TRUE : Annual Report 2003 by True Corporation Public Company Limited

Content Financial Highlights Message from the Chairman President没s Report Home Solutions Small and Medium Enterprise Solutions Corporate Solutions Community Program Independent Directors Corporate Governance Compliance Report Company Background and Major Developments Revenue Breakdown by Business Group Corporate Information References Investment Structure Risk Factors Shareholders Management Connected Transactions Report of the Audit Committee Management's Discussion and Analysis Report of the Board of Directors Responsibilities for Financial Statements 83 Financial Statement 2 4 6 10 14 18 22 24 27 32 38 39 42 43 44 47 48 68 69 70 81

Annual Report 2003 TelecomAsia Corporation Public Company Limited 1

Financial Highlights ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

(1.81) 1.51 10.20

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○ ○ ○ ○ ○ ○ ○ ○

43.67% 4.88% 23.86%

○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

86,472 81,577 4,895 3,232.50

○ ○ ○ ○ ○ ○ ○

○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

20,636 9,012 1,008 (3,425)

○

1/ Excluding one-off transactions which consisted of the following : ë out-of-period booking of leased circuit and conduit rental of Baht 286 million in 2002 and Baht 114 million in 2001, ë one-time compensation of Baht 33 million for workforce reduction in 2002. 2/ Excluding one-time write-off for PCT subscriber acquisition cost of Baht 215 million in 2003.

Report 2003 2 Annual TelecomAsia Corporation Public Company Limited

2001

○

○ ○ ○ ○ ○ ○ ○

(2.34) 1.95 4.60

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(2.13) 0.40 7.30

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○

38.00% 2.02% 27.73%

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○ ○ ○ ○ ○ ○ ○ ○ ○

Per Share Data Loss per share (Baht) Book value per share (Baht) Share price at year end (Baht)

92,977 85,779 7,198 3,694.50

○

○ ○ ○ ○ ○ ○ ○ ○ ○

41.65% 1.76% 32.22%

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Key Financial and Efficiency Ratios EBITDA margin 1/ Operating profit margin Asset Turnover

25,783 9,798 521 (5,395)

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○

86,760 85,265 1,495 3,694.50

○

Consolidated Balance Sheets Total assets Total liabilities Total shareholderûs equity No. of outstanding shares at year end (Million shares)

○

○ ○ ○ ○ ○ ○ ○ ○

27,950 11,642 491 (5,674)

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Consolidated Financial Results Total revenues EBITDA (Normalized) 1/ Operating profit 2/ Net profit (Loss)

2002

○

2003

○

Unit : Million Baht

Revenue Diversification 2001

2002

VAS & Others 13.3%

2003

VAS & Others 14.1%

PCT 14.9%

Voice 64.3%

VAS & Others 15.5%

TA Orange 12.2%

TA Orange 18.4%

PCT 11.4%

PCT 7.5%

Data/Broadband/Internet 7.5%

Voice 53.1% Data/Broadband/Internet 9.1%

Voice 48.8% Data/Broadband/Internet 9.8%

Remark : Data/Broadband/Internet group refers to DDN, Multimedia and Internet segments in the audited financial statement

Business Segment Results Fixed Line Telephone

Value Added Services and Others

Revenue (Bt mn) 15,000

Revenue (Bt mn)

13,277

13,687

13,644

5,000

4,328

12,000

4,000

9,000

3,000

6,000

2,000

3,000

1,000

0 Subs (,000)

2001

2002

2003

1,747

2,020

1,962

3,640 2,737

0 Public Phones (set)

2001

2002

2003

20,730

26,000

Remark : Public phone service is the main contributor to value added service and other revenues.

Wireless (PCT and TA Orange) Revenue (Bt mn) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 PCT Subs (,000) TA Orange Subs (,000)

Data/Broadband/Internet Revenue (Bt mn)

7,228 6,096

3,000

2,750 2,359

2,500 2,000

1,551 1,500

3,072

1,000 500 2001

2002

627 1,336

2003

1,825

2001

2002

DDN Circuits

4,564

7,104

Broadband Subs

1,540

3,708

2003

11,661

Internet Subs (,000)

Annual Report 2003 TelecomAsia Corporation Public Company Limited 3

Message from the Chairman

Mr Dhanin Chearavanont Chairman of the Board In 2003, we focused on diversification and innovation of products and services, integrating them into solutions for homes, small and medium enterprises, and our corporate clients.

Report 2003 4 Annual TelecomAsia Corporation Public Company Limited

ur ability to continue producing high quality, innovative products and services and become an even more dynamic organization are key to TelecomAsia没s success as we move forward to meet the challenges of liberalization. While the telecommunications sector will remain highly competitive, Thailand没s strong economy and its entry into the global free trade arena are creating unprecedented opportunities. As Thai businesses seek to compete successfully in new markets, advanced telecommunications solutions will play an even more important role in helping them to grow. The Government has set an ambitious target of Thailand becoming South East Asia没s largest economy within five years. At TelecomAsia, we have set our own ambitious program of change so that we are prepared to deliver the communications solutions the nation can rely on to achieve its goals. In 2003, we focused on diversification and innovation of products and services, integrating them into solutions for homes, small and medium enterprises, and our corporate clients. We restructured our senior management teams to reflect this focus and put in place systems to achieve greater collaboration between our core telecommunications and media businesses, so that we can leverage our strengths to deliver cost-savings and benefits to our shareholders and customers. On the regulatory front, liberalization of the sector appeared to be progressing too slowly for some. However, in 2003 significant steps were taken which have paved the way for a fairer operating environment in 2004. TelecomAsia remains supportive and committed to this agenda. Cheaper long-distance fixed line calls are on the horizon as a result of the three-month trial of lower tariffs, making fixed line rates more competitive with mobile. The long-awaited National Telecommunications Commission is expected to be established this year, and reform of the interconnection regime - the rates operators charge other operators for each call made across their network - is also anticipated. News of the impending regulatory changes boosted the investment market late in 2003, which was reflected in the strengthening of our share price. During the year, the relatively high price of Broadband Internet access was highlighted as a significant barrier to take-up within Thailand, as well as to foreign investment. TelecomAsia strengthened its position as the leader in this market, supporting government moves to reduce rates by launching new high-speed Broadband packages and investing heavily in the expansion of our Broadband network in the Bangkok Metropolitan Area and in four provinces. It is this ability to innovate and to be responsive to change which will stand us in good stead for the future. We are confident that our strategy to integrate products and services across the Group and form alliances to meet our customers没 diverse communications needs is the right one and will create exciting opportunities for future growth. It will give us the capacity to not only capitalize on the regulatory and technological changes that lie ahead, but also to ensure that our nation can fully participate in the knowledge society.

Mr Dhanin Chearavanont Chairman of the Board Annual Report 2003 TelecomAsia Corporation Public Company Limited 5

President没s Report Supachai Chearavanont President and CEO

Report 2003 6 Annual TelecomAsia Corporation Public Company Limited

The new TRUE branding represents a transformation of the way we do business and a deep commitment to meeting the needs of our customers in bold, innovative ways.

he catalyst for key TelecomAsia strategic decisions in 2003 was our commitment to achieving greater synergy across the Group and building a strong competitive advantage in the run up to industry liberalization. Above all, we wanted to build on TelecomAsia没s proud 12-year history and transform ourselves from a fixed line operator into a communications solutions provider which enriches and makes possible new lifestyles at home, at the office and on the move. To successfully achieve these goals we first needed to carefully review our strategy and clearly define our vision and values. This required a sustained effort by senior executives and staff who, under the direction of the Board, spent considerable time working to ensure we are an even more customer-centric provider of integrated, voice, data and multimedia communications solutions. We also engaged an international branding company in early 2003 to assist us in reviewing the branding of all TelecomAsia没s product and services, as well as those of our subsidiaries. The review concluded that we could better differentiate ourselves in the market if we brought all of our products and services under one umbrella brand. As a result, the Board approved changing the name of TelecomAsia to TRUE, which was endorsed by an extraordinary meeting of shareholders in November. This new corporate brand identity is due to be launched in the second quarter of 2004. So why do we plan to rebrand to TRUE? The change is not simply a marketing exercise. The new TRUE branding represents a transformation of the way we do business and a deep commitment to meeting the needs of our customers in bold, innovative ways. Rebranding will allow us to leverage on synergies between group subsidiaries, help us to cross-sell products, and provide us with greater market recognition. To achieve these outcomes, we reorganized our senior management teams into three main business units - Home, Small and Medium Enterprises, and Corporate - to enable us to focus better on meeting the communications needs of each customer segment. At the same time, we examined how we might achieve greater operational collaboration across our core telecommunications and media companies. While TelecomAsia, TA Orange and UBC are three distinct businesses, they have many things in common, including the need for a stronger retail sales and service footprint and more comprehensive customer care and billing operations. At the time of releasing this annual report we are evaluating six potential areas for resource sharing across the three companies, with the objective of reducing costs and driving new revenue growth. These areas are, retail outlets, call centers, billing, network transmission, network operations and maintenance, and IT.

Annual Report 2003 TelecomAsia Corporation Public Company Limited 7

Integration of selected operational activities across the Group will enable us to share facilities and resources and provide better service to our customers. Joint teams of senior executives from the three companies are continuing this assessment and will make recommendations on how to move forward later in 2004. In line with our business strategy to develop into a solutions provider, we continued to diversify our business in 2003, while focusing on profitable growth, reducing costs and improving our margins. Although fixed line subscriber numbers stayed level, a strong performance by TA Orange, which reached break-even for the first time in September 2003, boosted our revenue growth by 8.4 percent, compared to 2002. At the same time, fixed line valueadded services, and the data, Internet and Broadband group of services, continued to grow rapidly, contributing 26 percent to total revenue, excluding TA Orange. This result demonstrated that our strategy of diversifying revenue streams is working. High EBITDA margins were maintained throughout the year and free cash flows, excluding TA Orange, grew by 10.2 percent, providing a sound platform for servicing debt and growing the business. We also took further steps to improve our balance sheet, reducing our net debt to EBITDA ratio, excluding TA Orange, to 4.7 times, lower than our 5.1 times in 2002. During 2003 we reached a milestone by completing retirement of our US dollar-denominated debt through the successful placement of Baht 3.3 billion in new debentures. We further enhanced our balance sheet in 2003 with the repayment of loans totaling more than Baht 3.8 billion, while the refinancing of the Company没s Thai bank Baht loans in the third quarter will result in interest savings of Baht 200 million a year. We also succeeded in negotiating more favorable terms for these Thai bank Baht loans, which will give us greater operational flexibility in the future. The major 2003 highlights included the almost doubling of new Internet subscribers. Total Broadband subscribers increased by more than 200 percent and ADSL customer numbers almost tripled. The strong Internet subscriber growth was driven mainly by the successful launch of our ready to use post-paid TA easy Click service. This resulted in Internet revenue growing 138 percent in 2003 to Baht 471 million. During the year we embarked on a major program of expanding our high-speed Broadband network coverage to 90 percent of the Bangkok Metropolitan Area and introduced high-speed Internet access via cable modem in four provinces. Our initiatives in these areas supported the Government没s plan to make high-speed Internet access more widely available in Thailand. As a first step to creating a more level playing field between fixed line and mobile operators, with all other operators we took part in a three-month trial in which fixed line charges were lowered.

Report 2003 8 Annual TelecomAsia Corporation Public Company Limited

As we look forward, liberalization of the sector is drawing closer and there is no doubt that the market will be more competitive. Rebranding will help to ensure that we are in a strong position to meet the challenges ahead. While this impacted slightly on our fixed line revenue, we gained important market knowledge from the trial and remain committed to helping create a more liberal operating environment, which we believe will strengthen the industry and benefit customers. In 2003 we also launched a plan to reinvigorate the PCT business through network improvement, refinancing, and marketing and customer 霉win-back没 activities. The SME and Corporate divisions continued to develop more customer-focused approaches in a number of areas. The True Enterprise Solution for SMEs, comprising three value-added programs - Grow Revenue, Reduce Expense and Enhance Convenience - was launched in late 2003, and we opened our new ContactAsia outsourcing call center to capitalize on the significant growth potential we see in this area. In addition, our Internet service provider subsidiary, Asianet joined two Korean partners to establish a world-class Internet data center. This business will support a number of Broadband applications and expand the Group没s capacity to offer more products and services. Alongside the development of new solutions and the realignment of our organizational structure, we maintained our record for sound governance and accountability. This was acknowledged by the Securities and Exchange Commission of Thailand with a 2003 Disclosure Award, for the second consecutive year. As we look forward, liberalization of the sector, expected by 2006, is drawing closer and there is no doubt that the market will become more competitive. Rebranding will help to ensure that we are in a strong position to meet the challenges ahead, but to realize our full potential staff across all departments and affiliates will need to work even more closely together to ensure we become truly customer-centric. I would like to take this opportunity to thank every staff member for their commitment and hard work in 2003. We have had a reasonable year, but we know there is a lot more to do in 2004.

Supachai Chearavanont President and CEO

Annual Report 2003 TelecomAsia Corporation Public Company Limited 9

Connecting You and Your Home to the World

Report 2003 10 Annual TelecomAsia Corporation Public Company Limited

This hi-speed Internet service uses ADSL technology to meet todayûs demand for no dial-up and uninterrupted log on, by providing the ability to receive and make phone calls while online, on one phone line.

hether at home or on the move, busy consumers increasingly need convenient, fast and cost effective ways to stay connected. To meet this growing demand, TelecomAsia expanded its range of integrated voice, data and entertainment solutions in 2003. In June, Caller ID, a fixed line service that allows users to see the incoming call number before they answer it, was added to the TA Connex suite of services designed to ensure voice communications at home run smoothly and important calls are not missed. In September a three-month trial of reduced fixed line tariffs set the stage for the introduction of new, flexible, discounted rates for calls outside the Bangkok Metropolitan Area (BMA) in 2004. During the year, we also launched the ùone billû concept, which will make bill tracking easier as both TelecomAsia fixed line and Internet service statements will be in one envelope. In anticipation of stronger demand for high-speed Internet access, we rolled out a number of new solutions in 2003 to make wireline and wireless high-speed Broadband more accessible and affordable. Our bundled ùhi speed Internetû service was launched in July, providing home users with higher download speeds from 128 Kbps (kilobits per second) to one Mbps (megabits per second) with a self-install modem. This ùhi speed Internetû service uses ADSL technology to meet todayûs demand for no dial-up and uninterrupted log on, by providing the ability to receive and make phone calls while online, on one phone line. We also launched a WiFi service for homes, giving people the flexibility and convenience of being able to use their notebook computers for wireless data transmission in any room of their house.

Annual Report 2003 TelecomAsia Corporation Public Company Limited 11

Whether you need to stay connected at home or on the move, TelecomAsia is committed to providing you with integrated and tailored voice, data and entertainment solutions to meet your needs. In 2004, we will further expand sales channels and refurbish our retail outlets to enhance the experience of visiting us. In March 2003 we introduced TA easy Click, through which fixed line customers pay only for the time they are actually logged on to the Internet and bypass the hassle of application requirements, prepaid card purchases, or fixed monthly rates. This was supplemented by a special promotion giving new fixed line customers a free, six-month trial of ClickTA, our unlimited post-paid, Internet service. Wireless data transmission services via PCT were also launched, with the AWC I Series II model providing data transmission speeds of up to 64 Kbps with a high-resolution color screen. The PCT Next card, which was made available from August, enables users to connect wirelessly to a PDA or notebook computer, surf the Internet, access their workplace intranet and check their email. In September we launched the novel ùUltramanû character phone for children, meeting consumer demand for greater choice. Late in 2003, in conjunction with Japanese company, DDI Pocket, TelecomAsia subsidiary Asia Wireless introduced an international roaming service for Japanese PCT users, enabling them to use their phones in Bangkok and vice versa. We also expanded our range of online content and home applications. With the launch of TA Entrance Online, we made distance learning from home a reality by providing Bangkok students with access to more than 20 top tutors in core subjects, online tests and instant results by email. In addition, we teamed up with South Korean online game maker, Triglow Pictures, to promote its 3D game ùPristonTaleû, and collaborated with Thai System and Integration and Nako Corporation of Korea to launch ùLaghaimé, another 3D online game.

Report 2003 12 Annual TelecomAsia Corporation Public Company Limited

During the year we installed 20 TA Stations, in the BMA. These are coinoperated Internet kiosks with built-in digital cameras, that offer Internet access speeds of 512 Kbps. We also partnered with a major Bangkok property developer to construct a cyber village, and expanded sales channels to provide customers with more convenient access to TelecomAsia solutions. Whether you need to communicate from home or on the move, TelecomAsia is committed to providing you with the integrated and tailored voice, data and entertainment solutions to meet your needs. In 2004, we will further expand sales channels and refurbish our retail outlets to enhance the experience of visiting us. We will also launch a new range of products and services to ensure you can always stay connected.

Annual Report 2003 TelecomAsia Corporation Public Company Limited 13

Powering SME Growth

Report 2003 14 Annual TelecomAsia Corporation Public Company Limited

mall to medium enterprises (SMEs) are the driving force of Thailandûs economy and are increasingly looking for innovative telecommunications products and services to fuel additional growth. TelecomAsia is focused on providing strong support to the SME community by developing communications and marketing solutions that bring tangible benefits and add value. Our çTrue Enterprise Solutioné launched in 2003 to increase the competitiveness of SMEs, does this through three specific programs - ùGrow Revenueû, ùReduce Expenseû and ùEnhance Convenience.û

Grow Revenue TelecomAsia is using the latest technology to help SMEs bring a new marketing approach to their business and grow revenue. In 2003 we launched the TA SME Community initiative, which enables Thai SMEs to quickly and easily access new business and marketing networks through our website www.truesme.com This service will provide customers with the benefits of a professional online shop, the ability to form business partnerships with fellow website users, and access to the latest news and other information important to their business. Over the coming year the website will continue to be promoted to increase awareness among potential SME customers. In 2003, we also launched new e-marketing initiatives, which will be expanded to allow SMEs to reach out to millions of customers via email, facsimile and other media. Sound customer relationship management is a critically important part of any business. By outsourcing this important function to TelecomAsiaûs call center subsidiary, ContactAsia, SMEs benefit from access to world-class technology that can help them grow their business. Clients can focus on their core operations knowing that their customer relationship management is being taken care of by professionals. Capital investment and employee costs are reduced, while customer satisfaction and retention levels are increased. ContactAsia meets ISO 9001:2001 standards and offers a wide range of value-added services in the areas of customer care, sales and marketing, back office processing and administration, backed by around-the-clock contingency operations. Small and medium enterprises seeking to increase sales revenue can also take advantage of our Freephone 1800 service, which makes it easy for customers anywhere in Thailand to contact them at no cost to the customer. Monthly reports, call screening and call routing - a 24-hour service that automatically distributes incoming calls to specific destination numbers - are all part of the Freephone 1800 service.

In 2003 we launched the TA SME Community initiative, which enables Thai SMEs to quickly and easily access new business and marketing networks through our website.

Annual Report 2003 TelecomAsia Corporation Public Company Limited 15

Reduce Expense Having effective and reliable IT communications are key to building revenue and just as importantly reducing operating costs. By partnering with leading software developers our Business Process Outsourcing service provides business and sales management software to meet a wide range of SME requirements. Small and medium enterprises wanting access to the latest software simply pay a monthly fee. This not only saves SMEs from having to make large set up investments in hardware and software, but also frees up their IT team to concentrate on other important jobs. Other SME cost-saving initiatives launched in 2003 include the pre-paid cordless TA ID Phone service, which provides unlimited business group calls within the Bangkok Metropolitan Area (BMA).

Enhance Convenience For SMEs who want to avoid the complexities of having their own in-house IT management team, we created our ICT Manager service in 2003. Our experienced ICT Manager consultants can take over total responsibility for every aspect of IT operation from infrastructure design, to installation, trouble-shooting and corrective and preventive maintenance. This service is cost effective because companies only pay for the services they use and do not need to worry about a shortage of or too many IT personnel when their business grows or demand shrinks. In partnership with an affiliated company, we also launched the E-procurement Service, to help SMEs reduce operating expenses. This online purchasing system provides an accurate, fast and transparent way to purchase goods, which is easy to monitor and reduces paperwork. To meet the need for workforces to be increasingly mobile, TelecomAsia also developed a range of fixed line, data, Internet and IT services to enable SME staff to work and communicate while on the move. With TA easy Click Internet access has never been easier or more affordable. High-speed Broadband Internet linkage, utilizing ADSL technology, is always available and is just a 02-900-0000 phone call away. No special Internet kit is required, download transmission speeds are 18 times faster than with a dial-up modem and telephone calls can be made or received at the same time as surfing the 霉Net没.

Report 2003 16 Annual TelecomAsia Corporation Public Company Limited

çWhether it be through services that provide greater connectivity, improve staff productivity or increase customer satisfaction, To meet the need for workforces to be increasingly mobile, TelecomAsia TelecomAsia is committed to helping SMEs grow revenue, developed a range of fixed line, data, Internet and IT services in 2003 to enable reduce expenses and enhance convenience.é SME staff to work and communicate while on the move.

We also enhanced our Broadband market leadership in 2003 by launching hi-speed Internet, a bundled high-speed Broadband Internet service, which provides download speeds of 256 Kbps (kilobits per second) to one Mbps (megabits per second), via a self-install modem. The TA WiFi service, which was made available in June 2003, provides wireless Internet access at designated BMA ùhot spotsû. This will increasingly enable SME staff to easily access business information while enjoying a restaurant lunch, attending a conference, or waiting for a business meeting, thereby increasing productivity. During the year we installed WiFi into the Queen Sirikit National Convention Centre, providing 10,000 square meters of conference, exhibition and seminar space with wireless communications for use by visitors. Our WiFi technology was also installed in Fortune Townûs IT mall and was used to support media covering the October Asia Pacific Economic Co-operation Leaders meeting in Bangkok. Other innovative TA wireless solutions launched in 2003 include PCT Next, which provides wireless Internet access from a PC, notebook or PDA at a speed of 32-64 Kbps, the TA iFax application and TA Smart Box. TA iFax enables the sending or receiving of documents, without a facsimile machine via the Internet, using wireless or wired devices. TA Smart Box can be used as a phone, PCT, facsimile, credit card reader, or for accessing the Internet from anywhere in the BMA. During the year we also harnessed the power of Broadband technology to open up convenient high-speed training channels for SME employees. With the launch of TA E-Learning, an online self-study and training service, staff from any business can now keep up-to-date with the latest industry and professional developments. Voice communications are at the core of all business relationships and in 2003 we continued to develop products and services to make it easier to receive important calls anytime, from anywhere. Our new TA Smart One product - a wireless phone - can be installed quickly and easily without the need for cabling, for instant voice access. With TA Super Cordless calls are automatically transferred anywhere in the BMA. A voice mailbox and an alert function are also included to ensure busy people do not miss their messages. Whether it be through services that provide greater connectivity, improve staff productivity or increase customer satisfaction, TelecomAsia is committed to helping SMEs grow revenue, reduce expenses and enhance convenience. In 2004 we will maintain our focus and continue working closely with SMEs to develop new ICT solutions that enhance competitiveness and are a catalyst for business growth.

Annual Report 2003 TelecomAsia Corporation Public Company Limited 17

Corporate Solutions for a global marketplace

Report 2003 18 Annual TelecomAsia Corporation Public Company Limited

hai companies will face increased competition at home and in the global marketplace as a raft of bilateral trade agreements come on-stream over the next decade. Changes to the regulatory environment combined with rapidly evolving communications technologies are also putting pressure on companies to become more flexible and proactive. At the same time the convergence of technology and the worldwide move to integrated communications networks is opening up exciting new ways of doing business and reaching out to customers. Winners in this dynamic environment will be companies with the ability to quickly adapt, embrace advanced communications solutions and anticipate changing customer needs, while carefully managing costs.

Our Vision TelecomAsiaûs vision for companies in Thailand is for them to have permanent access to a wide range of communication channels through a ùmega pipeû, which delivers voice, data and multimedia services direct to the company door. We want to deliver the communications solutions that companies need to succeed through these channels by being innovative and retaining the highest quality staff. As part of this strategy we recruited some of Thailandûs top ICT experts in 2003 to form our ICT Managed Services team. The creation of this team is part of TelecomAsiaûs commitment to helping companies realize their business goals through communications solutions with the right scope, created at the right price and the right time. The ICT Managed Services team provides consultancy and ongoing management services, and can design and build communications networks and systems, and voice and non-voice applications. Companies enjoy a single point of contact with the team, and through it can harness the latest ICT developments to support business processes, strengthen their competitive position and improve customer service levels. Clients are provided with customized, integrated solutions in three key ùManaged Serviceû areas - ùManaged Voiceû, ùManaged Dataû and ùManaged Solutionsû. Annual Report 2003 TelecomAsia Corporation Public Company Limited 19

çCommunication systems play a vital role in the competitiveness of our business. We need the best communications experts to help us maintain our edge. Thatûs why we chose TelecomAsia.é --Khun Amorn Kitinartintranee, Chief of Operation Committee, National Finance Plc

Managed Voice The convergence of voice, data, wireline and wireless technologies is providing new, more cost effective ways to manage voice communications, which are at the heart of any companyûs business relationships. In 2003, TelecomAsia started to work with a number of companies to migrate their old generation PABX systems to IP- based phone systems. Our ùManaged Voiceû service relieves the stress of managing multiple stand-alone branch office systems, by providing a single network for voice and data. It is also an essential first step for companies wanting to take advantage of the next communications wave - Unified Messaging.

Report 2003 20 Annual TelecomAsia Corporation Public Company Limited

çHaving reliable and efficient information and telecommunication systems are important factors in the success of the EASY BUY business. We trust the expertise of TelecomAsia and the support it provides.é --Khun Chatchai Lertbuntanawong, Senior IT Director, Siam A&C Co.,Ltd.

Managed Data TelecomAsiaûs Network Manager service gives corporate clients the security of knowing that all their data needs are in the hands of professionals. As a leader in data system technology, TelecomAsia assists companies at all stages of development of their ICT network, from design, configuration and implementation, to ongoing network monitoring, management, and performance review. In 2003, TelecomAsia continued to build on its position as a market leader in Broadband, refining its ùManaged Dataû products and services to meet market demand for more speed, convenience and ùalways onû connections.

Managed Solutions TelecomAsia is well-equipped to provide integrated ùmanagedû voice, data and multimedia solutions, for a wide range of situations, whether it be for a one-off event, for outsourcing of key business functions, or the design, building and management of network infrastructure for a mega-project. These ùManaged Solutionsû are developed using best practice models and more than 12 years successful business development experience. Clients receive a high level of service, based on agreed performance measures, with around-the-clock advanced fault monitoring and back up via the companyûs Intelligent Network Management System. Customer relationship management is a key business function, and in 2003 TelecomAsia opened its world-class ContactAsia call center. ContactAsia, which meets ISO 9001:2001 standards, offers companies three key services - customer care, sales and marketing, and processing and administrative management.

Looking Ahead Fast, effective, affordable communications are todayûs business lifeline. In 2004, TelecomAsia will build on its managed service approach for corporate clients and focus on system integration for major development projects in the private and public sector. TelecomAsia is committed to working with Thailandûs corporate sector to ensure companies have the optimum systems to meet their needs today, with the flexibility and scalability to meet future demands.

Annual Report 2003 TelecomAsia Corporation Public Company Limited 21

Building a knowledge-based Society

Report 2003 22 Annual TelecomAsia Corporation Public Company Limited

The company also expanded its Internet for a Knowledge-Based Society program, which now connects more than 270 schools under the Bangkok Metropolitan Administrationûs Education Department to resources they never had before. TelecomAsia is committed to bringing the benefits of communications technology to Thailandûs young people. For 10 years we have supported programs that equip students and their teachers with the skills they need to play an active role in the future prosperity of the nation. In 2003, we deepened our commitment to developing a knowledge-based society by extending community education programs to 15,000 teachers and students throughout the country. The large range of community activities include increasing environmental awareness through photo competitions, science experiments and field trips. The company also expanded its, çInternet for a Knowledge-Based Societyé program, which now connects more than 270 schools under the Bangkok Metropolitan Administrationûs Education Department to resources they never had before. TelecomAsia believes if young people have access to the latest information from around the world via the Internet they will be empowered to explore new boundaries and improve their lives. This in turn will enable them to make valued contributions for the benefit of the country. The highly successful çTA Classroomé projects, which take education outside the four walls of a traditional classroom, continued to motivate thousands of children to learn about science, nature, culture and ICT. During the year we also worked closely with the Teachers Club to develop programs and activities to encourage excellence in student teaching. In 2004, TelecomAsia will continue to build on these activities and strengthen our links with communities with the aim of providing new opportunities for teachers and students to become part of tomorrowûs knowledge-based society.

Annual Report 2003 TelecomAsia Corporation Public Company Limited 23

Independent Directors Education

Honorary Master Degree of Economics Thammasat University

Experience 1998-Present ë Independent Director TelecomAsia Corporation Public Company Limited Present ë Chairman Eastern Seaboard Industrial Estate (Rayong) Company Limited ë Chairman Advanced Agro Public Company Limited ë Chairman of the Executive Board Beer Thai (1991) Public Company Limited ë Vice Chairman and Chairman of the Executive Board Siam Food Products Public Company Limited ë Vice Chairman General Tobacco Company Limited ë Vice Chairman Berli Jucker Public Company Limited ë Executive Director Com-link Company Limited

Mr. Narong Srisa-an Independent Director

Report 2003 24 Annual TelecomAsia Corporation Public Company Limited

Education

ë ë ë ë

Master Degree of Laws Master Degree of Arts Bachelor of Laws English Barrister

Harvard University, U.S.A. University of Cambridge, London University of Cambridge, London Grayûs Inn Association

Experience

1998-Present ë Independent Director and Chairman of the Audit Committee TelecomAsia Corporation Public Company Limited ë Chairman K Line (Thailand) Company Limited and its subsidiaries 1991-1992 ë Permanent Secretary of the Ministry of Foreign Affairs 1988 ë Ambassador Extraordinary and Plenipotentiary of the United States of America 1984 ë Ambassador Extraordinary and Plenipotentiary of Belgium and the European Community 1981 ë Ambassador Extraordinary and Plenipotentiary of Canada 1979 ë Director, General of Department of Economic Affairs

Mr. Vitthya Vejjajiva Independent Director and Chairman of the Audit Committee Education

ë Doctorate of Engineering ë Bachelor of Engineering

University of London, England University of London, England

Experience

1999- Present ë Independent Director and Member of the Audit Committee TelecomAsia Corporation Public Company limited 1999- Present ë President The Telecommunications Association of Thailand 2000-2001 ë Chairman The Aeronautical Radio of Thailand Limited 1997-2001 ë Director The Press Council of Thailand 1998-2000 ë Independent Director and Member of the Audit Committee PTT Exploration and Production Public Company limited

Dr. Kosol Petchsuwan Independent Director and Member of the Audit Committee Education

ë Fellow of the Association of Chartered Certified Accountants, England. ë Programme for Management Development Harvard Business School (U.S.A.). ë Marketing Management Programme Stanford University, Graduate School of Business (U.S.A.).

Experience

1999-Present ë Independent Director and Member of the Audit Committee TelecomAsia Corporation Public Company Limited Present ë Director and Member of Nomination and Remuneration Committee Bangkok Bank Public Company Limited 2000-2001 ë Executive Chairman TISCO Finance Public Company Limited 1994-1997 ë Executive Chairman Thai Wah Group of Companies 1992-1994 ë Managing Director The East Asiatic Company (Thailand) Limited Consult-General of Denmark for Bangkok

Mr. Joti Bhokavanij Independent Director and Member of the Audit Committee Annual Report 2003 TelecomAsia Corporation Public Company Limited 25

TelecomAsia

Report 2003 26 Annual TelecomAsia Corporation Public Company Limited

Corporate Governance

Compliance Report 2003 Good corporate governance has long been an integral part of the Companyûs business philosophy. Over the years, the Company has progressively increased efforts to share information and raise transparency of the TelecomAsia Group. Now in its fifth year, this annual corporate governance report has become a tradition of which the Board members and every employee of the Company can be proud.

1. POLICY ON CORPORATE GOVERNANCE. [PRINCIPLE 1] In 2003, the Company accelerated its course towards responsible and value-oriented corporate management. Executives participated actively in programs led by international leaders in value-based management. The principles instilled through these programs are now being sewn into the fabric of the way business is conducted within the TelecomAsia Group. Already in its second year of implementation, the Companyûs Corporate Governance Guidelines (the çGuidelinesé) was developed by a working group comprised of members of the Board and executive management. It is based on internationally recognized codes of best practice.

The Guidelines cover: ë ë ë ë ë ë ë ë ë

DUTIES AND RESPONSIBILITIES OF THE BOARD OF DIRECTORS COMPOSITION AND SELECTION OF THE BOARD OF DIRECTORS BOARD STRUCTURE AND PROCEDURES BOARD LEADERSHIP BOARD RELATIONSHIP TO MANAGEMENT MEETING PROCEDURES COMMITTEES OF THE BOARD OF DIRECTORS GENERAL COMMITTEE MATTERS POLICY REGARDING RELATED PARTY TRANSACTIONS AND CODE OF CONDUCT

2. RIGHTS AND EQUITABLE TREATMENT OF SHAREHOLDERS AND OF VARIOUS GROUPS OF STAKEHOLDERS. [PRINCIPLES 2, 3, 4, 7, 11 AND 15] As with previous years, the majority of the common stock of the Company continues to be held by the ten largest common shareholders. Nevertheless, the Board and the Annual Report 2003 TelecomAsia Corporation Public Company Limited 27

Company recognize that, being a publicly listed company, the shareholder base remains numerous and diverse. In respect to this diversity, the Company is committed to fostering an open dialogue with the financial community and ensuring fair and equal treatment of all shareholders. With respect to financial information, the Company has raised transparency and enabled comparability with major competitors by preparing financial statements in accordance with the International Accounting Standards (IAS). Great importance is also placed on making all material information available to all interested parties at the same time. The financial community is kept informed about major financial events through press releases and quarterly bulletins and on the corporate website. The Investor Relations Department strives to publish all key financial information in English and Thai, and make such information accessible to all via the Internet. In addition to detailed information about the TelecomAsia Group and corporate governance, such as the Guidelines, Board Committee Charters and the Insider Trading Policy & Internal Controls, the website also offers requlatory filings, reports, press releases, webcasts, presentations and transcripts of General Meetings, analyst conferences and other events of interest to investors.

These are some of the building blocks for fair and equitable treatment of the Companyûs shareholders: ë allocating not less than four (4) Board seats to independent persons; ë holding all shareholder meetings, there having been one general and one extraordinary in 2003, within Bangkok; ë providing written proxy materials to shareholders sufficiently prior to each meeting to enable careful consideration of the agenda matters; ë allowing shareholders or their proxy an opportunity to speak and ask questions of Directors and management at shareholder meetings; ë scheduling all Board of Directors meetings at the final Board meeting of the prior year and providing written notice of every meeting in accordance with all applicable rules and regulations; ë posting material financial, management and operational information, including information required by law, on the Companyûs publicly accessible website; ë chartering the Independent Committee to add an additional tier of scrutiny to matters that may give rise to conflicts of interest or favor any particular interest group; and ë utilizing independent advisors to give opinions and provide expertise on matters of material concern. In November 2003 the Company was recognized for its fairness and transparency efforts, having received the Disclosure Report Award 2003 for Excellence in Information Disclosure from the Securities and Exchange Commission of Thailand. The Companyûs employees, customers, suppliers and other vendors, creditors and competitors, as well as the Government and the local community have always been recognized as key stakeholders in the Company. Last year represented an important milestone for the Company when the Board approved and the Company implemented a Code of Conduct. The Code of Conduct is a blueprint by which to instill appropriate regard Report 2003 28 Annual TelecomAsia Corporation Public Company Limited

for the interests of all stakeholders of the Company. The Code of Conduct is a moral guideline for the Companyûs employees, encompassing both business and personal ethics within the workplace. The Company has always been committed to enriching the well being of Thai society. In addition to increasing quality of life through communications, the Company endeavors to make direct social contributions to the communities of Thailand. Education and cultureoriented programs, such as the following, have life-long effects on youths who participate in the programs. TelecomAsiaûs Nature Classroom, TelecomAsiaûs Arts and Culture Classroom, and TelecomAsiaûs Science Classroom are programs which aim to foster self-improvement and are designed to help students gain knowledge and insight from the classrooms, adding valuable and enriching experiences to their lives. Pirab Noi invites students studying mass communications in Thailandûs universities to participate in the production of high quality content, while also promoting responsibility and ethics in the area of communications/journalism. Further information about community projects including the following can be found at the Social Contributions page of the Companyûs website.

3. LEADERSHIP AND VISION. [PRINCIPLES 5, 8, 9 AND 10]

○

Although global events made travel a challenge for many directors, four Board meetings were convened during 2003 and each standing committee met regularly in order to attend to business at hand. Attendance at the Board meetings is reflected in the accompanying table.

Attendance / Number of Meetings (times)

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Srisa-an Vejjajiva Petchsuwan Bhokavanij Chearavanont Jiaravanon Taulananda Souvannakitti Asvanund Chearavanont Chearavanont Jiaravanon Rakphongphairoj Sanphasitvong Heims Tuengeler Stadler Klocke Link Lam

○

Mr. Narong Mr. Vitthya Dr. Kosol Mr. Joti Mr. Dhanin Mr. Sumet Dr. Ajva Mr. Chaleo Mr. Athueck Mr. Supachai Mr. Soopakij Mr. Chatchaval Mr. Vichaow Mr. Umroong Mr. Heinrich Mr. Klaus Mr. Claus Mr. Andreas Mr. Harald Dr. Lee G.

4/4 4/4 4/4 4/4 2/4 0/4* 4/4 4/4 4/4 4/4 1/4 3/4 3/4 4/4 3/4 3/4 3/4 4/4 4/4 2/2**

○

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

○

Directors

*Overseas Business **Be appointed on 24th April 2003

Annual Report 2003 TelecomAsia Corporation Public Company Limited 29

The Company has always sought to ensure that there is an appropriate number of directors to fairly represent each interest group, whether the group consists of large or minority shareholders, of creditors or of employees. The Board is composed of 20 members who are diverse in their professional background and nationalities. Selection is based upon experience, wisdom, integrity and an understanding of telecommunications technologies and the industry as a whole. Non-executives directors remain a majority of the Board, keeping the balance of power with non-executives and ensuring credible oversight of management. The Chairman of the Board is a non-executive director. Compensation of top executives and the Board is recommended by the Compensation and Nominating Committee (which utilizes the services of an independent advisor in performing this function) and approved by the entire Board. Remuneration consists of a fixed salary and, when deemed appropriate, a variable component. The variable component is linked to individual and corporate performance. The Companyûs shareholders have approved the remuneration presently paid to Board members. Key members of executive management have also been provided, with approval of the Companyûs shareholders given at the 2000, 2002 and 2003 Annual General Shareholders Meetings, stock options as a key component of their compensation in order to link their compensation to the performance of the Company and to establish a long term performance incentive. In 2003 Hewitt Associates, a consulting firm specializing in human capital management, completed its mandate to assess the Companyûs remuneration principles and policies on executive compensation, particularly within Thailandûs telecommunications industry. The Hewitt Associates assessment confirmed that the structure of the Companyûs remuneration plan is both solidly grounded and appropriate for the present market.

4. RISK MANAGEMENT AND OVERSIGHT. [PRINCIPLES 12, 13, 14 AND 15] Risk is managed at both the Board and the management levels, in several complementary ways. The Company keeps an open working dialogue with Marsh UK Ltd., which is the insurance advisor to the Companyûs secured creditors. In addition, each year the Company sits with its insurance broker to develop and evaluate a comprehensive and secure insurance package. In the fourth quarter of 2003 the Company selected two of the top global insurance brokers to competitively design a secure and a cost-effective insurance package for the Company and to market the same to top regional and international insurance companies. The Board has four very active standing committees, which bear much of the responsibility for risk management and oversight: (a) the Independent Audit Committee; (b) the Finance Committee; (c) the Independent Committee; and (d) the Compensation and Nominating Committee. Beginning in 2002 and continuing into 2003 the Independent Audit Committee utilized the expertise of PricewaterhouseCoopers Risk Management Services Limited to increase the effectiveness of the internal audit function of the Company and to improve internal controls throughout the Company. Each committee regularly provided periodic detailed reports on its activities to the entire Board, within the scope of the charter, which specifies its role and responsibilities. Report 2003 30 Annual TelecomAsia Corporation Public Company Limited

The addition of several newly hired senior executives to the Group Management Committee (GMC) brought valuable new perspectives to this body which consists of the Company没s most senior executive management, the Chief Financial Officer, the Internal Audit Department, and the Group General Counsel. The GMC is a weekly forum where usually tough questions are asked and where major projects are thoroughly vetted. Management没s activities are regularly reported to the Board by the President and, if suitably material, described in the Management没s Discussion and Analysis included in the latter part of this Annual Report. At all times, Board members have direct access to members of executive management to discuss any business-related matter.

5. CONFLICTS OF INTERESTS. [PRINCIPLES 1, 6 AND 7] The Board, management and employees are reminded regularly to avoid situations, which may involve conflict of interest. In addition to government regulations, the Guidelines and the Code of Conduct address situations when there may be a conflict of interest and are resources for resolving such conflicts of interest. Of course, the Independent Committee retains its oversight responsibility over any Board matter involving a related party transaction or a corporate opportunity, as well as all matters which are covered by the Stock Exchange of Thailand没s Rules and Procedures and Disclosure of Connected Transactions of Listed Companies. The Company has its own complementary standards for transactions with related entities, which are stated in the Policy Regarding Related Party Transactions. Situations such as trading on insider information and having a personal relationship in matters involving the Company are explained and explored in detail in the Code of Conduct that every employee is required to read and to acknowledge.

Annual Report 2003 TelecomAsia Corporation Public Company Limited 31

Company Background

and Major Developments TelecomAsia Corporation Public Company Limited (the çCompanyé) was established on 13 November, 1990, initially under the name of CP Telecommunications Company Limited to undertake the Build Transfer Operate (BTO) concession from the Telephone Organization of Thailand (now TOT Corporation PLC or çTOTé). This was to construct, install and jointly operate a 2.6 million fixed telephone lines expansion in the Bangkok Metropolitan Area (the çBMAé), which includes Bangkok, Nonthaburi, Samutprakarn and Pathumthani) for a period of 25 years. The Company must also provide maintenance of the network of 2.6 million lines throughout the term of the agreement. In addition to the original fixed line concession with the TOT, the Company has been granted approval to expand a range of valued-added services for its fixed line subscribers. These include Public Phone Service, Personal Communication Telephone Service (çPCTé), Data Network Service, Multimedia Services and Broadband, and Internet, including Contents and Applications. The Company has also invested in Pay Television and the Mobile Phone Business. The Company subsequently registered as a public company limited with registration no. Bor Mor Jor 82 on 11th February 1993 and listed on the Stock Exchange of Thailand in December 1993 with the security symbol çTAé. Currently CP Group is the major shareholder with approximately 44% shareholding.

Key developments in operations and management Key Developments before 2003 November 1990 August 1991

December 1991 July 1992

Company established with registered capital of Baht 1,000 million. Entered into the BTO concession with the TOT to build, install, jointly operate and maintain a 2 million fixed telephone lines in the Bangkok Metropolitan Area (BMA) for a period of 25 years. Telecom Holding Company Limited established to invest in telecommunications projects. Fifteen percent shareholding in the Company acquired by Nynex Network System (Thailand) Company Limited.

Report 2003 32 Annual TelecomAsia Corporation Public Company Limited

December 1993 March 1995 September 1995 May 1996 August 1996 January 1997 May 1998

November 1999 March 2000

August 2000 November 2000 February 2001 April 2001 July 2001

September 2001

October 2001

December 2001 March 2002

Company listed on the Stock Exchange of Thailand with registered capital of Baht 22,230 million. Start of cable TV service of UTV Cable Network Company Limited (UTV), one of the Companyûs affiliates. Company received approval for additional 600,000 fixed lines expansion in the BMA. Company gained approval to provide value-added services, such as digital network services and TA Connex. The Company gained approval to provide PCT service. The Company received approval to provide a public telephone service in the BMA. UTV and International Broadcasting Corporation PLC (IBC) merged to become a leading cable TV service provider under the name of United Broadcasting Corporation PLC (UBC). Official start of PCT service. Debt restructuring successfully completed with a principle term that . . Wiederaufbau (KfW), a major foreign creditor, Kreditanstalt fur subscribed 702 million preference shares totaling USD 150 million, equal to 24% of total shares of the Company after the capital increase. Start of Click TA service, an alternative Internet service that allows customers to log on for up to 2 hours. çTA 1234é service, an economical rate for long distance calls launched. Prepayment of loans of Baht 532 million from cash surplus. Start of prepaid PCT service under the name çPCT Buddyé. High-speed data transmission services, including ADSL, Cable Modem and TA Megaport services launched. Prepayment of loan of Baht 368 million from cash surplus. Entered into a cross-currency swap agreement with KfW for repayment of loans of $US97 million in Baht to reduce foreign exchange risk. Invested 41% in shares of Bangkok Inter Teletech Co., Ltd (çBITCOé), which holds 99.81% of shares in TA Orange Company Limited (formerly known as CP Orange Company Limited) via a share swap transaction. TA Orange is a GSM 1800 cellular operator under a concession granted by the Communication Authority of Thailand (çCATé). Entered into a new Baht loan agreement of Baht 5 billion to repay US dollar-denominated debt to reduce foreign exchange risk. TA Orange, a 41% joint venture of TelecomAsia Corporation Public Company Limited launched its cellular service under the çOrangeé brand name. Annual Report 2003 TelecomAsia Corporation Public Company Limited 33

April 2002

July 2002

August 2002

September 2002

October 2002

Additional prepayment of loan of Baht 948 million from the Companyûs cash surplus. The Company gained approval to install and operate an additional 6,000 public phone sets, increasing the Companyûs capability to provide public phone service to 26,000 sets. Telecom Holding Company Limited and its subsidiaries entered into a Restructuring Agreement with its creditors. Further prepayment of loans of Baht 345 million from the Companyûs cash surplus. The Company signed a Memorandum Of Understanding with Thailandûs 10 leading providers of information, entertainment, healthcare, financial services and on-line games in order to jointly promote and develop fully integrated services for Thailandûs first Broadband Community. Approval granted by the Extraordinary General Shareholders Meeting No. 1/2545 to increase the registered capital of the Company from Baht 34,278 million to Baht 44,461 million by issuing 1,018 million new shares at a par value of Baht 10 each. The proceeds were used for investment in TA Orange and repayment of debts. Launch of a new business Broadband solution called çTA Metroneté, which is based on Fiber-to-Building technology. This technology provides transmission rates of 512 Kbps to 1 Gbps for each customer. Successfully placed Baht 18,465 million in new debentures, the largest offering of corporate debentures rated by TRIS and the second largest offering in Thai history. Prepayment of the Companyûs indebtedness in the amount of US Dollar 452 million or Baht 19,590 million, funded by the proceeds from Thai Baht Debentures of Baht 18, 465 million and Baht loan from IFC of Baht 1,125 million. Offered new ordinary shares to the existing shareholders. The number of total shares subscribed was 461,997,236 shares or 85.75% of the total shares offered to the existing shareholders. The Company registered the change in the Companyûs paid up capital from Baht 32,325 million to Baht 36,945 million. The proceeds from this rights offering of Baht 3,003 million, which came from the CP Group and other existing shareholders, was used for additional investment in TA Orange through Bangkok Inter Teletec Company Limited. The Companyûs holding stake in TA Orange increased from 41% to 44% after the transaction.

Report 2003 34 Annual TelecomAsia Corporation Public Company Limited

December 2002

Bought back Yen-denominated, long-term trade accounts worth Baht 3.6 billion (Yen 10.1 billion) at a 81.3% discount to their book value, representing a gain from the buy-back of Yen-denominated notes of approximately Baht 3.1 billion in the Companyûs fourth quater 2002 results.

Key developments in 2003 Operations January 2003

February 2003

April 2003

July 2003

October 2003

November 2003

Business Line March 2003

Organizational structure changed to help the Company transform into a customer-centric communication solutions provider. Top executives appointed to take responsibility for the three core customer segments - Corporate, SMEs, and Home/Consumer. Placed Baht 3,319 million in new debentures on February 18. The proceeds were used to repay all remaining US dollar-denominated debt of $78 million. An increase in registered capital to Baht 43,892.28 million (up from Baht 38,897.79 million) was approved by shareholders at the Annual General Meeting. An Allotment of 499.45 million new shares with par value of 10 Baht each was reserved, including 450 million shares for private placement, 19.86 million shares for the ESOP and 29.59 million shares for offering to the IFC. Nynex Network System (Thailand), one of the Companyûs major shareholders, sold all its 369,500,126 TelecomAsia (TA) shares (or 10.001 percent) to Golden Tower Trading Ltd. (a representative from CP Group) and Mission Gain Investments Ltd, which made the CP Group the largest TA shareholder with 45.03 percent. The July 17 sale was in line with Verizon Communication Inc.ûs policy to focus on US investments and had no effect on the Companyûs operations. Signed a new Baht 21,419 million loan with local banks and financial institutions to refinance all existing Baht loans, resulting in an approximately Baht 200 million a year reduction in interest expense and greater operational flexibility. Decision made to change the Companyûs name to True Corporation Plc. at Extraordinary General Shareholders Meeting No. 1/2003. The name change, which is in line with the Companyûs strategy to become a customer-centric provider of voice and non-voice communications solutions, will take effect after the new name is registered at the Ministry of Commerce. TA easy Click, a post-paid Internet service for fixed line customers launched by Asianet Corporation, a Company subsidiary. Customers are charged for actual time used. Monthly service charges are Annual Report 2003 TelecomAsia Corporation Public Company Limited 35

April 2003

June 2003

July 2003

August 2003

September 2003

October 2003

December 2003

consolidated into the fixed line statement. Launched PCT Wireless Group call service. This post-paid service allows for unlimited calls among group members using a special four digit number and is designed for business customers. Asianet Corporation takes a 70 percent shareholding in True Internet Data Center Company Ltd (True IDC). Other shareholders include DACOM Corporation and Korean Internet Data Center (a DACOM subsidiary). True IDC plans to provide an Internet Data Center in Thailand and began operation in 2004. Launched Ă§TA Caller IDĂŠ, an additional fixed line service that shows incoming call numbers through Caller ID phone. Launched TA WiFi, a wireless Broadband service and signed contract with the Queen Sirikit National Convention Center to install first WiFi facility. Launched hi-speed Internet solution that bundles Broadband and Internet Access for customer convenience. The service can provide Internet access from 128 Kbps to 8 Mbps. Also launched TA Station, a public high-speed Internet kiosk. Launched PCT Next service. It provides wireless Internet access at the stable speed of 32 Kbps via a PCT Next Data Card that can be connected to a PDA and Notebook computer. Launched Billing Solution, which consolidates fixed line and TA easy Click statements into one bill for customers who use both services. Reduced tariff for domestic long-distance calls from September 1 to December 31 as part of a joint promotion with TOT and TT&T. The promotion offered two packages, which reduced long-distance domestic call and mobile phone charges nationwide to as little as Bt 3 per minute. After the promotion was launched the ICT Ministry approved a flexible tariff promotion under which charges should not be higher than those provided by the packages. Launched another three TA easy Click services, including the TA easy Ragnarok online game and the TA easy Mail and TA easy Entrance applications. PCT provider Asia Wireless Communication joined forces with KDDI Japan (parent company of KDDI-Pocket, the biggest PHS phone system provider in Japan) to enable international roaming between the Pocket PHS system and PCT. This allowed subscribers in Bangkok and Japan to use the service. Reduced high-speed Internet charges to as low as Baht 550 per month for transmission speed of 256 Kbps. Also offered special price TA

Report 2003 36 Annual TelecomAsia Corporation Public Company Limited

Cable Modem service to cover the Chiang Mai, Khon Kaen, Korat and Hat Yai provinces. Expanded into on-line game business by signing contract with Korean company Triglow Picture to be the sole provider of Priston Tale in Thailand. This was a milestone of the Company as it signaled its move to become a content and application aggregator for home solutions consumers. Opened new subsidiary True Digital Entertainment, which is 99.99 percent owned by Asianet Corporation to operate on-line game business.

Annual Report 2003 TelecomAsia Corporation Public Company Limited 37

Revenues Breakdown

○

○ ○

○

○ ○ ○ ○ ○ ○

○

○○

○

○ ○ ○

○○

○

○ ○

○

15,618

○

○ ○ ○ ○ ○

3,072

○

23.6%

○

6,096

Includes Fault Reporting and Dropwiring, Public Phone and Audiotext

Report 2003 38 Annual TelecomAsia Corporation Public Company Limited

14.9%

○ ○ ○ ○

894

○

○ ○

3.7%

4.3%

○ ○ ○ ○ ○ ○

○

503

2.4%

○ ○ ○ ○ ○ ○

154

○

○ ○

0.8%

○ ○ ○ ○

○ ○

○ ○ ○

395 20,636

○

○ ○ ○

4.7% 100%

○

○ ○

1,203 25,775

○

○ ○ ○ ○

3.9% 100%

○

○ ○ ○

○

198

○

1.7%

○

○ ○

○

4.7%

○

1,199

○

4.2%

○

○ ○

○

954

○

3.9%

○

○ ○

○

○ ○ ○ ○ ○ ○ ○ ○ ○

25.9%

○

Source: The Company

75.7%

○

62.5%

○

16,125

○

60.4%

○

○ ○

○

○ ○

○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○

○ ○ ○ ○ ○ ○ ○ ○

○

1. Fixed line and Value Added Service1 TelecomAsia Corporation Public Company Limited Revenues 16,893 2. Personal Communication Telephone (PCT) and Cellular (TA Orange) Asia Wireless Communication Co., Ltd. 99.99% Wire & Wireless Co., Ltd. 87.50% TA Orange Co., Ltd. 43.86% Revenues 7,228 3. Multimedia Network and Broadband Asia Multimedia Co., Ltd. 90.45% Revenues 1,097 4. Data Service TelecomAsia Corporation Public Company Limited Asia Multimedia Co., Ltd. 90.45% Revenues 1,183 5. Internet Asia Infonet Co., Ltd. 65.00% Asianet Corporation Co., Ltd. 99.99% Revenues 471 6. Other Business W7 Rental Services Co., Ltd. 99.99% Nilubon Co., Ltd. 99.99% Wire & Wireless Co., Ltd. 87.50% Other Companies Revenues 1,078 Total Revenues 27,950

○

○○

○

○○

○ ○ ○○

○

○ ○ ○

○

○○ ○

31 December 2001 Baht Million %

○

31 December 2002 Baht Million % ○

○

○ ○

○

Percentage of 31 December Shares Held by 2003 the Company Baht Million % ○

○ ○

○

Business Group / Operation by

○

by Business Group

1.9% 100%

○

Corporate

Information The Company was established on 13th November 1990 initially under the name of CP Telecommunication Co., Ltd. with a registered capital of Baht 1,000 million to undertake Thailandûs major telecommunication infrastructures project and registered as a public company limited with registration no. Bor Mor Jor 82 on 11th February 1993. As at 31st December 2003, the Companyûs registered capital was Baht 43,892,281,600, consisting of 3,689,579,611 common shares with a par value of Baht 10 per share and 699,648,549 preference shares with a par value of Baht 10 per share, of which Baht 36,944,972,140 is paid-up capital, comprising of 2,994,848,665 common shares with a par value of Baht 10 per share and 699,648,549 preference shares with a par value of Baht 10 per share. The Companyûs head office is located at: 18 Telecom Tower Ratchadaphisek Road Huai Khwang, Bangkok 10310 Telephone: (662) 643-1111 Fax: (662) 643-1651 Website: www.telecomasia.co.th

○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

USD 1

○ ○ ○

THB 300 million

○ ○

○

○ ○

Holding Company

○

○ ○ ○ ○ ○ ○ ○ ○

Holding Company

○ ○ ○ ○

THB 900 million

○

Holding Company

○

Rental service

○

THB 13,339 million

○

Holding Company

○

Type of Business Paid-up Capital

THB 75 million

○

○ ○ ○ ○ ○ ○ ○ ○

○

18 Telecom Tower Ratchadaphisek Road Huai Khwang, Bangkok 10310 18 Telecom Tower Ratchadaphisek Road Huai Khwang, Bangkok 10310 Nilubon Company Limited (BVI) P.O. Box 71, Craigmuir Chambers, Road Town, Tortola, British Virgin Islands Telecom International 18 Telecom Tower Ratchadaphisek Road Company Limited Huai Khwang, Bangkok 10310 K.I.N. (Thailand) Company Limited 18 Telecom Tower Ratchadaphisek Road Huai Khwang, Bangkok 10310 ○

Telecom Holding Company Limited Nilubon Company Limited

Address

○

Company Name

○

The Companyûs subsidiaries, associates companies and other investments are as follows:

Annual Report 2003 TelecomAsia Corporation Public Company Limited 39

○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○

THB 50 million

THB 10 million THB 5 million HK$ 117 million

○ ○

○

THB 25 million

HK$ 78

○ ○

HK$ 78

○

Communication

○

NON-POTS and THB 6,127 million multimedia services DBS system THB 100 million operator Construction THB 100 million and distributor Internet service THB 15 million provider Telecom equipment THB 24 million manufacturer Pay Television THB 7,470.56 million Mobile RMB 292 million Telecommunication equipment manufacturer ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○

THB 50 million

○

Communication

○

○ ○

THB 174 million

○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Construction and distributor Investment in property Construction and distributor Holding Company

○

THB 5,287 million

○

○ ○ ○

○

Training service

○

Rental services

○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○

Report 2003 40 Annual TelecomAsia Corporation Public Company Limited

USD 1

○

○ ○ ○ ○

Audio text service

○

○ ○

○

PCT operator

○

Holding Company

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

18 Telecom Tower Ratchadaphisek Road Huai Khwang, Bangkok 10310 18 Telecom Tower Ratchadaphisek Road Huai Khwang, Bangkok 10310 18 Telecom Tower Ratchadaphisek Road Huai Khwang, Bangkok 10310 18 Telecom Tower Ratchadaphisek Road Huai Khwang, Bangkok 10310 18 Telecom Tower Ratchadaphisek Road Huai Khwang, Bangkok 10310 3/F, Hing Yip Commercial Centre, 272 Des Voeux Road C. Hong Kong P.O. Box 71, Craigmuir Chambers, Road Town, Tortola, British Virgin Islands P.O. Box 71, Craigmuir Chambers, Road Town, Tortola, British Virgin Islands 18 Telecom Tower Ratchadaphisek Road Huai Khwang, Bangkok 10310 18 Telecom Tower Ratchadaphisek Road Huai Khwang, Bangkok 10310 54 W&W Bld., Pattanakarn 20 Suanluang Bangkok. 1 Fortune Town Bldg., 17/F Ratchadaphisek Road Din-Dang, Bangkok 18 Telecom Tower Ratchadaphisek Road Huai Khwang, Bangkok 10310 118/1 Tipco Building Rama 6 Road, Phayathai, Bangkok 140 Daping Zhengjie Chongqing, PR China

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Type of Business Paid-up Capital

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P.O. Box 957 Offshore Incorporations Road Town, Tortola, British Virgin Islands 18 Telecom Tower Ratchadaphisek Road Huai Khwang, Bangkok 10310 18 Telecom Tower Ratchadaphisek Road Huai Khwang, Bangkok 10310

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Telecom Equipment Manufacturing Company Limited United Broadcasting Corporation Public Company Limited Chongqing Communication Equipment Company Limited

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TA Orient Telecom Investment Company Limited Telecom International China Company Limited Telecom Asia (China) Company Limited Asia Multimedia Company Limited Asia DBS Public Company Limited Wire & Wireless Company Limited Asia Infonet Company Limited

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U-Net Company Limited

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K.I.N. (Thailand) Company Limited (BVI) Asia Wireless Communication Company Limited Asianet Corporation Company Limited (Formerly named Interactive Media Services Company Limited) W7 Rental Services Company Limited Telecom Training and Development Company Limited Tele Engineering and Services Company Limited Yai Kaew Company Limited

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Address

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Company Name

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THB 7.5 million

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THB 21,000 million THB 22,100 million

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1,800 MHz cellular telephone operator

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Holding Company

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Telecommunication

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Central Service THB 197.55 Bureau for clearing million electronic payment transactions Modification, repair THB 5.6 million and maintenance services Internet Data Center THB 115.02 and other million Internet-related services Online game service THB 73.5 million provider ○ ○ ○ ○ ○

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1 Fortune Tower, 25th Floor Ratchadaphisek Road Din Dang, Bangkok

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18 Telecom Tower 14th Floor Ratchadaphisek Road Huai Khwang, Bangkok 10310

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THB 343 million

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102,15th Floor, Na Ranong Road, Klongtoey, Bangkok

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True Internet Data Center Company Limited (Formerly named TA Internet Data Center Company Limited) True Digital Entertainment Company Limited

Telecommunication equipment manufacturer

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518/5 Maneeya Center Building, 6th Floor, Ploenchit Road, Lum Pinee, Pathumwan, Bangkok 986 U Chu Liang Building, 14th Floor, Unit D 1, Rama IV Road, Silom, Bangrak, Bangkok 986 U Chu Liang Building, 4th - 5th Floors, 11-15th Floors, Rama IV Road, Silom, Bangrak, Bangkok 283 Silom Road, Bangrak, Bangkok

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Asia Remanufacturing Industries Company Limited

Type of Business Paid-up Capital

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159 Sermmit Tower 2nd 24th Floor Asok Sukumvit 21 Klongtoeynua Wattana Bangkok.

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Thai Smart Card Company Limited

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NEC Corporation (Thailand) Company Limited (Formerly named NEC Communication Systems (Thailand) Company Limited) N.T.U. (Thailand) Company Limited Bangkok Inter Teletech Company Limited TA Orange Company Limited

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Address

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Company Name

Annual Report 2003 TelecomAsia Corporation Public Company Limited 41

References Registrar

Auditor

Debenture Registrar/ Debentureholders没 Representative

Legal Counsel:

: Thailand Securities Depository Co., Ltd. 62 Stock Exchange of Thailand Building, 4, 6, 7/F Ratchadaphisek Road, Khet Klong Toey Bangkok 10110 Telephone : (662) 229-2800, (662) 654-5599 Fax: (662) 359-1262-63 : Mr. Somchai Jinnovart (CPA Registration No. 3271) and/ or Mr. Kajornkiet Aroonpirodkul (CPA Registration No. 3445) and/or Mrs. Nattaporn Phan-Udom (CPA Registration No. 3430) PriceWaterhouseCoopers ABAS Ltd. 15th Floor, Bangkok City Tower 179/74-80 South Sathorn South Sathorn Road, Khet Sathorn Bangkok 10120 Telephone: (662) 286-9999, (662) 344-1000 Fax: (662) 286-5050 : DBS Thai Danu Bank Public Company Limited 393 Silom Road, Bangrak, Bangkok 10500 Telephone: (662) 233-9160-79 (662) 230-5000 Fax: (662) 236-7939 Minter Ellison (Thailand) Ltd. 17th Floor Tonson Tower Building 900 Ploenchit Road, Lumpini, Pathumwan Bangkok 10330 (Thailand) Telephone: (662) 689-3333 Fax: (662) 689-3300

Report 2003 42 Annual TelecomAsia Corporation Public Company Limited

Investment Structure

As at 31st December 2003

TelecomAsia Corporation Public Company Limited ○

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43.86% Bangkok Inter Teletech Co.,Ltd.

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99.99%

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Telecom Holding Co.,Ltd.

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10.76% Thai Smart Card Company Limited

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99.99% Asianet Corporation Limited

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99.86%

TA Orange Co.,Ltd. ○

Asia Infonet Co.,Ltd.

100% K.I.N. (Thailand) Co., Ltd. (BVI)

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99.99% Asia Wireless Communication Co.,Ltd. W7 Rental Services Limited Nilubon Co.,Ltd.

99.99%

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99.99%

Nilubon Co., Ltd. (BVI)

99.99%

K.I.N. (Thailand) Co.,Ltd.

99.99%

Telecom Training and Development Co.,Ltd.

99.99% Tele Engineering and Services Co.,Ltd. 99.99%

Yai Kaew Co.,Ltd.

99.99%

U-Net Co.,Ltd.

99.99% Telecom International Co.,Ltd.

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100%

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99.99% Telecom International China Co., Ltd.

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99.99% Telecom Asia (China) Co., Ltd. TA Orient Telecom Investment Co., Ltd.

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99.99%

Chongqing Communication Equipment Co., Ltd.

90.45%

Asia Multimedia Co.,Ltd.

17.83% United Broadcasting Corporation Public Company Limited Asia DBS Public Company 89.99% Limited 87.50%

Wire & Wireless Co., Ltd.

20.00% Asia Remanufacturing Industries Co.,Ltd. Telecom Equipment 59.99% Manufacturing Co., Ltd. Broadcasting Corporation 22.78% United Public Company Limited 16.67%

N.T.U. (Thailand) Limited

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38.21%

NEC Corporation (Thailand) Co., Ltd. 9.62% (Formerl y NEC Communication System (Thailand) Co., Ltd.)

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True Internet Data Center Co.,Ltd. (formerly name TA Internet Data Center) Entertainment 99.99% True Digital Co.,Ltd. 70.00%

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65.00%

Other (Percentage of holding not more than 10)

Annual Report 2003 TelecomAsia Corporation Public Company Limited 43

Risk Factors Risk Factors Related to Operations The relationship with the TOT and CAT creates a number of business risks that are outside TelecomAsia没s ability to control. TelecomAsia (The Company) operates a number of telecommunications-related businesses under concessions granted by the TOT Corporation Public Company Limited (TOT) and the CAT Telecom Public Company Limited (CAT). The TOT and CAT oversee the Company's compliance with the terms of each concession agreement. Differences of interpretation with TOT and CAT over the material terms of a concession agreement could impair the Company's ability to conduct business or otherwise deny the Company its rights. For example, we are in dispute with TOT over TOT没s launch of low-cost domestic long distance tariffs under Ytel 1234. The Company has brought the dispute to the Administrative Court, which has yet to make a ruling. The Company currently depends on the operation of a concession-based wireline telephone network for a significant portion of its operating revenues. The concession expires in 2017. The Company's fixed line concession could be cancelled by TOT if the Company violates the law, a court orders the Company's assets to be absolutely received in a bankruptcy lawsuit, or the Company willfully and continually breaches a concession agreement in any material respect. The Company believes it has rights granted under its concession agreement. However, if the Company没s concession is cancelled by the ruling of the Court or the Arbitrator, the Company, in certain circumstances, would no longer be able to conduct a substantial portion of its business. Under the revenue-sharing provisions of the concession, TOT collects and retains a portion of the Company's revenues and can withhold or delay the forwarding of these payments to the Company to offset obligations it believes the Company owes it. As a provider of wireline services in the Bangkok Metropolitan Area, TOT is simultaneously the Company's regulator and a direct competitor. At times, TOT没s interests may be different from the Company's. As a result, TOT is able to affect the Company's ability to provide services to customers. For example, TOT could deny or put on hold the Company's requests for launches of new services. Report 2003 44 Annual TelecomAsia Corporation Public Company Limited

The pending liberalization of the Thai telecommunications industry exposes us to uncertainties. The Thai telecommunications industry is heavily regulated and supervised by the Thai Government. To fulfill its commitment to the World Trade Organization, the Government has announced plans to liberalize the industry before 2006. The ICT Ministry has developed several initiatives for industry liberalization, which could affect the Company's operations. These include preparation work for an interconnection regime, concession conversion, and the listing of TOT and CAT on the Stock Exchange of Thailand. Recently the ICT Ministry approved the trial launch of reduced tariff promotions for fixed line businesses, with revenue sharing based on actual revenue received from customers. The Ministry has also set up a subcommittee to oversee the concession conversion process. The Private operators can decide whether to convert their concessions. The conversion can be carried out in different ways by operators, depending on conditions set in their concession agreements. If other telecommunication operators negotiate better terms than the Company for their concession conversions, the Company could be placed at a competitive disadvantage, which could affect its operations. The Government is in the process of selecting members of the National Telecommunications Committee (NTC), a new independent regulator. There is no clear regulatory role for TOT and the ICT Ministry until the NTC is set up. The new regulatory body may implement policies that increase our operating cost and/or increase competition in sectors in which we operate.

Increased competition in Thailand has had, and may continue to have, an adverse effect on the Company's operational results and financial condition. The telecommunications sector in Thailand is rapidly evolving. The Company faces increasing competition from cellular operators and TOT, which is preparing itself for a more competitive environment. The Company's revenue per user for its fixed line business has been affected by competition from cellular service providers, which have been offering lower tariffs through a variety of promotional packages and services. This has resulted in a traffic migration from fixed line to cellular calls. The Company expects competition to remain intense in future. However, we expect the migration of traffic from fixed line to cellular providers to slow as fixed line tariffs are lowered and can better compete with cellular rates. The telecommunications industry is subject to rapid technological change. Emerging and future technological changes may adversely affect the viability or competitiveness of the Company's businesses. Furthermore, changing market demand may require the Company to adopt new technologies that could render many of its current technologies less competitive or obsolete. Substantial capital expenditure and access to related or enabling technologies may be required to integrate new and existing technology into the Company's network infrastructure.

Annual Report 2003 TelecomAsia Corporation Public Company Limited 45

Risk Related to Financial Situation The Company's operations are restricted by various financial agreements. Agreements covering long-term debt and restructured debt contain conditions and limitations on the Company's operations, such as the issuance of equity and debt instruments, the sale and acquisition of assets, and dividend payments. These limitations could force the Company to pursue less than optimal business strategies or forego business arrangements that could be financially advantageous to the Company and its shareholders.

Repayment of The Company's indebtedness could be accelerated beyond its control. The Company's restructuring agreements permit its creditors to accelerate or seek immediate repayment of secured debt if: ĂŤ TOT materially breaches its concession agreement with the Company ĂŤ Principal shareholders are unable to direct the Company's management. In the event of a default under the financial agreements with lenders, TOT would allow the Company to assign its rights and obligations under the concession to WTA (Thailand) Co., Ltd, a special purpose vehicle in which shares are held for the benefit of TA secured creditors. In such a situation, the Company would have no further rights under the concession, but would continue to be jointly liable for all of the assigned obligations.

The Company is subject to exchange and interest rate fluctuations Any further depreciation of the Thai Baht against foreign currencies, principally Japanese Yen, would increase the Company's outstanding foreign debt and related interest expenses, as well as the amount of Baht revenue required to meet capital expenditure plans. The Company's total foreign debts as of December 31, 2003 amounted to Bt 13 billion, excluding those of TA Orange, which have been fully hedged. This accounted for 21 percent of total outstanding debt as at the same date. Most of the Company's foreign debt is denominated in Japanese Yen and is subject to a long-term maturity period between 2014 and 2017. The Company is not required to pay the principal and interest for 37 percent of this debt, which is in the form of Deferred Payment Notes, until it becomes due in 2014. Therefore, the impact of exchange rate fluctuations before 2014 would be recorded as non-cash accounting transaction and would not impact the Company's current debt servicing capacity. The Company made Bt 3 billion in capital expenditure in 2003, approximately 10 percent of which was denominated in foreign currencies, excluding TA Orange expenditure. The Company expects capital expenditure of the same amount in 2004, with some of this to be denominated in foreign currencies. As at December 31, 2003, approximately Bt 22 billion or 35 percent of debt, excluding TA OrangeĂťs, was subject to floating interest rates. Therefore, an increase in interest rates would incur additional costs to the Company.

Report 2003 46 Annual TelecomAsia Corporation Public Company Limited

Shareholders ○ ○ ○ ○ ○ ○ ○ ○

9.25

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3.19

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2.14

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1.40

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1.13

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1.08 0.94

30.87

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34.82

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10. CHASE NOMINEES LIMITED 1

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40.00

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9. HSBC (SINGAPORE) NOMINEES PTE LTD

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41.67

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8. MISSION GAIN INVESTMENTS LIMITED

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51.87

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7. THAI NVDR CO., LTD

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78.90

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6. GOLDMAN SACHS INTERNATIONAL

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117.87

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5. CLEARSTREAM NOMINEES LTD

9.69

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341.65

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4. MORGAN STANLEY & CO INTERNATIONAL LIMITED

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357.99

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2. THAI TRUST FUND3 .. 3. KREDITANSTALT FUR WIEDERAUFBAU (çKfWé)

44.45

0.84

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1,642.33

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1. CP Group2

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No. of Shares % of Total (Million Shares) Issued Shares

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NAME

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TelecomAsia Corporation Public Company Limited Major Shareholders1 (as of 29th December 2003)

Including common shares and preferred shares. There are Charoen Pokphand Group Co., Ltd. and its related persons, namely, Bangkok Telecom Holding Company Limited, Charoen Pokphand Foods Public Company Limited, Bangkok Produce Merchandising Public Company Limited, Bangkok Agro-Industrial Products Public Company Limited, Charoen Pokphand Northeastern Public Company Limited, Kasetphand Industry Company Limited, Charoen Pokphand Enterprise Company Limited, Unique Network Company Limited, Wide Broad Cast Company Limited, C.P. Interfood (Thailand) Company Limited, Star Marketing Company Limited, Advance Pharma Company Limited and Golden Tower Trading Ltd. 3 Shares, in Thai Trust Fund, are preferred shares of KfW, which have no right to vote. 2

Annual Report 2003 TelecomAsia Corporation Public Company Limited 47

Management Management Structure of the Company consists of the Board of Directors, the Committees and the executive officers, details of which are as follows:

Board of Directors

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As of 31st December 2003, the Board of Directors comprises of 20 directors who are (a) Executive Directors (b) Non-Executive Directors including directors representing the creditors, and (c) Independent Directors. The Board of Directors of the Company is as follows:

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Independent Director Independent Director and Chairman of the Audit Committee 3. Dr. Kosol Petchsuwan Independent Director and Member of the Audit Committee 4. Mr. Joti Bhokavanij Independent Director and Member of the Audit Committee 5. Mr. Dhanin Chearavanont Chairman 6. Mr. Sumet Jiaravanon Vice Chairman 7. Dr. Ajva Taulananda Vice Chairman 8. Mr. Chaleo Souvannakitti Vice Chairman 9. Mr. Athueck Asvanund Vice Chairman and Group General Counsel 10. Mr. Supachai Chearavanont Director, President and Chief Executive Officer 11. Mr. Soopakij Chearavanont Director 12. Mr. Chatchaval Jiaravanon Director and Managing Director-Group Investment 13. Mr. Vichaow Rakphongphairoj Director, Managing Director and Chief Operating Officer 14. Mr. Umroong Sanphasitvong Director 15. Mr. Heinrich Heims Director 16. Mr. Klaus Tuengeler Director 17. Mr. Claus Stadler Director 18. Mr. Andreas Klocke Director 19. Mr. Harald Link Director 20. Dr. Lee G. Lam Director ○

Srisa-an Vejjajiva

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1. Mr. Narong 2. Mr. Vitthya

Remark :

Additional information related to the Companyûs Board of Directors is as follows: a) History of Offence : none b) Debt owed to the Company or its Subsidiaries : none c) Material Connected Transactions : none

Report 2003 48 Annual TelecomAsia Corporation Public Company Limited

Authority and responsibility of the Board of Directors The Board of Directors is granted the authority and duty to manage the Company in compliance with the objectives and articles of association of the Company and the resolutions of the shareholders meetings. With regard to the management of the Company, the Board of Directors has authority to make any decision related to the Companyûs regular operation except for the matter required the approval of the shareholders meeting as specified by law. In addition, the Board of Directors may grant the authorization to one director or more or any other person to perform any acts on its behalf, however, any decision on major operations such as major investment and major procurement of loan, the management team shall propose the said transactions to the Board of Directors for approval.

Authorized Directors Mr.Supachai Chearavanont or Mr. Vichaow Rakphongphairoj jointly sign with Mr. Athueck Asvanund or Mr. Soopakij Chearavanont or Mr. Chatchaval Jiaravanon to with the Companyûs seal affixed, execute any act, thing or legal action whatsoever on the Companyûs behalf.

Appointment of Directors The Compensation and Nominating Committee assists the Board of Directors in reviewing and proposing the compensation and nominating directors of the Company prior to proposing to the Companyûs shareholders meeting for final approval. With regard to the right of shareholders to appoint directors, each shareholder shall appoint the directors by a majority vote. All Shareholders have the rights to appoint directors. Each shareholder shall have one right to vote per one share and shall appoint one director or more, provided that he cannot divide his votes to any person to any extent.

Audit Committee

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Vejjajiva Petchsuwan Bhokavanij

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

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1. Mr. Vitthya 2. Dr. Kosol 3. Mr. Joti

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As of 31st December 2003, the Audit Committee of the Company consists of 3 persons as follows:

The scope of duty and responsibility of the Audit Committee is as follows: 1. To review the Companyûs financial reports to ensure accuracy and adequate information for public disclosure; 2. To ensure the appropriateness and effectiveness of internal control system and internal auditing system of the Company; 3. To consider and propose the appointment and remuneration of an external auditor of the Company; Annual Report 2003 TelecomAsia Corporation Public Company Limited 49

4. To regularly review the practice of the Company to ensure the compliance with the regulations of the Securities and Exchange Act, Rules and Regulations of the Stock Exchange of Thailand and related law and regulations; 5. To review the disclosure of information of the Company to ensure the accuracy and adequacy of said information in case that there is a connected transaction that may lead to a conflict of interest; 6. To prepare the Audit Committee Report on the Corporate Governance with the approval of the Chairman of the Committee appeared therein to be disclosed in the annual report of the Company; and 7. To perform any other act as required by law or as delegated by the Board of Directors.

Independent Committee

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Srisa-an Bhokavanij Tuengeler

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Independent Director Independent Director KfW-nominated Director (with the alternate of Mr. Andreas Klocke or Mr. Claus Stadler) CP-nominated Director CP-nominated Director

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4. Mr. Supachai Chearavanont 5. Mr. Athueck Asvanund

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1. Mr. Narong 2. Mr. Joti 3. Mr. Klaus

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The Independent Committee is responsible for reviewing and monitoring the entering into any connected transactions, which may involve a conflict of interest with the Company. The Committee consists of the following members:

In the case of any major shareholder having a conflict of interest, Directors nominated by the said shareholder will abstain from the Independent Committee Meeting.

Compensation and Nominating Committee The Compensation and Nominating Committee is responsible for determining the compensation and considering the nomination of the directors of the Company. The committee consists of the following members: 1. 2. 3. 4.

Mr. Dhanin Mr. Heinrich Mr. Soopakij Mr. Umroong

Chearavanont Heims Chearavanont Sanphasitvong

Report 2003 50 Annual TelecomAsia Corporation Public Company Limited

Finance Committee The Finance Committee assists the Company in reviewing and monitoring the financial management of the Company. The committee consists of the following members:

1. Dr. Ajva 2. Mr. Chaleo 3. Mr. Heinrich

Taulananda Souvannakitti Heims

(alternates being Mr. Klaus Tuengeler or Mr. Andreas Klocke)

4. Mr. Umroong Sanphasitvong

Corporate Governance Committee Corporate Governance Committee is responsible for setting policy on Corporate Governance of the Company. The Committee consists of the following members: 1. 2. 3. 4. 5. 6.

Dr. Ajva Mr. Vitthya Mr. Claus Mr. Athueck Mr. Supachai Mr. William E.

Taulanada Vejjajiva Stadler Asvanund Chearavanont Harris

Executive Officers

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As of 31st December 2003, the executive officers of the Company are as follows:

Director, President and Chief Executive Officer 2. Mr. Vichaow Rakphongphairoj Director, Managing Director and Chief Operating Officer 3. Mr. Chatchaval Jiaravanon Director and Managing Director-Group Investment 4. Mr. Athueck Asvanund Vice Chairman, Group General Counsel and Acting Company Secretary 5. Mr. William E. Harris Chief Financial Officer 6. Mr. Chitchai Nantapat Managing Director Home / Consumer Solution & Highspeed Access 7. Mr. Adhiruth Thothaveesansuk Managing Director Office / SME Solution & Wireless Access 8. Mr. Songtham Phianpattanawit Managing Director Corporate Solution, Wholesale & Data ○

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1. Mr. Supachai Chearavanont

Remark:

1. Executive Officers mean Directors, President or persons with managerial authority who are among the top four ranking individuals in the Company, after the President, and all other persons who occupy a position equivalent to such a top four ranking individual. 2. Additional information related to the Companyûs Executive Officers is as follows: a) History of Offence : none b) Debt owed to the Company or its Subsidiaries : none c) Material Connected Transactions : none

Annual Report 2003 TelecomAsia Corporation Public Company Limited 51

Authority and Responsibility of the President The President has the authority to supervise and carry on the Companyûs day-to-day business, and in case any matter/ transaction is important, the President will submit said matter/ transaction to the independent directors and/or the relevant Committee (such as the Finance Committee, the Compensation and Nominating Committee or the Independent Committee) and/or the Board of Directors, as the case may be, to approve said matter/ transaction. In addition, the President has no authority to approve any matter/ transaction that he or the person who may have a conflict of interest or any other form of conflict, which the Company or the Companyûs subsidiaries have or propose to enter into, with the Company or the Companyûs subsidiaries. In such case, such matter/ transaction shall have to be approved by the independent directors and/or the relevant Committee and/or the Board of Directors, as the case may be.

Remuneration for the Companyûs Directors and the Executive Officers (1) Remuneration of the Directors The 24 committee members are remunerated Baht 36.90 million for the Year 2003 (from January to December, which are the meeting allowance). (Remark: During the Year 2003, four directors who are Ms. Gabriele Gunia, Mr. Daniel C. Petri, Mr. Stephen G. Parker and Mr. John J. Lack resigned as members of the Board of Directors of the Company. Dr. Lee G. Lam was appointed to be an additional director).

(2) Remuneration of the Executive Officers The 8 executives at the top level received remuneration totaling Baht 86.23 million for the Year 2003 (from January to December), which included Baht 76.86 million for salary, Baht 5.72 million for bonus and Baht 3.65 million for provident fund.

(3) Other Compensation (3.1) Employee Stock Option Plan 2003 (3.2) Employee Stock Option Plan 2002 (3.3) Employee Stock Option Plan 2000 ë

Employee Stock Option Plan 2003 The Annual General Shareholders Meeting of the Company for the year 2003 held on 11th April 2003 has approved the issuance and the offer of nontransferable warrants to purchase the Companyûs ordinary shares to certain Directors and employees at executive level totaling not exceeding 35 persons. Summary details are as follows:

Total Outstanding Number of Warrants issued Date of Issuance Maturity Date of Expiry Exercise Period

19,862,729 units

: : :

17th June 2003 5 years from the issuance date 16th June 2008 Each Warrant Holder received 3 separate warrant certificates. Each certificate represented 1/3 of the whole amount of warrants allotted and shall be exercisable for subscribing ordinary shares as follows:

Report 2003 52 Annual TelecomAsia Corporation Public Company Limited

Exercise Ratio

The 1st Certificate: Warrant Holders shall be starting exercising from 17 th June 2004 until its expiration. nd The 2 Certificate: Warrant Holders shall be starting exercising from 17 th June 2005 until itsexpiration. rd The 3 Certificate: Warrant Holders shall be starting exercising from 17 th June 2006 until its expiration. One unit of warrants entitles to purchase one ordinary share at Baht 5.20

毛

Employee Stock Option Plan 2002 The Annual General Shareholders Meeting of the Company for the year 2002 held on 12th April 2002 has approved the issuance and the offer of non-transferable warrants to purchase the Company没s ordinary shares to certain Directors and employees at executive level totaling not exceeding 35 persons. Summary details are as follows:

Total Outstanding Number of Warrants issued Date of Issuance Maturity Date of Expiry Exercise Period

37,131,597 units

: : : :

Exercise Ratio

14th June 2002 5 years from the issuance date 13th June 2007 Each Warrant Holder received 3 separate warrant certificates. Each certificate represented 1/3 of the whole amount of warrants allotted and shall be exercisable for subscribing ordinary shares as follows: The 1st Certificate: Warrant Holders shall be starting exercising from 14 th June 2003 until its expiration. nd The 2 Certificate: Warrant Holders shall be starting exercising from 14th June 2004 until its expiration. rd The 3 Certificate: Warrant Holders shall be starting exercising from 14th June 2005 until its expiration One unit of warrants entitles to purchase one ordinary share at Baht 10.60

Annual Report 2003 TelecomAsia Corporation Public Company Limited 53

Employee Stock Option Plan 2000 The Annual General Shareholders Meeting of the Company for the year 2000 held on 27th April 2000 has approved the issuance and offer of non-transferable warrants to purchase the Companyûs ordinary shares to certain Directors and employees at executive level totaling not exceeding 35 persons. Summary details are as follows:

Total Outstanding Number of Warrants issued Date of Issuance Maturity Date of Expiry Exercise Period

36,995,000 units

: : : :

Exercise Ratio

9th June 2000 10 years from the issuance date 9th June 2010 (a) Warrant Type 1: Each Warrant Holder received 3 separate warrant certificates. Each certificate represented 1/3 of the whole amount of warrants allotted and is exercisable for subscribing ordinary shares starting from June 30, 2000, 2001 and 2002 respectively. (b) Warrant Type 2: Each Warrant Holder received 3 separate warrant certificates. Each certificate represented 1/3 of the whole amount of warrants allotted and is exercisable for subscribing ordinary shares starting from December 31, 2000, 2001 and 2002 respectively. One unit of warrants entitles to purchase one ordinary share at Baht 10.60

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○

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6.06 11.16 17.60 7.57 11.16 14.38 2.55

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

2,240,000 4,130,000 6,510,000 2,800,000 4,130,000 5,320,000 945,000

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4.05

○

○ ○

1,503,662

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

19.01 8.32 9.98 10.40 8.08

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

7,058,824 3,088,235 3,705,882 3,860,294 3,000,000

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4.28

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

18.61 8.14 9.77 10.18 6.53

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Report 2003 54 Annual TelecomAsia Corporation Public Company Limited

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850,404

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3,696,402 1,617,176 1,940,611 2,021,470 1,297,838

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Thothaveesansuk

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8. Mr. Adhiruth

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Taulananda Chearavanont Chearavanont Rakphongphairoj Jiaravanon Asvanund Harris

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1. Dr. Ajva 2. Mr. Soopakij 3. Mr. Supachai 4. Mr. Vichaow 5. Mr. Chatchaval 6. Mr. Athueck 7. Mr. William E.

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Warrants under ESOP 2000 No. % of warrants of project

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Warrants under ESOP 2002 No. % of warrants of project ○

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○ ○ ○ ○ ○

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Warrants under ESOP 2003 No. % of warrants of project ○

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Name

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Details of Warrant-holding under ESOP Plan

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Insider Trading Policy The Company is currently in compliance with applicable laws to monitor and prevent the personal use of confidential information of the Company by its management, including the use of said information for the purpose of insider trading. Material information which has not yet been disclosed will be kept confidential but will be disclosed only to the relevant senior management of the Company. The relevant senior management of the Company who shall access or receive said information are required to report their trading of shares in the Company pursuant to the Regulations of the Office of Securities and Exchange Commission Regarding Rules, Conditions, and Procedures Governing the Preparation and Disclosure of Reports on Securities Holdings, in order to prevent insider trading using internal information, and to ensure that the trading of shares by çinsidersé of the Company is transparent. In addition, the Company has been carrying on the comparative study of the insider trading policies of various foreign institutions to be applied as a guideline to enhance transparency and boost the confidence in the Company amongst the analyst and investor community.

Internal Controls After an assessment of the Companyûs internal controls with the Audit Committee, the Board of Directors has an opinion that the Companyûs internal controls are adequate and suitable. Moreover, the external auditor has an opinion that it did not encounter any matter involving internal controls and its operation which are considered to be material weaknesses that could have a material effect on the financial statements. The Board also emphasized the development of the Companyûs Corporate Governance in order to improve the internal controls within the Company on a continuing basis.

Personnel

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Work Group and Classification Management Service Area & Network Operation Marketing & Sales Information Technology Customer Services Finance & Accounting Supporting Total

○

As of 31st December 2003, the total number of employees is as follows: No. of Employee 63 2,243 395 361 700 218 259 4,239

Source : the Company

Annual Report 2003 TelecomAsia Corporation Public Company Limited 55

Remuneration for the Companyûs Employees Remuneration In 2003, the total remuneration for employees was approximately Baht 1,934 million which consists of wages, salaries, bonus, overtime compensation, commission, provident fund and others. (please see details in the note 26 to the financial statements)

Other Compensation & Benefits - Health Plans and Employee Welfare ë In-house clinic ë Annual Medical Check-up ë New Employeesû Medical Check-up ë Group Health Insurance ë Group Accident Insurance ë Group life Insurance - In case of death: Baht 30,000. - / Person ë Social Security Fund - Each of the Company and employees contributes 3% of monthly salary (If any employeeûs salary is more than Baht 15,000 a month, it was calculated only Baht 15,000 as the basic of funding). Said employee will gain special benefits from the Fund to have medical treatment at designated hospitals. - Paid Annual Leave In the case that the employee is unable to take annual leave, annual leave can be accumulated to the subsequent year subject to the approval of an authorized superior. ë Employees at the level of Vice President and upwards can take annual leave for 15 days and can accumulate remaining annual leave to the subsequent year, but can carry a balance of no more than 30 days. If the accumulated annual leave balance exceeds 30 days, the Company will compensate for the excess. ë Employees at the level lower than Vice President can take annual leave for 10 days and can accumulate remaining annual leave to the subsequent year, but can carry a balance of no more than 20 days. If the accumulated annual leave balance exceeds 20 days, the company will compensate for the excess. - Compensation ë Monthly Salary ë Annual Performance Pay: between 0-4 times of monthly salary, subject to the Companyûs performance and financial status. ë Retirement: the employee must be at the age of 60 years or early retirement by agreement of company and employee, severance pay will be paid accord to the labor law.

Employee Training and Development Employee Training and Development Policy To encourage all employees to develop their knowledge, skills and attitude to be able to perform their jobs effectively and to be more competent for career advancement, which assists the Company in achieving its corporate strategy and goals. At present, the Company provides employees with various training and development programs, such as Core Competency Program, Functional Competency Program, TA Core Business Program, etc. Report 2003 56 Annual TelecomAsia Corporation Public Company Limited

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1998-Present Independent Director TelecomAsia Corporation Public Company Limited Present Chairman Eastern Seaboard Industrial Estate (Rayong) Company Limited Chairman Advanced Agro Public Company Limited Chairman of the Executive Board Beer Thai (1991) Public Company Limited Vice Chairman and Chairman of the Executive Board Siam Food Products Public Company Limited Vice Chairman General Tobacco Company Limited Vice Chairman Berli Jucker Public Company Limited Executive Director Com-link Company Limited 1998-Present Independent Director and Chairman of the Audit Committee, TelecomAsia Corporation Public Company Limited Chairman K Line (Thailand) Company Limited and its subsidiaries 1991-1992 Permanent Secretary of the Ministry of Foreign Affairs 1988 Ambassador Extraordinary and Plenipotentiary of the United States of America 1984 Ambassador Extraordinary and Plenipotentiary of Belgium and the European Community 1981 Ambassador Extraordinary and Plenipotentiary of Canada 1979 Director General of Department of Economic Affairs

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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Experience

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Independent Director and Chairman of the Audit Committee

10,000 shares

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Mr. Vitthya Vejjajiva

Age TA Share Ownership (year) (31/12/03)

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Independent Director

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Mr. Narong Srisa-an

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Position

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Name

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DIRECTORSû INFORMATION (AS OF 31st DECEMBER 2003)

Annual Report 2003 TelecomAsia Corporation Public Company Limited 57

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*Authorized Signatory

Report 2003 58 Annual TelecomAsia Corporation Public Company Limited

Experience

1999-Present Independent Director and Member of the Audit Committee TelecomAsia Corporation Public Company Limited 1999-Present President The Telecommunications Association of Thailand 2000-2001 Chairman The Aeronautical Radio of Thailand Limited 1997-2001 Director The Press Council of Thailand 1998-2000 Independent Director and Member of the Audit Committee PTT Exploration and Production Public Company Limited 1999-Present Independent Director and Member of the Audit Committee TelecomAsia Corporation Public Company Limited Present Director and Member of Nomination and Remuneration Committee Bangkok Bank Public Company Limited 2000-2001 Executive Chairman TISCO Finance Public Company Limited 1994-1997 Executive Chairman Thai Wah Group of Companies 1992-1994 Managing Director The East Asiatic (Thailand) Public Company Limited Consult-General of Denmark for Bangkok 1989-Present Chairman TelecomAsia Corporation Public Company Limited Chairman and Chief Executive Officer Charoen Pokphand Group Company Limited and Chia Tai Group Company Limited Chairman Charoen Pokphand Foods Public Company Limited 150,000 shares 1993-Present Vice Chairman TelecomAsia Corporation Public Company Limited Executive Chairman Charoen Pokphand Group Company Limited

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Vice Chairman

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Mr. Sumet Jiaravanon

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Chairman

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Mr. Dhanin Chearavanont

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Independent Director and Member of the Audit Committee

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Mr. Joti Bhokavanij

Age TA Share Ownership (year) (31/12/03)

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○ ○ ○ ○

Independent Director and Member of the Audit Committee

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Dr. Kosol Petchsuwan

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Position

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Name

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Experience

1992-Present Vice Chairman TelecomAsia Corporation Public Company Limited Vice Chairman Charoen Pokphand Group Company Limited Chairman The Thai Chamber of Commerce and Board of Trade of Thailand 1993-1999 Director and President TelecomAsia Corporation Public Company Limited 1991-1992 Deputy Minister Ministry of Agriculture and Cooperatives 3,500,000 shares 1992-Present Vice Chairman TelecomAsia Corporation Public Company Limited Director Telecom Holding Company Limited 1997-Present Vice Chairman and Group General Counsel TelecomAsia Corporation Public Company Limited Director Telecom Holding Company Limited Director Asia Multimedia Company Limited Group General Counsel Charoen Pokphand Group Company Limited Director CP Seven Eleven Corporation Public Company Limited Director United Broadcasting Corporation Public Company Limited 1978-1997 Baker & McKenzie 1,240,000 shares 1999-Present Director, President and Chief Executive Officer TelecomAsia Corporation Public Company Limited 1992-1999 Director and Senior Executive Vice President TelecomAsia Corporation Public Company Limited

○

Director President and Chief Executive Officer

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Mr. Supachai Chearavanont*

Vice Chairman 52 and Group General Counsel

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Mr. Athueck Asvanund*

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Vice Chairman

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Mr. Chaleo Souvannakitti

Age TA Share Ownership (year) (31/12/03)

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○ ○ ○ ○

Vice Chairman

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Dr. Ajva Taulananda

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Position

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Name

*Authorized Signatory

Annual Report 2003 TelecomAsia Corporation Public Company Limited 59

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*Authorized Signatory

Report 2003 60 Annual TelecomAsia Corporation Public Company Limited

Experience

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Director and 41 Managing Director Group Investment

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Director

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Age TA Share Ownership (year) (31/12/03)

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Mr. Chatchaval Jiaravanon*

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Mr. Soopakij Chearavanont*

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Position

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Name

1992-Present Director TelecomAsia Corporation Public Company Limited 2000-Present Executive Chairman Telecom Holding Company Limited 1998-Present Chairman United Broadcasting Corporation Public Company Limited 1991-Present Chairman AT&T Network Technology (Thailand) Company Limited 1993-Present Director and Managing Director-Group Investment TelecomAsia Corporation Public Company Limited 2001-Present Director and Member of Audit Committee Ticon Industrial Connection Public Company Limited 2000-Present President and C.E.O. Telecom Holding Company Limited Independent Director Cal-Comp Electronics (Thailand) Public Company Limited 1998-Present Executive Chairman Cambodia Mobile Telephone Company Limited 1997-Present C.E.O. Asia Multimedia Company Limited Asianet Corporation Limited Asia Infonet Company Limited 1992-Present Director Thai Kodama Company Limited 1990-Present Director Metro Machinery Public Company Limited

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Director

Experience

2000-Present Director, Managing Director and Chief Operating Officer TelecomAsia Corporation Public Company Limited 1998-2000 E.V.P., Business & Enterprise TelecomAsia Corporation Public Company Limited 1997-1998 E.V.P., Central Operation & Information Technology TelecomAsia Corporation Public Company Limited 1996-1997 Region Director, Bangkok-Southeast Region TelecomAsia Corporation Public Company Limited 1995-1996 Region Director, Bangkok-West Region TelecomAsia Corporation Public Company Limited 384,000 shares 2001-Present Director TelecomAsia Corporation Public Company Limited Present Deputy Group CFO Charoen Pokphand Group Company Limited Director C.P. Seven Eleven Public Company Limited Director Vinythai Public Company Limited 2000-Present Director TelecomAsia Corporation Public Company Limited 1998-Present Senior Vice President Export and Project Finance . . Wiederaufbau Kreditanstalt fur 1978-1998 Export Finance Kreditanstalt fur Wiederaufbau 2000-Present Director TelecomAsia Corporation Public Company Limited Present First Vice President Export and Project Finance Telecommunications, Natural Resources . . Wiederaufbau Kreditanstalt fur 2000-Present Director TelecomAsia Corporation Public Company Limited Present Deputy General Counsel Head of the Legal Department (Frankfurt) . . Wiederaufbau Kreditanstalt fur

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Mr. Claus Stadler

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Director

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Mr. Klaus Tuengeler

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Director

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Mr. Heinrich Heims

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○○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Director

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Mr. Umroong Sanphasitvong

Age TA Share Ownership (year) (31/12/03)

Director 46 Managing Director and Chief Operating Officer

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Mr. Vichaow Rakphongphairoj*

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Position

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Name

Annual Report 2003 TelecomAsia Corporation Public Company Limited 61

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50,000 shares

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3,500 shares

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Director

Report 2003 62 Annual TelecomAsia Corporation Public Company Limited

Experience

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Dr. Lee G. Lam

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Director

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Mr. Harald Link

Age TA Share Ownership (year) (31/12/03)

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Director

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Mr. Andreas Klocke

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Position

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Name

2000-Present Director TelecomAsia Corporation Public Company Limited Present Head of KfWûs South-East Asia Regional office in Bangkok in Charge of KfW Affairs in Thailand and South- East Asia Region 2000-Present Director TelecomAsia Corporation Public Company Limited 1997-Present Managing Partner, B. Grimm & Co. R.O.P. 2003-Present Director TelecomAsia Corporation Public Company Limited Vice Chairman / President & CEO Chia Tai Enterprises International Limited 2001-2003 Managing Director BOC International Holdings Limited (çBOCIé) 1999-2001 Executive Director Singapore Technologies Telemedia 1998-1999 Partner-in-charge Heidrick & Struggles 1996-1998 President & CEO Millicom International Cellular Asia Pacific Operations 1993-1995 Managing Partner A.T. Kearney, Inc. 1989-1993 General Manager Cable & Wireless/Hongkong Telecom 1981-1989 Senior Executive Bell Canada

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Experience

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Age TA Share Ownership (year) (31/12/03)

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Director, 36 1,240,000 shares 1999-Present Director, President and President and Chief Executive Officer Chief Executive TelecomAsia Corporation Public Company Limited Officer 1992- 1999 Director and Senior Executive Vice President TelecomAsia Corporation Public Company Limited Mr. Vichaow Rakphongphairoj Director 46 2000-Present Director, Managing Director and Managing Director Chief Operating Officer and Chief TelecomAsia Corporation Public Company Limited Operating 1998-2000 E.V.P., Business & Enterprise Officer TelecomAsia Corporation Public Company Limited 1997-1998 E.V.P., Central Operation & Information Technology TelecomAsia Corporation Public Company Limited 1996-1997 Region Director, Bangkok-Southeast Region TelecomAsia Corporation Public Company Limited 1995-1996 Region Director, Bangkok-West Region TelecomAsia Corporation Public Company Limited Mr. Chatchaval Jiaravanon Director and 41 1993-Present Director and Managing Director Managing Director-Group Investment Group TelecomAsia Corporation Public Company Limited Investment 2001-Present Director and Member of Audit Committee Ticon Industrial Connection Public Company Limited 2000-Present President and C.E.O. Telecom Holding Company Limited Independent Director Cal-Comp Electronics (Thailand) Public Company Limited 1997-Present C.E.O., Asia Multimedia Company Limited Asianet Corporation Limited Asia Infonet Company Limited 1998-Present Executive Chairman Cambodia Mobile Telephone Company Limited 1992-Present Director Thai Kodama Company Limited 1990-Present Director Metro Machinery Public Company Limited ○

Mr. Supachai Chearavanont

Position

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Name

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EXECUTIVE OFFICERSû INFORMATION (AS OF 31st DECEMBER 2003)

Annual Report 2003 TelecomAsia Corporation Public Company Limited 63

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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1997-Present Vice Chairman and Group General counsel TelecomAsia Corporation Public Company Limited Director Telecom Holding Company Limited Director Asia Multimedia Company Limited Group General Counsel Charoen Pokphand Group Company Limited Director CP Seven Eleven Corporation Public Company Limited Director United Broadcasting Corporation Public Company Limited 1978-1997 Baker & McKenzie 100,000 shares 2001-Present Chief Financial Officer TelecomAsia Corporation Public Company Limited 1998-2000 Executive Vice President - Corporate Finance TelecomAsia Corporation Public Company Limited 1993-1998 Director Credit Policy, Verizon Communications, Philadelphia 2003-Present Managing Director, Office / SME Solution & Wireless Access TelecomAsia Corporation Public Company Limited Acting President Asia Wireless Communication Company Limited 2002 Chief Commercial Officer TA Orange Company Limited 2001 Executive Vice President TelecomAsia Corporation Public Company Limited 1998-2002 General Manager Wire & Wireless Company Limited 1998-2001 President Asia Wireless Communication

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Mr. Adhiruth Thothaveesansuk Managing Director 41 Office / SME Solution & Wireless Access

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Chief Financial Officer

Report 2003 64 Annual TelecomAsia Corporation Public Company Limited

Experience

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Mr. William E. Harris

Age TA Share Ownership (year) (31/12/03)

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Vice Chairman and Group General Counsel

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Mr. Athueck Asvanund

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Position

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Name

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Experience

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Age TA Share Ownership (year) (31/12/03)

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Present

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2001-2003

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2001-2002

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2000

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1998

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1997

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Present

1999-2003

1992-2000

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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Managing Director Home / Consumer Solution & Highspeed Access

1997-1999

Managing Director - Corporate Solution, Wholesales & Data TelecomAsia Corporation Public Company Limited Country General Manager / MD IBM Thailand Company Limited Chairman IBM Solution Delivery Company Limited Director IBM Storage Product Thailand Company Limited Director, Sales & Marketing IBM Thailand Company Limited Country Manager, System Sales IBM Thailand Company Limited Country Manager Finance & Administration and CFO IBM Thailand Company Limited Service Business Executive IBM Thailand Company Limited Managing Director-Home / Consumer Solution & Highspeed Access TelecomAsia Corporation Public Company Limited Executive Vice President Loxley Public Company Limited 2001-2002 President & CEO Hutchison CAT Wireless Multimedia Company Limited President & CEO Hutchison Telecommunications (Thailand) Company Limited First Senior Vice President Loxley Public Company Limited

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Mr. Chitchai Nantapat

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Mr. Songtham PhianpattanawitManaging Director 46 Corporate Solution, Wholesales & Data

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Position

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Name

Annual Report 2003 TelecomAsia Corporation Public Company Limited 65

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○ ○ ○ ○ ○ ○ ○

1 1

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Bangkok Inter Teletech Co., Ltd.

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Telecom Holding Co., Ltd. Telecom International Co., Ltd. Telecom Equipment Manufacturing Co., Ltd.

1 1 1

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1 1 1 1 1 1 1 1 1 1 1

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1 1 5 1 1 1 1 1 1 1

Report 2003 66 Annual TelecomAsia Corporation Public Company Limited

○ ○ ○ ○ ○ ○ ○ ○

1 1 1 1

○ ○ ○ ○ ○ ○ ○ ○

○

○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○

Telecom International Co., Ltd. Telecom Equipment Manufacturing Co., Ltd. U-Net Co., Ltd. Asianet Corporation Co., Ltd. (Formerly named Interactive Media Services Co., Ltd.) Asia DBS Public Company Limited Asia Infonet Co., Ltd. Asia Wireless Communication Co., Ltd. Asia Multimedia Co., Ltd.

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Mr. Soopakij Chearavanont

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○ ○ ○ ○ ○ ○ ○ ○ ○

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Telecom International Co., Ltd. Telecom Equipment Manufacturing Co., Ltd. Wire & Wireless Co., Ltd. U-Net Co., Ltd. Asianet Corporation Co., Ltd. (Formerly named Interactive Media Services Co., Ltd.) Asia DBS Public Co., Ltd. Asia Infonet Co., Ltd. Asia Wireless Communication Co., Ltd. Asia Multimedia Co., Ltd. Yai Kaew Co., Ltd.

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Mr. Chatchaval Jiaravanon

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○ ○ ○ ○ ○ ○ ○ ○ ○

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Telecom International Co., Ltd. Telecom Training and Development Co., Ltd. Telecom Equipment Manufacturing Co., Ltd. U-Net Co., Ltd. Asianet Corporation Co., Ltd. (Formerly named Interactive Media Services Co., Ltd.) Asia DBS Public Company Limited Asia Infonet Co., Ltd. Asia Wireless Communication Co., Ltd. Asia Multimedia Co., Ltd. Yai Kaew Co., Ltd. N.T.U. (Thailand) Co., Ltd.

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Dr. Ajva Taulananda

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Mr. Chaleo Souvannakitti

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Mr. Sumet Jiaravanon

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Telecom Holding Co., Ltd. Bangkok Inter Teletech Co., Ltd.

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Mr. Dhanin Chearavanont

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Change Outstanding in 2003 Share (s)

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○○

○

Company

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Director

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The Company Directorsû Shareholding in TAûs affiliates as of 31st December 2003 are as follows:

1 1 1 1

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○ ○

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Telecom Holding Co., Ltd.

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

1 1 1 1 480,000 1 1 1 1

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○ ○ ○ ○ ○ ○ ○

1 5 1 1

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480,000 -

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○ ○ ○ ○ ○ ○

Telecom Equipment Manufacturing Co., Ltd. Wire & Wireless Co., Ltd. U-Net Co., Ltd. Asianet Corporation Co., Ltd. (Formerly named Interactive Media Services Co., Ltd.) Asia DBS Public Company Limited Asia Infonet Co., Ltd. Asia Wireless Communication Co., Ltd. Asia Multimedia Co., Ltd. Telecom Equipment Manufacturing Co., Ltd Telecom International Co., Ltd. Telecom Equipment Manufacturing Co., Ltd. U-Net Co., Ltd. Asianet Corporation Co., Ltd. (Formerly named Interactive Media Services Co., Ltd.) Asia DBS Public Company Limited Asia Infonet Co., Ltd. Asia Wireless Communication Co., Ltd. Asia Multimedia Co., Ltd. K.I.N. (Thailand) Co., Ltd.

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Mr. Harald Link Mr. Vichoaw Rakphongphairoj

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-1

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1 Telecom Training and Development Co., Ltd. ○

Telecom International Co., Ltd.

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Mr. Supachai Chearavanont

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Change Outstanding in 2003 Share (s)

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○ ○○

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Company

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Director

1 1 1 1 1

Annual Report 2003 TelecomAsia Corporation Public Company Limited 67

Connected

Transactions During 2003, the Group carried out the transactions with subsidiaries, associates, joint ventures and related companies as disclosed in the Note 4, Note 9, Note 12, Note 17, Note 22, and Note 31 to financial statements for the year ended 31st December 2003.

Measures and Procedures for Approving the Entering into of Connected Transactions The Company has measures and procedures for approving the entering into of connected transactions in compliance with the Rules and Regulations of the office of Securities and Exchange Commission (çSECé) and the Stock Exchange of Thailand (çSETé), and the provisions of the Public Companies Act, i.e. related party transactions must obtain approval from the Independent Directors. If any related party transaction is deemed to be a connected transaction, said transaction must obtain approval from the Audit Committee, the Board of Directors and/or Shareholders Meeting as the case may be, according to the Regulation of the Stock Exchange of Thailand. Moreover, the Company must comply with the terms and conditions of the Common Terms Agreement First Amendment and Restatement Agreement dated 14th October 2003 which is the principal debt agreement executed between the Company and its Secured Creditors, and related agreements. The key terms and conditions in said Agreement and related agreements with regard to connected transactions specify that the Company shall not enter into any contract, agreement, or arrangement with any affiliates other than on armsû length open market terms. Apart from the foregoing obligation, the terms and conditions of the Shareholders Agreement executed with Kreditanstalt für Wiederaufbau dated 22nd December 1999 specify that the Company shall have to disclose the entering into any connected transactions of the major shareholders or its affiliates.

Policy for Future Connected Transactions In addition, in order to strictly comply with the rules and regulations of the SEC and the SET, the Company has applied said rules and regulations in implementing an internal guideline for connected transactions by undertaking a comparative study of the connected transactions guidelines from various foreign institutions to enhance transparency and create parallel understanding with foreign analysts and investors. With regard to future connected transactions, the Company anticipates that there will be connected transactions in the ordinary course of business of the Company with its affiliates and the Company shall proceed with such transactions in a transparent manner pursuant to the good corporate governance policy of the Company as well as all relevant regulations. Report 2003 68 Annual TelecomAsia Corporation Public Company Limited

Report

of the Audit Committee for the Year 2003 By virtue of a resolution of the Board of Directors of TelecomAsia Corporation Public Company Limited passed at its meeting No. 1/2546 held on 27th February 2003, the Audit Committee was reappointed to perform duties and discharge responsibilities under the charter for the Audit Committee. During the year 2003, the Audit Committee proceeded as follows: 1. held committee meetings, totalling 9 times in 2003 in order to discharge its functions as assigned by the Board of Directors. The management was invited to participate in some of the meetings to provide extra information in certain agendas. The Audit Committee reported its activities to the Board of Directors on a quarterly basis; 2. considered and proposed the appointment and remuneration of PriceWaterhouseCoopers ABAS Limited as the Company没s external auditor for the year 2004; 3. reviewed the quarterly, and annual financial reports of the Company and its subsidiaries to ensure correctness, reliability and adequacy of information disclosed, reflecting good corporate governance; 4. acknowledged the Audit Plan and external auditor没s findings and provided recommendations; 5. considered the internal audit plan under risk-based approach and the monthly, quarterly and annual results as well as submitted suggestions on actions to be taken by the management, and also on following up the progress of these actions; 6. regularly reviewed the Company没s and its subsidiaries没 practices relating to connected transactions to ensure compliance with the regulations of the Securities and Exchange Commission and the Stock Exchange of Thailand; 7. closely monitored the work progress of the Internal Auditing Department in order to enhance effectiveness of the internal audit function and continuously ensured that the Company has improved its internal controls system to enhance its efficiency and effectiveness, and ensure appropriate compliance with applicable regulatory requirements; In this connection, the Management, upon the recommendation of the Audit Committee, engaged PricewaterhouseCoopers Risk Assessment Services Limited to provide consulting services towards enhancing the effectiveness of the internal audit function of the Company. The Audit Committee closely monitored the progress of the consulting services project which was completed in the year 2003. The new risk-based audit approach will be implemented in accordance with the adopted 3-year audit plan which includes IT audit.

Mr. Vitthya Vejjajiva Chairman of the Audit Committee Annual Report 2003 TelecomAsia Corporation Public Company Limited 69

Management没s

Discussion and Analysis Overview TelecomAsia's full-year 2003 results show that our strategy of investing in high-growth business areas, while reducing costs and improving margin, is working. They indicate that if we maintain this strategy, become more customer-centric and continue to transform our operations under the new TRUE branding, we can expect further growth and reduced losses in the future. In 2003 our core wireline business generated strong free cash flows, providing a solid platform for servicing debt and investing in new high-growth business. Revenue from valued-added services rose 33.3 percent, while the Data, Internet and Broadband group of businesses continued to grow strongly, increasing revenue by 16.6 percent to Baht 2.8 billion. New Internet subscribers almost doubled, total Broadband subscribers increased by more than 200 percent and ADSL customers almost tripled during the year. As a whole, this business group contributed 12.1 percent to consolidated revenues (excluding TA Orange), up from 10.4 percent in 2002. Our revenues were stable at Baht 23 billion, (excluding TA Orange) as the increase in revenue from fixed line value-added services, Internet and Broadband helped to offset declines in our PCT and non-core business. However, we managed to increase EBITDA margin by 90 basis points to 52 percent (excluding TA Orange) through cost controls, as well as taking further steps to enhance our balance sheet. Consolidated revenues grew 8.4 percent to Baht 28 billion, including TA Orange's improved contribution of Baht 5.1 billion, up 74.4 percent on 2002. TA Orange reached EBITDA break-even for the first time in September 2003 and contributed Baht 107 million in the fourth quarter. As a result, consolidated EBITDA increased 18.8 percent to Baht 11.6 billion. Excluding TA Orange, EBITDA increased 1.4 percent to Baht 11.9 billion from the successful cost controls. However, the Company still incurred a net loss from ongoing operations of Baht 1.5 billion, excluding TA Orange and non-recurring items. This was higher than the 2002 net loss of Baht 446 million, mainly due to depreciation for new investments. In the year ahead we expect to make continue improvements in operations. With our imminent rebranding, our market leadership in new high growth areas and our status as an integrated provider of wireline and wireless communications solutions, we are in position to grow strongly. Report 2003 70 Annual TelecomAsia Corporation Public Company Limited

TA Orange reached EBITDA break-even point in September 2003, after 18 months of operation, and contributed a Baht 107 million to fourth quarter results. The cellular operator's subscribers grew by 488,762 or 36.6 percent to 1.8 million in 2003, a higher rate than the industry average of 26 percent. Despite reintroducing installation fees at the start of 2003 and accelerating the disconnection process for line reutilization, TelecomAsia maintained its 56 percent market share in the fixed line market in the BMA. In 2003 we expect single-digit growth in fixed line subscribers as demand from SMEs and large corporations and for second home lines for Internet-use increases. Starting on September 1, 2003, all operators launched a joint reduced-tariff promotion, as approved by the ICT Ministry. At the start of 2004, operators also gained approval to launch a six-month flexible tariff promotion, which uses the tariff for the first promotion as ceiling rates. This is seen as a first step in creating a more level playing field between mobile and fixed line operators, improving overall fixed line business competitiveness.

Consolidated Results of Operations The results of operations are discussed on a normalized basis without taking into account non-recurring items. We believe this enables a better overview of the Company's operating results and trends from period to period. All non-recurring items are disclosed in the consolidated profit and loss statement on an adjusted basis. The Company has recognized results from TA Orange based on a proportionate consolidation method, starting fourth quarter of 2001. In 2003, TA Orange's contribution had a material impact on the Company's consolidated results. The results, presented below, therefore, exclude TA Orange where appropriate, so that trends for core operations are clear. ĂŤ Consolidated revenues increased 8.4 percent in 2003 to Baht 28.0 billion, due mainly to a 74.4 percent increase in the proportionate revenue contribution from TA Orange (Baht 5.1 billion in 2003, compared with a Baht 2.9 billion contribution in 2002). Excluding TA Orange, revenues were stable at Baht 23.0 billion, as an increase in revenue from the wireline value-added, Broadband and Internet group of services offset a decline in revenue fromPCT, DDN and non-core business. Wireline revenue grew 4.8 percent to Baht 16.9 billion, principally from public telephone and other value-added services, while basic fixed line telephone revenue was stable at Baht 13.6 billion. Public telephone revenue grew 18.8 percent to Baht 2.1 billion. Data, Internet and Broadband group revenue (referred to as the DDN, Multimedia and Internet segments in the audited financial statements) grew by 16.6 percent to Baht 2.8 billion. This was derived mainly from a strong 138.0 percent growth in Internet revenue to Baht 471 million and 16.4 percent growth in multimedia revenue to Baht 1.1 billion, mainly from managed data network and Broadband services. DDN revenue declined slightly by 3.0 percent to Baht 1.2 billion due to TA Orange disconnecting part of the network rented from the Company. PCT revenue fell by 29.2 percent to Baht 2.1 billion from declines in subscriber base and ARPU. Annual Report 2003 TelecomAsia Corporation Public Company Limited 71

Report 2003 72 Annual TelecomAsia Corporation Public Company Limited

○

○ ○ ○

FY 2002

○

% Change FY 2003/ FY 2002

○ ○ ○ ○ ○

24,215 1,568 25,783

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○ ○ ○ ○

27,001 949 27,950

11.5 (39.5) 8.4

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

17,366 8,772 4,290 4,303 1,758 6,138 25,262 9,798 9,277 521 54 (3,881) (144) (3,449) 1,844

15.1 15.4 27.1 2.6 (43.0) 5.4 8.7 18.8 20.2 (5.8) (30.7) 15.5 (14.6) (18.1) NM

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

(1,605) (3,791) (403) (286) (33) 89 3,088 (5,722) (1,562) 943 95 (5,396) 1 (5,395)

(181.6) 68.6 22.9 100.0 100.0 NM NM (100.0) 100.0 100.0 (99.6) (100.0) (5.8) 3,598.9 (5.2)

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(7.8) (5.8) (6.7) 94.0 (16.7) (0.6) (79.2)

○ ○ ○ ○ ○ ○

4,455 (9,120) 5,116 3,136

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○ ○ ○ ○ ○ ○ ○ ○

7,076 (11,896) 3,568 1,883

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○

18,629 66,871 92,977 14,126 59,330 85,779 7,198

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17,169 63,019 86,760 27,407 49,423 85,265 1,495

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

(4,519) (1,192) (311) (215) (670) 4 (5,710) 36 (5,674)

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

19,989 10,123 5,452 4,414 1,001 6,469 27,459 11,642 11,151 491 38 (4,481) (123) (4,074) (444)

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FY 2003

○ ○ ○ ○ ○ ○ ○ ○

(Unaudited) (Baht in millions unless otherwise indicated) Revenues Revenues from telephone and other services Revenues from product sales Total revenues Operating expenses Cost of services Depreciation and amortization Revenue sharing Network operating expenses Cost of sales Selling and administrative expenses Total operating expenses EBITDA Depreciation & amortization Operating profit Interest income Interest expense Tax Income from continuing operations Share of profit (loss) in subsidiaries and associates Net income (loss) from continuing operations including share of profit (loss) in subsidiaries Non recurring items Gain ( loss ) on foreign exchange Accounting adjustment-leased circuit & conduit rental Adjustment-personnel compensation Write-off of PCT subscriber acquisition cost Other (expenses) income Gain from DPN buy-back Loss on impairment of investment Loss on impairment of IN Gain on sale of investment Gain from debt restructuring Net profit (loss) before minority interest (Income) loss attributable to minority interest Net profit (loss) for the period Balance Sheets Current assets Property, plant and equipment, net Total assets Current liabilities Borrowing Total liabilities Shareholder's equity Cash Flow Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Ending cash balance

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Consolidated Results of Operations - Adjusted Basis

58.8 (30.4) (30.3) (39.9)

Note : 1/ There were retroactive adjustments for FY2002 results relating to reclassification in accounts. These resulted in slight changes in the following accounts from the previous release ; revenues, SG&A, interest expenses and other income (expenses). 2/ Normalized operating expenses for FY2002 excluded one-off transactions which consisted of the followings; - out-of-period booking of leased circuit and conduit rental of Baht 286 million following the reviews with the TOT. - one-time compensation for workforce reduction of Baht 33 million. 3/ Depreciation and amortization for FY2003 excluded a write-off of PCT subscriber acquisition cost of Baht 215 million. 4/ Other expenses in FY2003 consisted of major items as follows; impairment for value of Voice Mail Box system (Baht 294 million), impairment of the old billing system (Baht 283 million) and loss from obsolete inventory (Baht 226 million).

ë Consolidated operating expenses were reported at Baht 27.7 billion in 2003, compared with Baht 25.6 billion in 2002. If a one-off item of Baht 215 million relating to the write-off of PCT subscriber acquisition cost is stripped out, adjusted operating expense in 2003 amounted to Baht 27.5 billion, an increase of 8.7 percent compared with 2002. The increase was mainly due to depreciation, while cash operating expenses grew only 2.0 percent, largely due to revenue sharing. The small increase in cash operating expenses was due to wireline business reductions of 4.8% and TA Orange successfully containing costs in the second half of the year. Core operating expense (cash operating expense less revenue sharing and cost of sales) declined by 0.8 percent to Baht 9.9 billion, mostly due to lower network operating expenses and lower direct cost of services. This resulted in a significant decline in the ratio of core operating expense as a percentage of total revenues (35.3 percent in 2003, compared with 38.5 percent in 2002). This decline was a result of effective cost control measures at both TA and TA Orange. ë Consolidated EBITDA grew 18.8 percent in 2003 to Baht 11.6 billion, with the EBITDA margin improving 270 basis points to 41.7 percent. This was due mainly to an improved performance by TA Orange. Excluding TA Orange, EBITDA grew 1.4 percent to Baht 11.9 billion, due to a 90 basis point margin improvement to 52.0 percent. The core wireline and data businesses, which had stable revenue, grew EBITDA by 5.7 percent to Baht 10.1 billion in 2003, due to cost reductions. ë Depreciation and amortization increased Baht 1.9 billion (Baht 11.2 billion in 2003, compared with Baht 9.3 billion in 2002), of which Baht 1.3 billion was from TA Orange as TA Orange operated at a higher capacity. The Company recognized a Baht 1.9 billion depreciation and amortization from TA Orange in 2003. ë Operating profits decreased to Baht 491 million in 2003 (compared with Baht 521 million in 2002), due to the increased depreciation fully offsetting the increased EBITDA. ë Consolidated interest expenses increased Baht 600 million to Baht 4.5 billion in 2003 due to TA Orange drawing down more loans and the higher cost of TelecomAsia's Baht loans compared with US dollar-denominated loans. All TelecomAsia's US Dollar-denominated loans, excluding TA Orange, have been replaced by Baht loans from banks and Baht bonds.

Annual Report 2003 TelecomAsia Corporation Public Company Limited 73

ë Consolidated share of loss in associated companies in 2003 was Baht 444 million, principally relating to investment in United Broadcasting Corporation Public Company Limited. A share of profit in associated companies of Baht 1.8 billion in 2002 consisted of a loss contribution from UBC of Baht 483 million and a net gain from amortization of goodwill from TA Orange of Baht 2.3 billion. TelecomAsia invested in TA Orange at a discount to book value of Baht 2.6 billion. The discount was booked as negative goodwill and its amortization was treated as a gain. ë The net loss from ongoing operations, including TA Orange, increased to Baht 4.5 billion in 2003 from Baht 1.6 billion in 2002. This was due mainly to no gains from the Baht 2.3 billion amortization of negative goodwill (booked under share of gain from affiliates), a Baht 600 million increase in interest expenses, and depreciation of Baht 1.9 billion. ë The reported net loss was Baht 5.7 billion in 2003, compared with a Baht 5.4 billion loss in 2002. The net loss in 2003 included non-recurring losses of Baht 1.2 billion. Excluding TA Orange, net loss for 2003 was Baht 2.8 billion, representing a significant improvement compared with the Baht 4.9 billion loss in 2002. The difference was mainly due to fewer non-recurring losses. ë Non-recurring items in 2003 included other expenses of Baht 936 million, primarily impairment of fixed assets (Baht 648 million) and loss from obsolete inventory (Baht 226 million). In addition, there was a Baht 215 million write-off of PCT subscriber acquisition cost, a Baht 311 million loss from foreign exchange, due to depreciation of the Baht against the Yen, and other revenues of Baht 343 million. Non-recurring items in 2002 totaling Baht 3.8 billion included a loss from the impairment of the Company's investment in FLAG (Baht 5.7 billion), other expenses (mainly impairment of the Intelligent Network of Baht 1.6 billion) and a foreign exchange loss of Baht 403 million. These losses were partially offset by major non-recurring gains including other non-operating income (mainly gain from settlement of Yen-denominated Deferred Payment Note of Baht 3.1 billion) and a gain on the sale of investments (mainly from the unwinding of SAILS contracts for FLAG shares of Baht 943 million).

Segment Results Wireline ë In 2003 wireline revenue increased 4.8 percent to Baht 16.9 billion, compared with Baht 16.1 billion in 2002. Basic fixed line telephone revenue declined 0.3 percent in 2003 to Baht 13.6 billion, compared with Baht 13.7 billion revenue in 2002. ë Public telephone revenue increased 18.8 percent to Baht 2.1 billion in 2003 from Baht 1.8 billion in 2002, as the Company managed to increase operational efficiency.

Report 2003 74 Annual TelecomAsia Corporation Public Company Limited

ë The number of fixed line subscribers fell by 58,328 or 2.9 percent to 1,962,074, due to the reintroduction of installation fees at the start of 2003 and the acceleration of the disconnection process for line reutilization. However, the Company maintained its position as the dominant player in the BMA market with a 56 percent market share as at October 2003. ë The fall in Average Revenue Per User (ARPU) for fixed line telephones slowed, decreasing 5.3 percent to Baht 542 in 2003, compared with ARPU of Baht 572 in 2002 (which fell 9.6 percent on the previous year). ë All operators received permission by the ICT Ministry to offer reduced-tariff and flexible tariff promotions. This is seen as a first step in creating a more level playing field between mobile and fixed line operators, thus improving overall fixed line business competitiveness. Starting on September 1, 2003, all fixed line operators launched a joint reduced-tariff trial promotion via two customer packages. In the first package, long distance call tariffs were halved from the maximum of Baht 18 to Baht 9 for fixed line-to-fixed line calls and from Baht 12 to Baht 6 from fixed line to mobile calls. In the second package the tariff was changed to a nationwide rate of Baht 3 per minute for both fixed line to fixed line and fixed line to mobile calls and the monthly fee was raised by Baht 100 to Baht 200. On January 16, 2004, TelecomAsia launched a six-month flexible tariff promotion which offers six different calling plans with a range of per minute call rates from Baht 1.5 - Baht 2.75. The Company gained valuable market experience from the promotions, despite receiving no significant positive impact to fixed line performance in 2003. In 2004 the Company will seek to increase customer awareness of the promotion through a range of marketing activities and expects this to yield positive results in the year ahead.

Wireless Personal Communication Telephone (PCT) ë PCT revenue decreased 29.2 percent to Baht 2.0 billion in the full year 2003 (from Baht 3.0 billion in full-year 2002). ë Subscribers declined by 9.1 percent in 2003 to 549,295 from 604,340 in 2002, due mainly to intense competition from cellular services. PCT ARPU declined by 22.1 percent from Baht 361 in 2002 to Baht 282 in 2003. ë In 2003, the Company focused on retaining its subscriber base by implementing various retention programs, launching new services (wireless Internet, Virtual Private Network and the IR service) and improving the network. The Company has also been in discussion with PCT creditors to reduce the level of debt.

Annual Report 2003 TelecomAsia Corporation Public Company Limited 75

○

2003

Segment Results 2002 %Change ○

○

○○

○

○ ○ ○ ○ ○ ○ ○ ○

(7.1) (15.0)

○

○ ○ ○ ○ ○ ○ ○ ○

742 (2,397)

○

○ ○

○

○ ○ ○ ○ ○ ○ ○ ○ ○

40 25 200 3,703 (3,200)

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○ ○ ○ ○ ○ ○ ○ ○

102 182 169 3,758 (3,859)

○ ○

○

TA Orange ë Total subscribers increased 488,762 or 36.6 percent during full-year 2003 to 1.8 million, up from 1.3 million in 2002. ë The ARPU of TA Orange declined slightly from Baht 495 in 2002 to Baht 484 in 2003. ë TA Orange reached EBITDA break-even in September 2003. The trend continued into the fourth quarter, resulting in an EBITDA contribution of Baht 107 million to the Company's consolidated results. TA Orange's negative EBITDA contribution for full year 2003 was Baht 266 million, a significant decline from the Baht 1.8 billion in 2002. This resulted from a 74.4 percent growth in revenue contribution to Baht 5.1 billion in 2003, compared with Baht 2.9 billion in 2002, while cash operating expense grew only 12.2 percent. ë However, TA Orange contributed Baht 2.8 billion to the Company's net loss in 2003, compared with Baht 335 million in 2002. This was due to the lack of a gain from a negative goodwill write-back, compared with a gain of Baht 2.3 billion in 2002.

5.5

○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

5,093

○

○ ○ ○ ○ ○ ○ ○

○

689 (2,757)

○

○ ○

5,373

○

○ ○

○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

4.8 (0.3) 33.3 (3.0) 18.6 (29.2) 63.4 16.4 138.0 (10.4) 8.4

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16,125 13,687 2,438 1,219 6,096 2,949 3,147 942 198 1,203 25,783

Notes : 1/ Including handset sales by other subsidiaries. 2/ Segment results excluding non-recurring items. 3/ Segment results for wireline and DDN represent gross profit but those for wireless, multimedia and Internet represent operating profit. 4/ There were retroactive adjustments in FY2002 results relating to reclassification in accounts. These resulted in slight changes in the following accounts from the previous release ; revenues, SG&A, interest expenses and other income (expenses).

Report 2003 76 Annual TelecomAsia Corporation Public Company Limited

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

16,893 13,644 3,249 1,183 7,228 2,087 5,141 1,097 471 1,078 27,950

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Wireline - voice Basic (POTS) Value-added services Digital Data Network (DDN) Wireless PCT TA Orange 1/ Multimedia/Broadband Internet Others Group Unallocated Costs

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Turnover 2002 %Change

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2003

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(Baht in millions)

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Results by Segment

157.6 615.6 (15.5) 1.5 (20.6)

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DDN (Digital Data Network) ë Revenues decreased 3.0 percent from 2002 to Baht 1.2 billion in 2003. This was mainly due to TA Orange expanding its own network and disconnecting parts of its network rented from the Company to reduce costs. ë DDN circuits, however, grew by 10.3 percent in 2003 to 7,835, due mainly to strong 20.4 percent growth in non-TA Orange circuits in 2003 (to 6,529 circuits from 5,424 in 2002). ë In 2003, TelecomAsia launched a new data solution service called TA Network Manager. The services combines three major network operation services, including network performance management, fault management and configuration management.

Internet ë Internet revenue grew strongly by 138.0 percent to Baht 471 million in 2003, compared with Baht 198 million in 2002. ë Subscriber numbers grew by 89.4 percent to 652,726, driven by the successful launch of new services, including TA easy click. In addition, there was a high uptake of the ready-to-use Internet kit, and an increase in Broadband and business customers. ë TelecomAsia moved into the on-line game business in 2003 and now operates seven popular games including Priston Tale, from the Republic of Korea. The expansion into on-line game business is designed to further grow the Company's Broadband business. There are now more than 1 million on-line game users in Thailand.

Multimedia / Broadband ë Revenue increased by 16.4 percent to Baht 1.0 billion in the full year 2003, most of which came from managed data network and broadband services. ë Total Broadband subscribers, including ADSL and cable modem users, increased 214 percent in 2003 to 11,661. ADSL subscribers almost tripled to 10,643. ë The Company was voted ùThailandûs most preferred Broadband provider' by customers. ë The Company expanded its ADSL network to cover most of the BMA area, which will increase capacity by another 100,000 ports by April 2004. ë In July 2003, the Company launched a bundled broadband and Internet service called hi-speed Internet to provide one-stop, Broadband Internet access to home users at the speed of 128 Kilobits per second (Kbps) to 8 Megabits per second (Mbps) with a self-installed modem. Ease of use and affordability resulted in the service being well received by the market.

Annual Report 2003 TelecomAsia Corporation Public Company Limited 77

ë In December 2003 the Company made Broadband more affordable by offering hi-speed Internet at a reduced charge starting at Baht 550 per month for unlimited local use of 256 Kbps service. The service has been positively received by the market, powering rapid growth in the business. The revenue from this service has been recorded under the Internet segment. ë In 2003, TelecomAsia installed TA stations, a coin-operated, high-speed net kiosk, which offers a net access speed of 512 Kbps. The stations, which have a built in digital camera, can also download movies, music, games, ring-tones and logos, as well provide karaoke services, at a charge of Baht 1.5 per minute. ë The Company also launched TA WiFi, a wireless technology that provides high speed (11 Mbps) Internet access at designated ùhot spotsû. The technology allows for wireless online information dispatch and receipt via notebook computers and PDAs through high frequency radio waves. This business is at a developmental stage. Gaining first mover advantage is seen as a key success factor for the business.

Financial Position Assets ë The Company's total consolidated assets decreased by Baht 6.2 billion to Baht 86.8 billion, due mainly to reduced value of property, plant and equipment, afer this year depreciation. ë Cash and cash equivalents, restricted cash and short-term investments. The Company and its subsidiaries had a stronger cash position in 2003 compared with 2002. The combined amount of cash and cash equivalent, restricted cash and short-term totaled Baht 8.2 billion in 2003, compared with Baht 7.6 billion in 2002. As at December 2003, the Company had short-term investments of Baht 3.5 billion, most of which were treasury bills at the parent company level. A portion of short-term investment was freed-up cash from the refinancing of Thai bank Baht loans in October 2003. ë Trade accounts receivable (net) decreased Baht 1.4 billion to Baht 5.5 billion, due mainly to the absence of disputed Value Added Tax amounting to Baht 890 million as the Company resolved the issue in July 2003. In addition, receivables from TOT (the amount paid by customers which the Company has not yet received from TOT) decreased Baht 344 million, while allowance for doubtful debt increased slightly by Baht 212 million. The average collection period improved from 90 days in 2002 to 80 days in 2003. ë Investment in subsidiaries, joint ventures and associates dropped Baht 386 million to Baht 3.6 billion, all of which related to investment in UBC. The decline was primarily due to amortization of goodwill for investment in UBC (Baht 380 million). Investment in subsidiaries, joint ventures and associates on a stand-alone basis was Baht 6.4 billion as of December 31, 2003, a decrease of Baht 4.2 billion from 2002, of which Baht 2.8 billion was a decrease in the value of investment in TA Orange due to its loss. Report 2003 78 Annual TelecomAsia Corporation Public Company Limited

ë Property, Plant and Equipment decreased Baht 3.9 billion to Baht 63.0 billion at the end of 2003 due to depreciation of Baht 11.2 billion. The Company made additional investments in property, plant and equipment of Baht 6.9 billion, of which Baht 3.2 billion was for investment in the wireless network, principally TA Orange's.

Liabilities ë Total liabilities in 2003 decreased Baht 514 million to Baht 85.3 billion due mainly to the absence of accrued long-distance and conduit rental to TOT of Baht 866 million, as this issue was settled with TOT in July 2003. ë Consolidated long-term borrowings and long-term trade accounts payable increased Baht 4.1 billion to Baht 76.8 billion as the increase in debt of Baht 8.1 billion, principally contributed by TA Orange, was offset by repayments from the Company and other subsidiaries totaling Baht 3.8 billion. The outstanding loans as of year-end 2003 included local debentures totaling Baht 21.1 billion. The current portion of long-term borrowings increased significantly by Baht 14 billion, due to most of TA Orange borrowings being recognized by the Company in the period maturing in March 2004. TA Orange is in negotiation with the creditors to refinance these loans into a long-term portion. The negotiations are expected to be complete in the second quarter of 2004.

Shareholders' Equity ë Shareholders' Equity decreased by Baht 5.7 billion to Baht 1.5 billion because of losses during the year.

Capital Structure ë The Company still has a high gearing ratio. Excluding TA Orange, the net debt to equity ratio increased from 7.0 times in 2002 to 9.6 times in 2003 due to the loss of Baht 5.7 billion in 2003. However, the net debt to EBITDA ratio was at 4.7 times as at December 31, 2003, compared with 5.1 times in 2002, due to repayment of debt and the improved cash position. ë The Company plans to reducing debt further to obtain a more comfortable net debt to EBITDA ratio of around 3-4 times.

Liquidity ë Cash flows for the core fixed line and data business were strong and continued to grow in 2003. Cash flow from operations (on a stand-alone basis) increased 3.1 percent to Baht 6.7 billion, mainly from the improvement in EBITDA. As a result, free cash flows (cash flows from operations less capital expenditure) grew by 6.9 percent to Baht 4.5 billion in 2003, after funding capital expenditure of Baht 2.2 billion. This was used for the repayment of loans totaling 2.9 billion while the remainder was invested in short-term investments. As a result the Company's cash flow position in 2003 was stronger by Baht 1.4 billion (to Baht 5. 3 billion, including cash and cash equivalents, restricted cash and short-term investments).

Annual Report 2003 TelecomAsia Corporation Public Company Limited 79

ĂŤ Including TA Orange, consolidated cash flows from operating activities increased Baht 2.6 billion to Baht 7.1 billion, mostly from TA Orange. However, this was insufficient to fund capital expenditure, therefore the Company and its subsidiary drew down additional loans of Baht 8.1 billion (Baht 7.4 billion of which was TA Orange). ĂŤ Capital expenditure. The Company (on a stand-alone basis) expended Baht 2.2 billion of capital in 2003, principally in the AMDOC billing system, drop-wiring for new customers and for the development of value-added services. The Company also recognized capital expenditure made by TA Orange of Baht 7.4 billion (including payment of Baht 3.3 billion for work-in-process as of end of 2002).

Report 2003 80 Annual TelecomAsia Corporation Public Company Limited

Report of the Board

of Directors没 Responsibilities for financial statements The Board of Directors is responsible for the financial statements of the Company and its subsidiaries. The aforementioned financial statements have been prepared in accordance with Generally Accepted Accounting Principles, using appropriate accounting policy consistently employed by the Company as well as applying careful judgment and best estimation. Important information is adequately disclosed in the notes to the financial statements. The Board of directors has provided and maintained an efficient internal control system to ensure that accounting records are accurate, complete and adequate to protect its assets. To accomplish this task, the Board of Directors has appointed an Audit Committee, which consists of Independent Directors responsible for the quality of the financial statements and internal control system, whose comments on these issues are readily included in the Audit Committee Report in this Annual Report. The Board of Directors is of the opinion that the Company没s overall internal control system is adequate and suitable and has rendered credibility and reliability to the financial statements of the Company and its subsidiaries for the year ended 31st December 2003.

Annual Report 2003 TelecomAsia Corporation Public Company Limited 81

Financial Statements 31 December 2003

Annual Report 2003 TelecomAsia Corporation Public Company Limited 85

The notes to the consolidated and Company financial statements on pages 93 to 144 are an integral part of these financial statements.

Report 2003 86 Annual TelecomAsia Corporation Public Company Limited

The notes to the consolidated and Company financial statements on pages 93 to 144 are an integral part of these financial statements.

Annual Report 2003 TelecomAsia Corporation Public Company Limited 87

The notes to the consolidated and Company financial statements on pages 93 to 144 are an integral part of these financial statements.

Report 2003 88 Annual TelecomAsia Corporation Public Company Limited

Annual Report 2003 TelecomAsia Corporation Public Company Limited 89 The notes to the consolidated and Company financial statements on pages 93 to 144 are an integral part of these financial statements.

Report 2003 90 Annual TelecomAsia Corporation Public Company Limited

The notes to the consolidated and Company financial statements on pages 93 to 144 are an integral part of these financial statements.

Annual Report 2003 TelecomAsia Corporation Public Company Limited 91

The notes to the consolidated and Company financial statements on pages 93 to 144 are an integral part of these financial statements.