Samart Telcoms Public Company Limited · Annual Report 2008 002 The Thai economy recorded GDP...

Samart Telcoms Public Company Limited

Contents : ë Messages from the Boad of Directors 2 ë Boad of Directors 3

ë Vision & Missions 4 ë Report of the Executive Board 5 ë Report of the Audit Committee 6

ë Report of the Risk Management Committee 8 ë Report of the Corporate Governance Committee 9

ë Report of the Nominating & Governance Committee 10 ë Financial Highlights 11 ë Company’s Information 13

ë Information on Subsidiaries and Affiliated Companies 15 ë Social Activities 17 ë Business Structure 19

ë Nature of Business 21 ë Revenue Structure 24 ë Industry and Competitive Analysis 25

ë Changes during the year 26 ë Project in the Future 33 ë Risk Factors 34 ë Shareholders 37

ë Management 38 ë Corporate Governance 55 ë Board of Directors and Executives 78

ë Connected Transactions 88 ë Financial and Operating Results 98 ë Remuneration of the Auditors 103

ë Responsibility Report of the Board of Directors for Financial Report 105 ë Report of the Independent Auditor 106

ë Financial Statements 109

Annual Report 200801

ENRICH LIFE THROUGH ICT SOLUTIONSENRICH LIFE THROUGH ICT SOLUTI

ENRICH LIFE THROUGH ICT SOLUTIONS

NRICH LIFE THROUGH ICT SOLUTIONSENRICH LIFE THROUGH ICT SOLUTIONS


Enrich Life Through ICT Solutions“

”


The Thai economy recorded GDP growth of 3.6% in 2008, a decrease of 1.3% from 2007 as aconsequence of world economic and financial crisis as well as the countryûs political uncertainty. With regardto the overall IT and telecommunication services business, the aggregate market value reached 6.0 trillionBaht in 2008, contributed by 1.6 trillion Baht from IT and 4.4 trillion Baht from telecommunicationrespectively. Thanks to the dedication of the Executive Board, Management and staff, the Company havesecured new projects with value of 2,198 million Baht, and realized the total revenues of 2,900 million Bahtfrom backlog and new projects, a 24.9% increase from 2007, breaking the highest annual revenues recordedin 2006 by 0.7%. Net profit for the year was 111 million Baht, the same as 2007.

For 2009, Thailand Gross Domestic Products (GDP) is expected to grow in the range of -1.0 and 0.0%reflecting the ongoing impact from world economy and financial turmoil and local political uncertainty,especially in the first half of the year prior to economic stimulus plan of the Government starts makingimpacts. On the ICT sector for 2009, the IT business is expected to experience a slightly contractioncompared with 2008, with the 6.0% growth rate. On the other hand, the telecommunication business will growat least by 4.6% mainly boosted by the rollout of mega projects, as a result of the Government investmentplan to spur the economy, covering major projects of the hi-speed data transmission technology through wiredand mobile base including 3G, WiMax and NGN. The continual market expansion provides the opportunityfor the Company to even further expanding on the Government project businesses. As to the private sectorfront, the Company will carefully grow our share as it is anticipated that private sector will be hardest hit by thecrisis. Despite unfavorable climate ahead, the Company and its subsidiaries are confident that we, with strongsupport of our business partners, and our bankers, will be able to weather the unsettled economy and makea progress for all stakeholders in the year to come.

On behalf of the Companyûs Board of Directors, we extend sincere thank to shareholders, customers,employees, business allies and all parties for supporting Companyûs operations and growth, contributing tothe development of Thai society onwards.

(Mr. Sombut Uthaisang) (Mr. Watchai Vilailuck)

Chairman Executive Chairman

Messages from the Board of Directors



ENRICH LIFE THROUGH ICT SOLUTIONSBoard of Directors

2 3

4 5 6

7 8 9

1. Mr. Sombut Uthaisang■ Chairman■ Chairman of the Corporate Governance Committee

2. General Sumpun Boonyanun■ Independent Director ■ Chairman of the Audit Committee■ Chairman of the Nominating & Compensation Committee■ Corporate Governance Committee Member

3. Miss Rapeepan Luangaramrut■ Independent Director ■ Audit Committee Member■ Corporate Governance Committee Member

4. Mr. Narongchai Satanupong■ Independent Director ■ Audit Committee Member■ Nominating & Compensation Committee Member

5. Mr. Kajornvut Tayanukorn■ Director■ Nominating & Compensation Committee Member

6. Mr. Charoenrath Vilailuck■ Executive Director

7. Mr. Watchai Vilailuck■ Executive Director ■ Executive Chairman

8. Mr. Sirichai Rasameechan■ Executive Director

9. Mr. Pairote Varophas■ Executive Director ■ Executive Vice Chairman■ Corporate Governance Committee Member■ Chairman of the Risk Management Committee

1


Vision :BE THE LEADING ICT SOLUTIONSAND SERVICES PROVEDER THAT ENHANCESCORPORATE AND BUSINESS EFFICIENCY.“ ”

ENRICH LIFE THROUGH ICT SOLUTIO ENRICH LIFE THROUGH ICT

PhilosophyWe aspire to promote a SAMART TELCOMS group of companies as a

renowned and reliable ICT services provider of choice. We are devoted to

pursue and develop innovative solutions with leading edge technologies

to fulfill customers’ requirements with optimal efficiency to the future.

Mission :

• Focus on building lasting value and yielding premium return to

shareholders.

• Develop distinctive products and solutions by focusing on

customers’ benefits.

• Deliver only quality services.

• Strengthen enduring relationships with key business alliances

based on mutual profitable growth and long term prosperity.

• Expand business opportunities to regional markets.

• Drive “SAMART TELCOMS” to be a professional organization and

a center of excellence.



ENRICH LIFE THROUGH ICT SOLUTIONSReport of the Executive Board

Dear Shareholders,

In 2008, the Samart Telecom Group achieved another satisfactory business operations with gross revenuesof 2,900 million Baht, a 33% increase from previous year. Net profit was 111 million Baht, close to the 2007performance. Major revenues came from the full-fledged communication installation services provided forGovernment Agencies and State Enterprises including the Ministry of Interior, the Ministry of Defense, the Ministryof Justice, the Provincial Electricity Authority and TOT (Public) Co., Ltd.

Despite world recession and unfavorable domestic conditions, the Samart Telecom Group sets its businesstheme for 2009 as çYear of Risk & Opportunity Managementé, driven by the key strategies emphasizing operationalrisk management, and project management, along with cash flow management, cost and expense control, efficientinventory management, close monitoring of business operations, and at the same time, searching for emergingbusiness opportunities. With the focus on bidding for Government mega projects, the Group expects a businessgrowth of over 100%, fueled by new projects such as 3G mobile phone and Broadband network expansion,business extension from existing projects including Automatic Meter Reading (AMR) and Internet-based learningsystem (Cyber University) as well as ongoing income from Contracts related to ICT management service,equipment maintenance and Outsourcing service. In addition, we have prepared to offer innovative services suchas Digital TV and high-speed wireless communication using WiMAX, Intelligent Transportation System andGeographic Information System (GIS) in order to develop business opportunities.

In terms of business operations, the Company continues to observe and comply with the CorporateGovernance pertaining to benefits of shareholders and stakeholders on appropriate and fair basis, as evidencedby the Company being rated çExcellenté Corporate Governance in 2008, up from çOutstandingé rating a yearearlier, from Thai Institute of Directors in cooperation with the Stock Exchange of Thailand and the Securities andExchange Commission. On another front, the Company also aims at enhancing service capabilities, qualitydevelopment and operational efficiency improvement. In 2008, the Company has been certified with CMMI Level3 for software development and project management. On this quality development path, the Company also hasbeen granting scholarships to employees to pursue Master Degreeûs for the past 5 years, in addition to internalactivities to reinforce and develop effective teamwork. To help boosting morale and relieving our employees fromeconomic hardships, the Company has provided financial aids for low income employees as well.

Moreover, the Samart Telecom Group continually participate and carry out projects and activities beneficialto Thai society, focusing on education support, profession skills development, social contribution and environmentconservation. This includes such activities as donating computer and scholarships to support the underprivilegedstudents from the schools in remote areas, , giving out free international calling card (SAMART WIP) to thestranded passengers in airport closure incident, and financial support for the 36th National University Sports. TheCompany, in conjunction with the Samart Group, organize social benefit activities including the SAMARTInnovation Awards, the project that promotes software development in Thailand and the project D-Club, thesegregation of employees to do social and environment activities.

With the strength of Samart Telecom Group, coupled with its financial capacity, well experienced humanresources, high service quality records, and reputable business partners, the Executive Board is confident tocarry the Company through the economic crisis and achieve continual growth, generate good returns to customers,shareholders, employees and community onwards.

(Mr. Watchai Vilailuck)Executive Chairman


Dear Shareholders,

The Audit Committee of Samart Telcoms Public Company Limited comprises of three independentDirectors. The year ended 2008, namely General Sumpun Boonyanun, Chairman of the Audit Committee,Mr.Narongchai Satanupong and Miss.Rapeepan Luangaramrut, committee members. The scope, duty andprimary responsibilities of the Committee are to review the Companyûs financial reporting process to ensurethat it is accurate and adequate, to review the Companyûs internal control system and internal audit systemto ensure that they are suitable and efficient. In addition, the Committee will direct the Company to have sufficientand efficient internal control to oversee that the company acts in accordance with the related law and regulation.

In the year 2008, the Audit Committee replaced of two independent Directors namely Mr. PradangPrichayangkun and Mr.Aran Promrata to replaced directors retiring by rotation and resignation, and approvalin the Annual General of Meeting Shareholders Independent Director and Audit committee members namelyGeneral Sumpun Boonyanun and Miss.Rapeepan Luangaramrut.

The Audit Committee fulfilled the responsibility according to the scope, duties and responsibilitiesassigned by the Board of directors that complied with the Regulation of the Stock Exchange of Thailand. Therewere 8 Audit Committee meetings in the year 2008. Each Audit Committee attended every meeting fortwo new independent committee members have completely attended for the rest 5 meetings with managementexecutives, external auditors and internal auditors when appropriate, pertaining to the following issues:1. Review the interim and annual financial statements of 2008, by questioning and listening to the

management and the external auditorûs clarifications, concerning the correctness and completeness of thefinancial statements and the adequacy of information disclosure. The Audit Committee agreed with theexternal auditors that the financial statements were correct adhering to the general accepted accountingprinciples.

2. Review the operation information and the internal control system, to evaluate the sufficiency, appropriate-ness and effectiveness of the internal control system to reach the specified objective, by considering theinternal audit report for year 2008 according to the approved inter audit plan that covered importantworking systems of the Company and found no weakness or significant deficiency, appropriate assetsafeguarding, correct, complete and reliable information disclosure. In addition, the Audit Committeeevaluated the internal control system complying with the Practice of the Securities and ExchangeCommission. The Audit Committee had opinion that the Company had good internal control system andthe system to monitor the operation of its subsidiaries that was adequate, appropriate and efficient.Also, the Company realized the importance of the internal control in information technology system,hence engaged the external advisors to audit, follow up, and give recommendation annually.

3. Review the internal audit, by considering the mission, scope of work, duties and responsibilities,independency, manpower and budget of the Internal Audit Division, reviewed and approved theamendment of the Internal Audit Charter to be appropriate, up to date and comply with the internalaudit practice manual of the Stock Exchange of Thailand, and approved the 2009ûs audit plans thatlinked on the internal control evaluation basis and covering crucial working systems of the Company. TheAudit Committee had opinion that the Company had the internal control that was adequate, appropriateand effective, and had developed the audit quality in personnel training and audit work on par withinternational standard for the Professional Practice of Internal Auditors.

4. Review the Audit Committee Charter annually about the qualification and the scope of duties,responsibilities, meeting and audit committeeûs report to comply with the Principles of Good CorporateGovernance and Regulation of the Stock Exchange of Thailand.

Report of the Audit Committee




5. Review and give opinion to connected transactions according to the regulations of the Exchange, or atransaction between the Company or its subsidiary, and its director, management member or relatedperson according to the law on securities and exchange. The Audit Committee concurrences beforeproposing to the Board of Directorsû Meeting approval.

6. Examined and monitored risk management undertaken by company and subsidiaries follow riskmanagement committee delegated each concerning management to perform their control risk assessmentwith risk mitigation and prevention in order to ensure that all guidelines and measures regarding suchrisk management were seriously and eventually implemented as planned.

7. Establish a self - assessment for Audit Committee member and the Audit Committee annually tocomply with Best Practice Guideline for Audit Committee. The evaluation result revealed that theAudit Committeeûs performance completely fulfilled according to its Charter and complied with the goodprinciples, enhancing the good corporate governance effectively.

8. Conduct the Report of the Audit Committeeûs Activities to the Board of Directors for acknowledgementfor every Audit Committee meetings to comply with Best Practice Guideline for Audit Committee.

9. Consider Appointing the External Auditors and their Remuneration for the year 2008 to propose to theBoard of Directors to ask for the approval of Annual Shareholderûs Meeting for the year 2008, which theAudit Committee considered the performance, independency and remuneration and concluded to proposeappointing Mrs.Saifon Inkaew, Certified Public Accountant Registration number 4434, Ms.Rattana Jala,Certified Public Accountant Registration number 3734 or Mr.Wichart Lokatekrawee, Certified PublicAccountant Registration number 4451 of Ernst & Young office Limited to serve as the Companyûsexternal auditor for the year 2008, with the remuneration of 1,580,000 Baht. The Audit committee has theopinions regarding the external auditors as follows:- Based on past performance, the external auditors performed their duties with knowledge,

professional competency, and gave recommendation regarding internal control system and variousrisks, and also had independency in performing their duties.

- The proposed remuneration was appropriate, increasing form Baht 1,430,000 to Baht 1,580,000,or 10.5% higher from last year due to the increase work and accounting transaction of theCompany, and also in the year 2007, the external auditors did not increase the remuneration.

- There was compliance with Regulation of the Office of the Securities and Exchange Commission(SEC) with regards to the changing of the financial statements signatory external auditor every5 years. If such auditors are appointed to be the external auditors for the year 2008, it shall be3 consecutive years.

- The external auditors had no relation with the Company and subsidiaries.

In summary, the Audit Committee had fulfilled the responsibility of the Audit Committee Charter that wasapproved by the Board of Directors and found that the Company disclosed financial and operation informationcorrectly, had appropriate and effectiveness internal control and audit, and risk management, complied with laws,regulations and obligations, disclosed the connected transactions correctly, performed duties in compliance withthe Good Corporate Governance principles, with adequacy, transparency and reliably, and also developed theoperation systems yo be more qualified and fit with the changing business environment on a continuing basis.

(General Sumpun Boonyanun)Chairman of the Audit Committee


Report of the Risk Management Committee

Dear Shareholders

The Company realizes the importance of Risk Management for the Company in carrying out its business

operations; thus, a comprehensive Risk Management Policy for the Company as well as its subsidiaries has

been launched with the objective to mitigate any risks affecting the on going business operations. In addition,

the Company has appointed appropriate individuals to be the members of the Risk Management Committee,

including Companyûs Directors, all concerned management of each department, as well as Internal Audit

Department, to continuously monitor and valuate relating risks as set out in the Risk Management Plan, as well

as setting up appropriate preventive and corrective measures.

During 2008, the Risk Management Committee held 5 meetings, with full attendance each time, which

are summarized below:

ë Risk Management Plan for 2008

The Risk Management Committee held the meeting with respective department to prepare the

Risk Management Plan in 2008 set by the Risk Management Committee. The Committee also delegated

the Internal Audit Department to coordinator for these meetings and propose risk mitigation plan for

the Committeeûs review and approval.

ë Risk Assessment

The Risk Management Committee held the risk assessment schedule with all concerned

subsidiaries. The session highlighted effect of internal and external risk factors on respective businesses.

Accordingly, a risk mitigation plan with built in countermeasures were suggested. The aim of risk

assessment was to help group subsidiaries achieve their business goals respectively.

ë Following up Risk Management Mitigation and Prevention

Risk Management Committee arranged meeting with concerned departments on a quarterly basis

to monitor the business performance and risk of all subsidiaries. Internal audit was assigned to follow

up to ensure compliance to recommendations of the Committee.

With Policy and all the activities carried out as outlined above, the Risk Management Committee are

satisfied that the Corporate Risk-Management operations have been carried out efficiently and effectively, in

line with the good Corporate Governance Principle, sufficient internal controls, including compliance with the

law and regulations concerning Companyûs business.

(Mr. Pairote Varophas)

Chairman of the Risk Management Committee



ENRICH LIFE THROUGH ICT SOLUTIONSReport of the Corporate Governance Committee

Dear Shareholders,

The Company realizes the importance of corporate governance and is confident that good corporategovernance plays a vital role in business operations resulting in efficient and effective management, sustainablegrowth and fair treatment among related parties. The Board of Directors has established the CorporateGovernance policy and Business Ethics in a legible form since 2005, followed by a review and amendment inconformity to the Principles of Good Corporate Governance for Listed Companies in 2006 by Corporate GovernanceCenter, the Stock Exchange of Thailand. For continual development of Good Corporate Governance, the Companyconsidered and appointed the Corporate Governance Committee through the recruiting process by the Nominating& Compensation Committee selecting 4 members from the Board of Directors comprise of Mr. Sombut Uthaisangas a Chairman of the Committee, General Sumpun Boonyanun, Miss Rapeepan Luangaramrut, and Mr. PairoteVarophas are as Committeeûs member, responsible for monitoring and controlling the Companyûs operations incompliance with the Principles of Good Corporate Governance pertaining to Companyûs policies and applicablelaws.

In 2008, the Corporate Governance Committee conducted 3 meetings, all members participated 2 meetings,because they have been appointed as the Corporate Governance Committeeûs member after conducted a meetingto consider the following issues;- Reviewed and revised the Companyûs Corporate Governance Policy and Business Ethics in order to be more

appropriate and to comply with the Principle of Corporate Governance 2006 and Corporate GovernanceSelf-Assessment of the Stock Exchange of Thailand (SET). The handbook serves as a guideline forDirectors, managerial team and employee to continue his/her duty;

- Reviewed the summary of Securities and Exchange Act (No.4) B.E. 2551 and new regulations concerningthe independent directors and the Audit Committee, and recommended for improvement of all regulationsof the Company such as, Corporate Governance Policy, Business Ethics, Committeesû Charter, and othersto comply with the new regulations of SET/SEC;

- Considered the criteria for propose agenda of the Shareholdersû Meeting to treat the shareholdersû rightsand equitable treatment to the shareholders under the good corporate governance as well as to complywith the new Securities and Exchange Act (No. 4) B.E. 2551.

- Reviewed the Self Assessment Form for Board members to review and evaluate their performance for 2008.

In addition, last year the Securities and Exchange Commission (SEC), in conjunction with Thai InvestorsAssociation and Listed Companies Association, organized the 3rd quality assessment for Annual General Meetingto encourage the listed Companies to place importance in organizing the Meeting in view of shareholdersû rightin compliance with the Principles of Good Corporate Governance. The Company was assessed and rankedçExcellent.é According to the survey result of the Corporate Governance for Listed Companies in 2008 by ThaiInstitute of Directors supported by the Stock Exchange of Thailand and the Securities and Exchange Commission,the Company was placed in the first class with the çExcellenté rank.

The Corporate Governance Committee considers and stipulates that the Company places importance andoperate legitimate and transparent businesses in compliance with the Principles of Good Corporate Governancewhich promote sustainable business growth.

(Mr. Sombut Uthaisang)Chairman of the Corporate Governance Committee


Report of the Nominating & Compensation Committee

Dear Shareholders,

The Company realizes the importance of recruiting, selecting, and nominating candidates to assumethe positions and remuneration packages of Board of Directors and top Executives. Consequently, the Boardof Directors appointed the Nominating & Compensation Committee from the members of the Board ofDirectors comprise of 3 members, namely, General Sumpun Boonyanun (Independent Director) as the Chairmanof the Nominating & Compensation Committee, Mr.Narongchai Satanupong (Independent Director), andMr.Kajornvut Tayanukorn (Non-Executive Director) as the Nominating & Compensation Committeeûs member tobe responsible for recruiting and nominating candidates that are highly knowledgeable in their fields and whoalso must meet high qualifications set appropriately for the Board position and executive levels and proposingcompensation policies and guidelines for remuneration packages for the Board of Directors, the Committeesûmembers, and top Executives in commensurate with roles and responsibilities and in tandem with Companyûsoperating results and market conditions in order to motivate and conserve the Board Members and qualityExecutives as required by the Company.

In 2008, the Nominating & Compensation Committee conducted 2 meetings, Mr.Narongchai Satanupongparticipated 2 meetings, General Sumpun Boonyanun and Mr.Kajornvut Tayanukorn participate a meeting,because they have been appointed as the Nominating & Compensation Committeeûs member after conducteda meeting to consider the following issues;- Considered, nominated and proposed personnel to assume the Board in replacement of Directors

retiring by rotation and new director and considered compensation for Directors and Committeesûmember for approval of the Board of Directorsû Meeting prior to the approval of ShareholdersûMeeting.

- Considered, nominated and proposed personnel to assume the Committeesû member propose to theBoard of Directors for further approval.

- Considered the terms and condition of warrants offering to the Companyûs Directors and the Employeesof the Company and its subsidiaries to propose the Board of Directors and shareholders to consider andapprove.

- Considered the 2009 annual salary increase and 2008 bonuses relevant to Companyûs operating resultsand in line with industry standard.

The Nominating & Compensation Committee reported results from every meeting to the Board of Direc-tors on regular basis. In 2008, the Nominating & Compensation Committee completely and carefully fulfilled allassignments with ful l capabil i t ies, independence and expressed direct opinion for highestmutual benefits to shareholders and all stakeholders. In addition, the Committee has strong intent to seekequitable treatment, fairness, and transparency for all concerned and to ensure the strictest adherenceto good corporate governance, according to the Stock Exchange of Thailand, and be internationallyrecognized.

(General Sumpun Boonyanun)Chairman of the Nominating & Compensation Committee




Operating Results (Baht Million) 2006 2007 2008

Total revenues 2,880 2,178 2,900

Gross profit margin 730 558 632

Net profit 331 112 111

Financial Status (Baht Million)

Total assets 3,384 3,235 3,556

Total liabilities 2,028 1,961 2,200

Shareholdersû equity 1,356 1,274 1,356

Financial Ratio

Profit ratio (%) 11.50 5.14 3.83

Return on equity (%) 25.93 8.51 8.43

Return on asset (%) 8.95 3.38 3.27

Debt to Equity (Time) 1.50 1.54 1.62

Earning per Share (Baht) 0.55 0.19 0.18

Dividen per share (Baht) 0.32 0.10 -

Dividen per share ratio* (%) 60.99 56.43 -

Net book value per share (Baht) 2.26 2.12 2.26

Par value per share (Baht) 1 1 1

No. Of Shares (Million Share) 600 600 600

* % of consolidated net profit after deduction of all reserves as stated in the Companyûs Articles of

Association and related laws.

Financial Highlights


Total Revenue

3,0002,5002,0001,5001,000500

0

(MB)2,880

2,178

2,900

2006 2007 2008 Year

Gross Profit

800700600500400300200100

0

(MB)730

558

632

2006 2007 2008 Year

Net Profit

350300250200150100500

(MB)331

112 111

2006 2007 2008 Year

Total Assets

4,000

3,000

2,000

1,000

0

(MB)3,384 3,235

3,556

2006 2007 2008 Year

In 2008, total revenue was Baht 2,900 million

increased by Baht 722 million or 33.1%

comparing to revenue of 2007. The increase

in revenue mainly from the increase of project

sales and from the revenue of a subsidiary

which the Company acquired the shares on

September 28, 2007.

In 2008, gross profit was Baht 632 million

increased by Baht 74 million or 13.2%

comparing to gross profit 2007, resulting

from increase of total revenue.

In 2008, net profit was Baht 111 million,

being close to net profit of 2007, due to

the increase in selling and administrative

expenses.

Total assets as of December 31, 2008 Baht

3,556 million increased by Baht 321 million,

mainly from the increase of account

receivables and equipments for new projects.




Samart Telcoms (Public) Co., Ltd. (çThe Companyé or çSAMTELé)

Nature of Business : 1. Operate telecommunications, communication network and information

technology business providing services on a broad spectrum of

networks. The services include rental of satellite-based, high-speed

iPSAR and VSAT communication system / high-speed multimedia

network communication / Digital Broadcasting for businesses to

conduct teleconference and broadcast intra-corporate TV program and

staff training / Internet network uplink and online news and information

service network management system design, installation and mainte-

nance consulting service.

2. Operate IT and communication system design and installation contract

/ Distribute, maintain and repair communication equipment and

computer for State Agencies.

3. Operate Applied Software service to enhance capabilities and efficiencies

for business enterprises in order to reduce costs, increase competitive-ness and provide satisfaction for customers and service users such as

EDI Gateway, Electronic Learning and E-Payment Solution.

4. Operate fully-integrated ICT outsourcing service to eliminate complexity

and reduce costs related to IT and communication technologies for

business organizations.

5. Operate ICT service through the Internet Protocol (IP) Network which

helps increase efficiency, convenience, security and reduce cost for

international communication.

Head Office : 99/7 Moo 4, Software Park 29th fl., Chaengwattana Road, Klong Gluar,

Pak-kred, Nonthaburi 11120

Registration No. : 0107538000631

Web site : http://www.samtel.com

Telephone : 0-2502-6610

Fax : 0-2502-6605

Registered Capital : Baht 738,000,000

Number of shares sold : 600,000,000 Ordinary shares

Par Value : Baht 1 per share

Companyûs Information


Other References

Registrar : Thailand Securities Depository Co., Ltd.

Capital Market Academy Building 2nd Floor,

2/7 Moo 4 (North Park Project) Vibhavadi-Rangsit Rd.

Thung Song Hong, Laksi, Bangkok 10210

Telephone : 0-2596-9309

Fax. : 0-2832-4994-5

Auditor : Mrs. Saifon Inkaew

The Certified Public Accountantûs License No. 4434

Ernst & Young Office Limited

33rd Floor, Lake Rajada Office Complex

193/136-137 Rajadapisek Road, Klongtoey, Bangkok 10110

Tel. 02-264-0777Fax. 02-264-0789-90




Shares held

Company Nature of Business

RegisteredNo. of by the Company

Capitalshares No. of

(Million Baht)shares

%

1. Samart Communication Services Communication network, 500 5,000,000 4,999,994 99.99

Co., Ltd. telecommunications and (Ordinary Share)

36/82-35 Ngamwongwan Rd,. information technology service

Ladyao, Jatuchak, Bangkok 10900 including procurement, operations,

Tel. 0-2597-0100-4 maintenance and repair of telecom

Fax: 0-2589-3066 equipment.

2. Samart Broadband Services Co.,Ltd. Data service on local high-speed 221 22,100,000 22,099,993 99.99

99/7 Moo 4, Software Park, network (Ordinary Share)

29th Fl., Chaengwattana Rd.,

Klong Gluar, Pak-kred,

Nonthaburi 11120

Tel. 0-2502-6610

Fax. 0-2502-6605

3. Samart Comtech Co.,Ltd Design and Installation of 225 2,250,000 2,249,995 99.99

99/5 Moo 4,Software Park, 31st Fl., Telecommunication network (Ordinary Share)

Chaengwattana Rd., Klong Gluar,

Pak-kred, Nonthaburi 11120

Tel. 0-2502-6600

Fax. 0-2502-6759

4. Posnet Co., Ltd. Fully-integrated consultancy and 72 7,200,000 7,199,993 99.99

222 Thansetthakit Building, 12th Fl., installation service for Electronic (Ordinary Share)

Moo 9, Vipavadee-Rangsit Rd., Payment network

Ladyao, Jatuchak, Bangkok 10900

Tel. 0-2930-2990

Fax. 0-2930-2709

5. Thai Trade Net Co., Ltd. Electronic Data Interchange (EDI) 53 5,300,000 5,299,993 99.99

36/82-35 Ngamwongwan Rd,. and total value added services (Ordinary Share)

Ladyao, Jatuchak Bangkok 10900

Tel. 0-2502-6610

Fax. 0-2502-6764

Information on Subsidiaries and Affiliated Companies


Shares held

Company Nature of Business

RegisteredNo. of by the Company

Capitalshares No. of

(Million Baht)shares

%

6. Oasis Consulting Co.,Ltd. Software Consulting, Programming, 10 100,000 70,000 70.00

278 Liberty Square Building, 20th Fl., Installation and implementation of (Ordinary Share)

Room 2005, Silom Rd., Bangrak, SAP and any other computer

Bangkok 10500 Systems

Tel. 0-2631-1988

Fax. 0-2631-1954

7. Smarterware Co.,Ltd. All Information Technologies (IT) 10 100,000 99,993 99.99

99/5 Moo 4, Software Park, 31st Fl., related services and consultant. (Ordinary Share)

Chaengwattana Rd., Klong Gluar, All telecommunication hardware,

Pak-kred, Nonthaburi 11120 software and consultant.

Tel. 0-2502-6295

Fax. 0-2502-6600

8. Samart Telecommunication To operate businesses Voice over 30,000 1,000 1,000 100

(Cambodia) Co., Ltd. Internet Protocol (VoIP) and fully - (USD) (Ordinary Share)

CATS Building, Opposite Phanom integrated ICT outsourcing service.

Phen International Airport,

Russian Federation Blvd.,

Sangkat Kakab, Khan Dangkor,

Phanom Phen, Kingdom of Cambodia

Tel. 0-2502-6610

Fax. 0-2502-6605

9. Samart Infonet Co.,Ltd. Internet Service 62 6,200,000 6,173,194 99.57

99/6 Moo 4, Software Park, (Ordinary Share)

30st Fl., Chaengwattana Rd.,

Klong Gluar, Pak-kred,

Nonthaburi 11120

Tel. 0-2502-8458

Fax. 0-2502-8465



ENRICH LIFE THROUGH ICT SOLUTIONSSocial Activities

SAMART....Building the Thai Society 2008Following the companyûs entrepreneurial principle: çgood management of the corporation, sound

responsibility for customers and shareholders and genuine support to the society,é Samart Group notonly is committed to stabilizing its businesses, but it also puts emphasis on creating useful activities thatpromote education, develop career skills and assist the underprivileged or survivors from disasters.1. For Education, Sport and Career Development

Because education is regarded as a foundation for society, we are committed to handingeducational opportunities for Thai youths.ë Interactive e-Learning. çSamart Telcoms Groupé has signed a memorandum of

understanding with Office of the Permanent Secretary and Office of the Basic EducationCommission to push ahead the project aimed to enhance educational quality throughcommunication technology. This collaboration is hoped to develop the existing e-Learninginto interactive e-Learning or I-Learning. A mockup model is created to test the efficiencyof the system with model instructors conducting distance learning via television and livetelecast from 3 schools selected as a prototype including Horwang School, BodindechaSchool and Suankularb Wittayalai School.

ë Field trips. çSamart Telcoms Groupé has keen personnel available to provide educationaland instructional services on such information technologies as e-Learning, ISO27001 andData Centerûs security. The company also welcomes visitors to the Data Center, for instance,students and faculty members from the Department of Telecommunication and ComputerEngineering at the School of Engineering, Dhurakij Pundit University.

ë Scholarships for students in remote areas. çSamart Telcoms Groupé takes part in theproject initiated by the Provincial Electricity Authority (PEA) by donating computers andgranting 20,000 baht of scholarship to needy students in remote areas.

ë Financial support for the construction of buildings. çSamart Telcoms Groupé donated400,000 baht to remote schools for the construction of buildings through Office of the BasicEducation Commission, who will hand it the Volunteer for Rural Development Camp ofKasetsart University to construct buildings at Ban Noen Yang School in Nongkai Province.


ë Co-operation for the Translation of çA Brief History of Communicationsé to celebrate

the 30th anniversary of IEEE Thailand Section. Free 6,000 copies of this translated version

will be delivered to school and university libraries throughout Thailand and to members of

IEEE Communications Society. The e-book will also be made to publicize the roles of IEEE

Communications Society among students and general public.

ë Support on the International Conference, çLanguage in a global culture: Bride or

Barrier. çSamart Telcoms Groupé granted 100,000 baht to Ramkhamhaeng University to

sponsor the international conference on çLanguage in a global culture: Bride or Barrieré.

ë Sponsorship for the 36th Thailand University Games. çSamart Telcoms Groupé granted

500,000 baht to sponsor the 36th Thailand University Games held at Ramkhamhaeng Univer-

sity with 126 educational institutions to participate and 27 kinds of sports to compete.

2. For Development and Social ImprovementThere are a great deal of activities that are aimed to improve the quality of lives of the

underprivileged and survivors from disasters.

ë Samart Telcoms Group offered Samart WIP, the international calling card, worth a total of150,000 baht to tourists and travelers stuck in the Suvarnabhumi Airport to stay connected

with their families or to arrange the flights to their destinations.

Our Pride in the year 2008International Standard of Software Development (CMMM Maturity) Level 3

Samart Telcoms Group has been certified Capability Maturity Model Integration Level 3 by CyberQ

Consulting (the company that was appointed by the Software Engineering Institute (SEI) at Carnegie

Mellon University, USA - the endorser of CMMI). So far, 5 companies in the group are CMMI certified,

namely Samart Corporation Public Company Limited, Samart Telcoms Public Company Limited, Samart

Comtech Company Limited, One to One Contacts Company Limited and Smarterware Company Limited.



ENRICH LIFE THROUGH ICT SOLUTIONSBusiness Structure

Remark : Registered Capital of Samart Telcoms PCL. is Baht 738 Million and Paid-up Capital is Baht 600 Million.

Samart Telcoms Public Company Limited

Network ServicesBusiness Group

System IntegrationBusiness Group

Innovation BusinessApplication Solutions& Services Business

Group

ICT OutsourcingServices

Business GroupIP Business Group

Samart Comtech

Co., Ltd. (99.99%)

Samart Telcoms

PCL.

Samart Telcoms

PCL.

Samart Infonet

Co., Ltd. (99.57%)

Thai Trade NetCo., Ltd.

(99.99%)

Posnet Co., Ltd.

(99.99%)

Oasis ConsultingCo., Ltd.

(70%)

SmarterwareCo., Ltd.

(99.99%)

Samart Telcoms

PCL.

SamartCommunication

Services Co., Ltd.(99.99%)

SamartBroadband

Services Co., Ltd.(99.99%)

SamartTelecommunication(Cambodia) Co., Ltd.

(100%)




The Company aims at being the fully-integrated ICT service provider well recognized inknowledge, expertise and credibility by enterprise and individual customers, utilizing network synergyof the Samart Group and technology partners as well as establishing joint ventures with businesspartners to create value added to services enabling customers to increase convenience, speed andreduce operating costs.

Business operations of the Company and its Subsidiaries can be categorized into 5 groupsas follows:1. Network Services Business Group

Operate telecommunications, communication network and information technologyservice on a wide range of network including:- Rental of the high-speed, satellite-based communication network iPSTAR and VSAT- High-speed multimedia communication networks including Leased Line, Frame Relay,

ATM and wireless communication service- Telecommunication network system installation and maintenance service- Telecommunication installation service contract- Telecom and related electronic equipment repair certified by the ISO9000-2000 standard

2. System Integration Business GroupOperate IT and communication system design and installation service contract.

Distribute, repair and maintain communication equipment and computer system as well as aftersales service for Government Agencies.

3. Business Application Solutions & Services Business GroupOperate Application Software capable of enhancing operating capacities and efficiencies

for business enterprise in order to reduce costs, increase competitiveness and createsatisfaction for customers and service users, such as Electronic Learning, Application Softwarefor Electronic Data Interchange - EDI, Workflow Management, Electronic Payment Solution andSmart Card.

4. Outsourcing Services Business GroupOperate fully-integrated ICT outsourcing service enabling business enterprises to

eliminate complexity, reduce ICT technology costs and increase efficiency throughoutbusiness chain with speed and cost effectiveness, such as ICT Service Outsourcing, ERPSystem Outsourcing, ICT Maintenance Outsourcing and Computer and Operation CenterOutsourcing.

5. IP Business GroupOperate ICT service on the Internet Protocol (IP) Network which helps, especially

international communication, increase efficiency, convenience, speed and security at relativelylower cost for data, image and voice communication, such as Internet service, Voice overInternet Protocol (VoIP), International Call Card and news and entertainment contents throughVoIP.

Nature of Business


Table of Business Operations of the Company and its Subsidiaries as of December 31,

2008

Business Group Company Business

1. Network Services Samart Telcoms Pcl. 1. Multimedia communication service via satellite

2. Satellite and multimedia network rental service

3. IT and Communication system distribution and

installation service

Samart Broadband Services High-speed data communication service via local network

Co., Ltd. (Digital Subscriber Line: DSL) and distribution of computer

and communication device

Samart Communication Network, telecommunications and information technology

Services Co., Ltd. service including procurement, operations, maintenance

and repair of communication equipment under the

Certified ISO 9000-2000

Samart Telecommunication Voice over Internet Protocol (VoIP) operator and provide

(Cambodia) Co., Ltd. fully-integrated ICT outsourcing service

2. System Integration Samart Comtech Co.,Ltd IT and Communication technology design and installation

contract / Communication equipment and computer

distribution, repair & maintenance for State Agencies.

3. Innovation Business Samart Telcoms Pcl. Provide Electronic Learning system with total Courseware

Application Solutions & Thai Trade Net Co., Ltd. 1. Trade data interchanging service (Electronic Data

Services Interchange: EDI) and total value added services.

2. Consulting and work system design service for

businesses to streamline working process with trade

partners under the EDI and XML standard

Posnet Co.,Ltd. 1. Total consulting and installation service of payment

network

2. Solution Provider in Smart Card Applications for

Commercial Banks in Thailand and card issuing

companies.




Business Group Company Business

4. ICT Outsourcing Services Samart Telcoms Pcl. 1. Provide total ICT Outsourcing services including

system development, management and maintenance.

2. Provide Computer & Operation Center Outsourcing

service

Oasis Consulting Co., Ltd. Software Consulting, Programming, Installation and

implementation of SAP and any other computer Systems

Smarterware Co.,Ltd. Software Developer and provide service and consultation

in term of turn-key project for software system as well as

one-stop software engineering services

5. IP Business Samart Infonet Co.,Ltd. Internet Services


The revenue structure of the Company and its Subsidiaries as of December 31, 2006-2008

Unit: Million Baht

Business GroupOperated % 2006 2007 2008

by holding Revenue % Revenue % Revenue %

1. Network Services STC - 916.3 31.8 965.5 44.3 1,201.1 41.4

SBS 99.99% 0.8 0.0 30.6 1.4 - -

SCS 99.99% 1,118.7 38.9 536.2 24.6 561.7 19.4

STCC(1) 100% - - - - - -

Subtotal 2,035.8 70.7 1,532.3 70.4 1,762.8 60.8

2. System Integration SCT 99.99% 596.3 20.7 405.5 18.6 732.8 25.3

Subtotal 596.3 20.7 405.5 18.6 732.8 25.3

3. Innovation Business Application STC - 5.7 0.2 12.7 0.6 13.6 0.5

Solutions & Services TTN 99.99% 33.0 1.1 38.6 1.8 22.8 0.8

PN 99.99% 200.2 7.0 109.0 5.0 80.0 2.7

Subtotal 238.9 8.3 160.3 7.4 116.4 4.0

4. ICT Outsourcing Services STC - 0.1 0.0 - - 0.5 0.0

OASIS 70% 9.2 0.3 54.0 2.5 76.3 2.6

STW(2) 99.99% - - 0.9 0.0 5.1 0.2

Subtotal 9.3 0.3 54.9 2.5 81.9 2.8

5. IP Business SIF(3) 99.57% - - 24.5 1.1 206.2 7.1

Subtotal - - 24.5 1.1 206.2 7.1

Grand total 2,880.3 100.0 2,177.5 100.0 2,900.1 100.0

Remark : 1. The above revenues are exclusive of Inter-company transactions.

2. STC = Samart Telcoms Pcl. SBS = Samart Broadband Services Co.,Ltd

SCS = Samart Communication Services Co.,Ltd. STCC = Samart Telecommunication (Cambodia)

SCT = Samart Comtech Co.,Ltd TTN = Thai Trade net Co.,Ltd.

PN = Posnet Co.,Ltd. OASIS = Oasis Consulting Co., Ltd.

STW = Smarterware Co., Ltd. SIF = Samart Infonet Co., Ltd.

3. (1) Registered on August 9, 2007(2) Registered on May 3, 2007(3) Samart Telecoms Pcl. purchased shares of Samart Infonet Co., Ltd. from Samart Corporation Pcl. on September 28,

2007. After the capital increase followed by the decrease in 2007, Samart Telecoms Pcl. holds 6,173,194 shares at

par value of 10 Baht per share or a 99.57% of paid up capital as of December 25, 2008.

Revenue Structure




Thai economy in 2008 recorded a 3% growth, compared with 4.9%(1) in 2007. The slowdowngrowth was due to the oil spiral in the first three quarters coupled with the political unrest. Importantly,world economic downturn as a result of the US financial crisis causes delay in a number of privateinvestment projects. The deteriorating purchasing power of consumers as a consequence of the escalat-ing inflation during the first three quarters resulted in decreasing demand in luxury goods. Neverthelessthe IT market continued to grow by 8-10% with market value of 158-161 billion Baht(2) in line withdecreasing price of products and services as a result of price competition strategy from the players tostimulate sales in the sluggish market and the introduction of new technologies such as Netbook, thelight weight computer ideal for mobility use. Moreover the number of Internet users significantly grew by80% from previous year with Internet market value of 10% or 13 billion Baht(3) while the mobile phonemarket expanded by 5.3% with market value of 176 billion Baht(4). The ICT investment by large businesscontinued given the changing market environments and regulations. For example, the improvement ofoperational efficiencies by organizations, the enforcement of Computer Traffic Law and the ElectronicPayment Law resulted in additional investment of many players. On the other hand, additional investmentICT was made in the telecommunications business sector in order to support the 3rd generation of mobilephone or 3G on existing frequency.

Thai economy is expected to grow at 1.0%(1) in 2009 as the private sector still does notfully recover. Investors postpone investments while cautiously watching world and Thai economy. TheGovernment activities stimulating the economy especially through mega projects, interest rate cut andsufficient investment promotion awarded to private sector may drive Thai economy to grow up to 2.0%(1)

For 2009, the ICT market is expected to reach 163-169 billion Baht, a 3-5%(2) growth. Of which,computer hardware contributes to 74-77 billion Baht, 2-4%(2) growth, computer software 64-67 billionBaht, 3-5%(2) growth and computer service market 24.5-25.5 billion Baht, 6-8%(2) growth respectively. Themobile phone service market will be worth 200 billion Baht or a 13% growth, while the Internet servicemarket will touch 15 billion Baht(3) or a 15% growth. Regarding the technology trend fueling the marketgrowth in 2009 will include Netbook, Mobile Internet Device (MID), the 3rd generation mobile phone (3G),the hi-speed wireless Internet using WiMAX technology and the environment conservation technology.(Green Technology)

Reference1. Fiscal Policy Office, Thailandûs Economic Projection for 2008 and 2009, December 24, 2008

Website : http://www.fpo.go.th/content.php?action=view&section=6400000000&id=215252. Kasikorn Research Center, IT Market Outlook, 2009: Numerous Risk Factors, K-Econ Analysis, Volume 14

No.2368, December 3, 20083. Interview article from Khun Morragot Kulatumyotin, Senior Executive Vice President & COO of Internet

Thailand Public Company Limited, and Khun Vasu Khunvasi, General Manager of True Internet Co., Ltd.,ISP harmonize accept higher competitive Internet market., Thairath Newspaper, January 9, 2009Website : http://www.bcoms.net/news/detail.asp?id=9074

4. Kasikorn Research Center, Mobile Service, 2008: Growth > 5%, July 15, 2008, POSITIONING magazine,Website : http://www.positioningmag.com/prnews/prnews.aspx?id=71425

5. Interview ar ticle from Khun Somchai Ler tsutiwong, Executive Vice President-Marketing ofAdvanced Info Service Plc., AIS last devilment, Growth than the market crash, Posttoday Newspaper, January6, 2009Website : http://www.posttoday.com/business.php?id=26339

Industry and Competitive Analysis


Changes During The Year

In 2008, the Company decreased the registered capital of Baht 720 million (720 million ordinary

shares of Baht 1 each) to Baht 600 million (600 million ordinary shares of Baht 1 each) by reduced

120 million ordinary shares of Baht 1 each, and increased the Companyûs registed capital of Baht 138

million from Baht 600 million (600 million ordinary shares of Baht 1 each) to Baht 738 million (738

million ordinary shares of Baht 1 each) by issuing 120 million new ordinary shares with a par value of

Baht 1 each, at a total price of Baht 120 million to be offered to specific investors and/or institutional

investors and/or investors with specific qualification (Private Placement), and/or strategic partners

which sales criteria and condition as same as the resolution of the Extraordinary General Meeting of

Shareholders no. 1/2006. And allot the rest 18 million new ordinary shares to reserve for the exercise

of warrants of the Companyûs directors and the employees of the Company and its subsidiaries. The

proceeds from exercise of warrants will be used as working capital of the Company.

For effective operations, the Companyûs business is divided into 5 business units consisting of

Network Services, System Integration, Innovation Business Application Solution & Services, ICT

Outsourcing Services and IP Business. In 2008, significant changes of each business unit can be

indicated as follows;

1. Network Services Business Group1) Samart Telecoms (Public) Co., Ltd. has significant changes as follows;

ë Won the following bidding projects;

- The Live Broadcast for Remote Learning Video Conferencing project Phase

1, 3, 5, 8 and 9 for Ramkamhaeng University with the upgrading to be

compatible with High Definition or Full HD in 2008

- The ICT technology security system installation project for Ramkamhaeng

University

- The Remote Learning Video Conferencing for Learning Kits Project Phase 3

of Panyapiwat School

- The Access Node Equipment Procurement Project Phase 3 with the Govern-

ment Saving Bank

ë Trusted for Contract renewals to provide data communication service for Private

and Government customers

- IPSTAR network for the Revenue Department

- IPSTAR and C-Band network for Defence Space Tehnology Center

- SCPC network for Total Access Communication PLC.

- SCPC network for PTT Exploration and Production Public Company Limited

- Rental communication services for Ek-Chai Distribution System Co., Ltd.

- IPSTAR and C-Band network for Department of Provincial Administration

and the Department of Local Administration




- The Communication System through ATM Frame Relay connecting to CCTV

project for the Department of Provincial Administration

2) Samart Communication Services Co., Ltd. has significant changes as follows;

- Capitalizing on the Companyûs specialized staff and experts, the Company

expanded the telecom equipment repair service for Government, State Enterprise

and Private customers to help increase its revenue base, optimize resources and

save costs related to overseas equipment repair. As an ongoing expansion, the

potential location for offshore service office was surveyed, starting with Cambodia,

the neighbor country resided by the target groups possessing high business

opportunity operations;

- The Company has maintained its service standards in conformity to the ISO900:2000

with the Certification extended at the end of 2008 adding customersû confidence

and strengthening competitiveness in long run. As a consequence, the Company

won the bidding for various projects in 2008 including Ethernet Network Project

CAT Telecom Public Company Limited. These projects will generate revenues for

the Company in 2009 and serve as additional revenue source for maintenance

service in the future.

2. System Integration Business Group

1) Samart Comtech Co., Ltd. has significant changes as follows;

The Company continually maintains corporate work standard with efficiency

and effectiveness emphasizing knowledge base development (Target Knowledge

Certification) enabling sales force, designers and engineers to deliver high quality works

in keeping up with business changes in current period and the future. Besides, the

Company maintains service standards pertaining to the certified ISO 9001:2000 that

improves work systems and customer services crucial for long-term competitiveness. As

a consequence, the Company won the bidding for various projects in 2008 including

1. Provide and Install Backbone Network for Ministry of Defense

2. Improvement of Ministry of Defense Data Network for year 2008 - 2010

3. The Communication and Network Equipment Service and Maintenance Project

and the Communication Networking Project for the Ministry of Interior

4. The Maintenance of IT System for Military Logistics Project for the Royal Thai Air

Force

5. The Fiber Optic Network Installation Project for the Ministry of Justice6. The Computer and Processing Device Installation project as part of the IT System

for Management of the Rights and Liberties Projection Department


7. The Concession of Passenger Ticketing System for the Phuket InternationalAirport, the Airports of Thailand (Public) Co., Ltd.

8. The AIMS Network Maintenance Service project for the Suvarnabhumi InternationalAirport, the Airports of Thailand (Public) Co., Ltd.

9. The Computer and Peripherals Maintenance Service project for the SuvarnabhumiInternational Airport, the Airports of Thailand (Public) Co., Ltd.

These projects will generate revenues for the Company in 2009 and serve as additional

revenue source for maintenance service in the future.

3. Innovation Business Application Solutions & Services Business Group1) Samart Telecoms (Public) Co., Ltd. has significant changes as follows;

- Cooperation with University of the Thai Chamber of Commerce to organize theMasterûs Degree program named MBA Online, a Master of Business Administrationprogram featuring remote classroom via the Internet (Distant Learning), Thailandûsfirst course, targeting Knowledge Workers who are the new generations usingknowledges and abilities to work but do not have enough time to come to thefull-time class. Throughout the 1 year and 8 month period (5 semesters), thestudents can learn from everywhere and every time as far as Internet connectionis available. Besides, the Company cooperates with the Program to organize thesupplementary activities including seminars with the guest speakers possessingbusiness experiences, oversea onsite visit and other activities providingopportunities for students to exchange experience and meet with classmatesthroughout the coursework.

- Cooperated with University of the Thai Chamber of Commerce in providing thecurriculum for Master of Accounting (the Electronic Distant Learning system) calledçAccounting Onlineé featuring Internet Distant Learning, to produce qualityaccountants and further develop Accounting profession.

2) Thai Trade Net Co., Ltd. has significant changes as follows;- Developed the e-Manifest Paperless service based on that TTN e-Manifest

serving as the platform to provide Paperless Manifest for the Customs Departmentin replacement of the Manifest EDI system during the end of 2008 to the beginningof 2009.

- The Company entered the Agreement with Central Retail Corporation Co., Ltd.to develop and provide the CRC web EDI service, a web-based data interchangesystem suitable for small and medium sized businesses and trade partners ofthe Central Retail Group totaling over 3,000 in numbers. The launch seminarwas organized in October 2008. The service is expected to start in the beginningof 2009.




3) Posnet Co., Ltd. has significant changes as follows;

- Rented machine to AEON shops with the target of 2,000 units within 2009 to

enhance value added service channel via the EDI Terminal installed at AEON

shops.

- Extend the Service Agreement with TOPS Supermarket to supply EDI terminal and

network system until October 2009. The possible extension to October 2012 is

under negotiation.

- Bar BQ Plaza trusted the Company to do the outsourcing Loyalty Program. The

Company will be ready to take care of Bar BQ Plaza customers by April 2009.

- Launched New Mobile Payment terminal, MagIC M series

4. ICT Outsourcing Services Business Group

1) Samart Telecoms (Public) Co., Ltd. has significant changes as follows;

- Deliver and install 28,500 spots of Automatic Meter Reading (AMR) Provincial, or

95% of total project, for Electricity Authority and continue with additional 1,017

spots for large electricity users in the chaotic areas of the 3 southern provinces

and 4 Amphoe of Songkhla with total project value of 24.7 million Baht

- Entered Digital Video Broadcast (DVB) project bidding to broadcast visual and

audio signals through the network of the Provincial Electricity Authority (PEA) on

the Intranet and Fiber Optic network from the headquarters of PEA to the local

offices and provincial offices of PEA nationwide with total project value of 30.6

million Baht.

- Installed the communication equipment for the pilot project Automatic Metering

Infrastructure (AMI) for the Metropolitan Electricity Authority (MEA) in order to

enhance the efficiency of work system through ICT network of MEA, setting the

stage for further development of fully-integrated AMI system.

- Tested the hi-speed wireless communication using WiMAX technology on the

fiber optic of the Provincial Electricity Authority around the Amata Nakorn

Industrial Estate areas, Chonburi. The test results were certified by the National

Telecommunications Commission for the wireless visual and audio data

communication (Quad Play) with high reliability. This is the first step for the

development of hi-speed wireless communication with WiMAX technology, in

cooperation with the Provincial Electricity Authority. The request for License and

the allocated frequency to operate WiMAX services will be submitted to the NTC

Committee accordingly.


2) Oasis Consulting Co., Ltd. has significant changes as follows;

- Provided consulting service for mega projects of the Government, supported and

backed up the works under the assigned responsibilities with continual increase

of manpower by 15%.

- Established the plans to develop human resource and the channels to enhance

more business lines with the target to provide total solutions.

- Restructured the organization to improve efficiencies of relevant services offering

total solutions to expand customer base and uplift the capacity to serve

customers.

3) Smarterware Co., Ltd. has significant changes as follows;

- The Company expanded customer base to cover the multi-national business in

financial and banking industry that increase trustworthiness of the Company.

- The Company joined the business alliance with IBM Thailand Co., Ltd. and Panda

Security Co., Ltd. to promote specialization and customer base expansion.

- The Company obtained the standard of software development at CMMI Maturity

level 3 is accepted as the level of international software industry standard- The Companyûs Management was certified for the ICT service operations (ITIL -

Information Technology Infrastructure Library) Version 3, widely accepted in the

ICT industry worldwide.

- The Company was promoted by the Board of Investment (BOI) for investment

privileges which would increase flexibility and assure the production standard.

- The Company participated in the SSME/ITSC Fast Track Program 2008, the pilot

project in developing skills of the new graduates to be prepared for the real

demand of business sector. The project was the cooperation between National

Electronics and Computer Technology Center, Software Industry Promotion Agency,

Rangsit University and IBM Thailand Co., Ltd. as part of the strategy for Corporate

Social Responsibility.

5. IP Business Group

1) Samart Infonet Co., Ltd. has significant changes as follows;

- The National Telecommunications Commission (NTC), assigned by the NTC

Committee, passed the resolution to allocate and identify telecom numbers for

Samart Infonet Co., Ltd. to provide VoIP using phone numbers for the following

services;

1. Standard Telecom numbers for the new technology network for the number

group ç060,é making up of 10 groups; 1,000 numbers for each group (10,000

numbers)




2. Telecom numbers for technical uses including Signaling Point Code (SPC)

for the identification of Telephone Exchange location (Address) including

the 4 Addresses of National Signaling Point Code (NSPC)

- Restructured the organization to enhance efficiencies in product distribution for

enterprise customers by integrating product and service promotions of Internet

Service Provider and Internet Telephony Service Provider to penetrate upcountry

customers and increase after-sales service capacity

- Imported and tested new technologies for Internet products and services which

help stabilize Internet usage and reduce costs, such as data compression and

security. These products are placed in the group with high competitive potentials

for 2008

- Increased customer satisfaction by improvement and development of customer

service through Call Center

- Trusted to be the service provider of high-speed communication network for

leading organizations including University of the Thai Chamber of Commerce,

the Ministry of Justice, Electricity Generating Authority of Thailand, and SiamCommercial Bank

- In October 2008, the Company joined force with NexG KOREA to launch Smart

Bonded Broadband service, a technology to manage the consolidation of hi-speed

Internet channels using Hardware NexG Vforce to speed up the Internet use of

organizations, reduce rental cost of hi-speed network for management and

combine VPN, QOS and Firewall functionality. The Company will market the service

in 2009 with focus on medium and large organizational customers requiring

hi-speed Internet at economical cost yet high stability.

- Developed SAMART WIP service to support the growth of VoIP service such as

- Improved service quality in connecting with the world-class Voice Carrier Tata

Communication (TeleGlobe) offering hi-end quality of service. (SL.9, compared with

SL.2 used by the other players)

- Developed Payment Gateway to cover the uses nationwide.

E-Commerce via website çSAMART WIPé facilitating Verify/Non-Verify credit

card payment for VISA/MASTER through Thailand Top-rank Gateway

Payment (K-BANK Payment Gateway)

Point of Sale via Counter Service and Pay Point countrywide including 7-11,

AIS Shops and Telewiz Shops with mPAY Station system


SMS Payment via Credit Card, first to refill call cost by credit card payment

by SMS for Thailandûs No. 1 credit card issuer KTC through the service

called çThumb on Demandé

Mobile Payment, refill through Thailandûs No. 1 mobile phone service

provider AIS with the mPAY service

- Increased distribution channel for international call cards and PIN. SAMART WIP

reaches users from over 6,000 outlets nationwide.

- Developed Plug &Play system, the first operator to supply VoIP connecting device

(IAD: Internet Access Device) or Auto-Provisioning. Customers purchase the

device and plug in the Internet wire. The system will set the default and stand

by ready for use.

- Improved IVR to support the service with 5 languages including Thai, English,

Chinese, Japanese and German



ENRICH LIFE THROUGH ICT SOLUTIONSProject in the Future

1. Acquisition of Portal Net Co., Ltd.,During year 2006, Company had a plan to acquire Portal Net Co., Ltd., which under 5-year

contract from Provincial Electricity Authority (PEA) is implementing ERP software. Such software willbe rented to PEA with total contract value of Baht 3,192 million. This acquisition, if successful, shalladd PEA as a key account for exploring future business opportunities. Financially, the long-termcontract will bring stability to revenue scheme. Company shall purchase 999,940 units of commonstock from MLINK Asia Corporation Plc. or a 99.99% of the distributed shares of Portal Net Co., Ltd.amounting to 140 million Baht and acquire loans through the transfer of right in loan enforcementand/or loan repayment obliged to the Loan Agreement between MLINK Asia Corporation Plc.(Creditor) and Portal Net Co., Ltd. (Debtor). However, such project is affected by the delay of workdelivery pertaining to the ERP software rental contract for core business. The PEA has approved toextend the delivery schedule and waive the penalty from March 17, 2007 to September 5, 2008and there will be additional considerations. At present, the examination of the Software has finishedalready and while being usable. Therefore, Portal Net Co., Ltd. is obliged to loans and other expensescaused by work delivery delay. However, The Company still intends to acquire Portal Net Co., Ltd.,merely postpones the acquisition for the clarity of contractual work delivery and incurred obligationsin order to appropriately adjust purchase conditions.

2. Broadband Wireless Access with WiMAXCompany plans to provide Broadband Wireless Access with WiMAX (Worldwide Interoperability

for Microwave Access), the technology using Microwave band of frequency with new modulatingtechnique allowing more efficient bandwidth use, higher data transfer rate over longer distanceswith more reliability. Under the IEEE802.16 standards, WiMAX is able to provide robust wirelesscommunication up to 50 kilometers for fixed stations with throughput of 70 Mbps and supportsnon-line-of-sight and point-to-multipoint wireless communication with QoS (Quality of Service)capability. WiMAX can offer Quad Play (data, voice, and video with wireless/mobile capability) andsupports various applications such as high-speed Internet services, Voice over IP, e-learning,multimedia content access, etc. Due to the standard, WiMAX promotes vendor-independentsolutions driving reduction of equipment cost, hence the cost-effective backhaul and last-milesolutions.

Company will conduct the WiMAX business in form of Virtual Network Operator (VNO) byallying with network service providers / operators that possess their own network infrastructure, forexample, CAT Telecom PLC., TOT PLC., Provincial Electricity Authority (PEA), Metropolitan ElectricityAuthority (MEA) Electricity Generating Authority of Thailand (EGAT).

Company will apply for the telecommunication license from the National TelecommunicationsCommission (NTC) and will request WiMAX frequency for commercial purposes promptly when NTClaunches the clear guideline and criteria regarding the WiMAX frequency allocation regulations.

For financial return assessment, Company still needs to know the structure of WiMAXfrequency/spectrum usage fee while NTC has not yet clarified the guideline on the method offrequency allocation and procedures of awarding license. NTC may arrange frequency allocationmethod in the form of auction. The frequency usage fee then will be the key factor of more precisefinancial return assessment and major cost of running business.


Risk factors which may affect the Companyûs business are as follows;

1. Business and Market RiskThe world economy and financial distress, together with the political unrest, adversely affect

countryûs economic growth. Business enterprises postpone investment to assess the situations andretain liquidity status. The Government, therefore, injects capital to the economy system throughinvestment in a broad spectrum of public infrastructures and ICT in order to stimulate the economyand remedy the unemployment problem. This provides a good opportunity for the Company whosemajor revenues are generated from the Government sector. The increasing budget deficit following thetax collection below target, however, may delay the bidding of some mega project investmentinterested by the Company. The more tightened loan approval by financial institutions will notsignificantly impact the Company as major customers are the Government Agencies and the Companyassigns the right to collect revenues to the creditors. In addition, the Company has the policy toincrease liquidity by negotiating for payment terms and conditions with large Suppliers of variousprojects to match cash flow of respective projects.

Due to the economic problem, political fluctuation and rapid change of technologies, theCompany has the policy to increase long-term revenue sources such as rentals and contractualservice and maintenance in order to stabilize revenue growth through the Companyûs operationsand business acquisitions, coupled with expansion of revenue base by extending ICT services andproducts featuring the Total Solution to enhance competitiveness. The Company will carefully expandcustomer base in private sector in order to control the payment default risk.

Moreover, the Company operates business related to IT and telecommunication technologywhich requires the Concession to Operate from Government Agencies. The Company is operatingunder the Concession to operate video and audio data communication through satellite granted bythe National Telecoms Commission (NTC). With the granted period of 22 years, the Concessionremains effective period of 9 years. However, if the Concession is not renewed, the Companyûsrevenues will not be significantly affected because the revenues generated by the Concessioncontribute to less than 10% of Companyûs total revenues.

2. Risk associated with Dependence on large customersBecause the revenue proportion from Government sector was 58% of gross revenues in

2008, the delay of ICT budget spending will significantly impact the Companyûs operating performanceand financial conditions. At present, the major customers of the Company are Government Agenciesreporting to the Ministry of ICT. TOT was attributable to 25% of gross revenues. The 5-year Contractfor school Internet project, equivalent to 17% of gross revenues, will expire in 2011. Nevertheless,the Company has expanded customer base to State Enterprises and other Government Agencies.The elimination of high concentration on a particular Agency will mitigate the risk from budget cutof the Contractual Agency. Besides, the Company puts an effort to expand customer base toPrivate sector. As a result, the revenue proportion from Private sector increased from 30% in 2007to 40% in 2008.

Risk Factors




3. Risk associated with Dependence on Large SupplierWith regard to the satellite based communication service business, the Company rents signal

channel via satellite from only Thaikom (Public) Co., Ltd. The 10-year Signal Channel Rental Agreementwill expire in 2012. If the Agreement to rent signal channel from Thaikom satellite will not be renewed, theCompany can rent signal channel from other satellite operators based in foreign countries. For theCommunication Network and System Installation (Turnkey Projects), the Company orders equipmentfrom many suppliers. As a result, there is no risk associated with dependence on single supplier.

4. Credit RiskThe Company has implemented the policy to continually resolve the overdue receivable

problems specifically monitored by the Collection Department. The Company can control over thedelinquent amount to a satisfactory level. Besides, the Company has the policy to assess statusand liquidity of each customer before providing services in order to reduce default account problemwhich may adversely affect the Company in the future. Most of debtors currently are the customerswith good financial status such as State Enterprises, Government Agencies and large Corporations;therefore, default payment risk is at a low level. During the past year, the Company faced payment delayfrom some Government Agencies and caused the Company to incur interest expenses. But bank loanrepayment was tied to project cash flow. Therefore, the Company did not have liquidity problem.

The Company has the policy to reserve 50% of the doubtful debt provision for the receivableswith payment due exceeding 6 months but not over 12 months. In case of over 12 month overdue, thereserve will be fully provisioned. In 2008, the Company reserves the provision for doubtful account of25.53 million Baht or a 4.10% of outstanding debt amount, sufficient for the possible damage.

5. Risk associated with Higher Liabilities after the Acquisition of Portal Net Co., Ltd.The Company was approved by the Shareholderûs resolution dated October 17, 2006 to acquire

Portal Net Co., Ltd. from M Link Asia Corporation (Public) Co., Ltd. Due to the delay in work deliveryas per the Computer Software for Lease Agreement for the core business of the Provincial ElectricityAuthority (PEA) under the SPIES Joint Venture in which Portal Net Co., Ltd. entered, Portal NetCo., Ltd. recorded the estimated contractual penalty. However, the Joint Venture issued the letter torequest for a period extension of system development and implementation and penalty exemption.The PEA is considering the requested extension of work delivery period. At present, the ProvincialElectricity Authority (PEA) extends the delivery schedule (1st extension) and exempt penalty incurredfrom March 17, 2007 to March 7, 2008. The PEA is considering the 2nd extension with effective periodfrom March 8, 2008 to May 19, 2009. In view of the Computer Software Lease project pertinent to theCompanyûs business objectives and serving as the fixed revenue source, however, the Companyonly postponed the acquisition for clarity and necessary adjustments in acquisition conditions. As aconsequence, the Company is subject to risk associated with failure to acquire the business. If theCompany fails to acquire the target company for any reason, however, the Company is not obligedto penalty from Share Purchase Agreement cancellation.

If the business acquisition is successfully acquired, the Company shall strictly adhere to thepolicy to control appropriate debt to equity ratio in the financial statement with sufficient capital


amount in coverage of debt burden arising from the acquisition of Portal Net Co., Ltd. and otherliabilities incurred from business expansions in order to mitigate financial risks in dealing withfluctuation of external factors such as ICT and Telecommunications market and interest rates.

6. Majority RiskMajor shareholder of the Company is Samart Corporation (Public) Co., Ltd. Holding 417,886,090

shares or 69.65% of Companyûs paid-up capital and Vilailuck International Holding Co., Ltd., held bythe Vilailuck family who is the shareholders of Samart Corporation (Public) Co., Ltd., holding 9,204,000shares or 1.53% of Companyûs paid-up capital, the shareholdersû resolutions of major issues can bealmost absolutely controlled, such as the appointment of Committees and the voting for any issuesrequiring the majority in the Shareholdersû meeting, except for the issues required by laws or Companyûsregulations to receive three-fourth of votes in the Shareholdersû Meeting. Therefore, other shareholdersmay not be able to combine votes to balance out the major shareholders. (Information based onThailand Securities Depository on the latest date of closing registration book, December 30, 2008).

The Company appointed the Audit Committee member comprise of 3 members as an inde-pendent directors to be responsible for review, comment and ensure that all connected transactionsand any other conflict of interest transactions have been complied to laws, and regulations of SET/SEC as well as to ensure that the transactions are reasonable with best benefit to the Company.

7. Risk associated with Change in Major Shareholders due to Pledge of SharesSamart Corporation (Public) Co., Ltd. entered the Loan Agreement with a domestic bank. Under

such Loan Agreement, Samart Corporation Pcl. agrees to pledge 260,832,000 shares of Samart Telecom(Public) Co., Ltd. (çCompanyé), or a 43.47% of Companyûs paid up capital, to secure the debtrepayment. However, the possibility in which the bank will exercise the right to foreclose the pledgedshares is rare. Because Samart Corporation Pcl. continually records good operating performance,debt serviceability is deemed sufficient. At present, Samart Corporation Pcl. has repaid loans to thebank over 50% of the credit line of 2,250.25 million Baht.

Nevertheless, should Samart Corporation Pcl. fail to comply with the conditions set forth in theLoan Agreement causing the bank to execute the right in foreclosing the pledged shares for therepayment of remaining debt, the shareholding structure of the Company will not be significantlychanged. Samart Corporation Pcl. will remain the major (as the first of Major Shareholders of theCompany) shareholder with shareholding of 24.42% of paid capital.

8. Risked associated with dependence on external network serviceDespite the Internet and VoIP phone service operations, the Company does not own service

network. Because Internet network requires huge capital investment, the Company leases networkfrom external source. At present, the Company has entered the 10-year Internet Protocol LeaseAgreement with TOT (Public) Co., Ltd. and the Agreement will expire in 2011. Lack of own networkbears risk. If TOT (Public) Co., Ltd. does not renew Network Lease Agreement, the Companyoperations will be affected. If the Company does not continue leasing network of TOT, nevertheless,the Company may turn to lease network of EGAT, PEA or MEA providing high quality fiber optic atreasonable price.



ENRICH LIFE THROUGH ICT SOLUTIONSShareholders

As of December 30, 2008, the list of top ten shareholders of the Company is as follows:

No. Shareholders Amount of share %

1. Samart Corporation (Public) Co., Ltd. Group (1) 433,708,890 72.28

2. Bangkok Bank (Public) Co., Ltd. 29,966,560 4.99

3. Mr. Thaweechat Jurangkul 25,000,000 4.17

4. Vilailuck Group (2) 22,438,310 3.73

5. Mr. Choochai Supniti 10,433,800 1.74

6. Mr. Somchai Vimokjaroansuk 7,659,590 1.28

7. Central Retail Corporation Co., Ltd. 6,000,000 1.00

8. Mr. Supoj Chattasopon 5,814,700 0.97

9. Mr. Suriya Dechcharnchaiyuth 4,451,100 0.74

10. Mrs. Aree Vichitkul 4,332,300 0.72

Total of top ten shareholders 549,805,250 91.63

Total number of issued shares 600,000,000 100.00

(1) Samart Corporation (Public) Co., Ltd. Group

- Samart Corporation (Public) Co., Ltd. 417,886,090 shares equivalent to 69.65%

- Samart I-Mobile (Public) Co., Ltd. 15,822,800 shares equivalent to 2.63%

Total 433,708,890 shares equivalent to 72.28%(2) Vilailuck Group consisted

- Mrs. Sukanya Vanichjakvong 11,365,300 shares equivalent to 1.89%

- Vilailuck International Holding Co., Ltd. 9,204,000 shares equivalent to 1.53%

- Mr. Theerawat Pipatdittakul 1,449,000 shares equivalent to 0.24%

- Ms. Sirirak Vilailuck 320,000 shares equivalent to 0.05%

- Mr. Thananan Vilailuck 50,000 shares equivalent to 0.01%

- Lobburi Industrial Estate Co., Ltd. 50,000 shares equivalent to 0.01%

- Mr. Watchai Vilailuck 10 shares equivalent to 0.00%

Total 22,438,310 shares equivalent to 3.73%

Source : Information based on Thailand Securities Depository on the latest date of closing registration book, December

30, 2008


Management

1. Management StructureThe Companyûs management structure comprised of 6 Committees, Board of Directors,

Executive Board, Audit Committee, Corporate Governance Committee, Nominating & Compen-

sation Committee, and Risk Management Committee are as the follows:

Corporate Structure

Remark : Corporate Accounting and Corporate Treasury are under Chief Operating Officer

Network Services

Business Group

System Integration

Business Group

Innovation BusinessApplicationSolutions &

Services BusinessGroup

ICT Outsourcing

Services

Business Group

IP

Business Group

Board of Directors

Company Secretary

Nominating &Compensation

Committee

Risk Management

CommitteeAudit Committee

Corporate Governance

Committee

Internal Audit Executive Board

Executive Chairman

Chief Operating Officer




1) Board of Directors as of December 31, 2008 consists of 9 Directors:

1. Mr. Sombut Uthaisang1) Chairman (Non-Executive Director)

2. General Sumpun Boonyanun1) Director (Independent Director /

Chairman of the Audit Committee)

3. Miss Rapeepan Luangaramrut1) Director (Independent Director /

Audit Committee member)

4. Mr. Narongchai Satanupong Director (Independent Director /

Audit Committee member)

5. Mr. Kajornvut Tayanukorn Director (Non-Executive Director)

6. Mr. Charoenrath Vilailuck Director (Executive Director)

7. Mr. Watchai Vilailuck Director (Executive Director)

8. Mr. Sirichai Rasameechan Director (Executive Director)

9. Mr. Pairote Varophas Director (Executive Director)

Mr. Somchai Bunsupaporn Company Secretary

Remark : 1) Have been appointed as a Companyûs Director on April 24th, 2008.

The number of directors is in line with the Companyûs Articles of Associations that

the Board of Directors should have at least 5 members. Not less than one half of such

members shall have residence within the Kingdom and the directors of the Company shall

have qualification as specified by law.

Restriction of Power of the Directors

çMr. Sombut Uthaisang or Mr. Charoenrath Vilailuck or Mr. Watchai Vilailuck or

Mr. Pairote Varophas, totaling two persons jointly signs and affix the Companyûs sealé

Qualifications of Director

1. Has qualifications which comply to Public Company Act B.E. 2535, regulations of the

Stock Exchange of Thailand, Securities and Exchange Commission, and Companyûs

Articles of Association and any other related laws;

2. Does not run any business, which is competed with the Company, and not being a

shareholder of any legal entities whose business is the Companyûs competitors except

obtained approval from the shareholders;

3. Should have leadership, vision, and independent consideration for best benefit of the

Company and the shareholders;

4. Has various knowledge, experience, and specific skill that suitable for the Company

business;


5. Integrity;

6. Having sufficient time for fully participated as a Director of the Company;

Qualifications of Independent Director

1. Holding not more than 1 percent of the total number of voting rights of the Company, its

parent company, its subsidiaries, its affiliated companies or other juristic person which

may have conflicts of interest , including the shares held by related persons of the

independent director;

2. Neither being nor having been Executive Director, employee, staff or an adviser who

receives a regular salary; or a controlling person of the Company, its parent company, its

subsidiaries , its affiliated companies , same-level subsidiaries or juristic person who may

have conflicts of interest unless the foregoing status has ended not less than two years

prior to the date of application filing with the office;

3. Not being a person related by blood or registration under laws, such as father, mother,

spouse ,sibling, and child, including spouse of the children, executives , major sharehold-

ers , controlling persons, or persons to be nominated as executives or controlling per-sons of the Company, its parent company or its subsidiaries;

4. Neither being nor having a business relationship with the Company, its parent company,

its subsidiaries, its affiliated companies or juristic person who may have conflicts of

interest, including professional/business advisor which been specified by The securities

and Exchange Commission (çSECé) unless either the foregoing status has ended not less

than two years prior to the date of application filing with the office or the transaction is

irregular and reasonable. The independent director, during his post, may have relation

with the Company over the level set by SEC but prior the transaction, an unanimous

approval by the Board of Directors is required;

5. Not being a director who has been appointed as a representative of the Companyûs

director , major shareholder or shareholder who is related to the Companyûs major

shareholder;

6. Not having any characteristic which make him incapable of expressing independent

opinions with regard to the Companyûs business affairs.

Terms of positions

Pursuant to the Public Company Acts B.E. 2535, at first Annual General Meeting of

Shareholders after the registration of the Company and at the first Annual General Meeting

of Shareholders in every subsequent year one-third of the directors, who have been longest

in office, shall retire. The retired directors are eligible to be re-elected for another term by




obtaining majority vote from the Nominating & Compensation Committee. However the

independent directors shall be in post no longer than 3 terms except getting a unanimous

approval from the Nominating & Compensation Committee due to his/her contribution to the

Company and the Committee ensures that the extra term will not cause or impact to the

independent of such director as well as obtain an approval from Board of Directors and/or

the Companyûs shareholders.

Roles and Responsibilities of Directors

1. Conduct business with accountability, duty of care, duty of loyalty uphold the duties

according to the law, and Companyûs objectives, Articles of Association, resolutions of

the Board of Directors and shareholdersû meeting;

2. Formulate policies and directions for the Companyûs operations. The Board must

also supervise managerial and administrative departments to deliver all policies with

effectiveness and efficiency;

3. Appoint directors and Audit Committee members who retire by rotation as well as

consider the remuneration package for such directors and committee members, whichare proposed by Nominating & Compensation Committee, prior to propose for further

consideration of the shareholders;

4. Appoint committees to oversee administrative process and internal system to coincide

with Companyûs policies, i.e. Executive Board, Risk Management Committee, Corporate

Governance Committee, and Nominating & Compensation Committee etc. For the

appointment of Audit Committee members, the Nominating & Compensation Committee

will nominate appropriated candidates propose to the Board of Directors prior to propose

for further consideration of the shareholders;

5. Appoint and consider remuneration package, proposed from the Nominating & Compen-

sation Committee, for top executives of the Company; and Company Secretary.

6. Summarize annual budget and financial statements of the Company for every fiscal

yearûs ended period. Authorize the statements and present them during the Annual

General Meeting of Shareholders for further consideration;

7. Nominate appropriated persons with remuneration, which are proposed by Audit

Committee, prior to propose for further consideration and approval of shareholders for

the appointment of the Companyûs auditors;

8. Ensure the Companyûs to have written Corporate Governance Policy and Business Ethic

as well as to ensure that there will be no conflicts of interest at the same time to

establish systematic plans for internal control and risk management;


9. Ensure that good corporate governance is implemented to demonstrate Companyûs

commitment to operate the business with ethics and to bring fair treatment to all

stakeholders;

10. In case of entering into any direct or indirect transaction with the Company and

subsidiaries, such director has to immediately inform his/her or related partiesû personal

interest to the Company.

2) Audit Committee as of December 31, 2008 consists of 3 members:

1. General Sumpun Boonyanun1), 2) Chairman of the Audit Committee (Independent

Director)

2. Miss Rapeepan Luangaramrut1) Member (Independent Director)

3. Mr. Narongchai Satanupong Member (Independent Director)

Mr. Somchai Bunsupaporn Secretary of the Audit Committee

Remark : 1) Have been appointed as an Audit Committee member on April 24th, 2008.2) Have been appointed as a Chairman of the Audit Committee on May 14th, 2008.

The Audit Committee member number 2. has adequate expertise and experience to

review creditability of the financial reports.

The Audit Committeeûs members have to be the independent directors who were elected

by the Nominating & Compensation Committee and proposed for the Companyûs Board of

Directors and/or the Companyûs shareholders for further approval. The member of the Audit

Committee must not less than 3 persons.

Qualifications of the Audit Committee

1. Be appointed from the Board of Directors and/or the shareholdersû meeting;

2. Must be independent directors;

3. Does not a director who authorized by the Board of Directors and has responsibility

for the operation of the company, parent company, subsidiaries, affiliates, same-level

subsidiaries or juristic person who may have conflicts of interest;

4. Does not a director of parent company, subsidiaries, and same-level subsidiaries;

5. At least 1 member must be knowledgeable experience adequately to review the reliability

of financial statement, the Company has to define in filling form, Form 56-1 and Form

56-2 for the name of the Audit Committee member who has that qualification, and has to

define his/her qualification in the certification of the Audit Committee profile that should

be sent to the SET.




Terms of positionsTerm of the Audit Committee member is 3 years. All members shall be in post no longer

than 3 terms except getting a unanimous approval from the Nominating & CompensationCommittee and the Committee ensures that the extra term will not cause or impact to theindependent of such director as well as obtain an approval from Board of Directors and/or theCompanyûs shareholders.

Roles and Responsibilities of the Audit Committee1. Review the Companyûs financial statement to ensure its accuracy and adequacy;2. Ensure that the Company has an appropriate and efficiency internal control system,

internal audit; and consider the independence of the internal audit as well as to appoint,rotate or dismiss chief of internal audit of the Company or any other related function whotakes responsibilities to internal audit;

3. Ensure that the Company has complied to the Securities and Exchange Act, regulationsof SEC/SET and any other related regulations;

4. Nominate appropriated and independent persons with remuneration for further consid-eration and approval of the Board of Directors and shareholders for the appointment ofthe Companyûs auditors;

5. Arrange meeting with auditors without the management of the Company at least once ayear;

6. Review, comment and ensure that all connected transactions and any other conflict ofinterest transactions have been complied to laws, and regulations of SET/SEC as well asto ensure that the transactions are reasonable with best benefit to the Company;

7. Provide the Audit Committee report for disclosure in the annual report of the Companywith minimum contents as required by regulations of SET/SEC;

8. Consider any other activities assigned by the Board of Directors.

3) Executive Board as of December 31, 2008 consists of 4 members:1. Mr. Watchai Vilailuck Executive Chairman2. Mr. Charoenrath Vilailuck Member3. Mr. Sirichai Rasameechan Member4. Mr. Pairote Varophas Member

Terms of positionsTerm of the Executive Board members is one year. The Nominating & Compensation

Committee will annually consider and select appropriate persons from the members of theBoard of Directors and the Management propose for further consideration and approval of the


Board of Directors for the appointment in its first meeting after the Annual General Meetingof Shareholders. However, the retired members are eligible to be re-elected for another term.Executive Chairman of the Company will be the Chairman of the Committee.

Roles and Responsibilities of the Executive Board1. Consider business plan, direction and structure as well as the Companyûs, strategies, and

delegation of authorities for further approval of the Board of Directors;2. Monitor, audit and set the management policies for efficiency and productivities as well

as to conform with the instruction of the Board of Directors;3. Consider annual budget of the Company for further approval of the Board of Directors;4. Consider remuneration policy and salary structure propose to the Nominating &

Compensation Committee for consideration prior to further consideration of the Boardof Directors;

5. Consider entering into any transactions binding the Company within its authorities underthe Companyûs Delegation of Authorities;

6. Consider any other activities according to the assignment from the Board of Directors.

The delegation authorities of the Executive Board should not be delegated or furtherassigned that authorize the Executive Board or its attorney to approve any connectedtransactions between themselves or any persons who may have conflict of interest (accordingto the concept of conflict of interest of the Securities Exchange Commissionûs notification)with the Company or subsidiaries except such transactions are handled in line with theconnected transaction procedure or policy which been approved by the Board of Directorsof the Company. The connected transaction has to be considered and approved either bythe Companyûs Board of Directors or shareholdersû meeting to be complied with regulationsof SET/SEC or any related laws and regulations.

4) Corporate Governance Committee as of December 31, 2008 consists of 4 members:1. Mr. Sombut Uthaisang Chairman of the Corporate Governance Committee

(Non-Executive Director)2. General Sumpun Boonyanun Member (Independent Director)3. Miss Rapeepan Luangaramrut Member (Independent Director)4. Mr. Pairote Varophas Member (Executive Director)

Terms of positionsTerm of members of the Corporate Government Committee is one year. The Nominating

& Compensation Committee will annually consider and select appropriate persons from the




members of the Board of Directors and/or any qualified candidates propose for further consid-eration and approval of the Board of Directors for the appointment in its first meeting after theAnnual General Meeting of Shareholders. However, the retired members are eligible to be re-elected for another term.

Roles and Responsibilities of the Corporate Governance Committee1. Responsible for governing and monitoring business operation and committeesû activities

as well as management and employees of the Company to strictly comply with law andrelated regulations;

2. Ensure that good corporate governance is being conducted at all level in accordance tolegal requirements, Companyûs policies and other related authorities;

3. Formulate and review the Companyûs rules concerning good corporate governance;4. Provide suggestions relevant to ethical practices to the Board, management and

employees of the Company;5. Yield continuity and appropriate regulations in carry out good corporate governance;6. Report to the Board the recommendations for improvement on the Corporate

Governance of the Company as appropriate.

5) Nominating & Compensation Committee as of December 31, 2008 consists of 3 members:1. General Sumpun Boonyanun Chairman of the Nominating & Compensation

Committee (Independent Director)2. Mr. Narongchai Satanupong Member (Independent Director)3. Mr. Kajornvut Tayanukorn Member (Non-Executive Director)

Terms of positionsOne-third of the Nominating & Compensation Committee, who have been longest in

office, shall retire by rotation every year. The retired directors are eligible to be re-elected foranother term by obtaining majority vote from the Board of Directors. In case of vacancy, theNominating & Compensation Committee will consider an appropriate person from the membersof the Board of Directors and/or any qualified candidates propose to the Board of Directors forreplacement.

Roles and Responsibilities of the Nominating & Compensation Committee1. Recruit, select, and nominate appropriate candidates for independent directors,

Chairman of the Boards and Board members proposed to the Board of Directors forconsideration and/or further approval of the shareholders when those positions arevacant due to termination of terms or other reasons;


2. Recruit, select, and nominate appropriate candidates for members of the Committees,Executive Chairman, top management and a Company Secretary proposed to the Boardof Directors for consideration when such position is vacant as well as propose criteria formanagement succession plan;

3. Propose remuneration policy, guidelines in paying out compensation and otherbenefits for the Board of Directors, Committees, Executive Chairman and topmanagement of which are appropriate for each personûs responsibilities andconsistent with the Companyûs performance and market conditions;

4. Evaluate Companyûs performance for consideration of the annual bonus and merit in-crease;

5. Review the Companyûs salary structure and other benefits.

6) Risk Management Committee as of December 31, 2008 consists of 5 members:1. Mr. Pairote Varophas Chairman of the Risk Management Committee2. Mr. Prasitchai Veerayuttwilai Member3. Mr. Pornchai Krivichian Member4. Mr. Apichat Sirisalipochana Member5. Mr. Thanin Tankittibutr Member

Terms of positionsTerm of members of the Risk Management Committee is one year. The Nominating &

Compensation Committee will annually consider and select appropriate persons from themembers of the Board of Directors and the Management and/or any qualified candidatespropose for further consideration and approval of the Board of Directors for the appointmentin its first meeting after the Annual General Meeting of Shareholders. However, the retiredmembers are eligible to be re-elected for another term. The nominated committeeûs memberwill appoint the Chairman of Risk Management Committee from the committeeûs members.

Roles and Responsibilities of the Risk Management Committee1. Establish clear business objectives, identify, analyze, assess significant risks and

formulate risk strategies;2. Develop risk management standards and practices in the areas for which they are

accountable;3. Ensure that these practices are fully communicated to and have active support of all

employees;4. Ensure that the management has regularly, continually and systematically identify and

analyze risk exposures, which may have, to cover all processes of the business;




5. Support and develop to have the management and all employees to continually awareof risk management as well as to ensure the Companyûs Risk Management Policy iscomplied to the international standard.

Management of the Company as of December 31, 2008 consists of 5 members1. Mr. Watchai Vilailuck Executive Chairman / Chief Executive Officer2. Mr. Pairote Varophas Executive Vice Chairman /

Acting Chief Operating Officer3. Mr. Prasitchai Veerayuttwilai Executive Vice President Network Services,

ICT Outsourcing Services and IP Business4. Mr. Pornchai Krivichian Vice President Network Services and System

Integration5. Mr. Apichat Sirisalipochana Vice President Network Services and Innovation

Business Application Solution & Services

Roles and Responsibilities of Executive Chairman1. General operation management and control in business of the Company to comply with

its objectives, policy and the Articles of Association;2. Consideration in business investment plans prior to propose for the Executive Board

and the Board of Directors for further approval;3. Entering into any transaction biding the Company conforming with the Companyûs

Delegation of Authorities;4. Carry out any assignment from the Board of Directors and/or the Shareholders of the

Company.

The delegation authorities of the Executive Chairman should not be delegated or furtherassigned that authorize the Executive Chairman or its attorney to approve any connectedtransactions between themselves or any persons who may have conflict of interest (accordingto the concept of conflict of interest of the Securities Exchange Commissionûs notification)with the Company or subsidiaries except such transactions are handled in line with theconnected transaction procedure or policy which been approved by the Board of Directorsof the Company shareholdersû meeting to be complied to regulations of SET/ SEC or anyrelated laws and regulations.


2. Nomination of Directors and ManagementsThe Nominating & Compensation Committee has been appointed by the Board of

Directors in order to select, and nominate appropriate candidates for positions of Chairman

of the Boards, members of the Boards and other committees, Executive Chairman, other

Executives and Company Secretary as well as consider the appropriate remuneration for such

directors and management. Whenever the position of directors are vacant, the Nominating &

Compensation Committee will select and nominate the appropriate candidates for such

position propose to the Board of Directors for approval and for further approval of the

shareholders in case of vacancy by rotation or appointing of new director. The elected directors

should obtain majority vote from shareholders who attend the meeting and have voting right.

Each shareholder shall have one vote on each share. In voting, a shareholder shall vote in

accordance with the number of votes each shareholder has for one or several directors. The

said shareholder may not allot any number of his/her votes to any person. For election of

independent directors, the Nominating & Compensation Committee will nominate any person

who is fully complied with the qualifications of Independent Directors under the Companyûs

policy as well as complying to such requirements of SEC/SET as a minimum. Moreover, theBoard of Directors of the Company has also appointed other committees to help the Board

on its business either audit or consideration any significant matters. Such Committees are

Executive Board, Audit Committee, Risk Management Committee, Corporate Governance

Committee and Nominating & Compensation Committee. The nomination of members of the

committee will be selected and nominated by the Nominating & Compensation Committee prior

to propose for consideration of the Board of Directors of the Company.

Executive Succession Plan

The Company is aware of the importance of executive succession plan when any

executive position is vacant. In order to create confidence for investors, shareholders and

employees on the continuity operation of the Company, an Executive Succession Plan has

been considered. The potential candidate will be selected, trained and developed to be ready

to accommodate the vacant position in the future.




3. Remuneration of Directors and ManagementsDirectorsû Remuneration

Policy of Directorsû Remuneration have been clearly and transparently set to be

comparable to the general practice in same industry and be appealing enough to attract and

retain qualified directors. The directors who also be appointed to be the member of any sub

Committees will be paid appropriately more in accordance with the extra work. The Nominating

& Compensation Committee will consider the remuneration and propose for consideration of

the Board of Directors prior to further approval from the shareholders. The Shareholders in the

Annual General Meeting 2008 approved remuneration for Directors of the Company and

Committeesû members at the amount of not exceeding Baht 5 million. Details of remuneration

are as follows:

Board of Directors

- Chairman Baht 30,000 per meeting

- Director Baht 15,000 per meeting

Audit Committee



Corporate Governance Committee



Nominating & Compensation Committee



Managementsû Remuneration

Remuneration for the managements will be determined in accordance with the principles

and policy set by the Nominating & Compensation Committee which be related to the

performances of the Company and each management. Total remuneration paid to Director

and Managements in 2008 were as follows:


1. Cash & Non-Cash Remuneration of Directors and Committeesû members of 2008

Meeting Allowance (Baht)

DirectorsBoard of Audit Corporate Nominating &

PerformanceTotal Amount

Directors(1) Committee Governance CompensationBonus

(Baht)

Committee Committee(Baht)

1. Mr. Sombut Uthaisang (2) (3)

Chairman 120,000 - 30,000 - 150,000 300,0002. General Sumpun Boonyanun (4)

Director / Independent Director 60,000 135,000 20,000 15,000 - 230,0003. Miss Rapeepan Luangaramrut (4)

Director / Independent Director 60,000 75,000 20,000 - - 155,0004. Mr. Narongchai Satanupong

Director / Independent Director 105,000 120,000 10,000 20,000 150,000 405,0005. Mr. Kajornvut Tayanukorn

Director 105,000 - - 10,000 150,000 265,0006. Mr. Charoenrath Vilailuck

Director 90,000 - - - 150,000 240,0007. Mr. Watchai Vilailuck

Director 105,000 - - - 150,000 255,0008. Mr. Sirichai Rasameechan

Director 105,000 - - - 150,000 255,0009. Mr. Pairote Varophas 105,000 - 20,000 - 150,000 275,000

Director10. Mr. Pradang Prichayangkun (5)

Director / Independent Director 90,000 90,000 10,000 10,000 200,000 400,00011. Mr. Aran Promrata (5)

Director / Independent Director 45,000 45,000 - - 150,000 240,00012. Mr. Seri Suksathaporn (6) - - - 30,000 150,000 180,000

Chairman of the Nominating &Compensation Committee

Total 990,000 465,000 110,000 85,000 1,550,000 3,200,000

Remark : (1) The 2008 meeting allowance are for 7 meetings of the Board of Directors.(2) In 2007, Mr. Sombut Uthaisang was a Chairman of the Corporate Governance Committee and has resigned from the position

on December 15th, 2007, thus he was considered any performance bonus for the operation of 2007 as Committeeûs memberis in line with the performance policy of the Company.

(3) Mr. Sombut Uthaisang is a Chairman of the Board of Director on April 25th, 2008, and has been re-elected as a Chairmanof the Corporate Governance Committee on May 14th, 2008.

(4) General Sumpun Boonyanun and Miss Rapeepan Luangaramrut as the Directors of the Company on April 25th, 2008, thushe was not considered any performance bonus for the operation of 2007.

(5) Mr. Pradang Prichayangkun and Mr. Aran Promrata have resigned from Directors of the Company since April 25th, 2008.(6) Mr. Seri Suksathaporn has resigned from the Chairman of Nominating & Compensation Committee since May 14th, 2008.

In 2008, he received meeting allowance for a meeting of the Nominating & Compensation Committee and a meeting ofthe Board of Directors.




2. Cash & Non-Cash Remuneration of the Executive Board and Managements of 2008

Remuneration Number of Persons Total Amount (Baht)Salary 5 13,722,000Bonus 5 1,123,750Provident Fund 5 862,440

Total 5 15,708,190

4. Inside InformationThe Company will inspect to unsure no inside information of which is material, undis-

closed and confidential leak to public or be used from unauthorized for personal benefit. ITsystem has been implemented for a secure access for all users inside and outside the firewallin conjunction with the Companyûs own user authentication and security system. It was alsoset forth in the Companyûs Business Ethics refuse the directors, management and employeesof the Company to use Companyûs inside information for personal benefits. Any trading ofSamart Groupûs securities within one month prior to disclosure of either Companyûs financialperformance or any other information that may affect securitiesû price is prohibited.

The Directors and management of the Company had been informed on their duties andpunishment regarding to report on securities holdings of themselves, their spouse and anyminor children to the Stock Exchange of Thailand (SET) within 3 days from the transaction dateaccording to the Securities and Exchange Act B.E. 2535. The Directors and management haveto report such information to the Company Secretary for further handling and report to SEC. Inaddition, the Company has set as a policy to report on securities holdings of Directors andExecutive Managements in every meeting of the Board of Directors and disclosed on theCompanyûs website.

Moreover, the Corporate Governance Committee has been established to ensure thatgood corporate governance is being conducted continuity at all levels in accordance to legalrequirement and the Companyûs Articles of Associations.

5. Human Resource

CompanyNumber of Employees (Person)

2006 2007 20081. Samart Telcoms PCL. 141 241 2592. Samart Communication Services Co., Ltd. 334 325 3053. Samart Comtech Co., Ltd. 208 163 1934. Thai Trade Net Co., Ltd. 33 43 335. Posnet Co., Ltd. 132 123 1056. Oasis Consulting Co., Ltd. - 43 487. Smartherware Co., Ltd. - 24 238. Samart Infonet Co., Ltd. - 41 75

Total 848 1,003 1,041


Expenses related to the employees of the Company and subsidiaries for the pass 3 yearsof which comprised salary, bonus and provident fund were :

Remuneration Total Amount (Million Baht)

2006 2007 2008Salary 238.60 284.10 308.62Bonus 23.19 22.21 14.42Provident Fund 8.21 9.34 10.56

Total 270.00 315.65 333.60

Human Resource Development PolicyAs a fast growing entity, top managements of Samart Group strongly believe that

the human resources are the most important for driving business. Eventually, consistentdevelopment of human resources has been the key task for human resource division inorder to lay down the foundation new generation of Samart Group. There are number ofhuman resources projects that are undertaken each year such as Operation Excellent Program,Modern Supervisory Program and other projects in 2008. These projects aim to upgradeskills and develop new and middle management to support current business and businessgrowth in the future.1. Human Resource Development Policy

Besides In-house training, External training and E-learning for human resourcedevelopment are undertaken in Samart Group. In addition, there are other kind ofactivities for developing current capability and career development to support businessgrowth and competitive advantage.

Manage the training for learning and people development at all levels. That canbe carried out by not being in the class such as site visiting, Job Rotation, Mentoring,etc. Samart Group has developed these systems constantly to help encourage theemployeesû learning and be able to support business contribution.

2. Career Development ProjectIn 2006, Samart Group had established Career Development Project to create

moral spirit, motivate performance and create opportunity for career development.Competency Assessment System for evaluating individual competency covered on theknowledge, skills and personal characteristics/attributes to determine the direction ofthe capability development to each career which for the individual development inthe area of strength development and weakness improvement. The employees whocompleted the competency assessment would get individual development plan whichis the guideline for career development. The competency information isnût only theguideline for individual development, but itûs also benefit current workforce planningand business growth preparation.




3. Developing Management Tools PolicyHuman Resource Development is important for Samart Group. Company have

undertaken Human Resource Development Project since 2003 to 2006. It includedHR centralized database system and developing the information system and theapplication to support Human Resources Management such as Human ResourceApplication for self service in personal information, training record, health pay, etc.,Performance Management Online which the application to support performancemanagement system, Application for E-learning. And in 2006-2007, there wasCompetency Assessment which was the application for support Career DevelopmentProject. As a result, there are more applications to support human resource managementand strategic business planning.

In the year 2008 has conducted Competency Model, Competency Assessmentto management levels and operating levels in order to fully support Career DevelopmentPlan Project .Including developing skills in English to builds on the system and continuityin the project.

4. Relationship Development PolicyThe good working environment is important for team work, creativity and

ultimately the good performance and business contribution. Company support ouremployeesû engagement in important religious events and social contribution activities.There are some activities that Samart Group has undertaken such as the, the sportsactivities to enhance good relation between departments which would help internalcooperation. There are also variety of welfare and some projects for health carecontribution. It also includes projects for health benefits towards contributing goodhealth to all employees of Samart Group. We belive for the fact that sound mind liesin a sound body. Healthy and motivated employees are the key assets towardscontributing superior business performance.

6. Internal Control System(See details in the ç5.7 Internal Control and Internal Audité)

7. Dividend PolicyOn dividend payment, the Company has policy to pay dividend to the shareholders of not

less than 50% of its consolidated net profit after deduction of all reserves as stated in theCompanyûs Articles of Association and related laws, subject to need for future investment andbusiness plan, future necessity and appropriation. The Companyûs subsidiary and associatedcompanies have policy to pay dividend no less than 50% of their net profit after deductionof all reserves as stated in the Companyûs Articles of Association and related laws, andconsideration of companayûs financial position.


Before the Meeting Date

In the Annual General Meeting of Shareholders 2008, the shareholders have been

informed on the date and agenda of the meeting via SETûs communication system 41

days prior to the meeting date. At the same time, the Company also disclosed the

invitation letter as well as related documents in both languages, Thai and English, on the

Companyûs website 31 days before meeting date for the shareholders to have sufficient

time for consideration. Same documents will be directly delivered to the shareholders by

TSD, the Companyûs registrar, within 15 days before the meeting date of which better

than what has been required by law. The invitation letter contained fact, rationale,

opinions from the Board of Directors for each agenda, conditions and procedures of

meeting, annual report, proxy form and any other related document with sufficient

information for shareholdersû consideration. Moreover, the invitation letter has also been

3 days continually published on the newspaper 8 days prior to the meeting date to be

in line with law.

On the Meeting Date

Meeting procedures has been set to conform to regulations and considering onshareholdersû convenience. The Company is aware of the equitable of shareholdersû right

and their comfort to participate in the shareholdersû meeting. Appropriated technology

and equipments are sufficient for registration reviewed on required documents more than

one hour prior to commencement of the meeting.

In the Annual General Meeting of Shareholders 2008, there were all directors

participated the meeting. Chairman of all committees including the Audit Committee

and the Companyûs managements and external auditors also presented in the meeting.

Chairman of the Board of Directors who was Chairman of the meeting introduced all

Board members and the managements to the shareholders, declared to the meeting that

there were 40 shareholders with voting rights attended the meeting for the Annual

General Meeting of Shareholders 2008. The Chairman had declared to the shareholders

how to exercise their right and vote before commencement conducted the meeting to be

in line with the agenda without any additional topic from what have been expressed in

the invitation letter. Voting cards were provided for significant agenda. Voting result in

term of approval, disapproval or abstain for each agenda were transparently presented to

the meeting. The shareholders were encouraged to express their opinions and raise

any questions, either in the agenda or any other questions related to the Companyûs

business, at the meeting. All questions had been answered and taken in the minutes of

meeting as well as the opinions from the shareholders.




After the Shareholdersû Meeting

Resolutions of the meeting were disclosed to SET with voting details, approved,

disapproved and sustained, of each agenda on the next day after the meeting date. Full

minutes of meeting of which contained the attendance record of the directors, summary

of questions and answers during the meeting in both Thai & English had been sent to

SET and related parties within 14 days after the meeting date as well as posted on the

Companyûs website (www.samtel.com) for verification.

ë Appointment / Dismission of Directors of the Company and Approve their

Remuneration

According to the Companyûs Articles of Association, at the Annual General

Meeting of Shareholders, one third (1/3) of the Directors has to be retired by rotation.

Election for replacement is required. The retired directors are eligible to be re-elected for

another term.

The election of the Board of Directors shall be in accordance with the rules and

procedures as follows:

- Each shareholder shall have one vote on each share.

- In voting, a shareholder shall vote in accordance with the number of votes each

shareholder has under (1) for one or several directors. The said shareholder may

not allot any number of his votes to any person.

- The person obtaining the highest and higher votes respectively shall be elected as

directors equal to the number of directors required or ought to be elected at such

a meeting. In the event that persons receiving votes in respective orders receive

equal votes and the number of directors exceeds the positions required or ought

to be, the chairman of the meeting shall have a casting vote.

Apart from the appointment of Directors, the shareholders also have rights to

remove any director from the office before the expiration of his term of office by having

votes of not less than three quarters (3/4) of the number of shareholders attending the

meeting and having the rights to vote and the aggregate number of shares shall be not

less than one half (1/2) of the shares held by all the shareholders attending the meeting

and having the rights to vote.

In every Annual General Meeting of Shareholders, the shareholders have the rights

to consider and approve the remuneration for all directors and members of committees.

Adequate Information of all candidates for being considered and appointed as directors

or members of committees was also delivered for shareholdersû consideration.


ë Appointment of Auditors and approval of their remuneration

In every Annual General Meeting of Shareholders, one of the agenda is the

appointment of Companyûs auditors and consideration of their remuneration. The

Company will propose name of the auditors with sufficient details and remuneration for

consideration of the shareholders.

ë Regularly and timely obtained adequate information, business performance and

management policy

The Company concerns on Shareholdersû rights and not only disclosed

Companyûs information via SETûs communication system but also posted all significant

and updated information on the Companyûs website (www.samtel.com).

ë Getting profit

The Company pays back to shareholders in the form of dividends. The Company

has the policy to disburse dividends above 50% of net profit after required reserves.

In the 2008 Annual General Meeting of Shareholders, the disbursement of dividend

for operating results of 2007 was approved for baht 0.10 per share of which equivalent

to 56% of net profit after required reserves in compliance with the dividend

disbursement policy as stated above. In addition, the Board of Directors in its meeting

No. 2/2009 held on March 19th, 2009 has considered to pay dividend for operating

results of 2008 at baht 0.10 per share of which equivalent to 55.17% of net profit after

required reserves for further approval of the Annual General Meeting of Shareholders

2009 that will be held on April 27th, 2009.

2. Equitable Treatment of Shareholders

The Company realizes to protect and due care for the interests of all major and minor

shareholders as fairly basis. In addition, the Company sets policy for equitably treatment to

all shareholders for attending and vote in the shareholdersû meetings, sharing in profits,

regularly and timely obtained adequate information, business performance and management

policy. In the shareholdersû meeting, each shareholder shall have one vote on each share. Proxy

form requiring documents were delivered together with the invitation letter for shareholders

who would like to appoint a proxy. Proxy form, which contains detail of voting as approve,

disapprove or abstain, as well as details of 3 independent directors also are attached for

shareholders consideration as alternative proxy. In addition, voting cards were provided for

each agenda, especially, the agenda of appointment of directors of which been appointed

by individual. In every shareholdersû meeting, the meetings were conducted to be in line with

the agenda without any additional topic from what have been expressed in the invitation




letter otherwise rights of the shareholders who could not participate in the meeting by

themselves will be deprived.

The Company will inspect to ensure no inside information of which is material,

undisclosed and confidential leak to public or be used from unauthorized for personal benefit.

IT system has been implemented for a secure access for all users inside and outside the

firewall in conjunction with the Companyûs own user authentication and security system. It

was also set forth in the Companyûs Corporate Governance Policy to refuse directors,

management and employees of the Company to use Companyûs inside information for

personal benefits. Any trading of Samart Groupûs securities within 1 month prior to disclosure

of either Companyûs financial performance or any other information that may affect securitiesû

price is prohibited. The Directors and management of the Company had been informed on

their duties and punishment regarding to report on securities holdings of themselves, their

spouse and any minor children to the Stock Exchange of Thailand (SET) within 3 days from

the transaction date according to the Securities and Exchange Act B.E. 2535. Any change in

securities holdings, such directors and managements have to report the Company Secretary

for coordination and preparing report submit to the Securities and Exchange Commission(SEC). In addition, the Company has set as a policy to report on securities holdings of directors

and managements in every meeting of the Board of Directors.

In case of conflict of interest, it is the Companyûs Policy to have the directors,

management, employees and related parties to disclose such interests to the Audit Committee

for consideration of the transaction to be complied to SETûs regulations and any governing

laws and regulations prior to further submit for consideration of either the Board of Directors or

the shareholders. The directors who have conflict of interest will not participate in any agenda

that they have conflict of interest. Moreover, any conflict of interest transactions with the

connected persons will be disclosed in the Companyûs Annual Report (56-2) and the Annual

Information Disclosure (56-1) under çThe Connected Transactionsé.

General practices for conflict of interest protection have been set not only in the

Companyûs Business Ethics but also in the Roles and Responsibilities of the Board of

Directors under çThe Conflict of Interesté. Such practices have been delivered to all directors,

management and employees. The Corporate Governance Committee will monitor and ensure

that Companyûs regulations, Corporate Governance Policy and Business Ethics have been

strictly and continually complied.

3. Attention to Stakeholders

The Company is aware of the support from each stakeholder should increase the

competitiveness and ability to generate more benefit for long-term succession and realized


the importance of all stakeholders i.e. shareholders, employees of the Company and its

subsidiaries, customers, competitors, lenders, societies and environment. Thus, general rules

and practices have been set for directors, management and employees in the Companyûs

Business Ethics to cover rights and equitable benefits to all stakeholders and posted on the

Companyûs website (www.samtel.com) which be summarized as follows:Shareholders : The Company aware of its role to protect and due care for the interests of all

major and minor shareholders by granting rights to every shareholders toattend, vote and have comments in the shareholdersû meeting, to share inprofits, to propose agenda of the Shareholdersû Meeting, regularly and timelyobtained adequate information, business performance and management policy.Details of shareholdersû rights are descried under çRights of Shareholdersé.

Employees : The Company highly regards all of the employees as valuable resources andis a major factor to drive the business performance to achieve its goals. As aresult, it is the Companyûs policy to treat employees fairly in all respects,employment opportunity, reasonable remuneration, promotion, welfare i.e. life& health insurance, annual check up, provident fund, loan for employees,buses service, fitness center and special discount for companyûs productsetc. Development programs, both internal and external training courses, arecontinually provided for all levels of employees. Moreover, scholarships havebeen provided for improving skills and knowledge of employees. TheCompany has to ensure that working environment will have no harm toemployeesû lives and properties. Security equipments and fire drill have beenprovided and governed by Risks Management team to strictly conform tothe Companyûs Security Policy.

Customers : The Company strongly believes in building confidence and bring satisfactionto all of the customers who are very important to the Company by providingmodern and high-quality products and services at reasonable price forcustomersû satisfaction and needs. In 2008, new products and services havebeen developed by the Company and subsidiaries i.e. ;- The Company developed the Live Broadcast for Remote Learning Video

Conferencing with the upgrading to be compatible with High Definition orFull HD;

- Smarterware Co., Ltd., operate businesses provides software developmentconsulting service, has been certified Capability Maturity Model IntegrationLevel 3, widely accepted in the software industry worldwide. In addition,the Companyûs Management was certified for the ICT service operations(ITIL - Information Technology Infrastructure Library) Version 3;




- Samart Infonet Co., Ltd. is a Internet provider imported and tested newtechnologies for internet products and services which help stabilize Internetusage and reduce costs, such as data compression and security.

Trade partners :The Company has the policy to equitably and fairly treat its trade partners bytaking into consideration of the Companyûs interest and on mutual benefitsbasis. Clearly define in evaluation and selection of trade partners as well asdeveloping and maintaining good relationship between all partners with trustand confidence.

Creditors : The Company is conform to its Principle of Business Operation in order to therespect and admission of the Creditors and strictly complied with all the termsand conditions agreed upon in a transaction. In the event that any particularcondition could not be met, the Company will prior inform the Creditors andseeking mutual accepted solution.

Competitors : The Company conducts all business affairs under just rules and competitionswithout fraudulently or inappropriately seeking confidential information of itscompetitors, or damage competitors reputation by abusive accusation.

Societies : The Company recognizes that it can survive and grow in a society that isvigorous and prosperous. Therefore to bring about societal progress theCompany participated in societal improvements with financial support to allactivities that aim to maintain beneficial cultures, customs and rituals.Moreover, the Company will involve in religious activities regularly. TheCompany also participated in many activities for development of social,education, vocation, athletic ability as well as sanction for outreach peopleand victims. In 2008, many projects have been created i.e. ;ë Cooperated with Office of the Permanent Secretary and Office of the

Basic Education Commission to enhance educational quality throughcommunication technology. This collaboration is hoped to develop theexisting e-Learning into interactive e-Learning or I-Learning;

ë The company welcomes visitors to the Data Center of the Company forstudents. To provide educational and instructional services on suchinformation technologies as e-Learning and Data Centerûs security;

ë Taked part in the project initiated by the Provincial Electricity Authority(PEA) by donating computers and granting of scholarship to needystudents in remote areas;

ë Donated to remote schools for the construction of buildings.ë Co-operation for the Translation of çA Brief History of Communicationsé to

celebrate the 30th anniversary of IEEE Thailand Section. This translated


version will be delivered to school and university libraries throughoutThailand;

ë Provide sponsorship to Ramkhamhaeng University for the international

conference on çLanguage in a global culture: Bride or Barrieré;

ë Provide sponsorship to Ramkhamhaeng University for the 36th Thailand

University Games;

ë Offered Samart WIP, the international calling card to tourists and travelers

stuck in the Suvarnabhumi Airport to stay connected with their families or

to arrange the flights to their destinations.

All details described under section çSocial Activitiesé.

Environment : The Company conducts business with recognition of environmental

conservation and standard management of safety. It is also the Companyûs

policy to become a responsible corporate citizen to comply with all relevant

laws and regulations and be responsible for utilizing natural resources in

prudent manners. For motivation of the employees to continually conform tothe Companyûs policy, announcement via Companyûs PR boards, e-mail and

internal radio are provided. In 2008, Samart Group created many activities to

encourage people for concerning and having good environment have been

created, i.e. Afforestation in Samutsongkram, ext.

In addition, the Board of Directors are respect the importance of all stakeholders

in participation of the Companyûs success, thus feed back channels for all

stakeholders to return their complaints, comments or recommendations are

provided for improvement. Those channels consist of direct mail to the

following address, via Companyûs website at www.samtel.com under

çContact Usé.

Mailing Address : Secretary to the Audit Committee

Samart Telcoms Public Co., Ltd.

99/7 Moo 4, Software Park, 29th Fl.,

Chaengwattana Rd., Klong Gluar, Park-kred,

Nonthaburi 11120

Or send E-mail address : [email protected]




The Audit Committee Secretary will collect the information, and proposes the Audit

Committee to consider and summarize for further report to the Board of Directors. In addition,

the Company has the policy to defend the appellant by keeping appellantsû information as

secret.

4. Disclosure and Transparency

The Company has strong determination to reveal accurate complete, consistent and

updated information, both financial and general information that related to Companyûs business.

The Complete, consistent and updated information will truly reflect Companyûs financial

performance and future business direction. Such information were disclosed to shareholders,

investors and any related parties via SETûs Communication system, Companyûs website

(www.samtel.com), press release and Companyûs Annual Report as well as participated in the

çOpportunity Dayé which arranged by SET.

The Board of Directors has to ensure that the Companyûs disclosures are transparency

and strictly complied by laws, Companyûs and any related regulations. The Company has never

been notified any offense by SEC/SET on such matter. The Board has Major concerned on

transparency and disclosure in the following area:

4.1) Provide multi channels for disclosure of information apart from SETûs communica-

tion system

Annual Report and Form 56-1

The Board of Directors has to ensure that Annual Report / Form 56-1 contained

adequate information with accuracy, clarity and could create understanding to the

shareholders and related parties on the Companyûs operation and its performance for

the previous year as well as the management structure, performance of the Board of

Directors and all Committees.

Companyûs website

The Board of Directors is aware of the efficiency of website disclosure to the

shareholders and related persons as well as equitably and easily of getting information.

The Board of Directors therefore ensure the Company not only provide all significant

information of the Company in the Companyûs Annual report but also on the Companyûs

website (www.samtel.com) in both languages, Thai and English. The disclosed

information comprised of Corporate Governance Policy, Business Ethics, General News,

Financial Statement as well as Annual Report and the Annual Disclosure Information

(56-1), etc.


Investors RelationThe Company has also set up an Investors Relation section to provide Companyûs

information and activities for investors, shareholders, analysis and general public viaCompanyûs website, Road Shows, analysis meetings and conference calls etc. TheCompanyûs Investor Relations could be contacted at phone number 0-2502-8090 orsending your question via the companyûs website at www.samtel.com or sending thee-mail to [email protected].

In addition to above, the announcement on the Companyûs financial performancehave been arranged for public, investors and analysis by quarterly basis withparticipation of the executives.

Meetings with investors and analysis in 2008 were summarized as follows:- Analysis Meeting 8 Times- Announcement of Companyûs Performance 2 Times

4.2) Disclosure of Information of the Board of Directors and Sub Committees- Structure, Roles and Responsibilities of the Board as well as performance of the

Board and each Committee;- Directors and Managementûs Remunerations: Policy of Directorsû Remuneration

have been clearly and transparently set to be comparable to the general practicein same industry and be appealing enough to attract and retain qualified directors.The directors who also be appointed to be the member of any sub Committeeswill be paid appropriately more in accordance with the extra work. The Nominating& Compensation Committee will consider the remuneration and propose forconsideration of the Board of Directors prior to further approval from theshareholders.

The remuneration of the Board of Directors and the Managements has beendisclosed in the Companyûs Annual Report and the Annual Information Disclosure (56-1)under çThe Managementé.

4.3) Accountability to the Financial StatementThe Board of Directors is responsible for the Companyûs consolidated financial

statements and any financial information which been disclosed in the Companyûs annualreport. Such financial statements were prepared in accordance with the generalacceptance-accounting standard in Thailand with appropriated financial policy. Thereports were carefully considered and prepared with sufficient information in the notesto the financial statements. The financial statements have been audited and commentedindependently by the authorized auditors of SEC.




The Board of Directors also set out and maintained for the efficiency of theCompanyûs internal control system to ensure that the financial information had beencorrectly and accurately booked and sufficient to maintain the Companyûs assets andbe aware of weak point in order to prevent whether from any dishonesty or significanterror. The Board of Directors had appointed the Audit Committee of which comprisedindependent directors to be responsible for the quality of the financial statements andthe internal control system and disclosed such opinion in the Annual Report under theReport of the Audit Committee. The opinion of the Audit Committee has already beendisclosed in the annual report. Moreover, Report of the Board of Directorsû responsibilityon the Companyûs Financial Statements was also attached in the Companyûs AnnualReport.

5. Role and Responsibilities of the Board

5.1) Directorsû QualificationsThe Board consists of directors who have various knowledge, experience, and

specific skill that suitable and benefit to the Company. The Board will also have leader-ship and vision to carry on the Companyûs business and achieve its objectives. TheCompany has 9 directors who complied with the qualification that been described in theCompanyûs çDirectorsû Qualificationsé. All of the Directors have contributed their best tothe Company which may concern from their participation in the meeting that beendescribed under the çBoard of Directorsû Meetingé.

5.2) The Independent of the Board of Directorsë Separation of Executive Chairman and Chairman

For best benefit of the shareholders and to strike a balance of power withinthe Company, the positions of Chairman of the Board of Directors and ExecutiveChairman must not be attained by the same person. The Companyûs Chairman ofthe Board of Directors not being an Executive Director and has no businessrelation with any management of the Company. Moreover, he is also the Chairmanof the Corporate Governance Committee.

ë Balance of PowerThe Board of Directors of the Company comprised of 9 members with

various qualifications, skills, experience and expertise. Composition of themembers is as follow:

3 Independent Directors (equal one-third of the Board of Directors)4 Executive Directors2 Non-Executive Directors


The shareholders could have confidence that the directors as representa-tives of the shareholders could perform their duty without any influence or controlby management of the Company by the above structure

ë Separate Roles and Responsibilities of the Board of Directors and ExecutiveChairman

The Company has clearly set the separate roles and responsibilities of theBoard of Directors and Executive Chairman. The Board of Directors will focus andensure that the Companyûs business will achieve its target and in the direction thatcreate value and best benefit to the shareholders as well as all stakeholders. Anyconflict of interest with the Company and its subsidiaries will be prohibited. Theyhave to operate the business with accountability, duty of care, duty of loyalty andalso comply with the Companyûs Ethics to ensure all Companyûs businesses arerun under Companyûs objectives, Articles of Association, resolutions of the Boardof Directors and shareholdersû meeting, laws and regulations of SEC/SET andother related laws. At the same time, Executive Chairman who is the managementûsleader will focus on general management of the Company. The details of Rolesand Responsibilities of the Board of Directors and Executive Chairman aredescribed under çManagement Structureé.

5.3) Being Director in other Listed CompaniesFor efficiency of being the director, the Board of Directors of the Company

has set the çPolicyé for all directors to be the director in any listed companies notexceeding 10 companies otherwise rationale and necessity have to be declared tothe Nominating & Compensation Committee for consideration of the efficiency ofhis/her duty prior to further consideration of the Board of Directors. Such informa-tion also has to be disclosed in the Companyûs Annual Report and the AnnualInformation Disclosure of SEC (56-1). However, there is not any of the existingdirectors of the Company is being the director in listed companies over than5 companies and also could participate and contribute to the Company withefficiency.

Moreover, the management of the Company will also be obtained approvalfrom the Executive Board prior to be a director in any companies of which are nothave either similar business or being the Companyûs competitors.

5.4) Transparency of NominationThe Board ensures the Company to provide transparency process of

nomination of directors and management of the Company of which the detailsare disclosed under çThe Nomination of Directors and the Managementé.




5.5) Board of Directorsû Activities during the year

5.5.1) Set Policy and Business Direction

ë VisionBe the leading ICT Solutions and Services provider that enhancess

corporate and business efficiency.

ë PhilosophyWe aspire to promote a SAMART TELCOMS group of

companies as a renowned and reliable ICT services provider of choice.

We are devoted to pursue and develop innovative solutions with

leading edge technologies to fulfill customersû requirements with

optimal efficiency to the future.

ë Missions- Focus on building the stabilized business to reward a sustainable

growth profit to shareholders;- Develop and create distinctive innovative products and solutions

by focusing on customersû benefits;- Improve the quality of services;- Build and maintain enduring relationships with key business alli-

ances based on mutual profitable growth and long-term prosperity;- Expand business opportunities to both local and international d

estinations;- Drive SAMART to be a professional workplace with bright career

growth (Institutionalize SAMART as a professional workforce tostrengthen the companyûs employment standpoints.

ë Corporate Governance PolicyThe Board of Directors is aware of the importance of Good

Corporate Governance. Therefore, the written Policy of CorporateGovernance have been set and approved by the Board since 2005to create more transparency, competitiveness and strengthen theconfidence of all shareholders, investors and other related partieswhich been disclosed on the Companyûs website. Internal auditand Internal control system have been emphasized to monitor themanagement to follow the Companyûs policy with more efficiency inorder to increase long-term benefit to the shareholder under the lawand business ethics. The Corporate Governance Committee will


monitor and have the employees to strictly comply with such policy.The Corporate Governance Policy will be annually reviewed andrevised to comply with new regulations. In 2008, the resolution of theBoard of Directors meeting on February 27th, 2008 approved the 3rd

revision of Corporate Governance Policy of the Company which isproposed by the Corporate Governance Committee to amend thepolicy for the whold part to be complied with the 2006 new GoodCorporate Governance of SET. In addition, to comply with theSecurities and Exchange Act (No.4) B.E. 2551 and new regulations ofSEC and SET concerning the independent directors and the AuditCommittee, the Corporate Governance Committee has resolved toamend the Companyûs CG Policy and further approval to the Board ofDirectors meeting on February 26th, 2009, that is the 4th revision anddisclosed on the Companyûs website.

ë Business EthicsThe Company is conducting the business with great awareness

in ethical and moral issues. The Company distributed handbooks

concerning business ethics since 2005 in both language, Thai and

English and has also been posed on the Companyûs website for all

members of the Board of Directors, managerial team and our employ-

ees. The handbook serves as a guideline for everyone to continue his/

her duty with honesty, integrity, morality, and, of course, highest qual-

ity. It also reminds the Company to bring fair treatment in accordance

with legal restrictions, to maximize shareholder value, and to prevent

plausible conflicts of interest the business ethics will be revised from

time to time. In 2008, the resolution of the Board of Directors meeting

on February 27th, 2008 approved the 3rd revision of Business Ethics of

the Company which is proposed by the Corporate Governance

Committee to amend the policy for the whold part to be complied

with the 2006 new Good Corporate Governance of SET. In addition,

as the change of the Securities and Exchange Act (No.4) B.E. 2551

and new regulations of SEC and SET concerning the Independent

Directors and the Audit Committee, the Board of Directors meeting on

February 26th, 2009, in line with the Corporate Governance Committeeûs

recommendation, agreed that the existing edition of the Companyûs

Business Ethics to comply with the above regulations already.




The Companyûs Vision, Mission, CG Policy and Business Ethicshave been posted on the Companyûs website at www.samtel.comunder the governance of the Corporate Governance Committee tohave all employees to strictly conform and practice.

5.5.2) Leadership and Vision

The Board of Directors involved and agreed on set out the Companyûs

vision, mission, strategies, business plan and budget as well as to govern

the management to follow such business plan and budget with efficiency

and profitability for economic value to the Company and the best stability to

the shareholders. In addition to the above, the Board of Directors has not

only ensure the Company and its management to oversee the value of all

stakeholders, neither derive personal benefit nor create any rivalry with the

Company and its subsidiaries, but also conducted the business with great

awareness in ethical, moral and compliance to the Companyûs Articles of

Associations, Notifications of SEC/SET and other related laws and

regulations.

Internal Control system, internal audit as well as efficiency risk

management had been set by the Board of Directors. Monitoring and

evaluation were made by the Audit Committee and regularly reported to

the Board of Directors.

5.5.3) Set up of Committees

For governing the management to comply with the approved policies

and having better efficiency, the Board of Directors appointed the following

committees to help the Board for consideration in significant matters.

- Audit Committee

- Executive Board

- Corporate Governance Committee

- Nominating & Compensation Committee

- Risk Management Committee

Roles and responsibilities of each committee were disclosed under

section çManagement Structureé. In addition, Committeesû Charters have

also been set and disclosed on the Companyûs website (www.samtel.com).


5.5.4) Board & Committeesû Meeting

1) Board of Directorsû Meeting

The Board of Directorsû Meeting schedule have been set as

quarterly basis with certain agenda. The meeting schedule will be

sent to each director by the Company Secretary for preparation

and arrangement for meeting participation. However, additional

unscheduled Board meetings may be called upon appropriate notice

at any time to address specific needs of the Company. The operating

results will be regularly reviewed. The invitation letter as well as

meeting materials will be delivered by the Company Secretary to all

directors prior to the meeting date for consideration. The average

length of the meeting is approximately 2 hours. Details of directorsû

attendance for 2008, total 7 meetings, were as follow:

Term of Number of

DirectorsDirectorship Attendance/

(Year - month) Total Numberof Meeting

1. Mr. Sombut Uthaisang 0-8 4/7*

2. General Sumpun Boonyanun 0-8 4/7*

3. Miss Rapeepan Luangaramrut 0-8 4/7*

4. Mr. Narongchai Satanupong 5-8 7/7

5. Mr. Kajornvut Tayanukorn 4-8 7/7

6. Mr. Charoenrath Vilailuck 12-5 6/7**

7. Mr. Watchai Vilailuck 11-5 7/7

8. Mr. Sirichai Rasameechan 10-6 7/7

9. Mr. Pairote Varophas 5-6 7/7

Remark : * They are as the Companyûs Directors on April 25th, 2008, and theyparticipated four of seven meetings, because they as the Directorafter conducted 3 meetings;

** Went abroad for business trip.

2) Committee

All the Committee have regular meetings and reported to the

Board of Directors of the Company.




ë Audit Committee

In 2008, the committee conducted 8 meetings for considera-

tion of the followings:

DirectorsNumber of Attendance/Total Number of Meeting

1. General Sumpun Boonyanun 5/8*2. Miss Rapeepan Luangaramrut 5/8*3. Mr. Narongchai Satanupong 8/8

Remark : * They are as the Audit Committee member on April 25th, 2008,and they participated five of eight meetings, because they asthe Committee member after conducted 3 meetings.

ë Executive Board Committee

In 2008, the committee conducted 7 meetings for

consideration of the followings:


1. Mr. Watchai Vilailuck 7/72. Mr. Charoenrath Vilailuck 7/73. Mr. Sirichai Rasameechan 7/74. Mr. Pairote Varophas 7/7

ë Corporate Governance Committee




1. Mr. Sombut Uthaisang 2/3*2. General Sumpun Boonyanun 2/3*3. Miss Rapeepan Luangaramrut 2/3*4. Mr. Pairote Varophas 2/3*

Remark : * They are as the Corporate Governance Committee member onMay 14th, 2008, and they participated two of three meetings,because they as the Committee member after conducted ameeting.


ë Nominating & Compensation Committee



DirectorsNumber of Attendance/

Total Number of Meeting

1. General Sumpun Boonyanun 1/2*

2. Mr. Narongchai Satanupong 2/2

3. Mr. Kajornvut Tayanukorn 1/2*

Remark : * They are as the Nominating & Committee member on May 14th,2008, and they participated one of two meetings, because theyas the Committee member after conducted a meeting.

ë Risk Management Committee



DirectorsNumber of Attendance/

Total Number of Meeting

1. Mr. Pairote Varophas 5/5

2. Mr. Prasitchai Veerayuttwilai 5/5

3. Mr. Pornchai Krivichian 5/5

4. Mr. Apichat Sirisalipochana 5/5

5. Mr. Thanin Tankittibutr 5/5

5.6) Conflict of Interest

To prevent conflicts of interest, the Company has drawn out guidelines for

directors and employees to follow.

1. Avoid all actions that may cause conflicts of interest with the Company;

2. In case that directors or employees commit any action related to the

Company, the particular director and employee will be treated like an

outsider, and will play no part in decision-making process;

3. Refuse to use Companyûs information obtained in their posts for an

opportunity to derive personal benefits by creating rivalry with the

Company or involving in related businesses;

4. Refuse to use Companyûs information for securities purchase for personal

benefits or to leak Companyûs information to outsiders for their benefits;




5. Refuse to reveal Companyûs classified information (e.g. electronic informa-

tion, financial situation, workûs plans, business information and Companyûs

future plans) during and after their posts.

On any conflict of interest transaction, before entering into the transaction,

the Audit Committee will carefully review prior to submit with opinion either on

such conflict or connection to the Board of Directors for further review and to

ensure that the transaction has to be complied with SETûs regulations, information

of the transaction i.e. value of transaction, party involved and necessity ext. has

been disclosed in the Companyûs annual report, Form 56-1 and the auditorûs note

in the financial statement. Any consideration of the connected transaction, the

directors who may have conflict of interest will neither participate nor vote in such

meeting. Details of the transactions which may have any conflict of interest were

disclosed under the çConnected Transactionsé.

5.7) Internal Control and Internal Audit

In the Board of Directorsû Meeting No.1/2009 on February 26th, 2009 which

all the Audit Committee Members also attended, the meeting evaluated the

Companyûs internal control system from the report, which was prepared by the

management and the Audit Committee, on the following issues:

A) Organizational Control and Environment Measure

The Company has set its annual Strategic Implementation Plan (SIP)

by carefully reviewing and considering the possibility of the goal setting and

applied PM Online (Performance Management) to guide performance of all

staff toward the same direction, goal and using KPI as a tool to reward to

personnel. For business clearer and more efficiency, business structure

has been classified into 5 Business Groups. Moreover, the Company has

developed the Corporate Governance Policy and issue the Code of Conduct

Manual for Directors and Staff as the guidance to strictly adhere with

integrity and transparency.

B) Risk Assessment Measure

The Company has set up the Risk Management Committee and

applying Enterprise Risk Management (ERM) to assess business risks and

introduce preventive/corrective control measures to cope with such risks to

comply with new standard of risk management of COSO : The Committee of

Sponsoring Organization of the Tread way Commission


C) Management Control Activities

uthorization Manual and Workflow Procedures were clearly put in

pace and timely adjusted to corporate changes. The Executive Board,

Audit Committee, and the Board of Directors involved as deem appropriate

in all-important decisions concerning SET/SECûs regulations. Financial Unit,

Debt Management Units Legal Unit as well as Internal and External Audit

Units were put in place to supervise corporate activities to be performed

in accordance with applicable rules and laws.

D) Information and Communication Measure

COBIT (Control Objectives for Information and Related Technologies)

has been developed for the information technology system of the Company

to be in accordance with IT Governance as well as ITIL has been adopted

for the computer system to improve itself. Intelligent Data Center was

introduced to assist Management in their monitoring and analyzing data

i.e. finance, sales, etc. for decisive action. Establishing IT Consolidation

Center to support business changes. That is certified ISO 27001 : 2005 andCMMI (Capability Maturity Model Integration) Creating external data back

up and preparing site back up for all information system as well as

implementing the Human Resource information System.

E) Monitoring

The Executive Board was set up according to the companyûs

regulation to meetings were arranged to monitor and evaluate corporate

monthly performance. The annual audit plan was implemented by Internal

Audit Team to ensure the compliance of internal control system and

reported to respective

From the above evaluation, The Board of Directors agreed that the

Company has a sufficient internal control system. Moreover, the Companyûs

auditor, Ms. Saifon Inkaew, an auditor license no.4434 had audited the

Companyûs financial statement for period ending December 31, 2008

without any comment on the companyûs internal control system as

significant error.

5.8) Risk Management

In 2008 Company set up comprehensive Risk Management Policy to

mitigate any potential impact caused by economic and political changes and

global financial crisis. Policy also includes the criteria for risk prevention and

detection. The Risk Management Committee therefore complied with the policy




and implemented the risk prevention and mitigation measures in accordance with

the risk management plan with the collaboration of concerned department as

follows:

1. Preparation of risk management plan by each department to support the

Companyûs master business plan and to cope with business risks for the

Companyûs goal achievement;

2. Risk management will be carried according to the plan mentioned above.

Each responsible department has prioritized the risks by evaluating the

overall risk profile and its potential impact to the organization. The appropri-

ate risk mitigation criteria shall be determined in conjunction with each

department where as internal audit department undertaking role as risk

coordinator and reviewer;

3. Risk Management countermeasures shall be implemented and regularly

followed up by the Risk Management Committee comprising of each

concerning management in a quarterly meeting as outlined in the risk

management plan. All countermeasures shall be followed and reviewed byinternal audit department to ensure that the final outcome is agreeable with

the Companyûs proposed objectives.

Besides, the Company held risk management seminar and training for each

business. The risk management criteria ùs have been adapted as key factors in

performance evaluation of staffs. The training also focused on concepts and

principles of practicing on risk management through out the organization which

would contribute ensuring the sustainable growth of the Company as well as

create longterm value for stakeholders and shareholders.

5.9) Board Self Assessment

The Corporate Governance Committee has set the annually Board Self

Assessment. The Corporate Governance Committee has initiated the Self

Assessment form for Board members to review and evaluate their performance

for 2008 as a whole. The assessment from, which has been approved by the

Board of Directors in its meeting No. 7/2008 on December 9th, 2008, was sent to all

directors for assessment. The questionnaire covers the following area:

ë Board Composition

ë Strategic Guidance

ë Monitoring & Evaluationë Accountability


From the assessment for 2008 which been completed by the Boardmembers individually, the Company has an excellent evaluation by obtainingaverage score 97.14% for total area of assessment which is better than previousyear assessment that have average score 96.40%. This is to imply that our Boardof Directors has a continually enhancement in its efficiency which will reflect tothe success of the Company.

5.10) Development of Directors and ManagementsThe Company provides Directorsû Manual and orientation program to new

directors. Information on Companyûs business and Directions as well as CorporateGovernance Policy of the Company will be advised. In 2008, the new directors ofthe Company comprise of 3 directors, namely, Mr. Sombut Uthaisang, GeneralSumpun Boonyanun and Miss Rapeepan Luangaramrut.

In addition, to support and increase knowledgeable of the Directors,periodical training will be provided especially the Director Accreditation Program(DAP) and Director Certification Program (DCP) arranged by the Thai Institute ofDirectors (IOD). Summary of training course attendance for the Board of Directorsare as follows;

Directors Courses1. Mr. Sombut Uthaisang Director Accreditation Program (DAP)2. General Sumpun Boonyanun ë Director Accreditation Program (DAP)

ë Audit Committee Program (ACP)ë Role of Compensation Committee (RCC)

3. Miss Rapeepan Luangaramrut Director Certification Program (DCP)4. Mr. Narongchai Satanupong ë Director Certification Program (DCP)

ë Audit Committee Program (ACP)ë Role of Compensation Committee (RCC)

5. Mr. Kajornvut Tayanukorn Director Accreditation Program (DAP)6. Mr. Charoenrath Vilailuck Director Certification Program (DCP)

Director Accreditation Program (DAP)7. Mr. Watchai Vilailuck Director Accreditation Program (DAP)8. Mr. Sirichai Rasameechan ë Director Certification Program (DCP)

ë Finance for Non-Finance Director9. Mr. Pairote Varophas ë Director Certification Program (DCP)

ë Audit Committee Program (ACP)ë Improving the Quality of Financial Reportingë Chartered Director Classë Accounting Standard for Directorë Corporate Governance for Listed Company




5.11) Company SecretaryThe Nominating & Compensation Committee nominated appropriate a

potential and experienced person as the Company Secretary proposed forfurther approval of the Board of Directors. Roles and responsibilities of theCompany Secretary are as follows:1. Perform his/her duty with accountability, duty of care and duty of loyalty

as well as has to comply by laws and any other related regulation;2. Support the Board of Directors for their activities including provide

consultation with related to Companyûs Articles of Association, and anyother regulations from related authorities;

3. Arrange meetings for Board of Directors, Committees and Shareholdersas well as coordinate to ensure all resolutions have been implementedcomplying with Companyûs objectives, Articles of Association, laws andrelated regulations;

4. Prepare and keep the companyûs documents such as register of directors,notice calling directorsû and shareholdersû meetings as well as the minutesof such meetings and the annual report, etc.;

5. Keep a report on interest filed by a director and executive as well as submita copy of the report to the Chairmen of Board of Directors and AuditCommittee within 7 business days from the date on which the company hasreceived such report.

The Nominating & Compensation Committee shall select a new CompanySecretary to propose for consideration and approval of the Board of Directors toappoint the new Company Secretary within 90 days from the date on which theCompany Secretary has vacated her position or has been incapable of performingher duty, in this regards the Board of Director shall be empowered to assign anydirector to perform the duty as the substitutes during such period.


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other

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mart

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l.-

Exec

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ctor

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8-Pr

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mart

Corp

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mber

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ram (D

CP)

2005

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ent

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mart

I-Mob

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cl.-

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ogram

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tache

d)20

06-M

ay 2

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Vice

Chair

man

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Risk

Sama

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Mana

geme

nt Co

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mber

1993

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ent

Direc

torVil

ailuc

k Inte

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olding

Co.,

Ltd.

2005

-2006

Nomi

natin

g &

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ensa

tion

Sama

rt Co

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cl.Co

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e Mem

ber

2005

-2006

Nomi

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Sama

rt I-M

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Comm

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mart

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Comm

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2000

-Pres

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Exec

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Cha

irman

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amma

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hairm

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of S

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mber

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rtific

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anag

emen

t Prog

ram,

2003

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Exec

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Cha

irman

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rt I-M

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2005

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Name

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Age

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8.M

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Pcl.

Tham

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2005

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mart

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Traini

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CP)

2004

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2005

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2003

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9.M

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May 2

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2004

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Exec

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Cha

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nolog

y

Busin

ess G

roup

Pres

ident

Direc

torSu

bsidi

aries

and

Relat

ed C

ompa

nies

(as d

etails

in the

third

table

attac

hed)

IOD

= Th

ai Ins

titute

of Di

rector

s Ass

ociat

ion


3.Di

rect

ors

and

Exec

utiv

es in

Sub

sidi

arie

s an

d Re

late

d Co

mpa

nies

as

of D

ecem

ber 31

, 200

8

Co.,

Subs

idiar

iesRe

lated

Com

panie

s

12

34

56

78

910

1112

1314

1516

1718

1920

2122

2324

2526

2728

2930

3132

3334

3536

3738

Dire

ctor

s an

d Ex

ecut

ives

1.Mr

. Som

but

Utha

isang

x2.

Gene

ral S

umpu

nBo

onya

nun

/3.

Miss

Rap

eepa

nLu

anga

ramrut

/4.

Mr. N

arong

chai

Satan

upon

g/

5.Mr

. Kajo

rnvut

Taya

nuko

rn/

6.Mr

. Cha

roen

rath

Vilail

uck

//x

xx

xx

xx

x//

/x

xx

xx

xx

xx

xx

xx

x/

xx

x7.

Mr. W

atcha

iVil

ailuc

k/ /

//

//

//

/x

// /

/ //

x/

x/

/x

/x

xx

x/

//

//

//

//

//

8.Mr

. Siric

hai

Rasa

meec

han

/ //

//

//

/ //

//

//

//

//

//

//

/9.

Mr. P

airote

Varop

has

/ //

//

//

//

// /

//

//

10.

Mr. P

rasitc

hai

Veera

yuttw

ilai

#/

//

/11

.Mr

. Porn

chai

Krivi

chain

#/

/12

.Mr

. Apic

hat

Sirisa

lipoc

hna

#/

/

Rema

rk :

1)x

= Ch

airma

n, /

= D

irecto

r, /

/ = E

xecu

tive

Direc

tor,

# =

Man

agem

ent

2)Th

e Co

mpan

iesûs

name

1.ST

C=

Sama

rt Te

lcoms

Pcl.

2.SC

S=

Sama

rt Co

mmun

icatio

n Se

rvice

Co.,

Ltd.

3.SC

T=

Sama

rt Co

mtec

h Co

., Ltd

.4.

SBS

=Sa

mart

Broa

dban

d Se

rvice

s Co.,

Ltd

.5.

PN=

Posn

et Co

., Ltd

.6.

TTN

=Th

ai Tra

de N

et Co

., Ltd

.7.

OASI

S=

OASI

S Co

nsult

ing C

o., L

td.

8.ST

W=

Sama

rterw

are C

o., L

td.

9.SI

F=

Sama

rt Inf

onet

Co., L

td.

10.

STCC

=Sa

mart

Telco

mmun

icatio

n (C

ambo

dia)

11.

SC=

Sama

rt Co

rpor

ation

Pcl.

12. S

IM=

Sama

rt I-M

obile

Pcl.

13.

SMS

=Sa

mart

Mobil

e Se

rvice

s Co.,

Ltd

.14

.BU

G=

Sama

rt Mu

ltimed

ia Co

., Ltd

.15

.IM

I=

I-Mob

ile In

terna

tiona

l Co.,

Ltd

.16

. BS

=Br

ain S

ource

Co.,

Ltd

.17

.IM

NP=

I-Mob

ile N

etPlus

Co.,

Ltd

.18

.SI

AM=

Sama

rt Int

eracti

ve M

edia

Co., L

td.

19.

I-SPO

RT=

I-Spo

rt Co

., Ltd

.20

. TAL

=Ta

ke A

Loo

k Co

., Ltd

.21

.SI

MI=

PT. S

amar

t I-M

obile

Indo

nesia

Co.,

Ltd

.22

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MH=

Sama

rt I-M

obile

(Hon

g Ko

ng) C

o., L

td.

23.

SIMM

=Sa

mart

I-Mob

ile (M

alays

ia) C

o., L

td.

24. C

-Mob

ile=

C-Mo

bile

Sdn

Bhd

Co., L

td.25

.IM

IT=

I-Mob

ile In

ter tr

ade

Co., L

td.

26.

SR&D

=Sa

mart

Rese

arch

& De

velop

ment

Co., L

td.

27.

SI=

Sama

rt Int

ernati

onal

Co., L

td.

28. S

EC=

Suva

rnabh

umi E

nviro

nmen

t Care

Co.,

Ltd.

29.

OTO

=On

e To

One

Con

tacts

Co., L

td.

30.

VSS

=Vis

ion a

nd S

ecuri

ty Sy

stem

Co., L

td.

31.

SE=

Sama

rt En

ginee

ring

Co., L

td.

32. S

RT=

Sama

rt Re

ditec

h Co

., Ltd

.33

.CS

=Ca

mbod

ia Sa

mart

Co., L

td.

34.

SIH

=Sa

mart

Inter

Holdi

ng C

o., L

td.

35.

CATS

=Ca

mbod

ia Air

Traff

ic Se

rvice

Co.,

Ltd

. 36.

KPP

=Ka

mpot

Powe

r Plan

t Co.,

Ltd

.37

.CI

O=

Conta

ct - I

n - O

ne C

o., L

td.

38.

OTOP

RO=

One

To O

ne P

rofes

siona

l Co.,

Ltd

.3)

(1) L

isted

Com

panie

s(2) H

eld b

y SIM

(3) H

eld b

y BUG

(4) H

eld b

y IMI

(5) H

eld b

y SC

(6) H

eld b

y SIH

(7) H

eld b

y SE

STC(1)

SCSSCTSBSPNTTN

OASISSTWSIF

STCCSC

(1)

SIM(1)

SMS(2)

BUG(2)

IMI(2)

BS(2)

IMNP(2)

SIAM(3)

I-SPORT(3)

TAL(3)

SIMI(4)

SIMH(4)

SIMM(4)

C-Mobile(4)

IMIT(4)

SR&D(5)

SI(5)

SEC(5)

OTO(5)

VSS(5)

SE(5)

SRT(5)

CS(5)

SIH(5)

CATS(6)

KPP(6)

CIO(7)

OTOPRO(7)




4. Board of Directors & Committees

Management Structure of the Company comprised 6 committees that have members in the committees following

Board of Audit Executive Corporate Nominating & Risk

Committee Memberûs name Directors Committee Board Management Compensation Management

Committee Committee Committee

1. Mr. Sombut Uthaisang x x

2. General Sumpun Boonyanun / x / x

3. Miss Rapeepan Luangaramrut / / /

4. Mr. Narongchai Satanupong / / /

5. Mr. Kajornvut Tayanukorn / /

6. Mr. Charoenrath Vilailuck / /

7. Mr. Watchai Vilailuck / x

8. Mr. Sirichai Rasameechan / /

9. Mr. Pairote Varophas / / / x

10. Mr. Prasitchai Veerayuttwilai /

11. Mr. Pornchai Krivichain /

12. Mr. Apichat Sirisalipochna /

13. Mr. Tanin Tunkittibud /

Remark : x = Chairman, / = Director

Major Subsidiaries Directors

Name-SurnameSamart Communication Service Samart Comtech Samart Infornet

Company Limited Company Limited Company Limited

1. Mr. Charoenrath Vilailuck x x

2. Mr. Watchai Vilailuck / / x

3. Mr. Pairote Varophas / /

4. Mr. Prasitchai Veerayuttwilai /

5. Mr. Pornchai Krivichain / /

6. Mr. Suchart Duangthawee /

7. Mr. Theerapat Kulkijkormjorn /

8. Mr. Charern Laiprasert /

Note : x = Chairman, / = Director


Connected Transactions

Companies Nature of Relationship

Samart Corporation Plc. It is the major shareholder of the Company and holds a 69.65 % stake as at

December 30, 2008, and it has common directors with the company : Mr. Charoenrath

Vilailuck, Mr. Watchai Vilailuck, Mr. Sirichai Rasameechan and Mr. Pairote Varophas.

Samart Engineering Co., Ltd. Samart Corporation Plc. holds a 99.99% stake and it has common directors with the

company: Mr. Charoenrath Vilailuck, Mr. Watchai Vilailuck and Mr. Sirichai Rasameechan.

Samart International Co., Ltd. Samart Corporation Plc. holds a 99.99% stake and it has common directors with the


Samart Research & Development Samart Corporation Plc. holds a 99.99% stake and it has common directors with the

Co., Ltd. company: Mr. Charoenrath Vilailuck and Mr. Sirichai Rasameechan.

Cambodia Air Traffic Services Samart Inter Holding Co., Ltd. holds a 100% stake and it has common directors with

Co., Ltd. the company: Mr. Charoenrath Vilailuck and Mr. Watchai Vilailuck.

Cambodia Samart Co., Ltd. Samart Corporation Plc. holds a 49% stake and it has common directors with the

company: Mr. Charoenrath Vilailuck and Mr. Watchai Vilailuck.

Vision and security System Co., Ltd. Samart Corporation Plc. holds a 69.99% stake and it has common directors with the

company: Mr. Charoenrath Vilailuck and Mr. Sirichai Rasameechan.

One to One Contacts Co., Ltd. Samart Corporation Plc. holds a 95.99% stake, respectively. There is one common

shareholder with the company - Samart Comtech Co.Ltd. with a 2% stake Samart

Engineering Co.Ltd. with a 1% and Samart Telcoms Pcl. with a 1% and it has

common directors with the company : Mr. Charoenrath Vilailuck, Mr. Watchai Vilailuck,

Mr. Sirichai Rasameechan and Mr. Pairote Varophas.

Samart I-Mobile Plc. Samart Corporation Plc. holds a 58.23% stake and it has common directors with the

company: Mr. Charoenrath Vilailuck and Mr. Watchai Vilailuck

I-Mobile International Co., Ltd. Samart I-Mobile Plc. holds a 99.99% stake and it has common directors with the

company: Mr. Charoenrath Vilailuck and Mr.Watchai Vilailuck.

Samart Mobile Services Co., Ltd. Samart I-Mobile Plc. holds a 97.40% stake and it has common directors with the


Samart Multi Media Co., Ltd. Samart I-Mobile Plc. holds a 99.99% stake and it has common directors with the

company: Mr. Watchai Vilailuck and Mr. Sirichai Rasameechan.

Samart Interactive Media Co., Ltd. Samart Multi Media Co.,Ltd. holds a 99.99% stake and it has common directors with

the company: Mr. Charoenrath Vilailuck, Mr. Watchai Vilailuck and Mr. Sirichai

Rasameechan.

Take A Look Co., Ltd. Samart Multi Media Co.,Ltd. holds a 66.67% stake and it has common directors with

the company: Mr.Watchai Vilailuck

The connected transactions disclosed in this section are transactions of the Company and its

subsidiaries with those who may have a conflict of interest as at December 31, 2007 and 2008:





Vilailuck International Holding Vilailuck International Holding Co., Ltd. holds a 23.97% stake in Samart Corporation

Co., Ltd. Plc. and it has common directors with the company: Mr. Charoenrath Valailuck and

Mr. Watchai Vilailuck .

I-Sport Co.,Ltd. Samart Multi Media Co.,Ltd. holds a 49.99% stake and it has common directors with

the company: Mr. Watchai Vilailuck

Samart I-Mobile (Malaysia) I-Mobile International Co.,Ltd. holds a 100% stake and it has common directors with

Sdn. Bhd. the company: Mr. Watchai Vilailuck

PT. Samart I-Mobile (Indonesia) I-Mobile International Co.,Ltd. holds a 99.80% stake and it has common directors

Co., Ltd. with the company: Mr. Watchai Vilailuck

Samart I-Mobile (Hong Kong) I-Mobile International Co.,Ltd. holds a 100% stake and it has common directors with

Co., Ltd. the company: Mr. Watchai Vilailuck

C-Mobile Sdn Bhd Co.,Ltd. I-Mobile International Co.,Ltd. holds a 51% stake and it has common directors with

the company: Mr. Watchai Vilailuck.

I-Mobile NetPlus Co., Ltd. Samart I-Mobile Plc. holds a 99.99% stake and it has common directors with the

company: Mr. Charoenrath Valailuck and Mr. Watchai Vilailuck.

Brain Source Co., Ltd. Samart I-Mobile Plc. holds a 99.93% stake and it has common directors with the

company: Mr. Watchai Vilailuck and Mr. Sirichai Rasameechan.

I-Mobile Inter Trade Co., Ltd. I-Mobile International Co., Ltd. holds a 99.99% stake and it has common directors

with the company: Mr. Charoenrath Valailuck and Mr. Watchai Vilailuck.

Kampot Power Plant Co., Ltd. Samart Inter Holding Co.,Ltd. holds a 100% stake and it has common directors with

the company: Mr. Charoenrath Vilailuck and Mr. Watchai Vilailuck

Suvarnabhumi Environment Care Samart Corporation Plc. holds a 59.99% stake and it has common directors with the

Co., Ltd. company: Mr. Charoenrath Vilailuck, Mr. Watchai Vilailuck and Mr. Sirichai Ratsameechan

Contact-In-One Co.,Ltd. Samart Engineering Co., Ltd. holds a 99.99% stake and it has common directors with

the company: Mr. Charoenrath Vilailuck, Mr. Watchai Vilailuck and Mr.Sirichai

Ratsameechan

Samart Inter Holding Co., Ltd. Samart Corporation Plc. holds a 100% stake and it has common directors with the

company: Mr. Charoenrath Vilailuck, Mr. Watchai Vilailuck, Mr. Sirichai Ratsameechan

and Mr.Pairote Varophas

Samart Communication Services Samart Telcoms Plc. holds a 99.99% stake and it has common directors with the

Co., Ltd. company: Mr. Charoenrath Vilailuck, Mr. Watchai Vilailuck, and Mr.Pairote Varophas

Samart Comtech Co., Ltd. Samart Telcoms Plc. holds a 99.99% stake and it has common directors with the

company: Mr. Charoenrath Vilailuck and Mr. Watchai Vilailuck



Samart Broadband Services Samart Telcoms Plc. holds a 99.99% stake and it has common directors with the

Co., Ltd. company: Mr. Charoenrath Vilailuck, Mr. Watchai Vilailuck, Mr. Sirichai Ratsameechan


Thai Trade Net Co., Ltd. Samart Telcoms Plc. holds a 99.99% stake and it has common directors with the



Posnet Co., Ltd. Samart Telcoms Plc. holds a 99.99% stake and it has common directors with the



Samart Infonet Co., Ltd. Samart Telcoms Plc. holds a 99.57% stake and it has common directors with the

company: Mr. Watchai Vilailuck and Mr.Pairote Varophas

Smarterware Co., Ltd. Samart Telcoms Plc. holds a 99.99% stake and it has common directors with the

company: Mr. Charoenrath Vilailuck, Mr. Watchai Vilailuck and Mr.Pairote Varophas

Samart Telcommunication Samart Telcoms Plc. holds a 100% stake and it has common directors with the

(Cambodia) Co., Ltd. company: Mr. Charoenrath Vilailuck, Mr. Watchai Vilailuck Mr. Sirichai Ratsameechan


Oasis Consulting Co., Ltd. Samart Telcoms Plc. holds a 70% stake and it has common directors with the



Samart Reditech Co., Ltd. Samart Corporation Plc. holds a 99.99% stake and it has common directors with the



One to One Professional Co., Ltd. One to One Contracts Co., Ltd. holds a 99.99% stake and it has common directors

with the company: Mr. Charoenrath Vilailuck, Mr. Watchai Vilailuck, Mr. Sirichai

Ratsameechan and Mr.Pairote Varophas




1. Connected Transactions1.1 Rental and Services Fee

Transaction Type Value (Baht Million) Justification of Transactions

2008 2007

1. Samart Telcoms Public Co., Ltd. 6.47 3.42 The rental and service charges for public

rent the office at Software Park Building utilities are reasonable when compared

and used the pubic utilities services from to market price within the same area.

Samart Corporation Pcl.

2. Samart Telcoms Pcl. 0.21 0.21 The rental and service charges for public

rent the office on 101/4 M00.20 utilities are reasonable when compared to

Phaholyothin Rd. Klong 1, Klongluang, market price within the same area.

Pathumthanee. and used the public utilities

services from Samart Corporation Public

Co., Ltd.

3. Samart Communication Services Co., Ltd. 5.34 7.92 The rental and service charges for public

rent the office at Software Park Building utilities are reasonable when compared to

and used the pubic utilities services from market price within the same area.


4. Samart Communication Services Co., Ltd. 0.95 0.95 The rental charge is reasonable when

rent a warehouse, located on 101/4 Moo compared to market price within the same

20, Phaholyothin Rd. Klong 1, area.

Klongluang, Pathumthanee from Samart

Corporation Pcl.

5. Samart Communication Services Co., Ltd. 0.12 0.12 The building is rented to be used as a

rent a building in Chiengmai from maintenance and repair services center for

Mr. Wachai Vilailuck the equipments of the Ruler Telephone

project installed in Chiangmai and nearby

area. The rental charge is reasonable when

compared to market price within the same

area.

6. Samart Broadband Services Co., Ltd.. rent 0.35 0.34 The rental and service charges for public

the office at Software Park Building and utilities are reasonable when compared to

used the public utilities services from market price within the same area.

Samart Samart Corporation Pcl.

7. Thai Trade net Co., Ltd. rent the office at - 0.28 The rental and service charges for public

Software Park Building and used the utilities are reasonable when compared to

public utilities services from Samart market price within the same area.



Transaction Type Value (Baht Million) Justification of Transactions

2008 2007

8. Posnet Co., Ltd. rent the office on 101/4 0.07 0.07 The rental charge is reasonable when

M00.20 Phaholyothin Rd. Klong 1, compared to market price within the same

Klongluang, Pathumthanee. and used the area.

public utilities services from Samart

Corporation Public Co., Ltd.

9. Samart Comtech Co., Ltd. rent the office 9.59 9.74 The rental charge is reasonable when

at Software Park Building and used the compared to market price within the same

public utilities services from Samart area.


10. Samart Comtech Co., Ltd. rent the office 0.42 0.42 The rental charge is reasonable when

on 37/1 M00.2 Phaholyothin Rd. Klong 1, compared to market price within the same

Klongluang, Pathumthanee. and used area.

the public utilities.

11. Smarterware Co., Ltd. rent the office at 0.80 0.32 The rental charge is reasonable when

Software Park Building and used the compared to market price within the same



12. Samart Infonet Co., Ltd. rent the office at 2.86 0.63 The rental charge is reasonable when

Software Park Building and used the compared to market price within the same






1.2 Loans and Borrowings

Borrowing Company Lending Company Interest Value (Baht Million)

Rate (%) 2008 2007

1. Samart Telcoms Pcl. For the purchase of a subsidiaryûs shares from MLR+1 Outstanding OutstandingSamart Corporation Public Co., Ltd. Loan Loan

103.0 103.0Interest Paid Interest Paid

8.32 8.382. Samart Comtech Co., Ltd. Loan from Samart Corporation Public Co., Ltd. MLR+1 Outstanding Outstanding

Loan Loan142 142

Interest Paid Interest Paid11.47 11.56

3. Samart Infonet Co., Ltd. Loan from Samart Corporation Public Co., Ltd. MLR+1 Outstanding OutstandingLoan Loan19.29 18.79

Interest Paid Interest Paid1.54 13.37

1.3. Transactions Related to Computer Center and Accounting Software : MOVEX

Nature of Transactions Value (Baht Million)

2008 2007

1. Samart Telcoms Pcl. provided services and maintained the computer center and - 0.02

accounting software, MOVEX, for Samart Corporation Pcl.


accounting software, MOVEX, for Samart Multi Media Co., Ltd.


accounting software, MOVEX, for Samart Interactive Media Co., Ltd.

4 Samart Telcoms Pcl. provided services and maintained the computer center and 0.01 0.03

accounting software, MOVEX, for Samart Engineering Co., Ltd.

In the past, the services and maintenance of the computer center and accounting software, MOVEX were provided by Samart

Interactive Media Co., Ltd. but its operation was ceased in 2002. Later the MOVEX system was sold to Samart Telcoms Public

Co., Ltd. to continue the services at the fair market price.


1.4 Transactions of Sales of Goods and Services as a Normal Business

Sellers of Goods/Services Buyers of Goods/Services Amount (Baht Million)

2008 2007

1. Samart Telcoms Public Co., Ltd. Samart Corporation Public Co., Ltd. 0.018 0.30

Samart I-Mobile Public Co., Ltd. - 0.44

Combodia Air Traffic Services Co., Ltd. 0.52 -

One to One Contacts Co., Ltd. 13.54 0.63

C-Mobile Sdn BHD - 0.40

I-Sport Co., Ltd. - 0.02

Samart I-Mobile Public Co., Ltd. 0.25 -

2. Samart Communication Services Samart Corporation Public Co., Ltd. 0.01 0.46

Co., Ltd. Cambodia Samart Communication Co., Ltd. - 0.01

Cambodia Air Traffic Services Co., Ltd. 0.11 0.11

3. Thai Trade Net Co., Ltd. Samart Corporation Public Co., Ltd. 0.03 0.04


Vision and Security System Co.Ltd. 0.01 0.01

Samart I-Moboile Public Co., Ltd. - 0.42

Vilailuck Agricultural Industry Co., Ltd. 0.01 -

4. Posnet Co., Ltd. Samart Corporation Public Co., Ltd. - 0.34

5. Samart Comtech Co., Ltd. Samart Corporation Public Co., Ltd. - 2.7

One to One Contacts Co., Ltd. - 0.79

Samart I-Moboile Public Co., Ltd. 0.58 -

Vision and Security System Co.Ltd. 0.07 -

6. Oasis Consulting Co., Ltd. Samart I-Mobile Public Co., Ltd. - 0.30

7. Smarterware Co., Ltd. One to One Contacts Co., Ltd. 0.34 0.69

Vilailuck International Holding Co., Ltd. 0.26 -

8. Samart Infonet Co., Ltd. Samart Corporation Public Co., Ltd 12.50 2.91

Samart I-Mobile Public Co., Ltd. 1.19 0.55


Samart International Co., Ltd. 0.16 0.07

I-Sport Co., Ltd. 0.38 0.08

Take A Look Co., Ltd. 0.09 0.02

Brain Source Co., Ltd. 0.08 0.02

Samart Multimedia Co., Ltd. 1.67 0.36

Vision and Security System Co.Ltd. 0.04 -

Suvarnabhumi Environment Co.Ltd. 0.04 -




Sellers of Goods/Services Buyers of Goods/Services Amount (Baht Million)

2008 2007

9. Samart Corporation Samart Telcoms Public Co., Ltd. 5.85 5.85

Public Co., Ltd. Samart Communication Services Co., Ltd. 13.80 13.80

(IT Data Center services) Posnet Co., Ltd. 1.77 1.77

Thai Trade Net Co., Ltd. 0.79 0.79

Samart Comtech Co., Ltd. 13.87 13.87

Samart Infonet Co., Ltd. 1.38 0.34

10. I-Mobile Inter Trade Co., Ltd. Samart Telcoms Public Co., Ltd. 0.01 -

11. Samart I-Mobile Public Co., Ltd. Samart Telcoms Public Co., Ltd. 30.13 20.52

Samart Communication Services Co., Ltd. 0.50 0.53

Posnet Co., Ltd 0.11 0.09

Thai Trade Net Co., Ltd. - 0.07


Oasis Consulting Co., Ltd. - 0.01

Samart Infonet Co., Ltd 0.12 -

12. Samart Enginering Co., Ltd. Samart Telcoms Public Co., Ltd. 0.46 2.17

Samart Communication Services Co., Ltd 0.27 0.62

Samart Comtech Co., Ltd. - 0.78

Samart Infonet Co., Ltd. 0.01 -

13. One to One Contacts Co., Ltd. Samart Telcoms Public Co., Ltd. 0.07 0.61

Samart Communication Services Co., Ltd. 0.04 0.04

Posnet Co., Ltd. 0.45 0.34

Thai Trade Net Co., Ltd. 0.15 0.99


Samart Infonet Co., Ltd. 0.29 0.49

Smarterware Co., Td. 0.01 -

14. Vision and Security System Samart Telcoms Public Co., Ltd. 1.24 25.54

Co.Ltd. Samart Communication Services Co., Ltd 6.55 1.28


Samart Infonet Co., Ltd. - 1.42

15. Samart Multimedia Co., LTD. Samart Infonet Co., Ltd. 0.03 -

The above connected transactions are under the terms and conditions of the normal business.


1.5 Miscellaneous Normal Business Transactions

Nature of Major Transactions Value (Baht Million) Justification

2008 2007

1. Samart Telcoms Public Co., Ltd. rent a car to Samart - 0.06 Normal business transaction at

Corporation Public Co.,Ltd. market price.

2. Samart Telcoms Public Co., Ltd. paid for the equipment 0.16 0.12 Normal business transaction at

rental, services charges, and miscellaneous expenses to market price.

Samart Corporation Public Co.,Ltd.

3. Samart Telcoms Public Co., Ltd. bought drinking water 0.03 0.03 Normal business transaction at

from Samart Engineering Co., Ltd. market price.

4. Samart Telcoms Public Co., Ltd. paid for the water, 0.79 0.69 Normal business

electricity, and car park rental to Vilailuck International transaction at market price.

Holding Co., Ltd.

5. Samart Telcoms Public Co., Ltd. paid for miscellaneous - 0.03 Normal business

expenses to Take A Look Co., Ltd. transaction at market price.

6. Samart Telcoms Public Co., Ltd. paid for miscellaneous 0.01 - Normal business

expenses to Samart Maltimedia Co., Ltd. transaction at market price.

7. Samart Communication Services Co., Ltd. paid for the 0.07 0.08 Normal business

miscellaneous services to Samart Corporation Public. transaction at market price.

Co., Ltd.

8. Samart Communication Service Co., Ltd. bought drinking 0.03 0.04 Normal business

water from Samart Engineering Co., Ltd. transaction at market price.

9. Samart Broadband Co., Ltd. paid for electricity expenses 0.03 0.03 Normal business

to Vilailuck International Holding Co., Ltd. transaction at market price.

10. Posnet Co., Ltd. paid for miscellaneous expenses from 0.04 0.04 Normal business

Samart Corporation Public. Co., Ltd. transaction at market price.

11. Posnet Co., Ltd. bought drinking water from Samart 0.03 0.03 Normal business

Engineering Co., Ltd. transaction at market price.

12. Thai Trade Net Co., Ltd. paid for the telephone line to 0.03 0.03 Normal business transaction

Samart Corporation Public. Co., Ltd. at market or actual price.

13. Thai Trade Net Co., Ltd. paid for miscellaneous expenses 0.01 - Normal business transaction

to Vilailuck International Holding Co., Ltd. at market price.

14. Samart Comtech Co., Ltd. sold and rent equipment to 0.56 0.02 Normal business transaction

Samart Corporation Public Co., Ltd. at market price.

15. Samart Comtech Co., Ltd. paid for the office supplies 0.12 0.46 Normal business transaction

and the miscellaneous services to Samart Corporation at market price.

Public Co., Ltd.

16. Samart Comtech Co., Ltd. bought drinking water from 0.02 0.01 Normal business transaction

Samart Engineering Co., Ltd. at market price.




Nature of Major Transactions Value (Baht Million) Justification

2008 2007

17. Samart Comtech Co., Ltd. paid for the water, electricity, 0.41 0.62 Normal business transaction

and car park rental to Vilailuck International Holding at market price.

Co., Ltd.

18. Samart Infonet Co., Ltd. paid miscellaneous expenses 0.02 0.01 Normal business transaction

to Samart Corporation Public Co., Ltd. at market price.

19. Samart Infonet Co., Ltd. paid for miscellaneous expenses - 0.02 Normal business transaction

to Samart I-Mobile Public Co., Ltd. at market price.

20. Samarterware Co., Ltd. paid miscellaneous expenses to 0.01 - Normal business transaction

Samart Corporation Public Co., Ltd. at market price.

21. Samarterware Co., Ltd. paid for car park rental to 0.11 0.03 Normal business transaction

Vilailuck International Holding Co., Ltd. at market price.


FINANCIAL AND OPERATING RESULTS

1. Financial Statements1.1 Audit Report

The Certified Auditor firm approved by the Board of Directors of the Company for theauditing of Consolidated and Company Financial Statements for the past three years is Ernst& Young Office Limited.

Summary of Auditorûs ReportIn the Auditorûs Report for the past three consecutive years, the Certified Auditor has

presented the report with no comments as summarized as follows:

Summary of 2006 Auditorûs ReportAccording to the Auditorûs opinion, the Consolidated and Company Financial Statement

as of December 31, 2006, the operating results and Statement of Cash Flows for the year thenended of the Company and its Subsidiaries and of the Company only was fairly right inaccordance with the generally accepted accounting principles with no comments. The Auditorgave note on transactions with Related Companies.

Summary of 2007 Auditorûs ReportAccording to the Auditorûs opinion, the Consolidated and Company Financial Statement

as of December 31, 2007, the operating results and Statement of Cash Flows for the year thenended of the Company and its Subsidiaries and of the Company only was fairly right inaccordance with the generally accepted accounting principles with no comments. The Auditorgave notes on the following matters:a) Accrued income with the outstanding for more than one year of a subsidiary companyb) Accounts receivable of The Company with the over due balance more than one year

amounting to Baht 41 millionc) The change of accounting policy for recording investments in subsidiaries in the sepa-

rate financial statements from the equity method to the cost methodd) Transactions with Related Companies

Summary of 2008 Auditorûs ReportAccording to the Auditorûs opinion, the Consolidated and Company Financial

Statement as of December 31, 2008, the operating results and Statement of Cash Flows for theyear then ended of the Company and its

Subsidiaries and of the Company only was fairly right in accordance with the generallyaccepted accounting principles with no comments. The Auditor gave notes on the followingmatters:a) Accrued income with the outstanding for more than one year of a subsidiary companyb) Provision for fine from the project delay and provision for impairment for the asset of a

project of a subsidiary companyc) Accounts receivable of The Company with the over due balance more than one year

amounting to Baht 36 milliond) Transactions with Related Companies




1.2 Financial Positions and Operating Results of Samart Telcoms (Public) Co., Ltd. and Its

SubsidiariesUnit: Baht Thousand

Transaction As of December 31

2006 2007 2008

Cash and Cash equivalents 146,710 215,495 127,689

Account receivables - net 654,610 381,515 621,812

Inventories 182,817 202,415 325,175

Land, building and equipment - net 1,002,321 974,610 839,351

Accrued rights to use communication equipment 301,139 273,515 244,414

Total assets 3,384,209 3,234,934 3,556,353

Overdrafts and short-term loans 621,920 727,912 1,256,206

Account payables 353,413 295,215 295,206

Current portion of long - term loans 319,464 233,803 54,270

Long-term loans - net of current portion 141,973 54,270 -

Total liabilities 2,027,932 1,960,496 2,199,874

Paid up capital 600,000 600,000 600,000

Accumulated profit 289,314 269,317 350,335

Shareholdersû equity 1,356,277 1,274,438 1,356,479

Revenues from sales and services 2,735,917 2,126,474 2,866,593

Total revenues 2,880,326 2,177,525 2,900,094

Cost of goods and service sold 2,006,010 1,568,405 2,234,998

Selling and admin expenses 331,263 375,773 439,341

Interest expenses 110,766 92,794 99,412

Total costs and expenses 2,337,273 1,944,178 2,674,339

Net profit 331,368 111,917 110,932

Net profit per share (Baht / share) 0.55 0.19 0.18

Cash flow from operating activities 964,710 430,518 (240,596)

Cash flow from investing activities (181,164) (195,719) (86,930)

Cash flow from financing activities (950,161) (165,986) 239,699

Par value (Baht / share) 1 1 1

Common shares outstanding (Thousand shares) 600,000 600,000 600,000

Weighed average outstanding (Baht / share) 600,000 600,000 600,000

Book value (Baht / share) 2.26 2.12 2.26

Dividend per share (Baht / share) 0.32 0.10 0.10




The Board of Directors of the Company realized on the importance of the good Corporate

Governance which will be is the fundamental factor for improving standard of business operation

to create more transparency, competitiveness and strengthen the confidence of all shareholders,

investors and other related parties. Thus written Corporate Governance Policy and Business Ethics,

which complied with the 2006 Corporate Governance Principles of SET, have been provided for

practices of directors, management and employees of the Company. Corporate Governance Practices

of the Company in 2008 are as follows:

1) Rights of Shareholders

The Company emphasizes and recognizes the importance of the rights of all sharehold-

ers equitably. All rights that the Companyûs shareholders obtained in 2008 were as follows:

ë Rights to get share certificate, sell, purchase or transfer the Companyûs shares

Thailand Securities Depository Co., Ltd. (çTSDé) has been appointed as the

Companyûs registrar to provide all services for all transactions related to registration of

the Companyûs shares.

ë Rights to propose agenda of the Shareholdersû Meeting

The Company is aware of the shareholdersû rights and equitable treatment to the

shareholders under the Good Corporate Governance and to comply with laws. Itûs the

Company policy to allow the shareholders to propose matter(s) for consideration of the

Board of Directors as agenda of the shareholdersû meeting for 2009 Annual General

Meeting of shareholders onward. During the period that no rules or criteria from the

Capital Market Supervisory Board been announced, shareholders who would like to

propose the agenda have to comply with the Companyûs procedures and criteria of the

above matter. The Company notified and disclosed contact channels and period for

proposing agenda via SET and also provided details of the procedures on the companyû

website (www.samtel.com) since December 15th, 2009.

ë Participation in the Shareholdersû Meeting

The Company is aware of the shareholdersû rights and equitable treatment to

participate in the shareholdersû meeting, be informed conditions and procedures of

meeting as well as having proxy to vote and comment in the meeting on behalf of

the shareholder. There was only one meeting in 2008, an Annual General Meeting of

Shareholders 2008 which held on April 24th, 2008 at Miracle Grand Convention Hotel,

Vibhavadee-Rangsit Road, Laksi, Donmuang, Bangkok where is convenience for

transportation and capability to cover with number of shareholders.

Corporate Governance


1.3 Financial Ratios of Samart Telcoms (Public) Co., Ltd. and Its Subsidiaries

Financial Ratio Samart Telcoms (Public) Co., Ltd.

and Subsidiaries

2006 2007 2008

LIQUIDITY RATIO

Current ratio (Times) 1.15 1.02 1.09

Acid test ratio (Times) 0.54 0.40 0.41

Cash turnover (Times) 0.52 0.32 -0.12

Receivable turnover ratio (Times) 4.08 6.03 5.45

Average collection period (Days) 88 60 66

Inventory turnover ratio (Times) 16.80 14.81 9.49

Days sales outstanding (Days) 21 24 38

Payable turnover ratio (Times) 4.69 7.71 7.57

Payment period (Days) 77 47 48

Cash cycle (Days) 33 37 56

PROFITABILITY RATIO

Gross profit margin1) (%) 26.68 26.24 22.03

Net profit margin (%) 11.50 5.14 3.83

Return on equity (%) 25.93 9.09 8.43

EFFICIENCY RATIO

Return on assets (%) 8.95 3.76 3.27

Return on fixed assets2) (%) 59.88 28.79 41.11

Asset turnover (Times) 0.78 0.73 0.85

FINANCIAL POLICY RATIO

Debt to equity (Times) 1.50 1.54 1.62

Interest coverage (Times) 4.90 2.51 2.26

Debt serviceability (Times) 1.17 0.45 0.59

Dividend payout ratio 3) (%) 60.99 56.34 55.174)

1) Including revenues from transponder rental

2) Including the rights to use telecom equipment

3) % of consolidated net profit after deduction of all reserves as stated in the companyûs Articles of Association

and related laws.

4) On March 19, 2009, the Board of Directors have approved the dividend payment for 2008 performance at

Baht 0.10 per common share. The Annual General Meeting of Shareholders will be held on April 27, 2552.




2. FINANCIAL ANALYSIS AND OPERATING RESULTS2.1 2008 Operating Results Overview

2008 Operating Results Overview

In 2008, the Company and its Subsidiaries reported total revenues of Baht 2,900.1 million,

compared with Baht 2,177.5 million in 2007, increased by Baht 722.6 million or 33.1%. The increase

in revenue mainly from the increase of project sales and from the revenue of a subsidiary which the

Company acquired the shares on September 28, 2007.

In 2008, cost of goods and services sold was Baht 2,235.0 million, compared with Baht

1,568.4 million in 2007, increased by Baht 666.6 million or 42.5%, corresponding to an increase of

total revenues. Gross profit margin increased by Baht 73.4 million or 13.2% whereas gross profit

margin rate were 22.0% and 26.3% for 2008 and 2007, respectively.

Selling and administrative expenses increased by Baht 63.6 million, mainly from the

expenses of a subsidiary which the Company acquired the shares on September 28, 2007, and

staff salary and benefits expenses.

Interest expenses increased by Baht 6.6 million from the increase in project financing.

Operating Results of the Company and Its Subsidiaries

In 2008, revenue structure of the Company and its Subsidiaries can be separated as follows:Unit : Baht Million

Company 2006 2007 2008

Total Growth Total Growth Total Growth

Revenues Revenues Revenues

Samart Telcoms Plc. 1,134.96 -31.0% 1,249.35 10.1% 1,366.77 9.4%

Samart Communication Service Co., Ltd. 1,138.92 9.5% 567.54 -50.2% 602.64 6.2%

Thai Trade Net Co., Ltd. 36.10 -3.3% 40.46 12.1% 81.58 101.6%

Posnet Co., Ltd. 200.42 31.4% 118.31 -41.0% 79.99 -32.4%

Samart I PAS Co., Ltd. (1) - - - - - -

Samart Broadband Services Co., Ltd. 248.95 237.0% 107.86 -56.7% 2.74 -97.5%

Samart Comtech Co., Ltd. 594.10 531.6% 418.41 -29.6% 736.19 75.9%

Oasis Consulting Co.,Ltd. (2) 9.23 100.0% 53.98 484.8% 76.27 41.3%

Smarterware Co.,Ltd. (3) - - 4.99 100.0% 34.57 592.8%

Samart Telecommunication (Cambodia) Co.,Ltd. (4) - - - - - -

Samart Infonet Co.,Ltd. (5) - - 68.02 100.0% 356.93 424.7%

Remark: :- (1) Samart IPas Co., Ltd. was liquidated on May 23, 2006.(2) Oasis Consulting Co., Ltd. - in 2006, only the revenue of November and December.(3) Smarterware Co., Ltd. - established on May 3, 2007.(4) Samart Telecomunication (Combodia) Co., Ltd. -established on August 9, 2007.(5) Samart Infonet Co., Ltd. - in 2007 only the revenue of October to December.


Samart Telcoms Plc.In 2008, the Company reported total revenues of Baht 1,366.8 million, compared with

Baht 1,249.4 million in 2007, increased by Baht 117.4 million mainly from the automatic meterreading project (AMR).

Samart Communication Service Co., Ltd.In 2008, the Company reported total revenues of Baht 602.6 million, compared with

Baht 567.5 million in 2007, increased by Baht 35.1 million mainly from the telecommunicationnetwork projects.

Thai Trade Net Co., Ltd.In 2008, the Company reported total revenues of Baht 81.6 million, compared with Baht

40.5 million in 2007, increased by Baht 41.1 million mainly from the sales of equipment.

Posnet Co., Ltd.In 2008, the Company reported total revenues of Baht 80.0 million, compared with Baht

118.3 million in 2007, decreased by Baht 38.3 million mainly from the decrease in sale of cardreaders.

Samart Broadband Services Co., Ltd.In 2008, the Company reported total revenues of Baht 2.7 million, compared with Baht

107.9 million in 2007, decreased by Baht 105.2 million mainly from the decrease in sale ofelectronic equipment and communication equipment.

Samart Comtech Co., Ltd.In 2008, the Company reported total revenues of Baht 736.2 million, compared with Baht

418.4 million in 2007, increased by Baht 317.8 million from the increase in system integrationrevenue.

2.2 Balance SheetAssets

Total assets as of December 31, 2008 amounted to Baht 3,556.4 million, compared withBaht 3,234.9 million as of December 31, 2007, increased by Baht 321.5 million mainly from theincrease in trade accounts receivable and the increase in communication equipment for newprojects.

Cash and Bank deposits decreased by Baht 87.8 million from loan repayment andpayment to trade payable.

Net account receivables increased by Baht 240.3 million mainly from the increase inrevenue.

Inventories increased by Baht 122.8 million from the equipment for new projects.

LiabilitiesTotal liabilities increased by Baht 239.4 million from project financing.

Shareholdersû EquityShareholdersû Equity increased by Baht 82.0 million from net profit of Baht 110.9 million

deducted by dividend payment of Baht 30.0 million.



ENRICH LIFE THROUGH ICT SOLUTIONSRemuneration of the Auditors

ë Audit fee

The Company and its subsidiaries pay the audit fee to Ernst & Yong Office Limited, the

persons or the company related to the auditing firm for the past fiscal year totally Baht 4.2

million.

ë Non-audit fee

There are no other service fees paid by the Company and its subsidiaries to the persons

or the company related to the auditing firm in the past fiscal year.




Dear Shareholders,

The Board of Directors of the Company takes responsibility for the Consolidated Financial

Statement of Samart Telcoms (Public) Co., Ltd. and its Subsidiaries and financial information

included in the Annual Report. The Financial Statement was prepared in accordance with the

generally accepted accounting standards employing appropriate accounting policy and continual

practice under careful considerations and best estimations as well as disclosing sufficient

information in the Notes to Financial Statement.

The Board of Directors has established and maintained efficient internal control system

to ensure with reasonable confidence that the accounting procedure is correct, complete and

sufficient for asset possessions and acknowledgement of weaknesses to prevent frauds or significant

conspiracies.

The Board of Directors appoints the Audit Committee consisting of three Independent

Committees to examine accounting policy, quality of Financial Report and internal control system.The Audit Committeeûs opinion regarding the mentioned issues appears in the Audit Committeeûs

Report as an integral part of the Annual Report.

In the Board of Directorsû opinion, the internal control system of the Company is generally

satisfactory and can reasonably assure the reliability of the Financial Statement of the Company and

its Subsidiaries as of December 31, 2008.

(Mr. Sombut Uthaisang) (Mr. Watchai Vilailuck)

Responsibility Report of the Board of Directors for Financial Report


Report of the Independent Auditor

To the Shareholders of Samart Telcoms Public Company Limited

I have audited the accompanying consolidated balance sheets of Samart Telcoms Public

Company Limited and its subsidiaries as at 31 December 2008 and 2007, the related consolidated

statements of income, changes in shareholdersû equity, and cash flows for the years then ended,

and the separate financial statements of Samart Telcoms Public Company Limited for the same

periods. These financial statements are the responsibility of the management of the Company and

its subsidiaries as to their correctness and the completeness of the presentation. My responsibility is

to express an opinion on these financial statements based on my audits.

I conducted my audits in accordance with generally accepted auditing standards. Those

standards require that I plan and perform the audit to obtain reasonable assurance about whether

the financial statements are free of material misstatement. An audit includes examining, on a test

basis, evidence supporting the amounts and disclosures in the financial statements. An audit also

includes assessing the accounting principles used and significant estimates made by management,

as well as evaluating the overall financial statement presentation. I believe that my audits provide areasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material

respects, the financial position of Samart Telcoms Public Company Limited and its subsidiaries and

of Samart Telcoms Public Company Limited as at 31 December 2008 and 2007, the results of

their operations, and cash flows for the years then ended, in accordance with generally accepted

accounting principles.

Without qualifying my opinion on the above financial statements, I draw attention to the

following matters with regard to the accompanying financial statements:

a) As discussed in Note 8.2 to the financial statements, as at 31 December 2008 accrued income

in the consolidated financial statements includes accrued income of a subsidiary company

totaling Baht 155.2 million (2007: Baht 471.3 million) relating to the sales and installation of

communications equipment in the passenger terminal of Suvarnabhumi Airport for a company

(formerly a state enterprise), of which Baht 155.2 million (2007: Baht 355.1 million) has been

outstanding for more than one year since the subsidiary rendered the related service. The

subsidiary has already delivered all work to the customer. However, the subsidiary is in the

process of negotiating collection and invoicing with the customer and its management believe

that the subsidiary has completed the delivery of service and performance in accordance with

the conditions in the contract throughout, and that since counterparty has issued notice of

acceptance of the work to the subsidiary, the subsidiary has continued to pursue collection

and was able to invoice a total of Baht 306.5 million and can collect whole amount in respect

Report and consolidated financial statements




of such project during the year, the subsidiaryûs management believe that the subsidiary will

be able to negotiate collection of the remaining debt from the counterparty. As at 31 December

2008, the subsidiary therefore did not set aside provision for doubtful debt for the accrued

income in the books of account.

b) As discussed in Note 13.6 and 33.1.4 to the financial statements, on 26 October 2006, Samart

Communication Services Co., Ltd (a subsidiary company) entered into an agreement with a

company (formerly a state enterprise), whereby they would provide an information technology

network to The Department of Local Administration for a period of 1 year. The subsidiary is

obliged to make the network available at not less than 1,000 sites within 120 days from the

contract date and guarantee this minimum number of users throughout the contract period. If

the subsidiary is unable to do so within the delivery period (22 February 2007), the counterparty

will charge a penalty for any delays in the subsidiaryûs work. However, as at 22 February 2007

the subsidiary could not make the network available at 1,000 sites because such subsidiary has

yet to receive the equipment from the counterparty and Bandwidth received is not adequate for

actual usage. As at 31 December 2008, a subsidiary has the service capacity of 575 places but

the service has been used at only 192 places which has the outstanding balance of asset underinstallation under such agreement amounted to Baht 168.7 million and is presented as a part of

property, plant and equipment in the balance sheet. The subsidiary has set up provision for

impairment of such assets amounting to Baht 0.3 million, which the management believes is

adequate considering the current circumstances. However, the management and legal counsel

are of the opinion that the subsidiary company is not obligated to pay any fine to the counterparty

as the delay of such project is not the subsidiaryûs fault. In addition the management believes

that the negotiation with the counterparty will be successful and the service fee can be

collected from the counterparty. Furthermore, the management considers that all equipment

used in this project, which a subsidiary recorded as asset under installation and presented

as a part of property, plant and equipment, is general equipment which can be used in the

subsidiary companyûs other projects. Therefore as at 31 December 2008 the subsidiary

company has not set up provision for fine from the project delay and believe that recorded

provision for impairment for the asset of such project is adequate.

c) As discussed in Note 8.1 to the financial statements, as at 31 December 2008, the Company

has an unrelated accounts receivable balance of Baht 51.1 million (2007: Baht 58.2

million), of which Baht 36.2 million (2007: Baht 40.9 million) is more than 1 year past due. The

Company has recorded allowance for doubtful accounts of Baht 1.3 million, which management

believe is adequate in the current circumstances because the Company has been informed

from such debtor in writing that the debtor is in the process of calling up payment of

additional share capital from its shareholders and it will repay. During 2008, the Company


received payment from such debtor of Baht 20 million. In addition, in February 2009, the

Company received the second installment of Baht 10 million. The management therefore

believe that the Company can collect debt from such company.

d) As discussed in Note 7 to the financial statements, the Company and its subsidiaries

have significant business transactions, relating to sales, services and loans, with the parent

company, subsidiaries and related companies. Such transactions have been conducted on

the terms and basis mutually agreed by the Company and those companies.

Saifon Inkaew

Certified Public Accountant (Thailand) No. 4434

Ernst & Young Office Limited

Bangkok: 24 February 2009



Balance sheetsAs at 31 December 2008 and 2007

(Unit: Baht)

Consolidated Separate

financial statements financial statements

Note 2008 2007 2008 2007

AssetsCurrent assetsCash and cash equivalents 127,689,169 215,494,883 81,462,814 167,571,672Short-term investments in trading securities 6 133,414,862 135,799,160 133,414,862 135,799,160Trade accounts receivable

Related parties 7, 8.1 24,833,010 16,010,518 104,771,522 36,129,405Unrelated parties - net 8.1 596,979,395 365,504,045 179,806,343 147,453,617

Total trade accounts receivable - net 621,812,405 381,514,563 284,577,865 183,583,022Accrued income 8.2 914,132,859 846,451,246 277,397,853 297,936,884Amounts due from and advance to related parties 7 4,866,424 4,909,677 9,450,903 9,025,407Short-term loans to related parties 7 - - 10,500,000 35,500,000Inventories - net 9 325,175,374 202,415,320 147,493,829 92,228,383Other current assets 10 207,185,966 82,294,294 122,540,590 48,342,053Total current assets 2,334,277,059 1,868,879,143 1,066,838,716 969,986,581Non-current assetsRestricted bank deposits 11 16,872,592 16,521,104 - -Investments in subsidiaries 12 - - 1,626,289,543 1,618,790,068Other investments 5,453,287 5,453,287 1,000,000 1,000,000Communications equipment not yet installed - net 9,351,947 9,539,838 9,351,947 9,539,838Property, plant and equipment - net 13 839,351,144 974,610,569 212,810,476 150,237,003Deferred right to the use of communications

equipment - net 14 244,414,561 273,515,530 244,414,561 273,515,319Prepaid IT service fee to parent company - net 15 17,469,951 25,855,529 2,727,764 4,037,091Goodwill - net 2,283,306 2,283,306 - -Other non - current assets

Withholding tax deducted at source - net 67,771,093 46,287,537 17,039,047 -Others 19,107,945 11,988,336 2,459,641 1,342,847

Total other non-current assets 86,879,038 58,275,873 19,498,688 1,342,847Total non - current assets 1,222,075,826 1,366,055,036 2,116,092,979 2,058,462,166Total assets 3,556,352,885 3,234,934,179 3,182,931,695 3,028,448,747

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


Balance sheets (Continued)As at 31 December 2008 and 2007

(Unit: Baht)



Note 2008 2007 2008 2007

Liabilities and shareholdersû equityCurrent liabilitiesBank overdrafts and short term loans from banks

and trust receipts 16 1,256,206,279 727,912,420 606,898,572 498,628,933Trade accounts payable

Related parties 7 3,552,827 4,832,129 14,256,229 44,374,631Unrelated parties 291,652,985 290,382,605 154,294,152 116,218,896

Total trade accounts payable 295,205,812 295,214,734 168,550,381 160,593,527Amounts due to and advance from related parties 7 41,585,856 29,258,759 6,228,231 3,381,154Current portion of long-term loans from banks 17 54,269,700 233,803,152 - -Short-term loans from related parties 7 264,286,040 263,786,040 302,500,000 277,500,000Current portion of liabilities under

finance lease agreements 18 22,696,759 20,129,990 - -Other current liabilities 19 206,711,318 258,848,583 98,081,766 101,414,476Total current liabilities 2,140,961,764 1,828,953,678 1,182,258,950 1,041,518,090Non-current liabilitiesLong-term loans from banks - net of current portion 17 - 54,269,700 - -Liabilities under finance lease agreements

- net of current portion 18 45,152,400 59,823,996 - -Other non-current liabilities

Deferred income 13.5 11,703,438 15,626,018 - -Others 2,055,836 1,822,944 1,095,000 895,000

Total other non-current liabilities 13,759,274 17,448,962 1,095,000 895,000Total non-current liabilities 58,911,674 131,542,658 1,095,000 895,000Total liabilities 2,199,873,438 1,960,496,336 1,183,353,950 1,042,413,090




Balance sheets (Continued)As at 31 December 2008 and 2007

(Unit: Baht)



Note 2008 2007 2008 2007

Shareholdersû equityShare capital

Registered720,000,000 ordinary shares of Baht 1 each 20 720,000,000 720,000,000 720,000,000 720,000,000Issued and fully paid up600,000,000 ordinary shares of Baht 1 each 600,000,000 600,000,000 600,000,000 600,000,000

Share premium 1,135,360,502 1,135,360,502 1,135,360,502 1,135,360,502Excess of cost of investment over book value

of the subsidiary as at acquisition date 12.1.1 (737,577,642) (737,577,642) - -Unrealised gain

Revaluation surplus on land 1,538,979 1,538,979 1,538,979 1,538,979Revaluation surplus on building and buildingimprovement 23 171,417 257,177 171,417 257,177

Translation adjustment (6,874) (27,764) - -Retained earnings

Appropriated - statutory reserve 24 45,101,729 42,924,625 45,101,729 42,924,625Unappropriated 305,232,579 226,392,170 217,405,118 205,954,374

Equity attributable to the Companyûs shareholders 1,349,820,690 1,268,868,047 1,999,577,745 1,986,035,657Minority interest - equity attributable to minority

shareholders of subsidiaries 6,658,757 5,569,796 - -Total shareholdersû equity 1,356,479,447 1,274,437,843 1,999,577,745 1,986,035,657Total liabilities and shareholdersû equity 3,556,352,885 3,234,934,179 3,182,931,695 3,028,448,747



Income statementsFor the years ended 31 December 2008 and 2007

(Unit: Baht)



Note 2008 2007 2008 2007

RevenuesSales income 1,691,026,451 1,134,611,568 866,886,910 761,407,869Service income 1,175,566,035 991,862,680 396,791,190 359,743,773Other income 27 33,501,034 51,600,906 103,095,027 125,415,174Total revenues 2,900,093,520 2,178,075,154 1,366,773,127 1,246,566,816ExpensesCosts of sales 1,331,457,992 860,210,012 779,381,487 631,275,035Costs of services 903,540,051 708,195,233 295,431,818 281,246,669Selling expenses 142,607,389 118,357,697 61,615,629 58,987,258Administrative expenses 269,120,505 245,772,263 105,869,121 95,192,177Other expenses 17,119,650 1,802,523 14,083,596 550,152Total expenses 2,663,845,587 1,934,337,728 1,256,381,651 1,067,251,291Income before finance cost and

corporate income tax 236,247,933 243,737,426 110,391,476 179,315,525Finance cost 29 (109,905,126) (103,184,171) (65,295,916) (50,809,385)Income before corporate income tax 126,342,807 140,553,255 45,095,560 128,506,140Corporate income tax (14,322,093) (28,487,785) (1,553,472) (20,187,891)Net income for the year 112,020,714 112,065,470 43,542,088 108,318,249

Net inocme attributable to:Equity holders of the parent 110,931,753 111,917,127 43,542,088 108,318,249Minorityinterests of the subsidiaries 1,088,961 148,343

112,020,714 112,065,470

Earnings per share 31Basic earnings per share

Net income attributable to equity holdersof the parent 0.18 0.19 0.07 0.18




Statements of changes in shareholdersû equityFor the years ended 31 December 2008 and 2007

(Unit: Baht)

Consolidated financial statements

Equity attributable to the parentûs shareholdersIssued and Share Excess of Revaluation Revaluation Translation Retained earnings Total equity Minority Total

fully paid premium cost of surplus on surplus on adjustment Appropriated- Unappropriated attributaable interests

up share investment assets buliding and statutory to the

capital over book improvement reserve parentûs

value of the shareholders

subsidiary

Balance as at 31 December 2006 600,000,000 1,135,360,502 (675,700,000) 1,538,979 342,937 - 37,508,712 251,805,196 1,350,856,326 5,421,453 1,356,277,779

Income and expenses recognised

directly in equity

Excess of investments in subsidiary

companies arising as a result of

additional purchase of investments

in the subisidiary companies at a

price higher than the net book

valud of the subsidiary companies

at the acquisition date

net (Note 12.1) - - (61,877,642) - - - - - (61,877,642) - (61,877,642)

Decrease in revaluation surplus on building

and building improvement (Note 23) - - - - (85,760) - - 85,760 - - -

Translation adjustment - - - - - (27,764) - - (27,764) - (27,764)

Net income and expenses

recognised directly in equity - - (61,877,642) - (85,760) (27,764) - 85,760 (61,905,406) - (61,905,406)

Net income for the year - - - - - - - 111,917,127 111,917,127 148,343 112,065,470

Total income and expenses

for the year - - (61,877,642) - (85,760) (27,764) - 112,002,887 50,011,721 148,343 50,160,064

Unappropriated retained earnings

transferred to statutory

reserve (Note 24) - - - - - - 5,415,913 (5,415,913) - - -

Dividend paid (Note 25) - - - - - - - (132,000,000) (132,000,000) - (132,000,000)

Balance as at 31 December 2007 600,000,000 1,135,360,502 (737,577,642) 1,538,979 257,177 (27,764) 42,924,625 226,392,170 1,268,868,047 5,569,796 1,274,437,843



(Unit: Baht)


Equity attributable to the parentûs shareholdersIssued and Share Excess of Revaluation Revaluation Translation Retained earnings Total equity Minority Total

fully paid premium cost of surplus on surplus on adjustment Appropriated- Unappropriated attributaable interests

up share investment assets buliding and statutory to the

capital over book improvement reserve parentûs

value of the shareholders

subsidiary


Income and expenses recognised

directly in equity


and building improvement (Note 23) - - - - (85,760) - - 85,760 - - -

Translation adjustments - - - - - 20,890 - - 20,890 - 20,890

Net income and expenses

recognised directly in equity - - - - (85,760) 20,890 - 85,760 20,890 - 20,890

Net income for the year - - - - - - - 110,931,753 110,931,753 1,088,961 112,020,714

Total income and expenses

for the year - - - - (85,760) 20,890 - 111,017,513 110,952,643 1,088,961 112,041,604

Unappropriated retained earnings

transferred to statutory

reserve (Note 24) - - - - - - 2,177,104 (2,177,104) - - -

Dividend paid (Note 25) - - - - - - - (30,000,000) (30,000,000) - (30,000,000)


Statements of changes in shareholdersû equity (Continued)

For the years ended 31 December 2008 and 2007






(Unit: Baht)

Separate financial statements

Issued and Share Revaluation Revaluation Retained earnings Total

fully paid up premium surplus on surplus on Appropriated Unappropriated

share capital assets building and -statutory

improvement reserve

Balance as at 31 December 2006 600,000,000 1,135,360,502 1,538,979 342,937 37,508,712 234,966,278 2,009,717,408

Income and expenses recognised directly in equity


and building improvement (Note 23) - - - (85,760) - 85,760 -

Net income and expenses recognised directly in equity - - - (85,760) - 85,760 -

Net income for the year - - - - - 108,318,249 108,318,249

Total income and expenses for the year - - - (85,760) - 108,404,009 108,318,249

Unappropriated retained earnings transferred to

statutory reserve (Note 24) - - - - 5,415,913 (5,415,913) -

Dividend paid (Note 25) - - - - - (132,000,000) (132,000,000)




(Unit: Baht)


Issued and Share Revaluation Revaluation Retained earnings Total

fully paid up premium surplus on surplus on Appropriated Unappropriated

share capital assets building and -statutory

improvement reserve


Income and expenses recognised directly in equity


and building improvement (Note 23) - - - (85,760) - 85,760 -

Net income and expenses recognised directly in equity - - - (85,760) - 85,760 -

Net income for the year - - - - - 43,542,088 43,542,088

Total income and expenses for the year - - - (85,760) - 43,627,848 43,542,088

Unappropriated retained earnings transferred to

statutory reserve (Note 24) - - - - 2,177,104 (2,177,104) -

Dividend paid (Note 25) - - - - - (30,000,000) (30,000,000)







Cash flows statementsFor the years ended 31 December 2008 and 2007

(Unit: Baht)



Note 2008 2007 2008 2007

Cash flows from operating activitiesNet income before tax 126,342,807 140,553,255 45,095,560 128,506,140Adjustments to reconcile net income before tax to

net cash provided by (paid from) operating activities:Depreciation 13 343,213,795 276,461,200 54,401,452 47,513,102Amortisation of prepaid IT service fee to

parent company 15 8,385,578 8,153,870 1,309,327 1,309,327Amortisation of deferred right to the use of

communications equipment 14 29,100,969 27,623,225 29,100,758 27,623,225Amortisation of excess of net book value of

subsidiaries over acquisition cost of investments - 71,754 - -Amortisation of deferred income from sales and

less back (3,922,580) - - -Bad debts and doubtful debts (Reversal) 1,778,919 885,100 (480,333) 583,059Allowance for obsoleted inventories (Reversal) 9 (5,231,051) (16,477,420) 43,154 (17,883,633)Allowance for obsoleted construction in progress 325,000 - - -Transfer assets to expenses 669,225 - - -Write-off and allowance for withholding tax

deducted at source 3,036,055 (2,322,848) - (2,322,848)Write-off assets 229,637 - - -Gains on compensation receipt from insurance 13 (74,085) (87,722) - -Gains on disposals of equipments 13 (2,448,683) (2,224,798) (28,151) (295,129)Unrealised (gains) losses on exchange 435,975 (351,709) 140,944 (175,299)(Gains) losses on sale and the change in value of

investment in trading securities 6 14,083,596 (4,350,087) 14,083,596 (4,350,087)Amortisation of deferred interest under

finance lease agreements 4,027,802 1,845,343 - -Dividend received from subsidiary - - (44,999,946) (39,999,952)Interest income (732,701) (851,688) (2,449,341) (1,614,957)Interest expense 99,411,533 92,793,610 58,382,179 46,374,544

Income before changes in operating assetsand liabilities 618,631,791 521,721,085 154,599,199 185,267,492



Cash flows statements (Continued)For the years ended 31 December 2008 and 2007

(Unit: Baht)



Note 2008 2007 2008 2007

Cash flows from operating activities (continued)Decrease (increase) in operating assets:

Purchase of short-term investment intrading securities 6 (15,522,194) (89,758,881) (15,522,194) (89,758,881)

Proceed from sales of short-term investment intrading securities 6 3,822,896 73,148,908 3,822,896 73,148,908

Trade accounts receivable - related parties (8,822,492) 23,718,361 (68,642,117) 14,843,900Trade accounts receivable - unrelated parties (233,254,269) 283,540,699 (31,872,393) (13,163,628)Accrued income (67,681,613) (129,126,525) 20,539,031 (165,439,924)Inventories (227,147,643) (2,449,367) (152,387,925) (47,722,958)Amounts due from and advances to related parties 43,253 (1,592,047) 360,253 (1,152,476)Other current assets (126,354,051) 88,244,206 (75,730,277) 58,424,980Other non - current assets (8,144,870) 15,606,376 (1,116,794) 13,068,447

Increase (decrease) in operating liabilities:Trade accounts payable - related parties (1,279,302) (24,195,927) (30,118,402) 41,155,584Trade accounts payable - unrelated parties 1,729,596 (102,326,740) 38,074,020 77,989,335Amounts due to and advances from related parties 12,327,097 19,028,845 1,704,615 35,628Other current liabilities (62,475,439) (91,787,027) (2,339,822) (34,540,394)Other non - current liabilities 232,892 309,551 200,000 (320,893)

Cash from (used in) operating activities (113,894,348) 584,081,517 (158,429,910) 111,835,120Cash paid for interest expense (88,135,596) (88,928,151) (56,703,073) (46,371,884)Cash paid for corporate income tax (59,538,117) (82,187,289) (20,122,051) (25,856,979)Cash received from refund withholding tax

deducted at source 20,971,802 16,687,533 - -Net cash from (used in) operating activities (240,596,259) 429,653,610 (235,255,034) 39,606,257





(Unit: Baht)



Note 2008 2007 2008 2007

Cash flows from investing activities(Increase) decrease in restricted bank deposits (351,488) 399,633 - -Purchase of equipment and communications equipment (90,128,454) (215,354,791) (18,200,876) (26,281,987)Cash received from insurance claims for equipment 13 - 341,629 - -Proceeds from sales of equipment 13 2,886,891 30,070,495 53,059 295,132Cash received from repayment of short-term loan

to related parties 7 - - 62,500,000 53,000,000Cash paid to provide short-term loans to

related parties 7 - - (37,500,000) (83,500,000)Increase in investment in subsidiary company - (11,176,004) (7,499,475) (46,540,825)Dividend received from subsidiary - - 44,999,946 39,999,952Interest received 663,340 864,481 1,663,592 1,403,411Net cash from (used in) investing activities (86,929,711) (194,854,557) 46,016,246 (61,624,317)Cash flows from financing activitiesIncrease (decrease) in bank overdrafts (10,917,750) 22,462,704 (9,324,529) 9,324,529Proceeds from short-term loans from bank 2,459,413,402 1,396,656,950 1,343,414,805 730,568,719Cash paid to settle short-term loans from banks (1,887,750,354) (1,306,133,880) (1,227,332,424) (390,532,512)Increase (decrease) in trust receipts (32,591,147) (6,993,514) 1,372,078 (12,592,216)Proceeds from short-term loans from related parties 7 4,000,000 - 213,400,000 132,500,000Repayment of short-term loans from related parties 7 (3,500,000) - (188,400,000) (160,900,000)Payment of short-term loan from director - (3,420,000) - -Cash received from increase in liabilities under

finance lease agreement - 50,000,000 - -Cash paid to settle long-term loans from bank 17 (233,803,152) (173,364,842) - (2,509,072)Payment of liabilities under finance lease agreements (25,151,633) (13,193,391) - -Dividend paid 25 (30,000,000) (132,000,000) (30,000,000) (132,000,000)Net cash from (used in) financing activities 239,699,366 (165,985,973) 103,129,930 173,859,448Increase (decrease) in translation adjustments 20,890 (27,764) - -Net increase (decrease) in cash and

cash equivalents (87,805,714) 68,785,316 (86,108,858) 151,841,388Cash and cash equivalents at beginning of year 215,494,883 146,709,567 167,571,672 15,730,284Cash and cash equivalents at end of year 127,689,169 215,494,883 81,462,814 167,571,672




(Unit: Baht)



2008 2007 2008 2007

Supplemental cash flows informationNon-cash items:

Transfer inventories to equipment 109,618,640 - 97,267,216 -Transfer assets to inventories 3,822,300 - - -Transfer communications equipment not

yet installed to equipment 187,891 - 187,891 -Transfer advance to supplier to equipment 1,531,740 - 1,531,740 -Deferred income from sales and lease back 11,703,438 15,626,018 - -Adjust assets value from decreasing payable 755,483 - - -Asset acquired under finance lease agreement 9,019,004 34,471,742 - -




1. General information1.1 Corporate information

Samart Telcoms Public Company Limited (çthe Companyé) is a public companyincorporated and domiciled in Thailand. Its parent company is Samart CorporationPublic Company Limited, which was incorporated in Thailand. The Company isprincipally engaged in the satellite telecommunications business and its registeredaddress is at 59 Moo 2, Phaholyothin Road, Tambol Klong-Nueng, Amphur Klong-Luang, Pathumthani.

1.2 Economic crisisThe financial crisis experienced by the United States of America over the past

year has had far reaching adverse effect on the global economy as evidenced bysharp falls in share prices worldwide, tight squeeze on credit including interbanklending, failures of large financial institutions and reduced consumer confidence. Thecrisis has affected substantially business and financial plans of Thailand enterprisesand asset value. Despite efforts made by governments of many countries to containthe crisis, it remains uncertain as to when the global economy will return to itsnormalcy. These financial statements have been prepared on the bases of factscurrently known to the Company, and on estimates and assumptions currentlyconsidered appropriate. However, they could be adversely affected by an array offuture events.

2. Basis of preparation2.1 The financial statements have been prepared in accordance with accounting

standards enunciated under the Accounting Profession Act B.E. 2547 and theirpresentation has been made in compliance with the stipulations of the Notification ofthe Department of Business Development dated 14 September 2001, issued underthe Accounting Act B.E. 2543.

The financial statements in Thai language are the official statutory financialstatements of the Company. The financial statements in English language have beentranslated from such financial statements in Thai language.

The financial statements have been prepared on a historical cost basis exceptwhere otherwise disclosed in the accounting policies.

2.2 Basis of consolidationa) The consolidated financial statements include the financial statements of Samart

Telcoms Public Company Limited (çthe Companyé) and the following subsidiarycompanies (çthe subsidiariesé).

Notes to consolidated financial statementsFor the years ended 31 December 2008 and 2007


Companyûs name Nature of business Country of Percentage of Assets as a Revenues as a

incorporation shareholding percentage to the percentage to the

consolidated total consolidated total

assets as at revenues for the year

31 December ended 31 December

2008 2007 2008 2007 2008 2007Percent Percent Percent Percent Percent Percent

Samart Communication Design and installation of Thailand 100 100 27 33 21 26Services Co., Ltd. communication, network public

rural telephone projectPosnet Co., Ltd. Electronic fund transfer Thailand 100 100 3 4 3 5Thai Trade Net Co., Ltd. Electronic data interchange Thailand 100 100 1 2 3 2Samart Broadband Services Broadband data interchange Thailand 100 100 2 2 - 5Co., Ltd. servicesSamart Comtech Co., Ltd. Design and installation of Thailand 100 100 25 24 26 19

telecommunications networkOasis Consulting Co., Ltd. Computer systems consultation Thailand 70 70 1 1 3 2

and installation of SAPSmarterware Co., Ltd. Commercial-off-the - shelf Thailand 100 100 1 - 1 -

software development andconsultation on softwareapplication development

Samart Telecommunication Provision of VoIP and fully- Cambodia 100 100 - - - -(Cambodia) Co., Ltd. integrated ICT outsourcing

servicesSamart Infonet Co., Ltd. Provision of internet services Thailand 100 100 9 5 12 3

b) Subsidiaries are fully consolidated as from the date of acquisition, being thedate on which the Company obtains control, and continue to be consolidateduntil the date when such control ceases.

c) The financial statements of the subsidiaries are prepared for the same reportingperiod as the parent company, using consistent significant accounting policies.

d) The financial statements of overseas subsidiary company is translated into ThaiBaht at the closing exchange rate as to assets and liabilities, and at monthlyaverage exchange rates as to revenues and expenses. The resultant differencesare shown under the caption of çTranslation adjustmenté in shareholdersû eq-uity.

e) Material balances and transactions between the Company and its subsidiarycompanies have been eliminated from the consolidated financial statements.

f) Minority interests represent the portion of net income or loss and net assets ofthe subsidiaries that are not held by the Company and are presented separatelyin the consolidated income statement and within equity in the consolidatedbalance sheet.

g) For the book of account, upon acquisition of subsidiaries which under commoncontrol (purchase shares from parent company), the excess of the net asset



value (at fair value) at the acquisition date over the cost of the investment hasbeen presented as shareholderûs equity in balance sheet under çExcess of costof investment over book value of the subsidiariesé.

2.3 The separate financial statements, which present investments in subsidiaries pre-sented under the cost method, have been prepared solely for the benefit of the public.

3. Adoption of new accounting standards3.1 Accounting standards which are effective for the current year

The Federation of Accounting Professions has issued Notification No. 9/2550,

38/2550 and 62/2550 mandating the use of new accounting standards as follows:

TAS 25 (revised 2007) Cash Flow Statements

TAS 29 (revised 2007) Leases

TAS 31 (revised 2007) Inventories

TAS 33 (revised 2007) Borrowing Costs

TAS 35 (revised 2007) Presentation of Financial Statements

TAS 39 (revised 2007) Accounting Policies, Changes in Accounting Estimatesand Errors

TAS 41 (revised 2007) Interim Financial Reporting

TAS 43 (revised 2007) Business Combinations

TAS 49 (revised 2007) Construction Contracts

TAS 51 Intangible Assets

These accounting standards become effective for the financial statements for

fiscal years beginning on or after 1 January 2008. The management has assessed the

effect of these standards and believes that the ten accounting standards above do

not have any significant impact on the financial statements for the current period.

3.2 Accounting standards which are not effective for the current year

The Federation of Accounting Professions has also issued Notification No. 86/

2551 mandating the use of new accounting standards as follows:

TAS 36 (revised 2007) Impairment of Assets

TAS 54 (revised 2007) Non-current Assets Held for Sale and Discontinued Operations

These accounting standards will become effective for the financial statements

for fiscal years beginning on or after 1 January 2009. The management has assessed

the effect of these standards and believes that they will not have any significant

impact on the financial statements for the year in which they are initially applied.


4. Significant accounting policies4.1 Revenue recognition

Sales of goodsSales of goods are recognised when the significant risks and rewards of own-

ership of the goods have passed to the buyer. Sales are the invoiced value, excludingvalue added tax, of goods supplied after deducting discounts and allowances.

Rendering of servicesService revenue is recognised when services have been rendered taking into

account the stage of completion.

Transponder rental incomeTransponder rental income is recognised as revenue on the monthly accrual

basis in accordance with the payments due under the agreement.

Sales of equipment including designation and installationSales of equipment including designation and installation are recognised as

income by reference to the stage of completion.

Interest incomeInterest income is recognised on an accrual basis based on the effective inter-

est rate.

DividendsDividends are recognised when the right to receive the dividends is established.

4.2 Cash and cash equivalentsCash and cash equivalents consist of cash in hand, cash at bank, and all highly

liquid investments with an original maturity of three months or less and not subject towithdrawal restrictions.

4.3 Trade accounts receivableTrade accounts receivable are stated at the net realisable value. Allowance for

doubtful accounts is provided for the estimated losses that may be incurred in collec-tion of receivables. The allowance is generally based on collection experiences andanalysis of debt aging.

4.4 InventoriesInventories are valued at the lower of average cost and net realisable value.The net realisable value of inventory is estimated from the estimated selling

price in the ordinary course of business, less the estimated costs to complete thesale.

Allowance for inventory obsolescence will be set up for old, obsolete, slowmoving or deteriorated inventories.



4.5 Investmentsa) Investments in securities held for trading are presented at fair value. Gains or

losses arising from changes in the carrying amounts of securities are includedin determining income.

b) Investments in subsidiary companies are accounted for in the separate financialstatements using the cost method.The fair value of marketable securities is based on the latest bid price of the

last working day of the year as quoted on the Stock Exchange of Thailand.The weighted average method is used for computation of the cost of invest-

ments.

4.6 Communications equipment not yet installedCommunications equipment not yet installed is valued at lower of average cost

or net realisable value.No depreciation is provided for equipment.

4.7 Property, plant and equipment /DepreciationLand is stated at revalued amount. Building and building improvement are

stated at revalued amount less accumulated depreciation and allowance for loss on

impairment of assets (if any). Equipment is stated at cost or less accumulated depre-

ciation and allowance for loss on impairment of assets (if any).

Land, building and building improvement are initially recorded at cost on the

acquisition date, and subsequently revalued by an independent professional appraiser

to their fair values. Revaluations are made with sufficient regularity to ensure that the

carrying amount does not differ materially from fair value at the balance sheet date.

Differences arising from the revaluation are dealt with in the financial state-

ments as follows:

- When an assetûs carrying amount is increased as a result of a revaluation of the

Companyûs assets, the increase is credited directly to equity under the heading

of çRevaluation surplus on assetsé. However, a revaluation increase will be

recognised as income to the extent that it reverses a revaluation decrease of

the same asset previously recognised as an expense.

- When an assetûs carrying amount is decreased as a result of a revaluation of

the Companyûs assets, the decrease is recognised as an expense in the income

statement. However, a revaluation decrease is to be charged directly against

the related çRevaluation surplus on assetsé to the extent that the decrease

does not exceed the amount held in the çRevaluation surplus on assetsé in

respect of those same assets. Any excess amount is to be recognised as an

expense in the income statement.


Depreciation of plant and equipment is calculated by reference to their costs orthe revalued amounts, on the straight-line basis over the following estimated usefullives:Building - 20 yearsBuilding improvement - 10 yearsTelecommunication and tooling equipment - 3 and 5 yearsFurniture and office equipment - 5 yearsMotor vehicles - 5 years

The depreciation is dealt with in the financial statements as follows:- Depreciation attributed to the original cost portion is included in determining

income.- Depreciation attributed to the surplus portion is deducted against revaluation

surplus in shareholdersû equity.No depreciation is provided on telecommunication equipment under installation.

4.8 Intangible assetsIntangible assets acquired in a business combination are recognised at fair

value on the date of acquisition. Other acquired intangible assets are measuredat cost. Following initial recognition, intangible assets are carried at cost less anyaccumulated amortisation and any accumulated impairment losses (if any).

Intangible assets with finite lives are amortised on a systematic basis over theeconomic useful life and tested for impairment whenever there is an indication thatthe intangible asset may be impaired. The amortisation period and the amortisationmethod of such intangible assets are reviewed at least at each financial year end. Theamortisation expense is charged to the income statement.

A summary of the intangible assets with finite useful lives is as follows:Useful lives

Right to use of communications equipment Period of the concession(10, 15 and 20 years)

4.9 GoodwillGoodwill is initially measured at cost, which is the excess of the cost of the

business combination over the Companyûs share in the net fair value of the acquireeûsidentifiable assets, liabilities and contingent liabilities. If the cost of acquisition is lessthan the fair value of the net assets of the subsidiary acquired, the difference isrecognised directly in the income statement.

Goodwill is carried at cost less any accumulated impairment losses. Goodwill istested for impairment annually and when circumstances indicate that the carryingvalue may be impaired.



For the purpose of impairment testing, goodwill acquired in a businesscombination is allocated to each of the Companyûs cash generating units (or groupof cash-generating units) that are expected to benefit from the synergies of thecombination. The Company estimates the recoverable amount of each cash-generat-ing unit (or group of cash-generating units) to which the goodwill relates. Where therecoverable amount of the cash-generating unit is less than the carrying amount, animpairment loss is recognised. Impairment losses relating to goodwill cannot bereversed in future periods.

4.10 Related party transactionsRelated parties comprise enterprises and individuals that control, or are con-

trolled by, the Company, whether directly or indirectly, or which are under commoncontrol with the Company.

They also include enterprises and individuals which directly or indirectly owna voting interest in the Company that gives them significant influence over theCompany, key management personnel, directors and officers with authority in theplanning and direction of the Companyûs operations.

4.11 Long-term leasesFinance leases

Leases of equipment which transfer substantially all the risks and rewards ofownership are classified as finance leases. Finance leases are capitalised at the lowerof the fair value of the leased assets and the present value of the minimum leasepayments. The outstanding rental obligations, net of finance charges, are includedin other long-term payables, while the interest element is charged to the incomestatements over the lease period. The property, plant or equipment acquired underfinance leases is depreciated over the useful life of the asset.

Operating leasesLeases of assets where a significant portion of the risks and rewards of owner-

ship are retained by the lessor and classified as operating leases. Payments madeunder operating leases are recognised as expenses to the income statements overthe lease period.

Sale and leasebackIn cases where assets are sold and then leased back, whereby the transaction

is a kind of finance lease, any excess of sales proceeds over the carrying amount ofthe assets is recorded as deferred revenue and amortised over the lease term.


4.12 Foreign currenciesTransactions in foreign currencies are translated into Baht at the exchange rate

ruling at the date of the transaction. Monetary assets and liabilities denominated inforeign currencies are translated into Baht at the exchange rate ruling at the balancesheet date.

Gains and losses on exchange are included in determining income.

4.13 Impairment of assetsAt each reporting date, the Company and its subsidiaries perform impairment

reviews in respect of the property, plant and equipment and other intangible assetswhenever events or changes in circumstances indicate that an asset may be impaired.The Company and its subsidiaries also carry out annual impairment reviews in respectof goodwill. An impairment loss is recognised when the recoverable amount of anasset, which is the higher of the assetûs fair value less costs to sell and its value inuse, is less than the carrying amount. In determining value in use, the estimated futurecash flows are discounted to their present value using a pre-tax discount rate thatreflects current market assessments of the time value of money and the risks specificto the asset. In determining fair value less costs to sell, an appropriate valuation modelis used. These calculations are corroborated by a valuation model that, based oninformation available, reflects the amount that the Company could obtain from thedisposal of the asset in an armûs length transaction between knowledgeable, willingparties, after deducting the costs of disposal.

An impairment loss is recognised in the income statement. However in caseswhere property, plant and equipment was previously revalued and the revaluation wastaken to equity, a part of such impairment is recognised in equity up to the amount ofthe previous revaluation.

4.14 Employee benefitsSalary, wages, bonuses and contributions to the social security fund and provi-

dent fund are recognised as expenses when incurred.

4.15 ProvisionsProvisions are recognised when the Company and its subsidiaries have a present

obligation as a result of a past event, it is probable that an outflow of resourcesembodying economic benefits will be required to settle the obligation, and a reliableestimate can be made of the amount of the obligation.

4.16 Income taxThe Company and its subsidiaries in Thailand calculate corporate income tax

based on taxable profits determined in accordance with tax legislation.Overseas subsidiaries calculate corporate income tax in accordance with tax

rate regulated in tax law of those countries.



4.17 DerivativesForward exchange contracts

Receivables and payables arising from forward exchange contracts are trans-lated into Baht at the rates of exchange ruling at the balance sheet date. Gains andlosses from the translation are included in determining income.

5. Significant accounting judgments and estimatesThe preparation of financial statements in conformity with generally accepted ac-

counting principles at times requires management to make subjective judgments and esti-mates regarding matters that are inherently uncertain. These judgements and estimatesaffect reported amounts and disclosures and actual results could differ. Significant judg-ments and estimates are as follows:Construction contracts

The Company and its subsidiaries recognise contract revenue by reference to thestage of completion of the contract activity, when the outcome of a construction contractcan be estimated reliably. The stage of completion is measured by reference to the propor-tion that contract costs incurred for work performed to date bear to the estimated totalcontract costs. Significant assumptions are required to estimate the total contract cost andthe recoverable variation works that will affect the stage of completion. The management isrequired to make judgement and estimates based on past experience and knowledge of theproject engineers.

LeasesIn determining whether a lease is to be classified as an operating lease or finance

lease, the management is required to use judgement regarding whether significant risk andrewards of ownership of the leased asset has been transferred, taking into considerationterms and conditions of the arrangement.

Allowance for doubtful accountsIn determining an allowance for doubtful accounts, the management needs to make

judgement and estimates based upon, among other things, past collection history, agingprofile of outstanding debts and the prevailing economic condition.

Property plant and equipment/DepreciationIn determining depreciation of plant and equipment, the management is required to

make estimates of the useful lives and salvage values of the Company and its subsidiariesûplant and equipment and to review estimate useful lives and salvage values when there areany changes.

The Company and its subsidiaries measure land, buildings and building improvementat revalued amounts. Such amounts are determined by the independent valuer using the


market approach for land and the income approach for buildings. The valuation involvescertain assumptions and estimates.

In addition, the management is required to review property, plant and equipment for

impairment on a periodical basis and record impairment losses in the period when it is

determined that their recoverable amount is lower than the carrying amount. This requires

judgements regarding forecast of future revenues and expenses relating to the assets

subject to the review.

Goodwill and intangible assets

The initial recognition and measurement of goodwill and other intangible assets, and

subsequent impairment testing, require management to make estimates of cash flows to be

generated by the asset or the cash generating units and to choose a suitable discount rate

in order to calculate the present value of those cash flows.

6. Short-term investment in trading securitiesAs at 31 December 2008 and 2007, the Company has short-term investments in

trading securities as follows:

2008 2007

Number Number

of shares Cost Fair value of shares Cost Fair value

(Shares) (Baht) (Baht) (Shares) (Baht) (Baht)

Samart I-Mobile Public Company Limited 69,692,800 119,767,962 124,750,112 6,718,600 114,904,770 121,606,660

Salee Industry Public Company Limited 1,550,000 7,991,320 3,379,000 1,000,000 5,213,910 5,200,000

Ascon Construction Public Company Limited 1,050,000 5,975,431 4,242,000 1,050,000 5,975,431 6,352,500

Rich Asia Steel Public Company Limited 5,000,000 4,311,503 350,000 - - -

S.E.C. Auto Sales and Services Public

Company Limited 290,000 912,154 - - - -

Thaicom Public Company Limited (formerly

known as çShin Satellite Public

Company Limitedé) 100,000 770,806 290,000 100,000 770,806 1,010,000

Siam Sport Syndicate Public Company Limited 291,666 721,079 403,750 250,000 657,747 750,000

EMC Public Company Limited - - - 200,000 838,236 880,000

Total 140,450,255 133,414,862 128,360,900 135,799,160

Add(less): Change in value (7,035,393) - 7,438,260 -

Total short-term investment in

trading securities 133,414,862 133,414,862 135,799,160 135,799,160



Movement of the short-term investments in trading securities account as at 31

December 2008 are summarised below.(Unit: Baht)

Balance as at 1 January 2008 135,799,160Purchase during year 15,522,194Disposals during year:

Proceed from sales (3,822,896)Add: Loss on disposals (76,741) (3,899,637)

Loss on change in value (14,006,855)Balance as at 31 December 2008 133,414,862

7. Related party transactionsDuring the years, the Company and its subsidiaries had significant business transac-

tions with related parties, which have been concluded on commercial terms and bases

agreed upon between the Company and those related parties. The Company has a policy on

pricing with its related parties as specified below.

1. Sales prices are determining at market price, if market price not known sales price aredetermined at cost plus a margin not over 15 percent. However, the pricing policy is

subject to change depending on the type of business and market competition at the

time being.

2. Management fees and rental income are charged at the amount stipulated in the

relevant agreement.

3. Other services income and expenses are charged at the price mutually agreed upon.

4. IT service fees expenses to parent company are charged at the amount stated in the

agreement which parent company sets base on cost plus a margin not over 5 percent.

5. Interest on loans to and from related parties are charged at the Minimum Loan Rate

(MLR) and the Minimum Loan Rate (MLR) plus 1 percent per annum.

6. Guarantee fee is charged between the parties at a rate of 0.3 percent per annum.

7. Dividend income is recognised when declared.

8. Purchase of investments in Samart Infonet Company Limited from Samart Corpora-

tion Public Company Limited is fair value, which appraised by the Companyûs financial

advisor, based on discounted cash flow method.


Significant transactions between the Company and its related parties are

summarised below.(Unit: Million Baht)



2008 2007 2008 2007

Transactions with parent companyIT Service fee expense (Note 15) 29.1 28.2 4.5 4.5Sales and service income 12.7 4.1 0.2 0.3Other income - 2.8 - 0.1Sales of equipment 0.6 - - -Rental expenses 6.6 6.0 1.5 0.9Other expenses 20.9 19.1 5.3 2.9Interest expenses 21.3 20.3 8.3 8.4Purchase of investment (Note 12.1.1) - 18.0 - 18.0Transactions with subsidiaries(eliminated from the consolidated financial statements)Sales and service income - - 201.6 176.7Purchase of merchandise and service - - 63.1 41.2Purchase of equipment - - 0.6 -Rental income - - 2.6 2.6Management fee income - - 30.8 30.8Guarantee fee income - - 3.1 8.1Other income - - 7.6 7.8Interest income - - 2.4 1.5Other expenses - - 0.5 1.4Interest expenses - - 8.7 18.6Dividend income (note 12) - - 45.0 40.0Transactions with related companiesSales and service income 19.9 11.0 14.3 2.6Sales of equipment 0.6 - - -Other income - 0.1 - 0.1Purchase of merchandise and service 39.0 58.4 31.4 50.5Purchase of equipment 0.4 0.8 0.2 0.5Other expenses 2.9 4.8 1.1 2.0



As at 31 December 2008 and 2007, the balances of the accounts between the

Company and related parties are as follows:(Unit: Baht)



2008 2007 2008 2007

Trade accounts receivable - related partiesParent CompanySamart Corporation Public Co., Ltd. 21,096,942 10,828,063 - -SubsidiariesSamart Infonet Co., Ltd. - - 96,574,252 107,840Posnet Co., Ltd. - - 4,733,680 -Thai Trade Net Co., Ltd. - - 2,086,500 -Samart Communication Services Co., Ltd. - - 895,590 34,147,358Related companiesOne to One Contacts Co., Ltd. 2,649,362 3,401,507 481,500 1,458,537Samart I-Mobile Public Co., Ltd. 584,652 892,980 - -Samart Multimedia Co., Ltd. 241,178 352,993 - -Vilailuck Development Co., Ltd. 100,538 - - -Cambodia Air Traffic Service Co., Ltd. 46,224 - - -Suvarnabhumi Environment Care Co., Ltd. 41,605 - - -I-Sport Co., Ltd. 34,240 26,750 - -Brain Source Co., Ltd. 7,490 7,490 - -C-Mobile Sdn. Bhd. - 415,670 - 415,670Samart International Co., Ltd. - 75,435 - -Take A Look Co., Ltd. 30,000 8,025 - -I-Mobile Netplus Co., Ltd. - 1,605 - -Vision and Security System Co., Ltd. 779 - - -Total trade accounts receivable-related parties 24,833,010 16,010,518 104,771,522 36,129,405Amounts due from and advances to related partiesParent CompanySamart Corporation Public Co., Ltd. 5,953 2,824 5,953 2,824SubsidiariesPosnet Co., Ltd. - - 2,747,010 97,593Thai Trade Net Co., Ltd. - - 470,284 10,039Samart Infonet Co., Ltd. - - 420,382 180,635Samart Comtech Co., Ltd. - - 389,779 112,706Samart Broadband Services Co., Ltd. - - 215,250 -Samart Communication Services Co., Ltd. - - 213,050 3,594,403


(Unit: Baht)



2008 2007 2008 2007

Samart Telecommunication (Cambodia) Co., Ltd. - - 128,528 128,529Smarterware Co., Ltd. - - 9,070 755Oasis Consulting Co., Ltd. - - 19 260Related companiesThe Samart Engineering Co., Ltd. 4,850,872 4,853,547 4,850,872 4,853,547Vision and Security System Co., Ltd. 8,893 9,190 - -One to One Contacts Co., Ltd. 706 40,850 706 40,850Samart Multimedia Co., Ltd. - 1,370 - 1,370Samart International Co., Ltd. - 1,201 - 1,201Samart Interactive Media Co., Ltd. - 695 - 695Total amounts due from and advances to related parties 4,866,424 4,909,677 9,450,903 9,025,407Short-term loans to related partiesSubsidiariesPosnet Co., Ltd. - - 10,500,000 16,000,000Samart Infonet Co., Ltd. - - - 19,000,000Smarterware Co., Ltd. - - - 500,000Total short-term loans to subsidiaries - - 10,500,000 35,500,000Trade accounts payable- related partiesParent CompanySamart Corporation Public Co., Ltd. - 123,467 - -SubsidiariesSmarterware Co., Ltd. - - 6,922,900 -Samart Communication Services Co., Ltd. - - 2,866,904 1,033,184Samart Infonet Co., Ltd. - - 1,643,681 35,299,715Samart Comtech Co., Ltd. - - - 5,617,500Thai Trade Net Co., Ltd. - - - 1,009,738Related companiesThe Samart Engineering Co., Ltd. 1,812,411 1,895,656 1,648,336 1,150,296Samart I-Mobile Public Co., Ltd. 1,251,000 486,120 1,120,990 140,650Vision and Security System Co., Ltd. 400,046 1,344,861 - 80,982One to One Contacts Co., Ltd. 77,605 952,025 41,653 12,566Samart Multimedia Co., Ltd. 11,765 - 11,765 -Take A Look Co., Ltd. - 30,000 - 30,000Total trade accounts payable-related parties 3,552,827 4,832,129 14,256,229 44,374,631



(Unit: Baht)



2008 2007 2008 2007

Amounts due to and advances from related partiesParent companySamart Corporation Public Co., Ltd. 40,932,339 28,310,357 3,126,206 1,308,417SubsidiariesSamart Broadband Services Co., Ltd. - - 1,645,399 130,639Thai Trade Net Co., Ltd. - - 438,761 110,164Samart Communication Services Co., Ltd. - - 331,236 1,481,693Samart Comtech Co., Ltd. - - 294,781 272,887Samart Infonet Co., Ltd. - - 261,613 -Smarterware Co., Ltd. - - 33,459 -Related companiesVilailuck International Holding Co., Ltd. 340,282 193,656 90,926 77,354One to One Contacts Co., Ltd. 188,357 197,818 - -Samart I-Mobile Public Co., Ltd. 83,792 540,676 - -Samart Multimedia Co., Ltd. 21,186 3,500 - -The Samart Engineering Co., Ltd. 15,600 8,900 5,850 -Vilailuck Development Co., Ltd. 4,300 - - -Samart Interactive Media Co., Ltd. - 3,852 - -Total amounts due to and advances from related parties 41,585,856 29,258,759 6,228,231 3,381,154Short-term loan from related partiesParent CompanySamart Corporation Public Co., Ltd.

(Current portion of long-term loan) 264,286,040 263,786,040 103,000,000 103,000,000SubsidiariesSamart Communication Services Co., Ltd. - - 130,000,000 125,000,000Samart Broadband Services Co., Ltd. - - 35,000,000 19,000,000Samart Comtech Co., Ltd. - - 15,000,000 15,500,000Thai Trade Net Co., Ltd. - - 14,500,000 15,000,000Smarterware Co., Ltd. - - 5,000,000 -Total short-term loan from related parties 264,286,040 263,786,040 302,500,000 277,500,000

On 30 November 2005 Samart Comtech Company Limited, a subsidiary company

and Samart Corporation Public Company Limited, a parent company, entered into a debt

repayment memorandum, whereby both parties agreed to change the conditions and

period of debt repayment. Samart Comtech Company Limited (debtor) agreed to finish

the repayment of principal Baht 242.6 million and interest to Samart Corporation Public


Company Limited (creditor) within November 2008. Interest is to be charged at MLR plus 1

percent per annum and the memorandum stipulates that Samart Comtech Co., Ltd. (debtor)

is to commence settlement of the debt in January 2007.

Subsequently, during the year, Samart Comtech Co., Ltd. (debtor) submitted a letter

requesting that commencement of debt repayment period be postponed until Samart Comtech

Co., Ltd. (debtor) received cash from its customer (formerly a state enterprise). As at 31

December 2008, the outstanding balance of the loan is Baht 142 million (2007: Baht 142

million).

During the year, movement of short-term loans to related parties and short-term loans

from related parties are as follows:(Unit: Baht)


Balance as at Balance as at

1 January During the year 31 December

2008 Increase Decrease 2008

Short-term loan from related partiesParent companySamart Corporation Public Co., Ltd. 263,786,040 500,000 - 264,286,040Related partyCambodia Air Traffic Service Co., Ltd. - 3,500,000 3,500,000 -Total short-term loan from related parties 263,786,040 4,000,000 3,500,000 264,286,040

(Unit: Baht)





Short-term loans to related partiesSubsidiaries companiesPosnet Co., Ltd. 16,000,000 16,500,000 (22,000,000) 10,500,000Samart Infonet Co., Ltd. 19,000,000 7,000,000 (26,000,000) -Smarterware Co., Ltd. 500,000 - (500,000) -Samart Communication Services Co., Ltd. - 14,000,000 (14,000,000) -Total short-term loan to related parties 35,500,000 37,500,000 (62,500,000) 10,500,000



(Unit: Baht)





Short-term loan from related partiesParent companySamart Corporation Public Co., Ltd. 103,000,000 - - 103,000,000Subsidiaries companiesSamart Communication Services Co., Ltd. 125,000,000 130,000,000 (125,000,000) 130,000,000Samart Broadband Services Co., Ltd. 19,000,000 22,500,000 (6,500,000) 35,000,000Samart Comtech Co., Ltd. 15,500,000 21,000,000 (21,500,000) 15,000,000Thai Trade Net Co., Ltd. 15,000,000 25,400,000 (25,900,000) 14,500,000Smarterware Co., Ltd. - 10,500,000 (5,500,000) 5,000,000Samart Infonet Co., Ltd. - 4,000,000 (4,000,000) -Total short-term loans from related parties 277,500,000 213,400,000 (188,400,000) 302,500,000

Directors and managementûs remuneration

In 2008 the Company paid salaries, bonus, meeting allowance and gratuities to their

directors and management totaling Baht 18.9 million (2007: Baht 20.7 million).

Guarantee obligations with related parties

The Company had outstanding guarantees with its related parties as described in

Note 33.4 to the financial statements.


8. Trade accounts receivable and accrued income8.1 Trade accounts receivable

The balances of trade accounts receivable as at 31 December 2008 and 2007,

aged on the basis of due dates, are summarised below.(Unit: Baht)



Age of receivable 2008 2007 2008 2007Related partiesNot yet due 1,660,771 3,225,609 36,592,930 5,759,332Past dueUp to 3 months 3,761,713 3,215,172 3,516,020 515,876

3 - 6 months 3,547,574 4,152,200 64,405,772 28,716,6606 - 12 months 6,300,545 4,504,700 128,400 224,700Over 12 months 9,562,407 912,837 128,400 912,837

Total 24,833,010 16,010,518 104,771,522 36,129,405Unrelated partiesNot yet due 303,728,953 112,110,661 81,255,989 50,835,979Past due

Up to 3 months 197,384,580 157,366,667 40,229,687 17,385,2133 - 6 months 19,572,244 18,783,439 12,023,141 8,743,4326 - 12 months 38,304,484 37,245,071 10,780,250 29,670,349Over 12 months 63,518,258 63,748,412 46,622,683 52,424,539

Total 622,508,519 389,254,250 190,911,750 159,059,512Less: Allowance for doubtful debts (25,529,124) (23,750,205) (11,105,407) (11,605,895)Net 596,979,395 365,504,045 179,806,343 147,453,617Trade accounts receivable - net 621,812,405 381,514,563 284,577,865 183,583,022

The Company and the subsidiaries have transferred their collection rightsfrom projects to banks as collateral of loans from banks and bank guarantee. As at31 December 2008, the balance of the above accounts receivable included thereceivables that were transferred their collection rights to banks totaling approxi-mately Baht 166.5 million (2007: Baht 83.4 million) (Separate financial statements:Baht 49.8 million 2007: Baht 5.6 million).

At 31 December 2008, trade accounts receivable of the Company and itssubsidiaries included amounts of Baht 4.1 million (2007: Baht 6.1 million) (Separatefinancial statements: Baht 4.1 million 2007: Baht 6.1 million) receivable from financialinstitutions which were ordered to cease their operations by the authorities. TheCompany and its subsidiaries have already provided full allowance for doubtfulaccounts for these amounts.

As at 31 December 2008, the Company has an unrelated accounts receivablebalance of Baht 51.1 million (2007: Baht 58.2 million), of which Baht 36.2 million(2007: Baht 40.9 million) is more than 1 year past due. The Company has recorded



allowance for doubtful accounts of Baht 1.3 million (2007: Baht 1.3 million), whichmanagement believe is adequate in the current circumstances because the Companyhas been informed from such debtor in writing that the debtor is in the process ofcalling up payment of additional share capital from its shareholders and it will repay.During 2008, the Company received payment from such debtor of Baht 20 million. Inaddition, in February 2009, the Company received the installment of Baht 10 million.The management therefore believe that the Company can collect the remaining debtfrom such company.

8.2 Accrued incomeAs at 31 December 2008, the Company and its subsidiaries have outstanding

accrued income totaling Baht 914.1 million (Separate financial statements: Baht 277.4million). The balance mainly comprises accrued income of a subsidiary companyamounting to Baht 155.2 million (2007: Baht 471.3 million) relating to the sales andinstallation of communications equipment in the passenger terminal of SuvarnabhumiAirport for a company (formerly a state enterprise), of which Baht 155.2 million (2007:Baht 355.1 million) has been outstanding for more than one year since the subsidiaryrendered the related service. The subsidiary has already delivered all work to thecustomer. However, the subsidiary is in the process of negotiating collection andinvoicing with the customer and its management believe that the subsidiary hascompleted the delivery of service and performance in accordance with the conditionsin the contract throughout, and that since counterparty has issued notice of accept-ance of the work to the subsidiary, the subsidiary has continued to pursue collectionand was able to invoice a total of Baht 306.5 million and can collect whole amount inrespect of such project during the year, the subsidiaryûs management believe that thesubsidiary will be able to negotiate collection of the remaining debt from the counterparty.As at 31 December 2008, the subsidiary therefore did not set aside provision fordoubtful debt for the accrued income in the books of account.

9. Inventories(Unit: Baht)

Consolidated financial statementsCost Allowance of diminution Inventory-net

in value of inventory - stock obsolescence

2008 2007 2008 2007 2008 2007Finished goods 200,344,928 80,131,868 (3,498,630) (4,551,341) 196,846,298 75,580,527Work in process 129,073,452 123,051,407 (7,314,138) (11,492,478) 121,759,314 111,558,929Supplies 6,569,762 14,165,913 - - 6,569,762 14,165,913Goods in transit - 1,109,951 - - - 1,109,951Total 335,988,142 218,459,139 (10,812,768) (16,043,819) 325,175,374 202,415,320


(Unit: Baht)

Separate financial statementsCost Allowance of diminution Inventory-net

in value of inventory - stock obsolescence

2008 2007 2008 2007 2008 2007

Finished goods 101,692,164 16,450,537 (157,273) (114,119) 101,534,891 16,336,418Work in process 44,101,790 67,047,543 - - 44,101,790 67,047,543Supplies 1,857,148 8,844,422 - - 1,857,148 8,844,422Total 147,651,102 92,342,502 (157,273) (114,119) 147,493,829 92,228,383

10. Other current assetsBelow are details of other current assets as at 31 December 2008 and 2007

(Unit: Baht)



2008 2007 2008 2007

Advance to supplier 107,949,199 33,588,014 93,636,846 20,012,839Retention receivable 67,195,397 16,200,495 11,802,921 11,402,222Input tax refundable 10,189,383 2,010,126 8,089,103 -Others 21,851,987 30,495,659 9,011,720 16,926,992Total other current assets 207,185,966 82,294,294 122,540,590 48,342,053

11. Restricted bank depositsAs at 31 December 2008, the subsidiaries have pledged their saving deposit accounts

with the banks amounting to Baht 16.9 million (2007: Baht 16.5 million). These represent

fixed deposits pledged with the banks to secure credit facilities.



12. Investments in subsidiariesDetails of investments in subsidiaries are presented in separate financial statements

are as follows:(Unit: Baht)

Companyûs name Paid-up capital Shareholding Cost Dividend receivedpercentage during the yearû

2008 2007 2008 2007 2008 2007 2008 2007(Million (MillionBaht) Baht) (%) (%)

Samart Communication Services

Company Limited 500 500 100 100 499,999,400 499,999,400 44,999,946 39,999,952

Posnet Company Limited 72 72 100 100 71,999,930 71,999,930 - -

Thai Trade Net Company Limited 53 53 100 100 52,999,930 52,999,930 - -

Samart Broadband Services

Company Limited 55.25 55.25 100 100 55,249,983 55,249,983 - -

Samart Comtech Company Limited 225 225 100 100 900,700,000 900,700,000 - -

Oasis Consulting Company Limited 10 10 70 70 16,300,000 16,300,000 - -

Smarterware Company Limited 10 2.5 100 100 9,999,300 2,499,825 - -

Samart Infonet Company Limited 62 62 100 100 18,000,000 18,000,000 - -

Samart Telecommunication (Cambodia)

Company Limited 30,000 30,000 100 100 1,041,000 1,041,000 - -

USD USD

Total 1,626,289,543 1,618,790,068 44,999,946 39,999,952

12.1 Purchase of investments12.1.1 On 19 January 2005, the Companyûs Extraordinary General Meeting of the

shareholders passed resolutions approving the purchase of all current andfuture holdings of Samart Corporation Public Company Limited in shares ofSamart Infonet Company Limited, after the capital restructuring of Samart InfonetCompany Limited. This was to amount to not less than 17,654,000 shares, ornot less than 97 percent of the paid-in capital of that company (18,200,000shares). In addition, the meeting approved the purchase of indebtedness ofSamart Infonet Company Limited through the transfer of rights of claim ofSamart Corporation Public Company Limited over principal and interest amountingto Baht 70 million under the loan agreement between Samart CorporationPublic Company Limited (Lender) and Samart Infonet Company Limited(Borrower), after the capital restructuring.

On 28 September 2007, the Company entered into an agreement topurchase 24,760,894 shares of Samart Infonet Company Limited, representing99.84 percent of its registered capital after the capital restructuring, from SamartCorporation Public Company Limited (seller) at a price of Baht 18 million, whichis the fair value as appraised by the Companyûs financial advisor (in accordance


with the resolution passed by the Board of Directorûs Meeting held on 21September 2007). The Company had already paid all of them.

The purchase price of the investment exceeds the attributable netasset value of Samart Infonet Company Limited at the acquisition date byapproximately Baht 62 million.

Since the purchase of this investment is purchase of a businessunder common control, the Company presented the excess in the balancesheet under the caption çExcess of cost of investment over book value of thesubsidiary as at acquisition dateé. As at 31 December 2007, Samart InfonetCompany Limited has reduced its registered capital from Baht 248 million toBaht 62 million (in accordance with a resolution passed by the ExtraordinaryMeeting of shareholders of Samart Infonet Company Limited held on 20September 2007) in order to eliminate its deficit.

As a result of the purchase of investment in Samart Infonet CompanyLimited, the relationship of that company changed from a related company to asubsidiary of the Company. The consolidated balance sheet as at 31 December2007 and the consolidated income statement for the year then ended thereforeincorporated the balance sheet and operating result from the date on which theCompany obtains control of this company.

12.1.2 On 18 September 2006, a meeting of the Companyûs Board of Directors passedresolutions to approve of the purchase of the 999,940 shares of PortalnetCompany Limited currently held by a public company, representing 99.99percent of its registered and issued capital, amounting to Baht 140 million, andalso approved the purchase of indebtness of Portalnet Company Limited throughthe transfer of rights of claim of such public company amounting to Baht 628.7million under the loan agreement between such public company and PortalnetCompany Limited, at a total price of Baht 768.7 million together with anyadditional debt incurred from 1 September 2006 to the acquisition date. As at31 December 2008, the Company is in the process of considering the detailsand conditions of its acquisition of Portalnet Company Limited.

12.2 Established of new companies12.2.1 On 9 March 2006, a meeting of the Companyûs Board of Directors passed

a resolution to establish a new subsidiary named Telecom Clearing HouseCompany Limited to conduct telecommunications including networkmaintenance and satellite communications both domestically and overseas.This new subsidiary has an initial registered capital comprising 500,000 sharesof Baht 100 per share, or a total of Baht 50 million which is 25 percent calledup, with the Company to hold 99.99 percent. The subsidiary may increase itscapital or sell the shares held by the Company to other investors, but theCompany must retain a holding of at least 40 percent. As at 31 December 2008,the Company had not established such new subsidiary.



12.2.2 On 25 December 2007, a meeting of the Board of Directors of SmarterwareCo., Ltd., a subsidiary company, resolved to call up an additional 75 percent ofthe uncalled portion of its capital, or Baht 7.5 million. On 18 January 2008, theCompany paid for such share portion, as a result investment in such subsidiarywas Baht 10 million (100,000 ordinary shares of Baht 100 per share).

13. Property, plant and equipment(Unit: Baht)


Revaluation basis Cost basisLand Building Telecom- Furniture Moter Telecom- Total

and munication and office vehicles municationimprovement and tooling equipment equipment

equipment underinstallment

Cost/ Revalue amount

31 December 2007 28,200,000 63,562,396 1,667,427,422 227,544,490 47,513,911 161,064,561 2,195,312,780

Acquisitions - 710,600 80,943,527 10,164,177 2,608,000 4,491,517 98,917,821

Transfer in - - 243,893,863 4,009,218 - 110,271,381 358,174,462

Transfer out - - (3,108,079) (2,062,725) - (244,814,865) (249,985,669)

Disposals - - (54,887) (957,735) (7,601,450) - (8,614,072)

31 December 2008 28,200,000 64,272,996 1,989,101,846 238,697,425 42,520,461 31,012,594 2,393,805,322

Accumulated depreciation

31 December 2007 - 50,156,776 910,210,316 195,430,944 29,563,618 - 1,185,361,654

Depreciation for the year - 4,020,620 320,564,325 12,591,851 6,036,999 - 343,213,795

Transfer in - - 13,848 114,629 - - 128,477

Transfer out - - (237,562) (1,307,242) - - (1,544,804)

Depreciation on disposals - - (53,861) (898,775) (7,417,865) - (8,370,501)

31 December 2008 - 54,177,396 1,230,497,066 205,931,407 28,182,752 - 1,518,788,621

Allowance for impairment

31 December 2007 - - 35,340,557 - - - 35,340,557

Increase - - - - - 325,000 325,000

31 December 2008 - - 35,340,557 - - 325,000 35,665,557

Net book value

31 December 2007 28,200,000 13,405,620 721,876,549 32,113,546 17,950,293 161,064,561 974,610,569

31 December 2008 28,200,000 10,095,600 723,264,223 32,766,018 14,337,709 30,687,594 839,351,144

Depreciation for the year:

2007 (Baht 250 million included in cost of services and the balance in selling and administrative expenses) 276,461,200

2008 (Baht 317 million included in cost of services and the balance in selling and administrative expenses) 343,213,795


(Unit: Baht)


Revaluation basis Cost basisLand Building Telecom- Furniture Moter Telecom- Total

and munication and office vehicles municationimprovement and tooling equipment equipment

equipment underinstallment

Cost/ Revalue amount31 December 2007 28,200,000 51,501,175 288,143,440 57,132,191 9,276,057 602,667 434,855,530Acquisitions - - 15,126,751 2,474,126 600,000 - 18,200,877Transfer in - - 95,615,816 3,217,593 - 97,276,006 196,109,415Transfer out - - - - - (97,310,459) (97,310,459)Disposals - - (54,887) (93,519) - - (148,406)31 December 2008 28,200,000 51,501,175 398,831,120 62,730,391 9,876,057 568,214 551,706,957Accumulated depreciation31 December 2007 - 42,203,560 189,050,165 50,762,142 2,602,660 - 284,618,527Depreciation for the year - 2,857,222 46,627,301 3,045,190 1,871,739 - 54,401,452Depreciation on disposals - - (53,861) (69,637) - - (123,498)31 December 2008 - 45,060,782 235,623,605 53,737,695 4,474,399 - 338,896,481Net book value31 December 2007 28,200,000 9,297,615 99,093,275 6,370,049 6,673,397 602,667 150,237,00331 December 2008 28,200,000 6,440,393 163,207,515 8,992,696 5,401,658 568,214 212,810,476

Depreciation for the year:2007 (Baht 39 million included in cost of services and the balance in selling and administrative expenses) 47,513,1022008 (Baht 45 million included in cost of services and the balance in selling and administrative expenses) 54,401,452

13.1 In 1999, the Company hired an independent professional valuer to appraise the valueof its land and building at fair market value. However, during 2004, the Company alsohired an independent professional valuer to appraise its land and building at fairmarket value. Referring to appraisal document dated 28 October 2004, the fairmarket values of the land and building were Baht 28.2 million and Baht 17.7 million,respectively. The Company did not adjust the value of the building to fair marketvalue per the appraisal results since the management was in the process ofconsidering future building construction plans.

However, during 2005, the management considered and decided to notproceed with construction of a new building, and the Company therefore adjusted thevalue of the building and improvement amounting Baht 7.1 million to their fair marketvalue per the appraisal results. Since under a previous appraisal conducted in 1999the value of the building and improvement were determined to be Baht 6.6 millionlower than cost, the Company therefore recorded a Baht 6.6 million gain on therevaluation of the building and improvement in the 2005 income statement andrecorded Baht 0.5 million as revaluation surplus in shareholdersû equity.



Had land and building and improvement been presented at cost in the financialstatements, the net book value as of 31 December 2008 and 2007 would have beenfollows:

(Unit: Baht)



2008 2007 2008 2007

Land 26,661,021 26,661,021 26,661,021 26,661,021Building and improvement 5,894,901 8,070,227 5,894,901 8,070,227

13.2 As at 31 December 2008, the Company had machinery, vehicles and equipment underfinance lease agreements with net book values amounting to Baht 71.6 million.

13.3 As at 31 December 2008, certain equipment items of the Company and its subsidiarycompanies have been fully depreciated but are still in use. The original cost of thoseassets amounted to approximately Baht 585 million (2007: Baht 508 million) (Separatefinancial statements: Baht 200 million 2007: Baht 147.8 million).

13.4 In June 2007, Samart Broadband Services Company Limited (a subsidiary) soldtelecommunications equipment used in its operations to a leasing company at a priceof Baht 50 million, and recorded a gain on the sales of the assets of approximatelyBaht 29.9 million as other income in its books of account. Subsequently, the leasingcompany leased the telecommunications equipment to Samart CommunicationServices Company Limited (another subsidiary) under a financial lease totaling Baht50 million. However, in the consolidated financial statements for the year ended 31December 2007, the gain on the sale of the operating assets is treated as a relatedparty transaction and has been reversed from other income.

13.5 In December 2007, Samart Infonet Company Limited (a subsidiary) sold telecommu-nications equipment used in its operations to a leasing company at a price of Baht26.6 million, and recorded a gain on the sales of the assets of approximately Baht 15.6million as deferred income in its books of account. Subsequently, Samart InfonetCompany Limited (a subsidiary) lease back such assets under a financial lease totalingBaht 26.6 million.

13.6 On 26 October 2006, Samart Communication Services Co., Ltd (a subsidiarycompany) entered into an agreement with a company (formerly a state enterprise),whereby they would provide an information technology network to The Department ofLocal Administration for a period of 1 year. The subsidiary is obliged to make thenetwork available at not less than 1,000 sites within 120 days from the contract dateand guarantee this minimum number of users throughout the contract period. If thesubsidiary is unable to do so within the delivery period (22 February 2007), thecounterparty will charge a penalty for any delays in the subsidiaryûs work. However, asat 22 February 2007 the subsidiary could not make the network available at 1,000sites because such subsidiary has yet to receive the equipment from the counterparty


and Bandwidth received is not adequate for actual usage. As at 31 December 2008,a subsidiary has the service capacity of 575 places but the service has been used atonly 192 places which has the outstanding balance of asset under installation undersuch agreement amounted to Baht 168.7 million and is presented as a part of prop-erty, plant and equipment in the balance sheet. The subsidiary has set up provisionfor impairment of such assets amounting to Baht 0.3 million, which the managementbelieves is adequate considering the current circumstances. However, the manage-ment and legal counsel are of the opinion that the subsidiary company is not obli-gated to pay any fine to the counterparty as the delay of such project is not thesubsidiaryûs fault. In addition the management believes that the negotiation with thecounterparty will be successful and the service fee can be collected from thecounterparty. Furthermore, the management considers that all equipment used in thisproject, which a subsidiary recorded as asset under installation and presented as apart of property, plant and equipment, is general equipment which can be used in thesubsidiary companyûs other projects. Therefore as at 31 December 2008 the subsidi-ary company has not set up provision for fine from the project delay and believe thatrecorded provision for impairment for the asset under installation of such project isadequate.

14. Deferred right to the use of communications equipment(Unit: Baht)



2008 2007 2008 2007

Deferred right to the use of communicationsequipment 1,172,266,768 4,196,588,531 1,102,060,554 1,102,060,554

Add:Increase from investment in subsidiary company - 70,206,214 - -Less: Write-off deferred right to the use of

communications equipment - (3,094,527,977) - -1,172,266,768 1,172,266,768 1,102,060,554 1,102,060,554

Accumulated amortisation (558,617,237) (3,568,121,212) (502,693,993) (473,593,235)Add:Increase from investment in subsidiary company - (55,923,033) - -Less: Write-off accumulated amortisation - 3,094,527,977 - -

(558,617,237) (529,516,268) (502,693,993) (473,593,235)Allowance for impairment (369,234,970) (354,952,000) (354,952,000) (354,952,000)Add:Increase from investment in subsidiary company - (14,282,970) - -

(369,234,970) (369,234,970) (354,952,000) (354,952,000)Net 244,414,561 273,515,530 244,414,561 273,515,319



The Company assessed the impairment of deferred right to the use of communica-tions equipment by determining the present value of projected future cash inflows onthe basis of certain assumptions and operations plans prepared by the Companyûsmanagement. Based on such information as at 31 December 2008, the Company set asideprovisions of Baht 369 million for impairment of such assets (Separate financial statements:Baht 355 million) (2007: Baht 369 million) (Separate financial statements: Baht 355 million),and the management believes that this provision is adequate. However, changes in marketcompetition and changes of technology in the future could further the diminution in thevalue of projected future cash inflows below the book values as stated in the balancesheets.

15. Prepaid it service fee to parent companyThe Company and its subsidiaries have entered into a contract with Samart Corpora-

tion Public Company Limited, the parent company, to receive an information technologyservice for use in the services related to the management of the security and serviceprovision for a period of 52 months, commencing on 1 October 2006 to 31 January 2011.

The payment schedule is as follows:(Unit: Baht)

Installment Payment schedule Amount TotalConsolidated Separate Consolidated Separate

financial financial financial financialstatements statements statements statements

1 Within 1 May 2006 24,225,000 3,782,500 24,225,000 3,782,5002 - 6 May - September 2006 2,422,500 378,250 12,112,500 1,891,2507 - 58 October 2006 - January 2011 2,422,500 378,250 125,970,000 19,669,000

162,307,500 25,342,750

During the year 2008, the Company and its subsidiaries paid amount of Baht 29.1million (Separate financial statements: Baht 4.5 million).

The outstanding balances of prepaid IT service fee to parent company as at 31December 2008 and 2007 are as follows:

(Unit: Baht)

Consolidated Separatefinancial statements financial statements2008 2007 2008 2007

Prepaid IT service fee 36,028,558 34,998,750 5,673,750 5,673,750Add: Increase from investment in subsidiary company - 1,029,808 - -Less: Accumulated amortisation (18,558,607) (10,173,029) (2,945,986) (1,636,659)Net 17,469,951 25,855,529 2,727,764 4,037,091Amortisation expenses included in the income

statements of the year 8,385,578 8,153,870 1,309,327 1,309,327


As at 31 December 2008, the Company and subsidiary companies have commitmentsunder the agreement amounting to Baht 60.6 million (Separate financial statements: Baht 9.5million).

16. Bank overdrafts, short-term loans and trust receipts(Unit: Baht)

Interest rate Consolidated Separate

(percent per annum) financial statements financial statements

2008 2007 2008 2007

Bank overdrafts 7.00 - 7.50 33,923,984 44,841,734 - 9,324,529Short-term loans 5.65 - 7.25 1,152,621,255 580,958,207 538,114,336 422,036,206Trust receipts 4.30 - 7.25 69,661,040 102,112,479 68,784,236 67,268,198Total 1,256,206,279 727,912,420 606,898,572 498,628,933

16.1 In December 2005, the Company obtained a short-term loan amounting to Baht 50million from a local commercial bank for use as working capital. The loan is subjectto interest at the minimum overdraft rate (MOR) minus 0.5 percent per annum andas collateral, Samart Communication Services Company Limited (subsidiary) is toprovide a guarantee for the full amount.

As at 31 December 2008, the outstanding balance of the loan was Baht 49.5million (2007: Baht 40 million).

16.2 In April 2006, the Company obtained a short-term loan from the bank amounting toBaht 80 million and in August 2007, the Company increase such loan from Baht 80million to Baht 130 million for use as working capital, carrying interest at the minimumloan rate (MLR) minus 0.75 percent per annum. The subsidiaries are able to use thisloan facility whereby the Company has to guarantee this loan to the bank.

As at 31 December 2008, the outstanding balance of the loan of the Companywas Baht 100 million (2007: Baht 95 million).

16.3 As at 31 December 2008, Samart Comtech Company Limited (subsidiary) had ashort-term loan from bank of Baht 369.8 million (2007: Baht 158.9 million). The loan issubject to interest at the rate as agreed by the parties. As collateral for the loanincluding letter of guarantee in the subsidiaryûs name issued by the bank and theother credit line obtained from the bank i.e. bank overdrafts, trust receipts and letterof credit, the subsidiary has transferred its collection rights under sales and installmentcontract the subsidiary has with the government body of approximately Baht 916.2million (2007: Baht 190.1 million) to the bank. The credit facilities are guaranteed bythe Company.

16.4 In December 2006, the Company obtained a short-term loan facility amounting toBaht 500 million from a local commercial bank, for use as working capital, and itssubsidiaries are also able to utilize this facility. The loan is subject to interest at a



negotiable rate based on market rates. However, no collateral was required for short-term loan facility.

As at 31 December 2008, the outstanding balance of the loans of the Companyand 52 million (2007: Baht 15 million) which no collateral was required.

16.5 In April 2007, the Company obtained a short-term loan amounting to Baht 300 millionfrom a local commercial bank for use as working capital for a project to install theoperating system for an Automatic Meter Reading Project (AMR) for a governmentagency. The loan is subject to interest at the minimum loan rate (MLR) minus 1percent per annum and the Company had to transfer the rights to collect paymentunder the above project to the bank as collateral.

As at 31 December 2008, the outstanding balance of the loan was Baht 57million (2007: Baht 191.4 million).

16.6 In May 2007, the Company obtained a short-term loan from the bank amounting toBaht 200 million for use as working capital of a project. The loan carries interest atthe minimum overdraft rate (MOR) minus 1 percent per annum and the Company hadto transfer the rights to collect payment under projects with values of more thanBaht 50 million to the bank as collateral. Samart Communication Services CompanyLimited (subsidiary) is to provide a guarantee for the full amount.

In December 2008 the Company requested that the Baht 200 million loanfacility be increased from Baht 200 million to Baht 500 million through the addition ofshort-term loan and domestic letter of credit facilities amounting to Baht 300 million,with interest on the additional facilities to be charged at MOR -1% per annum, SamartCommunication Services Co., Ltd. (subsidiary) is permitted to jointly use the facilities,the full amounts of which are secured by cross guarantees.

As at 31 December 2008, the Company and Samart Communication ServicesCo., Ltd. (subsidiary) had outstanding loans from the above bank amounting to Baht345.5 million (separate; 145.5 million (2007: 30.6 million)). The subsidiary has securedBaht 200 million of this amount by the transfer of the collection rights under theschool project remaining after the payment of the facilities for the CompanyûsBangkok Government Center project and the subsidiaryûs ICT project.

16.7 In August 2007, the Company obtained a short-term loan amounting to Baht 50million from a local commercial bank for use as working capital for a project to installActive Device system at Suvarnabhumi Airport. The loan is subject to interest atthe minimum loan rate (MLR) minus 0.75 percent per annum and the Company hadto transfer the rights to collect payment under the above project to the bank ascollateral.

On 2 June 2008, the Companyûs already paid back all the loan (2007: theoutstanding balance of the loan was Baht 50 million).

16.8 In September 2007, the Company changed letter of credit and trust receipt facilitiesamounting to Baht 150 million and instead increased the short-term loan facility froma local commercial bank to support payments for imported goods. The loan carries


interest at the minimum overdraft rate (MOR) minus 0.5 percent per annum. Wherebyits subsidiaries are also able to utilize these facilities in limited amount, totaling nothigher than Baht 80 million.

As at 31 December 2008, the outstanding balance of the loan of the Companyand Samart Communication Services Company Limited (subsidiary) was Baht 120.4million (separate financial statements: 75.7 million) (2007: Nil).

16.9 In October 2008, the Company entered into a short-term loan agreement with acommercial bank, granting a facility of Baht 72 million for use as working capital of theproject to install a telecommunications project for the Bangkok Government Center.The interest charge is MOR -1% per annum. Rights under agreements of the projectto lease satellite communications and satellite telephone equipment (IP Star) and theschool internet project were transferred as security for the loan.

As at 31 December 2008, the Company has loans of Baht 58.4 millionoutstanding from the above commercial bank.

17. Long-term loans from banks / current portion of long-term loans(Unit: Baht)


Long-term loan from bank 54,269,700 288,072,852 - -Less: Current portion due within one year (54,269,700) (233,803,152) - -Long-term loan from bank - net - 54,269,700 - -

Movement in the long-term loan account during the year ended 31 December 2008

are summarised below.(Unit: Thousand Baht)

Consolidated Separatefinancial statements financial statements

Balance as at 1 January 2008 288,072,852 -Less: Repayment (233,803,152) -Balance as at 31 December 2008 54,269,700 -

17.1 In April 2005, a subsidiary company obtained a loan facility of Baht 1,070 million from

a local commercial bank carrying interest at the minimum loan rate (MLR) minus 0.5

percent per annum. The subsidiary company drew down Baht 810 million from

such facility, which is guaranteed by the Company and covenants the subsidiary

company to transfer to the bank the rights of claim over collections under a satellite

communications equipment rental agreement made with a company (a former state

enterprise). The loan is to be repaid within 42 months.



On 30 July 2008, the Companyûs already paid back all the loan (2007: the

outstanding balance of the loan was Baht 153.8 million).

17.2 In December 2006, a subsidiary company obtained a long-term loan facility of Baht

670 million from a local commercial bank carrying interest at the minimum loan rate

(MLR) minus 1 percent per annum, which is guaranteed by the Company and

covenants the subsidiary company to transfer to the bank the rights of claim over

collections under an information technology network system service agreement

made with a company (a former state enterprise).

As at 31 December 2008, the outstanding balance of the loan was Baht 54.3

million (2007: Baht 134.3 million).

18. Liabilities under finance lease agreements(Unit: Baht)


Liabilities under finance lease agreements 74,229,281 89,851,106 - -Less: Deferred interest expenses (6,380,122) (9,897,120) - -

67,849,159 79,953,986 - -Less: Portion due within one year (22,696,759) (20,129,990) - -Liabilities under finance lease agreements -

net of current portion 45,152,400 59,823,996 - -

The Company and its subsidiaries entered into certain finance lease agreements for

rental of motor vehicles and equipments for operation whereby, they are committed to pay

rental on monthly basis. The term of the agreements are generally between 3 and 4 year.

Finance lease agreements cannot be cancelled.

As at 31 December 2008, Future minimum lease payments required under the finance

lease agreements were as follows:(Unit: Baht)


Less than 1 year 1-5 years Total

Future minimum lease payments 26,264,276 47,965,005 74,229,281Deferred interest expenses (3,567,517) (2,812,605) (6,380,122)Present value of future minimum lease payments 22,696,759 45,152,400 67,849,159


19. Other current liabilitiesBelow are details of other current liabilities as at 31 December 2008 and 2007.

(Unit: Baht)


Corporate income tax payable 877,051 1,814,814 - 1,529,532Accrued expenses 148,035,765 204,546,404 80,202,676 88,421,485Unearned income 12,795,002 3,235,235 42,900 102,900Other payables 4,128,996 - - -Others 40,874,504 49,252,130 17,836,190 11,360,559Total other current liabilities 206,711,318 258,848,583 98,081,766 101,414,476

20. Share capital20.1 On 24 April 2008, the annual general meeting of the Companyûs shareholders passed

a resolution approving the decreasing of the Companyûs registered share capital ofBaht 720 million (720 million ordinary shares of Baht 1 each) to be Baht 600 million(600 million ordinary shares of Baht 1 each) by decreasing 120 million ordinary sharesof Baht 1 each. The Company registered the capital decrease with the Ministry ofCommerce on 25 April 2008.

20.2 On 24 April 2008, the annual general meeting of the Companyûs shareholders passeda resolution approving the increasing of the Companyûs registered share capital ofBaht 138 million from Baht 600 million (600 million ordinary shares of Baht 1 each) tobe Baht 738 million (738 million ordinary shares of Baht 1 each) by issuing 120 millionnew ordinary shares with a par value of Baht 1 each, at a total price of Baht 120million to be offered to specific investors and/or institutional investors and/or privateplacement and/or through business alliance which sales criteria and condition assame as the resolution of the extraordinary general meeting of the Companyûsshareholders no. 1/2006. And allot the rest 18 million new ordinary shares to reservethe exercise of warrants as mentioned in note 21. The Company registered the capitalincrease with the Ministry of Commerce on 28 April 2008.

21. WarrantsOn 24 April 2008, the Annual General Meeting of the Company passed a resolution to

issue 18 million warrants, the offering price per unit is Baht 0 to the Companyûs directorsand the employees of the Company and its subsidiaries. The exercise ratio is 1:1 and theexercise price is Baht 7.50 per 1 ordinary share. Warrants to be allocated to the Companyûsdirectors and the employee of the Company and its subsidiaries will be divided into 5certificates with 5 years maturity from the issuance date. Each certificate will have the



same date of issuance, offering and expiration with different exercise period as shown inthe following detail. Each warrant holders can split exercise or fully exercise their right ofthe amount allocated for each certificate.Certificate No. 1 will represent 10% of total number of warrants allocated which is entitled

to exercise since the first day of the exercise period until the expired dateof warrants.

Certificate No. 2 will represent 15% of total number of warrants allocated which is entitledto exercise after the end of the first year that the warrants are issueduntil the expired date of warrants.

Certificate No. 3 will represent 20% of total number of warrants allocated which is entitledto exercise after the end of the second year that the warrants are issueduntil the expired date of warrants.

Certificate No. 4 will represent 25% of total number of warrants allocated which is entitledto exercise after the end of the third year that the warrants are issueduntil the expired date of warrants.

Certificate No. 5 will represent 30% of total number of warrants allocated which is entitledto exercise after the end of the forth year that the warrants are issueduntil the expired date of warrants.

As at 31 December 2008, the Company is in the processing of issurance of warrants.

22. DebenturesOn 19 September 2005, the Extraordinary General Meeting of the shareholders

approved the issuance and sale of not more than Baht 1,000 million of registered ornon-registered and secured or unsecured debentures with or without a debentures holdersûrepresentative and with a maturity not exceeding 5 years, for offer through private placementto the public and/or specified investors and/or institutional investors in accordance withthe Notification of the Securities and Exchange Commission. The debentures can be offeredin one or numerous lots. The purpose of the debenture issue is to raise fund for investmentin Samart Comtech Co., Ltd. and other future projects of the Company and to be used asworking capital of the Company. Subsequently, on 18 September 2006, a meeting of theCompanyûs Board of Directors passed a resolution to extend the period for the issuance andsale of debenture by one year. As at 31 December 2008, the Company had not issued anysuch debentures.

23. Revaluation surplusThis represents surplus arising from revaluation of building and building improvement.

The surplus is amortised to retained earnings on a straight-line basis over the remaining lifeof the related assets.


(Unit: Baht)

Consolidated financial statements/Separate financial statements

2008 2007

Balance - beginning of year 257,177 342,937Less: Amortisation (85,760) (85,760)Balance - end of year 171,417 257,177

The revaluation surplus can neither be offset against deficit nor used for dividendpayment.

24. Statutory reservePursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company

is required to set aside to a statutory reserve at least 5 percent of its net income afterdeducting accumulated deficit brought forward (if any), until the reserve reaches 10 percentof the registered capital. The statutory reserve is not available for dividend distribution.

In 2008, the Company set aside a statutory reserve totaling of Baht 2.2 million (2007:Baht 5.4 million).

25. Dividend paidTotal DividendApproved by

dividends per sharePaid on

(Million Baht) (Baht)2008Final dividend on 2007 income Annual General Meeting of the

shareholders on 24 April 2008 60 0.10Less: Interim dividend paid in 2007 (30) (0.05) 4 September 2007Total dividends declared

for the year ended31 December 2008 30 0.05 14 May 2008

2007Final dividend on 2006 income Annual General Meeting of the

shareholders on 24 April 2007 192 0.32Less: Interim dividend paid A meeting of Board of Directors

in 2006 on 9 August 2006 (90) (0.15) 6 September 2006102 0.17 14 May 2007

Interim dividend on January to A meeting of Board of DirectorsJune 2007 income on 9 August 2007 30 0.05 4 September 2007

Total dividends declaredfor the year ended31 December 2007 132 0.22



26. Segment informationThe Company and its subsidiariesû business operations involve two principal seg-

ments: (1) the telecommunications and network system service business and (2) the sales

and installation of equipment. These operations are mainly carried on in Thailand. Below is

the consolidated financial information for the years ended 31 December 2008 and 2007 of

the Company and its subsidiaries by segment.

26.1 The results of operations separated by business segment(Unit: Million Baht)

For the years ended 31 DecemberThe

telecommunicationsThe sales and

EliminatedConsolidated

and network systeminstallation of

financial statementsservice business

equipment

2008 2007 2008 2007 2008 2007 2008 2007Sales and services income- Related parties 145.3 155.0 221.4 165.8 (334.1) (306.1) 32.6 14.7- Third parties 1,156.1 979.6 1,677.9 1,132.1 - - 2,834.0 2,111.7Total sales and services

income 1,301.4 1,134.6 1,899.3 1,297.9 (334.1) (306.1) 2,866.6 2,126.4Cost of sales and services 994.3 827.1 1,588.3 1,037.7 (347.5) (296.4) 2,235.1 1,568.4Gross profit 307.1 307.5 311.0 260.2 13.4 (9.7) 631.5 558.0Other income 33.5 51.6Selling expenses (142.6) (118.3)Administrative expenses (269.1) (245.8)Other expense (17.1) (1.8)Financial cost (109.9) (103.2)Corporate income tax (14.3) (28.5)Minority interest in net

income (loss) ofsubsidiaries (1.1) (0.1)

Net income 110.9 111.9


26.2 Assets separate by business segment are as follows:(Unit: Million Baht)

As at 31 DecemberThe

telecommunicationsThe sales and

EliminatedConsolidated

and network systeminstallation of

financial statementsservice business

equipment

2008 2007 2008 2007 2008 2007 2008 2007AssetsTrade accounts

receivable - net 312.3 339.1 489.7 213.8 (180.2) (171.3) 621.8 381.6Accrued income 99.7 234.7 815.4 611.8 (0.9) - 914.2 846.5Inventories - net - - 334.4 215.0 (9.2) (12.6) 325.2 202.4Deferred right to the use of

communicationsequipment - net 244.4 273.5 - - - - 244.4 273.5

Communications equipmentnot yet installed - net 9.4 9.5 - - - - 9.4 9.5

Property, plant andequipment - net 839.4 974.6

Other 602.0 546.9Total assets 3,556.4 3,235.0

Transfer prices between business segments are as set out in Note 7 to thefinancial statements.

27. Other incomeOther income for the years ended 31 December 2008 and 2007 consist of:

(Unit: Baht)


Income (expenses) from sale of investment andfrom revaluation - 4,900,239 - 4,900,239

Management fee income from subsidiaries - - 30,840,000 30,840,000Reversal on allowance for impairment of deferred

right to the use of communication equipment - 17,997,752 - 17,997,752Reverse allowance for doubtful of withholding

tax deducted at source - 2,322,849 - 2,322,849Gain on exchange 11,816,296 1,282,557 - -Dividend income from subsidiaries - - 44,999,946 39,999,952Other 21,684,738 25,097,509 27,255,081 29,354,382Total other income 33,501,034 51,600,906 103,095,027 125,415,174



28. Expenses by natureSignificant expenses by nature are as follow:

(Unit: Baht)


Salary and wages and other employee benefits 376,101,523 328,178,074 87,899,667 78,938,169Depreciation 343,213,795 276,461,200 54,401,452 47,513,102Amortisation expenses 29,100,969 27,623,225 29,100,758 27,623,225Rental expenses 46,570,838 42,807,540 7,726,209 4,492,672Changes in inventories of finished goods and work

in progress 126,235,105 (18,261,458) 62,295,874 41,116,506Loss on disposal and change in value of short-term

investments in trading securities 14,083,596 550,152 14,083,596 550,152

In addition, the Company has expenses that are other expenses by nature, but which

are not included in the above; such as promotional expenses, training expenses and other

expenses.

29. Finance cost(Unit: Baht)


Interest expense on:Bank, loans, overdrafts and trust receipts 94,751,986 91,058,979 47,303,662 26,276,076Loans from related parties - - 11,078,517 20,098,468Liabilities under finance leases 4,659,547 1,734,631 - -

Total interest expenses 99,411,533 92,793,610 58,382,179 46,374,544Bank charges 10,493,593 10,390,561 6,913,737 4,434,841Total finance cost 109,905,126 103,184,171 65,295,916 50,809,385

30. Provident fundThe Company, subsidiary companies and their employees have jointly established

a provident fund in accordance with the Provident Fund Act B.E. 2530. The Company,

subsidiary companies and their employees contributed to the fund monthly at the rate of 3

- 10 percent of basic salary. The fund, which is managed by Bangkok Bank Public Company

Limited, will be paid to employees upon termination in accordance with the fund rules.

During the year 2008, the Company and its subsidiary companies contributed Baht 11

million (2007: Baht 10 million) (Separate financial statements: Baht 2.9 million, 2007: 2.4

million) to the fund.


31. Earnings per shareBasic earnings per share is calculated by dividing the net income for the year by the

weighted average number of ordinary shares in issue during the year.

32. Purchase of subsidiary companyIn September 2007, the Company acquired ordinary share in Samart Infonet Co., Ltd.

Its fair value of assets purchased and liabilities are as follows:(Unit: Baht)

Consolidated

2008 2007

Cash and cash equivalents - 6,823,996Trade accounts receivable - net - 22,235,557Inventories - net - 671,175Equipment - net - 10,839,692Other assets - 32,676,756Current liabilities - (117,124,818)Net assets - (43,877,642)Less: Minority interest - -Net acquired assets - (43,877,642)Add:Excess of cost of investment over the book value of the subsidiary - 61,877,642Cash paid for purchase of subsidiary companies - 18,000,000Less: Cash and cash equivalents of subsidiary company - (6,823,996)Net cash paid for purchase of subsidiary company - 11,176,004

33. Commitments and contingent liabilities33.1 Commitments

33.1.1 The Company entered into transponder lease agreements with a local

company. Under the agreements, the Company had commitment to pay rental

fees to its contractual partner in monthly installment, totally amounting to USD

0.1 million each. The agreements are expiring in October 2012.

33.1.2 The Company entered into an agreement with the National Telecommunication

Commission (formerly known as çthe Posts and Telegraph Departmenté) to

provide local audio and visual data communications via satellite service for a

period of 22 years starting on 1 June 1995. The Company has commitments to

comply with the terms under the contract, which included commitments to

transfer ownership of telecommunications equipment used in provision of the

data communication via satellite service to the National Telecommunication

Commission free of charge, and to pay the service fee stipulate under the



agreement, based on the minimum annual fee or the percentage of income

obtained from provision of such service whichever is higher. However, the

Company requested the National Telecommunication Commission to recon-

sider such terms and the National Telecommunication Commission presented

the Companyûs request to the National Radio Frequency Management Board

and in the meeting of 1/2545 on 28 June 2002, the Board passed the resolution

that in this case the National Telecommunication Commission had the authority

to amend the terms of contract. The National Telecommunication Commission

later notified the Company of such amendments including the followings:- To reduce the fee that the Company is to pay to the National Telecommu-

nication Commission from the year 2001 until the end of the contractterm to a rate of 9% of revenue before expenses per annum.

- To cancel the minimum fee to be paid to the National TelecommunicationCommission from the year 2001 until the end of the contract term.

- To cancel the ownership transfer of assets, which are to be installed bythe Company in the future for the provision of such service, to theNational Telecommunication Commission, with effect from the date ofamendment.

- To render the Company responsible for payments of value-addedtax, duties, and fees incurred through the course of setting up radiotelecommunications stations and using radio telecommunicationsequipment, effective from the date of amendment.

33.1.3 Samart Broadband Services Co., Ltd. (subsidiary company) has entered into a15-year agreement with TOT Public Co., Ltd., (TOT) (formerly known as çTOTCorporation Public Co., Ltd.é) in respect of the provision of network services.The subsidiary company is obliged to comply with certain conditions as statedin the agreements and has to pay an annual interconnection charge of Baht1 million together with an additional fee, which are determined based onbandwidth usage at rates stipulated in the agreement. Subsequently, on 31March 2003, the subsidiary company entered into an agreement with TOT andSamart Communication Services Co., Ltd. (another subsidiary company) totransfer its rights and obligations under this agreement to another subsidiarycompany. In this regard, the recipient of the rights and obligations is responsi-ble for compliance with the provisions of this agreement.

33.1.4 On 26 October 2006, Samart Communication Services Co., Ltd (a subsidiarycompany) entered into an agreement with a company (formerly a stateenterprise), whereby they would provide an information technology network to


The Department of Local Administration for a period of 1 year. The subsidiary isobliged to make the network available at not less than 1,000 sites within 120days from the contract date and guarantee this minimum number of usersthroughout the contract period. If the subsidiary is unable to do so within thedelivery period (22 February 2007), the counterparty will charge a penalty forany delays in the subsidiaryûs work. However, as at 22 February 2007 thesubsidiary could not make the network available at 1,000 sites because suchsubsidiary has yet to receive the equipment from the counterparty andBandwidth received is not adequate for actual usage. As at 31 December 2008,a subsidiary has the service capacity of 575 places but the service has beenused at only 192 places which has the outstanding balance of asset underinstallation under such agreement amounted to Baht 168.7 million and ispresented as a part of property, plant and equipment in the balance sheet. Thesubsidiary has set up provision for impairment of such assets amounting toBaht 0.3 million, which the management believes is adequate considering thecurrent circumstances. However, the management and legal counsel are ofthe opinion that the subsidiary company is not obligated to pay any fine tothe counterparty as the delay of such project is not the subsidiaryûs fault. Inaddition the management believes that the negotiation with the counterpartywill be successful and the service fee can be collected from the counterparty.Furthermore, the management considers that all equipment used in this project,which a subsidiary recorded as asset under installation and presented as a partof property, plant and equipment, is general equipment which can be used inthe subsidiary companyûs other projects. Therefore as at 31 December 2008 thesubsidiary company has not set up provision for fine from the project delay andbelieve that recorded provision for impairment for the asset under installation ofsuch project is adequate.

33.1.5 On 30 August 2004 Samart Infonet Company Limited, a subsidiary company,has entered into a three-year agreement for the provision of circuit relating toinformation exchange via the internet with the Communications Authority ofThailand. The expiration of the agreement is in September 2007. The subsidiarycompany is to follow the conditions as stipulated in the agreement and to paythe monthly service fee amounting to Baht 3.8 million. As at 1 November 2006,Samart Infonet Company Limited extended the expiry period to be January2008 with the requirement of service fee of Baht 3.7 million per month. On 1July 2007, the subsidiary company reextended the expiry period to be June2008 with the requirement of service fee of Baht 3 million per month. And on 1July 2008, a subsidiary company extended the expiry period to be 30 June



2009 with the requirement of service fee of Baht 1.8 million per month. As at31 December 2007, the subsidiary company has outstanding service paymentcommitments of Baht 10.8 million.

33.1.6 Samart Infonet Co., Ltd., a subsidiary company, has entered into a 10-yearagreement with TOT Public Co., Ltd. in relation to its rental of internet protocolnetwork. The subsidiary company is obliged to comply with certain conditionsas stated in the agreement.

33.1.7 The Company has outstanding commitment totaling approximately Baht 165.8million in respect of the uncalled portion of their investments in its subsidiary.

33.2 Operating lease commitmentsThe Company and its subsidiaries has entered into several lease agreements in

respect of the lease of utilities, IT data center system, the contract of high-speedconnection and data exchange service. The terms of the agreements are generallybetween 1 year until the termination notice is given.

As at 31 December 2008, future minimum lease payments required under thesenon-cancellable operating leases contracts were as follows.

US Dollar

Million Baht million

Payable within:Less than 1 year 82.5 1.01 to 5 years 92.5 2.6

33.3 Bank guaranteesAs at 31 December 2008, there were outstanding bank guarantees issued by

banks on behalf of the Company and its subsidiaries of approximately Baht 736.2million (Separate financial statements: Baht 325.6 million), in respect of performanceguarantees of sales and service agreements as required in the normal course ofbusiness.

33.4 Related party guaranteesAs at 31 December 2008, the Company and its subsidiaries had the following

commitments to financial institutions and a leasing company as a result of theirguarantees of credit facilities and rental of equipment.33.4.1 The Company was guarantor of credit facilities of its subsidiary company from

financial institutions and a leasing company amounting to Baht 4,560.9 million.Generally, the guarantees are effective for as long as the underlying obligationshave not been discharged. A guarantee fee is charged by the Company.

33.4.2 Certain obligations of the Company are guaranteed by four subsidiarycompanies. The amount of such guarantees totals Baht 160 million. These


guarantees are effective for as long as the underlying obligations have not beendischarged by the Company. No guarantee fee is charged by that subsidiarycompanies.

33.4.3 The Company was guarantor of credit facility of its subsidiary company fromfinancial institution amounting to Baht 10 million in which the Companyguarantee for 70 percent of the credit facility.

33.4.4 Certain obligations of the Company are guaranteed by subsidiary. The amountof such guarantees totals Baht 400 million. These guarantees are effectivefor as long as the underlying obligations have not been discharged by theCompany. A guarantee fee is charged by that subsidiary company.

34. Financial instruments34.1 Financial risk management

The Companyûs financial instruments, as defined under Thai AccountingStandard No. 48 çFinancial Instruments: Disclosure and Presentationsé, principallycomprise cash and cash equivalents, trade accounts receivable, loans, investments,and short-term and long-term loans. The financial risks associated with these financialinstruments and how they are managed in described below.Credit risk

The Company and its subsidiaries are exposed to credit risk primarily withrespect to trade accounts receivable, loans and other receivable. The Company andits subsidiaries manage the risk by adopting appropriate credit control policies andprocedures and therefore do not expect to incur material financial losses. In addition,the majority of sales and services are supplied to credit worthy customers suchas stated enterprises, government agencies and the banking sector. The maximumexposure to credit risk is limited to the carrying amounts of receivables, loans, otherreceivables and notes receivable as stated in the balance sheet.

Interest rate riskThe Company and its subsidiariesû exposure to interest rate risk relates

primarily to its cash at banks, bank overdrafts and long-term borrowings. However,since most of the Company and its subsidiariesû financial assets and liabilities bearfloating-interest rates or fixed interest rates which are close to the market rate, theinterest rate risk is expected to be minimal.

Significant financial assets and liabilities as at 31 December 2008 classified bytype of interest rates are summarised in the table below, with those financial assetsand liabilities that carry fixed interest rates further classified based on the maturitydate, or the repricing date if this occurs before the maturity date.




Fixed interest rates Floating Non- Effective

Within 1-5 interest interest interest

1 year years rate bearing Total rate

(Million Baht) (% p.a.)Financial AssetsCash and cash equivalent - - 125.6 2.1 127.7 0.5Short-term investments - trading

securities - - - 133.4 133.4 -Trade accounts receivable - net - - - 621.8 621.8 -Short-term loans to related parties - - 4.9 - 4.9 7.25 - 7.50Restricted bank deposits - - 16.9 - 16.9 1.4 - 2.6

- - 147.4 757.3 904.7Financial liabilitiesBank overdrafts - - 33.9 - 33.9 7.00 - 7.50Short-term loans from banks - - 1,152.6 - 1,152.6 4.05 - 7.25Trust receipts - - 69.7 - 69.7 4.30 - 7.25Trade accounts payable - - - 295.2 295.2 -Short-term loans from related parties - - 264.3 - 264.3 7.75, 8.25Liabilities under hire-purchase and

finance lease agreements 22.7 45.2 - - 67.9 6.25, 6.75Long-term loans from banks - - 54.3 - 54.3 5.75, 6.25

22.7 45.2 1,574.8 295.2 1,937.9


Fixed interest rates Floating Non- Effective

Within 1-5 interest interest interest

1 year years rate bearing Total rate

(Million Baht) (% p.a.)Financial AssetsCash and cash equivalent - - 79.7 1.7 81.4 0.5Short-term investments - trading

securities - - - 133.4 133.4 -Trade accounts receivable - net - - - 284.6 284.6 -Short-term loans to related parties - - 20.0 - 20.0 7.75, 8.25

- - 99.7 419.7 519.4Financial liabilitiesShort-term loans from banks - - 538.1 - 538.1 4.05 - 7.00Trust receipts - - 68.8 - 68.8 4.30 - 7.25Trade accounts payable - - - 168.6 168.6 -Short-term loans from related parties - - 308.7 - 308.7 7.75, 8.25

- - 915.6 168.6 1,084.2


Foreign currency risk

The Company and its subsidiariesû exposure to foreign currency risk arises

mainly from trading transactions that are denominated in foreign currencies. The

Company and its subsidiaries seek to reduce this risk by entering into forward ex-

change contracts when they consider appropriate. Generally, the forward contracts

mature within one year.

The balances of financial assets and liabilities denominated in foreign curren-

cies of the Company and its subsidiaries as at 31 December 2008 are summarised

below.

Consolidated financial Separate financial

statements statements

Foreign Financial Financial Financial Financial Average exchange rate

currency assets liabilities assets liabilities as at 31 December 2008

(Million) (Million) (Million) (Million) (Baht per 1 foreign

currency unit)

US dollar - 4.2 - - 35.0824

Foreign exchange contracts outstanding at 31 December 2008 of the Company are

summarised below.


Contractual exchange rateForeign currency Bought amount Sold amount Bought Sold

(Million) (Million) (Baht per 1 foreign currency unit)

US dollar 2.9 - 34.50 - 35.44 -


Contractual exchange rateForeign currency Bought amount Sold amount Bought Sold

(Million) (Million) (Baht per 1 foreign currency unit)

US dollar 2.9 - 34.94 - 35.34 -

34.2 Fair values of financial instruments

Since the majority of the Company and its subsidiariesû financial instruments

are short-term in nature and the loans bear floating interest rates, their fair value is not

expected to be materially different from the amounts presented in the balance sheets.



A fair value is the amount for which an asset can be exchanged or a liability

settled between knowledgeable, willing parties in an armûs length transaction. The fair

value is determined by reference to the market price of the financial instrument or by

using an appropriate valuation technique, depending on the nature of the instrument.

35. Capital managementThe primary objectives of the Company and its subsidiariesû financial management are

to maintain their ability to continue as a going concern and to maintain an appropriate

capital structure.

As at 31 December 2008, Groupûs debt-to-equity ratio was 1.6:1 (2007: 1.5:1) and the

Companyûs was 0.6:1 (2007: 0.5:1).

36. ReclassificationCertain amounts in the financial statements for the year ended 31 December 2007

have been reclassified to conform to the current yearûs classification but with no effect to

previously reported net income or shareholdersû equity. The reclassifications are as follow:

(Unit: Baht)

Consolidated Separatefinancial statements financial statements

As As previously As As previouslyreclassified reported reclassified reported

Amounts due from and advance to related parties - - 44,525,407 9,025,407Short-term loans to related parties - - - 35,500,000Amount due to and advance from related parties - 29,258,759 - 3,381,154Short-term loans form related parties 293,044,799 263,786,040 280,881,154 277,500,000

37. Approval of financial statementsThese financial statements were authorised for issue by the Companyûs authorised

Directors on 24 February 2009.

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