Annual Report Samart i-Mobile 2010

Transcription

Contents
Message from the Board of Directors
Message from the Executive Committee
Board of Directors
Financial Highlights
Social Contribution Activities
Nature of Business
Business Structure
Revenue Structure
Information of Subsidiary Companies
Changes During the Year
Industry and Competitive Analysis
Risk Factors
Shareholders
Management Structure
Report of the Corporate Governance Committee
Report of the Risk Management Committee
Report of the Nominating and Compensation Committee
Corporate Governance
Connected Transactions
Financial Analysis and Results of Operations
Report of the Board of Directorsû Responsibilities
for the Financial Reports
Report of the Audit Committee
Report of Independent Auditor
Financial Statements
Audit Fee
Directors and Management
General Information
2
3
4
6
8
10
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50
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Annual Report 2010
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Samart I-Mobile Public Company Limited
Message from the Board of Directors
Thailand economy faced many challenges in 2010 especially the political situation that resulted in severe social disturbances
in April to May and this affected business operations related to the tourism and hospitality sectors. Later in the year, severe floods
in the northeastern, central and southern regions lasting many weeks also caused damages to the agriculture sectors. In addition,
the main business of the Company was also facing strong challenges posed by foreign competitors by the introduction of many new
smart phones into the Thai market.
However, the Company is able to maintain our strong presence in the mobile phones market in Thailand and continue to
retain our 2nd position in the Thai handset market for our house brand i-mobile handsets. The Company also won the Design
Excellence Award 2010 (DEmark) in Industrial Products category under the Prime Ministerûs Export Award 2010 for the third
consecutive year. The Company continued success as the leading service provider of content and application for multimedia
business. For 2010, Samart I-Mobile Public Company Limited had the consolidated revenues of Baht 8,125 million and a net
profit of Baht 135 million. During the year, the Company developed 3G GSM mobile telephony services in the Greater Bangkok
area under brand name çi-mobile 3GXé on TOTûs 3G network with highlight of product features and various service packages as
well as customer service that ensures the highest effectiveness through service centers to support the expansion of network
coverage for 3G services.
Year 2011 is the year of concrete entry into the 3G era which is the opportunities for significant business growth. The
Company is ready to step toward a full integrated telecommunication service provider on the strength of business development
including product development, enhancement of after sales services and human resource development coupled with managing
our business with fairness and the recognition of the Principles of Good Corporate Governance and Corporate Social Responsibility
under the policy guiding principle of being a good corporate citizen, who is accountable to employees, customers and shareholders,
and being socially responsible.
On behalf of Samart I-Mobile Plc., the Board of Directors would like to thank all shareholders, customers, business partners,
financial institutions, staffs and all well wishers who have generously supported the Company. Be assured that the Company will
continue to pursue the business with transparency to achieve the maximum benefits to all stakeholders and will continue to
participate in development of community, social and environment.
(Professor Suphachai Phisitvanich)
Chairman
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Annual Report 2010
Message from the Executive Committee
The year 2010 was the important year that Samart I-Mobile Public Company Limited accelerated to fully develop the
organization including developing the team and creating new generation of staff to prepare for supporting business growth along
with implementing a strategy to strengthen its integrated communication business such as mobile business including 3G service
and multimedia business. For 2011, the Company continues to emphasize the goal of building a sustainable business with a
commitment to create maximum satisfaction for the customer by completing telecommunication experience.
The Company intends to operate its business as a telecommunications provider who offers product and services with
modern communication equipment, various content, and full integrated telecommunication service. For mobile business, the
Company focuses on offering a variety of product with emphasizing on the group of application phone, smart phone, android,
and new product such as android tablet. In addition, the Company also provides special application bundling with the Companyûs
product to generate recurring revenues such as application for chatting imm (i-mobile Messenger), application for using mail
(i-mail) and various social networks as well as collaborates with business partners in combining mobile handset with various
value added services for the best value of the user.
For multimedia business, the Company aims to develop new contents, especially, content service in travel and various
lifestyles to meet the userûs need. The Company also targets to be a leading content service provider for 3G network which has
been developed to be value added services on 3G networks such as VDO call contact center. In 2011, the Company targets to
increase number of users by offering product and service to meet the need of internet user, general user, and specific user such
as movie lover, music lover, and sports lover including 3G service packages at a premium rate. Recently, the Company launched
Blackberry on 3G networks to support the customerûs need of i-mobile 3GX.
By combining the strengths of mobile business including 3G service and multimedia business to offer product and
comprehensive services as well as to generate revenue from sustainable business, the Company is confident of maintaining
business growth and gaining return from investment as goal setting as well as keeps the Companyûs leadership in the complete
telecom service provider.
(Mr.Watchai Vilailuck)
Executive Chairman
Annual Report 2010
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Board of Directors
1
2
4
4
3
5
1. Professor Suphachai Phisitvanich
ë Chairman of the Board of Directors
ë Independent Director
ë Audit Committee Member
2. Dr. Chotivid Chayavadhanangkur
ë Chairman of the Corporate Governance Committee
ë Chairman of the Audit Committee
ë Nominating and Compensation Committee Member
3. Mr. Kunthit Arunyakananda
ë Chairman of the Nominating and Compensation Committee
ë Audit Committee Member
ë Corporate Governance Committee Member
4. Mr.Thananan Vilailuck
ë Authorized Director
ë Risk Management Committee Member
ë Executive Director
ë President
5. Mr.Jong Diloksombat
ë Corporate Governance Committee Member
ë Chief Operating Officer
ë Executive Director
ë Risk Management Committee Member
Annual Report 2010
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7
8
9
6. Mr. Charoenrath Vilailuck
7. Mr.Watchai Vilailuck
ë Chairman of the Risk Management Committee
ë Executive Chairman
ë Chief Executive Officer
8. Mr. Azwan Khan bin Osman Khan
ë Director
9. Mr. Reza bin Abdul Rahim
ë Director
ë Nominating and Compensation Committee Member
Annual Report 2010
5
Financial Highlights
2008
Result of Operation
Sales and Service Revenue
Sales Support Revenue
Total Revenues
Gross Profit (1)
Net Profit
(Million Baht)
Financial Position
Total Assets
Total Liabilities
Total Shareholdersû Equity
(Million Baht)
Financial Ratio
Net Profit Margin
Return on Equity
Return on Assets
Debt to Equity Ratio
Earnings per Share
Dividend per Share
Dividend Payout Ratio
Book Value per Share
Par Value per Share
Number of issued and paid up shares (2)
Remarks:
(1)
(2)
6
(%)
(%)
(%)
(Times)
(Baht)
(Baht)
(%)
(Baht)
(Baht)
(Million Shares)
2009
2010
11,151
141
11,398
1,839
114
8,769
81
9,039
1,430
116
7,987
67
8,125
1,706
135
6,223
3,933
2,290
6,139
3,775
2,364
5,434
3,016
2,418
1.00
4.85
1.83
1.72
0.03
0.045
169.64
0.53
0.10
4,300.00
1.28
5.02
1.87
1.60
0.03
0.02
74.42
0.54
0.10
4,300.00
1.66
5.71
2.33
1.25
0.03
0.02
63.83
0.56
0.10
4,301.30
Gross Profit was calculated by including sales support revenue.
During the year 2010, the Companyûs paid up capital was increased from the exercise of warrants offering to the
Companyûs directors and the employees of the Company and its subsidiaries.
Annual Report 2010
The total revenues were Baht 8,125 million, a decrease
of Baht 914 million or 10.11% compared to 2009. The
decrease was mainly contributed from mobile business
and international business that impacted from the lower
average selling price per unit. Revenue from multimedia
business was continuously increased.
Total Revenues
(MB.)
15,000
11,398
9,039
8,125
10,000
5,000
0
2008
2009
2010
Year
Net profit was Baht 135 million, an increase of Baht 19
million or 16.64% compared to 2009. Net profit margin
also increased from 1.28% in 2008 to 1.66% in 2010.
Net Profit
(MB.)
150
135
114
116
100
50
0
2008
2009
2010
Year
Total assets were Baht 5,434 million, a decrease of
Baht 705 million or 11.48% compared to end of 2009.
This was mainly due to the decrease in short-term
investments and sales promotion receivables of Mobile
Business, and trade accounts receivable of International
Business.
Total Assets
(MB.)
6,500
6,223
6,139
6,000
5,434
5,500
5,000
2008
2009
2010
Year
Total shareholdersû equity was Baht 2,418 million, an
increase of Baht 54 million or 2.29% from end of 2009,
due to net profit for 2010 of Baht 135 million and the
dividend payment in 2010 of Baht 86 million.
Total Shareholdersû Equity
(MB.)
2,600
2,418
2,364
2,400
2,290
2,200
2,000
2008
2009
2010
Year
Annual Report 2010
7
Social Contribution Activities
Being a responsible citizen that makes a difference
Thriving alongside the advancement of the Thai society, Samart Group has throughout the past 55 years, firmly adhered
to its guiding principle of being a good corporate citizen, who is accountable to employees, customers and shareholders, and
being socially responsible. Samart Group has continuously focused on building a solid business foundation while ensuring
constructive contributions to the society to bring happiness, smiles and a better quality of life to Thai people.
With that in mind, Samart Group has undertaken a range of development initiatives that contribute to the sustainable
development of the Thai society through the following projects:
1. Education and vocational training
Recognizing education as instrumental to peopleûs development, Samart Group provides educational and career
programs to Thai youths from underserved communities to maximize their opportunities for university and career
success.
1.1 Samart Innovation Awards is an annual competition
held by Samart Corporation Plc., a representative of
Samart Group, for local software developers to
showcase their innovation ideas and win the chance
to see their works commercialized and promoted
in the marketplace. The competition, held for eight
consecutive years from 2003, create new business opportunities, jobs and additional revenues for the developer
community and getting local talents ready for international business exposure in the future. In 2010, the company
was honored by Her Royal Highness Princess Maha Chakri Sirindhorn who graciously bestowed the grand prize
upon the championship for the first year.
1.2 i-mobile Creative Synergy Award is a mobile phone contest where local
designers are encouraged to present their creatively designed handsets
with marketing communication plans to promote the products. The
contest is organized to promote the new generation of designers and
ideas, locally and internationally. In 2010, the contestûs winners were
sponsored to visit the World Expo in Shanghai, China.
1.3 Samart Scholarship project is to provide capable but poor students with
educational opportunities. Scholarships are available for various groups of
students.
Graduate Program - 5 scholarships have been offered annually to poor students, who exhibit excellent
academic record, good behavior and active participation in social contribution activities at Mahidol
University since 2007.
Undergraduate Program - 5 scholarships are offered to selected
students to complete their studies at Thammasat University every
year from 2008.
Other scholarships - 1 scholarship offered to a student at Faculty
of Nursing, Princess of Naradhiwas University, in addition, Samart
Foundation supports education by offering scholarships to a
student at Boromarajonani College of Nursing, 5 students for Mahidol
Engineering Foundation, and 60 poor students.
1.4. Sport promotion activities:
Sponsorship for a tri-party football match organized by the Faculty
of Engineering, Kasetsart University.
Sponsorship for donation of sports equipments to underprivileged
schools in Bangkok and the provinces to instill enthusiasm for
sports among Thai youths.
Sponsorships for local football clubs such as Maungthong United,
Buriram PEA, TOT-CAT FC, Buriram FC and Puket FC to give
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Annual Report 2010
young footballers the opportunity to play in the Thai Premier League and international matches.
An organizer for the Football Camp project to give free football lessons by national professional footballers
to Thai youngsters in the provinces.
Sponsorship for Pakkred Secondary Schoolûs Sports Day.
Creativities promotion activities:
Sponsorship for Miss Teen Thailand 2010 contest to engage Thai
youths in creative and useful activities.
Sponsorship for sportswear design contest among university
students to promote the new generation of designers and
generate sports interests among Thai youths.
Samart Corporation Plc., a representative of Samart Group,
sponsored Kingûs Mongut Institute of Technology Ladkrabang to
organize the IT camp.
Samart Telecommunications Technician School transfers knowledge about the installation of antennas and
satellite dishes which is the original business and the foundation for the growth of the Samart Group.
-
1.5.
1.6
2. Social contribution and charity
Samart Group has helped communities, the underprivileged and disaster victims.
2.1 çSamart D Clubé project encourages staffs to voluntarily do social work. Staffs are persuaded to initiate social
contribution programs so that they learn to help others and thus strengthen the foundation for the society.
2.2 Other social responsibility activities through çSamart Foundationé included;
- Annual donation of reflective coats, raincoats and police traffic barriers to Pak Kret and Pak Khlong Rangsit
police stations.
- Donation of 1,000 bags of rice to help flood victims via TV channel 3.
- Donation of relief packs and boats to help flood victims in Lopburi
and Ayutthaya provinces.
- Construction of a new school building and donation of teaching
materials for students at Kong Mong Tha School, Sangkla Buri
district, Kanchanaburi province.
- Donation of the welfare fund benefiting 15 underprivileged people.
- Donation of cancer treatment to Miss Suvadee Sukgerd.
- Sponsorship for the 1st Student Volunteer Project organized by Dhurakij Pundit University.
- Donation of blankets, sports gears and toys to border patrol
police schools in rural areas.
3. Energy and environment conservation
The Company runs awareness campaigns to conserve the environment
and energy through çLor. Ling. Activityé or çSave our SAMART Activityé for
three consecutive years from 2008. The activity is implemented to promote
environment friendly and energy efficiency management in the Company, and
annual encouragement of this activity in the first quarter as well as publicity via
internal PR throughout the year.
The pride of 2010
Prime Ministerûs Export Award 2010
Samart I-Mobile Plc. won the Design Excellence Award 2010 (DEmark) in Industrial Products
category under the Prime Ministerûs Export Award 2010 for the third consecutive year for its i-mobile
PANO DC5210 from the Office of Product Value Development, the Department of Export Promotion.
Annual Report 2010
9
Nature of Business
1.
The business operations of the Company and subsidiaries are divided into three lines of business as follows:
Mobile Business
Distribution of mobile phones bundled with content into a value added service called çi-linké, accessories and SIM
cards through retail shops called i-mobile by SAMART, Franchises, Hypermarket and Specialty Store as well as wholesale
channels.
In December 2009, the Company launched 3G services as Mobile Virtual Network Operator (MVNO) on the behalf
of Telephone Organization of Thailandûs 3G services under brand name çi-mobile 3GXé. These services will provide all
services similar to the mobile operator, except for investment in the network equipments. The services are initially for
Bangkok region and will expand the service as TOTûs network expansion.
2.
Multimedia Business
2.1. Provision of voice services under the brand name of BUG1900, BUG1113 and BUG1110 and non-voice or
multimedia services under the brand name of BUG2Mobile through multi-devices and provision of infotainment
services through mobile phones such as general sport reports both in form of voice and non-voice, downloading
of ring tones, stock analysis, horoscope and other infotainment information, etc.
2.2. Content Provider through multimedia channel.
2.3. Producer of programs through television, radio, printed media and billboards.
2.4. Provision of multimedia and interactive media services
3.
International Business
Distributor of mobile phones bundled with content into a value added service called çi-linké and other services
in overseas market namely Malaysia, Indonesia, India, Bangladesh, Laos and Cambodia. The Company also plans to
cooperate with Axiata Group Berhad, a shareholder, for developing the mobile device with function and feature that
conform to demand of each country.
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Annual Report 2010
Business Structure
Mobile Business
➤
Multimedia Business
99.99%
Samart I-Mobile Plc.
➤
99.99%
Samart Multimedia
Co., Ltd.
➤
I-Mobile International
Co., Ltd.
Samart Mobile Services
Co., Ltd.
➤
97.40%
Samart Interactive
Media Co., Ltd.
➤
99.99%
Samart I-Mobile
(Malaysia) Sdn. Bhd.
➤
100.00%
Brain Source Co., Ltd.
➤
99.93%
Take A Look Co., Ltd.
➤
66.67%*
PT Samart I-Mobile
Indonesia
➤
99.80%
I-Mobile Plus Co., Ltd.
➤
99.99%
I-Sport Co., Ltd.
➤
49.99%*
Samart I-Mobile
(Hong Kong) Co., Ltd.
➤
100.00%
I-Mobile Inter
trade Co., ltd.
➤
99.99%
* The remaining portion held by partners who have business expertise in such companies with no conflict of interest.
Annual Report 2010
11
Revenue Structure
The revenue structure of the Company and subsidiaries as of December 31, 2008 - 2010 is as follows:
(Unit: Million Baht)
Revenue
Operated by % of
2008
2009
2010
shareholding Revenue % Revenue % Revenue %
Mobile Business
ë Mobile Business
SIM
100.00%
7,856
68.92
6,831
75.57
5,965
73.42
SMS
97.40%
BS
99.93%
IMP
99.99%
(1)
ë Thai-Mobile 1900
SIM
100.00%
452
3.97
0
0.00
0
0.00
Multimedia Business
BUG, SIAM
99.99%
730
6.40
800
8.85
8.99
11.06
TAL
66.67%
I-SPORT
49.99%
SMR (2)
49.89%
IMI, IMIT
99.99%
2,113
18.54
1,138
12.59
1,123
13.82
SIMM, SIMH 100.00%
SIMI
99.80%
(3)
C-Mobile
51.00%
Total Revenues from Operations
11,151
97.83
8,769
97.01
7,987
98.30
Selling support income
141
1.24
81
0.90
67
0.83
Reversal of allowance for doubtful
12
0.11
0
0.00
0
0.00
accounts/bad debt received
Interest income
9
0.08
7
0.08
5
0.06
Gain on exchange
0
0.00
10
0.11
1
0.01
Gain on change in value and
0
0.00
54
0.60
41
0.50
disposal of short-term investments
Gain on disposal of investment in
0
0.00
46
0.51
0
0.00
subsidiary company
Other income
85
0.75
72
0.80
24
0.30
Total Revenues
11,398 100.00
9,039 100.00
8,125 100.00
SIM
IMI
SIAM
BS
SIMI
I-SPORT
IMIT
C-Mobile
(1)
(2)
(3)
12
= Samart I-Mobile Plc.
= I-Mobile International Co., Ltd.
= Samart Interactive Media Co., Ltd.
= Brain Source Co., Ltd.
= PT Samart I-Mobile Indonesia
= I-Sport Co., Ltd.
= I-Mobile Inter trade Co., Ltd.
= C-Mobile Sdn. Bhd.
BUG
SMS
SIMM
TAL
IMP
SIMH
SMR
= Samart Multimedia Co., Ltd.
= Samart Mobile Services Co., Ltd.
= Samart I-Mobile (Malaysia) Sdn. Bhd.
= Take A Look Co., Ltd.
= I-Mobile Plus Co., Ltd.
= Samart I-Mobile (Hong Kong) Co., Ltd.
= Small Room Co., Ltd.
This project was terminated in 2008 and the Company transferred the rights and equipments of the billing system to TOT Public Co., Ltd. on
November 10, 2008.
Samart Multimedia Co., Ltd. sold all shares in Small Room Co., Ltd. on June 3, 2008.
I-Mobile International Co., Ltd. sold shares in C-Mobile Sdn. Bhd. on February 19, 2009.
Annual Report 2010
Information of Subsidiary Companies
Information of Subsidiary Companies as of December 31, 2010
Name of Company
Type of Business
Shareholder Registered
Capital
Total of Companyûs shareholding
Ordinary
Number of Percentage
Share
share
2,000,000 1,999,996 99.99
1. Samart Multimedia Co., Ltd.
99/12 Moo 4, Software Park
24th Fl., Chaengwattana Rd.,
Klong Gluar, Pak-kred,
Nonthaburi 11120
Tel. 0-2502-6000
Fax. 0-2502-8136
2. Samart Mobile Services Co., Ltd.
37/1 Moo 2, Phaholyothin Rd.,
Klong 1, Klongluang,
Pathumthanee 12120
Tel. 0-0502-6000
Fax. 0-2502-6946
3. I-Mobile International Co., Ltd.
33rd Fl., Chaengwattana Rd.,
Nonthaburi 11120
Tel. 0-2502-6200
Fax. 0-2502-8532
4. Brain source Co., Ltd.
24th Fl., Chaengwattana Rd.,
Nonthaburi 11120
Tel. 0-2502-6000
Fax. 0-2502-8136
5. I-Mobile Plus Co., Ltd.
Nonthaburi 11120
Tel. 0-2502-6200
Fax. 0-2502-8532
6. Samart Interactive Media Co., Ltd.
99/12 Moo 4, Software Park 24th Fl.,
Chaengwattana Rd., Klong Gluar,
Pak-kred, Nonthaburi 11120
Tel. 0-2502-6000
Fax. 0-2502-8136
1. Provide content services via
fully integrated wire and wireless
technologies both voice service
via Audiotext and Call Center,
and non voice services.
2. Content producer and
developer.
Procure and sell communication
and information technology
equipment through wholesale.
SIM
200
Million Baht
SIM
490
Million Baht
49,000,000 47,724,999
97.40
Invest in the businesses related to
the distribution of mobile phones
bundled with content in overseas
markets.
SIM
200
Million Baht
Paid-up
capital of
125 Million
Baht
20,000,000 19,999,994
99.99
Research and develop application
on mobile phone.
SIM
1
Million Baht
10,000
9,993
99.93
Carry on the service of
telecommunication business, and
be agent for all types of
telecommunication services.
SIM
100
Million Baht
Paid-up
capital of
27.5 Million
Baht
10,000,000
9,999,993
99.99
Face-to-face foretell at HoroWorld
shop and via website, provide
training and selling products related
to horoscope and fortunetelling.
BUG
160
Million Baht
16,000,000 15,999,994
99.99
Annual Report 2010
13
Name of Company
Shareholder Registered
Capital
Total of Companyûs shareholding
Ordinary
Number of Percentage
Share
share
10,000,000 6,666,659 66.67
7. Take A Look Co., Ltd.
99/3 Moo 4 Software Park
Nonthaburi 11120
Tel. 0-2502-6000
Fax. 0-2502-8136
Provide advertisement and outdoors
media services including electronic
screens (LED Billboard).
BUG
100
Million Baht
Paid-up
capital of
75 Million
Baht
8. I-Sport Co., Ltd.
99/12 Moo 4, Software Park 24th Fl.,
Tel. 0-2502-6000
Fax. 0-2502-8136
Provide sports information through
comprehensive interactive
multimedia in Thailand and overseas
market.
BUG
40
Million Baht
Paid-up
capital of
30 Million
Baht
4,000,000
1,999,996
49.99
9. Samart I-Mobile (Malaysia) Sdn. Bhd.
18 A, Jalan Mutiara Raya,
Taman Mutiara, 56000
Kuala Lumpur, Malaysia
Tel. 603-2178-9861
Fax.603-2166-4993
Distribution of mobile phones
bundled with content services and
provider of interactive multimedia
services in Malaysia.
IMI
5,000,000
Malaysian
Ringgit
2,000,000
2,000,000
100.00
10. PT. Samart I-Mobile Indonesia
Wisma 46 - Kota BNI, Lt.24
Suite 24.01, JI. Jend. Sudirman
Kav.1, Jakarta 10220, Indonesia
Tel. 62-21-5785-1986
Fax.62-21-5785-1874
services in Indonesia.
IMI
500,000
USD
500,000
499,000
99.80
11. Samart I-Mobile (Hong Kong) Co., Ltd.
26/F Tesbury Centre, 28
Queenûs Road East, Hong Kong
Tel. 852-2980-1888
Fax.852-2956-2192
services in Hong Kong.
IMI
5,000,000
HKD
5,000,000
5,000,000
100.00
12. I-Mobile Inter trade Co., Ltd.
99/3 Moo 4, Software Park 33rd Fl.,
Tel. 0-2502-6200
Fax. 0-2502-8532
Export of mobile phones bundled
with content services and other
products of the Company.
IMI
5
Million Baht
500,000
499,993
99.99
SIM = Samart I-Mobile Plc.
IMI = I-Mobile International Co., Ltd.
BUG = Samart Multimedia Co., Ltd.
14
Type of Business
Annual Report 2010
Changes During the Year
The main businesses of the Company are still from distribution of handsets in domestic and overseas markets as well as
providing variety of contents. Demand of handsets in domestic market continues to increase. The increase was mainly due to
increasing demand from replacement market and trend of customer behavior to use more than one handset. The Company has
developed various models of handsets with differentiable features at an attractive price to customers as well as continually
improved quality of after sale services. Thus, the Company was successful in retaining 2nd position in Thailandûs handset market.
Out of total handsets sold by the Company, approximately 96% of handsets were i-mobile brand. The Company launched
communicative devices which support 3G network such as 3G handset, Data Card, etc. The Company has continually increased
distribution channels in domestic and overseas markets to expand product reach to target consumers such as direct sale,
corporate sale and convenience stores.
The Company received a licence from National Telecom Commission (çNTCé), currently changed to be National
Broadcasting and Telecom Commission (çNBTCé), to be a Mobile Virtual Network Operator (çMVNOé) in 2009. The Company
has signed a MOU with Telephone Organization of Thailand (çTOTé) to act as a MVNO for TOTûs 3G services. Under the MOU
terms, the Company will provide all services similar to the mobile operator, except for investment in the network equipments. The
Company started its MVNO operations on December 3, 2009 under the brand name çi-mobile 3GXé. The services are initially for
Bangkok region and as TOT expand its network, the Company will be a nation wide MVNO Operator. The Company is a MVNO
service provider who has the highest number of subscribers with 123,000 subscribers at the end of 2010.
On the overseas front, the Company emphasizes on investment in potential growth countries such as Indonesia,
Malaysia, and India. The Company has continually invested in marketing and after sale service to increase customer satisfaction
on product that conform to demand of each country such as long-term usage battery in India, handset with key board or QWERTY
in Indonesia, etc. In addition, the Company has co-marketing campaigns with Axiata Group Berhad, a shareholder and service
provider in 9 countries, to set product planning that conform to demand of each country in the region market.
The revenues of content services both voice and non-voice services in 2010 achieved the highest revenues since
commencing these services. The Company was successful in retaining 1st position in the non-operator service provider
especially in BUG2Mobile service. The rapid growth in non-voice services was attributed to the bundling of non-voice services
into i-mobile handsets thru çi-linké application which enable more convenience for content users to reach the contents. In
addition, the Company expanded its distribution channels to CAT CDMA network by providing Ring Back Tone and Streaming
services, and also developed information relating to eat, drink and travel to service in all channels including www.edtguide.com
to serve content services on any broadband network.
Annual Report 2010
15
Industry and Competitive Analysis
As year 2010 began on the cautious note, Thai economy was prepared for turnaround in early 2010. The optimism was
based mainly on two important assumptions of export growth and tourism. Governmentûs çThai Khemkhangé stimulus did
help certain businesses in short term. The long term impact of this stimulus in construction and services sector shall be seen
in 2011-2012.
To the surprise of most, political stalemate in Bangkok in the first and the second quarter went beyond anybodyûs
expectations and confidence in Thai political system was once again in the lime light. The long protests eroded tourist arrivals
and business closure affected overall economy. It was expected that these protests would cause slower GDP growth. With
immediate settlement on the issues, government was quick to issue financial support package to the affected businesses. As
economy entered third quarter, the GDP growth estimates were above everybodyûs expectations. Thai economic growth was at
its highest in 15 years and Thai Baht appreciated to the new high since 1997 crisis. The euphoria led to concern on exports due
to appreciating currency. As usual, the exports and services sector were key drivers of economic growth. Consumer confidence
however remained subdued. Worst flooding in fourth quarter together with lingering political uncertainties did not helped to
boost consumer confidence. As the year 2010 is coming to an end, overall economic situation remains healthy with exception
of strong fund inflows and fear of asset bubble, Thai economy is poised for moderate growth of 4%-5% in 2011.
Global economic situation remained divided. BRIC (Brazil, Russia, India and China) and ASEAN were at the forefront of
growth spectrum while US and EU economies were still struggling. The surprise of 2010 was Euro crisis which began with Greek
economy and later spread to Spain, Portugal, and Ireland. These so called çPIGSé economies suffered from widening budget
deficits and needed massive bailouts. So far in 2010, Greeks and Irish were the recipient of bailouts. Spanish and Portuguese
struggled to raised funds at much higher spread over German bund, but, so far have avoided need to bail out. Economic situation
in UK was not that different. As a result of economic difficulties, weaker British pound and Euro are here to stay for at least couple
of years. A high level effort to set up monetary fund for Europe is underway.
US on the other hand struggled with high unemployment rate. QE II and recent tax breaks of $0.9 tn will prove effective
only in the short term. The key to US recovery lies in stimulating consumer demand and use weak dollar to boost US exports.
With fedûs easing of monetary policy, it is expected that hot money will flow into emerging markets creating asset bubble. On
the other hand, weak dollar is main cause of concern to countries with sizable dollar reserves. With Chinese and Indian Central
banks buying up gold, prices reached $1400/Oz in 2010. Weaker dollar also promoted rally in commodities such as oil, copper
and iron ore, but it will be short lived as demand sustainability is still not visible from here.
Japanese economic engine struggled as weak dollar eventually let Yen reaching the levels of 80s not seen in decades.
Japanese central bank is trying hard to keep struggling Yen at 83 plus level. Domestic demand, capital expenditure, private
investment all were below expectations. With appreciating property prices in China, government used tools to curb property
lending and has increased RRR recently. Weaker Yuan became the target of criticisms during G20 summit and as a result China
expanded trading band of Yuan. China is playing key role in world economic landscape and with recent instability in Korean
peninsula, Chinaûs importance have increased beyond its economic role.
In ASEAN however, the economic growth was staler. Indonesia, Vietnam, Malaysia and Singapore reported decent
economic growth. As a result of influx of hot money, currencies were on uptrend and became a challenging task for central
banks in few countries. In order to reduce exposure to USD, ASEAN member countries have agreed to trade in currencies such
as Yuan. Learning from the example of EU zone crisis, ASEAN for the time being had postponed the common currency idea.
Region is also keen on boosting up its intra ASEAN trade and trade with China and India.
In conclusion, outcome of next years election, socio political harmony, measures to stimulate weaker consumer demand
and consistency in investment policies shall be the key barometer for measuring economic stability in 2011.
Telecommunication Industry: Services Perspective
Thailand with its SIM card penetration of 100% was prepared to auction off 2.1GHz spectrum. However, a legal glitch not
only resulted in the cancellation of such auction but, as time window on National Telecom Commission (çNTCé) came to an end,
3G in Thailand now can only happen with the setting up of National Broadcasting and Telecom Commission (çNBTCé).
Telephone Organization of Thailand (çTOTé) which earlier launched its first 3G service in December 2009, had limited success
mainly due to network constraints. The existing network covers only Bangkok region and TOT currently acts as network provider,
16
Annual Report 2010
letting private operators to acquire subscribers for TOT. This arrangement is called Mobile Virtual Network Operator (çMVNOé)
and TOT have currently five MVNO and a subscriber base of 180,000.
Mobile operators were focused on non voice applications to enhance their Average Revenue Per User (çARPUé). Latest
estimates state that blended ARUP excluding interconnection fees but including the data was around Baht 220 which is at par
with the 2009 levels. The data consumption has gone up from previous years as more and more affluent customers are using
BlackBerry, iPhone and iPad.
Decision by Communication Authority of Thailand (çCATé) to buy Hutch was delayed due to political reasons and fate of
Hutch as the operators remains uncertain. As concessions granted by TOT and CAT to existing operators coming to an end
soon, new regulator have a dominant task of creating a level playing field, sort out concession related issues and most
importantly, allow efficient Mobile Number Portability (çMNPé). With approval from the cabinet, TOT has embarked upon a
network rollout plan where by 5,200 base stations shall be deployed nationwide within mid 2012. This will raise the hopes for
Thai consumer to finally avail high speed wireless broadband access.
Telecommunication Industry: Handset Perspective
Demand for mobile handsets in Thailand is likely to be in the neighborhood of 10.5 million for year 2010. Major demand
thrust is still coming from low to mid low segment where consumers are changing their older handsets for a new one at lower
costs. Feature wise nothing new was added though, on the contrary newer handsets are increasingly similar in looks and
features to that of premium segment and are available at the fraction of the costs. Only trade off is the brand name and perhaps
after sales services.
At the low end of the spectrum, cheapest handset is available for Baht 700- Baht 900 while, high end premium phones
could be bought around Baht 25,000. The political stand off in Bangkok was bonanza for handsets with TV tuners and many
enjoy watching live events on their handsets cause house brands, Chinese brands and brands from South Korea were successful
in stepping up their presence. Wider acceptance of Android based handsets among Thai consumers is encouraging as this OS
has proved superior for user friendliness and content usage. Apple iPhone and BlackBerry continued to catch attention as social
networking is causing people to stay on line and in touch with their friends. Similarly, with the launch of iPad, a tablet revolution
is just around the corner. However, limited 3G coverage is a big hindrance in penetrating these products. It is expected that by
end 2011, there will be a boom in handhelds which will take industry to the new level. New Handhelds is perhaps the last nail
in the coffin for smart phones!
The tablet revolution is here and once Thailand is ready for 3G, it will act as new driving force for the handheld market.
TOTûs 3G network shall be the pilot for such devices. Though its off take shall be limited in the initial period, itûs only upon the
nationwide 3G rollout by all the operators, handheld industry shall take key role in handset industry.
Entertainment and Media Industry
The road towards convergence of media, entertainment and telecom industry stalled when 3G auction were put off due
to legal issues. Despite the set back, the marriage of media and telecom industry continue to flourish thru increased deployment
in broad band usage, more wi-fi spots, etc.
The real convergence on a large scale is far from commercial success in Thailand. However, as a first step, Apple iTune
platform has been officially launched and consumers can download applications on pay per use basis. Other traditional
applications such as video streaming, mobile movie preview, etc. are widely available from traditional mobile operators. A big
jump in the content usage is expected as more and more users avail content on wireless networks. User generated content such
as You Tube is non existent in Thailand on a wider scale. çEé Books was another application that was launched in Thailand and
its acceptance is growing gradually.
With launch of Mobile Virtual Network Operators in 2010, these MVNOûs are offering data plans and not the killer content.
The current form of online entertainment is linked to fortune telling and information etc. It is expected that killer application on
3G is still non-existent, that day is not far when Thai consumers shall able to enjoy real benefits of convergence between
telecom and media industry.
Annual Report 2010
17
Risk Factors
Risk factors that may impact the Companyûs operation are as follows:
1. Business Risks
1.1
1.2
1.3
18
Handset Business
In 2010, trend of handset market for Smartphone has been growth perspective including its sales volume
and market value due to the change of customerûs usage behavior, more customers prefer to use Mobile Internet.
Smartphone could meet the customerûs need better than Proprietary phone, seen from the increased popularity of
the Gadget including Smartphone, Tablet PC. As the result, the market share of Smartphone or Application phone
was increased consecutively. The Company considered that such change may affect the sales volume of handset
in the middle market and may have the risk that causes lower market share of the Company. Therefore, the
Company also planned and began working to support such change by developing various products such as Feature
phone focusing on application in social networking to support the services of Chat, Facebook, Twitter and other
online applications. In addition, the Company plans to launch handset and tablet PC that can support the operating
system of Android OS and 3G services in 2011. Moreover, the Company, a provider of Mobile Virtual Network
Operator (MVNO), provided 3G services to be a part of differentiating i-mobile brand handset. From this operation,
sales volume of i-mobile brand can be better due to the customerûs need for changing mobile device to support
3G service.
Mobile Virtual Network Operator (MVNO) Business
Mobile Virtual Network Operator in recent year has been affected by the uncertainty of network expansion
plans from 3G network owner with some difficulties such as coverage of the service area and quality of service.
However, Council of Ministers passed the resolution that TOT Public Company Limited (TOT) shall expand its 3G
network and plan to begin 3G network expansion at the end of second quarter of the year 2011 onward, which will
cover more 3G service areas. As the result, the Companyûs market plan will be more evident and expand user base
as planned. According to the mentioned expansion as well as better service quality, the Company will have
sustainable customers which led to generate recurring revenue from 3G service that will be the Companyûs
significant future income.
Thailand entered to 3G technology which benefit directly to the content service including application on
handset due to the speed of Internet using via Mobile Internet of 3G technology better than 2G technology. It was
predicted that 3G technology will enhance the market value of the content and application continuously grown likely
jumping steps. Therefore, the Company foresaw the business opportunity and has been conducting research and
development of content and application to add values of the services through 3G to maintain existing market share
together with expand into new market. By this, the Company will bring in sustainable service revenue in the future.
Content Business
Content business has been changing from existing technology to 3G technology. The current technology
market must be deemed as a large market with high competition. However, it is entering the saturation of market,
seen from the behavior of consumer who uses both voice and non-voice stable and slow. These factors were
happened by stable demand of existing content including alteration from low and medium priced handsets to higher
priced one or Smart phone: high efficiency and easily access to various information. Therefore, the Company
supports the development of new content and application with more attractive functions and features to fulfill new
requirements of a customer as well as suitable for premium handset of which increasingly used.
In the part of content for 3G technology, the Company has been preparing by developing from contents
which the Company has expertise and be leader in the market such as sports, news, forecast, etc. as well as
developing various contents and application to meet the new lifestyle of consumer in the future. These can be
seen from the launching of www.edtguide.com, the number one website of lifestyle service to provide eating,
Annual Report 2010
drinking, and travelling information, www.horoworld.com, a website developed from the Companyûs strong content
in forecasting category to superior and perfect services as well as joining with partner to launch www.showded.com;
a top-ranked community website, providing video service. In addition, the Company planned to expand its business
to online shopping which is expected to grow substantially in the future.
The key factor of content business supporting both existing and 3G technologies in the future is the
çcontenté itself. The Company focuses on being content owner. Therefore, the Company has been developing and
producing its own contents; more than 50% currently, as well as cooperating with content strategic partners both
individual and juristic-person through business contracts to build up strength and confidence in present business
operation and in the future.
1.4
Handset Business in Overseas
For handset business in overseas, the Company focuses on market in the countries stable in politics,
economics and society in order to reduce the risk from operation. The Company emphasizes on handset market in
Malaysia and Indonesia. The Company has been building strong relationships with major distributors in each
country to strengthen the distribution channel that is a significant factor in the success of handset business.
Moreover, the Company also intends to expand its business in the countries where Axiata Group Berhard (çAxiataé)
operates its services. Currently, Axiata operates its handset service in 9 Asian countries. The joining with Axiata shall
reduce operation risk and will enable to operate its business in a stable long-term onward.
2. Financial Risk
2.1
Foreign Exchange Risk
The Company and subsidiaries have foreign currency debts and assets as a result of import and export of
products from overseas market which may have an exposure from fluctuation of foreign currency. The Company
closely monitors the movement of foreign exchange rates by using conservative financial policy and no purpose to
speculate on foreign exchange. The Companyûs foreign currency revenues and cost were 3.7% of total revenues
from sales and 83.5% of total cost of sales, respectively. A forward contract has been effectively utilized by the
Company to manage its foreign exchange risk. Additionally, the Company also considers the appropriate financial
instruments including natural hedge. As of December 31, 2010, the Company and subsidiaries had foreign currency
assets and debts of USD 48.09 million of which USD 23.16 million are covered by forward contracts.
2.2
Interest Rate Risk
The Company exposures to interest rate risk relating to borrowings from banks. Unfavorable movements
in interest rates shall affect financial cost that has effect to the Companyûs cash flows. As the end of 2010, the
Company and subsidiaries had borrowings from banks of Baht 2,334.5 million, or 77.4% of total liabilities, and
all borrowings are short-term borrowings as well as interest rate structure is floating rates. The Company closely
monitors the interest rate in market and considers the appropriate borrowing term and considers borrowing in USD
that has cheaper interest rate, the Company has lower financial cost. Given any signs of volatility, the Company
may use derivative financial instruments to hedge such risks.
Credit Doubtful Debt
The Company is exposed to Credit risk primarily through trade accounts. The consolidated trade account
receivables as of December 31, 2010 were Baht 2,964 million of which Baht 34 million were outstanding more than
12 months, a decrease of Baht 4 million from end of 2009. The Company has provided Baht 24 million towards
doubtful accounts, an increase of Baht 4 million from end of 2009. The management is confident that all risk from
account receivable collection has been well managed as Company set up credit control system to consider risk
level and close monitoring of collection.
2.3
Annual Report 2010
19
2.4
Contingent liabilities
In August 2008, Samart I-Mobile (Hong Kong) Limited, a subsidiary company, received a letter from the
Inland Revenue Department of Hong Kong (çIRDé) questioning the deductibility of consultancy fees and
management fees paid to I-Mobile International Co., Ltd., another subsidiary company, in relation to the 2007
income tax return. Management of the subsidiary had submitted a reply letter to IRD in June 2009 to provide
information in relation to the deductibility of consultancy fees and management fess in income tax return. In
addition, the IRD issued another letter in December 2009 to request further information from subsidiary company
regarding the consultancy fees and management fees totally USD 15.75 million for the year 2006 - 2008. Response
from IRD has not yet been received. However, the management are of the opinion that as the consultancy fee
and management fee are related to the business activities and, therefore, should be fully deductible for income
tax purposes, no additional income tax provision or related expenses is required for the year 2006 - 2008. The
maximum tax exposure would be 17.5% on the amount of consultancy fees and management fees.
2.5
Guarantee to subsidiary companies
The Company has contingent liabilities in respect of the guarantee of subsidiariesû short-term credit
facilities for their jointly working capital. The Company may have the risk from default on the guaranteed loans.
However, the Company always closely monitors subsidiariesû operating result and financial status. The management
is confident that there is no event of defaults. As of December 31, 2010, subsidiariesû outstanding loans which were
guaranteed by the Company were Baht 1,145 million.
3. Risk from major shareholders holding over 50% of the shares
Samart Corporation Public Company Limited and its subsidiaries hold 2,578,377,200 shares or 59.94% of the
Companyûs issued and paid-up capital which can control most of the shareholdersû resolutions on various important
matters such as the appointment of directors, or other resolutions that need a majority votes of the shareholders, except
for those resolutions that require 75% of the shareholdersû votes, as specified by the law or the Companyûs Articles of
Association. As a result, other shareholders may not be able to gather enough votes to offset the major shareholdersû
influence. However, the Company appointed 3 independent directors to be the Audit Committee to review the connected
transactions or the transactions that may lead to conflicts of interests to ensure that they are in compliance with the law
and the regulations of the SET and the SEC, and are reasonable and for the highest benefit of the Company.
4. Risk from the change of major shareholders as a result of share mortgage
Samart Corporation Public Company Limited (SAMART) entered into loan agreements with a Thai bank, under this
agreement SAMART agreed to mortgage 1,220 million shares or 28.36% of the Companyûs paid-up capital which it was
holding as securities against the loan repayment of SAMART. Currently, the outstanding loans of these agreements of
SAMART were approximately 10% of the principal loans of Baht 2,250.25 million. If SAMART violates the loan agreement
and the bank uses its right to enforce the mortgage by selling the mortgaged shares to the market, there will be no change
in the major shareholders. However, this may affect the power to control the Companyûs business. This is because after
such mortgage enforcement, SAMART and its subsidiaries will continue to hold altogether a total of 31.58% of the
Companyûs paid capital. This will allow the shareholders who purchase all of the said shares to veto the resolutions at the
shareholdersû meeting on various important matters which the Companyûs Articles of Association or related laws require
75% of the total votes of the shareholders who are present and have the right to vote must be received.
20
Annual Report 2010
Shareholders
As of December 30, 2010, the top ten shareholders of the Company are as follows:
Shareholderûs Name
1. Group of Samart Corporation Plc. 1
2. Axiata Group Berhad
3. Mr. Somchai Vimokcharoensuk
4. Mr. Suriya Dejchanccchaiyooth
5. Vilailuck Group 2
6. Mr. Somruay Saelim
7. M.L. Soonthornchai Chayangkool
8. Mr. Choochai Supniti
9. Mr. Theerawat Pjpatdittakul
10. Mr. Thanakorn Boonkongchuen
Total shares of top ten shareholders
Total shares of minority shareholders
Total of issued and paid up shares
No. of Share
2,578,377,200
1,050,000,000
90,982,700
81,722,600
80,238,000
77,141,700
50,946,700
30,445,700
23,403,800
22,534,400
4,085,792,800
215,507,200
4,301,300,000
%
59.94
24.41
2.12
1.90
1.86
1.80
1.18
0.71
0.54
0.53
94.99
5.01
100.00
Source: The Companyûs shareholder registration as of December 30, 2010 from Thailand Securities Depositary Co., Ltd.
1
Group of Samart Corporation Plc.:
- Samart Corporation Public Company Limited
- Samart Telcom Public Company Limited
- Samart International Co., Ltd.
Total
No. of Share
2,506,764,400
68,992,800
2,620,000
2,578,377,200
%
58.28
1.60
0.06
59.94
2
Vilailuck Group:
- Vilailuck International Holding Co., Ltd.
- Mrs. Sukanya Vanichjakvong
- Mr. Watchai Vilailuck
- Ms. Sirirak Vilailuck
Total
No. of Share
53,090,000
26,617,000
481,000
50,000
80,238,000
%
1.23
0.62
0.01
0.00
1.86
Annual Report 2010
21
Management Structure of the Company
The Companyûs management structure comprises of the Board of Directors and 5 committees; Audit Committee,
Corporate Governance Committee, Executive Committee, Risk Management Committee and Nominating and Compensation
Committee.
Board of Directors
Corporate Secretary
Audit
Committee
Committee
Internal Audit
--------------------------
Executive
Committee
Risk Management
Committee
Nominating and
Compensation Committee
Chief Executive
Officer
President
Chief Operating
Officer
Mobile
Business
Multimedia
Business
International
Business
Finance and Accounting
Operation
Buiness Development
22
Annual Report 2010
Board of Directors as of December 31, 2010:
1.
Professor Suphachai Phisitvanich
2.
Dr. Chotivid Chayavadhanangkur
3.
Mr. Kunthit Arunyakananda
4.
Mr. Charoenrath Vilailuck *
5.
Mr. Watchai Vilailuck *
6.
Mr. Thananan Vilailuck *
7.
Mr. Jong Diloksombat
8.
Mr. Azwan Khan bin Osman Khan **
9.
Mr. Reza bin Abdul Rahim **
Miss Boonrut Mongkolratanakorn
Chairman of the Board of Directors / Independent Director
Independent Director
Director
Director
Director
Director
Director
Director
Corporate Secretary
Remarks: * Representative directors from Samart Corporation Plc., a major shareholder, with 58.28% stake holding.
** Representative directors from Axiata Group Berhad, a major shareholder, with 24.41% stake holding.
The number of directors is in line with the Companyûs Articles of Associations that the Board of Directors should have
at least 7 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.
Authorized Directors as of December 31, 2010 are as follows:
Two out of the following three directors are authorized to sign on behalf of the Company with the Companyûs seal affixed:
Mr. Charoenrath Vilailuck, Mr. Watchai Vilailuck and Mr. Thananan Vilailuck or one director from Mr. Charoenrath Vilailuck, Mr.
Watchai Vilailuck, Mr. Thananan Vilailuck co-sign with Mr. Jong Diloksombat with the Companyûs seal affixed.
Qualifications of Director
1.
Has qualifications which comply to Public Company Act B.E. 2535 or related laws including regulations of the Stock
Exchange of Thailand, the Securities and Exchange Commission, and Companyûs Articles of Association.
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 shareholdersû meeting.
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.
Has sufficient time for fully participated as a Director of the Company.
Qualifications of Independent Director
1.
Holding share not exceeding 1 percent of the total number of shares with voting rights of the Company, parent company,
subsidiaries, associate company, major shareholder or controlling person of the Company, including shares held by related
persons of such independent director.
2.
Neither being nor used to be an executive director, employee, staff or advisor who receives a salary; or controlling person
of the Company, parent company, subsidiaries, associate company, same-level subsidiaries, major shareholder or
controlling person of the Company unless the foregoing status has ended not less than two years prior to the date
of appointment.
3.
Not being a person related by blood or legal registration such as father, mother, spouse, sibling and child, including spouse
of child of executive, major shareholder, controlling persons, or persons to be nominated as executive or controlling person
of the Company or subsidiaries.
4.
Neither being nor having a business relationship with the Company, parent company, subsidiaries, affiliates, major
shareholder or controlling person of the Company, including professional or 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
Annual Report 2010
23
5.
6.
7.
to the date of appointment or the transaction is irregular and reasonable. The independent director, during his term, may
have business relation with the Company over the level set by the SEC but prior the transaction, unanimous approval by
the Board of Directors is required.
Not being a director appointed as a representative of directors of the Company, major shareholder or shareholder who
is related to the Companyûs major shareholder.
Not undertaking any business in the same nature and in significant competition to the business of the Company or
subsidiaries or not being a partner in a partnership or being an executive director, employee, staff, advisor who receives
salary or holding shares exceeding 1 percent of the total number of shares with voting rights of other company which
undertakes business in the same nature and in significant competition to the business of the Company or subsidiaries.
Not having any characteristic which cause the inability to express independent opinions with regard to the Companyûs
business operations.
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 and Compensation Committee. However the independent directors shall be in post no longer than 3
terms except getting a unanimous approval from the Nominating and 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, and
shall be approved from the Board of Directors and/or the Shareholdersû Meetings.
Scope of Responsibilities and Authority of the Board of Directors
1.
Conduct business with responsibility, due care, and integrity uphold the duties according to the law, and the 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 to replace of those who retire by rotation as well as consider the remuneration package for such
directors and committeesû members, which are proposed by Nominating and Compensation Committee, for further
consideration of the shareholdersû meeting.
4.
Appoint committees to oversee administrative process and internal system to coincide with Companyûs policies namely,
Executive Committee, Risk Management Committee, Corporate Governance Committee and Nominating and Compensation
Committee. For the appointment of Audit Committee members, the Nominating and Compensation Committee will
nominate appropriated candidates propose for further consideration of the Board of Directors and/or shareholdersû
meeting.
5.
Appoint and consider remuneration package, proposed from the Nominating and Compensation Committee, for top
executives and company secretary.
6.
Summarize annual budget and financial statements of the Company every end of the fiscal year. Authorize the statements
for further consideration of the Annual General Meeting of Shareholders.
7.
Nominate appropriated auditor and its remuneration from proposal of the Audit Committee for further consideration of
the Annual General Meeting of Shareholders.
8.
Ensure that the Company has 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 the 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 interest to the Company.
24
Annual Report 2010
Audit Committee as of December 31, 2010:
1.
2.
3.
Chairman of the Audit Committee
Audit Committee Member
Secretary
Remarks: All members of audit committee have adequate knowledge and experience to review creditability of the Companyûs financial
statement.
The Audit Committeeûs members have to be the independent directors who were elected by the Nominating and
Compensation Committee and proposed for the appointment of the Companyûs Board of Directorsû and/or the shareholdersû
meetings, the Audit Committee shall at least 3 members.
Qualifications of the Audit Committee
1.
The Audit Committee members shall be appointed by the Board of Directors and/or shareholdersû meetings.
2.
All members should be Independent Directors as the definition of independent director qualification from the SEC as
described under çQualifications of Independent Directoré.
3.
Not being a director assigned by the Board of Directors to take part in the business decision of the Company, parent
company, subsidiaries, associate company, same-level subsidiaries major shareholder or controlling person of the
Company.
4.
Not being a director of parent company, subsidiaries, and same-level subsidiaries which is a listed Company.
5.
Having sufficient knowledge, experience, and time to perform duties as the Audit Committee members.
6.
At least 1 member of the Audit Committee shall have sufficient knowledge and experience to review the reliability of
financial statement, the Company has to define in filling form, Form 56-1 and Form 56-2 for 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 positions
Term 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 and Compensation Committee and the Committee ensures that the extra term will not
cause or impact to the independent of such director, and shall be approved from the Board of Directors and/or the shareholdersû
meetings.
Scope of Responsibilities and Authority of the Audit Committee
1.
Review the Companyûs financial statement to ensure its accuracy and adequacy.
2.
Review the Companyûs internal control, and internal audit system to ensure that they are suitable and efficient, to
determine the independence of internal audit unit, as well as to approve the appointment, transfer and dismissal of the
chief of an internal audit unit or any other unit in charge of an internal audit.
3.
Review the Companyûs compliance with the Securities and Exchange Act, the regulations of the SET and the laws
relating to the Companyûs business.
4.
Consider, select and nominate an independent person to be the Companyûs auditor, and propose its remuneration for
further consideration of the Board of Directors and shareholdersû meeting.
5.
Attend a non-management meeting with an auditor at least once a year.
6.
Review the connected transactions or the transactions that may lead to conflicts of interests to ensure that they are in
compliance with the law and the regulations of the SET, and are reasonable and for the highest benefit of the Company.
7.
Prepare report of the Audit Committee to be disclosed in the annual report with at least information defined in the
notification of the SET.
8.
Perform any other activities as assigned by the Board of Directors.
Annual Report 2010
25
Corporate Governance Committee as of December 31, 2010:
1.
Chairman of the Corporate Governance Committee (Independent Director)
2.
Member (Independent Director)
3.
Member
4.
Mr. Pairote Varophas
Member
Secretary
Terms of positions
Term of each member is 1 year. The Nominating and 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 consideration and
appointment from the Board of Directors in the first board meeting after the Annual General Meeting of Shareholders. The Chairman
of the Committee has to be nominated from the Companyûs Independent Director. However, the retired members are eligible to be
re-elected for another term.
Scope of Responsibilities and Authority of the Corporate Governance Committee
1.
Responsible for governing and monitoring business operation and performance of committees, management and
employees of the Company to comply with the principles of good corporate governance, Companyûs policies and related
laws.
2.
Establish and review the Companyûs significant procedures and practices to comply with the principles of good corporate
governance.
3.
Regularly review the Companyûs policies, principles and practices.
4.
Provide suggestions relevant to business ethics and best practices to the Companyûs directors, management and
employees.
5.
Ensure that the principles of good corporate governance are performed on practice continuously and appropriately.
6.
Report to the Board of Directors the Companyûs good corporate governance along with its opinions for the practices and
recommendations for appropriate improvements.
Executive Committee as of December 31, 2010:
1.
Mr. Watchai Vilailuck
Executive Chairman
2.
Mr. Thananan Vilailuck
Member
3.
Member
Secretary
Terms of positions
Term of each member is 1 year. The Nominating and Compensation Committee will annually consider and select appropriate
persons from the members of the Board of Directors and management propose for further consideration and appointment from the
Board of Directors in the first board meeting after the Annual General Meeting of Shareholders. However, the retired members are
eligible to be re-elected for another term. CEO of the Company will be the Chairman of the Executive Committee.
Scope of Responsibilities and Authority of the Executive Committee
1.
Set Companyûs strategies and business plan as well as the Companyûs management structure and delegation of authorities
for further approval of the Board of Directors.
2.
Audit, monitor and implement the Companyûs policies and management practices to conform to the assignment from the
Board of Directors efficiently.
3.
Consider and approve annual budget of the Company for further approval of the Board of Directors.
4.
Consider remuneration policy and salary structure and propose to the Nominating and Compensation Committee for
consideration prior to further approval of the Board of Directors.
26
Annual Report 2010
5.
6.
Act on behalf or in the name of the Company as delegation of authorities defined in the Companyûs policy and practice.
Carry out other work as assigned by the Board of Directors.
The delegation of authorities, duties and responsibilities of the Executive Committee shall not be delegated or further
assigned that authorize the Executive Committee or its attorney to approve any transactions that the Executive Committee or
connected persons or any persons who may have conflict of interest have done with the Company or its subsidiaries unless
such transactions are complied with the Companyûs policy or principle approved by the Board of Directors. Such connected
transactions shall be proposed to the Board of Directorsû and/or shareholdersû meetings for approval to comply with the
notification of the Stock Exchange of Thailand, the Securities and Exchange Commission (SEC) or related law.
Risk Management Committee as of December 31, 2010:
1.
Chairman of the Risk Management Committee
2.
Mr. Sirichai Rasameechan
Member
3.
Member
4.
Member
5.
Mr. Adithep Nisamaneevong
Member
6.
Mr. Teerawut Kreepanich
Member
Secretary
Terms of positions
Term of each member is 1 year. The Nominating and Compensation Committee will annually consider and select
appropriate persons from the members of the Board of Directors, management and/or any qualified candidates propose for
further consideration and appointment from the Board of Directors in the first board meeting after the Annual General Meeting
of Shareholders. However, the retired members are eligible to be re-elected for another term. The nominated committeeûs
member will appoint the chairman of Risk Management Committee from the committeeûs members.
Scope of Responsibilities and Authority of the Risk Management Committee
1.
Set clear business directions, identify, analyze and investigate significant risk factors as well as specify strategies to
manage those risks.
2.
Set risk management standards for use as guidelines in each work unit.
3.
Supervise to ensure that such measures are fully communicated and employees have complied with them.
4.
Provide for a systematic and continued evaluation and analysis of damage that may occur to make sure that risk survey
has covered all processes of business operations.
5.
Support and develop risk management continually to cover all organization and comply with international standard.
Nominating and Compensation Committee as of December 31, 2010:
1.
Chairman of the Nominating and Compensation Committee (Independent Director)
2.
Dr. Chotivid Chayavadhanangkur Member (Independent Director)
3.
Mr. Reza bin Abdul Rahim
Member
4.
Member
Miss Boonrut Mongkolratanakorn Secretary
Terms of positions
One-third of the Nominating and Compensation Committee, who have been longest in office, shall retire by rotation every
year. The retired directors are eligible to be re-elected for another term by obtaining majority vote from the Board of Directors.
In case of vacancy, the Nominating and Compensation Committee will consider an appropriate person from the members of the
Board of Directors and/or any qualified candidates and propose to the Board of Directors for appointment.
Annual Report 2010
27
Scope of Responsibilities and Authority of the Nominating and Compensation Committee
1.
Recruit, select, and nominate appropriate candidates for independent directors, Chairman of the Board, Board of Directors
proposed for consideration and approval of Board of Directorsû and/or the shareholdersû meetings when those positions are
vacant due to termination of terms or other reasons.
2.
Recruit, select, and nominate appropriate candidates for position members of each committee, CEO, top management and
company secretary proposed to consideration of Board of Directors when such position is vacant as well as propose
criteria for selecting candidates for the succession plan.
3.
Propose to the Board of Directors the guidelines and reasonable remuneration packages for all members of the boards
and executives of which must be complimented to their duties, conform to the Companyûs operating performance and
marketûs atmosphere.
4.
Evaluate the Companyûs performance for consideration of the annual bonus and merit increase.
5.
Review the Companyûs salary structure and any other remuneration.
The Management as of December 31, 2010:
1.
Chief Executive Officer
2.
President
3.
Chief Operating Officer
4.
Miss Chullada Sapsarasin
General Manager
5.
Miss Supannee Thawinwang
VP- Marketing Integration
6.
Mrs. Sumontip Srimek
VP- Account
7.
VP- Finance
Scope of Responsibilities and Authority of Chief Executive Officer
1.
Manage and control general business operation of the Company to comply with its objectives, policy and the Articles of
Association.
2.
Consider investment plans before proposing to the Executive Board and the Board of Directors for further approval.
3.
Act on behalf or in the name of the Company as delegation of authorities defined in the Companyûs policy and practice.
4.
Carry out any assignment from the resolutions of the Board of Directors and/or the Companyûs shareholders meetings.
The delegation of authorities, duties and responsibilities of CEO shall not be delegated or further assigned that authorize
CEO or its attorney to approve any transactions that CEO or connected persons or any persons who may have conflict of
interest have done with the Company or its subsidiaries unless such transactions are complied with the Companyûs policy or
principle approved by the Board of Directors. Such connected transactions shall be proposed to the Board of Directorsû and/or
shareholdersû meetings for approval to comply with the notification of the Stock Exchange of Thailand, the Securities and
Exchange Commission (SEC) or related law.
Nomination of Directors and Management
The Nominating and 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, CEO,
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 and 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 more than onehalf 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
and 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 the SEC and the SET as a minimum. Moreover,
28
Annual Report 2010
the Board 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 the Executive Committee, the Audit Committee, the Risk
Management Committee, the Corporate Governance Committee and the Nominating and Compensation Committee. The
nomination of members of the committee will be selected and nominated by the Nominating and 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.
Remuneration of Directors and Management
Remuneration of Directors
Policy of Directorsû Remuneration has 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 and
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 2009 approved remuneration for directors of
the Company and Committeesû members at the amount of not exceeding Baht 5 million which consists of meeting allowance
and bonus. The meeting allowance for each meeting participated of the Board of Directors and Committees was shown below:
Position
Chairman of the Board of Directors
Director
Chairman of the Corporate Governance Committee
Corporate Governance Committee Member
Chairman of the Nominating and Compensation Committee
Nominating and Compensation Committee Member
Allowance per Meeting (Baht)
30,000
15,000
20,000
15,000
15,000
10,000
15,000
10,000
There is no consideration of meeting allowance for the Executive Committee and the Risk Management Committee since
all members are the Companyûs executives.
Remuneration of Management
Remuneration for the management will be determined in accordance with the principles and policy set by the Nominating
and Compensation Committee which be related to the performances of the Company and each management.
Annual Report 2010
29
Total Remuneration in 2010
1.
Monetary
1.1 The meeting allowance and bonus of the Board of Directors and Committees are as follows:
Name
Director
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
1.2
Mr. Charoenrath Vilailuck
Mr. Azwan Khan bin Osman Khan
Total
210,000
105,000
105,000
105,000
105,000
105,000
105,000
45,000
30,000
915,000
75,000
100,000
75,000
250,000
30,000
20,000
20,000
20,000
90,000
30,000
45,000
10,000
30,000
115,000
Bonus
(Baht)
Total
(Baht)
250,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
2,250,000
535,000
465,000
445,000
305,000
305,000
305,000
325,000
245,000
240,000
230,000
220,000
3,620,000
Monetary Remuneration of 7 managements is as follows:
Type
Salary
Bonus
Provident Fund
Total
2.
Meeting Allowance (Baht)
Audit
Corporate Nominating and
Committee Governance Compensation
Committee Committee
Amount (Baht)
17,832,840
1,521,115
1,511,630
20,865,585
Other Remuneration
On May 29, 2009, the Company issued 100,250,000 warrants to the Companyûs directors and employees of the
Company and its subsidiaries at Baht 0 per unit. The warrants have an exercise ratio at 1:1, are exercisable at a price of
Baht 1.7 per share, and have an exercise period of five years period from the issue date, expiring on May 28, 2014. The
warrants are exercisable on the 15th of the last month of each quarter throughout their terms, from June 15, 2009 to May
28, 2014.
Dividend Payment Policy
The Company has policy to pay dividend no less than 50% of its consolidated net profit after deduction of all reserves
as stated in the Companyûs Articles of Association and related laws, subject to need for future investment and business plan.
The Companyûs subsidiary and associated companies have policy to pay dividend no less than 50% of their net profit after
deduction of all reserves as stated in the Companyûs Articles of Association and related laws, and consideration of Companyûs
financial position.
Inside Information Control
The Company will inspect to unsure 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. In addition, the Company
30
Annual Report 2010
sets as policy that all employees shall acknowledge and sign the agreement of non-disclosure confidential information, nonviolation of concealment of computer related and non-infringement of intellectual property. New employee shall sign this
agreement together with employment contact. It was also set forth in the Companyûs Business Ethics refuse to the directors,
management and employees of the Company to use Companyûs inside information for personal benefits. Any trading of The
Company securities within one month prior to disclosure of either Companyûs financial performance or any other information that
may affect securitiesû price is prohibited. In addition, directors and executives have to disclose their interest and related person,
and inform to the Board of Directors when they have connected transaction. The Company has drawn out guidelines in the
Business Ethics under çconflict of interesté, and informed to all employees to comply with.
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 and as stipulated penalty Section 59 according to the Securities and Exchange Act B.E. 2535. The Directors
and management have to report such information to the Company Secretary for further handling and report 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 and disclosed on the Companyûs website.
Moreover, the Corporate Governance Committee has been assigned to govern and monitor the performance of the
Company to comply with the related regulations continuously and appropriately.
Human Resource
Number of employees of the Company and its subsidiaries classified by line of business for the pass 3 years are as
follows:
Line of business
Number of Employees (persons)
2008
2009
2010
1. Mobile Business
725
692
668
2. Multimedia Business
157
141
154
3. International Business
274
61 *
40
4. Support Business
267
233
220
Total
1,423
1,127
1,082
Note: * Number of employees was greatly decreased compared to 2008 due to during the year 2009, I-Mobile International Co., Ltd.,
a subsidiary company, sold shares of I-Mobile Sdn. Bhd., another subsidiary company in Malaysia.
Expenses related to the employees of the Company and subsidiaries for the pass 3 years of which comprised salary,
bonus, provident fund, warrants and others such as special grant, O/T and commission are as follows:
Remuneration
Amount
2008
2009
2010
Salary
(Million Baht)
290.70
231.23
219.72
Bonus
(Million Baht)
15.99
17.7
15.12
Provident Fund
(Million Baht)
7.57
7.91
7.38
Others
(Million Baht)
100.26
68.69
95.35
Total
(Million Baht)
414.52
325.53
337.57
Warrants *
(Million Unit)
42.35
Note: * On May 29, 2009, the Company issued 100,250,000 warrants to the Companyûs directors and employees of the Company and
its subsidiaries at Baht 0 per unit. The warrants have an exercise ratio at 1:1, are exercisable at a price of Baht 1.7 per share,
and have an exercise period of five years period from the issue date, expiring on May 28, 2014. The warrants are exercisable
on the 15th of the last month of each quarter throughout their terms, from June 15, 2009 to May 28, 2014.
Annual Report 2010
31
Human Resource Development
Top management has strong belief that the employee is vital resources to grow a sustainable and competitive business.
Therefore, Human Resource has been developed continuously to foster knowledge, skill and capability with the management
system tools such as Competency Assessment, Performance Management, HR centralized database system and others. These
should ensure that the employeeûs capability should be developed the appropriately and continuously as well as compliance with
corporate competency expectation to support current and future businesses.
The Company has realized the importance of continuous support on Human Resources Development by providing a
variety of training and development courses both in-house and outer trainings. In addition, the Company has initiated several
new programs to improve employeesû capabilities continuously and systematically in order to increase their knowledge, skills
and working behaviors to ensure that employees have appropriate capabilities for their own accountability aligning to the
Companyûs policy and leading to the sustainable growth. The initiated programs are as follows:
1.
Career Development Program
Career Development Program, individual career path development plan, for both management and operation level
has been established for which employees could perceive their own career development by competency assessment and
analysis. The Company has conducted individual annual learning and development roadmap for all levels of employee
focusing on Generic Competency to enhance corporate skill and working behavior, Managerial Competency and
Functional Competency. Career Development Program should enable employees growing their own career steadily and
providing more value to the Company in the long run.
2.
Performance Development Program
The Company has developed performance appraisal by which Key Performance Indicator (KPIs) has been applied
to all levels of employees and also enable them clearer goal and more appropriate working direction. Key Competency
has been considered in performance appraisal process to increase effective performance.
3.
Management Development Program
The Company has developed management training courses for senior management level specifically to strengthen
their leadership and management skills providing new and useful knowledge to apply in their routine work. These programs
lead management to enhance their skills to prepare for their own career advancement and promotion supporting the
Companyûs growth to match the current and future businesses.
4.
Talent Management Program
The Company believes that the employee is the most valuable asset leading to corporate achievement. Hence, the
employee who has high performance and high potential should be developed by providing special training courses and
career path planning for such employee. Talent Management Program aimed to retain talented employee by serving
fast-track career progress and enhance their knowledge and competencies to fully apply to their work as well as build
up their sense of engagement toward work and the company.
5.
Self-Development Program
The Company set the year 2010 as the year of reading and learning. The Company has provided special courses
and activities throughout the year to create reading culture and learning behavior in the organization including various
activities such as Friend recommended book, Book Barter Campaign, Management recommended book, and providing
variety of books supporting the learning needs of employees. These activities enhance the employeesû learning and share
their knowledge throughout the organization thus leading the Company to create a learning society.
32
Annual Report 2010
Summary of Training to management and employees in 2010
Training
In-House Training
Management
Employees
Frequency
Number of Participants
Total
35
80
115
442
1,662
2,104
Total
16
30
46
16
66
82
External Training
Management
Employees
Remark: The Company has policy to train all sale representatives about the Companyûs products and services on a monthly basis.
Annual Report 2010
33
Report of
the Corporate Governance Committee
To
Shareholders
The Company realizes the importance of business and management guidelines for good corporate governance seriously
and concretes a vital role in business operations resulting in efficient and effective management, sustainable growth and fair
treatment among all stakeholders. The Board of Directors has established the Corporate Governance policy and Business Ethics
in a legible form since 2005, and appointed the Corporate Governance Committee to oversee and monitor the conduct of good
corporate governance and corporate social responsibility guideline at all levels of internal operations which will create good
corporate governance culture and enhance the organizationûs management efficiency.
The Corporate Governance Committee conducted 2 meetings in 2010 to carry out the duties and responsibilities
assigned by the Board of Directors and then propose to the Board of Directors for consideration. The significant matters
considered during the year were summarized as below:
1.
2.
3.
4.
5.
Considered and revised the Companyûs corporate governance policy and business ethics to comply with the Principle of
Good Corporate Governance and Corporate Social Responsibility as well as the regulations of the SET, the SEC, and
related laws.
Considered and revised all committeesû charters to comply with the Principle of Good Corporate Governance, the
regulations of governed organizations and the Companyûs policies.
Considered and revised the related policy and practice to comply with the Securities and Exchange Act (No.4) B.E. 2551
and criteria for assessment of corporate governance of Thai listed companies for the year 2011.
Considered criteria for the 2010 Board Self-Assessment.
Reviewed the Companyûs Corporate Governance Report disclosed in the Annual Report to comply with
the regulations of the SEC.
Due to the continual monitor and development of the Companyûs Corporate Governance Practices, the Company scored
excellent, the highest level of evaluation, both in the surveys of convening the Annual General Meeting of shareholders for year
2010 by the SEC jointly with Thai Investors Association and Listed Companies Association, and in the survey of Corporate
Governance of listed companies 2010 by Thai Institute of Directors with supporting from the SET and the SEC.
The above results of assessments are reflected that the Company emphasizes and recognizes the importance of the
rights of all stakeholders equitably and continues to develop the Companyûs Corporate Governance as principles of the
Companyûs business operation to achieve the objective and target with accuracy and transparency.
(Dr. Chotivid Chayavadhanangkur)
Chairman of the Corporate Governance Committee
34
Annual Report 2010
Report of the Risk Management Committee
To
Shareholders
The Risk Management Committee of the Company realizes both external and internal risk factors that have direct impact
on the business objectives of the Company and its subsidiaries. As a result, the Risk Management Committee reviews and
assesses the risk to specify corrective and preventive measures for such risks as well as monitors risk management measures
continuously. In 2010, the Risk Management Committee conducted 4 meetings to consider the significant matters as
summarized below:
1.
2.
3.
4.
Considered annual risk management plan from the risk factors affected to the Companyûs business operation and
objective assessed by the management of all related departments and prioritized the risks to determine potential
solutions and possible implementation plan to mitigate likelihood of risks that may occur and impact of risks to the
Company as tolerance level.
Considered and revised the risk management measures to mitigate the risks any time the Company encounters new risk
factors affecting to the Companyûs business.
Monitored and reviewed the compliance with risk management plan in consultation with the management to ensure
quality and appropriateness of the Companyûs risk management. The Risk Management Committee assigns the internal
audit department to follow up and review the risk management measures of each company or department to ensure the
goal achievement.
Considered and revised risk management by assigning related management to identify new opportunities. The objective
was to create additional sources of revenues towards achieving sustainable business growth.
The Risk management Committee performs their duties as per the role, authority and responsibility assigned by the
Board of Directors. From the above performance, the Risk Management Committee was of the opinion that the Company
complies with risk management policy continuously and effectively to enhance the Companyûs Corporate Governance, and
comply with international standard and the Principle of Good Corporate Governance of the SET.
(Mr.Watchai Vilailuck)
Chairman of the Risk management Committee
Annual Report 2010
35
Report of the Nominating
and Compensation Committee
To
Shareholders
The Company realizes the importance of recruiting candidates to assume the positions of directors and top executives
as well as their appropriate remuneration packages. Consequently, the Board of Directors appointed the Nominating and
Compensation Committee to carry out these vital functions. The recruitment process involves screening and nominating
candidates who are highly knowledgeable in their fields and have appropriate qualifications for the director and executive
positions. The Compensation process involves setting policies and guidelines for remuneration package for the Board of
Directors, committeesû members, and high level executives.
In 2010, the Nominating and Compensation Committee conducted 3 meetings to carry out the duties and responsibilities
assigned by the Board of Directors and then propose to the Board of Directors for consideration. The significant matters
considered during the year were summarized below:
1.
2.
3.
Considered to select and nominate the candidates who have knowledge and experience in business related to the
Companyûs operation, and have full qualifications as the regulations of the SEC and the SET in order to assume the
position of the Companyûs directors and committeesû members for replacement or in case of retire by rotation.
Considered the remuneration package for the Board of Directors and committees by analyzing suitability and similar to
industriesû compensation. The remuneration will be adequate to maintain the qualified directors, and directors who have
duty and responsibility in committees will receive appropriate more remuneration.
Considered the criteria of annual salary increment and bonus in consultation with the Human Resource Department
and the Executive Committee. The annual salary increment and bonus were determined at an appropriate level and
comparable to the general practice in the same industry.
The Nominating and Compensation Committee performs their duties carefully and prudently with full capabilities and
independence to ensure the highest benefits to shareholders and all stakeholders in pursuance of equitable treatment,
fairness, and transparency for all concerned to comply with the Principle of Good Corporate Governance of the SET, and be
internationally recognized.
(Mr. Kunthit Arunyakananda)
Chairman of the Nominating and Compensation Committee
36
Annual Report 2010
The Board of Directors realized on the importance of the good Corporate Governance which will be 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 Principles of Good Corporate Governance of SET and Corporate Social Responsibility Guidelines, have been
provided for practices of directors, management and employees of the Company under the policy guiding principle of being
a good corporate citizen, who is accountable to employees, customers and shareholders, and being socially responsible.
Corporate Governance Practices of the Company in 2010 are as follows:
1. Rights of Shareholders
The Company emphasizes and recognizes the importance of the rights of all shareholders equitably. All rights that
the Companyûs shareholders obtained in 2010 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 and send question in advance 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. In addition, the Company allows the
shareholders to send question(s) concerning the Companyûs operation in advance for 2011 Annual General
Meeting of shareholders onward. For the Annual General Meeting of Shareholders 2011, the Company notified
and disclosed contact channels and period for proposing agenda and sending question via SET on December 17,
2010 and also provided details of the procedures for proposing agenda and sending question on the Companyûs
website (www.i-mobilephone.com) from December 20, 2010.
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 2010, the Annual General Meeting of
Shareholders 2010 which held on April 27, 2010 at Miracle Grand Convention Hotel, Vibhavadee-Rangsit Road,
Laksi, Donmuang, Bangkok where is convenience for transportation and capability to cover with number of
shareholders. The rights of shareholders to participate in the meeting are as follows:
Before the Meeting Date
In the Annual General Meeting of Shareholders for 2010, the shareholders have been informed on the date
and agenda of the meeting via the SETûs communication system 40 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 (wwww.i-mobilephone.com) 32 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 22 days before the meeting date of which better than what has been required by
law. The invitation letter contained fact, rationale, and opinion 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 was published in newspaper for 3
consecutive days by 8 days before the meeting date of which better than what has been required by law.
On the Meeting Date
Meeting procedures has been set to conform to regulations and considering on shareholdersû 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
Annual Report 2010
37
required documents more than one hour prior to commencement of the meeting. In the Annual General Meeting
of Shareholders for 2010, there were eight directors out of nine participated the meeting, the absent one went
abroad due to business trip. Chairmen of all committees including the Audit committee and the Companyûs
management and external auditors also presented in the meeting. Chairman of the Board of Directors who was
Chairman of the meeting introduced all directors and the management to the shareholders, and declared number
of shareholders with voting rights attended the meeting for the Annual General Meeting of Shareholders for 2010,
there were 35 persons. 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
Resolution of the meeting was disclosed to the 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 and
English had been sent to the SET and related parties within 14 days after the meeting date as well as posted on
the Companyûs website (www.i-mobilephone.com) for verification.
ë
Appointment / Dismissal 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 for one or
several directors. The said shareholder may not allot any number of his/her 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/her 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 General Meeting of Shareholders, the shareholders have the rights to consider and approve the
remuneration for all directors and members of sub-committees. Adequate Information of all candidates for
being considered and appointed as directors or members of committees was also delivered for shareholdersû
consideration.
38
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 the
SETûs communication system but also posted all significant and updated information on the Companyûs website
(www. i-mobilephone.com).
Annual Report 2010
ë
Profit Sharing
The Company will return profit to its shareholders in form of dividend payment. The Company has policy
to pay dividend no less than 50% of its consolidated net profit after deduction of all reserves as stated in the
Companyûs Articles of Association and related laws, subject to need for future investment and business plan.
The Companyûs subsidiary and associated companies have policy to pay dividend no less than 50% of their net
profit after deduction of all reserves as stated in the Companyûs Articles of Association and related laws, and
consideration of the Companyûs financial position.
In the Annual General Meeting of Shareholders for 2010, the Company approved to pay dividend for the
year 2009 at Baht 0.02 per share, totaling Baht 86 million or equivalent to 74% of consolidated net profit after
deduction of all reserves, which is higher than the rate of dividend payment as above policy.
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. In
addition, the Company sets as policy that all employees shall acknowledge and sign the agreement of non-disclosure
confidential information, non-violation of concealment of computer related and non-infringement of intellectual property.
New employee shall sign this agreement together with employment contact. It was also set forth in the Companyûs
Business Ethics to refuse directors, management and employees of the Company to use the Companyûs inside
information for personal benefits. Any trading of the Company securities within 1 month prior to disclosure of either the
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
the 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 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 5. 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.
Annual Report 2010
39
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 as well as
providing more channels for the stakeholders to contact directly to the Company in order to provide either comments or
recommendations which will be benefit to the Company. 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. i-mobilephone.com) which be summarized as follows:
Shareholders: The Company is aware of its role to protect and due care for the interests of all major and minor
shareholders by granting rights to every shareholders to propose an agenda and send a question in
advance, attend, vote and have comments in the shareholdersû meeting, to share in profits, regularly and
timely obtained adequate information, business performance and management policy. Details of
shareholdersû rights are descried under ç1. Rights of Shareholdersé.
Employees:
The Company highly regards all of the employees as valuable resources and is a major factor to drive
the business performance to achieve its goals. As a result, it is the Companyûs policy to treat employees
fairly in all respects, employment opportunity, reasonable remuneration, promotion, welfare i.e. life and
health insurance, annual check up, provident fund, loan for employees, buses service, fitness center and
special discount for companyûs products, etc. Development programs, both internal and external training
courses, are continually provided for all levels of employees. Moreover, scholarships have been provided
for improving skills and knowledge of employees. The Company has to ensure that working environment
will have no harm to employeesû lives and properties. Security equipments and fire drill have been
provided and governed by Risks Management team to strictly conform to the Companyûs Security Policy.
Customers:
The Company strongly believes in building confidence and brings satisfaction to all of the customers
who are very important to the Company by providing modern and high-quality products and services at
reasonable price for customersû satisfaction and needs as well as providing product and equipment from
factory which has been certified as international standard. Currently, new products and services have
been developed by the Company and subsidiaries. The Company has launched many models of mobile
phones with variety functions to serve customersû needs in all levels and continued to improve after
sales services by providing a total solution of i-mobile Service Centers in form of see-through looking to
repair, upgrade software and provide other services to customers including guarantee to change new
product immediately within 10 days if there is any problem. The Company continuously develops quality
of services, the Company develops 10 potential service centers to fix customersû problem within 1 hour
and has Authorized Service Center with same quality as i-mobile service centers for customers support.
At present, the Company has service and fixing centers nationwide. Moreover, the Company provides
responsible departments for consultation and complaint of customers, and also for control the quality
prior release for satisfaction in goods and services of customers as ISO 9001 standard.
Trade partners: The Company has the policy to equitably and fairly treat its trade partners by taking into consideration
of the Companyûs interest and on mutual benefits basis. Clearly define in evaluation and selection of
trade partners as well as developing and maintaining good relationship between all partners with trust
and confidence, and refusing to accept any personal benefit offered by partners as well as refusing to
fabricate or falsify information that will cause misunderstandings to partners
Creditors:
The Company conforms to its Principle of Business Operation in order to the respect and admission of
the Creditors and strictly complied with all the terms and conditions agreed upon in a transaction. In the
event that any particular condition could not be met, the Company will prior inform the Creditors and
seeking mutual accepted solution. In case the Company could not follow the covenanted condition, the
Company will foregone notify to creditor for solving problem.
Competitors: The Company conducts all business affairs under just rules and competitions without fraudulently or
inappropriately seeking confidential information of its competitors, or damage competitorsû reputation by
abusive accusation as well as refuse to violate intellectual property rights of businessû counterparts or
competitor. The Company sets as policy that all employees shall acknowledge and sign the agreement
of non-disclosure confidential information, non-violation of concealment of computer related and noninfringement of intellectual property. New employee shall sign this agreement together with employment
contact.
40
Annual Report 2010
Societies:
Environment:
The Company recognizes that it can survive and grow in a society that is vigorous and prosperous.
Therefore, to bring about societal progress, the Company participated in societal improvements with
financial support to all activities that aim to maintain beneficial cultures, customs and rituals.
Moreover, the Company will involve in religious activities regularly. The Company also participated in
many activities for development of social, education, vocation, athletic ability as well as sanction for
outreach people and victims. At present, many projects have been created as per details described
under section çSocial Contribution Activitiesé.
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 to the Companyûs policy,
announcement via the Companyûs PR boards, e-mail, internal radio, mobile media, newsletter and road
show are provided. For example, Lor. Ling. Activity (Save our SAMART) was set 3 consecutive years
since 2008 by campaign of reduce the resource and energy in the Company, and annual encouragement
of this activity in the first quarter as well as publicity via internal PR throughout the year. Moreover, the
Company always operates knowledgeable and training activities in subjects of environment, safety and
public health through training, seminar, e-mail, etc.
In 2010, the Company conducted additional policies relating to receiving and giving present, property or other
benefits, and non violation of the human right in the Companyûs Business Ethics as the employeeûs guideline. The
significant matters were summarized as follows:
1.
Receiving and giving present, property or other benefits policies
Receiving or giving any benefits as tradition and morality to express gratitude or maintaining business
relation as usual should be done with appropriateness. The policy covers the following practices:
Receiving and giving property or other benefits that could improperly influence decision making
Receiving or giving present and the memento
Transactions with the government sector
2.
Non violation of the human right policies
The Company emphasizes on human right as common practice, all employee shall not act or support
violation the human right. The policy covers practice relating to personal right and freedom, and equal treatment.
In addition, the Board of Directors are respect the importance of all stakeholders in participation of the Companyûs
success, thus feedback 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.i-mobilephone.com under çContact Usé.
Mailing Address:
Or sending e-mail to :
Secretary to the Audit Committee
Samart I-Mobile Public Company Limited.
99/4 Moo 4, Software Park, 32nd floor,
Chaengwattana Rd., Klong Gluar, Park-kred, Nontaburi 11120
boonrut.m@i-mobile.samartcorp.com
Secretary to the Audit Committee 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 the SETûs Communication system, Companyûs website
(www.i-mobilephone.com), Annual Report, Form 56-1, press conference, Opportunity Day, etc.
Annual Report 2010
41
The Board of Directors has to ensure that the Companyûs disclosures are transparency and strictly complied by
laws, the Companyûs and any related regulations. The Company has never been notified any offense by the SEC and the
SET on such matter. The Board has major concerned on transparency and disclosure in the following areas:
ë
Provide multi channels for disclosure of information apart from the SETûs communication system
Annual Report and Form 56-1
The Board of Directors has to ensure that Annual Report and 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 ensures the
Company not only provides all significant information of the Company in the Companyûs Annual report but
also on the Companyûs website (www.i-mobilephone.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, Form 56-1, etc.
Investors Relation
The Company has also set up an Investors Relation section to provide Companyûs information and
activities for investors, shareholders, analysts and general public via Companyûs website, Road Shows, analysts
meetings, conference calls, etc. The Companyûs Investor Relations could be contacted at phone number
0-2502-6583 or via www.i-mobilephone.com or the e-mail address at nikhil.a@samartcorp.com.
In addition to above, the announcement on the Companyûs financial performance has been arranged for
public, investors and analysts by quarterly basis with participation of the executives.
Meetings with investors and analysts in 2010 were summarized as follows:
Analyst Meeting
12 Times
Announcement of Companyûs Performance
4 Times
42
ë
Disclosure of Information of the Board of Directors and 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 has 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 and
Compensation Committee will consider the remuneration and propose for consideration of the Board of
Directors prior to further approval from the shareholders.
The above information and remuneration of each board member have been disclosed in the
Companyûs Annual Report and Form 56-1 under çManagement Structureé.
ë
Accountability to the Financial Statement
The Board of Directors is responsible for the Companyûs consolidated financial statements and any
financial information which been disclosed in the Companyûs Annual Report. Such financial statements were
prepared in accordance with the general accepted accounting standard in Thailand with appropriated financial
policy. The reports were carefully considered and prepared with sufficient information in the notes to financial
statements. The financial statements have been audited and commented independently by the authorized auditors
of the SEC to increase the confidence and reliability of financial report.
The Board of Directors also set out and maintained for the efficiency of the Companyûs internal control
system to ensure that the financial information had been correctly and accurately booked and sufficient to
maintain the Companyûs assets and be aware of weak points in order to prevent whether from any dishonesty or
Annual Report 2010
significant error. The Board of Directors had appointed the Audit Committee of which comprised independent
directors to be responsible for the quality of the financial statements and the internal control system and
disclosed such opinion in the Annual Report under the Report of the Audit Committee. The opinion of the Audit
Committee has already been disclosed in the annual report. Moreover, Report of the Board of Directorsû
responsibility on the Companyûs Financial Statements was also attached in the Companyûs Annual Report.
5. Role and Responsibilities of the Board
5.1)
Directorsû Qualifications
The Board consists of directors who have various knowledge, experience, and specific skill that suitable
and benefit to the Company. The Board will also have leadership and vision to carry on the Companyûs business
and achieve its objectives. The Company has 9 directors who complied with the qualification that been described
under çManagement Structureé. All of the Directors have contributed their best to the Company which may
concern from their participation in the meeting.
5.2)
The Independent of the Board of Directors
ë
Separation of Chairman and CEO
For best benefit of the shareholders and to strike a balance of power within the Company, the
Chairman of the Board of Directors is not the same person as CEO. The Companyûs Chairman of the
Board of Directors is an independent director who has the qualifications of independent director in
accordance with the SETûs notification and has no business relation with any management of the
Company.
ë
Balance of Power
The Board of Directors of the Company comprised of 9 members with various qualifications, skills,
experience and expertise. Composition of the members is as follows:
3 Independent Directors (one-third of the Board of Directors)
3 Executive Directors (two directors are representatives from major shareholders)
3 Non-Executive Directors (representatives from major shareholders)
The shareholders could have confidence that the directors as representatives of the shareholders
could perform their duty without any influence or control by management of the Company by the above
structure.
ë
Roles and Responsibilities of the Board of Directors and CEO
The Company has clearly set the separate roles and responsibilities of the Board of Directors and
CEO. The Board of Directors will focus and ensure that the Companyûs business will achieve its target and
in the direction that create value and best benefit to the shareholders as well as all stakeholders. Any
conflict of interest with the Company and its subsidiaries will be prohibited. The Board will also comply
with the Companyûs Ethics with responsibility, due care, and integrity to ensure all Companyûs businesses
are run under Companyûs objectives, Articles of Association, resolutions of the Board of Directorsû and
shareholdersû meetings as well as laws and regulations of the SET, the SEC and other related laws. At the
same time, CEO who is the managementûs leader will focus on general management of the Company. The
details of Roles and Responsibilities of the Board of Directors and CEO are described under çManagement
Structureé.
5.3)
Being Director in other Listed Companies
ë
Policy for directors to serve as directors in other listed companies
For efficiency of being the director, the Board of Directors of the Company has set the policy for
all directors to be the director in any listed companies not exceeding 3 companies. However, there is not
any of the existing 9 directors of the Company is being the director in listed companies over than 3
companies and also could participate and contribute to the Company with efficiency.
Annual Report 2010
43
ë
5.4)
5.5)
Policy for top executives to serve as directors in other companies
The management of the Company will also be obtained approval from the Executive Committee
prior to be a director in any companies of which are not have either similar business or being the
Companyûs competitors.
Transparency of Nomination
The Board of Directors ensures the Company to provide transparency process of nomination of directors
and management of the Company of which the details are disclosed under çManagement Structureé.
Board of Directorsû Activities in the previous year
ë
Set Policy and Business Direction
The Board of Directors involved and agreed on set out the Companyûs vision, mission, Corporate
Governance Policy, Business Ethics, strategies, goal, direction, business plan, budget, internal control and
internal audit systems, and risk management 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, 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 as well as laws and regulations of the
SET and the SEC.
The Companyûs Vision, Corporate Governance Policy and Business Ethics have been posted on
the Companyûs website (www.i-mobilephone.com) under the governance of the Corporate Governance
Committee to have all employees to strictly conform and practice.
ë
ë
44
Appointment of Committees
For governing the management to comply with the approved policies and having better efficiency,
the Board of Directors appointed the following 5 committees to help the Board for consideration in
significant matters.
Audit Committee
Executive Committee
Corporate Governance Committee
Nominating and 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.i-mobilephone.com).
Meeting of the Board of Directors and Committees
1)
Board of Directorsû Meeting
The Board of Directorsû Meeting schedule has 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 2010, total 7 meetings, were as follows:
Annual Report 2010
Directors
1.
2.
3.
4.
5.
6.
7.
8.
9.
Term of Directorship Number of Attendance/
(Year/month)
Total Number of Meeting
5/8
7/7
7/3
7/7
7/3
7/7
7/3
7/7
7/3
7/7
7/3
7/7
7/3
7/7
2/5
3/7*
1/11
2/7*
Remarks: *They went abroad due to business trip.
In 2010, the Board of Directors considered the following agendas:
- Companyûs financial statement for 2009 and quarterly financial statements of 2010
- Evaluated the adequacy of internal control system
- Dividend payment for the year 2009
- Considered sub-committeesû performances for the year 2009
- Appointment of members in each committee
- Considered the connected transactions
- Strategic Implementation Plan for 2011
- Results of Board Self-Assessment for 2009, and set the basis of Board self-assessment and CEO
assessment in 2010
- Subjects relating to the Annual General Meeting of Shareholders for 2011 prior to present to the
shareholdersû meeting
- Salary increment rate for 2011 and annual bonus for 2010
- The Directorsû and Officersû Liability Insurance
- Utilization and amendment of credit facilities with financial institutes
- Other agendas relating to the Companyûs operation
The minutes for all meetings had been taken, kept and been ready for verification by the directors
or any related parties.
During the year, Non-Executive Directors convened non-executive meeting to discuss any
managerial issue.
2)
Sub-Committees
In 2010, numbers of each meeting and time attendance of each member were summarized
below:
Annual Report 2010
45
Names
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Number of Attendance/ Total Number of Meeting
Audit
Executive Corporate Nominating
Risk
Committee Committee Governance
and
Management
Committee Compensation Committee
Committee
5/5
5/5
2/2
3/3
5/5
2/2
3/3
10/13
4/4
11/13
4/4
12/13
2/2
4/4
1/3*
3/3
4/4
2/2
4/4
4/4
Remarks: * He went abroad due to business trip.
All sub-committees carried out their duties assigned by the Board of Directors, regularly report the
performance to the Board of Directors, and provide annual performances report to shareholders in the
Annual Report.
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. Any trading of the Companyûs securities within 1 month prior to
disclosure of either the Companyûs financial performance or any other information that may affect securitiesû
price is prohibited.
5.
Refuse to reveal Companyûs classified information e.g. electronic information, 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 the 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 in the year 2010 were disclosed under the
çConnected Transactionsé.
46
Annual Report 2010
5.7)
Internal Control and Internal Audit
The Board of Directorsû Meeting No. 1/2011 held on February 24, 2011 in which all three independent Audit
Committee members attended, evaluated the Companyûs internal control from documents and report on internal
control evaluation prepared by management and the Audit Committee. The Board of Directors came to the
conclusion that the Company has adequate and appropriate internal control systems on the following areas:
1)
Organizational Control and Environment Measure
The Company has sufficient organizational and environment control systems. It has clearly
established the organizational structure, roles and responsibilities of each unit, and approval authority
appropriate to the level of each executive. Clear and measurable business plans are set in advance each
year and are regularly adjusted in response to the competitive situation. The Board of Directors has
prepared Corporate Governance Policy, which covered the Principles of Good Corporate Governance of
the Stock Exchange of Thailand, and business ethics for employees to use as guidelines.
2)
Risk Management Measuse
The Company appointed the Risk Management Committee to manage the risks that may occur and
impact to the Companyûs operation and objective, determine annual implementation plan to mitigate the
risks, monitor risk management measures as well as revise the risk management measures to mitigate the
risks any time the Company encounters new risk factors which has an effect on the Companyûs business.
3)
Management Control Activities
The Company has an adequate management monitoring system. The Board of Directors appointed
the committees to help it govern the Companyûs business operations to comply with the scope of
responsibilities and authority. The delegation of authority has clearly been specified, and there are
adequate internal control systems governing transactions with major shareholders, directors, executives, or
other related parties. The connected transactions have been review by the Audit Committee before
proposing to get the approval from the Board of Directors. In addition, the Company has held regularly
meetings to evaluate the performance of the Company and its subsidiaries in order to regularly monitor the
efficiency of operations.
4)
Information and Communication Measuse
World class standard of information and data center management was implemented within
company such as ISO 27001 (Information Security Management System) for manage the security of
information and computer system. CMMI (Capability Maturity Model Integration) for efficiency and quality
in software development was level 3 certified. ITIL (Information Technology Infrastructure Library) for
efficiency improvement of service management in information technology. ERP (Enterprise Resource
Planning) was implemented as organization-wide application system to be center of business support
software and databases with increasing performance of operations by use single application system.
Business Intelligence (BI) also developed for executives to track and analyze business financial information
which fully help in decision making. Disaster Recovery Planning was developed to support continuity of
business when disaster occurs.
5)
Monitoring System
The Company holds regularly board meeting to monitor and improve its business operation to
achieve the business plan. Internal audit reports have been prepared periodically to report to the Audit
Committee according to the audit plan.
Annual Report 2010
47
5.8)
Risk Management
The Company set up comprehensive Risk Management Policy to mitigate any potential impact caused
by economic and political changes. The policy also includes the criteria for risk prevention and detection as the
follow measures:
1.
Policy Setting; to set up policy, objectives, scope, responsibilities and regulations that synchronized with
the Companyûs strategies, goals and business direction which be reviewed annually.
2.
Risk Identification; to identify risks that may delay the Company from objectives and goals achievement
by consider both internal and external factors, for example, fluctuation of business, competitions, legal
issues, technologies, financial, information systems and human resources management.
3.
Risk Evaluation; to evaluate likelihood of risks that may occur and impact of risks to the Company and the
prioritize the risks to determine possible implementation plan.
4.
Risk Response; to determine possible implementation plan to mitigate likelihood of all addressed and
prioritized risks that may occur and impact of the risks to the Company as tolerance level.
5.
Monitoring and Reporting; to monitor risk management measures to ensure quality and appropriateness of
the Companyûs risk management and regular reporting system. The Board of Directors assigned Risk
Management Committee to monitor and report the performance of risk management to ensure the goal
achievement.
Risk Management countermeasures shall be implemented and regularly followed up by the Risk
Management Committee in a quarterly meeting as outlined in the risk management plan. All countermeasures
shall be followed and reviewed by internal audit department to assure that the final outcome is agreeable with the
Companyûs proposed objectives. Besides, the Company held risk management seminar and training for each
business as well as adapting it as the key performance factor for performance evaluation of both operational and
management staff in order to build up self-consciousness. The training also focused on concepts and principles
of practicing on risk management through out the organization which would contribute in ensuring the sustainable
growth of the Company as well as create value for stakeholders and shareholders.
5.9)
Board Self-Assessment
The Board of Directors conducts its self-assessment annually for assessment their performance and
review the comments relating to the performances of the Company and directors to develop the Companyûs
Corporate Governance. The result will be considered by the Board of directorsû meeting. In 2010, the Board of
Directors considered the criteria of self-assessment in its meeting No. 7/2010 on December 17, 2010, and had the
resolution to define the criteria as the following 4 areas:
1.
Board Composition
2.
Strategic Guidance
3.
Monitoring and Evaluation
4.
Accountability
The results of board self-assessment for 2010 in overall areas of assessment were excellent with the
average score of 92.06% which is approximate to the results for 2009. This was shown that the Companyûs Board
of Directors complies with the Principles of Good Corporate Governance and continues to increase its efficiency.
5.10) CEO Assessment
The Board of Directors conducts CEO assessment for the year 2010 for consideration of his remuneration
in the following areas:
1.
Leadership
2.
Board relations
48
Annual Report 2010
3.
4.
5.
Risk management and internal control
Human resources management
Corporate governance
The results of CEO assessment for 2010 in overall areas of assessment were excellent with the average
score of 94.12%. This was shown that CEO of the Company performs his duties efficiently that contribute to the
overall better performance of company.
5.11) Development of Directors and Management
The Company will provide orientation program to new directors. Information on the Companyûs business
and directions as well as Corporate Governance Policy of the Company will be advised. In addition, to support
and increase knowledge and capability of the directors, periodical training will be provided especially the Director
Accreditation Program (DAP), Director Certification Program (DCP) and other programs arranged by the Thai
Institute of Directors (IOD). Three directors were trained in DCP and four directors were trained in DAP. Two
foreign directors have not been trained such program from IOD. Training profile of each director was shown under
çThe Board of Directors and Managementé.
5.12) Company Secretary
The Board of Directors considered and appointed the Company Secretary from person who has
qualification and experience with the following roles and responsibilities:
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 included providing consultation in related to the Companyûs
Articles of Association, and any other regulations from related authorities.
3.
Arrange meetings for Board of Directors, Committees and Shareholders as well as coordinate to ensure all
resolutions have been implemented complying with Companyûs Objectives, Articles of Association and the
resolutions of the Board of Directorsû and the shareholdersû meetings as well as laws and related
regulations.
4.
Prepare and keep the companyûs documents such as register of directors, notice calling directorsû and
shareholdersû meetings as well as the minutes of such meetings and the annual report, etc.
5.
Keep a report on interest filed by a director and executive as well as submit a copy of the report to the
Chairmen of the Board of Directors and the Audit Committee within 7 business days from the date on
which the company has received such report.
The Nominating and Compensation Committee shall select a new company secretary to propose for
consideration and approval of the Board of Directors to appoint the new company secretary within 90 days from
the date on which the company secretary has vacated her position or has been incapable of performing her duty;
in this regards the Board of Director shall be empowered to assign any director to perform the duty as the
substitutes during such period.
Annual Report 2010
49
Connected Transactions
The connected transactions disclosed in this section are transactions of the Company or its subsidiaries with those who
may have a conflict of interests for the year ended December 31, 2010 as Section 89/12 of the Securities and Exchange Act and
related notifications:
50
Companies
Samart Corporation Plc.
Relationship
Samart Corporation Plc. holds a 58.28%
stake in the Company.
One to One Contacts Co., Ltd.
Samart Corporation Plc. holds a 95.99% stake.
Samart Engineering Co., Ltd.
Samart Telcoms Plc.
Suvarnabhumi Environment Care Co., Ltd.
Cambodia Air Traffic Service Co., Ltd.
Samart Corporation Plc. holds a 100% stake.
Vision and Security System Co., Ltd.
Samart Reditech Co., Ltd.
Samart Communication Services Co., Ltd.
Samart Telcoms Plc. holds a 99.99% stake.
Posnet Co., Ltd.
Samart Comtech Co., Ltd.
Samart Infonet Co., Ltd.
Vilailuck International Holding Co., Ltd.
holds a 21.92% stake in Samart Corporation Plc.
Vilailuck Development Co., Ltd.
holds a 42% stake.
Vilailuck Property Co., Ltd.
Thai Trade Net
holds a 12.50% stake.
Samart Ed Tech Co., Ltd.
Annual Report 2010
Counterparts
Mr. Charoenrath Vilailuck,
Mr. Charoenrath Valailuck
Mr. Thananan Valailuck
Mr. Thananan Valailuck
Nature of Connected Transactions
Rental and Utility Fees
Nature of Major Transactions
1. Samart I-Mobile Plc. entered rental agreements for warehouse space in Smart One Building and
office space in Software Park Building and utility service agreements with Samart Corporation Plc.
ë Jan 1, 2009 to Dec 31, 2011 for the area of 942 square meters.
The monthly rate of Baht 70 per square meter.
The utility service at a monthly rate of Baht 105 per square meter.
ë Mar 1, 2009 to Apr 30, 2011 for the area of 3,468.70 square meters.
The monthly rate of Baht 110.25 per square meter.
The utility service at a monthly rate of Baht 382.02 per square meter.
2. Samart I-Mobile Plc. entered rental agreements for office space in Software Park Building and a utility
service agreement with Vilailuck International Holding Co., Ltd.
ë Jun 1, 2009 to May 31, 2012 for the area of 19.45 square meters.
ë Oct 16, 2010 to Jul 31, 2012 for the area of 280 square meters.
3. Samart Multimedia Co., Ltd. entered a rental agreement for office space in Software Park Building and
a utility service agreement with Samart Corporation Plc.
ë May 1, 2008 to Apr 30, 2011 for the area of 1,206.86 square meters.
4. Samart Multimedia Co., Ltd. entered a rental agreement for office space in Software Park Building and
a utility service agreement with Vilailuck International Holding Co., Ltd.
ë June 1, 2010 to Jul 31, 2012 for the area of 758.43 square meters.
5. Samart Interactive Media Co., Ltd. entered a rental agreement for office space in Software Park Building
and a utility service agreement with Vilailuck International Holding Co., Ltd.
ë June 1, 2010 to Jul 31, 2012 for the area of 25 square meters.
6. Brain Source Co., Ltd. entered a rental agreement for office space in Software Park Building and a utility
service agreement with Samart Corporation Plc.
ë Sep 1, 2008 to May 31, 2015 for the area of 200 square meters.
The utility service agreement at a monthly rate of Baht 382.02 per square meter.
Value
(Million Baht)
0.79
1.19
4.59
15.90
0.05
0.07
0.14
0.21
1.60
5.53
1.05
1.57
0.03
0.05
0.26
0.92
Annual Report 2010
51
7. Samart Interactive Media Co., Ltd. entered a rental agreement for office space in Smart One Building
and a utility service agreement with Samart Corporation Plc.
ë Jan 1, 2009 to Sep 30, 2010 for the area of 48 square meters.
The monthly rate of Baht 152 per square meter.
The utility service at a monthly rate of Baht 228 per square meter.
8. I-Mobile Plus Co., Ltd. entered a rental agreement for office space in Software Park Building and a utility
service agreement with Vilailuck International Holding Co., Ltd.
ë June 1, 2010 to Jul 31, 2012 for the area of 583.43 square meters.
Value
(Million Baht)
0.07
0.10
0.80
1.21
The office space rental, utility service fees and others related fees were reasonable to increase the Groupûs efficiency of operations.
The Audit Committee reviewed the transaction and was of the opinion that the fees were at the market rate compared with other buildings
in the vicinity and were at the same rates as other tenantsû. The transactions are based on the principle of transaction in the ordinary cause
of business or normal commercial term between the Company or subsidiaries and director or executive or related person as approved from
the Board of Directors.
Management Fee
Company Receiving the Service
Company Providing the Service
Value
(Million Baht)
12.00
The management services detailed above were aimed at increasing the Groupûs efficiency of operations. The Services Providers
would send experts in various fields, including financial management, marketing, accounting, distribution channels and business strategies,
to give advice. The fees were based on actual costs plus appropriate profit. The Audit Committee reviewed the transaction and was of the
opinion that the connected transaction was fair and beneficial to the Company.
52
Annual Report 2010
Transactions of Goods and Services Sold as Usual
Company Selling Goods/Services
1. Samart I-Mobile Plc.
2. Samart Corporation Plc.
3. One to One Contacts Co., Ltd.
5. Samart Mobile Services Co., Ltd.
Company Buying Goods/Services
Samart Telcom Plc.
PostNet Co., Ltd.
Vision and Security System Co., Ltd
Thai Trade Net
Samart Multimedia Co., Ltd.
Samart Telcoms Plc.
Posnet Co., Ltd.
Thai Trade Net co., Ltd.
Value
(Million Baht)
2.59
0.79
0.71
0.28
0.01
0.17
0.10
0.01
0.05
0.03
0.03
0.20
0.06
0.01
0.02
0.02
36.41
13.26
46.44
1.04
0.61
0.06
0.93
0.09
0.09
0.02
0.01
0.12
The goods and services sold above were in accordance with the terms and conditions of goods and services sold as in
usual business. The transactions are based on the principle of transaction in the ordinary cause of business or normal
commercial term between the Company or subsidiaries and director or executive or related person as approved from the Board
of Directors.
Annual Report 2010
53
Purchase and Sale of Fixed Assets
Company Buying Fixed Assets
2. Samart I-Mobile Plc.
Note:
Company Selling Fixed Assets
Value
(Million Baht)
0.13
2.30
11.50*
1.20
* The Company purchased a condominium for being welfare of management and employees of the Company and its subsidiaries and for
used by key customer. The Audit Committee reviewed the transaction and was of the opinion that the transaction was reasonable.
Fixed assets are purchased and sold at their net book value plus a margin, depending on the condition of the fixed assets.
The transactions are based on the principle of transaction in the ordinary cause of business or normal commercial term between
the Company or subsidiaries and director or executive or related person as approved from the Board of Directors.
Miscellaneous Transactions as Usual
1. Samart I-Mobile Plc. group paid other expenses to Samart Corporation Plc. and related companies
2. Samart I-Mobile Plc. group received other income from related companies
Value
(Million Baht)
22
1
Miscellaneous transactions are charged at a mutually agreed price. The transactions are based on the principle of transaction in
the ordinary cause of business or normal commercial term between the Company or subsidiaries and director or executive or
related person as approved from the Board of Directors.
Necessity and Rationale for Transactions
The Companyûs Audit Committee is of the opinion that the inter-company transactions above were reasonable and
necessary for the Companyûs operations. Before entering such transactions, the Board of Directors evaluates them on the basis
of providing maximum value to the Company. The terms and conditions of connected transactions were set according to
standard business terms and conditions, and at market rates. Loans from related companies were secured to strengthen liquidity
for the Companyûs operations only as deemed necessary.
Measures and Steps of Approval for Connected Transactions
The Company requests the opinion of the Audit Committee about the necessity and appropriateness of the conflict of
interest transaction before the transaction occurred. If the Audit Committee members are not experienced in considering the
transaction that may arise, the Company asks an independent expert or its auditor to give an opinion on that matter to support
the decision making of the Board of Directors or the shareholders. The directors with possible conflicts of interest do not have
the right to vote on that transaction.
Policies and Trend in Future Connected Transactions
In the future, the Company may engage in connected transactions as it deems appropriate based on normal business
terms and conditions. It will comply with the laws on securities and the stock market, as well as the relevant regulations,
announcements, orders or requirements of the Stock Exchange of Thailand. It will also strictly follow the requirements
and practices regarding disclosure of connected transactions, and the acquisition or sale of important assets of the listed
company, according to the accounting standards set by the Association of Accountants. The Company will disclose connected
transactions in the Notes to Financial Statements audited by the Companyûs external auditor.
54
Annual Report 2010
Financial Analysis
and Results of Operations
Operation Overview
In 2010, the total revenues were Baht 8,125 million, a decrease of Baht 914 million or 10.11% compared to 2009. The
decrease was mainly contributed from mobile business and international business that impacted from the lower average selling
price per unit and the decrease of selling support income from more emphasizes on house brand handset, i-mobile, which has
higher margin than other brands. However, unit sold of house brand handset increased. Revenue from multimedia business was
continuously increased.
Operating profit increased Baht 35 million or 32.38% from more emphasizes on house brand handset, i-mobile and the
increased revenue of multimedia business. The operating profit margin increased from 1.22% to 1.77% in 2010.
Net profit was Baht 135 million, an increase of Baht 19 million or 16.64% compared to 2009. Net profit margin also
increased from 1.28% in 2008 to 1.66% in 2010.
Results of Operation of Company and Subsidiaries
Sales and service income including gross profit
Mobile Business
Sales and service income
Cost of sales and service
Gross profit
Selling and Administrative expenses
and other expenses
Other income
Finance cost
Corporate income tax
Minority interests of the subsidiaries
Net income
2010
5,965
67
(4,750)
1,282
2009
6,831
81
(5,897)
1,015
Multimedia Business International Business
2010
899
(513)
386
2009
800
(449)
351
2010
1,123
(1,085)
38
2009
1,138
(1,074)
64
Total
2010
7,987
67
(6,348)
1,706
2009
8,769
81
(7,420)
1,430
(1,528)
71
(106)
(7)
(1)
135
(1,369)
189
(142)
(3)
11
116
Mobile Business
The revenue from Mobile Business including selling support income was Baht 6,032 million, a decrease of Baht 880
million or 12.73% compared to 2009. This was mainly due to the lower average selling price per unit compared to 2009 and the
decrease of selling support income from more emphasizes on house brand handset, i-mobile. However, the Company was
successful in expansion of house brand handset sale in domestic market. The unit sold of i-mobile handset increased 15.51%,
compared to 2009.
Gross profit from Mobile Business was Baht 1,282 million, an increase of Baht 267 million or 26.31% compared to 2009.
Gross profit margin increased from 14.68% in 2009 to 21.25% in 2010 due to the Company emphasizes on house brand phone
sold which has higher margin than other brands. The Company has developed various models of handsets with differentiable
features at an attractive price to customers as well as continually improved quality of after sale services. Thus, the Company was
successful in retaining 2nd position in Thailandûs handset market.
Multimedia Business
The revenue from Multimedia Business was Baht 899 million, an increase of Baht 99 million or 12.38% over 2009. This
was mainly due to the increase of transaction usages of customers in all services, especially in non-voice services by bundling
of non-voice services into i-mobile handset thru çi-linké application which enable more convenience for content users to reach
the contents. Gross profit from Multimedia Business was Baht 386 million, an increase of Baht 35 million or 9.97% over 2009.
Gross profit margin decreased from 43.88% in 2009 to 42.94% in 2010.
Annual Report 2010
55
The revenue from International Business was Baht 1,123 million, a decrease of Baht 15 million or 1.32% compared to
2009. This was mainly due to the lower average selling price per unit compared to 2009. Gross profit was Baht 38 million in 2010,
a decrease of Baht 26 million or 40.63% compared to 2009. Gross profit margin decreased from 5.62% in 2009 to 3.38% in 2010
due to stock clearance.
Other Income
Other income was Baht 71 million, representing 0.87% of total revenues, a decrease of 118 million or 62.43% compared
to 2009. This was mainly due to the decrease in gain on disposal of investment in subsidiary company, gain on change in value
of short-term investment in trading securities and gain on foreign exchange.
Selling and Administration Expenses including Other Expenses
Selling and administration expenses including other expenses were Baht 1,528 million, an increase of Baht 159 million or
11.61% over 2009. This was mainly due to the increase in sales promotion and customer service expenses of Mobile Business.
Finance Cost
Finance cost was Baht 106 million, a decrease of Baht 36 million or 25.35% compared to 2009 due to the cost
management measure.
Corporate Income Tax
Corporate income tax was Baht 7 million, an increased of Baht 4 million or 133.33% compared to 2009.
Financial Position
Assets
As of December 31, 2010, total assets were Baht 5,434 million, a decrease of Baht 705 million or 11.48% compared to
end of 2009. This was mainly due to the decrease in short-term investments and sales promotion receivables of Mobile
Business, and trade accounts receivable of International Business.
Total assets consist of current and non-current assets of Baht 4,603 and 831 million, respectively, representing 84.71%
and 15.29% of total assets, respectively. The major current assets were trade accounts receivable and inventories, representing
54.54% and 16.08% of total assets, respectively. The major non-current assets were equipments representing 11.89% of total
assets.
Accounts Receivable
As of December 31, 2010, trade accounts receivable was Baht 2,964 million, a decrease of Baht 115 million or 3.75%
compared to end of 2009. The average collection period increased from 114 days in 2009 to 137 days in 2010. The increase of
trade accounts receivable and average collection period was mainly due to the Company increased term of repayment for
certain customers.
Allowance for doubtful accounts was provided for the estimated collection losses that may be incurred in collection of
receivables. The allowance was based on collection experience, analysis of debtor aging and current status of receivable
outstanding at balance sheets date.
Inventories
As of December 31, 2010, net inventories were Baht 874 million, an increase of Baht 97 million or 12.45% compared to
end of 2009, from Mobile Business. The average sales period of inventories decreased from 59 days in 2009 to 47 days in 2010.
The Company provided an allowance for obsolescence based on the Companyûs policy and there was no significant
change during the year compared with the previous year.
56
Annual Report 2010
Other Current Assets
As of December 31, 2010, other current assets were Baht 401 million, a decrease of Baht 470 million or 54.01% from end
of 2009. The decrease was attributed to sales promotion receivables, input tax refundable, withholding tax deducted at sources
and advance payment for purchase of inventories.
Non-Current Assets
As of December 31, 2010, non-current assets were Baht 831 million, an increase of Baht 209 million or 33.62% from end
of 2009. The increase was attributed to the purchase of equipments from Mobile Business and Multimedia Business to support
business expansions and new businesses.
Liquidity
As of December 31, 2010, cash and cash equivalents were Baht 147 million, a decrease of Baht 33 million or 18.47% from
end of 2009. The details of sources and uses of fund are as follows:
Net cash from operating activities of Baht 603 million was attributed to profit from operating result and the
decrease in sales promotion receivables and cash from sale of short-term investments.
Net cash used in investing activities of Baht 65 million was attributed to investment in purchase of equipments to
support business expansions and new businesses.
Net cash used in financing activities of Baht 574 million was attributed to repayment of loans from banks and
dividend payment of Baht 86 million.
The liquidity ratio increased from 1.46 times in 2009 to 1.53 times in 2010. The quick ratio increased from 1.05 times in
2009 to 1.14 times in 2010.
Sources of Funds
As of December 31, 2010, shareholdersû equity was Baht 2,418 million, an increase of Baht 54 million or 2.29% from end
of 2009, due to net profit for 2010 of Baht 135 million and the dividend payment in 2010 of Baht 86 million.
Total liabilities as of December 31, 2010 were Baht 3,016 million, a decrease of Baht 759 million or 20.11% from end of
2009. Total liabilities consist of current liabilities of Baht 3,005 million, and non-current liabilities of Baht 11 million, representing
55.29% and 0.21% of total assets, respectively. The details of significant liabilities are as follows:
ë
Bank overdrafts and loans from financial institutions were Baht 2,351 million, representing 77.95% of total
liabilities or 43.27% of total assets, a decrease of Baht 476 million or 16.83% from end of 2009 due to repayment
of loans from banks.
ë
Trade accounts payable was Baht 370 million, representing 12.27% of total liabilities or 6.80% of total assets, a
decrease of Baht 310 million or 45.61% from end of 2009 due to repayment of goods.
As the above liabilities and shareholdersû equity, the Companyûs debt to equity ratio decreased from 1.60 times in 2009
to 1.25 times in 2010.
Annual Report 2010
57
Report of the Board of Directorsû
Responsibilities for the Financial Reports
To Shareholders
The Companyûs Board of Directors is responsible for the financial statements of Samart I-Mobile Public Company
Limited and the consolidated financial statements of the Company and its subsidiaries as well as the information that appears
in the annual report. The said financial statements were made in accordance with generally accepted accounting standards.
Appropriate accounting policies were used and practiced regularly. Careful consideration and best estimates were made with
sufficient disclosure of information in the notes to the financial statements. This was to ensure transparency and benefits to the
shareholders and investors.
The Board of Directors has provided for and maintained appropriate and effective internal control system to obtain
reasonable assurance that the accounting information is accurate, complete and sufficient to maintain the Companyûs assets
and to prevent fraud or significant unusual transactions.
In this regard, the Board of Directors appointed the Audit Committee to examine the accounting policies and the quality
of the financial reports as well as the internal control and internal audit systems. The opinions of the Audit Committee on these
matters appear in the Report of the Audit Committee in this annual report.
The financial statements of Samart I-Mobile Public Company Limited and its consolidated financial statements were
audited by Ernst & Young Office Limited, the Companyûs auditor. During the audit, the Board of Directors supported the auditor
with various information and documents so that the auditor could audit and express its opinions according to the accounting
standards. The opinions of the auditor appear in the Report of Independent Auditor in this annual report.
The Board of Directors was of opinions that the overall internal control system of the Company is at a satisfactory level
and can create reasonable confidence that the financial statements of Samart I-Mobile Public Company Limited and its
subsidiaries and of Samart I-Mobile Public Company Limited as of December 31, 2010 is creditable presentation in accordance
with generally accepted accounting principles and compliance with related laws and regulations.
Chairman
58
Annual Report 2010
Executive Chairman
Report of the Audit Committee
To Shareholders
The Audit Committee of Samart I-Mobile Public Company Limited comprises of three independent committee members
who have full qualifications complying with the SECûs notification named Dr. Chotivit Chayawattanangkul, Chairman of the Audit
Committee, Professor Suphachai Phisitvanich and Mr. Kanthit Aranyakanont, committee members.
In 2010, the Audit Committee held 5 meetings jointly with the executives, auditors and internal auditors, and a meeting
without the executives. The Audit Committee carried out the duties and responsibilities assigned by the Board of Directors which
complies with the requirements of the Stock Exchange of Thailand and reported the results of the meetings to the Board of
Directors for consideration. The significant matters considered during the year were summarized below:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Reviewed the quarterly and yearly financial statements in consultation with management and external auditors. The Audit
Committee was of the opinion that the financial reporting present fairly and adequate disclosure in conformity with
generally accepted accounting principles as the opinion of the external auditors.
Reviewed and monitored the risk management of the Company and its subsidiaries operated by the Risk Management
Committee. The Audit Committee was of the opinion that the Company has an effective and efficient risk management
measures by identifying, evaluating, managing and monitoring the risk management measures in a quarterly meeting as
well as review them any time the Company encounters new risk factors effected to the Companyûs business.
Considered and approved the annual audit plan as well as reviewed the evaluation of the Companyûs internal control
system from reports of the internal audit department which performed to comply with the annual audit plan, and also
provided comments to the internal audit department to perform the duties with efficiency and effectiveness. The Audit
Committee was of the opinion that the Company has good internal control system, appropriate maintains the property,
correctly and reliable discloses the information, and has sufficient and effective monitoring and control systems of the
Companyûs and its subsidiariesû operations.
Reviewed the compliance with the Securities and Exchange Act, regulations of the SET and laws related to the
Companyûs businesses. The Audit Committee was of the opinion that no significant issue is against the laws, regulation
and the Companyûs commitment.
Considered and expressed the opinion that the connected transactions or transactions with possible conflict of interests
as specified by the laws and the regulations of the SET were reasonable and beneficial to the Company.
Reviewed the Audit Committee charter to comply with the regulations of the SET and the SEC as well as the Securities
and Exchange Act.
Prepared the Audit Committee activities report that will be disclosed in the annual report to comply with the best
practices of the Audit Committee and regulations of the SET.
Proposed the appointment of auditor from Ernst & Young Office Limited to be the Companyûs auditor considered from
the performance, beneficial comment to the Company, independence of audit and opinion to the Companyûs financial
statement as well as proposed an appropriate audit fee.
Conducted the Audit Committee Self-Assessment, the results in overall areas of assessment were excellent. This
was shown that the Audit Committee performed their duties completely as assigned by the Board of Directors and
complied with the best practices.
From the above duties, the Audit Committee was of the opinion that the Companyûs financial reports were made in
accordance with generally accepted accounting standards with sufficient disclosure. The Company has complied with the
Securities and Exchange Act, regulations of the SET and the SEC as well as other laws related to the Companyûs business. The
Company has good corporate governance system with adequate internal control and risk management systems.
Annual Report 2010
59
Report of Independent Auditor
To the Shareholders of Samart I-Mobile Public Company Limited
I have audited the accompanying consolidated balance sheet of Samart I-Mobile Public Company Limited and its
subsidiaries as at 31 December 2010, and the related consolidated statements of income, changes in shareholdersû equity and
cash flows for the year then ended, and the separate financial statements of Samart I-Mobile Public Company Limited for the
same period. 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 audit. The consolidated financial statements of Samart I-Mobile Public Company Limited and its subsidiaries and
the separate financial statements of Samart I-Mobile Public Company Limited for the year ended 31 December 2009 were
audited in accordance with generally accepted auditing standards by another auditor of our office, who under her report dated
24 February 2010 expressed an unqualified opinion on those financial statements but drew attention to the related party
transactions.
I conducted my audit 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 audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of
Samart I-Mobile Public Company Limited and its subsidiaries and of Samart I-Mobile Public Company Limited as at 31
December 2010, the results of their operations, and cash flows for the year then ended in accordance with generally accepted
accounting principles.
Without qualifying my opinion on the above financial statements, I draw attention to Note 8 to the financial statements
which indicates that Samart I-Mobile Public Company Limited and its subsidiaries had significant business transactions with
related parties, principally in respect of the purchase and sales of goods, and the provision of services and loans. Such
transactions have been concluded on terms and bases agreed upon between Samart I-Mobile Public Company Limited and
those related parties.
Siriwan Suratepin
Certified Public Accountant (Thailand) No. 4604
Ernst & Young Office Limited
Bangkok: 23 February 2011
60
Annual Report 2010
Financial Statements
Samart I-Mobile Public Company Limited and its subsidiaries
Balance sheets
As at 31 December 2010 and 2009
(Unit: Baht)
Consolidated financial statements Separate financial statements
Note
2010
2009
2010
2009
Assets
Current assets
Cash and cash equivalents
6
Short-term investments
7
Trade accounts receivable
Related parties
8
Unrelated parties - net
Trade accounts receivable - net
9
Amounts due from and advance to related parties 8
Short-term loans to
Related parties
8
Unrelated party
10
Total short-term loans
Inventories - net
11
Other current assets - net
12
Total current assets
Non-current assets
Restricted bank deposits
6, 13
Investments in subsidiaries
14
Property, plant and equipment - net
15
Prepaid IT service fee to parent company - net
16
Intangible asset - net
17
Other non-current assets
Total non-current assets
Total assets
147,287,607
202,880,412
180,652,757
594,085,812
38,393,246
115,613,600
81,154,703
594,085,812
2,439,716
2,961,381,979
2,963,821,695
5,358,208
1,800,537
3,077,371,496
3,079,172,033
5,827,419
53,362,789
2,552,095,797
2,605,458,586
421,177,579
33,552,669
2,311,581,461
2,345,134,130
372,931,111
9,000,000
9,000,000
873,963,546
400,624,020
4,602,935,488
9,000,000
9,000,000
777,175,583
871,086,413
5,517,000,017
541,100,000
541,100,000
730,673,887
89,728,823
4,542,145,721
681,494,510
681,494,510
590,810,617
275,529,663
4,941,140,546
104,510,837
646,308,086
1,194,085
33,753,343
45,332,536
831,098,887
5,434,034,375
104,787,713
429,161,446
15,523,124
27,500,000
45,005,232
621,977,515
6,138,977,532
102,937,288
416,940,826
364,364,069
875,335
37,776,199
922,893,717
5,465,039,438
103,226,006
391,940,826
210,847,673
11,379,374
39,109,325
756,503,204
5,697,643,750
The accompanying notes are an integral part of the financial statements.
Annual Report 2010
61
Balance sheets (continued)
(Unit: Baht)
Note
2010
2009
2010
2009
Liabilities and shareholdersû equity
Current liabilities
Bank overdrafts and short-term loans from banks
Trust receipts
Trade accounts payable
Related parties
Unrelated parties
Total trade accounts payable
Amounts due to and advance from related parties
Short-term loans from
Related parties
Unrelated party
Total short-term loans
Current portion of long-term loan
Current portion of liabilities under finance
lease agreements
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term loan, net of current portion
Long-term liabilities under finance lease
agreements, net of current portion
Other non-current liabilities
Total non-current liabilities
Total liabilities
18
18
1,200,311,544
1,134,237,406
1,226,798,028
1,593,020,411
1,087,819,267
1,045,388,762
995,542,225
1,463,661,142
8
299,187
369,317,370
369,616,557
3,507,261
822,120
678,748,579
679,570,699
5,151,235
864,896,670
48,683,520
913,580,190
173,731,361
541,653,458
144,119,335
685,772,793
130,404,694
495,000
495,000
1,066,973
12,606,000
12,606,000
-
106,650,000
106,650,000
1,066,973
430,000,000
430,000,000
-
21
22
5,684,037
289,468,778
3,004,387,556
1,875,864
248,366,490
3,767,388,727
5,412,355
205,037,267
3,538,686,175
1,827,316
142,073,091
3,849,281,261
20
9,684,423
-
9,684,423
-
21
403,279
1,209,686
11,297,388
3,015,684,944
5,412,355
2,058,486
7,470,841
3,774,859,568
1,209,686
10,894,109
3,549,580,284
5,412,355
4,353,575
9,765,930
3,859,047,191
8
8
19
20
62
Annual Report 2010
Balance sheets (continued)
(Unit: Baht)
Note
2010
2009
2010
2009
Liabilities and shareholdersû equity (continued)
Shareholdersû equity
Share capital
Registered
4,440,000,000 ordinary shares of Baht 0.1 each
Issued and fully paid-up
4,301,300,000 ordinary shares of Baht 0.1 each
(2009: 4,300,000,000 ordinary shares of
Baht 0.1 each)
Share premium
Unrealised gain
Lower of investment in subsidiary companies arising as
a result of acquisition additional shares at a price lower
than net book value at the acquisition date - net
Translation adjustment
Retained earnings
Appropriated - statutory reserve
24
Unappropriated
Equity attributable to the Companyûs shareholders
Minority interest - equity attributable to minority
shareholders of subsidiaries
Total shareholdersû equity
Total liabilities and shareholdersû equity
444,000,000
444,000,000
444,000,000
444,000,000
430,130,000
1,072,132,034
430,000,000
1,070,052,034
430,130,000
1,072,132,034
430,000,000
1,070,052,034
681,422
(8,178,147)
681,422
(10,882,681)
-
-
44,400,000
848,472,116
2,387,637,425
44,400,000
799,688,366
2,333,939,141
44,400,000
368,797,120
1,915,459,154
44,400,000
294,144,525
1,838,596,559
30,712,006
2,418,349,431
5,434,034,375
30,178,823
2,364,117,964
6,138,977,532
1,915,459,154
5,465,039,438
1,838,596,559
5,697,643,750
Annual Report 2010
63
Income statements
For the years ended 31 December 2010 and 2009
(Unit: Baht)
Note
2010
2009
2010
2009
Revenues
Sales
Service income
Other income
25
Total revenues
Expenses
27
Cost of sales
Cost of services
Selling expenses
Administrative expenses
Management benefit expenses
Other expenses
26
Total expenses
Income before finance cost and corporate income tax
Finance cost
28
Income before corporate income tax
Net income for the year
7,019,935,915
966,573,534
138,351,876
8,124,861,325
7,929,690,021
839,262,484
270,210,571
9,039,163,076
6,039,370,580
96,570,020
480,262,544
6,616,203,144
6,421,068,074
37,970,758
304,833,949
6,763,872,781
5,794,347,721
554,033,580
1,146,612,778
316,572,321
22,295,358
41,713,826
7,875,575,584
249,285,741
(106,399,228)
142,886,513
(7,401,581)
135,484,932
6,913,863,121
506,400,434
982,307,477
352,843,327
21,266,565
12,664,190
8,789,345,114
249,817,962
(141,880,180)
107,937,782
(2,916,864)
105,020,918
5,289,496,051
40,246,177
744,549,234
240,352,379
21,800,585
26,508,359
6,362,952,785
253,250,359
(92,597,764)
160,652,595
160,652,595
5,753,499,473
35,336,851
578,250,385
222,402,891
20,777,666
2,150,591
6,612,417,857
151,454,924
(129,920,496)
21,534,428
(203,454)
21,330,974
134,783,750
701,182
135,484,932
115,554,152
(10,533,234)
105,020,918
160,652,595
21,330,974
Earnings per share
29
Basic earnings per share
Net income attributable to equity holders of the parent
0.031
0.027
0.037
0.005
Diluted earnings per share
Net income attributable to equity holders of the parent
0.031
0.027
0.037
0.005
Net income attributable to:
Equity holders of the parent
Minority interests of the subsidiaries
64
Annual Report 2010
Statements of changes in shareholdersû equity
(Unit: Baht)
Consolidated financial statements
Equity attributable to the parentûs shareholders
Lower of
investment
in subsidiary
companies
arising as a
result of
acquisition
additional
Minority
shares at a
interest - equity
price lower
Retained earnings
Total equity attributable to
Issued and fully
than net book
Appropriated attributable to
minority
paid-up
value at the
Translation
statutory
the parentûs shareholders of
share capital Share premium acquisition date adjustment
reserve
Unappropriated shareholders subsidiaries
Annual Report 2010
Balance as at 31 December 2008
Income (expense) recognised
directly in equity:
Net income (expense) recognised
directly in equity
Total income (expense) for the year
Dividend paid (Note 30)
Unappropriated retained earnings
transferred to statutory reserve
Increase in minority interest due to
sale of investment in subsidiary
Total
430,000,000
1,070,052,034
681,422
(2,656,368)
43,000,000
728,534,214
2,269,611,302
20,458,454
2,290,069,756
-
-
-
(8,226,313)
-
-
(8,226,313)
313,459
(7,912,854)
-
-
-
(8,226,313)
(8,226,313)
-
-
115,554,152
115,554,152
(43,000,000)
(8,226,313)
115,554,152
107,327,839
(43,000,000)
313,459
(10,533,234)
(10,219,775)
-
(7,912,854)
105,020,918
97,108,064
(43,000,000)
-
-
-
-
1,400,000
(1,400,000)
-
-
-
430,000,000
1,070,052,034
681,422
(10,882,681)
44,400,000
799,688,366
2,333,939,141
19,940,144
30,178,823
19,940,144
2,364,117,964
65
Annual Report 2010
(Unit: Baht)
Equity attributable to the parentûs shareholders
Lower of
investment
in subsidiary
companies
arising as a
result of
acquisition
additional
Minority
shares at a
interest - equity
price lower
Retained earnings
Total equity attributable to
Issued and fully
than net book
Appropriated attributable to
minority
paid-up
value at the
Translation
statutory
the parentûs shareholders of
share capital Share premium acquisition date adjustment
reserve
Unappropriated shareholders subsidiaries
Income (expense) recognised
directly in equity:
Net income (expense) recognised
directly in equity
Total income (expense) for the year
Issued of shares due to
warrant exercised (Note 23)
Total
430,000,000
1,070,052,034
681,422
(10,882,681)
44,400,000
799,688,366
2,333,939,141
30,178,823
2,364,117,964
-
-
-
2,704,534
-
-
2,704,534
(167,999)
2,536,535
-
-
-
2,704,534
2,704,534
-
-
134,783,750
134,783,750
(86,000,000)
2,704,534
134,783,750
137,488,284
(86,000,000)
(167,999)
701,182
533,183
-
2,536,535
135,484,932
138,021,467
(86,000,000)
130,000
430,130,000
2,080,000
1,072,132,034
681,422
(8,178,147)
44,400,000
848,472,116
2,210,000
2,387,637,425
30,712,006
2,210,000
2,418,349,431
66
Statements of changes in shareholdersû equity (continued)
Statements of changes in shareholdersû equity (continued)
(Unit: Baht)
Unappropriated retained earnings transferred to statutory reserve
Issued of shares due to warrant exercised (Note 23)
Issued and fully
paid-up
share capital
430,000,000
430,000,000
430,000,000
130,000
430,130,000
Separate financial statements
Retained earnings
Appropriated statutory
Share premium
reserve
Unappropriated
1,070,052,034
43,000,000
317,213,551
21,330,974
(43,000,000)
1,400,000
(1,400,000)
1,070,052,034
44,400,000
294,144,525
1,070,052,034
44,400,000
294,144,525
160,652,595
(86,000,000)
2,080,000
1,072,132,034
44,400,000
368,797,120
Total
1,860,265,585
21,330,974
(43,000,000)
1,838,596,559
1,838,596,559
160,652,595
(86,000,000)
2,210,000
1,915,459,154
Annual Report 2010
67
Cash flow statements
(Unit: Baht)
Note
2010
2009
2010
2009
Cash flows from operating activities
Income before tax
Adjustments to reconcile income before tax
to net cash provided by (paid from)
operating activities:
Unrealised (gain) loss on exchange
(Gain) loss on disposal of short-term investments
in trading securities
7.1
(Gain) loss on change in value of short-term
investments in trading securities
7.1
Write-off bad debts
Increase in allowance for
doubtful accounts - trade accounts receivable
Increase (decrease) in allowance for
diminution in value of inventories
Increase (decrease) in allowance for diminution
in value of sales promotion receivables
Increase in allowance for diminution in
value of advance for purchase of inventories
Write-off inventories
Write-off withholding tax deducted at sources
Gain on disposal of investment in subsidiary company
Transfer equipment to expense
(Gain) loss on disposal of equipment
Depreciation
15
Amortisation of prepaid IT service fee to
parent company
16
Amortisation of intangible assets
17
Amortisation - others
Amortisation of deferred interest expenses under
finance lease agreements
Increase in allowance for warranty
Dividend income from subsidiary
8, 14
Interest income
25
Interest expenses
28
Income from operating activities before changes
in operating assets and liabilities
142,886,513
107,937,782
160,652,595
21,534,428
(4,093,345)
4,666,771
(2,833,308)
2,509,997
(41,426,517)
1,852,822
(37,468,101)
1,852,822
11,926,830
-
(54,126,087)
1,378,673
7,347,892
-
(54,126,087)
153,232
4,180,980
763,828
329,085
753,008
12,532,539
2,671,542
16,666,493
(2,945,943)
4,527,563
(3,307,371)
(3,083,449)
(608,470)
1,319,539
2,623,513
169,741
(883,784)
148,688,877
12,432
26,136,424
4,290,675
(45,511,537)
3,129,284
1,581,145
155,597,882
1,319,539
169,741
(1,332,296)
71,177,619
12,432
4,113,782
3,129,284
(18,217)
79,835,099
14,329,039
13,846,587
16,229,792
14,329,039
14,153,800
10,504,039
-
10,504,039
-
358,534
1,432,000
(4,684,821)
89,052,028
477,385
2,991,047
(7,425,475)
127,751,994
341,104
1,432,000
(239,832,000)
(25,517,072)
81,153,615
457,186
2,991,047
(36,470,599)
121,251,593
413,015,608
359,352,055
41,027,496
154,928,633
68
Annual Report 2010
Cash flow statements (continued)
(Unit: Baht)
Note
2010
2009
2010
2009
Cash flows from operating activities (continued)
Operating assets (increase) decrease
Trade accounts receivable - related parties
Trade accounts receivable - unrelated parties
Amounts due from and advance to related parties
Inventories
Other current assets
Other non-current assets
Operating liabilities increase (decrease)
Trade accounts payable - related parties
Trade accounts payable - unrelated parties
Net cash flows from (used in) operating activities
Cash paid for acquisition of short-term
7.1
Proceeds from sales of short-term
7.1
Cash paid for interest expenses
Cash received for withholding tax
Cash paid for corporate income tax
Cash flows from operating activities
(779,328)
112,872,356
468,348
(111,587,781)
367,694,365
(451,830)
(2,548,958)
(656,973,420)
6,913,745
802,296,016
(54,590,471)
(14,227,844)
(19,810,120)
(240,901,555)
(51,642,608)
(159,659,908)
140,025,541
1,333,126
43,886,211
(675,529,672)
(89,193,729)
718,154,299
42,710,810
(2,118,741)
(522,933)
(308,577,812)
(2,892,657)
32,105,159
(848,800)
500,494,695
49,428,367
209,671,883
(2,193,962)
58,996,968
3,025,177
759,149,556
323,023,829
(95,194,372)
44,451,392
56,059,903
(3,143,889)
35,568,835
272,883,649
80,631,734
46,571,837
13,573,496
(1,693,776)
604,804,751
(51,144,932)
-
(1,451,760)
-
173,034,614
(88,103,658)
118,703,266
(49,540,996)
603,442,989
7,624,045
(130,450,633)
796,627
(46,377,044)
590,742,551
211,228,776
(82,507,340)
57,138,820
(9,599,707)
210,377,624
7,624,045
(124,029,568)
(9,473,076)
478,926,152
Annual Report 2010
69
(Unit: Baht)
Note
2010
2009
2010
2009
Cash flows from investing activities
(Increase) decrease in short-term investments
in debt securities
Cash paid to provide short-term loans to
related parties
8
Cash received from repayment of short-term
loans to related parties
8
Cash received for interest income from short-term
loans to related parties
Decrease in restricted bank deposits
Increase in fixed deposit
Dividend income from subsidiaries
8, 14
Net cash flow from disposal of investment in
subsidiary company
Cash paid for investment in subsidiaries
Cash paid for acquisition of equipment
Proceeds from disposal of equipment
Proceeds from disposal of asset held for sale
Cash paid for acquisition of intangible assets
Net cash flows from (used in) investing activities
299,557,905
(299,557,905)
299,557,905
(299,557,905)
-
-
(587,700,000)
(718,529,970)
-
-
728,094,510
563,315,948
4,685,684
276,876
(742,500)
-
7,434,383
2,886,171
(100,000,000)
-
28,913,212
288,718
(742,500)
239,832,000
38,955,235
140,524
(100,000,000)
42,969,900
(357,459,395)
8,775,757
(20,124,358)
(65,030,031)
(8,434,864)
(165,276,518)
337,599
5,850,000
(556,761,134)
(25,000,000)
(214,811,200)
5,962,755
474,395,400
(46,045,571)
336,069
(518,415,770)
70
Annual Report 2010
(Unit: Baht)
Note
2010
2009
2010
2009
Cash flows from financing activities
Increase (decrease) in bank overdrafts
Proceeds from short-term loans from banks
Cash paid to settle short-term loans from banks
Increase (decrease) in trust receipts
Proceeds from short-term loans from related parties 8
Repayment of short-term loans from related parties 8
Repayment of short-term loans from unrelated party
Cash paid to settle long-term loans from banks
Cash paid to settle liabilities under finance
lease agreements
Cash received for share issued due to warrant exercised
Dividend paid
30
Net cash flows used in financing activities
Translation adjustments
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Supplemental disclosures of cash flows information
Non-cash items for investing activities
Transfer inventories to equipment
Increase in accounts payable for purchase of equipment
Right under the advertising agreement received
from the disposal of asset held for sale
17
Receivable from disposal of asset held for sale
Long-term loan from bank for purchase
of fixed assets
20
Assets acquired under finance lease agreement
(24,131,532)
3,523,762,274
(3,524,835,411)
(450,255,124)
(12,111,000)
(758,604)
(66,030,182)
2,190,765,321
(2,874,334,525)
554,990,411
(4,159,680)
1,507,326
93,766,459
(2,996,743)
(409,744,499)
475,000,000
(798,350,000)
(758,604)
(30,513,829)
976,102,732
(1,640,656,757)
615,243,939
525,000,000
(533,000,000)
-
(2,338,211)
2,210,000
(86,000,000)
(574,457,608)
2,679,500
(33,365,150)
180,652,757
147,287,607
(3,613,084)
(43,000,000)
(245,381,739)
(11,291,428)
(222,691,750)
403,344,507
180,652,757
(2,168,420)
2,210,000
(86,000,000)
(727,534,481)
(42,761,457)
81,154,703
38,393,246
(2,785,008)
(43,000,000)
(133,608,923)
(173,098,541)
254,253,244
81,154,703
3,130,145
42,643
6,294,257
-
3,130,145
42,870
5,082,652
-
-
27,500,000
13,650,000
-
-
11,510,000
828,479
-
11,510,000
-
-
Annual Report 2010
71
Notes to consolidated financial statements
1. General information
Samart I-Mobile Public Company Limited (çthe Companyé) is a public company incorporated and domiciled in
Thailand. Its parent company is Samart Corporation Public Company Limited, which was incorporated in Thailand. The
Company is principally engaged in the distribution of communications and electronic equipment. The registered office of
the Company is at 99/3 Moo 4 Software Park Building, 33rd Floor, Chaengwattana Road, Klong Gluar, Pak-kred,
Nonthaburi.
2. Basis of preparation
2.1
The financial statements have been prepared in accordance with accounting standards enunciated under the
Accounting Professions Act B.E. 2547 and their presentation has been made in compliance with the stipulations
of the Notification of the Department of Business Development dated 30 January 2009, issued under the
Accounting Act B.E. 2543.
The financial statements in Thai language are the official statutory financial statements of the Company.
The financial statements in English language have been translated from the Thai language financial statements.
The financial statements have been prepared on a historical cost basis except where otherwise disclosed
in the accounting policies.
2.2
Basis of consolidation
a)
The consolidated financial statements include the financial statements of Samart I-Mobile Public Company
Limited (çthe Companyé) and the following subsidiary companies (çthe subsidiariesé):
Subsidiaries directly held by the Company
Companyûs name
Nature of business
Samart Mobile Services Distribution of information
Co., Ltd.
technology devices
Samart Multimedia
Provision of multimedia
Co., Ltd.
infotainment
I-Mobile International
General management business
Co., Ltd.
including business planning
and business coordination
Brain Source Co., Ltd. Research and development of
mobile phone application
I-Mobile Plus Co., Ltd. Provision of wireless
(Formerly known as
telecommunications services
çI-Mobile Netplus
(In 2010, not yet operational
Co., Ltd.é)
in its principal activity)
72
Annual Report 2010
Revenues as a
Assets as a percentage percentage to the
to the consolidated
consolidated total
Country of
Percentage of
total assets as at revenues for the year
incorporation
shareholding
31 December
ended 31 December
2010
2009
2010
2009
2010
2009
Percent Percent Percent Percent Percent Percent
Thailand
97.4
97.4
0.91
5.09
0.96
3.40
Thailand
100
100
12.11
8.58
11.09
8.86
Thailand
100
100
14.86
18.73
13.72
16.79
Thailand
100
100
0.05
0.05
-
-
Thailand
100
100
0.14
0.04
-
-
Indirect subsidiaries held by the Companyûs subsidiaries
Companyûs name
Nature of business
Investments through Samart Multimedia Co., Ltd.
Take A Look Co., Ltd.
Provision of advertising and billboard advertisement
services, and preparation
Samart Interactive Media Co., Ltd.
Distribution of goods and provision of services related to
horoscopes and astrology
I-Sport Co., Ltd.
Provider of information of sports via full option interactive
multimedia
Investments through I-Mobile International Co., Ltd.
Samart I-Mobile (Malaysia) Sdn. Bhd.
Distributor of mobile phones and provider of
entertainment content
I-Mobile (Cambodia) Co., Ltd.
Ceased business in 2006, currently is in process of liquidation
Pt. Samart I-Mobile Indonesia
Distributor of mobile phones and accessories
Samart I-Mobile (Hong Kong) Limited
Distributor of mobile phones and accessories
I-Mobile Inter trade Co., Ltd.
Export I-Mobile products
Investments through I-Mobile International Co., Ltd. and I-Mobile Inter trade Co., Ltd.
Samart I-Mobile (Middle East) FZCO
Distributor of mobile phones and provision of mobile content
(In 2010, not yet operational in its principal activity)
Investment through Samart I-Mobile (Malaysia) Sdn. Bhd.
Pemata Benar Sdn. Bhd.
Not yet operational
b)
c)
d)
e)
f)
g)
2.3
Percentage of indirect Country of
shareholding
incorporation
2010
2009
Percent
Percent
67
67
Thailand
100
100
Thailand
50
50
Thailand
100
100
Malaysia
100
100
100
- Cambodia
100 Indonesia
100 Hong Kong
100 Thailand
100
100
United
Arab Emirates
100
100
Malaysia
Subsidiaries are fully consolidated as from the date of acquisition, being the date on which the Company
obtains control, and continue to be consolidated until the date when such control ceases.
The financial statements of the subsidiaries are prepared using the same significant accounting policies as
the Company.
The assets and liabilities in the financial statements of overseas subsidiary companies are translated to
Baht using the exchange rate prevailing on the balance sheet date, and revenues and expenses translated
using monthly average exchange rates. The resulting differences are shown under the caption of çTranslation
adjustmenté in shareholdersû equity.
Material balances and transactions between the Company and its subsidiary companies have been
eliminated from the consolidated financial statements.
Minority interests represent the portion of net income or loss and net assets of the subsidiaries that are
not held by the Company and are presented separately in the consolidated income statement and within
equity in the consolidated balance sheet.
In recording the acquisition of additional shares of subsidiaries (repurchase of shares from minority
shareholders) when the fair value of the net assets acquired is lower than the cost of the investment the
difference has been presented in shareholdersû equity in the balance sheet under the caption of çSurplus
on investment in subsidiary companies arising as a result of acquisition of additional shares at a price
higher than net book value at the acquisition dateé. When the fair value of the net assets acquired is higher
than the cost of the investment the difference has been presented in shareholdersû equity in the balance
sheet under the caption of çLower of investment in subsidiary companies arising as a result of acquisition
of additional shares at a price lower than net book value at the acquisition dateé.
The separate financial statements, which present investments in subsidiaries presented under the cost method,
have been prepared solely for the benefit of the public.
Annual Report 2010
73
3. Adoption of new accounting standards
During the current year, the Federation of Accounting Professions issued a number of revised and new accounting
standards as listed below.
a)
Accounting standards that are effective for fiscal years beginning on or after 1 January 2011 (except Framework
for the Preparation and Presentation of Financial Statements, which is immediately effective):
Framework for the Preparation and Presentation of Financial Statements
(revised 2009)
TAS 1 (revised 2009) Presentation of Financial Statements
TAS 2 (revised 2009) Inventories
TAS 7 (revised 2009) Statement of Cash Flows
TAS 8 (revised 2009) Accounting Policies, Changes in Accounting Estimates and Errors
TAS 10 (revised 2009) Events after the Reporting Period
TAS 11 (revised 2009) Construction Contracts
TAS 16 (revised 2009) Property, Plant and Equipment
TAS 17 (revised 2009) Leases
TAS 18 (revised 2009) Revenue
TAS 19
Employee Benefits
TAS 23 (revised 2009) Borrowing Costs
TAS 24 (revised 2009) Related Party Disclosures
TAS 26
Accounting and Reporting by Retirement Benefit Plans
TAS 27 (revised 2009) Consolidated and Separate Financial Statements
TAS 28 (revised 2009) Investments in Associates
TAS 29
Financial Reporting in Hyperinflationary Economies
TAS 31 (revised 2009) Interests in Joint Ventures
TAS 33 (revised 2009) Earnings per Share
TAS 34 (revised 2009) Interim Financial Reporting
TAS 36 (revised 2009) Impairment of Assets
TAS 37 (revised 2009) Provisions, Contingent Liabilities and Contingent Assets
TAS 38 (revised 2009) Intangible Assets
TAS 40 (revised 2009) Investment Property
TFRS 2
Share-Based Payment
TFRS 3 (revised 2009) Business Combinations
TFRS 5 (revised 2009) Non-current Assets Held for Sale and Discontinued Operations
TFRS 6
Exploration for and Evaluation of Mineral Resources
TFRIC 15
Agreements for the Construction of Real Estate
b)
Accounting standards that are effective for fiscal years beginning on or after 1 January 2013:
TAS 12
Income Taxes
TAS 20 (revised 2009) Accounting for Government Grants and Disclosure of Government Assistance
TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rates
The Companyûs management believes that these accounting standards will not have any significant impact
on the financial statements for the year when they are initially applied, except for the following accounting
standards which management expects the impact on the financial statements in the year when they are adopted.
74
Annual Report 2010
TAS 19 Employee Benefits
This accounting standard requires employee benefits to be recognised as expense in the period in which
the service is performed by the employee. In particular, an entity has to evaluate and make a provision for postemployment benefits using actuarial techniques. Currently, the Company and its subsidiaries account for such
employee benefits when they are incurred.
At present, the management is evaluating the impact on the financial statements in the year when this
standard is adopted.
TAS 12 Income Taxes
This accounting standard requires an entity to identify temporary differences, which are differences between
the carrying amount of an asset or liability in the accounting records and its tax base, and to recognise deferred tax
assets and liabilities under the stipulated guidelines.
At present, the management is evaluating the impact on the financial statements in the year when this
standard is adopted.
4. Significant accounting policies
4.1
Revenue recognition
Sales of goods
Sales of goods are recognised when the significant risks and rewards of ownership of the goods have
passed to the buyer. Sales are the invoiced value, excluding value added tax, of goods supplied after deducting
discounts and allowances.
Rendering of services
Service revenue is recognised when services have been rendered taking into account the stage of
completion.
Unearned revenue from telephone service of prepaid phone cards
Unearned revenue from telephone service of the prepaid system represents the unused portion of the face
value of prepaid phone cards. It is deferred and recognised based on actual usage or upon expiration of the
usage as stated on cards, depending on which comes first.
Revenue from telephone services
Revenue related to domestic calls, international calls and roaming service calls is recognised when the
telephone services have been rendered.
Revenue from sales of telephone sets and starter kits
Sales of goods are recognised when the significant risks and rewards of ownership of the goods have
passed to the buyer. Sales are the invoiced value, excluding value added tax, of goods supplied after deducting
discounts and allowances.
In case of revenue arrangements with multiple deliverable, the revenue elements are recognised in proportion
to the fair value of delivered items. The subsequent services are recorded at the normal selling price or at a
discounted value, depending on the facts and circumstances.
Selling support income is recognised as income on an accrual basis.
Entrance fee on franchise agreement
Entrance fee on franchise agreement is recognised on the term of agreement.
Royalty and technical assistance fee
Royalty and technical assistance fee are recognised as income on an accrual basis.
Annual Report 2010
75
Interest income
Interest income is recognised on an accrual basis based on the effective interest rate.
Dividends
Dividends are recognised when the right to receive the dividends is established.
4.2
Cash and cash equivalents consist cash in hand, cash at banks, and all highly liquid investments with an
original maturity of three months or less and not subject to withdrawal restrictions.
4.3
Trade accounts receivable
Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is
provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally
based on collection experiences and analysis of debt aging.
4.4
Inventories
Inventories are valued at the lower of average cost and net realisable value.
The net realisable value of inventories is estimated form the estimated selling price in the ordinary course
of business, less the estimated costs to complete the sale.
Allowance for inventory obsolescence will be set up for old, obsolete, slow moving or deteriorated inventories.
4.5
Investments
a)
Investments in securities held for trading are stated at fair value. Changes in the fair value of these
securities are recorded as gains or losses in the income statement.
b)
Investments in subsidiaries are accounted for in separate financial statements 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. If the last bid price of the last working day of the year as quoted on the
Stock Exchange of Thailand is not available, the basis used by the Company to determine the fair value of
marketable securities is the amount for which an asset can be exchanged or liability settled between knowledgeable,
willing parties in an armûs length transaction.
The weighted average method is used for computation of the cost of investments.
On disposal of an investment, the difference between net disposal proceeds and the carrying amount of
the investment is recognised as income or expenses in the income statement.
4.6
Property, plant and equipment/Depreciation
Land is stated at cost. Buildings and equipment are stated at cost less accumulated depreciation and
allowance for loss on impairment of assets (if any).
Depreciation of building and equipment is calculated by reference to their costs on the straight-line basis
over the following estimated useful lives:
Buildings
- 20 years
Network equipment and network improvement - 5 years
Furniture, fixture and office equipment
- 5 years
Motor vehicles
- 5 years
Equipment for rent
- 5 years
Depreciation is included in determining income.
No depreciation is provided on land and assets under installation.
76
Annual Report 2010
An item of equipment is derecognised upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss arising on disposal of an asset (calculated as the difference between the
net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset
is derecognised.
4.7
Intangible assets
Intangible assets are initially recognised at cost. Following the initial recognition, the intangible assets are
carried at cost less any accumulated amortisation and any accumulated impairment losses.
Intangible assets with finite lives are amortised on a systematic basis over the economic useful life and
tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation
period and the amortisation method of such intangible assets are reviewed at least at each financial year end. The
amortisation expense is charged to the income statement.
A summary of the intangible assets with finite useful lives is as follows:
Useful lives
Right under the advertising agreement - 2 and 3 years but not exceeding the number of hours granted with
such right in each month
Computer software
- 5 years
Right under the distribution agreement - 2 years
4.8
Related party transactions
Related parties comprise individuals and enterprises that control, or are controlled by, the Company,
whether directly or indirectly, or which are under common control with the Company.
They also include individuals and enterprises which directly or indirectly own a voting interest in the
Company that gives them significant influence over the Company, key management personnel, directors and
officers with authority in the planning and direction of the Companyûs operations.
4.9
Long-term leases
Finance leases
Leases of equipment which transfer substantially all the risks and rewards of ownership are classified as
finance leases. Finance leases are capitalised at the lower of the fair value of the leased assets and the present
value of the minimum lease payments. The outstanding rental obligations, net of finance charges, are included in
other long-term payables, while the interest element is charged to the income statements over the lease period.
The equipment acquired under finance leases is depreciated over the useful life of the assets.
Operating leases
Leases of assets where a significant portion of the risks and rewards of ownership are retained by the
lessor and classified as operating leases. Operating lease payments are recognised as an expense in the income
statement on a straight line basis over the lease term.
4.10 Foreign currencies
Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the
exchange rate ruling at the balance sheet date.
Gains and losses on exchange are included in determining income.
4.11 Impairment of assets
At each reporting date, the Company and its subsidiaries perform impairment reviews in respect of the
property, plant and equipment and other intangible assets whenever events or changes in circumstances indicate
that an asset may be impaired. An impairment loss is recognised when the recoverable amount of an asset, which
is the higher of the assetûs fair value less costs to sell and its value in use, is less than the carrying amount. In
Annual Report 2010
77
determining value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are
corroborated by a valuation model that, based on information available, reflects the amount that the Company and
its subsidiaries could obtain from the disposal of the asset in an armûs length transaction between knowledgeable,
willing parties, after deducting the costs of disposal.
An impairment loss is recognised in the income statement.
4.12 Employee benefits
Salaries, wages, bonuses and contributions to the social security fund and provident fund are recognised
as expenses when incurred.
The Company issued warrants to purchase the ordinary shares to employees of the Company and its
subsidiaries. The transactions will be recorded in the financial statements when the warrants are exercised.
4.13 Provisions
Provisions 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 resources embodying economic benefits will be required to settle
the obligation, and a reliable estimate can be made of the amount of the obligation.
4.14 Income Tax
Income tax is provided in the accounts at the amount expected to be paid to the taxation authorities,
based on taxable profits determined in accordance with tax legislation. It has been calculated on the Companyûs
income after adjusting added back provision and expenses which are disallowed for tax computation proposes
and less the amount of tax losses brought forward from previous year (if any).
Overseas subsidiaries calculate corporate income tax in accordance with tax rate regulated in tax law of
those countries.
4.15 Derivatives
Forward exchange contracts
Receivables and payables arising from forward exchange contracts are translated into Baht at the rates of
exchange ruling at the balance sheet date. Gains and losses from the translation are included in determining
income.
Currency option agreements
Currency option agreements are contracts between two parties whereby the seller grants the buyer a
future option to buy (call option) or to sell (put option) foreign currency at an exchange rate stipulated in the
agreement. The Company enters into such agreements in order to manage foreign exchange risk.
The notional amounts of cross currency option agreements utilised by the Company to manage foreign
exchange risk are not recognised as assets or liabilities upon inception of the agreement, but fees paid by the
Company in respect of such agreements (if any) are amortised on a straight line basis over the term of the
agreement.
5. Significant accounting judgements and estimates
The preparation of financial statements in conformity with generally accepted accounting principles at times
requires management to make subjective judgements and estimates regarding matters that are inherently uncertain.
These judgements and estimates affect reported amounts and disclosures; and actual results could differ from these
estimates. Significant judgements and estimates are as follows:
Leases
In 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 and rewards of ownership of the leased asset has been
transferred, taking into consideration terms and conditions of the arrangement.
78
Annual Report 2010
Allowance for doubtful accounts
In determining an allowance for doubtful accounts, the management needs to make judgement and estimates
based upon, among other things, past collection history, aging profile of outstanding debts and the prevailing economic
condition.
Allowance for diminution in value of inventories
The determination of allowance for diminution in the value of inventories requires management to exercise
judgement in estimating losses on outstanding inventories, based on the selling price expected in the ordinary course of
business; minus selling expenses and provision for obsolete, slow-moving and deteriorated inventories, and taking into
account the approximate useful life of each type of inventory and current changes in technology.
Allowance for diminution in value of withholding tax deducted at sources
The Company and its subsidiaries regard withholding tax deducted at sources as an asset since they have the
right to claim a refund of it. The net realisable value of tax depends on the exercise of the right to claim it, and the results
of any tax audit by the Revenue officials. However, the management has used judgement to assess the outcome of the
refund claim and believes that no loss will result. Therefore, no allowance for diminution in value of withholding tax
deducted at sources is recorded as at the balance sheet date.
Property, plant and equipment/Depreciation
In 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 subsidiariesû plant and equipment and to review estimate useful lives
and salvage values when there are any changes.
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.
Contingent liabilities
The subsidiary has contingent liabilities as a result of tax assessment. The subsidiaryûs management has used
judgement to assess of the results of the litigation and believes that no loss will result. Therefore, no contingent liabilities
are recorded as at the balance sheet date. However, actual results could differ from the estimates.
6. Cash and cash equivalents
Cash
Bank deposits
Total cash and bank deposits
Less: Restricted bank deposits
(Unit: Baht)
2010
2009
2010
2009
1,085,767
1,050,886
911,568
900,568
250,712,677
284,389,584
140,418,966
183,480,141
251,798,444
285,440,470
141,330,534
184,380,709
(104,510,837)
(104,787,713)
(102,937,288)
(103,226,006)
147,287,607
180,652,757
38,393,246
81,154,703
As at 31 December 2010, bank deposits in saving accounts and fixed deposits carried interests between 0.25 and
1.05 percent per annum (2009: between 0.50 and 1.50 percent per annum).
Annual Report 2010
79
7. Short-term investments
The balance of the short-term investments as at 31 December 2010 and 2009 are as follows:
(Unit: Baht)
2010
2009
2010
2009
102,137,912
194,527,907
14,871,100
194,527,907
100,742,500
100,000,000
100,742,500
100,000,000
299,557,905
299,557,905
202,880,412
594,085,812
115,613,600
594,085,812
Trading securities (Note 7.1)
Fixed deposit at financial institution
Short-term debt securities
Total
7.1
Short-term investments in trading securities
As at 31 December 2010 and 2009, the Company and its subsidiary company have short-term investments
in trading securities as follows:
2010
2009
Common stock
No. of shares
Cost
Fair value No. of shares
Cost
Fair value
(Shares)
(Baht)
(Baht)
(Shares)
(Baht)
(Baht)
Siam Sport Syndicate Plc.
27,213,000 85,360,492 85,448,820 11,662,300 25,544,960 39,418,574
Ascon Construction Plc.
5,323,120 34,458,177 13,307,800
4,839,200 33,002,659 19,163,232
Rich Asia Steel Plc.
10,000,000
1,804,815
900,000 10,000,000
1,804,815
800,000
Living Land Capital Plc.
2,010,000
2,434,359
663,300
2,010,000
2,434,359
804,000
Warrant No. 3 of Siam Sport Syndicate Plc. 1,667,883
2,526,843
1,817,992
1,667,883
2,526,843
2,835,401
S.E.C. Auto Sales and Services Plc.
1,000,000
3,145,724
1,000,000
3,145,724
Samart Telcoms Plc.
- 15,822,800 105,847,898 122,626,700
Salee Industry Plc.
3,000,000 12,222,829
8,880,000
Total
129,730,410 102,137,912
186,530,087 194,527,907
Add (Less): Change in value
(27,592,498)
7,997,820
Total short-term investments in
trading securities
102,137,912
194,527,907
Common stock
Ascon Construction Plc.
Rich Asia Steel Plc.
Living Land Capital Plc.
S.E.C. Auto Sales and Services Plc.
Samart Telcoms Plc.
Siam Sport Syndicate Plc.
Warrant No. 3
of Siam Sport Syndicate Plc.
Salee Industry Plc.
Total
Add (Less): Change in value
Total short-term investments in trading
securities
80
Annual Report 2010
No. of shares
(Shares)
5,323,120
10,000,000
2,010,000
1,000,000
-
2010
Cost
(Baht)
34,458,177
1,804,815
2,434,359
3,145,724
41,843,075
(26,971,975)
14,871,100
Fair value
(Baht)
13,307,800
900,000
663,300
14,871,100
2009
No. of shares
Cost
(Shares)
(Baht)
4,839,200 33,002,659
10,000,000
1,804,815
2,010,000
2,434,359
1,000,000
3,145,724
15,822,800 105,847,898
11,662,300 25,544,960
1,667,883
3,000,000
2,526,843
12,222,829
186,530,087
7,997,820
194,527,907
Fair value
(Baht)
19,163,232
800,000
804,000
122,626,700
39,418,574
2,835,401
8,880,000
194,527,907
Movement of the short-term investments in trading securities account for the year ended 31 December
2010 are summarised below.
(Unit: Baht)
Consolidated
Separate
financial
financial
statements
statements
Balance as at 1 January 2010
194,527,907
194,537,907
Purchase during the year
51,144,932
1,451,760
Disposals during the year:
Proceed from sales
(173,034,614)
(211,228,776)
Less: Gain on disposals
41,426,517
37,468,101
Total
(131,608,097)
(173,760,675)
Loss on change in value
(11,926,830)
(7,347,892)
102,137,912
14,871,100
Purchase and sales of marketable securities between the Company and Samart Multimedia Co., Ltd.
On 1 November 2010, the Company and Samart Multimedia Co., Ltd., a subsidiary company, entered into
purchase and sales agreement of shares in Siam Sport Syndicate Public Co., Ltd. whereby the shares are to be
transferred from the trading account of the Company to the trading account of the subsidiary company on 2
November 2010 using closing price as at 2 November 2010. The details of the transfer are as follows:
Securities
No. of shares Trading price
Amount
(Shares)
(Baht per share) (Thousand Baht)
Common stock of Siam Sport Syndicate Plc.
11,632,300
3.12
36,293
Warrant No. 3 of Siam Sport Syndicate Plc.
1,667,883
1.14
1,901
38,194
8. Related party transactions
During the years, the Company and its subsidiaries had significant business transactions with related parties,
principally in respect of the purchase and sales of goods, and the provision of services and loans. The pricing policies
for these related party transactions are summarised as follows:
1.
Sales prices are determining at market price, if there is unknown market price, sales price will be determined 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 expenses are charged at the amount stated in the agreement.
3.
Other service income and expenses are charged at a mutually agreed price.
4.
Interest on loans to the subsidiary companies are charged at the following rates:
Interest rate
I-Mobile International Co., Ltd.
Minimum Loan Rate (MLR) minus 1 percent per annum, Cost of fund plus
0.25 percent per annum
(2009: Minimum Loan Rate (MLR), Minimum Loan Rate (MLR) minus 0.75
percent per annum to 2 percent per annum and Minimum Loan Rate
(MLR) plus 1 percent per annum)
Interest rate
Minimum Loan Rate (MLR) minus 1 percent per annum and plus 0.50
percent per annum, Cost of fund plus 0.25 percent per annum
(2009: Minimum Loan Rate (MLR), Minimum Loan Rate (MLR) minus 1
percent per annum, Minimum Loan Rate (MLR) plus 0.50 percent per
annum and plus 1 percent per annum and Fixed deposit rate (3 months)
plus 0.25 percent per annum)
Annual Report 2010
81
Samart I-Mobile (Hong Kong) Ltd.
5.
6.
7.
8.
9.
10.
11.
Cost of fund plus 0.25 percent per annum
(2009: LIBOR (3 months) plus 1.25 percent per annum and 3 percent per
annum and Cost of fund plus 0.25 percent per annum)
Interest on loans from subsidiary companies are charged at the following rates:
Interest rate
Minimum Loan Rate (MLR) plus 0.5 percent per annum
Fixed deposit rate (3 months) plus 0.25 percent per annum and cost of
fund plus 0.25 percent per annum
(2009: Minimum Loan Rate (MLR) minus 1 percent per annum,
Minimum Loan Rate (MLR) plus 0.5 percent per annum to 1.25 percent
per annum and Fixed deposit rate (3 months) plus 0.25 percent per
annum)
Interest rate
Samart Mobile Services Co., Ltd.
Minimum Loan Rate (MLR) minus 1 percent per annum,
Fixed deposit rate (3 months) plus 0.25 percent per annum and Cost of
fund plus 0.25 percent per annum
(2009: Minimum Loan Rate (MLR) minus 1 percent per annum,
Minimum Loan Rate (MLR) plus 0.5 percent per annum and 1 percent per
annum, Fixed deposit rate (3 months) plus 0.25 percent per annum and
Cost of fund plus 0.25 percent per annum)
Fixed deposit rate (3 months) plus 0.25 percent per annum
(formerly known as çI-Mobile Netplus Co., Ltd.é)
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.
Fixed assets are sold and purchased at their net book value plus a margin, depending on the condition of fixed
assets.
Royalty and technical assistance fees are charged at a rate of 0.5 and 0.75 percent of sales and according to the
conditions stipulated in the agreements.
Guarantee fee is charged between the parties at a rate of 0.3 percent per annum.
Dividend income is recognised when declared and the right to receive the dividends is established.
Sale of marketable securities is determining using closing price at share transfer date.
Significant business transactions between the Company and its parent company, subsidiaries and related companies are
summarised below.
2010
2009
2010
2009
Transactions with parent company
IT service fee expense (Note 16)
50
50
36
36
Management fee expense
12
12
12
12
Rental and other expenses
34
35
27
28
Acquisition of fixed assets
2
2
-
82
Annual Report 2010
2010
2009
2010
2009
Transactions with subsidiary companies
(eliminated from the consolidated financial statements)
Sales of goods
Purchase of goods
Management fee income
Interest income
Interest expenses
Advertising income
Other expenses
Guarantee fee income
Dividend income (Note 14)
Income from sales of marketable securities
Transactions with related companies
Sales of goods
Service income
Purchase of goods
Purchase of services
Interest expenses
Acquisition of fixed assets
Other income
Other expenses
-
-
217
4,254
22
7
124
181
7
4
240
38
247
3,161
65
31
15
97
1
6
-
7
1
46
13
1
24
12
2
4
48
1
3
12
11
4
1
13
15
4
6
As at 31 December 2010 and 2009, the balances of the accounts between the Company and those related parties
are as follows:
(Unit: Baht)
2010
2009
2010
2009
Trade accounts receivable - related parties
Parent company
Samart Corporation Public Co., Ltd.
144,086
4,100
77,286
3,500
Subsidiary companies
32,022,883
29,834,061
16,325,768
1,150,276
3,229,140
384,952
858,362
259,432
173,329
282,676
27,380
311,540
I-Sport Co., Ltd.
11,200
-
Annual Report 2010
83
(Unit: Baht)
2010
2009
2010
2009
Related companies
Samart Telcoms Public Co., Ltd.
Posnet Co., Ltd.
Thai Trade Net Co., Ltd.
The Samart Engineering Co., Ltd.
Thai Smart Bus & Services Co., Ltd.
Vision and Security System Co., Ltd.
Samart International Co., Ltd.
Smarterware Co., Ltd.
Total trade accounts receivable - related parties
Amounts due from and advance to related parties
Related companies
Total amounts due from and advance to related parties
Short-term loans to related parties
Total short-term loans to related parties
84
Annual Report 2010
786,581
680,482
416,473
241,303
38,570
24,113
23,429
17,013
11,000
10,461
10,170
9,900
8,370
7,699
4,280
2,427
2,000
1,359
2,439,716
534,053
89,061
923,692
77,066
19,700
8,100
20,920
110,847
2,700
10,298
1,800,537
69,245
50,471
171,710
211,105
38,570
17,960
2,102
14,013
11,000
10,461
8,970
9,900
8,370
7,498
4,280
427
1,359
53,362,789
323,265
17,400
788,010
35,290
19,700
8,100
20,920
110,847
2,700
33,552,669
-
-
286,376,890
122,342,227
3,331,565
1,755,634
1,094,625
918,430
-
310,631,615
21,745,184
12,983,788
1,639,877
18,866,509
911,467
748,183
38,948
5,350,000
8,208
5,358,208
5,350,000
15,540
461,879
5,827,419
5,350,000
8,208
421,177,579
5,350,000
15,540
372,931,111
-
-
541,100,000
541,100,000
330,400,000
307,600,000
43,494,510
681,494,510
(Unit: Baht)
2010
2009
2010
2009
Trade accounts payable - related parties
Related companies
Total trade accounts payable - related parties
Parent company
Samart Corporation Public Co., Ltd.
I-Mobile Plus Co., Ltd. (Formerly known as
çI-Mobile Netplus Co., Ltd.é)
Related companies
Vilailuck International Holding Co.,Ltd.
Best Cellar Co., Ltd.
Total amounts due to and advance from related parties
Short-term loans from related parties
Total short-term loans from related parties
-
-
562,356,952
277,149,802
25,090,729
255,126,974
273,560,099
12,613,478
281,180
18,007
299,187
334,900
18,007
469,213
822,120
281,180
18,007
864,896,670
334,900
18,007
541,653,458
923,705
1,045,299
139,979
171,286
-
-
128,832,545
42,800,000
496,944
32,100
128,012,563
662,576
822,349
-
-
23,129
-
1,738,257
304,059
272,679
266,520
2,041
3,507,261
101,739
263,113
3,386,905
354,179
5,151,235
833,260
47,045
259,839
266,520
173,731,361
15,412
366,329
354,179
130,404,694
-
-
89,650,000
210,000,000
-
-
17,000,000
106,650,000
220,000,000
430,000,000
Annual Report 2010
85
During 2010, movements of short-term loans to related parties and short-term loans from related parties were as follows:
(Unit: Baht)
During the year
Balance as at
1 January 2010
Short-term loans to related parties
Total short-term loans to related parties
Short-term loans from related parties
Total short-term loans from related parties
Increase
Decrease
Balance as at
31 December
2010
330,400,000
307,600,000
43,494,510
681,494,510
532,700,000
55,000,000
587,700,000
(322,000,000)
(362,600,000)
(43,494,510)
(728,094,510)
541,100,000
541,100,000
210,000,000
250,000,000
(370,350,000)
89,650,000
220,000,000
430,000,000
25,000,000
200,000,000
475,000,000
(8,000,000)
(420,000,000)
(798,350,000)
17,000,000
106,650,000
Directors and managementûs benefits
In 2010 the Company and its subsidiaries had salaries, bonuses, meeting allowances and gratuities of their
directors and management recognised as expenses totaling Baht 22.3 million (separate financial statements: Baht 21.8
million) (2009: Baht 21.3 million, separate financial statements: Baht 20.8 million).
In addition, during the year 2009 the Company had allocated 27.9 million warrants to its directors without charge.
The details of the warrants were presented in Note 23 to the financial statements.
Guarantee obligations with related parties
The Company has outstanding guarantee obligations with its related parties, as described in Note 34.2.2 to the
financial statements.
9. Trade accounts receivable
The balances of trade accounts receivable as at 31 December 2010 and 2009, aged on the basis of due dates,
are summarised below.
(Unit: Baht)
2010
2009
2010
2009
Age of receivables
Related parties
Not yet due
2,175,596
1,265,467
7,713,322
31,631,064
Past due
Up to 3 months
225,550
510,670
26,115,384
989,387
3 - 6 months
16,400
2,840,560
20,387
6 - 12 months
30,370
8,000
15,866,368
630,370
Over 12 months
8,200
827,155
281,461
Total
2,439,716
1,800,537
53,362,789
33,552,669
86
Annual Report 2010
(Unit: Baht)
2010
2009
2010
2009
Unrelated parties
Not yet due
Past due
Up to 3 months
3 - 6 months
6 - 12 months
Over 12 months
Total
Less: Allowance for doubtful debts
Net
1,164,463,452
1,877,342,772
1,038,662,693
1,535,850,093
1,003,341,713
717,605,178
66,302,574
33,684,559
2,985,397,476
(24,015,497)
2,961,381,979
2,963,821,695
825,086,430
265,307,603
91,334,867
38,134,340
3,097,206,012
(19,834,516)
3,077,371,496
3,079,172,033
844,742,385
669,934,433
381,827
19,139,009
2,572,860,347
(20,764,550)
2,552,095,797
2,605,458,586
579,497,620
188,869,884
7,824,647
16,045,885
2,328,088,129
(16,506,668)
2,311,581,461
2,345,134,130
10. Short-term loan to unrelated party
As at 31 December 2010, I-Sport Co., Ltd., a subsidiary company, had short-term loan of Baht 9 million (2009:
Baht 9 million) to Siam Sport Syndicate Public Co., Ltd. which carries interest at fixed deposit rate (3 months) plus 0.25
percent per annum. This loan is due for repayment at call.
11. Inventories
(Unit: Baht)
Finished goods
Supplies
Goods in transit
Total
Allowance for diminution
Cost
in value of inventories
Inventories-net
2010
2009
2010
2009
2010
2009
815,402,657 561,810,744 (49,476,903) (38,409,482) 765,925,754 523,401,262
109,207,809 234,794,804 (2,650,056) (2,047,804) 106,557,753 232,747,000
1,480,039 21,027,321
1,480,039 21,027,321
926,090,505 817,632,869 (52,126,959) (40,457,286) 873,963,546 777,175,583
(Unit: Baht)
Cost
Finished goods
Supplies
Goods in transit
Total
2010
769,214,695
10,000,776
249,966
779,465,437
2009
390,283,262
215,889,622
16,762,790
622,935,674
Allowance for diminution
in value of inventories
Inventories-net
2010
2009
2010
2009
(46,141,494) (30,077,253) 723,073,201 360,206,009
(2,650,056) (2,047,804)
7,350,720 213,841,818
249,966 16,762,790
(48,791,550) (32,125,057) 730,673,887 590,810,617
Annual Report 2010
87
12. Other current assets
Details of other current assets are as follows:
Advance for purchase of inventories
Accrued service income
Withholding tax deducted at sources (Note 12.1)
Prepaid expenses
Sales promotion receivables
Input tax refundable
Advance for purchase of government bonds
Other accounts receivable
Others
Less: Allowance in diminution in value of sales
promotion receivables
Allowance in diminution in value of advance
for purchase of inventories
Total other current assets
(Unit: Baht)
2010
2009
2010
2009
122,268,254
181,658,173
10,080,119
38,185,996
66,347,605
90,968,702
60,443,964
141,198,103
18,859,070
66,398,183
47,454,606
26,484,233
14,439,230
15,326,607
31,326,507
229,310,304
9,969,912
140,372,034
22,067,350
115,155,518
2,075,365
2,492,963
19,895,301
19,895,301
26,300,802
33,561,051
4,178,785
1,187,660
19,774,511
62,158,107
16,966,865
20,065,954
(9,797,170)
(5,269,607)
(2,186,158)
(5,269,607)
(5,457,710)
400,624,020
(4,138,171)
871,086,413
(4,549,666)
89,728,823
(3,230,127)
275,529,663
12.1 Withholding tax deducted at sources
The balance of withholding tax deducted at sources as at 31 December 2010 and 2009, aged on years, are
summarised below.
(Unit: Baht)
Year
2010
2009
2010
2009
2005
244,299
16,109,818
6,092,690
2006
3,282,532
2007
1,613,230
1,613,230
2008
83,062,641
51,046,130
2009
17,295,998
37,129,882
9,259,363
9,259,363
2010
41,290,437
9,599,707
Total
60,443,964
141,198,103
18,859,070
66,398,183
The Company and its subsidiaries regard withholding tax deducted at sources as an asset since they have the
right to claim for refund of it. However, the net realisable value of withholding tax depends on the exercise right to claim
it, and the results of any tax audit by the Revenue officials.
During the year 2010, the Company and its subsidiaries received the refund of the withholding tax of 2005 - 2009
totaling approximately Baht 119 million (separate financial statements: withholding tax of 2005 and 2008 totaling
approximately Baht 57 million). However, the management has used judgement to assess the outcome of the refund
claims and believes that no loss will result. Therefore, no allowance for diminution in value of withholding tax deducted
at sources is recorded as at the balance sheet date.
13. Restricted bank deposits
These represent fixed deposits pledged with the banks to secure credit facilities which obtain from the banks.
88
Annual Report 2010
14. Investments in subsidiaries
Details of investments in subsidiaries as presented in separate financial statements are as follows:
(Unit: Baht)
Companyûs name
Samart Mobile Services
Co., Ltd.
(Formerly known as
Total
Paid-up capital
Shareholding percentage
2010
2009
2010
2009
Million Baht Million Baht Percent
Percent
Cost
2010
2009
Dividend
received during the year
2010
2009
490
200
125
1
490
200
125
1
97.4
100
100
100
97.4
100
100
100
43,916,713 43,916,713
219,524,872 219,524,872
124,999,958 124,999,958
999,300
999,300 239,832,000
-
27.5
2.5
100
100
27,499,983 2,499,983
416,940,826 391,940,826 239,832,000
-
14.1 Established of new companies
14.1.1 On 9 August 2007, a meeting of Board of Directors of the Company passed a resolution approving the
establishment of new companies in Thailand and overseas in order to provide international call services.
Subsequently, on 2 October 2007, the Company registered the establishment of I-Mobile Netplus Co., Ltd.
(currently name is I-Mobile Plus Co., Ltd.) with the Ministry of Commerce. The Company holds 100 percent
in this company.
However, the Company is in the process of establishing a new overseas company.
14.1.2 On 13 November 2008, a meeting of the Companyûs Board of Directors passed a resolution authorising
I-Mobile International Co., Ltd., a subsidiary company, to establish representative office in India to support
business expansion by providing sales and marketing support and appointing a mobile phone
representative to distribute mobile phones and provide mobile content.
The establishment of this representative office is currently in the process.
14.2 Transfer of 3G mobile phone network services to subsidiary company
On 12 May 2010, a meeting of the Board of Directors of the Company passed a resolution approving the
transfer of the Companyûs contract to provide 3G mobile phone network under TOT Public Company Limitedûs 3G
mobile phone network services project, named i-mobile 3GX, to I-Mobile Plus Co., Ltd. (formerly known as
çI-Mobile Netplus Co., Ltd.é), a subsidiary company. The transfer will allow the project to be managed as
a separate business. On 25 August 2010, a subsidiary company received a license to operate a type one
telecommunication business.
However, Samart I-Mobile Public Co., Ltd. is in the process of revising the related agreements to be the
name of I-Mobile Plus Co., Ltd. (formerly known as çI-Mobile Netplus Co., Ltd.é).
14.3 Change of the companyûs name and increase registered share capital
On 3 June 2010, an extraordinary meeting of the shareholders of I-Mobile Netplus Co., Ltd., a subsidiary
company, passed a resolution approving the change its companyûs name from çI-Mobile Netplus Co., Ltd.é to
çI-Mobile Plus Co., Ltd.é and resolved to increase its registered share capital from Baht 10 million (1 million
ordinary shares of Baht 10 each) to Baht 100 million (10 million ordinary shares of Baht 10 each) by issuing 9
million ordinary shares with a par value of Baht 10 each. The subsidiary company registered the change of its
name and the increase of its share capital with the Ministry of Commerce on 10 June 2010 and has called up 25
percent of the additional share capital.
Annual Report 2010
89
Subsequently, on 11 June 2010, a meeting of the Board of Directors of I-Mobile Plus Co., Ltd. (formerly
known as çI-Mobile Netplus Co., Ltd.é), a subsidiary company, resolved to call up an additional 25 percent of its
former share capital of Baht 10 million, or Baht 2.5 million.
14.4 Liquidation
On 11 October 2006, an extraordinary meeting of the shareholders of I-Mobile (Cambodia) Co., Ltd., a
subsidiary company, passed a resolution to liquidate the company. The process of registering that companyûs
dissolution and its subsequent liquidation are in progress.
15. Property, plant and equipment
(Unit: Baht)
Land
Building
Network
Furniture,
equipment fixture and
and network
office
Motor
Equipment Assets under
improvement equipment vehicles
for rent
installation
Cost
31 December 2009
- 525,817,954 734,456,823 71,105,999 22,011,162 4,723,643
Additions/Transfer in
78,777 11,433,323 135,592,217 75,739,754
9,234,601
- 201,249,158
Disposals/Transfer out
- (335,000) (45,592,972) (15,648,139)
- (63,366,619)
(158,044)
31 December 2010
78,777 11,433,323 661,075,171 764,445,561 64,692,461 22,011,162 142,606,182
Accumulated depreciation
31 December 2009
- 297,422,419 496,775,155 45,008,965 17,510,297
Depreciation for the year
432,274 60,555,308 78,000,086
9,701,209
of assets disposed and
transferred out
- (335,000) (44,158,062) (11,981,081)
- (1,133,599)
(719)
31 December 2010
432,274 357,642,727 529,483,580 42,728,374 17,510,297
Allowance for
impairment loss
31 December 2009
- 67,640,016
96,418
- 4,500,865
31 December 2010
- 67,640,016
96,418
- 4,500,865
Net book value
31 December 2009
- 160,755,519 237,585,250 26,097,034
- 4,723,643
31 December 2010
78,777 11,001,049 235,792,428 234,865,563 21,964,087
- 142,606,182
2009 (Baht 49.1 million included in cost of services, and the balance in selling expenses and administrative expenses)
2010 (Baht 60.8 million included in cost of services, and the balance in selling expenses and administrative expenses)
90
Annual Report 2010
Total
1,358,115,581
433,327,830
(124,942,730)
(158,044)
1,666,342,637
856,716,836
148,688,877
(56,474,143)
(1,134,318)
947,797,252
72,237,299
72,237,299
429,161,446
646,308,086
155,597,882
148,688,877
(Unit: Baht)
Furniture,
fixture and
office
Motor Assets under
Building equipment vehicles installation
Land
Cost
31 December 2009
Additions/Transfer in
78,777 11,433,323
Disposals/Transfer out
31 December 2010
78,777 11,433,323
31 December 2009
432,274
Accumulated depreciation of assets disposed
and transferred out
31 December 2010
432,274
Net book value
31 December 2009
31 December 2010
78,777 11,001,049
2009 (All depreciation included in selling expenses and administrative expenses)
2010 (All depreciation included in selling expenses and administrative expenses)
Total
579,155,851
71,337,661
(1,941,862)
648,551,650
47,409,561
604,892
2,290,000 204,761,328
(9,626,991) (63,366,618)
40,072,570 141,999,602
627,170,304
289,901,089
(74,935,471)
842,135,922
387,287,472
64,607,210
29,035,159
6,138,135
-
416,322,631
71,177,619
(1,523,797)
450,370,885
(8,204,600)
26,968,694
-
(9,728,397)
477,771,853
191,868,379
198,180,765
18,374,402
604,892
13,103,876 141,999,602
210,847,673
364,364,069
79,835,099
71,177,619
The Company has pledged assets at net book value approximately Baht 11.0 million (2009: Nil) as collateral
against long-term loan facilities received from commercial bank.
As at 31 December 2010, certain equipment items of the Company and its subsidiary companies have been fully
depreciated but are still in use. The gross carrying amount before deducting accumulated depreciation and allowance for
impairment loss of those assets amounted to approximately Baht 623 million (2009: Baht 569 million) (separate financial
statements: Baht 291 million, 2009: Baht 268 million).
Assets held under finance lease agreements
In 2010 its subsidiary acquired vehicles under finance lease agreements with an aggregate cost of Baht 0.8 million
(2009: Nil) (separate financial statements: Nil, 2009: Nil).
As at 31 December 2010, the Company and its subsidiary companies have vehicles acquired under finance leases
agreements, with net book value amounting to approximately Baht 6.81 million (2009: Baht 10.74 million) (separate
financial statements: Baht 5.85 million, 2009: Baht 10.11 million).
16. Prepaid IT service fee to parent company
The Company and Samart Multimedia Co., Ltd., a subsidiary company, have entered into a contract with Samart
Corporation Public Company Limited, the parent company, whereby they receive information technology center system
management services, to concerning management and security in relation to service provision. The contract is for a
period of 52 months, from 1 October 2006 to 31 January 2011.
The payment schedule is as follows:
(Unit: Baht)
Installment
Condition
Payment schedule
1
Prepaid IT service fee Within 1 May 2006
2 - 6 Prepaid IT service fee May - September 2006
7 - 58 Monthly service fee October 2006 - January 2011
Amount per period
Consolidated
Separate
financial
financial
statements
statements
41,395,000
30,345,000
4,139,500
3,034,500
4,139,500
3,034,500
Total
Consolidated
Separate
financial
financial
statements
statements
41,395,000
30,345,000
20,697,500
15,172,500
215,254,000
157,794,000
277,346,500
203,311,500
Annual Report 2010
91
During the year, the Company and its subsidiary paid a total of Baht 49.7 million (separate financial statements:
Baht 36.4 million) to their parent company in accordance with the agreement.
The outstanding balances of prepaid IT service fee to parent company as at 31 December 2010 and 2009 are as
follows:
(Unit: Baht)
2010
2009
2010
2009
Prepaid IT service fee
62,092,500
62,092,500
45,517,500
45,517,500
Less: Accumulated amortisation
(60,898,415)
(46,569,376)
(44,642,165)
(34,138,126)
Net
1,194,085
15,523,124
875,335
11,379,374
Amortisation expenses included in the income
statements for the year
14,329,039
14,329,039
10,504,039
10,504,039
As at 31 December 2010, the Company and subsidiary company have commitments under the agreement
amounting to Baht 4.1 million (separate financial statements: Baht 3.0 million).
17. Intangible assets
(Unit: Baht)
Right under the
advertising
agreement
Cost
31 December 2009
Additions
31 December 2010
Accumulated amortisation
31 December 2009
Amortisation
31 December 2010
Net book value
31 December 2009
31 December 2010
Consolidated financial statement
Right under the
Computer
distribution
software
agreement
Total
27,500,000
27,500,000
15,593,583
(241,754)
15,351,829
4,530,775
4,530,775
27,500,000
20,124,358
(241,754)
47,382,604
11,650,000
11,650,000
1,966,945
(217,326)
1,749,619
229,642
229,642
13,846,587
(217,326)
13,629,261
27,500,000
15,850,000
13,602,210
4,301,133
27,500,000
33,753,343
Rights under the advertising agreement
During the year 2009, Take A Look Co., Ltd., a subsidiary company, entered into an agreement with a company to
sell LED Screen. The installation and transfer had already been completed and such company had to make cash payment
of Baht 19.5 million and granted the right to advertise on the LED Screen with the value of Baht 27.5 million. Thus the
total sales value of the equipment was Baht 47 million. In addition, the subsidiary company was obliged to comply with
the conditions in the agreement, such as provision of equipment repair and maintenance, for a period of three years.
Subsequently, on 28 December 2009, the subsidiary company entered into a memorandum with Samart
Multimedia Co., Ltd., another subsidiary company, to transfer the rights and obligations under the LED Screen sales and
advertising agreements. Therefore, all rights and obligations under such agreements had fallen upon Samart Multimedia
Co., Ltd. since the date of entry into the memorandum of agreement which were consist of:
1)
Samart Multimedia Co., Ltd. received the airing right to promote and advertise products and services for the
Company and other two unrelated companies.
2)
Samart Multimedia Co., Ltd. was obliged to comply with the conditions in the agreements, such as provision of
equipment repair and maintenance, for a period of three years with the value of Baht 27.5 million.
92
Annual Report 2010
As a result, Samart Multimedia Co., Ltd. was required to make a payment of Baht 25.3 million to Take A
Look Co., Ltd. so Samart Multimedia Co., Ltd. recorded the Right under the advertising agreement in the
consolidated financial statements under the capital of intangible asset with the value of Baht 27.5 million.
Moreover, Take A Look Co., Ltd. and Samart Multimedia Co., Ltd. entered into a memorandum of
agreement with other shareholder of Take A Look Co., Ltd. to jointly assume responsibility for the rights, duties,
and obligations arising from Take A Look Co., Ltd. entering into the screen sales agreement. If any claim is made
or any action taken that causes Take A Look Co., Ltd. or Samart Multimedia Co., Ltd. to pay compensation or be
held responsible, the other shareholding company of Take A Look Co., Ltd. shall be jointly responsible for the
damages in proportion to its shareholding. Such contractual liability will cease on 31 December 2012.
Right under distribution agreement
During the year 2010, I-Mobile Plus Co., Ltd. (formerly known as çI-Mobile Netplus Co., Ltd.é), a subsidiary
company, entered into a distributor agreement with a company. Under the conditions of the agreement, the
subsidiary company is to pay a fee and comply with conditions stipulated in the agreement. The Company has
guaranteed the subsidiary companyûs compliance with the agreement.
18. Bank overdrafts, short-term loans from banks and trust receipts
Bank overdrafts, short-term loans from banks and trust receipts as at 31 December 2010 and 2009 consist of:
(Unit: Baht)
Interest rate
Consolidated
Separate
(percent per annum)
financial statements
2010
2009
2010
2009
2010
2009
Bank overdrafts
Short-term loans from banks
Trust receipts
Baht
US dollars
Total
6.375
2.83 - 5.75
6.13 - 6.15
1,693,427 25,824,959
1,603,576
96,250
2.4 - 5.5 1,198,618,117 1,200,973,069 1,086,215,691 995,445,975
2.70 - 4.25
1.54 - 2.90
3.25 - 5.25
1.84 - 3.25
483,514,151 1,499,107,460 483,514,151 1,463,661,142
650,723,255 93,912,951 561,874,611
2,334,548,950 2,819,818,439 2,133,208,029 2,459,203,367
Bank overdrafts of the Company are secured by the pledge of some bank deposits. Bank overdrafts of subsidiary
companies are secured by the Company.
Some short-term loans from banks and trust receipts of the Company are secured by the pledge of some bank
deposits and cross-guaranteed by the Company and subsidiary companies.
Short-term loans from banks and trust receipts of the subsidiary companies are secured by the Company, the
pledge of some bank deposits of the Company and cross-guaranteed by the Company and subsidiary companies.
19. Short-term loan from unrelated party
As at 31 December 2010, Take A Look Co., Ltd., a subsidiary company, had obtained short-term loan of Baht 0.5
million (2009: Baht 12.6 million) from Master Ad Public Co., Ltd. which carries interest at Minimum Loan Rate (MLR) plus
1 percent per annum. This loan is due at call.
Annual Report 2010
93
20. Long-term loans from bank
As at 31 December 2010 and 2009 the outstanding balance of long-term loans from banks consisted of:
(Unit: Baht)
Consolidated financial statements/
2010
2009
In March 2010, the Company entered into an agreement with a local commercial
bank granting a new loan amounting to Baht 12.42 million, on which interest is
charged at the Minimum Loan Rate (MLR) minus 1.25 percent per annum. The loan
is repayable in 120 monthly installments, with the first of these due in April 2010 and
is to be repaid in full within March 2020.
10,751,396
Total
10,751,396
Less: Current portion
(1,066,973)
Long-term loans from bank - net
9,684,423
This loan is secured by mortgage of an apartment unit and the transfer of the beneficiary rights under insurance
policy for an apartment unit to the bank.
Movements in the long-term loan account during the year ended 31 December 2010 are summarised below.
(Unit: Baht)
Consolidated financial statements/
Balance as at 1 January 2010
Add: Additional borrowings
11,510,000
Less: Repayment
(758,604)
10,751,396
21. Liabilities under finance lease agreements
Liabilities under finance lease agreements
Less: Deferred interest expense
Total
Less: Portion due within one year
Liabilities under finance lease agreements - net
(Unit: Baht)
2010
2009
2010
2009
6,238,114
7,747,846
5,530,688
7,699,108
(150,798)
(459,627)
(118,333)
(459,437)
6,087,316
7,288,219
5,412,355
7,239,671
(5,684,037)
(1,875,864)
(5,412,355)
(1,827,316)
403,279
5,412,355
5,412,355
The Company and its subsidiaries entered into the finance lease agreements with leasing companies for rental of
the motor vehicles for use in their operation, whereby they are committed to pay rental on monthly basis. The terms of
the agreements are generally between 1 and 3 years.
As at 31 December 2010, Future minimum lease payments required under the finance lease agreements were as
follows:
(Unit: Baht)
Less than 1 year
1-3 years
Total
Future minimum lease payments
5,823,416
414,698
6,238,114
Deferred interest expenses
(139,379)
(11,419)
(150,798)
Present value of future minimum lease payments
5,684,037
403,279
6,087,316
94
Annual Report 2010
Future minimum lease payments
Deferred interest expenses
Present value of future minimum lease payments
(Unit: Baht)
Less than 1 year
5,530,688
(118,333)
5,412,355
22. Other current liabilities
Details of other current liabilities are as follows:
Accrued expenses
Other payables
Unearned revenue from telephone service
Corporate income tax payable
Advance received from customers
Others
Total other current liabilities
(Unit: Baht)
2010
2009
2010
2009
148,394,050
104,277,342
99,854,455
38,477,336
97,652,527
87,783,829
66,139,482
66,816,880
9,870,119
1,350,747
9,870,119
1,350,747
1,890,383
217,665
244,981
257,555
31,416,718
54,479,352
29,173,211
35,428,128
289,468,778
248,366,490
205,037,267
142,073,091
23. Warrants
On 24 April 2008, the Annual General Meeting of the Companyûs shareholders passed a resolution to issue 140
million warrants, the offering price per unit is Baht 0, to the Companyûs directors and the employees of the Company and
its subsidiaries. The exercise ratio is 1:1 and the exercise price is Baht 2 per 1 ordinary share. Warrants to be allocated
to the Companyûs directors and the employee of the Company and its subsidiaries will be divided into 5 certificates 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 in the following detail. Each warrant holders can split exercise or fully exercise their
right of the amount allocated for each certificate.
Certificate No. 1 will represent 10% of total number of allocated warrants which is entitled to exercise since the first day
of the exercise period until the expired date of warrants.
Certificate No. 2 will represent 15% of total number of warrants allocated which is entitled to exercise after the end of
the first year that the warrants are issued until the expired date of warrants.
the second year that the warrants are issued until the expired date of warrants.
the third year that the warrants are issued until the expired date of warrants.
the fourth year that the warrants are issued until the expired date of warrants.
On 27 April 2009, the Annual General Meeting of the Companyûs shareholders passed a resolution to approve the
revision of the exercise price of the warrants offering to the Companyûs directors and the employees of the Company and
its subsidiaries from Baht 2 per share to be Baht 1.7 per share.
On 29 May 2009, the Company issued 100,250,000 warrants to the Companyûs directors and employees of the
Company and its subsidiaries at Baht 0 per unit, with 39,750,000 warrants being cancelled as a condition of the warrant
issue. The warrants have an exercise ratio is 1:1, are exercisable at a price of Baht 1.7 per share, and have an exercise
Annual Report 2010
95
period of five years period from the issue date, expiring on 28 May 2014. The warrants are exercisable on the 15th of the
last month of each quarter throughout their terms, from 15 June 2009 to 28 May 2014.
Movement of warrants for the year ended 31 December 2010 are summarised below.
(Number of unit: units)
Balance as at
1 January 2010
48,800,000
51,450,000
100,250,000
Warrants issuance to
Directors
Employees
Total
Exercised during
Balance as at
the year
31 December 2010
(750,000)
48,050,000
(55,000)
50,900,000
(1,300,000)
98,950,000
24. Statutory reserve
Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside a
statutory reserve at least 5 percent of its net income after deducting accumulated deficit brought forward (if any), until the
reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividend distribution.
25. Other income
Details of other income are as follows:
Interest income
Dividend income from subsidiaries (Note 14)
Gain on exchange
Gain on disposal of short-term investments in
trading securities (Note 7.1)
Gain on change in value of short-term investments
Gain on disposal of investment in subsidiary company
Gain on sales of equipment
Reversal of allowance for diminution in value of inventories
Others
Total other income
96
Annual Report 2010
(Unit: Baht)
2010
2009
2010
2009
67,416,122
81,497,270
20,136,450
94,215,528
4,684,821
7,425,475
25,517,072
36,470,599
239,832,000
884,138
10,207,850
23,643,497
8,233,644
41,426,517
-
37,468,101
-
828,077
23,112,201
138,351,876
54,126,087
45,511,537
71,442,352
270,210,571
1,276,589
132,388,835
480,262,544
54,126,087
2,945,943
108,842,148
304,833,949
26. Other expenses
Details of other expenses are as follows:
(Unit: Baht)
2010
2009
2010
2009
Loss on change in value of short-term investments in
trading securities (Note 7.1)
Loss on disposal of short-term investments in
trading securities
Provision for diminution in value of inventories
Reserve for doubtful accounts
Others
Total other expenses
11,926,830
-
7,347,892
-
16,822,073
10,168,232
2,796,691
41,713,826
1,852,822
2,671,542
73,001
8,066,825
12,664,190
16,666,494
2,493,973
26,508,359
1,852,822
297,769
2,150,591
27. Expenses by nature
Significant expenses by nature are as follow:
Marketing expenses
Salaries and wages and other employee benefits
Depreciation and amortisation
Rental expenses from operating lease agreements
Loss on change in value of short-term investments
Loss on disposal of short-term investments in
trading securities
Changes in inventories of finishes goods
(Unit: Baht)
2010
2009
2010
2009
785,478,380
823,048,877
322,057,955
174,832,709
337,572,556
325,531,131
224,225,287
209,085,588
186,308,804
155,597,882
71,177,619
79,835,099
112,050,470
106,937,502
91,779,658
93,257,344
11,926,830
-
7,347,892
-
(108,457,636)
1,852,822
876,455,679
(156,529,763)
1,852,822
704,133,304
28. Finance cost
(Unit: Baht)
2010
2009
2010
2009
Interest expense on:
Bank loans, overdrafts and trust receipts
Loans from related parties
Liabilities under finance leases and others
Total interest expenses
Bank charges
Total finance cost
43,093,376
45,479,974
478,678
89,052,028
17,347,200
106,399,228
126,275,794
826,148
650,052
127,751,994
14,128,186
141,880,180
73,924,528
6,767,839
461,248
81,153,615
11,444,149
92,597,764
105,237,120
15,384,620
629,853
121,251,593
8,668,903
129,920,496
29. Earnings per share
Basic earnings per share are calculated by dividing the net income for the year by the weighted average number
of ordinary shares in issue during the year.
Annual Report 2010
97
Diluted earnings per share is calculated by dividing net income for the year by the total sum of the weighted average
number of ordinary shares in issue during the year plus the weighted average number of ordinary shares which would need
to be issued to convert all dilutive potential ordinary shares into ordinary shares. The calculation assumes that the
conversion took place either at the beginning of the year or on the date the potential ordinary shares were issued.
29.1 Weighted average number of ordinary shares
As at 31 December 2010 and 2009, the weighted average number of ordinary shares in the consolidated
and separate financial statements are calculated as follow:
(Unit: Thousand shares)
Consolidated /
2010
2009
Balance brought forward
4,300,000
4,300,000
Add: The weighted average number of ordinary shares in issue during the year
360
Weighted average number of ordinary shares
4,300,360
4,300,000
29.2 Reconciliation of diluted earnings per share
Weighted average number
Earnings
Net income
of ordinary shares
per share
2010
2009
2010
2009
2010
2009
Thousand Thousand Thousand Thousand
Baht
Baht
Baht
Baht
Shares
Shares
Net income attributable equity holders of the parent
Effect of dilutive potential ordinary shares
Warrants issuance 98,950,000 warrants
(2009: 100,250,000 warrants)
Net income of ordinary shareholders assuming the
conversion of warrants to ordinary shares
134,784
115,554
4,300,360
4,300,000
0.031
0.027
-
-
15,824
-
-
-
134,784
115,554
4,316,184
4,300,000
0.031
0.027
Weighted average number
Net income
of ordinary shares
2010
2009
2010
2009
Thousand Thousand Thousand Thousand
Baht
Baht
Shares
Shares
Net income attributable equity holders of the parent
Effect of dilutive potential ordinary shares
Warrants issuance 98,950,000 warrants
(2009: 100,250,000 warrants)
Net income of ordinary shareholders assuming the
conversion of dilutive potential ordinary shares
98
Annual Report 2010
Earnings
per share
2010
Baht
2009
Baht
160,653
21,331
4,300,360
4,300,000
0.037
0.005
-
-
15,824
-
-
-
160,653
21,331
4,316,184
4,300,000
0.037
0.005
30. Dividends
(Unit: Baht)
Approved by
2009
Final dividend from 2008 income
Less: Interim dividend paid in 2008
Total for 2009
2010
Final dividend from 2009 income
Total for 2010
Annual General Meeting of the
shareholders on 27 April 2009
Annual General Meeting of the
shareholders on 27 April 2010
Dividend
Total dividends per share
193,500,000
(150,500,000)
43,000,000
86,000,000
86,000,000
Paid on
0.05
(0.04) 26 November 2008
0.01 20 May 2009
0.02 13 May 2010
0.02
31. Promotional privileges
Brain Source Co., Ltd., a subsidiary company, has been granted promotional privileges approved by the Board of
Investment under the Thai Investment Promotion Act B.E. 2520, for research and development of software, under
certificate No. 1690(7)/2550 dated 20 July 2007. Subject to certain imposed conditions, the main privileges include the
following:
a)
Exemption from corporate income tax on net income from promoted operations for a period of 8 years
commencing as from the date of first earning operating income (commencing from 1 August 2007 until 31 July
2015). Furthermore, accumulated losses incurred during the corporate income tax exemption period, the
subsidiary is allowed to utilise the losses as a deduction against net income for a period of 5 years after the expiry
of the tax exemption period, whether from any one year or from several years.
b)
Exemption from income tax on dividends paid from the income of the promoted operations for which corporate
income tax is exempted, throughout the corporate income tax exemption.
c)
Exemption from import duty on imported machinery for use in production as approved by the Board until 20
January 2010.
The subsidiary has to comply with certain conditions and restrictions specified under the promotion certificate.
Service income of the subsidiary amounting to approximately Baht 248 million for the year ended 31 December
2010 (2009: Baht 119 million) was revenues from BOI promoted activities.
32. Segment information
The Company and its subsidiariesû business operations involve two principal segments: Mobile Business and
Infotainment and Multimedia. These operations are carried on two geographical segments: Domestic and Foreign. Below
is the consolidated financial information of the Company and its subsidiaries for the years ended 31 December 2010 and
2009 by segment.
Annual Report 2010
99
32.1 The results of operations separated by type of business
Foreign
Mobile Business
2010
2009
Sales and service income
Sales and service income from third parties
- Local sales and service income
- Overseas sales and service income
Sales and service income from related parties
Total sales and service income
Cost of sales and service
Gross profit
Unallocated income (expense):
Other income
Selling expenses
Administrative expenses
Management expenses
Other expenses
Financial expenses
Minority interest in net loss of subsidiaries
Net income
1,123
3,706
4,829
4,623
206
1,138
2,884
4,022
3,871
151
Mobile Business
2010
2009
5,816
140
924
6,880
5,795
1,085
6,293
523
965
7,781
6,915
866
Domestic
Infotainment Elimination of interand Multimedia segment revenues Consolidated
2010
2009
2010
2009
2010
2009
899
9
908
757
151
800
1
801
689
112
(4,631)
(4,631)
(4,827)
196
(3,835)
(3,835)
(4,055)
220
6,715
1,263
8
7,986
6,348
1,638
7,093
1,661
15
8,769
7,420
1,349
138
(1,147)
(317)
(22)
(42)
(106)
(7)
135
270
(982)
(353)
(21)
(13)
(142)
(3)
11
116
32.2 Assets and liabilities separated by business segment are as follows:
Foreign
Mobile Business
2010
2009
Assets
Inventories - net
Equipment - net
Others
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Mobile Business
2010
2009
Domestic
Infotainment
and Multimedia
Eliminiated
2010
2009
2010
2009
633
160
7
205
1,005
671
175
12
226
1,084
3,374
734
385
3,083
7,576
3,189
606
237
3,936
7,968
84
255
413
752
82
182
482
746
(1,127)
(21)
(2,751)
(3,899)
(863)
(3)
(2)
(2,792)
(3,660)
2,964
873
647
950
5,434
3,079
778
429
1,852
6,138
1,062
1,062
1,104
1,104
4,425
11
4,436
4,920
10
4,930
426
426
426
426
(2,909)
(2,909)
(2,683)
(2)
(2,685)
3,004
11
3,015
3,767
8
3,775
Transfer prices between business segments are set out in Note 8 to the financial statements.
100
Annual Report 2010
Consolidated
2010
2009
33. Provident fund
The 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 2010, the
Company and its subsidiary companies contributed Baht 8.7 million (separate financial statements: Baht 6.4 million)
(2009: Baht 6.5 million, separate financial statements: Baht 5.5 million) to the fund.
34. Commitments and contingent liabilities
As at 31 December 2010, the Company and its subsidiaries have commitments and contingent liabilities other
than those disclosed in other notes as follows:
34.1 Operating lease commitments
The Company and its subsidiaries have entered into several lease agreements in respect of the lease of
office building space and motor vehicles. The terms of the agreements are generally between 1 and 5 years.
As at 31 December 2010, future minimum lease payments required under these non-cancellable operating
leases contracts were as follows:
(Unit: Million)
Currency
Consolidated
Separate
Baht
Payable within:
Less than 1 year
92.36
60.97
1 to 5 years
34.66
24.89
Malaysian Ringgit
Payable within:
Less than 1 year
0.21
US Dollars
Payable within:
Less than 1 year
0.11
Hong Kong Dollars
Payable within:
Less than 1 year
0.06
1 to 3 years
0.09
34.2 Guarantees
34.2.1 Bank guarantees
As at 31 December 2010, there were outstanding bank guarantees issued by banks on behalf of the
Company and its subsidiaries of approximately Baht 24.67 million (separate financial statements: Baht
13.09 million), in respect of the normal course of certain performance bonds as required in their business.
The details of bank guarantees are as follows:
Consolidated
Performance guarantees
Guarantee electricity use, among others
24.21
0.46
24.67
Separate
12.93
0.16
13.09
Annual Report 2010
101
34.2.2 Guarantees to related parties
1.
As at 31 December 2010, the Company has contingent liabilities in respect of the guarantees of
subsidiariesû credit facilities provided to banks as follows:
Guaranteed
facilities
148.30
45.00
114.39
20.00
151.50
Samart Multimedia Co., Ltd. and
(joint use the same facilities with the Company)
10.00
Samart Mobile Services Co., Ltd.,
I-Mobile International Co., Ltd.,
I-Mobile Inter trade Co., Ltd. and
1,727.40
2,985.00
Samart I-Mobile (Hong Kong) Ltd.,
Samart Mobile Services Co., Ltd. and
495.00
150.00
140.00
These guarantees are effective for as long as the underlying obligations have not been discharged by
those subsidiaries.
2.
As at 31 December 2010, the Company and its subsidiaries have cross-guaranteed credit facilities
granted by the commercial banks to the Company and its subsidiaries as follows:
Cross guaranteed
Cross - guaranteed by
credit facilities Facilities used
The Company, I-Mobile International Co., Ltd. and
2,985
1,155.98
The Company and I-Mobile Inter trade Co., Ltd.
(This is part of the credit facilities of Baht 2,985 million)
2,000
61.40
The Company, I-Mobile International Co., Ltd.,
Samart Mobile Services Co., Ltd. and Samart I-Mobile
(Hong Kong) Ltd.
1,000
387.18
The credit facility of Baht 2,985 million mentioned above in 1, which the Company has guaranteed
for its subsidiaries, is part of the credit facilities of Baht 2,985 million, jointly used by the Company and
subsidiaries.
102
Annual Report 2010
34.3 Commitments in uncalled portions of investments
As at 31 December 2010, the Company and its subsidiary have outstanding commitment totaling in
respect of uncalled portions of investments in their subsidiaries as follows:
Amount
The local subsidiary companies
Baht
169 million
The overseas subsidiary company
Malaysian ringgit
3 million
34.4 Other commitments
34.4.1 Samart Mobile Services Co., Ltd., a subsidiary company, has been granted approval by The Posts
and Telegraph Department which is currently transformed to be The National Broadcasting and
Telecommunications Commission (NBTC) to operate and provide paging services to government units
and state enterprises for a period of 20 years as from 21 February 1995. The subsidiary company has
to pay annual fees at a rate specified in the agreement, or totaling Baht 70 million. In addition, the
ownership of the pagers, paging control terminals, and transmitters have to be transferred to The
Posts and Telegraph Department as soon as their installation is completed. On 6 September 1996, the
subsidiary company received approval to provide its paging services to the public.
On 16 July 2003, the subsidiary company notified The Posts and Telegraph Department of their wish to
terminate the agreement to provide paging services to government units and state enterprises.
On 1 October 2003, The Posts and Telegraph Department granted approval the termination of such
agreement. For the annual fee payable since 2000 until the termination date of the agreement is in the
process of consideration by the Cabinet. In addition, the subsidiary company must comply with the terms
and conditions stated in the agreement.
On 4 March 2010, the subsidiary company returned the remaining building to the Post and
Telegraph Department, which has changed its name to The National Broadcasting Telecommunication
Commission (NBTC). Subsequently, on 30 August 2010, the subsidiary company was informed that it
had complied with the terms and conditions stated in the agreement and had no further obligations, In
addition, the collateral was returned to the subsidiary.
34.4.2 Samart Multimedia Co., Ltd., a subsidiary company, entered into an agreement with the TOT Public
Company Limited to provide an Audiotext System for a period of 15 years, commencing 29 September
1999. The subsidiary company is obliged to comply with certain conditions as stated in the agreement and
has to pay a network connection fee of Baht 1 million per annum.
34.4.3 On 27 November 2009, the Company entered into a memorandum of understanding relating to the project
for 3G mobile phone network services testing with TOT Public Company Limited in support of the
objective of providing wholesale and retail 3G mobile phone network services through the Wideband
Code-Division Multiple Access (WCDMA) system. The memorandum of understanding expires on 30
November 2010 and in the process of approval for an extension until 31 August 2011. Under the
memorandum of understanding, the Company is obliged to comply with certain conditions and pay fees
for the testing project as stated in the memorandum of understanding.
34.5 Contingent liabilities
In August 2008, Samart I-Mobile (Hong Kong) Limited, a subsidiary company, received a letter from the
Inland Revenue Department of Hong Kong (çIRDé) questioning the deductibility of consultancy fees and
management fees totaling USD 6.1 million and USD 1.5 million respectively, paid to I-Mobile International Co., Ltd.,
another subsidiary company, in relation to the 2007 income tax return. Management of the subsidiary had
submitted a reply letter to IRD in June 2009 to provide information in relation to the deductibility of consultancy
fees and management fess in income tax return. In addition, the IRD issued another letter in December 2009 to
request further information regarding the consultancy fees and management fees for the year 2006, 2007 and
2008. Response from IRD has not yet been received. However, the management are of the opinion that as
the consultancy fee and management fee are related to the business activities and, therefore, should be fully
deductible for income tax purposes, no additional income tax provision or related expenses is required for the
year 2006, 2007 and 2008.
Annual Report 2010
103
During the year 2006, 2007 and 2008, Samart I-Mobile (Hong Kong) Limited paid consultancy fees and
management fees to I-Mobile International Co., Ltd. totally USD 15.75 million.
The maximum tax exposure would be 17.5% on the amount of consultancy fees and management fees.
However, as at 31 December 2010, the examination has not yet finalised and the management of subsidiary
believe that there is no significant losses will be incurred as a result of the above matter. Therefore no provision
has been made against the contingent liabilities in the account.
35. Financial instruments
35.1 Financial risk management
The Company and its subsidiariesû financial instruments, as defined under Thai Accounting Standard No.
107 çFinancial Instruments: Disclosure and Presentationsé, principally comprise cash and cash equivalents, trade
accounts receivable, loans, investments, and short-term loans. The financial risks associated with these financial
instruments and how they are managed are described below.
Credit risk
The Company and its subsidiaries are exposed to credit risk primarily with respect to trade accounts
receivable, loans and other receivable. The Company and its subsidiaries manage the risk by adopting appropriate
credit control policies and procedures and therefore do not expect to incur material financial losses. In addition,
the Company and its subsidiaries do not have high concentration of credit risk since they have a large customer
base. The maximum exposure to credit risk is limited to the carrying amounts of receivables, loans and other
receivables as stated in the balance sheet.
Interest rate risk
The Company and its subsidiariesû exposure to interest rate risk relates primarily to their cash at banks,
bank overdrafts, trust receipts, short-term and long-term borrowings, and liabilities under finance lease agreements.
However, since most of the Company and its subsidiariesû financial assets and liabilities bear floating interest rates
or fixed interest rates which are close to the market rate, the interest rate risk is expected to be minimal.
Significant financial assets and liabilities as at 31 December 2010 classified by type of interest rates are
summarised in the table below, with those financial assets and liabilities that carry fixed interest rates further
classified based on the maturity date.
Fixed interest rates
NonWithin
Over
Floating
interest
1 year
1-5 years 5 years
interest rate bearing
(Million Baht)
Financial Assets
Short-term investments in
trading securities
Fixed deposit
Amounts due from and
advance to related parties
Short-term loans to
related parties
Sales promotion
receivables - net
Other receivable
104
Annual Report 2010
Total
Interest rate
(% p.a.)
-
-
-
146.2
1.1
147.3
0.25, 0.90, 1.05
100.7
-
-
-
-
102.1
2,963.8
102.1
100.7
2,963.8
0.50
-
-
-
-
-
5.4
5.4
-
-
-
-
9.0
-
9.0
Fixed deposit rate
(3 months) +0.25
100.7
-
-
104.5
259.7
21.5
26.3
3,120.2
21.5
26.3
104.5
3,480.6
0.90, 0.75, 0.825
NonOver
Floating
interest
5 years
(Million Baht)
Within
1 year
Financial liabilities
Bank overdrafts
Loans from banks
Trust receipts
- Baht
- US Dollars
Amounts due to and advance
from related parties
unrelated party
Other payable
Long-term loan from bank
Liabilities under finance
lease agreements
1-5 years
Sales promotion receivables
- net
Other receivable
Investments
Interest rate
(% p.a.)
1,186.4
-
-
1.7
12.2
-
1.7
1,198.6
6.375
2.83 -5.75
483.5
650.7
-
-
-
-
369.6
483.5
650.7
369.6
2.70 - 4.25
1.54 - 2.90
-
-
-
-
-
3.5
3.5
-
-
-
-
0.5
10.8
97.7
-
0.5
97.7
10.8
MLR+1
MLR-1.25
2.15, 4.59
2,320.6
6.1
6.1
-
25.2
470.8
6.1
2,822.7
NonWithin
Over
Floating
interest
1 year
1-5 years 5 years
(Million Baht)
Financial Assets
Short-term investments in
trading securities
Fixed deposit
Amounts due from and
advance to related parties
Short-term loans to
related party
Total
Total
Interest rate
(% p.a.)
-
-
-
37.5
0.9
38.4
0.25, 0.90, 1.05
100.7
-
-
-
-
14.9
2,605.5
14.9
100.7
2,605.5
0.50
-
-
-
-
-
421.2
421.2
-
-
-
-
541.1
-
541.1
Cost of fund
+ 0.25
100.7
-
-
102.9
681.5
7.8
4.2
416.9
3,471.4
7.8
4.2
102.9
416.9
4,253.6
0.90, 0.75, 0.825
-
Annual Report 2010
105
NonOver
Floating
interest
5 years
(Million Baht)
Within
1 year
Financial liabilities
Bank overdrafts
Loans from banks
Trust receipts
- Baht
- US Dollars
Amounts due to and advance
from related parties
related parties
Other payable
Long-term loan from bank
Liabilities under finance
lease agreements
1-5 years
Total
Interest rate
(% p.a.)
1,074.0
-
-
1.6
12.2
-
1.6
1,086.2
6.375
2.83 - 5.75
483.5
561.9
-
-
-
-
913.6
483.5
561.9
913.6
2.70 - 4.25
1.54 - 2.90
-
-
-
-
-
173.7
173.7
-
-
-
-
106.6
-
-
-
-
10.8
66.1
-
5.4
2,124.8
-
-
131.2
1,153.4
106.6 Fixed deposit rate
(3 months) + 0.25
66.1
10.8
MLR-1.25
5.4
3,409.4
4.59
Foreign currency risk
The Company and its subsidiariesû exposure to foreign currency risk arise mainly from trading transactions
that are denominated in foreign currencies. The Company and its subsidiary seek to reduce this risk by entering
into forward exchange contracts when it considers appropriate. Generally, the forward contracts mature within
one year.
The balances of financial assets and liabilities denominated in foreign currencies as at 31 December 2010
are summarised below.
Currency
Assets
US dollars
Liabilities
US dollars
Euro
Consolidated
Separate
financial statements financial statements
(Million)
(Million)
Exchange rate as at
31 December 2010
(Baht per unit of foreign currency)
24.23
6.17
30.0063
23.85
0.01
9.99
-
30.2963
40.2464
The majority of the liabilities are due within one year.
As at 31 December 2010, the Company and its subsidiaries have the following outstanding forward
exchange contracts and currency option contracts:
106
Annual Report 2010
Forward exchange contracts
The Company and its subsidiaries in Thailand
Consolidated
Separate
Foreign currency
financial statements financial statements
(Million)
(Million)
Amount bought
US dollars
Amount sold
US dollars
Subsidiary in Malaysia
Foreign currency
Amount bought
Us dollar
Maturity date
Forward
contracts rate
(Baht per unit of
foreign currency)
2.98
2.94
January - July 2011 31.2794 - 32.0275
15.25
6.83
February - July 2011 29.6750 - 32.2775
Amount
(Million)
Maturity date
Forward contracts rate
(Malaysian ringgit per unit of
foreign currency)
2.93
January - May 2011
3.1070 - 3.2140
Currency option contracts
Sell put option
currency
Sold amount
(Million)
US dollars
2.0
Strike rate
(Baht per unit of
foreign currency)
32.10 - 32.15
Delivery date
January 2011
If, on the maturity date, the reference exchange rate is lower than strike rate, the Company is obligated to
buy US dollars at strike rate.
As at 31 December 2010, fair value of sell put option contract is lower than trade date of Baht 3.95 million.
35.2 Fair values of financial instruments
Since the majority of the Company and its subsidiariesû financial instruments are short-term in nature, 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
nowledgeable, 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.
36. Capital management
The primary objective of the Companyûs capital management is to ensure that it has an appropriate financial
structure and preserves the ability to continue its business as a going concern.
According to the balance sheet as at 31 December 2010, Groupûs debt-to-equity ratio was 1.25:1 (2009: 1.60:1)
and the Companyûs was 1.85:1 (2009: 2.10:1).
Annual Report 2010
107
37. Subsequent events
37.1 On 4 January 2011, I-Sport Co., Ltd., a subsidiary company, entered into an agreement with an overseas company
to acquire a football broadcast license for a period of 3 years, commencing on 4 January 2011. The subsidiary
company is obliged to comply with conditions as stated in the agreement and has commitments under the
agreement amounting to USD 0.16 million.
37.2 On 7 February 2011, the Company issued its plans for the transfer of the 3G mobile phone services business
from the Company to I-Mobile Plus Co., Ltd. (formerly known as çI-Mobile Netplus Co., Ltd.é), a subsidiary
company. With effect from 16 February 2011, the Company will transfer to this subsidiary company its rights and
responsibilities with respect to the provision of 3G mobile services under a memorandum of understanding
relating to the project for 3G mobile phone network services testing. In addition, the Company, its subsidiary
company and TOT Public Company Limited will sign an agreement to transfer the rights and responsibilities under
the above memorandum of understanding in the future.
38. Reclassification
Certain amounts in the financial statements for the year ended 31 December 2009 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 follows:
(Unit: Baht)
μ“¡∑’Ë ®—¥ª√–‡¿∑„À¡à As reclassified As previously As reclassified As previously
reported
reported
Trade accounts payable - unrelated parties
678,748,579
248,366,490
2,058,486
669,679,794
256,084,528
3,409,233
142,073,091
4,353,575
140,722,344
5,704,322
39. Approval of financial statements
These financial statements were authorised for issue by the Companyûs authorised directors on 23 February 2011.
108
Annual Report 2010
Audit Fee
1.
Audit Fee
In 2010, the Company and subsidiaries paid audit fee to the Companyûs auditor, Ernst & Young Office Limited,
signed by Ms. Siriwan Suratepin amounting to Baht 3,080,000 and out of pocket expenses relating to audit work such
as traveling expenses, photo copy expenses and others totaling Baht 186,534. In addition, the Companyûs subsidiaries
in other countries paid audit fees to auditors, Ernst & Young Office Limited, in their countries.
2.
Non-Audit Fee
2.1 Brain Source Co., Ltd., a 99.99% stake hold by the Company, paid professional fee to Ernst & Young Office Limited
for the review of compliance with conditions stipulated in the investment promotion certificate for the period ended
December 31, 2010 submitted to BOI totaling Baht 120,000.
2.2 Take A Look Co., Ltd., Samart Multimedia Co., Ltd. holds a 66.67% stake, paid professional fee to Ernst & Young
Office Limited for the completion of questionnaires provided for the preparation of consolidated financial
statements of the other shareholder totaling Baht 40,000.
Annual Report 2010
109
Age
1. Prof.Suphachai Phisitvanich
- Chairman of the Board
- Audit Committee Member
71
2. Dr.Chotivid Chayavadhanangkur 64
- Independent Director
- Chairman of Audit
Committee
- Chairman of the Corporate
Governance Committee
- Nominating and
Compensation
Committee Member
Education
% of
Shareholding Relationship
- Ph.D. honorary in Accounting,
Thammasart University
- Master Degree in MBA,
Ohio State University, U.S.A
- Bachelor degrees in Accounting and
Commerce,
Thammasart University
- National Defence College Course
(Class 32),
National Defence College of Thailand
- Director Certification Program (DCP),
Thai Institute of Directors Association
(IOD)
0.075
- Doctorate of Ph.D. in Electrical
Engineering, University of Minnesota,
USA
- Master Degree in M.S. Electrical
Engineering, University of Minnesota,
USA
- Bachelor Degree in Engineering
(1st Class Honour),
Chulalongkorn University
- Director Accreditation Program (DAP),
(IOD)
-
-
-
During
Working Experience last 5 years
Position
2005 - Present Chairman of the Board of Directors
and Independent Director
2009 - Present Audit Committee Member
2009 - Present Independent Director
and Chairman of the Audit
Committee
1994 - Present Director, Chairman of the Audit
Committee and Chairman of the
Corporate Governance and
2009 - Present
2003 - 2009
2003 - Present
2008 - Present
2005 - Present
2005 - Present
2005 - Present
2003 - Present
Chairman of the Corporate
Nominating and Compensation
Committee Member
Director
Director
Chairman of the Board of Directors
Company
Aira Capital Co., Ltd.
CP All Plc.
Aira Securities Plc.
Sena Golden Sand Co., Ltd.
Matching Studio Plc.
Bangkok Expressway Plc.
Greens Spot Co., Ltd.
BITIC Co., Ltd.
Bangkok Servex Co., Ltd.
Annual Report 2010
Name-Surname / Position
Directors and Management
110
Directors and Management as of December 31, 2010
Age
3. Mr. Kunthit Arunyakananda
45
- Independent Director
- Audit Committee Member
- Chairman of the Nominating
and Compensation
Committee
- Corporate Governance
Committee Member
Education
- Mini MBA Certificate, Business
Administration, Thammasat University
- Bachelor Degree in Accounting,
The Rajamongkol Institute of Technology
- Director Certification Program (DCP),
(IOD)
% of
-
During
2009 - Present
2008 - 2009
2003 - Present
2008 -Present
2005 -2008
4. Mr. Charoenrath Vilailuck
- Authorized Director
51
- Bachelor Degree in Electrical Engineering,
The University of Newcastle, Australia
- National Defence Course for the
joint State-Private Sectors (Class 18),
- Director Certification Program (DCP) and
Director Accreditation Program (DAP),
(IOD)
-
2001 - Present
Mr. Watchaiûs 2005 - Present
and
2005 - 2006
Mr. Thanananûs
elder brother 2003 - 2005
1993 - Present
2008-Present
1995 - Present
2006 -2008
2005 - 2006
2004 - 2006
1995 - Present
1993-Present
Annual Report 2010
Present
Position
Company
Chairman of the Nominating and Samart I-Mobile Plc.
Compensation Committee
Committee Member
Independent Director and
Committee Member
Chairman of the Corporate
Director
Sam Nak-Ngan A.M.C. Co., Ltd.
Director
Committee Member
Chairman of the Board of Directors Samart I-Mobile Plc.
Director
Samart Corporation Plc
Chairman of the Risk
Management Committee
Executive Chairman & CEO
Vice Chairman of Risk
Committee Member
Chairman of Risk Management
Committee
Director
Samart Telcom Plc.
Director
Vilailuck International Holding
Co., Ltd.
Director
Subsidiaries and Related
Companies (as shown in The
Position of Directors of the
Company in Subsidiaries and
Related Companies)
111
Annual Report 2010
Age
5. Mr.Watchai Vilailuck
- Executive Chairman
- Chairman of the Risk
- Chief Executive Officer
48
-
-
-
6. Mr.Thananan Vilailuck
- Executive Director
- Risk Management
Committee Member
- President
44
% of
During
Bachelor Degree in Accounting,
0.011 Mr Charoenrathûs 2003 - Present
Thammasat University
younger brother
Certificate of Strategic Planning &
and
2005 - Present
Implementation Program,
Mr.Thanananûs
University of Michigan Business School
elder brother 2005 - 2006
(Executive Education Center), USA
Certificate of Management Program
1993 - Present
from United Kingdom
2004 - Present
National Defence Course for the
joint State-Private Sectors (Class 21),
2000 - Present
2000 - Present
Leadership Program (Class 11),
1995 - Present
Capital Market Academy
1993- Present
Director Accreditation Program (DAP),
Present
(IOD)
Education
- Master Degree in Engineering,
University of Florida, USA
- Bachelor Degree in Engineering,
Kasetsart University
(IOD)
-
Mr. Charoenrathûs 2003 - Present
and
2006 - Present
Mr. Watchaiûs 2005 - Present
younger brother
2003 - 2006
2007 - Present
2006 - Present
1993-Present
Present
Position
Company
Director and Executive Chairman Samart I-Mobile Plc.
& CEO
Chairman of the Risk
Committee Member
Director
Chief Operating Member of
President
Executive Chairman
Samart Telcom Plc.
Director
Samart Telcom Plc.
Director
Co., Ltd.
Director
Related Companies)
Director and Executive Director
President
Risk Management
Committee Member
Deputy Chief Operating OfficerSamart I-Mobile Plc.
Mobile Business
Executive Director
President of Mobile Business LOB Samart Corporation Plc.
Director
Co., Ltd.
Director
Related Companies)
112
7. Mr. Jong Diloksombat
- Executive Director
- Corporate Governance
Committee Member
- Risk Management
Committee Member
- Chief Operating Officer
8. Mr.Azwan Khan bin Osman
Khan
- Director
% of
Age
Education
51
- Master Degree in System Science
University of Louisville, USA
- Bachelor Degree in Electrical Engineering,
Chulalongkorn University
- Certificate of Strategic Planning &
Implementation Program,
University of Michigan Business School
(Executive Education Center), USA
(IOD)
-
- Bachelor Degree in Electrical
Engineering (1st Class Honours),
Imperial College of Science & Technology,
University of London, United Kingdom
-
41
-
-
During
Annual Report 2010
35
- MPhil in Finance, University of Cambridge,
United Kingdom
- BSc Accounting and Finance (1st Class
Honours), London School of Economic
and Political Science, United Kingdom
-
-
Company
2003 - Present Director, Executive Director and
Chief Operating Officer
2006 - 2008 Nominating and Compensation
Committee Member
2005 - Present Corporate Governance Committee
Member and Risk Management
Committee Member
2004 - Present Risk Management
Committee Member
Present
Director
2008 - Present
2008 - Present
2008 - Present
Present
Director
Director
Group Chief Strategy Officer
Director
2005 - 2008
Head of Corporate Strategy
& Development
Project Leader
Axiata Group Berhad
Companies of Axiata Group
Berhad
Celcom (Malaysia) Berhad
2000 - 2005
9. Mr.Reza bin Abdul Rahim
- Director
- Nominating and
Compensation
Committee Member
Position
2009 - Present Director and Nominating and
Compensation Committee Member
2009 - Present Director
2009 - Present Head, Group Corporate Finance
2004 - 2009 Group Financial Controller /
Chief Financial Officer
Related Companies)
The Boston Consulting Group,
Malaysia
Axiata Group Berhad
Sapura Technology Berhad /
Sapura Holdings Sdn Bhd
113
Age
Education
Annual Report 2010
% of
During
Position
Company
10. Miss Chullada Sapsarasin
- General Manager
46
- Mini MBA Certificate,
- Bachelor Degree in Psychology
-
-
2007 - Present General Manager
2003 - 2006 General Manager
11. Miss Supannee Thawinwang
- VP- Marketing Integration
44
- Bachelor Degree in Communication Arts,
Bangkok University
- Young Executive Development Program,
-
-
2008 - Present VP- Marketing Integration
2004 -2007 AVP - Marketing
12. Mrs. Sumontip Srimek
- VP- Account
51
- Master Degree in Business Administration,
- Bachelor Degree in Accounting,
Chiang Mai University
-
-
2003 - Present VP - Account
2002 -2003 VP - Account
13. Mr. Adithep Nisamaneevong
- VP- Finance
42
- MBA Finance, Long Island University, USA
- Bachelor Degree in Business
Administration (Finance),
-
-
2007 - Present VP - Finance
2003 - 2006 AVP - Finance
114
The Position of Directors and Management of the Company in Subsidiaries and Related Companies as of December 31, 2010
SIM
Director and Executive Director
Prof. Supachai Phisitvanich
Mr. Thananan Vialiluck
Miss Chullada Sapsarasin
Miss Supannee Thawinwang
Mrs. Sumonthip Srimek
Remarks
x, ///
/, ///
/, ///
/
/, //
/
/
/, //
/, //
#
#
#
#
SMS
BUG
IMI
IMIT(2)
SIMM(2)
SIMI(2)
SIMH(2)
SIAM(1)
TAL(1)
I-Sport(1)
BS
IMP
SC
STC
SCT
OASIS
SBS
OTO
SE
PN
SCS
SIF
SAET
SR&D
SI
SEC
CATS
KPP
CS
CIO
TTN
VIH
STW
SIH
SRT
OTOPRO
Company
Subsidiaries
Related Companies
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37
x
x x
x
x // // x x x x x x x
x x x x / x x x x x x x x x
/ x / / x x x x / / x / // // / / / / / / / x /
/ / / / / / / / / / /
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/ #
/
/
/
/
/
/
/
/
Annual Report 2010
1) x = Chairman / = Director // = Executive Director /// = Audit Committee/Independent Director # = Management
2) Consist of:
1. SIM
= Samart I-Mobile Public Company Limited 2. SMS = Samart Mobile Services Co., Ltd.
3.
5. IMIT
= I-Mobile Inter trade Co., Ltd.
6. SIMM = Samart I-Mobile (Malaysia) Sdn. Bhd..
7.
9. SIAM = Samart Interactive Media Co., Ltd.
10. TAL = Take A Look Co., Ltd.
11.
13. IMP
= I-Mobile Plus Co., Ltd.
14. SC = Samart Corporation Public Company Limited 15.
17. OASIS = OASIS Consulting Co., Ltd.
18. SBS = Samart Broadband Services Co., Ltd.
19.
21. PN
= Posnet Co., Ltd.
22. SCS = Samart Communication Service Co., Ltd.
23.
25. SR&D = Samart Research and Development Co., Ltd. 26. SI = Samart International Co., Ltd.
27.
29. KPP
= Kampot Power Plant Co., Ltd.
30. CS = Cambodia Samart Co., Ltd.
31.
33. VIH
= Vilailuck International Holding Co., Ltd.
34. STW = Smarterware Co., Ltd.
35.
37. OTOPRO = One To One Professional Co., Ltd.
(2)
3) (1) Direct held by Samart Multimedia Co., Ltd
Direct held by I-Mobile International Co., Ltd
BUG =
SIMI =
I-SPORT =
STC =
OTO =
SIF
=
SEC =
CIO
=
SIH
=
PT. Samart I-Mobile Indonesia
I-Sport Co., Ltd.
Samart Telcoms Public Company Limited
Contact -In-One Co., Ltd.
Samart Inter Holding Co., Ltd.
4.
8.
12.
16.
20.
24.
28.
32.
36.
IMI
SIMH
BS
SCT
SE
SAET
CATS
TTN
SRT
=
=
=
=
=
=
=
=
=
Samart I-Mobile (Hong Kong) Co., Ltd.
Samart Ed-Tech Co., Ltd.
Samart Raditech Co., Ltd.
115
Board of Directors and Committees as of December 31, 2010
Directors / Committeesû Members
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Prof. Suphachai Phisitvanich
Mr. Thananan Vialiluck
Remarks
116
x = Chairman / = Director
Annual Report 2010
Board of
Directors
x
/
/
/
/
/
/
/
/
Executive
Committee
Audit
Committee
Risk
Corporate Nominating
Management Governance
and
Committee Committee Compensation
Committee
/
x
/
x
/
/
x
/
x
/
/
/
/
/
/
/
/
/
/
x
General Information
Name
: Samart I-Mobile Public Company Limited
Location of Headquarters
: 99/3 Moo 4, 33rd Floor, Software Park Building,
Chaengwattana Road, Klong Gluar, Pak-kred,
Nonthaburi 11120
Registered Capital
: Baht 444,000,000 divided into 4,440,000,000 ordinary shares,
Baht 0.10 per share.
Issued and paid up Capital
: Baht 430,130,000, divided into 4,301,300,000 ordinary shares,
Baht 0.10 per share.
Registration No
: 0107546000318
Website
: www.i-mobilephone.com
Telephone No
: 0-2502-6000
Fax No
: 0-2502-6870
References
Company Registrar
: Thailand Securities Depository Co., Ltd.
2/7 Moo 4, Capital Market Academy Building
The Stock Exchange of Thailand, 2nd Floor,
North Park, Tung-Song-Hong, Laksi,
Bangkok 10210
Tel. 02-596-9000
Fax. 02-832-4994-6
Auditor
: Ms. Siriwan Suratepin
Certified Public Accountant C.P.A. License No.4604
Ernst & Young Office Limited
33rd Floor, Lake Rajada Office Complex
193/136-137 Rajadapisek Road, Klongtoey
Bangkok 10110
Tel. 02-264-0777
Fax. 02-264-0789-90
Annual Report 2010
117

Annual Report Samart i-Mobile 2010

Transcription

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