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Abbreviation used in 2009 Annual Report General Information References Messag e from CEO Financial Summary Nature of Business The Company’s Shareholding in Subsidiaries and Associates Revenue Structure of the Company, Subsidiaries and Associated Companies Significant Changes in the Year 2009 Social Activities and Contribution Trends in Telecommunications Business in the Year 2010 Risk factors Shareholding Structure Board of Directors and Management of the Company Information of the Company’s Director, Executives and Authorized persons Related Party Transactions Management Explanation and Operational Results Analysis Report on the Board of Directors’ Responsibility for Financial Report Audit Committee Report Report of Independent Auditor Balance sheets Notes to consolidated financial statements

011


Abbreviation used in 2009 Annual Report = ACeS (Thailand) Company Limited ACU = Acumen Company Limited ADSL = Asymmetric Digital Subscriber Line AIL = ACeS International Company Limited ARS = ACeS Regional Services Company Limited Broadband = High-speed Internet Internet CP = Chaengwatana Planner Company Limited CPN = Compunet Corporation Company Limited CRM = Costumer Relation Management DDN = Digital Data Network DWDM = Dense Wavelength Division Multiplexing EDI = Electronic Data Interchange HDTV = High definition Television IIG = International Internet Gateway IKSC = Internet Knowledge Service Center Company Limited IPTV = Internet Protocol Television ISP = Internet Service Provider 3BB = Three BB Company Limited JAS = Jasmine International Public Company Limited Jasnet = Jasmine Internet Company Limited JIOC = Jasmine International Overseas Company Limited JSS = Jasmine Smart Shop Company Limited JSTC = Jasmine Submarine Telecommunications Company Limited JTS = Jasmine Telecom Systems Public Company Limited JasTel = JasTel Network Company Limited MCS = Mobile Communication Services Company Limited MPLS = Multiprotocol Label Switching NTU = NTU (Thailand) Company Limited PA = Premium Assets Company Limited ACT

033

= Pakkred Planner Company Limited PRE = Premium Real Estate Company Limited SHW = Smart Highway Company Limited STCC = Siam Teltech Computer Company Limited TJP = T.J.P. Engineering Company Limited TKSC = Telecom KSC Company Limited TLDT = Thai Long Distance Telecommunications Company Limited TT&T = TT&T Public Company Limited TTTBB = Triple T Broadband Public Company Limited TTTI = Triple T Internet Company Limited TT&T SS = TT&T Subscriber Services Company Limited VoBB = Voice Over Broadband VOIP = Voice Over Internet Protocol VPN = Virtual Private Network WiFi = Wireless Fidelity WiMAX = Worldwide Interoperability for Microwave Access NTC = The National Telecommunications Commission CAT = CAT Telecom Public Company Limited TOT = TOT Public Company Limited Rehabilitation = Rehabilitation plan of Jasmine Plan International Public Company Limited or Jasmine International Overseas Company Limited, as the case may be Plan = Chaengwatana Planner Company Administrator Limited as the plan administrator of Jasmine International Public Company Limited or Pakkred Planner Company Limited as the plan administrator of Jasmine International Overseas Company Limited, as the case may be PP


04 General Information

1. General Information Company Details

Sector Name

: Jasmine International Public Company Limited : 0107537000106 : 200, 29th-30th Fl.,Jasmine International Tower, Moo 4, Chaengwatana Road, Pakkred Sub-district, Pakkred District Nonthaburi 11120 : Information and Communication Technology (ICT)

Telephone Fax Home Page

: (66) 0-2100-3000-7 : (66) 0-2100-3150-2 : www.jasmine.com

Company Name Registration Number Address of Head Office

Number and Type of Total Issued Shares Registered captial 7,842,836,710 Baht Divided into 15,685,673,420 Shares Comprising - Ordinary share 15,485,673,420 Shares - Preference share 200,000,000 Shares Each with the par value of 0.50 Baht Total paid - up capital 4,715,809,289 Baht Total number of paid - up ordinary shares 9,431,618,578 Shares


References

Name, Office Address and Telephone Number of other Reference Persons Registrar

: Thailand Securities Depository Co., Ltd.nd Capital Market Academy Building, 2 Floor, 2/7 Moo 4, (North Park Project), Vibhavadi-Rangsit Road, Km.27, Tung Song Hong, Laksi District, Bangkok 10210 Tel. : 0-2596-9000,0-2596-9302-11 Fax : 0-2832-4994-6

Auditor

: Ernst & Young Office Limited 33rd Floor, Lake Rajada Office Complex, 193/136-137 New Rajadapisek Road, Bangkok 10110 Tel. : 0-2264-0777, 0-2661-9190 Fax : 0-2264-0789-90, 0-2661-9192

Legal Advisor

: Hunton & Williams (Thailand) Limited 34th Floor, Q. House Lumpini Building, 1 South Sathorn Road Thungmahamek, Sathorn Bangkok 10120 Tel. : 0-2645-8800 Fax : 0-2645-8880

05


06 Message from CEO

Message from

CEO

Dear Shareholders, During 2009, Jasmine Group had encountered many obstacles and challenges in our business operation. However, as the year came to pass we not only overcame the many problems, but also did it with very satisfying business results. On the world and Thai economies, during much of the year the situation was rather stagnant which was a consequence of a severe contraction during 2008. Although most experts believed the global economy had reached its bottom and that small growth could be seen in places, confidences did not seem to pick up since there were still conflicting signs of economics indicators. Recovery was thus fragile at best. In Thailand, the government had adopted and pushes though several stimulus measures to try to jump start the economy. But slowness in expediting budget and other obstacles undermined the efforts and made results less than expected. However, the last few month of 2009 saw high growth in export sectors which was the clearest sign yet of recovery. Although Map Ta Phut and political conflict remained the most important factors affecting the Thai economy. For Jasmine Group, the main challenge of the year was the decision to take a full management control of Triple T Broadband Public Company Limited, of which Jasmine Group was a majority shareholder.


07

In taking a full control of the company, Jasmine had initiated many changes to TTTBB which is a provider of a nationwide IP network for broadband Internet. Among those changes were the injection of fund to expand and to build new network infrastructure, replaced some equipment with one that utilized more modern technology, created a new “3BB” brand, followed by a sustained marketing campaign that made “3BB” a well known brand, improved all aspects of service, built a new contact center, opened 280 “3BB” shops and kiosks around the country, increased the speed of “3BB” to 4 Mbps at the end of 2009, and most importantly, instilled a new culture that emphasized teamwork and team spirit, creativity and innovation, and for employees to have fun at work. These efforts paid off handsomely for the number of “3BB” users increased to almost 600,000 by the end of 2009 despite the difficult work environment under which our employees had to go through. Apart from TTTBB, other companies in Jasmine Group also had better than expected business results despite the fact that National Telecommunications Commission which regulates the industry were unable to issue licenses to operate “3G”, a service that was widely believed to drive investment and growth in the ICT industry. All in all, 2009 saw Jasmine International Public Company Limited and its subsidiaries record a total revenue of Baht 8,371 million, increasing by Baht 3,021 million or 56% over that of the year 2008 of which the revenue was Baht 5,350 million. They recorded the operating profit of Baht 776 million, compared to Baht 795 million in 2008, representing a Baht 19 million or 2% reduction. The lower profit in 2009, in-spite-of the higher revenue, was a result of high investment and costs to expand the network and services of the Company and its subsidiaries. The Company and its subsidiaries made a profit of Baht 54 million from foreign exchange and received its share of profit of Baht 3 million from related companies. However the Company and its subsidiaries set Baht 611 million as a provision for impairment on assets, and another Baht 18 million for other expenses in 2009. After deduction, the Company and its subsidiaries recorded a net profit of Baht 204 million in 2009, increasing by Baht 1,449 million or 116% over that of the year 2008 which lost Baht 1,245 million. The improved business performance of Jasmine Group in 2009 despite the difficult work environment was a testimony to the hard work and dedication of our employees, to whom I am truly grateful. Their determination to carry out works under a far-from-normal work atmosphere was what made the difference. Lastly, I wish to thank all shareholders for their trust, and also our clients, partners, financial institutes as well as government and private enterprises for their continuing support.

Pete Bodharamik Chief Executive Officer


08 Financial Summary 2. Financial Summary Significant Financial Ratio reflects the financial status and operation of the Company’s main business and its subsidiaries: Consolidated Financial Statement 2550 2551 2552

Items Liquidity Ratio Current Ratio Quick Ratio Cash Ratio Receivable Turnover Average Collection Period Inventory Turnover Average Inventory Turnover Period Account Payable Turnover Average Payment Period Cash Cycle Profitability Ratio Gross Profit Margin Operating Profit Margin Other Profits Margin Cash to Profitability Ratio Net Profit Margin Return on Equity Efficiency Ratio Return on Total Asset Return on Fix Asset Asset Turnover Financial Policy Ratio Debt to Equity Ratio Interest Coverage Ratio Cashflow Coverage Ratio (Cash Basis) % Growth Ratio Total Assets Total Liabilities Sales and Services Income Operating Expenses Net Profit (Loss) 1)

(Time) (Time) (Time) (Time) (Time) (Time) (Day) (Time) (Day) (Day)

1.25 0.86 0.18 2.47 146 10.09 36 2.69 134 48

1.23 1.00 0.36 2.34 154 34.03 11 2.19 164 0

1.92 1.70 0.56 2.15 167 29.29 12 2.26 159 21

% % % % % %

33.29 11.63 2.53 107.66 2.37 3.23

36.75 16.53 4.02 170.71 (22.33) (16.84)

40.91 33.04 6.52 143.29 (0.89) (0.45)

(Time) (Time) (Time)

1.44 23.97 0.61

(9.12) (11.89) 0.41

(0.26) 21.49 0.29

(Time) (Time) (Time)

1.39 6.61 0.92

1.07 6.90 1.01

0.70 7.38 0.85

% % % % %

29.33 45.58 56.45 99.78 116.34

(17.70) 3.83 23.54 11.301) 2,905.15

(14.11) (23.54) (17.90) (9.56) (117.54)

On 2009 and 2008, the company has included the loss from the devaluation of Capital Investment and other Assets at Baht 611 million and Baht 1,829 million respectively.


Nature of Business

09

 Triple T Internet Co., Ltd. Triple T Internet Co., Ltd. is an Internet Service Provider which provides a full range of Internet-related services Jasmine International PCL. is well known as a leading and applications to both residential and corporate provider of integrated telecommunications service. clients. Locally and internationally, the Company offers telecommunications services for voices, data and video 2. Telecom Network Business via its own terrestrial, aerial and submarine networks that The companies which are engaged in Telecom Network are always kept updated with modern technologies. Business are as follows : Nowadays, in addition to the existing submarine optical fiber cable and telephone networks, the Company also  Jasmine Submarine Telecommunications Co., Ltd. puts emphasis on the nationwide high-speed Internet Jasmine Submarine Telecommunications Co., Ltd. network and WiFi Hotspots. provides telecommunications service on the Submarine Optical Fiber Cable System on the east Furthermore, the Company is engaged in procurement, coast (the Gulf of Thailand). The company is also design, installation of telecommunications system and engaged in operation and maintenance of the computer system integration; it has been awarded submarine optical fiber cables. several large-scale projects by both government and  Thai Long Distance Telecommunications Co., Ltd. private sectors. Thai Long Distance Telecommunications Co., Ltd. provides telecommunications service via the Submarine Realizing the importance of a global trend of modern Optical Fiber Cable System near the end of the east technology, especially the widespread use of Broadband coast (the Gulf of Thailand) adjacent to Malaysia as Internet worldwide, but which still has a low penetration well as on the west coast (the Andaman Sea). The rate in Thailand, the Company is determined to push company is also responsible for the maintenance of the Broadband Internet service to become the flagship the submarine optical fiber cables to be ready for business of the Group in the near future. Thus, it has begun service. to invest in building and expanding the Broadband Internet networks extensively and conducts a comprehensive 3. Internet Services Business campaign on marketing and sales of the product. The companies which are engaged in Internet Services Besides, the Company has carefully chosen to invest Business are as follows : in businesses that provide a wide variety of products  Acumen Co., Ltd. and services, which support each other. For effective Acumen Co., Ltd. provides wireless communications management of human resources and assets, it not only services via satellite such as VSAT (Very Small Aperture utilizes the existing strong networks but also relies on Terminal system) ; Star Connext (wireless broadband professional team of the Group. Internet via iPSTAR) and WiFi Internet. With type 1 license for Internet Service Provider (ISP) and type 3.1 The Company’s business lines are 2 license for International Internet Gateway (IIG) distinctly categorized into 4 groups as granted by NTC, the company is eligible to offer detailed below : Internet access service and other related services to individual users, corporate, and government. 1. Broadband Business The companies which are engaged in Broadband Business  Jasmine Internet Co., Ltd. are as follows : Jasmine Internet Co., Ltd. provides a wide range of Internet services; for instances, Internet service  Triple T Broadband PCL. for individuals and corporate, Broadband Internet Triple T Broadband PCL. is a Voice Communication (ADSL), Data Center service, BranchConnext service Service Provider, Data, and Broadband ISP. The via ADSL and GPRS networks, WiFi service, Voice Over company has the telecommunication entrepreneur Internet Protocol service (VOIP), including Electronic license type 3 (Licensee with own network) by NTC. In Data Interchange service (EDI), and International addition, it has been allowed to provide such internet Calling Card service. In addition to such services, services as Broadband Internet, Digital data Network the company has offered consulting, design and or DDN, and Voice Over Broadband or VoBB.

3. Nature of Business


010 procurement services for IP solutions such as Online service via GPRS/EDGE/CDMA systems, IP camera service, and Wifi Hot Spot service.  JasTel Network Co., Ltd.             for instances, high-speed leased circuit for data transit, IP-VPN service and Managed Network service for both domestic and international clients,in addition to International Private Leased-Circuit (IPLC) service,International Internet Gateway (IIG) service, Co-Location / Data Center service and Managed or Total Solution service via optical fiber network and copper wire network.The company’s clients are Telecom Opertors, Telecom Service Providers and Enterprises.

4. Other Businesses Apart from the 3 business lines above, Jasmine Group is also engaged in other businesses as follows:  Chaengwatana Planner Co., Ltd. Chaengwatana Planner Co., Ltd. is the Rehabilitation Plan Administrator of Jasmine International PCL.  Jasmine Telecom Systems PCL. Jasmine Telecom Systems PCL. engages in the telecommunications and IT business in large size, entailing the system design, equipment procurement, installation and test on turnkey basis. The company also provides outsource services on telecommunications systems to the service provider companies, the licensees or concessionaires, or the winning bidders for the projects of the government and private sectors. Moreover, the company is the distributor for telecommunications test and measurement instruments imported from outside country and the distributor for security system and related equipment as well.The Stock Exchange of Thailand accepted the ordinary shares of Jasmine Telecom Systems PCL. as the listed security and commenced trading on September 18, 2006 in a group of IT and telecom using “JTS� as the trade name.  Jasmine International Overseas Co., Ltd., Jasmine International Overseas Co., Ltd. is a holding company, investing in overseas businesses. (On July 26, 2007, the Central Bankruptcy Court ordered the termination of its Rehabilitation proceeding.)

 Internet Knowledge Service Center Co., Ltd. Internet Knowledge Service Center Co., Ltd. is a holding company. The company and CAT are coshareholders in KSC Commercial Internet Co., Ltd.  TT&T PCL. TT&T PCL. provides fixed-line telephone and public telephone services in the provincial areas.  Premium Assets Co., Ltd. Premium Assets Co., Ltd. is engaged in space rental and related services for Jasmine International Tower.  Siam Teltech Computer Co., Ltd. Siam Teltech Computer Co., Ltd. distributes computer hardware and peripherals. The company provides consulting, design and installation services for computer systems and IT networks in addition to developing software applications and offering maintenance service to the customers who are in government sector and private companies.  ACeS Regional Services Co., Ltd. ACeS Regional Services Co., Ltd. provides mobile satellite service under the ACeS (Asia Cellular Satellite) project for Thailand and several Asian countries. Its service provides 2 types of terminals : handset and fixed satellite phone. The ACeS service, whose signal (footprint) is transmitted at all time everywhere even in such remote areas as deep jungles and far offshore, is currently available in 24 countries of Asia in both the post-paid and pre-paid forms. The ACeS handset is of a dual mode system – a satellite mode and GSM 900 mode . ARS’s entering into a national roaming agreement with GSM 900 operator in Thailand has brought to its clients further communication convenience. Moreover, the company also offers “ACeS Contax� -- a fixed satellite phone service of the latest technology which is designed for indoor use in remote areas and in some countries where basic telecommunications is still inadequate.  Smart Highway Co., Ltd. Smart Highway Co., Ltd. provides high-speed data communications service via landline network as well as customer premise equipment rental and installation services.  ACeS (Thailand) Co., Ltd. ACeS (Thailand) Co., Ltd. is a holding company.  Pakkred Planner Co., Ltd. Pakkred Planer Co., Ltd. is the Rehabilitation Plan Administrator of Jasmine International Overseas Co., Ltd.


The Company's Shareholding in Subsidiaries and Associates

Company name and head office address 1. Broadband Business Triple T Broadband PCL. 200, Moo 4, Chaengwatana Rd., Pakkred Sub-district, Pakkred District, Nonthaburi 11120 Tel : 0-2100-2100 Fax : 0-2100-2121 Triple T Internet Co.,Ltd. 200, Moo 4, Chaengwatana Rd., Pakkred Sub-district, Pakkred District, Nonthaburi 11120 Tel : 0-2100-2100 Fax : 0-2100-2121 2. Telecom Network Business Jasmine Submarine Telecommunications Co., Ltd. 200, 7th Fl., Moo 4, Chaengwatana Rd., Pakkred Sub-district, Pakkred District, Nonthaburi 11120 Tel : 0-2100-3183 Fax : 0-2100-3184 Thai Long Distance Telecommunications Co., Ltd. 200, Moo 4, Chaengwatana Rd., Pakkred Sub-district, Pakkred District, Nonthaburi 11120 Tel : 0-2100-3183 Fax : 0-2100-3184 3. Internet Service Business Acumen Co., Ltd. 200, 7th Fl., Moo 4, Chaengwatana Rd., Pakkred Sub-district, Pakkred District, Nonthaburi 11120 Tel : 0-2100-3000 Fax : 0-2100-3222 Jasmine Internet Co., Ltd. 200, Moo 4, Chaengwatana Rd., Pakkred Sub-district, Pakkred District, Nonthaburi 11120 Tel : 0-2100-3700 Fax : 0-2100-3793 JasTel Network Co., Ltd. 200, 7th Fl., Moo 4, Chaengwatana Rd., Pakkred Sub-district, Pakkred District, Nonthaburi 11120 Tel : 0-2100-3183 Fax : 0-2100-3184

Nature of Business

011

and proportion of common Total number of Number share hol ding of JAS and/or the paid-up shares subsidiary

Engaged in Broadband Internet service, digital data network service, fixed-line telephone service and public payphone service

1,000,000,000 ACU TT&T

989,994,070 share 9,999,930 share

99.00% 1.00%

Engaged in providing Internet service and Internet applications to the residential clients

1,000,000 TTTBB

999,300 share

99.93%

Engaged in submarine optical fiber cable network service on the east coast

15,500,000

JAS

15,499,994 share

100.00%

Engaged in submarine optical fiber cable network service on the west coast

30,900,000 JSTC

27,809,993 share

90.00%

Engaged in wireless Communication service via satellite network

7,600,000

JAS

7,599,994 share

100.00%

Engaged in a variety of Internet services

1,500,000

JAS

1,455,000 share

97.00%

Engaged in circuit leasing service and local as well as international data communications service

5,200,000 JSTC

5,199,993 share

100.00%


012 Company name and head office address 4. Other Business Chaengwatana Planner Co., Ltd 200, 29th-30th Fl.,Moo 4, Chaengwatana Rd., Pakkred Sub-district, Pakkred District, Nonthaburi 11120 Tel : 0-2100-3000 Fax : 0-2100-3150-1 Jasmine Telecom Systems PCL. 200, 9th Fl., Moo 4, Jasmine International Tower, Chaengwatana Rd., Pakkred Sub-district, Pakkred District, Nonthaburi 11120 Tel : 0-2100-8300 Fax : 0-2502-3363

Nature of Business The Rehabilitation Plan Administrator of JAS

and proportion of common Total number of Number share hol ding of JAS and/or the paid-up shares subsidiary 10,000

JAS

9,993 share

100.00%

Engaged in providing 702,950,000 Turnkey telecommunications (as of 22 Sep.2009) services ranging from system design, selection, supply, equipment installation to equipment testing besides being a distribution agent for telecommunications test devices Jasmine International Overseas Co., Ltd. Engaged in local and 11,538,463 overseas investment 200, Moo 4, Chaengwatana Rd., Pakkred Sub-district, Pakkred District, Nonthaburi 11120 Tel : 0-2100-3000 Fax : 0-2100-3152 Engaged in providing 12,000,000 Internet Knowledge Service Center and maintaining Internet Co., Ltd. network system 2/4, 10th Fl., Siam Commercial Samaggi Insurance Tower, Vibhavadi Rungsit Rd., Thungsonghong Sub-district, Laksi District, Bangkok 10210 Tel : 0-2955-0099 Fax : 0-2955-0300 TT&T PCL. Engaged in fixed-line and 3,242,484,261 public payphone services 252/30-34 Muang Thai-Phatra Office in the Tower 1, Huaykwang Sub-district, provincial areas Huaykwang District, Bangkok 10310 Tel : 0-2693-2100 Fax : 0-2693-2124 Premium Assets Co., Ltd. Engaged in space rental management and related 200, Moo 4, Chaengwatana Rd., services for Jasmine Pakkred Sub-district, Pakkred District, International Tower Nonthaburi 11120 Tel : 0-2100-3000 Fax : 0-2100-3575 Engaged in distributing 550,000 Siam Teltech Computer Co., Ltd. computer hardware and 200, 10th Fl., Moo 4, Chaegwatana Rd., other peripheral equipment, Pakkred Sub-district, Pakkred District, providing consulting Nonthaburi 11120 services, the design and Tel : 0-2100-3000 Fax : 0-2100-3501 installation of computers as well as IT network, and the development of application software

JAS ARS TJP

399,997,200 share 64,027,700 share 60,000,000 share

56.90% 9.11% 8.54%

JAS ACT ARS

4,594,134 share 3,994,325 share 3,000,000 share

39.82% 34.18% 26.00%

JAS

4,500,000 share

37.50%

JAS PA JTS STCC TJP

810,269,147 471,500,084 6,324,048 5,634,601 3,904,132

share share share share share

24.99% 14.54% 0.20% 0.17% 0.12%

ACU JSTC

69,999,993 share 60,000,000 share

53.85% 46.15%

JTS

538,264 share

97.87%


013 Company name and head office address

Nature of Business

ACeS Regional Services Co., Ltd. Engaged in satellite mobile phone service both in 200, Moo 4, Chaengwatana Rd., Thailand and several Pakkred Sub-district, Pakkred District, Asian countries and the Nonthaburi 11120 distribution of IP-Phones Tel : 0-2100-3000 Fax : 0-2100-3416 Smart Highway Co., Ltd. Engaged in high-speed data communications 200, Moo 4, Chaengwatana Rd., service via leased line Pakkred Sub-district, Pakkred District, Nonthaburi 11120 Tel : 0-2100-3000 Fax : 0-2100-3222 ACeS (Thailand) Co., Ltd. Engaged in investment business 200, Moo 4, Chaengwatana Rd., Pakkred Sub-district, Pakkred District, Nonthaburi 11120 Tel : 0-2100-3000 Fax : 0-2100-3152 Rehabilitation Plan Pakkred Planer Co., Ltd. Administrator of JIOC th th 200, 29 -30 Fl., Moo 4, Chaengwatana Rd., Pakkred Sub-district, Pakkred District, Nonthaburi 11120 Tel : 0-2100-3000 Fax : 0-2100-3150-1 Dormant Company T.J.P. Engineering Co., Ltd. Engaged in the survey, design, and construction 200, Moo 4, Chaengwatana Rd., of the outside plant Pakkred Sub-district, Pakkred District, and civil work for Nonthaburi 11120 telecommunications Tel : 0-2100-3000 Fax : 0-2100-3152 projects Jasmine Smart Shop Co., Ltd. Engaged in retailing telecom equipment 200, Moo 4, Chaengwatana Rd., Pakkred Sub-district, Pakkred District, Nonthaburi 11120 Tel : 0-2100-3000 Fax : 0-2100-3152 Mobile Communication Services Co., Ltd. Engaged in the NMT 470 MHz. Cellular Mobile 200, Moo 4, Chaengwatana Rd., Telephone business Pakkred Sub-district, Pakkred District, Nonthaburi 11120 Tel : 0-2100-3038 Fax : 0-2100-3152 Three BB Co., Ltd. Engaged in Internet and e-commerce businesses 200, Moo 4, Chaengwatana Rd., Pakkred Sub-district, Pakkred District, Nonthaburi 11120 Tel : 0-2100-3678 Fax : 0-2100-3679

and proportion of common Total number of Number share hol ding of JAS and/or the paid-up shares subsidiary 102,000,000 ACT

99,999,993 share

98.04%

1,550,000 ACU

1,044,693 share

67.40%

195,000,000 JIOC

114,742,696 share

58.84%

10,000 JIOC

9,993 share

100.00%

2,000,000

JAS ACU

1,600,000 share 399,995 share

80.00% 20.00%

1,100,000

JAS

1,099,993 share

100.00%

10,000,000

JAS

6,999,993 share

70.00%

5,200,000

JAS

5,199,993 share

100.00%


014 and proportion of common Total number of Number share hol ding of JAS and/or the paid-up shares subsidiary

Company name and head office address

Nature of Business

Compunet Corporation Co., Ltd. 200, Moo 4, Chaengwatana Rd., Pakkred Sub-district, Pakkred District, Nonthaburi 11120 Tel : 0-2100-3800 Fax : 0-2100-3810 Telecom KSC Co., Ltd 2/4 10th Fl.,Siam Commercial Samaggi Insurance Tower, Vibhavadi Rungsit Rd., Thungsonghong Sub-district, Laksi District, Bangkok 10210 Tel : 0-2955-0099 Fax : 0-2955-0300 Premium Real Estate Co., Ltd. 200, Moo 4, Chaengwatana Rd., Pakkred Sub-district, Pakkred District, Nonthaburi 11120 Tel : 0-2100-3000 Fax : 0-2100-3575 Khunka Palang Thai Co., Ltd. 2034/132-161 New Petchburi Rd., Kwaeng Bangkapi, Khet Huaykwang, Bangkok 10310 Tel : 0-2716-1600-700 Fax : 0-2716-1418 Palit Palangngan Co., Ltd. 2034/132-161 New Petchburi Rd., Kwaeng Bangkapi, Khet Huaykwang, Bangkok 10310 Tel : 0-2716-1600-700 Fax : 0-2716-1418

Engaged in the local transmission of data, pictures and voices via satellite

2,600,000

JAS

2,599,994 share

100.00%

Engaged in the distribution of computer, telecommunications equipment and software

100,000

JAS

40,000 share

40.00%

Engaged in the real estate business

8,200,000

JAS

4,018,000 share

49.00%

Engaged in power plant business

10,000

JAS

2,308 share

23.08%

Engaged in power plant business

10,000

JAS

1,500 share

15.00%


Revenue Structure of the Company, Subsidiaries and Associated Companies

015

3.2 Revenue Structure of the Company, Subsidiaries and Associated Companies Operated Nature of Business by (abr.) The Company and Subsidiaries Broadband Business TTTBB Total Telecom Network Business Total Internet Services Business Total Other Businesses

TTTI

99.00% held by ACU and 1.00% held by TT&T 99.93% held by TTTBB

JSTC TLDT

100.00 90.00% held by JSTC

ACU Jasnet JasTel

100.00 97.00 100% held by JSTC

CP JTS

100.00 56.90% held by JAS, 9.11% held by ARS, And 8.54% held by TJP 39.82% held by JAS, 34.18% held by ACT, and 26% held by ARS 53.85% held by ACU and 46.15% held by JSTC 97.87% held by JTS 98.04% held by ACT 67.40% held by ACU 58.84% held by JIOC 100.00 80% held by JAS and 20% held by ACU 100.00 70.00 100.00

JIOC PA STCC ARS SHW ACT CPN JAS TJP JSS MCS 3BB Total Total Revenue of the company and subsidiaries Associated Companies Other Businesses IKSC(1) TT&T

TKSC(1) PRE Grand Total

% of Shares Held by JAS

37.50 24.99% held by JAS, 14.54% held by PA, 0.20% held by JTS, 0.17% held by STCC, 0.12% held by TJP 40.00 49.00

2009 Revenue %

2008 Revenue %

2007 Revenue %

1,097.5

12.79

1,726.1

30.97

1,230.1

26.55

2,264.5 3,362.0 855.0 113.2 968.2 161.9 542.8 456.3 1,161.0 2,580.9

26.36 39.15 9.96 1.32 11.27 1.89 6.32 5.31 13.52 30.05

11.3 1,737.4 983.2 225.8 1,209.0 162.9 502.3 362.5 1,027.7 0.2 990.3

0.20 31.17 17.64 4.05 21.69 2.92 9.01 6.50 18.43 17.77

1,230.1 980.8 329.4 1,310.2 185.5 414.8 77.7 678.0 728.8

26.55 21.17 7.11 28.28 4.00 8.95 1.68 14.63 15.73

-

-

0.5

-

0.1

-

137.6

1.61

159.0

2.85

137.5

2.97

164.2 141.9 9.3 26.3 18.3 17.6

1.91 1.65 0.1 0.3 0.21 0.21

161.6 186.0 22.2 78.0 (5.5) 5.9

2.90 3.34 0.40 1.40 (0.10) 0.11

152.7 210.5 61.0 2.9 30.4 11.7 75.4

3.30 4.54 1.32 0.06 0.66 0.25 1.63

1.0 3,097.1 8,588.3

0.01 36.06 100.00

1.9 1,600.1 5,574.2

0.03 28.70 100.00

3.5 1,414.5 4,632.8

0.08 30.54 100.00

101.5 6,570.0

1.52 98.48

11.9 7,747.0

0.15 99.85

6.4 7,513.4

0.09 99.91

6,671.5

100.00

7,758.9

100.00

0.2 7,519.8

100.00

Remarks : (1) In 2009 the data was prepared by the management of that company. The Company and its subsidiaries have had no comparative proportion between the local and overseas distribution during 2007-2009


016 Significant Changes in the Year 2009 price of Baht 0.44 per share, totaling Baht 278,189,296.to Swan Gold Finance Limited (312,248,400 shares) and Simpson Financial Limited (320,000,000 shares) in order to adjust its shareholding structure to be in compliance with the regulations of the SEC and the 1. Shareholding Structure and SET. The sale would be done in tranches to both buyers Management and the transfer would be done after each buyer’s payment each time. The proceeds received from the 1.1 Acquisition and Disposal of Assets of Jasmine International Public Company Limited sale is for utilizing as working capital. » The Board of Directors’ Meeting No.1/2009 of » On August 3, 2009 ACU subscribed 809,086,135 common shares in TTTBB by means of right offering PA, convened on January 12, 2009 approved to and 80,908,525 shares that TT&T waived its right at purchase TT&T common shares of not exceeding the offering price of Baht 1.00.- apiece. Thus, the Baht 230 million. The company purchase was made total value is Baht 889,994,660.- The reason for such through the Stock Exchange of Thailand (SET), the subscriptions was TTTBB had potential growth in the total amount of investment was Baht 224 million. Thus, broadband business with its technology and good JAS and its subsidiaries had increased its holding of customer base that should support both the existing common shares in TT&T from 985,148,012 or 30.38% to and new businesses of ACU; hence the growth of 1,299,419,312 or 40.08% revenue. After the transaction, the proportion of TTTBB » The Board of Directors’ Meeting No.4/2009 of PA, shares held by ACU has been changed from 99,999,410 convened on June 4, 2009 approved to purchase shares or 90.91 percent to 989,994,070 shares or of 480,000 Jasnet common shares from CAT Telecom 99 percent. Public Company Limited or 32% of the registered capital of Jasnet at the price of Baht 12.09 per share. » The Board of Directors’ Meeting No.6/2009 of JAS, convened on November 12, 2009 approved to The total amount of purchase was recorded at Baht purchase Jasnet common shares from 269 minor 5,803,200. The purchase increased JAS’s holding share holders totaling 45,000 shares or 3% of Jasnet of common shares in Jasnet from 975,000 or 65% to registered capital at the price of 12.09 per share. The 1,455,000 or 97% investment was Baht 544,050 in Jasnet, the Internet » The Board of Directors’ Meeting No.6/2009 of PA, service provider company with high growth potential. convened on June 9, 2009 approved to sell the This purchase has increased JAS holding in Jasnet from entire 893,270,400 JAS common shares held by PA, 97% to 100% equivalent to 12.07 percent of paid-up capital shares of JAS, totaling 7,399,491,378 shares (this excluded 2,032,127,200 treasury stocks) at the price of Baht 0.40 per share, totaling Baht 357,308,160.- to ACE Millennium Investments Limited in order to adjust its shareholding structure to be in compliance with the regulations of the Securities and Exchange Commission (“SEC”) and the SET. The sale would be done in tranches to the buyer and the transfer would be done after the buyer’s payment each time. The proceeds received from the sale is for utilizing as working capital. » The Board of Directors’ Meeting No.3/2009 of ARS, convened on June 17, 2009 approved to sell 632,248,400 JAS common shares held by ARS at the In the year 2009, There are major activities and changes at Jasmine International Public Company Limited as follows:


017

1.2 Treasury Stock Program for Financial Management JAS Board of Directors’ Meeting No. 3/2009 convened on May 12, 2009 and No. 4/2009 held on June 8, 2009 and JAS Extraordinary General Meeting of Shareholders No. 1/2009 held on June 17, 2009 passed a resolution on the proposed share repurchase for financial management purposes through General Offer. The maximum amount for the share repurchase would not exceed 615 million Baht. The Company’s treasury stock period was from July 3, 2009 to July 13, 2009. During that time, the Company repurchased 1,397,727,200 shares at the repurchase price of Baht 0.44 per share while the par value was at Baht 0.50 per share. The number of such repurchased shares did not exceed 16.79 percent of the total paidup shares on June 17, 2009 -- the day on which the Extraordinary General Meeting of Shareholders No. 1/2009 passed a resolution on the proposed share repurchase for financial management purposes, or 14.82 percent of the total paid-up shares on July 13, 2009 -- the last day of the repurchase period. The total amount of the share buyback was Baht 614,999,968.-

The Internet speed of 3BB was increased from 2 Mbps to 3 Mbps in March 2009, and at mid-year a 10 Mbps service was introduced. Additionally, TTTBB and its content partners launched 2 new digit contents and a new service, namely: movie buffet; online HDTV (IPTV) for watching movies via a high-definition settop box that also allows a rewind of a movie; and hot-spot wireless internet to promote Internet usage and add income to the company. In December, TTTBB increased its Internet speed from 3 Mbps to

4 Mbps as a New Year present to its customers at no extra charge in order to promote sales as well as to 1.3 Subsidiaries Name Changing retain its customer base. » JCW has registered its name change to “Three BB » Acumen widened its WiFi service under the trade name Company Limited” (3BB) with Ministry of Commerce “Spider Hotspot” by increasing the access points to on September 22, 2009. more than 5,000 at public places in Bangkok and upcountry such as Central Palza, SE-ED, Family Mart, » Ji-Net has changed it trade name and logo to Jasnet 108 Shop, S&P, and Kitchen Plus. Besides, Acumen in January 2009. also bidded successfully for 2 projects of the Royal Thai Navy,rd i.e., the “Satellite Communications Improvement 2. Major Developments in Business for 3 Naval Area Command Project” and the “Mobile Command Post Project”, owing to Acumen’s long The classifications of business into four groups were experience in satellite communications. maintained in 2009 as in 2008. During 2009, significant developments in business are as follows: » Jastel received two 5 year licenses on March 30, 2008, one to provide international Internet gateway service, » TTTBB became a leading provider of Broadband and the other is a Type 2 ISP (with its own network). Internet service together with TTTI and TT&T SS, and rebranded its main product to “3BB”. Its service covered not only provincial areas, but also Bangkok and surrounding provinces. It opened 280 3BB shops and kiosks mostly in modern trade, around the nation.


018 Social Activities and Contribution In addition to determination to provide a good corporate governance with transparency and fairness to bring maximum satisfaction to customers, Jasmine Group intends to contribute CSR: Corporate Social Responsibility through supporting in developing the Thai society to have a better quality of life and also through many different activities with the strong belief that to build a good society, it has to start from the smallest unit which is through family, school, and workplace respectively. Jasmine Group has initiated the socially constructive projects to service its society with a strong belief that to give, to share and not to exploit others is good conduct and will receive reward in return. At least they would make that particular giver happy in mind especially once it’s found that the receiver has gained something out of it. To be part of socially constructive projects and activities, Jasmine Group has realized the importance of society and environment, aiming at development of education and sport and become a strong foundation for society, including supporting and creating the awareness of building goodness in society.

and also to promote and to support the learning opportunity for Thai youth. Jasmine Group held 'Jasmine Summer Camp' program for youths aged between 6-12 to join during their summer time. It was determined to build unity, to work as a team, to learn to work well through working with one another in through various activities, to create an attitude of building good inter-relationships and to learn to share. Apart from this, the camp aimed to develop Thai youth whom will soon be the future of the country to have skill, knowledge and competencies suited to their age and also have courage in the suitable way.

For Social Activities and Contribution in 2009, Jasmine Group has contributed socially constructive projects and Sports: activities as follows: In realizing that sport is the tool to help promote the unity of the youth and the people in the society, to help create Education : the sporty approach to learning how to give and take, Jasmine Group financially supported the 10th Faculty and to spend their time well. of Fine and Applied Arts' Concert, Music Department, Faculty of Fine and Applied Arts, Chulalongkorn University Jasmine Group financially supported the budget for the to develop education and talent for public performance whole season to Chula United Football Team under the name '3BB' (Three Broadband).


019 Triple T Broadband PCL. (TTTBB) and Jasmine Group' employees joined in ' Sharing Dream Sharing Mercy' by donating sports equipment to 'Baan Khao Wangman School', A. Muang Rayong, Rayong province. Jasmine Group financially supported the budget for 'Bowling Competition' for the Club of the Associate Judges of the Central Intellectual Properties and International Trade Court.

Environmental Concern and Conservation, and Global Warming : In creating the awareness among the youth and the people to have a concern for the environment. Jasmine Group and its employees' representative joined in mangrove planting in 'Joining Heart in Planting Mangrove to Bring Nature Back to Society Jasmine Project’ at T. Klong Kone, A. Muang, Samut Sakorn Province. Jasmine Group has realized the importance of the mangrove conservation and its recovery to be in a healthy condition because mangrove can help relieve tidal effects, reduce beach erosion, provide protection from storms for the local populace living around the coast, and also to help increase the land area inshore. Mangrove root systems support the mud build up to the surface of the ground, thus creating new land mass. Moreover the Company believes that this activity will help create the good conscience of our staff to be part of solving the problem and to understand ways to conserve and preserve our environment and natural resources. These benefits from mangrove also will ultimately add value to the economy of the country.

Jasmine Group and its employees joined in cultivating the coral with 'Cultivating Coral Preserving the Shore Project' at The Naval Base, The Royal Thai Marine Corps, A. Satahip, Chonburi Province. As such, Jasmine Group recognizes the impact of the decreasing coral along the shore for these past few years by its effecting of natural disaster, so made corals bleached into white. Altogether with tourism and industrial which direct and indirect affected by human. Jasmine Group has built the conscience and promoted the knowledge and understanding to its employees of seeing the benefit, the importance and the value of the coral and to improvise cooperation for its recovery. This natural conservation and preservation of the coral will bring back its natural beauty. Moreover this activity also brought balance to the shore ecosystem for the benefit of the habitat and the growth and breeding of coral to last forever.


020

Others: Jasmine Group with 'The National Blood Centre,Thai Red Cross had held 'Jasmine Joined in Blood Donation Project' which happens quarterly and this year has been our 13th year helping this blood donation project to bring quality blood to the Thai Red Cross. We consider this as a merit to help bring blood needed to the sick and also to increase the amount of blood reserved which still in need in the country. Jasmine Group and employees' representative had held ' Bring Mom to Travel with Chokchai Farm on Mother's Day' project to promote good relationships within the family and also to spend time together. As such, this activity has brought love and understanding between mother and child. Jasmine Group and employees' representative had held 'Build Fortune by Paying Homage to a Buddha Image with 9 Temples' project. We believe that to pay respect to a Buddha Image and Sacred Item at significant places, together with to performing deeds of merit brings peace to the mind, happiness to the heart and brings fortune to the self. As such, this has built a conscience and has created the opportunity to its employees to make merit and to pay respect to a Buddha Image together. responsibility in every step of the procedure. We believe Furthermore this has given its employees confidence in this has brought good conscience to our management doing good and preservation of goodness. team and employees to take part in being responsible for the society in doing good, creating beauty, and Jasmine Group believes that in all projects regarded understanding of being part of society, together in CSR: Corporate Social Responsibility, we have instilled building a strong and a good foundation to prevail in the cooperation of its employees to take part and to take Thai society.


Trends in Telecommunications Business in the Year 2010

021

During the year 2009, there were many significant events that affected the economy and business as a whole, and the telecom business in particular. On a global picture, most people believed the world economy had reached the bottom and that some countries, including Thailand, might even see some modest growth under conflicting signs of recovery. The world economic recovery, however it is, will have impact most countries in a similar manner. The event that had the most adverse impact to the Thai economy in 2009 was the political turmoil that turned into riot in Bangkok during Songkarn holidays in mid-April. Although the riot only last a few days, it has badly damaged the investment and tourism climate as well as the country’s image. If violence occur again in 2010, it could inflict enormous loss to our economy and long-term confidence of investors who weigh political risk heavily on their investment decisions. The long-protracted Map Ta Phut problem erupted into a full-blown economic issue when the Central Administrative Court ordered suspension of 76 projects with investment valued over 600 billion baht in mid-2009. Although later the court allowed 11 projects to resume, the ruling stunned investors and severely shook their confidence in Thailand, to the extent that some might consider moving their investment base elsewhere if the problem and uncertainty prolonged well into 2010. The inability of National Telecommunications Commission (NTC) to issue license to operators to provide 3G service was a major letdown in the telecom sector in the past year. Although NTC had made several attempts to clarify the issue that would lead to the auction of 3G frequency spectrum, the effort had been stalled by different interest groups, and also by the question of it legal authority to conduct the auction. The impasse had delayed the investment and development of Thai telecom industry, causing opportunity loss and perhaps denting the economic growth. All of the above mentioned events would have impact on the economy and business to a varying degree directly or indirectly. For a telecom industry, the delay in 3G implementation would have the most effect in terms of investment for new infrastructure, national ICT development to keep up with the world, and innovation of new products and services.

The Company Business in 2010 At present, the core business of Jasmine Group is providing high-speed connectivity for Broadband Internet though its modern IP network and wireless access. During 2009, Triple T Broadband Public Company Limited, a subsidiary of Jasmine Group had invested in expanding its network in upcountry and in building a new network in Bangkok and adjacent provinces, and conducted a comprehensive marketing campaign throughout the year. It also increased its Internet speed from 2 Mbps to 3 Mbps and 4 Mbps at the end of the year without extra charge to its customers. It rebranded its main product to “3BB” and improved all aspect of the service. All these activities helped increase the number of its customer from about 400,000 to almost 600,000 by year-end. For 2010 TTTBB will continue to invest in expanding the network in provincial areas and new network in Greater Bangkok. The emphasis will be placed on improving the quality of service in order to support the increase in new users which are expected to be in the hundreds of thousand. Furthermore, companies in Jasmine Group will work even more closely together to enhance their strengths, develop new products, reduce costs, and manage their talents more effectively. In addition to the projected growth of TTTBB, other subsidiary companies also aim for higher growth in their business in 2010. These include businesses that are related to high-speed Internet such as international private leased-circuits (Jastel), Voice over IP service (JasNet), and high-speed wireless Internet Access (Acumen). Another company that has good business outlook is Jasmine Telecom Systems PLC which is a leading company in the field of government and state-enterprise contract. This is due to the fact demand for Broadband Internet is still growing, and so is the expansion of IP networks, the area in which JTS has expertise. Therefore, even though 2010 will be a year of challenges and uncertainty, Jasmine Group’s prospect for growth is still good, thanks to it strategic direction and market position.


022 RISK FACTORS Revenue

Finance

Risks from Global Economic and Financial Risks from Credit Limits by Financial Institutions Crises and Reliance on Government Contract Global economic deceleration is the main reason for widespread tightening-up of credit, which has alarmed Business the Thai financial institutions into being cautious about loan authorization to avoid the non-performing loan (NPL). Nevertheless, since loans are necessary for business expansion, the Company has determined to play safe by adjusting the financial structure to be in compliance with the requirements of each financial institution, has simultaneously attempted to seek more credits from other alternative sources and has proposed the business investment plan to be considered from the creditor in other financial institutions.

2009 was a year in which the world experienced economic deceleration. Unavoidably, such crisis has affected Thailand’s economy. It is forecast that the impact will remain. In order to mitigate risks the Company may face in the year 2010, prudent measures have been drawn up - the maintenance and the development of telecommunications networks to be of superior standard and stability to those owned by business rivals, the expansion of branches and service points to give expedient access to the customer and service user and last but not least, strategic revision of business marketing Risks from the Exchange Rate and the targeting of new customer groups. The Company recorded no liability in foreign currencies, thus has made the Company was unaffected by risks Since some companies in Jasmine Group are still in the by exchange rates. The remaining foreign-currency business of goverment contracts, therefor, to alleviate liabilities of the subsidiaries as of December 31, 2009 the risk, the Company has attempted to acquire new which were recorded at a mere USD54 million. Despite sources of income by improving business strategies the decrease of such risks, the subsidiaries has set up a and drawing up a more flexible business plan, focusing risk management measure through continually forwarding on opening up new businesses which rely on existing exchange contracts for the debts in foreign currencies, so networks and well-synergized strong points of the preventing the risks that might occur due to the fluctuation Group’s businesses. Targets are groups of new customers in the exchange rate of the foreign currency. with continuing growth potential.

As at December 31, 2009, the Company’s subsidiaries recorded net liabilities in foreign currencies, which were not hedged against risks in exchange rate as summarized below : Consolidated Financial Statement Currency ence: Foreign Currency Baht(MilEquival lion Baht) Us Dollar 54 Million 1,809.35 Total 1,809.35 Total Assets 15,944.25 % Per Total Assets 11.35 Remarks : Exchange rate as at December 31, 2009

The Company’s Financial Statement Baht Equivalence: Foreign Currency (Million Baht) -

6,346.70 0.00


023 As of December 31, 2009, the Company recorded no Laws liabilities in foreign currencies and so accorded no affect Laws regarding telecommunications operation issued against risks in exchange rate. by National Telecommunication Commission of Thailand (NTC) may bring about risks to the Company. For examples, The remaining foreign-currency liabilities of the subsidiaries the regulations concerning interconnection charge and were recorded at USD54 million. Despite the decrease the regulations concerning Wimax and 3G, which are of such risks, the subsidiaries have already set up a risk new technologies, have resulted in higher service costs. management measure through continually forwarding To manage the risks, the Company always keeps abreast exchange contracts to cover the risk from the fluctuation of the news of NTC’s issues of regulations, scrutinizing in the foreign currency exchange rate. particularly on the ones that may have direct impacts on the Company business. Furthermore, it routinely gives Human Resources suggestions and comments to NTC whenever requested. The emergence of several new telecom operators – a Such cooperation enables the Company to properly set consequence of telecom liberalization -- has caused its business directions to be in line with NTC’s regulations. a high turnover rate of competent staff. This is certainly considered an important risk. To manage it, the Company Trade and economic liberalization has opened more has come up with human resources development plan chances for the Company to expand its business overseas. in alignment with business goals and directions. It also In order to manage risks that may arise from laws and supports staff to achieve professional progress, depending regulations of different countries with which the Company on individual knowledge and skills based on result from has business connection, the Company has discussed with annual performance appraisal. The Company also legal advisor on business operation and law compliance rewards its employees with internal and external equities and accordingly comply to the relevant laws. based on job scopes and responsibilities. Additionally, to meet the needs of manpower in due time, manpower Competitions scheme has been set in advance. Moreover, to create NTC’s telecom liberalization and issuance of licenses for happy environment, good work relationship among the new services has resulted in more competitions amongst existing staff of all levels is promoted. operators of the same industry. To cope with the risks, the Company has adjusted marketing strategies, expanding The Company has initiated a project of selecting modern customer bases to both inside and outside the country, staff members who are of high potential and talented developing products and new services, including to join specially designed projects. Their abilities shall be organizing the campaign by using the concept of CRM developed to the maximum so that they can become to create and maintain relations both with the customers future leaders of the Company. and business allies. The Company realizes the importance of the aforementioned risk factors and their effects on business operation; it has adopted measures to control them to minimize or eliminate those risks in order to maximize the Company’s benefits.


024 Shareholding Structure 5. Shareholding Structure 5.1 Shareholders The ten largest company shareholders as at the latest closing date for the Company share register book (May 27, 2009) is as follows (The 8,324,869,663 shares used for calculation is derived from deducting 634,400,000 treasury stocks from the total of 7,690,469,663 shares): Group of Shareholder* 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Bodharamik Group Premium Assets Co., Ltd. ACeS Regional Services Co. Ltd. Quam Securities Nominee (Singapore) Pte Ltd. HSBC PRIVATE BANK (SUISSE) SA Deutsche Bank Group AG Thai NVDR Co., Ltd. Bangkok Bank Public Co., Ltd. Citigroup Global Markets Group Mr.Tanit Onlaied

Number of Shares 1,482,506,470 ** 893,270,400 *** 632,248,400 570,000,000 261,410,000 202,572,970 189,324,700 115,611,377 106,950,732 88,842,300

% of Total shares 19.28 11.62 8.22 7.41 3.40 2.63 2.46 1.50 1.39 1.16

. Remarks : * Information of major shareholders as group of persons and juristic persons % of Shareholding 1) Bodharamik Group - Individual - Mr. Pete Bodharamik - Mr. Anupong Bodharamik 2) Deutsche Bank AG Group - Broker - Deutsche Bank AG London - Deutsche Bank AG, Frankfurt 3) Citigroup Global Markets Group - Broker - Citigroup Global Markets Limited. – Prop. Custody Account - Citigroup Global Markets Inc. – 1 Client Segregated Account

19.27 0.01 2.63 0.00 1.38 0.01


Management 025 5.2 Management Organization chart of Jasmine International Public Company Limited as at December 31, 2009

Remuneration and Nomination Committee Board of Directors

Audit Committee

Risk Management Committee Office of Internal Audit

Chief Executive Officer

Office of Chief Executive Officer

Office of President

President

Accounting & Regulatory / Compliance Department

PR & Activities Department

Finance Department

Human Resources Department

Group CRM & Admin Department

Information Technology Department


026 Board of Directors and Management of the Company

General Tienchai Sirisumpan Honorary Chairman Independent Directorand

Dr. Vichit Yamboonruang Independent Director, Chairman of Audit Committee

Mr. Pete Bodharamik Director, Chief Executives Officer

Dr. Varapol Socatiyanurak Independent Director,

Dr. Yodhin Anavil

Member of Auditof Committee and Chairman Remuneration and Nomination Committee

Independent Director,andMember ofof Audit Committee Member Remuneration and Nomination Committee

Mr. Somboon Patcharasopak Director, Member of Risks Management

Mr. Subhoj Sunyabhisithkul

Committee, and Member and Secretary of Remuneration Nomination Committee and

Mr. Terasak Jerauswapong

Mr. Pleumjai Sinarkorn

Director, Member ofCommittee Risks Management

Director

Director, Member ofCommittee Risks Management

Ms. Saijai kitsin

Director, Executive Vice President, Accounting and Finance Department, Secretary to the Board ofSecretary Director, and Corporate


032 Shareholding of Directors and Executives Change in Number of Shares in 2009 Increase (Decrease) Class 2 Warrant Ordinary Share Warrant (Unit) (Share) JAS-W(1) Issue No. 7 2) Issue No. 8 2) Issue No. 9 Issue No. 10 1 General Tienchai Sirisumpan 2 Dr.Vichit Yamboonruang 3 Dr.Varapol Socatiyanurak 4 Dr.Yodhin Anavil 5 Mr.Pete Bodharamik 6 Mr.Somboon Patcharasopak 7 Mr.Subhoj Sunyabhisithkul 8 Mr.Terasak Jerauswapong (75,580) 9 Ms.Saijai Kitsin (10,405,300) 10 Mr.Pleumjai Sinarkorn 11 Ms.Nitt Visesphan 12 Mrs. Pindao Rojanakul 13 Mr. Thana Khaosaard 14 Dr. Kamolrut Visithyothin 15 Mr. Amnuay Pongsajaru Name-Surname

Remaining Number of Shares at the end of 2009 Class 2 Warrant Ordinary Share Warrant (Unit) (Share) JAS-W(1) Issue No. 7 2) Issue No. 8 2) Issue No. 9 Issue No. 10 1 General Tienchai Sirisumpan 2,993,300 2 Dr.Vichit Yamboonruang 1,193,300 3 Dr.Varapol Socatiyanurak 4 Dr.Yodhin Anavil 5 Mr.Pete Bodharamik 1,481,856,470 6 Mr.Somboon Patcharasopak 18,589,270 7 Mr.Subhoj Sunyabhisithkul 1,767,240 1,325,430 1,767,240 1,325,430 8 Mr.Terasak Jerauswapong 5,585,080 718,390 538,790 718,390 538,790 9 Ms.Saijai Kitsin 2,074,790 10 Mr.Pleumjai Sinarkorn 11 Mrs. Pindao Rojanakul 12 Mr. Thana Khaosaard 13 Dr. Kamolrut Visithyothin 14 Mr. Amnuay Pongsajaru 30,000 Remarks : 1)2) Last exercised on June 15, 2009 Expired on April 10, 2009 Name-Surname


Details of Directors in the Subsidiaries and Associate / Affiliate

035

Directors’ Shareholding Shareholding by the Board of Directors in the Subsidiary/Associated Companies Name of Company

Name of Director

Jasmine Submarine Telecommunications Co., Ltd. Mr. Somboon Ms. Saijai Thai Long Distance Telecommunications Co., Ltd. Mr. Somboon Mr. Terasak Ms. Saijai Acumen Co., Ltd. Mr. Somboon Ms. Saijai JasTel Network Co., Ltd. Mr. Somboon Mr. Subhoj Mr. Terasak Ms. Saijai Mr. Yodhin Jasmine Telecom Systems PCL.1) Mr. Somboon

TT&T PCL.2)

Patcharasopak Kitsin Patcharasopak Jerauswapong Kitsin Patcharasopak Kitsin Patcharasopak Sunyabhisithkul Jerauswapong Kitsin Anavil Patcharasopak

Mr. Subhoj

Sunyabhisithkul

Mr. Terasak

Jerauswapong

Ms. Saijai Mr. Pleumjai

Kitsin Sinarkorn

Mr. Pete

Bodharamik

Mr. Somboon Patcharasopak Mr. Subhoj

Sunyabhisithkul

Mr. Terasak

Jerauswapong

Mr. Pleumjai

Sinarkorn

Ms. Saijai

Kitsin

of Shares as Type of Share atNumber December 31, 2009 Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary ESOP Warrant Ordinary ESOP Warrant Ordinary ESOP Warrant Ordinary Ordinary ESOP Warrant ESOP 2006/1 ESOP 2006/2 Ordinary ESOP 2006/1, ESOP 2006/2 Ordinary Ordinary ESOP 2006/1 ESOP 2006/2 Ordinary

1 1 1 1 1 1 2 1 1 3 1 165,000 150,400 600,000 150,000 1,050,000 150,000 600,000 400 150,000 600,000 294,667 1,346,311 637,750 166,667 897,541 77,000 45,000 261,333 1,346,311 20,000


036 Name of Company Premium Assets Co., Ltd. Siam Teltech Computer Co., Ltd. ACeS Regional Services Co., Ltd. Smart Highway Co., Ltd.

ACeS (Thailand) Co., Ltd. T.J.P. Engineering Co., Ltd.

Jasmine Smart Shop Co., Ltd. Mobile Communication Services Co., Ltd.

3BB Co., Ltd.

Compunet Corporation Co., Ltd.

Name of Director Mr. Terasak Ms. Saijai Mr. Somboon Mr. Somboon Mr. Subhoj Mr. Terasak Mr. Somboon Mr. Somboon Mr. Subhoj Mr. Terasak Mr. Somboon Mr. Somboon Mr. Subhoj Mr. Terasak Mr. Somboon Mr. Subhoj Mr. Terasak Mr. Somboon Ms. Saijai

Jerauswapong Kitsin Patcharasopak Patcharasopak Sunyabhisithkul Jerauswapong Patcharasopak Patcharasopak Sunyabhisithkul Jerauswapong Patcharasopak Patcharasopak Sunyabhisithkul Jerauswapong Patcharasopak Sunyabhisithkul Jerauswapong Patcharasopak Kitsin

Remarks : 1)2) Shareholding as at September 22, 2009, the closing date of share register book Shareholding as at January 20, 2010, the closing date of share register book

of Shares as Type of Share atNumber December 31, 2009 Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary

3 3 1 1 1 3 1 1 1 2 1 1 1 3 1 1 2 1 2


Management Structure 037 (1) Management Structure 1.1 The Company’s director structure Comprises 4 sets of committees, namely the Board of Directors, the Audit Committee, the Remuneration and Nomination Committee, and the Risks Management Committee. 1.2 The names and the scopes of authorities and duties of each committee are as follows : 1.) Board of Directors The Company’s Board of Directors as at December 31, 2009 consists of the following 10 directors : 1. General Tienchai 2. Dr. Vichit 3. Dr. Varapol 4. Dr. Yodhin 5. Mr. Pete 6. Mr. Somboon 7. Mr. Subhoj 8. Mr. Terasak 9. Mr. Pleumjai 10. Ms. Saijai

Sirisumpan Yamboonruang Socatiyanurak Anavil Bodharamik Patcharasopak Sunyabhisithkul Jerauswapong Sinarkorn Kitsin

Honorary Chairman and Independent Director Independent Director Independent Director Independent Director Director * Director * Director * Director * Director * Director , Secretary to the Board of Director, and Corporate Secretary,

Remarks : * Authorized director

Authority and Duties of the Board of Directors 1. All directors shall perform their duties in compliance with the laws, Objectives and Articles of Association of the Company as well as resolutions of the Company’s shareholders’ meetings. 2. All directors are prohibited from engaging in any business, being a partner, or director in any entity which is in a similar business and in competition with the business of the Company, unless such directors receive a prior consent from the board of directors in a board of director’s meeting. 3. All directors shall inform the Company without delay of their interests in any contract which the Company has entered or is about to enter into, or when their shares or debentures in the Company or its affiliates increase or decrease. 4. A Board of Directors’ meeting shall be held at least once every 3 months. 5. The directors who are authorized to bind the Company in any transactions are either the chairperson or other two directors together, who would sign and affix thereto with the Company’s seal. 6. The Board of Directors is empowered to designate the director(s) to bind the Company by signing his (their) name(s) and affixing the Company’s seal.


038 2.) Audit Committee The Company’s Audit Committee as at December 31, 2009 consists of the following 3 members: 1. Dr. Vichit Yamboonruang Chairman of Audit Committee 2. Dr. Varapol Socatiyanurak Member of Audit Committee (Well-verse and experienced in auditing financial statements) 3. Dr. Yodhin Anavil Member of Audit Committee

Scope of Duties and Responsibilities of Audit Committee 1. To verify the Company’s financial statements for accuracy and adequacy 2. To oversee both the Company’s internal control system and internal audit system to ensure their appropriateness and efficiency aside from considering independence of the internal audit department, approving the appointment, the transfer, and the dismissal of the head of the internal audit department as well as the heads of any other departments responsible for internal auditing 3. To oversee and ensure the Company’s conformity to the law regarding securities and stock exchange in addition to the regulations of the Stock Exchange of Thailand and the laws relevant to the Company’s business 4. To consider, select and appoint persons who are independent to be the Company’s external auditors and propose their remuneration in addition to having a meeting with such auditors at least once a year without the presence of the management 5. To consider the related transactions as well as the transactions which may cause conflicts of interest and make sure that such transactions are reasonable and in compliance with the related law and the regulations of the Stock Exchange of Thailand for the maximum benefit of the Company 6. To prepare the Audit Committee report which is disclosed in the Annual Report of the Company ; the report must be certified by the signature of the Chairman of the Audit Committee and must include at least the following information : 6.1 The opinion on accuracy, completion, and creditability of the Company’s financial report 6.2 The opinion on adequacy of the Company’s internal control system 6.3 The opinion on compliance with the law regarding securities and stock exchange in addition to the regulations of the Stock Exchange of Thailand and the laws relevant to the Company’s business 6.4 The opinion on appropriateness of the external auditors 6.5 The opinion on the transactions which may have conflicts of interest 6.6 The number of Audit Committee meetings and the attendance of each Audit Committee member 6.7 The opinion or overall remarks the Audit Committee obtains during performing duties in line with the charter 6.8 Other information deemed appropriate for the acknowledgement of the shareholders and investors under the scope of duties and responsibilities authorized by the Board of Directors 7. Any other tasks assigned by the Board of Directors with the consent of the Audit Committee The Audit Committee has a 3-year term in the office. In case of vacancy for any reason other than at the expiry of his term, the Board of Directors shall, to fulfill the Audit Committee as stipulated, elect and appoint a qualified person to fill in the vacancy. Such new member of the Audit Committee shall retain his office only for the remaining term of the office of the Audit Committee member whom he replaces.


Mangement Structure

039

3.) Remuneration and Nomination Committee The Company’s Remuneration and Nomination Committee as at December 31, 2009 consists of the following 3 directors: 1. Dr. Varapol Socatiyanurak Chairman of Remuneration and Nomination Committee 2. Dr. Yodhin Anavil Member of Remuneration and Nomination Committee 3. Mr. Somboon Patcharasopak Member and Secretary of Remuneration and Nomination Committee

Scope of Duties and Responsibilities of Remuneration and Nomination Committee Remuneration 1. To set up remuneration policy for the Board of Directors and other committees of the Company, including Chief Executive Officer and President appointed by the Board of Directors 2. To determine remuneration and other benefits for the Board of Directors and other committees of the Company, including Chief Executive Officer and President appointed by the Board of Directors and propose the remuneration and other benefits to the Board of Directors for further consideration 3. To allocate securities offered by the Company in any securities offering project to the Company’s directors and staff with respect to terms and conditions related to such securities offering (if any). Nomination 1. To set up the selection criteria and qualifications of a person who shall assume the position of director, member of other committees, Chief Executive Officer and President of the Company 2. To select, consider, and nominate a person who possesses the qualifications suitable for assuming the position of director, member of other committees, Chief Executive Officer and President of the Company and propose to the Board of Directors for further consideration The Remuneration and Nomination Committee shall directly report to the Board of Directors. The Chairman and each member of the Remuneration and Nomination Committee have a 3-year term in office. The Chairman and each member of the Remuneration and Nomination Committee who retire by rotation are eligible for re-election. Whereby, the approval for the authority of the Remuneration and Nomination Committee does not include the power to approve any transaction in which the Remuneration and Nomination Committee or any person, who are related to them ,have an interest or conflict of interest in any other way with the Company as per the regulations set forth by the Stock Exchange of Thailand (SET). However, provided that such a case occurs, it must be proposed to the Board of Directors’ meeting and / or the shareholders’ meeting for approval, according to the Company Articles of Association.

4.) Risks Management Committee The Company’s Risks Management Committee as at December 31, 2009 consists of the following 5 directors: 1. Mr. Somboon Patcharasopak Member of Risks Management Committee 2. Mr. Subhoj Sunyabhisithkul Member of Risks Management Committee 3. Mr. Terasak Jerauswapong Member of Risks Management Committee 4. Mr. Pisit Tantirodjanakitjakarn Member of Risks Management Committee 5. Mr. Thana Khaosaard Member and Secretary of Risks Management Committee


040 Authorities and duties of Risks Management Committee 1. To stipulate Risk Management framework and policy 2. To set up risk management strategy, proceed and promote the risk management to be used in the whole organization, focusing on raising of risk awareness 3. To verify, follow up and evaluate the risk management plan so as to decrease the risks to be in a proper level 4. To regularly report to the Board of Directors of the Company regarding the matters that need to be improved so as to be in compliance with the set forth rules and regulations

Chief Executives Officer Mr. Pete Bodharamik

Management The Company’s management as at December 31, 2009 consists of the following 6 executives: 1. Ms. Saijai Kitsin Executive Vice President, Accounting Department 2. Mrs. Nitt Visesphan Vice President, Accounting & Finance Department 3. Mrs. Pindao Rojanakul Vice President, Accounting & Regulatory / Compliance 4. Mr. Thana Khaosaard Vice President, Office of Internal Audit 5. Dr. Kamalrut Visithyothin Vice President, Group CRM & Admin Department 6. Mr. Amnuay Pongsajaru Vice President, IT Department

Authority and Duties of Chief Executive Officer Chief Executive Officer controls, supervises, follows up 1. The President is to supervise, administer, and implement the operations of the President and the Management the normal functions of the Company in such a way team, and concurs and adjusts the Company business as to further his interests in accordance with the plan in compliance with the existent business status. Company’s Objectives and Articles of Association The Chief Executive Officer is authorized to approve the as well as the rules, resolutions, policies, plans, and normal business transaction of not exceeding Baht 30 budgets authorized by the Board of Directors under all million value for the interests of the business management relevant laws, and the scope of authority determined and operations of the Company so as to ensure that the by the Board of Directors. objectives of the policies and business plan determined by the Board of Directors shall be accomplished. 2. The President has the authority to approve the transactions in which the Company is borrowing, Whereby, the approval for such business transaction does lending, guaranteeing, purchasing, providing or hiring not include the transaction in which Chief Executive services, or performing other normal activities of the Officer or any person, who may have conflict of interest as Company involving sums of not more than Baht 10 per definition set forth in the Notifications of the Securities million. To this purpose, the President may assign or and Exchange Commission and/or the Stock Exchange delegate his authority to any individual as his attorney of Thailand, has an interest in any other way with the or substitute to act or perform any specific transactions Company or its subsidiaries. in accordance with the designated authority.

Authority and Duties of President The President manages, administers, and implements the normal functions of the Company in such a way as to further the interests of the Company. The President’s scope of authority and duties are determined by the Board of Directors, as follows:

The above-mentioned authority does not include the transaction in which the President or any persons who may have conflict of interest, as per definition set forth in the Notifications of the Securities and Exchange Commission and/or the Stock Exchange of Thailand, have an interest or conflict of interest in any other way with the Company or its subsidiaries.


041 1.3 Definition of Independent Director Independent director is a non-executive director who does not involve in the day-to-day management. Nor is he a major shareholder of the Company. Each Independent Director must possess the following qualifications : 1. Holding no more than 1% of all the shares having the right to vote in the company, holding company, subsidiary, associated company, a major shareholder or any person having controlling authority1) in the company, including the shares held by the persons who are related to him

The above mentioned business relationship includes normal business transaction, rental or lease of immovable property, the transaction relating to assets or services as well as the offer or the receipt of financial aids by way of borrowing or loan, guarantee, collateral loan and other transactions of similar manner which may cause debt burden between the company and the party to agreement from the amount of 3 per cent of net tangible assets of the company or Baht 20,000,000 up, whichever is lower. Mutatis mutandis, in calculating such debt, the method of calculating the value of related transactions stated in the announcement of Capital Market Supervisory Board regulations on the execution of related transaction should be applied. Any debt burden occurring during the period of one year prior to the date of the business relationship with the same person must be included when considering such debt burden.

2. Not assuming, both at present and in the past of at least 2 years prior to the appointment date, the position of executive director, employee, staff or advisor receiving regular salary or having controlling authority in the company, holding company, subsidiary, associated company, subsidiary of the same level or a major shareholder or any person having controlling authority in the company; this condition does not include an 5. Not being, both at present and in the past of at least 2 Independent Director who used to be a 2)government years prior to the appointment date, an auditor of the officer or advisor to any official sector who is a company, holding company, subsidiary, associated major shareholder or a person having the controlling company, a major shareholder or a person having controlling authority in the company as well as not authority in the company being a significant shareholder and a person having 3. Not having the relationship by blood line or legal controlling authority, or a partner of the audit firm in registration as parents, spouses, brothers, sisters, children, which the auditors of the company, holding company, including as spouses of children, executives, major subsidiary, associated company, a major shareholder shareholders, authorized persons or persons nominated or a person having controlling authority are working for as executives or authorized persons of the company 6. Not being, both at present and in the past of at least 2 or the subsidiary years prior to the appointment date, a provider of any 4. Not having, both at present and in the past of at least occupational services inclusive of legal and financial 2 years prior to the appointment date, any business advising service offering, obtaining the service charge relationship with the company, holding company, of over Baht 2,000,000 per annum from the company, subsidiary, associated company, a major shareholder holding company, subsidiary, associated company, or any person having controlling authority in the a major shareholder or a person having controlling company in the manner that may hinder his own authority in the company in addition to not being freedom of judgment in addition to not being both a significant shareholder, a person with controlling in the past and at present, a significant shareholder, authority or a partner of any occupational service or a person with controlling authority of any person provider. having business relationship with the company, holding company, subsidiary, associated company, a major 7. Not being a director appointed to be the representative shareholder or any person having controlling authority of the company’s directors, major shareholders or shareholders who are related to the major shareholders in the company


042 8. Not operating any business that is of the same nature as or that significantly competes with the business of the company or subsidiary as well as not being a significant partner in a limited company, an executive director, employee, staff, advisor receiving regular salary or a person holding over 1% of the total number of shares with voting rights of other companies which operate the same type of business and which significantly competes with the company’s and the subsidiary’s business operation

the criteria of the Company and who possess knowledge, basics and expertise from various professions, in addition to having leadership, morals, ethics and an ability to freely express his/her opinions. Then. the best of such experts is selected and nominated to the board of Dircetors which shall consider this matter with the Remuneration and Nomination Committee for further selecting that person for position of independent director, director, or member of a committee of the Company.

(2) Recruitment of Directors and 9. Possessing no other traits which impede the ability Executives to independently give opinions on the Company’s operation The selection of a person to the position of the Company’s director must initially pass the consideration of the Remarks : 1) A person having controlling authority Remuneration and Nomination Committee. Then, the refers to a shareholder or any person Company’s Board of Directors shall Consider this matter who by action is significantly influential prior to proposing it to the shareholders’ meeting for to management policy set-up or business approval. The constitution of the Board of Directors. operation of the company whether or including the appointment. removal or vacation from the not such influence is derived due to office of the directors have been set forth in the Articles his / her status as a shareholder or as a Association of the Company as summarized below:representative by contract or by other transactions; such a person having 1. The Company shall have a Board of Directors comprising controlling authority is, in particular, a at least 5 individuals and not less than half of the total person who falls into one of the following number of directors must have their residence in the criteria : (A) Holding over 25% of shares, Kingdom of Thailand. (B) Having the mandate to control the appointment / removal of directors, 2. The shareholders shall appoint the directors, at the (C) Having the mandate to control a shareholders’ meeting, in accordance with the following person in charge of policy set-up (D) rules and procedures : Having power / responsibility for business 1). Each shareholder shall have one vote per share. operation as an executive 2). Each shareholder may cast his vote(s) as per calculated in 1) for one or any number of the 2) Official sector refers to a central candidates, one by one. However, the vote(s) shall not be distributed or divided among the official unit, according to the Law on candidates. Administration of State Affairs 3). The candidates receiving the highest number of votes in the respective order of the votes shall be Procedure of Selecting an independent elected at such time. In the event that a number Director of candidates receiving an equal number of votes The selection of an independent director, whose for the last directorship exceeds the number of qualifications have been set up by the company as stated directors the Company required or to be elected above, like the selection of a Company’s director and a at such time, the Chairman of the meeting shall member of any other committee, begins with the Board have a second or casting vote. of Directors assigning the Remuneration and Nomination Committee to consider experts whose qualifications meet


043 3. A director who wishes to resign from office shall submit (3) Remuneration for Management his resignation letter to the Company. The resignation shall be effective from the date the resignation letter Cash Remuneration reaches the Company. 1) Remuneration for Board of Directors of the 4. If a directorship becomes vacant for any reason other than by rotation, the Board of Directors shall elect a person, who is qualified and has no prohibited characteristics according to Section 68 of the Public Limited Company Act B.E.2535, as director to fill the vacancy at the subsequent Board of Directors’ meeting, unless the remaining term of the director is less than 2 months. The director who fills the vacancy shall retain his office only for the remaining term of the office of the director whom he replaces. The resolution of the Board of Directors under the first paragraph shall consist of not less than threeforth of the votes of the remaining derectors. 5. At every annual general meeting, one-third of the directors who has the longest term in office shall retire. If the number of directors is not a multiple of three, then the number nearest to one-third shall retire from office. The retired director shall be eligible for re-election. 6. The shareholders’ meeting may adopt a resolution to remove any director from office prior to the end of his term by a vote of not less than three-fourth of the number of the shareholders who attend the meeting and have the right to vote and by an aggregate of not less than half of the number of shares which are held by the shareholders who attend the meeting and have the right to vote. In selection of the independent director, the Company has set the qualifications as mentioned in clause 1.2. The Company will nominate or approach the qualified experts from various professions who not only possess leadership, moral and ethics but also are able to express their opinions freely for being selected as the independent director.

Company and Major Subsidiaries 1.1) Jasmine International Public Company Limited - Honorary Chairman received the remuneration of 160,000 Baht per month - Each Independent Director received the remuneration of 40,000 Baht per month. - Chairman of Audit Committee received the remuneration of 10,000 Baht per month. - Audit Committee received the remuneration of 20,000 Baht per month. - Chairman of Remuneration and Nomination Committee received the remuneration of 10,000 Baht per month - Each member of Remuneration and Nomination Committee received the remuneration of 5,000 Baht per month - Executive Directors received the remuneration of 20,000 Baht per month - Six Board of Directors, each received the incentive fee of 150,000 Baht - Three Board of Directors, each received the incentive fee of 200,000 Baht 1.2) Jasmine Submarine Telecommunications Co., Ltd. - Executive Directors did not receive the remuneration. 1.3) Acumen Co., Ltd. - Executive Directors did not receive the remuneration.


044 2) The Remuneration for the Executive Directors and Management of the Company and its Major Subsidiaries The Company and Sunsidiary 1. Jasmine International PCL. 2. Jasmine Submarine Telecommunications Co., Ltd. 3. Acumen Co., Ltd. Total

Persons 7 7 6 20

Year 2009 (Baht) 11,551,965.00 14,424,950.00 11,228,658.00 37,205,573.00

Remuneration Details Salary, bonus and extra money Salary and bonus Salary and bonus

The details of remuneration paid in cash to the Company’s In addition, as at April 10, 2008, the un-subscribed ESOP Plan Administrator and Audit Committee during the year of 35,051,510 units expired as detailed below:- Class 1 ESOP, Issue No. 3: 18,965,130 units 2009 is as follows: Class 2 ESOP, Issue No. 5: 9,159,720 units - The total remuneration of the 3 Audit Committee 6,926,660 units members in 2009 was Baht 840,000 This is shown in the - Class 2 ESOP, Issue No. 6: subsection (3) clause 1.1. In addition, as at April 10, 2009, the un-subscribed ESOP of 16,086,380 units expired as detailed below:Other Forms of Remuneration 9,159,720 units 1) The Company had issued Rights Warrants for the - Class 2 ESOP, Issue No. 7: 6,926,660 units subscription of common shares of the Company and - Class 2 ESOP, Issue No. 8: offered to the Directors and employees of the Company and subsidiaries (ESOP). The total amount of 18,375,706 As at December 31, 2009, the remaining of the un-subscribed warrant of ESOP are 16,242,060 units. units, classified as the following:(Please see details of warrants allocation for directors and/ Class 1 Warrants (ESOP) total 11,749,574 Units or employees in the Prospectus of warrant subscription for Exercise Price* 10 Baht directors and/or employees, issues 1 and 2. The number of ratio of allocated warrants for the executives of the Final Exercise Date 15 March 2008 Class 2 Warrants (ESOP) total 5,426,132 Units Company compared to the total number of the right Exercise Price* 15.00 - 29.28 Baht warrants can be found in the 56-1 Forms of the years 2001 and 2002.) Final Exercise Date 15 March 2010 Class 3 Warrants (ESOP) total 1,200,000 Units Exercise Price* 15.00 Baht 2) The Company established a provident fund to serve as a welfare and security for its employees upon Final Exercise Date 15 March 2007 employment termination, physical deformity, retirement, Remarks: * The ESOP exercise prices were adjusted as per death or resignation from the fund. The fund, namely details in the Remarks of 7.1 clause 3),Warrants in the Registered Provident Fund of Jasmine Group, consists of the employees contribution amounting to 3% of their 56-1 Form. basic salary (or higher as designated by each employee, As at April 10, 2007, the un-subscribed ESOP of 29,396,238 but not exceeding the Company contribution rate) and the Company contribution based on each employee’s units expired as detailed below:- Class 1 ESOP, Issue No. 2: 12,985,008 units year of service. - Class 2 ESOP, Issue No. 3: 4,994,620 units - Class 2 ESOP, Issue No. 4: 6,926,660 units - Class 3 ESOP, Issue No. 2: 4,489,950 units


045 3.) The Company applied for 2 types of Rajapruek Club membership for the directors, namely the Sports Ordinary Membership (15 years) and the Corporate Ordinary Term Membership (for golf course of 5-year period).

vote on his/her behalf. To this regard, the shareholder as the Proxy Grantor must inform the Company in writing by filling in one of the proxy forms attached with the meeting invitation letter or downloaded from the Company’s website.

(4) Corporate Governance Policy During the meeting, the Company provides equal opportunities for the shareholders to make enquiries or to express their views. Therein, all the Company’s directors and relevant management are present to be acknowledged of the shareholders’ opinions as well as to answer the questions raised. Every question-and-answer issue and all the significant opinions are recorded in the 1. The Rights of Shareholders The Company is well aware that all the fundamental rights minutes of meeting to facilitate the shareholders’ scrutiny. of the shareholders both as investors and company owners must be significantly recognized. Such rights include the Such minutes, written after the meeting date, presents the right to purchase or transfer the securities they hold, the complete and accurate information which is examinable. right to receive the Company’s sharing profits, the right to adequately access the Company’s information, the 2. The Equitable Treatment of right to attend the shareholders’ meeting wherein they Shareholders can express their opinions and vote on resolutions on the The Company has a policy to treat all the shareholders Company’s significant matters ;for instance, the dividend equally be they major shareholders, minor shareholders, payment, the appointment or dismissal of a director, the institutional investors or foreign investors. Independent appointment of the external auditors, the approval of any directors are assigned by the Company to be responsible crucial transaction which might affect the directions of for looking after the minor shareholders. the Company’s operation, the amendment on Memo of Association or Articles of Association and so on. The shareholders’ meeting is properly conducted according to the scheduled agenda in respect of the Moreover, to support and facilitate the shareholders in Company’s Articles of Association. Related information is exercising their rights, the Company manages to arrange clearly presented. No un-informed agenda is introduced the Shareholders’ Annual General Meeting within the to the meeting neither is an important agenda which the first 4 months of the Company’s fiscal year. As for the so shareholders need some time to make a prudent study called “Extraordinary Shareholders’ Meeting”, each will before making a decision. In case that a shareholder is be called for only when it is deemed appropriate. unable to attend the meeting in person, the Company allows him/her to assign an independent director or Invitation letters together with the meeting agenda and any person to attend and vote on his/her behalf. To related documents with adequate fact(s), reason(s) and this regard, the shareholder as the Proxy Grantor must opinion(s) of the Board of Directors will be distributed inform the Company in writing by filling in one of the for the shareholders to consider 7 or 14 days prior to the proxy forms attached with the meeting invitation letter or meeting date, depending on the subjects. The Company downloaded from the Company’s website. also advertises the Meeting notice in the press 3 days consecutively before the date of meeting. Voting process is transparent with regard to the order of agenda items. During the meeting, the shareholders Provided that a shareholder is unable to attend the are entitled to cast the vote to express their agreement meeting in person, the Company allows him/her to assign or disagreement or even to abstain from voting on such an independent director or any person to attend and issues as related transactions, the acquisition or the The Company’s Board of Directors is entitled to set up Corporate Governance Policy which encompasses 5 major principles to be in line with the guideline of the Stock Exchange of Thailand, the details of which are as follows :


046 disposal of the Company’s assets and so on. The agenda to this, the Company follows the directions below to on director election provides the shareholders with the appropriately treat each stakeholder group. chance to elect the directors as individual persons to replace the ones who retire by rotation. Shareholders : With the aim to bring about the highest satisfaction to its shareholders, the Company The Company has set up a measure to prevent the tries its best to be the their ever improper “Insider Trading” by relevant persons who are efficient and trustworthy business directors, executives, and staff working in the department representatives, taking into related to the inside information (including their spouses account the long term growth and minors). According to the measure, such relevant of its value and the emphasis on persons are not allowed to trade the Company’s securities transparent and honest information a month before the disclosure of the quarterly and annual disclosure. financial statements. The Company has informed its directors and executives not only of their duty to report Employees : The Company regards employees their holding of the Company’s securities but also the as its precious resources. So, it penalty according to the Securities and Exchange Act focuses on supporting human of B.E.2535 and the regulations of the Stock Exchange of resources development which Thailand. In case that the directors or executives trade the consequently leads to its maximum Company’s securities which they hold, they are obliged benefit. Besides, it encourages to report changes in the possession of their own securities, the employees to play a part in spouses and minors to the Office of Securities Exchange creating a good organization Commission to comply with Section 59 of the Securities culture, strong teamwork and safe and Exchange Act of B.E.2535 within 3 weekdays so that and pleasant working atmosphere. it is further disclosed to the public. Competitors : The Company commercially contends with other trade Pertaining to this matter, the Company has set up the competitors on the fair and disciplinary penalty to apply to any relevant person ethical competition basis. who discloses or makes use of the Company’s inside Customers : The Company is committed to information for seeking his / her own personal interests. providing quality services for The degree of penalty varies, according to the case, from the highest satisfaction and verbal warning , written warning to probation or dismissal. confidence of the customers. Trade Counterparts : The Company has the policy to and creditors treat both the counterparts and 3. The Role of Stakeholders the creditors fairly in compliance The Company equally respects the rights of all the with trading conditions and / or stakeholders whether they are the inside stakeholders terms in the mutual contracts such as the Company’s employees and management to enhance good business or outside-party stakeholders such as creditors and relationship, beneficial to all customers, etc. It also realizes that the support and parties. suggestions from every group of its stakeholders are valuable and beneficial to both the operation and Community and Public: On the regular basis, the Company business development. Therefore, it will perform the duty joins and sponsors socially to comply with the law and other related regulations constructive projects and activities to ensure that all the rights of the stakeholders are well as exemplified by financial and protected. Moreover, for the Company’s stability, the material donations to several cooperation between the Company and all the groups foundations and organizations. of stakeholders are strongly supported. With respect Environment : The Company recognizes the


047 importance of environment and 5. Responsibilities of the Board of simultaneously is concerned Directors about the impact of pollutions on communities. The Company’s 1. Structure of the Board of Directors nature of business does not The Board of Directors of the Company is made up of individuals recognized for their knowledge and jeopardize the environment. capabilities. It plays the vital role in setting up the corporate The Company will conduct its business to be in line policy and image besides independently overseeing, with the law and other related regulations to assure the auditing, and assessing the Company’s performance to be in accordance with the Business Plan. shareholders of the best protection of their rights.

4. Disclosure and Transparency The Company’s Board of Directors takes as its obligation the disclosure of the Company’s financial and other Company-related information to be complete, accurate, and transparent in compliant with the regulations of the Office of Securities Exchange Commission and the Stock Exchange of Thailand. Additionally, it discloses other significant information which may affect the price of the Company’s securities which in turn impacts on the decision of the Company’s investors and stakeholders. Such information is accessible to the Company’s shareholders, investors and the public via the channels and media of the Stock Exchange of Thailand as well as the Company’s website. For Investor Relations, the Finance and Group Accounting Department is assigned to represent the Company in communicating with institutional investors, shareholders, analysts and relevant state organizations; whereas, the Administration Department is accountable for corporate reports. The Company’s Board of Directors is responsible for the consolidated financial statements of the Company and its subsidiaries as well as any financial-related information presented in the Company’s Annual Report. Such financial statements are prudently prepared pursuant to the accounting principles generally accepted country-wide based on the appropriate accounting policy to which the Company regularly conforms. The Audit Committee is obliged to verify the quality of the Company’s financial reports and internal control system, including the adequacy of the disclosure of important information in notes to the financial statements prior to submitting all to the Board of Directors’ and the Shareholders’ meetings respectively.

The Board of Directors totally comprises 10 directors, 4 of whom are independent directors. The appointment of the independent directors in such adequate and proper proportion enables the balance of power in the Board of Directors. The Company’s administration is finally examined by the Audit Committee which consists of 3 accredited independent members. According to the Company’s Articles of Association, at every Shareholders’ Annual General Meeting, one-third of the directors who have the longest terms in office shall retire. Nevertheless, provided that the number of the directors is not a multiple of three, then the number nearest to one-third shall retire from office. The retirement of the directors in the first and the second year after the listing of the Company on the Stock Exchange of Thailand is based on the method of lot-drawing. As for in the later years, the directors who serve the longest terms shall retire. The Company’s Articles of Association also prescribes that the retired directors are eligible for the re-election. Furthermore, whether a director or a committee member can continuously remain in office without break for the longest period will be determined by the Company by taking into account his / her individual qualifications and appropriateness. The Board of Directors has approved to embrace the disclosure of the number of other companies in which each director has his / her position as a significant criterion for the Board of Directors election. The Company; thus, discloses the information of all the directors who also are directors of other companies in details. At present, 6 directors of the Company’s Board are holding the positions of director in other listed companies. However,


048 since those directors have sufficiently devoted their time carrying out the Company’s tasks with all their efforts, the holding of their positions in other companies does not affect their performance at all ; moreover, they regularly join the Board of Directors’ meetings of the Company and always provide practical opinions for the Company therein.

2. Committee For efficient corporate governance, the Company established 3 sets of committee, namely Audit Committee, Risk Management Committee and Remuneration and Nomination Committee and also set up distinct scopes of authority, duty and responsibility for each of them.

3. Role, Duty, and Responsibility of the Board of Directors The Company’s Board of Directors is made up of individuals who are knowledgeable, proficient, expert and well equipped with beneficial experiences in various fields apart from distinguished leadership. They collectively set visions, missions, strategies and business directions in addition to providing efficacious oversight of the Company’s operation to fully comply with all the relevant laws and to correspond to the objectives and regulations of the Company as well as the resolutions of the shareholders’ meeting. They also set up other committees to monitor and supervise the Company’s operation.

Corporate Governance Policy The Company is entitled to set up the policy of good corporate governance in writing. Such policy, approved by the Board of Director’s meeting, is regularly reviewed at least once a year in terms of content and practice. Business Ethics The Company has set up and put in writing the Code of Business Ethics as an essential guideline for the Board of Director’s the management and employees of all levels to adhere so as to conduct the Company’s business and serve all the groups of stakeholders, society and the public fairly and honestly. Besides, it has announced such Code of Business Ethics and acknowledged them to its employees for strict compliance. For effectiveness, a system of follow up the practice of the Business Code of Ethics is set up and regularly applied.

Conflict of Interest The Company’s Board of Directors has set up the policy on conflicts of interest based on the principle that any decision on business conduct must be made with respect to the highest interests of the Company only. Any action which might lead to conflicts of interest must be avoided. It is specified that any person relevant or related to the subject to be considered is obliged to acknowledge the Company of his / her relationship or relevance to the matter. He / She is not permitted to join the party which judges the case and does not have the power to authorize that particular case and others. No conditions or regulations are specially set for such case. It is also stipulated that the Office of Internal Audit and the Audit Committee are responsible for taking care of and solving the conflicts of interest. However, to date, the Company has not experienced the problem related to the conflict of interest. The Audit Committee will report the carefully considered related party transaction and the matter containing a conflict of interest to the Board of Directors in compliance with the regulations of the Stock Exchange of Thailand. Such information is disclosed in the Company’s Annual Report and the Updated Registration Statement (56-1 Form). Whenever changes in the securities holding of the Board of Directors and the management of the Company, including their spouses and minors occur, they must be informed to the Company and reported to the Office of Securities Exchange Commission, respectively according to Section 59 of the Securities and Exchange Act of B.E.2535 within 3 weekdays after the date of purchase, sale or transfer. Besides, to prevent the improper usage of the Company’s inside information, the directors, executives and departments having an access to the Company’s inside information are forbidden from disclosing such information to the outside parties and anyone who does not involve in the Company’s securities trading a month prior to the disclosure of the Company’s financial statements.


049 Internal Control System Realizing the importance of the efficient internal control system of both the management and the operation levels, the Company has specified the scopes of the duty and the authority for its executives and employees clearly in writing. It also conducts the control of assets usage. In addition, the duties of the staff and those of the monitoring and assessment officers are segregated from each other. The Audit Committee has been set up by the Company to oversee and monitor such control system to be appropriate and efficient. Risks Management The Company evaluates the adequacy of its internal control system on a yearly basis in order to find the way to properly improve the task operation to be increasingly effective. Report of the Board of Directors The Company Audit Committee is accountable for the review of the financial report. Quarterly, such report will be presented to the Board of Directors by the Group Accounting Department. The joint meeting between the relevant staff and the management of the Group Accounting Department and the Company’s auditors is scheduled at least once a year. The Board of Directors is responsible for the consolidated financial statements of the Company and its subsidiaries as well as the financial information (the report on the Board of Directors’ responsibilities for financial matters) presented in the Annual Report. Such financial statements are prepared in accordance with the accounting principles certified and verified with prudence by the Company’s auditors. The disclosure of significant financial-related or non-financial related information is completely and regularly done on the factual basis.

4. Board of Directors’ Meeting The Company’s Board of Directors’ meeting is scheduled to be convened once every 3 months. However, a special meeting can be called if it is deemed necessary. The agenda items for each meeting are clear and specific. Documents concerned are sent to the directors prior to the meeting date in order to provide them with sufficient time of study, except for the emergency case. The meeting is recorded in writing. The minutes as well

as other certified documents are kept for references and all must be examinable in the following meeting. The Chairman and the President of the Company jointly consider the issues to be included in the meeting agenda. To this regard, each director can also suggest issues for the Chairman and the President to consider for agenda preparation. During the meeting, the Company’s Chairman or the person who is elected to act as Chairman, as the Chairman of the Board of Directors’ meeting, will provide opportunities for the directors to independently express their opinions. Sometimes, the Company’s senior executives are invited to join the meeting for the provision of additional useful information for some particular agendas. On this occasion also that they can be directly acknowledged of the policy and put it into practice accordingly and efficiently. Decisions are based on a majority vote of the Board members attending the meeting ; one director is eligible for one vote. However, a director who has some interests in the matter under consideration shall not join the meeting and / or abstain from voting for it. In case of tie, the Chairman has the casting vote. The Board of Directors’ minutes of meeting, taken by the Secretary to the Board of Directors who takes part in every meeting, is presented to the chairman of the meeting to consider and sign for certification prior to being proposed as the first agenda item in the following meeting for the Board of Directors’ approval. After the approval, the Secretary will store all the information and documents related to the meetings to facilitate data references and searches.

5. Board of Directors’ Self Assessment The Company’s Board of Directors has the policy to evaluate the results of their own performances, taking the results of the Company’s business operation, the degree of compliance to the established policies, and the overall economic and social situations as significant criteria. The self assessment outcome will be useful for self improvement in working of each individual director.


050 Report on Compliance to Corporate Governance Policy In 2009, the Company completely conformed to the Good Corporate Governance Policy stipulated by the Board of Directors. However, there are still some significant additional matters to be reported as detailed below :

At the EGM, 30 shareholders assigned Dr.Vichit Yamboonruang and Dr. Yodhin Anavil – the Company’s independent directors – to vote on their behalves. In the like manner, 13 shareholders assigned Mr. Pete Bodharamik and Mr. Terasak Jerauswapong – the Company’s directors – to vote on their behalves.

1) and 2) Regarding the Rights of Shareholder and the 6. In the shareholder’s meeting, all the shareholders were equitably allowed to express their opinions and raise Equitable Treatment of Shareholders questions to any of the management attending the 1. The Company completely and accurately reported its meeting. Voting portion for any agenda resolution was operation results to the shareholders and also arranged compliant to the following regulations : the shareholders’ meeting to report and request for the approval of issues which are significant or require 1. In a normal case, the resolution is subject to the majority vote of the eligible shareholders who resolutions from the meeting according to the law. attend the meeting. One share is entitled to one vote. However, the chairman of the meeting has 2. On April 27, 2009, the Company organized the Annual the casting vote in case of tie. General Meeting of Shareholders (AGM) which was attended by 9 of the total 10 directors. Later, on 2. In the following cases, at least three-forth of the total votes of the eligible shareholders attending June 17, 2009, the Extraordinary General Meeting of the meeting are required subject to one share for Shareholders (EGM) was held, attended by 9 of the one vote : total 10 directors. 2.1 The total or partial sales or transfer of the Company’s significant business operation to 3. The Company posted the invitation letter to the AGM any third party. on its website (www.jasmine.com) 30 days prior to the 2.2 The purchase or undertaking of any companies meeting date. It also posted the Minutes of AGM and or private sectors, and the Minutes of the EGM on the same website 9 and 14 2.3 The execution, amendment, or cancellation days after the dates of the aforementioned meetings, of the partial or total lease of the Company’s respectively. business to any third party, or business merger with any third party aiming for mutual profit 4. The Company had not yet allowed the shareholders and loss sharing. to submit their opinions, recommendations, inquiries, additional agenda items or names of candidates for the position of director to the Company since it is, for 7. In 2009, the Company complied with the policy on the the time being, considering the appropriate guidelines protection of the inside information usage. Details of and the setting up of the policy related to the matters. such policy is shown in the section of Management, subsection 5 (5) : Control of Inside Information Usage 5. At the AGM, 25 shareholders assigned Dr.Vichit and subsection 5 (6) : Internal Auditing, part 3 : Control Yamboonruang and Dr. Yodhin Anavil – the of Management Operation. In 2008, the Company’s Company’s independent directors – to vote on their executives and other related persons strictly conformed behalves. In the like manner, 14 shareholders assigned to such policy. None ignored or violated it. Mr. Pete Bodharamik, Mr. Somboon Patcharasopak, and Mr. Terasak Jerauswapong – the Company’s 3). Regarding the Role of Stakeholders Provided that there is a case in which a stakeholder’s directors – to vote on their behalves. right is violated by the Company, the Company shall do everything in compliance with the law. Besides, a


051 shareholder can submit a complaint or inform the The contact person is Company of a trace of such matter at www.jasmine.com, Mrs. Uraiporn Charoenchit, “Contact Us” menu. However, in the previous year, no telephone : 0-2100-3118, case of violation of the shareholders’ right occurred email address : curaiporn@jasmine.com. nor did the conflict between the Company and the stakeholders. 5). Regarding Responsibilities of the Board of Directors 4). Regarding the Disclosure and Transparency 1. Of the total 10 directors who constitute the Company’s The Company’s disclosure of the financial and the non- structure of the Board of Directors, 4 of whom are financial information was complete, correct, transparent independent directors whose qualifications meet both and timely in conformity with the regulations stipulated the Company’s definition and the standard of the by the Securities and Exchange Commission and the Securities and Exchange Commission; 2 of these 4 Stock Exchange of Thailand. Therefore, the Company independent directors belong to the Remuneration was not penalized by both the Securities and Exchange and Nomination Committee. Commission and the Stock Exchange of Thailand for the incapability to complete their regulations. The information The 4 independent directors are of not less than onedisclosure to the Stock Exchange of Thailand was posted third of the total number of the directors in the Board. on the Company’s website (www.jasmine.com) of the Three of the independent directors who are qualified “Investor Relation/news to SET” menu. according to the requirements of the Stock Exchange of Thailand are also positioned in the Company’s Audit The remuneration for management is herein disclosed in Committee, having independent power in the audit the section of Management, subsection 8.3 : Remuneration administration. for Management. Initially, such remuneration has passed the prudent consideration of the Remuneration and The Company has clearly delineated the roles and Nomination Committee before it was considered and responsibilities of the Board of Directors and the approved by the Board of Directors’ meeting. Both the management. There is a practical organization structure Remuneration and Nomination Committee and the Board in which the management power is delegated to the of Directors took into account remuneration information of employees of all levels, enabling them to participate other companies of the same line of industry as references in the Company’s operations and adroitly perform as well as the Company’s own business expansion and their duties. The scope of authorities and budgetary growth of profits. It has finally been approved by the approval for each management level are clearly shareholders’ meeting. As for salary, bonus and other explicated in writing. rewards for the management and the employees, each is considered mainly based on the Company’s operating The Company has clearly segregated authorities and results. roles between the Chairman and the President so as to prevent the unlimited authority. The Chairman The task of Investor Relations has been trusted to the of the Company is a director who is elected and Accounting and Finance Department. appointed by the Board of Directors; whereas, the President is recruited, selected and appointed by the The contact person is Executive Committee (as per details in the section of Mrs. Churnkamol Treesuttacheep, Management, subsection 5.2 : Management Structure). telephone : 0-2100-3085 , email address : churnkamolt@jasmine.com. 2. The Company discloses its Corporate Governance Policy via the website (www.jasmine.com) at the Meanwhile, the disclosure of significant data of the Investor Relations/Corporate Governance Policy menu Company is assigned to the Administration Department. for the acknowledgement of the directors, employees and investors in general.


052 3. The Company has set up and put in writing the business operation policy and procedures, which are prudent and malfeasance-preventive in terms of payment requisition, procurement, personnel management and general administration. In addition, the Company has established the Code of Business Ethics as a vital guideline in business operation for the Board of Directors, the management and the employees of all levels as detailed below : 1.) To adhere to fine virtues and morals. 2.) To be self-disciplined, to be well aware of their own duties, to respect the rights of their own and others’, and to realize that discipline upkeep is a kind of behavior improvement not punishment 3.) To perform any legal duties assigned with fidelity and ethical judgement ; and to keep the Company’s image unblemished 4.) Not to directly or indirectly have a deliberate intention to harm, destroy or erode other persons’ reputation, progress or business 5.) To implement the leadership skill in business operation by utilizing the employees’ proficiency as a tool to achieve the organization’s success, not for personal interests. 6.) Should there be a personal interest, the fact of such interest is to be immediately reported to the Company, and the employees ought not to get involved in other business activities that may lead to a conflict of interest or deteriorate their work efficiency. 7.) To create the work atmosphere that encourages opinion exchanges, creativity, innovative ideas,

suggestions as well as sensible, righteous and impartial decision making 8.) Not to disclose confidential information obtained by authority for own benefits, or to implement the same in the manner that may damage the Company’s reputation 9.) To always realize that, in business operation, one does not commit only to his own duties or the business owner, but also to the purchasers, suppliers, shareholders, customers and employees; therefore, mutual benefits of these groups become the major guideline of the business operation as a whole 10.) To be responsible for the performances of oneself and subordinates 11.) To seek, improve and increase the personal capability and perform duties with knowledge, proficiency, and appropriate standard as being set for the position with attentiveness and responsibility for one’s and the Company’s progress. 12.) To plan, set up and analyze work objectives to achieve the Company’s goal while heeding the moral and professional ethics as well as the culture of relevant parties in the organization. 13.) To maintain and be attentive to the health, security, bio-hygiene and environment of the whole organization, and to keep the work place in a tidy, exquisite and healthful condition 14.) To maximize the effective and efficient deployment of the Company’s resources

4. In 2009, 7 Board of Directors’ meetings were held and the detail of each Director’s attention to all the meetings is as follows : 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

General Teinchai Dr. Vichit Dr. Varapol Dr. Yodhin Mr. Pete Mr. Somboon Mr. Subhoj Mr. Terasak Ms. Saijai Mr. Pleumjai

Director’s Name Sirisumpan Yamboonruang Socatiyanurak Anavil Bodharamik Patcharasopak Sunyabhisithkul Jerauswapong Kitsin Sinarkorn

Number of attention / Total number of the meetings -/7/7 7/7 7/7 7/7 6/7 7/7 7/7 7/7 7/7


053 5. The Company has set up Audit Committee to consider and verify details of the related work prior to the submission to the Board of Directors. The Audit Committee is scheduled for a meeting once a quarter. In the year 2008, there were 4 meetings in which all the Audit Committee members attended. (See details of duties and responsibilities of Audit Committee in the section of Management, subsection 5.2 (1) : Management Structure, item 1.2

5. To verify the business operation or business plan so as to ensure its compliance with the Company’s objectives and targets, and the success of the work plan at the Company’s supreme target 6. To suggest comments to the Audit Committee for proper improvement of the internal auditing system aiming for appropriateness and conciseness 7. To perform any other tasks assigned by the Audit Committee

With regard to the Risks Management, please see The Company has also set up the Risks Management more details in the section of Management, subsection Committee and Remuneration and Nomination 5.2 (6) : Internal Audit, part 2 : Risks Management. Committee whose authority and duties are explained in details in the section of Management, subsection 7. In 2009, the Board of Directors evaluated its own performance based on the self assessment of the 5.2(1) : Management Structure, item 1.2 directors’ form prepared by the Corporate Governance 6. The Company has established the Office the Internal Center of the Stock Exchange of Thailand and sent Audit in accordance with the regulations of the Stock to the Company for appropriate adaptation. It also Exchange of Thailand to ensure that the Company’s reviewed the business operation policy and improved and its subsidiaries’ operations comply with the the business plan on a regular basis to increase Company’s rules and regulations. It also encourages efficiency of the management and the internal control employees of all levels to perform their jobs efficiently system . and effectively with environmental and ethical consciousness. An internal auditors is responsible for (5) CONTROL OF INSIDE INFORMATION the analysis, assessment, suggestions, consultation and USAGE information provision, which serve as working tools, as The Company informed the directors and management to well as leverage the efficiency of the internal audit comply with all the rules and regulations of the Office of system with the cost-effective budget. Securities Exchange Commission and the Stock Exchange of Thailand, especially for the report on changes in the The proceeding of internal audit includes testing and Company’s shares or securities holding in order to monitor assessment of the efficiency of the internal audit system and prevent them from using the inside information on their as well as the quality of the internal work performance, own interest. The Company’s shares and securities held hence, the responsibilities of the internal auditors are by directors and management, as well as any changes as follows : occurred shall be examined and reported at each Board of Directors’ meeting. The Company, however, has not 1. To verify and report the reliability, completeness, stipulated any extra controlling procedures other than operations, judgment standard, and examination those specified by SEC and SET, for this purpose. 2. To ensure that the work system, which has significant impacts on the operations and reports, (6) INTERNAL AUDITING conforms to the Company’s policies, operation The Certified public accountant has conducted an audit plans, regulations, as well as related laws and verification of the Company and its subsidiaries’ 3. To verify appropriateness of the Company’s asset financial statement as at December 31, 2009 and found upkeep, exploitation, and existence inspection nothing indicated that the said statements were materially 4. To assess the exploitation of the Company’s incorrect in any way according to generally accepted resources, aiming for the most efficient, effective accounting principles. and worthwhile results


054 The Company has caused the Audit Committee, as its duty, to conduct examinations and verification to build-up and enforce a suitable and effective internal auditing system, in order to protect the Company and its subsidiaries’ assets from misuse by the employees, the management or by unauthorized person. The Audit Committee has not, to date, discovered any significant irregularities that have affected the operations of the Company. Furthermore, the Company’s Board of Directors has assessed and opined on the self assessment questionnaires form regarding the adequacy and appropriateness of the Company and its subsidiaries’ internal audit system in the 1/2010 Board of Directors’ Meeting held on 23 February 2010, as concluded below:-

PART 1 : THE ORGANIZATION AND ITS ENVIRONMENT The Company’s internal structure and external environment are in good condition, enabling the internal auditing system to be implemented as effectively as desired by the Company. The Board of Directors has instituted clear, well-considered, and reasonable objectives, structures, and personnel incentives. A Code of Conduct has been put in writing and made part of the Company’s policies and action plans. This code requires the management and employees conduct themselves so as not to become involved in conflicts of interest with the business of the Company. Rules and procedures are in place to govern the general conduct of the Company’s affairs, prevent malfeasance, and ensure fair treatment of those engaged in transactions with the Company.

PART 2 : RISK MANAGEMENT In 2009, The Company has appointed a Risk Management Committee comprises 5 members to impose the guideline and code of practice for risk management to each and every division by providing knowledge and direction regard the analysis, assessment, probability of impact occurrence, preventive measures including the monitoring both internal and external factors that could create any kind of risks to the Company i.e. foreign currency exchange rate, investment, legal impact and personnel. The Risk Management Committee is responsible for gathering and summarize all relevant information and propose to the Board of Directors quarterly However, for

an urgent case, which requires an immediate action, the Risk Management Committee promptly report to the Chief Executive Officer to further propose to the Board of Directors for consideration and determination of corrective measures for the responsible parties to adopt and practice to alleviate the impact of such risk factors

PART 3 : CONTROL OF MANAGEMENT OPERATIONS The Company has clearly specified the scope of authority, the procedures to be followed, and the amount of funds disposable by directors and those in authority for each level of management. These rules have been compiled as a set of standard which are disclosed to all relevant staff and filed with the Department of Accounting and Finance. The staff’s duties have been clearly delineated and separated so that each may counter check each other. The operations of subsidiaries and associates are likewise monitored and supervised according to the policies set by the Company, and controlled by means of meetings of the Executive Committee and other lesser committee meetings which must make progress reports at least once every three months. Moreover, the Company also takes care to ensure that any transaction made is in compliance with all relevant laws. The Company has not, to date, engaged in any action contrary to relevant law. The Company has set standards, procedures, and rules regarding transactions involving major shareholders, directors, management, and persons associated with them, including the redirection of corporate opportunities or advantages for personal interest. The Company has determined that all such matters should follow the rules, regulations and notification of the Stock Exchange of Thailand, which compel all transactions to be conducted on and equal footing with those conducted with outside parties, taking the interest of the Company to be paramount. Approvals of such transaction are to be made only by authorized persons who have no personal interest. These rules are to be deposited with every Company department and each subsidiary, and the Administration Department is deemed responsible for these types of transactions. The transactions approved by duly authority shall be monitored and supervised by the Administration Department so as to ensure that all proceedings are in accordance with the terms and conditions of the contract and such approval.


055 PART 4 : INFORMATION AND COMMUNICATION SYSTEMS When submitting a matter to the Board of Directors for consideration, the Company will ensure that the matter be disclosed to the Board of Directors not less than seven days prior to the meeting in a complete and easily comprehensible form. Minutes of every meeting shall also be completely recorded and easily comprehensible. If the Board of Directors agrees to a resolution unanimously, the Company has determined that details of the matter proposed, submitted for consultation, or inquired about will not be recorded. However, if directors have a significant difference of opinion or disagree with the matter under discussion, the Company will clearly record the disagreement, the reasons for such disagreement, and the results of a vote on the matter. The Board of Directors has not, however, had any significant difference of opinion to date. The Company keeps its books and records in accordance with generally accepted accounting principles and standards. Each department files its important documents in such a way that they can be easily accessed, referred to, and audited.

PART 5 : MONITORING SYSTEM The Company keeps monitoring its operations performance and compares it to the business plan and budget approved by the Board of Directors at least once every three months. If any discrepancy is discovered, the Company has appropriate procedures to correct it in a timely manner. However, to date, the Company has not discovered any significant discrepancy. The Company has caused the office of internal audit to conduct internal audit in the Company on a regular basis, and to make report on its findings to the Audit Committee. To date, no significant discrepancies have been found. Moreover, it is the policy of the Company to cause the management to immediately report to the Board of Directors of any malfeasance of illegal action that could affect the Company’s reputation.

5.3 DIVIDEND PAYMENT POLICY The Board of Directors has the policy to submit for Shareholder Meeting’s consideration the dividend payment to general shareholders in the ratio of not less than 50% of the net profit after tax deduction each year as shown in the Company’s financial statement. Regarding the dividend payment policy of the subsidiaries, Jasmine Telecom Systems PCL.(JTS) has a policy to pay the dividend in the ratio of not less than 40% of the net profit after corporate tax each year as shown in the JTS financial statement and such dividend payment must not significantly affect JTS general operation. However, provided that it is of necessity for JTS to use an amount of its net profit for further business expansion, JTS dividend may be paid in the ratio lower than stated above. As for TTTBB, it has a policy to pay the dividend in the ratio of not less than 40% of its annual net profit from the TTTBB’s financial statement after corporate tax and legal reserves. The payment will be after TTTBB’s compliance to the laws and terms and conditions in loan contracts and other related burdens of TTTBB each year. With regard to this matter, TTTBB’s Board of Directors has the power to consider and approve occasional exemption or change of such policy; however, such exemption or change must be solely for the optimum benefits of the company. For other subsidiaries, their dividend payment depends on annual liquidity of cash flow.


056 Related Party Transactins 6. Related Party Transactins The Company entered the Related Party Transactions defined in the Notification of the Office of the Security and Exchange Commission and the Stock Exchange of Thailand. The transactions in 2009 were compliant with the terms and conditions of the contracts made between the Company and its subsidiaries on a normal business practice (as referred to in Clause 7 of the Notes to Financial Statements for the Year 2009.) The Company has reasonably proceeded for its own maximum benefits. The Audit Committee has reviewed the prices or ratio of such transaction with the Company’s officers and internal auditors and considered that it was reasonable and that such transaction was accurately disclosed in the Company’s Financial Statements. The approval procedure of related party transactions was carried out with the same criteria as the general procurement procedure. The management and the shareholders of the Company have neither interest in such transaction nor approval authority on such matter. Details are illustrated below.

6.1. In 2009, the Company and its subsidiaries executed the following transactions of products, services, and others with related parties: Related Parties 1. TT&T PCL. (“TT&T”) and TT&T Subscriber Services Co., Ltd., with 100% of shares held by TT&T and Triple T Global Net Co., Ltd., with 100% of shares held by TT&T

Relationship

Types of Transactions

1. The major stake, i.e. 40.02% of - STCC is engaged in procurement contract for shares, in TT&T, is held by JAS. computer equipment, system 2. The Directors and Management design, and computer of TT&T who also share their equipment installation seats in JAS are and maintenance and the 1. Mr. Pete Bodharamik distribution of Cisco Network. 2. Mr. Somboon Patcgarasopak - JTS supplied the SDH and 3. Mr. Subhoj Sunyabhisithkul DDN telecom- equipment, 4. Mr. Pleumjai Sinarkornh and participated in and won the open bidding of TT&T’s project. - JasTel executed a contract for circuit service, locally and internationally. - TTTBB executed a contract for the lease of network equipment. - TTTI is engaged in leased circuits. - ACU supplied the High-Speed Signal under the Internet Protocol - Jasnet - SHW supplied leased circuits in the form of revenue sharing. - PA executed a contract for the lease of office space at Jasmine International Tower, billboard, and other facility services

Amount (Million Baht) As at December 31, 2009 109

90

109 920 697 13 3 2 19


057 Related Parties 2. Mono Group, comprising - Mono Film Co., Ltd. - Mono Generation Co., Ltd. - Mono Technology Co., Ltd. - Mono2U Co., Ltd.

Relationship

Types of Transactions

1. Mr. Pete Bodharamik is the - PA executed a contract for director and major shareholder the lease of office space at of Mono Group. Jasmine International Tower, 2. Mr. Pete Bodharamik is the billboard, and other major shareholder of JAS, facility services. holding 19.27% share. - TTTI executed a High-speed Internet Service contract wherein stated that the service charge was subject to the circuit speed. - TTTBB executed a contract for the lease of network equipment.

Amount (Million Baht) As at December 31, 2009 19

5

1

6.2. In the year 2009, the Company and its subsidiaries transacted the products and equipment procurement, including payment for leases and services from related parties as follows: Related Parties

Relationship

1. TT&T PCL. (“TT&T”) and TT&T Subscriber Services Co., Ltd., with 100% of shares held by TT&T and Triple T Global Net Co., Ltd., with 100% of shares held by TT&T

1. The major stake, i.e. 40.02% of shares, in 2. TT&T, is held by JAS. The Directors and Management of TT&T who also share their seats in JAS are: 1. Mr. Pete Bodharamik 2. Mr. Somboon Patcgarasopak 3. Mr. Subhoj Sunyabhisithkul 4. Mr. Pleumjai Sinarkorn

Types of Transactions -

JasTel utilized the Rack service JTS ACU supplied leased circuits SHW utilized the lease circuits service Jasnet utilized the Optical Fiber Cable Service. ARS utilized the testing, maintenance and repair services for network linkage. - TTTBB utilized network equipment, rented office space and public telephone and purchasing IP Phone - TTTI supplied Internet leased line service

Amount (Million Baht) As at December 31, 2009 3 17 11 5 38 3 708 110

6.3. In 2009, the Company and its subsidiaries executed the following transactions of other service expenses with related parties: Related Parties

Relationship

Types of Transactions

1. TT&T PCL. (“TT&T”) and TT&T Subscriber Services Co., Ltd., with 100% of shares held by TT&T and Triple T Global Net Co., Ltd., with 100% of shares held by TT&T

1. The major stake, i.e. 40.02% of shares, in TT&T, is held by JAS. 2. The Directors and Management of TT&T who also share their seats in JAS 1. Mr. Pete Bodharamik 2. Mr. Somboon Patcgarasopak 3. Mr. Subhoj Sunyabhisithkul 4. Mr. Pleumjai Sinarkorn

- TTTBB utilized services for general administration and management.

Amount (Million Baht) As at December 31, 2009 9


058 Management Explanation and Operational Results Analysis Operating Performance In 2009 the Company and its subsidiaries had total revenue of Bt 8,588 mn compared with Bt 5,574 mn in 2008, increased 54%. This was primarily due to a 56% increase in sales and service income. Operating profit in 2009 was Bt 776 million, declined 2% from last year. Including FX gain of Bt 54 mn, provision for impairment loss of assets and allowance for doubtful debt of Bt 626 mn, the consolidated net profit in 2009 showed Bt 204 mn compared with a net loss of Bt 1,245 mn in 2008. Details were as follows: Unit : Bt mn

Items Operating profit FX gain Loss sharing from associated companies Allowance for impairment loss of investment Allowance for impairment of other assets Allowance for doubtful debt Loss on sales of investment Net profit (loss) Net gain (loss) per share (Baht)

2009 776 54 3 (516) (95) (15) (3) 204 0.033

2008 795 10 4 (1,738) (92) (18) (207) (1,245) (0.186)

% change (2) 440 (25) 70 (3) 17 99 116 118

Performance breakdown by business unit Performance breakdown by business unit in 2009 and 2008 were as follow: Company Internet Broadband Business 1. Triple T Broadband Public Company Limited 2. Triple T Internet Company Limited Total Telecom Network Business 1. Jasmine Submarine Telecommunication Company Limited 2. Thai Long Distance Telecommunication Company Limited Total Internet Service Business 1. Acumen Company Limited 2. Jasmine Internet Company Limited 3. Jastel Network Company Limited Total Other Businesses 1. Jasmine Telecom Systems Public Company Limited 2. Siam Teltech Computer Company Limited 3. ACeS Regional Services Company Limited 4. Premium Asset Company Limited 5. Compunet Corporation Company Limited 6. Smart Highway Company Limited 7. T.J.P Engineering Company Limited 8. Jasmine International Public Company Limited 9. Others 1) Total Grand Total Note :

2009

Unit : Bt mn

Total Revenue 2008

% change

1,098 2,264 3,362

1,726 11 1,737

(36) 20,482 94

855 113 968

983 226 1,209

(13) (50) (20)

162 543 456 1,161

163 502 363 1,028

(1) 8 26 13

2,581 164 142 138 26 9 18 18 1 3,097 8,588

990 162 186 159 78 22 6 (5) 2 1,600 5,574

161 1 (24) (13) (67) (59) 200 460 (50) 94 54

1) Including Jasmine International Overseas Co., Ltd., Mobile Communication Services Co., Ltd., Jasmine Cyber Work Co., Ltd.

And AceS (Thailand) Co., Ltd.


059 Revenue In 2009, total revenues for the Company and its subsidiaries increased by 54% to Bt 8,588 mn, compared to Bt 5,574 mn in 2008. Details of total revenue is as follow: Unit : Bt mn Items 2008 % change 2009 Sales and service income 8,371 5,350 56 FX gain 54 10 440 Interest income 36 89 (59) Revenue from reversal of liabilities 68 78 (13) Other income 59 47 26 Total 8,588 5,574 54

Sales and service income Sales and service income for the Company and its subsidiaries for the year was Bt 8,371 mn, a 56% increased from Bt 5,350 mn in 2008. The increase in sales and service income was mainly come from system integrator business of JTS which is under other business and internet broadband services business, which showed 104% and 86% growth respectively. For internet service business still showed 16% growth, such business is also a key support to internet broadband business. Sales and service income breakdown by business is shown below: Unit : Bt mn Type of business 2009 2008 % change Internet Broadband Business 3,241 1,745 86 Telecom Network Business 961 1,131 (15) Internet Service Business 1,155 999 16 Other Business and Investment 3,014 1,475 104 Total 8,371 5,350 56 Sales and service income from internet broadband business in 2009 was Bt 3,241 mn, increased from Bt 1,745 mn in 2008, or 86% growth. This was due primarily to an increased number of broadband subscribers from continuing launch of marketing campaigns. Total number of subscribers as at the end of 2009 was 546,361, a 48% growth from 2008. Sales and service income from telecom network business was Bt 961 mn in 2009 declined by 15% from Bt 1,131 mn in 2008. Declining in such was not only come from lower in actual usage especially for the west coast but revenue sharing according to the concession agreement also declined (revenue sharing for east coast declined from 17% in 2008 to 16% in 2009 and for west coast declined from 16.5% in 2008 to 15.5% in 2009) Sales and service incomes from internet services was Bt 1,155 mn in 2009 compared with Bt 999 mn in 2008 or 16% growth. Growth was mainly came from JASTEL which showed 26% growth due to increased demand both domestic and international internet bandwidth and Acumen, wireless internet broadband provider showed 14% growth. For other businesses and investments, sales and service income was Bt 3,014 mn in 2009, increased 104% from last year. This was came from revenue under system integrator under JTS which showed 167% growth.


060 Other income Other income of the Company and its subsidiaries was Bt 217 mn in 2009, a decline of 3% when compared to the previous year of Bt 224 mn. Decline in other income was attributed mainly to interest income which was lowered from Bt 89 mn in 2008 to Bt 36 mn in 2009. FX gain booked in 2009 was Bt 54 mn increased from Bt 10 mn in 2008.

Expenses In 2009 operating expenses was Bt 7,150 mn increased from Bt 2,982 mn in 2008 or 72% increased. In 2009 the company and its subsidiaries booked allowance for impairment loss of assets and loss on sales of investment amounted Bt 629 mn. Total expenses was Bt 7,779 mn. Details of expenses are : Unit : Bt mn Item 2009 2008 % change Operating expenses : - Cost of sales and service 5,584 3,384 65 - Selling and servicing expenses 355 165 115 - Administrative expenses 1,211 619 96 Total operating expenses 7,150 4,168 72 Allowance for impairment loss of investments 516 1,738 (70) Allowance for impairment of other assets 95 92 3 Allowance for doubtful debt 15 18 (17) Loss on sales of investment 3 206 (99) Total Expenses 7,779 6,222 25 - Operating expenses in 2009 was Bt 7,150 mn, an increase of 72% from the previous year. Operating expenses attributable to sales and service income increased from 78% in 2008 to 85% in 2009, mainly due to employee related expenses, marketing and services expenses and depreciation of the telecom network cost. - In 2009 the company and its subsidiaries booked allowance for impairment loss in TT&T of Bt 516 mn according to accounting standard no.36 relating to impairment of assets which required the company and its subsidiaries to book allowance for impairment loss of investment. The closing price at the year end was Bt 0.54 per share. - Allowance for impairment loss of other assets of Bt 95 mn in 2009 included allowance for impairment loss of payphone equipment of Bt 71 mn.

Financial Expenses The Company and its subsidiaries’ financial expenses in 2009 was Bt 247 mn declined by Bt 51 mn from 2008 or 17% declining. This was due to the repayment of the loan of the company and its subsidiaries and declining in interest rate.

Profit (Loss) sharing from associates In 2009 the company booked profit sharing from associates (IKSC) amounted of Bt 3 mn.

Net profit (loss) In 2009 the company and its subsidiaries had net profit of Bt 204 mn compared with a net loss of Bt 1,245 mn in 2008. Details of net profit (loss) breakdown by business unit are as follow :


061 Unit : Bt mn Type of Business

Net profit (loss) 2008

2009

% change

Internet Broadband Business 472 350 35 Telecom Network Business 242 267 (9) Internet Service Business 123 (59) 308 Other Business and Investment (633) (1,803) 65 Total NetProfit (Loss) 204 (1,245) 116 Note : Net profit (loss) in 2009 and 2008 included allowance for impairment loss of investment and other assets amounted Bt 611 mn and Bt 1,829 mn respectively

Financial Position Assets As of December 31, 2009 the Company and its subsidiaries had total asset of Bt 15,944 mn, increased by Bt 3,616 mn or 29%. Total asset comprised of : December 31, 2009 Bt mn % of Total Asset

Items Current asset PP&E, net Other non current assets

8,229 6,068 1,647

December 31, 2008 Bt mn % of Total Asset

52 38 10

6,244 4,183 1,901

51 34 15

At the end of 2009, current asset of the Company and its subsidiaries was Bt 8,229 mn, Bt 1,985 mn increased from 2008 or 32%. Increase in such came from account receivable, TOT which has ceased its payment under the concession to subsidiary as they are still negotiate on the revenue sharing rate. Cash and cash at bank declined due to the loan repayment, treasury stock and the network expansion under TTTBB. Land building and equipment in 2009 increased Bt 1,885 mn from 2008 due to the network expansion of TTTBB. Other non current assets at the end of 2009 were Bt 1,647 mn, dropped from 2008 Bt 254 mn or 13%. This was due to amortization of deferred project cost under concession agreement of JSTC and TLDT.

Liabilities As of December 31, 2009, the Company and its subsidiaries had total liabilities of Bt 9,285 mn, rised by Bt 2,907 mn from 2008. Detail of total liabilities were as follow: Items Current liabilities (excluding current portion of long term liabilities) Long term liabilities

December 31, 2008 Bt mn % of total liabilities

December 31, 2007 Bt mn % of total liabilities

5,167

56

3,113

49

4,118

44

3,265

51

Current liabilities at the end of 2009 was Bt 5,167 mn, Bt 2,054 mn increased from 2008 due to loan from financial institution, account payable and other current liabilities which was in normal operation of subsidiaries.


062 Long term liabilities of the Company and its subsidiaries as of December 31, 2009 were Bt 4,118 mn, a Bt 853 mn increasing from last year because of the payable of equipment for the broadband expansion and liability under the financial lease agreement of asset. Declining in long term loan of the company and its subsidiaries was due to the loan repayment.

Shareholders’ Equity At the end of 2009, the consolidated shareholders’ equity was Bt 6,660 mn, increased by Bt 708 mn, or 12% due to the following reason: - Conversion of JAS-W of Bt 330 mn (net amount of paid up shares and discount on shares, as the exercise price was lowered than the par value). - The adjustment of revaluation deficit on changes in value of investment in available for sale securities (TT&T) of Bt 630 mn to reflect the fair value of such investment. - Company’s shares held by subsidiaries (which was eliminated in shareholders’ equity) declined by Bt 106 mn from 2008 as these shares has been sold. In 2009 net profit of the company and its subsidiaries was Bt 204 mn, the company has reserved retained earning for the second treasury stock program of Bt 615 mn.

Capital Structure As of December 31, 2009 the Company and its subsidiaries’ total liabilities was Bt 9,285 mn, 58% of total asset and shareholders’ equity was Bt 6,660 mn, or 42% of total asset. Debt to equity ratio was at 1.39 times.

Liquidity As of December 31, 2009, the Company and its subsidiaries’ cash and cash equivalent was Bt 1,569 mn declined by Bt 795 mn. Summarized of cash generated and used were as follow: - Net cash generated from operating activities Bt 1,048 mn - Net cash used for investing activities Bt (1,592) mn - Net cash used for financing activities Bt (251) mn

Treasury Stock Program for financial management At the end of 2009, JAS had 2,032,127,272 treasury shares as per the resolution of the Board of Director Meeting of Jasmine International Pcl. dated 28 February 2007 of 634,400,000 shares and the EGM No.1/2009 dated 17 June 2009 of 1,397,727,200 shares. Details of the Treasury Stock Program for financial management are shown in 7.1 (4)

Audit Fee The Company and its subsidiaries paid the audit fee to Ernst & Young Office Limited in the previous fiscal year totaling of Bt 9,109,000.


063 Total Asset and Shareholders Equity

Million Baht 18,000 16,000

15,944

14,979

14,000

12,329

12,000 10,000

8,837

8,000

6,660

5,951

6,000 4,000 2,000 2007

2008

2009

Total Asset

Equity

Sales & Net Profit

Million Baht 10,000 8,371 8,000 5,350

6,000 4,331 4,000

2,000 204 2007

(41)

2009

2008

(1,245)

(2,000)

Sales

Net Profit


064

Sales & Service Income 2009

Broadband 39%

Others 36%

Internet Telecom Services Network 11% 14%

Number of Emploee in Jasmine International Group 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0

4,374

2,403 1,388 381

1,250 202

159

2009

Year

Engineer

276

963

671 144

127 230 162

2008

Teachnician

INFO. Technology

444

2007

Administration & General

Total


Report on the Board of Directors’ Responsibility for Financial Report

065

The Board of Directors of Jasmine International Public Company Limited (the Company), is responsible for the consolidated financial statements of the Company and its subsidiaries as well as financial information in the Annual Report. Such consolidated financial statements have been prepared to be in compliance with generally accepted accounting principles, based on the accounting policies, which complied with Accounts Act B.E. 2000 and in accordance with the guidelines of the Board of the Securities and Exchange Commission under Securities and Exchange Act B.E. 1992 are appropriate and consistently applied, and supported by prudent judgement and the best estimation. Important information is adequately disclosed in the Notes to the financial statements. The Board of Directors oversees, and provided and maintains an efficient risk management and internal control system to ensure that the company and its subsidiaries have completely, accurately and adequately kept accounting records to safeguard their assets. It also provides protection against fraud or activities with significant irregularity. To accomplish this task, the Board of Directors has appointed the Audit Committee, which comprises Independent Directors to supervise and take responsibility for the quality of the financial statements and the internal control system. Opinions of the Audit Committee are stated in the Audit Committee report in the Annual Report. The Board of Directors is of the opinion that the Company’s overall internal control system is adequate and appropriate enough to enhance the credibility of the consolidated financial statements of the Company and its subsidiaries. As the aforementioned, Jasmine International Public Company limited (PCL) and its subsidiaries have disclosed the financial statement, the operation figure in compliance to with generally accepted accounting principles, and in accordance to the law and related rules and regulations, to the credibility of the consolidated financial statements of the Company and its subsidiaries as at December 31, 2009.

Mr. Pete Bodharamik Chief Executive Officer


066 Audit Committee Report The Audit Committee of Jasmine International Public Company Limited consists of three independent non-executive directors, namely, Dr. Vichit Yamboonruang as Chairman, Dr. Varapol Socatiyanurak and Dr. Yodhin Anavil as Committee members. It supervises the Company‘s operation as directed by the charter of the Audit Committee. In the fiscal year 2009, without any interference, the Audit Committee completely carried out its assigned duties and accordingly reported them to the Board of Directors. In each Audit Committee meeting, the Committee discussed the issues with the Company’s top executives, the executives from the Office of Internal Audit and the auditors. The tasks accomplished by the Audit Committee during the year 2009 are summarized as follows: » The review of the quarterly and annual financial statements of the Company as well as the consolidated financial statement of the Company and its subsidiaries prior to the submission to the Board of Directors, the Securities and Exchange Commission and the Stock Exchange of Thailand » The cautiously done review of the quarterly and annual financial statements of the Company, the consolidated financial statement of the Company and its subsidiaries, including notes to the financial statements by the Company’s auditors and management ensured the Audit Committee that the above-mentioned financial statements were fairly presented in compliance with the generally accepted accounting principles and were also sufficiently disclosed. » The evaluation of the appropriateness and adequacy of the Company’s internal control system and the provision of opinions on the results of internal audit through the supervision of the Office of Internal Audit and the audit of the Company’s auditors » The Audit Committee discussed with the Company’s auditors and internal auditors on significant recommendations which would enhance efficiency increase in the Company’s operation and internal control system for the management. » The approval of the 2010 audit plan prepared based on risk evaluation outcomes, covering all the important systems of the Company and its subsidiaries » The review and the follow-up of risk management outcomes of the Company and its subsidiaries » The Risk Management Committee evaluated risks which might have significant adverse effects on the Company’s business goal achievement and also set up the preventive and solving measures for them. » The review of the related party transactions of the Company and its subsidiaries in accordance with the Stock Exchange of Thailand’s regulations » Having reviewed the related party transactions of the Company and its subsidiaries, the Audit Committee has the opinion that such transactions were reasonably and truly done for the utmost benefits of the Company with all the general business terms and conditions fulfilled apart from the accurate and adequate information disclosure. » The provision of advice for the management on the Company’s operation to strengthen good corporate governance to fit with the guidelines of the Stock Exchange of Thailand in addition to the provision of reminders on various aspects the Company had to perform in compliance with the rules and regulations of the authorities supervising public companies » The Audit Committee proposed to the Company’s Board of Directors to appoint Ernst & Young Office Limited as the Company’s auditor for the year 2010.

Dr. Vichit Yamboonruang Chairman of the Audit Committee


Report of Independent Auditor 067 To the Shareholders of Jasmine International Public Company Limited I have audited the accompanying consolidated balance sheets of Jasmine International Public Company Limited and its subsidiaries as at 31 December 2009 and 2008, the related consolidated statements of income, changes in shareholders’ equity and cash flows for the years then ended, and the separate financial statements of Jasmine International Public Company Limited for the same periods. These financial statements are the responsibility of the management of the Company and its subsidiaries as to their correctness and the completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audits. Except for the matters discussed in paragraphs A) and B), I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.

that this company will have sufficient future cash flows to make full payment. On 22 April 2008, this company filed a petition for business rehabilitation with the Central Bankruptcy Court and the Court accepted the petition. Subsequently, on 2 June 2009, the creditors passed a resolution to select the rehabilitation plan preparer of this company and on 22 July 2009, the Central Bankruptcy Court ordered the appointment of the rehabilitation plan preparer. Up to the reporting date, the plan preparer is in the process of preparing the rehabilitation plan. However, the rehabilitation plan is still required to be approved by the creditors and the Court. The business rehabilitation plan may significantly impact on the allowance for doubtful accounts for the outstanding balances, and the management of the subsidiaries are therefore unable to determine appropriate amounts of allowance at this stage. In addition, this company faces uncertainties and various ongoing disputes with its concession provider and the auditor of this company was unable to reach any conclusions as a result of his review of its financial statements for the nine-month period ended 30 September 2009. I was unable to audit to satisfy myself as to the adequacy of the allowance for doubtful accounts, and this constitutes a limitation imposed by circumstance. As at 31 December 2009 and 2008, the subsidiaries also had outstanding balances receivable from the subsidiaries of this company amounting to approximately Baht 216 million and Baht 1,111 million, respectively ,and those subsidiaries of this company also had outstanding balances receivable from this company. These circumstances described may have a significant impact on the collectability of the outstanding receivable balances.

A) As described in Note 7 to the financial statements, as at 31 December 2009 and 2008, the subsidiaries had outstanding balances receivable from an associated company over which the Company and its subsidiaries no longer have significant influence amounting to approximately Baht 759 million and Baht 681 million, respectively (the balances are recorded under the captions of “Trade accounts receivable - related parties”, “Short-term loans to and amounts due from related parties”, “Unbilled receivable from related parties”, and “Other accounts receivable” in the B) As described in Note 8 to the financial statements, a concession provider has ceased making payment consolidated balance sheets). Most of the balances to a subsidiary for service under the co-investor are long outstanding. In considering the collectability agreement made between the subsidiary and the of the outstanding balances, the management concession provider since September 2008, as the of the subsidiaries received cash flow projections revenue sharing rates are still under negotiation with which prepared by this company in 2008. They show


068 rehabilitation plan of the Company. However, the subsidiary. Up to the reporting date, a conclusion certain creditors of the Company lodged objections to the revenue sharing rate negotiation has not yet to certain issues with the Supreme Court, and the been reached. The conclusion of such negotiation issues are being considered by the Supreme Court. may significantly impact on the amount of service The Company believes that these issues will not income recorded for the year ended 31 December have any impact on the financial statements of the 2009, amounting to Baht 841 million, the balance Company. of such trade receivable as at 31 December 2009, amounting to Baht 1,216 million, the value in use of the deferred cost of submarine optical fibre cable 2. As described in Note 7 to the financial statements, concerning the settlement of outstanding balances network used for providing such service, of which between a subsidiary company and associated the net book value as at 31 December 2009 is companies over which the Company and its Baht 499 million, and the value of investment and subsidiaries no longer have significant influence, the goodwill from investing in the subsidiary as at 31 amendments to leased line service rates and telecom December 2009, amounting to Baht 1,946 million and network service fees, and changes in conditions in Baht 37 million, respectively. I was unable to audit service agreements. to satisfy myself as to the amount of service income, the balance of such trade receivable, the value of the deferred cost of submarine optical fibre cable 3. As described in Note 15 to the financial statements, as at 31 December 2009, the Company and its network and the value of investment and goodwill subsidiaries have available-for-sale investments in the subsidiary, and this constitutes a limitation totaling Baht 701 million in an associated company imposed by circumstance. over which the Company and its subsidiaries no longer have significant influence, with investment In my opinion, except for any adjustments that might of the Company only totaling Baht 438 million. The be required to the financial statements for the year decrease in the fair values of these investments is 2009 and 2008 as a result of the matter discussed in significant and prolonged. For reasons of prudence, the paragraph A) and any adjustments that might be the Company and its subsidiaries therefore recorded required to the financial statements for the year 2009 as allowance for impairment of investments in such a result of the matter discussed in the paragraph B), the company in 2009 amounting to Baht 516 million financial statements referred to above present fairly, in and allowance for the Company only amounting to all material respects, the financial position of Jasmine Baht 421 million. In addition, significant matters with International Public Company Limited and its subsidiaries respect to this company are as follows: and of Jasmine International Public Company Limited as at 31 December 2009 and 2008, and the results of 3.1 This company filed a rehabilitation petition with their operations, and cash flows for the years then ended the Central Bankruptcy Court on 22 April 2008 in accordance with generally accepted accounting in order to restructure its debt. During this process, principles. this company has been protected pursuant to Section 90/12 of the Bankruptcy Act B.E. 2483. Without further qualifying my opinion on the above These factors indicate the existence of a material financial statements, I draw attention to the following uncertainty which may cast significant doubt on matters: this company’s ability to continue as a going concern. 1. As described in Note 1 to the financial statements, 3.2 This company earns income from other value on 7 August 2003, the Central Bankruptcy Court added services, for which some of the sharing approved the business rehabilitation plan of the rates are being arranged with the concession Company. Subsequently, on 14 September 2006, provider and/or still under negotiations and the Court issued an order to terminate the business


069 this company has ongoing disputes with the concession provider of which the outcome cannot presently be determined. 4. As described in Note 31 to the financial statements, concerning the reversal of the estimated rental expenses of a subsidiary. 5. As described in Note 38.8 to the financial statements, a subsidiary company entered into two turn-key agreements with two counterparties, whereby the subsidiary is obliged to deliver work within specific periods stipulated in the agreements. The subsidiary has been unable to make delivery within the stipulated

periods and the counterparties are therefore entitled to charge a penalty to the subsidiary at a rate of 0.1 percent of the contract value of the first contract (Baht 34 million) and at a rate of 0.2 percent of the contract value of the second contract (Baht 31 million) per each day of delay. However, the management of the subsidiary is in the process of requesting an extension of the deadline for delivery and they believe that negotiations for such extension will be successful because the delays were caused by delays in the delivery of areas by related agencies and no penalty will be imposed.

Supachai Phanyawattano Certified Public Accountant (Thailand) No. 3930

Ernst & Young Office Limited Bangkok: 23 February 2010


International Public Company Limited and its subsidiaries 070 Jasmine Balance sheets As at 31 December 2009 and 2008

(Unit: Baht)

Note Assets Current assets Cash and cash equivalents Current investments - deposits with 6 financial institutions Trade accounts receivable Related parties 7, 8 Unrelated parties 8 Total trade accounts receivable Less: Allowance for doubtful accounts 8 Trade accounts receivable - net Short-term loans to and amounts due from related parties - net 7 Inventories - net 9 Assets held for sale 10 Other current assets Unbilled receivable - related parties 7 Unbilled receivable - unrelated parties Dividend receivable from subsidiary 7 Prepaid project costs Other accounts receivable 11 Input tax pending payments Withholding tax Advance payments for goods and services Vat refundable Others Total other current assets Total current assets

Consolidated financial statements Separate financial statements 2009 2008 2009 2008 1,569,434,340 20,176,220

2,364,823,737 382,234,462 180,403,836 4,922,994

508,482,687 24,937,646

885,556,333 3,256,729,278 4,142,285,611 (114,342,543) 4,027,943,068

1,589,082,390 1,044,789,733 55,669,511 2,633,872,123 55,669,511 (104,722,802) (55,669,511) 2,529,149,321 -

58,958,906 58,958,906 (58,324,566) 634,340

21,554,626 987,971,634 227,732,913

18,002,067 724,219,021 119,221,648 53,581,518 -

389,502,053 -

2,280,420 344,256,929 136,012,745 400,459,358 232,212,170 70,994,542 72,573,918 37,015,055 78,098,958 1,373,904,095 8,228,716,896

111,762,762 116,353,533 - 1,482,306,830 333,941,760 74,426,344 116,428 96,951,025 189,356 38,862,569 6,825,055 139,763,749 17,575,874 49,447,540 3,957,618 979,085,156 1,493,395,287 6,244,267,283 2,604,771,764

1,399,994,895 435,395 776,159 2,087,575 7,888,311 1,411,182,335 2,334,739,061

The accompanying notes are an integral part of the financial statements.


Jasmine International Public Company Limited and its subsidiaries Balance sheets (Continued)

071

As at 31 December 2009 and 2008

(Unit: Baht)

Note Non-current assets Restricted deposits with financial institutions Long-term trade accounts receivable from associate over which influence has been lost Investments in subsidiaries - net Investments in associates - net Investments in available-for-sale securities - net Property, plant and equipment - net Intangible assets Computer software - net Prepaid rent - net Other non-current assets Deferred project costs - net Goodwill - net Advance payments for investment projects to related parties - net Others Total other non-current assets Total non-current assets Total assets

Consolidated financial statements 2009 2008

Separate financial statements 2009 2008

12 235,059,558 448,693,871 6,974,450 7 - 22,115,001 13 - 2,983,965,208 14 13,216,656 10,287,609 16,481,967 15 700,721,285 364,504,763 437,545,339 16 6,013,688,474 4,166,932,199 24,957,628 17 18 19 20 7

54,366,100 -

7,828,166 2,994,162,008 16,481,967 299,799,584 21,757,128

16,006,174 - 257,104,749

270,923,916

617,922,270 971,124,519 40,562,296 64,709,439 9,609,392 9,609,392 9,609,392 30,391,527 10,358,370 5,294,068 698,485,485 1,055,801,720 14,903,460 7,715,537,558 6,084,341,337 3,741,932,801 15,944,254,454 12,328,608,620 6,346,704,565

9,609,392 3,225,680 12,835,072 3,623,787,841 5,958,526,902

The accompanying notes are an integral part of the financial statements.


International Public Company Limited and its subsidiaries 072 Jasmine Balance sheets (Continued) As at 31 December 2009 and 2008 (Unit: Baht)

Note

Consolidated financial statements 2009 2008

Separate financial statements 2009 2008

Liabilities and shareholders’ equity Current liabilities Bank overdrafts and short-term loans from banks 21 1,283,397,372 439,933,279 Trade accounts payable Related parties 7 815,444,129 971,031,682 Unrelated parties 1,558,101,161 802,375,175 Total trade accounts payable 2,373,545,290 1,773,406,857 Current portion of accounts and notes payable 22 19,689,776 341,368,192 for equipment Current portion of liabilities under finance lease 23 32,249,191 agreements Current portion of long-term loans 24 1,340,405,576 1,598,200,000 Current portion of long-term debts under rehabilitation plan Related parties 7 - 164,733,095 Unrelated parties 25 10,371,221 29,486,720 10,371,221 Total current portion of long-term debts under rehabilitation plan 10,371,221 29,486,720 175,104,316 Amounts due to related parties 7 95,579,183 72,106,583 21,025,552 Other current liabilities Accrued project costs 304,894,975 248,705,028 Advances received for goods and services 357,629,510 181,802,670 Corporate income tax payable 147,328,711 101,965,961 Undue output tax 239,003,390 116,832,524 13,008,122 Accrued expenses 53,371,786 58,064,230 3,977,871 Withholding tax payable 37,598,452 51,250,438 1,279,207 Retention payable 53,580,981 25,736,412 259,237 Other accounts payable 122,207,680 28,577,725 2,541,718 Others 99,242,946 14,466,685 1,658,965 Total other current liabilities 1,414,858,431 827,401,673 22,725,120 Total current liabilities 6,570,096,040 5,081,903,304 218,854,988 Non-current liabilities Accounts and notes payable for equipment 22 1,387,525,205 net of current portion Liabilities under finance lease agreements - net 23 90,563,287 of current portion Long-term loans - net of current portion 24 169,367,497 225,000,000 Long-term debts under rehabilitation plan - net of current portion Related parties 7 - 659,055,161 Unrelated parties 25 1,054,094,150 1,058,734,720 1,054,094,150 Total long-term debts under rehabilitation plan 1,054,094,150 1,058,734,720 1,713,149,311 net of current portion Other non-current liabilities 12,974,894 11,837,185 8,908,575 Total non-current liabilities 2,714,525,033 1,295,571,905 1,722,057,886 Total liabilities 9,284,621,073 6,377,475,209 1,940,912,874 The accompanying notes are an integral part of the financial statements.

8,155,444 81,393 8,236,837 141,200,589 29,486,720 170,687,309 22,059,074 9,620,364 5,127,803 37,731,755 259,237 3,279,447 1,997,458 58,016,064 258,999,284 682,587,667 1,058,734,720 1,741,322,387 9,567,575 1,750,889,962 2,009,889,246


Jasmine International Public Company Limited and its subsidiaries Balance sheets (Continued)

073

As at 31 December 2009 and 2008 (Unit: Baht)

Note Shareholders’ equity Share capital Registered 15,485,673,420 ordinary shares of Baht 0.5 each Preferred shares, non-cumulative dividend 2.5% 200,000,000 shares of Baht 0.5 each Issued and fully paid-up 9,431,618,578 ordinary shares of Baht 0.5 each (2008: 8,322,667,163 ordinary shares of Baht 0.5 each) Share subscription received in advance Discount on ordinary shares Warrants Premium on ordinary shares from expired warrants Premium on capital reduction Premium on treasury shares Unrealised gain (loss) Surplus on investments in subsidiaries arising as a result of acquisitions of additional shares at a price less than the net book value at the acquisition date Capital surplus from share premium of subsidiary Capital surplus from change in shareholding in subsidiary Revaluation deficit on changes in value of investments in available-for-sale securities The Company’s shares held by subsidiaries

Consolidated financial statements 2009 2008

Separate financial statements 2009 2008

26 7,742,836,710 7,742,836,710 7,742,836,710

7,742,836,710

100,000,000 100,000,000 100,000,000 7,842,836,710 7,842,836,710 7,842,836,710

100,000,000 7,842,836,710

28.1 4,715,809,289 4,161,333,582 4,715,809,289 28.1 667,110 28.1 (224,549,619) (530,750) (224,549,619) 28.1 877,401 28.1 25,169,527 25,169,527 25,169,527 26 200,781,377 200,781,377 200,781,377 27 2,001,013 -

4,161,333,582 667,110 (530,750) 877,401 25,169,527 200,781,377 -

13.3

84,309,490

64,034,826

-

-

49,665,575 49,665,575 13.7 13,272,788 15 - (629,630,120) 27 (514,948,884) (620,919,884)

-

(559,085,711) -

The accompanying notes are an integral part of the financial statements.


International Public Company Limited and its subsidiaries 074 Jasmine Balance sheets (Continued) As at 31 December 2009 and 2008 (Unit: Baht)

Note Retained earnings Appropriated Statutory reserve - the Company - subsidiaries Treasury share reserve Unappropriated (Deficit) Equity attributable to the Company’s shareholders Less: Treasury shares Equity attributable to the Company’s shareholders - net Minority interests - equity attributable to minority shareholders of subsidiaries Total shareholders’ equity Total liabilities and shareholders’ equity

Consolidated financial statements 2009 2008

29 29 30

83,076,226 326,477,579 915,745,592 1,046,362,913 6,723,172,866 30 (915,745,592) 5,807,427,274 852,206,107

83,076,226 303,944,799 300,745,624 1,480,373,116 5,419,588,409 (300,745,624) 5,118,842,785 832,290,626

Separate financial statements 2009 2008 83,076,226 915,745,592 (394,495,109) 5,321,537,283 (915,745,592) 4,405,791,691 -

83,076,226 300,745,624 36,348,894 4,249,383,280 (300,745,624) 3,948,637,656 -

6,659,633,381 5,951,133,411 4,405,791,691 15,944,254,454 12,328,608,620 6,346,704,565 -

3,948,637,656 5,958,526,902 -

The accompanying notes are an integral part of the financial statements.

Directors


Jasmine International Public Company Limited and its subsidiaries Income Staments

075

For the years ended 31 December 2009 and 2008 (Unit: Baht)

Note Revenues Sales and service income Other income Revenue from reversal of liabilities 31 Management fee income Interest income Exchange gains Dividend income from subsidiaries 13 Others Total other income Total revenues Expenses Cost of sales and services Selling and servicing expenses Administrative expenses Management benefit expenses 7 Loss on sales of investments in available-for- 15.2, 15.4 sale securities Allowance for doubtful accounts Allowance for impairment of investments 13.2,15.1 Allowance for impairment of assets Total expenses Income (loss) before share of income from investments in associates, finance cost and corporate income tax Share of income from investments in associates Income (loss) before finance cost and corporate income tax Finance cost Income (loss) before corporate income tax Corporate income tax 33 Net income (loss) for the year Net income (loss) attributable to: Equity holders of the parent Minority interests of subsidiaries Earnings (loss) per share Basic earnings (loss) per share Net income (loss) attributable to equity holders of the parent Diluted earnings (loss) per share Net income (loss) attributable to equity holders of the parent

Consolidated financial statements 2009 2008

Separate financial statements 2009 2008

8,370,544,747 5,350,215,003

-

6,343,400

67,800,315 77,779,302 360,000 360,000 36,484,583 89,353,237 53,830,778 9,674,420 58,561,429 46,797,357 217,037,105 223,964,316 8,587,581,852 5,574,179,319

145,560,000 28,250,472 584,524,790 23,156,521 781,491,783 781,491,783

89,520,000 15,889,998 461,474,936 13,725,624 580,610,558 586,953,958

5,583,680,337 3,383,946,193 355,339,712 165,120,893 1,078,178,468 489,497,814 79,801,704 133,046,510 129,588,208 19,314,305 2,791,103 206,537,486 14,808,532 18,261,441 516,311,755 1,737,911,367 437,339,956 95,260,630 91,535,036 7,779,417,047 6,222,398,438 536,455,965

4,513,635 80,119,314 17,959,920 1,744,535,709 1,847,128,578

808,164,805 2,929,047 811,093,852 (246,933,269) 564,160,583 (337,726,294) 226,434,289

(648,219,119) 4,432,318 (643,786,801) (297,532,809) (941,319,610) (246,358,311) (1,187,677,921)

245,035,818 245,035,818 (60,879,853) 184,155,965 184,155,965

(1,260,174,620) (1,260,174,620) (75,462,946) (1,335,637,566) (1,335,637,566)

203,522,545 (1,244,916,896) 184,155,965 (1,335,637,566) 22,911,744 57,238,975 226,434,289 (1,187,677,921)

34 0.033

(0.186)

0.024

(0.174)

0.032

(0.186)

0.023

(0.174)

The accompanying notes are an integral part of the financial statements.


International Public Company Limited and its subsidiaries 076 Jasmine Cash Flow Staments For the years ended 31 December 2009 and 2008 (Unit: Baht)

Note

Consolidated financial statements 2009 2008

Separate financial statements 2009 2008

Cash flows from operating activities Net income (loss) before corporate income tax 564,160,583 (941,319,610) 184,155,965 (1,335,637,566) Adjustments to reconcile net income (loss) before tax to net cash provided by (paid from) operating activities Depreciation and amortisation 1,025,117,296 790,837,901 18,602,054 16,170,352 Allowance for doubtful accounts 14,808,532 18,261,441 Allowance for impairment of investments 516,311,755 1,737,911,367 437,339,956 1,744,535,709 Allowance for impairment of other assets 95,260,630 91,535,036 Loss on sales of investments in available-for2,791,103 206,537,760 sale securities Write-off assets 480,817 6,781,319 Loss (gain) on sales of equipment 3,198,385 (214,321) 45,667 (273,554) Gain on sales of assets held for sale 10 (25,291,591) Dividend income from investments in - (584,524,790) (461,474,936) subsidiaries Share of income from investments in (2,929,047) (4,432,318) associates Realised exchange loss (gain) from accounts 6,946,663 (7,174,528) and notes payable for equipment Unrealised exchange loss (gain) (54,347,554) 27,018,621 Net income from sales of equipment of 85,411,607 25,323,489 subsidiaries attributable to minority interests Interest income (36,484,582) (89,353,237) (28,250,472) (15,889,998) Interest expenses 240,550,844 274,588,477 60,879,853 75,456,143 Income from operating activities before 2,435,985,441 2,136,301,397 88,248,233 22,886,150 changes in operating assets and liabilities Operating assets decrease (increase) Trade accounts receivable (2,389,629,674) (722,784,469) 634,340 13,018,051 Amounts due from related parties (311,797) (8,493,376) (311,958,084) (88,760,838) Inventories (324,666,646) (2,522,132) Unbilled receivable (118,421,054) 42,237,043 Prepaid project costs 197,929,015 (266,153,460) Other current assets (434,105,741) (134,955,430) 5,437,787 17,154,714 Other non-current assets (20,033,157) 20,887,695 (2,068,388) 24,165,242 Operating liabilities increase (decrease) Trade accounts payable 1,498,787,889 444,152,761 (8,236,837) (7,893,943) Amounts due to related parties 23,472,600 48,361,799 (2,317,550) (1,017,930) The accompanying notes are an integral part of the financial statements.


Jasmine International Public Company Limited and its subsidiaries Cash Flow Staments (Continued)

077

For the years ended 31 December 2009 and 2008 (Unit: Baht)

Note Accrued project costs Advanced received for goods and services Accrued expenses Other current liabilities Other non-current liabilities Cash flows from (used in) operating activities Cash refund (paid) for corporate income tax Net cash flows from (used in) operating activities

Consolidated financial statements 2009 2008 56,474,206 42,534,377 175,826,840 92,976,393 9,038,427 808,605 264,634,352 70,221,563 1,137,709 450,557 1,376,118,410 1,764,023,323 (328,275,158) (254,042,365) 1,047,843,252 1,509,980,958

Separate financial statements 2009 2008 (34,423,351) 37,895,780 (659,000) 421,050 (265,342,850) 17,868,276 (4,737,480) 41,900,972 (270,080,330) 59,769,248

Cash flows from investing activities Decrease (increase) in current investments 160,227,616 354,783,537 20,014,652 Decrease in restricted deposits with financial 213,634,313 31,973,058 853,716 institutions Cash received from liquidation of subsidiaries 13.10 - 52,656,747 Dividend received from investments in - 502,212,855 subsidiaries Cash paid for investments in subsidiaries 13.3,13.9 (5,803,200) (97,565,409) (5,803,200) Cash paid for investments in available-for15 (238,219,160) (119,639,576) sale securities Cash received from sales of investments in 15 14,630,184 105,506,353 available-for-sale securities Proceeds from sales of equipment 5,380,037 4,535,879 15,888 Net cash received from sales of assets held for 10 78,873,109 sale Interest income 35,898,790 101,220,680 4,890,264 Acquisitions of plant and equipment (1,812,614,328) (1,276,484,952) (8,044,942) (43,942,155) Acquisitions of computer software Net cash flows from (used in) investing (1,591,934,794) (843,013,683) 514,139,233 activities

(357,159) 32,678,135 52,656,747 461,474,936 306,084 16,113,556 (18,567,269) 544,305,030

Cash flows from financing activities Interest expenses Increase in bank overdrafts and short-term loans from banks Repayment for accounts and notes payable for equipment Cash received from long-term loans from banks Repayment of long-term loans from banks Repayment of long-term debts under rehabilitation plan Dividend paid to the Company’s shareholders

(68,495,082) (3,440,717)

(226,702,276) (231,001,053) (63,412,446) 843,464,093 115,565,603 (354,687,887) (338,175,273) 202,873,072 300,000,000 (513,350,971) (571,200,000) (23,756,069) (3,440,717) (20,807,041) 35

- (313,718,164)

The accompanying notes are an integral part of the financial statements.

-

(384,229,909)


International Public Company Limited and its subsidiaries 078 Jasmine Cash Flow Staments (Continued) For the years ended 31 December 2009 and 2008 (Unit: Baht)

Note Dividend paid to minority interests of subsidiaries Cash paid to purchase the Company’s shares held by subsidiaries Cash received from sales of the Company’s shares held by subsidiaries Deposits received from sales of the Company’s shares held by subsidiaries Cash received from increase in share capital of subsidiary Cash received from warrant exercises Cash paid to purchase treasury shares Net cash flows used in financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Supplement cash flows information Non-cash transactions Purchase of inventories and equipment by liabilities The settlement of outstanding balances between a subsidiary and the associated companies over which influence have been lost by promissory notes and transferring its claim over outstanding receivable

27 27 28.1 30

Consolidated financial statements 2009 2008 (51,157,502) (59,729,257) - (620,919,884) 107,972,013 50,135,313 950,000 328,912,327 1,488,859 (614,999,968) (251,297,855) (1,720,179,886) (795,389,397) (1,053,212,611) 2,364,823,737 3,418,036,348 1,569,434,340 2,364,823,737 -

1,551,982,938 7 898,063,475

The accompanying notes are an integral part of the financial statements.

-

Separate financial statements 2009 2008 328,912,327 1,488,859 (614,999,968) (370,307,128) (454,676,849) (126,248,225) 149,397,429 508,482,687 359,085,258 382,234,462 508,482,687 -

-


082 Note to Consolidated Financial Statements Jasmine International Public Company Limited and its subsidiaries Notes to consolidated financial statements For the years ended 31 December 2009 and 2008

1. General information Corporate information Jasmine International Public Company Limited (“the Company”) is a public company incorporated and domiciled in Thailand. The Company is principally engaged in investments in the companies involved in the telecommunication business and its registered address is 200, 29th - 30th Floor, Moo 4, Chaengwatana Road, Pakkred, Nonthaburi. The Central Bankruptcy Court approved the business rehabilitation plan of the Company on 7 August 2003 and appointed Chaengwatana Planner Co., Ltd. as the plan administrator. Subsequently, on 14 September 2006, the Court issued an order to terminate the business rehabilitation plan of the Company. However, certain creditors of the Company lodged objections to certain issues with the Supreme Court, and the issues are being considered by the Supreme Court. The Company believes that these issues will not have any impact on the financial statements of the Company.

2. Basis of preparation 2.1 The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Professions 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 30 January 2009, 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 Jasmine International Public Company Limited (“the Company”) and the following subsidiaries (“the subsidiaries”):


086 b) Subsidiaries are fully consolidated as from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. c) The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent significant accounting policies. d) Material balances and transactions between the Company and its subsidiaries have been eliminated from the consolidated financial statements. e) Minority interests represent the portion of net income or loss and net assets of the subsidiaries that are not held by the Company and are presented separately in the consolidated income statement and within equity in the consolidated balance sheet. 2.3 The separate financial statements, which present investments in subsidiaries and associates presented under the cost method, have been prepared solely for the benefit of the public.

TAS 36 (revised 2007) TFRS 5 (revised 2007)

Impairment of Assets Non-current Assets Held for Sale and Discontinued Operations Accounting Treatment Guidance for Leasehold Right Accounting Treatment Guidance for Business Combination under Common Control

The Federation of Accounting Professions has issued Notification No. 86/2551 and No. 16/2552, mandating the use of new accounting standards, financial reporting standard and accounting treatment guidance as follows.

The management of the Company and its subsidiaries has assessed the effect of these standards and believes that TAS 20 and TAS 40 are not relevant to the business of the Company and its subsidiaries, while TAS 24 (revised 2007) will not have any significant impact on the financial statements for the year in which it is initially applied.

These accounting standards, financial reporting standard and accounting treatment guidance became effective for the financial statements for fiscal years beginning on or after 1 January 2009. The management of the Company and its subsidiaries has assessed the effect of these standards and believes that Framework for the Preparation and Presentation of Financial Statements, TAS, TFRS and Accounting Treatment Guidance as stated above do not have any significant impact on the financial statements for the current year.

3.2 Accounting standards which are not effective for the current year

Effective date TAS 20 Accounting for 1 January 2012 Government Grants and Disclosure of Government 3. Adoption of new accounting Assistance standards 1 January 2011 In June 2009, the Federation of Accounting Professions TAS 24 Related Party Disclosures issued Notification No. 12/2552, assigning new numbers to (revised 2007) 1 January 2011 Thai Accounting Standards that match the corresponding TAS 40 Investment Property International Accounting Standards. The numbers of Thai Accounting Standards as referred to in these financial However, TAS 24 (revised 2007) and TAS 40 allow early adoption by the entity before the effective date. statements reflect such change.

3.1 Accounting standards, financial reporting standard and accounting treatment guidance which are effective for 4. Significant accounting policies the current year 4.1 Revenue recognition

Sales of goods are recognised when the significant risks Framework for the Preparation and Presentation of and rewards of ownership of the goods have passed to the buyer. Sales are the invoiced value, excluding value Financial Statements (revised 2007) added tax, of goods supplied after deducting discounts and allowances.


087 Service revenues from the concession contracts, 4.4 Inventories excluded value added tax, is recognised in accordance Inventories are valued at the lower of weighted average with the revenue sharing percentage as stipulated in cost (specific cost for computer) and net realisable value. the agreement which is based on the number of circuits installed and in service. 4.5 Assets held for sale Assets held for sale are valued at the lower of carrying Revenues from providing telecom network services, amount and fair value less costs to sell. The management internet services and other business related to the Internet judges that there will be a completed sales of such assets business, telephone services, and management services within one year from the date of classification to the are recognised when services have been rendered. assets held for sale. Revenue from design and installation of telecommunication 4.6 Investments systems including provision of related equipment is a) Investments in available-for-sale securities are recognised when services have been rendered taking stated at fair value. Changes in the carrying into account the stage of completion. amounts of securities are recorded as separate items in shareholders’ equity until the securities Revenue from public telephone rental is recognised are sold, when the changes are then included in based on rental period, at the rate stipulated in the rental determining income. In addition, the Company and contract. its subsidiaries treat available-for-sale investments as impaired when the management judges that Revenue from installment sales is recognised at the date there has been a significant or prolonged decline in of sale, exclusive of interest. The sales price is the present fair value below their cost or where other objective value of the consideration, determined by discounting evidence of impairment exists. the installment receivable at the imputed rate of interest. b) Investments in associates are accounted for in the The interest element is recognised as income on a time consolidated financial statements using the equity proportion basis, using the imputed interest method. method. c) Investments in subsidiaries and associates are Sales of international calling cards are recognised when accounted for in the separate financial statements the services have been rendered. The prepaid value in using the cost method net of allowance for loss on such cards is recorded as deferred service income in diminution in value. current liabilities. The fair value of marketable securities is based on the Interest income is recognised on an accrual basis based latest bid price of the last working day of the year as on the effective interest rate. quoted on the Stock Exchange of Thailand. Dividends are recognised when the right to receive the dividends is established. The weighted average method is used for computation of the cost of investments. 4.2 Cash and cash equivalents Cash and cash equivalents consist of cash in hand In the event the Company and its subsidiaries reclassify and at banks, and all highly liquid investments with an investments in securities, such investments are adjusted to original maturity of three months or less and not subject their fair value as at the reclassification date. Differences to withdrawal restrictions. between the carrying amount of the investments and their fair value on that date are included in determining income 4.3 Trade accounts receivable (loss) or recorded as surplus (deficit) from changes in the Trade accounts receivable are stated at the net realisable value of investments in shareholders’ equity, depending value. Allowance for doubtful accounts is provided for on the type of investment which is reclassified. the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experience and analysis of debt aging.


088 4.7 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. Depreciation of plant and equipment is calculated by reference to their costs on the straight-line basis over the following estimated useful lives: Buildings - 20, 24 years Building improvements - 5, 9 - 12 years Leasehold improvements - 5 years Public telephones - 10 years but not more than the remaining terms of their contracts Equipment for telecom network services - 5 - 15 years Satellite transmission equipment - 5 years Tools and equipment - 3, 5 years Furniture, fixtures and office equipment - 3, 5 years Motor vehicles - 5 years Depreciation is included in determining income. No depreciation is provided on land and assets under installation.

4.8 Computer software Computer software is measured at cost. Following initial recognition, computer software is carried at cost less any accumulated amortisation and any accumulated impairment losses (if any). Computer software with finite lives is amortised on a straight-line basis over the economic useful lives of 3 -10 years and tested for impairment whenever there is an indication that the software may be impaired. The amortisation period and the amortisation method of such software are reviewed at least at each financial year end. The amortisation expense is charged to the income statement.

4.9 Prepaid rent and amortisation Prepaid rent is stated at cost less accumulated amortisation. Amortisation is calculated on the straight-line basis over the lease period of 30 years. The amortisation is included in determining income.

4.10 Deferred project costs and amortisation Deferred project costs are stated at cost less accumulated amortisation and allowance for loss on impairment of assets (if any). Amortisation is calculated by reference to their costs as follows: a) Costs of the submarine optical fibre cable networks are amortised by reference to the proportion of the number of circuits available for service in each year against the total numbers of circuits available throughout the concession periods. b) Costs of equipment for domestic high-speed data communication rental service are amortised on a straight-line basis over the concession periods. The amortisation is included in determining income.


089 4.11 Goodwill Goodwill is initially measured at cost, which is the excess of the cost of the business combination over the share of the Company and its subsidiaries in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities. If the cost of acquisition is less than the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities, the difference is recognised directly in the income statement.

payment. The outstanding obligations less the financial expense are recorded as long-term debt, while the interest element is charged to the income statements over the period of the installment agreements.

4.14 Foreign currencies

Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign Goodwill is carried at cost less any accumulated currencies are translated into Baht at the exchange rate impairment losses. Goodwill is tested for impairment ruling at the balance sheet date. annually and when circumstances indicate that the Gains and losses on exchange are included in determining carrying value may be impaired. income. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of cash 4.15 Impairment of assets generating units of the Company and its subsidiaries At each reporting date, the Company and its subsidiaries (or group of cash-generating units) that are expected perform impairment reviews in respect of the property, to benefit from the synergies of the combination. The plant and equipment, investments and other intangible Company and its subsidiaries estimate the recoverable assets whenever events or changes in circumstances amount of each cash-generating unit (or group of cash- indicate that an asset may be impaired. The Company generating units) to which the goodwill relates. Where and its subsidiaries also carry out annual impairment the recoverable amount of the cash-generating unit reviews in respect of goodwill. An impairment loss is is less than the carrying amount, an impairment loss is recognised when the recoverable amount of an asset, recognised. Impairment losses relating to goodwill cannot 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. be reversed in future periods. In determining value in use, the estimated future cash flows are discounted to their present value using a pre4.12 Related party transactions Related parties comprise enterprises and individuals that tax discount rate that reflects current market assessments control, or are controlled by, the Company, whether of the time value of money and the risks specific to directly or indirectly, or which are under common control the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations with the Company. are corroborated by a valuation model that, based They also include associates and individuals which on information available, reflects the amount that the directly or indirectly own a voting interest in the Company Company could obtain from the disposal of the asset in that gives them significant influence over the Company, an arm’s length transaction between knowledgeable, key management personnel, directors and officers with willing parties, after deducting the costs of disposal. authority in the planning and direction of the Company’s An impairment loss is recognised in the income statement. operations.

4.13 Long-term installment agreements

4.16 Employee benefits

A subsidiary records long-term installment agreements Salaries, wages, bonuses and contributions to the social for equipment which transfer substantially all the risks security fund and provident fund are recognised as and rewards of ownership to the subsidiary as capital expenses when incurred. expenditures at the present value of the installment


090 4.17 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.

management needs to make judgment and estimates based upon, among other things, past collection history, aging profile of outstanding debts and the prevailing economic condition.

Impairment of available-for-sale investments

The Company and its subsidiaries treat available-for-sale investments as impaired when the management judges 4.18 Treasury shares Treasury shares are stated at cost and presented as a that there has been a significant or prolonged decline in deduction from shareholders’ equity. Gains on disposal the fair value below their cost. The determination of what of treasury shares are determined by reference to the is “significant” or “prolonged” requires judgment. carrying amount and are presented as premium on treasury shares. Losses on disposal of treasury shares Property plant and equipment/Depreciation are determined by reference to the carrying amount In determining depreciation of plant and equipment, the and initially presented as a deduction from premium on management is required to make estimates of the useful treasury shares, with the remainder deducted against lives and salvage values of plant and equipment of the Company and its subsidiaries and to review estimate retained earnings. useful lives and salvage values when there are any changes. 4.19 Income tax Income tax is provided in the accounts based on the taxable profits determined in accordance with tax In addition, the management is required to review property, plant and equipment for impairment on a periodical basis legislation. and record impairment losses in the period when it is determined that their recoverable amount is lower than 4.20 Derivatives the carrying amount. This requires judgments regarding Forward exchange contracts Receivables and payables arising from forward exchange forecast of future revenues and expenses relating to the contracts are translated into Baht at the rates of exchange assets subject to the review. ruling at the balance sheet date. Gains and losses from the translation are included in determining income. Goodwill Premiums or discounts on forward exchange contracts The initial recognition and measurement of goodwill and are amortised on a straight-line basis over the contract subsequent impairment testing require management to make estimates of cash flows to be generated by periods. the asset or the cash generating units and to choose a suitable discount rate in order to calculate the present 5. Significant accounting judgments value of those cash flows. and estimates The preparation of financial statements in conformity with generally accepted accounting principles at times Litigation requires management to make subjective judgments and The subsidiary has contingent liabilities as a result estimates regarding matters that are inherently uncertain. of litigation. The subsidiary’s management has used These judgments and estimates affect reported amounts judgment to assess of the results of the litigation and and disclosures and actual results could differ. Significant believes that no loss will result. Therefore no contingent liabilities are recorded as at the balance sheet date. judgments and estimates are as follows:

Allowance for doubtful accounts In determining an allowance for doubtful accounts, the


091 6. Current investments - deposits with financial institutions Included in the balances of current investments as at 31 December 2009 are savings and fixed deposits of the Company and its subsidiaries amounting to approximately Baht 17 million (2008: Baht 103 million) and of the Company only amounting to approximately Baht 5 million (2008: Baht 25 million) which have been pledged to secure credit facilities.

7. 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 business and were concluded on commercial terms and bases agreed upon between the Company and those related parties. (Unit: Million Baht)

Consolidated financial statements 2009 2008 Transactions with associates over which influence have been lost Sales and service income

1,238

Transfer Pricing Policy

1,945 Contract price or normal business price charged to other customers or bidding price - Contract price 21 Contract price or normal business price charged to other customers 8 MLR 654 Contract price 88 Contract price 35 As agreed upon - As agreed upon - Contract price or normal business price charged to other customers

Revenue sharing income Rental and other service income Interest income Cost of sales and services Management fee expenses Purchase of equipment Transportation expenses Rental expenses

695 19 10 828 9 60 6 1

Transactions with related companies Sales and service income Rental and other service income Other expenses

6 19 9

2 22 -

Contract price or normal business price charged to other customers Contract price or normal business price charged to other customers Contract price or normal business price charged to other customers

Transactions with subsidiaries (eliminate from the consolidated financial statements) Management fee income Rental and other service income Interest income Interest expenses Management fee expenses Other expenses

145 46 23 1 22

89 38 3 6 1 26

Contract price Contract price or normal business price as charged to other customers MLR MLR-2% Contract price Contract price


092 As at 31 December 2009 and 2008, the balances of the accounts between the Company and those related companies are as follows: (Unit: Million Baht)

Consolidated financial statements 2009 2008 Trade accounts receivable - related parties Associates over which influence have been lost TT&T Plc. TT&T Subscriber Services Co., Ltd. Triple T Global Net Co., Ltd.

Separate financial statements 2009 2008

663 207 8 878

494 1,011 63 1,568

-

-

Total trade accounts receivable - related parties

2 5 1 8 886

16 3 1 1 21 1,589

-

-

Short-term loans to and amounts due from related parties Short-term loans to subsidiaries Acumen Co., Ltd. Compunet Corporation Ltd. Jasmine Smart Shop Co., Ltd. Total short-term loans to subsidiaries

-

-

500 6 506

39 6 45

-

-

58 48 47 40 11 11 10 6 6 1 1 1 240

1 237 16 35 11 10 7 6 43 366

Related companies Mono Generation Co., Ltd. Mono Technology Co., Ltd. Mono Film Co., Ltd. Mono Travel Co., Ltd.

Amounts due from related parties Subsidiaries Triple T Broadband Plc. Jasmine Submarine Telecommunications Co., Ltd. Acumen Co., Ltd. Compunet Corporation Ltd. Three BB Co., Ltd. (Formerly known as “Jasmine Cyber Works Co.,Ltd.�) Jasmine Internet Co., Ltd. Siam Teltech Computer Co., Ltd. Jasmine Smart Shop Co., Ltd. Jastel Network Co., Ltd. Premium Assets Co., Ltd. ACeS Regional Services Co., Ltd. Triple T Internet Co., Ltd. Thai Long Distance Telecommunications Co., Ltd.


093 (Unit: Million Baht)

Consolidated financial statements 2009 2008 Associates over which influence have been lost TT&T Plc. TT&T Subscriber Services Co., Ltd.

Separate financial statements 2009 2008

21 1 22 22 22 22

18 18 18 18 18

240 746 (22) 724

1 1 367 412 (22) 390

Unbilled receivable - related parties Associates over which influence have been lost TT&T Plc. TT&T Subscriber Services Co., Ltd. Total unbilled receivable - related parties

2 2

97 15 112

-

-

Dividend receivable from subsidiary Acumen Co., Ltd. Total dividend receivable from subsidiary

-

-

1,482 1,482

1,400 1,400

Long-term trade accounts receivable from associate over which influence has been lost Triple T Global Net Co., Ltd. Total long-term trade accounts receivable from associate over which influence has been lost

-

22 22

-

-

20

20

20

20

16 36 (26) 10

16 36 (26) 10

16 36 (26) 10

16 36 (26) 10

Total amounts due from related parties Total short-term loans to and amounts due from related parties Less: Allowance for doubtful accounts Total short-term loans to and amounts due from related parties - net

Advance payments for investment projects to related parties Associate Khunka Palang Thai Co., Ltd. Related company Palit Palangngan Co., Ltd. Total advance payments for investment projects to related parties Less: Allowance for doubtful accounts Total advance payments for investment projects to related parties - net


094 (Unit: Million Baht)

Consolidated financial statements 2009 2008 Trade accounts payable - related parties Subsidiary Jasmine Telecom Systems Plc. Associates over which influence have been lost TT&T Plc. TT&T Subscriber Services Co., Ltd. Triple T Global Net Co., Ltd. Total trade accounts payable - related parties Amounts due to related parties Subsidiaries Acumen Co., Ltd. Jasmine Submarine Telecommunications Co., Ltd. Mobile Communication Services Co., Ltd. Others Associate Premium Real Estate Co., Ltd. Associates over which influence have been lost TT&T Plc. TT&T Subscriber Services Co., Ltd. Triple T Global Net Co., Ltd. Related company Mono Technology Co., Ltd. Total amounts due to related parties Long-term debts under rehabilitation plan from related parties Subsidiaries Acumen Co., Ltd. Jasmine Submarine Telecommunications Co., Ltd. Total Less: Current portion (deferred interest expenses portion) Total long-term debts under rehabilitation plan from related parties - net of current portion

Separate financial statements 2009 2008

-

-

-

8

582 221 12 815 815

874 94 3 971 971

-

8

-

-

13 6 1 1 21

12 6 3 1 22

4

4

-

-

84 5 1 90

68 68

-

-

2 96

72

21

22

-

-

555 269 824 (165) 659

555 269 824 (141) 683


095 Long-term debts under rehabilitation plan from related parties are debts under the rehabilitation plan of the Company. Principal is to be settled in full in 2013, while interest is to be paid quarterly, at a rate of MLR-2 per annum, although the Company has the right to carry the interest forward to pay it in 2013. If the Company does not have sufficient surplus cash in 2013 to settle the principal and interest, all outstanding debts and interest are to be forgiven. As at 31 December 2009 and 2008, the subsidiaries had outstanding balances receivable from TT&T Plc. (TT&T), an associate over which the Company and its subsidiaries no longer have significant influence, amounting to approximately Baht 759 million and Baht 681 million, respectively (the balances are included under the captions of “Trade accounts receivable from related parties”, “Short-term loans to and amounts due from related parties”, “Unbilled receivable from related parties”, and “Other accounts receivable” in the consolidated balance sheets). Most of the balances are long outstanding. In considering the collectability of the outstanding balances of TT&T, the management of the subsidiaries received cash flow projections, which prepared by TT&T in 2008. They show that TT&T will have sufficient future cash flows to make full payment. On 22 April 2008, TT&T filed a petition for business rehabilitation with the Central Bankruptcy Court and the Court accepted the petition. Subsequently, on 14 January 2009, a creditors’ meeting resolved to appoint TT&T as the rehabilitation plan preparer. On 8 April 2009, the Court rejected TT&T as the rehabilitation plan preparer, and ordered the Official Receiver to hold a creditors’ meeting again within 40 days to select a new rehabilitation plan preparer. Subsequently, on 2 June 2009, the creditors passed a resolution to select P Planner Co., Ltd. as the rehabilitation plan preparer of TT&T and on 22 July 2009, the Central Bankruptcy Court ordered the appointment of P Planner Co., Ltd. as the rehabilitation plan preparer. On 29 September 2009, the Official Receiver published an advertisement of the appointment order in the Government Gazette. The plan preparer is then to prepare and submit a rehabilitation plan to the Official Receiver, who will call a creditors’ meeting to consider the plan within three months after the appointment of the plan preparer is announced in the Government Gazette. The Court may extend the

time limit up to two more times, with each extension not to exceed one month. Up to the present, the plan preparer is in the process of preparing the rehabilitation plan. However, the rehabilitation plan is still required to be approved by the creditors and the Court. The business rehabilitation plan may significantly impact on the allowance for doubtful accounts for the outstanding balances, and the management of the subsidiaries are therefore unable to determine appropriate amounts of allowance at this stage. As at 31 December 2009 and 2008, the subsidiaries also had outstanding balances receivable from the subsidiaries of TT&T amounting to approximately Baht 216 million and Baht 1,111 million, respectively, and those subsidiaries of TT&T also had outstanding balances receivable from TT&T.

The settlement of the outstanding balances with related parties On 22 June 2009, a meeting of the Board of Directors of Triple T Broadband Plc. (TTT), a subsidiary, passed a resolution approving TTT to enter into an agreement with TT&T Subscriber Services Co., Ltd. (TT&T SS), a subsidiary of TT&T. Under this agreement, TTT is to receive the assignment of promissory notes amounting to Baht 707 million issued by TT&T and endorsed by TT&T SS, with TT&T SS to endorse the promissory notes to settle some telecom network service payable to TTT by TT&T SS. On 16 July 2009, a meeting of the Board of Directors of TTT passed a resolution approving TTT to enter into an assignment contract with TT&T SS to settle telecom network service receivable from TT&T SS by TTT. Under this agreement, TT&T SS is to transfer its claim over outstanding receivables from TT&T amounting to Baht 170 million to TTT and TTT consents to receive the rights. Subsequently, TTT settled the leased line service payable balances through TT&T, the direct counterparty of TTT, by way of endorsement and assignment of promissory notes amounting to Baht 707 million, as described above. Furthermore, TTT notified TT&T of its intention to offsetting the telecom network service payable by way of exercising its rights in proceeds from TT&T SS amounting to Baht 170 million, as described above. (Formerly, TTT made payment of the leased line service fees to TOT.


096 Subsequently, the payment method became the subject of dispute because TOT filed criminal and civil complaints against TTT. As a result, TTT ceased making payment of leased line service fees to TOT.) The legal advisor of TTT has expressed an opinion that TTT is entitled to make direct settlement of leased line service payable under the leased line service contract made with TT&T as a result of objection of payment method because TTT and TT&T are direct counterparties and the above transactions are settlements in accordance with the meaning of related legal. The making payment of leased line service payable to endorse and transfer promissory notes means that TT&T is the issuer and the holder of the promissory notes at the same time. Therefore, rights and liabilities under the promissory notes in the debt are subject to the same person, and fully in harmony. Therefore, debt by the promissory notes and the service payable will be suspension in an equal amount of the promissory notes. TTT notified TT&T of its intention to offsetting by way of exercise its rights from TT&T SS as discussed above, therefore TTT whereas a debtor and creditor of TT&T at the same time. TT&T and TTT are mutual with the same purpose of debt. TTT is eligible to offset payable with TT&T in an equal amount.

On 12 May 2009, a meeting of the Board of Directors of TTT passed a resolution approving TTT to enter into an agreement with TT&T SS to amend the service charge calculation method for telecom network services to service revenue sharing, with TTT receiving 95 percent of service fees charged to customers, assuming that TTT (or its subsidiary) and TT&T SS are jointly providing the service to customers. Under this agreement, TTT (or its subsidiary) is to invest in telecom network, procurement of routers and advertising. The meeting also passed a resolution approving TTT to enter into an agreement to amend the service charge for leased line services under the agreement made with TT&T, to 15 percent of average monthly telecom network service revenue per circuit received by TTT. The management of TTT believes that both parties will mutually benefit from the amended conditions.

Directors and management’s benefits In 2009, the Company and its subsidiaries paid salaries bonuses and meeting allowances to their directors and management totaling Baht 133 million (separate financial statements: Baht 19 million) (2008: Baht 130 million, separate financial statements: Baht 18 million).

Guarantee obligations with subsidiaries Significant agreements with related parties

The Company has outstanding guarantee obligations with its subsidiaries, as described in Note 21 and Note 38.2 to In May 2006, TTT entered into an agreement with TT&T to the financial statements. provide leased line services to TTT, whereby TTT agreed to pay a monthly service fee as stipulated in the agreement. TTT also entered into an agreement to provide telecom network services to TT&T SS, whereby TTT received a monthly service fee as stipulated in the agreement. TTT is obliged to pay the leased line service fee to TT&T and provide service to TT&T SS until 26 October 2018 and comply with certain conditions as stated in the agreements.


097 8. Trade accounts receivable The balances of trade accounts receivable as at 31 December 2009 and 2008, aged on the basis of due dates, are summarised below. (Unit: Million Baht)

Age of receivables Related parties Not yet due Past due Up to 3 months Longer than 3 - 6 months Longer than 6 - 12 months Longer than 12 months Total (Note 7) Unrelated parties Not yet due Past due Up to 3 months Longer than 3 - 6 months Longer than 6 - 12 months Longer than 12 months Total Less: Allowance for doubtful accounts Net Trade accounts receivable - net

Consolidated financial statements 2009 2008

Separate financial statements 2009 2008

40

261

-

-

172 147 41 485 885

524 306 261 237 1,589

-

-

1,555

357

-

-

582 308 500 312 3,257 (114) 3,143 4,028

305 187 18 178 1,045 (105) 940 2,529

56 56 (56) -

1 58 59 (58) 1 1

Included in trade accounts receivable from unrelated parties over the age thresholds of 3 months as at 31 December 2009 and 2008, are amounts receivable from companies majority-owned by the government as follows: (Unit: Million Baht)

Age of receivables Longer than 3 - 6 months Longer than 6 - 12 months Longer than 12 months Total

Consolidated financial statements 2009 2008 232 162 461 2 227 94 920 258

Separate financial statements 2009 2008 -

-

Subsidiaries have assigned their rights over collection of major trade accounts receivable to banks, to secure credit facilities obtained from those banks.


098 As at 31 December 2009, an outstanding trade accounts receivable balance of Jasmine Submarine Telecommunications Co., Ltd. (JSTC), a subsidiary, amounting to Baht 1,216 million, is receivable for service under a co-investor agreement made with TOT, the concession provider. TOT has ceased making payment since September 2008 because the revenue sharing rates are still under negotiation with JSTC. JSTC recorded service income under such agreement for the year ended 31 December 2009 amounting to Baht 841 million. A conclusion to the revenue sharing rate negotiation has not yet been reached. However, JSTC believes that such recording is consistent with the co-investor agreement.

9. Inventories (Unit: Million Baht)

Satellite transmission equipment Finished goods and spare parts Total inventories Less: Allowance for obsolete inventories Inventories - net

Consolidated financial statements 2009 2008 29 30 1,066 190 1,095 220 (107) (101) 988 119

10. Assets held for sale As described in Note 16 to the financial statements, as at 31 December 2009, assets held for sale were as follows: (Unit: Million Baht)

Public telephones Assets under installation Land Building - net Total Less: Allowance for impairment Assets held for sale - net

Consolidated financial statements 2009 2008 158 141 48 6 299 54 (71) 228 54

In 2004, a subsidiary arranged for an independent appraiser to appraise the value of land and buildings that are not used in operations, which were classified as assets held for sale in 2008. According to this revaluation, the fair values of these assets exceeded their carrying values. As at 31 December 2008, the management of the subsidiary believed that the fair values of those assets held for sale did not differ from the values appraised during 2004. Subsequently, during 2009, the subsidiary sold these assets for Baht 103 million, with costs to sell amounting to Baht 24 million. The subsidiary had gain on the sale of Baht 25 million.

11. Other accounts receivable Other account receivable balances in the consolidated financial statements include the amount of Baht 73 million that Siam Teltech Computer Co., Ltd. (STCC) paid in advance to an unrelated company for TT&T for a project work. STCC has a right to call for the repayment for such amount from TT&T. STCC already filed this amount in its claims for settlement of debts under the business rehabilitation plan of TT&T.


099 12. Restricted deposits with financial institutions These represent saving and fixed deposits which the Company and its subsidiaries pledged to secure credit facilities.

13. Investments in subsidiaries Details of investments in subsidiaries as presented in separate financial statements are as follows: (Unit: Million Baht)

Company’s name Jasmine Submarine Telecommunications Co., Ltd. Acumen Co., Ltd. T.J.P. Engineering Co., Ltd. Mobile Communication Services Co., Ltd. Jasmine Telecom Systems Plc. Compunet Corporation Ltd. Jasmine Smart Shop Co., Ltd. Three BB Co., Ltd. (Formerly known as “Jasmine Cyber Works Co., Ltd.”) Jasmine International Overseas Co., Ltd. Jasmine Internet Co., Ltd. Chaengwatana Planner Co., Ltd. Less: Allowance for impairment of investments Total investments in subsidiaries - net

Paid-up capital 2009 2008 1,550 1,550 760 760 200 200 100 100 703 703 260 260 110 110 52 52 115 15 0.1

115 15 0.1

Cost 2009 1,946 760 160 70 100 100 110 52

2008 1,946 760 160 70 100 100 110 52

46 7 3,351 (367) 2,984

46 1 3,345 (351) 2,994

Dividend received during the year 2009 2008 582 330 14 115 3 585

2 461

13.1 As described in Note 8 to the financial statements, at 13.3 On 8 June 2009, the Meeting of the Board of Directors of the Company No.4/2552 passed a present, JSTC is in negotiation with TOT, a concession resolution to purchase of 480,000 ordinary shares provider, regarding the revenue sharing rates under of Jasmine Internet Co., Ltd. (Ji-Net), a subsidiary, the co-investor agreement made with TOT. The from CAT Telecom Plc. (CAT) at a price of Baht management of JSTC believes that the recorded 12.09 per share, or a total of Baht 5.8 million. The revenue of such service is consistent with the coCompany purchased the shares from CAT on 22 July investor agreement. 2009. As a result of the acquisition, the Company’s 13.2 For reasons of prudence, during 2009, the Company shareholding in Ji-Net increased from 65 percent set aside allowance for impairment of investment to 97 percent. Negative goodwill recognised from in T.J.P. Engineering Co.,Ltd. (TJP) of Baht 16 million, the acquisition of these investments amounting to because this subsidiary has been suffering losses on Baht 20 million is presented under the caption of its operation for a long time. “Surplus on investments in subsidiaries arising as a result of acquisitions of additional shares at a price less than the net book value at the acquisition date” in shareholders’ equity.


100 13.4 On 26 February 2009, the extraordinary general 13.7 On 13 September 2006, TT&T entered into a Memorandum of Understanding with Acumen meeting of the shareholders of Jastel Network Co., Co.,Ltd. (Acumen), a subsidiary. This prescribes that Ltd. (Jastel), a subsidiary, passed a resolution to Acumen is to provide financial support to TTT while increase the registered share capital of Jastel from TTT remains a subsidiary, and that Acumen will allow Baht 220 million (2,200,000 ordinary shares of Baht 100 the shareholders of TT&T to purchase the newly each) to Baht 520 million (5,200,000 ordinary shares issued shares and/or existing shares of TTT held by of Baht 100 each) by issuing an additional 3,000,000 Acumen in order to adjust the shareholding of TT&T ordinary shares of Baht 100 each, to be offered to on the date of TTT’s initial public offering (IPO) or existing shareholders. Jastel initially called up 25 a date 3 years after the date of execution of the percent of the registered share capital, or a total of agreement. In this regard, if TTT’s IPO goes ahead, Baht 75 million. Subsequently, on 15 October 2009, the purchase price of such shares shall be par value the extraordinary general meeting of shareholders of (Baht 10) plus a premium of 20 percent per year, or Jastel passed a resolution to additionally called up the public offering price of the ordinary shares of TTT, 10 percent of the registered share capital, or a total whichever is lower. If the IPO does not go ahead, the of Baht 30 million. Jastel registered the increase in purchase price shall be a fair price as assessed by share capital with the Ministry of Commerce on 27 an independent financial advisor approved by the February 2009. Securities and Exchange Commission (SEC). 13.5 The majority of the share certificates of the investments The legal advisor of TTT expressed an opinion that of the Company and Jasmine Telecom Systems Plc. the above Memorandum of Understanding has been (JTS) have been pledged or delivered to a security invalid since 19 June 2008, which is the date on agent as collateral to secure long-term debts under which the SEC submitted a letter to TTT notifying it of the rehabilitation plan, as described in Note 25 to the rejection of its request for permission to launch the financial statements. an IPO and the registration statement of newly issued securities of TTT, on the grounds that the SEC was 13.6 During 2007 to 2009, TOT lodged complaints against unable to consider the request made by TTT because TTT at numerous police stations, alleging that TTT had TTT had requested an indefinite extension to provide illicitly used TOT’s interconnection points. However, additional information. This can be held to constitute the management of TTT believes that TTT’s use of a denial of approval for TTT’s IPO by the SEC, and on TOT’s interconnection points was not in any way illicit this basis it can be held that TTT commenced the IPO since it comprised use of equipment and/or services process within 3 years but did not receive approval in accordance with a contract with a related from the relevant regulator, and thus invalidating the company. The issue has not yet been finalised. The memorandum from the above mentioned date as management of TTT is confident that no significant stipulated in the memorandum. losses will be incurred as a result of these lawsuits and no provision has therefore been made against the On 27 July 2009, the extraordinary general meeting of contingent liability in the accounts. the shareholders of TTT passed resolutions approving a decrease in its registered share capital from Baht In 2008, TTT was sued by TOT, seeking compensation 1,200 million to Baht 110 million, by writing off 1,090 of Baht 24 million and alleging that TTT had illicitly million unissued ordinary shares with a par value used telephone signal and Internet protocol of TOT. of Baht 1 per share and approving an increase in The case is under consideration by the Court. The its registered share capital from Baht 110 million to management of TTT is confident that no significant Baht 1,000 million, by issuing 890 million new ordinary losses will be incurred as a result of these lawsuits and shares with a par value of Baht 1 per share, to be no provision has therefore been made against the allocated to the existing shareholders of TTT in a ratio contingent liability in the accounts.


101 of 8.09 new shares for each existing share, at an offer 13.8 On 6 May 2008, JTS issued 950,000 ordinary shares, at a price of Baht 1 per share or a total of Baht 950,000 price of Baht 1 per share. TTT registered the increase in accordance with its employee share ownership in share capital with the Ministry of Commerce on 4 plan (ESOP). JTS registered the increase in its paidAugust 2009. up capital to Baht 702,950,000 with the Ministry of Commerce on 7 May 2008. On 30 July 2009, the meeting of the Board of Directors of Acumen which formerly held 99,999,410 shares of TTT, passed a resolution approving the purchase by 13.9 During 2008, ACeS Regional Services Co., Ltd. (ARS), a subsidiary, purchased 64 million ordinary shares Acumen of an additional 809,086,135 ordinary shares in JTS from an unrelated company for a total of of TTT by way of a rights offering in a ratio of 8.09 Baht 98 million. As a result, the group companies’ new shares for each existing share, at a price of combined shareholdings in JTS changed from 66% Baht 1 per share , together with a further 80,908,525 to 75%. Negative goodwill recognised from the shares to which TT&T waived its right to subscribe, acquisition of these ordinary shares amounting to at the same price, or a total of 989,994,070 shares Baht 64 million is presented under the caption of after increase in share capital. As a result of these “Surplus on investments in subsidiaries arising as a acquisitions, Acumen’s shareholding in TTT increased result of acquisition of additional shares at a price from 90.91 percent to 99.00 percent. The Company less than the net book value at the acquisition date” has recognised the increase in value of investments in shareholders’ equity. in TTT of Baht 13 million under the caption of “Capital surplus from change in shareholding in subsidiary” in 13.10 During 2008, the Company received returns from shareholders’ equity. the liquidation of Jasmine Energy Co., Ltd. and Jasmine Cable and Materials Co., Ltd., subsidiaries, amounting to Baht 53 million.


104 14.3 The Company recognised share of losses from investments in an associate, until the value of the investment approached zero. Subsequent losses incurred by the associate has not been recognised in the Company’s accounts since the Company has no obligations, whether legal or constructive, to make any payments on behalf of the associate. The amount of such unrecognised share of losses for the year ended 31 December 2009 is Baht 13 million. 14.4 The share of income for the year ended 31 December 2009 of all associates except Internet Knowledge Service Center Co., Ltd. were calculated from the financial statements for the year ended 31 December 2009 prepared by their managements and have not been audited by their auditors. The share of income for the year ended 31 December 2009 of Internet Knowledge Service Center Co., Ltd. was calculated from the financial statements for the nine-month period ended 30 September 2009 prepared by its management. However, the Company’s management believes that the exclusion of the operating result between 1 September - 31 December 2009 of that company will not materially affect the financial statements as a whole.

15. Investments in available-for-sale securities This represents investments in ordinary shares of TT&T, as per the following details. (Unit: Million Baht) Consolidated Separate financial statements financial statements 2009 2008 2009 2008 Investments in available-for-sale securities 995 1,026 859 859 Acquisitions during the year 238 119 Disposals during the year (18) (150) Revaluation deficit on changes in value of the investments in available-for-sale securities (514) (630) (421) (559) Reversal of revaluation deficit on changes in value of investments in available-for-sale securities 516 421 Allowance for impairment of investments (516) (421) Investments in available-for-sale securities - net 701 365 438 300 15.1 During 2009, the Company and its subsidiaries total of Baht 15 million through the Stock Exchange of recorded allowance for impairment of investments Thailand, with a loss on the sale of these investments in TT&T amounting to Baht 516 million and allowance of Baht 3 million. of the Company only amounting to Baht 421 million, as the decrease in the fair value of these investments 15.3 As described in Note 7 to the financial statements, is significant and prolonged, which the management on 22 April 2008, TT&T filed a petition for business considers to constitute an indication that the rehabilitation with the Central Bankruptcy Court investments have been impaired. The Company and and on 24 April 2008, the Central Bankruptcy Court its subsidiaries used the fair value of TT&T shares as at accepted the petition for the business rehabilitation 31 December 2009 as the basis for recording these of TT&T. Such event resulted the Company and its transactions. subsidiaries losing significant influence over TT&T in participating in the financial and operating policy 15.2 During 2009, Premium Assets Co., Ltd. (PA), a subsidiary, decision. The Company and its subsidiaries therefore purchased an additional 335 million ordinary shares have to transfer the investments from investments in in TT&T for a total of Baht 238 million, through the associate accounted for using the equity method Stock Exchange of Thailand. Subsequently, PA and to investments in available-for-sale securities. In Acumen sold 23 million ordinary shares in TT&T for a addition, the Company and its subsidiaries believe that the outcome of TT&T’s rehabilitation is uncertain


105 On 7 November 2008, the Central Bankruptcy Court while its ability to improve its operating performance ordered TT&T to enter the business rehabilitation depends on rehabilitation. For reasons of prudence, process and on 22 July 2009, the Central Bankruptcy in 2008, the Company and its subsidiaries therefore Court had an order to appoint P Planner Co., Ltd. recorded allowance for impairment of investments as a rehabilitation plan preparer. At present, the in TT&T amounting to Baht 1,901 million and that of plan preparer is in the process of preparing the the Company only amounting to Baht 1,746 million. rehabilitation plan. The Company and its subsidiaries used the fair value of TT&T shares on the transfer date as the basis for b) TT&T had the following outstanding commercial arbitration claims and certain disputes with TOT, the transfer and applied the same value as the new which were summarised from the financial statements cost of investments in available-for-sale securities. for the nine-month period ended 30 September 2009 reviewed by the certified public accountant who 15.4 During 2008, JSTC sold 141 million ordinary shares was unable to reach any conclusion as a result of in TT&T for a total of Baht 106 million through the his review, are as follows. Stock Exchange of Thailand. JSTC recorded reversal 1) Change in status of the TOT of allowance for impairment of these investments TT&T filed a lawsuit against TOT requesting the Central amounting to Baht 162 million and recorded loss Administrative Court to order TOT to act in compliance on the sale of these investments totaling Baht 207 with Clause 37 of the Joint Undertaking Agreement, million. Subsequently, PA purchased 159 million which states that “In case of any change in the ordinary shares in TT&T for a total of Baht 119 million status of TOT, all powers and authority held by TOT, through the Stock Exchange of Thailand. including the power to stipulate the maintenance standards, shall not be transferred to any private 15.5 The significant matters of TT&T are summarised as agency to the extent that the private agency would follows: have the power to supervise and control TT&T. In a) TT&T has encountered liquidity problems as a result such event, all of the powers and authority held by of mismatches between TT&T’s cash flows and debt TOT shall be vested in the Ministry of Transport and service obligations under the loan agreements. TT&T Communications”. The Central Administrative Court tried to propose a number of adjusted repayment judged in favour of TT&T and TOT appealed against plans on various occasions but could not reach this decision. On 25 February 2009, the Supreme mutual agreement with the creditors. On 27 March Administrative Court affirmed the judgment of the 2008, the Security Agent notified TT&T of their Central Administrative Court that TOT is to desist from receipt of an Instructing Creditor Notice dated 25 exercising authority in those areas where oversight March 2008 from one of the creditors, demanding of telecommunication business operations are under enforcement of security on the grounds that TT&T had the authority of held by TOT which involved the breached agreements. To ensure continuity of the National Telecommunications Commission (“NTC”) business operations and to serve debt restructuring were stopped. purposes, including the establishment of new debt 2) Reimbursement from TOT in bringing and/or allowing service conditions appropriate to TT&T’s cash flow other persons to bring “Value added services under position, TT&T filed a business rehabilitation petition the Joint Operate and Joint Investment Agreement” with the Central Bankruptcy Court. As a result, TT&T on to the TT&T’s basic telephone network. had to suspend payments of interest from April 2008, On 8 April 2005, TT&T submitted an arbitration claim as well as suspending payment of loan principal with the Thai Arbitration Institute, the Alternative due in June 2008, December 2008 and June 2009 Dispute Resolution Office, the Office of the Judiciary, ,pursuant to Section 90/12 (9) of the Bankruptcy Act in order to claim against TOT for the reimbursement B.E. 2483. in bringing and/or allowing other persons to bring value added services on to TT&T’s basic telephone


106 network, according to the Joint Operate and Joint Investment Agreement between TOT and TT&T. On 4 April 2008, TT&T received a ruling from the Thai Arbitration Institute, the Alternative Dispute Resolution Office, the Office of the Judiciary, dated 30 September 2008, stating that the Arbitrator panel ordered TOT to pay remuneration amounting to Baht 23,778 million, including interest, to TT&T for utilising the value added services through TT&T’s network, pursuant to the Joint Operate and Joint Investment Agreement between TOT and TT&T, up to date the award was rendered. In addition, TOT is to pay remuneration for such utilisation to TT&T, from 1 April 2005 until the end of the Joint Operate and Joint Investment Agreement. On 7 May 2008, TT&T filed a petition with the Civil Court requesting the Court order to enforce TOT to comply with the judgment of the Thai Arbitration Institute. However, on 22 August 2008 TOT filed an objection TT&T’s petition requesting for the Enforcement of the Arbitration Awards. The Civil Court informed TT&T and TOT that this case was being forwarded to the secretary of the Office of the Administrative Court. On 30 January 2009, the Civil Court informed TOT and TT&T that both the Central Administrative Court and the Civil Court had the same opinion that the Joint Operate and Joint Investment Agreement is an administrative contract. Therefore, this case was in the jurisdiction of the Central Administrative Court, in this reason the case was transferred to the Central Administrative Court. On 1 July 2008, TOT filed a petition with the Central Administrative Court seeking to overturn of the judgment of Thai Arbitration Institute, and TT&T submitted objections to the petition of TOT to the Central Administrative Court on 15 December 2008. On 16 October 2009, TT&T submitted a counterclaim against the objection to the Central Administrative Court. TT&T has not reflected the receipt of any of the awards in its financial statements. 3) The reduction of tariff for domestic long-distance telephone service On 21 October 2005, TT&T lodged a petition with the

Thai Arbitration Arbitrator, claiming for compensation from TOT for losses suffered as a result of the adjustment of domestic long-distance charges and the a reduction of revenue sharing from international calls from CAT Telecom Plc., amounting to Baht 2,355 million. TOT submitted a statement of dispute and a counterclaim whereby it restated the amount of revenue that TT&T has yet to submit at approximately Baht 1,641 million. On 1 September 2009, the Arbitrator panel rendered a judgment on the dispute in black case number 116/2548 and red case number 74/2552, whereby it ordered TOT to compensate TT&T for damages plus interest in the amount of Baht 2,554 million, for TOT’s breach of the concession contract. TT&T received the ruling from the Thai Arbitration Institute, the Alternative Dispute Resolution Office, the Office of the Judiciary on 4 September 2009, TT&T has not reflected the receipt of any of the awards in these financial statements. On 18 September 2009, TOT sent a letter to TT&T, stating that TOT will file a petition with the Central Administrative Court seeking to overturn the judgment of the Thai Arbitration Institute within 90 days from the date when the Office of the Attorney General received a copy of the judgment (9 September 2009). 4) Logos on public payphone booths On 27 September 2005, TOT submitted a case to the Thai Arbitration Institute demanding TT&T affix the TOT logo on public telephones and telephone booths, and make payment for all damages resulting from affixing TT&T logos on the payphones and booths, from October 1997 to September 2005, inclusive, totaling Baht 382 million, plus related interest of 7.5% per annum until final payment. The management of TT&T considers that the fixing of TT&T’s logo on the public phone booths was not done primarily for the purpose of business advertising, but was rather for the purpose of maintenance of the assets, as the logo identifies who is responsible for repairing the equipment. Therefore, pending the outcome of this matter, TT&T has not made any provision for any


107 claim in TT&T’s financial statements. On 16 December 2005, TT&T filed a defence and a counterclaim with the Thai Arbitration Institute. TOT filed its defence of the TT&T’s counterclaim on 9 February 2006. TT&T submitted a statement to the Thai Arbitration Institute requesting it to cease consideration of this dispute. The Thai Arbitration Institute ordered such cessation pursuant to Section 90/12(4) of the Bankruptcy Act B.E. 2483 until the cause of cessation ends. When consideration can recommence, the parties to the disputer should notify to the Thai Arbitration Institute. 5) Equipment transfer TOT sent a letter to TT&T, requesting payment of compensation for loss of benefit and the cost of damages caused by non-transfer of equipment for the additional extension of the network of 122 telephone exchanges, amounting Baht 162 million and non-transfer of the SDH equipment, amounting Baht 3,263 million. The management of TT&T believed that after the transfer of ownership of property, TT&T has sole right to use, to occupy and to maintain, as well as the sole right to seek interests in the property. TT&T is obliged to deliver all received revenue to TOT and in turn TOT is to allot part of this revenue to TT&T. In the past, both companies had correctly performed their obligators. The management of TT&T believes that on the basis of details provided, the claim by TOT regarding this matter is unjustified and can be defended, and accordingly no provision has been made in respect of this claim in its financial statements. 6) Building of DLC System TOT submitted an arbitration claim against TT&T with the Thai Arbitration Institute, the Alternative Dispute Resolution Office, the Office of the Judiciary, with respect to the building of the DLC System and TT&T’s non-authorised use of telephone numbers in the Samutsakhorn Industrial Estate without approval by TOT. TOT has claimed damages of Baht 39.8 million covering the period from April 2003 to December 2005. The management of TT&T considers that, TT&T has acted fully within its rights under the terms of the

Joint Operate and Joint Investment Agreement between TOT and TT&T in accordance with the Joint Operate and Joint Investment Agreement; TT&T has delivered all received revenue to TOT. There are therefore no damages to be claimed by TOT and TOT received such revenue sharing, and no provision has been made in respect of this claim in the financial statements. Subsequently, TT&T filed a defence of such claim with the Thai Arbitration Institute, and submitted a statement requesting considering this dispute. The Thai Arbitration Institute ordered that it cease such a cessation pursuant to Section 90/12(4) of the Bankruptcy Act B.E. 2483, until the cause of cessation is resolved. When the consideration can proceed, the parties to the dispute should inform the Thai Arbitration Institute. 7) T-Pin, T-SMS, ADSL and T-Card services TOT submitted for arbitration a dispute concerning its request for TT&T to submit revenue sharing of T-Pin, T-SMS and ADSL services during the early stage of operations as well as the additional revenue sharing from T-Card service, together totaling Baht 111 million. TT&T, as the objector, prepared and submitted a statement of objection and a counterclaim the amount of Baht 521 million, including interest, seeking to have TOT pay, and submitted a statement requesting that it cease consideration of this dispute. The Thai Arbitration Institute ordered such a cessation pursuant to Section 90/12(4) of the Bankruptcy Act B.E. 2483, until the cause of cessation is resolved. When deliberation is able to proceed, the parties to the dispute should inform the Thai Arbitration Institute. 8) Revenues from long-distance telephone service at economic rate Since the first quarter of 2006, TT&T has received correspondence from TOT regarding Y-Tel 1234 revenue. TT&T and TOT are in the process of providing clarification of or reaching a conclusion on this matter.


108 9) Payment of revenue sharing TOT submitted a claim to the Thai Arbitration Institute, seeking the return from TT&T of the excess revenue sharing that TT&T had received from TOT under the Joint Operate and Joint Investment Agreement, amounting to Baht 700 million, together with interest. The management of TT&T believes that the claimed amount is the excise tax that TT&T deducted from the revenue sharing with TOT and submitted to the Excise Department, in compliance with a 2003 Cabinet resolution. As the respondent, TT&T received a copy of the complaint and submitted a request to the Thai Arbitration Institute for an extension of the time for submission of its response. The Thai Arbitration Institute granted TT&T an extension until 9 May 2008. TT&T submitted a statement to the Thai Arbitration Institute requesting that it cease consideration of this dispute, and the Thai Arbitration Institute ordered such cessation pursuant to Section 90/12(4) of the Bankruptcy Act B.E. 2483, until the cause of the cessation is resolved. When the consideration of the dispute can proceed, the parties to the dispute should inform the Thai Arbitration Institute. c) TT&T earns income from other value added services, such as T-Pin, T-SMS and ADSL, etc, for which the rates of income sharing are pending agreement, and under negotiation, with TOT. Therefore, TT&T has recorded the income sharing at the same rates applied to the value added services or at the rate initially agreed with TOT.


111 As at 31 December 2009, certain plant and equipment items of the Company and its subsidiaries had been fully depreciated but were still in use. The original cost of those assets amounted to approximately Baht 564 million of which Baht 45 million is from the Company (2008: Baht 520 million and Baht 44 million, respectively). As at 31 December 2009, the subsidiary had vehicles and equipment under finance lease agreements with net book values amounting to Baht 117 million. In November 2005, PA purchased Jasmine International Tower from financial institutions at a price of Baht 1,200 million. The Company has prepaid rent in space in this building, as described in Note 18 to the financial statements, and therefore presents these prepaid rent as part of the building purchased by the subsidiary in the consolidated financial statements, in order that the presentation of information reflects its underlying economic substance. During 2008, Acumen set up allowance for impairment of satellite transmission equipment amounting to Baht 77 million because Acumen anticipated that the equipment would not have future benefits. The majority of equipment for use in providing telecom network services has been acquired under long-term installment agreements as described in Note 22 to the financial statements. As at 31 December 2009, title to and ownership of the equipment which their cost are approximately Baht 1,454 million will pass to a subsidiary when the subsidiary has made full payment of the contract price. (As at 31 December 2008, the equipment which their net book value are approximately Baht 421 million has been pledged to secure the accounts payable for equipment, as described in Note 22 to the financial statements.) As at 31 December 2009, property, plant and equipment included 11,944 installed public telephones under the rental contracts with TOT and 4,216 uninstalled public telephones of JTS, with a total net book value of approximately Baht 313

million (31 December 2008: 11,944 telephones and 4,891 telephones, respectively, with a total net book value of approximately Baht 398 million). On 3 February 2009, JTS issued a letter to TOT in order to seek approval from TOT to cancel the contracts with TOT to rent 30,000 public telephones for a 10year period because the counterparties are unable to perform their duties as agreed in the contracts. Under this letter, JTS requested TOT to consider the cancellation of the rental contracts to be effective within 27 February 2009. In April 2009, the meeting of the Board of Directors of TOT passed a resolution approving in principle to purchase public telephones from JTS. On 16 November 2009, JTS and TOT entered into a supplementary agreement to the payphone rental contracts with TOT, in order to cancel the abovementioned contracts with TOT to rent 30,000 public telephones. The cancellation was effective as from the date of signing the supplementary agreement, under which TOT agreed to buy public telephones and all equipment used in the operations under the public telephones rental contracts between JTS and TOT that is in good condition and useful for TOT, at prices stipulated in the supplementary agreement. However, JTS is to continue to provide the public telephones rental services until TOT completes its acceptance procedures. The service income received during the process of delivering the public telephones to TOT is considered income of TOT and no rental or sharing will be paid to JTS. Currently, JTS is in the process of making delivery to TOT, and it expects delivery and acceptance procedures to be completed in June 2010. Based on the supplementary agreement to the public telephone rental contracts with TOT, JTS recorded loss on impairment of the 11,944 public telephones installed for TOT amounting to Baht 71 million in the income statement of the current year. JTS used the buying-selling prices per the supplementary agreement as the basis for recognition. JTS reclassified


112 these installed public telephones as assets held for sale in the balance sheet. In addition, as at 31 December 2009, JTS had uninstalled public telephones with net book values amounting to Baht 141 million which JTS is in the process of offering for sale to an unrelated company. The management of JTS believes that the sales price will be close to the net book value and also believes that these uninstalled public telephones will sold within the second quarter of the year 2010. As a result, these uninstalled public telephones were also transferred to be recorded under the caption of assets held for sale in the balance sheet. In January 2009, JTS entered into Memorandums of Understanding with Triple T Global Net Company Limited (TGN), a subsidiary of TT&T, to rent up to 4,000 public telephones with telephone booths for a period of 2 years from the date of the rental contract, which can be extended periodically, by up to 10 years on aggregate and to rent up to 12,000 public telephones for a period of 1 year from the date of the rental contract, which can be extended periodically, by up to 5 years on aggregate. According to the Memorandums, JTS will receive monthly rental at a fixed monthly rate per telephone throughout the rental period. However, in May 2009 JTS and TGN cancelled such Memorandums of Understanding because JTS changed its policy from renting to selling public telephones, with the latter providing better cash flows.

17. Computer software (Unit: Million Baht)

Cost Accumulated amortisation Net book value Amortisation expenses included in the income statements for the year

Consolidated financial statements 2009 62 (8) 54 6

2008 24 (8) 16 8

18. Prepaid rent In July 1998, the Company entered into a 30-year agreement to lease space in an office building (Jasmine International Tower) from an associate and paid advance rental of Baht 415 million. Subsequently, in 2000, the associate transferred ownership of the building to financial institutions in settlement of liabilities, in accordance with a debt restructuring agreement. In November 2005, PA acquired the building back from the financial institutions, as described in Note 16 to the financial statements. As a result, in order to present information in accordance with its underlying economic substance, the Company has presented its prepaid rent as part of the building purchased by the subsidiary in the consolidated financial statements. The prepaid rent balances as at 31 December 2009 and 2008 are as follows: (Unit: Million Baht)

Prepaid rent Less: Accumulated amortisation Prepaid rent - net Amortisation expenses included in the income statements for the year

Separate financial statements 2009 2008 415 415 (158) (144) 257 271 14 14


113 19. Deferred project costs (Unit: Million Baht)

Costs of submarine optical fibre cable networks Costs of equipment for domestic high - speed data communication rental service Total Less: Accumulated amortisation Deferred project cost - net Amortisation expenses included in the income statements for the year

Consolidated financial statements 2009 5,123 5 5,128 (4,510) 618 355

2008 5,123 3 5,126 (4,155) 971 354

The costs of the submarine optical fibre cable networks represent costs incurred under the joint investment contracts between JSTC and Thai Long Distance Telecommunications Co., Ltd. (TLDT), subsidiaries, with TOT to install a submarine optical fibre cable networks on the east and the west coasts of Thailand, dated 4 October 1991. Ownership of the network was immediately transferred to TOT upon the subsidiaries’ completing network installation and passing the final acceptance test conducted by TOT. In return JSTC and TLDT are entitled to a share of revenues earned from the network over a period of 20 years, as from the date the network was transferred to TOT. Currently, TOT has ceased making payment to JSTC for service under the co-investor agreement, as TOT is in negotiation with JSTC regarding the revenue sharing rates, as described in Note 8 to the financial statements. JSTC and TLDT transferred their rights over the collection of their share of the revenues from TOT, under the above joint investment contracts, to secure long-term loan of JSTC, as described in Note 24.1 to the financial statements. JSTC and TLDT have an obligation to comply with certain conditions as stated in the agreement. The costs of equipment for domestic high-speed data communication rental service represent the cost of computer and communication equipment used to provide services under the agreement between Smart Highway Co., Ltd. (Smart), a subsidiary, and CAT Telecom Plc. (CAT) dated 15 January 1999. Ownership of the equipment was transferred to CAT when Smart delivered the equipment in accordance with the agreement. In return, Smart is entitled to operate the service under such contract for a period of 10 years, or until 14 April 2009. Currently, Smart transferred all the equipment used for such service to CAT, in accordance with the conditions stated in the agreement.

20. Goodwill Goodwill Less: Allowance for impairment Goodwill - net

(Unit: Million Baht) Consolidated financial statements 2009 2008 89 89 (48) (24) 41 65

As at 31 December 2009, goodwill of Baht 37 million is goodwill from an investment in JSTC. At present, JSTC is in negotiation with TOT, its concession provider, regarding the revenue sharing rates, as described in Note 8 to the financial statements.


114 21. Bank overdrafts and short-term loans from banks Bank overdrafts and short-term loans from banks as at 31 December 2009 and 2008 consist of: (Unit: Million Baht)

Consolidated financial statements Interest rate (percent per annum) 2009 2008 Bank overdrafts MOR to MOR+1 14 1 Short-term loans from banks MLR 1,269 439 1,283 440 Total Bank overdrafts of a subsidiary amounting to Baht 1 million are secured by the Company. Short-term loans from banks of subsidiaries are secured by the assignment of their rights over collection of trade accounts receivable of the subsidiaries as described in Note 8 to the financial statements.

22. Accounts and notes payable for equipment JTS purchased equipment from two groups of companies both domestic and overseas. Under the sale and purchase agreements, JTS is obliged to make payment within 3 years. The outstanding balances of such transactions as at the balance sheet date, based on due dates, are as follow: (Unit: Million Baht) Consolidated financial statements 2009 2008 Accounts and notes payable for equipment 1,589 347 Less: Deferred interest expenses (181) (6) Total 1,408 341 Less: Current portion (20) (341) Accounts and notes payable for equipment net of current portion 1,388 The outstanding balance of accounts and notes payable for equipment as at 31 December 2008 is secured by deposits with financial institutions, the pledge of equipment for providing telecom network services as described in Note 16 to the financial statements and the assignment of rights over collection from telecom network service contract of TTT, in accordance with the conditions stipulated in the agreements with accounts payable for equipment. The outstanding balance of accounts and notes payable for equipment as at 31 December 2009 is secured by TTT.


115 23. Liabilities under finance lease agreements (Unit: Million Baht)

Liabilities under finance lease agreements Less : Deferred interest expenses Total Less : Portion due within one year Liabilities under finance lease agreements - net of current portion

2009 143 (20) 123 (32) 91

2008 -

TTT has entered into the finance lease agreements with leasing companies for rental of motor vehicles and equipment for use in its operation, whereby it is committed to pay rental on a monthly basis. The terms of the agreements are generally between 3 and 5 years. As at 31 December 2009, future minimum lease payments required under the finance lease agreements were as follows: (Unit: Million Baht) Less than 1 year 1-5 years Total Future minimum lease payments 41 102 143 Deferred interest expenses (9) (11) (20) Present value of future minimum lease payments 32 91 123

24. Long-term loans 24.1 Baht 3,400 million loan with interest rate of MLR, repayable quarterly from June 2006 to June 2011 and secured by a) all rights and benefits pertaining to concession agreements as described in Note 19 to the financial statements b) deposit of JSTC c) letter of guarantee from TLDT 24.2 Baht 300 million loan with interest rate of MLR, repayable quarterly in eight installments from July 2009 to January 2011 24.3 Baht 203 million loan with interest rate of MLR, repayable quarterly in nine installments from March 2010 to March 2012 and secured by the assignment of rights to receive payments from certain accounts receivable of JTS Total Less: Current portion Long-term loans - net of current portion

(Unit: Million Baht)

Consolidated financial statements 2009 2008 1,119 1,523

188

300

203

-

1,510 (1,341) 169

1,823 (1,598) 225

The loan agreements contain covenants as specified in the agreements that, among other things, require the subsidiaries to maintain debt to equity and debt service coverage ratios according to the agreements.


116 As at 31 December 2008, Baht 1,523 million of the long-term loan as described in Note 24.1 to the financial statements belongs to JSTC. JSTC defaulted on principal and interest payments that were due to the financial institution on 31 December 2008, amounting to Baht 190 million and Baht 10 million, respectively. In addition, JSTC were unable to maintain required Debt Service Coverage Ratio (DSCR) of not less than 1.25, which is to be calculated on a semiannual basis. As at 31 December 2008, the ratio was 1.15. As a result of this event, the lender may exercise certain rights stipulated in the loan agreement, including the right to call the loan immediately. JSTC has therefore classified the whole balance of such loan as at 31 December 2008 as current liabilities. Subsequently, on 29 June 2009, JSTC has entered into a Memorandum of Understanding with the lender amending the loan agreement in terms of principal repayment. The amendment requires JSTC to repay the loan principal outstanding as at 30 June 2009, amounting to Baht 1,142 million by June 2011 in quarterly installments. The first installment is due in March 2010 (the last installment of the original loan agreement is due in September 2010). In addition, the loan agreement stipulates certain covenants, including the maintenance of a minimum loan reserve account balance of Baht 250 million. However, as at 31 December 2009, the balance of such account of JSTC is Baht 92 million. As a result of this event, the lender may exercise certain rights stipulated in the loan agreement, including the rights to call the loan immediately. JSTC has therefore classified the whole balance of such loan as current liabilities. Currently, the lender has not yet exercised its rights as stipulated in the loan agreement. The periods to maturity of long-term loans as at 31 December 2009 and 2008 are as follows: (Unit: Million Baht)

Within one year After one year but within three years Total

Consolidated financial statements 2009 2008 1,340 1,598 170 225 1,510 1,823

25. Long-term debts under rehabilitation plan (Unit: Million Baht)

Consolidated financial statements/ Separate financial statements 2009 2008 Long-term debts under rehabilitation plan (Note 1), repayable under rehabilitation program and consisting of the following loans. 25.1 Baht 1,827 million long-term loan at interest rate of MLR, repayable within 9 years. 25.2 Baht 171 million long-term loan, repayable within 9 years with interest rate of MLR-2% for the first eight years and MLR+20% for the ninth year. 25.3 Baht 818 million long-term loan at interest rate of MLR, repayable within 4 years. Total Less: Current portion Long-term debts under rehabilitation plan - net of current portion

906 158

909 160

1,064 (10) 1,054

19 1,088 (29) 1,059


117 In March 2007, the Company made early repayment of long-term debts under rehabilitation plan amounting to Baht 396 million, comprising the installments due to creditors under the Company’s rehabilitation plan (Note 25.1) for the period 9 June 2007 to 9 December 2010. The periods to maturity of long-term debts under rehabilitation plan as at 31 December 2009 and 2008 are as follows: (Unit: Million Baht)

Within one year After one year but within five years Total

Consolidated financial statements/ Separate financial statements 2009 2008 10 29 1,054 1,059 1,064 1,088

Under the rehabilitation plan of the Company, the majority of the investments of the Company and JTS has to be pledged or delivered to the custody of a security agent.

26. Share capital On 10 July 2008, the Extraordinary General Meeting of shareholders of the Company passed a resolution to reduce the registered share capital by 15,485,673,420 ordinary shares, and 200,000,000 preferred shares, and reduce the paid-up capital by 8,319,917,163 shares, by decreasing the par value of the shares from Baht 1 per share to Baht 0.50 per share. This reduction of registered and paid-up capital is made to eliminate the Company’s deficit and the discount on ordinary shares. The capital reduction of Baht 4,160 million compared to the Company’s deficit and the discount on ordinary shares amounting to Baht 2,201 million and Baht 1,758 million, respectively, as at 31 August 2008, and the excess of the capital reduction over the Company’s deficit and discount on common stocks was presented as “Premium on capital reduction” in the balance sheet.

deduction of 2,032,127,200 treasury shares, acquired and held by two subsidiaries, PA and ARS. In order to avoid possible conflict of interest pursuant to the Notification of the Stock Exchange of Thailand Re: Maintaining the Status of Listed Companies, the Company is to request the subsidiaries to dispose of all above ordinary shares within 1 year, by 12 January 2010. In June 2009, the meetings of the board of directors of PA and ARS passed respective resolutions approving the disposal of all of the shares that they held in the Company at prices of Baht 0.40 per share and Baht 0.44 per share, respectively. Subsequently, PA and ARS entered into disposal agreements with two institutional investors at the above offer prices. The agreements stipulate that each subsidiary is to dispose of all shares in the Company within 15 March 2010.

The Company registered the share capital reduction with the Ministry of Commerce on 19 September 2008. However, the schedules for disposal of the Company’s shares exceed the period stated in the notification the 27. Company’s shares held by Company provided to the Stock Exchange of Thailand, subsidiaries whereby the Company is to request the subsidiaries This represents the acquisition cost of the 1,275,518,000 dispose of all the Company’s shares within 1 year, by ordinary shares remaining as at 31 December 2009, 12 January 2010. The Company has already notified an accounting for 17.24 percent of the total number of extension of the period to the Stock Exchange of Thailand. shares in issue amounting to 7,399,491,378 shares, after


118 Subsequently, in July 2009, the two subsidiaries received deposits amounting to Baht 35 million and Baht 25 million, respectively. These deposits will be proportionally offset with cash received from each share disposal.

In October 2003, the Company issued additional 106.65 million warrants (with the same exercise price and exercise ratio as the existing warrants) in order to comply with the criteria for adjusting the exercise price and ratio stipulated in the prospectus for these warrants, since the issuance of Warrant II and the offer of 30 million shares to specific investors under the rehabilitation plan have resulted in loss of rights and benefits for the holders of the original warrants.

During 2009, PA and ARS sold amounts 200 million and 50 million of the Company’s shares in accordance with the disposal agreements, for totals of Baht 88 million and Baht 20 million, respectively. The gains on the sales of such shares, amounting to Baht 2 million, were recorded under the caption of “Premium on treasury shares” in In conjunction with the Company’s stock split, whereby the par value of the shares changed from Baht 10 to shareholders’ equity. Baht 1 per share, the number and exercise price of the warrants was adjusted. For Warrants I the exercise price 28. Warrants was changed from Baht 3.341 per share to Baht 0.334 per share, the exercise ratio remained at 1 warrant per 1 28.1 Warrants offered to existing ordinary share and the warrant holders are to receive an shareholders In July 1999, the Company issued 333.6 million warrants additional 9 warrants for every 1 warrant held, effective for existing shareholders to subscribe for ordinary shares 8 January 2004. For Warrants II the exercise price was at Baht 0.10 each. The warrants, which were issued in the changed from Baht 5 per share to Baht 0.5 per share, with ratio of 1 warrant per 1 existing ordinary share, have an the exercise ratio remaining at 1 warrant per 1 ordinary exercise period of 10 years (the Annual General Meeting share and the warrant holders to receive an additional No. 1/2545 passed a resolution approving the extension 9 warrants for every 1 warrant held, totaling 10 warrants of the maturity of the warrants from 5 years to 10 years), as from the date the Company issued the warrants (9 and are exercisable every 3 months. The first and the last February 2004). exercise dates are 15 September 1999 and 15 June 2009, respectively. One warrant provides the right to purchase On 5 November 2008, a Board of Director’s Meeting of one ordinary share (with a par value of Baht 10 each) at the Company passed a resolution approving the payment of an interim dividend of Baht 0.05 per share. The interim the exercise price of Baht 5. dividend from retained earnings as at 30 September 2008, On 25 September 2003, Meeting No. 12/2546 of the Plan payment affects the rights and benefits of the holders Administrator Board passed a resolution approving the issue of the warrants, and therefore their exercise prices were 551.97 million warrants (Warrant II) for existing shareholders adjusted. The exercise price of Warrant I was changed to subscribe to ordinary shares at Baht 0.05 each. The from Baht 0.334 per share to Baht 0.297 per share, with the warrants, which were issued in a ratio of 1 warrant per exercise ratio remaining at 1 warrant per 1 ordinary share. 1 existing ordinary share, have an exercise period of 5 The exercise price of Warrant II was changed from Baht years from the date of issue, and are exercisable every 3 0.5 per share to Baht 0.444 per share, with the exercise months. One warrant provides the right to purchase one ratio remaining at 1 warrant per 1 ordinary share. ordinary share (with a par value of Baht 10 each) at an exercise price of Baht 5. The last exercise date was 30 On 30 December 2008, the final exercise date for Warrant December 2008. In addition, the same meeting passed II, the Company presented expired warrants amounting to a resolution approving an adjustment of the rights of the Baht 25 million under the caption of “Premium on ordinary existing warrants and warrants as described in Note 28.2 shares from expired warrants” in shareholders’ equity. to the financial statements. The adjustment of the rights of the existing warrants will be determined according In 2008, 4,262,500 warrants were exercised to purchase to the calculation formula and method provided in the 4,262,500 new ordinary shares. This included 1,502,500 additional ordinary shares which the Company registered prospectus for these warrants.


119 In conjunction with the Company’s stock split, whereby the par value of the shares changed from Baht 10 to Baht 1 per share, the number and exercise price of the warrants was adjusted, with the exercise price changing from Baht 6.68 to 19.56 per share to Baht 0.668 to 1.956 per share, the exercise ratio remaining at 1 warrant per 1 ordinary share and warrant holders to receive an In 2009, 1,107,448,915 warrants were exercised to purchase additional 9 warrants, totaling 10 warrants, from 8 January 1,107,448,915 new ordinary shares which the Company 2004 onwards. registered as share capital with the Ministry of Commerce between 26 March 2009 and 25 June 2009 (15 June 2009 In 2009, 16,086,380 warrants were expired and there were no warrants exercised to purchase new ordinary shares. is final exercise date for Warrant I). as share capital with the Ministry of Commerce on 15 January 2009. As a result, the Company presented the cash received from the exercise of these warrants, amounting to Baht 0.7 million, under the caption of “share subscription received in advance” in shareholders’ equity as at 31 December 2008.

28.2 Warrants offered to the directors and/ or employees of the Company and its subsidiaries (ESOP) On 4 September 2000, the Extraordinary General Meeting of Shareholders No. 1/2543 passed a resolution approving the issue and offering of 18.4 million registered, nontransferable warrants to purchase common shares to directors and/or employees of the Company and its subsidiaries, free of charge. The warrants have an exercise period of 5-8 years (the Extraordinary General Meeting of shareholders No. 1/2545 passed a resolution approving the extension of the maturity of the warrants from 5 years to 5-8 years) from the date of issue, and are exercisable every 3 months. One warrant will provide the right to purchase one ordinary share (with a par value of Baht 10 each) at exercise prices of between Baht 10 and Baht 29.28.

As at 31 December 2009, the Company had 16,242,060 warrants remaining unexercised.

29. Statutory reserve Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside to a statutory reserve at least 5 percent of its net income after deducting accumulated deficit brought forward (if any), until the reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividend distribution.

Pursuant to section 1202 of the Thai Civil and Commercial Code, subsidiaries incorporated under Thai Laws is required to set aside a statutory reserve equal to at least 5 percent of its income each time the subsidiaries pays out a dividend, until such reserve reaches 10 percent of its registered share capital. The statutory reserve can neither In 2001, the Company issued the first 5.46 million warrants be offset against deficit nor used for dividend payment. to purchase ordinary shares, for free of charge, and in 2002 issued the second 13.49 million warrants to purchase 30. Treasury shares/Appropriated ordinary shares, to directors and/or employees of the retained earnings for treasury shares Company and its subsidiaries, with the first and last On 28 February 2007, the meeting of the Board of exercise dates are 15 March 2001 and 15 March 2010, Directors of the Company approved a program to repurchase up to 832 million shares (par value of Baht respectively. 1 each), or 10 percent of the total number of shares in In October 2003, the Company issued additional 6.75 issue, with a budget of Baht 300 million, for liquidity surplus million warrants (with the same exercise price and management purpose. The shares can be resold from 15 exercise ratio as the existing ESOP) in order to comply March 2008 to 14 September 2010. As at 31 December with the criteria for adjusting the exercise price and ratio 2008, the Company has purchased back 634 million stipulated in the prospectus for these warrants, since the ordinary shares (par value of Baht 1 each) for a total issuance of Warrant II and the offer of 30 million shares of Baht 300 million (exclude cost of repurchase treasury to specific investors under the rehabilitation plan have shares). resulted in loss of rights and benefits for the holders of the original warrants.


120 On 17 June 2009, the Extraordinary General Meeting of Shareholders No. 1/2552 of the Company approved a program to repurchase up to 1,398 million ordinary shares (par value of Baht 0.5 each) at a price of Baht 0.44 per share, with a budget of Baht 615 million, for liquidity surplus management purpose. The shares were to be repurchased through a general offering to shareholders, between 3 - 13 July 2009, and can be resold between 14 - 27 January 2010. As at 13 July 2009, the last day of the repurchase period, the Company had purchased back 1,398 million ordinary shares for a total of Baht 615 million (exclude cost of repurchase treasury shares). As at 31 December 2009, the Company has purchased back totally 2,032 million ordinary shares (par value of Baht 0.5 each) for a total of Baht 915 million, or 22 percent of total number of shares in issue. According to letter No. Gor Lor Tor. Chor Sor. (Vor) 2/2548 of the Office of the Securities and Exchange Commission, dated 14 February 2005, concerning the acquisition of treasury shares, a public limited company may purchase back treasury shares in an amount not exceeding the amount of its retained earnings and is to appropriate an equal amount of retained earnings to a reserve for treasury shares, which must be maintained until the Company either sells the treasury shares or reduces its paid-up share capital by an amount equal to the value of the treasury shares which it could not sell. As at 31 December 2009 and 2008, the Company has already appropriated the full required amount of retained earnings to a reserve for the treasury shares.

On 3 December 2009, Meeting of the Board of Directors of the Company No. 7/2552 passed resolutions to dispose of 1,397,727,200 treasury shares through the Stock Exchange of Thailand during 14 - 27 January 2010 and to decrease paid-up share capital by canceling those treasury shares that cannot be sold during the specified period.

31. Revenue from reversal of liabilities During 2007, TTT signed contracts for the use of space and/or property of a company and submitted the contracts to this company to consider and sign. TTT has not received any response to the proposed contracts from this company. The legal advisor of TTT has expressed an opinion that the contracts for use of space between TTT and this company are not existent and do not have any legal force. Furthermore, given that this company has not responded within what could be considered a reasonable time frame for such a response, it is held that the proposals made by TTT are no longer binding. Therefore, TTT reversed estimated rental expenses amounting to Baht 67 million in the income statement in the current year. In 1998, Compunet Corporation Limited (Compunet), a subsidiary, entered into an agreement with the National Telecommunications Commission (NTC) (formerly known as “The Post and Telegraph Department�) to provide domestic satellite data communication services for a period of 22 years. However, on 27 August 2004, Compunet issued a letter to NTC requesting the cancellation of the agreement because Compunet had ceased its operation. Subsequently, On 26 January 2009, NTC approved the cancellation of the agreement to provide satellite data communication services and called for Compunet to make payment of license fees, penalties and interest totaling Baht 46 million, Compunet therefore reversed the over-recorded liabilities amounting to Baht 78 million in the income statement of the year 2008.


121 32. Expenses by nature Significant expenses by nature are as follow: (Unit: Million Baht)

Salaries, wages and other employee benefits Telecommunication network rental expenses Cost of goods sold Subcontracting expenses Depreciation Amortisation expenses Telecommunication license fees Rental expenses Management fee expenses Allowance for impairment of investments Loss on sales of investments in available-for-sale securities Allowance for doubtful accounts Allowance for impairment of other assets

Consolidated financial statements 2009 2008 914 538 2,217 1,073 762 974 1,595 202 665 429 360 361 165 139 39 45 9 89 516 1,738 3 207 15 18 95 92

Separate financial statements 2009 2008 48 38 5 5 2 14 14 1 421 1,745 -

33. Corporate income tax The Company is not liable to corporate income tax for the year due to tax loss brought forward. Corporate income tax of its subsidiaries is calculated on the income before corporate income tax after adding back expenses and deducting income which are disallowable for tax computation purpose and after deducting tax loss brought forward from prior years (if any).

34. Earnings (loss) per share Basic earnings (loss) per share is calculated by dividing the net income (loss) for the year by the weighted average number of ordinary shares held by outsiders in issue during the year. Diluted earnings (loss) per share is calculated by dividing net income (loss) for the year by the weighted average number of ordinary shares held by outsiders in issue during the year plus the weighted average number of ordinary shares which would need to be issued to convert all dilutive potential ordinary shares into ordinary shares. The calculation assumes that the conversion took place either at the beginning of the year or on the date the potential ordinary shares were issued. Calculation basic earnings (loss) per share and diluted earnings (loss) per share is presented below:


122 Consolidated financial statements Weighted average Net income (loss) number of ordinary shares Earnings (loss) per share 2009 2008 2009 2008 2009 2008 (Million Baht) (Million Baht) (Million shares) (Million shares)

Basic earnings (loss) per share Net income (loss) attributable to the equity holders of the parent Effect of dilutive potential ordinary shares Warrants offered to existing shareholders Diluted earnings (loss) per share Net income (loss) of ordinary shareholders assuming the conversion of warrants to ordinary shares

204

(1,245)

6,183

6,718

-

-

208

243

204

(1,245)

6,391

6,961

(Baht)

(Baht)

0.033

(0.186)

0.032

Anti dilutive

Separate financial statements Weighted average Net income (loss) number of ordinary shares Earnings (loss) per share 2009 2008 2009 2008 2009 2008 (Million Baht) (Million Baht) (Million shares) (Million shares)

Basic earnings (loss) per share Net income (loss) attributable to the equity holders of the parent Effect of dilutive potential ordinary shares Warrants offered to existing shareholders Diluted earnings (loss) per share Net income (loss) of ordinary shareholders assuming the conversion of warrants to ordinary shares

184

184

(1,336)

7,648

7,686

-

208

243

(1,336)

7,856

7,929

(Baht)

(Baht)

0.024

(0.174)

0.023

Anti dilutive

ESOP were not included in calculation of diluted earnings (loss) per share for 2009 and 2008 since the exercise prices of ESOP are higher than the average market prices for the year.

35. Dividend paid On 5 November 2008, the meeting of the Board of Directors of the Company passed a resolution approving the payment of an interim dividend of Baht 0.05 per share to the Company’s shareholders of 7,685,517,163 ordinary shares, after deduction of 634,400,000 ordinary shares held by the Company as treasury shares, from retained earnings as at 30 September 2008, a total of Baht 384 million. As at the closing date of the share register, 7,684,598,163 of the Company’s ordinary shares were qualified to receive dividend, after deduction of 634,400,000 shares held by the Company as treasury shares and 919,000 shares disqualified to receive this dividend by the registrar (Thailand Securities Depository Co., Ltd.) from the total number of shares outstanding (7,685,517,163 shares). The total dividend paid was thus Baht 384 million.


124 37. Provident fund

38.5 Acumen had outstanding commitment in respect of the rental of satellite transponders, for which the rental is payable as follows: Million USD Payable within: 1 year 0.25 2 to 4 years 0.42

The Company, its subsidiaries and their employees have jointly established a provident fund in accordance with the Provident Fund Act B.E. 2530. The Company, its subsidiaries and their employees contribute to the fund monthly at rates of 3 to 8 percent of basic salary. The fund, which is managed by Bangkok Bank Plc., will be paid to employees upon termination in accordance with the fund rules. During 2009, the Company and its 38.6 Ji-net has entered into a 10-year agreement with TOT in order to lease on Internet protocol network subsidiaries contributed Baht 32 million, of which Baht 2 for information transmission (ending date 12 October million is from the Company, to the fund (2008: Baht 22 2011). Ji-net is obliged to comply with certain million and Baht 2 million, respectively). conditions as stated in the agreement.

38. Commitments and contingent liabilities

38.7 JTS entered into an agreement to purchase goods from an overseas company for a total of USD 3.8 million. As at 31 December 2009, the Company and its Under the conditions of the purchase agreement, JTS subsidiaries had the following outstanding commitments is to pay for the goods within approximately 3 years. and contingent liabilities. 38.1 The Company and its subsidiaries had outstanding 38.8 TJP has entered into two turn-key agreements with two counterparties, whereby TJP is obliged commitments of approximately Baht 1,233 million in to deliver work within specific periods stipulated respect of bid bonds and performance bonds issued in the agreements, which are 450 days from the by banks and financial institutions on behalf of the beginning date (due on 23 September 2006) under Company and its subsidiaries (the Company only: the first contract and within 29 December 2006 Baht 12 million). under the second contract. TJP has been unable to make delivery within the stipulated period and the 38.2 The Company had obligations in respect of its counterparties are therefore entitled to charge a guarantee of the bank overdraft facilities of penalty to TJP at a rate of 0.1 percent of the contract subsidiaries and letters of guarantee that have been value for the first contract (Baht 34 million) and at issued by banks on behalf of subsidiaries, totaling a rate of 0.2 percent of the contract value of the Baht 5 million. second contract (Baht 31 million) per each day of delay. However, the management of TJP is in the 38.3 Subsidiaries had outstanding commitments under process of requesting an extension of the deadline the letters of credit with local and overseas suppliers for delivery and they believe that negotiations for amounting to approximately USD 2.2 million and Baht such extension will be successful, because the delays 437.8 million. were caused by a delay in the delivery of an area by related agencies, and no penalty will be imposed. 38.4 ARS had outstanding commitment in respect of the Founder NSP Airtime Purchase agreement made with ACeS International Limited, the owner of ACeS 38.9 On 23 January 2010, TTT entered into an agreement to purchase telecommunications equipment from Satellite Project. ARS is obliged to pay a fee in an unrelated company amounting to approximately accordance with the agreement (ending date 1 USD 34 million. The agreement is secured by Acumen. January 2012). The fee is based on the greater of a minimum annual payment (USD 500,000) and a rate based on the volume of use of the satellite service, 38.10 On 1 May 2006, TTT entered into an agreement with TT&T a related company which is to act as a call as specified in the agreement.


125 center and arrange the printing of receipts and/or invoices (Billing) to TTT. TTT agreed to pay a monthly service fee on a basis according to the rate and condition stated in the contract. The contract is valid for one year with an option to extend for an additional year. The contract parties may terminate the contract by giving advance written notice to the counterparty of not less than 60 days. 38.11 TTT has entered into several lease agreements in respect of the lease of motor vehicles and equipment. The terms of the agreements are generally between 3 and 5 years. As at 31 December 2009, future minimum lease payments required under these non-cancellable operating leases contracts were as follows. Million Baht Payable within: Less than 1 year 51 1 to 5 years 92 38.12 Telecommunication licenses The National Telecommunications Commission (NTC) granted licenses to six subsidiaries as follows. Type of Authorised services Company Periods license Acumen Co., Ltd. Type I Internet service 25 August 2009 - 24 August 2014 Type II International Internet 8 February 2007 - 7 February 2012 gateway service Type II Very Small Aperture 30 November 2007 - 29 November 2011 Terminal (VSAT) service Triple T Broadband Plc. Type III Telecom service provider 23 February 2006 - 22 February 2026 Jasmine Internet Co., Ltd. Type I Internet service 28 July 2009 - 27 July 2014 Type I International calling card 25 January 2009 - 24 January 2010 service Jastel Network Co., Ltd. Type I Internet service 6 November 2009 - 5 November 2014 Type II Network provider 30 November 2006 - 29 November 2021 Type II International Internet 30 March 2009 - 29 March 2014 gateway service Type III International private leased 18 November 2009 - 17 November 2024 circuit Triple T Internet Co., Ltd. Type I Internet service 20 June 2009 - 19 June 2014 Jasmine Telecom Systems Plc. Type I Public telephone service 22 November 2009 - 21 November 2014 The subsidiaries have an obligation to pay license fee and comply with certain conditions as stated in the licenses. ARS, a satellite-based cellular phone service provider, is requesting a type lll license from NTC. At the present, ARS has not yet received the license.


126 39. Financial instruments 39.1 Financial risk management The Company and its subsidiaries’ financial instruments, as defined under Thai Accounting Standard No. 32 “Financial Instruments: Disclosure and Presentations”, principally comprise cash and cash equivalents, trade accounts receivable, loans, investments, bank overdrafts and short-term loans, trade accounts and notes payable, long-term loans, and long-term debts under rehabilitation plan. The financial risks associated with these financial instruments and how they are managed is described below.

Credit risk The Company and its subsidiaries are exposed to credit risk primarily with respect to trade accounts receivable and loans. The Company and its subsidiaries manage the risk by adopting appropriate credit control policies and procedures and therefore do not expect to incur material financial losses. However, since the majority of sales and services are supplied to credit worthy customers such as the companies of which the major shareholder is government. The maximum exposure to credit risk is limited to the carrying amounts of trade receivables, other receivable and loans stated in the balance sheet.

Interest rate risk The Company and its subsidiaries’ exposure to interest rate risk relate primarily to its cash at banks, bank overdrafts, short-term loans, long-term loans and long-term debts under rehabilitation plan. However, since most of the Company and its subsidiaries’ financial assets and liabilities bear floating interest rates or fixed interest rates which are close to the market rate, the interest rate risk is expected to be minimal.

Foreign currency risk Its subsidiaries’ exposure to foreign currency risk arises mainly from trading transactions that are denominated in foreign currencies. Its subsidiaries seek to reduce this risk by entering into forward exchange contracts when it considers appropriate. Generally, the forward contracts mature within one year. The balances of financial assets and liabilities of its subsidiaries denominated in foreign currencies as at 31 December 2009 are summarised below. Average exchange rate Foreign currency Financial assets Financial liabilities as at 31 December 2009 (Million) (Million) (Baht per 1 foreign currency unit) US dollar 43 54 33.37

Foreign exchange contracts outstanding of its subsidiaries as at 31 December 2009 are summarised below. Foreign currency Bought amount Contractual exchange rate (Million) (Baht per 1 foreign currency unit) US dollar 1 33.46 - 34.18


127 39.2 Fair values of financial instruments

41. Subsequent events

Since the majority of the Company and its subsidiaries’ 41.1 On 17 February 2010, the Company registered financial instruments are short-term in nature or bear the decrease in its paid-up share capital by floating interest rates. Long-term loans and long-term 1,397,727,200 shares with the Ministry of Commerce, debts under rehabilitation plan carry interest at rates in accordance with the resolution of the Meeting of close to market rates. Their fair value is not expected to the Board of Directors described in Note 30 to the be materially different from the amounts presented in the financial statements, to cancel those treasury shares balance sheets. that could not be sold during a specified period. A fair value is the amount for which an asset can be 41.2 On 26 January 2010, ARS sold an additional 200 exchanged or a liability settled between knowledgeable, million shares that it held in the Company, for a total willing parties in an arm’s length transaction. The fair of Baht 88 million. This share disposal complies with value is determined by reference to the market price the disposal agreement as described in note 27 to of the financial instrument or by using an appropriate the financial statements. valuation technique, depending on the nature of the instrument. 42. Approval of financial statements These financial statements were authorised for issue by the Company’s Board of Directors on 23 February 40. Capital management 2010. The primary objective of the Company’s capital management is to ensure that it has an appropriate financial structure and preserves the ability to continue its business as a going concern.


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