TRUE : Annual Report 2006 by True Corporation Public Company Limited

True

Guide

01 04 12 15 24 32 40

At a Glance Financial Highlights Message from the Chairman Message from the President and CEO Segment Solutions Environmental and Social Responsibility Company Background and Major Developments and Awards

44 48 55 56 65 66 67 73 74 75 108 121 122 123

Independent Directors Corporate Governance Compliance Report Revenue Breakdown by Business Group Corporate Information Investment Structure of True Group References Risk Factors Shareholders Dividend Policy Management Connected Transactions Audit Fees Report of the Audit Committee for the Year 2006 Report of the Compensation and Nominating Committee for the Year 2006

124

Report of the Corporate Governance Committee for the Year 2006

125 126

Report of the Finance Committee for the Year 2006 Report of the Board of Directors’ Responsibilities for Financial Statements for the Year 2006

127 141

Management’s Discussion and Analysis Financial Statements

In this Annual Report 2006, “True”, “Company”, “Afﬁliates”, and “Subsidiaries” refer to True Corporation Public Company Limited and/or its afﬁliates and/or its subsidiaries, as the case may be.

Open

At a Glance

It’s Better Together True is Thailand’s only integrated communications provider, offering a full range of voice, video and data services. We are Thailand’s largest provider of dial-up and consumer broadband Internet, the largest pay-TV provider, the largest ﬁxed-line phone operator in the Bangkok Metropolitan Area (BMA), a leading online game provider and the country’s third-largest mobile phone operator. Our vision is to become Thailand’s leader in convergence lifestyle. We aim to achieve this by offering our customers convenient “anytime/anywhere” access to information, knowledge and entertainment that match with their lifestyles while creating value for our organization, our employees and our shareholders. In 2006, we made impressive progress towards realizing this vision, fulﬁlling our customers’ lifestyle needs and establishing a strong base for future growth. We now offer a wide range of bundling packages for True products and services across our voice, video and data platforms, marketed under the “True” umbrella brand. This will differentiate us from our competitors, help us obtain greater market share and lower churn rates. True is now one of Thailand’s leading lifestyle brands. 2006 Highlights • • • • • • •

Consolidated service revenue Baht 50.4 billion (+21.7%) Consolidated EBITDA Baht 16.9 billion (+7.8%) True Move rebranded and added a record 3.1 million subscribers Consumer Broadband posted record revenue and subscriber growth TrueVisions (formerly UBC) successfully integrated into the Group Group balance sheet strengthened with signiﬁcant debt repayment True Group lifted its subscribers/households to more than 11 million, including: 7.58 million mobile phone (True Move) subscribers 1.98 million ﬁxed-line phone subscribers 0.85 million Internet and broadband subscribers 0.56 million pay-TV (TrueVisions) subscribers 0.35 million WE PCT subscribers

ร า ย ง า น ป ร ะ จํ า ป 2 5 4 9

Page

Convergence

Lifestyle

Annual Report 2006

The Leader

Connect to all our services and enjoy the Convergence Life. True Move is now more than just a phone - it’s a new mobile lifestyle! Do whatever you want, whenever you want, wherever you are. Vote for your favorite show on TrueVisions UBC, download your music and make your ﬁnancial transactions via True Money while having fun chatting with your The new deﬁnition of lifestyle: friends. All at once with Convergence Life by True. Convergence Life by True. Connect with True’s services True Move, TrueVisions UBC, TrueOnline, True Money. Ask for it and you will get it. Enjoy True’s contents - TrueMusic.com, TrueVisions UBC is not just TrueSport, TrueGame, TrueMovie a box - it’s your personalized in TrueWorld.net and TrueLife.com portable TV service. Simply order and access the world. Are you ready? the movie you’ve been dying to watch. Or use the alert message service so you never miss your favorite show.

hi-speed Internet by True connects Financial transactions are now a piece of cake with True Money. Just use your mobile phone to transfer funds between accounts, make payments, top-up your airtime, and much more - all from just about anywhere, 24/7.

you to the world with just a touch. Send messages to your friends or make phone calls via the Internet. You can even watch your favorite shows from TrueVisions UBC when you’re away from home. The simple magic of Convergence Life by True.

Enjoy the free and easy lifestyle of Convergence Life by True. Apply for True’s service now!

5IF -FBEFS

Annual Report 2006

Financial Talk

Financial Highlights

(Unit: Baht millions)

Consolidated Financial Results Service revenues (normalized) 1/ Total revenues (normalized) 1/ EBITDA (normalized) 2/ Operating profit 2/ Net profit (loss) Consolidated Balance Sheets and Cash Flows Total assets Total liabilities Total shareholders’ equity Cash flow from operations Free cash flow 3/ Key Financial and Efficiency Ratios EBITDA margin Operating profit margin Asset Turnover EBITDA / Interest coverage ratio (times) 4/ Net debt / EBITDA (times) 4/ Per Share Data and Others Loss per share (Baht) 5/ Book value per share (Baht) Share price at year-end (Baht) No. of outstanding shares at year-end (million shares) Market capitalization

Annual Report 2006

2006

2005

2004

50,445

41,456

30,366

51,862

44,073

32,728

16,928

15,705

12,930

(95)

684

1,145

(4,180)

(3,263)

605

122,956

117,384

102,625

115,556

109,472

97,888

7,400

7,912

4,738

12,928

11,604

7,381

3,478

1,335

3,419

32.6%

35.6%

39.5%

-0.2%

1.6%

3.5%

42.2%

37.5%

31.9%

2.7

3.3

3.1

4.6

4.8

6.0

(1.36)

(1.17)

(0.03)

1.64

1.93

1.16

6.10

10.00

8.10

4,501.5

4,094.7

4,092.5

27,459.3

40,947.5

33,149.5

Consolidated service revenues and total revenues for the year 2005 have been adjusted to exclude out-of-period accounting adjustment of Baht 282 million for over-accrued revenues from ﬁxed line’s international call service in the year 2004. FY 2004 revenues were retroactively adjusted for comparative purposes.

FY 2005 regulatory cost has been adjusted upwards by Baht 493 million to exclude an out-of-period adjustment for True Move’s change in the calculation method in Q2 2005. FY 2005 revenue sharing was also adjusted upwards by Baht 48 million to exclude the out-of-period adjustment related to remark no.1.

Cash ﬂow from operations less capital expenditure.

Excluding liabilities under ﬁnance lease and FY 2005 debt excluding bridging loan for TrueVisions acquisition.

After accumulated dividends for preferred shares.

Proportionate consolidation of True Move up to Q3 2004, and full consolidation since Q4 2004.

Full consolidation of TrueVisions since Q1 2006, and equity method previously.

Annual Report 2006

Continued Growth in Revenue and EBITDA

+11.4%

2002 200 3 2004

005 2006

Service Revenue (Bt mn)

7,076 10,378 2003

2005 200 6

EBITDA (Bt mn)

11,604 10,269

2002

7,381 3,963

16,928

2002 200 3 2004 2

9,798 11,642 12,930 15,705

4,455 8,753

+7.8%

50,445

41,456

24,215 27,001 30,366

+21.7%

Cash Flows from Operations & CAPEX

2004

12,928 9,450

EBITDA

Service Revenue

2005

Cash ďŹ&#x201A;ows from operations (Bt mn)

2006 CAPEX (Bt mn)

Key Growth Drivers True Move Service Revenue (Bt mn)

Service Revenue (Bt mn)

4,458,643

2006

2002

2003

2004

2005

3,258

22,309

2005

2,047

19,594

2004

11,661

725

8,158

2003

3,708

237

4,458

164,775

2002

Annual Report 2006

300,322

Subscribers

1,743

1,336,228 1,824,990

3,380,383

Consumer Broadband 442,728

Subscribers

7,577,742

2006

It’s Better Together TrueVisions 483,816

457,542

434,815

437,845

558,860

6,563

7,037

7,569

7,943

8,352

Note :

2002

2003

2004

2005

2006

Service Revenue (Bt mn)

Financial results are based on proportionate consolidation of True Move up to Q3 2004, and full consolidation from Q4 2004, and on full consolidation of TrueVisions from Q1 2006 (equity method previously) Consumer Broadband revenues are before intersegment eliminations

Subscribers

Transformed Revenue Proﬁle FY04

FY05 True Move 30.3%

TrueOnline 67.7%

FY06 True Move 49.1% TrueOnline 40.1%

TrueOnline 50.9%

Voice 89% Non-Voice 11% Bt 32,728 mn

TrueVisions 16.2%

Voice 86% Non-Voice 14% Bt 44,073 mn

True Move 43.7%

Voice 69% Non-Voice 31% Bt 51,862 mn

Note : Non-Voice includes revenues from True Move’s non-voice services and TrueOnline’s Internet & Broadband and Data Services.

Improving Balance Sheets

TrueOnline (Bt mn) Note :

2004

49,609 2005

True Move (Bt mn)

42,080

2002

2006 TrueVisions (Bt mn)

Total debt excludes ﬁnance leases and debt issuance costs TrueVisions’ debt includes all long-term loans for TrueVisions acquisition

Note :

2003

Consolidated 1/ 2/

2004

2005

TrueOnline

4.6x 3.9x

54,227

4.8x 4.2x

2003

6.0x 4.4x

2002

62,707

5.9x 4.6x

65,406

Net Debt-to-EBITDA

Total Debt 86,596 94,100 11,724 84,872 1 1 ,117 32,369 32,767 31,675

6.5x 5.1x

72,305 76,736 6,899 14,030

2006

Net debt excludes ﬁnance leases and debt issuance costs 2005 net debt excludes bridging loan for TrueVisions acquisition

Annual Report 2006

Message

MESSAGE

Key

Growing stronger, step - by - step

Dhanin Chearavanont For True, 2006 was characterized by further improvements in our business performance, the initial development of our convergence lifestyle strategy _ including the integration of TrueVisions (formerly UBC) into the Group _ and our part in the reform of the telecommunications industry. 12

Annual Report 2006

The “True” Phenomenon

Turning vision into success

This progress occurred in the face of regulatory challenges and political instability which have impacted the whole telecommunications industry. It was thus very pleasing that True was able to successfully implement the initial steps of its convergence lifestyle strategy. A key outcome was the record subscriber growth posted by True Move in 2006. We are now in a position to continue to prosper well into the future, based on leveraging the True brand across a wide range of products and services as the demand for convergence services increases. Thailand’s rate of economic growth _ around 5 percent in 2006 (measured by GDP) _ is expected to slow slightly in 2007. However, the trend in a developing market such as Thailand of rising demand for key telecommunications services will continue. This will further encourage sustainable growth in our operations, as will the best-value proposition we offer to consumers. Ownership of the industry recently changed significantly. Foreign ownership of our two largest competitors has increased, leaving True as the only genuine Thai-owned private operator. This brings certain responsibilities for True, which we are serious about fulfilling. In last year’s annual report I noted that although regulatory reform was starting to take shape, the key areas of concession conversion and an interconnection (IC) regime remained unresolved. While this is still the case for concession conversion, I am pleased to report that significant progress has been made on achieving a workable IC regime, with the major mobile operators signing IC agreements and setting IC rates in line with NTC regulations introduced in May 2006. True signed an IC agreement with DTAC in November 2006, followed in early January 2007 by a similar agreement with AIS.

Annual Report 2006

This achievement represents a milestone for the Thai telecommunications industry, changing the historical arrangements under which operators connect to each others’ networks, and encouraging fair and free competition _ without discrimination _ among all operators. Under the regime each operator will be able to connect their networks directly to each other, making interconnection payments based on the volume and direction of calls among them. The implementation of the IC regime, and other regulatory reform, will also discourage inefficient practices, and encourage operators to adopt more sensible pricing. This will ensure that Thai consumers benefit from higher quality and greater network coverage. True will continue to push for a fairer competitive environment for Thai telecommunications, as we believe this will eventually benefit consumers. The whole of Thailand joined together in 2006 to celebrate the 60th anniversary of His Majesty King Bhumibol’s accession to the throne, and True was delighted to play its part in the celebrations with our “I Will Do” project. The project’s first campaign, which demonstrated True’s convergence capabilities by using webcam booths and inviting people to pledge their good deeds in tribute to His Majesty, attracted more than 100,000 people. A new campaign has been announced for 2007 _ “12 V: 12 Good Deeds for the King” _ which will mark His Majesty’s 80th birthday during what will also be an auspicious year for Thailand. Finally, I would like to thank True’s shareholders and investors _ both in Thailand and internationally _ for their support. Their strong confidence in our business strategies and our future is greatly appreciated.

Dhanin Chearavanont Chairman

Annual Report 2006

Exclusive

Interview

“True - It’s Better Together” Supachai Chearavanont

Message from the President and CEO What were the highlights of the year for True? There were many highlights, including the successful integration of True Visions (formerly UBC) into the business, the rebranding of True Move at the start of the year and its record subscriber growth, and the strengthening of our balance sheet with further debt repayment, an equity issue and True Move’s international bond offer. TrueVisions’ integration completed the ﬁrst step in our key convergence lifestyle strategy, establishing a platform for future growth and improving customer value. We were able to offer customers a wide range of bundling packages for True products and services, reducing the need for True to compete on price alone, and helping us obtain greater market share and lower churn rates. Financially, True’s consolidated service revenue rose 21.7 percent to Baht 50.4 billion and EBITDA was 7.8 percent higher at Baht 16.9 billion following full consolidation of TrueVisions in early 2006. However, True posted a net loss of Baht 4.2 billion in 2006, an increase from 2005, due mainly to the increased costs relating to mobile and Consumer Broadband network expansion as well as costs relating to the acquisition of TrueVisions. We repaid almost Baht 8 billion of debt as we maintained our commitment to deleveraging. As a result, our consolidated net debt-to-EBITDA ratio reduced to 4.6 times, from 4.8 times 12 months earlier. Annual Report 2006

STRATEGY Y

OUTLOOK FOR 2007

True Group’s subscribers increased to over 11 million by the end of the year. Tru e Mo ve p o s te d p h e n o me n a l s u b s crib e r g ro w th i n 2 0 0 6 , adding 3.1 million subscribers, a 70 percent increase from 2005, to reach 7.6 million. Consumer Broadband lifted its subscribers by 47 percent to 442,728 while TrueVisions enjoyed a 30 percent increase to 629,269, including TrueVisions-True Move bundled packages. This subscriber growth was partly attributed to our convergence lifestyle strategy. Regulatory achievements included the granting of an international Internet gateway license, new ﬁxed line and public phone licenses, and the establishment of an interconnection regime for mobile operators.

Annual Report 2006

At the start of 2006 you renamed your mobile business True Move. What sort of year has it been for True Move? True Move is at the core of True’s convergence lifestyle strategy. The name change from TA Orange emphasizes this, and in a competitive market, the ability to offer True Move subscribers easy access to other products and services within the True Group is a key point of differentiation. During the year we added a record 3.1 million subscribers, capturing almost 32 percent of the market’s net subscriber additions and ﬁnishing the year with an overall market share of 19.3 percent. True Move has now been successful in capturing approximately one-third of the market’s net subscriber additions every year since 2004. True Move service revenue in 2006 rose 13.9 percent to Baht 22.3 billion although EBITDA was 0.5 percent lower at Baht 5.1 billion due mainly to the impact of price competition and higher network operating expenses resulting from our network expansion. The True name is now more widely known and we’ve expanded our mobile network coverage to around 92 percent of the Thai population. We’re the number three player in mobile but we’re growing faster than our rivals, in part because we’re able to bundle True Move with other businesses within the True Group. As the proportion of subscribers to other True services using True Move increases, so will the incentive to remain True customers, and we expect customer churn rates to improve across all businesses. Mobile penetration rates in Thailand are expected to continue to increase from 61 percent at the end of 2006 to 75 percent within the next few years and True Move is well placed to take full advantage of this. How has TrueVisions (formerly UBC) performed as part of the True Group? Our acquisition of TrueVisions makes True a fully integrated communications solutions provider. We are now the only company in Thailand offering consumers a full range of voice (ﬁxed line and mobile), data and video services. Alongside its strategic value to the Group, Thailand’s only nationwide pay-TV provider lifted its service revenue in 2006 by 5.1 percent to Baht 8.4 billion while increasing its EBITDA by 2.5 percent to Baht 2.1 billion as a result of its 30 percent growth in subscriber numbers. As well as attracting customers through the quality of its content and service, TrueVisions has worked with True Move and our Internet business to offer bundled packages offering subscribers value-for-money opportunities that our competitors can’t match. We’ve also made a conscious effort to expand TrueVisions’ mass market reach, which has been a big factor in our

revenue and subscriber growth. While ARPU has inevitably dipped as a result, TrueVisions still has one of the highest ARPUs in Asia, and the expansion of the pay-TV customer base bode well for the future. How has your Consumer Broadband business performed? Consumer Broadband continued its healthy growth, enhancing its position as the market leader, increasing both subscriber numbers and revenue by around 50 percent (to 442,728 and Baht 3.3 billion, respectively). The business is a key component of the Group’s bundled offerings and fundamental to True’s mission of helping develop a knowledge-based society in Thailand. True’s extensive fiber-rich network allows us to provide higher speeds and better service to our customers, giving us a strong competitive advantage. In addition, we can offer high-quality content and a variety of value-added services that enable us to enjoy an advantage over our competitors. A milestone for the overall Internet and Consumer Broadband businesses was the NTC’s decision to award True an international Internet gateway license. This will allow us to provide an even higher-quality, less costly service to our online customers. Furthermore, at the end of the year the NTC allowed True to connect directly to international Internet gateway operators. As a result we look forward to providing greater value to our Internet customers in 2007. Consumer Broadband’s successes helped offset the lack of growth in fixed-line service, another major part of our online businesses. This was no surprise, given the longstanding industry trend of fixed-line phone usage being partially replaced by mobile phones. One of your key strategies for growth is your convergence lifestyle strategy. Can you explain this? Convergence lifestyle is a strategy we have been working on for more than a year. We want to fulfill consumers’ daily lifestyles of “live, learn, work and play” and provide them with convenient access to the information, knowledge, data and entertainment they require, whether it be via mobile phone, Internet or pay-TV. For our customers, it’s about providing them with as much flexibility as possible in their choice of networks, services and content _ whether in their homes, their offices or on-the-go. Consumers will enjoy better value and greater convenience from being able to use our one-stop shop customer services.

Internationally, many of the leading telecommunications firms are pursuing convergence models. The industry has evolved from single to convergence products thanks to the emergence of the Internet platform, while customer needs have become more personalized, and multipleuse devices have become common. True is in the best position among Thai companies to capture the opportunities presented by these trends. In addition, by leveraging the True brand across different products and services, we can achieve greater efficiencies in our marketing and sales, and economies of scale in our operations. What role do True Money and TrueLife play in your convergence lifestyle strategy? While mobile, Internet and pay-TV provide access availability for consumers, True Money is a digital commerce service which allows top-up, pay-transfer and withdrawal of money from electronic wallets with a mobile phone SIM card. True Money is not only used to pay for True Group’s products and services but can also be used to pay for water supply, electricity and taxi fares, and is continually expanding its services and the convenience it offers customers by joining with various business partners. By the end of the year, True Money was being used by around 850,000 True Move subscribers. TrueLife provides digital content and access for the digital community as well as acting as a digital multimedia communicator for consumer-toconsumer, business-to-consumer and businessto-business transactions. It offers content for bringing together people who have similar lifestyles or interests. Currently True Group can provide Internet and mobile content including music, games, sports, movies and e-Books as well as content under the copyright of True Visions. This helps fulfill the needs of each group of customers by continuing to add more content to TrueLife. The bundling of True products and services falls under the TrueLife Plus umbrella. Annual Report 2006

So what progress have you made implementing True’s convergence lifestyle strategy and what are your plans for 2007? 2006 saw us complete the first steps towards achieving our strategy. We have integrated True Move and TrueVisions into True Group, enabling customers to access a universal or convergence platform using mobile phone, Internet and/or pay-TV. Our customers have seen greater bundling of True products and services, which for True means greater market share and lower churn rates, and faster progress to profitability. One example is Academy Fantasia 3. TrueVisions, True Move and True Consumer Broadband joined forces to promote the third series of the popular reality TV show Academy Fantasia, which screened on TrueVisions. Viewers were able to vote for their favorite performers using their True Move phones and also view exclusive news and information on the show through True’s Internet Broadband service. The promotion’s success was a major factor in True Move’s subscriber growth. Our content offerings are a big part of our convergence lifestyle strategy as are our True Shops, which expand our brand presence and help our customers experience first-hand True’s range of services, including TrueMusic and TrueCoffee. The “True” lifestyle brand is now widely recognized throughout Thailand. The year 2007 will herald another big step for True. We aim to provide more value to consumers with our five core services _ True Move, TrueOnline (formerly Wireline), TrueVisions, True Money and TrueLife. This will help True become a real leader in convergence lifestyle.

Annual Report 2006

You also talk of True’s mission to help bring Thailand fully into the Digital Age and reduce the Digital Divide in Thai society. Can you explain these concepts further? True has the capability to improve communications on many levels among individuals, companies and communities through conveying information on our three digital technology-based platforms: mobile, Internet and television. If Thailand can develop and build a sound digital infrastructure this will help improve our social and economic systems. It will also help reduce Thailand’s Digital Divide _ the gap between those who have access to knowledge through information technology and those who do not. Only then will Thailand be able to develop into a fully knowledge-based society and close the distance between ourselves and more developed countries. Our mission is to build a knowledge-based society by improving every Thai household’s accessibility to knowledge, information and entertainment, enabling Thailand to better compete in the global market. True’s offerings include an increasing range of innovative technologies. How do these ﬁt into the True story? What we have been doing in Thailand with our convergence strategy mirrors a global trend. For example, the demand for making payments as convenient as possible for customers has seen us widen the scope of True Money, our digital commerce service, to cover more and more customer requirements. In 2006 True Group launched new services with modern technology such as IPTV, which allows customers to watch television on their computers; VoIP, which allows customers to make phone calls using their computers; and outdoor Wi-Fi, which allows customers to access the Internet outside their homes and workplaces. We introduced outdoor Wi-Fi at three areas in Bangkok during 2006: Silom Road, Siam Square and Thonglor. Some of these initiatives are at an early stage of development, but we are wellpositioned to take advantage of future growth opportunities. Moreover, True is the sole Thai member of the international Fixed Mobile Convergence Alliance, a collaboration among leading telecommunications companies worldwide. True’s innovative approach was recognized by readers of The Wall Street Journal Asia when they voted True Thailand’s most innovative company in the way we respond to our customers.

You were busy in the financial markets, issuing extra shares and also refinancing your debt on international markets. What was the reasoning behind these initiatives and what difference has it made to True? True Move needs capital to fund its ongoing growth and both these initiatives were undertaken for this reason. Thailand’s mobile market still has significant growth potential _ the nationwide mobile penetration rate is around 61 percent, and the penetration rate in provincial areas is estimated to be much lower. In July we raised Baht 3.4 billion with a private placement of True shares to institutional investors _ of which Baht 2.5 billion was allocated to True Move _ and in December we raised USD465 million (about Baht 16.3 billion) with an issue of seven-year True Move bonds to international investors, with a bullet (one-time) payment at maturity. The proceeds of the bond issue have been used to refinance half of True Move’s debts and free up substantial cash flow over the next few years for funding subscriber growth during this period of strong overall market growth. It was particularly pleasing to see the interest from international investors in the bond issue. This was the first time True Move had tried to raise money globally and we attracted offers of more than USD750 million, which indicates the extent of investor confidence in True and True Move. The offer was the largest-ever onetranche US-dollar bond offering by any Thai corporate. Also, in July we completed TrueVisions’ long-term refinancing. As highlighted earlier, by the end of the year True’s net debt-to-EBITDA ratio had fallen to 4.6 times, from 4.8 times 12 months earlier, as a result of improvements in EBITDA and debt reduction of approximately Baht 8 billion, mostly at our Online business. What’s the outlook for 2007? In just a few short years, True has grown from a solely fixed-line operator to a fully-integrated communications provider, offering a wide range of innovative products and services backed by leading-edge technologies to meet our subscribers’ communications needs and enrich their lifestyles. As result of this we’ve had strong subscriber growth and rising uptake of our bundled services. We expect these trends to continue in 2007. We have new promotions planned to take advantage of the bundling opportunities within the Group, under the concept of “Better Together” which highlights to customers the range of products and services offered under the True umbrella. Our key growth businesses _ True Move, TrueVisions and Consumer Broadband _ are all well placed to improve their performances, while True Money and TrueLife will increasingly become key components in our goal to provide the best possible value to our customers. We continue to target one-third of market net additions for True Move, futher solid growth by Consumer Broadband, and greater penetration by TrueVisions into the mass market which should see its subscriber and revenue numbers continue to rise. All these markets offer good growth potential as their penetration rates are relatively low: 61 percent for mobile, 10 percent for pay-TV and only 3 percent for Consumer Broadband. We expect more challenges in 2007, with keen market competition and an evolving regulatory environment. However, our progress in 2006 and the strategies we have in place mean we are in good shape to overcome these challenges, while the implementation of the interconnection regime will ease price pressures on our mobile business. True owes a big debt to its Board, its management and staff, and to its shareholders for making 2006 such a successful year. I’m confident that with the knowledge and capability of our management and staff, together we can make 2007 just as rewarding as we strive to enrich our customers’ lives and help Thailand become a truly knowledge-based society. Supachai Chearavanont President and CEO

Annual Report 2006

Cover

Story

Segment Solutions

True Corporation Plc is Thailand’s only integrated telecommunications operator. We have more than 11 million subscribers to our services, which include the country’s largest broadband and dial-up Internet provider, Thailand’s dominant payTV provider, TrueVisions (formerly UBC), the largest ﬁxed-line phone operator in the BMA (Bangkok Metropolitan Area), and Thailand’s third-largest mobile phone operator (True Move, our largest business by subscriber numbers and revenue).

+ Products + Services + Products + Services + Products + Services + Products + Services + Products + Services + Services + Products + Services + Products + Services + Products + Services + Products + Services + Products + Services + Products + Services + Products + Services + Products +

Our convergence lifestyle s t r a t e g y, b r a n d e d “ B e t t e r Together”, is unique within the Thai market. The strategy focuses on providing customers with their preferred combinations of content and services from our full range of telecommunications offerings, enhancing lifestyles in line with our “live, learn, work and play” philosophy.

Annual Report 2006

At the beginning of 2007, True was organized into ﬁve core businesses: True Move (the old Wireless segment), TrueOnline ( f o r m e r l y W i re l i n e s e g m e n t ) , TrueVisions (formerly Pay-TV), True Money (our digital commerce s e r v i c e ) a n d Tr u e L i f e ( w h i c h provides digital content and access). The annual report follows this category format.

In terms of ﬁnancial reporting, we report in three segments: True Move, TrueOnline and True Visions. True Money’s contributions are considered part of TrueOnline as it will become a key vehicle for True’s vision of becoming a convergence lifestyle leader. Tr u e L i f e ’s c o n t r i b u t i o n s a re included in TrueOnline as most TrueLife services cater for True’s broadband customers.

True Move has grown rapidly since it launched full commercial operations in March 2002 and has been successful in acquiring about one-third of the market’s net additional subscribers each year since 2004. True Move is now Thailand’s third-largest mobile operator. In 2006, True Move contributed 43 percent of total service revenue (after inter-company transactions). TrueOnline (comprising ﬁxed-line telephone, data services, Internet/broadband and WE PCT (Personal Communication Telephone) contributed 41 percent and TrueVisions 16 percent.

True Move True Move operates a digital mobile telecommunications network based on the Global System for Mobile Telecommunications (GSM) standard in the 1800 MHz frequency band. True Move provides prepaid and postpaid services and is unique in offering promotional packages that bundle True Group’s integrated products and services to provide subscribers value for money with more options to meet their needs. True Move has grown rapidly since it launched full commercial operations in March 2002 and has been successful in acquiring about one-third of the market’s net additional subscribers each year since 2004. True Move is now Thailand’s third-largest mobile operator, with 7.6 million subscribers, an increase of 70 percent on the 4.5 million at the start of the year. At the end of 2006, True Move prepaid and postpaid customers accounted for 93 percent and 7 percent of our total mobile subscribers, respectively.

Pre Pay Pre Pay is True Move’s prepaid service. Most of True Move’s revenue is derived from sales of prepaid airtime, which do not require a monthly subscription fee. Subscribers purchase a SIM card with an initial credit balance and can top-up their credit balance through various means, including purchase of top-up cards, transfer of funds through ATMs, transfer of credit balances from other mobile phone accounts, and “over-theair” top-ups. We are the ﬁrst telecommunications operator in Thailand to use

independent non-mobile agents as “over-the-air” airtime resellers such as individuals or small shops who register with us and are eligible to transfer airtime to subscribers via SMS transfer. We used over 100,000 such resellers in 2006. True Move also provides its Pre Pay and Post Pay subscribers a mobile payment channel via True Money services which were launched in 2006 to meet new generation lifestyle needs.

Post Pay Post Pay is True Move’s postpaid service which allows customers

to choose a monthly service plan which varies from Baht 199 to Baht 1,300. Subscribers are billed monthly for subscription fees, airtime and usage of other voice and non-voice services.

Voice Services Our prepaid and postpaid subscribers have access to local, domestic and international longdistance dialing. In addition, we offer a variety of value-added services in different combinations according to the airtime package selected. These services include call waiting, call forwarding, call Annual Report 2006

conferencing and caller identiﬁcation. We also offer our voice subscribers roaming services, which enable them to make and receive calls when outside Thailand.

Non-Voice Services True Move provides a range of non-voice services to enhance customer lifestyles. Content is delivered through various channels covering all mobile-accessible channels and web-based services through the www.trueworld.net portal. Non-voice services comprise a variety of popular content, including photo-based communication, financial information services, games, cartoons, screen savers and ring tones, music and sports content. Our subscribers are increasingly using our non-voice services, in particular Color Rings, messaging and downloadable pictures, images and audio through GPRS.

Annual Report 2006

Non-voice services contributed 9.6 percent to True Move’s total service revenue in 2006, compared with 7.6 percent in 2005. Service revenue from content-based services (mainly color rings), messaging and GPRS traffic contributed approximately 57, 33 and 10 percent, respectively, of total non-voice revenue. True Move is well positioned to use content as a growth driver by leveraging the exclusive content assets of TrueMusic, TrueOnline and TrueVisions. We currently offer the following non-voice services to our subscribers: • SMS: allows subscribers to send short text messages to other mobile users; • Voice SMS: Thailand’s first voice short-messaging service allows subscribers to send audio messages to fixed-line and mobile handsets; • VoiceMail: enables subscribers to retrieve audio message recordings; • MMS: allows subscribers to send pictures, text and sound/voice in a single-packet message; • GPRS: provides mobile data communications with GSM-based technology, including WAP-based content portals, mobile Internet, data transfer and “push” e-mail (BlackBerry); • Multimedia Content Services: allows subscribers to access content such as music, sports, news and finance (through TrueMusic, TrueSport, TV, Movies and others); • Mobile Chat: a WAP-based instant-messaging service that allows subscribers to engage in online and mobile chat;

• Mobile Web: allows subscribers with compatible mobile handsets to access the Internet, including through available Wi-Fi connections; and • Color Ring: offers personalized ring-back tones and exclusive song selections.

Mobile Handset and Accessories Sales We offer a broad range of high-quality mobile handsets, related accessories, PDA phones and smartphones from a number of manufacturers, such as Motorola, Samsung, Sony Ericsson, O2 and HP. International Roaming Services We allow people whose network operators have international roaming agreements with us to use our network when traveling in Thailand. We also allow our subscribers to use the networks of operators with whom we have entered into international roaming agreements. Network True Move was the last of the three major Thai mobile operators to launch commercial operations,

and as such has been able to take advantage of the latest technical developments for our GSM network rollout, which has made our network relatively more efﬁcient and cost-effective. During 2006 we achieved coverage of approximately 92 percent of Thailand’s population, and increased our network capacity to eight million users.

Bundled Packages True Move’s name change from TA Orange in February 2006 emphasized True Move’s membership of the True Group. This was highlighted during the year by the bundling of True Move services with other Group services, including: • The Unlimited campaign, offering various options of free calls and Internet usage for ﬁxed monthly charges; • True’s Family Package promotion, bundling ﬁxed-line and mobile services in ways designed to

encourage communication among family members; • Academy Fantasia 3. True Move was a major part of the bundling promotion with TrueVisions and True Internet based on the third series of the popular TrueVisions reality music program Academy Fantasia. Only True Move voters were able to vote for their favored contestants. The promotion proved to be a key subscriber retention tool for True Move during the seasonally low third quarter. Weekly voting was 43 percent higher than in 2005, when customers of True’s competitors were also able to vote; • The TrueVisions-True Move Free View mass market promotion (see “TrueVisions” section below for more details); and • The All Together Bonus, True Group’s first bundled package which was launched in 2004, continued to attract True Move subscribers. We have consistently sought to develop and market innovative non-voice products and services. For example, we were the ﬁrst in Thailand to offer Voice SMS, remixable ringtones (through the IRemix service), and “over-the-air” top-ups to our subscribers. We also launched EDGE (Enhanced Data rates for

GSM Evolution) services in the BMA and other multimedia content-based services in 2006 as well as expanding our wireless Internet services using Wi-Fi technology. Other True Move initiatives during the year included: • Offering Thai-language e-mail support for BlackBerry users; • Bolstering international roaming services, including offering in-flight services and becoming the exclusive Thai partner for Traveling Connect, the global roaming service that allows its members to earn mileage points; • Joining with True Internet, HP and Microsoft to offer a range of Wi-Fi Internet and mobile services; and • A free missed-call alert service based on SMS (also available to True ﬁxed-line subscribers).

Annual Report 2006

TrueOnline TrueOnline comprises ﬁxed-line telephone and its value-added services, Internet and Consumer Broadband, data communications services and WE PCT. Our Internet and Consumer Broadband businesses have been growing rapidly and help to maintain overall revenue generated by TrueOnline.

Fixed-line phone service True is the largest fixed-line telephone service provider in the BMA with an estimated 58 percent market share, a fixed-line capacity of 2.6 million and almost 2 million lines in commercial use. Our services range from the basic _ such as local calling, calls to mobile, domestic and international long-distance calling, and 26,000 public payphones _ to “value-added” services that include fault reporting, dropwiring and enhanced voice services such as call forwarding and caller ID functions. In 2006, True also introduced VoIP (Voice over Internet Protocol) services called NetTalk by True, establishing a foothold in what is a relatively new market for Thailand. However, in these initial stages the National Telecommunications Commission (NTC) allows us to provide only phone-to-PC and PC-to-PC VoIP services. At the beginning of 2007, True received a license to operate an IDD (international direct dialing) service. Network Our core fixed-line network is Thailand’s most modern and fiber-rich network, which includes more than 170,000 kilometers of fiber-optic cables, covering 4,200 square kilometers in the BMA. This enables us to minimize the use 28

Annual Report 2006

of copper cables (averaging 3-4 kilometers) and provide high quality voice and data communications services.

Consumer Broadband True Group is the largest Consumer Broadband operator with around an 80 percent share of the ADSL (Asymmetric Digital Subscriber Line) market in the BMA. We provide the service using cable modem and DSL technologies at a speed of up to 10 Mbps (VDSL or Very High Speed DSL). We also launched wireless broadband using pre-WiMax and Wi-Fi technology. Our Consumer Broadband business is growing rapidly. As of December 31, 2006 we had 442,728 Consumer Broadband subscribers, representing an increase of 47 percent from 2005. We offer customers better service quality from our modern and fiber-rich wireline network. We also offer rich content through the TrueWorld.net portal catering for consumer lifestyles, including music, gaming, sports and e-Books, as well as a variety of value-added services, including IPTV, WhiteNet filtering and AntiVirus+AntiMalware+Anti Spyware. In terms of our overall Internet business, we are Thailand’s no.1 Internet Service Provider (ISP) with more than one million subscribers, including Consumer Broadband subscribers and subscribers of KSC, our affiliate. We offer Internet access to both consumers and business customers, along with a range of value-added services, including an Internet Data Center, providing security services for corporate customers. Our Internet and Consumer Broadband services were bolstered during the year with the granting of an international Internet gateway license, allowing us to provide a better quality and less costly service to our customers. True Group started providing the service at the beginning of 2007. Broadband initiatives introduced during 2006 included: • hi-speed Internet Junior Package, which introduced broadband to a wider market. Subscribers were offered limited Internet access at a special introductory price;

• Outdoor Wi-Fi zones, at Bangkok’s Siam Square, Silom Road and Thonglor Road. These zones (a ﬁrst for Thailand) enable customers to access content, whether via computers or Wi-Fi enabled mobile phones, without the need to be indoors to access a Wi-Fi hotspot; • Trialing Pre-WiMax broadband in the upcountry city of Korat; • An offer of environmentally-friendly solarpowered Wi-Fi routers, in conjunction with King Mongkut’s Institute of Technology Ladkrabang; • Ongoing partnerships with real estate developers to offer cyber home services; • Online shopping services with supermarket chain Villa Market through www.weloveshopping. com; • Promotions with True Move mobile and Wi-Fi services as well as several leading notebook and PC makers, to offer best value to customers; • An offer of personal Internet-based hard disk storage for subscribers and the launch of the “Play” package for dial-up customers which has proved the most popular “net kit” in the Thai market; and

• TrueCoffee discount cards for True’s hi-speed Internet subscribers. The cards entitled subscribers to a free complementary New-Year coffee and a 50 percent discount on every cup of coffee for the three months to March 31, 2007.

WE PCT WE PCT is a cordless fixed-phone service. A subscriber’s PCT phone number is the same as his or her fixed-line number. Up to nine PCT handsets can be used with one fixed-line number, with each handset holder assigned an individual access code so callers to the fixed-line number can direct their calls to a specific person. The WE PCT service covers 2,500 square kilometers of the inner area of the BMA.

During the year WE PCT maintained a Baht 300 package and a Baht 3 per call promotion targeted at students and the young. As of December 2006 WE PCT had 347,099 subscribers, 26 percent lower then 2005 due to the impact of price competition in the mobile phone business.

Data Services True’s Data Services offers business customers data-transfer technologies and an outsourced data network management service. True focused on differentiating itself by providing customized services via convergence with other True Group products and services and by partnering with major application providers such as Cisco to provide a high-quality Internet Protocol (IP) based network. This means we do not have to compete on pricing. True provides data transmission services using various technologies including Digital Data Network (DDN) or leased line, Frame Relay, Metronet (ﬁber-tothe-building) and MPLS VPN (Multiprotocol LabelSwitching Virtual Private Networks), which exploit the advantages of Internet Protocol and which cost less than leased line. As of December 2006 there were 12,033 circuits for True’s DDN subscribers, a 17.8 percent increase from 2005.

TrueVisions TrueVisions (formerly UBC) is Thailand’s leading nationwide pay-TV provider, offering its service via digital direct-to-home and digital HFC (hybrid ﬁber-coaxial) network platforms. TrueVisions offers a variety of top local and international channels including movies (such as HBO, Cinemax, Star Movies, Hallmark), sports (ESPN, StarSport and TrueVisions’ own channels SuperSport, SuperSport Action and Sport+), infotainment (the History Channel, Discovery Channel, National Geographic), news (CNN, CNBC, Bloomberg, BBC World) and Series (most of which are TrueVisions’ sole copyright) as well as free TV. Customers can select four differently priced TrueVisions’ packages: Platinum, Gold, Silver and True Knowledge (Bronze). Annual Report 2006

• The Platinum package offers 76 channels including six free-TV channels and 15 educational channels for Baht 2,000 a month; • The Gold package provides 67 channels including six free-TV channels and 15 educational channels for Baht 1,413 a month; • The Silver package provides 56 channels including six free-TV channels and 15 educational channels plus all music channels for Baht 750 a month; and • The True Knowledge (Bronze) package provides 46 channels including six free-TV channels and 15 educational channels for Baht 340 a month. The year 2006 brought more success for TrueVisions with the screening of popular reality TV show Academy Fantasia 3 which helped retain subscribers during the low-season period while generating key content for other parts of True Group. In 2006, TrueVisions also expanded into the mass market by offering lowprice packages via bundling with True Move (the TrueVisions-True Move Free View package) lifting total subscribers at the end of 2006 to 558,860 or 629,269 (including subscribers of bundled packages with True Move), a 30 percent increase from 2005. Initiatives during the year included: • The launch in April of the True Knowledge (Bronze) Package, offering more than 40 TrueVisions channels at a lower price than existing packages to attract lowerincome users, including those outside Bangkok, who might not otherwise subscribe to pay-TV;

Annual Report 2006

• The launch in July of Thailand’s ﬁrst prepaid TV service, TrueVisionsTrue Move Free View, offering free satellite dish installation for True Move customers. The promotion has been a great success, with around 26 percent of subscribers upgrading to TrueVisions’ higher-tier packages; • In December TrueVisions secured the exclusive Thai broadcast rights for the next three seasons of English Premier League (EPL) football, the most watched sporting contest on Thai television. TrueVisions currently screens EPL games through the ESPN and Star Sports channels it carries. The securing of the rights opens up opportunities to cross-promote the EPL with other True Group businesses; • The launch of TrueVisions’ own infotainment channels Explore 1, Explore 2 and Explore 3 including TrueMusic, an interactive music channel, and Thailand’s ﬁrst 24-hour games channel, GSquare; and • Bundling packages based on Academy Fantasia 3, with True Move, True Internet and TrueLife (see above under “True Move”).

True Money True Money has approval from the Bank of Thailand to offer an electronic cash service and also acts as a payment agent with the approval of the Revenue Department. Major True Money services comprise the True Money cash card, a payment agent service and True Money via True Move (a money service via mobile phone).

True Money cash card The True Money cash card allows True Move and True customers to top-up their selected True Group services, including True Move Pre Pay, WE PCT Buddy, Fund Card, Pre Pay hi-speed Internet, Internet Kit, Wi-Fi, TrueWorld, e-Book and online gaming. Top-ups are made using the cash card’s PIN code. True Money launched this service in late 2005. Payment agent True Money launched its payment service in 2003 and has 510 payment outlets able to accept payment for 15 services. Payments are processed off a bar-coded statement and can be made by cash, cheque or credit card, either in full or partial payment. Customers can also make payments online, without statements, for certain services. Overdue payments can also be made.

True Money services via True Move This service, launched at the beginning of 2006, allows True Move subscribers to perform commercial and ﬁnancial transactions using their mobiles, anytime and anywhere, under a high-security system to international standards. Using True Money, True Move subscribers can: • Recharge their credit balance for many prepaid services, including True Move Pre Pay and Internet airtime; • Pay bills for True Group products and services as well as for services outside the Group, such as electricity and water supply bills, taxi fares, online purchases of movie tickets, and bowling fees. True Money also has a system to alert customers to pay electricity and water supply bills before due date; • Transfer funds from their True Money account to another True Money account, or to their bank account; and • Keep amounts of up to Baht 30,000 in each True Money account. Customers can top up their True Money account from many sources by using a True Money cash card, an approved bank account or credit card. True Money is also the payment method for subscribers to the True Visions-True Move Free View package, with the fee automatically deducted each month from subscribers’ True Money accounts. Subscribers can also upgrade to higher-tier TrueVisions’ packages using True Money. True Money was being used by around 850,000 True Move subscribers at the end of 2006 and we expect further growth. True Money will become a key vehicle for realizing True Group’s vision of becoming a convergence lifestyle leader.

TrueLife TrueLife provides digital content and access as well as acting as a digital multimedia communicator for consumer-to-consumer, business-toconsumer and business-to-business transactions. TrueLife has three components: Online community portals; TrueLife Shops; and TrueLife Plus (our bundling packages). Two online community portals _ TrueWorld.net and TrueLife.com _ offer content which bring together people with similar lifestyles or interests. Trueworld.net has four main content categories _ Music, Sport, TV and Movies _ and 300,000 subscribers. TrueLife.com, launched in 2006, allows subscribers to communicate with each other, interacting using chatrooms and instant messaging. True Group is also an online games provider through NC True, a joint venture between True and NC Soft, a world-class online game maker from South Korea. NC True launched “Lineage II” in 2005 and in 2006 launched “Guild Wars Factions” which is Thailand’s top online game with the most players. In 2006 True Digital also launched a new online game called “Special Force” which has quickly become extremely popular, attracting around 1.5 million registered gamers as well as being the number one “casual” online game in Thailand. TrueLife Shops bring together under one roof the full range of True products and services, including TrueCoffee, TrueMusic and True Consumer Broadband. These shops are located in areas within the BMA frequented by trendsetters and the younger generation. TrueLife Plus represents our bundling of True products and services, offering customers greater value through packages that suit their lifestyles.

Highlights for TrueLife in 2006 included: • The launch of full song downloads with GMM Digital Domain Co., Ltd. (GMMD), a subsidiary of major music content provider Grammy; • True Sports’ promotion with True Move and TrueVisions allowing TrueWorld.net subscribers the opportunity to watch the big four English football teams via broadband as well as to win prizes using SMS; • The availability of the popular TV reality show, Academy Fantasia 3, to Trueworld.net subscribers (for more details see under “True Move”) who were able to enjoy value-added content related to the show; • The introduction of a True Visions interactive music channel, available 24 hours a day, which allows viewers to request songs via SMS. Launched in November 2006, the channel is already highly popular; • The launch of TrueVisions’ interactive gaming channel GSquare; and • The launch of several major bundling packages, including TrueVisions-True Move Free View, Unlimited 799 (True Move and TrueOnline), Family Package (True Move and TrueOnline), and AF3 (True Move and TrueVisions). These are discussed in detail under their main business segments. Annual Report 2006

About

Activities

Environmental and Social Responsibility True Group’s leaders, top executives and employees play an important role in many social development activities, especially in education and natural and environmental preservation. Their various social contribution activities focus on young people in Bangkok and nationwide, as well as on underprivileged children. We believe that if we can improve young people’s understanding and provide them with the resources they need to enjoy a wide range of educational opportunities we will be able to stimulate their creativity, encourage their innovative thinking and help them develop and express their ideas in rational and systematic ways. We are doing this by providing education additional to their classroom teaching.

Natural and Environmental Conservation We also encourage them to better understand their environment and their local community through the use of ICT and natural and environmental activities, expanding their worldview so they can become fully ﬂedged adults who can add value to society as a whole. A highlight for the general public has been True’s promotion of natural and environmental preservation activities through the Nature Conservation Photography Contest, “Precious Wildlife and Valued Forest”, joining with the National Park, Wildlife and Plant Conservation Department. This program aims to build awareness of nature and the environment, especially forestry and wildlife, through a photography contest held annually since 1995 and now in its 12th year. The program also includes a photo-taking forum where leading photographers and nature preservation activists are invited to share their knowledge and viewpoints on photo-taking technique as well as natural and environmental preservation. 32

Annual Report 2006

35 mm Slide and Digital Photo Category: “Forest Conservation”

1st Prize Golden Rays of the Forest

2nd Prize Sunshine

Consolation Prizes Nature’s Own Shadow

Rain-Covered Forest

35 mm Slide and Digital Photo Category: “Wildlife Conservation”

1st Prize Oriental Darter...quick as a water snake

2nd Prize Whose is tastier?

3rd Prize Playful

Consolation Prizes Fight

Spider

Free Technique Digital Photo Category: “Forest and Wildlife Conservation”

1st Prize The Last Leaf to Fall

True’s promotion acknowledges His Majesty’s concern for the environment and his encouragement to use our human and natural resources wisely for the sake of the Thai nation. Her Royal Highness Princess Maha Chakri Sirindhorn was kind enough to present the 2006 contest winners with their awards.

Annual Report 2006

We are also working with the Bangkok Metropolitan Administration on a “Bangkok Environs Improvement” project to tidy up all fixed-line cabling along Bangkok’s main roads to commemorate the Auspicious Occasion of the 60th Anniversary of His Majesty’s Accession to the Throne. We have also worked with Pattaya City Council to collect garbage on a three-kilometer stretch of central Pattaya beachfront. True also introduced a program called “Beautiful River by True” in which True’s fixed-line team is working with Bang Plat District’s Environmental Office to collect garbage from the Chao Phraya River and keep the river beautiful.

Beautiful River by True

Beach Clean-Up Project at Pattaya

Fixed-line Tidy-Up Project

True’s Solar Energy Project is a joint project with King Mongkut’s Institute of Technology Ladkrabang to encourage the use of solar energy to tackle fuel shortage problems and reduce environmental impacts. We have also established a “Mobile Phone Battery Disposal Project” to fully support the Mobile Phone Battery Disposal Project initiated by the Ministry of Natural Resources and Environment to dispose of mobile phone batteries correctly and safely. True joined the project by publicizing the risk that expired mobile phone batteries pose to the environment if incorrectly disposed of. Unwanted batteries can be left in collection boxes at all True Shops and True Move Shops nationwide.

Annual Report 2006

We place great importance on the environment and are working with Rangsit Nature Education Center and WWF Thailand to create the “Natural and Environmental Preservation for Youth” project to raise awareness of natural and environmental preservation. This project involves two activities, “Our Sea We Love” and “Life On Our Planet”, at Digital Playground by True on the third ﬂoor of the Bangkok shopping mega mall Siam Paragon. The aim is to encourage young people to preserve nature and the environment.

As well as activities for young people and the general public, True has established various activities and programs for local communities and wider society including the Dropwire Reuse Project. This project reuses dropwire that is not in service and has become “aerial garbage”, enabling it to be reused for customers which not only increases the working efﬁciency of the dropwire but also reduces the amount of aerial garbage.

Annual Report 2006

Contribution to Education and Society

To show gratitude to our beloved King, True Group was delighted to play its part in the celebrations with our “I Will Do” project. The project’s ﬁrst campaign demonstrated True’s convergence capabilities by using more than 50 webcam booths nationwide and inviting people to pledge their good deeds in tribute to His Majesty. The campaign attracted many Thais of all ages.

Annual Report 2006

Exhibition on HM the King

As one of Thailandâ&#x20AC;&#x2122;s leading companies, True rates highly its corporate social responsibility role, mindful that our business decisions will have economic, social and environmental impacts. To summarize, as a responsible and upstanding member of Thai society, True is committed to helping create and develop opportunities for our young people, especially in education and the environment, inside and outside the classroom. This will encourage them to grow into capable adults with good morals and an awareness of the importance of natural and environmental preservation, so that they can take part in protecting, balancing and maintaining the beauty of nature for generations to come.

ICT Expo 2006

Annual Report 2006

Insight

True Success

Company Background and Major Developments and Awards True’s vision is to be the leader in convergence lifestyle. True’s mission is to allow customers to communicate with each other and access value, knowledge, information and entertainment as well as to create value for our organization, employees and shareholders.

True Corporation Public Company Limited is the most integrated communications solutions provider in Thailand. We were incorporated in November 1990, and registered as a public limited company in 1993 under our former name TelecomAsia Corporation Public Company Limited. We began trading on the Stock Exchange of Thailand in December 1993 with the security symbol “TA”. In April 2004, we rebranded under the “True” name and adopted the security symbol “TRUE” with registered and paid up capital of Baht 45,015 billion at the end of 2006. True is now one of the strongest brands in Thailand. True’s vision is to be the leader in convergence lifestyle. True’s mission is to allow customers to communicate with each other and access value, knowledge, information and entertainment as well as to create value for our organization, employees and shareholders. Our convergence lifestyle strategy differentiates True from other operators by providing a full range of communications solutions drawing on rich content to meet every customer’s lifestyle needs. Backed by Asia’s largest agro-conglomerate, the Charoen Pokphand Group (with a shareholding of approximately 30.4 percent, as of 31st December 2006), we have expanded our business from being a ﬁxed-line provider to a total communications solutions provider by offering consumers, small and medium enterprises, and corporations a full range of voice, data and video solutions

Annual Report 2006

customized to meet their needs. We are Thailand’s largest provider of Internet, consumer broadband Internet and pay-TV services, as well as the largest ﬁxed-line service provider in the BMA, a leading online game provider and the number three mobile phone operator in Thailand.

We operate five core businesses: • Mobile phone business under True Move (formerly TA Orange); • Online business under TrueOnline (which consists of fixed-line phone service and its value-added services, DDN services, Internet and consumer broadband Internet services and WE PCT (Personal Communication Telephone)); • Pay-TV business (under TrueVisions, formerly UBC); • Digital commerce business under True Money; • Digital content business under TrueLife. We provide fixed-line phone services under a build-transfer-operate (BTO) concession with TOT Public Company Limited (TOT) to build, install, jointly operate and maintain a 2.6 million-line wireline network in the BMA for a period of 25 years, ending on October 2017. We received our first revenue from the operation of our wireline network in November 1992. We received additional approvals to provide value-added, public payphone and other services,

Our convergence lifestyle strategy differentiates True from other operators by providing a full range of communications solutions drawing on rich content to meet every customer’s lifestyle needs. and launched our WE PCT service in 1999, hi-speed data transmission services including ADSL and cable modem in 2001, and Wi-Fi services in 2003. In 2006 we were granted an international Internet gateway license. In October 2001, we acquired a 41.1 percent equity interest in Bangkok Inter Teletech Public Company Limited (“BITCO”) (the parent company of TA Orange) expanding our business in the mobile sector. Full commercial launch of TA Orange’s mobile telecommunications service in Thailand took place in March 2002. We gradually increased our shareholding in BITCO until currently (as of 31st December 2006) we own 93.4 percent, fully consolidating the results of BITCO and TA Orange from the beginning of the fourth quarter of 2004. TA Orange was rebranded to “True Move” at the beginning of 2006. True Move operates a digital mobile telecommunications network based on the GSM (Global System for Mobile telecommunications) standard in the 1800 MHz frequency under a BTO concession with CAT Telecom, which is due to end in September 2013. During 2005 and 2006 True Group received licenses from the NTC to provide Internet service, Internet service via telephone or VoIP (Voice over Internet Protocol), public phone services, ﬁxed-line phone services and Internet gateway services. In January 2006, True purchased UBC shares from MIH and completed the tender offer for UBC shares held by the public in March 2006, allowing True to own 91.8 percent (effective holding) of UBC. True started to fully consolidate UBC’s results into True Group from the ﬁrst quarter of 2006. UBC was rebranded to “TrueVisions” at the beginning of 2007.

TrueVisions operates pay-TV services under a 25-year concession contract with the Mass Communications Organization of Thailand which is due to end on September 30, 2014 for services via satellite and on December 31, 2019 for services via cable. At the end of 2006, True Group had an annual turnover of more than Baht 50 billion, infrastructure investments of more than Baht 100 billion, and employed more than 10,000 staff. Major Developments in 2006 January 2006 True launches “True Money Services”, a new generation online payment service allowing True Move customers to purchase goods or services and perform their ﬁnancial transactions via mobile phone such as prepaid True Move, We PCT Buddy, Fun Card or Internet Kit top-ups. The service was later expanded to be used to make payments for non-True products and services, such as paying for services at Major Cineplex Group and other facility services as well as day-today ﬁnancial transactions. These include transfers between True Money accounts, transfers to and from bank accounts to True Money accounts, and withdrawals from True Money accounts through the ATM network nationwide using True Money cards. February 2006

TA Orange changes its name to True Move, allowing True to better leverage the synergies of the True brand.

Annual Report 2006

March 2006

True completes UBC’s tender offer, a signiﬁcant step forward in the Company’s vision to becoming a fully-integrated communications solutions provider by being a market leader in voice, data and video.

June 2006

True launches IPTV services for its broadband customers. April 2006

UBC launches “UBC True Knowledge (Bronze) Package” for the mass market, changing its strategy after becoming a part of True Group. True debuts Thailand’s ﬁrst hi-speed Internet service via wireless broadband allowing customers in Nakhon Ratchasima to enjoy hi-speed Internet access without the need to install ﬁxed telephone line or cables. NC True introduces to the Thai market the critically-acclaimed online game Guild Wars. Tr u e D i g i t a l E n t e r t a i n m e n t announces its co-operation with Dragonfly Inc. to bring “Special Force (SF)”, the Military FPS (First Person Shooting) online game from South Korea, into Thailand.

May 2006

True launches “hi-speed Internet Junior Package” , a hi-speed Internet service at an affordable price for the mass market. Tr u e l a u n c h e s “ M P L S D a t a Networking Solution” via MultiProtocol Label Switching (MPLS) technology to offer innovative and efficient communication technologies and services to meet our corporate and SME customers’ demands for converged networking solutions, with the ability to support converged services in the future.

Annual Report 2006

True launches Wi-Fi by True Move at Siam Square making it the country’s ﬁrst outdoor Wi-Fi zone. This offers a new wireless hi-speed lifestyle “Free Your Life” without limitations through Wi-Fi enabled devices such as mobile phones, PDAs, pocket PCs and notebooks. Further outdoor Wi-Fi zones were introduced on Silom Road and in the Thonglor area. True Move completes phase four of its network expansion, raising its network coverage to 92% of the population, placing True Move on a par with its peers.

July 2006

True announces a strategic partnership with major content provider GMM Digital Domain Co.,Ltd. (GMMD) to launch the innovative Full Song Download s e r v i c e , o ff e r i n g u n l i m i t e d downloads of full-length Grammy songs. True strengthens its balance sheet and secures funding to support the growth of subsidiary True Move by raising Baht 3.377 billion via a private placement of 402 million shares, and also completes UBC’s long-term reﬁnancing of USD 300 million. True launches NetTalk by True to enable people to call to anywhere in the world with clarity and affordability on the Voice over Internet Protocol (VoIP) platform. True introduces TrueLife Plus, a unique bundled offer to leverage customers’ lifestyles, kicking off with the launch of the “UBC True Move Free View” package that allows consumers nationwide to view free, high-quality cable TV service from UBC; receive free True Move airtime; enjoy an innovative ﬁnancial experience from True Money and upcoming

campaigns under True Group’s convergence lifestyle strategy. UBC launches the third season of UBC Academy Fantasia (UBCAF3), providing various viewing channels and special privileges such as free airtime for True Move customers. August 2006

True Internet Gateway (formerly Sky Ofﬁce), a subsidiary company of True Group, is awarded an international Internet gateway license from the National Telecommunications Commission (NTC). True launches the TrueLife portal (www.truelife.com), which is part of the Company’s efforts to build online communities for those who share the same lifestyles or workstyles, and also opens a new TrueLife community at Thonglor as the ﬁrst free hi-speed music download café in Thailand.

September 2006 All mobile phone numbers switch to the new 10-digit number system, where the ﬁrst “0” is replaced with “08”. October 2006

True Group launches GSquare, Thailand’s ﬁrst 24-hour game channel, on UBC channel 22.

December 2006 True Move successfully places USD 465 million of seven-year bonds with a bullet (one-time) payment to international investors to repay its Thai Baht debts and free up cash ﬂow to support growth. Awards received in 2006 True received considerable recognition during 2006. This was a tribute to the hard work and ability of management and staff. Awards included the following: • True was named Thailand’s Most Innovative Company, and ranked as the nation’s seventh-most admired company, by readers of The Wall Street Journal Asia in the newspaper’s annual survey of Asia’s 200 most admired

companies. Readers were asked to rank companies on five attributes: reputation, quality of products and services, management’s long-term vision, innovativeness in responding to customer needs, and financial soundness. (True’s major shareholder, CP Group, was named as the Thai company with the best long-term vision.) • True was recognized as Tax Man of the Year by the Tax Research Center and Tax & Business Magazine. The award recognizes Thailand’s top corporate tax payers for outstanding business growth, contributions to society and the country’s economy, corporate governance and excellent tax payment record. • True President and CEO Mr. Supachai Chearavanont was named Telecom Man of the Year by the Information and Communications Technology Ministry “for heading the only Thai telecommunications company with convergence services, for his vision and endeavors to develop the country’s telecommunications industry, and for his contributions in encouraging knowledge and learning among the nation’s youth”. • Priew Magazine gave True President and CEO Mr. Supachai Chearavanont the PRIEW Award (Business & Marketing) as one of 10 distinguished individuals chosen from six professions for their exceptional personalities and good social standing. • True was named Best Competitive Carrier for the third consecutive year in the Telecom Asia Magazine Awards. True was chosen on the basis of its financial status, market leadership, technology innovation and corporate governance. True was the only Thai operator nominated, and remains the only Thai carrier to have won any of Telecom Asia’s category awards. • True was recognized in the 22nd annual Good Safety & Health Company Awards from the Asia Pacific Occupational Safety & Health Organization (APOSHO). • True won the Good Welfare & Labor Company Aw a rd f ro m t h e M i n i s t r y o f L a b o r ’s Department of Labor Protection & Welfare. Annual Report 2006

Hall

of Fame

Independent Directors Education

Honorary Master Degree of Economics, Thammasat University

Related training programs held by the Thai Institute of Directors Association (IOD) Director Accreditation Program (DAP)

Non-listed Companies Present Vice Chairman and Vice Executive Chairman, Thai Beverage Public Company Limited Vice Chairman and Executive Chairman, Beer Thai (1991) Public Company Limited Chairman, Thai Alcohol Public Company Limited Chairman, Sura Banyeekhan Company Limited Chairman of Executive Board, Thai Beverage Can Limited Chairman, BJC Cellox Limited Chairman, Thai Glass Industries Public Company Limited Chairman, Thanakorn Vegetable Oil Products Company Limited Chairman, Prida Pramote Company Limited Chairman, Eastern Seaboard Industrial Estate (Rayong) Company Limited Executive Director, Com-link Company Limited

Annual Report 2006

Mr. Narong Srisa-an

Independent Director

Major Experience Companies Listed on the Stock Exchange of Thailand 1998-Present Independent Director, True Corporation Public Company Limited Present Vice Chairman, Vice Executive Chairman and Member of Remuneration Committee, Berli Jucker Public Company Limited Chairman, Advance Agro Public Company Limited Chairman and Chairman of Executive Board, Siam Food Products Public Company Limited Chairman and Chairman of Executive Board, Oishi Group Public Company Limited

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, Grayâ&#x20AC;&#x2122;s Inn Association

of the Audit Committee

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

Chairman

Major Experience Companies Listed on the Stock Exchange of Thailand 1998-Present Independent Director and Chairman of the Audit Committee, True Corporation Public Company Limited

Mr. Vitthya Vejjajiva

and

Related training programs held by the Thai Institute of Directors Association (IOD) Director Accreditation Program (DAP) Audit Committee Program (ACP) Chairman 2000

Independent Director

Education

Annual Report 2006

Education

Doctorate of Engineering, University of London, England Bachelor of Engineering, University of London, England

Related training programs held by the Thai Institute of Directors Association (IOD) Director Accreditation Program (DAP) Director CertiďŹ cation Program (DCP) Audit Committee Program (ACP) Chairman 2000

of the Audit Committee

Member

and

Independent Director

Dr. Kosol Petchsuwan

Annual Report 2006

Major Experience Companies Listed on the Stock Exchange of Thailand 1999-Present Independent Director and Member of the Audit Committee, True Corporation Public Company Limited 2004-Present Independent Director and Chairman of the Audit Committee, ACL Bank Public Company Limited Non-listed Companies 2001-Present Director, Mahidol Wittayanusorn School (Public Organization) 2001-2005 President, The Telecommunications Association of Thailand under Royal Patronage 2000-2001 Chairman, The Aeronautical Radio of Thailand Limited 1986-1992 Rector, King Mongkutâ&#x20AC;&#x2122;s Institute of Technology Ladkrabang

Education

Fellow of the Association of Chartered CertiďŹ ed Accountants, England Programme for Management Development, Harvard Business School, U.S.A. Marketing Management Programme, Stanford University, Graduate School of Business, U.S.A.

Related training programs held by the Thai Institute of Directors Association (IOD) Director Accreditation Program (DAP) Chairman 2000

of the Audit Committee

Non-listed Companies 2002-Present Director, True Move Company Limited

Mr. Joti Bhokavanij

Independent Director and Member

Major Experience Companies Listed on the Stock Exchange of Thailand 1999-Present Independent Director and Member of the Audit Committee, True Corporation Public Company Limited 2004-2006 Chief Executive OfďŹ cer, ACL Bank Public Company Limited 2000-2001 Executive Chairman, TISCO Finance Public Company Limited 1994-1997 President & CEO, Thai Wah Group of Companies 1992-1994 Managing Director and Consul-General of Denmark for Bangkok, The East Asiatic (Thailand) Public Company Limited

Annual Report 2006

Corporate

Governance

Compliance Report

Introduction In 2006 the Company started to carry out its business according to the Principles of Good Corporate Governance for Listed Companies 2006 issued by the Stock Exchange of Thailand (SET). The first guideline consisted of 15 practices issued on March 2002, then fine tuned and modified by the SET in line with the Organization for Economic Co-operation and Development (OECD) Principles of Corporate Governance 2004 and World Bank suggestions from its corporate governance project called Reports on the Observance of Standards and Codes (CG-ROSC). Trueâ&#x20AC;&#x2122;s good corporate governance practices are summarized as follows:

Corporate Governance Practice True has two levels of corporate governance oversight: by the Board of Directors and by management. The Board of Directors has established the Corporate Governance Committee which comprises Mr. Narong Srisa-an, Mr. Vitthya Vejjajiva, Dr. Kosol Petchsuwan, Mr. Joti Bhokavanij, Mr. Andreas Klocke and Dr. Ajva Taulananda. Corporate governance at management level is overseen by the CEO and other senior executives. Section 1 Rights of Shareholders 1. The Board of Directors has established a corporate governance policy that takes into account _ as much as possible _ the rights of shareholders, without being limited to the rights specified only by law. The Board of Directors has approved and implemented the new Corporate Governance policy which has been amended to be in line with the Principles of Good Corporate Governance for Listed Companies 2006 issued by the Stock Exchange of Thailand and combined with the concept of Sufficiency Economy. 2. The Company held its Annual General Meeting of Shareholders for the Year 2006 on 11th April 2006 taking into account the convenience of shareholders, the meeting was scheduled on a working day during working hours and held in Bangkok where transportation in convenient. 3. The Company will send shareholders an invitation letter to inform them of dates, times, locations, meeting agendas and the background to issues which shareholders are being asked to vote on, and rules and regulations for the meeting and its voting processes. 4. This information is provided to shareholders in the notice of meeting in accordance with the legally required advance period. Information is explained in detail so a reader who has no background knowledge of the topic will still be able to easily understand it. Since 24th March 2005, all information regarding shareholder meetings has been posted on the Companyâ&#x20AC;&#x2122;s website before notice of the meetings is sent out, so that shareholders can study all information prior to receiving the notice.

5. The Company’s policy prohibits any action that could be considered to violate a shareholder’s right to access information on the shareholder meeting. Shareholders can make advance inquiries about information they do not understand or submit advance questions to the Company’s Investor Relations Department on 0-2699-2515 or to the Company Secretary Department on 0-2643-0076. 6. To encourage attendance at shareholder meetings, the Company provides free-of-charge refreshments and snacks for shareholders before and after meetings as well as souvenirs. The Company encourages shareholders’ participation and voting in meetings at no charge. Any action that could be considered to violate their right to attend meetings is prohibited. The Company has streamlined its procedures for attending and voting at meetings. The chairman of the meeting ensures there is appropriate time set aside for discussion and encourages shareholders to express their opinions and ask questions related to the Company’s operations. Moreover, after the meeting directors meet with shareholders in person and provide them with an opportunity to ask any questions they may not want to ask during the meeting. Section 2 Equitable Treatment of Shareholders 1. The Company allows shareholders who cannot attend meetings to cast a proxy vote. Shareholders must submit a proxy form to the Company Secretary Department before the meeting so it can be verified. 2. The Company encourages the use of proxy forms on which shareholders can specify their voting preferences. The Company provides an option for shareholders to appoint the Chairman of the Audit Committee, who is an independent director, as their proxy. 3. The Company allows minority shareholders to propose any issues to be added to the meeting agenda as well as submitting nominations for directors before the 2007 AGM by using the form provided by the Company and sending it by registered mail to the Company from 1st December 2006 to 31st January 2007. The Company posted the above proposals on its website and through the SET’s electronic media. 4. For the sake of transparency and historical record, the Company encourages the use of voting cards. The voting cards will be kept as evidence if there is any argument after the meeting. 5. The Company allows shareholders to vote on individual nominees. 6. The Company’s code of conduct covers inside information and insider trading, as well as the use of applicable laws to monitor and prevent the personal use of confidential Company information by management and related persons. In addition, the Company prohibits directors and senior management using inside information in violation of their responsibilities to the Company, its shareholders and its strict compliance policy. Material information which has not yet been disclosed is kept confidential, apart from disclosure to the relevant senior management of the Company. Directors and senior management must report purchases, sales, transfers and assignations of securities issued by the Company to the office of Securities and Exchange Commission (“SEC”) within three days of the transaction’s execution, and provide a copy of this report to the Company for its records and incorporation in its regular report to the Board of Directors. 7. In 2006 no Board member or executive had conflict of interest in proposed Company transactions 8. The Company has measures and procedures for approving the entering into connected transactions in compliance with the Rules and Regulations of the Office of Securities and Exchange Commission (“SEC”) and the Stock Exchange of Thailand (“SET”) i.e. related party transactions must obtain approval from the Independent Directors to be processed according to the internal procedure relating to related party transactions, details of which have been stipulated by the Independent Directors. If any related party transaction is deemed to be a connected transaction, the said transaction must be approved by the Audit Committee, the Board of Directors and/or Shareholders Meeting _ as the case may be _ according to the Regulations of the Stock Exchange of Thailand.

The Company has also established an Independent Committee to take part in monitoring highly significant connected transactions. This committee comprises independent directors, creditor-nominated directors and directors representing major shareholders. If any major shareholder has a conflict of interest, directors nominated by this shareholder will abstain from the Independent Committee meeting to consider the case. Section 3 Role of Stakeholders 1. The Board of Directors recognizes the importance of acknowledging the rights of all stakeholders and their ability to positively influence the Company’s conduct and activities, and vice versa. Accordingly, the Company has established a “Code of Conduct” covering employees and stakeholders which includes: Employees - The right to privacy and the right to be protected from any violation of that privacy - The right to receive fair and equal treatment - The right to fair and equal employment rights such as the right to take leave and to receive fringe benefits, and the opportunity to be promoted, to transfer to other work units, and to receive performance assessments Customers - The right to receive fair and equal treatment - The right to receive full and efficient service from the Company’s employees - The right to receive quality goods and highly efficient service - The right to protection of confidential information Suppliers and dealers (business partners) - The right to fair and equal treatment - The right to protection of confidential information - The right to be treated honestly and reliably - The right to information on relevant laws, regulations and policies - The right to fair competition Creditors - The right to receive honor compliance (with all agreements in accordance with their terms and relevant laws and regulations) - The right to receive correct and complete financial information - The right to receive payments owing, as well as safeguarding all guaranteed assets given as security Investors - The right to receive fair and equal treatment - The right to be treated with the best intentions of the management to operate the business with their best knowledge, skills, and honesty - The right to be protected from the use of insider information for pursuing private interests Government agency - The right to regulate, monitor and punish according to laws and regulation and the government agency’s standard practice. 2. The Company’s Internal Audit Department reports directly to, and is accountable to, the Audit Committee. The Company provides opportunities for its employees to address their concerns directly to this department or the Audit Committee.

3. The Company operates its business while taking into consideration environmental and social matters and is focused on promoting a knowledge-based society as a path to sustainable development for Thailand. The Company uses modern telecommunications technology to develop educational projects which help with the development of youth and underprivileged children in Thai society. A knowledge-based society offering a better quality of life is an important foundation for ensuring Thailand’s future prosperity. The Company has established various environmental projects and activities such as: - Mobile Phone Battery Disposal Project: The Company fully supports the Mobile Phone Battery Disposal Project initiated by the Ministry of Natural Resources and Environment to dispose of mobile phone batteries correctly and safely. The Company joined the project by publicizing the risk that expired mobile phone batteries pose to the environment if incorrectly disposed of. Unwanted batteries can be left in collection boxes at all True Shops and True Move Shops nationwide. - Dropwire Reuse Project: A project reusing dropwire that is not in service and has become “aerial garbage”. - Beautiful River by True: The Company’s fixed line team is working with Bang Plat District’s Environmental Office to collect garbage in the Chao Phraya River. - Solar Energy Project: The Company is working with King Mongkut’s Institute of Technology Ladkrabang to encourage the use of solar energy to tackle fuel shortage problems and reduce environmental impacts. This includes offering high-speed Internet connections powered by solar cells and by using solar energy for hi-tech home solutions. - Bangkok Surrounding Improvement Project: A joint venture between Bangkok Metropolitan Administration and the Company to tidy up all fixed-line cabling along Bangkok’s main roads to commemorate the Auspicious Occasion of the Sixtieth Anniversary of His Majesty the King’s Accession to the Throne. - Save Pattaya Beach Campaign: A joint venture between the Company and Pattaya City Council to collect garbage on a three kilometer stretch of central Pattaya beachfront. - Natural and Environmental Preservation for Youth: Activities to raise youth awareness of natural and environmental preservation are being jointly undertaken by the Company, Rangsit Nature Education Center and WWF Thailand. The project team has arranged two activities: “Our Sea We Love” and “Life On Our Planet” at Digital Playground by True on the third floor of Bangkok’s shopping mega mall Siam Paragon to encourage the younger generation to preserve nature and the environment. - Nature Classroom Project: This project takes education outside the traditional classroom by helping students in schools under the management of the Bangkok Metropolitan Administration’s Education Department to learn more about preserving nature and the environment. The project’s activities include marine tours to Siam Ocean World at Siam Paragon. - The Nature Conservation Photography Contest - “Precious Wildlife and Valued Forest”: This program aims to build awareness of nature and the environment, especially forest and wildlife, through a photography contest held annually since 1995 and now in its 12th year. The program also includes a photo-taking forum where leading photographers and nature preservation activists are invited to share their knowledge and viewpoints on photo-taking technique as well as natural and environmental preservation. In 2006 we held seven of these forums. The Company is also considering establishing an environmental and social policy and submitting it to the Board of Directors in 2007. Section 4 Disclosure and Transparency 1. The Company discloses financial and non-financial information (as required by SET regulations) accurately, thoroughly, and in a timely and transparent manner through various channels including the SET and the Company’s website, in Thai and English. All disclosed information is updated from time to time. The Company also posts on its website detailed information for analysts and investors such as a graphical

summary of financial results showing core business performance, comparative balance sheets, investor news, etc. 2. The Company provides a summary of the Corporate Governance Policy approved by its Board and corporate governance practice through various channels such as the annual report and website. 3. The Company provides a statement of the Board’s responsibilities concerning the Company’s financial report. This statement is presented alongside the auditor’s report in the Company’s annual report. 4. The Company discloses the roles and responsibilities of the Board of Directors and its committees, the total number of meetings and the number of meetings each member attends, as well as the results of tasks performed during the year in the annual report and in shareholder meeting notices, according to SET and SEC regulations. 5. The Company paid directors remuneration in 2006 according to rates approved by shareholders at the 2006 AGM, which are the same rates approved by the 1998 and 2002 AGMs and which have not changed for several years. Remuneration of directors is paid on a monthly basis 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

Any director being an employee of the Company shall receive the director’s remuneration in addition to his or her salary as an employee. Independent directors who hold a position on a committee shall receive remuneration as follows: Independent director who is also the Chairman of a committee Baht 300,000 per month Independent director who is also a member of a committee Baht 200,000 per month Remuneration of independent directors who are not members of a committee, and directors who are not independent directors, shall remain the same 6. In 2006 the Company paid senior executives remuneration according to their contributions and responsibilities, commensurate with that paid by other companies in the same industry. 7. The Company discloses details of its remuneration, including the nature and amount of payment, in its annual report and annual registration statement (Form 56-1). 8. The Company’s Investor Relations Department communicates with external parties in a fair and professional manner. Section 5 Responsibilities of the Board 1. Board Structure 1.1 The Board of Directors consists of four executive directors and 14 non-executive directors. Independent directors make up 22 percent of the total number. 1.2 The term of service for each director is clearly stated in the Company’s corporate governance policy and Articles of Association which are in accordance with legal requirements. 1.3 The Company has specified the details of independent directors’ qualifications in its annual registration statement (Form 56-1) and the annual report. 1.4 The Company details the background and position of each member of the Board in its annual report and annual registration statements (Form 56-1). Shareholders can download this information from the SET website at www.set.or.th or from the Company website at www.truecorp.co.th.

1.5 Board policy specifies that directorships held in other companies by the Company’s senior executives must be disclosed to their superiors. 1.6 The Chairman of the Board is a non-executive director and the CEO is not the same person as the Chairman. The roles and responsibilities of the Chairman are in accordance with the law. The roles and responsibilities of the CEO are determined by the Board of Directors. 1.7 The Company Secretary serves the Board of Directors by providing legal advice, helping organize the Board’s activities, and monitoring compliance with the Board’s resolutions. The Company Secretary also meets with counterparts from other listed companies from time to time to discuss best practice. 2. Committees 2.1 As well as the Audit Committee established by the Company according to SET regulations, the Board of Directors has established the following committees to manage good corporate governance: The Compensation and Nominating Committee is responsible for making recommendations to the Board of Directors regarding the compensation of directors and the CEO, and the nomination of directors of the Company. The Finance Committee is responsible for assisting the Board of Directors to review and monitor the Company’s financial management. The Corporate Governance Committee assists the Board of Directors to establish and review the Company’s corporate governance policy as well as making sure that the Company has a sound and appropriate corporate governance practice. The Independent Committee is responsible for reviewing and monitoring Company transactions which may involve highly significant conflicts of interest. 2.2 So that the committees can perform their duties transparently, independently, and at the same time effectively, their membership comprises independent directors, creditor-nominated directors and non-executive directors. 3. Roles and Responsibilities of the Board 3.1 The Board of Directors reviews and approves key business matters such as the vision and mission of the Company, strategy, financial targets, risks, major plans of action and budget. The Board also monitors the performance of management to ensure their efficiency and effectiveness. 3.2 The Board sets and approves a written corporate governance policy for the Company and reviews the policy and its compliance regularly, at least annually. In 2006, the Board of Directors approved and implemented the new Corporate Governance policy (which has been amended and proposed by the Corporate Governance Committee) to be in line with the Principles of Good Corporate Governance for Listed Companies 2006 issued by the Stock Exchange of Thailand, combined with the concept of Sufficiency Economy. 3.3 The Board of Directors ensures that a written code of business conduct is in place so that all directors, executives and employees understand the Company’s ethical standards for doing business. Compliance with the code is closely monitored by the Board. 3.4 The Board of Directors considers transactions involving conflicts of interest thoroughly. It follows clear guidelines on approving such transactions so that they are conducted in the best interests of the Company and all shareholders. The person who has an interest in the transaction does not participate in the decision-making process. The Board also monitors compliance with the regulations regarding criteria, procedures and disclosure of transactions involving conflicts of interest. 3.5 The Board of Directors ensures that internal control systems are in place, including financial, compliance and policy controls, and reviews the system at least annually. The Board also assigns the Audit Committee to monitor the independent audit and report on the system. 3.6 The Company runs a risk management system covering operational and financial risk as well as maintaining internal auditing using a risk-based audit approach. To manage operational risk the Company has established the BCP Steering Committee to develop and maintain a business continuity plan. The Company has

also established a Crisis Management Team to support significant business operations of the Company which may face a crisis, by implementing and managing a crisis response. To manage financial risk, the Company has a financial management policy to mitigate risks arising from fluctuations in currency exchange rates. This policy includes entering into forward foreign exchange contracts, negotiating payment terms for individual foreign currency settlements, and negotiating with foreign suppliers to share foreign exchange exposure, etc. 4 Board Meetings 4.1 The Company sets its meeting schedule in advance and notifies each director of this schedule. However, in an emergency case the Company can also call for an additional Board meeting. 4.2 In 2006 the Company held seven Board meetings which are appropriate to the obligations and responsibilities of the Board and the nature of the Company during the year. 4.3 The Chairman and/or Vice Chairman of the Board and the CEO jointly set the agenda for each Board meeting. Moreover, each Board member is free to suggest agenda items. 4.4 Meeting documents are sent to each director before the meeting. These documents are concise but contain all relevant information. Any confidential issues are discussed during the meeting. 4.5 The Chairman of the Board allocates enough time for the meeting to receive full presentations from management and host comprehensive discussions by directors. 4.6 The Board is able to access additional information, under a prearranged agreement, via the CEO, the Company secretary and/or the executive designated as a contact person. 4.7 Top executives attend Board meetings to detail the issues that they are directly responsible for. 5 Board Self Assessment 5.1 The Board of Directors will start its annual Board Self Assessment in 2007 6 Remuneration 6.1 Board members’ remuneration is commensurate with that of other directors in the Company’s industry, and reflects the experience, obligations, range of work, accountability, responsibilities and contributions of each director. Members of the Board with greater responsibilities, such as independent directors who also hold committee memberships, are paid more. 6.2 Remuneration of the CEO and top executives is set in accordance with Board policy, within the limits approved by shareholders (for the types of remuneration that require such approval). Executives’ salaries, bonuses and other long-term compensation reflect the Company’s performance and that of each executive. 6.3 The Compensation and Nominating Committee appraises the performance of the CEO annually to set his compensation. The basis of the appraisal is agreed upon by the CEO ahead of the evaluation. The criteria are objective, including financial performance, long-term strategic performance, career development plan, etc. The results of the appraisal are then presented to the Board for approval. The Chairman of the Board or a senior director communicates the evaluation results to the CEO. 7 Board and Management Training 7.1 The Company encourages and facilitates training for all internal parties who have a role in corporate governance, including directors, members of the Audit Committee, executives, the Company Secretary, etc. Training – either internal or external – enables them to continuously improve their performances. 7.2 In 2006 the Company had no new directors. However, the Company has a policy stipulating that every time it appoints new directors, the administrator has to provide all necessary documents and information on the nature of the business and the operations of the Company to the new directors.

Revenues

Breakdown by

Business Group

(Restated) Business Group / Operation by

31 December 2006 Baht Million

31 December 2005 Baht Million

31 December 2004 Baht Million

1. Wireline Revenues

20,791 40.1%

22,143

50.6%

23,143

70.1%

Revenues

22,694 43.8%

21,648

49.4%

9,867

29.9%

Revenues

8,377 16.1% 43,791

100%

33,010

100%

2. Wireless

3. Pay - TV

Total Revenues

51,862

100%

Source: The Company

Corporate

Information

True Corporation Public Company Limited (the “Company”), with the security symbol “TRUE” on the Stock Exchange of Thailand, was established on 13th November 1990 initially under the name of CP Telecommunication Co., Ltd. with authorized capital of Baht 1,000 million to undertake a major telecommunication infrastructure project, and registered as a limited public company with registration no. 0170536000081 (Formerly registration no. Bor Mor Jor 82) on 11th February 1993. As at 31st December 2006, the Company’s authorized capital is Baht 47,134,724,910 consisting of 4,014,105,645 ordinary shares with a par value of Baht 10 per share and 699,366,846 preference shares with a par value of Baht 10 per share. The Company’s paid-up capital is Baht 45,015,277,360, comprising 3,802,160,890 ordinary shares with a par value of Baht 10 per share and 699,366,846 preference shares with a par value of Baht 10 per share. The Company’s head office is located at: 18 True Tower, Ratchadapisek Road, Huai Khwang, Bangkok 10310 Telephone: (662) 643-1111 Fax: (662) 643-1651 Website: www.truecorp.co.th

The Company’s subsidiaries, associate companies and other investments are as follows:

Company Name Asia DBS Public Company Limited

Address

Type of Business

Paid-up Capital

% of Investment

18 True Tower,

DBS system

THB 100 million divided 89.99

Ratchadapisek Road,

operator

into10 million ordinary

Huai Khwang,

shares with a par value

Bangkok 10310

of Baht 10 each

Tel. (662) 643-1111 Fax. (662) 643-1651 Asia Infonet Company Limited

1 Fortune Tower,

Internet

THB 15 million divided

14th, 17th Floors,

provider

into 1.5 million ordinary

Ratchadapisek Road,

shares with a par value

Din Dang, Bangkok 10400

of Baht 10 each

65.00

Tel. (662) 641-1800 Asia Wireless Communication Company

18 True Tower,

Limited

Ratchadapisek Road,

THB 10,441.85 million divided into 1,044.18

Huai Khwang,

million ordinary shares

Bangkok 10310

with a par value of Baht

Tel. (662) 643-1111

10 each

Fax. (662) 643-1651

PCT operator

99.99

Company Name

Address

Type of Business

Paid-up Capital

% of Investment 93.36

Bangkok Inter Teletech Public Company

18 True Tower,

Holding

THB 13,562.50 million

Limited

Ratchadapisek Road,

Company

divided into 5,425

Huai Khwang,

million ordinary shares

Bangkok 10310

with a par value of Baht

Tel. (662) 643-1111

2.50 each

Fax. (662) 643-1651 BeboydCg Company Limited

1000/6 Liberty Plaza

Music

THB 16.52 million

Building, 20 Floor,

production

divided into 1.65 million

Sukhumvit 55,

70.00

ordinary shares with a

Sukhumvit Road,

par value of Baht

Klongtan-nua, Wattana,

10 each

Bangkok 10110 Cineplex Company Limited

118/1 Tipco Tower,

Program

THB 1,283.43 million

Rama VI Road,

production

divided into 128.34

Samsen Nai, Phayathai,

million ordinary shares

Bangkok 10400

with a par value of

Tel. (662) 615-9000

Baht 10 each

91.79

Fax. (662) 615-9900 Click TV Company Limited

118/1 Tipco Tower,

Interactive

THB 46 million divided

Rama VI Road,

television

into 4.6 million ordinary

Samsen Nai, Phayathai,

business

shares with a par value

Bangkok 10400

91.79

of Baht 10 each

Tel. (662) 615-9000 Fax. (662) 615-9900 IBC Symphony Company Limited

118/1 Tipco Tower,

Dormant

Rama VI Road,

THB 30 million divided

91.79

into 3 million ordinary

Samsen Nai, Phayathai,

shares with a par value

Bangkok 10400

of Baht 10 each

Tel. (662) 615-9000 Fax. (662) 615-9900 Internet KSC Company Limited

2/4 Siam Commercial

Distribution

THB 50,000 divided into 91.05

Samaggi Insurance tower,

20,000 ordinary shares

10th Floor,

with a par value of Baht

Vibhavadee-Rangsit Road,

10 each, partial call up

Thungsonghong, Laksi,

a par value of Baht

Bangkok 10210

2.50 each

Tel. (662) 979-7000

Company Name

Address

Type of Business

Paid-up Capital

% of Investment 56.93

Internet Knowledge Service Center

2/4 Siam Commercial

Non-

THB 50 million divided

Company Limited

Samaggi Insurance tower,

government

into 2.67 million ordinary

10th Floor,

telecommunications shares with a par value

Vibhavadee-Rangsit Road,

of Baht 10 each and

Thungsonghong, Laksi,

9.33 million ordinary

Bangkok 10210

share with partial call

Tel. (662) 979-7000

up a par value of Baht 2.50 each

Internet Shopping Mall Company Limited

K.I.N. (Thailand) Company Limited

2/4 Siam Commercial

Training

THB 50,000 divided into 58.10

Samaggi Insurance tower,

services and

20,000 ordinary shares

10th Floor, Vibhavadee-Rangsit distribution

with a par value of Baht

Road, Thungsonghong, Laksi,

10 each, partial call up

Bangkok 10210

a par value of Baht

Tel. (662) 979-7000

2.50 each

18 True Tower,

Holding

THB 352.50 million

Ratchadapisek Road,

Company

divided into 11.75

Huai Khwang,

million ordinary shares

Bangkok 10310

with a par value of Baht

Tel. (662) 643-1111

30 each

99.99

Fax. (662) 643-1651 KSC Commercial Internet Company

2/4 Siam Commercial

Internet

THB 15 million divided

Limited

Samaggi Insurance tower,

provider

into 1.5 million ordinary

10th Floor,

shares with a par value

Vibhavadee-Rangsit Road,

of Baht 10 each

37.83

Thungsonghong, Laksi, Bangkok 10210 Tel. (662) 979-7000 MKSC World Dot Com Company Limited

2/4 Siam Commercial

Internet

THB 200,000 divided

Samaggi Insurance tower,

services and

into 20,000 ordinary

10th Floor,

distribution

shares with a par value

Vibhavadee-Rangsit Road,

91.08

of Baht 10 each

Thungsonghong, Laksi, Bangkok 10210 Tel. (662) 979-7000 N&T Communication Company Limited

18 True Tower,

Telecommunications THB 1 million divided

Ratchadapisek Road,

services

shares with a par value

Bangkok 10310

of Baht 100 each

Tel. (662) 643-1111 Fax. (662) 643-1651

into 10,000 ordinary

Huai Khwang,

99.94

Company Name

Address

Online Advertising Goldsite Company

2/4 Siam Commercial

Limited

Samaggi Insurance tower,

Type of Business Publication

Paid-up Capital

% of Investment

THB 50,000 divided into 58.10 20,000 ordinary shares

10th Floor,

with a par value of

Vibhavadee-Rangsit Road,

Baht 10 each, partial

Thungsonghong, Laksi,

call up a par value of

Bangkok 10210

Baht 2.50 each

Tel. (662) 979-7000 Red Media Company Limited

118/1 Tipco Tower,

Dormant

Rama VI Road,

THB 25 million divided

91.79

into 2.5 million ordinary

Samsen Nai, Phayathai,

shares with a par value

Bangkok 10400

of Baht 10 each

Tel. (662) 615-9000 Fax. (662) 615-9900 Samut Pakan Media Corporation Company 18 True Tower,

Telecommunications THB 1 million divided

Limited

services

Ratchadapisek Road,

93.31

into 10,000 ordinary

Huai Khwang,

shares with a par value

Bangkok 10310

of Baht 100 each

Tel. (662) 643-1111 Fax. (662) 643-1651 Satellite Service Company Limited

118/1 Tipco Tower,

Sales and rental

THB 2,880 million

Rama VI Road,

of equipment

divided into 480 million

Samsen Nai, Phayathai,

related to Pay

ordinary shares with

Bangkok 10400

Television

a par value of Baht

Tel. (662) 615-9000

89.19

6 each

Fax. (662) 615-9900 Song Dao Company Limited

18 True Tower,

Retail services

THB 1 million divided

Ratchadapisek Road

into 10,000 ordinary

Huai Khwang,

shares with a par value

Bangkok 10310

of Baht 100 each

93.30

Tel. (662) 643-1111 Fax. (662) 643-1651 Tele Engineering and Services Company

18 True Tower,

Construction

THB 25 million divided

Limited

Ratchadapisek Road,

and distribution

into 2.5 million ordinary

Huai Khwang,

shares with a par value

Bangkok 10310

of Baht 10 each

99.99

Tel. (662) 643-1111 Fax. (662) 643-1651

Company Name

Address

Type of Business

Paid-up Capital

% of Investment 59.99

Telecom Equipment Manufacturing

18 True Tower,

Telecom

THB 24 million divided

Company Limited

Ratchadapisek Road,

equipment

into 2.4 million ordinary

Huai Khwang,

manufacturer

shares with a par value

Bangkok 10310

of Baht 10 each

Tel. (662) 643-1111 Fax. (662) 643-1651 Telecom Holding Company Limited

18 True Tower,

Holding

THB 17,300.25 million

Ratchadapisek Road,

Company

divided into 1,722.52

Huai Khwang,

million ordinary shares

Bangkok 10310

with a par value of Baht

Tel. (662) 643-1111

10 each and 21 million

Fax. (662) 643-1651

ordinary shares with

99.99

partial call up a par value of Baht 3.57 each Telecom International Company Limited

18 True Tower,

Holding

THB 300 million divided 99.99

Ratchadapisek Road,

Company

into 30 million ordinary

Huai Khwang,

shares with a par value

Bangkok 10310

of Baht 10 each

Tel. (662) 643-1111 Fax. (662) 643-1651 Telecom KSC Company Limited

2/4 Siam Commercial

Non-

THB 250,000 divided

Samaggi Insurance tower,

government

into 100,000 ordinary

10th Floor,

telecommunications shares with a par value

Vibhavadee-Rangsit Road,

of Baht 10 each, partial

Thungsonghong, Laksi,

call up a par value of

Bangkok 10210

Baht 2.50 each

34.39

Tel. (662) 979-7000 Telecom Training and Development

18 True Tower,

Training

THB 120 million divided 99.99

Company Limited

Ratchadapisek Road,

services

into 5 million ordinary

Huai Khwang,

shares with a par value

Bangkok 10310

of Baht 10 each and 8

Tel. (662) 643-1111

million ordinary shares

Fax. (662) 643-1651

with partial call up a par value of Baht 8.75 each

True Digital Entertainment Company

1 Fortune Tower,

Limited

THB 633 million divided 99.99

25 Floor,

into 63.3 million ordinary shares with a par value

Din Dang, Bangkok 10400

of Baht 10 each

Tel. (662) 641-1800

Online games

Ratchadapisek Road,

Company Name

Address

True Distribution and Sales Company

18 True Tower

Limited

Ratchadapisek Road,

Type of Business Retail services

Paid-up Capital

% of Investment

THB 1 million divided

93.30

into 10,000 ordinary

Huai Khwang,

shares with a par value

Bangkok 10310

of Baht 100 each

Tel. (662) 643-1111 Fax. (662) 643-1651 True Leasing Company Limited

18 True Tower,

Rental services

THB 2,394.96 million

(formerly “True Fleet Management

Ratchadapisek Road,

Company Limited”)

Huai Khwang,

ordinary shares with a

Bangkok 10310

par value of Baht 10

Tel. (662) 643-1111

each and 181.20 million

Fax. (662) 643-1651

ordinary shares with

99.99

divided into 65 million

partial call up a par value of Baht 9.63 each True Internet Company Limited

1 Fortune Tower,

Internet

14 , 27 Floors,

solution

divided into 23.64

Ratchadapisek Road,

provider

million ordinary shares

THB 511.2 million

Din Dang, Bangkok 10400

with a par value of Baht

Tel. (662) 641-1800

10 each and 36.64

99.99

million ordinary shares with partial call up a par value of Baht 7.50 each True Internet Gateway Company Limited

1 Fortune Tower,

Telecommunications THB 26 million divided

(formerly “Sky Office Company Limited”)

15th Floors,

and internet

into 260,000 ordinary

Ratchadapisek Road,

services

shares with a par value

Din Dang, Bangkok 10400

99.99

of Baht 100 each

Tel. (662) 641-1800 True Internet Data Center Company

18 True Tower,

Internet data

THB 149.59 million

Limited

14th Floor,

center

divided into 14.96 million

Ratchadapisek Road,

ordinary shares with a

Huai Khwang,

par value of Baht 10

Bangkok 10310

each

70.00

Tel. (662) 643-1111 Fax. (662) 643-1651 True Lifestyle Retail Company Limited

18 True Tower,

Internet cafe

THB 131 million divided 99.99

Ratchadapisek Road,

and related

into 13.1 million

Huai Khwang,

services

ordinary shares with a

Bangkok 10310

par value of Baht 10

Tel. (662) 643-1111

each

Fax. (662) 643-1651

Company Name

Address

Paid-up Capital

% of Investment

True Magic Company Limited

18 True Tower, Ratchadapisek Road, Huai Khwang, Bangkok 10310 Tel. (662) 643-1111 Fax. (662) 643-1651

Production and distribution of movies and films

THB 1 million divided into 100,000 ordinary shares with a par value of Baht 10 each

True Money Company Limited

18 True Tower, Ratchadapisek Road, Huai Khwang, Bangkok 10310 Tel. (662) 643-1111 Fax. (662) 643-1651

Payment service center and electronic card services

THB 200 million divided 99.99 into 20 million ordinary shares with a par value of Baht 10 each

True Move Company Limited

18 True Tower, Ratchadapisek Road, Huai Khwang, Bangkok 10310 Tel. (662) 643-1111 Fax. (662) 643-1651

Cellular operator

THB 30,600.15 million 93.27 divided into 3,060.02 million ordinary shares with a par value of Baht 10 each

True Multimedia Company Limited

18 True Tower, Ratchadapisek Road, Huai Khwang, Bangkok 10310 Tel. (662) 643-1111 Fax. (662) 643-1651

NON-POTS and multimedia services

THB 6,562 million divided into 656.2 million ordinary shares with a par value of Baht 10 each

True Properties Company Limited

18 True Tower, Ratchadapisek Road, Huai Khwang, Bangkok 10310 Tel. (662) 643-1111 Fax. (662) 643-1651

Rental services

THB 3,488 million 99.99 divided into 34.88 million ordinary shares with a par value of Baht 100 each

True Public Communication Company Limited (formerly â&#x20AC;&#x153;Chachoengsao Sky Network Company Limitedâ&#x20AC;?)

18 True Tower, Ratchadapisek Road, Huai Khwang, Bangkok 10310 Tel. (662) 643-1111 Fax. (662) 643-1651

Telecommunications THB 1 million divided services into 10,000 ordinary shares with a par value of Baht 100 each

True Touch Company Limited

18 True Tower, Ratchadapisek Road, Huai Khwang, Bangkok 10310 Tel. (662) 643-1111

Call center services

Fax. (662) 643-1651

Type of Business

99.99

91.08

99.94

THB 193 million divided 99.99 into 1.93 million ordinary shares with a par value of Baht 100 each

Company Name

Address

Type of Business

Paid-up Capital

True Universal Convergence Company

18 True Tower,

Telecommunications THB 1 million divided

Limited

Ratchadapisek Road,

services

(formerly “R&R Communication Company

Huai Khwang,

shares with a par value

Limited”)

Bangkok 10310

of Baht 100 each

% of Investment 99.94

into 10,000 ordinary

Tel. (662) 643-1111 Fax. (662) 643-1651 True Visions Cable Public Company Limited 118/1 Tipco Tower,

Pay Television

THB 7,608.65 million

(formerly “UBC Cable Network Public

Rama VI Road,

via cable

divided into 760.86

Company Limited”)

Samsen Nai, Phayathai,

system

million ordinary shares

Bangkok 10400

with a par value of Baht

Tel. (662) 615-9000

10 each

90.89

Fax. (662) 615-9900 UBC Fantasia Company Limited

118/1 Tipco Tower,

Artist

THB 25 million divided

Rama VI Road,

management

into 2.5 million ordinary

Samsen Nai, Phayathai,

and related

shares with a par value

Bangkok 10400

business

of Baht 10 each

Pay Television

THB 2,266.72 million

46.81

Tel. (662) 725-7400 Fax. (662) 725-7401 True Visions Public Company Limited

118/1 Tipco Building,

(formerly “ United Broadcasting Corporation Rama 6 Road, Public Company Limited”)

Wire & Wireless Company Limited

91.79

divided into 755.57

Phayathai,Bangkok 10400

million ordinary shares

Tel. (662) 615-9000

with a par value of Baht

Fax. (662) 615-9900

3 each

54 W&W Building,

Construction

Pattanakarn 20,

and distribution

THB 100 million divided 87.50 into 10 million ordinary

Suanluang, Bangkok

shares with a par value

Tel. (662) 717-9000

of Baht 10 each

Fax. (662) 717-9900 NC True Company Limited

18 True Tower,

Developer and

THB 174.91 million

18th Floor,

service provider

divided into 8.57 million Share

50.00

Ratchadapisek Road,

of online games

ordinary shares with a

holding

Huai Khwang,

par value of Baht 10

but

Bangkok 10310

each and 8.92 million

40.00

Tel. (662) 643-1111

preference shares with

Voting

Fax. (662) 643-1651

a par value of Baht

Rights

10 each Asia Remanufacturing Industries Company

102, 15th Floor,

Modification,

THB 5.6 million divided

Limited

Na Ranong Road,

repair and

into 56,000 ordinary

Klongtoey,

maintenance

shares with a par value

Bangkok 10110

services

of Baht 100 each

20.00

Company Name Thai Smart Card Company Limited

Address 191 Silom Complex

Type of Business

Paid-up Capital

% of Investment

Central Service

THB 800 million divided 15.76

Building, 27 Floor,

Bureau for

into 80 million ordinary

Room No. 2, Silom Road,

clearing electronic shares with a par value

Bangrak, Bangkok

payment

of Baht 10 each

transactions NEC Corporation (Thailand) Company

159 Sermmit Tower 2nd,

Limited

24 Floor, Sukumvit 21,

Telecommunications THB 343 million divided

9.62

into 343,000 ordinary

Klongtoey Nua, Wattana,

equipment

shares with a par value

Bangkok

manufacturer

of Baht 1,000 each

International Broadcasting Corporation

78 Levine Blvd.

Dormant

USD 1 million divided

(Cambodia) Company Limited

Phnom Penh City,

into 1 million ordinary

Cambodia

shares with a par value

64.25

of USD 1 each K.I.N. (Thailand) Company Limited

P.O. Box 957,

Holding

USD 1 divided into 1

(BVI)

Offshore Incorporation,

Company

ordinary share with a par

Road Town, Tortola,

99.99

value of USD 1 each

British Virgin Island Nilubon Company Limited

P.O. Box 71,

Holding

USD 8,000 divided into 99.99

(BVI)

Craigmuir Chambers,

Company

8,000 ordinary shares

Road Town, Tortola,

with a par value of USD

British Virgin Island

1 each

TA Orient Telecom Investment Company

3/F, Hing Yip Commercial

Holding

USD 15 million divided

Limited

Centre,

Company

into 15 million ordinary

Telecom Asia (China) Company Limited

272 Des Voeus Road C.,

shares with a par value

Hong Kong

of USD 1 each

P.O. Box 957,

Communication

99.99

USD 10 divided into 10 99.99

Offshore Incorporation

ordinary shares with a

Road Town, Tortola,

par value of USD 1 each

British Virgin Island Telecom International China Company

P.O. Box 71,

Communication

USD 10 divided into 10 99.99

Limited

Craigmuir Chambers,

ordinary shares with a

Road Town, Tortola,

par value of USD 1 each

British Virgin Island

Chongqing Communication Equipment

140 Daping Zhengjie

Telecommunications RMB 292 million

Company Limited

Chongqing,

equipment

Peopleâ&#x20AC;&#x2122;s Republic of China

manufacturer

38.21

Telecom Training and Development Co., Ltd.

99.99%

True Visions Public Company Limited

91.79%

K.I.N. (Thailand) Limited

(Formerly named United Broadcasing Corporation Public Company Limited)

NEC Corporation (Thailand) Co., Ltd. Imperial Technological Management Services Public Company Limited

9.62%

70.00%

51.00%

97.17%

99.34%

99.99%

Telecom Equipment Manufacturing Co., Ltd.

59.99%

2.92%

100.00%

True Touch Co., Ltd.

99.99%

MKSC World Dot Com Co., Ltd.

(Formerly named United Broadcasting Corporation Public Company Limited)

True Visions Public Company Limited

True Money Co., Ltd.

Telecom International Co., Ltd.

True Money Co., Ltd.

Nilubon Co., Ltd. (Foreign Company)

Asia Wireless Communication Co., Ltd.

International Broadcasting Corporation (Cambodia) Co., Ltd.

UBC Fantasia Co., Ltd.

Satellite Service Co., Ltd.

(Formerly named UBC Cable Network Public Company Limited)

True Visions Cable Public Company Limited

IBC Symphony Co., Ltd.

Red Media Co., Ltd.

Click TV Co., Ltd.

Cineplex Co., Ltd.

62.50%

99.97%

99.99%

Internet Knowledge Service Center Co., Ltd.

Internet KSC Co., Ltd.

TA Orient Telecom Investment Co., Ltd.

Telecom Asia (China) Co., Ltd.

Telecom International China Co., Ltd.

66.39%

59.30%

96.50%

38.21%

Direct Shareholding

KSC Commercial Internet Co., Ltd.

Telecom KSC Co., Ltd.

Internet Shopping Mall Co., Ltd.

Online Advertising Goldsite Co., Ltd.

Chongqing Communication Equipment Co., Ltd.

N&T Communication Co., Ltd.

Bangkok Inter Teletech Public Company Limited

True Magic Co., Ltd.

(Formerly named True Fleet Management Co., Ltd.

True Leasing Co., Ltd.

True Internet Co., Ltd.

K.I.N. (Thailand) Limited

99.99%

40.00%

15.76%

87.50%

99.99%

20.00%

70.00%

BeboydCg Co., Ltd.

True Distribution & Sales Co., Ltd.

99.93%

True Move Co., Ltd.

Samut Pakan Media Corporation Co., Ltd.

Song Dao Co., Ltd.

True Digital Entertainment Co., Ltd.

True Internet Data Center Co., Ltd.

Asia Infonet Co., Ltd.

Asia Remanufacturing Industries Co., Ltd.

99.89%

99.94%

99.93%

70.00%

65.00%

Indirect Shareholding

(Formerly named Sky Office Co., Ltd.)

True Internet Gateway Co., Ltd.

NC True Co., Ltd.

Thai Smart Card Company Limited

Wire & Wireless Co., Ltd.

True Digital Entertainment Co., Ltd.

True Money Co., Ltd.

(Formerly named R&R Communication Co., Ltd.)

99.94% True Universal Convergence Co., Ltd.

93.36%

99.99%

(Formerly named Chachoengsao sky Network Co.,Ltd.)

99.94% True Public Communication Co., Ltd.

99.94%

True Corporation Public Company Limited

Bangkok Inter Teletech Public Company Limited

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

99.99%

100.00%

Asia DBS Public Company Limited

True Multimedia Co., Ltd.

99.99%

89.99%

91.08%

True Lifestyle Retail Co., Ltd.

Tele Engineering and Services Co., Ltd.

99.99%

Asia Wireless Communication Co., Ltd.

True Properties Co., Ltd.

99.99%

Telecom Holding Co., Ltd.

99.99%

As of 31 December 2006

CATEGORIZED BY DIRECT AND INDIRECT SHAREHOLDING

Investment Structure of True Group

References

Registrar

Thailand Securities Depository Company Limited 62 The Stock Exchange of Thailand Building, Rachadapisek Road, Klongtoey, Bangkok 10110 Telephone: (662) 229-2888 Fax: (662) 359-1259 Website: http://www.tsd.co.th

Auditor

Mr. Kajornkiet Aroonpirodkul (Certified Public Accountant (Thailand) No. 3445) and/or Mrs. Nattaporn Phan-Udom (Certified Public Accountant (Thailand) No. 3430) and/or Mr. Boonmee Ngotngamwong (Certified Public Accountant (Thailand) No. 3673) PricewaterhouseCoopers ABAS Limited 179/74-80 Bangkok City Tower, 15th Floor, South Sathorn Road, Sathorn, Bangkok 10120 Telephone: (662) 286-9999, (662) 344-1000 Fax: (662) 286-5050

Debenture Registrar/ : Debentureholdersâ&#x20AC;&#x2122; Representative

TMB Bank Public Company Limited 393 Silom Road, Bangrak, Bangkok 10500 Telephone: (662) 230-5575, (662) 230-5487, (662) 230-5731 Fax: (662) 266-8150

Risk

Factors

While True sees many opportunities for growth in 2007, there are a number of general and specific factors that could impact the companyâ&#x20AC;&#x2122;s performance and that of its subsidiaries.

Risks relating to our operations We have experienced, and expect to continue to experience, increasing competition in the businesses in which we operate. True and its subsidiaries, particularly True Move (formerly TA Orange) and its Internet and Broadband businesses, face increasing competition. The Thai mobile communications sector has experienced intense price competition since 2005, resulting in tariff reductions and declines in ARPU and margin. Our blended ARPU for True Move declined by 10 percent in 2005 (from Baht 437 in 2004 to Baht 393) and by 26 percent in 2006 (to Baht 292). The increase in subscriber additions and increase in usage we experienced following this period of intense price competition required us to make additional capital expenditures to alleviate congestion and expand our network capacity. Our EBITDA margin in 2006 declined to 21.4 percent (from 23.4 percent in 2005). In addition, if the National Telecommunications Commission (NTC) allows telecom operators, to launch additional services, introduces number portability or grants telecom licenses to new operators, it may create more competition in the market. Recent changes of ownership in our key competitors may also expose us to competition from foreign-owned operators with more experience in other competitive markets and greater financial resources than we enjoy. However, we believe that price competition in the mobile phone market will decline after the implementation of the interconnection regime in 2007 because each operator will have a cost burden of connecting to other networks and major mobile operators with market share of higher than 25 percent cannot set their tariffs lower than their costs. This is in line with the NTCâ&#x20AC;&#x2122;s 2006 regulation combating monopolies and unfair competition in operating telecom businesses. The three major mobile operators have already signed interconnection agreements. In the broadband Internet market, we face competitors ranging from start-up Internet companies to multinational companies, whose applications for ISP licenses were approved by the NTC in 2005. At the beginning of 2006 the NTC granted a fixed-line license to TT&T Broadband Company Limited. TT&T could provide fixed-line and broadband Internet services nationwide, thereby intensifying competition. In addition, Trueâ&#x20AC;&#x2122;s online business will face indirect and growingcompetition from mobile phone businesses and Voice over Internet Protocol (VoIP) services, whose tariffs are lower than those for traditional online services. We expect competition to remain intense, but we believe True is well positioned to meet this competition given our leadership position through our ability to provide fully integrated services together with the strength of our brand. True Move has captured one-third of the subscriber additions in the Thai mobile market every year since 2004 and True Group still maintains its market leadership in Internet and Consumer Broadband due to the advantages of having a modern fixed-line network suitable for providing these services.

True and its subsidiaries have applied for new licenses to take advantage of new opportunities offered by regulatory reform. At the time of writing, we have been granted an ISP license, an international Internet gateway license, a public phone license, a fixed-line license and International Direct Dialing (IDD) license. Rapid technological change could also adversely affect the viability of True’s business and make its current technology less competitive. The communications industry is characterized by rapid changes in technology, evolving customer needs and new products and services. These changes are, in some cases, brought about by regulators opening up the market. Key emerging technologies for the Thai communications industry in the near future are expected to include third-generation (3G) mobile phones, wireless broadband (WiMax), and number portability services. In order to respond successfully to emerging industry trends, we may be required to make substantial capital expenditure given the industry’s capital-intensive nature. But if we do not invest in the new technology it will lower our competitiveness. However, we believe that integrated operators, such as ourselves, with diversified services, products, revenues and customer bases, are in a better position to cope with these rapid changes than are “pure play” operators. We believe that we have a stronger ability to manage potential revenue cannibalization from new technologies by being able to keep services and revenues “in-house” and by being able to balance traffic across our mobile, broadband and fixed-line services. Our future success depends on our key personnel and the continued operations of our network and services. Our success depends on the continued contribution of our management and employees as well as the continued operation of our network. We have established human resource policies in order to retain and develop our management team and staff. Compensation is set at a competitive rate compared to the market. In addition, we have established recruitment processes to ensure that we recruit capable staff in the first place. Continued unrest in the southern part of Thailand, as well as unforeseen disasters, may cause temporary disruption in certain geographical areas of our business. The southern part of Thailand has recently experienced increasingly frequent incidents of violence. True Move and several other mobile operators recently experienced temporary interruption of services following damage to a number of cell sites as a result of the violence. Incidents such as these, over which we have no control, may continue to have an impact on our business.

Risks relating to regulatory environment Thailand’s communications industry is in a state of transition and a significant degree of uncertainty exists regarding the regulatory environment. In accordance with Thailand’s commitment to the World Trade Organization, or the WTO, to liberalize its telecommunications sector by 2006, the Thai government embarked on a reform of the country’s telecommunications regulatory regime with the passage of two major legislative acts: the Organizations Allocating Frequency Waves and Supervising Radio and Television Broadcasting and Telecommunications Business Act, or the NTC Act, in March 2000; and the Telecommunications Business Operation Act, or the TBO Act, in November 2001. In October 2004, the NTC was established as the new independent regulator of the telecommunications industry, assuming the regulatory functions previously exercised by the Telephone Organization of Thailand (now known as TOT Public Company Limited), or TOT, the Communications Authority of Thailand (now known as CAT Telecom Public Company Limited), or CAT, and the Post and Telegraph Department.

From its establishment to the end of 2006, the NTC has issued regulations prescribing, among other things: (1) licensing requirements for the various defined categories of telecommunications services; (2) eligibility requirements and application procedures for the three categories of telecommunications licenses available in Thailand; (3) interim regulations for allocating telephone numbers; (4) the change of mobile phone numbers from 9-digits to 10-digits; (5) anti-monopoly and unfair competition rules; (6) the interconnection regulation; (7) procedures for receiving and considering subscribers’ complaints; (8) standard of telecommunications service contracts; and (9) price caps and prepaid collection The NTC is expected to issue a number of additional policies and regulations in 2007 that may have a significant impact on our business. Delays in the organization of the National Broadcasting Commission (NBC), a separate regulator for radio, television and other broadcasters, may prevent the NTC from issuing licenses for new telecom services that require the allocation and management of radio frequency including mobile phone business. If True Move does not get the NTC’s license before the concession contract expires in September 2013, it will not be able to continuously pursue its business and this will strongly impact True Group’s financial status and performance because it is our core business (True Move’s revenue accounted for 44 percent of True Group total revenue in the year 2006). It is also possible that policies imposed by the NTC may adversely affect True’s operating costs and/or increase competition in the sectors in which we operate. The NTC’s interim telecommunications license fee regulation sets out a lower tariff structure for new entrants that operate under the licensing regime than the tariffs that are applicable to the existing concessionaires, such as True, that are operating their businesses under the concession agreements granted by TOT and CAT. This could put the existing concessionaires at a disadvantage to the new entrants. To mitigate against this, True will apply for new licenses offered by the NTC. Apart from the above risks the Company may face some impacts from the uncertainties surrounding new government policies after the changes on Thailand’s political front. In January 2007 the Cabinet approved a proposal made to the Council of State to consider the legal issues regarding the Private-Public Joint Venture Law B.E. 2535: whether the concession contracts between state-owned enterprises and private telecom operators are in accordance with the Law or not. There is a possibility that our concession contracts may be amended or cancelled before we are granted NTC licenses. If the concession contracts are cancelled, True Group (and its subsidiaries) may be at risk because it could not continue its business, which could affect True Group’s financial status. Also, in January 2007, the Cabinet endorsed the zero-rate excise tax and ended the 2003 resolution that imposed excise tax of 2 percent and 11 percent for fixed-line phone and mobile phone operators, respectively. The 2003 resolution allowed private telecom operators to deduct part of their concession fees to be paid as excise tax directly to the government, before sharing the remaining fee with their concession owners. The zero-rate excise tax will allow TOT and CAT to receive full concession fees, while the total regulatory fees of the private telecom firms have remained unchanged. True will continue to play an active role in discussions with the NTC and the ICT Ministry regarding the telecommunication industry’s regulatory environment and to advocate free-and-fair competition on a level playing field.

TOT and/or CAT may initiate legal proceedings against True Move after True Move signed the interconnection charge agreements and ceased paying access charges to TOT. This may result in an increase in our expenses and True Move subscribers may experience interrupted service when attempting to contact TOT subscribers. True Move operates its mobile phone business under a CAT concession contract and is signatory to an access charge agreement resulting in True Move paying Baht 200 per subscriber per month to TOT for post paid subscribers and paying 18 percent of its revenue to TOT for prepaid subscribers. In addition, we have to make a revenue sharing payment of 25 percent of net revenue after the access charge payment to CAT. In May 2006 the NTC announced its Interconnection Regulation which stipulated that telecommunications operators who have telecommunications networks are required to allow other operators to access their networks in compliance with the procedure specified in the Interconnection Regulation. The regulation sets a new interconnection system whereby interconnect charges will reflect actual network usage by each operator. Under this interconnection regulation, operators are also required to enter into agreements with one another to establish interconnection charge rates, which are based on cost. On November 17, 2006 True Move signed an interconnection contract with DTAC (Total Access Communications) with the contract taking immediate effect. On January 16, 2007 True Move signed an interconnection contract with AIS (Advanced Info Service) which indicated the start of interconnect charges on February 1, 2007, or April 1, 2007 at the latest, if there is any delay as a result of a technical issue. Following the entry into the interconnection charge agreement with DTAC, True Move ceased its payment of access charges under the access charge agreement with CAT and TOT as it believes that, following the introduction of the interconnection regime, it is no longer bound by or legally able to make payments under the access charge agreements. On November 17, 2006 True Move wrote to CAT and TOT informing them that it would cease paying access charges on the basis that the rate and collection of access charges under the agreement were contrary to the law. True Move also asked TOT to enter an interconnection charge agreement in compliance with the law, or to temporarily apply the provisional rate announced by the NTC while negotiations on an agreement with TOT proceeded. As a result of the cessation of access charge payments by True Move, on November 23, 2006 TOT issued a letter stating that True Move was not entitled to connect its network with TOT’s network because it was not a telecommunications licensee, as granted by the NTC, and did not have its own telecommunications network. TOT also disputed that the access charge agreement did not violate any law and that the rate and collection of access charges under the access charge agreement continued to apply. TOT and/or CAT could also initiate legal proceedings against True Move. If we are not successful in resolving this issue in our favor, in addition to a penalty equal to 100 percent of any access charges CAT may have paid to TOT on our account and interest thereon, we may be required to pay both new interconnection charges as well as existing access charges, which will result in a material increase in our costs. If True Move is required to pay access charges by court order for the period from November 18, 2006 to December 31, 2006, True Group would be liable to accrue additional access charges of Baht 455.6 million, or Baht 204.3 million, net of revenue sharing paid to CAT. (See Notes to the consolidated Statements No. 22) In addition, TOT has threatened not to integrate True Move’s 1.5 million new phone numbers, allocated by the NTC to its system, meaning that TOT subscribers would not be able to call True Move subscribers with those 1.5 million phone numbers. True Move filed a lawsuit with the Central Administrative Court requesting an injunction and on January 26, 2007 the Court ordered TOT to connect its network with True Move’s new numbers so that subscribers of TOT and True Move could communicate with each other. On January 30, 2007 TOT appealed the Court order to the upper court whose decision was still pending at the time of writing. However, TOT connected its network with True Move’s new numbers from March 2, 2007.

We compete with our concession grantors and this has led to and could continue to lead to disputes with them, which could affect our operations. True and its subsidiaries operate under the “Agreement for Joint Operation and Joint Investment for Expansion of Telephone Services” and/or licenses granted by TOT and CAT. A dispute with either TOT or CAT over compliance with a concession agreement could affect the ability of True and its subsidiaries to conduct business. Our fixed-line concession could be cancelled by TOT if True violates laws relating to public or national security, is placed under receivership by a court in a bankruptcy case, or 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 the revenue-sharing provisions of True’s fixed line concession, TOT collects all of True’s fixed-line revenues from subscribers within True’s network and retains a portion for 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). As well as being True’s concession grantors, TOT and CAT are also our competitors. This has and could continue to lead to disputes between True and TOT and between True and CAT. Previously TOT and True have brought some disputes to the Administrative Court and the Arbitration Tribunal for adjudication. We may not be able to successfully resolve any of these disputes in our favor, and if we were unsuccessful, our business and financial condition could be affected. Up to the time of writing, the courts have delivered judgments both in favor and against cases brought to the courts by True. (See Notes to the Consolidated and Company Financial Statements No. 38 related to “Litigation and Arbitration Disputes”.)

Risks relating to financial situation Our operations are at risk due to our high debt levels and are restricted by debt and other financial agreements. Exchange rate and interest rate movements may increase our interest payments and other financial obligations. True Group and its subsidiaries have high debt levels and may be at risk of failing to find funding each year to repay principal and interest. However, we would be able to negotiate with our creditors or raise new loans to repay existing loans and adjust our principal repayments to suit our cash flow. True’s operations are limited 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 some of the debt covenants are not in line with those indicated by the financial agreements or if TOT cancels the concession agreement with True. However, TOT must seek an arbitration decision in order to cancel the concession agreement. True is subject to exchange rate fluctuations, which could increase principal, interest payments and capital expenditure. As of December 31, 2006 approximately 40 percent of True Group’s consolidated liabilities were denominated in foreign currencies, most of which was denominated in US Dollars. In the year 2006, True had consolidated capital expenditure of approximately Baht 9.5 billion, 31 percent of which was in foreign currencies. True has put in place hedging tools to reduce its exposure to exchange rate fluctuations, for 87 percent of a USD 160 million loan belonging to True Move and 100 percent of a USD 200 million long-term loan for the TrueVisions (formerly UBC) acquisition as well as 100 percent of a True Move bond of USD 465 million issued in December 2006. In addition, True had also entered into interest rate swaps that hedged foreign exchange exposure on interest payments for the maturity of all US Dollar loans and reduced interest rate exposure. As a result, the US Dollar interest rates for these US Dollar loans were converted into Thai Baht fixed rates. However, there is no hedging in place for the Japanese Yen-denominated deferred payment note of Bt 3.4 billion, which matures from 2014 to 2017.

As at the end of December 2006, of True’s total consolidated debt (excluding finance leases), approximately 49 percent is subject to floating interest rates, excluding a portion that has been hedged to fix the interest rates. However, interest rates on part of True Move’s debt will reduce over time if it is able to achieve the conditions set out in its loan agreement. We may not be able to pay a dividend to shareholders. As at the end of 2006, True reported a net loss of Baht 4.2 billion with a retained loss of Baht 44.2 billion due largely to the Thai Baht currency devaluation in 1997. In accordance with Thailand’s Public Company Limited Act, True is able to pay dividends to its shareholders only from profits earned, after provision has been made for a legal reserve, and after cumulative losses have been depleted. Therefore, shareholders may not receive a dividend in the near future, as is stated in True’s dividend policy.

Risks relating to the TrueVisions (formerly UBC) acquisition We may not realize the anticipated benefits of the integration of TrueVisions (formerly United Broadcasting Corporation Public Company Limited or UBC), and we may share a number of risks associated with the TrueVisions business. We believe that we will accrue a number of benefits from the acquisition of TrueVisions which include, among others: improvement in our ability to drive subscriber and revenue growth through bundling and cross-selling of services; improvement in our ability to manage churn rates; and improved access to rich content assets. Achieving the anticipated benefits from the acquisition may depend on, among other things, commitment of time and focus by True management, the ongoing development of our existing operations, and market readiness for new products and services. We may not be able to realize the anticipated benefits from the acquisition and we may have to share a number of risks associated with the TrueVisions business including, among others, the following: • TrueVisions operates under a 25-year Build-Transfer-Operate concession granted by Mass Communication Organization of Thailand (MCOT). The pay-TV contract under the satellite system will expire in September 2014 and the cable-TV contract will expire in December 2019. If TrueVisions is not granted new licenses under the new regulations before the concession contracts expire TrueVisions may be at risk of not being able to continue its business which may affect the financial status of TrueVisions and True Group. • TrueVisions relies on third-party suppliers for most of its programming. If TrueVisions is unable to obtain attractive programming or if the cost of this programming substantially increases in the future, its revenues would be adversely affected. • Unauthorized access to TrueVisions’ programming signals is difficult to prevent and will adversely affect its results of operations, cash flow and programming arrangements. • TrueVisions’ core pay-television business is susceptible to new competitors and indirect competition that could reduce its market share and cause its operations and cash flow to suffer. • TrueVisions is subject to significant foreign exchange risk because a substantial portion of its revenues is denominated in Baht while a significant portion of its obligations is denominated in US Dollars.

Shareholders True Corporation Public Company Limited Major Shareholders (as of 23rd February 2007)

NAME 1. 2. 3. 4. 5. 6. 7. 8.

CP Group 2 THAI TRUST FUND 3 .. KREDITANSTALT FUR WIEDERAUFBAU (“KfW”) THAI NVDR COMPANY LIMITED STATE STREET BANK AND TRUST COMPANY MORGAN STANLEY & CO INTERNATIONAL LIMITED CHASE C.S. CENTRAL NOMINEES LIMITED STATE STREET BANK AND TRUST COMPANY FOR AUSTRALIA 9. SOMERS (U.K.) LIMITED 10. HSBC (SINGAPORE) NOMINEES PTE LTD 1 2

No.of Shares (Million Shares)

% of Total Issued Shares 1

1,368.64 357.99 341.36 287.82 161.69 155.27 137.83 114.39

30.40 7.95 7.58 6.39 3.59 3.45 3.06 2.54

86.46 84.67

1.92 1.88

Including common shares and preferred shares. Consisting of 1) Charoen Pokphand Group Co., Ltd. and its related persons, namely 2) Bangkok Telecom Holding Company Limited 3) Charoen Pokphand Foods Public Company Limited 4) Bangkok Produce Merchandising Public Company Limited 5) Bangkok Agro-Industrial Products Public Company Limited 6) Charoen Pokphand Northeastern Public Company Limited 7) Kasetphand Industry Company Limited 8) Charoen Pokphand Enterprise Company Limited 9) Unique Network Company Limited 10) Wide Broad Cast Company Limited 11) C.P. Interfood (Thailand) Company Limited 12) Star Marketing Company Limited 13) Advance Pharma Company Limited and 14) Golden Tower Trading Limited. Held shares for KfW

Dividend

Policy

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 a legal reserve. The Company’s restructuring agreement also limits its ability to pay dividends until all of its indebtedness is repaid in full. The Company’s major shareholders have entered into a shareholders’ agreement under which they have agreed for the Company 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. For the dividend policy of subsidiary companies, each subsidiary company’s Board of Directors will consider the payment of dividends from the balance of cash flows taking into account the capital expenditure requirements of the subsidiary company. Subject to the availability of cash flows at the subsidiary company and only if it has set aside a legal reserve, the Board of Directors of each subsidiary company shall consider the payment of dividends on a case-by-case basis.

Marketing

Home / Consumer Solution & Highspeed Access

Corporate Communication & Public Affairs

Audit Committee

Finance Committee

Finance & Accounting

Research & Development

Group Internal Audit

Corporate Planning & Quality Assurance

Group Investment

Marketing & Brand Committee

Human Resources

Legal

President / Chief Executive Officer

Operation

Customer Management

Corporate Solution, Wholesales & Data

Distribution & Sales

Office / SME Solution & Wireless Access

Group Management Committee

Independent Committee

Corporate Governance Committee

Compensation & Nominating Committee

Board of Directors

True Corporation Public Company Limited

Management

The Management Structure of the Company consists of: A. The Board of Directors B. The Committees of the Board of Directors: 1) Audit Committee 2) Independent Committee 3) Compensation and Nominating Committee 4) Finance Committee 5) Corporate Governance Committee C. The Executive Officers

A. Board of Directors Pursuant to the Company’s Articles of Association, it is stipulated that the Board of Directors shall consist of not less than 5 directors and that not less than one half of all directors shall have residence in the Kingdom. The qualifications of the Company’s directors shall be as prescribed by law. As of 31st December 2006, the Company’s Board of Directors consists of 18 members as follows: 1) 4 Executive Directors 2) 14 Non-Executive Directors consisting of: - 4 Independent Directors - 10 Directors from various organizations relevant to the Company’s business, including the lender group’s representatives and the major shareholders Definitions Executive Director means - A director who holds a management position and engages in the Company’s business management. Non-Executive Director means - A director who does not hold a management position and does not engage in the Company’s business management, whether or not he or she is an Independent Director. Independent Director means a director who holds the following qualifications: - Is not engaged in the business management of the Company, or of any affiliated, associated or related company or major shareholder of the Company, and is not an employee, staff member or consultant receiving a salary from the Company, any affiliated, associated or related company or major shareholder of the Company. An Independent Director also has no power of control over the Company, any affiliated or associated company, or any person with a conflict of interest with the Company. - Holds less than 5 percent of the Company’s total shares with voting rights, and holds less than 5 percent of the total shares of any company affiliated, associated with or related to any person who may have a conflict of interest with the Company as prescribed by Article 258 under the Securities Act B.E. 2535. - Is not connected or related to executives or major shareholders of the Company, or to any companies affiliated or associated with any person who has a conflict of interest with the Company. - Does not represent or protect the interests of the Board of Directors, major shareholders, or shareholders who are related to the major shareholders of the Company. - Is able to perform and provide comments on, or report on, the performance of the Board of Directors in an independent manner. Is not under the control of management or major shareholders including related persons or close relatives of the said person.

The Board of Directors of the Company (as of 31st December 2006) is as follows:

Name

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

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

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

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 Director Director Director Director Director

All Director qualifications have been prescribed by law. None are prohibited persons under the laws and regulations of the Securities and Exchange Commission and the Stock Exchange of Thailand. Authorized Directors Mr. Supachai Chearavanont or Mr. Vichaow Rakphongphairoj jointly sign with Mr. Athueck Asvanund or Mr. Soopakij Chearavanont or Mr. Chatchaval Jiaravanon, with the Company’s seal affixed. Authority and Responsibilities of the Board of Directors The Board of Directors is granted the authority and duty to manage the Company in compliance with the Company’s objectives and Articles of Association, and the resolutions of shareholder meetings. With regard to the management of the Company, the Board of Directors has the authority to make any decision related to the Company’s regular operations except for matters that require the approval of the shareholder meeting as specified by law. In addition, the Board of Directors may grant authorization to one or more directors, or any other person, to perform any acts on its behalf. However, for any decision on major operations such as a major investment or a major loan procurement, the management team shall propose the said transactions to the Board of Directors for approval.

In the year 2006, the Board of Directors held 7 meetings. Director attendance at those meetings was as follows:

Directors 1. Mr. Narong 2. Mr. Vitthya 3. Dr. Kosol 4. Mr. Joti 5. Mr. Dhanin 6. Mr. Sumet 7. Dr. Ajva 8. Mr. Chaleo 9. Mr. Athueck 10. Mr. Supachai 11. Mr. Soopakij 12. Mr. Chatchaval 13. Mr. Vichaow 14. Mr. Umroong 15. Mr. Heinrich 16. Mr. Andreas 17. Mr. Harald 18. Dr. Lee G. Remark:

Attendance / Number of Meetings* (times)

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

4/7 5/7 7/7 6/7 3/7 1/7 7/7 7/7 7/7 7/7 1/7 4/7 7/7 7/7 3/7 7/7 5/7 6/7

* “Attendance / Number of Meetings” shows how many meetings in 2006 each director has attended compared to the total number of meetings held since each director was appointed.

All directors are committed to their responsibilities as Directors. They cooperate on all director decisions affecting the Company, which entails major work and responsibilities. All directors attend all meetings except in unavoidable circumstances. Directors otherwise engaged in this way notify the Board of their absence in advance while providing their comments on the major agenda items. In addition, the Board of Directors supports seminars organized by the Thai Institute of Directors Association (“IOD”). Some of the directors are also Independent Directors who have real independence and are not authorized signatories for the Company. All directors are properly qualified and comply with the principles stipulated by the Securities and Exchange Commission, and the Stock Exchange of Thailand. Election of Directors The Company allows minority shareholders to submit nominations for directors before the 2007 AGM by using the form provided by the Company and sending it by registered mail to the Company. The Compensation and Nominating Committee is responsible for appraising the qualifications of persons proposed as directors (including Independent Directors) of the Company in light of the significant prestige and experience required to fill the role. The Committee’s deliberations are presented to the Board of

Directors for initial consideration. The Board of Directors then presents the relevant information, together with the Compensation and Nominating Committee’s opinion, to the Shareholders’ Meeting ahead of any election. Directors are appointed by shareholders by majority vote. All shareholders have the rights to appoint directors. Each shareholder is entitled to one vote for each share held and is entitled to participate in the voting for all directors, provided that they do not split their votes among candidates.

B. Committees of the Board of Directors 1) Audit Committee The Audit Committee of the Company consists of 3 persons as follows: 1. Mr. Vitthya Vejjajiva Chairman of the Audit Committee 2. Dr. Kosol Petchsuwan Member of the Audit Committee 3. Mr. Joti Bhokavanij Member of the Audit Committee The scope of duty and responsibility of the Audit Committee is as follows: 1. To review the Company’s financial reports to ensure accuracy and adequate information for public disclosure; 2. To ensure the appropriateness and effectiveness of internal control systems and the 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 practices of the Company to ensure 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 there is a connected transaction that may lead to a conflict of interest; 6. To prepare a report on monitoring activities of the Audit Committee 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. In the year 2006, the Audit Committee held 6 meetings. The members of the committee in attendance at those meetings were follows: Name

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

Attendance / Number of Meetings* (times)

Vejjajiva Petchsuwan Bhokavanij

6/6 6/6 6/6

* “Attendance / Number of Meetings” shows how many meetings in 2006 each director has attended compared to the total number of meetings held since each director was appointed.

2) Independent Committee The Independent Committee is responsible for reviewing the entering into highly significant connected transactions. The Committee consists of the following members: 1. Mr. Narong Srisa-an Independent Director 2. Mr. Joti Bhokavanij Independent Director and Member of the Audit Committee 3. Mr. Andreas Klocke KfW-nominated Director 4. Mr. Supachai Chearavanont CP-nominated Director 5. Mr. Athueck Asvanund 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 when considering such a case. 3) Compensation and Nominating Committee The Compensation and Nominating Committee is responsible for making recommendation to the Board of Directors regarding the compensation of directors and the CEO; and the nomination of directors of the Company. The Committee consists of the following members: 1. Mr. Dhanin Chearavanont 2. Mr. Heinrich Heims 3. Mr. Soopakij Chearavanont 4. Mr. Umroong Sanphasitvong In 2006, the Compensation and Nominating Committee held one meeting. The members of the committee in attendance at that meetings were as follows: Name 1. 2. 3. 4. Remark:

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

Attendance / Number of Meetings* (times)

Chearavanont Heims Chearavanont Sanphasitvong

0/1 1/1 1/1 1/1

* â&#x20AC;&#x153;Attendance / Number of Meetingsâ&#x20AC;? shows how many meetings in 2006 each director has attended compared to the total number of meetings held since each director was appointed.

4) Finance Committee The Finance Committee assists the Board of Directors in reviewing the financial management of the Company. The Committee consists of the following members: 1. 2. 3. 4.

Dr. Ajva Mr. Chaleo Mr. Heinrich Mr. Umroong

Taulananda Souvannakitti Heims Sanphasitvong

(alternate being Mr. Andreas Klocke)

In 2006, the Finance Committee held 6 meetings. The members of the committee in attendance at those meetings were as follows:

Name 1. 2. 3. 4.

Dr. Ajva Mr. Chaleo Mr. Andreas Mr. Umroong

Remark:

Attendance / Number of Meetings* (times)

Taulananda Souvannakitti Klocke Sanphasitvong

5/6 6/6 4/6 4/6

* “Attendance / Number of Meetings” shows how many meetings in 2006 each director has attended compared to the total number of meetings held since each director was appointed.

5) Corporate Governance Committee The Corporate Governance Committee assists the Board of Directors in setting policy on the Corporate Governance of the Company. The Committee consists of the following members: 1. Mr. Narong Srisa-an 2. Mr. Vitthya Vejjajiva 3. Dr. Kosol Petchsuwan 4. Mr. Joti Bhokavanij 5. Mr. Andreas Klocke 6. Dr. Ajva Taulananda In 2006, the Corporate Governance Committee held two meetings. The members of the committee in attendance at those meetings were as follows:

Name 1. 2. 3. 4. 5. 6.

Mr. Narong Mr. Vitthya Dr. Kosol Mr. Joti Mr. Andreas Dr. Ajva

Remark:

Attendance / Number of Meetings* (times)

Srisa-an Vejjajiva Petchsuwan Bhokavanij Klocke Taulananda **

2/2 1/2 2/2 2/2 1/2 0/2**

* “Attendance / Number of Meetings” shows how many meetings in 2006 each director has attended compared to the total number of meetings held since each director was appointed. ** Dr. Ajva Taulananda was appointed as a member of the Corporate Governance Committee on 17th November 2006, after the last Corporate Governance Committee meeting of the year.

C. Executive Officers As of 31st December 2006, the executive officers of the Company are as follows: 1. Mr. Supachai Chearavanont Director, President and Chief Executive Officer 2. Mr. Vichaow Rakphongphairoj Director, Managing Director and Chief Operating Officer 3. Mr. Chatchaval Jiaravanon Director and Managing Director-Group investment 4. Mr. Athueck Asvanund Vice Chairman, Group General Counsel and Acting Company Secretary 5. Mr. William Harris Chief Financial Officer 6. Mr. Thiti Nantapatsiri Managing Director-Home / Consumer Solution & Highspeed Access 7. Mr. Adhiruth Thothaveesansuk Managing Director-Office / SME Solution & Wireless Access 8. Mr. Songtham Phianpattanawit Managing Director-Corporate Solution, Wholesales & Data Note: The term “Executive Officers” refers to Directors, the President and persons with managerial authority who are among the top four ranked individuals in the Company, after the President, and all other persons who occupy a position equivalent to a top four ranking. All the Executive Officers’ qualifications have been prescribed by law and the Officers themselves are not forbidden individuals under the laws and pronouncements of the Securities and Exchange Commission and the Stock Exchange of Thailand. Authority and Responsibility of the President The President has authority to supervise and carry on the Company’s day-to-day business, and if any matter/transaction is important, the President will submit said matter/transaction to the independent directors and/or the relevant 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 or transaction proposed by the Company or its subsidiaries in which he or she may have a conflict of interest or any other form of conflict. In such a case, the matter/transaction has to be approved by the independent directors and/or the relevant Committee and/or the Board of Directors. Remuneration of the Company’s Directors and Executive Officers (1) Remuneration (1.1) Remuneration of Directors The 18 directors of the Company were remunerated Baht 32.4 million for the year 2006. Remuneration per person (Baht/year) Group 1 - Chairman (Mr. Dhanin Chearavanont) - Independent Director who is also the Chairman of a Committee (Mr. Vitthya Vejjajiva) Total

Total (Baht/year)

3,600,000 3,600,000 7,200,000

Remuneration per person (Baht/year) Group 2 - Independent Directors who are also Committee members (Mr. Narong Srisa-an, Dr. Kosol Petchsuwan and Mr. Joti Bhokavanij) Total Group 3 - Vice Chairmen (Mr. Sumet Jiaravanon, Dr. Ajva Taulananda, Mr. Chaleo Souvannakitti and Mr. Athueck Asvanund) Total Group 4 - Directors (Mr. Supachai Chearavanont, Mr. Soopakij Chearavanont, Mr. Chatchaval Jiaravanon, Mr. Vichaow Rakphongphairoj, Mr. Umroong Sanphasitvong, Mr. Heinrich Heims, Mr. Andreas Klocke, Mr. Harald Link and Dr. Lee G. Lam) Total Grand Total

Total (Baht/year)

2,400,000

7,200,000

1,800,000

7,200,000

1,200,000

10,800,000 32,400,000

(1.2) Remuneration of Executive Officers The top eight executives received remuneration totaling Baht 109.12 million for the year 2006 (January to December), which included Baht 85.20 million for salary, Baht 19.48 million for performance pay and Baht 4.44 million for provident fund. (2) Other Compensation Other compensation received by directors and executive officers of the Company are under the Employee Stock Option Plan 5 Project, namely: (2.1) Employee Stock Option Plan 2005 (2.2) Employee Stock Option Plan 2004 (2.3) Employee Stock Option Plan 2003 (2.4) Employee Stock Option Plan 2002 (2.5) Employee Stock Option Plan 2000 In addition, the Annual General Meeting of Shareholders for the year 2006 approved a project named ESOP 2006 and later on the Securities and Exchange Commission (“SEC”) granted the approval to issue and offer warrants under this project. The Company issued and offered the warrants on 31st January 2007. Details of Employee Stock Option Plans (2.1) Employee Stock Option Plan 2005 The Extraordinary General Meeting of Shareholders No. 1/2548 held on 15th July 2005, approved the issuance and offering of non-transferable warrants to purchase the Company’s ordinary shares to the directors and employees at executive level of the Company and/or its subsidiaries (“ESOP 2005 Project”). Summary details are as follows:

Number of Warrants Issued and Outstanding Date of Issuance Maturity Date of Expiry Exercise Period

18,774,429 units

: : : :

Exercise Ratio

28th April 2006 5 years from the issuance date 27th April 2011 Each Warrant Holder received 3 separate warrant certificates. Each certificate represented 1/3 of the total amount of warrants allotted and is exercisable for subscribing for ordinary shares as follows: The 1st Certificate: Warrant Holders can start exercising from 13th May 2006 until expiration. nd The 2 Certificate: Warrant Holders can start exercising from 13th May 2007 until expiration. rd Warrant Holders can start exercising from The 3 Certificate: 13th May 2008 until expiration. One unit of warrant entitles the holder to the purchase of one ordinary share at Baht 9.73

(2.2) Employee Stock Option Plan 2004 The Extraordinary General Meeting of Shareholders No. 2/2547 held on 10th June 2004, approved the issuance and the offer of non-transferable warrants to purchase the Company’s ordinary shares to certain directors and employees at executive level not exceeding 35 persons (ESOP 2004 Project). Summary details are as follows: Number of Warrants Issued and Outstanding Date of Issuance Maturity Date of Expiry Exercise Period

18,274,444 units

: : : :

Exercise Ratio

7th February 2005 5 years from the issuance date 6th February 2010 Each Warrant Holder received 3 separate warrant certificates. Each certificate represented 1/3 of the total amount of warrants allotted and is exercisable for subscribing for ordinary shares as follows: Warrant Holders can start exercising from The 1st Certificate: 7th February 2006 until expiration. The 2nd Certificate: Warrant Holders can start exercising from 7th February 2007 until expiration. The 3rd Certificate: Warrant Holders can start exercising from 7th February 2008 until expiration. One unit of warrant entitles the holder to the purchase of one ordinary share at Baht 11.20

(2.3) Employee Stock Option Plan 2003 The Annual General Meeting of Shareholders for the year 2003, held on 11th April 2003, approved the issuance and the offer of non-transferable warrants to purchase the Company’s ordinary shares to certain directors and employees at executive level not exceeding 35 persons (“ESOP 2003 Project”). Summary details are as follows:

Number of Warrants Issued and Outstanding Date of Issuance Maturity Date of Expiry Exercise Period

: : : : :

Exercise Ratio

12,832,207 units (as of 31st December 2006) 17th June 2003 5 years from the issuance date 16th June 2008 Each Warrant Holder received 3 separate warrant certificates. Each certificate represented 1/3 of the total amount of warrants allotted and shall be exercisable for subscribing for ordinary shares as follows: Warrant Holders can start exercising from The 1st Certificate: 17th June 2004 until expiration. nd The 2 Certificate: Warrant Holders can start exercising from 17th June 2005 until expiration. rd The 3 Certificate: Warrant Holders can start exercising from 17th June 2006 until expiration. One unit of warrant entitles the holder to the purchase of one ordinary share at Baht 5.20

(2.4) Employee Stock Option Plan 2002 The Annual General Meeting of Shareholders for the year 2002 held on 12th April 2002 approved the issuance and the offer of non-transferable warrants to purchase the Company’s ordinary shares to certain directors and employees at executive level not exceeding 35 persons (“ESOP 2002 Project”). Summary details are as follows: Number of Warrants Issued and Outstanding Date of Issuance Maturity: Date of Expiry Exercise Period:

37,131,597 units

: : : :

Exercise Ratio:

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

(2.5) Employee Stock Option Plan 2000 The Annual General Meeting of Shareholders for the year 2000 held on 27th April 2000, approved the issuance and offer of non-transferable warrants to purchase the Company’s ordinary shares to certain directors and employees at executive level totaling not exceeding 35 persons (“ESOP 2000 Project”). Summary details are as follows: Number of Warrants Issued and Outstanding Date of Issuance

36,995,000 units

9th June 2000

Maturity Date of Expiry Exercise Period

: : :

Exercise Ratio

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

Details of warrants allotted to directors and executive officers under ESOP Plans : Warrants under ESOP 2005 Name

1. Dr.Ajva

Taulananda

Warrants under ESOP 2004

Warrants under ESOP 2003

Warrants under ESOP 2002

Warrants under ESOP 2000

No. of % of No. of % of No. of % of No. of % of No. of % of warrants project warrants project warrants project warrants project warrants project -

2,240,000

6.06

2. Mr.Soopakij Chearavanont

4,130,000

11.16

3. Mr.Supachai Chearavanont

1,900,000

10.12

2,434,077

12.74

3,696,402

18.61

7,058,824

19.01

6,510,000

17.60

4. Mr. Vichaow Rakphongphairoj 1,000,000

5.33

1,277,890

6.69

1,617,176

8.14

3,088,235

8.32

2,800,000

7.57

5. Mr.Chatchaval Jiaravanon

350,000

1.86

1,277,890

6.69

1,940,611

9.77

3,705,882

9.98

4,130,000

11.16

6. Mr.Athueck Asvanund

1,200,000

6.39

1,331,136

6.97

2,021,470

10.18

3,860,294

10.40

5,320,000

14.38

7. Mr.William

Harris

1,000,000

5.33

1,277,890

6.69

1,297,838

6.53

3,000,000

8.08

945,000

2.55

8. Mr.Adhiruth

Thothaveesansuk 1,000,000

5.33

1,277,890

6.69

850,404

4.28

1,503,662

4.05

9. Mr.Thiti

Nantapatsiri

1,000,000

5.33

1,277,890

6.69

10.Mr.Songtham Phianpattanawit 1,000,000

5.33

1,277,890

6.69

Insider Trading Policy The Board of Directors is aware of the importance of protecting the Company from personal insider trading. The Company has a code of conduct regarding inside information and insider trading, as well as the use of applicable laws to monitor and prevent the personal use of confidential Company information by management and related persons. In addition, the Company has a policy of strict compliance to its requirement that directors and senior management who have gained inside information on the Company by virtue of their positions do not use that information in any way that violates their responsibilities to the Company and its shareholders. Material information which has not yet been disclosed is kept confidential, apart from disclosure to the relevant director and senior management of the Company. Directors and senior management must report purchases, sales, transfers and assignations of the securities issued by the Company to the Securities and Exchange Commission (“SEC”) within three days and provide a copy of this report to the Company for its records and incorporation in its regular report to the Board of Directors. In this regard, directors and senior management are required to submit an accurate report on the securities holder within the required period. This will be deemed one of the material obligations which senior management of the

Company need to be aware of and need to meet. This gives confidence to directors and senior management that the business is being managed and developed in a manner which is trustworthy, clear and transparent, and which is consistent with measurements related to Good Corporate Governance Policy. It also provides shareholders, including general investors, with confidence in the Company’s senior management. Internal Controls After an assessment of the Company’s internal controls with the Audit Committee, the Board of Directors is of the opinion that the Company’s internal controls are adequate and suitable. Moreover, the external auditor is of the opinion that they have not encountered any matter involving internal controls and operation of the Company which could be considered material weaknesses that could have a material effect on the financial statements. The Board also emphasized how the ongoing development of the Company’s Corporate Governance will continue to improve the Company’s internal controls. Personnel As of 31st December 2006, the total number of employees was as follows:

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

No. of Employees 85 2,055 1,109 256 408 224 297 4,434

Source : The Company Remuneration for the Company’s Employees Remuneration Monthly Salary Annual Performance Pay: between zero and 4 times the monthly salary, subject to the Company’s performance and financial status Retirement: the employee must be aged 60 years or can take early retirement with agreement between the Company and the employee. Severance pay will be paid accord to the labor law. In 2006, the total remuneration for employees was approximately Baht 2,600.30 million consisting of wages, salaries, social security costs, provident fund and other benefits (For details please see note 31 to the financial statements) Other Compensation & Benefits - Health Plans and Employee Welfare In-house clinic Annual Medical Check-up New Employees’ Medical Check-up Group Health Insurance

Group Accident Insurance Group Life Insurance Social Security Fund Provident Fund - Annual Leave The employee shall be entitled to paid annual leave of 10, 12 or 15 working days per calendar year dependent on the seniority of their position or their number of years of service as follows: Assistant Director or equivalent level and upwards: 15 working days Below Assistant Director or equivalent level: - Past probation to less than 3 years 10 working days - 3 years upwards to less than 5 years 12 working days - 5 years upwards 15 working days The employee is required to take all annual leave entitlements by 31st December of each year other wise the unused annual leave can not be accumulated to the subsequent year. In case of urgent work requirements which mean the employee can not get approval for annual leave, unused annual leave can be accumulated and carried over to the subsequent year, limited to half of the entitlement, and not exceeding 5, 6 or 7 working days as appropri ate. This matter is to be approved by an authorized superior and the employee is required to take the accumulated days within the first quarter of the subsequent year. Employee Training and Development Employee Training and Development Policy In order to help carry out its corporate strategy and achieve its goals, the Company encourages all employees to develop their knowledge, skills and attitude to be able to perform their jobs more effectively and improve their competencies with a view to career advancement. Presently, the Company provides employees with an ongoing series of training and development programs. The Core Competency program includes courses such as Effective Communication, Planning to Increase Work Efficiency and Effective Self Development, etc. The Functional Competency Program includes courses such as Accounting Standards, Project Management, Contract Management and Sales Planning and Management, etc. The Core Business Program includes courses such as Datacommunication and Networking, True Products and Services, Cisco - Certified Network Associate (CCNA), Microsoft Server, etc.

DIRECTORâ&#x20AC;&#x2122;S INFORMATION (AS OF 31ST DECEMBER 2006) Name Position Age True Share Ownership (31/12/06) Family Relationship Education

: : : : : :

Related training programs held by the Thai Institute of Directors Association (IOD) Major Experience

Mr. Narong Srisa-an Independent Director 79 10,000 shares Honorary Master Degree of Economics, Thammasat University Director Accreditation Program (DAP)

Companies Listed on the Stock Exchange of Thailand 1998-Present Independent Director, True Corporation Public Company Limited Present Vice Chairman, Vice Executive Chairman and Member of Remuneration Committee, Berli Jucker Public Company Limited Chairman, Advance Agro Public Company Limited Chairman and Chairman of Executive Board, Siam Food Products Public Company Limited Chairman and Chairman of Executive Board, Oishi Group Public Company Limited Non-listed Companies Present Vice Chairman and Vice Executive Chairman, Thai Beverage Public Company Limited Vice Chairman and Executive Chairman, Beer Thai (1991) Public Company Limited Chairman, Thai Alcohol Public Company Limited Chairman, Sura Banyeekhan Company Limited Chairman of Executive Board, Thai Beverage Can Limited Chairman, BJC Cellox Limited Chairman, Thai Glass Industries Public Company Limited Chairman, Thanakorn Vegetable Oil Products Company Limited Chairman, Prida Pramote Company Limited Chairman, Eastern Seaboard Industrial Estate (Rayong) Company Limited Executive Director, Com-link Company Limited

Name

Mr. Vitthya Vejjajiva

Position

Independent Director and Chairman of the Audit Committee

Age

True Share Ownership (31/12/06)

Family Relationship

Education

Related training programs held

Director Accreditation Program (DAP)

by the Thai Institute of Directors

Audit Committee Program (ACP)

Association (IOD)

Chairman 2000

Major Experience

Companies Listed on the Stock Exchange of Thailand 1998-Present

Independent Director and Chairman of the Audit Committee, True Corporation Public Company Limited

Non-listed Companies 1998-Present

Chairman, K Line (Thailand) Company Limited and its subsidiaries

1991-1992

Permanent Secretary of the Ministry of Foreign Affairs

1988

Ambassador Extraordinary and Plenipotentiary of the United States of America

1984

Ambassador Extraordinary and Plenipotentiary of Belgium and the European Community

1981

Ambassador Extraordinary and Plenipotentiary of Canada

1979

Director, General of Department of Economic Affairs

Name Position Age True Share Ownership (31/12/06) Family Relationship Education

: : : : : :

Related training programs held by the Thai Institute of Directors Association (IOD)

Major Experience

Name Position Age True Share Ownership (31/12/06) Family Relationship Education

: : : : : :

Related training programs held by the Thai Institute of Directors Association (IOD) Major Experience

Dr. Kosol Petchsuwan Independent Director and Member of the Audit Committee 67 Doctorate of Engineering, University of London, England Bachelor of Engineering, University of London, England Director Accreditation Program (DAP) Director Certification Program (DCP) Audit Committee Program (ACP) Chairman 2000 Companies Listed on the Stock Exchange of Thailand 1999-Present Independent Director and Member of the Audit Committee, True Corporation Public Company Limited 2004-Present Independent Director and Chairman of the Audit Committee, ACL Bank Public Company Limited Non-listed Companies 2001-Present Director, Mahidol Wittayanusorn School (Public Organization) 2001-2005 President, The Telecommunications Association of Thailand under Royal Patronage 2000-2001 Chairman, The Aeronautical Radio of Thailand Limited 1986-1992 Rector, King Mongkutâ&#x20AC;&#x2122;s Institute of Technology Ladkrabang Mr. Joti Bhokavanij Independent Director and Member of the Audit Committee 64 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. Director Accreditation Program (DAP) Chairman 2000 Companies Listed on the Stock Exchange of Thailand 1999-Present Independent Director and Member of the Audit Committee True Corporation Public Company Limited 2004-2006 Chief Executive Officer ACL Bank Public Company Limited 2000-2001 Executive Chairman, TISCO Finance Public Company Limited 1994-1997 President & CEO, Thai Wah Group of Companies 1992-1994 Managing Director and Consul-General of Denmark for Bangkok The East Asiatic (Thailand) Public Company Limited Non-listed Companies 2002-Present Director, True Move Company Limited

Name Position Age True Share Ownership (31/12/06) Family Relationship Education

: : : : : :

Mr. Dhanin Chearavanont Chairman 67 Mr. Supachai’s and Mr. Soopakij’s father Commercial School, Hong Kong Shantou Secondary School, The People’s Republic of China The National Defence College of Thailand Director Accreditation Program (DAP)

Related training programs held by the Thai Institute of Directors Association (IOD) Major Experience

Companies Listed on the Stock Exchange of Thailand Present Chairman, True Corporation Public Company Limited Chairman, Charoen Pokphand Foods Public Company Limited Chairman, C.P. Seven Eleven Public Company Limited Honorary Chairman, Siam Makro Public Company Limited Non-listed Companies Present Chairman, Subsidiaries of True Corporation Public Company Limited Chairman, True Move Company Limited Chairman and Chief Executive Officer, Charoen Pokphand Group Company Limited and its subsidiaries Chairman, Subsidiaries of Charoen Pokphand Foods Public Company Limited Chairman, Subsidiaries of C.P. Seven Eleven Public Company Limited

Name Position Age True Share Ownership (31/12/06) Family Relationship Education Related training programs held by the Thai Institute of Directors Association (IOD) Major Experience

: : : : : : :

Mr. Sumet Jiaravanon Vice Chairman 72 150,000 shares Mr. Chatchaval’s father Secondary School, Sarasitphitayalai, Ratchaburi -

Companies Listed on the Stock Exchange of Thailand 1993-Present Vice Chairman, True Corporation Public Company Limited Non-listed Companies 1993-Present Executive Chairman, Charoen Pokphand Group Company Limited Present Director, Subsidiaries of True Corporation Public Company Limited

Name Position Age True Share Ownership (31/12/06) Family Relationship Education

: : : : : :

Related training programs held by the Thai Institute of Directors Association (IOD) Major Experience

Name Position Age True Share Ownership (31/12/06) Family Relationship Education

: : : : : :

Related training programs held by the Thai Institute of Directors Association (IOD) Major Experience

Dr. Ajva Taulananda Vice Chairman 69 Honorary Doctorate of Engineering, Ramkhamhaeng University Honorary Doctorate of Engineering, Chulalongkorn University Doctorate of Industrial Engineering and System, Illinois Institute of Technology, U.S.A. Master Degree of Industrial Engineering, Iowa State of University, U.S.A. Bachelor of Industrial Engineering, Chulalongkorn University Special Certificate: Public - Private joint defence curricum, Class 1, The National Defence College of Thailand Director Accreditation Program (DAP) Chairman 2000 Director Certification Program (DCP) Companies Listed on the Stock Exchange of Thailand 1992-Present Vice Chairman, True Corporation Public Company Limited 1993-1999 Director and President, True Corporation Public Company Limited Non-listed Companies 1992-Present Vice Chairman, Charoen Pokphand Group Company Limited Honorary Chairman, The Thai Chamber of Commerce and Board of Trade of Thailand 1991-1992 Deputy Minister, Ministry of Agriculture and Cooperatives Present Director, Subsidiaries of True Corporation Public Company Limited Mr. Chaleo Souvannakitti Vice Chairman 78 3,350,000 shares Master Degree of Business Administration, Indiana University, U.S.A. Bachelor of Accounting, Faculty of Commerce and Accountancy, Chulalongkorn University -

Companies Listed on the Stock Exchange of Thailand 1992-Present Vice Chairman, True Corporation Public Company Limited Non-listed Companies 1992-Present Director, Telecom Holding Company Limited Present Director, Subsidiaries of True Corporation Public Company Limited

Name Position Age True Share Ownership (31/12/06) Family Relationship Education

: : : : : :

Training Related training programs held by the Thai Institute of Directors Association (IOD) Major Experience

: :

* Authorized Signatory

Mr. Athueck Asvanund* Vice Chairman and Group General Counsel 55 1,300,046 shares Master Degree of Laws, specialized in International Legal Studies, New York University, U.S.A. Bachelor of Laws (Honours), Thammasat University Capital Market Academy Leader Program Director Accreditation Program (DAP)

Companies Listed on the Stock Exchange of Thailand 1997-Present Vice Chairman and Group General Counsel, True Corporation Public Company Limited Advisor to the Board of Directors, C.P. Seven Eleven Public Company Limited Non-listed Companies 1997-Present Vice Chairman and Group General Counsel, Subsidiaries of True Corporation Public Company Limited Group General Counsel, Charoen Pokphand Group Company Limited and its subsidiaries Director, True Visions Public Company Limited and its subsidiaries 2002-Present Director, True Move Company Limited Present Director, Aqua-Agri Foods International, Inc. 2001-2006 Associate Judge, Central Intellectual Property and International Trade Court 1978-1997 Baker & McKenzie Present Part-time Lecturer, Business Law, Faculty of Law, Chulalongkorn University

Name Position Age True Share Ownership (31/12/06) Family Relationship

: : : : :

Education

Related training programs held by the Thai Institute of Directors Association (IOD) Major Experience

Companies Listed on the Stock Exchange of Thailand 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 Non-listed Companies 2006-Present Director and CEO, True Visions Public Company Limited 2004-Present Director, CPPC Public Company Limited 2001-Present Director and CEO, True Move Company Limited Chairman of the Board, Pantavanij Company Limited Present Director, Subsidiaries of True Corporation Public Company Limited

Name Position Age True Share Ownership (31/12/06) Family Relationship

: : : : :

Education Related training programs held by the Thai Institute of Directors Association (IOD) Major Experience

: :

Mr. Soopakij Chearavanont* Director 43 Mr. Dhanin’s son Mr. Supachai’s elder brother Bachelor of Business Administration, New York University, U.S.A. -

Mr. Supachai Chearavanont* Director, President and Chief Executive Officer 39 1,240,000 shares Mr. Dhanin’s son Mr. Supakij’s younger brother Bachelor of Business Administration in Financial Management Boston University, U.S.A. -

Companies Listed on the Stock Exchange of Thailand Present Director, True Corporation Public Company Limited Director, C.P. Seven Eleven Public Company Limited Non-listed Companies Present Co-Chairman, Shanghai Kinghill Limited - Super Brand Mall Chairman, Chia Tai Enterprises International Limited Chairman, True Visions Public Company Limited Executive Chairman, Telecom Holding Company Limited Chief Executive Officer, Real Estate & Land Development Business (China), Charoen Pokphand Group Company Limited Vice Chairman, Automotive industrial Products and Finance Business, Charoen Pokphand Group Company Limited Vice Chairman, Real Estate and Land Development Business (Thailand) Charoen Pokphand Group Company Limited Vice Chairman, Marketing and Distribution Business (China), Charoen Pokphand Group Company Limited Director, True Move Company Limited Director, Subsidiaries of True Corporation Public Company Limited

* Authorized Signatory

Name

Mr. Chatchaval Jiaravanon*

Position

Director and Managing Director - Group Investment

Age

True Share Ownership (31/12/06)

1,293,740 shares

Family Relationship

Mr. Sumetâ&#x20AC;&#x2122;s son

Education

Bachelor of Science Business Administration University of Southern California, U.S.A.

Related training programs held

Director Accreditation Program (DAP)

Companies Listed on the Stock Exchange of Thailand

by the Thai Institute of Directors Association (IOD) Major Experience

1993-Present

Director and Managing Director - Group Investment, True Corporation Public Company Limited

2001-Present

Director and Member of the Audit Committee, Ticon Industrial Connection Public Company Limited

Non-listed Companies 2000-Present

President and C.E.O., Telecom Holding Company Limited

1997-Present

C.E.O., True Multimedia Company Limited, True Internet Company Limited and Asia Infonet Company Limited

* Authorized Signatory

2006-Present

Chairman, Thai Kodama Company Limited

1992-2005

Director, Thai Kodama Company Limited

1990-Present

Director, Metro Machinery Company Limited

Present

Director, Subsidiaries of True Corporation Public Company Limited

Name Position Age True Share Ownership (31/12/06) Family Relationship Education

: : : : : :

Related training programs held by the Thai Institute of Directors Association (IOD) Major Experience

Companies Listed on the Stock Exchange of Thailand 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 Non-listed Companies Present Director, Subsidiaries of True Corporation Public Company Limited

Name Position Age True Share Ownership (31/12/06) Family Relationship Education

: : : : : :

Related training programs held by the Thai Institute of Directors Association (IOD) Major Experience

Mr. Umroong Sanphasitvong Director 54 384,000 shares Master Degree of Accounting, Thammasat University Bachelor of Accounting, Thammasat University Director Certification Program (DCP)

Mr. Vichaow Rakphongphairoj* Director, Managing Director and Chief Operating Officer 49 7,000 shares Master Degree of Business Administration, Pepperdine University, U.S.A. Master Degree of Electrical Engineering, University of Wisconsin, U.S.A. Bachelor of Electrical Engineering, Arizona State University, U.S.A. Director Certification Program (DCP)

Companies Listed on the Stock Exchange of Thailand 2001-Present Director, True Corporation Public Company Limited Present Director, C.P. Seven Eleven Public Company Limited Non-listed Companies Present Deputy Group CFO, Charoen Pokphand Group Company Limited Director, Ayudhya Allianz C.P. Life Public Company Limited Director, CPPC Public Company Limited

* Authorized Signatory

Name Position Age True Share Ownership (31/12/06) Family Relationship Education

: : : : : :

Related training programs held by the Thai Institute of Directors Association (IOD) Major Experience

Companies Listed on the Stock Exchange of Thailand 2000-Present Director, True Corporation Public Company Limited Non-listed Companies 2002- Present Director, True Move Company Limited 2004-Present COO and 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

Name Position Age True Share Ownership (31/12/06) Family Relationship Education

: : : : : :

Related training programs held by the Thai Institute of Directors Association (IOD) Major Experience

Mr. Andreas Klocke Director 50 3,500 shares M.A. International Relations, University of KANSAS, U.S.A. DIPLOMA VOLKSWIRT, University of Hamburg, Germany -

Mr. Heinrich Heims Director 54 Abitur at Schiller Gymnasium, Hameln. Studies at the Freie University Berlin : Educational Sciences. Studies at the Freie University Berlin, with State Examination (Graduate in Economics) -

Companies Listed on the Stock Exchange of Thailand 2000-Present Director, True Corporation Public Company Limited Non-listed Companies Present Head of KfWâ&#x20AC;&#x2122;s South-East Asia Regional office in Bangkok in Charge of KfW Affairs in Thailand and South-East Asia Region

Name Position Age True Share Ownership (31/12/06) Family Relationship Education Related training programs held by the Thai Institute of Directors Association (IOD) Major Experience

: : : : : : :

Mr. Harald Link Director 51 50,000 shares MBA, St. Gallen University, Switzerland -

Companies Listed on the Stock Exchange of Thailand 2000-Present Director, True Corporation Public Company Limited Present Director, Siam City Cement Public Company Limited Non-listed Companies 1987-Present Managing Partner, B. Grimm & Co. R.O.P. Chairman, B. Grimm Group of Companies

Name Position Age True Share Ownership (31/12/06) Family Relationship Education

: : : : : :

Dr. Lee G. Lam Director 47 Doctorate of Philosophy, University of Hong Kong Master Degree of Systems Science and MBA, University of Ottawa, Canada Bachelor of Sciences and Mathematics, University of Ottawa, Canada Post-graduate Diploma of Public Administration, Carleton University, Canada Post-graduate Diploma in English and Hong Kong Law, Manchester Metropolitan University, U.K. LLB (Hons) in Law, Manchester Metropolitan University, U.K.

Related training programs held by the Thai Institute of Directors Association (IOD) Major Experience

Companies Listed on the Stock Exchange of Thailand 2003-Present Director, True Corporation Public Company Limited Companies Listed on the Hong Kong Stock Exchange 2003-Sep 15, 2006 President & CEO / Vice Chairman of the Board Chia Tai Enterprises International Limited Non-listed Companies 2001-2003 Managing Director, BOC International Holdings Limited (â&#x20AC;&#x153;BOCIâ&#x20AC;?) 1999-2001 Executive Director, Singapore Technologies Telemedia 1998-1999 Partner-in-charge, Heidrick & Struggles 1996-1998 President & CEO, Millicom International Cellular Asia Pacific Operations 1993-1995 Managing Partner, A.T. Kearney, Inc. 1989-1993 General Manager, Cable & Wireless/Hongkong Telecom 1981-1989 Senior Executive, Bell Canada

Executive Officers’ Information (As of 31st December 2006)

100

Name Position Age True Share Ownership (31/12/06) Family Relationship

: : : : :

Education Related training programs held by the Thai Institute of Directors Association (IOD) Major Experience

: :

Name Position Age True Share Ownership (31/12/06) Family Relationship Education

: : : : : :

Related training programs held by the Thai Institute of Directors Association (IOD) Major Experience

Mr. Vichaow Rakphongphairoj Director, Managing Director and Chief Operating Officer 49 7,000 shares Master Degree of Business Administration, Pepperdine University, U.S.A. Master Degree of Electrical Engineering, University of Wisconsin, U.S.A. Bachelor of Electrical Engineering, Arizona State University, U.S.A. Director Certification Program (DCP)

Mr. Supachai Chearavanont Director, President and Chief Executive Officer 39 1,240,000 shares Mr. Dhanin’s son Mr. Supakij’s younger brother Bachelor of Business Administration in Financial Management, Boston University, U.S.A. -

Name

Mr. Chatchaval Jiaravanon

Position

Director and Managing Director - Group Investment

Age

True Share Ownership (31/12/06)

1,293,740 shares

Family Relationship

Mr. Sumetâ&#x20AC;&#x2122;s son

Education

Bachelor of Science Business Administration, University of Southern California, U.S.A.

Related training programs held

Director Accreditation Program (DAP)

Companies Listed on the Stock Exchange of Thailand

by the Thai Institute of Directors Association (IOD) Major Experience

1993-Present

Director and Managing Director-Group Investment, True Corporation Public Company Limited

2001-Present

Director and Member of the Audit Committee, Ticon Industrial Connection Public Company Limited

Non-listed Companies 2000-Present

President and C.E.O., Telecom Holding Company Limited

1997-Present

C.E.O., True Multimedia Company Limited True Internet Company Limited and Asia Infonet Company Limited

2006-Present

Chairman, Thai Kodama Company Limited

1992-2005

Director, Thai Kodama Company Limited

1990-Present

Director, Metro Machinery Company Limited

Present

Director, Subsidiaries of True Corporation Public Company Limited

101

Name

Mr. Athueck Asvanund

Position

Vice Chairman and Group General Counsel

Age

True Share Ownership (31/12/06)

1,300,046 shares

Family Relationship

Education

Master Degree of Laws, specialized in International Legal Studies, New York University, U.S.A. Bachelor of Laws (Honours), Thammasat University

Training

Capital Market Academy Leader Program

Related training programs held

Director Accreditation Program (DAP)

Companies Listed on the Stock Exchange of Thailand

by the Thai Institute of Directors Association (IOD) Major Experience

1997-Present

Vice Chairman and Group General Counsel, True Corporation Public Company Limited Advisor to the Board of Directors, C.P. Seven Eleven Public Company Limited

Non-listed Companies 1997-Present

Vice Chairman and Group General Counsel, Subsidiaries of True Corporation Public Company Limited Group General Counsel, Charoen Pokphand Group Company Limited and its subsidiaries Director, True Visions Public Company Limited and its subsidiaries

2002-Present

Director, True Move Company Limited

Present

Director, Aqua-Agri Foods International, Inc.

2001-2006

Associate Judge, Central Intellectual Property and International Trade Court

1978-1997

Baker & McKenzie

Present

Part-time Lecturer, Business Law, Faculty of Law, Chulalongkorn University

102

Name

Mr. William Harris

Position

Chief Financial Officer

Age

True Share Ownership (31/12/06)

1,117,838 shares

Family Relationship

Education

Master Degree of Business Administration, Major in Finance and Marketing, Wharton School of the University of Pennsylvania Bachelor of Science in Economics, Wharton School of the University of Pennsylvania

Related training programs held

Companies Listed on the Stock Exchange of Thailand

by the Thai Institute of Directors Association (IOD) Major Experience

2001-Present

Chief Financial Officer, True Corporation Public Company Limited

1999-2000

Executive Vice President-Corporate Finance, True Corporation Public Company Limited

Non-listed Companies 1993-1999

Director, Credit Policy, Verizon Communications, Philadelphia

Present

Director, Subsidiaries of True Corporation Public Company Limited

Name

Mr. Adhiruth Thothaveesansuk

Position

Managing Director - Office / SME Solution & Wireless Access

Age

True Share Ownership (31/12/06)

566,936 shares

Family Relationship

Education

Master Degree of Finance & Marketing, Indiana University of Pennsylvania, U.S.A. Bachelor of Industrial Management, Thammasat University

Related training programs held

Director Certification Program (DCP)

Companies Listed on the Stock Exchange of Thailand

by the Thai Institute of Directors Association (IOD) Major Experience

Present

Managing Director - Office / SME Solution & Wireless Access, True Corporation Public Company Limited

2001

Executive Vice President, True Corporation Public Company Limited

Non-listed Companies Present

President, Asia Wireless Communication Company Limited President, True Money Company Limited Director, True Visions Public Company Limited

2002

Chief Commercial Officer, True Move Company Limited

1998-2002

General Manager, Wire & Wireless Company Limited

1998-2001

President, Asia Wireless Communication Company Limited

103

Name

Mr. Songtham Phianpattanawit

Position

Managing Director - Corporate Solution, Wholesales & Data

Age

True Share Ownership (31/12/06)

700 shares

Family Relationship

Education

Bachelor of Science (Computer Science), University of South Alabama, U.S.A.

Related training programs held

Director Certification Program (DCP no.54)

Companies Listed on the Stock Exchange of Thailand

by the Thai Institute of Directors Association (IOD) Major Experience

Present

Managing Director - Corporate Solution, Wholesales & Data, True Corporation Public Company Limited

Non-listed Companies Present

Executive Director - Corporate Solution, True Move Company Limited Acting President, True Multimedia Company Limited Acting President, Wire & Wireless Company Limited President, True Internet Data Center Company Limited Executive Committee, Pantavanij Company Limited Director, Freewill Solution Company Limited

2006-Present

Director, True Internet Gateway Company Limited

2001-2003

Country General Manager / MD, IBM Thailand Company Limited

Director, Bangkok Inter Teletech Public Company Limited Chairman, IBM Solution Delivery Company Limited 2001-2002 2000

Director, IBM Storage Product Thailand Company Limited Director, Sales & Marketing, IBM Thailand Company Limited Country Manager System Sales, IBM Thailand Company Limited

1998

Country Manager Finance & Administration and CFO, IBM Thailand Company Limited

1997

104

Service Business Executive, IBM Thailand Company Limited

Name Position Age True Share Ownership (31/12/06) Family Relationship Education

: : : : : :

Related training programs held by the Thai Institute of Directors Association (IOD) Major Experience

Mr. Thiti Nantapatsiri Managing Director - Home / Consumer Solution & Highspeed Access 52 Bachelor Degree of Engineering (Electrical), King Mongkutâ&#x20AC;&#x2122;s Institute of Technology, Ladkrabang Campus -

Companies Listed on the Stock Exchange of Thailand Present Managing Director - Home / Consumer Solution & Highspeed Access, True Corporation Public Company Limited 1999-2003 Executive Vice President, Loxley Public Company Limited 1997-1999 First Senior Vice President, Loxley Public Company Limited Non-listed Companies 2001-2002 President & CEO, Hutchison CAT Wireless Multimedia Company Limited 1992-2000 President & CEO, Hutchison Telecommunications (Thailand) Company Limited Present Director, Subsidiaries of True Corporation Public Company Limited

105

The Company Directors’ Shareholding in True’s affiliates as of 31st December 2006 are as follows :

Director

106

Company

Change in 2006

Outstanding Share(s)

Mr. Dhanin

Chearavanont

Telecom Holding Co., Ltd. Bangkok Inter Teletech Public Company Limited

1 1

Mr. Sumet

Jiaravanon

Bangkok Inter Teletech Public Company Limited

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. True Touch Co., Ltd. True Multimedia Co., Ltd. Asia DBS Public Company Limited Asia Infonet Co., Ltd. Asia Wireless Communication Co., Ltd. True Internet Co., Ltd.

1 1 1 1 1 1 1 1 1

Mr. Chatchaval Jiaravanon

Telecom International Co., Ltd. Telecom Equipment Manufacturing Co., Ltd. Wire & Wireless Co., Ltd. True Touch Co., Ltd. True Internet Co., Ltd. Asia DBS Public Company Limited Asia Infonet Co., Ltd. Asia Wireless Communication Co., Ltd. True Multimedia Co., Ltd. True Lifestyle Retail Co., Ltd. True Internet Data Center Co., Ltd.

1 1 5 1 1 1 1 1 1 1 1

Mr. Soopakij

Telecom International Co., Ltd. Telecom Equipment Manufacturing Co., Ltd. True Touch Co., Ltd. True Internet Co., Ltd. Asia DBS Public Company Limited Asia Infonet Co., Ltd. Asia Wireless Communication Co., Ltd. True Multimedia Co., Ltd.

1 1 1 1 1 1 1 1

Chearavanont

Director

Company

Change in 2006

Outstanding Share(s)

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. True Touch Co., Ltd. True Internet Co., Ltd. Asia DBS Public Company Limited Asia Infonet Co., Ltd. Asia Wireless Communication Co., Ltd. True Multimedia Co., Ltd. True Money Co., Ltd. NC True Co., Ltd. True Internet Data Center Co., Ltd.

1 1 1 1 5 1 1 1 1 1 1 1 1 1

Mr.Athueck

Asvanund

True Money Co., Ltd.

Mr. Harald

Link

Telecom Equipment Manufacturing Co., Ltd.

480,000

Mr. Vichaow

Rakphongphairoj

1 1 1 1 1 1 1 1 1 1 1

107

Connected

Transactions

During 2006, the Group carried out the transactions with subsidiaries, associates, joint ventures and related companies as disclosed in the financial statements for the year ended 31 December 2006 (Note 11). The significant conected transactions of the Company and subsidiaries that carried out with associate and related companies are as follows: i) Sales and purchases of goods and services:

Details of transactions 1. Sales of good 1.1 Bangkok Inter Teletech Group of companies (BITCO) Sales of mobile handset and mobile accessories to Charoen Pokphand Group of companies (CPG)

1.2 Company Sales of Lan Network to Charoen Pokphand Group of companies (CPG)

1.3 Company Sales of WIFI service and modem to Asia Infonet Co., Ltd. (AI)

1.4 Company and subsidiaries Sales among related parties with the size of which not exceeding Baht 1 million. True Internet Data Center Co.,Ltd. (TIDC)

108

31 December 2006 (Baht’000)

23,988

Relationship

Rationale and necessity

CPG is a major shareholder of the Company. BITCO is the cellular telephone operator which the Company directly holds 78.26% and indirectly holds 15.10% of its equity interest. These companies are related through directorships.

The transactions arosed in ordinary course of business that BITCO proposed to the third party.

5,957

CPG is a major shareholder of the Company.

The transactions arosed in ordinary course of business that the Company proposed to the third party.

101

The Company indirectly holds 65.00% in AI’s equity interest and related through directorships, i.e. Mr. Chatchaval Jiaravanon and Mr. Ajva Taulananda.

The transactions arosed in ordinary course of business that the Company proposed to the third party.

The Company indirectly holds 70.00% in TIDC’s equity interest and related through directorships.

The transactions arosed in ordinary course of business, net of discount rate.

Details of transactions 1.5 Company and subsidiaries Sales among related parties with the size of which not exceeding Baht 1 million. Charoen Pokphand Group of companies (CPG) Total Sales of goods 2. Sales of services 2.1 True Multimedia Co., Ltd. (TM) Digital Data Network services to Asia Infoner Co., Ltd. (AI)

2.2 True Multimedia Co., Ltd. (TM) Digital Data Network services to KSC Commercial Internet Co., Ltd. (KSC)

2.3 True Multimedia Co., Ltd. (TM) Digital Data Network services to Charoen Pokphand Group of companies (CPG) 2.4 True Internet Co., Ltd. (TI) Sales of internet service to Charoen Pokphand Group of companies (CPG)

2.5 True Internet Co., Ltd. (TI) Sales of internet service to KSC Commercial Internet Co., Ltd. (KSC)

31 December 2006 (Baht’000)

Relationship

Rationale and necessity

CPG is a major shareholder of the Company and related through directorships.

The transactions arosed in ordinary course of business, net of discount rate.

14,708

The Company indirectly holds 91.08% in TM’s equity interest and 65.00% in AI’s equity interest. These companies are related through directorship, i.e. Mr. Chatchaval Jiaravanon.

The transactions arosed in ordinary course of business that TM proposed to the third party.

7,589

The Company indirectly holds 91.08% in TM’s equity interest and 37.83% in KSC’s equity interest. These companies are related through directorship, i.e. Mr. Supachai Chearavanont and Mr. Athueck Asvanund.

The transactions arosed in ordinary course of business that TM proposed to the third party.

28,380

CPG is a major shareholder of the Company. The Company indirectly holds 91.08% in TM’s equity interest. These companies are related through directorships.

The transactions arosed in ordinary course of business that TM proposed to the third party.

8,808

CPG is a major shareholder of the Company. The Company directly holds 99.99% in TI’s equity interest. These companies are related through directorships.

The transactions arosed in ordinary course of business that TI proposed to the third party.

The Company directly holds 99.99% in TI’s equity interest and indirectly holds 37.83% in KSC’s equity interest. These companies are related through directorships, i.e. Mr. Supachai Chearavanont.

The transactions arosed in ordinary course of business that TI proposed to the third party.

30,146

11,448

109

Details of transactions 2.6 True Properties Co., Ltd. (TP) Office rental and related services to Charoen Pokphand Group of companies (CPG)

2.7 True Properties Co., Ltd. (TP) Office rental and related services to NC True Co., Ltd. (NC True)

2.8 True Properties Co., Ltd. (TP) Office rental and related services to True Internet Data Center Co., Ltd. (TIDC)

2.9 True Leasing Co., Ltd. (TLS) Car rental and related

31 December 2006 (Baht’000)

110

Rationale and necessity

9,149

CPG is a major shareholder of the Company. The Company indirectly holds 99.99% in TP’s equity interest. These companies are related through directorships.

The transactions arosed in ordinary course of business at the rate of Baht 455 per square metre. The maturity are normally in 3 years and are allowed to be renewed.

6,145

The Company holds 40.00% in NC True’s equity interest and indirectly holds 99.99% in TP’s equity interest.

The transactions arosed in ordinary course of business at the rate of Baht 455 per square metre. The maturity are normally in one year and are allowed to be renewed.

3,279

The Company indirectly holds 99.99% in TP’s equity interest and 70.00% in TIDC’s equity interest. These companies are related through directorships, i.e. Mr. Chatchaval Jiaravanon.

The transactions arosed in ordinary course of business at the rate of Baht 455 per square metre. The maturity are normally in one year and are allowed to be renewed.

607,525

CPG is a major shareholder of the

The transactions arosed in

Company. The Company directly holds 99.99% in TLS’s equity interest.

ordinary course of business at the rate of Baht 15,000 per unit per month. The maturity are normally in 3 years basis.

The Company holds 40.00% in NC True’s equity interest and indirectly holds 70.00% in TIDC’s equity interest.

The transactions arosed in ordinary course of business at the rate of Baht 54,000 per unit per month. The maturity are normally in 1 years basis.

service to Charoen Pokphand Group of companies (CPG)

2.10 True Internet Data Center Co., Ltd. (TIDC) Rental server to NC True Co., Ltd. (NC True)

Relationship

3,069

Details of transactions 2.11 True Visions Group of companies (True Visions) Cable TV services to Charoen Pokphand Group of companies (CPG)

31 December 2006 (Baht’000)

17,470

2.14 Company Engineering and management service in associate with DDN to NEC Corporation (Thailand) Co., Ltd. (NEC) 2.15 Company Coin distribution services and service other to Charoen Pokphand Group of companies (CPG) 2.16 Company and subsidiaries Selling among related parties with the size of which not exceeding Baht 1 million. Asia Infonet Co., Ltd. (AI) 2.17 Company and subsidiaries Selling among related parties with the size of which not exceeding Baht 1 million. True Internet Data Center Co., Ltd. (TIDC)

Rationale and necessity

CPG is a major shareholder of the Company. The Company indirectly holds 91.79% in True Visions’s equity interest.

The transations arosed in ordinary course of business that True Visions proposed to the third party.

Same as 1.1

The transactions arosed in ordinary course of business that BITCO proposed to the third party.

Same as 1.3

The transactions arosed in ordinary course of business that the Company proposed to the third party.

The Company indirectly holds 9.62% in NEC’s equity interest and related through directorship by Mr.Chatchaval Jiaravanon.

The transactions arosed in ordinary course of business, net of discount rate.

2,399

Same as 1.2

The transactions arosed in ordinary course of business, net of discount rate.

1,102

The Company indirectly holds 65.00% in AI’s equity interest and related through directorships.

The transactions arosed in ordinary course of business, net of discount rate.

Same as 1.4

The transactions arosed in ordinary course of business, net of discount rate.

2.12 Bangkok Inter Teletech Group of companies (BITCO) 6,674,047 Sales of scratch card to Charoen Pokphand Group of companies (CPG) 2.13 Company Consult to Asia Infonet Co., Ltd. (AI)

Relationship

2,001

243

535

111

Details of transactions 2.18 Company and subsidiaries Selling among related parties with the size of which not exceeding Baht 1 million NC True Co., Ltd. (NC True) 2.19 Company and subsidiaries Selling among related parties with the size of which not exceeding Baht 1 million. Charoen Pokphand Group of companies (CPG) Total sales of services 3. Purchase of services 3.1 Asia Infonet Co., Ltd. (AI) Office rental and related services from Charoen Pokphand Group of companies (CPG)

3.2 Asia Wireless Communication Co., Ltd. (AWC) Repair and maintenance

31 December 2006 (Baht’000)

538

112

Rationale and necessity

The Company holds 40.00% in NC True’s equity interest. These companies are related through directorships.

The transactions arosed in ordinary course of business, net of discount rate.

Same as 1.5

The transactions arosed in ordinary course of business, net of discount rate.

4,063

CPG is an investor in major shareholder of the Company. The Company indirectly holds 65.00% in AI’s equity interest. These companies are related through directorships

The transactions arosed in ordinary course of business at the rate of Baht 358,750.55 per month. The maturity are normally in the year and are allowed to be renewed.

16,110

The Company indirectly holds 9.62% in NEC’s equity interest and 99.99% in AWC’s equity interest.

The transactions arosed in ordinary course of business.

Same as 2.4

The transactions arosed in ordinary course of business at rate of Baht 149,688 per month. The maturity are normally in the year and are allowed to be renewed.

1,026

7,399,461

services from NEC Corporation (Thailand) Co., Ltd. (NEC) 3.3 True Internet Co., Ltd. (TI) Office rental and related services from Charoen Pokphand Group of companies (CPG)

Relationship

6,307

Details of transactions 3.4 True Internet co., Ltd. (TI) Corporate internet services from Asia Infonet Co., Ltd. (AI)

3.5 True Internet Co., Ltd. (TI) Cost of revenue sharing from True Internet Data Center Co., Ltd. (TIDC)

3.6 True Internet Co., Ltd. (TI) Rental network from KSC Commercial Internet Co., Ltd. (KSC) 3.7 True Digital Entertainment Co., Ltd. (TDE) Office rental and related Services from Charoen Pokphand Group of companies (CPG)

3.8 True Digital Entertainment Co., Ltd. (TDE) Rental of internet server

31 December 2006 (Baht’000)

Rationale and necessity

318,123

The Company directly holds 99.99% in TI’s equity interest and indirectly holds 65.00% in AI’s equity interest. These companies are related through directorships.

The transactions arosed in ordinary course of business.

7,667

The Company directly holds 99.99% in TI’s equity interest and indirectly holds 70.00% in TIDC’s equity interest. These companies are related through directorships, i.e. Mr. Noppadol Dej-Udom.

The transactions arosed in ordinary course of business.

2,034

Same as 2.5

The transactions arosed in ordinary course of business.

5,034

CPG is a major shareholder of the Company. The Company directly holds 88.39% and indirectly holds 11.61% in TDE’s equity interest. These companies are related through directorships.

The transactions arosed in ordinary course of business.

1,720

The Company indirectly holds 70.00% in TIDC’s equity interest and directly holds 88.39% and indirectly holds 11.61% in TDE’s equity interest. These companies are related through directorships.

The transactions arosed in ordinary course of business.

9,288

CPG is a major shareholder of the Company. The Company indirectly holds 99.99% in TT’s equity interest. These companies are related through directorships.

The transactions arosed in ordinary course of business.

from True Internet Data Center Co., Ltd. (TIDC)

3.9 True Touch Co., Ltd. (TT) Office rental and related services from Charoen Pokphand Group of companies (CPG)

Relationship

113

Details of transactions 3.10 Wire and Wireless Co., Ltd. (WW) Insurance from Charoen Pokphand Group of companies (CPG)

3.11 True Money Co., Ltd. (TMN) Commission from Charoen Pokphand Group of companies (CPG)

3.12 True Visions Group of companies (True Visions) Other service from Charoen Pokphand Group of companies (CPG) 3.13 Bangkok Inter Teletech Group of companies (BITCO) Office rental and related services from Charoen Pokphand Group of companies (CPG)

3.14 Company Rental of internet server from True Internet Data Center Co., Ltd. (TIDC)

3.15 Company Repair and maintenance services from NEC Corporation (Thailand) Co., Ltd. (NEC)

114

31 December 2006 (Baht’000)

Relationship

Rationale and necessity

2,670

CPG is a major shareholder of the Company. The Company directly holds 87.50% in WW’s equity interest. These companies are related through directorships.

The transactions arosed in ordinary course of business.

7,768

CPG is a major shareholder of the Company. The Company directly hold 49.00% and indirectly holds 51.00% in TMN’s equity interest. These companies are related through directorships.

The transactions arosed in ordinary course of business.

5,149

Same as 2.11

The transactions arosed in ordinary course of business.

Same as 1.1

The transactions arosed in ordinary course of business at the rate of Baht 816,988 per month. The maturity are normally in 3 year and are allowed to renewed.

8,621

The Company indirectly holds 70.00% in TIDC’s equity interest and related through directorships, i.e. Mr. Chatchaval Jiaravanon.

The transactions arosed in ordinary course of business at the rate of Baht 810,536.60 per month. The maturity are normally in the year and are allowed to be renewed.

2,094

Same as 2.14

The transactions arosed in ordinary course of business.

461,651

Details of transactions 3.16 Company Commission from Charoen Pokphand Group of companies (CPG) 3.17 Company Office rental and related services from Charoen Pokphand Group of companies (CPG)

3.18 Company Development purchasing system from Charoen Pokphand Group of Companies (CPG) 3.19 Company and subsidiaries Selling among related parties with the size of which not exceeding Baht 1 million. Asia Infonet co., Ltd. (AI) 3.20 Company and subsidiaries Selling among related parties with the size of which not exceeding Baht 1 million. True Internet Data Center Co., Ltd (TIDC) 3.21 Company and subsidiaries Selling among related parties with the size of which not exceeding Baht 1 million. NEC Corporation (Thailand) Co., Ltd. (NEC)

31 December 2006 (Bahtâ&#x20AC;&#x2122;000)

Relationship

Rationale and necessity

22,072

Same as 1.2

The transactions arosed in ordinary course of business at rate 5-10% of connected revenues.

34,014

Same as 1.2

The transactions arosed in ordinary course of business at the rate of Baht 200-220 per square metre per month for rental and Baht 220-520 per square metre per month for service. The maturity are normally in the year and are allowed to be renewed.

41,427

Same as 1.2

The transactions arosed in ordinary course of business.

Same as 2.16

The transactions arosed in ordinary course of business, net of discount rate.

Same as 1.4

The transactions arosed in ordinary course of business, net of discount rate.

The Company indirectly holds 9.62% in NECâ&#x20AC;&#x2122;s equity interest and related through directorship

The transactions arosed in ordinary course of business, net of discount rate.

271

1,089

115

Details of transactions 3.22 Company and subsidiaries Selling among related parties with the size of which not exceeding Baht 1 million. Charoen Pokphand Group of companies (CPG) Total purchase of services 4. Purchase of goods 4.1 True Internet Co., Ltd. (TI) Purchase office supply from Asia Infonet Co., Ltd. (AI) 4.2 True Internet Co., Ltd. (TI) Computer software from Charoen Pokphand Group of companies (CPG) 4.3 True Internet Co., Ltd. (TI) Purchase office supply from True Internet Data Center Co., Ltd. (TIDC) 4.4 True Multimedia Co., Ltd. (TM) Computer software from

31 December 2006 (Bahtâ&#x20AC;&#x2122;000)

2,286

Relationship

Same as 1.5

The transactions arosed in ordinary course of business, net of discount rate.

2,228

Same as 3.4

The transactions arosed in ordinary course of business.

1,263

Same as 2.4

The transactions arosed in ordinary course of business.

1,131

Same as 3.5

The transactions arosed in ordinary course of business.

1,875

Same as 2.3

The transactions arosed in ordinary course of business.

5,067

CPG is a major shareholder of the Company. The Company indirectly holds 99.99 TLRâ&#x20AC;&#x2122;s equity interest. These companies are related through directorships.

The transactions arosed in ordinary course of business.

959,483

Charoen Pokphand Group of companies (CPG) 4.5 True Lifestyle Retail Co., Ltd. (TLR) Computer software from Charoen Pokphand Group of companies (CPG)

116

Rationale and necessity

Details of transactions 4.6 True Digital Entertainment Co.,Ltd. (TDE) Computer software from Charoen Pokphand Group of companies (CPG) 4.7 Bangkok Inter Teletech Group of companies (BITCO) Purchase of good from NC True Co., Ltd. (NC TRUE)

4.8 Bangkok Inter Teletech Group of companies (BITCO) Computer software from Charoen Pokphand Group of companies (CPG) 4.9 Company Purchase network equipment from NEC Corporation (Thailand) Co.,Ltd. (NEC) 4.10 Company Computer software from Charoen Pokphand Group of companies (CPG) 4.11 Company and subsidiaries Selling among related parties with the size of which not exceeding Baht 1 million. NC True Co., Ltd. (NC True)

31 December 2006 (Bahtâ&#x20AC;&#x2122;000)

Relationship

Rationale and necessity

3,081

Same as 3.7

The transactions arosed in ordinary course of business.

5,839

The Company holds 40.00% in NC Trueâ&#x20AC;&#x2122;s equity interest. BITCO is the cellular telephone operator which the Company directly holds 78.26% and indirectly holds 15.10% of its equity interest. These companies are related through directorships.

The transactions arosed in ordinary course of business.

14,397

Same as 1.1

The transactions arosed in ordinary course of business.

1,721

Same as 2.14

The transactions arosed in ordinary course of business.

64,047

Same as 1.2

The transactions arosed in ordinary course of business.

Same as 2.18

The transactions arosed in ordinary course of business, net of discount rate.

179

117

Details of transactions

31 December 2006 (Baht’000)

4.12 Company and subsidiaries Selling among related parties with the size of which not exceeding Baht 1 million. KSC Commercial Internet Co., Ltd. (KSC) 4.13 Company and subsidiaries Selling among related parties with the size of which not exceeding Baht 1 million. Asia Infonet Co., Ltd. (AI) 4.14 Company and subsidiaries Selling among related parties with the size of which not exceeding Baht 1 million. Charoen Pokphand Group of companies (CPG) Total purchase of goods

Relationship

Rationale and necessity

The Company indirectly holds 37.83% in KSC’s equity interest. These companies are related through directorships.

The transactions arosed in ordinary course of business, net of discount rate.

250

Same as 2.16

The transactions arosed in ordinary course of business, net of discount rate.

720

Same as 1.5

The transactions arosed in ordinary course of business, net of discount rate.

101,809

ii) Outstanding balances arising from sales of goods and services:

Joint ventures, associates and related companies

118

Amount Baht’000

Asia Infonet Co., Ltd. True Internet Data Center Co., Ltd. KSC Commercial Internet Co., Ltd. NC True Co., Ltd. NEC Corporation (Thailand) Co., Ltd. CP Group of companies

14,973 827 57,100 6,024 24 850,867

Total

929,815

iii) Outstanding balances arising from purchases of goods and services:

Joint ventures, associates and related companies

Amount Baht’000

Asia Infonet Co., Ltd. True Internet Data Center Co., Ltd. KSC Commercial Internet Co., Ltd. NC True Co., Ltd. CP Group of companies NEC Corporation (Thailand) Co., Ltd.

26,585 5,205 7,214 1,045 50,653 3,622

Total

94,324

iv) Loans to related party Outstanding balance and movement of loans to related party:

Related companies

Amount Baht’000

KSC Commercial Internet Co., Ltd. True Internet Data Center Co., Ltd.

25,880 12,000

Total

37,880

The Company indirectly holds 37.83% in KSC’s equity interest. v) Loans from a related party

Related companies

Kreditanstalt fur Wiederaufbau (KfW)

Amount Baht’000 5,579,378

KfW is the only preference shareholder of the Company and holds 15.54% of issued and paid-up share capital. Loan are denominated in US Dollar amounting to USD 160.65 million. The loans rank pari passu with other secured lenders and carry interest at LIBOR plus a fixed percentage per annum. The loans are secured against various categories of assets. The first repayment will be due in September 2006 and the final maturity date will be on 31 December 2011. The related interest expenses were Baht 423.14 million for the year ended 31 December 2006.

119

vi) Commitments The Company has carried the commitment to support a certain subsidiary pertaining to loans agreements entered into by the subsidiary with its creditors. The financial supports are set as follows: 1. Regulatory sponsor support to governmental authorities arising out the mobile phone concession: ,where the subsidiary experience cash shortfalls for its normal operation due to regulatory cost, the sponsors shall provide financial support for the amount of the shortfall caused by the excess regulatory costs. 2. General cash deficiency sponsor support: where the cash flows of the subsidiary are insufficient for its normal operations or debt repayments pursuant to the terms of the financing documents with its lenders, the Company will provide financial support to the subsidiary in a total amount no exceeding Baht 7,000.00 million Under the terms and conditions of the agreements, the Company and concerned parties must comply with certain conditions as stipulated in the agreements. The sponsor support funds must be injected into the subsidiary in the form as specified in the agreements. Measures and Procedures for Approving the Entering into of Connected Transactions The Company has measures and procedures for approving the entering into of connected transactions in compliance with the Rules and Regulations of the Office of the Securities and Exchange Commission (“SEC”) and the Stock Exchange of Thailand (“SET”) i.e. related party transactions must be approved by the Independent Directors and processed according to established internal procedures for related party transactions, details of which have been stipulated by the Independent Directors. If any related party transaction is deemed to be a connected transaction, the said transaction must be approved by the Audit Committee, the Board of Directors and / or the Shareholders Meeting as the case may be, according to the regulations of the Stock Exchange of Thailand. Moreover, the Company must comply with .. the terms and conditions of the Shareholders’ Agreement executed with Kreditanstalt fur Wiedderaufbau dated 22nd December 1999 which specifies that the Company must disclose if its major sharholders of affiliates enter into any connected transactions. 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 internal guidelines for connected transactions by undertaking a comparative study of the connected transactions guidelines of 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 that 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.

120

Audit

Fees

1. Audit fees The audit fees and related expenses occurred during the year 2006 was Baht 21.46 million. The Company and subsidiaries paid during the year amount of Baht 13.32 million to the appointed auditing firm. The remaining fees of Baht 8.14 million will be paid in the following year.

2. Other non-audit fees During the year 2006, the appointed auditing firm provided other non-audit services, i.e. agree-upon procedures, tax consulting service and other to the Company and subsidiaries. The fees were Baht 29.88 million and Baht 28.66 million was paid during the year. The remaining fees of Baht 1.22 million will be paid in the following year upon the completion of work.

121

Report

of the Audit Committee

for the Year 2006

The Audit Committee, comprised of Mr. Vitthya Vejjajiva, Dr. Kosol Petchsuwan and Mr. Joti Bhokavanij, was reappointed by the Board of Directors Meeting No. 2/2549 on 23 February 2006 to perform duties and discharge responsibilities under the charter for the Audit Committee. During the year 2006, the Audit Committee held 6 meetings to discharge its functions as assigned by the Board of Directors as summarized below: 1. Recommended the reappointment of external auditors to the Company and its subsidiaries; 2. Oversaw the performance of the external auditors including the scope of their audit and recommended appropriate remuneration to the Board; 3. Discussed with the external auditors the scope of their audits before they commenced and reviewed the results and considered their Management Letter; 4. Acknowledged the audit plan and external auditor’s findings and provided recommendations; 5. Reviewed the annual and quarterly financial reports of the Company and its subsidiaries to ensure correctness, reliability and adequacy of information disclosed; 6. Regularly reviewed the Company’s and its subsidiaries’ practices relating to connected transactions to ensure compliance with the regulation of the Stock Exchange of Thailand; 7. Reviewed internal audit and its relationship with the external auditors, including plans and performance; 8. Provided advices to Internal Audit Department; 9. 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; 10. Closely monitored the work progress of Internal Audit Department in order to enhance effectiveness of the internal audit function; and 11. Ensured the improvement of internal controls system of the Company to enhance efficiency and effectiveness and ensure appropriate compliance with applicable regulatory requirements. The Audit Committee has independence in performing the duties as assigned. In this regard, the Audit Committee has received good collaboration from the management, met and discussed with the independent auditors to be informed on the auditor’s comments on the financial statements and internal controls system. The independent auditors, internal auditors, and management of the Company have not brought any matter to the attention of the Audit Committee that would indicate material weaknesses in the internal controls system or legal non-compliance.

signed by

122

Mr. Vitthya Vejjajiva Chairman of the Audit Committee

Report

of the Compensation and Nominating Committee for the Year 2006 By virtue of the resolution of the Board of Directors of the Company passed at its meeting No. 8/2543 held on 16th November 2001, the Compensation and Nominating Committee (the “Committee”) was appointed to perform and discharge certain responsibilities. During the year 2006, the Committee carried out the following tasks: 1. Held one meeting in order to discharge its functions as assigned by the Board of Directors; 2. Considered and proposed recommendation to the Board of Directors regarding the reappointment of the Audit Committee and the appointment of the Secretary to the Audit Committee; 3. Considered the Employee Stock Option Plan for the Year 2006 (the “ESOP 2006 Project”) and proposed recommendation to the Board of Directors and the Shareholders Meetings for further consideration and approval respectively; 4. Considered and approved variable payout to the CEO/President for the Year 2005 (payout in 2006); and 5. Considered and approved the Executives Variable Pay Plan for the Year 2006 (payout in 2007).

signed by

Mr. Umroong Sanphasitvong Representative of the Compensation and Nominating Committee

123

Report

of the Corporate Governance Committee

for the Year 2006

By virtue of a resolution of the Board of Directors of the Company passed at its meeting No. 3/2549 held on 24th March 2006, the Corporate Governance Committee was appointed to perform duties and discharge responsibilities. During the year 2006, the Corporate Governance Committee proceeded as follows: 1. held two meetings in order to discharge its functions as assigned by the Board of Directors; 2. met with representatives from the Stock Exchange of Thailand (â&#x20AC;&#x153;SETâ&#x20AC;?) to discuss and exchange opinions with the SET regarding the new Principles of Corporate Governance, which will be applied to the information of the Year 2007 that will be disclosed in the Year 2008; 3. reviewed the existing Policy on Corporate Governance of the Company and proposed some additional contents in order to comply with the new Principle recommended by the SET, combined with the concept of Sufficiency Economy, to the Board of Directors for consideration and approval; 4. considered the criteria to screen the issues proposed by minority shareholders to include in the AGM agenda and proposed to the Board of Directors for consideration and approval; 5. considered the Report on Corporate Governance Practice of True for disclosure in the Annual Report for the Year 2006 and proposed to the Board of Director for consideration and approval; 6. considered the self-assessment form of the Board of Directors and proposed to the Board of Directors for concurrence for further action; and 7. considered the Corporate Governance Assessment Report 2006 of the Company assessed by the Thai Institute of Directors Association and proposed to the Board of Directors with recommen dations for further improving the Corporate Governance of the Company.

signed by

124

Mr. Narong Srisa-an Chairman of the Corporate Governance Committee

Report

of the Finance Committee for the Year 2006

By virtue of a resolution of the Board of Directors of the Company passed at its meeting No. 8/2544 held on 16th November 2001, the Finance Committee was appointed to perform and discharge certain responsibilities. During the Year 2006, the Finance Committee has carried out the following tasks: 1. held six meetings in order to discharge its functions as assigned by the Board of Directors; 2. considered the 2006 financial targets and proposed recommendation to the Board of Directors for approval; 3. considered the revision of authorized bank signatories with respect to certain bank accounts and proposed recommendation to the Board of Directors for approval; 4. considered various investment projects and proposed recommendation to the Board of Directors for approval; 5. considered the quarterly and annual financial results of the Company and its subsidiaries; 6. acknowledged the refinancing status and plan of certain subsidiaries; 7. considered the capital increase of certain subsidiaries of the Company and proposed recommendation to the Board of Directors for approval; 8. considered the Annual Hedging Plan of the Year 2007 together with the Policy on the Use of Derivative Securities in Financial Transactions and proposed recommendation to the Board of Directors for approval; and 9. considered the preliminary overview of the 2007 financial target and proposed to the Board of Directors for preliminary information.

signed by

Dr. Ajva Taulananda Chairman of the Finance Committee

125

Report of the Board

of Directorsâ&#x20AC;&#x2122; Responsibilities for Financial Statements for the Year 2006 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 Directors is of the opinion that the Companyâ&#x20AC;&#x2122;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 2006.

signed by

126

Mr. Dhanin Chearavanont Chairman of the Board

Managementâ&#x20AC;&#x2122;s

Discussion and Analysis

127

128

129

130

131

132

133

134

135

136

137

138

139

142