Long Live the King Organization & People Business Model Products & Services Partnership Model 4 Annual Report 2017 TRANSFORMATION TO THE DIGITAL ERA Contents 6 26 91 Vision, Mission, Value Management Team Management and and Operational Strategies Corporate Governance 28 8 Directors, Management Team 150 Financial Highlights 2017 and Company Secretary Profiles Related Transactions 11 44 157 Corporate Social Responsibility Information of Directors, Sustainability Report Executives and Controlling Authorities of Subsidiaries 159 14 and Associates Message from the Chairman of Managementûs Discussion the Board of Directors and and Analysis Chief Executive Officer 46 Securities Holdings of the Directors and Executives 167 16 for the Year 2017 Board of Directorsû Annual Audit Committee Responsibility for Report for 2017 48 Financial Reporting Major Shareholders 169 20 Report of The Independent Annual Compensation 50 Certified Public Accountants Committee Report for 2017 INTOUCH Groupûs 21 Investment Structure 174 Annual Governance and 52 Financial Statement Nomination Committee General Information Report for 2017 and Other Information 257 23 57 Dividend Policy Annual Executive Committee Milestones 258 Report for 2017 63 Glossary 24 Nature of Business 262 Board of Directors and and Income Structure Other Reference Persons Company Secretary 83 Risk Factors 263 Investor Information Thaicom Public Company Limited 5 << “To be a Thaicom aims to be a leading Asian satellite and digital platform operator, Vision leading Asian influencing and innovating communications on a global scale, providing products and satellite and services responsibly, and developing digital platform people and ethical practices to accommodate economic growth and operator” cultivate a sustainable society. • We commit to be a learning organization by nurturing employee competency and engagement. • We commit to deliver superior and innovative services to Mission enhance customers’ business capabilities and the quality of people’s lives. • We commit to enhance shareholder value with good corporate governance practices. • We commit to create shared value for stakeholders and societies through our Sustainable Development (SD) framework. Excellence in Technology Value E P Passion to Challenge I Initiative in Innovation C Commitment to Contribute perational Strategies O The company has developed business policies intended to engage all departments in the company’s core strategic direction and to maintain profitable and sustainable growth. The Company’s key operational strategies include: (1) Business strategy The Company formulates its business strategy as a framework to deliver products and services in response to customer demand, enhancing competitive advantage and sustainable growth. The company divides its business strategy into three categories as follows: 6 Annual Report 2017 TRANSFORMATION TO THE DIGITAL ERA 1. Core Services Broadcast Service: The Company values the importance of developing our broadcast service to advance the Thai broadcast industry by offering state-of-the-art solutions to support high definition and ultra-high definition broadcasting as well as value-added services to enhance the capabilities of satellite TV operators and deliver a quality viewing experience to people across Thailand. Moreover, the company plans to expand our broadcast services in emerging markets, especially in Greater Mekong Subregion and South Asia, focusing on high quality and high power Direct-to-Home (DTH) broadcasting service to serve regional demands. Broadband Service: The Company values the importance of enhancing bandwidth efficiency on both the IPSTAR platform and business partners’ platforms to increase the bandwidth utilization of THAICOM 4 (IPSTAR), especially in Thailand, India, and the Philippines. The Company is also diversifying its broadband business from wholesale into retail in potential markets where the Company has a competitive advantage, such as in Australia and New Zealand. 2. Strategy for Innovative Services The Company aims to develop new businesses that respond to current consumer behavior which demands accessibility to content and information anytime, anywhere and on any device. The company aims to create communication platforms at the consumer level (i.e. B2C) rather than focusing only on business customers (i.e. B2B). The platforms leverage satellite’s unique ability to reach users anytime and anywhere while integrating the internet and applications with value-added services to meet customers’ needs. For example, the LOOX TV Application Platform allows people to access TV content on both TV and on mobile devices, and the Mobility Platform provides connectivity at sea (maritime service) and in the air (in-flight connectivity). 3. Business Diversification The Company places importance on both vertical and horizontal business expansion on a regional scale. Vertically, the Company is to expend its services downstream in the value chain through areas such as retail broadband internet and maritime services. Horizontally, the Company will focus on satellite-related businesses, such as digital platforms for broadcast content, as well as businesses with high potential to substitute services in the value chain. The Company has established this business expansion plan in both dimensions to enhance its competitiveness and ensure sustainable growth. (2) Human resources strategy The Company is a Thai company that operates primarily in Thailand and strives to act and grow sustainably. We strongly believe that human resources are our most valuable asset and the key indicator of our competitive advantage. The role our employees play in the organization is even more important now in our drive towards sustainable growth and success. Our goal is to strengthen employee engagement, competency, and business ethics in order to leverage staff capabilities, drive business growth, and enhance competitiveness. We aim to recruit, retain, motivate, and develop the most talented people we can find. We also strive to create sustainable success and maximize individual capabilities while promoting the organization’s corporate culture and values. (3) Sustainable development strategy To achieve its “Thaicom Sustainability Goals” under the “Connectivity for Sustainability” concept, the Company has established a strategic framework to drive sustainable development across all aspects of its business, with a total of 10 strategies under 4 areas of focus as follows: 1. Connectivity 2. Responsibility Emphasizing the provision and services of satellite networks and Demonstrating responsibility for our products and services by providing everyone with continuous access to communication in providing valuable products and services and improving quality of every situation for security and harmony among stakeholders and service. The Company has efficiently supported and reduced the economic growth in both normal and emergency situations. impact on the environment and cultivate a sustainable society. 1.1 Communications Networks for Sustainable Development 2.1 Responsible Service 1.2 Emergency Communications Capabilities 2.2 Support for a Sustainable Society 2.3 Environmental Resource Management and Impact Mitigation 3. Innovation 4. Corporate Governance Formulating innovation through our products and services in order to respond to the needs of individual, household, organizational, and Managing with good governance throughout the value chain and government customers, cooperating with educational institutes, and emphasizing personnel development to encourage transparency, engaging in business process innovation and space management. integrity and fairness towards all stakeholders to drive a sustainable 3.1 Product and Service Design Innovation business. 3.2 Business Strategic Innovation 4.1 Fairness throughout the Value Chain 3.3 Business Process Innovation 4.2 Human Resources Management In addition, the Company operates on the basis of good corporate governance, maintaining and strictly adhering to a number of policies including its Anti-Corruption Policy. As a result, the Company has consistently received outstanding scores on corporate governance assessments at both the national and ASEAN levels, building trust amongst investors and all shareholders alike. Thaicom Public Company Limited 7 << Financial Highlights 2017 2016 (Restated) Operating Results Total revenue 7,228 8,981 Revenues from sale of goods and rendering of services 6,689 8,642 Gross profit 1,398 3,073 Operaing profit (loss) (3,594) 1,562 Profit (loss) attributable to owner of the Company (2,650) 1,612 Financial Position Total assets 25,939 32,840 Total liabilities 10,659 13,919 Total equities 15,280 18,921 Financial Ratios Current Ratio (Times) 3.22 2.53 Interest Bearing Debt to Equity Ratio (Times) 0.49 0.54 Gross Profit Margin 21% 36% Operating Profit Margin -50% 17% Net Profit Margin -37% 18% Return on Asset -10% 5% Return on Shareholders’ Equity -17% 9% Earning (loss) per share (Baht) (2.42) 1.47 Book Value per Share (Baht) 13.94 17.26 8 Annual Report 2017 TRANSFORMATION TO THE DIGITAL ERA Operating Results 6,689 8,642 1,398 3,073 (2,650) 1,612 Year 2017 Year 2016 Year 2017 Year 2016 Year 2017 Year 2016 Revenues from sale of goods Gross profit Profit (loss) attributable and rendering of services to owner of the Company Financial Position 2017 25,939 Total Assets 10,659 Total Liabilities 15,280 Total Equities Satellite Revenue 6,475 Million Bant of Revenue 68% from sales and services Thaicom Public Company Limited 9 <<