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Annual Report 2014Advanced Info Service Public Company Limited

DigitalLife

Leading The Way to

EmbracingDigitalLife

The

Strongly committed to creatingthe ultimate digital innovationthat suits various lifestylesand improves quality of life

01Annual Report 2014 / Advanced Info Service Public Company Limited

OverviewMessage from the Chairman and Chief Executive Officer

Operational Highlights and Financial HighlightsVision and Mission

Dividend Policy

Our BusinessBusiness Overview

Key Milestone 2014Awards and Recognition in 2014

Investment Structure of AIS and INTOUCH GroupTop Ten Shareholders

Revenue StructureIndustry and Competition in 2014 and Trend in 2015

Business Direction Over The Next 3-5 YearsProducts and Services

Risk Factors

Good Corporate GovernanceSummary Profile of The Directors and Management

Company Secretary, Head of Internal Audit and Head of ComplianceDirectors and Management’ s Shareholding in The Company and Subsidiaries

Management StructureCorporate Governance

Our Business in A Sustainable WayRelationship with Investors

Policy on Use and Disclosure of Inside InformationRisk Management, Internal Control and Internal Audit

Related TransactionsAudit Committee Report 2014

Financial ReportBoard of Directors’ Responsibility for Financial Reporting

Independent Auditor’s ReportFinancial Statements

Management Discussion and Analysis

Additional InformationGeneral Information and Other Significant Information

Content

004006008009

011012014016020021022023024027

032

042044058066067069070076083

087088089177

188

In this regards, investors may obtain further information from form 56-1 at www.sec.or.th or www.ais.co.th

02

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EDUCATION& GAME

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CreatingThe Best SolutionBuilding strong alliance and partnershipto create the innovation that best servesthe digital lifestyle and promotesustainable business growth

Providing The Best Digital ExpertiseEquipping all employees with the concept of serviceexcellence to promptly answer the customers' needsand new technological knowledge to ensure moreeffective communication with the customers

DeliveringThe Best ExperienceDelivering the best digital experiencewith technology and content thatserve each usage purpose

GUIDE& MAP

NEWS & INFO

NEWSLIVE

BusinessTechnology

Sport

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BANKING& PAYMENT

Credit CardBill Payments

Bill

Scan to Pay

> HEALTH Test

HEALTH & MEDICAL

097BPM

EDUCATION& GAME

START

CreatingThe Best SolutionBuilding strong alliance and partnership to createthe innovation that best serves the digital lifestyleand promote sustainable business growth

Providing The Best Digital ExpertiseEquipping all employees with the concept of serviceexcellence to promptly answer the customers' needsand new technological knowledge to ensure moreeffective communication with the customers

DeliveringThe Best ExperienceDelivering the best digital experiencewith technology and content thatserve each usage purpose

GUIDE& MAP

NEWS & INFO

NEWSLIVE

BusinessTechnology

Sport

MOVIE& MUSIC

00.00 04.30

GO!!!MAP

04

The telecommunications industry in Thailand is in a state of transition. As a society, we are entering the digital age where the global telecommunication industry is moving forwards rapidly. Services such as the M2M, Cloud technology and Over-the-top (OTT) are some of the many examples that telecommunication industries rely on, and despite being in their early stages, they have potential to grow and expand. In the modern age, the change in consumer behavior demands for increased internet access on smartphones to accommodate increased social media platforms. Thus, we as a company would need to instill change to allow for extra spectrum allocation, for further development of existing telecommunication networks and technologies, as well as cooperating for maximum efficiency in supporting the rise in the demand for increased mobile data services.

With long-term experience in the market, AIS possesses great competitive strength over other companies within the same industry, therefore enabling it to focus on investing in network expansion and technological development. The AIS board of directors and our management team are confident in bringing about the company’s growth through increased efficiency in finance and business management, whilst maintaining transparency by acting in accordance with the principles of good corporate governance. To our shareholders, our company aims to create a valued business that is stable in the long term, and thus it shall maintain its policy in paying dividends on 100% net profit.

In addition to the above business goals, we also place an emphasis on the inclusion of the community that we provide for as well as our stakeholders. We offer a variety of channels through which comments and suggestions can be received from customers, partners, employees, shareholders, investors and local communities, where we consider all feedback equally and endeavor to accommodate all stakeholder requests. All feedback will be taken into consideration by our management team, the relevant sub-committee members and the board of directors, for the maximal benefit of our stakeholders while also minimising any adverse social and environmental impact as outlined in our Sustainability Report (2014). As the Chairman, I strongly believe that AIS will continue to grow in this age of rapid change. The company shall play a major role in leading Thailand’s telecommunication industry forwards, in accordance with international standards for the people of Thailand’s better future.

Message from Chairman of The Board of Directors

Mr. Vithit Leenutaphong Chairman of The Board of Directors


On July 1st, 2014, I have been appointed as a new CEO to continue the legacy of AIS, which have long been nurtured by Mr. Wichian Mektrakarn, and the many former leaders before him. I am a strong believer of sustainability, and my chief policy to achieve sustainable growth for AIS is to transform the Company from a traditional Telecom Service Provider to be a Digital Life Service Provider. As challenging as it is being aspired to be transformed to, there are three main areas in needs of continuous development which are: firstly, the 3G Network and the 4G Technology awaiting for upcoming Auction, secondly, Fixed Broadband Business, which aimed to be fully ready for commercial launch in the beginning of 2015; and thirdly, Digital Content in which we strongly aim to make it happen through constructive collaboration with our Partners in order to rightly respond to customers’ needs. And in order to achieve this aspiration to become Digital Life Service Provider, I have put down three directives: the first is customer intimacy- accurately understand and care our customers, the second is putting emphasis and focus into the development of human force within the Company, and the last one is to fully treasure all our Strategic Partners relevant to AIS. Within only one and a half year since the very first date 3G-2.1GHz service has been launched, I am very proud particularly to the fact that AIS was able to deliver a quality 3G-2.1GHz service with nationwide network coverage in 2014. And we will continue to develop our network, especially in areas with high mobile usage, as well as to ensure our customers with the best experiences in every service available to date; and in order to fulfill continuation of this, in this 2015 year, AIS also have already prepared an investment budget of Bt. 40 Bn with our strong 3G-2.1GHz network, AIS managed to regain market share in 2014, along with the growth in mobile data service of 57%. This serves as indicative sign of a continuously rising demand for data service in the market. Hence, we expect to generate an increase of revenue from data service by 3-4% in 2015. We are determined to deliver quality services and best service support to our customers in today’s era of Digital Life. The core to our service provisioning, again, is to rightly understand our customers’ demands, and develop services that serve them relevant to their needs. Lastly, as being a part of our gracious Thai society, I do believe that one integral trigger to the full development of the Thai telecom industry depends firmly on the auction of spectrum licenses in 2015. Not only will it be another crucial forwarding step to the development of the industry, telecom users in era of Digital Life will be able to fully enjoy and have access to numerous services which will definitely enrich their everyday lives.

Message from Chief Executive Officer

Mr. Somchai LertsutiwongChief Executive Officer

006

Resilient revenue despitemacro weaknessService revenue* (THB mn)

* excluding interconnection charge

Revenue market share picked upfrom enhancing 3G-2.1GHz network

Continued to be the No.1 mobile operator in Thailand

52%117,990

2012 2013 2014

116,556112,435

Improving EBITDA as 3G adoptionincreasedEBITDA (THB mn)

66,4282012 2013 2014

63,69161,437

Generating solid profitabilityNet profit (THB mn)

36,0332012 2013 2014

36,27434,884

Continued investment in 3Gnetwork quality and capacityCapex (THB mn)

32,5622012 2013 2014

28,4609,598

0.282012 2013 2014

0.14Net cash

Rising demand touse mobile dataProportion of mobiledata users

44%34%

2014

2013

Subscriber market shareserving more than 44 millionnumbers

46%

33%21%

2014

2013

Accelerating growthon mobile data revenueProportion of mobile data revenue

1,600MB

620MB

Data consumptionalmost tripled in 1 yearData usage(MB/number/month)

2014

2013

Quality 3G-2.1 GHznetwork

covering

of populationafter only 1.5 years of operation97%

12.02012 2013 2014

12.210.9

Strong financial positionin spite of higher investmentsNet debt/EBITDA (times)

100% dividend payout of net profitDividend (THB/share)

Operational Highlights


Resilient revenue despitemacro weaknessService revenue* (THB mn)

* excluding interconnection charge

Revenue market share picked upfrom enhancing 3G-2.1GHz network

Continued to be the No.1 mobile operator in Thailand

52%117,990

2012 2013 2014

116,556112,435

Improving EBITDA as 3G adoptionincreasedEBITDA (THB mn)

66,4282012 2013 2014

63,69161,437

Generating solid profitabilityNet profit (THB mn)

36,0332012 2013 2014

36,27434,884

Continued investment in 3Gnetwork quality and capacityCapex (THB mn)

32,5622012 2013 2014

28,4609,598

0.282012 2013 2014

0.14Net cash

Rising demand touse mobile dataProportion of mobiledata users

44%34%

2014

2013

Subscriber market shareserving more than 44 millionnumbers

46%

33%21%

2014

2013

Accelerating growthon mobile data revenueProportion of mobile data revenue

1,600MB

620MB

Data consumptionalmost tripled in 1 yearData usage(MB/number/month)

2014

2013

Quality 3G-2.1 GHznetwork

covering

of populationafter only 1.5 years of operation97%

12.02012 2013 2014

12.210.9

Strong financial positionin spite of higher investmentsNet debt/EBITDA (times)

100% dividend payout of net profitDividend (THB/share)

Financial Highlights

00808

To lead and shape the multi-mediacommunications market in Thailandand aspire to become the most-admired Digital Life Service Provider

Vision

Mission• We commit to deliver superior and innovative services that can add value and enhance peoples’ daily lives.• We commit to enhance Customer Intimacy through the best customer experience.• We commit to drive intrapreneurship along with a professional and lively work culture for all our employees.• We commit to enhance value for our stakeholders through Sustainable Development and creating value to society through Creating Shared Value (CSV).

009Annual Report 2014 / Advanced Info Service Public Company Limited 09Annual Report 2014 / Advanced Info Service Public Company Limited

Total Dividend Payment (Baht per share) 12.92 8.43 10.90 12.15 12.00

1. Interim Dividend 3.00 4.17 5.90 6.40 6.04

2. Annual Dividend 3.92 4.26 5.00 5.75 5.96

3. Special Dividend 6.00 - - - -

Dividend Payout Ratio 187% 113% 93% 99.58% 99.01%

The Company aims to pay dividend at least 100% of net profit twice a year. The first of which shall be paid as interim as a result of operation during the first half of the year as approved by the Board of Directors and will be reported to the next general meeting of shareholders whereas the remaining thereof as annual payment which shall be approved by shareholders’ meeting as a result of operation in the second half year. As regards each subsidiary, dividend payment shall be based upon its operating results, financial conditions and other material factors.

Historical dividend 2010 2011 2012 2013 2014

In all cases, dividend payment shall be depending on cash flow, investment plan including any other future obligations of the Company and/or subsidiaries. Such dividend shall not exceed the retained earnings of the Company financial statements nor adversely affect the Company and subsidiaries ongoing operations.

Historical dividend in 5 consecutive years is as follows:

Dividend Policy

010

Our Business


Business Overview

Advanced Info Services Plc. (AIS) is the leading mobile operator in Thailand. Our core businesses include domestic mobile services, international direct dialling (IDD) services, and international roaming services. In 2014, we registered more than 44 million subscribers and generated 52% of market share by revenue. In the following year, we will provide fixed-broadband to deliver convergence service to customers as their behaviour is moving forward to digital life.

AIS currently operates mobile service on both 2G and 3G technologies. The 2G service is operated on the 900MHz and 1800MHz frequency under the Built-Transfer-Operate contracts with TOT and CAT, expiring in 2015 and 2013,* respectively. The commercial launch of 3G services on the 2.1GHz spectrum started in May 2013 under a 15-year license issued by the National Broadcasting and Telecommunications Commission (NBTC). Today the 3G service is available nationwide, covering 97% of population, and we are continuing on building 3G capacity to support the increasing demand of data usage.

Our sustainable business strategy focuses on transforming from “Telecom service provider” to “Digital life service provider” to suit the lifestyle of people in digital era. There are three elements that we are focusing on. First, we continue to expand and develop 3G&4G mobile network to prepare for the growing demand of mobile data. Second, we will provide fixed-broadband service, as behaviour of customers are shifting toward “always connected” whether they are in or out of their premises. Last, AIS will find and develop new digital contents under partnership model such as games, financial transactions and M2M.

Remark: *1800MHz BTO contract expired in 2013 and the NBTC issued a temporary measure to enforce service continuation until July 2015

Digital LifeService Provider

Mob

ileFixed BB

Digital Contents

012

Key Milestone 2014

January• AIS3G2100,incollaborationwithMyanmarPostsandTelecommunication, launched the very first data roaming service in Myanmar.

• AIS togetherwith 11 leading Asia Pacificmobileoperators from Bridge Alliance established the region’s largest Machine-to-Machine (M2M) alliance to offer a “One Stop Shop” experience for M2M deployment across the Asia Pacific region.

February• AIS3Gpost-paidunveiledMULTISIZESIM,thespecialSIM for every smart device.

March• AISlaunched“AISmPAYRabbitShop”in5BTSstationsto comfort its customers to change their own SIM to AIS mPay Rabbit SIM or to buy smart devices that support AIS mPay rabbit. mPay rabbit shops currently are located at Victory Monument, Siam, Chong Nonsi, Phayathai, and Saladaeng stations.

• AIS kickedoff the campaign “AIS Let’sGoal Brazil2014” for customers, with a data package starting from 199 baht, to view all 64 World Cup matches on mobile phone any time and place.

April• AIS,SingTelGroup,andSamsungannouncedpartnership programs in retail collaboration i.e. the direct carrier billing to allow its post-paid and pre-paid customers to buy mobile devices with AIS / SingTel service packages from Samsung stores. The purchase amount will simply be charged to their mobile phone airtime bills or deducted from their prepaid account. Also, customers will be able to access selected services directly on the phone without having to download the apps.

May• AIS announced its success in 3G 2100 network expansion reaching nationwide coverage within 1 year, wider than existing 2G network and faster than the target required by the National Broadcasting and Telecommunication Commission (NBTC).

June• AISincollaborationwithSingTelGroupdebuted“AISFuture Cube” at Central World. Customers can experience the 3D virtual communication which virtualizes the place in conversation just like they are in the same place.

• AISandExecutiveCinemaCorporationCo.,ltdjointlydebuted the “Embassy Diplomat Screen” movie theater, a 6-star movie premium theater in Thailand. AIS customer and partners will get a privilege and discount.


September• AIS, incollaborationwithMoxtra,debuted“MobileCollaboration Tools by Moxtra”, a mobile-centric social collection and collaboration application that allows corporate and SME customers to manage, present, and share personal and professional files publicly or within the selected group.

November•AIS launched “YOU!mobile”, a newconcept of online mobile services that gives customers freedom to design their own package and later swap between the

data and voice services.

• AISopenedupthefifthcallcenteroperationsofficeat the Nongkhai province for the disability. AIS aims to create jobs for disabled persons continuously. • AIS andAssumptionUniversity (ABAC) establisheda joint project called “Digital Life by AIS @ ABAC” and “ABAC connect” application as a new communication channel for ABAC students. AIS also provided free wifi for all campus with 100% capacity. • AIS debuted “Roam Fair”, an automatically refundroaming system for both pre-paid and post-paid customers who do not use their subscribed package.

• AISandOokbeeexpandede-bookmarkettothenextlevel by proposing the first audio book in Thailand.

December• AISlaunched“UnlimitedDataRoaming”packagefortraveler, covering 80 countries worldwide. And, AIS No Worry Data Roaming Service also provided guarantee to customer not to worry about bill shock.

• AIS3G2100offeredanexclusiveFIFAworldcupforitscustomers, whose data package starting from 199 baht, to enjoy watching all football matches by “AIS ON AIR” application on mobile phone in perfect HD resolution.

• The Board of Directors appointedMr. Somchai Lertsutiwong as director and member of executive committee in replacement of Mr. Wichian Mektrakarn who took early retirement.

July• The Board of Directors appointedMr. Somchai Lertsutiwong as Chief Executive Officer in replacement of Mr. Wichian Mektrakarn who took the early retirement.

• AISlaunched“SerenadeEmerald”toexpandservicequality experiences and special privileges from more than 10,000 shops throughout the country to customers or 3 highest customer groups who have total expense of more than 900 baht.

August• AIS togetherwithCIMBThaiBankPublicCompanyLimited (CIMB) announced the collaboration to develop a new banking solution on mobile phone called “Beat Banking” where the customers can receive 0.5% higher-than-normal interest rate for their savings or pay bill, transfer, and withdraw money 24 hours. • AISandMicrosofthavesignedapartnershipagreement to provide a public cloud platform for corporate and SME customers with affordable prices and world-class IT infrastructure management and security by Microsoft.

014

Awards and Recognition in 2014

• “TheMost Powerful Brands of Thailand 2014” formobile network industry from Faculty of Commerce and AccountancyofChulalongkornUniversity

• “TheMost Innovative Implementation ofAutomaticService in IVR2014”, at theAVAYAUserConference,USA(awardedMay2014),and“BestCustomerExperience Management of the Year 2013”, at the Asia Pacific Customer Service Consortium (APCSC), Hong Kong.

•“Superbrands2014”fromSuperbrandsforbeingqualitybrand which has been accepted and trusted among Thai consumer. AIS is the only telecom company in Thailand to receive this awards of honor

Corporate Reputation Awards

• “Thailand’s TopCorporate Brand Value 2014” for telecom sector from Faculty of Commerce and AccountancyofChulalongkornUniversity


• “TelecomService Providerof theYear” and “MobileService Provider of theYear” in 2014 from Frost and Sullivan, the global leader in market research analysts and economic and investment consultant

•“BestInvestorRelationsAwards”fromSETAwards2014and “SET Awards of Honor” for the excellent performance in Investor relations for 3 consecutive years

•“Thailand’sICTExcellenceAwards”forhighreliabilityin IT & telecom application development projects for its Supernova and Equinox Intelligent Platform from the Thailand Management Association (TMA)

•“BestPublicCompanies2014”forfiveconsecutiveyearsfrom Money and Banking magazine

Management and Performance Awards

016

99.99% 99.99% 99.99% 99.99%

Advanced ContactCenter Co., Ltd.Call center service

272 million bahtpaid-up capital

Advanced MPAYCo., Ltd.Service provider ofpayment businessvia mobile phone


Advanced Magic CardCo., Ltd.Distributor of cashcard business


AIN GlobalCommCo., Ltd.International telephoneservice gateway

200 million bahtregistered capital and100 million bahtpaid-up capital

51.00%1)

99.99% 98.55%

Digital Phone Co., Ltd.

Service provider of digitalmobile phone network inGSM 1800MHz frequency

3,655.47 million bahtpaid-up capital

Advanced DatanetworkCommunicationsCo., Ltd.Service provider of online datacommunication service viatelephone landlines andoptical fiber

957.52 million bahtpaid-up capital

Advanced WirelessNetwork Co., Ltd.Network operator, telecomservice operator and computersystem provider. Currently, AWNreceived an Internet License TypeI, Telecommunication BusinessLicense Type III, and 2.1GHzLicense from the NBTC1,350 million bahtpaid-up capital

99.99% 99.99% 99.99%

99.98%

Super BroadbandNetwork Co., Ltd.Network operator forinternational service andinternational telecom service operator i.e. international &national internet gateway etc.


Wireless Device SupplyCo., Ltd.Importer and distributorof handset and accessories


Advanced InternetRevolution Co., Ltd.2)

Service provider of internet


Advanced BroadbandNetwork Co., Ltd.Currently not start the operation

15 million baht 6)

paid-up capital

99.99%

99.98%

20.00%

29.00%5)

Information HighwayCo., Ltd.Transmission network provider

50 million bahtregistered capital and12.5 million bahtpaid-up capital

Clearing House for Number PortabilityCo., Ltd.Jointly invested, Operate theinformation system and thecentralized database forthe mobile portability service


MIMO Tech Co., Ltd.

Operate IT, and contentaggregator businesses


Fax Lite Co., Ltd.

Operate in acquiring and/orlease building, and relatedfacilities related totelecommunication business


10.00%

Bridge Mobile Pte. Ltd.

Jointly invested, provideinternational roaming service(incorporated in Singapore)

9 million us dollars4)

paid-up capital

Advanced Info Service Plc. 4,997.46 Million Baht Registered Capital and 2,973.10 Million Baht Paid-Up Capital As of 19 January 2015

Notes :1) The remaining 49% of shares, holding by person who has not conflict of interest.2) The dissolution of Advanced Internet Revolution Co.,Ltd. (AIR) as approved by the Board of Director Meeting no.7/2014 dated 4 August 2014 is now under liquidation process.3) The dissolution of Mobile Broadband Business Co.,Ltd. (MBB) and Advanced Mobile Broadband Co.,Ltd. (AMB) is now finished.4) Bridge Mobile Pte. Ltd. (BMB) has reduced its registered and paid-up share to 9 million share and 9 million baht respectively (source: Accounting and Corporate Regulatory Authority (ARCA)). In this regards, such reduction was not change the percentage of investment of the Company.5) On 16 September 2014, Super Broadband Network Co.,Ltd. has transferred its 29% stake in Information Highway Co.,Ltd.to Advanced Broadband Network Co.,Ltd.6) Registered its share capital addition from 1 million baht to 15 million baht on 19 January 2015.

Investment Structure of Advanced Info Service Plc.


99.99% 99.99% 99.99% 99.99%

Advanced ContactCenter Co., Ltd.Call center service


Advanced MPAYCo., Ltd.Service provider ofpayment businessvia mobile phone


Advanced Magic CardCo., Ltd.Distributor of cashcard business


AIN GlobalCommCo., Ltd.International telephoneservice gateway

200 million bahtregistered capital and100 million bahtpaid-up capital

51.00%1)

99.99% 98.55%

Digital Phone Co., Ltd.

Service provider of digitalmobile phone network inGSM 1800MHz frequency

3,655.47 million bahtpaid-up capital

Advanced DatanetworkCommunicationsCo., Ltd.Service provider of online datacommunication service viatelephone landlines andoptical fiber

957.52 million bahtpaid-up capital

Advanced WirelessNetwork Co., Ltd.Network operator, telecomservice operator and computersystem provider. Currently, AWNreceived an Internet License TypeI, Telecommunication BusinessLicense Type III, and 2.1GHzLicense from the NBTC1,350 million bahtpaid-up capital

99.99% 99.99% 99.99%

99.98%

Super BroadbandNetwork Co., Ltd.Network operator forinternational service andinternational telecom service operator i.e. international &national internet gateway etc.


Wireless Device SupplyCo., Ltd.Importer and distributorof handset and accessories


Advanced InternetRevolution Co., Ltd.2)



Advanced BroadbandNetwork Co., Ltd.Currently not start the operation

15 million baht 6)

paid-up capital

99.99%

99.98%

20.00%

29.00%5)

Information HighwayCo., Ltd.Transmission network provider

50 million bahtregistered capital and12.5 million bahtpaid-up capital

Clearing House for Number PortabilityCo., Ltd.Jointly invested, Operate theinformation system and thecentralized database forthe mobile portability service


MIMO Tech Co., Ltd.

Operate IT, and contentaggregator businesses


Fax Lite Co., Ltd.

Operate in acquiring and/orlease building, and relatedfacilities related totelecommunication business


10.00%

Bridge Mobile Pte. Ltd.

Jointly invested, provideinternational roaming service(incorporated in Singapore)

9 million us dollars4)

paid-up capital

Advanced Info Service Plc. 4,997.46 Million Baht Registered Capital and 2,973.10 Million Baht Paid-Up Capital As of 19 January 2015

018

As of 31 December 2014Intouch Holdings Plc 1),2)

Satellite services Telephone services abroad Internet and media services

Advanced Info Service Plc 2)

40.45%Thaicom Plc 2)2)

41.14%

Satellite and International BusinessesOther Businesses

Venture Capital Others

IPSTAR Co., Ltd. 100%

IPSTAR New Zealand Ltd. 100%

IPSTAR Australia Pty Ltd. 100%

Orion Satellite Systems Pty Ltd. 100%

IPSTAR International Pte. Ltd. 100%

IPSTAR Global Services Co., Ltd. 100%

IPSATR Japan Co., Ltd. 100%

Star Nucleus Co., Ltd. 100%

Spacecode LLC 70%

TC Broadcasting Co., Ltd. 99.99%

International Satellite Co., Ltd. 100%

Advanced Wireless Network Co., Ltd. 99.99%

Wireless Device Supply Co., Ltd. 99.99%

Advanced Contact Center Co., Ltd. 99.99%

Advanced MPAY Co., Ltd. 99.99%

Advanced Magic Card Co., Ltd. 99.99%

AIN GlobalComm Co., Ltd. 99.99%

Super Broadband Network Co., Ltd. 99.99%

MIMO Tech Co., Ltd. 99.99%

Fax Lite Co., Ltd. 99.98%

Advanced Internet Revolution Co., Ltd.3) 99.99%

Advanced Broadband Network Co., Ltd. 99.98%

Information Highway Co., Ltd. 29%

Digital Phone Co., Ltd. 98.55%

Advanced Datanetwork Communications Co., Ltd. 51%

Clearing House for NumberPortability Co., Ltd. 20%

Bridge Mobile Pte. Ltd. 10%

Shenington Investments Pte Ltd.1) 51%

Lao Telecommunications Co., Ltd. 49%

DTV Service Co., Ltd. 99.99%

CS LoxInfo Plc2)

42.07%

Teleinfo Media Plc 99.99%

AD Venture Plc 99.99%

Cambodian DTV Network Ltd. 100%

Meditech Solution Co., Ltd. 24%

Ookbee Co., Ltd. 22.26%

Computerlogy Co., Ltd. 25.01%

Matchbox Co., Ltd. 5) 99.96%

I.T. Applications and 99.99%Services Co., Ltd.

Intouch Media Co., Ltd. 99.99%

Touch TV Co., Ltd. 99.99%

Joint Venture Kantana 50% and Intouch

ITV Plc 4) 52.92%

Artware Media Co., Ltd. 99.99%

Local Wireless Telecommunications

INTOUCH Group’s Investment Structure


As of 31 December 2014Intouch Holdings Plc 1),2)

Satellite services Telephone services abroad Internet and media services

Advanced Info Service Plc 2)

40.45%Thaicom Plc 2)2)

41.14%

Satellite and International BusinessesOther Businesses

Venture Capital Others

IPSTAR Co., Ltd. 100%

IPSTAR New Zealand Ltd. 100%

IPSTAR Australia Pty Ltd. 100%

Orion Satellite Systems Pty Ltd. 100%

IPSTAR International Pte. Ltd. 100%

IPSTAR Global Services Co., Ltd. 100%

IPSATR Japan Co., Ltd. 100%

Star Nucleus Co., Ltd. 100%

Spacecode LLC 70%

TC Broadcasting Co., Ltd. 99.99%

International Satellite Co., Ltd. 100%

Advanced Wireless Network Co., Ltd. 99.99%

Wireless Device Supply Co., Ltd. 99.99%

Advanced Contact Center Co., Ltd. 99.99%

Advanced MPAY Co., Ltd. 99.99%

Advanced Magic Card Co., Ltd. 99.99%

AIN GlobalComm Co., Ltd. 99.99%

Super Broadband Network Co., Ltd. 99.99%

MIMO Tech Co., Ltd. 99.99%

Fax Lite Co., Ltd. 99.98%

Advanced Internet Revolution Co., Ltd.3) 99.99%

Advanced Broadband Network Co., Ltd. 99.98%

Information Highway Co., Ltd. 29%

Digital Phone Co., Ltd. 98.55%

Advanced Datanetwork Communications Co., Ltd. 51%

Clearing House for NumberPortability Co., Ltd. 20%

Bridge Mobile Pte. Ltd. 10%

Shenington Investments Pte Ltd.1) 51%

Lao Telecommunications Co., Ltd. 49%

DTV Service Co., Ltd. 99.99%

CS LoxInfo Plc2)

42.07%

Teleinfo Media Plc 99.99%

AD Venture Plc 99.99%

Cambodian DTV Network Ltd. 100%

Meditech Solution Co., Ltd. 24%

Ookbee Co., Ltd. 22.26%

Computerlogy Co., Ltd. 25.01%

Matchbox Co., Ltd. 5) 99.96%

I.T. Applications and 99.99%Services Co., Ltd.

Intouch Media Co., Ltd. 99.99%

Touch TV Co., Ltd. 99.99%

Joint Venture Kantana 50% and Intouch

ITV Plc 4) 52.92%

Artware Media Co., Ltd. 99.99%

Local Wireless Telecommunications

Notes :1) Holding Company2) Listed Company on the Stock Exchange of Thailand3) On process of liquidation4) The Board of Governors of the Stock Exchange of Thailand has resolved to delist ITV’s common stocks, effective 24 July 2014 onwards. ITV is involved in a legal dispute with the Prime Minister’s Office, which is currently under arbitration.5) MB is planning to cease its operations as it has been posting continuous losses.

020

Top Ten Shareholders as of 18 August 2014,The latest book closing date for the right to receive dividend, are as follows:

Major shareholder whose behavior can influence when determining policy or handling operation, are

1. Intouch Holdings Plc., major shareholders of Intouch Holdings Plc. as follows:

Aspen Holdings Ltd.1) 1,334,354,8252) 41.621) On the list of shareholders provided by the Department of Business Development, Ministry of Commerce, information as of 7 January 2015, Aspen Holdings Limited is a company incorporated in Thailand and 99.99% owned by Anderton Investments Pte Ltd., Singapore. 2) Shareholding as of 27 August 2014, the latest book closing date

2. SingTel Strategic Investments Pte Ltd holds 23.31% directly in AIS, and 0.01% via OCBC Nominees. The shareholder of SingTel Strategic Investments Pte Ltd is

Name No. of Shares Held % of Shareholding

Singtel Asian Investments Pte Ltd* 100.00*Singtel Asian Investments Pte Ltd is 100% hold by Singapore Telecommunication Limited (Source: Accounting and Corporate Regulatory Authority (ARCA), Singapore as of 19 January 2015

Agreements between major shareholders and the Company concerning topics which affect the issuance of securities or management of the Company’s operations.

- None -

Name % of Shareholding

No. Name No. of Shares Held % of Shareholding

1 INTOUCHHOLDINGSPLC* 1,202,712,000 40.45

2 SINGTEL STRATEGIC INVESTMENTS PTE LTD 693,359,000 23.32

3 THAI NVDR CO.,LTD. 152,130,471 5.12

4 LITTLEDOWN NOMINEES LIMITED 78,659,800 2.65

5 STATESTREETBANKEUROPELIMITED 50,852,638 1.71

6 HSBC (SINGAPORE) NOMINEES PTE LTD 50,122,604 1.69

7 THEBANKOFNEWYORK(NOMINEES)LIMITED 42,596,730 1.43

8 THEBANKOFNEWYORKMELLON 39,940,300 1.34

9 SOCIALSECURITYOFFICE(2CASE) 26,570,900 0.89

10 CHASE NOMINEE LIMITED 15 26,308,489 0.88

Total 2,363,252,932 79.49

Source : Thailand Securities Depository Company Limited

Top Ten Shareholders


Mobile phone service•Mobilephoneservices & rental and call center services

•Constructionincome from the agreements for operation

Sub-total

Mobile phone sales

Sub-total

Data network and broadband service

Sub-total

Revenue structure from providing service & sales income in AIS group tothe third party within 3 years

Service/Product Operation By 2012 2013 2014

Million Baht Million Baht Million Baht % Size % Size % Size

Revenue Structure

% Holding of shares as at 31 Dec 14

Advanced Info Services Plc.Advanced Wireless Network Co., Ltd.Digital Phone Co., Ltd.AIN Globalcomm Co., Ltd.AdvancedMPAYCo.,Ltd.Advanced Contact Center Co., Ltd.

Advanced Info Services Plc.Digital Phone Co., Ltd.Advanced DatanetworkCommunication Co., Ltd.*

Advanced Info Services Plc. Advanced Wireless Network Co., Ltd.Wireless Device Supply Co., Ltd.

Advanced DatanetworkCommunication Co., Ltd.*

Super Broadband Network Co., Ltd.Advanced Internet Revolution Co., Ltd.

Grand Total

Remarks : *Advanced Datanetwork Communication Co., Ltd is an indirect subsidiary.

99.9998.5599.9999.9999.99

98.5551.00

99.9999.99

51.00

99.9999.99

122,971.08 81.02 99,504.58 66.08 26,708.27 17.88 - - 23,216.54 15.42 94,478.94 63.37 702.85 0.46 441.47 0.29 27.19 0.02 3,393.72 2.24 3,455.66 2.30 2,873.93 1.92 170.25 0.11 309.55 0.21 368.75 0.25 4.97 - 4.94 - 3.90 - 5,584.22 3.68 3,639.60 2.42 600.26 0.40 543.12 0.36 126.84 0.08 - - 9.76 0.01 - - - -

133,379.97 87.88 130,699.18 86.80 125,061.24 83.74

519.18 0.34 516.32 0.34 8.38 0.01 - - 3,484.89 2.31 15,877.15 10.63 17,241.80 11.36 15,113.31 10.04 7,528.74 5.04 17,760.98 11.70 19,114.52 12.69 23,414.27 15.68

260.96 0.17 155.43 0.10 24.40 0.02 308.28 0.20 416.31 0.28 786.18 0.53 75.24 0.05 192.38 0.13 42.96 0.03

644.48 0.42 764.12 0.51 853.54 0.58

151,785.43 100.00 150,577.82 100.00 149,329.05 100.00

022

Industry and Competition in 2014 The year 2014 is the second year in which mobile operators have been providing services on the 2.1GHz spectrum under the licensing scheme, in addition to other spectra which are under the BTO agreements for operations. Operators have been attracting customers to the 2.1GHz spectrum which are run for both 3G and 4G. There has been a concentration in marketing campaigns to encourage customers, particularly the mid- to low-tier segments, to adopt 3G-enabled handsets. To support that, operators started to bring in various handsets costing less than THB 5,000 to the market. As these new mid-tier handsets were successfully sold, operators found that the market was more urging to be online -- data uptake has tripled in 1 year --than concerning about handsets’ brands. However,fromtheheightenedcompetition,ARPUtrendsof all operators are sloping downward from the decrease in price per unit and more package-bundled discounted handsets. With the effect from political uncertainties during the first half of the year, the overall industry grew less than 2%. Regulatory issue in 2014 has been the key moving and debatable factor. In July 2014, there was a postponement of the 1800MHz and 900MHz spectra, which caused a one-year extension of the 1800MHz remedy period until July 2015. The remedy period was for the continuity in providing services to protect public benefits and to seamlessly secure customers subscription while the spectra are to be allocated.

Mobile Industry Trend in 2015 The competition is expected to remain intense as operators continue to launch campaigns to attract customers to use 3G. Cheaper 3G-enabled smartphones and featured phones bundling with persuasive packages to encourage 3G adoption will approach the low end customers which are the majority of the country. However, it is expected that operators will maintain rational pricing while keeping improving their networks to serve the strong data consumption growth. Beside capacity investments, operators will also seek partners to supply more digital contents, which will generate a new form of revenue, to foster the digital life. In addition, we expect that the NBTC will hold the delayed auction midst 2015 on both 1800MHz, which has been under the remedy period, and 900MHz which will expire in September 2015. The auction will develop new dynamics in the industry as operators will be able to invest in 4G in addition to the current 3G services. We also expect that proportion of 4G - enabled handsets will be about 10% of new handset sales next year. The investments in network expansion from the auction will not only benefit customers from more advanced and better services, but will also create more job opportunities and higher income in the telecom and other related industries. This will drive the country forward to reach a new technology horizon so as to enhance the country’s competitive edge.

Industry and Competition in 2014and Trend in 2015


Over the next 3-5 years, the behavior shift of consumers toward digital lifestyle will change the face of telecom business in Thailand from today. Customers will easily and quickly reach news, information, and entertainment media to fulfill their needs in many ways through more advanced services and networks provided by operators. For AIS, we find this as a compelling opportunity to transform ourselves to be a “Digital Life Service Provider” who focuses on servicing the always-connected lifestyle via our quality networks -- our strong core fundamental. To achieve that, we put an emphasis on 3 key strategic elements: mobile services, fixed broadband services, and digital contents.

Mobile Services Remain Our Core Business Currently, mobile penetration in Thailand has climbed up to 140% and is expected to grow further with the acceleration of data adoption. This drives AIS’ determination to continuously enhance our 3G-2.1GHz capacity to serve the rapid increase in customer usage. The change toward digital consumption also means the 4G technology will become more prevalent in the near future. This prescribes the importance of additional spectrum requirements, in particular the 1800MHz and 900MHz that will soon be available for auction.

Strengthening Mobile with Fixed Broadband In early 2015, AIS will start a fixed broadband business, providing internet to households to respond to customer usage both in and out of homes. AIS can leverage from extensive amounts of high-quality fiber optics (FTTx) nationwide deployed under 3G-2.1GHz network, which can provide higher speeds on both upload and download. As the market penetration remains low, this business will develop into a new important source of revenue for AIS as we plan to become one of the major providers in the market.Ultimately,thisbusinesswillcreatedefensivevalueto our large subscriber base of mobile business going forward.

Creating Various Innovations ViaDigital Contents A variety in digital contents will be an essential propeller for AIS as a Digital Life Service Provider. Digital contents will be a medium from which we can generate a new form of revenue, differing from the current voice and data services. AIS will focus on partnering with various content providers such as football broadcasting and reading platform contents to support creating an integrated digital environment. This will change the ordinary way of data consumption unprecedentedly. Due to the accelerating data uptake trend, it is a crucial indication for AIS to seek new and interesting contents to serve high-demand customers. This will include not only entertainment media but also games, cloud computing, online financial transactions and machine to machine services, which will certainly elevate the modern daily lifestyle.

AIS will emphasize on 3 key dimensions. 1) Customers, who are our highest priority to run the business. We target to get our customer to “love” us through our quality and privileges we tenderly offer. 2) People. we would like to motivate our people to constantly self-improve and adapt a new working culture to become dynamic, imaginative, and delighted. All of which is to achieve extraordinary results and breakthrough solutions. 3) Partners, AIS really puts importance on “Ecosystem” to reach multi ability-enriched telecom collaboration. With our large subscriber base, our partners will be able to exercise their expertise to match our customers’ needs, which will sustainably bring growth to both AIS and our partners.

These are new foundations of AIS to become the front-running organization providing digital life services. Growth to be seen over the next 3-5 years is our long-term engagement. We keep committing our philosophy Quality DNAs which is to deliver quality devices via our best national-wide network with innovative applications and services through our fundamental of “quality”.

Business Direction Over The Next 3-5 Years

024

Products and Services

In 2014, AIS fully operates on 3G network nationwide, with 21,300 base stations in all provinces covering more than 97% of Thailand population. We currently serve 44 million subscribers, of which 89% are prepaid subscribers.

In the past year, we have seen the increasing demand for mobile data in every segment of customers. Hence, we continue to develop our products and services to suit the different needs and behavior of various segments. The main products and services are summarized below.

AIS Super Combo

To encourage the use of mobile data on quality smartphones with reasonable price in mid-tier segment, we introduced the co-branded 3G mobile phone concept named ‘AIS Super Combo’. This is done through the co-operation with exclusive mobile phone manufacturer and bundle the package with the phone for prepaid andpost paid.

Bundling Package AIS offers attractive devices bundling with package including voice and data to capture growing demand of smartphone in various segments from mid-end to

high-end. We offer campaigns such as “AIS Super Deal” to offer 3G smartphone at special price from a wide range of world leading brands, such as Apple, Samsung and Nokia bundling with choice of packages.

Segmented SIM We offer differentiation of SIM, packages and services to a wide range of customer groups such as students, foreign workers or tourists. “AIS S-Cool SIM” launches forschoolstudents,while“AISU-SIM”targetsuniversity students. “AIS Mengalaba” launches for Myanmar users, “AIS Suasaduei” tailors for Cambodian customers and “AIS Traveler SIM” targets tourists. AIS customizes SIM cards, packages and services for each segment to cover as much of our customersegment and usage experiences as possible.

We also customize the new Myanmar IVR service for Myanmar SIM is an example. Furthermore, we offer a new innovation product called “YOU!Mobile”which is

designed for customers who prefer customization of design their own package and hence are able to swop the unused voice and data without extra charges.

Social SIM AIS captures the potential growth revenue from the increasing popularity of social media by designing various packages to match each type of usage. The packages include“UnlimitedSocialSIM”forsocialapplicationusers,“Smartphone SIM” for data users on smartphone, “Facebook SIM” for Facebook lovers, for instance. These enable customers to purchase and subscribe to packages that match their usage behavior to get the best usage and most valuable package.

International RoamingIn the past year, AIS has been providing both voice and data roaming services and we have developed the software to prevent mobile data leakage and bill shock to ease the customers’ mind. For different behavior of users, we have offered many packages and products with reasonable price. Currently, we are providing roaming service in 217 countries around the world.


Customer Relation Management and Customer Experience Catering to the rapid growth of the smartphone market and the wide adoption of 3G-2.1GHz, AIS continues to move forward in providing service excellence for the new digital era. Expanding to 68 locations nationwide this year, AIS Shop has been reinvented as an “Experience Center”. With a new design and a new concept. AIS Shop aims to serve as a one-stop shop for a complete digital lifestyle by providing smartphone gurus and a variety of service innovations. In addition to the recent payment kiosks and

smart tables, other new initiatives for self-service convenience this year include the “Service Vending Kiosk.” The first of its kind in Thailand, this pioneering service provides such leading features as lucky number and pretty number selection with new SIM purchases, the ability to request the same number for a new SIM, a SIM size change service for different devices, online registration for prepaid users, and 3G upgrade for all SIM types, with many more features to come. The kiosk is currently available in 40 AIS Shops nationwide. Also this year, 215 members of staff have been developed into smartphone gurus and experts, ready to provide professional, helpful and caring assistance to AIS customers.

Content and Partnership AIS has continually developed multiple contents and applications with partners, including GMM Grammy, CTH, RS and CIMB to serve the need of customers in the digital era and also to generate a new stream of revenue. In 2014, AIS offered multiple exclusive contents and services on mobile, including the World Cup, the English Premier League and Hormones The Series to deliver entertainment content, and CIMB-Beat Banking to provide convenience in mobile banking service.

Distribution Channels AIS distributes products and services through several channels including AIS shop of more than 55 locations, nationwide franchise dealers “Telewiz” and “Telewiz Plus” more than 450 stores, 25,000 local retailers, mobile phone and IT shops (such as Jaymart, TG, Banana IT, IT City), modern trade chain stores (such as Tesco Lotus, Big C, Powerbuy, 7-11) in total of more than 10,000 locations. AIS also promote use of more than 400,000 spots of electronic top-up channels for prepaid service such as online money top-up, ATM, and mPay.

In 2014, AIS has an aim to strengthen “3G Service Point’s” channel by working with 1,000 retail agents to upgrade their service, cover all districts nationwide. At the same time, in ‘Telewiz’ and ‘Telewiz plus’, the new innovative ‘Cellebite’ has been used to provide data transfer service such as phone numbers, images, text and music from the customer’s old devices to the new one. And, for improved convenience of customers, Telewiz Plus has been equipped with an effective queuing system and payment kiosks.

026

The Advanced Contact Center (ACC) also continues to invest in service innovation. New initiatives this year include the “Dynamic IVR Menu Service,” the automated voice response system that can be customized to suit the customer’s usage and profile. For example, the system can recommend the most appropriate internet package based on the customer’s actual usage and it can automatically greet customers by their name for a truly personalized greeting. New technological developments have significantly increased ACC’s capability to accommodate inbound call volume, up by 12% from last year, with IVR now accounting for 72% of all call services. Revenues generated from VAS and Internet package subscriptions via IVR are also 40% higher than last year, with the Customer Satisfaction Index (CSI) for IVR service increasing from 64% to 67% YoY.

In addition, AIS has opened up a new dimension in engaging customers via digital channels this year by launching a new official “LINE” account, “AIS Privilege,” delivering selected privileges aimed at all lifestyles right to the customer’s device. The account has been very well-received, with a total of 8.06 million “friends” already enjoying attractive monthly surprise campaigns, such as a free Sundae at McDonald’s, free Pretzel at Auntie Anne’s, or free beverages at Black Canyon. AIS is also the first Thai operator to launch animated stickers giving our customers the opportunity to share colorful and playful messages with each other on social media. We also provide a special reward campaign for our valued customers under the theme, “Aunjai Year 6, Double Reward: Win Gold & Redeem Points”.

This year, “AIS Serenade” celebrated its 10th year anniversary by launching two new dimensions to enhance the exclusivity offered to AIS Serenade customers. Firstly, AIS Serenade has expanded its customer base with a brand new privilege segment, “Serenade Emerald,” for customers with a minimum service period of 6 months and a spending average of at least 900 Baht per month. Secondly, AIS Serenade has opened up an opportunity for non-Serenade customers to enjoy the Serenade experience with “Serenade Group Privilege”. A Serenade Group can be formed of up to 3 mobile numbers with a combined group spending of 3,000 Baht or more for Platinum, 1,500 Baht or more for Gold, or 900 Baht or more for Emerald.

In recognition of its unique service innovations, Advanced Contact Center (ACC) was awarded “The Most Innovative Implementation of Automatic Service in IVR 2014,” at the AVAYA User Conference, USA (awarded May 2014), and “Best Customer Experience Management of the Year 2013,” at the Asia Pacific Customer Service Consortium (APCSC), Hong Kong (awarded Sep 2014).


Risk Factors

AIS has established a proactive risk management plan to ensure that the Company continues to be viable even in unpredictable situations. As such, AIS has set up the Risk Management Committee, comprised of senior executives and the Chairman of AIS, who acts as Chairman of the committee. The committee meets on a quarterly basis in order to discuss and classify the risks to the entire organisation and to set up a precautionary action plan to manage risks at an acceptable level. The aim of such measures is to ensure that AIS achieves set targets and maintains the confidence of the shareholders and interested individuals. The Risk Management Committee submits the results of its risk management analysis to the Executive Committee, the Audit Committee, and the Board of Directors every quarter. Further detail of risk management are shown in “Risk management, Internal control, and Internal audit”, page 70

In 2014, the factors which were identified as a risk to operational results are summarised as follows:

Risks from Regulatory and Government PoliciesThe Jointly Undertaken Work Agreement between State Enterprise and Private Sectors under The Private Participation in State Undertaking Work ACT B.E. 2535.

(1) The Amendment of The Jointly Undertaken Work Agreement between Advanced Info Service Public Company Limited (the Company) and TOT Public Company Limited (TOT).

As per the letter from The Ministry of Information Technology and Communications requesting the opinion of the Council of State on whether the amendments to the Cellular Mobile Telephone Service Agreement (the Agreement) between TOT and the Company after enforcement of the Private Participation in State UndertakenWorkACTB.E.2535havebeenmadeinlinewith the said Act and, if such amendments do not conform with the said Act, what course of action should be taken; consequently, the Council of State presented its opinion in a Memorandum which could be summarized as indicating that the Amendments of the Agreement were not legitimately carried out under the Private Participation in

StateUndertakenWorkACTduetothelackofsubmission to the Coordinating Committee for consideration under Article 22 and to the Cabinet as the authority in charge of the approval. However, the amendment procedures of the Agreement which represent administrative juristic acts are capable of being separated from the amendments to the Agreement and those amendments to the Agreement are still in force so long as they are not rescinded or invalidated by virtue of time or by other conditions.

However, if the amendments of the Agreement of the Company are revoked, this may result in a shortening of the term of the Agreement and/or a higher prepaid revenue share. Nonetheless, the Company firmly believes in the principles and the grounds of the amendments of the Agreement and the Company has fully complied with the JointlyUndertakenWorkAgreementandallrelatedlawsincluding the principles of good governance. Thus, the Company believes that there shall be no material change which shall have an impact on the Company.

Disputes Relating to Excise Tax(1) The Case between Advanced Info Service Public Company Limited (the Company) and TOT Public Company Limited (TOT)

On 22 January 2008, TOT submitted a dispute (Case No. Black 9/2551) to the Arbitration Institute, Alternative Dispute Resolution Office, and the Office of the Judiciary, demanding that the Company pay additional revenue share of for Baht 31,463 million.

On 20 May 2011, the Arbitral Tribunal unanimously resolved to dismiss the disputes citing the reason which can be summarized as the Company had lawfully paid the revenue share. Therefore, the Company has not committed a breach of the agreement and the Company does not have to pay any additional revenue share to TOT. Consequently, TOT has submitted an application to the Central Administrative Court to set aside the award of the Arbitral Tribunal. At present, the case is pending the consideration of the Central Administrative Court; the trial process may take several years to conclude.

028

If the Company loses this case, it may be obliged to pay TOT as demanded. However, the Management of the company firmly believes that this case shall reach a positive conclusion since the amount of revenue share was the same amount of excise tax paid by the Company which the Arbitral Tribunal had taken into consideration when unanimously deciding to dismiss the case.

(2) The Case between Digital Phone Company Limited (DPC), A Subsidiary of the Company, and CAT Telecom Public Company Limited (CAT)

CAT submitted a dispute (Case no. Black 3/2551) to the Arbitration Institute, Alternative Dispute Resolution Office, and Office of the Judiciary, demanding DPC, a subsidiary of the Company, pay additional revenue shareof Baht 2,449 million under the Digital PCN (Personal Communication Network) Agreement plus penalty at the rate of 1.25 percent per month of the unpaid amount for each year calculated from the default date until full payment totalling Baht 3,410 million is made. Such claimed amount is equal to the amount of excise tax DPC paid between 16 September 2003 and 15 September 2007, and was deducted from the revenue share pursuant to the resolution of the cabinet on 11 February 2003 as is the standard practice of the telecommunications industry.

On 1 March 2011, the Arbitral Tribunal resolved to dismiss the dispute citing the reason which can be summarized as the original debt had been completely paid and settled. Thus, DPC has not committed any breach and CAT cannot re-claim the alleged deficit amount, including the penalty and the value added tax. Consequently, CAT submitted a request to the Central Administrative Court to set aside the award of the Arbitral Tribunal; the procedure can take several years to conclude.

If DPC loses the case, it may be obliged to pay CAT as demanded. However, the management of the Company firmly believes that this case shall reach a positive conclusion since the revenue share demanded by CAT is equal to the amount of excise tax which has already been paid by the Company according to the unanimous resolution of the Arbitral Tribunal, which dismissed the dispute.

Dispute Over Revenue Sharing from Interconnection Charge According to the Telecommunication Business Act B.E.2544andtheNotificationofNTCregardingtheUseand Interconnection of Telecommunication Networks B.E. 2549, the Company has the responsibility to enter into interconnection agreements with other operators. The Company offered to provide remuneration to TOT for such interconnections, which was calculated from the net income according to the rate and calculating method of the Company. However, TOT required the Company to pay revenue share calculated from the gross amount of interconnection charges received by the Company at the rate specified in the Agreement without deduction of interconnection charges which the Company has to pay to other operators. On 26 January 2011, TOT sent a letter demanding that the Company pay the revenue share of the interconnection charges of the concession years 17-20 in the amount of Baht 17,803 million plus interest at the rate of 1.25 percent per month. However, the Company disagreed and sent a letter opposing the said claim to TOT and submitted the dispute to the Dispute Reconciliation Office, Arbitration Institute ref. no. Black 19/2554 on 9 March 2011 requesting the Arbitral Tribunal to award that TOT has no right to claim for such revenue share. At present, the case is pending consideration of the Arbitral Tribunal and may take several years to conclude.

If the Company loses the case, it may be obliged to pay TOT as demanded. However, the management of the Company firmly believes that the resolution of the Arbitral Tribunal will reach a positive conclusion for the Company since it has fully complied with the law.

Dispute between Digital Phone Company Limited (DPC), A subsidiary of the Company, and CAT Telecom Public Company Limited (CAT) Regarding The Reduction of Roaming Charges between DPC and the Company. Digital Phone Company Limited (DPC) submitted a dispute (Case no. Black 27/2553) to the Alternative Dispute


Resolution Office, the Thai Arbitration Institute, requesting that the Arbitration Panel set aside the allegation of CAT that DPC was in breach of agreement on the grounds that the agreement was made without approval from CAT and would terminate the agreement as stated in a letter dated 6 January 2010, and demanding that CAT pay compensation of Baht 50 million to DPC. On 15 July 2010, CAT submitted a dispute (Case no. Black 62/2553) to the Arbitration Institute, demanding that DPC pay additional remuneration for concession years 10-12 to the amount of Baht 2,000 million plus penalty calculated from April 2010 incurred due to the reduction by DPC of the roaming charge rate between DPC - the Company from Baht 2.10 to Baht 1.10 during the period of 1 April 2007 - 31 December 2008 without the approval of CAT. Furthermore, on 1 September 2011, CAT submitted a further dispute of the concession year 12 (1 April 2009-15 June 2009) to the Arbitration Institute, Alternative Dispute Resolution Office, and the Office of the Judiciary (Case no. Black 89/2554) for the amount of Baht 113,211,582.68. Later, the Arbitration Institute ordered that all three disputes be considered together and, at present, such disputes are pending consideration of the Arbitral Tribunal which may take several years to conclude.

If DPC loses the case, DPC may be obliged to pay CAT as demanded. However, the management of the Company believes that the ruling of the Arbitration Panel of this case shall decide in favour of DPC as DPC had informed CAT of the application of the roaming rate of Baht 1.10 per minute in July 2006, to which CAT had given written approval of such application for the period until March 2007 and had also given additional approval during the period of January 2009 to March 2009. In addition, CAT had never sent any refusal or objection to DPC during the disputed periods. The roaming rate at Baht 1.10 per minute is also in conformity with market conditions where the rate of service charge had been lowered from the previous higher roaming service charge rate. Besides, DPC had also entered into a roaming agreement with the Company using the rate of Baht 1.10 per minute as approved by the NTC.

Dispute between Digital Phone Company Limited (DPC), A Subsidiary of the Company, and CAT Telecom Public Company Limited on Tower and Power Supply ownership CAT submitted a dispute (Case no. Black 8/2552) to the Arbitration Institute, Alternative Dispute Resolution Office, demanding that DPC deliver and transfer ownership of 3,343 Towers including 2,653 units of Power Supply equipment under the terms and conditions of the Digital PCN (Personal Communication Network) Agreement. After DPC failed to do so, CAT demanded that DPC pay Baht 2,230 million to CAT as compensation. DPC considers that all disputed Towers and Power Supply equipment are not included under the definition of equipment as stipulated in clause 2.1 of the Agreement of which DPC is obligated to deliver and transfer under the terms and conditions of the Agreement.

The Arbitrary Tribunal unanimously resolved to dismiss all of the disputes citing the reason which can be summarised as the right of CAT to demand that DPC deliver properties which are objects of the contract cannot be exercised until 60 days after expiration of the contract. Therefore, the submission of the dispute by CAT is premature. Consequently, CAT has submitted a request to the Central Administrative Court to set aside the award of the Arbitral Tribunal. At present, the case is pending consideration of the Central Administrative Court which may take several years to conclude.

Additionally, the Company considered this case as high value and if DPC loses the case, it will be obligated to pay CAT as demanded. However, in consideration of the aforementioned arguments, the management of the Company’s firmly believes that the case shall reach a positive conclusion.

Dispute Case with TOT Regarding The Mobile Number Portability (MNP) of AIS’ Subscribers Transferring to Advanced Wireless Network Company Limited (“AWN”) as The Affiliate of AIS On September 25, 2014, TOT Public Company Limited (“TOT”) submitted the dispute (Black Case No. 80/2557)

030

to the Arbitration Institute, Alternative Dispute Resolution Office, demanding the Company to pay liquidated damages commencing from the date of submission of the dispute in the amount of Baht 9,126 million, plus interest at the rate of 7.5 percent per annum including the legal fees and expenses for the arbitration process by claiming that such damage was caused by the Company to transfer its subscriber operated under 900 MHz to 2100 MHz system of AWN on the ground that the Company breach the Cellular Mobile Telephone Service Agreement (the “Agreement”) between TOT and the Company.

Now the dispute in the arbitration proceedings, the management of the Company firmly believes that the outcome of the dispute is unlikely to have a significant impact on the financial statements of the Company and the Company has fully complied under the Agreement in all respects.

Dispute Case Regarding the Companies Cannot Perform to Collect All Prepaid Scribers Information of the Company under NBTC Notification Regarding Prepaid Identification Acco rd ing to the Na t iona l B roadcas t ing Telecommunications Commission (“NBTC”) ordered all mobile operator operated per-paid service including the Company must collect and record all information of all Prepaid Subscribers within the specific of time and subsequently issued an order requiring an administrative fine in the amount of Baht 80,000 per day to the Company and the major 2 mobile phone operator in this telecommunication industry from July 6, 2012 until fully comply with the said order because all 3 operators have not yet fully complied with the said order. The Company has filed to the Administrative Court for the revocation of 2 NBTC Orders as the Black Case No. 1858/2554 and Black Case No. 252/2556, respectively, is now being considered by the Administrative Court.

In case that the Company loses the case, the Company may have to pay an administrative fine of Baht 80,000 per day, from July 6, 2012 until the date that the Company can comply with the said order of the NBTC. However, the managements of the Company believe that this

dispute would be resolved in a good way due to the NBTC and all mobile operators had a common effort to record all prepaid subscribers information to facilitate the telecommunication business according to such order. Eventually NBTC and all mobile operators including the Company already developed 2 Snap Shot Applications for registration of Prepaid Subscriber through distributors channel on top of filling out the registration form and recording a copy of the identity card which such information will be sent to system and networks of mobile operators.

Risk to AdministrationRisk to IT Security With advanced technology, the service users can access their desired data via the internet from anywhere in the world and make financial transactions on mobile phones. The technological advancements allow consumers to have extra data storage capacity in addition to traditional computer memory, such as through Cloud computing, which results in a rise in the risk of data leakage.

AIS has placed emphasis on preventing threats to information security. As such, the Company has established policy on the security of its computer information systems and technology, and implemented procedures for receiving-transmitting the Company’s data via portable devices through Exchange ActiveSync so as to enforce the executives and employees at all levels in the organization to comply. Training courses have been provided and information shared with employees on their computer screens so as to promote continued awareness. Data security risk assessment has been performed for important systems in accordance with the Company’s plan so as to prevent possible risk from information theft or system failure. In addition, AIS has implemented ISO 27001-Information Security Management in order to ensure Company’s data security from people, processes and procedures. Including systematic and adequate information security management system.


Summary Profile of

The Directors, Management

Company Secretary, Head

of Internal Audit and Head

of Compliance

032

Mr. Vithit LeenutapongAppointed 27 Mar 2013Age 59 years•ChairmanofBoardofDirectors•ChairmanofLeadershipDevelopmentand Compensation Committee•AuthorizedDirectors

Share Ratio (%)* None

Relationship with Management None

Highest Education•MasterofBusinessAdministration,Universityof SouthernCalifornia,USA

Related Training Program held by IOD •RoleoftheChairmanProgram(RCP)Class34/2014•SuccessfulFormulation&ExecutionofStrategy(SFE)Class3/2009•RoleoftheCompensationCommittee(RCC)Class7/2008•AuditCommitteeProgram(ACP)Class5/2005•DirectorsCertificationProgram(DCP)Class16/2002

Working Experiences in 5 yearsListed Company2014 - Present Chairman of Board of Directors, Chairman ofLeadershipDevelopmentandCompensation Committee, Authorized Directors / Advanced Info Service Plc. 2001 - Present Director / Intouch Holding Plc.2001 - 2014 Independent Director , Member of Audit Committee / Intouch Holding Plc.

Company Limited / Other Organisation2011 - Present Director / National Press Council of Thailand2005-Present President/ThaiYarnyonCo.,Ltd. Director / The Queen’s Gallery Director / Saha Thai Steel Pipe Plc. Director/TheBangkokBankFoundation1995-2013 Director/BarcelonaMotorCo.,Ltd.2002 - 2010 Director / German - Thai Chamber of Commerce

Illegal Record in past 10 yearsNone

Mr. Somprasong BoonyachaiAppointed 28 Mar 1994Age 59 years•Vice-ChairmanofBoardofDirectors•MemberofLeadershipDevelopmentand Compensation Committee•MemberofNominationandCorporateGovernanceCommittee



Highest Education•Master of Engineering, Asian Institute of Technology Related Training Program held by IOD •RoleoftheChairmanProgram(RCP)Class21/2009•DirectorCertificationProgram(DCP)Class65/2005•DirectorAccreditationProgram(DAP)Class30/2004

Working Experiences in 5 yearsListed Company2010 - Present Acting-President / Intouch Holding Plc.2008 - Present Chairman of Executive Committee / Intouch Holding Plc. Vice-ChairmanofBoardofDirector,Member ofLeadershipDevelopment and Compensation Committee, Member of Nomination and Corporate Governance Committee / Advanced Info Service Plc. 2007 - Present Director / Intouch Holding Plc.2006 - Present Director / Thaicom Plc. 2002 - Present Independent Director, Member of Audit Committee/PowerLineEngineeringPlc.2009 - 2011 Chairman of Executive Committee / Thaicom Plc.

Company Limited / Other Organisation2004-Present Director/Praram9HospitalCo.,Ltd.


Summary Profile of The Directors and Management

Remark : As at 31 December 2014, the number of ordinary shares includes holding by spouse and minor children.


Mr. Aviruth WongbuddhapitakAppointed 12 Jul 2006Age 66 years•ChairmanofSustainableDevelopmentCommittee•MemberofLeadershipDevelopmentand Compensation Committee•IndependentDirector



Highest Education•MasterofBusinessAdministration,NewYorkUniversity,USA Related Training Program held by IOD •DirectorCertificationProgram(DCP)Class8/2001•TheBoard’sRoleinSettingEffectiveCompensationPolicy

Working Experiences in 5 yearsListed Company2013 - Present Chairman of Sustainability Development Committee,MemberofLeadership Development and Compensation Committee, Independent Director / Advanced Info Service Plc.2010-Present IndependentDirector/S&PSyndicatePlc.2003 - Present Director / Thai Plastic and Chemicals Plc.1995 - Present Director and Chairman of the Executive Director / Deves Insurance Plc. 2006 - 2014 Chairman of Audit Committee, Member ofLeadershipDevelopmentandCompensation Committee, Independent Director / Advanced Info Service Plc.2009 - 2011 Independent director and Member of the Audit Committee / Thai Military Bank Plc.

Company Limited / Other Organisation2008 - Present Advisor / Bureau of the Crown Property 2003-Present Director/CPBEquityCo.,Ltd. Director/CPBPropertyCo.,Ltd.


Mrs. Tasanee ManorotAppointed 24 Apr 2006Age 69 years•MemberofAuditCommittee•MemberofSustainableDevelopmentCommittee•IndependentDirector

Share Ratio (%)* None Relationship with Management None

Highest Education•BachelorofCommerceandAccountancy, Chulalongkorn University Related Training Program held by IOD •DirectorCertificationProgram(DCP)Class32/2003

Working Experiences in 5 yearsListed Company2014 - Present Member of Audit Committee, Member of Sustainability Development Committee Independent Director / Advanced Info Service Plc.2006 - May 2014 Member of Audit Committee, and Independent Director / Advanced Info Service Plc.



034

Mr. Surasak VajasitAppointed 10 May 2006Age 61 years•MemberofAuditCommittee•ChairmanofNominationandCorporateGovernanceCommittee•IndependentDirector



Highest Education•BarristeratLaw,Lincoln’sInn

Related Training Program held by IOD •DirectorAccreditationProgram(DAP)Class29/2004

Working Experiences in 5 yearsListed CompanyFeb2014-Present ChairmanofNominationandCorporate Governance Committee, Member of Audit Committee, Independent Director / Advanced Info Service Plc.2008-Feb2014 MemberofAuditCommittee,Memberof Nomination, Corporate Governance Committee, Independent Director / Advanced Info Service Plc.

Company Limited / Other Organisation2014-Present Managingpartner/Rajah&Team


Ms. Jeann Low Ngiap JongAppointed 27 Mar 2013Age 54 years•Director


Relationship with Management None Highest Education•BachelorofAccountancy,NationalUniversityofSingapore

Related Training Program held by IOD -

Working Experiences in 5 yearsListed Company2013 - Present Director / Advanced Info Service Plc.2008-Present GroupChiefFinancialOfficer/ SingaporeTelecommunicationsLtd.




Mr. Narulcha ChittreekanAppointed 5 Nov 2013Age 57 years•Director



Highest Education•Master of Public Administration, the National Institute of Development Administration (NIDA) Related Training Program held by IOD •DirectorCertificateProgram(DCP)Class162/2012

Working Experiences in 5 yearsListed Company2013 - Present Director / Advanced Info Service Plc.

Company Limited / Other Organisation 2012-Present SeniorExecutiveVicePresident Metropolitan - Business Development / TOT plc.


Mr. Allen Lew Yoong KeongAppointed 20 Mar 2006Age 59 years•ChiarmanofExecutiveCommittee•Director•MemberofLeadershipDevelopmentand Compensation Committee



Highest Education•MasterofScience(Management),MassachusettsInstituteof Technology,USA


Working Experiences in 5 yearsListed Company2008 - Present Chairman of Executive Committee, Director, MemberofLeadershipDevelopment Committee / Advanced Info Service Plc. 2006 - Present Director / Advanced Info Service Plc. Chief Executive Officer (Singapore) / SingaporeTelecommunicationLtd.2012-Sep2014 ExecutiveOfficerGroupDigitalLifeand Country Chief Officer (Singapore) / SingaporeTelecommunicationsLtd.

Company Limited / Other OrganisationOct 2014 - Present Chief Executive Officer Consumer Australia and Chief Executive Officer / SingTel Optus PtyLtd. Illegal Record in past 10 yearsNone


036

Mr. Ng Ching-WahAppointed 10 Feb 2014Age 65 years•Director•MemberofExecutiveCommittee



Highest Education•BachelorofArtinBusinessAdministration, ChineseUniversityofHongKong


Working Experiences in 5 yearsListed Company2008 - Present Director and Member of Executive Committee / Advanced Info Service Plc.2007 - Present Independent Director / PacificTextilesHoldingsLtd.2011-2012 Director/ChinaDigitalTVGroupHoldingLtd.2007 - 2010 Independent Director / HKCInternationalHoldingsLtd.

Company Limited / Other Organisation2012 - Present Member of the Communication Authority / Communication Authority (CA)2007-Present Director/ConvenientPowerHongKong


Mr. Krairit EuchukanonchaiAppointed 26 Mar 2014Age 60 years•ChairmanofAuditCommittee•MemberofNominationandCorporate Governance Committee•IndependentDirector



Highest Education•MasterofBusinessAdministration,NorthTexasState University,USA

Related Training Program held by IOD •DirectorCertificationProgram(DCP)Class59/2005•RoleoftheChairmanProgram(RCP)Class16/2007

Working Experiences in 5 yearsListed Company2014 - Present Chairman of Audit Committee, Member of Nomination and Corporate Governance Committee, Independent Director / Advanced Info Service Plc.2011 - 2012 Director and Member of Audit Committee / PTT Plc.2006 - 2012 Chairman of Board and Chairman of Risk ManagementCommittee/KrungthaiAsset Management Plc.

Company Limited / Other Organisation1998-Present Chairman/VGroupHondaCarCo..Ltd. Illegal Record in past 10 yearsNone



Mr. Somchai LertsutiwongAppointed as Director on 27 Jun 2014Age 52 years•Director •ChiefExecutiveOfficer•MemberofSustainable •AuthorizedDirector Development Committee•MemberofExecutiveCommittee

Share Ratio (%)* 0.0027


Highest Education•Master ofBusinessAdministration,ChulalongkornUniversity Related Training Program held by IOD •DirectorCertificationProgram(DCP)Class114/2009

Working Experiences in 5 yearsListed Company2014 - Present Director, Member of Sustainability Development Committee, Member of Executive Committee, Chief Executive Officer, Authorized Director and Chief Marketing Officer / Advanced Info Service Plc. Jun 2014 - Jul 2014 Director, Chief Marketing Officer / Advanced Info Service Plc.2012 - Jul 2014 Chief Marketing Officer / Advanced Info Service Plc.2007-2012 ExecutiveVicePresident-Marketing/ Advanced Info Service Plc.


Mr. Kim SiritaweechaiAge 46 years•MemberofExecutiveCommittee


Relationship with Management None Highest Education•MasterofBusinessAdministration,ThammasatUniversity

Related Training Program held by IOD •DirectorCertificationProgram(DCP)Class116/2009

Working Experiences in 5 yearsListed Company2014-Present ExecutiveVicePresident-Portfolio Management / Intouch Holding Plc.2010 - Present Member of Executive Committee / Advanced Info Service Plc.2011-2014 SeniorVicePresident-PortfolioManagement/ Intouch Holding Plc.2008-2011 VicePresident-PortfolioManagement/ Intouch Holding Plc.

Company Limited / Other Organisation2014-Present Director/I.T.ApplicationsandServicesCo.,Ltd2013-Present Director/IntouchMediaCo.,Ltd Director/TouchTVCo.,Ltd2012-Present Director/OokbeeCo.,Ltd.



038

Mrs. Suwimol KaewkoonAge 59 years•ChiefOrganizationDevelopmentOfficer



Highest Education•MasterofBusinessManagement,AsianInstituteof Management, Philippines


Working Experiences in 5 yearsListed Company2013 - Present Chief Organization Development Officer / Advanced Info Service Plc.2007 - Present Member of Executive Committee / Intouch Holding Plc.2007 - 2012 Chief Customer Officer / Advanced Info Service Plc.


Mrs. Suphajee Suthumpun Age 50 years•MemberofExecutiveCommittee



Highest Education•MasterofBusinessAdministration,InternationalFinanceand InternationalAccounting,NortthropUniversityCalifornia,USA


Working Experiences in 5 yearsListed Company2012 - Present Chairman of Executive Committee / Thaicom Plc.2011 - Present Member of Executive Committee, Member of Strategic and Organizational Review CommitteeandChairmanofMedia&New Business / Intouch Holding Plc. Director, Chief Executive Officer / Thaicom Plc. Director, Chairman of Executive Committee, Chairman of Remuneration Committee, Chairman of Nomination and CG Committee / CSLoxInfoPlc. Member of Executive Committee / Advanced Info Service Plc.Aug - Dec 2011 Member of Executive Committee / Thaicom Plc.2010 - 2011 General Manager, Global Technology Services / IBM ASEAN2009 - 2010 Client Advocacy Executive, Chairman’s Office / IBM Headquarters




Mrs. Vilasinee PuddhikarantAge 59 years•ChiefCustomerOfficer



Highest Education•BachelorofEconomics,EastTexasStateUniversity


Working Experiences in 5 yearsListed Company2013 - Present Chief Customer Officer / Advanced Info Service Plc.2012 - Present Advisor - Customer Service / Airports of Thailand Plc.2006-2012 ExecutiveVicePresident-Customerand Service Management / Advanced Info Service Plc.


Mr. Hui Weng CheongAge 59 years•ChiefOperatingOfficer



Highest Education•MasterofBusinessAdministration,Universityof SouthernCalifornia,USA


Working Experiences in 5 yearsListed Company2013 - Present Chief Operating Officer / Advanced Info Service Plc.2010 - 2012 CEO International / Singapore TelecommunicationsLtd.2009 - 2010 Chief Operating Officer / Advanced Info Service Plc.



040

Mr.Kriengsak WanichnateeAge 54 years•ChiefTechnologyOfficer



Highest Education•MasterofScienceinElectricalEngineering,Universityof SounthernCalifornia,USA Related Training Program held by IOD -

Working Experiences in 5 yearsListed Company2013 - Present Chief Technology Officer / Advanced Info Service Plc.2012-2013 ExecutiveVicePresident-MobileNetwork Implementation / Advanced Info Service Plc.2006-2011 ExecutiveVicePresident-Nationwide Operations and Support / Advanced Info Service Plc.


Mr. Pong-amorn NimpoonsawatAge 52 years•ChiefFinanceOfficer



Highest Education•MasterofManagement,SasinGraduateInstituteofBusiness AdministrationChulalongkornUniversity


Working Experiences in 5 yearsListed Company2001-Present ChiefFinanceOfficer/ Advanced Info Service Plc.




Mr. Chavin ChaivatcharapornAppointed 3 Jan 2013Age 42 years•CompanySecretary



Highest Education•MasterofLaw(LL.M),UniversityofPennsylvania,USA

Related Training Program held by IOD •RoleoftheCompensationCommittee(RCC)•DirectorCertificationProgram(DCP)192/2014•RoleofChairman(RCP)•Anti-CorruptionforExecutiveProgram(ACEP)10/2014•FundamentalPracticeforCompanySecretay(FPCS29/2014)•CompanySecretaryProgramClass51/2013

Working Experiences in 5 yearsListed Company2013 - Present Company Secretary / Advanced Info Service Plc. 2010-2013 AssistantVicePresident-Legal/Advanced Info Service Plc.

Company Limited / Other Organisation2003-2010 Associate/Hunton&WilliamsThailandLtd.


Ms.Nattiya PoapongsakornAppointed 1 Apr 2013Age 39 years•AssistantVicePresident,InvestorRelations



Highest Education•MasterofTechnologyManagement,WashingtonState University,USA •MasterinFinance,ChulalongkornUniversity


Working Experiences in 5 yearsListed Company2013-Present AssistantVicePresident,InvestorRelations/ Advanced Info Service Plc.2011-2013 ActingAssistantVicePresident,Investor Relations / Advanced Info Service Plc.2008 - 2011 Investor Relations Manager / Advanced Info Service Plc.


Company Secretary, Head of Internal Auditand Head of Compliance

Mrs.Suvimon KulalertAppointed 1 Jan 1999Age 54 years•ChiefAuditExecutive



Highest Education•MasterofBusinessAdministration,TrackManagement InformationSystem,OklahomaCityUniversity,USA•ProfessionalCertifiedPublicAccountant,CertifiedInternal Auditor, Certificate in Risk Management Assurance


Working Experiences in 5 yearsListed Company1999 - Present Chief Audit Executive / Advanced Info Service Plc.



042

Name and Position

Ordinary share

Ordinary share

Ordinary share

Ordinary share

Ordinary share

ESOP(warrants)6)

Gra

nt (+

)

31/1

2/20

14

31/1

2/20

14

31/1

2/20

14

31/1

2/20

14

31/1

2/20

14

31/1

2/20

14

31/1

2/20

13

31/1

2/20

13

31/1

2/20

13

31/1

2/20

13

31/1

2/20

13

31/1

2/20

13

Buy(

+)/

Sell(

-)

1. Mr. Vithit Leenutaphong1) Chairman of the Board of Directors

2. Mr. Somprasong Boonyachai Vice-ChairmanoftheBoardofDirectors

3. Mr. Krairit Euchukanonchai2)

Independent director and Chairman of audit committee

4. Mrs. Tasanee Manorot Independent director and Member of audit committee

5. Mr. Surasak Vajasit Independent director and Member of audit committee

6. Mr. Aviruth Wongbuddhapitak3)

Independent director

7. Mr. Allen Lew Yoong Keong Director and Chairman of executive committee

8. Ms. Jeann Low Ngiap Jong Director

9. Mr. Ng Ching-Wah Director and Member of executive committee

10. Mr. Narulcha Chittreekan Director

11. Mr. Somchai Lertsutiwong4)

Director, Member of executive committee, and Chief executive officer (Present)

12. Mr. Wichian Mektrakarn5) Director, Member of executive committee, andChiefexecutiveofficer(Former)

13. Mr. Kim Siritaweechai Member of executive committee

14. Mrs. Suphajee Suthumpun Member of executive committee

15. Mrs. Suwimol Kaewkoon Chief Organization Development Office

16. Mr. Hui Weng Cheong Chief Operating Officer

17. Mrs. Vilasinee Puddhikarant Chief Customer Officer

18. Mr. Pong-amorn Nimpoonsawat ChiefFinanceOfficer

19. Mr. Kriengsak Wanichnatee Chief Technology Officer

ADVANC AIR DPC ADC ACC

- - - - - - - - - - - - - -

- - - - - - - - - - - - - -

- - - - - - - - - - - - - -

- - - - - - - - - - - - - -

- - - - - - - - - - - - - -

- - - - - - - - - - - - - -

- - - - - - - - - - - - - -

- - - - - - - - - - - - - -

- - - - - - - - - - - - - -

- - - - - - - - - - - - - -

80,126 - 80,126 49,640 29,816 19,824 - - - - - - - -

17,025 - 17,025 72,600 42,700 29,900 - - - - - - - -

- - - - - - - - - - - - -

- - - - - - - - - - - - - -

105,357 +1,000 104,357 45,180 27,116 18,064 - - - - - - - -

- - - - - - - - - - - - - -

3,327 - 3,327 50,580 29,816 20,764 - - - - - - - -

60,000 - 60,000 51,480 29,816 21,664 - - - - - - - -

- - - 38,780 31,216 7,564 - - - - - - - -

SBN SuperBroardbandNetworkCompanyLimited AIN AINGlobalCommCompanyLimited WDS WirelessDeviceSupplyCompanyLimitedAWN AdvancedWirelessNetworkCompanyLimitedMMT MIMOTechCompanyLimited FXL FaxLiteCompanyLimited ABN AdvancedBroadbandNetworkCompanyLimited

ADVANC AdvancedInfoServicePublicCompanyLimited AIR AdvancedInternetRevolutionCompanyLimitedDPC DigitalPhoneCompanyLimitedADC Advanced Datanetwork Communications CompanyLimited ACC AdvancedContactCenterCompanyLimitedAMP AdvancedMPayCompanyLimitedAMC AdvancedMagicCardCompanyLimited

Abbreviation Company Abbreviation Company

Directors and Management’s Shareholdingin The Company and SubsidiariesAs of 31 December 2014, The number of ordinary share and debenture includes holding by spouse and minor child


Ordinary share

Ordinary share

Ordinary share

Ordinary share

Ordinary share

Ordinary share

Ordinary share

Ordinary share

Ordinary share

31/1

2/20

14

31/1

2/20

14

31/1

2/20

14

31/1

2/20

14

31/1

2/20

14

31/1

2/20

14

31/1

2/20

14

31/1

2/20

14

31/1

2/20

14

31/1

2/20

13

31/1

2/20

13

31/1

2/20

13

31/1

2/20

13

31/1

2/20

13

31/1

2/22

013

31/1

2/20

13

31/1

2/20

13

31/1

2/20

13

AMP AMC SBN AIN WDS AWN MMT FXL ABN

- - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - -

Notes: 1)AppointedasChairmanoftheBoardofDirectorinreplacementofDr.PaiboonLimpaphayom,effectivefrom11February20142)AppointedasDirectorinreplacementofDr.PaiboonLimpaphayomwhoresignedandappointedasChairmanoftheAuditCommitteeinreplacementofMr.AviruthWongbuddhapitak, who currently positioned as Chairman of Sustainable Development Committee. Those 2 positions are effective on 26 March 2014 and 6 May 2014 respectively.3) Appointed as Chairman of Sustainable Development Committee, effective from 6 May 20144) To be replacement for Mr. Wichian Mektrakarn as Director and Member of Executive Committee since 27 June 2014 and as Chief Executive Officer since 1 July 20145) Retired from Director and Member of Executive Committee since 27 June 2014 and retired from Chief Executive Officer since 1 July 20146) The change in number of warrant holding is derived from the approval of shareholder’s meeting to issue and allocate ESOP warrants to director and executive - Grant I from the meeting dated 27 March 2013 and Grand II from the meeting dated 26 March 2014. See more details in Page 56

044

Board of Directors

Executive Committee

Chairman of Executive CommitteeMr. Allen Lew Yoong Keong

Chief Executive Officer Mr. Somchai Lertsutiwong 1)

Chief Audit ExecutiveMrs. Suvimon Kulalert

Chief MarketingOfficer

Mr. Somchai Lertsutiwong

Chief OperatingOfficer

Mr. Hui Weng Cheong

Chief TechnologyOfficer

Mr. Kriengsak Wanichnatee

Chief CustomerOfficer

Mrs. Vilasinee Puddhikarant

Chief OrganizationDevelopment OfficerMrs. Suwimol Kaewkoon

Chief FinanceOfficer

Mr. Pong-amorn Nimpoonsawat

Nomination and CorporateGovernance Committee

Leadership Developmentand Compensation Committee

Sustainable DevelopmentCommittee 2)

Audit Committee

Management Structure

Management Structure of Advanced Info Service Public Company LimitedAs of 31 December 2014

Notes : 1) Appointed 1st July 2014 in replacement of Mr. Wichian Mektrakarn who took early retired 2) Appointed 6st May 2014


Mr. VithitLeenutaphong1)

Mr. SomprasongBoonyachai

Mr. AviruthWongbuddhapitak2)

Mrs. Tasanee Manorot3)

Mr. Surasak Vajasit

Ms. Jeann Low Ngiap Jong3)

Mr. Narulcha Chittreekan

•ChairmanofBoard of Directors•ChairmanofLeadership Development and Compensation Committee•AuthorizedDirector

•ViceChairmanof Board of Directors•MemberofLeadership Development and Compensation Committee•MemberofNomination and Corporate Goverance Committee

•IndependentDirector•ChairmanofSustainable Development Committee•MemberofLeadership Development and Compensation Committee

•IndependentDirector•MemberofAudit Committee•MemberofSustainable Development Committee

•IndependentDirector•ChairmanofNomination and Corporate Governance Committee•MemberofAudit Committee

•Director

•Director

10/10 - - 9/9 - -

10/10 - 4/4 9/9 - -

8/10 5/13 - 9/9 - 4/4

9/10 13/13 - - - 4/4

10/10 13/13 4/4 - - -

7/10 - - - - -

5/10 - - - - -

Name Title

Attendant / Total meetings in 2014

Board ofDirectors

AuditCommittee

ExecutiveCommittee

Sustainable Development Committee


LeadershipDevelopment and Compensation

Committee

Board of Directors and Sub-Committees The Company’s management structure comprises the Board of Directors and five sub-committees: Audit Committee, Leadership Development and Compensation Committee, Nomination and Corporate Governance Committee, Sustainability Development Committee, and Executive Committee. The names of their members and directors as well as their meeting attendance information in 2014 is listed in the following table:

046

6/10 - - 7/9 14/14 -

9/10 - - - 12/14 -

7/10 8/13 2/4 - - -

4/10 - - - 8/14 2/4

6/10 - - - 6/14 1/4

- - - - 7/14 -

- - - - 12/14 -

Name Title

Attendant / Total meetings in 2014

Board ofDirectors

AuditCommittee

ExecutiveCommittee

Sustainable Development Committee


LeadershipDevelopment and Compensation

Committee

Mr. Allen Lew Yoong Keong4)

Mr. Ng Ching-Wah

Mr. Krairit Euchukanonchai5)

Mr. Somchai Lertsutiwong4) 6)

Mr. Wichian Mektrakarn4) 7)

Mrs. Suphajee Suthumpun

Mr. Kim Siritaweechai

•Director•ChairmanofExecutive Committee•MemberofLeadership Development and Compensation Committee

•Director•MemberofExecutive Committee

•IndependentDirector•ChairmanofAudit Committee•MemberofNomination and Corporate Governance Committee

•Director•MemberofExecutive Committee•MemberofSustainable Development Committee•ChiefExecutiveOfficer •AuthorizedDirector

•(Former)Director•(Former)Memberof Executive Committee•(Former)Chief ExecutiveOfficer

•MemberofExecutive Committee

•MemberofExecutive Committee

Notes :1)AppointedtobeChairmanofBoardofDirectorsinreplacementofDr.PaiboonLimpaphayomwhoresigned,effectivefrom11February20142) Mr. Aviruth Wongbuddhapitak resigned from Chairman of the Audit committee to be acted as Chairman of Sustainable Development Committee, effective from 6 May 2014. There were five Audit Committee meetings held before his resignation date.3) Mrs. Tasanee Manorot and Ms. Jeann Low Ngiap Jong are directors who expertise in account and finance. Summary profile of these two directors are shown in page 32-34 4) Mr. Somprasong Boonyachai, Mr. Allen Lew Yoong Keong, Mr. Somchai Lertsutiwong, and Mr. Wichian Mektrakarn are directors who expertise in telecommunication business. Summary profile of these four directors are shown in page 32, 35 and 375) Appointed to be director in replacement of Dr. Paiboon Limpaphayom in the 2014 Annual General Meeting of Shareholdesr held on 26 March 2014. There were three Board meetings held before his appointment date; Appointed to be a member of Audit Committee in replacement of Mr. Aviruth Wongbuddhapitak who resigned, effective from 6 May 2014. There were five Audit Committee meetings held before his appointment date; Appointed to be a member of Nomination and Corporate Governance Committee in replacement of Dr. Paiboon Limpaphayom who resigned, effective from 6 May 2014. There were two Nomination and Corporate Governance committee meetings held before his appointment date; 6)Appointed tobeChiefExecutiveOfficer in replacementofMr.WichianMektrakarnwho tookearly retiredeffective from1 July2014. Appointed tobedirector,memberofexecutive committee, and member of sustainable development committee in replacement of Mr. Wichian Mektrakarn who took early retired effective from 27 June 2014. There were six board meeting held before his appointment date. 7)RetiredfromChiefExecutiveOfficersince1July2014andfromdirector,memberofexecutivecommittee,andmemberofsustainabledevelopmentcommitteesince27June20148)IncaseswhenMs.JeannLowNgiapJongandMr.AllenLewYoongKeongwereunabletoattendthemeeting,theywouldconsiderthematterunderdiscussionandgivetheiropinionvia Video Conference or via the Chairman of the Board of Directors in order to propose their opinions to the meeting.


The Authorized Directors Mr. Vithit Leenutaphong and Mr. Somchai Lertsutiwong together jointly sign with the Company’s seal affixed.

The Board of Directors The Board of Directors is comprised of 11 directors whose expertise and experience cover various fields. At least one director is experienced in the area of telecommunications, and at least one director is experienced in the area of finance and accounting (Detailsareprovidedonpages33-34).Inordertomaintain a balance between the supervisory and management functions of the Company, the Chairman of the Board ofDirectorsmust not hold theChief ExecutiveOfficer position simultaneously. There are 4 independent directors, representing one-third of the members, and 2 female directors sitting on the Board of Directors. The Board of Directors is representative of all shareholders, not of a particular group of shareholders. The Board of Directors has a policy whereby the controlling shareholders of the Company are proportionally represented.

The Scope of Authority and Dutiesof the Board of Directors1. Perform its duties with honesty, integrity and prudence in accordance with the law and the Company’s objectives and Articles of Association including the resolutions of shareholders’ meetings, and carefully protect the Company’s interests;2. Set out the vision, policy and direction of the Company’s operations and supervise the management team to act in accordance with plans which are set out efficiently and effectively, and therebymaximize the economic value and wealth of the Company and its shareholders;3. Consider and approve major issues such as large investments, purchase of assets etc. and any actions / transactions as prescribed by law;4. Approve and/or agree to major related transactions between the Company and its subsidiaries in compliance with the relevant notifications, regulations and guidelines of the Stock Exchange of Thailand;5. AssesstheperformanceoftheChiefExecutiveOfficer and high level executives, and assign appropriate remuneration on a regular basis;

6. Be responsible for overseeing operational results and the management team’s performance to ensure due attentiveness and care;7. Arrange appropriate accounting systems, including the production of financial reports and a reliable auditing system; oversee and monitor the effectiveness and efficiency of the internal control, internal audit and risk management systems;8. Ensure avoidance of conflict of interests amongst the Company’s stakeholders;9. Supervise business operations to enforce ethical work standards;10. Annually review the Company’s corporate governance policy and assess due compliance;11. Report on the execution of the Board of Directors’ responsibility to prepare financial reports, along with the external auditor’s report in the annual report covering key issues according to the Company’s policy statement and the Stock Exchange of Thailand’s Code of Best Practices for Directors of a Listed Company.

Reserved Key Matters for the Board’s Approval Although the Board of Directors has delegated specific powers to Sub-Committees, the Chief Executive Officerandhighlevelexecutives,theBoardofDirectorshasreserveditsauthorizationovercertainmatterssoasto protect the highest interests of the Company and its shareholders, including:

- Strategy, business plan and budget - Capital expenditure and expense which exceeds the approved authority of the relevant sub-committee or executives - Strategic investments in new business and divestments - Significant policies - Material contracts - Material litigation - Dividend policy

Independent Directors shall Possess the Following Qualifications1. Holding shares not exceeding 0.5 per cent of the total number of voting rights of the Company, its parent company, subsidiary, affiliate or juristic person which may have conflicts of interest, including the shares held by related persons of the independent director;

048

2. Neither being nor having been an executive director, employee, staff, or advisor who receives salary, or a controlling person of the Company, its parent company, subsidiary, affiliate, same-level subsidiary or juristic person who may have conflicts of interest. Audit Committee Member who shall be appointed on or after 1 July 2010 shall have ended the foregoing relationship not less than two years prior to the date of appointment;3. Not having any business relationship with the Company, its parent company, subsidiaries, affiliates or juristic persons, which may have any conflict of interest, in any manner that may interfere with his or her independent judgement, and not be, or used to be, a substantial shareholder or controlling person in its parent company, subsidiaries, affiliates or juristic persons, that may create any conflict of interest. Any audit committee member, who may be appointed on or after 1 July 2010, shall have ended the foregoing relationship not less than two years prior to the date of appointment.

The term ‘Business Relationship’ aforementioned under paragraph one, includes any normal business transaction, rental or lease of immovable property, transaction relating to assets or services or grant or receipt of financial assistance through receiving or extending loans, guarantee, providing assets as collateral, including any other similar actions, which result in the Company or its counterparty being subject to indebtedness payable to the other party in the amount of three percent or more of the net tangible assets of the Company or twenty million Baht or more, whichever is lower. The amount of such indebtedness shall be calculated according to the calculation method for value of connected transactions under the Notification of the Capital Market Supervisory Board Re: Rules on Connected Transactions mutatis mutandis. The consideration of such indebtedness shall include indebtedness taking place during the course of one year prior to the date on which the business relationship with the person commences;4. Not being a person related by blood or registration under laws, such as in the manner of father, mother, spouse, sibling, and child, including spouse of the children, executives, major shareholders, controlling persons, or persons to be nominated as executive or controlling persons of the Company or its subsidiary;

5. Not being a director who has been appointed as a representative of the Company’s director, major shareholder or shareholders who are related to the Company’s major shareholder;6. Neither being nor having been an auditor of the Company, its parent company, subsidiaries, affiliates or juristic persons which may have any conflict of interest and not having been a substantial shareholder, controlling person or partner of an audit firm which employs auditors of the Company, its parent company, subsidiaries, affiliates or juristic persons which may have any conflict of interest. Any audit committee member, who may be appointed on or after 1 July 2010, shall have ended the foregoing relationship not less than two years prior to the date of appointment;7. Neither being nor having been any professional advisor including legal advisor or financial advisor who receives an annual service fee exceeding two million Baht from the Company, its parent company, subsidiaries, affiliates or juristic persons which may have any conflict of interest, and not having been a substantial shareholder, controlling person or partner of the professional advisor. Any audit committee member who may be appointed on or after 1 July 2010, shall have ended the foregoing relationship not less than two years prior to the date of appointment;8. Not conducting any business of the same nature as the Company’s or its subsidiaries’ businesses and is in competition with them in any material respect, nor being a substantial partner, shareholder holding more thanone (1) percentof the voting shares, director (havingmanagement role), employee, officer or advisor(obtainingaregularsalary)ofanycompany whose business is of the same nature as the Company’s or its subsidiaries’ businesses, and is in competition with them in any material respect;9. Not having any other manners, which may render him or her incapable of expressing independent opinions with regard to the Company’s business affairs;

After having been appointed as an independent director with qualifications complying with the criteria under 1 to 9, the independent director may be assigned by the Board to take part in the business decisions of the Company, its parent company, subsidiary, affiliate, same-level subsidiary or legal entity who may have a conflict of interest, on condition that these decisions must be collective ones.


The Segregation of Duty of the Board of Directors and Management The Board of Directors governs the operations of the Company in accordance with the provisions of the law, the Company’s objectives, articles of association, the resolutions of the shareholders’ meetings, and the CorporateGovernancePolicy.IngoverningtheCompany,the directors must exercise their business judgement and act in what they reasonably believe to be the best interests of the Company and its shareholders.

The Management is responsible for implementing the Company’s strategy, achieving the planned objectives, and handling the day-to-day administration and affairs of the Company.

The Segregation of Duty of Chairman of the Board of Directors and Chief Executive Officer Both the Chairman of the Board of Directors and the Chief ExecutiveOfficermust be competent and havethe appropriate experience and qualifications for their positions. In order tomaintain a balancebetween the supervisory and management functions of the Company, one person cannot hold both of these positions simultaneously.

The Chairman of the Board of Directors is a non-executive director and the leader of the Board of Directors. He also has the following duties:

1. Oversee and act as the link between theBoardof Directors and the Committees to ensure that they function effectively, and encourage directors to improve their required knowledge and skills;2. ConsultwiththeChiefExecutiveOfficerandCompany Secretary to arrange the schedule and agendas of the Board of Directors’ meetings;3. Chair and conduct the meetings of the Board of Directors and shareholders, and encourage all board members and/or shareholders to debate issues vigorously during meetings, ask questions and express opinions;4. Ensure that the Company has effective communication with its shareholders, the public and the government;5. Encourage constructive relations within the Board of Directors and between the Board of Directors and

management. Inthisregard,theChairmanandthe ChiefExecutiveOfficershallinteractonbuildinggood corporate governance and efficient corporate admin istration in order to implement the Company’s strategies, policies and directions, and achieve the planned objectives approved by the Board of Directors.

TheChiefExecutiveOfficeristheheadandleaderofthe Company’s executives and responsible to the Board of Directors for managing the Company in order to achieve all strategies, policies, objectives and budgets approved bytheBoardofDirectors.TheChiefExecutiveOfficerhasthe scope of authority in accordance with provisions of the law, the Company’s objectives, articles of association, and resolutions of the Board of Directors and shareholders’ meetings.

The Scope of Authority and Duties of the Sub-Committees

The Scope of Authority and Duties of the Audit Committee 1. Review the accuracy of the Company’s financial reports in accordance with legally defined accounting principles, and to ensure that there is adequate disclosure;2. Review the Company’s internal control system and internal audit system to ensure that they are suitable and efficient, to determine the internal audit unit’s independence, as well as to approve the appointment, transfer, dismissal, performance appraisal and remunerationoftheChiefofInternalAudit;3. Review the Company’s compliance with the law on securities and exchange, SET’s regulations, and the laws relating to the Company’s business;4. Consider, select and nominate an independent person to be the Company’s external auditor, and propose the auditor’s remuneration. The Audit Committee shall hold the meeting with the external auditor without management in attendance, at least once a year;5. Review the policy on the engagement of an external audit firm to provide non-audit services for the Company;6. Review all Connected Transactions, or any transactions that may lead to conflicts of interests, to ensure that they are in compliance with the laws and regulations

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of the SET, and are reasonable and beneficial to the Company;7. Review whether the Company has established an appropriate and effective risk management system;8. Review and approve theCharter of InternalAudit activities,annualauditplanandactivitiesofInternal Audit, and coordinate with the external auditor;9. Prepare, and disclose in the Company’s annual report, the Audit Committee’s report which must be signed by the Audit Committee’s Chairman and consist of at least the following information:

(1)Anopinionon the accuracy, completeness and creditability of the Company’s financial report; (2)Anopinionon theadequacyof theCompany’s internal control system; (3)Anopinionon thecompliancewith the lawon securities and exchange, SET’s regulations, or the laws relating to the Company’s business; (4)Anopiniononthesuitabilityoftheauditor; (5)Anopiniononanytransactionsthatmayleadto conflicts of interests; (6)ThenumberofAuditCommitteemeetings,andthe attendance of such meetings by each committee member; (7)Anopinionoroverviewcommentreceivedbythe Audit Committee regarding its performance of duties in accordance with the charter; and (8)Othertransactionswhich,accordingtotheAudit Committee’s opinion, should be known to the shareholders and general investors, subject to the scope of duties and responsibilities assigned by the Company’s Board of Directors; 10. Continue the inspection when the external auditor informs of any suspicious circumstance whereby the director, manager or any person responsible for the operation of such juristic person commits an offence under the Security and Exchange Act, and the Audit Committee shall report the result of preliminary inspectiontotheOfficeoftheSecuritiesandExchange Commission and the external auditor within thirty days from the date reported by the external auditor;11. Report the performance of the Audit Committee to theBoardofDirectorsat leastfourtimesayear. In its performance of duties, if it is found or suspected that there is a transaction or any of the following acts which may materially affect the Company’s financial

condition and operating results, the Audit Committee shall report it to the Board of Directors for rectification within the period of time that the Audit Committee deems fit;

(1)Any transactionwhich causes any conflict of interest; or (2)Any fraud, irregularity, ormaterial defect in an internal control system; or (3)Any infringement of the law on securities and exchange, SET’s regulations, or any law relating to the Company’s business,

IftheCompany’sBoardofDirectorsormanagement fails to make a rectification within the period of time specified under the first paragraph, any Audit Committee member may report on the transaction or act under the first paragraph to theOffice of the Securities and Exchange Commission or SET;12. Have the authority to invite concerned executives, management and officers of the Company to express opinions, attend meetings or deliver documents as deemed necessary;13. Engage consultants or independent persons to provide opinions, advice or work, if necessary;14. Review the Company’s compliance with Reporting and Investigation ofMisconduct and Fraud and Whistleblower Protection Policy, and consider all concerns of misconduct or fraud and the final investigation report quarterly, and be one channel to receive complaints according to such policy;15. Review and evaluate the scope of the performance of the Audit Committee on an annual basis;16. Review this charter annually and make proposals to the Board of Directors for approval if changes are needed; and17. Perform other duties as assigned by the Board of Directors of the Company with the consent of the Audit Committee.

The Scope of Authority and Duties of the Leadership Development and Compensation Committee1. Fixappropriateannualremunerationinmonetaryand/ or non-monetary form for the Board of Directors, committee members, and high level executives for the benefit of shareholders as a whole;


2. Prepare policy and guidelines to designate appropriate remuneration of the Board of Directors and high level executives to be proposed to the Board of Directors and/or the shareholders’ meetings for approval;3. Review and approve the Company’s performance in order to determine the annual KPI bonus and merit-based salary increase across the Company;4. ConsiderandapprovetheLongTermIncentivePlan and related practices;5. Consider and approve the performance evaluation oftheChiefExecutiveOfficeroftheCompanyandits subsidiaries and those high-level executives who report directly to theChief ExecutiveOfficer in order to determine their bonus, merit-based salary increase and long term incentives;6. Consider and approve the annual bonus allocation of the Board of Directors;7. Disclose policies governing the directors’ remuneration including principles/purposes and objectives in the annual report;8. InconjunctionwiththeChiefExecutiveOfficer,identify and evaluate potential successors for the Chief ExecutiveOfficer position of theCompany and its subsidiaries and those high level executives who report directly to theChief ExecutiveOfficer, and report annually to the Board of Directors on executive succession planning; 9. InconjunctionwiththeChiefExecutiveOfficer,intro duce succession planning policies for the Chief ExecutiveOfficer position of theCompany and its subsidiaries and those high level executives who report directlytotheChiefExecutiveOfficer;10.Oversee the annual performance reviewevaluation processfortheChiefExecutiveOfficerandexecutives;11. Engage consultants or independent persons to provide opinions or advice if necessary, especially on leadership development;12. Be accountable to the Board of Directors and under obligation to explain its decisions at the shareholders’ meetings, and answer any questions that may arise;13. Review and reassess the adequacy of this charter and recommend any proposed changes to the Board of Directors for approval;14. Regularly report the performance of the Audit Committee to the Board of Directors as well as any material issues that merit the Board of Directors’ attention;

15. Have the authority to invite concerned management, executives and officers of the Company to express opinions, attend meetings or deliver documents as deemed necessary; and16. Take any other action that may from time to time be assigned or delegated to the Committee by the Board of Directors.

The Scope of Authority and Duties of the Nomination and Corporate GovernanceCommittee1. Designate criteria and policy with respect to the nomination of Board members and committee members of the Company; 2. Supervise implementation of the policy on the good corporate governance of the Company, annually review such policy including making recommendations of any revision thereof for further consideration by the Board of Directors; 3. Consider and nominate appropriate persons to become Board members and/or committee members to be proposed to and approved by the Board of Directors and/or at shareholders’ meetings, as the case may be; and4. Perform other tasks as designated by the Board of Directors.

The Scope of Authority and Duties of the Sustainable Development Committee1. Define policy, strategy, operating target and sufficient budget including any other relevant action in connection with sustainability development and propose to the Board of Directors for approval;2. Propose any material issues of the Company in connection with sustainability development to the Board of Directors for consideration;3. Ensure that the implementation of sustainability development policy and strategy meets the target;4. AdviseandassisttheChiefExecutiveOfficerconcerning the sustainability development operations; 5. Report the sustainability development performance to the Board of Directors;6. Review the sustainability development report and make proposals to the Board of Directors for approval; 7. Perform other tasks as designated by the Board of Directors.

052

Management Team1)

Notes :1) List of Management Team members as at 31 December 2014 was prepared in accordance withtheirdefinitionsasstipulatedinthenotificationoftheOfficeofSecuritiesandExchange Commission. 2)AppointedtobeChiefExecutiveOfficerinreplacementofMr.WichianMektrakarnwhotook early retired effective from 1 July 2014.

Nomination of Directors and ManagementCriteria and Procedure for Director Nomination 1. The Nomination and Corporate Governance Committee is responsible for identifying and selecting qualified candidates to be appointed by the Board of Directors or proposed through the Board of Directors for election at the shareholders’ meetings in accordance with the Company’s Articles of Association. To identify director candidates, the Nomination and Corporate Governance Committee may use the following sources:

- Nominations made by minority shareholders of qualified candidates for election as directors; - Recommendations from current board members and professional search firms; -TheIODdirectorpool;2. The Nomination and Corporate Governance Committee is responsible for annually reviewing the skills and characteristics required of directors in the light of the Board of Directors’ compositions and the Company’s current and future business directions. The Committee must develop a skill matrix to identify gaps in the Board of Directors’ current profile and make recommendations accordingly. In conducting this

Mr. Allen Lew Yoong Keong Chairman of Exceutive Committee

Mr. Somchai Lertsutiwong2) ChiefExecutiveOfficer ChiefMarketingOfficer

Mrs.SuwimolKaewkoon ChiefOrganization DevelopmentOfficer

Mrs.VilasineePuddhikarant ChiefCustomerOfficer

Mr.HuiWengCheong ChiefOperatingOfficer

Mr. Pong-amornNimpoonsawatChiefFinanceOfficer

Mr.KriengsakWanichnatee ChiefTechnologyOfficer

The Scope of Authority and Duties of theExecutive Committee1. Formulate the Company’s strategic direction, management structure, and annual business plan and budget for the Board of Directors’ approval;2. Monitor the Company’s financial and operating results, and keep the board members informed by monthly report;3. Review and approve all transactions concerning investments and disposal of assets, human resource management, finance and treasury, general administration and any other transaction related to the Company’s business within the limits of authorizationgrantedbytheBoardofDirectors;4. Delegate the Committee’s authority to any member of the management or staff as it deems appropriate. However, such authority does not permit the Committee or appointed persons to approve any transaction between them or related persons having mutualbenefitsorconflictsofinterest(asprescribed in the Company’s Articles of Association and Notifications of the Securities and Exchange Commission). The approval for transactions shall be made in accordance with the policies and principles already determined by the Board of Directors and regulatory bodies; 5. Report to the Board of Directors on a quarterly basis regarding the material actions taken by the Committee under the Chairman of the Executive Committee Report agenda;6. Annually evaluate its own performance and assess the adequacy of this Charter which may be simultaneous with the performance evaluation of the Board of Directors and other Sub-Committees; and 7. Take any other action that may from time to time be assigned or delegated to the Committee by the Board of Directors.

In addition to the Board of Directors and the Sub-Committees, the Company supports the performance of the Board of Directors with the following management team:


review, the Committee will also consider required skills and capabilities as well as diversity in term of skills, experience, knowledge, independence, age, and gender. 3. In determiningwhether to recommend a director for re-election, the Nomination and Corporate Governance Committee will consider relevant factors such as the director’s performance, history of attendance at and participation in meetings, and other contributions to the activities undertaken by the Board of Directors. In the case of independent directors, their respective independence qualifications shall also be considered.

The appointment of the Board members shall comply with the Company’s Articles of Association and all relevant laws. Selection of the directors shall be transparent and clear.4. Intheshareholders’meeting:

(1)Eachshareholdershallbeentitledtoonevotefor each shareholding; (2)Eachshareholdershallbeentitledtocastallthe votesasdefinedunder(1)toelectoneorseveral personstobetheCompany’sdirector(s)butcannot split their votes for any particular person or persons; (3)Personswhoreceivethehighestnumberofvotes, arranged in order from highest to lowest in a number equal to that of the number of directors to be appointed, are elected to be the Company’s directors. In theeventofa tieata lowerplace, which would make the number of directors more than required, the Chairman of the meeting shall have the casting vote.

Inthecaseofavacancyinthepositionofdirector,forreasons other than the completion of the term, the Board of Directors shall appoint a new director, with the required qualifications, and without any characteristics that would prohibit him/her from acting as director, to serve as a new director in the next board meeting, excluding such case where the remaining term is less than two months. Such appointed director shall assume the position for the remaining term of the vacating director. To approve such new director appointment, a resolution must be passed by not less than three-fourths of the total remaining directors.The Company provides an opportunity for minority shareholders to nominate qualified candidates for election as the Company’s directors in advance, at least

three months prior to the fiscal year end date. The information is published as an SET Announcement and on the Company’s website and includes the criteria and considerationprocedure.In2014,nominorityshareholdernominated a candidate for directorship.

Nomination of Management The Nomination and Corporate Governance Committee shall nominate the suitable person(s) to be appointedas theChief ExecutiveOfficer andothermanagement positions which report directly to the Chief Executive Officer, including thepreparationof a successionplanrelating thereto. In this regard, the Nomination andCorporate Governance Committee shall seek to recruit thequalifiedperson(s)eitherinternallyorexternallywithsupport from professional consultants if required.

Inaddition,theCompanyshallpreparethesuccessionplanofthehighlevelexecutives(AVPup)byidentifyingthesuitablepersonstoholdsuchpositions,andshallutilizethehuman resource development and management system to preparethesubordinatesforsuccession.In2014,theBoardof Directors agreed with the Leadership Development and Compensation Committee’s recommendations to nominate theChief ExecutiveOfficer according to theCompany’s succession plan in the Board of Directors’ meeting no.5/2014.

Term of DirectorsTerm of Directorship1. According to the Public Companies Act B.E. 2535 and the Articles of Association, at the annual general meeting of shareholders, one-third of the directors shallvacateoffice.Ifone-thirdisnotaroundnumber, the number closet thereto shall be the applicable number. The directors who have held office the longest shall vacate. The vacating directors may be re-elected.

2. Inthecaseofavacancyinthepositionofdirector, for reasons other than the completion of the term, the Board of Directors shall appoint a new director, with the required qualifications and without any characteristics that would prohibit him/her from acting as director, according to article 68 of the Public Companies Act B.E. 2535, to serve as a new director

054

in the next board meeting, excluding such case where the remaining term is less than two months. Such appointed directors shall assume the position for the remaining term of the vacating director.

Term of Membership of Audit Committee1. A Committee Member shall serve for a term as long as they are serving on the Board of Directors. A retiring membermaybere-elected.Foracommitteemember who has completed a total of nine years, or three consecutive terms, the Board of Directors shall review their respective independence qualifications each year.2. A Committee Member who wishes to resign during his or her term of office must give notice to the Chairman of the Board of Directors. The resignation date is effective upon the Company receiving the notice in order that the Board of Directors can appoint aqualifieddirector(s) in replacement.TheBoardof Directors must fill the vacancy within 90 days from the date on which such Committee Member resigned.

In the case that allmembers vacate office except otherwise by reason of disqualification or as prohibited by law, the Audit Committee shall remain in office as necessary until a new Audit Committee is appointed.

Term of Membership of Other Sub-Committees1. Members of the Committees may hold their posts for as long as they are serving on the Board of Directors. Any Member who vacates office at the end of their term may be re-elected.2. In addition to section (1), membership of the Sub-Committees will be automatically cancelled in the following situations:

- Death; - Resignation; - Being disqualified as sub-committee; - Removal from office by resolution of the Board of Directors;

Remuneration for Directors and Management The Company has specified the remuneration for directors at a rate similar to the industry standards, which is considered to be appropriate to retain quality directors within the Company. The remuneration for the directors and management is in accordance with the Company’s operational performance and the performance of the individuals.

The Leadership Development and Compensation Committee will determine necessary and appropriate remuneration in both monetary and non-monetary terms for the Company’s directors, members of the sub-committees, and theChief ExecutiveOfficer, including executives reporting directly to the Chief Executive Officer. Additionally, the Directors’ Compensation Survey published bytheStockExchangeofThailandandtheThaiInstituteof Directors Association shall be considered annually.

The remuneration for directors and members of the sub-committees shall be proposed, respectively, to the Board of Directors meeting and the Company’s general shareholders’ meeting, which is held on an annual basis.

Directors’ Remuneration Total monetary remuneration for the Chairman of the Board of Directors, independent directors, and non-executive directors totaling 8 persons was Baht 24.94 million. The remuneration was paid from 2014 operating results as approved by the general meeting of shareholders, held on 26 March 2014, in an amount not exceeding that approved by the shareholders and which was comprised of monthly allowances, meeting allowances and bonus payments. The criteria of payment are the same as those of year 2013.


DirectorMonetary Remuneration (Baht)

Monthly Retainer Meeting Allowance Bonus

Board• Chairman 300,000 x P• Member 75,000 25,000 P

Audit Committee• Chairman 25,000 25,000 P• Member x 25,000 P

Other Sub-Committees• Chairman 10,000 25,000 P• Member x 25,000 P

Directors’ Remuneration for The Year 2014

The remuneration for seven (7) directors in year 2014 is as follows:

Mr. Vithit Leenutaphong 1) • Chairman of the Board of Directors 3,100,000 100,000 2,400,000 51,356

Dr. Paiboon Limpaphayom1) • Chairman of the Board of Directors 264,286 - - - (Former)

Mr. Aviruth Wongbuddhapitak • Chairman of Sustainable 1,007,419 675,000 2,200,000 - Development Committee • Member of Leadership Development and Compensation Committee

Mr. Surasak Vajasit • Chairman of Nomination and 903,387 725,000 1,900,000 42,018 Corporate Governance Committee • Member of Audit Committee

Mrs. Tasanee Manorot • Member of Audit Committee 825,000 675,000 1,900,000 51,356 • Member of Sustainable Development Committee

Mr. Ng Ching Wah • Director 825,000 525,000 1,500,000 51,356 • Executive Committee

Mr. Narulcha Chittreekan • Director 825,000 125,000 1,000,000 -

Mr. Krairit Euchukanonchai2) • Chairman of Audit Committee 885,484 425,000 1,900,000 59,793 • Member of Nomination and Corporate Governance Committee

Total 8,635,576 3,250,000 12,800,000 255,878

Notes :1) Directors who are executives or employees of the Company or its shareholders are not entitled to receive such remuneration. 2) Chairman of the Board of Directors is not entitled to receive an additional monthly retainer or meeting allowance when he or she holds any membership of the sub-committees.

Notes :1) Mr. Vithit Leenutaphon was appointed to be chairman of the board of directors in replacement of Dr. Paiboon Limpaphayom who resigned, effective from 11 February 20142) Mr. Krairit Euchukanonchai was appointed to be director in the 2014 annual general meeting of shareholders, held on 26 March 20143) Others means daily expense allowance (per diem) in the event that they shall travel and perform their duties for the Company’s business which is calculated at the same rate of CEO and in accordance with the Company’s regulation.

NameMonthly Retainer

(Baht)

Meeting Allowance

(Baht)

Position(No. of Attendane)

Bonus from 2014 Operating

Results (Baht)

Others3)

056

The first year of the program in 2013Offerpriceperunit : Baht0(zeroBaht)Term : Not exceeding 5 years from the date of issuance and offeringExercisePrice : Baht206.672pershare(unlessthereisanadjustmenttotheexercisepriceas prescribed under the terms and conditions of the warrants)1st Period of Exercise Date : 1 June 2016, be entitled to exercise their rights to purchase 1 time a year

The second year of the program in 2014Offerpriceperunit : Baht0(zeroBaht)Term : Not exceeding 5 years from the date of issuance and offeringExercisePrice : Baht211.816pershare(unlessthereisanadjustmenttotheexercisepriceas prescribed under the terms and conditions of the warrants)1st Period of Exercise Date : 1 June 2017, be entitled to exercise their rights to purchase 1 time a year

Management’s Remuneration The Leadership Development and Compensation Committee shall prepare guidelines and policy to designate appropriate remuneration and consider a long-term incentiveplan for theChiefExecutiveOfficerandhighlevel executives on an annual basis. The remuneration for the management shall be in accordance with the Company’s short-term and long-term operational performance, the performance of the individuals, and leading group standards and guidelines which are considered to be appropriate to motivate and retain quality executives within the Company.

In 2014, the total amount of remunerations for eight (8) executives of themanagement teamwas

calculated at Baht 75.48 million or 1.28% of total amount of remuneration for employees of the Company, and was comprised of salary, bonus and provident fund and other benefits

Other Remuneration To enhance the Company’s sustainability for long-term growth and to promote mutual benefits between the Company, its shareholders and the management team, the Company has issued warrants to be converted into the Company’s ordinary shares to the management. This is pursuant to the Performance Share Plan. The details are as follows:


Company Secretary Mr. Chavin Chaivatcharaporn, appointed as company secretary, shall have the duties and responsibilities as designated by the Board of Directors as follows:

(1)Organizing the Board of Directors’meetings, sub-committee meetings and shareholders’ meetings of the Company (2)OrganizingtheBoardofDirectors’meetingsand shareholders’ meetings of the Company’s subsidiaries (3)Preparing,updatingandpresentingthecorporate governance policy of the Company to the Nomination and Corporate Governance Committee for their approval (4)Preparingandretainingdocumentsasstipulated by laws (5)Performingotherassignmentsasrequestedbythe Board of Directors and/or its sub-committees.

The Amount of Warrants (unit)NameNo. 2013

(Unit)2014(Unit) TotalPercentage of

Total WarrantsPercentage of Total Warrants

1. Mr. Somchai Lertsutiwong 19,824 4.89 29,816 4.38 49,640

2. Mr. Wichian Mektrakarn1) 29,900 7.37 42,700 6.28 72,600

3. Mrs. Suwimol Kaewkoon 18,064 4.45 27,116 3.99 45,180

4. Mrs. Vilasinee Puddhikarant 20,764 5.12 29,816 4.38 50,580

5. Mr. Pong-amorn Nimpoonsawat 21,664 5.34 29,816 4.38 51,480

6. Mr. Kriengsak Wanichnatee 7,564 1.86 31,216 4.59 38,780

Note : 1) Retired since 1 July 2014

Head of Compliance As Head of Compliance, Ms. Nattiya Poapongsakorn is responsible for overseeing the Company’s operations and transactions to ensure that the company is in compliance with SET/SEC regulations for listed companies and other enforcements related to public company limited acts.

Inthisregard,thecredentialsofthecompanysecretaryand head of compliance are provided in page 41.

As defined by the notification of theOffice of Securities and ExchangeCommission, themembers of the management team who were granted the warrants are as follows:

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Corporate Governance

Corporate Governance Policy The corporate governance policy can be divided into 5 categories as follows:

1. Board of Directors2. Rights and Equitable Treatment of Shareholders, and Role of Stakeholders3. DisclosureofInformationandTransparency4. InternalControlandRiskManagementSystems5. Code of Business Ethics

The Company has kept all directors, executives, and employees informed of the corporate governance policy in compliance with good practices since 2002, including communicating the policy to shareholders and outsiders viatheCompany’swebsite(i.e.http://investor.ais.co.th)for their acknowledgement and monitoring of the policy. TheBoardofDirectorshasauthorized theNominationand Corporate Governance Committee to supervise the implementation of the corporate governance policy and annually review such policy so as to incorporate it into the Company’s everyday business operations and in accordance with the rules and regulations of the Securities Exchange of Thailand. The latest revision also complies with the guidelines of the ASEAN CG Scorecard.

The policy has been consistently communicated to directors, executives, and employees for their awareness and to facilitate its incorporation into the Company’s normal business operations. Furthermore, the Company has provided insiders/outsiders with a channel for reporting any illegal activities, acts of misconduct or unethical practices in the Company, while also granting protective measures for whistleblowers in accordance with the Whistleblower Policy.

Performance Report on Corporate Governance Chapter 1 : The Board of Directors TheBoard ofDirectors is composedof eleven (11)legally qualified experts with wide ranging leadership, vision, expertise and experience in various fields including the telecommunications industry. The Board of Directors has the freedom to consider any matter critical to the business direction of the Company. By stipulating that more than one third of the Board of Directors be independent

directors and more than half non-executive directors, the Board of Directors contributes to the absolute benefit of theCompany’sshareholdersasawhole.Inaddition,theChairman of the Board of Directors and Chief Executive Officershallnotbethesamepersonnorhaveanygeneticor business relationship.

The Company has separated the roles and responsibilities of the Chairman of the Board of Directors andtheChiefExecutiveOfficer.Also,keymatterswhichhave a significant impact on business performance require the Board of Directors’ approval.

Details of the names and composition of the Board of Directors, the criteria for selection, nomination process andappointmentofdirectors,definitionofIndependent Directors, and the separation of the roles and responsibilities of the Chairman of the Board of Directors and the Chief ExecutiveOfficerare listedin“ManagementStructure”on page 44.

Independent directors of theCompanymust havethe qualifications prescribed in the corporate governance policy which are beyond the qualifications required by the OfficeofSecuritiesandExchangeCommission.Detailsofthe independent directors’ qualifications are listed in the corporate governance policy posted on the Company’s website(i.e.www.ais.co.th).

TheBoardhassetupfive(5)committees.DetailsofBoard of Directors and committee structure, including membership and the responsibilities of each committee, arelistedinthe“ManagementStructure”sectiononpage44.

Board of Directors’ Meetings The Board of Directors’ meetings are scheduled in advanceannuallyatleasttwo(2)monthsbeforetheyearend so as to ensure that all directors are able to attend all meetings. When deemed necessary, the Chairman of the Board of Directors may call extraordinary meetings. Notice of Board of Directors’ meetings and all supplementary documentation are circulated to the BoardofDirectors at least seven (7) days before each meeting so that each director shall have sufficient time to analyzetheinformationinadvance.


IncaseoftherebeingnoBoardofDirectors’meeting in any particular month, the Company Secretary will provide the Board of Directors with the monthly operating report for their acknowledgement. Details of the meeting attendance are listed in the “Management Structure” section on page 44. The Chairman of the Board of Directors presides over the meetings and ensures that sufficient time is allocated for directors to discuss and express their opinions freely on each item on the agenda. In addition, the relevantmanagement also provides the necessary information for the Board of Directors’ consideration. After each Board of Directors’ meeting, the Company Secretary shall be responsible for circulating the relevant Board of Directors’ minutes within fourteen (14)days.

Non-Executive Directors Sessions The audit committee and other non-executive directors shall conduct meetings without the presence of executives at least once a year. This is to provide an opportunity to discuss any subjects of interest related to the business operations of the Company.

Succession Plan The Board of Directors has developed a succession plan fortheCompany’sChiefExecutiveOfficerandexecutivesin order to maintain the confidence that the Company’s business operations shall continue without interruption when these positions become vacant. The Board of DirectorshasauthorizedtheNominationandCorporate Governance Committee to set up the succession plan which shall be reviewed, updated and reported to the Board of Directors annually.

Communication with Management The Company Secretary shall act as the coordinator between directors and the management team, while the InternalAuditOfficeshallactasthecoordinatorbetweenaudit committee and management team. The Company shall not obstruct communication between directors and management. However, this access and communication shall not interfere with or interrupt the Company’s normal business operations.

Remuneration The remuneration for the Company’s directors shall reflect their duties, responsibilities and contribution, and be comparable to industry standards and companies of asimilarsize,whichalsoreflectstheCompany’soveralloperation performance as well as that of each individual’s performance. The Leadership Development and Compensation Committee will determine adequate and appropriate remuneration for each person and propose this to the Board of Directors and the shareholders on an annual basis for their approval.

Training and Development for Directors, Executives and Company Secretary A newly-appointed director has been provided with all necessary business information about the Company required to perform their fiduciary duties.

The training and development programs, paid for by the Company, have been constantly attended by the directors, senior executives and company secretary to ensure that they have all the necessary skills and knowledge requiredtoperformtheirdutiesefficiently.In2014,thetraining and development programs taken were as follows:

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The Board of Directors’ Self - Evaluation The Board of Directors evaluates its own performance annually in order to assess and improve the directors’ own fiduciary duties and their compliance with corporate governance policy.

• Criterion Theevaluationformconsistsoftwo(2)keycomponents.

Component I : The evaluation is related to the following six(6)aspectsofitsoperation:

- Board of Directors’ structure and qualifications of the Board of Directors; - The roles, duties and responsibilities of the Board of Directors; - Board of Directors’ meetings; - The Board’s performance; - Relationships with management; - Directors’ self-development and executive development.

Component II : The opinions and suggestions provided by the Board of Directors so as to identify special issues in its performance or any aspects of the Company’s operation.

• Procedure The Company secretary will propose the form to directors every year, then gather and report the result of assessment to the Board of Directors for consideration.

DateAttendee Program Facilitator

Chairman of the Board

Company Secretary

June2014(2days)

April2014(2days)

June2014(4days)

July2014(2days)

October2014(2days)

Role of the Chairman

Anti-Corruption Program

FundamentalPracticeforCorporate Secretary

Director Certification

Role of the Compensation Committee

ThaiInstituteofDirectors





Evaluation of the Chief Executive Officer’s Performance The Leadership Development and Compensation Committee is responsible for settingCEOperformancetargets and evaluating performance against the annual targetsinordertodeterminetheCEO’scompensation.

Chapter 2 : Rights and Equitable Treatment of Shareholders, and Role of Stakeholders The Board of Directors respects the shareholders’ rights and has a duty to protect the benefits of every shareholder equitably regardless of whether they are retail, foreign, institutional or major shareholders.

Every shareholder is entitled to the rights and equitable treatment detailed below.

- The right to receive share certificates and to make share transfers, and to be sufficiently informed of operating results and management policy on a timely basis. - The right to receive a share of profit by way of receiving dividend payments equally according to the individual’s shareholdingpercentage. For the holders of Company’s debentures, the Company pays interest in accordance with the interest rate and payment schedule specified in the prospectus. - The right to participate in a meeting, to vote, and to make recommendations on decisions concerning major corporate action.


- The right to elect or dismiss directors. - The right to participate in and be adequately informed on decisions about the Company’s fundamental changes, etc.

Annual General Shareholders’ Meeting TheCompany recognizes the rights and equitabletreatment of shareholders. Accordingly, the Board of Directors ensures that theCompany organizes annualshareholders’ meetings in accordance with the laws, good practice and good corporate governance as follows:

Before the meeting date

1. The shareholders are entitled to propose items for inclusion on the meeting agenda and nominate qualifiedperson(s)tobeconsideredandappointedto bedirectorsattheshareholders’meeting.Forthe2014 annual general shareholders’ meeting, this entitlement wasfrom1October2013to31December2013,three (3) months in advance of the annual general shareholders’ meeting, the rules and procedures of which are posted on the websites of the Stock Exchange of Thailand and the Company. Nonetheless, the Company did not receive any proposed items for inclusion on the agenda nor any director nominations prior to the expiry of the said period.2. The shareholders are entitled to elect members of the Board of Directors, fix directors’ remuneration, appoint the Company’s auditor, fix the auditor’s fee, dividend payments, and other entitlements as stipulated in all relevant law. The Company prepares the meeting notice including the purpose and rationale for each itemof the agenda, Proxy FormB, supplementary documentation, and the procedure for making queries both in Thai and English versions, and posts said information on theCompany’swebsite thirty (30) days prior to the meeting date and also publishes said information on the Stock Exchange of Thailand’s website, including delivering these documents and proxyformstoshareholderstwentyone(21)daysprior to the meeting date.3. The shareholders are entitled to raise questions thirty (30)dayspriortothemeetingdatebypostingtheir questions on the websites of the Company and the Stock Exchange of Thailand.

4. InadditiontoProxyFormBenclosedwiththemeeting notice, theCompany prepares Proxy FormA and ProxyFormC,whichshareholderscandownloadfrom the Company’s website to support the shareholders who cannot attend the meeting themselves by granting proxy to their representatives or an independentdirector.At least two(2) independent directors shall be assigned to take proxy for shareholders who will not attend the meeting. The names, credentials and qualifications of the assigned independent directors will be stated in the meeting notice. 5. The Company liaises with institutional investors at leastfourteen(14)dayspriortothemeetingdateto verify the shareholding data and encourage them toattendthemeetingeitherthroughtheirauthorized representatives or by granting proxy to the assigned independent directors.

On the meeting date

1. The Company encourages the shareholders, including the institutional investors, to attend and participate in all shareholders’ meetings. The annual general meeting of shareholders of 2014 was held at Vibhavadi Ballroom,CentaraGrandCentralPlazaLadpraofrom 2:00 p.m. to 5:00 p.m. The meeting venue was appropriate for the large number of shareholders and convenient in terms of transportation and access. The Company assigned sufficient staff to facilitate the shareholders’ meeting registration with a barcode system and the process to attend the meeting. 2. The Chairman of the Board of Directors, the Audit Committee, the Nomination and Corporate Governance Committee, the Leadership Development and Compensation Committee, and the Executive Committee including senior executives attended the meeting so as to address and clarify any queries or concerns of the shareholders.3. The Company conducted the meeting transparently by inviting an independent legal consultant to supervise the voting. 4. The Chairman presided over the meeting in sequence in accordance with the meeting agenda stated in the meeting notice without adding any additional matters and allocated sufficient time for shareholders to present any queries on each item in the agenda.

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Prior to the onset of the meeting, a company representative explained the meeting procedure and voting method to the shareholders.5. The Company issued voting cards for each item on theagenda.Forthedirectorappointmentitem,the votingrelatedtheretowasorganizedonaone-by-one basis. The barcode system facilitated faster vote counting to speed up the process and also ensure information accuracy and reliability.6. Participants were informed of the voting results for each agenda item and received the voting scores without any objection.7. The Company provided an AGM quality assessment and used a quality assessment score to improve the process and efficiency of the next AGM.

After the meeting

1. The Company notifies the resolutions and voting results of the meeting to the Stock Exchange of Thailand promptly, including posting those resolutions on the Company’s own website.2. The Company secretary prepares the minutes of the meeting and posts them on the Company’s website withinfourteen(14)daysafterthemeetingdate.The minutes cover all material facts in compliance with the good corporate governance of the Stock Exchange of Thailand and such publications are posted on the stock exchange’s website.

Communication with Stakeholders The stakeholders may provide any suggestions or report any illegal or unethical action of any director, executive or employee through:

1. Company Secretary Office AdvancedInfoServicePublicCompanyLimited 414, 28thFloor,IntouchTower, Phaholyothin Rd, Samsen Nai, Phayathai, Bangkok 10400 E-mail : [email protected]

2. Audit Committee E-mail : [email protected]

3. Investor Relations Tel. : (66)22995117 Fax. : (66)22995165 E-mail : [email protected]

All suggestions, complaints or reports shall be forwarded to the related departments and all actions taken shall be reported to the Board of Directors.

Role to Stakeholders The Company is aware of the rights of every group of stakeholders, irrespective of whether they have rights as customers, partners, communities, society, or the environment. As a result, the Company has established a policy of providing guidelines for all stakeholders according to legal rights and sustainable co-existence guidelines in the Company’s sustainability development policy, code of business ethics, and personnel management policy, as well as in a variety of other relevant policies of the Company. Additionally, the Company also designates appropriate guidelines and internal control systems to prevent corruption in the organization, and assignsthe Business Ethic Committee to operate measures or activities for creating the awareness of such matters amongemployeesandpartnersoftheCompany.Inthisrespect, the shareholders can study the guidelines for 4 groups of the Company’s stakeholders - community, partners, employees, and customers - and the guidelines on the environment from the sustainability development report 2014.

Additionally, the Company still places emphasis on the participation of stakeholders in mutually examining the transparency of business operations in compliance with good corporate governance policy and the code of business ethics, inclusive of the guidelines on anti-corruption. If any of theCompany’s employees know of such a violation, he/she can notify the Company via the Ethics online channelor theNokweed system. In the caseofexternal stakeholders, he/she can notify the Board of Directors via the Audit Committee at AuditCommittee @ais.co.th.Inthisregard,thematterssonotifiedshallbefurther brought into the fact-finding processes, and the informant shall receive the best possible protection from the Company. The shareholders can study additional informationfromthe“WhistleblowersPolicy”aspostedon the Company’s website i.e.http://investor.ais.co.th


Chapter 3 : Disclosure of Information and Transparency1. The Company discloses the Company’s financial and non-financial information, such as article of association, memorandum of association, risk management policy, financial statements, and analysis and performance report, in accordance with the relevant laws and regulations accurately, completely, punctually, and transparently to all shareholders and investors. As such, the investors can have confidence in the Company’s reliability and integrity. The Company has issued an information disclosure policy applicable to all directors, executives and employees of the Company and its subsidiaries.2. The Company has set up an Investor Relations Department to be responsible for communicating material information to shareholders, investors, analysts and other stakeholders. In addition, the Companyhas set up aComplianceUnit to ensure that all material information of the Company is properly disclosed through various channels such as the Company’s website, the Stock Exchange of Thailand’s website, and this annual report. The communication and disclosure of material information shall comply with the principles stipulated in the information disclosure policy and corporate governancepolicy.TheInvestorRelationsDepartment can be contacted at:

Tel. :(66)22995014,(66)26153112 Fax. : (66)22995165 E-mail : [email protected] Website : http://investor.ais.co.th

3. The Company has spec ified a pe r iod o f non-communicationwithanalystsandinvestors(silent periods) with respect to financial results, including not holding press conferences or disclosing financial information publicly by executive and/or investor relationofficers,atleastthirty(30)dayspriortothe specified announcement date so as to avoid any unfair treatment and possibly affecting the Company’s share price.

Chapter 4 : Internal Control and Risk Management Systems As the Board considers the internal control, audit and risk management systems crucial for protecting the shareholders’ investment capital and the Company’s assets, it has therefore set up relevant policies, measures and supervising departments, the details of which are listed in the“riskmanagement,internalcontrolandinternalaudit” section on page 70.

Chapter 5 : Code of Business Ethics The Company encourages all directors, managers, and officers to work and conduct business activities transparently and in compliance with laws, business integrity and ethics. The Code of Business Ethics is part of the corporate governance policy which establishes the guidelines and standards of conduct for all employees intheorganization.Employeesarerequiredtosignand acknowledge the code of business ethics upon commencing employment and upon any code revision. In this regard, the shareholders can study the details in the full version of the Code of Business Ethics at http://investor.ais.co.th

The Business Ethics Committee was established in 2006 to oversee the implementation of the Code of Business Ethics and compliance with the Corporate Governance Policy. The Company shall create awareness and conduct campaigns for directors, executives, and employees, who shall operate their work honestly, taking into account the benefitsoftheCompanyanditsstakeholders.In2014,the Business Ethics Committee conducted activities to encourage the compliance of business ethics as follows:

5.1 Make an awareness campaign about conflict of interest for managements, employees and partners

The directors, executives and employees may, from time to time, experience a conflict of interest while performing their duties. As a result, the Business Ethics Committee has set up campaigns so as to encourage executives, employees and business partners to be aware of the importance of business ethics, and to create moral values for employees to consider, based upon their own decision.

064

The campaigns were conducted by way of:

- Giving lectures to executives and employees including providing Q&A sessions in meeting rooms - Communicating with employees via mass communication methods such as posters in the Company’s common areas - Sending letters to business partners to notify them of the Company’s policy in relation to the receipt of gifts and the participation in business social events

Thereafter, the Business Ethics Committee has assessed the effectiveness of the campaign by requesting executives and employees to complete tests via the intranet so that the campaigns in relation thereto could be improved in the future.

Further, the Business EthicsCommittee has set up a channel so as to address and clarify any queries concerning the business ethics of the Company. The employees can contact the committee by e-mail at [email protected]

• Investigation and punishment

Enforcing a Code of Business Ethics is very important; good governance practices are an essential part of the successful running of the business. The Committee has established appropriate punishment for offenders and ensured protection of the identity of any person reporting an act of unethical conduct. In 2014, there is only 1breached case against code of business ethics, decreased by 2 cases in previous year. Detail is shown below:

Unethical ConductCase Action

1. Accepting a gift of more than the nominated value from a customer, failing to hand over the gift to the Company, and failing to report the incident to a superior.

After investigation by the Business Ethics Committee, Internal Audit , and Human Resources Management, disciplinary punishment was imposed in accordance with the Company’s regulations.


Participation in Thailand’s Private Sector Collective Action againstCorruption - CAC On December 16, 2013, the Company signed Thailand’s Private Sector Collective Action Coalition againstCorruption(CAC)tojointlydeclareitsintentionto counter corruption and not to accept any dishonesty in consequence of the Company’s business operations or theoperations in theorganization.TheCompanyaimsto operate its businesses with honesty and transparency in compliance with laws related to anti-bribery and anti-corruption and with the good corporate governance policyoftheCompanybecauseorganizationalcorruptionis a risk to the sustainable growth of business operations. The Company is aware of anti-corruption in every form without exception and shall not participate in corruption, either directly or indirectly. Every director, executive, and employee of the Company shall adhere to and comply withtheanti-corruptionpolicy.Inaddition,theCompanyalso arranges campaigns and communicates appropriate knowledge to the related parties both inside and outside theorganizationinacontinuousmannerviatheBusinessEthics Committee. At present, the Company’s application for a certificate of membership is formally under the process of consideration.

Monitoring the Business Operations of Subsidiaries and Associated Companies The Board of Directors has appointed directors in its subsidiaries proportionate to the number of shares held for the purpose of monitoring each subsidiary’s business operations for the best interest of shareholders. The appointed directors shall have the same responsibilities as those of directors or executive directors of the parent company and shall perform their duties in compliance with good corporate governance policy, related party transaction policy, etc. All subsidiary transactions which may significantly affect the business operation or financial status of the Company must be reviewed and approved by the Board of Directors of the parent company.

In order to present the financial information and operating results of the subsidiaries, the Company has assigned the same auditing office that provides auditing services for the Company to perform audits and present the financial and non-financial information of the Subsidiaries in the consolidated financial statements of the Company.

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Our Business in A Sustainable Way

AISiscommittedtooperatebusinessinasustainableway with our considering the impact we made to the society and environment as well as the expectation of our key stakeholders i.e. communities, partners, customers, and our people. We have established the sustainability policy and strategy to guide and shape the way we do business. We are striving to build trust and gain license to operatefromallThaisundertheultimategoal,“TheMostAdmiredCompany”.

To allow all key stakeholders to understand more about our way of sustainable business, we published “AIS sustainability report 2014” in accordance to theGlobalReportingInitiativesrevision4(GRIG4).Withinthisreport, we have disclosed our sustainable business policy, strategy, material issues and management approach. Our sustainability report is available onwebsite at http://investor.ais.co.th and upon request in hard copy.


Relationship with Investors

Activities Related to Quarterly Results Announcement

Activity 2014 Objective Attendees Executive

Results Conference Call & Webcast

Analyst Briefing

OpportunityDay

Quarterly(4times)

Semi-annual and annual(2times)

Quarterly(4times)

Quarterly resultsannouncement and

Q&A

Presentation of the Company’s semi-annual and annual performance and strategy, plus Q&A

Quarterly resultsannouncement and

Q&A

Local and foreignanalysts and

institutional investors

Analysts and local institutional investors

Retail investors, private equity, analysts

ChiefOperatingOfficer/ChiefFinanceOfficer

ChiefExecutiveOfficer/ChiefFinanceOfficer/

other members of management team

HeadofInvestorRelations

We are committed to delivering the highest standards of disclosure with accuracy, completeness, fairness, transparency, quality, and timeliness in all communications with our shareholders and the investment communities.

The AIS Investor Relations Department reports directlytotheChiefFinanceOfficer.WeprovideCompany information including financial and operational performance as well as business direction from a management perspective. The quarterly Management Discussion and Analysis (MD&A) contains quarterly operating results, significant events affecting the financial results, guidance, and other crucial information for investors. The guidance is revisited during the year in accordance with the ongoing results.

Fullyunderstandingthecrucial importanceof investorrelations, AISmanagement allocates an appropriateamountof timefor investor relationsactivities.Ourseniormanagement regularly participates in and presents company strategy and business direction at investor meetings, analyst briefings, quarterly results meetings, and domestic and international conferences and road shows.

AISInvestorRelationsWebsite(http://investor.ais.co.th)contains essential sources of information for investors, including historical performance, financial statements, conferencecallreplays,annualreports,Form56-1,SETdisclosure, an investor calendar, shareholder meeting announcements, AIS share information, dividends, corporate governance news, sustainable development information and more. Moreover, in order to keep investors informedaboutimportantissues,AISregularlydeliversIRnews releases, including company news, earnings releases, and updated promotions.

AIShasalsoestablishedtheComplianceDepartment,which is responsible for the disclosure of information to the StockExchangeofThailand(SET)andtheSecuritiesandExchangeCommission(SEC)toensurethattheCompanycomplies with all applicable laws and regulations.

In addition, theCompany has regularly organisedinvestor activities, which have been attended by various Company executives as shown in the following table:

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Investor Activities

Activity 2014 Objective Attendees Executive

Road Show/Conference (internationaland

domestic)

Company Visit

18 times

140 times

Communicate business direction, performance

and strategy

Provide access tomanagement for

discussing the Company’s performance, direction,

and strategy

Local and foreigninstitutional investors

Local and foreignanalysts and

institutional investors

ChiefExecutiveOfficer/ChiefFinanceOfficer

ChiefExecutiveOfficer/ChiefFinanceOfficer

In2014,AISInvestorRelations’achievementsandstandardsreceivedduerecognitionintheformofprestigious“BestInvestorRelationsSETAwardofHonor”fromtheStockExchangeofThailand’s(SET)forshowingexcellent performance during the past 3 consecutive years.

TheAISIRteamprovidesshareholdersandinvestorswithadirectpointofcontactbytelephoneon:+6626153112,+6622995014;byfaxon:+6622995165;orbyemailat:[email protected]


Policy on Use and Disclosureof Inside Information The Company is strongly committed to the responsible and transparent use of internal data under best practices for the betterment of Company operations. Indoingso,theCompanyisresolvedtoadheringtotheprinciples of good corporate governance and business integrity while facilitating equal access to complete, reliable, and updated internal information for all investors and concerned parties. Accordingly, the Company monitors and tracks all the internal data usage and trading securities procedures of directors, executives, and employees to ensure conformance with the Securities and Exchange Actandbusinesstransparency.Outlinedbelowaresomeof the key points of the policy:

• Directors, executives, and employees at all levels are forbidden from using internal data containing crucial information that would have a significant impact on the stock price and which has not yet been declared to the public or the Stock Exchange of Thailand for trading totheadvantageofthemselvesorothers.Furthermore, the aforementioned parties are to avoid or refrain from trading the Company’s stock for 1 month prior to the announcement date of the Company’s results.

• TheCompany is responsible for announcing to the public regarding key Company decisions and/or actions, instantly and thoroughly, via appropriate and acceptable media to ensure that all data and information are accessible to stakeholder groups in a timely manner. Release of such information must be handled through the Investor Relations Department and Public Relations Department and in a manner congruent with the rules and regulations set out by the Stock Exchange of Thailand and Disclosure Policy.

• Directorsandexecutivesshallreportownershipofall securities issued by the Company, including those that pertain to self, spouses, and/or underage children, to the Securities and Exchange Commission and to the Board of Directors on a quarterly basis.

• The Companymaintains a strict policy regarding computer system usage and electronic information security in order to protect crucial information from unauthorised release. Misuse of internal Company

data by directors, executives, or employees is considered a serious breach of Company policy and, in warranted cases, offenders will be prosecuted to the fullest extent of the law. Before the announcement of the Company’s results, internal data are restricted torelateddepartmentsincluding:Accounting,Finance, InvestorRelations,andCompliance.

• TheInvestorRelationsDepartmentisforbiddenfrom discussing forward-looking statements or making any comments on information pertaining to the following 6 months in order to comply with the SET rules and international best practices; however, the long-term view regarding the Company’s strategic direction and business trends can be discussed.

• TheInvestorRelationsDepartmentisobligedtodeclare quiet periods to investor communities one month ahead of the result announcement date. During the corporate silence period, the Company refrains from answering any inquiries with regard to the upcoming financial results and Company guidance. Exceptions are made only for the discussion of factual business information, clarifications of disclosed information, new events concerning share price sensitive information, and long-term business operations. Any arranged meetings with analysts and/or investors are not encouraged in this period, and shall strictly be confined to discussions on long-term business operations only.

The Company has a Disclosure Policy outlining the official procedures for information disclosure. The policy is developed based on the principles that the disclosure of corporate information shall be in compliance with applicable legal and regulatory requirements. Disclosure of all corporate information shall be accurate, adequate, timely and consistent, regardless of whether it has a positive or negative impact on the Company, the investors, or the market. All non-public information shall be disclosed in a manner which ensures fair and equitable access by all investors. The policy stipulates responsible positions, levels of disclosure, and communication procedures. The policy reinforces the standards of disclosure and follows the principles of market efficiency.

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AIS Risk Management Framework & Procedures

Risk Management, Internal Control, and Internal AuditRisk Management The Company has Enterprise Risk Management Policy and Frameworkwhich covered all operations and all employees in order to manage risks to an acceptable level including encourages employees to take continuous personal responsibility for self-assessing risk (further information in attachment 73) and developing internal control systems to strengthen the effectiveness of the internal control and risk management systems.

TheCompanyemphasizestheimportanceandvalueof risk management by appoints the Chairman of the Executive Committee as the Chairman of the Risk Management Committee, together with the Chief Executive Officer and seniormanagement asmembers of the committee, responsible for established risk management policy and framework, including identify risk, assess and

The Company has proper and effective risk management systems, aligned with the integrated frameworkoftheCommitteeofSponsoringOrganizationsoftheTreadwayCommission(COSO).

rate the risks, define risk management concept, and assign responsibilities to those in charge of managing and controlling the risks to its risk appetite levels. This enabled the Company to accomplish its goals and strategies and create confidence for all shareholders and stakeholders. The Risk Management Committee continuously revises any changes to any risk factors.

SetObjective

1.

Risk Response

4.

IdentifyEvents

2.

Monitor

6.

Assess Risks

3.

Control Activities

5.


Board of Directors

Audit Committee Executive Committee Risk Management Committee (RMC)

Chairman - AIS (RMC’s Chairman)

Chief Executive Officer (Vice - Chairman)

Enterprise Risk Management

(Secretary)

Head of Legal (Member)

C - Ievel Executive (Member)

Chief Executive Officer responsible to implementrisk management policy and framework throughout the Company via Management of each department and employees in order to set risk management objectives, identify and manage risk at operation level. Chief Executive Officercontinuouslymonitorsriskmanagementresulttoensure the effectiveness and efficient of risk management system to accomplish the Company’s goals and strategies. Inaddition,TheRiskManagementCommitteefollowsup the accomplishment of risk management by considering the management action plans and the reliable measured results of the plans. At each meeting, the responsible management reports the results of risk management approach which identified in the previous meeting to the Risk Management Committee to discuss whether risk level has been successfully mitigated, thus resulting in effective risk management.

Every quarter, the Risk Management Committee submits risk management report results to the Audit Committee, the Board of Directors and the Executive Committee for closely monitoring to ensure that its risk appetite is acceptable and the Company is able to accomplish its goals.

Internal Control Amidst the current rapidly changing business environmentandmodels,AISisdedicatedtodesigningand implementing efficient internal control system, and conducting them in a continued effectiveness manner. The internal control system must be agile in adapting to changes, driving the Company to the goals efficiently and effectively.

Having a good internal control system is an important mechanism for the Company’s achievement of objectives and success. The Board of Directors has delegated to the management, executives, and all personnel the joint-responsibilities to select, develop, and implement appropriate controls - mitigating operational, reporting, and compliance risks - in their operations considering the costs and the benefits. The internal controls reduce the riskstoacceptablelevelgivingassurancethatAISachievesits objectives in relation to the missions and strategies.

TheCompanyappliestheInternalControl–IntegratedFrameworkofTheCommitteeofSponsoringOrganizations of the Treadway Commission (COSO) comprising 5 components and 17 principles to the Company’s operation, management,andinternalcontrolsystem.IntheBoard

The Company set up Risk Management working structure as picture below:

072

ofDirectorsmeetingno.2/2015on5February2015,the directors have assessed the adequateness of the Company’s internal control system in accordance with theSecuritiesandExchangeCommissionThailand(SEC)and concluded that the overall internal control system is adequate and effective.

In 2014, the Company’s external auditor, KPMG, evaluated the effectiveness of the Company’s internal control system and concluded that there was no material internal control weakness.

AIS system of internal control consists of 5 components and 17 principles as follows:

Control Environment1. AIS demonstrates commitment to integrity and ethical values. The Code of Business Ethics has been formally established in relation to the fair and transparent business operations responsible to every stakeholder including society and the environment. There are stipulations prohibiting actions which may have conflict of interests or damage the Company.

The Business Ethics Committee strengthens the Company’s awareness, plans trainings, corresponds to any inquiry, and makes interpretations relating to the Code of Business Ethics, to ensure that directors, management, and all personnel understands and are able to comply with them accordingly. Processes are in place to communicate the Code and relating penalty clauses to all personnel and external parties.

The Whistle Blowing Policy has also been established to provide secured complaint channels to both internal and external parties – via internal ‘Nokweed’ and external ‘[email protected]’ - in order to prevent, detect, and remedy frauds and misconducts in a timely manner. The complaints are investigated by appointed investigation teams and the results are reported to the Audit Committee and/or the Board of Directors. Proper penalties are charged. And the internal control system is improved to prevent the future occurrence.

The Internal Audit Office has been appointed to assess understanding and evaluate adherence to the Code. The Business Ethics Committee annually reports

its performance to the Executive Committee and periodically revises and updates the Code to include possible or new incidents.

2. TheBoardofDirectorsoverseesAISsystemofinternal control independently. The board consists of more thanone-thirdindependentdirectors.Itsmembersare experts, skilled, and qualified to oversee the development and performance of internal control which includes the control environment, the risk assessment, the control activities, the information and communication, and the monitoring activities. The authorities and responsibilities of the board and each committee are clearly defined and segregated from the management.

3. AIS establishes clear structures, reporting lines, authorities, and responsibilities aligning with business modelandlegalenvironmenttomaximizeefficiency and effectiveness of operations and internal controls. Crucial segregation of duties among structures provides checks and balances. Authority in management and operating levels are clearly defined, assigned, and limited.

4.AIS demonstrates commitment to attract, develop, and retain competent personnel. Relating policies and procedures have been clearly established and periodically assessed for their implementation effectiveness. The Company established mentoring process allowing supervisors to give consults to their subordinates on improvement. Succession plans for personnel in essential positions are defined and in place.

5. AIS enforces each personnel’s accountability for achievement of their assigned internal control responsibility through reporting lines directives, and communication of clear policies and procedures to enable strict conformance. Supervisors are also required to, by themselves, assess and assure the effectiveness of internal controls under their supervision (ControlSelf-Assessment:CSA).

The Board of Directors and the management establish and communicate clear performance evaluation procedures and performance measures


to motivate and reward performing personnel, and to manage any non-performances. The performance measures include adherence to the Code of Business Ethics, achievement of short-term and long-term objectives, and achievement of internal controls. Process is in place to adjust performance pressures of the management and personnel in case that they are excessive and possibly resulting in frauds or internal control’s cutting corners.

Risk Assessment6. AISspecifiesobjectiveswithsufficientclaritytoenable the identification and assessment of risks relating to objectives. For example, objectives are categorized as follows:

•Goalsareclearlystatedandpractical.Theysupport and are align with the Company’s missions and strategies. •TheCompany’sresourcesaremanagedandutilized efficiently and economically to achieve established objectives. •TheCompany’sassets,information,reputation,and personnel are safeguarded. •Process,policies,andproceduresarecontinuously improved and updated benchmarking relevant international standards. •Financialandnon-financialreportingareaccurate, reliable,and timely. Financial reportingaccurately and completely complies with the generally accepted accounting principles, represents the Company’s financial position and rights and obligations, and has full disclosures, reflecting activities and performances of the Company. • Internalandexternalregulations,policies,andlaws relating to the Company’s business are being adhered to. •CSAisproperlyimplementedincrucialprocesses.

7. AIS identifies and analyzes all types of risk in both corporate and operational levels which may affect achievementoftheobjectives. Internalandexternal factorsareconsideredtoidentifyandanalyzestrategic risk, operational risk, reporting risk, compliance risk, and information technology risk.

The Company assesses the significance of risks based on impact and likelihood of risk occurring.

The management and personnel are involved in the risk management process and consideration of risk responses which include risk acceptance, avoidance, reduction, and sharing.

The Company supports and develops the risk awareness and risk management in each department with assisting tools such as ERM and CSA.

8. AIS assesses fraud risk and establishesmeasures to prevent and detect frauds especially in high-fraud-risk processes such as processes relating to cash, inventory, procurement, financial reporting etc. The Company performs an analysis to identify irregular financial ratios, continuously monitors for irregular business transactions, implements various assets safeguarding measures, and launches the whistle blower program. In addition, the Audit Committee scrutinizes information and questions the management on likelihood of fraud occurring and measures implemented to prevent, detect, or remedy frauds.

AISisdevelopingsystematicfraudriskmanagementin order to manage all types of internal and external fraud risks which include loss of assets, fraudulent financial reporting, corruptions, management overrides, misappropriate or misuse of assets.

9. AISidentifiesandanalyzessignificantchangesinthe external environment, the business model, and leadership which may affect the business, internal controls, and financial reporting. Appropriate responding measures to those changes have been prepared and established.

Control Activities10. AISselectsanddevelopscontrolactivitiesalignedwith the Company’s risks and specific characteristics such as the business environment, complexity, nature, and scopes of operations, covering all relevant business processes and levels of activities. There are considerations on a proper mix of control activity types, a balance of manual and automated controls, and an integration of preventive and detective controls. Conflicted duties suchastransactionrecording,authorizing,approving, and assets handling are also segregated to provide proper checks and balances.

074

11. AIS selects and develops general controls over technology to help ensure that theCompany’s IT systems are always available, protected from unauthorizedaccess,andsupportingachievementof management’s objectives. Examples of the controls are:

•Technology infrastructure controls: centralized technicalinfrastructureoperations,ITsystemchange management, business continuity management program etc. •Securitymanagementcontrols:accessrightscontrols, security controls, system and network irregularity monitoring, information security management system’s external assessment etc. •Technology acquisition, development, and maintenance controls: strict system procurement process, internal and outsourced system developer management and competency program, revision of system development manual, system source code control etc.

12. AISdeploys control activities through clear policies and procedures to let personnel understand what the management expects and how to implement the controls correctly. Competent personnel who are responsible, steps and timing of implementation, and corrective actions on matters identified as a result of the controls are established. The policies and procedures are periodically reassessed for continued relevance and effectiveness.

The Company has established policies to ensure that all business decisions are approved based on the Company’s interest, and on an equitable agreement withindependentparties(arm’slengthtransaction). The associated companies and subsidiaries are subjected to the equivalent policies and are monitored by their directors or management appointed by the Company.

Information & Communication13. AISusesrelevantandqualityinformationtosupport internal control. Data is gathered from internal and external considering costs and benefits. The data are gathered and processed by information systems into information supporting the functioning of internal control.

The Board of Directors receives sufficient information for the decision making in the meetings in a timely manner 7 or 14 days before the meetings as stipulated by laws and regulations. The information includes relevant details, backgrounds, options, and effects to the Company. In themeetings, each director’s opinions, recommendations, observations, inquiries, disagreements, and reasoning are recorded for subsequent board assessment.

14.AIShasan internal communicationsystemto relay internal control’s objectives, policies, procedures, and accountabilities to every level of personnel in every department nationwide. Various communication channels are selected appropriately for the communication efficiency and effectiveness. For examples, there are communications via the intranet,newsletters,‘CEOTalkWeeklyinSomchai’s style’, and confidential Whistle Blower hotline.

The Company reports material information to the Board of Directors. The board members have access to and can request reviews of any information needed to exercise their oversight responsibilities. They can freely communicate with the external auditors, internal auditors, and other established contact persons other than the senior management. Extraordinary formal or informal meetings with the management can also be arranged.

15.AIS has an efficient communication systemwith external stakeholders using proper channels to support internal control. For examples, there are communications via the internet, social media, investor relations, service quality complaint centers, and Whistle Blower hotline to the Audit Committee via [email protected].

Monitoring Activities16.AIS instructsmanagers and supervisors in every department to continuously monitor for deficiencies of the internal control to ascertain the continued effectiveness of 5 components and 17 principles of the internal control. There are also separate evaluations from independent parties such as internal auditors or external quality assessors. The frequency of the evaluations varies on rate of changes occurring.


17. When the internal control deficiencies are identified, AIS evaluates their significances and communicate them to responsible parties for timely corrective actions. Material deficiencies and their correction progress are reported to the Board of Directors and the senior management as appropriate. Fraud incidents or clues, violation of law, or any other irregularities which may materially affect the Company’s reputation or financial position will be immediately informed to the Board of Directors.

Internal Audit The Internal Audit Office performs its duties independently from the management. It reports functionally to the Audit Committee and administratively totheChiefExecutiveOfficer.SupportingtheCompany’sachievement of objectives and goal, the office evaluates the efficiency and effectiveness of the internal control, risk management, governance system, and also provides consultation.

The annual audit plan is approved by the Audit Committee. The risk based audit approach is applied focusing on issues which remain high risks to the Company’s objectives and goals, key control points, and fraudpreventionmeasures.TheOfficeutilizesinternational- standard auditing techniques benchmarking against ASEAN internal audits.

TheInternalAuditOfficeisanothersecuredchanneltoreport misconduct and fraud. All case tipped by internal staffs or external parties will be act on in accordance with the Whistle Blower Policy. The case results are quarterly reported to the Audit Committee.

InitsrolerelatingtoCOSO2013,theOfficeprovidestraining on the internal control - integrated framework to departments and other companies in the Group; and gives consults relating to the SEC questionnaire on internal control.TheOfficealsoevaluatesinternalcontrolsystemofeveryauditedprocessaccording to theCOSO2013framework.

InitsrolerelatingtoCSA,theOfficefacilitatesCSAimplementation by offering counseling and group-training workshops(CSAFacilitator)andevaluatestheeffectivenessofCSAimplementationbythesupervisors(CSAValidation).

In i t s IT system ro le , the Office prov ides recommendations during the development of business systems to ensure that sufficient and circumspect internal controlsareinplacebeforethelaunch.TheOfficealsoaudits information security management system in the CompanypercompliancewithISO27001:2013standard.

TheInternalAuditOfficeadherestotheInternationalProfessionalPracticesFrameworkandtheinternalauditcharter.TheOfficerevisestheinternalauditmanualandconducts the internal audit’s quality self-assessment on an annualbasis.Italsoreceivestheexternalassessmenteveryfive years. And in the last external assessment in 2011, it was rated ‘generally conforms with the international standards’ and ‘performed remarkably well in relation to the qualitative benchmarking against high performing internal audit functions internationally’. This enhances the Company’s reputation and supports sustainable development of internal control, risk management, and governance system, adding value to the stakeholders.

TheChiefAuditExecutive(CAE)actsasthesecretary to the Audit Committee supporting their oversight responsibilities and accountability which are assigned by the Board of Directors to the Audit Committee. Additionally, the CAE gives advices relating to the internal control, risk management, business ethics, information security etc. (Further information about theCAE is in page 41)

TheInternalAuditOfficeencouragesallinternalauditstaffs to be integrated auditors who can perform various aspects of audits which include business, information technology and engineering systems audits; and be innovative in developing more effective audit techniques. There is also a strong focus on staffs’ professional development. At present, there is a total of 29 professional certificateswhich are eightCertified Internal Auditors (CIA),fiveCertifiedInformationSystemAuditors(CISA),oneCertified InformationSystemsSecurityProfessional (CISSP), eleven Certification in Risk Management Assurance (CRMA), threeCertified PublicAccountants(CPA) and one TaxAuditor (TA) in the Internal Audit Office.TheremainingstaffsarestudyingCIA,CISA,CRMA,CCSA(CertificationinControlSelf-Assessment),andCFE(CertifiedFraudExaminers).

076

Related Transactions

31 December 2014 (Million Baht)


Related parties / Relation to the

CompanyDetail of

TransactionsRational and

NecessityCompany CompanyConsolidated Consolidated

1. Intouch HoldingCompany Limited(INTOUCH)/

INTOUCHisamajorshareholder,holds 40.45%, and has joint directors•Mr.SomprasongBoonyachai•Mr.VithitLeenutaphong

The Company and its subsidiaries provide mobile services and handset sales toINTOUCH.

1. Service income 0.02 0.67 0.42 0.802.Otherincome - 0.45 0.19 0.433.Otherserviceexpenses 3.62 3.57 1.71 1.714.Interestexpenses - 0.42 - -5.Otherpayables 0.78 0.78 0.04 0.096. Trade accounts receivable 0.01 0.24 1.71 1.71

The Company and its subsidiaries charge service fee and sale handset at the same rate as with external customers.

The Company and its subsidiaries have entered into related transactions with connected persons. All of these related transactions are made in the ordinary course of business and on general trading conditions.

To be aligned with the Security and Exchange Act (No.4)B.E.2551,Article89/12(1),theCompany’sBoardof Directors has approved in principle, on 13 August 2008, that the management shall have the authority to undertake the related transactions, whereas those transactions are transactions with general trading conditions. The approval of the above transactions shall not constitute such authority to allow the director, an executive, or a related person to approve with a conflict of interest.

Forapprovalprocess,therelatedtransactionsshallbeprocessed in the same practice as other general trading transactionswith outside partieswith the authorized executives designated and empowered to endorse up to a certain limit of budget according to their respective rank and position. The Audit Committee of the Company and

its subsidiaries is responsible for reviewing the related transactions every quarter to ensure that no conflict of interestwillbeoccurredinordertomaximizetheoverallcompany’s benefits.

The practice and disclosure about the related transactions have been followed up strictly under the notifications or rules of the Stock Exchange of Thailand.

For the fiscal year ended 31December 2014 and 2013, the Company and its subsidiaries had the related transactions in which the auditors had disclosed in the notes to audited financial statements and these transactions have been reviewed by the Audit Committee. The Audit Committee had an opinion that all related transactions are reasonable and based on the normal course of business. The Company charges / purchases products and services with related parties at reasonable prices and those prices are comparable to the market rate with general trading conditions. Details of related transactions are as follows;





CompanyDetail of



2. Thaicom Public Company Limited (THAICOM)/

INTOUCHisamajorshareholder, holds 41.14%, and Mr. Somprasong Boonyachaiis a joint director.

3. Matchbox Company Limited (MB)/

INTOUCHisamajorshareholder, holds 99.96%, and Mr. Somprasong Boonyachai is a joint director.

The Company leases satellite transponder on the Thai Com1AfromTHAICOMand contract will effective until 21 June 2015. The CompanypaysUS$1,700,000 per year.

The Company and its subsidiaries provide domestic and international phone services, handset sales and space for transponder equipment installation toTHAICOM. 1. Service income 0.73 2.73 1.62 2.90 2.Otherincome - 0.46 - 0.243. Rental and service expenses 58.26 66.37 51.30 51.30 4. Accrued expenses 9.03 9.03 4.51 4.51 5. Trade accounts receivable - 0.01 0.05 0.10 6. Accrued income - 0.03 - 0.10

The Company and its subsidiaries hire MB as an agency to provide publicity for the Group products / services to customers throughvarious media on a job-by-job basis. The Company and its subsidiaries provide mobile and handset sales to MB.

1. Advertising and other service expenses 25.05 283.72 470.92 1,340.77 2.Otherpayables 0.61 29.38 15.35 55.99 3. Accrued expenses 9.67 65.88 45.49 325.47 4. Trade accounts receivable - - 0.01 0.01

THAICOMistheonlysatellite operator in Thailand. The Company is charged at the same rate as with external customers.

MB is a creative advertising agency with good understanding of the Group’s products & services and maintaining information as strictly confidential.

Advertising fee is comparable to other agencies.

078




CompanyDetail of



4. Teleinfo Media Company Limited (TMC)/

INTOUCHisanindirectmajorshareholder.

5. I.T. Applications and Services Company Limited (ITAS)/

INTOUCHisamajorshareholders, holds 100% and Mr. Somprasong Boonyachai is a joint director.

The Company and its subsidiaries hire TMC to provide the following services; 1)Furnishinginformationor content on mobile phone such as astrology, lotto, and comic story.2)Outsourcingcallcenter

The Company and its subsidiaries pay service fee on monthly basis.

The Company and its subsidiaries provide mobile services and handset sales to TMC.

1. Service income 1.18 1.81 2.85 2.89 2.Otherincome - - - 0.61 3. Service expenses 3.13 39.12 15.54 50.36 4. Trade accounts payable 0.12 2.11 0.71 2.20 5.Otherpayables - - - 0.02 6. Accrued expenses - 4.97 - 4.29 7. Trade accounts receivable 0.47 0.47 0.68 0.73

The Company and its subsidiarieshireITAStoprovide SAP solution and application development, and design and advertise the Group products/service on website.

The Company provides mobileservicestoITAS.

1. Service income - 0.01 0.01 0.01 2.Otherincome - - 0.08 0.08 3. Service expenses 0.30 88.13 - 69.05 4. Trade accounts payable - 3.06 - - 5. Accrued expenses - 15.33 - 7.01 6. Trade accounts receivable - - 0.03 0.03

TMChasaspecializationin providing information for content on mobile.

- The Company and its subsidiaries pay service fee(Contentonmobile) by the percentage of revenue. Rate is charged at the same rate as with other content providers.

-Outsourcecallcenter fee is comparable to other call center providers.

ITASprovidesSAPapplication development and improvement, including maintenance services. The services are timely and rapidly while the service fee is reasoable.

ITASchargestheCompany and its subsidiaries at comparable rate to other SAP consultant companies.

The service charge depends on the type of work and the level of consultant.





CompanyDetail of



6. Group of SingTel Strategic Investments Private Limited (SingTel)/

SingTel is a major shareholderof the Company, holds 23.32%.

The Company and its subsidiaries enter into an agreement with companies of SingTel group for the joint international Roaming operation. The Company pays the salary and remuneration to Singapore TelecomInternationalPteLtd.(STI)forsendingitsoperational staff. The expense is charged on an actual basis.

1. Service income 77.67 434.59 514.20 593.262. Service expenses 32.72 470.84 233.21 468.973. Salary and other remuneration 84.41 84.41 57.38 57.384. Trade accounts payable 20.34 21.37 - 21.745.Otherpayables - - 11.61 11.616. Accrued expenses 10.07 11.80 23.62 56.78 7. Trade accounts receivable - 16.62 93.80 95.778.Otherreceivable 0.11 0.11 - 0.029. Accrued income 2.41 2.41 28.48 30.18

TheInternationalRoaming with SingTel is under the ordinary course of business since the Company and its subsidiaries provide international mobile service to foreign operators.

Both parties charge each other at the accepted price by deduct profit from their customers. STIhasanagreement with the Company that STIneedstoprovide operational staff to help the Company for management and any technique.

The Company and its subsidiaries pay the service feetoSTIbytheactualbasis according to the agreement.

080




CompanyDetail of



7. CS Loxinfo Public Company Limited (CSL)/


8. AD Venture Public Company Limited (ADV)/


The Company and its subsidiaries hire CSL for providing the internet service by connecting the network within and outside the country, and selling internet prepaid card through its distribution channel.

The Company and its subsidiaries provide mobile services, handset sales and datanet equipment’s rental to CSL.

1. Service income 0.65 12.55 1.17 41.732.Otherincome - 5.81 - 1.32 3. Rental and service expenses 3.75 8.25 3.81 4.154. Trade accounts payable 0.34 0.39 0.36 0.36 5.Otherpayables - 0.04 - 0.04 6. Accrued expenses - 0.34 - -7. Trade accounts receivable 0.05 2.42 0.05 6.28 8.Otherreceivable - - - 0.019. Accrued income - 0.99 - 2.06

The Company and its subsidiaries hire ADV to provide content and valueadded service for mobile phone to customers such as game, ringtone, wallpaper and etc. by charging per month.

The Company and its subsidiaries provide mobile services, software mall and handset sales to ADV.

1. Service income 18.89 19.48 16.30 16.32 2.Otherincome - 0.72 - 1.46 3. Service expenses - 332.23 0.03 481.91 4. Trade accounts payable - 22.77 - 38.03 5. Accrued expenses - 22.06 - 39.03 6. Trade accounts receivable 1.19 1.19 1.65 2.47 7. Accrued income - - - 0.02

CSL provides expertise on internet service by connecting internet data from local to worldwide through network.

The Company and its subsidiaries are charged at the same rate as with external customers.

ADVhasaspecializationin designing and creating website with variety contents which suit tothe Company and its subsidiaries’ need.

The Company and its subsidiaries pay service fee(Contentonmobile)by the percentage of revenue. Rate is charged at the same rate as with other content providers.





CompanyDetail of



9. DTV Service Company Limited (DTV)/


10. Lao Telecommunications Company Limited (LTC)/


11. Thai Yarnyon Co., Ltd. Group (TYY)/

Mr. Vitit Leenutaphong is a joint director.

The Company hired DTVto advertising on satellite television.

The Company provide mobile services to DTV.

1. Service income 0.06 0.06 0.13 0.13 2. Service expenses 0.90 1.20 1.20 1.40 3. Trade accounts receivable - 0.01 0.01 0.01

The Company and its subsidiaries have cooperated with LTC to provide international roaming.

1. Service income 0.33 5.27 0.89 5.372. Service expenses 2.07 12.98 3.98 8.95 3. Trade accounts payable - 0.28 - 0.52 4. Accrued expenses - 0.28 0.07 0.79 5. Trade accounts receivable 0.07 1.16 1.28 1.63 6. Accrued income - 4.16 - 0.36

The Company and its subsidiaries hire TYY to provide car maintenance services and space rental for base station.

The Company and its subsidiaries provide mobile services to TYY.

1. Service income 0.50 2.48 1.77 1.912. Service expenses 0.08 0.41 0.60 0.85 3. Trade accounts payable - - - 0.03 4. Trade accounts receivable 0.05 0.27 0.25 0.27

DTVhasaspecializationin media service on satellite and distribute satellite dish, use via by television and internet.

The Company is charged at the same rate as with external customers.

LTC, the telecommunications service provider in Laos, provides fixed line, mobile phone, internet, and international roaming services.

Roaming price is based on market rate.

TYY is a car dealer with specialist in car maintenance services.

- The Company is charged at the same rate as with external customers.- Rate of base stations rental is comparable with another lessor in the nearly area.

082




CompanyDetail of



12. Ookbee Company Limited (OOKB)/

INTOUCHisadirectshareholder, holds 22.06%.

13. Information Highway Company Limited (IH)

AISisanindirectmajorshareholder.

Thesubsidiary(MMT)hireOokbeetoprovideE-booking application on smartphones and tablets by charging per monthly. AWN provides mobile servicestoOokbee.

1. Service income - 0.05 - 0.02 2. Service expenses - 11.77 - 10.42 3. Trade account payable - 0.73 - 0.24 4. Accrued expenses - 0.73 - 0.27 5. Trade account receivable - - - 0.01

IHprovidestransmissionnetwork services to the company and its subsidiaries.

1.Interestincome - 1.82 - - 2. Short term loan to - 95.00 - -

Ookbeeisaproviderdigital publication and E-Booking company suchasbooks,magazinesor newspaper on smartphones, tablets and computers.

MMT pays service fee (Contentonmobile)bythe percentage of revenue. Rate is charged at the same rate as with other content providers.

IHprovidestransmissionnetwork services.


To the Shareholders of Advanced Info Service Public Company Limited

The Audit Committee of Advanced Info Service Public Company Limited is composed of three independent di-rectors with combined skills and expertise in finance, accounting, laws, and business administration. All members possess adequate qualifications as required by the Audit Committee Charter and the regulations of the Securities and Exchange Commission, Thailand (SEC) and the Stock Exchange of Thailand (SET). Its members include:

1. Mr. Krairit Euchukanonchai1/ Chairman of the Audit Committee2. Mrs. Tasanee Manorot Member of the Audit Committee 3. Mr. Surasak Vajasit Member of the Audit Committee

And Mrs. Suvimon Kulalert, the Company’s Chief Audit Executive, acts as secretary of the Audit Committee. The summary of meeting attendance of the members in 2014 is shown in “Management Structure”.

The Audit Committee operates independently and performs its duties and responsibilities as assigned by the Board of Directors in overseeing the corporate governance and the internal control systems to ensure that the Company’s business operations were carried out for the interests of its shareholders and other stakeholders and that the Management executed their duties with integrity, accountability, and in accordance with the Company’s policies. The Audit Committee’s operations in the year 2014 are summarized below:

1. The Audit Committee reviewed the quarterly and annual separate and consolidated financial statements of the Company and its subsidiaries for 2014 after they had been reviewed and audited by the external auditor. The Audit Committee also discussed the significant accounting policies, estimates, and judgments applied in the preparation of these reports with the Management and the external auditor prior to the reports being concurred and submitted to the Board of Directors for approval.

2. The Audit Committee acknowledged the external audit plan and reviewed the external auditor’s management letter recommending improvements to the internal control system. The Audit Committee also held a meeting with the external auditor without the Management’s participation for the independent discussion on important issues concerning significant information in the financial statements and any points of concern arising from their reviews and audits. The Audit Committee concluded that the internal control systems for financial reporting process were appropriate to ensure that the financial statements fairly present the Company’s financial position and performance in all material respects, in accordance with the applicable Thai Financial Reporting Standards and Thai Accounting Standards.

3. The Audit Committee reviewed related party transactions or any transactions that potentially conflicts the Company’s interests and concluded that the Management conducted these transactions in the interest of the Company and at an arm’s length basis, with general business trading condition and reasonable price which had been compared with the general market price in such industry.

4. The Audit Committee reviewed the Company’s compliance with the Securities and Exchange Act, the regulations of the SEC and SET, and other relevant laws, as well as business commitments with third party agreements. The Audit Committee concluded that the Company fully complied with the aforementioned regulatory requirements in all material respects. The Audit Committee and external auditor assures that all material relevant issues under dispute, which the Management believes that such issues shall turn out to be in the Company’s favour, were disclosed in the notes to the financial statements adequately.

Audit Committee Report 2014

084

5. The Audit Committee reviewed the effectiveness and adequacy of the internal control systems. The internal audit reportsduring2014were reviewed.The internal control systemwasassessedaccording to the InternalControl IntegratedFramework2013oftheCommitteeofSponsoringOrganisationsoftheTreadwayCommission(COSO)as well as the SEC guideline. The Management actions, pertaining to the recommendations in the internal audit and external audit reports, were regularly communicated to and monitored by the Audit Committee whereby root causes of the issues would be further evaluated in order to provide guidelines for the management to prevent future potential loss. Additionally, the Audit Committee had paid a visit to the Company’s operation sites to gain more business process insight and given recommendations to further enhance the effectiveness of the internal control systems. No major internal control deficiencies were identified and the Audit Committee concluded that the internal control systems were appropriate.

6. The Audit Committee reviewed the risk management system in four meetings with participation of representatives from the Risk Management Committee during 2014. Recommendations to improve efficiency of risk management system were made. The Audit Committee concluded that the risk management system was properly designed, implemented, and functioning.

7.TheAuditCommitteereviewedtheCompany’sadherencewithReportingandInvestigationofMisconductandorFraudandWhistleblowerProtectionPolicy.AllcomplaintsandinvestigationresultsbytheInvestigationCommitteewere quarterly communicated to the Audit Committee whereby appropriate actions and fair treatments could be recommendedadditionallytobeincompliancewiththeCorporateGovernancePolicy.Fivecaseswerereportedin2014, one of which was identified as fraud after the investigation. Additionally, the Audit Committee is one of the channels for both internal and external parties to securely report complaints.

8.TheAuditCommitteewasresponsibleforoverseeingtheInternalAuditDepartmentandheldaformalexclusive meeting with the Chief Audit Executive to ensure that all assurance and consulting activities were performed effectively and efficiently. In doing so, theAuditCommittee reviewed its independence, internal audit reports during 2014, and its performance according to key performance indicators. The Audit Committee also evaluated the performance of the Chief Audit Executive and considered internal audit quality improvement plans based on the evaluations and suggestions received from the audited departments.

The Audit Committee approved the internal audit plan for 2015 which was based on the Company’s key risk areas.Theinternalauditactivitiesemphasizedontheevaluationoftheeffectivenessofkeycontrolpointsandcontrol self-assessment in each process. The Audit Committee also reviewed the internal audit’s scope of work; responsibilities; annual budget, sufficiency of manpower, competency, and audit tools; for the internal audit quality conforming to international standards.

The Audit Committee concluded that the internal audit processes had been operating appropriately, effectively, andindependently,inconformitywiththeInternationalStandardsfortheProfessionalPracticeofInternalAuditing. ItsannualauditplanalignedwiththeCompany’sgoalsandkeyriskareas.TheInternalAuditDepartmenthadachievedits performance targets and demonstrated continuous improvement in respect of its personnel development and tools advancement.

9. The Audit Committee quarterly reported its operation to the Board of Directors and provided to the Management useful recommendations, which were subsequently adopted.

10. The Audit Committee reviewed the Audit Committee Charter to propose to the Board of Directors its amendments to be aligned with the Corporate Governance Policy, relevant regulations, and the Reporting and InvestigationofMisconductandorFraudandWhistleblowerProtectionPolicy.


11. The Audit Committee took into consideration the nomination and appointment of the external auditor and the annual audit fee for 2015. This process entailed assessment of the current external auditor for its independence, performance during the year 2014, knowledge, competency, experience in the telecommunications industry, available team support and the competitiveness of the audit fee as well as auditor rotation required by the notification of the Capital Market Supervisory Board. After careful consideration, the Audit Committee concluded that KPMG Phoomchai Audit Ltd. external auditors had acted independently, demonstrated a high degree of expert knowledge and professional experience required for the purposes of conducting the external audit for the Company, and delivered satisfying performance result. The annual audit fee approved at the general shareholders meeting last year was justifiable.

12. The Audit Committee’s performance assessment was conducted annually. It was participated by the Audit Committee’s members themselves, the Board of Directors, the external auditors, and the Management assessing its composition, authority, independence, meetings, auditing performance, and duties on reviewing and expressing opinions, all of which should benefit the Company on internal control and risk management systems, financial reporting, external audit process, internal audit process, and the Company’s compliance with applicable regulatory requirements. Its performance was due to be benchmarked against guidelines from the SEC and the Audit Committee Charter. The result showed that the Audit Committee had performed its duties and responsibilities with sufficient skills, expertise, diligence, and independence. The Audit Committee had full access to all pertinent information from management, employees and associated parties. The Audit Committee had been given creative and useful comments and recommendations benefiting all stakeholders.

In summary, the Audit Committee determined that the Board of Directors, Management, and Executive Directors had performed their duties with integrity and diligence in pursuit of the Company’s goals. And the Company demonstrated commitment to effective and transparent Corporate Governance which included appropriate risk management and internal control system.

Mr. Krairit Euchukanonchai Mrs. Tasanee Manorot Mr. Surasak Vajasit Chairman of the Audit Committee Audit Committee member Audit Committee member

Remark : 1/ The Board of Directors meeting no.4/2014 of Advanced Info Service Public Company Limited (the Company), held on 6 May 2014 resolved to appoint Mr. Krairit Euchukanonchai to be a member of the Audit Committee.

086

FinancialReport


Financial Report

Board of Directors’ Responsibility for Financial Reporting TheBoardofDirectorsisresponsibleforAdvancedInfoServicePublicCompanyLimited’sfinancialstatements andAdvancedInfoServicePublicCompanyLimitedanditssubsidiaries’consolidatedfinancialstatements,including the financial information presented in this annual report. The aforementioned financial statements are prepared inaccordancewithgenerallyacceptedaccountingprinciples,usingcarefuljudgementandthebestestimation.Importantinformation is adequately and transparency disclosed in the notes to financial statements for the Company shareholders and investors.

The Board of Directors provides and maintains risk management system and appropriate and efficient internal controls to ensure that accounting records are accurate, reliable and adequate to retain its assets as well as to prevent fraud or materially irregular operations.

Inthisregard,theBoardofDirectorshasappointedanAuditCommitteecomprisingindependentdirectorstoberesponsible for reviewing quality of the financial reports, internal controls, internal audit and risk management system. The Audit Committee also reviews a disclosure of related party transactions. All their comments on these issues are presented in the Audit Committee Report included in this annual report.

The separate financial statements and the consolidated financial statements of the Company have been examined by an external auditor, KPMG Phoomchai Audit Limited. To conduct the audits and express an opinion in accordance with generally accepted auditing standards, all records and related data, as requested, are provided to the auditor. The auditor’s opinion is presented in the auditor’s report as a part of this annual report.

The Board of Directors considers the Company’s overall internal control system satisfactory and provides credibility andreliabilitytoAdvancedInfoServicePublicCompanyLimited’sfinancialstatementsandAdvancedInfoServicePublicCompany Limited and its subsidiaries’ consolidated financial statements for the year ended 31 December 2014. The Board of Directors also believes that all these financial statements have been prepared in accordance with generally accepted accounting principles and related regulations.

Mr. Vithit Leenutaphong Mr. Allen Lew Yoong Keong Chairman of the Board of Directors Chairman of the Executive Committee

088

Independent Auditors’ Report

To the Shareholders of Advanced Info Service Public Company Limited I have audited the accompanying consolidated and separate financial statements of Advanced Info Service Public Company Limited and its subsidiaries (the “Group”), and of Advanced Info Service Public Company Limited (the “Company”), respectively, which comprise the consolidated and separate statements of financial position as at 31 December 2014, the consolidated and separate statements of income, comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated and Separate Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated and separate financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

My responsibility is to express an opinion on these consolidated and separate financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated and separate financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion

In my opinion, the consolidated and separate financial statements present fairly, in all material respects, the financial position of the Group and the Company, respectively, as at 31 December 2014 and their financial performance and cash flows for the year then ended in accordance with Thai Financial Reporting Standards.

(Charoen Phosamritlert)

Certified Public AccountantRegistration No. 4068

KPMG Phoomchai Audit Ltd.Bangkok

5 February 2015


Financial Report

Assets

Consolidated Financial Statements

31 December

Separate Financial Statements

31 December

Note(in Baht)

2014 2013 2014 2013

Statement of Financial PositionAdvanced Info Service Public Company Limited and its Subsidiaries

The accompanying notes are an integral part of these financial statements.

Advanced Info Service Public Company Limited and its SubsidiariesStatement of financial position

Assets Note 2014 2013 2014 2013

Current assets

Cash and cash equivalents 6 14,258,066,402 11,473,120,876 1,679,292,348 3,964,630,780

Specifically-designated bank deposits 7 3,709,327,905 3,781,141,127 - -

Current investments 8 1,542,448,983 1,576,941,592 - -

Trade accounts receivable 5,9 10,415,388,789 10,264,184,371 9,944,049,122 11,529,604,208

Other receivables 5,10 5,900,650,118 4,851,425,229 1,987,196,143 1,205,237,858

Short-term loans to related parties 5 95,000,000 - 35,589,760,000 35,386,900,000

Inventories 11 2,519,497,229 2,864,932,209 52,163,408 80,021,810

Other current assets 686,131,869 153,136,150 140,976,544 -

Total current assets 39,126,511,295 34,964,881,554 49,393,437,565 52,166,394,656

Non-current assets

Investments in associate 12 - - - -

Investments in subsidiaries 13 - - 7,912,145,488 7,912,143,008

Other long-term investments 8 58,399,310 104,360,750 46,999,310 93,160,750

Property, plant and equipment 14 60,702,586,423 35,922,236,163 1,103,188,064 1,580,204,790

Intangible assets under

the Agreements for operations 3(b),15 8,738,038,803 20,499,802,732 8,738,038,803 20,491,416,123

Goodwill 16 34,930,692 34,930,692 - -

Spectrum license 17 12,624,410,361 13,600,648,306 - -

Other intangible assets 18 2,504,683,294 2,178,034,730 112,532,688 159,337,759

Swap and forward contracts receivable 37 568,880,941 653,397,782 568,880,941 653,397,782

Deferred tax assets 19 1,441,855,941 3,557,332,641 667,900,342 3,216,666,321

Other non-current assets 5 550,265,957 510,084,969 999,138,724 671,294,457

Total non-current assets 87,224,051,722 77,060,828,765 20,148,824,360 34,777,620,990

Total assets 126,350,563,017 112,025,710,319 69,542,261,925 86,944,015,646

Consolidated Separate

financial statements financial statements

(in Baht)

31 December 31 December


3

090


Statement of Financial PositionAdvanced Info Service Public Company Limited and its Subsidiaries

Liabilities and equity


31 December


31 December

Note(in Baht)

2014 2013 2014 2013

Advanced Info Service Public Company Limited and its SubsidiariesStatement of financial position

Liabilities and equity Note 2014 2013 2014 2013

Current liabilities

Short-term loans from financial institutions 20 - 4,000,000,000 - 4,000,000,000

Trade accounts payable 5,21 11,903,114,252 11,718,205,683 1,285,824,610 1,621,377,526

Other payables 5,22 11,188,941,077 9,536,172,211 2,824,131,920 4,925,418,639

Short-term loan from related parties 5 - - - 4,400,000,000

Current portion of long-term borrowings 20 2,571,630,615 5,303,408,757 2,560,792,322 5,297,776,745

Current portion of spectrum license payable 17 3,656,250,000 3,656,250,000 - -

Accrued revenue sharing expenses 1 5,130,156,868 3,534,750,009 4,989,582,697 3,394,175,838

Unearned income - mobile phone service 2,183,175,400 1,599,664,604 628,770,725 1,134,085,114

Advanced receipts from customers 3,709,327,905 2,985,927,727 - -

Income tax payable 2,195,545,817 2,816,611,446 - 1,923,263,743

Other current liabilities 367,976,407 340,245,305 330,908,064 304,012,947

Total current liabilities 42,906,118,341 45,491,235,742 12,620,010,338 27,000,110,552

Non-current liabilities

Long-term borrowings 20 34,478,291,366 15,354,770,702 12,869,374,320 15,339,346,797

Employee benefit obligations 23 1,499,743,034 1,361,376,034 406,012,895 767,853,695

Spectrum license payable 17 - 3,656,250,000 - -

Other non-current liabilities 601,655,751 269,491,753 33,268,900 55,861,060

Total non-current liabilities 36,579,690,151 20,641,888,489 13,308,656,115 16,163,061,552

Total liabilities 79,485,808,492 66,133,124,231 25,928,666,453 43,163,172,104

Equity

Share capital 24

Authorised share capital 4,997,459,800 4,997,459,800 4,997,459,800 4,997,459,800

Issued and paid-up share capital 2,973,095,330 2,973,095,330 2,973,095,330 2,973,095,330

Additional paid-in capital

Premium on ordinary shares 24 22,372,276,085 22,372,276,085 22,372,276,085 22,372,276,085

Retained earnings

Appropriated

Legal reserve 25 500,000,000 500,000,000 500,000,000 500,000,000

Unappropriated 20,710,294,423 19,729,332,548 17,742,315,443 17,928,485,775

Other components of equity 26 194,732,371 173,403,605 25,908,614 6,986,352

Equity attributable to owners

of the Company 46,750,398,209 45,748,107,568 43,613,595,472 43,780,843,542 Non-controlling interests 114,356,316 144,478,520 - -

Total equity 46,864,754,525 45,892,586,088 43,613,595,472 43,780,843,542

Total liabilities and equity 126,350,563,017 112,025,710,319 69,542,261,925 86,944,015,646

(in Baht)


31 December 31 December

financial statements financial statements


4


Financial Report


Statement of IncomeAdvanced Info Service Public Company Limited and its Subsidiaries


For the year ended 31 December



Note(in Baht)

2014 2013 2014 2013

Advanced Info Service Public Company Limited and its SubsidiariesStatement of income

Note 2014 2013 2014 2013

RevenuesRevenues from rendering of services and

equipment rentals 5 125,396,923,290 127,816,101,491 62,030,056,662 106,024,435,809

Revenue from sale of goods 5 23,331,862,141 18,995,274,129 8,379,611 516,324,259

Construction income from the Agreements

for operations 3(b) 600,261,701 3,766,442,977 600,261,701 3,639,599,320

Total revenues 149,329,047,132 150,577,818,597 62,638,697,974 110,180,359,388

CostsCost of rendering of services and

equipment rentals 32 (45,206,190,813) (43,136,095,291) (27,065,167,097) (37,444,665,645)

Revenue sharing expense 1 (14,593,801,827) (24,273,347,402) (14,593,801,827) (22,864,248,043)

Cost of sale of goods (23,148,015,893) (17,760,269,921) (8,295,132) (515,767,375)

Construction cost from the Agreements

for operations 3(b) (600,261,701) (3,766,442,977) (600,261,701) (3,639,599,320)

Total costs (83,548,270,234) (88,936,155,591) (42,267,525,757) (64,464,280,383)

Gross profit 65,780,776,898 61,641,663,006 20,371,172,217 45,716,079,005

Selling and administrative expensesSelling expenses 32 (6,219,705,961) (4,331,356,643) (647,636,036) (1,819,177,988)

Administrative expenses 32 (12,640,674,559) (10,545,060,955) (4,727,020,237) (8,735,287,401)

Total selling and administrative expenses (18,860,380,520) (14,876,417,598) (5,374,656,273) (10,554,465,389)

Profit from sales, services and equipment rentals 46,920,396,378 46,765,245,408 14,996,515,944 35,161,613,616 Investment income 5,13,29 370,107,076 548,204,710 24,132,238,049 9,544,154,772

Other operating income 30 329,786,099 322,552,869 857,938,259 627,814,405

Share of loss of associate 12 (3,625,000) - - -

Impairment loss of assets 13,16 (11,972,822) - - (216,000,000)

Net foreign exchange gain (loss) 188,934,345 (233,001,951) 16,760,622 57,558,526

Management benefit expenses 5 (183,866,171) (163,084,715) (183,076,171) (162,774,715)

Finance costs 5,33 (1,526,869,915) (1,002,278,159) (902,333,098) (1,017,269,330)

Profit before income tax expense 46,082,889,990 46,237,638,162 38,918,043,605 43,995,097,274 Income tax expense 34 (10,079,716,669) (10,007,635,247) (4,052,010,256) (7,347,112,959)

Profit for the year 36,003,173,321 36,230,002,915 34,866,033,349 36,647,984,315

Profit attributable to: Owners of the Company 36,033,165,556 36,274,127,624 34,866,033,349 36,647,984,315

Non-controlling interests (29,992,235) (44,124,709) - -


Earnings per share 35

Basic earnings per share 12.12 12.20 11.73 12.33

Diluted earning per share 12.12 12.20 11.73 12.33

Consolidated Separatefinancial statements financial statements

(in Baht)

For the year ended 31 December For the year ended 31 December


5

092





Note(in Baht)

2014 2013 2014 2013

Advanced Info Service Public Company Limited and its SubsidiariesStatement of comprehensive income

Note 2014 2013 2014 2013


Other comprehensive incomeNet change in fair value of available-for-sale

investments 2,428,205 2,863,186 - -

Other comprehensive income for the year, net of income tax 2,428,205 2,863,186 - - Total comprehensive income for the year 36,005,601,526 36,232,866,101 34,866,033,349 36,647,984,315

Total comprehensive income attributable to: Owners of the Company 36,035,572,060 36,276,953,775 34,866,033,349 36,647,984,315

Non-controlling interests (29,970,534) (44,087,674) - -

Total comprehensive income for the year 36,005,601,526 36,232,866,101 34,866,033,349 36,647,984,315

(in Baht)




6

Statement of Comprehensive IncomeAdvanced Info Service Public Company Limited and its Subsidiaries



Financial Report

Stat

emen

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31 D

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32,

973,

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50

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17,3

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26

Bal

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1 D

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2014

2,97

3,09

5,33

0

22

,372

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500,

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se fi

nanc

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tate

men

ts.

8


Financial Report

Stat

emen

t of C

hang

es in

Equ

ityAd

vanc

ed In

fo S

ervic

e Pu

blic

Com

pany

Lim

ited

and

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ubsid

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se fi

nanc

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Sepa

rate

Fin

anci

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tate

men

ts

Note

Reta

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Ear

ning

sO

ther

Com

pone

nts

of E

quity

Res

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for

sh

are-b

ased

pay

men

t

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quity

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Financial Report





Note(in Baht)

2014 2013 2014 2013

Statement of Cash FlowsAdvanced Info Service Public Company Limited and its Subsidiaries


Advanced Info Service Public Company Limited and its SubsidiariesStatement of cash flows

Note 2014 2013 2014 2013

Cash flows from operating activitiesProfit for the year 36,003,173,321 36,230,002,915 34,866,033,349 36,647,984,315

Adjustments for

Depreciation 6,224,630,590 3,037,080,038 496,367,600 607,516,902

Amortisation of intangible assets 12,697,121,500 13,504,064,271 11,354,678,791 11,111,915,640

Impairment loss of assets 13,14,15 11,972,822 - - 216,000,000

Investment income 5,13,29 (370,107,076) (548,204,710) (24,132,238,049) (9,544,154,772)

Finance costs 5,33 1,526,869,915 1,002,278,159 902,333,098 1,017,269,330

Doubtful accounts and bad debts expense 9 1,240,096,982 786,761,009 37,392,229 359,749,826

Share-based payment transaction 26 18,922,262 6,986,352 18,922,262 6,986,352

Allowance for obsolete, decline in value

and write-off inventories 60,996,823 72,978,456 2,341,242 14,139,273

Loss on disposals and write-off of assets 864,996,826 562,133,543 834,544,090 556,336,656

Unrealised (gain) loss on exchange 19,719,184 (3,342,575) (37,711,641) (20,246,438)

Share of loss of associate 12 3,625,000 - - -

Income tax expense 34 10,079,716,669 10,007,635,247 4,052,010,256 7,347,112,959

Cash provided by operation before changes in

operating assets and liabilities 68,381,734,818 64,658,372,705 28,394,673,227 48,320,610,043

Changes in operating assets and liabilities

Specifically-designated bank deposits 71,813,222 (83,289,728) - -

Trade accounts receivable (1,402,917,732) (2,968,007,766) 1,542,974,551 (2,311,658,520)

Other receivables (293,262,059) (989,977,626) 180,562,435 45,227,749

Inventories 284,438,157 (1,511,529,346) 25,517,160 177,101,062

Other current assets (392,022,582) (74,169,116) - 23,791,727

Swap and forward contracts (receivable) payable (24,199,251) (8,053,509) (24,756,405) (8,054,636)

Other non-current assets (40,180,987) (8,380,164) (327,844,267) (241,377,526)

Trade accounts payable 880,463,011 474,589,788 121,040,262 (1,596,514,056)

Other payables 1,530,805,592 2,135,419,423 (2,048,496,459) (2,174,492,655)

Accrued revenue sharing expenses 1,595,406,859 (1,319,943,269) 1,595,406,859 (512,347,632)

Unearned income - mobile phone service 583,510,796 (99,680,385) (505,314,389) (791,705,677)

Advanced receipts from customers 723,400,178 189,893,206 - -

Other current liabilities 190,894,611 66,508,915 190,892,751 137,501,526

Other non-current liabilities 84,478,109 91,621,954 (363,647,909) (69,153,440)

Cash generated from operating activities 72,174,362,742 60,553,375,082 28,781,007,816 40,998,927,965

Income tax paid (9,353,964,849) (9,224,648,109) (4,124,735,021) (6,878,534,223)

Net cash from operating activities 62,820,397,893 51,328,726,973 24,656,272,795 34,120,393,742



(in Baht)


11

098





Note(in Baht)

2014 2013 2014 2013

Statement of Cash FlowsAdvanced Info Service Public Company Limited and its Subsidiaries



Note 2014 2013 2014 2013

Cash flows from investing activitiesInterest received 372,803,497 558,886,730 1,015,193,520 1,316,239,515

Purchase of property, plant, equipment

and computer software (31,731,849,208) (23,013,592,746) (281,229,371) (513,837,398)

Sale of property and equipment 27,409,559 15,618,332 236,965,039 41,228,357

Purchase of intangible assets under

the Agreements for operations (830,272,648) (5,446,556,296) (830,272,648) (5,158,865,300)

Payment of spectrum license (3,656,250,000) - - -

Net increase in short-term loans

to subsidiaries and associate (95,000,000) - (202,860,000) (16,081,900,000)

Net (increase) decrease in other investments 8 82,882,254 (230,973,505) 46,161,440 -

Additional investment in subsidiaries

and associate 13 (3,625,000) - (2,480) (1,135,000,000)

Dividend received 5 10,000,000 - 22,852,750,810 8,215,574,164

Net cash from (used in) investing activities (35,823,901,546) (28,116,617,485) 22,836,706,310 (13,316,560,662)

Cash flows from financing activitiesInterest paid (1,229,812,193) (959,556,015) (918,388,407) (995,143,957)

Other finance costs paid (124,185,478) (20,384,781) (11,680,623) (14,392,840)

Finance lease principal payments (35,511,069) (29,829,880) (25,549,603) (23,876,887)

Net increase (decrease) in short-term loans

from financial institutions (4,000,000,000) 4,000,000,000 (4,000,000,000) 4,000,000,000


from subsidiaries - - (4,400,000,000) 4,400,000,000

Increase in long-term borrowings 21,600,400,000 7,812,480,000 - 7,812,480,000

Decrease in from long-term borrowings (5,370,463,286) (8,485,647,730) (5,370,463,286) (8,486,147,730)

Cash returned paid to non-controlling interests

from liquidation of subsidiaries - (610) - -

Acquisition of non-controllong interests (2,480) - - -

Dividend paid (35,052,352,871) (33,889,117,058) (35,052,203,681) (33,888,991,222)

Net cash used in financing activities (24,211,927,377) (31,572,056,074) (49,778,285,600) (27,196,072,636)

Net increase (decrease) in cash and cash equivalents 2,784,568,970 (8,359,946,586) (2,285,306,495) (6,392,239,556) Cash and cash equivalents at 1 January 11,473,120,876 19,833,022,300 3,964,630,780 10,356,825,174

Effect of exchange rate changes on

balances held in foreign currencies 376,556 45,162 (31,937) 45,162

Cash and cash equivalents at 31 December 14,258,066,402 11,473,120,876 1,679,292,348 3,964,630,780

Supplemental disclosures of cash flow information

Non-cash transactions Outstanding debts arising from investment in property,

plant and equipment, intangible assets under

the Agreements for operations and spectrum license 10,781,561,867 11,528,914,889 128,246,485 585,507,328

financial statements financial statementsFor the year ended 31 December For the year ended 31 December

(in Baht)



12


Note 2014 2013 2014 2013

Cash flows from investing activitiesInterest received 372,803,497 558,886,730 1,015,193,520 1,316,239,515

Purchase of property, plant, equipment

and computer software (31,731,849,208) (23,013,592,746) (281,229,371) (513,837,398)

Sale of property and equipment 27,409,559 15,618,332 236,965,039 41,228,357

Purchase of intangible assets under

the Agreements for operations (830,272,648) (5,446,556,296) (830,272,648) (5,158,865,300)

Payment of spectrum license (3,656,250,000) - - -

Net increase in short-term loans

to subsidiaries and associate (95,000,000) - (202,860,000) (16,081,900,000)

Net (increase) decrease in other investments 8 82,882,254 (230,973,505) 46,161,440 -

Additional investment in subsidiaries

and associate 13 (3,625,000) - (2,480) (1,135,000,000)

Dividend received 5 10,000,000 - 22,852,750,810 8,215,574,164

Net cash from (used in) investing activities (35,823,901,546) (28,116,617,485) 22,836,706,310 (13,316,560,662)

Cash flows from financing activitiesInterest paid (1,229,812,193) (959,556,015) (918,388,407) (995,143,957)

Other finance costs paid (124,185,478) (20,384,781) (11,680,623) (14,392,840)

Finance lease principal payments (35,511,069) (29,829,880) (25,549,603) (23,876,887)


from financial institutions (4,000,000,000) 4,000,000,000 (4,000,000,000) 4,000,000,000


from subsidiaries - - (4,400,000,000) 4,400,000,000

Increase in long-term borrowings 21,600,400,000 7,812,480,000 - 7,812,480,000

Decrease in from long-term borrowings (5,370,463,286) (8,485,647,730) (5,370,463,286) (8,486,147,730)

Cash returned paid to non-controlling interests

from liquidation of subsidiaries - (610) - -

Acquisition of non-controllong interests (2,480) - - -

Dividend paid (35,052,352,871) (33,889,117,058) (35,052,203,681) (33,888,991,222)

Net cash used in financing activities (24,211,927,377) (31,572,056,074) (49,778,285,600) (27,196,072,636)

Net increase (decrease) in cash and cash equivalents 2,784,568,970 (8,359,946,586) (2,285,306,495) (6,392,239,556) Cash and cash equivalents at 1 January 11,473,120,876 19,833,022,300 3,964,630,780 10,356,825,174

Effect of exchange rate changes on

balances held in foreign currencies 376,556 45,162 (31,937) 45,162

Cash and cash equivalents at 31 December 14,258,066,402 11,473,120,876 1,679,292,348 3,964,630,780

Supplemental disclosures of cash flow information

Non-cash transactions Outstanding debts arising from investment in property,

plant and equipment, intangible assets under

the Agreements for operations and spectrum license 10,781,561,867 11,528,914,889 128,246,485 585,507,328

financial statements financial statementsFor the year ended 31 December For the year ended 31 December

(in Baht)



12


Financial Report

Note to the Financial StatementsAdvanced Info Service Public Company Limited and its Subsidiaries

Note Contents

1 General information 2 Basis of preparation of the financial statements 3 Changes in accounting policies 4 Significant accounting policies 5 Related parties 6 Cash and cash equivalents 7 Specifically-designated bank deposits 8 Other investments 9 Trade accounts receivable 10 Other receivables 11 Inventories 12 Investments in associate 13 Investments in subsidiaries 14 Property, plant and equipment 15 Intangible assets under the Agreements for operations 16 Goodwill 17 License for operation right in spectrum of telecommunication 18 Other intangible assets 19 Deferred tax 20 Interest-bearing liabilities 21 Trade accounts payable 22 Other payables 23 Employee benefit obligations 24 Share capital 25 Legal reserve 26 Other components of equity 27 Segment information 28 Revenue of the Company under the NBTC’s regulation 29 Investment income 30 Other operating income 31 Provident fund 32 Expenses by nature 33 Finance costs 34 Income tax expense 35 Earnings per share 36 Dividends 37 Financial instruments 38 Commitments with non-related parties 39 Contingent liabilities 40 Significant events, commercial disputes and litigation 41 Events after the reporting period 42 Thai Financial Reporting Standards (TFRS) not yet adopted 43 Reclassification of accounts

100

Note to the Financial StatementsAdvanced Info Service Public Company Limited and its Subsidiaries

These notes form an integral part of the financial statements.

The financial statements issued for Thai statutory and regulatory reporting purposes are prepared in the Thai language. These English language financial statements have been prepared from the Thai language statutory financial statements, and were approved and authorised for issue by the Board of Directors on 5 February 2015.

1 General Information Advanced Info Service Public Company Limited “the Company”, is incorporated in Thailand and has its registered office at 414 Phaholyothin Road, Phayathai, Bangkok, Thailand.

The Company was listed on the Stock Exchange of Thailand in November 1991.

Intouch Holdings Public Company Limited is a major shareholder, holding 40.45% (2013: 40.45%) of the share capital of the Company and is incorporated in Thailand. SingTel Strategic Investments Pte Ltd. is a shareholder holding 23.32% (2013: 23.32%) of the share capital of the Company and is incorporated in Singapore.

The major principal business operations of the Company and its subsidiaries (“the Group”) are summarised as follows:

1) The operation of a 900-MHz CELLULAR TELEPHONE SYSTEM as the operator. The Company has been granted permission from TOT Public Company Limited (“TOT”), under the Agreement for operation dated 27 March 1990, to operate and service of Cellular Mobile Telephone, either analog (NMT) or Digital GSM, 900 MHz frequency nationwide, parallel operation for 25 years since 1 October 1990, being the first commercial operating date of service. The Agreement ends on 30 September 2015. The Company is obliged to comply with various conditions and pay revenue sharing in accordance with the Agreement.

Under the Agreement, the Company shall be entitled to immediately transfer the ownership right of its tools and equipment or assets for operating the 900-MHz Cellular System to TOT when the installation has been completed and the Company shall pay TOT annual revenue sharing in accordance with the Agreement at the percentage of annual revenues and any benefit from the mobile phone service prior to deducting any expenses and any tax or the minimum annual revenue sharing stipulated in the Agreement. The Agreement does not specify a minimum cumulative amount over the term of the Agreement. The percentages of the service revenues and minimum annual revenue sharing for each year are as follows:

Year Percentage of Revenues Minimum Annual Revenue Sharing

(in million Baht)

1-5 15 13 to 147 6-10 20 253 to 484 11-15 25 677 to 965 16-20 30 1,236 to 1,460 21-25 30 1,460

2) The operation of a DATAKIT VIRTUAL CIRCUIT SWITCH as the operator. Advanced Data network Communications Co., Ltd. (“ADC”), an indirect subsidiary, has been granted permission from TOT Public Company Limited (“TOT”), under the Agreement dated 19 September 1989, for rendering services for DATAKIT VIRTUAL CIRCUIT SWITCH in the area of the Metropolitan Telephone Exchange.


Financial Report

Under the Agreement, ADC shall be entitled to immediately transfer the ownership right of its tools and equipment or assets for operation of DATAKIT System to TOT when the installation has been completed and ADC shall pay TOT annual revenue sharing in accordance with the Agreement at the percentage of annual revenues and any benefit from service of DATAKIT VIRTUAL CIRCUIT SWITCH prior to deducting any expenses and any tax or the minimum annual revenue sharing stipulated in the Agreement.

ADC and TOT have mutually agreed to amend the Agreement and signed the Supplemental Agreement on 25 September 1997 to extend the validity period from 10 years to 25 years (such validity period shall be ended on 24 September 2022) and waive the collection of annual revenue sharing under the agreements effective from 25 September 1997. ADC issued 10.75 million ordinary shares at a par value of Baht 10 (11.23% of total shares) to TOT on 17 March 1998 in consideration of such waiver. As at 31 December 2014, TOT owns 48.12% of ADC’s total shares (2013: 48.12%).

3) The operation of a 1800-MHz CELLULAR TELEPHONE SYSTEM as the operator. Digital Phone Company Limited (“DPC”), a subsidiary, had been granted permission from CAT Telecom Public Company Limited (“CAT”), under the Agreement for operation dated 19 November 1996 (“the Agreement”), to operate and service Cellular Mobile Telephone: Digital PCN (PERSONAL COMMUNICATION NETWORK) 1800, frequency between 1747.9 MHz to 1760.5 MHz and 1842.9 MHz to 1855.5 MHz, nationwide. DPC started the operation commencing from 28 May 1997, ending 15 September 2013 and DPC was obliged to comply with various conditions and pay revenue sharing in accordance with the Agreement.

Under the Agreement, DPC was entitled to immediately transfer the ownership right of its machineries, all equipment and tools or assets for operation to CAT upon installation completion and DPC paid CAT the annual revenue sharing at the percentage of annual revenues and any benefit in according with the accrual basis from the mobile phone service prior to deducting any expenses and any tax and fees which the minimum revenue sharing must accumulate, over the term of the Agreement, not less than Baht 5,400 million as follows:

Year Percentage of Revenues Minimum Annual Revenue Sharing

(in million Baht)

1 25 9 2-9 20 60 to 320 10-14 25 350 to 650 15-16 30 670

As at 31 December 2014, DPC paid the revenue sharing to CAT in a total amount of Baht 15,853 million (2013: Baht 15,853 million).

The Agreement expired on 15 September 2013. Thus, on 16 August 2013, The National Broadcast and Telecommunication Commission (“NBTC”) has announced a temporary customer protection measure after the Agreement expired to assign the operator to provide continuing services to the subscribers for up to a further 1 year commencing from the Agreement expiration date. The operator must comply with the rules and conditions set forth in the announcement. On 17 July 2014, the National Council for Peace and Order (“NCPO”) has announced an order No. 94/2557 “Suspension the implementation of the Act on Organization to Assign Radio Frequency and to Regulate the Broadcasting and Communications Services” to instruct NBTC to postpone an auction for spectrum licenses for 1 year commencing from the Order date. During the postpone period, the operator has to comply with the NBTC’s announcement on 16 August 2013 to provide continuing services to the subscribers.

102

The application of those rules and conditions has yet to be clarified in detail by NBTC (including expenses that may be deducted in arriving at a notional profit payable to the State). Consequently, the outcome of complying with this extension on DPC and the Group is, currently, uncertain.

4) The operation of a 2.1-GHz CELLULAR TELEPHONE SYSTEM as the operator. Advanced Wireless Network Co., Ltd. (“AWN”), a subsidiary, has been granted permission from the Office of the National Broadcasting and Telecommunications Commission (“NBTC”), under the license certificate (“License”) dated 7 December 2012, to operate and service Cellular Mobile Telephone, frequency between 1950 MHz to 1965 MHz and 2140 MHz to 2155 MHz, nationwide in accordance with the license certificate no. NBTC/FREQ/TEL/55/1. AWN started the operation commencing from 7 December 2012, ending 6 December 2027 and AWN is obliged to comply with various conditions and pay fees within the time period as specified in the License.

Details of the Company’s subsidiaries and associate as at 31 December were as follows:

Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements

16

The Agreement expired on 15 September 2013. Thus, on 16 August 2013, The National Broadcast and Telecommunication Commission (“NBTC”) has announced a temporary customer protection measure after the Agreement expired to assign the operator to provide continuing services to the subscribers for up to a further 1 year commencing from the Agreement expiration date. The operator must comply with the rules and conditions set forth in the announcement. On 17 July 2014, the National Council for Peace and Order (“NCPO”) has announced an order No. 94/2557 “Suspension the implementation of the Act on Organization to Assign Radio Frequency and to Regulate the Broadcasting and Communications Services” to instruct NBTC to postpone an auction for spectrum licenses for 1 year commencing from the Order date. During the postpone period, the operator has to comply with the NBTC’s announcement on 16 August 2013 to provide continuing services to the subscribers. The application of those rules and conditions has yet to be clarified in detail by NBTC (including expenses that may be deducted in arriving at a notional profit payable to the State). Consequently, the outcome of complying with this extension on DPC and the Group is, currently, uncertain.

4) The operation of a 2.1-GHz CELLULAR TELEPHONE SYSTEM as the operator. Advanced Wireless Network Co., Ltd. (“AWN”), a subsidiary, has been granted permission from the Office of the National Broadcasting and Telecommunications Commission (“NBTC”), under the license certificate (“License”) dated 7 December 2012, to operate and service Cellular Mobile Telephone, frequency between 1950 MHz to 1965 MHz and 2140 MHz to 2155 MHz, nationwide in accordance with the license certificate no. NBTC/FREQ/TEL/55/1. AWN started the operation commencing from 7 December 2012, ending 6 December 2027 and AWN is obliged to comply with various conditions and pay fees within the time period as specified in the License.

Details of the Company’s subsidiaries and associate as at 31 December were as follows: Country of Ownership interest Name of the entities Type of business incorporation (%) 2014 2013 Advanced Internet Revolution Co., Ltd. On liquidation process Thailand 99.99 99.99 Advanced Datanetwork

Communications Co., Ltd. * (* Indirect subsidiary)

Service provider of online data communications service via telephone land line and optical fiber

Thailand 51.00 51.00

Advanced Contact Center Co., Ltd. Service provider of call

center Thailand 99.99 99.99

Digital Phone Co., Ltd. Service provider of digital

mobile phone system in 1800 MHz frequency


Advanced Magic Card Co., Ltd. Distributor of cash card

business Thailand 99.99 99.99

Advanced Mpay Co., Ltd. Service provider of

electronic payment and cash card


AIN GlobalComm Co., Ltd. Service provider of

international telephone service/gateway


Name of the Entities Type of Business Country of Ownership Interest (%) Incorporation 2014 2013


17

Country of Ownership interest Name of the entities Type of business incorporation (%) 2014 2013 Advanced Wireless Network Co., Ltd. Service provider of

cellular telephone network in 2.1-GHz frequency, distributor of handsets and international telephone service


Super Broadband Network Co., Ltd. Network operator and

telecom service operator i.e. internet (ISP), international & national internet gateway, International Private Leased Circuit (IPLC), Internet Protocol Virtual Private Network (IP VPN), voice over IP, and IP Television


Wireless Device Supply Co., Ltd. Importer and distributor

of handset and accessories

Thailand 99.99 99.99 Mobile Broadband Business Co., Ltd. (* Indirect subsidiary)

Completed the process of liquidation on 28 February 2014

Thailand - -

Advanced Mobile Broadband Co., Ltd. (* Indirect subsidiary)


Thailand - -

Fax Lite Co., Ltd. Operate in land and

building rental and service, and related facilities


MIMO Tech Co., Ltd. Operate IT, content

aggregator, and outsourcing service for billing and collection


Advanced Broadband Network Co., Ltd.

Currently not start the operation


Associate Information Highway Co., Ltd. Transmission network

provider Thailand 29.00 -


Financial Report

Name of the Entities Type of Business Country of Ownership Interest (%) Incorporation 2014 2013


17

Country of Ownership interest Name of the entities Type of business incorporation (%) 2014 2013 Advanced Wireless Network Co., Ltd. Service provider of

cellular telephone network in 2.1-GHz frequency, distributor of handsets and international telephone service


Super Broadband Network Co., Ltd. Network operator and

telecom service operator i.e. internet (ISP), international & national internet gateway, International Private Leased Circuit (IPLC), Internet Protocol Virtual Private Network (IP VPN), voice over IP, and IP Television


Wireless Device Supply Co., Ltd. Importer and distributor

of handset and accessories

Thailand 99.99 99.99 Mobile Broadband Business Co., Ltd. (* Indirect subsidiary)


Thailand - -

Advanced Mobile Broadband Co., Ltd. (* Indirect subsidiary)


Thailand - -

Fax Lite Co., Ltd. Operate in land and

building rental and service, and related facilities


MIMO Tech Co., Ltd. Operate IT, content

aggregator, and outsourcing service for billing and collection


Advanced Broadband Network Co., Ltd.



Associate Information Highway Co., Ltd. Transmission network

provider Thailand 29.00 -

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2 Basis of Preparation of the Financial Statements(a) Statement of compliance

The financial statements are prepared in accordance with Thai Financial Reporting Standards (TFRS); guidelines promulgated by the Federation of Accounting Professions (“FAP”); and applicable rules and regulations of the Thai Securities and Exchange Commission.

The FAP has issued the following new and revised TFRS relevant to the Group’s/Company’s operations and effective for accounting periods beginning on or after 1 January 2014:

TFRS Topic

TAS 1 (revised 2012) Presentation of Financial StatementsTAS 7 (revised 2012) Statement of Cash FlowsTAS 12 (revised 2012) Income TaxesTAS 17 (revised 2012) LeasesTAS 18 (revised 2012) RevenueTAS 19 (revised 2012) Employee BenefitsTAS 21 (revised 2012) The Effects of Changes in Foreign Exchange RatesTAS 24 (revised 2012) Related Party DisclosuresTAS 28 (revised 2012) Investments in AssociatesTAS 31 (revised 2012) Interests in Joint VenturesTAS 34 (revised 2012) Interim Financial ReportsTAS 36 (revised 2012) Impairments of AssetsTAS 38 (revised 2012) Intangible AssetsTFRS 2 (revised 2012) Share-based PaymentTFRS 5 (revised 2012) Non-current Assets held for Sale and Discontinued OperationsTFRS 8 (revised 2012) Operating SegmentsTFRIC 1 Changes in Existing Decommissioning, Restoration and Similar LiabilitiesTFRIC 4 Determining whether an Arrangement contains a LeaseTFRIC 10 Interim Financial Reporting and ImpairmentTFRIC 12 Service Concession ArrangementsTFRIC 13 Customer Loyalty ProgrammesTFRIC 17 Distributions of Non-cash Assets to OwnersTFRIC 18 Transfers of Assets from CustomersTIC 15 Operating Leases-IncentivesTIC 27 Evaluating the Substance of Transactions Involving the Legal Form of a LeaseTIC 29 Service Concession Arrangements – DisclosureTIC 32 Intangible Assets-Web Site Costs


Financial Report

The initial application of these new and revised TFRS has resulted in changes in certain of the Group’s/Company’s accounting policies. The effects of these changes, where such effects are considered material to the financial statements, are disclosed in note 3.

In addition to the above new and revised TFRS, the FAP has issued a number of other new and revised TFRS which are effective for financial statements beginning on or after 1 January 2015 and have not been adopted in the preparation of these financial statements. Those new and revised TFRS that are relevant to the Group’s/Company’s operations are disclosed in note 42.

(b) Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following material items in the statements of financial position:

- derivative financial instruments are measured at fair value; - financial instruments at fair value through profit or loss are measured at fair value; - available-for-sale financial assets are measured at fair value.

(c) Functional and Presentation currency

The financial statements are presented in Thai Baht, which is the Group/Company’s functional currency. All financial information presented in Thai Baht has been rounded in the notes to the financial statements to the nearest million unless otherwise stated.

(d) Use of estimates and judgements

The preparation of financial statements in conformity with TFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which estimates are revised and in any future periods affected.

Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements is included in the following notes:

Note 4(s) Current and deferred taxationNote 9 Allowance for doubtful accountsNote 11 Allowance for obsolete inventoriesNote 14 Utilisation of property, plant and equipmentNote 15 Utilisation of intangible asset under the Agreement for operationsNote 13, 16 Key assumptions used in discounted cash flow projectionsNote 18 Utilisation of intangible assetsNote 23 Measurement of employee benefit obligationsNote 37 Valuation of financial instrumentsNote 39, 40 Provisions and contingencies / Significant events, commercial disputes and litigation

106

3 Changes in Accounting Policies(a) Overview

From 1 January 2014, consequent to the adoption of new and revised TFRS as set out in note 2, the Group/Company has changed its accounting policies in the following areas having a material effect on the Group’s/Company’s financial statements:

• Accountingforserviceconcessionarrangements

A description of the nature and effect of these changes in accounting policy are included in notes 3(b) below:

(b) Accounting for service concession arrangements

From 1 January 2014, the Group/Company has adopted TFRIC 12 - Service concession arrangements.

TFRIC 12 gives guidance on the accounting by operators for public-to-private service concession agreements under which the grantor controls and regulates the services provided; to whom they are provided; and at what price; and also controls any significant residual interest in the related infrastructure at the end of the agreement term. The operator recognises its interest in the concession as either a financial asset or an intangible asset arising from the concession agreement, depending on criteria set out in TFRIC 12, and not as property, plant and equipment. The Group’s/Company’s accounting policy for service concession arrangements is as follows:

The Group/Company recognises an intangible asset arising from the Agreements for operation when it has a right to charge for usage of infrastructure of the Agreements for operation. An intangible asset received as consideration for providing construction or upgrade services in the Agreements for operation is measured at fair value upon initial recognition. Subsequent to initial recognition the intangible asset is measured at cost, which includes capitalised borrowing costs, less accumulated amortisation and accumulated impairment losses.

Revenue relating to construction or upgrade services under the Agreements for operation is recognised based on the stage of completion of the work performed. Operation or service revenue is recognised in the period in which the services are provided by the Group/Company. When the Group/Company provides more than one service in the Agreements for operation, the consideration received is allocated by reference to the relative fair values of the services delivered.

The Group/Company has recognised no profit margin on such revenues because the (i) model of the Agreements for operation is not designed to generate profits from the infrastructure construction, but from the service rendering; (ii) the way the Group/Company manages the constructions is highly based on outsourced services and; (iii) there are no profit margins on the infrastructure construction in the Group’s/Company’s business and operations. Management believes that any gains on these operations are irrelevant and, accordingly, no amounts in addition to the effective costs have been considered as a part of revenues. Therefore, construction revenues and costs are presented in the statements of income in the same amounts.

4 Significant Accounting Policies The accounting policies set out below have been applied consistently to all periods presented in these financial statements except as explained in note 3, which addresses change in accounting policies.

(a) Basis of consolidation

The consolidated financial statements relate to the Company and its subsidiaries (together referred to as the “Group”).

Business combinations

The Group/Company applies the acquisition method for all business combinations other than those with entities under common control.

Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group/Company takes into consideration potential voting rights that currently are exercisable. The acquisition date is the date on which control is transferred to the acquirer. Judgement is applied in determining the acquisition date and determining whether control is transferred from one party to another.

Goodwill is measured as the fair value of the consideration transferred including the recognised amount of any non-controlling interest in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed, all measured as of the acquisition date.

Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Group/Company to the previous owners of the acquiree, and equity interests issued by the Group/Company. Consideration transferred also includes the fair value of any contingent consideration and share-based payment awards of the acquiree that are replaced mandatorily in the business combination. If a business combination results in the termination of pre-existing relationships between the Group/Company and the acquiree, then the lower of the termination amount, as contained in the agreement, and the value of the off-market element is deducted from the consideration transferred and recognised in other expenses.

When share-based payment awards exchanged (replacement awards) for awards held by the acquiree’s employees (acquiree’s awards) relate to past services, then a part of the market-based measure of the awards replaced is included in the consideration transferred. If they require future services, then the difference between the amount included in consideration transferred and the market-based measure of the replacement awards is treated as post-combination compensation cost.


Financial Report

The effects of the change are recognised retrospectively in the financial statements. The impact of the change on the financial statements is as follows:

งบการเงินรวม งบการเงินเฉพาะกิจการ(in million Baht)

2014 2013 2014 2013Statement of Income for the Year Ended 31 December

Increase in construction income from the Agreements for operation 600 3,766 600 3,640

Increase in construction cost from the Agreements for operation (600) (3,766) (600) (3,640)

Profit (loss) - - - -

Consolidated Financial Statements Separate Financial Statements

4 Significant Accounting Policies The accounting policies set out below have been applied consistently to all periods presented in these financial statements except as explained in note 3, which addresses change in accounting policies.

(a) Basis of consolidation

The consolidated financial statements relate to the Company and its subsidiaries (together referred to as the “Group”).

Business combinations

The Group/Company applies the acquisition method for all business combinations other than those with entities under common control.

Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group/Company takes into consideration potential voting rights that currently are exercisable. The acquisition date is the date on which control is transferred to the acquirer. Judgement is applied in determining the acquisition date and determining whether control is transferred from one party to another.

Goodwill is measured as the fair value of the consideration transferred including the recognised amount of any non-controlling interest in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed, all measured as of the acquisition date.

Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Group/Company to the previous owners of the acquiree, and equity interests issued by the Group/Company. Consideration transferred also includes the fair value of any contingent consideration and share-based payment awards of the acquiree that are replaced mandatorily in the business combination. If a business combination results in the termination of pre-existing relationships between the Group/Company and the acquiree, then the lower of the termination amount, as contained in the agreement, and the value of the off-market element is deducted from the consideration transferred and recognised in other expenses.

When share-based payment awards exchanged (replacement awards) for awards held by the acquiree’s employees (acquiree’s awards) relate to past services, then a part of the market-based measure of the awards replaced is included in the consideration transferred. If they require future services, then the difference between the amount included in consideration transferred and the market-based measure of the replacement awards is treated as post-combination compensation cost.

108

A contingent liability of the acquiree is assumed in a business combination only if such a liability represents a present obligation and arises from a past event, and its fair value can be measured reliably.

The Group/Company measures any non-controlling interest at its proportionate interest in the identifiable net assets of the acquiree.

Transaction costs that the Group/Company incurs in connection with a business combination, such as legal fees, and other professional and consulting fees are expensed as incurred.

Acquisitions from entities under common control

Business combinations of entities or businesses under common control are accounted for using a method similar to the pooling of interest method and in accordance with the Guideline issued in 2009 by the FAP.

Subsidiaries

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

The accounting policies of subsidiaries have been changed where necessary to align them with the policies adopted by the Group. Losses applicable to non-controlling interests in a subsidiary are allocated to non- controlling interests even if doing so causes the non- controlling interests to have a deficit balance.

Loss of control

Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

Associate

Associate is the entity in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity.

Investment in associate is accounted for in the consolidated financial statements using the equity method (equity-accounted investees) and is recognised initially at cost. The cost of the investment includes transaction cost.

The consolidated financial statements include the Group’s share of profit or loss and other comprehensive income of equity accounted investees from the date that significant influence commences until the date that significant influence ceases. When the Group’s share of losses exceeds its interest in an equity accounted investee, the Group’s carrying amount of that interest is reduced to zero and recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.


Financial Report

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(b) Foreign currencies

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currency (Thai Baht) of the Group entities at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the foreign exchange rates ruling at that date. Foreign exchange differences arising on translation are recognised in profit or loss.

Non-monetary assets and liabilities measured at cost in foreign currencies are translated to the functional currency using the foreign exchange rates ruling at the dates of the transactions.

(c) Derivative financial instruments

The Group/Company uses financial instruments to manage exposure to fluctuations in foreign currency exchange and interest rates. These instruments, which mainly comprise forward foreign currency contracts and cross currency swap agreements, are recorded in the financial statements on the contract date. The purpose of these instruments is to manage risk.

Forward foreign exchange contracts protect the Group/Company from fluctuations in exchange rates by establishing the rate at which a foreign currency asset or liability will be settled. Forward contracts are recorded as forward contracts receivable and payable on inception, and are translated at the year end exchange rate. Unrealised gains or losses on transactions are recognised in profit and loss. Premiums or discounts are amortised in the statement of income on a straight-line basis over the contract period.

Interest rate derivatives help the Group/Company to better manage effects from fluctuations in floating interest rates. Any differential to be received or paid on an interest rate derivative is recognised as a component of interest income or expense over the period of such instrument. Gains or losses of early termination of interest rate derivatives or on repayment of the borrowing are charged to profit or loss.

(d) Cash and cash equivalents

Cash and cash equivalents in the statements of cash flows comprise cash balances, call deposits and highly liquid short-term investments with original maturities of three month or less.

(e) Trade and other accounts receivable

Trade and other accounts receivable are stated at their invoice value less allowance for doubtful accounts.

The allowance for doubtful accounts is assessed primarily on analysis of payment histories and future expectations of customer payments. Bad debts are written off when incurred.

110

(f) Inventories

Inventories comprise mobile phones, refill cards, sim cards, premiums and spare parts used for repairs and services.

Inventories are stated at the lower of cost and net realisable value.

Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost is calculated as follows:

Finished goods - moving weighted average methodSpare parts (mobile phones and network) - moving weighted average methodDatanet equipment - first-in, first-out (FIFO) method

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs to complete and to make the sale.

An allowance is made for all deteriorated, changed, obsolete and slow-moving inventories.

(g) Investments

Investments in associate and subsidiaries

Investments in subsidiaries in the separate financial statements of the Company are accounted for using the cost method less impairment losses. Investment in associate in the consolidated financial statements is accounted for using the equity method.

Investments in other debt and equity securities Fixed deposit at bank is presented as part of current investment with maturities over three months, not exceeding one year.

Debt securities and marketable equity securities held for trading are classified as current assets and are stated at fair value, with any resultant gain or loss recognised in profit or loss.

Debt securities that the Group/Company has the positive intent and ability to hold to maturity are classified as held-to-maturity investments. Held-to-maturity investments are stated at amortised cost less any impairment losses. The difference between the acquisition cost and redemption value of such debt securities is amortised using the effective interest rate method over the period to maturity.

Debt securities and marketable equity securities, other than those securities held for trading or intended to be held to maturity, are classified as available-for-sale investments. Available-for-sale investments are, subsequent to initial recognition, stated at fair value, and changes therein, other than impairment losses and foreign currency differences on available-for-sale monetary items, are recognised directly in equity. Impairment losses and foreign exchange differences are recognised in profit or loss. When these investments are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in profit or loss. Where these investments are interest-bearing, interest calculated using the effective interest method is recognised in the profit or loss.

Equity securities which are not marketable are stated at cost less any impairment losses.


Financial Report

The fair value of financial instruments classified as held-for-trading and available-for-sale is determined as the quoted bid price at the reporting date.

Disposal of investments On disposal of an investment, the difference between net disposal proceeds and the carrying amount together with the associated cumulative gain or loss that was reported in equity is recognised in profit or loss.

If the Group/Company disposes of part of its holding of a particular investment, the deemed cost of the part sold is determined using the FIFO method applied to the carrying value of the total holding of the investment.

(h) Property, plant and equipment

Recognition and measurement

Owned assets

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located, and capitalised borrowing costs. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised net in profit or loss. When revalued assets are sold, the amounts included in the revaluation reserve are transferred to retained earnings.

Leased assets

Leases in terms of which the Group/Company substantially assumes all the risk and rewards of ownership are classified as finance leases. Property, plant and equipment acquired by way of finance leases is capitalised at the lower of its fair value and the present value of the minimum lease payments at the inception of the lease, less accumulated depreciation and impairment losses. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to profit or loss.

112

Subsequent costs

The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group/Company, and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

Depreciation

Depreciation is calculated based on the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value.

Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment. The estimated useful lives are as follows:

Buildings and building improvements 5, 20 yearsLeasehold building improvements 5, 10 yearsComputer, tools and equipment 2-20 yearsFurniture, fixtures and office equipment 2-5 yearsCommunication equipment for rental 3 yearsCommunication equipment for major corporate customer rental Over period of rental agreementVehicles 5 years

No depreciation is provided on freehold land or assets under construction and installation.

Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

(i) Intangible assets

Assets under the Agreements for operations

Assets under the Agreements for operations represent the cost of certain equipment and other assets which have been or have to be transferred to the grantor of the Agreements of operations and are stated at cost less accumulated amortisation and impairment losses.

Goodwill

Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets. The measurement of goodwill at initial recognition is described in note 4(a). Subsequent to initial recognition, goodwill is measured at cost less accumulated impairment losses. In respect of equity-accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and an impairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity-accounted investee.

License for operation right in spectrum of telecommunication

License for operation right in spectrum of telecommunication represents the acquisition cost of license to operate a mobile phone system under 2.1-GHz.


Financial Report

The operation right

The operation right represents the acquisition cost of certain rights and obligations to operate a mobile phone system.

Other intangible assets

Other intangible assets that are acquired by the Group/Company, which have finite useful lives, are measured at cost less accumulated amortisation and accumulated impairment losses.

Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.

Amortisation

Amortisation is based on the cost of the asset, or other amount substituted for cost, less its residual value.

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

The estimated useful lives are as follows:

Assets under the Agreements for operations

- Mobile phone network digital system 10 years not exceeding the remaining period of the Agreement for operations

- Datanet tools and equipments 10 years not exceeding the remaining period of the Agreement for operations

- Computer system under the Agreement for 5 years not exceeding the remaining period operation of 1800-MHz operation of the Agreement for operations

Software licences and software development costs 5, 10 years

License for operation right in spectrum Over the period of the licenseof telecommunication

The operation right Over the period of the Agreement for operations

No amortisation is provided on advance payment and assets under construction of the assets under the Agreements for operations.

Amortisation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

114

( j ) Other assets

Deferred charges

Deferred charges represent commitment fees for long-term loans, costs of long-term leases of space for base stations, expenditures relating to the increase of power of electricity at base stations and expenditures relating to the improvement project of mobile phone service network and are stated at cost less accumulated amortisation and impairment losses.

Amortisation

Amortisation is based on the cost of the asset, or other amount substituted for cost, less its residual value.

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful lives for the current and comparative periods are as follows:

Commitment fees of long-term loans Over the loan agreement period

Bond issuing cost Over the debentures period

Costs of long-term leases for base stations Over the lease agreement period

Expenditures relating to the increase Over the remaining period of the Agreement of power of electricity at base stations of operation period

Expenditures relating to the improvement project 4 years of mobile phone service network

Operation right of the datanet service 10 years not exceeding the remaining period of the Agreement for operations

(k) Impairment

The carrying amounts of the Group’s/Company’s assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated. For goodwill and intangible assets that have indefinite useful lives or are not yet available for use, the recoverable amount is estimated each year at the same time.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recover-able amount. The impairment loss is recognised in profit or loss.

When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is objective evidence that the value of the asset is impaired, the cumulative loss that had been recognised directly in equity is recognised in profit or loss even though the financial asset has not been derecognised. The amount of the cumulative loss that is recognised in profit or loss is the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognised in profit or loss.


Financial Report

Calculation of recoverable amount The recoverable amount of held-to-maturity securities and receivables carried at amortised cost is calculated as the present value of the estimated future cash flows discounted at the original effective interest rate. Receivables with a short duration are not discounted.

The recoverable amount of available-for-sale financial assets is calculated by reference to the fair value.

The recoverable amount of a non-financial asset is the greater of the assets’ value in use and fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

Reversals of impairment

An impairment loss in respect of a financial asset is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised in profit or loss. For financial assets carried at amortised cost and available-for-sale financial assets that are debt securities, the reversal is recognised in profit or loss. For available-for-sale financial assets that are equity securities, the reversal is recognised in other comprehensive income.

An impairment loss in respect of goodwill is not reversed. Impairment losses recognised in prior periods in respect of other non-financial assets are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

( l ) Interest-bearing liabilities

Interest-bearing liabilities are recognised initially at fair value less attributable transaction charges. Subsequent to initial recognition, interest-bearing liabilities are stated at amortised cost with any difference between cost and redemption value being recognised in profit or loss over the period of the borrowings on an effective interest basis.

(m) Trade and other accounts payable

Trade and other accounts payable are stated at cost.

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(n) Employee benefits

Provident fund

The Group/Company had provident funds which is a defined contribution plan. The fund’s asset of the provident fund is separated from the Group’s/Company’s asset and has been managed by a licensed fund manager. The provident fund receives a cash contribution from employee and the related Group/Company. The contribution expenditure of the provident fund is recognised as expense in profit or loss as accrued.

Employee benefit obligations and long-term service award

The obligation in respect of post-employment benefits that provide compensation according to labor law and long-term service award are recognised in the financial statements based on calculations by a qualified actuary using the projected unit credit method.

The Group/Company recognised all actuarial gain and loss arising from employee benefit obligations in other comprehensive income and all expenses related to employee benefit obligations in profit or loss.

Termination benefits

Termination benefits are recognised as an expense when the Group/Company is committed demonstrably, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognised as an expense if the Group/Company has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months after the reporting period, then they are discounted to their present value.

Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonus or profit sharing plans if the Group/Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

(o) Provisions

A provision is recognised if, as a result of a past event, the Group/Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.


Financial Report

(p) Revenue

Revenue excludes value added tax and is arrived at after deduction of trade discounts and volume rebates.

Sale of goods and services rendered

Revenue is recognised in profit or loss when the significant risks and rewards of ownership have been transferred to the buyer. No revenue is recognised if there is continuing management involvement with the goods or there are significant uncertainties regarding recovery of the consideration due, associated costs or the probable return of goods. Service income is recognised as services are provided. Revenue from mobile phone and call center services are recognised when services are rendered to customers. Revenue from rendering voice/data communications via telephone line network services is recognised when service is rendered.

Rental income

Rental income from rental equipment is recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income.

Service concession arrangements

Revenue relating to construction or upgrade services under a service concession arrangement is recognised based on the stage of completion of the work performed. Operation or service revenue is recognised in the period in which the services are provided by the Group/Company. When the Group/Company provides more than one service in a service concession arrangement, the consideration received is allocated by reference to the relative fair values of the services delivered.

Investments

Revenue from investments comprises dividend and interest income from investments and bank deposits.

Dividend income Dividend income is recognised in profit or loss on the date the Group’s/Company’s right to receive payments is established.

Interest income Interest income is recognised in profit or loss as it accrues.

(q) Finance costs

Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions and contingent consideration, losses on disposal of available-for-sale financial assets, fair value losses on financial assets at fair value through profit or loss, impairment losses recognised on financial assets (other than trade receivables), and losses on hedging instruments that are recognised in profit or loss.

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

118

(r) Lease payments

Payments made under operating leases are recognised in profit or loss on a straight line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease.

Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

Determining whether an arrangement contains a lease

At inception of an arrangement, the Group/Company determines whether such an arrangement is or contains a lease. A specific asset is the subject of a lease if fulfilment of the arrangement is dependent on the use of that specified asset. An arrangement conveys the right to use the asset if the arrangement conveys to the Group/Company the right to control the use of the underlying asset.

At inception or upon reassessment of the arrangement, the Group/Company separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Group/Company concludes for a finance lease that it is impracticable to separate the payments reliably, an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. Subsequently the liability is reduced as payments are made and an imputed finance charge on the liability is recognised using the Group’s/Company’s incremental borrowing rate.

(s) Income tax

Income tax expense for the year comprises current and deferred tax. Current and deferred tax are recognised in profit or loss except to the extent that they relate to a business combination, or items recognised directly in equity or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised if it is probable that they will not be utilised in the foreseeable future.

The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they adjust, using tax rates enacted or substantively enacted at the reporting date.

In determining the amount of current and deferred tax, the Group/Company takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. The Group/Company believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including


Financial Report

interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and may involve a series of judgements about future events. New information may become available that causes the Group/Company to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realised.

(t) Earnings per share

The Group/Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees.

(u) Segment reporting

Segment results that are reported to the Group’s CEO (the chief operating decision maker) include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

5 Related Parties Enterprises and individuals that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with the Company, including holding companies, subsidiaries and fellow subsidiaries are related parties of the Company. Individuals owning, directly or indirectly, an interest in the voting power of the Company that gives them significant influence over the enterprise, key management personnel, including directors and officers of the Company and close members of the family of these individuals and companies associated with these individuals also constitute related parties.

In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the legal form.

During the year, the Group/Company has entered into a number of transactions with related parties, the terms of which are negotiated in the ordinary course of business and according to normal trade conditions. Purchases of products and services are charged at reasonable prices and those prices are comparable to the market rate with general trading conditions. Consulting and management service fees are charged on a mutually agreed basis as a percentage of assets.

120

Name of Entities

Country of Nature Relationships

Incorporation/ nationality


33

5 Related parties Enterprises and individuals that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with the Company, including holding companies, subsidiaries and fellow subsidiaries are related parties of the Company. Individuals owning, directly or indirectly, an interest in the voting power of the Company that gives them significant influence over the enterprise, key management personnel, including directors and officers of the Company and close members of the family of these individuals and companies associated with these individuals also constitute related parties. In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the legal form. During the year, the Group/Company has entered into a number of transactions with related parties, the terms of which are negotiated in the ordinary course of business and according to normal trade conditions. Purchases of products and services are charged at reasonable prices and those prices are comparable to the market rate with general trading conditions. Consulting and management service fees are charged on a mutually agreed basis as a percentage of assets. Relationships with related parties that control or jointly control the Company or are being controlled or jointly controlled by the Company or have transactions with the Group were as follows: Name of entities

Country of incorporation/ nationality

Nature of relationships

Subsidiaries Thailand More than 50% shareholding or being controlled.

Intouch Holdings Public Company Limited and its related parties (“INTOUCH Group”)

Thailand and Laos

Intouch Holdings Public Company Limited (“INTOUCH”) is a major shareholder, 40.45% shareholding and has some joint directors.

SingTel Strategic Investments Pte Ltd. and its related parties (“SingTel Group”)

Singapore SingTel Strategic Investments Pte Ltd. (“SingTel”) is a major shareholder, 23.32% shareholding.

Information Highway Co., Ltd. Thailand Associate

Other related parties Thailand Other parties have some joint directors and directors of related parties.

Relationships with related parties that control or jointly control the Company or are being controlled or jointly con-trolled by the Company or have transactions with the Group were as follows:


Financial Report

Significant transactions for the years ended 31 December with related parties were as follows:


(in million Baht) 2014 2013 2014 2013

Year ended 31 December


34

Significant transactions for the years ended 31 December with related parties were as follows: Consolidated Separate financial statements financial statements Year ended 31 December 2014 2013 2014 2013 (in million Baht)

Service income Subsidiaries - - 36,172 13,522 INTOUCH Group 42 70 22 24 SingTel Group 434 593 77 514 Other related parties 2 2 1 2 Total 478 665 36,272 14,062

Sales of prepaid cards

Subsidiaries - - - 137

Sales of Refill on mobile (ROM)


Sales of property and other assets

Subsidiaries - - 227 24

Dividend income

Subsidiaries - - 22,848 8,216

Interest income

Subsidiaries - - 1,220 1,102 Associate 2 - - - Total 2 - 1,220 1,102

Other income

Subsidiaries - - 704 731 INTOUCH Group 7 4 - - Total 7 4 704 731

Rental and other service expenses Subsidiaries - - 11,411 21,128 INTOUCH Group 563 674 72 72 SingTel Group 555 526 117 290 Other related parties - 1 - 1 Total 1,118 1,201 11,600 21,491

Advertising expense INTOUCH Group 285 1,345 25 475

Sale promotion expense Subsidiaries - - 36 136 INTOUCH Group 1 1 - 1 Total 1 1 36 137

Commission expense Subsidiary - - 1,234 4,188

Management benefit expense 184 163 183 163

Purchases of property and other assets Subsidiaries - - 41 272


34

Significant transactions for the years ended 31 December with related parties were as follows: Consolidated Separate financial statements financial statements Year ended 31 December 2014 2013 2014 2013 (in million Baht)

Service income Subsidiaries - - 36,172 13,522 INTOUCH Group 42 70 22 24 SingTel Group 434 593 77 514 Other related parties 2 2 1 2 Total 478 665 36,272 14,062

Sales of prepaid cards


Sales of Refill on mobile (ROM)


Sales of property and other assets

Subsidiaries - - 227 24

Dividend income

Subsidiaries - - 22,848 8,216

Interest income

Subsidiaries - - 1,220 1,102 Associate 2 - - - Total 2 - 1,220 1,102

Other income

Subsidiaries - - 704 731 INTOUCH Group 7 4 - - Total 7 4 704 731

Rental and other service expenses Subsidiaries - - 11,411 21,128 INTOUCH Group 563 674 72 72 SingTel Group 555 526 117 290 Other related parties - 1 - 1 Total 1,118 1,201 11,600 21,491

Advertising expense INTOUCH Group 285 1,345 25 475

Sale promotion expense Subsidiaries - - 36 136 INTOUCH Group 1 1 - 1 Total 1 1 36 137

Commission expense Subsidiary - - 1,234 4,188

Management benefit expense 184 163 183 163

Purchases of property and other assets Subsidiaries - - 41 272

122

Balances as at 31 December with related parties were as follows:


(in million Baht) 2014 2013 2014 2013

Year ended 31 December


35

Consolidated Separate financial statements financial statements Year ended 31 December 2014 2013 2014 2013 (in million Baht)

Finance costs Subsidiaries - - 168 42 INTOUCH Group - 1 - 1 Other related parties 1 - - - Total 1 1 168 43

Dividend paid INTOUCH 14,180 13,711 14,180 13,711 SingTel 8,175 7,904 8,175 7,904 Total 22,355 21,615 22,355 21,615 Balances as at 31 December with related parties were as follows:

Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht)

Trade accounts receivable Subsidiaries - - 5,049 3,962 INTOUCH Group 5 11 2 4 SingTel Group 17 96 - 93 Total 22 107 5,051 4,059

Accrued income Subsidiaries - - 2,292 2,913 INTOUCH Group 5 3 - - SingTel Group 3 30 3 29 Total 8 33 2,295 2,942

Other receivables - Other receivable Subsidiaries - - - 1 - Accrued interest income Subsidiaries - - 444 176 Total - - 444 177

Short-term loans to related parties Subsidiaries - - 35,590 35,387 Associate 95 - - - Total 95 - 35,590 35,387 As at 31 December 2014, the Group has short-term loans to associate bearing interest at the rate of 5.25% per annum and the Company has short-term loans at call to subsidiaries represent promissory notes, bearing interest at the rate of 3.83% per annum (2013: 3.73% per annum).


(in million Baht) 2014 2013 2014 2013


35

Consolidated Separate financial statements financial statements Year ended 31 December 2014 2013 2014 2013 (in million Baht)

Finance costs Subsidiaries - - 168 42 INTOUCH Group - 1 - 1 Other related parties 1 - - - Total 1 1 168 43

Dividend paid INTOUCH 14,180 13,711 14,180 13,711 SingTel 8,175 7,904 8,175 7,904 Total 22,355 21,615 22,355 21,615 Balances as at 31 December with related parties were as follows:

Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht)

Trade accounts receivable Subsidiaries - - 5,049 3,962 INTOUCH Group 5 11 2 4 SingTel Group 17 96 - 93 Total 22 107 5,051 4,059

Accrued income Subsidiaries - - 2,292 2,913 INTOUCH Group 5 3 - - SingTel Group 3 30 3 29 Total 8 33 2,295 2,942

Other receivables - Other receivable Subsidiaries - - - 1 - Accrued interest income Subsidiaries - - 444 176 Total - - 444 177

Short-term loans to related parties Subsidiaries - - 35,590 35,387 Associate 95 - - - Total 95 - 35,590 35,387 As at 31 December 2014, the Group has short-term loans to associate bearing interest at the rate of 5.25% per annum and the Company has short-term loans at call to subsidiaries represent promissory notes, bearing interest at the rate of 3.83% per annum (2013: 3.73% per annum).

As at 31 December 2014, the Group has short-term loans to associate bearing interest at the rate of 5.25% per annum and the Company has short-term loans at call to subsidiaries represent promissory notes, bearing interest at the rate of 3.83% per annum (2013: 3.73% per annum).


Financial Report

Movements during the years ended 31 December of loans to related parties were as follows:


(in million Baht) 2014 2013 2014 2013


(in million Baht) 2014 2013 2014 2013

As at 31 December 2013, short-term loan from related parties represent promissory notes, bearing interest at the rate of 2.49% per annum.


36

Movements during the years ended 31 December of loans to related parties were as follows: Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) Short-term loans to related parties At 1 January - - 35,387 19,305 Increase 100 - 14,648 19,240 Decrease (5) - (14,445) (3,158) At 31 December 95 - 35,590 35,387 Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht)

Long-term rental deposit Subsidiary - - 655 265 Trade accounts payable Subsidiaries - - 886 500 INTOUCH Group 30 41 1 1 SingTel Group 21 22 20 - Total 51 63 907 501

Other payables

- Other payable Subsidiaries - - 308 829 INTOUCH Group 30 57 1 17 SingTel Group - 12 - 12 30 69 309 858 - Accrued expenses Subsidiaries - - 810 1,522 INTOUCH Group 118 381 19 50 SingTel Group 12 57 10 24 130 438 839 1,596 Total 160 507 1,148 2,454

Short-term loan from related parties

Subsidiaries - - - 4,400 As at 31 December 2013, short-term loan from related parties represent promissory notes, bearing interest at the rate of 2.49% per annum.


36

Movements during the years ended 31 December of loans to related parties were as follows: Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) Short-term loans to related parties At 1 January - - 35,387 19,305 Increase 100 - 14,648 19,240 Decrease (5) - (14,445) (3,158) At 31 December 95 - 35,590 35,387 Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht)

Long-term rental deposit Subsidiary - - 655 265 Trade accounts payable Subsidiaries - - 886 500 INTOUCH Group 30 41 1 1 SingTel Group 21 22 20 - Total 51 63 907 501

Other payables

- Other payable Subsidiaries - - 308 829 INTOUCH Group 30 57 1 17 SingTel Group - 12 - 12 30 69 309 858 - Accrued expenses Subsidiaries - - 810 1,522 INTOUCH Group 118 381 19 50 SingTel Group 12 57 10 24 130 438 839 1,596 Total 160 507 1,148 2,454


Subsidiaries - - - 4,400 As at 31 December 2013, short-term loan from related parties represent promissory notes, bearing interest at the rate of 2.49% per annum.

124

Movements during the years ended 31 December of loans from related parties of the Company were as follows:


37

Movements during the years ended 31 December of loans from related parties of the Company were as follows: Separate financial statements 2014 2013 (in million Baht) Short-term loans from related parties Subsidiaries At 1 January 4,400 - Increase 14,200 5,500 Decrease (18,600) (1,100) At 31 December - 4,400

Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) Long-term debentures INTOUCH Group 17 - - - Other related parties 17 3 - 3 Total 34 3 - 3 Significant agreements with related parties The Group/Company has entered into agreements with related parties and has commitment for receipts and payments according to rates under the terms and conditions stipulated in the agreements. The significant agreements with related parties are as follows:

1) The Group has entered into interconnection and national roaming agreements among its related

parties. The suspension or termination of the agreement shall be referred to the regulations and conditions of the National Telecommunications Commission.

2) The Group has entered into site share agreements among its related parties to provide site area including related facilities for installation of telecommunication equipment. The counterparty has a right to terminate the agreement by giving advance written notice to the counterparty of not less than 60 days.

3) The Group has received a service of a call center from Advanced Contact Center Co., Ltd. (“ACC”), a subsidiary. ACC will provide service and required information including resolving problem requests from the customers of the Group.

4) Advanced Contact Center Co., Ltd., a subsidiary, has entered into a call center service agreement with Teleinfo Media Plc. (“TMC”), a related party. TMC will arrange the agents and provide call center operation to execute each of incoming call service. The counterparty has a right to terminate the agreement by giving the counterparty a written notice for 30 days in advance.

5) The Company and its related parties have entered into an agreement with Advanced Magic Card

Co., Ltd. and Advanced Mpay Co., Ltd, its subsidiaries, to provide payment service for goods/service purchased through electronic payments and cash card. The counterparty has a right to terminate the agreement by giving advance written notice of not less than 30 days.


(in million Baht) 2014 2013


37

Movements during the years ended 31 December of loans from related parties of the Company were as follows: Separate financial statements 2014 2013 (in million Baht) Short-term loans from related parties Subsidiaries At 1 January 4,400 - Increase 14,200 5,500 Decrease (18,600) (1,100) At 31 December - 4,400

Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) Long-term debentures INTOUCH Group 17 - - - Other related parties 17 3 - 3 Total 34 3 - 3 Significant agreements with related parties The Group/Company has entered into agreements with related parties and has commitment for receipts and payments according to rates under the terms and conditions stipulated in the agreements. The significant agreements with related parties are as follows:

1) The Group has entered into interconnection and national roaming agreements among its related

parties. The suspension or termination of the agreement shall be referred to the regulations and conditions of the National Telecommunications Commission.




5) The Company and its related parties have entered into an agreement with Advanced Magic Card

Co., Ltd. and Advanced Mpay Co., Ltd, its subsidiaries, to provide payment service for goods/service purchased through electronic payments and cash card. The counterparty has a right to terminate the agreement by giving advance written notice of not less than 30 days.


(in million Baht) 2014 2013 2014 2013

Significant Agreements with Related Parties

The Group/Company has entered into agreements with related parties and has commitment for receipts and payments according to rates under the terms and conditions stipulated in the agreements. The significant agreements with related parties are as follows:

1) The Group has entered into interconnection and national roaming agreements among its related parties. The suspension or termination of the agreement shall be referred to the regulations and conditions of the National Telecommunications Commission.





Financial Report

5) The Company and its related parties have entered into an agreement with Advanced Magic Card Co., Ltd. and Advanced Mpay Co., Ltd, its subsidiaries, to provide payment service for goods/service purchased through electronic payments and cash card. The counterparty has a right to terminate the agreement by giving advance written notice of not less than 30 days.

6) Advanced Magic Card Co., Ltd. and Advanced Mpay Co., Ltd, its subsidiaries, have entered into an agreement with Wireless Device Supply Co., Ltd., a subsidiary, to distribute electronic money and cash card. The counterparty has a right to terminate the agreement by giving advance written notice of not less than 15 days.

7) The Company and its subsidiaries have entered into an agreement with Wireless Device Supply Co., Ltd., a subsidiary, to provide card packaging. The counterparty has a right to terminate the agreement by giving advance written notice of not less than 30 days.

8) The Company and its subsidiaries have entered into an international roaming service agreement with the SingTel Group, related parties. The counterparty has a right to terminate the agreement by giving a written notice of 60 days in advance.

9) The Company and its subsidiaries have entered into an agreement with MIMO Tech Co., Ltd., a subsidiary, of providing or aggregating the variety of content as value added services on mobile network or wireless device. The counterparty has a right to terminate the agreement by giving a written notice of 30 days in advance.

10) The Company and its subsidiaries have entered into an agreement with its related parties to provide or aggregate the variety of content as value added services on mobile network or wireless device. The counterparty has a right to terminate the agreement by giving advance written notice to the counterparty of not less than 30 days.

11) The Company has entered into a satellite transponder lease agreement with Thaicom Public Company Limited, a related party, for a monthly fee according to the rate and condition specified in the agreement. The agreement is valid until 21 June 2015.

12) MIMO Tech Co., Ltd., a subsidiary, has entered into agreements with I.T. Applications and Services Company Limited, a related party, to receive computer system maintenance services. The agreement is valid for one year and is renewable on an annual basis. The counterparty has a right to terminate the agreement by giving advance written notice of 3 months.

126

6 Cash and Cash Equivalents


38

6) Advanced Magic Card Co., Ltd. and Advanced Mpay Co., Ltd, its subsidiaries, have entered into an agreement with Wireless Device Supply Co., Ltd., a subsidiary, to distribute electronic money and cash card. The counterparty has a right to terminate the agreement by giving advance written notice of not less than 15 days.

7) The Company and its subsidiaries have entered into an agreement with Wireless Device Supply Co., Ltd., a subsidiary, to provide card packaging. The counterparty has a right to terminate the agreement by giving advance written notice of not less than 30 days.

8) The Company and its subsidiaries have entered into an international roaming service agreement with the SingTel Group, related parties. The counterparty has a right to terminate the agreement by giving a written notice of 60 days in advance.

9) The Company and its subsidiaries have entered into an agreement with MIMO Tech Co., Ltd., a subsidiary, of providing or aggregating the variety of content as value added services on mobile network or wireless device. The counterparty has a right to terminate the agreement by giving a written notice of 30 days in advance.

10) The Company and its subsidiaries have entered into an agreement with its related parties to provide or aggregate the variety of content as value added services on mobile network or wireless device. The counterparty has a right to terminate the agreement by giving advance written notice to the counterparty of not less than 30 days.

11) The Company has entered into a satellite transponder lease agreement with Thaicom Public Company Limited, a related party, for a monthly fee according to the rate and condition specified in the agreement. The agreement is valid until 21 June 2015.

12) MIMO Tech Co., Ltd., a subsidiary, has entered into agreements with I.T. Applications and Services Company Limited, a related party, to receive computer system maintenance services. The agreement is valid for one year and is renewable on an annual basis. The counterparty has a right to terminate the agreement by giving advance written notice of 3 months.

6 Cash and cash equivalents

Consolidated Separate financial statements financial statements Note 2014 2013 2014 2013 (in million Baht) Cash on hand 16 16 13 15 Cash at bank - current accounts 716 736 38 87 Cash at bank - saving accounts 17,149 13,797 1,628 3,160 Highly liquid short-term investments

86

705

-

703

17,967 15,254 1,679 3,965 Less Specifically-used bank deposits

7

(3,709)

(3,781)

-

-

Total 14,258 11,473 1,679 3,965 As at 31 December 2014, the effective interest rate on cash and cash equivalents was 0.06% - 2.44% per annum (2013: 0.01% - 2.60% per annum).


Note (in million Baht) 2014 2013 2014 2013

As at 31 December 2014, the effective interest rate on cash and cash equivalents was 0.06% - 2.44% per annum (2013: 0.01% - 2.60% per annum).

7 Specifically-designated Bank Deposits In order to comply with the Notification of the Bank of Thailand applicable to the electronic cash card business, the subsidiaries’ held deposits at call with banks equal to the subsidiaries’ outstanding balance of advance receipts from customers which cannot be used for other purposes apart from payments to service providers as at 31 December 2014 amounting to Baht 3,709 million (2013: Baht 3,781 million).

8 Other Investments


39

7 Specifically-designated bank deposits In order to comply with the Notification of the Bank of Thailand applicable to the electronic cash card business, the subsidiaries’ held deposits at call with banks equal to the subsidiaries’ outstanding balance of advance receipts from customers which cannot be used for other purposes apart from payments to service providers as at 31 December 2014 amounting to Baht 3,709 million (2013: Baht 3,781 million).

8 Other investments Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) Current investments Fixed deposit at financial institutions - 92 - - Available-for-sale securities 1,542 1,485 - - 1,542 1,577 - - Other long-term investments Fixed deposit at financial institutions - pledged 11 11 - - Other non - marketable equity securities 47 93 47 93 58 104 47 93 Total 1,600 1,681 47 93 Fixed deposit at financial institutions As at 31 December 2014, fixed deposits at financial institutions of the Group have interest rates of 1.50% per annum (2013: 2.25% - 3.13% per annum). Available-for-sale securities As at 31 December 2014, the Group had debt securities held through private funds, managed by independent fund manager and have interest rates from 0.37% to 5.63% per annum (2013: 0.50% to 4.00% per annum). Movements during the years ended 31 December of available-for-sale of marketable equity and debt securities were as follows:

Consolidated

financial statements Separate

financial statements 2014 2013 2014 2013

(in million Baht) Current investments Available-for-sale securities At 1 January 1,485 751 - - Increase during the year 1,940 1,680 - - Decrease during the year (1,883) (946) - - At 31 December 1,542 1,485 - -


(in million Baht) 2014 2013 2014 2013


Financial Report

Fixed deposit at financial institutions

As at 31 December 2014, fixed deposits at financial institutions of the Group have interest rates of 1.50% per annum (2013: 2.25% - 3.13% per annum).

Available-for-sale securities

As at 31 December 2014, the Group had debt securities held through private funds, managed by independent fund manager and have interest rates from 0.37% to 5.63% per annum (2013: 0.50% to 4.00% per annum).

Movements during the years ended 31 December of available-for-sale of marketable equity and debt securities were as follows:


39

7 Specifically-designated bank deposits In order to comply with the Notification of the Bank of Thailand applicable to the electronic cash card business, the subsidiaries’ held deposits at call with banks equal to the subsidiaries’ outstanding balance of advance receipts from customers which cannot be used for other purposes apart from payments to service providers as at 31 December 2014 amounting to Baht 3,709 million (2013: Baht 3,781 million).

8 Other investments Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) Current investments Fixed deposit at financial institutions - 92 - - Available-for-sale securities 1,542 1,485 - - 1,542 1,577 - - Other long-term investments Fixed deposit at financial institutions - pledged 11 11 - - Other non - marketable equity securities 47 93 47 93 58 104 47 93 Total 1,600 1,681 47 93 Fixed deposit at financial institutions As at 31 December 2014, fixed deposits at financial institutions of the Group have interest rates of 1.50% per annum (2013: 2.25% - 3.13% per annum). Available-for-sale securities As at 31 December 2014, the Group had debt securities held through private funds, managed by independent fund manager and have interest rates from 0.37% to 5.63% per annum (2013: 0.50% to 4.00% per annum). Movements during the years ended 31 December of available-for-sale of marketable equity and debt securities were as follows:

Consolidated



(in million Baht) Current investments Available-for-sale securities At 1 January 1,485 751 - - Increase during the year 1,940 1,680 - - Decrease during the year (1,883) (946) - - At 31 December 1,542 1,485 - -


(in million Baht) 2014 2013 2014 2013

Other non - marketable equity securities

On 30 September 2014, at the extraordinary general meeting of Bride Mobile Pte Ltd., resolutions were passed to approve the decrease in ordinary shares of each shareholder. The Company’s investment in Bridge Mobile Pte Ltd. has decreased from 2.20 million ordinary shares (USD 2.70 million (Baht 93 million) to 0.80 million ordinary shares (USD 1.30 million (Baht 47 million)). The Company still owns 10% of its paid-up share capital.

On 23 April 2014, at the annual general meeting of the Clearing House for Number Portability Co., Ltd., the shareholders approved the appropriation of dividend of Baht 2,500 per share to shareholders on 19 May 2014, amounting to Baht 10 million and Baht 5 million for the Group and the Company, respectively.

On 1 October 2013, the Company transferred shares of Clearing House for Number Portability Co., Ltd., to Advanced Wireless Network Company Limited (“AWN”), a subsidiary, of 2,000 ordinary shares, totaling Baht 0.2 million. As a result, the Company’s ownership changed from 20% to 10% of its paid-up share capital (The group’s ownership represented 20%).

128

9 Trade Accounts Receivable


40

Other non - marketable equity securities On 30 September 2014, at the extraordinary general meeting of Bride Mobile Pte Ltd., resolutions were passed to approve the decrease in ordinary shares of each shareholder. The Company’s investment in Bridge Mobile Pte Ltd. has decreased from 2.20 million ordinary shares (USD 2.70 million (Baht 93 million) to 0.80 million ordinary shares (USD 1.30 million (Baht 47 million)). The Company still owns 10% of its paid-up share capital. On 23 April 2014, at the annual general meeting of the Clearing House for Number Portability Co., Ltd., the shareholders approved the appropriation of dividend of Baht 2,500 per share to shareholders on 19 May 2014, amounting to Baht 10 million and Baht 5 million for the Group and the Company, respectively. On 1 October 2013, the Company transferred shares of Clearing House for Number Portability Co., Ltd., to Advanced Wireless Network Company Limited (“AWN”), a subsidiary, of 2,000 ordinary shares, totaling Baht 0.2 million. As a result, the Company’s ownership changed from 20% to 10% of its paid-up share capital (The group’s ownership represented 20%).

9 Trade accounts receivable Consolidated Separate financial statements financial statements Note 2014 2013 2014 2013 (in million Baht) Related parties: 5 - Trade accounts receivable 22 107 5,051 4,059 - Accrued income 8 33 2,295 2,942 30 140 7,346 7,001 Other parties: - Trade accounts receivable 5,889 5,930 1,038 2,579 - Accrued income 5,478 4,966 1,795 2,331 11,367 10,896 2,833 4,910 Total 11,397 11,036 10,179 11,911 Less allowance for doubtful accounts (982) (772) (235) (381) Net 10,415 10,264 9,944 11,530 Bad and doubtful debts expense for the year 1,240 787 37 360



Aging analyses for trade accounts receivable are as follows:


(in million Baht) 2014 2013 2014 2013


41

Aging analyses for trade accounts receivable are as follows: Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) Related parties Current - 3 months 30 122 7,335 6,778 Overdue 3 - 6 months - 16 - 221 Overdue 6 - 12 months - 2 11 2 30 140 7,346 7,001 Other parties Current - 3 months 9,028 8,699 834 2,899 Overdue 3 - 6 months 305 262 52 131 Overdue 6 - 12 months 117 - 218 80 203 Overdue over 12 months 1,917 1,717 1,867 1,677 11,367 10,896 2,833 4,910 Less allowance for doubtful accounts (982) (772) (235) (381) 10,385 10,124 2,598 4,529 Net 10,415 10,264 9,944 11,530 The normal credit term granted by the Group/Company ranges from 14 days to 30 days. As at 31 December 2014, the Group/Company had the outstanding balance of accrued income of revenue sharing in international direct dial service (IDD) of Baht 1,574 million and Baht 1,565 million, respectively (2013: Baht 1,526 million and Baht 1,517 million, respectively). Part of that outstanding is presented in overdue 12 months of Baht 1,515 million and Baht 1,506 million, respectively (2013: Baht 1,280 million and Baht 1,272 million, respectively). On 16 January 2013, the Company has submitted a dispute to the Arbitration Institute demanding TOT Public Company Limited (“TOT”) to pay this receivable plus interest, the total amount of Baht 1,526 million. On 26 November 2013, Digital Phone Company Limited, a subsidiary, has submitted a dispute to the Central Administrative Court demanding CAT Public Company Limited (“CAT”) to pay this receivable plus interest, the total amount of Baht 11 million.

10 Other receivables Consolidated Separate financial statements financial statements Note 2014 2013 2014 2013 (in million Baht) Prepaid expenses 1,434 1,038 349 530 Account receivables - cash card/ refill on mobile 969 913 - - Account receivables - Revenue department

1,454

1,168

-

-

Withholding tax 807 299 698 - Others 5 1,237 1,433 940 675 Total 5,901 4,851 1,987 1,205

The normal credit term granted by the Group/Company ranges from 14 days to 30 days.

As at 31 December 2014, the Group/Company had the outstanding balance of accrued income of revenue sharing in international direct dial service (IDD) of Baht 1,574 million and Baht 1,565 million, respectively (2013: Baht 1,526 million and Baht 1,517 million, respectively). Part of that outstanding is presented in overdue 12 months of Baht 1,515 million and Baht 1,506 million, respectively (2013: Baht 1,280 million and Baht 1,272 million, respectively).


Financial Report

On 16 January 2013, the Company has submitted a dispute to the Arbitration Institute demanding TOT Public Company Limited (“TOT”) to pay this receivable plus interest, the total amount of Baht 1,526 million.

On 26 November 2013, Digital Phone Company Limited, a subsidiary, has submitted a dispute to the Central Administrative Court demanding CAT Public Company Limited (“CAT”) to pay this receivable plus interest, the total amount of Baht 11 million.

10 Other Receivables


41

Aging analyses for trade accounts receivable are as follows: Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) Related parties Current - 3 months 30 122 7,335 6,778 Overdue 3 - 6 months - 16 - 221 Overdue 6 - 12 months - 2 11 2 30 140 7,346 7,001 Other parties Current - 3 months 9,028 8,699 834 2,899 Overdue 3 - 6 months 305 262 52 131 Overdue 6 - 12 months 117 - 218 80 203 Overdue over 12 months 1,917 1,717 1,867 1,677 11,367 10,896 2,833 4,910 Less allowance for doubtful accounts (982) (772) (235) (381) 10,385 10,124 2,598 4,529 Net 10,415 10,264 9,944 11,530 The normal credit term granted by the Group/Company ranges from 14 days to 30 days. As at 31 December 2014, the Group/Company had the outstanding balance of accrued income of revenue sharing in international direct dial service (IDD) of Baht 1,574 million and Baht 1,565 million, respectively (2013: Baht 1,526 million and Baht 1,517 million, respectively). Part of that outstanding is presented in overdue 12 months of Baht 1,515 million and Baht 1,506 million, respectively (2013: Baht 1,280 million and Baht 1,272 million, respectively). On 16 January 2013, the Company has submitted a dispute to the Arbitration Institute demanding TOT Public Company Limited (“TOT”) to pay this receivable plus interest, the total amount of Baht 1,526 million. On 26 November 2013, Digital Phone Company Limited, a subsidiary, has submitted a dispute to the Central Administrative Court demanding CAT Public Company Limited (“CAT”) to pay this receivable plus interest, the total amount of Baht 11 million.

10 Other receivables Consolidated Separate financial statements financial statements Note 2014 2013 2014 2013 (in million Baht) Prepaid expenses 1,434 1,038 349 530 Account receivables - cash card/ refill on mobile 969 913 - - Account receivables - Revenue department

1,454

1,168

-

-

Withholding tax 807 299 698 - Others 5 1,237 1,433 940 675 Total 5,901 4,851 1,987 1,205



11 Inventories


(in million Baht) 2014 2013 2014 2013


42

11 Inventories Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) Finished goods 2,430 2,711 - 4 Supplies and spare parts 266 280 22 42 Spare parts for mobile phone network maintenance 468 679 468 679 3,164 3,670 490 725 Less allowance for obsolescence and decline in value (645) (805) (438) (645) Net 2,519 2,865 52 80

12 Investments in associate

Consolidated financial statements 2014 2013 (in million Baht) At 1 January - - Invest in share capital 4 - Share loss from investment in associate (4) - At 31 December - - On 9 June 2014, Super Broadband Network Company Limited (“SBN”), a subsidiary, has invested in 145,000 shares of Information Highway Co., Ltd. (“IH”) by Baht 25 per share, totaling Baht 3.6 million, representing 29% of ownership. On 24 September 2014, Advanced Broadband Network Company Limited (“ABN”), a subsidiary, has purchased investment in IH from SBN by 145,000 shares of Baht 25 per share, totaling Baht 3.6 million, representing 29% of ownership.

130

On 9 June 2014, Super Broadband Network Company Limited (“SBN”), a subsidiary, has invested in 145,000 shares of Information Highway Co., Ltd. (“IH”) by Baht 25 per share, totaling Baht 3.6 million, representing 29% of ownership.

On 24 September 2014, Advanced Broadband Network Company Limited (“ABN”), a subsidiary, has purchased investment in IH from SBN by 145,000 shares of Baht 25 per share, totaling Baht 3.6 million, representing 29% of ownership.


42

11 Inventories Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) Finished goods 2,430 2,711 - 4 Supplies and spare parts 266 280 22 42 Spare parts for mobile phone network maintenance 468 679 468 679 3,164 3,670 490 725 Less allowance for obsolescence and decline in value (645) (805) (438) (645) Net 2,519 2,865 52 80

12 Investments in associate

Consolidated financial statements 2014 2013 (in million Baht) At 1 January - - Invest in share capital 4 - Share loss from investment in associate (4) - At 31 December - - On 9 June 2014, Super Broadband Network Company Limited (“SBN”), a subsidiary, has invested in 145,000 shares of Information Highway Co., Ltd. (“IH”) by Baht 25 per share, totaling Baht 3.6 million, representing 29% of ownership. On 24 September 2014, Advanced Broadband Network Company Limited (“ABN”), a subsidiary, has purchased investment in IH from SBN by 145,000 shares of Baht 25 per share, totaling Baht 3.6 million, representing 29% of ownership.



12 Investments in Associate


Financial Report

Inve

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(%

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)

Ass

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Hig

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2014

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13 Investments in Subsidiaries




44

13 Investments in subsidiaries

Separate financial statements

2014 2013 (in million Baht) At 1 January 7,912 6,993 Increase in share capital - 1,135 Allowance for impairment - (216) At 31 December 7,912 7,912 Liquidation of a subsidiary At the Board of Directors’ meeting held on 4 August 2014, the Board approved liquidation of Advanced Internet Revolution Co., Ltd. (“AIR”), a subsidiary, and the transfer of its internet business to Super Broadband Network Co., Ltd. (“SBN”), a subsidiary, and does not have any plans to continue its operation. AIR has registered the dissolution with the Ministry of Commerce on 8 September 2014. Addition in share capital of a subsidiary On 19 September 2013, Advanced Wireless Network Co., Ltd. (“AWN”), a subsidiary, registered the increase in the share capital from Baht 350 million (3,500,000 ordinary shares, Baht 100 par value) to Baht 1,350 million (13,500,000 ordinary shares, Baht 100 par value) and premium on ordinary shares of Baht 135 million with the Ministry of Commerce. The purpose of the capital increase is for future investment. The Company paid for the increased shares by Baht 113.5 per share, totalling Baht 1,135 million and holds 99.99% of the issued share capital. Impairment in investment The Company recorded a loss from impairment for the year ended 31 December 2013 of Baht 216 million from the review of the carrying amount of investment in subsidiary, Digital Phone Co., Ltd. (“DPC”), by comparing net book value with the recoverable net present value of future cash generation assuming that DPC provides a continuing services to the subscribers under a temporary customer protection measure (see note 1.3 to the financial statement) based on value-in-use calculation and using a pre-tax discount rate of 8.9%.

Liquidation of a subsidiary

At the Board of Directors’ meeting held on 4 August 2014, the Board approved liquidation of Advanced Internet Revolution Co., Ltd. (“AIR”), a subsidiary, and the transfer of its internet business to Super Broadband Network Co., Ltd. (“SBN”), a subsidiary, and does not have any plans to continue its operation. AIR has registered the dissolution with the Ministry of Commerce on 8 September 2014.

Addition in share capital of a subsidiary

On 19 September 2013, Advanced Wireless Network Co., Ltd. (“AWN”), a subsidiary, registered the increase in the share capital from Baht 350 million (3,500,000 ordinary shares, Baht 100 par value) to Baht 1,350 million (13,500,000 ordinary shares, Baht 100 par value) and premium on ordinary shares of Baht 135 million with the Ministry of Commerce. The purpose of the capital increase is for future investment. The Company paid for the increased shares by Baht 113.5 per share, totalling Baht 1,135 million and holds 99.99% of the issued share capital.

Impairment in investment

The Company recorded a loss from impairment for the year ended 31 December 2013 of Baht 216 million from the review of the carrying amount of investment in subsidiary, Digital Phone Co., Ltd. (“DPC”), by comparing net book value with the recoverable net present value of future cash generation assuming that DPC provides a continuing services to the subscribers under a temporary customer protection measure (see note 1.3 to the financial statement) based on value-in-use calculation and using a pre-tax discount rate of 8.9%.


Financial Report

Inve

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ents

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d 20

13, a

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5)

(1

,434

)

(8)

(1

39)

(2

7)

(35,

721)

D

epre

ciat

ion

char

ge fo

r the

yea

r -

(2

1)

(1

08)

(6

,015

)

(46)

-

(3

5)

-

(6,2

25)

Tran

sfer

s and

recl

assi

fy

-

-

3

-

-

-

-

-

3 D

ispo

sals

-

5

93

2,65

7

39

-

43

-

2,83

7 Im

pairm

ent l

osse

s -

-

-

(4

)

-

-

-

-

(4)

At 3

1 D

ecem

ber

2014

-

(4

17)

(6

69)

(3

6,41

7)

(1

,441

)

(8)

(1

31)

(2

7)

(39,

110)

Cons

olid

ated

Fin

anci

al S

tate

men

ts

(in m

illion

Bah

t)

Land

Build

ing

and

build

ing

impr

ovem

ents

Leas

ehol

d bu

ildin

g im

prov

emen

ts

Asse

ts u

nder

co

nstru

ctio

n an

d in

stal

latio

n

Com

pute

r, to

ols a

nd

equi

pmen

tVe

hicle

sTo

tal

Com

mun

icatio

n eq

uipm

ent

for r

enta

l

Furn

iture

, fi

xtur

es a

nd

offic

e equ

ipmen

t


Financial Report

Cons

olid

ated

Fin

anci

al S

tate

men

ts

(in m

illion

Bah

t)

Land

Build

ing

and

build

ing

impr

ovem

ents

Leas

ehol

d bu

ildin

g im

prov

emen

ts

Asse

ts u

nder

co

nstru

ctio

n an

d in

stal

latio

n

Com

pute

r, to

ols a

nd

equi

pmen

tVe

hicle

sTo

tal

Com

mun

icatio

n eq

uipm

ent

for r

enta

l

Furn

iture

, fix

ture

s and

of

fice e

quipm

ent

Adv

ance

d In

fo S

ervi

ce P

ublic

Com

pany

Lim

ited

and

its S

ubsid

iari

es

Not

es to

the

finan

cial

stat

emen

ts

47

C

onso

lidat

ed fi

nanc

ial s

tate

men

ts

Fu

rnitu

re,

C

om-

A

sset

s und

er

B

uild

ing

Le

aseh

old

C

ompu

ter,

fix

ture

s

mun

icat

ion

co

nstru

ctio

n

and

build

ing

bu

ildin

g

tool

s and

and

offic

e

equi

pmen

t

and

La

nd

im

prov

emen

ts

im

prov

emen

ts

eq

uipm

ent

eq

uipm

ent

fo

r ren

tal

V

ehic

les

in

stal

latio

n

Tota

l

(in m

illio

n Ba

ht)

Net

boo

k va

lue

At 1

Jan

uary

201

3

O

wne

d as

sets

13

9

125

21

1

7,55

9

100

-

13

2,

905

11

,052

A

sset

s und

er fi

nanc

e le

ases

-

-

-

-

-

-

88

-

88

139

12

5

211

7,

559

10

0

-

101

2,

905

11

,140

A

t 31

Dec

embe

r 20

13 a

nd

1

Janu

ary

2014

Ow

ned

asse

ts

175

99

295

23

,476

127

-

9

11

,652

35

,833

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sset

s und

er fi

nanc

e le

ases

-

-

-

-

-

-

89

-

89

175

99

295

23

,476

127

-

98

11,6

52

35,9

22

At 3

1 D

ecem

ber

2014

O

wne

d as

sets

52

4

76

45

8

46,9

63

17

4

-

8

12,4

00

60,6

03

Ass

ets u

nder

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nce

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es

-

-

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-

-

-

100

-

10

0

524

76

458

46

,963

174

-

10

8

12,4

00

60,7

03

The

gros

s am

ount

of t

he G

roup

’s fu

lly d

epre

ciat

ed p

rope

rty, p

lant

and

equ

ipm

ent t

hat w

as s

till i

n us

e as

at 3

1 D

ecem

ber 2

014

amou

nted

to B

aht 2

5,17

9 m

illio

n (2

013:

Bah

t 25,

713

mill

ion)

.

The

gros

s am

ount

of

the

Gro

up’s

fully

dep

recia

ted

prop

erty

, pla

nt a

nd e

quip

men

t th

at w

as s

till i

n us

e as

at

31 D

ecem

ber

2014

am

ount

ed t

o Ba

ht 2

5,17

9 m

illion

(201

3: B

aht 2

5,71

3 m

illion

).

136

Sepa

rate

Fin

anci

al S

tate

men

ts

(in m

illion

Bah

t)

Build

ing

and

build

ing

impr

ovem

ents

Leas

ehol

d bu

ildin

g im

prov

emen

ts

Asse

ts u

nder

co

nstru

ctio

n an

d in

stal

latio

n

Com

pute

r, to

ols a

nd

equi

pmen

tVe

hicle

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tal

Furn

iture

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ture

s and

of

fice e

quipm

ent

Adv

ance

d In

fo S

ervi

ce P

ublic

Com

pany

Lim

ited

and

its S

ubsid

iari

es

Not

es to

the

finan

cial

stat

emen

ts

48

Se

para

te fi

nanc

ial s

tate

men

ts

Fu

rnitu

re,

A

sset

s und

er

B

uild

ing

Le

aseh

old

C

ompu

ter,

fix

ture

s

cons

truct

ion

an

d bu

ildin

g

build

ing

to

ols a

nd

an

d of

fice

an

d

impr

ovem

ents

impr

ovem

ents

equi

pmen

t

equi

pmen

t

Veh

icle

s

insta

llatio

n

Tota

l

(in m

illio

n Ba

ht)

Cost

A

t 1 Ja

nuar

y 20

13

412

66

3

26,1

30

1,

351

22

0

117

28

,893

A

dditi

ons

-

139

21

3

41

30

114

53

7 Tr

ansf

ers a

nd re

clas

sify

-

-

1

-

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(1)

-

Dis

posa

ls

-

(12)

(1,6

07)

(3

0)

(54)

(4)

(1

,707

) A

t 31

Dec

embe

r 20

13

and

1 Ja

nuar

y 20

14

412

79

0

24,7

37

1,

362

19

6

226

27

,723

A

dditi

ons

-

183

17

6

31

24

(122

)

292

Dis

posa

ls

(40)

(400

)

(3,0

15)

(1

92)

(6

8)

(9

)

(3,7

24)

At 3

1 D

ecem

ber

2014

37

2

573

21

,898

1,20

1

152

95

24,2

91

Dep

reci

atio

n

A

t 1 Ja

nuar

y 20

13

(349

)

(523

)

(24,

895)

(1

,277

)

(137

)

-

(27,

181)

D

epre

ciat

ion

char

ge fo

r the

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r (2

0)

(5

7)

(4

75)

(2

7)

(28)

-

(607

) D

ispo

sals

-

8

1,

563

27

47

-

1,

645

At 3

1 D

ecem

ber

2013

an

d 1

Janu

ary

2014

(3

69)

(5

72)

(2

3,80

7)

(1,2

77)

(1

18)

-

(2

6,14

3)

Dep

reci

atio

n ch

arge

for t

he y

ear

(15)

(68)

(361

)

(26)

(2

6)

-

(4

96)

Tran

sfer

s and

recl

assif

y -

3

-

-

-

-

3

Dis

posa

ls

38

21

6

2,97

4

163

57

-

3,44

8 A

t 31

Dec

embe

r 20

14

(346

)

(421

)

(21,

194)

(1

,140

)

(87)

-

(2

3,18

8)

Adv

ance

d In

fo S

ervi

ce P

ublic

Com

pany

Lim

ited

and

its S

ubsid

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es

Not

es to

the

finan

cial

stat

emen

ts

49

Se

para

te fi

nanc

ial s

tate

men

ts

Fu

rnitu

re,

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sset

s und

er

B

uild

ing

Le

aseh

old

C

ompu

ter,

fix

ture

s

cons

truct

ion

an

d bu

ildin

g

build

ing

to

ols a

nd

an

d of

fice

an

d

impr

ovem

ents

impr

ovem

ents

equi

pmen

t

equi

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t

Veh

icle

s

insta

llatio

n

Tota

l

(in m

illio

n Ba

ht)

Net

boo

k va

lue

A

t 1 J

anua

ry 2

013

O

wne

d as

sets

63

140

1,

235

74

11

11

7

1,64

0 A

sset

s und

er fi

nanc

e le

ases

-

-

-

-

72

-

72

63

140

1,

235

74

83

11

7

1,71

2 A

t 31

Dec

embe

r 20

13 a

nd 1

Jan

uary

201

4

O

wne

d as

sets

43

218

93

0

85

8

22

6

1,51

0 A

sset

s und

er fi

nanc

e le

ases

-

-

-

-

70

-

70

43

218

93

0

85

78

226

1,

580

At 3

1 D

ecem

ber

2014

O

wne

d as

sets

26

152

70

4

61

7

95

1,04

5 A

sset

s und

er fi

nanc

e le

ases

-

-

-

-

58

-

58

26

152

70

4

61

65

95

1,

103

The

gros

s am

ount

of t

he C

ompa

ny’s

fully

dep

reci

ated

pla

nt a

nd e

quip

men

t tha

t was

stil

l in

use

as a

t 31

Dec

embe

r 201

4 am

ount

ed to

Bah

t 21,

564

mill

ion

(201

3:

Baht

24,

099

mill

ion)

. Th

e gr

oss a

mou

nt o

f the

Com

pany

’s fu

lly d

epre

ciate

d pl

ant a

nd e

quip

men

t tha

t was

still

in u

se a

s at 3

1 De

cem

ber 2

014

amou

nted

to B

aht 2

1,56

4 m

illion

(2

013:

Bah

t 24,

099

milli

on).


Financial Report

15 Intangible Assets Under the Agreements for Operations


50

15 Intangible assets under the Agreements for operations Consolidated financial statements

Cost of mobile phone

networks

Cost of datanet

tools and equipment

Advance payment

and assets under

construction of mobile

phone networks

Total (in million Baht) Cost At 1 January 2013 192,124 1,548 2,761 196,433 Additions 3,766 - - 3,766 Transfers 427 - (427) - Disposal and write-off (14,294) - - (14,294) Transfer to CAT (14,605) - - (14,605) At 31 December 2013 and 1 January 2014 167,418 1,548 2,334 171,300 Additions 600 - - 600 Transfers and reclassify 1,402 - (1,699) (297) Disposal and write-off (23,997) (300) - (24,297) At 31 December 2014 145,423 1,248 635 147,306 Amortisation and impairment losses At 1 January 2013 (165,738) (1,538) - (167,276) Amortisation charge for the year (11,876) (1) - (11,877) Disposal and write-off 13,748 - - 13,748 Transfer to CAT 14,605 - - 14,605 At 31 December 2013 and 1 January 2014 (149,261) (1,539) - (150,800) Amortisation charge for the year (11,308) (1) - (11,309) Impairment losses - (8) - (8) Disposal and write-off 23,186 300 - 23,486 Transfer 63 - - 63 At 31 December 2014 (137,320) (1,248) - (138,568) Net book value At 1 January 2013 26,386 10 2,761 29,157 At 31 December 2013 and 1 January 2014 18,157 9 2,334 20,500 At 31 December 2014 8,103 - 635 8,738 The gross amount of the Group’s fully amortised assets under the Agreements for operations that was still in use as at 31 December 2014 amounted to Baht 70,907 million (2013: Baht 95,553 million).


50

15 Intangible assets under the Agreements for operations Consolidated financial statements


networks

Cost of datanet

tools and equipment

Advance payment

and assets under


phone networks

Total (in million Baht) Cost At 1 January 2013 192,124 1,548 2,761 196,433 Additions 3,766 - - 3,766 Transfers 427 - (427) - Disposal and write-off (14,294) - - (14,294) Transfer to CAT (14,605) - - (14,605) At 31 December 2013 and 1 January 2014 167,418 1,548 2,334 171,300 Additions 600 - - 600 Transfers and reclassify 1,402 - (1,699) (297) Disposal and write-off (23,997) (300) - (24,297) At 31 December 2014 145,423 1,248 635 147,306 Amortisation and impairment losses At 1 January 2013 (165,738) (1,538) - (167,276) Amortisation charge for the year (11,876) (1) - (11,877) Disposal and write-off 13,748 - - 13,748 Transfer to CAT 14,605 - - 14,605 At 31 December 2013 and 1 January 2014 (149,261) (1,539) - (150,800) Amortisation charge for the year (11,308) (1) - (11,309) Impairment losses - (8) - (8) Disposal and write-off 23,186 300 - 23,486 Transfer 63 - - 63 At 31 December 2014 (137,320) (1,248) - (138,568) Net book value At 1 January 2013 26,386 10 2,761 29,157 At 31 December 2013 and 1 January 2014 18,157 9 2,334 20,500 At 31 December 2014 8,103 - 635 8,738 The gross amount of the Group’s fully amortised assets under the Agreements for operations that was still in use as at 31 December 2014 amounted to Baht 70,907 million (2013: Baht 95,553 million).


(in million Baht)


networks

Cost of datanet

tools andequipment

Total

Advance payment and assets under

construction of mobile phone networks

The gross amount of the Group’s fully amortised assets under the Agreements for operations that was still in use as at 31 December 2014 amounted to Baht 70,907 million (2013: Baht 95,553 million).

138Advanced Info Service Public Company Limited and its Subsidiaries Notes to the financial statements

51



networks

Advance payment

and assets under


phone networks

Total (in million Baht) Cost At 1 January 2013 177,889 2,761 180,650 Additions 3,638 - 3,638 Transfers 427 (427) - Disposals (14,536) - (14,536) At 31 December 2013 and 1 January 2014 167,418 2,334 169,752 Additions 600 - 600 Transfers and reclassify 1,402 (1,699) (297) Disposals (23,997) - (23,997) At 31 December 2014 145,423 635 146,058 Amortisation At 1 January 2013 (152,191) - (152,191) Amortisation charge for the year (11,064) - (11,064) Disposals 13,994 - 13,994 At 31 December 2013 and 1 January 2014 (149,261) - (149,261) Amortisation charge for the year (11,308) - (11,308) Transfers and reclassify 63 - 63 Disposals 23,186 - 23,186 At 31 December 2014 (137,320) - (137,320) Net book value At 1 January 2013 25,698 2,761 28,459 At 31 December 2013 and 1 January 2014 18,157 2,334 20,491 At 31 December 2014 8,103 635 8,738 The gross amount of the Company’s fully amortised assets under the Agreement for operations that was still in use as at 31 December 2014 amounted to Baht 69,861 million (2013: Baht 80,947 million). Part of assets under the Agreement for operations is 13,198 towers that the Company has transferred to TOT Public Company Limited and is 152 towers and 115 containers that Digital Phone Company Limited, a subsidiary, has transferred to CAT Public Company Limited. The Group is of the opinion that the Tower and the Container are not the tools and equipment specified under the Agreement. Therefore, the Group shall not be obligated to transfer the Tower and the Container. The Group has also submitted the disputes to the Dispute Reconciliation Office, Justice Court Office requesting the Arbitral Tribunal to give an award that the said assets are not the property as stipulated in the Agreement in July 2014.


(in million Baht)


networks Total

Advance payment and assets under construction of

mobile phone networks

The gross amount of the Company’s fully amortised assets under the Agreement for operations that was still in use as at 31 December 2014 amounted to Baht 69,861 million (2013: Baht 80,947 million).

Part of assets under the Agreement for operations is 13,198 towers that the Company has transferred to TOT Public Company Limited and is 152 towers and 115 containers that Digital Phone Company Limited, a subsidiary, has transferred to CAT Public Company Limited. The Group is of the opinion that the Tower and the Container are not the tools and equipment specified under the Agreement. Therefore, the Group shall not be obligated to transfer the Tower and the Container. The Group has also submitted the disputes to the Dispute Reconciliation Office, Justice Court Office requesting the Arbitral Tribunal to give an award that the said assets are not the property as stipulated in the Agreement in July 2014.


Financial Report

16 Goodwill

17 License for Operation Right in Spectrum of Telecommunication


52

16 Goodwill

Consolidated financial

statements (in million Baht) Cost At 1 January 2013 14,352 At 31 December 2013 and 1 January 2014 14,352 At 31 December 2014 14,352 Amortisation and impairment losses At 1 January 2013 (14,317) At 31 December 2013 and 1 January 2014 (14,317) At 31 December 2014 (14,317) Net book value At 1 January 2013 35 At 31 December 2013 and 1 January 2014 35 At 31 December 2014 35

17 License for operation right in spectrum of telecommunication


statements (in million Baht) Cost At 1 January 2013 14,644 At 31 December 2013 and 1 January 2014 14,644 At 31 December 2014 14,644

Amortisation At 1 January 2013 (67) Amortisation charge for the year (976) At 31 December 2013 and 1 January 2014 (1,043) Amortisation charge for the year (976) At 31 December 2014 (2,019)

Net book value At 1 January 2013 14,577 At 31 December 2013 and 1 January 2014 13,601 At 31 December 2014 12,625 On 16 October 2012, Advanced Wireless Network Co., Ltd. (“AWN”), a subsidiary, was the auction winner for 2.1GHz license (3G) at the bid price of Baht 14,625 million. On 7 December 2012, AWN was officially granted the license to operate 2.1GHz for 15 years from the National Broadcasting and Telecommunications Commission (“NBTC”). According to the auction terms and conditions, AWN paid 50% of the fee plus VAT, totaling Baht 7,824 million on 19 October 2012 and submitted bank guarantee to pay the remaining fee to the NBTC. Another 25% was paid in the second year, and the remainder will be paid in the third year. As at 31 December 2014, the Group has recognised the remaining fee of Baht 3,656 million (excluding VAT) as the spectrum license payable in the consolidated financial statement (2013: Baht 7,313 million).

Consolidated Financial Statements(in million Baht)


52

16 Goodwill


statements (in million Baht) Cost At 1 January 2013 14,352 At 31 December 2013 and 1 January 2014 14,352 At 31 December 2014 14,352 Amortisation and impairment losses At 1 January 2013 (14,317) At 31 December 2013 and 1 January 2014 (14,317) At 31 December 2014 (14,317) Net book value At 1 January 2013 35 At 31 December 2013 and 1 January 2014 35 At 31 December 2014 35

17 License for operation right in spectrum of telecommunication


statements (in million Baht) Cost At 1 January 2013 14,644 At 31 December 2013 and 1 January 2014 14,644 At 31 December 2014 14,644

Amortisation At 1 January 2013 (67) Amortisation charge for the year (976) At 31 December 2013 and 1 January 2014 (1,043) Amortisation charge for the year (976) At 31 December 2014 (2,019)

Net book value At 1 January 2013 14,577 At 31 December 2013 and 1 January 2014 13,601 At 31 December 2014 12,625 On 16 October 2012, Advanced Wireless Network Co., Ltd. (“AWN”), a subsidiary, was the auction winner for 2.1GHz license (3G) at the bid price of Baht 14,625 million. On 7 December 2012, AWN was officially granted the license to operate 2.1GHz for 15 years from the National Broadcasting and Telecommunications Commission (“NBTC”). According to the auction terms and conditions, AWN paid 50% of the fee plus VAT, totaling Baht 7,824 million on 19 October 2012 and submitted bank guarantee to pay the remaining fee to the NBTC. Another 25% was paid in the second year, and the remainder will be paid in the third year. As at 31 December 2014, the Group has recognised the remaining fee of Baht 3,656 million (excluding VAT) as the spectrum license payable in the consolidated financial statement (2013: Baht 7,313 million).

Consolidated Financial Statements(in million Baht)

On 16 October 2012, Advanced Wireless Network Co., Ltd. (“AWN”), a subsidiary, was the auction winner for 2.1GHz license (3G) at the bid price of Baht 14,625 million. On 7 December 2012, AWN was officially granted the license to operate 2.1GHz for 15 years from the National Broadcasting and Telecommunications Commission (“NBTC”). According to the auction terms and conditions, AWN paid 50% of the fee plus VAT, totaling Baht 7,824 million on 19 October 2012 and submitted bank guarantee to pay the remaining fee to the NBTC. Another 25% was paid in the second year, and the remainder will be paid in the third year. As at 31 December 2014, the Group has recognised the remaining fee of Baht 3,656 million (excluding VAT) as the spectrum license payable in the consolidated financial statements (2013: Baht 7,313 million).

140


53

18 Other intangible assets Consolidated financial statements

Operation

right Software licences

Assets under

installation

Total (in million Baht) Cost At 1 January 2013 6,993 5,581 - 12,574 Additions - 680 118 798 Transfers and reclassify - 10 (10) - Disposals (6,993) (51) - (7,044) At 31 December 2013 and 1 January 2014 - 6,220 108 6,328 Additions - 713 25 738 Transfers and reclassify - 95 (95) - Disposals - (2,410) - (2,410) At 31 December 2014 - 4,618 38 4,656 Amortisation At 1 January 2013 (6,671) (3,870) - (10,541) Amortisation charge for the year (322) (329) - (651) Disposals 6,993 49 - 7,042 At 31 December 2013 and 1 January 2014 - (4,150) - (4,150) Amortisation charge for the year - (412) - (412) Disposals - (2,410) - (2,410) At 31 December 2014 - 2,152 - 2,152 Net book value At 1 January 2013 322 1,711 - 2,033 At 31 December 2013 and 1 January 2014 - 2,070 108 2,178 At 31 December 2014 - 2,466 38 2,504

18 Other Intangible Assets


Operationright

Software licences Total

Assets under

installation

(in million Baht)


Financial Report


54

Separate financial

statements Software licences (in million Baht) Cost At 1 January 2013 2,937 Additions 5 Disposals (49) At 31 December 2013 and 1 January 2014 2,893 Additions 1 Disposals (2,420) At 31 December 2014 474 Amortisation At 1 January 2013 (2,736) Amortisation charge for the year (47) Disposals 49 At 31 December 2013 and 1 January 2014 (2,734) Amortisation charge for the year (47) Disposals 2,419 At 31 December 2014 (362) Net book value At 1 January 2013 201 At 31 December 2013 and 1 January 2014 159 At 31 December 2014 112

19 Deferred tax

Deferred tax assets and liabilities as at 31 December were as follows: Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) Deferred tax assets 1,509 3,667 735 3,327 Deferred tax liabilities (67) (110) (67) (110) Net 1,442 3,557 668 3,217


(in million Baht)

Software licences


54

Separate financial

statements Software licences (in million Baht) Cost At 1 January 2013 2,937 Additions 5 Disposals (49) At 31 December 2013 and 1 January 2014 2,893 Additions 1 Disposals (2,420) At 31 December 2014 474 Amortisation At 1 January 2013 (2,736) Amortisation charge for the year (47) Disposals 49 At 31 December 2013 and 1 January 2014 (2,734) Amortisation charge for the year (47) Disposals 2,419 At 31 December 2014 (362) Net book value At 1 January 2013 201 At 31 December 2013 and 1 January 2014 159 At 31 December 2014 112

19 Deferred tax

Deferred tax assets and liabilities as at 31 December were as follows: Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) Deferred tax assets 1,509 3,667 735 3,327 Deferred tax liabilities (67) (110) (67) (110) Net 1,442 3,557 668 3,217


(in million Baht) 2014 2013 2014 2013

19 Deferred Tax Deferred tax assets and liabilities as at 31 December were as follows:

142

Movements in total deferred tax assets and liabilities during the year were as follows:


55

Movements in total deferred tax assets and liabilities during the year were as follows: Consolidated financial statements Charged/ Charged/ At 1 (credited) At 31 (credited) At 31 January to profit December to profit December

2013 or loss 2013 or loss 2014 (note 34) (note 34) (in million Baht)

Deferred tax assets Accounts receivable (doubtful accounts) 129 (4) 125 61 186 Inventories (allowance for obsolete and decline

in value) 175 (25) 150 (36) 114 Assets under the Agreement for operation (amortisation difference) 4,242 (1,577) 2,665 (2,310) 355 Unearned income - mobile phone service (income recognised difference) 385 (65) 320 7 74 394 Employee benefit obligations 250 27 277 25 302 Others 290 (160) 130 28 158 Total 5,471 (1,804) 3,667 (2,158) 1,509 Deferred tax liabilities Prepaid expense under the Agreement for operations (expense recognised difference) (87) 37 (50) 23 (27) Accelerated tax (amortisation difference) (6) 6 - - - Others (64) 4 (60) 20 (40) Total (157) 47 (110) 43 (67) Net 5,314 (1,757) 3,557 (2,115) 1,442

Separate financial statements Charged/ Charged/ At 1 (credited) At 31 (credited) At 31 January to profit December to profit December 2013 or loss 2013 or loss 2014 (note 34) (note 34) (in million Baht) Deferred tax assets Accounts receivable (doubtful accounts) 122 (67) 55 (14) 41 Inventories (allowance for obsolete and decline in value) 131 (2) 129 (41) 88 Assets under the Agreement for operation (amortisation difference) 4,032 (1,367) 2,665 (2,310) 355 Unearned income - mobile phone service (income recognised difference) 385 (158) 227 (105) 122 Employee benefit obligations 166 (8) 158 (76) 82 Others 146 (53) 93 (46) 47 Total 4,982 (1,655) 3,327 (2,592) 735 Deferred tax liabilities Prepaid expense under the Agreement for operations (expense recognised difference) (87) 37 (50) 23 (27) Others (64) 4 (60) 20 (40) Total (151) 41 (110) 43 (67) Net 4,831 (1,614) 3,217 (2,549) 668


(in million Baht)

At 1 January

2013

At 31 December

2013

At 31 December

2014

Charged/ (credited) to profit or loss

(note 34)


(note 34)


Financial Report


(in million Baht)

At 1 January

2013

At 31 December

2013

At 31 December

2014


(note 34)


(note 34)


55

Movements in total deferred tax assets and liabilities during the year were as follows: Consolidated financial statements Charged/ Charged/ At 1 (credited) At 31 (credited) At 31 January to profit December to profit December

2013 or loss 2013 or loss 2014 (note 34) (note 34) (in million Baht)

Deferred tax assets Accounts receivable (doubtful accounts) 129 (4) 125 61 186 Inventories (allowance for obsolete and decline

in value) 175 (25) 150 (36) 114 Assets under the Agreement for operation (amortisation difference) 4,242 (1,577) 2,665 (2,310) 355 Unearned income - mobile phone service (income recognised difference) 385 (65) 320 7 74 394 Employee benefit obligations 250 27 277 25 302 Others 290 (160) 130 28 158 Total 5,471 (1,804) 3,667 (2,158) 1,509 Deferred tax liabilities Prepaid expense under the Agreement for operations (expense recognised difference) (87) 37 (50) 23 (27) Accelerated tax (amortisation difference) (6) 6 - - - Others (64) 4 (60) 20 (40) Total (157) 47 (110) 43 (67) Net 5,314 (1,757) 3,557 (2,115) 1,442

Separate financial statements Charged/ Charged/ At 1 (credited) At 31 (credited) At 31 January to profit December to profit December 2013 or loss 2013 or loss 2014 (note 34) (note 34) (in million Baht) Deferred tax assets Accounts receivable (doubtful accounts) 122 (67) 55 (14) 41 Inventories (allowance for obsolete and decline in value) 131 (2) 129 (41) 88 Assets under the Agreement for operation (amortisation difference) 4,032 (1,367) 2,665 (2,310) 355 Unearned income - mobile phone service (income recognised difference) 385 (158) 227 (105) 122 Employee benefit obligations 166 (8) 158 (76) 82 Others 146 (53) 93 (46) 47 Total 4,982 (1,655) 3,327 (2,592) 735 Deferred tax liabilities Prepaid expense under the Agreement for operations (expense recognised difference) (87) 37 (50) 23 (27) Others (64) 4 (60) 20 (40) Total (151) 41 (110) 43 (67) Net 4,831 (1,614) 3,217 (2,549) 668

Deferred tax assets arising from significant temporary differences and unused tax losses that have not been recognised in the financial statements as at 31 December 2014 and 2013 were as follows:

Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits therefrom.


(in million Baht) 2014 2013 2014 2013


56


Consolidated financial statements


2014 2013 2014 2013 (in million Baht)

Tax losses 375 337 - - Impairment loss on investment - - 1,713 1,713 Assets under the Agreements for operations 754 102 664 - Accrued expense of the Agreements for operations 238 238 - - Others 63 77 - - Total 1,430 754 2,377 1,713


20 Interest-bearing liabilities

Consolidated Separate financial statements financial statements Note 2014 2013 2014 2013 (in million Baht) Current Short-term loans from financial institutions

- 4,000 - 4,000


5

-

-

-

4,400

Current portion of long-term borrowings 2,540 2,775 2,540 2,775 Current portion of long-term debentures - 2,500 - 2,500 Current portion of finance lease liabilities 32 28 21 23 2,572 9,303 2,561 13,698 Non-current Long-term borrowings, net 17,819 15,279 12,819 15,279 Long-term debentures, net 16,575 - - - Finance lease liabilities 84 76 50 60 34,478 15,355 12,869 15,339 Total 37,050 24,658 15,430 29,037

144

20 Interest-bearing Liabilities


56


Consolidated financial statements


2014 2013 2014 2013 (in million Baht)

Tax losses 375 337 - - Impairment loss on investment - - 1,713 1,713 Assets under the Agreements for operations 754 102 664 - Accrued expense of the Agreements for operations 238 238 - - Others 63 77 - - Total 1,430 754 2,377 1,713


20 Interest-bearing liabilities

Consolidated Separate financial statements financial statements Note 2014 2013 2014 2013 (in million Baht) Current Short-term loans from financial institutions

- 4,000 - 4,000


5

-

-

-

4,400

Current portion of long-term borrowings 2,540 2,775 2,540 2,775 Current portion of long-term debentures - 2,500 - 2,500 Current portion of finance lease liabilities 32 28 21 23 2,572 9,303 2,561 13,698 Non-current Long-term borrowings, net 17,819 15,279 12,819 15,279 Long-term debentures, net 16,575 - - - Finance lease liabilities 84 76 50 60 34,478 15,355 12,869 15,339 Total 37,050 24,658 15,430 29,037



The periods to maturity of interest-bearing liabilities, excluding finance lease liabilities, as at 31 December were as follows:


(in million Baht) 2014 2013 2014 2013


57

The periods to maturity of interest-bearing liabilities, excluding finance lease liabilities, as at 31 December were as follows: Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) Within one year 2,540 9,275 2,540 13,675 After one year but within five years 22,243 15,279 12,819 15,279 After five years 12,151 - - - Total 36,934 24,554 15,359 28,954


Financial Report

Long

-ter

m b

orro

win

gs

As a

t 31

Dece

mbe

r, th

e de

tails

of l

ong-

term

loan

s are

sum

mar

ised

as fo

llow

s:

(in m

illion

Bah

t)(in

million

)

20

14

2013

20

14

2013

20

14

2013

Out

stan

ding

Loa

n in

For

eign

Cur

renc

yIn

tere

st R

ate

(per

ann

um)

Term

of

Inte

rest

Pa

ymen

t

Prin

cipa

l Pa

ymen

t Ter

m

Cons

olid

ated

Fi

nanc

ial S

tate

men

tsSe

para

te

Fina

ncia

l Sta

tem

ents

Adv

ance

d In

fo S

ervi

ce P

ublic

Com

pany

Lim

ited

and

its S

ubsid

iari

es

Not

es to

the

finan

cial

stat

emen

ts

58

Long

-term

bor

rowi

ngs

As a

t 31

Dec

embe

r, th

e de

tails

of l

ong-

term

loan

s are

sum

mar

ised

as f

ollo

ws:

O

utst

andi

ng lo

an

in fo

reig

n cu

rren

cy

In

tere

st ra

te

(per

ann

um)

Term

of

inte

rest

pa

ymen

t

Pr

inci

pal p

aym

ent t

erm

C

onso

lidat

ed

finan

cial

stat

emen

ts

Sepa

rate

fin

anci

al st

atem

ents

20

14

2013

2014

2013

2014

2013

(in

mill

ion)

(in m

illio

n Ba

ht)

The

Com

pany

- U

SD 7

0.00

LI

BO

R p

lus m

argi

n Se

mi-a

nnua

l En

tirel

y re

deem

ed in

201

4 -

2,

306

-

2,

306

USD

49.

75

USD

63.

97

LIB

OR

plu

s mar

gin

Se

mi-a

nnua

l 20

equ

al in

stallm

ents

from

20

08 to

201

8

1,64

7

2,

108

1,64

7

2,

108

USD

125

.00

USD

125

.00

LIB

OR

plu

s mar

gin

Se

mi-a

nnua

l 2

equa

l ins

tallm

ents

in 2

015

and

2016

4,13

9

4,

118

4,13

9

4,

118

USD

85.

00

USD

85.

00

LIB

OR

plu

s mar

gin

Sem

i-ann

ual

4 eq

ual i

nsta

llmen

ts in

201

6 an

d 20

17

2,

815

2,80

1

2,

815

2,80

1 U

SD 8

5.00

U

SD 8

5.00

LI

BO

R p

lus m

argi

n Se

mi-a

nnua

l En

tirel

y re

deem

ed in

201

8 2,

815

2,

801

2,

815

2,

801

- -

Fixe

d in

tere

st ra

te a

s

stip

ulat

ed in

the

agre

emen

t

Sem

i-ann

ual

Entir

ely

rede

emed

in 2

018

4,00

0

4,00

0

4,00

0

4,00

0

Adv

ance

d W

irel

ess N

etw

ork

Co.

, Ltd

.

- -

Fixe

d in

tere

st ra

te a

s

stip

ulat

ed in

the

agre

emen

t

Sem

i-ann

ual

4 eq

ual i

nsta

llmen

ts fr

om

2019

to 2

021

5,00

0

-

-

-

Tota

l loa

ns

20,4

16

18

,134

15,4

16

18

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Le

ss tr

ansa

ctio

n co

st b

alan

ce a

t 31

Dec

embe

r (5

7)

(8

0)

(5

7)

(8

0)

Net

20

,359

18,0

54

15

,359

18,0

54

-

-

-

-

146Lo

ng-t

erm

deb

entu

res

As a

t 31

Dece

mbe

r, th

e G

roup

’s lo

ng-te

rm d

eben

ture

s rep

rese

nt u

nsub

ordi

nate

d an

d un

secu

red

debe

ntur

es w

ith a

par

val

ue o

f Bah

t 1,0

00 e

ach

and

are

deta

iled

as fo

llow

s:

Adv

ance

d In

fo S

ervi

ce P

ublic

Com

pany

Lim

ited

and

its S

ubsid

iari

es

Not

es to

the

finan

cial

stat

emen

ts

59

Long

-term

deb

entu

res

As a

t 31

Dec

embe

r, th

e G

roup

’s lo

ng-te

rm d

eben

ture

s rep

rese

nt u

nsub

ordi

nate

d an

d un

secu

red

debe

ntur

es w

ith a

par

val

ue o

f Bah

t 1,0

00 e

ach

and

are

deta

iled

as fo

llow

s:

N

o. o

f

Am

ount

Term

of

Con

solid

ated

Sepa

rate

un

its

(M

illio

n

Inte

rest

rat

e

inte

rest

Prin

cipa

l pay

men

t fin

anci

al st

atem

ents

finan

cial

stat

emen

ts

Issu

e da

te

(M

illio

n)

B

aht)

(p

er a

nnum

)

paym

ent

te

rm

2014

2013

2014

2013

(in m

illio

n Ba

ht)

The

Com

pany

23 Ja

nuar

y 20

09

2.

50

2,

500

4.0

0% fo

r the

firs

t tw

o ye

ar, 5

.00%

for

the

third

and

four

th

year

and

6.0

0% fo

r th

e la

st y

ears

Qua

rterly

E

ntire

ly

rede

emed

on

23

Janu

ary

2014

- 2

,500

- 2

,500

Adv

ance

d W

irel

ess N

etw

ork

Co.

, Ltd

.

11 A

pril

2014

0.39

397

Fi

xed

inte

rest

rate

of

3.3

9%

Sem

i-ann

ual

Ent

irely

re

deem

ed o

n 11

A

pril

2017

397

-

-

-

11 A

pril

2014

7.79

7,78

9

Fixe

d in

tere

st ra

te

of 4

.17%

Se

mi-a

nnua

l E

ntire

ly

rede

emed

on

11

Apr

il 20

19

7,78

9

-

-

-

11 A

pril

2014

1.78

1,77

6

Fixe

d in

tere

st ra

te

of 4

.56%

Se

mi-a

nnua

l E

ntire

ly

rede

emed

on

11

Apr

il 20

21

1,77

6

-

-

-

11 A

pril

2014

6.64

6,63

8

Fixe

d in

tere

st ra

te

of 4

.94%

Se

mi-a

nnua

l E

ntire

ly

rede

emed

on

11

Apr

il 20

24

6,63

8

-

-

-

Tota

l deb

entu

res

16

,600

2

,500

- 2

,500

Le

ss b

ond

issui

ng c

ost b

alan

ce a

t 31

Dec

embe

r

(2

5)

-

-

-

Net

16,5

75

2,5

00

-

2,5

00

(in m

illion

Bah

t)(m

illion

)(m

illion

Bah

t)

20

14

2013

20

14

2013

Issu

e da

teN

o. o

f uni

tAm

ount

Inte

rest

rate

(p

er a

nnum

)Te

rm o

f in

tere

st

paym

ent

Prin

cipa

l pay

men

t te

rm

Cons

olid

ated

Fi

nanc

ial S

tate

men

tsSe

para

te

Fina

ncia

l Sta

tem

ents


Financial Report

Under the terms and conditions of the long-term borrowings and debentures, the Company has to comply with certain restrictions and maintain certain financial ratios.

As at 31 December 2014, the Group and the Company have no undrawn committed loans. (2013: no undrawn committed loans).

The carrying amounts and fair values of long-term debentures (gross of issue costs) as at 31 December are as follows:


60

Under the terms and conditions of the long-term borrowings and debentures, the Company has to comply with certain restrictions and maintain certain financial ratios. As at 31 December 2014, the Group and the Company have no undrawn committed loans. (2013: no undrawn committed loans). The carrying amounts and fair values of long-term debentures (gross of issue costs) as at 31 December are as follows: Consolidated financial statements Carrying amount Fair values* 2014 2013 2014 2013 (in million Baht) Long-term debentures 16,600 2,500 17,734 2,505 Separate financial statements Carrying amount Fair values* 2014 2013 2014 2013 (in million Baht) Long-term debentures - 2,500 - 2,505 * Fair values for traded debentures have been determined based on quoted selling prices from The Thai Bond Market Association at the close of the business on the reporting date. Movement during the years ended 31 December of interest-bearing liabilities was as follows: Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) At 1 January 24,658 20,350 29,037 20,333 Additions 24,658 18,353 17,224 23,843 Borrowing cost (29) (56) - (56) Repayments (12,406) (15,015) (30,996) (16,110) Terminate cost (10) (7) (10) (6) Unrealised loss on foreign exchange 152 1,015 152 1,015 Amortisation 27 18 23 18 At 31 December 37,050 24,658 15,430 29,037 The effective weighted interest rates as at 31 December were as follows: Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (% per annum) Long-term borrowings 3.50 3.34 3.23 3.34 Long-term debentures 4.50 4.75 - 4.75 Finance lease liabilities 4.86 5.05 4.87 5.06


(in million Baht)

Carrying amount Fair values* 2014 2013 2014 2013


60



(in million Baht)

Carrying amount Fair values* 2014 2013 2014 2013

* Fair values for traded debentures have been determined based on quoted selling prices from The Thai Bond Market Association at the close of the business on the reporting date.

Movement during the years ended 31 December of interest-bearing liabilities was as follows:


60



(in million Baht) 2014 2013 2014 2013

148


60



(% per annum) 2014 2013 2014 2013

The effective weighted interest rates as at 31 December were as follows:

21 Trade Accounts PayableConsolidated Financial Statements Separate Financial Statements



61

21 Trade accounts payable Consolidated Separate financial statements financial statements Note 2014 2013 2014 2013 (in million Baht) Related parties 5 51 63 907 501 Other parties 11,852 11,655 379 1,120 Total 11,903 11,718 1,286 1,621

22 Other payables Consolidated Separate financial statements financial statements Note 2014 2013 2014 2013 (in million Baht) Accrued expenses 5 9,997 7,759 2,063 3,413 Value added tax payable 244 349 136 326 Withholding tax payable 330 316 38 100 Others 5 618 1,112 587 1,086 Total 11,189 9,536 2,824 4,925

23 Employee benefit obligations

The Group and the Company had an employee benefit obligation based on the requirement of Thai Labour Protection Act B.E. 2541 (1998) to provide retirement benefits to employees based on pensionable remuneration and length of service and long - term service awards. The statement of financial position obligation was determined as follows: Consolidated



(in million Baht) Present value of obligations 1,500 1,361 406 768 Movement in the present value of the employee benefit obligations Consolidated



(in million Baht) Employee benefit obligations at 1 January 1,361 1,223 768 810 Benefits paid (29) (16) (25) (15) Current service costs and interest 168 154 43 83 Transfer out - - (380) (110) Employee benefit obligations at 31 December 1,500 1,361 406 768




61












(in million Baht) 2014 2013 2014 2013


61











22 Other Payables

23 Employee Benefit Obligations The Group and the Company had an employee benefit obligation based on the requirement of Thai Labour Protection Act B.E. 2541 (1998) to provide retirement benefits to employees based on pensionable remuneration and length of service and long - term service awards.

The statement of financial position obligation was determined as follows:


Financial Report

Movement in the present value of the employee benefit obligations


61












(in million Baht) 2014 2013 2014 2013

Expense recognised in profit or loss


(in million Baht) 2014 2013 2014 2013


62

Expense recognised in profit or loss Consolidated



(in million Baht) Current service costs 115 107 28 56 Interest on obligation 53 47 15 27 Total 168 154 43 83 The Group/Company recognised the expense in the following line items in the statement of income: Consolidated



(in million Baht) Cost of rendering of services and equipment rental 8 10 - - Administrative expenses 105 95 26 54 Management benefit expenses 2 2 2 2 Finance costs 53 47 15 27 Total 168 154 43 83 Actuarial losses recognised in other comprehensive income: Consolidated



(in million Baht) Included in retained earnings : At 1 January 723 723 417 417 At 31 December 723 723 417 417 Principal actuarial assumptions at the reporting date (expressed as weighted averages): Consolidated



(%) Discount rate 3.9 3.9 3.9 3.9 Future salary increases 8 8 8 8 Assumptions regarding future mortality are based on published statistics and mortality tables set as 100% of the 2008 Thailand Mortality rates (“TMO08”).

The Group/Company recognised the expense in the following line items in the statement of income:


62















(in million Baht) 2014 2013 2014 2013

Actuarial losses recognised in other comprehensive income:


62















(in million Baht) 2014 2013 2014 2013

150

Principal actuarial assumptions at the reporting date (expressed as weighted averages):

Assumptions regarding future mortality are based on published statistics and mortality tables set as 100% of the 2008 Thailand Mortality rates (“TMO08”).

24 Share Capital

As at 31 December 2014 and 2013, the total issued number of ordinary shares is 2,973 million shares with a par value of Baht 1 per share. All issued shares are fully paid.

The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at meetings of the Company.

Share premium

Section 51 of the Public Companies Act B.E. 2535 requires companies to set aside share subscription monies received in excess of the par value of the shares issued to a reserve account (“share premium”). Share premium is not available for dividend distribution.

(million share / million Baht)(in Baht)

NumberPer value per share NumberBaht Baht

2014 2013


63

24 Share capital Par value 2014 2013 per share Number Baht Number Baht (in Baht) (million share / million Baht) Authorised At 1 January - ordinary shares 1 4,997 4,997 4,997 4,997 At 31 December - ordinary shares 1 4,997 4,997 4,997 4,997 Issued and paid-up At 1 January - ordinary shares 1 2,973 2,973 2,973 2,973 At 31 December - ordinary shares 1 2,973 2,973 2,973 2,973 As at 31 December 2014 and 2013, the total issued number of ordinary shares is 2,973 million shares with a par value of Baht 1 per share. All issued shares are fully paid. The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at meetings of the Company.

Share premium Section 51 of the Public Companies Act B.E. 2535 requires companies to set aside share subscription monies received in excess of the par value of the shares issued to a reserve account (“share premium”). Share premium is not available for dividend distribution.

25 Legal reserve

Section 116 of the Public Companies Act B.E. 2535 requires that a public company shall allocate not less than 5% of its annual net profit, less any accumulated losses brought forward, to a reserve account (“legal reserve”), until this account reaches an amount not less than 10% of the registered authorised capital. The legal reserve is not available for dividend distribution.


(%) 2014 2013 2014 2013


62















62















Financial Report

25 Legal Reserve Section 116 of the Public Companies Act B.E. 2535 requires that a public company shall allocate not less than 5% of its annual net profit, less any accumulated losses brought forward, to a reserve account (“legal reserve”), until this account reaches an amount not less than 10% of the registered authorised capital. The legal reserve is not available for dividend distribution.

26 Other Components of EquityShare-based paymentThe performance share plan

Grant I

In March 2013, the Annual General Meeting of shareholders No.1/2013 approved to issue warrants to purchase the ordinary shares of the Company. The warrants are offered to employees of the Company and its subsidiaries, including the board of directors of the Company, who are qualified to the Performance share plan (“Project”). The major information is listed below:

Approved date : 27 March 2013Number of warrants offered : 405,800 UnitsExercise price : 206.672 Baht/shareNumber of reserved shares : 405,800 SharesTerm of the Project : 5 years from the date of initial offer of the warrantsOffered price per unit : Baht 0 (zero Baht)Exercise ratio : 1 unit of warrant per 1 ordinary share

Grant II

In March 2014, the Annual General Meeting of shareholders No.1/2014 approved to issue warrants to purchase the ordinary shares of the Company. The warrants are offered to employees of the Company and its subsidiaries, including the board of directors of the Company, who are qualified to the Performance share plan (“Project”). The major information is listed below:

Approved date : 26 March 2014Number of warrants offered : 680,000 UnitsExercise price : 211.816 Baht/shareNumber of reserved shares : 680,000 SharesTerm of the Project : 5 years from the date of initial offer of the warrantsOffered price per unit : Baht 0 (zero Baht)Exercise ratio : 1 unit of warrant per 1 ordinary shareOffer period : Within one year from the date on which the issuance and offer of the warrant under the program is approved by the 2014 annual general meeting of shareholders

152

Fair value measurement

The Group measured the expense of the Project by reference to the fair value of the equity instrument granted at the grant date using the Monte Carlo Simulation technique. The major assumptions are as below:

Grant I

Weighted average fair value at the grant date 183.499 Baht/shareShare price at the grant date 262.000 Baht/shareExercise price 206.672 Baht/shareExpected volatility 23.51%Expected dividend 4.16%Risk-free interest rate 3.07%

Grant II

Weighted average fair value at the grant date 101.617 Baht/shareShare price at the grant date 240.000 Baht/shareExercise price 211.816 Baht/shareExpected volatility 25.15%Expected dividend 5.00%Risk-free interest rate 3.08%

For the year ended 31 December 2014, the Group/Company recognised share-based payment expense at Baht 19 million and Baht 19 million, respectively, on the consolidated and separate financial statements (2013: Baht 7 million and Baht 7 million, respectively).

Movements in the number of outstanding warrants are as follows:

(in units)

At 1 January 2014 Issued Exercised Forfeited At 31 December 2014Transaction During the Period


65

Movements in the number of outstanding warrants are as follows: Transaction during the period At 1 January At 31 December 2014 Issued Exercised Forfeited 2014

(in units) ESOP – Grant I - Directors 19,824 - - - 19,824 - Employees 352,476 - - - 352,476 372,300 - - - 372,300 ESOP – Grant II - Directors - 29,816 - - 29,816 - Employees - 611,768 - - 611,768 - 641,584 - - 641,584 Total 372,300 641,584 - - 1,013,884 Fair value measurement The Group measured the expense of the Project by reference to the fair value of the equity instrument granted at the grant date using the Monte Carlo Simulation technique. The major assumptions are as below: Grant I Weighted average fair value at the grant date 183.499 Baht/share Share price at the grant date 262.000 Baht/share Exercise price 206.672 Baht/share Expected volatility 23.51% Expected dividend 4.16% Risk-free interest rate 3.07% Grant II Weighted average fair value at the grant date 101.617 Baht/share Share price at the grant date 240.000 Baht/share Exercise price 211.816 Baht/share Expected volatility 25.15% Expected dividend 5.00% Risk-free interest rate 3.08% For the year ended 31 December 2014, the Group/Company recognised share-based payment expense at Baht 19 million and Baht 19 million, respectively, on the consolidated and separate financial statements (2013: Baht 7 million and Baht 7 million, respectively). Accounting Policy The Group measured the expense of the Project by reference to the fair value of the equity instrument granted at the grant date. The expense of the Project is charged to the profit or loss from operation corresponding to the increase in “Reserve for share-based payment” in shareholders’ equity over the periods in which the service conditions are fulfilled.


Financial Report

Accounting Policy

The Group measured the expense of the Project by reference to the fair value of the equity instrument granted at the grant date.

The expense of the Project is charged to the profit or loss from operation corresponding to the increase in “Reserve for share-based payment” in shareholders’ equity over the periods in which the service conditions are fulfilled.

Unrealised gain on dilution of investment The unrealised gain on dilution of investment comprises the cumulative net change in portion of investment until the investment is sold or otherwise disposed of.

Fair value changes in available-for-sale investments The fair value changes in available-for-sale investments account within equity comprises the cumulative net change in the fair value of available-for-sale investments until the investments are derecognised or impaired.

27 Segment Information The Group/Company has three reportable segments, as described below, which are the Group/Company’s strategic divisions. The strategic divisions offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the strategic divisions, the chief operating decision maker (CODM) reviews internal management reports on at least a quarterly basis. The following summary describes the operations in each of the Group/Company’s reportable segments.

• Segment1 Mobilephoneandcallcenterservices• Segment2 Mobilephonesales• Segment3 Datanetandbroadbandservices

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before tax, as included in the internal management reports that are reviewed by the Group’s/Company’s CODM. Segment profit before tax is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.

154In

form

atio

n ab

out r

epor

tabl

e se

gmen

ts:

(in m

illion

Bah

t)

Mob

ile P

hone

and

Ca

ll Ce

nter

Ser

vice

sM

obile

Pho

ne S

ales

20

14

2013

20

14

2013

20

14

2013

20

14

2013

Tota

l Rep

orta

ble

Segm

ents

Data

net a

nd B

road

band

Ser

vice

s

Geo

grap

hica

l seg

men

ts

Th

e Gro

up/C

ompa

ny is

man

aged

and

oper

ates

prin

cipal

ly in

Thai

land

. The

re ar

e no

mat

eria

l rev

enue

s der

ived

from

, or a

sset

s loc

ated

in, f

orei

gn co

untri

es.

Adv

ance

d In

fo S

ervi

ce P

ublic

Com

pany

Lim

ited

and

its S

ubsid

iari

es

Not

es to

the

finan

cial

stat

emen

ts

67

Info

rmat

ion

abou

t rep

orta

ble

segm

ents

:

M

obile

pho

ne a

nd

call

cent

er se

rvic

es

M

obile

pho

ne sa

les

D

atan

et a

nd b

road

band

se

rvic

es

To

tal r

epor

tabl

e se

gmen

ts

20

14

20

13

20

14

20

13

20

14

20

13

20

14

20

13

(in

mill

ion

Baht

)

Ex

tern

al re

venu

e 12

5,06

1

130,

700

23

,414

19,1

14

85

4

764

14

9,32

9

150,

578

Inve

stm

ent i

ncom

e 34

3

515

19

24

8

9

37

0

548

Fina

nce

cost

(1

,523

)

(1,0

01)

(3

)

-

(1)

(1

)

(1,5

27)

(1

,002

) D

epre

ciat

ion

and

amor

tisat

ion

(18,

716)

(16,

427)

(7)

(8

)

(199

)

(106

)

(18,

922)

(16,

541)

Se

gmen

t pro

fit (l

oss)

bef

ore

inco

me

tax

47,6

70

45

,593

(1,5

45)

73

4

(42)

(89)

46,0

83

46

,238

M

ater

ial i

tem

s of e

xpen

se

13,0

44

11

,154

1,58

8

346

27

4

257

14

,906

11,7

57

Segm

ent a

sset

s 11

6,12

9

102,

597

7,

095

7,

162

3,

127

2,

267

12

6,35

1

112,

026

Cap

ital e

xpen

ditu

re

31,4

86

31

,565

3

2

944

85

2

32,4

33

32

,419

Se

gmen

t lia

bilit

ies

75,8

80

63

,854

3,15

5

1,87

1

451

40

8

79,4

86

66

,133

G

eogr

aphi

cal s

egm

ents

The

Gro

up/C

ompa

ny is

man

aged

and

ope

rate

s prin

cipa

lly in

Tha

iland

. Th

ere

are

no m

ater

ial r

even

ues d

eriv

ed fr

om, o

r ass

ets l

ocat

ed in

, for

eign

cou

ntrie

s.


Financial Report

28 Revenue of the Company Under the NBTC’s Regulation Revenue from rendering of services and equipment rentals of the Company for the year ended 31 December 2014 and 2013 was classified as follows:

29 Investment Income

30 Other Operating Income

31 Provident Fund The defined contribution plans comprise provident funds established by the Group/Company for its employees. Membership to the funds is on a voluntary basis. Contributions are made monthly by the employees at rates ranging from 3% to 7% of their basic salaries and by the Group/Company at rates ranging from 3% to 7% of the employees’ basic salaries. The provident funds are registered with the Ministry of Finance as juristic entities and are managed by a licensed Fund Manager.




68

28 Revenue of the Company under the NBTC’s regulation Revenue from rendering of services and equipment rentals of the Company for the year ended 31 December 2014 and 2013 was classified as follows: Separate financial statements 2014 2013 (in million Baht) Internet License Type 1 1 1 Other service income 62,029 106,023 Total 62,030 106,024

29 Investment income Consolidated


financial statements Note 2014 2013 2014 2013

(in million Baht) Dividend income Subsidiaries 5,13 - - 22,848 8,216 Other 10 - 5 - 10 - 22,853 8,216 Interest income Related parties 5 - - 1,220 1,102 Associate 5 2 - - - Financial institutions 358 548 59 226 360 548 1,279 1,328 Total 370 548 24,132 9,544

30 Other operating income Consolidated Separate financial statements financial statements Note 2014 2013 2014 2013 (in million Baht) Bad debt recovery 110 99 70 96 Management income 5 - - 163 155 Others 5 220 224 625 377 Total 330 323 858 628

31 Provident Fund

The defined contribution plans comprise provident funds established by the Group/Company for its employees. Membership to the funds is on a voluntary basis. Contributions are made monthly by the employees at rates ranging from 3% to 7% of their basic salaries and by the Group/Company at rates ranging from 3% to 7% of the employees’ basic salaries. The provident funds are registered with the Ministry of Finance as juristic entities and are managed by a licensed Fund Manager.




68







31 Provident Fund





68







31 Provident Fund


156

32 Expenses by Nature The statements of income include an analysis of expenses by function. Significant expenses by nature disclosed in accordance with the requirements of various TFRS were as follows:

33 Finance Costs

34 Income Tax Expense Income tax recognised in profit or loss




69

32 Expenses by nature The statements of income include an analysis of expenses by function. Significant expenses by nature disclosed in accordance with the requirements of various TFRS were as follows: Consolidated Separate financial statements financial statements Note 2014 2013 2014 2013 (in million Baht) Depreciation of plant and equipment 14 6,225 3,037 496 607 Amortisation of assets under Agreements for operations 15 11,309 11,877 11,308 11,064 Amortisation of intangible assets 17,18 1,388 1,627 47 47 Doubtful accounts and bad debts 9 1,240 787 37 360 Marketing expenses 6,220 4,331 648 1,819 Staff cost 7,446 6,639 1,596 3,401

33 Finance costs Consolidated Separate financial statements financial statements Note 2014 2013 2014 2013 (in million Baht) Subsidaries 5 - - 168 42 Related parties 5 1 1 - 1 Financial institutions 1,526 1,001 734 974 Total 1,527 1,002 902 1,017




69

32 Expenses by nature The statements of income include an analysis of expenses by function. Significant expenses by nature disclosed in accordance with the requirements of various TFRS were as follows: Consolidated Separate financial statements financial statements Note 2014 2013 2014 2013 (in million Baht) Depreciation of plant and equipment 14 6,225 3,037 496 607 Amortisation of assets under Agreements for operations 15 11,309 11,877 11,308 11,064 Amortisation of intangible assets 17,18 1,388 1,627 47 47 Doubtful accounts and bad debts 9 1,240 787 37 360 Marketing expenses 6,220 4,331 648 1,819 Staff cost 7,446 6,639 1,596 3,401

33 Finance costs Consolidated Separate financial statements financial statements Note 2014 2013 2014 2013 (in million Baht) Subsidaries 5 - - 168 42 Related parties 5 1 1 - 1 Financial institutions 1,526 1,001 734 974 Total 1,527 1,002 902 1,017




70

34 Income tax expense Income tax recognised in profit or loss Consolidated Separate financial statements financial statements Note 2014 2013 2014 2013 (in million Baht) Current tax expense Current year 7,950 8,244 1,499 5,735 Adjustment for prior years 15 7 4 (3) 7,965 8,251 1,503 5,732 Deferred tax expense 19 Movements in temporary differences 2,115 1,757 2,549 1,615

Total income tax expense 10,080 10,008 4,052 7,347

Reconciliation of effective tax rate Consolidated financial statements 2014 2013 Rate

(%) (in million

Baht) Rate

(%) (in million

Baht) Profit before income tax expense 46,083 46,238 Income tax using the Thai corporation tax rate

20

9,217

20

9,248

Income not subject to tax (2) - Expenses not deductible for tax purposes 155 173 Adjustment for prior year 15 7 Effect from elimination with subsidiaries (11) 12 Current year losses for which no deferred tax asset was recognised

42

282

Written-off deferred tax asset 664 286 Total 22 10,080 22 10,008 Separate financial statements 2014 2013 Rate

(%) (in million

Baht) Rate

(%) (in million


20

7,784

20

8,799

Income not subject to tax (4,571) (1,643) Expenses not deductible for tax purposes 171 151 Adjustment for prior year 4 (3) Written-off deferred tax asset 664 - Impairment loss from investment in a subsidiary - 43 Total 10 4,052 17 7,347


Financial Report

Reconciliation of effective tax rate

Income tax reduction Royal Decree No. 530 B.E. 2554 dated 21 December 2011 grants a reduction in the corporate income tax rate for the three accounting periods 2012, 2013 and 2014; from 30% to 23% for the accounting period 2012 which begins on or after 1 January 2012 and to 20% for the following two accounting periods 2013 and 2014 which begin on or after 1 January 2013 and 2014, respectively. Royal Decree No. 577 B.E. 2557 dated 10 November 2014 extends the reduction to 20% for the accounting period 2015 which begins on or after 1 January 2015.

The Group/Company has applied the reduced tax rate of 20% in measuring deferred tax assets and liabilities as at 31 December 2014 and 2013 in accordance with the clarification issued by the FAP in 2012.


Rate (%) Rate (%)(in million Baht) (in million Baht) 2014 2013


70




(%) (in million

Baht) Rate

(%) (in million


20

9,217

20

9,248


42

282


(%) (in million

Baht) Rate

(%) (in million


20

7,784

20

8,799



Rate (%) Rate (%)(in million Baht) (in million Baht) 2014 2013


70




(%) (in million

Baht) Rate

(%) (in million


20

9,217

20

9,248


42

282


(%) (in million

Baht) Rate

(%) (in million


20

7,784

20

8,799


158

35 Earnings per Share

Basic earnings per share

The calculation of basic earnings per share for the years ended 31 December 2014 and 2013 were based on the profit for the years attributable to ordinary shareholders of the Company and the weighted average number of ordinary shares outstanding during the years as follows:

Diluted earnings per share

The calculation of diluted earnings per share for the years ended 31 December 2014 and 2013 were based on the profit for the years attributable to equity holders of the Company and the weighted average number of ordinary shares outstanding during the years after adjusting for the effects of all dilutive potential ordinary shares as follows:

36 Dividends At the annual general meeting and the board of directors meeting of the company, resolutions were passed to approve the dividend and interim dividend payment to the shareholders as follows:


(in million Baht / million shares) 2014 2013 2014 2013


71

Income tax reduction Royal Decree No. 530 B.E. 2554 dated 21 December 2011 grants a reduction in the corporate income tax rate for the three accounting periods 2012, 2013 and 2014; from 30% to 23% for the accounting period 2012 which begins on or after 1 January 2012 and to 20% for the following two accounting periods 2013 and 2014 which begin on or after 1 January 2013 and 2014, respectively. Royal Decree No. 577 B.E. 2557 dated 10 November 2014 extends the reduction to 20% for the accounting period 2015 which begins on or after 1 January 2015. The Group/Company has applied the reduced tax rate of 20% in measuring deferred tax assets and liabilities as at 31 December 2014 and 2013 in accordance with the clarification issued by the FAP in 2012.

35 Earnings per share Basic earnings per share The calculation of basic earnings per share for the years ended 31 December 2014 and 2013 were based on the profit for the years attributable to ordinary shareholders of the Company and the weighted average number of ordinary shares outstanding during the years as follows: Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht / million shares) Profit attributable to ordinary shareholders of the Company (basic)

36,033

36,274

34,866

36,648 Weighted average number of ordinary shares outstanding (basic)

2,973

2,973

2,973

2,973

Earnings per share (basic) (in Baht) 12.12 12.20 11.73 12.33 Diluted earnings per share The calculation of diluted earnings per share for the years ended 31 December 2014 and 2013 were based on the profit for the years attributable to equity holders of the Company and the weighted average number of ordinary shares outstanding during the years after adjusting for the effects of all dilutive potential ordinary shares as follows: Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht / million shares) Profit attributable to equity holders of the Company (basic)

36,033

36,274

34,866

36,648

Profit attributable to equity holders of the Company (diluted)

36,033

36,274

34,866

36,648

Weighted average number of ordinary shares outstanding (basic)

2,973

2,973

2,973

2,973

Effect of share-based payment - - - - Weighted average number of ordinary shares outstanding (diluted)

2,973

2,973

2,973

2,973

Earnings per share (diluted) (in Baht) 12.12 12.20 11.73 12.33


(in million Baht / million shares) 2014 2013 2014 2013


71

Income tax reduction Royal Decree No. 530 B.E. 2554 dated 21 December 2011 grants a reduction in the corporate income tax rate for the three accounting periods 2012, 2013 and 2014; from 30% to 23% for the accounting period 2012 which begins on or after 1 January 2012 and to 20% for the following two accounting periods 2013 and 2014 which begin on or after 1 January 2013 and 2014, respectively. Royal Decree No. 577 B.E. 2557 dated 10 November 2014 extends the reduction to 20% for the accounting period 2015 which begins on or after 1 January 2015. The Group/Company has applied the reduced tax rate of 20% in measuring deferred tax assets and liabilities as at 31 December 2014 and 2013 in accordance with the clarification issued by the FAP in 2012.

35 Earnings per share Basic earnings per share The calculation of basic earnings per share for the years ended 31 December 2014 and 2013 were based on the profit for the years attributable to ordinary shareholders of the Company and the weighted average number of ordinary shares outstanding during the years as follows: Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht / million shares) Profit attributable to ordinary shareholders of the Company (basic)

36,033

36,274

34,866

36,648 Weighted average number of ordinary shares outstanding (basic)

2,973

2,973

2,973

2,973

Earnings per share (basic) (in Baht) 12.12 12.20 11.73 12.33 Diluted earnings per share The calculation of diluted earnings per share for the years ended 31 December 2014 and 2013 were based on the profit for the years attributable to equity holders of the Company and the weighted average number of ordinary shares outstanding during the years after adjusting for the effects of all dilutive potential ordinary shares as follows: Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht / million shares) Profit attributable to equity holders of the Company (basic)

36,033

36,274

34,866

36,648

Profit attributable to equity holders of the Company (diluted)

36,033

36,274

34,866

36,648

Weighted average number of ordinary shares outstanding (basic)

2,973

2,973

2,973

2,973

Effect of share-based payment - - - - Weighted average number of ordinary shares outstanding (diluted)

2,973

2,973

2,973

2,973

Earnings per share (diluted) (in Baht) 12.12 12.20 11.73 12.33


Financial Report

Year ended 31 December 2013


37 Financial Instruments

Financial risk management policies

Risk management is integral to the whole business of the Group/Company. The Group/Company has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. The management continually monitors the Group’s/Company’s risk management process to ensure that an appropriate balance between risk and control is achieved.

Capital management

• TheGroup/Companyaimtomanageitscapitalstructuretobestrongerthanindustrypeerandcommittobe investment grade rating. This will allow the Group/Company to retain superior financial flexibility in order to capture future growth prospect. The Group’s/Company’s financial flexibility means diversified source of capital, ease of funding, and appropriate cost of capital.

• Inanintermediateterm,theGroup/CompanyviewthattelecommunicationsindustryinThailandwillfaceanother phase of technology change and hence new investment will be required. The statement of financial position of the Group/Company is flexible to prepare the Group/Company for such investment and the Group/Company aim to leverage on its gearing through debt instrument.

Interest rate risk

Interest rate risk is the risk that future movements in market interest rates will affect the results of the Group’s/ Company’s operations and its cash flows because some of debt securities and loan interest rates are floating interest rate. The Group/Company is primarily exposed to interest rate risk from its borrowings (Note 20). The Group/Company mitigates this risk by ensuring that the majority of its debt securities and borrowings are at fixed interest rates and uses derivative financial instruments, principally interest rate swaps, to manage exposure to fluctuations in interest rates on specific debt securities and borrowings.

(Baht / shares) (in million Baht)

Dividend RatioDate of MeetingThe Resolution of:

Total Dividend


72

36 Dividends

At the annual general meeting and the board of directors meeting of the company, resolutions were passed to approve the dividend and interim dividend payment to the shareholders as follows: Year ended 31 December 2013

Dividend ratio Total dividend The resolution of: Date of meeting (Baht/share) (in million Baht)

The general shareholders 27 March 2013 5.00 14,863

The board of directors 7 August 2013 6.40 19,026 33,889





37 Financial instruments

Financial risk management policies Risk management is integral to the whole business of the Group/Company. The Group/Company has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. The management continually monitors the Group’s/Company’s risk management process to ensure that an appropriate balance between risk and control is achieved. Capital management The Group/Company aim to manage its capital structure to be stronger than industry peer and

commit to be investment grade rating. This will allow the Group/Company to retain superior financial flexibility in order to capture future growth prospect. The Group’s/Company’s financial flexibility means diversified source of capital, ease of funding, and appropriate cost of capital.

In an intermediate term, the Group/Company view that telecommunications industry in Thailand will face another phase of technology change and hence new investment will be required. The statement of financial position of the Group/Company is flexible to prepare the Group/Company for such investment and the Group/Company aim to leverage on its gearing through debt instrument.

Interest rate risk Interest rate risk is the risk that future movements in market interest rates will affect the results of the Group’s/Company’s operations and its cash flows because some of debt securities and loan interest rates are floating interest rate. The Group/Company is primarily exposed to interest rate risk from its borrowings (Note 20). The Group/Company mitigates this risk by ensuring that the majority of its debt securities and borrowings are at fixed interest rates and uses derivative financial instruments, principally interest rate swaps, to manage exposure to fluctuations in interest rates on specific debt securities and borrowings.

(Baht / shares) (in million Baht)

Dividend RatioDate of MeetingThe Resolution of:

Total Dividend


72

36 Dividends

At the annual general meeting and the board of directors meeting of the company, resolutions were passed to approve the dividend and interim dividend payment to the shareholders as follows: Year ended 31 December 2013








37 Financial instruments

Financial risk management policies Risk management is integral to the whole business of the Group/Company. The Group/Company has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. The management continually monitors the Group’s/Company’s risk management process to ensure that an appropriate balance between risk and control is achieved. Capital management The Group/Company aim to manage its capital structure to be stronger than industry peer and

commit to be investment grade rating. This will allow the Group/Company to retain superior financial flexibility in order to capture future growth prospect. The Group’s/Company’s financial flexibility means diversified source of capital, ease of funding, and appropriate cost of capital.

In an intermediate term, the Group/Company view that telecommunications industry in Thailand will face another phase of technology change and hence new investment will be required. The statement of financial position of the Group/Company is flexible to prepare the Group/Company for such investment and the Group/Company aim to leverage on its gearing through debt instrument.

Interest rate risk Interest rate risk is the risk that future movements in market interest rates will affect the results of the Group’s/Company’s operations and its cash flows because some of debt securities and loan interest rates are floating interest rate. The Group/Company is primarily exposed to interest rate risk from its borrowings (Note 20). The Group/Company mitigates this risk by ensuring that the majority of its debt securities and borrowings are at fixed interest rates and uses derivative financial instruments, principally interest rate swaps, to manage exposure to fluctuations in interest rates on specific debt securities and borrowings.

160

Foreign currency risk

The Group/Company is exposed to foreign currency risk relating to expense and borrowings which are denominated in foreign currencies. The Group/Company primarily utilises forward exchange contracts with maturities of less than one year to hedge such financial liabilities denominated in foreign currencies and swap and forward contracts to hedge long-term borrowings denominated in foreign currencies. The forward exchange contracts entered into at the reporting date also relate to borrowings, denominated in foreign currencies, for the subsequent period.

At 31 December, the Group and the Company were exposed to foreign currency risk in respect of financial assets and liabilities denominated in the following currencies:


(in million Baht) 2014 2013 2014 2013


73

Foreign currency risk The Group/Company is exposed to foreign currency risk relating to expense and borrowings which are denominated in foreign currencies. The Group/Company primarily utilises forward exchange contracts with maturities of less than one year to hedge such financial liabilities denominated in foreign currencies and swap and forward contracts to hedge long-term borrowings denominated in foreign currencies. The forward exchange contracts entered into at the reporting date also relate to borrowings, denominated in foreign currencies, for the subsequent period. At 31 December, the Group and the Company were exposed to foreign currency risk in respect of financial assets and liabilities denominated in the following currencies: Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) Assets United States Dollars 397 833 160 371 Singapore Dollars 38 - 49 - Euro Dollars 39 2 15 1 474 835 224 372 Liabilities United States Dollars (16,639) (18,280) (11,594) (14,311) Japan Yen (11) (102) (3) (14) Singapore Dollars - (39) - (17) Euro Dollars (4) (17) (1) (5) Australian Dollars - (3) - (3) Pound sterling - (121) - (4) (16,654) (18,562) (11,598) (14,354) Gross statement of financial position exposure

Currency swaps 10,499 12,780 10,499 12,780 Currency forwards 484 865 209 865 Net exposure (5,197) (4,082) (666) (337)


Financial Report

As at 31 December swap and forward receivables (payables), net as follows:

The nominal amounts and fair values of swap and forward contracts as at 31 December are as follows:

* The fair value of swap and forward contracts is the adjusted value of the original contracts which the Company entered with the commercial banks with the market price on the reporting date in order to reflect the current value of the contracts.** The nominal amount of swap and forward contracts is the value of the original contracts which the Company entered with the commercial banks and must be repaid at the maturity date.


(in million Baht) 2014 2013 2014 2013


74

As at 31 December swap and forward receivables (payables), net as follows: Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) Swap contracts: Swap contracts receivable 11,221 13,333 11,221 13,333 Swap contracts payable** (10,499) (12,780) (10,499) (12,780) Total swap contracts receivable/(payable) 722 553 722 553 Forward contracts: Forward contracts receivable 471 801 197 801 Forward contracts payable** (484) (865) (209) (865) Total forward contracts payable (13) (64) (12) (64) Total swap and forward contracts: Swap and forward contracts receivable 11,692 14,134 11,418 14,134 Swap and forward contracts payable** (10,983) (13,645) (10,708) (13,645) Total swap and forward contracts

receivable/(payable) 709 489 710 489 Current assets (liabilities) Other current assets 141 - 141 - Other current liabilities (1) (164) - (164) Total current assets (liabilities) 140 (164) 141 (164) Non-current assets (liabilities) Swap and forward contracts receivable 569 741 569 741 Swap and forward contracts payable - (88) - (88) Total non-current assets (liabilities) 569 653 569 653 Total 709 489 710 489 The nominal amounts and fair values of swap and forward contracts as at 31 December are as follows: Consolidated financial statements Nominal amounts** Fair values* 2014 2013 2014 2013 (in million Baht) Swap contracts 10,499 12,780 10,945 13,153 Forward contracts 484 865 477 817 Total 10,983 13,645 11,422 13,970 Separate financial statements Nominal amounts** Fair values* 2014 2013 2014 2013 (in million Baht) Swap contracts 10,499 12,780 10,945 13,153 Forward contracts 209 865 200 817 Total 10,708 13,645 11,145 13,970 *The fair value of swap and forward contracts is the adjusted value of the original contracts which the Company entered with the commercial banks with the market price on the reporting date in order to reflect the current value of the contracts. **The nominal amount of swap and forward contracts is the value of the original contracts which the Company entered with the commercial banks and must be repaid at the maturity date.


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Nominal amounts** Fair values*

(in million Baht) 2014 2013 2014 2013


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Nominal amounts** Fair values*

(in million Baht) 2014 2013 2014 2013


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Credit risk

Credit risk is the potential financial loss resulting from the failure of a customer or a counterparty to settle its financial and contractual obligations to the Group/Company as and when they fall due.

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. At the reporting date there were no significant concentrations of credit risk.

Liquidity surplus

Excess liquidity (defined as any excess cash after working capital and capital expenditures) after investment in new growth areas and any debt/regulatory obligations/restructuring will be returned to shareholders.

Determination of fair values

A number of the Group’s/Company’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. The fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

The Group/Company uses the following methods and assumptions in estimating the fair value of financial instruments:

• The fair value of accounts receivable and accounts payable - trade andothers is taken to approximate the carrying value.• Thefairvaluesofinvestmentsinequityanddebtsecurities,whichareheld-to-maturity,are taken to approximate the carrying value.• Thefairvalueofloanstoandloansfromrelatedistakentoapproximatethecarryingvaluebecausemostofthese financial instruments bear interest at market rates.• Thefairvalueoflong-termborrowingsistakentoapproximatethecarryingvaluebecausemostofthesefinancial instruments bear interest at market rate.


Financial Report

38 Commitments with Non-Related Parties

The Group has entered into lease and related service agreements for office space, cars, computers and base station for periods ranging from 1 year to 15 years with options to renew.



(in million) 2014 2013 2014 2013


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38 Commitments with non-related parties

Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million) Capital commitments Contracted but not provided for Intangible assets under the Agreement for operations

Thai Baht 69 453 69 453 United States Dollars 3 8 3 8 Japanese Yen - 33 - 33

Property and equipment

Thai Baht 18,765 15,166 30 117 United States Dollars 314 268 - - Japanese Yen 97 411 - - Euro - 1 - -

Service maintenance agreements

Thai Baht 1,651 1,043 607 372 United States Dollars 16 19 6 11 Japanese Yen 12 11 10 11

Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) Non-cancellable operating lease Commitments Within one year 1,722 1,321 292 414 After one year but within five years 2,073 1,511 262 415 After five years - 2 - 2 Total 3,795 2,834 554 831 Other commitments Forward and swap contracts 10,983 13,645 10,708 13,645 Bank guarantees:

- The Agreements for operation 1,460 1,460 1,460 1,460 - Spectrum license payable 3,912 7,824 - - - Others 1,029 945 313 418

Total 17,384 23,874 12,481 15,523 The Group has entered into lease and related service agreements for office space, cars, computers and base station for periods ranging from 1 year to 15 years with options to renew.



(in million Baht) 2014 2013 2014 2013


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38 Commitments with non-related parties

Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million) Capital commitments Contracted but not provided for Intangible assets under the Agreement for operations

Thai Baht 69 453 69 453 United States Dollars 3 8 3 8 Japanese Yen - 33 - 33

Property and equipment

Thai Baht 18,765 15,166 30 117 United States Dollars 314 268 - - Japanese Yen 97 411 - - Euro - 1 - -

Service maintenance agreements

Thai Baht 1,651 1,043 607 372 United States Dollars 16 19 6 11 Japanese Yen 12 11 10 11

Consolidated Separate financial statements financial statements 2014 2013 2014 2013 (in million Baht) Non-cancellable operating lease Commitments Within one year 1,722 1,321 292 414 After one year but within five years 2,073 1,511 262 415 After five years - 2 - 2 Total 3,795 2,834 554 831 Other commitments Forward and swap contracts 10,983 13,645 10,708 13,645 Bank guarantees:

- The Agreements for operation 1,460 1,460 1,460 1,460 - Spectrum license payable 3,912 7,824 - - - Others 1,029 945 313 418

Total 17,384 23,874 12,481 15,523 The Group has entered into lease and related service agreements for office space, cars, computers and base station for periods ranging from 1 year to 15 years with options to renew.

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39 Contingent Liabilities Pursuant to the letter dated 18 January 2013, the Revenue Department has challenged the Company and Digital Phone Company Limited (“DPC”), a subsidiary, to pay surcharge of Baht 128 million and Baht 6 million, respectively, regarding the withholding tax on revenue sharing payment after excise tax deduction by giving the opinion that the excise tax is a part of revenue sharing. Therefore, the Company and DPC will be liable to pay the shortage of with-holding tax amount of excise Tax which came from the revenue sharing payment without excise tax deduction. The Company and DPC have submitted the appeal to the Commission of Appeal. At present, the said cases are pending on the consideration process of the Commission of Appeal.

40 Significant Events, Commercial Disputes and Litigation

The Company

1) The opinion of the Council of State relating to the amendments or supplements to the Agreement for Operation

Pursuant to the letter of the Ministry of Information and Communication Technology to the Council of State requesting opinion on whether the amendments or supplements to the agreement between TOT Public Company Limited who is the Telephone Organization of Thailand at that time (“TOT”) and Advanced Info Service Public Company Limited after the enforcement of the Act on Private Participation in State Undertaking, B.E. 2535 are legitimately effected and in case those amendments or supplements to the Agreement are not legitimately effected according to such Act, what guidelines TOT should implement.

The Council of State was of the opinion by its Memorandum of the Council of State no. 291/2550 on Enforcement of the Act on Private Participation in State Undertaking, B.E. 2535 (in the case of the Agreement Permitting Undertaking of Cellular Mobile Telephone Services, “the Agreement” between TOT Public Company Limited and Advanced Info Service Public Company Limited) that

*“... since TOT being the contracting party in this case acted on behalf of the State by virtue of the authority and duty pursuant to Telephone Organization of Thailand Act, the executed Agreement thus represents the agreement between the State and the private sector in order to authorise the private sector to provide public services to the public on behalf of the State. The State therefore is obligated to perform according to those stipulated in that Agreement.

However, since the amendments to the Agreement upon which the consultation is being sought were not legitimately carried out according to the Act on Private Participation in State Undertaking, B.E. 2535 which was in force at the time of effecting those amendments because those amendments had not been proposed for the consid-eration of the Coordination committee according to Section 22 and not forwarded to the Cabinet, being the organ charged with the authority to approve of the amendments to the Agreement pursuant to the Act as aforesaid, the amendments made to the Agreement with TOT as the contracting party were therefore carried out without legal authority.


Financial Report

However, the procedures to amend the Agreement represent administrative juristic acts which are capable of being separated from the amendments to the Agreement already effected and those amendments to the Agreement are still in force so long as they are not rescinded or extinguished by statute of limitation or by other causes. In case the Cabinet, vested with the authority under the law and having considered the causes for the rescission, the impact, and the propriety on the basis of the State’s and the public interest, is of the opinion that the illegitimate procedures have resulted in damage that warrants rescinding the amendments to the Agreement already effected, the Cabinet may legitimately rescind such amendments to the Agreement. However, if the Cabinet, upon having considered the same, deems it justified, with regard to the State’s or the public interest and the continuity of providing public services, the Cabinet may exercise its discretion to grant approval for the procedures to further amend the Agreement, as appropriate, with the unit owning the project and the Coordination committee pursuant to Section 22 being the parties to submit the facts, justifications, and opinion for the consideration of the Cabinet.”

*The above clauses in “...” represent some parts of the Memorandum of the Council of State no. 291/2550. The full text Memorandum of the Council of State is available only in Thai language.

In addition, the Coordinating Committee according to Clause 22 has already submitted the opinion regarding the amendments of the Agreement of the Company to the Minister of the Information and Communications Technology.

2) The deduction of excise tax from the revenue sharing between the Company and TOT Public Company Limited (“TOT”)

On 22 January 2008, TOT Public Company Limited (“TOT”) submitted a dispute no. black 9/2551 to the Arbitration Institute, Dispute Reconciliation Office, Justice Court Office demanding the Company to pay additional payment of revenue sharing under the Cellular Mobile Phone Contract in the amount of Baht 31,463 million under the Cellular Mobile Phone Contract plus interest at the rate of 1.25 percent per month computing from the default date on 10 January 2007 until the full payment is made.

This amount is the same as an excise tax that the Company had delivered to Excise Department during 28 January 2003 to 26 February 2007 and deducted it from revenue sharing according to the resolution of the Cabinet dated 11 February 2003. Thus, the Company has fully complied with the Cabinet’s resolution dated 11 February 2003 and this practice is the same as other operators in mobile phone or cellular radio telecommunication industries according to the resolution of the Cabinet. Moreover, TOT had sent letter no. Tor Sor Tor. Bor Yor./843 dated 10 March 2003 stating that the Company has fully complied with the Cabinet’s resolution and the Company’s burden remains at the same percentage rate as specified in the contract and the submission of the said excise tax return shall not affect the terms of the contract.

On 20 May 2011, the Arbitral Tribunal has dismissed the case by giving the reason which can be summarised that the Company was not in breach of the Agreement since the Company has completely made the payment of the revenue sharing and all debt was therefore paid in full. Therefore, TOT has no right to re-claim for the alleged deficit amount.

On 22 September 2011, TOT has submitted the case no. Black 1918/2554 to the Central Administrative Court to revoke the Arbitral Tribunal’s award. Presently, the said case is pending on the Central Administrative Court process.

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3) Interconnection agreement in accordance with the announcement of National Telecommunication Commission (“NTC”)

According to Telecommunication Business Operation Act B.E. 2544 and the announcement of National Telecom-munication Commission (“NTC”) regarding the Use and Interconnect of Telecommunication Network B.E. 2549, the Company has entered into an interconnection (“IC”) agreement with other operators approved by NTC and the effective period of the agreement is listed below:

Operators Effective period

1) Total Access Communication PCL. 30 November 2006 onwards2) Truemove Company Limited 16 January 2007 onwards3) Digital Phone Company Limited 1 June 2009 onwards4) CAT Telecom Public Company Limited 7 April 2010 onwards5) Advanced Wireless Network Company Limited 1 April 2013 onwards6) dtac TriNet Company Limited 1 July 2013 onwards7) Real Future Co., Ltd 1 July 2013 onwards

On 31 August 2007, TOT Public Company Limited (“TOT”) has filed a lawsuit against NTC to the Central Administrative Court to revoke the said announcement. On 15 September 2010, the Central Administrative Court has dismissed the case which TOT filed to revoke the announcement of NTC regarding the Use and Interconnect of Telecommunication Network B.E. 2549. TOT has appealed such dismissal to the Supreme Administrative Court. On 4 February 2008 TOT sent a letter to the Company informing that the Company should wait for the final judgment of the Court. Should the Company undertake the IC agreements per the NTC announcement before the final judgment of the Court, TOT shall not recognise the Company’s related actions and the Company must be responsible for such actions.

Having considered the said TOT’s letter, related laws and the legal counsel’s opinion, the Company’s management is of the opinion that non-compliance by the Company with the IC agreements shall be deemed violating the said NTC announcement. Therefore, the Company has decided to comply with the IC agreements in line with the current legal provisions.

According to the Agreement to operate cellular mobile telephone service, the Company has to pay the higher of stipulated annual minimum payment or the percentage of service revenues prior to deducting expenses and taxes. However, the Company had to comply with the regulation while TOT would like to wait for the final judgment of the Court. As a result, the Company anticipated entering into a negotiation with TOT in relation to a calculation method of the revenue sharing. The Company calculated the revenue sharing from the net IC revenue which is similar to other operators in the telecommunication industry on a conservative basis. The revenue sharing amount to be paid to TOT is subject to the final judgment of the Court in relation to revoking the announcement of NTC and a negotiation between TOT and the Company. The Company will make adjustment in the financial statement in the period when the issue has been agreed. The Company’s management is certain that it will not incur significant expense more than the revenue sharing amount which the Company has recorded.


Financial Report

However, after having considered the letter from TOT, the relevant laws and the comments of the legal consultant, the management of the Company is of the opinion that non-compliance with the above Interconnection Agreement would be in conflict with the announcement of NTC regarding the Use and Interconnect of Telecommunication Network. Therefore, the Company decided to comply with the said Agreements which are in line with the legal provisions currently in force by issuing invoices to collect the interconnection charge from the contractual parties.

On 30 December 2008, the Company has remitted the revenue sharing incurred from the interconnection of the telecommunication network since February 2007 to June 2008 in the amount of Baht 761 million based on the rate and calculation method of the Company to TOT. Later, the Company and TOT had set up the negotiation committee to seek for the conclusion but it could not be done as TOT required the Company to pay revenue sharing calculated on gross interconnection charges received by the Company at the rate specified in the Agreement without deduction of interconnection charges which the Company has to pay to other operators. Thus, on 26 January 2011, TOT sent a letter demanding the Company to pay the revenue sharing on the interconnection charges of the Agreement for operations year 17th - 20th in the amount of Baht 17,803 million plus interest at the rate of 1.25% per month. But the Company disagreed and sent a letter opposing the said claim to TOT and the Company has submitted the dispute to the Dispute Reconciliation Office, Arbitration Institute ref. no. Black 19/2554 on 9 March 2011 requesting the Arbitral Tribunal to give an award that TOT has no right to claim for such revenue sharing.

On 29 July 2014, TOT has submitted a dispute no. 55/2557 demanding the Company to pay additional payment for the revenue sharing on the interconnection charges of the operation years 21st - 22nd in the amount of Baht 9,984 million plus interest at 1.25% per month on its outstanding and computing from the default date until the full payment is made. In addition, TOT has requested this case to be under the same consideration with the case no. Black 19/2554 to the Arbitral Tribunal. At present, the said disputes are pending on the Arbitration process.

4) Obligations of the bank guarantees in connection with the Agreement for Operations

According to the Agreement, the Company has the duties to deliver the bank guarantees to TOT Public Company Limited (“TOT”) to secure the payment of the minimum revenue sharing for each operation year and shall recover the bank guarantee of the operation year back.

TOT did not return the bank guarantees which have secured the payment of the minimum revenue sharing for the operation year 17th - 21st for a total value of Baht 7,007 million by claiming that the Company had not completely paid the revenue sharing due to the deduction of the revenue sharing for the Excise Tax and the deduction of the Interconnection Charges where the disputes of which have been pending the consideration of the Arbitral Tribunal.

On 11 May 2011 and on 5 October 2012, the Company has submitted the disputes to the Office of Dispute Resolution, Arbitration Institute, case no. Black 40/2554 and 119/2555 requesting the Arbitral Tribunal to award an order to TOT to return the bank guarantees to the Company because the Company has completely paid the revenue sharing for each operation year and has correctly and fully complied with the law and the relating Agreements in all respects.

On 10 February 2014, the Arbitral Tribunal has given the arbitration award to order TOT to return the bank guarantees for the operation year 17th - 21st to the Company. On 16 May 2014, TOT has submitted the case no. Black 660/2557 to the Central Administrative Court to revoke the Arbitral Tribunal’s award.

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On 19 May 2014, the Company has submitted the case no. Black 666/2557 to the Central Administrative Court requesting TOT to return the bank guarantees for the 17th - 21st operation year to the Company according to the arbitration award and pay the bank guarantees fee of Baht 6.65 million which had been paid by the Company to the banks as well as interest at 7.5% per annum computing from the date that Company paid to the banks. Currently, this black case is in the Central Administrative Court procedure.

5) 900 MHz subscribers migration to 3G 2100 MHz

On 25 September 2014, TOT Public Company Limited (“TOT”) has submitted a dispute no. Black 80/2557 to the Arbitration Institute demanding the Company to pay compensation from the 900 MHz subscribers porting to 3G 2100 MHz provided by its subsidiary in the amount of Baht 9,126 million plus interest at 7.5% per annum from 25 September 2014 until the full payment is made.

Currently, the case is in the Arbitration process. The Company’s management believes that the Company has correctly and fully complied with the related conditions of the Agreement in all respects then the outcome of the said dispute shall be settled favourably and has no considerable impact on the financial statements of the Company.

Digital Phone Company Limited (“DPC”)1) The deduction of excise tax from the revenue sharing between DPC and CAT Telecom Public Company Limited (“CAT”)

On 9 January 2008, CAT Telecom Public Company Limited (“CAT”) submitted a dispute to the case no. black 3/2551 to the Arbitration Institute and the Dispute Reconciliation Office, Justice Court Office demanding DPC, a subsidiary, to pay additional payment of revenue sharing under the Digital Personal Communication Network Contract in the amount of Baht 2,449 million plus penalty at the rate of 1.25% per month of the unpaid amount of each year computing from the default date until the full payment is made which total penalty calculated up to December 2007 is Baht 1,500 million, totalling Baht 3,949 million.

Later, on 1 October 2008, CAT has submitted the petition to adjust the amount claimed to Baht 3,410 million which calculated from the outstanding revenue sharing up to January 2008 including penalty for Baht 790 million and value added tax for Baht 171 million.

This amount is the same as an excise tax that DPC had delivered to Excise Department during 16 September 2003 to 15 September 2007 and deducted it from revenue sharing according to the resolution of the Cabinet dated 11 February 2003. Moreover, CAT has sent a letter No. CAT 603 (Kor Tor.) 739 notifying DPC to comply with such Cabinet’s resolution. Thus, DPC has correctly and fully complied with the Cabinet’s resolution dated 11 February 2003 and this practice is the same as other operators in mobile phone or cellular radio telecommunication industries according to the resolution of the Cabinet.

On 1 March 2011, the Arbitral Tribunal has dismissed the case by giving the reason which can be summarised that DPC was not in breach of the Agreement since DPC has completely made the payment of the revenue sharing and all debt was therefore paid in full. Therefore, CAT has no right to re-claim for the alleged deficit amount, including the penalty and the value added tax.

On 3 June 2011, CAT has submitted the case no. Black 1259/2554 to the Central Administrative Court to revoke the Arbitral Tribunal’s award. Presently, the said case is pending on the Central Administrative Court process.


Financial Report

2) The deduction of access charge from revenue sharing between DPC and CAT Telecom Public Company Limited (“CAT”)

Pursuant to the resolution of the meeting on 14 January 2004 between TOT Public Company Limited (“TOT”), CAT Telecom Public Company Limited (“CAT”), Digital Phone Company Limited (“DPC”), a subsidiary, and True Move Company Limited (“True Move”) by the Minister of the Information and Communications Technology Ministry, the Chairman, that TOT consented to reduce access charge of mobile phone from revenue sharing which TOT received from CAT in the amount of Baht 22 /number/month to DPC and True Move starting from the 6th operation year as Total Access Communication Public Company Limited (“DTAC”) had received from TOT.

On 12 October 2006 TOT sent a letter to CAT that TOT could not reduce access charge of mobile phone to DPC and True Move and demanding CAT to pay the access charge that DPC and True Move have deducted as a discount of access charge plus legal interest rate computing from the default date until the fully payment is made.

On 29 July 2008, CAT submitted a dispute no. black 68/2551 to the Arbitration Institute and the Dispute Reconciliation Office, Justice Court Office demanding DPC to pay access charge of mobile phone that DPC had deducted for Baht 154 million (additional consideration of the 7th -10th operation year) plus value added tax and interest at the rate 1.25 percent per month of the above principal amount starting from the default date of each year since the 7th -10th operation year until the full payment is made.

On 15 October 2009, CAT submitted a dispute no. black 96/2552 to the Arbitration Institute and the Dispute Reconciliation Office, Justice Court Office demanding DPC to pay access charge of mobile phone that DPC had deducted for Baht 22 million (additional consideration of the 11th operation year) including the penalty at the rate of 1.25 percent per month which calculated up to 15 October 2009, total amount of claim is Baht 26 million.

On 23 March 2012, the Arbitral Tribunal has dismissed the said two disputes by giving the reason which can be summarised that CAT has not yet paid the discount Baht 22/number/month to TOT. Moreover, CAT cannot prove that DPC has breached the Agreement and has made the payment of revenue sharing incorrectly. Therefore, CAT has no right to re-claim for the alleged deficit amount, including the penalty fine and the value added tax.

On 25 June 2012, CAT has submitted the case no. Black 1016/2555 to the Central Administrative Court to revoke the Arbitral Tribunal’s award, and on 16 September 2014, the Central Administrative Court has issued the dismissal order of this case. On 15 October 2014, CAT has appealed such dismissal to the Supreme Administrative Court. At present, the said case is pending for consideration of the Supreme Administrative Court.

3) Access charge payment between DPC, CAT Telecom Public Company Limited (“CAT” ) and TOT Public Company Limited (“TOT”)

On 9 May 2011, TOT Public Company Limited (“TOT”) has submitted the case no. Black 1099/2554 to the Central Administrative Court against CAT Telecom Public Company Limited (“CAT”) as the defendant no. 1 and Digital Phone Company Limited (“DPC”) as the defendant no. 2 demanding CAT and DPC to pay the access charge amounting to Baht 2,436 million plus value added tax and interest calculated up to 9 May 2011, total amount of claim is Baht 2,954 million plus interest until the full payment is made as follows:

1) Part of DPC calculating on the amount of the mobile phone number which DPC had rendered the service at the rate of Baht 200/number/month, in the amount of Baht 432 million. 2) Part of CAT calculating on a half of the revenue sharing which CAT had received from DPC, in the amount of Baht 2,331 million.

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3) The discount of access charge at the rate of Baht 22/number/month that DPC deducted from the revenue sharing, in the amount of Baht 191 million. Part of this demand is the same amount as CAT has claimed according to the dispute no. Black 68/2551 mentioned above but different in terms of the calculation period and interest.

Later, 31 July 2014 TOT has submitted a petition for revision to adjust the access charge amounting to Baht 5,454 million calculated up to 16 September 2013 which is the date of the Agreement for operation period ended plus valued add tax and interest calculated up to 10 July 2014 plus interest calculated from 10 July 2014 until full payment is made as follows.

1) Part of DPC calculating on the amount of the mobile phone number which DPC had rendered the service at the rate of Baht 200/number/month, in the amount of Baht 1,289 million. 2) Part of CAT calculating on a half of the revenue sharing which CAT had received from DPC, in the amount of Baht 3,944 million. 3) The discount of access charge at the rate of Baht 22/number/month that DPC deducted from the revenue sharing, in the amount of Baht 221 million.

At present, the said case is pending consideration of the Central Administrative Court. The Company’s management believes that the outcome of the said case shall be in favour of DPC and have no material impact on the consolidated financial statements of the Company since DPC has correctly and fully complied with the law and the relating Agreements in all respects.

4) To deliver and transfer ownership of towers and equipments of power supply between DPC and CAT Telecom Public Company Limited (“CAT”)

On 3 February 2009, CAT Telecom Public Company Limited (“CAT”) has submitted a dispute under the case no. Black 8/2552 to the Alternative Dispute Resolution Office, the Arbitration Institute, demanding DPC, a subsidiary, to deliver and transfer ownership of 3,343 towers including 2,653 equipments of power supply under the Digital PCN (“Personal Communication Network Agreement”). Failure to do so, DPC must reimburse Baht 2,230 million to CAT. DPC considers that all disputed assets, towers and the equipment of power supply are not the property as stipulated in the Agreement.

On 18 July 2012, the Arbitral Tribunal has given the arbitration award to dismiss the said disputes under the reason that the request by CAT to demand the delivery of the assets from DPC was the premature exercise of legal claim under the contract.

On 25 October 2012, CAT has submitted the case no. Black 2757/2555 to the Central Administrative Court to revoke the Arbitral Tribunal’s award. Presently, the said case is pending on the Central Administrative Court process.

5) The reduction of roaming fee between DPC and CAT Telecom Public Company Limited (“CAT”)

Starting from 1 July 2006, CAT Telecom Public Company Limited (“CAT”) allowed Digital Phone Company Limited (“DPC”), a subsidiary, to reduce roaming fee per minute from Baht 2.10 to Baht 1.10 to be in line with the decrease of mobile phone service fee. The approval has been renewed for 3-month period several times thereafter until 31 March 2007. After that, CAT did not notify DPC of any changes until on 24 March 2008, CAT had sent a letter to notify DPC to charge roaming fee at Baht 2.10 per minute starting from 1 April 2007. On 8 May 2008, DPC sent a request letter to CAT to reconsider the roaming fee adjustment. The reason for such request was based on the market environment where the prevailing mobile phone service charge to consumers in the market was significantly lower than the specified roaming fee. Such high roaming fee is therefore unreasonable for DPC to provide the roaming


Financial Report

service to any operators. In the letter, DPC informed CAT that during the period when CAT is reconsidering the request, DPC will charge roaming fee at Baht 1.10 per minute according to the previous agreed terms and conditions. On 31 March 2009, CAT has approved DPC to charge roaming fee at Baht 1.10 per minute during 1 January 2009 - 31 March 2009. Moreover, DPC has entered into the national roaming agreement with the Company to charge roaming fee at Baht 1.10 per minute approved by National Telecommunication Commission (“NTC”) on 16 June 2009.

On 15 July 2010, CAT has submitted a dispute under case no. Black 62/2553 to the Alternative Dispute Resolu-tion Office, the Arbitration Institute, demanding DPC to pay additional payment of revenue sharing of 10th - 12th operation year that DPC reduced roaming fee per minute from Baht 2.10 to Baht 1.10 during 1 April 2007 - 31 December 2008 amounting to Baht 1,636 million plus penalty computing up to March 2010 of Baht 364 million, totaling Baht 2,000 million and penalty at the rate of 1.25 percent per month from April 2010 until the full payment is made by alleging that CAT had approved the said roaming fee reduction up to 31 March 2007 only.

On 12 September 2011, CAT has submitted a dispute to the Alternative Dispute Resolution Office, the Arbitration Institute; case no. Black 89/2554 demanding DPC to make additional payment of revenue sharing of 12th operation year which DPC reduced roaming fee from Baht 2.10 per minute to Baht 1.10 per minute during 1 April 2009 - 15 June 2009 in the amount of Baht 113 million plus penalty at the rate of 1.25% per month from 1 April 2009 until full payment is made.

At present, the said dispute is pending on the Arbitration process. The Company’s management believes that the outcome of the said dispute shall have no material impact on the consolidated financial statements of the Company since DPC has correctly and fully complied with the law and the relating Agreements in all respects.

6) The damage arisen from uncollectible international call service charges between DPC and CAT Telecom Public Company Limited (“CAT”)

On 8 April 2011, CAT Telecom Public Company Limited (“CAT”) submitted a dispute no. Black 32/2554 to the Arbitration Institute and the Dispute Reconciliation Office, Justice Court Office demanding DPC to pay Baht 33 million including interest at the rate of 15% per annum of the claimed amount, total amount of claim Baht 35 million by alleging that DPC has committed a breach of the Digital PCN (Personal Communication Network) 1800 Service Agreement due to subscriber fraud on the Digital PCN 1800 Service Agreement between DPC and subscribers for 1,209 numbers during 1997 - 2003 causing damages to CAT where CAT was unable to collect the international call service charges occurred from the use of such numbers.

On 28 May 2013, the Arbitral Tribunal reached its decision to dismiss such dispute by stating that it is not about breach of the agreement but whether there has been a wrongful act. Therefore, the dispute is not within the Jurisdiction of the Arbitral Tribunal.

On 6 September 2013, CAT has submitted the case no. Black 1767/2556 to the Central Administrative Court to revoke the Arbitral Tribunal’s award. Presently, the said case is pending on the Central Administrative Court process.

7) Revenue sharing on interconnection charge between DPC and CAT Telecom Public Company Limited (“CAT”)

On 24 August 2012, CAT has submitted a dispute under case no. Black 110/2555 to the Alternative Dispute Resolution Office, The Arbitration Institute, demanding DPC to pay additional payment of revenue sharing of 10th - 14th operation year amounting to Baht 183 million and penalty at the rate of 1.25 percent per month of the above principal amount starting from the default date of each year until the full payment is made.

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On 1 April 2014, CAT has submitted a dispute under case no. Black 26/2557 to the Alternative Dispute Resolution Office, The Arbitration Institute, demanding DPC to pay additional payment of revenue sharing of 15th operation year amounting to Baht 141 million and penalty at the rate of 1.25 percent per month of the above principal amount starting from the default date of each year until the full payment is made.

Such amount represents the revenue sharing which CAT calculated on gross interconnection charge received by DPC from other operators at the percentage rate specified in the Agreement without deduction of interconnection charge which DPC has to pay to other operators.

At present, the said dispute is pending on the Arbitration procedures. The Company’s management believes that the outcome of the said dispute shall be settled favourably and has no material impact on the consolidated financial statements of the Company since DPC has correctly and fully complied with the law and the related conditions of the Agreement in all respects.

8) Obligations of the bank guarantees in connection with the Agreements for Operations

According to the Agreement, Digital Phone Company Limited (“DPC”) has the duties to deliver the bank guarantees to CAT Telecom Public Company Limited (“CAT”) to secure the payment of the minimum revenue sharing for each operation year and shall recover the bank guarantee of the operation year back.

CAT did not return the bank guarantees which have secured the payment of the minimum revenue sharing for the operation year 10th - 14th for a total value of Baht 2,606 million by claiming that DPC had not completely paid the revenue sharing due to the deduction of the revenue sharing for the Excise Tax and the deduction of the Interconnection Charges, the discount of Access Charges and the reduction of the rate of roaming charge where the disputes of which have been pending the consideration of the Arbitral Tribunal.

On 8 October 2012, DPC has submitted a dispute to the Office of Dispute Resolution, Arbitration Institute, case no. Black 120/2555 requesting the Arbitral Tribunal to award an order to CAT to return the bank guarantees to DPC because DPC has completely paid the revenue sharing for each operation year and has correctly and fully complied with the law and the relating Agreements in all respects. At present, the above mentioned disputes are in the process of consideration of the Arbitral Tribunal.

AIN Globalcomm Company Limited (“AIN”) The international direct dialling service by using the symbol “+” between AIN and CAT Telecom Public Company Limited (“CAT”)

On 7 March 2008, CAT Telecom Public Company Limited (“CAT”) has submitted the black case no. 1245/2551 to the Civil Court against Advanced Info Service Public Company Limited (“the Company”) as the defendant no. 1 and AIN Globalcomm Company Limited, a subsidiary, as the defendant no. 2 requesting the Company and the subsidiary to pay compensation with interest rate at 7.5% per annum for damage up to the date of case submission equalling


Financial Report

to Baht 130 million. The reason is to change traffic of the international direct dialling service by the Company and the subsidiary during 1-27 March 2007 through the Company subscriber by using the symbol “+” dialling from no. 005 of the subsidiary, instead of no. 001 of CAT without the prior notification to subscriber. On 4 September 2008, CAT submitted a petition revision to adjust compensation for Baht 583 million (including interest) because CAT was damaged consecutively until 7 March 2008.

On 19 November 2008 CAT submitted the request for the order of provisional remedial measure before delivery of judgment to cease the Company and the subsidiary to transfer the traffic 001 or symbol “+” of CAT to traffic 005 of the subsidiary. On 26 February 2009, the Civil Court dismissed the CAT’ request and on 20 March 2009, CAT has appealed the dismissal. On 16 August 2012, the Court of Appeal has issued an order confirming the dismissal order of the Civil Court and CAT has submitted the petition to the Supreme Court on 19 October 2012. On 3 February 2015, the Supreme Court has issued an order confirming the dismissal order of the Appeal Court.

On 17 December 2009, the Civil Court has dismissed the case as the facts cannot be proved that CAT has either an exclusive right to use the symbol “+” or the right to prohibit the Company and AIN to use the symbol “+” and it cannot also been proved that the changing of the connection setting of the international direct dialing service from using the symbol “+” for the code 001 of CAT to “+” for the code 005 of AIN has caused the subscribers who use international direct dialing service to believe that they are using the code 001 of CAT, therefore, the acts of the Company have not infringed any right of CAT and also of AIN which CAT alleged to jointly commit the wrongful act against the Company and have not infringed the right of CAT as well. CAT has appealed to the Court of Appeal on 10 March 2010. Subsequently on 27 June 2013, the Court of Appeal has issued an order confirming the dismissal order of the Civil Court and CAT has submitted the petition to the Supreme Court on 16 September 2013. Presently, the said case is pending on the Supreme Court process.

41 Events After the Reporting Period

Increase in share capital of a subsidiary

On 19 January 2015, Advanced Broadband Network Co., Ltd. (“ABN”), a subsidiary, registered the increase in the share capital from Baht 1 million (10,000 ordinary shares, Baht 100 par value) to Baht 15 million (150,000 ordinary shares, Baht 100 par value) with the Ministry of Commerce. The purpose of the capital increase is for future investment. The Company paid for the increased shares by Baht 100 per share, totalling Baht 14 million and holds 99.99% of the issued share capital.

Dividends

At the Board of Directors’ meeting held on 5 February 2015, the Board passed a resolution proposing to the annual general shareholders’ meeting the payment of dividends for the year 2014, at the rate of Baht 12.00 per share, Baht 6.04 each of which was paid as an interim dividend on 2 September 2014. The proposed dividends shall be approved by the shareholders.

174

42 Thai Financial Reporting Standards (TFRS) not yet Adopted A number of new and revised TFRS have been issued but are not yet effective and have not been applied in preparing these financial statements. Those new and revised TFRS that may be relevant to the Group’s/Company’s operations, which become effective for annual financial periods beginning on or after 1 January in the year indicated, are set out below. The Group/Company does not plan to adopt these TFRS early.

TFRS Topic Year Effective

TAS 1 (revised 2014) Presentation of Financial Statements 2015

TAS 2 (revised 2014) Inventories 2015

TAS 7 (revised 2014) Statement of Cash Flows 2015

TAS 8 (revised 2014) Accounting Policies, Changes in Accounting Estimates 2015 and Errors

TAS 10 (revised 2014) Events after the Reporting Period 2015

TAS 11 (revised 2014) Construction Contracts 2015

TAS 12 (revised 2014) Income Taxes 2015

TAS 16 (revised 2014) Property, Plant and Equipment 2015

TAS 17 (revised 2014) Leases 2015

TAS 18 (revised 2014) Revenue 2015

TAS 19 (revised 2014) Employee Benefits 2015

TAS 21 (revised 2014) The Effects of Changes in Foreign Exchange Rates 2015

TAS 23 (revised 2014) Borrowing Costs 2015

TAS 24 (revised 2014) Related Party Disclosures 2015

TAS 26 (revised 2014) Accounting and Reporting by Retirement Benefit Plans 2015

TAS 27 (revised 2014) Separate Financial Statements 2015

TAS 28 (revised 2014) Investments in Associates and Joint Ventures 2015

TAS 29 (revised 2014) Financial Reporting in Hyperinflationary Economies 2015

TAS 33 (revised 2014) Earnings per Share 2015

TAS 34 (revised 2014) Interim Financial Reporting 2015

TAS 36 (revised 2014) Impairment of Assets 2015


Financial Report


TAS 37 (revised 2014) Provisions, Contingent Liabilities and Contingent Assets 2015

TAS 38 (revised 2014) Intangible Assets 2015

TAS 40 (revised 2014) Investment Property 2015

TFRS 2 (revised 2014) Share-based Payment 2015

TFRS 3 (revised 2014) Business Combinations 2015

TFRS 5 (revised 2014) Non-current Assets Held for Sale and Discontinued 2015 Operations

TFRS 6 (revised 2014) Exploration for and Evaluation of Mineral Resources 2015

TFRS 8 (revised 2014) Operating Segment 2015

TFRS 10 Consolidated Financial Statementy 2015

TFRS 11 Joint Arrangements 2015

TFRS 12 Disclosure of Interests in Other Entities 2015

TFRS 13 Fair Value Measurement 2015

TSIC 15 (revised 2014) Operating Leases - Incentives 2015

TSIC 25 (revised 2014) Income Taxes - Changes in the Tax Status of 2015 an Entity or its Shareholders

TSIC 27 (revised 2014) Evaluating the Substance of Transactions Involving 2015 the Legal Form of a Lease

TSIC 29 (revised 2014) Service Concession Arrangements: Disclosures 2015

TSIC 31 (revised 2014) Revenue - Barter Transactions Involving 2015 Advertising Services

TSIC 32 (revised 2014) Intangible Assets-Web Site Costs 2015

TFRIC 1 (revised 2014) Changes in Existing Decommissioning, Restoration 2015 and Similar Liabilities

TFRIC 4 (revised 2014) Determining whether an Arrangement contains a Lease 2015

TFRIC 5 (revised 2014) Rights to Interests arising from Decommissioning, 2015 Restoration and Environmental Rehabilitation Funds

176

The Group/Company has made a preliminary assessment of the potential initial impact on the consolidated and separate / Company’s financial statements of these new and revised TFRS and expects that there will be no material impact on the financial statements in the period of initial application.

43 Reclassification of Accounts Certain accounts in the statement of income for the year ended 31 December 2013 have been reclassified to conform to the presentation in the 2014 financial statements as follows:

Separate Financial StatementsConsolidated Financial Statements

2013

Before reclass.

Before reclass.

After reclass.

After reclass.Reclass. Reclass.

(in million Baht)

The reclassifications have been made because, in the opinion of management, the new classification is more appropriate to the Group’s business.


TFRIC 10 (revised 2014) Interim Financial Reporting and Impairment 2015

TFRIC 12 (revised 2014) Service Concession Arrangements 2015

TFRIC 13 (revised 2014) Customer Loyalty Programmes 2015

TFRIC 14 (revised 2014) TAS 19 (revised 2014) -The Limit on a Defined 2015 Benefit Asset, Minimum Funding Requirements and their Interaction

TFRIC 17 (revised 2014) Distributions of Non-cash Assets to Owners 2015

TFRIC 18 (revised 2014) Transfers of Assets from Customers 2015


89

TFRS Topic Year

effective

TFRIC 17 (revised 2014) Distributions of Non-cash Assets to Owners 2015

TFRIC 18 (revised 2014) Transfers of Assets from Customers 2015

The Group/Company has made a preliminary assessment of the potential initial impact on the consolidated and separate / Company’s financial statements of these new and revised TFRS and expects that there will be no material impact on the financial statements in the period of initial application.

43 Reclassification of accounts Certain accounts in the statement of income for the year ended 31 December 2013 have been reclassified to conform to the presentation in the 2014 financial statements as follows:

2013 Consolidated


financial statements

Before reclass.

Reclass.

After reclass.

Before reclass.

Reclass.

After reclass.

(in million Baht) Statement of income for the

year ended 31 December

Revenue from rendering of services and equipment rentals

123,788

4,028

127,816

101,353

4,671

106,024 Construction income from the

Agreements for operations

-

3,766

3,766

-

3,640

3,640 Cost of rendering of services

and equipment rentals

(39,108)

(4,028)

(43,136)

(32,773)

(4,671)

(37,444) Construction cost from the

Agreements for operations

-

(3,766)

(3,766)

-

(3,640)

(3,640) - - The reclassifications have been made because, in the opinion of management, the new classification is more appropriate to the Group’s business.


Financial Report

Management Discussion and Analysis

Executive Summary In 2014, AIS succeeded in building up 3G-2.1GHz network in both coverage and capacity. Since May, our 3G network has 97% population coverage and by year-end with 21,300 3G-2.1GHz base stations surpassing our target of 20,000 base stations. With the growing demand for mobile data, we continued to enhance our network capacity especially in the dense areas to uplift customers’ experience by installing small cells as well as Wifi hot spots.

AIS has been gaining the market share since the first quarter and we are keeping our pace by strengthening our network, services and contents. Our service revenue, excluding IC increased 1.2% YoY to Bt117,990mn tracking along with our guidance of 1-2% amid the gloomy economic outlook. Key driver was mobile data which grew 57% YoY supported by increasing in smartphone penetration now reaching 38%. EBITDA stood at Bt66,428mn, an increase of 4.3% YoY from lower regulatory cost despite higher network OPEX and SG&A. Net profit slightly dropped 0.7% YoY to Bt36,033mn, mainly from higher interest expense. Competition outlook in 2015 is expected to be more concentrated in mid-to-low tier segments. Operators will push 3G handsets with lower prices into the market as 900MHz spectrum under Build-Transfer-Operate (BTO) will expire in Sept-15. This will continue to pressure the handset margin near zero, the price per unit for both voice, and data and marketing spending. On the positive side, rising adoption of 3G handsets will generate regulatory cost saving. Continuing with the successful co-brand handset strategy known as AIS Super Combo, we will provide more varieties of quality smartphones with ranges of price.

AIS will strengthen its leading position in the telecom industry in Thailand by moving toward digital life service provider in 2015 with the integration of mobile, fixed broadband and digital content services. To strengthen our network quality, we plan to spend Bt40bn this year for expanding capacity and rolling out fiber optic to support both mobile and fixed broadband businesses. For fixed broadband business, we expect to acquire 80,000 subscribers within one year. We expect the 1800MHz auction to be held in 3Q15, and it is likely to be deployed for 4G to expand the capacity. Revenue growth is expected to increase by 3-4% upon strong network quality and new product offerings. We expect our EBITDA margin to improve by 100-200bps mainly from lower regulatory cost offsetting rising opex from continuing network capacity expansion.

Significant Events : Write-off of deferred tax asset on separate and consolidated financial statements In 4Q14, AIS recorded a one-time deferred tax asset written-off on the separate and consolidated financial statements with an amount of Bt664mn. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realized. Excluding this non-cash term, the FY14 normalized consolidated net profit would be Bt36,697mn.

Operational Summary In 2014, AIS subscribers increased to 44.3mn. With the success of 3G network roll-out, subscribers on 2.1GHz-License continued to increase to 40.8mn, representing 92% of total subscribers exceeding our year-end target of 85%. The achievement of marketing campaigns to upgrade 2G-to-3G as well as 3G device adoption in mid-tier segment resulting in the increment of 3G device on 3G network from 8mn in 2013 to 22mn in 2014. While subscription on 900MHz-BTO declined to 3.5mn.

178

900MHz-BTO1) 24,494,400 16,098,400 8,462,300 5,114,600 3,546,8002.1GHz-License2) 16,366,500 26,264,100 34,415,900 38,680,600 40,754,500Postpaid 4,266,900 4,463,800 4,661,100 4,786,700 4,940,700Prepaid 36,594,000 37,898,700 38,217,100 39,008,500 39,360,600Total subscribers 40,860,900 42,362,500 42,878,200 43,795,200 44,301,300

900MHz-BTO1) -4,159,300 -8,396,000 -7,636,000 -3,347,700 -1,567,8002.1GHz-License2) 5,895,100 9,897,600 8,151,700 4,264,700 2,073,900Postpaid 213,200 196,900 197,300 125,600 154,000Prepaid 1,522,600 1,304,700 318,400 791,400 352,100Total net additions 1,735,800 1,501,600 515,700 917,000 506,100

900MHz-BTO1) 203 191 178 188 2162.1GHz-License2) 297 256 241 221 216Postpaid 658 639 647 625 608Prepaid 191 179 175 169 170Blended 234 225 223 216 216

900MHz-BTO1) 291 255 205 194 2102.1GHz-License2) 342 336 306 284 275Postpaid 429 412 397 387 373Prepaid 294 283 263 255 256Blended 308 297 277 270 269

Both ARPU and MOU were affected by the increase of the second SIM subscription for both additional devices such as tablets and attractive promotional campaigns. In addition, weak macro-economic outlook in 2014 pressured the usage per SIM for both voice and data. Also, we have been providing lower-tier postpaid packages to support mid-to-low tier subscribers which constrained postpaid ARPU. As a result, postpaid ARPU declined 2.8% QoQ and 7.5% YoY to Bt608, while prepaid ARPU increased 1.1% QoQ but lowered 11% YoY to Bt170.

Subscribers 4Q13 1Q14 2Q14 3Q14 4Q14

Net additions

ARPU (Baht/subs/month)

MOU (minute/sub/month)

4Q14 Snapshot In 4Q14, our service revenue, excluding IC, was Bt30,037mn increasing 2.2% QoQ from festive season and 3.5% YoY from the low base in 4Q13 due to political unrest. 3G-2.1GHz network has been continuously enhanced with increasing number of base stations including small cells and Wifi hotspots. A new model of AIS Super Combo with a wider screen launched in October also found a great sale and helped elevate the 3G device penetration on

1) 900MHz-BTO refers to the subscription of customers under 900 & 1800MHz Build-Transfer-Operate contract2) 2.1GHz-License refers to the subscription of customers under 2.1GHz license issued by NBTC. The subscribers who are holding 2G devices have to roam on the 900MHz network.


Financial Report

3G-2.1GHz to 55%, up from 49% in 3Q14. The popular iPhone 6 and iPhone 6 Plus also significantly drove our sales revenue up 101% QoQ and 42% YoY. The effort to migrate customers to 3G and the lower roaming rate in 4Q14 has translated into lower regulatory fee amounting Bt3,856mn dropping 16% QoQ and 30% YoY. However, SG&A rose 9.2% QoQ and 14% YoY mainly from marketing spending. In summary, EBITDA stood at Bt17,727mn growing 7.8% QoQ and 8.7% YoY. In spite of higher D&A and deferred income tax (please see significant events on page 1), net profit rose to Bt9,122mn increasing 1.9% QoQ and 3.5% YoY. Excluding the Bt664mn unusable deferred tax assets, the normalized net profit for 4Q14 would be Bt9,786mn or +9.3% QoQ and 7.6% YoY.

FY14 Financial Summary

Revenue In 2014, AIS total revenue, excluding construction increased 1.3% to Bt148,729mn due to the growth in data consumption and handset sales.

• SIM&devicesales, representing 16% of total revenue, were Bt23,332mn and increased 23% YoY mainly from the popularity of AIS Super Combo. We have sold 2.5mn units since April. According to our zero-handset margin strategy to increase 3G device adoption, our sales margin declined to 0.8% compared to 6.5% in 2013.

• Servicerevenue,excludingIC, tracked along with our guidance which stood at Bt117,990mn and increased 1.2% YoY, underpinned by the accelerating mobile data whereas voice continued to decline. In 2014, AIS had 97% population coverage on 3G-2.1GHz with the densest of 3G base stations in Thailand which support the growing number of subscribers using 3G service. As a result, revenue from 2.1GHz-License represented 78% of service revenue. (See table revenue mix)

- Voice revenue was Bt65,382mn, a decrease of 14% YoY due to the substitution of mobile data in some subscribers’ segments and weak economic sentiment in the first half of the year. - As our 3G network coverage and capacity increased, non-voice revenue growth accelerated 34% YoY to Bt43,495mn. There has been strong market demand for mobile data, more varieties of affordable smartphone and attractive pricing package for both postpaid and prepaid. Mobiledata accounted for 29% of service revenue, excluding IC, compared to 19% in 2013. - International roaming (IR) declined 17% YoY to Bt2,240mn mainly from the impact of martial law resulted in lower tourists and global price pressure. -Internationalcall&otherbusinesses rose 24% YoY to Bt6,872mn underpinned by the growth of Wifi subscription. - Interconnection charges (IC) Both IC revenue and cost declined around 35% due to the change in interconnection rate (from 1Bt/minute to 0.45/minute starting since July 1st, 2013). Net interconnection charge (IC) was Bt641mn, comparing to Bt659mn in 2013.

Cost & Expense• In2014,cost of service excluding IC was Bt53,034mn, dropping 6.6% YoY, primarily from lower regulatory fee despite higher D&A and network opex due to 3G network expansion.

- Regulatory fee was Bt19,427mn decreasing 27% YoY from the effort to attract customers to shift from 2G to 3G, which was subject to lower revenue sharing structure under the license base. This was supported by our success in AIS Super Combo campaign which dramatically helped drive up 3G device penetration. The proportion of regulatory fee to service revenue excluding IC in FY14 stood at 16.5% compared to 22.7% in FY13.

180

- Depreciation&Amortization(D&A) was Bt18,633mn, rising 14% YoY due to our extensive expansion of 3G network including increasing number of base stations and fiber optics. It is important to note that 2G-1800MHz operating right was fully amortized since 3Q13 while the 2G-900MHz with the remaining of Bt8.7bn will be fully amortized by 3Q15 when the concession expires. - Network OPEX grew 10% YoY to Bt8,538mn as we extensively expand 3G-2.1GHz coverage nationwide which has reached 97% of population. Also, we continued to invest in capacity to cope with high data consumption demand. - Other cost of service slightly grew to Bt6,436mn, a rise of 2.2% YoY.

• SG&Aexpense increased to Bt18,860mn or +27% YoY mainly from higher marketing spending to support 3G migration and brand awareness.

- Marketingexpenses grew significantly to Bt6,220mn or a rise of 44% YoY mainly from 3G promotional campaigns to drive 3G handset adoption as well as spending to sustain brand awareness. FY14 marketing expenses represented 4.2% of total revenue in line with guidance. - General admin expenses stood at Bt11,111mn increasing 17% YoY as staff cost grew 15% from higher headcounts. In FY14 loss from write-off of obsolete assets also grew 49% to Bt818mn, up from Bt549mn in FY13. - Depreciation and amortization was Bt289mn or +25% YoY mainly due to shop renovation. - Bad debt rose to Bt1,240mn or +58% YoY since postpaid revenue grew from higher postpaid subscribers. However, FY14 % bad debt to postpaid revenue still remained manageable at 3.6%, up from 2.5% in FY13.

• Investment Income was Bt370mn, a decrease of 33% YoY due to lower interest rate received and lower cash outstanding.

• Financecosts in FY14 were Bt1,527mn increasing 52% YoY primarily from long-term debenture issued in April.

• Netgainfromforeignexchange was Bt189mn up from net loss of Bt233mn in FY13. These are unrealized gain from the USD denominated CAPEX while other foreign debts were fully hedged.

Profit In FY14 EBITDA grew 4.3% to Bt66,428mn, due to lower regulatory fee despite higher network opex and SG&A. This also drove up the consolidated EBITDA margin to 44.7% up 130bps from FY13, and the service EBITDA margin to 52.8% increasing 390bps from FY13. FY14 net profit was Bt36,033mn, a drop of 0.7%. Excluding the Bt664mn write-off of unusable deferred tax assets in 4Q14, normalized net profit would be Bt36,697mn or flattish YoY.

Financial position AIS had total assets of Bt126,351mn, an increase of 13% YoY, mainly from investments in 3G network and cash. Total liabilities increased to Bt79,486mn or +20% YoY as additional long-term debts were issued. Total equity grew slightly to Bt46,865mn. AIS still had healthy financial strength as liquidity remained high with a current ratio of 0.91x. Net debt to equity of 0.39x still showed room for more gearing while the average cost of debt stayed at 4%.

Cash Flow In FY14 AIS generated net operating cash flow of Bt63bn increasing from Bt51bn in FY13. AIS had spent in total Bt33bn for CAPEX in FY2014 against our guidance of Bt40bn. Full year dividend paid was Bt35bn while debt borrowed and repaid were Bt25bn and Bt12bn, respectively. Also, in 4Q14 the second payment of 2.1GHz spectrum license bid of Bt3,656mn was paid to the regulator, NBTC, which left the last payment of the same amount in 4Q15.


Financial Report

Voice revenue 18,212 15,710 15,454 -15% -1.6% 75,969 65,382 -14%

Non-voice revenue 8,563 11,388 12,051 41% 5.8% 32,376 43,495 34%

International Roaming 759 537 650 -14% 21% 2,690 2,240 -17%

Others (IDD, other fee) 1,476 1,746 1,882 28% 7.8% 5,521 6,872 25%

Service revenue, ex. IC 29,010 29,382 30,037 3.5% 2.2% 116,556 117,990 1.2%

IC revenue 1,845 1,765 1,953 5.9% 11% 11,260 7,407 -34%

SIM and handset sales 5,947 4,208 8,454 42% 101% 18,995 23,332 23%

Total revenues ex. construction 36,803 35,355 40,444 9.9% 14% 146,811 148,729 1.3%

Regulatory fee (5,497) (4,589) (3,856) -30% -16% (26,443) (19,427) -27%

Depreciation & Amortization (4,147) (4,819) (5,040) 22% 4.6% (16,309) (18,633) 14%

Network operating expense (1,959) (2,354) (2,227) 14% -5.4% (7,757) (8,538) 10%

Other cost of services (1,607) (1,623) (1,657) 2.1% 3.1% (6,299) (6,436) 2.2%

Cost of service, ex. IC (13,210) (13,385) (12,780) -3.3% -4.5% (56,809) (53,034) -6.6%

IC cost (1,693) (1,602) (1,738) 2.6% 8.4% (10,601) (6,766) -36%

Cost of SIM and handset sales (5,625) (4,291) (8,299) 48% 93% (17,760) (23,148) 30%

Total costs ex. construction (20,528) (19,278) (22,816) 11% 18% (85,170) (82,948) -2.6%

Gross profit 16,275 16,077 17,628 8.3% 9.7% 61,642 65,781 6.7%

SG&A (4,440) (4,643) (5,069) 14% 9.2% (14,876) (18,860) 27%

Marketing Expense (1,420) (1,414) (1,866) 31% 32% (4,331) (6,220) 44%

General administrative & staff cost (2,748) (2,864) (2,782) 1.2% -2.9% (9,526) (11,111) 17%

Bad debt provision (209) (290) (340) 63% 17% (787) (1,240) 58%

Depreciation (63) (75) (81) 28% 8.5% (232) (289) 25%

Operating profit 11,835 11,434 12,560 6.1% 9.8% 46,765 46,920 0.3%

Net foreign exchange gain (loss) (215) 120 (26) -88% -121% (233) 189 -181%

Other income (expense) 115 176 134 17% -24% 708 500 -29%

Finance cost (228) (471) (458) 101% -2.7% (1,002) (1,527) 52%

Income tax (2,707) (2,311) (3,100) 15% 34% (10,008) (10,080) 0.7%

Non-controlling interest 16 7 11 -34% 61% 44 30 -32%

Net profit for the period 8,816 8,955 9,122 3.5% 1.9% 36,274 36,033 -0.7%

Income statement (Bt mn) 4Q13 3Q14 4Q14 %YoY %QoQ 2013 2014 %YoY

Revenue mix (Bt mn) 4Q13 3Q14 4Q14 %YoY %QoQ 2013 2014 %YoY

900MHz-BTO revenue 15,787 3,760 2,787 -82% -26% 89,131 24,238 -73%

2.1GHz-License revenue 11,747 23,875 25,368 116% 6% 21,904 86,879 297%

Total 27,534 27,636 28,155 2.3% 1.9% 111,035 111,118 0.1%

% 2.1GHz-License revenue 43% 86% 90% 20% 78%

182

EBITDA (Bt mn) 4Q13 3Q14 4Q14 %YoY %QoQ 2013 2014 %YoY

Operating Profit 11,835 11,434 12,560 6.1% 9.8% 46,765 46,920 0.3%

Depreciation & amortization 4,211 4,893 5,121 22% 4.7% 16,541 18,922 14%

(Gain) loss on disposals of PPE 323 194 110 -66% -43% 562 865 54%

Management benefit expense (44) (43) (36) -18% -16% (163) (184) 13%

Other financial cost (8) (35) (26) 216% -25% (14) (96) 571%

EBITDA 16,316 16,442 17,727 8.7% 7.8% 63,691 66,428 4.3%

Consolidated EBITDA margin (%) 44.3% 46.5% 43.8% 43.4% 44.7%

Service EBITDA margin (%) 51.8% 53.1% 54.9% 48.9% 52.8%

Service EBITDA margin is derived from service business which excludes handset business.

Service EBITDA margin = (EBITDA – Net sales) / (Total revenue - Sales revenue)

Net profit for the period 8,816 8,955 9,122 3.5% 1.9% 36,274 36,033 -0.7%

Write off deferred tax asset - DPC 282 - - - - 411 - -

Write off deferred tax asset - AIS - - 664 - - - 664 -

Normalized net profit 9,098 8,955 9,792 7.6% 9.3% 36,685 36,697 0.1%

Construction revenue 305 135 18 -94% -87% 3,766 600 -84%

Construction cost (305) (135) (18) -94% -87% (3,766) (600) -84%

Normalized net profit 4Q13 3Q14 4Q14 %YoY %QoQ 2013 2014 %YoY

4Q13 3Q14 4Q14 %YoY %QoQ 2013 2014 %YoYRevenue & cost from construction (Bt mn) : IFRS 12


Financial Report

Financial Position (Bt mn/% to total asset) 4Q13 4Q14

Key Financial Ratio 4Q13 3Q14 4Q14

Cash 15,254 14% 17,967 14%

ST investment 1,577 1.4% 1,542 1.2%

Trade receivable 10,264 9.2% 10,415 8.2%

Inventories 2,865 2.6% 2,519 2%

Others 5,005 4.5% 6,682 5.3%

Current Asset 34,965 31% 39,126 31%

Spectrum license 13,601 12% 12,624 10%

Network and PPE 56,422 50% 69,441 55%

Intangible asset 2,178 1.9% 2,505 2%

Defer tax asset 3,557 3.2% 1,442 1.1%

Others 1,303 1.2% 1,213 1%

Total Assets 112,026 100% 126,351 100%

Trade payable 11,718 11% 11,903 9.4%

ST loan & CP of LT loans 9,303 8.3% 2,572 2%

Accrued R/S expense 3,535 3.2% 5,130 4.1%

Others 17,279 15% 23,301 16%

Current Liabilities 45,491 41% 42,906 34%

Debenture & LT loans 14,866 13% 33,769 27%

Others 5,776 5.2% 2,811 2.2%

Total Liabilities 66,133 59% 79,486 63%

Retained earning 19,729 18% 20,710 16%

Others 26,163 23% 26,155 21%

Total Equity 45,893 41% 46,865 37%

Interest bearing debt to equity 0.53 1.11 0.78

Net debt to equity 0.19 0.69 0.39

Net debt to EBITDA 0.14 0.39 0.26

Current Ratio 0.77 0.86 0.91

Interest Coverage 54 26 29

DSCR 5.1 7.0 13

ROE 88% 85% 93%

184

Debt repayment schedule (Bt mn)

Debenture Loan

Source and use of fund : 2014

Source of Fund (Bt-mn) Use of Fund (Bt-mn)

4Q14 - 5,692

2015 - 2,399

2016 - 3,707

2017 397 1,801

2018 - 6,799

2019 7,789 1,250

2020 - 2,500

2021 1,776 1,250

2022 - -

2023 - -

2024 6,638 -

Operating cash flow 72,174 CAPEX & Fixed assets 32,562

Proceeds from long-term borrowing 21,600 Dividend paid 35,052

Proceeds from short-term borrowing 3,000 Debt repayment 12,406

Interest received & dividend received 383 Income tax paid 9,354

Change in investments 83 Spectrum license payment 3,656

Sales of property 28 Finance cost and others 1,453

Cash increased 2,785

Total 97,268 Total 97,268


Financial Report

AIS aims to be the Digital Life Service Provider AIS has set a clear vision moving forward to transform ourselves from a telecom service provider to becoming the Digital Life Service Provider so as to keep advancing presence in the digital era. That said, we will be enhancing our mobile business to elevate customer experience, commencing a fixed broadband business to bring convergence with better technology to our customers, and progressing in an ecosystem of digital content through partnerships. This will be achieved by making greater our core values namely customers, people, and partners.

CAPEX is set at Bt40bn excluding 4G investment The investment plan for year 2015 is set to expand 3G capacity especially in the dense areas. We aim to install 3G base stations and small cells to reach 29,000 base stations and upgrade typical AIS Wifi to AIS super Wifi at speed of 650 Mbps. With the exponential growth of data consumption, we also extend our fiber optic transmission to support both mobile and fixed broadband businesses. For the first year with CAPEX of Bt1bn, we target 80,000 fixed broadband subscribers under FTTx and VDSL technologies. In addition, we plan to expand and renovate our AIS shops to increase customers’ touch points and support new products. Total estimated CAPEX is Bt40bn in 2015 excluding 4G investment.

Service revenue ex. IC to grow 3-4% with EBITDA margin to increase 100-200bps In 2015, we expect service revenue ex. IC to grow 3-4%. The continuously high data growth and our improving 3G-2.1GHz network will remain key factors to support revenue growth and largely offset voice revenue which is expected to keep declining. Due to our popularity in AIS Super combo last year, we perceive this trend to keep on this year and thus expect handset sales to grow 10% with margin maintained at close to zero. This will also enhance our 3G device penetration to 70% which will ultimately translate into lower regulatory fee. Therefore, we expect our consolidated EBITDA margin to increase by 100-200bps despite higher network opex and SG&A. New promotional campaigns will also be launched to keep our brand awareness to stay competitive in the market especially in mid-to-low segments of customers. However, marketing spending will remain around 4% of total revenue.

FY2015 Management Outlook & Strategy Service revenue, excluding IC • increase3-4%YoY

Handset sales • increase10%withmarginclosetozero • 70%3Gdevicepenetration

Consolidated EBITDA margin • increase100-200bpsYoY

CAPEX • Bt40bn target 29,000 3G BTSs including small cells continue fiber optic rollout renovate and expand shops

Dividend • maintain100%dividendpayout

186

Maintain the dividend policy: 100% dividend payout The company aims to maintain 100% payout ratio and pays dividend twice a year. The payout ratio is based on consolidated earnings and subject to the availability of retained earnings on the separated financial statement. This commitment is supported by strong operating cash flow and a low debt level. The CAPEX and license payment will be funded by internal cash flow and additional borrowings if required. If and when there are any new business opportunities or significant changes that may impact on our future operation and investment, and hence capital structure, the company will promptly discuss any new direction with the investment community.

AIS Investor Relationshttp://investor.ais.co.th; [email protected]; Tel: (66) 2299 5117

Disclaimer Some statements made in this material are forward-looking statements with the relevant assumptions, which are subject to various risks and uncertainties. These include statements with respect to our corporate plans, strategies and beliefs and other statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “anticipate”, “intend”, “estimate”, “continue” “plan” or other similar words. The statements are based on our management’s assumptions and beliefs in light of the information currently available to us. These assumptions involve risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Please note that the company and executives/staff do not control and cannot guarantee the relevance, timeliness, or accuracy of these statements.

Audit Fee and Non-Audit Fee In 2014, the Company had the audit fee and quarterly review fee of total Baht 5.12 million and the audit fee and quarterly review fee of its subsidiaries was Baht 4.34 million.

The Company had a non-audit fee of total Baht 2.52 million.


Financial Report

AdditionalInformation

188

General Information and Other Significant InformationGeneral Information of The CompanyThe Company name : Advanced Info Service Public Company LimitedSymbol for trading : ADVANCRegistered date on the SET : 5 November 1991Market capitalization : Baht 746,246.93 million (as of 30 December 2014)Registered capital : Baht 4,997,459,800Paid-up capital : Baht 2,973,095,330Total shareholders : 45,640 persons (as of 18 August 2014, the latest book closing date for the rights to receive dividend)Free float : 36.22%Type of business : Provide mobile telephone service in the 900MHz and 1800MHz frequency under the digital GSM technology and 2.1GHz frequency under the digital UMTS technologyHead office : 414 Phaholyothin Road, Samsen Nai, Phayathai, Bangkok 10400Registered No. : 0107535000265Website : http://www.ais.co.thTelephone : (66) 2299 6000Facsimile : (66) 2299 5165

American Depositary ReceiptADR ticker symbol : AVIFYExchange : Over The Counter (OTC)Depositary : The Bank of New York MellonADR to ORD share ratio : 1:1ADR CUSIP number : 00753G103


Digital Phone Co.,Ltd. (DPC)

404 Phaholyothin Center Tower, Phaholyothin Road, Samsen Nai, Phayathai, Bangkok Tel : (66) 2299 6000Fax : (66) 2299 5455

Advanced Datanetwork Communications Co.,Ltd. (ADC) (an indirect subsidiary via DPC)

408/157, Phaholyothin Place Tower, 38th Floor, Phaholyothin Road, Samsen Nai, Phayathai, Bangkok Tel : (66) 2270 1900 Fax : (66) 2270 1860Website : www.adc.co.th

Advanced Contact Center Co.,Ltd. (ACC)

414 Phaholyothin Road,Samsen Nai, Phayathai, Bangkok Tel : (66) 2299 6000 Fax : (66) 2299 5959

Advanced MPAY Co.,Ltd. (AMP)

408/60 Phaholyothin Place Tower, 15th Floor, Phaholyothin Road, Samsen Nai, Phayathai, Bangkok Tel : (66) 2687 4808Fax : (66) 2687 4788

Advanced Magic Card Co.,Ltd. (AMC)

414 Phaholyothin Road, Samsen Nai, Phayathai, Bangkok Tel : (66) 2299 6000Fax : (66) 2615 3330

AIN GlobalComm Co.,Ltd. (AIN)

408/127 Phaholyothin Place Tower, 29th Floor, Phaholyothin Road, Samsen Nai, Phayathai, Bangkok Tel : (66) 2299 6000Fax : (66) 2278 7030Website : www.ain.co.th

General Information of Subsidiaries and Affiliates

Subsidiaries Business Registered

Capital(Million Share)

Paid-UpCapital

(Million Share)

Par Value(Baht per Share)

% ofInvestment

Service provider of digital mobile phone network in 1800MHz frequency

Service provider of online data communication service via telephone landlines and optical fiber

Call center service

Service provider of payment business via mobile phone

Distributor of cash card business

International telephone service gateway

365.55 10 3,655.47 98.55

95.75 10 957.52 51.00 1)

27.2 10 272 99.99

30 10 300 99.99

25 10 250 99.99

2 100 100 99.99

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Super Broadband Network Co.,Ltd. (SBN)

408/157 Phaholyothin Place Tower, 38th Floor, Phaholyothin Road, Samsen Nai, Phayathai, Bangkok Tel : (66) 2299 6000Fax : (66) 2619 8777 Website : www.sbn.co.th

Wireless Device Supply Co.,Ltd. (WDS)

404 Phaholyothin Center Tower, Phaholyothin Road, Samsen Nai, Phayathai, Bangkok Tel : (66) 2299 5777Fax : (66) 2299 5200

Advanced Wireless Network Co.,Ltd. (AWN)

408/60 Phaholyothin Place Tower, 15th Floor, Phaholyothin Road, Samsen Nai, Phayathai, Bangkok Tel : (66) 2299 6000 Fax : (66) 2687 4986

Advanced Internet Revolution Co.,Ltd. (AIR) 2)

408/60 Phaholyothin Place Tower, 15th Floor, Phaholyothin Road, Samsen Nai, Phayathai, Bangkok Tel : (66) 2299 6000 Fax : (66) 2299 5200

MIMOTechCo.,Ltd.(MMT)

1291/1 Phaholyothin Road,Samsen Nai, Phayathai, Bangkok Tel : (66) 2299 6000

FaxLiteCo.,Ltd.(FXL)

1291/1 Phaholyothin Road,Samsen Nai, Phayathai, Bangkok Tel : (66) 2299 6000

Subsidiaries Business Registered

Capital(Million Share)

Paid-UpCapital

(Million Share)


% ofInvestment

Network operator for international service and international telecom service operator i.e. international & national internet gateway etc.

Importer and distributor of handsets and accessories

Network operator, telecom service operator, and computer system service provider. AWN received an Internet License Type I, Telecommunication Business License Type III, and 2.1GHz License from the NBTC


Operate IT, and content aggregator businesses

Operate in acquiring and/or lease building, and related facilities for telecommunications business

3 100 300 99.99

0.5 100 50 99.99

13.5 100 1,350 99.99

24 10 240 99.99

0.5 100 50 99.99

0.01 100 1 99.98


Advanced Broadband Network Co.,Ltd. (ABN)

408/60 Phaholyothin Place Tower, 15th Floor, Phaholyothin Road, Samsen Nai, Phayathai, Bangkok

Clearing House for Number Portability Co.,Ltd. (CLH)

598 Q House Ploenchit Building,6th Floor, Ploenchit Road, Lumpini, Pathumwan, BangkokTel : (66) 2646 2523 Fax : (66) 2168 7744

Bridge Mobile Pte. Ltd. (BMB)4)

750 Chai Chee Road, #03-02/03,Technopark @ Chai Chee, Singapore 469000Tel : (65) 6424 6270Fax : (65) 6745 9453

Information Highway Co.,Ltd.6)

52/1 Moo 5 Bang Kruai-Sai Noi Road,Bangsitong, Bang Kruai, Nonthaburi

Subsidiaries Business

Joint Venture Business

RegisteredCapital

(Million Share)

RegisteredCapital

(Million Share)

Paid-UpCapital

(Million Share)

Paid-UpCapital

(Million Share)



% ofInvestment

% ofInvestment


Jointly invested, operate the information system and the centralized database for the mobile number portability service

Jointly invested, provide international roaming service (incorporated in Singapore)

Transmission networkprovider

0.15 100 155) 99.98

0.02 100 2 20.00

9 USD 1 USD 9 Million 10.00

0.5 100 12.5 29.00

Notes :1) The remaining 49% shareholding is non-related person.2) The dissolution of Advanced Internet Revolution Co.,Ltd. (AIR) as approved by the Board of Director Meeting no.7/2014 dated 4 August 2014 is now under liquidation process.3) The dissolution of Mobile Broadband Business Co.,Ltd. (MBB) and Advanced Mobile Broadband Co.,Ltd. (AMB) is now finished.4) Bridge Mobile Pte. Ltd. (BMB) has reduced its registered and paid-up share to 9 million share and 9 million baht respectively (source: Accounting and Corporate Regulatory Authority (ARCA)). In this regards, such reduction did not change the percentage of investment of the Company.5) Registered its share capital additional from 1 million baht to 15 million baht on 19 January 20156) Advanced Broadband Network Co.,Ltd. granted 29% stake in Information Highway Co.,Ltd. since 16 September 2014 from Super Broadband Network Co.,Ltd.

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Other references

Ordinary share registrar Thailand Securities Depository Company Limited The Stock Exchange of Thailand Building, 62, Ratchadapisek Road, Klongtoey, Klongtoey, Bangkok 10110 Tel : (66) 2229 2800 Fax : (66) 2359 1259 Call Center : (66) 2229 2888

Auditor Mr. Charoen Phosamritlert Certified Public Accountant Registration Number 4068 KPMG Phoomchai Audit Limited 195, Empire Tower 48th - 51st Floor, South Sathorn Road, Sathorn, Bangkok 10120 Tel : (66) 2677 2000 Fax : (66) 2677 2222

DigitalLife

Advanced Info Service Public Company LimitedHead office: 414, Intouch Tower, Phaholyothin Rd.Samsen Nai, Phayathai, Bangkok 10400Tel. : (66) 2299 6000Fax. : (66) 2299 5165www.ais.co.th

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