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Financial Highlights................................................................................................................................................................12 Message from the Chairman of the Board...........................................................................................................................14 Message from the President and CEO.........................................................................................................................................16 Products and Services...........................................................................................................................................................18 Community Program..............................................................................................................................................................22 Independent Directors............................................................................................................................................................23 Corporate Governance Report...............................................................................................................................................27 Company Background and Major Developments..................................................................................................................34 Awards...................................................................................................................................................................................36 Revenues Breakdown by Business Group............................................................................................................................37 Corporate Information........................................................................................................................................................... 38 References.............................................................................................................................................................................43 Group of Investment Structure..............................................................................................................................................44 Risk Factors...........................................................................................................................................................................45 Shareholders..........................................................................................................................................................................47 Dividend Policy.......................................................................................................................................................................48 Management..........................................................................................................................................................................49 Connected Transactions........................................................................................................................................................82 Audit Fees..............................................................................................................................................................................83 Report of the Audit Committee for the Year 2004...............................................................................................................84 Report of the Board of Directorsû Responsibilities for Financial Statements 2004 .............................................................85 Managementûs Discussion and Analysis................................................................................................................................86 Financial Statements..............................................................................................................................................................93
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TrueFun Fun doesn没t really come from playing with toys, it comes from playing together.
TrueSuccess When we have each other, the task is already half done.
12 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
2004 Consolidated Financial Results Total revenues EBITDA (normalized) 1/ Operating profit 2/ Net profit (loss) Consolidated Balance Sheets and Cash Flows Total assets Total liabilities Total shareholder没s equity Free cash flow 3/ Free cash flow, excluding TA Orange 3/ Key Financial and Efficiency Ratios EBITDA margin Operating profit margin Asset Turnover EBITDA / Interest coverage ratio (Times) Net debt / EBITDA (Times) EBITDA / Interest coverage ratio, excluding TA Orange (Times) Net debt / EBITDA, excluding TA Orange (Times) Per Share Data and Others Loss per share (Baht) 4/ Book value per share (Baht) Share price at year end (Baht) No. of outstanding shares at year end (Million shares) Market capitalization
(Unit : Million Baht) 2003 2002
33,010 13,164 1,379 605
27,950 11,642 491 (5,674)
25,783 9,798 521 (5,395)
102,625 97,888 4,738 3,419 6,231
86,760 85,265 1,495 (3,303) 5,162
92,977 85,779 7,198 (4,298) 4,682
39.9% 4.2% 32.2% 3.1 6.0 3.6 4.3
41.7% 1.8% 32.2% 2.6 5.9 3.1 4.7
38.0% 2.0% 27.7% 2.5 6.6 3.2 5.1
(0.03) 1.16 8.10 4,092.53 33,149.47
(2.13) 0.40 7.30 3,694.50 26,969.83
(2.34) 1.95 4.60 3,694.50 16,994.70
2/ Excluding one-time write-off for PCT subscriber acquisition cost of Baht 215 1/ Excluding one-off transactions which consisted of the followings; million in 2003. - out-of-period booking of leased circuit and conduit rental of Baht 286 million in 2002, 3/ Cash flow from operations less capital expenditure. - one-time compensation of Baht 33 million for workforce reduction in 2002. 4/ After accumulated dividend for preferred shares.
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 13 12
Revenue Diversification High growth businesses contributed 37% of service revenue in FY 2004 compared to 17% in FY 2002.
26.7% Orange Data/Broadband/Internet WE PCT Others
0.7% 5.2% 4.0%
Wireline
53.4% Remark : Data/Broadband/Internet group refers to DDN, Multimedia and Internet segments in the audited financial statements.
Bt Mn.
Key Growth Drivers TA Orange surging growth
TA Orange contribution*
Remark : * Based on a proportionate consolidation up to 3Q04, and changed to full consolidation since 4Q04.
1
165 2004
No.1 Broadband and Internet player Revenue (Bt Mn)
Subscribers (,000)
1,231
Consumer Broadband
Internet 888
4 Revenue (Bt Mn)
Users (,000)
Revenue (Bt Mn)
Subscribers (,000)
14 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
Our 2004 results show our transformation has been a success, our strategy is working and most importantly we are delivering what consumers want. In 2005 we will build on what we have achieved and continue producing high quality and innovative communications solutions that enrich our customers没 lives.
Mr. Dhanin Chearavanont Chairman of the Board
If we can maintain this focus, which I am confident we can, we will be in a good position to prosper further as the Thai telecommunications industry is liberalized.
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 15
the
Chairman of the Board from
Telecommunication usage and competition continued to increase in Thailand in 2004, especially in the mobile and Internet sectors. Total Internet penetration jumped from 9 percent to 11 percent, with Broadband use, although still relatively small, surging by more than 13 folds. Mobile phone penetration also continued its steady rise, increasing from 34 percent to 41 percent of the population, and for the first time large numbers of Thai consumers started enjoying the benefits of non-voice mobile services, such as downloadable financial information, games and photo-based communication and community services. And as Thai appetites for high-speed connectivity and convenient lifestyle services grew during the year, I am proud that True has been at the forefront of meeting these needs. In 2003 and 2004 we made major organizational and other changes to ensure we were strategically well placed to drive emerging trends. The biggest change was our decision to establish ourselves under a new brand, as well as strengthen ourselves both technically and financially so that we could become Thailand没s leading customer-focused total communications solutions provider. Subsequent brand campaigns, conducted both externally and internally during the year were designed to leverage on synergies within the True Group and enhance our ability to serve in ways that matter the most to our customers by enhancing their life styles. Our 2004 results show our transformation has been a success, our strategy is working and most importantly we are delivering what consumers want. In 2005 we will build on what we have achieved and continue producing high quality and innovative communications solutions that enrich our customers没 lives. If we can maintain this focus, which I am confident we can, we will be in a good position to prosper further as the Thai telecommunications industry is liberalized.
16 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
the
President and CEO from
The True Group ended 2004 stronger than ever before. All aspects of our business were strengthened and foundations were laid for continuing future growth. True has become Thailand没s largest Internet Service Provider, its largest Broadband operator and Thailand没s most integrated communications solutions provider. Across the Group debt was reduced and restructured in 2004, equity was increased, cash flow and revenue remained strong and strategies were put in place to stabilize and enhance core businesses. TA Orange, our mobile phone subsidiary, had a particularly good year. It launched a wide range of non-voice services, beat expectations by almost doubling subscribers, and is firmly on track to make a maiden profit in 2006. With True taking a majority shareholding in TA Orange and negotiating new long term financing, the challenge now is to fully integrate TA Orange into the True Group and leverage synergies between it and other subsidiaries so that we can offer a whole new range of integrated solutions that enhance customer lifestyles. A key aspect of this will be the development of more high-speed content and the bundling of products and services into customized packages with single billing. Achieving this will be challenging as we are likely to face more intense competition than ever before. But I am confident that with the progress made in 2004, the leadership attained in key markets, and our proven ability to adapt and innovate, we will maintain momentum. I would like to extend my thanks to shareholders, members of the Board, management and all True Group staff for their dedication and hard work during the year. I hope you all feel as I do that the best is yet to come.
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 17
I would like to extend my thanks to shareholders, members of the Board, management and all True Group staff for their dedication and hard work during the year. I hope you all feel as I do that the best is yet to come.
Mr. Supachai Chearavanont President and CEO
18 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
At home, on the move, in the office or factory our customers want convenient, fast and cost effective ways to stay connected that enhance their life and work styles. In 2004 we continued to meet the lifestyle and commercial needs of this diverse group by launching a wide range of innovative and affordable solutions using a number of channels. Business Solutions For our business customers, fast and reliable communications are a commercial life blood and a vital means to grow revenue, reduce expenses and reach out to more customers. With this in mind we opened the True Internet Data Centre (True IDC) in mid-2004 to provide businesses with convenient access to the full range of Internet services, including web hosting, web-based monitoring and secure and efficient data storage. True IDC, which is a joint venture with Korean Company Dacom Corporation and KIDC, the biggest IDC operator in Asia, provides Thai businesses with the tools to face increased competition at home and abroad and access to cutting edge Internet solutions to drive business growth.
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 19
For our small and medium enterprise customers (SMEs) we launched the çAll in One Solutioné after research showed some Thai SMEs lacked understanding of how to use technology to increase productivity. The SME All in One Solution by True - the first total solution for SMEs in Thailand - is a package of four bundled product and service solutions that take care of all an SMEûs communications, marketing, business process and ICT for office and business management needs. SMEs can choose one customized solution to meet their needs or sign up for all four and receive full support from a team of True ICT professionals. We also launched a çPlug and Playé variation of the çAll in One Solutioné for industrial estate SMEs. Home/Consumer Solutions Home consumers have greatly benefited from our year-long launch of low-cost unlimited high-speed local and international Internet access packages. In January we offered unlimited high-speed local Internet packages starting from Baht 550 per month and in July we launched unlimited local and international Internet packages starting from Baht 590 a month (with a free fixed line number) with access speeds up to 4 Mbps (mega-bits per second) - the highest speed ever offered in Thailand. In October we launched another high-value Internet promotion, high speed access with a free ADSL modem and waived access fee. Following by special service for Internet fans, including çTurbo on Demandé - express 2 Mbps Internet access with rates charged for actual minutes used. We also announced that in the first half of 2005 we, along with pay TV operator UBC, would be the first in Thailand to offer an ADSL Broadband television service which will allow users to view their choice of a diverse range of programs on a computer whenever they want. True also rolled out a range of innovative services using other channels and product platforms. For fixed line customers we launched new flexible tariff packages in January 2004 which offered different calling plans with call rates from Baht 1.5 to Baht 2.75 per minute and a set amount of talk time. In February we launched the çPCT School Club,é a service that allows group members including teachers and students to make unlimited calls between themselves using a special number for a fixed monthly charge. In September we renamed PCT, çWE PCTé to reflect the strategy of building communities and bringing people together, and launched unlimited group call and a çbuy-one, get one freeé handset promotions. We also boosted our online game content. In January True Digital Entertainment began offering PristonTale, an award winning Korean online game. In September we formed the joint venture company NC True with NCsoft, Koreaûs leading developer and publisher of online games, to provide online games (MMORPG) starting with the most popular worldwide MMORPG, çLineage IIé in Thailand.
20 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
In May we launched çHome Entertainment by Trueé, an online music service provided via high-speed Internet in association with R.S. Promotions, an entertainment provider. In November we also joined hands with R.S. Promotions again to add çKaraoke-on-Demand and Moviesé to our suite of çHome Entertainment by Trueé products obtainable via high-speed Internet. During 2004 True also maintained its position as Thailandûs leading Wi-Fi hotspot provider. Wi-Fi by True uses the latest wireless communication technology and provides data transmission at speeds of up to 11 Mbps. By the end of 2004 we had altogether - the highest amongst Wi-Fi players, 80 Wi-Fi hotspots in places such as convention centers, hospitals, and food and coffee outlets. We plan to increase the number of Wi-Fi Internet service areas or hotspots from 80 to more than 300 in 2005. TA Orange During the year our mobile subsidiary TA Orange delivered on promises to be the best mobile operator in Bangkok; the best for value, fun and games, the best for convenience and fixed-mobile-Internet integration and the fairest and most competitive player. In April, TA Orangeûs network was rated çBest in Bangkoké in a survey conducted by Synovate Ltd, under the guidance of a testing team from King Mongkutûs Institute of Technology. Aided by a large marketing campaign, public awareness of the quality of the companyûs network steadily increased. During the year TA Orange leveraged on synergies with the True Group to emphasize the enhanced convenience and benefits of using a wide range of True services. In April 2004, TA Orange and True unveiled the çAll Together Bonusé campaign, which provided customers with free TA Orange talk time for every Baht they spent on home telephone, WE PCT, Click Internet, Easy Internet and hi-speed Internet services. By the end of 2004, more than 200,000 customers had benefited from this çbest for valueé promotion. TA Orange led the market during the year with a steady stream of innovative pricing campaigns, including the çJust Talké 1 Baht per minute promotion, which other operators tried to match. It also launched a range of voice and non-voice content services to enhance customerûs lifestyles. Three mobile phone community content products were unveiled during the first half of 2004. In February, TA Orange launched çPhoto Worldé a complete suite of photo-based çfun and gamesé communication and community services.
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 21
In May it launched çFinancial Worldé, which brings together a range of information services to meet the needs of Thai investors and in July TA Orange launched çGame Worldé, a complete games portal which allows customers to download mobile games via GPRS from the multimedia service portal çOrange Worldé. This was followed in October with the launch of çToon Worldé which enables customers to download games, cartoons, screen savers and ring tones featuring well known cartoon characters. Also in October TA Orange signed a partnership contract with Koreaûs SK Telecom for non-voice platform and marketing expertise, so it can develop even more innovative information and çfun and gamesé non-voice products in 2005. TA Orange also launched the exclusive çTodsaguné online game, joined forces with Workpoint Entertainment Public Company Limited to offer consumers the game çTodsagun on Mobileé and linked up with Asiasoft International, the authorized provider of the popular online game Ragnorak, to allow Just Talk customers to play the game on their mobile phones. In addition, convenient new ways were introduced for Just Talk prepaid customers to top up their mobile phones, including çMobile Top Upé, which lets customers transfer prepaid credits from one mobile phone to another and çHome Top Upé, in which customers can use their True fixed-line account to top up their mobile phone. TA Orange also made top-up e-vouchers available via 7-Eleven stores nationwide and launched micro (Baht 50 and Baht 90) top-up cards. International SMS, which allows customers to send an International SMS to 447 mobile phone networks in 123 countries worldwide, was also launched and TA Orange and True unveiled Thailandûs first Voice SMS service that lets users send audio messages to any mobile or fixed-line phone in Thailand. In November, TA Orange and True revolutionized mobile connectivity for Thai consumers with the launch of Thailandûs first combined Wi-Fi/GPRS package, which provides unlimited access to high speed data services at a flat monthly rate with a single monthly bill.
22 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
TRUE Learning Center: Gateway to the Wide World In line with the companyûs brand name change in 2004 to TRUE Corporation Public Company Limited, TelecomAsiaûs learning center also took on a new identity - çTRUE Learning Center: Gateway to the Wide Worldé, embodying the companyûs corporate culture and values which focus on courageous, caring, credible and creative. During the year, TRUE had implemented numerous projects as part of its ongoing commitment to develop Thailand into a knowledge-based society. As a continuation of its Information Communication Technology (ICT) project which was implemented in 2001, TRUE selected 20 pilot schools with a high potential and then developed them further into an ICT Learning Center. Subsequently, this was then expanded into a network comprising 100 public as well as private schools in the Greater Bangkok Metropolitan Area. Likewise, TRUEûs Science Project saw an expansion from 9 selected pilot schools into a network of 60 schools in the same area. Besides the above, TRUE had also organized many educational activities during 2004: ë Science Camp, which took place in the 9 pilot schools, serving as a model to be adopted by other schools ë Support and development of educational media which was co-produced by teachers and young students. ë Encourage the use ICT knowledge as an educational tool and information search utilizing internet, which would in turn become the knowledge foundation for the ICT community. TRUE Science-ICT Camp This camp was held at King Mongkutûs Institute of Technology Ladkrabangûs Faculty of Science and was attended by over 300 students and teachers. The emphasis of the camp was to educate the participants on science hand in hand with ICT. In addition, a TRUE Nature-Culture camp was also held for over 150 participants educating them on nature and the way of life in the Bang Khunthien forest which is Bangkokûs only seafront area. TRUE Young Scientist Program This yearûs project received as many as 360 science projects from primary school students nationwide, representing a record number of submissions since its establishment in 1993. During its 8-year history, 2 gold medals for the first time were awarded to school children in the provinces. TRUE Conservation Photo Contest In its 10th year, this popular project received a total of 899 submissions. In addition, the consolation prizes were increased from 10 to 20 in both the wild animals and wild flora categories, bringing the total number of prizes to 46. TRUE is committed to the ongoing development of Thailand into a knowledge-based society and at the same time aspires to create inspiration for the Thai people for self-development to become a valuable citizen.
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 23
Mr. Narong Srisa-an Independent Director Educat io n Honorary Master Degree of Economics, Thammasat University Experience 1998-Present Present
Independent Director True Corporation Public Company Limited Present Chairman Advanced Agro Public Company Limited Chairman Prida Pramote Company Limited Chairman Thanakorn Vegetable Oil Products Company Chairman Surabangyikhan Company Limited Chairman Thai Beverage Can Limited Chairman Eastern Seaboard Industrial Estate (Rayong) Company Limited
Chairman Thai Alcohol Public Company Limited Chairman of Executive Board Siam Food Products Public Company Limited Chairman of Executive Board Beer Thai (1991) Public Company Limited Vice Chairman Berli Jucker Public Company Limited Vice Chairman General Tobacco Company Limited Vice Chairman Thai Beverages Public Company Limited Executive Director Comlink Company Limited
24 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
Mr. Vitthya Vejjajiva Independent Director and Chairman of the Audit Committee
Education Master Degree of Laws, Harvard University, U.S.A. Master Degree of Arts, University of Cambridge, London Bachelor of Laws, University of Cambridge, London English Barrister, Gray没s Inn Association Experience 1998-Present
1991-1992
1988 Independent Director and Chairman of the Audit Committee True Corporation Public Company Limited Chairman K Line (Thailand) Company Limited and its subsidiaries Permanent Secretary of the Ministry of Foreign Affairs
1984 1981 1979
Ambassador Extraordinary and Plenipotentiary of the United States of America Ambassador Extraordinary and Plenipotentiary of Belgium and the European Community Ambassador Extraordinary and Plenipotentiary of Canada Director, General of Department of Economic Affairs
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 25
Dr. Kosol Petchsuwan Independent Director and Member of the Audit Committee E du cation Doctorate of Engineering, University of London, England Bachelor of Engineering, University of London, England Experience 1999- Present Independent Director and Member of the Audit Committee True 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
26 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
Mr. Joti Bhokavanij Independent Director and Member of the Audit Committee Education Fellow of the Association of Chartered Certified Accountants, England. Programme for Management Development, Harvard Business School (U.S.A.). Marketing Management Programme, Stanford University, Graduate School of Business (U.S.A.) Experience 1999-Present 2000-2001 1994-1997 1992-1994
Independent Director and Member of the Audit Committee True Corporation Public Company Limited Executive Chairman TISCO Finance Public Company Limited Executive Chairman Thai Wah Group of Companies Managing Director The East Asiatic (Thailand) Company Limited Consult-General of Denmark for Bangkok
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 27
The heart of TRUE is personified by the 4 Cs: being Credible, being Creative, being Caring and being Courageous. These 4 core values are expressed in the principles by which TRUE governs itself. The results have been positive. 2004 marked the third consecutive year that TRUE has ranked amongst the very top companies in The Corporate Governance Report of Thai Listed Companies. The Corporate Governance Report is published annually by the Thai Institute of Directors Association (Thai IOD) under the auspices of the Stock Exchange of Thailand (SET) and the Securities and Exchange Commission (SEC). In making its determinations, Thai IOD looks at five core criteria: 1) rights of shareholders, 2) equitable treatment of shareholders, 3) role of stakeholders, 4) disclosure and transparency, and 5) board responsibilities. 1. Rights of Shareholders TRUE strives to ensure that every shareholder is given an opportunity to hear, to be heard and to make a difference. Caring 莽We treat people the way we want to be treated.茅 Over the course of 2004 shareholders were invited to participate in four meetings conveniently held at TRUE没s Bangkok headquarters. One was a general meeting, and three were extraordinary meetings. At least 7 days before each meeting, detailed information on every agenda topic was disseminated by post. Additionally, in order to ensure dissemination of information to the general public, the agenda was shared by publication in local newspapers and on TRUE没s website. At the beginning of each meeting, the procedures of the meeting was explained to all shareholders in attendance, and every shareholder was given the opportunity to express an opinion on any matter discussed. Directors, the chairman or a representative of each Board committee, and members of management attend each meeting so that effective responses can be provided for all shareholder comments and questions.
28 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
By having allocated not less than four Board seats to Independent Directors (the definition and course training from Thai Institute of Directors Association (Thai IOD) are provided in Management content), the opinions of minority shareholders can be heard at the highest levels of the company. Independent Directors are free of any interest concerning personal benefit or position and free from the control of any particular special interest. Each is obligated to express his or her independent opinion to the Board. Moreover, every Director must stand for election every 3 years and his performance is, thereby, subjected regularly to the voting scrutiny of the shareholders. On all shareholder voting matters, each shareholder is entitled to exercise votes equal in number to the amount of shares held by him or her. Prior to each shareholder meeting, a proxy form is provided for those TRUE shareholders who may wish to designate a proxy to vote on their behalf during the meeting. 2. Equitable Treatment of Shareholders As a publicly listed company, TRUEûs shareholder base is large and diverse. TRUE recognizes the importance of keeping every shareholder timely, accurately and appropriately informed. Important information is posted promptly on the investor relations pages of TRUEûs web site, accessible via www.truecorp.co.th and www.true-corp.com, so that it reaches all shareholders, whether they are a significant or a minority shareholder and wherever located, at the same time. Credible çWe communicate with integrity, always keeping the best interest of the company in mind.é TRUEûs corporate web site gives the public a wealth of information about the company, its people and its performance. Copies of minutes of meetings, investor presentations, past annual reports and filings with the Stock Exchange of Thailand are just a part of the resources available 24/7/365 in both English and in Thai. Financial information dating back to 1999 is available for downloading or by contacting TRUEûs Investor Relations department. The Investor Relations department and the Corporate Secretary of TRUE each bear important responsibilities to TRUEûs shareholders. Together, they are TRUEûs contact points with its shareholders. Corporate information to the general public and shareholders flows through the Investor Relations department, whereas information to the general public and our regulators is channeled through the Corporate Secretary.
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 29
Maintaining TRUEûs credibility is essential for gaining the investor confidence that is necessary to maximize and sustain the value of the company and the wealth of TRUEûs shareholders. Analysts from Thailandûs major securities firms track TRUE and, therefore, the Investor Relations department works cooperatively with these analysts. These analystsû reports lead to an open discussion of TRUEûs operations and financial prospects, and are accessible by the general public and by TRUEûs shareholders. In 2004, TRUE increased its equity interest in its subsidiary, TA Orange. As assurance that the terms of the transaction were çfairé to TRUEûs shareholders, çfairness opinionsé were given by BT Securities Company Limited. The transaction was completed while providing utmost transparency for the benefit of all shareholders. 3. The Role of Stakeholders The continued success of TRUE relies upon the ability of stakeholders to influence positively TRUEûs conduct and activities, and vice-versa. Caring çWe are dedicated to working together in harmony to do whatûs right for our customers, colleagues and partners.é TRUEûs Code of Conduct defines the term çstakeholdersé to include customers, shareholders, creditors, employees and their families, the government, business partners, business competitors and the citizens of Thailand. The Code of Conduct is a roadmap that provides clear direction to Directors, management and employees alike, of TRUE and of TRUE affiliates, towards melding the 4 Cs into the corporate culture. The Code of Conduct encourages all to make a positive contribution to Thai society and to the well-being of Thai people. The year 2004 continued TRUEûs position as a corporate and community leader in enriching and providing assistance for the well being of Thai society. ë TRUE and the TRUE affiliates provided immediate assistance to the victims of the December 26th tsunami, and relief for their families and friends. TA Orange provided free of charge calls to those in the tsunami-affected areas, allowing them to contact loved ones. Within a day or so, food, clothing and materials donated by employees had reached the victims. ë Now in service to the nation for more than 10 years, TRUEûs Nature Classroom, Arts and Culture Classroom and Science Classroom are programs that aim to foster self-improvement and are designed to help students gain knowledge and insight from the classrooms, adding valuable and enriching experiences to their lives.
30 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
ë 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. ë TRUE works closely with the Bangkok Metropolitan Administration (BMA), Education Department to guide Thailand towards becoming a çknowledge-based society.é Through collaborative efforts, the çInternet for a Knowledge-Based Societyé program has connected more than 300 schools in Bangkok to resources they never had access to before. TRUE believes if young people have access to the latest information from around the world via the Internet, then they will be empowered to explore new boundaries and improve their lives. This, in turn, will enable them to make even more valued contributions for the benefit of the country. TRUE understands that it has a responsibility to safeguard the interests of its stakeholders. As it has for many years, TRUE has kept an open and cooperative working dialogue with Marsh UK Ltd., which is the insurance advisor to TRUEûs secured creditors. In addition, last year TRUE and its insurance broker procured a competitive, comprehensive, secure a cost-effective insurance package for TRUE and its affiliated companies. There is also a strong national interest in TRUEûs ability to continue business operations even in the event of a significant accident or disaster. TRUE continues to make investments and to allocate resources to ensure that its key services have adequate backups and will continue to operate under virtually any circumstances. Internal safeguards are implemented under the management of TRUEûs Audit Department. The effectiveness of the Audit Department oversight and internal controls is enhanced through utilization of the expertise of PricewaterhouseCoopers Risk Management Services Limited. 4. Disclosure and Transparency Through its own initiative, over four years ago the Board established a committee to enhance the governance of the company by adopting international best practices. Three years ago the Corporate Governance Guidelines were placed into practice. A complete copy of the Corporate Governance Guidelines is available on TRUEûs website.The Guidelines encompass: ë Duties and responsibilities of the Board of Directors ë Composition and selection of the Board of Directors ë Board structure and procedure ë Board Leadership
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 31
ë Board relationship to management ë Meeting procedures ë Committees of the Board of Directors ë General Committee Matters ë Policy regard related party transactions and Code of Conduct Courageous çWe recognize that with opportunity comes accountability and with accountability, ownership.é Adoption of the Corporate Governance Guidelines led to the formation of a new Board Committee, the Independent Committee. The work of the Independent Committee includes oversight responsibility over any Board matter involving a related party transaction or a corporate opportunity, as well as all matters that are covered by the Stock Exchange of Thailandûs Rules and Procedures and Disclosure of Connected Transactions of Listed Companies. Details of Connected Transactions that occurred during 2004 are provided in the çConnected Transactionsé section of this Annual Report for 2004. TRUE has its own complementary standards for transactions with related entities, which are stated in the Policy Regarding Related Party Transactions. Situations such as trading on insider information and having a personal relationship in matters involving TRUE are explained and explored in detail in the Code of Conduct that every employee is asked to read and acknowledge. 5. Board Responsibilities TRUE stakeholders are served by 20 hard-working persons, each of whom is able to work with colleagues as one and yet who can complement the value of the Board with his own particular strengths. Creative çWe share our ideas with each other to create strong synergies.é The schedule of the Board meetings for the coming year is set by consensus at the final Board meeting of the prior year and written notice of each meeting is provided to each Director in accordance with all applicable rules and regulations.
32 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
In 2004, 8 Board meetings were held. Director attendance at those meetings was as follows: No.
Directors
1 Mr. Narong Srisa-an 2 Mr. Vitthya Vejjajiva 3 Dr. Kosol Petchsuwan 4 Mr. Joti Bhokavanij 5 Mr. Dhanin Chearavanont 6 Mr. Sumet Jiaravanon 7 Dr. Ajva Taulananda 8 Mr. Chaleo Souvannakitti 9 Mr. Athueck Asvanund 10 Mr. Supachai Chearavanont 11 Mr. Soopakij Chearavanont 12 Mr. Chatchaval Jiaravanon 13 Mr. Vichaow Rakphongphairoj 14 Mr. Umroong Sanphasitvong 15 Mr. Heinrich Heims 16 Mr. Klaus Tuengeler 17 Mr. Claus Stadler 18 Mr. Andreas Klocke 19 Mr. Harald Link 20 Dr. Lee G. Lam * Resident outside of Thailand
Attendance / Number of Meetings (times) 7/8 7/8 8/8 8/8 5/8 0/8* 8/8 8/8 8/8 7/8 3/8 5/8 8/8 8/8 3/8 6/8 2/8 5/8 4/8 3/8
Individual strengths are utilized, and efficiency is achieved, by the delegation of 5 key Board responsibilities to these standing committees: - Audit Committee - Finance Committee - Corporate Governance Committee - Compensation and Nominating Committee - Independent Committee
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 33
Further detail on each Board committee and their committee members, including copies of their respective committee charters, can be obtained from the investor relations pages of TRUEûs website. The current number and allocation of seats on the Board reflect a fair proportion of each shareholder groupûs investment. Non-executive directors remain a majority of TRUEûs Board, keeping the balance of power with non-executives and ensuring decision-making independence and credible oversight of management. The seat of Chairman of the Board remains with a non-executive director. In order to maximize the value to TRUE of the knowledge and experience of each Director, TRUE does not limit the number of times that a Director may be re-elected or impose a mandatory retirement age. Compensation of the top executives and the Board is recommended by the Compensation and Nominating Committee and approved by the entire Board. Remuneration consists of a fixed salary and, when deemed appropriate, a variable component. The variable component is linked to individual and corporate performance. TRUEûs 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, Stock Options (which utilized the services of an independent advisor in performing this function, particularly within Thailandûs telecommunication industry) as a key component of their compensation in order to link their compensation to corporate performance and to establish a long term performance incentive. Details of such remuneration are provided within the Management content of the annual report. TRUE has disclosed publicly in filings made with the Stock Exchange of Thailand significant actions taken by its Board over the course of 2004.
34 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
True Corporation is the most fully integrated nationwide communications solutions provider in Thailand and one of the countryûs largest brands. Since being established in 1990 to build and jointly operate 2.6 million fixed lines in the Bangkok Metropolitan Area (BMA) under a 25-year concession, it has grown rapidly to meet the lifestyle needs of Thai consumers. Backed by Asiaûs largest agro-conglomerate, the Charoen Pokphand Group (with a 39.22 percent shareholding), Trueûs subsidiary businesses currently include cellular operator TA Orange, Asia Wireless Communication (operator of WE PCT), True Multimedia, True Internet and pay TV operator United Broadcasting Corporation (UBC). Through these companies True provides home consumers, small and medium enterprises and corporates with the full range of cellular, wireless and wireline, Internet, data and entertainment products and services in customized packages. It is firmly established as the BMAûs leading wireline service provider with 56 percent market share, is the countryûs largest Broadband provider with more than 85 percent market share, and the countryûs leading Internet Service Provider. In TA Orange, True owns the fastest growing and third largest mobile operator. The Company was listed (as TelecomAsia Corporation Public Company Limited) on the Stock Exchange of Thailand in December 1993 with the security symbol çTAé. At this time it had an annual turnover of Baht 2 bil ion and employed 1,500 staff. At the end of December 2004, the True Group (which rebranded and adopted the çTRUEé security symbol in April 2004) had an annual group turnover of more than Baht 40 billion (including 100 percent of TA Orange and UBC), a market capitalization of Baht 33.1 bil ion, infrastructure investments of more than Baht 100 bil ion and employed more than 8,000 staff. Key Developments in 2004 December 2004
TA Orange achieved 3.4 million subscriber base, exceeding its target. True strengthens its balance sheet, significantly reduces debt and increases equity by Baht 2.7 billion. It achieved this by selling 398 million new ordinary
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 35
shares at Baht 6.8 per share via a seven-time oversubscribed private placement in Thailandûs first Accelerated Global Tender. Funds raised were used to complete debt restructuring of a subsidiary with a creditor, enabling the True Group, excluding TA Orange, to reduce debt by approximately Baht 9.3 billion in 2004 including a Baht 2.7 billion gain from debt forgiveness from the debt restructuring. November 2004
True becomes Thailandûs largest Internet Service Provider with more than one million customers.
October 2004
True announces that in cooperation with UBC it wil launch Thailandûs first Broadband TV service.
September 2004
True completes negotiations on long term debt financing for TA Orange, enabling it to increase its shareholding in TA Orange to 83 percent. NC True online game company is formed in a joint venture with Koreaûs NCsoft to market the hugely popular Lineage II game in Thailand.
August 2004
True announces it will inject Baht 6 billion into TA Orange so the mobile operator can expand network capacity and coverage to approximately 90 percent of Thailandûs population.
June 2004
True raises Baht 2.4 billion by issuing seven year maturity Thai Baht debentures. The funds are used to refinance debt to German creditor Kreditanstalt Für Wiederaufbau (KfW).
May 2004
TA Orangeûs network quality is judged çBest in Bangkoké by a Synovate and King Mongkutûs Institute survey.
April 2004
True launches the çAll Together Bonusé campaign which provides True telephone, WE PCT and Internet users with the equivalent free TA Orange talk time for every baht they spend on True services. TelecomAsia changes its name to True as part of an çinside outé rebranding to position the company for strong future growth.
36 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
ë True named çBest Competitive Carrieré in Telecom Asia Magazine 2004 Awards The first time a Thai company has won an award in the seven years of this prestigious competition. ë Disclosure Award for Good Corporate Governance True has been included in the top quartile of listed Thai companies, ranked according to good corporate governance practices, for two consecutive years. The ranking was based on surveys implemented by the Thai Institute of Directors with the support of the SET and the SEC. ë Technology Fast 500 Asia Pacific Company Awards True has been listed among Deloitteûs 2004 Technology Fast 500 Asia Pacific ranking for the fastest growing companies. ë Super Brand 2004 True was voted by consumers as a Thailand Superbrand in the Readerûs Digest Asia Superbrands Survey 2004. In addition, in 2002 True won the Euromoney Award for Good Corporate Governance and in 2000 was ranked among the top 10 leading Thai companies by Far Eastern Economic Review magazine.
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 37
Revenues breakdown by business group Percentage 31st December of Shares 2004 Held by Baht the Company Million %
Business Group/Operation by
31st December 2003 Baht Million %
31st December 2002 Baht % Million
1. Fixed line and Value Added Service1 True Corporation Public Company Limited Revenues
16,632
50.4
16,893
60.4
16,125
62.5
11,730
35.5
7,228
25.9
6,096
23.6
1,408
4.3
1,097
3.9
954
3.7
1,029
3.1
1,183
4.2
1,199
4.7
887
2.7
471
1.7
198
0.8
1,324
4.0
1,078
3.9
1,203
4.7
33,010
100.0
27,950
100.0
25,775
100.0
2. Wireless Wire & Wireless Company Limited Asia Wireless Communication Company Limited Bangkok Inter Teletech Company Limited Revenues
87.50 99.99 82.86
3. Multimedia Network and Broadband True Multimedia Company Limited
90.45 Revenues
4. Data Service True Corporation Public Company Limited True Multimedia Company Limited
90.45 Revenues
5. Internet True Internet Company Limited Asia Infonet Company Limited True Digital Entertainment Company Limited True Internet Data Center Company Limited Revenues
99.99 65.00 99.99 70.00
6. Other Business True Fleet Management Company Limited True Properties Company Limited Wire & Wireless Company Limited Other Companies
99.99 99.99 87.50 Revenues
Total Revenues Source: The Company 1 Includes Fault Reporting and Dropwiring, Public Phone and Audiotext
38 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
True Corporation Public Company Limited, with the security symbol çTRUEé on the Stock Exchange of Thailand 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 2004, the Companyûs registered capital was Baht 46,583,393,190.- consisting of 3,958,873,833 common shares with a par value of Baht 10 per share and 699,465,486 preference shares with a par value of Baht 10 per share, of which Baht 40,925,272,140.- is paid-up capital, comprising of 3,393,061,728 common shares with a par value of Baht 10 per share and 699,465,486 preference shares with a par value of Baht 10 per share. The Companyûs head office is located at:
18 True Tower Ratchadaphisek Road Huai Khwang, Bangkok 10310 Telephone : (662) 643-1111 Fax : (662) 643-1651 Website : www.truecorp.co.th The Companyûs subsidiaries, associates companies and other investments are as follows: Company Name
Address
Type of Business
Paid-up Capital
Asia DBS Public Company Limited
18 True Tower DBS system operator THB 100 million Ratchadaphisek Road Huai Khwang, Bangkok 10310
True Multimedia Co., Ltd (Formerly named Asia Multimedia Company Limited)
18 True Tower NON-POTS and Ratchadaphisek Road multimedia services Huai Khwang, Bangkok 10310
THB 6,127 million
Asia Wireless Communication Company Limited
18 True Tower PCT operator Ratchadaphisek Road Huai Khwang, Bangkok 10310
THB 5,797.85 million
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 39
Company Name
Address
Type of Business
Paid-up Capital
Bangkok Inter Teletech Company Limited
986 U Chu Liang Building, 14th Floors, Unit D, Rama IV Road, Silom, Bangrak, Bangkok
Investment in Cellular Operator
THB 21,000 million
TA Orange Company Limited
986 U Chu Liang Building, 4th-5th, 11th-15th Floors, Rama IV Road, Silom, Bangrak, Bangkok
1,800 MHz cellular telephone operator
THB 27,100.10 million
TA Orange Retail Company Limited
986 U Chu Liang Building, 14th Floors, Unit D3 Rama IV Road, Silom, Bangrak, Bangkok
Retail services
THB 1 million
Song Duo Company Limited
986 U Chu Liang Building, 14th Floors, Unit D2 Rama IV Road, Silom, Bangrak, Bangkok
Inactive
THB 1 million
K.I.N. (Thailand) Company Limited
18 True Tower Holding Company Ratchadaphisek Road Huai Khwang, Bangkok 10310
THB 75 million
True Properties Company Limited (Formerly named Nilubon Company Limited)
18 True Tower Rental services Ratchadaphisek Road, Huai Khwang, Bangkok 10310
THB 3,488 million
Tele Engineering and Services Company Limited책
18 True Tower Construction and Ratchadaphisek Road distributor Huai Khwang Bangkok 10310
THB 25 million
40 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
Company Name
Address
Type of Business
Telecom Equipment Manufacturing Company Limited
18 True Tower Telecom equipment Ratchadaphisek Road manufacturer Huai Khwang Bangkok 10310
Telecom Holding Company Limited
18 True Tower Holding Company Ratchadaphisek Road Huai Khwang Bangkok 10310
Paid-up Capital THB 24 million
THB 16,589.25 million
Telecom International Company Limited 18 True Tower Holding Company Ratchadaphisek Road Huai Khwang Bangkok 10310
THB 300 million
Telecom Training and Development Company Limited
18 True Tower Training service Ratchadaphisek Road Huai Khwang, Bangkok 10310
THB 50 million
True Digital Entertainment Company Limited
1 Fortune Tower, 25th Floor Ratchadaphisek Road Din Dang, Bangkok 10400
Online game
THB 73.5 million
True Internet Company Limited (Formerly named Asianet Corporation Company Limited)
1 Fortune Tower, 14th,27th Floor Ratchadaphisek Road Din Dang, Bangkok 10400
Audio text services and internet dealer
THB 236.40 million
T-Pay Company Limited
18 True Tower Payment Ratchadaphisek Road service center Huai Khwang, Bangkok 10310
THB 30 million
U-Net Company Limited
18 True Tower Construction and Ratchadaphisek Road distributor Huai Khwang, Bangkok 10310
THB 93 million
Wire & Wireless Company Limited
54 W&W Bld., Pattanakarn 20 Construction and Suanluang Bangkok distributor
THB 100 million
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 41
Company Name Asia Remanufacturing Industries Company Limited
Address 102,15th Floor, Na Ranong Road, Klongtoey, Bangkok
Type of Business Modification, repair and maintenance services
True Fleet Management 18 True Tower Rental services Company Limited (Formerly named Ratchadaphisek Road W7 Rental Services Company Limited) Huai Khwang, Bangkok 10310
Paid-up Capital THB 5.6 million
THB 150 million
Yai Kaew Company Limited
18 True Tower Investment in property THB 10 million Ratchadaphisek Road Huai Khwang, Bangkok 10310
K.I.N. (Thailand) Company Limited (Foreign Company)
P.O. Box 957, Holding Company Offshore Incorporation Centre, Road Town, Tortola, British Virgin Island
USD 1
Nilubon Company Limited (Foreign Company)
P.O. Box 71, Holding Company Craigmuir Chambers, Road Town, Tortola, British Virgin Island
USD 1
TA Orient Telecom Investment Company Limited
3/F, Hing Yip Commercial Centre, 272 Des Voeus Road C., Hong Kong
HK$ 117 million
Telecom Asia (China) Company Limited
P.O. Box 957, Commercial Offshore Incorporation Centre, Road Town, Tortola, British Virgin Island
HK$ 78
Telecom International China Company Limited
P.O. Box 71, Craigmuir Chambers, Road Town,Tortola, British Virgin Island
HK$ 78
Holding Company
Commercial
42 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
Company Name
Address
Type of Business
Paid-up Capital
Chongqing Communication Equipment Co., Ltd.
140 Daping Zhengjie Chongqing Telecommunication RMB 292 million People没s Republic of China equipment manufacturer
Asia Infonet Company Limited
1 Fortune Town Bldg., 14th, Internet service 17th Floor Ratchadaphisek Road provider Huai Khwang, Bangkok 10310
THB 15 million
True Internet Data Center 18 True Tower, 14th Floor Internet Data Center Company Limited (Formerly named TA Ratchadaphisek Road Internet Data Center Company Limited) Huai Khwang, Bangkok 10310
THB 115.02 million
United Broadcasting Corporation Public Company Limited
118/1 Tipco Building Rama 6 Road, Phayathai, Bangkok
THB 9,704.05 million
NC True Company Limited
Developer and service THB 125.5 million 18 True Tower, 18th Floor Ratchadaphisek Road provider of online game Huai Khwang, Bangkok 10310
N.T.U. (Thailand) Company Limited
518/5 Maneeya Center Building, Telecommunication 7th Floor, Ploenchit Road, Lumpinee, Pathumwan, Bangkok
THB 12 million
Thai Smart Card Company Limited
191 Silom Complex Building 27th Floor, Room No. 2, Silom Road, Bangrak, Bangkok
THB 395 million
NEC Corporation (Thailand) Company Limited
Telecommunication THB 343 million 159 Sermmit Tower 2nd, equipment manufacturer 24th Floor, Sukumvit 21 Klongtoeynua Wattana Bangkok
Pay Television
Central Service Bureau for clearing electronic payment transactions
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 43
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, Klong Toey Bangkok 10110 Telephone : (662) 229-2800, (662) 654-5599 Fax : (662) 359-1262-63 : Mr. Kajornkiet Aroonpirodkul (CPA Registration No. 3445) and/or Mrs. Nattaporn Phan-Udom (CPA Registration No. 3430) and/or Mr. Boonmee Ngotngamwong (CPA Registration No. 3673) PriceWaterhouseCoopers ABAS Ltd. 15th Floor, Bangkok City Tower 179/74-80 South Sathorn Road, Sathorn Bangkok 10120 Telephone : (662) 286-9999, (662) 344-1000 Fax : (662) 286-5050 : Thai Military Bank Public Company Limited 393 Silom Road, Bangrak, Bangkok 10500 Telephone : (662) 233-9160-79 (662) 230-5000 Fax : (662) 236-7939 : Siam Premier International Law Office Limited 24th - 26th Floors, Thai Wah Tower 2 21/147 -150 South Sathon Road Bangkok 10120 Telephone : (662) 679-1333 Fax : (662) 679-1314 Website : www.siamlaw.co.th
44 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 45
While True sees many opportunities to grow in 2005, there are a number of general and specific factors that could impact the companyûs performance and that of its subsidiaries. Industry Risks True and its subsidiaries, particularly TA Orange and its Internet and Broadband businesses, face increasing competition from cellular operators, TOT and new ISP market entrants. As a result, the tariff for mobile phone calls and Broadband service has fallen steadily over the past year, which has had, and will continue to have, an impact on operational results. We expect competition to remain intense in the future, but believe True is well positioned to meet this given its leadership position in the Internet/Broadband market and TA Orangeûs strong 2004 revenue growth and expanding customer base. In addition, rapid technological change could also adversely affect the viability of Trueûs business and make its own technology less competitive. However, at the time of writing no such new technology has been identified as a major current or imminent business threat. Regulatory and Liberalization Risks True and its subsidiaries operate under a number of concessions granted by TOT Corporation Public Company Limited and CAT Telecom Public Company Limited. A dispute with either TOT or CAT over compliance with a concession agreement could affect Trueûs ability to conduct business. This concession could be cancelled by TOT if True violates laws relating to public or national security, the Company is placed under receivership by a court in a bankruptcy case, or it willfully and continually breaches a concession agreement in any material respect. However, TOT must submit the case to the Arbitration Tribunal for adjudication before it can cancel the concession agreement with True. Under revenue sharing provisions of Trueûs fixed line concession, TOT collects all of Trueûs fixed line revenues and retains a portion for the revenue sharing. TOT may withhold or delay payments from revenues collected for True to offset any obligations it believes it is owed (although this has not occurred to date).
46 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
As well as being Trueûs concession granter, TOT is also a competitor in the BMA fixed line market. This has and could continue to lead to disputes between True and TOT, which can deny or put on hold Trueûs requests to launch new services. TOT and True have brought some disputes to the Administrative Court and the Arbitration Tribunal for adjudication. In August 2002 True asked the Arbitration Tribunal for compensation from TOT for access charge revenues TOT generated using Trueûs network. In August 2004, True asked the Arbitration Tribunal for compensation from TOT for sharing on revenues generated from additional public phones apart from the first 20,000 sets. In January 2005, True also asked the Arbitration Tribunal to ensure TOT shared revenues from incoming international calls based on the rate indicated in the concession. In July 2004 TOT asked the Arbitration Tribunal to require True to pay advertising cost for placing Trueûs logo on Payphone booths. And in December 2004, TOT also sought costs for placing the True logo on invoices and receipts. The pending liberalization of the Thai telecommunications industry is expected to reduce or eliminate these conflicts of interest, but proposed initiatives could put True at a disadvantage to competitors. It is also possible that certain policies to be imposed by the National Telecommunications Committee may affect Trueûs operating costs and/or increase competition in the sectors in which it operates. Risks Related to Financial Situation Trueûs operation is restricted by a number of debt and other financial agreements. These agreements could prohibit True from exploiting good business opportunities or lead to accelerated debt repayment if TOT cancels the concession agreement with the Company. However, TOT must seek an arbitration decision in order to cancel the concession agreement. True is subject to exchange rate fluctuations, which could increase interest payments. True had total debt of Baht 84 billion as at December 31, 2004, with 13 percent of this being denominated in foreign currencies (Japanese Yen and US Dollar). In 2004, the Company had consolidated capital expenditure of approximately Baht 4.0 bil ion, approximately 40 percent of which was in foreign currencies. The Company has put in place hedging tools to reduce its exposure to exchange rate fluctuations, primarily for the majority portion of a USD 170 million loan belonging to a subsidiary. Out of the Companyûs total debt, about 50 percent is subject to floating interest rates and vulnerable to rate increases. All TA Orange debt, accounting for approximately 37 percent of total consolidated debt, is subject to floating rates. However, TA Orange debt interest rates will step down over time if it is able to achieve conditions set out in its loan agreement.
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 47
Shareholders True Corporation Public Company Limited Major Shareholders1 (as of 30th December 2004) Name 1. CP GROUP2 2. THAILAND SECURITIES DEPOSITORY COMPANY LIMITED FOR DEPOSITORS (FOREIGN) 3. THAILAND SECURITIES DEPOSITORY COMPANY LIMITED FOR DEPOSITORS (THAI) 4. THAI TRUST FUND 5. KREDITANSTALT FÜR WIEDERAUFBAU (çKfWé) 6. MR. JATURONG JATUPARISUTHI 7. MR. SOONTHORN ARUNANONCHAI 8. MISS PIMRA INTHARAVITTAYANUN 9. MR. CHALEO SOUVANNAKITTI 10. VATCHARAPOL CO., LTD.
No. of Shares (Million Shares) 1,605.14 1,240.97
% of Total Issued Shares 39.22 30.32
468.91
11.46
357.99 341.47 11.08 5.00 4.50 3.50 3.00
8.75 8.34 0.27 0.12 0.11 0.08 0.07
Remark : 1Including common shares and preferred shares 2 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, Unigue 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 Limited.
48 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
The Company has not paid or declared any dividends on its issued shares since operation commencement. The Company can pay dividends only out of its profits after deducting its cumulative losses, and only if it has set aside as a legal reserve. The Companyûs restructuring agreement also limits its ability to pay dividends until all of its indebtedness is repaid in full. The Companyûs principal shareholders have entered into a shareholdersû agreement under which they agreed to vote for and cause their representatives appointed to the Companyûs Board of Directors to declare an annual dividend equal to at least 50% of its net profits for that year, after statutory reserves and subject to availability of cash, the regulations of the SET, and its credit facilities. Before dividends can be paid to holders of its ordinary shares, however, dividend payments on preferred shares must be paid in full. Within March 31, 2008, the eighth anniversary from the date its preferred shares were issued, the Companyûs preferred shareholders are entitled to receive cumulative dividends at the rate of Baht 1 per share per fiscal year. After March 31, 2008, holders of our preferred shares are entitled to a non-cumulative dividend at the rate of Baht 0.01 per share per fiscal year. The right to receive cumulative dividends for any fiscal year in which the payment of those dividends was not declared ceases once a holder converts its preferred shares into ordinary shares. For dividend policy of subsidiary company, each subsidiary companyûs Board of Directors will consider the payment of dividends from the balance of cash flows compare with capital investment of individually subsidiary company. Subject to the availability of cash flows of subsidiary company and only if it has set aside as a legal reserve, each Board of Directors of individually subsidiary company shall consider the payment of dividends just in case.
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 49
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 As of 31st December 2004, the Board of Directors comprises of 20 directors who are (a) Executive Directors (b) Non-Executive Directors including directors representing the creditors, and (c) Independent Directors means a director who is independent from a major shareholder or a group of major shareholders and having the qualification as follows:- not being an employee or a staff member or an advisor who receives a regular salary or any other benefit from the Company, an affiliated company, associated company or a related company - not holding shares exceeding 0.5 percent, including shares held by a related person, of paid-up capital of the Company or an affiliated company, associated company or a related company - the ability to take care of the interest of all shareholders equally - the ability to prevent conflict of interest among the Company and its management, major shareholders or other companies which have the same group of management or major shareholders as the Company The Board of Directors of the Company is as follows: 1. 2.
Mr. Narong Mr. Vitthya
Name Srisa-an Vejjajiva
3.
Dr. Kosol
Petchsuwan
4.
Mr. Joti
Bhokavanij
5. 6. 7. 8. 9. 10.
Mr. Dhanin Mr. Sumet Dr. Ajva Mr. Chaleo Mr. Athueck Mr. Supachai
Chearavanont Jiaravanon Taulananda Souvannakitti Asvanund Chearavanont
11. 12.
Mr. Soopakij Chearavanont Mr. Chatchaval Jiaravanon
13.
Mr. Vichaow
Rakphongphairoj
Position Independent Director Independent Director and Chairman of the Audit Committee Independent Director and Member of the Audit Committee Independent Director and Member of the Audit Committee Chairman Vice Chairman Vice Chairman Vice Chairman Vice Chairman and Group General Counsel Director, President and Chief Executive Officer Director Director and Managing Director-Group Investment Director, Managing Director and Chief Operating Officer
50 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
Name 14. 15. 16. 17. 18. 19. 20.
Mr. Umroong Mr. Heinrich Mr. Klaus Mr. Claus Mr. Andreas Mr. Harald Dr. Lee G.
Sanphasitvong Heims Tuengeler Stadler Klocke Link Lam
Position Director Director Director Director Director Director Director
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 Mr. Narong Srisa-an, Dr. Kosol Petchsuwan and Mr. Joti Bhokavani has already taken çDirectors Accreditation Programé (DAP) from Thai Institute of Directors Association (IOD) Mr. Vitthya Vejjajiva, Dr. Kosol Petchsuwan and Mr. Joti Bhakavanij has already taken çChairman 2000é from Thai Institute of Directors Association (IOD) Authority and Responsibility of the Board of Directors The Board of Directors is granted the authority and duty to manage the Company in compliance with the objectives and articles of association of the Company and the resolutions of the shareholders meetings. With regard to the management of the Company, the Board of Directors has authority to make any decision related to the 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.
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 51
With regard to the right of shareholders to appoint directors, each shareholder shall appoint the directors by a majority vote. All Shareholders have the rights to appoint directors. Each shareholder shall have one right to vote per one share and shall appoint one director or more, provided that he cannot divide his votes to any person to any extent. In selecting an independent director, the Company will take into account of the prospect没s qualifications that required by the Stock Exchange of Thailand together with the background and experiences appropriate for the Company business prior to proposing the nomination of the prospect to the Compensation and Nominating Committee and the Board of Directors for further approval. Audit Committee As of 31st December 2004, the Audit Committee of the Company consists of 3 persons as follows: 1. Mr. Vitthya 2. Dr. Kosol 3. Mr. Joti
Vejjajiva Petchsuwan Bhokavanij
Chairman of the Audit Committee Member of the Audit Committee Member of the Audit Committee
The scope of duty and responsibility of the Audit Committee is as follows: 1. To review the Company没s financial reports to ensure accuracy and adequate information for public disclosure; 2. To ensure the appropriateness and effectiveness of internal control system and internal auditing system of the Company; 3. To consider and propose the appointment and remuneration of an external auditor of the Company; 4. To regularly review the practice of the Company to ensure the compliance with the regulations of the Securities and Exchange Act, Rules and Regulations of the Stock Exchange of Thailand and related law and regulations; 5. To review the disclosure of information of the Company to ensure the accuracy and adequacy of said information in case that there is a connected transaction that may lead to a conflict of interest; 6. To prepare the Audit Committee Report on the Corporate Governance with the approval of the Chairman of the Committee appeared therein to be disclosed in the annual report of the Company; and 7. To perform any other act as required by law or as delegated by the Board of Directors. Independent Committee The Independent Committee is responsible 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: 1. Mr. Narong 2. Mr. Joti 3. Mr. Klaus
Srisa-an Bhokavanij Tuengeler
Independent Director Independent Director KfW-nominated Director (with the alternate of Mr. Andreas Klocke or Mr. Claus Stadler)
52 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
4. Mr. Supachai 5. Mr. Athueck
Chearavanont Asvanund
CP-nominated Director CP-nominated Director
In the case of any major shareholder having a conflict of interest, Directors nominated by the said shareholder will abstain from the Independent Committee Meeting. Compensation and Nominating Committee The Compensation and Nominating Committee is responsible for determining the compensation and considering the nomination of the directors of the Company. The committee consists of the following members: 1. Mr. Dhanin 2. Mr. Heinrich 3. Mr. Soopakij 4. Mr. Umroong
Chearavanont Heims Chearavanont Sanphasitvong
Finance Committee The Finance Committee assists the Company in reviewing and monitoring the financial management of the Company. The committee consists of the following members: 1. Dr. Ajva 2. Mr. Chaleo 3. Mr. Heinrich 4. Mr. Umroong
Taulananda Souvannakitti Heims (alternates being Mr. Klaus Tuengeler or Mr. Andreas Klocke) 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. Dr. Ajva 2. Mr. Vitthya 3. Mr. Claus 4. Mr. Athueck 5. Mr. Supachai 6. Mr. William E.
Taulanada Vejjajiva Stadler Asvanund Chearavanont Harris
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 53
Executive Officers As of 31st December 2004, the executive officers of the Company are as follows: 1. Mr. Supachai
Chearavanont
2. Mr. Vichaow
Rakphongphairoj
3. Mr. Chatchaval
Jiaravanon
4. Mr. Athueck
Asvanund
5. Mr. William E. 6. Mr. Thiti
Harris Nantapatsiri
7. Mr. Adhiruth
Thothaveesansuk
8. Mr. Songtham
Phianpattanawit
Director, President and Chief Executive Officer Director, Managing Director and Chief Operating Officer Director and Managing Director-Group Investment Vice Chairman, Group General Counsel and Acting Company Secretary Chief Financial Officer Managing Director Home / Consumer Solution & Highspeed Access Managing Director Office / SME Solution & Wireless Access Managing Director Corporate Solution, Wholesales & Data
Remark: 1. Executive Officers mean Directors, President or persons with managerial authority who are among the top four ranking individuals in the Company, after the President, and all other persons who occupy a position equivalent to such a top four ranking individual. 2. Additional information related to the Company没s Executive Officers is as follows: a) History of Offence : none b) Debt owed to the Company or its Subsidiaries : none c) Material Connected Transactions : none Authority and Responsibility of the President The President has the authority to supervise and carry on the Company没s day-to-day business, and in case any matter/ transaction is important, the President will submit said matter/ transaction to the independent directors and/or the relevant Committee (such as the Finance Committee, the Compensation and Nominating Committee or the Independent Committee) and/or the Board of Directors, as the case may be, to approve said matter/ transaction. In addition, the President has no authority to approve any matter/ transaction that he or the person who may have a conflict of interest or any other form of conflict, which the Company or the Company没s subsidiaries have or propose to enter into, with the Company or the Company没s subsidiaries. In such case, such matter/ transaction shall have to be approved by the independent directors and/ or the relevant Committee and/or the Board of Directors, as the case may be.
54 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
Remuneration for the Company没s Directors and the Executive Officers (1) Remuneration of the Director The 20 committee members are remunerated Baht 37.20 million for the Year 2004. Details of Remuneration of each Director are as follows: Chairman Honorary Chairman Vice Chairman Director
Baht 300,000 per month Baht 200,000 per month Baht 150,000 per month Baht 100,000 per month
In this connection, any director being the Company没s employee shall receive the director没s remuneration in addition to his salary as employee. Furthermore, Independent Directors who hold a position in the Committee, shall receive the remuneration as follows: Independent Director who is also Baht 300,000 per month the Chairman of the Committee Independent Director who is also Baht 200,000 per month a member in the Committee Whereby the remuneration of the Independent Directors who are not the member in the Committee and directors who are not the Independent Directors shall remain the same. (2) Remuneration of the Executive Officers The 8 executives at the top level received remuneration totaling Baht 96.05 million for the Year 2004 from January to December, which included Baht 85.20 million for salary, Baht 6.94 million for bonus and Baht 3.90 million for provident fund. (3) Other Compensation (3.1) Employee Stock Option Plan 2004 (3.2) Employee Stock Option Plan 2003 (3.3) Employee Stock Option Plan 2002 (3.4) Employee Stock Option Plan 2000 (3.1) Employee Stock Option Plan 2004 The Extraordinary General Shareholders Meeting No. 2/2547 of the Company for the year 2004 held on 10th June 2004 has approved the issuance and the offer of non-transferable warrants to purchase the Company没s ordinary shares to certain Directors and employees at executive level totaling not exceeding 35 persons. Summary details are as follows:
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 55
Number of Warrants Issued and Outstanding
: 18,274,444 units
Date of Issuance
: 7th February 2005
Maturity
: 5 years from the issuance date
Date of Expiry
: 6th February 2010
Exercise Period
: Each Warrant Holder received 3 separate warrant certificates. Each certificate represented 1/3 of the whole amount of warrants allotted and shall be exercisable for subscribing ordinary shares as follow: The 1st Certificate: Warrant Holders shall be starting exercising from 7th February 2006 until its expiration. nd The 2 Certificate: Warrant Holders shall be starting exercising from 7th February 2007 until its expiration. rd The 3 Certificate: Warrant Holders shall be starting exercising from 7th February 2008 until its expiration.
Exercise Ratio
: One unit of warrants entitles to purchase one ordinary share at Baht 11.20
(3.2) Employee Stock Option Plan 2003 The Annual General Shareholders Meeting of the Company for the year 2003 held on April 11, 2003 has approved the issuance and the offer of non-transferable warrants to purchase the Company没s ordinary shares to certain Directors and employees at executive level totaling not exceeding 35 persons. Summary details are as follows: Number of Warrants Issued and Outstanding (as at 28th February 2005)
: 18,097,664 units
Date of Issuance
: 17th June 2003
Maturity
: 5 years from the issuance date
Date of Expiry
: 16th June 2008
56 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
Exercise Period
: Each Warrant Holder received 3 separate warrant certificates. Each certificate represented 1/3 of the whole amount of warrants allotted and shall be exercisable for subscribing ordinary shares as follow: The 1st Certificate: Warrant Holders shall be starting exercising from 17th June 2004 until its expiration. nd The 2 Certificate: Warrant Holders shall be starting exercising from 17th June 2005 until its expiration. rd The 3 Certificate: Warrant Holders shall be starting exercising from 17th June 2006 until its expiration.
Exercise Ratio
: One unit of warrants entitles to purchase one ordinary share at Baht 5.20
(3.3) Employee Stock Option Plan 2002 The Annual General Shareholders Meeting of the Company for the year 2002 held on April 12, 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: Number of Warrants Issued and Outstanding
: 37,131,597 units
Date of Issuance
: 14th June 2002
Maturity
: 5 years from the issuance date
Date of Expiry
: 13th June 2007
Exercise Period
: Each Warrant Holder received 3 separate warrant certificates. Each certificate represented 1/3 of the whole amount of warrants allotted and shall be exercisable for subscribing ordinary shares as follow:
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 57
The 1st Certificate: Warrant Holders shall be starting exercising from 14th 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. Exercise Ratio
: One unit of warrants entitles to purchase one ordinary share at Baht 10.60
(3.4)Employee Stock Option Plan 2000 The Annual General Shareholders Meeting of the Company for the year 2000 held on April 27, 2000 has approved the issuance and 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: Number of Warrants Issued and Outstanding
: 36,995,000 units
Date of Issuance
: 9th June 2000
Maturity
: 10 years from the issuance date
Date of Expiry
: 9th June 2010
Exercise Period
: (a) Warrant Type 1: Each Warrant Holder received 3 separate warrant certificates. Each certificate represented 1/3 of the whole amount of warrants allotted and is exercisable for subscribing ordinary shares starting from June 30, 2000, 2001 and 2002 respectively. (b) Warrant Type 2: Each Warrant Holder received 3 separate warrant certificates. Each certificate represented 1/3 of the whole amount of warrants allotted and is exercisable for subscribing ordinary shares starting from December 31, 2000, 2001 and 2002 respectively.
Exercise Ratio
: One unit of warrants entitles to purchase one ordinary share at Baht 10.60
58 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
Details of Warrant-holding under ESOP Plan Warrants under ESOP 2004
Warrants under ESOP 2003
Warrants under ESOP 2002
Warrants under ESOP 2000
Name 1. Dr. Ajva Taulananda 2. Mr. Soopakij Chearavanont 3. Mr. Supachai Chearavanont 4. Mr. Vichaow Rakphongphairoj 5. Mr.Chatchaval Jiaravanon 6. Mr. Athueck Asvanund 7. Mr. William E. Harris 8. Mr. Adhiruth Thothaveesansuk 9. Mr. Thiti Nantapatsiri 10. Mr. Songtham Phianpattanawit
No. of No. of % of % of warrants Project warrants Project
No. of No. of % of % of warrants Project warrants Project
----------2,434,077 1,277,890 1,277,890 1,331,136 1,277,890 1,277,890 1,277,890 1,277,890
-----------7,058,824 3,088,235 3,705,882 3,860,294 3,000,000 1,503,662 -----------
----------12.74 6.69 6.69 6.97 6.69 6.69 6.69 6.69
-----------3,696,402 1,617,176 1,940,611 2,021,470 1,297,838 850,404 -----------
----------18.61 8.14 9.77 10.18 6.53 4.28 -----------
----------19.01 8.32 9.98 10.40 8.08 4.05 -----------
2,240,000 4,130,000 6,510,000 2,800,000 4,130,000 5,320,000 945,000 ----------------
6.06 11.16 17.60 7.57 11.16 14.38 2.55 ----------------
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 59
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 the 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 they/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 As of 31st December 2004, the total number of employees is as follows: Work Group and Classification Management Service Area & Network Operation Marketing & Sales Information Technology Customer Services Finance & Accounting Supporting Total Source : the Company
No. of Employees 82 2,273 425 242 799 230 286 4,337
60 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
Remuneration for the Company没s Employees Remuneration In 2004, the total remuneration for employees was approximately Baht 2,026.89 million which consists of wages, salaries, bonus, overtime compensation, commission, provident fund and others. (please see details in the note 27 to the financial statements) Other Compensation & Benefits Health Plans and Employee Welfare - In-house clinic - Annual Medical Check-up - New Employee没s Medical Check-up - Group Health Insurance - Group Accident Insurance - Group life Insurance - In case of death: Baht 30,000. - / Person - Social Security Fund - Each of the Company and employees contributes 5% of monthly salary (If any employee没s salary is more than Baht 15,000 a month, it was calculated only Baht 15,000 as the basic of funding). Said employee will gain special benefits from the Fund to have medical treatment at designated hospitals. Paid Annual Leave - After 1 year of service, employees are eligible for annual leave as below: - Assistant Director Level and upwards are eligible for 15 days per annum and the others are eligible for 10 days per annum - Employees have to take accountability to complete their annual leave by December otherwise, annual leave cannot be accumulated to the subsequent year. - Annual leave can be accumulated to the subsequent year only in case of urgent of work. The accumulation should be approved by authorized superior, but the total days should not be more than 30 for level of Assistant Director and upwards and 20 for the others. Compensation - Monthly Salary - Annual Performance Pay: between 0-4 times of monthly salary, subject to the Company没s performance and financial status. - 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.
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 61
Employee Training and Development Employee Training and Development Policy To encourage all employees to develop their knowledge, skills and attitude to be able to perform their jobs effectively and to be more competent for career advancement, which assists the Company in achieving its corporate strategy and goals. At present, the Company provides employees with various training and development programs, such as Core Competency Program, Functional Competency Program, True Core Business Program, etc.
62 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
DIRECTORS没 INFORMATION (AS OF 31st DECEMBER 2004) Name
Position
Age
True Share Experience Ownership (31/12/47) 77 10,000 Shares 1998-Present Independent Director True Corporation Public Company Limited Present Chairman Advanced Agro Public Company Limited Chairman Thanakorn Vegetable Oil Products Company Limited Chairman Surabangyikhan Company Limited Chairman Thai Beverage Can Limited Chairman Eastern Seaboard Industrial Estate (Rayong) Company Limited Chairman Thai Alcohol Public Company Limited Chairman of the Executive Board Siam Food Products Public Company Limited Chairman of the Executive Board Beer Thai (1991) Public Company Limited Vice Chairman Berli Jucker Public Company Limited
(Year)
Mr. Narong Srisa-an
Independent Director
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 63
Name
Position
Age (Year)
True Share Ownership (31/12/47)
Experience
Vice Chairman General Tobacco Company Limited Vice Chairman Thai Beverages Public Company Limited Executive Director Com-link Company Limited Mr. Vitthya Vejjajiva
Independent Director and Chairman of the Audit Committee
68
-
1998-Present Independent Director and Chairman of the Audit Committee, True Corporation Public Company Limited Chairman K Line (Thailand) Company and its subsidiaries 1991-1992 Permanent Secretary of the Ministry of Foreign Affairs 1998 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
64 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
Name
Position
Age
Dr. Kosol Petchsuwan
Independent Director and Member of the Audit Committee
66
True Share Ownership (31/12/47) -
Mr. Joti Bhokavanij
Independent Director and Member of the Audit Committee
62
-
(Year)
Experience
1999-Present Independent Director and Member of the Audit Committee True Corporation Public Company Limited 1999-Present President The Telecommunications Association of Thailand 2000-2001 Chairman The Aeronautical Radio of Thailand Company 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 True Corporation 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) Company Limited Consult-General of Denmark for Bangkok
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 65
Name
Position
Age (Year)
Mr. Dhanin Chearavanont
Chairman
65
True Share Ownership (31/12/47) -
Experience
1989-Present Chairman True 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
Mr. Sumet Jiaravanon
Vice Chairman
70 150,000 shares 1993-Present Vice Chairman True Corporation Public Company Limited Executive Chairman Charoen Pokphand Group Company Limited
Dr. Ajva Taulananda
Vice Chairman
67
-
1992-Present Vice Chairman True 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 True Corporation Public Company Limited 1991-1992 Duputy Minister Ministry of Agriculture and Cooperatives
66 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
Name
Position
Age
True Share Experience Ownership (31/12/47) 76 3,500,000 shares 1992-Present Vice Chairman True Corporation Public Company Limited Director Telecom Holding Company Limited
(Year)
Mr. Chaleo Souvannakitti
Mr. Athueck Asvanund*
* Authorized Signatory
Vice Chairman
Vice Chairman and Group General Counsel
53
-
1997-Present Vice Chairman and Group General Counsel True Corporation Public Company Limited Director Telecom Holding Company Limited Director True 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 2002-Present Director TA Orange Company Limited Present Director Aqua-Agri Foods International, Inc. 1978-1997 Baker & McKenzie
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 67
Name
Position
Age (Year)
Mr. Supachai Chearavanont*
Director, President and Chief Executive Officer
Mr. Soopakij Chearavanont*
Director
* Authorized Signatory
True Share Ownership (31/12/47)
Experience
37 1,240,000 shares 1999-Present Director, President and Chief Executive Officer True Corporation Public Company Limited 1992-1999 Director and Senior Executive Vice President True Corporation Public Company Limited 40
-
1992-Present Director True Corporation Public Company Limited 2000-Present Executive Chairman Telecom Holding Company Limited 1998-Present Chairman United Broadcasting Corporation Public Company Limited 1991-Present Chairman Lucent Network Technology (Thailand) Limited
68 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
Name
Mr. Chatchaval Jiaravanon*
* Authorized Signatory
Position
Director and Managing Director Group Investment
True Share Ownership (31/12/47)
Experience
(Year)
Age
42
-
1993-Present Director and Managing Director Group Investment True 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., True Multimedia Company Limited True Internet Company Limited Asia Infonet Company Limited 1992-Present Director Thai Kodama Company Limited 1990-Present Director Metro Machinery Public Company Limited
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 69
Name
Mr. Vichaow Rakphongphairoj*
* Authorized Signatory
Position
Director Managing Director and Chief Operating Officer
Age
Experience
(Year)
True Share Ownership (31/12/47)
47
-
2000-Present Director, Managing Director and Chief Operating Officer True Corporation Public Company Limited 1998-2000 E.V.P., Business & Enterprise True Corporation Public Company Limited 1997-1998 E.V.P., Central Operation & Information Technology True Corporation Public Company Limited 1996-1997 Region Director, Bangkok-Southeast Region True Corporation Public Company Limited 1995-1996 Region Director, Bangkok-West Region True Corporation Public Company Limited
70 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
Name
Position
Age (Year)
True Share Ownership (31/12/47)
Experience
Mr. Umroong Sanphasitvong
Director
51 384,000 shares 2001-Present Director True 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 Director Ayudhya Allianz C.P. Public Company Limited Director CPPC Public Company Limited
Mr. Heinrich Heims
Director
53
-
2000-Present Director True Corporation Public Company Limited 2004-Present COO / Member of the Board of Managing Directors of KfW IPEX-Bank 1998-Present Senior Vice President - Export and Project Finance KfW 1978-1998 Export Finance KfW
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 71
Name
Position
True Share Ownership (31/12/47)
Experience
(Year)
Age
Mr. Klaus Tuengeler
Director
63
-
2000-Present Director True Corporation Public Company Limited Present First Vice President-Export and Project Finance Telecommunications, Natural Resources KfW
Mr. Claus Stadler
Director
46
-
2000-Present Director True Corporation Public Company Limited Present Deputy General Counsel, Head of the Legal Department (Frankfurt) KfW
Mr. Andreas Klocke
Director
48
3,500 shares
2000-Present Director True Corporation Public Company Limited Present Head of KfW没s South-East Asia Regional office in Bangkok in Charge of KfW Affairs in Thailand and South- East Asia Region
72 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
Name
Position
Age (Year)
True Share Ownership (31/12/47)
Experience
Mr. Harald Link
Director
49 50,000 shares 2000-Present Director True Corporation Public Company Limited 1987-Present Managing Partner B. Grimm & Co. R.O.P. Chairman B. Grimm Group of Companies 1981-1986 Director, Executive Committee B. Grimm & Co. R.O.P. 1979-1980 Assistant to Managing Partner B. Grimm & Co. R.O.P.
Dr. Lee G. Lam
Director
45
-
2003-Present Director True 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 Mil icom 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
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 73
Executive Officers没 Information (As of 31st December 2004) Name
Position
Age (Year)
True Share Ownership (31/12/47)
Experience
Mr. Supachai Chearavanont
Director, President and Chief Executive Officer
37 1,240,000 shares 1999-Present Director, President and Chief Executive Officer True Corporation Public Company Limited 1992-1999 Director and Senior Executive Vice President True Corporation Public Company Limited
Mr. Vichaow Rakphongphairoj
Director Managing and Chief Operating Office
47
-
2000-Present Director, Managing Director and Chief Operating Officer True Corporation Public Company Limited 1998-2000 E.V.P., Business & Enterprise True Corporation Public Company Limited 1997-1998 E.V.P., Central Operation & Information Technology True Corporation Public Company Limited 1996-1997 Region Director, Bangkok-Southeast Region True Corporation Public Company Limited 1995-1996 Region Director, Bangkok-West Region True Corporation Public Company Limited
74 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
Name
Mr. Chatchaval Jiaravanon
Position
Director and Managing Director Group Investment
True Share Ownership (31/12/47)
Experience
(Year)
Age
42
-
1993-Present Director and Managing DirectorGroup Investment True 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. True Multimedia Company Limited True Internet Company Limited Asia Infonet Company Limited 1992-Present Director Thai Kodama Company Limited 1990-Present Director Metro Machinery Public Company Limited
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 75
Name
Position
True Share Ownership (31/12/47)
Experience
(Year)
Age
-
1997-Present Vice Chairman and Group General Counsel True Corporation Public Company Limited Director Telecom Holding Company Limited Director True 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 2002-Present Director TA Orange Company Limited Present Director Aqua-Agri Foods International, Inc. 1978-1997 Baker & McKenzie
Mr. Athueck Asvanund
Vice Chairman and Group General Counsel
53
Mr. William E. Harris
Chief Financial Officer
42 100,000 shares 2001-Present Chief Financial Officer True Corporation Public Company Limited 1998-2000 Executive Vice President Corporate Finance True Corporation Public Company Limited 1993-1998 Director Credit Policy, Verizon Communications, Philadelphia
76 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
Name
Position
Age (Year)
Mr. Adhiruth Thothaveesansuk
Mr. Songtham Phianpattanawit
Managing 42 Director Office / SME Solution & Wireless Access
Managing Director Corporate Solution, Wholesales & Data
True Share Ownership (31/12/47) -
Experience
2003-Present Managing Director-Office / SME Solution & Wireless Access True Corporation Public Company Limited Acting President Asia Wireless Communication Company Limited 2002 Chief Commercial Officer TA Orange Company Limited 2001 Executive Vice President True Corporation Public Company Limited 1998-2002 General Manager Wire & Wireless Company Limited 1998-2001 President Asia Wireless Communication
47 100,000 shares Present
Managing Director - Corporate Solution, Wholesales & Data True Corporation Public Company Limited Executive Director - Corporate Solution TA Orange Company Limited Acting President True Multimedia Company Limited Acting President Wire & Wireless Company Limited President True Internet Data Center Company Limited
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 77
Name
Position
Age (Year)
True Share Ownership (31/12/47)
Experience
2001-2003
2001-2002 2000
1998 1997
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
78 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
Name
Mr. Thiti Nantapatsiri
Position
Managing Director Home / Consumer Solution & Highspeed Access
(Year)
Age
True Share Ownership (31/12/47)
51
-
Experience
Present
1999-2003 2001-2002 1992-2000 1997-1999
Managing Director- Home / Consumer Solution & Highspeed Access True Corporation Public Company Limited Executive Vice President Loxley Public Company Limited President & CEO Hutchison CAT Wireless Multimedia Company Limited President & CEO Hutchison Telecommunications (Thailand) Company Limited First Senior Vice President Loxley Public Company Limited
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 79
The Company Directors没 Shareholding in TRUE没s affiliates as at 31st December 2004 are as follows: Director
Company
Change in 2004
Outstanding Share(s)
Mr. Dhanin Chearavanont Telecom Holding Co., Ltd. Bangkok Inter Teletech Co., Ltd.
-
1 1
Mr. Sumet Jiaravanon
Bangkok Inter Teletech Co., Ltd.
-
1
Mr. Chaleo Souvannakitti
Telecom Holding Co., Ltd. Telecom International Co., Ltd. Telecom Equipment Manufacturing Co., Ltd.
-
1 1 1
Dr. Ajva Taulananda
Telecom International Co., Ltd. Telecom Training and Development Co., Ltd. Telecom Equipment Manufacturing Co., Ltd. U-Net Co., Ltd. True Internet Co., Ltd. (Formerly named Asianet Corporation Co., Ltd.) Asia DBS Public Company Limited Asia Infonet Co., Ltd. Asia Wireless Communication Co., Ltd. True Multimedia Co., Ltd. (Formerly named Asia Multimedia Co., Ltd.) N.T.U. (Thailand) Co., Ltd.
-
1 1
-
1
-
1 1
-
1 1 1 1
-
1
-
1 1
-
5
Mr. Chatchaval Jiaravanon Telecom International Co., Ltd. Telecom Equipment Manufacturing Co., Ltd. Wire & Wireless Co., Ltd.
80 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
Director
Company U-Net Co., Ltd. True Internet Co., Ltd. (Formerly named Asianet Corporation Co., Ltd.) Asia DBS Public Company Limited Asia Infonet Co., Ltd. Asia Wireless Communication Co., Ltd. True Multimedia Co., Ltd. (Formerly named Asia Multimedia Co., Ltd.) Yai Kaew Co., Ltd.
Mr. Soopakij Chearavanont
Telecom International Co., Ltd. Telecom Equipment Manufacturing Co., Ltd. U-Net Co., Ltd. True Internet Co., Ltd. (Formerly named Asianet Corporation Co., Ltd.) Asia DBS Public Company Limited Asia Infonet Co., Ltd. Asia Wireless Communication Co., Ltd. True Multimedia Co., Ltd. (Formerly named Asia Multimedia Co., Ltd.)
Mr. Supachai Chearavanont Telecom Holding Co., Ltd. Telecom International Co., Ltd. Telecom Training and Development Co., Ltd. Telecom Equipment Manufacturing Co., Ltd. Wire & Wireless Co., Ltd.
Change in 2004 -
Outstanding Share(s) 1 1
-
1 1 1 1
-
1
-
1 1
-
1 1
-
1 1 1 1
-
1 1 1
-
1
-
5
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 81
Director
Company
Change in 2004
Outstanding Share(s)
U-Net Co., Ltd. True Internet Co., Ltd. (Formerly named Asianet Corporation Co., Ltd.) Asia DBS Public Company Limited Asia Infonet Co., Ltd. Asia Wireless Communication Co., Ltd. True Multimedia Co., Ltd. (Formerly named Asia Multimedia Co., Ltd.) T-Pay Co., Ltd.
-
1 1
-
1 1 1 1
1
1
Mr. Athueck Asvanund
NC True Co., Ltd. T-Pay Co., Ltd.
1
1 1
Mr. Harald Link
Telecom Equipment Manufacturing Co., Ltd.
480,000
480,000
Mr. Vichaow Rakphongphairoj
Telecom International Co., Ltd. Telecom Equipment Manufacturing Co., Ltd. U-Net Co., Ltd. True Internet Co., Ltd. (Formerly named Asianet Corporation Co., Ltd.) Asia DBS Public Company Limited Asia Infonet Co., Ltd. Asia Wireless Communication Co., Ltd. True Multimedia Co., Ltd. (Formerly named Asia Multimedia Co., Ltd.) K.I.N. (Thailand) Co., Ltd. T-Pay Co., Ltd.
-
1 1
-
1 1
-
1 1 1 1
1
1 1
82 ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED
During 2004, the Group carried out the transactions with subsidiaries, associates, joint ventures and related companies and persons as disclosed in the Note 4, Note 9, Note 12, Note 17, Note 22 and Note 32 to financial statements for year ended 31st December 2004. Measures and Procedures for Approving the Entering into of Connected Transactions The Company has measures and procedures for approving the entering into the connected transactions in compliance with the Rules and Regulations of the office of Securities and Exchange Commission (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 agreements executed between the Company and its Secured Creditors, and related agreements. The key terms and conditions in said Agreement and related agreements with regard to connected transactions specify that the Company shall not enter into any 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.
ANNUAL REPORT 2004 TRUE CORPORATION PUBLIC COMPANY LIMITED 83
1. Audit fees The Company and subsidiaries paid for audit fees of Baht 13,431,000 for the year 2004 to appointed auditing firm. 2. Other non-audit fees The Company paid for other non-audit fees, i.e. engagement to perform agree-upon procedures and IT internal audit consulting services to appointed auditing firm. The fee amount of Baht 2,208,000 was paid during the year and the remaining amount of Baht 366,800 was carried forward to the following year upon the completion of work.
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By virtue of a resolution of the Board of Directors of the Company passed at its meeting No. 1/2546 held on 27th February 2003, the Audit Committee was re-appointed to perform duties and discharge responsibilities under the charter for the Audit Committee. During the year 2004, the Audit Committee proceeded as follows: 1. held 8 committee meetings in 2004 in order to discharge its functions as assigned by the Board of Directors. The management was invited to provide extra information in certain agenda items. 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 2005; 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 Stock Exchange of Thailand; 7. closely monitored the work progress of Internal Audit Department in order to enhance effectiveness of the internal audit function and continuously ensured that the Company improved its internal controls system to enhance efficiency and effectiveness and ensure appropriate compliance with applicable regulatory requirements; Towards this end, the Management upon the recommendation of the Audit Committee engaged PricewaterhouseCoopers Risk Management Services Limited to provide IT internal audit consulting services which aim for development of the standards and performance of the IT internal audit activities. In this regard, the Audit Committee has been closely monitoring the progress of the consulting services project which was completed in 2004. This project, which has achieved its purpose, is an essential step in strengthening the IT internal audit function of the Company; 8. initiated a synergic combination of TRUE and TA Orange Internal Audit functions. In view of such synergy, the combined Internal Audit Department will be further strengthened and more effective towards attaining its goals.
(Mr. Vitthya Vejjajiva) Chairman of the Audit Committee
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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 financial statements. The Board of directors has provided and maintained an efficient internal controls 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 financial statements and internal controls system, whose comments on these issues are readily included in the Audit Committee Report in this Annual Report. The Board of Director is of the opinion that the Company没s overall internal controls 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 2004.
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31 December 2004
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The accompanying notes on pages 102 to 158 are an integral part of these financial statements.
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The accompanying notes on pages 102 to 158 are an integral part of these financial statements.
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The accompanying notes on pages 102 to 158 are an integral part of these financial statements.
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The accompanying notes on pages 102 to 158 are an integral part of these financial statements.
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The accompanying notes on pages 102 to 158 are an integral part of these financial statements.
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The accompanying notes on pages 102 to 158 are an integral part of these financial statements.
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