Enclosure No. 1
Notice of the Allocation of Newly Issued Ordinary Shares True Corporation Public Company Limited
Important Disclaimers
By accepting delivery of this notice of the allocation of newly issued ordinary shares (the “Notice of Allocation”) of True Corporation Public Company Limited (the “Company”), shareholders acknowledge and agree to the disclaimers and conditions set forth below. This offering of the newly issued ordinary shares to the existing shareholders of the Company in proportion to their respective shareholdings is an offering of securities in Thailand pursuant to Section 33 of the Securities and Exchange Act B.E. 2535 (as amended). The newly issued ordinary shares have not been and will not be registered with any securities regulatory authority or under the laws of any other jurisdiction. The shareholders are prohibited to disclose, publish or distribute the Notice of Allocation, whether in whole or in part. This Notice of Allocation does not constitute an offering to sell or the solicitation of an offering to subscribe for or to buy any securities of the Company in any other country. The Company urges that the shareholders who accept delivery of this Notice of Allocation rely upon their own examination of the restrictions regarding investment in the securities and offering to sell the securities in the countries of their domicile or nationality. The Company will not be responsible for any violation of any of these restrictions by any person.
Contents Page
Part I: Information regarding the Allocation of Newly Issued Ordinary Shares 1. Date and Number of the Board of Directors’ Meeting that Approved the 1 Allocation of Newly Issued Ordinary Shares 2. Details of the Allocation of Newly Issued Ordinary Shares 1 3. Subscription Agents 2 4. Allocation of the Newly Issued Ordinary Shares 3 5. The Record Date to Determine the List of the Company’s Shareholders Entitled 4 to Subscribe for the Newly Issued Ordinary Shares under the Rights Offering 6. The Shareholders Registry Book Closure Date to Compile the List of 4 Shareholders Entitled to Subscribe for the Newly Issued Ordinary Shares under the Rights Offering Pursuant to Section 225 of the Securities and Exchange Act 7. Subscription and Payment Method 5 8. Objectives for the Capital Increase 12 9. Benefits which the Company will Receive from the Capital Increase / 12 Share Allocation 10. Benefits which the Shareholders will Receive from the Capital Increase / 12 Share Allocation 11. Dividend Policy and Rights to Receive Dividend from the Newly Issued 12 Ordinary Shares 12. Other Information that may be Necessary for Shareholders in Investing in 13 the Shares of the Company
Part II: Information of True Corporation Public Company Limited 1. Name and Location of the Company 14 2. Type of Business and Nature of the Main Operations of the Company 14 3. List of Board of Directors, Executive Officers and Major Shareholders 39 4. History of Capital Increases and Dividend Payments for the Past 3 Years 42 5. Company Subsidiaries and Associated Companies 43
Part III: Financial Information Comparative Financial Information for the Past 3 Years 52
Part I Information regarding the Allocation of Newly Issued Ordinary Shares
True Corporation Public Company Limited
Part I: Information regarding the Allocation of Newly Issued Ordinary Shares
1. Date and Number of the Board of Directors’ Meeting that Approved the Allocation of Newly Issued Ordinary Shares The Board of Directors' Meeting No. 4/2014 held on 9th June 2014
2. Details of the Allocation of Newly Issued Ordinary Shares
Type of shares : Ordinary shares Existing paid-up capital : Baht 145,302,152,660 Paid-up capital to be increased : Baht 56,482,858,180 for the allocation of the newly In the case that the Company could sell all newly issued ordinary shares to the issued ordinary shares offered to its existing Company’s existing shareholders in proportion to their respective shareholders in proportion to shareholdings (Rights Offering), the paid-up their respective shareholdings capital of the Company will increase to Baht 201,785,010,840 after the offering of the newly issued ordinary shares to the Company’s existing shareholders in proportion to their respective shareholdings, and the number of the total issued shares of the Company will be 20,178,501,084 shares at the par value of Baht 10 per share Numbers of shares offered : Up to 5,648,285,818 newly issued ordinary shares Offering price : Baht 6.45 per share Subscription ratio : 2.5725 existing ordinary shares being entitled to subscribe for 1 newly issued ordinary share, whereby the shareholders shall have the right to subscribe for the shares in excess of their entitlements in proportion to their respective shareholdings for each round until there are inadequate newly issued ordinary shares remaining unsubscribed for allocating to the existing shareholders in proportion to their respective shareholdings Allocation method : The Company will allocate up to 5,648,285,818 newly issued ordinary shares of the Company with the par value of Baht 10 per share to the existing shareholders of the Company in proportion to their respective shareholdings (Right Offering), at the offering price of Baht 6.45 per share and at the ratio of 2.5725 existing ordinary shares being entitled to subscribe for 1 newly issued ordinary share. Any fraction of a share shall be disregarded. For the calculation of the right of each shareholder to subscribe for the newly issued ordinary shares, if there is a fraction of the newly issued ordinary share resulting from the calculation pursuant to
1 True Corporation Public Company Limited
the newly issued ordinary shares allocation ratio for each shareholder, the Company will disregard such fraction in total. For example, if a shareholder holds 100 shares, after the calculation pursuant to the newly issued ordinary shares allocation ratio, the number of shares allocated to such shareholder will be 38.87 shares (100 divided by 2.5725). In this case, the Company will disregard the fraction (0.87), and such shareholder will be entitled to subscribe for 38 newly issued ordinary shares. Method for fractions : In the case that there is any fraction of a share, such fraction will be disregarded. Such fraction of a share shall be added to the newly issued ordinary shares remaining after the subscription where certain shareholders have waived their rights to subscribe for newly issued ordinary shares or failed to pay for the subscription price or for any other reasons whatsoever. The remaining newly issued ordinary shares shall be allocated to every shareholder who has oversubscribed the shares, whereby each round of reallocation will be made accordingly in proportion to shareholding of each oversubscribing shareholder, until there are inadequate newly issued ordinary shares remaining unsubscribed for allocating to the existing shareholders in proportion to their respective shareholdings.
3. Subscription Agents Maybank Kim Eng Securities (Thailand) Public Company Limited Head Office and All Domestic Branches 999/9 The Offices at Central World, 20th – 21st, 25th Floor, Rama 1 Road Pathumwan, Bangkok 10330 Tel. 0-2658-6300 Bualuang Securities Public Company Limited, Head Office Only 191 Silom Road, 29th Floor Silom Complex Building, Bangrak Bangkok 10500 Tel. 0-2618-1000 SCB Securities Company Limited, Head Office Only 19 Tower 3 SCB Park Plaza, 20th Floor, Ratchadapisek Road Chatuchak, Chatuchak Bangkok 10900 Tel. 0-2949-1999
2 True Corporation Public Company Limited
Bangkok Bank Public Company Limited, Head Office and All Domestic Branches (Except for Micro Branches) Head Office, 333 Silom Road Silom, Bang Rak Bangkok 10500 Tel. 1333 or 0-2645-5555 Siam Commercial Bank Public Company Limited Head Office and All Domestic Branches Head Office, 9 Ratchadaphisek Road Chatuchak, Chatuchak Bangkok 10900 Tel. 0-2777-7777
4. Allocation of the Newly Issued Ordinary Shares (4.1) In the case that a shareholder subscribes for the newly issued ordinary shares pursuant to his/her right or less than his/her right to receive the allocation thereof, such shareholder who expresses an intention to subscribe for the newly issued ordinary shares pursuant to his/her right or less than his/her right to receive the allocation thereof will receive the allocation of all newly issued ordinary shares for which he/she has subscribed. (4.2) In the case that there are newly issued ordinary shares remaining from the allocation in connection with the Rights Offering, the oversubscribing shareholders will receive the allocation of the newly issued ordinary shares oversubscribed therefore as follows: (a) In the case that the number of the remaining newly issued ordinary shares exceeds the demand of all oversubscribing shareholders, those oversubscribing shareholders will receive the number of oversubscribed shares pursuant to their respective demands in proportion to their respective shareholding. (b) In the case that the number of the remaining newly issued ordinary shares is less than the demand of all oversubscribing shareholders, those oversubscribing shareholders will receive certain number of oversubscribed shares pursuant to the following formula: Number of oversubscribed shares to be allocated = Number of the newly issued ordinary shares remaining after the allocation pursuant to the Rights Offering x Respective shareholding of each oversubscribing shareholder
3 True Corporation Public Company Limited
In this regard, the number of newly issued ordinary shares to which each shareholder is entitled to be allocated shall not exceed the number of shares specified in the Subscription Form for Newly Issued Ordinary Shares and duly and fully paid for by such shareholder. Example: The remaining newly issued ordinary shares are 555 shares.
Shareholder Respective Number of newly issued Number of newly issued shareholding ordinary shares to be ordinary shares of each allocated more than the oversubscribed to be oversubscribing right to receive the allocated after shareholder (%) allocation disregarding the fraction Shareholder A 30 555x30/100 = 166.5 166 Shareholder B 20 555x20/100 = 111.0 111 Shareholder C 50 555x50/100 = 277.5 277 Total 100 555 554 (c) In case there are remaining newly issued ordinary shares after the allocation pursuant to (b) above, the remaining shares are to be re-allocated to each of the oversubscribing shareholders who are not fully allocated, whereby the reallocation will be made accordingly in proportion to the shareholding of each oversubscribing shareholder. Multiplying the respective shareholding of each oversubscribing shareholder with the remaining newly issued ordinary shares will equal to the number of the newly issued ordinary shares that each oversubscribing shareholder is entitled to be allocated (any fraction shall be disregarded). The number of the newly issued ordinary shares that each shareholder is entitled to be allocated shall not exceed the numbers of the newly issued ordinary shares that each shareholder specifies in the Subscription Form for Newly Issued Ordinary Shares duly and fully pay for. The newly issued ordinary shares will be reallocated to the oversubscribing shareholders according to the procedure as prescribed in this sub-paragraph (c) until there are inadequate unsubscribed newly issued ordinary shares for allocating to the existing shareholders in proportion to their respective shareholdings. In the case that there are newly issued ordinary shares remaining from the allocation to existing shareholders in proportion to their respective shareholdings in the final round, the Company will decrease its authorized capital by cancelling the newly issued ordinary shares remaining from the Rights Offerings.
5. The Record Date to Determine the List of the Company’s Shareholders Entitled to Subscribe for the Newly Issued Ordinary Shares under the Rights Offering 4th August 2014
6. The Shareholders Registry Book Closure Date to Compile the List of Shareholders Entitled to Subscribe for the Newly Issued Ordinary Shares under the Rights Offering Pursuant to Section 225 of the Securities and Exchange Act 5th August 2014
4 True Corporation Public Company Limited
7. Subscription and Payment Method (7.1) Subscription Period During 22nd August 2014 and 25th - 28th August 2014 during the business hours of the head office or each branch of the Subscription Agents as specified in 3. (7.2) Place for Subscription and Payment For institutional shareholders or the custodians authorized to subscribe on their behalves The shareholders who wish to subscribe for the newly issued ordinary shares shall submit the subscription documents and make full payment for the subscription only at Maybank Kim Eng Securities (Thailand) Public Company Limited, Head Office. For individual and corporate shareholders The shareholders who wish to subscribe for the newly issued ordinary shares shall submit the subscription documents and make full payment for the subscription to the Subscription Agents as specified in 3. (7.3) Method of Subscription and Payment The shareholders who wish to subscribe for the newly issued ordinary shares must clearly and correctly complete and sign the Subscription Form for Newly Issued Ordinary Shares. The subscribers or their proxies shall submit the subscription documents and make full payment for their subscription according to the number of shares to be subscribed for, at the place for subscription and payment (as specified in 7.2) during the subscription period. The payment of subscription price shall be made by any one of the methods described below. (7.3.1) Payment made by cash shall be made only at the head office or each branch of the Subscription Agents who are commercial banks as specified in 3. during 22nd August 2014 and 25th- 28th August 2014 during the business hours of the head office or each branch of such Subscription Agents. (7.3.2) Payment made by cheque, cashier cheque or bank draft shall be crossed “A/C Payee Only” and made payable to “Subscription A/C for TRUE Newly Ordinary Shares” during 22nd August 2014 and 25th - 26th August 2014 during the business hours of the head office or each branch of the Subscription Agents (as specified in 3.) and on 27th August 2014 starting from the opening hour of the head office or each branch of the Subscription Agents (as specified in 3.) until 12.00 p.m. Cheque, cashier cheque or bank draft must be collectible within the next business day by the same clearing house and the date on the cheque must be the same date as the date on which the subscription is made but must not be later than 27th August 2014. Each subscriber, in any case, shall submit one cheque, cashier cheque or bank draft per one Subscription Form for Newly Issued Ordinary Shares only. (7.3.3) Payment made by wire transfer can be done by making a debit to the bank account through the Subscription Agents’ teller counters (whereby the Subscription Agents will only accept the money transferred from the accounts that are opened with them) during 22nd August 2014 and 25th - 28th August 2014 during the business hours of the head office or each branch of the Subscription Agents (as specified in 3.) payable to “Subscription A/C for TRUE Newly Ordinary Shares”.
5 True Corporation Public Company Limited
In this regard, the Company by the Subscription Agents hereby reserves the right to permit the subscription and the payment of the subscription price by other methods as it deems appropriate. (7.4) Other Conditions for Subscription (7.4.1) The shareholder who has subscribed and paid the subscription price may not cancel his/her subscription. (7.4.2) In the case that the payment of the subscription price is made by cheque or cashier cheque or bank draft, the payment of such subscription price will be deemed complete once the bank has cleared the amount specified in the cheque, and the subscription for the newly issued ordinary shares will be deemed complete only once the Company and/or the Subscription Agents have collected the payment of the subscription price. (7.4.3) If the shareholder fails to make the subscription payment in full or to comply with the method of payment of the subscription price or fails to proceed with the subscription according to the specified conditions and methods, which prevents the subscription price from being collected within the subscription period, or the Company and/or the Subscription Agents are unable to collect the payment of the subscription price (resulting from any cause which is not the fault of the Company and/or the Subscription Agents), either wholly or partly, within the subscription period, or the shareholder subscribes for the newly issued ordinary shares by any method other than those specified in this Notice of Allocation of Newly Issued Ordinary Shares or incompletely submits the subscription documents, the Company and/or the Subscription Agents will consider that such shareholder waives his/her right to subscribe for the newly issued ordinary shares, and the Company and/or the Subscription Agents hereby reserves the right not to allocate the newly issued ordinary shares to such shareholder. (7.4.4) In the case that the subscriber incompletely, unclearly or inconsistently fills in the details in the Subscription Form for Newly Issued Ordinary Shares, the Company and/or the Subscription Agents hereby reserves the right to use the details in the subscription documents as it deems appropriate in allocating the newly issued ordinary shares. Nevertheless, in such case, the Company and/or the Subscription Agents will be entitled to consider that such shareholder waives his/her right to subscribe for the newly issued ordinary shares, and the Company and/or the Subscription Agents hereby reserves the right not to allocate the newly issued ordinary shares to such shareholder. (7.4.5) In the case that the allocation of the newly issued ordinary shares in the first round or the allocation of the newly issued ordinary shares to the oversubscribing shareholder causes the shareholding of foreign shareholders to exceed 49% of the total issued shares of the Company, the Company hereby reserves the right not to allocate the newly issued ordinary shares to such foreign shareholders, whereby such foreign shareholders may not receive the allocation of the newly issued ordinary shares or may only receive a partial allocation thereof. In such
6 True Corporation Public Company Limited
a case, the Company will not compensate any of such shareholders for any damage incurred thereof and such shareholders may not claim for any damages from the Company. In this regard, the Company by the Subscription Agents will make a refund of the subscription payment for the portion of the newly issued ordinary shares that have not been allocated or have not been fully allocated pursuant to the details as specified in (7.7) below. (7.4.6) The shareholders shall be responsible for any related expenses and bank’s fees (if any). (7.4.7) The Company by the Subscription Agents does not accept any subscription by mail. (7.4.8) In the case that the shareholders receive the Certificates of the Subscription Entitlement for more than one shareholder registration number, the shareholders must prepare the subscription documents in accordance with the number of the shareholder registration number for which they have received the Certificates of the Subscription Entitlement; that is, one set of subscription document is only for one shareholder registration number. If the shareholders make a subscription with one shareholder registration number by combining rights to receive the allocation of the newly issued ordinary shares of every shareholder registration number as a single entry or by specifying such details in a single set of the subscription documents, the subscriber may not fully receive the allocation of the newly issued ordinary shares pursuant to the aggregated rights as per every shareholder registration number, and the Company hereby reserves the right to allocate the newly issued ordinary shares to the subscriber as it deems appropriate or not to allocate the newly issued ordinary shares to such subscriber. (7.4.9) If the subscriber submits the subscription documents for one shareholder registration number and pay the subscription price in full for the number of shares he/she expresses an intention to subscribe for to more than one Subscription Agent, the Company will combine the number of the newly issued ordinary shares specified in every set of the subscription documents before the allocation. Nevertheless, if the subscriber does not fully receive the allocation of the newly issued ordinary shares according to the number they have subscribed for, the Company by the Subscription Agents shall make a refund to the subscriber for the newly issued ordinary shares that are not allocated or not fully allocated pursuant to the subscription documents submitted to each of the Subscription Agents. For example, Shareholder A having one shareholder registration number is entitled to receive the allocation of 2,000 newly issued ordinary shares and has submitted the subscription documents to Bangkok Bank Public Company Limited and Siam Commercial Bank Public Company Limited by specifying in each set of the subscription documents that he expresses an intention to subscribe for 2,000 newly issued ordinary shares.
7 True Corporation Public Company Limited
In the case that there are no newly issued ordinary shares remaining from the allocation to existing shareholders in proportion to their respective shareholdings: The Company will allocate to Shareholder A the newly issued ordinary shares pursuant to the rights as prescribed in each set of the subscription documents through each Subscription Agent in an equal proportion, i.e. 1,000 shares will be allocated through each Subscription Agent. Each of Bangkok Bank Public Company Limited and Siam Commercial Bank Public Company Limited will make a refund to Shareholder A for the newly issued ordinary shares that are not allocated to him. In the case that there are newly issued ordinary shares remaining from the allocation to existing shareholders in proportion to their respective shareholdings: The Company will reallocate the remaining newly issued ordinary shares to every shareholder who has oversubscribed the shares in proportion to their respective shareholdings. If Shareholder A is to receive 100 oversubscribed newly issued ordinary shares, the Company will allocate the oversubscribed shares through each Subscription Agent in an equal proportion, i.e. 50 newly issued ordinary shares oversubscribed will be allocated for each set of the subscription documents. Thus, the total newly issued ordinary shares that each Subscription Agent shall allocate to Shareholder A are 1,050 shares. Each of Bangkok Bank Public Company Limited and Siam Commercial Bank Public Company Limited shall then make a refund to Shareholder A for 950 newly issued ordinary shares that are not allocated to Shareholder A. (7.4.10) The Company hereby reserves the right to change the details of method of subscription and payment of subscription price or other conditions for subscription as it deems appropriate in the case that there is a problem, obstacle or limitation in relation to the operation of the share subscription to ensure the benefit for the subscription of the newly issued ordinary shares of the Company by the shareholders. (7.5) Required Documents for Subscription (7.5.1) Subscription Form for Newly Issued Ordinary Shares (Enclosure No. 2) which is accurately, completely and clearly completed and signed by the subscriber (7.5.2) Proofs of payment, including original pay-in slip (in the case of payment of subscription price made by wire transfer) or cheque or cashier cheque or bank draft, specifying the first name, last name and contact number of the subscriber on the back of such proof of payment (7.5.3) Certificate of the Subscription Entitlement (if any) (Enclosure No. 4) issued by Thailand Securities Depository Company Limited (the “TSD”), the share registrar of the Company, and delivered, together with this Notice, via registered mail to the shareholders (7.5.4) A certified true photocopy of the front page of an account book which is a savings or current account only, provided that the name which appears in such bank account book shall be the same as that of the
8 True Corporation Public Company Limited
subscriber, in the case that the subscriber wishes to receive the refund for any un-allocated portion of the share subscription or of the subscription of shares in excess of his/her subscription entitlement credited into his/her bank account via money transfer system (7.5.5) Documents for Identification (as specified in 7.6)) (7.5.6) A power of attorney affixed with Baht 30 stamp duty (in the case of appointment of proxy) together with certified photocopies of identification cards of the subscriber and his/her proxy (7.5.7) For the subscriber who wishes to deposit the newly issued ordinary shares into the Issuer’s Account No. 600 in the name of the subscriber, please fill in the required information in the form “Additional Subscription Documents Only for the Subscriber Wishing to Deposit the Securities into the Issuer Account” (the details as appeared in Enclosure No. 3) for further submission to the TSD. (7.6) Required Documents for Identification Thai Individual A certified copy of identification card that has not expired or, in the case there is no identification card, a certified copy of house registration containing the 13-digit identification number or a certified copy of any other official document containing the 13-digit identification number may be submitted. In the case of change of first name/last name, which causes a disparity to the name of shareholders as displayed in the share register book as of 5th August 2014 or in the Certificate of the Subscription Entitlement, a certified copy of other relevant official documents, such as marriage certificate, divorce certificate or certificate of change of first name/last name, must also be submitted. Foreign Individual A certified copy of alien certificate or passport that has not expired Juristic Person Incorporated in Thailand A copy of the affidavit issued by the Ministry of Commerce no more than 12 months prior to the subscription date, certified by the authorized person(s) and affixed with the seal of such juristic person (if any) together with a certified copy of identification card, alien certificate or passport (as the case may be) of such authorized person(s) of the juristic person Juristic Person Incorporated outside Thailand Copies of certificate of incorporation or memorandum of association or affidavit, issued no more than 12 months prior to the subscription date, certified by the authorized person(s) of such juristic person and affixed with the seal of the juristic person (if any), together with a certified copy of the alien certificate or passport (as the case may be) of such authorized person(s) of the juristic person All certified copies of each of above documents must be notarized by a notary public and then authenticated by an official of the Thai Embassy or of the Thai Consulate in the country where the documents are prepared or certified. Such notary public certification and authentication shall be made no more than 12 months prior to the subscription date.
9 True Corporation Public Company Limited
(7.7) Refund of Subscription Payment for Un-allocated Portion to the Shareholders In the case that any shareholder is not allocated the newly issued ordinary shares or that any oversubscribing shareholder is allocated the newly issued ordinary shares less than the number that such shareholder oversubscribes for, the Company by the Subscription Agent will cause a refund of the subscription payment for the portion of the newly issued ordinary shares that have not been allocated or for the portion of the newly issued ordinary shares oversubscribed that have not been fully allocated, without interest and damages, within 14 days from the last date of the subscription period by the method specified by the subscriber in the Subscription Form for Newly Issued Ordinary Shares. Nevertheless, in the case of the inability to return the subscription money for the portion of the newly issued ordinary shares that have not been allocated or the portion of the newly issued ordinary shares oversubscribed that have not been fully allocated by way of transferring the money to the bank account of designated by the subscriber in the Subscription Form for Newly Issued Ordinary Shares, resulting from any cause beyond the control of the Subscription Agents, the Subscription Agents shall cause a refund of the subscription payment for the portion of the newly issued ordinary shares that have not been allocated or for the portion of the newly issued ordinary shares oversubscribed that have not been fully allocated by issuing a crossed cheque payable to the subscriber and delivering such cheque via registered postal mail to the address appeared in the Company’s shareholders data base in accordance with the share register book as of 5th August 2014. In case of a refund made by cheque, the subscriber will be responsible for the fee charged by the different Clearing House or the fee charged in relation to the bank cheque. In this regard, once a transfer of the subscription payment for the portion of the newly issued ordinary shares that have not been allocated or the portion of the newly issued ordinary shares oversubscribed that have not fully been allocated is made to the bank account of the subscriber, as specified in the Subscription Form for Newly Issued Ordinary Shares, or is made by a cheque payable to the subscriber delivered via registered postal mail to the address as displayed in the Company’s shareholders data base in accordance with the share register book as of 5th August 2014, it shall be deemed that the subscriber has duly received the refunded subscription payment for the portion of the newly issued ordinary shares that have not been allocated or the portion of the newly issued ordinary shares oversubscribed that have not fully been allocated and the subscriber shall no longer be able to claim interest and/or damages from the Company or the Subscription Agent. (7.8) Delivery of the Newly Issued Ordinary Shares (7.8.1) In case that the subscriber wishes to deposit the shares in the securities trading account that the subscriber has opened with a securities company, the Company will deposit the allocated shares to the account “Thailand Securities Depository Company Limited for Subscribers” maintained by the TSD, and the securities company will record the number of shares deposited and issue an evidence of deposit to the subscriber within 7 business days from the last date of the subscription period.
10 True Corporation Public Company Limited
(7.8.2) In case that the subscriber wishes to deposit the shares in the Issuer’s Account No. 600, the Company will deposit the allocated shares to the account “Thailand Securities Depository Company Limited”, whereby the TSD will record the number of shares deposited in the name of the subscriber and issue an evidence of deposit to the subscriber within 7 business days from the last date of the subscription period. (7.8.3) In case the subscriber wishes to receive the share certificate in the name of subscriber, the TSD, as the Company’s registrar, will deliver the share certificate representing the newly issued ordinary shares in the number allocated to the subscriber via registered mail under the name and address appeared in the Company’s shareholders data base in accordance with the share register book as of 5th August 2014 within 15 days from the last date of the subscription period. (7.9) Other Important Information for the Subscription of the Newly Issued Ordinary Shares (7.9.1) Each subscribing shareholder will receive a receipt issued and signed by the Subscription Agent’s officer as evidence for the subscription for the newly issued ordinary shares. (7.9.2) Any shareholder who does not exercise his/her rights to subscribe for the newly issued ordinary shares or fails to make the payment for the subscribed shares within the specified date and time, or whose cheque or cashier cheque or bank draft cannot be cleared for payment within the specified payment date shall be deemed by the Company as waiving their rights to subscribe for the newly issued ordinary shares. (7.9.3) If the number of shares that the subscriber specifies in the Subscription Form for Newly Issued Ordinary Shares exceeds the amount of payment received by the Company, the Company reserves the right to allocate the shares according to the subscription payment received. (7.9.4) If the number of shares specified in the Subscription Form for Newly Issued Ordinary Shares is less than the amount of payment received by the Company, the Company reserves the right to allocate the newly issued ordinary shares to each shareholder as it deems appropriate. (7.9.5) The shareholders that exercise their subscription rights must correctly specify the participant number (the code of the securities company as listed on the back of the Subscription Form for Newly Issued Ordinary Shares) with which the shareholder has the securities trading account and the securities trading account number to which the shareholder wishes the allocated shares to be deposited, and must ensure that the name of the subscriber specified in the Subscription Form for Newly Issued Ordinary Shares be identical to that of the securities trading account. If the participant number or the securities trading account number is incorrect, or if the number of the securities trading account in the name of another person is specified, the newly issued ordinary shares will not be deposited into the subscriber’s securities trading account. In that regard, the Company will not be responsible for any loss or delay in retrieving the shares and the Company hereby reserves the right to deliver such shares by issuing the share certificate
11 True Corporation Public Company Limited
representing the newly issued ordinary shares in the number allocated in the name of the subscriber and delivering the share certificates to the subscriber under the name and address as appeared in the Company’s shareholders data base in accordance with the share register book as of 5th August 2014 within 15 days from the last date of the subscription period. In such a case, the Company will not be responsible for the shareholders being unable to trade the allocated shares on the first trading day thereof.
8. Objectives for the Capital Increase (8.1) To repay loans obtained from financial institutions which have been used for investment in the following businesses: - Online business (including fixed lines, broadband, internet, data and multimedia services, etc.) approximately Baht 14,000 million - Wireless business approximately Baht 30,000 million - Pay TV business approximately Baht 8,000 million (8.2) To reserve for future business expansion and to use as working capital of the Company in the amount approximately Baht 13,000 million
9. Benefits which the Company will Receive from the Capital Increase / Share Allocation The capital increase will result in the Company being able to afford strengthened financial position because of reduction of indebtedness and interest expenses and this will bring about flexibility for the Company’s operation of business.
10. Benefits which the Shareholders will Receive from the Capital Increase / Share Allocation Strengthened financial position of the Company will have a positive impact on the Company’s share value in the future.
11. Dividend Policy and Rights to Receive Dividend from the Newly Issued Ordinary Shares (11.1) The Company has never declared the payment of dividend since the commencement of the business operation. The Company is able to distribute dividend out of profits after the clearance of the total accumulated loss and after being set aside as legal reserve. The Company has the policy to distribute dividend to its shareholders in the amount of at least 50% of net profit showing in the Company’s standalone annual financial statements after being set aside as various reserves, provided that there is remaining cash and that it must be in compliance with provisions of the relevant laws and loan agreements. (11.2) Subscribers of newly issued ordinary shares under this Rights Offering will be entitled to rights and benefits on pari passu basis as the existing shareholders of the Company in all respects, including being entitled to receive dividends once its payment is declared.
12 True Corporation Public Company Limited
12. Other Information that may be Necessary for Shareholders in Investing in the Shares of the Company The reference is made to the resolution of the Extraordinary General Meeting of Shareholders of No. 1/2557 held on 25th July 2014 approving the allocation of up to 5,648,285,818 newly issued ordinary shares to the existing shareholders of the Company in proportion to their respective shareholdings (Rights Offering) and the allocation of up to 4,429,427,068 newly issued ordinary shares to China Mobile International Holdings Limited (“China Mobile”) or any other individual or juristic person to be determined as deemed appropriate by the Board of Directors under the private placement scheme. The subscription of the newly issued ordinary shares by China Mobile is subject to satisfaction of certain conditions precedent as prescribed in the Share Subscription Agreement, including but not limited to, the following conditions: (1) the Company having obtained approval from the board’s meeting and/or shareholders’ meeting for the entry into relevant agreements; (2) the Company having been granted the required approval from the relevant government and/or regulatory agencies; (3) no change or event which might have caused materially adverse effect to the Company’s business; (4) the completion of the Rights Offering; and (5) no change to any laws which has prevented the subscription of shares under the private placement scheme from being effective. Given that the subscription of newly issued ordinary shares by China Mobile is subject to satisfaction of certain conditions precedent as mentioned above, the shareholders and investors are suggested to trade the Company’s shares with prudence.
13
Part II Information of True Corporation Public Company Limited
True Corporation Public Company Limited
Part II: Information of True Corporation Public Company Limited
1. Name and Location of the Company True Corporation Public Company Limited (“the Company”), with the security symbol “TRUE” on the Stock Exchange of Thailand. The Public Company Registration No. 0107536000081. The Company’s head office is located at: 18 True Tower, Ratchadapisek Road, Huai Khwang, Bangkok 10310 Telephone: +66 2643 1111 Fax: +66 2643 1651 Website: www.truecorp.co.th
2. Type of Business and Nature of the Main Operations of the Company Products and Services True Group is Thailand’s only integrated communications solutions provider. True Group facilitates subscriber lifestyles through the convergence of its voice (fixed-line and mobile), broadband Internet, pay TV, data and content. By offering a comprehensive selection of networks, services and content, True Group is also well placed to seize future growth opportunities. True Group’s convergence lifestyle strategy is unique within the Thai market. It focuses on providing customers with their preferred combinations of content and services from its integrated platform. This helps the Group differentiate itself from the competition, drive subscriber growth and customer loyalty as well as maximize the full potential of its services. True Group believes convergence enhances value for its customers and delivers significant benefits in the medium and long term. True Group’s core businesses have been organized into the three following categories: . Online business under TrueOnline, consisting of fixed-line phone and value-added services, business data services, Internet and Broadband Internet services, WiFi and WE PCT; . Cellular business under True Mobile Group, operating 2G as well as 3G and 4G LTE services under the brands TrueMove and TrueMove H, respectively. Its CDMA service was offcially shut down in April 2013; . Pay TV business under TrueVisions The financial performance of the “Convergence and other businesses” segment, including a retail business for True Group’s bundled packages, is reported under TrueOnline. Following shareholders’ approval at the EGM in October 2013, True Group successfully sold an investment in ordinary shares of eight non-core business subsidiaries, namely TLS, WW, TMN, TIDC, TLR, TP, TDP and TDCM to Thana Telecom Corporation Limited. This transaction enabled the Group to recognize gain from sale of investments totaling Baht 857.6 million in 4Q13. The financial performance of these subsidiaries was previously reported under TrueOnline.
14 True Corporation Public Company Limited
The list of eight non-core subsidiaries is shown below.
Company Nature of Business 1. True Leasing Co., Ltd. (TLS) Car operating lease 2. Wire and Wireless Co., Ltd. (WW) Communication and information technology engineering service 3. True Properties Co., Ltd. (TP) Office space rental 4. True Internet Data Center Co., Ltd. (TIDC) Internet data center service 5. True Lifestyle retail Co., Ltd. (TLR) Operator of True Coffee 6. True Digital Plus Co., Ltd. (TDP) Online game 7. True Money Co., Ltd. (TMN) Payment service center and electronic card services 8. True Digital Content and Media Co., Ltd. (TDCM) Digital content and E-commerce
(1) TrueOnline TrueOnline comprises fixed-line telephone and its value-added services such as public phones and WE PCT, as well as broadband Internet, business data services, Internet, data gateways and International Direct Dialing which was successfully transferred to True Mobile Group at the beginning of 2011. The Group’s broadband Internet businesses have continued to grow rapidly and help to maintain overall revenue generated by TrueOnline. i) Fixed-line phone, WE PCT and public phone services TrueOnline is the largest fixed-line telephone service provider in the BMA with a fixed-line capacity of 2.6 million lines, of which approximately 1.7 million lines are in commercial use. It also provides 28,000 public phones in the BMA under the approval of the Telephone Organization of Thailand (later renamed TOT). True Group operates WE PCT through its subsidiary, AWC, in which it holds a 100.0 percent equity interest. Together with AWC, the Group officially launched its PCT service in November 1999 as a value-added service of its traditional fixed-line services. WE PCT is a cordless fixed-line phone service. A subscriber’s PCT phone number is the same as his or her fixed-line number. Up to nine PCT handsets can be used with one fixed-line number. In August 1991, True Group signed a 25-year Joint Operation Agreement under Build-Transfer-Operate terms with the Telephone Organization of Thailand (later renamed TOT) to construct, install, maintain and jointly operate a 2-million-line wireline network in the BMA, which will expire in 2017. The agreement was subsequently extended to cover an additional 600,000 lines. True Group transferred its fixed-line network to TOT which collects revenues from subscribers and makes payment to the Group of its proportion as stipulated by the Joint Operation Agreement at the rate of 84.0 percent for two million lines and 79.0 percent for 600,000 lines. True Group receives an 82.0 percent share of revenue from each value-added service and 76.5 percent from the public phone service.
15 True Corporation Public Company Limited
As for the WE PCT service, the Group is entitled to 82.0 percent of the revenue generated from such service and AWC is entitled to approximately 70.0 percent of this amount. The PCT service is also available to TOT subscribers. TOT shares with True Group approximately 80.0 percent of revenue received from its subscribers as a PCT network rental fee. Value-Added Services In addition to fixed-line phone and public phone services, True Group offers a range of value-added services to meet customers’ needs, including: Voice Mailbox, Call Waiting, Conference Calling, Call Forwarding, Hot Line, Abbreviated Dialing, Automatic Call Repetition, Outgoing Call Barring, and Caller ID. The Group also provides services for corporate customers requiring a large number of telephone lines and provides a range of value-added services including: Direct Inward Dialing or DID; Hunting Lines service, which bundles two or more telephone lines at one location into a single number; Integrated Service Digital Network or ISDN, which can carry all forms of voice, data and image communications simultaneously on the same telephone line; Televoting; Free Phone 1-800, allowing businesses to provide their customers with a free contact call service; Voice Conferencing; and VoIP service, called NetTalk by True. Fixed-line network and WE PCT service area True Group’s core fixed-line network is modern and fiber-rich, enabling the Group to minimize the use of copper cables and provide high-quality voice and data communications services. At the end of 1Q14, True Group had 1,679,510 fixed-line subscribers comprising 1,109,902 residential subscribers and 569,608 business customers. This reflected a 4.1 percent decline from the same period last year. The decline in fixed-line subscribers and revenue is in line with the global trend. The average revenue per user (ARPU) for 1Q14 was Baht 242 per month, a 5.9 percent decline from 1Q13. The majority of revenue (60.5 percent) came from business customers. The WE PCT service covers 1,500 square kilometers of the inner area of the BMA. In line with global trend, subscribers to the PCT service have substantially declined in recent years due to increased popularity of mobile phone usage as well as a new tariff scheme aimed at mitigating risks associated with the PCT service having to pay IC charges in the same manner as mobile operators. Some WE PCT customers have migrated to other services within the Group such as TrueMove H. At the end of 1Q14, WE PCT had 16,999 subscribers down from 17,966 at the end of 2013.
16 True Corporation Public Company Limited
ii) Broadband Internet, other Internet services and VAS Broadband Internet True Group is Thailand’s leading broadband or hi-speed Internet operator with an estimated 37 percent share of the broadband market in Thailand as of 1Q14 (source: True Group’s estimate). The Group provides the service using FTTx, DOCSIS (cable modem) and DSL (Digital Subscriber Line) technologies. By consistently expanding coverage, bringing in new technologies and higher speeds with an increased focus on customer service, TrueOnline continues to lead the broadband market in terms of innovation and service quality. In 2003, True Group and certain other service providers started offering WiFi services. The Group’s extensive WiFi network is one of the key differentiators for products and services under True Group and helps drive broadband growth. At present, True Group’s WiFi network features over 100,000 domestic hotspots with Thailand’s fastest download speed of up to 200 Mbps. True Group’s subsidiary, TUC, was granted a Type Three license from the NTC to provide fixed-line telephone, broadband and data services nationwide. TUC provides data and broadband circuits as well as data network services to the Group’s subsidiaries including True Internet and True Multimedia. These provide hi-speed Internet and data services to end customers and non-voice services to consumers and business customers, respectively. True Group’s modern network allows it to provide a faster, more stable broadband service and to realize efficient operations and maintenance. The network not only provides ADSL, but also ADSL2+, VDSL2, G.SHDSL, Gigabit Ethernet, DOCSIS and fiber services, and is well positioned for the eventual evolution into an IP-based NGN. The Group also offers rich content catering for consumer lifestyles, including music, gaming, sports and e-books, as well as a variety of value-added services, such as White Net filtering (allowing parents to control their children’s Internet access). In August 2010, TrueOnline became the first operator to upgrade standard speeds (for the Baht 599 per month package) from 4 Mbps to 6 Mbps on a mass scale. This fueled subscriber growth, resulting in net subscriber additions more than doubling during the year. The standard speeds of its ULTRA hi-speed Internet was further upgraded to 7 Mbps in June 2011 and to 10 Mbps in October 2012. TrueOnline soft-launched its new cable modem technology, DOCSIS 3.0, in December 2010, offering 10 Mbps to 100 Mbps download speeds starting from Baht 699 per month. The service was officially launched in March 2011 together with the launch of the 8 Mbps WiFi service. DOCSIS technology not only can support download speeds of over 1 Gbps but also makes triple-play, a combination of high-speed Internet, pay TV, and voice services through the same router and cable network, a reality. TrueOnline also targets the hi-end segment. In 2009, it launched the “ULTRA Broadband” service, which offered a connection speed of up to 50 Mbps via VDSL. In September 2011, the ULTRA hi-speed Internet premium offering was expanded to incorporate FTTH (Fiber to the home) technology for ultra-premium customers with the download speeds of 50 Mbps to 100 Mbps. The offering was later expanded to a connection speed of 200 Mbps via both DOCSIS 3.0 and FTTH technologies. These hi-end services provide stable connections for downloading and uploading high-definition content as well as supporting audio-visual streaming.
17 True Corporation Public Company Limited
TrueOnline’s broadband Internet offerings, ranging from 10 Mbps to Thailand’s fastest consumer download speed of 200 Mbps, are the most extensive consumer broadband services available in Thailand which cater to all market segments, from light- to high-end users. TrueOnline has continued to bring greater value to subscribers with more attractive offerings. In May 2013, it introduced a value convergence package called “SukX2 (or Happiness Times Two)”, combining ULTRA hi-speed Internet and TrueVisions’ packages through the same DOCSIS 3.0 cable network at an affordable price (starting at Baht 699 per month). Due to its high popularity, True Group further introduced the “SukX3 (or Happiness Times Three)” campaign, comprising all three core products of True Group, in November 2013 (Please see details in the “Bundled Packages” section). These unique and competitive offerings cemented the Group’s position as Thailand’s only lifestyle convergence operator offering fully integrated services that meet the requirements of customers’ lifestyles while maintaining True Group’s leadership in terms of speed, service quality and innovation. Successful expansion of broadband Internet to new territories, competitive convergence packages and localized marketing activities saw TrueOnline secure broadband leadership while achieving solid broadband net adds of 60,000 subscribers in 1Q14. This drove its subscriber base up to 1,869,633. Meanwhile, TrueOnline continued to expand its broadband network which already reached 4.4 million homepasses in 66 provinces by the end of 1Q14. For the enterprise segment, True Group offers converged data and voice communication solutions, and managed services to business customers through various technologies. These include: Digital Data Network or Leased–Line; Multiprotocol Label-Switching; Metro Ethernet (a fiber-to-the-building technology designed specifically for business customers); and IP-Lease Line (a hybrid between an IP-based data service and a lease line service which improves the quality of connection beyond standard IP-based services). In addition, True Group offers a Managed Network Service (a combination of three network operation services: network performance management, fault management and configuration management). Furthermore, its service infrastructure is built on modern IP technology that supports cloud computing. Beside large corporate clients, True Group aims to expand its business customer base more aggressively into the SME segment. Significant growth opportunity exists in the provinces where overall penetration and the Group’s market share remain relatively low. True Group plans to utilize its wide selection of products and services to secure and expand its provincial market share through convergence and bundling strategies. True Group is one of the major players in the data transmission business in Thailand while its modern network gives it a competitive advantage. The Group seeks to differentiate itself from competitors through a focus on service quality and by meeting customer needs. The Group also benefits from combining various products and services (e.g. content, VoIP and Internet) as well as by providing services with its business partners (e.g. the collaboration with Cisco to roll out a high quality IP network). As a result, True Group does not have to compete solely on price.
18 True Corporation Public Company Limited
In 2011, True Group launched True Ethernet Fiber service, an advanced IP network which enables the secure transferring of large multi-format files over fiber-optic cables with download speeds of 2 Mbps to 10 Gbps. It is the first in Thailand to have attained global service quality assurance from the Metro Ethernet Forum. In 2012, the Group further launched a new data communication solution, using Multiprotocol Label Switching technology, to better respond to specific needs of online game stores across the country. This solution gives a competitive advantage to these stores by highlighting its strengths on stability, high speed with the same upload and download speed as well as an automatic backup. In addition, True Group’s focus on the fiber market presents high growth opportunities. It has invested in the fiber-optic network via Gigabit-capable Passive Optical Network (GPON) technology which reaches corporate clients located in buildings on key roads in the BMA as well as several provincial industrial estates and tourist destinations. Furthermore, in 2013, True Internet was the first service provider in Asia to upgrade its Internet backbone to 100 Gbps with the deployment of the world-class standard “Cisco Nexus 7000”. This enhanced its capability to support an expansive upward trend of customers’ Internet usage in the future while delivering a better experience to its customers. At the end of 1Q14, there were 27,755 circuits in operation with average revenue per circuit of Baht 8,975 a month. Other Internet services and VAS True Group provides Internet (including content and applications) services through: (1) True Internet, in which True Group has a 100.0 percent equity interest, is the Group’s main subsidiary which operates high-speed Internet or broadband and additional broadband services. In August 2009, True Internet’s Type One ISP license, granted by the NTC, was extended for another five years to expire on August 17, 2014. The license is renewable every five years; (2) KSC, in which True Group has a 56.8 percent equity interest, is an ISP which provides services to the Group’s corporate customers. In June 2009, KSC’s Type One ISP license, granted by the NTC, was extended for another five years to expire on June 22, 2014. The license is renewable every five years; and (3) Asia Infonet, in which True Group has a 65.0 percent equity interest, under an Agreement to Operate whereby CAT Telecom (previously the Communications Authority of Thailand) granted a non-exclusive right to provide commercial Internet services to users throughout Thailand until 2006 over facilities leased from CAT Telecom or any entity approved by CAT Telecom. In February 2010, Asia Infonet’s Type One ISP license, granted by the NTC, was extended for another five years and will expire on February 4, 2015. The license is renewable every five years. True Group is the leading Internet Service Provider (“ISP”) in Thailand offering Internet access to both consumers and business customers, along with a range of value-added services and the provision of security services for corporate customers. In addition, the Group’s Internet and broadband services took full advantage of the international Internet gateway license granted to one of its subsidiaries, True International Gateway, which has allowed True Group to provide a better quality and less costly service to its customers.
19 True Corporation Public Company Limited
iii) International Gateway services TIG, previously known as True Internet Gateway, a subsidiary of True Corp, received an International Internet Gateway and Domestic Internet Exchange License (Type Two with Network) from the NBTC on May 19, 2011, and an International Private Leased Circuit (Type Three) on November 11, 2009. The aforementioned licenses allow TIG to provide international Internet and international data services. TIG has Points of Presence in Bangkok, Singapore, Hong Kong, Netherlands, the UK and the US which enhance the efficiency of international connections and service quality. Since its launch, TIG has considerably expanded its capacity to support the growth of Internet and international data services which have grown annually. At the end of 2013, TIG’s backbone capacity reached approximately 70 GB while it aims to increase to 180 GB by the end of 2014. Most of TIG’s international Internet bandwidth capacity is utilized within True Group with the rest utilized by external customers including local ISPs, local and multinational corporations, and international telecom operators. TIG offers three types of international data services – International Private Leased Circuit (“IPLC”), Internet Protocol Virtual Private Network (“IP VPN”) and Virtual Nodes. Currently, TIG is focusing on serving major international carriers who have a presence in the Asia-Pacific region and demand a large amount of international connectivity as well as a reliable network and high quality of services. To facilitate corporate customers requiring a variety of bandwidth sizes and international destinations, TIG continues to partner with global international carriers to reach countries beyond Singapore and Hong Kong where TIG already has connectivity. TIG has signed a number of contracts to provide Virtual Node services for leading international carriers from the US, Germany, Taiwan, Japan, India, Singapore, the UK, and China. True Group also continued to expand its Internet and data gateway operations into Laos, Cambodia, Vietnam and Myanmar as part of a new focus to develop its business in neighboring countries. These developments not only help generate more revenue but also facilitate continual growth for the Group.
(2) True Mobile Group True Mobile Group operates 2G as well as 3G and 4G LTE mobile businesses under the brands TrueMove and TrueMove H, respectively. True Group holds 100.0 percent of the shares in Real Future, which is the Group’s holding company and a type-3 telecom operator, and indirectly holds an equity interest in TrueMove (previously TA Orange) and Real Move (a CAT Telecom’s 3G+ reseller under the flagship brand, TrueMove H) through a subsidiary, BITCO. True Group’s shareholding in BITCO was 99.5 percent at the end of 1Q14. TrueMove operated under the Agreement to Operate, dated June 20, 1996, granted by CAT Telecom. This allowed for the provision of services under the Digital PCN 1800 system until September 2013. Under the Agreement to Operate, TrueMove shared 25 percent of its revenue, after deducting access charge payments and other deductible expenses (e.g. content), with CAT Telecom until September 2011, after which the proportion of revenue shared with CAT Telecom was increased to 30 percent until the end of the agreement. Currently, TrueMove operates and provides services under temporary measure or notification concerning protection for subscribers upon the expirations of concession agreements or the Agreement to Operate mandated by the NBTC.
20 True Corporation Public Company Limited
In January 2011, True Group completed the purchase of shares of four local companies from Hutchison Group which increased its business scale through the acquisition of approximately 800,000 subscribers. In April 2011, under the reseller agreement between Real Move and CAT Telecom, which is effective until 2025, the TrueMove H brand was established to facilitate the launch of nationwide commercial 3G+ services using HSPA technology on the 850 MHz spectrum. The official launch of TrueMove H in the BMA and 16 provinces under the FREEYOU campaign, offering 3G+ services with speeds of up to 42 Mbps and WiFi connectivity of up to 8 Mbps, on August 30, 2011 effectively gave the Group’s 3G services a nationwide first-mover advantage. In the Year 2011, TRUE Group restructured its mobile business to be under the umbrella of the “True Mobile Group”, the entirety of which comes under Real Future, a Group subsidiary, to improve operational efficiency and facilitate future funding opportunities. Real Future participated in the auction of the 2.1 GHz IMT Spectrum License and was later granted the aforementioned license as well as the Type Three Telecommunication Business License by the NBTC in December 2012. This extends the Group’s mobile business until at least 2027. In addition to its ongoing 3G service expansion on both the 2.1 GHz and CAT Telecom’s 850 MHz spectrums, TrueMove H was the first operator in Thailand to launch 4G LTE services on the 2.1 GHz spectrum in May 2013, covering BMA and 14 major cities. The perfect combination of the 2.1 GHz and CAT Telecom’s 850 MHz spectrums strengthens the Group’s mobile portfolio as well as reinforces its leadership in providing Thailand’s best- quality 3G and 4G LTE services.
Subscribers TrueMove H has grown strongly since its commercial launch in 3Q11. At the end of 1Q14, its subscriber base expanded to 13.6 million. This further fueled True Mobile Group’s subscriber base up to 23.1 million, accounting for 24.6 percent of Thailand’s mobile market by subscribers (excluding CAT Telecom, TOT and its MVNOs), by the end of 1Q14. Meanwhile, given successful expansion of its 3G/ 4G business, the proportion of high-value postpaid subscribers continued to grow which further drove True Mobile Group’s blended ARPU up to Baht 129 per month in 1Q14, compared to Baht 124 per month in 4Q13.
Services Pre Pay True Mobile Group’s revenue is partly derived from sales of prepaid airtime, which does not require a monthly subscription fee. Subscribers purchase a SIM card with an initial credit balance and can top-up their credit balance through various means, including cash cards, top-up cards, ATMs, the transfer of credit from other True Mobile Group phone accounts, and ‘‘over-the-air’’ top-ups. True Mobile Group also provides subscribers with a mobile payment channel via TrueMoney to meet a new generation of lifestyle needs.
21 True Corporation Public Company Limited
Post Pay True Mobile Group’s postpaid service allows customers to choose a monthly service plan comprising voice-only, data-only or voice and data services to match their lifestyles. Top-up packages allow subscribers to purchase voice or non-voice services on top of their monthly package at a better-value rate. Subscribers are billed monthly for subscription fees, airtime and the use of other voice and non-voice services. Voice Services True Mobile Group’s subscribers have access to local, domestic and international long-distance dialing. In addition, it offers a variety of value-added services in different combinations according to the airtime package selected. These services include call waiting, call forwarding, call conferencing and caller ID. True Mobile Group also offers its voice subscribers international roaming services, enabling them to make and receive calls when they are outside of Thailand. Non-Voice Services True Mobile Group provides a range of non-voice services to enhance customer lifestyles. Content is delivered through various channels covering all mobile- accessible channels and web-based services through the www.truelife.com portal. Non-voice services comprise a variety of popular content, including photo-based communication, financial information services, games, cartoons, screen savers, ring tones, music and sports. True Mobile Group subscribers are increasingly using its non-voice services, in particular downloadable and uploadable pictures, video, as well as the accessing of social networks, through mobile Internet services. True Mobile Group currently groups non-voice services into three main categories: . Messaging, which includes Short Messaging Service (“SMS”), allowing subscribers to send short text messages; Voice SMS whereby subscribers send audio messages to fixed-line and mobile handsets; and Multimedia Messaging Service (“MMS”), allowing the sending of pictures, text and sound/voice in a single-packet message. . Mobile Internet service via 4G LTE, 3G+/HSPA, EDGE/GPRS and WiFi technologies which provide subscribers access to a range of data services from their handsets, including email, Internet, VoIP, audio and video services. Additional services include Mobile Chat, a WAP-based instant-messaging service that allows subscribers to engage in online and mobile chat; and Blackberry and iPhone services. . Content, which includes Ring-back Tones (personalized ring-back tones and exclusive song selections); Voicemail; and Multimedia Content Services, which allow subscribers to access content such as music, sports, news and finance. True Mobile Group is able to use content as a growth driver by leveraging the exclusive content assets of TrueMusic, TrueLife, TrueOnline and TrueVisions. The rising popularity of smart devices and social networking as well as True Mobile Group’s attractive promotions contributed to the solid growth of mobile Internet revenue which grew 38.1 percent y-on-y to Baht 3.3 billion in 1Q14. This strong growth in mobile Internet usage further drove non-voice revenue up by 26.8 percent from a year earlier, accounting for 41.3 percent of True Mobile Group’s service revenue (excluding IC and network rental). Service revenue from mobile Internet, messaging and content contributed 85.1 percent, 4.4 percent and 10.5 percent of total non-voice revenue, respectively.
22 True Corporation Public Company Limited
Mobile Handsets and Accessories Sales The Group offers a broad range of mobile handsets and related accessories. Its key handset products are high-quality smartphones including iPhone, Samsung and others. True Group also offers affordable 3G phone such as Go Live and True Super as well as smart devices under the Group’s House brand “True Beyond”, including both the 3G and 4G capable models, to facilitate accessibility to 3G and 4G LTE services among a wider range of Thai consumers. In addition, the Group leads the sales of other smart devices, such as tablets and aircards. Handsets are either sold outright (untied to any service) or tied with True Mobile Group’s monthly (postpaid) packages. International Roaming Services International Roaming Services are value-added services that enable True Mobile Group subscribers to use the networks of international operators with whom it has entered into international roaming agreements (Outbound Roaming Service). The roaming services True Mobile Group offers include voicemail, SMS, MMS, mobile Internet (via EDGE/GPRS/3G/4G LTE), Email, Caller Identification, Missed Call Alerts, Short Code service, BlackBerry roaming and WiFi. These services ensure True Mobile Group customers to stay in touch with both business and personal contacts in more than 230 destinations worldwide. In addition, visitors to Thailand whose network operators have international roaming agreements with True Mobile Group can use its cellular network when traveling in Thailand (Inbound Roaming Service). True Mobile Group joined the Conexus Mobile Alliance in 2008 and partnered with Vodafone in 2012. The Conexus Mobile Alliance and Vodafone has a combined customer base of approximately 690 million at present. As a result, these subscribers can use roaming services in Thailand on True Mobile Group’s network. True Mobile Group subscribers also have more options on the roaming services, both voice and non-voice, when traveling in the Asia, Europe, North America and Oceania regions. True Mobile Group, the Conexus Mobile Alliance and Vodafone also rolled out a mobile data roaming plan for smartphones among their members. This offers a high mobile-data-access ceiling in most markets, allowing corporate email access and convenient wireless Internet access as well as providing cost benefits to active business travelers who use the alliance’s and Vodafone’s services. In 2009, True Group launched the “Data Roaming Flat Rate” promotion, where True Mobile Group subscribers pay up to a maximum charge of Baht 399 per day for their mobile data roaming on the Conexus Mobile Alliance networks. Due to its popular demand, this promotion has been continued. True Mobile Group re-launched the promotion, offering a maximum charge of Baht 499 per day for data usage, receiving and outgoing call rate of Baht 25 per minute, and SMS rate of Baht 11 per message for customers who travel to Europe, North America and Oceania regions. In addition, True Mobile Group subscribers who travel within Asia can enjoy its data roaming package with a maximum charge of only Baht 333 per day for data usage, receiving and outgoing call rate of Baht 33 per minute, and SMS rate of Baht 11 per message. True Mobile Group subscribers can benefit from the Data Roaming Flat Rate on 99 mobile networks in 51 countries worldwide.
23 True Corporation Public Company Limited
International Direct Dialing service IDD was originally introduced, operated and reported under TrueOnline. At the 2010 AGM, shareholders approved the transfer of TIC to be under TrueMove. TIC was granted a Type Three license from the NTC to provide overseas call services. The IDD service uses Time Division Multiplexing (TDM) technology with the “006” dialing prefix. Currently, True Group’s IDD services are available only to subscribers to its fixed-line and True Mobile Group services. TIC is currently negotiating with other mobile and fixed-line operators in order to expand the international calling service to wider users. True Group also introduced the “Inter SIM” promotion with two alternatives for customers to choose from. Its premium service, the “006” dialing prefix via Time Division Multiplexing technology, offers excellent voice quality and fast connection with no dropped call during conversation. Meanwhile, another IDD service via VoIP technology with the “00600” dialing prefix offers customers with more affordable and competitive rates. Currently, Inter SIM can be used to call 230 destinations worldwide via True Mobile Group’s International Roaming Service. Since its inception, True Group’s IDD service has grown well. It also facilitated an expansion of True Mobile Group’s subscriber base. TIC has continued to promote its IDD services in major communities, such as J-Avenue and along the BTS Sukhumvit. In addition, TIC focused on improving its offerings to better respond to customers’ lifestyles. By reaping the benefit of smartphone’s rising popularity, in August 2012, TIC introduced “NetTalk by True” application, offering customers with greater value and convenience. The service can be used on both iOS (iPhone and iPad) and Android platforms. Network True Mobile Group was the last of the three major Thai mobile operators to launch commercial operations, and as such has been able to take advantage of the latest technical developments for its network rollout. True Mobile Group’s 2G network coverage is now on par with other major mobile operators. However, its 3G+ service coverage is the most extensive in Thailand, covering over 95 percent of the Thai population. True Mobile Group has consistently sought to develop and market innovative non- voice products and services. For example, it was the first in Thailand to offer voice SMS, remixable ring tones (through the IRemix service), and ‘‘over-the air’’ top-ups to its subscribers. In addition, True Mobile Group was the first in Thailand to commercially launch the 3G HSPA services on the 850 MHz spectrum nationwide and the first to offer 4G LTE services on the 2.1 GHz spectrum to consumers in Thailand. It also provides other multimedia content-based services, along with comprehensive wireless Internet services using WiFi technology. True Mobile Group also launched the world’s first Touch SIM using RFID (radio-frequency identification) technology. This allows for payments to be made from the E-wallet and E-Purse payment services with a single swipe of any mobile handset. In addition, it launched iSim, an innovative data-only package for tablets and aircards, to attract data-centric customers as well as innovative applications, including “H TV”, a new mobile application for TrueMove H subscribers to access world-class TV content from more than 90 TrueVisions channels, and “H MUSIC”, a warehouse of all kinds of digital music content enabling subscribers to enjoy exclusive and latest hits by world-class artists.
24 True Corporation Public Company Limited
Following the successful launch of the iPhone 3G in the Thai market, True Mobile Group performed extremely well on the launches of other iPhone models and various smart devices, especially the iPhone 5s in October 2013. True Mobile Group also tapped the entry-level 3G and smartphone users by launching campaigns with affordable 3G phone and smartphones under the GO Live and True Super series as well as with popular smartphone manufacturers and distributors such as Samsung and HTC. In 2013, TrueMove H further introduced world-class quality devices, including smartphones and a tablet, all at affordable prices under the “True Beyond” brand to ensure that customers get the best experience of its best 3G and 4G LTE services. TrueMove H’s most extensive service coverage in Thailand, attractive device- bundling campaigns and innovative applications and content across True Group continue to provide TrueMove H with a competitive edge and help position it as the mobile Internet leader in Thailand.
(3) TrueVisions TrueVisions is Thailand’s leading nationwide pay TV provider, offering its service via digital direct-to-home satellite (DStv) and digital HFC (hybrid-fiber-coaxial) cable network platforms. TrueVisions was formed in 1998 by a merger of UBC (formerly IBC) and UBC Cable (formerly UTV). TrueVisions operates pay TV services under a 25-year Agreement for Joint Venture in the Membership Television (and Cable Television) Services with MCOT which is due to end on September 30, 2014 for services via satellite and on December 31, 2019 for services via cable. In addition, in January 2013, TrueVisions Group successfully secured the Broadcasting and Television Network licenses from NBTC, extending the Group’s pay TV business until at least January 2028. TrueVisions provides its DStv service using Ku-band and C-band transmission and MPEG-2 and MPEG 4 video compression. This enables TrueVisions to increase the number of channels, improve sound and picture quality, control access to its signal, and distribute its service everywhere in Thailand. This service is now transmitted via the Thaicom 5 satellite. TrueVisions provides its cable TV services, both digital and analog, using the HFC network of True Multimedia (True Group’s subsidiary) in the BMA. At the beginning of 2006, TrueVisions was successfully integrated into the Group following the acquisition of TrueVisions shares which increased True Group’s effective shareholding to 91.8 percent. In 2010, TrueVisions was restructured into TrueVisions Group. This was aimed at facilitating operations, especially the obtaining of pay TV licenses from the regulator, and business growth opportunities. True Group’s effective holding in TrueVisions Group Company, which is a holding company for the Group’s pay TV business, was 100.0 percent. True Group indirectly held 99.3 percent in True Visions Public Company Limited and 99.0 percent in True Visions Cable Public Company Limited, as at March 31, 2014. Following the entry into force of the Broadcasting Act in March 2008, TrueVisions commenced negotiations with MCOT to carry advertising similar to other pay TV operators. On October 8, 2009, the MCOT Board of Directors approved for TrueVisions to air advertising subject to revenue sharing of 6.5 percent. Following this decision, TrueVisions began gradually introducing paid advertising while ensuring the viewer experience was not impacted. By the end of 1Q14, 35 of the total 176 channels in TrueVisions’ portfolio carried advertising.
25 True Corporation Public Company Limited
TrueVisions conducted various strategies to facilitate future business opportunities as well as to pave the way for an expanding customer base. In May 2010, TrueVisions became the first cable or satellite operator in Thailand to offer HD-format channels targeting premium subscribers with the enhanced viewing experience. In October 2011, TrueVisions launched early-bird incentives for premium subscribers to replace their set-top boxes with a new hybrid model, which not only supports high-definition content with greater viewing experience but is also equipped with MPEG-4 encryption and secured silicon technology. The new, more secure MPEG-4 broadcasting system, which was successfully activated in mid-July 2012, effectively eradicated the unauthorized access of TrueVisions’ premium content. TrueVisions continued to differentiate and strengthen its portfolio with a wide array of world-class quality content as well as exclusive partnership with several world’s leading content providers. In addition, its HD content offering was almost tripled from 17 channels in the previous year to 50 channels, a level that is unmatched by any other offers in the market. New premium value-added-services such as Thailand’s first 3D service as well as TrueVisions Anywhere, allowing access to TrueVisions’ content anywhere, anytime via multiple platforms, were also introduced in 2013. Meanwhile, TrueVisions further strengthened its mass-market strategy by introducing the redesigned True Knowledge package to include more great quality channels at an affordable price, launching bundled packages with other products within the Group, as well as collaborating with leading local companies, such as PSI and several cable TV operators. TrueVisions also advanced into the untapped segments by launching various attractive customized packages with its exclusive content to match consumers’ diverse lifestyles and preferences, including Super Family, Super Knowledge and Super Sports. These offerings were well received by the market. In April 2014, subsidiaries under TrueVisions Group successfully acquired the two digital terrestrial TV licences for news and variety channels and started broadcasting these channels, the “TNN 24” and “True4U”, in the same month. This paves way for an enhanced advertising revenue while facilitating TrueVisions opportunity to market its content through a much larger viewer base. The aforementioned developments as well as TrueVisions’ fully-diversified platform with superior quality content and improved customer services will see TrueVisions continue to secure pay TV leadership. At the end of 1Q14, TrueVisions had 2,353,793 customers, of which 777,414 subscribed to normal (premium and standard) packages while the rest were FreeView and Free-to-Air box customers. TrueVisions offers a variety of top local and international channels including movies (e.g., HBO, Cinemax and Fox); sports (e.g., Star Sports and TrueVisions’ own sports channels), infotainment (e.g., Discovery Channel, National Geographic), and news (e.g., CNN, CNBC, Bloomberg, BBC World, Phoenix InfoNews), in addition to free TV channels and pay-per-view.
26 True Corporation Public Company Limited
TrueVisions’ six packages along with the number of non-standard channels (standard channels include six free TV channels and 21 educational channels) included in each package are presented below.
Package: No. of channels Monthly fee (Baht) Platinum HD 173 2,155.15 Gold HD 148 1,568.12 Super Family 138 1,054.15 Super Knowledge 123 590.00 Super Sports 106 495.15 True Knowledge 94 299.00
In addition to the above packages, TrueVisions provides A-La-Carte packages with a maximum of 11 channels where customers can choose according to their subscribed packages.
Other key products/services include: . High Definition Personal Video Recorder (HD PVR), providing advanced features (e.g, recording, zooming, instant-replay) that enhance the viewing experience; . DStv dish as part of the Satellite Selling Kit or SSK promotion, allowing subscribers to watch 59 TrueVisions channels with no monthly fee . TrueVisions Anywhere, enabling customers to enjoy TrueVisions’ and free-to-air channels anywhere at anytime via multiple platforms, including smartphone, tablet, computer and notebook. This application comes with special features such as 2 hours time-shift and 2 days catch-up; and . The popular reality TV show, Academy Fantasia, which runs annually (normally from May to September). The show has helped retain subscribers during the low- season while generating key content for other parts of True Group.
TrueLife+ TrueLife+ was launched in 2010 as the umbrella under which True Group bundles its products and services. TrueLife+ offers customers greater value through packages that suit their lifestyles. Bundled Packages . The TrueLife FreeView promotion which offers free airtime for TrueMove/ TrueMove H subscribers, depending on the monthly fee and length of service contract. FreeView customers can upgrade to the Knowledge package which has 13 additional channels; . A single set-top box that can receive both Ku- and C-band signals, priced at Baht 1,290 with no additional monthly charge (for online shopping via www.weloveshopping.com). This provided up to 240 quality TV shows from TrueVisions and free-TV channels with a better signal quality, even during rain, plus a special offer of an additional 12 TrueVisions channels for TrueMove/TrueMove H customers; . Customers who use two products of True Group are eligible for additional priviledges such as, unlimited free Wifi, free HD PVR service, and free HD channels;
27 True Corporation Public Company Limited
. Customers who use three products of True Group for at least Baht 599 per month per service are eligible for a 10 percent discount on all services; . The SukX2 convergence package, offering ULTRA hi-speed Internet subscribers via DOCSIS technology with a minimum speed of 12 Mbps as well as free viewing of TrueVisions’ 108 channels and 3 HD TV channels, starting from Baht 699 per month; and . The “SukX3” convergence package, offering TrueOnline’s ULTRA hi-speed Internet with a download speed of 12 Mbps, TrueVisions’ 108 regular and 3 HD TV quality channels, and TrueMove H’s iSmart package (Baht 199 per month), which includes 100-minute bonus calls, 300 MB of 3G data and 10 hours of WiFi, starting from only Baht 799 per month. True Group is focusing on convergence as its key long-term strategy for driving sustainable growth across all ranges of products and services.
Marketing Strategy True Group is Thailand’s leading lifestyle brand with an aim to provide tailored solutions and a range of bundled telecommunications services across its voice, video and data platforms that match with all customer lifestyles. The Group believes that demand has been shifting towards convergence services that can fulfill all lifestyle needs. These marketing strategies differentiate the Group from its competitors while facilitating a greater market share and lowering churn rates. Given rising competition in True Group’s core businesses, retention marketing is also its key strategy.
Distribution and Sales To reach the consumer segment, True Group offers all of its services through shops in the BMA and the provinces. Each of these outlets is staffed by its personnel and is equipped for one-stop shopping, offering a range of wireline, wireless communications services, pay TV services, handsets, accessories, modems and other telecommunications equipment, as well as, in the case of the larger True stores, Internet access. True Group also sells its products and services throughout Thailand through accredited dealer shops, independent distributors and dealers who work on a commission basis. Our conventional distribution channels include: . Wholesale partners who purchase deactivated SIM cards and top-up cards, mobile devices and accessories from the Group for distribution onto sub-dealers, manage sub-dealers and provide logistical support. Wholesale partners primarily sell True Group’s prepaid SIM cards and top-up cards. Sub-dealers also provide other services such as mobile handset repairs as well as music and games downloads; . The direct sales channel markets True Group’s services to SME and corporate clients. It also plays an important role in customer acquisitions for True Mobile Group. The Group further categorizes the direct sales channel into direct sales teams, direct sales agents, and freelances; . Multi-retailers located in hypermarkets, specialty stores, and convenience store chains; . Retail shops, which refer to True shops, True Group partners’ shops and kiosks, located in high visibility and high traffic locations, such as shopping malls, hypermarkets, office buildings, etc. TrueLife shops and TrueCoffee also fall into this category; and . Retail channel partners who comprise retail partners and mobile sales vans, or “Move Up Vans”, which are mobile sales points for True Group sales agents nationwide.
28 True Corporation Public Company Limited
True Group’s prepaid services (mainly mobile telecommunications services) are normally sold through the first three channels – wholesale partners, direct sales and multi-retailers – while retail shops (both our own and our partners’) serve as a sales channel for True Group’s convergence products and services as well as an after-sales service channel. For top-up services (to refill TrueMove/TrueMove H prepaid airtime, TrueMoney credit, or topping up TrueLife FreeView packages), the Group offers several electronic channels in addition to using physical cards (i.e., Cash card and Top-up card) as follows: . ATM - Subscribers can transfer funds directly from their bank account to top up either a TrueMove/TrueMove H or TrueMoney account; . TrueMoney - Mobile payment services; . E-cash card - Airtime purchases can also be made over the counter at our partners such as 7-Eleven; . Direct top up - Customers can use a device installed at several of the Group’s own locations as well as its partners, such as 7-Eleven, to directly top-up their accounts (an online top up transaction is also categorized as a direct top-up); and . Public phone booths –True Mobile Group prepaid subscribers can top-up by as little as Baht 10 at over 30,000 public phone booths in the BMA. In addition, TrueMove/TrueMove H airtime can be sold through independent non-mobile agents or “over-the-air” airtime resellers such as individuals or small shops who are provided with a special SIM card to allow airtime transfer to end-users. These agents can refill their airtime credit through several means (e.g., Cash card, Top up card and ATM). Although physical cards make the greatest contribution to the Group’s top-up revenues, electronic channels have become increasingly popular among its customers due to the variety of payment methods and the increased number of electronic top-up locations. Since 2009, True Group has boosted profitability by pushing top-up sales through electronic channels to save costs associated with physical cards (production, logistics and warehousing, etc.). It also continued to manage its sales mix so that revenues are generated through channels that are subject to low commission (i.e., via ATM). The Group arranges account executives dedicated to both the SME and the corporate segments, and sales managers and sales executives servicing the various SME and corporate subscribers.
Procurement of Products and Services Network Capacity for Services True Group believes that its extensive fiber-optic wireline network covering the whole of the BMA gives it a key competitive advantage. Voice and data travel through the fiber- optic cable network at a higher speed than through copper wire or via radio waves. In addition, the network architecture can eliminate call failures due to accidental interruption or any other causes. The network has a spider web design covering the entire service area, which enables True Group to utilize other routes should one suffer any malfunction. Network Acquisition True Group primarily imports network equipment directly from leading telecommunications technology suppliers from around the world. The Group has also employed a number of suppliers to assist in network acquisition and installation to expand its service coverage, and, as such, is not dependent upon any specific distributor or supplier.
29 True Corporation Public Company Limited
Technical and Management Support In the past True Group and its subsidiaries acquired technical and management support from strategic partners: Verizon Communications Inc for True, Orange SA for TrueMove and MIH for TrueVisions. No further support has been provided since its strategic partners sold or reduced their shareholdings. These strategic partners all transferred substantial telecommunications expertise to True Group during the time when they were its shareholders and its management team is capable of operating without their support.
Thai Telecom Industry Mobile Business Thailand’s mobile market has continued to grow, reaching approximately 93.7 million at the end of 1Q14, excluding TOT, CAT Telecom and the Mobile Virtual Network Operators (MVNOs) using TOT’s network. This increased Thailand’s mobile penetration rate to about 144.6 percent at the end of 1Q14 (based on a 2013 population of 64.8 million as estimated by the Department of Provincial Administration). This high penetration rate was led by the increasing trend of mobile users carrying more than one handset and/or having Internet-ready devices such as feature phones, smartphones, tablets and netbooks. This is comparatively low when compared to other countries in the region with high mobile penetration such as Hong Kong (230 percent of the population) and Singapore (159 percent of the population); (source: BuddeComm’s estimation) The Group’s two largest competitors, AIS (together with its majority-owned subsidiary, DPC) and DTAC held a 45.3 percent and 30.1 percent market share of subscribers (excluding subscribers of CAT Telecom, TOT and its MVNOs), respectively, while True Mobile Group had 23.1 million subscribers, accounting for 24.6 percent of the market, at the end of 1Q14. The progression into a more liberalized industry landscape through the NBTC’s license issuances and the successful establishment of TRUEGIF in December 2013 mark new era for the Thai Telecommunications industry. These developments facilitate growth and fair competition in the industry. The mobile industry in Thailand experienced an increased competition especially after all three major operators launched their mobile services on the 2.1 GHz spectrum. Non-voice segment remained the major driver for the industry’s growth given rising popularity of social networking, higher adoption and more affordability of smartphones and smart devices as well as continued development of content and applications. Mobile service providers competed for market share through enhanced network and service quality as well as more choices of competitive mobile packages. Several campaigns and new services, bundling devices with a various selection of data and voice packages, were launched to match all usage habits of both data-centric and voice-centric users. Operators also focused more on introducing attractive promotions, targeting 2G subscribers to upgrade to 3G service. In addition, more varieties of 3G devices, smartphones and smart devices were introduced to the Thai market, especially affordable smartphones and house-brand devices targeting entry-level smartphone users.
30 True Corporation Public Company Limited
Fixed-line Telephone Business The fixed-line market in Thailand is currently serviced by three companies. TOT, the state–owned enterprise that formerly regulated the provision of fixed-line telephone services, is still the only nationwide provider of local and domestic long-distance fixed- line telephone services in Thailand. Two other operators, True and TT&T Public Company Limited or TT&T are providing fixed-line telephone services under agreements to operate granted by TOT. While the Group’s service coverage concentrates in the BMA, TT&T covers certain provinces of Thailand. At the end of 1Q14, fixed-line subscribers in Thailand further declined to 6.0 million subscribers (source: NBTC), representing approximately 9 percent of the Thai population. The decline was due to ongoing popularity of wireless and mobile Internet services. True Group was the largest fixed-line operator in the BMA with approximately 1.7 million subscribers, accounting for 28.1 percent of the market. True Group’s fixed-line telephone business has been mostly affected by the continuing migration of traffic to mobile, which is a global trend. In addition, its fixed-line telephone business faces growing competition from VoIP services whose tariffs are lower than those of traditional fixed-line operators. Rising Internet usage and the growing availability of personal computers and smart devices also contributed to the increasing usage of these devices by Thai consumers for making VoIP calls. Business Data Services The business data market in Thailand continues to grow at about 7 percent a year due to the popularity of online data transmission and an increase in Internet users. The competition between the large number of operators and suppliers of alternatives remains high. The major players in the data communications market in Thailand currently include TOT, CAT Telecom, UIH and UCOM, ADC under Intouch (formerly Shin Corporation Group), TT&T and True Group. The Group’s principal competitors are TOT (which has the widest coverage throughout Thailand) and UCOM (which has broader coverage outside of the BMA than True Group). In addition, another market player like Symphony also grew as it targets the very high-end fiber segment. At the end of 2013, True Group was the second largest business data provider with a 24 percent share of the nationwide market value of approximately Baht 18.1 billion. TOT remained the market leader with a 26 percent share and UIH ranked 3rd with a 21 percent share. (Source: True Group’s estimation) Broadband Business The broadband subscriber base in Thailand is relatively small with a household penetration rate of about 22 percent of some 23.5 million households (source: broadband subscribers from NBTC and households estimation from the Department of Provincial Administration), compared to rates in other countries in the region such as Hong Kong (85 percent) and South Korea (39.3 percent) (source: BuddeComm’s estimation). There are several operators in the Thai broadband market, including TOT, CAT Telecom, JAS operating under the “3BB” brand, CS Loxinfo Public Company Limited, ADC, and True Group. True Group has continued to experience solid growth in its broadband subscriber base, expanding to 1.9 million at the end of 1Q14. The Group is the largest broadband service provider in Thailand based on the number of subscribers, having approximately a 37 percent share of Thailand market (Source: True Group’s estimation) as of 1Q14.
31 True Corporation Public Company Limited
There are several reasons for the continued increase in the number of broadband subscribers, including more competitive broadband offerings introduced to the market and the increased popularity of online content, such as games and social networks. Meanwhile, TrueOnline has been able to reap the benefit of True Group’s strong convergence platform by bundling its broadband service with other services within the group; these attractive bundling offerings have received excellent response from the market. In November 2010, the Cabinet approved the Information and Communication Technology Ministry’s National Broadband Plan, which aims to spend Baht 20 billion over the next five years to provide hi-speed Internet coverage to 80 percent of the population with a targeted top download speed of 100 Mbps. The policy aims to provide free hi-speed Internet to selected schools, hospitals and low-income earners. TrueMove joined five other operators, including TOT and CAT Telecom, in signing a Memorandum of Understanding to support the policy which is in-line with True Group’s mission to help reduce the digital divide in Thailand and transform the kingdom into a knowledge-based society. This initiative, when fully implemented, would support the mission of the Asean Economic Community (AEC), due to be formed in 2015, to promote wider coverage and increased access to broadband. The Smart Thailand project launched by the Thai Government, aiming to increase broadband coverage to 95% of the population by 2020, should further boosted broadband penetration in Thailand. True Group therefore believes that growth in the Thai broadband market will continue to grow strongly. Pay TV Business Thailand had roughly 4.8 million pay TV subscribers at the end of 2013, representing a household penetration rate of approximately 21.1 percent. Including satellite and free-to- air subscribers, total subscriber numbers at the end of 2013 were around 16.1 million households with a household penetration rate of approximately 70.6 percent (Source: True Group’s estimate). This is relatively low when compared with other Asian countries: Hong Kong 86 percent, and Taiwan 97 percent (Source: CASBAA). This presents growth potential of the industry. TrueVisions is the only nationwide pay TV provider. However, its position as the principal provider is not secured by regulation and it continues to face the threat of new entrants as well as intensifying competition. Following the enactment of the Radio and Television Broadcasting Act on March 5, 2008, pay TV operators are allowed to advertise, creating opportunities to generate additional revenues from existing content. This adds value to TrueVisions’ business; however, it could also strengthen the financial position of small pay TV operators and help them compete more aggressively. Nevertheless, TrueVisions’ superior content provides it with a strong advantage. After receiving approval from MCOT to advertise, TrueVisions sees itself as a highly attractive choice for advertisers mainly because of its unique audience profile. This comprises both premium subscribers with high purchasing power and growing numbers of mass and free-to-air market customers. Furthermore, the nature of TrueVisions content allows it to clearly define the viewer characteristics for each channel to the benefit of advertisers. Starting in 2010, TrueVisions strategically expanded into the mass and free-to-air market to tap its lucrative, high-margin advertising revenue. Increasing the number of eyeballs or audience size is crucial to the business’ success in the mass and free-to-air market, which is highly competitive. The overall TV advertising market was valued at about Baht 24.7
32 True Corporation Public Company Limited
billion in 1Q14 (Source: Advertising Association of Thailand). The pay TV segment accounts for a relatively small percentage of the overall TV advertising market. This relatively low penetration provides long-term growth opportunities for the industry. Unauthorized access of TrueVisions’ programming signals had pressured its financial performance for the past years. Meanwhile, TrueVisions had worked toward the rolling out of initiatives to protect the intellectual property rights relating to content deployed on its platforms. In October 2011, TrueVisions started replacing old set-top boxes with the new ones which support an enhanced/more secure broadcasting system (using MPEG-4 encryption). Given the strong response from its customers, TrueVisions activated the system in July 2012, earlier than initial target of October 2012. Once activated, the new broadcasting system effectively eradicated the piracy of TrueVisions’ premium content. Although competition over the broadcasting rights of popular content has increased, TrueVisions’ solid platform as well as its strong relationship with leading content providers give it a competitive advantage. The completed establishment of NBTC in October 2011, led to the draft of regulations governing TV broadcasting operators including terrestrial TV, satellite TV and cable TV operators. Once these regulations become effective, all operators will come under the same supervision of NBTC as TrueVisions. Meanwhile, in January 2013, the Broadcasting Committee approved the issuance of satellite TV licenses to a number of operators including TrueVisions, enabling all operators to compete in a more level- playing field while operating according to the same regulatory standards as TrueVisions. In addition, the 24 digital terrestrial TV licenses, two of which are under TrueVisions Group’s subsidiaries, were awarded to the winning bidders in April 2014. This marks a new era for television industry in Thailand. The shift to digital TV brings newcomers into the industry which will eventually result in a greater variety of content offerings and higher competition for advertising. TrueVisions, however, is very well placed to capture growth opportunity in the digital TV market given its strong and fully-diversified platform with a wide range of exclusive and own produced content. Entering into the digital TV market complements TrueVisions’ existing Pay TV business while also facilitating growth in its advertising and sponsorship revenues.
Regulatory Update The regulatory landscape continues to evolve through the commencement of the NBTC in October 2011 as well as the progression into a more liberalized landscape of the Thai telecommunications industry. These resulted in various issuances of regulations and licenses, including the 2.1 GHz spectrum licenses in December 2012 and the broadcasting and television services licenses, by the NBTC. In addition, NBTC successfully held an auction and granted the licenses for the digital terrestrial TV in December 2013 and April 2014, respectively. Meanwhile, the winning bidders, including subsidiaries under True Group, started broadcasting the digital terrestrial TV channels in April 2014. However, there are several pending regulatory issues in which True Group hopes to see progress, including the re-farming of frequencies that are utilized by operators under the temporary measure or notification concerning protection for subscribers upon the expirations of concession agreements or the Agreement to Operate mandated by the NBTC.
33 True Corporation Public Company Limited
The list of all licenses obtained by True Group’s subsidiaries and associates is shown below.
True’s subsidiaries/ associates Type Business Validity Issued date Expiry date Internet Service Provider (ISP) license KSC Commercial Internet 1 1 ISP 5 years 23 Jun 2014 22 Jun 2019 Co., Ltd. 2 True Internet Co., Ltd. 1 ISP 5 years 18 Aug 2009 17 Aug 2014 3 Asia Infonet Co., Ltd. 1 ISP 5 years 5 Feb 2010 4 Feb 2015 4 True International Gateway 2 International 5 years 19 May 2011 18 May 2016 Co., Ltd. Internet Gateway & Internet Exchange (IIG & IX) 5 True Move Co., Ltd. 1 ISP 5 years 25 Aug 2009 24 Aug 2014 Telecommunications license Resale Internet & 6 True Life Plus Co., Ltd. 1 5 years 2 Aug 2009 1 Aug 2014 mobile services International 7 True Internet Co., Ltd. 1 5 years 11 Oct 2009 10 Oct 2014 Calling Card (ICC) True Public Communication Public Phone 8 1 5 years 29 Jun 2009 28 Jun 2014 Co., Ltd. Service True International Gateway 3 International 15 years 11 Nov 2009 10 Nov 2024 9 Co., Ltd. Private Leased Circuit (IPLC) True International Communication International Direct 10 3 20 years 25 Jan 2007 24 Jan 2027 Co., Ltd. Dialing (IDD) True Universal Convergence 11 3 Fixed Line Service 20 years 8 Dec 2006 7 Dec 2026 Co., Ltd. Resale PSTN True Universal Convergence (GPRS, DSL) & 12 1 5 years 26 Aug 2009 25 Aug 2014 Co., Ltd. leased circuit/ channel services KSC Commercial Internet 13 1 Resale IPLC 5 years 11 Nov 2009 10 Nov 2014 Co., Ltd. Resale mobile 14 Real Move Co., Ltd. 1 5 years 16 Dec 2010 15 Dec 2015 services Wireless network 15 Real Future Co., Ltd. 3 15 years 7 Dec 2012 6 Dec 2027 service Broadcasting and Television license Subscription Broadcasting and 16 Cineplex Co., Ltd. Television 2 years 21 Jan 2014 20 Jan 2016 Television Service Service Subscription Broadcasting and 17 Panther Entertainment Co., Ltd. Television 2 years 21 Jan 2014 20 Jan 2016 Television Service Service Subscription Broadcasting and 18 True Visions Group Co., Ltd. Television 2 years 21 Jan 2014 20 Jan 2016 Television Service Service Broadcasting Subscription 19 True Visions Group Co., Ltd. and Television Television 15 years 21 Jan 2013 20 Jan 2028 Network Network Service Broadcasting and Digital Terrestrial 20 True4U Station Co., Ltd. 15 years 25 Apr 2014 20 Apr 2029 Television Service Television Service Broadcasting and Digital Terrestrial 21 Thai News Network Co., Ltd. 15 years 25 Apr 2014 20 Apr 2029 Television Service Television Service
34 True Corporation Public Company Limited
The Company and Subsidiaries’ Major Assets Property, plant and equipment Network equipment and non-network equipment are included in property, plant and equipment. Network assets of 2.6 million lines, PCT, Cellular Mobile phone, Internet services and Pay TV under the Joint Operation and Joint Investment and Agreement for operations must be transferred to TOT Public Company Limited (“TOT”), CAT Telecom Public Company Limited (“CAT”) and MCOT Public Company Limited (“MCOT”).
TFRIC 12 "Service concession arrangements" becomes effective in 2014, the company has been classified in accordance with such a type of intangible assets.
Unit: Million Baht Network equipment, net Restated 31st March 2014 31st December 2013 Consolidated Company Consolidated Company Building and construction 172 24 96 25 Telephone network equipment 2,191 2,191 2,255 2,255 Mobile phone network equipment 30,219 149 32,242 172 Public Phone 18 18 20 20 Multimedia network equipment 10,120 - 9,492 - Power supply and computer 94 83 100 86 Pay - TV 5,216 - 5,497 - Work in progress 17,447 16 13,786 16 Net book value 65,477 2,481 63,488 2,574
Included in net book value of Mobile phone network equipment as at 31st March 2014 are the HSPA technology mobile phone equipment under the lease agreement between subsidiary and CAT amount of Baht 18,538.08 million (comprising of mobile telephone network equipments in amount of Baht 14,095.44 million, work in progress amount of Baht 4,304.14 million and others amount of Baht 138.50 million). The net assets amount of Baht 17,686.21 million (equivalent to 95.40 percent of the total assets under the agreement) comprising of telecommunication tower, signal transmission equipments and electronic equipments of which CAT has an option to buy at cost plus interest as stipulated in the agreement. The Group applied the accounting standard No. 17 (2012 revision): Leases and considered operating leases because the risk and reward has not been transferred. However, the executives had the opinion that it was must unlikely that CAT would exercise the option.
35 True Corporation Public Company Limited
Net value of network equipment in the consolidated and the Company financial statement which were transferred to TOT and CAT under the Agreement for Joint Operation and Joint Investment Agreement and Agreement for operation are as follows: Unit: Million Baht Restated 31st March 2014 31st December 2013 Consolidated Company Consolidated Company TOT 294 123 377 144 CAT 3,733 - 5,733 - Net book value 4,027 123 6,110 144
Unit: Million Baht Network equipment under the Agreements Restated 31st March 2014 31st December 2013 Consolidated Company Consolidated Company Mobile phone network equipment 4,027 123 6,110 144 Net book value 4,027 123 6,110 144
According to the agreements, the True’s Group has the right to operate and maintain these assets over the agreements periods. The True’s group assigns the right to operate network equipment which transfer to TOT and CAT (according to the conditional assignment over the Agreement for Joint Operation and Joint Investment, Agreement for operation and licenses) to secure of the Thai Baht borrowings. As at 31st March 2014 the rights to operate network equipment of the Group are secured the borrowings in amount of Baht 3,859.57 million.
Non-network assets are the assets under finance leases including Furniture, fixture and equipment in amount of Baht 68.57 million. The Group has the right to operated, utilised and disposal those assets. The detail assets are as follows:
Unit: Million Baht Non-network equipment 31st March 2014 31st December 2013 Consolidated Company Consolidated Company Land and land improvement 149 - 149 - Leasehold right & improvement 487 31 503 36 Furniture, fixture and equipment 862 71 1,246 74 Vehicle 16 1 16 1 Power Supply & computer 1,615 56 1,369 57 Work in progress 900 21 1,096 13 Net book value 4,029 180 4,379 181
36 True Corporation Public Company Limited
Intangible assets
Unit: Million Baht Intangible assets Restate 31st March 2014 31st December 2013 Consolidated Company Consolidated Company Computer Software 3,015 137 2,947 144 Trademark, Copyright and licence 16,041 - 12,594 - Leased transponder equipment 2,962 - 3,079 - Film and Program right 1,264 - 690 - Rights to operate 1,254 - 1,288 - Service contract 8,401 - 8,587 - Service concession arrangement 4,971 4,971 5,314 5,314 Work in progress 310 - 240 - Net book value 38,218 5,108 34,739 5,458
Computer software development cost Computer software are development cost which enhances or extends the performance of computer software programmers beyond their original specifications is recognised as a capital improvement and added to the original cost of the software. At 31 March 2014 net book value was Baht 3,015 million.
Trademark, Copyright and licence consisting Other rights Other rights represent the consideration paid by subsidiaries to obtain the right to use. At 31st March 2014 net book value was Baht 68 million. Right to operate IMT 2.1 GHz Bandwidth License IMT 2.1 GHz Bandwidth license was granted by the National Broadcasting and Telecommunication Commission (“NBTC”) to a subsidiary. At 31st March 2014 net book value was Baht 12,342 million. Right to operate Digital Terrestrial TV License Digital Terrestrial TV License was granted by the National Broadcasting and Telecommunication Commission (“NBTC”) to subsidiaries. At 31st March 2014 net book value was Baht 3,631 million.
Right to use transponder Right to use transponder is under long-term lease agreement. At 31 March 2014 net book value was Baht 2,962 million.
37 True Corporation Public Company Limited
Film and program rights Film and program right represent the rights acquired and obligation incurred under license agreements of the subsidiary to obtain program and the program material in readily for the first showing. At 31st March 2014 net book value was Baht 1,264 million. (included right expire in 1 year)
Rights to operate consisting The right to operate NON-POTS and to hang dropwire The right to operate NON-POTS and hang dropwire services represents fair value of TOT’s interest in the nationwide and multimedia network which a subsidiary issued share in exchange. At 31st March 2014 net book value was Baht 140 million. Rights to operate Rights to operate represent the discounted cash flow of minimum fees that must be paid during the life of the agreement. At 31st March 2014 net book value was Baht 1,114 million.
Service contract Service contract represent the fair value of identifiable intangible asset derived from a business acquisition. At 31st March 2014 net book value was Baht 8,401 million.
Service concession arrangement Service concession arrangement applying to the TFRIC 12: Service concession arrangements, the Company has reclassify assets transferred to the grantor, TOT which were presented under Property, plant and equipment. At 31st March 2014 net book value was Baht 4,971 million.
38 True Corporation Public Company Limited
3. List of Board of Directors, Executive Officers and Major Shareholders The Board of Directors As of 15th July 2014, the Board of Directors of the Company is as follows: Name Position
1. Mr. Vitthya Vejjajiva Independent Director, Chairman of the Audit Committee and Member of the Corporate Governance Committee 2. Dr. Kosol Petchsuwan Independent Director, Member of the Audit Committee and Chairman of the Corporate Governance Committee 3. Mr. Joti Bhokavanij Independent Director, Member of the Audit Committee, Member of the Finance Committee and Member of the Compensation and Nominating Committee 4. Mr. Harald Link Independent Director 5. Prof. Rawat Chamchalerm Independent Director 6. Mr. Dhanin Chearavanont Chairman of the Board and Chairman of the Compensation and Nominating Committee 7. Dr. Ajva Taulananda Vice Chairman of the Board, Chairman of the Finance Committee and Member of the Corporate Governance Committee 8. Prof. Athueck Asvanund Vice Chairman of the Board and Group General Counsel 9. Prof. Dr. Warapatr Todhanakasem Director and Member of the Finance Committee 10. Mr. Umroong Sanphasitvong Director, Member of the Finance Committee and Member of the Compensation and Nominating Committee 11. Mr. Vichaow Rakphongphairoj Director and Group Chief Operating Officer - Network Quality and Operation & Maintenance Broadband, Mobile, CATV 12. Mr. Chatchaval Jiaravanon Director and Managing Director - Group Investment 13. Mr. Soopakij Chearavanont Director and Member of the Compensation and Nominating Committee 14. Mr. Narong Chearavanont Director 15. Mr. Suphachai Chearavanont Director, President and Chief Executive Officer
39 True Corporation Public Company Limited
The Executive Officers As of 15th July 2014, the executive officers of the Company are as follows: Name Position
1. Mr. Suphachai Chearavanont Director, President and Chief Executive Officer 2. Prof. Athueck Asvanund Vice Chairman of the Board and Group General Counsel 3. Mr. Vichaow Rakphongphairoj Director and Group Chief Operating Officer – Network Quality and Operation & Maintenance Broadband, Mobile, CATV 4. Mr. Chatchaval Jiaravanon Director and Managing Director - Group Investment 5. Mr. Noppadol Dej-Udom Group Chief Financial Officer 6. Mr. William Harris Executive Director - International Business Development and Assistant to CEO 7. Mr. Kachorn Chiaravanont Group Executive Director - Corporate Affairs 8. Mr. Thiti Nantapatsiri Group Executive Director - Regulatory 9. Mr. Adhiruth Thothaveesansuk Group Managing Director - Regional Management 2 10. Mr. Songtham Phianpattanawit Group Executive Director - Enterprise / Business Sector & International Services 11. Mr. Anat Mekpaiboonvatana Group Managing Director - Regional Management 4 12. Mr. Chareon Limkangwanmongkol Group Managing Director - Regional Management 3 13. Dr. Papon Ratanachaikanont Group Executive Director - Strategic Business Development and Executive Assistant to CEO 14. Mr. Carl Goodier Group Chief Customer Service Officer 15. Mr. Siripoj Kunakornphan Group Managing Director - Regional Management 1
Note The term “Executive Officers” refers to the notification of the Capital Market Supervisory Board which means Directors; the President; persons with managerial authority who are among the top four ranked individuals in the Company, after the President; and all other persons who occupy a position equivalent to a top four ranking.
40 True Corporation Public Company Limited
Major Shareholders
True Corporation Public Company Limited Major Shareholders 1/ (as of 4th July 2014) Name No. of Shares % of Total (Million Shares) Issued Shares 1. CP Group 2/ 8,819.83 60.70 2. THAI NVDR COMPANY LIMITED 3/ 891.58 6.14 3. UOB KAY HIAN (HONG KONG) LIMITED - Client 483.06 3.32 Account 4/ 4. UBS AG HONG KONG BRANCH 5/ 313.29 2.16 5. HSBC (SINGAPORE) NOMINEES PTE LTD 6/ 134.13 0.92 6. MR. SIRISAK SONSOPON 101.00 0.70 7. MR. JAKAPHAN WACHIRAPONG 82.00 0.56 8. STATE STREET BANK EUROPE LIMITED 7/ 72.75 0.50 9. CHASE NOMINEES LIMITED 46 7/ 71.05 0.49 10. CREDIT SUISSE INTERNATIONAL 7/ 70.34 0.48
1/ There is no cross-shareholding between the Company and its major shareholders. 2/ Consisting of (1) Charoen Pokphand Group Company Limited (“CPG”) which operates businesses in investment, chemical products import and distribution, and providing technical services, where the Chearavanont Family is a major shareholder by holding 91.65% of the shares (The first ten shareholders are Mr. Sumet Jiaravanon 12.96%, Mr. Dhanin Chearavanont 12.96%, Mr. Jaran Chiaravanont 12.75%, Mr. Montri Jiaravanont 12.63%, Mr. Kiat Chiaravanont 5.76%, and Mr. Phongthep Chiaravanont 3.65% with the following shareholders each holding 3.62%: Mrs. Yupa Chearavanont, Mr. Prathip Chiaravanond, Mrs. Phatanee Leksrisompong, Mr. Watcharachai Chiaravanond, Mr. Manu Chiaravanond and Mr. Manas Chiaravanond), held 34.04% of TRUE’s shares (2) Unique Network Company Limited which operates business in investment (41.06% held by Thana Holding Company Limited and 58.94% held by Art Telecom Service Company Limited), held 9.21% of TRUE’s shares (3) Wide Broad Cast Company Limited which operates business in investment (58.55% held by Thana Holding Company Limited and 41.45% held by Telecommunication Network Company Limited), held 6.70% of TRUE’s shares (4) C.P. Interfood (Thailand) Company Limited which operates businesses in production and wholesale of ready-made meat products (99.99% held by CPG), held 4.07% of TRUE’s shares (5) Bangkok Produce Merchandising Public Company Limited which operates businesses in buying and selling of animal feed raw materials (99.44% held by Charoen Pokphand Foods Public Company Limited (“CPF”), held 1.75% of TRUE’s shares (6) Bangkok Telecom Holding Company Limited which operates business in investment (99.99% held by Charoen Pokphand Holding Company Limited), held 1.73% of TRUE’s shares (7) Worth Access Trading Limited which operates business in investment (100% held by CPG Overseas Company Limited), held 1.58% of TRUE’s shares (8) Kasetphand Industry Company Limited which operates businesses in production and distribution of livestock farming equipment products (99.99% held by CPG), held 1.23% of TRUE’s shares and (9) Charoen Pokphand Holding Company Limited which operates business in investment (99.99% held by CPG), held 0.39% of TRUE’s shares (All 9 companies do not undertake the same business and compete with TRUE GROUP) 3/ A subsidiary wholly owned by the SET. The NVDR is automatically regarded as a listed security on the SET. By investing in NVDRs, the investor will receive all financial benefits, as if they invest in a company’s ordinary shares. The only difference between investing in the NVDR and the company’s ordinary shares is that NVDR holders have no rights to vote. 4/ The company is registered in Hong Kong invests in the SET without disclosing that the investment is neither for itself nor for others. True has no authority to request that company for the afore-mentioned disclosure. 5/ The company is registered in Switzerland and invests in the SET without disclosing that the investment is neither for itself nor for others. True has no authority to request that company for the afore-mentioned disclosure. 6/ The company is registered in Singapore and invests in the SET without disclosing that the investment is neither for itself nor for others. True has no authority to request that company for the afore-mentioned disclosure. 7/ The company is registered in Britain and invests in the SET without disclosing that the investment is neither for itself nor for others. True has no authority to request that company for the afore-mentioned disclosure.
41 True Corporation Public Company Limited
4. History of Capital Increases and Dividend Payments for the Past 3 Years
(1) History of Capital Increases for the Past 3 Years The Company does not have any history of capital increase during the past three years.
(2) Dividends The Company has not paid or declared any dividends on its issued shares since operations began. The Company can pay dividends only out of its profits after deducting its cumulative losses, and only if it has set aside a legal reserve. The Company has a policy to declare an annual dividend equal to at least 50% of its net profits from the Company’s Financial Statement for that year, after statutory reserves and subject to availability of cash, according to the regulations indicated in related laws and conditions of its credit facilities. For the dividend policy of subsidiary companies, each subsidiary company’s Board of Directors will consider the payment of dividends from the balance of cash flows taking into account the capital expenditure requirements of the subsidiary company. Subject to the availability of cash flows at the subsidiary company and only if it has set aside a legal reserve, the Board of Directors of each subsidiary company shall consider the payment of dividends on a case-by-case basis.
42 True Corporation Public Company Limited
5. Company Subsidiaries and Associated Companies GROUP INVESTMENT STRUCTURE As at 31st March 2014
True Corporation Public Company LLimitedimited ณ วันที่ 30 กันยายน 2551
99.48% Bangkok InterTeletech Public 99.99% Company Limied
Telecom Holding Co., Ltd. 62.50% 60.00% 99.99% Telecom KSC 99.95% Internet True Move Co., Ltd. 91.08% Co., Ltd. True Multimedia Co., Ltd. MKSC World Dot Knowledge 99.99% Real Future Co., Ltd. Com Co. Ltd. Service Center 99.84% True Distribution KSC Commercial 99.99% 99.99% Co., Ltd. Asia Wireless Communication Co., Ltd. Internet Co., Ltd. and Sales Co., Ltd.
99.99% True International Gateway Co., Ltd. 99.99% 99.31% True Information Technology Co., Ltd. True Visions Public Company Limited 99.96% True Music Co., Ltd.
90.00% Asia DBS Public Company Limited 99.99% Click TV Co., Ltd. 99.99% True Universal Convergence Co., Ltd. 99.99% True International
Communication Co., Ltd. 100.00% K.I.N. (Thailand) Co., Ltd. 99.99% Satellite Service Co., Ltd. (Foreign Company) 99.99% Samut Pakan Media Corporation K.I.N. (Thailand) Co., Ltd. 99.94% 99.99% True Touch Co., Ltd. Co., Ltd. 25.99% Channel [V] Music (Thailand) Co., Ltd. Hutchison Wireless 92.50% 99.99% 99.93% MultiMedia Holdings Limited 99.99% True Visions Group Co., Ltd. True Public Communication Co., Ltd. Song Dao Co., Ltd. 99.99% Cineplex Co., Ltd. 99.99% 73.92% Hutchison CAT Wireless 100.00% Goldsky Co., Ltd. Real Move Co., Ltd. 99.99% 99.99% MultiMedia Limited True Digital Media Co., Ltd. True Vistas Co., Ltd.
100.00% Dragon Delight Investments Limited 99.99% BFKT (Thailand) Limited 100.00% 99.99% Rosy Legend Limited Tele Engineering and Services Co., Ltd. 15.76% 100.00% Thai Smart Card Co., Ltd. Hutchison MultiMedia Services Golden Light Co., Ltd. 99.99% (Thailand) Limited 99.34% True Visions Cable Public Company Limited 100.00% 99.99% Gold Palace Investments Limited True Internet Co., Ltd. Hutchison 99.99% 99.99% Telecommunication 100.00% True Internet Technology Thai News Network (TNN) Co., Ltd. 65.00% (Thailand) Co., Ltd. (Shanghai) Co., Ltd. Asia Infonet Co., Ltd. 99.99% 100.00% 100.00% GP Logistics Co., Ltd. Panther Entertainment Co., Ltd. Prospect Gain Limited
100.00% 99.99% Golden Pearl Global Limited True DTT Co., Ltd. 99.99% Telecom Asset Management Co., Ltd.
99.99% True Life Plus Co., Ltd. 70.00% True United Football Club Co., Ltd. 99.99% KOA Co., Ltd. BeboydCg Co., Ltd. 51.00% 70.00% SM True Co., Ltd.
20.00% Clearing House for Number 69.94% True Music Radio Co., Ltd. Portability Co., Ltd. 50.00% BEC-TERO True Visions Co., Ltd.
Remark: 1. Group investment structure shown investment holding 10% up. 100.00% Gold Palace Logistics Limited 45.00% 2. There has been no persons who may have conflict of interests with the Company holding its subsidiaries and associated companies’ shares True GS Co., Ltd. more than 10% of total issued shares. 3. True’s inactive subsidiary, Telecom International Co., Ltd, is going to dissolve. 4. As at 31 December 2013 True Corporation Public Company Limited has subscribed 1,933,601,000 units of True Telecommunications Growth Infrastructure Fund. During the first quarter of 2014, the Company additional invested in 1,154,000 units. This resulted in an increase of its equity interest from 33.29% to 33.31%.
43 True Corporation Public Company Limited
INVESTMENT STRUCTURE BY BUSINESS GROUP As at 31st March 2014
2.6 million line Telephone Services, Value Added Service and Digital Data Network True Corporation Public Company Limited
TrueMobile Group TrueOnline TrueVisions
- Real Future Co., Ltd. 100.00 % - Real Move Co., Ltd. 99.48 % - True Visions Group Co., Ltd. 100.00 % - True Digital Media Co., Ltd. 100.00 % - True Move Co., Ltd. 99.43 % - True International Communication Co., Ltd. 99.43 % - True Visions Public Company Limited 99.31 % - True United Football Club Co., Ltd. 70.00 % - True Distribution and Sales Co., Ltd. 99.43 % - BFKT (Thailand) Limited. 100.00 % - Cineplex Co., Ltd. 100.00 % - SM True Co., Ltd 51.00 % - True Music Co., Ltd. 99.40 % - KOA Co.,Ltd. 100.00 % - Click TV Co., Ltd. 99.31 % - Thai News Network (TNN) Co., Ltd. 100.00 % - Telecom Asset Management Co.,Ltd. 100.00 % - True Visions Cable Public Company Limited 98.99 % - True GS Co., Ltd. 45.00 % - Satellite Service Co., Ltd. 99.31 % - Tele Engineering and Services Co., Ltd. 100.00 % Panther Entertainment Co., Ltd. 99.77 % BEC-TERO True Visions Co.,Ltd. 50.00 % - - - Channel [V] Music (Thailand) Co., Ltd. 25.82 % - True DTT Co.,LTd. 100.00 %
Fixed Line Service Data Service Broadband and Internet Other Business
- True Corporation Public Company Limited - True Multimedia Co., Ltd. 91.08 % - True Multimedia Co., Ltd. 91.08 % Holding Company - True Public Communication Co., Ltd. 100.00 % - True Corporation Public Company Limited - True Internet Co., Ltd. 100.00 % - Telecom Holding Co., Ltd. 100.00 % - True Touch Co., Ltd. 100.00 % - True Universal Convergence Co., Ltd. 100.00 % - Asia Infonet Co., Ltd. 65.00 % - Bangkok Inter Teletech Public Company Limited 99.48 % - Asia Wireless Communication Co., Ltd. 100.00 % - True Life Plus Co., Ltd. 100.00 % - K.I.N. (Thailand) Co., Ltd. 100.00 %
- Internet Knowledge Service Center Co., Ltd. 56.93 % - K.I.N. (Thailand) Co., Ltd. (Foreign) 100.00 % - KSC Commercial Internet Co., Ltd. 56.83 % - MKSC World Dot Com Co., Ltd. 91.08 % - True International Gateway Co., Ltd. 100.00 % - Dragon Delight Investments Limited 100.00 % - Gold Palace Investments Limited 100.00 % - Golden Light Co., Ltd. 100.00 % - Goldsky Co., Ltd. 100.00 % - GP Logistics Co., Ltd. 100.00 % - Golden Pearl Global Limited 100.00 % - Gold Palace Logistics Limited 100.00 %
Others - True Information Technology Co., Ltd. 100.00 % - BeboydCg Co., Ltd. 70.00 % - True Vistas Co., Ltd. 100.00 % - True Music Radio Co., Ltd. 69.94 % Remark: - Clearing House for Number Portability Co., Ltd. 20.00 % - True Internet Technology (Shanghai) Co., Ltd. 100.00 % - The companies that are being dissolved are Telecom International Co., Ltd. (100.00%) - The companies that are inactive but need to be maintained are Asia DBS Public Company Limited (90.00%) Telecom KSC Co., Ltd. (34.39%) Hutchison MultiMedia Services (Thailand) Limited (100.00%) Hutchison Telecommunications (Thailand) Co., Ltd. (100.00%) Hutchison CAT Wireless MultiMedia Limited (68.02%) Hutchison Wireless MultiMedia Holdings Limited (92.02%) Rosy Legend Limited (99.48%) Prospect Gain Limited (100.00%) Samut Pakan Media Corporation Co., Ltd. (99.42 %) and Song Dao Co., Ltd. (99.41 %)
44
True Corporation Public Company Limited
Information of its subsidiaries, associated companies and other investments Company Name Type of Business Paid-up Capital Amount % of investment investment (Million Baht) Asia DBS Public Company DBS system operator THB 100 million divided into 100.00 90.00 Limited 10 million ordinary shares with a par value of Baht 10 each and fully paid up. Asia Wireless PCT operator THB 11,441.85 million 1,144.18 100.00 Communication Company divided into 1,144.18 million Limited ordinary shares with a par value of Baht 10 each and fully paid up. Bangkok Inter Teletech Holding Company THB 172,828.29 million 55,723.44 99.48 Public Company Limited divided into 69,131 million ordinary shares with a par value of Baht 2.50 each and fully paid up. BeboydCg Company Limited Production of THB 16.52 million divided 20.00 70.00 animation into 1.65 million ordinary shares with a par value of Baht 10 each and fully paid up. BFKT (Thailand) Limited Mobile equipment THB 12,458.32 million 10,700.00 100.00 Lessor ,both active and divided into 124.58 million passive ordinary shares with a par value of Baht 100 each and fully paid up Cineplex Company Limited Program production THB 1,283.43 million divided 1,413.06 100.00 into 128.34 million ordinary shares with a par value of Baht 10 each and fully paid up. Click TV Company Limited Interactive TV THB 46 million divided into 46.00 99.31 business 4.6 million ordinary shares with a par value of Baht 10 each and fully paid up. Hutchison CAT Wireless Reseller of cellular THB 950 million divided into 944.43 68.02 MultiMedia Limited Digital AMPS 800 95 million ordinary shares with Band A a par value of Baht 10 each and fully paid up Hutchison MultiMedia Dormant THB 230 million divided into 206.03 100.00 Services (Thailand) Limited 23 million ordinary shares with a par value of Baht 10 each and fully paid up Hutchison Dormant THB 54 million divided into 163.80 100.00 Telecommunications 3.6 million ordinary shares (Thailand) Company Limited with a par value of Baht 15 each and fully paid up.
45 True Corporation Public Company Limited
Company Name Type of Business Paid-up Capital Amount % of investment investment (Million Baht) Hutchison Wireless Holding company THB 10 million divided into 4.35 92.02 MultiMedia Holdings 590,000 ordinary shares and Limited 410,000 preferred shares with a par value of Baht 10 each and fully paid up. Internet Knowledge Service Non-government THB 50 million divided into 73.95 56.93 Center Company Limited telecommunication 12 million ordinary shares with a par value of Baht 10 each, 2.67 million ordinary shares fully paid up and 9.33 million ordinary shares call-up Baht 2.50 each K.I.N. (Thailand) Company Holding Company THB 192.70 million divided 192.70 100.00 Limited into 11.75 million ordinary shares with a par value of Baht 16.40 each and fully paid up. KOA Company Limited Assets Management THB 2.5 million divided into 2.50 100.00 1 million ordinary shares with a par value of Baht 10 each and call-up Baht 2.50 each. KSC Commercial Internet Telecommunication THB 153.04 million divided 170.10 56.83 Company Limited internet services into 15.30 million ordinary provider shares with a par value of Baht 10 each and fully paid up. MKSC World Dot Com Internet services and THB 139.64 million divided 541.94 91.08 Company Limited distributor into 13.95 million ordinary shares and 0.01 million preferrence shares with a par value of Baht 10 each fully paid up. Panther Entertainment Artist management and THB 75 million divided into 81.24 99.77 Company Limited related business 7.5 million ordinary shares with a par value of Baht 10 each and fully paid up. Real Future Company Wireless THB 48,844.39 million 48,844.39 100.00 Limited Telecommunication divided into 4,884.44 million services ordinary shares with a par value of Baht 10 each and fully paid up. Real Move Company Reseller of mobile THB 7,000 million divided 7,000.00 99.48 Limited phone service into 70 million ordinary shares with a par value of Baht 100 each and fully paid up. Samut Pakan Media Dormant THB 1 million divided into 1.00 99.42 Corporation Company 10,000 ordinary shares with a Limited par value of Baht 100 each and fully paid up.
46 True Corporation Public Company Limited
Company Name Type of Business Paid-up Capital Amount % of investment investment (Million Baht) Satellite Service Company Sales and rental of THB 1,338 million divided 4,381.79 99.31 Limited equipment related to into 223 million ordinary Pay Television shares with a par value of Baht 6 each and fully paid up. SM True Company Limited Artist management THB 20 million divided into 10.20 51.00 and related business 0.2 million ordinary shares with a par value of Baht 100 each and fully paid up. Song Dao Company Limited Dormant THB 1 million divided into 1.00 99.41 10,000 ordinary shares with a par value of Baht 100 each and fully paid up. Tele Engineering and Content provider THB 25 million divided into 25.00 100.00 Services Company Limited 2.5 million ordinary shares with a par value of Baht 10 each and fully paid up. Telecom Asset Management Marketing THB 2.5 million divided into 1 2.50 100.00 Company Limited Management million ordinary shares with a par value of Baht 10 each and call-up Baht 2.50 each. Telecom Holding Company Holding Company THB 25,733.82 million 25,733.82 100.00 Limited divided into 3,332.62 million ordinary shares with a par value of Baht 10 each, 2,007.72 million ordinary shares fully paid up and 124.90 million ordinary shares call-up Baht 9.26 each and 1,200 million ordinary shares call-up Baht 3.75 each. Telecom International Holding Company THB 300 million divided into 300.00 100.00 Company Limited 30 million ordinary shares with a par value of Baht 10 each and fully paid up. Telecom KSC Company Dormant THB 250,000 divided into 0.15 34.39 Limited 100,000 ordinary shares with a par value of Baht 10 each and call-up Baht 2.50 each
Thai News Network (TNN) News Channel THB 305 million divided into 305.00 100.00 Co., Ltd. 5 million ordinary shares with a par value of Baht 100 each, 2.4 million ordinary shares fully paid up and 2.6 million ordinary shares call-up Baht 25 each.
47 True Corporation Public Company Limited
Company Name Type of Business Paid-up Capital Amount % of investment investment (Million Baht) True Digital Media Company Advertising sale and THB 25 million divided into 25.00 100.00 Limited agency 2.5 million ordinary shares with a par value of Baht 10 each and fully paid up. True Distribution and Sales Distribution Center THB 1,501 million divided 1,501.00 99.43 Company Limited Services into 15.01 million ordinary shares with a par value of Baht 100 each and fully paid up. True DTT Company Limited Television and related THB 257.50 million divided 257.50 100.00 business into 1.10 million ordinary shares with a par value of Baht 100 each, 0.10 million ordinary shares fully paid up and 9.90 million ordinary shares call-up Baht 25 each True Information IT services and THB 688.22 million divided 688.22 100.00 Technology Company training into 84.7 million ordinary Limited shares with a par value of Baht 10 each, 38 million ordinary shares fully paid up and 46.7 million ordinary shares call-up Baht 6.6 each. True International Telecommunication THB 22 million divided into 22.00 99.43 Communication Company services 850,000 ordinary shares with a Limited par value of Baht 100 each, 10,000 ordinary shares fully paid up and 840,000 ordinary shares call-up Baht 25 each. True International Gateway Telecommunication THB 436 million divided into 436.00 100.00 Company Limited and internet service 4.36 million ordinary shares with a par value of Baht 100 each and fully paid up. True Internet Company Internet solution THB 752.80 million divided 752.80 100.00 Limited provider into 75.28 million ordinary shares with a par value of Baht 10 each, and fully paid True Life Plus Company Telecommunication THB 1,775 million divided 1,775.00 100.00 Limited services reseller into 257.5 million ordinary shares with a par value of Baht 10 each, 97.5 million ordinary shares fully paid up and 160 million ordinary shares call-up Baht 5 each True Move Company Cellular operator THB 65,181.30 million divided 67,080.18 99.43 Limited into 6,518.13 million ordinary shares with a par value of Baht 10 each and fully paid up.
48 True Corporation Public Company Limited
Company Name Type of Business Paid-up Capital Amount % of investment investment (Million Baht) True Multimedia Company NON-POTS and THB 6,562 million divided into 6,562.00 91.08 Limited multimedia services 656.2 million ordinary shares with a par value of Baht 10 each and fully paid up. True Music Company Content provider THB 200,000 divided into 0.20 99.40 Limited 20,000 ordinary shares with a par value of Baht 10 each and fully paid up. True Music Radio Company Trading and THB 1 million divided into 1.00 69.94 Limited production of 10,000 ordinary shares with a advertising media par value of Baht 100 each and fully paid up. True Public Communication Telecommunication THB 86 million divided into 86.00 100.00 Company Limited services 860,000 ordinary shares with a par value of Baht 100 each and fully paid up. True Touch Company Call centre services THB 193 million divided into 193.00 100.00 Limited 1.93 million ordinary shares with a par value of Baht 100 each and fully paid up. True United Football Club Football Club and THB 20 million divided into 2 14.00 70.00 Company Limited related activities million ordinary shares with a management par value of Baht 10 each and fully paid up. True Universal Convergence Telecommunication THB 7,000 million divided into 7,000.00 100.00 Company Limited services 100 million ordinary shares with a par value of Baht 100 each, 40 million ordinary shares fully paid up and 60 million ordinary shares call-up Baht 50 each. True Visions Public Pay Television THB 2,266.72 million divided 17,034.11 99.31 Company Limited into 755.57 million ordinary shares with a par value of Baht 3 each and fully paid up. True Visions Cable Public Pay television via THB 7,608.65 million divided 4,256.50 98.99 Company Limited cable system into 760.86 million ordinary shares with a par value of Baht 10 each and fully paid up.
True Visions Group Holding company THB 4,766.70 million divided 4,766.70 100.00 Company Limited into 75.17 million ordinary shares with a par value of Baht 100 each, 15.17 million ordinary shares fully paid up and 60 million ordinary shares call-up Baht 54.17 each.
49 True Corporation Public Company Limited
Company Name Type of Business Paid-up Capital Amount % of investment investment (Million Baht) True Vistas Company Production and THB 13.70 million divided 13.70 100.00 Limited distribution of movies into 1.55 million ordinary films shares with a par value of Baht 10 each, 0.35 million ordinary shares fully paid up and 1.20 million ordinary shares call-up Baht 8.50 each K.I.N. (Thailand) Company Holding Company USD 1 divided into 1 ordinary USD 0.00 100.00 Limited share with a par value of USD 1 each and fully paid up. Gold Palace Logistics Holding Company USD 8,000 divided into 8,000 USD 0.00 100.00 Limited ordinary shares with a par value of USD 1 each and fully paid up. Dragon Delight Investments Holding Company USD 4.97 divided into 4.97 USD 4.97 100.00 Limited million ordinary shares with a par value of USD 1 each and fully paid up. Gold Palace Investments Holding Company USD 13.30 million divided USD 13.30 100.00 Limited into 12.75 million ordinary shares with a par value of USD 1 each and fully paid up. Golden Light Company Holding Company USD 15.80 million divided USD 15.80 100.00 Limited into 15.80 million ordinary shares with a par value of USD 1 each and fully paid up. Goldsky Company Limited Holding Company USD 4.97 divided into 4.97 USD 4.97 100.00 million ordinary shares with a par value of USD 1 each and fully paid up. Golden Pearl Global Limited Holding Company USD 50,000 divided into USD 0.00 100.00 50,000 ordinary shares with a par value of USD 1 each and fully paid up. Rosy Legend Limited Holding Company USD 1 divided into USD 0.00 99.48 1 ordinary share with a par value of USD 1 each and fully paid up. Prospect Gain Limited Holding Company USD 1 divided into USD 0.00 100.00 1 ordinary share with a par value of USD 1 each and fully paid up. True Internet Technology Developing, designing, USD 12.80 million divided USD 12.80 100.00 (Shanghai) Company producing and sale of into 12.80 million ordinary Limited software products shares with a par value of USD 1 each and fully paid up.
50 True Corporation Public Company Limited
Company Name Type of Business Paid-up Capital Amount % of investment investment (Million Baht) GP Logistics Company Holding Company USD 1 divided into 1 ordinary USD 0.00 100.00 Limited share with a par value of USD 1 each and fully paid up. Asia Infonet Company Internet services THB 15 million divided into 15.00 65.00 Limited provider 1.5 million ordinary shares with a par value of Baht 10 each and fully paid up. BEC-TERO True Visions Sport and THB 50 million divided into 25.00 50.00 Company Limited Entertainment 0.5 million ordinary shares with a par value of Baht 100 each and fully paid up. Channel [V] Music Music and sound THB 84.70 million divided 21.87 25.82 (Thailand) Company into 1.1 million ordinary Limited shares with a par value of Baht 77 each and fully paid up.
True GS Company Limited Home shopping THB 240 million divided into 108.00 45.00 2.4 million ordinary shares with a par value of Baht 100 each and fully paid up. NEC Corporation (Thailand) Telecommunication THB 343 million divided into 33.00 9.62 Company Limited equipment 343,000 ordinary shares with a manufacturer par value of Baht 1,000 each and fully paid up. Thai Smart Card Company Central Service Bureau THB 1,600 million divided 240.74 15.76 Limited for clearing electronic into 160 million ordinary payment transactions shares with a par value of Baht 10 each and fully paid up. Clearing House for Number provide mobile THB 2 million divided into 0.40 19.94 Portability Co., Ltd. number portability 20,000 ordinary shares with a service par value of Baht 100 each and fully paid up.
51
Part III
Financial Information
True Corporation Public Company Limited
Part III: Financial Information
Comparative Financial Information for the Past 3 Years
1. Financial Statements of the Company
True Corporation Public Company Limited Statement of Financial Position - Company As at 31 March 2014, 31 December 2013, 2012 and 2011 (Unit: Thousand Baht) (Restated) (Restated) 31 March Common 31 December Common 31 December Common 31 December Common 2014 Size (%) 2013 Size (%) 2012 Size (%) 2011 Size (%) Assets Current assets Cash and cash equivalents 2,430,969 2.27 1,561,204 1.50 52,629 0.08 350,089 0.60 Restricted cash 2,289,484 2.14 2,344,577 2.25 187,264 0.30 187,389 0.32 Short-term investments - - - - 347,764 0.56 334,000 0.57 Trade and other receivables 6,330,759 5.88 5,238,054 5.00 5,203,136 8.37 4,376,182 7.45 Short-term loans to related parties 500,000 0.47 1,500,000 1.44 3,300,000 5.31 - - Inventories, net 62,522 0.06 40,714 0.04 30,317 0.05 32,914 0.06 Income tax deducted at source 672,119 0.63 625,730 0.60 569,132 0.92 639,624 1.09 Claimable value added tax 69,731 0.07 - - 400 - - - Other current assets 48,787 0.05 78,867 0.08 28,530 0.05 29,551 0.05 Total current assets 12,404,371 11.57 11,389,146 10.91 9,719,172 15.64 5,949,749 10.14 Non-current assets Short-term loans from related parties - - - - 2,261,196 3.64 - - Investments in subsidiaries, net 66,119,529 61.62 63,509,329 60.83 37,695,548 60.67 38,167,840 64.96 Investments in associates, net 19,346,459 18.03 19,335,268 18.52 49,670 0.08 49,670 0.08 General investments, net 240,741 0.22 240,741 0.23 240,741 0.39 240,741 0.41 Property, plant and equipment, net 2,661,063 2.49 2,754,532 2.64 9,575,309 15.41 10,879,029 18.52 Intangible assets, net 5,108,100 4.76 5,457,680 5.23 206,071 0.33 313,551 0.53 Deferred income tax assets 1,204,656 1.12 1,414,805 1.36 2,053,844 3.31 2,803,251 4.77 Other non-current assets 208,561 0.19 296,671 0.28 330,319 0.53 349,325 0.59 Total non-current assets 94,889,109 88.43 93,009,026 89.09 52,412,698 84.36 52,803,407 89.86
Total assets 107,293,480 100.00 104,398,172 100.00 62,131,870 100.00 58,753,156 100.00
Liabilities and shareholders' equity Current liabilities Short-term borrowings 700,000 0.65 - - 2,048,394 3.30 - - Trade and other payables 18,693,638 17.42 19,232,694 18.42 1,780,083 2.87 2,281,819 3.88 Current portion of long-term borrowings 4,577,637 4.27 5,016,696 4.81 3,872,132 6.23 4,000,000 6.81 Short-term loans from related parties 17,335,000 16.16 19,665,000 18.84 - - - - Other current liabilities 301,808 0.28 1,444,471 1.38 461,277 0.74 347,065 0.59 Total current liabilities 41,608,083 38.78 45,358,861 43.45 8,161,886 13.14 6,628,884 11.28 Non-current liabilities Long-term borrowings 37,042,270 34.52 30,491,432 29.20 25,012,262 40.25 23,415,834 39.86 Long-term borrowings from subsidiary - - - - 2,231,376 3.59 3,249,645 5.53 Long-term trade accounts payable - - - - 14,040 0.02 36,320 0.06 Employee benefits obligations 346,526 0.32 336,954 0.32 235,557 0.38 264,927 0.45 Other non-current liabilities 61,651 0.06 174,730 0.17 297,256 0.48 297,256 0.52 Total non-current liabilities 37,450,447 34.90 31,003,116 29.69 27,790,491 44.72 27,263,982 46.42
Total liabilities 79,058,530 73.68 76,361,977 73.14 35,952,377 57.86 33,892,866 57.70 Shareholders' equity Share capital Authorised share capital Common shares 153,332,070 153,332,070 153,332,070 153,332,070 Issued and fully paid-up share capital Common shares 145,302,153 135.44 145,302,153 139.21 145,031,792 233.45 145,031,792 246.79 Premium on share capital - Common shares 11,432,046 10.66 11,432,046 10.95 11,432,046 18.40 11,432,046 19.45 Discount on share capital - Common shares (86,070,641) (80.23) (86,070,641) (82.46) (85,987,466) (138.41) (85,987,466) (146.32) Retained earnings (deficit) Appropriated-legal reserve 34,881 0.03 34,881 0.03 34,881 0.06 34,881 0.06 Deficits (42,463,489) (39.58) (42,662,244) (40.87) (44,331,760) (71.36) (45,650,963) (77.68) Total shareholders’ equity 28,234,950 26.32 28,036,195 26.86 26,179,493 42.14 24,860,290 42.30
Total liabilities and shareholders' equity 107,293,480 100.00 104,398,172 100.00 62,131,870 100.00 58,753,156 100.00
52 True Corporation Public Company Limited
True Corporation Public Company Limited Statement of Comprehensive Income - Company For the three-month periods ended 31 March 2014 and 31 March 2013, the year ended 31 December 2013, 2012 and 2011 (Unit: Thousand Baht)
31 March Common 31 March Common 31 December Common 31 December Common 31 December Common 2014 Size (%) 2013 Size (%) 2013 Size (%) 2012 Size (%) 2011 Size (%) Revenues Revenues from telephone and other services 2,827,455 100.00 2,833,902 100.00 11,704,597 100.00 11,390,955 99.75 11,713,987 99.62 Revenues from product sales - - - - 29 - 28,688 0.25 44,962 0.38 Total revenues 2,827,455 100.00 2,833,902 100.00 11,704,626 100.00 11,419,643 100.00 11,758,949 100.00
Costs Cost of providing services 1,269,067 44.88 1,212,591 42.79 5,053,323 43.17 5,101,924 44.68 5,636,406 47.93 Cost of sales ------27,673 0.24 41,752 0.36 Total costs 1,269,067 44.88 1,212,591 42.79 5,053,323 43.17 5,129,597 44.92 5,678,158 48.29
Gross profit 1,558,388 55.12 1,621,311 57.21 6,651,303 56.83 6,290,046 55.08 6,080,791 51.71 Other income 438,260 15.50 161,888 5.71 655,111 5.60 334,377 2.93 707,055 6.01 Selling expenses (72,417) (2.56) (75,520) (2.66) (399,428) (3.41) (343,418) (3.01) (415,697) (3.54) Administrative expenses (739,264) (26.15) (710,244) (25.06) (2,425,328) (20.72) (2,621,420) (22.96) (3,024,841) (25.72) Other expenses (2,158) (0.08) (2,347) (0.08) (668,069) (5.71) (410,256) (3.59) (3,291,120) (27.99) Finance costs, net (773,906) (27.37) 25,044 0.88 (1,423,354) (12.16) (1,180,720) (10.34) (2,390,130) (20.33) Profit (loss) before income tax 408,903 14.46 1,020,132 36.00 2,390,235 20.43 2,068,609 18.11 (2,333,942) (19.86) Income tax (210,149) (7.43) (124,864) (4.41) (639,039) (5.46) (749,406) (6.56) (1,805,102) (15.35) Profit (loss) for the period 198,754 7.03 895,268 31.59 1,751,196 14.97 1,319,203 11.55 (4,139,044) (35.21)
Other comprehensive income (expense): Actuarial loss - - - - (81,679) (0.70) - - (19,390) (0.16) Total comprehensive income (expense) for the period 198,754 7.03 895,268 31.59 1,669,517 14.27 1,319,203 11.55 (4,158,434) (35.37)
Basic and diluted earnings (loss) per share Basic and diluted 0.01 0.06 0.12 0.09 (0.36)
53 True Corporation Public Company Limited
True Corporation Public Company Limited Statement of Cash Flows - Company For the three-month periods ended 31 March 2014 and 31 March 2013, the year ended 31 December 2013, 2012 and 2011 (Unit: Thousand Baht) (Restated) 31 March 31 March 31 December 31 December 31 December 2014 2013 2013 2012 2011 Cash flows from operating activities Profit (loss) before income tax 408,903 1,020,132 2,390,234 2,068,610 (2,333,942) Adjustments for: Depreciation and amortisation 480,886 404,288 1,715,138 1,731,200 2,017,421 Interest income (27,702) (81,041) (313,806) (91,479) (49,368) Interest expense 734,280 447,712 1,743,033 1,718,972 1,845,276 Dividends received - (55,801) (55,801) (150,420) (585,125) (Gain) loss on disposals of property, plant and equipment 7 168 (491) (136) 3,100 Doubtful accounts (reversal) 73,526 68,412 (117,595) 268,500 306,095 Impairment charge of investment (reversal) - - 35,970 (69,442) - Impairment charge - - - - 2,307 Gain on sale investment in subsidiaries and joint venture - - 247,362 392,769 3,273,343 Gain from liquidation of associate - - (50,330) - - Retirement benefit obligations 9,574 7,148 19,717 (29,369) 68 Unrealised (gain) loss on foreign exchange 7,303 (494,052) (374,290) (617,884) 432,460 Realised (gain) loss on foreign exchange related to repayment of borrowings 16,369 - (107,703) - - Gain on settlement of DPN obligation (350,932) - (145,283) - - Changes in operating assets and liabilities - Trade and other receivables (1,186,801) 325,445 121,077 (1,081,990) (298,965) - Inventories (22,257) (9,157) (12,974) (1,389) 27,412 - Other current assets (39,674) (20,419) 255,956 334,109 334,803 - Other non-current assets 88,110 27,484 33,648 19,005 (7,543) - Trade and other payables (628,583) (211,403) 17,339,575 (638,464) 197,892 - Other current liabilities (1,142,663) (962) 983,194 114,211 18,408 - Other non-current liabilities (117,592) (37,157) (122,526) - - Cash generated from operations (1,697,246) 1,390,797 23,584,105 3,966,803 5,183,642 Add : Interest received 47,924 127,200 319,783 29,865 29,401 Less: Interest paid (639,156) (420,182) (1,569,346) (1,408,384) (1,649,921) Income tax paid (46,389) (87,913) (362,619) (263,133) (305,999) Cash flows from operating activities (2,334,867) 1,009,902 21,971,923 2,325,151 3,257,123
Cash flows from investing activities Withdrawal (deposit) in restricted cash 55,093 88,978 (2,157,313) 125 332,659 Withdrawal (deposit) in short-term investments - 347,763 347,764 (13,764) 19,556 Loans made to subsidiaries and joint venture - (1,285,000) (8,145,000) (6,910,000) - Investments in subsidiaries and associates (2,621,391) - (47,235,268) (167,366) (25,489,974) Proceeds from sale of investment in subsidiaries - - 1,802,887 166,731 10,904,162 Acquisition of property, plant and equipment (6,797) (9,641) (69,258) (190,995) (317,104) Acquisition of intangible assets (14,889) (1,082) (3,228) (6,895) (14,551) Proceeds from loan to subsidiaries 1,000,000 4,660,000 12,160,000 1,395,000 - Proceeds from decrease in share capital of subsidiary and associate - - - 149,600 - Proceeds from liquidated of associate - - 100,000 - - Proceeds from disposals of property, plant and equipment and intangible assets 68 97 1,513 2,483 4,159 Dividends received - 55,801 55,801 150,420 585,125 Net cash used in investing activities (1,587,916) 3,856,916 (43,142,102) (5,424,661) (13,975,968)
Cash flows from financing activities Issues of common shares - 13,811.00 187,186 - 13,114,802 Proceeds from loan from subsidiary 1,000,000 100,000 21,055,000 810,000 - Proceeds from short-term borrowings 2,894,383 851,607 20,157,617 5,456,016 1,277,803 Proceeds from borrowings, net of cash paid for debt issuance cost 7,964,472 - 24,871,866 5,962,151 1,793,813 Repayments to loans from subsidiary (3,330,000) (100,000) (3,689,126) (2,010,000) - Repayments to short-term borrowings (2,194,383) (2,900,000) (22,206,010) (3,409,870) (1,477,803) Repayments to borrowings (1,541,924) (2,778,000) (17,697,779) (4,006,247) (3,891,336) Net cash received from (used in) financing activities 4,792,548 (4,812,582) 22,678,754 2,802,050 10,817,279 Net (decrease) increase in cash and cash equivalents 869,765 54,236 1,508,575 (297,460) 98,434 Opening balance 1,561,204 52,629 52,629 350,089 251,655
Closing balance 2,430,969 106,865 1,561,204 52,629 350,089
54 True Corporation Public Company Limited
2. Consolidated Financial Statements
True Corporation Public Company Limited Consolidated Statement of Financial Position As at 31 March 2014, 31 December 2013, 2012 and 2011 (Unit: Thousand Baht) (Restated) (Restated) 31 March Common 31 December Common 31 December Common 31 December Common 2014 Size (%) 2013 Size (%) 2012 Size (%) 2011 Size (%) Assets Current assets Cash and cash equivalents 9,105,647 4.20 14,726,283 7.16 6,103,167 3.38 11,447,692 7.62 Restricted cash 2,297,886 1.06 2,346,446 1.14 964,823 0.54 997,852 0.66 Short-term investments 1,033 0.00 101,832 0.05 374,406 0.21 400,727 0.27 Trade and other receivables 44,300,530 20.45 38,537,982 18.72 21,424,871 11.88 12,899,586 8.59 Short-term loans to related parties 147,000 0.07 147,000 0.07 14,251 0.01 8,700 0.01 Inventories, net 4,433,205 2.05 5,049,989 2.46 2,761,928 1.53 1,596,738 1.06 Income tax deducted at source 3,110,929 1.44 2,952,598 1.43 3,018,739 1.67 2,630,683 1.75 Claimable value added tax 3,515,478 1.62 3,207,269 1.56 2,048,861 1.14 1,030,217 0.69 Other current assets 4,357,431 2.01 2,989,197 1.45 3,321,860 1.84 2,920,369 1.94 Total current assets 71,269,139 32.90 70,058,596 34.04 40,032,906 22.20 33,932,564 22.59 Non-current assets Restricted cash 125,285 0.06 100,043 0.05 122,231 0.07 126,198 0.08 Investments in associates, net 21,464,363 9.90 16,138,797 7.84 275,708 0.15 215,221 0.14 General investments, net 320,345 0.15 313,798 0.15 293,323 0.16 293,323 0.20 Investment property, net 5,528 0.00 5,528 0.00 54,763 0.03 55,486 0.04 Property, plant and equipment, net 69,506,235 32.08 67,867,052 32.97 86,679,838 48.06 73,938,685 49.26 Goodwill, net 11,403,094 5.26 11,403,094 5.54 11,403,094 6.32 11,403,094 7.60 Intangible assets, net 37,113,956 17.12 34,194,629 16.61 35,401,781 19.63 23,096,001 15.39 Deferred income tax assets 4,622,985 2.13 4,757,812 2.31 5,181,781 2.87 6,081,500 4.05 Other non-current assets 871,699 0.40 1,012,819 0.49 917,945 0.51 973,552 0.65 Total non-current assets 145,433,490 67.10 135,793,572 65.96 140,330,464 77.80 116,183,060 77.41
Total assets 216,702,629 100.00 205,852,168 100.00 180,363,370 100.00 150,115,624 100.00
Liabilities and shareholders' equity Current liabilities Short-term borrowings 2,328,208 1.07 3,742,847 1.82 5,096,095 2.83 365,952 0.24 Trade and other payables 90,987,955 41.98 88,392,478 42.93 44,721,775 24.80 30,217,408 20.14 Current portion of long-term borrowings 10,720,334 4.95 9,894,129 4.81 9,521,909 5.28 6,896,129 4.60 Income tax payable 859,610 0.40 878,854 0.43 348,115 0.19 379,434 0.25 Other current liabilities 3,175,463 1.47 4,439,348 2.16 3,299,293 1.83 2,902,171 1.93 Total current liabilities 108,071,570 49.87 107,347,656 52.15 62,987,187 34.93 40,761,094 27.16 Non-current liabilities Long-term borrowings 81,737,964 37.72 76,260,992 37.04 86,804,608 48.13 77,976,290 51.94 Long-term trade accounts payable - - - - 14,040 0.01 36,320 0.02 Deferred income tax liabilities 3,663,011 1.69 4,095,175 1.99 3,579,374 1.98 3,279,930 2.19 Liabilities under agreements for operation 123,743 0.06 120,139 0.06 3,079,521 1.71 3,640,166 2.43 Employee benefits obligations 1,161,906 0.54 1,137,085 0.55 914,055 0.51 865,701 0.58 Other non-current liabilities 13,376,842 6.17 12,158,983 5.91 8,980,207 4.98 2,086,780 1.39 Total non-current liabilities 100,063,466 46.18 93,772,374 45.55 103,371,805 57.32 87,885,187 58.55
Total liabilities 208,135,036 96.05 201,120,030 97.70 166,358,992 92.25 128,646,281 85.71
Shareholders' equity Share capital Authorised share capital Common shares 153,332,070 153,332,070 153,332,070 153,332,070 Issued and fully paid-up share capital Common shares 145,302,153 66.98 145,302,153 70.61 145,031,792 80.27 145,031,792 96.57 Premium on share capital - Common shares 11,432,046 5.27 11,432,046 5.56 11,432,046 6.33 11,432,046 7.61 Discount on share capital - Common shares (86,070,641) (39.68) (86,070,641) (41.83) (85,987,466) (47.59) (85,987,466) (57.25) Retained earnings (deficit) Appropriated-legal reserve 34,881 0.02 34,881 0.02 34,881 0.02 34,881 0.02 Deficits (60,994,981) (28.12) (64,850,076) (31.52) (55,634,566) (30.79) (48,206,801) (32.10) Other components of equity (1,767,335) (0.81) (1,767,250) (0.86) (1,529,867) (0.85) (1,527,107) (1.02) Equity attributable to owners of the parent 7,936,123 3.66 4,081,113 1.98 13,346,820 7.39 20,777,345 13.83 Non-controlling interests 631,470 0.29 651,025 0.32 657,558 0.36 691,998 0.46 Total shareholders’ equity 8,567,593 3.95 4,732,138 2.30 14,004,378 7.75 21,469,343 14.29
Total liabilities and shareholders' equity 216,702,629 100.00 205,852,168 100.00 180,363,370 100.00 150,115,624 100.00
55 True Corporation Public Company Limited
True Corporation Public Company Limited Consolidated Statement of Comprehensive Income For the three-month periods ended 31 March 2014 and 31 March 2013, the year ended 31 December 2013, 2012 and 2011 (Unit: Thousand Baht)
31 March Common 31 March Common 31 December Common 31 December Common 31 December Common 2014 Size (%) 2013 Size (%) 2013 Size (%) 2012 Size (%) 2011 Size (%) Revenues Revenues from telephone and other services 21,018,637 83.80 19,401,956 81.31 79,136,772 82.25 74,298,460 83.12 65,132,462 90.54 Revenues from product sales 4,064,663 16.20 4,459,974 18.69 17,076,923 17.75 15,083,454 16.88 6,805,156 9.46 Total revenues 25,083,300 100.00 23,861,930 100.00 96,213,695 100.00 89,381,914 100.00 71,937,618 100.00
Costs Cost of providing services 15,674,858 62.49 14,359,810 60.18 61,633,821 64.06 54,892,586 61.41 46,045,350 64.01 Cost of sales 3,917,275 15.62 4,175,238 17.50 15,735,809 16.36 13,779,018 15.42 5,881,483 8.18 Total costs 19,592,133 78.11 18,535,048 77.68 77,369,630 80.42 68,671,604 76.83 51,926,833 72.19
Gross profit 5,491,167 21.89 5,326,882 22.32 18,844,065 19.58 20,710,310 23.17 20,010,785 27.81 Other income 967,979 3.86 311,062 1.30 8,662,466 9.00 847,836 0.95 12,838,087 17.85 Selling expenses (2,155,317) (8.59) (1,954,616) (8.19) (11,420,067) (11.87) (8,475,378) (9.48) (6,247,834) (8.69) Administrative expenses (2,740,663) (10.93) (2,821,014) (11.82) (11,217,976) (11.66) (10,634,727) (11.90) (9,689,443) (13.47) Other expenses (1,674,186) (6.67) (16,007) (0.07) (2,773,954) (2.88) (2,183,994) (2.44) (1,283,684) (1.78) Share of results in associates 5,314,375 21.19 (8,931) (0.04) 62,298 0.06 41,417 0.05 46,922 0.07 Finance costs, net (1,603,866) (6.39) (1,434,574) (6.01) (8,401,652) (8.73) (6,154,422) (6.89) (14,971,146) (20.81) Profit (loss) before income tax 3,599,489 14.36 (597,198) (2.51) (6,244,820) (6.50) (5,848,958) (6.54) 703,687 0.98 Income tax (expenses) revenue 235,350 0.94 (511,973) (2.15) (2,896,121) (3.01) (1,598,739) (1.79) (3,439,601) (4.78) Profit (loss) for the period 3,834,839 15.30 (1,109,171) (4.66) (9,140,941) (9.51) (7,447,697) (8.33) (2,735,914) (3.80)
Other comprehensive income (expense): Exchange differences on translation (86) 0.00 (453) 0.00 (101,858) (0.11) (2,760) 0.00 11,561 0.02 Dilution due to increase in non-controlling interests - - - - (135,525) (0.14) - - - - Actuarial gain (loss) 564 0.00 - - (152,764) (0.16) - - (31,567) (0.04) Total comprehensive income (expense) for the period 3,835,317 15.30 (1,109,624) (4.66) (9,531,088) (9.92) (7,450,457) (8.33) (2,755,920) (3.82)
Profit (loss) for the year attributable to: Owners of the parent 3,854,532 100.51 (1,109,134) 100.00 (9,062,747) 99.14 (7,427,765) 99.73 (2,693,688) 98.46 Non-controlling interests (19,693) (0.51) (37) 0.00 (78,194) 0.86 (19,932) 0.27 (42,226) 1.54 Profit (loss) for the period 3,834,839 100.00 (1,109,171) 100.00 (9,140,941) 100.00 (7,447,697) 100.00 (2,735,914) 100.00
Total comprehensive income (expense) for the period attributable to: Owners of the parent 3,855,010 100.51 (1,109,587) 100.00 (9,452,894) 99.18 (7,430,525) 99.73 (2,713,633) 98.47 Non-controlling interests (19,693) (0.51) (37) 0.00 (78,194) 0.82 (19,932) 0.27 (42,287) 1.53 Total comprehensive income (expense) for the period 3,835,317 100.00 (1,109,624) 100.00 (9,531,088) 100.00 (7,450,457) 100.00 (2,755,920) 100.00
Basic and diluted earnings (loss) per share attributable to owners of the parent Basic and diluted 0.27 (0.08) (0.62) (0.51) (0.23)
56 True Corporation Public Company Limited
True Corporation Public Company Limited Consolidated Statement of Cash Flows For the three-month periods ended 31 March 2014 and 31 March 2013, the year ended 31 December 2013, 2012 and 2011 (Unit: Thousand Baht) (Restated) 31 March 31 March 31 December 31 December 31 December 2014 2013 2013 2012 2011 Cash flows from operating activities Profit (loss) before income tax 3,599,489 (597,198) (6,244,820) (5,848,958) 703,687 Adjustments for: Depreciation and amortisation 6,280,300 4,751,665 22,208,977 17,151,752 14,883,121 Interest income (39,805) (29,879) (148,092) (259,566) (335,742) Interest expense 1,493,192 1,839,903 7,765,546 6,551,433 9,290,503 (Gain) loss on disposals of property, plant and equipment 8,951 (12,881) 139,843 (43,026) (62,766) Doubtful accounts 87,508 404,333 1,143,824 1,415,186 1,124,722 Impairment charge of investment - - 8,719 - - Gain from disposal of infrastructure assets - - (6,334,904) - - Impairment charge - 88 2,056,089 2,123,848 73,168 Gain on reversal of right and liabilities under agreement for operation - - (791,180) - - Impairment charge of investment property - - - 724 - Impairment charge of goodwill - - - - 1,024,915 Other operating assets and liabilities written-off - 18 110 17,093 3,866 Gain on sale investment in subsidiaries and joint venture - - (857,569) - (146,135) Loss from liquidation of associate - - 23,035 - - Gain from dissolution of investment in subsidiary - - (104,480) - - Reversal of provision for CAT's call option (294,530) - - - - Retirement benefit obligations 24,821 30,384 136,731 48,354 74,471 Gain from bargain purchase - - - - (12,077,098) Unrealised (gain) loss on foreign exchange (222,747) (789,182) 439,978 (864,711) 737,425 Realised (gain) loss on foreign exchange related to repayment of borrowings 16,369 - (130,304) - 3,416,411 Gain on settlement of DPN obligation (350,932) - (145,283) - - Gain on termination of finance lease agreement - - (54,910) - - Share of results in associates (5,314,375) 8,931 (62,298) (41,417) (46,922) Changes in operating assets and liabilities - Trade and other receivables (5,904,762) (1,152,901) (12,940,392) (10,331,060) (4,581,556) - Short-term investment - trading securities 100,318 15,107 (85,214) 50,908 20,399 - Inventories 615,995 (10,224) (3,053,217) (1,252,658) (1,926,517) - Other current assets (1,121,242) (582,691) (278,922) (734,543) 406,199 - Films and program rights (1,030,275) (416,896) (1,441,795) (1,935,571) (1,819,550) - Cars for lease - 37,928 113,317 197,531 202,219 - Other non-current assets 141,120 (65,198) (257,998) 55,607 24,869 - Trade and other payables 2,202,587 79,637 29,584,190 7,573,846 6,178,940 - Other current liabilities (1,668,021) (367,246) 1,539,787 397,122 (105,046) - Other non-current liabilities (87,241) (42,941) (200,721) 145,000 (122,170) Cash generated from operations (1,463,280) 3,100,757 32,028,047 14,416,170 16,941,413 Add : Interest received 6,997 11,128 140,727 313,430 333,162 Less: Interest paid (1,421,424) (1,712,911) (7,201,782) (5,786,497) (8,829,835) Income tax paid (330,419) (383,121) (2,289,021) (1,631,246) (1,687,448) Cash flows from operating activities (3,208,126) 1,015,853 22,677,971 7,311,857 6,757,292
Cash flows from investing activities Withdrawal (deposit) in restricted cash 23,319 453,212 (1,984,739) 36,996 184,682 Withdrawal (deposit) in short-term investments 480 347,141 346,537 (24,587) 5,105 Loans made to subsidiaries and joint venture - (390) (3,750) (6,320) - Acquisition of subsidiaries, net of cash acquired - - - - (6,015,869) Proceeds from sale of investment in associate - - - - 146,135 Investments in subsidiaries, associates and other companies (17,738) - (19,355,743) (27,000) (81,000) Proceeds from sale of investment in subsidiaries, net of cash and cash equivalent - - 3,203,157 - - Acquisition of property, plant and equipment (6,085,263) (4,149,698) (24,806,601) (19,313,715) (12,495,892) Acquisition of intangible assets (953,975) (232,965) (816,881) (7,812,497) (652,239) Proceeds from loans to joint venture - - - 770 - Acquisition investment property - - - - (2,130) Proceeds from liquidated of associate - - 100,000 - - Proceeds from decrease in share capital of associate - - - 6,578 - Proceeds from disposals of property, plant and equipment and intangible assets 11,283 45,991 40,432,859 178,686 274,343 Dividends received - 55,801 55,801 1,352 2,730 Net cash used in investing activities (7,021,894) (3,480,908) (2,829,360) (26,959,737) (18,634,135)
Cash flows from financing activities Issues of common shares - 13,811.00 187,186 - 13,114,802 Addition subscribe in subsidiary by non-controlling interest 138 - - - 9,847 Dividend paid to non-controlling interest - - (2,591) (14,509) (12,954) Addition investment in subsidiary by purchasing shares from non-controlling interest - - - - (114,822) Proceeds from short-term borrowings 3,333,272 8,358,985 30,182,538 9,120,978 7,885,337 Proceeds from borrowings, net of cash paid for debt issuance cost 8,574,472 2,118,618 32,550,467 17,482,493 40,750,941 Repayments to short-term borrowings (4,747,912) (4,250,757) (31,535,786) (4,393,083) (8,115,856) Repayments to borrowings (2,548,908) (5,245,793) (42,611,917) (7,888,830) (34,745,495) Net cash received from (used in) financing activities 4,611,062 994,864 (11,230,103) 14,307,049 18,771,800 Net (decrease) increase in cash and cash equivalents (5,618,958) (1,470,191) 8,618,508 (5,340,831) 6,894,957 Opening balance 14,726,283 6,103,167 6,103,167 11,447,692 4,540,535 Effects of exchange rate changes (1,678) 1,078 4,608 (3,694) 12,200 Closing balance 9,105,647 4,634,054 14,726,283 6,103,167 11,447,692
57