เอกสารเพิ่มเติมในรายงานประจําป 2548 บริษัท ซีเอส ล็อกซอินโฟ จํากัด (มหาชน) หนาที่ 55 66
ขอความเดิม ความเปนอิสระและนิยามของความเปนอิสระ 1) ถือหุนไมเกินรอยละ 5 หมวดที่ 4 การควบคุมและบริหารความเสี่ยง 2 การบริหารความเสี่ยง
ขอมูลแกไข / เพิ่มเติม 1) ถือหุนไมเกินรอยละ 0.5 เพิ่มขอความ “การบริหารความเสี่ยงถือเปนสวนหนึ่งของการ จัดทํา Business Plan ประจําป เพื่อใหการ กําหนดแนวทางการจัดการความเสี่ยงนั้น สอดคลองกับวัตถุประสงค เปาหมาย และแผน กลยุทธตางๆ ของบริษัท ทั้งนี้ผูบริหารและ พนักงานทุกคนในบริษัทเปนเจาของความเสี่ยง และมีหนาที่ในการประเมินความเสี่ยงของแตละ หนวยงานและกระบวนการทํางาน ประเมิน ประสิทธิภาพของมาตรการควบคุมที่มีอยู และ นําเสนอแผนและวิธีการในการลดความเสี่ยง ตอ คณะกรรมการบริหารความเสี่ยง คณะกรรมการ ตรวจสอบ และคณะกรรมการบริษัท”
Additional information Annual Report 2005 CS LoxInfo Public Company Limited Pages 55
66
Information Independence and Definition of Independent Director 1) Being a director who holds shares not more than 5% Chapter 4 Internal Control and Risk Management 2. Risk Management
Revised / Additional Information 1) Being a director who holds shares not more than 0.5% 2. Risk Management Additional “Risk management becomes part of the Company’s annual business plan process so that the risk management is aligned with the objectives, goals, and strategic plans of the Company. As the risk owners, the management and all staff in the Company shall be responsible to assess risks of each department and working process, to evaluate the effectiveness of existing control, and to propose action plans to mitigate the risks as well as to report it to the Risk Management Committee, Audit Committee and the Board of Directors.”
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The Yearûs Milestones General Background CS LoxInfo Public Company Limited (çthe Companyé), formerly known as CS Communications Company Limited, was established on 20 July, 1994, with initial registered capital of Baht 10 million, as a joint venture of CAT Telecommunication Public Company Limited (çCATé) and Shin Satellite Public Company Limited, with holdings of 49% and 51%, respectively. The Company was granted a concession to provide television signals and internet access via satellite for a period of 22 years from 9 August 1994 to 8 August 2016. In 1997, the Company was granted a concession from CAT to provide commercial internet access services via landlines and satellite for a period of 10 years from 1997 to 2007 under the name of çCS Interneté. Moreover, the Company diversified its business to other services, such as content, games, printing and the publishing of the Thailand YellowPages in both online and offline formats and Audiotex via the phone numbers 1900 and 1188. In 2003, the Company changed its status from a limited company to a public limited company and listed on the Stock Exchange of Thailand in April 2004. The Company's registered share capital as at 31 December 2005 was 639.57 million ordinary shares of Baht 1 each. 625 million ordinary shares were fully paid-up. The Companyûs major shareholders are Shin Broadband Internet (Thailand) Company Limited (çSBIé), and Singapore Telecommunication Limited (çSingTelé), with a shareholding of 40% and 13%, respectively. The Company was granted a one-year license from the National Telecommunications Commission (çNTCé) to operate internet access services, ending September 7, 2006. Under the NTCûs conditions, if the authorized licensee is not significantly in violation of the conditions as specified in the license, the NTC will renew the license immediately.
The Company's Progress and Development January 2004 An extraordinary shareholdersû meeting of the Company passed a resolution to approve the Companyûs purchase of the shares of Teleinfo Media Public Company Limited (çTMCé) (previously named Teleinfo Media Company Limited) from Shin Corporation Public Company Limited (çShiné) and SingTel, to the amount of 63.25% of the share capital of TMC, with a total price not over Baht 800 million.
March 2004 The Company acquired TMC from Shin and Singtel at a total price of Baht 507 million, which represented a shareholding of 63.25% of TMC's share capital. TMC had been granted rights to publish and advertise telephone directories from the TOT Public Company Limited (çTOTé) (previously named TOT Corporation Public Company Limited). In addition, TOT had the right to sell its shares in TMC to the Company at a price not lower than the selling price of Shin and Singtel within one year as from 12 February 2004.
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April 2004 The Company registered additional issued and paid-up share capital with the Ministry of Commerce from 500 million shares at a par value of Baht 1 each to 625 million shares at a par value of Baht 1 each. The additional ordinary shares were issued and offered to the public and entered into registration in the Securities and Exchange of Thailand on 8 April 2004 with an IPO price of Baht 9 each.
July 2004 An extraordinary shareholdersû meeting of the Company passed a resolution to approve the increase in registered share capital from 628,096,300 ordinary shares at a par value of Baht 1 each to 630,982,200 ordinary shares at a par value of Baht 1 each. The increase in registered share capital was registered with the Ministry of Commerce on 29 July 2004. The additional registered share capital is reserved for granting warrants to directors, employees and advisors of the Company, under an Employee Stock Option Program (çESOPé) Grant I.
September 2004 TMC entered into an Audiotex agreement with TOT for a period of 15 years to provide information, news and entertainment programs via the telephone and fax numbers 1900 and 1188, 24 hours per day, by the use of operators. TMC started to provide the 1900 service and 1188 service on November 2004 and December 2004, respectively.
April 2005 The Companyûs annual general shareholder meeting passed a resolution to increase capital from 630,982,200 shares to 639,569,774 shares at par value per share of Baht 1. Such capital increase was registered with the Ministry of Commerce on 26 April 2005. The Company also reserved shares, subsequent to the adjustment of rights, for the exercise of warrants to purchase ordinary shares of the Company that were issued to the directors and employees of the Company pursuant to ESOP Grant I and Grant II to the amount of 14,738 shares and 13,736 shares, respectively. In addition, 8,559,100 shares were reserved for the exercise of warrants under ESOP Grant III that were sold to the Company's directors and employees.
June 2005 The Company further acquired ordinary shares and preferred shares of TMC for a total of 25,509,400 shares at Baht 25 per share (equivalent to 36.75% shareholding) from TOT with the following payment conditions:
`
ë The first payment of Baht 20 per share paid within June 29, 2005. ë The second payment of Baht 5 per share paid within 30 days after the auditor (approved by SEC), certified the financial statements of TMC for the accounting year ended 2007 and the aggregated revenues of TMC for the accounting year 2006 and 2007 is equal to or higher than Baht 2,000 million.
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August 2005 TMCûs extraordinary general shareholder meeting No. 2/2005 approved : ë The conversion of TMCûs status from a limited company into a public limited company and changed the name to Teleinfo Media Public Company Limited. ë TMC decreased its capital a total of Baht 520,602,000, from registered capital of Baht 694,136,000 to Baht 173,534,000, by way of reducing the number of ordinary shares and preferred shares at par value per share of Baht 10 from 40,060,200 shares and 12,000,000 shares, respectively in order to eliminate its remaining retained loss and repay the residual part of the decreased portion to shareholders whose capital were reduced.
September 2005 The Company received a one-year license from the NTC to operate internet access services ending September 7, 2006. Under the NTC's conditions, if the authorized licensee is not significantly in violation of the conditions as specified in the license, the NTC will renew the license immediately.
October 2005 An extraordinary general shareholdersû meeting of CS LoxInfo Solutions Company Limited had the intention to discontinue its operations and approved closing the business. CS LoxInfo Solutions Company Limited is now in the process of winding up.
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Risk Factors Industry Risks ë Risk from the liberalization of the telecommunications business After several new licenses to operate telecommunications businesses without the licensee having its own network were granted in the past year by the National Telecommunications Commission Committee (çNTCCé), the number of internet service providers is increasing, with a corresponding higher level of competition. In a more competitive environment, the Companyûs future business operations in terms of revenues and market share may be affected. However, the Company believes that a successful entry into the market by new Internet service providers will be difficult given that there are a considerable number of operators, both government and private entities, already in the market in the midst of fierce competition from other competitors in the market. Additionally, to minimize the risk from the liberalization of the telecommunications business, the Company has placed a greater emphasis on quality and services, particularly to corporate clients. The Company is confident that these corporate clients have high potential to consume and grow continuously. With quality networking services, technology, a highly experienced staff and management team, distribution channels covering every internet user group throughout the country and full support from its business affiliates, it will further improve the efficiency and effectiveness of services going forward.
ë Risk of having state enterprises enter into internet services in competition with the private sector At present, the state-owned enterprises i.e. CAT Telecom Public Company Limited (çCATé) and TOT Public Company Limited (çTOTé) also provide internet services to the public through leased line, high-speed broadband internet and dial-up via telephone lines. These two government entities have more competitive advantages because they have their own networks. Though not having its own network, the Company believes that with full support from its affiliates in the group, especially Advance Datanetwork Communication Company Limited (çADCé) for the installation of a high speed Internet network, called Gigabit Ring, in 2004, the Company will be able to manage networks costs to be almost the same as those of the two government entities.
ë Risk from changes in internet technology Today, as a result of technological changes regarding internet network connections, especially in terms of connection speed, high-speed internet will become a more popular form of connection, thereby enlarging the market size while at the same time reducing the service fee. Moreover, other forms of connection technology will become even more recognized e.g. satellite, fiber to home, powerline broadband or high-speed radio connections (WiMax). WiMax is the latest technology for transmitting information and image signals over 10 kilometers, enabling cordless communications. This continues to increase in popularity in developed countries. If the Company is unable to improve its services to keep pace with the latest changes in technology, it may lose its competitive advantage in terms of service. Therefore, to alleviate such risks, the Company has set a policy to develop and
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adapt its services so as to provide new services to consumers and create a competitive advantage. However, its investment policy in relation to new service technologies shall have characteristics that correspond with demand in the short and medium terms. As such, the Company will have enough flexibility in acquiring better and lower cost technologies to apply, improve or develop new services in years to come.
Operational Risks ë Risk from highly competitive environment of the internet service business Since the liberalization of the telecommunications industry under the supervision of the NTCC, the Company has already obtained a license to operate a telecommunicationsû business without its own network. As a result of such liberalization, competition among internet service businesses may significantly increase. Over the past year, a number of competitors have used a pricing strategy, or event marketing, aggressively and continuously to attract consumers and expand market share. From such risk, it is necessary for the Company to come up with a marketing strategy that will be able to create competitiveness, maintain market share and improve the quality of products and services as opposed to entering a price war, to avoid having impact on its operation.
ë Risk from higher competition from the liberalization of the Yellow Pages publishing business Following the expiration of TMCûs concession in 2005, there might an increasing number of new players operate in competition with TMC that will foster higher business competition. It is likely that TMCûs projection of revenue and net profit will be less than earlier forecast. Nonetheless, TMC has long been an expert in the YellowPages business coupled with its highly efficient data collection system, sales teamûs capability, and enduring business relationship with a considerable number of customers encompassing all customer groups throughout the country. TMC has also planned to develop new products and services in addition to its existing services e.g. YellowPages@Home, Station Buzz and Health, Spa & Beauty etc., by further targeting customers in niche markets with the objective of expanding its sources of revenue going forward. The Company also plans to increase its public relations and advertising activities in order to expand its customer base, including TMC's advertisers, while at the same time increasing the number of users of its products and services. This will, as a result, enable the Company to respond to customersû needs and be consistent with their lifestyle to a large extent. The Company strongly believes that TMC will be able to maintain its leading role in the YellowPages publishing business in the future.
ë Risk from dependence on key personnel The nature of the Companyûs business is specialized and involves high technology. The Company must rely on the knowledge, competence, and experience of its key personnel. If the Company loses important management or employees, it is likely that its future business operations may be affected. The Company has set a policy that recognizes the importance of human resources by establishing a corporate culture with a good working environment and proper incentives for employees. In addition, the Company has issued and sold warrants to its employees in order to create a motivational work environment in which they will try to maximize the Companyûs benefit and stay with the Company in the long term.
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Shareholding Structure of the Group (As of February 15, 2006)
Shin Corporation Plc.
1 22
42.80%
41.34%
Advanced Info Service Plc. 2
Shin Satellite Plc.
2
99.99% Mobile from Advance Co., Ltd. 51.00% Advanced Datanetwork Communications Co., Ltd.
99.99% Shin Broadband Internet (Thailand) Co., Ltd. 40.02% CS LoxInfo Plc. 2
49.00% Data Network Solutions Co., Ltd.
94.19% Loxley Information Services Co., Ltd.
98.55% Digital Phone Co., Ltd.
99.99% Teleinfo Media Plc.
100% Shenington Investments Pte Co., Ltd. 1 100% Cambodia Shinawatra Co., Ltd. 49.00% Lao Telecommunications Co., Ltd. 98.89% IPSTAR Co., Ltd.
99.99% Advanced Contact Center Co., Ltd.
100% IPSTAR Australia Pty Ltd.
65.00% Data Line Thai Co., Ltd.
100% IPSTAR New Zealand Co., Ltd.
69.99% Advanced MPay Co., Ltd.
100% IPSTAR DO BRASIL 3
99.99% Advanced Magic Card Co., Ltd.
70.00% Star Nucleus Co., Ltd.
99.93% AIS Wireless Communication Network Co., Ltd.
70.00% Spacecode LLC
99.93% AIS Wire Network Co., Ltd.
100% IPSTAR International Pte.Ltd.
99.93% AIS International Network Co., Ltd.
100% IPSTAR Global Services Ltd. 3
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52.93% ITV PIc.
2
99.99% Artware Media Co., Ltd. 60.00% Media Connex Co., Ltd. 99.96% SC Matchbox Co., Ltd.
99.99% I.T. Applications and Services Co., Ltd.
49.00% AsiaAvaiation Co., Ltd.
99.99% Shinawatra Information Technology Co., Ltd.
50.00% Thai AirAsia Co., Ltd. 51.00% Thai Crunch Time Co., Ltd.
90.91% AD Venture Co., Ltd. 70.00% Shineedotcom Co., Ltd.
60.00% Capital OK Co., Ltd.
47.50% Arc Cyber Co., Ltd.
99.99% Payment Solution Co., Ltd. 99.99% Professional Collection Co., Ltd.
1 Holding Company 2 Listed Company on the Stock Exchange Thailand 3 In the process of registering the Company
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Nature of Business CS LOXINFO Public Company Limited is ThailandÝs leading, top-quality, internet service provider and uses the brandname çCS LOXINFOÊ The Company uses a satellite and fiber optic network that covers every part of the country. The Company has technical experts capable of responding to the needs of users in every target group.
Products & Services CS LOXINFO covers all 76 provinces around Thailand. The Company aims to continue developing the quality of its internet services to meet the needs of consumers, from individuals to corporations, at every level. 1. Internet Services 1.1 Internet services via leased circuits (leased lines) 1.2 High-speed internet services via telephone lines (ADSL) 1.3 High-speed internet services via satellite (satellite broadband) 1.4 Internet services via telephone lines (dial up) 1.5 Value Added Services 2. Internet Data Center or IDC services 3. Television uplink/downlink services
1. Internet Services 1.1 Internet services via leased circuits (leased lines) Suitable for corporate users wishing to use high-speed internet and information technology systems to increase the efficiency of their business operations. The company has a team of experts to assist and give consultation to customers 24 hours a day, with a sophisticated backup satellite network and managed services to ensure their internet service maintains a secure and continuous connection 1.2 High-speed internet services via telephone lines (ADSL) Suitable for individual users or medium and small enterprises, The Company works with infrastructure partners to provide high-speed internet services in both Bangkok and the provinces, offering quality services as well as other value added services to meet the needs of each customer group. 1.3 High speed internet services via satellite network (satellite broadband) The superiority of a satellite system ensures the efficiency of internet connections in distributing information or content simultaneously across the country, even to remote areas. This service is beecoming increasingly popular at present owing to the reduction of service fees after the Thaicom 4 (IPSTAR) satellite commenced service in the fourth quarter of 2005. 1.4 Internet services via telephone lines (dial up) The strength of CS LOXINFO is having nodes scattered across Thailand. This allows access to internet services anywhere where there are telephone lines. Ease of use is assured through
CS LOXINFO 31
monthly services for corporate clients or packages available at convenience stores nationwide. Purchase of internet hours via mobile phone or One-2-Call refill card is also available. 1.5 Value-added Services ë International Roaming: Services for customers who wish to use internet services in foreign countries ë My SMEs: Internet services via telephone lines (dial up) for corporate clients that have high level of internet and e-mail access and wish to manage their own internet hours ë Virtual Private Networks (VPN): Services for corporate customers who wish to intergrate their internal network cost-effectively and efficiently via the internet ë E-Mail Solution: Fully integrated e-mail services for corporate customers that do not wish to manage their own mail server ë Managed Services: Special services for corporate customers who require a team of experts (and do not wish to manage their own mail server) to give consultation and take care of their information technology system via the internet, including data security management services, e.g. check, protect and eliminate viruses, and spam mail filtering.
2. Internet Data Center or IDC Services A quality Internet Data Center that connects with a high-speed, gigabit sized level, fiber optics network to both international and domestic gateways under the control and management of a skilled engineers to assure customers of a continuous connection and the utmost security.
3. Television uplink/downlink services The Company provides television uplink/downlink services through satellites via the Thaicom Teleport and DTH Center, consisting of television services via satellites, live television signal services and both analog and digital recorded TV broadcasts.
Industry and Competition As the government is promoting liberalization, there are new service providers entering the business and thereby creating intense competition. Given our expertise in information technology management, CS LOXINFO is able to keep up its high standard in providing internet services at a higher level than its competitors. The key strengths of CS LOXINFO are: ë High-quality standards of internet service under the brand çCS LOXINFO,é one that is well regarded by individuals and corporate customers. ë Internet services nationwide that meet the demands of every customer group
ë Effective cost management of international bandwidth (international links) and inter-province bandwidth (upcountry links) so that given both corporate use during business hours and individual use during the night and holidays remain at optimal performance levels ë Strong strategic alliances with companies under the Shin Corporation Group to help upgrade service levels and distribution channels, e.g. co-marketing, purchase of internet hours via mobile phone or One-2-Call refill card, improve and network expansion, etc.
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Marketing Strategy The Company is committed to providing top-quality internet services in terms of access to technology, networks and after-sales service in order to increase use and the user base. Whereas the Company has no policy to compete on price, the key marketing strategies to be used are as follows: 1. Build a brand image as Thailand没s leading top-quality internet service provider The Company has positioned CS LOXINFO as a premium service, offering a wide range of products and services that respond to various needs by demonstrating the strength of each service, as well as delivering the highest quality, both before and after sales, up to their level of satisfaction. 2. Focus on improving quality and services The Company maintains a policy to manage international and domestic bandwidth, together with the number of telephone lines, to serve demand. The Company continuously improves the efficiency of its nationwide network to build confidence among customers by implementing ISO 9002 and a Balanced Score Card Management System that clearly defines performance indicators and measurement of its progress. 3. Maintain good relationships with customers The Company strives to create the highest customer satisfaction. The Company not only offers technical advice to its customers for the most efficient use of the internet, but also offers numerous payment channels for the convenience of every user, e.g. convenience stores, mobile phones, websites, etc. 4. Leverage technology to increase competitive advantage Satellite broadbrand via IPSTAR is being used to create a competitive advantage and to serve increasing ` demand across the country. 5. Continuously create new products and services The Company has developed a wide variety of internet services groups such as teenagers, office employees, shops and large corporations. Additionally, the Company offers new value-added services that enhance customer value, such as virus scan, spam mail filtering, backup system via satellite, etc. 6. Strengthen distribution network For customer convenience, the Company endeavors to expand its distribution channels by building good alliances, organizing joint marketing events, to support sales, with training on new techniques and services 7. Sales promotion Selected sales promotion events are aimed directly at each target group. Such promotions include an increase the number of internet hours for individual users. This helps retain the existing customers and at the same time stimulates higher usage time. The Company also cooperates with partners to expand the market or provide services to attract customers, by advertising though multi-channel media and organizing marketing events.
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Sales and distribution channels Internet services of the Company are sold through the following channels: 1. Company website www.csloxinfo.com: customers can purchase internet hours, apply for service, check usage time, check e-mail, etc. 2. Call Center: telephone 0 2263 8222 for 24 hours a day 3. Direct Sales: sales force advises corporate clients, especially customers using leased line internet services 4. Outlet stores: more than 4,000 outlet stores nationwide that sell internet packages for individual customers through IT centers, computer stores, convenience stores, bookstores, superstores, department stores, supermarkets, e.g. Seven Eleven, SE-ED, BIG C, Carrefour, Tesco Lotus and Watsonûs, in Bangkok and the provinces 5. Mobile Phone: via the mobile phone system of Advanced Info Service PLC. (AIS) by dialing *48181 and *4818999 6. Refill card: with One-2-Call, press *234 then follow the instructions from the mobile system
Business Opportunities In 2006, the Company plans to expand the following businesses: ë Managed Services: services that watch out for and protect against viruses, spam mail, etc., allowing customers to conveniently use the internet in a secure environment ë Fiber to Office: the Company has invested in a high-speed (Gigabit Ring) network in over 40 large buildings in Bangkok and provides internet connections for customers in those buildings ë IPSTAR Backup: for corporate clients that use leased line services and require a backup system when having problems ë IPSTAR Virtual Private Network (VPN): for corporations that have branches in provinces and require to receive/send data between branches
Future Projects The internet business is expected to continue growing at a fast pace, particularly with support from the government leading to more users each year. However, the price of internet connections decreases as a consequence of fierce competition and thereby affects the profits of the internet business, resulting in slow growth. The Company has invested in research and development to produce internet content, which will become in another source of revenue. In the year 2006, the Company intends to further expand its business, together with Teleinfo Media Plc., by developing a searchable information database and e-commerce service systems to accommodate the expected usage growth resulting from its business expansion.
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Teleinfo Media Public Company Limited Teleinfo Media Public Company Limited operates in the media service business through the Thailand YellowPages telephone directories as well as other printed directory services. Other information services include a list of telephone users, general information and infotainment via telephone enquiry.
Products and Services Thailand YellowPages is the countryûs largest source of information on products and services. Consumers are accustomed to accessory information through three forms: Flip Thailand YellowPages, or Call 1188 Thailand YellowPages, or Click online YellowPages www.yellowpages.co.th
Thailand YellowPages Integrated Transactional Media Thailand YellowPages is the largest source of information on products and services offered by over 3,000 business areas covering more than 600,000 stores. Easy to use, groups are sorted by Thai alphabetical ordering (Kor - Hor). Inside, it contains useful information on business and everyday life, making çnowé a lot more convenient. ...every opportunity every need achievable at your fingertips... Published in a simple format according to geographical location: Bangkok and Greater Bangkok issue Combines all districts into one book. Provincial issue Divided into five books for five regions i.e. North, Northeast, Central, East and South English issue Combines Bangkok and Greater Bangkok into one book
WhitePages Thailand Corporate Pages WhitePages Business Directories is the only WhitePages that gather names, addresses and telephone numbers of every business in Bangkok and Greater Bangkok. A list of over 600,000 stores is organized by company name and sorted in Thai alphabetical order (Kor - Hor). A directory of government agencies and state enterprises is listed separately for convenient searching... çjust know the name, weûll know the numberé
YellowPages@Home YellowPages@Home Transactional Media at Home is a manual for the modern home when searching for telephone numbers of stores and services in Bangkok and nearby provinces. It helps consumers to çcheck (information) before shop (ping)é. The book is divided into categories e.g. live well, have happiness, good food, fun travel and lifestyle. It is convenient and easy to search as needed. It also includes other useful information for consumers, tips and advice as well as a reference for lifestyle activities, like having a consultant at home.
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What to Buy, What to Find, Call... 1188 YellowPages 1188 YellowPages is a directory service call center for finding any of six million phone numbers of businesses, stores and people throughout Thailand. Users can find the telephone number of business contacts genaral information, restaurants, entertainment places or tourism sports. A team of professionals acts as a personal assistant with a 24-hour service. In addition to such services, 1188 YellowPages still has other valueadded services such as a ë Call transfer service to direct a call to any other required phone number...quick and no need to redial ë Text / SMS service... never miss a communication, even while driving
Click... www.yellowpages.co.th çOnline YellowPagesé Convenient from Around the World www.yellowpages.co.th is the website that has all sources of information including WhitePages with all business directories and Thailand YellowPages in both Thai and English. Convenient anywhere, anytime when the user needs to find something. Can be used from anywhere around the globe. Information on products and services in Thailand is searchable instantly at www.yellowpages.co.th.
Thailand Export-Import YellowPages (EXIM) Thailand Export-Import Yellow Pages is a manual for importers and exporters in book and CD-ROM from. Inside the book, there is not only a list of importers and exporters in Thailand, but also an overview analysis and trends for each industry, including articles about the export situation domestically and internationally. Published in English with a summary in Chinese, the content is divided into two sections: Section 1: Section 2:
A name list of importers and exporters in Thailand categorized into 13 industry groups e.g. agriculture, jewelry, auto parts, electrical appliances, etc. A name list of businesses that support international trade e.g. airlines, commercial banks, insurance companies, packaging, transportation, etc.
Thailand Export-Import YellowPages is available for free to companies in the import and export business, domestically and internationally, and is also widely available in leading book stores.
Visitorûs Guide to Thailand (VGT) - special edition bound with Thailand YellowPages Available in leading hotels nationwide. With support from the Tourism Authority of Thailand (TAT), this travel guidebook, gathers complete information about traveling in Thailand, including recommended places, interesting products and services, feature articles and information on travel and telephone numbers. The Visitorûs Guide to Thailand is published in English and Japanese in one book. The combined English edition with Thailand YellowPages is available in all leading hotels TAT public relations offices, all airports in Thailand, airline lounges, business centers and service centers for tourists in Bangkok and all leading book stores.
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Health, Spa & Beauty Guide, Quarterly Issues Health, Spa & Beauty Guide is a guidebook that collects all places for health, beauty center and 5-star accommodation in Bangkok. A handy, pocket-size book, it contains business information neatly organized in easy-to-understand content, good for tourists and foreigners who reside in Thailand. Health, Spa & Beauty Guide is available at 5-star serviced apartments, restaurants, spas and beauty salons, etc. It is also available in leading book stores throughout Thailand.
Station Buzz, Quarterly Issues Station Buzz is a handbook that collects information on five star businesses near 41 BTS and MRT stations, including a map for finding stores and services. It is handy, for tourists and foreigners who reside in Thailand. Station Buzz is available to service foreigners who stay in the finest serviced apartments in Bangkok and is also available in leading book stores nationwide.
TMC Multimedia TMC Multimedia is an innovative multimedia design service for integrated marketing communications. It is led by an experienced art team who understand marketing, with the skill to produce and create marketing activities through printed and electronic media. In this way, it reaches particular target groups more effectively. ë Graphic design e.g. creates artwork; produces printed media, annual reports, calendars, catalogs, brochures, leaflets, etc. ë Design of logo for products and corporations ë Photography of persons and products, indoors and outdoors ë Interactive, multimedia, presentation CDs, also CD-ROMs, Mini-CDs, CD-Cards, VCDs, DVDs for advertising, public relations and end-to-end marketing support ë Design and produce databases to use on CD-Rom
2Get2Load Audiotex (www.2Get2Load.com) 2Get Audiotex Service using the 1900 222 xxx teleohone service available 24/7 with a wide range of services ë ë ë ë ë
2Get Horoscope using several renowned fortunetellers 2Get Chat to search for new chat friends 2Get Game to play games 2Get Ringtone to download ringtones from RS. Promotion and others 2Get Entertain complete entertainment news updates
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Precision Marketing With the most accurate and largest database in Thailand, The company offers Precision Marketing to target customers in every business sector. This new marketing technique, ensures that the Company can verify target customersû groups. Precision Marketing is a service that helps make marketing investment more worthwhile. Such services consist of database rental and a list of selected target customers. There is also a database management service that is not only eliminates difficulties but also keeps up-to-date information. Another value-added service is called Outbound Call Center. This makes marketing activities attain the highest number of responses possible.
Outsource Call Center This Call Center service can take on short term or long term market activities, including telemarketing services, to increase distribution channels or to support customer relations.
Business Opportunities in the year 2006 As a result of globalization, people are becoming more alert to the use of internet services worldwide. There are huge numbers of users using the internet to search for information online. In this regard, The business of information search services or çSearch Enginesé and the business of buying/selling via the internet or çE-commerceé, have become invaluable. Following this trend, the Company plans to develop other types of online services, by examining the growth opportunities of advertising online.
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Related Party Transaction In 2004 and 2005, the Company and its subsidiaries entered into a number of transactions with related parties that may have conflicts of interest with the Company and its subsidiaries. These connected transactions arose in the ordinary course of doing business and according to normal trade conditions. Significant related transactions between the Company, its subsidiaries, and related companies are as follows:
Related Party Transactions that May Lead to Conflicts of Interest Summary of Transactions Transaction Description
Amount Dec 31, 2004 (Million Baht)
Shin Loxley Corporation Group Group Total sales and service income 59.05 22.09 Total other income 1.15 0.22 Total expenses 191.84 7.08 Total trade accounts receivable and others 70.96 11.31 Total trade accounts payable and others 71.92 2.97 Total others 105.96 -
Amount Dec 31, 2005 (Million Baht)
SingTel Group
Total
Shin Loxley Corporation Group Group 115.82 13.30 6.21 233.66 6.62
5.32 5.36
86.46 1.37 204.28
1.16
83.43
56.30
0.58 -
75.47 105.96
76.40 67.87
SingTel Group
Total
2.50
131.62
-
6.21
8.18
248.46
5.66
0.76
62.72
1.65 -
3.17 -
81.22 67.87
CS LOXINFO 39
SHIN CORPORATION GROUP Related Company
Relationship
Description
Amount (Million Baht)
Reasons
Dec 31, 2004 Dec 31, 2005
Shin Corporation Public Co.,Ltd. (SHIN)
The major in the Group and has shared directors
Holding company
Shin Satellite Plc. (SSA)
Telecommunication satellite service operator
- Sales and service income
0.68
0.81
- Expenses - Trade accounts receivable and others - Trade accounts payable and others
1.45 0.11
0.62 0.13
0.33
0.22
SHIN holds 52% shares in this company with shared directors
SHIN used the CompanyÝs business and provided treasury service to the Company with the service fee of 0.05% of the outstanding credit facilities. (Only bank guarantee was being used.) - Revenues from rental and Internet service fee charges - Management fee - Accounts receivable for rental and Internet service charges†- Accounts payable for management fee The Company rents transponders on Thaicom satellites, which is the only operator in Thailand.
- Sales and service income
25.40
17.37
- Other income
1.06
5.80
- Expenses
41.76
37.33
- Trade accounts receivable and others
55.70
29.42
- Trade accounts payable and others
37.90
56.17
- Revenues from uplink and Internet leased line service charges - Revenues from Broadband iP Transmission Commission - iPTV, iPSTAR technical service charges - Accounts receivable for the uplink and Internet leased line service charges - Accounts payable for iPSTAR, iPTV technical service charges
CS LOXINFO 40 Related Company Shin Broadband Internet (Thailand) Co., Ltd. (SBI)
Inter related ser provider; the website, server colocationshares in this
Relationship The major
Description
Amount (Million Baht)
Reasons
Dec 31, 2004 Dec 31, 2005
The major shareholder of the Company at 40.02%. SSA holds 99.99% - Sales and service income SSA shares in this company - Expenses -†Trade accounts receivable and others - Trade accounts payable and others
Advanced Info Service Plc. SHIN holds (AIS) 42.83% shares in this - Sales and service income company with shared directors Mobile phone operator - Expenses
- Trade accounts receivable and others - Trade accounts payable and others
1.20
1.16
3.15
1.20
2.51
1.33
3.53
0.23
24.80
74.85
2.76
2.76
11.86
17.62
1.09
0.12
The transactions were for the Company to provide server co-location service which the Company requires the location for data storage. - Revenues from monthly Internet service charges - Cost of server co-location service charges - Accounts receivable for Internet service charges - Accounts payable for server and domain name service charges The Company used mobile phone services from AIS. - Revenues from monthly Internet and web hosting service charges. - Commision for selling of Internet services on mobile phones. The commision was at 18% of the charges. - Mobile phone usage air time - Accounts receivable monthly Internet service charges - Commission payble to the selling of Internet service on mobile phones - Mobile phone usage air time
CS LOXINFO 41 Related Company
Relationship
Description
Amount (Million Baht)
Reasons
Dec 31, 2004 Dec 31, 2005
Advanced Data Network Communication Co., Ltd. (ADC)
AIS holds 51% shares in this company with shared directors
Telephone line rental for Internet connection service provider
- Sales and service income - Expenses
â€
SC Match Box Co.,Ltd. (SMB)
Advertising agency
- Trade accounts receivable and others - Trade accounts payable and others - Advance payment of Internet network rental charge Shin holds 99.99% shares in this company with shared director
0.51
9.66
88.40
111.69
0.04
6.33
15.52
17.69
105.96
67.87
We provide internet service, and charge for monthly fee. We use SMB as Advertising agency
- Sales and service income - Expenses - Trade accounts receivable and others - Trade accounts payable
0.90 31.20
1.12 67.84
0.09 6.76
0.18 1.31
The transactions were for the Company to rent and connect telephone lines, both in Bangkok and provincial areas for provisioning of Internet connection service. - Revenues from monthly Internet service charges - Telephone line and equipment rental fees for provision of Internet connection service - Accounts receivable for monthly Internet service charges - Accounts payable for telephone lines rental - Service charges on the internet network SMB is a company in the Group that we use it as our agent in having advertisement in various media for the customers to use our services. The fees were at the market rate. - Monthly Internel service charges - Advertising Expenses - Accounts Receivable for Internet service charges - Advertising Expenses
CS LOXINFO 42 Related Company
Relationship
Description
Amount (Million Baht)
Reasons
Dec 31, 2004 Dec 31, 2005
Other related companies
An affiliate of the SHIN Group with shared directors - Sales and service income
5.56
10.85
- Other income - Expenses
0.09 23.12
0.41 12.22
- Trade accounts receivable and others - Trade accounts payable and others
0.65
1.29
6.79
0.66
- Revenues from monthly Internet service charges - Other service charges - Expenses on computer programs, service charges and office rental - Accounts receivable for monthly Internet service charges - Account payable for computer programs, service charges and office rental
Loxley Group Related Company
Relationship
Description
Amount (Million Baht)
Reasons
Dec 31, 2004 Dec 31, 2005
Loxley Public Co., Ltd (Loxley)
Importer and Distributor of goods and tecnology products
Shared directors
The Company rented its office spaces at Sua Pha building together with its facilities. - Sales and service income
5.03
3.65
- Expenses
7.06
6.02
- Trade accounts receivable and others - Trade accounts payable and others
1.46
0.50
1.86
1.60
- Revenues from monthly Internet service charges - Space rental fees at Sua Pha building and facilities - Accounts receivable for monthly Internet service charges - Accounts payable for space rental and facilities
CS LOXINFO 43 Related Company
Relationship
Description
Amount (Million Baht)
Reasons
Dec 31, 2004 Dec 31, 2005
Point Asia Dot Com (Thailand) Co., Ltd.
Holding company
Loxley holds 78.62% shares in Loxbit and Loxbit holds 99.99% shares in PA with shared - Expenses directors - Trade accounts payable and others
Loxley Information Co., Ltd. PA holds 65% share in this company with shared directors Internet related service - Sales and service income provider; website and training center - Other income - Trade accounts receivable and others
NetOne Network Solution PA holds Co., Ltd. 100% shares in this company with shared directors Computer system service - Sales and service income provider - Trade accounts receivable and others - Trade accounts payable and others
A Company in group leases its telecommunication equipment to the Company.
-
0.60 0.05
- Office rental - Account payable for office rental The Company transacted about server rental and domain name registration services.
2.32
-
0.22 7.59
3.19
- Revenues from server rental and monthly Internet service charges - Other service charges - Accounts receivable for Server, rental and Internet service charges The Company rented the communication equipments and used its related services.
9.41
5.58
0.73
1.36
1.08
-
- Revenues from monthly Internet service charges - Accounts receivable for rental Internet service charges - Purchasing of computer equipments
CS LOXINFO 44 Related Company
Relationship
Description
Amount (Million Baht)
Reasons
Dec 31, 2004 Dec 31, 2005
Other related companies
An affiliate in the group with shared directors - Sales and service income
5.33
4.07
- Expenses - Trade accounts receivable and others - Trade accounts payable and others
0.02 1.53
0.61
0.03
-
- Revenues from monthly Internet service charges - Node rental - Accounts receivable for monthly Internet service charges - Node rental
Singapore Telecommunications Limited Group Related Company
Relationship
Description
Amount (Million Baht)
Reasons
Dec 31, 2004 Dec 31, 2005
Other related companies
SingTel own 13.45% of the Company没s share capital - Sales and service income
5.32
2.50
- Expenses - Trade accounts receivable and others - Trade accounts payable and others
5.36 1.16
8.18 0.76
0.58
3.17
- Revenues from Internet service charges - Cost of International Links - Accounts receivable for monthly Internet service charges - Accounts payable for International Link
CS LOXINFO 45
Management Discussion and Analysis Overview In 2005, sales and service income grew 13% and total annual dividend payment by Bath 0.45 per share
CS LoxInfo Plc., reported consolidated the operational income for the year 2005 of Baht 2,321 million, an increase of Baht 317 million or 16% from the same period last year, amounting to Baht 2,004 million. There was mainly from the full recognition of TMC performance by 100% of the revenue from its Thailand YellowPages business and its Voice Info Service from 3Q/2005 onwards. Regarding internet access services, the Company had an increase of revenue from leased lines for corporate customers and broadband services because the Company focus on the quality of its services and provide additional services. In addition, the Company paid out an interim dividend payment of Baht 0.12 per share (par value of Baht 1 per share) and a dividend for six-month operation ended December 31, 2005 for Baht 0.33 per share (par value of Baht 1 per share)
Operation Results The consolidated financial statement for the year ended December 2005 compared to the consolidated financial statement for the year ended December 2004. The Company reported consolidated net profit for the year 2005 of Baht 294 million, a decrease of Baht 34 million from the previous year. This resulted in earnings per share of Baht 0.47 per share. Also, the Company had operating profit of Baht 224 million, a decrease of Baht 90 million, or 29% from the year 2004, due to marketing and advertising expenses for market branding.
Selected financial information Description 2005
(Unit : Million Baht) 2004 Variance (%)
Sales and service income Cost of sales and service SG&A expenses Operating profit Net profit EPS (Baht)
1,982 1,065 603 314 328 0.55
2,249 1,260 765 224 294 0.47
13 18 27 (29) (10) (15)
CS LOXINFO 46
Sales and Service Income In 2005, the Company earned Baht 2,249 million in revenues, an increase of Baht 267 million, or 13%, over the year 2004, amounting to Baht 1,982 million. The main revenue of the Company was derived from leased lines, Internet access services via telephone lines and ADSL services. In addition, the Company had revenue from publishing the Thailand YellowPages and its Voice Info Service.
Revenue from leased lines services and broadband increase by 9% or 53%, respectively.
Revenue from publishing Yellow Pages and Voice Info Service increased Bath 301 million or 58% because of 100% recognition of TMC
1) Revenue from Internet Access The Company received revenue from internet access amounting to Baht 1,344 million, a decrease of Baht 28 million or 2%, over revenues of Baht 1,372 million in 2004 due to an increase of new product contribution not able to cover a decrease in original product contribution. However the revenue from leased line services and revenue from broadband services grew by 9% and 53%, respectively. Revenue from internet access via telephone lines (Dial Up) decreased by 33%. This was mainly from the changes in the internet technology and customer migration to the Company没s broadband internet service. The Company kept its customer base in leased line and broadband services by focusing on the quality of its services and the attraction of new customer target groups. 2) Revenue from Publishing Yellow Pages and Voice Info Service In 2005, the Company recognized 100% of revenue from the publishing of the Thailand YellowPages and its Voice Info Service. Revenue from TMC amounted to Baht 81million, an increase of Baht 301 million or 58% as compared to 2004, which recognized only 63.25%. Moreover, TMC has a new look Thailand YellowPages, compiled into one book (two volumes). Please see the revenue recognition policy of TMC in the Note to this Report. This aims to fulfill customer没s needs when searching for products and services. In addition, the Company offered the services of 1188, using a call enquiry service to search for the phone number of any company, shop or individual in Thailand, and the 1900-222-xxx services, which promote 24-hour information and entertainment via the phone. At the end of 2005, TMC offered new services, such as YellowPages@Home, Station Buzz and Health, Spa & Beauty Publications.
Cost of sales and services In 2005, the Company had total cost of Baht 1,260 million, an increase of Baht 195 million, up 18% from the same period last year, amounting to Baht 1,065 million. This was mainly due to the following:
CS LOXINFO 47
In 2005, cost of sales and services increased Bath 195 million or 18% due to an increase of cost of internet services and recognition of cost of publishing the Yellow Pages and Voice Info Service by 100%
1) Cost of Internet services In 2005, cost associated with internet services was Baht 950 million, increasing Baht 81 million or 9% over the same period last year amounting to Baht 869 million due to an increase in the cost of the international links in order to improve speed and to serve additional customer capacity requirements. Furthermore, the cost of leased lines was relative to the increase in revenue from leased lines. In addition, there were additional charges for increasing the number of broadband customers in order to improve links for internet access. 2) Cost of Publishing the Yellow Pages and Operating a Voice Info Service In 2005, the Company recognized costs from the Yellow Pages and Voice Info Service amounting to Baht 285 million, an increase of Baht 129 million or 83%, compared to 2004, amounting to Baht 156 million. This was mainly from the 100% recognition of TMCûs performance in the last six months of the year and 63.25% of the first six-month performance of TMC, as the result of the additional acquisition of 36.75% of TMC in June 2005. However, the Company recognized 63.25% only of TMC performance in 2004. (Please see the cost recognition policy of TMC in the Note to this Report)
Selling and Administrative Expenses Selling and administrative expenses increased Bath 162 mil ion or 27% because of marketing and advertising activity expenses, 100% recognition of selling and administrative expenses of publishing the Yellow Pages and Voice Info Service and goodwill amortization of the year ended 2005 totaling Bath 64.56 million
The Company had total selling and administrative expenses in the year 2005 of Baht 765 million, an increase of Baht 162 million or 27% from the same period last year, amounting to Baht 603 million. This was due to the following: 1) Selling and administrative expenses of Internet services Selling and administrative expenses of internet services in the year 2005 was Baht 417 million, an increase of Baht 24 million, or 6% from the previous year, amounting to Baht 393 million. This was due to the continuous increase of marketing and advertising activity expenses, e.g., TV (çVirus Gangé) and newspaper advertising and exhibition booths around Thailand for market branding. Marketing aimed to retain old customers and add new customers, with competitive rates and alliances for new services and to attract new customer target groups. 2) Selling and Administrative Expenses of the Yellow Pages and Voice Info Service The Company recognized selling and administrative expenses of publishing the Yellow Pages in 2005 of Baht 348 million, an increase of Baht 127 million or 57% over the year ended 2004 totaling Baht 221 million. This was due to the additional acquisition of TMC, in June 2005. The main expenses of TMC came from marketing activities and advertisements through various media to promote the Yellow Pages, e.g., TV (çHeroé) for market branding.
CS LOXINFO 48
In addition, the Company also recorded goodwill from the acquisition of TMC totaling Baht 64.56 million as compared to the year ended 2004 amounting to Baht 45.31 million
Gross Profit and Net Profit Gross Profit increased 8% due to recognition of 100% of TMC没s performance
The Company had the gross profit and net profit amounting to Baht 989 million and Baht 294 million respectively, an increased of 8% and a decrease of 10% as compared to the year ended 2004 presenting Baht 917 million and Baht 328 million, respectively. This was mainly of an increase of gross profit due to 100% recognition of TMC没s performance and revenues from leased line and broadband services. However, the decrease of net profit was derived from the amortization of goodwill and the marketing activity and advertisements for market branding.
Financial Position At the end of the year 2005, the Company had total assets of Baht 2,815 million, an increase of Baht 254 million or 10% from the end of last year when total assets stood at Baht 2,561 million. Details are given below. The major asset components comprise the following:
Assets Cash and cash equivalents Current assets PP&E, net Goodwill, net Total assets Trade accounts payable Provision from acquisition of investment
31 December 2005 31 December 2004 Amount % of total Amount % of total (Million Baht) Assets/ (Million Baht) Assets/ Liabilities Liabilities 774 27 1,018 40 1,472 52 1,650 64 398 14 318 13 831 29 458 18 2,815 100 2,561 100 351 41 221 33 115
13
-
-
At the end of the year 2005, current assets amounted to Baht 1,472 million, a decrease of Baht 178 million or 11%. The decrease of current assets came largely from a decrease in cash and cash equivalents and inventories. The cash and cash equivalents decreased by Baht 244 million or 24% because of the acquisition of TMC common shares in 2Q/2005 in amounting to Baht 510 million. This was mainly from an increase of inventoryamounting to Baht 87 million because it mainly comprised the imported paper, which is used for printing the Yellow Pages.
CS LOXINFO 49
PP&E, net, amounted to Baht 398 million, an increase of Baht 80 million or 25% because the assets under construction of Baht 57 million represented an increase of Baht 30 million from the previous year. Furthermore, the Company had Baht 831million in net goodwill, an increase of Baht 373 million from the end of the last year 2004 due to the acquisition of Teleinfo Media Public Company Limited in June 2005. Goodwill amounted to Baht 438 million, using the straight-line amortization method in accordance with its useful life over a period not exceed ing 11 years.
Liabilities and Shareholderรปs Equity At the end of the year 2005, the Company had total liabilities of Baht 854 million, an increase of Baht 192 million or 29% from the end of the last year when total liabilities stood at Baht 662 million. The increase came largely from current liabilities that increased by Baht 75 million from 2004 because the Company had an increase in the acquisition of equipment and intangible assets for IPSTAR services through debt of Baht 33 million. In addition, the increase of non-current liabilities was derived from the acquisition of TMC shares from TOT Public Company Limited; the Company will pay Baht 115 million. Shareholderรปs Equity : In 2005, the Company had shareholdersรป equity of Baht 1,962 million, an increase of Baht 63 or 3%, because the Company had an increase in retained earnings (unappropriated) and legal reserve of Baht 48 million and Baht 15 million, respec tively.
Asset Quality Accounts Receivable As at 31 December 2005, the Companyรปs trade accounts receivable and accrued income, net, amounted to Baht 304 million, equivalent to 11% of total assets. The trade accounts receivable comprised of third parties and related parties, represented 84% and 16% of total trade accounts receivable, respectively. Trade Accounts receivable-third parties: The Companyรปs policy of providing credit to customers is divided into two types, as follows: 1) Revenue from Internet Access Trade accounts receivable-third parties consist of the two types of customers: 1.1) Individual customers equal to 24% of total trade accounts receivable provided with a credit term of 30 days and average collection periods of 26 days, decreasing from 31 days in 2004. 1.2) Corporate customers and government agencies equal to 76% of total trade accounts receivable provided with a credit term of 30-90 days and average collection periods of 40 days, decreasing from 42 days in 2004.
CS LOXINFO 50
2) Revenue from publishing the Thailand YellowPages Average collection period - third parties have an average collection period of 85 days. The Company没s credit term policies are: - Advertising accounts receivable - less than Baht 35,000 is paid in full or within 30 days. - Advertising accounts receivable - more than Baht 35,000 is paid in full or 4 - 12 installments. Trade Account receivable - third parties as of December 31, 2005 Overdue period Unit : Million Baht Not yet due 74.66 Less than 90 days 56.64 91 - 180 days 69.84 181- 360 days 68.30 Over 360 days 60.41 Total trade accounts receivable - third parties 329.85 Less allowances for doubtful accounts (86.22) Net trade accounts receivable - third parties 243.63
(%) 22.64% 17.17% 21.17% 20.71% 18.31% 100.00% 26.14% 73.86%
Based on the table above, the Company had the net trade accounts receivable from third parties of Baht 244 million. In addition, the Company had an allowance for doubtful accounts of Baht 86 million or 26% of total trade accounts receivable. The allowance covered the trade accounts receivable over 360 days, which stands at Baht 60.41 million as of 31 December 2005.
Liquidity In 2005, the Company没s current ratio and quick liquidity ratio were 2.01 times and 1.47 times, decreasing from 2004 by 2.52 times and 2.15 times, respectively. The decrease came largely from a decrease in cash and cash equivalents of Baht 510 million due to the acquisition of TMC common shares and dividend payment totaling Baht 231 million. The Company没s cash flows from operations amounted to Baht 530 million, an increase of 19% from last year. However, the Company没s cash flow from investing and cash flows from financing activities was Baht 544 million and Baht 232 million, respectively. This was mainly from the acquisition of TMC common shares of Baht 510 million, additional projects called 1188 & 1900-xxx-xxx, belonging to TMC and dividend payment totaling Baht 232 million.
CS LOXINFO 51
Note: Revenue and Cost Recognition Policy of TMC 1. Revenue Recognition TMC没s main revenue came from the sale of advertising space in the Thailand YellowPages. According to General Accepted Accounting Principles (GAAP), TMC recognized revenue of Yellow Pages by the straight-line method, starting from the month the Thailand YellowPages was issued in the current year to the month it will be issued next year. For the example, the Yellow Pages of 2004 was issued in June 2004, so TMC recognized revenue from the Yellow Pages of 2004 from June 2004 to February 2005 by the straight-line method. In addition, the Yellow Pages of 2005 was issued in March 2005, so TMC expects to recognize revenue from the Thailand YellowPages in 2005 from March 2005 to December 2005 by the straight-line method. For the Yellow Pages of 2006, TMC plans to commence in January 2006. 2. Cost Recognition The costs of TMC are mainly derived from direct variable costs, such as the cost of paper used for printing the Thailand YellowPages. This cost was recognized by the same method of revenue recognition as mentioned above. Fixed costs are recognized when they occur.
CS LOXINFO 52
Corporate Governance and Management Structure Corporate Governance Policy The Company believes that a good management system, a visionary and responsible Board of Directors and Executives, internal control and a balance of power that consequently promotes transparent and auditable operations, the respect for all shareholders没 rights and equitable treatment, and accountability to stakeholders, are essential factors in maximizing long term stakeholders没 wealth. Therefore, the Board has established a Good Corporate Governance Policy that covers five areas. 1. Board of Directors (the Board) 2. The rights and equitable treatment of Shareholders and the Roles of Stakeholders 3. Information Disclosure and Transparency 4. Internal Control and Risk Management 5. Corporate Philosophy and Code of Conduct
Chapter 1 Board of Directors 1. Leadership and Vision The Board determines CS LoxInfo Public Company Limited, a company in the Shin Corporation Group, to be a Thai leading company with an international perspective of being and the most successful ISP in Thailand, having a variety of business with high-technology, strong management, and capable staff who are being involved in the development of its vision, mission and strategy. The Board members have leadership, vision, independence in making decisions, and are responsible in governing the company for the greatest benefit to its stakeholders. The Board have duties and responsibilities toward the shareholders in monitoring Executives没 performance. Segregation of duties between the Board and the Executives are clearly defined.
2. Composition of the Board of Directors, Appointment, and Independence The Board consists of nine qualified and experienced directors in various fields, i.e., telecommunications, accounting and finance. Five are representatives of three major shareholders. There are three independent directors. One is from legal background; two are from an accounting & financial background, who accounted for one third of the Board. One is a representative of CAT Telecom Plc. on behalf of its concession holder. The members of the Board of the Company are:
CS LOXINFO 53
Name 1. Mr. Boonklee Plangsiri 2. Mr. Prathueng Srirodbang 3. Mr. Gan Hui Beng 4. Mr. Sillapaporn Srijunpetch (Ph.D.) 1) 5. Mr. Viroj Tocharoenvanith 2) 6. Mr. Dumrong Kasemset (Ph.D.) 7. Mrs. Siripen Sitasuwan 8. Mr. Mark Chong Chin Kok 9. Mr. Vasant Chatikavanij 10. Mr. Kajornsak Singhaseni 2) 11. Mrs. Saowanee Sitchawat (Ph.D.) 1) 1)
2)
Position Chairman of the Board / representative of major shareholder Independent Director Independent Director Independent Director Director / representative of CAT Telecom Plc. Director / representative of major shareholder Director / representative of major shareholder Director / representative of major shareholder Director / representative of major shareholder Director / representative of CAT Telecom Plc. Independent Director
Mr.Sillapaporn Srijunpetch (Ph.D.) was appointed to be an Independent Director to replace Mrs. Saowanee Sitchawat (Ph.D.), who resigned from the directorship on 7 November, 2005 when her term expired. Mr.Viroj Tocharoenvanith has assumed a Director position to replace Mr. Kajornsak Singhaseni, who resigned from the directorship on 17 February 2005.
Secretary to the Board: Mr. Kamonmit Vudhijumnonk (Details of which are shown in Page 73)†The Authorized Directors Mr. Boonklee Plangsiri or Mr. Dumrong Kasemset (Ph.D.) or Mrs. Siripen Sitasuwan, cosign with Mr. Vasant Chatikavanij or Mr. Viroj Tocharoenvanith or Mr. Mark Chong Chin Kok on behalf of the Company together with the Company seal.
Directors Nomination Process and the Appointment The Company has determined a framework and guidelines for the appointment of the directors and the nomination process as follows: 1. In every annual general shareholders meeting, one third of the directors shall resign from the position. In case the number of the directors cannot be divided into three parts, the closest to one third of the directors shall resign from the position. In the first and second year after the Company is listed on The Stock Exchange of Thailand, the director who are required to resign shall apply the method of drawing a lots to determine the one who shall resign. In the subsequent years, the longest serving directors shall resign according to this scheme and may be re-elected to resume the position. 2. In case the office of director is vacant due to reasons other than such rotation scheme, the Board shall elect a person who has qualifications and no prohibited characteristics in accordance with Clause 68 of the Public Company Act B.E. 2535 to replace the director in the next meeting. Unless the remaining tenure of the director vacating office is less than two months, a director who has been elected as a replacement shall retain this position only up to the remaining tenure of such preceding director.
CS LOXINFO 54
However, the Board has appointed a Nomination Committee to consider setting standards and policies for nominating a qualified persons to propose such names to be a director where the office is vacant. As stipulated in the Companyûs Articles of Association, the shareholders meetings shall elect directors under the following rules and procedures: 1. Each shareholders has votes equivalent to the number of shares being held. 2. Each shareholder may use all votes set forth in (1) to elect one or more directors. In the case of electing a number of directors, those votes may not be divided in any proportion for any particular director. 3. Those who receive the highest respective votes shall be elected equal to those to be elected at such meeting. In the case of a tie vote, which would result in the number of directors being greater than that permitted, the presiding chairman shall have a casting vote. Nonetheless, the Company has not determined the maximum times a director can be re-elected, or the age of the director, but will take into consideration the capability of the director in performing duties as an important factor.
3. Chairman of the Board and Chairman of the Executive Committee The Company has a policy that the Chairman of the Board and the Chairman of the Executive Committee shall be capable, have appropriate experience and qualifications. They shall not be the same persons in order to balance the power between direction and management functions. The responsibilities of Chairman of the Board and the Chairman of the Executive Committee are specified as follows: ë Chairman of the Board is the non - executive director, has responsibility as the leader of the directors in directing and monitoring the performance of the Executive Committee in achieving its objectives according to the action plan. He is also responsible to chair the Board meeting and the Shareholders meeting. ë Chairman of the Executive Committee takes responsibility as the leader of the executives of the Company, as well as reporting to the Board in management to achieving the plans.
4. Qualifications of the Board of Directors and Definition of the Independent Director Qualifications of the Board of Directors Director of the company have qualifications and characteristics as specified under the relevant laws. They have knowledge, capability, ethics in running the businesses, and sufficient time to devote his/her knowledge and capability in performing duties to the Company. The nomination process of the Nomination Committee is transparent and clear. The educational background and experiences of an appropriate person to be nominated as the director was thoroughly considered for the benefit of decision making of the Board and shareholders. Most of the Companyûs directors have attended training classes, e.g., DAP, DCP, in order to have a thorough understanding about the roles and duties of directors. The Company has also distributed the company profile and the Director Handbook to the directors, especially newly appointed ones, to provide them information, knowledge and understanding about the Companyûs business. Moreover, the directors of the Companyûs directors are able to retain any directorships in other companies but such action should not hamper his/her performance in being the Companyûs director.
CS LOXINFO 55
Independence and Definition of Independent Director An independent director means a director who has full qualifications and independency in accordance with the SETûs guidelines as follow: 1. Being a director who holds shares not more than 5% of paid-up capital of the Company, affiliated company(ies), associated company(ies), related company(ies). The shares held by his/her related person(s) shall be included. 2. Being a director who does not take part in the management of the Company, affiliated company(ies), associated company(ies), related company(ies) or majority shareholder(s) of the Company, and is not an employee, staff member, or advisor who receives a regular salary from the Company, affiliated company(ies), associated company(ies), related company(ies), or majority shareholder of the Company 3. Being a director who has no benefits or interests, directly or indirectly, in terms of financial and management of the Company, affiliated company(ies), associated company(ies), or majority shareholder(s) of the Company and shall have no benefits or interests in such manner for a period of 1 year prior to the appointment as a director except the Companyûs Board of Directors has carefully considered and opined that those benefits or interests have no impact on performing duties and giving independent opinion 4. Being a director who is not a related person or close relative of any management member or majority shareholder(s) of the Company 5. Being a director who is not being appointed as a representative to safeguard the interests of the Companyûs directors, majority shareholder(s) or shareholders who relate to majority shareholder(s) of the Company 6. Being a director who is able to perform duties, give opinion or report the result of What being assingned by the Board with no pressure of circumstance control of the management, majority shareholder(s) of the Company their related person or close relatives.
5. Authorities, Scope of Duties and Responsibilities of the Board The major authorities, duties and responsibilities of the Board are as follow : ë To manage the Company in being Compliance with the laws, the objectives, the Articles of Association of the Company, and the resolutions of the shareholdersû meeting, in good faith and with honesty and care to preserve the interests of the Company ë To set targets, concepts, policies, project plans, and budgets of the Company, to oversee and superintend the administration and management of the Executive Committee for them to be in accordance with the policies assigned, except for the following matters in which the Board shall have to receive resolution from a shareholdersû meeting prior to performing such actions, i.e., - matters that the law requires to have a resolution from the shareholdersû meeting, namely a capital increase, capital reduction, issuance of debentures, sale or transfer either in whole or in material parts of the business of the Company to other persons, purchase or acceptance of transfer of business of other companies by the Company, or the amendment of the Memorandum or Articles of Association of the Company, etc;
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- transactions in which the director has interests, or transactions that are subject to the requirements of the law and the regulations of the Stock Exchange of Thailand where a resolution of a shareholdersû meeting is required ë To approve major transactions such as new investment and asset acquisition or disposition and other transactions specified by the law. ë The Board may, as it deems appropriate, appoint or delegate any power to any other persons to conduct the Companyûs business subject to the control of and within the time as may be specified by the Board, whereby such appointment or delegation of power may, at anytime, be canceled, revoked, withdrawn or amended Provided that the said appointment or delegation of power shall not be made in the manner that the Board or the person appointed or delegated then be able to approve any transaction to be entered into between the Board, the person appointed or delegated by the Board, or any person who may have conflicts of interest or any other benefits (as stipulated by the Office of the Securities and Exchange Commission) and the Company or the Companyûs subsidiaries, unless the approval for such transactions is in compliance with the policy and rules already approved by the Board ë To approve or agree to related transactions between the Company and its subsidiaries in compliance with the relevant notifications, regulations and guideline of the Stock Exchange of Thailand
6. The Sub-committees The Companyûs Board of Directors has appointed 4 Sub-committees to conduct a detailed study, examine and relieve the directorsû work to a certain extent. 6.1 Audit Committee 6.2 Remuneration Committee 6.3 Nomination Committee 6.4 Executive Committee Those four Sub-committees have clearly set up a policy and framework about their duties and responsibilities, including some guidelines for meeting and reporting to the directors. 6.1 Audit Committee Name 1. Mr. Prathueng Srirodbang 2. Mrs. Saowanee Sitchawat (Ph.D.) 1) 3. Mr. Gan Hui Beng 4. Mr. Sillapaporn Srijunpetch (Ph.D.) 1) 1)
Position Chairman of the Audit Committee and Independent Director Member of the Audit Committee and Independent Director Member of the Audit Committee and Independent Director Member of the Audit Committee and Independent Director
Mrs. Saowanee Sitchawat (Ph.D.) resigned as Independent Director and member of Audit Committee, effective from 7 November 2005 because of the expiry of her term. Following this the Board appointed Mr. Sillapaporn Srijunpetch (Ph.D.) to fill this position on 10 November 2005.
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The Audit Committee comprises of two members i.e. Mr. Gan Hui Beng and Mr.Sillapaporn Srijunpetch (Ph.D.) with accounting and finance knowledge and one member i.e. Mr. Prathueng Srirodbang, with legal knowledge. Nonetheless, every member has qualifications and independency as specified under the notification of The Stock Exchange of Thailand concerning Qualifications and Scope of Duties of the Audit Committee and the Definition of the Independent Director. The Audit Committee has set a two-years term for a directorship position and those completing the term of directorship can be re-elected no more than two consecutive terms. The authorized duties of the Audit Committee have been reviewed and adjusted based on the annual performance evaluation for the year 2004 and obtained approval from the Board of Director in the Board of Directorsû Meeting No. 3/2005 on March 23, 2005 as follows. ë To carry out a review of the Companyûs financial statements with the management and the external auditors to ensure that the statements fairly present the financial position of the Company and that they are prepared in accordance with generally accepted accounting principles ë To advise the Board about the changes of the Companyûs accounting policies and financial mandates ë To ensure that the Company has appropriate and efficient internal control and internal audit systems ë To carry out a review to ensure that the Company operates in compliance with the Securities and Exchange Acts, the regulations of the Stock Exchange of Thailand and any other relevant laws ë a) To consider, select and propose the appointment and audit fees of the Companyûs external auditor to the Board, as well as approve its audit plan and meet privately with the external auditor at least once a year b) To review policies for the approval of non-audit services and make recommendations ë To carry out reviews of the risk management system of the Company ë To review and provide opinions on materially connected transactions for compliance and conflictof-interests, as well as accurate and complete disclosure ë To review and give opinions on the performance of Internal Audit Office and coordinate work with the Companyûs external auditors ë To ensure all necessary assistance and cooperation required by the external and internal auditors are provided by the management ë To prepare an annual Audit Committee activitiesû report which must be signed by the Chairman of the Audit Committee and disclosed in the Companyûs annual report ë To consider and appraise the annual performance of the Chief of the Internal Audit Office ë To consider and approve the Internal Audit Charter, annual internal audit plan, budget and manpower of the Internal Audit Office and the adequacy of the internal audit function ë To report Audit Committee activities to the Board of Directors at least four times a year ë To review the scope of duties, responsibilities, and to conduct Audit Committee performance self-assessment on the yearly basis ë To have full access to and the cooperation of management ë To have the power to invite members of the management, officers and employees of the Company or external parties to give statements, to attend a meeting and to deliver necessary documents
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ë To have direct access to the external auditors in the investigation of any matter within its terms of reference ë To have the power to engage consultant(s) or independent person(s) to provide opinion or advice if necessary, in accordance with the Companyûs regulations, and expense (with no budget provided) under the approval authority of the Managing Director ë To carry out other works designated by the Board of Directors and agreed to by the Audit Committee The Audit Committee has assessed its ability to perform duties whether they are in compliance with the Audit Committeeûs Charter by conducting an annual performance evaluation for the year 2005 and then reported the results to the Board of Directors in the Board of Directorsû Meeting No. 2/2006 on February 24, 2006. 6.2 Remuneration Committee Name Position 1. Mr. Dumrong Kasemset (Ph.D.) Chairman of the Remuneration Committee 2. Mr. Vasant Chatikavanij Member of the Remuneration Committee 3. Mr. Gan Hui Beng Member of the Remuneration Committee / Independent Director 4. Mr. Mark Chong Chin Kok Member of the Remuneration Committee The Remuneration Committeeûs scope of work and responsibilities are: ë To appropriately determine necessary remuneration, both monetary and non-monetary, annually in order to be incentives and retain the Board, Sub-Committees and senior executives of the Company. ë To prepare policies and criteria to determine remuneration of the Board and senior executives for approval by the Shareholdersû Meeting, and/or the Board, depending on the case. ë Report to the Board, and be responsible for providing explanations and clarifications about remuneration of the Board and senior executives in Shareholdersû Meeting. ë To report the remuneration policies, rationale, and objectives, as well as to make a disclosure in the annual report. ë Others, as assigned by the Board. 6.3 Nomination Committee Name 1. Mr. Prathueng Srirodbang 2. Mr. Dumrong Kasemset (Ph.D) 3. Mr. Mark Chong Chin Kok
Position Chairman of the Nomination Committee / Independent Director Member of the Nomination Committee Member of the Nomination Committee
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The Sub-Committeeûs scope of work and responsibilities are: ë To determine policies and criteria for nominating the Board and Sub-Committees of the Company. ë To nominate directors by considering suitable persons for approval by the Board, and/or Shareholdersû Meeting, depending on the case. ë To consider suitable persons to be nominated as Chairman of the Executive Committee, if there is a vacancy, as well as to determine criteria for succeeding the senior executives. ë Others, as assigned by the Board. 6.4 Executive Committee Name 1. Mr. Dumrong Kasemset (Ph.D.) 2. Mrs. Siripen Sitasuwan 3. Mr. Vasant Chatikavanij 4. Mr. Mark Chong Chin Kok 5. Mr. Somprasong Boonyachai
Position Chairman of the Executive Committee Member of the Executive Committee Member of the Executive Committee Member of the Executive Committee Member of the Executive Committee
The Executive Committee consists of the Executive Chairman of Satellite and International Business, the President of the Group of Companies, and suitable persons as approved by the Board. The Board has assigned and delegated the following duties, responsibilities and authority to the Executive Committee: ë To determine the policies, directions, strategies and core management structure for business operations in line with economic and competitive conditions that have been defined and declared to Shareholders, for approval by the Board. ë To determine the business plans, budgets, and working authority limits of the Company for approval by the Board. ë To monitor efficient policy implementation and operating procedures according to favorable business conditions. ë To monitor the Companyûs operating performance to be in line with the approved business plan. ë To consider any material investment projects. ë Having authority to approve financial transactions of not higher than 400 million baht. In the case of financial banking transactions, for example, deposits, lending, hedging instruments on foreign exchange and interest rates, the transaction value and details require the Boardûs approval. The Executive Directors may delegate power to an executive or individual to carry out or acknowledge a business according to the discretion of the Executive Committee.
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ë The approval of the Executive Committee or the delegates shall not be for connected transaction(s) or where the Committee may have a conflict of interest according to the Articles of Association of the Company or that defined by regulatory bodies. ë Others, as assigned by the Board.
Management Team As of December 31, 2005 the Companyûs Management comprised the following six people : Name 1. Mr. Dumrong Kasemset (Ph.D.) 2. Mr. Anant Kaewruamvongs 3. Mr. Anuwat Sanguansappayakorn 4. Mrs. Aksara Assavapokee 5. Mr. Porames Kruethong
Position Chairman of the Executive Committee Managing Director Chief Finance Officer Senior Director of Finance & Accounting Department (Acting) Senior Director of Technical & Operation Department and (Acting) Director of Sales Division 6. Mr. Somchai Kittichaikoolkit (Ph.D.) (Acting) Senior Director of Information System Department
Scope of Responsibilities of Managing Director The Managing Director will work according to the responsibilities given by the Board of Directors, which must follow the rules and regulations of the Company. In regard to the performance of the Managing Director, there shall be no conflict of interest, as defined by the Securities and Exchange Commission of Thailand, regarding the Company or its subsidiaries, except in the case of related transactions where no approval is required from a shareholdersû meeting, as announced by the Stock Exchange of Thailandûs rules and regulations regarding the disclosure of related transactions.
Managing Directorûs Authority to Approve Financial Transactions The Managing Director has the authority to permit capital expense of not more than 10 million. Regarding the normal conduct of business, such as contracts, purchase of raw materials, or business expenses, the Managing Director is authorized to approve not more than Baht 5 million.
7. Directors and Managements Remuneration The Company has a policy to remunerate management at a rate meeting the industry standard, sufficiently to retain such management. This remuneration is appropriate to their performance and the performance of the Company. The Remuneration Committee is responsible for deciding the compensation of directors and management, in terms of monetary or non-monetary compensation, with the permission of shareholders at the annual general meeting of shareholders. The Company has a policy to remunerate only the directors who are independent. The directors who also hold a management position will receive compensation only as management. The remuneration for each management director will be linked to the performance of the Company and that director. In addition, the
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Company issued and offered warrants for purchase of the Companyûs common shares to management and employees under the Employee Stock Ownership Plan (ESOP). Its main objective is to attract and retain them with the firm. In 2005, the Company paid the following remuneration:
1. Monetary Remunerations ë Total remuneration for the Companyûs Board of Directors as of 31 December 2005 comprises meeting allowance and bonus totaling 2.015 million Baht for a total of six directors. The details are given below (such remuneration excludes that of the director who also holds an executive management position and that of the director who is a representative from a major shareholder): Name 1. Mr. Kajornsak Singhaseni 1) 2. Mr. Viroj Tocharoenvanith 1) 3. Mr. Prathueng Srirodbang 4. Mrs. Saowanee Sitchawat (Ph.D.) 2) 5. Mr. Gan Hui Beng 6. Mr. Sillapaporn Srijunpetch (Ph.D.) 2)
Position Amount (Million Baht) Director / representative of 0.100 CAT Telecom Plc. Director 0.225 Independent Director and 0.615 Chairman of the Audit Committee Independent Director and 0.500 Member of the Audit Committee Independent Director and 0.575 Member of the Audit Committee Independent Director and Member of the Audit Committee
1)
Mr. Viroj Tocharoenvanith has assumed a Director position to replace Mr. Kajornsak Singhaseni, who resigned from the position on 17 February 2005
2)
Mrs. Saowanee Sitchawat (Ph.D.) resigned on 7 November 2005 and Mr.Sillapaporn Srijunpetch (Ph.D.) as Independent Director and member of the Audit Committee, effective replaced her as a director on 10 November 2005.
ë Remuniration of the executives for the year ended December 31,2005 consisted of salary, bonus, provident fund, and other benefits of six members of the executive committee and the management of the company, totaling of 9.95 millon Baht. (Not including the Chairman of executive committee who received remuniration from Shin Corp., the indirect shareholder of the Company)
2. Other Remuneration The Company issued and offered warrants to purchase the Companyûs ordinary shares to its directors and employees with the objective of motivating and rewarding past performance and thereby benefit the Company in the long term. Under a continuous program, the Company will issue and offer such warrants continually for a five-year period, subject to shareholdersû approval each year. At the end of 2005, the Company has already completed three phases. Details are as follows:
CS LOXINFO 62 Descriptions Offering Size Offering Price Warrant Term Exercise Ratio*
Program 1 3,096,300 units Bt 0
Program 2 2,885,900 units Bt 0
Program 3 8,559,100 units Bt 0
Not more than 5 years from the Issuance and Subscription Date 1 unit of warrant per common share 1:1.03515
1 unit of warrant per common share 1:1.01643
Exercise Price* Issuance and Subscription Date
Bt 8.694 per share 14 May 2004
Bt 8.975 per share 16 May 2005
Bt 6.818 per share 31 May 2005
The directors of the Company and its subsidiaries and management who received more than 5% of the program
No. of Warrants allocated (Units)
% of No. of Warrants issued
No. of Warrants allocated (Units)
% of No. of Warrants issued
No. of Warrants allocated (Units)
% of No. of Warrants issued
1. Mr. Anant Kaewruamvongs 1,000,000 2. Mr. Anuwat Sanguansappayakorn 3. Mrs. Aksara Assavapokee 174,200 4. Mr. Somchai Kittichaikoolkit (Ph.D.) 550,000 5. Mr. Somchai Sinjananurux 6. Mr. Surachart Kugasemrat -
32.30 5.63 17.76
704,600 162,200 278,100 426,400
24.42 5.62 9.64 14.78
966,400 350,000 572,700 250,000
11.29 4.09 6.69 2.92
-
-
-
771,700 753,300
9.02 8.80
* The Company has adjusted the rights warrant as a result of a dividend payment at a rate of more than 50% of net income after corporate income tax under the , conditions specified in the prospectus by adjusting both the exercise ratio and exercise price as of 18 August 2005.
8. Meetings of the Board of Directors The Company没s Board of Directors schedules six meetings per year. The meeting dates for the entire period are determined in advance. Special meetings can be held as necessary. When organizing the Board of Directors没 meetings, the Chairman of the Board and Chairman of the Executive Committee will handle the agenda items. The Secretary to the Board will send an invitation letter along with the meeting agenda and other details to the directors no less than seven days prior to the meeting date in order to provide them with sufficient time to digest information. Normally, each meeting would take about three hours. The meeting is chaired by the Chairman of the Board, who has responsibilities to oversee the meeting process and allocate each is agendum, especially important agendum, with adequate time for the directors to deliberate and express their opinions taking into consideration the benefit of its shareholders and stakeholders on a fair basis. The relevant management will also have an opportunity to present information, particularly on major discussion issues. If in any important meeting item a director is a connected person with a potential conflict of interest, such director shall not be present in the meeting for that agenda item. The Secretary to the Board of Directors performs a duty in recording and preparing the minutes of the meeting within 14 days after the meeting, while at the same time safekeeping such minutes as well as any supplementary documents. The Secretary to the Board of Directors will support and follow up issues to ensure the Board of Directors没 compliance with applicable rules and regulations and shareholders没 resolutions. Also under the responsibility of the Secretary to the Board of Directors is to coordinate with related parties.
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In 2005, the Board of Directors held ordinary and special Meetings. The following is a table listing their attendance record.
Name
1. Mr. Boonklee Plangsiri 2. Mr. Prathueng Srirodbang 3. Mr. Gan Hui Beng 4. Mr. Sillapaporn Srijunpetch (Ph.D.)1) 5. Mr. Viroj Tocharoenvanith 2) 6. Mr. Dumrong Kasemset (Ph.D.) 7. Mrs. Siripen Sitasuwan 8. Mr. Mark Chong Chin Kok 9. Mr. Vasant Chatikavanij 10. Mr. Kajornsak Singhaseni 2) 11. Mrs. Saowanee Sitchawat (Ph.D.) 1) 12.Mr. Somprasong Boonyachai
Board Annual of General Meeting 05 Director 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 -
7/7 7/7 7/7 0/0 5/5 6/7 6/7 6/7 5/7 2/2 5/6 -
Audit Nomination Remuneration Executive Committee Committee Committee Committee 7/7 7/7 7/7 -
1/1 1/1 1/1 -
1/1 1/1 1/1 1/1 -
13/13 11/13 7/13 11/13 6/13
1) Mrs. Saowanee Sitchawat(Ph.D.) resigned as Independent Director and Member of the Audit Committee, effective on 7 November 2005 and Mr. Sillapaporn Srijunpetch(Ph.D.) replaced her on 10 November 2005 2) Mr. Viroj Tocharoenvanith has assumed a Director position in substitution of Mr. Kajornsak Singhaseni, who resigned from the position since 17 February 2005
9. Succession Plan The Board is responsible for reviewing and preparing a succession plan of the Chairman of the Executive Committee (CEO) by assigning a Nomination Committee to define the principles of the succession plan should the position of CEO is be vacated. This is to build up confidence among the shareholders, company, and staff that the operations of the Company will be effectively continued.
10. Directors Training and Knowledge Development Each newly appointed director will receive sufficient information about the business of the Company, relevant rules and regulations in prior to reporting the duties. The Company encourages the directors to have continual training and knowledge development in order to equip them for the efficient performance of the dities and governance of the Company.
11. The Performance Assessment of the Board of Directors In the Board of Directors Meeting No.3/2006 on March 21, 2006 the Board of Directors conducted a performance self-assessment for the year 2005. It is clearly specified that there shall be a self-assessment program
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once a year by the Companyûs Board of Directors to assess compliance with the corporate governance policy and/or good practice. This would enable the Board of Directors to improve its work efficiency to be in line with such approved policy going forward.
Chapter 2 Shareholdersû Rights and Equitable Treatment and the Roles of Stakeholders 1. Shareholdersû Rights and Equitable Treatment The Board respects shareholdersû rights and has the duty to protect the benefit of every shareholder equitably, irregardless of whether they are retail, foreign, institutional, or wholesale investors. Every shareholder shall have the following rights and equitability. ë Right to receive shares certificate, transfer shares, acknowledge information about operating performance and business policy, regularly and in a timely manner ë Right to receive profit sharing, equitably ë Right to attend shareholders meetings, express their opinion, giving recommendations, and be involved in decision-making regarding significant changes ë Right to appoint directors Other than the above rights, every shareholder shall receive rights and equitable treatment according to those stipulated in the Companyûs Articles of Association and relevant laws. Shareholdersû Meeting The Company has a policy to conduct shareholdersû meetings according to the law and guidelines prescribed by regulatory bodies. In 2005, there was one shareholdersû meeting, the Annual General Meeting (AGM), at the Shinawatra Tower 3 on Vibhavadi Rangsit Road, Chatuchak, Bangkok, used for the convenience of the majority of shareholders. In the shareholdersû meeting, every shareholder has rights and receives equitable treatment to acknowledge information, give opinions, and ask questions during the meeting relevant to the agenda and the issues under discussion. The Chairman of the meeting shall allocate an appropriate period of time for discussion and promotes the expression of opinions and discussion thereof in the meeting. The Company distributed a Notice to the Meeting together with the meeting documents, necessary information, useful directorsû opinion in each agenda and/or rationale to facilitate the study and consideration of shareholders. The Company also notified which documents were required for meeting registration, proxy instruction, and proxy forms. All were distributed more than 14 days prior to the meeting. Also prior to the meeting, an invitation letter, including the supplementary documents, is publicized on the Companyûs website. Furthermore, the Company has used an advanced registration system to facilitate shareholders and allowed sufficient registration time ahead of the meeting. The Company has appointed at least one independent committee member to be appointed as a proxy for shareholders who are not available to attend the meeting. The details of power of attorney are clearly
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specified in the meetingûs invitation letter. Every shareholder has the right to vote on the proposed agenda items. The Company will not gather unrelated matters into an agenda item. In the 2005 the Annual General Shareholdersû Meeting, the Chairman of the Board of Directors as well as the Chair Person of every sub-committee attended the meeting with the Companyûs directors to answer inquiries using the guidelines determined by the Company.
2. Roles of the Stakeholders The Company is aware of the rights of stakeholders and has a policy to ensure the importance of their the rights by the appropriate prioritization of all stakeholders, namely shareholders, employees, executives, customers, partners, creditors, society and the public. Cooperation between stakeholders shall be made according to their roles and responsibilities so that the Company can run smoothly and strongly to fairly benefit all of them.
Chapter 3 Information Disclosure and Transparency The Company values accurate, complete, thorough, and timely disclosure of financial, operational, and other relevant information to shareholders and all stakeholders equitably by determining the roles and responsibility of the Board. The disclosure was made through communication channels of the SET, SEC, and Company website at www.csloxinfo.com and www.shincorp.com The Company has established an Investor Relations Unit that acts as its representative, having responsibility to communicate useful news and information to shareholders, investors, securities analysts and other related parties. Apart from its duty to disclose information in accordance with related laws and regulations, the Company has arranged Investor Conferences to officially announce its operating results on a quarterly basis and answer any additional inquiries from investors, analysts, and those who are interested as follows: ë 1Q2005 SHIN Group Quarterly Briefing on May 16, 2005 ë 2Q2005 SHIN Group Quarterly Briefing on August 16, 2005 ë 3Q2005 SHIN Group Quarterly Briefing on November 14, 2005 ë Y2005 SHIN Group Annual Briefing on March 23, 2006 Interested persons can contract the Investor Relations Unit at 0 2263 8000 Ext. 5182 or E-mail : ir@csloxinfo.net and www.csloxinfo.com
Chapter 4 Internal Control and Risk Management 1. Internal Control The Company has an independent Internal Audit Office, reporting functionally and directly to the Audit Committee in evaluating, assuring, and consulting about internal control systems, risk management, and good corporate governance. In Board meeting No.2/2006 on February 24, 2006 with the contribution of the Audit Committee, the Board evaluated sufficiency five areas of internal control; the organization and environment, risk management
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system, management control, information and communication system, and the monitoring system. The evaluation concluded that the Company has adequate internal control and risk management development.
2. Risk Management The Company has a policy to manage different risks, which may have an impact on the Company, to ensure that the Company can keep risks within an appropriate and acceptable level. The Chairman of the Executive Committee has appointed a Risk Management Committee comprising the Managing Director as its President and management representatives from each department as directors. The Office of Internal Control acts as the secretary to the Risk Management Committee in order to assess the risks and implement proper risk measures for high level risks. The Risk Management Committee has determined a level of risk that entails close supervision from the Risk Management Committee i.e. severe risk. However, those external risks, such as fierce competition, are the responsibility of the corresponding management to follow up and report to the Risk Management Committee for further consideration and prompt action. Moreover, the Office of Internal Control will report the results to the Audit Committee on a quarterly basis, and the Board of Directors on an annual basis, such that the report, including proposals for review of relevant policies, is done independently.
Chapter 5
Business Philosophy and Business Ethics
The Company has formulated a set of corporate ethics as part of a good governance policy and guidelines that every member of the Board of Directors, management and employees has abided in business practice and operates honestly and ethically. Such corporate ethics cover the following issues: ë The responsibility to staffs, shareholders, competitor, business partners, creditors, society, customers etc. ë The use of inside information for own or othersû interest ë Related transactions ë Participation in political activities ë Distribution of information or interviews to the press or the public ë Conflicts of Interest ë Performance in compliance with laws, rules and regulations ë Safeguarding of the properties of the group ë Supervision and reporting In its Code of Conduct, the Company established guidelines and communicated to executives, and all staff to acknowledge and practice them. It covers expected responsibilities of staff, shareholders, partners, creditors, society, and customers, including guidelines to promote fair and free competition under a legal framework and ethics.
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Use of significant inside information of the Group, which has not been disclosed to the public, for their own or others没 benefit is prohibited. The distribution of information about the Company shall be conducted on a factual, accurate and careful practice by the relevant or assigned person. In the case that the management or employees disclose inside information of the Company, use it for their own benefit or act in a way that may have potential conflicts of interest, such events will be considered a material violation and may be subject to penalties. Any directors, executives, and staff having access to inside information were also encouraged to avoid or suspend trading of the stocks of the Company for a period of one month prior to the disclosure of the financial statements to public. The Company has informed its directors and management that each of them, including their spouses and under-age children, are required to prepare and submit a securities holding report as well as a report on the changes in their securities holding status in accordance with the required form and within the specified timeframe under the law. Regarding related transactions, the Companies in the Group shall conform to such rules and procedures in making approvals by adhering to the greatest benefit of the Company, as when dealing with outside parties (on an arms没 length basis).
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Directors没 Shareholding in the Company and its Subsidiaries for the Year 2005 CS LoxInfo Plc.
Name
Mr. Boonklee Plangsiri Mr. Prathueng Srirodbang Mr. Gan Hui Beng
Position
Chairman of the Board of Directors
Chairman of the Audit Committee Member of the Audit Committee Mr. Sillapaporn Srijunpetch (Ph.D.) Member of the Audit Committee Mr. Viroj Tocharoenvanith Director Mr. Dumrong Kasemset (Ph.D.) Director Mrs. Siripen Sitasuwan Director Mr. Mark Chong Chin Kok Director Mr. Vasant Chatikavanij Director
Informantion Teleinfo Media Plc.* Loxley Services Co., Ltd.
Ordinary Shares
Ordinary Shares
Ordinary Shares
2004
2005
2004
2005
2004
2005
-
-
-
-
-
-
5,477,470 3,981,270
1 3 -
1 1 -
-
-
As at December 31, 2005, includes holding by spouse and minor children * Teleinfo Media Plc. decreased paid-up capital from 694,136,000 Baht to 173,534,000 Baht. (Par value 10 Baht)
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CS LoxInfo Public Company Limited The Brief Director Information Mr. Boonklee Plangsiri Title Age Shareholding Relationship with Management Highest Education Governance Training (e.q.DCP and DAP of IOD) and other Training Work Experiences
CHAIRMAN OF THE BOARD OF DIRECTORS 54 - None Master Degree Computer Engineering University of Illinois (Urbana Champaign), U.S.A. Directors Accreditation Program Class 40/2005 2004 - Present 2001 - Present 1999 - Present 1997 - Present 2001 - 2002 1997 - 2000
Illegal Record in past 10 years
1995 - 1996 1993 - 1994 - None -
Chairman of the Board of Directors, CS LoxInfo Plc. Chairman of the Board of Directors, ITV Plc. Chairman of the Group Executive Committee, Shin Corporation Plc. Director of Shin Corporation Plc., Advanced Info Service Plc. and Shin Satellite Plc. Chairman of the Executive Committee, ITV Plc. Member of the Executive Committee of Shin Corporation Plc., Advanced Info Service Plc. and Shin Satellite Plc. Vice Chairman of the Executive Committee (Operation), Shinawatra Group President of Shinawatra Group
Mr. Prathueng Srisodbang Title Age Shareholding Relationship with Management Highest Education
INDEPENDENT DIRECTOR AND CHAIRMAN OF THE AUDIT COMMITTEE 67 - None Diploma Business Administration National Defense College of Thailand, Mini MBA Business Administration Thammasat University, Barrister-at-law The Thai Bar, Bachelor Degree Law Thammasat University
Gorvernance Training (e.q. DCP and DAP of IOD) and other Training Work Experiences
Directors Accreditation Program Class 11/2004
Illegal Record in past 10 years
2003 - Present 1998 - Present 1999 - 2002 1994 - 1998 - None -
Independent Director and Chairman of Audit Committee, CS LoxInfo Plc. Director, National Insurance Co., Ltd. Chairman of Audit Committee, Chumporn Palm Oil Industry Plc. Deputy Permanent Secretary, Ministry of Commerce
Mr. Gan Hui Beng Title Age Shareholding Relationship with Management Highest Education Gorvernance Training (e.q. DCP and DAP of IOD) and other Training Work Experiences
Illegal Record in past 10 years
INDEPENDENT DIRECTOR AND MEMBER OF THE AUDIT COMMITTEE 55 - None Bachelor Degree Economics University of Wales Institute of Science and Technology, U.K., Fellow of Institute of Chartered Accountants in England and Wales, U.K Directors Accreditation Program Class 47/2004 2006 - Present 2003 - Present 2000 - 2005 1987- 1999 - None -
Deputy President Director, Bank Bunan Indonesia Pk. Indendent Director and Member of Audit Committee Managing Director and Chief Executive Officer, UOB Radanasin Bank Plc. Voice President, Citibank N.A.
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Mr. Sillapaporn Srijunpetch (Ph.D.) Title Age Shareholding Relationship with Management Highest Education Gorvernance Training (e.q. DCP and DAP of IOD) and other Training Work Experiences
Illegal Record in past 10 years
INDEPENDENT DIRECTOR AND MEMBER OF AUDIT COMMITTEE 42 - None Doctorate Degree Accounting Manchester Business School University of Manchester 2005 - Present 1997 - Present 1995 - 1997 1986 - 1995 - None -
Independent Director and Member of Audit Committee, CS LoxInfo Plc. Lecturer and Director of Master of Accounting Profession Faculty of Commerce and Accountancy, Thammasart University Director and Group Financial Controller, Jardine Matheson (Thailand) Limited Senior Manager, Price Waterhouse
Mr. Viroj Tocharoenvanith Title Age Shareholding Relationship with Management Highest Education Gorvernance Training (e.q. DCP and DAP of IOD) and other Training Work Experiences
Illegal Record in past 10 years
DIRECTOR 41 - None Master Degree Computer Engineering Asian Institute of Technology Directors Certification Program Class 59/2005, Finance for Non-Finance Director Class 18/2005 2005 - Present Director, Thai - Amadeus South East Asia Co., Ltd. 2004 - Present Director, CS LoxInfo Plc. Vice President, Other Business Partners Department, CAT Telecom Plc. 1999 - 2004 Director, Telecom Business Development Department, CAT Telecom Plc. 1996 - 1998 Senior Manager Class 8, The Communications Authority of Thailand 1985 - 1996 Engineer Class 3, The Communications Authority of Thailand - None -
Mr. Dumrong Kasemset (Ph.D.) Title Age Shareholding Relationship with Management Highest Education Gorvernance Training (e.q. DCP and DAP of IOD) and other Training Work Experiences
DIRECTOR AND CHAIRMAN OF THE EXECUTIVE COMMITTEE 51 - None Doctorate Degree Electrical Engineering Massachusetts Institute of Technology, U.S.A. Directors Certification Program Class 2/2003 2004 - Present 2000 - Present 1999 - Present 1997 - Present 1995 - 1997 1994 - 2000 1993 - 1994 1991 - 1992 1989 - 1991
Illegal Record in past 10 years
1986 - 1989 - None -
Member of the Executive Committee, ITV Plc. Director and Chairman of the Executive Committee, CS LoxInfo Plc. Member of the Executive Committee, Advanced Info Service Plc. Group Vice Chairman of the Group Executive Committee,Shin Corporation Plc. Director and Member of the Executive Committee, Shin Satellite Plc. Chairman of the Executive Committee - Satellite and International Business Vice Chairman of the Executive Committee, Policy, Shinawatra Group President, Shinawatra Satellite Plc. Executive Vice President, International Broadcasting Corporation Limited Group General Manager - International Broadcasting Corporation Limited Senior Manager - Business Development, Shinawatra Group Program Manager Integrated Optoelectronics, GE Aerospace, New York, U.S.A. Manager, Ga As IC Materials, Siemens, New Jersey, U.S.A.
CS LOXINFO 71
Mrs. Siripen Sitasuwan Title Age Shareholding Relationship with Management Highest Education Governance Training (e.q. DCP and DAP of IOD) and other Training Work Experiences
Illegal Record in past 10 years
DIRECTOR AND MEMBER OF THE EXECUTIVE COMMITTEE 57 - None Master Degree Business Administration Wichita State University, Wichita, Kansas, U.S.A. Directors Certification Program Class 33/2003 2004 - Present 2001 - Present 2000 - Present 1998 - Present 1998 - 2000 1994 - 1998 1991 - 1993 - None -
Director and Member of the Executive Committee, CS LoxInfo Plc. Director and Member of the Executive Committee, ITV Plc. President, Shin Corporation Plc., Group Chief Finance Officer Director and Member of the Executive Committee, Shin Corporation Plc., Advanced Info Service Plc., Shin Satellite Plc. Chief Finance Officer, Shin Corporation Plc. Executive Vice President - Finance, Shinawatra Group Vice President - Finance, Shinawatra Group
Mr. Mark Chong Chin Kok Title Age Shareholding Relationship with Management Highest Education Governance Training (e.q. DCP and DAP of IOD) and other Training Work Experiences
DIRECTOR AND MEMBER OF THE EXECUTIVE COMMITTEE 42 - None Master Degree Business Administration National University of Singapore, Master Degree Research in Electronics System ENSERG, INPG, Grenoble France 2003 - Present 2001 - Present 1999 - 2001 1997 - 1999
Illegal Record in past 10 years
1994 - 1997 1990 - 1994 - None -
Director and Member of the Executive Committee CS LoxInfo Plc. Chief Executive Officer, SingTel Global Office, Singapore Telecommunication Limited Managing Director, Shinwatra Paging / Advanced Paging General Manager (Paging) / GM (Telephony), Singapore Telecommunication Limited Director (Sea, Air & Communications) Ministry of Communications Head of Department, Ministry of Defence
Mr. Vasant Chatikavanij Title Age Shareholding Relationship with Management Highest Education Governance Training (e.q. DCP and DAP of IOD) and other Training Work Experiences
Illegal Record in past 10 years
DIRECTOR AND MEMBER OF THE EXECUTIVE COMMITTEE 49 - None Master Degree Chemical Engineering Lehigh University, U.S.A Directors Accreditation Program Class 11/2004 2004 - Present 2002 - Present 2001 - Present 1993 - Present 1984 - Present - None -
Director and Member of the Executive Committee, CS LoxInfo Plc. Chairman, Mobile Innovation Co., Ltd. Chairman, Space Imaging Southeast Asia Co., Ltd. Director, TT & T Plc. Chairman, LOXBIT Plc. Executive Vice President, Loxley Plc.
CS LOXINFO 72
Mr. Somprasong Boonyachai Title Age Shareholding Relationship with Management Highest Education Governance Training (e.q. DCP and DAP of IOD) and other Training Work Experiences
Illegal Record in past 10 years
MEMBER OF THE EXECUTIVE COMMITTEE 50 - None Master Degree Engineering Asian Institute of Technology (AIT) Directors Certification Program Class 65/2005, Directors Accreditation Program class 30/2004 2004 - Present Member of the Executive Committee, CS LoxInfo Plc. Director and Member of the Executive Committee, ITV Plc. 2000 - Present Member of the Executive Committee, Shin Satellite Plc. Group Vice Chairman of the Group Executive Committee, Shin Corporation Plc. 1999 - Present Director and Chairman of the Executive Committee - Wireless Communications Business, Advanced Info Service Plc. 1997 - 1998 Vice Chairman of the Executive Committee - Wireless Communications, Shinawatra Group 1995 - 1996 Senior President, Advanced Info Service Plc. 1994 - 1995 President, Advanced Info Service Plc. 1993 - 1994 President, Shin Satellite Plc. 1993 - 1993 President, Advanced Info Service Plc. 1992 - 1993 Executive Vice President (Operation 4), Shinawatra Group - None -
Mr. Anant Kaewruamvongs Title Age Shareholding Relationship with Management Highest Education Governance Training (e.q. DCP and DAP of IOD) and other Training Work Experiences
Illegal Record in past 10 years
MANAGING DIRECTOR 44 - None Master Degree Management SASIN Graduated School Directors Accreditation Program Class 45/2005 2005 - Present 1999 - 2005 1997 - 1999 1995 - 1997 1993 - 1995 - None -
Managing Director, CS LoxInfo Plc. Deputy Manager, CS LoxInfo Plc. General Manager, CS Satellite Phone Co., Ltd. General Manager, Lao Telecommunications Co., Ltd. Business Deveopment Manager, Internation Broadcasting Corporation
Mr. Anuwat Sanguansappayakorn Title Age Shareholding Relationship with Management Highest Education Governance Training (e.q. DCP and DAP of IOD) and other Training Work Experiences
Illegal Record in past 10 years
CHIEF FINANCE OFFICER 40 - None Master Degree Accounting Chulalongkorn University 1998 - Present 1997 - 1997 1996 - 1997 1994 - 1996 1988 - 1993 - None -
Chief Finance Officer, CS LoxInfo Plc. Planning Manager, Thai Capital Final Finance & Securities Co.,Ltd. Manager, Krung Thai Finance & Securities Company Accounting Manager, Multi Credit Corporation of Thai Senior Auditor, Deloittr Touch Thomatsu Jaiyos
CS LOXINFO 73
Mrs. Aksara Assavapokee Title Age Shareholding Relationship with Management Highest Education Governance Training (e.q. DCP and DAP of IOD) and other Training Work Experiences
Illegal Record in past 10 years
SENIOR DIRECTOR-FINANCE & ACCOUNTING 56 - None Bachelor Degree Accounting Chiangmai University 2001 - Present 1998 - 2000 1995 - 1997 1981 - 1994 1973 - 1980 - None -
Senior Director Finance & Accounting, CS LoxInfo Plc. Manager, A.C.N. Center Co., Ltd. Manager, T.A.S. Co., Ltd. Accounting Manager, Kodak (Thailand) Co., Ltd. Auditor, Cooper & Lybun Co., Ltd.
Mr. Somchai Kittichaikoolkit (Ph.D.) Title Age Shareholding Relationship with Management Highest Education Governance Training (e.q. DCP and DAP of IOD) and other Training Work Experiences Illegal Record in past 10 years
SENIOR DIRECTOR OF INFORMATION SYSTEM DEPARTMENT (ACT.) 39 None Doctorate Degree Electronics Engineering Tohodu University 1999 - Present 1997 - 1998 1994 - 1996 - None -
Senior Director of Information System Department (Act)CS LoxInfo Plc. IT Specialist, Shinawatra Information Technology Co., Ltd. Marketing Manager, Shinawatra Computer and Communications Co., Ltd.
Mr. Porames Kruethong Title Age Shareholding Relationship with Management Highest Education Governance Training (e.q. DCP and DAP of IOD) and other Training Work Experiences Illegal Record in past 10 years
SENIOR DIRECTOR OF TECHNICAL & OPERATION DEPARTMENT (ACT.) AND DIRECTOR OF SALES DIVISION (ACT.) 44 None Master Degree Electrical Engineering California State University, Northridge 2005 - Present 2004 - 2005 2002 - 2004 - None -
Senior Director Technical & Operation (Act.), CS LoxInfo Plc. Project Manager IPStar, Shin Satellite Plc. Deputy Director General, Lao Telecom Co., Ltd.
Mr. Kamonmit Vudhijumnonk Title Age Shareholding Relationship with Management Highest Education Governance Training (e.q. DCP and DAP of IOD) and other Training Work Experiences
Illegal Record in past 10 years
SECRETARY TO THE BOARD 53 - None Master Degree Laws (LL.M) University of London Master Degree Laws (LL.M), Laude University of Brussels 2004 - Present 2002 - Present 1999 - 2001 1995 - 1998 1994 - 1995 1993 - 1994 1978 - 1993 - None -
Secretary to the Board, CS LoxInfo Plc. Vice President, Legal, Shin Satellite Plc. Assistant Vice President - Legal, Shin Satellite Plc. Assistant Vice President - legal, Shinawatra Computer & Communication Plc. Lawer, Couderts Brother, Bangkok Office Lawer, Baker & McKenzie, Bangkok Office Legal Officer, Office of the Juridical Council Association (Office of the Council of State)
CS LOXINFO 74
Board of Directorsû Responsibility for Financial Reporting The Board of Directors is responsible for CS LoxInfo Public Company Limitedûs financial statements and for CS LoxInfo Public Company Limited and its subsidiariesû consolidated financial statements, including the financial information presented in this annual report. The aforementioned financial statements are prepared in accordance with generally accepted accounting principles, using careful judgment and best estimation. Important information is adequately and transparently disclosed in the notes to financial statements to the Companyûs shareholders and investors. The Board of Directors has provided and maintained a risk management system and appropriate and efficient internal controls to ensure that accounting records are accurate, have integrity and are adequate to protect its assets and uncover weakness in order to prevent fraud or materially irregular operation. In this regard, the Board of Directors has entrusted an Audit Committee responsible for review the accounting policy and financial reports, review internal controls, internal audit and risk management system. Such comment on these issues have been included in the Audit Committee Report, which is presented in this annual report. The financial statements of the Company and the consolidated financial statements of Company and its subsidiaries have been examined by an external auditor, PriceWaterhouseCoopers ABAS Limited. In conducting their audit and to express an opinion in accordance with generally accepted auditing standards, the Company has supported them with all of the Companyûs records and related data. The auditorûs opinion is presented in the auditorûs report as part of this annual report. The Board of Directors believes that the Companyûs overall internal control system has functioned up to a satisfactory level and rendered credibility and reliability to CS LoxInfo Public Company Limitedûs financial statements and to the consolidated financial statements of CS LoxInfo Public Company Limited and its subsidiaries for the period ended December 31, 2005, and that they have been prepared according to generally accepted principles and related regulations.
Mr. Boonklee Plangsiri Chairman of the Board of Directors
Mr. Dumrong Kasaemset (Ph.D) Director and Chairman of the Executive Committee
CS LOXINFO 75
AUDITOR没S REPORT To the Shareholders of CS LoxInfo Public Company Limited I have audited the accompanying consolidated and company balance sheets as at 31 December 2005 and 2004, and the related consolidated and company statements of income, changes in shareholders没 equity, and cash flows for the years then ended of CS LoxInfo Public Company Limited and its subsidiaries, and of CS LoxInfo Public Company Limited, respectively. The Companys management is responsible for the correctness and completeness of information in these financial statements. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion. In my opinion, the consolidated and company financial statements referred to above present fairly, in all material respects, the consolidated and company financial position as at 31 December 2005 and 2004, and the consolidated and company results of operations, and cash flows for the years then ended of CS LoxInfo Public Company Limited and its subsidiaries, and of CS LoxInfo Public Company Limited, respectively, in accordance with generally accepted accounting principles.
PRASAN CHUAPHANICH Certified Public Accountant (Thailand) No. 3051 PricewaterhouseCoopers ABAS Limited Bangkok 24 February 2006
CS LOXINFO 76
CS LoxInfo Public Company Limited
Balance Sheets As at 31 December 2005 and 2004
Notes ASSETS Current assets Cash and cash equivalents Short-term investment Trade accounts receivable and accrued income, net Amounts due from related parties Receivable from reduction in share capital of a subsidiary Inventories, net Advance payments for service to a related party Withholding tax , net Other current assets Total current assets Non-current assets Investments - equity method Long-term investment - other Property and equipment, net Equipment under concession agreements, net Intangible assets, net Goodwill, net Deposits Total non-current assets Total assets
3 4
Consolidated 2005 2004 Baht Baht
Company 2005 Baht
2004 Baht
774,028,396 1,018,440,165 15,000,000
223,232,495 -
622,673,673 -
5, 28 28
303,519,920 -
306,013,926 10,936
147,552,408 1,253,293
181,491,561 4,029,318
9, 28 6
205,780,779
118,910,582
256,558,474 8,124,791
9,481,535
67,868,800 105,960,000 96,985,687 63,696,635 23,907,247 21,945,866 1,472,090,829 1,649,978,110
67,868,800 43,855,859 6,604,581 755,050,701
105,960,000 42,498,182 9,703,119 975,837,388
28 7 8
9 10 11
3,674,098 2,531,153 398,046,226
3,621,676 1,416,690,761 1,025,560,757 2,521,781 317,785,079 266,124,597 172,412,574
12 13 13
44,646,219 32,744,354 831,463,636 30,189,966 1,343,295,652
80,868,191 41,042,448 68,445,774 11,266,416 19,175,750 8,263,341 458,400,767 36,917,625 13,514,900 12,453,150 911,381,535 1,756,548,456 1,287,135,596
2,815,386,481 2,561,359,645 2,511,599,157 2,262,972,984
The notes to the consolidated and company financial statements on pages 83 to 116 are an integral part of these financial statements.
CS LOXINFO 77
CS LoxInfo Public Company Limited
Balance Sheets (Continued) As at 31 December 2005 and 2004
Notes LIABILITIES AND SHAREHOLDERS没 EQUITY Current liabilities Trade accounts payable Other accounts payable Amounts due to related parties Current portion of obligations under financial lease Unearned income and advances received from customers Accrued expenses Other current liabilities Total current liabilities Non-current liabilities Obligations under financial lease, net Provision from acquisition of investment Other non-current liabilities Total non-current liabilities Total liabilities
28 28
28 15
16
Consolidated 2005 Baht
2004 Baht
Company 2005 Baht
2004 Baht
351,083,672 56,910,831 1,770,009
279,497,993 24,035,660 5,513,269
221,046,118 47,799,802 -
187,498,546 7,094,616 745,973
254,501
357,363
-
-
222,028,122 79,092,349 19,553,225 730,692,709
274,077,211 59,909,889 12,273,050 655,664,435
132,879,162 39,857,881 6,774,862 448,357,825
138,512,989 39,282,755 5,660,857 378,795,736
115,340,077 7,842,937 123,183,014
160,972 6,204,379 6,365,351
115,340,077 5,947,709 121,287,786
4,648,551 4,648,551
853,875,723
662,029,786
569,645,611
383,444,287
The notes to the consolidated and company financial statements on pages 83 to 116 are an integral part of these financial statements.
CS LOXINFO 78
CS LoxInfo Public Company Limited
Balance Sheets (Continued) As at 31 December 2005 and 2004
Notes Shareholdersรป equity Share capital Authorised share capital - ordinary shares Issued and paid-up share capital ordinary shares Premium on share capital Retained earnings Appropriated Legal reserve Unappropriated Total parentรปs shareholdersรป equity Minority interests Total shareholderรปs equity Total liabilities and shareholdersรป equity
Consolidated 2005 Baht
2004 Baht
Company 2005 Baht
2004 Baht
17
26
639,569,774
630,982,200
639,569,774
630,982,200
625,000,000 992,141,435
625,000,000 992,141,435
625,000,000 992,141,435
625,000,000 992,141,435
35,006,925 20,323,183 289,805,186 242,064,079 1,941,953,546 1,879,528,697 19,557,212 19,801,162 1,961,510,758 1,899,329,859
35,006,925 20,323,183 289,805,186 242,064,079 1,941,953,546 1,879,528,697 1,941,953,546 1,879,528,697
2,815,386,481 2,561,359,645
2,511,599,157 2,262,972,984
The notes to the consolidated and company financial statements on pages 83 to 116 are an integral part of these financial statements.
CS LOXINFO 79
CS LoxInfo Public Company Limited
Statements of Income For the years ended 31 December 2005 and 2004
Notes Revenues Revenues from sales Service income Other income Gain on foreign exchange Share of net result from investments equity method Total revenues Expenses Cost of sales and services Selling and administrative expenses Directors没 remuneration Loss on foreign exchange Total expenses Profit before interest expense and tax Interest expense Profit before tax Income tax Profit before minorities (Loss) profit attributable to minorities, net Net profit for the year Basic and diluted earnings per share Net profit for the year
Consolidated 2005 Baht
2004 Baht
Company 2005 Baht
2004 Baht
28
18
9
196,883,675 2,051,771,817 70,268,067 2,210,451
262,967,849 194,202,851 1,719,325,777 1,198,482,264 20,360,832 29,862,942 78,102
238,739,446 821,323,585 55,912,519 -
52,423 2,321,186,433
902,177 287,767,948 223,725,726 2,003,556,635 1,710,394,107 1,339,701,275
1,260,411,604 762,137,800 2,462,782 2,025,012,186
1,064,987,005 974,983,199 634,206,996 601,353,499 434,867,177 371,786,736 1,869,868 2,015,000 1,725,000 175,810 85,272 1,668,386,182 1,411,865,376 1,007,804,004
28
19, 28
296,174,247 2,743,348 293,430,899 293,430,899 243,950 293,674,849
335,170,453 4,063,825 331,106,628 331,106,628 (2,866,599) 328,240,029
298,528,731 4,853,882 293,674,849 293,674,849 293,674,849
331,897,271 3,657,242 328,240,029 328,240,029 328,240,029
0.47
0.55
0.47
0.55
21
The notes to the consolidated and company financial statements on pages 83 to 116 are an integral part of these financial statements.
CS LOXINFO 80
CS LoxInfo Public Company Limited
Statements of Changes in Shareholders没 Equity For the years ended 31 December 2005 and 2004 Consolidated (Baht)
Opening balance 2004 Increase in share capital Legal reserve Net profit for the year Dividend payment Increase in minority interests during the year Closing balance as at 31 December 2004 Opening balance 2005 Legal reserve Net profit for the year Dividend payment Increase in minority interests during the year Closing balance as at 31 December 2005
Issued and Premium paid-up on share share capital capital Notes (Note 17) (Note 17) 500,000,000 24,598,935 17 125,000,000 967,542,500 26 -
26 30
Legal Retained reserve earnings (Note 26) 3,911,182 23,984,476 16,412,001 (16,412,001) - 328,240,029 - (93,748,425)
Minority interests
Total
16,934,563 569,429,156 - 1,092,542,500 - 328,240,029 - (93,748,425)
-
-
-
625,000,000 992,141,435
20,323,183
242,064,079
19,801,162 1,899,329,859
625,000,000 992,141,435 -
20,323,183 242,064,079 14,683,742 (14,683,742) - 293,674,849 - (231,250,000)
19,801,162 1,899,329,859 - 293,674,849 - (231,250,000)
-
-
-
-
625,000,000 992,141,435
35,006,925
289,805,186
2,866,599
(243,950)
2,866,599
(243,950)
19,557,212 1,961,510,758
The notes to the consolidated and company financial statements on pages 83 to 116 are an integral part of these financial statements.
CS LOXINFO 81
CS LoxInfo Public Company Limited
Statements of Changes in Shareholders没 Equity (Continued) For the years ended 31 December 2005 and 2004 Company (Baht)
Opening balance 2004 Increase in share capital Legal reserve Net profit for the year Dividend payment Closing balance as at 31 December 2004 Opening balance 2005 Legal reserve Net profit for the year Dividend payment Closing balance as at 31 December 2005
Issued and Premium paid-up on share share capital capital Notes (Note 17) (Note 17) 500,000,000 24,598,935 17 125,000,000 967,542,500 26 -
26 30
Legal Retained reserve earnings (Note 26) 3,911,182 23,984,476 16,412,001 (16,412,001) - 328,240,029 - (93,748,425)
Minority interests
Total
- 552,494,593 - 1,092,542,500 - 328,240,029 - (93,748,425)
625,000,000 992,141,435
20,323,183
242,064,079
- 1,879,528,697
625,000,000 992,141,435 -
20,323,183 242,064,079 14,683,742 (14,683,742) - 293,674,849 - (231,250,000)
- 1,879,528,697 - 293,674,849 - (231,250,000)
625,000,000 992,141,435
35,006,925
- 1,941,953,546
289,805,186
The notes to the consolidated and company financial statements on pages 83 to 116 are an integral part of these financial statements.
CS LOXINFO 82
CS LoxInfo Public Company Limited
Statements of Cash Flows For the years ended 31 December 2005 and 2004 Notes Net cash flows from operating activities Cash flows from investing activities Payment for long-term investment - other Payment for short-term investment Proceeds from reduction in share capital of a subsidiary Payments for investment in a subsidiary Payments for investment in a joint venture Payments for acquisitions of equipment Payments for intangible assets Proceeds from sale of equipment Net cash flows used in investing activities Cash flows from financing activities Proceeds from short term loan from financial institutions Repayments of short term loan Proceeds from loan from a subsidiary Repayments of loan from a subsidiary Repayments of loan from a related party Repayments of finance leases Repayments of short-term borrowings Proceeds from increase in share capital Dividend payment Net cash receipts from (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, opening balance Effects of exchange rate changes Cash and cash equivalents, closing balance
22
9 (e) 23
28 28 28 17 30
3
Consolidated 2005 2004 Baht Baht 530,102,905 446,801,025
Company 2005 2004 Baht Baht 282,822,218 260,709,475
(9,372) 15,000,000
(14,545) (15,000,000)
-
-
(388,961,842) (152,148,650) (19,560,439) 1,026,487 (544,653,816)
(441,711,327) (132,380,225) (274,145) 484,178 (588,896,064)
200,000,000 (511,849,865) - (507,403,000) (127,820,228) (110,078,157) (12,159,924) (274,145) 707,355 15,171 (451,122,662) (617,740,131)
- 568,642,808 - (568,642,808) (6,101,895) (431,685) (29,171,198) - (36,110,972) - 1,092,542,500 (231,250,000) (93,748,425)
- 500,000,000 - (500,000,000) 150,000,000 (150,000,000) (30,000,000) - (28,774,869) - (36,110,972) - 1,092,542,500 (231,250,000) (93,748,425)
(231,681,685)
927,410,010
(231,250,000)
903,908,234
(246,232,596) 785,314,971 1,018,440,165 233,645,735 1,820,827 (520,541) 774,028,396 1,018,440,165
(399,550,444) 622,673,673 109,266 223,232,495
546,877,578 75,836,789 (40,694) 622,673,673
Supplementary information for cash flows: Withholding tax deducted at source Interest paid
86,662,159 40,337
36,181,678 4,084,606
26,173,298 2,141,233
17,682,545 3,662,642
Non-cash transactions Acquisitions of property and equipment through debts Acquisitions of intangible assets through debts
54,716,347 3,694,484
24,035,660 -
47,799,802 -
7,094,616 -
The notes to the consolidated and company financial statements on pages 83 to 116 are an integral part of these financial statements.
CS LOXINFO 83
CS LoxInfo Public Company Limited
Notes to the consolidated and company financial statements For the years ended 31 December 2005 and 2004
1 General information CS LoxInfo Public Company Limited (çthe Companyé) is a public limited company, incorporated and domiciled in Thailand. The registered office of the Company is: 414 Phaholyothin Road, Sam Saen Nai, Phayathai, Bangkok 10400. The Company is an associate of the Shin Satellite Public Company Limited Group. Shin Broadband Internet (Thailand) Company Limited (a subsidiary of Shin Satellite Public Company Limited) owns 40.02% of the Companyûs shares. The Company registered as a listed company since April 2004. The principal activities of the Company and its subsidiaries and associate (çthe Groupé) are the provision of internet data centre services, internet, satellite uplink-downlink services for domestic and international communications, and the printing and publishing of telephone directories. The Company entered into concession agreements with CAT Telecom Public Company Limited (formerly çthe Communication Authority of Thailandé) (çCATé) for a period of 22 years from 9 August 1994 to 8 August 2016 to provide satellite uplink-downlink and internet services, and to provide internet services in Thailand for a period of ten years from 17 April 1997 to 16 April 2007. As at 8 September 2005, the Company received a one-year Type I license from the National Telecommunications Commission (çNTCé) for Internet access services ending on 7 September 2006. According to the conditions specified by NTC, provided that the authorised licensee is not in serious violation of any of the license conditions, NTC will renew the license immediately upon its expiry. In addition, a subsidiaryûs concession contract with CAT for a period of ten years to provide Internet services in Thailand will expire on 31 March 2006. However, the subsidiary will apply for a Type I license from NTC to retain its status as Internet service provider before the expiry date of the existing contract. The subsidiary expects to receive the license from NTC as its qualification complies with conditions specified by NTC. During the processing of application, the subsidiary has the right to extend its operation under existing contract by 90 days beyond expiry of the existing contract. On 29 June 2005, the Company acquired all common and preferred shares in Teleinfo Media Public Company Limited (çTMCé) from TOT Public Company Limited (Formerly çTOT Corporation Public Company Limitedé) (çTOTé). As a result, TMCûs status has changed from joint venture to subsidiary of the Group (Note 9). The Group changed the accounting for its investment in TMC in the consolidated financial statements from the proportionate consolidation to consolidation from the date at which TMCûs status changed. This change has no effect on accounting for investment in TMC in the Company financial statements.
CS LOXINFO 84
TMC has principally been engaged in publishing and advertising in telephone directories for 10 years, from the 1996 issue to the 2005 issue, under a right originally granted by TOT (Note 9e). However, the business of publishing and advertising in telephone directories is a non-regulated business. The Company does not have an income tax expense in 2005 and 2004 because the Company has a tax loss carried forward. As at 31 December 2005, the Group employs 977 people (2004: 950 people). These consolidated and company financial statements were approved for issue by the Board of Directors on 24 February 2006.
2 Accounting policies The principal accounting policies adopted in the preparation of these consolidated and company financial statements are set out below:
2.1 Basis of preparation The consolidated and company financial statements have been prepared in accordance with Thai generally accepted accounting principles under the Accounting Act B.E. 2543, being those Thai Accounting Standards issued under the Accounting Profession Act B.E. 2547, and the financial reporting requirements of the Securities and Exchange Commission under the Securities and Exchange Act B.E. 2535. As a result of the Federation of Accounting Professionûs (FAP) approval of three new accounting standards on 12 May 2005, the Group adopted TAS 52, ùEvents after Balance Sheet Dateû, TAS 53, ùProvisions, Contingent Liabilities, and Contingent Assetsû and TAS 54, ùDiscontinuing Operationsû in the second quarter of 2005. The adoption of those standards did not have a significant impact to these financial statements. The accounting principles applied may differ from generally accepted accounting principles adopted in other countries and jurisdictions. The accompanying consolidated and company financial statements are therefore not intended to present the financial position and results of operations and cash flows in accordance with jurisdictions other than Thailand. Consequently, these consolidated and company financial statements are only addressed to those who are informed about Thai generally accepted accounting principles and practices. The consolidated and company financial statements have been prepared under the historical cost convention. The preparation of financial statements in conformity with Thai generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements
CS LOXINFO 85
and the amounts of revenues and expenses in the reported periods. These estimates are based on managementûs historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year. An English version of the consolidated and company financial statements have been prepared from the statutory financial statements that are in the Thai language. In the event of a conflict or a difference in interpretation between the two languages, the Thai language statutory financial statements shall prevail.
2.2 Group accounting - investment in subsidiaries, associates and joint venture a) Subsidiary undertakings Subsidiaries, which are those entities (including special purpose entities) in which the Group has the power to govern the financial and operating policies, are consolidated. The existence and effect of potential voting rights that are presently exercisable or presently convertible are considered when assessing whether the Group controls another entity. Subsidiaries are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of the assets given up, shares issued or liabilities undertaken at the date of acquisition plus costs directly attributable to the acquisition. The excess of the cost of acquisition over the fair value of the Groupûs share of the identifiable assets and liabilities of the subsidiary acquired is recorded as goodwill. See Note 2.10 for the accounting policy on goodwill. Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated; unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, accounting policies of subsidiaries have been changed to ensure consistency with the policies adopted by the Group. In the Companyûs separate financial statements, investments in subsidiaries are reported using the equity method of accounting. A list of the Groupûs principal subsidiaries is set out in Note 9. b) Associated undertakings Investments in associated undertakings are accounted for using the equity method of accounting in the consolidated and company financial statements. Under this method, the Companyûs share of the post-acquisition profits or losses of associates is recognised in the income statement. The cumulative post-acquisition movements are adjusted against the cost of the investment. Associates are entities over which the Group generally has significant influence, but which it does not control. Unrealised gains or losses on transactions between the Group and its associates are eliminated to the extent of the Groupûs interest in the associates; unrealised losses are also eliminated unless the transaction
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provides evidence of an impairment of the asset transferred. The Groupûs investment in associates includes goodwill (net of accumulated amortisation of goodwill) on acquisition. When the Groupûs share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. In the Companyûs separate financial statements, investment in an associate is reported using the equity method of accounting. A list of the Groupûs principal associates is set out in Note 9. c) Joint venture undertakings A jointly controlled entity is a joint venture that involves the establishment of a corporation, partnership or other entity in which each venturer has an interest under a contractual arrangement between the venturers, which establishes joint control over the economic activity of the entity. The Groupûs interest in jointly controlled entity is accounted for by proportionate consolidation in the consolidated financial statements. The Group combines its share of the joint venturesû individual income and expenses, assets and liabilities and cash flows on a line-by-line basis with similar items in the Groupûs financial statements. The Group recognises the portion of gains or losses on the sale of assets by the Group to the joint venture that it is attributable to the other ventures. The Group does not recognise its share of profits or losses from the joint venture that result from the purchase of assets by the Group from the joint venture until it resells the assets to an independent party. However, if a loss on the transaction provides evidence of a reduction in the net realisable value of current assets or an impairment loss, the loss is recognised immediately. In the Companyûs separate financial statements the equity method is applied to account for interests in joint ventures. A list of the Groupûs principal joint ventures is set out in Note 9.
2.3 Related parties Enterprises and individuals that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the Company, including holding companies, subsidiaries and fellow subsidiaries are related parties of the Company. Associates and individuals owning, directly or indirectly, an interest in the voting power of the Company that gives them significant influence over the enterprise, key management personnel, which are directors and officers of the Company and close members of the family of these individuals, and companies associated with these individuals also constitute related parties. In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the legal form.
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2.4 Foreign currency translation Items included in the financial statements of each entity in the Group are measured using Thai Baht. The consolidated financial statements are presented in Thai Baht. Transactions denominated in foreign currencies are translated into Thai Baht at the rate of exchange prevailing on the transaction dates. Monetary assets and liabilities at the balance sheet date denominated in foreign currencies are translated into Thai Baht at the rate of exchange prevailing at the balance sheet date. Gains and losses resulting from the settlement of foreign currency transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the income statements.
2.5 Cash and cash equivalents Cash and cash equivalents are carried in the balance sheet at cost. Cash and cash equivalents comprise cash on hand and deposits held at banks, and other short-term highly liquid investments with original maturities of three months from acquisition date or less.
2.6 Trade accounts receivable Trade accounts receivable are carried at anticipated realisable value. An allowance is recorded for doubtful accounts receivable which is equivalent to the estimated collection losses that may be incurred. The estimated losses are based on historical collection experience combined with a review of the current status of the existing receivables at the balance sheet date.
2.7 Inventories Inventories are stated at the lower of cost or net realisable value. Cost is determined by the weighted average method. The net realisable value is an estimate of the selling price in the ordinary course of business, less selling expenses. Provision is made, where necessary, for obsolete, slow-moving and defective inventory.
2.8 Investments Investments with fixed maturity that the management has the intent and ability to hold to maturity are classified as held-to-maturity and are included in non-current assets, except for maturities within 12 months from the balance sheet date which are classified as short term investment in the current assets. A test for impairment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the income statements. On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the income statements.
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2.9 Property and equipment All property and equipment is initially recorded at cost and subsequently shown at historical cost, less accumulated depreciation. Depreciation is calculated using the straight-line method to write off the cost of each asset over its estimated useful life as follows: Leasehold improvements Computer equipment Furniture and fixtures Office equipment Motor vehicles Printing equipments
5 years 3 - 10 years 5 years 5 years 5 years 5 years
Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount. The estimated recoverable amount is the higher of the anticipated, discounted cash flows from the continuing use of the asset and the amount obtainable from the sale of the asset, less any cost of disposal. Gains and losses on disposal of property and equipment are determined by reference to their carrying amount and are taken into account in determining operating profit. Repairs and maintenance are charged to the income statements during the financial year in which they are incurred. The cost of major renovations is included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the Group. Major renovations are depreciated over the remaining useful life of the related assets.
2.10 Equipment under concession agreements Equipment under concession agreements represent, Internet networks, servers, fiber optic networks and other operating equipment, for which has been transferred to CAT Telecom Public Company Limited under concession agreements. Concession assets are carried at the historical cost less accumulated amortisation. They are amortised using the straight-line method over the shorter of the estimated useful lives of these assets, ranging from five to ten years or the remaining concession period. Concession assets are not revalued. The carrying amount of concession assets is reviewed annually and adjusted for impairment where it is considered necessary.
2.11 Intangible assets Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the Group没s share of the identifiable assets and liabilities of the acquired subsidiary, associate and joint venture undertaking at the date of acquisition. Goodwill on acquisitions of subsidiary and joint venture is reported in the
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consolidated balance sheet as goodwill and is included in investments - equity method in the Company没s separate balance sheet. Goodwill on acquisitions of associates is included in investments - equity method in the consolidated and company financial statements. Goodwill is amortised using the straight - line method over its estimated useful life. Management determines the estimated useful life of goodwill based on its evaluation of the respective companies at the time of the acquisition, considering factors such as existing market shares, potential growth and other factors inherent in the acquired subsidiary, associate and joint venture. Goodwill is amortised over a period of 8 - 12 years. Intangible assets - other Expenditure on purchased computer software, internet equipment provided to customers in connection with services obtained from the Company and the right to publish books are capitalised and amortised using the straight-line method over its useful life which is estimated by management, being five to ten years for purchased computer software, the period of each service agreement for Internet equipment and right to publish books is amortised using the straight-line method over its estimated useful life. Management determines the estimated useful life for three years. Intangible assets are not revalued. The carrying amount of each intangible asset is reviewed annually and adjusted for impairment where it is considered necessary.
2.12 Employee benefits The Group operates a provident fund, being a defined contribution plan, the assets for which are held in a separate trustee-administered fund. The provident fund is funded by payments from employees and the Group. The Group没s contributions are charged to the income statements in the year to which they relate. However, the Group does not provide for employment benefits payable to employees under the Thai Labour Law. Warrants granted to directors and employees of the Group are recognised when they are exercised.
2.13 Provision for liabilities Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. Where the Group expects a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain.
2.14 Revenue recognition Revenues from rendering internet services and services related to the satellite business are recognised when such services are rendered to customers, net of sales taxes and discounts. All costs of services incurred during the relevant periods are treated as period costs.
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Sales are recognised upon delivery of products and customer acceptance, net of sales taxes and discounts. Revenue from the sale of advertising space in telephone directories is recognised on a monthly basis over the useful life of the telephone directory. Advances from customers will be released to income when services are provided. Interest income is recognised as it accrues, unless collect ability is in doubt. Dividend income is recognised when the Group没s right to receive payment is established.
2.15 Dividends Dividends are recorded in the consolidated and company financial statements in the period in which they are approved by the shareholders.
2.16 Deferred income taxes The Group does not recognise income taxes payable or receivable in future periods in respect of temporary differences arising from differences between the tax base of assets and liabilities and their carrying amounts in the financial statements. The principal temporary differences arise from tax losses carried forward.
2.17 Financial instruments Financial instruments carried on the balance sheet include cash and cash equivalents, short-term investment, trade accounts receivable, amounts due from related parties, amount due from related party - reduction in share capital of a subsidiary, other investment, deposits, trade accounts payable, other accounts payable, amount due to related parties, obligations under financial lease and borrowings. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item.
2.18 Segment reporting The segment reporting has been prepared based on the Group没s method of internal reporting, which disaggregates its business by service or product.
2.19 Leases - where the Group is the lessee Leases of assets where the Group assumes substantially all the benefits and risks of ownership are classified as finance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased assets or the present value of the minimum lease payments. Each lease payment is allocated to the principal and to the finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included
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in other payables. The interest element of the finance charge is charged to the income statements over the lease period. The property and equipment acquired under finance leasing contracts are depreciated over the shorter of the estimated useful life of the assets or the lease term. However, if there is reasonable certainty that the lessee will obtain ownership by the end of the lease term, depreciation is calculated over the estimated useful life of the assets. Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the income statements on a straight-line basis over the period of the lease. When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination take place.
2.20 Leases - where the Group is the lessor Assets leased out under operating leases are included in property and equipment in the balance sheet. They are depreciated over their expected useful lives on a basis consistent with similar fixed assets. Rental income is recognised on a straight-line basis over the lease term.
2.21 Impairment of assets Property and equipment and other non-financial assets, including goodwill and intangible assets are reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the assets exceeds its recoverable amount which is the higher of an asset没s net selling price and value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which there is separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.
3 Cash and cash equivalents Consolidated 2005 2004 Baht Baht Cash on hand Current accounts and savings deposits held at call with banks Fixed deposits Promissory notes Total
Company 2005 Baht
2004 Baht
227,808
172,362
137,605
120,324
353,265,468 16,077 420,519,043 774,028,396
428,251,806 15,997 590,000,000 1,018,440,165
142,575,848 80,519,042 223,232,495
172,553,349 450,000,000 622,673,673
The effective interest rates of deposits held with banks and promissory notes were 0.125% - 4.08% per annum (2004: 0.125% - 1.75% per annum).
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4 Short-term investment Consolidated 2005 2004 Baht Baht Promissory notes Total
-
15,000,000 15,000,000
Company 2005 Baht -
2004 Baht -
In 2004, short-term investment represented six-month promissory notes with interest at the rate of 1.75% per annum.
5 Trade accounts receivable and accrued income, net Consolidated 2005 2004 Baht Baht Trade accounts receivable: - Third parties - Related parties (Note 28) Accrued income: - Third parties - Related parties (Note 28) Total trade accounts receivable and accrued income Less Allowance for doubtful accounts Total trade accounts receivable and accrued income, net
Company 2005 Baht
2004 Baht
329,559,977 55,479,530
302,659,227 76,353,798
124,876,656 40,675,787
133,480,607 64,149,315
12,017,016 7,233,011
7,863,355 7,086,898
3,901,928 7,233,011
6,568,516 7,086,898
404,289,534 (100,769,614)
393,963,278 (87,949,352)
176,687,382 (29,134,974)
211,285,336 (29,793,775)
303,519,920
306,013,926
147,552,408
181,491,561
Outstanding trade accounts receivable - third parties as at 31 December 2005 and 2004 can be analysed as follows: Consolidated 2005 2004 Baht Baht Current Overdue less than 3 months Overdue 3-6 months Overdue 6-12 months Overdue more than 12 months Less Allowance for doubtful accounts - third parties Trade accounts receivable - third parties, net
Company 2005 Baht
2004 Baht
74,363,788 56,644,116 69,838,662 68,301,895 60,411,516 329,559,977
69,255,170 96,651,675 79,402,850 5,514,618 51,834,914 302,659,227
46,853,080 55,712,750 11,468,525 2,532,591 8,309,710 124,876,656
51,780,095 66,858,347 5,423,224 2,737,256 6,681,685 133,480,607
(87,136,587)
(71,453,807)
(15,501,948)
(13,298,230)
242,423,390
231,205,420
109,374,708
120,182,377
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6 Inventories, net Consolidated 2005 2004 Baht Baht Raw material Supplies Work in process Finished goods Less Allowance for obsolete inventories Total
125,874,013 427,643 73,901,344 6,977,261 207,180,261 (1,399,482) 205,780,779
76,318,667 457,617 34,057,424 8,891,800 119,725,508 (814,926) 118,910,582
Company 2005 Baht 137,212 414,384 1,970,545 6,905,722 9,427,863 (1,303,072) 8,124,791
2004 Baht 123,027 439,757 946,200 8,787,477 10,296,461 (814,926) 9,481,535
7 Withholding tax, net Consolidated 2005 2004 Baht Baht Refundable withholding tax Less Provision for unclaimable tax Total
173,582,574 (76,596,887) 96,985,687
136,419,537 (72,722,902) 63,696,635
Company 2005 Baht 43,855,859 43,855,859
2004 Baht 42,498,182 42,498,182
8 Other current assets Consolidated 2005 2004 Baht Baht Prepaid expenses Others Total
20,571,067 3,336,180 23,907,247
16,082,028 5,863,838 21,945,866
Company 2005 Baht 4,474,610 2,129,971 6,604,581
2004 Baht 7,713,102 1,990,017 9,703,119
9 Investments - equity method a) Investments - equity method as at 31 December 2005 and 2004 comprise: Consolidated 2005 2004 Baht没000 Baht没000 Investment in subsidiaries Investment in an associate Investment in a joint venture Total
3,674 3,674
3,622 3,622
Company 2005 2004 Baht没000 Baht没000 1,415,228 1,463 1,416,691
373,452 1,410 650,699 1,025,561
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b) Movements in investments - equity method for the years ended 31 December 2005 and 2004 are as follows: Consolidated 2005 2004 Bahtû000 Bahtû000 Opening net book value Acquisition of a subsidiary (Note 23) Amortisation of goodwill (Note 13) Share of net profit from investments Receivable from reduction in share capital of a subsidiary (Note 9 e) Total
Company 2005 2004 Bahtû000 Bahtû000
3,622 52
2,720 902
1,025,561 624,478 (64,557) 287,768
332,997 507,403 (38,565) 223,726
3,674
3,622
(456,559) 1,416,691
1,025,561
c) The details of investments in subsidiaries, associate and joint venture can be summarised as follows: Name Subsidiaries Loxley Information Service Company Limited Teleinfo Media Public Company Limited (Formerly çTeleinfo Media and Company Limitedé) Associate CS Loxinfo Solutions Company Limited
Business
Country
Currency
Providing internet services
Thailand
Baht
Publishing telephone directories advertising
Thailand
Baht
Providing internet customers and marketing activities
Thailand
Baht
In the process of registering its liquidation with the Ministry of Commerce
d) Carrying values of investments - equity method are as follows: Consolidated - 31 December 2005 (Bahtû000) Paid-up % of capital Investment Cost Equity Associate: CS Loxinfo Solutions Company Limited
5,000
44.99
52
3,674
Dividend
-
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Consolidated - 31 December 2004 (Baht没000) Paid-up % of capital Investment Cost Equity Associate: CS Loxinfo Solutions Company Limited
5,000
44.99
52
Dividend
3,622
-
Company - 31 December 2005 (Baht没000) Paid-up % of capital Investment Cost Equity
Dividend
Subsidiaries: Loxley Information Services Company Limited
260,100
94.19
246,297
360,923
-
Teleinfo Media Public Company Limited
173,534
100.00
1,131,881
1,054,305
-
Total Associate: CS Loxinfo Solutions Company Limited
1,415,228
5,000
44.99
52
1,463
-
Company - 31 December 2004 (Baht没000) Paid-up % of capital Investment Cost Equity
Dividend
Subsidiaries: Loxley Information Services Company Limited
260,100
94.19
246,297
373,452
-
5,000
44.99
52
1,410
-
694,136
63.25
507,403
650,699
-
Associate: CS Loxinfo Solutions Company Limited Joint venture: Teleinfo Media Company Limited
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e) Teleinfo Media Public Company Limited (çTMCé) (Formerly çTeleinfo Media Company Limitedé) On 29 June 2005, the Company acquired an additional 25.51 million common and preferred shares in TMC, representing 36.75% of TMCûs total paid-up share capital (Note 23). As a result, the Company owns 100% of the total paid-up share capital of TMC, therefore, TMCûs status has changed from joint venture to subsidiary. TMC has been granted rights to publish and advertising in telephone directories by TOT Public Company Limited (çTOTé) (Formerly çTOT Corporation Public Company Limitedé). The annual minimum fee for the revenue sharing is Baht five million for the telephone numbers which not exceeding one million telephone numbers, for the use of publishing the 2003, 2004, and 2005 issues of the business telephone directories (Yellow Pages). If TMC uses telephone numbers exceeding one million telephone numbers, TOT will charge a fee at the rate of Baht five per telephone number. TMC was registered as a public limited company with the Department of Business Development, the Ministry of Commerce on 30 August 2005. TMC subsequently changed its name to Teleinfo Media Public Company Limited. On 12 September 2005, the extraordinary shareholdersû meeting of TMC No. 1/2548 passed a resolution to approve the offset of premium on share capital with deficit amounting to Baht 306.5 million and legal reserve amounting to Baht 17.5 million. After that process, TMC is still remaining deficits. The extraordinary shareholdersû meeting also passed a resolution to approve a reduction in the registered share capital of TMC by Baht 520.6 million (from Baht 694.1 million to Baht 173.5 million) by decreasing the number of ordinary shares by 40.1 million and preferred shares by 12 million to offset against the remaining deficits and allocate the remaining share capital of 17.35 million ordinary shares at a par value of Baht 10 each and no preferred shares. The balance after offsetting the deficit will be returned to the shareholders. With respect to the reduction in ordinary shares of TMC, TMC must refund the reduction in share capital balance after offsetting the deficit of Baht 457 million to the Company as its shareholder. In November 2005, TMC refunded in amount of Baht 200 million to the Company. As at 31 December 2005, the amount due from TMC is Baht 257 million (Note 28). f) CS Loxinfo Solutions Company Limited At the extraordinary shareholdersû meeting of CS Loxinfo Solutions Company Limited on 14 and 31 October 2005, the shareholders passed a resolution to approve the registration of its liquidation with the Ministry of Commerce on 18 November 2005. As of 31 December 2005, it is in the process of liquidation.
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10 Long-term Investments - other Consolidated 2005 2004 Baht Baht Time deposits Total
2,531,153 2,531,153
Company 2005 Baht
2,521,781 2,521,781
-
2004 Baht -
The weighted average effective interest rate of time deposits was 0.375% per annum (2004: 0.375% per annum). As at 31 December 2005, time deposits of Baht 2.53 million (2004: Baht 2.52 million) had been pledged as collateral in respect of bank guarantees.
11 Property and equipment, net
Leasehold improvement As at 31 December 2004 Cost Less Accumulated depreciation Net book value
Computer equipment
2,863,383 781,532,011
Consolidated (Baht) Furniture, fixture and Assets office Printing under equipment equipment installation 262,759,833
95,129,633
23,328,748 1,165,613,608
(2,853,382) (614,683,556) (171,419,211) (58,872,380) 10,001 166,848,455 91,340,622 36,257,253
- (847,828,529) 23,328,748 317,785,079
Transactions during the year ended 31 December 2005 Opening net book value 10,001 166,848,455 91,340,622 Additions - 62,256,116 39,873,265 Increase from acquisition of a investment (Note 23) 6,897,755 2,352,598 Write-offs, net (938,836) (419,616) Disposals, net (314,716) (1,903,063) Transfers, net 12,972,971 16,756,808 14,127,503 Depreciation (3,372,671) (75,935,226) (56,079,262) Closing net book value 16,508,056 168,672,601 89,292,047
As at 31 December 2005 Cost Less Accumulated depreciation Net book value
Total
24,048,292 855,026,623
36,257,253 4,989,402
23,328,748 317,785,079 75,710,554 182,829,337
34,375,868 1,825,904 45,452,125 - (1,358,452) (19,212) - (2,236,991) - (43,732,772) 124,510 (9,162,223) - (144,549,382) 66,441,088 57,132,434 398,046,226
319,522,602 175,599,129
57,132,434 1,431,329,080
(7,540,236) (686,354,022) (230,230,555) (109,158,041) 16,508,056 168,672,601 89,292,047 66,441,088
- (1,033,282,854) 57,132,434 398,046,226
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Leasehold improvement As at 31 December 2004 Cost Less Accumulated depreciation Net book value Transactions during the year ended 31 December 2005 Opening net book value Additions Write-offs, net Disposals, net Transfers, net Depreciation Closing net book value As at 31 December 2005 Cost Less Accumulated depreciation Net book value
1,902,881
Company (Baht) Furniture, fixture and Assets Computer office under equipment equipment installation 521,667,864
Total
72,734,227
325,020 596,629,992
(1,902,869) (398,810,215) (23,504,334) 12 122,857,649 49,229,893
- (424,217,418) 325,020 172,412,574
12 122,857,649 49,229,893 325,020 172,412,574 - 62,223,330 33,488,678 72,813,406 168,525,414 (879,293) (402,441) - (1,281,734) - (1,197,604) - (1,197,604) - 16,756,808 1,287,420 (17,659,718) 384,510 - (48,150,689) (24,567,874) - (72,718,563) 12 152,807,805 57,838,072 55,478,708 266,124,597
1,902,881
599,056,996 104,332,598
55,478,708 760,771,183
(1,902,869) (446,249,191) (46,494,526) 12 152,807,805 57,838,072
- (494,646,586) 55,478,708 266,124,597
As at 31 December 2005, the net book value of equipment as shown above included the net book value of equipment that the ownership of which will be transferred to CAT Telecom Public Company Limited under the terms of the concession agreements of Baht 1.16 million. The accounting policy for depreciation of this equipment is consistence with those used for assets under concession. Leased assets included above, where the Group is a lessee under a finance lease are vehicles, which can be detailed as follows: Consolidated 2005 2004 Baht没000 Baht没000 Cost - capitalised finance leased assets Accumulated depreciation Net book amount
1,708 (1,371) 337
3,558 (2,233) 1,325
Company 2005 2004 Baht没000 Baht没000 -
-
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As at 31 December 2005, the book value of fully depreciated assets, which are still in use is as follows: Consolidated Bahtû000
Company Bahtû000
434,455 651,132
303,717 341,445
Consolidated Bahtû000
Company Bahtû000
333,144,459 (252,276,268) 80,868,191
209,861,601 (141,415,827) 68,445,774
80,868,191 (36,221,972) 44,646,219
68,445,774 (27,403,326) 41,042,448
333,144,459 (288,498,240) 44,646,219
209,861,601 (168,819,153) 41,042,448
As at 31 December 2004 As at 31 December 2005
12 Equipment under concession agreements, net As at 31 December 2004 Cost Less Accumulated amortisation Net book value Transactions during the year ended 31 December 2005 Opening net book value Amortisation charges Closing net book value As at 31 December 2005 Cost Less Accumulated amortisation Net book value
As at 31 December 2005, the book value of fully depreciated equipment under concession agreements, which are still in use is as follows: Consolidated Bahtû000
Company Bahtû000
24,843 83,160
-
As at 31 December 2004 As at 31 December 2005
13 Intangible assets and goodwill, net Consolidated (Baht) Intangible assets Intangible Intangible Intangible assets under assets assets - other installation Total As at 31 December 2004 Cost Less Accumulated amortisation Net book value
17,839,647 (10,154,389) 7,685,258
3,581,158 3,581,158
21,420,805 (10,154,389) 11,266,416
Goodwill 503,711,592 (45,310,825) 458,400,767
CS LOXINFO 100 Consolidated (Baht) Intangible assets Intangible Intangible Intangible assets under assets assets - other installation Total Transactions during the year ended 31 December 2005 Opening net book value Additions Increase from acquisition of an investment (Note 23) Write-offs, net Transfers, net Amortisation charges Closing net book value As at 31 December 2005 Cost Less Accumulated amortisation Net book value
Goodwill
7,685,258 12,281,447
3,581,158 10,973,477
11,266,416 23,254,924
458,400,767 -
1,562,630 (70) 6,754,000 (3,339,546) 24,943,719
(6,754,000) 7,800,635
1,562,630 (70) (3,339,546) 32,744,354
437,619,632 (64,556,763) 831,463,636
37,632,889 (12,689,170) 24,943,719
7,800,635 7,800,635
45,433,524 (12,689,170) 32,744,354
941,331,224 (109,867,588) 831,463,636
Intangible assets - other
Company (Baht) Intangible assets under installation
Intangible assets Total
As at 31 December 2004 Cost Less Accumulated amortisation Net book value
11,237,366 (6,555,183) 4,682,183
3,581,158 3,581,158
14,818,524 (6,555,183) 8,263,341
Transactions during the year ended 31 December 2005 Opening net book value Additions Write-offs, net Transfers, net Amortisation charges Closing net book value
4,682,183 1,186,447 (70) 6,754,000 (1,247,445) 11,375,115
3,581,158 10,973,477 (6,754,000) 7,800,635
8,263,341 12,159,924 (70) (1,247,445) 19,175,750
As at 31 December 2005 Cost Less Accumulated amortisation Net book value
16,537,890 (5,162,775) 11,375,115
7,800,635 7,800,635
24,338,525 (5,162,775) 19,175,750
CS LOXINFO 101
14 Credit facilities The available credit facilities for borrowings from banks as at 31 December 2005 are Baht 861 million (31 December 2004: Baht 757 million).
15 Other current liabilities Consolidated
Other taxes Other payables Total
Company
2005
2004
2005
2004
Baht 9,085,885 10,467,340 19,553,225
Baht 6,580,285 5,692,765 12,273,050
Baht 5,489,810 1,285,052 6,774,862
Baht 4,030,824 1,630,033 5,660,857
16 Provision from acquisition of investment Provision from acquisition of investment amounting to Baht 115.34 million was derived from the purchase of common and preferred shares from Teleinfo Media Public Company Limited (çTMCé) on 29 June 2005. In connection with this acquisition, the Company has a commitment to pay an additional amount for the shares, subject to certain conditions as discussed in Note 23, of Baht 127.5 million to TOT Public Company Limited (formerly çTOT Corporation Public Company Limitedé) in 2008. The Company has estimated that the additional amount will be paid and has, therefore, recognised the provision for this obligation at its present value using discounted future cash flow at a rate of 4.6%, which reflects the market assessments at the date of acquisition, the time value of money and the risks specific to the liability. As the Company recorded this provision from acquisition of investment using the discounted future cash flow method, the net book value of the provision will increase in each subsequent period. The Company has recognised the increase in the provision as a financial cost, which is included in interest expense in the income statement for the year ended 31 December 2005, amounting to Baht 2.71 million (Note 19).
17 Share capital and premium on share capital For the year ended 31 December 2005
Issued and paid-up share capital As at 31 December 2003 Increase in share capital during the year As at 31 December 2004 Increase in share capital during the year As at 31 December 2005
Number of shares
Ordinary shares Baht
Premium on shares capital Baht
Total Baht
500,000,000 125,000,000 625,000,000 625,000,000
500,000,000 125,000,000 625,000,000 625,000,000
24,598,935 967,542,500 992,141,435 992,141,435
524,598,935 1,092,542,500 1,617,141,435 1,617,141,435
The Companyûs registered share capital as at 31 December 2005 comprised 640 million ordinary shares (31 December 2004: 631 million ordinary shares) at Baht 1 each (31 December 2004: Baht 1 each). 625 million ordinary shares were fully paid-up (31 December 2004: 625 million ordinary shares).
CS LOXINFO 102
On 30 March 2005, at the annual ordinary shareholdersû meeting of the Company, the shareholders passed a resolution to approve the allocation of 8,559,100 ordinary shares, equivalent to 1.37% of the Companyûs total issued and paid-up share capital as at the date the warrant allocation was approved, under an ESOP scheme (Grant III), by granting warrants to directors and employees of the Company and its joint venture (subsequently a subsidiary). The exercise ratio is one warrant per ordinary share. The warrants are in registered form and are non-transferable. The term of the warrants is not exceeding five years from the date on which they are granted and the warrants have no offering price. The exercise price is the weightedaverage closing price of the Companyûs shares traded on the Stock Exchange of Thailand during the period of 30 days prior to the annual ordinary shareholders meeting on 30 March 2005. One-third of the allocated warrants may be exercised to purchase ordinary shares from 31 May 2006 for the first exercise, and from 31 May 2007 and 31 May 2008 for the second and the third exercises, respectively. In addition, the shareholders also passed a resolution to approve an increase in registered share capital from 630,982,200 ordinary shares at a par value of Baht 1 each to 639,569,774 ordinary shares at a par value of Baht 1 each by issuing 8,587,574 additional ordinary shares. 28,474 of these newly issued ordinary shares will be reserved for exercising the rights under ESOP Grant I and Grant II (14,738 shares and 13,736 shares, respectively) in accordance with the exercise ratio adjustment. The remaining 8,559,100 newly issued ordinary shares will be reserved for the exercise of ESOP Grant III. The increase in registered share capital was registered with the Ministry of Commerce on 26 April 2005. On 16 May 2005, the Company approved the issuance and offering of ESOP (Grant II) by granting warrants to employees of the Company and its joint venture (subsequently a subsidiary) in accordance with the resolution of the extraordinary shareholdersû meeting on 14 June 2004. On 31 May 2005, the Company approved the issuance and offering of ESOP (Grant III) by granting warrants to employees of the Company and its joint venture (subsequently a subsidiary) in accordance with the resolution of the annual shareholdersû meeting on 30 March 2005. On 8 August 2005, at the Board of Directorsû meeting of the Company, the Board passed a resolution to approve the declaration of an interim dividend, for which the amount paid is greater than 50% of the net profit after tax. As a result, the exercise ratio and exercise price of the warrants under the ESOP Grant I, Grant II and Grant III schemes was affected, so the Company changed the exercise ratio and exercise price of the warrants as detailed below, effective from 18 August 2005 onwards. The Board of Directors will propose this to the shareholders for approval the increase in registered share capital. Exercise ratio ESOP - Grant I ESOP - Grant II ESOP - Grant III
(unit : share) Former New 1 : 1.01841 1 : 1.03515 1 : 1.01841 1 : 1.03515 1:1 1 : 1.01643
Exercise prices (Baht/unit) Former 8.837 9.122 6.930
New 8.694 8.975 6.818
CS LOXINFO 103
The details of the warrants of the Company as of 31 December 2005 are as follows: (Before dilution) Percentage
Issued dates ESOP - Grant I 14 May 2004 ESOP - Grant II 16 May 2005 ESOP - Grant III 31 May 2005
Issued units 3,096,300 2,885,900 8,559,100
of total paid-up share capital 0.50 0.46 1.37
Exercise ratio unit : share 1 : 1.03515 1 : 1.03515 1 : 1.01643
Exercise prices Exercise periods Baht/unit First Last 8.694 30 May 2004 30 April 2009 8.975 30 May 2005 30 April 2010 6.818 31 May 2006 30 May 2010
Movements in the number of outstanding warrants under the ESOP scheme are as follows: For the year ended period ended 31 December 2005 (没000 units) ESOP - Grant I Opening balance Issued during the period Exercised during the period Closing balance
ESOP - Grant II
ESOP - Grant III
Directors Employees Total Directors Employees Total Directors Employees Total 3,096 3,096 -
-
Grand Total 3,096
-
-
2,886 2,886
-
8,559 8,559
11,445
3,096 3,096
-
2,886 2,886
-
8,559 8,559
14,541
Compensation costs related to the warrants are not recognised in these financial statements for the fair value of the non-exercised warrants granted.
18 Other income Consolidated 2005 2004 Baht Baht Management fee income Interest income Refundable withholding tax refundable Others Total
14,113,402 34,938,743 21,215,922 70,268,067
9,542,748 10,818,084 20,360,832
Company 2005 2004 Baht Baht 15,156,758 4,503,849 10,202,335 29,862,942
49,651,514 4,699,298 1,561,707 55,912,519
CS LOXINFO 104
19 Interest expenses Consolidated 2005 2004 Baht Baht - Related companies (Note 28) - Bank borrowings - Finance leases - Provision from acquisition of investment (Note 16) Total
Company 2005 Baht
2004 Baht
362 30,336
2,284,836 1,778,989
2,141,232 -
28,915 1,899,510 1,728,817
2,712,650 2,743,348
4,063,825
2,712,650 4,853,882
3,657,242
20 Operating profit before interest expense The following expenditures, classified by nature, have been charged in arriving at operating profit before interest expense. Consolidated 2005 2004 Baht Baht Operating leases Staff costs Depreciation of property and equipment (Note 11) Amortisation of equipment under concession agreements (Note 12) Amortisation of goodwill (included in selling and administrative expenses) (Note 13) Amortisation of intangible assets (Note 13)
Company 2005 Baht
2004 Baht
321,759,188 302,493,729
383,339,603 246,382,512
266,352,688 172,709,586
111,495,424 178,432,688
144,549,382
124,062,618
72,718,563
48,367,964
36,221,972
44,767,469
27,403,326
27,403,326
64,556,763 3,339,546
38,565,299 1,556,300
64,556,763 1,247,445
38,565,299 1,027,488
21 Basic and diluted earnings per share Basic earnings per share is calculated by dividing the net profit for the year attributable to shareholders by the weighted average number of ordinary shares in issue during the year. For the diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potential dilutive ordinary shares, which is the weighted average number of ordinary shares which would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. The assumed proceeds from the exercise of ESOP should be considered to have been received from the issue of shares at fair value. These represent share options where the exercise price is less than the average market price of the Company没s shares during the year ended 31 December 2005.
CS LOXINFO 105
Basic and diluted earnings per share are as follows: For the year ended 31 December (consolidated and company) Net profit Number of shares Earnings per share (Baht) (shares) (Baht) 2005 2004 2005 2004 2005 2004 Basic and diluted earnings per share
293,674,849 328,240,029 625,000,000
593,920,765
0.47
0.55
The outstanding warrants are related to the director, employee and advisor share option plan and did not affect the diluted earnings per share since the average share price for the period calculated from the opening of the period or the date on which the warrants were granted to the end of the reporting period was below the exercise price of the outstanding warrants.
22 Cash flows from operating activities Reconciliation of net profit for the year to cash flows from operating activities:
Notes Net profit for the year Adjustments for: Depreciation of property and equipment Allowance for doubtful accounts Allowance for obsolete inventory Write-off of non-refundable input tax Write-off of accounts receivable and accrued income Write off obsolete inventory Write-off of equipment Write-off of intangible assets Amortisation of equipment under concession agreements Amortisation of goodwill Finance cost in relation to provision from acquisition of investment Amortisation of intangible assets other
Consolidated 2005 2004 Baht Baht
Company 2005 2004 Baht Baht
293,674,849
328,240,029
293,674,849
328,240,029
144,549,382 30,292,700 1,849,136 571,051
124,062,618 24,538,476 937,882 -
72,718,563 10,611,981 1,755,085 571,051
48,367,964 12,458,404 814,926 -
11 13
311,880 171,000 1,358,452 70
2,834,121 159
311,880 171,000 1,281,734 70
2,834,121 159
12 13
36,221,972 64,556,763
44,767,469 38,565,299
27,403,326 64,556,763
27,403,326 38,565,299
16
2,712,650
-
2,712,650
-
13
3,339,546
1,556,300
1,247,445
1,027,488
11
CS LOXINFO 106
Notes Loss on sales of property and equipment Unrealised loss (gain) on exchange rate Share of net profit from Investment - equity method Minority interests Changes in operating assets and liabilities: - trade accounts receivable and accrued income - amounts due from related parties - inventories - advance payment for service to a related party - other current assets - deposits - accounts payable and accrued expenses - amounts due to related parties - unearned income and advances received from customers - other current liabilities - other non-current liabilities Cash flows from operating activities
9
Consolidated 2005 2004 Baht Baht
Company 2005 2004 Baht Baht
1,210,504 (1,820,827)
290,011 520,541
490,249 (109,266)
46,835 40,694
(52,423) (243,950)
(902,177) 2,866,599
111,000,095 10,936 (33,498,965)
(41,067,772) 2,239,709 (37,231,163)
23,015,291 2,776,024 (953,852)
(62,150,453) (21,415) (3,775,028)
38,091,200 (23,408,566) 8,442,321
(75,960,000) (29,173,111) 1,907,505
38,091,200 1,740,861 (1,061,750)
(75,960,000) (22,553,415) (25,076)
64,971,652 (3,925,011)
86,678,222 3,174,103
33,551,647 (745,973)
126,671,981 (794,720)
(213,635,392) 2,150,648 1,201,232 530,102,905
(32,875,825) (2,097,125) 2,929,155 446,801,025
(5,633,826) 1,114,006 1,299,158 282,822,218
58,320,101 1,753,327 3,170,654 260,709,475
(287,767,948) (223,725,726) -
23 Acquisition of investment Teleinfo Media Public Company Limited (Formerly çTeleinfo Media Company Limitedé) On 29 June 2005, the Company acquired an additional 25.51 million common and preferred shares in Teleinfo Media Public Company Limited (çTMCé) at Baht 25 per share (representing a 36.75% shareholding) from TOT Public Company Limited (formerly çTOT Corporation Public Company Limitedé) (çTOTé). The acquisition was subject to the following significant conditions: ë On 29 June 2005, the Company paid an amount of Baht 20 per share to purchase these shares. ë The Company will pay TOT an additional Baht 5 per share if TMC achieves an aggregate total revenue from the fiscal year 2006 to 2007 of Baht 2,000 million or more. The payment is due within 30 days after TMCûs financial statements for the year ending 31 December 2007 are approved by a certified public accountant authorised by the Securities and Exchange Commission (Note 16).
CS LOXINFO 107
36.75% of the net fair value of assets and liabilities acquired at the acquired date can be summarised as follows:
Cash and cash equivalents Trade accounts receivable and accrued income, net Inventories Other current assets Leasehold improvements and equipment, net (Note 11) Intangible assets, net (Note 13) Deposits Trade accounts payable Amount due to related party Unearned income and advance from customers Accrued expenses Other current liabilities Other non-current liabilities Fair value of net assets Total purchase consideration comprised: Cash payment at the acquisition date Expected additional payments under share purchase obligation Total purchase consideration, net (Note 9) Goodwill (Note 13) Net cash outflow on acquisition of subsidiary, net of cash and cash equivalents in a subsidiary
Net book value Baht 没000
Fair value adjustment Baht 没000
Net fair value Baht 没000
122,888 139,111 55,516 11,842 47,374 1,563 1,715 (18,797) (182) (161,754) (4,928) (5,130) (438)
(1,922) -
122,888 139,111 55,516 11,842 45,452 1,563 1,715 (18,797) (182) (161,754) (4,928) (5,130) (438) 186,858 511,850 112,628 624,478 437,620 388,962
Goodwill recognised from the acquisition of these additional common and preferred shares in TMC of Baht 437.62 million is presented as goodwill in the consolidated balance sheet (Note 13) and is amortised using the straight-line method over its estimated useful life of 11 years. The Company has completed the appraisal of the fair value of assets and liabilities acquired and made an adjustment to leasehold improvements and equipment to reflect its fair value. The fair value of other assets and liabilities approximates their book value. The difference between the net book value and net fair value of Baht 1.9 million was adjusted through goodwill.
24 Guarantees As at 31 December 2005, the Group had commitments with its bankers, whereby the banks have issued letters of guarantee in respect of business contracts and others amounting to approximately Baht 23 million (2004: Baht 31 million).
CS LOXINFO 108
25 Commitments As at 31 December 2005, future minimum lease payments under non-cancelable operating lease agreements are as follows: Consolidated 2005 2004 Baht รป000 Baht รป000 Not later than 1 year More than 1 year but less than 5 years Total
115,470 55,344 170,814
118,545 224,713 343,258
Company 2005 2004 Baht รป000 Baht รป000 95,119 39,373 134,492
91,167 203,180 294,347
26 Legal reserve Movements of the legal reserve are as follows: Consolidated 2005 Baht Opening balance Reserve increase during the year Closing balance
20,323,183 14,683,742 35,006,925
2004 Baht 3,911,182 16,412,001 20,323,183
Company 2005 Baht 20,323,183 14,683,742 35,006,925
2004 Baht
3,911,182 16,412,001 20,323,183
Under the Public Limited Company Act. B.E. 2535, the Company is required to set aside as a legal reserve at least 5% of its net profit after accumulated deficit brought forward (if any) until the reserve is not less than 10% of the registered capital. The legal reserve is non-distributable.
27 Segment information Financial information by business segment: For the year ended 31 December 2005 (Baht รป000) Satellite uplinkdownlink Internet Media and Consolidation services services advertising eliminations Group Revenues from sales and services Share of net profit from investments in associate Cost of sales and services Selling and administrative expenses
35,104
1,399,369
816,376
(26,052)
52 (956,663)
(268,534)
-
(413,239)
(362,717)
(2,193)
2,248,656
52 - (1,251,249) 2,193
(773,763)
CS LOXINFO 109
For the year ended 31 December 2005 (Baht 没000)
Segment results Operating profit Other income Gain on foreign exchange Profit before interest Interest expenses Minority interest Net profit for the year Segment assets Associate Total segment assets Segment liabilities Depreciation (Note 11) Amortisation of equipment under concession agreements (Note 12) Amortisation of goodwill (Note 13) Amortisation of intangible assets - other (Note 13) Total depreciation and amortisation
Satellite uplinkdownlink services 9,052
Internet services 29,519
39,316 39,316 2,080 5,360
1,521,275 3,674 1,524,949 656,457 109,882
1,507,908 1,507,908 452,126 29,307
(256,787) (256,787) (256,787) -
Group 223,696 223,696 70,268 2,210 296,174 (2,743) 244 293,675 2,811,712 3,674 2,815,386 853,876 144,549
4,174
32,048
-
-
36,222
-
8,067
56,490
-
64,557
-
1,247
2,093
-
3,340
9,534
151,244
87,890
-
248,668
Media and Consolidation advertising eliminations 185,125 -
For the year ended 31 December 2004 (Baht 没000)
Revenues from sales and services Share of net profit from investments in associate Cost of sales and services Selling and administrative expenses
Satellite uplinkdownlink services
Internet services
42,516
1,425,538
515,064
(824)
1,982,294
(29,875)
902 (868,945)
(156,153)
-
902 (1,054,973)
-
(389,535)
(224,526)
824
(613,237)
Media and Consolidation advertising eliminations
Group
CS LOXINFO 110
For the year ended 31 December 2004 (Baht û000) Satellite uplinkdownlink services 12,641
Internet services 167,960
Segment assets Associate Total segment assets
71,294 71,294
1,632,218 3,622 1,635,840
854,226 854,226
-
2,557,738 3,622 2,561,360
Segment liabilities
29,833
433,175
199,022
-
662,030
6,922
104,147
12,994
-
124,063
4,174 -
40,593 8,067
30,498
-
44,767 38,565
-
1,556
-
-
1,556
11,096
154,363
43,492
-
208,951
Segment results Operating profit Other income Loss on foreign exchange Profit before interest Interest expenses Minority interest Net profit for the year
Depreciation Amortisation of equipment under concession agreements Amortisation of goodwill Amortisation of intangible assets - other Total depreciation and amortisation
Media and Consolidation advertising eliminations 134,385 -
Group 314,986 314,986 20,361 (176) 335,171 (4,064) (2,867) 328,240
Thailand is the home country of the Group and the operating territory. The Group is organised into the following business segments : ë Satellite uplink-downlink services. ë Sales and services relating to the Internet business. ë Media and advertising.
28 Related party transactions The Company is an associate of Shin Satellite Public Company Limited, a company incorporated in Thailand and a subsidiary of Shin Corporation Public Company Limited (collectively çShin Groupé). Shin Broadband Internet (Thailand) Company Limited, which is a wholly owned subsidiary of Shin Satellite Public Company Limited, owns 40.02% of the Companyûs share capital, and Point Asia Dot Com (Thailand) Company Limited, a subsidiary of Loxley Public Company Limited, and Singapore Telecommunication Limited (SingTel) own 8.66% and 13.45% of the Companiesû share capital, respectively. Transactions with entities within these group companies are recognised as related party transactions of the Company.
CS LOXINFO 111
During the year, the Company carried out transactions with its related parties, the terms of which were negotiated on an armûs length basis in the ordinary course of business and according to normal trade conditions. Service income is determined on a mutually agreed basis as a fixed monthly fee. Consulting and management service fees are charged on a mutually agreed basis as a percentage of assets. The following significant transactions were carried out with related parties: a) Revenues Consolidated 2005 2004 Baht û000 Baht û000 Sales and service income: Parent company Major shareholder and its related parties Subsidiary Associate Joint venture Other related parties Other income: Major shareholder and its related parties Subsidiary Associate Other related parties Total revenues
Company 2005 2004 Baht û000 Baht û000
115,578 7 236 15,805
5,859 39,303 1 417 40,877
60,734 490 7 643 15,805
5,859 39,294 158 481 30,247
6,052 161 137,839
1,154 221 87,832
5,885 15,352 161 99,077
1,060 49,652 221 126,972
Consolidated 2005 2004 Baht û000 Baht û000
2005 Baht û000
Company 2004 Baht û000
b) Expenses
Purchase of services and goods: Parent company Major shareholder and its related parties Subsidiary Associate Other related parties Other expenses: Parent company Major shareholder and its related parties Subsidiary Associate Other related parties Interest expenses: Subsidiary Total expenses
150,680 1 8,180
9,313 102,825 33,826
150,558 140,990 4 8,180
9,313 71,942 151,124 11,031
78,325 4,651 6,616
369 47,291 6,467 4,201
68,401 1,026 4,614 6,616
279 36,741 3,562 2,748
248,453
204,292
2,141 382,530
29 286,769
CS LOXINFO 112
c) Outstanding balances arising from sales/purchases of goods/services/and expenses Consolidated 2005 2004 Baht 没000 Baht 没000 Trade accounts receivable Major shareholder and its related parties Subsidiary Associate Joint venture Other related parties Less Allowance for doubtful accounts Total trade accounts receivable Accrued income Major shareholder and its related parties Less Allowance for doubtful accounts Total accrued income Total trade accounts receivable and accrued income Amounts due from related parties Subsidiary Associate Total amounts due from related parties Receivable from reduction in share capital of a subsidiary Subsidiary Total Trade accounts payable Major shareholder and its related parties Subsidiary Associate Other related parties Total trade accounts payable Amount due to related parties Major shareholder and its related parties Subsidiary Associate Other related parties Total amount due to related parties Accrued expenses Major shareholder and its related parties Subsidiary Associate Other related parties Total accrued expenses
Company 2005 2004 Baht 没000 Baht 没000
49,057 6,423 55,480 (9,720) 45,760
63,877 5 12,471 76,353 (12,582) 63,771
36,134 229 4,313 40,676 (9,720) 30,956
58,995 277 5 1 4,871 64,149 (12,582) 51,567
7,233 (3,913) 3,320
7,087 (3,913) 3,174
7,233 (3,913) 3,320
7,087 (3,913) 3,174
49,080
66,945
34,276
54,741
-
11 11
1,253 1,253
4,029 4,029
-
-
256,558 256,558
-
74,728 3,735 78,463
60,100 5,098 1,559 66,757
70,255 7,600 3,735 81,590
48,481 40,773 1,991 1,122 92,367
1,507 263 1,770
4,153 8 1,352 5,513
-
746 746
163 816 979
1,620 1,572 3,192
163 816 979
1,620 57 1,572 3,249
CS LOXINFO 113
d) Short-term borrowing from subsidiary and related party The movements of short-term borrowing from subsidiary and related party can be analysed as follows: Consolidated 2005 2004 Baht û000 Baht û000 Opening balance Borrowing from subsidiary Repayment of borrowing Closing balance
150,000 (150,000) -
6,102 (6,102) -
Company 2005 2004 Baht û000 Baht û000 150,000 (150,000) -
30,000 (30,000) -
e) Advance payment to a related party Consolidated 2005 2004 Baht û000 Baht û000 Advance payment to a related party for service Recognised as expenses during the year Total
105,960 (38,091) 67,869
110,000 (4,040) 105,960
Company 2005 2004 Baht û000 Baht û000 105,960 (38,091) 67,869
110,000 (4,040) 105,960
The Company made an advance payment to a related party for Internet network service. The prepayment is charged to the income statements based on the service fee and the period as specified in the contract. f) Warrants of Shin Corporation Public Company Limited and Shin Satellite Public Company Limited were granted to a member of the Board of Directors of the Company Shin Satellite Public Company Limited, the parent company of Shin Broadband Internet (Thailand)Company Limited, and Shin Corporation Public Company Limited, the ultimate parent company of the Shin Group, issued their warrants to a member of the Board of Directors of the Company. The warrants of both companies are in registered form, are non-transferable and have no offering price. The terms of the warrants are not exceeding five years. The details of the warrants are shown below: Shin Satellite Public Company Limited
ESOP - Grant I ESOP - Grant II ESOP - Grant III ESOP - Grant IV
Issued dates
Issued units
27 March 2002 30 May 2003 31 May 2004 31 May 2005
7,969,400 4,333,100 5,894,200 7,562,100
Before dilution Percentage of Exercise Exercise ratio total paid - up prices (unit :share) share capital (Baht/unit)
1 : 2.0449 1 : 2.0449 1 : 1.02245 1 : 1.02245
1.83 1.01 0.67 0.86
Exercise period First Last
13.081 26 March 2003 26 March 2007 6.279 30 May 2004 30 May 2008 13.913 31 May 2005 31 May 2009 16.441 31 May 2006 31 May 2010
CS LOXINFO 114
Shin Corporation Public Company Limited Before dilution
Issued dates
Percentage of Exercise Issued Exercise ratio total paid - up prices units (unit :share) share capital (Baht/unit)
ESOP - Grant I 27 March 2002 18,336,300 ESOP - Grant II 30 May 2003 12,222,100 ESOP - Grant III 31 May 2004 8,823,100 ESOP - Grant IV 31 May 2005 8,329,800
1:1.02671 1:1.02671 1:1.02671 1:1.01326
0.63 0.41 0.30 0.28
17.337 13.314 35.463 41.214
Exercise period First Last
27 March 2003 26 March 2007 31 May 2004 30 May 2008 31 May 2005 30 May 2009 31 May 2006 30 May 2010
g) Directorsû remuneration In 2005, total directorsû remuneration was Baht 2.46 million (2004: Baht 1.87 million). Directorsû remuneration represents meeting fees, as approved by the shareholders of the Group and the Company at their annual ordinary shareholdersû meetings. h) Special reward program of Teleinfo Media Public Company Limited In 2002, Teleinfo Media Public Company Limited (çTMCé) granted the rights to receive a special reward (çSpecial Reward Programé) to the eligible employees of TMC. The rights will be granted once a year for five consecutive years and can be exercised after the first year and within five years after the grant date. The calculation of the Special Reward Program Grant I to Grant III shall be based on the improvement in operating performance on the exercise date compared with the grant date and other factors. However, the reward will not exceed budget for each individual. On 26 April 2005, at the Board of Directorsû meeting of TMC, it was resolved to approve the fourth Special Reward Program to issue and offer warrants of TMC to its employees under the Companyûs ESOP scheme(Grant III) amounting to 1,525,000 shares (Note 17). Movements of the Special Reward Program Grant I to Grant III are as follows:
For the year ended 31 December 2005 Opening balance Issued Exercised Closing balance
Grant I (Units)
Grant II (Units)
Grant III (Units)
Total (Units)
1,784,037 (1,784,037) -
250,786 (125,393) 125,393
196,443 (65,481) 130,962
2,231,266 (1,974,911) 256,355
TMC had paid special reward program to eligible employees in April 2005 amounting to Baht 3,531,886
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29 Financial instruments The principal financial risk faced by the Group is credit risks. It has no significant concentrations of credit risk. Fair value The carrying amounts of financial assets and liabilities approximate fair value.
30 Dividend payment At the annual ordinary shareholdersû meeting of the Company on 30 March 2005, the shareholders passed a resolution to approve a dividend payment of Baht 0.25 per share totaling Baht 156.25 million. The Company paid the dividend on 11 April 2005. The Board of Directors at its meeting on 8 August 2005 passed a resolution to approve the payment of an interim dividend of Baht 0.12 per share totaling Baht 75 million. The Company paid the dividend on 2 September 2005.
31 Subsequent events a) Changes in major shareholders On 23 January 2006, the Shinawatra family, the principal shareholders of the Group, sold all shares of Shin Corporation Public Company Limited (çShiné), representing 49.595% of the paid-up share capital, to CedarHoldings Limited (çCedaré) and Aspen Holdings Limited (çAspené), part of the Temasek Holdings (Pte) Ltd. (çTemaseké) group. Consequently, the Shinawatra family and its related parties ceased to be related parties of the Group from the date of the sale. The Company was informed by Shin that Cedar and Aspen obtained a waiver from making tender offer as prescribed in Clause 8 of the Notification of the Securities and Exchange Committee No. Gor Jor. 53/2545 for all shares of the Company. This is because the Takeover Panel of Thailand viewed that Cedar and Aspen do not intend to acquire the shares of the Company and these shares do not constitute a substantial portion of the assets of Shin. b) Proposed dividend payment At the Board of Directorsû meeting of the Company on 24 February 2006, the Board of Directors passed a resolution to recommend to the annual general meeting of shareholders the payment of dividends for the year 2005, at the rate of Baht 0.33 per share. However, the proposed dividends must be approved by the shareholders at their meeting.
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c) Proposed allocation of warrants of the Company granted to directors, employees of the Company and its subsidiary On 24 February 2006, at the Board of Directorsû meeting of the Company, the Board of Directors passed a resolution to approve the allocation of 8,354,300 ordinary shares, equivalent to 1.34 % of the Companyûs total paid-up share capital as at the date on which the warrant allocation will be approved, under an ESOP scheme (Grant IV), by granting warrants to directors and employees of the Company and its subsidiary. The exercise ratio will be one warrant per ordinary share. The warrants will be in registered form and will be non-transferable. The term of the warrants will not be exceed 5 years from the date on which they are granted and the warrants will have no offering price. The exercise price will be the weighted-average closing price of the Companyûs shares traded on the Stock Exchange of Thailand during the period of 30 days prior to the shareholders meeting on 21 April 2006. One-third of the allocated warrants may be exercised to purchase ordinary shares; one year from the grant date for the first exercise, and two years and three years from the grant date for the second and third exercises, respectively. In addition, the shareholders also passed a resolution to approve an increase in registered share capital from 639,569,774 ordinary shares at a par value of Baht 1 each to 647,924,074 ordinary shares at a par value of Baht 1 each. The Board of Directorsû will propose this to the shareholders for further approval. As a result of the payment of interim dividend on 2 September 2005, the exercise ratio of the warrants issued under ESOP Grant I, Grant II and Grant III has been affected (Note 17). At the Board of Directorsû meeting of the Company on 24 February 2006, a resolution was passed to approve the issuance of 1,096,000 additional ordinary shares to support the change in the exercise ratio, equivalent to 0.18 % of the total issued and paid-up share capital of the Company as of 31 December 2005. The Board of Directors will propose this to the shareholders for further approval.
Remuneration of Auditors Auditors In 2005, the company and its subsidiaries paid fees and follow: ë Audit fee of Baht 1.64 million to the auditor of the company and its subsidiaries. ë Other fees, revenue auditing and observation in the inventory destruction, totaling Baht 0.01 million There is no commitment to pay for any services in respect of the agreements in year 2005.
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Investor Information Investor Relations Investors should contact the Investor Relations Department to request information about CS LoxInfo or its subsidiaries and associate companies: Investor Relations Department CS LoxInfo Public Company Limited 973 President Tower 11th Floor, Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330, Thailand. Tel : +662 263 8000 Ext. 5182 Fax : +662 263 8102 E-mail : ir@csloxinfo.net Website : www.csloxinfo.com CS LoxInfo is listed on the Stock Exchange of Thailand (SET) SET ticker Reuters Bloomberg
CSL CSL.BK CSL TB
Foreign limit : 49% Fiscal year ends December 31 External Auditor : PriceWaterhouseCoopers ABAS Limited
Dividend Policy The Company没s dividend policy is to pay dividend no less than 40 percent of profit after tax, unless subject to the economic and future project of the Company and the subsidiaries. Loxley Information Services Company Limited and Teleinfo Media Public Company Limited its subsidiaries of the Company have the dividend policy is to pay dividend no less than 50 percent of net profit.
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Glossary The Company or CS LoxInfo LoxServe CSS TMC SBI SSA SHIN PA SingTel CAT TOT NTC Dial-Up ADSL ISDN Leased Line IPSTAR iPTV Broadband Transponder Type I License
Yellow Pages White Pages
CS LoxInfo Public Company Limited Loxley Information Services Limited CS LoxInfo Solutions Company Limited Teleinfo Media Public Company Limited Shin Broadband Internet (Thailand) Company Limited Shin Satellite Public Company Limited Shin Corporation Public Company Limited Point Asia Dot Com (Thailand) Company Limited Singapore Telecommunications Limited CAT Telecommunications Public Company Limited TOT Public Company Limited National Telecommunications Commission Internet connection over a telephone line using a 28 Kbps or 56 Kbps modem. Asymmetric Digital Subscriber Line, a broadband Internet connection technology that utilizes existing copper telephone lines. Integrated Services Digital Network, an Internet connection technology over digital telephone lines or normal telephone wires. A permanent connection over a telephone line on leased circuit that is a dedicated Internet connection. A high-speed, two-way, broadband Internet connection via satellite, using proprietary technology owned by SSA. A Technology to broadcast video or Television programs via the internet, using IPSTAR or ADSL. A type of high-speed data transmission in which a single medium (wire) can carry Sufficient data to make real-time video possible. An electronic device, inside a satellite, that amplifies signals before returning then to a receives on the Earth. A license for an Internet Service Provider who provides a service without owning a network, i.e. for internet services or other service as the Nationnal Telecommunication Committee thinks appropriate. Telephone directories for products and services Telephone directories for individuals in Bangkok and Greater Bangkok