BTS GROUP HOLDINGS PUBLIC COMPANY LIMITED ANNUAL REPORT 2019/20 In this challenging time, we commend our brave heroes for their sacrifices in helping fight the COVID-19 pandemic and we extend our support and encouragement to everyone IN THIS CHALLENGING TIME, WE COMMEND OUR BRAVE HEROES FOR THEIR SACRIFICES IN HELPING FIGHT THE COVID-19 PANDEMIC AND WE EXTEND OUR SUPPORT AND ENCOURAGEMENT TO EVERYONE FOR OUR medical staff FOR OUR We show our appreciation by donating THB 100mn to provide life insurance for more Passengers than one million doctors, nurses, health care workers We are committed to the health and safety of our passengers and village health volunteers nationwide as well by increasing the frequency of cleaning on the trains and as monetary support for innovative medical tools in the stations as well as providing alcohol cleansing gel and necessary to combat the virus. facemask at the information counter. Also, we encourage all passengers to follow social distancing practices and to wear a mask while riding on the BTS SkyTrain. FOR OUR FOR OUR social and Shareholders communities We extended our support and care to all shareholders during We gave back to those in needs in our communities the current COVID-19 outbreak through the Board during this challenging times through the donation of Directors’ resolution to approve the special dividend of 20,000 survival bags filled with essentials items payment of THB 0.15 per share in May 2020. in May 2020 and the giving away food in slum every day throughout the month as well as donating money to the family of a deceased health volunteer. BTS GROUP HOLDINGS PUBLIC COMPANY LIMITED ANNUAL REPORT 2019/20 Across BOUNDARIES CONTENTS Introduction 1.1 BTS Group Overview 16 1.2 Financial Highlights 18 1.3 Message From the Chairman 20 1.4 Report of the Audit Committee 22 1.5 Executive Committee Report 24 1.6 Corporate Governance Committee Report 26 1.7 Nomination And Remuneration Committee Report 28 1.8 Key Figures 30 Our Industry & Outlook 2.1 Our History 32 2.2 FY 2019/20 Significant Events 34 2.3 Business And Industry Overview: Mass Transit 37 2.4 Business And Industry Overview: Media 46 2.5 Business And Industry Overview: Property 50 2.6 Business And Industry Overview: Services 53 2.7 FY 2019/20 Business Target Assessment 55 2.8 FY 2020/21 Business Outlook 56 Company Information 3.1 Corporate Structure And Information 58 3.2 Our Board of Directors 60 3.3 Our Management 62 3.4 Organisation Chart 63 3.5 Subsidiaries and Associated Companies 64 3.6 Profile of Directors and Executives 71 Annual Business Review 4.1 Capital Markets Review 86 4.2 Risk Management Review 96 4.3 Sustainability at BTS Group 102 4.4 Management Discussion & Analysis 106 6 ANNUAL REPORT 2019/20 Across BOUNDARIES Corporate Governance 5.1 Management Structure 116 5.2 Corporate Governance 130 5.3 Nomination, Appointment and Remuneration of Directors and Executives 147 5.4 Internal Control and Risk Management 153 5.5 Related Party Transactions 157 Financial Report 6.1 Directors’ Responsibility Report 62 6.2 Independent Auditor’s Report 163 6.3 Statement of Financial Position 168 6.4 Notes to consolidated Financial Statements 186 Glossary of Terms 271 CG Index Accounting Policy 163-167 Corporate Structure and Information 58-59 Audit Committee 22-23, 120-121 Independent Auditor's Report 163-167 Audit Fee 145 Independent Director 116, 148-149 Board of Directors 60-61, 116-120 Internal Audit 155-156 Meeting Attendance 125 Internal Control and Risk Management 153-154 Profiles 71-81 Investor Relations 58, 92-93, 138-139 Responsibility Report 162 Management Discussion & Analysis 106-114 Duties and Responsibilities 118-119 Management Structure 116-129 Shareholdings 128 Minority Shareholders 132-135 Business Overview 16-17 Nature of Business 16-17, 37-54 Cash Flow Statement 18, 30, 113, 182-185 Nomination and Remuneration Committee Report 28-29 Code of Conduct 146 Related Party Transactions 157-160 Conflict of Interest Policy 144-145, 160 Revenue Structure 16-17, 37, 46, 50, 53 Company Mission, Vision, Values & Long-Term Goal 9 Risk Factors 96-101 Company Secretary 59, 63, 126-127 Risk Management Policy 153-154, 226-270 Corporate Governance Committee 22-23, 120-122 Risk Management Review 96-101 Corporate Governance Committee Report 26-27, 122-123 Shareholding Structure 89 Corporate Governance Policy 130-146 Statement of Comprehensive Income 18, 30, 172-175 Dividend 18, 34-35, 91, 258 Statement of Financial Position 18, 30, 112-113, 168-171 Employees 17, 129, 135, 200, 244-246 Sustainability at BTS Group 102-105 Executive Committee Report 24-25 BTS Group Holdings Public Company Limited 7 8 ANNUAL REPORT 2019/20 Across BOUNDARIES OUR AMBITION VISION MISSION To provide sustainable We aim to provide a sustainable and leading set of “City Solutions” that contribute to “City Solutions” to urban communities across Asia, an improved way of life supporting critical needs in our four principal business areas: Mass Transit, Media, Property and Services. VALUES DELIVERING CUSTOMER SATISFACTION SUPPORTING SUSTAINABLE GROWTH Our success is dependent on our ability to develop Our client base and shareholder value must be long-lasting customer relationships. This will be enhanced in a sustainable manner. We conduct achieved by listening, understanding and anticipating our business upholding sustainable practices our customers’ needs and delivering products or that reduce environmental impact compared to services that satisfy those needs. We are professional, competing products and services. accountable and transparent and always strive to be responsive. CREATING SHAREHOLDER VALUE DEVELOPING COMMUNITIES We strive to deliver accretion of shareholder value We are an integral part of the communities which we through earnings growth and improvement in operate in. We provide “City Solutions” that enhance operational effectiveness. Specifically, we aim to our customers’ sense of community. We contribute deliver long-term shareholder returns to our investors revenues and resources to work with local that outperform returns from investment alternatives communities supporting education and children’s with a similar risk profile. welfare and we promote the health and well-being of the Employees and their families. STRATEGY AND LONG-TERM GOALS BTS Group companies aim to be the leader in developing and operating Rail Mass Transit in Thailand, reinforce our position as the leading Out-of-Home (OOH) Media player in the country and selectively expand our network across the ASEAN region, cautiously grow our Property business and lead Bangkok cashless society via smart purse e-Payment solutions. We based our strategies on five foundations: Experiences in rail mass transit Synergy across all four businesses with rail mass transit at our core Financial strength Innovation and Stakeholder satisfaction BTS Group will grow our four businesses in line with the urbanisation of Thailand, and provide the community with a unique and comprehensive range of “City Solutions” that significantly contributes to an improved way of life. BTS Group Holdings Public Company Limited 9 MASS TRANSIT MEDIA 10 ANNUAL REPORT 2019/20 Across BOUNDARIES PROPERTY SERVICES BTS Group Holdings Public Company Limited 11 BTS Group is committed to protecting economic, environmental and social assets though sustainable business practices. The Company upholds environmental, social and governance (ESG) frameworks with integrity and has been recognised for its commitment to sustainability by numerous leading institutions around the world. We would like to thank all our stakeholders for their collaboration and continued support in all our undertakings. We are steadfast in our commitment to grow a sustainable business, BTS Group Holdings Public Company Limited as well as to connect society with social and environmental responsibilities. This will was recognised as member of generate not only long-term return on investment, but also contribute to the creation of a more sustainable society. The Dow Jones Sustainability Indices (DJSI) BTS Group Holdings Public Company Limited was recognised as member of The Dow Jones Sustainability Indices (DJSI) in 2019 in Emerging Markets in the Transportation category for the nd consecutive consecutive year. BTS Group is the only Thai rail transportation Company year ranked amongst world class DJSI Indices members. BTS Group was also honoured with “The SAM Silver Class Distinction Sustainability Award” and was included in the Sustainability Yearbook 2020 for its excellent sustainability performance. 1INTRODUCTION 1.1 BTS GROUP OVERVIEW BTS Group Holdings PCL (BTSG) is a privately-owned conglomerate that engages in four business units: Mass Transit, Media, Property and Services. Listed on the Stock Exchange of Thailand (SET), BTSG is a constituent member of the SET50 “Bluechip” Index, MSCI Asia Pacific Index, FTSE4Good, Dow Jones Sustainability Indices (DJSI) and among one of the largest companies in Thailand. Moreover, we are committed to protecting economic, environmental and social assets though sustainable business practices. The Company upholds environmental, social and governance (ESG) frameworks with integrity and has been recognised for its commitment to sustainability by numerous leading institutions around the world. 2% 1% Mass Transit BTSG focuses primarily on the Mass Transit business, which it operates via 6% 1 its majority-owned subsidiary, Bangkok Mass Transit System Public Co., Ltd. (BTSC). BTSC is the exclusive concessionaire and operator of the BTS 12% SkyTrain Core Network and the Bus Rapid Transit system. It is also the exclusive operator of certain extensions to the Core Network, the Gold Line and the future 53% operator and lead partner of the Pink and Yellow monorail lines. In April 2013, BTSC sold its rights to future net farebox revenues under its concession 26% agreement with the Bangkok Metropolitan Administration to BTS Rail Mass Transit Growth Infrastructure Fund (BTSGIF). In spite of this, it remains the exclusive concessionaire and operator of the Core Network, as well as the largest economic stakeholder in revenues of the Core Network through holding one-third of all units of BTSGIF via BTSG.