or controlling person of the Company, its parent company, subsidiary, affiliate or juristic person which may have conflicts of interest, unless such characteristic ceases at least two years prior to the date of appointment;

(3) Not being a person related by blood or legal registration, such as father, mother, spouse, sibling and children, including spouse of the children, executives, major shareholders, controlling persons, or persons to be nominated as executive or controlling person of the Company or its subsidiary;


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(4) Having no business relationship with the Company, its parent company, subsidiary, affiliate or juristic person which may have conflicts of interest, in a manner which may interfere with his independent judgement, and not being or having been a major shareholder, non-independent director, executive of any person having business relationship with the Company, its parent company, subsidiary, or juristic person which may have conflicts of interest, unless such characteristic ceases at least two years prior to the date of appointment;

(5) Not being or having been an auditor of the Company, its parent company, subsidiary, affiliate or juristic person which may have conflicts of interest, and not being a major shareholder, non-independent director, executive, or managing partner of the audit firm in which the auditor of the Company, its parent company, subsidiary, affiliate or juristic person which may have conflicts of interest is employed, unless such characteristic ceases at least two years prior to the date of appointment;

(6) Not being or having been any professional advisor, including legal advisor or financial advisor which receives service fee of more than THB two million per year from the Company, its parent company, subsidiary, affiliate or juristic person which may have conflicts of interest, and not being a major shareholder, non-independent director, executive, or managing partner of the professional advisor which is a juristic person, unless such characteristic ceases at least two years prior to the date of appointment;

(7) Not being a director appointed as representative of a director of the Company, its major shareholder, or shareholder which is a related person of the major shareholder of the Company; and

(8) Not having any characteristics which render him incapable of expressing independent opinion regarding the Company’s business operation.

The nomination and appointment of an independent director is as set out under the section “Corporate Governance – Nomination and Appointment Directors” below.

At present, the Company has 4 Independent Directors which accounted for 40% of the Board of Directors, namely (i) Mr. Chulchit Bunyaketu, (ii) Mr. Stephen Woodruff Fordham, (iii) Mrs. Kamonwan Wipulakorn, and (iv) Mrs. Chananyarak Phetcharat, who are independent from any major shareholders and the Management of the Company and are fully qualified pursuant to the criteria specified above. The Independent Directors did not have any business relationship nor provide any professional services to the Company in the past financial year.

Nomination and Appointment of Directors and Senior Management

Nomination and Appointment of Directors

The Company places importance on the nomination and selection of directors by specifying the qualifications of directors and independent directors in accordance with the laws and relevant regulatory requirements, including the Articles of Association of the Company.

The selection and nomination of directors of the Company is considered by taking into account the educational background, work experience, knowledge and expertise, particularly in the telecommunications industry, and past performance as a director as well as the appropriate mix of skills and other diversities e.g. gender. This is in order to enable the Board of Directors to perform its duties effectively.

The Board recognizes the benefits of diversity and considers it as an important element in effective decision-making and management. The Corporate Governance Committee and Nomination Committee draw up guidelines regarding the diversity of other qualifications of nominated candidate as the position of director. Moreover, dtac used the Board Skill Matrix as supporting information in selecting of candidates with a focus on recruitment of versatility of expertise with appropriate mix of skills suitable for telecommunication industry. In 2017, dtac reviewed the Board Skill Matrix by classifying it to 10 subject matters including collaborative leadership and strategic planning, customers and marketing, account and finance, IT and technology, industry knowledge, legal, crisis and risk management and organization and human resources management.

The Nomination Committee is responsible for the selection and nomination of directors of the Company. In this regard, the Company has engaged professional recruitment firms to assist in the selection of independent directors. The Nomination Committee will select qualified person for the position of director, conclude the selection results and nominating them as candidates for further consideration by the Board of Directors or the shareholders (as the case may be).

Directors of the Company must have the qualifications to act as directors and do not possess any of the prohibited characteristics prescribed by laws and must not simultaneously hold more than 5 board seats in publicly listed companies and executive directors must not hold more than 2 directorship positions in other companies or publicly listed companies, excluding subsidiaries, affiliates and joint-venture companies of the Company in order to ensure their efficiency in performing their duties and responsibilities towards the Company.

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Directors are elected to hold office for a period of 3 years and may be re-elected for another term of office. The appointment, removal and retirement of a director from the Board of Directors of the Company must be in compliance with the Articles of Association of the Company as follows:

(1) The Board of Directors must comprise at least 5 members and at least half of whom must have residence in Thailand;

(2) The shareholders must appoint members of the Board of Directors in the following manners:

a) each shareholder shall have the votes equals to the number of shares held by him/her;

b) all votes can be casted for a particular candidate or group of candidates but cannot be split between different candidates; and

c) candidates receiving the highest number of votes in descending order will be appointed as directors of the Company. In the event of a tie, the Chair of the meeting will have the casting vote;

(3) A director wishing to resign from his position must submit a letter of resignation to the Company. Resignation takes effect upon receipt of the letter of resignation by the Company;

(4) The shareholders’ meeting may resolve to remove any director before the expiration of his/her term by not less than three-fourths of the number of shareholders attending the meeting and having the right to vote and holding not less than one-half of the total number of shares of all the shareholders attending the meeting and having the right to vote; and

(5) At every annual general meeting of shareholders, one-third of the directors who have served for the longest term must retire from their office, but such directors are eligible for re-election.

Nomination and Appointment of Senior Management

The Board of Directors of the Company has established a policy and criteria for the nomination and appointment of senior management and a policy for succession plan. There is a clear and transparent nomination process in which educational background, work experience, knowledge, capability, ethics and leadership are taken into consideration. The Board of Directors of the Company has appointed the Nomination Committee to consider and recommend qualified candidates for the appointment as Chief Executive Officer and Chief Financial Officer of the Company.

Monitoring of the Operation of the Company’s Subsidiaries and Affiliates

The Company has developed monitoring mechanisms for its subsidiaries and affiliates so as to monitor their administration, management and operation and protect the interests of the Company. The Company has appointed representatives of the Company as directors and senior management of such subsidiaries and affiliates. The Board of Directors of the Company has appointed the Nomination Committee to consider and recommend qualified candidates for the appointment as Director, Chief Executive Officer and Chief Financial Officer of its subsidiaries. In addition, the Company has taken actions to ensure that the authorities, duties and responsibilities of the directors and management of its subsidiaries, rules and procedures relating to connected transactions and other key transactions are in line with those of the Company in order to have the same standard of governance. The Company arranges for the financial and operational performance of its key subsidiaries to be reported to its Board of Directors quarterly.

Use of Inside Information

The Company is aware of an importance of handling of information of the Company in order to prevent unlawful use of inside information for personal benefits or the benefits of other persons. It is the responsibility of the directors, executives and employees of the Company to prevent access by unauthorized persons to, and disclosure of, non-public information that may affect the market price of the Company’s shares and other financial instruments issued by the Company before the Company discloses such information via the stock exchange’s disclosure system, or before the information ceases to be price-sensitive. The directors, executives and employees shall not trade in the shares or financial instruments before such information has been made public or ceases to be price-sensitive. Violation of the code of conduct for the handling of information will be subject to investigation, punishment and/or dismissal of employment in accordance with the rules and procedures under applicable laws and regulations.


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In addition, the Company has developed a manual for directors, executives and employees on dealing in the Company’s securities. The directors, executives and relevant employees of the Company are prohibited from dealing in the Company’s securities for the period of one month prior to the announcement of the Company’s operating results for each quarter until the day following the date in which the Company’s operating results are made public, and from trading on short-term considerations. The Company Secretary will notify the directors, executives and relevant employees of such period prior to the announcement of the Company’s operating results. The directors and executives are required to notify the Company of any acquisition or change of their shareholdings in the Company (including the shareholdings of their spouses or minor children) at least 1 day before dealing in the company’s securities and inform within 24 hours from the date of such acquisition or change. The Company Secretary will compile and report such information to the Board of Directors of the Company.

The directors and executives of the Company are also required to submit a report on their and their related persons’ interests, in relation to the administration and management of the Company and its subsidiaries within 15 days from the end of each calendar year, and within 15 days from the date of any changes in their interests. The purpose of the report is for monitoring of and compliance with the requirements on connected transactions which may be transactions that give rise to conflicts of interest.

The Company’s code of conduct in relation to the usage of Inside Information can be found on the Company’s website at www.dtac.co.th and on the Company’s intranet.

Given the rising concerns of Thailand Data Protection Act, the company has placed an emphasis on its practices in all processing of personal information. And to ensure the best data protection possible for its customers, the company has referred to best practice in Data Protection from the European (GDPR). This includes Privacy by Design and technical measures to protect the personal data and programs to educate and give awareness among its employees regarding proper data protection and cyber security practices. And the Company ensures compliance of its employees with strict dtac Code of Conduct and Privacy Policy.

Remuneration for Auditors

The shareholders of the Company, at the 2019 Annual General Meeting of Shareholders, which was held on 4 April 2019, approved the remuneration of the auditors for 2019 in the amount not exceeding THB 4,170,000 (exclusive of VAT). The remuneration consists of the fees for the audit of the annual financial statements and the review of the quarterly financial statements.The approved remuneration is lower than that of 2018. In 2018, the Company’s total non-audit fees, which was not related to the auditing services and booked as the Company’s expenses, was THB 2,856,505.

Compliance with Other Good Corporate Governance Practices

The Company reviewed its corporate governance practice against the principles of the Corporate Governance Code for Listed Companies 2017 (the “CG Code”) and proposed it to the Corporate Governance Committee on 14 September 2018 and later to the Board of Director on 16 October 2018. In summary, the Board had agreed with the Corporate Governance Committee that the Company’s practices are aligned with the principles of the CG Code, while all the directors had a good understanding of them.

In addition, the Company has other good corporate practices as follows;

1 The Company has set out relevant policy and procedure for selection of knowledgeable and competent person to serve as the Company’s directors. Shareholders have the right to propose candidates for directorship at the Annual General Meeting of Shareholders in accordance with the relevant rules and regulations of the Company. The candidates for Chairmanship and directorship shall possess necessary knowledge and experience in telecommunications business or related businesses which are beneficial to the Company’s business. The Company also has a procedure for selection of the independent directors which ensures that the independent directors would function to the best interest of the Company and shareholders.

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To this end, given the complicated and lengthy historical backgrounds of the telecommunications business sector, there is a need that directors have good understandings on relevant specific matters, including commercial (e.g. business transactions) and complicated technical matters (e.g. spectrum bands, telecommunications network, fiber optic, transmission equipment, mobile device, online business, internet, technological advancement, rules and regulations of the Office of The National Broadcasting and Telecommunications, etc.). Lengthy and complexity backgrounds make telecommunication sector very difficult to understand. However, understanding of these matters is quite essential for business analysis and planning. Thus, years of services is a key factor for a director to have in-depth knowledge and to provide valuable recommendations and directions to the Company. The Company’s board of directors has well functioned in this respect.

The Company has planned ahead at least 6 Board of Directors’ meetings in a year in order to consider regular agenda items. If there is any other important matter, the Chair of the Board is empowered to call meetings to consider such matter by giving advanced notice to all directors as required by the relevant laws. The number of Board of Directors’ meetings in 2019 was 10.

2 The Company has set out remuneration policy for both executives and employees based on knowledge, duty and responsibility. The Company also has the procedure for performance assessment in accordance with the widely accepted standard. The remuneration policy of the Management has been disclosed. Moreover, the Company has urged all executives and employees to adhere to relevant widely accepted principles, for example, employee shall not disclose his/her remuneration to other persons. The Company would also treat employees’ remuneration as a confidential matter and would respect the employees’ right to privacy.

3 The Corporate Governance Committee had re-confirmed and the Board of Directors No. 10/2019 had approved the Inside Information Manual for the Directors, Executives and employees on dealing in securities of the Company. The underlying principal of the Manual is that the Directors and Executives are free to deal in the Company’s securities or change of interests in the Company’s securities but they are required to inform the Board or Company Secretary at least one day before dealing in the Company’s securities and also inform of the result within 24 hours from the time of such dealing or change of interest.

4 The Company has not implemented a cumulative voting system as the Company’s Articles of Association prescribes that a director is elected through the use of a majority vote. However, the Company has provided other mechanisms to protect the rights of minority shareholders by setting out relevant policy and procedure for selection of knowledgeable and competent person to serve as the Company’s directors. Shareholders have the right to propose agenda and candidates for directorship at the Annual General Meeting of Shareholders in accordance with the relevant rules and regulations of the Company. The candidates for Chairmanship and directorship shall possess necessary knowledge and experience in telecommunications business or related businesses which are beneficial to the Company’s business. The procedure for selection of the independent directors also ensures that the independent directors would function to the best interest of the Company and its shareholders.

5 The Company has set out new Governing Principles to improve and to strengthen Company’s governance. For example, the introducing of ‘Yearly Meeting Plan’ for the Board of Directors, having a meeting (at least once a year) between the Board of Directors and the Company’s external auditor without presence of the management. Also, the Board’s duty is to review several reports such as Risk Management, Supply Chain Sustainability (at least twice a year) including reviewing internal audit report at all Board of Directors Meeting.


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AUDIT COMMITTEE REPORT

104104

To Shareholders of Total Access Communication Public Company LimitedThe Audit Committee of Total Access Communication Public Company Limited comprises 3 independent directors, who are knowledgeable as well as experienced in finance, accounting, law, and business management. All members possess adequate qualifications as determined in the Audit Committee Charter and the regulations of the Securities and Exchange Commission, Thailand (SEC) and the Stock Exchange of Thailand (SET).

All members of the Audit Committee are not executive directors, employees or advisors of the Company.

The Audit Committee Charter, approved by the Board of Directors, requires that an audit committee meeting be held at least once every quarter. In 2019, the Company held 10 Audit Committee meetings. These meetings were attended by the relevant executive management, Head of Internal Audit and external auditor pertaining to the agenda. Proceedings of all meetings were reported to the Board of Directors.

Activities undertaken by the Audit Committee according to its duties and responsibilities can be summarized as follows:

• Reviewed the quarterly and annual financial statements of the Company for the year 2019 for submission to the Board of Directors for approval. These financial statements were prepared in accordance with generally accepted accounting principles and all information has been sufficiently disclosed;

• Reviewed the adequacy and assessment of the internal control system, risk management and compliance with laws governing the Company’s business, as well as conducting meetings with the management and internal audit unit to make recommendations for the benefits of the Company’s business operations;

• Approved the annual audit plan, which was developed based on the Risk Based Approach, and considered the audit reports of the internal audit unit;

• Reviewed connected transactions, interested person transactions, or transactions which may have conflicts of interests, to ensure that the transactions are in the ordinary course of the Company’s business operations and in compliance with the laws governing securities and exchange;

• Performed a self-assessment in accordance with the Audit Committee Charter and the best corporate governance practices. The result was satisfactory; and

• Considered the nomination and appointment of external auditors and annual audit fee for 2020 for consideration by the Board of Directors.

Based on the activities mentioned above, the Audit Committee is of the opinion that the financial statements of the Company were prepared in accordance with the generally accepted accounting principles, with all information sufficiently disclosed. The Company has maintained an effective and adequate internal control system and internal audit system; no material weakness was found. All businesses have been undertaken in compliance with the laws and regulations concerning the business operation of the Company and the connected transactions were reasonable and for the best interest of the Company.

The Audit Committee has considered the nomination and appointment of external auditors pursuant to the Company’s assessment criteria, the external auditors’ experience, performance and independence in performing their works during the past year. The Audit Committee found the work of the auditors of EY Office Limited to be satisfactory. In addition, EY Office Limited has worldwide recognition.

The Audit Committee therefore recommends the reappointment of the auditors of EY Office Limited as auditors of the Company for the year 2020 and proposes the annual audit fee to the Board of Directors for further approval by the shareholders of the Company

Ms. Kamonwan Wipulakorn

Chair of the Audit Committee

Audit Committee Report

Annual Report 2019Audit Committee Report. Annual Report 2019

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NOMINATION COMMITTEE REPORT

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Dear Shareholders of Total Access Communication Public Company Limited,

Nomination Committee Report

Mr. Stephen Woodruff Fordham

Chair of the Nomination Committee

The Nomination Committee currently consists of five members appointed by the Board of Directors, three of whom are independent directors. The Nomination Committee is tasked with the responsibilities of considering and nominating persons with proper qualifications and experiences to serve as directors of the Company and its subsidiaries as well as evaluating their performance.

In 2019, the Nomination Committee held seven meetings. The significant duties performed by the Committee included (i) a review of the structure and composition of the Board of Directors, (ii) recommendations to the Board of Directors on the results of the annual self-assessment of both individual and Board performance, (iii) recommendations on the election or re-election of directors of the Company and subsidiaries, (iv) acknowledgement of the new SET criteria for Chief Financial Officer and Chief Accountant, and (v) recommendations on succession plan for senior management positions.

The Nomination Committee undertook a review of its own performance in the previous year and found it continued to be effective.

Annual Report 2019Audit Committee Report & Nomination Committee Report. Annual Report 2019

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CORPORATE GOVERNANCE COMMITTEE REPORT

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Mrs. Chananyarak Phetcharat

Chair of the Corporate Governance Committee

Corporate Governance Committee Report

The Company is committed to the principles of good corporate governance pursuant to the Principles of Good Corporate Governance for Listed Companies of the Stock Exchange of Thailand (SET), The Securities and Exchange Commission (SEC), and the Thai Institute of Directors Association (IOD) with a view to sustain and maximize the long-term value to shareholders.

The Board of Directors has always valued business conduct with integrity, transparency, accountability and with the highest ethical standard. To this end, the Corporate Governance Committee has reviewed and monitored, as well as given advice on the corporate governance practices of the Company in 2019 to ensure conformance to CG principles, SET’s CG principles, SEC’s CG Code, and the international principle of The Organisation for Economic Cooperation and Development (OECD), together with the ASEAN CG Scorecard.

The Committee held three meetings this year in order to raise the level of monitoring and compliance of all corporate governance policies and codes of conduct by directors, employees, and other relevant stakeholders. On 28 October 2019, the Company received the “Excellent CG Scoring” award of Five Stars for the fifth consecutive years by the Thai Institute of Directors Association. The CGR findings covered 677 listed companies in Thailand. This award genuinely reflects the Company’s consistent effort to strive for better corporate governance and sustainable development.

The Corporate Governance Committee remains committed to improving the Company’s good corporate governance practices based on the values of integrity, transparency and social responsibility for the best interests of all stakeholders as well as for better acceptance and recognition at the international level.

Annual Report 2019Corporate Governance Committee Report. Annual Report 2019

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REMUNERATION COMMITTEE REPORT


Mr. Chulchit Bunyaketu

Chair of the Remuneration Committee

Remuneration Committee Report

The Company’s Remuneration Committee currently consists of five members appointed by the Board of Directors, three of whom are independent directors. The Remuneration Committee has responsibilities of reviewing and recommending the remuneration of directors, as well as reviewing and approving the annual compensation review for the Chief Executive Officer of dtac.

In 2019, the Remuneration Committee held 6 meetings to consider various issues, including (i) Chief Executive Officer Bonus for 2018, (ii) review of an approach to the 2020 director remuneration structure, (iii) the remuneration of directors for 2019, and (iv) key performance indicator of Chief Executive Officer for 2019.

The Remuneration Committee undertook a review of its performance in the previous year and found that the Committee was working effectively in assisting and advising the Board on matters relating to the remuneration of the Board and senior managements.

Remuneration Committee Report. Annual Report 2019

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INTERESTED & CONNECTED PERSON TRANSACTION

Interested & Connected Person TransactionAny connected party transactions between the Company or its subsidiaries and persons who may have a conflict of interest must be in compliance with the relevant rules and regulations and must be made on reasonable terms or general commercial conditions or in line with the market price. In addition, the transactions shall be transacted at arm’s length and the connected party transactions shall be presented to the Audit Committee for review on a quarterly basis.

As shown in Clause 9 of the notes to consolidated Financial Statements for the year ended 31 December 2019, the Company and its subsidiaries had significant business transactions with related parties. Such transactions, which are summarized below, arose in the ordinary course of businesses and were concluded on commercial terms and agreed upon between the Company and those related parties.

All numbers shown below are based on the total amount of transactions done with respective entity in a respective year, regardless of whether such entity was considered connected entity of the Company or its subsidiaries for the whole year. The amount shown as zero in each respective year means there was no transaction with such entity during the year or such entity was not a connected entity for the whole year.

1. Transactions with BB Technology Co., Ltd.

Benchachinda Holding Co., Ltd. held 100% of shares in BB Technology Co., Ltd. While conducting the transactions, Mr. Boonchai Bencharongkul, Chair of the Board of Directors of the Company, was a director and a shareholder with 40% shareholding in Benchachinda Holding Co., Ltd.

Principal TransactionsTotal amount (THB million)

2017 2018 20191. Expenses and other payments

• Service fees for network maintenance and installation of telecommunications equipment 2,884.3 3,017.4 1,858.4

• Service fees of network operation and management 203.5* 417.8 442.0• Trade payable 1,249.2 1,150.0 1,237.6

Rationale for the transactions

• The Company has entered into the agreement with BB Technology Co., Ltd. since the fourth quarter of 2008 to hire BB Technology Co., Ltd. to operate and maintain the Company’s entire transmission network. The maintenance fee and contract renewal is similar to what the Company agreed with the previous parties.

* Service fees of network operation and management in 2017 as shown have not included the fee for July to December 2017 amounting to THB 203.4 million. Therefore, when combined with the fee for January to June 2017 amounting to THB 203.5 million, the total amount will be THB 406.9 million

2. Transactions with I.N.N. Group

While conducting the transactions, Mr. Boonchai Bencharongkul, Chair of the Board of Directors of the Company, was a director and a shareholder of I.N.N. Group.



• Marketing expense 3.2 0.3 -• Information service fee 14.3 13.3 4.0• Trade payable 0.2 1.9 1.0• Other payable 0.2 - -

Interested & Connected Person Transactionc. Annual Report 2019

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• The Company purchased airtime from I.N.N. Ruam Duay Chuay Kan Co., Ltd. to advertise the Company’s product via radio. I.N.N. Ruam Duay Chuay Kan Co., Ltd. is a service provider of the Company providing agricultural information for the Company’s customers in several forms through mobile phones. The service rate is of normal commercial terms.

• The Company entered into a content provider access agreement with I.N.N. News Co., Ltd. to provide content service to the Company’s customers.

3. Transactions with International Cold Storage and Agricultural Co., Ltd.

While conducting the transactions, Mr. Boonchai Bencharongkul, Chair of the Board of Directors of the Company, was a director and a shareholder with 25% shareholding in International Cold Storage and Agricultural Co., Ltd.



• Rent for Land 0.9 1.0 1.0


• The Company rented office space to install transmission networks on a 3-year term at a rate comparable with the market rate.

4. Transactions with Private Property Co., Ltd.

While conducting the transactions, Mr. Boonchai Bencharongkul, Chair of the Board of Directors of the Company, was a director and a shareholder with 25% shareholding in Private Property Co., Ltd.



• Rent for space in Benchachinda Building 1.6 1.5 1.2


• The Company rented the space in Benchachinda Building to install transmission networks on a 3-year term at a rate comparable with the market rate.

5. Transactions with Telenor Group

Telenor is a major shareholder of the Company with 42.62% shareholding.


2017 2018 20191. Revenue

• Revenue from international roaming service 66.1 75.1 58.5

• Revenue from sales of mobile phone set 0.6 - -

• Revenue from interconnection 272.7 191.1 130.0

• Revenue from management service 45.4 26.9 1.1

• Revenue from sales on assets 10.8 - -

• Revenue from sales on assets 106.3 63.9 49.4

• Amount due from related party 35.5 6.1 1.2

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• Fees to Telenor under a service agreement 611.0 1,247.6 1,045.0

• Software and system maintenance fee 316.8 226.0 229.2

• Purchase of Assets 51.4 - -

• International roaming costs 21.2 19.0 13.3

• Interconnection costs 1,059.8 893.7 655.7

• Cost on international signaling 26.7 29.2 17.8

• Trade payable 260.2 221.5 192.5

• Other payable 680.7 144.3 208.6

• Borrowings 15.0 - -


• During the operational process, Telenor provides secondments with appropriate experience and capacity as requested by the Company to jointly manage the business operations for the best interest of shareholders by charging an applicable service fee. The Company’s Internal Audit Department submitted the opinion on this matter to the Audit Committee. The Audit Committee reviewed the Management’s justification regarding the necessity, considered its reasonableness, and approved the transaction.

• Revenue from mobile phone service arose from the mobile phone services charged to Telenor Asia (ROH) Co., Ltd., the office of which locates in Thailand.

• Revenue from international roaming service arose from the usage of Telenor subsidiaries’ customers who traveled to Thailand and used the roaming service on dtac’s network. The fee was charged in accordance with the agreement.

• Revenue from and cost of interconnection, including cost of international signaling and international internet transit service, arose from the interconnection between dtac TriNet Co., Ltd. and Telenor Global Services AS.

• The Company purchased computer software and made annual maintenance contract to improve operational efficiency of the Company.

6. Transactions with United Distribution Business Co., Ltd. (“UD”)

UD is a subsidiary of Benchachinda Holding Co., Ltd. with 75% shareholding and an associate of the Company with 25% shareholding. While conducting the transactions, Mr. Boonchai Bencharongkul, Chair of the Board of Directors of the Company, was a director and a shareholder with 40% shareholding in Benchachinda Holding Co., Ltd.


2017 2018 20191. Revenue

• Sales of SIM cards, SIM card packages, refill vouchers and starter kits

6,702.4 2,953.2 2,013.0

• Dividend income 5.0 - 5.0

• Trade receivable 472.7 474.4 360.0

2. Expenses and other payments

• Marketing expense 4.1 2.9 2.4

• Rental and service fee 307.1 157.2 133.5

• Trade payable 26.3 26.7 15.6

• Other payable 0.1 - -


115


• In June 2002, the Company and United Communication Industry PLC. transferred their sales and distribution business to UD. UD also has an exclusive right to distribute and sell the Company’s telecommunication products. The business relationship is beneficial as it allows the Company to concentrate on core business and to be able to control the cost of distribution.

• The Company purchased handsets from UD for resale at dtac shops and service centers.

7. Transactions with United Information Highway Co., Ltd. (“UIH”)

UIH is a subsidiary of Benchachinda Holding Co., Ltd. with 100% shareholding. While conducting the transactions, Mr. Boonchai Bencharongkul, Chair of the Board of Directors of the Company, was a director and a shareholder with 40% shareholding in Benchachinda Holding Co., Ltd.


2017 2018 20191. Revenue

• Revenue from base station sublease include electricity charge

47.7 36.3 22.3



• Rental expense for high speed leased circuit 17.8 7.0 5.8

• Cost of Wi-Fi equipment and service 11.2 4.4 -

• Trade payable 3.0 0.8 1

• Other payable 5.7 0.7 0.3


• UIH provides high-speed data communication service via a nationwide leased optical fiber network to public and private organizations. UIH has one of the most extensive and high quality fiber optic networks in Thailand and has been providing consistent and high quality data communication services to the Company and its subsidiaries for many years.

• It was beneficial to conduct business with UIH as the Company did not have such data communication networks. In addition, UIH has one of the most extensive and high quality fiber optic network coverage throughout Thailand.

• Sourcing team will obtain quotations from at least 3 service providers as part of the review of pricing arrangements. The Company will continue to rent the high speed leased circuits from UIH if the pricing arrangements continue to be more favorable to the Company than those extended by other service providers, taking into consideration various factors i.e. reputation, the size and quality of the leased circuit, the switching cost and strategic purposes of the transaction.

• DTAC Broadband Co., Ltd., the Company’s subsidiary currently under liquidation, entered into an agreement for high speed circuit at a rate comparable with the market rate and an agreement for equipment and service of Wi-Fi with normal commercial terms. Such agreement was later novated to the Company following the entire business transfer from DTAC Broadband Co., Ltd. to the Company.

8. Transactions with Bang-san Townhouse Co., Ltd.

While conducting the transactions, Mr. Boonchai Bencharongkul, Chair of the Board of Directors of the Company, was a director and a shareholder with 25% shareholding in Bang-san Townhouse Co., Ltd.



• Rent for Land 0.7 0.7 -

116


• The Company leased a plot of land to build switching center on a 3-year term at a rate comparable with the market rate.

• The Company leased land and building to store the Company’s assets and equipment on a 3-year term at a rate comparable with the market rate.

9. Transactions with King Power Suvarnabhumi Co., Ltd.

While conducting the transactions, Mr. Chulchit Bunyaketu, a director of the Company, was a director and a shareholder of King Power Suvarnabhumi Co., Ltd.



• Rental and service expenses 34.1 32.7 38.1

• Trade payable - 1.2 1.1


• The Company was granted the right from King Power Suvarnabhumi Co., Ltd. to provide sales of SIM card, monthly fee payment transactions, and other mobile phone services including refilling prepaid accounts. The right was charged in an appropriate amount (at one-time payment) and monthly revenue shares from services provided at the airports. This is for the convenience of customers at the airports.

• The Company leased the space for dtac shops and service centers at Suvarnabhumi Airport, Don Mueang Airport, and Phuket Airport at the rate comparable to the market rate. This is for the convenience of customers at the airports.

10. Transactions with Top Up 4U Co., Ltd.

Benchachinda Holding Co., Ltd. holds 100% of shares in Top Up 4U Co., Ltd. While conducting the transactions, Mr. Boonchai Bencharongkul, Chair of the Board of Directors of the Company, was a director and a shareholder with 40% shareholding in Benchachinda Holding Co., Ltd.


2017 2018 20191. Revenue

• Revenue from sales of top-up service 229.3 179.2 133.3



• Service expenses and commission expenses 11.4 9.2 6.5



• The Company hired Top Up 4U Co., Ltd. to be an E-refill distributor. The fee was charged in accordance with the agreement. This is in order to enhance channels for E-refill service for customers of the Company.


117

11. Transactions with BB Content & Multimedia Co., Ltd.

Benchachinda Holding Co., Ltd. holds 100% of shares in BB Content & Multimedia Co., Ltd. While conducting the transactions, Mr. Boonchai Bencharongkul, Chair of the Board of Directors of the Company, was a director and a shareholder with 40% shareholding in Benchachinda Holding Co., Ltd.



• Information service fee 2.7 0.6 -

• Trade payable 0.2 0.1 -


• The Company signed a content provider access agreement with BB Content & Multimedia Co., Ltd. to provide content service to dtac customers.

12. Transactions with Rakbankerd Co., Ltd.

Benchachinda Holding Co., Ltd. holds 100% of shares in Rakbankerd Co., Ltd. While conducting the transactions, Mr. Boonchai Bencharongkul, Chair of the Board of Directors of the Company, was a director and a shareholder with 40% shareholding in Benchachinda Holding Co., Ltd.



• Information service fee 19.5 18.0 27.0



• The Company entered into contract with Rakbankerd Co., Ltd. to provide agricultural information content service to farmers who are dtac customers via SMS and Farmer Info application. This is in order to support the Company’s business.

13. Transactions with Y & Associate Co., Ltd.

While conducting the transactions, Mr. Boonchai Bencharongkul, Chair of the Board of Directors of the Company, was a director and a shareholder with 25% shareholding in Y & Associate Co., Ltd.



• Service expense 53.2 1.4 -

• Trade payable 1.4 - -


• The Company leased warehouse space and logistics management service from Y & Associate Co., Ltd. to store the Company’s equipment. The transaction is considered as normal business or supporting normal business with general terms and conditions.

118

14. Transactions with BTS Group Holdings PLC. and affiliates

While conducting the transactions, Mr. Chulchit Bunyaketu, a director of the Company, was a director of BTS Group Holdings PLC.



• Marketing expense 8.7 9.2 11.6

• Rental and service expenses - 0.2 0.3

• Other payable 1.3 - 0.8


• The Company entered into contract with BTS Group Holdings PLC. to lease part of the building area to set up telecommunication equipment. The transaction is considered as normal business or supporting normal business with general terms and conditions comparable to what the Company could agree with any third party.

• The Company offered marketing campaign (dtac reward) to companies within BTS Group Holdings PLC. The transaction is considered as normal business or supporting normal business with general terms and conditions comparable to what the Company could agree with any third party.

15. Transactions with entities within The Erawan Group PLC.

While conducting the transactions, Mrs. Kamonwan Wipulakorn, a director of the Company, was a director and president of The Erawan Group PLC.



• Rental and service expenses 1.0 - -


• The Company entered into contract with The Erawan Group PLC. to lease part of the building area to set up telecommunication equipment. The transaction is considered as normal business or supporting normal business with general terms and conditions comparable to what the Company could agree with any third party.

16. Transactions with entities within King Power International Co., Ltd.

King Power International Co., Ltd. holds 30% of shares in King Power Suvarnabhumi Co., Ltd. While conducting the transactions, Mr. Chulchit Bunyaketu, a director of the Company, was a director and a shareholder of King Power Suvarnabhumi Co., Ltd.





• The Company entered into contract with King Power International Co., Ltd. to lease part of the building area to set up telecommunication equipment. The transaction is considered as normal business or supporting normal business with general terms and conditions comparable to what the Company could agree with any third party.


119

17. Transactions with entities within Benchachinda Holding Co., Ltd.

While conducting the transactions, Mr. Boonchai Bencharongkul, Chair of the Board of Directors of the Company, was a director and a shareholder with 40% shareholding in Benchachinda Holding Co., Ltd.





• The Company entered into contract with Benchachinda Holding Co., Ltd. to lease part of the building area to set up telecommunication equipment. The transaction is considered as normal business or supporting normal business with general terms and conditions comparable to what the Company could agree with any third party.

18. Transactions with entities within DHL Express international (Thailand) Ltd.

While conducting the transactions, Mrs. Chananyarak Phetcharat, a director of the Company, was the Managing Director of DHL Express international (Thailand) Ltd.



• Service expenses 0.1 - -


• The Company used the delivery services of DHL Express international (Thailand) Ltd. The transaction is considered as normal business or supporting normal business with general terms and conditions comparable to what the Company could agree with any third party.

19. Transactions with BB Connect Co., Ltd.

United Information Highway Co., Ltd. (“UIH”) holds 99% of shares in BB Connect Co., Ltd. UIH is a subsidiary of Benchachinda Holding Co., Ltd. While conducting the transactions, Mr. Boonchai Bencharongkul, Chair of the Board of Directors of the Company, was a director and a shareholder with 40% shareholding in Benchachinda Holding Co., Ltd.


2017 2018 20191. Revenue

• Service revenue 6.1 8.3 0.8

• Trade receivable 1.2 1.2 -


• Service expenses 168.8 74.2 54.5



• dtac TriNet Co., Ltd., which is a subsidiary of the Company, entered into contract with BB Connect Co., Ltd. to lease the International Internet Gateway services to BB Connect Co., Ltd. at a rate comparable with the market rate.

• BB Connect Co., Ltd. provides International Private Leased Circuit service (IPLC). dtac TriNet Co., Ltd., which is a subsidiary of the Company, entered into contract with BB Connect Co., Ltd. to lease the International Private Leased Circuit service (IPLC) to Singapore and Malaysia from BB Connect Co., Ltd. at a rate comparable with the market rate. The service fee is calculated based on actual usage. The transaction is considered as normal business or supporting normal business with general terms and conditions comparable to what the Company could agree with any third party.120

20. Transactions with YA Sales and Services Co., Ltd.

Benchachinda Holding Co., Ltd. holds 99% of shares in YA Sales and Services Co., Ltd. While conducting the transactions, Mr. Boonchai Bencharongkul, Chair of the Board of Directors of the Company, was a director and a shareholder with 40% shareholding in Benchachinda Holding Co., Ltd.


2017 2018 20191. Revenue

• Revenue from sales of mobile phone set - 0.2 0.2


• Storage and Delivery Service expenses 48.3 125.0 111.0


• Other payable - 11.0 13.7


• The Company used the storage management and delivery services of YA Sales and Services Co., Ltd. The transaction is considered as normal business or supporting normal business with general term and condition comparable to what the Company could agree with any third party.

21. Transactions with Internet Thailand PLC.

While conducting the transactions, Ms. Tanwadee Wongterarit, a director of the Company (at that time), was a director of Internet Thailand PLC.


2017 2018 20191. Revenue

• Service revenue - 0.6 -

• Trade receivable - 0.3 -


• Service expenses - 0.1 -


• The Company provided International Internet Gateway Services to Internet Thailand PLC. on a one-year term at a rate comparable with the market rate. The transaction is considered as normal business or supporting normal business with general terms and conditions comparable to what the Company could agree with any third party.

• The Company purchased Manage Link Service from Internet Thailand PLC. for the Company’s customers at a rate comparable with the market rate. The transaction is considered as normal business or supporting normal business with general terms and conditions comparable to what the Company could agree with any third party.

22. Transactions with Thai Art Museum Co., Ltd.

While conducting the transactions, Mr. Boonchai Bencharongkul, Chair of the Board of Directors of the Company, was the Chairman of the Board of Directors and the Chief Executive Officer of Thai Art Museum Co., Ltd.



• Marketing expenses - 0.1 -


121


• The Company purchased King Rama IX banknote books which were manufactured by Thai Art Museum Co., Ltd. To provide as souvenirs to the press and stakeholders on New Year festival at a rate comparable with the market rate. The transaction is considered as supporting normal business with general terms and conditions comparable to what the Company could agree with any third party.

Other than the connected party transactions set out above, there was no material contract involving the interests of any of the Chief Executive Officer, Directors and controlling shareholders, still subsisting at the end of the financial year ending 31 December 2019.

Measure and Procedures for Approving Connected Party Transactions

The Company has set policy and procedures for entering into connected party transactions with transparency and for the best interest of the Company. The Company has internal guideline regarding connected party transactions between the Company or its subsidiaries and connected persons which is in accordance with relevant SEC and SET rules and regulations on connected party transactions.

In addition, the Board of Directors of the Company has approved- in-principle the entry into connected party transactions which are ordinary course of business or related supporting business. The key summary is as follows:

(1) the sales and purchases of products, including, inter alia, the sales and purchases of telecommunication products (including phone kits, refill vouchers, SIM cards, SIM card packages and starter kits); and the sales of e-refill products;

(2) the obtaining of services, including, inter alia,:

• the obtaining of maintenance services (including installation services) of base stations and cell site equipment;

• the obtaining of services for Content Provider Access;

• the obtaining of international roaming services;

• the obtaining of business service cost and management services;

• the obtaining of point(s) of interconnection and cost sharing for International Telecommunication Services; and

• the obtaining of Outsource Bill-Collection Service.

(3) the rental of properties and circuits, including, inter alia,:

• the rental of high speed leased circuit; and

• the rental of land, office space or warehouses.

(4) the payment of commission to Connected Persons for distribution services or other services rendered (e.g. the distribution of e-refill products of the Company);

(5) the provision and maintenance of telecommunications services including, inter alia, point(s) of interconnection and cost sharing for International Telecommunication Services;

(6) the procurement of products, services and/or contracts which are necessary and/or expedient to support the business operations of the Company (including, inter alia, insurance protection); and

(7) the provision or the obtaining of such other products and/or services which are incidental to or in connection with the provision or obtaining of products and/or services in paragraphs (1) to (6) above.

The Company has also implemented the following procedures for approving connected party transaction which may occur during the year in accordance with scopes of transactions that have been approved by the Board of Directors:

(1) where the value of a transaction is equal to or exceeds THB 500,000, but is less than THB 10 million the connected party transaction will be reviewed and approved by the senior management of the Company;

(2) where the value of a Transaction is equal to or exceeds THB 10 million, but is less than THB 100 million the transaction will be reviewed and approved by the senior management of the Company. In addition, Internal Audit Department will verify that whether the pricing and other commercial terms of the transaction are on normal commercial terms and are not prejudicial to the interests of the Company and its minority shareholders. Internal Audit Department will issue a report (the “Review Report”) and will submit the report to the Audit Committee on a quarterly basis;

(3) where the value of a transaction (either one transaction or several transactions entered into within 6 months with the same connected person) is equal to or exceeds THB 100 million, the transaction(s) will be reviewed and approved by the Audit Committee before the entry into of such contract or transaction. The Audit Committee will evaluate the terms of the transaction(s) in accordance with the prevailing industry norms.

122

Shareholder Structure & Dividend Policy. Annual Report 2019

123

SHAREHOLDER STRUCTURE & DIVIDEND POLICY

Telenor Asia Pte. Ltd.

42.62%

TOT

5.58%

CAT

0.10%

Other

18.73%

Thai Telco Holdings Co., Ltd.

22.43%

Total Access Communication Public Company LimitedInformation on Share Capital and ShareholdingAs of 30 July 2019

Share CapitalAuthorized Share Capital : THB 4,744,161,260Issued Share Capital : THB 4,735,622,000Class of Share : Ordinary Shares 2,367,811,000 of THB 2 eachVoting Rights : One vote per share

Shareholder Structure

Thai NVDR

10.54%


124

Top 10 Largest Shareholders (from the shareholder registered book as of 30 July 2019)

Ranking Name Amount of Share Percentage

1 TELENOR ASIA PTE LTD 1,009,172,497 42.62

2 Thai Telco Holdings Limited 531,001,300 22.43

3 Thai NVDR Company Limited 249,609,343 10.54

4 TOT Public Company Limited 132,145,250 5.58

5 Social Security Office 53,459,600 2.26

6 STATE STREET EUROPE LIMITED 22,898,098 0.97

7 Krungsri Dividend Stock LTF 19,368,700 0.81

8 SOUTH EAST ASIA UK (TYPE C) NOMINEES LIMITED 11,777,344 0.50

9 Krungsri Dividend Stock Fund 10,387,700 0.44

10 Mr. Weerawat Chutichetpong 9,633,600 0.41

Remark (1) Telenor Asia Pte. Ltd. is a holding company and a subsidiary of Telenor ASA.

(2) Thai Telco Holdings Co., Ltd. is a holding company. Shareholder’s list and shareholding structure of Thai Telco Holdings Co., Ltd as of 18 April 2018 are as follows: BCTN Holding Co., Ltd. 51.00% Telenor South East Asia Investment Pte. Ltd. 49.00% Telenor 0.00%

(3) BCTN Holding Co., Ltd. is a holding company. Shareholder’s list and shareholding structure of BCTN Holding Co., Ltd. as of 28 May 2019 are as follows: BCTN Innovation Co., Ltd. 51.00% Telenor South East Asia Investment Pte. Ltd. 49.00% Telenor 0.00%

(4) BCTN Innovation Co., Ltd. is a holding company. Shareholder’s list and shareholding structure of BCTN Innovation Co., Ltd. as of 22 April 2019 are as follows: BCH Holding Co., Ltd. 51.00% Telenor South East Asia Investment Pte. Ltd. 49.00% Telenor 0.00%

(5) BCH Holding Co., Ltd. is a holding company. Shareholder’s list and shareholding structure of BCH Holding Co., Ltd. as of 30 April 2019 are as follows: Mr. Vichai Bencharongkul 64.88% Mr. Boonchai Bencharongkul 20.12% Mr. Somchai Bencharongkul 15.00%

Dividend Policy To pay out dividend not less than 50% of the Company’s net profit, depending on financial position and future business plans. The Company aims to pay dividend semi-annually

Shareholder Structure & Dividend Policy. Annual Report 2019

125

MANAGEMENT DISCUSSION & ANALYSIS

126

(Please note that all financial figures and analyses are based on the previous accounting policy (IAS 17 & 18) for both 2018 and 2019, unless otherwise stated.)

Executive SummaryIn FY19, dtac focused on continuation of network improvement and customer experience enhancement, with the rollout and optimization of 2300 MHz network in order to provide a consistent customer experience. Network NPS improved and network complaints reduced significantly in this year.

At the end of FY19, a total of approximately 17,400 nodes of 4G- 2300 MHz network were installed, an additional of approximately 4,700 during the year.

In FY19, dtac also participated in the 700 MHz allocation and got allocated 2x10 MHz of 700 MHz with validity of 15 years in which the license is scheduled to commence potentially in Q420. By acquiring the 700 MHz, dtac is also eligible for the 900 MHz payment term extension, and the adjustments in our booking related to the 900 MHz payment term extension has already been reflected in FY19.

The swapping of 850 MHz equipment with 900 MHz equipment is planned to be concluded in 2020 as some delays expected, pending filter installation by CAT and finalizing funding for cost of filter installation. Regulatory process is still ongoing, however, more clarity is expected in Q120.

Market was relatively rational both in prepaid segment and postpaid segment when compared with last year and growing overall driven by strong demand for data and shift towards postpaid. While competition in postpaid was relative stable in FY19, unlimited prepaid acquisition data packages were removed in Q219 and got replaced by aggressive fixed data volume packages with unlimited anynet voice in Q319 by all operators. Heightened activities were observed in Q419 with unlimited prepaid acquisition data package reintroduced nationwide by all operators.

At the end of FY2019, total subscriber base stood at 20.6 million, with positive net additional subscribers in Q419 (both prepaid and postpaid). Approximately 31 percent of total subscriber base were postpaid subscribers.

Service revenues excluding IC in Q419 increased by 3.1% YoY, bringing a reduction of service revenues excluding IC in FY19 to 1.6% YoY. Core service revenues (defined by bundle of voice and data service revenues) in FY19 increased by 0.1% YoY. Blended ARPU improved YoY in FY19, mainly driven by upsell and higher toppings. EBITDA (before other items) dropped 9.3% YoY in FY19 primarily due to cost base reset from end of concession with higher network OPEX from expanded network, as well as CAT lease costs, partially offset by a reduction in regulatory costs. EBITDA margin for FY19 was 31.3%. However, excluding revenues from CAT lease agreements and TOT network rental, EBITDA margin stood at 35.6%. Net profit for FY19 amounted to THB 5,899 million.

In FY19, dtac made all payments under the Disputes Settlement Agreement with CAT, subsequent to relevant court orders for cases withdrawal.

Our guidance for FY20 includes a low single-digit growth in service revenue (excluding IC), a mid single-digit growth in EBITDA and THB 13 – 15 billion CAPEX.

Operational SummaryAt the end of FY2019, total subscriber base stood at 20.6 million, declining 560k from the end of last year, due to the decline in prepaid segment from end of concession and remedy period as well as seasonal and rotational churn, which was partly offset by growth in postpaid segment. Prepaid subscriber base was 14.2 million, declining 917k from FY2018 but increasing 181k QoQ in Q419. Postpaid subscriber base increased by 357k to 6.4 million.

Average Revenue per User excluding IC (ARPU) for FY2019 was THB 254 per month, showing a growth of 5.0% YoY. At the end of FY2019, postpaid subscriber base accounted for approximately 31% of total subscriber base. Postpaid ARPU for FY2019 was THB 549 per month, increasing 3.1% YoY, while prepaid ARPU was THB 137 per month, dropped 4.1% YoY, driven by lower prepaid revenue.

Traffics on TOT’s 4G-2300MHz network continued to increase, driven by coverage expansion and higher number of users with 2300MHz-compatible device. No. of 4G-2300MHz installed base stations under the partnership with TOT reached approximately 17,400 at end of FY2019, increasing by approximately 4,700 base stations from FY2018. The number of 4G users was 11.7 million, representing approximately 57% of total subscriber base, while the number of 4G compatible device increased to 78% of total subs base. Smartphone penetration increased to 85%.

Management Discussion and Analysis

Management Discussion and Analysis. Annual Report 2019

127

Active subscribers (in thousand) FY2018 FY2019 %YoY

Postpaid (under concession from CAT) - - n/a

Prepaid (under concession from CAT) - - n/a

Postpaid (under licenses) 6,071 6,427 5.9%

Prepaid (under licenses) 15,131 14,214 -6.1%

Total active subscribers 21,202 20,642 -2.6%

Net additional subscribers (in thousand) FY2018 FY2019 %YoY

Postpaid 434 357 -17.7%

Prepaid (1,884) (917) -51.3%

Total net additional subscribers (1,450 (560 -61.4%

MoU (minutes/sub/month) FY2018 FY2019 %YoY

Postpaid 243 223 -8.3%

Prepaid 104 85 -18.4%

Blended MoU 140 124 -11.0%Postpaid excluding Incoming minutes 172 156 -9.2%

Prepaid excluding Incoming minutes 80 62 -21.6%

Blended MoU excluding Incoming minutes 103 89 -13.6%

ARPU (THB/sub/month) FY2018 FY2019 %YoY

Postpaid 552 567 2.9%

Prepaid 148 142 -4.3%

Blended ARPU 251 263 4.8%Postpaid excluding IC 532 549 3.1%

Prepaid excluding IC 142 137 -4.1%

Blended ARPU excluding IC 242 254 5.0%

Financial SummaryRevenues

Total revenues in FY19 amounted to THB 82,146 million, increasing 9.1% YoY, due to higher core service revenues and TOT 2300 MHz network rental. Service revenues excluding IC decreased 1.6% YoY to THB 62,109 million.

Core service revenues (defined by bundle of voice and data service revenues) in FY19 amounted to THB 58,853 million, increasing 0.1% YoY, driven by improved prepaid subscriber development and continuous growth in postpaid.

International Roaming (IR) revenues in FY19 amounted to THB 831 million, decreasing 26.3% YoY mainly from the general trend, intense competition and lower traffic.

Other service revenues in FY19 amounted to THB 2,425 million, a reduction of 24.1% YoY, mainly due to continued declining trend in IDD revenues.

Handset and starter kit sales in FY19 amounted to THB 7,798 million, slightly increasing 0.4% YoY.

Cost of Services

Cost of services excluding IC in FY19 amounted to THB 44,550 million, decreasing 1.4% YoY mainly driven by lower regulatory and amortization expenses of assets under concession, which were partly offset by higher amortization expenses of 1800 MHz and 900 MHz spectrum licenses, lease expenses of assets under concession to CAT, and costs related to partnership with TOT on 2300 MHz wireless business.

Regulatory costs in FY19 amounted to THB 2,634 million, declining 57.9% YoY, after end of the concession and remedy period. As a result, regulatory costs in FY19 accounted for 4.2% of service revenue (excluding IC), which decreased significantly from 9.9% in FY18.

Network OPEX in FY19 amounted to THB 12,094 million, increasing 42.7% YoY due to network expansion and lease expenses to CAT. Furthermore, net CAT payment in FY19 amounted to THB 2,721 million, increasing 209.9% YoY.

128

Other operating costs of services in FY19 amounted to THB 15,279 million, increasing 144.6% YoY, due to the 2300 MHz roaming cost paid to TOT. Net YoY increase from TOT’s 2300 MHz roaming cost, net of corresponding revenues, was approximately THB 1,729 million in FY19.

Depreciation and Amortization (D&A) of costs of services in FY19 amounted to THB 14,544 million, declining 39.9% YoY, mainly a result of concessionary asset being fully amortized after expiry of the concession in September 2018, partly offset by amortization expenses of the 1800 MHz and 900 MHz spectrum licenses and continuing network expansion.

Selling, General and Administrative Expenses (SG&A)

SG&A expenses in FY19 amounted to 15,317 million, increasing 3.1% YoY due to higher general administrative expenses and depreciation and amortization.

Selling and Marketing (S&M) expenses in FY19 amounted to THB 4,690 million, decreasing 1.9 YoY due to well-control spending.

General administrative expenses in FY19 amounted to THB 8,296 million, increasing 5.8% YoY primarily from one-off expenses network operating model transition cost and loss from sales of assets.

Provision for bad debt in FY19 amounted to THB 1,341 million, decreasing 2.2% YoY.

Depreciation and Amortization (D&A) of SG&A in FY19 amounted to THB 921 million, increasing 6.5% YoY.

EBITDA and Net Profit

EBITDA (before other items) in FY19 amounted to THB 25,741 million, declining 9.3% YoY mainly driven by higher network OPEX from expanded network, as well as CAT lease costs, partially offset by a reduction in regulatory costs. As a result, EBITDA margin (excluding revenues from CAT lease agreements and TOT network rental) was 35.6% in FY19, declining from 38.4% in FY18.

Net profit for FY19 amounted to THB 5,899 million, increasing 69.4% YoY excluding CAT settlement in Q418.

Income statement (THB million) - (Pre-TFRS 15 & 16) FY2018 FY2019 %YoY

Core service revenues (Voice & Data)* 58,796 58,853 0.1%

IR revenues 1,127 831 -26.3%

Other service revenues 3,197 2,425 -24.1%

Service revenues ex. IC 63,120 62,109 -1.6%IC revenue 2,204 2,102 -4.6%

Service revenues 65,325 64,211 -1.7%Handsets and starter kits sales 7,769 7,798 0.4%

Other operating income 2,196 10,136 361.6%

Total revenues from sales and services 75,290 82,146 9.1%Cost of services (47,455) (46,745) -1.5%

Regulatory (6,262) (2,634) -57.9%

Network (8,475) (12,094) 42.7%

IC (2,275) (2,195) -3.5%

Others (6,246) (15,279) 144.6%

Depreciation and Amortization (24,197) (14,544) -39.9%

Cost of handsets and starter kits (9,825) (10,549) 7.4%

Total costs (57,280) (57,294) 0.0%Gross profit 18,010 24,852 38.0%SG&A (14,851) (15,317) 3.1%

Selling & Marketing expenses (4,778) (4,690) -1.9%

General administrative expenses (7,844) (8,296) 5.8%

Provision for bad debt (1,371) (1,341) -2.2%

Depreciation and Amortization (864) (921) 6.5%

Loss from Asset Impairment 6 (69) -100.0%

Gain/Loss on foreign exchange 7 (15) -321.9%

Interest income 241 58 -76.0%

Other income & share of profit from investment in associated company (4) (6) 52.3%


129

Income statement (THB million) - (Pre-TFRS 15 & 16) FY2018 FY2019 %YoY

EBIT 3,403 9,572 181.3%Financial cost (1,351) (2,585) 91.3%

Corporate income tax 1,431 (1,088) -176.1%

Non-controlling interest (0) 0 n.m.

Net profit attributable to equity holders 3,482 5,899 69.4%* Reclassification between core service revenues (voice & data) and other operating income. No impact to total revenues.

EBITDA (THB million)** - (Pre-TFRS 15 & 16) FY2018 FY2019 %YoY

Net profit for the period 3,482 5,899 69.4%

Finance costs 1,351 2,585 91.3%

Income tax expenses (1,431) 1,088 -176.1%

Depreciation & Amortization 25,061 15,465 -38.3%

Other items (73) 704 -1066.7%

EBITDA 28,391 25,741 -9.3%

EBITDA margin 37.7% 31.3%

EBITDA margin (based on total revenues excluding revenues from CAT lease agreement and TOT network rental in the denominator)

38.4% 35.6%

** EBITDA herein is EBITDA before other incomes and other expenses. Please see more details in the note of the financial statement.

Balance Sheet and Key Financial InformationAt the end of FY19, total assets amounted to THB 143,049 million, decreasing from THB 150,958 million at the end of FY18. Cash and cash equivalent amounted to THB 8,528 million, decreasing from THB 14,090 million at the end of FY18 due mainly to one-off CAT settlement. Interest-bearing debt increased from THB 47,000 million at the end of FY18 to THB 49,000 million. Net debt to EBITDA was 1.6x, increasing from 1.2x at the end of FY18.

CAPEX in FY19 amounted to THB 13,006 million which reflected continue network rollout. Operating cash flow (defined by EBITDA-CAPEX) amounted to THB 12,735 million.

Statement of financial position (THB million) (Pre-TFRS 15 & 16) End of FY2018 End of FY2019

Cash and cash equivalent 14,090 8,528

Other current assets 14,427 14,619

Non-current assets 122,441 119,901

Total assets 150,958 143,049Current liabilities 53,208 55,751

Non-current liabilities 75,820 62,379

Total liabilities 129,028 118,129Total shareholders’ equity 21,930 24,919Total liabilities and equity 150,958 143,049

130

Cash flows statement (THB million) (Pre-TFRS 15 & 16) FY2018 FY2019

Cash flows from operating activities 21,084 16,373

Cash paid for interest expenses and tax (2,828) (3,157)

Net cash flows from operating activities 18,256 13,216Net cash flows from investing activities (25,238) (17,794)Net cash receipt/(Repayment) (2,015) 2,000

Dividend paid (2,960) (2,983)

Net cash flows from financing activities (4,975) (983)Net change in cash (11,957) (5,562)

Debt repayment schedule (THB million), end of FY2019 Loan Debenture

In 2020 12,000 4,000

In 2021 - 2,500

In 2022 1,333 3,000

From 2023 2,667 23,500

Total 16,000 33,000

Key Financial Ratio (Pre-TFRS 15 & 16) FY2018 FY2019

Return on Equity (%)** 13.6% 25.2%

Return on Asset (%)*** 2.6% 6.5%

Net debt to EBITDA (times) 1.2 x 1.6 x

CAPEX to Total Revenue (%) 25.9% 15.8%

** Net profit attributable to equity holder divided by average equity*** EBIT divided by average assets

Outlook 2020

In FY2020, we aim to create YoY growth and setting the enablers for a 5G future. Our focuses will be “Never stop improving” the customer experience, getting the enablers ready for 2021 and beyond, and creating the new buckets of growth.

2020 guidance:

• Service revenue excluding IC: Low single-digit growth

• EBITDA: Mid single-digit growth

• CAPEX: THB 13 – 15 billion

We maintain our dividend policy which is to pay out dividend not less than 50% of the Company’s net profits, depending on financial position and future business plans, and aim to pay dividend semi-annually.


131

132

REPORT OF THE BOARD OF DIRECTORS’

RESPONSIBILITY FOR THE FINANCIAL

REPORTS

Report of the Board of Directors’ Responsibility for the Financial Reports. Annual Report 2019

133

The Board of Directors is responsible for the financial statements of the Company and its subsidiaries and the financial information as presented in the annual report of the Company. The financial statements of the Company and its subsidiaries as of 31 December 2019 have been prepared with careful consideration, in conformity with generally accepted accounting principles in Thailand, and using appropriate accounting policies and best estimation. All material information has been sufficiently disclosed in the notes to financial statements. The financial statements have been duly audited by independent authorized auditors who have provided unqualified opinions. The financial statements therefore reflect the Company’s financial condition and results of operation that is true, transparent and reasonable for the benefits of all shareholders and investors.

The Board of Directors has established and maintained an appropriate and efficient internal control system and internal audit system to ensure that all accounting records are accurate, complete and sufficient to safeguard the Company’s assets and prevent corruptions and materially irregular practices.

The Board of Directors has appointed an Audit Committee, which consists of independent directors who are responsible for the accuracy and adequacy of the financial reports, the appropriateness and efficiency of the internal control system and internal audit system, and compliance with laws and regulations related to the Company’s business. The opinion of the Audit Committee is provided in the Report of the Audit Committee as presented in this annual report.

The Board of Directors is of the opinion that the Company’s overall internal control system is satisfactory and provides reasonable assurance to the credibility of the financial statements of the Company and its subsidiaries as of 31 December 2019.

On behalf of the Board of Directors


28 January 2019


Chair of the Board of Directors

Mr. Rakesh Jain

Director

Report of the Board of Directors’ Responsibility for the Financial Reports

INDEPENDENT AUDITOR’S REPORT

134

Independent Auditor’s Report. Annual Report 2019

135

To the Shareholders of Total Access Communication Public Company Limited

Opinion

I have audited the accompanying consolidated financial statements of Total Access Communication Public Company Limited and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at 31 December 2019, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies, and have also audited the separate financial statements of Total Access Communication Public Company Limited for the same period.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Total Access Communication Public Company Limited and its subsidiaries and of Total Access Communication Public Company Limited as at 31 December 2019, their financial performance and cash flows for the year then ended, in accordance with Thai Financial Reporting Standards.

Basis for Opinion

I conducted my audit in accordance with Thai Standards on Auditing. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Group in accordance with the Code of Ethics for Professional Accountants as issued by the Federation of Accounting Professions as relevant to my audit of the financial statements, and I have fulfilled my other ethical responsibilities in accordance with the Code. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Emphasis of matters

My opinion is not modified in respect of these matters.

I draw attention to the following Notes to the consolidated financial statements.

1. Significant legal cases and commercial disputes

a. As discussed in Note 36 to the consolidated financial statements, the Company is involved in proceedings and commercial disputes with TOT Public Company Limited (“TOT”) in relation to the access charge payment. For the period from 18 November 2006 to 7 November 2007, the Company accrued the access charge in the financial statements at the interconnection charge rate payable, and this amounted to Baht 1,973 million. So from 8 November 2007 to 31 December 2019 the Company did not accrue the access charge in its financial statements because the Company’s management believes that its obligation to pay access charges at the access charge rates under the Access Charge Agreements is ended. To date, TOT has not entered into an interconnection charge agreement with the Company. In addition, on 9 May 2011, TOT had filed a plaint with the Central Administrative Court, and a petition to amend the plaint on 7 September 2011, demanding that CAT Telecom Public Company Limited (“CAT”) and the Company jointly pay damages resulting from the access charge up to 9 May 2011 (the filing date of the plaint) which, including VAT and default interest, amounted to Baht 113,319 million. Subsequently, on 31 July 2014, TOT filed an additional petition to amend the plaint, adjusting the amount of damages claimed up to 10 July 2014 to Baht 245,638 million, including VAT and default interest. On 31 May 2019, the Central Administrative Court issued a verdict dismissing TOT’s claim on access charges against the Company on the basis that the method of calculating the access charges contravened NTC Interconnection Notification 2549. Therefore, the relevant telecommunication operators are required to proceed the interconnection charge calculation in accordance with the said NTC Notification. TOT did not appeal this decision within the stipulated timeframe and the case is thus final, as per the letter from the Central Administrative Court dated 19 July 2019. Currently, the Company and TOT are negotiating interconnection settlement that are in accordance with such NTC Notification.

Based on advice from the Company’s legal counsel, the Company’s management believes that the Company is not obliged to make payment of access charge at the access charge rates under the agreements because the calculation of access charges under such agreements does not comply with current legal principles (NBTC notification) requiring the charges should be performed on the basis of interconnection charge. Currently, the Company is in process of discussions on the interconnection charge settlement with TOT which have not been finalised or clearly concluded and related litigation is under court proceedings. The outcome depends on the results of future legal, negotiation, and judicial processes.

Independent Auditor’s Report

136

b. As discussed in Note 38 to the consolidated financial statements, the Company is involved in a dispute regarding additional revenue sharing payment (Excise Tax) under the Concession Agreement and disputes regarding revenue share calculation in relation to Interconnection Charge (“IC”) revenue after the enforcement of the IC Notification with CAT, as well as other litigation cases. At present, these disputes and litigation cases are under formal arbitration and court proceedings. The outcome cannot be determined and depend on future judicial proceeding.

2. Regulatory risks concerning the telecommunications business

As discussed in Note 39 to the consolidated financial statements, the Company and its subsidiaries are exposed to certain significant regulatory risks related to the telecommunications business, including those related to the management under the spectrum licenses at appropriate costs for use in the operation of the mobile telecommunication business, which is significant to the Group’s operation of its telecommunication business at present.

3. Legal cases and commercial disputes under Disputes Settlement Agreement

As discussed in Note 37 to the consolidated financial statements, the Company and dtac TriNet Co., Ltd. (“dtac TriNet”), which is a subsidiary, signed the Disputes Settlement Agreement with CAT to settle numbers of disputes between the Company and CAT, including disputes being litigated and disputes or claims related to the concession agreement that may be raised by CAT in the future, but excluding the disputes between the Company and CAT regarding additional revenue sharing payments (Excise Tax) under the Concession Agreement and the dispute between the Company and CAT regarding the revenue sharing calculation in relation to Interconnection Charge (“IC”) revenue after the enforcement of the IC Notification. This Disputes Settlement Agreement was binding upon the parties, subject to the terms and conditions specified, and takes effect when the Company obtained approval from a meeting of its shareholders. On 4 April 2019, the 2019 Annual General Meeting of the Company’s Shareholders had approved the dispute settlement with CAT under such Disputes Settlement Agreement including the implementation under such Agreement. The Arbitral Tribunal and Administrative Court provided the orders to dispose of disputes or cases as requested by the Company, dtac triNet and CAT.

4. The early adoption of new financial reporting standard

As described in Note 4 to the consolidated financial statements, during the current year, the Company and its subsidiaries have early adopted TFRS 16 Leases.

Key Audit Matters

Key audit matters are those matters that, in my professional judgement, were of most significance in my audit of the financial statements of the current period. These matters were addressed in the context of my audit of the financial statements as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on these matters.

I have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report, including in relation to these matters. Accordingly, my audit included the performance of procedures designed to respond to my assessment of the risks of material misstatement of the financial statements. The results of my audit procedures, including the procedures performed to address the matters below, provide the basis for my audit opinion on the accompanying financial statements as a whole.

Key audit matters and how audit procedures respond for each matter are described below.

Contingent liabilities arising from significant litigation and commercial disputes

As discussed in emphasis of matters regarding significant litigation and commercial disputes, and as described in Note 36 and 38 to the consolidated financial statements, the Company involved in legal cases and commercial disputes.

Currently, the commercial disputes are in legal processes, and litigation is the subject of court proceedings, which mean that their outcomes cannot be determined and depend on the results of future legal and judicial proceedings. In addition, the timing and amount of any impact is uncertain. The management needs to exercise significant judgement and take into account related laws and regulations to assess the outcomes of the litigation and commercial disputes in order to determine the corresponding liabilities. Due to the inherent uncertainty and complexity of these cases, this is a key audit matter.


137

I inquired with the management about the procedures relevant to the collation, monitoring and assessment of pending significant legal cases and commercial disputes, and assessed the judgement exercised by the management in evaluating the legal cases and commercial disputes. The audit procedures included, among others, the following:

a) I enquired with the management and obtained related information from them in relation to these significant legal cases and commercial disputes.

b) I reviewed the letters of confirmation relevant to the significant legal cases and commercial disputes received from the external legal counsels who have been retained by the Company, and evaluated their responses. I also discussed the matters with the internal legal counsels and enquired with management with respect to details and the progress of these cases and disputes, and the methods applied by the management in assessing and estimating the liabilities arising from these legal cases and commercial disputes. I have also reviewed the legal opinions provided by the external legal counsels of the Company that were used to support management’s evaluations.

c) I assessed the disclosure of information relating to significant legal cases and commercial disputes in the notes to the consolidated financial statements.

Impairment evaluation of equipment, including right-of-use assets - cost of spectrum licenses and other related right-of-use assets, for mobile telecommunication services operation

As discussed in Note 14 to the consolidated financial statements, in evaluating impairment for the equipment, including right-of-use assets - cost of spectrum licenses and other related right-of-use assets, for mobile telecommunication services operation of the Company and its subsidiaries, management had to exercise judgement with respect to its projections of future operating performance, plans for management and use of those assets, future maintenance and investment, and determination of an appropriate discount rate and key assumptions. There is considerable uncertainty related to projections of future cash flows for the impairment loss assessment on that assets.

In order to assess the management’s evaluation of impairment on equipment, including right-of-use assets - cost of spectrum licenses and other related right-of-use assets, for mobile telecommunication services operation, I evaluated the management’s identification of the cash generating units and the selection of a financial model, by gaining an understanding of management’s decision-making process and ascertaining whether it is consistent with how assets are expected to be utilised including to gain an understanding and assess the following:

a) The assumptions applied in preparing cash flow projections for the Company and its subsidiaries, based on the understanding I gained of the process by which the estimated future cashflows were determined; comparison of the assumptions with external and internal sources of information where available, and management’s approved forecasts and business plan, taking into account the accuracy of past cash flow projections in comparison to actual operating results.

b) The discount rate, based on comparison of the average cost of capital of the Company and its subsidiaries to that of comparable organisations in the industry.

c) The assumptions and approaches used by management in calculating the recoverable amount of assets.

In addition, I assessed the information disclosed by the Company’s and subsidiaries’ management with respect to impairment evaluation of equipment, including right-of-use assets - cost of spectrum licenses and other related right-of-use assets, for mobile telecommunication services operation.

Revenue recognition from provision of mobile telecommunication services

As described in Note 5.1 to the consolidated financial statements, accounting policies of revenue recognition, the Company and its subsidiaries have variety of mobile telephone service tariff structures, charging conditions offered in response to subscriber needs and the significant number of service transactions. In addition, there is more intense competition in the mobile telecommunication industry. I have therefore determined as a key audit matter by focusing on the amount and timing of the recognition of revenue from the provision of mobile telecommunication services.

138

The audit procedures included, among others, an assessment of the Company and its subsidiaries’ accounting policies, an assessment of the effectiveness of the Company and its subsidiaries’ general controls over their IT systems and their internal controls with respect to the processing and timing of recognition for mobile telecommunication service charges.

On a sampling basis, I examined supporting documents for actual revenue transactions occurring during the year and near the end of accounting period. I also performed analytical review procedures on disaggregated revenue data and examined the related accounting entries made through journal vouchers.

Other Information

Management is responsible for the other information. The other information comprise the information included in annual report of the Group, but does not include the financial statements and my auditor’s report thereon. The annual report of the Group is expected to be made available to me after the date of this auditor’s report.

My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon.

In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit or otherwise appears to be materially misstated.

When I read the annual report of the Group, if I conclude that there is a material misstatement therein, I am required to communicate the matter to those charged with governance for correction of the misstatement.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Thai Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Thai Standards on Auditing, I exercise professional judgement and maintain professional skepticism throughout the audit. I also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.


139

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. I am responsible for the direction, supervision and performance of the group audit. I remain solely responsible for my audit opinion.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

I also provide those charged with governance with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, I determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. I describe these matters in my auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, I determine that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

I am responsible for the audit resulting in this independent auditor’s report.

Gingkarn Atsawarangsalit

Certified Public Accountant (Thailand) No. 4496

EY Office Limited

Bangkok: 28 January 2020

140

FINANCIAL STATEMENTS

Financial Statements. Annual Report 2019

141

Statement of financial positionAs at 31 December 2019

Total Access Communication Public Company Limited and its subsidiaries

(Unit: Baht)

Consolidated financial statements Separate financial statements

Note 2019 2018 2019 2018

Assets

Current assets

Cash and cash equivalents 7 8,528,384,697 14,090,265,602 4,573,891,195 7,133,761,421

Trade and other receivables 8 9,791,135,793 7,831,396,854 5,431,592,717 3,200,994,313

Lease receivable - current portion 22.3 382,096,000 - - -

Inventories 10 1,087,833,918 2,128,407,237 20,510,605 3,013,260

Other current assets 11 2,806,990,099 4,466,978,160 300,151,422 842,821,421

Total current assets 22,596,440,507 28,517,047,853 10,326,145,939 11,180,590,415

Non-current assets

Restricted bank deposits 35.3 139,527 139,527 - -

Investment in associated company 12 250,149,029 263,979,767 50,000,000 50,000,000

Investments in subsidiaries 13 - - 1,613,914,716 1,953,917,315

Other investments 43,224,286 30,755,539 1,800,000 1,800,000

Amount due from related parties 9 - 196,295 - 217,366,362

Loans to subsidiary 9 - - 10,500,000,000 10,000,000,000

Property, plant and equipment 14 53,894,383,048 53,853,929,407 1,988,255,912 2,329,952,112

Deposits and prepayment for purchase and installation of equipment 244,617,026 498,625,298 - 1,237,365

Prepaid expenses and deferred expenses 123,600,791 2,883,930,568 123,600,791 145,253,485

Cost of spectrum licenses 15 - 54,219,217,735 - -

Right-of-use assets - cost of spectrum licenses 15 50,234,964,493 - - -

Right-of-use assets 22.1 23,663,543,275 - 803,490,865 -

Other intangible assets 16 1,664,471,637 1,289,958,880 291,258,949 229,527,298

Deferred tax assets 28 5,596,325,069 6,600,313,770 4,582,921,334 6,070,865,594

Lease receivable - net of current portion 22.3 6,102,075,282 - - -

Other non-current assets 17 2,924,882,179 2,799,560,374 1,807,151,494 2,292,784,784

Total non-current assets 144,742,375,642 122,440,607,160 21,762,394,061 23,292,704,315

Total assets 167,338,816,149 150,957,655,013 32,088,540,000 34,473,294,730

The accompanying notes are an integral part of the financial statements.

142

Statement of financial position (continued)As at 31 December 2019


(Unit: Baht)



Note 2019 2018 2019 2018

Liabilities and shareholders’ equity

Current liabilities

Trade and other payables 18 26,690,315,933 39,899,479,900 10,530,128,083 20,075,541,385

Long-term loans - current portion 19 12,000,000,000 7,875,000,000 - -

Debentures - current portion 20 4,000,000,000 1,500,000,000 - -

Unearned revenue from telephone service 1,856,229,515 2,322,686,629 658,338,123 -

Income tax payable 69,379 559,240,154 - -

Accrued cost of spectrum licenses - current portion 10,526,950,000 - - -

Lease liabilities - current portion 22.2 4,453,563,921 - 446,364,947 -

Assets retirement obligation - current portion 21 61,966,163 57,149,228 3,556,218 6,735,517

Other current liabilities 591,741,698 993,989,802 173,887,843 415,772,858

Total current liabilities 60,180,836,609 53,207,545,713 11,812,275,214 20,498,049,760

Non-current liabilities

Long-term loans - net of current portion 19 4,000,000,000 9,625,000,000 - -

Debentures - net of current portion 20 29,000,000,000 28,000,000,000 - -

Provision for long-term employee benefits 23 711,242,517 734,605,891 711,242,517 734,605,891

Accrued cost of spectrum licenses - net of current portion 25,487,908,841 36,103,517,682 - -

Accrued cost of spectrum licenses - deferred 1,198,695,076 - - -

Lease liabilities - net of current portion 22.2 20,103,334,287 - 271,977,470 -

Assets retirement obligation - net of current portion 21 1,685,315,375 1,157,478,821 212,661,102 157,078,165

Other non-current liabilities 5,071,310 199,828,278 1,319,027 159,142,891

Total non-current liabilities 82,191,567,406 75,820,430,672 1,197,200,116 1,050,826,947

Total liabilities 142,372,404,015 129,027,976,385 13,009,475,330 21,548,876,707


143

(Unit: Baht)



Note 2019 2018 2019 2018

Shareholders’ equity

Share capital

Registered

2,372,080,630 ordinary shares of Baht 2 each 4,744,161,260 4,744,161,260 4,744,161,260 4,744,161,260

Issued and fully paid

2,367,811,000 ordinary shares of Baht 2 each 4,735,622,000 4,735,622,000 4,735,622,000 4,735,622,000

Premium on ordinary shares 42 6,541,658,660 6,927,789,290 6,541,658,660 6,927,789,290

Other surplus 1,647,137,361 1,647,137,361 1,647,137,361 1,647,137,361

Retained earnings

Appropriated - statutory reserve 42 453,646,244 465,929,718 453,646,244 465,929,718

Unappropriated (deficits) (6,061,783,086) (9,497,550,192) 5,701,000,405 (852,060,346)

(5,608,136,842) (9,031,620,474) 6,154,646,649 (386,130,628)

Other components of shareholders’ equity 17,650,130,955 17,650,130,955 - -

Equity attributable to owners of the Company 24,966,412,134 21,929,059,132 19,079,064,670 12,924,418,023

Non-controlling interest of the subsidiaries - 619,496 - -

Total shareholders’ equity 24,966,412,134 21,929,678,628 19,079,064,670 12,924,418,023

Total liabilities and shareholders’ equity 167,338,816,149 150,957,655,013 32,088,540,000 34,473,294,730

Statement of financial position (continued)As at 31 December 2019


144

(Unit: Baht)

Income statementFor the year ended 31 December 2019


Consolidated financial statements Separate financial statementsNote 2019 2018 2019 2018

Revenues from sales and services Revenue from telephone services 63,332,725,238 65,324,577,061 4,332,197,275 8,366,725,399 Revenue from sales of telephone sets

and starter kits 8,628,584,371 7,769,100,931 91,108,962 4,909,184,881 Other operating income 9,205,826,793 2,195,987,303 14,499,584,274 16,509,781,497 Total revenues from sales and

services 25 81,167,136,402 75,289,665,295 18,922,890,511 29,785,691,777 Cost of sales and services Cost of telephone services 45,564,991,966 47,454,838,455 2,456,007,552 13,996,420,996 Cost of sales of telephone sets and

starter kits 10,548,824,108 9,824,777,184 78,924,579 4,478,957,102 Total cost of sales and services 56,113,816,074 57,279,615,639 2,534,932,131 18,475,378,098 Gross profit 25,053,320,328 18,010,049,656 16,387,958,380 11,310,313,679 Interest income 57,838,760 241,121,805 169,000,486 461,228,394 Other income 3,224,922 8,465,836 3,054,114,049 6,566,370,678 Income before expenses 25,114,384,010 18,259,637,297 19,611,072,915 18,337,912,751 Selling, distribution and service

expenses (4,716,984,368) (4,778,367,391) (2,217,250,655) (3,174,140,924)Administrative expenses 37 (10,644,567,707) (17,930,159,646) (6,745,137,126) (14,637,050,335)Gain (loss) on foreign exchange (15,140,069) 6,823,626 (1,208,879) 6,431,489 Loss from assets impairment 13, 14 (68,840,989) 6,230,000 (68,840,989) 6,230,000 Total expenses (15,445,533,133) (22,695,473,411) (9,032,437,649) (17,798,529,770)Profit (loss) before share of loss

from investment in associate, finance cost and income tax expenses 9,668,850,877 (4,435,836,114) 10,578,635,266 539,382,981

Share of loss from investment in associated company 12 (8,830,739) (12,147,716) - -

Profit (loss) before finance cost and income tax expenses 9,660,020,138 (4,447,983,830) 10,578,635,266 539,382,981

Finance cost 27 (3,269,350,258) (1,351,242,097) (43,262,341) (342,249,400)Profit (loss) before income tax

expenses 6,390,669,880 (5,799,225,927) 10,535,372,925 197,133,581 Income tax expenses 28 (968,871,154) 1,430,536,469 (1,470,200,349) 1,286,308,004 Profit (loss) for the year 5,421,798,726 (4,368,689,458) 9,065,172,576 1,483,441,585

Profit (loss) attributable to:Equity holders of the Company 5,421,893,006 (4,368,692,047) 9,065,172,576 1,483,441,585 Non-controlling interests of the

subsidiaries (94,280) 2,589 5,421,798,726 (4,368,689,458)

Earnings per share 29Basic earnings (loss) per share

Profit (loss) attributable to equity holders of the Company 2.29 (1.85) 3.83 0.63



145


2019 2018 2019 2018

Profit (loss) for the year 5,421,798,726 (4,368,689,458) 9,065,172,576 1,483,441,585

Other comprehensive income

Other comprehensive income not to be reclassified to profit and loss in subsequent periods

Actuarial gains 90,646,827 23,197,860 90,646,827 23,197,860

Less: income tax effect (17,743,911) - (17,743,911) -

Other comprehensive income not to be reclassified to profit and loss in subsequent periods

- net of income tax 72,902,916 23,197,860 72,902,916 23,197,860

Other comprehensive income for the year 72,902,916 23,197,860 72,902,916 23,197,860

Total comprehensive income for the year 5,494,701,642 (4,345,491,598) 9,138,075,492 1,506,639,445

Total comprehensive income attributable to:

Equity holders of the Company 5,494,795,922 (4,345,494,187) 9,138,075,492 1,506,639,445

Non-controlling interests of the subsidiaries (94,280) 2,589

5,494,701,642 (4,345,491,598)

(Unit: Baht)

Statement of comprehensive incomeFor the year ended 31 December 2019



146

Cons

olid

ated

fina

ncia

l sta

tem

ent

Equi

ty a

ttrib

utab

le to

ow

ners

of t

he C

ompa

ny

Othe

r com

pone

nts o

f equ

ity

Adju

stm

ent

resu

lting

from

redu

ctio

n of

lega

l res

erve

an

d pr

emiu

m o

n or

dina

rysh

are

to o

ffse

tth

e Co

mpa

ny’s

defic

its

Equi

ty

attr

ibut

able

to n

on-

cont

rolli

ng in

tere

sts o

fth

e su

bsid

iarie

s

Othe

r sur

plus

Capi

tal s

urpl

us

from

rest

ruct

urin

g

Reta

ined

ear

ning

s

Not

e

Issu

ed a

ndpa

id-u

psh

are

capi

tal

Prem

ium

on

ordi

nary

shar

es

Appr

opria

ted

- sta

tuto

ryre

serv

eUn

appr

opria

ted

(defi

cits

)

Tota

l oth

erco

mpo

nent

sof

equ

ity

Tota

l equ

ityat

trib

utab

le to

shar

ehol

ders

of

the

Com

pany

Tota

lsh

areh

olde

rs’

equi

ty

Bala

nce

as a

t 1 Ja

nuar

y 20

18 4

,735

,622

,000

6

,927

,789

,290

1,

647,

137,

361

56,

545,

457

(1,7

82,9

26,4

12)

17,6

50,13

0,95

5 17

,650

,130,

955

29,

234,

298,

651

616

,907

2

9,23

4,91

5,55

8

Loss

for t

he y

ear

-

-

-

-

(4,3

68,6

92,0

47)

-

-

(4,3

68,6

92,0

47)

2,5

89

(4,3

68,6

89,4

58)

Othe

r com

preh

ensi

ve in

com

e fo

r the

yea

r -

-

-

-

2

3,19

7,86

0 -

-

2

3,19

7,86

0 -

2

3,19

7,86

0

Tota

l com

preh

ensi

ve in

com

e fo

r the

yea

r -

-

-

-

(4

,345

,494

,187)

-

-

(4,3

45,4

94,18

7) 2

,589

(4

,345

,491

,598

)

Divi

dend

pai

d24

-

-

-

-

(2,9

59,7

45,3

32)

-

-

(2,9

59,7

45,3

32)

-

(2,9

59,7

45,3

32)

Tran

sfer

reta

ined

ear

ning

s to

lega

l res

erve

42

-

- -

4

09,3

84,2

61

(409

,384

,261

) -

-

-

-

-

Bala

nce

as a

t 31 D

ecem

ber 2

018

4,7

35,6

22,0

00

6,9

27,7

89,2

90

1,64

7,13

7,36

1 4

65,9

29,7

18

(9,4

97,5

50,19

2) 17

,650

,130,

955

17,6

50,13

0,95

5 2

1,929

,059

,132

619

,496

2

1,929

,678

,628

Bala

nce

as a

t 1 Ja

nuar

y 20

19

- as p

revi

ousl

y re

port

ed 4

,735

,622

,000

6

,927

,789

,290

1,

647,

137,

361

465

,929

,718

(9

,497

,550

,192)

17,6

50,13

0,95

5 17

,650

,130,

955

21,9

29,0

59,13

2 6

19,4

96

21,9

29,6

78,6

28

Cum

ulat

ive

effe

cts o

f cha

nges

in a

ccou

ntin

g

pol

icie

s due

to th

e ad

optio

n of

new

fina

ncia

l rep

ortin

g st

anda

rd4

--

--

525

,985

,925

--

525

,985

,925

- 5

25,9

85,9

25

Bala

nce

as a

t 1 Ja

nuar

y 20

19 -

as re

stat

ed 4

,735

,622

,000

6

,927

,789

,290

1,

647,

137,

361

465

,929

,718

(8

,971

,564

,267

) 17

,650

,130,

955

17,6

50,13

0,95

5 2

2,45

5,04

5,05

7 6

19,4

96

22,

455,

664,

553

Profi

t for

the

year

-

-

-

-

5,4

21,8

93,0

06

-

-

5,4

21,8

93,0

06

(94,

280)

5,4

21,7

98,7

26

Othe

r com

preh

ensi

ve in

com

e fo

r the

yea

r -

-

-

-

7

2,90

2,91

6 -

-

7

2,90

2,91

6 -

7

2,90

2,91

6

Tota

l com

preh

ensi

ve in

com

e fo

r the

yea

r -

-

-

-

5

,494

,795

,922

-

-

5

,494

,795

,922

(

94,2

80)

5,4

94,7

01,6

42

Divi

dend

pai

d24

-

-

-

-

(2,9

83,4

28,8

45)

-

-

(2,9

83,4

28,8

45)

- (2

,983

,428

,845

)

Redu

ctio

n of

lega

l res

erve

and

pre

miu

m o

n

ord

inar

y sh

ares

to o

ffset

the

defic

its42

-

(386

,130,

630)

-

(465

,929

,718

) 8

52,0

60,3

48

-

-

- -

-

Tran

sfer

reta

ined

ear

ning

s to

lega

l res

erve

42

-

-

-

453

,646

,244

(4

53,6

46,2

44)

-

-

-

-

-

Equi

ty d

istrib

ute

to n

on-c

ontro

lling

inte

rest

s

fro

m su

bsid

iary

’s li

quid

atio

n13

-

-

-

-

-

-

-

-

(525

,216

) (5

25,2

16)

Bala

nce

as a

t 31 D

ecem

ber 2

019

4,7

35,6

22,0

00

6,5

41,6

58,6

60

1,64

7,13

7,36

1 4

53,6

46,2

44

(6,0

61,7

83,0

86)

17,6

50,13

0,95

5 17

,650

,130,

955

24,

966,

412,

134

-

24,

966,

412,

134

The

acco

mpa

nyin

g no

tes a

re a

n in

tegr

al p

art o

f the

fina

ncia

l sta

tem

ents

.

Stat

emen

t of c

hang

es in

shar

ehol

ders

’ equ

ityFo

r the

yea

r end

ed 3

1 Dec

embe

r 201

9(U

nit:

Baht

)

Tota

l Acc

ess C

omm

unic

atio

n Pu

blic

Com

pany

Lim

ited

and

its su

bsid

iarie

s


147

Stat

emen

t of c

hang

es in

shar

ehol

ders

’ equ

ity (c

ontin

ued)

For t

he y

ear e

nded

31 D

ecem

ber 2

019

Not

e

Sepa

rate

fina

ncia

l sta

tem

ents

Issu

ed a

ndpa

id-u

psh

are

capi

tal

Prem

ium

on

ordi

nary

shar

es

Othe

r sur

plus

Tota

lsh

areh

olde

rs’

equi

ty

Capi

tal s

urpl

us

from

rest

ruct

urin

g

Reta

ined

ear

ning

s

Appr

opria

ted

- sta

tuto

ry re

serv

eUn

appr

opria

ted

(defi

cits

)

Bala

nce

as a

t 1 Ja

nuar

y 20

18 4

,735

,622

,000

6

,927

,789

,290

1,

647,

137,

361

56,

545,

457

1,01

0,42

9,80

2 14

,377

,523

,910

Profi

t for

the

year

-

-

-

-

1,48

3,44

1,585

1,

483,

441,5

85

Othe

r com

preh

ensi

ve in

com

e fo

r the

yea

r -

-

-

-

2

3,19

7,86

0 2

3,19

7,86

0

Tota

l com

preh

ensi

ve in

com

e fo

r the

yea

r -

-

-

-

1,

506,

639,

445

1,50

6,63

9,44

5

Divi

dend

pai

d24

-

-

-

-

(2,9

59,7

45,3

32)

(2,9

59,7

45,3

32)

Tran

sfer

reta

ined

ear

ning

s to

lega

l res

erve

42 -

-

-

4

09,3

84,2

61

(409

,384

,261

) -

Bala

nce

as a

t 31 D

ecem

ber 2

018

4,7

35,6

22,0

00

6,9

27,7

89,2

90

1,64

7,13

7,36

1 4

65,9

29,7

18

(852

,060

,346

) 12

,924

,418

,023

Bala

nce

as a

t 1 Ja

nuar

y 20

19 4

,735

,622

,000

6

,927

,789

,290

1,

647,

137,

361

465

,929

,718

(8

52,0

60,3

46)

12,9

24,4

18,0

23

Profi

t for

the

year

-

-

-

-

9,0

65,17

2,57

6 9

,065

,172,

576

Othe

r com

preh

ensi

ve in

com

e fo

r the

yea

r -

-

-

-

7

2,90

2,91

6 7

2,90

2,91

6

Tota

l com

preh

ensi

ve in

com

e fo

r the

yea

r -

-

-

-

9

,138,

075,

492

9,13

8,07

5,49

2

Divi

dend

pai

d24

-

-

-

-

(2,9

83,4

28,8

45)

(2,9

83,4

28,8

45)

Redu

ctio

n of

lega

l res

erve

and

pre

miu

m o

nor

dina

ry sh

ares

to o

ffset

the

defic

its42

-

(386

,130,

630)

-

(465

,929

,718

) 8

52,0

60,3

48

-

Tran

sfer

reta

ined

ear

ning

s to

lega

l res

erve

42 -

-

-

4

53,6

46,2

44

(453

,646

,244

)-

Bala

nce

as a

t 31 D

ecem

ber 2

019

4,7

35,6

22,0

00

6,5

41,6

58,6

60

1,64

7,13

7,36

1 4

53,6

46,2

44

5,7

01,0

00,4

05

19,0

79,0

64,6

70

The

acco

mpa

nyin

g no

tes a

re a

n in

tegr

al p

art o

f the

fina

ncia

l sta

tem

ents

.

Tota

l Acc

ess C

omm

unic

atio

n Pu

blic

Com

pany

Lim

ited

and

its su

bsid

iarie

s

(Uni

t: Ba

ht)

148


(Unit: Baht)

Cash flow statementFor the year ended 31 December 2019


2019 2018 2019 2018

Cash flows from operating activities

Profit (loss) before income tax expenses 6,390,669,880 (5,799,225,927) 10,535,372,925 197,133,581

Adjustments to reconcile profit (loss) before tax

to net cash provided by (paid from) operating activities:

Unrealised loss (gain) on foreign exchnage 52,990,066 (40,302,784) 22,418,584 24,302,507

Share of loss from investment in associated company 8,830,739 12,147,716 - -

Dividend received from subsidiaries - - (2,984,295,080) (6,529,636,190)

Dividend received from associated company - - (5,000,000) -

Dividend received from other investments (375,000) (375,000) (375,000) (375,000)

Allowance for inventory obsolescence (reversal) 12,354,632 (276,789,049) (6,000,317) (313,113,990)

Reversal of allowance for doubtful accounts - trade and other receivables (233,845,005) (42,885,475) (16,358,623) (40,459,677)

Allowance for impairment on assets/investment in subsidiary 68,840,989 - 68,840,989 -

Allowance for impairment of investment in other investment 250,000 250,000 - -

Reversal of allowance for impairment of property, plant and equipment - (6,230,000) - (186,367,898)

Depreciation and amortisation (Note 30) 20,013,150,347 25,104,570,775 1,057,369,495 6,856,273,835

Write-off of property, plant and equipment 43,034,300 52,783,356 12,874,549 26,228,181

Effect from adjustment of right-of-use assets 56,315,229 - 258,967 -

Loss (gain) from sales of equipment 39,112,645 250,244 (31,682,761) (2,691,553)

Gain from disposal of other intangible assets - - (2,501,311) -

Provision for long-term employee benefits 68,083,500 60,321,723 68,083,500 60,321,723

Disputes settlement agreement expenses - 7,850,854,127 - 7,850,854,127

Amortisation on cost to obtain contracts 215,106,556 - - -

Interest expenses 3,236,607,874 1,293,071,212 26,982,426 327,200,713

Profit from operating activities before changes in operating assets and liabilities 29,971,126,752 28,208,440,918 8,745,988,343 8,269,670,359

Decrease (increase) in operating assets

Trade and other receivables (1,610,841,182) 382,953,473 (2,223,067,495) 3,770,936,791

Inventories 1,028,218,687 101,915,128 (11,497,029) 2,222,861,661

Other current assets 207,752,291 (1,842,926,278) 501,164,789 300,759,037

Prepaid expenses and deferred expenses 429,902,693 (2,883,930,568) 21,652,693 (145,253,485)

Other non-current assets (262,400,222) (355,307,885) 45,461,740 (32,788,739)

Increase (decrease) in operating liabilities

Trade and other payables (8,182,764,641) (2,044,372,457) (9,498,592,789) (3,728,513,111)

Other current liabilities (785,401,696) (409,116,427) 413,273,804 (418,888,501)

Deposit guarantee on domestic roaming agreement - - - (3,750,763,651)

Other non-current liabilities (41,067,086) (73,622,896) (447,196) (50,467,737)

Cash flows from operating activities 20,754,525,596 21,084,033,008 (2,006,063,140) 6,437,552,624

Cash paid for interest expenses (2,275,565,358) (1,313,111,947) (23,817,391) (427,143,144)

Cash paid for income tax (1,931,894,270) (2,690,415,573) (624,143,356) (862,695,843)

Tax refund 1,050,316,443 1,175,154,338 1,050,316,443 1,165,781,605

Net cash flows from (used in) operating activities 17,597,382,411 18,255,659,826 (1,603,707,444) 6,313,495,242



149

(Unit: Baht)


2019 2018 2019 2018

Cash flows from investing activities

Increase in other investments (12,718,722) (4,720,306) - -

Proceeds from sales of other investments - 670,676 - -

Cash receipt from loan to subsidiary - - 5,500,000,000 15,500,000,000

Cash paid to loan to subsidiary - - (6,000,000,000) (10,000,000,000)

Dividend received from subsidiaries - - 2,984,295,080 6,529,636,190

Dividend received from associated company 5,000,000 - 5,000,000 -

Dividend received from other investments 375,000 375,000 375,000 375,000

Cash receipt from subsidiary's liquidation - - 271,161,610 -

Cash paid to non-controlling interests from subsidiary’s liquidation (525,216) - - -

Decrease (increase) in amounts due from related parties - - 217,366,362 (8,432)

Acquisition of building and equipment (17,053,121,095) (13,422,869,437) (711,038,533) (187,440,510)

Proceeds from sales of building and equipment 22,668,091 23,331,365 380,003,462 30,450,967

Decrease in equipment under installation - 251,725,596 - 252,675,245

Acquisition of deferred right to use of equipment - (887,580,513) - (991,974,172)

Decrease (increase) in deposits and prepayment for purchase and installation of equipment 254,008,272 (115,193,127) 1,237,365 58,585,901

Acquisition of cost of spectrum licenses - (10,276,500,000) - -

Acquisition of other intangible assets (991,317,020) (807,510,057) (193,225,469) (178,306,225)

Proceeds from sales of other intangible assets - - 9,538,990 -

Acquisition of right-of-use assets (18,630,000) - (4,860,375) -

Proceeds from sales of right-of-use assets - - 42,988,533 -

Net cash flows from (used in) investing activities (17,794,260,690) (25,238,270,803) 2,502,842,025 11,013,993,964

Cash flows from financing activities

Repayment of short-term loan from related company - (15,000,000) - -

Cash receipt from long-term loan 38,000,000,000 - - -

Repayment of long-term loans (39,500,000,000) - - -

Repayment of long-term loans from subsidiary - - - (23,000,000,000)

Cash receipt from debentures 5,000,000,000 - - -

Repayment of debentures (1,500,000,000) (2,000,000,000) - -

Cash paid for lease liabilities (4,381,573,781) - (475,575,962) -

Dividend paid (2,983,428,845) (2,959,745,332) (2,983,428,845) (2,959,745,332)

Net cash flows used in financing activities (5,365,002,626) (4,974,745,332) (3,459,004,807) (25,959,745,332)

Net decrease in cash and cash equivalents (5,561,880,905) (11,957,356,309) (2,559,870,226) (8,632,256,126)

Cash and cash equivalents at beginning of year 14,090,265,602 26,047,621,911 7,133,761,421 15,766,017,547

Cash and cash equivalents at end of year 8,528,384,697 14,090,265,602 4,573,891,195 7,133,761,421

Supplemental cash flow information:

Non-cash items:

Accounts payable for purchase of equipment 6,152,494,740 11,261,698,423 55,683,069 130,101,862

Accounts payable for purchase of other intangible assets 192,952,793 140,705,336 39,307,045 25,299,634

Accrued cost of spectrum licenses 36,054,739,370 36,054,739,370 - -

Lease liabilities 24,556,898,208 - 718,342,417 -

Cash flow statement (continued)For the year ended 31 December 2019



150

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

151

Notes to consolidated financial statements. Annual Report 2019

For the year ended 31 December 2019

1. General information

1.1 Corporate information

Total Access Communication Public Company Limited (“the Company”) is a public company incorporated and domiciled in Thailand. The Company listed on the Stock Exchange of Thailand in 2007.

The Company has two major shareholders who are Telenor Asia Pte Ltd., a company incorporated in Singapore, and Thai Telco Holding Co., Ltd., a company incorporated in Thailand. The Company is principally engaged in the provision of wireless telecommunications services and the sale of handsets and accessories.

The Company’s registered address is 319 Chamchuri Square Building, 41st Fl., Phayathai Road, Pathumwan, Bangkok.

The Company operated cellular telephone services in 800 MHz and 1800 MHz frequency bands under the agreement with CAT Telecom Public Company Limited (CAT) (Concession agreement) during 16 September 1991 and ended at 15 September 2018.

At present, the Company was awarded an Internet Service Business Type 1 license by The National Broadcasting and Telecommunications Commission (“NBTC”) to provide retail WiFi internet services for a duration of 5 years (starting from 13 June 2018 and expiry on 12 June 2023).

1.2 Corporate information of dtac TriNet Company Limited

dtac TriNet Company Limited (“dtac TriNet”) is a subsidiary of the Company and is incorporated and domiciled in Thailand. dtac TriNet has the following licenses to provide its services.

a) A type three telecommunication business license (for providing an international call services (International Direct Dialing)) by NTC for duration of 20 years (starting from 6 February 2007 and expiry on 5 February 2027). dtac TriNet started rendering international call services since 2 August 2007, and therefore committed to comply with conditions stipulated under the license. Moreover, dtac TriNet is required to comply with rules and pay license fee and fee for Universal Basic Telecommunications and Social Services (USO) as specified by law.

b) A type one telecommunication business license for Internet Service Provider by NTC for a period of 5 years (current license for a period as from 30 August 2006 (renovate on 30 August 2019) and expiry on 29 August 2024 ).dtac TriNet has to pay the license fee and fee for Universal Basic Telecommunications and Social Services (USO) as specified by law and to renew the license in every 5 years.

c) Spectrum Licensing and a type three telecommunication business license (authorisation to use the spectrum license) by NBTC for the validity period of 15 years (starting from 7 December 2012 and expiry on 6 December 2027) for operating telecommunication business for International Mobile Telecommunication (IMT) in the frequency band 2.1GHz covered the range of 1920 - 1935 MHz paired with 2110 - 2125 MHz under the scope of the license throughout the Kingdom of Thailand.

dtac TriNet paid for the winning bid price of the authorization to use spectrum license in total Baht 14,445 million (VAT included) and is required to pay fees as specified by the NBTC. It is expected that dtac TriNet should gain revenue from telecommunication business operation exceeding Baht 50,000 million, thus it is required to pay the license fee at the rate of 1.5% per annum and USO fee at the rate of 3.75% per annum totaling 5.25% per annum which subsequently NBTC announced the reduction of USO fee to be 2.5% per annum effective on 30 May 2017 onward. Accordingly, the total fee is currently 4% per annum.

d) A type two telecommunication business license by NBTC for International Internet Gateway (ITG) service and National Internet Exchange (NIE) service. dtac TriNet has to pay the license fee and fee for Universal Basic Telecommunications and Social Services (USO) as specified by law and to renew the license in every 5 years (current license for a period as from 26 June 2015 and expiry on 25 June 2020).

e) A type three telecommunication business license by NBTC for fixed line service for period of 12 years (starting from 2 September 2015 and expiry on 5 February 2027) which the operation has been commenced since March 2017.

Notes to consolidated financial statements


152

f) A type three telecommunication business license by NBTC for International Private Leased Circuit (IPLC) for period of 11 years (starting from 12 July 2016 and expiry on 5 February 2027) which the operation has been commenced since November 2016.

g) A type one telecommunication business license for resale of Leased Circuit/Channel Service for period of 5 years (starting from 22 March 2017 and expiry on 21 March 2022) which the operation has been commenced since April 2017.

h) Spectrum Licensing by NBTC for the validity period of 15 years (starting from 16 December 2018 and expiry on 15 December 2033) for operating telecommunication business for International Mobile Telecommunication in the frequency band 1800 MHz (“Spectrum license”) for 2x5 MHz covered the range of 1745 - 1750 MHz paired with 1840 - 1845 MHz under the scope of the license throughout the Kingdom of Thailand.

dtac TriNet is required to make payment for the winning bid price of the authorization to use the spectrum license in the total amount of Baht 13,386.77 million (including VAT) under the following payment conditions:

First installment: To pay 50% of the winning bid price, equivalent to Baht 6,693.39 million and to submit a letter of guarantee from a commercial bank to guarantee the remaining payment for the winning bid price within 90 days of the receipt of the notice of the bidders on 23 August 2018 to NBTC which NBTC will issue the spectrum license. dtac TriNet has already paid first installment for spectrum license on 19 November 2018.

Second installment: To pay 25% of the winning bid price, equivalent to Baht 3,346.69 million and to submit a letter of guarantee from a commercial bank to guarantee the third installment within 15 days after the lapse of 2 years from the date of obtaining the license. NBTC will return the letter of guarantee that firstly submitted within 15 days from the date the licensee pays the second installment.

Third installment: To pay 25% of the winning bid price, equivalent to Baht 3,346.69 million within 15 days after the lapse of 3 years from the date of obtaining the license. NBTC will return the letter of guarantee that secondly submitted within 15 days from the date the licensee pays the third installment.

i) Spectrum Licensing by NBTC for the validity period of 15 years (starting from 16 December 2018 and expiry on 15 December 2033) for operating telecommunication business for International Mobile Telecommunication in the frequency band 900 MHz (“Spectrum license”) for 2x5 MHz covered the range of 890 - 895 MHz paired with 935 - 940 MHz under the scope of the license throughout the Kingdom of Thailand.

dtac TriNet is required to make payment for the winning bid price of the authorization to use the spectrum license in the total amount of Baht 40,728.48 million (including VAT) under the payment conditions specified in the NBTC’s announcement regarding rules and procedures for the Spectrum Licensing for Telecommunications Business in spectrum band of 890-895/935-940 MHz as follows:

First installment: To pay Baht 4,301.40 million and to submit a letter of guarantee from a commercial bank to guarantee the remaining payment for the winning bid price within 90 days of the receipt of the notice of the bidders on 1 November 2018 to NBTC which NBTC will issue the spectrum license. dtac TriNet has already paid first installment for spectrum license on 12 December 2018.

Second installment: To pay Baht 2,150.70 million and to submit a letter of guarantee from a commercial bank to guarantee the third and fourth installment within 15 days after the lapse of 2 years from the date of obtaining the license. NBTC will return the letter of guarantee that firstly submitted within 15 days from the date the spectrum licensee pays the second installment.

Third installment: To pay Baht 2,150.70 million and to submit a letter of guarantee from a commercial bank to guarantee the fourth installment within 15 days after the lapse of 3 years from the date of obtaining the license. NBTC will return the letter of guarantee that secondly submitted within 15 days from the date the spectrum licensee pays the third installment.

Fourth installment: To pay Baht 32,125.68 million within 15 days after the lapse of 4 years from the date of obtaining the license. NBTC will return the letter of guarantee that thirdly submitted within 15 days from the date the spectrum licensee pays the fourth installment.

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On 10 May 2019, dtac TriNet sent a letter to the Office of NBTC requesting to divide the payment for 900 MHz spectrum in accordance with the Order of the Head of the National Council for Peace and Order No. 4/2562 dated 11 April 2019 Re: Measure of problem solving for television and telecommunications business operations (“NCPO Order No. 4/2562”) which specified that NBTC is to consider dividing the total amount of auction payment which the licensee of 900 MHz spectrum is required to pay into ten installments, one installment payment per year, in equal amount. The request for the installment payment is under the condition that the licensee must be the applicant who has the right to receive a license to use the 700 MHz spectrum. Later, on 19 June 2019, dtac TriNet participated in the 700 MHz spectrum allocation and has been allocated one block of 700 MHz spectrum under the conditions as described in Note 1.2 j) to the consolidated financial statements. Subsequently, dtac TriNet received the letter from Office of NBTC confirming that dtac TriNet has complied with the conditions determined by NCPO Order No.4/2562. As a result, dtac Trinet is entitled to divide the payment for 900 MHz spectrum into ten installments, in equal amount, as specified by NCPO Order No.4/2562, by considering that the year in which dtac TriNet won the 900 MHz spectrum auction (December 2018) is regarded as the first installment and the details of remaining payment for 900 MHz spectrum (included VAT) are as follows:

Second and third installments: To pay Baht 7,917.14 million in 2020

Fourth installment to tenth installment: To pay 10% of the cost of license spectrum or Baht 4,072.85 million in equal amount for each installment.

While paying the installment payment, dtac TriNet has obligations to submit bank guarantee to guarantee the remaining payment and to comply with regulations and conditions specified by NCPO Order No.4/2562.

Since, dtac TriNet received a confirmation letter from NBTC for the compliance with the requirements as specified in the NCPO Order No.4/2562, it has the right to divide the payment term of the 900 MHz spectrum license mentioned above. dtac TriNet’s management considered the relevant information including the substance of transaction and reckoned that the receipt of the said payment conditions for 900 MHz spectrum directly related to the participation in 700 MHz spectrum application to the NBTC office, thus after that, dtac TriNet has been allocated the bandwidth. Therefore, the difference between the present value (calculated as of the date dtac TriNet being allocated the 700 MHz bandwidth) of the 900 MHz spectrum liability that dtac TriNet must pay in accordance with the new payment terms and the original payment terms would be reclassified from the “Accrued cost of spectrum license” to “Accrued cost of spectrum license - deferred” which will be recorded as part of the cost of spectrum license of the 700 MHz spectrum when dtac TriNet receives a license to use the 700 MHz spectrum in accordance with the rules, procedures and conditions as described in Note 1.2 j) to the consolidated financial statements.

j) On 19 June 2019, dtac TriNet has been allocated the frequency band 700 MHz (“Spectrum license”) for covered the range of 713-723 MHz paired with 768-778 MHz Spectrum Licensing by NBTC for the validity period of 15 years starting from 1 October 2020 or until the NBTC will determine otherwise in operating telecommunication business for International Mobile Telecommunication under the scope of the license throughout the Kingdom of Thailand. However, the applicant requesting for the frequency spectrum license the applicant must be the licensee of the 890-915 MHz / 935-960 MHz spectrum, and must have the qualifications required by the NBTC announcement. Re: Permission to use spectrum for telecommunication businesses in the area 703-733 / 758-788 MHz, dated 4 June 2019 (“NBTC announcement”) as well including placing a bank guarantee of Baht 880 million in order to proceed with the application for a license.

dtac TriNet is required to make payment for the winning bid price of the authorisation to use the spectrum license in the total amount of Baht 18,815 million (including VAT). Under the terms of the permission to use the spectrum, certain important conditions that need to be fulfilled before receiving the spectrum license have been determined including the payment of the first installment in accordance with specified conditions. The payment conditions for the spectrum for obtaining a license are as follows:

First installment: To pay 10% of the cost of the spectrum or Baht 1,881.5 million including submission of bank guarantee for the remaining payments within 15 days before the starting date of the permission to use the 700 MHz frequency.

Second installment to tenth installment: To pay 10% of the cost of spectrium license or Baht 1,881.5 million each, including each submissions of bank guarantee for the remaining payments within 15 days from the date of the anniversary of the permission to use the spectrum each year.

154

In case of the applicant who obtained the right to be granted the spectrum license fails to completely and correctly comply with the conditions precedent within the prescribed period, the applicant shall be deemed to have waived the right to be granted the spectrum license. As well, such applicant has to pay for penalties consisting of the preliminary damages at least of Baht 2,638 million and other damages caused by the recall of spectrum according to the NCPO’s Order No. 4/2562 including the voiding of permission to divide the payment as mentioned above which must be returned to pay in accordance with conditions for payment of 900 MHz spectrum and the additional spectrum auction in accordance with the regulations specified in the NBTC’s announcement regarding rules and procedures for the Spectrum Licensing for Telecommunications Business in the spectrum band of 890-895 / 935-940 MHz.

1.3 Interconnection charge

In December 2013, the NBTC issued the Notification RE: Uses and Interconnections of Telecommunication Networks B.E. 2556 (2013) (the “Interconnection Notification 2556”) to replace the NTC’s Notification RE: Uses and Interconnections of Telecommunication Networks B.E. 2549 (the “Interconnection Notification 2549”) in order to be consistent with the current situation and the Act on the Organisation for Allocation of Frequency and Regulation of Radio and Television Broadcasting Business and Telecommunications Business, B.E. 2553 (2010). The Interconnection Notification 2556 determines that operators who have telecommunication networks are required to grant other operators effective access to their networks.

The Company received approvals under the Interconnection Notification 2549 from NTC for Reference of Interconnect Offering (RIO) on 29 August 2006 and under the Interconnection Notification 2556 from NBTC for RIO on 30 April 2015. However, the right to operate the telecommunications business of the Company’s concessionary right has ended on 15 September 2018. The Company has sent a notice to other licensees who are the interconnection partners with the Company to acknowledge the termination of the concession agreement and the termination of the interconnection of the telecommunication network.

Pursuant to the Concession Agreement which ended on 15 September 2018, the Company shall pay revenue sharing to CAT every year based on a percentage of revenues from services provided under the Concession Agreement but not less than a minimum annual revenue sharing payment as specified in it. However, the entry into the interconnection charge agreements has caused an uncertainty on the revenue share calculation payable to CAT under the Concession Agreement. Therefore, from the 17th concession year onward, the Company has decided to calculate revenue sharing payable to CAT on the basis of service revenue, excluding interconnection charges, until a conclusion can be reached with CAT. Nevertheless, CAT has challenged the Company’s revenue share calculation in this matter by submitting a statement of claim requesting the Company to pay additional revenue share on interconnection charge (please refer to Note 38 (b) to the consolidated financial statements for more details).

For the interconnection arrangement of dtac TriNet, dtac TriNet has entered into the interconnection charge agreements with other operators, which are listed below:

Operators Effective period

a) Total Access Communication Plc. 1 July 2013 onwards

b) True Move Co., Ltd. 1 July 2013 onwards

c) True Move H Universal Communication Co., Ltd. 1 July 2013 onwards

d) True Universal Convergence Co., Ltd. 1 July 2013 onwards

e) Advance Info Service Plc. 1 July 2013 onwards

f) Advanced Wireless Network Co., Ltd. 1 July 2013 onwards

g) CAT Telecom Plc. 1 July 2013 onwards

h) Triple T Broadband Plc. 1 July 2013 onwards

i) True International Communication Co., Ltd 1 January 2014 onwards

j) Otaro World Corportion Co., Ltd. 20 August 2018 onwards

k) TOT Plc. 18 December 2019 onwards

155


1.4 Transfer of all business of subsidiaries

On 11 December 2018, a meeting of the Extraordinary General Meeting of the Company’s shareholders No. 1/2018 approved the transfer of the entire business of DTAC Broadband Co., Ltd. and Eastern Beach Co., Ltd. (“subsidiaries”). The Company entered into an agreement to transfer the entire business on 12 December 2018. The Company executed the transfer of all assets and liabilities of the subsidiaries as at 1 January 2019 (“transferred date”). The subsidiaries ceased all operations and registered the dissolution with the Ministry of Commerce. Currently, the Company submitted the notification to the Revenue Department in order to request the tax privileges available for an entire business transfer and has completed the process of legal registration regarding the transfer of ownership of real estate and other assets from the subsidiaries.

Details of the fair value and book value of the net assets of DTAC Broadband Co., Ltd. as at the transfer date (1 January 2019), are as follows:

(Unit: Thousand Baht)

Fair value Book value

Assets

Cash and cash equivalents 861,727 861,727

Trade and other receivables - net 367,706 367,706

Equipment - net 182,631 182,631

Intangible assets - net 8,851 8,851

Other assets 22,585 22,585

Total assets 1,443,500 1,443,500

Liabilities

Trade and other payables 35,172 35,172

Other liabilities 211 211

Total liabilities 35,383 35,383

Net asset value from the business transfer (Transfer price) 1,408,117 1,408,117

Details of the fair value and book value of the net assets of Eastern Beach Co., Ltd. as at the transfer date (1 January 2019), are as follows:



Assets


Investment property - land 371,175 46,492

Other assets 4 4

Total assets 372,953 48,270

Net asset value from the business transfer (Transfer price) 372,953 48,270

156

Subsequently, a meeting of the 2019 Annual General Meeting of the Company’s shareholders, held on 4 April 2019, approved the transfer of the entire business of Paysbuy Co., Ltd. (“subsidiary”). The Company entered into an agreement to transfer the entire business on 31 May 2019. The Company executed the transfer of all assets and liabilities of the subsidiary as at 1 June 2019 (“transferred date”). The subsidiary ceased all operation and to register the dissolution with the Ministry of Commerce. On 3 September 2019, the Company submitted the notification to the Revenue Department in order to request the tax privileges available for an entire business transfer.

Details of the fair value and book value of the net assets of Paysbuy Co., Ltd. as at the transfer date (1 June 2019), are as follows:



Assets


Trade and other receivables - net 1,128,831 1,128,831

Inventories 2,638 2,638

Equipment - net 20,359 20,359

Total assets 1,939,405 1,939,405

Liabilities

Deposits from customers 715,731 715,731

Trade and other payables 679,716 679,716

Total liabilities 1,395,447 1,395,447

Net asset value from the business transfer (Transfer price) 543,958 543,958

2. Basis of preparation

2.1 The financial statements have been prepared in accordance with Thai Financial Reporting Standards enunciated under the Accounting Profession Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 11 October 2016, issued under the Accounting Act B.E. 2543.

The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from the Thai language financial statements.

The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies.

2.2 Basis of consolidation

a) The consolidated financial statements include the financial statements of Total Access Communication Public Company Limited (“the Company”) and the following subsidiary companies (“the subsidiaries”):

157


Company’s name Nature of business

Country of

incorporation

Percentage

of shareholding

2019 2018

Percent Percent

Subsidiaries directly held by the Company

WorldPhone Shop Company Limited Under liquidation process of payment to creditors

Thailand 100 100

TAC Property Company Limited Asset management Thailand 100 100

dtac TriNet Company Limited Providing telecommunications services

Thailand 100 100

DTAC Broadband Company Limited Under liquidation process Thailand 100 100


Under liquidation process equity distribute to shareholders

Thailand - 99.81

PaySbuy Company Limited Under liquidation process Thailand 100 100

Subsidiary held through TAC Property Company Limited

Eastern Beach Company Limited Under dissolution process Thailand 100 100

Subsidiary held through dtac TriNet Company Limited

dtac Accelerate Company Limited Investment and support start-up companies to develop applications

Thailand 100 100

dtac Service Company Limited Dissolution and liquidation Thailand - 100

dtac Next Company Limited Dissolution and liquidation Thailand - 100

dtac Digital Media Company Limited Under dissolution process Thailand 100 100

TeleAssets Company Limited Lease of telecommunication equipment and device

Thailand 100 100

b) The Company is deemed to have control over an investee or subsidiaries if it has rights, or is exposed, to variable returns from its involvement with the investee, and it has the ability to direct the activities that affect the amount of its returns.

c) Subsidiaries are fully consolidated, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases.

d) The financial statements of the subsidiaries are prepared using the same significant accounting policies as the Company.

e) Material balances and transactions between the Company and its subsidiary companies have been eliminated from the consolidated financial statements. Book value of investments and shareholder’s equity of its subsidiaries have also been eliminated from the consolidated financial statements.

f) Non-controlling interests represent the portion of profit or loss and net assets of the subsidiaries that are not held by the Company and are presented separately in the consolidated profit or loss and within equity in the consolidated statement of financial position.

2.3 The separate financial statements present investments in subsidiaries and associates presented under the cost method.

158

3. New financial reporting standards

(a) Financial reporting standards that became effective in the current period

During the period, the Company and its subsidiaries have adopted the revised (revised 2018) and new financial reporting standards and interpretations which are effective for fiscal years beginning on or after 1 January 2019. These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards with most of the changes directed towards clarifying accounting treatment and providing accounting guidance for users of the standards. The adoption of these financial reporting standards does not have any significant impact on the Company’s and its subsidiaries’ financial statements. However, the new standard involves changes to key principles, which are summarised below:

TFRS 15 Revenue from Contracts with CustomersTFRS 15 supersedes the following accounting standards together with related interpretations.

TAS 11 (revised 2017) Construction contractsTAS 18 (revised 2017) RevenueTSIC 31 (revised 2017) Revenue - Barter Transactions Involving Advertising ServicesTFRIC 13 (revised 2017) Customer Loyalty ProgrammesTFRIC 15 (revised 2017) Agreements for the Construction of Real EstateTFRIC 18 (revised 2017) Transfers of Assets from Customers

Entities are to apply this standard to all contracts with customers unless those contracts fall within the scope of other standards. The standard establishes a five-step model to account for revenue arising from contracts with customers, with revenue being recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The standard requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model.

The Company and its subsidiaries adopted TFRS 15 using the modified retrospective method of adoption of which the cumulative effect is recognised as an adjustment to the retained earnings as at 1 January 2019, and the comparative information was not restated. The Company and its subsidiaries elect to apply the practical expedients by not restate completed contracts as at 1 January 2019 for which the entity has transferred all of the goods or services identified in accordance with the previous accounting policy.

The cumulative effect of the change is described in Note 4 to the consolidated financial statements.

(b) Early adoption of new financial reporting standard

During the year, the Company and its subsidiaries have early adopted TFRS 16 Leases which is effective for fiscal periods beginning on or after 1 January 2020. According to the announcement of Federation of Accounting Professions no. 14/2562, the TFRS 16 is allowed to apply before the effective date if an entity adheres to TFRS 15 Revenue from Contracts with Customers at or before the date of adoption of the TFRS 16. The TFRS16 involves changes to key principles, which are summarised below:

TFRS 16 Leases

TFRS 16 supersedes TAS 17 Leases together with related Interpretations. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases, and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is low value.

Accounting by lessors under TFRS 16 is substantially unchanged from TAS 17. Lessors will continue to classify leases as either operating or finance leases using similar principles to those used under TAS 17.

The Company and its subsidiaries have recognised the effect of initial applying TFRS 16 and the comparative information was not restated. The Company and its subsidiaries elects to apply TFRS 16 to leases previously classified as an operating leases by recognised lease liabilities as of 1 January 2019 at the present value of lease payment to be made over the remaining lease term which is discounted by the Incremental Borrowing Rate of the Company and subsidiaries as of the initial application date and recognised right-of-use assets at an amount equal to the lease liabilities, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the statement of financial position before the date of initial application.

The effect of the change is described in Note 4 to the consolidated financial statements.

159


(c) Financial reporting standards that will become effective for fiscal years beginning on or after 1 January 2020

The Federation of Accounting Professions issued a number of new and revised financial reporting standards and interpretations, which are effective for fiscal years beginning on or after 1 January 2020. These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards with most of the changes directed towards clarifying accounting treatment and providing accounting guidance for users of the standards except the following new standards which involve changes to key principles, which are summarised below.

Financial reporting standards related to financial instruments

A set of TFRSs related to financial instruments consists of five accounting standards and interpretations, as follows:

Financial reporting standards:

TFRS 7 Financial Instruments: Disclosures

TFRS 9 Financial Instruments

Accounting standard:

TAS 32 Financial Instruments: Presentation

Financial Reporting Standard Interpretations:

TFRIC 16 Hedges of a Net Investment in a Foreign Operation

TFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

These TFRSs related to financial instruments make stipulations relating to the classification of financial instruments and their measurement at fair value or amortised cost (taking into account the type of instrument, the characteristics of the contractual cash flows and the Company’s business model), calculation of impairment using the expected credit loss method, and hedge accounting. These include stipulations regarding the presentation and disclosure of financial instruments. When the TFRSs related to financial instruments are effective, some accounting standards, interpretations and guidance which are currently effective will be cancelled.

The management of the Company and its subsidiaries expect that the adoption of these accounting standards to result in the following adjustments.

• Classification and measurement of investments in equity instruments of non-listed companies - The Company and its subsidiaries are to measure investments in equity instruments of non-listed companies at fair value and elect to classify the investments as financial assets at fair value, through either profit or loss or through other comprehensive income. If the Company and subsidiaries elect to present subsequent changes in the fair value of the investment through other comprehensive income, the election is irrevocable.

• Recognition of credit losses - The Company and its subsidiaries are to recognise an allowance for expected credit losses on its financial assets, and they are no longer necessary for a credit - impaired event to have occurred. The Company and its subsidiaries apply simplified approach to consider impairment of trade receivables.

• Recognition of derivatives - The Company and its subsidiaries are to initially recognise derivative at their fair value on the contract date and subsequently measure them at their fair value at the end of each reporting period. Changes in the fair value of derivatives are recognised in profit or loss. However, the Company and its subsidiaries are currently considering application of hedge accounting for certain derivatives.

The management of the Company and its subsidiaries is currently evaluating the impact of these standards to the financial statements in the year when they are adopted.

160

4. Cumulative effects of changes in accounting policies due to the adoption of new financial reporting standards

As described in Note 3 to the consolidated financial statements, during the current year, the Company and its subsidiaries have adopted TFRS 15 and TFRS16 using the modified retrospective method of adoption. The cumulative effect of initially applying TFRS 15 and TFRS16 is recognised. Therefore, the comparative information was not restated.

The effect of the changes in accounting policies due to the adoption of TFRS 15 Revenue from contracts with customers on the beginning balance of retained earnings for 2019 comprises:

(Unit: Million Baht)

Consolidated financial statements

Impact on retained earnings as at 1 January 2019

Unbilled revenue 231

Costs to obtain contracts 426

Related tax expenses (131)

Total 526

There is no effect of the changes in accounting policies due to the early adoption of TFRS 16 Leases on the beginning balance of retained earnings for 2019.

The amounts of adjustments affecting the statements of financial position as at 31 December 2019 and the income statements for the year ended 31 December 2019 due to the adoption of TFRS 15 and TFRS16 are summarised below.



Previous accounting policy

Increase (decrease)

TFRS 15 TFRS16 As reported

Statement of financial position

Assets

Trade and other receivables 9,615 176 - 9,791

Lease receivable - current portion - - 382 382

Other current assets 3,916 189 (1,298) 2,807

Property, plant and equipment 55,400 - (1,506) 53,894

Prepaid expenses and deferred expenses 2,455 - (2,331) 124

Cost of spectrum licenses 50,235 - (50,235) -

Right-of-use assets - cost of spectrum licenses - - 50,235 50,235

Right-of-use assets - - 23,664 23,664

Other intangible assets 1,699 - (35) 1,664

Deferred tax assets 5,607 (109) 98 5,596

161





Increase (decrease)


Lease receivable - net of current portion - - 6,102 6,102

Other non-current assets 3,966 178 (1,219) 2,925

Liabilities

Trade and other payables 26,708 - (18) 26,690

Unearned revenue from telephone service 1,861 (5) - 1,856

Lease liabilities - current portion - - 4,454 4,454

Lease liabilities - net of current portion - - 20,103 20,103

Other non-current liabilities 295 - (290) 5


Equity attributable to owners of the Company 24,920 439 (393) 24,966

Income statement

Revenue from telephone services 64,213 (880) - 63,333

Revenue from sales of telephone sets and starter kits 7,799 830 - 8,629

Other operating income 10,137 - (931) 9,206

Other income 36 - - 36

Cost of sales and services (57,294) - 1,180 (56,114)

Selling, distribution and services expenses (4,689) (59) 31 (4,717)

Administrative and other expenses (10,627) - (86) (10,713)

Finance costs (2,584) - (685) (3,269)

Income tax expense (1,089) 22 98 (969)

Profit for the year 5,902 (87) (393) 5,422

Attributable to:

Profit attributable to equity holders of the Company 5,902 (87) (393) 5,422

Profit attributable to non-controlling interests - - - -

Earnings per share (Baht):

Basic earnings per share 2.49 (0.03) (0.17) 2.29

162


Separate financial statements


Increase (decrease)


Statement of financial position

Assets

Other current assets 348 - (48) 300

Property, plant and equipment 2,121 - (133) 1,988

Right-of-use assets - - 803 803

Deferred tax assets 4,581 - 2 4,583

Other non-current assets 1,808 - (1) 1,807

Liabilities

Lease liabilities - current portion - - 446 446

Lease liabilities - net of current portion - - 272 272

Other non-current liabilities 88 - (87) 1


Equity attributable to owners of the Company 19,087 - (8) 19,079

Income statement

Revenue from telephone services 4,332 - - 4,332

Revenue from sales of telephone sets and starter kits 91 - - 91

Other operating income 14,499 - - 14,499

Other income 3,222 - - 3,222

Cost of sales and services (2,540) - 5 (2,535)

Selling, distribution and services expenses (2,223) - 6 (2,217)

Administrative and other expenses (6,817) - 3 (6,814)

Finance costs (19) - (24) (43)

Income tax expense (1,472) - 2 (1,470)

Profit for the year 9,073 - (8) 9,065

Attributable to:

Profit attributable to equity holders of the Company 9,073 - (8) 9,065

Earnings per share (Baht):

Basic earnings per share 3.83 - - 3.83

163


The nature of these adjustments are described below:

TFRS 15

• Revenue allocation of sales of goods and services - The Company and its subsidiaries consider the income component of the sale of products and services, by allocating revenues in proportion to the delivered products and the obligations to be performed in providing services that are included in the contract using the basis of standalone selling prices of different products or services as obligated in the contract.

• Commission paid to obtain a contract - The Company and its subsidiaries have determined that commission paid to obtain a customer contract should be recorded as an asset and amortised to expenses at the same time as the revenue under the contract is recognised.

TFRS 16

• Leases previously accounted for as operating leases - The Company and its subsidiaries recognised right-of-use assets and lease liabilities for those leases previously classified as operating leases, except for short-term leases (those leases that have a lease term of 12 months or less from the commencement date and not contain a purchase option) and leases of low-value assets. Lease liabilities were recognised based on the present value of the remaining lease payments, discounted using the incremental borrowing rate at the date of initial application. The right-of-use assets were recognised base on the amount equal to the lease liabilities, adjusted for any related prepaid and accrued lease payments previously recognised. The right-of-use assets include the assets retirement obligation which were reclassified from the property, plant and equipment to this right-of-use assets.

• Cost of spectrum licenses - The Company and its subsidiaries have determined to apply TFRS16 on cost of spectrum licenses under the specified frequency bands, which have been allocated for the Company and its subsidiaries’ operations and has been considered as identified assets, by reclassify the cost of spectrum licenses to right-of-use assets - cost of spectrum licenses.

The lease liabilities as at 1 January 2019 can be reconciled to the operating lease commitments disclosed applying TAS 17 as of 31 December 2018, as follows:


Consolidated financial

statements

Separate financial

statement

Operating lease commitments as at 31 December 2018 3,526 707

Adjusted for:

Commitments relating to short-term leases and leases of low-value assets (161) (7)

Net 3,365 700

Weighted average incremental borrowing rate as at 1 January 2019 3.53% 2.82%

Discounted adjusted operating lease commitments as at 1 January 2019 2,761 643

Commitment relating to space on cell site and other lease arrangement 14,797 119

Renewal option reasonably certain to be exercised 10,048 290

Lease liabilities as at 1 January 2019 27,606 1,052

164

5. Significant accounting policies

5.1 Revenue recognition

Unearned revenue from telephone service of prepaid system (Prepaid)

Unearned revenue from telephone service of prepaid system represents the unused portion of the face value of prepaid phone cards. It is deferred and recognized based on the actual usage or the expiration of the usage as stated on cards, depending on which comes first.

Unearned revenue from postpaid service (Postpaid)

Unearned revenue from telephone service of postpaid system represents the unused portion of monthly airtime fee that subscribers can carry forward to the next period.

Revenue from telephone services

Revenue from voice services

Revenue from voice services, including domestic calls, international calls and roaming service calls, is recognised when the telephone services have been rendered.

Revenue from international data transit and internet service

Revenue from international data transit and internet service are recognised on an accrual basis over the service period and the rates agreed by counterparties.

Discounts are often provided in the form of cash discounts, free products or free services. Discounts are recorded systematically throughout the period the discounts are earned. Cash discounts and free products are recorded as revenue reductions.

As for discount schemes (such as loyalty programs, etc.), the accrued discounts must not be higher than estimated discounts, based on past liable discount estimation. The exact amount and income period of the discount are estimated with estimation techniques and reconciled in the period where there is an adjustment to estimation or the final outcome is known.

Cost to obtain a contract

The Company and its subsidiaries recognise commission paid to obtain a customer contract as an asset and amortised to expenses on a systematic basis according to the estimation of benefit period receive from the customer based on the Company and its subsidiaries’ past experience in relating to customer retention, which is consistent with the pattern of revenue recognition. An impairment loss is recognised to the extent that the carrying amount of an asset recognised exceeds the remaining amount of consideration that the entity expects to receive less direct costs. Provided that the amortisation period of the asset that the Company and its subsidiaries otherwise would have used is one year or less, costs to obtain a contract are immediately recognised as expenses.

Interconnection charge revenues and costs

Interconnection charge revenues derived from the other licensed operators for incoming calls from these operators’ networks is recognised on an accrual basis at the rates stipulated in the agreements.

Costs of interconnection charges paid to the other licensed operators for outgoing calls to these operators’ networks are recoginsed on an accrual basis at the rates stipulated in the agreements.

Revenue from sales of telephone sets and starter kits

Sales of goods are recognised at the point in time when control of the asset is transferred to the customer. Sales are the invoiced value, excluding value added tax, of goods supplied after deducting discounts and allowances.

Revenue arrangements with multiple deliverables are allocated between the element in proportion to the delivered products and the obligations to be performed in providing services that are included in the contract using the basis of standalone selling prices of different products or services as obligated in the contract.

The recognised revenue which is not yet due per the contracts has been presented under the caption of “Contract asset” in the statement of financial position. The amounts recognised as contract assets are reclassified to other receivables when the Company’s and its subsidiaries’ right to consideration is unconditional.

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The obligation to provide to a customer for which the Company and its subsidiaries have received from the customer is presented under the caption of “Contract liability” in the statement of financial position. Contract liabilities are recognised as revenue when the Company and its subsidiaries perform under the contract.

Revenue from Reference Access Offer

Revenue from Reference Access Offer derived from other operators in compensation of the utilisation of the Company’s and subsidiaries’ network elements is recognised on an accrual basis at the rates stipulated in the agreements.

Revenue from Reference Infrastructure Sharing

Revenue from Reference Infrastructure Sharing derived from other mobile operators in compensation of the utilisation of the Company’s and its subsidiaries’ telecommunication infrastructure is recognised on an accrual basis at the rates stipulated in the agreements.

Other operating income

Other operating income are recognised when the economic benefit flows to the entity and the earnings process is complete. Revenues are shown excluding of value added tax.

Interest income

Interest income is recognised on an accrual basis based on the effective interest rate.

Dividends

Dividends are recognised when the right to receive the dividends is established.

5.2 Cash and cash equivalents

Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid investments with an original maturity of three months or less and not subject to withdrawal restrictions.

5.3 Trade receivables and allowance for doubtful accounts

Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experiences and analysis of debt aging.

5.4 Inventories

Inventories are finished goods valued at the lower of cost (under the weighted average method) and net realisable value.

5.5 Investments

a) Investment in associate is accounted for in the consolidated financial statements using the equity method.

b) Investments in subsidiaries and associate are accounted for, in the separate financial statements, using the cost method net of allowance for impairment loss (if any).

c) Other long-term investments in non-marketable equity securities are stated at cost net of allowance for impairment loss (if any).

The weighted average method is used for computation of the cost of investments.

5.6 Property, plant and equipment/depreciation

Land is stated at cost. Buildings and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of assets (if any). The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to working condition for its intended use. Expenditures for additions, improvements and renewals are capitalised, while expenditures for maintenance and repairs are charged to profit or loss.

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Depreciation of buildings and equipment is calculated by reference to their costs on a straight-line basis over the following estimated useful lives:

Buildings and office improvements 5 - 20 yearsLeasehold improvements 3 - 12 yearsEquipment for mobile telecommunication services operation 3 - 15 years, the remaining of concession periodTelephone transmission station improvements 20 yearsFurniture, fixtures and office equipment 5 yearsMachinery and equipment 3 years and 5 yearsAdvertising and communication equipment 2 - 5 yearsOthers 5 years

Depreciation is included in determining income.

No depreciation is provided for land, building in progress, work in progress and equipment under installation.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on disposal of an asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss when the asset is derecognised.

5.7 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

5.8 Leases

At inception of contact, the Company and its subsidiaries assess whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The Company and its subsidiaries assess the lease term for the non-cancellable period as stipulated in lease contract or the remaining period of active leases at the date of initial application (1 January 2019) together with any period covered by an option to extend the lease if it is reasonably certain to be exercised or any periods covered by an option to terminate the lease if it is reasonably certain not to be exercise by considering the effect of changes in technology and/or the other circumstance relating to the extension of the lease term.

Group as a lessee

Right-of-use assets

Right-of-use assets are recognised at the commencement date of the lease. Right-of-use assets are stated at cost, less any accumulated deprecistion and impairment losses (if any), and adjusted for any remeasurement of lease liabilities (if any). The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date, less any lease incentives received.

The cost of right-of-use assets also includes an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

Right-of-use assets are calculated by reference to their costs on a straight-line basis over the shorter of the lease term and the estimated useful lives for each of right-of-use assets, as follows:

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Land for tower 3 years, plus renewal option reasonably certain to be exercised

Space on tower under CAT agreement 8 yearsOffice buildings 3 yearsCustomer service center 3 years, plus renewal option reasonably

certain to be exercisedVehicle 2-3 yearsSpace on towers under infrastructure sharing and access offer 3 years, plus renewal option reasonably

certain to be exercised

Right-of-use assets - cost of spectrum licenses

The Company and its subsidiaries have chosen to apply TFRS 16 on cost of spectrum licenses which was earlier accounted for under IAS 38 intangible assets.

Right-of-use assets - cost of each spectrum license for International Mobile Telecommunication in the Frequency Band 2.1 GHz, 1800 MHz and 900 MHz was capitalised, with its value measured at the cash equivalent price based on the present value of the installments. The difference between the total payment to be made and the cash equivalent price is recognised as a finance cost over the license fee payment period, with the cost being amortised from the time the Company and the subsidiary is ready to provide commercial service.

Depreciation is calculated by reference to cost on a straight-line basis over the term of the license.

Lease liabilities

At the commencement date of the lease, lease liabilities are stated at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable (if any) and amount expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and its subsidiaries and payments of penalties for terminating the lease, if the lease term reflects the Company and its subsidiaries exercising the option to terminate.

In calculating the present value of lease payments, the Company and its subsidiaries uses its incremental borrowing rate, which is determined by referring to the government bond yield adjusted with risk premium depending on the lease term, at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of the interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments or a change in the assessment of an option to purchase the underlying asset.

Short-term leases and leases of low-value assets

The Company and its subsidiaries apply the short-term lease recognition exemption to its short-term leases (those leases that have a lease term of 12 months or less from the commencement date and not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases that are considered of low value. Lease payments on short-term and leases of low-value assets are recognised as expense in profit and loss on a straight-line basis over the lease term.

Group as a lessor

The Company and its subsidiaries classify each of its leases as either a finance lease or an operating lease.

To classify each lease, the Company and its subsidiaries make an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Company and its subsidiaries consider certain indicators such as whether the lease is for the major part of the economic life of the asset.

The Company and its subsidiaries recognize lease payments received under operating leases as income on a straight-line basis over the lease term.

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Sub lease

When the Company and its subsidiaries is an intermediate lessor, it accounts for its interests in the head lease and sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to underlying asset. If a head lease is a short-term lease to which the Company and its subsidiaries apply the exemption described in “Short-term leases and leases of low-value asset, then it classifies the sub-lease as an operating lease.

The Company and its subsidiaries as an intermediate lessor accounts for the sublease as follow:

(i) If the sublease is classified as an operating lease, the Company and its subsidiaries continue to account for the lease liability and right-of-use asset on the head lease like any other lease; or

(ii) If the sublease is classified as a finance lease, the Company and its subsidiaries derecognise the right-of-use asset on the head lease at the sublease commencement date and continue to account for the original lease liability in the head lease.

5.9 Intangible assets and amortisation

Intangible assets acquired through business combinations are initially recognised at their fair value on the date of business acquisition. Intangible assets acquired in other cases are recognised at cost.

Following the initial recognition, the intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses (if any).

Intangible assets with finite lives are amortised on a systematic basis over the economic useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation expense is charged to profit or loss.

Amortisation is calculated by reference to cost on a straight-line basis over the expected future period of economic benefit of each type of intangible asset.

5.10 Related party transactions

Related parties comprise individuals or enterprises that control, or are controlled by, the Company, whether directly or indirectly, or which are under common control with the Company.

They also include associated companies and individuals or enterprises which directly or indirectly own a voting interest in the Company that gives them significant influence over the Company, key management personnel, directors, and officers with authority in the planning and direction of the Company’s operations.

5.11 Impairment of assets

At the end of each reporting period, the Company and its subsidiaries perform impairment reviews in respect of the property, plant and equipment, right-of-use assets - cost of spectrum licenses, other related right-of-use assets and other intangible assets whenever events or changes in circumstances indicate that an asset may be impaired. An impairment loss is recognised when the recoverable amount of an asset, which is the higher of the asset’s fair value less costs to sell and its value in use, is less than the carrying amount. In determining value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by a valuation model that, based on information available, reflects the amount that the Company and its subsidiaries could obtain from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal.

An impairment loss is recognised in profit or loss.

In the assessment of asset impairment if there is any indication that previously recognised impairment losses may no longer exist or may have decreased, the Company and its subsidiaries estimates the asset’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The increased carrying amount of the asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss.

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5.12 Income tax

Income tax expense represents the sum of corporate income tax currently payable and deferred tax.

Current tax

Current income tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based on taxable profits determined in accordance with tax legislation.

Deferred tax

Deferred income tax is provided on temporary differences between the tax bases of assets and liabilities and their carrying amounts at the end of each reporting period, using the tax rates enacted at the end of the reporting period.

The Company and its subsidiaries recognise deferred tax liabilities for all taxable temporary differences while they recognise deferred tax assets for all deductible temporary differences and tax losses carried forward to the extent that it is probable that future taxable profit will be available against which such deductible temporary differences and tax losses carried forward can be utilised.

At each reporting date, the Company and its subsidiaries review and reduce the carrying amount of deferred tax assets to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.

The Company and its subsidiaries record deferred tax directly to shareholders’ equity if the tax relates to items that are recorded directly to shareholders’ equity.

5.13 Employee benefits

Short-term employee benefits

Salaries, wages, bonuses and contributions to the social security fund are recognised as expenses when incurred.

Post-employment benefits

Defined contribution plans

The Company and its subsidiaries and their employees have jointly established a provident fund. The fund is monthly contributed by employees and by the Company and its subsidiaries. The fund’s assets are held in a separate trust fund and the Company and its subsidiaries’ contributions are recognised as expenses when incurred.

Defined benefit plans

The Company and its subsidiaries have obligations in respect of the severance payments it must make to employees upon retirement under labor law. The Company and its subsidiaries treat these severance payment obligations as a defined benefit plan.

The obligation under the defined benefit plan is determined by a professionally qualified independent actuary based on actuarial techniques, using the projected unit credit method.

Actuarial gains and losses arising from defined benefits plans are recognised immediately in other comprehensive income.

Past service costs are recognized in profit or loss on the earlier of the date of the plan amendment or curtailment and the date that the Company recognizes restructuring-related costs.

5.14 Foreign currencies

The consolidated and separate financial statements are presented in Baht, which is also the Company and subsidiaries’ functional currency.

Transactions in foreign currencies are translated into Baht at the exchange rates applying at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rates applying at the end of reporting period. Gains and losses on exchange are included in determining income.

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5.15 Derivative instrument

Forward exchange contracts

Receivables and payables arising from forward exchange contracts are translated into Baht at the rates of exchange ruling at the end of reporting period. Unrealise gains and losses from the translation are included in determining income. Premiums or discounts on forward exchange contracts are amortised on a straight-line basis over the contract periods.

Interest rate swap contracts

The net amount of interest to be received from or paid to the counterparty under the interest rate swap contracts is recognised as income or expenses on an accrual basis.

5.16 Provisions

Provisions are recognised when the Company and its subsidiaries have a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

5.17 Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between buyer and seller (market participants) at the measurement date. The Company and its subsidiaries apply a quoted market price in an active market to measure their assets and liabilities that are required to be measured at fair value by relevant financial reporting standards. Except in case of no active market of an identical asset or liability or when a quoted market price is not available, the Company and its subsidiaries measure fair value using valuation technique that are appropriate in the circumstances and maximises the use of relevant observable inputs related to assets and liabilities that are required to be measured at fair value.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy into three levels based on categorise of input to be used in fair value measurement as follows:

Level 1 - Use of quoted market prices in an observable active market for such assets or liabilities Level 2 - Use of other observable inputs for such assets or liabilities, whether directly or indirectlyLevel 3 - Use of unobservable inputs such as estimates of future cash flows

At the end of each reporting period, the Company and its subsidiaries determine whether transfers have occurred between levels within the fair value hierarchy for assets and liabilities held at the end of the reporting period that are measured at fair value on a recurring basis.

6. Significant accounting judgments and estimates

The preparation of financial statements in conformity with financial reporting standards at times requires management to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgments and estimates affect reported amounts and disclosures and actual results could differ. Significant judgments and estimates are as follow:

Revenue from contracts with customers

Identification of performance obligations

In identifying performance obligations, the management is required to use judgement regarding whether each promise to deliver goods or services is considered distinct, taking into consideration terms and conditions of the arrangement. In other words, if a good or service is separately identifiable from other promises in the contract and if the customer can benefit from it, it is accounted for separately.

Determination of timing of revenue recognition

In determining the timing of revenue recognition, the management is required to use judgement regarding whether performance obligations are satisfied over time or at a point in time, taking into consideration terms and conditions of the arrangement. The Company and its subsidiaries recognise revenue over time in the following circumstances:

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• the customer simultaneously receives and consumes the benefits provided by the entity’s performance as the entity performs

• the entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or

• the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date

Where the above criteria are not met, revenue is recognised at a point in time. Where revenue is recognised at a point in time, the management is required to determine when the performance obligation under the contract is satisfied.

Costs to obtain contracts

The recognition of costs incurred to obtain a contract as an asset requires management to use judgement regarding whether such costs are the incremental costs of obtaining a contract with a customer as well as what amortisation method should be used.

Recognition and derecognition of assets and liabilities

In considering whether to recognise or to derecognise assets or liabilities, the management is required to make judgment on whether significant risk and rewards of those assets or liabilities have been transferred, based on their best knowledge of the current events and assessments.

Determining the lease term of contracts with renewal and termination options

The Company and its subsidiaries determine the lease term as the non-cancellable term of the lease, together with any period covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The management is required to use judgment in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease, considering all relevant factors that create an economic incentive to exercise either the renewal or termination. After the commencement date, the Company and its subsidiaries reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate.

Allowance for doubtful accounts

Allowances for doubtful accounts are intended to adjust the value of receivables for probable credit losses. The management uses judgment to establish reserves for estimated losses for each outstanding debtor. The allowances for doubtful accounts are determined through a combination of analysis of debt aging, collection experience, and taking into account change in the current economic conditions. However, the use of different estimates and assumptions could affect the amounts of allowances for receivable losses and adjustments to the allowances may therefore be required in the future.

Depreciation of property, plant and equipment and right-of-use assets and amortisation of intangible assets

In determining depreciation of plant and equipment and right-of-use assets and amortisation of intangible assets, the management is required to make estimates of the useful lives and residual values (if any) and to review useful lives and residual values when there are any changes.

In addition, the property, plant and equipment, right-of-use assets and intangibles assets are subject to impairment if there is an indication they may be impaired, and impairment losses are recorded in the period when it is determined that their recoverable amount is lower than the carrying amount.

Indications include significant falls in the market value of assets or the future economic benefits of assets, significant changes in the overall business strategy impacting to the future utilization of assets, significant negative industry or economic trends, significant loss of market share, and significant unfavourable regulatory and court decisions that impact the business.

The impairment analysis of property, plant and equipment, right-of-use assets and intangible assets requires management to make subjective judgments concerning estimates of cash flows to be generated by the assets or the cash generating units and to choose a suitable discount rate in order to determine the present value of those cash flows. The cash flow estimates are based on currently available information about the operations and require management to make judgments regarding future market conditions and future revenues and expenses relevant to the assets or the cash generating units subject to the review. Events and factors that may significantly affect the estimates include, among others, competitive forces, changes in revenue growth trends, cost structures, changes in discount rates and specific industry or market sector conditions.

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Deferred tax assets

Deferred tax assets are recognised for temporary difference arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes as at the end of reporting period when it is highly probable that the Company and subsidiaries will generate sufficient taxable profits from their future operations to utilise these deferred tax assets. If management need to estimate the amounts of the deferred tax assets that the Company and its subsidiaries should recognise, they take into account the amount of taxable profit expected in each future period.

Post-employment benefits under defined benefit plans

The obligation under defined benefit plan is determined based on actuarial valuations. Inherent within these calculations are assumptions as to discount rates, future salary increases, mortality rates and other demographic factors. In determining the appropriate discount rate, management selects an interest rate that reflects the current economic situation. The mortality rate is based on publicly available mortality tables for the country. Actual post-retirement costs may ultimately differ from these estimates.

Fair value of financial instruments

In determining the fair value of financial instruments disclosed in the financial statements that are not actively traded and for which quoted market prices are not readily available, the management exercise judgment, using a variety of valuation techniques and models. The input to these models is taken from observable markets, and includes consideration of credit risk (bank and counterparty, both), liquidity, correlation and longer-term volatility of financial instruments. Changes in assumptions about these factors could affect the fair value disclosed in the financial statements and disclosures of fair value hierarchy.

Assets retirement obligation

Provision for expenses to be incurred with respect to the retirement of networks located on lease area is set by using estimates of the present value of such expenses, based on the average of actual retirement expenses incurred in the past. Such provision is recorded as part of right-of-use assets and amortised over the estimated useful lives. However, the actual amounts incurred may differ from the estimated amounts.

Commercial disputes, litigation, conformity with rules/regulations in telecommunication industry and uncertainty in tax interpretation

The Company and its subsidiaries have contingent liabilities as a result of commercial disputes, litigations, claims arising from non-compliance with rules/regulations in the telecommunication industry, and uncertainty in tax interpretation.

The management used judgment to assess the effect of these matters and this involves evaluating the degree of probability that a loss will be incurred and the management’s ability to make a reasonable estimate of the amount of that loss. Changes in the factors used in management’s evaluation and unanticipated events may result in actual results differing from the estimates. However, if management believes that no significant loss will result, no related provision are recorded as at the end of reporting period.

7. Cash and cash equivalents



2019 2018 2019 2018

Cash 5,509 5,409 5,509 5,404

Bank deposits 8,522,876 14,084,857 4,568,382 7,128,357

Total 8,528,385 14,090,266 4,573,891 7,133,761

As at 31 December 2019, bank deposits in saving accounts and fixed deposits carried interests between 0.05 percent per annum and 1.00 percent per annum (2018: between 0.05 percent per annum and 1.00 percent per annum).

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8. Trade and other receivables




2019 2018 2019 2018

Trade receivables - related parties

Trade receivables - related parties 440,541 564,949 1,756,492 458,405

Less: Allowance for doubtful accounts (2,830) (5,101) (2,830) (2,830)

Total trade receivables - related parties, net 437,711 559,848 1,753,662 455,575

Trade receivables - unrelated parties

Trade receivables - telephone services 5,996,610 5,660,275 17,723 82,446

Trade receivables - international telephone roaming services 834,647 1,240,447 74,897 138,348

Trade receivables - sales of E-Refill telephone sets and starter kits 888,657 742,205 495,839 101,231

Trade receivables – others 2,749,876 1,218,116 7,670 67,261

Total 10,469,790 8,861,043 596,129 389,286

Less: Allowance for doubtful accounts (1,442,481) (1,672,642) (171,588) (188,508)

Total trade receivables - unrelated parties, Net 9,027,309 7,188,401 424,541 200,778

Total trade receivables - net 9,465,020 7,748,249 2,178,203 656,353

Other receivables

Other receivables - related parties 14,394 18,771 3,231,116 2,555,282

Others 324,910 78,979 35,462 1,986

Total 339,304 97,750 3,266,578 2,557,268

Less: Allowance for doubtful debts (13,188) (14,602) (13,188) (12,627)

Total other receivables, net 326,116 83,148 3,253,390 2,544,641

Total trade and other receivables - net 9,791,136 7,831,397 5,431,593 3,200,994

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The aging of the outstanding balances of trade receivables - related parties as at 31 December 2019 and 2018, based on due date, is as follows:




2019 2018 2019 2018

Aged on the basis of due dates

Not yet due 390,283 520,801 1,693,067 386,643

Past due

Up to 1 month 47,428 35,923 46,668 1,505

1 - 3 months - 2,899 - 804

3 - 6 months - - - -

Over 6 months 2,830 5,326 16,757 69,453

Total 440,541 564,949 1,756,492 458,405



The aging of the outstanding balances of trade receivables - telephone services as at 31 December 2019 and 2018, based on due date, is as follows:




2019 2018 2019 2018


Not yet due 3,618,602 3,339,193 - 9,553

Past due

Up to 1 month 864,252 752,487 - 2,770

1 - 3 months 394,912 333,348 - 7,222

3 - 6 months 403,966 360,001 - 7,226

Over 6 months 714,878 875,246 17,723 55,675

Total 5,996,610 5,660,275 17,723 82,446

Less: Allowance for doubtful accounts (1,246,827) (1,426,693) (17,719) (70,322)

Trade receivables - telephone services, net 4,749,783 4,233,582 4 12,124

The Company and its subsidiaries have set up allowance for doubtful accounts based on collection experience. The Company and its subsidiaries establishes the allowance for doubtful accounts at the period - end at a certain percentage of all accounts receivable - telephone services in each aging period on a progressive basis.

The aging of the outstanding balances of trade receivables - international telephone roaming services as at 31 December 2019 and 2018, based on due date, is as follows:

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2019 2018 2019 2018


Not yet due 677,685 980,490 17,813 98,064

Past due

Up to 1 month 13,050 28,186 - 7,564

1 - 3 months 20,119 65,689 - 5,413

3 - 6 months 16,446 125,368 - 5,723

Over 6 months 107,347 40,714 57,084 21,584

Total 834,647 1,240,447 74,897 138,348


Trade receivables - international telephone roaming services, net 737,752 1,203,049 17,389 116,622

The aging of the outstanding balances of trade receivables - sales of E-Refill, telephone sets and starter kits as at 31 December 2019 and 2018, based on due date, is as follows:




2019 2018 2019 2018


Not yet due 718,005 550,436 404,859 7,280

Past due

Up to 1 month 60,883 42,272 - 67

1 - 3 months 13,170 5,625 - 71

3 - 6 months 3,911 3,250 - 2,514

Over 6 months 92,688 140,622 90,980 91,299

Total 888,657 742,205 495,839 101,231


Trade receivables - sales of E-Refill, telephone sets and starter kits, net 794,323 601,604 403,318 8,616

The aging of the outstanding balances of trade receivables - others as at 31 December 2019 and 2018, based on due date, is as follows:

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2019 2018 2019 2018


Not yet due 2,716,669 1,069,768 3,269 31,247

Past due

Up to 1 month 4,228 12,294 561 12

1 - 3 months 2,407 16,153 - -

3 - 6 months 39 190 - -

Over 6 months 26,533 119,711 3,840 36,002

Total 2,749,876 1,218,116 7,670 67,261


Trade receivables - others, net 2,745,451 1,150,166 3,830 63,416

9. Related party transactions

During the years, the Company and its subsidiaries had significant business transactions with related parties. Such transactions, which are summarised below, arose in the ordinary course of businesses and were concluded on commercial terms and agreed upon between the Company and those related parties.

Transactions with associated company, subsidiaries and related companies




Transfer pricing policy

2019 2018 2019 2018

Transactions with subsidiaries (eliminated from the consolidated financial statements)

Sales of goods and equipment - - 1 4,045 at agreed price

Service income - - 14,526 24,110 as per agreement

Rental and service expenses - - 737 1,499 as per agreement

Interest income - - 150 292 as per agreement

Interest expense - - - 406 as per agreement

Dividend income - - 2,984 6,530 as declared

Purchase of goods - - 70 27 as agreed price

Sales of assets - - 417 8 as agreed price

Purchase of assets - - 583 104 as agreed price

Transactions with associated company: United Distribution Business Co., Ltd.*

Sales of goods 2,013 2,953 1,172 - selling price less a certain margin, as per agreement

177





Transfer pricing policy

2019 2018 2019 2018

Dividend income 5 - 5 - as declared

Rental and service expense 134 157 88 - as per agreement

Transactions with other related companies

International roaming service income 59 75 - 18 as per agreement

Service income 154 263 11 71 as per agreement

Sale on right of online refill service 133 179 83 - as per agreement

Service expenses 2,665 3,131 1,092 1,379 as per agreement

Service fees for installation of cell site equipment 1,858 3,022 - 68 as per agreement

* The Company paid marketing support expense for year ended 31 December 2019 at Baht 2 million (2018: Baht 3 million) to dealers through United Distribution Business Co., Ltd.

During the year 2018, the Company entered into additional agreement with its subsidiary on an annual basis in that the Company agreed to provide management services and the subsidiary has to pay the fees to the Company as stipulated in the agreement. The fee have already included in the disclosure of transaction with subsidiary above.

As at 31 December 2019 and 2018, the balances of the accounts between the Company and those related companies are as follows:




2019 2018 2019 2018

Trade and other receivables - related parties (Note 8)

Trade receivables - related parties

Subsidiaries - - 1,388,667 447,466

Associated company (Note 9.1) 360,016 474,428 345,636 (4)

Related companies(1) 80,525 90,521 22,189 10,943

Total 440,541 564,949 1,756,492 458,405



Other receivables - related parties

Subsidiaries - - 3,216,722 2,536,511

Related companies(1), (2) 14,394 18,771 14,394 18,771

Total 14,394 18,771 3,231,116 2,555,282


Total other receivables - related parties, net 1,206 6,143 3,217,928 2,542,655

Total trade and other receivables - related parties, net 438,917 565,991 4,971,590 2,998,230

178




2019 2018 2019 2018

Amounts due from related parties

Subsidiary (Note 9.2) - - - 217,366

Related companies(1), (2) - 26,539 - -

Total - 26,539 - 217,366

Less: Allowance for doubtful accounts - (26,343) - -

Total amounts due from related companies - net - 196 - 217,366

Loans to subsidiary

Subsidiary (Note 9.3) - - 10,500,000 10,000,000

Total loans to subsidiary - - 10,500,000 10,000,000

Trade and other payables - related parties (Note 18)

Trade payables - related parties

Subsidiaries - - 1,055,534 571,406

Associated company 15,630 26,730 15,245 1

Related companies(1), (2) 1,460,466 1,423,402 3,737 19,596

Total trade payables - related parties 1,476,096 1,450,132 1,074,516 591,003

Other payables - related parties

Subsidiaries - - 82,804 43,831

Associated company - 30 - 30

Related companies(1), (2) 229,419 160,564 226,698 157,646

Total other payables - related parties 229,419 160,594 309,502 201,507

Total trade and other payables - related parties 1,705,515 1,610,726 1,384,018 792,510

Relationship with the related companies

(1) Common ultimated shareholder

(2) Common directors

9.1 The aging of trade receivables - associated company as at 31 December 2019 and 2018 based on due date, is as follow:




2019 2018 2019 2018

Age of receivables

Not yet due 316,885 442,123 303,264 -

Past due less than 1 month 43,131 32,305 42,372 (4)

Trade account receivable - associated company 360,016 474,428 345,636 (4)

179


9.2 As at 31 December 2018, amount due from related party was amount due from TAC Property Co., Ltd. (a subsidiary), which arising from sales of equipment to support cellular telephone services. The Company already received the payment during the current year.

9.3 The loan of Baht 10,500 million (2018: Baht 10,000 million) to dtac TriNet (subsidiary) is to be used in making an application for a spectrum license and using for operation under such license which carries interest at an average rate of fixed deposits plus certain margin. Payment of the loans is due at call. However, the Company has no plan to call the loans within one year, and therefore classified them as non-current assets in the financial statements.

As at 31 December 2019 and 2018, the balance of loans between the Company and its subsidiary and the movement are as follows:



Loan to

Balance as at

1 January 2018

Increase during

the year

Decrease during

the year

Balance as at

31 December 2018

Subsidiary

dtac TriNet Co., Ltd. 10,000,000 6,000,000 (5,500,000) 10,500,000

10,000,000 6,000,000 (5,500,000) 10,500,000

9.4 Directors and management’s benefits

During the years ended 31 December 2019 and 2018, the Company and its subsidiaries had employee benefit expenses of their directors and management as below.


Consolidated / Separate financial statements

2019 2018

Short-term employee benefits 95,077 94,385

Post-employment benefits and other long-terms benefits 2,347 2,914

Total 97,424 97,299

10. Inventories



Cost Reduce cost to net realisable value Inventories - net

2019 2018 2019 2018 2019 2018

Finished goods 1,146,481 2,174,700 (58,647) (46,293) 1,087,834 2,128,407

Total 1,146,481 2,174,700 (58,647) (46,293) 1,087,834 2,128,407

180



Cost Reduce cost to net realisable value Inventories - net

2019 2018 2019 2018 2019 2018

Finished goods 20,580 9,083 (69) (6,070) 20,511 3,013

Total 20,580 9,083 (69) (6,070) 20,511 3,013

During the current year, the Company and its subsidiary reduced cost of inventories by Baht 130 million (2018: Baht 333 million) (The Company only: Nil, 2018: Nil), to reflect the net realisable value. This was presented as cost of sales. In addition, the Company reversed the write-down of cost of inventories by Baht 117 million (2018: Baht 610 million) (The Company only: Baht 6 million, 2018: Baht 313 million), and reduced the amount of inventories recognised as expenses during the year.

11. Other current assets




2019 2018 2019 2018

Value added tax suspension 1,620,048 2,567,518 185,635 695,428

Prepaid expenses and deferred expenses 1,005,051 1,082,419 114,448 130,199

Prepaid rental - land for cell sites - 827,074 - 16,930

Cost to obtain contracts - current portion 180,964 - - -

Others 927 1,187 68 264

Total 2,806,990 4,478,198 300,151 842,821

Less: Provision for impairment of assets - (11,220) - -

Total other current assets - net 2,806,990 4,466,978 300,151 842,821

12. Investments in associated company

12.1 Details of associate:



Company’s name Nature of business

Country of incorporation

Shareholding percentage Cost

Carrying amounts based

on equity method

2019 Percent

2018 Percent

2019 2018 2019 2018

United Distribution Business Co., Ltd.

Sale of simcards, voucher cards and supplementary equipment

Thailand 25 25 50,000 50,000 250,149 263,980

181




Company’s name

Nature of business

Country of incorporation

Shareholding percentage

CostAllowance for impairment of investments

Carrying amounts

basedon cost method - net

2019 Percent

2018 Percent

2019 2018 2019 2018 2019 2018

United Distribution Business Co., Ltd.

Sale of simcards, voucher cards and supplementary equipment

Thailand 25 25 50,000 50,000 - - 50,000 50,000

12.2 Share of loss and dividend received

During the year, the Company has recognised its share of loss from investment in associate company in the consolidated financial statements and dividend income in the separate financial statements as follows:




Company’s name Share of loss from investments in associate during the year Dividend received during the year

2019 2018 2019 2018

United Distribution Business Co., Ltd. (8,831) (12,148) 5,000 -

12.3 Summarised financial information of associate

Financial information that base on management’s account of the associated company is summarised below.


Company’s name

Paid-up capital as at

31 December

Total assets as at

31 December

Total liabilities as at 31 December

Total revenues for the years

ended 31 December

Loss for the years

ended 31 December

2019 2018 2019 2018 2019 2018 2019 2018 2019 2018

United Distribution Business Co., Ltd. 200 200 1,403 1,579 403 522 178 243 (35) (44)

182

13.

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in su

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1,270

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183


a) As stipulated under the Master Sale and Purchase Agreement dated 26 February 2006, UCOM has the right to claim any amount to which UCOM becomes liable in respect of the former operations from the purchaser company. All contingent liabilities (if any) are thus transferred to the purchaser company, with no limit on their amount, within two years from the asset transfer date, or until UCOM’s obligations and responsibilities end.

On 26 July 2017, the Extraordinary General Meeting of the UCOM’s shareholders No. 1/2017 passed a resolution to approve the dissolution. UCOM registered its dissolution with the Ministry of Commerce on 31 July 2017. During the current year, the Company had already received the capital return at the rate of Baht 0.6451 per share on 2 December 2019.

b) As discussed in Note 1.4 to the consolidated financial statements, the Company entered into an agreement to transfer the entire business of DTAC Broadband Co., Ltd. and Eastern Beach Co., Ltd. on 12 December 2018. Such transfer of business includes the transfer of all assets and liabilities as at 1 January 2019.

In addition, the Extraordinary General Meeting of the shareholders No.1/2019 of Paysbay Co., Ltd. (“subsidiary”) and the 2019 Annual General Meeting of the Company’s shareholders passed a resolution to transfer the entire business of subsidiary to the Company. Such transfer of business includes the transfer of all assets and liabilities at the net book value as at 1 June 2019.

c) During the year 2019, the Extraordinary General Meeting of the shareholders of the subsidiaries passed a resolution to approve the dissolution of the companies and the subsidiaries registered their dissolution with the Ministry of Commerce as follows:

Company’s name Approved by Dissolution registered date

Eastern Beach Co., Ltd. Extraordinary General Meeting of shareholders on 25 January 2019

31 January 2019

dtac Digital Media Co., Ltd. Extraordinary General Meeting of shareholders on 25 January 2019

31 January 2019

dtac Service Co., Ltd. Extraordinary General Meeting of shareholders on 25 January 2019

31 January 2019

dtac Next Co., Ltd. Extraordinary General Meeting of shareholders on 25 January 2019

31 January 2019

DTAC Broadband Co., Ltd. Extraordinary General Meeting of shareholders on 25 February 2019

27 February 2019

Paysbay Co., Ltd. Extraordinary General Meeting of shareholders on 30 August 2019

3 September 2019

At present, dtac Service Co., Ltd. and dtac Next Co., Ltd. were dissolved and liquidated and Eastern Beach Co., Ltd., dtac Digital Media Co., Ltd., DTAC Broadband Co., Ltd., and Paysbay Co., Ltd. are in the process of liquidation.

184

14.

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185

Notes to consolidated financial statements. Annual Report 2019Co

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1 Jan

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83,8

73Al

low

ance

for i

mpa

irmen

t los

s31

Dec

embe

r 201

83,

000

--

--

--

--

82,9

7585

,975

1 Jan

uary

201

93,

000

--

--

--

--

82,9

7585

,975

31 D

ecem

ber 2

019

3,00

0-

--

--

--

-82

,975

85,9

75N

et b

ook

valu

e31

Dec

embe

r 201

898

6,55

627

4,16

558

0,31

349

,126,

167

11,6

5660

,196

534,

704

68,0

472,

206,

251

5,87

453

,853

,929

1 Jan

uary

201

998

6,55

627

4,16

549

2,31

748

,122,

052

11,6

5660

,196

534,

704

68,0

472,

206,

251

5,87

452

,761

,818

31 D

ecem

ber 2

019

988,

832

235,

374

455,

173

49,2

35,9

057,

158

97,19

548

4,60

072

,096

2,31

6,46

41,5

8653

,894

,383

Depr

ecia

tion

incl

uded

in th

e in

com

e st

atem

ents

for t

he y

ears

2018

9,41

8,31

020

1910

,716

,630

As a

t 31 D

ecem

ber 2

019,

cer

tain

equ

ipm

ent i

tem

s of

the

Com

pany

and

its

subs

idia

ries

have

bee

n fu

lly d

epre

ciat

ed. T

he g

ross

car

ryin

g am

ount

(bef

ore

dedu

ctin

g ac

cum

ulat

ed d

epre

ciat

ion

and

allo

wan

ce fo

r im

pairm

ent l

oss)

of t

hose

ass

ets a

mou

nted

to B

aht 1

2,70

1 mill

ion

(201

8: B

aht 1

0,80

4 m

illio

n).

186

Sepa

rate

fina

ncia

l sta

tem

ents

(Uni

t: Th

ousa

nd B

aht)

Land

Build

ings

an

d

build

ing

im

prov

emen

t

Leas

ehol

d

impr

ovem

ent

Equi

pmen

t fo

r mob

ile

tele

com

mun

icat

ion

serv

ices

Tele

phon

e

base

d

stat

ion

im

prov

emen

t

Furn

iture

, fix

ture

s an

d of

fice

eq

uipm

ent

Mac

hine

ry

and

eq

uipm

ent

Adve

rtis

ing

an

d

com

mun

icat

ion

equi

pmen

t

Wor

k

in p

rogr

ess

Othe

rsTo

tal

Cost

1 Jan

uary

201

872

3,04

01,6

61,0

381,3

12,5

975,

136,

365

93,9

7969

0,43

85,

864,

484

131,2

2575

,915

157,

806

15,8

46,8

87

Purc

hase

s-

998

14,3

4112

,468

-25

849

66,

777

308,

509

985

344,

832

Disp

osal

s/w

ritte

n-of

f(1

4,26

0)(5

,931

)(1

54,3

51)

(380

,863

)-

(52,

644)

(9,0

41)

(56,

675)

(10,

624)

(13,

562)

(697

,951

)

Tran

sfer

red

in (o

ut)

-(5

,687

)12

3,85

7(2

,503

,495

)-

32,16

670

,056

309

(311

,919

)-

(2,5

94,7

13)

31 D

ecem

ber 2

018

708,

780

1,650

,418

1,296

,444

2,26

4,47

593

,979

670,

218

5,92

5,99

581

,636

61,8

8114

5,22

912

,899

,055

Accu

mul

ated

dep

reci

atio

n1 J

anua

ry 2

018

-1,3

46,3

1773

1,952

2,46

6,25

777

,613

637,

588

5,65

1,929

79,3

10-

66,7

9111

,057

,757

Depr

ecia

tion

for t

he y

ear

-35

,866

167,

865

322,

007

4,71

035

,938

150,

912

38,6

27-

4,80

976

0,73

4

Depr

ecia

tion

-

d

ispos

als/

writ

ten-

off

-(5

,931

)(1

34,6

33)

(374

,631

)-

(52,

165)

(8,6

22)

(55,

250)

-(1

2,73

2)(6

43,9

64)

Tran

sfer

out

--

-(6

91,3

99)

--

--

--

(691

,399

)

31 D

ecem

ber 2

018

-1,3

76,2

5276

5,18

41,7

22,2

3482

,323

621,3

615,

794,

219

62,6

87-

58,8

6810

,483

,128

Allo

wan

ce fo

r im

pairm

ent l

oss

1 Jan

uary

201

89,

230

--

1,409

,647

--

--

-82

,975

1,501

,852

Impa

irmen

t

tran

sfer

out

--

-(1

,229

,509

)-

--

--

-(1

,229

,509

)

Reve

rsal

of

im

pairm

ent

lo

ss fo

r the

yea

r(6

,230

)-

-(1

80,13

8)-

--

--

-(1

86,3

68)

31 D

ecem

ber 2

018

3,00

0-

--

--

--

-82

,975

85,9

75

Net

boo

k va

lue

31 D

ecem

ber 2

017

713,

810

314,

721

580,

645

1,260

,461

16,3

6652

,850

212,

555

51,9

1575

,915

8,04

03,

287,

278

31 D

ecem

ber 2

018

705,

780

274,

166

531,2

6054

2,24

111

,656

48,8

5713

1,776

18,9

4961

,881

3,38

62,

329,

952

Depr

ecia

tion

incl

uded

in th

e in

com

e st

atem

ents

for t

he y

ears

2017

964,

983

2018

760,

734

187


Sepa

rate

fina

ncia

l sta

tem

ents

(Uni

t: Th

ousa

nd B

aht)

Land

Build

ings

an

d

build

ing

im

prov

emen

t

Leas

ehol

d

impr

ovem

ent

Equi

pmen

t fo

r mob

ile

tele

com

mun

icat

ion

serv

ices

Tele

phon

e

base

d

stat

ion

im

prov

emen

t

Furn

iture

, fix

ture

s an

d of

fice

eq

uipm

ent

Mac

hine

ry

and

eq

uipm

ent

Adve

rtis

ing

an

d

com

mun

icat

ion

equi

pmen

t

Wor

k

in p

rogr

ess

Othe

rsTo

tal

Cost

31 D

ecem

ber 2

018

708,

780

1,650

,418

1,296

,444

2,26

4,47

593

,979

670,

218

5,92

5,99

581

,636

61,8

8114

5,22

912

,899

,055

Recl

assi

ficat

ion

to

right

-of-

use

ass

ets d

ue to

the

ado

ptio

n of

TFR

S 16

--

(118

,293

)(1

2,94

9)-

--

--

-(1

31,2

42)

1 Jan

uary

201

970

8,78

01,6

50,4

181,1

78,15

12,

251,5

2693

,979

670,

218

5,92

5,99

581

,636

61,8

8114

5,22

912

,767

,813

Purc

hase

s37

3,97

4-

2,97

617

6,29

5-

4,36

32,

675

4,26

482

,165

-64

6,71

2Di

spos

als/

writ

ten-

off

(524

)(1

)(5

52,5

60)

(193

,020

)-

(145

,437

)(1

67,12

8)(4

5,50

1)-

(2,5

60)

(1,10

6,73

1)

Recl

assi

ficat

ion

--

-(1

70,3

45)

-17

0,34

5-

--

--

Tran

sfer

red

in (o

ut)

-33

118

,568

19,8

75-

13,18

117

,967

12(6

9,93

9)5

-

31 D

ecem

ber 2

019

1,082

,230

1,650

,748

647,

135

2,08

4,33

193

,979

712,

670

5,77

9,50

940

,411

74,10

714

2,67

412

,307

,794

Accu

mul

ated

dep

reci

atio

n

31 D

ecem

ber 2

018

-1,3

76,2

5276

5,18

41,7

22,2

3482

,323

621,3

615,

794,

219

62,6

87-

58,8

6810

,483

,128

Recl

assi

ficat

ion

to ri

ght-

of-u

se

a

sset

s due

to th

e

a

dopt

ion

of

T

FRS

16-

-(3

2,99

6)-

--

--

--

(32,

996)

1 Jan

uary

201

9-

1,376

,252

732,

188

1,722

,234

82,3

2362

1,361

5,79

4,21

962

,687

-58

,868

10,4

50,13

2De

prec

iatio

n

fo

r the

yea

r-

39,12

291

,271

280,

752

4,49

819

,915

77,2

9313

,480

-2,

636

528,

967

Depr

ecia

tion

-

d

ispo

sals

/

writ

ten-

off

-(1

)(2

79,3

57)

(193

,019

)-

(74,

034)

(156

,075

)(4

0,49

0)-

(2,5

60)

(745

,536

)

Recl

assi

ficat

ion

--

-(1

20,3

75)

-12

0,37

5-

--

--

31 D

ecem

ber 2

019

-1,4

15,3

7354

4,10

21,6

89,5

9286

,821

687,

617

5,71

5,43

735

,677

-58

,944

10,2

33,5

63

188

(Uni

t: Th

ousa

nd B

aht)

Land

Build

ings

an

d

build

ing

im

prov

emen

t

Leas

ehol

d

impr

ovem

ent

Equi

pmen

t fo

r mob

ile

tele

com

mun

icat

ion

serv

ices

Tele

phon

e

base

d

stat

ion

im

prov

emen

t

Furn

iture

, fix

ture

s an

d of

fice

eq

uipm

ent

Mac

hine

ry

and

eq

uipm

ent

Adve

rtis

ing

an

d

com

mun

icat

ion

equi

pmen

t

Wor

k

in p

rogr

ess

Othe

rsTo

tal

Allo

wan

ce fo

r im

pairm

ent l

oss

31 D

ecem

ber 2

018

3,00

0-

--

--

--

-82

,975

85,9

75

1 Jan

uary

201

93,

000

--

--

--

--

82,9

7585

,975

31 D

ecem

ber 2

019

3,00

0-

--

--

--

-82

,975

85,9

75

Net

boo

k va

lue

31 D

ecem

ber 2

018

705,

780

274,

166

531,2

6054

2,24

111

,656

48,8

5713

1,776

18,9

4961

,881

3,38

62,

329,

952

1 Jan

uary

201

970

5,78

027

4,16

644

5,96

352

9,29

211

,656

48,8

5713

1,776

18,9

4961

,881

3,38

62,

231,7

06

31 D

ecem

ber 2

019

1,079

,230

235,

375

103,

033

394,

739

7,15

825

,053

64,0

724,

734

74,10

775

51,9

88,2

56

Depr

ecia

tion

incl

uded

in th

e in

com

e st

atem

ents

for t

he y

ears

2018

760,

734

2019

528,

967

As a

t 31 D

ecem

ber 2

019,

cert

ain

equi

pmen

t ite

ms o

f the

Com

pany

hav

e be

en fu

lly d

epre

ciat

ed. T

he g

ross

carr

ying

am

ount

(bef

ore

dedu

ctin

g ac

cum

ulat

ed d

epre

ciat

ion

and

allo

wan

ce fo

r im

pairm

ent

loss

) of t

hose

ass

ets a

mou

nted

to B

aht 8

,969

mill

ion

(201

8: B

aht 8

,502

mill

ion)

.

The

Com

pany

and

its s

ubsi

diar

y ev

alua

ted

impa

irmen

t of e

quip

men

t, in

clud

ing

right

-of-

use

asse

ts -

cos

t of s

pect

rum

lice

nses

as d

escr

ibed

in N

ote

15 to

the

cons

olid

ated

fina

ncia

l sta

tem

ent a

nd

the

othe

r rel

ated

righ

t-of

-use

ass

ets

as d

escr

ibed

in N

ote

22.1

to th

e co

nsol

idat

ed fi

nanc

ial s

tate

men

t, fo

r mob

ile te

leco

mm

unic

atio

n se

rvic

es o

f the

Com

pany

and

its

subs

idia

ries

by c

ompa

ring

the

carr

ying

am

ount

of t

he c

ash

gene

ratin

g un

it to

its r

ecov

erab

le a

mou

nt a

t bot

h th

e co

nsol

idat

ed a

nd se

para

ted

finan

cial

stat

emen

ts le

vels

. The

reco

vera

ble

amou

nts a

re th

e va

lue

in u

se w

hich

is

det

erm

ined

by

usin

g ca

sh fl

ow p

roje

ctio

ns a

ppro

ved

by th

e m

anag

emen

t bas

ed o

n th

e as

sum

ptio

ns b

y co

nsid

erin

g th

e sc

ope

of th

e sp

ectr

um li

cens

ing

and

tele

com

mun

icat

ion

busi

ness

lice

nse

perio

d of

the

subs

idia

ry, a

nd d

isco

unte

d to

thei

r pre

sent

val

ue u

sing

the

pre-

tax d

isco

unt r

ate

refle

ctin

g sp

ecifi

c ris

ks re

latin

g to

the

Grou

p.

189


15. Right-of-use assets - cost of spectrum licenses/cost of spectrum licenses

The net book value of right-of-use assets - cost of spectrum licenses as at 31 December 2019 are presented below.



As at 31 December 2019:

Cost 59,244,237

Less: Accumulated amortisation (9,009,273)

Net book value 50,234,964

The net book value of cost of spectrum licenses as at 31 December 2018 are presented below.




Cost 59,244,237

Less: Accumulated amortisation (5,025,019)

Net book value 54,219,218

A reconciliation of the net book value of right-of-use assets - cost of spectrum licenses/cost of spectrum licenses in consolidated financial statements for the years 2019 and 2018 are presented below.


Net book value at beginning of year 2018 8,921,036

Increase during the year 46,331,239

Amortisation (1,033,057)

Net book value at end of year 2018 - reclassify to right-of-use assets 54,219,218

Increase during the year -

Amortisation (3,984,254)

Net book value at end of year 2019 50,234,964

Right-of-use assets - cost of spectrum licenses are the cost in acquisition the licenses for operating telecommunication business for International Mobile Telecommunication (IMT) as described in Note 1.2 c), h) and i) to the consolidated financial statements.

190

16. Other intangible assets

The net book value of other intangible assets as at 31 December 2019 and 2018 are presented below.




Computer software

Software under

developmentTotal Computer

software

Software under

developmentTotal


Cost 14,065,723 339,232 14,404,955 10,101,685 30,319 10,132,004

Less: Accumulated amortisation (12,740,483) - (12,740,483) (9,840,745) - (9,840,745)

Net book value 1,325,240 339,232 1,664,472 260,940 30,319 291,259


Cost 13,086,906 325,062 13,411,968 9,912,245 62,721 9,974,966

Less: Accumulated amortisation (12,122,009) - (12,122,009) (9,745,439) - (9,745,439)

Net book value 964,897 325,062 1,289,959 166,806 62,721 229,527

A reconciliation of the net book value of other intangible assets for the years 2019 and 2018 are presented below.




2019 2018 2019 2018

Net book value at beginning of year 1,289,959 1,182,908 229,527 189,153

Reclassification to right-of-use assets due to the adoption of TFRS 16 (39,401) - (39,183) -

Acquisition of computer software 1,043,564 769,267 207,234 162,110

Amortisation (629,650) (662,462) (106,262) (121,736)

Transfer in - 246 - -

Loss from written-off of intangible assets - - (57) -

Net book value at end of year 1,664,472 1,289,959 291,259 229,527

191


17. Other non-current assets




2019 2018 2019 2018

Deferred underwriting fees / arrangement fees for loans and debentures - net 80,668 40,880 - -

Deposits 534,036 484,536 322,622 368,160

Leasehold rights - 15,003 - 13,998

Withholding tax deducted at source 2,122,603 1,914,319 1,483,922 1,910,096

Cost to obtain contracts - net of current portion 186,968 - - -

Others 607 344,822 607 531

Total other non-current assets 2,924,882 2,799,560 1,807,151 2,292,785

• As at 31 December 2019, the Company and its subsidiaries were in the process of requesting the refund of withholding tax deducted at source amounting to Baht 864 million (The Company only: Baht 860 million) (2018: Baht 1,050 million (the Company only: Baht 1,050 million)) from the Revenue Department. The recoverability of the amount depended upon the results of a tax audit.

• During the year, the Company’s subsidiary had addition cost to obtain contracts totaling Baht 156.6 million and amortised as expense totaling Baht 215.1 million.

18. Trade and other payables




2019 2018 2019 2018

Trade payables for the purchase of equipment for providing telephone services, telephone sets and starter kits 6,263,346 11,782,447 47,933 41,747

Trade payables - related parties (Note 9) 1,476,096 1,450,132 1,074,516 591,003

Trade payable – CAT* 5,694,953 14,674,067 4,960,210 14,128,883

Trade payable - TOT 4,839,355 2,497,470 1,249,318 1,249,343

Accrued license fees 2,210,633 2,195,266 132,270 -

Trade payables - interconnection charge 55,811 44,451 - 6,592

Trade payables - international telephone roaming services 390,491 610,120 113,158 213,585

Other trade payables 741,497 1,522,533 229,869 829,935

Other payables - related parties (Note 9) 229,419 160,594 309,502 201,507

Other payables 1,387,728 1,026,013 486,540 621,584

Accrued expenses 3,034,684 3,603,556 1,926,812 2,191,362

Interest payables 366,303 332,831 - -

Total trade and other payables 26,690,316 39,899,480 10,530,128 20,075,541

* Trade payable – CAT had included the expenses under the Disputes Settlement Agreement and such amounts have been paid during 2019.

192

19. Long-term loans




2019 2018 2019 2018

The subsidiary’s loan facilities from local financial institutions 16,000,000 17,500,000 - -

Less: Current portion (12,000,000) (7,875,000) - -

Long-term loans - net of current portion 4,000,000 9,625,000 - -

The movement of subsidiary’s long-term loans are as follows:



Balance as at 31 December 2018

Increase during The year

Decrease during the year

Balance as at 31 December 2019

The subsidiary’s loan facilities from local financial institutions 17,500 38,000 (39,500) 16,000

17,500 38,000 (39,500) 16,000

Subsidiary’s long-term loans

1) In November 2015, one subsidiary entered into Facility Agreements with the financial institutions. The principal terms of these facilities are:

Facilities : Baht 69,000 million

Interest rate : BIBOR plus a margin (the margin depending on certain conditions as stipulated in the agreement)

Interest period : Every month, every three months or every six months depending on conditions in the agreements

Principal repayment schedules : As per conditions specified in the agreements

As at 31 December 2019 and 2018, the Company was unable to drawdown additional credit facilities because the Facility Agreements expired.

2) In December 2018, the subsidiary entered into additional Facilities Agreements (revolving facilities) for 3 years availability period with financial institutions. The principal terms of these facilities are:

Facilities : Baht 21,000 million

Interest rate : BIBOR plus a margin (the margin depending on certain conditions as stipulated in each agreement)

Interest period : One month, three months, or six months depending on certain conditions in the agreements

Principal repayment schedule : The last day of each interest payment period

Right to renew the contract : The subsidiary has a right to extend the availability period with the same conditions as considered by financial institution

193


3) In December 2019, the subsidiary entered into Facility Agreement with the financial institution. The principal terms of the facility are:

Facility : Baht 15,000 million

Interest rate : BIBOR plus a margin (the margin depending on certain conditions as stipulated in the agreement)

Interest period : Every three months or every six months depending on conditions in the agreements

Principal repayment schedules : As per conditions specified in the agreements

The above credit facilities agreements contain covenants relating to various matters, such as the maintenance of financial ratio, restrictions on creating or permitting the subsistence of security interest on property and assets, a prohibition on making loans or granting guarantees except under certain conditions.

As at 31 December 2019, the subsidiary has the credit facilities, which have not yet been drawn down, amounted to Baht 26,000 million (2018: Baht 21,000 million).

20. Debentures




2019 2018 2019 2018

Thai Baht debentures 33,000 29,500 - -

Less: Current portion (4,000) (1,500) - -

Thai Baht debentures - net of current portion 29,000 28,000 - -

The movements of debentures for the year ended 31 December 2019 are as follows:


Interest rate (per annum)

TenorBalance

as at 1 January 2019

Addition: debentures

issued

Less: debentures repayment

Balance as at

31 December 2019

Subsidiary

Debentures of Baht 4,000 million (issued on 29 July 2015) 2.92 5 years 4,000 - - 4,000



Debentures of Baht 1,500 million (issued on 22 July 2016) 1.98 3 years 1,500 - (1,500) -



194


Interest rate (per annum)

TenorBalance

as at 1 January 2019

Addition: debentures

issued

Less: debentures repayment

Balance as at

31 December 2019


Debentures of Baht 500 million (issued on 28 April 2017) 3.65 7 years 500 - - 500

Debentures of Baht 5,000 million (issued on 28 April 2017) 4.04 10 years 5,000 - - 5,000

Debentures of Baht 1,500 million (issued on 21 September 2017) 2.25 3.5 years 1,500 - - 1,500

Debentures of Baht 2,000 million (issued on 21 September 2017) 3.58 10 years 2,000 - - 2,000

Debentures of Baht 2,500 million (issued on 21 September 2017) 3.78 12 years 2,500 - - 2,500

Debentures of Baht 1,500 million (issued on 5 July 2019) 2.84 5 years - 1,500 - 1,500

Debentures of Baht 500 million (issued on 5 July 2019) 3.13 7 years - 500 - 500

Debentures of Baht 3,000 million (issued on 5 July 2019) 3.50 9 years - 3,000 - 3,000

Total 29,500 5,000 (1,500) 33,000

The subsidiary’s debentures, as provided above, are the registered, unsubordinated, and unsecured debentures with a debentureholders’ representative, to institutional and/or high net worth investors.

On 5 July 2019, the subsidiary issued 3 tranches of registered, unsubordinated, and unsecured debentures with a debenture holders’ representative to institutional and/or high net worth investors amounting to Baht 1,500 million Baht 500 million and Baht 3,000 million which bear interest at 2.84% 3.13% and 3.50% per annum and are redeemable in full in 2024, 2026 and 2028, respectively. The subsidiary entered into interest rate swap agreements with financial institutions to partially swap interest of the debentures issued.

As at 31 December 2019, the subsidiary entered into interest rate swap agreements with financial institutions, to swap interest of the debentures issued, totaling in notional amount of Baht 28,500 million (2018: Baht 27,000 million) to swap fixed Baht interest rates for floating Baht interest rates plus margins as specified in agreements.

Such debentures contain covenants relating to various matters such as restrictions on creating or permitting the creation of security interest on property and assets, and a prohibition on making loans or granting guarantees except under certain conditions.

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21. Assets retirement obligation




2019 2018 2019 2018

Assets retirement obligation at beginning of year 1,214,628 887,726 163,814 190,985

Decrease from payment (38,188) (35,172) (2,813) (33,584)

Increase during the year 570,842 362,074 55,216 6,413

Assets retirement obligation at end of year 1,747,282 1,214,628 216,217 163,814

Assets retirement obligation is substantially the provision for expenses to be incurred with respect to the retirement of network located on leased areas.

22. Leases

The Company and its subsidiaries have lease contracts related to office building, vehicle, land for tower, space on tower, equipment for mobile telecommunication services and others.

22.1 Right-of-use assets

The net book value of right-of-use assets related to land, building, leasehold and equipment lease contracts and the movement for the year 2019 are presented below.



Land for tower

Buildings and

building improvement

Equipment for mobile

telecommunication services

Leasehold Other Total

Cost

31 December 2018 - - - - - -

Effects of the adoption of TFRS16 as at 1 January 2019 7,240,263 1,361,218 17,757,289 104,840 91,936 26,555,546

1 January 2019 7,240,263 1,361,218 17,757,289 104,840 91,936 26,555,546

Addition 1,743,263 330,581 280,965 18,630 30,056 2,403,495

Written-off (150,668) (98,819) (487,234) - (16,081) (752,802)

31 December 2019 8,832,858 1,592,980 17,551,020 123,470 105,911 28,206,239

Accumulated depreciation

31 December 2018 - - - - - -

Effects of the adoption of TFRS16 as at 1 January 2019 33,882 32,996 - 50,436 - 117,314

1 January 2019 33,882 32,996 - 50,436 - 117,314

Depreciation for the year 1,349,224 641,025 2,587,801 24,409 63,695 4,666,154

196



Land for tower

Buildings and


Equipment for mobile

telecommunication services


Depreciation - written-off (94,302) (69,849) (61,499) - (15,122) (240,772)

31 December 2019 1,288,804 604,172 2,526,302 74,845 48,573 4,542,696

Net book value

31 December 2018 - - - - - -

1 January 2019 7,206,381 1,328,222 17,757,289 54,404 91,936 26,438,232

31 December 2019 7,544,054 988,808 15,024,718 48,625 57,338 23,663,543



Land for tower

Buildings and



Cost

31 December 2018 - - - - -

Effects of the adoption of TFRS16 as at 1 January 2019 207,400 807,349 102,383 52,102 1,169,234

1 January 2019 207,400 807,349 102,383 52,102 1,169,234

Addition 41,220 148,128 4,860 28,454 222,662

Written-off (17,121) (41,841) (80,530) (15,936) (155,428)

31 December 2019 231,499 913,636 26,713 64,620 1,236,468

Accumulated depreciation

31 December 2018 - - - - -

Effects of the adoption of TFRS16 as at 1 January 2019 - 32,996 49,202 - 82,198

1 January 2019 - 32,996 49,202 - 82,198

Depreciation for the year 66,747 310,770 7,042 37,582 422,141

Depreciation - written-off (12,644) (13,180) (30,560) (14,978) (71,362)

31 December 2019 54,103 330,586 25,684 22,604 432,977

Net book value

31 December 2018 - - - - -

1 January 2019 207,400 774,353 53,181 52,102 1,087,036

31 December 2019 177,396 583,050 1,029 42,016 803,491

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22.2 Lease liabilities

The carrying amounts of lease liabilities and the movement for the year 2019 are presented below.




As at 31 December 2018 - -

Effects of the adoption of TFRS16 27,606,401 1,051,914

As at 1 January 2019 27,606,401 1,051,914

Addition 1,832,191 147,180

Accretion of interest 903,519 23,817

Payments (5,285,093) (499,392)

Decrease from contract cancellation (500,120) (5,177)

As at 31 December 2019 24,556,898 718,342

Less: current portion (4,453,564) (446,365)

Lease liabilities - net of current portion 20,103,334 271,977

The following are the amounts recognised in profit or loss:




Depreciation of right-of-use assets 4,666,154 422,141

Interest expense on lease liabilities 903,519 23,817

Expense relating to short-term lease 83,712 73,620

Leases of low - value assets 146,618 164,947

Total 5,800,003 684,525

The Company and its subsidiaries had total cash outflows for leases of Baht 5,515 million (the Company only: Baht 738 million) and also had non-cash additions to right-of-use assets and lease liabilities of Baht 1,832 million (the Company only: Baht 147million).

22.3 Lease receivables

During the year 2018, the Company and dtac TriNet entered into the Disputes Settlement and Tower Service Agreement with CAT. Under the agreement, the Company transferred to CAT for the disputed towers that the Company has procured under the agreement to operate and to provide cellular telephone services between CAT and the Company. In light of this, CAT agreed to settle disputes related to ownership of all towers and allowed the Company and dtac TriNet to use the towers to operate business based on an 8-year period. dtac TriNet itself shall procure the land for tower and provide maintenance service to the towers and shall receive the compensation in accordance with the terms and conditions as stipulated in the agreements.

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The net book value of lease receivables as at 31 December 2019 are presented below.



Receivables under lease agreements 7,414,660

Less: Deferred interest income (930,489)

Total 6,484,171

Less: Portion due within one year (382,096)

Lease receivables - net of current portion 6,102,075

As at 31 December 2019, the subsidiary has future minimum lease payment to be received under leases contracts as follows:



To be received:

Year 2020 382

Year 2021 1,158

Year 2022 1,192

Year 2023 1,228

Year 2024 1,265

Year 2025 onwards 2,189

Receivables under lease agreements 7,414

Less: Deferred interest income (930)

Receivables under lease agreements - net 6,484

23. Provision for long-term employee benefits

Provision for long-term employee benefits, which represents compensation payable to employees after they retire, was as follows:


Consolidated/Separate financial statements

2019 2018

Provision for long-term employee benefits at beginning of year 734,606 698,592

Included in profit or loss:

Current service cost 51,047 50,858

Previous service cost 757 (5,585)

Interest cost 16,280 15,049

199




2019 2018

Included in other comprehensive income:

Actuarial (gains) losses arising from

Financial assumptions changes (29,195) -

Demographic assumptions changes (50,995) 156

Experience adjustments (10,457) (23,354)

Benefits paid during the year (800) (1,110)

Provision for long-term employee benefits at end of year 711,243 734,606

Line items in profit or loss under which long-term employee benefit expenses are recognised entirely in administrative expenses.

As at 31 December 2019, the Company expect to pay Baht 4 million of long-term employee benefits during the next year (Separate financial statements: Baht 4 million) (2018: Baht 1 million, separate financial statements: Baht 1 million).

As at 31 December 2019, the weighted average duration of the liabilities for long-term employee benefit is 13 years (Separate financial statements: 13 years) (2018: 14 years, separate financial statements: 14 years).

Significant actuarial assumptions are summarised below:

(Unit: percent per annum)


2019 2018

Discount rate 1.8 2.9

Salary increase rate 4 5.5

Turnover rate 0 - 15 0 - 15

The result of sensitivity analysis for significant assumptions that affect the present value of the long-term employee benefit obligation as at 31 December 2019 and 2018 are summarised below:



2019 2018

Increase 0.5% Decrease 0.5% Increase 0.5% Decrease 0.5%

Discount rate (43) 47 (36) 40

Salary increase rate 46 (43) 38 (36)

Increase 10% Decrease 10% Increase 10% Decrease 10%

Voluntary turnover rate of employees (40) 44 (31) 33

On 13 December 2018, the National Legislative Assembly passed a resolution approving the draft of a new Labour Protection Act, which was announced in the Royal Gazette on 5 April 2019. The new Labour Protection Act stipulates additional legal severance pay rates for employees who have worked for an uninterrupted period of twenty years or more. Such employees are entitled to receive compensation of not less than that of the last 400 days, based on the final wage rate. This change is considered a post-employment benefits plan amendment and the Company and its subsidiaries have additional liabilities for long-term employee benefits. The Company and its subsidiaries have recorded the effect of the change by recognising past service costs as expenses in the income statement for the year 2018.

200

24. Dividends

Dividends Approved by Total dividend Dividend per share

(Million Baht) (Baht)

Interim dividend announced from operating result for the period as from 1 January 2019 to 30 June 2019

Board of Directors’ Meeting on 15 July 2019

2,983 1.26

Total dividend for 2019 2,983

Dividend announced from retained earnings as at 31 December 2017

Annual General Meeting of Shareholder on 4 April 2018

568 0.24

Interim dividend announced from operating result for the period as from 1 January 2018 to 30 June 2018

Board of Directors’ Meeting on 16 July 2018

2,391 1.01

Total dividend for 2018 2,959

25. Revenue from sales and services




2019 2018 2019 2018

Revenue from telecommunication business

• Revenue under the type one license 4,287,988 3,938,597 4,286,565 -

• Revenue under the type two license 23,437 40,227 - -

• Revenue under the type three license 63,551,741 62,230,061 - -

Total 67,863,166 66,208,885 4,286,565 -

Other income 13,303,970 9,080,780 14,636,326 29,785,692

Total revenue from sales and services 81,167,136 75,289,665 18,922,891 29,785,692

26. Expenses by nature

Significant expenses by nature are as follows:




2019 2018 2019 2018

Salaries and wages and other employee benefits 4,736,088 4,188,097 4,711,514 4,237,106

Depreciation 10,716,630 9,418,310 528,967 760,734

Amortisation 4,630,366 15,686,261 106,261 6,095,540

201





2019 2018 2019 2018

Depreciation right-of-use assets 4,666,154 - 422,141 -

Rental expenses from operating lease agreements 459,081 3,380,799 337,141 974,762

Purchases in inventories 9,491,913 9,982,669 94,958 2,567,478

Changes in inventories of finished goods 1,028,219 99,170 (11,497) 2,222,862

Disputes settlement agreement expenses - 7,850,854 - 7,850,854

27. Finance cost




2019 2018 2019 2018

Interest expense 2,541,266 1,236,305 19,445 342,249

Interest expense on lease liabilities 903,519 - 23,817 -

Less: Interest income on lease receivables (219,202) - - -

Net interest expense - lease liabilities 684,317 - 23,817 -

Amortisation on deferred financial cost 16,462 43,123 - -

Other finance cost 27,305 71,814 - -

Total finance cost 3,269,350 1,351,242 43,262 342,249

28. Income tax

Income tax expenses for the years ended 31 December 2019 and 2018 are made up as follows:




2019 2018 2019 2018Current income tax:

Current income tax charge 105,335 1,565,595 - -

Adjustment in respect of income tax of previous year 8,788 60,884 - -

Deferred tax:

Relating to origination and reversal of temporary differences 854,748 (3,057,015) 1,470,200 (1,286,308)

Income tax expense reported in the income statement 968,871 (1,430,536) 1,470,200 (1,286,308)

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The amounts of income tax relating to each component of other comprehensive income for the years ended 31 December 2019 and 2018 are as follows:


Consolidated / Separate financial statements

2019 2018

Deferred tax relating to the actuarial gains or losses 17,744 -

The reconciliation between accounting profit and income tax expense is shown below.




2019 2018 2019 2018

Accounting profit (loss) before tax 6,390,670 (5,799,226) 10,535,373 197,134

Applicable tax rate 20% 20% 20% 20%

Accounting profit (loss) before tax multiplied by income tax rate 1,278,134 (1,159,845) 2,107,074 39,427

Adjustment in respect of current income tax of previous year 8,788 60,884 - -

Effects of:

Tax exempted revenue (1,075) (75) (597,934) (1,306,002)

Non-deductible expenses 59,754 60,481 18,817 16,938

Additional capital expenditure deductions allowed (357,305) (369,093) (33,865) (40,689)

Effects of adjustment deferred tax (23,892) (30,210) (23,892) 4,018

Others 4,467 7,322 - -

Income tax expenses reported in the income statement 968,871 (1,430,536) 1,470,200 (1,286,308)

The components of deferred tax assets are as follows:




2019 2018 2019 2018

Deferred tax assets

Allowance for doubtful accounts - trade receivables 289,945 318,031 35,766 39,002

Allowance for diminution in value of investment/loss on the subsidiary 31,855 89,704 31,463 89,704

Allowance for diminution in value of inventories 11,729 8,425 14 1,210

Accrued expenses 78,308 8,954 78,308 7,575

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2019 2018 2019 2018

Amortisation of intangible assets 187,502 24,007 - -

Sales of prepaid voucher cards 196,632 210,695 204 1,076

Lease agreement 115,545 - 19,473 -

Disputes Settlement Agreement expenses - 1,895,792 - 1,895,792

Tax losses carried forward 4,691,191 3,974,109 4,359,582 3,974,109

Others 174,008 118,707 81,513 88,564

Total 5,776,715 6,648,424 4,606,323 6,097,032




2019 2018 2019 2018

Deferred tax liabilities

Unrealised gain on derivative instruments for debentures (14,842) (8,176) - -

License on mobile money business (premium from subsidiary acquisition) - (13,768) - -

Contract assets (35,070) - - -

Cost to obtain contracts (73,586) - - -

Others (56,892) (26,166) (23,402) (26,166)

Total (180,390) (48,110) (23,402) (26,166)

Deferred tax assets - net 5,596,325 6,600,314 4,582,921 6,070,866

Details of expiry date of the above tax losses carried forward are summarised as below:




2019 2018 2019 2018

31 December 2020 996,556 996,556 996,556 996,556

31 December 2021 4,614,973 4,614,973 4,614,973 4,614,973

31 December 2022 6,555,113 6,555,113 6,555,113 6,555,113

31 December 2023 7,756,167 7,769,480 7,756,167 7,769,480

31 December 2024 3,533,147 - 1,875,104 -

23,455,956 19,936,122 21,797,913 19,936,122

As at 31 December 2019 the Company has deductible temporary differences of Baht 1,425 million (2018: Baht 1,425 million) on which deferred tax assets have not been recognized because the Company considers that it might be uncertain to mortiz these temporary differences in the future.

204

29. Earnings per share

Basic earnings (loss) per share is calculated by dividing profit (loss) for the year attributable to equity holders of the Company (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year.



2019 2018 2019 2018

Profit (loss) attributable to equity holders of the Company (Thousand Baht) 5,421,893 (4,368,692) 9,065,173 1,483,442

Weighted average number of ordinary shares (Thousand shares) 2,367,811 2,367,811 2,367,811 2,367,811

Basic earnings (loss) per share (Baht/share) 2.29 (1.85) 3.83 0.63

30. Depreciation and amortisation

Depreciation and amortisation for the years ended 31 December 2019 and 2018 comprised:




2019 2018 2019 2018

Depreciation

Building and equipment 10,716,630 9,418,310 528,967 760,734

Right-of-use assets 4,666,154 - 422,141 -

Amortisation

Deferred right to use of equipment - 13,945,356 - 5,971,683

Cost of spectrum licenses 3,984,254 1,033,057 - -

Other intangible assets and other non-current assets

• group as selling and administration expenses 629,650 664,725 106,261 123,857

• group as finance cost 16,462 43,123 - -

Total depreciation and amortisation 20,013,150 25,104,571 1,057,369 6,856,274

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31. Operating income before interest, taxes, depreciation, amortisation, other incomes and other expenses (EBITDA before other incomes and other expenses)


Note


2019 2018

Profit (loss) for the year 5,421,799 (4,368,689)

Add : Finance cost 27 3,269,350 1,351,242

: Income tax expenses 28 968,871 (1,430,536)

: Depreciation expense 30 10,716,630 9,418,310

: Amortisation expense 30 4,613,904 15,643,138

: Depreciation - right- of-use assets 30 4,666,154 -

EBITDA 29,656,708 20,613,465

Add : Disputes settlement agreement expenses - 7,850,854

EBITDA before disputes settlement agreement expenses 29,656,708 28,464,319

Add (less) : Interest income (57,839) (241,122)

: (Gain) loss on foreign exchange 15,140 (6,824)

: Other expenses related to employees 548,457 127,232

: Penalty from contract cancellation (reversal) 40,000 (2,852)

: Share of loss from investment in associated company 8,831 12,148

: Dividend received from other investments (375) (375)

: (Gain) loss from sales of other investments 1,542 (4,441)

: Allowance for impairment and loss from disposal/ write-off of equipment and other intangible assets 207,303 46,804

: Allowance for diminution in value of other investments 250 250

: Other incomes (2,850) (3,650)

Operating income before interest, taxes, depreciation, amortisation, other incomes and other expenses (EBITDA before other incomes and other expenses) 30,417,167 28,391,489

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32. Financial instruments

32.1 Financial risk management

The Company and its subsidiaries’ financial instruments, as defined under Thai Accounting Standard No. 107 “Financial Instruments: Disclosure and Presentations”, principally comprise cash and cash equivalents, trade and other receivables, trade and other payables, debentures and long-term loans. The financial risks associated with these financial instruments and how they are managed are described below.

32.2 Interest rate risk

The Company and its subsidiaries’ exposure to interest rate risk relate primarily to their deposits at banks, debentures, short-term loan and long-term loans.

The significant financial assets and liabilities (part of these are under derivative instruments as described in Notes 20 to the consolidated financial statements) are classified by type of interest rate as follows:


Consolidated financial statements as at 31 December 2019

Items Note Floating interest rate

Fixed interest rate

Zero interest rate Total

Financial assets

Cash and cash equivalents 7 8,493 - 35 8,528

Trade and other receivables 8 - - 9,791 9,791

Lease receivables 22.3 - 6,484 - 6,484

Financial liabilities

Trade and other payables 18 - - 26,690 26,690

Long-term loans 19 16,000 - - 16,000

Debentures 20 - 33,000 - 33,000

Lease liabilities 22.2 - 24,557 - 24,557



Items Note Floating interest rate

Fixed interest rate

Zero interest rate Total

Financial assets

Cash and cash equivalents 7 12,016 2,000 74 14,090

Trade and other receivables 8 - - 7,831 7,831


Trade and other payables 18 - - 39,899 39,899

Long-term loans 19 17,500 - - 17,500

Debentures 20 - 29,500 - 29,500

Financial assets and liabilities that carried fixed interest rates can be classified based on the maturity date or the repricing date (if this occurs before the maturity date) from the statements of financial position date as follows:

207




Items Note Within 12 months

Over 12 months Total Interest rate

Financial assets

Lease receivables 22.3 382 6,102 6,484 3.64%


Debentures 20 4,000 29,000 33,000 2.25% - 4.04%

Lease liabilities 22.2 4,182 20,375 24,557 2.08% - 3.84%



Items Note Within 12 months

Over 12 months Total Interest rate

Financial assets

Cash and cash equivalents 2,000 - 2,000 0.05% - 1.00%


Debentures 20 1,500 28,000 29,500 1.98% - 4.04%

32.3 Foreign currency risk

The Company and its subsidiaries’ exposure to foreign currency risk arised mainly from trade receivables/payables - international telephone roaming services, and purchasing of equipment transactions that are denominated in foreign currencies. The Company and its subsidiaries primarily utilise forward exchange contracts to manage the exchange rate risk arising from these instruments.

As at 31 December 2019 and 2018 the Company and its subsidiaries had the following assets and liabilities denominated in foreign currencies:

Consolidated financial statements as at 31 December

Exchange rate as at 31 December

2019 2018 Foreign currency 2019 2018

(Million) (Million) Baht per foreign currency

Assets

Deposits at banks 4.65 12.31 USD 29.8855 32.1924

Trade receivables - other companies 20.77 27.51 SDRs 41.6521 45.0853

1.02 1.55 USD 29.8855 32.1924

0.01 0.13 EUR 33.2713 36.6577

Trade receivables - 0.85 0.75 SDRs 41.6521 45.0853

related companies 0.59 2.96 USD 29.8855 32.1924

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Exchange rate as at 31 December

2019 2018 Foreign currency 2019 2018

(Million) (Million) Baht per foreign currency

Liabilities

Trade payables 4.51 6.82 USD 30.3313 32.6148

0.20 0.16 EUR 34.0846 37.4884

12.54 5.68 NOK 3.4637 3.7449

0.16 - GBP 39.9523 41.5216

0.07 0.01 SGD 22.5935 23.9720

0.13 - SEK 3.2711 3.6428

8.78 12.31 SDRs 41.6521 45.0853

Related parties payables 46.58 36.04 NOK 3.4637 3.7449

0.75 0.53 SDRs 41.6521 45.0853

0.06 0.01 SGD 22.5935 23.9720

2.70 5.19 USD 30.3313 32.6148

Total net assets (liabilities) (0.95) 4.81 USD

(0.19) (0.03) EUR

(0.16) - GBP

12.09 15.42 SDRs

(59.12) (41.72) NOK

(0.13) - SEK

(0.13) (0.02) SGD

32.4 Credit risk

The Company and its subsidiaries are exposed to credit risk primarily with respect to trade receivables. The management manage the risk by adopting credit control policies and procedures. In addition, the Company and its subsidiaries do not have high concentration of credit risk since it has a large customer base. Therefore, the Company and its subsidiaries do not expect to incur material financial loss. The maximum exposure to credit risk is limited to the carrying amount of receivables less allowance for doubtful debts as stated in the statements of financial position.

32.5 Fair value of financial instruments

Given that part of financial assets and financial liabilities are short-term or bearing interest rate closely to market rate, and loans denominated in Thai Baht bearing the market interest rates, the Company’s management believes that the fair value of those financial assets and financial liabilities does not materially differ from their carrying value.

The carrying value and fair value of long-term financial liabilities and the fair value of derivative instruments as at 31 December 2019 and 2018 are presented below.

209




2019 2018

Carrying value Fair value Carrying

value Fair value

Hedged

Thai Baht debentures 28,500 31,732 27,000 29,157

Unhedged

Thai Baht debentures 4,500 5,064 2,500 2,682

Derivative instruments

Interest rate swaps - 1,227 - 262

The methods and assumptions used by the Company and its subsidiaries in estimating the fair value of financial instruments are as follows:

• The fair value of debentures are presented based on the discounted cash flow method. The discount rate is based on the prevailing rates of return as of the end of reporting period for financial instruments having substantially the same terms and characteristics.

• The fair value of derivative instruments has been determined by using a discounted future cash flow model and a valuation model technique. Most of the inputs used for the valuation are observable in the relevant market, such as interest rate yield curves, the Company and a subsidiary have considered to counter party credit risk when determining the fair value of derivatives.

During the current year, there were no transfers within the fair value hierarchy.

33. Fair value hierarchy

As at 31 December 2019 and 2018, the Company and its subsidiaries had the assets and liabilities that were measured at fair value using different levels of inputs as follows:


Consolidated Financial Statements as at 31 December 2019

Level 1 Level 2 Level 3 Total

Liabilities for which fair value are disclosed

Debentures - 36,796 - 36,796

Interest rate swaps (favourable) - 1,227 - 1,227


Consolidated Financial Statements as at 31 December 2018

Level 1 Level 2 Level 3 Total

Liabilities for which fair value are disclosed

Debentures - 31,839 - 31,839

Interest rate swaps (favourable) - 262 - 262

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34. Capital management

The primary objective of the Company and its subsidiaries’ capital management is to ensure that it has an appropriate financial structure and preserves the ability to continue its business as a going concern.

The Company and its subsidiaries manage their capital position with reference to Net Interest-Bearing Debt to EBITDA before other incomes and other expenses ratio in order to comply with a condition in long-term loan agreements with financial institutions. As at 31 December 2019, the aforementioned ratio in the consolidated financial statements is 1.58:1 (2018: 1.16:1).

The Group’s capital structure consist of debts that includes long-term loans and debentures disclosed in Note 19 and 20 to the consolidated financial statements, cash and cash equivalents disclosed in Note 7 to the consolidated financial statements and equity attributable to the shareholders as presented in the consolidated statement of changes in shareholders’ equity.

No changes were made in the objectives, policies or processes during the years end 31 December 2019 and 2018.

35. Commitments and contingent liabilities

35.1 Operating lease commitments

The Company and its subsidiaries have entered into several lease agreements for office buildings, land and building for base stations. The terms of the agreements are generally 1 year (2018: 1 - 3 years and 12 years).

As at 31 December 2019 and 2018, future minimum lease payments under these operating leases contracts were as follows.




2019 2018 2019 2018

Payable within:

In up to 1 year 21 1,566 4 334

In over 1 and up to 5 years - 1,938 - 371

In over 5 years - 22 - 2

During the year 2019, the Company and its subsidiaries recognised rental expenses of Baht 230 million (the Company only: Baht 238 million) in the income statement (2018: Baht 3,094 million the Company only: Baht 772 million)).

During the year 2019, the Company and its subsidiaries recognised right-of-use assets from lease agreements as illustrated in Note 22 to the consolidated financial statements.

35.2 Capital commitments

As at 31 December 2019, the Company and its subsidiaries had capital commitments of Baht 1,054 million and USD 2 million (2018: Baht 3,273 million and USD 4 million) mainly in respect of the purchase of tools and equipment for providing telecommunication services and Baht 146 million and USD 3 million (2018: Baht 93 million, USD 3 million and EUR 0.3 million) relating to the construction of cell sites and acquisition of software for the Company and its subsidiaries’ operations.

35.3 Restricted bank deposits

As at 31 December 2019, deposits at banks of a subsidiary amounting to Baht 0.1 million (2018: Baht 0.1 million) are pledged with the bank to secure facilities granted by the bank.

35.4 Bank guarantees

As at 31 December 2019, there were outstanding bank guarantees of Baht 46,638 million (2018: Baht 47,440 million) issued by banks on behalf of the Company and subsidiaries in respect of certain performance bonds required in the normal course of

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business of the Company and its subsidiaries. Bank guarantees are primarily issued to NBTC to guarantee the payment for the winning bid price of the spectrum licenses, and issued to TOT and CAT to guarantee the compliance with the agreements as discussed in Note 35.6 (c), (d) and (e) to the consolidated financial statements.

35.5 Agreement to install cell site equipment and maintain transmission networks

As at 31 December 2019, the Company and its subsidiary had a commitment to BB Technology Co., Ltd., a related company, relating to the installation of cell site equipment and maintenance of transmission networks. This related company will provide transmission engineering network design and configuration, installation and maintenance services for transmission networks. The Company and its subsidiary are committed to pay service fees at the rate specified in the agreement.

35.6 Long-term agreement commitment

a. The Company and its subsidiary entered into a purchase and resale agreement with a company that granted the right to distribute products, equipment and support services in Thailand related to that company’s mobile phones and tablet computer. The Company and its subsidiary are committed to terms indicated in the agreement and to future minimum purchase orders and minimum merchandising and marketing spend stipulated under the agreement.

b. The Company and its subsidiaries entered into frame contracts for supply network infrastructure and services for the telecommunication network of the Company and its subsidiary. Goods and service prices are set in accordance with the terms and conditions stipulated in the agreements.

c. On 23 April 2018, the Board of Directors’ Meeting of the Company passed a resolution to approve dtac TriNet Company Limited (“dtac TriNet”), a subsidiary of the Company, to enter into the Domestic Roaming Agreement with TOT Public Company Limited (“TOT”) to utilize the domestic data roaming on TOT’s 2300 MHz network, who has been granted a license from the National Broadcasting and Telecommunications Commission, to provide the domestic roaming on TOT’s 2300 MHz Spectrum to its customers. In this regard, dtac TriNet shall pay monthly roaming charges to TOT in accordance with details and conditions as specified in the Domestic Roaming Agreement dated on 23 April 2018. The agreement period is until on 3 August 2025. dtac TriNet provided a bank guarantee of Baht 715 million issued by a bank to guarantee the performance of such agreement.

d. The Board of Directors’ Meeting of the Company passed a resolution to approve TeleAssets Co., Ltd. (“TeleAssets”), a subsidiary of the Company, to enter into the Telecommunications Equipment Lease Agreement with TOT. TeleAssets agrees to procure, install, and maintain the Telecommunications Equipment (the “Telecommunications Equipment”) and agrees to lease such Telecommunications Equipment to TOT, so that TOT is entitled to utilise such Telecommunications Equipment in the provision of the telecommunications services of the 2300 MHz Spectrum. TeleAssets will receive rental and service fees from TOT in accordance with the details and conditions specified in the Telecommunications Equipment Lease Agreement dated on 23 April 2018. The agreement period is until on 3 August 2025. TeleAssets provided a bank guarantee of Baht 470 million issued by a bank to guarantee the performance of such agreement.

e. On 14 September 2018, the Board of Directors’ Meeting of the Company passed a resolution to approve the Company and dtac TriNet to enter into the Disputes Settlement and Tower Service Agreement with CAT. Under the Disputes Settlement and Tower Service Agreement dated on 14 September 2018, the Company transferred to CAT for the disputed towers that the Company has procured under the agreement to operate and to provide cellular system radio communications services between CAT and the Company. In light of this, CAT agreed to settle disputes related to ownership of all towers and allowed the Company and dtac TriNet to use the towers to operate business based on an 8 year lock-up period which dtac TriNet provided the compensation in accordance with the terms and conditions as stipulated in the agreement, and has the right to renew the agreement period up to 3 years with no limitation. dtac TriNet itself shall procure the land for tower and provide maintenance service to the towers. The Company and dtac TriNet provided a bank guarantee of Baht 516 million issued by a bank to guarantee the performance of such agreement.

dtac TriNet also leases telecommunication equipment from CAT under Fiber and other Facilities Service Agreement dated 14 September 2018 with CAT. The duration of each device varies from one year to three years depending on the type and nature of the device. dtac TriNet has the right to renew the agreement period up to 1 year at a time. The Company and dtac TriNet provided a bank guarantee of Baht 794 million issued by a bank to guarantee the performance of such agreement.

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35.7 NBTC letter requesting the Company to pay an additional payment for Remedy period

On 18 December 2019, the NBTC issued an order requesting the Company to make an additional payment for the usage of 850 MHz and 1800 MHz, amounting of Baht 264 million, during Remedy period. Under section 7 of NBTC notification Re: Remedial Measure in case of Concession Expiration, B.E. 2556 (2013), the Company is required to pay actual profit during the remedy period or 30% of the revenue during the remedy period whichever is higher. Therefore, on 10 April 2019, the Company made a minimum rate payment amounting of Baht 603 million to NBTC. Nevertheless, NBTC claimed the additional payment by rejecting some deducted costs and expenses.

As at 31 December 2019, the Company has not accrued such addition payment claimed by NBTC in the financial statements.

Based on the Company’s external legal counsel opinion, the Company believes that it has no liability to pay such additional payment to NBTC. Currently, the Company is preparing to file a lawsuit with the Central Administrative Court requesting to revoke such NBTC order.

36. Court proceedings and commercial dispute between the Company and TOT Plc. (TOT) in relation to the access charge payment

1) TOT, CAT and the Company entered into the Postpaid Access Charge Agreement on 22 February 1994 and the Prepaid Access Charge Agreement on 2 April 2001. Under these Agreements, TOT agreed to interconnect its network with that of the Company in consideration of an access charge of Baht 200 per month for the postpaid service and 18 percent of the price specified on the prepaid card, including VAT, for the prepaid service.

On 17 May 2006, the NTC (currently known as NBTC) issued the Interconnection Notification requiring all licensees (who have their own telecommunication networks) (licensees) to allow interconnection by other licensees upon request, in order to ensure good cross-network connections, and the licensees who provide the interconnection is entitled to collect an interconnection charge that reflect its costs.

On 2 October 2006, the Company issued a letter to TOT requesting TOT to enter into negotiation with the Company regarding an interconnection charge agreement between the Company’s network and TOT’s network. On 17 November 2006, the Company sent a notice to TOT and CAT informing them that the Company would change the rates for calculating the access charge under the Access Charge Agreements entered into with TOT on the ground that the rate and the collection of access charge under the Access Charge Agreements were contrary to the law in a number of respects and the Company also informed TOT and CAT that it would pay the interconnection charge to TOT at the rate which was in compliance with the law.

On 23 November 2006, TOT issued a letter to the Company informing the Company that it was not entitled to interconnect its network with that of TOT because the Company was not a licensee, whose license was granted by NTC, and did not have its own telecommunication network. TOT also claimed that the Access Charge Agreements did not violate any laws and, as a result, demanded the payment of the access charge in accordance with the rate and the collection of access charge specified under the Access Charge Agreements. TOT also refused to accept payment of the interconnection charges by the Company.

On 1 February 2007, the Company issued a letter to TOT informing that the Company was pleased to pay the interconnection charge to TOT at the rate under TOT’s Reference of Interconnect Offer (RIO) as approved by NTC.

2) On 18 June 2007, according to the Award No. 1/2550 rendered by NTC on the Dispute on Interconnection of Telecommunications Networks, NTC ordered TOT to negotiate with the Company within 7 days and enter into an interconnection charge agreement with the Company within 30 days from the date of the commencement of the negotiation. NTC Secretary General ordered TOT to negotiate an interconnection charge agreement with the Company in line with NTC’s Award but TOT appealed such order to NTC Secretary General. In addition, on 9 October 2007, NTC unanimously resolved to confirm NTC Secretary General’s order requiring TOT to negotiate an interconnection agreement with the Company. TOT had filed a lawsuit with the Central Administrative Court under black case no. 1523/2550, petition for the cancellation of such NTC and NTC Secretary General’s orders. On 15 September 2010, the Central Administrative Court dismissed the TOT’s plaint. TOT appealed against the Central Administrative Court’s verdict to the Supreme Administrative Court. Currently, the case is under the consideration of the Supreme Administrative Court.

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3) As TOT still refused to enter into an interconnection agreement with the Company, on 8 November 2007, the Company sent TOT a notice regarding the interconnection charges informing TOT that it would like to cancel its previous offer in which it agreed to pay TOT the interconnection charges at a rate to be agreed between the parties in good faith and its offer to pay TOT the interconnection charges at a rate specified in TOT’s Reference of Interconnect Offer (RIO) which had already been approved by NTC together with the notice to cancel the both Access Charge Agreements. The Company accrued in its financial statements the access charge at the interconnection charge rate for the period from 18 November 2006 to 7 November 2007, amounting to Baht 1,973 million. The Company stopped accruing the access charge from 8 November 2007 in its financial statements based on the view that the obligation to pay the Access Change was ended.

4) On 9 May 2011, TOT filed a plaint (black case no. 1097/2554) with the Central Administrative Court and a petition to amend the plaint dated 7 June 2011 demanding CAT and the Company to jointly pay for damages from the access charge, i.e. (1) damages from access charge in connection with Postpaid and Prepaid Access Charge Agreements calculating from 18 November 2006 to 9 May 2011 (the filing date of the plaint) including VAT and default interest at the rate of 1.25 percent per month; and (2) damages from access charge under Postpaid and Prepaid Access Charge Agreements amounting to half of revenue sharing which CAT received from the Company calculating from 16 September 2006 to 9 May 2011 (the filing date of the plaint) including VAT and default interest at the rate of 7.5 percent per annum. As a result, TOT has claimed against the Company to be liable for the damages at Baht 113,319 million. The Company was informed on 10 October 2014 that on 31 July 2014 TOT additionally filed a petition to amend the plaint to adjust the amount of damages claimed up to 10 July 2014 from Baht 113,319 million to Baht 245,638 million (calculated to 10 July 2014). The other disputed issues remain the same.

On 31 May 2019, the Central Administrative Court issued a verdict dismissing TOT’s claim on access charges against the Company in its entirety. The Central Administrative Court ruled that the method for calculation by using the access charge rates is no longer valid as it is against with NTC Notification on Interconnection. Therefore, the relevant telecommunication operators are required to calculate the interconnection charge rates in accordance with the said NTC Notification. As TOT did not submit its appeal within the timeframe, the case is final. On 8 July 2019, the Company submitted the petition to the Central Administrative Court requesting for a letter confirming that the case is final. The Central Administrative Court issued a letter dated 19 July 2019 confirming that the case is final.

On 28 June 2019, the Company received the letter from TOT specifying that CAT and the Company must pay the access charge to TOT according to the Access Charge Agreement. CAT, the Company and TOT shall negotiate the access charge payment in accordance with the Interconnection Notification and TOT request the Company to notify the date for negotiating such access charge payment for the avoidance of the future dispute. The Company, then, on the same day, sent the letter to TOT specifying that the Central Administrative Court ruled that the access charge rates under the Access Charge Agreement are no longer valid after NTC Notification on Interconnection became effective. CAT and the Company, then, are not obliged to pay such access charge to TOT and did not owe any debts to TOT. Later, the Company has met TOT on 30 July 2019, in objective to confirm and explain that the Company are not obliged to pay such access charge to TOT and did not owe any debts to TOT.

In addition, the Company has filed 3 lawsuits before the Central Administrative Court requesting TOT to pay Interconnection charges to the Company for the period of 18 November 2006 to 31 July 2013. The Central Administrative Court issued its verdicts in all 3 cases ordering TOT to pay Interconnection charges to the Company in the amount totalling of Baht 1,220 million. In such 3 cases, including one case which has been filed before the Central Administrative Court requesting True Corporation Public Company Limited (as the second defendant) to pay Interconnection charges to the Company for the period of 18 November 2006 to 31 December 2010. The Central Administrative Court issued its verdict ordering that company to pay Interconnection charges to the Company in the amount of Baht 1,832 million. However, the above cases are not yet final. Currently, two cases are under the consideration of Supreme Administrative Court. For one case, the parties still have the right to appeal the verdict of Central Administrative Court in the timeframe specified by law.

5) Even though NTC has rendered the Award No. 1/2550 on the Dispute on Interconnection of Telecommunications Networks which ordered TOT to negotiate an interconnection charge agreement with the Company and the Secretary General of the NTC also issued an administrative sanction (requiring TOT to pay fine in the amount of Baht 20,000 per day until completion) enforcing TOT to enter into an interconnection charge agreement with the Company but TOT has refused to enter into such agreement. TOT has filed a complaint with the Central Administrative Court requesting the court to revoke

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the NTC’s Award and the administrative sanction. On 16 July 2012, the Central Administrative Court rendered a judgment (Black Case No. 1033/2553 and Red Case No. 1178/2555) which dismissed TOT’s complaint as the court opined that such order was lawful. As TOT disagreed with the Central Administrative Court’s judgment, TOT then submitted an appeal to the Supreme Administrative Court. Presently, this case is under consideration of the Supreme Administrative Court.

Based on legal advice from the Company’s external legal counsel, the Company’s management believes that the Company is not obliged to make payment of access charge under the Access Charge Agreements because the calculation of the access charge under Access Charge Agreement is against the current legal principles (in particular the Interconnection Notification). The calculation, however, shall be made on Interconnection rate. As a result, the Company’s management believes that the outcome of the dispute, the negotiation process and the judicial process would not have an adverse impact on the Company’s financial position in a material respect.

Currently, the Company and TOT are discussing about the Interconnection settlement which have not been finalised. However, the Company has made provision, under the conservatism assumption, for expenses that may arise from this issue, in an amount that the Company deems appropriate.

37. Significant commercial disputes, litigation cases and other related issues in relation to revenue sharing from service provided under the agreements to operate cellular telephone services (Concession Agreement) under Disputes Settlement Agreement between CAT the Company and dtac TriNet dated 10 January 2019

On 10 January 2019, the Board of Directors passed a resolution approving the Company and dtac TriNet entering into the Disputes Settlement Agreement to settle the disputes arising from the operation of services under the Concession Agreement between Company, dtac TriNet and CAT. In this regard, the Company, dtac TriNet and CAT also entered into signing the Disputes Settlement Agreement on 10 January 2019. The Dispute Settlement Agreement is binding upon the parties, subject to the terms and conditions specified, and takes effect when the Company obtains approval from a meeting of its shareholder. On 4 April 2019, the 2019 Annual General Meeting of Shareholders has approved the dispute settlement with CAT according to the settlement Agreement dated 10 January 2019 including the implementation under such Agreement. With the approval from the shareholders, the Company, dtac TriNet and CAT jointly submitted the petition for withdrawal cases and disputes under the Disputes Settlement Agreement with the Arbitral Tribunal and Administrative Court.

The Disputes Settlement Agreement results in the settlement numbers of the disputes between the Company and CAT, including disputes that are being litigated and disputes or claims that may be raised by CAT in the future under the Concession Agreement. This does not include the dispute between the Company and CAT regarding additional revenue sharing payments (Excise Tax) under the Concession Agreement and the dispute between the Company and CAT regarding the revenue sharing calculation in relation to Interconnection Charge revenue after the enforcement of the IC Notification, as described in Note 38 (a) and 38 (b) to the consolidated financial statements.

Under the agreement, the Company paid to CAT a consideration totaling Baht 9,510 million (excluding VAT) to settle the disputes. The first payment of Baht 6,840 million (excluding VAT) was made on 4 April 2019 and payments of the remaining balance were made during the year 2019 upon the relevant disputes and/or court cases were withdrawn from the arbitration and the court in accordance with the Disputes Settlement Agreement.

The detail of the disputes, cases and other related issues under this Disputes Settlement Agreements are as follows:

(a) Dispute between the Company and CAT regarding additional revenue sharing calculation from revenue received from Digital Phone Co., Ltd (“DPC”) from mobile telecommunications network domestic roaming agreement provided by the Company.

In 2002, CAT requested the Company to pay additional revenue sharing from revenue received from DPC as a result of DPC’s roaming on the Company’s telecommunications network and subsequently submitted a letter dated 25 August 2003 requesting the Company to pay such fees in the amount of Baht 477 million.

On 31 August 2004, CAT submitted the dispute to the Arbitration Institute demanding that the Company pay additional revenue sharing from domestic roaming revenue together with the penalty (calculated up to the date of the submission of the dispute) in the total amount of Baht 692 million, and demanding that the Company pay the penalty until it gets full benefits.

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On 22 August 2015, the Company received an arbitral award dismissing CAT’s claim in its entirety. On 18 January 2016, the Company was informed that CAT challenged the arbitral award before the Central Administrative Court which subsequently the Central Administrative Court dismissed CAT’s lawsuit due to statute of limitation. On 9 November 2017, the Company is allowed by the Supreme Administrative Court to make the copy of such verdict which appeared that the Supreme Administrative Court confirmed the Central Administrative Court’s verdict.

During 2018, the Company directly received the letter from the Central Administrative Court confirming that the case was final. The Company’s management also considered the legal opinion from external legal counsel which determined that the Company has no further obligation on this case.

(b) Dispute between the Company and CAT regarding the calculation methodology for the revenue sharing in relation to the reduction of the access charge fees

On 18 May 2005 and 19 July 2005, CAT submitted a letter to the Company informing that the Company’s calculation methodology for the revenue sharing from the date of its receipt of approval from TOT for the reduction of the access charge fee was incorrect, resulting in Baht 448 million (calculated from 16 September 1996 to 15 September 2004) of the revenue sharing not paid by the Company to CAT. In 2007, CAT submitted the dispute to the Arbitration Institute, demanding for the payment of the additional revenue sharing and penalty in the total amount of Baht 749 million from the Company. In 2011, CAT also submitted another dispute requesting the Company to pay additional revenue sharing for the 16th

concession year with regard to this matter in the amount of Baht 16 million together with penalty.

(c) Dispute between the Company and CAT regarding revenue share calculation in relation to Interconnection Charge (“IC”) revenue received from other telecom operators before the enforcement of the IC Notification

In 2006, CAT submitted a statement of claim to the Arbitration Institute requesting for the revenue sharing payment shortfall for the 11th - 14th concession years from revenue sharing on IC that the Company had received from other telecom operators in consideration for allowing them to use the network at the time before the enforcement of the IC Notification in the amount of Baht 14 million.

In 2010, CAT also filed another claim requesting for additional revenue sharing for the 15th concession year in the same matter in the amount of Baht 4 million. In 2011 to 2015, CAT submitted several statements of claim in the same matter in the approximate amount of Baht 5 million for all cases, together with penalty.

(d) Dispute between the Company and CAT regarding additional revenue sharing from content providers’ expenses deduction

In 2007, CAT filed a statement of claim with the Arbitration Institute requesting the Company to pay additional revenue sharing in the approximate amount of Baht 24 million including VAT but excluding interest. CAT argued that the Company failed to pay the revenue sharing to CAT for the 13th and 14th concession year (16 September 2003 to 15 September 2005) in full because the Company had deduct expenses concerning content providers from the revenue sharing payable to CAT without approval from CAT. Nevertheless, on 15 March 2012, the majority of the arbitral tribunal rendered an award deciding that the Company has to pay approximately Baht 24 million with interest at 7.5 percent per annum from the principal amount from the date of which the statement of claim was filed (28 December 2007) until payments are made in full. The Company has filed an objection petition before the Central Administrative Court to revoke the arbitration award. However, on 31 March 2015, the Central Administrative Court issued a verdict dismissing the Company’s petition. Subsequently, the Company appealed the verdict of the Central Administrative Court with the Supreme Administrative Court. Later, on 7 June 2017, the Supreme Administrative Court issued a verdict dismissing the Company’s petition. The case is final.

In 2010 to 2013, CAT submitted statements of claim to the Arbitration Institute requesting the Company to pay additional revenue sharing for the 15th-18th concession year in total amount of Baht 338 million (including VAT) together with penalty. In 2015, CAT submitted statements of claim to the Arbitration Institute requesting the Company to pay additional revenue sharing for the 19th and 20th concession year in total amount of Baht 153 million (including VAT). In total, CAT claimed the additional revenue sharing for the 15th - 20th in the amount of Baht 491 million including VAT and interest calculated until the dispute filing date.

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(e) Dispute between the Company and CAT regarding addition revenue sharing from prepaid service revenue on SOS/Jaidee Packet.

In 2010, CAT filed a statement of claim with the Arbitration Institute requesting the Company to pay the additional revenue sharing for the 15th concession year in the approximate amount of Baht 23 million (including VAT). CAT argued that the revenue sharing from prepaid service on SOS/Jaidee Packet paid by the Company to CAT was not in line with the criteria which had been accepted and practiced by CAT and the Company since the beginning of the Concession Agreement.

In 2011 to 2013, CAT filed statements of claim with the Arbitration Institute requesting the Company to pay the additional revenue sharing for the 16th - 18th concession year in the total amount of Baht 295 million. In 2015, CAT submitted statements of claim to the Arbitration Institute requesting the Company to pay additional revenue sharing for the 19th

and 20th concession year in total amount of Baht 58 million. In total, CAT claimed the additional revenue sharing for the 16th - 20th in the amount of Baht 353 million including VAT and interest calculated until the dispute filing date.

(f) Dispute between the Company and CAT regarding additional revenue sharing from uncollectible service fees from customers who submitted fraudulent documents (domestic call)

In 2006 to 2015, CAT submitted several disputes to the Arbitration Institute requesting for additional revenue sharing in total amount of Baht 52 million (including VAT) together with penalty. CAT argued that the Company did not make the revenue sharing payment for the 11th-20th concession year to CAT correctly because the Company had deducted loss incurred by uncollectible receivables from customers who submitted fraudulent documents from revenue before calculating revenue sharing payable to CAT.

(g) Other disputes in relation to revenue sharing from service provided under Concession Agreement

In addition to the above cases, during the years 2009 to 2013, CAT has filed several cases against the Company with the Arbitration Institute and Court demanding the Company to pay additional revenue sharing to CAT in total amount of Baht 263 million together with penalty.

(h) Letter from CAT asking the Company to comply with Clause 14.8, Clause 2.1 and other clauses of the Concession Agreement

On 12 February 2013, the Company received the letter from CAT notifying that the Company did not comply with a non-competition provision specified in Clause 14.8 of the Concession Agreement (Letter 14.8) and at the same time asking the Company to rectify the non-compliance. Later, CAT sent monthly letters to the Company requesting the Company to discontinue the Company’s subscribers porting to dtac TriNet, and claiming for Baht 16,468 million of damages calculated for the period between September 2013 and May 2015. In addition, CAT claimed in the letter dated 10 January 2014 that the Company breached Clause 14.8 and Clause 2.1 of the Concession Agreement, the Company failed to pay the revenue share in full and the Company breached some other provisions under the Concession Agreement. If all of these non-compliances are not rectified by the Company within 90 days from the receiving date of the letter dated 10 January 2014, CAT will exercise the right to terminate the Concession Agreement, and reserve the right to claim for compensation.

Later, CAT submitted the letters dated 25 July 2014, 9 September 2014 and 23 September 2014 to notify that the Company was in breach of a non-competition provision specified in Clause 14.8 and other clauses of the Concession Agreement, including causing damage to CAT by providing financial support to dtac TriNet, holding shares in dtac TriNet and supporting the migration of customers to dtac TriNet. CAT also informed the Company that it would file the claim against the Company through the arbitration. However, the Company confirmed CAT by letters dated 11 April 2014, 21 August 2014 and 3 October 2014 that the Company did not commit any breach of the Concession Agreement and CAT has no right to terminate the Concession Agreement. The Company’s operation in every step was in accordance with the Concession Agreement and the law. For CAT’s claims that the Company breached some other provisions under the Concession Agreement, most of the claims are the disputes which are not final but are under the arbitration proceedings or the Administrative Court proceeding, which CAT should wait for the final decisions. The Company reserved all rights that the Company supposed to have according to the Concession Agreement and the law, and the letter shall not be considered as a waiver of any right or time clause which the Company supposed to have in the Concession Agreement and the law.

On 30 August 2018, the Company received the claim that CAT filed before the Arbitral Tribunal claiming that the Company is in breach of clause 14.8 of Concession by holding 99.99% of shareholding of dtac TriNet and transferring subscriber

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by violating the NBTC Notification on Mobile number portability and its manual. CAT claimed that Company’s action damage CAT by reducing the revenue sharing received from the Company. CAT request the Company to compensate for the period of September 2013 to May 2015 in the amount of Baht 3,506 million, with 7.5% of interest per annum starting from June 2015 onward.

(i) Court proceedings between dtac TriNet and CAT regarding BTO Assets

On 11 June 2014, dtac TriNet received the claim that CAT filed before the Administrative Court claiming that dtac TriNet committed a wrongful act against CAT by installing its devices and equipment for 2.1 GHz (2100 MHz) on the Company’s concessionary asset. CAT required that dtac TriNet remove its 2.1 GHz equipment and, prohibited to install devices and equipment of dtac TriNet on the Company’s concessionary asset, and claims the damages at Baht 42 million per month (subsequently the plaint was amended to Baht 44 million per month) from the filing date until dtac TriNet uninstalls its device and equipment from the Company’s concessionary asset.

In addition, CAT petitioned the Court for granting an injunctive order to prohibit dtac TriNet to install devices and equipment using for the 2.1 GHz spectrum with the Company concessionary asset. On 5 August 2014, the Central Administrative Court dismissed CAT’s petition. On 20 March 2018, the Central Administrative Court rendered its decision ruling that dtac TriNet has not violated CAT and dismissed CAT’s claim. CAT has already appealed the Central Administrative Court’s decision with the Supreme Administrative Court.

(j) Dispute between the Company and CAT regarding BTO Assets

Reference to the dispute between the Company and CAT in 2013 regarding the non-compliance in Clause 2.1 of the Concession Agreement (as described in Note 37 (h) to the consolidated financial statements) given the fact that the Company installed the 2.1 GHz devices and equipment of dtac TriNet on the concessionary equipment. CAT demanded the Company to remove the 2.1 GHz device and equipment within 15 days, or otherwise CAT would file the claim against the Company through the arbitration.

On 1 October 2014, CAT submitted the dispute to the Arbitration Institute claiming that it has been damaged by the Company’s breach of clause 2.1 and clause 2.3 of the Concession Agreement by providing an access to the concessionary devices and equipment with dtac TriNet, allowing dtac TriNet to have its 2.1 GHz devices and equipment installed on and connected with the concessionary devices and equipment. Therefore, CAT requested that the Company remove those 2.1 GHz equipment and devices of dtac TriNet or other mobile telephone service operators (if any) from the concessionary devices and equipment, and compensate for damages in the amount of Baht 658 million with interest at the rate of 7.5 per annum. If such devices and equipment are not removed, CAT requested that the Company compensate for damages in the amount of Baht 44 million per month starting from the date the dispute was submitted onwards until the concessionary devices and equipment are removed. Furthermore, CAT prohibits the Company from providing an access to the concessionary devices and equipment by allowing dtac TriNet or other mobile telephone service operators (if any) to have their 2.1 GHz devices and equipment installed on or connected with the concessionary device and equipment unless a written permission has been obtained from CAT.

Currently, commercial disputes and legal cases are final by the order of Arbitral Tribunal, Central Administrative Court or Supreme Administrative Court to dispose of disputes or cases as requested by the Company, dtac TriNet and CAT.

In addition, the Disputes Settlement Agreement will result in settlement of other issues related to the operations under the Concession Agreement between the Company and CAT which have not yet given rise to litigation, such as the 3rd amendment of Concession Agreement as described in Note 39.3 to the consolidated financial statements and disputes or claims that CAT may potentially raise with the Company in the future under the Concession Agreement.

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38. Significant commercial disputes and litigation cases in relation to the revenue sharing according to the agreements to operate cellular telephone services (Concession Agreement) between CAT and the Company which are not included in the Disputes Settlement Agreement, and other litigation cases

(a) Dispute between the Company and CAT regarding additional revenue sharing payment (Excise Tax) under the Concession Agreement

On 11 January 2008, CAT submitted a dispute to the Arbitration Institute requesting the Company to make additional revenue sharing payments in the 12th - 16th concession years in the aggregate amount of Baht 16,887 million, together with value added taxes and penalties, or an approximate total claim amount of Baht 23,164 million. The statement of claim made by CAT did not mention the reason why the Company did not make the payments in full (the Company expects that such claim amount would be the amount which the Company had paid to the Excise Department and had deducted from its revenue payable to CAT in accordance with the cabinet resolution and CAT’s letters).

Nevertheless, the Arbitral Tribunal has rendered an award dated 28 May 2012 in favor of the Company and dismissed CAT’s claim. On 31 August 2012, CAT filed a motion with the Central Administrative Court in order to revoke the arbitration award. On 29 January 2016, the Central Administrative Court issued the verdict in favor of the Company and dismissed CAT’s petition. CAT appealed the Central administrative Court’s decision with the Supreme Administrative Court. Currently, the case is under the consideration of Supreme administrative Court.

On 29 September 2017, the Company received a notice from CAT informing that the Company had to pay VAT on the reduction of revenue sharing from the deduction of excise tax. CAT claimed that the Company has liability for any taxes and/or fees under laws, which are incurred by Concession. According to the notice, CAT requested the Company to pay VAT to CAT for an amount of Baht 2,756 million with interests. In case of non-compliance, CAT reserves the rights to proceed with the law.

However, based on the Company’s legal counsel opinion, the Company’s management believes that the Company does not have any duty under tax law or Concession to pay such VAT to CAT. Therefore, as at 31 December 2019, the Company has not accrued the said VAT in its financial statement.

(b) Dispute between the Company and CAT regarding revenue share calculation in relation to Interconnection Charge (“IC”) revenue after the enforcement of the IC Notification

In 2011, CAT submitted several statements of claim to the Arbitration Institution requesting for the revenue share payment shortfall in respect of the 16th concession year (16 September 2006-15 September 2007), in the approximate amount of Baht 4,026 million for all cases, together with interest at the rate of 1.25 percent per month. The reason is that the Company calculated the revenue share payable to CAT by offsetting the IC expenses it paid to other operators against IC income it received from other operators, however, CAT claimed that the Company had to pay CAT the revenue sharing on the IC income the Company received from other operators, without deduction of the IC expenses it paid to other operators.

In 2012, CAT also filed a statement of claim to the Arbitration Institution requesting for additional revenue sharing for the 17th concession year in the amount of Baht 3,860 million together with penalty. In 2013, CAT also submitted a dispute to the Arbitration Institution requesting for additional revenue sharing on IC for the 18th concession year in the amount of Baht 3,340 million together with penalty.

In addition, in 2015, CAT filed a statement of claim to the Arbitration Institution requesting for additional revenue sharing on IC for the 19th concession year in the amount of Baht 3,667 million together with penalty and for additional revenue sharing on IC for the 20th concession year in the amount of Baht 3,914 million together with penalty.

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In 2019, CAT also filed a statement of claim to the Arbitration Institution requesting for additional revenue sharing for the 21th-27th concession year in the amount of Baht 15,879 million together with penalty. The Company is in the process of submitting the defense to the Arbitration.

On 25 December 2019, the Company has received the award of arbitral tribunal, dismissing CAT’s claim for additional revenue sharing on IC for the 16th concession year. Later, on 26 and 27 December 2019, the Company has received the awards of arbitral tribunal, deciding that the Company has to pay for additional revenue sharing on IC for the 18th concession year Baht 3,957 million with interest at 7.5 percent per annum and to pay for additional revenue sharing on IC for the 17th concession year Baht 3,438 million with interest at 7.5 percent per annum. However, CAT and the Company have right to seek the revocation of Arbitration awards to the Central Administrative Court within 90 days from the date of receiving the award.

Based on the Company’s legal counsel opinion, the Company’s management deems that the Arbitration awards for the 17th and 18th concession year are inconsistent with the principles of Administrative Law and the relevant regulations of NBTC. Therefore, the Company is preparing to submit a petition to seek the revocation such Arbitration awards to the Central Administrative Court. In addition, such awards only have legal effect for specific case. It does not have any legal and binding effect on the other cases of dispute.

As at 31 December 2019, the Company has not accrued the said additional revenue sharing requested by CAT because, based on the Company’s legal counsel opinion, the Company’s management believes that the Company has no duty to pay such revenue sharing to CAT. Presently, this case is under the arbitration proceedings.

(c) Other litigation cases

The Company has several cases regarding the employment and other commercial agreements total amount of Baht 93 million. The cases are currently under the consideration of Court.

The Company’s management believes that the outcomes of the disputes and cases as referred above will have no significant impact to the Company’s financial position.

39. Regulatory risks concerning the telecommunication business

39.1 Reform of telecommunication regulatory regime

The National Broadcasting and Telecommunications Commission (hereinafter referred to as the “NBTC”), which was established by the Act on the Organisation for Allocation of Frequency and Regulation of Radio and Television Broadcasting Business and Telecommunications Business, B.E. 2553 (2010), is the organisation having an authority to regulate the radio and television broadcasting and telecommunications business including to allocate and administer the use of spectrum. The NBTC was appointed on 7 October 2011.

Nevertheless, NBTC has authority to issue relevant regulations in accordance with telecommunications business operation, for instance, price regulations on service fee and it structure, consumer protections etc. Such regulations would have negative impact to the Group in several aspects, both in implementing its business strategies and adjustment to any changes in market conditions including the management under spectrum licenses at appropriate costs which is significant to the Group’s current operations in the mobile telecommunication business and will impact their business strategy including the amount of additional investment required to enable them to derive maximise benefit from their utilisation of existing spectrums.

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39.2 Operational costs of interconnection between the Company and TOT before the end of Concession Agreement

Pursuant to the telecommunication act, an operator who wishes to interconnect with the network of another operator must enter into an interconnection agreement. At present, the concession agreement was ended but the operation cost of interconnection arisen before the end of concession is unclear since TOT refused to enter into interconnection agreement with the Company. In particular TOT who had entered into an Access Charge Agreements with the Company in 1994 and 2001 required the Company to pay an access charge to TOT at a fixed rate per number per each month or at a percentage of the face value of the prepaid vouchers. However, at present, the interconnection between operators is subject to the Telecommunications Act and the Interconnection Notification. The Company believes that the access charge that TOT determined under the old regulatory regime is no longer valid as it is not in compliance with the Telecommunications Act and the Interconnection Notification.

39.3 The 3rd Amendment to the Concession Agreement

The legal opinion of the Council of State (Ruling Number 292/2550) states that all three amendments to the Concession Agreement do not comply with the Act on Private Sector Undertaking of State Businesses, B.E. 2535 (1992) (“PUS Act”). However, the Council of State further opines that the three amendments are still effective but CAT is required to proceed in accordance with the PUS Act (i.e. CAT must bring this issue to Section 22 Committee under the PUS Act (“Section 22 Committee”), and Section 22 Committee would then consider and propose their opinion for the Cabinet’s consideration) and to report to the Cabinet who are to consider the relevant effects, taking into account state interest as well as public interest.

Section 22 Committee has already given its preliminary opinion to the Ministry of Information and Communication Technology (“MICT”), disapproving the 3rd amendment to the Company’s concession agreement in relation to the part of reduction of revenue sharing.

On 1 February 2011, the Cabinet passed a resolution acknowledging the process of amending the Concession Agreement to comply with the PUS Act, as proposed by the MICT. In addition, the MICT proposed the appointment of the Negotiating Committee on Compensation for Concession Amendment (“the Committee”) to review compensation relevance to the 3rd Concession Amendment.

On 28 June 2011, the Cabinet acknowledged the results of the negotiations of the Committee, which were that the Committee was unable to consider the operators’ proposals as these proposals were beyond the Committee’s authority. However, the Committee opined that at the initial stage, this matter should be reported to the NBTC for consideration in order to issue relevant criteria and measures.

Currently, the PUS Act was repealed and was replaced by Public Private Partnership Act B.E. 2556 (2013) (“PPP Act”). However, at the present time, there is no updating progress of this matter and it is unknown to the Company to what extent the PPP Act would affect this matter. Further, the final conclusion of the Cabinet or the way the Cabinet would exercise its discretion on this matter is still unknown to the Company. The Company is not, therefore, in a position to evaluate the potential impacts from this matter.

Nevertheless, as a result of the Disputes Settlement Agreement between CAT, the Company and dtac TriNet, the risk from being requested by CAT for the revision of the revenue sharing in relation to the 3rd Concession Amendment is eliminated.

39.4 Risk from legal or contractual restrictions on foreign ownership

The Company’s business is subject to the foreign shareholding restrictions pursuant to the Foreign Business Act, B.E. 2542 (1999) (the “FBA”).

Violation of foreign shareholding structure would cause the Company and/or its subsidiary companies to be revoked their telecommunications business licenses or could not operate telecommunications businesses.

However, Section 4 of the FBA provides to the effect that a company is considered a Thai company if less than 50 percent of its shares are held by non-Thai nationals.

From the register of shareholders of the Company, less than 50 percent of the total issued shares of the Company are held by non-Thai nationals. The Company is therefore considered a Thai company for the purpose of Section 4 of the FBA. In September 2012, the Company obtained a written confirmation from the Ministry of Commerce, in charge of the FBA, confirming that the Company is a Thai company under Section 4 of the FBA.

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Nevertheless, the Company views that it does not have clear policy in the interpretation and enforcement of the FBA in respect of the foreign investment shareholding. This cause the Company might face this risk in business operation as the FBA has been enforced for more than 10 years but there has been no Supreme Court’s precedent or clear guideline issued by the Ministry of Commerce relating to the nominee arrangement under Section 36 of the FBA so that the Company can apply to evaluate or assess the impact of the enforcement or interpretation of such provisions of the FBA that may have on the Company and its subsidiary companies.

As a result of the unclear in interpretation and enforcement of the FBA, on 14 June 2011, a company submitted a criminal allegation to the Royal Thai Police against the Company (including directors and some shareholders of the Company and directors of the said shareholders) claiming that the Company operated telecommunication business in violation of the FBA which is under proceedings of the Royal Thai Police. On 22 September 2011, one of the Company’s minority shareholders (holding 100 shares) filed a complaint against state agency, including NBTC with the Central Administrative Court citing that the Company is a “foreigner” under the FBA.

On 26 November 2015, the Central Administrative Court ruled that the court cannot revoke the Company’s right to operate. However, the court has ordered NBTC to perform its duty by investigating whether the Company is in breach of the Foreign Dominance Notification and whether such task shall be accomplished within 90 days from the date the verdict of this Court becomes final. The NBTC and the Company have filed an appeal to the Supreme Administrative Court. Currently, these two cases are under proceedings of the Royal Thai Police and the Supreme Administrative Court.

Based on the Company’s external legal counsel opinion, the Company’s management believes that the Company is not in breach of the NBTC Notification on Foreign dominance B.E. 2554 that could lead to revocation of the right to operate telecom business of the company and its subsidiaries.

The Company believes that the Company is not a “foreigner” and has fully complied with the FBA. However, if, finally, the Company is ordered (by the Supreme Court’s judgment) not being a Thai entity under the FBA and the Telecommunications Business Act, and such event is not remedied, it would cause NBTC to revoke the Company and its subsidiary’s right to operate telecom business.

39.5 The NBTC Notification on Foreign dominance, B.E. 2555 (2012)

NBTC has issued the NBTC Notification on Foreign Dominance, B.E. 2555 (2012) (“FD Notification”) which became effective on 24 July 2012. Under the FD notification, the term “foreign dominance” is defined as “foreigners having controlling power or influential power, either directly or indirectly, by foreigner in policy making, management, operations, appointment of directors, or appointment of senior executives, that may affect the management or the business operation of a holder of a license or an applicant for a license by way of (a) holding shares with voting rights a half or more of the total voting rights, (b) having the authority to control the majority votes at a shareholders’ meeting or (c) the appointment or removal of a half or more of the total directors”.

The Company is of the view that:

(a) at the date NBTC issued the FD Notification, it would not be applicable to the Company who has rights to operate mobile services under the Concession Agreement and the Company’s rights are protected by Section 305 (1) of the Constitution of the Kingdom of Thailand B.E. 2550 (2007) and the first paragraph of Section 80 of the TBA; the Company’s legal advisor also has the opinion in line with the Company’s view, however, the FD Notification was enacted, therefore, the Company has already submitted a certificate of compliance with the FD Notification to NBTC as required by the FD Notification and

(b) in case of the Company’s subsidiary (namely dtac TriNet), since dtac TriNet is an IMT 900 MHz, 1800 MHz and 2.1GHz spectrum licensee and type three telecommunications business licensee, it has already submitted a certificate of compliance with the FD Notification to NBTC as required by the FD Notification.

Nevertheless, NBTC may not agree with the Company’s view mentioned above. However, based on NBTC’s explanation during the public hearing of the FD Notification, in particular, on the definition of “foreign dominance” in 2012, the Company is of the view that the Company and dtac TriNet should not fall within the definition of the “foreign dominance” under the FD Notification. However, this still has a risk on uncertainty of the enforcement of the FD Notification and could cause adverse impact to the business of the Company and its subsidiary.

222

40. Segment information

Operating segment information is reported in a manner consistent with the internal reports that are regularly reviewed by the chief operating decision maker in order to make decisions about the allocation of resources to the segment and assess its performance.

The Company and its subsidiaries’ have two reportable segments as follows:

(1) Mobile telephone service and related services, and

(2) Sales of handsets and starter kits.

The chief operating decision maker monitors the operating results of the business units separately for the purpose of making decisions about resource allocation and assessing performance. Segment performance is considered on the group operating profit or loss and total assets, on a basis consistent with that used to measure operating profit or loss and total assets in the financial statements.

Below is the revenue, gross profit (loss) and total assets of the Company and its subsidiaries’ segments for the years ended 31 December 2019 and 2018 by segments.



Mobile telephone service and related services Sales of

handsets and

starter kitsMobile

telephone service

Other Total Consolidated

Revenues

External customers 63,332,725 9,205,827 72,538,552 8,628,584 81,167,136

Total revenue 63,332,725 9,205,827 72,538,552 8,628,584 81,167,136

Operating result

Gross profit (loss) of segments 26,973,560 (1,920,240) 25,053,320

Other incomes 37,093

Selling, distribution and service expenses (4,716,984)

Administrative expenses (10,713,409)

Finance cost (3,269,350)

Profit before income tax expenses 6,390,670

Income tax expenses (968,871)

Profit for the year 5,421,799

Segment total assets

Additions to non-current assets other than financial instruments, deferred tax assets, and other non-current assets 15,348,822 - 15,348,822

223




Mobile telephone service and related services Sales of

handsets and

starter kitsMobile

telephone service

Other Total Consolidated

Revenues

External customers 65,324,577 2,195,987 67,520,564 7,769,101 75,289,665

Total revenue 65,324,577 2,195,987 67,520,564 7,769,101 75,289,665

Operating result

Gross profit (loss) of segments 20,065,725 (2,055,676) 18,010,049

Other incomes 244,264

Selling, distribution and service expenses (4,778,367)

Administrative expenses (17,923,930)

Finance cost (1,351,242)

Loss before income tax expenses (5,799,226)

Income tax expenses 1,430,537

Loss for the year (4,368,689)

Segment total assets

Additions to non-current assets other than financial instruments, deferred tax assets, and other non-current assets 20,185,869 - 20,185,869

The following table presents segment assets of the Company and its subsidiaries’ operating segments as at 31 December 2019 and 2018:

224


Segment assets

Mobile telephone

service and related services

Sales of handsets and starter

kits

Total segments

Unallocated assets Consolidated

At 31 December 2019 126,297,627 1,484,708 127,782,335 39,556,481 167,338,816

At 31 December 2018 115,265,455 2,398,770 117,664,225 33,293,430 150,957,655

Geographic information

The Company and its subsidiaries are operated in Thailand only. As a result, all of the revenues and assets as reflected in these financial statements pertain to the aforementioned geographical reportable.

Major customers’ information

For the year 2019 and 2018, the Company and its subsidiaries have no major customer with revenue of 10 percent or more of an entity’s revenues.

41. Provident fund

The Company and its employees have jointly registered a provident fund scheme under the Provident Fund Act B.E. 2530. The fund is contributed to the employees at a rate of 2 - 15 percent and the Company at a rate of 5 percent of their employees’ salaries. The accumulated contributions of the employee and the Company and the fund earnings from the contributions will be paid to the employees upon termination in accordance with the rules of the fund. The fund is managed by TMB Asset Management Company Limited. For the year ended 31 December 2019, Baht 108 million (2018: Baht 96 million) has been contributed to the fund by the Company.

42. Premium on ordinary share/Legal reserve

42.1 Reduction of legal reserve and premium on ordinary shares to offset the deficits

On 28 January 2019, the Company’s Board of Directors’ Meeting passed a resolution to propose for the Annual General Shareholders’ Meeting of 2019 for approval the reduction of legal reserve amounting to Baht 466 million and premium on ordinary shares amounting to Baht 386 million so as to reduce the deficits in the Company’s separate financial statements which, subsequently, on 4 April 2019, the Annual General Shareholders’ Meeting passed a resolution for the aforementioned reduction of legal reserve and premium on ordinary shares.

42.2 Appropriation of legal reserve

Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside a statutory reserve of at least 5 percent of its net income after deducting accumulated deficits brought forward (if any), until the reserve reaches 10 percent of the registered share capital. The statutory reserve is not available for dividend distribution.

43. Event after the reporting period

At the Company’s Board of Directors’ Meeting, held on 28 January 2020, the Board passed a resolution proposing the payment of dividend of Baht 1.61 per share from the retained earnings as of 31 December 2019, for approval by the Annual General Meeting of the Company’s shareholders.

44. Approval of financial statements

These financial statements were authorised for issue by the Company’s Board of Directors on 28 January 2020.

Glossary. Annual Report 2019

225

GLOSSARY

3G Technology Third generation mobile phone technology

4G Technology Fourth generation mobile phone technology

Access Charge (AC) The charge paid to TOT for an access to TOT’s telecommunications network

AIS Advanced Info Service Public Company Limited

AWN Advanced Wireless Network Company Limited

ARPU Average revenue per user per month

Bandwidth The width of frequency band

BMA Bangkok Metropolitan Area

BTO Build-Transfer-Operate

CAT CAT Telecom Public Company Limited (formerly the Communication Authority of Thailand)

CAPEX Capital expenditure

CDR Call Detail Record

CDP The Central Depository (Pte) Limited

Concession Agreement Agreement to Operate and Provide Cellular System Radio Telecommunication Service between CAT and the Company (as amended)

DPC Digital Phone Company Limited

DTN, dtac TriNet dtac TriNet Company Limited

EDGE Enhanced Data-Rates for GSM Evolution

Foreign Business Act Foreign Business Act B.E. 2542 (1999)

Free cash flow EBITDA-CAPEX

FY Fiscal year

GB Giga byte, which is a measurement of data volume

GPRS General Packet Radio Service

GSM Global System for Mobile Communications

GHz Giga Hertz, which is a measurement of frequency

HSPA High Speed Package Access, a 3G technology

IMEI International Mobile Equipment Identity

Interconnection Charge (IC) The cost-based charge paid to other operators for connecting into their networks

IMT International Mobile Telecommunications

IVR Interactive Voice Response System

LTE Long-Term Evolution, a 4G technology

MB Mega Byte, which is a measurement of data volume

MHz Mega Hertz, which is a measurement of frequency

Glossary

226

MMS Multimedia Messaging Service

MNP Mobile Number Portability

MOU Minute of use per user per month

MVNO Mobile Virtual Network Operator

NBTC National Broadcasting and Telecommunications Commission

NTC National Telecommunications Commission, in accordance with the Act on Organization to Assign Radio Frequency and to Regulate the Broadcasting and Telecommunications Services B.E. 2543 (2000)

Net addition The number of new subscribers acquired less the number of subscriber leaving during the period

Net debt Interest bearing debt less cash and cash equivalents.

Net debt to Equity Net debt divided by equity

Net debt to EBITDA Net debt divided by EBITDA

OPEX Operating expenses, primarily consisting of network operating expenses, sell & marketing expenses and general administrative expenses

PCN 1800 Digital GSM wireless telecommunications service under the 1800 MHz frequency band

Penetration Rate The number of SIM cards divided by the number of population

QoQ Quarter on Quarter

Refill card Refill card for prepaid service

SEC Securities and Exchange Commission

SET The Stock Exchange of Thailand

SGX-ST Singapore Exchange Securities Trading Limited

SIM card Subscriber identity module card

Smartphone Mobile phone offering advanced capabilities, often with PC-like functionality

SMS Short Message Service

Spectrum The radio frequency bands used for telecommunication service

Telecommunications Act Telecommunication Business Operation Act B.E. 2544 (2001) (as amended)

TOT TOT Public Company Limited (formerly Telephone Organization of Thailand)

True Move True Move Co., Ltd.

TSD The Thailand Securities Depository Co., Ltd.

UCOM United Communication Industry Public Company Limited

USO Universal Service Obligation

VAS Value Added Services

VoIP Voice over Internet Protocol

WiFi Wireless Fidelity, a type of wireless networking protocol

YoY Year on Year

Glossary. Annual Report 2019

227

Total Access Communication Public Company Limited319 Chamchuri Square Building, 41st Floor,

Phayathai Road, Pathumwan, Bangkok 10330

Tel. (66 2) 202 8000

Fax (662) 202 8296

www.dtac.co.th

COVER รอจากลูกค้า

A Year of Turning Points

SUSTAINABILITY REPORT2019 dtac

TABLE OF CONTENTS

2 Message from the Chair of the Board of Directors and Chief Executive Officer

6 About dtac

12 Value Chain and Materiality in Sustainability

18 Sustainability at dtac

52 Suppliers

62 dtac People

72 Regulators and Government Agencies

80 About This Report

22 Community and Society

44 Customers

NEVER STOP...

Deep changes are taking place in Thai society, in technology and in consumers’ behaviors. Despite flat spending power, mobile users consume ever more data and expect more from their digital services. Moreover, the arrival of 5G and AI will further accelerate the transformation of how we work, play and consume content. At dtac, we are fully committed to getting our stakeholders—and ourselves—ready for this future, so that connectivity continues to empower us all. As such, our objective for 2019 was to build a strong foundation on which dtac could transform and grow for the years to come.

SERVING MULTIPLE STAKEHOLDERSThis year, we reinforced our focus on customers’ needs, rolled out thousands of new sites, and greatly improved our time to market and distribution footprint. We vowed to treat our customers more fairly, better listening to their experience, and fixing that experience.

But customers are not our only stakeholders. dtac is evolving towards a more holistic and structured corporate responsibility framework that truly promotes sustainable economic and social growth within a wider community. One way to make this shift successful is to ensure that our corporate purpose is both defined and realized to serve multiple stakeholders more effectively.

Message from the Chair of the Board of Directorsand Chief Executive Officer

03

SUSTAINABILITY REPORT 2019 SUSTAINABILITY REPORT 2019

use the internet in a responsible way, working with both the social sector and government sector. About 25,000 children and teachers have already been certified and are now taking the lead on training their peers.

We also believe mobile connectivity constitutes a formidable economic opportunity for low-income earners. Smallholder farmers, for instance, have some of lowest incomes in Thailand despite agriculture’s outsize share of GDP. As a leading telecommunication company, dtac has connect-ed them with advanced technology, like Internet of Things (IoT) solutions, to elevate their farming capacity and marketing skills, helping them reach out to consumers directly on a wider scale. As such, the Smart Farmer project helps farmers increase yields while reducing operations costs.

In addition, with the Net ARSA program, dtac provides training on harnessing the power of social media to develop new income streams for small shop owners, farmers or artisans. By selling online, they find new customers and cut out the middlemen, thereby selling more and at better prices.

These projects underscore the efforts of dtac and our partners, such as the Ruam Duay Chuay Kan Sam Nuek Rak Ban Kerd Foundation, to achieve digital inclusion and reduce inequality. This aligns with the UN Sustainable Development ‘Goal 10: Reduced Inequalities,’ particularly Target 1.1: “By 2030, eradicate extreme poverty for all people everywhere, currently measured as people living under $1.25 a day.”

NEVER STOPWith 5G on the horizon, we believe the role of

mobile network operators will continue to evolve in exciting new ways. In 2019, we initiated activities to prepare ourselves from a network and technology standpoint: transitioning to a fully virtual core network and upgrading our entire IT system to a much more defensible architecture.

In addition to technology, the partnerships and new ways of work we initiated will be critical to bolstering Thailand’s 5G future. Turning opportunities into scalable innovations will require industries and governments to pool their competences and start cocreating services. In 2019, we initiated numerous such initiatives,

04 05

In 2019, we thus improved the way we engage with our key stakeholders so that we better understand their pain points and expectations. Employees, for instance, voiced concerns about having equal opportunities in career advancement. Compared to previous years where our focus was training, benefits, health and safe-ty at work, their feedback prompted the creation of new policies and a career development plat-form, PromptGROW.

Together, these changes got us back to growth in 2019 and now provide a solid base to never stop improving in 2020 and beyond. Our hope is therefore that our sustainability initiatives will not only respond to our direct stakeholders’ concerns, but also become a best practice for the industry.

RESPONSIBLE BUSINESS Despite our ever-changing business environment, responsible business conduct remains a key priority. And dtac embeds this principle into every single part of the business operations.

Our performance in strengthening and enforcing the dtac Code of Conduct and other policies that aim to promote fair and transparent business practice have always been at the forefront of industry practices. We have been rated ‘Excellent in Corporate Governance’ by the Collective Action Coalition for Anti-Corruption (CAC) every year since 2010.

Regarding external stakeholders, dtac remains fully committed to ensuring mobile connectivity has a positive impact on Thai society. For instance, we initiated the very first online curriculum in Thailand to teach children how to

Ms. Alexandra Reich, Chief Executive Officer

Mr. Boonchai Bencharongkul,Chair of the Board of Director

both with governmental organizations such as the Digital Economy Promotion Agency (depa).

This past year was a turning point for dtac, one we hope to be a sustainable foundation to never stop empowering Thai society. We would like to express our sincere gratitude to everyone who helped make it possible: our customers, our shareholders, our employees, our many partners and our public sector stakeholders. More than ever, it is by working together that we can deliver the full value of connectivity to Thai society. And dtac will never stop pursuing that ambition.


In 2019, we continued to cope with the transition from a concession regime to a license regime that was pending since late 2018. We focused on the business turnaround with the strategy of being consistently honest, simple and human, which was proven successful.

2019: A YEAR OF TURNING POINTS

Aboutdtac

It is by keeping this promise that reached a significant turning point in increasing customer satisfaction measures, service quality of business performance.

NEVER STOP...Our commitment to all stakeholders that we constantly improve our services and strive to empower society.

07


dtac BY THE NUMBERSBusiness Performance

Network Expansion

Service

Employees

Pre-paid Subscribers: 14,214,444

Post-paid Subscribers: 6,427,329

จ�ำนวนกำรใช้บรกิำรเฉล่ียต่อเดือน:In 2019, dtac incorporated a customer-centric approach to its business operations which led to replacing internal network metrics with the Network Net Promoter Score (Network NPS, a customer satisfaction index) and number complaints from customers.

08 09

The number of base station towers grew 60 percent since 2016.

Number of Subscribers: 20,641,773

Number of employees:

3,948

All dtac service centers:

469

Number of dtac hall: 51

Number of dtac centers: 418

1,533

2,415

31%

11%

39%

69%

89%

61%

• Average number of transaction services at dtac halls and dtac centers monthly: 1.41 million

Network Net Promoter Score increased by

Number of customer complaints decreased by

2019

+400%

We want to be a trusted partner with strong integrity, working to reduce inequalities, raise standards in our operations and supply chain, and deliver on safety, security and data privacy regulations.

2016 2017 2018 2019

49,5434G

37,9153G

10,5762G

51%

10%

39%

Number of Base Station Towers:

98,034

-50%


dtac Purpose:Connecting you to what matters most. Empowering Societies.

Thailand is the world’s all-time champion of the highest number of mobile phone users. That means the telecommunication industry has become increasingly competitive. dtac has turned this critical situation to an opportunity to raise business competitiveness and standards with the four strategies strengthened to improve how we serve customers and other stakeholders and to ensure that our business will bring a mutual growth to all.

SIMPLIFICATION & EFFICIENCY:We’re ready for the futureWe continuously work to make our operations simpler and more efficient. We do so to create seamless, worry-free experiences for our customers and to facilitate long-term sustainable growth for our business. We modernize our organization and operating model, optimize our network cost on a continuous basis.

RESPONSIBLE BUSINESS CONDUCT:We positively contribute to societyWe want to be a trusted partner with strong integrity, working to reduce inequalities, raise standards in our operations and supply chain, and deliver on safety, security and data privacy regulations.

WINNING TEAM:A lean, agile & strong organizationTo ensure we stay relevant to our customers, react faster to their needs and ser ve them more efficiently, we continue to build an organization with strong and future-proof capabilities, an agile way of work and a simple and lean organizational structure. We believe in challenging the status quo, customer obsession, honesty, simplicity and fun.GROWTH:

Like our customers, we never stopWe capture grow th oppor tunities by of fering unbuffered video experience nationwide at a competitive price point while being positioned as simple, honest and human operator. We provide a seamless customer experience by following an omnichannel approach, optimizing our distribution channels and leverage digitization and Artificial Intelligence. This allows us to retain and win back our prepaid customers, keep our growth momentum in postpaid and accelerate our B2B business. In parallel, we are incubating new 5G product and ser vices like VR and AR to delight our customers.


The Value Chain and Materiality in Sustainability at dtac

As a leading telecommunication business, dtac focuses on improving technology and workforce to stay competitive and bring value to consumers and society. In 2019, with a goal of returning to growth and to stay relevant and competitive in the market, dtac explored new ways of working and products for new opportunities. dtac focuses on leveraging its expertise and resources in mobile digital technology to strengthen those services. dtac thus had no significant changes in the business operations and supply chain. Nonetheless, we kept improving the chain to bring the highest possible value to consumers and other stakeholders.

The Value Chain and Materiality in Sustainability

12 13


Improve technology and network expansion to ensure equal access to mobile technology while keeping a strict cybersecurity and personal data protection measures

Products and services that truly bring value to consumers while keeping a transparent and fair communication with consumers

Reduce inequalities in access to internet and digital technology while building a safe internet ecosystem as well as raising work standards in the telecommunication industry and environmental conservation

14 15

dtac VALUE CHAIN

Good governance and strong dtac Code of Conduct enforcement while supporting the national agenda in socio-economic development

Provide skills development for career advancement and support quality of life improvement with equal and fair evaluation and reward management.

Marketing& Sales

Network & TechnologyEmployees Customers& Societies


2

Importance of social causes to stakeholders

Relevance to dtac’s long-term business operations

1

16 17

MATERIALITY ASSESSMENT IN SUSTAINABILITYdtac also conducts a materiality assessment to identify new issues and emerging risks related to economic, social and environmental development that are in conjunction with our stakeholders.

dtac’s Sustainability Report includes material topics that are in line with stakeholders’ expectations and dtac’s significant impacts. dtac organized workshops with business functions that represent each group of stakeholders to select major issues on the foundation of:

The results from the workshops revealed the following material topics that are a focus of dtac’s stakeholders:

Regulators and Government Agencies: Good governance, anti-corruption and transparency

Employees: Equal opportunities in career advancement, benefits and reward management.

Suppliers: Fair treatment to all suppliers and transparency in a selection process.

Customers: Service quality, clear and honestcommunicationon terms and conditions, and personal data protection.

Community and Society: Digital technology to promote well-being and socioeconomic growth, and environmental protection.

Impo

rtan

t ESG

Issu

es to

Sta

keho

lder

s

Customers’ Personal Data Protection

Good Govermance

Anti-Corruption

Law & Regulatory Compliance

Fairness & Transperency

Procurement & Supply Chain

Consumers’ Well-Being

Employee Equality


Sustainability at dtac

dtac has developed the Sustainability Policy based on various international standards, such as the UN Universal Declaration of Human Rights, and ILO Core Conventions, in conjunction with assessments and discussions on important sustainability issues with stakeholders. This is to ensure that the company’s business operations can truly create positive economic, social, and environmental impact.

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Sustainability direction is implemented across dtac.

Responsible business practice and transparency carried out.

Reporting and transparency on sustainability issues are carried out.

Benefits and positive impact of dtac’s core business is leveraged for the country’s economic and social growth.

Sustainability risks and opportunities are assessed and managed over time for continuous improvement.

dtac SUSTAINABILITY WORK PRINCIPLES

Guided by international standards and our operational experience, dtac works systematically to address risks and to maximize the positive impact of business operations. dtac is committed to strengthening transparent and anti-corruption practice, human rights integration to the dtac Code of Conduct to business operations as well as in the supply chain. We also assess our roles and responsibility as a telecommunication leader to identify opportunities to participate in the national economic and social development agendas that are beyond compliance to laws and regulations.

dtac’s purpose, ‘Connecting you to what matters most – empowering societies,’ reflects our determination and dedication to using its digital technology, expertise, and infrastructure to increase Thailand’s economic and social development capabilities, especial-ly in the area of ‘reducing inequalities’ and ‘raising standards’. To reduce inequalities, dtac’s efforts are in line with the UN Sustainable Development Goal 10 Reduced Inequalities. Embracing the ‘Creating Shared Value (CSV)’ principle is another approach to ensure that dtac can clearly address stakeholders’ problems and design solutions that will lead to long-term and sustainable development.

RESPONSIBLE BUSINESS

EMPOWER SOCIETIES

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Community and Society

Doing business based on developing innovations and enhancing efficiency that supports Thailand’s economic growth is not the only focus for dtac. Sustainability and responsibility to the community and the society are always an essential part as well. This principle originates from our belief that if the community, the society, and the country develop sustainably and stably, our business will grow in accordance with the development.

At dtac, community and society are the most significant stakeholders in the business. That is the reason “Creating Shared Value,” or CSV, has always been key for us.

Electronic waste and environment

Fair treatment and safety in communities with dtac’s base station towers.

Cybersecurity

Equal access and digital skills development

Working closely with academics, experts and professionals from civil society allowed dtac to see that the telecommunication industr y could potentially produce some adverse effects. The preventive strategy dealt with this challenge focusing on four issues:

Throughout 2019, dtac played an important role in setting the agenda and providing knowledge about the effects that the telecommunications industry has on society. The work included organizing and supporting various activities that prevented social problems that might be caused by the business. dtac also provided social listening in the communities in order to gather the facts and feedbacks, leading to practical problem-solving solutions.

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Cyberbullying is a new form of bullying that comes with technology. It makes the act easier because anyone can be an attacker. On the other hand, in a cyber world, a victim could be anyone as well. That explains why the internet is a platform for cyberbullying.

For the new generation of children, both attackers and victims are drawn closer to each other, which means more acts of revenge. Moreover, cyberbullying often begins with real-life bullying. What starts with physical bullying can eventually transform into social bullying. The use of technolo-gy makes this matter worse and more intense in terms of both actions and frequency. Even though cyberbullying doesn’t cause physical harm, it leaves mental pain because cyberbullying has no end.

Assistant Professor Dr. Thanee ChaiwatDirector of Chulalongkorn Experimental Economics Center (CEEC), Chulalongkorn University Lead Researcher on “Bullying in Secondary and Vocational Schools in Students in Bangkok Metropolitan Area”

CHILDREN AROUND THE WORLD ARE AT RISK.In October 2019, International Telecommunication Union (ITU) and UNESCO launched a report on internet safety. The results are as follows:

of ‘rules and conditions’ of online products are too complicated for children

to understand.

of children aged 9 – 17 unintentionally get

exposed to pornography

of those reported that they were scared and stressed out as result

of online activity.

20% 25% 99%

Safe Internet Project

Since the internet is part of people’s lives around the word, dtac chooses to work proactively to build digital resilience that will allow children to use the internet safely.

Although internet access is widespread and affordable, many children still cannot make the best use of it. Furthermore, many of them put themselves at risk from overusing the technol-ogy or interacting with ill-intentioned people.

In 2019, ‘Child Online Safety’ was one of the global agendas. International organizations, government agencies, scholars, and civil societies from around the world have realized that the UN Sustainable Development Goal 16 “Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels” is not be possible without a safe digital ecosystem.

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Children and youth are the largest vulnerable group in the online world. Their global population is

2.2 billion.

More than 56% of children aged 8 – 12 in 29 countries around the globe tend to spend too much time on the internet and have at least one risk in one of these issues:• cyberbullying• video game addiction • sexual behaviors • offline meetings

ON MAKING THE INTERNET A SAFER PLACEdtac realizes that, as one of Thailand’s leading telecommunication service provider, we are part of the internet ecosystem and it is our responsibility to make the internet a safer place for children and youth.

That is how our project ‘Safe Internet’ began in 2015. The goal is to provide skills and build resilience in for children and youth, allowing them to roam the internet safely, properly, and creatively. Building on the work down since 2015, in 2019, dtac worked under three main pillars.

Letting children stay with the internet by themselves without prop-er guidance is actually a form of child’s rights violation already. They should be in a safe and healthy environment that fosters their learning capabilities and physical growth as a basic right of a child. But we’ve let them overuse the internet which puts them at a much higher risk of being exposed to violent online games and pornographic contents. We have received about 100,000 reports of websites with illegal pornographic contents from users all over the world. In Thailand, there have been reports of children sexual abusing younger children because they want to copy what they see from those websites. We see many children using a mobile phone to record and share video clips of misconduct online.

A survey in 2019 on 15,318 children, aged 6-18 years old, about online risk exposures by Internet Foundation for the Development of Thailand and Child Online Protection Action Thailand, or COPAT, found that:

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Dr. Srida Tantha-athipanichDirector of Internet Foundation for the Development of Thailandand Children and Youth Online Protection Sub-Committee Member,Ministry of Social Development and Human Security

• 31 percent of them were cyberbullied, where 49 percent of victims were in LGBTQ groups• 40 percent of them did not tell anyone about the incidents.• 34 percent of them sought revenge or conducted a form of online violence to other internet users.

In fact, pornography has become a bigger concern. We found that 74 percent of the children had browsed through pornographic websites, and 50 percent of them were exposed to child pornography. These are totally illegal. 6 percent of the children possessed and shared child pornographic content to other internet users. 2 percent of them reported that they created such content with their phone and sent it to a stranger.

Our children are facing horrific online violence. And, it’s everyone’s responsibility to make the internet safe and healthy for all children.


Knowledge Management in Child Online Safety1

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Based on this study, dtac continued to look further into this issue by researching about online behaviors among 200 teachers from all over the country. The study showed that even though

dtac launched SafeInternetForKid.com (based on an online knowledge platform developed in collaboration with Parent Zone and Telenor Group). It is designed for teachers and parents to utilize the materials and content in the platform to increase digital resilience in children. 440 teachers who participated in this training were able to use what they learned in their classes, accessing over 23,766 students all over the country.

dtac partnered with the Internet Foundation for the Development of Thailand to organize the ‘Young Safe Internet Leaders Camp’. The purpose of this activity was to develop 100 young responsible netizens from 20 schools across Thailand. These young netizens returned to their schools and expanded their knowledge and skills in online risks to more than 7,000 students. This activity is supported by Digital Economy Promotion Agency (depa) and Thai Media Fund.

Awareness and Capacity Building for Children and People Around Them

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Communication and Policy Advocacy

dtac continuously communicates with the public to open a window for society to see the importance of internet safety for children and youth. Additionally, our work allows the public to be able to access researches and support the use of knowledge from these researches for academic purpose and driving policy.

In addition to that, dtac raised awareness on cyberbullying on the Stop Cyberbullying Day held annually every third Friday of June. Each year, dtac conducts a campaign to encourage teachers, parents, and society to acknowledge and prevent online risks.

training program is just in its beginning and requires continuous work to create a larger impact. However, from an assessment on the use of SafeInternetForKid.com in 247 grade-8 students in 6 schools in Bangkok with CEEC, dtac has seen some impacts.

SafeInternetForKid.com :

The first three issues that SafeInternetForKid.com helps improve the students are:

dtac had strong confidence in finding knowledge-based solutions. We supported the use of global knowledge and adapted it to Thai culture as well as created new knowledge to understand the roots of problems and current situations in the country.

dtac worked with Chulalongkorn Experimental Economics Center (CEEC), Chulalongkorn University, to conduct a study about bullying in 1,606 secondary and vocation-al school students in Bangkok. We studied to understand the behaviors of children and youth in secondary schools and vocational schools.

This research, which is the first of its kind in Thailand, revealed that teachers and parents are among the last group of people whom children would reach out to for help. Only 33% of the target group decided to consult with their teachers and parents. However, according to the in-depth interviews conducted during the research, students reported that they needed help from teachers the most when facing bullying at school, but they decided not to do so because teachers were not capable to understand the situation or provide a fair treatment.

of teachers believe they have roles and responsibilities to improve their students’ online skills and provide digital resilience

of them are confident in their skill and knowledge enough to teach their students.

of the teachers stated that they needed more training from experts or more digital tools to support them

89%

57%

95%

Netiquette and Kindness

Online Risks Safe Internet Use

Level of knowledge before the course

After the course

56% 67

% 73%

59% 66

%

42%

At the international level, dtac collaborated with the Digital Economy Promotion Agency and Telenor Group, along with experts and committees who are in the fields of children and education from ASEAN. Together with all partners, dtac organized an operational meeting called the ‘ASEAN Stop Cyberbullying Workshop’ to come up with solutions for cyberbullying in this region and stressed three issues: harmonization of legal and regulatory frameworks across ASEAN, interventions and solutions must address the voices of target groups, digital resilience among children should be incorporat-ed as foundational objectives of national curricula.

14%

8% 7%

Based on the research, dtac designed a tool to improve the necessary skills and knowledge for teachers and parents. The tool is available both online and offline.


6.75% of the students shows a significant increase in

knowledge about digital resilience.

Smart Farmer

dtac strongly promotes the use of technology in smallholder farmers as one strategic approach to reduce inequalities in the country.

Currently, unequal access to technology is a major challenge in the Thai economic development. As a solution, dtac launched the Smart Farmer initiative since 2008 with a strong support and collaboration with Ruam Duay Chuay Kan Sam Nuek Rak Ban Kerd Foundation, setting out to develop the agricultural sector to become an important foundation to Thailand’s economic and social development. Each year, dtac focuses on developing new technology to meet the needs of smallholder farmers and solve their problems, all while helping them build necessary skills for entrepreneurship.

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Back in 2008, when mobile phones still had a monochrome display, dtac initiated a news alert

service via SMS in three news categories: rice, field crops and livestock. Farmers could subscribe to this

SMS service for free. dtac also launched a call center line *1599 for farmers with inquiries where

information was provided by Ruam Duay Chuay Kan Sam Nuek Rak Ban Kerd Foundation. For

non-dtac-customer farmers, a call center line 0-2016-5609 was also set up for the same pur-

pose.

The smartphone era has brought a huge change to the industry and farmers’ behaviors in building a community and skills sharing. dtac then worked with Ruam Duay Chuay Kan Sam Nuek Rak Ban Kerd Foundation to develop a mobile application, Farmer Info, as a new channel for farmers to support their farming and income-generating plans with useful information about agriculture in articles, infographics and VDO clips. Farmers who are dtac customers can download and use the application at no cost. Since launched, there are 151,000 users subscribed to this application. In 2019, it was accessed by users about 2,660,000 times.

In collaboration with the Department of Agriculture Extension, Ministry of Agriculture and Cooperatives, dtac offered training course in ‘Online Marketing’ to

young Smart Farmers (18-45 years old). The objective is to ensure that new-generation farmers can utilize internet and social media to

strengthen their marketing and sales opportunities. The course entails more than just setting up

an online shop on a e-marketplace, but we train farmers on packaging, pricing, photography to

increase product views. To date, we have trained about 125,000 young farmers across Thailand, and on average they could increase revenue by 25 percent

after applying these online marketing skills.

The rise of big data and machine learning technology has brought the Smart Farmer project to another level when dtac connected the farmers with such technology through the ‘Farm Man Yum Service.’ Powered by Ricult, an agri-tech startup with expertise in using the big data technology to collect and process weather data from large stations to provide area-specific weather forecasts, developed the service to help smallholder farmers in the Ruam Duay Chuay Kan Sam Nuek Rak Ban Kerd Foundation’s network manage their farming more effectively and efficiently. dtac supported with a communication campaign to increase use of the application, reaching out to about 20 million customers.

CONNECTING FARMERS TO ICT

2008

2016dtac holds regular workshops together with the Department of Agricultural Extension, under the Ministry of Agriculture and Cooperatives, to teach smallholder farmers to use the internet to increase sales and income, set up enticing online shops and tap new markets without a middleman.

The year 2017 saw a significant development when dtac, the Department of Agricultural Extension, and the National Electronics and Computer Technolo-gy Center (NECTEC) launched “Precision Farming IoT,” a pilot project to use Internet of Things (IoT) technology in the greenhouse management of 30 farms across 23 provinces. The project was aimed at supporting smallhold-er farmers to access advanced technology to improve their production.

In 2019, dtac and Sal Forest carried out an assessment of the “Precision Farming” project and found that smallholder farmers expressed good attitudes towards technology and were able to use it to increase yields and income as well as reduce costs. dtac therefore is on a course to transform the project to address more commercial value with the smallholder farmers, which we believe will promote sustainable development to Thailand.

Onwards

News Alert via SMS and *1599 Call Center Service

Farmer Info Application

Going to Online Marketplace

Big Data Technology

2013

2018

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FROM FARMER TO SMART FARMER


2019 Smart Farmer Award Winners

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Adding value to organic bananas by inventing a design package to be more custom-er-friendly which helps sustain his community by using local materials in the process.

RAK BAN KERD FARMER AWARDSAnother approach to strengthen the Thai agriculture is to create a network of outstanding farmers to promote knowledge sharing to other smallholder farmers. dtac has thus engaged with Ruam Duay Chuay Kan Sam Nuek Rak Ban Kerd Foundation to drive the ‘Sam Nuek Rak Ban Kerd Farmers’ (Farmers who are grateful to their hometown) Foundation since 2008.

In 2019, the project wanted to highlight ‘safe and responsible farming’ with an end-to-end management approach aiming to distribute high-quality fresh produces to consumers. The Rak Ban Kerd Farmer Awards program then sought to promote outstanding farmers who demonstrated the ‘Integrated Organic Farming’ concept – upholding the four-pillar values (health, ecology, fairness and care) across the value chain from farming and harvesting to processing and product. Driven by the concept of New Theory Agriculture originated by King Rama IX, he started

an organic farming on his 14-rai farmland which became a new agritourism spot combining with a tree bank, an organic farm, etc. His model is proven successful by sustainably benefiting every stakeholder in the value chain – farmer, community and society.

Leading an organic rice producer community in northeastern Thailand by creating a strong network to operate their own export-quality organic rice brand, ‘Ban Chiang Peng Rice.’

First Runner UpMr. Kosin SuwannapakdiPakdi Farm, Maha Sarakham

Second Runner UpMrs. Gluay DuangkamBan Farm Organic, Yasothon

WinnerMr. Preecha NgogsimmaWanaphan Organic Garden, Khonkaen

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The telecommunications industry is a key play-er in saving the environment since the indus-try helps improve efficiency in productions, consumptions, and services by saving resources. Let alone the fact that the industry tries its best to use less energy and reduce greenhouse gas emissions continuously.

However, the critical problem that affects the environment in the telecommunications industry is a large amount of electronic waste (e-waste). The 2019 report from the World Economic Forum estimates that nowadays, our world produced up to 50 million tons of e-waste. Only 20 percent of which is recycled properly. There is also a prediction that before 2050, electronic waste could reach 120 million tons each year.

The e-waste consists of recyclable and tox-ic components. Irresponsible management and handling not only uselessly waste our resources but also spread toxic that will remain in the land, water, and air.

Environmental Conservation

As a part of dtac Policy – Sustainability, dtac aims to demonstrate a responsible business practice through its environmental conservation initiatives.

For Thailand, the problems with e-waste are similar to other developing countries; the amount is increasing every year. According to the Pollution Control Department, in 2016, Thailand has hazardous waste from communities up to 606,319 tons, which increased 2.54 percent from 2015. 393,070 tons are waste from electrical appliances and electronic equipment, which is about 65 percent of all amount. And 213,249 tons are from hazardous waste, such as batteries, chemical packages, and spray cans.

In 2019, there was a report about Thailand, which became a huge concern. The report stated that T hailand is becoming the global center of electronic waste. The country imported over 100,000 tons of wate. It was estimated that Thailand now has 400,000 tons of electronic waste, about 200,000-300,000 of which cannot be traced to its source.

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e-WASTE MANAGEMENT dtac considers that e-waste is a significant issue relating to our core business. The Company estimated its operations and found that e-waste comes from three primary sources: network of base station towers, office buildings, and dtac customers.

To deal with this problem, dtac created a proper procedure in managing e- waste to reduce adverse effects on the environment effectively. We established consistent criteria in selecting service providers who would sort trash and recycle e-waste. The approach is applied to the entire organization by the ‘sustainabili-ty department’ and ‘procurement department of every department that generates e-waste. This is to ensure that all e-waste from dtac will be handled, transported, sorted, and recycled correctly by service providers certified by the Department of Industrial Works.

Besides environmental operating within the organization, dtac expanded our intention in managing external e-waste through a project called ‘ThinkSmart,’ which began in 2014. With this project, dtac would collect e-waste, including used mobile phones, degenerated batteries, and any unused accessories from dtac customers and recycle them properly, reducing environmental effects. dtac installed ThinkSmart box-es at more than 30 dtac halls across the country and some at dtac’s partners. These e-wastes will be sorted, collected, destroyed, and recycled in proper ways, such as extracting it to useful material. This saves not only our natural resources but also reduces carbon footprint. Recycling a single mobile phone can reduce carbon dioxide emissions up to 12.585 kilo carbon.

SUSTAINABILITY REPORT 2019

It is a primary purpose of dtac’s sustainability practice is to ensure that the business operations at dtac adheres environmental conservation practice.

Key practice guided by the policy:

รายงานความยัง่ยืน 2562

Assess business operations that may cause environmental risks in a timely manner.

Develop and implement the Environment Management System (EMS) as a platform to report the company’s action on the environment and use the information to plan and adjust environmental strategies.

Collaborate with stakeholders internally and externally to expand the results in the environment.

1

2

3

4

5

Reduce energy and water consumption.

Manage and scrap e-waste efficiently and properly.

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from internal business operations and external customers, and all were recycled by certified recycling service providers. That equals reducing GHG emission to atmosphere for 2,636,428 kilo carbon, based on the estimation from The Stock Exchange of Thailand and the Thailand Greenhouse Gas Management Organization.

In 2019, dtac collected

213,476pieces of e-wastes

Dtac POLICY - ENVIRONMENT


With our commitment to provide smooth and zero-down-time telecommunication services to customers, for our customers, a primary mission is to keep strengthening the network roll-out and infrastructure.

Building base stations is a task that requires the dtac team to work closely with the locals in the communities. dtac pays a lot of at tention in social l istening in the communities and uses the feedback to adjust with three principles of collaboration: treat every stakehold-er fairly, respect the law, and safety.

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Responsible Network Expansion

dtac listens to the demands and the expectations of all communities, which is an way for dtac to find a practical solution that is efficient and transparent.


FAIR TREATMENT TO ALLIn 2019, dtac rented land to build ar ound 2 0,000 base s tations in Thailand. The rental rate varied, depending on the economic value in each location based on the assessment price from the Department of Lands. The landlords were able to negotiate for the price that was fair to them.

dtac prov ided communication channels, such as dtac call center 1678, email , and meetings, for the landowners and stakeholders to reach out to the Site Management team directly in case they had questions or would like to discuss any concern or issues.

SAFETYBesides examining constructions and maintenances of the base stations regularly, dtac also has an Electromagnetic Field (EMF) Working Team to work with our vendors and partners who construct the base stations and to create awareness for every stakeholder about the safety of electromagnetic fields, which is a concern among some communities.

COMPLIANCE TO LAWS AND REGULATIONSdtac adheres to the Land Registration Act 2552 B.E., the Office of the National Broadcasting and Telecommunications Commission BTS Guideline, and local rules and requirements applicable in each location. The Legal Department examines all contracts made with the landowners to ensure compliance to those laws and regulations.

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Based on the Land Registration Act B.E. 2522 (1979) and NBTC guideline, dtac has set up a Base Station Tower Installation Procedure to ensure compliance to laws and regulations as well as safety to the communities.1. Examine and locate an area to install a base station2. Contact a landowner or a legally authorized representative3. Inform a community to understand the safety and other relating issues about installing a base station which the community might be interested in4. Request a permission to install from a local government office and a permission to use the base station from the Office of the National Broadcasting and Telecommunications Commission5. Start an operation by choosing a construction company and building contractor by strictly following the rules to guarantee that the installation will be done according to engineering and safety standards6. Start using the base station7. Monitor and maintain by a team of experts who are certified by height work permission to ensure the safety and the efficiency of the base station

BASE STATION TOWERS INSTALLATION PROCEDURE


Customers

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dtac customers are our most important stakeholder group. We want to make sure that they are satisfied and have the best experience from our services. Customer feedback therefore helps us develop new solutions, choose where to invest and plan durable developments to bring value to customers and business operations.

In 2019, dtac strengthened our customer- centric approach and cascaded the practice throughout the Company. This allows us to work proactively on issues that customers may not be their significant concern, but we know that it affects their basic rights and well-being.

dtac embraces a customer-centric business approach, striving towards more satisfaction, fairness and sustainability.

dtac made concrete efforts to understand the true needs of customers by conducting research, surveys and other engagement channels. We also set up a specialized team to turn every complaint from customers into an opportunity for improvement.


After actively engaging with customers through various channels, dtac could identify the most important concerns from the customers over telecommunication are:1) Billing2) Mobile Voice and Data Service Quality

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Billingdtac inspected the root cause of billing complaints and overhauled the system to create transparency and fairness for customers.

Customer experience surveys by dtac found an important problem that led to customers’ dissatisfaction with dtac’s services: “bill shock.” This happens when customers are shocked to see charges they do not feel where transparently communicated to them. This is in fact a common and lingering problem for telecommunications operators in Thailand. The number of complaints received by the Telecommunications Consumer Protection Bureau suggest that billing has been one of the top problems for many years.

KEY ENGAGEMENT CHANNELS

Network Net Promoter Score (Network NPS)To capture customers’ painpoints and experience on dtac’s services in each customer segment. The results went to a war room dedicated to translating the scores and the complaints into network improvements.

Customer Satisfaction Score (CSAT) To survey customers’ satisfaction towards services at dtac halls, dtac centers and dtac call center 1678.

In 2019, dtac achieved reaching out to 42% of customers to participate in the survey against the target of 30%

1) Third-Party Content Service Provider Control Improvementdtac found that the main reason for the billing complaints came from additional charges from third-party content service providers, such as those proving daily news via SMS. Either customers may have subscribed to those ser vices unintentionally, or these service providers did not transparently seek sufficient consent from them.

Such a business approach was not fair for customers. Therefore, we improved collaboration and control measures with these third-party content service providers. dtac even introduced a fining system for providers if further custom-er complaints regarding them were received.

Third party content is a major source of revenue for telecommunication operators. Nonetheless, dtac decided to strictly control this part of business process for the benefit of our customers.

2) Usage and Billing System ImprovementAnother major cause of customers’ complaints about billing came from voice or data usage that exceeded the service package customers subscribe to. dtac leveraged the machine learning to examine customers’ usage and alert the system if significant excess usage was detected. dtac then immediately contacts customers to inform them of the additional usage and recommend changing to a package that serves the customer’s needs better.

In addition, dtac examined and improved steps and the billing system to avoid miscalculations. We also provided training to employees involving in this business operations part.

With these efforts, the number of complaints about the bil l ing issues decreased by 15 percent in 2019.

IMPROVING THE BILLING SYSTEM


2018 2019

93.6% 94.3%

customers’ satisfaction scores

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dtac never stops improving the quality and coverage of cell networks to achieve maximum customer satisfaction.

Customer satisfaction surveys indicate that network experience remains one of the most important priorities for customers.

dtac expanded the network of base stations faster than ever. Moreover, dtac elevated the telephone exchange systems and network capacity with the Virtualized Core Network (VCN) technology, switching from telephone exchange loaded with hardware to virtual ones. This not only results in a more efficient management, but also supports innovations and new technologies, especially those relying on speed and precision for big data transfers, which goes well with the consumer s ’ fas t-changing data consumption behaviors these days.

Customer Personal Data Protectiondtac considers customers’ personal data protection a critical responsibility.

The heart of the internet and digital world is connecting and sharing. It is thus undeniable that the more customers connect and share, the more potential, benefits and value of the digital world will multiply. Data then becomes vulnerable and is widely used in both private and pub-lic sectors for various purposes.

Mobile Voice and Data Service Quality

The Network NPS the number of

customer complaints about network quality

2019

+4


The very second a customer becomes a part of the dtac family, we hold ourselves accountable to ensure the customer’s privacy. We’ve made sure thousands of our employees are on the same page on the issue, continuously training them to be aware of the importance. To us, ‘privacy’ isn’t a matter of back-office management, but a value that we hold dear.

If anything, dtac believes that adhering to the ‘privacy’ principle will help our business grow by earning customer confidence. We have established policies and practices of rather high standards, corresponding with advanced international ones. And that, we strongly believe, will ultimately make customers trust us in return.

Montri StapornkulData Protection Officer at dtac

dtac CODE OF CUSTOMERS’ PERSONAL DATA PROTECTION, SEPTEMBER 2019

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ADHERING TO INTERNATIONAL STANDARDSSince 2018, dtac improved customers’ person-al data protection standards to conform to international laws, namely the General Data Protection Regulation (GDPR). One prominent point of the GDPR is that it maintains balance between promoting the digital economy and upholding basic human rights principles, making it the world’s most advanced privacy law. It is also expected to set standards for personal data protection laws. COMPLYING WITH THAI LAWSAlthough the Personal Data Protection Act B.E. 2562 (2019) will not come into a full enforcement until May 2020, dtac’s standards and practices in customers’ personal data protection already reflect the requirements of the law. In fact, since the law outlines several principles, rights and duties much like those in the GDPR, dtac’s person-al data protection standards, which were improved

dtac takes customers’ personal data very seriously in our business, seeking to ensure quality services and confidence in privacy at the same time. dtac considers the issue to be critical and likely to affect trust and basic rights of customers. Therefore, dtac is committed to execute the data protection guideline that is in line with international standards.

in 2018, already align with it.

The law stipulates that dtac may only disclose customers’ data in cases where it is done to protect dtac customers or other individuals from damages or harm, or when dtac is compelled by court warrants, court orders, regulations, or other legislations to disclose customers’ personal data to law enforcement officers, courts or other authorities.

BEING UPFRONT WITH CUSTOMERSdtac issued the dtac Policy – Privacy to ensure protection of customers’ personal data and maintain compliance to laws and standards. The ‘Customers’ Personal Data Protection Unit’ is established to enforce the policy, educate employees, monitor risks and assess impacts as well as improve customers’

personal data protection processes to always stay relevant to the current situation and emerging risks.

ESTABLISHING WORK STANDARDS AND EDUCATING PEOPLEdtac has taken steps to prepare our employees with knowledge and skills of the personal data protection policies and practices. Because our employees have the most likelihood to access customers’ personal data, every employee is required to sign a customer data protection agreement, as dictated by dtac’s governance policy. We also group employees who have access to customers’ personal data and provide special training on skills and awareness.

To ramp up our capacity to take care of customers in 2019, dtac held customers’ personal data protection workshops for more than 1,000 employees.

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In 2019, there were four cases of inquiries from customers to dtac regarding risks of personal data misuse. There were no substantiated inquires or complaints from suppliers and regulators.

dtac held customers’ personal data protection workshops for more than

1,000 employees who might have access

to personal dataof customers

• Customers’ charging data records, and voice and data usage records, are digitized and encrypted as a protective measure.• The storage room for paper documents is designated a restricted area only accessible to relevant officers, to ensure that all documents are safe and secured.• Only two operation officers are given a passcode required to access confidential data.• dtac employs a personal data protection officer whose job is to ensure that data processing that involves customers’ data complies with the Privacy Policy and relevant laws and regulations.• dtac has prepared suitable technical and corporate security measures to protect customers’ personal data from unauthorized access, storage, usage, disclosure, repetition, change and destruction. A team of security specialists will regularly check the security systems and practices. For example, the data protection measures forbid call center staff to bring flash drives or mobile phones into the operating room.• dtac may use customers’ personal data to improve its services to better suit the needs of different groups of customers, in order to offer richer experiences or create new services to support targeted groups.• dtac may share and disclose customers’ personal data to the subsidiary companies to process when necessary, in order to allow other service providers to support or extend their service areas, which will allow dtac to serve the customers better - but will do so only after customers have given consent to sharing their personal data.


Telecommunication is an industry that entails a highly comprehensive supply chain. Every single part of the chain from the beginning to the end contributes to mobile users’ satisfaction. All suppliers, regardless of their sizes and types of businesses, have a significant role in strengthening dtac’s business operations to bring best services to customers as well as to help dtac achieve the ‘Empower Societies’ vision.

dtac implements a strong sustainable supply chain management practice to ensure that all suppliers provide best products and services while maintaining a high work standard and responsible business in their own operations.

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Any suppliers’ circumstance or activity that is vulnerable to violations of social and environmental compliance may put their business at risks, affecting dtac’s business operations negatively. dtac therefore believes that it is our commitment to the suppliers to go beyond from regular business transactions to raising working standards together to establish a firm foundation of ensuring good working conditions, human rights and environmental practice in the telecommunication industry.

dtac believes that sustainable supply chain management practice does not only bring growth to business and the society as a whole, but also raises standards and competitiveness of the suppliers themselves.

Suppliers

In 2019, dtac had893 suppliers which made the total billing value ofTHB 26.8 billion, creating more than 74,000 jobs.

How working with dtac has raised Ericsson’s work standards?

Nadine AllenCountry ManagerEricsson (Thailand) Ltd.

Sustainability and corporate responsibility are integrated into Ericsson’s business and the company’s commitment to the triple bottom line of responsible environmental performance and social and economic development.

Conducting business responsibly is a cornerstone of the Company’s strategy and culture. The Company’s declared vision and purpose, ‘Empowering an intelligent, sustainable and connected world’, embodies the breadth of what Ericsson aims to do and how to contribute to the sustainable development agenda outlined in the UN’s Sustainable Development Goals (SDGs).

As such, we work closely with dtac to ensure we are aligned with their Supplier Conduct Principles, and we continue to collaborate with them in the area of Sustainability and Corporate Responsibility. In particular, we work closely together on the responsible management of our Supply Chain and share the same belief that the sustainable management of supply chains

is of growing importance to our stakeholders, including customers and investors.

Respect for human rights, fair and safe working conditions, and ethically and environmentally sound business practices are core to our business. This is likewise mirrored in dtac’s Agreement of Responsible Business Conduct (ABC), which makes sure that suppliers’ business operations meet their standards, especially in the areas of human rights, anti-corruption efforts, and the environment.

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dtac has launched the Supply Chain Sustainability Manual, under the dtac Policy – Sustainability, that provides a working guideline to achieve the ‘Zero Incident’ goal. That means dtac has set expectations to achieve no violations or non-compliance with applicable local and internation-al laws and work standards in the supply chain. The manual ensures the following practice in the supply chain management operations.

- Fair treatment to all suppliers- Effective inspections on suppliers’ practice in social and environmental compliance on a regular basis- Raising social and environmental standards and practice to suppliers’ business operations.

dtac’s supply chain sustainability management includes risk assessment at the supplier selection process to the SCP enforcement and Corrective Action Request (CAR) issuance till effective closure when non-conformity issues are found.

THE MAIN GOAL IS ‘ZERO INCIDENT’ IN THE SUPPLY CHAIN.

SUPPLY CHAIN SUSTAINABILITY MANAGEMENT PROCESS AND 2019 PERFORMANCE

Supplier Risk Assessment

98.4% of suppliers signed the ABC

100% of new suppliers signed the ABC from the target of 100%

29 suppliers completed the SAQ from the target of 85 suppliers.

255 suppliers participated in capacity building programs.

No suppliers were terminated due to being unable to resolve the non-conformity issues.

195 Suppliers inspected

8.6% of suppliers werefound non-compliant to some elements of the SCP.

Supplier Capacity Building

Supplier Inspections and Corrective Actions

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dtac has set up the ‘Supply Chain Sustainability Management Team’ to ensure that the suppliers comply with the ‘Supplier Conduct Principles (SCP) that has been enforced since 2008. The SCP follows global standards and is updated to ensure that it stays relevant to local and international concerns about human rights, environmental conservation and responsible business practices.


SUPPLIER RISK ASSESSMENTdtac assesses suppliers’ risks that are relevant to social and environmental compliance in the supply chain by categorizing the suppliers into six groups based on their service types. The most significant group is ‘Base Station Construction and Maintenance / Fiber Optic Cable Installation’ service providers, accounting for 80 percent of the total billing value in 2019, due to its highest tendency of risk exposures.

CAPACITY BUILDING PROGRAMThe purpose of the Capacity Building Program is to provide awareness, training and resource support to suppliers to help them raise standards locally in accordance to international best practice as required by the SCP. The program includes a wide range of activities such as:

Prior to becoming a supplier at dtac, the supplier will be assessed on their governance, social and environmental risks. Once approved, the supplier will sign the Agreement of Responsible Business Conduct (ABC) to confirm their compliance to the SCP.

For current suppliers, dtac administrates a self-assessment tool, Self-Assessment Questionnaire (SAQ), in the first quarter of every year to identify social and environmental risks that the suppliers may be vulnerable to, and to group them based on their chances of risk exposures.

Monthly Training Program Arranged for suppliers who wish to enhance and update their knowledge and skills in implementing the SCP as well as to provide feedback and suggestions for dtac to improve supplier engagements.

On-Site Safety Briefings and Post-Assessment Program A post-inspection training that provides specific information and skills related to the business or activity types. For example, an on-site training after an inspection at a base station towers focuses on Personal Protective Equipment (PPE).

Quarterly Meetings with Suppliers in the ‘BTS Construction and Maintenance’ GroupTo review and update safety procedures and issues in enforcing the use of PPE among suppliers’ employees and contractors as well as to share suggestions to enhance cooperation between dtac and suppliers.

‘People First’ Online CourseAn global online course that is designed for suppliers to cascade to their employees and their subcontractors to learn about health, safety and environment at work.

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Social Risks Environmental Risks

Suppliers by Service Types

Base Station Tower Construction and Maintenance / Fiber Optic Cable Installation

Base Station Tower Construction and Maintenance / Fiber Optic Cable Installation

Consultancies / HR Recruitment / Office Rentals

Retail / Distribution / Logistics

Waste Management / Warehouse and Storage Services

Retail / Distribution / Logistics

IT / Digital Content / Content Service Provider

Consultan-cies / HR Recruitment / Office Rent-als

Waste Management / Warehouse and Storage Services

Printing / Marketing and Branding Services / Office and Shop Interior Design and Renovation

Printing / Marketing and Branding Services / Office and Shop Interior Design and Renovation

IT / Digital Content / Content Service Provider

Applicable laws construc-tion laws compliance

Applicable labor laws compliance

Human rights

Work condi-tions

Applicable industrial factory laws compliance

Health and safety

Data privacy and confiden-tiality

Waste man-agement

General and hazardous waste manage-ment

Environ-mental impact assess-ment

35.1% 27% 14.8% 12.5% 9.9% 0.7%


In 2019, dtac provided a capacity building to suppliers of 3,464 man-hours, exceeding the target of 3,000 man-hours.

SUPPLIERS INSPECTION AND CORRECTIVE ACTIONSdtac selects suppliers for inspections based on risk assessments and past records or pending issues of non-compliance to the SCP. If any non-conformity findings are found a Corrective Action Request (CAR) is issued to the suppliers and followed up systematically until effective closure.

In 2019, dtac set a target to conduct 850 supplier inspections. We completed 882 inspections, where 784 inspection visits were unannounced. The findings of non-conformity ad progress are below.

Major Non-Conformity

Minor Non-Conformity

216 findings in:1) Base Station Tower Construction and Maintenance / Fiber Optic Cable Installation

2) Printing / Marketing and Branding / Office Interior Design and Renovation

were resolved accordingly to CAR

were resolved according to CAR

285 findings

211 findings (97.7%)

235 findings (82.5%)

196

11

48

255

BTS Construction and Maintenance / Network Center Maintenance / Fiber Optic Cable Installation

Printing / Marketing and Branding / Media

Other

Total

Number of Suppliers Receiving Training

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dtac People

In the digital transformation era, dtac emphasiz-es on building workforce to cope with the tech-nology disruption and to promote innovations that matter to customers and society.

In 2019, dtac ran several capacity building programs ranging from leadership training to advanced digital technology classes. In addition, dtac strengthened employees’ core values and tried out new ways of working to be more agile and customer-centric.

At the baseline, dtac adheres to applicable international and local laws and standards in labor and human rights while promoting a diverse and equal culture at work. At the same time, dtac ensures high-quality measures and initiatives in occupational health, safety, secu-rity and workplace environment to promote work productivity.

At dtac, employees are the most important component in driving the organization towards sustainable growth.

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Changes make us better

Watchanun ChootheunSupervisor dtac hall, Central Rama 3 Branch

Over the past year, dtac has changed the way we think about work, reinforcing the focus on customers’ satisfaction. This has affected our customer-front service approach. The service I’m responsible for has adopted a one-stop service approach. Previously, we were divided into sales and customer service teams, and our jobs were separate to an extent. But after the change, everyone has to be able to do everything, the same as everyone else. Many might feel like that’s nothing special, but in fact it was a major change. Everyone had to relearn and upskill. Someone who used to only take care of customers and know nothing about sales now has to adopt the skills. But the results are worth it. When customers visit and one employee can handle everything from start to finish, they’re happy. As someone who has been working on the custom-er-front role all this time, I see this as something very beneficial to my professional growth.

The changes over the past year have made us better. The Company is to be thanked for this, as they have kept us updated on the new directions and strategies all along and have consistently prepared us the transition with training and such. More importantly, I just had the fifth anniversary at dtac, and I’m now seeing the bigger picture of my career path and movements, unlike before when I only focused on my individual sales targets. Now I work with my team members and make sure that we, as a team, are a strong part of the Company’s journey to reach corporate targets. That’s a new way of working. All this helps me to improve myself to be better from before. It gets me out of my comfort zone, giving me opportunities to learn from other and try something different.

Opportunities, self-improvement, and career advancementsI’m 27 years old, I can’t yet say that I’m successful in life. But if comparing my age with my career ambition, I’d say I’m professionally successful.

One good thing about this Company is that it motivates us to improve ourselves consistently. Most recently, there’s the PromptGROW platform where we can design our career growth and learning plan by ourselves. I think this is exactly just what we need.

I’ve been working here for five years, and there are always opportunities in sight. My manager is always supportive and encouraging me to pursue career opportunities that come across my way. And when there are opportunities and advancements available, the company will constantly alert me that there are vacancies I can fill if I’m interested.

To be honest, everyone in our generation cannot stop learning new things. Even if I didn’t work at dtac or work in the telecommunication industry today, I’d still need to be learning new things. The truth is you need to keep up with the changing world. And, it’s always helpful to work in an organization that prepares us for the changes.


OpenTalk is one of a communication channels designed to promote participation and open communication between employees and dtac as the employer.

Open Talk has reflected number of employees’ interests, concerns and expectations. dtac has learned that dtac people long for a non-discriminatory work environment where they are equally treated – receiving and enjoying support resources, welfare and benefits they are eligible for and having an equal access to career advancement opportunities. In 2019, dtac therefore developed PromptGROW and strengthened capacity building programs to cater the equal-opportunity and open work climate to dtac people.

OpenTalk Launched in late 2018, it is an internal online platform for dtac employees to communicate directly to executives anonymously. It has become the most used channel by employees to communicate directly to executives and policy owners. In 2019, there were more

than 1,000 inquiries and requests posted by employees

were addressed back by executives and policy owners.

On a monthly average, employees posted

500comments to the platform.

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• Know Yourself A guide to perform self-reflection to understand strengths and weaknesses with world-class self-assessment tools like StrengthFinder, PsyTech and MBIT

• Find DestinationA guide to explor e ambit ion in c ar eer advancement, learn about a job matr ix and identify skills gaps where employees can seek supports from HR Partners to design a career plan.

• Develop YourselfProvide a tool to help employees understand their competencies required to achieve their career goals and choose capacity building program options from the database that best fit with their schedule and interests. Work and life coaching services are also available to help employees go through the journey.

• Find OpportunitiesA large internal database of job vacancies and guidelines on internal recruitment, inter- department movements and non-discriminato-ry practice.

Since launched in September 2019, ‘Browse Jobs’ was the most visited feature. There were about 30 Work Coach service sessions booked by employees.

While keeping employees well-informed about work-related issues, business trends, benefits, welfare, health and safety, etc. to ensure productivity and good work-life balance is a baseline objective for employee engagement, dtac also administers other communication channels to capture their concerns and expectations. And, we need to do this with a strong respect in diversity and equality as specified in the dtac Policy – People and dtac Code of Conduct.

70%

PromptGROW

OpenTalk

อยำกเสนอให้มีกำรอบรมเรื่องเทคโนโลยีบิ๊กดำต้ำค่ะ เพรำะอยำกให้ดีแทคของเรำเป็น data-driven company

ผมอยำกให้เพิ่มสวัสดิกำรพิเศษส�ำหรับพนักงำนที่ต้องปฏิบัติงำน ในพื้นที่ที่เกิดภัยพิบัติครับ

2/20/2020 10:12:05 AM

2/20/2020 13:40:22 AM

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PromptGROW is an online platform designed as a starting point for employees to perform self-check and design a career plan with a wide range of tools, supports and information useful to make the career growth journey robust and achievable.

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dtac kicked off the 40-Hr Challenge program in 2018 aiming at upskilling employees to compete in the fast-paced changing telecommunication and digital technology industry. Employees can do the learning through ‘PLearn’, a mobile application developed to provide useful information about work and capacity building resources to employees internally. In 2019, dtac set a target for each employee to complete the learning for 40 hours at the minimum. Employees could choose online course that were beneficial to their career goals from dtac LMS, Telenor Campus, Coursera, Linkedin Learning and SkillLane.

40-Hr Challenge :

Number of employees participating the 40-Hr Challenge:

3,948

Number of total learning hours by employees:

243,394 hours

Average number of learning hours per an employee

61.39 hours

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Strengths-Based Performance Evaluation to Increase Potential:

Performance Evaluation40-Hr Challenge

An effective, non-discriminatory employee performance evaluation is one of the practices under dtac People Policy. Every year dtac targets 100 percent of eligible employees (those who are recruited prior 2 October) to receive a performance evaluation and career advancement review with their line managers.

dtac has shifted the process from using traditional revenue-relating KPIs to Strength-Based performance evaluation. We believe that this approach allows more rooms for employees to design their career advancement plan that truly

meets with their goals and personal interests. It focuses on increasing engagement and self-motivation among employees, who are more inclined to work in collaborative projects and cross-functional nature. The new approach creates flexibility in the evaluation format, evaluators, and the time period during which the evaluation takes place. Each employee will receive evaluations and feedback both from their manager and their colleagues across other departments all year long, not twice a year like previously.

Focus on employ-ees’ abilities, rather than ranking them

Encourage prompt and regular discussions and coaching between line managers and team members

Receive 360-degree feedback from everyone, not just from the line managers

Prioritize employees’ career advancement goals rather than the past performance

Most importantly, the way it values individual strengths and goals that are different in each employee reflects fair and non-discriminatory practice in the evaluation for career advancement and reward management.


dtac POLICY – PEOPLEdtac has developed People Policy by applying the Internation-al Labour Organizations’ Eight Fundamental Conventions on the following practices:

dtac shall not employ or contract child labor neither in permanent nor fixed-term positions.

dtac opposes the use of forced or compulsory labor including, but not limited to, exchange of labor for payment of debt. Any employee shall be free to leave employment after giving reasonable notice.

dtac respects the right to freedom of association and the right collective bargaining. dtac allows its employees to freely elect representatives to advocate employee matters and carry out their functions

dtac shall not discriminate against employee representatives in the dtac People Council that is established in accordance with national law and regulations.

dtac shall make sure that working hours are not excessive and that the employee gets adequate time for recovery. Working hours shall be compliant with applicale local laws and regulations

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Number of employees receiving performance evaluations and career advancement reviews in 2019:

2017-2019 Effectiveness Index: Most Effective Category

2017

69%71%

76%

2018 2019

Employee Engagement Survey

dtac relies on the Employee Engagement Survey (EES) as a tool to measure effectiveness of the initiatives and efforts to improve employee engagements. It measures The EES is a voluntary and anonymous online sur vey that is conducted on a yearly basis. The results and feedback collected from the survey will be analy zed and translated into initiatives and plans to increase grow th to dtac people and the Company.

To maintain participation and engagement with employees, dtac will circulate the results to every employee via appropriate channels. Line managers will be empowered to provide results to employees and create a dialogue on engagement and enablement improvement at the operations levels. Feedbacks from the dialogues will be escalated to the executive level and will be used to strengthen corporate plans and actions.

The survey scores are analyzed to create the ‘Employee Effectiveness Profile’ which illustrates employees’ engagement and enablement into four categories.

Most Effective – Employees with high commitment to the Company and high capability to create productivityDetached – Employees with high capability to create productivity but low commitment to the CompanyFrustrated – Employees with high commitment to the Company but low capability to create productivityLeast Effective – Employees with low commitment to the Company and low capability to create productivity

15

1,480

1,982

43%

57%

By Gender By Work Position

Operations Levels 3,061

Mid-management Levels 357

Executive Levels 44

1%10%

89%


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Regulators and Government Agencies

Regulators and government agencies play an integral role in making policies, issuing rules and regulations and providing a business guidance in order to promote accountability, transparency, fairness, leading to optimal benefit to customers, professionals, industry and society as a whole.

Apart from strict regulatory compliance, dtac also participates in governmental decision-making through public hearing forums and being a member of specialist committees. dtac is widely recognized for its prominence in adherence of international best practice in various issues related to the development of telecommunication industry in the international stage, such as spectrum roadmap, spectrum auction rules and behavioral economic policies.

dtac works proactively with regulators in promoting governance and fair competition within the telecommunication industry. In addition, the Com-pany also has co-projects in bridging the digital divide and promoting Thai-land 4.0 vision in hopes of gaining optimal benefit from the industry.


5G technology has a huge potential to develop country in a better place. The rest of the world is excited about the emergence of advanced technology. However, no one has any experience with 5G technology before. Policymaking is the foundation to outline how country can reap the benefits and strengthen the country’s stability in technological space.

On the one hand, the government must work collaboratively with private sector, designing policies and creating the business environment that encourage their investment and make financial sense. On the other hand, private sector, especially mobile operators, have made their clear stanc-es, calling on a slight reduction of reserve prices of spectrum. Minimizing barrier to investment does make sense.

The heart of designing 5G ecosystem is how to make innovation truly happen and connect the dots among those young bloods who have a great idea about 5G. In addition, public choice is also another point to be considered, enabling operators to invest precisely. Academics, research institutes even startups should bravely jump on the bandwagon, exploring to do something new. I think this is what the government and the NBTC as a regulator should highlight

Supot TiarawutChief Transformation Officer of the CU Transformation Projectand Technology and Telecommunication Expert

Development for Sustainable 5G

5G technology is the key to fostering Thailand’s economic competence and create innovation for the future, such as driverless vehicles, smart factory, smart healthcare. Therefore, public sector around the world expects that 5G technology to take place in their countries in a fast pace. However, 5G development is complicated and highly uncertain as 5G technology itself requires public and private partnership in creating ecosystem of 5G technology.

For Thailand, the government sets a clear vision, aiming to make 5G happen in the first group of ASEAN members. Spectrum allocation for 5G will be done by 2020, which draws a lot of attention from private sector, academics and civil society domestically and internationally.

dtac adopts a proactive approach in cooperation with the regulator in order to drive transparency and fairness to take place in telecommunication industry, including developing the ecosystem for sustainable 5G.

“dtac believes that the profession-al cooperation with the regulators and government agencies will bring growth and value to the economy, consumers and the industry itself in terms of investment planning, review and evaluation for the past year. In 2019, dtac proactively engaged with regulators and government agencies, covering a number of important issues, such as

5G development

digital inclusion

good governance for transparency and anti-corruption.

5G

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The NetArsa project was established in 2014 with the first intention to introduce digital literacy to the public, reaping the full benefit from digital technology, which will ultimately result in the reduction of digital divide.

The project aims to provide basic digital literacy to people in grassroot communities across the nation on and utilize the skills to generate incomes and increase quality of life. NetArsa team travels and teaches them from basic digital knowledge to the introduction to digital sales channel, photo editing program, content marketing and business plan for their local products.

dtac NetArsa:BRIDGING THE DIGITAL DIVIDE

dtac’s 5G VISION: FAIR COMPETITION AND ECOSYSTEM FOR SUSTAINABLE 5G

A major problem of the digital world and internet is not the access to technology, but the effective and appropriate use of technology

Akkanat WantanasombatResearcher at Mekong Studies CenterThe Institute of Asian StudiesChulalongkorn University

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dtac puts massive efforts in 5G technology development. The partnership with Telenor Group is also formed, bringing the global know-how and expertise to apply in Thailand. dtac believes that the proposal and guidance on 5G development will accelerate 5G use cases in Thailand rapidly and sustainably.

dtac strongly believe that transparency and fair competition will enhance the industry as a whole and customers will get optimal benefits.

Digital Divide and Thailand 4.0 Vision dtac is committed to never stop empowering societies through the NetArsa project aimed at promoting the internet access across the nation and unlocking a full potential of internet. This is to ensure that technology can reduce social inequalities, a key to achieve the Thailand 4.0 vision.

Amid the increasing economic and social inequality that spreads across the globe, digital technology is a hope to combat the rising inequality problems. However, the complexity and advancement of technology itself may worsen circumstances, particularly the equal access to technology for all as a basic right of citizen.

Previously, the concerns related to digital divide focused on the gap between the connected and the unconnected. But the context of the digital divide has now shifted to the ability of citizens to tap the untapped potential of internet or digital literacy, a set of basic skills required for working with digital media, information processing and retrieval.

In 2019, Net Arsa project reached to more than

340,000 individuals in local

communities,

and they could generate about

THB 10,000 monthly earnings for their households.


dtac publishes a “dtac Code of Conduct” since 2006 as a principle and guidelines for the Board of Directors, executive management, employees and those entities operating under dtac name. The code has been reviewed and revised in line with current situations, concerns and stakeholder’s expectation. This is to prevent new risks in business operations may happen at any time, which involve zero-tolerance to corruption, human rights, fair competition, data protection and security, employee rights, health, safety and people security, employee welfare as well as financial integrity and frauds. In 2019, dtac updates its Anti-Corruption Policy and steps up its work related to Business Partner Compliance Management.

Good Governance

dtac has issued and enforced policies, strategies and principles of corporate governance through the organization’s management committee structure which consists Board of Directors, Subcommittees, Internal and management audits. Chief Executive Officer is appointed as a leader to evaluate the process on policy implementation and regulatory documents in all levels. CEO is required to report to the Board of Directors at least once a year.

dtac adheres the principle of corporate governance for listed companies established by the Securities and Exchange Commission of Thailand and the Stock Exchange of Thailand, which has been reviewed and amended in compliance with the ASEAN Scorecard.

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The current edition of the code came into full enforcement on 31 October 2018. It outlines four core principles that demonstrate dtac’s responsible business practice between dtac and its stakeholders, which are

To follow and implement the code, dtac provides instructions and reporting procedure, so that suitable measures may be taken in a timely manner as follow.

We play by the rules

We are accountable for our clients

We are transparent and honest

We speak up

Communication Channeldtac provides communication channels to seek advices and report an issue that is likely to violate the dtac Code of Conduct.1. Line managers and the Ethics and Compliance Department2. Via http://dtac.ethicspoint.com, an online platform run by the EU based third party develop-er NAVEX Global, Inc. the online channel is available to all employees, customers and suppliers.

All repor ted concerns will go to the Ethics and Compliance Depar tment and are kept confidential. Whistleblowers can choose to report the case unanimously. There is no any record in the reporting process, including IP Address and phone number.

Internal AuditsIf the reported issues are substantiated, they will go to the Investigation Team, an internal independent unit responsible for investigation on cases of dtac Code of Conduct violations.

Compliance Functiondtac established the ‘Ethics and Compliance Department,’ an internal independent unit responsible for training and educating employees as well as managing day-to-day operations in compliance with the code on all aspects.

As whistleblowers may expose a potential risk from their actions, dtac does not tolerate retaliation of any kind against those who speak up in good faith. If found, the Company may take disciplinary action up to and including termination of employment.- Violate or ask others to violate the code- Ignore to report the suspected activities that may violate the code- Do not give coordination with investigative process - Retaliation against those who speak up

dtac CODE OF CONDUCT


รายงานความยัง่ยืน 2562 รายงานความยัง่ยืน 2562

About This Report

Total Access Communication Public Company Limited, or dtac, publishes the Sustainability Report for the fourth consecutive year. The purpose of this report is to disclose dtac’s sustainability performance and significant results in sustainability efforts as well as to communicate how dtac responds to stakeholders’ concerns and expectations. Information and data in this report covers dtac’s business operations principles, initiatives and results that are material to the Company’s sustainabil-ity view, from 1 January 2019 to 31 December 2019. This report has been prepared in accordance with the GRI Standards: Core Option.

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For information and inquiries about dtac’s sustainability, please contact:Sustainability DepartmentAddress: 319, 41st Floor, Chamchuri Square Building, Payathai Road Pathumwan, Bangkok 10330, ThailandTel: (66 2) 2028000Fax: (66 2) 2028296e-mail: [email protected]

DEFINING REPORT CONTENT WITH THE REPORTING PRINCIPLEStac’s Sustainability Report includes material topics that are in line with stakeholders’ expectations and dtac’s significant impacts with the following the reporting principles for defining report content as below;

Stakeholder Inclusivenessdtac has engaged with key stakeholders to understand and capture their concerns and expectations in the area of sustainability. dtac ensures to implement various communication channels that fit with different groups of stakeholders, such as forums, meetings, focus groups, surveys, online channels and dtac’s owned channels such as dtac call center 1678 and dtac halls.

Sustainability ContextSustainability at dtac is framed by the vision ‘Empower Societies’ with digital technology and ‘Reduce Inequalities’ as stated in the United Nations Sustainable Development Goal no. 10 ‘Reduced inequality within and among countries.’ This is in conjunction with dtac’s Sustainability Policy and initiatives that are developed from insights, concerns and expectations of stakeholders in the issues relevant to telecommunication and digital technology to create a shared value to bring economic and social growth to the country.

CompletenessThe content of the report has been reviewed by stakeholders in the organization and related agencies and their inputs were applied to the production of the report. The Board of Directors has reviewed and approved the overall content to ensure that it captures key sustainability topics that are highly impacts in dtac’s efforts to promote economic and social growth as well as environmental conservation.

Materialitydtac organized workshops with business functions that represent each group of stakeholders to select major issues on the foundation of:- Importance of social causes to stakeholders- Relevance to dtac’s long-term business operations

The results from the workshops revealed following material topics:- Governance- Anti-corruption-Socioeconomic Compliance- Customers’ personal data privacy- Procurement and supply chain- Safe and responsible internet use in children- Employee equality

Total Access Communication Public Company Limited (dtac)319, 41st Floor, Chamchuri Square Building, Payathai Road

Pathumwan, Bangkok 10330, Thailand

Tel: (66 2) 2028000

Fax: (66 2) 2028296

DTac 2020 AGM ENG.indd - SET

Documents

Transcript of DTac 2020 AGM ENG.indd - SET