Message from the Board of Directors During the past 2 years considered as a significant context for the Company to transform. Technology disruption has changed lifestyle and consumer behavior to consume more online media of which impact on decision making to buy anything and rapid growth in social media distribution channels. The Company ceased to operate its house brand handset business and left only retail business of other brands in 2017, and finally closed down its handset business in 2018 and then shift to complete digital services. The digital services include Digital Trunked Radio System (“DTRS”) of which the target clients are state-owned enterprises and government agencies, and Co-Tower rentals for Mobile Operators in the Nationwide National Parks. These 2 projects are in collaboration with CAT Telecom Public Company Limited (“CAT”). In 2018, the Company installed the network equipment as planned. The Company still focus on doing business with recurring income. The digital content business has transformed its services to a digital platform provider that offers eat, drink and travel content, comprehensive travel planner services and sports business aiming towards complete digital sports business that serves the digital trend and the upcoming age of sports and healthy lifestyle. This is to enhance the livelihood by providing quality products and services derived from technology advancement and excellent innovations of the digital age. To support business changes and new business operations, the 2018 Annual General Meeting of Shareholders approved the increase in its registered share capital to be offered to the existing shareholders of the Company in proportion to their respective shareholdings (Rights Offering) and to accommodate the exercise of the warrants. The Company received money from the capital increase totaling Baht 2,077 million, therefore, the Company’s issued and paid-up capital increased from Baht 440 million to Baht 1,132 million with shares premium of Baht 1,385 million. The 1,731,043,303 units of warrants (SDC-W1) were issued in this regard with 5 years from the issued date. The Board of Directors and management are confident that this business transformation will bring better operating results in the future. Although this transformation will take some time, the management will closely monitor business performance and develop products and services to meet the needs of consumers. On behalf of Samart Digital Public Company Limited, the Board of Directors would like to express our sincere gratitude to all shareholders, customers, business partners, executives, employees and all stakeholders for their support and trust. This is the driving force behind the Company’s business. (Mr. Piyapan Champasut) (Mr. Watchai Vilailuck) Chairman of the Board of Directors Executive Chairman Samart Digital Public Company Limited Samart Digital Public Company Limited SDC eng เมื่อ 13/3/62 SDC eng เมื่อ 13/3/62 Vision Sustainable growth through Integrated Broadband Communication to ease everyday life Mission • Focusing on great customer experience on products through all touch points including software solutions and service to create beyond customer expectation • Creating innovative content and application platform through various digital mediums in order to serve customer needs where as seeking for developing mutual sustainable growth with potential partners Corporate Culture • Think Ahead • Customer Focus • Team of Professionals • Commit to excellence Business Direction Focusing on updated digital business development to harmonize consumer rapid trend with new distribution channel and new content media channel continuously 00 I Annual Report 2018 Message from the Board of Directors .......................................................................... 001 Contents Board of Directors ....................................................................................................... 002 Vision, Mission, Corporate Culture and Business Direction ......................................... 004 Report of the Executive Committee ............................................................................. 006 Report of the Audit Committee .................................................................................... 007 Report of the Corporate Governance Committee ........................................................ 009 Report of the Sustainable Development Committee .................................................... 010 Report of the Risk Management Committee ............................................................... 011 Report of the Nominating and Compensation Committee ........................................... 012 Corporate Social Responsibility .................................................................................. 013 Financial Highlights ..................................................................................................... 024 Policy and Overview of Business ................................................................................ 025 Nature of Business ...................................................................................................... 031 Business Structure ...................................................................................................... 032 Revenue Structure ...................................................................................................... 033 Information of Subsidiary Companies .......................................................................... 034 Changes during the Year ............................................................................................ 036 Industry and Competition ............................................................................................ 037 Risk Factors ................................................................................................................ 039 Shareholders .............................................................................................................. 041 Dividend Payment Policy ............................................................................................. 042 Management Structure ............................................................................................... 043 Corporate Governance ............................................................................................... 057 Internal Control and Risk Management ....................................................................... 092 Anti-Corruption ........................................................................................................... 096 Connected Transactions ............................................................................................. 099 Management Discussion and Analysis ........................................................................ 104 Report of the Board of Directors’ Responsibilities for the Financial Reports ................. 109 Independent Auditor’s Report ..................................................................................... 110 Financial Statements ................................................................................................... 115 Audit Fee ..................................................................................................................... 181 Directors, Management, Company Secretary and Head of Internal Audit .................... 182 General and Other Information .................................................................................... 192 Annual Report 2018 I 00 SDC eng เมื่อ 13/3/62 SDC eng เมื่อ 13/3/62 Report of the Executive Committee Dear Shareholders The Company strongly believes in the importance of managing the business operations according to the Company’s business policies and plans, including any initiatives mandated by the resolutions of the Board of Directors and Shareholders meetings. All such implementations needed to be done have to be executed in strict adherence to the Company’s Corporate Governance Policy and Business Ethics. Consequently, the Board of Directors appointed the Executive Committee to analyze and appraise numerous important issues prior to further consideration by the Board of Directors. Moreover, as a written guideline, the charter of the Executive Committee has been provided in order to clearly specify composition, qualification, term of post, roles and responsibilities of the Executive Board as well as details of meeting arrangement and report to the Board of Directors of the Company. In 2018, the Executive Committee conducted 12 meetings to consider numerous matters concerning the Company. Results from the meeting, including the comments and recommendations, have been reported to the Board of Directors for consideration. The significant matters considered during the year were summarized below: • Establish strategy and plan of the Company and its subsidiaries including problem resolution guidelines for each line of business operations on a quarterly basis. Every year, the Company arranges at least 2 management meetings where the participants are the manager level onwards to convey its operation plans and strategies to the management and the employees for their acknowledgement and compliance. • Review and monitor business operations of the Company and its subsidiaries and provided advices for any problems may have to achieve business target. • Analyze and assess annual salary increment and bonus. The salary increase and bonus allocation are in line with the