ADVANC : Annual Report 2014 by ar.advanc

Leading The Way to

Digital Life

Annual Report 2014

Advanced Info Service Public Company Limited

Embracing The

Digital Life

Strongly committed to creating the ultimate digital innovation that suits various lifestyles and improves quality of life

Annual Report 2014 Advanced Info Service Public Company Limited

Content Overview

Message from the Chairman and Chief Executive Officer Operational Highlights and Financial Highlights Vision and Mission Dividend Policy

Our Business

Business Overview Key Milestone 2014 Awards and Recognition in 2014 Investment Structure of AIS and INTOUCH Group Top Ten Shareholders Revenue Structure Industry and Competition in 2014 and Trend in 2015 Business Direction Over The Next 3-5 Years Products and Services Risk Factors

Good Corporate Governance

Summary Profile of The Directors and Management Company Secretary, Head of Internal Audit and Head of Compliance Directors and Management’ s Shareholding in The Company and Subsidiaries Management Structure Corporate Governance Our Business in A Sustainable Way Relationship with Investors Policy on Use and Disclosure of Inside Information Risk Management, Internal Control and Internal Audit Related Transactions Audit Committee Report 2014

Financial Report

Board of Directors’ Responsibility for Financial Reporting Independent Auditor’s Report Financial Statements Management Discussion and Analysis

Additional Information

General Information and Other Significant Information In this regards, investors may obtain further information from form 56-1 at www.sec.or.th or www.ais.co.th

004 006 008 009 011 012 014 016 020 021 022 023 024 027 032 042 044 058 066 067 069 070 076 083 087 088 089 177 188

Creating The Best Solution

BANKING & PAYMENT

Building strong alliance and partnership to create the innovation that best serves the digital lifestyle and promote sustainable business growth

Bill

Bill Payments

Credit Card

Scan to Pay

Providing The Best Digital Expertise Equipping all employees with the concept of service excellence to promptly answer the customers' needs and new technological knowledge to ensure more effective communication with the customers

MOVIE & MUSIC 00.00

04.30

Annual Report 2014 Advanced Info Service Public Company Limited

HEALTH & MEDICAL > HEALTH Test

GUIDE & MAP

NEWS & INFO

NEWS LIVE

Business Technology Sport

Delivering The Best Experience

Delivering the best digital experience with technology and content that serve each usage purpose

097 BPM

GO!!!MAP

EDUCATION & GAME START

Message from Chairman of The Board of Directors

The telecommunications industry in Thailand is in a state of transition. As a society, we are entering the digital age where the global telecommunication industry is moving forwards rapidly. Services such as the M2M, Cloud technology and Over-the-top (OTT) are some of the many examples that telecommunication industries rely on, and despite being in their early stages, they have potential to grow and expand. In the modern age, the change in consumer behavior demands for increased internet access on smartphones to accommodate increased social media platforms. Thus, we as a company would need to instill change to allow for extra spectrum allocation, for further development of existing telecommunication networks and technologies, as well as cooperating for maximum efficiency in supporting the rise in the demand for increased mobile data services. With long-term experience in the market, AIS possesses great competitive strength over other companies within the same industry, therefore enabling it to focus on investing in network expansion and technological development. The AIS board of directors and our management team are confident in bringing about the companyâ&#x20AC;&#x2122;s growth through increased efficiency in finance and business management, whilst maintaining transparency by acting in accordance with the principles of good corporate governance. To our shareholders, our company aims to create a valued business that is stable in the long term, and thus it shall maintain its policy in paying dividends on 100% net profit. In addition to the above business goals, we also place an emphasis on the inclusion of the community that we provide for as well as our stakeholders. We offer a variety of channels through which comments and suggestions can be received from customers, partners, employees, shareholders, investors and local communities, where we consider all feedback equally and endeavor to accommodate all stakeholder requests. All feedback will be taken into consideration by our management team, the relevant sub-committee members and the board of directors, for the maximal benefit of our stakeholders while also minimising any adverse social and environmental impact as outlined in our Sustainability Report (2014). As the Chairman, I strongly believe that AIS will continue to grow in this age of rapid change. The company shall play a major role in leading Thailandâ&#x20AC;&#x2122;s telecommunication industry forwards, in accordance with international standards for the people of Thailandâ&#x20AC;&#x2122;s better future.

Mr. Vithit Leenutaphong

Chairman of The Board of Directors

Annual Report 2014 Advanced Info Service Public Company Limited

Message from Chief Executive Officer

On July 1st, 2014, I have been appointed as a new CEO to continue the legacy of AIS, which have long been nurtured by Mr. Wichian Mektrakarn, and the many former leaders before him. I am a strong believer of sustainability, and my chief policy to achieve sustainable growth for AIS is to transform the Company from a traditional Telecom Service Provider to be a Digital Life Service Provider. As challenging as it is being aspired to be transformed to, there are three main areas in needs of continuous development which are: firstly, the 3G Network and the 4G Technology awaiting for upcoming Auction, secondly, Fixed Broadband Business, which aimed to be fully ready for commercial launch in the beginning of 2015; and thirdly, Digital Content in which we strongly aim to make it happen through constructive collaboration with our Partners in order to rightly respond to customersâ&#x20AC;&#x2122; needs. And in order to achieve this aspiration to become Digital Life Service Provider, I have put down three directives: the first is customer intimacy- accurately understand and care our customers, the second is putting emphasis and focus into the development of human force within the Company, and the last one is to fully treasure all our Strategic Partners relevant to AIS. Within only one and a half year since the very first date 3G-2.1GHz service has been launched, I am very proud particularly to the fact that AIS was able to deliver a quality 3G-2.1GHz service with nationwide network coverage in 2014. And we will continue to develop our network, especially in areas with high mobile usage, as well as to ensure our customers with the best experiences in every service available to date; and in order to fulfill continuation of this, in this 2015 year, AIS also have already prepared an investment budget of Bt. 40 Bn with our strong 3G-2.1GHz network, AIS managed to regain market share in 2014, along with the growth in mobile data service of 57%. This serves as indicative sign of a continuously rising demand for data service in the market. Hence, we expect to generate an increase of revenue from data service by 3-4% in 2015. We are determined to deliver quality services and best service support to our customers in todayâ&#x20AC;&#x2122;s era of Digital Life. The core to our service provisioning, again, is to rightly understand our customersâ&#x20AC;&#x2122; demands, and develop services that serve them relevant to their needs. Lastly, as being a part of our gracious Thai society, I do believe that one integral trigger to the full development of the Thai telecom industry depends firmly on the auction of spectrum licenses in 2015. Not only will it be another crucial forwarding step to the development of the industry, telecom users in era of Digital Life will be able to fully enjoy and have access to numerous services which will definitely enrich their everyday lives.

Mr. Somchai Lertsutiwong Chief Executive Officer

006

Operational Highlights Continued to be the No.1 mobile operator in Thailand

Revenue market share picked up from enhancing 3G-2.1GHz network

Rising demand to use mobile data

52%

Proportion of mobile data users

44% 34%

Subscriber market share serving more than 44 million numbers

46%

2013

Accelerating growth on mobile data revenue Proportion of mobile data revenue

33% 21%

Quality 3G-2.1 GHz network

2014

2014 2013

Data consumption almost tripled in 1 year Data usage (MB/number/month)

covering

97%

of population after only 1.5 years of operation

1,600MB 620MB

2014 2013

007

Annual Report 2014 Advanced Info Service Public Company Limited

Financial Highlights

Resilient revenue despite macro weakness

Improving EBITDA as 3G adoption increased

Service revenue* (THB mn)

EBITDA (THB mn)

112,435

116,556

2012

2013

117,990 2014

61,437

63,691

2012

2013

66,428 2014

* excluding interconnection charge

Generating solid profitability

Continued investment in 3G network quality and capacity

Net profit (THB mn) 34,884

36,274

2012

2013

Capex (THB mn)

36,033 2014

100% dividend payout of net profit Dividend (THB/share)

9,598

28,460

2012

2013

32,562 2014

Strong financial position in spite of higher investments Net debt/EBITDA (times)

10.9

12.2

12.0

2012

2013

2014

Net cash 2012

0.14

0.28

2013

2014

08 008

Vision

To lead and shape the multi-media communications market in Thailand and aspire to become the most-admired Digital Life Service Provider

Mission

• We commit to deliver superior and innovative services that can add value and enhance peoples’ daily lives. • We commit to enhance Customer Intimacy through the best customer experience. • We commit to drive intrapreneurship along with a professional and lively work culture for all our employees. • We commit to enhance value for our stakeholders through Sustainable Development and creating value to society through Creating Shared Value (CSV).

009 09

Annual Report 2014 Advanced Info Service Public Company Limited

Dividend Policy The Company aims to pay dividend at least 100% of net profit twice a year. The first of which shall be paid as interim as a result of operation during the first half of the year as approved by the Board of Directors and will be reported to the next general meeting of shareholders whereas the remaining thereof as annual payment which shall be approved by shareholdersâ&#x20AC;&#x2122; meeting as a result of operation in the second half year. As regards each subsidiary, dividend payment shall be based upon its operating results, financial conditions and other material factors.

In all cases, dividend payment shall be depending on cash flow, investment plan including any other future obligations of the Company and/or subsidiaries. Such dividend shall not exceed the retained earnings of the Company financial statements nor adversely affect the Company and subsidiaries ongoing operations.

Historical dividend in 5 consecutive years is as follows: Historical dividend

2010 2011 2012 2013 2014

Total Dividend Payment (Baht per share) 12.92 8.43 10.90 12.15 12.00

1. Interim Dividend

3.00

4.17

5.90

6.40

6.04

2. Annual Dividend

3.92

4.26

5.00

5.75

5.96

3. Special Dividend

Dividend Payout Ratio

6.00 - - - 187%

113%

93%

99.58%

99.01%

010

Our Business

011

Annual Report 2014 Advanced Info Service Public Company Limited

Business Overview Advanced Info Services Plc. (AIS) is the leading mobile operator in Thailand. Our core businesses include domestic mobile services, international direct dialling (IDD) services, and international roaming services. In 2014, we registered more than 44 million subscribers and generated 52% of market share by revenue. In the following year, we will provide fixed-broadband to deliver convergence service to customers as their behaviour is moving forward to digital life. AIS currently operates mobile service on both 2G and 3G technologies. The 2G service is operated on the 900MHz and 1800MHz frequency under the BuiltTransfer-Operate contracts with TOT and CAT, expiring in 2015 and 2013,* respectively. The commercial launch of 3G services on the 2.1GHz spectrum started in May 2013 under a 15-year license issued by the National Broadcasting and Telecommunications Commission (NBTC). Today the 3G service is available nationwide, covering 97% of population, and we are continuing on building 3G capacity to support the increasing demand of data usage.

Our sustainable business strategy focuses on transforming from “Telecom service provider” to “Digital life service provider” to suit the lifestyle of people in digital era. There are three elements that we are focusing on. First, we continue to expand and develop 3G&4G mobile network to prepare for the growing demand of mobile data. Second, we will provide fixed-broadband service, as behaviour of customers are shifting toward “always connected” whether they are in or out of their premises. Last, AIS will find and develop new digital contents under partnership model such as games, financial transactions and M2M.

Mob ile

B ed B Fix

Digital Life Service Provider

D ig it

al C o nte nts

Remark: *1800MHz BTO contract expired in 2013 and the NBTC issued a temporary measure to enforce service continuation until July 2015

012

Key Milestone 2014 January • AIS 3G 2100, in collaboration with Myanmar Posts and Telecommunication, launched the very first data roaming service in Myanmar.

April

• AIS together with 11 leading Asia Pacific mobile operators from Bridge Alliance established the region’s largest Machine-to-Machine (M2M) alliance to offer a “One Stop Shop” experience for M2M deployment across the Asia Pacific region.

• AIS, SingTel Group, and Samsung announced partnership programs in retail collaboration i.e. the direct carrier billing to allow its post-paid and pre-paid customers to buy mobile devices with AIS / SingTel service packages from Samsung stores. The purchase amount will simply be charged to their mobile phone airtime bills or deducted from their prepaid account. Also, customers will be able to access selected services directly on the phone without having to download the apps.

February

May

• AIS 3G post-paid unveiled MULTISIZE SIM, the special SIM for every smart device.

March • AIS launched “AIS mPAY Rabbit Shop” in 5 BTS stations to comfort its customers to change their own SIM to AIS mPay Rabbit SIM or to buy smart devices that support AIS mPay rabbit. mPay rabbit shops currently are located at Victory Monument, Siam, Chong Nonsi, Phayathai, and Saladaeng stations. • AIS kicked off the campaign “AIS Let’s Goal Brazil 2014” for customers, with a data package starting from 199 baht, to view all 64 World Cup matches on mobile phone any time and place.

• AIS announced its success in 3G 2100 network expansion reaching nationwide coverage within 1 year, wider than existing 2G network and faster than the target required by the National Broadcasting and Telecommunication Commission (NBTC).

June • AIS in collaboration with SingTel Group debuted “AIS Future Cube” at Central World. Customers can experience the 3D virtual communication which virtualizes the place in conversation just like they are in the same place. • AIS and Executive Cinema Corporation Co.,ltd jointly debuted the “Embassy Diplomat Screen” movie theater, a 6-star movie premium theater in Thailand. AIS customer and partners will get a privilege and discount.

013

Annual Report 2014 Advanced Info Service Public Company Limited

• AIS 3G 2100 offered an exclusive FIFA world cup for its customers, whose data package starting from 199 baht, to enjoy watching all football matches by “AIS ON AIR” application on mobile phone in perfect HD resolution. • The Board of Directors appointed Mr. Somchai Lertsutiwong as director and member of executive committee in replacement of Mr. Wichian Mektrakarn who took early retirement.

September • AIS, in collaboration with Moxtra, debuted “Mobile Collaboration Tools by Moxtra”, a mobile-centric social collection and collaboration application that allows corporate and SME customers to manage, present, and share personal and professional files publicly or within the selected group.

November

July • The Board of Directors appointed Mr. Somchai Lertsutiwong as Chief Executive Officer in replacement of Mr. Wichian Mektrakarn who took the early retirement. • AIS launched “Serenade Emerald” to expand service quality experiences and special privileges from more than 10,000 shops throughout the country to customers or 3 highest customer groups who have total expense of more than 900 baht.

• AIS launched “YOU! mobile”, a new concept of online mobile services that gives customers freedom to design their own package and later swap between the data and voice services.

• AIS opened up the fifth call center operations office at the Nongkhai province for the disability. AIS aims to create jobs for disabled persons continuously. • AIS and Assumption University (ABAC) established a joint project called “Digital Life by AIS @ ABAC” and “ABAC connect” application as a new communication channel for ABAC students. AIS also provided free wifi for all campus with 100% capacity. • AIS debuted “Roam Fair”, an automatically refund roaming system for both pre-paid and post-paid customers who do not use their subscribed package. • AIS and Ookbee expanded e-book market to the next level by proposing the first audio book in Thailand.

August • AIS together with CIMB Thai Bank Public Company Limited (CIMB) announced the collaboration to develop a new banking solution on mobile phone called “Beat Banking” where the customers can receive 0.5% higher-than-normal interest rate for their savings or pay bill, transfer, and withdraw money 24 hours. • AIS and Microsoft have signed a partnership agreement to provide a public cloud platform for corporate and SME customers with affordable prices and world-class IT infrastructure management and security by Microsoft.

December • AIS launched “Unlimited Data Roaming” package for traveler, covering 80 countries worldwide. And, AIS No Worry Data Roaming Service also provided guarantee to customer not to worry about bill shock.

014

Awards and Recognition in 2014 Corporate Reputation Awards

• “Superbrands 2014” from Superbrands for being quality brand which has been accepted and trusted among Thai consumer. AIS is the only telecom company in Thailand to receive this awards of honor

• “Thailand’s Top Corporate Brand Value 2014” for telecom sector from Faculty of Commerce and Accountancy of Chulalongkorn University

• “The Most Powerful Brands of Thailand 2014” for mobile network industry from Faculty of Commerce and Accountancy of Chulalongkorn University

• “The Most Innovative Implementation of Automatic Service in IVR 2014”, at the AVAYA User Conference, USA (awarded May 2014), and “Best Customer Experience Management of the Year 2013”, at the Asia Pacific Customer Service Consortium (APCSC), Hong Kong.

Annual Report 2014 Advanced Info Service Public Company Limited

015

Management and Performance Awards

• “Telecom Service Provider of the Year” and “Mobile Service Provider of the Year” in 2014 from Frost and Sullivan, the global leader in market research analysts and economic and investment consultant

• “Best Investor Relations Awards” from SET Awards 2014 and “SET Awards of Honor” for the excellent performance in Investor relations for 3 consecutive years

• “Thailand’s ICT Excellence Awards” for high reliability in IT & telecom application development projects for its Supernova and Equinox Intelligent Platform from the Thailand Management Association (TMA)

• “Best Public Companies 2014” for five consecutive years from Money and Banking magazine

016

Investment Structure of Advanced Info Service Plc. Advanced Info Service Plc. 4,997.46 Million Baht Registered Capital and 2,973.10 Million Baht Paid-Up Capital

99.99%

Advanced Contact Center Co., Ltd.

Advanced MPAY Co., Ltd.

Advanced Magic Card Co., Ltd.

AIN GlobalComm Co., Ltd.

Call center service

Service provider of payment business via mobile phone

Distributor of cash card business

International telephone service gateway

250 million baht

200 million baht registered capital and 100 million baht

272 million baht paid-up capital

300 million baht paid-up capital

99.99%

paid-up capital

99.99%

98.55%

Advanced Wireless Network Co., Ltd.

MIMO Tech Co., Ltd.

Digital Phone Co., Ltd.

Network operator, telecom service operator and computer system provider. Currently, AWN received an Internet License Type I, Telecommunication Business License Type III, and 2.1GHz License from the NBTC

Operate IT, and content aggregator businesses

Service provider of digital mobile phone network in GSM 1800MHz frequency

paid-up capital

1,350 million baht

50 million baht

paid-up capital

3,655.47 million baht paid-up capital

51.00%1) Advanced Datanetwork Communications Co., Ltd. Service provider of online data communication service via telephone landlines and optical fiber

957.52 million baht paid-up capital

Notes : 1) The remaining 49% of shares, holding by person who has not conflict of interest. 2) The dissolution of Advanced Internet Revolution Co.,Ltd. (AIR) as approved by the Board of Director Meeting no.7/2014 dated 4 August 2014 is now under liquidation process. 3) The dissolution of Mobile Broadband Business Co.,Ltd. (MBB) and Advanced Mobile Broadband Co.,Ltd. (AMB) is now finished. 4) Bridge Mobile Pte. Ltd. (BMB) has reduced its registered and paid-up share to 9 million share and 9 million baht respectively (source: Accounting and Corporate Regulatory Authority (ARCA)). In this regards, such reduction was not change the percentage of investment of the Company. 5) On 16 September 2014, Super Broadband Network Co.,Ltd. has transferred its 29% stake in Information Highway Co.,Ltd.to Advanced Broadband Network Co.,Ltd. 6) Registered its share capital addition from 1 million baht to 15 million baht on 19 January 2015.

017

Annual Report 2014 Advanced Info Service Public Company Limited

As of 19 January 2015

99.99%

99.98%

99.99%

Super Broadband Network Co., Ltd.

Wireless Device Supply Advanced Internet Co., Ltd. Revolution Co., Ltd.2)

Fax Lite Co., Ltd.

Network operator for international service and international telecom service operator i.e. international & national internet gateway etc.

Importer and distributor of handset and accessories

Service provider of internet

Operate in acquiring and/or lease building, and related facilities related to telecommunication business

300 million baht

50 million baht

240 million baht

1 million baht

paid-up capital

99.98% Advanced Broadband Network Co., Ltd. Currently not start the operation

29.00%

Information Highway Co., Ltd. Transmission network provider

50 million baht registered capital and 12.5 million baht paid-up capital

15 million baht 6) paid-up capital

paid-up capital

20.00%

10.00%

House for Bridge Mobile Pte. Ltd. Clearing Number Portability Co., Ltd. Jointly invested, provide international roaming service (incorporated in Singapore)

Jointly invested, Operate the information system and the centralized database for the mobile portability service

9 million us dollars4)

2 million baht

paid-up capital

018

INTOUCH Groupâ&#x20AC;&#x2122;s Investment Structure Intouch Holdings Plc 1),2) Advanced Info Service Plc 2)

40.45%

Thaicom Plc 2)2)

Satellite services

Telephone services abroad

Advanced Wireless Network Co., Ltd. 99.99%

IPSTAR Co., Ltd.

100%

Wireless Device Supply Co., Ltd.

99.99%

IPSTAR New Zealand Ltd.

100%

Advanced Contact Center Co., Ltd. 99.99%

IPSTAR Australia Pty Ltd.

100%

Advanced MPAY Co., Ltd.

99.99%

Advanced Magic Card Co., Ltd.

99.99%

IPSTAR International Pte. Ltd.

100%

AIN GlobalComm Co., Ltd.

99.99%

IPSTAR Global Services Co., Ltd.

100%

Super Broadband Network Co., Ltd. 99.99%

IPSATR Japan Co., Ltd.

100%

MIMO Tech Co., Ltd.

99.99%

Star Nucleus Co., Ltd.

100%

Fax Lite Co., Ltd.

99.98%

Spacecode LLC

Orion Satellite Systems Pty Ltd.

Advanced Internet Revolution Co., Ltd.3) 99.99%

TC Broadcasting Co., Ltd.

Advanced Broadband Network Co., Ltd. 99.98%

International Satellite Co., Ltd.

Information Highway Co., Ltd. Digital Phone Co., Ltd. Advanced Datanetwork Communications Co., Ltd.

Shenington Investments Pte Ltd.1) Lao Telecommunications Co., Ltd.

100%

70% 99.99% 100%

29% 98.55% 51%

Clearing House for Number Portability Co., Ltd.

20%

Bridge Mobile Pte. Ltd.

10%

Local Wireless Telecommunications

Satellite and International Businesses

51% 49%

019

Annual Report 2014 Advanced Info Service Public Company Limited

As of 31 December 2014 41.14% Internet and media services DTV Service Co., Ltd.

99.99%

CS LoxInfo Plc2)

42.07%

24%

Matchbox Co., Ltd. 5)

99.96%

Ookbee Co., Ltd.

22.26%

I.T. Applications and Services Co., Ltd.

99.99%

Computerlogy Co., Ltd.

25.01%

Intouch Media Co., Ltd.

99.99% 99.99%

Meditech Solution Co., Ltd.

Teleinfo Media Plc

99.99%

Touch TV Co., Ltd.

AD Venture Plc

99.99%

Joint Venture Kantana and Intouch

Cambodian DTV Network Ltd.

50%

100% ITV Plc 4)

52.92%

Artware Media Co., Ltd.

99.99%

Notes : 1) Holding Company 2) Listed Company on the Stock Exchange of Thailand 3) On process of liquidation 4) The Board of Governors of the Stock Exchange of Thailand has resolved to delist ITVâ&#x20AC;&#x2122;s common stocks, effective 24 July 2014 onwards. ITV is involved in a legal dispute with the Prime Ministerâ&#x20AC;&#x2122;s Office, which is currently under arbitration. 5) MB is planning to cease its operations as it has been posting continuous losses.

Other Businesses Venture Capital

Others

020

Top Ten Shareholders Top Ten Shareholders as of 18 August 2014, The latest book closing date for the right to receive dividend, are as follows: No.

Name INTOUCH HOLDINGS PLC *

HSBC (SINGAPORE) NOMINEES PTE LTD

THE BANK OF NEW YORK MELLON

5 7

SINGTEL STRATEGIC INVESTMENTS PTE LTD THAI NVDR CO.,LTD.

LITTLEDOWN NOMINEES LIMITED

STATE STREET BANK EUROPE LIMITED

THE BANK OF NEW YORK (NOMINEES) LIMITED

SOCIAL SECURITY OFFICE (2 CASE) CHASE NOMINEE LIMITED 15

Total

No. of Shares Held % of Shareholding 1,202,712,000 40.45 693,359,000

23.32

78,659,800

2.65

152,130,471

50,852,638 50,122,604 42,596,730 39,940,300

5.12

1.71 1.69

1.43 1.34

26,570,900 0.89 26,308,489

0.88

2,363,252,932 79.49

Source : Thailand Securities Depository Company Limited

Major shareholder whose behavior can influence when determining policy or handling operation, are 1. Intouch Holdings Plc., major shareholders of Intouch Holdings Plc. as follows:

Name

No. of Shares Held % of Shareholding

Aspen Holdings Ltd.1) 1,334,354,825 2) 41.62

On the list of shareholders provided by the Department of Business Development, Ministry of Commerce, information as of 7 January 2015, Aspen Holdings Limited is a company incorporated in Thailand and 99.99% owned by Anderton Investments Pte Ltd., Singapore. 2) Shareholding as of 27 August 2014, the latest book closing date

2. SingTel Strategic Investments Pte Ltd holds 23.31% directly in AIS, and 0.01% via OCBC Nominees. The shareholder of SingTel Strategic Investments Pte Ltd is

Name % of Shareholding

Singtel Asian Investments Pte Ltd 100.00

*Singtel Asian Investments Pte Ltd is 100% hold by Singapore Telecommunication Limited (Source: Accounting and Corporate Regulatory Authority (ARCA), Singapore as of 19 January 2015

Agreements between major shareholders and the Company concerning topics which affect the issuance of securities or management of the Companyâ&#x20AC;&#x2122;s operations.

- None -

021

Annual Report 2014 Advanced Info Service Public Company Limited

Revenue Structure Revenue structure from providing service & sales income in AIS group to the third party within 3 years Service/Product

Operation By

% Holding of 2012 2013 2014 shares as at 31 Dec 14 Million Baht % Size Million Baht % Size Million Baht % Size

Mobile phone service â&#x20AC;˘ Mobile phone services Advanced Info Services Plc. & rental and call Advanced Wireless Network Co., Ltd. center services Digital Phone Co., Ltd. AIN Globalcomm Co., Ltd. Advanced MPAY Co., Ltd. Advanced Contact Center Co., Ltd. â&#x20AC;˘ Construction income Advanced Info Services Plc. from the agreements Digital Phone Co., Ltd. for operation Advanced Datanetwork Communication Co., Ltd.*

99.99 98.55 99.99 99.99 99.99

98.55 51.00

Sub-total Mobile phone sales

133,379.97 87.88 130,699.18 86.80 125,061.24 Advanced Info Services Plc. Advanced Wireless Network Co., Ltd. Wireless Device Supply Co., Ltd.

99.99 99.99

Sub-total Data network and broadband service

22,971.08 81.02 99,504.58 66.08 26,708.27 17.88 1 - - 23,216.54 15.42 94,478.94 63.37 702.85 0.46 441.47 0.29 27.19 0.02 3,393.72 2.24 3,455.66 2.30 2,873.93 1.92 170.25 0.11 309.55 0.21 368.75 0.25 4.97 - 4.94 - 3.90 5,584.22 3.68 3,639.60 2.42 600.26 0.40 543.12 0.36 126.84 0.08 - 9.76 0.01 - - - -

Advanced Datanetwork Communication Co., Ltd.* Super Broadband Network Co., Ltd. Advanced Internet Revolution Co., Ltd.

Sub-total

51.00 99.99 99.99

83.74

519.18 0.34 516.32 0.34 8.38 0.01 - - 3,484.89 2.31 15,877.15 10.63 17,241.80 11.36 15,113.31 10.04 7,528.74 5.04 17,760.98 11.70 19,114.52 12.69 23,414.27 15.68 260.96 0.17 155.43 0.10 24.40 0.02 308.28 0.20 416.31 0.28 786.18 0.53 75.24 0.05 192.38 0.13 42.96 0.03 644.48 0.42 764.12 0.51 853.54 0.58

Grand Total

Remarks : * Advanced Datanetwork Communication Co., Ltd is an indirect subsidiary.

151,785.43 100.00 150,577.82 100.00 149,329.05 100.00

022

Industry and Competition in 2014 and Trend in 2015 Industry and Competition in 2014 The year 2014 is the second year in which mobile operators have been providing services on the 2.1GHz spectrum under the licensing scheme, in addition to other spectra which are under the BTO agreements for operations. Operators have been attracting customers to the 2.1GHz spectrum which are run for both 3G and 4G. There has been a concentration in marketing campaigns to encourage customers, particularly the mid- to low-tier segments, to adopt 3G-enabled handsets. To support that, operators started to bring in various handsets costing less than THB 5,000 to the market. As these new mid-tier handsets were successfully sold, operators found that the market was more urging to be online -- data uptake has tripled in 1 year --than concerning about handsetsâ&#x20AC;&#x2122; brands. However, from the heightened competition, ARPU trends of all operators are sloping downward from the decrease in price per unit and more package-bundled discounted handsets. With the effect from political uncertainties during the first half of the year, the overall industry grew less than 2%. Regulatory issue in 2014 has been the key moving and debatable factor. In July 2014, there was a postponement of the 1800MHz and 900MHz spectra, which caused a one-year extension of the 1800MHz remedy period until July 2015. The remedy period was for the continuity in providing services to protect public benefits and to seamlessly secure customers subscription while the spectra are to be allocated.

Mobile Industry Trend in 2015 The competition is expected to remain intense as operators continue to launch campaigns to attract customers to use 3G. Cheaper 3G-enabled smartphones and featured phones bundling with persuasive packages to encourage 3G adoption will approach the low end customers which are the majority of the country. However, it is expected that operators will maintain rational pricing while keeping improving their networks to serve the strong data consumption growth. Beside capacity investments, operators will also seek partners to supply more digital contents, which will generate a new form of revenue, to foster the digital life. In addition, we expect that the NBTC will hold the delayed auction midst 2015 on both 1800MHz, which has been under the remedy period, and 900MHz which will expire in September 2015. The auction will develop new dynamics in the industry as operators will be able to invest in 4G in addition to the current 3G services. We also expect that proportion of 4G - enabled handsets will be about 10% of new handset sales next year. The investments in network expansion from the auction will not only benefit customers from more advanced and better services, but will also create more job opportunities and higher income in the telecom and other related industries. This will drive the country forward to reach a new technology horizon so as to enhance the countryâ&#x20AC;&#x2122;s competitive edge.

023

Annual Report 2014 Advanced Info Service Public Company Limited

Business Direction Over The Next 3-5 Years Over the next 3-5 years, the behavior shift of consumers toward digital lifestyle will change the face of telecom business in Thailand from today. Customers will easily and quickly reach news, information, and entertainment media to fulfill their needs in many ways through more advanced services and networks provided by operators. For AIS, we find this as a compelling opportunity to transform ourselves to be a “Digital Life Service Provider” who focuses on servicing the always-connected lifestyle via our quality networks -- our strong core fundamental. To achieve that, we put an emphasis on 3 key strategic elements: mobile services, fixed broadband services, and digital contents.

Mobile Services Remain Our Core Business Currently, mobile penetration in Thailand has climbed up to 140% and is expected to grow further with the acceleration of data adoption. This drives AIS’ determination to continuously enhance our 3G-2.1GHz capacity to serve the rapid increase in customer usage. The change toward digital consumption also means the 4G technology will become more prevalent in the near future. This prescribes the importance of additional spectrum requirements, in particular the 1800MHz and 900MHz that will soon be available for auction.

Strengthening Mobile with Fixed Broadband In early 2015, AIS will start a fixed broadband business, providing internet to households to respond to customer usage both in and out of homes. AIS can leverage from extensive amounts of high-quality fiber optics (FTTx) nationwide deployed under 3G-2.1GHz network, which can provide higher speeds on both upload and download. As the market penetration remains low, this business will develop into a new important source of revenue for AIS as we plan to become one of the major providers in the market. Ultimately, this business will create defensive value to our large subscriber base of mobile business going forward.

Creating Various Innovations Via Digital Contents A variety in digital contents will be an essential propeller for AIS as a Digital Life Service Provider. Digital contents will be a medium from which we can generate a new form of revenue, differing from the current voice and data services. AIS will focus on partnering with various content providers such as football broadcasting and reading platform contents to support creating an integrated digital environment. This will change the ordinary way of data consumption unprecedentedly. Due to the accelerating data uptake trend, it is a crucial indication for AIS to seek new and interesting contents to serve high-demand customers. This will include not only entertainment media but also games, cloud computing, online financial transactions and machine to machine services, which will certainly elevate the modern daily lifestyle. AIS will emphasize on 3 key dimensions. 1) Customers, who are our highest priority to run the business. We target to get our customer to “love” us through our quality and privileges we tenderly offer. 2) People. we would like to motivate our people to constantly self-improve and adapt a new working culture to become dynamic, imaginative, and delighted. All of which is to achieve extraordinary results and breakthrough solutions. 3) Partners, AIS really puts importance on “Ecosystem” to reach multi ability-enriched telecom collaboration. With our large subscriber base, our partners will be able to exercise their expertise to match our customers’ needs, which will sustainably bring growth to both AIS and our partners. These are new foundations of AIS to become the front-running organization providing digital life services. Growth to be seen over the next 3-5 years is our long-term engagement. We keep committing our philosophy Quality DNAs which is to deliver quality devices via our best national-wide network with innovative applications and services through our fundamental of “quality”.

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Products and Services In 2014, AIS fully operates on 3G network nationwide, with 21,300 base stations in all provinces covering more than 97% of Thailand population. We currently serve 44 million subscribers, of which 89% are prepaid subscribers. In the past year, we have seen the increasing demand for mobile data in every segment of customers. Hence, we continue to develop our products and services to suit the different needs and behavior of various segments. The main products and services are summarized below.

AIS Super Combo

To encourage the use of mobile data on quality smartphones with reasonable price in mid-tier segment, we introduced the co-branded 3G mobile phone concept named ‘AIS Super Combo’. This is done through the co-operation with exclusive mobile phone manufacturer and bundle the package with the phone for prepaid and post paid.

We also customize the new Myanmar IVR service for Myanmar SIM is an example. Furthermore, we offer a new innovation product called “YOU! Mobile” which is designed for customers who prefer customization of design their own package and hence are able to swop the unused voice and data without extra charges.

Social SIM AIS captures the potential growth revenue from the increasing popularity of social media by designing various packages to match each type of usage. The packages include “Unlimited Social SIM” for social application users, “Smartphone SIM” for data users on smartphone, “Facebook SIM” for Facebook lovers, for instance. These enable customers to purchase and subscribe to packages that match their usage behavior to get the best usage and most valuable package.

Bundling Package AIS offers attractive devices bundling with package including voice and data to capture growing demand of smartphone in various segments from mid-end to high-end. We offer campaigns such as “AIS Super Deal” to offer 3G smartphone at special price from a wide range of world leading brands, such as Apple, Samsung and Nokia bundling with choice of packages.

Segmented SIM We offer differentiation of SIM, packages and services to a wide range of customer groups such as students, foreign workers or tourists. “AIS S-Cool SIM” launches for school students, while “AIS U-SIM” targets university students. “AIS Mengalaba” launches for Myanmar users, “AIS Suasaduei” tailors for Cambodian customers and “AIS Traveler SIM” targets tourists. AIS customizes SIM cards, packages and services for each segment to cover as much of our customersegment and usage experiences as possible.

International Roaming In the past year, AIS has been providing both voice and data roaming services and we have developed the software to prevent mobile data leakage and bill shock to ease the customers’ mind. For different behavior of users, we have offered many packages and products with reasonable price. Currently, we are providing roaming service in 217 countries around the world.

Annual Report 2014 Advanced Info Service Public Company Limited

Content and Partnership AIS has continually developed multiple contents and applications with partners, including GMM Grammy, CTH, RS and CIMB to serve the need of customers in the digital era and also to generate a new stream of revenue. In 2014, AIS offered multiple exclusive contents and services on mobile, including the World Cup, the English Premier League and Hormones The Series to deliver entertainment content, and CIMB-Beat Banking to provide convenience in mobile banking service.

025

Customer Relation Management and Customer Experience Catering to the rapid growth of the smartphone market and the wide adoption of 3G-2.1GHz, AIS continues to move forward in providing service excellence for the new digital era. Expanding to 68 locations nationwide this year, AIS Shop has been reinvented as an “Experience Center”. With a new design and a new concept. AIS Shop aims to serve as a one-stop shop for a complete digital lifestyle by providing smartphone gurus and a variety of service innovations. In addition to the recent payment kiosks and

Distribution Channels

AIS distributes products and services through several channels including AIS shop of more than 55 locations, nationwide franchise dealers “Telewiz” and “Telewiz Plus” more than 450 stores, 25,000 local retailers, mobile phone and IT shops (such as Jaymart, TG, Banana IT, IT City), modern trade chain stores (such as Tesco Lotus, Big C, Powerbuy, 7-11) in total of more than 10,000 locations. AIS also promote use of more than 400,000 spots of electronic top-up channels for prepaid service such as online money top-up, ATM, and mPay. In 2014, AIS has an aim to strengthen “3G Service Point’s” channel by working with 1,000 retail agents to upgrade their service, cover all districts nationwide. At the same time, in ‘Telewiz’ and ‘Telewiz plus’, the new innovative ‘Cellebite’ has been used to provide data transfer service such as phone numbers, images, text and music from the customer’s old devices to the new one. And, for improved convenience of customers, Telewiz Plus has been equipped with an effective queuing system and payment kiosks.

smart tables, other new initiatives for self-service convenience this year include the “Service Vending Kiosk.” The first of its kind in Thailand, this pioneering service provides such leading features as lucky number and pretty number selection with new SIM purchases, the ability to request the same number for a new SIM, a SIM size change service for different devices, online registration for prepaid users, and 3G upgrade for all SIM types, with many more features to come. The kiosk is currently available in 40 AIS Shops nationwide. Also this year, 215 members of staff have been developed into smartphone gurus and experts, ready to provide professional, helpful and caring assistance to AIS customers.

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The Advanced Contact Center (ACC) also continues to invest in service innovation. New initiatives this year include the “Dynamic IVR Menu Service,” the automated voice response system that can be customized to suit the customer’s usage and profile. For example, the system can recommend the most appropriate internet package based on the customer’s actual usage and it can automatically greet customers by their name for a truly personalized greeting. New technological developments have significantly increased ACC’s capability to accommodate inbound call volume, up by 12% from last year, with IVR now accounting for 72% of all call services. Revenues generated from VAS and Internet package subscriptions via IVR are also 40% higher than last year, with the Customer Satisfaction Index (CSI) for IVR service increasing from 64% to 67% YoY. In addition, AIS has opened up a new dimension in engaging customers via digital channels this year by launching a new official “LINE” account, “AIS Privilege,” delivering selected privileges aimed at all lifestyles right to the customer’s device. The account has been very well-received, with a total of 8.06 million “friends” already enjoying attractive monthly surprise campaigns, such as a free Sundae at McDonald’s, free Pretzel at Auntie Anne’s, or free beverages at Black Canyon. AIS is also the first Thai operator to launch animated stickers giving our customers the opportunity to share colorful and playful messages with each other on social media. We also provide a special reward campaign for our valued customers under the theme, “Aunjai Year 6, Double Reward: Win Gold & Redeem Points”.

This year, “AIS Serenade” celebrated its 10 th year anniversary by launching two new dimensions to enhance the exclusivity offered to AIS Serenade customers. Firstly, AIS Serenade has expanded its customer base with a brand new privilege segment, “Serenade Emerald,” for customers with a minimum service period of 6 months and a spending average of at least 900 Baht per month. Secondly, AIS Serenade has opened up an opportunity for non-Serenade customers to enjoy the Serenade experience with “Serenade Group Privilege”. A Serenade Group can be formed of up to 3 mobile numbers with a combined group spending of 3,000 Baht or more for Platinum, 1,500 Baht or more for Gold, or 900 Baht or more for Emerald.

In recognition of its unique service innovations, Advanced Contact Center (ACC) was awarded “The Most Innovative Implementation of Automatic Service in IVR 2014,” at the AVAYA User Conference, USA (awarded May 2014), and “Best Customer Experience Management of the Year 2013,” at the Asia Pacific Customer Service Consortium (APCSC), Hong Kong (awarded Sep 2014).

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Annual Report 2014 Advanced Info Service Public Company Limited

Risk Factors AIS has established a proactive risk management plan to ensure that the Company continues to be viable even in unpredictable situations. As such, AIS has set up the Risk Management Committee, comprised of senior executives and the Chairman of AIS, who acts as Chairman of the committee. The committee meets on a quarterly basis in order to discuss and classify the risks to the entire organisation and to set up a precautionary action plan to manage risks at an acceptable level. The aim of such measures is to ensure that AIS achieves set targets and maintains the confidence of the shareholders and interested individuals. The Risk Management Committee submits the results of its risk management analysis to the Executive Committee, the Audit Committee, and the Board of Directors every quarter. Further detail of risk management are shown in â&#x20AC;&#x153;Risk management, Internal control, and Internal auditâ&#x20AC;?, page 70 In 2014, the factors which were identified as a risk to operational results are summarised as follows:

State Undertaken Work ACT due to the lack of submission to the Coordinating Committee for consideration under Article 22 and to the Cabinet as the authority in charge of the approval. However, the amendment procedures of the Agreement which represent administrative juristic acts are capable of being separated from the amendments to the Agreement and those amendments to the Agreement are still in force so long as they are not rescinded or invalidated by virtue of time or by other conditions. However, if the amendments of the Agreement of the Company are revoked, this may result in a shortening of the term of the Agreement and/or a higher prepaid revenue share. Nonetheless, the Company firmly believes in the principles and the grounds of the amendments of the Agreement and the Company has fully complied with the Jointly Undertaken Work Agreement and all related laws including the principles of good governance. Thus, the Company believes that there shall be no material change which shall have an impact on the Company.

Risks from Regulatory and Government Disputes Relating to Excise Tax Policies The Jointly Undertaken Work Agreement between State Enterprise and Private Sectors under The Private Participation in State Undertaking Work ACT B.E. 2535. (1) The Amendment of The Jointly Undertaken Work Agreement between Advanced Info Service Public Company Limited (the Company) and TOT Public Company Limited (TOT). As per the letter from The Ministry of Information Technology and Communications requesting the opinion of the Council of State on whether the amendments to the Cellular Mobile Telephone Service Agreement (the Agreement) between TOT and the Company after enforcement of the Private Participation in State Undertaken Work ACT B.E. 2535 have been made in line with the said Act and, if such amendments do not conform with the said Act, what course of action should be taken; consequently, the Council of State presented its opinion in a Memorandum which could be summarized as indicating that the Amendments of the Agreement were not legitimately carried out under the Private Participation in

(1) The Case between Advanced Info Service Public Company Limited (the Company) and TOT Public Company Limited (TOT) On 22 January 2008, TOT submitted a dispute (Case No. Black 9/2551) to the Arbitration Institute, Alternative Dispute Resolution Office, and the Office of the Judiciary, demanding that the Company pay additional revenue share of for Baht 31,463 million. On 20 May 2011, the Arbitral Tribunal unanimously resolved to dismiss the disputes citing the reason which can be summarized as the Company had lawfully paid the revenue share. Therefore, the Company has not committed a breach of the agreement and the Company does not have to pay any additional revenue share to TOT. Consequently, TOT has submitted an application to the Central Administrative Court to set aside the award of the Arbitral Tribunal. At present, the case is pending the consideration of the Central Administrative Court; the trial process may take several years to conclude.

028

If the Company loses this case, it may be obliged to pay TOT as demanded. However, the Management of the company firmly believes that this case shall reach a positive conclusion since the amount of revenue share was the same amount of excise tax paid by the Company which the Arbitral Tribunal had taken into consideration when unanimously deciding to dismiss the case. (2) The Case between Digital Phone Company Limited (DPC), A Subsidiary of the Company, and CAT Telecom Public Company Limited (CAT) CAT submitted a dispute (Case no. Black 3/2551) to the Arbitration Institute, Alternative Dispute Resolution Office, and Office of the Judiciary, demanding DPC, a subsidiary of the Company, pay additional revenue share of Baht 2,449 million under the Digital PCN (Personal Communication Network) Agreement plus penalty at the rate of 1.25 percent per month of the unpaid amount for each year calculated from the default date until full payment totalling Baht 3,410 million is made. Such claimed amount is equal to the amount of excise tax DPC paid between 16 September 2003 and 15 September 2007, and was deducted from the revenue share pursuant to the resolution of the cabinet on 11 February 2003 as is the standard practice of the telecommunications industry. On 1 March 2011, the Arbitral Tribunal resolved to dismiss the dispute citing the reason which can be summarized as the original debt had been completely paid and settled. Thus, DPC has not committed any breach and CAT cannot re-claim the alleged deficit amount, including the penalty and the value added tax. Consequently, CAT submitted a request to the Central Administrative Court to set aside the award of the Arbitral Tribunal; the procedure can take several years to conclude. If DPC loses the case, it may be obliged to pay CAT as demanded. However, the management of the Company firmly believes that this case shall reach a positive conclusion since the revenue share demanded by CAT is equal to the amount of excise tax which has already been paid by the Company according to the unanimous resolution of the Arbitral Tribunal, which dismissed the dispute.

Dispute Over Revenue Sharing from Interconnection Charge According to the Telecommunication Business Act B.E. 2544 and the Notification of NTC regarding the Use and Interconnection of Telecommunication Networks B.E. 2549, the Company has the responsibility to enter into interconnection agreements with other operators. The Company offered to provide remuneration to TOT for such interconnections, which was calculated from the net income according to the rate and calculating method of the Company. However, TOT required the Company to pay revenue share calculated from the gross amount of interconnection charges received by the Company at the rate specified in the Agreement without deduction of interconnection charges which the Company has to pay to other operators. On 26 January 2011, TOT sent a letter demanding that the Company pay the revenue share of the interconnection charges of the concession years 17-20 in the amount of Baht 17,803 million plus interest at the rate of 1.25 percent per month. However, the Company disagreed and sent a letter opposing the said claim to TOT and submitted the dispute to the Dispute Reconciliation Office, Arbitration Institute ref. no. Black 19/2554 on 9 March 2011 requesting the Arbitral Tribunal to award that TOT has no right to claim for such revenue share. At present, the case is pending consideration of the Arbitral Tribunal and may take several years to conclude. If the Company loses the case, it may be obliged to pay TOT as demanded. However, the management of the Company firmly believes that the resolution of the Arbitral Tribunal will reach a positive conclusion for the Company since it has fully complied with the law.

Dispute between Digital Phone Company Limited (DPC), A subsidiary of the Company, and CAT Telecom Public Company Limited (CAT) Regarding The Reduction of Roaming Charges between DPC and the Company. Digital Phone Company Limited (DPC) submitted a dispute (Case no. Black 27/2553) to the Alternative Dispute

Annual Report 2014 Advanced Info Service Public Company Limited

029

Resolution Office, the Thai Arbitration Institute, requesting that the Arbitration Panel set aside the allegation of CAT that DPC was in breach of agreement on the grounds that the agreement was made without approval from CAT and would terminate the agreement as stated in a letter dated 6 January 2010, and demanding that CAT pay compensation of Baht 50 million to DPC.

Dispute between Digital Phone Company Limited (DPC), A Subsidiary of the Company, and CAT Telecom Public Company Limited on Tower and Power Supply ownership

On 15 July 2010, CAT submitted a dispute (Case no. Black 62/2553) to the Arbitration Institute, demanding that DPC pay additional remuneration for concession years 10-12 to the amount of Baht 2,000 million plus penalty calculated from April 2010 incurred due to the reduction by DPC of the roaming charge rate between DPC - the Company from Baht 2.10 to Baht 1.10 during the period of 1 April 2007 - 31 December 2008 without the approval of CAT. Furthermore, on 1 September 2011, CAT submitted a further dispute of the concession year 12 (1 April 2009-15 June 2009) to the Arbitration Institute, Alternative Dispute Resolution Office, and the Office of the Judiciary (Case no. Black 89/2554) for the amount of Baht 113,211,582.68. Later, the Arbitration Institute ordered that all three disputes be considered together and, at present, such disputes are pending consideration of the Arbitral Tribunal which may take several years to conclude. If DPC loses the case, DPC may be obliged to pay CAT as demanded. However, the management of the Company believes that the ruling of the Arbitration Panel of this case shall decide in favour of DPC as DPC had informed CAT of the application of the roaming rate of Baht 1.10 per minute in July 2006, to which CAT had given written approval of such application for the period until March 2007 and had also given additional approval during the period of January 2009 to March 2009. In addition, CAT had never sent any refusal or objection to DPC during the disputed periods. The roaming rate at Baht 1.10 per minute is also in conformity with market conditions where the rate of service charge had been lowered from the previous higher roaming service charge rate. Besides, DPC had also entered into a roaming agreement with the Company using the rate of Baht 1.10 per minute as approved by the NTC.

CAT submitted a dispute (Case no. Black 8/2552) to the Arbitration Institute, Alternative Dispute Resolution Office, demanding that DPC deliver and transfer ownership of 3,343 Towers including 2,653 units of Power Supply equipment under the terms and conditions of the Digital PCN (Personal Communication Network) Agreement. After DPC failed to do so, CAT demanded that DPC pay Baht 2,230 million to CAT as compensation. DPC considers that all disputed Towers and Power Supply equipment are not included under the definition of equipment as stipulated in clause 2.1 of the Agreement of which DPC is obligated to deliver and transfer under the terms and conditions of the Agreement. The Arbitrary Tribunal unanimously resolved to dismiss all of the disputes citing the reason which can be summarised as the right of CAT to demand that DPC deliver properties which are objects of the contract cannot be exercised until 60 days after expiration of the contract. Therefore, the submission of the dispute by CAT is premature. Consequently, CAT has submitted a request to the Central Administrative Court to set aside the award of the Arbitral Tribunal. At present, the case is pending consideration of the Central Administrative Court which may take several years to conclude. Additionally, the Company considered this case as high value and if DPC loses the case, it will be obligated to pay CAT as demanded. However, in consideration of the aforementioned arguments, the management of the Company’s firmly believes that the case shall reach a positive conclusion.

Dispute Case with TOT Regarding The Mobile Number Portability (MNP) of AIS’ Subscribers Transferring to Advanced Wireless Network Company Limited (“AWN”) as The Affiliate of AIS On September 25, 2014, TOT Public Company Limited (“TOT”) submitted the dispute (Black Case No. 80/2557)

030

to the Arbitration Institute, Alternative Dispute Resolution Office, demanding the Company to pay liquidated damages commencing from the date of submission of the dispute in the amount of Baht 9,126 million, plus interest at the rate of 7.5 percent per annum including the legal fees and expenses for the arbitration process by claiming that such damage was caused by the Company to transfer its subscriber operated under 900 MHz to 2100 MHz system of AWN on the ground that the Company breach the Cellular Mobile Telephone Service Agreement (the “Agreement”) between TOT and the Company. Now the dispute in the arbitration proceedings, the management of the Company firmly believes that the outcome of the dispute is unlikely to have a significant impact on the financial statements of the Company and the Company has fully complied under the Agreement in all respects.

Dispute Case Regarding the Companies Cannot Perform to Collect All Prepaid Scribers Information of the Company under NBTC Notification Regarding Prepaid Identification According to the National Broadcasting Telecommunications Commission (“NBTC”) ordered all mobile operator operated per-paid service including the Company must collect and record all information of all Prepaid Subscribers within the specific of time and subsequently issued an order requiring an administrative fine in the amount of Baht 80,000 per day to the Company and the major 2 mobile phone operator in this telecommunication industry from July 6, 2012 until fully comply with the said order because all 3 operators have not yet fully complied with the said order. The Company has filed to the Administrative Court for the revocation of 2 NBTC Orders as the Black Case No. 1858/2554 and Black Case No. 252/2556, respectively, is now being considered by the Administrative Court. In case that the Company loses the case, the Company may have to pay an administrative fine of Baht 80,000 per day, from July 6, 2012 until the date that the Company can comply with the said order of the NBTC. However, the managements of the Company believe that this

dispute would be resolved in a good way due to the NBTC and all mobile operators had a common effort to record all prepaid subscribers information to facilitate the telecommunication business according to such order. Eventually NBTC and all mobile operators including the Company already developed 2 Snap Shot Applications for registration of Prepaid Subscriber through distributors channel on top of filling out the registration form and recording a copy of the identity card which such information will be sent to system and networks of mobile operators.

Risk to Administration Risk to IT Security With advanced technology, the service users can access their desired data via the internet from anywhere in the world and make financial transactions on mobile phones. The technological advancements allow consumers to have extra data storage capacity in addition to traditional computer memory, such as through Cloud computing, which results in a rise in the risk of data leakage. AIS has placed emphasis on preventing threats to information security. As such, the Company has established policy on the security of its computer information systems and technology, and implemented procedures for receiving-transmitting the Company’s data via portable devices through Exchange ActiveSync so as to enforce the executives and employees at all levels in the organization to comply. Training courses have been provided and information shared with employees on their computer screens so as to promote continued awareness. Data security risk assessment has been performed for important systems in accordance with the Company’s plan so as to prevent possible risk from information theft or system failure. In addition, AIS has implemented ISO 27001-Information Security Management in order to ensure Company’s data security from people, processes and procedures. Including systematic and adequate information security management system.

Annual Report 2014 Advanced Info Service Public Company Limited

Summary Profile of The Directors, Management Company Secretary, Head of Internal Audit and Head of Compliance

031

032

Summary Profile of The Directors and Management

Mr. Vithit Leenutapong

Mr. Somprasong Boonyachai

• Chairman of Board of Directors • Chairman of Leadership Development and Compensation Committee • Authorized Directors

• Vice-Chairman of Board of Directors • Member of Leadership Development and Compensation Committee • Member of Nomination and Corporate Governance Committee

Appointed 27 Mar 2013 Age 59 years

Share Ratio (%)*

Relationship with Management

Appointed 28 Mar 1994 Age 59 years

None

Highest Education

• Master of Business Administration, University of Southern California, USA

Related Training Program held by IOD

• Role of the Chairman Program (RCP) Class 34/2014 • Successful Formulation & Execution of Strategy (SFE) Class 3/2009 • Role of the Compensation Committee (RCC) Class 7/2008 • Audit Committee Program (ACP) Class 5/2005 • Directors Certification Program (DCP) Class 16/2002

Working Experiences in 5 years Listed Company 2014 - Present 2001 - Present 2001 - 2014

Chairman of Board of Directors, Chairman of Leadership Development and Compensation Committee, Authorized Directors / Advanced Info Service Plc. Director / Intouch Holding Plc. Independent Director , Member of Audit Committee / Intouch Holding Plc.

Company Limited / Other Organisation 2011 - Present 2005 - Present 1995 - 2013 2002 - 2010

Director / National Press Council of Thailand President / Thai Yarnyon Co., Ltd. Director / The Queen’s Gallery Director / Saha Thai Steel Pipe Plc. Director / The Bangkok Bank Foundation Director / Barcelona Motor Co., Ltd. Director / German - Thai Chamber of Commerce

Illegal Record in past 10 years

Share Ratio (%)*

Relationship with Management

None

Highest Education

• Master of Engineering, Asian Institute of Technology

Related Training Program held by IOD

• Role of the Chairman Program (RCP) Class 21/2009 • Director Certification Program (DCP) Class 65/2005 • Director Accreditation Program (DAP) Class 30/2004

Working Experiences in 5 years Listed Company 2010 - Present 2008 - Present 2007 - Present 2006 - Present 2002 - Present 2009 - 2011

Acting-President / Intouch Holding Plc. Chairman of Executive Committee / Intouch Holding Plc. Vice-Chairman of Board of Director, Member of Leadership Development and Compensation Committee, Member of Nomination and Corporate Governance Committee / Advanced Info Service Plc. Director / Intouch Holding Plc. Director / Thaicom Plc. Independent Director, Member of Audit Committee / Power Line Engineering Plc. Chairman of Executive Committee / Thaicom Plc.

Company Limited / Other Organisation 2004 - Present

Director / Praram 9 Hospital Co., Ltd.

Illegal Record in past 10 years None

None

Remark : As at 31 December 2014, the number of ordinary shares includes holding by spouse and minor children.

033

Annual Report 2014 Advanced Info Service Public Company Limited

Mr. Aviruth Wongbuddhapitak

Mrs. Tasanee Manorot

• Chairman of Sustainable Development Committee • Member of Leadership Development and Compensation Committee • Independent Director

• Member of Audit Committee • Member of Sustainable Development Committee • Independent Director

Appointed 12 Jul 2006 Age 66 years

Share Ratio (%)*

Relationship with Management

None

Highest Education

• Master of Business Administration, New York University, USA

Related Training Program held by IOD

• Director Certification Program (DCP) Class 8/2001 • The Board’s Role in Setting Effective Compensation Policy

Working Experiences in 5 years Listed Company 2013 - Present 2010 - Present 2003 - Present 1995 - Present 2006 - 2014 2009 - 2011

Chairman of Sustainability Development Committee, Member of Leadership Development and Compensation Committee, Independent Director / Advanced Info Service Plc. Independent Director / S&P Syndicate Plc. Director / Thai Plastic and Chemicals Plc. Director and Chairman of the Executive Director / Deves Insurance Plc. Chairman of Audit Committee, Member of Leadership Development and Compensation Committee, Independent Director / Advanced Info Service Plc. Independent director and Member of the Audit Committee / Thai Military Bank Plc.

Appointed 24 Apr 2006 Age 69 years

Share Ratio (%)*

None

Highest Education

• Bachelor of Commerce and Accountancy, Chulalongkorn University

Related Training Program held by IOD

• Director Certification Program (DCP) Class 32/2003

Working Experiences in 5 years Listed Company 2014 - Present 2006 - May 2014

Member of Audit Committee, Member of Sustainability Development Committee Independent Director / Advanced Info Service Plc. Member of Audit Committee, and Independent Director / Advanced Info Service Plc.

Illegal Record in past 10 years None

Company Limited / Other Organisation 2008 - Present 2003 - Present

Relationship with Management

Advisor / Bureau of the Crown Property Director / CPB Equity Co., Ltd. Director / CPB Property Co., Ltd.

Illegal Record in past 10 years None

Remark : As at 31 December 2014, the number of ordinary shares includes holding by spouse and minor children.

034

Mr. Surasak Vajasit

Ms. Jeann Low Ngiap Jong

• Member of Audit Committee • Chairman of Nomination and Corporate Governance Committee • Independent Director

• Director

Appointed 10 May 2006 Age 61 years

Share Ratio (%)*

Relationship with Management

None

Highest Education

• Barrister at Law, Lincoln’s Inn

Appointed 27 Mar 2013 Age 54 years

Share Ratio (%)*

Relationship with Management

• Bachelor of Accountancy, National University of Singapore

Related Training Program held by IOD

Working Experiences in 5 years Listed Company

Feb 2014 - Present 2008 - Feb 2014

Chairman of Nomination and Corporate Governance Committee, Member of Audit Committee, Independent Director / Advanced Info Service Plc. Member of Audit Committee, Member of Nomination, Corporate Governance Committee, Independent Director / Advanced Info Service Plc.

2013 - Present 2008 - Present

Director / Advanced Info Service Plc. Group Chief Financial Officer / Singapore Telecommunications Ltd.

Illegal Record in past 10 years None

Company Limited / Other Organisation 2014 - Present

None

Highest Education

Related Training Program held by IOD

• Director Accreditation Program (DAP) Class 29/2004

None

Managing partner / Rajah & Team

Illegal Record in past 10 years None

Remark : As at 31 December 2014, the number of ordinary shares includes holding by spouse and minor children.

035

Annual Report 2014 Advanced Info Service Public Company Limited

Mr. Narulcha Chittreekan

Mr. Allen Lew Yoong Keong

• Director

• Chiarman of Executive Committee • Director • Member of Leadership Development and Compensation Committee

Appointed 5 Nov 2013 Age 57 years

Share Ratio (%)*

Relationship with Management

Appointed 20 Mar 2006 Age 59 years

None

Share Ratio (%)*

Relationship with Management

Highest Education

Related Training Program held by IOD

Working Experiences in 5 years Listed Company

• Master of Public Administration, the National Institute of Development Administration (NIDA) • Director Certificate Program (DCP) Class 162/2012

2013 - Present

Director / Advanced Info Service Plc.

Company Limited / Other Organisation 2012 - Present

Senior Executive Vice President Metropolitan - Business Development / TOT plc.

Illegal Record in past 10 years None

None

• Master of Science (Management), Massachusetts Institute of Technology, USA -

2008 - Present 2006 - Present 2012 - Sep 2014

Chairman of Executive Committee, Director, Member of Leadership Development Committee / Advanced Info Service Plc. Director / Advanced Info Service Plc. Chief Executive Officer (Singapore) / Singapore Telecommunication Ltd. Executive Officer Group Digital Life and Country Chief Officer (Singapore) / Singapore Telecommunications Ltd.

Company Limited / Other Organisation

Oct 2014 - Present Chief Executive Officer Consumer Australia and Chief Executive Officer / SingTel Optus Pty Ltd.

Illegal Record in past 10 years None

Remark : As at 31 December 2014, the number of ordinary shares includes holding by spouse and minor children.

036

Mr. Ng Ching-Wah

Mr. Krairit Euchukanonchai

• Director • Member of Executive Committee

• Chairman of Audit Committee • Member of Nomination and Corporate Governance Committee • Independent Director

Appointed 10 Feb 2014 Age 65 years

Share Ratio (%)*

Relationship with Management

Appointed 26 Mar 2014 Age 60 years

None

Share Ratio (%)*

Relationship with Management

Highest Education

Related Training Program held by IOD

• Bachelor of Art in Business Administration, Chinese University of Hong Kong -

Working Experiences in 5 years Listed Company 2008 - Present 2007 - Present 2011 - 2012 2007 - 2010

Director and Member of Executive Committee / Advanced Info Service Plc. Independent Director / Pacific Textiles Holdings Ltd. Director / China Digital TV Group Holding Ltd. Independent Director / HKC International Holdings Ltd.

Company Limited / Other Organisation 2012 - Present 2007 - Present

Member of the Communication Authority / Communication Authority (CA) Director / ConvenientPower Hong Kong

Illegal Record in past 10 years None

None

• Master of Business Administration, North Texas State University, USA • Director Certification Program (DCP) Class 59/2005 • Role of the Chairman Program (RCP) Class 16/2007

Working Experiences in 5 years Listed Company 2014 - Present 2011 - 2012 2006 - 2012

Chairman of Audit Committee, Member of Nomination and Corporate Governance Committee, Independent Director / Advanced Info Service Plc. Director and Member of Audit Committee / PTT Plc. Chairman of Board and Chairman of Risk Management Committee / Krungthai Asset Management Plc.

Company Limited / Other Organisation 1998 - Present

Chairman / V Group Honda Car Co..Ltd.

Illegal Record in past 10 years None

Remark : As at 31 December 2014, the number of ordinary shares includes holding by spouse and minor children.

037

Annual Report 2014 Advanced Info Service Public Company Limited

Mr. Somchai Lertsutiwong

Appointed as Director on 27 Jun 2014 Age 52 years

• Director • Chief Executive Officer • Member of Sustainable • Authorized Director Development Committee • Member of Executive Committee Share Ratio (%)* 0.0027

Mr. Kim Siritaweechai Age 46 years

• Member of Executive Committee

Share Ratio (%)*

Relationship with Management None

Relationship with Management

Highest Education

• Master of Business Administration, Chulalongkorn University

Related Training Program held by IOD

Working Experiences in 5 years Listed Company

2014 - Present Director, Member of Sustainability Development Committee, Member of Executive Committee, Chief Executive Officer, Authorized Director and Chief Marketing Officer / Advanced Info Service Plc. Jun 2014 - Jul 2014 Director, Chief Marketing Officer / Advanced Info Service Plc. 2012 - Jul 2014 Chief Marketing Officer / Advanced Info Service Plc. 2007 - 2012 Executive Vice President - Marketing / Advanced Info Service Plc.

Illegal Record in past 10 years None

None

• Master of Business Administration, Thammasat University

Related Training Program held by IOD

• Director Certification Program (DCP) Class 114/2009

None

• Director Certification Program (DCP) Class 116/2009

2014 - Present 2010 - Present 2011 - 2014 2008 - 2011

Executive Vice President - Portfolio Management / Intouch Holding Plc. Member of Executive Committee / Advanced Info Service Plc. Senior Vice President - Portfolio Management / Intouch Holding Plc. Vice President - Portfolio Management / Intouch Holding Plc.

Company Limited / Other Organisation 2014 - Present 2013 - Present 2012 - Present

Director / I.T. Applications and Services Co.,Ltd Director / Intouch Media Co.,Ltd Director / Touch TV Co.,Ltd Director / Ookbee Co.,Ltd.

Illegal Record in past 10 years None

Remark : As at 31 December 2014, the number of ordinary shares includes holding by spouse and minor children.

038

Mrs. Suphajee Suthumpun

Mrs. Suwimol Kaewkoon

• Member of Executive Committee

• Chief Organization Development Officer

Age 50 years

Share Ratio (%)*

Relationship with Management

Age 59 years

None

Share Ratio (%)*

0.0035

Relationship with Management

Highest Education

Related Training Program held by IOD

Working Experiences in 5 years Listed Company

• Master of Business Administration, International Finance and International Accounting, Nortthrop University California, USA • Director Certification Program (DCP) Class 89/2007

2012 - Present 2011 - Present Aug - Dec 2011 2010 - 2011 2009 - 2010

Chairman of Executive Committee / Thaicom Plc. Member of Executive Committee, Member of Strategic and Organizational Review Committee and Chairman of Media & New Business / Intouch Holding Plc. Director, Chief Executive Officer / Thaicom Plc. Director, Chairman of Executive Committee, Chairman of Remuneration Committee, Chairman of Nomination and CG Committee / CS LoxInfo Plc. Member of Executive Committee / Advanced Info Service Plc. Member of Executive Committee / Thaicom Plc. General Manager, Global Technology Services / IBM ASEAN Client Advocacy Executive, Chairman’s Office / IBM Headquarters

None

• Master of Business Management, Asian Institute of Management, Philippines

• Director Certification Program (DCP) Class 102/2008

2013 - Present 2007 - Present 2007 - 2012

Chief Organization Development Officer / Advanced Info Service Plc. Member of Executive Committee / Intouch Holding Plc. Chief Customer Officer / Advanced Info Service Plc.

Illegal Record in past 10 years None

Remark : As at 31 December 2014, the number of ordinary shares includes holding by spouse and minor children.

039

Annual Report 2014 Advanced Info Service Public Company Limited

Mr. Hui Weng Cheong

Mrs. Vilasinee Puddhikarant

• Chief Operating Officer

• Chief Customer Officer

Age 59 years

Share Ratio (%)*

Relationship with Management

Age 59 years

None

Highest Education

• Master of Business Administration, University of Southern California, USA

Related Training Program held by IOD -

Working Experiences in 5 years Listed Company 2013 - Present 2010 - 2012 2009 - 2010

Chief Operating Officer / Advanced Info Service Plc. CEO International / Singapore Telecommunications Ltd. Chief Operating Officer / Advanced Info Service Plc.

Illegal Record in past 10 years None

Share Ratio (%)*

0.0001

Relationship with Management

None

Highest Education

• Bachelor of Economics, East Texas State University

Related Training Program held by IOD

• Director Certification Program (DCP) Class 134/2010

Working Experiences in 5 years Listed Company 2013 - Present 2012 - Present 2006 - 2012

Chief Customer Officer / Advanced Info Service Plc. Advisor - Customer Service / Airports of Thailand Plc. Executive Vice President - Customer and Service Management / Advanced Info Service Plc.

Illegal Record in past 10 years None

Remark : As at 31 December 2014, the number of ordinary shares includes holding by spouse and minor children.

040

Mr. Pong-amorn Nimpoonsawat

Mr.Kriengsak Wanichnatee

• Chief Finance Officer

• Chief Technology Officer

Age 52 years

Share Ratio (%)*

0.0002

Relationship with Management

None

Age 54 years

Share Ratio (%)*

Relationship with Management

Highest Education

Related Training Program held by IOD

• Master of Management, Sasin Graduate Institute of Business Administration Chulalongkorn University • Director Certification Program (DCP) Class 109/2008

Working Experiences in 5 years Listed Company 2001 - Present

Chief Finance Officer / Advanced Info Service Plc.

Illegal Record in past 10 years None

None

• Master of Science in Electrical Engineering, University of Sounthern California, USA -

Working Experiences in 5 years Listed Company 2013 - Present 2012 - 2013 2006 - 2011

Chief Technology Officer / Advanced Info Service Plc. Executive Vice President - Mobile Network Implementation / Advanced Info Service Plc. Executive Vice President - Nationwide Operations and Support / Advanced Info Service Plc.

Illegal Record in past 10 years None

Remark : As at 31 December 2014, the number of ordinary shares includes holding by spouse and minor children.

041

Annual Report 2014 Advanced Info Service Public Company Limited

Company Secretary, Head of Internal Audit and Head of Compliance Mr. Chavin Chaivatcharaporn

Ms.Nattiya Poapongsakorn

• Company Secretary

• Assistant Vice President, Investor Relations

Appointed 3 Jan 2013 Age 42 years

Appointed 1 Apr 2013 Age 39 years

Share Ratio (%)* None

Share Ratio (%)*

Highest Education

Relationship with Management None • Master of Law (LL.M), University of Pennsylvania, USA

Related Training Program held by IOD

• Role of the Compensation Committee (RCC) • Director Certification Program (DCP) 192/2014 • Role of Chairman (RCP) • Anti-Corruption for Executive Program (ACEP) 10/2014 • Fundamental Practice for Company Secretay (FPCS 29/2014) • Company Secretary Program Class 51/2013

Working Experiences in 5 years Listed Company 2013 - Present 2010 - 2013

Company Secretary / Advanced Info Service Plc. Assistant Vice President-Legal / Advanced Info Service Plc.

Company Limited / Other Organisation 2003 - 2010

Associate / Hunton&Williams Thailand Ltd.

0.00025

Relationship with Management None

• Master of Technology Management, Washington State University,USA • Master in Finance, Chulalongkorn University

Related Training Program held by IOD -

Working Experiences in 5 years Listed Company 2013 - Present 2011 - 2013 2008 - 2011

Assistant Vice President, Investor Relations / Advanced Info Service Plc. Acting Assistant Vice President, Investor Relations / Advanced Info Service Plc. Investor Relations Manager / Advanced Info Service Plc.

Illegal Record in past 10 years None

Mrs.Suvimon Kulalert Appointed 1 Jan 1999 Age 54 years • Chief Audit Executive

Share Ratio (%)* 0.0001 Relationship with Management None

Highest Education

• Master of Business Administration, Track Management Information System, Oklahoma City University, USA • Professional Certified Public Accountant, Certified Internal Auditor, Certificate in Risk Management Assurance

Related Training Program held by IOD

• Director Certification Program (DCP) Class 136/2010

Working Experiences in 5 years Listed Company

1999 - Present Chief Audit Executive / Advanced Info Service Plc.

Illegal Record in past 10 years None

Remark : As at 31 December 2014, the number of ordinary shares includes holding by spouse and minor children.

042

Directors and Managementâ&#x20AC;&#x2122;s Shareholding in The Company and Subsidiaries

As of 31 December 2014, The number of ordinary share and debenture includes holding by spouse and minor child AIR DPC ADC ACC

31/12/2013

Ordinary share

31/12/2014

31/12/2013

Ordinary share

31/12/2014

Ordinary share

31/12/2013

Grant (+)

31/12/2014

Ordinary share

ESOP (warrants)6)

31/12/2014

ADVANC 31/12/2014

31/12/2014

Name and Position

Buy(+)/ Sell(-)

Ordinary share

31/12/2013

1. Mr. Vithit Leenutaphong1)

- - - - - - - - - - - - - -

2. Mr. Somprasong Boonyachai

- - - - - - - - - - - - - -

3. Mr. Krairit Euchukanonchai

- - - - - - - - - - - - - -

4. Mrs. Tasanee Manorot

- - - - - - - - - - - - - -

5. Mr. Surasak Vajasit

- - - - - - - - - - - - - -

Chairman of the Board of Directors

Vice-Chairman of the Board of Directors 2)

Independent director and Chairman of audit committee

Independent director and Member of audit committee

Independent director

6. Mr. Aviruth Wongbuddhapitak3)

- - - - - - - - - - - - - -

7. Mr. Allen Lew Yoong Keong

- - - - - - - - - - - - - -

8. Ms. Jeann Low Ngiap Jong

- - - - - - - - - - - - - -

Director and Chairman of executive committee Director

9. Mr. Ng Ching-Wah

- - - - - - - - - - - - - -

10. Mr. Narulcha Chittreekan

- - - - - - - - - - - - - -

11. Mr. Somchai Lertsutiwong4)

Director and Member of executive committee Director

80,126 - 80,126 49,640 29,816 19,824 - - - - - - - -

Director, Member of executive committee, and Chief executive officer (Present) 5) 17,025 - 17,025 72,600 42,700 29,900 - - - - - - - - Director, Member of executive committee, and Chief executive officer (Former)

Member of executive committee

12. Mr. Wichian Mektrakarn 13. Mr. Kim Siritaweechai

- - - - - - - - - - - - -

14. Mrs. Suphajee Suthumpun

- - - - - - - - - - - - - -

15. Mrs. Suwimol Kaewkoon

105,357 +1,000 104,357 45,180 27,116 18,064 - - - - - - - Chief Organization Development Office

Chief Operating Officer

Chief Customer Officer

Chief Finance Officer

Chief Technology Officer

16. Mr. Hui Weng Cheong

- - - - - - - - - - - - - -

17. Mrs. Vilasinee Puddhikarant

3,327 - 3,327 50,580 29,816 20,764 - - - - - - - -

60,000 - 60,000 51,480 29,816 21,664 - - - - - - - 18. Mr. Pong-amorn Nimpoonsawat

19. Mr. Kriengsak Wanichnatee

- - - 38,780 31,216 7,564 - - - - - - - -

Abbreviation Company

ADVANC AIR DPC ADC ACC AMP AMC

SBN AIN WDS AWN MMT FXL ABN

Advanced Info Service Public Company Limited Advanced Internet Revolution Company Limited Digital Phone Company Limited Advanced Datanetwork Communications Company Limited Advanced Contact Center Company Limited Advanced MPay Company Limited Advanced Magic Card Company Limited

Super Broardband Network Company Limited AIN GlobalComm Company Limited Wireless Device Supply Company Limited Advanced Wireless Network Company Limited MIMO Tech Company Limited Fax Lite Company Limited Advanced Broadband Network Company Limited

043

Annual Report 2014 Advanced Info Service Public Company Limited

ABN

31/12/2013

Ordinary share 31/12/2014

31/12/2013

FXL

Ordinary share 31/12/2014

MMT

Ordinary share 31/12/2014

31/12/22013

31/12/2013

AWN

Ordinary share 31/12/2014

WDS

Ordinary share 31/12/2014

31/12/2013

AIN

Ordinary share 31/12/2014

SBN

Ordinary share 31/12/2014

31/12/2013

AMC

Ordinary share 31/12/2014

AMP

Ordinary share 31/12/2014

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Notes: 1) Appointed as Chairman of the Board of Director in replacement of Dr. Paiboon Limpaphayom, effective from 11 February 2014 2) Appointed as Director in replacement of Dr. Paiboon Limpaphayom who resigned and appointed as Chairman of the Audit Committee in replacement of Mr. Aviruth Wongbuddhapitak, who currently positioned as Chairman of Sustainable Development Committee. Those 2 positions are effective on 26 March 2014 and 6 May 2014 respectively. 3) Appointed as Chairman of Sustainable Development Committee, effective from 6 May 2014 4) To be replacement for Mr. Wichian Mektrakarn as Director and Member of Executive Committee since 27 June 2014 and as Chief Executive Officer since 1 July 2014 5) Retired from Director and Member of Executive Committee since 27 June 2014 and retired from Chief Executive Officer since 1 July 2014 6) The change in number of warrant holding is derived from the approval of shareholderâ&#x20AC;&#x2122;s meeting to issue and allocate ESOP warrants to director and executive - Grant I from the meeting dated 27 March 2013 and Grand II from the meeting dated 26 March 2014. See more details in Page 56

044

Management Structure Management Structure of Advanced Info Service Public Company Limited As of 31 December 2014 Board of Directors

Nomination and Corporate Governance Committee Leadership Development and Compensation Committee

Executive Committee

Sustainable Development Committee 2) Audit Committee

Chairman of Executive Committee Mr. Allen Lew Yoong Keong

Chief Executive Officer Mr. Somchai Lertsutiwong 1)

Chief Marketing Officer

Mr. Somchai Lertsutiwong

Chief Operating Officer

Mr. Hui Weng Cheong

Chief Technology Officer

Mr. Kriengsak Wanichnatee

Chief Customer Officer

Mrs. Vilasinee Puddhikarant

Chief Organization Development Officer Mrs. Suwimol Kaewkoon

Chief Finance Officer

Mr. Pong-amorn Nimpoonsawat

Chief Audit Executive Mrs. Suvimon Kulalert

Notes : 1) Appointed 1st July 2014 in replacement of Mr. Wichian Mektrakarn who took early retired 2) Appointed 6st May 2014

045

Annual Report 2014 Advanced Info Service Public Company Limited

Board of Directors and Sub-Committees

The Company’s management structure comprises the Board of Directors and five sub-committees: Audit Committee, Leadership Development and Compensation Committee, Nomination and Corporate Governance Committee, Sustainability Development Committee, and Executive Committee. The names of their members and directors as well as their meeting attendance information in 2014 is listed in the following table:

Attendant / Total meetings in 2014 Name Mr. Vithit Leenutaphong 1)

Mr. Somprasong Boonyachai

Mr. Aviruth Wongbuddhapitak 2)

Mrs. Tasanee Manorot 3)

Mr. Surasak Vajasit

Title

Board of Directors

• Chairman of Board 10/10 of Directors • Chairman of Leadership Development and Compensation Committee • Authorized Director • Vice Chairman of 10/10 Board of Directors • Member of Leadership Development and Compensation Committee • Member of Nomination and Corporate Goverance Committee • Independent Director 8/10 • Chairman of Sustainable Development Committee • Member of Leadership Development and Compensation Committee • Independent Director 9/10 • Member of Audit Committee • Member of Sustainable Development Committee • Independent Director 10/10 • Chairman of Nomination and Corporate Governance Committee • Member of Audit Committee

Nomination Leadership Sustainable Audit and Corporate Development and Executive Development Committee Governance Compensation Committee Committee Committee Committee -

4/4

5/13

13/13

9/9

9/9 - -

9/9 - 4/4

- 4/4

4/4 - - -

Ms. Jeann Low Ngiap Jong 3) • Director

7/10

- - -

Mr. Narulcha Chittreekan • Director

5/10

- - -

046

Attendant / Total meetings in 2014 Name

Title

Board of Directors

Nomination Leadership Sustainable Audit and Corporate Development and Executive Development Committee Governance Compensation Committee Committee Committee Committee

Mr. Allen Lew Yoong Keong 4) • Director 6/10 • Chairman of Executive Committee • Member of Leadership Development and Compensation Committee

Mr. Ng Ching-Wah

7/9

14/14

• Director • Member of Executive Committee

9/10

12/14

Mr. Krairit Euchukanonchai 5) • Independent Director • Chairman of Audit Committee • Member of Nomination and Corporate Governance Committee

7/10

8/13

2/4

Mr. Somchai Lertsutiwong 4) 6)

4/10

8/14

2/4

6/10

6/14

1/4

Mrs. Suphajee Suthumpun • Member of Executive Committee

7/14

Mr. Kim Siritaweechai

12/14

• Director • Member of Executive Committee • Member of Sustainable Development Committee • Chief Executive Officer • Authorized Director

Mr. Wichian Mektrakarn 4) 7) • (Former) Director • (Former) Member of Executive Committee • (Former) Chief Executive Officer

• Member of Executive Committee

Notes : 1) Appointed to be Chairman of Board of Directors in replacement of Dr. Paiboon Limpaphayom who resigned,effective from 11 February 2014 2) Mr. Aviruth Wongbuddhapitak resigned from Chairman of the Audit committee to be acted as Chairman of Sustainable Development Committee, effective from 6 May 2014. There were five Audit Committee meetings held before his resignation date. 3) Mrs. Tasanee Manorot and Ms. Jeann Low Ngiap Jong are directors who expertise in account and finance. Summary profile of these two directors are shown in page 32-34 4) Mr. Somprasong Boonyachai, Mr. Allen Lew Yoong Keong, Mr. Somchai Lertsutiwong, and Mr. Wichian Mektrakarn are directors who expertise in telecommunication business. Summary profile of these four directors are shown in page 32, 35 and 37 5) Appointed to be director in replacement of Dr. Paiboon Limpaphayom in the 2014 Annual General Meeting of Shareholdesr held on 26 March 2014. There were three Board meetings held before his appointment date; Appointed to be a member of Audit Committee in replacement of Mr. Aviruth Wongbuddhapitak who resigned, effective from 6 May 2014. There were five Audit Committee meetings held before his appointment date; Appointed to be a member of Nomination and Corporate Governance Committee in replacement of Dr. Paiboon Limpaphayom who resigned, effective from 6 May 2014. There were two Nomination and Corporate Governance committee meetings held before his appointment date; 6) Appointed to be Chief Executive Officer in replacement of Mr. Wichian Mektrakarn who took early retired effective from 1 July 2014. Appointed to be director, member of executive committee, and member of sustainable development committee in replacement of Mr. Wichian Mektrakarn who took early retired effective from 27 June 2014. There were six board meeting held before his appointment date. 7) Retired from Chief Executive Officer since 1 July 2014 and from director, member of executive committee, and member of sustainable development committee since 27 June 2014 8) In cases when Ms. Jeann Low Ngiap Jong and Mr. Allen Lew Yoong Keong were unable to attend the meeting, they would consider the matter under discussion and give their opinion via Video Conference or via the Chairman of the Board of Directors in order to propose their opinions to the meeting.

Annual Report 2014 Advanced Info Service Public Company Limited

The Authorized Directors

Mr. Vithit Leenutaphong and Mr. Somchai Lertsutiwong together jointly sign with the Company’s seal affixed.

The Board of Directors

The Board of Directors is comprised of 11 directors whose expertise and experience cover various fields. At least one director is experienced in the area of telecommunications, and at least one director is experienced in the area of finance and accounting (Details are provided on pages 33-34). In order to maintain a balance between the supervisory and management functions of the Company, the Chairman of the Board of Directors must not hold the Chief Executive Officer position simultaneously. There are 4 independent directors, representing one-third of the members, and 2 female directors sitting on the Board of Directors. The Board of Directors is representative of all shareholders, not of a particular group of shareholders. The Board of Directors has a policy whereby the controlling shareholders of the Company are proportionally represented.

The Scope of Authority and Duties of the Board of Directors 1. 2. 3. 4. 5.

Perform its duties with honesty, integrity and prudence in accordance with the law and the Company’s objectives and Articles of Association including the resolutions of shareholders’ meetings, and carefully protect the Company’s interests; Set out the vision, policy and direction of the Company’s operations and supervise the management team to act in accordance with plans which are set out efficiently and effectively, and thereby maximize the economic value and wealth of the Company and its shareholders; Consider and approve major issues such as large investments, purchase of assets etc. and any actions / transactions as prescribed by law; Approve and/or agree to major related transactions between the Company and its subsidiaries in compliance with the relevant notifications, regulations and guidelines of the Stock Exchange of Thailand; Assess the performance of the Chief Executive Officer and high level executives, and assign appropriate remuneration on a regular basis;

047

6. Be responsible for overseeing operational results and the management team’s performance to ensure due attentiveness and care; 7. Arrange appropriate accounting systems, including the production of financial reports and a reliable auditing system; oversee and monitor the effectiveness and efficiency of the internal control, internal audit and risk management systems; 8. Ensure avoidance of conflict of interests amongst the Company’s stakeholders; 9. Supervise business operations to enforce ethical work standards; 10. Annually review the Company’s corporate governance policy and assess due compliance; 11. Report on the execution of the Board of Directors’ responsibility to prepare financial reports, along with the external auditor’s report in the annual report covering key issues according to the Company’s policy statement and the Stock Exchange of Thailand’s Code of Best Practices for Directors of a Listed Company.

Reserved Key Matters for the Board’s Approval Although the Board of Directors has delegated specific powers to Sub-Committees, the Chief Executive Officer and high level executives, the Board of Directors has reserved its authorization over certain matters so as to protect the highest interests of the Company and its shareholders, including: - Strategy, business plan and budget - Capital expenditure and expense which exceeds the approved authority of the relevant sub-committee or executives - Strategic investments in new business and divestments - Significant policies - Material contracts - Material litigation - Dividend policy

Independent Directors shall Possess the Following Qualifications

1. Holding shares not exceeding 0.5 per cent of the total number of voting rights of the Company, its parent company, subsidiary, affiliate or juristic person which may have conflicts of interest, including the shares held by related persons of the independent director;

048

2. 3.

Neither being nor having been an executive director, employee, staff, or advisor who receives salary, or a controlling person of the Company, its parent company, subsidiary, affiliate, same-level subsidiary or juristic person who may have conflicts of interest. Audit Committee Member who shall be appointed on or after 1 July 2010 shall have ended the foregoing relationship not less than two years prior to the date of appointment; Not having any business relationship with the Company, its parent company, subsidiaries, affiliates or juristic persons, which may have any conflict of interest, in any manner that may interfere with his or her independent judgement, and not be, or used to be, a substantial shareholder or controlling person in its parent company, subsidiaries, affiliates or juristic persons, that may create any conflict of interest. Any audit committee member, who may be appointed on or after 1 July 2010, shall have ended the foregoing relationship not less than two years prior to the date of appointment.

The term ‘Business Relationship’ aforementioned under paragraph one, includes any normal business transaction, rental or lease of immovable property, transaction relating to assets or services or grant or receipt of financial assistance through receiving or extending loans, guarantee, providing assets as collateral, including any other similar actions, which result in the Company or its counterparty being subject to indebtedness payable to the other party in the amount of three percent or more of the net tangible assets of the Company or twenty million Baht or more, whichever is lower. The amount of such indebtedness shall be calculated according to the calculation method for value of connected transactions under the Notification of the Capital Market Supervisory Board Re: Rules on Connected Transactions mutatis mutandis. The consideration of such indebtedness shall include indebtedness taking place during the course of one year prior to the date on which the business relationship with the person commences; Not being a person related by blood or registration under laws, such as in the manner of father, mother, spouse, sibling, and child, including spouse of the children, executives, major shareholders, controlling persons, or persons to be nominated as executive or controlling persons of the Company or its subsidiary;

5. 6. 7. 8. 9.

Not being a director who has been appointed as a representative of the Company’s director, major shareholder or shareholders who are related to the Company’s major shareholder; Neither being nor having been an auditor of the Company, its parent company, subsidiaries, affiliates or juristic persons which may have any conflict of interest and not having been a substantial shareholder, controlling person or partner of an audit firm which employs auditors of the Company, its parent company, subsidiaries, affiliates or juristic persons which may have any conflict of interest. Any audit committee member, who may be appointed on or after 1 July 2010, shall have ended the foregoing relationship not less than two years prior to the date of appointment; Neither being nor having been any professional advisor including legal advisor or financial advisor who receives an annual service fee exceeding two million Baht from the Company, its parent company, subsidiaries, affiliates or juristic persons which may have any conflict of interest, and not having been a substantial shareholder, controlling person or partner of the professional advisor. Any audit committee member who may be appointed on or after 1 July 2010, shall have ended the foregoing relationship not less than two years prior to the date of appointment; Not conducting any business of the same nature as the Company’s or its subsidiaries’ businesses and is in competition with them in any material respect, nor being a substantial partner, shareholder holding more than one (1) percent of the voting shares, director (having management role), employee, officer or advisor (obtaining a regular salary) of any company whose business is of the same nature as the Company’s or its subsidiaries’ businesses, and is in competition with them in any material respect; Not having any other manners, which may render him or her incapable of expressing independent opinions with regard to the Company’s business affairs;

After having been appointed as an independent director with qualifications complying with the criteria under 1 to 9, the independent director may be assigned by the Board to take part in the business decisions of the Company, its parent company, subsidiary, affiliate, same-level subsidiary or legal entity who may have a conflict of interest, on condition that these decisions must be collective ones.

049

Annual Report 2014 Advanced Info Service Public Company Limited

The Segregation of Duty of the Board of Directors and Management The Board of Directors governs the operations of the Company in accordance with the provisions of the law, the Company’s objectives, articles of association, the resolutions of the shareholders’ meetings, and the Corporate Governance Policy. In governing the Company, the directors must exercise their business judgement and act in what they reasonably believe to be the best interests of the Company and its shareholders. The Management is responsible for implementing the Company’s strategy, achieving the planned objectives, and handling the day-to-day administration and affairs of the Company.

management. In this regard, the Chairman and the Chief Executive Officer shall interact on building good corporate governance and efficient corporate admin istration in order to implement the Company’s strategies, policies and directions, and achieve the planned objectives approved by the Board of Directors.

The Chief Executive Officer is the head and leader of the Company’s executives and responsible to the Board of Directors for managing the Company in order to achieve all strategies, policies, objectives and budgets approved by the Board of Directors. The Chief Executive Officer has the scope of authority in accordance with provisions of the law, the Company’s objectives, articles of association, and resolutions of the Board of Directors and shareholders’ meetings.

The Segregation of Duty of Chairman of the The Scope of Authority and Duties Board of Directors and Chief Executive Officer of the Sub-Committees

Both the Chairman of the Board of Directors and the Chief Executive Officer must be competent and have the appropriate experience and qualifications for their positions. In order to maintain a balance between the supervisory and management functions of the Company, one person cannot hold both of these positions simultaneously.

The Chairman of the Board of Directors is a nonexecutive director and the leader of the Board of Directors. He also has the following duties: 1. Oversee and act as the link between the Board of Directors and the Committees to ensure that they function effectively, and encourage directors to improve their required knowledge and skills; 2. Consult with the Chief Executive Officer and Company Secretary to arrange the schedule and agendas of the Board of Directors’ meetings; 3. Chair and conduct the meetings of the Board of Directors and shareholders, and encourage all board members and/or shareholders to debate issues vigorously during meetings, ask questions and express opinions; 4. Ensure that the Company has effective communication with its shareholders, the public and the government; 5. Encourage constructive relations within the Board of Directors and between the Board of Directors and

The Scope of Authority and Duties of the Audit Committee 1. Review the accuracy of the Company’s financial reports in accordance with legally defined accounting principles, and to ensure that there is adequate disclosure; 2. Review the Company’s internal control system and internal audit system to ensure that they are suitable and efficient, to determine the internal audit unit’s independence, as well as to approve the appointment, transfer, dismissal, performance appraisal and remuneration of the Chief of Internal Audit; 3. Review the Company’s compliance with the law on securities and exchange, SET’s regulations, and the laws relating to the Company’s business; 4. Consider, select and nominate an independent person to be the Company’s external auditor, and propose the auditor’s remuneration. The Audit Committee shall hold the meeting with the external auditor without management in attendance, at least once a year; 5. Review the policy on the engagement of an external audit firm to provide non-audit services for the Company; 6. Review all Connected Transactions, or any transactions that may lead to conflicts of interests, to ensure that they are in compliance with the laws and regulations

050

of the SET, and are reasonable and beneficial to the Company; 7. Review whether the Company has established an appropriate and effective risk management system; 8. Review and approve the Charter of Internal Audit activities, annual audit plan and activities of Internal Audit, and coordinate with the external auditor; 9. Prepare, and disclose in the Company’s annual report, the Audit Committee’s report which must be signed by the Audit Committee’s Chairman and consist of at least the following information: (1) An opinion on the accuracy, completeness and creditability of the Company’s financial report; (2) An opinion on the adequacy of the Company’s internal control system; (3) An opinion on the compliance with the law on securities and exchange, SET’s regulations, or the laws relating to the Company’s business; (4) An opinion on the suitability of the auditor; (5) An opinion on any transactions that may lead to conflicts of interests; (6) The number of Audit Committee meetings, and the attendance of such meetings by each committee member; (7) An opinion or overview comment received by the Audit Committee regarding its performance of duties in accordance with the charter; and (8) Other transactions which, according to the Audit Committee’s opinion, should be known to the shareholders and general investors, subject to the scope of duties and responsibilities assigned by the Company’s Board of Directors; 10. Continue the inspection when the external auditor informs of any suspicious circumstance whereby the director, manager or any person responsible for the operation of such juristic person commits an offence under the Security and Exchange Act, and the Audit Committee shall report the result of preliminary inspection to the Office of the Securities and Exchange Commission and the external auditor within thirty days from the date reported by the external auditor; 11. Report the performance of the Audit Committee to the Board of Directors at least four times a year. In its performance of duties, if it is found or suspected that there is a transaction or any of the following acts which may materially affect the Company’s financial

condition and operating results, the Audit Committee shall report it to the Board of Directors for rectification within the period of time that the Audit Committee deems fit;

(1) Any transaction which causes any conflict of interest; or (2) Any fraud, irregularity, or material defect in an internal control system; or (3) Any infringement of the law on securities and exchange, SET’s regulations, or any law relating to the Company’s business, If the Company’s Board of Directors or management fails to make a rectification within the period of time specified under the first paragraph, any Audit Committee member may report on the transaction or act under the first paragraph to the Office of the Securities and Exchange Commission or SET; 12. Have the authority to invite concerned executives, management and officers of the Company to express opinions, attend meetings or deliver documents as deemed necessary; 13. Engage consultants or independent persons to provide opinions, advice or work, if necessary; 14. Review the Company’s compliance with Reporting and Investigation of Misconduct and Fraud and Whistleblower Protection Policy, and consider all concerns of misconduct or fraud and the final investigation report quarterly, and be one channel to receive complaints according to such policy; 15. Review and evaluate the scope of the performance of the Audit Committee on an annual basis; 16. Review this charter annually and make proposals to the Board of Directors for approval if changes are needed; and 17. Perform other duties as assigned by the Board of Directors of the Company with the consent of the Audit Committee.

The Scope of Authority and Duties of the Leadership Development and Compensation Committee 1.

Fix appropriate annual remuneration in monetary and / or non-monetary form for the Board of Directors, committee members, and high level executives for the benefit of shareholders as a whole;

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2. Prepare policy and guidelines to designate appropriate remuneration of the Board of Directors and high level executives to be proposed to the Board of Directors and/or the shareholders’ meetings for approval; 3. Review and approve the Company’s performance in order to determine the annual KPI bonus and merit-based salary increase across the Company; 4. Consider and approve the Long Term Incentive Plan and related practices; 5. Consider and approve the performance evaluation of the Chief Executive Officer of the Company and its subsidiaries and those high-level executives who report directly to the Chief Executive Officer in order to determine their bonus, merit-based salary increase and long term incentives; 6. Consider and approve the annual bonus allocation of the Board of Directors; 7. Disclose policies governing the directors’ remuneration including principles/purposes and objectives in the annual report; 8. In conjunction with the Chief Executive Officer, identify and evaluate potential successors for the Chief Executive Officer position of the Company and its subsidiaries and those high level executives who report directly to the Chief Executive Officer, and report annually to the Board of Directors on executive succession planning; 9. In conjunction with the Chief Executive Officer, intro duce succession planning policies for the Chief Executive Officer position of the Company and its subsidiaries and those high level executives who report directly to the Chief Executive Officer; 10. Oversee the annual performance review evaluation process for the Chief Executive Officer and executives; 11. Engage consultants or independent persons to provide opinions or advice if necessary, especially on leadership development; 12. Be accountable to the Board of Directors and under obligation to explain its decisions at the shareholders’ meetings, and answer any questions that may arise; 13. Review and reassess the adequacy of this charter and recommend any proposed changes to the Board of Directors for approval; 14. Regularly report the performance of the Audit Committee to the Board of Directors as well as any material issues that merit the Board of Directors’ attention;

15. Have the authority to invite concerned management, executives and officers of the Company to express opinions, attend meetings or deliver documents as deemed necessary; and 16. Take any other action that may from time to time be assigned or delegated to the Committee by the Board of Directors.

The Scope of Authority and Duties of the Nomination and Corporate Governance Committee 1. Designate criteria and policy with respect to the nomination of Board members and committee members of the Company; 2. Supervise implementation of the policy on the good corporate governance of the Company, annually review such policy including making recommendations of any revision thereof for further consideration by the Board of Directors; 3. Consider and nominate appropriate persons to become Board members and/or committee members to be proposed to and approved by the Board of Directors and/or at shareholders’ meetings, as the case may be; and 4. Perform other tasks as designated by the Board of Directors.

The Scope of Authority and Duties of the Sustainable Development Committee 1. Define policy, strategy, operating target and sufficient budget including any other relevant action in connection with sustainability development and propose to the Board of Directors for approval; 2. Propose any material issues of the Company in connection with sustainability development to the Board of Directors for consideration; 3. Ensure that the implementation of sustainability development policy and strategy meets the target; 4. Advise and assist the Chief Executive Officer concerning the sustainability development operations; 5. Report the sustainability development performance to the Board of Directors; 6. Review the sustainability development report and make proposals to the Board of Directors for approval; 7. Perform other tasks as designated by the Board of Directors.

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The Scope of Authority and Duties of the Executive Committee 1. 2. 3. 4. 5. 6. 7.

Formulate the Company’s strategic direction, management structure, and annual business plan and budget for the Board of Directors’ approval; Monitor the Company’s financial and operating results, and keep the board members informed by monthly report; Review and approve all transactions concerning investments and disposal of assets, human resource management, finance and treasury, general administration and any other transaction related to the Company’s business within the limits of authorization granted by the Board of Directors; Delegate the Committee’s authority to any member of the management or staff as it deems appropriate. However, such authority does not permit the Committee or appointed persons to approve any transaction between them or related persons having mutual benefits or conflicts of interest (as prescribed in the Company’s Articles of Association and Notifications of the Securities and Exchange Commission). The approval for transactions shall be made in accordance with the policies and principles already determined by the Board of Directors and regulatory bodies; Report to the Board of Directors on a quarterly basis regarding the material actions taken by the Committee under the Chairman of the Executive Committee Report agenda; Annually evaluate its own performance and assess the adequacy of this Charter which may be simultaneous with the performance evaluation of the Board of Directors and other Sub-Committees; and Take any other action that may from time to time be assigned or delegated to the Committee by the Board of Directors.

In addition to the Board of Directors and the Sub-Committees, the Company supports the performance of the Board of Directors with the following management team:

Management Team1) Mr. Allen Lew Yoong Keong Chairman of Exceutive Committee Mr. Somchai Lertsutiwong 2)

Chief Executive Officer Chief Marketing Officer

Mrs. Suwimol Kaewkoon

Chief Organization Development Officer

Mrs. Vilasinee Puddhikarant

Chief Customer Officer

Mr. Hui Weng Cheong

Chief Operating Officer

Mr. Pong-amorn Nimpoonsawat Chief Finance Officer Mr. Kriengsak Wanichnatee

Chief Technology Officer

Notes : 1) List of Management Team members as at 31 December 2014 was prepared in accordance with their definitions as stipulated in the notification of the Office of Securities and Exchange Commission. 2) Appointed to be Chief Executive Officer in replacement of Mr. Wichian Mektrakarn who took early retired effective from 1 July 2014.

Nomination of Directors and Management Criteria and Procedure for Director Nomination 1.

The Nomination and Corporate Governance Committee is responsible for identifying and selecting qualified candidates to be appointed by the Board of Directors or proposed through the Board of Directors for election at the shareholders’ meetings in accordance with the Company’s Articles of Association. To identify director candidates, the Nomination and Corporate Governance Committee may use the following sources:

- Nominations made by minority shareholders of qualified candidates for election as directors; - Recommendations from current board members and professional search firms; - The IOD director pool; 2. The Nomination and Corporate Governance Committee is responsible for annually reviewing the skills and characteristics required of directors in the light of the Board of Directors’ compositions and the Company’s current and future business directions. The Committee must develop a skill matrix to identify gaps in the Board of Directors’ current profile and make recommendations accordingly. In conducting this

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review, the Committee will also consider required skills and capabilities as well as diversity in term of skills, experience, knowledge, independence, age, and gender. 3. In determining whether to recommend a director for re-election, the Nomination and Corporate Governance Committee will consider relevant factors such as the director’s performance, history of attendance at and participation in meetings, and other contributions to the activities undertaken by the Board of Directors. In the case of independent directors, their respective independence qualifications shall also be considered.

three months prior to the fiscal year end date. The information is published as an SET Announcement and on the Company’s website and includes the criteria and consideration procedure. In 2014, no minority shareholder nominated a candidate for directorship.

The appointment of the Board members shall comply with the Company’s Articles of Association and all relevant laws. Selection of the directors shall be transparent and clear. In the shareholders’ meeting:

(1) Each shareholder shall be entitled to one vote for each shareholding; (2) Each shareholder shall be entitled to cast all the votes as defined under (1) to elect one or several persons to be the Company’s director(s) but cannot split their votes for any particular person or persons; (3) Persons who receive the highest number of votes, arranged in order from highest to lowest in a number equal to that of the number of directors to be appointed, are elected to be the Company’s directors. In the event of a tie at a lower place, which would make the number of directors more than required, the Chairman of the meeting shall have the casting vote. In the case of a vacancy in the position of director, for reasons other than the completion of the term, the Board of Directors shall appoint a new director, with the required qualifications, and without any characteristics that would prohibit him/her from acting as director, to serve as a new director in the next board meeting, excluding such case where the remaining term is less than two months. Such appointed director shall assume the position for the remaining term of the vacating director. To approve such new director appointment, a resolution must be passed by not less than three-fourths of the total remaining directors. The Company provides an opportunity for minority shareholders to nominate qualified candidates for election as the Company’s directors in advance, at least

Nomination of Management The Nomination and Corporate Governance Committee shall nominate the suitable person(s) to be appointed as the Chief Executive Officer and other management positions which report directly to the Chief Executive Officer, including the preparation of a succession plan relating thereto. In this regard, the Nomination and Corporate Governance Committee shall seek to recruit the qualified person(s) either internally or externally with support from professional consultants if required. In addition, the Company shall prepare the succession plan of the high level executives (AVP up) by identifying the suitable persons to hold such positions, and shall utilize the human resource development and management system to prepare the subordinates for succession. In 2014, the Board of Directors agreed with the Leadership Development and Compensation Committee’s recommendations to nominate the Chief Executive Officer according to the Company’s succession plan in the Board of Directors’ meeting no.5/2014.

Term of Directors Term of Directorship 1.

According to the Public Companies Act B.E. 2535 and the Articles of Association, at the annual general meeting of shareholders, one-third of the directors shall vacate office. If one-third is not a round number, the number closet thereto shall be the applicable number. The directors who have held office the longest shall vacate. The vacating directors may be re-elected.

In the case of a vacancy in the position of director, for reasons other than the completion of the term, the Board of Directors shall appoint a new director, with the required qualifications and without any characteristics that would prohibit him/her from acting as director, according to article 68 of the Public Companies Act B.E. 2535, to serve as a new director

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in the next board meeting, excluding such case where the remaining term is less than two months. Such appointed directors shall assume the position for the remaining term of the vacating director.

Term of Membership of Audit Committee 1. 2.

A Committee Member shall serve for a term as long as they are serving on the Board of Directors. A retiring member may be re-elected. For a committee member who has completed a total of nine years, or three consecutive terms, the Board of Directors shall review their respective independence qualifications each year. A Committee Member who wishes to resign during his or her term of office must give notice to the Chairman of the Board of Directors. The resignation date is effective upon the Company receiving the notice in order that the Board of Directors can appoint a qualified director(s) in replacement. The Board of Directors must fill the vacancy within 90 days from the date on which such Committee Member resigned.

In the case that all members vacate office except otherwise by reason of disqualification or as prohibited by law, the Audit Committee shall remain in office as necessary until a new Audit Committee is appointed.

Term of Membership of Other Sub-Committees 1. 2.

Members of the Committees may hold their posts for as long as they are serving on the Board of Directors. Any Member who vacates office at the end of their term may be re-elected. In addition to section (1), membership of the Sub-Committees will be automatically cancelled in the following situations:

- Death; - Resignation; - Being disqualified as sub-committee; - Removal from office by resolution of the Board of Directors;

Remuneration for Directors and Management

The Company has specified the remuneration for directors at a rate similar to the industry standards, which is considered to be appropriate to retain quality directors within the Company. The remuneration for the directors and management is in accordance with the Company’s operational performance and the performance of the individuals. The Leadership Development and Compensation Committee will determine necessary and appropriate remuneration in both monetary and non-monetary terms for the Company’s directors, members of the sub-committees, and the Chief Executive Officer, including executives reporting directly to the Chief Executive Officer. Additionally, the Directors’ Compensation Survey published by the Stock Exchange of Thailand and the Thai Institute of Directors Association shall be considered annually. The remuneration for directors and members of the sub-committees shall be proposed, respectively, to the Board of Directors meeting and the Company’s general shareholders’ meeting, which is held on an annual basis.

Directors’ Remuneration Total monetary remuneration for the Chairman of the Board of Directors, independent directors, and non-executive directors totaling 8 persons was Baht 24.94 million. The remuneration was paid from 2014 operating results as approved by the general meeting of shareholders, held on 26 March 2014, in an amount not exceeding that approved by the shareholders and which was comprised of monthly allowances, meeting allowances and bonus payments. The criteria of payment are the same as those of year 2013.

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Annual Report 2014 Advanced Info Service Public Company Limited

Directors’ Remuneration for The Year 2014 Monetary Remuneration (Baht)

Director

Monthly Retainer

Meeting Allowance

Bonus

300,000 75,000

x 25,000

P P

Audit Committee • Chairman • Member

25,000 x

25,000 25,000

P P

Other Sub-Committees • Chairman • Member

10,000 x

25,000 25,000

P P

Board • Chairman • Member

Notes : 1) Directors who are executives or employees of the Company or its shareholders are not entitled to receive such remuneration. 2) Chairman of the Board of Directors is not entitled to receive an additional monthly retainer or meeting allowance when he or she holds any membership of the sub-committees.

The remuneration for seven (7) directors in year 2014 is as follows: Position

Name

(No. of Attendane)

Bonus Monthly Meeting from 2014 Retainer Allowance Operating Results (Baht) (Baht)

Others3)

(Baht)

Mr. Vithit Leenutaphong 1)

• Chairman of the Board of Directors 3,100,000

100,000

2,400,000

51,356

264,286

Mr. Aviruth Wongbuddhapitak • Chairman of Sustainable 1,007,419 Development Committee • Member of Leadership Development and Compensation Committee

675,000

2,200,000

Mr. Surasak Vajasit • Chairman of Nomination and Corporate Governance Committee • Member of Audit Committee

903,387

725,000

1,900,000

42,018

Mrs. Tasanee Manorot • Member of Audit Committee • Member of Sustainable Development Committee

825,000

675,000

1,900,000

51,356

Mr. Ng Ching Wah

• Director • Executive Committee

825,000

525,000

1,500,000

51,356

Mr. Narulcha Chittreekan

• Director

825,000

125,000

1,000,000

885,484

425,000

1,900,000

59,793

Dr. Paiboon Limpaphayom • Chairman of the Board of Directors (Former) 1)

Mr. Krairit Euchukanonchai 2) • Chairman of Audit Committee • Member of Nomination and Corporate Governance Committee Total

8,635,576

3,250,000 12,800,000

255,878

Notes : 1) Mr. Vithit Leenutaphon was appointed to be chairman of the board of directors in replacement of Dr. Paiboon Limpaphayom who resigned, effective from 11 February 2014 2) Mr. Krairit Euchukanonchai was appointed to be director in the 2014 annual general meeting of shareholders, held on 26 March 2014 3) Others means daily expense allowance (per diem) in the event that they shall travel and perform their duties for the Company’s business which is calculated at the same rate of CEO and in accordance with the Company’s regulation.

056

Management’s Remuneration The Leadership Development and Compensation Committee shall prepare guidelines and policy to designate appropriate remuneration and consider a long-term incentive plan for the Chief Executive Officer and high level executives on an annual basis. The remuneration for the management shall be in accordance with the Company’s short-term and long-term operational performance, the performance of the individuals, and leading group standards and guidelines which are considered to be appropriate to motivate and retain quality executives within the Company. In 2014, the total amount of remunerations for eight (8) executives of the management team was

calculated at Baht 75.48 million or 1.28% of total amount of remuneration for employees of the Company, and was comprised of salary, bonus and provident fund and other benefits

Other Remuneration To enhance the Company’s sustainability for long-term growth and to promote mutual benefits between the Company, its shareholders and the management team, the Company has issued warrants to be converted into the Company’s ordinary shares to the management. This is pursuant to the Performance Share Plan. The details are as follows:

The first year of the program in 2013 Offer price per unit : Baht 0 (zero Baht) Term : Not exceeding 5 years from the date of issuance and offering Exercise Price : Baht 206.672 per share (unless there is an adjustment to the exercise price as prescribed under the terms and conditions of the warrants) 1st Period of Exercise Date : 1 June 2016, be entitled to exercise their rights to purchase 1 time a year The second year of the program in 2014 Offer price per unit : Baht 0 (zero Baht) Term : Not exceeding 5 years from the date of issuance and offering Exercise Price : Baht 211.816 per share (unless there is an adjustment to the exercise price as prescribed under the terms and conditions of the warrants) 1st Period of Exercise Date : 1 June 2017, be entitled to exercise their rights to purchase 1 time a year

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Annual Report 2014 Advanced Info Service Public Company Limited

As defined by the notification of the Office of Securities and Exchange Commission, the members of the management team who were granted the warrants are as follows:

No.

Name

The Amount of Warrants (unit) 2013 (Unit)

Percentage of Total Warrants

2014 (Unit)

Percentage of Total Warrants

Total

19,824

4.89

29,816

4.38

49,640

Mr. Somchai Lertsutiwong

Mr. Wichian Mektrakarn 1) 29,900 7.37 42,700 6.28 72,600

Mrs. Suwimol Kaewkoon

18,064

4.45

27,116

3.99

45,180

Mrs. Vilasinee Puddhikarant

20,764

5.12

29,816

4.38

50,580

Mr. Pong-amorn Nimpoonsawat

21,664

5.34

29,816

4.38

51,480

Mr. Kriengsak Wanichnatee

7,564

1.86

31,216

4.59

38,780

Note : 1) Retired since 1 July 2014

Company Secretary

Head of Compliance

Mr. Chavin Chaivatcharaporn, appointed as company secretary, shall have the duties and responsibilities as designated by the Board of Directors as follows:

As Head of Compliance, Ms. Nattiya Poapongsakorn is responsible for overseeing the Company’s operations and transactions to ensure that the company is in compliance with SET/SEC regulations for listed companies and other enforcements related to public company limited acts.

(1) Organizing the Board of Directors’ meetings, sub-committee meetings and shareholders’ meetings of the Company (2) Organizing the Board of Directors’ meetings and shareholders’ meetings of the Company’s subsidiaries (3) Preparing, updating and presenting the corporate governance policy of the Company to the Nomination and Corporate Governance Committee for their approval (4) Preparing and retaining documents as stipulated by laws (5) Performing other assignments as requested by the Board of Directors and/or its sub-committees.

In this regard, the credentials of the company secretary and head of compliance are provided in page 41.

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Corporate Governance Corporate Governance Policy

The corporate governance policy can be divided into 5 categories as follows: 1. 2. 3. 4. 5.

Board of Directors Rights and Equitable Treatment of Shareholders, and Role of Stakeholders Disclosure of Information and Transparency Internal Control and Risk Management Systems Code of Business Ethics

The Company has kept all directors, executives, and employees informed of the corporate governance policy in compliance with good practices since 2002, including communicating the policy to shareholders and outsiders via the Company’s website (i.e. http://investor.ais.co.th) for their acknowledgement and monitoring of the policy. The Board of Directors has authorized the Nomination and Corporate Governance Committee to supervise the implementation of the corporate governance policy and annually review such policy so as to incorporate it into the Company’s everyday business operations and in accordance with the rules and regulations of the Securities Exchange of Thailand. The latest revision also complies with the guidelines of the ASEAN CG Scorecard. The policy has been consistently communicated to directors, executives, and employees for their awareness and to facilitate its incorporation into the Company’s normal business operations. Furthermore, the Company has provided insiders/outsiders with a channel for reporting any illegal activities, acts of misconduct or unethical practices in the Company, while also granting protective measures for whistleblowers in accordance with the Whistleblower Policy.

Performance Report on Corporate Governance Chapter 1 : The Board of Directors The Board of Directors is composed of eleven (11) legally qualified experts with wide ranging leadership, vision, expertise and experience in various fields including the telecommunications industry. The Board of Directors has the freedom to consider any matter critical to the business direction of the Company. By stipulating that more than one third of the Board of Directors be independent

directors and more than half non-executive directors, the Board of Directors contributes to the absolute benefit of the Company’s shareholders as a whole. In addition, the Chairman of the Board of Directors and Chief Executive Officer shall not be the same person nor have any genetic or business relationship. The Company has separated the roles and responsibilities of the Chairman of the Board of Directors and the Chief Executive Officer. Also, key matters which have a significant impact on business performance require the Board of Directors’ approval. Details of the names and composition of the Board of Directors, the criteria for selection, nomination process and appointment of directors, definition of Independent Directors, and the separation of the roles and responsibilities of the Chairman of the Board of Directors and the Chief Executive Officer are listed in “Management Structure” on page 44. Independent directors of the Company must have the qualifications prescribed in the corporate governance policy which are beyond the qualifications required by the Office of Securities and Exchange Commission. Details of the independent directors’ qualifications are listed in the corporate governance policy posted on the Company’s website (i.e. www.ais.co.th). The Board has set up five (5) committees. Details of Board of Directors and committee structure, including membership and the responsibilities of each committee, are listed in the “Management Structure” section on page 44.

Board of Directors’ Meetings The Board of Directors’ meetings are scheduled in advance annually at least two (2) months before the year end so as to ensure that all directors are able to attend all meetings. When deemed necessary, the Chairman of the Board of Directors may call extraordinary meetings. Notice of Board of Directors’ meetings and all supplementary documentation are circulated to the Board of Directors at least seven (7) days before each meeting so that each director shall have sufficient time to analyze the information in advance.

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Annual Report 2014 Advanced Info Service Public Company Limited

In case of there being no Board of Directors’ meeting in any particular month, the Company Secretary will provide the Board of Directors with the monthly operating report for their acknowledgement. Details of the meeting attendance are listed in the “Management Structure” section on page 44. The Chairman of the Board of Directors presides over the meetings and ensures that sufficient time is allocated for directors to discuss and express their opinions freely on each item on the agenda. In addition, the relevant management also provides the necessary information for the Board of Directors’ consideration. After each Board of Directors’ meeting, the Company Secretary shall be responsible for circulating the relevant Board of Directors’ minutes within fourteen (14) days.

Non-Executive Directors Sessions The audit committee and other non-executive directors shall conduct meetings without the presence of executives at least once a year. This is to provide an opportunity to discuss any subjects of interest related to the business operations of the Company.

Succession Plan The Board of Directors has developed a succession plan for the Company’s Chief Executive Officer and executives in order to maintain the confidence that the Company’s business operations shall continue without interruption when these positions become vacant. The Board of Directors has authorized the Nomination and Corporate Governance Committee to set up the succession plan which shall be reviewed, updated and reported to the Board of Directors annually.

Communication with Management The Company Secretary shall act as the coordinator between directors and the management team, while the Internal Audit Office shall act as the coordinator between audit committee and management team. The Company shall not obstruct communication between directors and management. However, this access and communication shall not interfere with or interrupt the Company’s normal business operations.

Remuneration The remuneration for the Company’s directors shall reflect their duties, responsibilities and contribution, and be comparable to industry standards and companies of a similar size, which also reflects the Company’s overall operation performance as well as that of each individual’s performance. The Leadership Development and Compensation Committee will determine adequate and appropriate remuneration for each person and propose this to the Board of Directors and the shareholders on an annual basis for their approval.

Training and Development for Directors, Executives and Company Secretary A newly-appointed director has been provided with all necessary business information about the Company required to perform their fiduciary duties. The training and development programs, paid for by the Company, have been constantly attended by the directors, senior executives and company secretary to ensure that they have all the necessary skills and knowledge required to perform their duties efficiently. In 2014, the training and development programs taken were as follows:

060

Attendee

Date

Facilitator

Role of the Chairman

Thai Institute of Directors

Company Secretary April 2014 (2 days)

Anti-Corruption Program

Thai Institute of Directors

June 2014 (4 days)

Fundamental Practice for Corporate Secretary

Thai Institute of Directors

July 2014 (2 days)

Director Certification

Thai Institute of Directors

October 2014 (2 days)

Role of the Compensation Committee

Thai Institute of Directors

Chairman of the Board

June 2014 (2 days)

Program

The Board of Directors’ Self - Evaluation The Board of Directors evaluates its own performance annually in order to assess and improve the directors’ own fiduciary duties and their compliance with corporate governance policy. • Criterion The evaluation form consists of two (2) key components. Component I : The evaluation is related to the following six (6) aspects of its operation: - Board of Directors’ structure and qualifications of the Board of Directors; - The roles, duties and responsibilities of the Board of Directors; - Board of Directors’ meetings; - The Board’s performance; - Relationships with management; - Directors’ self-development and executive development. Component II : The opinions and suggestions provided by the Board of Directors so as to identify special issues in its performance or any aspects of the Company’s operation. • Procedure The Company secretary will propose the form to directors every year, then gather and report the result of assessment to the Board of Directors for consideration.

Evaluation of the Chief Executive Officer’s Performance The Leadership Development and Compensation Committee is responsible for setting CEO performance targets and evaluating performance against the annual targets in order to determine the CEO’s compensation.

Chapter 2 : Rights and Equitable Treatment of Shareholders, and Role of Stakeholders The Board of Directors respects the shareholders’ rights and has a duty to protect the benefits of every shareholder equitably regardless of whether they are retail, foreign, institutional or major shareholders. Every shareholder is entitled to the rights and equitable treatment detailed below. - The right to receive share certificates and to make share transfers, and to be sufficiently informed of operating results and management policy on a timely basis. - The right to receive a share of profit by way of receiving dividend payments equally according to the individual’s shareholding percentage. For the holders of Company’s debentures, the Company pays interest in accordance with the interest rate and payment schedule specified in the prospectus. - The right to participate in a meeting, to vote, and to make recommendations on decisions concerning major corporate action.

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Annual Report 2014 Advanced Info Service Public Company Limited

- The right to elect or dismiss directors. - The right to participate in and be adequately informed on decisions about the Company’s fundamental changes, etc.

Annual General Shareholders’ Meeting The Company recognizes the rights and equitable treatment of shareholders. Accordingly, the Board of Directors ensures that the Company organizes annual shareholders’ meetings in accordance with the laws, good practice and good corporate governance as follows: Before the meeting date 1. 2. 3.

The shareholders are entitled to propose items for inclusion on the meeting agenda and nominate qualified person(s) to be considered and appointed to be directors at the shareholders’ meeting. For the 2014 annual general shareholders’ meeting, this entitlement was from 1 October 2013 to 31 December 2013, three (3) months in advance of the annual general shareholders’ meeting, the rules and procedures of which are posted on the websites of the Stock Exchange of Thailand and the Company. Nonetheless, the Company did not receive any proposed items for inclusion on the agenda nor any director nominations prior to the expiry of the said period. The shareholders are entitled to elect members of the Board of Directors, fix directors’ remuneration, appoint the Company’s auditor, fix the auditor’s fee, dividend payments, and other entitlements as stipulated in all relevant law. The Company prepares the meeting notice including the purpose and rationale for each item of the agenda, Proxy Form B, supplementary documentation, and the procedure for making queries both in Thai and English versions, and posts said information on the Company’s website thirty (30) days prior to the meeting date and also publishes said information on the Stock Exchange of Thailand’s website, including delivering these documents and proxy forms to shareholders twenty one (21) days prior to the meeting date. The shareholders are entitled to raise questions thirty (30) days prior to the meeting date by posting their questions on the websites of the Company and the Stock Exchange of Thailand.

4. 5.

In addition to Proxy Form B enclosed with the meeting notice, the Company prepares Proxy Form A and Proxy Form C, which shareholders can download from the Company’s website to support the shareholders who cannot attend the meeting themselves by granting proxy to their representatives or an independent director. At least two (2) independent directors shall be assigned to take proxy for shareholders who will not attend the meeting. The names, credentials and qualifications of the assigned independent directors will be stated in the meeting notice. The Company liaises with institutional investors at least fourteen (14) days prior to the meeting date to verify the shareholding data and encourage them to attend the meeting either through their authorized representatives or by granting proxy to the assigned independent directors.

On the meeting date 1. 2. 3. 4.

The Company encourages the shareholders, including the institutional investors, to attend and participate in all shareholders’ meetings. The annual general meeting of shareholders of 2014 was held at Vibhavadi Ballroom, Centara Grand Central Plaza Ladprao from 2:00 p.m. to 5:00 p.m. The meeting venue was appropriate for the large number of shareholders and convenient in terms of transportation and access. The Company assigned sufficient staff to facilitate the shareholders’ meeting registration with a barcode system and the process to attend the meeting. The Chairman of the Board of Directors, the Audit Committee, the Nomination and Corporate Governance Committee, the Leadership Development and Compensation Committee, and the Executive Committee including senior executives attended the meeting so as to address and clarify any queries or concerns of the shareholders. The Company conducted the meeting transparently by inviting an independent legal consultant to supervise the voting. The Chairman presided over the meeting in sequence in accordance with the meeting agenda stated in the meeting notice without adding any additional matters and allocated sufficient time for shareholders to present any queries on each item in the agenda.

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5. 6. 7.

Prior to the onset of the meeting, a company representative explained the meeting procedure and voting method to the shareholders. The Company issued voting cards for each item on the agenda. For the director appointment item, the voting related thereto was organized on a one-by-one basis. The barcode system facilitated faster vote counting to speed up the process and also ensure information accuracy and reliability. Participants were informed of the voting results for each agenda item and received the voting scores without any objection. The Company provided an AGM quality assessment and used a quality assessment score to improve the process and efficiency of the next AGM.

After the meeting 1. The Company notifies the resolutions and voting results of the meeting to the Stock Exchange of Thailand promptly, including posting those resolutions on the Company’s own website. 2. The Company secretary prepares the minutes of the meeting and posts them on the Company’s website within fourteen (14) days after the meeting date. The minutes cover all material facts in compliance with the good corporate governance of the Stock Exchange of Thailand and such publications are posted on the stock exchange’s website. Communication with Stakeholders The stakeholders may provide any suggestions or report any illegal or unethical action of any director, executive or employee through: 1.

Company Secretary Office Advanced Info Service Public Company Limited 414, 28th Floor, Intouch Tower, Phaholyothin Rd, Samsen Nai, Phayathai, Bangkok 10400 E-mail : companysecretary@ais.co.th

2. Audit Committee E-mail : AuditCommittee@ais.co.th 3.

Investor Relations Tel. : (66) 2299 5117 Fax. : (66) 2299 5165 E-mail : investor@ais.co.th

All suggestions, complaints or reports shall be forwarded to the related departments and all actions taken shall be reported to the Board of Directors.

Role to Stakeholders The Company is aware of the rights of every group of stakeholders, irrespective of whether they have rights as customers, partners, communities, society, or the environment. As a result, the Company has established a policy of providing guidelines for all stakeholders according to legal rights and sustainable co-existence guidelines in the Company’s sustainability development policy, code of business ethics, and personnel management policy, as well as in a variety of other relevant policies of the Company. Additionally, the Company also designates appropriate guidelines and internal control systems to prevent corruption in the organization, and assigns the Business Ethic Committee to operate measures or activities for creating the awareness of such matters among employees and partners of the Company. In this respect, the shareholders can study the guidelines for 4 groups of the Company’s stakeholders - community, partners, employees, and customers - and the guidelines on the environment from the sustainability development report 2014. Additionally, the Company still places emphasis on the participation of stakeholders in mutually examining the transparency of business operations in compliance with good corporate governance policy and the code of business ethics, inclusive of the guidelines on anti-corruption. If any of the Company’s employees know of such a violation, he/she can notify the Company via the Ethics online channel or the Nokweed system. In the case of external stakeholders, he/she can notify the Board of Directors via the Audit Committee at AuditCommittee @ais.co.th. In this regard, the matters so notified shall be further brought into the fact-finding processes, and the informant shall receive the best possible protection from the Company. The shareholders can study additional information from the “Whistleblowers Policy” as posted on the Company’s website i.e.http://investor.ais.co.th

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Chapter 3 : Disclosure of Information and Chapter 4 : Internal Control and Transparency Risk Management Systems 1. 2.

The Company discloses the Company’s financial and non-financial information, such as article of association, memorandum of association, risk management policy, financial statements, and analysis and performance report, in accordance with the relevant laws and regulations accurately, completely, punctually, and transparently to all shareholders and investors. As such, the investors can have confidence in the Company’s reliability and integrity. The Company has issued an information disclosure policy applicable to all directors, executives and employees of the Company and its subsidiaries. The Company has set up an Investor Relations Department to be responsible for communicating material information to shareholders, investors, analysts and other stakeholders. In addition, the Company has set up a Compliance Unit to ensure that all material information of the Company is properly disclosed through various channels such as the Company’s website, the Stock Exchange of Thailand’s website, and this annual report. The communication and disclosure of material information shall comply with the principles stipulated in the information disclosure policy and corporate governance policy. The Investor Relations Department can be contacted at:

Tel. : (66) 2299 5014, (66) 2615 3112 Fax. : (66) 2299 5165 E-mail : investor@ais.co.th Website : http://investor.ais.co.th

3. T h e C o m p a n y h a s s p e c i fi e d a p e r i o d o f non-communication with analysts and investors (silent periods) with respect to financial results, including not holding press conferences or disclosing financial information publicly by executive and/or investor relation officers, at least thirty (30) days prior to the specified announcement date so as to avoid any unfair treatment and possibly affecting the Company’s share price.

As the Board considers the internal control, audit and risk management systems crucial for protecting the shareholders’ investment capital and the Company’s assets, it has therefore set up relevant policies, measures and supervising departments, the details of which are listed in the “risk management , internal control and internal audit” section on page 70.

Chapter 5 : Code of Business Ethics The Company encourages all directors, managers, and officers to work and conduct business activities transparently and in compliance with laws, business integrity and ethics. The Code of Business Ethics is part of the corporate governance policy which establishes the guidelines and standards of conduct for all employees in the organization. Employees are required to sign and acknowledge the code of business ethics upon commencing employment and upon any code revision. In this regard, the shareholders can study the details in the full version of the Code of Business Ethics at http://investor.ais.co.th The Business Ethics Committee was established in 2006 to oversee the implementation of the Code of Business Ethics and compliance with the Corporate Governance Policy. The Company shall create awareness and conduct campaigns for directors, executives, and employees, who shall operate their work honestly, taking into account the benefits of the Company and its stakeholders. In 2014, the Business Ethics Committee conducted activities to encourage the compliance of business ethics as follows: 5.1 Make an awareness campaign about conflict of interest for managements, employees and partners The directors, executives and employees may, from time to time, experience a conflict of interest while performing their duties. As a result, the Business Ethics Committee has set up campaigns so as to encourage executives, employees and business partners to be aware of the importance of business ethics, and to create moral values for employees to consider, based upon their own decision.

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The campaigns were conducted by way of: - Giving lectures to executives and employees including providing Q&A sessions in meeting rooms - Communicating with employees via mass communication methods such as posters in the Company’s common areas - Sending letters to business partners to notify them of the Company’s policy in relation to the receipt of gifts and the participation in business social events Thereafter, the Business Ethics Committee has assessed the effectiveness of the campaign by requesting executives and employees to complete tests via the intranet so that the campaigns in relation thereto could be improved in the future.

Further, the Business Ethics Committee has set up a channel so as to address and clarify any queries concerning the business ethics of the Company. The employees can contact the committee by e-mail at aisbusinessethics@ais.co.th • Investigation and punishment Enforcing a Code of Business Ethics is very important; good governance practices are an essential part of the successful running of the business. The Committee has established appropriate punishment for offenders and ensured protection of the identity of any person reporting an act of unethical conduct. In 2014, there is only 1 breached case against code of business ethics, decreased by 2 cases in previous year. Detail is shown below:

Case

Unethical Conduct

Accepting a gift of more than the nominated value from a customer, failing to hand over the gift to the Company, and failing to report the incident to a superior.

Action After investigation by the Business Ethics Committee,Internal Audit, and Human Resources Management, disciplinary punishment was imposed in accordance with the Company’s regulations.

Annual Report 2014 Advanced Info Service Public Company Limited

Participation in Thailand’s Private Sector Collective Action against Corruption - CAC

On December 16, 2013, the Company signed Thailand’s Private Sector Collective Action Coalition against Corruption (CAC) to jointly declare its intention to counter corruption and not to accept any dishonesty in consequence of the Company’s business operations or the operations in the organization. The Company aims to operate its businesses with honesty and transparency in compliance with laws related to anti-bribery and anti-corruption and with the good corporate governance policy of the Company because organizational corruption is a risk to the sustainable growth of business operations. The Company is aware of anti-corruption in every form without exception and shall not participate in corruption, either directly or indirectly. Every director, executive, and employee of the Company shall adhere to and comply with the anti-corruption policy. In addition, the Company also arranges campaigns and communicates appropriate knowledge to the related parties both inside and outside the organization in a continuous manner via the Business Ethics Committee. At present, the Company’s application for a certificate of membership is formally under the process of consideration.

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Monitoring the Business Operations of Subsidiaries and Associated Companies

The Board of Directors has appointed directors in its subsidiaries proportionate to the number of shares held for the purpose of monitoring each subsidiary’s business operations for the best interest of shareholders. The appointed directors shall have the same responsibilities as those of directors or executive directors of the parent company and shall perform their duties in compliance with good corporate governance policy, related party transaction policy, etc. All subsidiary transactions which may significantly affect the business operation or financial status of the Company must be reviewed and approved by the Board of Directors of the parent company. In order to present the financial information and operating results of the subsidiaries, the Company has assigned the same auditing office that provides auditing services for the Company to perform audits and present the financial and non-financial information of the Subsidiaries in the consolidated financial statements of the Company.

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Our Business in A Sustainable Way AIS is committed to operate business in a sustainable way with our considering the impact we made to the society and environment as well as the expectation of our key stakeholders i.e. communities, partners, customers, and our people. We have established the sustainability policy and strategy to guide and shape the way we do business. We are striving to build trust and gain license to operate from all Thais under the ultimate goal,“The Most Admired Company”. To allow all key stakeholders to understand more about our way of sustainable business, we published “AIS sustainability report 2014” in accordance to the Global Reporting Initiatives revision 4 (GRI G4). Within this report, we have disclosed our sustainable business policy, strategy, material issues and management approach. Our sustainability report is available on website at http://investor.ais.co.th and upon request in hard copy.

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Annual Report 2014 Advanced Info Service Public Company Limited

Relationship with Investors We are committed to delivering the highest standards of disclosure with accuracy, completeness, fairness, transparency, quality, and timeliness in all communications with our shareholders and the investment communities. The AIS Investor Relations Department reports directly to the Chief Finance Officer. We provide Company information including financial and operational performance as well as business direction from a management perspective. The quarterly Management Discussion and Analysis (MD&A) contains quarterly operating results, significant events affecting the financial results, guidance, and other crucial information for investors. The guidance is revisited during the year in accordance with the ongoing results. Fully understanding the crucial importance of investor relations, AIS management allocates an appropriate amount of time for investor relations activities. Our senior management regularly participates in and presents company strategy and business direction at investor meetings, analyst briefings, quarterly results meetings, and domestic and international conferences and road shows.

AIS Investor Relations Website (http://investor.ais.co.th) contains essential sources of information for investors, including historical performance, financial statements, conference call replays, annual reports, Form 56-1, SET disclosure, an investor calendar, shareholder meeting announcements, AIS share information, dividends, corporate governance news, sustainable development information and more. Moreover, in order to keep investors informed about important issues, AIS regularly delivers IR news releases, including company news, earnings releases, and updated promotions. AIS has also established the Compliance Department, which is responsible for the disclosure of information to the Stock Exchange of Thailand (SET) and the Securities and Exchange Commission (SEC) to ensure that the Company complies with all applicable laws and regulations. In addition, the Company has regularly organised investor activities, which have been attended by various Company executives as shown in the following table:

Activities Related to Quarterly Results Announcement

Activity

2014

Objective

Attendees

Executive

Results Conference Call & Webcast

Quarterly (4 times)

Quarterly results announcement and Q&A

Analyst Briefing

Semi-annual and annual (2 times)

Presentation of the Companyâ&#x20AC;&#x2122;s semi-annual and annual performance and strategy, plus Q&A

Analysts and local institutional investors

Chief Executive Officer/ Chief Finance Officer/ other members of management team

Opportunity Day

Quarterly (4 times)

Quarterly results announcement and Q&A

Retail investors, private equity, analysts

Head of Investor Relations

Local and foreign Chief Operating Officer/ analysts and Chief Finance Officer institutional investors

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Investor Activities

Activity

2014

Objective

Attendees

Executive

Road Show/Conference (international and domestic)

18 times

Communicate business direction, performance and strategy

Local and foreign Chief Executive Officer/ institutional investors Chief Finance Officer

Company Visit

140 times

Provide access to management for discussing the Company’s performance, direction, and strategy

Local and foreign Chief Executive Officer/ analysts and Chief Finance Officer institutional investors

In 2014 , AIS Investor Relations’ achievements and standards received due recognition in the form of prestigious “Best Investor Relations SET Award of Honor” from the Stock Exchange of Thailand’s (SET) for showing excellent performance during the past 3 consecutive years. The AIS IR team provides shareholders and investors with a direct point of contact by telephone on: +662 615 3112, +662 299 5014; by fax on: +662 299 5165; or by email at: investor@ais.co.th

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Annual Report 2014 Advanced Info Service Public Company Limited

Policy on Use and Disclosure of Inside Information The Company is strongly committed to the responsible and transparent use of internal data under best practices for the betterment of Company operations. In doing so, the Company is resolved to adhering to the principles of good corporate governance and business integrity while facilitating equal access to complete, reliable, and updated internal information for all investors and concerned parties. Accordingly, the Company monitors and tracks all the internal data usage and trading securities procedures of directors, executives, and employees to ensure conformance with the Securities and Exchange Act and business transparency. Outlined below are some of the key points of the policy: •

Directors, executives, and employees at all levels are forbidden from using internal data containing crucial information that would have a significant impact on the stock price and which has not yet been declared to the public or the Stock Exchange of Thailand for trading to the advantage of themselves or others. Furthermore, the aforementioned parties are to avoid or refrain from trading the Company’s stock for 1 month prior to the announcement date of the Company’s results.

•

The Company is responsible for announcing to the public regarding key Company decisions and/or actions, instantly and thoroughly, via appropriate and acceptable media to ensure that all data and information are accessible to stakeholder groups in a timely manner. Release of such information must be handled through the Investor Relations Department and Public Relations Department and in a manner congruent with the rules and regulations set out by the Stock Exchange of Thailand and Disclosure Policy.

•

Directors and executives shall report ownership of all securities issued by the Company, including those that pertain to self, spouses, and/or underage children, to the Securities and Exchange Commission and to the Board of Directors on a quarterly basis.

•

The Company maintains a strict policy regarding computer system usage and electronic information security in order to protect crucial information from unauthorised release. Misuse of internal Company

data by directors, executives, or employees is considered a serious breach of Company policy and, in warranted cases, offenders will be prosecuted to the fullest extent of the law. Before the announcement of the Company’s results, internal data are restricted to related departments including : Accounting, Finance, Investor Relations, and Compliance.

•

The Investor Relations Department is forbidden from discussing forward-looking statements or making any comments on information pertaining to the following 6 months in order to comply with the SET rules and international best practices; however, the long-term view regarding the Company’s strategic direction and business trends can be discussed.

•

The Investor Relations Department is obliged to declare quiet periods to investor communities one month ahead of the result announcement date. During the corporate silence period, the Company refrains from answering any inquiries with regard to the upcoming financial results and Company guidance. Exceptions are made only for the discussion of factual business information, clarifications of disclosed information, new events concerning share price sensitive information, and long-term business operations. Any arranged meetings with analysts and/or investors are not encouraged in this period, and shall strictly be confined to discussions on long-term business operations only.

The Company has a Disclosure Policy outlining the official procedures for information disclosure. The policy is developed based on the principles that the disclosure of corporate information shall be in compliance with applicable legal and regulatory requirements. Disclosure of all corporate information shall be accurate, adequate, timely and consistent, regardless of whether it has a positive or negative impact on the Company, the investors, or the market. All non-public information shall be disclosed in a manner which ensures fair and equitable access by all investors. The policy stipulates responsible positions, levels of disclosure, and communication procedures. The policy reinforces the standards of disclosure and follows the principles of market efficiency.

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Risk Management, Internal Control, and Internal Audit Risk Management

The Company has Enterprise Risk Management Policy and Framework which covered all operations and all employees in order to manage risks to an acceptable level including encourages employees to take continuous personal responsibility for self-assessing risk (further information in attachment 73) and developing internal control systems to strengthen the effectiveness of the internal control and risk management systems.

The Company has proper and effective risk management systems, aligned with the integrated framework of the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

AIS Risk Management Framework & Procedures

1. Set Objective

Identify Events

Monitor

3. Assess Risks

Control Activities

4. Risk Response

The Company emphasizes the importance and value of risk management by appoints the Chairman of the Executive Committee as the Chairman of the Risk Management Committee, together with the Chief Executive Officer and senior management as members of the committee, responsible for established risk management policy and framework, including identify risk, assess and

rate the risks, define risk management concept, and assign responsibilities to those in charge of managing and controlling the risks to its risk appetite levels. This enabled the Company to accomplish its goals and strategies and create confidence for all shareholders and stakeholders. The Risk Management Committee continuously revises any changes to any risk factors.

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Annual Report 2014 Advanced Info Service Public Company Limited

The Company set up Risk Management working structure as picture below:

Board of Directors

Audit Committee

Executive Committee

Risk Management Committee (RMC) Chairman - AIS (RMC’s Chairman) Chief Executive Officer (Vice - Chairman)

Enterprise Risk Management (Secretary)

Chief Executive Officer responsible to implement risk management policy and framework throughout the Company via Management of each department and employees in order to set risk management objectives, identify and manage risk at operation level. Chief Executive Officer continuously monitors risk management result to ensure the effectiveness and efficient of risk management system to accomplish the Company’s goals and strategies. In addition, The Risk Management Committee follows up the accomplishment of risk management by considering the management action plans and the reliable measured results of the plans. At each meeting, the responsible management reports the results of risk management approach which identified in the previous meeting to the Risk Management Committee to discuss whether risk level has been successfully mitigated, thus resulting in effective risk management. Every quarter, the Risk Management Committee submits risk management report results to the Audit Committee, the Board of Directors and the Executive Committee for closely monitoring to ensure that its risk appetite is acceptable and the Company is able to accomplish its goals.

C - Ievel Executive (Member)

Head of Legal (Member)

Internal Control

Amidst the current rapidly changing business environment and models, AIS is dedicated to designing and implementing efficient internal control system, and conducting them in a continued effectiveness manner. The internal control system must be agile in adapting to changes, driving the Company to the goals efficiently and effectively. Having a good internal control system is an important mechanism for the Company’s achievement of objectives and success. The Board of Directors has delegated to the management, executives, and all personnel the joint-responsibilities to select, develop, and implement appropriate controls - mitigating operational, reporting, and compliance risks - in their operations considering the costs and the benefits. The internal controls reduce the risks to acceptable level giving assurance that AIS achieves its objectives in relation to the missions and strategies. The Company applies the Internal Control – Integrated Framework of The Committee of Sponsoring Organizations of the Treadway Commission (COSO) comprising 5 components and 17 principles to the Company’s operation, management, and internal control system. In the Board

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of Directors meeting no. 2/2015 on 5 February 2015, the directors have assessed the adequateness of the Company’s internal control system in accordance with the Securities and Exchange Commission Thailand (SEC) and concluded that the overall internal control system is adequate and effective. In 2014, the Company’s external auditor, KPMG, evaluated the effectiveness of the Company’s internal control system and concluded that there was no material internal control weakness.

AIS system of internal control consists of 5 components and 17 principles as follows: Control Environment 1.

AIS demonstrates commitment to integrity and ethical values. The Code of Business Ethics has been formally established in relation to the fair and transparent business operations responsible to every stakeholder including society and the environment. There are stipulations prohibiting actions which may have conflict of interests or damage the Company.

The Business Ethics Committee strengthens the Company’s awareness, plans trainings, corresponds to any inquiry, and makes interpretations relating to the Code of Business Ethics, to ensure that directors, management, and all personnel understands and are able to comply with them accordingly. Processes are in place to communicate the Code and relating penalty clauses to all personnel and external parties.

The Whistle Blowing Policy has also been established to provide secured complaint channels to both internal and external parties – via internal ‘Nokweed’ and external ‘AuditCommittee@ais.co.th’ - in order to prevent, detect, and remedy frauds and misconducts in a timely manner. The complaints are investigated by appointed investigation teams and the results are reported to the Audit Committee and/or the Board of Directors. Proper penalties are charged. And the internal control system is improved to prevent the future occurrence.

The Internal Audit Office has been appointed to assess understanding and evaluate adherence to the Code. The Business Ethics Committee annually reports

its performance to the Executive Committee and periodically revises and updates the Code to include possible or new incidents.

The Board of Directors oversees AIS system of internal control independently. The board consists of more than one-third independent directors. Its members are experts, skilled, and qualified to oversee the development and performance of internal control which includes the control environment, the risk assessment, the control activities, the information and communication, and the monitoring activities. The authorities and responsibilities of the board and each committee are clearly defined and segregated from the management.

AIS establishes clear structures, reporting lines, authorities, and responsibilities aligning with business model and legal environment to maximize efficiency and effectiveness of operations and internal controls. Crucial segregation of duties among structures provides checks and balances. Authority in management and operating levels are clearly defined, assigned, and limited.

4. AIS demonstrates commitment to attract, develop, and retain competent personnel. Relating policies and procedures have been clearly established and periodically assessed for their implementation effectiveness. The Company established mentoring process allowing supervisors to give consults to their subordinates on improvement. Succession plans for personnel in essential positions are defined and in place. 5.

AIS enforces each personnel’s accountability for achievement of their assigned internal control responsibility through reporting lines directives, and communication of clear policies and procedures to enable strict conformance. Supervisors are also required to, by themselves, assess and assure the effectiveness of internal controls under their supervision (Control Self-Assessment: CSA).

The Board of Directors and the management establish and communicate clear performance evaluation procedures and performance measures

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to motivate and reward performing personnel, and to manage any non-performances. The performance measures include adherence to the Code of Business Ethics, achievement of short-term and long-term objectives, and achievement of internal controls. Process is in place to adjust performance pressures of the management and personnel in case that they are excessive and possibly resulting in frauds or internal control’s cutting corners.

Risk Assessment 6.

AIS specifies objectives with sufficient clarity to enable the identification and assessment of risks relating to objectives. For example, objectives are categorized as follows:

• Goals are clearly stated and practical. They support and are align with the Company’s missions and strategies. • The Company’s resources are managed and utilized efficiently and economically to achieve established objectives. • The Company’s assets, information, reputation, and personnel are safeguarded. • Process, policies, and procedures are continuously improved and updated benchmarking relevant international standards. • Financial and non-financial reporting are accurate, reliable, and timely. Financial reporting accurately and completely complies with the generally accepted accounting principles, represents the Company’s financial position and rights and obligations, and has full disclosures, reflecting activities and performances of the Company. • Internal and external regulations, policies, and laws relating to the Company’s business are being adhered to. • CSA is properly implemented in crucial processes. 7.

AIS identifies and analyzes all types of risk in both corporate and operational levels which may affect achievement of the objectives. Internal and external factors are considered to identify and analyze strategic risk, operational risk, reporting risk, compliance risk, and information technology risk.

The Company assesses the significance of risks based on impact and likelihood of risk occurring.

The management and personnel are involved in the risk management process and consideration of risk responses which include risk acceptance, avoidance, reduction, and sharing.

The Company supports and develops the risk awareness and risk management in each department with assisting tools such as ERM and CSA. 8.

AIS assesses fraud risk and establishes measures to prevent and detect frauds especially in high-fraud-risk processes such as processes relating to cash, inventory, procurement, financial reporting etc. The Company performs an analysis to identify irregular financial ratios, continuously monitors for irregular business transactions, implements various assets safeguarding measures, and launches the whistle blower program. In addition, the Audit Committee scrutinizes information and questions the management on likelihood of fraud occurring and measures implemented to prevent, detect, or remedy frauds.

AIS is developing systematic fraud risk management in order to manage all types of internal and external fraud risks which include loss of assets, fraudulent financial reporting, corruptions, management overrides, misappropriate or misuse of assets.

AIS identifies and analyzes significant changes in the external environment, the business model, and leadership which may affect the business, internal controls, and financial reporting. Appropriate responding measures to those changes have been prepared and established.

Control Activities 10. AIS selects and develops control activities aligned with the Company’s risks and specific characteristics such as the business environment, complexity, nature, and scopes of operations, covering all relevant business processes and levels of activities. There are considerations on a proper mix of control activity types, a balance of manual and automated controls, and an integration of preventive and detective controls. Conflicted duties such as transaction recording, authorizing, approving, and assets handling are also segregated to provide proper checks and balances.

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11. AIS selects and develops general controls over technology to help ensure that the Company’s IT systems are always available, protected from unauthorized access, and supporting achievement of management’s objectives. Examples of the controls are: • Technology infrastructure controls: centralized technical infrastructure operations, IT system change management, business continuity management program etc. • Security management controls: access rights controls, security controls, system and network irregularity monitoring, information security management system’s external assessment etc. • Technology acquisition, development, and maintenance controls: strict system procurement process, internal and outsourced system developer management and competency program, revision of system development manual, system source code control etc. 12. AIS deploys control activities through clear policies and procedures to let personnel understand what the management expects and how to implement the controls correctly. Competent personnel who are responsible, steps and timing of implementation, and corrective actions on matters identified as a result of the controls are established. The policies and procedures are periodically reassessed for continued relevance and effectiveness. The Company has established policies to ensure that all business decisions are approved based on the Company’s interest, and on an equitable agreement with independent parties (arm’s length transaction). The associated companies and subsidiaries are subjected to the equivalent policies and are monitored by their directors or management appointed by the Company.

Information & Communication 13. AIS uses relevant and quality information to support internal control. Data is gathered from internal and external considering costs and benefits. The data are gathered and processed by information systems into information supporting the functioning of internal control.

The Board of Directors receives sufficient information for the decision making in the meetings in a timely manner 7 or 14 days before the meetings as stipulated by laws and regulations. The information includes relevant details, backgrounds, options, and effects to the Company. In the meetings, each director’s opinions, recommendations, observations, inquiries, disagreements, and reasoning are recorded for subsequent board assessment.

14. AIS has an internal communication system to relay internal control’s objectives, policies, procedures, and accountabilities to every level of personnel in every department nationwide. Various communication channels are selected appropriately for the communication efficiency and effectiveness. For examples, there are communications via the intranet, newsletters, ‘CEO Talk Weekly in Somchai’s style’, and confidential Whistle Blower hotline.

The Company reports material information to the Board of Directors. The board members have access to and can request reviews of any information needed to exercise their oversight responsibilities. They can freely communicate with the external auditors, internal auditors, and other established contact persons other than the senior management. Extraordinary formal or informal meetings with the management can also be arranged.

15. AIS has an efficient communication system with external stakeholders using proper channels to support internal control. For examples, there are communications via the internet, social media, investor relations, service quality complaint centers, and Whistle Blower hotline to the Audit Committee via AuditCommittee@ais.co.th.

Monitoring Activities 16. AIS instructs managers and supervisors in every department to continuously monitor for deficiencies of the internal control to ascertain the continued effectiveness of 5 components and 17 principles of the internal control. There are also separate evaluations from independent parties such as internal auditors or external quality assessors. The frequency of the evaluations varies on rate of changes occurring.

Annual Report 2014 Advanced Info Service Public Company Limited

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17. When the internal control deficiencies are identified, AIS evaluates their significances and communicate them to responsible parties for timely corrective actions. Material deficiencies and their correction progress are reported to the Board of Directors and the senior management as appropriate. Fraud incidents or clues, violation of law, or any other irregularities which may materially affect the Company’s reputation or financial position will be immediately informed to the Board of Directors.

I n i t s I T s y s t e m r o l e , t h e O f fi c e p r o v i d e s recommendations during the development of business systems to ensure that sufficient and circumspect internal controls are in place before the launch. The Office also audits information security management system in the Company per compliance with ISO 27001:2013 standard.

Internal Audit

The Internal Audit Office performs its duties independently from the management. It reports functionally to the Audit Committee and administratively to the Chief Executive Officer. Supporting the Company’s achievement of objectives and goal, the office evaluates the efficiency and effectiveness of the internal control, risk management, governance system, and also provides consultation. The annual audit plan is approved by the Audit Committee. The risk based audit approach is applied focusing on issues which remain high risks to the Company’s objectives and goals, key control points, and fraud prevention measures. The Office utilizes internationalstandard auditing techniques benchmarking against ASEAN internal audits. The Internal Audit Office is another secured channel to report misconduct and fraud. All case tipped by internal staffs or external parties will be act on in accordance with the Whistle Blower Policy. The case results are quarterly reported to the Audit Committee. In its role relating to COSO 2013, the Office provides training on the internal control - integrated framework to departments and other companies in the Group; and gives consults relating to the SEC questionnaire on internal control. The Office also evaluates internal control system of every audited process according to the COSO 2013 framework. In its role relating to CSA, the Office facilitates CSA implementation by offering counseling and group-training workshops (CSA Facilitator) and evaluates the effectiveness of CSA implementation by the supervisors (CSA Validation).

The Internal Audit Office adheres to the International Professional Practices Framework and the internal audit charter. The Office revises the internal audit manual and conducts the internal audit’s quality self-assessment on an annual basis. It also receives the external assessment every five years. And in the last external assessment in 2011, it was rated ‘generally conforms with the international standards’ and ‘performed remarkably well in relation to the qualitative benchmarking against high performing internal audit functions internationally’. This enhances the Company’s reputation and supports sustainable development of internal control, risk management, and governance system, adding value to the stakeholders. The Chief Audit Executive (CAE) acts as the secretary to the Audit Committee supporting their oversight responsibilities and accountability which are assigned by the Board of Directors to the Audit Committee. Additionally, the CAE gives advices relating to the internal control, risk management, business ethics, information security etc. (Further information about the CAE is in page 41) The Internal Audit Office encourages all internal audit staffs to be integrated auditors who can perform various aspects of audits which include business, information technology and engineering systems audits; and be innovative in developing more effective audit techniques. There is also a strong focus on staffs’ professional development. At present, there is a total of 29 professional certificates which are eight Certified Internal Auditors (CIA), five Certified Information System Auditors (CISA), one Certified Information Systems Security Professional (CISSP), eleven Certification in Risk Management Assurance (CRMA), three Certified Public Accountants (CPA) and one Tax Auditor (TA) in the Internal Audit Office. The remaining staffs are studying CIA, CISA, CRMA, CCSA (Certification in Control Self-Assessment), and CFE (Certified Fraud Examiners).

076

Related Transactions The Company and its subsidiaries have entered into related transactions with connected persons. All of these related transactions are made in the ordinary course of business and on general trading conditions.

its subsidiaries is responsible for reviewing the related transactions every quarter to ensure that no conflict of interest will be occurred in order to maximize the overall company’s benefits.

To be aligned with the Security and Exchange Act (No. 4) B.E. 2551, Article 89/12 (1), the Company’s Board of Directors has approved in principle, on 13 August 2008, that the management shall have the authority to undertake the related transactions, whereas those transactions are transactions with general trading conditions. The approval of the above transactions shall not constitute such authority to allow the director, an executive, or a related person to approve with a conflict of interest.

The practice and disclosure about the related transactions have been followed up strictly under the notifications or rules of the Stock Exchange of Thailand.

For approval process, the related transactions shall be processed in the same practice as other general trading transactions with outside parties with the authorized executives designated and empowered to endorse up to a certain limit of budget according to their respective rank and position. The Audit Committee of the Company and

Related parties / Relation to the Company

Detail of Transactions

The Company and its subsidiaries provide mobile services and handset sales to INTOUCH. INTOUCH is a major shareholder, holds 40.45%, and has joint directors 1. Service income • Mr. Somprasong Boonyachai 2. Other income • Mr. Vithit Leenutaphong 3. Other service expenses 4. Interest expenses 5. Other payables 6. Trade accounts receivable 1. Intouch Holding Company Limited (INTOUCH)/

For the fiscal year ended 31 December 2014 and 2013, the Company and its subsidiaries had the related transactions in which the auditors had disclosed in the notes to audited financial statements and these transactions have been reviewed by the Audit Committee. The Audit Committee had an opinion that all related transactions are reasonable and based on the normal course of business. The Company charges / purchases products and services with related parties at reasonable prices and those prices are comparable to the market rate with general trading conditions. Details of related transactions are as follows;

31 December 2014 31 December 2013 (Million Baht) (Million Baht) Company Consolidated Company Consolidated

0.02 - 3.62 - 0.78 0.01

0.67 0.45 3.57 0.42 0.78 0.24

The Company and its subsidiaries charge service fee and sale handset at the same rate as with external customers.

0.42 0.19 1.71 - 0.04 1.71

Rational and Necessity

0.80 0.43 1.71 0.09 1.71

077

Annual Report 2014 Advanced Info Service Public Company Limited

Related parties / Relation to the Company

Detail of Transactions

31 December 2014 31 December 2013 (Million Baht) (Million Baht) Company Consolidated Company Consolidated

2. Thaicom Public Company The Company leases satellite transponder on the Thai Limited (THAICOM)/ Com 1A from THAICOM INTOUCH is a major and contract will effective shareholder, holds 41.14%, and until 21 June 2015. The Mr. Somprasong Boonyachai Company pays US$ is a joint director. 1,700,000 per year. The Company and its subsidiaries provide domestic and international phone services, handset sales and space for transponder equipment installation to THAICOM. 1. Service income 2. Other income 3. Rental and service expenses 4. Accrued expenses 5. Trade accounts receivable 6. Accrued income

THAICOM is the only satellite operator in Thailand. The Company is charged at the same rate as with external customers.

0.73 -

2.73 0.46

58.26 66.37 9.03 9.03 - 0.01 - 0.03

1.62 -

2.90 0.24

51.30 51.30 4.51 4.51 0.05 0.10 - 0.10 MB is a creative advertising agency with good understanding of the Groupâ&#x20AC;&#x2122;s products & services and maintaining information as strictly confidential.

The Company and its subsidiaries hire MB as an agency to provide publicity for the Group products / INTOUCH is a major shareholder, holds 99.96%, and services to customers through Mr. Somprasong Boonyachai various media on a job-by-job basis. The Company and its is a joint director. subsidiaries provide mobile and handset sales to MB. 3. Matchbox Company Limited (MB)/

1. Advertising and other service expenses 2. Other payables 3. Accrued expenses 4. Trade accounts receivable

Rational and Necessity

25.05 0.61 9.67 -

283.72 29.38 65.88 -

470.92 1,340.77 15.35 55.99 45.49 325.47 0.01 0.01

Advertising fee is comparable to other agencies.

078

Related parties / Relation to the Company

Detail of Transactions

31 December 2014 31 December 2013 (Million Baht) (Million Baht) Company Consolidated Company Consolidated

4. Teleinfo Media Company The Company and its subsidiaries hire TMC to Limited (TMC)/ provide the following services; INTOUCH is an indirect major 1) Furnishing information or shareholder. content on mobile phone such as astrology, lotto, and comic story. 2) Outsourcing call center

TMC has a specialization in providing information for content on mobile. - The Company and its subsidiaries pay service fee (Content on mobile) by the percentage of revenue. Rate is charged at the same rate as with other content providers.

The Company and its subsidiaries pay service fee on monthly basis. The Company and its subsidiaries provide mobile services and handset sales to TMC. 1. Service income 2. Other income 3. Service expenses 4. Trade accounts payable 5. Other payables 6. Accrued expenses 7. Trade accounts receivable

- Outsource call center fee is comparable to other call center providers. 1.18 - 3.13 0.12 - - 0.47

1.81 - 39.12 2.11 - 4.97 0.47

2.85 - 15.54 0.71 - - 0.68

2.89 0.61 50.36 2.20 0.02 4.29 0.73

The Company and its subsidiaries hire ITAS to provide SAP solution and application development, and design and advertise INTOUCH is a major shareholders, holds 100% and the Group products/service Mr. Somprasong Boonyachai on website. is a joint director. The Company provides mobile services to ITAS.

ITAS provides SAP application development and improvement, including maintenance services. The services are timely and rapidly while the service fee is reasoable.

5. I.T. Applications and Services Company Limited (ITAS)/

1. Service income 2. Other income 3. Service expenses 4. Trade accounts payable 5. Accrued expenses 6. Trade accounts receivable

Rational and Necessity

- - 0.30 - - -

0.01 - 88.13 3.06 15.33 -

0.01 0.08 - - - 0.03

0.01 0.08 69.05 7.01 0.03

ITAS charges the Company and its subsidiaries at comparable rate to other SAP consultant companies. The service charge depends on the type of work and the level of consultant.

079

Annual Report 2014 Advanced Info Service Public Company Limited

Related parties / Relation to the Company

Detail of Transactions

31 December 2014 31 December 2013 (Million Baht) (Million Baht) Company Consolidated Company Consolidated

The Company and its subsidiaries enter into an agreement with companies of SingTel group for the joint SingTel is a major shareholder international Roaming operation. The Company of the Company, holds pays the salary and 23.32%. remuneration to Singapore Telecom International Pte Ltd. (STI) for sending its operational staff. The expense is charged on an actual basis.

The International Roaming with SingTel is under the ordinary course of business since the Company and its subsidiaries provide international mobile service to foreign operators.

6. Group of SingTel Strategic Investments Private Limited (SingTel)/

1. Service income 2. Service expenses 3. Salary and other remuneration 4. Trade accounts payable 5. Other payables 6. Accrued expenses 7. Trade accounts receivable 8. Other receivable 9. Accrued income

Rational and Necessity

77.67 32.72 84.41 20.34 - 10.07 - 0.11 2.41

434.59 470.84 84.41 21.37 - 11.80 16.62 0.11 2.41

514.20 593.26 233.21 468.97 57.38 - 11.61 23.62 93.80 - 28.48

57.38 21.74 11.61 56.78 95.77 0.02 30.18

Both parties charge each other at the accepted price by deduct profit from their customers. STI has an agreement with the Company that STI needs to provide operational staff to help the Company for management and any technique. The Company and its subsidiaries pay the service fee to STI by the actual basis according to the agreement.

080

Related parties / Relation to the Company

Detail of Transactions

31 December 2014 31 December 2013 (Million Baht) (Million Baht) Company Consolidated Company Consolidated

The Company and its subsidiaries hire CSL for providing the internet service INTOUCH is an indirect major by connecting the network within and outside the shareholder. country, and selling internet prepaid card through its distribution channel.

CSL provides expertise on internet service by connecting internet data from local to worldwide through network.

7. CS Loxinfo Public Company Limited (CSL)/

The Company and its subsidiaries are charged at the same rate as with external customers.

The Company and its subsidiaries provide mobile services, handset sales and datanet equipmentâ&#x20AC;&#x2122;s rental to CSL. 1. Service income 2. Other income 3. Rental and service expenses 4. Trade accounts payable 5. Other payables 6. Accrued expenses 7. Trade accounts receivable 8. Other receivable 9. Accrued income

0.65 - 3.75 0.34 - - 0.05 - -

12.55 5.81 8.25 0.39 0.04 0.34 2.42 - 0.99

1.17 - 3.81 0.36 - - 0.05 - -

41.73 1.32 4.15 0.36 0.04 6.28 0.01 2.06

The Company and its subsidiaries hire ADV to provide content and value INTOUCH is an indirect major added service for mobile phone to customers such shareholder. as game, ringtone, wallpaper and etc. by charging per month.

ADV has a specialization in designing and creating website with variety contents which suit to the Company and its subsidiariesâ&#x20AC;&#x2122; need.

8. AD Venture Public Company Limited (ADV)/

The Company and its subsidiaries provide mobile services, software mall and handset sales to ADV. 1. Service income 2. Other income 3. Service expenses 4. Trade accounts payable 5. Accrued expenses 6. Trade accounts receivable 7. Accrued income

Rational and Necessity

18.89 19.48 - 0.72 - 332.23 - 22.77 - 22.06 1.19 1.19 - -

16.30 16.32 - 1.46 0.03 481.91 - 38.03 - 39.03 1.65 2.47 - 0.02

The Company and its subsidiaries pay service fee (Content on mobile) by the percentage of revenue. Rate is charged at the same rate as with other content providers.

081

Annual Report 2014 Advanced Info Service Public Company Limited

Related parties / Relation to the Company 9. DTV Service Company Limited (DTV)/

Detail of Transactions

31 December 2014 31 December 2013 (Million Baht) (Million Baht) Company Consolidated Company Consolidated

The Company hired DTV to advertising on satellite television.

DTV has a specialization in media service on satellite and distribute satellite dish, use via by television and internet.

INTOUCH is an indirect major The Company provide shareholder. mobile services to DTV.

1. Service income 2. Service expenses 3. Trade accounts receivable 10. Lao Telecommunications The Company and its Company Limited (LTC)/ subsidiaries have cooperated with LTC to provide INTOUCH is an indirect major international roaming. shareholder. 1. Service income 2. Service expenses 3. Trade accounts payable 4. Accrued expenses 5. Trade accounts receivable 6. Accrued income 11. Thai Yarnyon Co., Ltd. Group (TYY)/ Mr. Vitit Leenutaphong is a joint director.

0.06 0.90 -

0.33 2.07 - - 0.07 -

0.06 1.20 0.01

5.27 12.98 0.28 0.28 1.16 4.16

0.13 1.20 0.01

0.89 3.98 - 0.07 1.28 -

0.13 1.40 0.01

5.37 8.95 0.52 0.79 1.63 0.36

The Company is charged at the same rate as with external customers. LTC, the telecommunications service provider in Laos, provides fixed line, mobile phone, internet, and international roaming services. Roaming price is based on market rate.

TYY is a car dealer with specialist in car maintenance services.

The Company and its subsidiaries hire TYY to provide car maintenance services and space rental for base station. The Company and its subsidiaries provide mobile services to TYY. 1. Service income 2. Service expenses 3. Trade accounts payable 4. Trade accounts receivable

Rational and Necessity

0.50 0.08 - 0.05

2.48 0.41 - 0.27

1.77 0.60 - 0.25

1.91 0.85 0.03 0.27

- The Company is charged at the same rate as with external customers. - Rate of base stations rental is comparable with another lessor in the nearly area.

082

Related parties / Relation to the Company 12. Ookbee Company Limited (OOKB)/ INTOUCH is a direct shareholder, holds 22.06%.

Detail of Transactions The subsidiary (MMT) hire Ookbee to provide E-booking application on smartphones and tablets by charging per monthly. AWN provides mobile services to Ookbee. 1. Service income 2. Service expenses 3. Trade account payable 4. Accrued expenses 5. Trade account receivable

13. Information Highway Company Limited (IH) AIS is an indirect major shareholder.

31 December 2014 31 December 2013 (Million Baht) (Million Baht) Company Consolidated Company Consolidated

Ookbee is a provider digital publication and E-Booking company such as books, magazines or newspaper on smartphones, tablets and computers. - - - - -

0.05 11.77 0.73 0.73 -

- - - - -

0.02 10.42 0.24 0.27 0.01

IH provides transmission network services to the company and its subsidiaries. 1. Interest income 2. Short term loan to

Rational and Necessity

MMT pays service fee (Content on mobile) by the percentage of revenue. Rate is charged at the same rate as with other content providers. IH provides transmission network services.

- -

1.82 95.00

- -

Annual Report 2014 Advanced Info Service Public Company Limited

083

Audit Committee Report 2014 To the Shareholders of Advanced Info Service Public Company Limited The Audit Committee of Advanced Info Service Public Company Limited is composed of three independent directors with combined skills and expertise in finance, accounting, laws, and business administration. All members possess adequate qualifications as required by the Audit Committee Charter and the regulations of the Securities and Exchange Commission, Thailand (SEC) and the Stock Exchange of Thailand (SET). Its members include: 1. Mr. Krairit Euchukanonchai 1/ 2. Mrs. Tasanee Manorot 3. Mr. Surasak Vajasit

Chairman of the Audit Committee Member of the Audit Committee Member of the Audit Committee

And Mrs. Suvimon Kulalert, the Company’s Chief Audit Executive, acts as secretary of the Audit Committee. The summary of meeting attendance of the members in 2014 is shown in “Management Structure”. The Audit Committee operates independently and performs its duties and responsibilities as assigned by the Board of Directors in overseeing the corporate governance and the internal control systems to ensure that the Company’s business operations were carried out for the interests of its shareholders and other stakeholders and that the Management executed their duties with integrity, accountability, and in accordance with the Company’s policies. The Audit Committee’s operations in the year 2014 are summarized below: 1. The Audit Committee reviewed the quarterly and annual separate and consolidated financial statements of the Company and its subsidiaries for 2014 after they had been reviewed and audited by the external auditor. The Audit Committee also discussed the significant accounting policies, estimates, and judgments applied in the preparation of these reports with the Management and the external auditor prior to the reports being concurred and submitted to the Board of Directors for approval. 2. The Audit Committee acknowledged the external audit plan and reviewed the external auditor’s management letter recommending improvements to the internal control system. The Audit Committee also held a meeting with the external auditor without the Management’s participation for the independent discussion on important issues concerning significant information in the financial statements and any points of concern arising from their reviews and audits. The Audit Committee concluded that the internal control systems for financial reporting process were appropriate to ensure that the financial statements fairly present the Company’s financial position and performance in all material respects, in accordance with the applicable Thai Financial Reporting Standards and Thai Accounting Standards. 3. The Audit Committee reviewed related party transactions or any transactions that potentially conflicts the Company’s interests and concluded that the Management conducted these transactions in the interest of the Company and at an arm’s length basis, with general business trading condition and reasonable price which had been compared with the general market price in such industry. 4. The Audit Committee reviewed the Company’s compliance with the Securities and Exchange Act, the regulations of the SEC and SET, and other relevant laws, as well as business commitments with third party agreements. The Audit Committee concluded that the Company fully complied with the aforementioned regulatory requirements in all material respects. The Audit Committee and external auditor assures that all material relevant issues under dispute, which the Management believes that such issues shall turn out to be in the Company’s favour, were disclosed in the notes to the financial statements adequately.

084

5. The Audit Committee reviewed the effectiveness and adequacy of the internal control systems. The internal audit reports during 2014 were reviewed. The internal control system was assessed according to the Internal Control Integrated Framework 2013 of the Committee of Sponsoring Organisations of the Treadway Commission (COSO) as well as the SEC guideline. The Management actions, pertaining to the recommendations in the internal audit and external audit reports, were regularly communicated to and monitored by the Audit Committee whereby root causes of the issues would be further evaluated in order to provide guidelines for the management to prevent future potential loss. Additionally, the Audit Committee had paid a visit to the Company’s operation sites to gain more business process insight and given recommendations to further enhance the effectiveness of the internal control systems. No major internal control deficiencies were identified and the Audit Committee concluded that the internal control systems were appropriate. 6. The Audit Committee reviewed the risk management system in four meetings with participation of representatives from the Risk Management Committee during 2014. Recommendations to improve efficiency of risk management system were made. The Audit Committee concluded that the risk management system was properly designed, implemented, and functioning. 7. The Audit Committee reviewed the Company’s adherence with Reporting and Investigation of Misconduct and or Fraud and Whistleblower Protection Policy. All complaints and investigation results by the Investigation Committee were quarterly communicated to the Audit Committee whereby appropriate actions and fair treatments could be recommended additionally to be in compliance with the Corporate Governance Policy. Five cases were reported in 2014, one of which was identified as fraud after the investigation. Additionally, the Audit Committee is one of the channels for both internal and external parties to securely report complaints. 8. The Audit Committee was responsible for overseeing the Internal Audit Department and held a formal exclusive meeting with the Chief Audit Executive to ensure that all assurance and consulting activities were performed effectively and efficiently. In doing so, the Audit Committee reviewed its independence, internal audit reports during 2014, and its performance according to key performance indicators. The Audit Committee also evaluated the performance of the Chief Audit Executive and considered internal audit quality improvement plans based on the evaluations and suggestions received from the audited departments. The Audit Committee approved the internal audit plan for 2015 which was based on the Company’s key risk areas. The internal audit activities emphasized on the evaluation of the effectiveness of key control points and control self-assessment in each process. The Audit Committee also reviewed the internal audit’s scope of work; responsibilities; annual budget, sufficiency of manpower, competency, and audit tools; for the internal audit quality conforming to international standards. The Audit Committee concluded that the internal audit processes had been operating appropriately, effectively, and independently, in conformity with the International Standards for the Professional Practice of Internal Auditing. Its annual audit plan aligned with the Company’s goals and key risk areas. The Internal Audit Department had achieved its performance targets and demonstrated continuous improvement in respect of its personnel development and tools advancement. 9. The Audit Committee quarterly reported its operation to the Board of Directors and provided to the Management useful recommendations, which were subsequently adopted. 10. The Audit Committee reviewed the Audit Committee Charter to propose to the Board of Directors its amendments to be aligned with the Corporate Governance Policy, relevant regulations, and the Reporting and Investigation of Misconduct and or Fraud and Whistleblower Protection Policy.

085

Annual Report 2014 Advanced Info Service Public Company Limited

11. The Audit Committee took into consideration the nomination and appointment of the external auditor and the annual audit fee for 2015. This process entailed assessment of the current external auditor for its independence, performance during the year 2014, knowledge, competency, experience in the telecommunications industry, available team support and the competitiveness of the audit fee as well as auditor rotation required by the notification of the Capital Market Supervisory Board. After careful consideration, the Audit Committee concluded that KPMG Phoomchai Audit Ltd. external auditors had acted independently, demonstrated a high degree of expert knowledge and professional experience required for the purposes of conducting the external audit for the Company, and delivered satisfying performance result. The annual audit fee approved at the general shareholders meeting last year was justifiable. 12. The Audit Committee’s performance assessment was conducted annually. It was participated by the Audit Committee’s members themselves, the Board of Directors, the external auditors, and the Management assessing its composition, authority, independence, meetings, auditing performance, and duties on reviewing and expressing opinions, all of which should benefit the Company on internal control and risk management systems, financial reporting, external audit process, internal audit process, and the Company’s compliance with applicable regulatory requirements. Its performance was due to be benchmarked against guidelines from the SEC and the Audit Committee Charter. The result showed that the Audit Committee had performed its duties and responsibilities with sufficient skills, expertise, diligence, and independence. The Audit Committee had full access to all pertinent information from management, employees and associated parties. The Audit Committee had been given creative and useful comments and recommendations benefiting all stakeholders. In summary, the Audit Committee determined that the Board of Directors, Management, and Executive Directors had performed their duties with integrity and diligence in pursuit of the Company’s goals. And the Company demonstrated commitment to effective and transparent Corporate Governance which included appropriate risk management and internal control system.

Mr. Krairit Euchukanonchai

Chairman of the Audit Committee

Mrs. Tasanee Manorot

Audit Committee member

Mr. Surasak Vajasit

Audit Committee member

Remark : 1/ The Board of Directors meeting no.4/2014 of Advanced Info Service Public Company Limited (the Company), held on 6 May 2014 resolved to appoint Mr. Krairit Euchukanonchai to be a member of the Audit Committee.

086

Financial Report

087

Annual Report 2014 Advanced Info Service Public Company Limited

Board of Directors’ Responsibility for Financial Reporting The Board of Directors is responsible for Advanced Info Service Public Company Limited’s financial statements and Advanced Info Service Public Company Limited and its subsidiaries’ consolidated financial statements, including the financial information presented in this annual report. The aforementioned financial statements are prepared in accordance with generally accepted accounting principles, using careful judgement and the best estimation. Important information is adequately and transparency disclosed in the notes to financial statements for the Company shareholders and investors. The Board of Directors provides and maintains risk management system and appropriate and efficient internal controls to ensure that accounting records are accurate, reliable and adequate to retain its assets as well as to prevent fraud or materially irregular operations. In this regard, the Board of Directors has appointed an Audit Committee comprising independent directors to be responsible for reviewing quality of the financial reports, internal controls, internal audit and risk management system. The Audit Committee also reviews a disclosure of related party transactions. All their comments on these issues are presented in the Audit Committee Report included in this annual report.

The Board of Directors considers the Company’s overall internal control system satisfactory and provides credibility and reliability to Advanced Info Service Public Company Limited’s financial statements and Advanced Info Service Public Company Limited and its subsidiaries’ consolidated financial statements for the year ended 31 December 2014. The Board of Directors also believes that all these financial statements have been prepared in accordance with generally accepted accounting principles and related regulations.

Mr. Vithit Leenutaphong

Chairman of the Board of Directors

Mr. Allen Lew Yoong Keong

Chairman of the Executive Committee

Financial Report

The separate financial statements and the consolidated financial statements of the Company have been examined by an external auditor, KPMG Phoomchai Audit Limited. To conduct the audits and express an opinion in accordance with generally accepted auditing standards, all records and related data, as requested, are provided to the auditor. The auditor’s opinion is presented in the auditor’s report as a part of this annual report.

088

Independent Auditors’ Report To the Shareholders of Advanced Info Service Public Company Limited I have audited the accompanying consolidated and separate financial statements of Advanced Info Service Public Company Limited and its subsidiaries (the “Group”), and of Advanced Info Service Public Company Limited (the “Company”), respectively, which comprise the consolidated and separate statements of financial position as at 31 December 2014, the consolidated and separate statements of income, comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Consolidated and Separate Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated and separate financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility

My responsibility is to express an opinion on these consolidated and separate financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated and separate financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion

In my opinion, the consolidated and separate financial statements present fairly, in all material respects, the financial position of the Group and the Company, respectively, as at 31 December 2014 and their financial performance and cash flows for the year then ended in accordance with Thai Financial Reporting Standards.

(Charoen Phosamritlert) Certified Public Accountant Registration No. 4068 KPMG Phoomchai Audit Ltd. Bangkok 5 February 2015

089

Annual Report 2014 Advanced Info Service Public Company Limited

Statement of Financial Position

Advanced Public Company Limited and and its Subsidiaries AdvancedInfo InfoService Service Public Company Limited its Subsidiaries Statement of financial position Consolidated

Assets Assets

Separate

Consolidated Financial Statements Separate Financial Statements financial statements financial statements 3131December 3131December December December 2014 2013 2014 2013 Note Note 2014 2013 2014 2013 (in Baht) (in Baht)

Current assets Cash and cash equivalents

14,258,066,402

11,473,120,876

1,679,292,348

3,964,630,780

Specifically-designated bank deposits

3,709,327,905

3,781,141,127

Current investments

1,542,448,983

1,576,941,592

Trade accounts receivable

5,9

10,415,388,789

10,264,184,371

9,944,049,122

11,529,604,208

Other receivables

5,10

5,900,650,118

4,851,425,229

1,987,196,143

1,205,237,858

Short-term loans to related parties

95,000,000

35,589,760,000

35,386,900,000

Inventories

2,519,497,229

2,864,932,209

52,163,408

80,021,810

Other current assets Total current assets

686,131,869

153,136,150

140,976,544

39,126,511,295

34,964,881,554

49,393,437,565

52,166,394,656

Non-current assets 12

Investments in subsidiaries

7,912,145,488

7,912,143,008

Other long-term investments

58,399,310

104,360,750

46,999,310

93,160,750

Property, plant and equipment

60,702,586,423

35,922,236,163

1,103,188,064

1,580,204,790

3(b),15

8,738,038,803

20,499,802,732

8,738,038,803

20,491,416,123

Intangible assets under the Agreements for operations Goodwill

34,930,692

Spectrum license

12,624,410,361

13,600,648,306

Other intangible assets

2,504,683,294

2,178,034,730

112,532,688

159,337,759

Swap and forward contracts receivable

568,880,941

653,397,782

568,880,941

653,397,782

Deferred tax assets

1,441,855,941

3,557,332,641

667,900,342

3,216,666,321

Other non-current assets

550,265,957

510,084,969

999,138,724

671,294,457

87,224,051,722

77,060,828,765

20,148,824,360

34,777,620,990

126,350,563,017

112,025,710,319

69,542,261,925

86,944,015,646

Total non-current assets Total assets

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

Financial Report

Investments in associate

090

Statement of Financial Position

Advanced Company Limited and and its Subsidiaries AdvancedInfo InfoService ServicePublic Public Company Limited its Subsidiaries Statement of financial position

Liabilitiesandand equity Liabilities equity

Consolidated Separate Consolidated Financial Statements Separate Financial Statements financial statements financial statements 3131December 31 December December 31 December 2013 2014 2013 Note 2014 Note 2014 2013 2013 (in Baht) 2014 (in Baht)

Current liabilities Short-term loans from financial institutions

4,000,000,000

Trade accounts payable

5,21

11,903,114,252

11,718,205,683

1,285,824,610

1,621,377,526

Other payables

5,22

11,188,941,077

9,536,172,211

2,824,131,920

4,925,418,639

Short-term loan from related parties

4,400,000,000

Current portion of long-term borrowings

2,571,630,615

5,303,408,757

2,560,792,322

5,297,776,745

Current portion of spectrum license payable

3,656,250,000

Accrued revenue sharing expenses

5,130,156,868

3,534,750,009

4,989,582,697

3,394,175,838

Unearned income - mobile phone service

2,183,175,400

1,599,664,604

628,770,725

1,134,085,114

Advanced receipts from customers

3,709,327,905

2,985,927,727

Income tax payable

2,195,545,817

2,816,611,446

1,923,263,743

367,976,407

340,245,305

330,908,064

304,012,947

42,906,118,341

45,491,235,742

12,620,010,338

27,000,110,552

Other current liabilities Total current liabilities Non-current liabilities Long-term borrowings

34,478,291,366

15,354,770,702

12,869,374,320

15,339,346,797

Employee benefit obligations

1,499,743,034

1,361,376,034

406,012,895

767,853,695

Spectrum license payable

3,656,250,000

Other non-current liabilities

601,655,751

269,491,753

33,268,900

55,861,060

Total non-current liabilities

36,579,690,151

20,641,888,489

13,308,656,115

16,163,061,552

Total liabilities

79,485,808,492

66,133,124,231

25,928,666,453

43,163,172,104

Authorised share capital

4,997,459,800

Issued and paid-up share capital

2,973,095,330

22,372,276,085

Equity Share capital

Additional paid-in capital Premium on ordinary shares

Retained earnings Appropriated Legal reserve

Unappropriated Other components of equity

500,000,000

20,710,294,423

19,729,332,548

17,742,315,443

17,928,485,775

194,732,371

173,403,605

25,908,614

6,986,352

46,750,398,209

45,748,107,568

43,613,595,472

43,780,843,542

114,356,316

144,478,520

46,864,754,525

45,892,586,088

43,613,595,472

43,780,843,542

126,350,563,017

112,025,710,319

69,542,261,925

86,944,015,646

Equity attributable to owners of the Company Non-controlling interests Total equity Total liabilities and equity

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

091

Annual Report 2014 Advanced Info Service Public Company Limited

Statement of Income

Advanced InfoInfo Service Public Company Limited and and its Subsidiaries Advanced Service Public Company Limited its Subsidiaries Statement of income

Consolidated Financial Statements financial statements

Consolidated

Separate Financial Statements financial statements

ForForthe 31 December December theyear yearended ended 31

For ended3131December December Forthe the year year ended

Note 2014 2014 Note

Separate

2013 2014 2013 2014 Baht) (in(in Baht)

2013

Revenues Revenues from rendering of services and equipment rentals Revenue from sale of goods

125,396,923,290

127,816,101,491

62,030,056,662

106,024,435,809

23,331,862,141

18,995,274,129

8,379,611

516,324,259

Construction income from the Agreements for operations

3(b)

Total revenues

600,261,701

3,766,442,977

600,261,701

3,639,599,320

149,329,047,132

150,577,818,597

62,638,697,974

110,180,359,388

Costs Cost of rendering of services and equipment rentals Revenue sharing expense

(45,206,190,813)

(43,136,095,291)

(27,065,167,097)

(37,444,665,645)

(14,593,801,827)

(24,273,347,402)

(14,593,801,827)

(22,864,248,043)

(23,148,015,893)

(17,760,269,921)

(8,295,132)

(515,767,375)

Cost of sale of goods Construction cost from the Agreements 3(b)

Gross profit

(600,261,701)

(3,766,442,977)

(600,261,701)

(3,639,599,320)

(83,548,270,234)

(88,936,155,591)

(42,267,525,757)

(64,464,280,383)

65,780,776,898

61,641,663,006

20,371,172,217

45,716,079,005

Selling and administrative expenses Selling expenses

(6,219,705,961)

(4,331,356,643)

(647,636,036)

(1,819,177,988)

Administrative expenses

(12,640,674,559)

(10,545,060,955)

(4,727,020,237)

(8,735,287,401)

(18,860,380,520)

(14,876,417,598)

(5,374,656,273)

(10,554,465,389)

Total selling and administrative expenses Profit from sales, services and equipment rentals Investment income Other operating income

46,920,396,378

46,765,245,408

14,996,515,944

35,161,613,616

5,13,29

370,107,076

548,204,710

24,132,238,049

9,544,154,772

329,786,099

322,552,869

857,938,259

627,814,405

Share of loss of associate

(3,625,000)

Impairment loss of assets

13,16

(11,972,822)

188,934,345

(233,001,951)

16,760,622

57,558,526

(183,866,171)

(163,084,715)

(183,076,171)

(162,774,715)

Net foreign exchange gain (loss) Management benefit expenses Finance costs

5,33

Profit before income tax expense Income tax expense

Profit for the year

(902,333,098)

(216,000,000)

(1,526,869,915)

(1,002,278,159)

46,082,889,990

46,237,638,162

38,918,043,605

43,995,097,274

(1,017,269,330)

(10,079,716,669)

(10,007,635,247)

(4,052,010,256)

(7,347,112,959)

36,003,173,321

36,230,002,915

34,866,033,349

36,647,984,315

36,033,165,556

36,274,127,624

34,866,033,349

36,647,984,315

Profit attributable to: Owners of the Company Non-controlling interests

36,003,173,321

(29,992,235)

36,230,002,915

34,866,033,349

36,647,984,315

Basic earnings per share

12.12

12.20

11.73

12.33

Diluted earning per share

12.12

12.20

11.73

12.33

Profit for the year Earnings per share

(44,124,709)

The accompanying notes are an integral part of these financial statements. The accompanying notes are an integral part of these financial statements. 5

Financial Report

for operations Total costs

092

Statement of Comprehensive Income Advanced Public Company Limited and itsand Subsidiaries AdvancedInfo InfoService Service Public Company Limited its Subsidiaries Statement of comprehensive income

ConsolidatedConsolidated Financial Statements

SeparateStatements Separate Financial

statements For thefinancial year ended 31 December

For the year ended 31 December 2013 Note 2014

Note

2014

2013

(in Baht)

For the year ended 31 December

2014 2014

2013 2013

(in Baht) Profit for the year

36,003,173,321

36,230,002,915

34,866,033,349

36,647,984,315

2,428,205

2,863,186

2,428,205

2,863,186

36,005,601,526

36,232,866,101

34,866,033,349

36,647,984,315

36,035,572,060

36,276,953,775

34,866,033,349

36,647,984,315

34,866,033,349

36,647,984,315

Other comprehensive income Net change in fair value of available-for-sale investments Other comprehensive income for the year, net of income tax Total comprehensive income for the year Total comprehensive income attributable to: Owners of the Company Non-controlling interests Total comprehensive income for the year

(29,970,534) 36,005,601,526

(44,087,674) 36,232,866,101

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

22,372,276,085

premium

Share premium

Other Components of Equity

500,000,000

reserve

19,729,332,548

36,274,127,624

(33,888,991,222)

17,344,196,146

Unappropriated

6,986,352

payment

2,826,151 2,826,151 5,230,590

161,186,663

2,404,439

investments

161,186,663

(in Baht)

investment

173,403,605

2,826,151

6,986,352

45,748,107,568

36,276,953,775

2,826,151

36,274,127,624

(33,882,004,870)

(33,888,991,222)

6,986,352

6,986,352 -

43,353,158,663

the Company

163,591,102

of equity

Total equity Fair value attributable to Reserve for Gain on changes in Total other Legal - based dilution of availablecomponents owners of the reserve Unappropriated share Consolidated financial statements Company payment investment for - sale of equity Retained earnings Other components of equity investments Fair value Total equity Reserve for Gain on changes in Total other attributable to (in Baht)available-for-sale components Legal share-based dilution of owners of

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

2,973,095,330

Total comprehensive income for the year

Balance at 31 December 2013

Profit

Other comprehensive income

Comprehensive income for the year

Total transactions with owners, recorded directly in equity

5,36

Dividends to owners of the Company

2,973,095,330

capital

paid-up

Issued and

Note

Issued and paid-up share capital

Cash returned from liquidation of subsidiaries

Share-base payment transaction

Transactions with owners, recorded directly in equity

Balance at 1 January 2013

Year ended 31 December 2013

Statement of changes in equity

Retained Earnings

Consolidated Financial Statements

Total

144,478,520

(44,087,674)

37,035

(44,124,709)

(126,446)

(125,836)

(610)

188,692,640

interests

45,892,586,088

36,232,866,101

2,863,186

36,230,002,915

(33,882,131,316)

(33,889,117,058)

(610)

6,986,352

43,541,851,303

equity

controlling

Non-

Total equity

Noncontrolling interestes

Financial Report

Advanced Info Service Public Company Limited and its Subsidiaries

Statement of Changes in Equity

Annual Report 2014 Advanced Info Service Public Company Limited

093

22,372,276,085

Other Components of Equity

Consolidated Financial Statements

500,000,000

reserve

20,710,294,423

36,033,165,556

(35,052,203,681)

19,729,332,548

Unappropriated

25,908,614

18,922,262

6,986,352

payment

161,186,663

(in Baht)

investment

7,637,094

2,406,504

5,230,590

investments

194,732,371

2,406,504

18,922,262

173,403,605

of equity

46,750,398,209

36,035,572,060

2,406,504

36,033,165,556

(35,033,281,419)

(35,052,203,681)

18,922,262

45,748,107,568

the Company

Total equity Fair value attributable to Reserve for Gain on changes in Total other Legal owners of the Consolidated financial statements share based dilution of availablecomponents Unappropriated reserveRetained earnings Company Other components for of equity payment investment - sale of equity Fair value Total equity investments Reserve for Gain on changes in Total other attributable to Legal share-based dilution(in of Baht) available-for-sale components owners of

Retained Earnings

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

2,973,095,330

Total comprehensive income for the year

Balance at 31 December 2014

Profit

Other comprehensive income

Total transactions with owners, recorded directly in equity

Comprehensive income for the year

22,372,276,085

premium

Share premium

Acquisition of non-controlling interests without a change in control

2,973,095,330

capital

paid-up

Issued and

Issued and paid-up share capital

Total changes in ownership interests in subsidiaries

Changes in ownership interests in subsidiaries

Total contributions by and distributions to owner of the Company

5,36

Share-base payment transaction

Note

Dividends to owners of the Company

Contributions by and distributions to owner of the Company

Transactions with owners, recorded directly in equity

Balance at 1 January 2014

Year ended 31 December 2014

Statement of changes in equity

Advanced Info Service Public Company Limited and its Subsidiaries

Statement of Changes in Equity

114,356,316

(29,970,534)

21,701

(29,992,235)

(151,670)

(2,480)

(149,190)

144,478,520

interests

controlling

Non-

Noncontrolling interestes

46,864,754,525

36,005,601,526

2,428,205

36,003,173,321

(35,033,433,089)

(2,480)

(35,033,430,609)

(35,052,352,871)

18,922,262

45,892,586,088

equity

Total

Total equity

094

5,36

Dividends to owners of the Company

The accompanying notes an integral part of these statements. The accompanying notesareare an integral partfinancial of these financial statements.

2,973,095,330

Total comprehensive income for the year

500,000,000

22,372,276,085

15,169,492,682

17,928,485,775

36,647,984,315

(33,888,991,222)

(in Baht)

of equity

6,986,352

43,780,843,542

36,647,984,315

(33,882,004,870)

(33,888,991,222)

6,986,352

6,986,352 -

41,014,864,097

Total equity

share-based payment

Reserve for for Reserve

Other Other Components components of Equity

Financial Report

Balance at 31 December 2013

Unappropriated (in Baht)Unappropriated

500,000,000

reserve

Legal

Legal reserve

Retained earnings

Retained Earnings

Separate Financial Statements Separate financial statements

22,372,276,085

premium

share capital

2,973,095,330

Share premium

paid-up

Issued and paid-up share Issuedcapital and

Profit

Comprehensive income for the year

Total transactions with owners, recorded directly in equity

Note

Share-base payment transaction

Transactions with owners, recorded directly in equity

Balance at 1 January 2013

Year ended 31 December 2013

Statement of changes in equity

Advanced Info Service Public Company Limited and its Subsidiaries

Statement of Changes in Equity

Annual Report 2014 Advanced Info Service Public Company Limited

095

5,36

Dividends to owners of the Company

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

2,973,095,330

Total comprehensive income for the year

Balance at 31 December 2014

Profit

Comprehensive income for the year

Total transactions with owners, recorded directly in equity

22,372,276,085

premium

share capital

Note

2,973,095,330

Share premium

paid-up

Issued and

Issued and paid-up share capital Note

Share-base payment transaction

Transactions with owners, recorded directly in equity

Balance at 1 January 2014

Year ended 31 December 2014

Statement of changes in equity

Advanced Info Service Public Company Limited and its Subsidiaries

Statement of Changes in Equity

Unappropriated

500,000,000

17,928,485,775

17,742,315,443

34,866,033,349

(35,052,203,681)

(in Baht)

(in Baht)Unappropriated

500,000,000

reserve

Legal

Legal reserve

Retained earnings

Retained Earnings

Separate financial statements

Separate Financial Statements of equity

25,908,614

18,922,262

6,986,352

share-based payment

Reserve for share-based payment

Reserve for

Other Components Other ofcomponents Equity

43,613,595,472

34,866,033,349

(35,033,281,419)

(35,052,203,681)

18,922,262

43,780,843,542

Total equity

096

097

Annual Report 2014 Advanced Info Service Public Company Limited

Statement of Cash Flows

Advanced Public Company Limited and and its Subsidiaries AdvancedInfo InfoService Service Public Company Limited its Subsidiaries Statement of cash flows Consolidated

Separate

Consolidated Financial Statements

Separate Financial Statements

For the year ended 31 December For the year ended 31 December

financial statements

2014 2013 2014 2013 Note Note 2014 2013 2014 2013 (in Baht)

(in Baht) Cash flows from operating activities Profit for the year

36,003,173,321

36,230,002,915

34,866,033,349

36,647,984,315

6,224,630,590

3,037,080,038

496,367,600

607,516,902

12,697,121,500

13,504,064,271

11,354,678,791

11,111,915,640

11,972,822

216,000,000

Adjustments for Depreciation Amortisation of intangible assets Impairment loss of assets

13,14,15

Investment income

5,13,29

Finance costs

(370,107,076)

(548,204,710)

(24,132,238,049)

(9,544,154,772)

5,33

1,526,869,915

1,002,278,159

902,333,098

1,017,269,330

Doubtful accounts and bad debts expense

1,240,096,982

786,761,009

37,392,229

359,749,826

Share-based payment transaction

18,922,262

6,986,352

18,922,262

6,986,352

60,996,823

72,978,456

2,341,242

14,139,273

864,996,826

562,133,543

834,544,090

556,336,656

(37,711,641)

(20,246,438)

Allowance for obsolete, decline in value and write-off inventories Unrealised (gain) loss on exchange

19,719,184

(3,342,575)

Share of loss of associate

3,625,000

Income tax expense

10,079,716,669

10,007,635,247

4,052,010,256

7,347,112,959

68,381,734,818

64,658,372,705

28,394,673,227

48,320,610,043

Cash provided by operation before changes in operating assets and liabilities Changes in operating assets and liabilities Specifically-designated bank deposits Trade accounts receivable Other receivables Inventories Other current assets Swap and forward contracts (receivable) payable

71,813,222 (1,402,917,732) (293,262,059) 284,438,157

(83,289,728)

(2,968,007,766)

1,542,974,551

(989,977,626)

180,562,435

45,227,749

(1,511,529,346)

25,517,160

177,101,062

23,791,727

(392,022,582)

(74,169,116)

(24,199,251)

(8,053,509)

(24,756,405)

(8,380,164)

(327,844,267)

Other non-current assets

(40,180,987)

Trade accounts payable

880,463,011

474,589,788

121,040,262

Other payables

1,530,805,592

2,135,419,423

(2,048,496,459)

Accrued revenue sharing expenses

1,595,406,859

(1,319,943,269)

1,595,406,859

(8,054,636) (241,377,526) (1,596,514,056) (2,174,492,655) (512,347,632)

Unearned income - mobile phone service

583,510,796

(99,680,385)

Advanced receipts from customers

723,400,178

189,893,206

Other current liabilities

190,894,611 84,478,109

Cash generated from operating activities

72,174,362,742

60,553,375,082

28,781,007,816

40,998,927,965

Income tax paid

(9,353,964,849)

(9,224,648,109)

(4,124,735,021)

(6,878,534,223)

Net cash from operating activities

62,820,397,893

51,328,726,973

24,656,272,795

34,120,393,742

Other non-current liabilities

(505,314,389)

(2,311,658,520)

(791,705,677)

66,508,915

190,892,751

137,501,526

91,621,954

(363,647,909)

(69,153,440)

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

Financial Report

Loss on disposals and write-off of assets

098

Statement of Cash Flows

Advanced Info Service Public Company Limited and its Subsidiaries Advanced Info Advanced Service Info Public Service Company Public Limited Company and Limited its Subsidiaries and its Subsidiaries Statement ofStatement cash flowsof cash flows Consolidated Consolidated Consolidated Financial Statements financial statements financial statements

For the year ended 31 December

Separate Separate Statements Separate Financial

financial statements financial statements

For the year ended 31 December

For the year ended For the 31 year December ended 31 December For the year ended For the 31 year December ended 31 December Note

2014 Note Note 2014 2014 2013

2013

2013 (in Baht)

2014

2014 (in Baht)

2014

(in Baht)

2013

Cash flows from investing activities Cash flows from investing activities 372,803,497 372,803,497 558,886,730 558,886,730 1,015,193,5201,015,193,520 1,316,239,5151,316,239,515

Interest received Interest received Purchase of property, Purchase plant, of property, equipment plant, equipment

(31,731,849,208) (31,731,849,208) (23,013,592,746) (23,013,592,746) (281,229,371) (281,229,371) (513,837,398) (513,837,398)

and computer software and computer software Sale of property Sale andofequipment property and equipment

27,409,559

27,409,559 15,618,332

15,618,332 236,965,039 236,965,039 41,228,357

41,228,357

Purchase of intangible Purchaseassets of intangible under assets under (830,272,648) (830,272,648) (5,446,556,296) (5,446,556,296) (830,272,648) (830,272,648) (5,158,865,300) (5,158,865,300)

the Agreementsthe forAgreements operations for operations Payment of spectrum Payment license of spectrum license

(3,656,250,000) (3,656,250,000)

(95,000,000) (95,000,000)

Net increase inNet short-term increaseloans in short-term loans to subsidiaries to and subsidiaries associate and associate Net (increase) Net decrease (increase) in other decrease investments in other investments 8

(202,860,000) (202,860,000) (16,081,900,000) (16,081,900,000)

882,882,254

82,882,254 (230,973,505) (230,973,505) 46,161,440

46,161,440

Additional investment Additional in subsidiaries investment in subsidiaries and associate and associate

13 (3,625,000)

(3,625,000)

Dividend received Dividend received

510,000,000

10,000,000

- (2,480)

(1,135,000,000) (2,480) (1,135,000,000)

22,852,750,810 22,852,750,810 8,215,574,1648,215,574,164

Net cash fromNet (used cash in)from investing (usedactivities in) investing activities (35,823,901,546) (35,823,901,546) (28,116,617,485) (28,116,617,485) 22,836,706,310 22,836,706,310 (13,316,560,662) (13,316,560,662) Cash flows from Cash financing flows from activities financing activities Interest paid Interest paid Other finance costs Otherpaid finance costs paid Finance lease principal Finance lease payments principal payments

(1,229,812,193) (1,229,812,193) (959,556,015) (959,556,015) (918,388,407) (918,388,407) (995,143,957) (995,143,957) (124,185,478) (124,185,478) (20,384,781) (20,384,781) (11,680,623) (11,680,623) (14,392,840) (14,392,840) (35,511,069) (35,511,069) (29,829,880) (29,829,880) (25,549,603) (25,549,603) (23,876,887) (23,876,887)

Net increase (decrease) Net increase in short-term (decrease)loans in short-term loans from financial from institutions financial institutions

(4,000,000,000) (4,000,000,000) 4,000,000,0004,000,000,000 (4,000,000,000) (4,000,000,000) 4,000,000,0004,000,000,000

Net increase (decrease) Net increase in short-term (decrease)loans in short-term loans -

from subsidiaries from subsidiaries

(4,400,000,000) (4,400,000,000) 4,400,000,0004,400,000,000

Increase in long-term Increaseborrowings in long-term borrowings

21,600,400,000 21,600,400,000 7,812,480,0007,812,480,000

Decrease in from Decrease long-term in from borrowings long-term borrowings

(5,370,463,286) (5,370,463,286) (8,485,647,730) (8,485,647,730) (5,370,463,286) (5,370,463,286) (8,486,147,730) (8,486,147,730)

7,812,480,000 7,812,480,000

Cash returned Cash paid to returned non-controlling paid to non-controlling interests interests from liquidation from of subsidiaries liquidation of subsidiaries

Acquisition of Acquisition non-controllong of non-controllong interests interests

(2,480)

(610) -

Dividend paid Dividend paid

(35,052,352,871) (35,052,352,871) (33,889,117,058) (33,889,117,058) (35,052,203,681) (35,052,203,681) (33,888,991,222) (33,888,991,222)

Net cash usedNet in financing cash usedactivities in financing activities

(24,211,927,377) (24,211,927,377) (31,572,056,074) (31,572,056,074) (49,778,285,600) (49,778,285,600) (27,196,072,636) (27,196,072,636)

Net increase (decrease) Net increase in cash (decrease) and in cash and cash equivalents cash equivalents Cash and cash Cash equivalents and cash at 1equivalents January at 1 January

2,784,568,9702,784,568,970 (8,359,946,586) (8,359,946,586) (2,285,306,495) (2,285,306,495) (6,392,239,556) (6,392,239,556) 11,473,120,876 11,473,120,876 19,833,022,300 19,833,022,300 3,964,630,7803,964,630,780 10,356,825,174 10,356,825,174

Effect of exchange Effectrate of changes exchangeonrate changes on 376,556

balances held in balances foreignheld currencies in foreign currencies Cash and cashCash equivalents and cashatequivalents 31 December at 31 December

376,556 45,162

45,162 (31,937)

(31,937)45,162

45,162

14,258,066,402 14,258,066,402 11,473,120,876 11,473,120,876 1,679,292,3481,679,292,348 3,964,630,7803,964,630,780

Supplemental Supplemental disclosures of disclosures cash flow information of cash flow information Non-cash transactions Non-cash transactions Outstanding debts Outstanding arising from debtsinvestment arising from in property, investment in property, plant and equipment, plant and intangible equipment, assets intangible under assets under 10,781,561,867 10,781,561,867 11,528,914,889 11,528,914,889 128,246,485 128,246,485 585,507,328 585,507,328 the Agreementsthe forAgreements operations for andoperations spectrum license and spectrum license

The accompanying notes are an integral part of these financial statements. The accompanying The accompanying notes are an integral notes are partanofintegral these financial part of these statements. financial statements. 12

Annual Report 2014 Advanced Info Service Public Company Limited

099

Note to the Financial Statements Advanced Info Service Public Company Limited and its Subsidiaries

Note

General information Basis of preparation of the financial statements Changes in accounting policies Significant accounting policies Related parties Cash and cash equivalents Specifically-designated bank deposits Other investments Trade accounts receivable Other receivables Inventories Investments in associate Investments in subsidiaries Property, plant and equipment Intangible assets under the Agreements for operations Goodwill License for operation right in spectrum of telecommunication Other intangible assets Deferred tax Interest-bearing liabilities Trade accounts payable Other payables Employee benefit obligations Share capital Legal reserve Other components of equity Segment information Revenue of the Company under the NBTCâ&#x20AC;&#x2122;s regulation Investment income Other operating income Provident fund Expenses by nature Finance costs Income tax expense Earnings per share Dividends Financial instruments Commitments with non-related parties Contingent liabilities Significant events, commercial disputes and litigation Events after the reporting period Thai Financial Reporting Standards (TFRS) not yet adopted Reclassification of accounts

Financial Report

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43

Contents

100

Note to the Financial Statements Advanced Info Service Public Company Limited and its Subsidiaries

These notes form an integral part of the financial statements.

The financial statements issued for Thai statutory and regulatory reporting purposes are prepared in the Thai language. These English language financial statements have been prepared from the Thai language statutory financial statements, and were approved and authorised for issue by the Board of Directors on 5 February 2015.

1 General Information

Advanced Info Service Public Company Limited “the Company”, is incorporated in Thailand and has its registered office at 414 Phaholyothin Road, Phayathai, Bangkok, Thailand.

The Company was listed on the Stock Exchange of Thailand in November 1991.

Intouch Holdings Public Company Limited is a major shareholder, holding 40.45% (2013: 40.45%) of the share capital of the Company and is incorporated in Thailand. SingTel Strategic Investments Pte Ltd. is a shareholder holding 23.32% (2013: 23.32%) of the share capital of the Company and is incorporated in Singapore.

The major principal business operations of the Company and its subsidiaries (“the Group”) are summarised as follows:

1) The operation of a 900-MHz CELLULAR TELEPHONE SYSTEM as the operator. The Company has been granted permission from TOT Public Company Limited (“TOT”), under the Agreement for operation dated 27 March 1990, to operate and service of Cellular Mobile Telephone, either analog (NMT) or Digital GSM, 900 MHz frequency nationwide, parallel operation for 25 years since 1 October 1990, being the first commercial operating date of service. The Agreement ends on 30 September 2015. The Company is obliged to comply with various conditions and pay revenue sharing in accordance with the Agreement.

Under the Agreement, the Company shall be entitled to immediately transfer the ownership right of its tools and equipment or assets for operating the 900-MHz Cellular System to TOT when the installation has been completed and the Company shall pay TOT annual revenue sharing in accordance with the Agreement at the percentage of annual revenues and any benefit from the mobile phone service prior to deducting any expenses and any tax or the minimum annual revenue sharing stipulated in the Agreement. The Agreement does not specify a minimum cumulative amount over the term of the Agreement. The percentages of the service revenues and minimum annual revenue sharing for each year are as follows:

Year 1-5 6-10 11-15 16-20 21-25 2)

Percentage of Revenues 15 20 25 30 30

Minimum Annual Revenue Sharing (in million Baht) 13 to 147 253 to 484 677 to 965 1,236 to 1,460 1,460

The operation of a DATAKIT VIRTUAL CIRCUIT SWITCH as the operator. Advanced Data network Communications Co., Ltd. (“ADC”), an indirect subsidiary, has been granted permission from TOT Public Company Limited (“TOT”), under the Agreement dated 19 September 1989, for rendering services for DATAKIT VIRTUAL CIRCUIT SWITCH in the area of the Metropolitan Telephone Exchange.

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Under the Agreement, ADC shall be entitled to immediately transfer the ownership right of its tools and equipment or assets for operation of DATAKIT System to TOT when the installation has been completed and ADC shall pay TOT annual revenue sharing in accordance with the Agreement at the percentage of annual revenues and any benefit from service of DATAKIT VIRTUAL CIRCUIT SWITCH prior to deducting any expenses and any tax or the minimum annual revenue sharing stipulated in the Agreement.

ADC and TOT have mutually agreed to amend the Agreement and signed the Supplemental Agreement on 25 September 1997 to extend the validity period from 10 years to 25 years (such validity period shall be ended on 24 September 2022) and waive the collection of annual revenue sharing under the agreements effective from 25 September 1997. ADC issued 10.75 million ordinary shares at a par value of Baht 10 (11.23% of total shares) to TOT on 17 March 1998 in consideration of such waiver. As at 31 December 2014, TOT owns 48.12% of ADC’s total shares (2013: 48.12%).

Under the Agreement, DPC was entitled to immediately transfer the ownership right of its machineries, all equipment and tools or assets for operation to CAT upon installation completion and DPC paid CAT the annual revenue sharing at the percentage of annual revenues and any benefit in according with the accrual basis from the mobile phone service prior to deducting any expenses and any tax and fees which the minimum revenue sharing must accumulate, over the term of the Agreement, not less than Baht 5,400 million as follows:

Year 1 2-9 10-14 15-16

Percentage of Revenues 25 20 25 30

Minimum Annual Revenue Sharing (in million Baht) 9 60 to 320 350 to 650 670

As at 31 December 2014, DPC paid the revenue sharing to CAT in a total amount of Baht 15,853 million (2013: Baht 15,853 million).

Financial Report

3) The operation of a 1800-MHz CELLULAR TELEPHONE SYSTEM as the operator. Digital Phone Company Limited (“DPC”), a subsidiary, had been granted permission from CAT Telecom Public Company Limited (“CAT”), under the Agreement for operation dated 19 November 1996 (“the Agreement”), to operate and service Cellular Mobile Telephone: Digital PCN (PERSONAL COMMUNICATION NETWORK) 1800, frequency between 1747.9 MHz to 1760.5 MHz and 1842.9 MHz to 1855.5 MHz, nationwide. DPC started the operation commencing from 28 May 1997, ending 15 September 2013 and DPC was obliged to comply with various conditions and pay revenue sharing in accordance with the Agreement.

The Agreement expired on 15 September 2013. Thus, on 16 August 2013, The National Broadcast and Telecommunication Commission (“NBTC”) has announced a temporary customer protection measure after the Agreement expired to assign the operator to provide continuing services to the subscribers for up to a further 1 year commencing from the Agreement expiration date. The operator must comply with the rules and conditions set forth in the announcement. On 17 July 2014, the National Council for Peace and Order (“NCPO”) has announced an order No. 94/2557 “Suspension the implementation of the Act on Organization to Assign Radio Frequency and to Regulate the Broadcasting and Communications Services” to instruct NBTC to postpone an auction for spectrum licenses for 1 year commencing from the Order date. During the postpone period, the operator has to comply with the NBTC’s announcement on 16 August 2013 to provide continuing services to the subscribers. The application of those rules and conditions has yet to be The application of those rules and conditions has yet to be clarified in detail by NBTC (including expenses that clarified in detail by NBTC (including expenses that may be deducted in arriving at a notional may be deducted in arriving at a notional profit payable to the State). Consequently, the outcome of complying profit payable to the State). Consequently, the outcome of complying with this extension on DPC with thisGroup extension on DPC and the Group is, currently, uncertain. and the is, currently, uncertain.

102

4) The a 2.1-GHz CELLULAR TELEPHONE SYSTEM as the operator. as Advanced WirelessAdvanced Network Co., Ltd. 4) Theoperation operationof of a 2.1-GHz CELLULAR TELEPHONE SYSTEM the operator. (“AWN”), a subsidiary, has been granted permission from the Office of the National Broadcasting and Wireless Network Co., Ltd. (“AWN”), a subsidiary, has been granted permission from the Office Telecommunications Commission under the license certificate(“NBTC”), (“License”) under dated the 7 December of the National Broadcasting and(“NBTC”), Telecommunications Commission license 2012, certificate (“License”) dated 7Mobile December 2012, to operate between and service Cellular Telephone, to operate and service Cellular Telephone, frequency 1950 MHz toMobile 1965 MHz and 2140 MHz frequency between 1950 MHz to 1965 MHz and 2140 MHz to 2155 MHz, nationwide in to 2155 MHz, nationwide in accordance with the license certificate no. NBTC/FREQ/TEL/55/1. AWN started the accordance with the license no. NBTC/FREQ/TEL/55/1. started the operation operation commencing from 7 certificate December 2012, ending 6 December 2027AWN and AWN is obliged to comply with commencing fromand 7 December 2012, 6 December 2027 AWN is obliged to comply various conditions pay fees within theending time period as specified in and the License. with various conditions and pay fees within the time period as specified in the License. Details of the Company’s subsidiaries and associate as at 31 December were as follows: Details of the Company’s subsidiaries and associate as at 31 December were as follows:

of the Entities Type Name ofName the entities TypeofofBusiness business

Country of Ownership interest Country of Ownership Interest (%) incorporation (%) Incorporation 2014 2013 2014 2013

Advanced Internet Revolution Co., Ltd. On liquidation process

Thailand

99.99

Advanced Datanetwork Communications Co., Ltd. * (* Indirect subsidiary)

Service provider of online data communications service via telephone land line and optical fiber

Thailand

51.00

Advanced Contact Center Co., Ltd.

Service provider of call center

Thailand

99.99

Digital Phone Co., Ltd.

Service provider of digital mobile phone system in 1800 MHz frequency

Thailand

98.55

Advanced Magic Card Co., Ltd.

Distributor of cash card business

Thailand

99.99

Advanced Mpay Co., Ltd.

Service provider of

Thailand

99.99

Advanced Info Service Public Company Limited electronic paymentand and its Subsidiaries Notes to the financial statements AIN GlobalComm Co., Ltd. Name of the entities

cash card Service provider of international telephone Type of business service/gateway

Advanced Wireless Network Co., Ltd.

Service provider of cellular telephone 16 in 2.1-GHz network frequency, distributor of handsets and international telephone service

Super Broadband Network Co., Ltd.

Network operator and telecom service operator i.e. internet (ISP), international & national internet gateway,

Thailand 99.99 99.99 Country of Ownership interest incorporation (%) 2014 2013 Thailand 99.99 99.99

Thailand

99.99

Advanced Info Service Public Company Limited and its Subsidiaries

103

2014 Advanced Info Service Public Company Limited Notes Annual to theReport financial statements

Name of the entities

Type of business

Advanced Wireless Network Co., Ltd.

Service provider of cellular telephone network in 2.1-GHz frequency, distributor of handsets and international Name of the Entities Type of Business telephone service

Country of Ownership interest incorporation (%) 2014 2013 Thailand 99.99 99.99

Country of Ownership Interest (%) Incorporation 2014 2013

Network operator and telecom service operator i.e. internet (ISP), international & national internet gateway, International Private Leased Circuit (IPLC), Internet Protocol Virtual Private Network (IP VPN), voice over IP, and IP Television

Thailand

99.99

Wireless Device Supply Co., Ltd.

Importer and distributor of handset and accessories

Thailand

99.99

Mobile Broadband Business Co., Ltd. (* Indirect subsidiary)

Completed the process of liquidation on 28 February 2014

Thailand

Advanced Mobile Broadband Co., Ltd. Completed the process of (* Indirect subsidiary) liquidation on 28 February 2014

Thailand

Fax Lite Co., Ltd.

Operate in land and building rental and service, and related facilities

Thailand

99.98

99.97

MIMO Tech Co., Ltd.

Operate IT, content aggregator, and outsourcing service for billing and collection

Thailand

99.99

Advanced Broadband Network Co., Ltd.

Currently not start the operation

Thailand

99.98

99.97

Transmission network provider

Thailand

29.00

Associate Information Highway Co., Ltd.

Financial Report

Super Broadband Network Co., Ltd.

104

2 Basis of Preparation of the Financial Statements (a) Statement of compliance The financial statements are prepared in accordance with Thai Financial Reporting Standards (TFRS); guidelines promulgated by the Federation of Accounting Professions (“FAP”); and applicable rules and regulations of the Thai Securities and Exchange Commission. The FAP has issued the following new and revised TFRS relevant to the Group’s/Company’s operations and effective for accounting periods beginning on or after 1 January 2014:

TFRS

Topic

TAS 1 (revised 2012) Presentation of Financial Statements TAS 7 (revised 2012) Statement of Cash Flows TAS 12 (revised 2012) Income Taxes TAS 17 (revised 2012) Leases TAS 18 (revised 2012) Revenue TAS 19 (revised 2012) Employee Benefits TAS 21 (revised 2012) The Effects of Changes in Foreign Exchange Rates TAS 24 (revised 2012) Related Party Disclosures TAS 28 (revised 2012) Investments in Associates TAS 31 (revised 2012) Interests in Joint Ventures TAS 34 (revised 2012) Interim Financial Reports TAS 36 (revised 2012) Impairments of Assets TAS 38 (revised 2012) Intangible Assets TFRS 2 (revised 2012) Share-based Payment TFRS 5 (revised 2012) Non-current Assets held for Sale and Discontinued Operations TFRS 8 (revised 2012) Operating Segments TFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities TFRIC 4 Determining whether an Arrangement contains a Lease TFRIC 10 Interim Financial Reporting and Impairment TFRIC 12 Service Concession Arrangements TFRIC 13 Customer Loyalty Programmes TFRIC 17 Distributions of Non-cash Assets to Owners TFRIC 18 Transfers of Assets from Customers TIC 15 Operating Leases-Incentives TIC 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease TIC 29 Service Concession Arrangements – Disclosure TIC 32 Intangible Assets-Web Site Costs

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The initial application of these new and revised TFRS has resulted in changes in certain of the Group’s/Company’s accounting policies. The effects of these changes, where such effects are considered material to the financial statements, are disclosed in note 3. In addition to the above new and revised TFRS, the FAP has issued a number of other new and revised TFRS which are effective for financial statements beginning on or after 1 January 2015 and have not been adopted in the preparation of these financial statements. Those new and revised TFRS that are relevant to the Group’s/Company’s operations are disclosed in note 42.

(b) Basis of measurement The financial statements have been prepared on the historical cost basis except for the following material items in the statements of financial position:

- derivative financial instruments are measured at fair value; - financial instruments at fair value through profit or loss are measured at fair value; - available-for-sale financial assets are measured at fair value.

The financial statements are presented in Thai Baht, which is the Group/Company’s functional currency. All financial information presented in Thai Baht has been rounded in the notes to the financial statements to the nearest million unless otherwise stated.

(d) Use of estimates and judgements The preparation of financial statements in conformity with TFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which estimates are revised and in any future periods affected. Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements is included in the following notes: Note 4(s) Note 9 Note 11 Note 14 Note 15 Note 13, 16 Note 18 Note 23 Note 37 Note 39, 40

Current and deferred taxation Allowance for doubtful accounts Allowance for obsolete inventories Utilisation of property, plant and equipment Utilisation of intangible asset under the Agreement for operations Key assumptions used in discounted cash flow projections Utilisation of intangible assets Measurement of employee benefit obligations Valuation of financial instruments Provisions and contingencies / Significant events, commercial disputes and litigation

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3 Changes in Accounting Policies (a) Overview From 1 January 2014, consequent to the adoption of new and revised TFRS as set out in note 2, the Group/Company has changed its accounting policies in the following areas having a material effect on the Group’s/Company’s financial statements: • Accounting for service concession arrangements

A description of the nature and effect of these changes in accounting policy are included in notes 3(b) below:

(b) Accounting for service concession arrangements

From 1 January 2014, the Group/Company has adopted TFRIC 12 - Service concession arrangements.

TFRIC 12 gives guidance on the accounting by operators for public-to-private service concession agreements under which the grantor controls and regulates the services provided; to whom they are provided; and at what price; and also controls any significant residual interest in the related infrastructure at the end of the agreement term. The operator recognises its interest in the concession as either a financial asset or an intangible asset arising from the concession agreement, depending on criteria set out in TFRIC 12, and not as property, plant and equipment. The Group’s/Company’s accounting policy for service concession arrangements is as follows: The Group/Company recognises an intangible asset arising from the Agreements for operation when it has a right to charge for usage of infrastructure of the Agreements for operation. An intangible asset received as consideration for providing construction or upgrade services in the Agreements for operation is measured at fair value upon initial recognition. Subsequent to initial recognition the intangible asset is measured at cost, which includes capitalised borrowing costs, less accumulated amortisation and accumulated impairment losses. Revenue relating to construction or upgrade services under the Agreements for operation is recognised based on the stage of completion of the work performed. Operation or service revenue is recognised in the period in which the services are provided by the Group/Company. When the Group/Company provides more than one service in the Agreements for operation, the consideration received is allocated by reference to the relative fair values of the services delivered. The Group/Company has recognised no profit margin on such revenues because the (i) model of the Agreements for operation is not designed to generate profits from the infrastructure construction, but from the service rendering; (ii) the way the Group/Company manages the constructions is highly based on outsourced services and; (iii) there are no profit margins on the infrastructure construction in the Group’s/Company’s business and operations. Management believes that any gains on these operations are irrelevant and, accordingly, no amounts in addition to the effective costs have been considered as a part of revenues. Therefore, construction revenues and costs are presented in the statements of income in the same amounts.

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Annual Report 2014 Advanced Info Service Public Company Limited

The effects of the change are recognised retrospectively in the financial statements. The impact of the change on the financial statements is as follows:

Statement of Income for the Year Ended 31 December

Consolidated Financial Statements Separate Financial Statements 2014 2013 2014 2013 งบการเงินรวม งบการเงินเฉพาะกิจการ

Increase in construction income from the Agreements for operation Increase in construction cost from the Agreements for operation Profit (loss)

(in million Baht)

600

3,766

600

3,640

(600)

(3,766)

(600)

(3,640)

4 Significant Accounting Policies

The accounting policies set out below have been applied consistently to all periods presented in these financial statements except as explained in note 3, which addresses change in accounting policies.

The consolidated financial statements relate to the Company and its subsidiaries (together referred to as the “Group”).

Business combinations The Group/Company applies the acquisition method for all business combinations other than those with entities under common control. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group/Company takes into consideration potential voting rights that currently are exercisable. The acquisition date is the date on which control is transferred to the acquirer. Judgement is applied in determining the acquisition date and determining whether control is transferred from one party to another. Goodwill is measured as the fair value of the consideration transferred including the recognised amount of any non-controlling interest in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed, all measured as of the acquisition date. Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Group/Company to the previous owners of the acquiree, and equity interests issued by the Group/Company. Consideration transferred also includes the fair value of any contingent consideration and share-based payment awards of the acquiree that are replaced mandatorily in the business combination. If a business combination results in the termination of pre-existing relationships between the Group/Company and the acquiree, then the lower of the termination amount, as contained in the agreement, and the value of the off-market element is deducted from the consideration transferred and recognised in other expenses. When share-based payment awards exchanged (replacement awards) for awards held by the acquiree’s employees (acquiree’s awards) relate to past services, then a part of the market-based measure of the awards replaced is included in the consideration transferred. If they require future services, then the difference between the amount included in consideration transferred and the market-based measure of the replacement awards is treated as post-combination compensation cost.

Financial Report

(a) Basis of consolidation

108

A contingent liability of the acquiree is assumed in a business combination only if such a liability represents a present obligation and arises from a past event, and its fair value can be measured reliably. The Group/Company measures any non-controlling interest at its proportionate interest in the identifiable net assets of the acquiree. Transaction costs that the Group/Company incurs in connection with a business combination, such as legal fees, and other professional and consulting fees are expensed as incurred. Acquisitions from entities under common control Business combinations of entities or businesses under common control are accounted for using a method similar to the pooling of interest method and in accordance with the Guideline issued in 2009 by the FAP. Subsidiaries Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed where necessary to align them with the policies adopted by the Group. Losses applicable to non-controlling interests in a subsidiary are allocated to non- controlling interests even if doing so causes the non- controlling interests to have a deficit balance. Loss of control Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained. Associate Associate is the entity in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity. Investment in associate is accounted for in the consolidated financial statements using the equity method (equity-accounted investees) and is recognised initially at cost. The cost of the investment includes transaction cost. The consolidated financial statements include the Groupâ&#x20AC;&#x2122;s share of profit or loss and other comprehensive income of equity accounted investees from the date that significant influence commences until the date that significant influence ceases. When the Groupâ&#x20AC;&#x2122;s share of losses exceeds its interest in an equity accounted investee, the Groupâ&#x20AC;&#x2122;s carrying amount of that interest is reduced to zero and recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.

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Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(b) Foreign currencies

Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currency (Thai Baht) of the Group entities at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the foreign exchange rates ruling at that date. Foreign exchange differences arising on translation are recognised in profit or loss.

(c) Derivative financial instruments The Group/Company uses financial instruments to manage exposure to fluctuations in foreign currency exchange and interest rates. These instruments, which mainly comprise forward foreign currency contracts and cross currency swap agreements, are recorded in the financial statements on the contract date. The purpose of these instruments is to manage risk. Forward foreign exchange contracts protect the Group/Company from fluctuations in exchange rates by establishing the rate at which a foreign currency asset or liability will be settled. Forward contracts are recorded as forward contracts receivable and payable on inception, and are translated at the year end exchange rate. Unrealised gains or losses on transactions are recognised in profit and loss. Premiums or discounts are amortised in the statement of income on a straight-line basis over the contract period. Interest rate derivatives help the Group/Company to better manage effects from fluctuations in floating interest rates. Any differential to be received or paid on an interest rate derivative is recognised as a component of interest income or expense over the period of such instrument. Gains or losses of early termination of interest rate derivatives or on repayment of the borrowing are charged to profit or loss.

(d) Cash and cash equivalents Cash and cash equivalents in the statements of cash flows comprise cash balances, call deposits and highly liquid short-term investments with original maturities of three month or less.

(e) Trade and other accounts receivable

Trade and other accounts receivable are stated at their invoice value less allowance for doubtful accounts.

The allowance for doubtful accounts is assessed primarily on analysis of payment histories and future expectations of customer payments. Bad debts are written off when incurred.

Financial Report

Non-monetary assets and liabilities measured at cost in foreign currencies are translated to the functional currency using the foreign exchange rates ruling at the dates of the transactions.

110

(f) Inventories

Inventories comprise mobile phones, refill cards, sim cards, premiums and spare parts used for repairs and services.

Inventories are stated at the lower of cost and net realisable value.

Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost is calculated as follows: Finished goods Spare parts (mobile phones and network) Datanet equipment

- moving weighted average method - moving weighted average method - first-in, first-out (FIFO) method

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs to complete and to make the sale.

An allowance is made for all deteriorated, changed, obsolete and slow-moving inventories.

(g) Investments Investments in associate and subsidiaries Investments in subsidiaries in the separate financial statements of the Company are accounted for using the cost method less impairment losses. Investment in associate in the consolidated financial statements is accounted for using the equity method. Investments in other debt and equity securities Fixed deposit at bank is presented as part of current investment with maturities over three months, not exceeding one year. Debt securities and marketable equity securities held for trading are classified as current assets and are stated at fair value, with any resultant gain or loss recognised in profit or loss. Debt securities that the Group/Company has the positive intent and ability to hold to maturity are classified as held-to-maturity investments. Held-to-maturity investments are stated at amortised cost less any impairment losses. The difference between the acquisition cost and redemption value of such debt securities is amortised using the effective interest rate method over the period to maturity. Debt securities and marketable equity securities, other than those securities held for trading or intended to be held to maturity, are classified as available-for-sale investments. Available-for-sale investments are, subsequent to initial recognition, stated at fair value, and changes therein, other than impairment losses and foreign currency differences on available-for-sale monetary items, are recognised directly in equity. Impairment losses and foreign exchange differences are recognised in profit or loss. When these investments are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in profit or loss. Where these investments are interest-bearing, interest calculated using the effective interest method is recognised in the profit or loss.

Equity securities which are not marketable are stated at cost less any impairment losses.

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The fair value of financial instruments classified as held-for-trading and available-for-sale is determined as the quoted bid price at the reporting date. Disposal of investments On disposal of an investment, the difference between net disposal proceeds and the carrying amount together with the associated cumulative gain or loss that was reported in equity is recognised in profit or loss. If the Group/Company disposes of part of its holding of a particular investment, the deemed cost of the part sold is determined using the FIFO method applied to the carrying value of the total holding of the investment.

(h) Property, plant and equipment Recognition and measurement Owned assets Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located, and capitalised borrowing costs. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised net in profit or loss. When revalued assets are sold, the amounts included in the revaluation reserve are transferred to retained earnings. Leased assets Leases in terms of which the Group/Company substantially assumes all the risk and rewards of ownership are classified as finance leases. Property, plant and equipment acquired by way of finance leases is capitalised at the lower of its fair value and the present value of the minimum lease payments at the inception of the lease, less accumulated depreciation and impairment losses. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to profit or loss.

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Subsequent costs The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group/Company, and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Depreciation Depreciation is calculated based on the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value. Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment. The estimated useful lives are as follows: Buildings and building improvements Leasehold building improvements Computer, tools and equipment Furniture, fixtures and office equipment Communication equipment for rental Communication equipment for major corporate customer rental Vehicles

5, 20 years 5, 10 years 2-20 years 2-5 years 3 years Over period of rental agreement 5 years

No depreciation is provided on freehold land or assets under construction and installation.

Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

(i) Intangible assets Assets under the Agreements for operations Assets under the Agreements for operations represent the cost of certain equipment and other assets which have been or have to be transferred to the grantor of the Agreements of operations and are stated at cost less accumulated amortisation and impairment losses. Goodwill Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets. The measurement of goodwill at initial recognition is described in note 4(a). Subsequent to initial recognition, goodwill is measured at cost less accumulated impairment losses. In respect of equity-accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and an impairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity-accounted investee. License for operation right in spectrum of telecommunication License for operation right in spectrum of telecommunication represents the acquisition cost of license to operate a mobile phone system under 2.1-GHz.

113

Annual Report 2014 Advanced Info Service Public Company Limited

The operation right

The operation right represents the acquisition cost of certain rights and obligations to operate a mobile phone system.

Other intangible assets Other intangible assets that are acquired by the Group/Company, which have finite useful lives, are measured at cost less accumulated amortisation and accumulated impairment losses. Subsequent expenditure Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred. Amortisation Amortisation is based on the cost of the asset, or other amount substituted for cost, less its residual value.

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful lives are as follows: Assets under the Agreements for operations - Mobile phone network digital system 10 years not exceeding the remaining period of the Agreement for operations - Datanet tools and equipments 10 years not exceeding the remaining period of the Agreement for operations - Computer system under the Agreement for operation of 1800-MHz operation

5 years not exceeding the remaining period of the Agreement for operations

Software licences and software development costs

5, 10 years

License for operation right in spectrum of telecommunication

Over the period of the license

The operation right

Over the period of the Agreement for operations

No amortisation is provided on advance payment and assets under construction of the assets under the Agreements for operations. Amortisation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

Financial Report

114

( j ) Other assets Deferred charges Deferred charges represent commitment fees for long-term loans, costs of long-term leases of space for base stations, expenditures relating to the increase of power of electricity at base stations and expenditures relating to the improvement project of mobile phone service network and are stated at cost less accumulated amortisation and impairment losses. Amortisation

Amortisation is based on the cost of the asset, or other amount substituted for cost, less its residual value.

Over the loan agreement period

Bond issuing cost

Over the debentures period

Costs of long-term leases for base stations

Over the lease agreement period

Expenditures relating to the increase of power of electricity at base stations

Over the remaining period of the Agreement of operation period

Expenditures relating to the improvement project of mobile phone service network

4 years

Operation right of the datanet service

10 years not exceeding the remaining period of the Agreement for operations

(k) Impairment The carrying amounts of the Groupâ&#x20AC;&#x2122;s/Companyâ&#x20AC;&#x2122;s assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the assetsâ&#x20AC;&#x2122; recoverable amounts are estimated. For goodwill and intangible assets that have indefinite useful lives or are not yet available for use, the recoverable amount is estimated each year at the same time. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The impairment loss is recognised in profit or loss. When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is objective evidence that the value of the asset is impaired, the cumulative loss that had been recognised directly in equity is recognised in profit or loss even though the financial asset has not been derecognised. The amount of the cumulative loss that is recognised in profit or loss is the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognised in profit or loss.

Annual Report 2014 Advanced Info Service Public Company Limited

115

Calculation of recoverable amount The recoverable amount of held-to-maturity securities and receivables carried at amortised cost is calculated as the present value of the estimated future cash flows discounted at the original effective interest rate. Receivables with a short duration are not discounted.

The recoverable amount of available-for-sale financial assets is calculated by reference to the fair value.

The recoverable amount of a non-financial asset is the greater of the assetsâ&#x20AC;&#x2122; value in use and fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs. Reversals of impairment

An impairment loss in respect of goodwill is not reversed. Impairment losses recognised in prior periods in respect of other non-financial assets are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the assetâ&#x20AC;&#x2122;s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

( l) Interest-bearing liabilities Interest-bearing liabilities are recognised initially at fair value less attributable transaction charges. Subsequent to initial recognition, interest-bearing liabilities are stated at amortised cost with any difference between cost and redemption value being recognised in profit or loss over the period of the borrowings on an effective interest basis.

(m) Trade and other accounts payable

Trade and other accounts payable are stated at cost.

Financial Report

An impairment loss in respect of a financial asset is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised in profit or loss. For financial assets carried at amortised cost and available-for-sale financial assets that are debt securities, the reversal is recognised in profit or loss. For available-for-sale financial assets that are equity securities, the reversal is recognised in other comprehensive income.

116

(n) Employee benefits Provident fund The Group/Company had provident funds which is a defined contribution plan. The fundâ&#x20AC;&#x2122;s asset of the provident fund is separated from the Groupâ&#x20AC;&#x2122;s/Companyâ&#x20AC;&#x2122;s asset and has been managed by a licensed fund manager. The provident fund receives a cash contribution from employee and the related Group/Company. The contribution expenditure of the provident fund is recognised as expense in profit or loss as accrued. Employee benefit obligations and long-term service award The obligation in respect of post-employment benefits that provide compensation according to labor law and long-term service award are recognised in the financial statements based on calculations by a qualified actuary using the projected unit credit method. The Group/Company recognised all actuarial gain and loss arising from employee benefit obligations in other comprehensive income and all expenses related to employee benefit obligations in profit or loss. Termination benefits Termination benefits are recognised as an expense when the Group/Company is committed demonstrably, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognised as an expense if the Group/Company has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months after the reporting period, then they are discounted to their present value. Short-term employee benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit sharing plans if the Group/Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

(o) Provisions A provision is recognised if, as a result of a past event, the Group/Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

Annual Report 2014 Advanced Info Service Public Company Limited

117

(p) Revenue

Revenue excludes value added tax and is arrived at after deduction of trade discounts and volume rebates.

Sale of goods and services rendered Revenue is recognised in profit or loss when the significant risks and rewards of ownership have been transferred to the buyer. No revenue is recognised if there is continuing management involvement with the goods or there are significant uncertainties regarding recovery of the consideration due, associated costs or the probable return of goods. Service income is recognised as services are provided. Revenue from mobile phone and call center services are recognised when services are rendered to customers. Revenue from rendering voice/data communications via telephone line network services is recognised when service is rendered. Rental income Rental income from rental equipment is recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income.

Revenue relating to construction or upgrade services under a service concession arrangement is recognised based on the stage of completion of the work performed. Operation or service revenue is recognised in the period in which the services are provided by the Group/Company. When the Group/Company provides more than one service in a service concession arrangement, the consideration received is allocated by reference to the relative fair values of the services delivered. Investments

Revenue from investments comprises dividend and interest income from investments and bank deposits.

Dividend income Dividend income is recognised in profit or loss on the date the Groupâ&#x20AC;&#x2122;s/Companyâ&#x20AC;&#x2122;s right to receive payments is established.

Interest income Interest income is recognised in profit or loss as it accrues.

(q) Finance costs Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions and contingent consideration, losses on disposal of available-for-sale financial assets, fair value losses on financial assets at fair value through profit or loss, impairment losses recognised on financial assets (other than trade receivables), and losses on hedging instruments that are recognised in profit or loss. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

Financial Report

Service concession arrangements

118

(r) Lease payments Payments made under operating leases are recognised in profit or loss on a straight line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed. Determining whether an arrangement contains a lease At inception of an arrangement, the Group/Company determines whether such an arrangement is or contains a lease. A specific asset is the subject of a lease if fulfilment of the arrangement is dependent on the use of that specified asset. An arrangement conveys the right to use the asset if the arrangement conveys to the Group/Company the right to control the use of the underlying asset. At inception or upon reassessment of the arrangement, the Group/Company separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Group/Company concludes for a finance lease that it is impracticable to separate the payments reliably, an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. Subsequently the liability is reduced as payments are made and an imputed finance charge on the liability is recognised using the Groupâ&#x20AC;&#x2122;s/Companyâ&#x20AC;&#x2122;s incremental borrowing rate.

(s) Income tax Income tax expense for the year comprises current and deferred tax. Current and deferred tax are recognised in profit or loss except to the extent that they relate to a business combination, or items recognised directly in equity or in other comprehensive income. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised if it is probable that they will not be utilised in the foreseeable future. The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they adjust, using tax rates enacted or substantively enacted at the reporting date. In determining the amount of current and deferred tax, the Group/Company takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. The Group/Company believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including

Annual Report 2014 Advanced Info Service Public Company Limited

119

interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and may involve a series of judgements about future events. New information may become available that causes the Group/Company to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realised.

(t) Earnings per share

(u) Segment reporting Segment results that are reported to the Groupâ&#x20AC;&#x2122;s CEO (the chief operating decision maker) include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

5 Related Parties

Enterprises and individuals that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with the Company, including holding companies, subsidiaries and fellow subsidiaries are related parties of the Company. Individuals owning, directly or indirectly, an interest in the voting power of the Company that gives them significant influence over the enterprise, key management personnel, including directors and officers of the Company and close members of the family of these individuals and companies associated with these individuals also constitute related parties. In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the legal form. During the year, the Group/Company has entered into a number of transactions with related parties, the terms of which are negotiated in the ordinary course of business and according to normal trade conditions. Purchases of products and services are charged at reasonable prices and those prices are comparable to the market rate with general trading conditions. Consulting and management service fees are charged on a mutually agreed basis as a percentage of assets.

Financial Report

The Group/Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees.

constitute related parties.

120

In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the legal form. During the year, the Group/Company has entered into a number of transactions with related parties, the terms of which are negotiated in the ordinary course of business and according to normal trade conditions. Purchases of products and services are charged at reasonable prices and those prices are comparable to the market rate with general trading conditions. Consulting and management service fees are charged on a mutually agreed basis as a percentage of assets.

Relationships with related parties that control or jointly control the Company or are being controlled Relationships with related parties that control or jointly control the Company or are being controlled or jointly conor jointly controlled by the Company or have transactions with the Group were as follows: trolled by the Company or have transactions with the Group were as follows: Name of entities

Country of incorporation Country of /Incorporation/ nationality Name of Entities

Nature of relationships

Nature Relationships

nationality

Subsidiaries

Thailand

More than 50% shareholding or being controlled.

Intouch Holdings Public Company Limited and its related parties (“INTOUCH Group”) SingTel Strategic Investments Pte Ltd. and its related parties (“SingTel Group”)

Thailand and Laos

Intouch Holdings Public Company Limited (“INTOUCH”) is a major shareholder, 40.45% shareholding and has some joint directors.

Singapore

SingTel Strategic Investments Pte Ltd. (“SingTel”) is a major shareholder, 23.32% shareholding.

Information Highway Co., Ltd.

Thailand

Associate

Other related parties

Thailand

Other parties have some joint directors and directors of related parties.

121

Annual Report 2014 Advanced Info Service Public Company Limited Advanced Advanced Info Info Service Service Public Public Company Company Limited Limited and and itsits Subsidiaries Subsidiaries Notes Notes to the to the financial financial statements statements Significant Significant transactions transactions for for thethe years years ended ended 31 31 December December with with related related parties parties were were as follows: as follows: Significant transactions for the years ended 31 December with related parties were as follows: Consolidated Consolidated Separate Separate Consolidated Financial Statements financial Separate Financial Statements financial financial statements statements financial statements statements 2014 2014 2013 2013 2014 2014 2013 Year Year ended ended 31 31 December December 2014 2013 2014 2013 2013 Year ended 31 December (in (in million million Baht) Baht) (in million Baht) Service Service income income Subsidiaries Subsidiaries INTOUCH INTOUCH Group Group SingTel SingTel Group Group Other Other related related parties parties Total Total

- 70 70 593593 2 2 665665

36,172 36,172 22 22 77 77 1 1 36,272 36,272

13,522 13,522 24 24 514514 2 2 14,062 14,062

Sales Sales of prepaid of prepaid cards cards Subsidiaries Subsidiaries

- -

137137

Sales Sales of Refill of Refill on on mobile mobile (ROM) (ROM) Subsidiaries Subsidiaries

- -

28 28

Sales Sales of property of property andand other other assets assets Subsidiaries Subsidiaries

- -

227227

24 24

Dividend Dividend income income Subsidiaries Subsidiaries

- -

22,848 22,848

8,216 8,216

Interest Interest income income Subsidiaries Subsidiaries Associate Associate Total Total

- 2 2 2 2

- - - -

1,220 1,220 - 1,220 1,220

1,102 1,102 - 1,102 1,102

Other Other income income Subsidiaries Subsidiaries INTOUCH INTOUCH Group Group Total Total

- 7 7 7 7

- 4 4 4 4

704704 - 704704

731731 - 731731

- 563563 555555 - 1,118 1,118

- 674674 526526 1 1 1,201 1,201

11,411 11,411 72 72 117117 - 11,600 11,600

21,128 21,128 72 72 290290 1 1 21,491 21,491

285285

1,345 1,345

25 25

475475

Sale Sale promotion promotion expense expense Subsidiaries Subsidiaries INTOUCH INTOUCH Group Group Total Total

- 1 1 1 1

36 36 - 36 36

136136 1 1 137137

Commission Commission expense expense Subsidiary Subsidiary

- -

1,234 1,234

4,188 4,188

184184

163163

183183

163163

- -

41 41

272272

Rental Rental andand other other service service expenses expenses Subsidiaries Subsidiaries INTOUCH INTOUCH Group Group SingTel SingTel Group Group Other Other related related parties parties Total Total Advertising Advertising expense expense INTOUCH INTOUCH Group Group

Management Management benefit benefit expense expense Purchases Purchases of property of property andand other other assets assets Subsidiaries Subsidiaries

34 34

Financial Report

- 42 42 434434 2 2 478478

122 Advanced Info Service Public Company Limited and its Subsidiaries Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements Notes to the financial statements

Year ended 31 December Year ended 31 December

Year ended 31 December

Finance costs Finance costs Subsidiaries Subsidiaries INTOUCH Group INTOUCH Other relatedGroup parties Other related parties Total Total Dividend paid Dividend paid INTOUCH INTOUCH SingTel SingTel Total Total

Consolidated Separate Consolidated Separate financial statements financial statements financial statements financial statements Consolidated Statements Separate Statements 2014 Financial2013 2014 Financial 2013 2014 2013 2014 2013 2014 2013 2014 2013 (in million Baht) (in (in million Baht) million Baht) -11 1 1

1-1 1 1

168 168 -168 168

42 42 1 -1 43 43

14,180 14,180 8,175 8,175 22,355 22,355

13,711 13,711 7,904 7,904 21,615 21,615

14,180 14,180 8,175 8,175 22,355 22,355

13,711 13,711 7,904 7,904 21,615 21,615

Balances as at 31 December with related parties were as follows: Balances as at 31 December with related parties were as follows: Balances as at 31 December with related parties were as follows: Consolidated Separate Consolidated Separate Consolidated Financial Statements Separate Financial Statements financial statements financial statements financial statements financial 2014 2013 2014 2013 2014 2013 2014 statements 2013 2014 2013 2013 (in million Baht) Baht)2014 (in million (in million Baht) Trade accounts receivable Trade accounts receivable Subsidiaries 5,049 3,962 Subsidiaries 5,049 3,962 INTOUCH Group 511 2 4 INTOUCH Group 5 11 2 SingTel Group 17 96 934 SingTel Group 17 96 93 Total 22 107 5,051 4,059 Total 22 107 5,051 4,059 Accrued income Accrued income Subsidiaries 2,292 2,913 Subsidiaries 2,292 2,913 INTOUCH Group 53INTOUCH Group 5 3 SingTel Group 3 30 3 29 SingTel Group 3 30 3 29 Total 8 33 2,295 2,942 Total 8 33 2,295 2,942 Other receivables - Other Other receivables receivable Other receivable Subsidiaries 1 1 - Subsidiaries Accrued interest income Accrued interest income Subsidiaries 444 176 Subsidiaries 444 176 Total 444 177 Total 444 177 Short-term loans to related parties Short-term loans to related parties Subsidiaries 35,590 35,387 Subsidiaries 35,590 35,387 Associate 95 -Associate 95 Total 95 35,590 35,387 Total 95 35,590 35,387 As at 31 December 2014, the Group has short-term loans to associate bearing interest at the rate of 5.25% As at 31 December 2014, the Group has short-term to associate bearing interest at the rate ofnotes, 5.25% per and the Company short-term loansloans at call to to subsidiaries represent promissory As annum at 31 December 2014, thehas Group has short-term loans associate bearing interest at the rate of per annum and the Company has short-term loans at call to subsidiaries represent promissory notes, bearing interest at the rate 3.83% per (2013: 3.73% pertoannum). 5.25% annum and theofof Company hasannum short-term loans at call subsidiaries represent promissory notes, bearingper interest at the rate 3.83% per annum (2013: 3.73% per annum). bearing interest at the rate of 3.83% per annum (2013: 3.73% per annum).

35 35

123

Annual Report 2014 Advanced Info Service Public Company Limited

Advanced Info Info Service Service Public Public Company Company Limited Limited and and its its Subsidiaries Subsidiaries Advanced Notes to to the the financial financial statements statements Notes

Movements during during the the years years ended ended 31 31 December December of of loans loans to to related related parties parties were were as as follows: follows: Movements Movements during the years ended 31 December of loans to related parties were as follows: Consolidated Separate Consolidated Separate Consolidated Financial Statements Separate Financial Statements financial statements financial statements financial statements financial statements 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 (in million Baht) (in million Baht) (in million Baht) Short-term loans loans to to related related parties parties Short-term At 11 January January 35,387 19,305 At --35,387 19,305 Increase 100 14,648 19,240 Increase 100 14,648 19,240 Decrease (5) (14,445) (3,158) Decrease (5) (14,445) (3,158) At 31 December 95 35,590 35,387 At 31 December 95 35,590 35,387 Consolidated Consolidated

Separate Separate

Consolidated Statements Separate Financial Statements financialFinancial statements financial statements financial statements financial statements 2014 2013 2014 2013 2014 2013 2014 2014 2013 2013 2014 2013 (in million Baht) Baht) (in million million Baht) (in Long-term rental rental deposit deposit Long-term Subsidiary Subsidiary

Accrued expenses expenses -- Accrued Subsidiaries Subsidiaries INTOUCH Group Group INTOUCH SingTel Group SingTel Group Total Total Short-term loan loan from from related related parties parties Short-term Subsidiaries Subsidiaries

655 655

265 265

-30 30 21 21 51 51

-41 41 22 22 63 63

886 886 11 20 20 907 907

500 500 11 -501 501

-30 30 -30 30

-57 57 12 12 69 69

308 308 11 -309 309

829 829 17 17 12 12 858 858

-118 118 12 12 130 130 160 160

-381 381 57 57 438 438 507 507

810 810 19 19 10 10 839 839 1,148 1,148

1,522 1,522 50 50 24 24 1,596 1,596 2,454 2,454

4,400 4,400

As at at 31 31 December December 2013, 2013, short-term short-term loan loan from from related related parties parties represent represent promissory promissory notes, notes, bearing bearing As As at 31atDecember short-term loan from related parties represent promissory notes, bearing interest interest the rate rate of of2013, 2.49% per annum. annum. interest at the 2.49% per at the rate of 2.49% per annum.

36 36

Financial Report

Trade accounts accounts payable payable Trade Subsidiaries Subsidiaries INTOUCH Group Group INTOUCH SingTel Group SingTel Group Total Total Other payables payables Other -- Other Other payable payable Subsidiaries Subsidiaries INTOUCH Group Group INTOUCH SingTel Group SingTel Group

124 Advanced Advanced Info Info Service Service Public Public Company Company Limited Limited and and its its Subsidiaries Subsidiaries Notes Notes to to the the financial financial statements statements

Movements Movements during during the the years years ended ended 31 31 December December of of loans loans from from related related parties parties of of the the Company Company were were as as follows: Movements during the years ended 31 December of loans from related parties of the Company were as follows: follows:

Separate Separate Financial Statements Separate financial financial statements statements 2014 2013 2014 2014(in million Baht)2013 2013 (in (in million million Baht) Baht)

Short-term Short-term loans loans from from related related parties parties Subsidiaries Subsidiaries At At 1 1 January January Increase Increase Decrease Decrease At At 31 31 December December

4,400 4,400 14,200 14,200 (18,600) (18,600) --

-5,500 5,500 (1,100) (1,100) 4,400 4,400

Consolidated Consolidated Separate Consolidated Financial Statements SeparateSeparate Financial Statements financial statements financial statements financial statements financial statements 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013(in million Baht)2014 2013 (in (in million million Baht) Baht)

Long-term Long-term debentures debentures INTOUCH INTOUCH Group Group Other Other related related parties parties Total Total

17 17 17 17 34 34

-3 3 3 3

----

-3 3 3 3

Significant Significant agreements agreements with with related related parties parties The has into agreements with Significant Agreements with The Group/Company Group/Company has entered entered into Related agreements Parties with related related parties parties and and has has commitment commitment for for receipts receipts

and and payments payments according according to to rates rates under under the the terms terms and and conditions conditions stipulated stipulated in in the the agreements. agreements. The The significant agreements with related parties are as follows: The Group/Company has entered agreements with related parties and has commitment for receipts and significant agreements with relatedinto parties are as follows: payments according to rates under the terms and conditions stipulated in the agreements. The significant agreements 1) The Group has into Theparties Groupare hasasentered entered into interconnection interconnection and and national national roaming roaming agreements agreements among among its its related related with 1) related follows: parties. The suspension or termination of the agreement shall be referred to the regulations parties. The suspension or termination of the agreement shall be referred to the regulations and and conditions conditions of of the the National National Telecommunications Telecommunications Commission. Commission. 1) The Group has entered into interconnection and national roaming agreements among its related parties. 2) The entered site share among related parties to site area The termination of the shall be referred to the regulations conditions the National 2) suspension The Group Grouporhas has entered into into siteagreement share agreements agreements among its its related parties and to provide provide site of area including related facilities for installation of telecommunication equipment. The counterparty has including relatedCommission. facilities for installation of telecommunication equipment. The counterparty has aa Telecommunications right to terminate right to terminate the the agreement agreement by by giving giving advance advance written written notice notice to to the the counterparty counterparty of of not not less less than 60 days. than 60 days. 2) The Group has entered into site share agreements among its related parties to provide site area including related

facilities for installation of telecommunication equipment. The counterparty has a rightCo., to terminate the 3) 3) The The Group Group has has received received aa service service of of aa call call center center from from Advanced Advanced Contact Contact Center Center Co., Ltd. Ltd. (“ACC”), aa subsidiary. will provide service and information including agreement by giving advanceACC written to the counterparty of not less than 60 days. resolving (“ACC”), subsidiary. ACC willnotice provide service and required required information including resolving problem problem requests requests from from the the customers customers of of the the Group. Group. 3) The Group has received a service of a call center from Advanced Contact Center Co., Ltd. (“ACC”), a subsidiary. 4) Advanced Advanced Contact Contact Center Center Co., Co., Ltd., Ltd., aa subsidiary, subsidiary, has has entered entered into into aa call call center center service service agreement agreement 4) ACC will provide required information including resolving problem requests from the with Teleinfoservice Media and Plc. (“TMC”), (“TMC”), related party. party. TMC will will arrange the agents agents and provide provide callcustomers with Teleinfo Media Plc. aa related TMC arrange the and call of thecenter Group. center operation operation to to execute execute each each of of incoming incoming call call service. service. The The counterparty counterparty has has aa right right to to terminate terminate the agreement by giving the counterparty a written notice for 30 days in advance. the agreement by giving the counterparty a written notice for 30 days in advance. 4) Advanced Contact Center Co., Ltd., a subsidiary, has entered into a call center service agreement with Teleinfo 5) its parties entered into an with Card 5) The The Company and its related related parties have entered the into agents an agreement agreement with Advanced Advanced Magic Cardto execute Media Plc.Company (“TMC”),and a related party. TMC have will arrange and provide call centerMagic operation Co., Ltd. and Advanced Mpay Co., Ltd, its subsidiaries, to provide payment service for Co., Ltd. and Advanced Mpay Co., Ltd, its subsidiaries, to provide payment service each of incoming call service. The counterparty has a right to terminate the agreement by giving the for counterparty goods/service purchased through electronic payments and cash card. The counterparty has a right goods/service purchased through electronic payments and cash card. The counterparty has a right a written notice for 30 days in advance. to to terminate terminate the the agreement agreement by by giving giving advance advance written written notice notice of of not not less less than than 30 30 days. days.

37 37

Annual Report 2014 Advanced Info Service Public Company Limited

125

The Company and its related parties have entered into an agreement with Advanced Magic Card Co., Ltd. and Advanced Mpay Co., Ltd, its subsidiaries, to provide payment service for goods/service purchased through electronic payments and cash card. The counterparty has a right to terminate the agreement by giving advance written notice of not less than 30 days.

6) Advanced Magic Card Co., Ltd. and Advanced Mpay Co., Ltd, its subsidiaries, have entered into an agreement with Wireless Device Supply Co., Ltd., a subsidiary, to distribute electronic money and cash card. The counterparty has a right to terminate the agreement by giving advance written notice of not less than 15 days. 7) The Company and its subsidiaries have entered into an agreement with Wireless Device Supply Co., Ltd., a subsidiary, to provide card packaging. The counterparty has a right to terminate the agreement by giving advance written notice of not less than 30 days. 8) The Company and its subsidiaries have entered into an international roaming service agreement with the SingTel Group, related parties. The counterparty has a right to terminate the agreement by giving a written notice of 60 days in advance.

10) The Company and its subsidiaries have entered into an agreement with its related parties to provide or aggregate the variety of content as value added services on mobile network or wireless device. The counterparty has a right to terminate the agreement by giving advance written notice to the counterparty of not less than 30 days. 11) The Company has entered into a satellite transponder lease agreement with Thaicom Public Company Limited, a related party, for a monthly fee according to the rate and condition specified in the agreement. The agreement is valid until 21 June 2015. 12) MIMO Tech Co., Ltd., a subsidiary, has entered into agreements with I.T. Applications and Services Company Limited, a related party, to receive computer system maintenance services. The agreement is valid for one year and is renewable on an annual basis. The counterparty has a right to terminate the agreement by giving advance written notice of 3 months.

Financial Report

9) The Company and its subsidiaries have entered into an agreement with MIMO Tech Co., Ltd., a subsidiary, of providing or aggregating the variety of content as value added services on mobile network or wireless device. The counterparty has a right to terminate the agreement by giving a written notice of 30 days in advance.

The counterparty has a right to terminate the agreement by giving advance written notice to the counterparty of not less than 30 days.

126

11) The Company has entered into a satellite transponder lease agreement with Thaicom Public Company Limited, a related party, for a monthly fee according to the rate and condition specified in the agreement. The agreement is valid until 21 June 2015. 12) MIMO Tech Co., Ltd., a subsidiary, has entered into agreements with I.T. Applications and Services Company Limited, a related party, to receive computer system maintenance services. The agreement is valid for one year and is renewable on an annual basis. The counterparty has a right to terminate the agreement by giving advance written notice of 3 months.

6 Cash Cash Equivalents Cash and and cash equivalents

Consolidated Consolidated Financial Statements SeparateSeparate Financial Statements financial statements financial statements 2014 2013 2014 2013 Note 2014 2013 2013 Note (in million Baht)2014 Cash on hand Cash at bank - current accounts Cash at bank - saving accounts Highly liquid short-term investments Less Specifically-used bank deposits Total

16 716 17,149

(in million Baht) 16 13 736 38 13,797 1,628

15 87 3,160

86 17,967

705 15,254

1,679

703 3,965

(3,709) 14,258

(3,781) 11,473

1,679

3,965

As at 31 December 2014, the effective interest rate on cash and cash equivalents was 0.06% - 2.44% per annum (2013: 0.01% - 2.60% per annum). As at 31 December 2014, the effective interest rateLimited on cash and cash was 0.06% - 2.44% per annum Advanced Info Service Public Company and itsequivalents Subsidiaries (2013: 0.01% 2.60% per annum). Notes to the financial statements

7 Specifically-designated Bank Deposits Specifically-designated bank deposits

In order to comply with the Notification of the Bank of Thailand applicable to the electronic cash card business, In order to comply with the Notification of the38Bank of Thailand applicable to the electronic cash card the subsidiaries’ held deposits at held call with banksatequal to thebanks subsidiaries’ balance of advance receipts business, the subsidiaries’ deposits call with equal tooutstanding the subsidiaries’ outstanding balance ofwhich advance receipts from whichapart cannot used fortoother purposes apart from customers cannot be used forcustomers other purposes frombepayments service providers as atfrom 31 December payments to service providers as at 31 December 2014 amounting to Baht 3,709 million (2013: Baht 2014 amounting to Baht 3,709 million (2013: Baht 3,781 million). 3,781 million).

Other Investments investments 8 Other

Consolidated Consolidated Financial Statements Separate Separate Financial Statements financial statements financial statements 2014 2013 2014 2013 2014 2013(in million Baht)2014 2013 (in million Baht)

Current investments Fixed deposit at financial institutions Available-for-sale securities Other long-term investments Fixed deposit at financial institutions - pledged Other non - marketable equity securities Total

1,542 1,542

92 1,485 1,577

11 47 58 1,600

11 93 104 1,681

47 47 47

93 93 93

Fixed deposit at financial institutions As at 31 December 2014, fixed deposits at financial institutions of the Group have interest rates of 1.50% per annum (2013: 2.25% - 3.13% per annum). Available-for-sale securities As at 31 December 2014, the Group had debt securities held through private funds, managed by independent fund manager and have interest rates from 0.37% to 5.63% per annum (2013: 0.50% to 4.00% per annum). Movements during the years ended 31 December of available-for-sale of marketable equity and debt securities were as follows:

(in million Baht) Current investments Fixed deposit at financial institutions securities 1,542 Annual Available-for-sale Report 2014 Advanced Info Service Public Company Limited 1,542 Other long-term investments Fixed deposit at financial institutions - pledged 11 Other non - marketable equity securities 47 58 Total 1,600

92 1,485 1,577

11 93 104 1,681

47 47 47

93 93 93

127

Fixed deposit at financial institutions Fixed deposit at financial institutions AsAs at at 3131December of the the Group Grouphave haveinterest interestrates ratesofof 1.50% December2014, 2014,fixed fixeddeposits deposits at at financial financial institutions institutions of per annum 2.25% - 3.13% per- 3.13% annum). 1.50%(2013: per annum (2013: 2.25% per annum).

Available-for-sale securities Available-for-sale securities As at 31 December 2014, the Group had debt securities held through private funds, managed by Asindependent at 31 December 2014, theand Group debtrates securities through private funds, (2013: managed by independent fund manager havehad interest from held 0.37% to 5.63% per annum 0.50% to fund manager have interest rates from 0.37% to 5.63% per annum (2013: 0.50% to 4.00% per annum). 4.00% perand annum). Movements duringthe theyears yearsended ended31 31December Decemberof ofavailable-for-sale available-for-saleofofmarketable marketable equity equity and and debt debt securities Movements during securities were as follows: were as follows: Consolidated Separate Consolidated Statements financial Separate Financial Statements financialFinancial statements statements 2014 2013 2014 2013 2014 2013 2014 2013 (in million Baht) (in million Baht)

1,485 1,940 (1,883) 1,542

751 1,680 (946) 1,485

Other non - marketable equity securities On 30 September 2014, at the extraordinary general meeting of Bride Mobile Pte Ltd., resolutions were passed to approve the decrease in ordinary shares of each shareholder. The Company’s investment in Bridge Mobile Pte Ltd. has decreased from 2.20 million ordinary shares (USD 2.70 million (Baht 93 million) to 0.80 million ordinary shares 39 (USD 1.30 million (Baht 47 million)). The Company still owns 10% of its paid-up share capital. On 23 April 2014, at the annual general meeting of the Clearing House for Number Portability Co., Ltd., the shareholders approved the appropriation of dividend of Baht 2,500 per share to shareholders on 19 May 2014, amounting to Baht 10 million and Baht 5 million for the Group and the Company, respectively. On 1 October 2013, the Company transferred shares of Clearing House for Number Portability Co., Ltd., to Advanced Wireless Network Company Limited (“AWN”), a subsidiary, of 2,000 ordinary shares, totaling Baht 0.2 million. As a result, the Company’s ownership changed from 20% to 10% of its paid-up share capital (The group’s ownership represented 20%).

Financial Report

Current investments Available-for-sale securities At 1 January Increase during the year Decrease during the year At 31 December

Company still owns 10% of its paid-up share capital.

128

On 23 April 2014, at the annual general meeting of the Clearing House for Number Portability Co., Ltd., the shareholders approved the appropriation of dividend of Baht 2,500 per share to shareholders on 19 May 2014, amounting to Baht 10 million and Baht 5 million for the Group and the Company, respectively. On 1 October 2013, the Company transferred shares of Clearing House for Number Portability Co., Ltd., to Advanced Wireless Network Company Limited (“AWN”), a subsidiary, of 2,000 ordinary shares, totaling Baht 0.2 million. As a result, the Company’s ownership changed from 20% to 10% of its paid-up share capital (The group’s ownership represented 20%).

9 Trade Receivable TradeAccounts accounts receivable

Related parties: - Trade accounts receivable - Accrued income

Consolidated Separate Financial Statements Consolidated Financial Statements Separate financial statements 2014 2013 financial 2014 statements 2013 Note Note 2014 2013(in million Baht) 2014 2013 (in million Baht) 5 22 107 5,051 4,059 8 33 2,295 2,942 30 140 7,346 7,001

Other parties: - Trade accounts receivable - Accrued income

5,889 5,478 11,367 11,397 (982) 10,415

Total Less allowance for doubtful accounts Net

5,930 4,966 10,896 11,036 (772) 10,264

1,038 1,795 2,833 10,179 (235) 9,944

2,579 2,331 4,910 11,911 (381) 11,530

Advanced Info Service Public Company Limited and its Subsidiaries andfinancial doubtful debts expense for the year NotesBad to the statements

1,240

787

360

Aging analyses analyses for for trade trade accounts Aging accountsreceivable receivableare areas asfollows: follows: Consolidated Consolidated Financial Statements SeparateSeparate Financial Statements financial 2014 statements 2013 financial 2014 statements 2013 2014 2013 (in million Baht) 2014 2013 (in million Baht) Related parties Current - 3 months Overdue 3 - 6 months Overdue 6 - 12 months

30 30

Other parties Current - 3 months Overdue 3 - 6 months Overdue 6 - 12 months Overdue over 12 months 40

Less allowance for doubtful accounts

Net

122 16 2 140

7,335 11 7,346

6,778 221 2 7,001

2,899 131 203 1,677 4,910 (381) 4,529

9,028 305 117 1,917 11,367 (982) 10,385

8,699 262 - 218 1,717 10,896 (772) 10,124

834 52 80 1,867 2,833 (235) 2,598

10,415

10,264

9,944

11,530

The normal credit term granted by the Group/Company ranges from 14 days to 30 days.

The normal credit term granted by the Group/Company ranges from 14 days to 30 days. As at 31 December 2014, the Group/Company had the outstanding balance of accrued income of revenue sharing in international direct dial service (IDD) of Baht 1,574 million and Baht 1,565 Asmillion, at 31 December 2014, the Group/Company had the accrued income of of revenue respectively (2013: Baht 1,526 million andoutstanding Baht 1,517balance million,ofrespectively). Part that sharing outstandingdirect is presented overdue 12 1,574 months of Baht 1,5151,565 million and respectively Baht 1,506(2013: million, in international dial servicein(IDD) of Baht million and Baht million, Baht 1,526 respectively (2013: Baht 1,280 million and Baht 1,272 million, respectively). million and Baht 1,517 million, respectively). Part of that outstanding is presented in overdue 12 months of Baht 1,515 million and Baht 1,506 million, respectively (2013: Baht 1,280 million and Baht 1,272 million, respectively). On 16 January 2013, the Company has submitted a dispute to the Arbitration Institute demanding TOT Public Company Limited (“TOT”) to pay this receivable plus interest, the total amount of Baht 1,526 million.

On 26 November 2013, Digital Phone Company Limited, a subsidiary, has submitted a dispute to the Central Administrative Court demanding CAT Public Company Limited (“CAT”) to pay this receivable plus interest, the total amount of Baht 11 million.

Net

10,385

10,124

2,598

4,529

10,415

10,264

9,944

11,530

129

Annual Report 2014 Advanced Info Service Public Company Limited

OnOn 1616 January 2013, disputetotothe theArbitration ArbitrationInstitute Institute demanding TOT Public January 2013,the theCompany Companyhas has submitted submitted aa dispute demanding TOT Company Limited (“TOT”) to pay this receivable plus interest, the total amount of Baht 1,526 million. Public Company Limited (“TOT”) to pay this receivable plus interest, the total amount of Baht 1,526 million. On 26 November 2013, Digital Phone Company Limited, a subsidiary, has submitted a dispute to the Central On 26 November 2013, Digital Phone Company Limited, a subsidiary, has submitted a dispute to the Administrative Court demanding CAT Public Company Limited (“CAT”) to pay this receivable plus interest, the total Central Administrative Court demanding CAT Public Company Limited (“CAT”) to pay this amount of Baht 11 receivable plusmillion. interest, the total amount of Baht 11 million.

Other receivables 10 Other Receivables

969

913

1,454 807 1,237 5,901

1,168 299 1,433 4,851

698 940 1,987

675 1,205

Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements

11 11 Inventories Inventories

Finished goods Supplies and spare parts Spare parts for mobile phone network maintenance Less allowance for obsolescence and decline in value Net

41 Consolidated Separate Separate Financial Statements Consolidated Financial Statements financial statements financial statements 2014 2013 2014 2013 2014 2013 (in million Baht) 2014 2013 (in million Baht) 2,430 2,711 4 266 280 22 42 468 3,164

679 3,670

468 490

679 725

(645) 2,519

(805) 2,865

(438) 52

(645) 80

Investments in associate

At 1 January Invest in share capital Share loss from investment in associate At 31 December

Consolidated financial statements 2014 2013 (in million Baht) 4 (4) -

On 9 June 2014, Super Broadband Network Company Limited (“SBN”), a subsidiary, has invested in 145,000 shares of Information Highway Co., Ltd. (“IH”) by Baht 25 per share, totaling Baht 3.6 million, representing 29% of ownership. On 24 September 2014, Advanced Broadband Network Company Limited (“ABN”), a subsidiary, has purchased investment in IH from SBN by 145,000 shares of Baht 25 per share, totaling Baht 3.6 million, representing 29% of ownership.

Financial Report

Prepaid expenses Account receivables - cash card/ refill on mobile Account receivables - Revenue department Withholding tax Others Total

Consolidated Separate Separate Financial Statements Consolidated Financial Statements financial statements financial statements 2013 2014 2013 Note 2014 Note 2014 2013 (in million Baht) 2014 2013 (in million Baht) 1,434 1,038 349 530

130

Finished goods Supplies and spare parts Spare parts for mobile phone network maintenance

financial statements financial statements 2014 2013 2014 2013 (in million Baht) 2,430 2,711 4 266 280 22 42

Less allowance for obsolescence and decline in value Net

468 3,164

679 3,670

468 490

679 725

(645) 2,519

(805) 2,865

(438) 52

(645) 80

12 Investments in Associate Investments in associate

Consolidated Financial Statements Consolidated financial statements 2014 2013 2014 (in million Baht) 2013 (in million Baht) 4 (4) -

At 1 January Invest in share capital Share loss from investment in associate At 31 December

On 9 June 2014, Super Broadband Network Company Limited (“SBN”), a subsidiary, has invested in On 9 June 2014, Super Broadband Network Company Limited (“SBN”), a subsidiary, has invested in 145,000 shares 145,000 shares of Information Highway Co., Ltd. (“IH”) by Baht 25 per share, totaling Baht 3.6 of Information Highway Co., Ltd.of(“IH”) by Baht 25 per share, totaling Baht 3.6 million, representing 29% of ownership. million, representing 29% ownership. September2014, 2014,Advanced AdvancedBroadband Broadband Network Network Company Company Limited (“ABN”),aasubsidiary, subsidiary,has haspurchased OnOn 2424 September Limited (“ABN”), purchased investment in IH from SBN by 145,000 shares of Baht 25 per share, totaling Baht 3.6 investment in IH from SBN by 145,000 shares of Baht 25 per share, totaling Baht 3.6 million, representing 29% million, representing 29% of ownership. of ownership.

Consolidated Financial Statements Dividend income

date

interest

assets

Non-

assets

liabilities

Non-

liabilities

revenues

2014

assets

liabilities

expenses

2014 Associate Information Highway Co., Ltd.

31 December

Reporting 31 Reporting December date date

Ownership interest 29 Ownership (%) interest (%)

Current assets 66 Current assets

126

Non-current Nonassets 126 current assets

192

Total assets 192 Total assets

198

Current liabilities 198 Current liabilities

198

Non-current Total Nonliabilities liabilities 198 current Total (in million Baht) liabilities liabilities (in million Baht)

Total revenues Total revenues

Total expenses 19 Total expenses

(19)

Profit / (loss) (19) Profit/ (loss)

Profit/ (loss)

Financial Report

2014 Associate Information Highway Co., Ltd.

The following summarised financial information (%) on equity-accounted investees is not adjusted for the(inpercentage million Baht)ownership held by the Group:

Dividend income 2014 2013

2013

2014 2013 Dividend income follows:

Consolidated financial statements 29 12 12 4 Ownership interest Paid-up capital Cost Equity 2014 2013 2014 2013 2014 2013 2014 2013 equity-accounted investees is not adjusted for the percentage ownership held by the Group: (%) (in million Baht)

income

2014 Equity 2013 2013 2014 2013 (in million Baht) from those investments for(in themillion yearsBaht) then ended were as

2013

Equity

Information Highway Co., Ltd. financial 29Current - current 12 isTotal 12 Current -ownership - Total Reporting Ownership current Total Total The following summarised information on equity-accounted investees not adjusted for the4percentage held by the Group:

Associate

Cost

Consolidated financial statements 2014 capital 2013 2014 Cost Paid-up 2014 2013 2014

2014 (%) 2013 2014 and 2013, (%) and dividend

Ownership 2014 2013 interest

The following summarised financial information on

Information Highway Co., Ltd.

Associate

Investments in associate as at 31 December

Notes to the financial statements

Paid-up capital Advanced Info Service Public Company Limited and its Subsidiaries interest

Investments in associate as at 31 December 2014 and 2013, and dividend income from those investments for the years then ended were as follows: Ownership

Notes to the financial statements

Advanced Info Service Public Company Limited and its Subsidiaries

Investments in associate as at 31 December 2014 and 2013, and dividend income from those investments for the years then ended were as follows:

Annual Report 2014 Advanced Info Service Public Company Limited

131

132 Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements

13 Investments in Subsidiaries Investments in subsidiaries

SeparateSeparate Financial Statements financial statements 2014 2013 2014 (in million Baht) 2013 (in million Baht) 7,912 6,993 1,135 (216) 7,912 7,912

At 1 January Increase in share capital Allowance for impairment At 31 December

Liquidation of a subsidiary Liquidation of a subsidiary At the Board of Directors’ meeting held on 4 August 2014, the Board approved liquidation of Revolution Co., Ltd. and the transfer liquidation of its internet business Internet AtAdvanced the Board Internet of Directors’ meeting held on(“AIR”), 4 Augusta subsidiary, 2014, the Board approved of Advanced to Super Broadband Network Co., Ltd. (“SBN”), a subsidiary, and does not have any plans to continue Revolution Co., Ltd. (“AIR”), a subsidiary, and the transfer of its internet business to Super Broadband Network Co., Ltd. its operation. AIR has registered the dissolution with the Ministry of Commerce on 8 September 2014. (“SBN”), a subsidiary, and does not have any plans to continue its operation. AIR has registered the dissolution with the Ministry of in Commerce on 8ofSeptember 2014. Addition share capital a subsidiary On 19 2013, Wireless Network Co., Ltd. (“AWN”), a subsidiary, registered the Addition inSeptember share capital ofAdvanced a subsidiary increase in the share capital from Baht 350 million (3,500,000 ordinary shares, Baht 100 par value) to Baht 1,350 million (13,500,000 ordinary shares, Baht 100 par value) and premium on ordinary shares Onof19Baht September 2013, Advanced Wireless Network Co.,The Ltd.purpose (“AWN”), a subsidiary, registered the increase in the 135 million with the Ministry of Commerce. of the capital increase is for future share investment. capital fromThe BahtCompany 350 million (3,500,000 ordinary shares, Baht 100 par value) to Baht 1,350 million (13,500,000 paid for the increased shares by Baht 113.5 per share, totalling Baht 1,135 million and Baht holds100 99.99% the issued share capital. ordinary shares, par of value) and premium on ordinary shares of Baht 135 million with the Ministry of Commerce. The purpose of the capital increase is for future investment. The Company paid for the increased shares Impairment investment by Baht 113.5 per in share, totalling Baht 1,135 million and holds 99.99% of the issued share capital. The Company recorded a loss from impairment for the year ended 31 December 2013 of Baht 216 Impairment investment million in from the review of the carrying amount of investment in subsidiary, Digital Phone Co., Ltd. (“DPC”), by comparing net book value with the recoverable net present value of future cash generation DPC provides a continuing services to 31 theDecember subscribers under a temporary The Companyassuming recordedthat a loss from impairment for the year ended 2013 of Baht 216 million from customer protection measure (see note 1.3 to the financial statement) based on value-in-use calculation the review of the carrying amount of investment in subsidiary, Digital Phone Co., Ltd. (“DPC”), by comparing net and using a pre-tax discount rate of 8.9%. book value with the recoverable net present value of future cash generation assuming that DPC provides a continuing services to the subscribers under a temporary customer protection measure (see note 1.3 to the financial statement) based on value-in-use calculation and using a pre-tax discount rate of 8.9%.

Separate Financial Statements

99.99

98.55

99.99

99.98

99.99

99.98

Advanced Contact Center Co., Ltd.

Digital Phone Co., Ltd.

Advanced Magic Card Co., Ltd.

Advanced Mpay Co., Ltd.

AIN GlobalComm Co., Ltd.

Advanced Wireless Network Co., Ltd.

Super Broadband Network Co., Ltd.

Wireless Device Supply Co., Ltd.

Fax Lite Co., Ltd.

MIMO Tech Co., Ltd.

Advanced Broadband Network Co., Ltd.

Total

99.99

Advanced Internet Revolution Co., Ltd.

Subsidiaries

99.97

99.99

99.97

99.99

98.55

99.99

300

1,350

100

300

250

3,655

272

240

300

1,350

100

300

250

3,655

272

240

Paid-up capital 2014 2013

16,477

300

1,485

100

336

250

12,493

811

600

2014

Cost

16,477

300

1,485

100

336

250

12,493

811

600

2013

50 1

(8,230) (8,565)

7,912

300

1,485

100

336

250

4,263

811

(335)

265

7,912

300

1,485

100

336

250

4,263

811

265

At cost - net 2014 2013

(335)

Impairment 2014(in million Baht) 2013 (in million Baht)

22,848

1,181

683

607

2,660

15,873

1,297

547

8,216

1,230

320

860

1,785

1,904

1,460

630

Dividend income 2014 2013

Financial Report

Ownership interest 2014 (%) 2013 (%)

Separate financial statements 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013

Ownership2014 and 2013, and dividend income from those investments for the years then ended were as follows: Investments in subsidiaries as at 31 December Paid-up capital Cost Impairment At cost - net Dividend income interest

Notes to the financial statements

Advanced Info Service Public Company Limited and its Subsidiaries

Investments in subsidiaries as at 31 December 2014 and 2013, and dividend income from those investments for the years then ended were as follows:

Annual Report 2014 Advanced Info Service Public Company Limited

133

Depreciation and impairment losses At 1 January 2013 Depreciation charge for the year Disposals At 31 December 2013 and 1 January 2014 Depreciation charge for the year Transfers and reclassify Disposals Impairment losses At 31 December 2014 (375) (26) (401) (21) 5 (417)

500 (7) 493

175 349 524

500 -

and building improvements

Building and building Building improvements

139 36 -

Land

Property, plant and equipment

Cost At 1 January 2013 Additions Transfers and reclassify Disposals At 31 December 2013 and 1 January 2014 Additions Transfers and reclassify Disposals At 31 December 2014

Notes to the financial statements

14 Property, Plant and Equipment

(657) (108) 3 93 (669)

(585) (82) 10

952 289 (114) 1,127

796 169 (13)

building improvements

Leasehold building Leasehold improvements

(33,055) (6,015) 2,657 (4) (36,417)

(31,785) (2,858) 1,588

56,531 22,419 7,130 (2,700) 83,380

39,344 14,786 4,013 (1,612)

Computer, tools and Computer, equipment

(1,434) (46) 39 (1,441)

(1,420) (38) 24

1,561 87 (33) 1,615

1,520 69 (28)

(8) (8)

(8) -

8 8

8 -

(139) (35) 43 (131)

(154) (33) 48

237 52 (50) 239

255 36 (54)

Consolidated financial statements Furniture, Communication Furniture, ComVehicles fixtures and equipment fixtures munication office equipment for rental tools and and office equipment (inequipment million Baht) equipment for rental Vehicles (in million Baht)

Consolidated Financial Statements

Advanced Info Service Public Company Limited and its Subsidiaries

(27) (27)

(27) -

11,679 7,897 (7,130) (19) 12,427

2,932 12,760 (4,013) -

Assetsunder under Assets construction construction and installation and installation

(35,721) (6,225) 3 2,837 (4) (39,110)

(34,354) (3,037) 1,670

71,643 31,093 (2,923) 99,813

45,494 27,856 (1,707)

Total

134

524 524

175 175

139 139

76 76

99 99

125 125

and building improvements

Building and building Building improvements

458 458

295 295

211 211

building improvements

Leasehold building Leasehold improvements

46,963 46,963

23,476 23,476

7,559 7,559

100 100

127 127 174 174

Consolidated financial statements Furniture, Communication Furniture, Comfixtures and equipment fixtures munication office equipment for rental tools and office equipment (inand million Baht) equipment equipment for rental (in million Baht)

Computer, tools and Computer, equipment

Consolidated Financial Statements

8 100 108

9 89 98

13 88 101

Vehicles

12,400 12,400

11,652 11,652

2,905 2,905

Assets under

Assets under construction construction and installation and installation

60,603 100 60,703

35,833 89 35,922

11,052 88 11,140

Total

Financial Report

The gross amount of the Groupâ&#x20AC;&#x2122;s fully depreciated property, plant and equipment that was still in use as at 31 December 2014 amounted to Baht 25,179 million (2013: Baht 25,713 million). The gross amount of the Groupâ&#x20AC;&#x2122;s fully depreciated property, plant and equipment that was still in use as at 31 December 2014 amounted to Baht 25,179 million (2013: Baht 25,713 million).

At 31 December 2014 Owned assets Assets under finance leases

At 31 December 2013 and 1 January 2014 Owned assets Assets under finance leases

Net book value At 1 January 2013 Owned assets Assets under finance leases

Land

Notes to the financial statements

Advanced Info Service Public Company Limited and its Subsidiaries Annual Report 2014 Advanced Info Service Public Company Limited

135

663 139 (12) 790 183 (400) 573

412 (40) 372

building improvements

Leasehold building Leasehold improvements

412 -

and building improvements

Building and building Building improvements

24,737 176 (3,015) 21,898

26,130 213 1 (1,607)

Computer, tools and Computer, equipment

26 26

43 43

63 63

(369) (15) Building 38 and building improvements (346)

(20) -

152 152

218 218

140 140

(572) (68) 3 Leasehold 216 building improvements (421)

(57) 8

(1,277) (27) 27

(137) (28) 47

704 704

930 930

1,235 1,235

61 61

85 85

74 74

7 58 65

8 70 78

11 72 83

(23,807) (1,277)statements (118) Separate financial (361) Furniture, (26) (26) Computer,fixtures163 57 tools2,974 and and office equipment Vehicles (21,194) equipment (1,140) (87) (in million Baht)

(475) 1,563

196 24 (68) 152

220 30 (54)

95 95

226 226

117 117

Assets under construction and installation-

226 (122) (9) 95

117 114 (1) (4)

Assets under Assets under construction construction and installation and installation

1,045 58 1,103

1,510 70 1,580

1,640 72 1,712

(26,143) (496) 3 3,448 Total (23,188)

(27,181) (607) 1,645

27,723 292 (3,724) 24,291

28,893 537 (1,707)

Total

The fully depreciated plant and and equipment that was useinasuse at 31 2014 amounted to Baht 21,564 million (2013: The gross gross amount amountofofthe theCompanyâ&#x20AC;&#x2122;s Companyâ&#x20AC;&#x2122;s fully depreciated plant equipment thatstill wasinstill as December at 31 December 2014 amounted to Baht 21,564 million Baht 24,099 million). (2013: Baht 24,099 million).

At 31 December 2014 Owned assets Assets under finance leases

At 31 December 2013 and 1 January 2014 Owned assets Assets under finance leases

Net book value At 1 January 2013 Owned assets Assets under finance leases

Disposals At 31 December 2013 and 1 January 2014 Depreciation charge for the year Transfers and reclassify Disposals At 31 December 2014

Notes to the charge financial statements Depreciation for the year

1,362 31 (192) 1,201

1,351 41 (30)

Separate financial statements Furniture, Furniture, Vehicles fixtures and fixtures tools and office andequipment office (in million Baht) equipment equipment Vehicles (in million Baht)

Separate Financial Statements

Advanced Info Service Public Company Limited Subsidiaries At 1 January 2013 (349) and its(523) (24,895)

Depreciation

Cost At 1 January 2013 Additions Transfers and reclassify Disposals At 31 December 2013 and 1 January 2014 Additions Disposals At 31 December 2014

Notes to the financial statements

Advanced Info Service Public Company Limited and its Subsidiaries

136

137

Annual Report 2014 Advanced Info Service Public Company Limited Advanced Advanced Info Service InfoPublic ServiceCompany Public Company Limited Limited and its Subsidiaries and its Subsidiaries Notes to the Notes financial to the statements financial statements 15

Intangible 15 Intangible assets under assets the under Agreements the Agreements for operations for operations Consolidated Consolidated financial statements financial statements 15 Intangible Assets Under the Agreements for Operations Advance Advance payment payment and andStatements assets Consolidatedassets Financial under under Advance payment Cost of Cost ofof of Cost of mobile Cost Cost Cost construction of construction and assets under datanet phone construction of mobile andmobile mobile networks mobile datanet tools datanet of of mobile networks phone phone tools and equipment tools and phone phone phone (in million Baht) networks networks equipment equipment networks networks Total (in million Baht) (in million Baht) 192,124 192,124 1,548 3,766 3,766 427 427 (14,294) (14,294) (14,605) (14,605) -

1,548 2,761 - (427) -

2,761 196,433 196,433 3,766 3,766 (427) (14,294) (14,294) (14,605) (14,605)

167,418 167,418 1,548 600 600 1,402 1,402 (23,997) (23,997) (300) 145,423 145,423 1,248

1,548 2,334 -(1,699) (300) 1,248 635

2,334 171,300 171,300 -600 600 (1,699) (297) (297) (24,297) (24,297) 147,306 635 147,306

Amortisation Amortisation and impairment and impairment losses losses At 1 January At2013 1 January 2013 (165,738) (165,738) (1,538) Amortisation Amortisation charge for the charge yearfor the year (11,876) (11,876) (1) Disposal and Disposal write-off and write-off 13,748 13,748 Transfer to Transfer CAT to CAT 14,605 14,605 At 31 December At 31 December 2013 and 2013 and 1 January 2014 1 January 2014 (149,261) (149,261) (1,539) Amortisation Amortisation charge for the charge yearfor the year (11,308) (11,308) (1) ImpairmentImpairment losses losses - (8) Disposal and Disposal write-off and write-off 23,186 23,186300 Transfer Transfer 63 63 At 31 December At 31 December 2014 2014 (137,320) (137,320) (1,248) Net book value Net book value At 1 January At 2013 1 January 2013 At 31 December At 31 December 2013 and 2013 and 1 January 2014 1 January 2014 At 31 December At 31 December 2014 2014

Total

(1,538) (1) -

(167,276) (167,276) (11,877) (11,877) 13,748 13,748 14,605 14,605

(1,539) (1) (8) 300 (1,248)

(150,800) (150,800) (11,309) (11,309) - (8) (8) 23,486 23,486 - 63 63 (138,568) (138,568)

26,386

26,386 10

10 2,761

2,761 29,157

29,157

18,157 8,103

18,157 9 8,103 -

9 2,334 - 635

2,334 20,500 635 8,738

20,500 8,738

The gross amount The gross of the amount Group’s of the fully Group’s amortised fullyassets amortised underassets the Agreements under the Agreements for operations for that operations was that was in use as still at in 31use December asthe at 31 2014 December amounted toamounted Baht 70,907 tounder Baht million 70,907 (2013: million Baht(2013: 95,553 Baht million). 95,553 million). stillThe gross amount of Group’s fully 2014 amortised assets the Agreements for operations that was still in use as at 31 December 2014 amounted to Baht 70,907 million (2013: Baht 95,553 million).

Financial Report

Cost Cost At 1 January At2013 1 January 2013 Additions Additions Transfers Transfers Disposal and Disposal write-off and write-off Transfer to Transfer CAT to CAT At 31 December At 31 December 2013 and 2013 and 1 January 2014 1 January 2014 Additions Additions Transfers and Transfers reclassify and reclassify Disposal and Disposal write-off and write-off At 31 December At 31 December 2014 2014

Total

138 Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements

Separate financial statements Advance payment and assetsStatements Separate Financial under Advance payment Cost of Cost of construction and assets under mobile phone Total construction mobile of mobileof networks mobile phone networks phone phone (innetworks million Baht) networks Total (in million Baht) Cost At 1 January 2013 Additions Transfers Disposals At 31 December 2013 and 1 January 2014 Additions Transfers and reclassify Disposals At 31 December 2014

177,889 3,638 427 (14,536) 167,418 600 1,402 (23,997) 145,423

Amortisation At 1 January 2013 Amortisation charge for the year Disposals At 31 December 2013 and 1 January 2014 Amortisation charge for the year Transfers and reclassify Disposals At 31 December 2014

(152,191) (11,064) 13,994 (149,261) (11,308) 63 23,186 (137,320)

Net book value At 1 January 2013 At 31 December 2013 and 1 January 2014 At 31 December 2014

25,698 18,157 8,103

2,761 (427) 2,334 (1,699) 635

2,761 2,334 635

180,650 3,638 (14,536) 169,752 600 (297) (23,997) 146,058

(152,191) (11,064) 13,994 (149,261) (11,308) 63 23,186 (137,320)

28,459 20,491 8,738

The gross amount of the Companyâ&#x20AC;&#x2122;s fully amortised assets under the Agreement for operations that was stillamount in use of as the at 31 Decemberfully 2014 amounted to under Baht 69,861 million (2013: Baht 80,947 The gross Companyâ&#x20AC;&#x2122;s amortised assets the Agreement for operations that was still in million). use as at 31 December 2014 amounted to Baht 69,861 million (2013: Baht 80,947 million). Part of assets under the Agreement for operations is 13,198 towers that the Company has transferred Part of assets under the Agreement forisoperations 13,198 thatthat theDigital Company hasCompany transferred to TOT to TOT Public Company Limited and 152 towersis and 115 towers containers Phone PublicLimited, Company Limited and 152 towerstoand 115 containers thatLimited. Digital Phone Company Limited, a subsidiary, a subsidiary, hasis transferred CAT Public Company The Group is of the opinion that the Tower and the Container are not the tools and equipment specified under the Agreement. has transferred to CAT Public Company Limited. The Group is of the opinion that the Tower and the Container are Therefore, Group shall not beunder obligated to transfer the Tower and Container. The hasto transfer not the tools andthe equipment specified the Agreement. Therefore, thethe Group shall not be Group obligated also submitted the disputes to the Dispute Reconciliation Office, Justice Court Office requesting the the Tower and the Container. The Group has also submitted the disputes to the Dispute Reconciliation Office, Justice Arbitral Tribunal to give an award that the said assets are not the property as stipulated in the CourtAgreement Office requesting the Arbitral Tribunal to give an award that the said assets are not the property as stipulated in July 2014. in the Agreement in July 2014.

139

Annual Report 2014 Advanced Info Service Public Company Limited Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements Goodwill 16 Goodwill Goodwill

16 16

Consolidated financial Consolidated Financial Statements Consolidated statements (infinancial million Baht)

Cost At 1 January 2013 Cost At December At 131January 20132013 and 1 January 2014 At At 31 31 December December 2014 2013 and 1 January 2014 At 31 December 2014 Amortisation and impairment losses At 1 January 2013 Amortisation and impairment losses At December At 131January 20132013 and 1 January 2014 At At 31 31 December December 2014 2013 and 1 January 2014 At 31 December 2014 Net book value At January Net1book value2013 At 31 December 2013 and 1 January 2014 1 January 2013 At 31 December 2014 2013 and 1 January 2014 At 31 December 2014

(14,317) (14,317) (14,317) (14,317) (14,317) (14,317) 35 35 35 35

License for operation right in spectrum of telecommunication License for operation right in spectrum of telecommunication

17 License for Operation Right in Spectrum of Telecommunication Consolidated financial Consolidated statements Consolidatedfinancial Financial Statements (in(in million Baht) statements million Baht) Cost (in million Baht) At 1 January 2013 14,644 Cost At 31 December 2013 and 1 January 2014 14,644 At 1 January 2013 14,644 At 31 December 2014 14,644 At 31 December 2013 and 1 January 2014 14,644 At 31 December 2014 14,644 Amortisation At 1 January 2013 (67) Amortisation Amortisation charge for the year (976) At 1 January 2013 (67) At 31 December 2013 January 2014 (1,043) Amortisation charge forand the 1year (976) Amortisation charge forand the 1year (976) At 31 December 2013 January 2014 (1,043) At 31 December 2014 (2,019) Amortisation charge for the year (976) At 31 December (2,019) Net book value 2014 At January 14,577 Net1book value2013 At 31 December 2013 and 1 January 2014 13,601 1 January 2013 14,577 At 31 December 2014 12,625 2013 and 1 January 2014 13,601 At 31 December 2014 12,625 On 16 October 2012, Advanced Wireless Network Co., Ltd. (“AWN”), a subsidiary, was the auction winner for 2.1GHz license (3G) at the bid Network price of Baht 14,625 million. aOn 7 December AWN On 16 October 2012, Advanced Wireless Co., Ltd. (“AWN”), subsidiary, was2012, the auction was officially granted the license to operate 2.1GHz for 15 years from the National Broadcasting and winner for Onwinner 16 October 2012,license Advanced Co., 14,625 Ltd. (“AWN”), subsidiary, was2012, the auction for 2.1GHz (3G) Wireless at the bidNetwork price of Baht million. aOn 7 December AWN Telecommunications Commission (“NBTC”). According to the auction terms and conditions, AWN waslicense officially operate 2.1GHz for 15 from the National Broadcasting and granted the 2.1GHz (3G)granted at the the bid license price oftoBaht 14,625 million. Onyears 7 December 2012, AWN was officially paid 50% of the fee plus VAT, totaling Baht 7,824 million on 19 October 2012 and submittedAWN bank Telecommunications Commission (“NBTC”). According to the auction terms and conditions, license to operate 2.1GHz for 15 years from the National Broadcasting and Telecommunications Commission (“NBTC”). guarantee the plus remaining to theBaht NBTC. Another was paid in2012 the second year, andbank the paid 50% to of pay the fee VAT, fee totaling 7,824 million25% on 19 October and submitted According to thewill auction terms and conditions, AWN paid 50% of 2014, the feethe plus VAT,has totaling Baht 7,824 remainder be paid in the third year. As at 31 December Group recognised the million on guarantee to pay the remaining fee to the NBTC. Another 25% was paid in the second year, and the 19 October 2012will and bank guarantee the remaining fee the NBTC. Anotherin25% remaining fee of Baht 3,656 million (excluding as the spectrum license the remainder besubmitted paid in the third year. As to at pay 31 VAT) December 2014, thetoGroup has payable recognised the was paid in consolidated financial statement (2013: Baht million). the second year, fee and theBaht remainder be paid in7,313 the third year.asAsthe at 31 December 2014, the Group has recognised remaining of 3,656 will million (excluding VAT) spectrum license payable in the consolidated financial statement (2013: Baht 7,313 million). the remaining fee of Baht 3,656 million (excluding VAT) as the spectrum license payable in the consolidated financial statements (2013: Baht 7,313 million). 52 52

Financial Report

17 17

(instatements million Baht) (in million Baht) 14,352 14,352 14,352 14,352 14,352 14,352

140

Advanced Info Service Public Company Limited and its Subsidiaries

18 Other Intangible Assets

Notes to the financial statements 18

Other intangible assets

Consolidated Financial Statements Assets statements under Assets installation Software under (in million Baht) licences installation (in million Baht)

Consolidated financial Operation Software right licences Operation right Cost At 1 January 2013 Additions Transfers and reclassify Disposals At 31 December 2013 and 1 January 2014 Additions Transfers and reclassify Disposals At 31 December 2014

6,993 (6,993) -

5,581 680 10 (51) 6,220 713 95 (2,410) 4,618

Amortisation At 1 January 2013 Amortisation charge for the year Disposals At 31 December 2013 and 1 January 2014 Amortisation charge for the year Disposals At 31 December 2014

(6,671) (322) 6,993 -

(3,870) (329) 49 (4,150) (412) (2,410) 2,152

Net book value At 1 January 2013 At 31 December 2013 and 1 January 2014 At 31 December 2014

322 -

1,711 2,070 2,466

118 (10) 108 25 (95) 38

108 38

Total

12,574 798 (7,044) 6,328 738 (2,410) 4,656

(10,541) (651) 7,042 (4,150) (412) (2,410) 2,152

2,033 2,178 2,504

141

Annual Report 2014 Advanced Info Service Public Company Limited Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements

Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements

Deferred taxTax 19 Deferred

201 159 112

Consolidated Separate financial statements financial statements 2014 were 2014 2013 Deferred tax as follows: Deferred tax assets assetsand andliabilities liabilitiesasasatat3131December December were as2013 follows: (in million Baht) 1,509 735Separate Deferred tax assets Consolidated Separate Financial 3,327 Statements Consolidated Financial 3,667 Statements (67) (110) (67) (110) Deferred tax liabilities financial statements financial statements 2014 2013 2014 2013 1,442 3,557 (in million Baht) 668 3,217 Net 2014 2013 2014 2013 (in million Baht) 1,509 3,667 735 3,327 Deferred tax assets (67) (110) (67) (110) Deferred tax liabilities 1,442 3,557 668 3,217 Net

Financial Report

Cost At 1 January 2013 Additions Disposals Cost At 31 December 2013 and 1 January 2014 At 1 January 2013 Additions Additions Disposals Disposals At 31 December 2014 At 31 December 2013 and 1 January 2014 Additions Amortisation Disposals At 1 January 2013 At 31 December 2014 Amortisation charge for the year Disposals Amortisation At 31 December 2013 and 1 January 2014 At 1 January 2013 Amortisation charge for the year Amortisation charge for the year Disposals Disposals At 31 December 2014 At 31 December 2013 and 1 January 2014 Amortisation charge for the year Net book value At 1 January 2013 Disposals At 31 December December 2013 2014 and 1 January 2014 At 31 December 2014 Net book value At 1 January Deferred tax 2013 At 31 December 2013 and 1 January 2014 Deferred tax assets2014 and liabilities as at 31 December were as follows: At 31 December

Separate financialStatements Separate Financial statements Software licences Software Separate (inlicences million Baht) financial (in million Baht) statements Software 2,937 licences5 (in million Baht) (49) 2,893 2,937 1 (2,420)5 (49) 474 2,893 1 (2,420) (2,736) 474 (47) 49 (2,734) (2,736) (47) (47) 2,419 49 (362) (2,734) (47) 201 2,419 (362) 159 112

142 Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements Movements in in total total deferred asas follows: Movements deferredtax taxassets assetsand andliabilities liabilitiesduring duringthe theyear yearwere were follows:

At At 1 1 January January 2013 2013

Deferred tax assets Accounts receivable (doubtful accounts) Inventories (allowance for obsolete and decline in value) Assets under the Agreement for operation (amortisation difference) Unearned income - mobile phone service (income recognised difference) Employee benefit obligations Others Total Deferred tax liabilities Prepaid expense under the Agreement for operations (expense recognised difference) Accelerated tax (amortisation difference) Others Total

129

(4)

125

186

175

(25)

150

(36)

114

4,242

(1,577)

2,665

(2,310)

355

385 250 290 5,471

(65) 27 (160) (1,804)

320 277 130 3,667

74 25 28 (2,158)

394 302 158 1,509

(87) (6) (64) (157)

Net

Consolidated financial statements Consolidated Financial Statements Charged/ Charged/ Charged / Charged / (credited) (credited) AtAt31 AtAt 31 (credited) to (credited) to 31 December 31 December to profit to December December profit or loss profitprofit or loss 2013 2014 (note 34) (note 34) or loss or loss 2013 2014 (note 34) (in million Baht) (note 34) (in million Baht)

5,314

37 6 4 47 (1,757)

(50) (60) (110) 3,557

23 20 43 (2,115)

(27) (40) (67) 1,442

Separate financial statements At 1 January 2013

At 31 December 2014

(67)

(14)

131

(2)

129

(41)

4,032

(1,367)

2,665

(2,310)

355

385 166 146 4,982

(158) (8) (53) (1,655)

227 158 93 3,327

(105) (76) (46) (2,592)

122 82 47 735

4,831

Charged/ (credited) At 31 December to profit or loss 2013 (note 34) (in million Baht)

122

(87) (64) (151)

Net

Charged/ (credited) to profit or loss (note 34)

37 4 41 (1,614)

(50) (60) (110) 3,217

23 20 43 (2,549)

(27) (40) (67) 668

Total

5,471

(1,804)

3,667

(2,158)

1,509

143

Deferred tax liabilities

Annual Prepaid Report 2014 Advanced InfoAgreement Service Public Company Limited expense under the for operations (expense recognised difference) Accelerated tax (amortisation difference) Others Total

(87) (6) (64) (157)

Net

5,314

37 6 4 47

(50) (60) (110)

(1,757)

3,557

23 20 43 (2,115)

(27) (40) (67) 1,442

Separate financial statements

At 1 At January 1 January 2013 2013

122

(67)

(14)

131

(2)

129

(41)

4,032

(1,367)

2,665

(2,310)

355

385 166 146 4,982

(158) (8) (53) (1,655)

227 158 93 3,327

(105) (76) (46) (2,592)

122 82 47 735

(87) (64) (151)

Net

4,831

37 4 41

(50) (60) (110)

(1,614)

3,217

23 20 43 (2,549)

Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements

At 31 At December 31 December 2014 2014

(27) (40) (67) 668

Deferred tax assets arising from significant temporary differences and unused tax losses that have not Deferred tax assets arising from significant temporary differences and unused tax losses that have not been recognisedininthe thefinancial financialstatements statements December 2014 as follows: been recognised as as at at 31 31 December 2014 and and 20132013 werewere as follows:

Consolidated Financial Statements Consolidated Financial Statements SeparateSeparate financial statements financial statements 2014 2013 2014 2013 2014

Tax losses Impairment loss on investment Assets under the Agreements for operations Accrued expense of the Agreements for operations Others Total

375 754 238 63 1,430

2013 (in million Baht) 2014 (in million Baht) 337 1,713 102 664 238 77 754

2,377

2013

1,713 1,713

Deferred tax assets have not been recognised in respect of these items because it is not probable that taxabletax profit will be available which Group utilise thebecause benefitsit therefrom. future Deferred assets have not beenagainst recognised in the respect ofcan these items is not probable that future taxable profit will be available against which the Group can utilise the benefits therefrom.

Interest-bearing liabilities

Note Current Short-term loans from financial institutions Short-term loan from related parties Current portion of long-term borrowings Current portion of long-term

Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) -

4,000

4,400

2,540

2,775

2,540

2,775

Financial Report

Deferred tax liabilities Prepaid expense under the Agreement for operations (expense recognised difference) Others Total

Separate Financial Statements Charged/ Charged/ (credited) (credited) At 31 Charged / Charged / At (credited) (credited) to profitto 31 to profitto December December profit or loss profit or loss 2013 or loss or loss 2013 (note 34) (note 34) (note 34) (in million Baht) (note 34) (in million Baht)

144

Tax losses Impairment loss on investment Assets under the Agreements for operations Accrued expense of the Agreements for operations Others Total

375 754 238 63 1,430

(in million Baht) 337 1,713 102 664

1,713 -

238 77 754

1,713

2,377

Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits therefrom.

20 Interest-bearing Liabilities Interest-bearing liabilities

Consolidated Financial Statements SeparateSeparate Financial Statements Consolidated financial statements financial statements 2014 2013 2014 2013 Note Note 2014 2013 (in million Baht) 2014 2013 (in million Baht)

Current Short-term loans from financial institutions Short-term loan from related parties Current portion of long-term borrowings Current portion of long-term debentures Current portion of finance lease liabilities Non-current Long-term borrowings, net Long-term debentures, net Finance lease liabilities Total

4,000

4,400

2,540

2,775

2,540

2,775

2,500

32 2,572

28 9,303

21 2,561

23 13,698

17,819 16,575 84 34,478

15,279 76 15,355

12,819 50 12,869

15,279 60 15,339

37,050

24,658

15,430

29,037

Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements The periods to maturity of interest-bearing liabilities, excluding finance lease liabilities, as at 31 December The periods to maturity of interest-bearing liabilities, excluding finance lease liabilities, as at 31 were as follows: December were as follows:

2,540 56 22,243 12,151 36,934

(in million Baht) 9,275 2,540 15,279 12,819 24,554 15,359

13,675 15,279 28,954

Fixed interest rate as stipulated in the agreement

LIBOR plus margin

Fixed interest rate as stipulated in the agreement

Total loans Less transaction cost balance at 31 December Net

Advanced Wireless Network Co., Ltd.

USD 85.00

USD 125.00

USD 63.97

USD 70.00

USD 49.75

The Company

(in million)

(per annum)

Interest Rate Interest rate (per annum)

Semi-annual

Term of Term of Interest interest Payment payment

4 equal installments from 2019 to 2021

Entirely redeemed in 2018

4 equal installments in 2016 and 2017

2 equal installments in 2015 and 2016

20 equal installments from 2008 to 2018

Entirely redeemed in 2014

Principal payment term

Principal Payment Term

2,306 2,108 4,118 2,801 2,801 4,000

18,134 (80) 18,054

1,647 4,139 2,815 2,815 4,000

5,000

20,416 (57) 20,359

15,416 (57) 15,359

4,000

2,815

4,139

1,647

(in million Baht)

18,134 (80) 18,054

4,000

2,801

4,118

2,108

2,306

Consolidated Separate Financial Statements Financial Statements Consolidated Separate 2014 2013 financial 2014 statements 2013 financial statements 2014 2013(in million Baht) 2014 2013

Financial Report

Outstanding Loan in Foreign Currency Outstanding loan 2014 2013 in foreign currency 2014 (in million) 2013

As at 31 December, the details of long-term loans are summarised as follows:

As at 31 December, Long-term borrowingsthe details of long-term loans are summarised as follows:

Notes to the financial statements Long-term borrowings

Advanced Info Service Public Company Limited and its Subsidiaries

Annual Report 2014 Advanced Info Service Public Company Limited

/ 145

2,500

Amount (Million (million Baht) Baht)

No. of units (million) (Million)

2.50

Amount

No. of unit

1.78

6.64

11 April 2014

6,638

1,776

7,789

Total debentures Less bond issuing cost balance at 31 December Net

7.79

11 April 2014

Advanced Wireless Network Co., Ltd. 11 April 2014 0.39 397

The Company 23 January 2009

Issue date

Fixed interest rate of 4.94%

Fixed interest rate of 4.56%

Fixed interest rate of 4.17%

Fixed interest rate of 3.39%

4.00% for the first two year, 5.00% for the third and fourth year and 6.00% for the last years

Interest rate (per annum)

Semi-annual

Quarterly

payment

Entirely redeemed on 11 April 2017 Entirely redeemed on 11 April 2019 Entirely redeemed on 11 April 2021 Entirely redeemed on 11 April 2024

Entirely redeemed on 23 January 2014

term

16,600 (25) 16,575

6,638

1,776

7,789

397

2014

2,500 2,500

2,500

2013 2014 (in million Baht)

2,500 2,500

2,500

2013

Term of interest Principal payment Financial Statements Financial Statements payment term Term of Consolidated Separate2013 2014 2013 2014 interest Principal payment financial statements financial statements (in million Baht)

As at 31 December, the Groupâ&#x20AC;&#x2122;s long-term debentures represent unsubordinated and unsecured debentures with a par value of Baht 1,000 each and are detailed Consolidated Separate as follows:

Long-term debentures

Notes to the financial statements As at 31 December, the Groupâ&#x20AC;&#x2122;s long-term debentures represent unsubordinated and unsecured debentures with a par value of Baht 1,000 each and are detailed as follows:

Long-term debentures Advanced Info Service Public Company Limited and its Subsidiaries

146

147

Annual Report 2014 Advanced Info Service Public Company Limited

Advanced Info Service Public Company Limited and its Subsidiaries Notes to the Info financial statements Advanced Public Company Limited and its Subsidiaries Under the terms Service and conditions of the long-term borrowings and debentures, the Company has to comply with Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements certain restrictions and maintain certain financial ratios.

Notes to the financial statements

Financial Report

Under the terms and conditions of the long-term borrowings and debentures, the Company has to with certain restrictions and and maintain certain financial Ascomply at 31 December 2014, the Group the Company have noratios. undrawn committed loans. (2013: no undrawn Under the terms and conditions of the long-term borrowings and debentures, the Company has to committed Underloans). the terms andrestrictions conditionsand of maintain the long-term borrowings and debentures, the Company has to comply certain financial ratios. As at 31with December 2014, the Group and the certain Company have no undrawn committed loans. (2013: no comply with certain restrictions and maintain certain financial ratios. undrawn committed loans). Ascarrying at 31 December the Group the Company have no (gross undrawn no The amounts2014, and fair values and of long-term debentures of committed issue costs)loans. as at(2013: 31 December are As at 31 December 2014, the Group and the Company have no undrawn committed loans. (2013: no undrawn committed loans). The carrying amounts and fair values of long-term debentures (gross of issue costs) as at 31 December as follows: undrawn committed loans). are as follows: The carrying amounts and fair values of long-term debentures (gross of issue costs) as at 31 December Theascarrying (gross of Financial issue costs) as at 31 December are follows:amounts and fair values of long-term debentures Consolidated Consolidated financialStatements statements are as follows: Carrying amount Fair Carrying amount Fairvalues* values* Consolidated financial statements 2014 Consolidated 2013 financial2014 2013 statements 2014 2013 2014 2013 Carrying amount Fair values* (in million Baht) Carrying amount 2014 2013 (in million Baht) 2014Fair values*2013 2014 2013 2014 2013 (in million Baht) Long-term debentures 16,600 2,500 17,734 2,505 (in million Baht) Long-term debentures 16,600 2,500 17,734 2,505 financial statements Long-term debentures 16,600 Separate 2,500 17,734 2,505 Carrying amount Fair values* Separate Financial Statements Separate financial statements 2014 2013 2014 2013 Carrying amount financial statements Fair CarryingSeparate amount Fairvalues* values* (in million Baht) Carrying amount 2014 2013 2014Fair values*2013 2014 2013 2014 2013 2014 2013 2014 2013 (in million Baht) (in million Baht) Long-term debentures 2,500 2,505 (in million Baht) Long-term debentures 2,500 2,505 *Long-term Fair values for traded debentures have been determined based2,500 on quoted selling prices from2,505 The debentures Thai Bond Market Association at the close of the business on the reporting date. * Fair values for traded debentures have been determined based on quoted selling prices from The FairBond values for traded debentures have determined on quoted selling prices from The Thai Bond Market Association ** Fair values for traded debentures have been determined on quoted selling prices from The at Thai Market Association at been the of thebased onbased the reporting date. Movement during the years 31 close December ofbusiness interest-bearing liabilities was as follows: theBond close of the business on theended reporting date. Thai Market Association at the close of the business on the reporting date. Movement during the years ended 31 December of interest-bearing Consolidated liabilities was as follows: Separate Movement during the years ended 31 December of interest-bearing liabilities waswas as follows: Movement during the years ended 31 December of interest-bearing as follows: financial statements liabilitiesfinancial statements Consolidated Separate 2014 2013 2014 2013 Consolidated Separate financial statements financial statements Consolidated Financial Statements Separate Financial Statements (in million Baht) financial statements financial statements 2014 2013 2014 2013 2014 2013 2014 2013 At 1 January 24,658 20,350 29,037 20,333 2014 2013 2014 2013 (in(inmillion Baht) million Baht)17,224 Additions 24,658 18,353 23,843 (in million Baht) At 1 January 24,658 20,350 29,037 20,333 Borrowing cost (29) (56) (56) At 1 January 24,658 20,350 29,037 20,333 Additions 24,658 18,353 17,224 23,843 Repayments (12,406) (15,015) (30,996) (16,110) Additions cost 24,658 18,353 17,22423,843 Borrowing (29) (56) (56) Terminate (10) (7) (10) (6) Borrowingcost cost (29) (56) (56) Repayments (12,406) (15,015) (30,996) (16,110) Unrealised loss on foreign exchange 152 1,015 152 1,015 Repayments (12,406) (15,015) (30,996) (16,110) Terminate cost (10) (7) (10) (6) Amortisation 27 18 23 18 Terminate cost (10) (7) (10) (6) Unrealised loss on foreign exchange 152 1,015 152 1,015 At 31 December 37,050 24,658 15,430 29,037 Unrealised loss on foreign exchange 152 1,015 152 1,015 Amortisation 27 18 23 18 Amortisation 27 18 23 18 At 31 December 37,050 24,658 15,430 29,037 The effective weighted interest rates as at 31 December At 31 December 37,050were as follows: 24,658 15,430 29,037 The effective weighted interest rates as at 31 December were as follows: Consolidated Separate The effective weighted interest rates as at 31 December were as follows: financial statements financial statements Consolidated Separate 2014 2013 2014 Separate 2013 Consolidated financial statements financial statements (% per annum) financial statements financial statements 2014 2013 2014 2013 Long-term borrowings 3.50 3.34 3.23 3.34 2014 2013 2014 2013 (% per annum) Long-term debentures 4.50 4.75 4.75 (% per annum) 3.23 Long-term borrowings 3.50 3.34 3.34 Finance lease liabilities 4.86 5.05 4.87 5.06 borrowings 3.50 3.34 3.233.34 Long-term debentures 4.50 4.75 4.75 Long-term debentures 4.50 4.75 4.75 Finance lease liabilities 4.86 5.05 4.875.06 Finance lease liabilities 4.86 5.05 4.87 5.06

2014 1 January 148 At Additions

24,658 24,658 (29) (12,406) (10) 152 27 37,050

Borrowing cost Repayments Terminate cost Unrealised loss on foreign exchange Amortisation At 31 December

2013 2014 (in million Baht) 20,350 29,037 18,353 17,224 (56) (15,015) (30,996) (7) (10) 1,015 152 18 23 24,658 15,430

2013 20,333 23,843 (56) (16,110) (6) 1,015 18 29,037

The effective effective weighted weighted interest December were as as follows: The interestrates ratesasasatat3131 December were follows: Consolidated Separate Consolidated Financial Statements Separate Financial Statements financial statements financial statements 2014 2013 2014 2013 2014 2013 (% per annum) 2014 2013

(% per annum) Long-term borrowings 3.50 3.34 3.23 Advanced Info Service Public Company Limited and 4.75 its Subsidiaries Long-term debentures 4.50 NotesFinance to the financial statements lease liabilities 4.86 5.05 4.87 Advanced Info Service Public Company Limited and its Subsidiaries

3.34 4.75 5.06

Notes to the financial statements Advanced Info Service Public Company Limited and its Subsidiaries 21 Trade accounts payable Notes to the financial statements Consolidated 21 Trade accounts payable Consolidated Financial Statements SeparateSeparate Financial Statements financial statements financial statements 2014 2013 2014 2013 21 Trade accounts payable Note Consolidated Separate Note 2014 2013 2014 2013 (in million Baht) 60

21 Trade Accounts Payable

financial statements financial statements (in million Baht) Consolidated Separate2013501 2014 2013 63 2014907 51 financial statements financial (in million Baht) 11,852 11,655 379 statements 1,120 Note 2014 2013 2014 2013 5 51 63 907 501 11,903 11,718 1,286 1,621 (in million Baht) 379 11,852 11,655 1,120 5 51 63 907 501 11,903 11,718 1,286 1,621 22 11,852 11,655 379 1,120 11,903 1,286 22 Consolidated11,718 Separate 1,621 financial statements financial statements 22 Other payables Consolidated Note Consolidated 2014 2013 2014 Separate 2013 Financial Statements Separate Financial Statements financial statements financial statements (in million Baht) 2014 2013 2014 2013 Note Consolidated Separate2013 Note 2014 2013 Accrued expenses 5 9,997 7,759 2,063 3,413 (in million Baht)2014 financial financial (in349 million Baht) Value added tax payable 244 statements 136 statements 326 Note 2014 2013 2014 2013 Accrued expenses 5 9,997 7,759 2,063 3,413 Withholding tax payable 330 316 38 100 (in million Baht) 136 Value 244 349 326 Othersadded tax payable 5 618 1,112 587 1,086 Accrued expenses 5 9,997 7,759 2,063 3,413 Withholding tax payable 330 316 38 100 Total 11,189 9,536 2,824 4,925 Value added tax payable 244 349 136 326 Others 5 618 1,112 587 1,086 Withholding tax payable 330 316 38 100 11,189 9,536 2,824 4,925 23 Total Employee benefit obligations Others 5 618 1,112 587 1,086 TotalGroup benefit The and the obligations Company had an employee 11,189 benefit obligation9,536 based on the 2,824 requirement of4,925 Thai 23 Employee Labour Protection Act B.E. 2541 (1998) to provide retirement benefits to employees based on 23 The Employee benefit obligations pensionable remuneration and length service and long obligation - term service awards. Group and the Company had anofemployee benefit based on the requirement of Thai Labour Protection Act B.E. 2541 (1998) to provide to the employees basedofon The Group and the Company had an employee benefitretirement obligation benefits based on requirement Thai Labour Group remuneration andofthe Company had obligation anofemployee benefit based on the requirement of Thai The statement financial position determined follows: pensionable and length servicewas and long -obligation termasservice awards. Protection ActProtection B.E. 2541 (1998) to provide retirement benefitsretirement to employees basedto onemployees pensionablebased remuneration and Labour Act B.E. 2541 (1998) to provide benefits on length of service and long term service awards. pensionable and length of service and long Consolidated - termasservice awards. Separate The statementremuneration of financial position obligation was determined follows: financial statements financial statements Thestatement statement of asasfollows: Consolidated 2014 2013 2014Separate2013 The of financial financial position position obligation obligationwas wasdetermined determined follows: financial statements financial statements (in million Baht) Consolidated Separate 2014 2013 2014 Present value of obligations 1,500 1,361 406 768 Consolidated Financial Statements Separate Financial 2013 Statements financial statements financial statements million Baht) 2014 (in 2013 2014 2013 2014 2013 Present value 1,361 406 768 Movement in of theobligations present value of the employee benefit1,500 obligations 2013 (in million Baht)2014 (in million Baht) Present value of obligations 1,361 406 Consolidated Separate 768 Movement in the present value of the employee benefit1,500 obligations financial statements financial statements Movement in the present value of the employee benefit2014 obligations Consolidated 2013 2014Separate2013 financial statements financial statements (in million Baht) Consolidated Separate2013 2014 2013 2014 Employee benefit obligations at 1 January 1,361 1,223 768 810 financial financial (in (16) million Baht) (29) statements (25) statements (15) Benefits paid 2014 2013 2014 2013 Employee benefit obligations at 1 January 1,361 1,223 768 810 168 154 43 83 Current service costs and interest (in million Baht) (29) (16) (25) (15) Benefits paid (380) (110) Transfer out Employee benefit obligations atat1 31 January 1,361 1,223 768 810 168 154 43 83 Current service costs and interest Employee benefit obligations December 1,500 1,361 406 768 (29) (16) (25) (15) Benefits out paid (380) (110) Transfer 168 154 43 83 Current service costs and interest Employee benefit obligations at 31 December 1,500 1,361 406 768 (380) (110) Transfer out Related parties Other parties Related Total parties Other parties Relatedpayables parties Total Other Other parties Total payables Other

Note 5

22 Other Payables

23 Employee Benefit Obligations

Labour Protection Act B.E. 2541 (1998) to provide retirement benefits to employees based on pensionable remuneration and length of service and long - term service awards.

of financial position obligation Annual The Reportstatement 2014 Advanced Info Service Public Company was Limiteddetermined as follows:

Present value of obligations

149

Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) 1,500 1,361 406 768

Movement in the present value of the employee benefit obligations Movement in the present value of the employee benefit obligations Consolidated Consolidated Financial Statements SeparateSeparate Financial Statements financial statements financial statements 2014 2013 2014 2013 2014 2013 2013 (in million Baht)2014 (in million Baht) Employee benefit obligations at 1 January 1,361 1,223 768 810 (29) (16) (25) (15) Benefits paid 168 154 43 83 Current service costs and interest Advanced Info Service Public Company Limited -and its Subsidiaries (380) (110) Transfer out Advanced Info Service Public Company Limited and its Subsidiaries NotesEmployee to the financial benefit statements obligations at 31 December 1,500 1,361 406 768 Notes to the financial statements Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements Expense recognised recognised in Expense in profit profit or orloss loss Expense recognised in profit or loss Expense recognised in profit or loss

Consolidated Consolidated Financial Statements SeparateSeparate Financial Statements Consolidated Separate financial statements statements 2014 2013 financial 2014 2013

100% of the 2008 Thailand Mortality rates (“TMO08”).

Financial Report

financial statements financial statements 2014 2013 2014Separate 2013 Consolidated (in million Baht) 2014 2013 2014 2013 (in million Baht) financial statements financial statements (in million Baht) Current service costs 115 107 28 56 2014 2013 2014 2013 Current service costs 115 107 28 56 Interest on obligation 53 47 15 27 (in million Baht) 61 Interest on obligation 53 47 15 27 Total 168 154 43 83 Current service costs 115 107 28 56 Total 168 154 43 83 Interest on obligation 53 47 15 27 The in the statement TotalGroup/Company recognised the expense in the following 168 line items154 43of income:83 The Group/Company Group/Company recognised following line items in the statement of income: The recognisedthe theexpense expenseininthe the following line items in the statement of income: Consolidated Separate The Group/Company recognised the expense in the following line items in the statement of income: Consolidated Separate financial statements financial statements Consolidated Financial Statements Separate Financial Statements financial statements financial statements 2014 2013 2014 2013 Consolidated2013 2014 Separate 2014 2013 2014 statements 2013 2014 statements 2013 (in Baht) financial financial (inmillion million Baht) (in million Baht) Cost of rendering of services and 2014 2013 2014 2013 Cost of rendering equipment rentalof services and 8 10 (in million Baht) equipment rental 8 10 Administrative expenses 105 95 26 54 Cost of rendering of services and Administrative expenses 105 95 26 54 Management benefit expenses 2 2 2 2 equipment rental 8 10 Management expenses 2 2 2 Finance costs benefit 532 47 15 27 Administrative expenses 105 95 26 54 Finance costs benefit expenses 532 472 15 27 Total 168 154 432 832 Management Total 168 154 43 83 Finance costs 53 47 15 27 Actuarial losses recognised in other comprehensive income: Total 168 154 43 83 Actuarial losses recognised in other comprehensive income: Consolidated Separate Actuarial losses losses recognised recognised in Actuarial in other othercomprehensive comprehensiveincome: income: Consolidated Separate financial statements financial statements financial statements financial statements 2014 2013 2014Separate 2013 Consolidated Consolidated Financial Statements Separate Financial Statements 2014 2013 2014 2013 (in million Baht) financial statements financial statements 2014 2013 2014 2013 (in million Baht) Included in retained earnings : 2014 2013 2014 2013 (in million Baht) Included in retained earnings : At 1 January 723 723 417 417 (in million Baht) At 131January 723 723 417 417 At December 723 723 417 417 Included in retained earnings : At 31 December 723 723 417 417 At 1 January 723 723 417 417 Principal actuarial assumptions at the reporting date (expressed as weighted averages): At 31 December 723 723 417 417 Principal actuarial assumptions at the reporting date (expressed as weighted averages): Consolidated Principal actuarial assumptions at the reporting date (expressed as weighted averages): Separate Consolidated Separate financial statements financial statements financial statements financial statements 2014 2013 2014Separate 2013 Consolidated 2014 2013 2014 2013 financial statements (%) financial statements (%) Discount rate 3.9 3.9 3.9 3.9 2014 2013 2014 2013 Discount rate increases 3.9 3.9 3.9 3.9 Future salary 8 8 (%) 8 8 Future salary increases 8 8 8 8 Discount rate 3.9 3.9 3.9 3.9 Assumptions regarding future mortality are based on published statistics and mortality tables set Future salary increases 8 8 8 8 as Assumptions regarding future mortality based on published statistics and mortality tables set as 100% of the 2008 Thailand Mortality ratesare(“TMO08”). 100% of the 2008 Thailand Mortality ratesare (“TMO08”). Assumptions regarding future mortality based on published statistics and mortality tables set as

Actuariallosses lossesrecognised recognisedininother othercomprehensive comprehensiveincome: income: Actuarial

150

Consolidated Separate Consolidated Separate financialstatements statements financialstatements statements financial financial 2014 2013 2014 2013 2014 2013 2014 2013 (inmillion millionBaht) Baht) (in

Includedininretained retainedearnings earnings: : Included At11January January At At31 31December December At

723 723 723 723

417 417 417 417

Principal actuarial assumptions thereporting reporting date (expressed weightedaverages): averages): Principal actuarial assumptions atatthe date (expressed weighted averages): Principal actuarial assumptions at the reporting date (expressed asasas weighted Consolidated Separate Consolidated Separate Consolidated Financial Statements Separate Financial Statements financial statements financial statements financial statements financial statements 2014 2013 2014 2013 2014 2014

Discountrate rate Discount Futuresalary salaryincreases increases Future

3.9 3.9 88

2013 (%) 2014 2014 2013 (%) (%) 3.9 3.9 3.9 3.9 88 88

2013 2013 3.9 3.9 88

Assumptionsregarding regardingfuture futuremortality mortalityare arebased basedon onpublished publishedstatistics statisticsand andmortality mortalitytables tablesset setasas Assumptions

Assumptions regarding future mortality are basedLimited on published statistics and mortality tables set as 100% of the Advanced Service Public Company and its Subsidiaries 100%ofofInfo the2008 2008 Thailand Mortality rates (“TMO08”). 100% the Thailand Mortality rates (“TMO08”). 2008 to Thailand Mortalitystatements rates (“TMO08”). Notes the financial

24 Share Sharecapital Capital

2013 Per value 2014 Number 2014 Baht Number 2013 Number Baht Number (million share / million Baht)

Authorised At 1 January - ordinary shares At 31 December - ordinary shares Issued and paid-up At 1 January - ordinary shares At 31 December - ordinary shares

Par pervalue share per(inshare Baht) (in Baht) 1

(million share / million Baht)

Baht

4,997

4,997 62 62 4,997

4,997

2,973

As at 31 December 2014 and 2013, the total issued number of ordinary shares is 2,973 million shares As at 31 December 2014 and 2013, the total issued number of ordinary shares is 2,973 million shares with a par with a par value of Baht 1 per share. All issued shares are fully paid. value of Baht 1 per share. All issued shares are fully paid.

The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are The holders of ordinary aremeetings entitled of to the receive dividends as declared from time to time, and are entitled to entitled to one vote pershares share at Company. one vote per share at meetings of the Company. Share premium

Share premium Section 51 of the Public Companies Act B.E. 2535 requires companies to set aside share subscription monies received in excess of the par value of the shares issued to a reserve account (“share premium”). Section 51 of theisPublic Companies Act B.E.distribution. 2535 requires companies to set aside share subscription monies Share premium not available for dividend received in excess of the par value of the shares issued to a reserve account (“share premium”). Share premium is 25not available Legal reserve for dividend distribution.

Section 116 of the Public Companies Act B.E. 2535 requires that a public company shall allocate not less than 5% of its annual net profit, less any accumulated losses brought forward, to a reserve account (“legal reserve”), until this account reaches an amount not less than 10% of the registered authorised capital. The legal reserve is not available for dividend distribution.

Annual Report 2014 Advanced Info Service Public Company Limited

151

25 Legal Reserve

26 Other Components of Equity Share-based payment The performance share plan Grant I

Approved date Number of warrants offered Exercise price Number of reserved shares Term of the Project Offered price per unit Exercise ratio

: : : : : : :

27 March 2013 405,800 Units 206.672 Baht/share 405,800 Shares 5 years from the date of initial offer of the warrants Baht 0 (zero Baht) 1 unit of warrant per 1 ordinary share

Grant II In March 2014, the Annual General Meeting of shareholders No.1/2014 approved to issue warrants to purchase the ordinary shares of the Company. The warrants are offered to employees of the Company and its subsidiaries, including the board of directors of the Company, who are qualified to the Performance share plan (“Project”). The major information is listed below: Approved date : Number of warrants offered : Exercise price : Number of reserved shares : Term of the Project : Offered price per unit : Exercise ratio : Offer period :

26 March 2014 680,000 Units 211.816 Baht/share 680,000 Shares 5 years from the date of initial offer of the warrants Baht 0 (zero Baht) 1 unit of warrant per 1 ordinary share Within one year from the date on which the issuance and offer of the warrant under the program is approved by the 2014 annual general meeting of shareholders

Financial Report

In March 2013, the Annual General Meeting of shareholders No.1/2013 approved to issue warrants to purchase the ordinary shares of the Company. The warrants are offered to employees of the Company and its subsidiaries, including the board of directors of the Company, who are qualified to the Performance share plan (“Project”). The major information is listed below:

152 Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements

Movements in the the number numberof ofoutstanding outstandingwarrants warrants follows: Movements in areare as as follows:

At January2014 At 11 January 2014 ESOP – Grant I - Directors - Employees ESOP – Grant II - Directors - Employees Total

Transaction During Period Transaction during thethe period

Issued

Exercised

(in units) Exercised (in units)

Forfeited

At December2014 At31 31 December 2014

19,824 352,476 372,300

372,300

29,816 611,768 641,584 641,584

29,816 611,768 641,584 1,013,884

Fair value measurement Fair value measurement

The Group measured the expense of the Project by reference to the fair value of the equity instrument Thegranted Groupatmeasured of the Project bySimulation reference to the fair value of theassumptions equity instrument the grantthe dateexpense using the Monte Carlo technique. The major are as granted at thebelow: grant date using the Monte Carlo Simulation technique. The major assumptions are as below: Grant I Grant I

Weighted average fair value the grant Weighted average fair value at theatgrant datedate Share price at the grant date Share price at the grant date Exercise price Exercise price volatility Expected Expected volatility Expected dividend Risk-free interest rate Expected dividend Risk-free interest rate Grant II

183.499 Baht/share 183.499 Baht/share 262.000 Baht/share 262.000 Baht/share 206.672 Baht/share 206.672 Baht/share 23.51% 23.51% 4.16% 4.16%3.07% 3.07%

GrantWeighted II average fair value at the grant date 101.617 Baht/share Share price at the grant date 240.000 Baht/share Weighted average fair value at the grant date 101.617 Baht/share Exercise price 211.816 Baht/share Share price at the grant date 240.000 Baht/share Expected volatility 25.15% Exercise price dividend 211.816 Baht/share Expected 5.00% Expected volatility 25.15% Risk-free interest rate 3.08% Expected dividend 5.00% Forinterest the yearrate ended 31 December 2014, the Group/Company Risk-free 3.08% recognised share-based payment expense at Baht 19 million and Baht 19 million, respectively, on the consolidated and separate financial statements (2013: Baht 7 million and Baht 7 million, respectively). For the year ended 31 December 2014, the Group/Company recognised share-based payment expense at Baht 19 million and Baht 19 million, respectively, on the consolidated and separate financial statements (2013: Baht 7 Accounting Policy million and Baht 7 million, respectively). The Group measured the expense of the Project by reference to the fair value of the equity instrument granted at the grant date.

The expense of the Project is charged to the profit or loss from operation corresponding to the increase in “Reserve for share-based payment” in shareholders’ equity over the periods in which the service conditions are fulfilled. 65

Annual Report 2014 Advanced Info Service Public Company Limited

153

Accounting Policy The Group measured the expense of the Project by reference to the fair value of the equity instrument granted at the grant date. The expense of the Project is charged to the profit or loss from operation corresponding to the increase in “Reserve for share-based payment” in shareholders’ equity over the periods in which the service conditions are fulfilled.

Unrealised gain on dilution of investment The unrealised gain on dilution of investment comprises the cumulative net change in portion of investment until the investment is sold or otherwise disposed of.

Fair value changes in available-for-sale investments The fair value changes in available-for-sale investments account within equity comprises the cumulative net change in the fair value of available-for-sale investments until the investments are derecognised or impaired.

The Group/Company has three reportable segments, as described below, which are the Group/Company’s strategic divisions. The strategic divisions offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the strategic divisions, the chief operating decision maker (CODM) reviews internal management reports on at least a quarterly basis. The following summary describes the operations in each of the Group/Company’s reportable segments. • Segment 1 • Segment 2 • Segment 3

Mobile phone and call center services Mobile phone sales Datanet and broadband services

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before tax, as included in the internal management reports that are reviewed by the Group’s/Company’s CODM. Segment profit before tax is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.

Financial Report

27 Segment Information

47,670

Segment profit (loss) before income tax

2013

2014

2013 (in million Baht)2014 (in million Baht)

2013

2014

2013

11,154 102,597 31,565 63,854

45,593

515 (1,001) (16,427)

130,700

1,588 7,095 3 3,155

(1,545)

19 (3) (7)

23,414

346 7,162 2 1,871

734

24 (8)

19,114

274 3,127 944 451

(42)

8 (1) (199)

854

257 2,267 852 408

(89)

9 (1) (106)

764

14,906 126,351 32,433 79,486

46,083

370 (1,527) (18,922)

149,329

11,757 112,026 32,419 66,133

46,238

548 (1,002) (16,541)

150,578

The Group/Company is managed and operates principally in Thailand. There are no material revenues derived from, or assets located in, foreign countries.

The Group/Company is managed and operates principally in Thailand. There are no material revenues derived from, or assets located in, foreign countries. Geographical segments

Geographical segments

13,044 116,129 31,486 75,880

343 (1,523) (18,716)

Investment income Finance cost Depreciation and amortisation

Material items of expense Segment assets Capital expenditure Segment liabilities

125,061

External revenue

2014

Mobile Phone and Mobile Phone Sales Datanet and Broadband Services Total Reportable Segments Call Center Services Mobile phone and Datanet and broadband call center services 2014 Mobile phone sales services Total reportable segments 2014 2013 2013 2014 2013 2014 2013

Information about reportable segments:

Notes to the financial statements Information about reportable segments:

Advanced Info Service Public Company Limited and its Subsidiaries

154

Annual Report 2014 Advanced Info Service Public Company Limited

155

Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements

Advanced Info Service Public Company Limited and its Subsidiaries

Notes to the financial statements 28 Revenue of the Company under the NBTC’s regulation 28 Revenue of the Company under the NBTC’s regulation Revenue from rendering of services and equipment of the Company for the year31ended Revenue from rendering of services and equipment rentalsrentals of the Company for the year ended December 2014 ified as follows: 31 December 2014 and 2013 was class 28 Revenue of the Company under the NBTC’s regulation and 2013 was classified as follows: Revenue from rendering of services and equipment rentals of the Company for the year ended 31 December 2014 and 2013 was classified as follows: Separate Revenue from rendering of services and equipment rentals of the Company forFinancial the year ended Separate Statements financial statements 31 December 2014 and 2013 was classified as follows: Separate 2014 2013

28 Revenue of the Company Under the NBTC’s Regulation

29 29

Internet License Type 1 Other service income Internet License Type 1 Total Other service income Internet Total License Type 1 Investment Other service income income Total Investment income

Investment income

29 Investment Income

Other operating income

Note Note

5,13 Note 5,13 5,13 5 55 5 5 5

Total Other operating income

370 548 24,132 9,544 Consolidated Separate financial statements financial statements 30 Other operating income Consolidated Separate Note 2014 2013 2014 2013 financial statements financial statements (in million Baht) Consolidated Separate Note Consolidated 2014 Financial 2013 2014 Financial Statements 2013 Statements Separate Bad debt recovery 110 statements 70 statements 96 financial financial (in99million Baht) 2014 2013 2014 2013 Management income 5 163 155 Note Note 2014 2013 2014 2013 Bad debt recovery 110 99million Baht) 70 96 (in Others 55 220224million 377 (in Baht)625 Management income 163 155 Total 330 323 858 628 Bad debt recovery 110 99 70 96 Others 5 220 224 625 377 Management income 5 163 155 Total 330 323 858 628 Others 5 220 224 625 377 31 Provident Fund 330 323 858 628 31 Total Provident Fund The defined contribution plans comprise provident funds established by the Group/Company for its employees. the funds is onprovident a voluntary basis. Contributions made monthly by 31 Provident Fund The definedMembership contributiontoplans comprise funds established by theareGroup/Company forthe its employees at rates ranging from 3% to 7% of their basic salaries and by the Group/Company at employees. Membership to the funds is on a voluntary basis. Contributions are made monthly byrates the ranging from 3% 7% ofplans the employees’ basic salaries. The provident are registered with the The defined comprise provident funds salaries established byfunds the Group/Company Group/Company its employees atcontribution ratestoranging from 3% to 7% of their basic and by the atforrates Ministry of Finance as juristic entities and are managed by a licensed Fund Manager. employees. Membership to the thecomprise funds is provident on abasic voluntary are made monthlywith by its the ranging from 3% to 7%plans of employees’ salaries. TheContributions provident funds are registered theemployees. The defined contribution fundsbasis. established by the Group/Company for employees atFinance rates ranging from 3% toand 7%are of managed their basic and by the Group/Company at rates Ministrytoofthe juristic entities bysalaries aare licensed Manager. Membership funds as is on a voluntary basis. Contributions made Fund monthly by the employees at rates ranging ranging from 3% to 7% of the employees’ basic salaries. The provident funds are registered with the from 3% to 7% of their basic salaries and by the Group/Company at rates ranging from Ministry of Finance as juristic entities and are managed by a licensed Fund Manager.3% to 7% of the employees’ basic salaries. The provident funds are registered with the Ministry of Finance as juristic entities and are managed by a licensed Fund Manager.

30 Other Operating Income

31 Provident Fund

Financial Report

30 30

Dividend income Subsidiaries Dividend income Other Subsidiaries Dividend income Other Interest income Subsidiaries Related Other Interestparties income Associate Related parties Financial institutions Interest income Associate Related parties Financial institutions Associate Total Financial institutions Total

Note

2014(in million Baht)2013 financial statements (in million Baht) Separate 2014 2013 1 financial statements (in million Baht) 1 62,029 106,023 2014 1 2013 1 62,030 106,024 (in million Baht) 62,029 106,023 1 1 62,030 106,024 62,029 106,023 62,030 106,024 Consolidated Separate financial statements financial statements Consolidated Separate Consolidated Financial2013 Statements Separate Financial Statements 2014 2014 2013 financial statements financial statements 2014 2013 2014 2013 (in million Baht) Consolidated 2014 2013 (in million Baht)2014 Separate 2013 financial statements financial statements (in million Baht) 22,848 8,216 2014 2013 2014 2013 105 (in million Baht) 22,848 8,21610 22,853 8,216 10 5 -22,848 8,216 1022,853 8,216 1,220 1,102105 2 1022,853 8,216 1,220 1,1023582 54859226360 548 1,279 1,328 1,220 1,102 35854859 226 2 360 5481,2791,328370 24,132 9,544 358 548 59 226 360 548 1,279 1,328 370 548 24,132 9,544

156 Advanced Info Service Public Company Limited and its Subsidiaries Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements Notes to the financial statements 32 32

Expenses by by nature 32 Expenses Nature Expenses by nature

The statements The statementsofofincome incomeinclude includeanananalysis analysisofofexpenses expensesby byfunction. function.Significant Significantexpenses expensesbybynature naturedisclosed The statements of requirements income include an analysis of expenses by function. Significant expenses by nature disclosed in accordance with theof requirements ofwere various TFRS were as follows: in accordance with the various TFRS as follows: disclosed in accordance with the requirements of various TFRS were as follows: Consolidated Consolidated Financial Statements SeparateSeparate Financial Statements Consolidated Separate financial statements financial statements 2014 2013 2014 2013 financial statements financial statements Note Note 2014 2013(in million Baht) 2014 2013 Note 2014 2013 2014 2013 (in million Baht) (in million Baht) Depreciation of plant and Depreciation equipment of plant and 14 6,225 3,037 496 607 equipment of assets under 14 6,225 3,037 496 607 Amortisation Amortisation of assets under Agreements for operations 15 11,309 11,877 11,308 11,064 Agreementsoffor operations 15 11,309 11,877 11,308 11,064 Amortisation intangible assets 17,18 1,388 1,627 47 47 Amortisation of intangible assets 17,18 1,388 1,627 47 47 Doubtful accounts and bad debts 9 1,240 787 37 360 Doubtful accounts and bad debts 9 1,240 787 37 360 Marketing expenses 6,220 4,331 648 1,819 Marketing 6,220 4,331 648 1,819 Staff cost expenses 7,446 6,639 1,596 3,401 Staff cost 7,446 6,639 1,596 3,401

33 33

Finance costs

Finance costs 33 Finance Costs

Subsidaries Subsidaries Related parties Related Financialparties institutions Advanced Info Service Public Financial institutions Total NotesTotal to the financial statements

Consolidated

Note Note Note 5 55 5

Separate

Consolidated Separate Consolidated Financial Statements Separate Financial Statements financial statements financial statements financial statements statements 2014 2013 financial 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 (in millionBaht) Baht) (in million

Company

11 1,526 Limited 1,526 1,527 1,527

and

(in million Baht)168 -1 1681 1,001 734its Subsidiaries 1,001 734 1,002 902 1,002 902

42 42 1 1 974 974 1,017 1,017

Income tax expense 34 Income Tax Expense

Income taxrecognised recognisedin in profit profit or Income tax or loss loss Consolidated Consolidated Financial Statements SeparateSeparate Financial Statements financial statements statements 2014 2013 financial 2014 2013 Note Note 2014 2013(in million Baht)2014 2013 (in million Baht)

Current tax expense Current year Adjustment for prior years Deferred tax expense Movements in temporary differences

7,950 15 7,965

8,244 7 8,251

1,499 4 1,503

5,735 (3) 5,732

2,115

1,757

2,549

1,615

10,080

10,008

4,052

7,347

Total income tax expense Reconciliation of effective tax rate

Profit before income tax expense Income tax using the Thai corporation tax rate Income not subject to tax Expenses not deductible for tax purposes Adjustment for prior year

Consolidated financial statements 2014 2013 Rate (in million Rate (in million (%) Baht) (%) Baht) 46,083 46,238 69 69

9,217 (2) 155 15

9,248 173 7

Note

/ Current year

Note

financial statements financial statements Consolidated Separate 2014 2013 2014 2013 financial statements financial statements (in million Baht) 2014 2013 2014 2013

tax expense AnnualCurrent Report 2014 Advanced Info Service Public Company Limited Current tax expense Adjustment Current yearfor prior years Adjustment for prior years Deferred tax expense Movements in temporary Deferred tax expense differencesin temporary Movements

19 19

differences Total income tax expense Reconciliation of effective tax rate Total income tax expense Reconciliation of effective tax rate Reconciliation of effective tax rate

7,950 15 7,950 7,965 15

(in million Baht) 8,244 1,499 7 8,244 1,4994 8,251 1,503 7 4 8,251

1,503

5,735 (3) 5,735 5,732 (3)

2,115

1,757

2,549

1,615

7,965

2,115 10,080

1,757 10,008

10,080

10,008

Total

2,549 4,052

1,615 7,347

4,052

7,347

(in Baht) (inmillion million 2014 (%) Rate (inBaht) million 46,083 (%) Baht) 46,083 20 9,217 (2) 20 9,217 155 (2) 15 155 (11) 15

(11) 42 664 42 10,080 664

Rate Rate(%)

(%) Rate (%)

(in million Baht) 2013(in million (inBaht) million 46,238 Baht) 46,238 9,248 9,2481731737 12 7

12 282 286 282 10,008 286

10,080 22 10,008 Separate financial statements 2014 2013 Separate statements Separatefinancial Financial Statements Rate 2014 (in million Rate 2013(in million 2014 2013 Baht) (%)(%) Baht) (%)(%) Rate (in Baht) Rate (in Baht) Rate (inmillion million Rate (inmillion million 38,918 43,995 (%) Baht) (%) Baht) 20

38,918 7,784 (4,571) 7,784 171 (4,571) 1714 664 4 6644,0524,052

43,995 8,799 (1,643) 8,799 151 (1,643) (3) 151 (3) 437,347 43 7,347

Income tax reduction Royal Decree No. 530 B.E. 2554 dated 21 December 2011 grants a reduction in the corporate income tax rate for the three accounting periods 2012, 2013 and 2014; 70 from 30% to 23% for the accounting period 2012 which begins on or after 1 January 2012 and to 20% for the following two accounting periods 2013 and 2014 which begin on or 70 after 1 January 2013 and 2014, respectively. Royal Decree No. 577 B.E. 2557 dated 10 November 2014 extends the reduction to 20% for the accounting period 2015 which begins on or after 1 January 2015. The Group/Company has applied the reduced tax rate of 20% in measuring deferred tax assets and liabilities as at 31 December 2014 and 2013 in accordance with the clarification issued by the FAP in 2012.

Financial Report

Profit before income tax expense Incomebefore tax using the tax Thaiexpense corporation Profit income tax rate Income tax using the Thai corporation Income tax ratenot subject to tax Expenses deductible Income notnot subject to taxfor tax purposes Adjustment for prior yearfor tax purposes Expenses not deductible Written-off deferred tax Adjustment for prior yearasset Impairment deferred loss fromtax investment in a subsidiary Written-off asset Total Impairment loss from investment in a subsidiary

5,732

Consolidatedfinancial Financial Statements Consolidated statements 2014 2013 2014 2013 Consolidated financial statements Rate (%) Rate

Profit before income tax expense Incomebefore tax using the tax Thaiexpense corporation Profit income tax rate Income tax using the Thai corporation Income tax ratenot subject to tax Expenses deductible Income notnot subject to taxfor tax purposes Adjustment for prior yearfor tax purposes Expenses not deductible Effect from elimination with subsidiaries Adjustment for prior year Current year losses for which no deferred tax Effect from elimination with subsidiaries asset was recognised Current year losses for which no deferred tax Written-off deferred tax asset asset was recognised Total Written-off deferred tax asset

157

158

Income tax reduction Royal Decree No. 530 B.E. 2554 dated 21 December 2011 grants a reduction in the corporate income tax rateDecree for theNo. three 2013 and from 30% to 23% the accounting Royal 530accounting B.E. 2554 periods dated 212012, December 20112014; grants a reduction in thefor corporate income period which on or periods after 1 January 2012and and2014; to 20% the to following tax rate2012 for the threebegins accounting 2012, 2013 fromfor30% 23% fortwo the accounting periods 2013 which and 2014 which on1orJanuary after 1 2012 January and for 2014, Royal Decree period 2012 begins on begin or after and2013 to 20% therespectively. following two accounting No. 5772013 B.E. and 25572014 dated 10 November 2014 extends the reduction 20%respectively. for the accounting period periods which begin on or after 1 January 2013 and to 2014, Royal Decree 2015 which begins or after 1 January 2015. No. 577 B.E. 2557on dated 10 November 2014 extends the reduction to 20% for the accounting period 2015 which begins on or after 1 January 2015. The Group/Company has applied the reduced tax rate of 20% in measuring deferred tax assets and liabilities as at 31 December 2014 the and reduced 2013 in accordance with the clarification issued by FAPand in The Group/Company has applied tax rate of 20% in measuring deferred tax the assets 2012. liabilities as at 31 December 2014 and 2013 in accordance with the clarification issued by the FAP in 2012.

35 Earnings per Share

35 Earnings per share 35 share BasicEarnings earnings per per share

Basic earnings per share Basic earnings per share The basic earnings perper share thetheyears ended Thecalculation calculationofof basic earnings shareforfor years ended3131December December2014 2014and and2013 2013were werebased on the profit for ordinary shareholders of the Company the2014 weighted average number of based onthe the years profit for the earnings yearstoattributable tofor ordinary shareholders theand Company and weighted The calculation ofattributable basic per share the years ended 31ofDecember andthe2013 were average of ordinary shares outstanding during the years as follows: based onnumber the profit for the years attributable to ordinary shareholders of the Company and the weighted ordinary shares outstanding during the years as follows: average number of ordinary shares outstanding during the years as follows: Consolidated Consolidated Financial Statements SeparateSeparate Financial Statements financial statements financial statements Consolidated Separate 2014 2013 2014 2013 2014 2013 2014 2013 financial statements financial (in million Baht / million shares) statements (in million shares) 2014 2013Baht / million 2014 2013 Profit attributable to ordinary (in million Baht / million shares) shareholders of the Profit attributable to Company ordinary (basic) 36,033 36,274 34,866 36,648 shareholders of the Company (basic) average number of 36,033 36,274 34,866 36,648 Weighted ordinary average shares outstanding 2,973 2,973 2,973 2,973 Weighted number of (basic) ordinary shares outstanding (basic) 2,973 2,973 2,973 2,973 Earnings per share (basic) (in Baht) 12.12 12.20 11.73 12.33

Earnings per share (basic) (in Baht) 12.12 12.20 11.73 12.33 Diluted earnings per share Diluted earnings per per share Diluted earnings share The calculation of diluted earnings per share for the years ended 31 December 2014 and 2013 were based on the of profit for earnings theearnings yearsper attributable to equity holders of the Company and the weighted The calculation of diluted per shareforfor years ended31 31December December 2014 and 2013 werebased on The calculation diluted share thethe years ended 2014 and 2013 were average number of ordinary sharesattributable outstandingtoduring theholders years after adjusting forand the the effects of all based on the profit for the years equity of the Company weighted the profit for the years attributable to equity holders of the Company and the weighted average number of ordinary dilutive ordinary shares as follows: average potential number of ordinary shares outstanding during the years after adjusting for the effects of all sharesdilutive outstanding during the years adjusting for the effects of all dilutive potential ordinary shares as follows: potential ordinary sharesafter as follows:

Profit attributable to equity holders of the Company (basic) Profit attributable to equity holders of the Company (basic) Profit attributable to equity holders of theattributable Company (diluted) Profit to equity holders of the Company (diluted) Weighted average number of

ordinary shares Weighted averageoutstanding number of (basic) Effect of share-based payment(basic) ordinary shares outstanding Effect of share-based payment Weighted average number of ordinary average shares outstanding Weighted number of (diluted) ordinaryper shares outstanding (diluted) Earnings share (diluted) (in Baht) Earnings per share (diluted) (in Baht)

36 Dividends

Consolidated Separate financial statements financial statements Consolidated Consolidated Financial Statements Separate Separate Financial Statements 2014 2013 2014 2013 financial statements financial statements 2014 2013 2014 2013 (in million shares) 2014 2013 (in2013 millionBaht Baht // million million2014 shares) (in million Baht / million shares) 36,033 36,274 34,866 36,648 36,033 36,274 34,866 36,648 36,033 36,274 34,866 36,648 36,033 36,274 34,866 36,648 2,973 2,9732,973 2,973 12.12

12.12 71 71

2,973 2,9732,973 2,973 12.20

12.20

2,973 2,9732,973 2,973 11.73 11.73

2,973 2,9732,973 2,973 12.33 12.33

At the annual general meeting and the board of directors meeting of the company, resolutions were passed to approve the dividend and interim dividend payment to the shareholders as follows:

159

Annual Report 2014Service AdvancedPublic Info ServiceCompany Public CompanyLimited Limited and its Subsidiaries Advanced Info Notes to the Info financial statements Advanced Service Public Company Limited and its Subsidiaries Notes to the financial statements 36

Dividends

At the annual general meeting and the board of directors meeting of the company, resolutions were passed to approve the dividend and interim dividend payment to the shareholders as follows: At the annual meeting Year ended 31 general December 2013and the board of directors meeting of the company, resolutions were passed to approve the dividend and interim dividend payment to the shareholders as follows: Year ended 31 December 2013 Dividend Total Dividend TotalDividend dividend Ratio ratio The31 Resolution of: 2013 Date of Meeting Year ended December (Baht/share) (in million Baht) The resolution of: Date of meeting (Baht / shares) (in million Baht) Dividend ratio Total dividend (Baht/share) (in million Baht) The resolution of: Date of meeting The general shareholders 27 March 2013 5.00 14,863 The board of directors 7 August 2013 6.40 19,026 The general shareholders 27 March 2013 5.00 14,863 33,889 The board of directors 7 August 2013 6.40 19,026 33,889

Year 2014 Yearended ended 31 31 December December 2014

Year ended 31 December 2014 The resolution of:

The Resolution of:

The resolution of: The general shareholders Thegeneral board of directors The shareholders The board of directors

Date of Meeting

Date of meeting 26 March 2014 4 August 26 March 2014 2014 4 August 2014

Financial instruments

Dividend ratio Dividend (Baht/share) Dividend Ratio ratio (Baht/share) (Baht / shares) 5.75 6.04 5.75 6.04

Total dividend Total (in million Baht) TotalDividend dividend (in million (in millionBaht) Baht) 17,095 17,957 17,095 35,052 17,957 35,052

Financial instruments

risk management policies 37Financial Financial Instruments

Financial risk management policies Risk management is integral policies to the whole business of the Group/Company. The Group/Company has a Financial risk management system of controls in place to create an acceptable balance between the cost of risks occurring and the Risk management is integral to the whole business of the Group/Company. The Group/Company has a cost of managing the risks. The management continually monitors the Group’s/Company’s risk of controls inis place to create acceptable balance between the cost ofThe risks occurring and the system Risk management integral theanan whole business of thebetween Group/Company. Group/Company has a system of management process to ensureto that appropriate balance risk and control is achieved. cost of managing the risks. The management continually monitors the Group’s/Company’s risk controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the management process to ensure that an appropriate balance between risk and control is achieved. Capital risks. Themanagement management continually monitors the Group’s/Company’s risk management process to ensure that an appropriate balance between risk and control is achieved. Capital management  The Group/Company aim to manage its capital structure to be stronger than industry peer and commit to be investment grade rating. This will allow the Group/Company to retain superior  The Group/Company aim to manage its capital structure to be stronger than industry peer and Capital management financial flexibility in order to capture future growth prospect. The Group’s/Company’s financial commit to be investment grade rating. This will allow the Group/Company to retain superior flexibility means diversified source of capital, ease of funding, and appropriate cost of capital. flexibilityaim in order to capture future growth prospect. The Group’s/Company’s financial • Thefinancial Group/Company to manage its capital structure to be stronger than industry peer and commit to be flexibility means diversified source of capital, ease of funding, and appropriate cost of capital.  investment grade rating. This will allow the Group/Company to retain superior financial flexibility In an intermediate term, the Group/Company view that telecommunications industry in Thailand in order to capture futureanother growthphase prospect. The Group’s/Company’s financial flexibility means will face of technology change and hence new investment will bediversified required.source The of capital,  In an intermediate term, the Group/Company view that telecommunications industry in Thailand easestatement of funding, and appropriate of Group/Company capital. of financial positioncost of the is flexible to prepare the Group/Company will face another phase of technology change and hence new investment will be required. The for such investment and the Group/Company aim to leverage on its gearing through debt statement of financial position of the Group/Company is flexible to prepare the Group/Company • In an intermediate term, the Group/Company view that telecommunications industry in Thailand will face another instrument. for such investment and the Group/Company aim to leverage on its gearing through debt phase of technology change and hence new investment will be required. The statement of financial position of instrument. rate risk Interest the Group/Company is flexible to prepare the Group/Company for such investment and the Group/Company aim rate risk Interest to leverage on its gearing through debt instrument. Interest rate risk is the risk that future movements in market interest rates will affect the results of the Group’s/Company’s operations and its cash flows because some of debt securities and loan interest Interestrate rate risk risk is the risk that future movements in market interest rates will affect the results of the Interest rates are floating interest rate. The Group/Company is primarily exposed to interest rate risk from its Group’s/Company’s operations and its cash flows because some of debt securities and loan interest borrowings (Note 20). The Group/Company mitigates this risk by ensuring that the majority of its debt rates are interest The Group/Company ismarket primarily exposed interest fromofitsthe Group’s/ Interest ratefloating risk isborrowings the risk rate. that movements ratestowill affectrate therisk results securities and arefuture at fixed interest in rates and interest uses derivative financial instruments, borrowings (Note 20). The Group/Company mitigates this risk by ensuring that the majority of its debt principally interest rate swaps, to managebecause exposuresome to fluctuations in interest rates specificrates debt Company’s and its cash of debt securities loanoninterest securities operations and borrowings are at flows fixed interest rates and uses derivativeand financial instruments, are floating securities and borrowings. interest rate. The Group/Company exposed to rate risk from its rates borrowings (Notedebt 20). The Group/ principally interest rate swaps, tois primarily manage exposure to interest fluctuations in interest on specific Company mitigates this risk by ensuring that the majority of its debt securities and borrowings are at fixed interest securities and borrowings. rates and uses derivative financial instruments, principally interest rate swaps, to manage exposure to fluctuations in 72 interest rates on specific debt securities and borrowings. 72

Financial Report

Date of meeting

160 Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements Foreign currency risk Foreign currency risk The Group/Company is exposed exposedtoto foreign currency risk relating to expense and borrowings The Group/Company is foreign currency risk relating to expense and borrowings which are which are denominated in foreign currencies. The Group/Company primarily utilises forward exchange contracts with maturities denominated in foreign currencies. The Group/Company primarily utilises forward exchange contracts than onefinancial year toliabilities hedge such financial liabilities in swap foreign of lesswith thanmaturities one year of to less hedge such denominated in foreign denominated currencies and and forward currencies and swap and forward contracts to hedge long-term borrowings denominated in foreign contracts to hedge long-term borrowings denominated in foreign currencies. The forward exchange contracts entered currencies. The forward exchange contracts entered into at the reporting date also relate to borrowings, into at the reporting date also relate to borrowings, denominated in foreign currencies, for the subsequent period. denominated in foreign currencies, for the subsequent period. AtAt 31 31 December, thethe Group andand thethe Company were exposed to foreign currency riskrisk in respect of financial assets December, Group Company were exposed to foreign currency in respect of financialdenominated assets and liabilities denominated in the following currencies: and liabilities in the following currencies:

Consolidated Consolidated Financial Statements SeparateSeparate Financial Statements financial statements statements 2014 2013 financial 2014 2013 2014 2013(in million Baht)2014 2013 (in million Baht)

Assets United States Dollars Singapore Dollars Euro Dollars Liabilities United States Dollars Japan Yen Singapore Dollars Euro Dollars Australian Dollars Pound sterling Gross statement of financial position exposure Currency swaps Currency forwards Net exposure

397 38 39 474

833 2 835

160 49 15 224

371 1 372

(16,639) (11) (4) (16,654)

(18,280) (102) (39) (17) (3) (121) (18,562)

(11,594) (3) (1) (11,598)

(14,311) (14) (17) (5) (3) (4) (14,354)

10,499 484 (5,197)

12,780 865 (4,082)

10,499 209 (666)

12,780 865 (337)

Annual Report 2014 Advanced Info Service Public Company Limited

161

Advanced Advanced Info Service Info Service Public Public Company Company Limited Limited and itsand Subsidiaries its Subsidiaries Notes toNotes the financial to the financial statements statements

Advanced Info Service Infoswap Service Public Public Limited Limited and its and Subsidiaries itsfollows: Subsidiaries As Advanced at 31 December and Company forward Company receivables (payables), net as at 31financial December As December swap and swap forward andreceivables forward receivables (payables), (payables), net as follows: net as follows: Notes As to Notes the to at the31financial statements statements

Consolidated Financial Statements Separate Financial Statements Advanced Advanced Info Service Info Service Public Company Public Company Limited Limited and its and Subsidiaries its Subsidiaries Consolidated Consolidated Separate Separate

financial financial statements statements financialfinancial statements statements 2014 2013 2014 2013 As at 31 December As at 31 December swap and swap forward andreceivables forward receivables (payables), (payables), net2013 as follows: net as follows: 2014 2014 2013 2014 2014 2013 2013 (in million Baht) (in million (inBaht) million Baht) Consolidated Consolidated Separate Separate Swap contracts: Swap contracts: As at 31 December As at 31 December swap and swap forward andreceivables forward financial receivables (payables), (payables), net as follows: net as follows: financial statements statements financial statements statements Swap contracts Swap contracts receivablereceivable 11,221 11,22113,333 13,33311,221 financial 11,22113,333 13,333 2014 (10,499) 2014 (12,780) 2013 (12,780) 2013 (10,499) 2014 (10,499) 2014 (12,780) 2013 (12,780) 2013 Swap contracts Swap contracts payable**payable** (10,499) Consolidated Consolidated Separate Separate million(in Baht) million Total swap Total contracts swap contracts receivable/(payable) receivable/(payable) 722 financial 722 (in553 553 722Baht) 722 553 553 financial statements statements financial financial statements statements Swap contracts: Swap contracts: 2014 2014 2013 2013 2014 2014 2013 2013 Forward Forward contracts: contracts: Swap contracts Swap receivable contracts receivable 11,221 11,22113,333 13,33311,221 11,22113,333 13,333 (in801 million (in Baht) million Forward contracts Forward contracts receivable receivable 471 (10,499) 471 801 197Baht) 197 801 (12,780) 801 Swap contracts Swap payable** contracts payable** (10,499) (12,780) (12,780) (10,499) (10,499) (12,780) Swap contracts: Swap contracts: Forward contracts Forward contracts payable** payable** (484) (865) (209) (865) Total swap Total contracts swap contracts receivable/(payable) receivable/(payable) (484) 722 722 (865) 553 553 (209) 722 722 (865) 553 553 Swap Swap receivable contractscontracts receivable 11,221 13,333 11,221 13,333 Total contracts forward Totalcontracts forward payable payable (13) 11,221 (13) (64) 13,333 (64) (12) 11,221 (12) (64) 13,333 (64) Forward contracts: Forward contracts: Swap contracts Swap payable** contracts payable** (10,499) (10,499) (12,780) (12,780) (10,499) (10,499) (12,780) (12,780) Totalswap swap Total andswap swap forward andcontracts: forward contracts: Forward contracts Forward receivable contracts receivable 471 471 553 801 801 722 197 197 553 801 801 Total Total contracts contracts receivable/(payable) receivable/(payable) 722 722 553 722 553 Swap and Swap forward and contracts forwardpayable** contracts receivablereceivable 11,692 14,134 14,134 Forward contracts Forward payable** contracts (484) 11,692 (484) (865) 14,134 (865)11,418 (209) 11,418 (209) (865) 14,134 (865) Forward Forward contracts: Swapforward andcontracts: Swap forward andcontracts forward contracts payable** payable** (10,983) (13,645) (10,708) (13,645) Total Total contracts forward payable contracts payable (13) (10,983) (13) (64) (13,645) (64) (12) (10,708) (12) (64) (13,645) (64) Forward contracts Forward receivable contracts receivable 471 471 801 801 197 197 801 801 Total swap Total andswap forward and contracts forward contracts Total swap Total and swap forward andcontracts: forward contracts: Forward contracts Forward payable** contracts payable** (484) (484) (865) (209) (865) receivable/(payable) receivable/(payable) 709 709 (865) 489 489 (209) 710 710 (865) 489 489 Swap forward and Total Swap forward andcontracts forward receivable contracts receivable 11,692 14,134 11,418 14,134 Total contracts forward payable contracts payable (13) 11,692 (13) (64) 14,134 (64) (12) 11,418 (12) (64) 14,134 (64) Swap and Swap forward andcontracts forward payable** contracts payable** (10,983) (10,983) (13,645) (13,645) (10,708) (10,708) (13,645) (13,645) Total swap Total and forward and contracts: forward Current assets Current (liabilities) assets (liabilities) Total swap Total andswap swap forward and contracts forwardcontracts: contracts Swap and Swap forward and contracts forward receivable contracts receivable 11,692 14,134 14,134 Other current Other assets current assets 141 11,692 141 - 710 141 11,418 141 receivable/(payable) receivable/(payable) 709 709 489- 14,134 48911,418 710 489- 14,134 489Swap Swap forward and contracts forward payable** contracts payable** (10,983) (13,645) (10,708)- (10,708) (13,645) Otherand current Other liabilities current liabilities (1) (10,983) (1) (164) (13,645) (164) - (164) (13,645) (164) Total Total andassets swap forward andassets contracts forward contracts Totalswap current Total current (liabilities) (liabilities) 140 140 (164) (164) 141 141 (164) (164) Current assets Current (liabilities) assets (liabilities) receivable/(payable) receivable/(payable) 709 709 489 489 710 710 489 489 Non-current Non-current assets (liabilities) assets (liabilities) Other assets current assetscontracts 141 141 141 Swapcurrent andOther Swap forward andcontracts forward receivablereceivable 569 569 741 741- 141 569 569 741 741Other current Other liabilities current liabilities (1)(1) (164) (164) --- (164) (164) Swap and Swap forward and contracts forward contracts payable payable (88) (88) (88) (88) Current assets Current (liabilities) assets (liabilities) Total current Total assets current (liabilities) assets (liabilities) 140 140 (164) (164) 141 141 (164) (164) Total non-current Total non-current assets (liabilities) assets (liabilities) 569 569 653 653 569 569 653 653 Other current Other assets current assets (liabilities) 141 141 - 141 141 Non-current Non-current assets (liabilities) assets Totalcurrent Total 709 709 489 489 710 710 489 489 Other Other liabilities current liabilities (1) (1) (164) (164) (164) Swap and Swap forward and contracts forward receivable contracts receivable 569 569 741 741 569569- (164) 741 741 Total current Total assets current (liabilities) assets (liabilities) 140140- (164) (164) 141- (164) (164) Swap and Swap forward and contracts forward payable contracts payable (88) (88) 141(88) (88) The nominal Theassets amounts nominal and amounts fair values and fair of values swap and of swap forward andcontracts forward contracts as at 31 December as at 31 December are as follows: are as follows: Non-current Non-current (liabilities) assets (liabilities) Total non-current Total non-current assets (liabilities) assets (liabilities) 569 569 653 653 569 569 653 653 Swap and Swap forward andcontracts forward receivable contracts receivable 569 569 741 741 569 569 741 Total Total 709 Consolidated 489 489as 710 710 741 489 are as 489 The nominal amounts and fair values of swap709 and forward contracts at-31 December follows: statements statements Swap and Swap forward andcontracts forward payable contracts payable - Consolidated - (88)financial (88)financial - (88) (88) Nominal amounts** amounts** Fair values* Fair 653 values* 653 Total non-current Total non-current assets (liabilities) assets 569 andNominal 569 653 569 The nominal Theamounts nominal and amounts fair values and(liabilities) fair of values swap and of2014 swap forward contracts forward contracts as at 2013 31653 December as at569 31 December are as follows: are as follows: 2014 Financial Statements Total Total 709 2014 7092013 489Consolidated 4892014 710 7102013 489 2013 489 (in million (inBaht) million Baht) Fair values* NominalConsolidated amounts** Consolidated financial financial statements statements Swap contracts Swap contracts 10,499 10,499 12,780 12,780 10,945 13,153 13,153 The nominal The amounts nominal and amounts fair values and fair of values swap and ofNominal swap forward and contracts forward contracts as at 2013 31 December as10,945 at Fair 31 December are asFair follows: are as follows: 2014 2014 2013 Nominal values* Forward contracts Forward contracts 484 amounts** 484 amounts** 865 865 477 477 values* 817 817 (in2014 million Baht) 2014 2014 2013 2014 2013 2013 Total Total 10,983 Consolidated 10,9832013 13,645 13,645 11,422 11,422 13,970 13,970 Consolidated financial financial statements statements (in million(inBaht) million Baht) Nominal amounts** Nominal amounts** Fair values* Fair values* Swap contracts Swap contracts 10,499 10,499 12,780 12,780 10,945 10,945 13,153 13,153 Separate Separate financialfinancial statements statements 2014 Forward contracts Forward contracts 484 2014 4842013 865 2013 8652014 477 2014 4772013 817 2013 817 Nominal Nominal amounts** amounts** Fair values* Fair values* (in million (inBaht) million Total Total 10,983 10,98313,645 13,645 11,422 Baht) 11,42213,970 13,970 2014 2014 12,780 2013 2013 10,945 2014 10,945 2014 13,153 2013 13,153 2013 Swap contracts Swap contracts 10,499 10,499 12,780 million (in Baht) million Baht)477 817 Forward contracts Forward contracts 484 Separate 484 (in 865 865 477 817 Separate financial financial statements Swap contracts Swap contracts 10,499 10,983 10,49913,645 12,780 12,780 10,945 statements 10,945 13,153 13,970 13,153 Total Total 10,983 13,645 11,422 11,422 13,970 Nominal Nominal Fair values* Fair values* Forward contracts Forward contracts 209 amounts** 209 amounts** 865 Separate 865Financial 200 200 817 817 Statements 2014 2013 2013 2014 2014 2013 2013 Total Total 10,708 2014 10,708 13,645 13,645 11,145 11,145 13,970 13,970 Fair values* Nominal(in amounts** Separate Separate financial financial statements statements million(inBaht) million Baht) Nominal amounts** Nominal amounts** Fair values* Fair values* 2014 2013 2014 2013 Swap contracts Swap contracts 10,499 10,499 12,780 12,780 10,945 10,945 13,153 13,153 *The fair*The valuefair of swap value and of swap forward and contracts forward contracts is the adjusted is the value adjusted of the value original of thecontracts original contracts which thewhich the 2014 2014 2014 (in million Forward contracts Forward contracts 209 2014 2092013 865 2013 865 200 Baht) 2002013 817 2013 817 CompanyCompany entered with entered the with commercial the commercial banks with banks the with market theprice market on price the reporting on theBaht) reporting date in order date to in order to (in million (in Baht) million Total Total 10,708 10,70813,645 13,645 11,145 11,14513,970 13,970 reflectcontracts theSwap reflect current thevalue current of the value contracts. of the contracts. Swap contracts 10,499 10,49912,780 12,780 10,945 10,94513,153 13,153 Forward contracts Forward contracts 209 209 865 865 200 200 817 which 817the *The *The valuefair of swap valueand of swap forward andswap contracts forward contracts is the adjusted is the the value adjusted of value original of the the contracts original contracts which **Thefair nominal **The amount nominal of amount swap and of forward and contracts forward contracts is value is the of the the value original of contracts original contracts which the thewhich the Total Total 10,708 10,708 13,645 13,645 11,145 11,145 13,970 13,970 Company Company entered with entered the commercial with the commercial banks with banks the market with the price market on the price reporting on the reporting date in order date to in order to CompanyCompany entered with entered the commercial with the commercial banks andbanks mustand be repaid must be at repaid the maturity at the date. maturity date. reflect thereflect current thevalue current of the value contracts. of the contracts. *The fair *The valuefair of swap valueand of swap forward andcontracts forward contracts is the adjusted is the value adjusted of the value original of thecontracts original contracts which thewhich the Company entered with entered the commercial with and the commercial banks with banks thecontracts market with the price market on the price reporting on the reporting date the in order datethe to inwhich order towith the **The **The nominal ofamount swap ofcontracts swap forward and forward is the value is the of the value original of the contracts original contracts which the * The nominal fairCompany value amount of swap and forward iscontracts the adjusted value of the original contracts which Company entered 74 74 reflect the reflect current the value current of the value contracts. of the contracts. Company Company entered with entered thethe commercial with theprice commercial banks and banks must and be repaid must be at the repaid maturity at the maturity date.of the contracts. commercial banks with market on the reporting date in order to reflect thedate. current value

Notes to Notes the financial to the financial statements statements

Financial Report

** The nominal amount of swap and forward contracts is the value of the original contracts which the Company entered with the

**The nominal **The amount nominalofamount swap and of swap forward andcontracts forward contracts is the value is the of the value original of thecontracts original contracts which thewhich the commercial banks andthe must be repaid at the maturity date. Company Company entered with entered commercial with the commercial banks and must and be must be at the repaid maturity at the date. maturity date. 74banks 74repaid

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Credit risk Credit risk is the potential financial loss resulting from the failure of a customer or a counterparty to settle its financial and contractual obligations to the Group/Company as and when they fall due. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. At the reporting date there were no significant concentrations of credit risk. Liquidity surplus Excess liquidity (defined as any excess cash after working capital and capital expenditures) after investment in new growth areas and any debt/regulatory obligations/restructuring will be returned to shareholders. Determination of fair values A number of the Group’s/Company’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. The fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

The Group/Company uses the following methods and assumptions in estimating the fair value of financial instruments:

• • • •

The fair value of accounts receivable and accounts payable - trade and others is taken to approximate the carrying value. The fair values of investments in equity and debt securities, which are held-to-maturity, are taken to approximate the carrying value. The fair value of loans to and loans from related is taken to approximate the carrying value because most of these financial instruments bear interest at market rates. The fair value of long-term borrowings is taken to approximate the carrying value because most of these financial instruments bear interest at market rate.

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Annual Report 2014 Advanced Info Service Public Company Limited

Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements

38 Commitments with Non-Related Parties

Commitments with non-related parties

Capital commitments Contracted but not provided for Capital commitments Intangible assets under the Agreement for Contracted operationsbut not provided for Intangible Thai Bahtassets under the Agreement for operations United States Dollars Thai BahtYen Japanese United States Dollars Japaneseand Yenequipment Property

Thai Baht Service Unitedmaintenance States Dollarsagreements Thai Baht Japanese Yen United States Dollars Japanese Yen

Separate

69 3 693 -

18,765 314 18,765 97 31497 -

453 8 453 33 8 33

15,166 268 15,166 411 268 1 411 1

69 3 693 30 30--

453 8 453 33 8 33 117 117--

1,651 1,043 607 372 16 19 6 11 1,651 1,043 607 372 12 11 10 11 16 19 6 11 12 11 10 11 Consolidated Separate Consolidated Separate financial statements financial statements Financial Statements Financial Statements Consolidated Separate 2014 2013 2014 2013 2014 2013 financial 2014 2013 financial statements statements (in million Baht) 2014 2013 (in million Baht) 2014 2013 (in million Baht)

Non-cancellable operating lease Commitments Non-cancellable operating lease Within one year 1,722 1,321 292 414 Commitments After one year but within five years 2,073 1,511 262 415 Within one year 1,722 1,321 292 414 After five years 2 2 After one year but within five years 2,073 1,511 262 415 Total 3,795 2,834 554 831 After five years 2 2 Total 3,795 2,834 554 831 Other commitments Forward and swap contracts 10,983 13,645 10,708 13,645 Other commitments Bank guarantees: Forward and swap contracts 10,983 13,645 10,708 13,645 - The Agreements for operation 1,460 1,460 1,460 1,460 Bank guarantees: - Spectrum license payable 3,912 7,824 - The Agreements for operation 1,460 1,460 1,460 1,460 - Others 1,029 945 313 418 - Spectrum license payable 3,912 7,824 Total 17,384 23,874 12,481 15,523 - Others 1,029 945 313 418 Total 17,384 23,874 12,481 15,523 The Group has entered into lease and related service agreements for office space, cars, computers and base station for periods ranging from 1 year to 15 years with options to renew. The Group has entered into lease and related service agreements for office space, cars, computers and station forhas periods ranging yearrelated to 15 years withagreements options to renew. base The Group entered intofrom lease1 and service for office space, cars, computers and base station for periods ranging from 1 year to 15 years with options to renew.

76 76

Financial Report

Thai Baht Property and equipment United States Dollars Thai Baht Japanese Yen United States Dollars Euro Japanese Yen Euro maintenance agreements Service

Consolidated

Consolidated Separate Financial Statements Financial Statements financial statements financial statements 2014 2013 2014 2013 Consolidated 2014 2013 (in million)2014 Separate2013 financial statements(in million)financial statements 2014 2013 2014 2013 (in million)

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39 Contingent Liabilities

Pursuant to the letter dated 18 January 2013, the Revenue Department has challenged the Company and Digital Phone Company Limited (“DPC”), a subsidiary, to pay surcharge of Baht 128 million and Baht 6 million, respectively, regarding the withholding tax on revenue sharing payment after excise tax deduction by giving the opinion that the excise tax is a part of revenue sharing. Therefore, the Company and DPC will be liable to pay the shortage of withholding tax amount of excise Tax which came from the revenue sharing payment without excise tax deduction. The Company and DPC have submitted the appeal to the Commission of Appeal. At present, the said cases are pending on the consideration process of the Commission of Appeal.

40 Significant Events, Commercial Disputes and Litigation The Company 1) The opinion of the Council of State relating to the amendments or supplements to the Agreement for Operation Pursuant to the letter of the Ministry of Information and Communication Technology to the Council of State requesting opinion on whether the amendments or supplements to the agreement between TOT Public Company Limited who is the Telephone Organization of Thailand at that time (“TOT”) and Advanced Info Service Public Company Limited after the enforcement of the Act on Private Participation in State Undertaking, B.E. 2535 are legitimately effected and in case those amendments or supplements to the Agreement are not legitimately effected according to such Act, what guidelines TOT should implement. The Council of State was of the opinion by its Memorandum of the Council of State no. 291/2550 on Enforcement of the Act on Private Participation in State Undertaking, B.E. 2535 (in the case of the Agreement Permitting Undertaking of Cellular Mobile Telephone Services, “the Agreement” between TOT Public Company Limited and Advanced Info Service Public Company Limited) that *

“...

since TOT being the contracting party in this case acted on behalf of the State by virtue of the authority and duty pursuant to Telephone Organization of Thailand Act, the executed Agreement thus represents the agreement between the State and the private sector in order to authorise the private sector to provide public services to the public on behalf of the State. The State therefore is obligated to perform according to those stipulated in that Agreement. However, since the amendments to the Agreement upon which the consultation is being sought were not legitimately carried out according to the Act on Private Participation in State Undertaking, B.E. 2535 which was in force at the time of effecting those amendments because those amendments had not been proposed for the consideration of the Coordination committee according to Section 22 and not forwarded to the Cabinet, being the organ charged with the authority to approve of the amendments to the Agreement pursuant to the Act as aforesaid, the amendments made to the Agreement with TOT as the contracting party were therefore carried out without legal authority.

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However, the procedures to amend the Agreement represent administrative juristic acts which are capable of being separated from the amendments to the Agreement already effected and those amendments to the Agreement are still in force so long as they are not rescinded or extinguished by statute of limitation or by other causes. In case the Cabinet, vested with the authority under the law and having considered the causes for the rescission, the impact, and the propriety on the basis of the State’s and the public interest, is of the opinion that the illegitimate procedures have resulted in damage that warrants rescinding the amendments to the Agreement already effected, the Cabinet may legitimately rescind such amendments to the Agreement. However, if the Cabinet, upon having considered the same, deems it justified, with regard to the State’s or the public interest and the continuity of providing public services, the Cabinet may exercise its discretion to grant approval for the procedures to further amend the Agreement, as appropriate, with the unit owning the project and the Coordination committee pursuant to Section 22 being the parties to submit the facts, justifications, and opinion for the consideration of the Cabinet.” *

The above clauses in “...” represent some parts of the Memorandum of the Council of State no. 291/2550. The full text Memorandum of the Council of State is available only in Thai language.

In addition, the Coordinating Committee according to Clause 22 has already submitted the opinion regarding the amendments of the Agreement of the Company to the Minister of the Information and Communications Technology.

On 22 January 2008, TOT Public Company Limited (“TOT”) submitted a dispute no. black 9/2551 to the Arbitration Institute, Dispute Reconciliation Office, Justice Court Office demanding the Company to pay additional payment of revenue sharing under the Cellular Mobile Phone Contract in the amount of Baht 31,463 million under the Cellular Mobile Phone Contract plus interest at the rate of 1.25 percent per month computing from the default date on 10 January 2007 until the full payment is made. This amount is the same as an excise tax that the Company had delivered to Excise Department during 28 January 2003 to 26 February 2007 and deducted it from revenue sharing according to the resolution of the Cabinet dated 11 February 2003. Thus, the Company has fully complied with the Cabinet’s resolution dated 11 February 2003 and this practice is the same as other operators in mobile phone or cellular radio telecommunication industries according to the resolution of the Cabinet. Moreover, TOT had sent letter no. Tor Sor Tor. Bor Yor./843 dated 10 March 2003 stating that the Company has fully complied with the Cabinet’s resolution and the Company’s burden remains at the same percentage rate as specified in the contract and the submission of the said excise tax return shall not affect the terms of the contract. On 20 May 2011, the Arbitral Tribunal has dismissed the case by giving the reason which can be summarised that the Company was not in breach of the Agreement since the Company has completely made the payment of the revenue sharing and all debt was therefore paid in full. Therefore, TOT has no right to re-claim for the alleged deficit amount. On 22 September 2011, TOT has submitted the case no. Black 1918/2554 to the Central Administrative Court to revoke the Arbitral Tribunal’s award. Presently, the said case is pending on the Central Administrative Court process.

Financial Report

2) The deduction of excise tax from the revenue sharing between the Company and TOT Public Company Limited (“TOT”)

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3) Interconnection agreement in accordance with the announcement of National Telecommunication Commission (“NTC”) According to Telecommunication Business Operation Act B.E. 2544 and the announcement of National Telecommunication Commission (“NTC”) regarding the Use and Interconnect of Telecommunication Network B.E. 2549, the Company has entered into an interconnection (“IC”) agreement with other operators approved by NTC and the effective period of the agreement is listed below:

1) 2) 3) 4) 5) 6) 7)

Operators Total Access Communication PCL. Truemove Company Limited Digital Phone Company Limited CAT Telecom Public Company Limited Advanced Wireless Network Company Limited dtac TriNet Company Limited Real Future Co., Ltd

Effective period 30 November 2006 onwards 16 January 2007 onwards 1 June 2009 onwards 7 April 2010 onwards 1 April 2013 onwards 1 July 2013 onwards 1 July 2013 onwards

On 31 August 2007, TOT Public Company Limited (“TOT”) has filed a lawsuit against NTC to the Central Administrative Court to revoke the said announcement. On 15 September 2010, the Central Administrative Court has dismissed the case which TOT filed to revoke the announcement of NTC regarding the Use and Interconnect of Telecommunication Network B.E. 2549. TOT has appealed such dismissal to the Supreme Administrative Court. On 4 February 2008 TOT sent a letter to the Company informing that the Company should wait for the final judgment of the Court. Should the Company undertake the IC agreements per the NTC announcement before the final judgment of the Court, TOT shall not recognise the Company’s related actions and the Company must be responsible for such actions. Having considered the said TOT’s letter, related laws and the legal counsel’s opinion, the Company’s management is of the opinion that non-compliance by the Company with the IC agreements shall be deemed violating the said NTC announcement. Therefore, the Company has decided to comply with the IC agreements in line with the current legal provisions. According to the Agreement to operate cellular mobile telephone service, the Company has to pay the higher of stipulated annual minimum payment or the percentage of service revenues prior to deducting expenses and taxes. However, the Company had to comply with the regulation while TOT would like to wait for the final judgment of the Court. As a result, the Company anticipated entering into a negotiation with TOT in relation to a calculation method of the revenue sharing. The Company calculated the revenue sharing from the net IC revenue which is similar to other operators in the telecommunication industry on a conservative basis. The revenue sharing amount to be paid to TOT is subject to the final judgment of the Court in relation to revoking the announcement of NTC and a negotiation between TOT and the Company. The Company will make adjustment in the financial statement in the period when the issue has been agreed. The Company’s management is certain that it will not incur significant expense more than the revenue sharing amount which the Company has recorded.

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However, after having considered the letter from TOT, the relevant laws and the comments of the legal consultant, the management of the Company is of the opinion that non-compliance with the above Interconnection Agreement would be in conflict with the announcement of NTC regarding the Use and Interconnect of Telecommunication Network. Therefore, the Company decided to comply with the said Agreements which are in line with the legal provisions currently in force by issuing invoices to collect the interconnection charge from the contractual parties. On 30 December 2008, the Company has remitted the revenue sharing incurred from the interconnection of the telecommunication network since February 2007 to June 2008 in the amount of Baht 761 million based on the rate and calculation method of the Company to TOT. Later, the Company and TOT had set up the negotiation committee to seek for the conclusion but it could not be done as TOT required the Company to pay revenue sharing calculated on gross interconnection charges received by the Company at the rate specified in the Agreement without deduction of interconnection charges which the Company has to pay to other operators. Thus, on 26 January 2011, TOT sent a letter demanding the Company to pay the revenue sharing on the interconnection charges of the Agreement for operations year 17th - 20th in the amount of Baht 17,803 million plus interest at the rate of 1.25% per month. But the Company disagreed and sent a letter opposing the said claim to TOT and the Company has submitted the dispute to the Dispute Reconciliation Office, Arbitration Institute ref. no. Black 19/2554 on 9 March 2011 requesting the Arbitral Tribunal to give an award that TOT has no right to claim for such revenue sharing.

4) Obligations of the bank guarantees in connection with the Agreement for Operations According to the Agreement, the Company has the duties to deliver the bank guarantees to TOT Public Company Limited (â&#x20AC;&#x153;TOTâ&#x20AC;?) to secure the payment of the minimum revenue sharing for each operation year and shall recover the bank guarantee of the operation year back. TOT did not return the bank guarantees which have secured the payment of the minimum revenue sharing for the operation year 17th - 21st for a total value of Baht 7,007 million by claiming that the Company had not completely paid the revenue sharing due to the deduction of the revenue sharing for the Excise Tax and the deduction of the Interconnection Charges where the disputes of which have been pending the consideration of the Arbitral Tribunal. On 11 May 2011 and on 5 October 2012, the Company has submitted the disputes to the Office of Dispute Resolution, Arbitration Institute, case no. Black 40/2554 and 119/2555 requesting the Arbitral Tribunal to award an order to TOT to return the bank guarantees to the Company because the Company has completely paid the revenue sharing for each operation year and has correctly and fully complied with the law and the relating Agreements in all respects. On 10 February 2014, the Arbitral Tribunal has given the arbitration award to order TOT to return the bank guarantees for the operation year 17th - 21st to the Company. On 16 May 2014, TOT has submitted the case no. Black 660/2557 to the Central Administrative Court to revoke the Arbitral Tribunalâ&#x20AC;&#x2122;s award.

Financial Report

On 29 July 2014, TOT has submitted a dispute no. 55/2557 demanding the Company to pay additional payment for the revenue sharing on the interconnection charges of the operation years 21st - 22nd in the amount of Baht 9,984 million plus interest at 1.25% per month on its outstanding and computing from the default date until the full payment is made. In addition, TOT has requested this case to be under the same consideration with the case no. Black 19/2554 to the Arbitral Tribunal. At present, the said disputes are pending on the Arbitration process.

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On 19 May 2014, the Company has submitted the case no. Black 666/2557 to the Central Administrative Court requesting TOT to return the bank guarantees for the 17th - 21st operation year to the Company according to the arbitration award and pay the bank guarantees fee of Baht 6.65 million which had been paid by the Company to the banks as well as interest at 7.5% per annum computing from the date that Company paid to the banks. Currently, this black case is in the Central Administrative Court procedure. 5) 900 MHz subscribers migration to 3G 2100 MHz On 25 September 2014, TOT Public Company Limited (“TOT”) has submitted a dispute no. Black 80/2557 to the Arbitration Institute demanding the Company to pay compensation from the 900 MHz subscribers porting to 3G 2100 MHz provided by its subsidiary in the amount of Baht 9,126 million plus interest at 7.5% per annum from 25 September 2014 until the full payment is made. Currently, the case is in the Arbitration process. The Company’s management believes that the Company has correctly and fully complied with the related conditions of the Agreement in all respects then the outcome of the said dispute shall be settled favourably and has no considerable impact on the financial statements of the Company.

Digital Phone Company Limited (“DPC”) 1) The deduction of excise tax from the revenue sharing between DPC and CAT Telecom Public Company Limited (“CAT”) On 9 January 2008, CAT Telecom Public Company Limited (“CAT”) submitted a dispute to the case no. black 3/2551 to the Arbitration Institute and the Dispute Reconciliation Office, Justice Court Office demanding DPC, a subsidiary, to pay additional payment of revenue sharing under the Digital Personal Communication Network Contract in the amount of Baht 2,449 million plus penalty at the rate of 1.25% per month of the unpaid amount of each year computing from the default date until the full payment is made which total penalty calculated up to December 2007 is Baht 1,500 million, totalling Baht 3,949 million. Later, on 1 October 2008, CAT has submitted the petition to adjust the amount claimed to Baht 3,410 million which calculated from the outstanding revenue sharing up to January 2008 including penalty for Baht 790 million and value added tax for Baht 171 million. This amount is the same as an excise tax that DPC had delivered to Excise Department during 16 September 2003 to 15 September 2007 and deducted it from revenue sharing according to the resolution of the Cabinet dated 11 February 2003. Moreover, CAT has sent a letter No. CAT 603 (Kor Tor.) 739 notifying DPC to comply with such Cabinet’s resolution. Thus, DPC has correctly and fully complied with the Cabinet’s resolution dated 11 February 2003 and this practice is the same as other operators in mobile phone or cellular radio telecommunication industries according to the resolution of the Cabinet. On 1 March 2011, the Arbitral Tribunal has dismissed the case by giving the reason which can be summarised that DPC was not in breach of the Agreement since DPC has completely made the payment of the revenue sharing and all debt was therefore paid in full. Therefore, CAT has no right to re-claim for the alleged deficit amount, including the penalty and the value added tax. On 3 June 2011, CAT has submitted the case no. Black 1259/2554 to the Central Administrative Court to revoke the Arbitral Tribunal’s award. Presently, the said case is pending on the Central Administrative Court process.

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2) The deduction of access charge from revenue sharing between DPC and CAT Telecom Public Company Limited (“CAT”) Pursuant to the resolution of the meeting on 14 January 2004 between TOT Public Company Limited (“TOT”), CAT Telecom Public Company Limited (“CAT”), Digital Phone Company Limited (“DPC”), a subsidiary, and True Move Company Limited (“True Move”) by the Minister of the Information and Communications Technology Ministry, the Chairman, that TOT consented to reduce access charge of mobile phone from revenue sharing which TOT received from CAT in the amount of Baht 22 /number/month to DPC and True Move starting from the 6th operation year as Total Access Communication Public Company Limited (“DTAC”) had received from TOT. On 12 October 2006 TOT sent a letter to CAT that TOT could not reduce access charge of mobile phone to DPC and True Move and demanding CAT to pay the access charge that DPC and True Move have deducted as a discount of access charge plus legal interest rate computing from the default date until the fully payment is made.

On 15 October 2009, CAT submitted a dispute no. black 96/2552 to the Arbitration Institute and the Dispute Reconciliation Office, Justice Court Office demanding DPC to pay access charge of mobile phone that DPC had deducted for Baht 22 million (additional consideration of the 11th operation year) including the penalty at the rate of 1.25 percent per month which calculated up to 15 October 2009, total amount of claim is Baht 26 million. On 23 March 2012, the Arbitral Tribunal has dismissed the said two disputes by giving the reason which can be summarised that CAT has not yet paid the discount Baht 22/number/month to TOT. Moreover, CAT cannot prove that DPC has breached the Agreement and has made the payment of revenue sharing incorrectly. Therefore, CAT has no right to re-claim for the alleged deficit amount, including the penalty fine and the value added tax. On 25 June 2012, CAT has submitted the case no. Black 1016/2555 to the Central Administrative Court to revoke the Arbitral Tribunal’s award, and on 16 September 2014, the Central Administrative Court has issued the dismissal order of this case. On 15 October 2014, CAT has appealed such dismissal to the Supreme Administrative Court. At present, the said case is pending for consideration of the Supreme Administrative Court. 3) Access charge payment between DPC, CAT Telecom Public Company Limited (“CAT” ) and TOT Public Company Limited (“TOT”) On 9 May 2011, TOT Public Company Limited (“TOT”) has submitted the case no. Black 1099/2554 to the Central Administrative Court against CAT Telecom Public Company Limited (“CAT”) as the defendant no. 1 and Digital Phone Company Limited (“DPC”) as the defendant no. 2 demanding CAT and DPC to pay the access charge amounting to Baht 2,436 million plus value added tax and interest calculated up to 9 May 2011, total amount of claim is Baht 2,954 million plus interest until the full payment is made as follows: 1) Part of DPC calculating on the amount of the mobile phone number which DPC had rendered the service at the rate of Baht 200/number/month, in the amount of Baht 432 million. 2) Part of CAT calculating on a half of the revenue sharing which CAT had received from DPC, in the amount of Baht 2,331 million.

Financial Report

On 29 July 2008, CAT submitted a dispute no. black 68/2551 to the Arbitration Institute and the Dispute Reconciliation Office, Justice Court Office demanding DPC to pay access charge of mobile phone that DPC had deducted for Baht 154 million (additional consideration of the 7th -10th operation year) plus value added tax and interest at the rate 1.25 percent per month of the above principal amount starting from the default date of each year since the 7th -10th operation year until the full payment is made.

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3) The discount of access charge at the rate of Baht 22/number/month that DPC deducted from the revenue sharing, in the amount of Baht 191 million. Part of this demand is the same amount as CAT has claimed according to the dispute no. Black 68/2551 mentioned above but different in terms of the calculation period and interest. Later, 31 July 2014 TOT has submitted a petition for revision to adjust the access charge amounting to Baht 5,454 million calculated up to 16 September 2013 which is the date of the Agreement for operation period ended plus valued add tax and interest calculated up to 10 July 2014 plus interest calculated from 10 July 2014 until full payment is made as follows. 1) Part of DPC calculating on the amount of the mobile phone number which DPC had rendered the service at the rate of Baht 200/number/month, in the amount of Baht 1,289 million. 2) Part of CAT calculating on a half of the revenue sharing which CAT had received from DPC, in the amount of Baht 3,944 million. 3) The discount of access charge at the rate of Baht 22/number/month that DPC deducted from the revenue sharing, in the amount of Baht 221 million. At present, the said case is pending consideration of the Central Administrative Court. The Company’s management believes that the outcome of the said case shall be in favour of DPC and have no material impact on the consolidated financial statements of the Company since DPC has correctly and fully complied with the law and the relating Agreements in all respects. 4) To deliver and transfer ownership of towers and equipments of power supply between DPC and CAT Telecom Public Company Limited (“CAT”) On 3 February 2009, CAT Telecom Public Company Limited (“CAT”) has submitted a dispute under the case no. Black 8/2552 to the Alternative Dispute Resolution Office, the Arbitration Institute, demanding DPC, a subsidiary, to deliver and transfer ownership of 3,343 towers including 2,653 equipments of power supply under the Digital PCN (“Personal Communication Network Agreement”). Failure to do so, DPC must reimburse Baht 2,230 million to CAT. DPC considers that all disputed assets, towers and the equipment of power supply are not the property as stipulated in the Agreement. On 18 July 2012, the Arbitral Tribunal has given the arbitration award to dismiss the said disputes under the reason that the request by CAT to demand the delivery of the assets from DPC was the premature exercise of legal claim under the contract. On 25 October 2012, CAT has submitted the case no. Black 2757/2555 to the Central Administrative Court to revoke the Arbitral Tribunal’s award. Presently, the said case is pending on the Central Administrative Court process. 5) The reduction of roaming fee between DPC and CAT Telecom Public Company Limited (“CAT”) Starting from 1 July 2006, CAT Telecom Public Company Limited (“CAT”) allowed Digital Phone Company Limited (“DPC”), a subsidiary, to reduce roaming fee per minute from Baht 2.10 to Baht 1.10 to be in line with the decrease of mobile phone service fee. The approval has been renewed for 3-month period several times thereafter until 31 March 2007. After that, CAT did not notify DPC of any changes until on 24 March 2008, CAT had sent a letter to notify DPC to charge roaming fee at Baht 2.10 per minute starting from 1 April 2007. On 8 May 2008, DPC sent a request letter to CAT to reconsider the roaming fee adjustment. The reason for such request was based on the market environment where the prevailing mobile phone service charge to consumers in the market was significantly lower than the specified roaming fee. Such high roaming fee is therefore unreasonable for DPC to provide the roaming

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service to any operators. In the letter, DPC informed CAT that during the period when CAT is reconsidering the request, DPC will charge roaming fee at Baht 1.10 per minute according to the previous agreed terms and conditions. On 31 March 2009, CAT has approved DPC to charge roaming fee at Baht 1.10 per minute during 1 January 2009 - 31 March 2009. Moreover, DPC has entered into the national roaming agreement with the Company to charge roaming fee at Baht 1.10 per minute approved by National Telecommunication Commission (“NTC”) on 16 June 2009. On 15 July 2010, CAT has submitted a dispute under case no. Black 62/2553 to the Alternative Dispute Resolution Office, the Arbitration Institute, demanding DPC to pay additional payment of revenue sharing of 10th - 12th operation year that DPC reduced roaming fee per minute from Baht 2.10 to Baht 1.10 during 1 April 2007 - 31 December 2008 amounting to Baht 1,636 million plus penalty computing up to March 2010 of Baht 364 million, totaling Baht 2,000 million and penalty at the rate of 1.25 percent per month from April 2010 until the full payment is made by alleging that CAT had approved the said roaming fee reduction up to 31 March 2007 only.

At present, the said dispute is pending on the Arbitration process. The Company’s management believes that the outcome of the said dispute shall have no material impact on the consolidated financial statements of the Company since DPC has correctly and fully complied with the law and the relating Agreements in all respects. 6) The damage arisen from uncollectible international call service charges between DPC and CAT Telecom Public Company Limited (“CAT”) On 8 April 2011, CAT Telecom Public Company Limited (“CAT”) submitted a dispute no. Black 32/2554 to the Arbitration Institute and the Dispute Reconciliation Office, Justice Court Office demanding DPC to pay Baht 33 million including interest at the rate of 15% per annum of the claimed amount, total amount of claim Baht 35 million by alleging that DPC has committed a breach of the Digital PCN (Personal Communication Network) 1800 Service Agreement due to subscriber fraud on the Digital PCN 1800 Service Agreement between DPC and subscribers for 1,209 numbers during 1997 - 2003 causing damages to CAT where CAT was unable to collect the international call service charges occurred from the use of such numbers. On 28 May 2013, the Arbitral Tribunal reached its decision to dismiss such dispute by stating that it is not about breach of the agreement but whether there has been a wrongful act. Therefore, the dispute is not within the Jurisdiction of the Arbitral Tribunal. On 6 September 2013, CAT has submitted the case no. Black 1767/2556 to the Central Administrative Court to revoke the Arbitral Tribunal’s award. Presently, the said case is pending on the Central Administrative Court process. 7) Revenue sharing on interconnection charge between DPC and CAT Telecom Public Company Limited (“CAT”) On 24 August 2012, CAT has submitted a dispute under case no. Black 110/2555 to the Alternative Dispute Resolution Office, The Arbitration Institute, demanding DPC to pay additional payment of revenue sharing of 10th - 14th operation year amounting to Baht 183 million and penalty at the rate of 1.25 percent per month of the above principal amount starting from the default date of each year until the full payment is made.

Financial Report

On 12 September 2011, CAT has submitted a dispute to the Alternative Dispute Resolution Office, the Arbitration Institute; case no. Black 89/2554 demanding DPC to make additional payment of revenue sharing of 12th operation year which DPC reduced roaming fee from Baht 2.10 per minute to Baht 1.10 per minute during 1 April 2009 - 15 June 2009 in the amount of Baht 113 million plus penalty at the rate of 1.25% per month from 1 April 2009 until full payment is made.

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On 1 April 2014, CAT has submitted a dispute under case no. Black 26/2557 to the Alternative Dispute Resolution Office, The Arbitration Institute, demanding DPC to pay additional payment of revenue sharing of 15th operation year amounting to Baht 141 million and penalty at the rate of 1.25 percent per month of the above principal amount starting from the default date of each year until the full payment is made. Such amount represents the revenue sharing which CAT calculated on gross interconnection charge received by DPC from other operators at the percentage rate specified in the Agreement without deduction of interconnection charge which DPC has to pay to other operators. At present, the said dispute is pending on the Arbitration procedures. The Company’s management believes that the outcome of the said dispute shall be settled favourably and has no material impact on the consolidated financial statements of the Company since DPC has correctly and fully complied with the law and the related conditions of the Agreement in all respects. 8) Obligations of the bank guarantees in connection with the Agreements for Operations According to the Agreement, Digital Phone Company Limited (“DPC”) has the duties to deliver the bank guarantees to CAT Telecom Public Company Limited (“CAT”) to secure the payment of the minimum revenue sharing for each operation year and shall recover the bank guarantee of the operation year back. CAT did not return the bank guarantees which have secured the payment of the minimum revenue sharing for the operation year 10th - 14th for a total value of Baht 2,606 million by claiming that DPC had not completely paid the revenue sharing due to the deduction of the revenue sharing for the Excise Tax and the deduction of the Interconnection Charges, the discount of Access Charges and the reduction of the rate of roaming charge where the disputes of which have been pending the consideration of the Arbitral Tribunal. On 8 October 2012, DPC has submitted a dispute to the Office of Dispute Resolution, Arbitration Institute, case no. Black 120/2555 requesting the Arbitral Tribunal to award an order to CAT to return the bank guarantees to DPC because DPC has completely paid the revenue sharing for each operation year and has correctly and fully complied with the law and the relating Agreements in all respects. At present, the above mentioned disputes are in the process of consideration of the Arbitral Tribunal.

AIN Globalcomm Company Limited (“AIN”) The international direct dialling service by using the symbol “+” between AIN and CAT Telecom Public Company Limited (“CAT”) On 7 March 2008, CAT Telecom Public Company Limited (“CAT”) has submitted the black case no. 1245/2551 to the Civil Court against Advanced Info Service Public Company Limited (“the Company”) as the defendant no. 1 and AIN Globalcomm Company Limited, a subsidiary, as the defendant no. 2 requesting the Company and the subsidiary to pay compensation with interest rate at 7.5% per annum for damage up to the date of case submission equalling

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to Baht 130 million. The reason is to change traffic of the international direct dialling service by the Company and the subsidiary during 1-27 March 2007 through the Company subscriber by using the symbol “+” dialling from no. 005 of the subsidiary, instead of no. 001 of CAT without the prior notification to subscriber. On 4 September 2008, CAT submitted a petition revision to adjust compensation for Baht 583 million (including interest) because CAT was damaged consecutively until 7 March 2008. On 19 November 2008 CAT submitted the request for the order of provisional remedial measure before delivery of judgment to cease the Company and the subsidiary to transfer the traffic 001 or symbol “+” of CAT to traffic 005 of the subsidiary. On 26 February 2009, the Civil Court dismissed the CAT’ request and on 20 March 2009, CAT has appealed the dismissal. On 16 August 2012, the Court of Appeal has issued an order confirming the dismissal order of the Civil Court and CAT has submitted the petition to the Supreme Court on 19 October 2012. On 3 February 2015, the Supreme Court has issued an order confirming the dismissal order of the Appeal Court.

41 Events After the Reporting Period Increase in share capital of a subsidiary On 19 January 2015, Advanced Broadband Network Co., Ltd. (“ABN”), a subsidiary, registered the increase in the share capital from Baht 1 million (10,000 ordinary shares, Baht 100 par value) to Baht 15 million (150,000 ordinary shares, Baht 100 par value) with the Ministry of Commerce. The purpose of the capital increase is for future investment. The Company paid for the increased shares by Baht 100 per share, totalling Baht 14 million and holds 99.99% of the issued share capital. Dividends At the Board of Directors’ meeting held on 5 February 2015, the Board passed a resolution proposing to the annual general shareholders’ meeting the payment of dividends for the year 2014, at the rate of Baht 12.00 per share, Baht 6.04 each of which was paid as an interim dividend on 2 September 2014. The proposed dividends shall be approved by the shareholders.

Financial Report

On 17 December 2009, the Civil Court has dismissed the case as the facts cannot be proved that CAT has either an exclusive right to use the symbol “+” or the right to prohibit the Company and AIN to use the symbol “+” and it cannot also been proved that the changing of the connection setting of the international direct dialing service from using the symbol “+” for the code 001 of CAT to “+” for the code 005 of AIN has caused the subscribers who use international direct dialing service to believe that they are using the code 001 of CAT, therefore, the acts of the Company have not infringed any right of CAT and also of AIN which CAT alleged to jointly commit the wrongful act against the Company and have not infringed the right of CAT as well. CAT has appealed to the Court of Appeal on 10 March 2010. Subsequently on 27 June 2013, the Court of Appeal has issued an order confirming the dismissal order of the Civil Court and CAT has submitted the petition to the Supreme Court on 16 September 2013. Presently, the said case is pending on the Supreme Court process.

174

42 Thai Financial Reporting Standards (TFRS) not yet Adopted

A number of new and revised TFRS have been issued but are not yet effective and have not been applied in preparing these financial statements. Those new and revised TFRS that may be relevant to the Groupâ&#x20AC;&#x2122;s/Companyâ&#x20AC;&#x2122;s operations, which become effective for annual financial periods beginning on or after 1 January in the year indicated, are set out below. The Group/Company does not plan to adopt these TFRS early.

TFRS

Topic

Year Effective

TAS 1 (revised 2014)

Presentation of Financial Statements

2015

TAS 2 (revised 2014)

Inventories

2015

TAS 7 (revised 2014)

Statement of Cash Flows

2015

TAS 8 (revised 2014)

Accounting Policies, Changes in Accounting Estimates and Errors

2015

TAS 10 (revised 2014)

Events after the Reporting Period

2015

TAS 11 (revised 2014)

Construction Contracts

2015

TAS 12 (revised 2014)

Income Taxes

2015

TAS 16 (revised 2014)

Property, Plant and Equipment

2015

TAS 17 (revised 2014)

Leases

2015

TAS 18 (revised 2014)

Revenue

2015

TAS 19 (revised 2014)

Employee Benefits

2015

TAS 21 (revised 2014)

The Effects of Changes in Foreign Exchange Rates

2015

TAS 23 (revised 2014)

Borrowing Costs

2015

TAS 24 (revised 2014)

Related Party Disclosures

2015

TAS 26 (revised 2014)

Accounting and Reporting by Retirement Benefit Plans

2015

TAS 27 (revised 2014)

Separate Financial Statements

2015

TAS 28 (revised 2014)

Investments in Associates and Joint Ventures

2015

TAS 29 (revised 2014)

Financial Reporting in Hyperinflationary Economies

2015

TAS 33 (revised 2014)

Earnings per Share

2015

TAS 34 (revised 2014)

Interim Financial Reporting

2015

TAS 36 (revised 2014)

Impairment of Assets

2015

175

Annual Report 2014 Advanced Info Service Public Company Limited

TFRS

Topic

Year Effective

TAS 37 (revised 2014)

Provisions, Contingent Liabilities and Contingent Assets

2015

TAS 38 (revised 2014)

Intangible Assets

2015

TAS 40 (revised 2014)

Investment Property

2015

TFRS 2 (revised 2014)

Share-based Payment

2015

TFRS 3 (revised 2014)

Business Combinations

2015 2015

TFRS 6 (revised 2014)

Exploration for and Evaluation of Mineral Resources

2015

TFRS 8 (revised 2014)

Operating Segment

2015

TFRS 10

Consolidated Financial Statementy

2015

TFRS 11

Joint Arrangements

2015

TFRS 12

Disclosure of Interests in Other Entities

2015

TFRS 13

Fair Value Measurement

2015

TSIC 15 (revised 2014)

Operating Leases - Incentives

2015

TSIC 25 (revised 2014)

Income Taxes - Changes in the Tax Status of an Entity or its Shareholders

2015

TSIC 27 (revised 2014)

Evaluating the Substance of Transactions Involving the Legal Form of a Lease

2015

TSIC 29 (revised 2014)

Service Concession Arrangements: Disclosures

2015

TSIC 31 (revised 2014)

Revenue - Barter Transactions Involving Advertising Services

2015

TSIC 32 (revised 2014)

Intangible Assets-Web Site Costs

2015

TFRIC 1 (revised 2014)

Changes in Existing Decommissioning, Restoration 2015 and Similar Liabilities

TFRIC 4 (revised 2014)

Determining whether an Arrangement contains a Lease

2015

TFRIC 5 (revised 2014)

Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds

2015

Financial Report

TFRS 5 (revised 2014) Non-current Assets Held for Sale and Discontinued Operations

176

TFRS

Topic

Year Effective

TFRIC 10 (revised 2014)

Interim Financial Reporting and Impairment

2015

TFRIC 12 (revised 2014)

Service Concession Arrangements

2015

Customer Loyalty Programmes

2015

TFRIC 14 (revised 2014)

TAS 19 (revised 2014) -The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

2015

TFRIC 17 (revised 2014)

Distributions of Non-cash Assets to Owners

Advanced Info Service Public Company Limited and its Subsidiaries TFRIC 13 (revised 2014) Notes to the financial statements

TFRS

TFRIC 17 (revised 2014)

TFRIC 18 (revised 2014)

Topic

Distributions of Non-cash Assets to Owners

Year effective

2015

Transfers of Assets from Customers

2015

Transfers of Assets from Customers

2015

The TheGroup/Company Group/Company has assessment of the initial impact the consolidated has made madea apreliminary preliminary assessment ofpotential the potential initial on impact on the and separate / Company’s financial statements of these new and revised TFRS and expects that there will be no consolidated and separate / Company’s financial statements of these new and revised TFRS andmaterial impact the financial statements in the period of initial application. expectsonthat there will be no material impact on the financial statements in the period of initial

application.

43 Reclassification of Accounts Reclassification of accounts

Certain accounts in the statement of income for the year ended 31 December 2013 have been reclassified to Certain to accounts in the statement offinancial incomestatements for the year ended 31 December 2013 have been conform the presentation in the 2014 as follows:

reclassified to conform to the presentation in the 2014 financial statements as follows:

Consolidated Financial Statements Consolidated

Statement of income for the year ended 31 December

2013 2013

Separate Financial Statements Separate financial statements financial statements Before After Before After Reclass. Reclass. reclass. reclass. reclass. reclass. Before After Before After reclass. Reclass. reclass. reclass. Reclass. reclass. (in million Baht) (in million Baht)

Revenue from rendering of services and equipment rentals 123,788 Construction income from the Agreements for operations Cost of rendering of services and equipment rentals (39,108) Construction cost from the Agreements for operations -

4,028

127,816

101,353

4,671

106,024

3,766

3,640

(4,028)

(43,136)

(3,766) -

(3,766)

(32,773) -

(4,671)

(37,444)

(3,640) -

(3,640)

The reclassifications have been made because, in the opinion of management, the new classification is

The reclassifications have been made because, in the opinion of management, the new classification is more more appropriate to the Group’s business. appropriate to the Group’s business.

Annual Report 2014 Advanced Info Service Public Company Limited

177

Management Discussion and Analysis Executive Summary

In 2014, AIS succeeded in building up 3G-2.1GHz network in both coverage and capacity. Since May, our 3G network has 97% population coverage and by year-end with 21,300 3G-2.1GHz base stations surpassing our target of 20,000 base stations. With the growing demand for mobile data, we continued to enhance our network capacity especially in the dense areas to uplift customers’ experience by installing small cells as well as Wifi hot spots.

AIS will strengthen its leading position in the telecom industry in Thailand by moving toward digital life service provider in 2015 with the integration of mobile, fixed broadband and digital content services. To strengthen our network quality, we plan to spend Bt40bn this year for expanding capacity and rolling out fiber optic to support both mobile and fixed broadband businesses. For fixed broadband business, we expect to acquire 80,000 subscribers within one year. We expect the 1800MHz auction to be held in 3Q15, and it is likely to be deployed for 4G to expand the capacity. Revenue growth is expected to increase by 3-4% upon strong network quality and new product offerings. We expect our EBITDA margin to improve by 100-200bps mainly from lower regulatory cost offsetting rising opex from continuing network capacity expansion.

Significant Events : Write-off of deferred tax asset on separate and consolidated financial statements

In 4Q14, AIS recorded a one-time deferred tax asset written-off on the separate and consolidated financial statements with an amount of Bt664mn. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realized. Excluding this non-cash term, the FY14 normalized consolidated net profit would be Bt36,697mn.

Operational Summary

In 2014, AIS subscribers increased to 44.3mn. With the success of 3G network roll-out, subscribers on 2.1GHz-License continued to increase to 40.8mn, representing 92% of total subscribers exceeding our year-end target of 85%. The achievement of marketing campaigns to upgrade 2G-to-3G as well as 3G device adoption in mid-tier segment resulting in the increment of 3G device on 3G network from 8mn in 2013 to 22mn in 2014. While subscription on 900MHz-BTO declined to 3.5mn.

Financial Report

AIS has been gaining the market share since the first quarter and we are keeping our pace by strengthening our network, services and contents. Our service revenue, excluding IC increased 1.2% YoY to Bt117,990mn tracking along with our guidance of 1-2% amid the gloomy economic outlook. Key driver was mobile data which grew 57% YoY supported by increasing in smartphone penetration now reaching 38%. EBITDA stood at Bt66,428mn, an increase of 4.3% YoY from lower regulatory cost despite higher network OPEX and SG&A. Net profit slightly dropped 0.7% YoY to Bt36,033mn, mainly from higher interest expense. Competition outlook in 2015 is expected to be more concentrated in mid-to-low tier segments. Operators will push 3G handsets with lower prices into the market as 900MHz spectrum under Build-Transfer-Operate (BTO) will expire in Sept-15. This will continue to pressure the handset margin near zero, the price per unit for both voice, and data and marketing spending. On the positive side, rising adoption of 3G handsets will generate regulatory cost saving. Continuing with the successful co-brand handset strategy known as AIS Super Combo, we will provide more varieties of quality smartphones with ranges of price.

178

Both ARPU and MOU were affected by the increase of the second SIM subscription for both additional devices such as tablets and attractive promotional campaigns. In addition, weak macro-economic outlook in 2014 pressured the usage per SIM for both voice and data. Also, we have been providing lower-tier postpaid packages to support mid-to-low tier subscribers which constrained postpaid ARPU. As a result, postpaid ARPU declined 2.8% QoQ and 7.5% YoY to Bt608, while prepaid ARPU increased 1.1% QoQ but lowered 11% YoY to Bt170.

Subscribers 900MHz-BTO1)

4Q13 1Q14 2Q14 3Q14 4Q14 24,494,400

16,098,400

34,415,900

5,114,600

38,680,600

3,546,800

2.1GHz-License

16,366,500

Prepaid

36,594,000 37,898,700 38,217,100 39,008,500 39,360,600

Postpaid

26,264,100

8,462,300

40,754,500

4,266,900 4,463,800 4,661,100 4,786,700 4,940,700

Total subscribers

40,860,900

42,362,500

42,878,200

43,795,200

44,301,300

Net additions 900MHz-BTO1) 2)

2.1GHz-License

Postpaid Prepaid

Total net additions

-4,159,300 -8,396,000 -7,636,000 -3,347,700 -1,567,800 5,895,100

9,897,600

8,151,700

4,264,700

2,073,900

213,200 196,900 197,300 125,600 154,000

1,522,600 1,304,700 318,400 791,400 352,100 1,735,800

1,501,600

515,700

917,000

506,100

ARPU (Baht/subs/month) 900MHz-BTO1)

2.1GHz-License2)

203

297

191

256

178

241

188

221

216

Postpaid

658

639

647

625

608

Blended

234

225

223

216

Prepaid

191

179

175

169

170

MOU (minute/sub/month) 900MHz-BTO1)

2.1GHz-License

291

255

205

194

210

342

336

306

284

275

294

283

263

255

256

Postpaid

429 412 397 387 373

Blended

308

Prepaid

297

277

270

269

900MHz-BTO refers to the subscription of customers under 900 & 1800MHz Build-Transfer-Operate contract 2.1GHz-License refers to the subscription of customers under 2.1GHz license issued by NBTC. The subscribers who are holding 2G devices have to roam on the 900MHz network. 2)

4Q14 Snapshot

In 4Q14, our service revenue, excluding IC, was Bt30,037mn increasing 2.2% QoQ from festive season and 3.5% YoY from the low base in 4Q13 due to political unrest. 3G-2.1GHz network has been continuously enhanced with increasing number of base stations including small cells and Wifi hotspots. A new model of AIS Super Combo with a wider screen launched in October also found a great sale and helped elevate the 3G device penetration on

Annual Report 2014 Advanced Info Service Public Company Limited

179

3G-2.1GHz to 55%, up from 49% in 3Q14. The popular iPhone 6 and iPhone 6 Plus also significantly drove our sales revenue up 101% QoQ and 42% YoY. The effort to migrate customers to 3G and the lower roaming rate in 4Q14 has translated into lower regulatory fee amounting Bt3,856mn dropping 16% QoQ and 30% YoY. However, SG&A rose 9.2% QoQ and 14% YoY mainly from marketing spending. In summary, EBITDA stood at Bt17,727mn growing 7.8% QoQ and 8.7% YoY. In spite of higher D&A and deferred income tax (please see significant events on page 1), net profit rose to Bt9,122mn increasing 1.9% QoQ and 3.5% YoY. Excluding the Bt664mn unusable deferred tax assets, the normalized net profit for 4Q14 would be Bt9,786mn or +9.3% QoQ and 7.6% YoY.

FY14 Financial Summary Revenue

In 2014, AIS total revenue, excluding construction increased 1.3% to Bt148,729mn due to the growth in data consumption and handset sales. • SIM & device sales, representing 16% of total revenue, were Bt23,332mn and increased 23% YoY mainly from the popularity of AIS Super Combo. We have sold 2.5mn units since April. According to our zero-handset margin strategy to increase 3G device adoption, our sales margin declined to 0.8% compared to 6.5% in 2013. Service revenue, excluding IC, tracked along with our guidance which stood at Bt117,990mn and increased 1.2% YoY, underpinned by the accelerating mobile data whereas voice continued to decline. In 2014, AIS had 97% population coverage on 3G-2.1GHz with the densest of 3G base stations in Thailand which support the growing number of subscribers using 3G service. As a result, revenue from 2.1GHz-License represented 78% of service revenue. (See table revenue mix)

- Voice revenue was Bt65,382mn, a decrease of 14% YoY due to the substitution of mobile data in some subscribers’ segments and weak economic sentiment in the first half of the year. - As our 3G network coverage and capacity increased, non-voice revenue growth accelerated 34% YoY to Bt43,495mn. There has been strong market demand for mobile data, more varieties of affordable smartphone and attractive pricing package for both postpaid and prepaid. Mobile data accounted for 29% of service revenue, excluding IC, compared to 19% in 2013. - International roaming (IR) declined 17% YoY to Bt2,240mn mainly from the impact of martial law resulted in lower tourists and global price pressure. - International call & other businesses rose 24% YoY to Bt6,872mn underpinned by the growth of Wifi subscription. - Interconnection charges (IC) Both IC revenue and cost declined around 35% due to the change in interconnection rate (from 1Bt/minute to 0.45/minute starting since July 1st, 2013). Net interconnection charge (IC) was Bt641mn, comparing to Bt659mn in 2013.

Cost & Expense

• In 2014, cost of service excluding IC was Bt53,034mn, dropping 6.6% YoY, primarily from lower regulatory fee despite higher D&A and network opex due to 3G network expansion. -

Regulatory fee was Bt19,427mn decreasing 27% YoY from the effort to attract customers to shift from 2G to 3G, which was subject to lower revenue sharing structure under the license base. This was supported by our success in AIS Super Combo campaign which dramatically helped drive up 3G device penetration. The proportion of regulatory fee to service revenue excluding IC in FY14 stood at 16.5% compared to 22.7% in FY13.

Financial Report

•

180

- Depreciation & Amortization (D&A) was Bt18,633mn, rising 14% YoY due to our extensive expansion of 3G network including increasing number of base stations and fiber optics. It is important to note that 2G-1800MHz operating right was fully amortized since 3Q13 while the 2G-900MHz with the remaining of Bt8.7bn will be fully amortized by 3Q15 when the concession expires. - Network OPEX grew 10% YoY to Bt8,538mn as we extensively expand 3G-2.1GHz coverage nationwide which has reached 97% of population. Also, we continued to invest in capacity to cope with high data consumption demand. - Other cost of service slightly grew to Bt6,436mn, a rise of 2.2% YoY. • SG&A expense increased to Bt18,860mn or +27% YoY mainly from higher marketing spending to support 3G migration and brand awareness. - Marketing expenses grew significantly to Bt6,220mn or a rise of 44% YoY mainly from 3G promotional campaigns to drive 3G handset adoption as well as spending to sustain brand awareness. FY14 marketing expenses represented 4.2% of total revenue in line with guidance. - General admin expenses stood at Bt11,111mn increasing 17% YoY as staff cost grew 15% from higher headcounts. In FY14 loss from write-off of obsolete assets also grew 49% to Bt818mn, up from Bt549mn in FY13. - Depreciation and amortization was Bt289mn or +25% YoY mainly due to shop renovation. - Bad debt rose to Bt1,240mn or +58% YoY since postpaid revenue grew from higher postpaid subscribers. However, FY14 % bad debt to postpaid revenue still remained manageable at 3.6%, up from 2.5% in FY13. • Investment Income was Bt370mn, a decrease of 33% YoY due to lower interest rate received and lower cash outstanding. • Finance costs in FY14 were Bt1,527mn increasing 52% YoY primarily from long-term debenture issued in April. • Net gain from foreign exchange was Bt189mn up from net loss of Bt233mn in FY13. These are unrealized gain from the USD denominated CAPEX while other foreign debts were fully hedged.

Profit

In FY14 EBITDA grew 4.3% to Bt66,428mn, due to lower regulatory fee despite higher network opex and SG&A. This also drove up the consolidated EBITDA margin to 44.7% up 130bps from FY13, and the service EBITDA margin to 52.8% increasing 390bps from FY13. FY14 net profit was Bt36,033mn, a drop of 0.7%. Excluding the Bt664mn write-off of unusable deferred tax assets in 4Q14, normalized net profit would be Bt36,697mn or flattish YoY.

Financial position

AIS had total assets of Bt126,351mn, an increase of 13% YoY, mainly from investments in 3G network and cash. Total liabilities increased to Bt79,486mn or +20% YoY as additional long-term debts were issued. Total equity grew slightly to Bt46,865mn. AIS still had healthy financial strength as liquidity remained high with a current ratio of 0.91x. Net debt to equity of 0.39x still showed room for more gearing while the average cost of debt stayed at 4%.

Cash Flow

In FY14 AIS generated net operating cash flow of Bt63bn increasing from Bt51bn in FY13. AIS had spent in total Bt33bn for CAPEX in FY2014 against our guidance of Bt40bn. Full year dividend paid was Bt35bn while debt borrowed and repaid were Bt25bn and Bt12bn, respectively. Also, in 4Q14 the second payment of 2.1GHz spectrum license bid of Bt3,656mn was paid to the regulator, NBTC, which left the last payment of the same amount in 4Q15.

181

Annual Report 2014 Advanced Info Service Public Company Limited

4Q13

3Q14 4Q14

Voice revenue

18,212

15,710

15,454

-15%

-1.6%

75,969

65,382

-14%

8,563

11,388

12,051

41%

5.8%

32,376

43,495

34%

International Roaming

759

537

650

-14%

21%

2,690

2,240

-17%

Others (IDD, other fee)

1,476

1,746

1,882

28%

7.8%

5,521

6,872

25%

29,010

29,382

30,037

3.5%

2.2%

116,556

117,990

1.2%

IC revenue

1,845

1,765

1,953

5.9%

11%

11,260

7,407

-34%

SIM and handset sales

5,947

4,208

8,454

42%

101%

18,995

23,332

23%

Total revenues ex. construction

36,803

35,355

40,444

9.9%

14%

146,811

148,729

1.3%

Regulatory fee

(5,497)

(4,589)

(3,856)

-30%

-16%

(26,443)

(19,427)

-27%

Depreciation & Amortization

(4,147)

(4,819)

(5,040)

22%

4.6%

(16,309)

(18,633)

14%

Network operating expense

(1,959)

(2,354)

(2,227)

14%

-5.4%

(7,757)

(8,538)

10%

Other cost of services

(1,607)

(1,623)

(1,657)

2.1%

3.1%

(6,299)

(6,436)

2.2%

(13,210)

(13,385)

(12,780)

-3.3%

-4.5%

(56,809)

(53,034)

-6.6%

IC cost

(1,693)

(1,602)

(1,738)

2.6%

8.4%

(10,601)

(6,766)

-36%

Cost of SIM and handset sales

(5,625)

(4,291)

(8,299)

48%

93%

(17,760)

(23,148)

30%

Total costs ex. construction

(20,528)

(19,278)

(22,816)

11%

18%

(85,170)

(82,948)

-2.6%

Gross profit

16,275

16,077

17,628

8.3%

9.7%

61,642

65,781

6.7%

SG&A

(4,440)

(4,643)

(5,069)

14%

9.2%

(14,876)

(18,860)

27%

Marketing Expense

(1,420)

(1,414)

(1,866)

31%

32%

(4,331)

(6,220)

44%

General administrative & staff cost

(2,748)

(2,864)

(2,782)

1.2%

-2.9%

(9,526)

(11,111)

17%

Bad debt provision

(209)

(290)

(340)

63%

17%

(787)

(1,240)

58%

28%

8.5%

(232)

Non-voice revenue

Service revenue, ex. IC

Cost of service, ex. IC

Depreciation Operating profit Net foreign exchange gain (loss) Other income (expense) Finance cost Income tax Non-controlling interest Net profit for the period

(63)

(75)

(81)

%YoY %QoQ

2013

2014 %YoY

(289)

25%

11,835

11,434

12,560

6.1%

9.8%

46,765

46,920

0.3%

(215)

120

(26)

-88%

-121%

(233)

189

-181%

115

176

134

17%

-24%

708

500

-29%

(228)

(471)

(458)

101%

-2.7%

(1,002)

(1,527)

52%

(2,707)

(2,311)

(3,100)

15%

34%

(10,008)

(10,080)

0.7%

-34%

61%

-32%

8,816

8,955

9,122

3.5%

1.9%

36,274

36,033

-0.7%

%YoY %QoQ

2013

2014 %YoY

Revenue mix (Bt mn)

4Q13

900MHz-BTO revenue

15,787

3,760

2,787

-82%

-26%

89,131

24,238

-73%

2.1GHz-License revenue

11,747

23,875

25,368

116%

21,904

86,879

297%

Total

27,534

27,636

28,155

2.3%

1.9%

111,035

111,118

0.1%

43%

86%

90%

20%

78%

% 2.1GHz-License revenue

3Q14 4Q14

Financial Report

Income statement (Bt mn)

182

EBITDA (Bt mn)

4Q13

3Q14 4Q14

2013

2014 %YoY

Operating Profit

11,835

11,434

12,560

6.1%

9.8%

46,765

46,920

0.3%

4,211

4,893

5,121

22%

4.7%

16,541

18,922

14%

(Gain) loss on disposals of PPE

323

194

110

-66%

-43%

562

865

54%

Management benefit expense

(44)

(43)

(36)

-18%

-16%

(163)

(184)

13%

(8)

(35)

(26)

216%

-25%

(14)

(96)

571%

EBITDA

16,316

16,442

17,727

8.7%

7.8%

63,691

66,428

4.3%

Consolidated EBITDA margin (%)

44.3%

46.5%

43.8%

43.4%

44.7%

Service EBITDA margin (%)

51.8%

53.1%

54.9%

48.9%

52.8%

2013

2014 %YoY

Depreciation & amortization

Other financial cost

%YoY %QoQ

Service EBITDA margin is derived from service business which excludes handset business. Service EBITDA margin = (EBITDA â&#x20AC;&#x201C; Net sales) / (Total revenue - Sales revenue)

Normalized net profit Net profit for the period Write off deferred tax asset - DPC Write off deferred tax asset - AIS Normalized net profit

4Q13

Construction cost

%YoY %QoQ

8,816

8,955

9,122

3.5%

1.9%

36,274

36,033

-0.7%

282

411

664

9,098

8,955

9,792

7.6%

9.3%

36,685

36,697

0.1%

%YoY %QoQ

2013

2014 %YoY

& cost from Revenue construction (Bt mn):IFRS12 4Q13 Construction revenue

3Q14 4Q14

305

135

-94%

-87%

3,766

600

-84%

(305)

(135)

(18)

-94%

-87%

(3,766)

(600)

-84%

183

Annual Report 2014 Advanced Info Service Public Company Limited

Financial Position (Bt mn/% to total asset) Cash

4Q13

4Q14 14%

17,967

14%

1,577

1.4%

1,542

1.2%

10,264

9.2%

10,415

8.2%

Inventories

2,865

2.6%

2,519

Others

5,005

4.5%

6,682

5.3%

Current Asset

34,965

31%

39,126

31%

Spectrum license

13,601

12%

12,624

10%

Network and PPE

56,422

50%

69,441

55%

Intangible asset

2,178

1.9%

2,505

Defer tax asset

3,557

3.2%

1,442

1.1%

Others

1,303

1.2%

1,213

Total Assets

112,026

100%

126,351

100%

Trade payable

11,718

11%

11,903

9.4%

ST loan & CP of LT loans

9,303

8.3%

2,572

Accrued R/S expense

3,535

3.2%

5,130

4.1%

Others

17,279

15%

23,301

16%

Current Liabilities

45,491

41%

42,906

34%

Debenture & LT loans

14,866

13%

33,769

27%

ST investment Trade receivable

Others

5,776 5.2% 2,811 2.2%

Total Liabilities

66,133

59%

79,486

63%

Retained earning

19,729

18%

20,710

16%

Others

26,163

23% 26,155

21%

Total Equity

45,893

41%

37%

Key Financial Ratio

46,865

4Q13

3Q14

4Q14

Interest bearing debt to equity

0.53

1.11

0.78

Net debt to equity

0.19

0.69

0.39

Net debt to EBITDA

0.14

0.39

0.26

Current Ratio

0.77

0.86

0.91

Interest Coverage

DSCR

5.1 7.0 13

ROE

88% 85% 93%

Financial Report

15,254

184

Debt repayment schedule (Bt mn)

Debenture

Loan

4Q14

- 5,692

2015

- 2,399

2016

- 3,707

2017

397 1,801

2018

- 6,799

2019

7,789 1,250

2020

- 2,500

2021

1,776 1,250

2022

- -

2023

- -

2024

6,638 -

Source and use of fund : 2014 Source of Fund (Bt-mn)

Use of Fund (Bt-mn)

Operating cash flow

72,174

CAPEX & Fixed assets

32,562

Proceeds from long-term borrowing

21,600

Dividend paid

35,052

Proceeds from short-term borrowing

3,000

Debt repayment

12,406

Interest received & dividend received

383

Income tax paid

9,354

Change in investments

Spectrum license payment

3,656

Sales of property

Finance cost and others

1,453

Cash increased

2,785

Total

97,268 Total

97,268

Annual Report 2014 Advanced Info Service Public Company Limited

185

FY2015 Management Outlook & Strategy Service revenue, excluding IC

• increase 3-4% YoY

Handset sales

• increase 10% with margin close to zero • 70% 3G device penetration

Consolidated EBITDA margin

• increase 100-200bps YoY

CAPEX • Bt40bn target 29,000 3G BTSs including small cells continue fiber optic rollout renovate and expand shops Dividend

• maintain 100% dividend payout

AIS aims to be the Digital Life Service Provider

CAPEX is set at Bt40bn excluding 4G investment

The investment plan for year 2015 is set to expand 3G capacity especially in the dense areas. We aim to install 3G base stations and small cells to reach 29,000 base stations and upgrade typical AIS Wifi to AIS super Wifi at speed of 650 Mbps. With the exponential growth of data consumption, we also extend our fiber optic transmission to support both mobile and fixed broadband businesses. For the first year with CAPEX of Bt1bn, we target 80,000 fixed broadband subscribers under FTTx and VDSL technologies. In addition, we plan to expand and renovate our AIS shops to increase customers’ touch points and support new products. Total estimated CAPEX is Bt40bn in 2015 excluding 4G investment.

Service revenue ex. IC to grow 3-4% with EBITDA margin to increase 100-200bps

In 2015, we expect service revenue ex. IC to grow 3-4%. The continuously high data growth and our improving 3G-2.1GHz network will remain key factors to support revenue growth and largely offset voice revenue which is expected to keep declining. Due to our popularity in AIS Super combo last year, we perceive this trend to keep on this year and thus expect handset sales to grow 10% with margin maintained at close to zero. This will also enhance our 3G device penetration to 70% which will ultimately translate into lower regulatory fee. Therefore, we expect our consolidated EBITDA margin to increase by 100-200bps despite higher network opex and SG&A. New promotional campaigns will also be launched to keep our brand awareness to stay competitive in the market especially in mid-to-low segments of customers. However, marketing spending will remain around 4% of total revenue.

Financial Report

AIS has set a clear vision moving forward to transform ourselves from a telecom service provider to becoming the Digital Life Service Provider so as to keep advancing presence in the digital era. That said, we will be enhancing our mobile business to elevate customer experience, commencing a fixed broadband business to bring convergence with better technology to our customers, and progressing in an ecosystem of digital content through partnerships. This will be achieved by making greater our core values namely customers, people, and partners.

186

Maintain the dividend policy: 100% dividend payout

The company aims to maintain 100% payout ratio and pays dividend twice a year. The payout ratio is based on consolidated earnings and subject to the availability of retained earnings on the separated financial statement. This commitment is supported by strong operating cash flow and a low debt level. The CAPEX and license payment will be funded by internal cash flow and additional borrowings if required. If and when there are any new business opportunities or significant changes that may impact on our future operation and investment, and hence capital structure, the company will promptly discuss any new direction with the investment community. AIS Investor Relations http://investor.ais.co.th; investor@ais.co.th; Tel: (66) 2299 5117

Disclaimer Some statements made in this material are forward-looking statements with the relevant assumptions, which are subject to various risks and uncertainties. These include statements with respect to our corporate plans, strategies and beliefs and other statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “anticipate”, “intend”, “estimate”, “continue” “plan” or other similar words. The statements are based on our management’s assumptions and beliefs in light of the information currently available to us. These assumptions involve risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Please note that the company and executives/staff do not control and cannot guarantee the relevance, timeliness, or accuracy of these statements.

Audit Fee and Non-Audit Fee

In 2014, the Company had the audit fee and quarterly review fee of total Baht 5.12 million and the audit fee and quarterly review fee of its subsidiaries was Baht 4.34 million.

The Company had a non-audit fee of total Baht 2.52 million.

Annual Report 2014 Advanced Info Service Public Company Limited

Financial Report

Additional Information

187

188

General Information and Other Significant Information General Information of The Company The Company name

: Advanced Info Service Public Company Limited

Registered date on the SET

: 5 November 1991

Symbol for trading

Market capitalization Registered capital Paid-up capital

: ADVANC

: Baht 746,246.93 million (as of 30 December 2014) : Baht 4,997,459,800 : Baht 2,973,095,330

Total shareholders : 45,640 persons (as of 18 August 2014, the latest book closing date for the rights to receive dividend) Free float

: 36.22%

Head office

: 414 Phaholyothin Road, Samsen Nai, Phayathai, Bangkok 10400

Website

: http://www.ais.co.th

Type of business : Provide mobile telephone service in the 900MHz and 1800MHz frequency under the digital GSM technology and 2.1GHz frequency under the digital UMTS technology Registered No. Telephone Facsimile

American Depositary Receipt

: 0107535000265 : (66) 2299 6000 : (66) 2299 5165

ADR ticker symbol

: AVIFY

Depositary

: The Bank of New York Mellon

Exchange

ADR to ORD share ratio ADR CUSIP number

: Over The Counter (OTC) : 1:1

: 00753G103

189

Annual Report 2014 Advanced Info Service Public Company Limited

General Information of Subsidiaries and Affiliates Subsidiaries

Registered Capital

Business

Paid-Up Capital

(Million Share)

% of Investment

365.55

3,655.47

Service provider of online 95.75 data communication service via telephone landlines 408/157, Phaholyothin Place Tower, and optical fiber 38th Floor, Phaholyothin Road, Samsen Nai, Phayathai, Bangkok Tel : (66) 2270 1900 Fax : (66) 2270 1860 Website : www.adc.co.th

957.52

Advanced Contact Center Co.,Ltd. Call center service (ACC)

27.2

272

99.99

Advanced MPAY Co.,Ltd. (AMP) Service provider of 408/60 Phaholyothin Place Tower, payment business via mobile phone 15th Floor, Phaholyothin Road,

300

99.99

Digital Phone Co.,Ltd. (DPC)

404 Phaholyothin Center Tower, Phaholyothin Road, Samsen Nai, Phayathai, Bangkok Tel : (66) 2299 6000 Fax : (66) 2299 5455

Service provider of digital mobile phone network in 1800MHz frequency

(Million Share)

Par Value

(Baht per Share)

Advanced Datanetwork Communications Co.,Ltd. (ADC) (an indirect subsidiary via DPC)

98.55

1) 51.00

414 Phaholyothin Road, Samsen Nai, Phayathai, Bangkok Tel : (66) 2299 6000 Fax : (66) 2299 5959

Samsen Nai, Phayathai, Bangkok Tel : (66) 2687 4808 Fax : (66) 2687 4788

Distributor of cash card business

10 250 99.99

International telephone 408/127 Phaholyothin Place Tower, service gateway 29th Floor, Phaholyothin Road, Samsen Nai, Phayathai, Bangkok Tel : (66) 2299 6000 Fax : (66) 2278 7030 Website : www.ain.co.th

100 100 99.99

Advanced Magic Card Co.,Ltd. (AMC)

414 Phaholyothin Road, Samsen Nai, Phayathai, Bangkok Tel : (66) 2299 6000 Fax : (66) 2615 3330 AIN GlobalComm Co.,Ltd. (AIN)

190

Subsidiaries

Business

Registered Capital

(Million Share)

Network operator for 3 international service and 408/157 Phaholyothin Place Tower, international telecom service operator i.e. international & 38th Floor, Phaholyothin Road, national internet gateway etc. Samsen Nai, Phayathai, Bangkok Tel : (66) 2299 6000 Fax : (66) 2619 8777 Website : www.sbn.co.th

Par Value

(Baht per Share)

Paid-Up Capital

(Million Share)

% of Investment

Super Broadband Network Co.,Ltd. (SBN)

100

300

99.99

Wireless Device Supply Co.,Ltd. Importer and distributor of 0.5 (WDS) handsets and accessories

100

99.99

Advanced Wireless Network Co.,Ltd. (AWN)

Network operator, telecom 13.5 service operator, and computer system service provider. AWN received an Internet License Type I, Telecommunication Business License Type III, and 2.1GHz License from the NBTC

100

1,350

99.99

Advanced Internet Revolution Co.,Ltd. (AIR) 2)

Service provider of internet 24

240

99.99

MIMO Tech Co.,Ltd. (MMT)

Operate IT, and content aggregator businesses

0.5

100

99.99

Fax Lite Co.,Ltd. (FXL)

Operate in acquiring 0.01 and/or lease building, and related facilities for telecommunications business

100

99.98

404 Phaholyothin Center Tower, Phaholyothin Road, Samsen Nai, Phayathai, Bangkok Tel : (66) 2299 5777 Fax : (66) 2299 5200

408/60 Phaholyothin Place Tower, 15th Floor, Phaholyothin Road, Samsen Nai, Phayathai, Bangkok Tel : (66) 2299 6000 Fax : (66) 2687 4986

408/60 Phaholyothin Place Tower, 15th Floor, Phaholyothin Road, Samsen Nai, Phayathai, Bangkok Tel : (66) 2299 6000 Fax : (66) 2299 5200

1291/1 Phaholyothin Road, Samsen Nai, Phayathai, Bangkok Tel : (66) 2299 6000

191

Annual Report 2014 Advanced Info Service Public Company Limited

Subsidiaries Advanced Broadband Network Co.,Ltd. (ABN)

408/60 Phaholyothin Place Tower, 15th Floor, Phaholyothin Road, Samsen Nai, Phayathai, Bangkok

Joint Venture

Registered Capital

Business Currently not start the operation

(Million Share) 0.15

Registered Capital

Business

(Million Share)

Clearing House for Number Portability Co.,Ltd. (CLH)

Jointly invested, operate 0.02 the information system and the centralized database for the mobile number portability service

Bridge Mobile Pte. Ltd. (BMB) 4)

Jointly invested, provide international roaming service (incorporated in Singapore)

598 Q House Ploenchit Building, 6th Floor, Ploenchit Road, Lumpini, Pathumwan, Bangkok Tel : (66) 2646 2523 Fax : (66) 2168 7744

750 Chai Chee Road, #03-02/03, Technopark @ Chai Chee, Singapore 469000 Tel : (65) 6424 6270 Fax : (65) 6745 9453

Transmission network 52/1 Moo 5 Bang Kruai-Sai Noi Road, provider Bangsitong, Bang Kruai, Nonthaburi Information Highway Co.,Ltd.

0.5

Par Value

(Baht per Share) 100

Par Value

(Baht per Share) 100

USD 1

100

Paid-Up Capital

(Million Share)

% of Investment

15 5) 99.98

Paid-Up Capital

(Million Share) 2

USD 9 Million

12.5

% of Investment 20.00

10.00

29.00

Notes : 1) The remaining 49% shareholding is non-related person. 2) The dissolution of Advanced Internet Revolution Co.,Ltd. (AIR) as approved by the Board of Director Meeting no.7/2014 dated 4 August 2014 is now under liquidation process. 3) The dissolution of Mobile Broadband Business Co.,Ltd. (MBB) and Advanced Mobile Broadband Co.,Ltd. (AMB) is now finished. 4) Bridge Mobile Pte. Ltd. (BMB) has reduced its registered and paid-up share to 9 million share and 9 million baht respectively (source: Accounting and Corporate Regulatory Authority (ARCA)). In this regards, such reduction did not change the percentage of investment of the Company. 5) Registered its share capital additional from 1 million baht to 15 million baht on 19 January 2015 6) Advanced Broadband Network Co.,Ltd. granted 29% stake in Information Highway Co.,Ltd. since 16 September 2014 from Super Broadband Network Co.,Ltd.

192

Other references Ordinary share registrar

Thailand Securities Depository Company Limited The Stock Exchange of Thailand Building, 62, Ratchadapisek Road, Klongtoey, Klongtoey, Bangkok 10110 Tel : (66) 2229 2800 Fax : (66) 2359 1259 Call Center : (66) 2229 2888

Auditor

Mr. Charoen Phosamritlert Certified Public Accountant Registration Number 4068 KPMG Phoomchai Audit Limited 195, Empire Tower 48th - 51st Floor, South Sathorn Road, Sathorn, Bangkok 10120 Tel : (66) 2677 2000 Fax : (66) 2677 2222

Digital Life

Advanced Info Service Public Company Limited Head office: 414, Intouch Tower, Phaholyothin Rd. Samsen Nai, Phayathai, Bangkok 10400 Tel. : (66) 2299 6000 Fax. : (66) 2299 5165 www.ais.co.th