Annual Report Samart i-Mobile 2010
Annual Report Samart i-Mobile 2010
Annual Report Samart i-Mobile 2010
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Contents<br />
Message from the Board of Directors 2<br />
Message from the Executive Committee 3<br />
Board of Directors 4<br />
Financial Highlights 6<br />
Social Contribution Activities 8<br />
Nature of Business 10<br />
Business Structure 11<br />
Revenue Structure 12<br />
Information of Subsidiary Companies 13<br />
Changes During the Year 15<br />
Industry and Competitive Analysis 16<br />
Risk Factors 18<br />
Shareholders 21<br />
Management Structure 22<br />
<strong>Report</strong> of the Corporate Governance Committee 34<br />
<strong>Report</strong> of the Risk Management Committee 35<br />
<strong>Report</strong> of the Nominating and Compensation Committee 36<br />
Corporate Governance 37<br />
Connected Transactions 50<br />
Financial Analysis and Results of Operations 55<br />
<strong>Report</strong> of the Board of Directorsû Responsibilities<br />
for the Financial <strong>Report</strong>s 58<br />
<strong>Report</strong> of the Audit Committee 59<br />
<strong>Report</strong> of Independent Auditor 60<br />
Financial Statements 61<br />
Audit Fee 109<br />
Directors and Management 110<br />
General Information 117<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 1
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Message from the Board of Directors<br />
Thailand economy faced many challenges in <strong>2010</strong> especially the political situation that resulted in severe social disturbances<br />
in April to May and this affected business operations related to the tourism and hospitality sectors. Later in the year, severe floods<br />
in the northeastern, central and southern regions lasting many weeks also caused damages to the agriculture sectors. In addition,<br />
the main business of the Company was also facing strong challenges posed by foreign competitors by the introduction of many new<br />
smart phones into the Thai market.<br />
However, the Company is able to maintain our strong presence in the mobile phones market in Thailand and continue to<br />
retain our 2nd position in the Thai handset market for our house brand i-mobile handsets. The Company also won the Design<br />
Excellence Award <strong>2010</strong> (DEmark) in Industrial Products category under the Prime Ministerûs Export Award <strong>2010</strong> for the third<br />
consecutive year. The Company continued success as the leading service provider of content and application for multimedia<br />
business. For <strong>2010</strong>, <strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited had the consolidated revenues of Baht 8,125 million and a net<br />
profit of Baht 135 million. During the year, the Company developed 3G GSM mobile telephony services in the Greater Bangkok<br />
area under brand name çi-mobile 3GXé on TOTûs 3G network with highlight of product features and various service packages as<br />
well as customer service that ensures the highest effectiveness through service centers to support the expansion of network<br />
coverage for 3G services.<br />
Year 2011 is the year of concrete entry into the 3G era which is the opportunities for significant business growth. The<br />
Company is ready to step toward a full integrated telecommunication service provider on the strength of business development<br />
including product development, enhancement of after sales services and human resource development coupled with managing<br />
our business with fairness and the recognition of the Principles of Good Corporate Governance and Corporate Social Responsibility<br />
under the policy guiding principle of being a good corporate citizen, who is accountable to employees, customers and shareholders,<br />
and being socially responsible.<br />
On behalf of <strong>Samart</strong> I-<strong>Mobile</strong> Plc., the Board of Directors would like to thank all shareholders, customers, business partners,<br />
financial institutions, staffs and all well wishers who have generously supported the Company. Be assured that the Company will<br />
continue to pursue the business with transparency to achieve the maximum benefits to all stakeholders and will continue to<br />
participate in development of community, social and environment.<br />
(Professor Suphachai Phisitvanich)<br />
Chairman<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
2<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
Message from the Executive Committee<br />
The year <strong>2010</strong> was the important year that <strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited accelerated to fully develop the<br />
organization including developing the team and creating new generation of staff to prepare for supporting business growth along<br />
with implementing a strategy to strengthen its integrated communication business such as mobile business including 3G service<br />
and multimedia business. For 2011, the Company continues to emphasize the goal of building a sustainable business with a<br />
commitment to create maximum satisfaction for the customer by completing telecommunication experience.<br />
The Company intends to operate its business as a telecommunications provider who offers product and services with<br />
modern communication equipment, various content, and full integrated telecommunication service. For mobile business, the<br />
Company focuses on offering a variety of product with emphasizing on the group of application phone, smart phone, android,<br />
and new product such as android tablet. In addition, the Company also provides special application bundling with the Companyûs<br />
product to generate recurring revenues such as application for chatting imm (i-mobile Messenger), application for using mail<br />
(i-mail) and various social networks as well as collaborates with business partners in combining mobile handset with various<br />
value added services for the best value of the user.<br />
For multimedia business, the Company aims to develop new contents, especially, content service in travel and various<br />
lifestyles to meet the userûs need. The Company also targets to be a leading content service provider for 3G network which has<br />
been developed to be value added services on 3G networks such as VDO call contact center. In 2011, the Company targets to<br />
increase number of users by offering product and service to meet the need of internet user, general user, and specific user such<br />
as movie lover, music lover, and sports lover including 3G service packages at a premium rate. Recently, the Company launched<br />
Blackberry on 3G networks to support the customerûs need of i-mobile 3GX.<br />
By combining the strengths of mobile business including 3G service and multimedia business to offer product and<br />
comprehensive services as well as to generate revenue from sustainable business, the Company is confident of maintaining<br />
business growth and gaining return from investment as goal setting as well as keeps the Companyûs leadership in the complete<br />
telecom service provider.<br />
(Mr.Watchai Vilailuck)<br />
Executive Chairman<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 3
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Board of Directors<br />
1 2 3<br />
4 5<br />
1. Professor Suphachai Phisitvanich<br />
Chairman of the Board of Directors<br />
ë Independent Director<br />
2. Dr. Chotivid Chayavadhanangkur<br />
Independent Director<br />
ë Chairman of the Corporate Governance Committee<br />
3. Mr. Kunthit Arunyakananda<br />
Independent Director<br />
ë Chairman of the Nominating and Compensation Committee<br />
4. Mr.Thananan Vilailuck<br />
Authorized Director<br />
ë Risk Management Committee Member<br />
5. Mr.Jong Diloksombat<br />
Authorized Director<br />
Corporate Governance Committee Member<br />
ë Chief Operating Officer<br />
ë Audit Committee Member<br />
Chairman of the Audit Committee<br />
ë Nominating and Compensation Committee Member<br />
Audit Committee Member<br />
ë Corporate Governance Committee Member<br />
Executive Director<br />
ë President<br />
Executive Director<br />
ë Risk Management Committee Member<br />
4<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
6 7<br />
8 9<br />
6. Mr. Charoenrath Vilailuck<br />
ë Authorized Director<br />
7. Mr.Watchai Vilailuck<br />
Authorized Director<br />
ë Chairman of the Risk Management Committee<br />
Executive Chairman<br />
ë Chief Executive Officer<br />
8. Mr. Azwan Khan bin Osman Khan<br />
ë Director<br />
9. Mr. Reza bin Abdul Rahim<br />
ë Director<br />
ë Nominating and Compensation Committee Member<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 5
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Financial Highlights<br />
2008 2009 <strong>2010</strong><br />
Result of Operation<br />
(Million Baht)<br />
Sales and Service Revenue 11,151 8,769 7,987<br />
Sales Support Revenue 141 81 67<br />
Total Revenues 11,398 9,039 8,125<br />
Gross Profit (1) 1,839 1,430 1,706<br />
Net Profit 114 116 135<br />
Financial Position<br />
(Million Baht)<br />
Total Assets 6,223 6,139 5,434<br />
Total Liabilities 3,933 3,775 3,016<br />
Total Shareholdersû Equity 2,290 2,364 2,418<br />
Financial Ratio<br />
Net Profit Margin (%) 1.00 1.28 1.66<br />
Return on Equity (%) 4.85 5.02 5.71<br />
Return on Assets (%) 1.83 1.87 2.33<br />
Debt to Equity Ratio (Times) 1.72 1.60 1.25<br />
Earnings per Share (Baht) 0.03 0.03 0.03<br />
Dividend per Share (Baht) 0.045 0.02 0.02<br />
Dividend Payout Ratio (%) 169.64 74.42 63.83<br />
Book Value per Share (Baht) 0.53 0.54 0.56<br />
Par Value per Share (Baht) 0.10 0.10 0.10<br />
Number of issued and paid up shares (2) (Million Shares) 4,300.00 4,300.00 4,301.30<br />
(1)<br />
Remarks: Gross Profit was calculated by including sales support revenue.<br />
(2)<br />
During the year <strong>2010</strong>, the Companyûs paid up capital was increased from the exercise of warrants offering to the<br />
Companyûs directors and the employees of the Company and its subsidiaries.<br />
6<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
(MB.)<br />
15,000<br />
10,000<br />
11,398<br />
Total Revenues<br />
9,039<br />
8,125<br />
The total revenues were Baht 8,125 million, a decrease<br />
of Baht 914 million or 10.11% compared to 2009. The<br />
decrease was mainly contributed from mobile business<br />
and international business that impacted from the lower<br />
average selling price per unit. Revenue from multimedia<br />
business was continuously increased.<br />
5,000<br />
0<br />
2008 2009<br />
<strong>2010</strong> Year<br />
(MB.)<br />
150<br />
Net Profit<br />
114 116<br />
135<br />
Net profit was Baht 135 million, an increase of Baht 19<br />
million or 16.64% compared to 2009. Net profit margin<br />
also increased from 1.28% in 2008 to 1.66% in <strong>2010</strong>.<br />
100<br />
50<br />
0<br />
2008 2009<br />
<strong>2010</strong> Year<br />
(MB.)<br />
6,500<br />
6,000<br />
Total Assets<br />
6,223 6,139<br />
5,434<br />
Total assets were Baht 5,434 million, a decrease of<br />
Baht 705 million or 11.48% compared to end of 2009.<br />
This was mainly due to the decrease in short-term<br />
investments and sales promotion receivables of <strong>Mobile</strong><br />
Business, and trade accounts receivable of International<br />
Business.<br />
5,500<br />
5,000<br />
2008 2009<br />
<strong>2010</strong> Year<br />
(MB.)<br />
2,600<br />
Total Shareholdersû Equity<br />
2,364<br />
2,418<br />
Total shareholdersû equity was Baht 2,418 million, an<br />
increase of Baht 54 million or 2.29% from end of 2009,<br />
due to net profit for <strong>2010</strong> of Baht 135 million and the<br />
dividend payment in <strong>2010</strong> of Baht 86 million.<br />
2,400<br />
2,290<br />
2,200<br />
2,000<br />
2008 2009<br />
<strong>2010</strong> Year<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 7
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Social Contribution Activities<br />
Being a responsible citizen that makes a difference<br />
Thriving alongside the advancement of the Thai society, <strong>Samart</strong> Group has throughout the past 55 years, firmly adhered<br />
to its guiding principle of being a good corporate citizen, who is accountable to employees, customers and shareholders, and<br />
being socially responsible. <strong>Samart</strong> Group has continuously focused on building a solid business foundation while ensuring<br />
constructive contributions to the society to bring happiness, smiles and a better quality of life to Thai people.<br />
With that in mind, <strong>Samart</strong> Group has undertaken a range of development initiatives that contribute to the sustainable<br />
development of the Thai society through the following projects:<br />
1. Education and vocational training<br />
Recognizing education as instrumental to peopleûs development, <strong>Samart</strong> Group provides educational and career<br />
programs to Thai youths from underserved communities to maximize their opportunities for university and career<br />
success.<br />
1.1 <strong>Samart</strong> Innovation Awards is an annual competition<br />
held by <strong>Samart</strong> Corporation Plc., a representative of<br />
<strong>Samart</strong> Group, for local software developers to<br />
showcase their innovation ideas and win the chance<br />
to see their works commercialized and promoted<br />
in the marketplace. The competition, held for eight<br />
consecutive years from 2003, create new business opportunities, jobs and additional revenues for the developer<br />
community and getting local talents ready for international business exposure in the future. In <strong>2010</strong>, the company<br />
was honored by Her Royal Highness Princess Maha Chakri Sirindhorn who graciously bestowed the grand prize<br />
upon the championship for the first year.<br />
1.2 i-mobile Creative Synergy Award is a mobile phone contest where local<br />
designers are encouraged to present their creatively designed handsets<br />
with marketing communication plans to promote the products. The<br />
contest is organized to promote the new generation of designers and<br />
ideas, locally and internationally. In <strong>2010</strong>, the contestûs winners were<br />
sponsored to visit the World Expo in Shanghai, China.<br />
1.3 <strong>Samart</strong> Scholarship project is to provide capable but poor students with<br />
educational opportunities. Scholarships are available for various groups of<br />
students.<br />
- Graduate Program - 5 scholarships have been offered annually to poor students, who exhibit excellent<br />
academic record, good behavior and active participation in social contribution activities at Mahidol<br />
University since 2007.<br />
- Undergraduate Program - 5 scholarships are offered to selected<br />
students to complete their studies at Thammasat University every<br />
year from 2008.<br />
- Other scholarships - 1 scholarship offered to a student at Faculty<br />
of Nursing, Princess of Naradhiwas University, in addition, <strong>Samart</strong><br />
Foundation supports education by offering scholarships to a<br />
student at Boromarajonani College of Nursing, 5 students for Mahidol<br />
Engineering Foundation, and 60 poor students.<br />
1.4. Sport promotion activities:<br />
- Sponsorship for a tri-party football match organized by the Faculty<br />
of Engineering, Kasetsart University.<br />
- Sponsorship for donation of sports equipments to underprivileged<br />
schools in Bangkok and the provinces to instill enthusiasm for<br />
sports among Thai youths.<br />
- Sponsorships for local football clubs such as Maungthong United,<br />
Buriram PEA, TOT-CAT FC, Buriram FC and Puket FC to give<br />
8<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
young footballers the opportunity to play in the Thai Premier League and international matches.<br />
- An organizer for the Football Camp project to give free football lessons by national professional footballers<br />
to Thai youngsters in the provinces.<br />
- Sponsorship for Pakkred Secondary Schoolûs Sports Day.<br />
1.5. Creativities promotion activities:<br />
- Sponsorship for Miss Teen Thailand <strong>2010</strong> contest to engage Thai<br />
youths in creative and useful activities.<br />
- Sponsorship for sportswear design contest among university<br />
students to promote the new generation of designers and<br />
generate sports interests among Thai youths.<br />
- <strong>Samart</strong> Corporation Plc., a representative of <strong>Samart</strong> Group,<br />
sponsored Kingûs Mongut Institute of Technology Ladkrabang to<br />
organize the IT camp.<br />
1.6 <strong>Samart</strong> Telecommunications Technician School transfers knowledge about the installation of antennas and<br />
satellite dishes which is the original business and the foundation for the growth of the <strong>Samart</strong> Group.<br />
2. Social contribution and charity<br />
<strong>Samart</strong> Group has helped communities, the underprivileged and disaster victims.<br />
2.1 ç<strong>Samart</strong> D Clubé project encourages staffs to voluntarily do social work. Staffs are persuaded to initiate social<br />
contribution programs so that they learn to help others and thus strengthen the foundation for the society.<br />
2.2 Other social responsibility activities through ç<strong>Samart</strong> Foundationé included;<br />
- <strong>Annual</strong> donation of reflective coats, raincoats and police traffic barriers to Pak Kret and Pak Khlong Rangsit<br />
police stations.<br />
- Donation of 1,000 bags of rice to help flood victims via TV channel 3.<br />
- Donation of relief packs and boats to help flood victims in Lopburi<br />
and Ayutthaya provinces.<br />
- Construction of a new school building and donation of teaching<br />
materials for students at Kong Mong Tha School, Sangkla Buri<br />
district, Kanchanaburi province.<br />
- Donation of the welfare fund benefiting 15 underprivileged people.<br />
- Donation of cancer treatment to Miss Suvadee Sukgerd.<br />
- Sponsorship for the 1 st Student Volunteer Project organized by Dhurakij Pundit University.<br />
- Donation of blankets, sports gears and toys to border patrol<br />
police schools in rural areas.<br />
3. Energy and environment conservation<br />
The Company runs awareness campaigns to conserve the environment<br />
and energy through çLor. Ling. Activityé or çSave our SAMART Activityé for<br />
three consecutive years from 2008. The activity is implemented to promote<br />
environment friendly and energy efficiency management in the Company, and<br />
annual encouragement of this activity in the first quarter as well as publicity via<br />
internal PR throughout the year.<br />
The pride of <strong>2010</strong><br />
Prime Ministerûs Export Award <strong>2010</strong><br />
<strong>Samart</strong> I-<strong>Mobile</strong> Plc. won the Design Excellence Award <strong>2010</strong> (DEmark) in Industrial Products<br />
category under the Prime Ministerûs Export Award <strong>2010</strong> for the third consecutive year for its i-mobile<br />
PANO DC5210 from the Office of Product Value Development, the Department of Export Promotion.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 9
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Nature of Business<br />
The business operations of the Company and subsidiaries are divided into three lines of business as follows:<br />
1. <strong>Mobile</strong> Business<br />
Distribution of mobile phones bundled with content into a value added service called çi-linké, accessories and SIM<br />
cards through retail shops called i-mobile by SAMART, Franchises, Hypermarket and Specialty Store as well as wholesale<br />
channels.<br />
In December 2009, the Company launched 3G services as <strong>Mobile</strong> Virtual Network Operator (MVNO) on the behalf<br />
of Telephone Organization of Thailandûs 3G services under brand name çi-mobile 3GXé. These services will provide all<br />
services similar to the mobile operator, except for investment in the network equipments. The services are initially for<br />
Bangkok region and will expand the service as TOTûs network expansion.<br />
2. Multimedia Business<br />
2.1. Provision of voice services under the brand name of BUG1900, BUG1113 and BUG1110 and non-voice or<br />
multimedia services under the brand name of BUG2<strong>Mobile</strong> through multi-devices and provision of infotainment<br />
services through mobile phones such as general sport reports both in form of voice and non-voice, downloading<br />
of ring tones, stock analysis, horoscope and other infotainment information, etc.<br />
2.2. Content Provider through multimedia channel.<br />
2.3. Producer of programs through television, radio, printed media and billboards.<br />
2.4. Provision of multimedia and interactive media services<br />
3. International Business<br />
Distributor of mobile phones bundled with content into a value added service called çi-linké and other services<br />
in overseas market namely Malaysia, Indonesia, India, Bangladesh, Laos and Cambodia. The Company also plans to<br />
cooperate with Axiata Group Berhad, a shareholder, for developing the mobile device with function and feature that<br />
conform to demand of each country.<br />
10<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
➤<br />
Business Structure<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
<strong>Mobile</strong> Business<br />
Multimedia Business<br />
International Business<br />
➤<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
99.99%<br />
➤<br />
<strong>Samart</strong> Multimedia<br />
Co., Ltd.<br />
99.99%<br />
➤<br />
I-<strong>Mobile</strong> International<br />
Co., Ltd.<br />
<strong>Samart</strong> <strong>Mobile</strong> Services<br />
Co., Ltd.<br />
➤<br />
97.40%<br />
<strong>Samart</strong> Interactive<br />
Media Co., Ltd.<br />
➤<br />
99.99%<br />
<strong>Samart</strong> I-<strong>Mobile</strong><br />
(Malaysia) Sdn. Bhd.<br />
➤<br />
100.00%<br />
Brain Source Co., Ltd.<br />
➤<br />
99.93%<br />
Take A Look Co., Ltd.<br />
➤<br />
66.67%*<br />
PT <strong>Samart</strong> I-<strong>Mobile</strong><br />
Indonesia<br />
➤<br />
99.80%<br />
I-<strong>Mobile</strong> Plus Co., Ltd.<br />
99.99%<br />
I-Sport Co., Ltd.<br />
➤<br />
49.99%*<br />
<strong>Samart</strong> I-<strong>Mobile</strong><br />
(Hong Kong) Co., Ltd.<br />
➤<br />
100.00%<br />
I-<strong>Mobile</strong> Inter<br />
trade Co., ltd.<br />
➤<br />
99.99%<br />
* The remaining portion held by partners who have business expertise in such companies with no conflict of interest.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 11
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Revenue Structure<br />
The revenue structure of the Company and subsidiaries as of December 31, 2008 - <strong>2010</strong> is as follows:<br />
(Unit: Million Baht)<br />
Revenue Operated by % of 2008 2009 <strong>2010</strong><br />
shareholding Revenue % Revenue % Revenue %<br />
<strong>Mobile</strong> Business<br />
ë <strong>Mobile</strong> Business SIM 100.00% 7,856 68.92 6,831 75.57 5,965 73.42<br />
SMS 97.40%<br />
BS 99.93%<br />
IMP 99.99%<br />
ë Thai-<strong>Mobile</strong> 1900 (1) SIM 100.00% 452 3.97 0 0.00 0 0.00<br />
Multimedia Business BUG, SIAM 99.99% 730 6.40 800 8.85 8.99 11.06<br />
TAL 66.67%<br />
I-SPORT 49.99%<br />
SMR (2) 49.89%<br />
International Business IMI, IMIT 99.99% 2,113 18.54 1,138 12.59 1,123 13.82<br />
SIMM, SIMH 100.00%<br />
SIMI 99.80%<br />
C-<strong>Mobile</strong> (3) 51.00%<br />
Total Revenues from Operations 11,151 97.83 8,769 97.01 7,987 98.30<br />
Selling support income 141 1.24 81 0.90 67 0.83<br />
Reversal of allowance for doubtful 12 0.11 0 0.00 0 0.00<br />
accounts/bad debt received<br />
Interest income 9 0.08 7 0.08 5 0.06<br />
Gain on exchange 0 0.00 10 0.11 1 0.01<br />
Gain on change in value and 0 0.00 54 0.60 41 0.50<br />
disposal of short-term investments<br />
Gain on disposal of investment in 0 0.00 46 0.51 0 0.00<br />
subsidiary company<br />
Other income 85 0.75 72 0.80 24 0.30<br />
Total Revenues 11,398 100.00 9,039 100.00 8,125 100.00<br />
SIM = <strong>Samart</strong> I-<strong>Mobile</strong> Plc. BUG = <strong>Samart</strong> Multimedia Co., Ltd.<br />
IMI = I-<strong>Mobile</strong> International Co., Ltd. SMS = <strong>Samart</strong> <strong>Mobile</strong> Services Co., Ltd.<br />
SIAM = <strong>Samart</strong> Interactive Media Co., Ltd. SIMM = <strong>Samart</strong> I-<strong>Mobile</strong> (Malaysia) Sdn. Bhd.<br />
BS = Brain Source Co., Ltd. TAL = Take A Look Co., Ltd.<br />
SIMI = PT <strong>Samart</strong> I-<strong>Mobile</strong> Indonesia IMP = I-<strong>Mobile</strong> Plus Co., Ltd.<br />
I-SPORT = I-Sport Co., Ltd. SIMH = <strong>Samart</strong> I-<strong>Mobile</strong> (Hong Kong) Co., Ltd.<br />
IMIT = I-<strong>Mobile</strong> Inter trade Co., Ltd. SMR = Small Room Co., Ltd.<br />
C-<strong>Mobile</strong> = C-<strong>Mobile</strong> Sdn. Bhd.<br />
(1)<br />
This project was terminated in 2008 and the Company transferred the rights and equipments of the billing system to TOT Public Co., Ltd. on<br />
November 10, 2008.<br />
(2)<br />
<strong>Samart</strong> Multimedia Co., Ltd. sold all shares in Small Room Co., Ltd. on June 3, 2008.<br />
(3)<br />
I-<strong>Mobile</strong> International Co., Ltd. sold shares in C-<strong>Mobile</strong> Sdn. Bhd. on February 19, 2009.<br />
12<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
Information of Subsidiary Companies<br />
Information of Subsidiary Companies as of December 31, <strong>2010</strong><br />
Name of Company Type of Business Shareholder Registered Total of Companyûs shareholding<br />
Capital Ordinary Number of Percentage<br />
Share share<br />
1. <strong>Samart</strong> Multimedia Co., Ltd. 1. Provide content services via SIM 200 2,000,000 1,999,996 99.99<br />
99/12 Moo 4, Software Park fully integrated wire and wireless Million Baht<br />
24 th Fl., Chaengwattana Rd., technologies both voice service<br />
Klong Gluar, Pak-kred,<br />
via Audiotext and Call Center,<br />
Nonthaburi 11120<br />
and non voice services.<br />
Tel. 0-2502-6000<br />
2. Content producer and<br />
Fax. 0-2502-8136<br />
developer.<br />
2. <strong>Samart</strong> <strong>Mobile</strong> Services Co., Ltd. Procure and sell communication SIM 490 49,000,000 47,724,999 97.40<br />
37/1 Moo 2, Phaholyothin Rd., and information technology Million Baht<br />
Klong 1, Klongluang,<br />
equipment through wholesale.<br />
Pathumthanee 12120<br />
Tel. 0-0502-6000<br />
Fax. 0-2502-6946<br />
3. I-<strong>Mobile</strong> International Co., Ltd. Invest in the businesses related to SIM 200 20,000,000 19,999,994 99.99<br />
99/3 Moo 4, Software Park the distribution of mobile phones Million Baht<br />
33 rd Fl., Chaengwattana Rd., bundled with content in overseas Paid-up<br />
Klong Gluar, Pak-kred, markets. capital of<br />
Nonthaburi 11120<br />
125 Million<br />
Tel. 0-2502-6200<br />
Baht<br />
Fax. 0-2502-8532<br />
4. Brain source Co., Ltd. Research and develop application SIM 1 10,000 9,993 99.93<br />
99/12 Moo 4, Software Park on mobile phone. Million Baht<br />
24 th Fl., Chaengwattana Rd.,<br />
Klong Gluar, Pak-kred,<br />
Nonthaburi 11120<br />
Tel. 0-2502-6000<br />
Fax. 0-2502-8136<br />
5. I-<strong>Mobile</strong> Plus Co., Ltd. Carry on the service of SIM 100 10,000,000 9,999,993 99.99<br />
99/13 Moo 4, Software Park telecommunication business, and Million Baht<br />
23 rd Fl., Chaengwattana Rd., be agent for all types of Paid-up<br />
Klong Gluar, Pak-kred, telecommunication services. capital of<br />
Nonthaburi 11120<br />
27.5 Million<br />
Tel. 0-2502-6200<br />
Baht<br />
Fax. 0-2502-8532<br />
6. <strong>Samart</strong> Interactive Media Co., Ltd. Face-to-face foretell at HoroWorld BUG 160 16,000,000 15,999,994 99.99<br />
99/12 Moo 4, Software Park 24 th Fl., shop and via website, provide Million Baht<br />
Chaengwattana Rd., Klong Gluar, training and selling products related<br />
Pak-kred, Nonthaburi 11120 to horoscope and fortunetelling.<br />
Tel. 0-2502-6000<br />
Fax. 0-2502-8136<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 13
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Name of Company Type of Business Shareholder Registered Total of Companyûs shareholding<br />
Capital Ordinary Number of Percentage<br />
Share share<br />
7. Take A Look Co., Ltd. Provide advertisement and outdoors BUG 100 10,000,000 6,666,659 66.67<br />
99/3 Moo 4 Software Park media services including electronic Million Baht<br />
33 rd Fl., Chaengwattana Rd., screens (LED Billboard). Paid-up<br />
Klong Gluar, Pak-kred,<br />
capital of<br />
Nonthaburi 11120<br />
75 Million<br />
Tel. 0-2502-6000<br />
Baht<br />
Fax. 0-2502-8136<br />
8. I-Sport Co., Ltd. Provide sports information through BUG 40 4,000,000 1,999,996 49.99<br />
99/12 Moo 4, Software Park 24 th Fl., comprehensive interactive Million Baht<br />
Chaengwattana Rd., Klong Gluar, multimedia in Thailand and overseas Paid-up<br />
Pak-kred, Nonthaburi 11120 market. capital of<br />
Tel. 0-2502-6000<br />
30 Million<br />
Fax. 0-2502-8136<br />
Baht<br />
9. <strong>Samart</strong> I-<strong>Mobile</strong> (Malaysia) Sdn. Bhd. Distribution of mobile phones IMI 5,000,000 2,000,000 2,000,000 100.00<br />
18 A, Jalan Mutiara Raya, bundled with content services and Malaysian<br />
Taman Mutiara, 56000 provider of interactive multimedia Ringgit<br />
Kuala Lumpur, Malaysia services in Malaysia.<br />
Tel. 603-2178-9861<br />
Fax.603-2166-4993<br />
10. PT. <strong>Samart</strong> I-<strong>Mobile</strong> Indonesia Distribution of mobile phones IMI 500,000 500,000 499,000 99.80<br />
Wisma 46 - Kota BNI, Lt.24 bundled with content services and USD<br />
Suite 24.01, JI. Jend. Sudirman provider of interactive multimedia<br />
Kav.1, Jakarta 10220, Indonesia services in Indonesia.<br />
Tel. 62-21-5785-1986<br />
Fax.62-21-5785-1874<br />
11. <strong>Samart</strong> I-<strong>Mobile</strong> (Hong Kong) Co., Ltd. Distribution of mobile phones IMI 5,000,000 5,000,000 5,000,000 100.00<br />
26/F Tesbury Centre, 28 bundled with content services and HKD<br />
Queenûs Road East, Hong Kong provider of interactive multimedia<br />
Tel. 852-2980-1888<br />
services in Hong Kong.<br />
Fax.852-2956-2192<br />
12. I-<strong>Mobile</strong> Inter trade Co., Ltd. Export of mobile phones bundled IMI 5 500,000 499,993 99.99<br />
99/3 Moo 4, Software Park 33 rd Fl., with content services and other Million Baht<br />
Chaengwattana Rd., Klong Gluar, products of the Company.<br />
Pak-kred, Nonthaburi 11120<br />
Tel. 0-2502-6200<br />
Fax. 0-2502-8532<br />
SIM = <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
IMI = I-<strong>Mobile</strong> International Co., Ltd.<br />
BUG = <strong>Samart</strong> Multimedia Co., Ltd.<br />
14<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
Changes During the Year<br />
The main businesses of the Company are still from distribution of handsets in domestic and overseas markets as well as<br />
providing variety of contents. Demand of handsets in domestic market continues to increase. The increase was mainly due to<br />
increasing demand from replacement market and trend of customer behavior to use more than one handset. The Company has<br />
developed various models of handsets with differentiable features at an attractive price to customers as well as continually<br />
improved quality of after sale services. Thus, the Company was successful in retaining 2nd position in Thailandûs handset market.<br />
Out of total handsets sold by the Company, approximately 96% of handsets were i-mobile brand. The Company launched<br />
communicative devices which support 3G network such as 3G handset, Data Card, etc. The Company has continually increased<br />
distribution channels in domestic and overseas markets to expand product reach to target consumers such as direct sale,<br />
corporate sale and convenience stores.<br />
The Company received a licence from National Telecom Commission (çNTCé), currently changed to be National<br />
Broadcasting and Telecom Commission (çNBTCé), to be a <strong>Mobile</strong> Virtual Network Operator (çMVNOé) in 2009. The Company<br />
has signed a MOU with Telephone Organization of Thailand (çTOTé) to act as a MVNO for TOTûs 3G services. Under the MOU<br />
terms, the Company will provide all services similar to the mobile operator, except for investment in the network equipments. The<br />
Company started its MVNO operations on December 3, 2009 under the brand name çi-mobile 3GXé. The services are initially for<br />
Bangkok region and as TOT expand its network, the Company will be a nation wide MVNO Operator. The Company is a MVNO<br />
service provider who has the highest number of subscribers with 123,000 subscribers at the end of <strong>2010</strong>.<br />
On the overseas front, the Company emphasizes on investment in potential growth countries such as Indonesia,<br />
Malaysia, and India. The Company has continually invested in marketing and after sale service to increase customer satisfaction<br />
on product that conform to demand of each country such as long-term usage battery in India, handset with key board or QWERTY<br />
in Indonesia, etc. In addition, the Company has co-marketing campaigns with Axiata Group Berhad, a shareholder and service<br />
provider in 9 countries, to set product planning that conform to demand of each country in the region market.<br />
The revenues of content services both voice and non-voice services in <strong>2010</strong> achieved the highest revenues since<br />
commencing these services. The Company was successful in retaining 1st position in the non-operator service provider<br />
especially in BUG2<strong>Mobile</strong> service. The rapid growth in non-voice services was attributed to the bundling of non-voice services<br />
into i-mobile handsets thru çi-linké application which enable more convenience for content users to reach the contents. In<br />
addition, the Company expanded its distribution channels to CAT CDMA network by providing Ring Back Tone and Streaming<br />
services, and also developed information relating to eat, drink and travel to service in all channels including www.edtguide.com<br />
to serve content services on any broadband network.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 15
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Industry and Competitive Analysis<br />
As year <strong>2010</strong> began on the cautious note, Thai economy was prepared for turnaround in early <strong>2010</strong>. The optimism was<br />
based mainly on two important assumptions of export growth and tourism. Governmentûs çThai Khemkhangé stimulus did<br />
help certain businesses in short term. The long term impact of this stimulus in construction and services sector shall be seen<br />
in 2011-2012.<br />
To the surprise of most, political stalemate in Bangkok in the first and the second quarter went beyond anybodyûs<br />
expectations and confidence in Thai political system was once again in the lime light. The long protests eroded tourist arrivals<br />
and business closure affected overall economy. It was expected that these protests would cause slower GDP growth. With<br />
immediate settlement on the issues, government was quick to issue financial support package to the affected businesses. As<br />
economy entered third quarter, the GDP growth estimates were above everybodyûs expectations. Thai economic growth was at<br />
its highest in 15 years and Thai Baht appreciated to the new high since 1997 crisis. The euphoria led to concern on exports due<br />
to appreciating currency. As usual, the exports and services sector were key drivers of economic growth. Consumer confidence<br />
however remained subdued. Worst flooding in fourth quarter together with lingering political uncertainties did not helped to<br />
boost consumer confidence. As the year <strong>2010</strong> is coming to an end, overall economic situation remains healthy with exception<br />
of strong fund inflows and fear of asset bubble, Thai economy is poised for moderate growth of 4%-5% in 2011.<br />
Global economic situation remained divided. BRIC (Brazil, Russia, India and China) and ASEAN were at the forefront of<br />
growth spectrum while US and EU economies were still struggling. The surprise of <strong>2010</strong> was Euro crisis which began with Greek<br />
economy and later spread to Spain, Portugal, and Ireland. These so called çPIGSé economies suffered from widening budget<br />
deficits and needed massive bailouts. So far in <strong>2010</strong>, Greeks and Irish were the recipient of bailouts. Spanish and Portuguese<br />
struggled to raised funds at much higher spread over German bund, but, so far have avoided need to bail out. Economic situation<br />
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<br />
of years. A high level effort to set up monetary fund for Europe is underway.<br />
US on the other hand struggled with high unemployment rate. QE II and recent tax breaks of $0.9 tn will prove effective<br />
only in the short term. The key to US recovery lies in stimulating consumer demand and use weak dollar to boost US exports.<br />
With fedûs easing of monetary policy, it is expected that hot money will flow into emerging markets creating asset bubble. On<br />
the other hand, weak dollar is main cause of concern to countries with sizable dollar reserves. With Chinese and Indian Central<br />
banks buying up gold, prices reached $1400/Oz in <strong>2010</strong>. Weaker dollar also promoted rally in commodities such as oil, copper<br />
and iron ore, but it will be short lived as demand sustainability is still not visible from here.<br />
Japanese economic engine struggled as weak dollar eventually let Yen reaching the levels of 80s not seen in decades.<br />
Japanese central bank is trying hard to keep struggling Yen at 83 plus level. Domestic demand, capital expenditure, private<br />
investment all were below expectations. With appreciating property prices in China, government used tools to curb property<br />
lending and has increased RRR recently. Weaker Yuan became the target of criticisms during G20 summit and as a result China<br />
expanded trading band of Yuan. China is playing key role in world economic landscape and with recent instability in Korean<br />
peninsula, Chinaûs importance have increased beyond its economic role.<br />
In ASEAN however, the economic growth was staler. Indonesia, Vietnam, Malaysia and Singapore reported decent<br />
economic growth. As a result of influx of hot money, currencies were on uptrend and became a challenging task for central<br />
banks in few countries. In order to reduce exposure to USD, ASEAN member countries have agreed to trade in currencies such<br />
as Yuan. Learning from the example of EU zone crisis, ASEAN for the time being had postponed the common currency idea.<br />
Region is also keen on boosting up its intra ASEAN trade and trade with China and India.<br />
In conclusion, outcome of next years election, socio political harmony, measures to stimulate weaker consumer demand<br />
and consistency in investment policies shall be the key barometer for measuring economic stability in 2011.<br />
Telecommunication Industry: Services Perspective<br />
Thailand with its SIM card penetration of 100% was prepared to auction off 2.1GHz spectrum. However, a legal glitch not<br />
only resulted in the cancellation of such auction but, as time window on National Telecom Commission (çNTCé) came to an end,<br />
3G in Thailand now can only happen with the setting up of National Broadcasting and Telecom Commission (çNBTCé).<br />
Telephone Organization of Thailand (çTOTé) which earlier launched its first 3G service in December 2009, had limited success<br />
mainly due to network constraints. The existing network covers only Bangkok region and TOT currently acts as network provider,<br />
16<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
letting private operators to acquire subscribers for TOT. This arrangement is called <strong>Mobile</strong> Virtual Network Operator (çMVNOé)<br />
and TOT have currently five MVNO and a subscriber base of 180,000.<br />
<strong>Mobile</strong> operators were focused on non voice applications to enhance their Average Revenue Per User (çARPUé). Latest<br />
estimates state that blended ARUP excluding interconnection fees but including the data was around Baht 220 which is at par<br />
with the 2009 levels. The data consumption has gone up from previous years as more and more affluent customers are using<br />
BlackBerry, iPhone and iPad.<br />
Decision by Communication Authority of Thailand (çCATé) to buy Hutch was delayed due to political reasons and fate of<br />
Hutch as the operators remains uncertain. As concessions granted by TOT and CAT to existing operators coming to an end<br />
soon, new regulator have a dominant task of creating a level playing field, sort out concession related issues and most<br />
importantly, allow efficient <strong>Mobile</strong> Number Portability (çMNPé). With approval from the cabinet, TOT has embarked upon a<br />
network rollout plan where by 5,200 base stations shall be deployed nationwide within mid 2012. This will raise the hopes for<br />
Thai consumer to finally avail high speed wireless broadband access.<br />
Telecommunication Industry: Handset Perspective<br />
Demand for mobile handsets in Thailand is likely to be in the neighborhood of 10.5 million for year <strong>2010</strong>. Major demand<br />
thrust is still coming from low to mid low segment where consumers are changing their older handsets for a new one at lower<br />
costs. Feature wise nothing new was added though, on the contrary newer handsets are increasingly similar in looks and<br />
features to that of premium segment and are available at the fraction of the costs. Only trade off is the brand name and perhaps<br />
after sales services.<br />
At the low end of the spectrum, cheapest handset is available for Baht 700- Baht 900 while, high end premium phones<br />
could be bought around Baht 25,000. The political stand off in Bangkok was bonanza for handsets with TV tuners and many<br />
enjoy watching live events on their handsets cause house brands, Chinese brands and brands from South Korea were successful<br />
in stepping up their presence. Wider acceptance of Android based handsets among Thai consumers is encouraging as this OS<br />
has proved superior for user friendliness and content usage. Apple iPhone and BlackBerry continued to catch attention as social<br />
networking is causing people to stay on line and in touch with their friends. Similarly, with the launch of iPad, a tablet revolution<br />
is just around the corner. However, limited 3G coverage is a big hindrance in penetrating these products. It is expected that by<br />
end 2011, there will be a boom in handhelds which will take industry to the new level. New Handhelds is perhaps the last nail<br />
in the coffin for smart phones!<br />
The tablet revolution is here and once Thailand is ready for 3G, it will act as new driving force for the handheld market.<br />
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<br />
nationwide 3G rollout by all the operators, handheld industry shall take key role in handset industry.<br />
Entertainment and Media Industry<br />
The road towards convergence of media, entertainment and telecom industry stalled when 3G auction were put off due<br />
to legal issues. Despite the set back, the marriage of media and telecom industry continue to flourish thru increased deployment<br />
in broad band usage, more wi-fi spots, etc.<br />
The real convergence on a large scale is far from commercial success in Thailand. However, as a first step, Apple iTune<br />
platform has been officially launched and consumers can download applications on pay per use basis. Other traditional<br />
applications such as video streaming, mobile movie preview, etc. are widely available from traditional mobile operators. A big<br />
jump in the content usage is expected as more and more users avail content on wireless networks. User generated content such<br />
as You Tube is non existent in Thailand on a wider scale. çEé Books was another application that was launched in Thailand and<br />
its acceptance is growing gradually.<br />
With launch of <strong>Mobile</strong> Virtual Network Operators in <strong>2010</strong>, these MVNOûs are offering data plans and not the killer content.<br />
The current form of online entertainment is linked to fortune telling and information etc. It is expected that killer application on<br />
3G is still non-existent, that day is not far when Thai consumers shall able to enjoy real benefits of convergence between<br />
telecom and media industry.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 17
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Risk Factors<br />
Risk factors that may impact the Companyûs operation are as follows:<br />
1. Business Risks<br />
1.1 Handset Business<br />
In <strong>2010</strong>, trend of handset market for Smartphone has been growth perspective including its sales volume<br />
and market value due to the change of customerûs usage behavior, more customers prefer to use <strong>Mobile</strong> Internet.<br />
Smartphone could meet the customerûs need better than Proprietary phone, seen from the increased popularity of<br />
the Gadget including Smartphone, Tablet PC. As the result, the market share of Smartphone or Application phone<br />
was increased consecutively. The Company considered that such change may affect the sales volume of handset<br />
in the middle market and may have the risk that causes lower market share of the Company. Therefore, the<br />
Company also planned and began working to support such change by developing various products such as Feature<br />
phone focusing on application in social networking to support the services of Chat, Facebook, Twitter and other<br />
online applications. In addition, the Company plans to launch handset and tablet PC that can support the operating<br />
system of Android OS and 3G services in 2011. Moreover, the Company, a provider of <strong>Mobile</strong> Virtual Network<br />
Operator (MVNO), provided 3G services to be a part of differentiating i-mobile brand handset. From this operation,<br />
sales volume of i-mobile brand can be better due to the customerûs need for changing mobile device to support<br />
3G service.<br />
1.2 <strong>Mobile</strong> Virtual Network Operator (MVNO) Business<br />
<strong>Mobile</strong> Virtual Network Operator in recent year has been affected by the uncertainty of network expansion<br />
plans from 3G network owner with some difficulties such as coverage of the service area and quality of service.<br />
However, Council of Ministers passed the resolution that TOT Public Company Limited (TOT) shall expand its 3G<br />
network and plan to begin 3G network expansion at the end of second quarter of the year 2011 onward, which will<br />
cover more 3G service areas. As the result, the Companyûs market plan will be more evident and expand user base<br />
as planned. According to the mentioned expansion as well as better service quality, the Company will have<br />
sustainable customers which led to generate recurring revenue from 3G service that will be the Companyûs<br />
significant future income.<br />
Thailand entered to 3G technology which benefit directly to the content service including application on<br />
handset due to the speed of Internet using via <strong>Mobile</strong> Internet of 3G technology better than 2G technology. It was<br />
predicted that 3G technology will enhance the market value of the content and application continuously grown likely<br />
jumping steps. Therefore, the Company foresaw the business opportunity and has been conducting research and<br />
development of content and application to add values of the services through 3G to maintain existing market share<br />
together with expand into new market. By this, the Company will bring in sustainable service revenue in the future.<br />
1.3 Content Business<br />
Content business has been changing from existing technology to 3G technology. The current technology<br />
market must be deemed as a large market with high competition. However, it is entering the saturation of market,<br />
seen from the behavior of consumer who uses both voice and non-voice stable and slow. These factors were<br />
happened by stable demand of existing content including alteration from low and medium priced handsets to higher<br />
priced one or Smart phone: high efficiency and easily access to various information. Therefore, the Company<br />
supports the development of new content and application with more attractive functions and features to fulfill new<br />
requirements of a customer as well as suitable for premium handset of which increasingly used.<br />
In the part of content for 3G technology, the Company has been preparing by developing from contents<br />
which the Company has expertise and be leader in the market such as sports, news, forecast, etc. as well as<br />
developing various contents and application to meet the new lifestyle of consumer in the future. These can be<br />
seen from the launching of www.edtguide.com, the number one website of lifestyle service to provide eating,<br />
18<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
drinking, and travelling information, www.horoworld.com, a website developed from the Companyûs strong content<br />
in forecasting category to superior and perfect services as well as joining with partner to launch www.showded.com;<br />
a top-ranked community website, providing video service. In addition, the Company planned to expand its business<br />
to online shopping which is expected to grow substantially in the future.<br />
The key factor of content business supporting both existing and 3G technologies in the future is the<br />
çcontenté itself. The Company focuses on being content owner. Therefore, the Company has been developing and<br />
producing its own contents; more than 50% currently, as well as cooperating with content strategic partners both<br />
individual and juristic-person through business contracts to build up strength and confidence in present business<br />
operation and in the future.<br />
1.4 Handset Business in Overseas<br />
For handset business in overseas, the Company focuses on market in the countries stable in politics,<br />
economics and society in order to reduce the risk from operation. The Company emphasizes on handset market in<br />
Malaysia and Indonesia. The Company has been building strong relationships with major distributors in each<br />
country to strengthen the distribution channel that is a significant factor in the success of handset business.<br />
Moreover, the Company also intends to expand its business in the countries where Axiata Group Berhard (çAxiataé)<br />
operates its services. Currently, Axiata operates its handset service in 9 Asian countries. The joining with Axiata shall<br />
reduce operation risk and will enable to operate its business in a stable long-term onward.<br />
2. Financial Risk<br />
2.1 Foreign Exchange Risk<br />
The Company and subsidiaries have foreign currency debts and assets as a result of import and export of<br />
products from overseas market which may have an exposure from fluctuation of foreign currency. The Company<br />
closely monitors the movement of foreign exchange rates by using conservative financial policy and no purpose to<br />
speculate on foreign exchange. The Companyûs foreign currency revenues and cost were 3.7% of total revenues<br />
from sales and 83.5% of total cost of sales, respectively. A forward contract has been effectively utilized by the<br />
Company to manage its foreign exchange risk. Additionally, the Company also considers the appropriate financial<br />
instruments including natural hedge. As of December 31, <strong>2010</strong>, the Company and subsidiaries had foreign currency<br />
assets and debts of USD 48.09 million of which USD 23.16 million are covered by forward contracts.<br />
2.2 Interest Rate Risk<br />
The Company exposures to interest rate risk relating to borrowings from banks. Unfavorable movements<br />
in interest rates shall affect financial cost that has effect to the Companyûs cash flows. As the end of <strong>2010</strong>, the<br />
Company and subsidiaries had borrowings from banks of Baht 2,334.5 million, or 77.4% of total liabilities, and<br />
all borrowings are short-term borrowings as well as interest rate structure is floating rates. The Company closely<br />
monitors the interest rate in market and considers the appropriate borrowing term and considers borrowing in USD<br />
that has cheaper interest rate, the Company has lower financial cost. Given any signs of volatility, the Company<br />
may use derivative financial instruments to hedge such risks.<br />
2.3 Credit Doubtful Debt<br />
The Company is exposed to Credit risk primarily through trade accounts. The consolidated trade account<br />
receivables as of December 31, <strong>2010</strong> were Baht 2,964 million of which Baht 34 million were outstanding more than<br />
12 months, a decrease of Baht 4 million from end of 2009. The Company has provided Baht 24 million towards<br />
doubtful accounts, an increase of Baht 4 million from end of 2009. The management is confident that all risk from<br />
account receivable collection has been well managed as Company set up credit control system to consider risk<br />
level and close monitoring of collection.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 19
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
2.4 Contingent liabilities<br />
In August 2008, <strong>Samart</strong> I-<strong>Mobile</strong> (Hong Kong) Limited, a subsidiary company, received a letter from the<br />
Inland Revenue Department of Hong Kong (çIRDé) questioning the deductibility of consultancy fees and<br />
management fees paid to I-<strong>Mobile</strong> International Co., Ltd., another subsidiary company, in relation to the 2007<br />
income tax return. Management of the subsidiary had submitted a reply letter to IRD in June 2009 to provide<br />
information in relation to the deductibility of consultancy fees and management fess in income tax return. In<br />
addition, the IRD issued another letter in December 2009 to request further information from subsidiary company<br />
regarding the consultancy fees and management fees totally USD 15.75 million for the year 2006 - 2008. Response<br />
from IRD has not yet been received. However, the management are of the opinion that as the consultancy fee<br />
and management fee are related to the business activities and, therefore, should be fully deductible for income<br />
tax purposes, no additional income tax provision or related expenses is required for the year 2006 - 2008. The<br />
maximum tax exposure would be 17.5% on the amount of consultancy fees and management fees.<br />
2.5 Guarantee to subsidiary companies<br />
The Company has contingent liabilities in respect of the guarantee of subsidiariesû short-term credit<br />
facilities for their jointly working capital. The Company may have the risk from default on the guaranteed loans.<br />
However, the Company always closely monitors subsidiariesû operating result and financial status. The management<br />
is confident that there is no event of defaults. As of December 31, <strong>2010</strong>, subsidiariesû outstanding loans which were<br />
guaranteed by the Company were Baht 1,145 million.<br />
3. Risk from major shareholders holding over 50% of the shares<br />
<strong>Samart</strong> Corporation Public Company Limited and its subsidiaries hold 2,578,377,200 shares or 59.94% of the<br />
Companyûs issued and paid-up capital which can control most of the shareholdersû resolutions on various important<br />
matters such as the appointment of directors, or other resolutions that need a majority votes of the shareholders, except<br />
for those resolutions that require 75% of the shareholdersû votes, as specified by the law or the Companyûs Articles of<br />
Association. As a result, other shareholders may not be able to gather enough votes to offset the major shareholdersû<br />
influence. However, the Company appointed 3 independent directors to be the Audit Committee to review the connected<br />
transactions or the transactions that may lead to conflicts of interests to ensure that they are in compliance with the law<br />
and the regulations of the SET and the SEC, and are reasonable and for the highest benefit of the Company.<br />
4. Risk from the change of major shareholders as a result of share mortgage<br />
<strong>Samart</strong> Corporation Public Company Limited (SAMART) entered into loan agreements with a Thai bank, under this<br />
agreement SAMART agreed to mortgage 1,220 million shares or 28.36% of the Companyûs paid-up capital which it was<br />
holding as securities against the loan repayment of SAMART. Currently, the outstanding loans of these agreements of<br />
SAMART were approximately 10% of the principal loans of Baht 2,250.25 million. If SAMART violates the loan agreement<br />
and the bank uses its right to enforce the mortgage by selling the mortgaged shares to the market, there will be no change<br />
in the major shareholders. However, this may affect the power to control the Companyûs business. This is because after<br />
such mortgage enforcement, SAMART and its subsidiaries will continue to hold altogether a total of 31.58% of the<br />
Companyûs paid capital. This will allow the shareholders who purchase all of the said shares to veto the resolutions at the<br />
shareholdersû meeting on various important matters which the Companyûs Articles of Association or related laws require<br />
75% of the total votes of the shareholders who are present and have the right to vote must be received.<br />
20<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
Shareholders<br />
As of December 30, <strong>2010</strong>, the top ten shareholders of the Company are as follows:<br />
Shareholderûs Name No. of Share %<br />
1. Group of <strong>Samart</strong> Corporation Plc. 1 2,578,377,200 59.94<br />
2. Axiata Group Berhad 1,050,000,000 24.41<br />
3. Mr. Somchai Vimokcharoensuk 90,982,700 2.12<br />
4. Mr. Suriya Dejchanccchaiyooth 81,722,600 1.90<br />
5. Vilailuck Group 2 80,238,000 1.86<br />
6. Mr. Somruay Saelim 77,141,700 1.80<br />
7. M.L. Soonthornchai Chayangkool 50,946,700 1.18<br />
8. Mr. Choochai Supniti 30,445,700 0.71<br />
9. Mr. Theerawat Pjpatdittakul 23,403,800 0.54<br />
10. Mr. Thanakorn Boonkongchuen 22,534,400 0.53<br />
Total shares of top ten shareholders 4,085,792,800 94.99<br />
Total shares of minority shareholders 215,507,200 5.01<br />
Total of issued and paid up shares 4,301,300,000 100.00<br />
Source: The Companyûs shareholder registration as of December 30, <strong>2010</strong> from Thailand Securities Depositary Co., Ltd.<br />
1<br />
Group of <strong>Samart</strong> Corporation Plc.: No. of Share %<br />
- <strong>Samart</strong> Corporation Public Company Limited 2,506,764,400 58.28<br />
- <strong>Samart</strong> Telcom Public Company Limited 68,992,800 1.60<br />
- <strong>Samart</strong> International Co., Ltd. 2,620,000 0.06<br />
Total 2,578,377,200 59.94<br />
2<br />
Vilailuck Group: No. of Share %<br />
- Vilailuck International Holding Co., Ltd. 53,090,000 1.23<br />
- Mrs. Sukanya Vanichjakvong 26,617,000 0.62<br />
- Mr. Watchai Vilailuck 481,000 0.01<br />
- Ms. Sirirak Vilailuck 50,000 0.00<br />
Total 80,238,000 1.86<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 21
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Management Structure<br />
Management Structure of the Company<br />
The Companyûs management structure comprises of the Board of Directors and 5 committees; Audit Committee,<br />
Corporate Governance Committee, Executive Committee, Risk Management Committee and Nominating and Compensation<br />
Committee.<br />
Management Structure<br />
Board of Directors<br />
Corporate Secretary<br />
Audit<br />
Committee<br />
Corporate Governance<br />
Committee<br />
Executive<br />
Committee<br />
Risk Management<br />
Committee<br />
Nominating and<br />
Compensation Committee<br />
Internal Audit<br />
--------------------------<br />
Chief Executive<br />
Officer<br />
President<br />
Chief Operating<br />
Officer<br />
<strong>Mobile</strong><br />
Business<br />
Multimedia<br />
Business<br />
International<br />
Business<br />
Finance and Accounting<br />
Operation<br />
Buiness Development<br />
22<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
Board of Directors as of December 31, <strong>2010</strong>:<br />
1. Professor Suphachai Phisitvanich Chairman of the Board of Directors / Independent Director<br />
2. Dr. Chotivid Chayavadhanangkur Independent Director<br />
3. Mr. Kunthit Arunyakananda Independent Director<br />
4. Mr. Charoenrath Vilailuck * Director<br />
5. Mr. Watchai Vilailuck * Director<br />
6. Mr. Thananan Vilailuck * Director<br />
7. Mr. Jong Diloksombat Director<br />
8. Mr. Azwan Khan bin Osman Khan ** Director<br />
9. Mr. Reza bin Abdul Rahim ** Director<br />
Miss Boonrut Mongkolratanakorn Corporate Secretary<br />
Remarks: * Representative directors from <strong>Samart</strong> Corporation Plc., a major shareholder, with 58.28% stake holding.<br />
** Representative directors from Axiata Group Berhad, a major shareholder, with 24.41% stake holding.<br />
The number of directors is in line with the Companyûs Articles of Associations that the Board of Directors should have<br />
at least 7 members. Not less than one half of such members shall have residence within the Kingdom and the directors of the<br />
Company shall have qualification as specified by law.<br />
Authorized Directors as of December 31, <strong>2010</strong> are as follows:<br />
Two out of the following three directors are authorized to sign on behalf of the Company with the Companyûs seal affixed:<br />
Mr. Charoenrath Vilailuck, Mr. Watchai Vilailuck and Mr. Thananan Vilailuck or one director from Mr. Charoenrath Vilailuck, Mr.<br />
Watchai Vilailuck, Mr. Thananan Vilailuck co-sign with Mr. Jong Diloksombat with the Companyûs seal affixed.<br />
Qualifications of Director<br />
1. Has qualifications which comply to Public Company Act B.E. 2535 or related laws including regulations of the Stock<br />
Exchange of Thailand, the Securities and Exchange Commission, and Companyûs Articles of Association.<br />
2. Does not run any business, which is competed with the Company, and not being a shareholder of any legal entities<br />
whose business is the Companyûs competitors except obtained approval from the shareholdersû meeting.<br />
3. Should have leadership, vision, and independent consideration for best benefit of the Company and the shareholders.<br />
4. Has various knowledge, experience, and specific skill that suitable for the Company business.<br />
5. Integrity.<br />
6. Has sufficient time for fully participated as a Director of the Company.<br />
Qualifications of Independent Director<br />
1. Holding share not exceeding 1 percent of the total number of shares with voting rights of the Company, parent company,<br />
subsidiaries, associate company, major shareholder or controlling person of the Company, including shares held by related<br />
persons of such independent director.<br />
2. Neither being nor used to be an executive director, employee, staff or advisor who receives a salary; or controlling person<br />
of the Company, parent company, subsidiaries, associate company, same-level subsidiaries, major shareholder or<br />
controlling person of the Company unless the foregoing status has ended not less than two years prior to the date<br />
of appointment.<br />
3. Not being a person related by blood or legal registration such as father, mother, spouse, sibling and child, including spouse<br />
of child of executive, major shareholder, controlling persons, or persons to be nominated as executive or controlling person<br />
of the Company or subsidiaries.<br />
4. Neither being nor having a business relationship with the Company, parent company, subsidiaries, affiliates, major<br />
shareholder or controlling person of the Company, including professional or business advisor which been specified by the<br />
Securities and Exchange Commission (çSECé) unless either the foregoing status has ended not less than two years prior<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 23
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
to the date of appointment or the transaction is irregular and reasonable. The independent director, during his term, may<br />
have business relation with the Company over the level set by the SEC but prior the transaction, unanimous approval by<br />
the Board of Directors is required.<br />
5. Not being a director appointed as a representative of directors of the Company, major shareholder or shareholder who<br />
is related to the Companyûs major shareholder.<br />
6. Not undertaking any business in the same nature and in significant competition to the business of the Company or<br />
subsidiaries or not being a partner in a partnership or being an executive director, employee, staff, advisor who receives<br />
salary or holding shares exceeding 1 percent of the total number of shares with voting rights of other company which<br />
undertakes business in the same nature and in significant competition to the business of the Company or subsidiaries.<br />
7. Not having any characteristic which cause the inability to express independent opinions with regard to the Companyûs<br />
business operations.<br />
Terms of positions<br />
Pursuant to the Public Company Acts B.E. 2535, at first <strong>Annual</strong> General Meeting of Shareholders after the registration of<br />
the Company and at the first <strong>Annual</strong> General Meeting of Shareholders in every subsequent year one-third of the directors, who<br />
have been longest in office, shall retire. The retired directors are eligible to be re-elected for another term by obtaining majority<br />
vote from the Nominating and Compensation Committee. However the independent directors shall be in post no longer than 3<br />
terms except getting a unanimous approval from the Nominating and Compensation Committee due to his/her contribution to<br />
the Company and the Committee ensures that the extra term will not cause or impact to the independent of such director, and<br />
shall be approved from the Board of Directors and/or the Shareholdersû Meetings.<br />
Scope of Responsibilities and Authority of the Board of Directors<br />
1. Conduct business with responsibility, due care, and integrity uphold the duties according to the law, and the Companyûs<br />
objectives, Articles of Association, resolutions of the Board of Directors and shareholdersû meeting.<br />
2. Formulate policies and directions for the Companyûs operations. The Board must also supervise managerial and<br />
administrative departments to deliver all policies with effectiveness and efficiency.<br />
3. Appoint directors to replace of those who retire by rotation as well as consider the remuneration package for such<br />
directors and committeesû members, which are proposed by Nominating and Compensation Committee, for further<br />
consideration of the shareholdersû meeting.<br />
4. Appoint committees to oversee administrative process and internal system to coincide with Companyûs policies namely,<br />
Executive Committee, Risk Management Committee, Corporate Governance Committee and Nominating and Compensation<br />
Committee. For the appointment of Audit Committee members, the Nominating and Compensation Committee will<br />
nominate appropriated candidates propose for further consideration of the Board of Directors and/or shareholdersû<br />
meeting.<br />
5. Appoint and consider remuneration package, proposed from the Nominating and Compensation Committee, for top<br />
executives and company secretary.<br />
6. Summarize annual budget and financial statements of the Company every end of the fiscal year. Authorize the statements<br />
for further consideration of the <strong>Annual</strong> General Meeting of Shareholders.<br />
7. Nominate appropriated auditor and its remuneration from proposal of the Audit Committee for further consideration of<br />
the <strong>Annual</strong> General Meeting of Shareholders.<br />
8. Ensure that the Company has written Corporate Governance Policy and Business Ethic as well as to ensure that there<br />
will be no conflicts of interest at the same time to establish systematic plans for internal control and risk management.<br />
9. Ensure that good corporate governance is implemented to demonstrate the Companyûs commitment to operate the<br />
business with ethics and to bring fair treatment to all stakeholders.<br />
10. In case of entering into any direct or indirect transaction with the Company and subsidiaries, such director has to<br />
immediately inform his/her or related partiesû interest to the Company.<br />
24<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
Audit Committee as of December 31, <strong>2010</strong>:<br />
1. Dr. Chotivid Chayavadhanangkur Chairman of the Audit Committee<br />
2. Professor Suphachai Phisitvanich Audit Committee Member<br />
3. Mr. Kunthit Arunyakananda Audit Committee Member<br />
Miss Boonrut Mongkolratanakorn Secretary<br />
Remarks: All members of audit committee have adequate knowledge and experience to review creditability of the Companyûs financial<br />
statement.<br />
The Audit Committeeûs members have to be the independent directors who were elected by the Nominating and<br />
Compensation Committee and proposed for the appointment of the Companyûs Board of Directorsû and/or the shareholdersû<br />
meetings, the Audit Committee shall at least 3 members.<br />
Qualifications of the Audit Committee<br />
1. The Audit Committee members shall be appointed by the Board of Directors and/or shareholdersû meetings.<br />
2. All members should be Independent Directors as the definition of independent director qualification from the SEC as<br />
described under çQualifications of Independent Directoré.<br />
3. Not being a director assigned by the Board of Directors to take part in the business decision of the Company, parent<br />
company, subsidiaries, associate company, same-level subsidiaries major shareholder or controlling person of the<br />
Company.<br />
4. Not being a director of parent company, subsidiaries, and same-level subsidiaries which is a listed Company.<br />
5. Having sufficient knowledge, experience, and time to perform duties as the Audit Committee members.<br />
6. At least 1 member of the Audit Committee shall have sufficient knowledge and experience to review the reliability of<br />
financial statement, the Company has to define in filling form, Form 56-1 and Form 56-2 for name of the Audit Committee<br />
member who has that qualification, and has to define his/her qualification in the certification of the Audit Committee<br />
profile that should be sent to the SET.<br />
Terms of positions<br />
Term of the Audit Committee member is 3 years. All members shall be in post no longer than 3 terms except getting a<br />
unanimous approval from the Nominating and Compensation Committee and the Committee ensures that the extra term will not<br />
cause or impact to the independent of such director, and shall be approved from the Board of Directors and/or the shareholdersû<br />
meetings.<br />
Scope of Responsibilities and Authority of the Audit Committee<br />
1. Review the Companyûs financial statement to ensure its accuracy and adequacy.<br />
2. Review the Companyûs internal control, and internal audit system to ensure that they are suitable and efficient, to<br />
determine the independence of internal audit unit, as well as to approve the appointment, transfer and dismissal of the<br />
chief of an internal audit unit or any other unit in charge of an internal audit.<br />
3. Review the Companyûs compliance with the Securities and Exchange Act, the regulations of the SET and the laws<br />
relating to the Companyûs business.<br />
4. Consider, select and nominate an independent person to be the Companyûs auditor, and propose its remuneration for<br />
further consideration of the Board of Directors and shareholdersû meeting.<br />
5. Attend a non-management meeting with an auditor at least once a year.<br />
6. Review the connected transactions or the transactions that may lead to conflicts of interests to ensure that they are in<br />
compliance with the law and the regulations of the SET, and are reasonable and for the highest benefit of the Company.<br />
7. Prepare report of the Audit Committee to be disclosed in the annual report with at least information defined in the<br />
notification of the SET.<br />
8. Perform any other activities as assigned by the Board of Directors.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 25
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Corporate Governance Committee as of December 31, <strong>2010</strong>:<br />
1. Dr. Chotivid Chayavadhanangkur Chairman of the Corporate Governance Committee (Independent Director)<br />
2. Mr. Kunthit Arunyakananda Member (Independent Director)<br />
3. Mr. Jong Diloksombat Member<br />
4. Mr. Pairote Varophas Member<br />
Miss Boonrut Mongkolratanakorn Secretary<br />
Terms of positions<br />
Term of each member is 1 year. The Nominating and Compensation Committee will annually consider and select appropriate<br />
persons from the members of the Board of Directors and/or any qualified candidates propose for further consideration and<br />
appointment from the Board of Directors in the first board meeting after the <strong>Annual</strong> General Meeting of Shareholders. The Chairman<br />
of the Committee has to be nominated from the Companyûs Independent Director. However, the retired members are eligible to be<br />
re-elected for another term.<br />
Scope of Responsibilities and Authority of the Corporate Governance Committee<br />
1. Responsible for governing and monitoring business operation and performance of committees, management and<br />
employees of the Company to comply with the principles of good corporate governance, Companyûs policies and related<br />
laws.<br />
2. Establish and review the Companyûs significant procedures and practices to comply with the principles of good corporate<br />
governance.<br />
3. Regularly review the Companyûs policies, principles and practices.<br />
4. Provide suggestions relevant to business ethics and best practices to the Companyûs directors, management and<br />
employees.<br />
5. Ensure that the principles of good corporate governance are performed on practice continuously and appropriately.<br />
6. <strong>Report</strong> to the Board of Directors the Companyûs good corporate governance along with its opinions for the practices and<br />
recommendations for appropriate improvements.<br />
Executive Committee as of December 31, <strong>2010</strong>:<br />
1. Mr. Watchai Vilailuck Executive Chairman<br />
2. Mr. Thananan Vilailuck Member<br />
3. Mr. Jong Diloksombat Member<br />
Miss Boonrut Mongkolratanakorn Secretary<br />
Terms of positions<br />
Term of each member is 1 year. The Nominating and Compensation Committee will annually consider and select appropriate<br />
persons from the members of the Board of Directors and management propose for further consideration and appointment from the<br />
Board of Directors in the first board meeting after the <strong>Annual</strong> General Meeting of Shareholders. However, the retired members are<br />
eligible to be re-elected for another term. CEO of the Company will be the Chairman of the Executive Committee.<br />
Scope of Responsibilities and Authority of the Executive Committee<br />
1. Set Companyûs strategies and business plan as well as the Companyûs management structure and delegation of authorities<br />
for further approval of the Board of Directors.<br />
2. Audit, monitor and implement the Companyûs policies and management practices to conform to the assignment from the<br />
Board of Directors efficiently.<br />
3. Consider and approve annual budget of the Company for further approval of the Board of Directors.<br />
4. Consider remuneration policy and salary structure and propose to the Nominating and Compensation Committee for<br />
consideration prior to further approval of the Board of Directors.<br />
26<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
5. Act on behalf or in the name of the Company as delegation of authorities defined in the Companyûs policy and practice.<br />
6. Carry out other work as assigned by the Board of Directors.<br />
The delegation of authorities, duties and responsibilities of the Executive Committee shall not be delegated or further<br />
assigned that authorize the Executive Committee or its attorney to approve any transactions that the Executive Committee or<br />
connected persons or any persons who may have conflict of interest have done with the Company or its subsidiaries unless<br />
such transactions are complied with the Companyûs policy or principle approved by the Board of Directors. Such connected<br />
transactions shall be proposed to the Board of Directorsû and/or shareholdersû meetings for approval to comply with the<br />
notification of the Stock Exchange of Thailand, the Securities and Exchange Commission (SEC) or related law.<br />
Risk Management Committee as of December 31, <strong>2010</strong>:<br />
1. Mr. Watchai Vilailuck Chairman of the Risk Management Committee<br />
2. Mr. Sirichai Rasameechan Member<br />
3. Mr. Jong Diloksombat Member<br />
4. Mr. Thananan Vilailuck Member<br />
5. Mr. Adithep Nisamaneevong Member<br />
6. Mr. Teerawut Kreepanich Member<br />
Miss Boonrut Mongkolratanakorn Secretary<br />
Terms of positions<br />
Term of each member is 1 year. The Nominating and Compensation Committee will annually consider and select<br />
appropriate persons from the members of the Board of Directors, management and/or any qualified candidates propose for<br />
further consideration and appointment from the Board of Directors in the first board meeting after the <strong>Annual</strong> General Meeting<br />
of Shareholders. However, the retired members are eligible to be re-elected for another term. The nominated committeeûs<br />
member will appoint the chairman of Risk Management Committee from the committeeûs members.<br />
Scope of Responsibilities and Authority of the Risk Management Committee<br />
1. Set clear business directions, identify, analyze and investigate significant risk factors as well as specify strategies to<br />
manage those risks.<br />
2. Set risk management standards for use as guidelines in each work unit.<br />
3. Supervise to ensure that such measures are fully communicated and employees have complied with them.<br />
4. Provide for a systematic and continued evaluation and analysis of damage that may occur to make sure that risk survey<br />
has covered all processes of business operations.<br />
5. Support and develop risk management continually to cover all organization and comply with international standard.<br />
Nominating and Compensation Committee as of December 31, <strong>2010</strong>:<br />
1. Mr. Kunthit Arunyakananda Chairman of the Nominating and Compensation Committee (Independent Director)<br />
2. Dr. Chotivid Chayavadhanangkur Member (Independent Director)<br />
3. Mr. Reza bin Abdul Rahim Member<br />
4. Mr. Sirichai Rasameechan Member<br />
Miss Boonrut Mongkolratanakorn Secretary<br />
Terms of positions<br />
One-third of the Nominating and Compensation Committee, who have been longest in office, shall retire by rotation every<br />
year. The retired directors are eligible to be re-elected for another term by obtaining majority vote from the Board of Directors.<br />
In case of vacancy, the Nominating and Compensation Committee will consider an appropriate person from the members of the<br />
Board of Directors and/or any qualified candidates and propose to the Board of Directors for appointment.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 27
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Scope of Responsibilities and Authority of the Nominating and Compensation Committee<br />
1. Recruit, select, and nominate appropriate candidates for independent directors, Chairman of the Board, Board of Directors<br />
proposed for consideration and approval of Board of Directorsû and/or the shareholdersû meetings when those positions are<br />
vacant due to termination of terms or other reasons.<br />
2. Recruit, select, and nominate appropriate candidates for position members of each committee, CEO, top management and<br />
company secretary proposed to consideration of Board of Directors when such position is vacant as well as propose<br />
criteria for selecting candidates for the succession plan.<br />
3. Propose to the Board of Directors the guidelines and reasonable remuneration packages for all members of the boards<br />
and executives of which must be complimented to their duties, conform to the Companyûs operating performance and<br />
marketûs atmosphere.<br />
4. Evaluate the Companyûs performance for consideration of the annual bonus and merit increase.<br />
5. Review the Companyûs salary structure and any other remuneration.<br />
The Management as of December 31, <strong>2010</strong>:<br />
1. Mr. Watchai Vilailuck Chief Executive Officer<br />
2. Mr. Thananan Vilailuck President<br />
3. Mr. Jong Diloksombat Chief Operating Officer<br />
4. Miss Chullada Sapsarasin General Manager<br />
5. Miss Supannee Thawinwang VP- Marketing Integration<br />
6. Mrs. Sumontip Srimek VP- Account<br />
7. Mr. Adithep Nisamaneevong VP- Finance<br />
Scope of Responsibilities and Authority of Chief Executive Officer<br />
1. Manage and control general business operation of the Company to comply with its objectives, policy and the Articles of<br />
Association.<br />
2. Consider investment plans before proposing to the Executive Board and the Board of Directors for further approval.<br />
3. Act on behalf or in the name of the Company as delegation of authorities defined in the Companyûs policy and practice.<br />
4. Carry out any assignment from the resolutions of the Board of Directors and/or the Companyûs shareholders meetings.<br />
The delegation of authorities, duties and responsibilities of CEO shall not be delegated or further assigned that authorize<br />
CEO or its attorney to approve any transactions that CEO or connected persons or any persons who may have conflict of<br />
interest have done with the Company or its subsidiaries unless such transactions are complied with the Companyûs policy or<br />
principle approved by the Board of Directors. Such connected transactions shall be proposed to the Board of Directorsû and/or<br />
shareholdersû meetings for approval to comply with the notification of the Stock Exchange of Thailand, the Securities and<br />
Exchange Commission (SEC) or related law.<br />
Nomination of Directors and Management<br />
The Nominating and Compensation Committee has been appointed by the Board of Directors in order to select, and<br />
nominate appropriate candidates for positions of Chairman of the Boards, members of the Boards and other committees, CEO,<br />
other executives and company secretary as well as consider the appropriate remuneration for such directors and management.<br />
Whenever the position of directors are vacant, the Nominating and Compensation Committee will select and nominate the<br />
appropriate candidates for such position propose to the Board of Directors for approval and for further approval of the<br />
shareholders in case of vacancy by rotation or appointing of new director. The elected directors should obtain more than onehalf<br />
vote from shareholders who attend the meeting and have voting right. Each shareholder shall have one vote on each share.<br />
In voting, a shareholder shall vote in accordance with the number of votes each shareholder has for one or several directors. The<br />
said shareholder may not allot any number of his/her votes to any person. For election of independent directors, the Nominating<br />
and Compensation Committee will nominate any person who is fully complied with the qualifications of Independent Directors<br />
under the Companyûs policy as well as complying to such requirements of the SEC and the SET as a minimum. Moreover,<br />
28<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
the Board of Directors of the Company has also appointed other committees to help the Board on its business either audit<br />
or consideration any significant matters. Such Committees are the Executive Committee, the Audit Committee, the Risk<br />
Management Committee, the Corporate Governance Committee and the Nominating and Compensation Committee. The<br />
nomination of members of the committee will be selected and nominated by the Nominating and Compensation Committee<br />
prior to propose for consideration of the Board of Directors of the Company.<br />
Executive Succession Plan<br />
The Company is aware of the importance of executive succession plan when any executive position is vacant. In order<br />
to create confidence for investors, shareholders and employees on the continuity operation of the Company, an Executive<br />
Succession Plan has been considered. The potential candidate will be selected, trained and developed to be ready to<br />
accommodate the vacant position in the future.<br />
Remuneration of Directors and Management<br />
Remuneration of Directors<br />
Policy of Directorsû Remuneration has been clearly and transparently set to be comparable to the general practice in<br />
same industry and be appealing enough to attract and retain qualified directors. The directors who also be appointed to be the<br />
member of any sub-committees will be paid appropriately more in accordance with the extra work. The Nominating and<br />
Compensation Committee will consider the remuneration and propose for consideration of the Board of Directors prior to further<br />
approval from the shareholders. The Shareholders in the <strong>Annual</strong> General Meeting 2009 approved remuneration for directors of<br />
the Company and Committeesû members at the amount of not exceeding Baht 5 million which consists of meeting allowance<br />
and bonus. The meeting allowance for each meeting participated of the Board of Directors and Committees was shown below:<br />
Position<br />
Allowance per Meeting (Baht)<br />
Chairman of the Board of Directors 30,000<br />
Director 15,000<br />
Chairman of the Audit Committee 20,000<br />
Audit Committee Member 15,000<br />
Chairman of the Corporate Governance Committee 15,000<br />
Corporate Governance Committee Member 10,000<br />
Chairman of the Nominating and Compensation Committee 15,000<br />
Nominating and Compensation Committee Member 10,000<br />
There is no consideration of meeting allowance for the Executive Committee and the Risk Management Committee since<br />
all members are the Companyûs executives.<br />
Remuneration of Management<br />
Remuneration for the management will be determined in accordance with the principles and policy set by the Nominating<br />
and Compensation Committee which be related to the performances of the Company and each management.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 29
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Total Remuneration in <strong>2010</strong><br />
1. Monetary<br />
1.1 The meeting allowance and bonus of the Board of Directors and Committees are as follows:<br />
Name<br />
Meeting Allowance (Baht)<br />
Audit Corporate Nominating and Bonus Total<br />
Director Committee Governance Compensation (Baht) (Baht)<br />
Committee Committee<br />
1. Professor Suphachai Phisitvanich 210,000 75,000 - - 250,000 535,000<br />
2. Dr. Chotivid Chayavadhanangkur 105,000 100,000 30,000 30,000 200,000 465,000<br />
3. Mr. Kunthit Arunyakananda 105,000 75,000 20,000 45,000 200,000 445,000<br />
4. Mr. Charoenrath Vilailuck 105,000 - - - 200,000 305,000<br />
5. Mr. Watchai Vilailuck 105,000 - - - 200,000 305,000<br />
6. Mr. Thananan Vilailuck 105,000 - - - 200,000 305,000<br />
7. Mr. Jong Diloksombat 105,000 - 20,000 - 200,000 325,000<br />
8. Mr. Azwan Khan bin Osman Khan 45,000 - - - 200,000 245,000<br />
9. Mr. Reza bin Abdul Rahim 30,000 - - 10,000 200,000 240,000<br />
10. Mr. Sirichai Rasameechan - - - 30,000 200,000 230,000<br />
11. Mr. Pairote Varophas - - 20,000 - 200,000 220,000<br />
Total 915,000 250,000 90,000 115,000 2,250,000 3,620,000<br />
1.2 Monetary Remuneration of 7 managements is as follows:<br />
Type<br />
Amount (Baht)<br />
Salary 17,832,840<br />
Bonus 1,521,115<br />
Provident Fund 1,511,630<br />
Total 20,865,585<br />
2. Other Remuneration<br />
On May 29, 2009, the Company issued 100,250,000 warrants to the Companyûs directors and employees of the<br />
Company and its subsidiaries at Baht 0 per unit. The warrants have an exercise ratio at 1:1, are exercisable at a price of<br />
Baht 1.7 per share, and have an exercise period of five years period from the issue date, expiring on May 28, 2014. The<br />
warrants are exercisable on the 15 th of the last month of each quarter throughout their terms, from June 15, 2009 to May<br />
28, 2014.<br />
Dividend Payment Policy<br />
The Company has policy to pay dividend no less than 50% of its consolidated net profit after deduction of all reserves<br />
as stated in the Companyûs Articles of Association and related laws, subject to need for future investment and business plan.<br />
The Companyûs subsidiary and associated companies have policy to pay dividend no less than 50% of their net profit after<br />
deduction of all reserves as stated in the Companyûs Articles of Association and related laws, and consideration of Companyûs<br />
financial position.<br />
Inside Information Control<br />
The Company will inspect to unsure no inside information of which is material, undisclosed and confidential leak to public<br />
or be used from unauthorized for personal benefit. IT system has been implemented for a secure access for all users inside and<br />
outside the firewall in conjunction with the Companyûs own user authentication and security system. In addition, the Company<br />
30<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
sets as policy that all employees shall acknowledge and sign the agreement of non-disclosure confidential information, nonviolation<br />
of concealment of computer related and non-infringement of intellectual property. New employee shall sign this<br />
agreement together with employment contact. It was also set forth in the Companyûs Business Ethics refuse to the directors,<br />
management and employees of the Company to use Companyûs inside information for personal benefits. Any trading of The<br />
Company securities within one month prior to disclosure of either Companyûs financial performance or any other information that<br />
may affect securitiesû price is prohibited. In addition, directors and executives have to disclose their interest and related person,<br />
and inform to the Board of Directors when they have connected transaction. The Company has drawn out guidelines in the<br />
Business Ethics under çconflict of interesté, and informed to all employees to comply with.<br />
The Directors and management of the Company had been informed on their duties and punishment regarding to report on<br />
securities holdings of themselves, their spouse and any minor children to the Stock Exchange of Thailand (SET) within 3 days from<br />
the transaction date and as stipulated penalty Section 59 according to the Securities and Exchange Act B.E. 2535. The Directors<br />
and management have to report such information to the Company Secretary for further handling and report to the Securities and<br />
Exchange Commission (SEC). In addition, the Company has set as a policy to report on securities holdings of directors and<br />
managements in every meeting of the Board of Directors and disclosed on the Companyûs website.<br />
Moreover, the Corporate Governance Committee has been assigned to govern and monitor the performance of the<br />
Company to comply with the related regulations continuously and appropriately.<br />
Human Resource<br />
Number of employees of the Company and its subsidiaries classified by line of business for the pass 3 years are as<br />
follows:<br />
Line of business<br />
Number of Employees (persons)<br />
2008 2009 <strong>2010</strong><br />
1. <strong>Mobile</strong> Business 725 692 668<br />
2. Multimedia Business 157 141 154<br />
3. International Business 274 61* 40<br />
4. Support Business 267 233 220<br />
Total 1,423 1,127 1,082<br />
Note: * Number of employees was greatly decreased compared to 2008 due to during the year 2009, I-<strong>Mobile</strong> International Co., Ltd.,<br />
a subsidiary company, sold shares of I-<strong>Mobile</strong> Sdn. Bhd., another subsidiary company in Malaysia.<br />
Expenses related to the employees of the Company and subsidiaries for the pass 3 years of which comprised salary,<br />
bonus, provident fund, warrants and others such as special grant, O/T and commission are as follows:<br />
Remuneration<br />
Amount<br />
2008 2009 <strong>2010</strong><br />
Salary (Million Baht) 290.70 231.23 219.72<br />
Bonus (Million Baht) 15.99 17.7 15.12<br />
Provident Fund (Million Baht) 7.57 7.91 7.38<br />
Others (Million Baht) 100.26 68.69 95.35<br />
Total (Million Baht) 414.52 325.53 337.57<br />
Warrants * (Million Unit) - 42.35 -<br />
Note: * On May 29, 2009, the Company issued 100,250,000 warrants to the Companyûs directors and employees of the Company and<br />
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,<br />
and have an exercise period of five years period from the issue date, expiring on May 28, 2014. The warrants are exercisable<br />
on the 15th of the last month of each quarter throughout their terms, from June 15, 2009 to May 28, 2014.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 31
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Human Resource Development<br />
Top management has strong belief that the employee is vital resources to grow a sustainable and competitive business.<br />
Therefore, Human Resource has been developed continuously to foster knowledge, skill and capability with the management<br />
system tools such as Competency Assessment, Performance Management, HR centralized database system and others. These<br />
should ensure that the employeeûs capability should be developed the appropriately and continuously as well as compliance with<br />
corporate competency expectation to support current and future businesses.<br />
The Company has realized the importance of continuous support on Human Resources Development by providing a<br />
variety of training and development courses both in-house and outer trainings. In addition, the Company has initiated several<br />
new programs to improve employeesû capabilities continuously and systematically in order to increase their knowledge, skills<br />
and working behaviors to ensure that employees have appropriate capabilities for their own accountability aligning to the<br />
Companyûs policy and leading to the sustainable growth. The initiated programs are as follows:<br />
1. Career Development Program<br />
Career Development Program, individual career path development plan, for both management and operation level<br />
has been established for which employees could perceive their own career development by competency assessment and<br />
analysis. The Company has conducted individual annual learning and development roadmap for all levels of employee<br />
focusing on Generic Competency to enhance corporate skill and working behavior, Managerial Competency and<br />
Functional Competency. Career Development Program should enable employees growing their own career steadily and<br />
providing more value to the Company in the long run.<br />
2. Performance Development Program<br />
The Company has developed performance appraisal by which Key Performance Indicator (KPIs) has been applied<br />
to all levels of employees and also enable them clearer goal and more appropriate working direction. Key Competency<br />
has been considered in performance appraisal process to increase effective performance.<br />
3. Management Development Program<br />
The Company has developed management training courses for senior management level specifically to strengthen<br />
their leadership and management skills providing new and useful knowledge to apply in their routine work. These programs<br />
lead management to enhance their skills to prepare for their own career advancement and promotion supporting the<br />
Companyûs growth to match the current and future businesses.<br />
4. Talent Management Program<br />
The Company believes that the employee is the most valuable asset leading to corporate achievement. Hence, the<br />
employee who has high performance and high potential should be developed by providing special training courses and<br />
career path planning for such employee. Talent Management Program aimed to retain talented employee by serving<br />
fast-track career progress and enhance their knowledge and competencies to fully apply to their work as well as build<br />
up their sense of engagement toward work and the company.<br />
5. Self-Development Program<br />
The Company set the year <strong>2010</strong> as the year of reading and learning. The Company has provided special courses<br />
and activities throughout the year to create reading culture and learning behavior in the organization including various<br />
activities such as Friend recommended book, Book Barter Campaign, Management recommended book, and providing<br />
variety of books supporting the learning needs of employees. These activities enhance the employeesû learning and share<br />
their knowledge throughout the organization thus leading the Company to create a learning society.<br />
32<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
Summary of Training to management and employees in <strong>2010</strong><br />
Training Frequency Number of Participants<br />
In-House Training<br />
Management 35 442<br />
Employees 80 1,662<br />
Total 115 2,104<br />
External Training<br />
Management 16 16<br />
Employees 30 66<br />
Total 46 82<br />
Remark: The Company has policy to train all sale representatives about the Companyûs products and services on a monthly basis.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 33
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
<strong>Report</strong> of<br />
the Corporate Governance Committee<br />
To<br />
Shareholders<br />
The Company realizes the importance of business and management guidelines for good corporate governance seriously<br />
and concretes a vital role in business operations resulting in efficient and effective management, sustainable growth and fair<br />
treatment among all stakeholders. The Board of Directors has established the Corporate Governance policy and Business Ethics<br />
in a legible form since 2005, and appointed the Corporate Governance Committee to oversee and monitor the conduct of good<br />
corporate governance and corporate social responsibility guideline at all levels of internal operations which will create good<br />
corporate governance culture and enhance the organizationûs management efficiency.<br />
The Corporate Governance Committee conducted 2 meetings in <strong>2010</strong> to carry out the duties and responsibilities<br />
assigned by the Board of Directors and then propose to the Board of Directors for consideration. The significant matters<br />
considered during the year were summarized as below:<br />
1. Considered and revised the Companyûs corporate governance policy and business ethics to comply with the Principle of<br />
Good Corporate Governance and Corporate Social Responsibility as well as the regulations of the SET, the SEC, and<br />
related laws.<br />
2. Considered and revised all committeesû charters to comply with the Principle of Good Corporate Governance, the<br />
regulations of governed organizations and the Companyûs policies.<br />
3. Considered and revised the related policy and practice to comply with the Securities and Exchange Act (No.4) B.E. 2551<br />
and criteria for assessment of corporate governance of Thai listed companies for the year 2011.<br />
4. Considered criteria for the <strong>2010</strong> Board Self-Assessment.<br />
5. Reviewed the Companyûs Corporate Governance <strong>Report</strong> disclosed in the <strong>Annual</strong> <strong>Report</strong> to comply with<br />
the regulations of the SEC.<br />
Due to the continual monitor and development of the Companyûs Corporate Governance Practices, the Company scored<br />
excellent, the highest level of evaluation, both in the surveys of convening the <strong>Annual</strong> General Meeting of shareholders for year<br />
<strong>2010</strong> by the SEC jointly with Thai Investors Association and Listed Companies Association, and in the survey of Corporate<br />
Governance of listed companies <strong>2010</strong> by Thai Institute of Directors with supporting from the SET and the SEC.<br />
The above results of assessments are reflected that the Company emphasizes and recognizes the importance of the<br />
rights of all stakeholders equitably and continues to develop the Companyûs Corporate Governance as principles of the<br />
Companyûs business operation to achieve the objective and target with accuracy and transparency.<br />
(Dr. Chotivid Chayavadhanangkur)<br />
Chairman of the Corporate Governance Committee<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
34<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
<strong>Report</strong> of the Risk Management Committee<br />
To<br />
Shareholders<br />
The Risk Management Committee of the Company realizes both external and internal risk factors that have direct impact<br />
on the business objectives of the Company and its subsidiaries. As a result, the Risk Management Committee reviews and<br />
assesses the risk to specify corrective and preventive measures for such risks as well as monitors risk management measures<br />
continuously. In <strong>2010</strong>, the Risk Management Committee conducted 4 meetings to consider the significant matters as<br />
summarized below:<br />
1. Considered annual risk management plan from the risk factors affected to the Companyûs business operation and<br />
objective assessed by the management of all related departments and prioritized the risks to determine potential<br />
solutions and possible implementation plan to mitigate likelihood of risks that may occur and impact of risks to the<br />
Company as tolerance level.<br />
2. Considered and revised the risk management measures to mitigate the risks any time the Company encounters new risk<br />
factors affecting to the Companyûs business.<br />
3. Monitored and reviewed the compliance with risk management plan in consultation with the management to ensure<br />
quality and appropriateness of the Companyûs risk management. The Risk Management Committee assigns the internal<br />
audit department to follow up and review the risk management measures of each company or department to ensure the<br />
goal achievement.<br />
4. Considered and revised risk management by assigning related management to identify new opportunities. The objective<br />
was to create additional sources of revenues towards achieving sustainable business growth.<br />
The Risk management Committee performs their duties as per the role, authority and responsibility assigned by the<br />
Board of Directors. From the above performance, the Risk Management Committee was of the opinion that the Company<br />
complies with risk management policy continuously and effectively to enhance the Companyûs Corporate Governance, and<br />
comply with international standard and the Principle of Good Corporate Governance of the SET.<br />
(Mr.Watchai Vilailuck)<br />
Chairman of the Risk management Committee<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 35
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
<strong>Report</strong> of the Nominating<br />
and Compensation Committee<br />
To<br />
Shareholders<br />
The Company realizes the importance of recruiting candidates to assume the positions of directors and top executives<br />
as well as their appropriate remuneration packages. Consequently, the Board of Directors appointed the Nominating and<br />
Compensation Committee to carry out these vital functions. The recruitment process involves screening and nominating<br />
candidates who are highly knowledgeable in their fields and have appropriate qualifications for the director and executive<br />
positions. The Compensation process involves setting policies and guidelines for remuneration package for the Board of<br />
Directors, committeesû members, and high level executives.<br />
In <strong>2010</strong>, the Nominating and Compensation Committee conducted 3 meetings to carry out the duties and responsibilities<br />
assigned by the Board of Directors and then propose to the Board of Directors for consideration. The significant matters<br />
considered during the year were summarized below:<br />
1. Considered to select and nominate the candidates who have knowledge and experience in business related to the<br />
Companyûs operation, and have full qualifications as the regulations of the SEC and the SET in order to assume the<br />
position of the Companyûs directors and committeesû members for replacement or in case of retire by rotation.<br />
2. Considered the remuneration package for the Board of Directors and committees by analyzing suitability and similar to<br />
industriesû compensation. The remuneration will be adequate to maintain the qualified directors, and directors who have<br />
duty and responsibility in committees will receive appropriate more remuneration.<br />
3. Considered the criteria of annual salary increment and bonus in consultation with the Human Resource Department<br />
and the Executive Committee. The annual salary increment and bonus were determined at an appropriate level and<br />
comparable to the general practice in the same industry.<br />
The Nominating and Compensation Committee performs their duties carefully and prudently with full capabilities and<br />
independence to ensure the highest benefits to shareholders and all stakeholders in pursuance of equitable treatment,<br />
fairness, and transparency for all concerned to comply with the Principle of Good Corporate Governance of the SET, and be<br />
internationally recognized.<br />
(Mr. Kunthit Arunyakananda)<br />
Chairman of the Nominating and Compensation Committee<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
36<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
Corporate Governance<br />
The Board of Directors realized on the importance of the good Corporate Governance which will be the fundamental<br />
factor for improving standard of business operation to create more transparency, competitiveness and strengthen the confidence<br />
of all shareholders, investors and other related parties. Thus written Corporate Governance Policy and Business Ethics, which<br />
complied with the Principles of Good Corporate Governance of SET and Corporate Social Responsibility Guidelines, have been<br />
provided for practices of directors, management and employees of the Company under the policy guiding principle of being<br />
a good corporate citizen, who is accountable to employees, customers and shareholders, and being socially responsible.<br />
Corporate Governance Practices of the Company in <strong>2010</strong> are as follows:<br />
1. Rights of Shareholders<br />
The Company emphasizes and recognizes the importance of the rights of all shareholders equitably. All rights that<br />
the Companyûs shareholders obtained in <strong>2010</strong> were as follows:<br />
ë<br />
ë<br />
ë<br />
Rights to get share certificate, sell, purchase or transfer the Companyûs shares<br />
Thailand Securities Depository Co., Ltd. (çTSDé) has been appointed as the Companyûs registrar to provide<br />
all services for all transactions related to registration of the Companyûs shares.<br />
Rights to propose agenda and send question in advance of the Shareholdersû Meeting<br />
The Company is aware of the shareholdersû rights and equitable treatment to the shareholders under the<br />
good corporate governance and to comply with laws. Itûs the Company policy to allow the shareholders to<br />
propose matter(s) for consideration of the Board of Directors as agenda of the shareholdersû meeting for 2009<br />
<strong>Annual</strong> General Meeting of shareholders onward, During the period that no rules or criteria from the Capital<br />
Market Supervisory Board been announced, shareholders who would like to propose the agenda have to<br />
comply with the Companyûs procedures and criteria of the above matter. In addition, the Company allows the<br />
shareholders to send question(s) concerning the Companyûs operation in advance for 2011 <strong>Annual</strong> General<br />
Meeting of shareholders onward. For the <strong>Annual</strong> General Meeting of Shareholders 2011, the Company notified<br />
and disclosed contact channels and period for proposing agenda and sending question via SET on December 17,<br />
<strong>2010</strong> and also provided details of the procedures for proposing agenda and sending question on the Companyûs<br />
website (www.i-mobilephone.com) from December 20, <strong>2010</strong>.<br />
Participation in the Shareholdersû Meeting<br />
The Company is aware of the shareholdersû rights and equitable treatment to participate in the shareholdersû<br />
meeting, be informed conditions and procedures of meeting as well as having proxy to vote and comment in the<br />
meeting on behalf of the shareholder. There was only one meeting in <strong>2010</strong>, the <strong>Annual</strong> General Meeting of<br />
Shareholders <strong>2010</strong> which held on April 27, <strong>2010</strong> at Miracle Grand Convention Hotel, Vibhavadee-Rangsit Road,<br />
Laksi, Donmuang, Bangkok where is convenience for transportation and capability to cover with number of<br />
shareholders. The rights of shareholders to participate in the meeting are as follows:<br />
Before the Meeting Date<br />
In the <strong>Annual</strong> General Meeting of Shareholders for <strong>2010</strong>, the shareholders have been informed on the date<br />
and agenda of the meeting via the SETûs communication system 40 days prior to the meeting date. At the same<br />
time, the Company also disclosed the invitation letter as well as related documents in both languages, Thai and<br />
English, on the Companyûs website (wwww.i-mobilephone.com) 32 days before meeting date for the shareholders<br />
to have sufficient time for consideration. Same documents will be directly delivered to the shareholders by TSD,<br />
the Companyûs registrar, within 22 days before the meeting date of which better than what has been required by<br />
law. The invitation letter contained fact, rationale, and opinion from the Board of Directors for each agenda,<br />
conditions and procedures of meeting, annual report, proxy form and any other related document with sufficient<br />
information for shareholdersû consideration. Moreover, the invitation letter was published in newspaper for 3<br />
consecutive days by 8 days before the meeting date of which better than what has been required by law.<br />
On the Meeting Date<br />
Meeting procedures has been set to conform to regulations and considering on shareholdersû convenience.<br />
The Company is aware of the equitable of shareholdersû right and their comfort to participate in the shareholdersû<br />
meeting. Appropriated technology and equipments are sufficient for registration reviewed on<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 37
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
ë<br />
ë<br />
ë<br />
required documents more than one hour prior to commencement of the meeting. In the <strong>Annual</strong> General Meeting<br />
of Shareholders for <strong>2010</strong>, there were eight directors out of nine participated the meeting, the absent one went<br />
abroad due to business trip. Chairmen of all committees including the Audit committee and the Companyûs<br />
management and external auditors also presented in the meeting. Chairman of the Board of Directors who was<br />
Chairman of the meeting introduced all directors and the management to the shareholders, and declared number<br />
of shareholders with voting rights attended the meeting for the <strong>Annual</strong> General Meeting of Shareholders for <strong>2010</strong>,<br />
there were 35 persons. The Chairman had declared to the shareholders how to exercise their right and vote before<br />
commencement conducted the meeting to be in line with the agenda without any additional topic from what have<br />
been expressed in the invitation letter. Voting cards were provided for significant agenda. Voting result in term of<br />
approval, disapproval or abstain for each agenda were transparently presented to the meeting. The shareholders<br />
were encouraged to express their opinions and raise any questions, either in the agenda or any other questions<br />
related to the Companyûs business, at the meeting. All questions had been answered and taken in the minutes of<br />
meeting as well as the opinions from the shareholders.<br />
After the Shareholdersû Meeting<br />
Resolution of the meeting was disclosed to the SET with voting details, approved, disapproved and<br />
sustained, of each agenda on the next day after the meeting date. Full minutes of meeting of which contained the<br />
attendance record of the directors, summary of questions and answers during the meeting in both Thai and<br />
English had been sent to the SET and related parties within 14 days after the meeting date as well as posted on<br />
the Companyûs website (www.i-mobilephone.com) for verification.<br />
Appointment / Dismissal of Directors of the Company and Approve their Remuneration<br />
According to the Companyûs Articles of Association, at the <strong>Annual</strong> General Meeting of Shareholders, one<br />
third (1/3) of the Directors has to be retired by rotation. Election for replacement is required. The retired directors<br />
are eligible to be re-elected for another term. The election of the Board of Directors shall be in accordance with<br />
the rules and procedures as follows:<br />
- Each shareholder shall have one vote on each share.<br />
- In voting, a shareholder shall vote in accordance with the number of votes each shareholder for one or<br />
several directors. The said shareholder may not allot any number of his/her votes to any person.<br />
- The person obtaining the highest and higher votes respectively shall be elected as directors equal to the<br />
number of directors required or ought to be elected at such a meeting. In the event that persons receiving<br />
votes in respective orders receive equal votes and the number of directors exceeds the positions required<br />
or ought to be, the chairman of the meeting shall have a casting vote.<br />
Apart from the appointment of Directors, the shareholders also have rights to remove any director from the<br />
office before the expiration of his/her term of office by having votes of not less than three quarters (3/4) of the<br />
number of shareholders attending the meeting and having the rights to vote and the aggregate number of shares<br />
shall be not less than one half (1/2) of the shares held by all the shareholders attending the meeting and having<br />
the rights to vote.<br />
In every General Meeting of Shareholders, the shareholders have the rights to consider and approve the<br />
remuneration for all directors and members of sub-committees. Adequate Information of all candidates for<br />
being considered and appointed as directors or members of committees was also delivered for shareholdersû<br />
consideration.<br />
Appointment of Auditors and approval of their remuneration<br />
In every <strong>Annual</strong> General Meeting of Shareholders, one of the agenda is the appointment of Companyûs<br />
auditors and consideration of their remuneration. The Company will propose name of the auditors with sufficient<br />
details and remuneration for consideration of the shareholders.<br />
Regularly and timely obtained adequate information, business performance and management policy.<br />
The Company concerns on Shareholdersû rights and not only disclosed Companyûs information via the<br />
SETûs communication system but also posted all significant and updated information on the Companyûs website<br />
(www. i-mobilephone.com).<br />
38<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
ë<br />
Profit Sharing<br />
The Company will return profit to its shareholders in form of dividend payment. The Company has policy<br />
to pay dividend no less than 50% of its consolidated net profit after deduction of all reserves as stated in the<br />
Companyûs Articles of Association and related laws, subject to need for future investment and business plan.<br />
The Companyûs subsidiary and associated companies have policy to pay dividend no less than 50% of their net<br />
profit after deduction of all reserves as stated in the Companyûs Articles of Association and related laws, and<br />
consideration of the Companyûs financial position.<br />
In the <strong>Annual</strong> General Meeting of Shareholders for <strong>2010</strong>, the Company approved to pay dividend for the<br />
year 2009 at Baht 0.02 per share, totaling Baht 86 million or equivalent to 74% of consolidated net profit after<br />
deduction of all reserves, which is higher than the rate of dividend payment as above policy.<br />
2. Equitable Treatment of Shareholders<br />
The Company realizes to protect and due care for the interests of all major and minor shareholders as fairly basis.<br />
In addition, the Company sets policy for equitably treatment to all shareholders for attending and vote in the shareholdersû<br />
meetings, sharing in profits, regularly and timely obtained adequate information, business performance and management<br />
policy. In the shareholdersû meeting, each shareholder shall have one vote on each share. Proxy form requiring<br />
documents were delivered together with the invitation letter for shareholders who would like to appoint a proxy. Proxy<br />
form, which contains detail of voting as approve, disapprove or abstain, as well as details of 3 independent directors also<br />
are attached for shareholders consideration as alternative proxy. In addition, voting cards were provided for each agenda,<br />
especially, the agenda of appointment of directors of which been appointed by individual. In every shareholdersû meeting,<br />
the meetings were conducted to be in line with the agenda without any additional topic from what have been expressed<br />
in the invitation letter otherwise rights of the shareholders who could not participate in the meeting by themselves will<br />
be deprived.<br />
The Company will inspect to ensure no inside information of which is material, undisclosed and confidential leak<br />
to public or be used from unauthorized for personal benefit. IT system has been implemented for a secure access for all<br />
users inside and outside the firewall in conjunction with the Companyûs own user authentication and security system. In<br />
addition, the Company sets as policy that all employees shall acknowledge and sign the agreement of non-disclosure<br />
confidential information, non-violation of concealment of computer related and non-infringement of intellectual property.<br />
New employee shall sign this agreement together with employment contact. It was also set forth in the Companyûs<br />
Business Ethics to refuse directors, management and employees of the Company to use the Companyûs inside<br />
information for personal benefits. Any trading of the Company securities within 1 month prior to disclosure of either the<br />
Companyûs financial performance or any other information that may affect securitiesû price is prohibited. The Directors<br />
and management of the Company had been informed on their duties and punishment regarding to report on securities<br />
holdings of themselves, their spouse and any minor children to the Stock Exchange of Thailand (SET) within 3 days from<br />
the transaction date according to the Securities and Exchange Act B.E. 2535. Any change in securities holdings, such<br />
directors and managements have to report the Company Secretary for coordination and preparing report submit to the<br />
Securities and Exchange Commission (SEC). In addition, the Company has set as a policy to report on securities<br />
holdings of directors and managements in every meeting of the Board of Directors.<br />
In case of conflict of interest, it is the Companyûs Policy to have the directors, management, employees and<br />
related parties to disclose such interests to the Audit Committee for consideration of the transaction to be complied to<br />
the SETûs regulations and any governing laws and regulations prior to further submit for consideration of either the Board<br />
of Directors or the shareholders. The directors who have conflict of interest will not participate in any agenda that they<br />
have conflict of interest. Moreover, any conflict of interest transactions with the connected persons will be disclosed in<br />
the Companyûs <strong>Annual</strong> <strong>Report</strong> and the <strong>Annual</strong> Information Disclosure (56-1) under çThe Connected Transactionsé.<br />
General practices for conflict of interest protection have been set not only in the Companyûs Business Ethics but<br />
also in 5. Roles and Responsibilities of the Board of Directors under çThe Conflict of Interesté. Such practices have been<br />
delivered to all directors, management and employees. The Corporate Governance Committee will monitor and ensure that<br />
Companyûs regulations, Corporate Governance Policy and Business Ethics have been strictly and continually complied.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 39
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
40<br />
3. Attention to Stakeholders<br />
The Company is aware of the support from each stakeholder should increase the competitiveness and ability<br />
to generate more benefit for long-term succession and realized the importance of all stakeholders i.e. shareholders,<br />
employees of the Company and its subsidiaries, customers, competitors, lenders, societies and environment as well as<br />
providing more channels for the stakeholders to contact directly to the Company in order to provide either comments or<br />
recommendations which will be benefit to the Company. Thus, general rules and practices have been set for directors,<br />
management and employees in the Companyûs Business Ethics to cover rights and equitable benefits to all stakeholders<br />
and posted on the Companyûs website (www. i-mobilephone.com) which be summarized as follows:<br />
Shareholders: The Company is aware of its role to protect and due care for the interests of all major and minor<br />
shareholders by granting rights to every shareholders to propose an agenda and send a question in<br />
advance, attend, vote and have comments in the shareholdersû meeting, to share in profits, regularly and<br />
timely obtained adequate information, business performance and management policy. Details of<br />
shareholdersû rights are descried under ç1. Rights of Shareholdersé.<br />
Employees:<br />
Customers:<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong><br />
The Company highly regards all of the employees as valuable resources and is a major factor to drive<br />
the business performance to achieve its goals. As a result, it is the Companyûs policy to treat employees<br />
fairly in all respects, employment opportunity, reasonable remuneration, promotion, welfare i.e. life and<br />
health insurance, annual check up, provident fund, loan for employees, buses service, fitness center and<br />
special discount for companyûs products, etc. Development programs, both internal and external training<br />
courses, are continually provided for all levels of employees. Moreover, scholarships have been provided<br />
for improving skills and knowledge of employees. The Company has to ensure that working environment<br />
will have no harm to employeesû lives and properties. Security equipments and fire drill have been<br />
provided and governed by Risks Management team to strictly conform to the Companyûs Security Policy.<br />
The Company strongly believes in building confidence and brings satisfaction to all of the customers<br />
who are very important to the Company by providing modern and high-quality products and services at<br />
reasonable price for customersû satisfaction and needs as well as providing product and equipment from<br />
factory which has been certified as international standard. Currently, new products and services have<br />
been developed by the Company and subsidiaries. The Company has launched many models of mobile<br />
phones with variety functions to serve customersû needs in all levels and continued to improve after<br />
sales services by providing a total solution of i-mobile Service Centers in form of see-through looking to<br />
repair, upgrade software and provide other services to customers including guarantee to change new<br />
product immediately within 10 days if there is any problem. The Company continuously develops quality<br />
of services, the Company develops 10 potential service centers to fix customersû problem within 1 hour<br />
and has Authorized Service Center with same quality as i-mobile service centers for customers support.<br />
At present, the Company has service and fixing centers nationwide. Moreover, the Company provides<br />
responsible departments for consultation and complaint of customers, and also for control the quality<br />
prior release for satisfaction in goods and services of customers as ISO 9001 standard.<br />
Trade partners: The Company has the policy to equitably and fairly treat its trade partners by taking into consideration<br />
of the Companyûs interest and on mutual benefits basis. Clearly define in evaluation and selection of<br />
trade partners as well as developing and maintaining good relationship between all partners with trust<br />
and confidence, and refusing to accept any personal benefit offered by partners as well as refusing to<br />
fabricate or falsify information that will cause misunderstandings to partners<br />
Creditors:<br />
Competitors:<br />
The Company conforms to its Principle of Business Operation in order to the respect and admission of<br />
the Creditors and strictly complied with all the terms and conditions agreed upon in a transaction. In the<br />
event that any particular condition could not be met, the Company will prior inform the Creditors and<br />
seeking mutual accepted solution. In case the Company could not follow the covenanted condition, the<br />
Company will foregone notify to creditor for solving problem.<br />
The Company conducts all business affairs under just rules and competitions without fraudulently or<br />
inappropriately seeking confidential information of its competitors, or damage competitorsû reputation by<br />
abusive accusation as well as refuse to violate intellectual property rights of businessû counterparts or<br />
competitor. The Company sets as policy that all employees shall acknowledge and sign the agreement<br />
of non-disclosure confidential information, non-violation of concealment of computer related and noninfringement<br />
of intellectual property. New employee shall sign this agreement together with employment<br />
contact.
Societies:<br />
Environment:<br />
The Company recognizes that it can survive and grow in a society that is vigorous and prosperous.<br />
Therefore, to bring about societal progress, the Company participated in societal improvements with<br />
financial support to all activities that aim to maintain beneficial cultures, customs and rituals.<br />
Moreover, the Company will involve in religious activities regularly. The Company also participated in<br />
many activities for development of social, education, vocation, athletic ability as well as sanction for<br />
outreach people and victims. At present, many projects have been created as per details described<br />
under section çSocial Contribution Activitiesé.<br />
The Company conducts business with recognition of environmental conservation and standard<br />
management of safety. It is also the Companyûs policy to become a responsible corporate citizen to<br />
comply with all relevant laws and regulations and be responsible for utilizing natural resources in<br />
prudent manners. For motivation of the employees to continually conform to the Companyûs policy,<br />
announcement via the Companyûs PR boards, e-mail, internal radio, mobile media, newsletter and road<br />
show are provided. For example, Lor. Ling. Activity (Save our SAMART) was set 3 consecutive years<br />
since 2008 by campaign of reduce the resource and energy in the Company, and annual encouragement<br />
of this activity in the first quarter as well as publicity via internal PR throughout the year. Moreover, the<br />
Company always operates knowledgeable and training activities in subjects of environment, safety and<br />
public health through training, seminar, e-mail, etc.<br />
In <strong>2010</strong>, the Company conducted additional policies relating to receiving and giving present, property or other<br />
benefits, and non violation of the human right in the Companyûs Business Ethics as the employeeûs guideline. The<br />
significant matters were summarized as follows:<br />
1. Receiving and giving present, property or other benefits policies<br />
Receiving or giving any benefits as tradition and morality to express gratitude or maintaining business<br />
relation as usual should be done with appropriateness. The policy covers the following practices:<br />
- Receiving and giving property or other benefits that could improperly influence decision making<br />
- Receiving or giving present and the memento<br />
- Transactions with the government sector<br />
2. Non violation of the human right policies<br />
The Company emphasizes on human right as common practice, all employee shall not act or support<br />
violation the human right. The policy covers practice relating to personal right and freedom, and equal treatment.<br />
In addition, the Board of Directors are respect the importance of all stakeholders in participation of the Companyûs<br />
success, thus feedback channels for all stakeholders to return their complaints, comments or recommendations are<br />
provided for improvement. Those channels consist of direct mail to the following address, via Companyûs website at<br />
www.i-mobilephone.com under çContact Usé.<br />
Mailing Address:<br />
Or sending e-mail to :<br />
Secretary to the Audit Committee<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited.<br />
99/4 Moo 4, Software Park, 32 nd floor,<br />
Chaengwattana Rd., Klong Gluar, Park-kred, Nontaburi 11120<br />
boonrut.m@i-mobile.samartcorp.com<br />
Secretary to the Audit Committee will collect the information, and proposes the Audit Committee to consider and<br />
summarize for further report to the Board of Directors. In addition, the Company has the policy to defend the appellant by<br />
keeping appellantsû information as secret.<br />
4. Disclosure and Transparency<br />
The Company has strong determination to reveal accurate complete, consistent and updated information,<br />
both financial and general information that related to Companyûs business. The Complete, consistent and updated<br />
information will truly reflect Companyûs financial performance and future business direction. Such information were<br />
disclosed to shareholders, investors and any related parties via the SETûs Communication system, Companyûs website<br />
(www.i-mobilephone.com), <strong>Annual</strong> <strong>Report</strong>, Form 56-1, press conference, Opportunity Day, etc.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 41
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
The Board of Directors has to ensure that the Companyûs disclosures are transparency and strictly complied by<br />
laws, the Companyûs and any related regulations. The Company has never been notified any offense by the SEC and the<br />
SET on such matter. The Board has major concerned on transparency and disclosure in the following areas:<br />
ë Provide multi channels for disclosure of information apart from the SETûs communication system<br />
<strong>Annual</strong> <strong>Report</strong> and Form 56-1<br />
The Board of Directors has to ensure that <strong>Annual</strong> <strong>Report</strong> and Form 56-1 contained adequate information<br />
with accuracy, clarity and could create understanding to the shareholders and related parties on the Companyûs<br />
operation and its performance for the previous year as well as the management structure, performance of the<br />
Board of Directors and all Committees.<br />
ë<br />
ë<br />
Companyûs website<br />
The Board of Directors is aware of the efficiency of website disclosure to the shareholders and related<br />
persons as well as equitably and easily of getting information. The Board of Directors therefore ensures the<br />
Company not only provides all significant information of the Company in the Companyûs <strong>Annual</strong> report but<br />
also on the Companyûs website (www.i-mobilephone.com) in both languages, Thai and English. The disclosed<br />
information comprised of Corporate Governance Policy, Business Ethics, General News, Financial Statement<br />
as well as <strong>Annual</strong> <strong>Report</strong>, Form 56-1, etc.<br />
Investors Relation<br />
The Company has also set up an Investors Relation section to provide Companyûs information and<br />
activities for investors, shareholders, analysts and general public via Companyûs website, Road Shows, analysts<br />
meetings, conference calls, etc. The Companyûs Investor Relations could be contacted at phone number<br />
0-2502-6583 or via www.i-mobilephone.com or the e-mail address at nikhil.a@samartcorp.com.<br />
In addition to above, the announcement on the Companyûs financial performance has been arranged for<br />
public, investors and analysts by quarterly basis with participation of the executives.<br />
Meetings with investors and analysts in <strong>2010</strong> were summarized as follows:<br />
- Analyst Meeting 12 Times<br />
- Announcement of Companyûs Performance 4 Times<br />
Disclosure of Information of the Board of Directors and Committees<br />
- Structure, Roles and Responsibilities of the Board as well as performance of the Board and each<br />
Committee;<br />
- Directors and Managementûs Remunerations: Policy of Directorsû Remuneration has been clearly and<br />
transparently set to be comparable to the general practice in same industry and be appealing enough to<br />
attract and retain qualified directors. The directors who also be appointed to be the member of any sub<br />
Committees will be paid appropriately more in accordance with the extra work. The Nominating and<br />
Compensation Committee will consider the remuneration and propose for consideration of the Board of<br />
Directors prior to further approval from the shareholders.<br />
The above information and remuneration of each board member have been disclosed in the<br />
Companyûs <strong>Annual</strong> <strong>Report</strong> and Form 56-1 under çManagement Structureé.<br />
Accountability to the Financial Statement<br />
The Board of Directors is responsible for the Companyûs consolidated financial statements and any<br />
financial information which been disclosed in the Companyûs <strong>Annual</strong> <strong>Report</strong>. Such financial statements were<br />
prepared in accordance with the general accepted accounting standard in Thailand with appropriated financial<br />
policy. The reports were carefully considered and prepared with sufficient information in the notes to financial<br />
statements. The financial statements have been audited and commented independently by the authorized auditors<br />
of the SEC to increase the confidence and reliability of financial report.<br />
The Board of Directors also set out and maintained for the efficiency of the Companyûs internal control<br />
system to ensure that the financial information had been correctly and accurately booked and sufficient to<br />
maintain the Companyûs assets and be aware of weak points in order to prevent whether from any dishonesty or<br />
42<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
significant error. The Board of Directors had appointed the Audit Committee of which comprised independent<br />
directors to be responsible for the quality of the financial statements and the internal control system and<br />
disclosed such opinion in the <strong>Annual</strong> <strong>Report</strong> under the <strong>Report</strong> of the Audit Committee. The opinion of the Audit<br />
Committee has already been disclosed in the annual report. Moreover, <strong>Report</strong> of the Board of Directorsû<br />
responsibility on the Companyûs Financial Statements was also attached in the Companyûs <strong>Annual</strong> <strong>Report</strong>.<br />
5. Role and Responsibilities of the Board<br />
5.1) Directorsû Qualifications<br />
The Board consists of directors who have various knowledge, experience, and specific skill that suitable<br />
and benefit to the Company. The Board will also have leadership and vision to carry on the Companyûs business<br />
and achieve its objectives. The Company has 9 directors who complied with the qualification that been described<br />
under çManagement Structureé. All of the Directors have contributed their best to the Company which may<br />
concern from their participation in the meeting.<br />
5.2) The Independent of the Board of Directors<br />
ë Separation of Chairman and CEO<br />
For best benefit of the shareholders and to strike a balance of power within the Company, the<br />
Chairman of the Board of Directors is not the same person as CEO. The Companyûs Chairman of the<br />
Board of Directors is an independent director who has the qualifications of independent director in<br />
accordance with the SETûs notification and has no business relation with any management of the<br />
Company.<br />
ë Balance of Power<br />
The Board of Directors of the Company comprised of 9 members with various qualifications, skills,<br />
experience and expertise. Composition of the members is as follows:<br />
- 3 Independent Directors (one-third of the Board of Directors)<br />
- 3 Executive Directors (two directors are representatives from major shareholders)<br />
- 3 Non-Executive Directors (representatives from major shareholders)<br />
The shareholders could have confidence that the directors as representatives of the shareholders<br />
could perform their duty without any influence or control by management of the Company by the above<br />
structure.<br />
ë Roles and Responsibilities of the Board of Directors and CEO<br />
The Company has clearly set the separate roles and responsibilities of the Board of Directors and<br />
CEO. The Board of Directors will focus and ensure that the Companyûs business will achieve its target and<br />
in the direction that create value and best benefit to the shareholders as well as all stakeholders. Any<br />
conflict of interest with the Company and its subsidiaries will be prohibited. The Board will also comply<br />
with the Companyûs Ethics with responsibility, due care, and integrity to ensure all Companyûs businesses<br />
are run under Companyûs objectives, Articles of Association, resolutions of the Board of Directorsû and<br />
shareholdersû meetings as well as laws and regulations of the SET, the SEC and other related laws. At the<br />
same time, CEO who is the managementûs leader will focus on general management of the Company. The<br />
details of Roles and Responsibilities of the Board of Directors and CEO are described under çManagement<br />
Structureé.<br />
5.3) Being Director in other Listed Companies<br />
ë Policy for directors to serve as directors in other listed companies<br />
For efficiency of being the director, the Board of Directors of the Company has set the policy for<br />
all directors to be the director in any listed companies not exceeding 3 companies. However, there is not<br />
any of the existing 9 directors of the Company is being the director in listed companies over than 3<br />
companies and also could participate and contribute to the Company with efficiency.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 43
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
ë Policy for top executives to serve as directors in other companies<br />
The management of the Company will also be obtained approval from the Executive Committee<br />
prior to be a director in any companies of which are not have either similar business or being the<br />
Companyûs competitors.<br />
5.4) Transparency of Nomination<br />
The Board of Directors ensures the Company to provide transparency process of nomination of directors<br />
and management of the Company of which the details are disclosed under çManagement Structureé.<br />
5.5) Board of Directorsû Activities in the previous year<br />
ë Set Policy and Business Direction<br />
The Board of Directors involved and agreed on set out the Companyûs vision, mission, Corporate<br />
Governance Policy, Business Ethics, strategies, goal, direction, business plan, budget, internal control and<br />
internal audit systems, and risk management as well as to govern the management to follow such business<br />
plan and budget with efficiency and profitability for economic value to the Company and the best<br />
stability to the shareholders. In addition, the Board of Directors has not only ensure the Company and its<br />
management to oversee the value of all stakeholders, neither derive personal benefit nor create any rivalry<br />
with the Company and its subsidiaries, but also conducted the business with great awareness in ethical,<br />
moral and compliance to the Companyûs Articles of Associations as well as laws and regulations of the<br />
SET and the SEC.<br />
The Companyûs Vision, Corporate Governance Policy and Business Ethics have been posted on<br />
the Companyûs website (www.i-mobilephone.com) under the governance of the Corporate Governance<br />
Committee to have all employees to strictly conform and practice.<br />
ë Appointment of Committees<br />
For governing the management to comply with the approved policies and having better efficiency,<br />
the Board of Directors appointed the following 5 committees to help the Board for consideration in<br />
significant matters.<br />
- Audit Committee<br />
- Executive Committee<br />
- Corporate Governance Committee<br />
- Nominating and Compensation Committee<br />
- Risk Management Committee<br />
Roles and responsibilities of each committee were disclosed under section çManagement<br />
Structureé. In addition, Committeesû Charters have also been set and disclosed on the Companyûs website<br />
(www.i-mobilephone.com).<br />
ë Meeting of the Board of Directors and Committees<br />
1) Board of Directorsû Meeting<br />
The Board of Directorsû Meeting schedule has been set as quarterly basis with certain<br />
agenda. The meeting schedule will be sent to each director by the Company Secretary for<br />
preparation and arrangement for meeting participation. However, additional unscheduled Board<br />
meetings may be called upon appropriate notice at any time to address specific needs of the<br />
Company. The operating results will be regularly reviewed. The invitation letter as well as meeting<br />
materials will be delivered by the Company Secretary to all directors prior to the meeting date for<br />
consideration. The average length of the meeting is approximately 2 hours. Details of directorsû<br />
attendance for <strong>2010</strong>, total 7 meetings, were as follows:<br />
44<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
Directors Term of Directorship Number of Attendance/<br />
(Year/month) Total Number of Meeting<br />
1. Professor Suphachai Phisitvanich 5/8 7/7<br />
2. Dr. Chotivid Chayavadhanangkur 7/3 7/7<br />
3. Mr. Kunthit Arunyakananda 7/3 7/7<br />
4. Mr. Charoenrath Vilailuck 7/3 7/7<br />
5. Mr. Watchai Vilailuck 7/3 7/7<br />
6. Mr. Thananan Vilailuck 7/3 7/7<br />
7. Mr. Jong Diloksombat 7/3 7/7<br />
8. Mr. Azwan Khan bin Osman Khan 2/5 3/7*<br />
9. Mr. Reza bin Abdul Rahim 1/11 2/7*<br />
Remarks: *They went abroad due to business trip.<br />
In <strong>2010</strong>, the Board of Directors considered the following agendas:<br />
- Companyûs financial statement for 2009 and quarterly financial statements of <strong>2010</strong><br />
- Evaluated the adequacy of internal control system<br />
- Dividend payment for the year 2009<br />
- Considered sub-committeesû performances for the year 2009<br />
- Appointment of members in each committee<br />
- Considered the connected transactions<br />
- Strategic Implementation Plan for 2011<br />
- Results of Board Self-Assessment for 2009, and set the basis of Board self-assessment and CEO<br />
assessment in <strong>2010</strong><br />
- Subjects relating to the <strong>Annual</strong> General Meeting of Shareholders for 2011 prior to present to the<br />
shareholdersû meeting<br />
- Salary increment rate for 2011 and annual bonus for <strong>2010</strong><br />
- The Directorsû and Officersû Liability Insurance<br />
- Utilization and amendment of credit facilities with financial institutes<br />
- Other agendas relating to the Companyûs operation<br />
The minutes for all meetings had been taken, kept and been ready for verification by the directors<br />
or any related parties.<br />
During the year, Non-Executive Directors convened non-executive meeting to discuss any<br />
managerial issue.<br />
2) Sub-Committees<br />
In <strong>2010</strong>, numbers of each meeting and time attendance of each member were summarized<br />
below:<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 45
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Names<br />
Number of Attendance/ Total Number of Meeting<br />
Audit Executive Corporate Nominating Risk<br />
Committee Committee Governance and Management<br />
Committee Compensation Committee<br />
Committee<br />
1. Professor Suphachai Phisitvanich 5/5<br />
2. Dr. Chotivid Chayavadhanangkur 5/5 2/2 3/3<br />
3. Mr. Kunthit Arunyakananda 5/5 2/2 3/3<br />
4. Mr. Watchai Vilailuck 10/13 4/4<br />
5. Mr. Thananan Vilailuck 11/13 4/4<br />
6. Mr. Jong Diloksombat 12/13 2/2 4/4<br />
7. Mr. Reza bin Abdul Rahim 1/3*<br />
8. Mr. Sirichai Rasameechan 3/3 4/4<br />
9. Mr. Pairote Varophas 2/2<br />
10. Mr. Adithep Nisamaneevong 4/4<br />
11. Mr. Teerawut Kreepanich 4/4<br />
Remarks: * He went abroad due to business trip.<br />
All sub-committees carried out their duties assigned by the Board of Directors, regularly report the<br />
performance to the Board of Directors, and provide annual performances report to shareholders in the<br />
<strong>Annual</strong> <strong>Report</strong>.<br />
5.6) Conflict of Interest<br />
To prevent conflicts of interest, the Company has drawn out guidelines for directors and employees to<br />
follow:<br />
1. Avoid all actions that may cause conflicts of interest with the Company.<br />
2. In case that directors or employees commit any action related to the Company, the particular director and<br />
employee will be treated like an outsider, and will play no part in decision-making process.<br />
3. Refuse to use Companyûs information obtained in their posts for an opportunity to derive personal benefits<br />
by creating rivalry with the Company or involving in related businesses.<br />
4. Refuse to use Companyûs information for securities purchase for personal benefits or to leak Companyûs<br />
information to outsiders for their benefits. Any trading of the Companyûs securities within 1 month prior to<br />
disclosure of either the Companyûs financial performance or any other information that may affect securitiesû<br />
price is prohibited.<br />
5. Refuse to reveal Companyûs classified information e.g. electronic information, financial situation, workûs<br />
plans, business information and Companyûs future plans during and after their posts.<br />
On any conflict of interest transaction, before entering into the transaction, the Audit Committee will<br />
carefully review prior to submit with opinion either on such conflict or connection to the Board of Directors for<br />
further review and to ensure that the transaction has to be complied with the SETûs regulations, information of the<br />
transaction i.e. value of transaction, party involved and necessity ext. has been disclosed in the Companyûs annual<br />
report, Form 56-1 and the auditorûs note in the financial statement. Any consideration of the connected<br />
transaction, the directors who may have conflict of interest will neither participate nor vote in such meeting.<br />
Details of the transactions which may have any conflict of interest in the year <strong>2010</strong> were disclosed under the<br />
çConnected Transactionsé.<br />
46<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
5.7) Internal Control and Internal Audit<br />
The Board of Directorsû Meeting No. 1/2011 held on February 24, 2011 in which all three independent Audit<br />
Committee members attended, evaluated the Companyûs internal control from documents and report on internal<br />
control evaluation prepared by management and the Audit Committee. The Board of Directors came to the<br />
conclusion that the Company has adequate and appropriate internal control systems on the following areas:<br />
1) Organizational Control and Environment Measure<br />
The Company has sufficient organizational and environment control systems. It has clearly<br />
established the organizational structure, roles and responsibilities of each unit, and approval authority<br />
appropriate to the level of each executive. Clear and measurable business plans are set in advance each<br />
year and are regularly adjusted in response to the competitive situation. The Board of Directors has<br />
prepared Corporate Governance Policy, which covered the Principles of Good Corporate Governance of<br />
the Stock Exchange of Thailand, and business ethics for employees to use as guidelines.<br />
2) Risk Management Measuse<br />
The Company appointed the Risk Management Committee to manage the risks that may occur and<br />
impact to the Companyûs operation and objective, determine annual implementation plan to mitigate the<br />
risks, monitor risk management measures as well as revise the risk management measures to mitigate the<br />
risks any time the Company encounters new risk factors which has an effect on the Companyûs business.<br />
3) Management Control Activities<br />
The Company has an adequate management monitoring system. The Board of Directors appointed<br />
the committees to help it govern the Companyûs business operations to comply with the scope of<br />
responsibilities and authority. The delegation of authority has clearly been specified, and there are<br />
adequate internal control systems governing transactions with major shareholders, directors, executives, or<br />
other related parties. The connected transactions have been review by the Audit Committee before<br />
proposing to get the approval from the Board of Directors. In addition, the Company has held regularly<br />
meetings to evaluate the performance of the Company and its subsidiaries in order to regularly monitor the<br />
efficiency of operations.<br />
4) Information and Communication Measuse<br />
World class standard of information and data center management was implemented within<br />
company such as ISO 27001 (Information Security Management System) for manage the security of<br />
information and computer system. CMMI (Capability Maturity Model Integration) for efficiency and quality<br />
in software development was level 3 certified. ITIL (Information Technology Infrastructure Library) for<br />
efficiency improvement of service management in information technology. ERP (Enterprise Resource<br />
Planning) was implemented as organization-wide application system to be center of business support<br />
software and databases with increasing performance of operations by use single application system.<br />
Business Intelligence (BI) also developed for executives to track and analyze business financial information<br />
which fully help in decision making. Disaster Recovery Planning was developed to support continuity of<br />
business when disaster occurs.<br />
5) Monitoring System<br />
The Company holds regularly board meeting to monitor and improve its business operation to<br />
achieve the business plan. Internal audit reports have been prepared periodically to report to the Audit<br />
Committee according to the audit plan.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 47
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
5.8) Risk Management<br />
The Company set up comprehensive Risk Management Policy to mitigate any potential impact caused<br />
by economic and political changes. The policy also includes the criteria for risk prevention and detection as the<br />
follow measures:<br />
1. Policy Setting; to set up policy, objectives, scope, responsibilities and regulations that synchronized with<br />
the Companyûs strategies, goals and business direction which be reviewed annually.<br />
2. Risk Identification; to identify risks that may delay the Company from objectives and goals achievement<br />
by consider both internal and external factors, for example, fluctuation of business, competitions, legal<br />
issues, technologies, financial, information systems and human resources management.<br />
3. Risk Evaluation; to evaluate likelihood of risks that may occur and impact of risks to the Company and the<br />
prioritize the risks to determine possible implementation plan.<br />
4. Risk Response; to determine possible implementation plan to mitigate likelihood of all addressed and<br />
prioritized risks that may occur and impact of the risks to the Company as tolerance level.<br />
5. Monitoring and <strong>Report</strong>ing; to monitor risk management measures to ensure quality and appropriateness of<br />
the Companyûs risk management and regular reporting system. The Board of Directors assigned Risk<br />
Management Committee to monitor and report the performance of risk management to ensure the goal<br />
achievement.<br />
Risk Management countermeasures shall be implemented and regularly followed up by the Risk<br />
Management Committee in a quarterly meeting as outlined in the risk management plan. All countermeasures<br />
shall be followed and reviewed by internal audit department to assure that the final outcome is agreeable with the<br />
Companyûs proposed objectives. Besides, the Company held risk management seminar and training for each<br />
business as well as adapting it as the key performance factor for performance evaluation of both operational and<br />
management staff in order to build up self-consciousness. The training also focused on concepts and principles<br />
of practicing on risk management through out the organization which would contribute in ensuring the sustainable<br />
growth of the Company as well as create value for stakeholders and shareholders.<br />
5.9) Board Self-Assessment<br />
The Board of Directors conducts its self-assessment annually for assessment their performance and<br />
review the comments relating to the performances of the Company and directors to develop the Companyûs<br />
Corporate Governance. The result will be considered by the Board of directorsû meeting. In <strong>2010</strong>, the Board of<br />
Directors considered the criteria of self-assessment in its meeting No. 7/<strong>2010</strong> on December 17, <strong>2010</strong>, and had the<br />
resolution to define the criteria as the following 4 areas:<br />
1. Board Composition<br />
2. Strategic Guidance<br />
3. Monitoring and Evaluation<br />
4. Accountability<br />
The results of board self-assessment for <strong>2010</strong> in overall areas of assessment were excellent with the<br />
average score of 92.06% which is approximate to the results for 2009. This was shown that the Companyûs Board<br />
of Directors complies with the Principles of Good Corporate Governance and continues to increase its efficiency.<br />
5.10) CEO Assessment<br />
The Board of Directors conducts CEO assessment for the year <strong>2010</strong> for consideration of his remuneration<br />
in the following areas:<br />
1. Leadership<br />
2. Board relations<br />
48<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
3. Risk management and internal control<br />
4. Human resources management<br />
5. Corporate governance<br />
The results of CEO assessment for <strong>2010</strong> in overall areas of assessment were excellent with the average<br />
score of 94.12%. This was shown that CEO of the Company performs his duties efficiently that contribute to the<br />
overall better performance of company.<br />
5.11) Development of Directors and Management<br />
The Company will provide orientation program to new directors. Information on the Companyûs business<br />
and directions as well as Corporate Governance Policy of the Company will be advised. In addition, to support<br />
and increase knowledge and capability of the directors, periodical training will be provided especially the Director<br />
Accreditation Program (DAP), Director Certification Program (DCP) and other programs arranged by the Thai<br />
Institute of Directors (IOD). Three directors were trained in DCP and four directors were trained in DAP. Two<br />
foreign directors have not been trained such program from IOD. Training profile of each director was shown under<br />
çThe Board of Directors and Managementé.<br />
5.12) Company Secretary<br />
The Board of Directors considered and appointed the Company Secretary from person who has<br />
qualification and experience with the following roles and responsibilities:<br />
1. Perform his/her duty with accountability, duty of care and duty of loyalty as well as has to comply by laws<br />
and any other related regulation.<br />
2. Support the Board of Directors for their activities included providing consultation in related to the Companyûs<br />
Articles of Association, and any other regulations from related authorities.<br />
3. Arrange meetings for Board of Directors, Committees and Shareholders as well as coordinate to ensure all<br />
resolutions have been implemented complying with Companyûs Objectives, Articles of Association and the<br />
resolutions of the Board of Directorsû and the shareholdersû meetings as well as laws and related<br />
regulations.<br />
4. Prepare and keep the companyûs documents such as register of directors, notice calling directorsû and<br />
shareholdersû meetings as well as the minutes of such meetings and the annual report, etc.<br />
5. Keep a report on interest filed by a director and executive as well as submit a copy of the report to the<br />
Chairmen of the Board of Directors and the Audit Committee within 7 business days from the date on<br />
which the company has received such report.<br />
The Nominating and Compensation Committee shall select a new company secretary to propose for<br />
consideration and approval of the Board of Directors to appoint the new company secretary within 90 days from<br />
the date on which the company secretary has vacated her position or has been incapable of performing her duty;<br />
in this regards the Board of Director shall be empowered to assign any director to perform the duty as the<br />
substitutes during such period.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 49
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Connected Transactions<br />
The connected transactions disclosed in this section are transactions of the Company or its subsidiaries with those who<br />
may have a conflict of interests for the year ended December 31, <strong>2010</strong> as Section 89/12 of the Securities and Exchange Act and<br />
related notifications:<br />
Companies Relationship Counterparts<br />
<strong>Samart</strong> Corporation Plc. <strong>Samart</strong> Corporation Plc. holds a 58.28% Mr. Charoenrath Vilailuck,<br />
stake in the Company.<br />
Mr. Watchai Vilailuck<br />
Mr. Azwan Khan bin Osman Khan<br />
Mr. Reza bin Abdul Rahim<br />
One to One Contacts Co., Ltd. <strong>Samart</strong> Corporation Plc. holds a 95.99% stake. Mr. Charoenrath Vilailuck<br />
Mr. Watchai Vilailuck<br />
<strong>Samart</strong> Engineering Co., Ltd. <strong>Samart</strong> Corporation Plc. holds a 99.99% stake. Mr. Charoenrath Vilailuck<br />
Mr. Watchai Vilailuck<br />
<strong>Samart</strong> Telcoms Plc. <strong>Samart</strong> Corporation Plc. holds a 70.80% stake. Mr. Charoenrath Vilailuck<br />
Mr. Watchai Vilailuck<br />
Suvarnabhumi Environment Care Co., Ltd. <strong>Samart</strong> Corporation Plc. holds a 89.99% stake. Mr. Charoenrath Vilailuck<br />
Mr. Watchai Vilailuck<br />
Cambodia Air Traffic Service Co., Ltd. <strong>Samart</strong> Corporation Plc. holds a 100% stake. Mr. Charoenrath Vilailuck<br />
Mr. Watchai Vilailuck<br />
Vision and Security System Co., Ltd. <strong>Samart</strong> Corporation Plc. holds a 69.99% stake.<br />
<strong>Samart</strong> Reditech Co., Ltd. <strong>Samart</strong> Corporation Plc. holds a 99.99% stake. Mr. Charoenrath Valailuck<br />
Mr. Watchai Vilailuck<br />
Mr. Jong Diloksombat<br />
<strong>Samart</strong> Communication Services Co., Ltd. <strong>Samart</strong> Telcoms Plc. holds a 99.99% stake. Mr. Charoenrath Vilailuck<br />
Mr. Watchai Vilailuck<br />
Posnet Co., Ltd. <strong>Samart</strong> Telcoms Plc. holds a 99.99% stake. Mr. Charoenrath Vilailuck<br />
Mr. Watchai Vilailuck<br />
<strong>Samart</strong> Comtech Co., Ltd. <strong>Samart</strong> Telcoms Plc. holds a 99.99% stake. Mr. Charoenrath Vilailuck<br />
Mr. Watchai Vilailuck<br />
<strong>Samart</strong> Infonet Co., Ltd. <strong>Samart</strong> Telcoms Plc. holds a 99.57% stake. Mr. Watchai Vilailuck<br />
Vilailuck International Holding Co., Ltd. Vilailuck International Holding Co., Ltd. Mr. Charoenrath Valailuck<br />
holds a 21.92% stake in <strong>Samart</strong> Corporation Plc. Mr. Watchai Vilailuck<br />
Mr. Thananan Valailuck<br />
Vilailuck Development Co., Ltd. Vilailuck International Holding Co., Ltd. Mr. Charoenrath Valailuck<br />
holds a 42% stake.<br />
Mr. Watchai Vilailuck<br />
Mr. Thananan Valailuck<br />
Vilailuck Property Co., Ltd. Vilailuck International Holding Co., Ltd. Mr. Charoenrath Valailuck<br />
holds a 12.50% stake.<br />
Mr. Watchai Vilailuck<br />
Thai Trade Net <strong>Samart</strong> Telcoms Plc. holds a 99.99% stake. Mr. Charoenrath Valailuck<br />
Mr. Watchai Vilailuck<br />
<strong>Samart</strong> Ed Tech Co., Ltd. <strong>Samart</strong> Telcoms Plc. holds a 99.99% stake. Mr. Charoenrath Valailuck<br />
Mr. Watchai Vilailuck<br />
50<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
Nature of Connected Transactions<br />
Rental and Utility Fees<br />
Nature of Major Transactions<br />
Value<br />
(Million Baht)<br />
1. <strong>Samart</strong> I-<strong>Mobile</strong> Plc. entered rental agreements for warehouse space in Smart One Building and<br />
office space in Software Park Building and utility service agreements with <strong>Samart</strong> Corporation Plc.<br />
ë Jan 1, 2009 to Dec 31, 2011 for the area of 942 square meters.<br />
The monthly rate of Baht 70 per square meter. 0.79<br />
The utility service at a monthly rate of Baht 105 per square meter. 1.19<br />
ë Mar 1, 2009 to Apr 30, 2011 for the area of 3,468.70 square meters.<br />
The monthly rate of Baht 110.25 per square meter. 4.59<br />
The utility service at a monthly rate of Baht 382.02 per square meter. 15.90<br />
2. <strong>Samart</strong> I-<strong>Mobile</strong> Plc. entered rental agreements for office space in Software Park Building and a utility<br />
service agreement with Vilailuck International Holding Co., Ltd.<br />
ë Jun 1, 2009 to May 31, 2012 for the area of 19.45 square meters.<br />
The monthly rate of Baht 196.90 per square meter. 0.05<br />
The utility service at a monthly rate of Baht 295.37 per square meter. 0.07<br />
ë Oct 16, <strong>2010</strong> to Jul 31, 2012 for the area of 280 square meters.<br />
The monthly rate of Baht 196.90 per square meter. 0.14<br />
The utility service at a monthly rate of Baht 295.37 per square meter. 0.21<br />
3. <strong>Samart</strong> Multimedia Co., Ltd. entered a rental agreement for office space in Software Park Building and<br />
a utility service agreement with <strong>Samart</strong> Corporation Plc.<br />
ë May 1, 2008 to Apr 30, 2011 for the area of 1,206.86 square meters.<br />
The monthly rate of Baht 110.25 per square meter. 1.60<br />
The utility service at a monthly rate of Baht 382.02 per square meter. 5.53<br />
4. <strong>Samart</strong> Multimedia Co., Ltd. entered a rental agreement for office space in Software Park Building and<br />
a utility service agreement with Vilailuck International Holding Co., Ltd.<br />
ë June 1, <strong>2010</strong> to Jul 31, 2012 for the area of 758.43 square meters.<br />
The monthly rate of Baht 196.90 per square meter. 1.05<br />
The utility service at a monthly rate of Baht 295.37 per square meter. 1.57<br />
5. <strong>Samart</strong> Interactive Media Co., Ltd. entered a rental agreement for office space in Software Park Building<br />
and a utility service agreement with Vilailuck International Holding Co., Ltd.<br />
ë June 1, <strong>2010</strong> to Jul 31, 2012 for the area of 25 square meters.<br />
The monthly rate of Baht 196.90 per square meter. 0.03<br />
The utility service at a monthly rate of Baht 295.37 per square meter. 0.05<br />
6. Brain Source Co., Ltd. entered a rental agreement for office space in Software Park Building and a utility<br />
service agreement with <strong>Samart</strong> Corporation Plc.<br />
ë Sep 1, 2008 to May 31, 2015 for the area of 200 square meters.<br />
The monthly rate of Baht 110.25 per square meter. 0.26<br />
The utility service agreement at a monthly rate of Baht 382.02 per square meter. 0.92<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 51
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Nature of Major Transactions<br />
Value<br />
(Million Baht)<br />
7. <strong>Samart</strong> Interactive Media Co., Ltd. entered a rental agreement for office space in Smart One Building<br />
and a utility service agreement with <strong>Samart</strong> Corporation Plc.<br />
ë Jan 1, 2009 to Sep 30, <strong>2010</strong> for the area of 48 square meters.<br />
The monthly rate of Baht 152 per square meter. 0.07<br />
The utility service at a monthly rate of Baht 228 per square meter. 0.10<br />
8. I-<strong>Mobile</strong> Plus Co., Ltd. entered a rental agreement for office space in Software Park Building and a utility<br />
service agreement with Vilailuck International Holding Co., Ltd.<br />
ë June 1, <strong>2010</strong> to Jul 31, 2012 for the area of 583.43 square meters.<br />
The monthly rate of Baht 196.90 per square meter. 0.80<br />
The utility service at a monthly rate of Baht 295.37 per square meter. 1.21<br />
The office space rental, utility service fees and others related fees were reasonable to increase the Groupûs efficiency of operations.<br />
The Audit Committee reviewed the transaction and was of the opinion that the fees were at the market rate compared with other buildings<br />
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<br />
of business or normal commercial term between the Company or subsidiaries and director or executive or related person as approved from<br />
the Board of Directors.<br />
Management Fee<br />
Company Receiving the Service<br />
Company Providing the Service<br />
Value<br />
(Million Baht)<br />
<strong>Samart</strong> Corporation Plc. <strong>Samart</strong> I-<strong>Mobile</strong> Plc. 12.00<br />
The management services detailed above were aimed at increasing the Groupûs efficiency of operations. The Services Providers<br />
would send experts in various fields, including financial management, marketing, accounting, distribution channels and business strategies,<br />
to give advice. The fees were based on actual costs plus appropriate profit. The Audit Committee reviewed the transaction and was of the<br />
opinion that the connected transaction was fair and beneficial to the Company.<br />
52<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
Transactions of Goods and Services Sold as Usual<br />
Company Selling Goods/Services Company Buying Goods/Services Value<br />
(Million Baht)<br />
1. <strong>Samart</strong> I-<strong>Mobile</strong> Plc. <strong>Samart</strong> Telcom Plc. 2.59<br />
<strong>Samart</strong> Communication Services Co., Ltd. 0.79<br />
<strong>Samart</strong> Comtech Co., Ltd. 0.71<br />
<strong>Samart</strong> Infonet Co., Ltd. 0.28<br />
Vilailuck Development Co., Ltd. 0.01<br />
One to One Contacts Co., Ltd. 0.17<br />
<strong>Samart</strong> Engineering Co., Ltd. 0.10<br />
Suvarnabhumi Environment Care Co., Ltd. 0.01<br />
Vilailuck International Holding Co., Ltd. 0.05<br />
Vilailuck Property Co., Ltd. 0.03<br />
PostNet Co., Ltd. 0.03<br />
Vision and Security System Co., Ltd 0.20<br />
Cambodia Air Traffic Service Co., Ltd. 0.06<br />
Thai Trade Net 0.01<br />
<strong>Samart</strong> Ed Tech Co., Ltd. 0.02<br />
<strong>Samart</strong> Reditech Co., Ltd. 0.02<br />
2. <strong>Samart</strong> Corporation Plc. <strong>Samart</strong> I-<strong>Mobile</strong> Plc. 36.41<br />
<strong>Samart</strong> Multimedia Co., Ltd. 13.26<br />
3. One to One Contacts Co., Ltd. <strong>Samart</strong> Multimedia Co., Ltd. 46.44<br />
4. <strong>Samart</strong> Multimedia Co., Ltd. <strong>Samart</strong> Communication Services Co., Ltd. 1.04<br />
<strong>Samart</strong> Telcoms Plc. 0.61<br />
<strong>Samart</strong> Infonet Co., Ltd. 0.06<br />
<strong>Samart</strong> Comtech Co., Ltd. 0.93<br />
<strong>Samart</strong> Corporation Plc. 0.09<br />
Posnet Co., Ltd. 0.09<br />
Thai Trade Net co., Ltd. 0.02<br />
One to One Contacts Co., Ltd. 0.01<br />
5. <strong>Samart</strong> <strong>Mobile</strong> Services Co., Ltd. <strong>Samart</strong> Comtech Co., Ltd. 0.12<br />
The goods and services sold above were in accordance with the terms and conditions of goods and services sold as in<br />
usual business. The transactions are based on the principle of transaction in the ordinary cause of business or normal<br />
commercial term between the Company or subsidiaries and director or executive or related person as approved from the Board<br />
of Directors.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 53
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Purchase and Sale of Fixed Assets<br />
Company Buying Fixed Assets Company Selling Fixed Assets Value<br />
(Million Baht)<br />
1. <strong>Samart</strong> Multimedia Co., Ltd. <strong>Samart</strong> Comtech Co., Ltd. 0.13<br />
2. <strong>Samart</strong> I-<strong>Mobile</strong> Plc. <strong>Samart</strong> Corporation Plc. 2.30<br />
Vilailuck Development Co., Ltd. 11.50*<br />
One to One Contacts Co., Ltd. 1.20<br />
Note: * The Company purchased a condominium for being welfare of management and employees of the Company and its subsidiaries and for<br />
used by key customer. The Audit Committee reviewed the transaction and was of the opinion that the transaction was reasonable.<br />
Fixed assets are purchased and sold at their net book value plus a margin, depending on the condition of the fixed assets.<br />
The transactions are based on the principle of transaction in the ordinary cause of business or normal commercial term between<br />
the Company or subsidiaries and director or executive or related person as approved from the Board of Directors.<br />
Miscellaneous Transactions as Usual<br />
Nature of Major Transactions<br />
Value<br />
(Million Baht)<br />
1. <strong>Samart</strong> I-<strong>Mobile</strong> Plc. group paid other expenses to <strong>Samart</strong> Corporation Plc. and related companies 22<br />
2. <strong>Samart</strong> I-<strong>Mobile</strong> Plc. group received other income from related companies 1<br />
Miscellaneous transactions are charged at a mutually agreed price. The transactions are based on the principle of transaction in<br />
the ordinary cause of business or normal commercial term between the Company or subsidiaries and director or executive or<br />
related person as approved from the Board of Directors.<br />
Necessity and Rationale for Transactions<br />
The Companyûs Audit Committee is of the opinion that the inter-company transactions above were reasonable and<br />
necessary for the Companyûs operations. Before entering such transactions, the Board of Directors evaluates them on the basis<br />
of providing maximum value to the Company. The terms and conditions of connected transactions were set according to<br />
standard business terms and conditions, and at market rates. Loans from related companies were secured to strengthen liquidity<br />
for the Companyûs operations only as deemed necessary.<br />
Measures and Steps of Approval for Connected Transactions<br />
The Company requests the opinion of the Audit Committee about the necessity and appropriateness of the conflict of<br />
interest transaction before the transaction occurred. If the Audit Committee members are not experienced in considering the<br />
transaction that may arise, the Company asks an independent expert or its auditor to give an opinion on that matter to support<br />
the decision making of the Board of Directors or the shareholders. The directors with possible conflicts of interest do not have<br />
the right to vote on that transaction.<br />
Policies and Trend in Future Connected Transactions<br />
In the future, the Company may engage in connected transactions as it deems appropriate based on normal business<br />
terms and conditions. It will comply with the laws on securities and the stock market, as well as the relevant regulations,<br />
announcements, orders or requirements of the Stock Exchange of Thailand. It will also strictly follow the requirements<br />
and practices regarding disclosure of connected transactions, and the acquisition or sale of important assets of the listed<br />
company, according to the accounting standards set by the Association of Accountants. The Company will disclose connected<br />
transactions in the Notes to Financial Statements audited by the Companyûs external auditor.<br />
54<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
Financial Analysis<br />
and Results of Operations<br />
Operation Overview<br />
In <strong>2010</strong>, the total revenues were Baht 8,125 million, a decrease of Baht 914 million or 10.11% compared to 2009. The<br />
decrease was mainly contributed from mobile business and international business that impacted from the lower average selling<br />
price per unit and the decrease of selling support income from more emphasizes on house brand handset, i-mobile, which has<br />
higher margin than other brands. However, unit sold of house brand handset increased. Revenue from multimedia business was<br />
continuously increased.<br />
Operating profit increased Baht 35 million or 32.38% from more emphasizes on house brand handset, i-mobile and the<br />
increased revenue of multimedia business. The operating profit margin increased from 1.22% to 1.77% in <strong>2010</strong>.<br />
Net profit was Baht 135 million, an increase of Baht 19 million or 16.64% compared to 2009. Net profit margin also<br />
increased from 1.28% in 2008 to 1.66% in <strong>2010</strong>.<br />
Results of Operation of Company and Subsidiaries<br />
Sales and service income including gross profit<br />
(Unit: Million Baht)<br />
<strong>Mobile</strong> Business Multimedia Business International Business Total<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Sales and service income 5,965 6,831 899 800 1,123 1,138 7,987 8,769<br />
Selling support income 67 81 - - - - 67 81<br />
Cost of sales and service (4,750) (5,897) (513) (449) (1,085) (1,074) (6,348) (7,420)<br />
Gross profit 1,282 1,015 386 351 38 64 1,706 1,430<br />
Selling and Administrative expenses<br />
and other expenses (1,528) (1,369)<br />
Other income 71 189<br />
Finance cost (106) (142)<br />
Corporate income tax (7) (3)<br />
Minority interests of the subsidiaries (1) 11<br />
Net income 135 116<br />
<strong>Mobile</strong> Business<br />
The revenue from <strong>Mobile</strong> Business including selling support income was Baht 6,032 million, a decrease of Baht 880<br />
million or 12.73% compared to 2009. This was mainly due to the lower average selling price per unit compared to 2009 and the<br />
decrease of selling support income from more emphasizes on house brand handset, i-mobile. However, the Company was<br />
successful in expansion of house brand handset sale in domestic market. The unit sold of i-mobile handset increased 15.51%,<br />
compared to 2009.<br />
Gross profit from <strong>Mobile</strong> Business was Baht 1,282 million, an increase of Baht 267 million or 26.31% compared to 2009.<br />
Gross profit margin increased from 14.68% in 2009 to 21.25% in <strong>2010</strong> due to the Company emphasizes on house brand phone<br />
sold which has higher margin than other brands. The Company has developed various models of handsets with differentiable<br />
features at an attractive price to customers as well as continually improved quality of after sale services. Thus, the Company was<br />
successful in retaining 2nd position in Thailandûs handset market.<br />
Multimedia Business<br />
The revenue from Multimedia Business was Baht 899 million, an increase of Baht 99 million or 12.38% over 2009. This<br />
was mainly due to the increase of transaction usages of customers in all services, especially in non-voice services by bundling<br />
of non-voice services into i-mobile handset thru çi-linké application which enable more convenience for content users to reach<br />
the contents. Gross profit from Multimedia Business was Baht 386 million, an increase of Baht 35 million or 9.97% over 2009.<br />
Gross profit margin decreased from 43.88% in 2009 to 42.94% in <strong>2010</strong>.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 55
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
International Business<br />
The revenue from International Business was Baht 1,123 million, a decrease of Baht 15 million or 1.32% compared to<br />
2009. This was mainly due to the lower average selling price per unit compared to 2009. Gross profit was Baht 38 million in <strong>2010</strong>,<br />
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 <strong>2010</strong><br />
due to stock clearance.<br />
Other Income<br />
Other income was Baht 71 million, representing 0.87% of total revenues, a decrease of 118 million or 62.43% compared<br />
to 2009. This was mainly due to the decrease in gain on disposal of investment in subsidiary company, gain on change in value<br />
of short-term investment in trading securities and gain on foreign exchange.<br />
Selling and Administration Expenses including Other Expenses<br />
Selling and administration expenses including other expenses were Baht 1,528 million, an increase of Baht 159 million or<br />
11.61% over 2009. This was mainly due to the increase in sales promotion and customer service expenses of <strong>Mobile</strong> Business.<br />
Finance Cost<br />
Finance cost was Baht 106 million, a decrease of Baht 36 million or 25.35% compared to 2009 due to the cost<br />
management measure.<br />
Corporate Income Tax<br />
Corporate income tax was Baht 7 million, an increased of Baht 4 million or 133.33% compared to 2009.<br />
Financial Position<br />
Assets<br />
As of December 31, <strong>2010</strong>, total assets were Baht 5,434 million, a decrease of Baht 705 million or 11.48% compared to<br />
end of 2009. This was mainly due to the decrease in short-term investments and sales promotion receivables of <strong>Mobile</strong><br />
Business, and trade accounts receivable of International Business.<br />
Total assets consist of current and non-current assets of Baht 4,603 and 831 million, respectively, representing 84.71%<br />
and 15.29% of total assets, respectively. The major current assets were trade accounts receivable and inventories, representing<br />
54.54% and 16.08% of total assets, respectively. The major non-current assets were equipments representing 11.89% of total<br />
assets.<br />
Accounts Receivable<br />
As of December 31, <strong>2010</strong>, trade accounts receivable was Baht 2,964 million, a decrease of Baht 115 million or 3.75%<br />
compared to end of 2009. The average collection period increased from 114 days in 2009 to 137 days in <strong>2010</strong>. The increase of<br />
trade accounts receivable and average collection period was mainly due to the Company increased term of repayment for<br />
certain customers.<br />
Allowance for doubtful accounts was provided for the estimated collection losses that may be incurred in collection of<br />
receivables. The allowance was based on collection experience, analysis of debtor aging and current status of receivable<br />
outstanding at balance sheets date.<br />
Inventories<br />
As of December 31, <strong>2010</strong>, net inventories were Baht 874 million, an increase of Baht 97 million or 12.45% compared to<br />
end of 2009, from <strong>Mobile</strong> Business. The average sales period of inventories decreased from 59 days in 2009 to 47 days in <strong>2010</strong>.<br />
The Company provided an allowance for obsolescence based on the Companyûs policy and there was no significant<br />
change during the year compared with the previous year.<br />
56<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
Other Current Assets<br />
As of December 31, <strong>2010</strong>, other current assets were Baht 401 million, a decrease of Baht 470 million or 54.01% from end<br />
of 2009. The decrease was attributed to sales promotion receivables, input tax refundable, withholding tax deducted at sources<br />
and advance payment for purchase of inventories.<br />
Non-Current Assets<br />
As of December 31, <strong>2010</strong>, non-current assets were Baht 831 million, an increase of Baht 209 million or 33.62% from end<br />
of 2009. The increase was attributed to the purchase of equipments from <strong>Mobile</strong> Business and Multimedia Business to support<br />
business expansions and new businesses.<br />
Liquidity<br />
As of December 31, <strong>2010</strong>, cash and cash equivalents were Baht 147 million, a decrease of Baht 33 million or 18.47% from<br />
end of 2009. The details of sources and uses of fund are as follows:<br />
- Net cash from operating activities of Baht 603 million was attributed to profit from operating result and the<br />
decrease in sales promotion receivables and cash from sale of short-term investments.<br />
- Net cash used in investing activities of Baht 65 million was attributed to investment in purchase of equipments to<br />
support business expansions and new businesses.<br />
- Net cash used in financing activities of Baht 574 million was attributed to repayment of loans from banks and<br />
dividend payment of Baht 86 million.<br />
The liquidity ratio increased from 1.46 times in 2009 to 1.53 times in <strong>2010</strong>. The quick ratio increased from 1.05 times in<br />
2009 to 1.14 times in <strong>2010</strong>.<br />
Sources of Funds<br />
As of December 31, <strong>2010</strong>, shareholdersû equity was Baht 2,418 million, an increase of Baht 54 million or 2.29% from end<br />
of 2009, due to net profit for <strong>2010</strong> of Baht 135 million and the dividend payment in <strong>2010</strong> of Baht 86 million.<br />
Total liabilities as of December 31, <strong>2010</strong> were Baht 3,016 million, a decrease of Baht 759 million or 20.11% from end of<br />
2009. Total liabilities consist of current liabilities of Baht 3,005 million, and non-current liabilities of Baht 11 million, representing<br />
55.29% and 0.21% of total assets, respectively. The details of significant liabilities are as follows:<br />
ë Bank overdrafts and loans from financial institutions were Baht 2,351 million, representing 77.95% of total<br />
liabilities or 43.27% of total assets, a decrease of Baht 476 million or 16.83% from end of 2009 due to repayment<br />
of loans from banks.<br />
ë Trade accounts payable was Baht 370 million, representing 12.27% of total liabilities or 6.80% of total assets, a<br />
decrease of Baht 310 million or 45.61% from end of 2009 due to repayment of goods.<br />
As the above liabilities and shareholdersû equity, the Companyûs debt to equity ratio decreased from 1.60 times in 2009<br />
to 1.25 times in <strong>2010</strong>.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 57
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
<strong>Report</strong> of the Board of Directorsû<br />
Responsibilities for the Financial <strong>Report</strong>s<br />
To Shareholders<br />
The Companyûs Board of Directors is responsible for the financial statements of <strong>Samart</strong> I-<strong>Mobile</strong> Public Company<br />
Limited and the consolidated financial statements of the Company and its subsidiaries as well as the information that appears<br />
in the annual report. The said financial statements were made in accordance with generally accepted accounting standards.<br />
Appropriate accounting policies were used and practiced regularly. Careful consideration and best estimates were made with<br />
sufficient disclosure of information in the notes to the financial statements. This was to ensure transparency and benefits to the<br />
shareholders and investors.<br />
The Board of Directors has provided for and maintained appropriate and effective internal control system to obtain<br />
reasonable assurance that the accounting information is accurate, complete and sufficient to maintain the Companyûs assets<br />
and to prevent fraud or significant unusual transactions.<br />
In this regard, the Board of Directors appointed the Audit Committee to examine the accounting policies and the quality<br />
of the financial reports as well as the internal control and internal audit systems. The opinions of the Audit Committee on these<br />
matters appear in the <strong>Report</strong> of the Audit Committee in this annual report.<br />
The financial statements of <strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited and its consolidated financial statements were<br />
audited by Ernst & Young Office Limited, the Companyûs auditor. During the audit, the Board of Directors supported the auditor<br />
with various information and documents so that the auditor could audit and express its opinions according to the accounting<br />
standards. The opinions of the auditor appear in the <strong>Report</strong> of Independent Auditor in this annual report.<br />
The Board of Directors was of opinions that the overall internal control system of the Company is at a satisfactory level<br />
and can create reasonable confidence that the financial statements of <strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited and its<br />
subsidiaries and of <strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited as of December 31, <strong>2010</strong> is creditable presentation in accordance<br />
with generally accepted accounting principles and compliance with related laws and regulations.<br />
Professor Suphachai Phisitvanich<br />
Chairman<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Mr. Watchai Vilailuck<br />
Executive Chairman<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
58<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
<strong>Report</strong> of the Audit Committee<br />
To Shareholders<br />
The Audit Committee of <strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited comprises of three independent committee members<br />
who have full qualifications complying with the SECûs notification named Dr. Chotivit Chayawattanangkul, Chairman of the Audit<br />
Committee, Professor Suphachai Phisitvanich and Mr. Kanthit Aranyakanont, committee members.<br />
In <strong>2010</strong>, the Audit Committee held 5 meetings jointly with the executives, auditors and internal auditors, and a meeting<br />
without the executives. The Audit Committee carried out the duties and responsibilities assigned by the Board of Directors which<br />
complies with the requirements of the Stock Exchange of Thailand and reported the results of the meetings to the Board of<br />
Directors for consideration. The significant matters considered during the year were summarized below:<br />
1. Reviewed the quarterly and yearly financial statements in consultation with management and external auditors. The Audit<br />
Committee was of the opinion that the financial reporting present fairly and adequate disclosure in conformity with<br />
generally accepted accounting principles as the opinion of the external auditors.<br />
2. Reviewed and monitored the risk management of the Company and its subsidiaries operated by the Risk Management<br />
Committee. The Audit Committee was of the opinion that the Company has an effective and efficient risk management<br />
measures by identifying, evaluating, managing and monitoring the risk management measures in a quarterly meeting as<br />
well as review them any time the Company encounters new risk factors effected to the Companyûs business.<br />
3. Considered and approved the annual audit plan as well as reviewed the evaluation of the Companyûs internal control<br />
system from reports of the internal audit department which performed to comply with the annual audit plan, and also<br />
provided comments to the internal audit department to perform the duties with efficiency and effectiveness. The Audit<br />
Committee was of the opinion that the Company has good internal control system, appropriate maintains the property,<br />
correctly and reliable discloses the information, and has sufficient and effective monitoring and control systems of the<br />
Companyûs and its subsidiariesû operations.<br />
4. Reviewed the compliance with the Securities and Exchange Act, regulations of the SET and laws related to the<br />
Companyûs businesses. The Audit Committee was of the opinion that no significant issue is against the laws, regulation<br />
and the Companyûs commitment.<br />
5. Considered and expressed the opinion that the connected transactions or transactions with possible conflict of interests<br />
as specified by the laws and the regulations of the SET were reasonable and beneficial to the Company.<br />
6. Reviewed the Audit Committee charter to comply with the regulations of the SET and the SEC as well as the Securities<br />
and Exchange Act.<br />
7. Prepared the Audit Committee activities report that will be disclosed in the annual report to comply with the best<br />
practices of the Audit Committee and regulations of the SET.<br />
8. Proposed the appointment of auditor from Ernst & Young Office Limited to be the Companyûs auditor considered from<br />
the performance, beneficial comment to the Company, independence of audit and opinion to the Companyûs financial<br />
statement as well as proposed an appropriate audit fee.<br />
9. Conducted the Audit Committee Self-Assessment, the results in overall areas of assessment were excellent. This<br />
was shown that the Audit Committee performed their duties completely as assigned by the Board of Directors and<br />
complied with the best practices.<br />
From the above duties, the Audit Committee was of the opinion that the Companyûs financial reports were made in<br />
accordance with generally accepted accounting standards with sufficient disclosure. The Company has complied with the<br />
Securities and Exchange Act, regulations of the SET and the SEC as well as other laws related to the Companyûs business. The<br />
Company has good corporate governance system with adequate internal control and risk management systems.<br />
Dr. Chotivid Chayavadhanangkur<br />
Chairman of the Audit Committee<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 59
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
<strong>Report</strong> of Independent Auditor<br />
To the Shareholders of <strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
I have audited the accompanying consolidated balance sheet of <strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited and its<br />
subsidiaries as at 31 December <strong>2010</strong>, and the related consolidated statements of income, changes in shareholdersû equity and<br />
cash flows for the year then ended, and the separate financial statements of <strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited for the<br />
same period. These financial statements are the responsibility of the management of the Company and its subsidiaries as to their<br />
correctness and the completeness of the presentation. My responsibility is to express an opinion on these financial statements<br />
based on my audit. The consolidated financial statements of <strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited and its subsidiaries and<br />
the separate financial statements of <strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited for the year ended 31 December 2009 were<br />
audited in accordance with generally accepted auditing standards by another auditor of our office, who under her report dated<br />
24 February <strong>2010</strong> expressed an unqualified opinion on those financial statements but drew attention to the related party<br />
transactions.<br />
I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I plan and<br />
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An<br />
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit<br />
also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the<br />
overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.<br />
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited and its subsidiaries and of <strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited as at 31<br />
December <strong>2010</strong>, the results of their operations, and cash flows for the year then ended in accordance with generally accepted<br />
accounting principles.<br />
Without qualifying my opinion on the above financial statements, I draw attention to Note 8 to the financial statements<br />
which indicates that <strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited and its subsidiaries had significant business transactions with<br />
related parties, principally in respect of the purchase and sales of goods, and the provision of services and loans. Such<br />
transactions have been concluded on terms and bases agreed upon between <strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited and<br />
those related parties.<br />
Ernst & Young Office Limited<br />
Bangkok: 23 February 2011<br />
Siriwan Suratepin<br />
Certified Public Accountant (Thailand) No. 4604<br />
60<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
Financial Statements<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited and its subsidiaries<br />
Balance sheets<br />
As at 31 December <strong>2010</strong> and 2009<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
Note <strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Assets<br />
Current assets<br />
Cash and cash equivalents 6 147,287,607 180,652,757 38,393,246 81,154,703<br />
Short-term investments 7 202,880,412 594,085,812 115,613,600 594,085,812<br />
Trade accounts receivable<br />
Related parties 8 2,439,716 1,800,537 53,362,789 33,552,669<br />
Unrelated parties - net 2,961,381,979 3,077,371,496 2,552,095,797 2,311,581,461<br />
Trade accounts receivable - net 9 2,963,821,695 3,079,172,033 2,605,458,586 2,345,134,130<br />
Amounts due from and advance to related parties 8 5,358,208 5,827,419 421,177,579 372,931,111<br />
Short-term loans to<br />
Related parties 8 - - 541,100,000 681,494,510<br />
Unrelated party 10 9,000,000 9,000,000 - -<br />
Total short-term loans 9,000,000 9,000,000 541,100,000 681,494,510<br />
Inventories - net 11 873,963,546 777,175,583 730,673,887 590,810,617<br />
Other current assets - net 12 400,624,020 871,086,413 89,728,823 275,529,663<br />
Total current assets 4,602,935,488 5,517,000,017 4,542,145,721 4,941,140,546<br />
Non-current assets<br />
Restricted bank deposits 6, 13 104,510,837 104,787,713 102,937,288 103,226,006<br />
Investments in subsidiaries 14 - - 416,940,826 391,940,826<br />
Property, plant and equipment - net 15 646,308,086 429,161,446 364,364,069 210,847,673<br />
Prepaid IT service fee to parent company - net 16 1,194,085 15,523,124 875,335 11,379,374<br />
Intangible asset - net 17 33,753,343 27,500,000 - -<br />
Other non-current assets 45,332,536 45,005,232 37,776,199 39,109,325<br />
Total non-current assets 831,098,887 621,977,515 922,893,717 756,503,204<br />
Total assets 5,434,034,375 6,138,977,532 5,465,039,438 5,697,643,750<br />
The accompanying notes are an integral part of the financial statements.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 61
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited and its subsidiaries<br />
Balance sheets (continued)<br />
As at 31 December <strong>2010</strong> and 2009<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
Note <strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Liabilities and shareholdersû equity<br />
Current liabilities<br />
Bank overdrafts and short-term loans from banks 18 1,200,311,544 1,226,798,028 1,087,819,267 995,542,225<br />
Trust receipts 18 1,134,237,406 1,593,020,411 1,045,388,762 1,463,661,142<br />
Trade accounts payable<br />
Related parties 8 299,187 822,120 864,896,670 541,653,458<br />
Unrelated parties 369,317,370 678,748,579 48,683,520 144,119,335<br />
Total trade accounts payable 369,616,557 679,570,699 913,580,190 685,772,793<br />
Amounts due to and advance from related parties 8 3,507,261 5,151,235 173,731,361 130,404,694<br />
Short-term loans from<br />
Related parties 8 - - 106,650,000 430,000,000<br />
Unrelated party 19 495,000 12,606,000 - -<br />
Total short-term loans 495,000 12,606,000 106,650,000 430,000,000<br />
Current portion of long-term loan 20 1,066,973 - 1,066,973 -<br />
Current portion of liabilities under finance<br />
lease agreements 21 5,684,037 1,875,864 5,412,355 1,827,316<br />
Other current liabilities 22 289,468,778 248,366,490 205,037,267 142,073,091<br />
Total current liabilities 3,004,387,556 3,767,388,727 3,538,686,175 3,849,281,261<br />
Non-current liabilities<br />
Long-term loan, net of current portion 20 9,684,423 - 9,684,423 -<br />
Long-term liabilities under finance lease<br />
agreements, net of current portion 21 403,279 5,412,355 - 5,412,355<br />
Other non-current liabilities 1,209,686 2,058,486 1,209,686 4,353,575<br />
Total non-current liabilities 11,297,388 7,470,841 10,894,109 9,765,930<br />
Total liabilities 3,015,684,944 3,774,859,568 3,549,580,284 3,859,047,191<br />
The accompanying notes are an integral part of the financial statements.<br />
62<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited and its subsidiaries<br />
Balance sheets (continued)<br />
As at 31 December <strong>2010</strong> and 2009<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
Note <strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Liabilities and shareholdersû equity (continued)<br />
Shareholdersû equity<br />
Share capital<br />
Registered<br />
4,440,000,000 ordinary shares of Baht 0.1 each 444,000,000 444,000,000 444,000,000 444,000,000<br />
Issued and fully paid-up<br />
4,301,300,000 ordinary shares of Baht 0.1 each<br />
(2009: 4,300,000,000 ordinary shares of<br />
Baht 0.1 each) 430,130,000 430,000,000 430,130,000 430,000,000<br />
Share premium 1,072,132,034 1,070,052,034 1,072,132,034 1,070,052,034<br />
Unrealised gain<br />
Lower of investment in subsidiary companies arising as<br />
a result of acquisition additional shares at a price lower<br />
than net book value at the acquisition date - net 681,422 681,422 - -<br />
Translation adjustment (8,178,147) (10,882,681) - -<br />
Retained earnings<br />
Appropriated - statutory reserve 24 44,400,000 44,400,000 44,400,000 44,400,000<br />
Unappropriated 848,472,116 799,688,366 368,797,120 294,144,525<br />
Equity attributable to the Companyûs shareholders 2,387,637,425 2,333,939,141 1,915,459,154 1,838,596,559<br />
Minority interest - equity attributable to minority<br />
shareholders of subsidiaries 30,712,006 30,178,823 - -<br />
Total shareholdersû equity 2,418,349,431 2,364,117,964 1,915,459,154 1,838,596,559<br />
Total liabilities and shareholdersû equity 5,434,034,375 6,138,977,532 5,465,039,438 5,697,643,750<br />
The accompanying notes are an integral part of the financial statements.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 63
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited and its subsidiaries<br />
Income statements<br />
For the years ended 31 December <strong>2010</strong> and 2009<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
Note <strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Revenues<br />
Sales 7,019,935,915 7,929,690,021 6,039,370,580 6,421,068,074<br />
Service income 966,573,534 839,262,484 96,570,020 37,970,758<br />
Other income 25 138,351,876 270,210,571 480,262,544 304,833,949<br />
Total revenues 8,124,861,325 9,039,163,076 6,616,203,144 6,763,872,781<br />
Expenses 27<br />
Cost of sales 5,794,347,721 6,913,863,121 5,289,496,051 5,753,499,473<br />
Cost of services 554,033,580 506,400,434 40,246,177 35,336,851<br />
Selling expenses 1,146,612,778 982,307,477 744,549,234 578,250,385<br />
Administrative expenses 316,572,321 352,843,327 240,352,379 222,402,891<br />
Management benefit expenses 22,295,358 21,266,565 21,800,585 20,777,666<br />
Other expenses 26 41,713,826 12,664,190 26,508,359 2,150,591<br />
Total expenses 7,875,575,584 8,789,345,114 6,362,952,785 6,612,417,857<br />
Income before finance cost and corporate income tax 249,285,741 249,817,962 253,250,359 151,454,924<br />
Finance cost 28 (106,399,228) (141,880,180) (92,597,764) (129,920,496)<br />
Income before corporate income tax 142,886,513 107,937,782 160,652,595 21,534,428<br />
Corporate income tax (7,401,581) (2,916,864) - (203,454)<br />
Net income for the year 135,484,932 105,020,918 160,652,595 21,330,974<br />
Net income attributable to:<br />
Equity holders of the parent 134,783,750 115,554,152 160,652,595 21,330,974<br />
Minority interests of the subsidiaries 701,182 (10,533,234)<br />
135,484,932 105,020,918<br />
Earnings per share 29<br />
Basic earnings per share<br />
Net income attributable to equity holders of the parent 0.031 0.027 0.037 0.005<br />
Diluted earnings per share<br />
Net income attributable to equity holders of the parent 0.031 0.027 0.037 0.005<br />
The accompanying notes are an integral part of the financial statements.<br />
64<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 65<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited and its subsidiaries<br />
Statements of changes in shareholdersû equity<br />
For the years ended 31 December <strong>2010</strong> and 2009<br />
The accompanying notes are an integral part of the financial statements.<br />
(Unit: Baht)<br />
Consolidated financial statements<br />
Equity attributable to the parentûs shareholders<br />
Lower of<br />
investment<br />
in subsidiary<br />
companies<br />
arising as a<br />
result of<br />
acquisition<br />
additional<br />
Minority<br />
shares at a<br />
interest - equity<br />
price lower Retained earnings Total equity attributable to<br />
Issued and fully than net book Appropriated - attributable to minority<br />
paid-up value at the Translation statutory the parentûs shareholders of<br />
share capital Share premium acquisition date adjustment reserve Unappropriated shareholders subsidiaries Total<br />
Balance as at 31 December 2008 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<br />
Income (expense) recognised<br />
directly in equity:<br />
Translation adjustment - - - (8,226,313) - - (8,226,313) 313,459 (7,912,854)<br />
Net income (expense) recognised<br />
directly in equity - - - (8,226,313) - - (8,226,313) 313,459 (7,912,854)<br />
Net income for the year - - - - - 115,554,152 115,554,152 (10,533,234) 105,020,918<br />
Total income (expense) for the year - - - (8,226,313) - 115,554,152 107,327,839 (10,219,775) 97,108,064<br />
Dividend paid (Note 30) - - - - - (43,000,000) (43,000,000) - (43,000,000)<br />
Unappropriated retained earnings<br />
transferred to statutory reserve - - - - 1,400,000 (1,400,000) - - -<br />
Increase in minority interest due to<br />
sale of investment in subsidiary - - - - - - - 19,940,144 19,940,144<br />
Balance as at 31 December 2009 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
66<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong><br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited and its subsidiaries<br />
Statements of changes in shareholdersû equity (continued)<br />
For the years ended 31 December <strong>2010</strong> and 2009<br />
(Unit: Baht)<br />
Consolidated financial statements<br />
Equity attributable to the parentûs shareholders<br />
Lower of<br />
investment<br />
in subsidiary<br />
companies<br />
arising as a<br />
result of<br />
acquisition<br />
additional<br />
Minority<br />
shares at a<br />
interest - equity<br />
price lower Retained earnings Total equity attributable to<br />
Issued and fully than net book Appropriated - attributable to minority<br />
paid-up value at the Translation statutory the parentûs shareholders of<br />
share capital Share premium acquisition date adjustment reserve Unappropriated shareholders subsidiaries Total<br />
Balance as at 31 December 2009 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<br />
Income (expense) recognised<br />
directly in equity:<br />
Translation adjustment - - - 2,704,534 - - 2,704,534 (167,999) 2,536,535<br />
Net income (expense) recognised<br />
directly in equity - - - 2,704,534 - - 2,704,534 (167,999) 2,536,535<br />
Net income for the year - - - - - 134,783,750 134,783,750 701,182 135,484,932<br />
Total income (expense) for the year - - - 2,704,534 - 134,783,750 137,488,284 533,183 138,021,467<br />
Dividend paid (Note 30) - - - - - (86,000,000) (86,000,000) - (86,000,000)<br />
Issued of shares due to<br />
warrant exercised (Note 23) 130,000 2,080,000 - - - - 2,210,000 - 2,210,000<br />
Balance as at 31 December <strong>2010</strong> 430,130,000 1,072,132,034 681,422 (8,178,147) 44,400,000 848,472,116 2,387,637,425 30,712,006 2,418,349,431<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
The accompanying notes are an integral part of the financial statements.
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited and its subsidiaries<br />
Statements of changes in shareholdersû equity (continued)<br />
For the years ended 31 December <strong>2010</strong> and 2009<br />
(Unit: Baht)<br />
Separate financial statements<br />
Retained earnings<br />
Issued and fully Appropriated -<br />
paid-up<br />
statutory<br />
share capital Share premium reserve Unappropriated Total<br />
Balance as at 31 December 2008 430,000,000 1,070,052,034 43,000,000 317,213,551 1,860,265,585<br />
Net income for the year - - - 21,330,974 21,330,974<br />
Dividend paid (Note 30) - - - (43,000,000) (43,000,000)<br />
Unappropriated retained earnings transferred to statutory reserve - - 1,400,000 (1,400,000) -<br />
Balance as at 31 December 2009 430,000,000 1,070,052,034 44,400,000 294,144,525 1,838,596,559<br />
Balance as at 31 December 2009 430,000,000 1,070,052,034 44,400,000 294,144,525 1,838,596,559<br />
Net income for the year - - - 160,652,595 160,652,595<br />
Dividend paid (Note 30) - - - (86,000,000) (86,000,000)<br />
Issued of shares due to warrant exercised (Note 23) 130,000 2,080,000 - - 2,210,000<br />
Balance as at 31 December <strong>2010</strong> 430,130,000 1,072,132,034 44,400,000 368,797,120 1,915,459,154<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 67<br />
The accompanying notes are an integral part of the financial statements.
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited and its subsidiaries<br />
Cash flow statements<br />
For the years ended 31 December <strong>2010</strong> and 2009<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
Note <strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Cash flows from operating activities<br />
Income before tax 142,886,513 107,937,782 160,652,595 21,534,428<br />
Adjustments to reconcile income before tax<br />
to net cash provided by (paid from)<br />
operating activities:<br />
Unrealised (gain) loss on exchange (4,093,345) 4,666,771 (2,833,308) 2,509,997<br />
(Gain) loss on disposal of short-term investments<br />
in trading securities 7.1 (41,426,517) 1,852,822 (37,468,101) 1,852,822<br />
(Gain) loss on change in value of short-term<br />
investments in trading securities 7.1 11,926,830 (54,126,087) 7,347,892 (54,126,087)<br />
Write-off bad debts - 1,378,673 - 153,232<br />
Increase in allowance for<br />
doubtful accounts - trade accounts receivable 4,180,980 763,828 329,085 753,008<br />
Increase (decrease) in allowance for<br />
diminution in value of inventories 12,532,539 2,671,542 16,666,493 (2,945,943)<br />
Increase (decrease) in allowance for diminution<br />
in value of sales promotion receivables 4,527,563 (3,307,371) (3,083,449) (608,470)<br />
Increase in allowance for diminution in<br />
value of advance for purchase of inventories 1,319,539 12,432 1,319,539 12,432<br />
Write-off inventories - 26,136,424 - -<br />
Write-off withholding tax deducted at sources 2,623,513 4,290,675 - 4,113,782<br />
Gain on disposal of investment in subsidiary company - (45,511,537) - -<br />
Transfer equipment to expense 169,741 3,129,284 169,741 3,129,284<br />
(Gain) loss on disposal of equipment (883,784) 1,581,145 (1,332,296) (18,217)<br />
Depreciation 15 148,688,877 155,597,882 71,177,619 79,835,099<br />
Amortisation of prepaid IT service fee to<br />
parent company 16 14,329,039 14,329,039 10,504,039 10,504,039<br />
Amortisation of intangible assets 17 13,846,587 - - -<br />
Amortisation - others 16,229,792 14,153,800 - -<br />
Amortisation of deferred interest expenses under<br />
finance lease agreements 358,534 477,385 341,104 457,186<br />
Increase in allowance for warranty 1,432,000 2,991,047 1,432,000 2,991,047<br />
Dividend income from subsidiary 8, 14 - - (239,832,000) -<br />
Interest income 25 (4,684,821) (7,425,475) (25,517,072) (36,470,599)<br />
Interest expenses 28 89,052,028 127,751,994 81,153,615 121,251,593<br />
Income from operating activities before changes<br />
in operating assets and liabilities 413,015,608 359,352,055 41,027,496 154,928,633<br />
The accompanying notes are an integral part of the financial statements.<br />
68<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited and its subsidiaries<br />
Cash flow statements (continued)<br />
For the years ended 31 December <strong>2010</strong> and 2009<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
Note <strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Cash flows from operating activities (continued)<br />
Operating assets (increase) decrease<br />
Trade accounts receivable - related parties (779,328) (2,548,958) (19,810,120) 43,886,211<br />
Trade accounts receivable - unrelated parties 112,872,356 (656,973,420) (240,901,555) (675,529,672)<br />
Amounts due from and advance to related parties 468,348 6,913,745 (51,642,608) (89,193,729)<br />
Inventories (111,587,781) 802,296,016 (159,659,908) 718,154,299<br />
Other current assets 367,694,365 (54,590,471) 140,025,541 42,710,810<br />
Other non-current assets (451,830) (14,227,844) 1,333,126 (2,118,741)<br />
Operating liabilities increase (decrease)<br />
Trade accounts payable - related parties (522,933) 49,428,367 323,023,829 272,883,649<br />
Trade accounts payable - unrelated parties (308,577,812) 209,671,883 (95,194,372) 80,631,734<br />
Amounts due to and advance from related parties (2,892,657) (2,193,962) 44,451,392 46,571,837<br />
Other current liabilities 32,105,159 58,996,968 56,059,903 13,573,496<br />
Other non-current liabilities (848,800) 3,025,177 (3,143,889) (1,693,776)<br />
Net cash flows from (used in) operating activities 500,494,695 759,149,556 35,568,835 604,804,751<br />
Cash paid for acquisition of short-term<br />
investments in trading securities 7.1 (51,144,932) - (1,451,760) -<br />
Proceeds from sales of short-term<br />
investments in trading securities 7.1 173,034,614 7,624,045 211,228,776 7,624,045<br />
Cash paid for interest expenses (88,103,658) (130,450,633) (82,507,340) (124,029,568)<br />
Cash received for withholding tax 118,703,266 796,627 57,138,820 -<br />
Cash paid for corporate income tax (49,540,996) (46,377,044) (9,599,707) (9,473,076)<br />
Cash flows from operating activities 603,442,989 590,742,551 210,377,624 478,926,152<br />
The accompanying notes are an integral part of the financial statements.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 69
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited and its subsidiaries<br />
Cash flow statements (continued)<br />
For the years ended 31 December <strong>2010</strong> and 2009<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
Note <strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Cash flows from investing activities<br />
(Increase) decrease in short-term investments<br />
in debt securities 299,557,905 (299,557,905) 299,557,905 (299,557,905)<br />
Cash paid to provide short-term loans to<br />
related parties 8 - - (587,700,000) (718,529,970)<br />
Cash received from repayment of short-term<br />
loans to related parties 8 - - 728,094,510 563,315,948<br />
Cash received for interest income from short-term<br />
loans to related parties 4,685,684 7,434,383 28,913,212 38,955,235<br />
Decrease in restricted bank deposits 276,876 2,886,171 288,718 140,524<br />
Increase in fixed deposit (742,500) (100,000,000) (742,500) (100,000,000)<br />
Dividend income from subsidiaries 8, 14 - - 239,832,000 42,969,900<br />
Net cash flow from disposal of investment in<br />
subsidiary company - (8,434,864) - -<br />
Cash paid for investment in subsidiaries - - (25,000,000) -<br />
Cash paid for acquisition of equipment (357,459,395) (165,276,518) (214,811,200) (46,045,571)<br />
Proceeds from disposal of equipment 8,775,757 337,599 5,962,755 336,069<br />
Proceeds from disposal of asset held for sale - 5,850,000 - -<br />
Cash paid for acquisition of intangible assets (20,124,358) - - -<br />
Net cash flows from (used in) investing activities (65,030,031) (556,761,134) 474,395,400 (518,415,770)<br />
The accompanying notes are an integral part of the financial statements.<br />
70<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited and its subsidiaries<br />
Cash flow statements (continued)<br />
For the years ended 31 December <strong>2010</strong> and 2009<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
Note <strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Cash flows from financing activities<br />
Increase (decrease) in bank overdrafts (24,131,532) (66,030,182) 1,507,326 (30,513,829)<br />
Proceeds from short-term loans from banks 3,523,762,274 2,190,765,321 93,766,459 976,102,732<br />
Cash paid to settle short-term loans from banks (3,524,835,411) (2,874,334,525) (2,996,743) (1,640,656,757)<br />
Increase (decrease) in trust receipts (450,255,124) 554,990,411 (409,744,499) 615,243,939<br />
Proceeds from short-term loans from related parties 8 - - 475,000,000 525,000,000<br />
Repayment of short-term loans from related parties 8 - - (798,350,000) (533,000,000)<br />
Repayment of short-term loans from unrelated party (12,111,000) - - -<br />
Cash paid to settle long-term loans from banks (758,604) (4,159,680) (758,604) -<br />
Cash paid to settle liabilities under finance<br />
lease agreements (2,338,211) (3,613,084) (2,168,420) (2,785,008)<br />
Cash received for share issued due to warrant exercised 2,210,000 - 2,210,000 -<br />
Dividend paid 30 (86,000,000) (43,000,000) (86,000,000) (43,000,000)<br />
Net cash flows used in financing activities (574,457,608) (245,381,739) (727,534,481) (133,608,923)<br />
Translation adjustments 2,679,500 (11,291,428) - -<br />
Net decrease in cash and cash equivalents (33,365,150) (222,691,750) (42,761,457) (173,098,541)<br />
Cash and cash equivalents at beginning of year 180,652,757 403,344,507 81,154,703 254,253,244<br />
Cash and cash equivalents at end of year 147,287,607 180,652,757 38,393,246 81,154,703<br />
Supplemental disclosures of cash flows information<br />
Non-cash items for investing activities<br />
Transfer inventories to equipment 3,130,145 6,294,257 3,130,145 5,082,652<br />
Increase in accounts payable for purchase of equipment 42,643 - 42,870 -<br />
Right under the advertising agreement received<br />
from the disposal of asset held for sale 17 - 27,500,000 - -<br />
Receivable from disposal of asset held for sale - 13,650,000 - -<br />
Long-term loan from bank for purchase<br />
of fixed assets 20 11,510,000 - 11,510,000 -<br />
Assets acquired under finance lease agreement 828,479 - - -<br />
The accompanying notes are an integral part of the financial statements.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 71
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited and its subsidiaries<br />
Notes to consolidated financial statements<br />
For the years ended 31 December <strong>2010</strong> and 2009<br />
1. General information<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited (çthe Companyé) is a public company incorporated and domiciled in<br />
Thailand. Its parent company is <strong>Samart</strong> Corporation Public Company Limited, which was incorporated in Thailand. The<br />
Company is principally engaged in the distribution of communications and electronic equipment. The registered office of<br />
the Company is at 99/3 Moo 4 Software Park Building, 33rd Floor, Chaengwattana Road, Klong Gluar, Pak-kred,<br />
Nonthaburi.<br />
2. Basis of preparation<br />
2.1 The financial statements have been prepared in accordance with accounting standards enunciated under the<br />
Accounting Professions Act B.E. 2547 and their presentation has been made in compliance with the stipulations<br />
of the Notification of the Department of Business Development dated 30 January 2009, issued under the<br />
Accounting Act B.E. 2543.<br />
The financial statements in Thai language are the official statutory financial statements of the Company.<br />
The financial statements in English language have been translated from the Thai language financial statements.<br />
The financial statements have been prepared on a historical cost basis except where otherwise disclosed<br />
in the accounting policies.<br />
2.2 Basis of consolidation<br />
a) The consolidated financial statements include the financial statements of <strong>Samart</strong> I-<strong>Mobile</strong> Public Company<br />
Limited (çthe Companyé) and the following subsidiary companies (çthe subsidiariesé):<br />
Subsidiaries directly held by the Company<br />
Revenues as a<br />
Assets as a percentage percentage to the<br />
to the consolidated consolidated total<br />
Country of Percentage of total assets as at revenues for the year<br />
Companyûs name Nature of business incorporation shareholding 31 December ended 31 December<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Percent Percent Percent Percent Percent Percent<br />
<strong>Samart</strong> <strong>Mobile</strong> Services Distribution of information Thailand 97.4 97.4 0.91 5.09 0.96 3.40<br />
Co., Ltd.<br />
technology devices<br />
<strong>Samart</strong> Multimedia Provision of multimedia Thailand 100 100 12.11 8.58 11.09 8.86<br />
Co., Ltd.<br />
infotainment<br />
I-<strong>Mobile</strong> International General management business Thailand 100 100 14.86 18.73 13.72 16.79<br />
Co., Ltd.<br />
including business planning<br />
and business coordination<br />
Brain Source Co., Ltd. Research and development of Thailand 100 100 0.05 0.05 - -<br />
mobile phone application<br />
I-<strong>Mobile</strong> Plus Co., Ltd. Provision of wireless Thailand 100 100 0.14 0.04 - -<br />
(Formerly known as<br />
çI-<strong>Mobile</strong> Netplus<br />
Co., Ltd.é)<br />
telecommunications services<br />
(In <strong>2010</strong>, not yet operational<br />
in its principal activity)<br />
72<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
Indirect subsidiaries held by the Companyûs subsidiaries<br />
Percentage of indirect Country of<br />
Companyûs name Nature of business shareholding incorporation<br />
<strong>2010</strong> 2009<br />
Percent Percent<br />
Investments through <strong>Samart</strong> Multimedia Co., Ltd.<br />
Take A Look Co., Ltd. Provision of advertising and billboard advertisement 67 67 Thailand<br />
services, and preparation<br />
<strong>Samart</strong> Interactive Media Co., Ltd. Distribution of goods and provision of services related to 100 100 Thailand<br />
horoscopes and astrology<br />
I-Sport Co., Ltd. Provider of information of sports via full option interactive 50 50 Thailand<br />
multimedia<br />
Investments through I-<strong>Mobile</strong> International Co., Ltd.<br />
<strong>Samart</strong> I-<strong>Mobile</strong> (Malaysia) Sdn. Bhd. Distributor of mobile phones and provider of 100 100 Malaysia<br />
entertainment content<br />
I-<strong>Mobile</strong> (Cambodia) Co., Ltd. Ceased business in 2006, currently is in process of liquidation - - Cambodia<br />
Pt. <strong>Samart</strong> I-<strong>Mobile</strong> Indonesia Distributor of mobile phones and accessories 100 100 Indonesia<br />
<strong>Samart</strong> I-<strong>Mobile</strong> (Hong Kong) Limited Distributor of mobile phones and accessories 100 100 Hong Kong<br />
I-<strong>Mobile</strong> Inter trade Co., Ltd. Export I-<strong>Mobile</strong> products 100 100 Thailand<br />
Investments through I-<strong>Mobile</strong> International Co., Ltd. and I-<strong>Mobile</strong> Inter trade Co., Ltd.<br />
<strong>Samart</strong> I-<strong>Mobile</strong> (Middle East) FZCO Distributor of mobile phones and provision of mobile content 100 100 United<br />
(In <strong>2010</strong>, not yet operational in its principal activity)<br />
Arab Emirates<br />
Investment through <strong>Samart</strong> I-<strong>Mobile</strong> (Malaysia) Sdn. Bhd.<br />
Pemata Benar Sdn. Bhd. Not yet operational 100 100 Malaysia<br />
b) Subsidiaries are fully consolidated as from the date of acquisition, being the date on which the Company<br />
obtains control, and continue to be consolidated until the date when such control ceases.<br />
c) The financial statements of the subsidiaries are prepared using the same significant accounting policies as<br />
the Company.<br />
d) The assets and liabilities in the financial statements of overseas subsidiary companies are translated to<br />
Baht using the exchange rate prevailing on the balance sheet date, and revenues and expenses translated<br />
using monthly average exchange rates. The resulting differences are shown under the caption of çTranslation<br />
adjustmenté in shareholdersû equity.<br />
e) Material balances and transactions between the Company and its subsidiary companies have been<br />
eliminated from the consolidated financial statements.<br />
f) Minority interests represent the portion of net income or loss and net assets of the subsidiaries that are<br />
not held by the Company and are presented separately in the consolidated income statement and within<br />
equity in the consolidated balance sheet.<br />
g) In recording the acquisition of additional shares of subsidiaries (repurchase of shares from minority<br />
shareholders) when the fair value of the net assets acquired is lower than the cost of the investment the<br />
difference has been presented in shareholdersû equity in the balance sheet under the caption of çSurplus<br />
on investment in subsidiary companies arising as a result of acquisition of additional shares at a price<br />
higher than net book value at the acquisition dateé. When the fair value of the net assets acquired is higher<br />
than the cost of the investment the difference has been presented in shareholdersû equity in the balance<br />
sheet under the caption of çLower of investment in subsidiary companies arising as a result of acquisition<br />
of additional shares at a price lower than net book value at the acquisition dateé.<br />
2.3 The separate financial statements, which present investments in subsidiaries presented under the cost method,<br />
have been prepared solely for the benefit of the public.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 73
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
3. Adoption of new accounting standards<br />
During the current year, the Federation of Accounting Professions issued a number of revised and new accounting<br />
standards as listed below.<br />
a) Accounting standards that are effective for fiscal years beginning on or after 1 January 2011 (except Framework<br />
for the Preparation and Presentation of Financial Statements, which is immediately effective):<br />
Framework for the Preparation and Presentation of Financial Statements<br />
(revised 2009)<br />
TAS 1 (revised 2009)<br />
TAS 2 (revised 2009)<br />
TAS 7 (revised 2009)<br />
TAS 8 (revised 2009)<br />
TAS 10 (revised 2009)<br />
TAS 11 (revised 2009)<br />
TAS 16 (revised 2009)<br />
TAS 17 (revised 2009)<br />
TAS 18 (revised 2009)<br />
TAS 19<br />
TAS 23 (revised 2009)<br />
TAS 24 (revised 2009)<br />
TAS 26<br />
TAS 27 (revised 2009)<br />
TAS 28 (revised 2009)<br />
TAS 29<br />
TAS 31 (revised 2009)<br />
TAS 33 (revised 2009)<br />
TAS 34 (revised 2009)<br />
TAS 36 (revised 2009)<br />
TAS 37 (revised 2009)<br />
TAS 38 (revised 2009)<br />
TAS 40 (revised 2009)<br />
TFRS 2<br />
TFRS 3 (revised 2009)<br />
TFRS 5 (revised 2009)<br />
TFRS 6<br />
TFRIC 15<br />
Presentation of Financial Statements<br />
Inventories<br />
Statement of Cash Flows<br />
Accounting Policies, Changes in Accounting Estimates and Errors<br />
Events after the <strong>Report</strong>ing Period<br />
Construction Contracts<br />
Property, Plant and Equipment<br />
Leases<br />
Revenue<br />
Employee Benefits<br />
Borrowing Costs<br />
Related Party Disclosures<br />
Accounting and <strong>Report</strong>ing by Retirement Benefit Plans<br />
Consolidated and Separate Financial Statements<br />
Investments in Associates<br />
Financial <strong>Report</strong>ing in Hyperinflationary Economies<br />
Interests in Joint Ventures<br />
Earnings per Share<br />
Interim Financial <strong>Report</strong>ing<br />
Impairment of Assets<br />
Provisions, Contingent Liabilities and Contingent Assets<br />
Intangible Assets<br />
Investment Property<br />
Share-Based Payment<br />
Business Combinations<br />
Non-current Assets Held for Sale and Discontinued Operations<br />
Exploration for and Evaluation of Mineral Resources<br />
Agreements for the Construction of Real Estate<br />
b) Accounting standards that are effective for fiscal years beginning on or after 1 January 2013:<br />
TAS 12<br />
Income Taxes<br />
TAS 20 (revised 2009) Accounting for Government Grants and Disclosure of Government Assistance<br />
TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rates<br />
The Companyûs management believes that these accounting standards will not have any significant impact<br />
on the financial statements for the year when they are initially applied, except for the following accounting<br />
standards which management expects the impact on the financial statements in the year when they are adopted.<br />
74<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
TAS 19 Employee Benefits<br />
This accounting standard requires employee benefits to be recognised as expense in the period in which<br />
the service is performed by the employee. In particular, an entity has to evaluate and make a provision for postemployment<br />
benefits using actuarial techniques. Currently, the Company and its subsidiaries account for such<br />
employee benefits when they are incurred.<br />
At present, the management is evaluating the impact on the financial statements in the year when this<br />
standard is adopted.<br />
TAS 12 Income Taxes<br />
This accounting standard requires an entity to identify temporary differences, which are differences between<br />
the carrying amount of an asset or liability in the accounting records and its tax base, and to recognise deferred tax<br />
assets and liabilities under the stipulated guidelines.<br />
At present, the management is evaluating the impact on the financial statements in the year when this<br />
standard is adopted.<br />
4. Significant accounting policies<br />
4.1 Revenue recognition<br />
Sales of goods<br />
Sales of goods are recognised when the significant risks and rewards of ownership of the goods have<br />
passed to the buyer. Sales are the invoiced value, excluding value added tax, of goods supplied after deducting<br />
discounts and allowances.<br />
Rendering of services<br />
Service revenue is recognised when services have been rendered taking into account the stage of<br />
completion.<br />
Unearned revenue from telephone service of prepaid phone cards<br />
Unearned revenue from telephone service of the prepaid system represents the unused portion of the face<br />
value of prepaid phone cards. It is deferred and recognised based on actual usage or upon expiration of the<br />
usage as stated on cards, depending on which comes first.<br />
Revenue from telephone services<br />
Revenue related to domestic calls, international calls and roaming service calls is recognised when the<br />
telephone services have been rendered.<br />
Revenue from sales of telephone sets and starter kits<br />
Sales of goods are recognised when the significant risks and rewards of ownership of the goods have<br />
passed to the buyer. Sales are the invoiced value, excluding value added tax, of goods supplied after deducting<br />
discounts and allowances.<br />
In case of revenue arrangements with multiple deliverable, the revenue elements are recognised in proportion<br />
to the fair value of delivered items. The subsequent services are recorded at the normal selling price or at a<br />
discounted value, depending on the facts and circumstances.<br />
Selling support income<br />
Selling support income is recognised as income on an accrual basis.<br />
Entrance fee on franchise agreement<br />
Entrance fee on franchise agreement is recognised on the term of agreement.<br />
Royalty and technical assistance fee<br />
Royalty and technical assistance fee are recognised as income on an accrual basis.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 75
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Interest income<br />
Interest income is recognised on an accrual basis based on the effective interest rate.<br />
Dividends<br />
Dividends are recognised when the right to receive the dividends is established.<br />
4.2 Cash and cash equivalents<br />
Cash and cash equivalents consist cash in hand, cash at banks, and all highly liquid investments with an<br />
original maturity of three months or less and not subject to withdrawal restrictions.<br />
4.3 Trade accounts receivable<br />
Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is<br />
provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally<br />
based on collection experiences and analysis of debt aging.<br />
4.4 Inventories<br />
Inventories are valued at the lower of average cost and net realisable value.<br />
The net realisable value of inventories is estimated form the estimated selling price in the ordinary course<br />
of business, less the estimated costs to complete the sale.<br />
Allowance for inventory obsolescence will be set up for old, obsolete, slow moving or deteriorated inventories.<br />
4.5 Investments<br />
a) Investments in securities held for trading are stated at fair value. Changes in the fair value of these<br />
securities are recorded as gains or losses in the income statement.<br />
b) Investments in subsidiaries are accounted for in separate financial statements using the cost method.<br />
The fair value of marketable securities is based on the latest bid price of the last working day of the year as<br />
quoted on the Stock Exchange of Thailand. If the last bid price of the last working day of the year as quoted on the<br />
Stock Exchange of Thailand is not available, the basis used by the Company to determine the fair value of<br />
marketable securities is the amount for which an asset can be exchanged or liability settled between knowledgeable,<br />
willing parties in an armûs length transaction.<br />
The weighted average method is used for computation of the cost of investments.<br />
On disposal of an investment, the difference between net disposal proceeds and the carrying amount of<br />
the investment is recognised as income or expenses in the income statement.<br />
4.6 Property, plant and equipment/Depreciation<br />
Land is stated at cost. Buildings and equipment are stated at cost less accumulated depreciation and<br />
allowance for loss on impairment of assets (if any).<br />
Depreciation of building and equipment is calculated by reference to their costs on the straight-line basis<br />
over the following estimated useful lives:<br />
Buildings - 20 years<br />
Network equipment and network improvement - 5 years<br />
Furniture, fixture and office equipment - 5 years<br />
Motor vehicles - 5 years<br />
Equipment for rent - 5 years<br />
Depreciation is included in determining income.<br />
No depreciation is provided on land and assets under installation.<br />
76<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
An item of equipment is derecognised upon disposal or when no future economic benefits are expected<br />
from its use or disposal. Any gain or loss arising on disposal of an asset (calculated as the difference between the<br />
net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset<br />
is derecognised.<br />
4.7 Intangible assets<br />
Intangible assets are initially recognised at cost. Following the initial recognition, the intangible assets are<br />
carried at cost less any accumulated amortisation and any accumulated impairment losses.<br />
Intangible assets with finite lives are amortised on a systematic basis over the economic useful life and<br />
tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation<br />
period and the amortisation method of such intangible assets are reviewed at least at each financial year end. The<br />
amortisation expense is charged to the income statement.<br />
A summary of the intangible assets with finite useful lives is as follows:<br />
Useful lives<br />
Right under the advertising agreement - 2 and 3 years but not exceeding the number of hours granted with<br />
such right in each month<br />
Computer software<br />
- 5 years<br />
Right under the distribution agreement - 2 years<br />
4.8 Related party transactions<br />
Related parties comprise individuals and enterprises that control, or are controlled by, the Company,<br />
whether directly or indirectly, or which are under common control with the Company.<br />
They also include individuals and enterprises which directly or indirectly own a voting interest in the<br />
Company that gives them significant influence over the Company, key management personnel, directors and<br />
officers with authority in the planning and direction of the Companyûs operations.<br />
4.9 Long-term leases<br />
Finance leases<br />
Leases of equipment which transfer substantially all the risks and rewards of ownership are classified as<br />
finance leases. Finance leases are capitalised at the lower of the fair value of the leased assets and the present<br />
value of the minimum lease payments. The outstanding rental obligations, net of finance charges, are included in<br />
other long-term payables, while the interest element is charged to the income statements over the lease period.<br />
The equipment acquired under finance leases is depreciated over the useful life of the assets.<br />
Operating leases<br />
Leases of assets where a significant portion of the risks and rewards of ownership are retained by the<br />
lessor and classified as operating leases. Operating lease payments are recognised as an expense in the income<br />
statement on a straight line basis over the lease term.<br />
4.10 Foreign currencies<br />
Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the<br />
transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the<br />
exchange rate ruling at the balance sheet date.<br />
Gains and losses on exchange are included in determining income.<br />
4.11 Impairment of assets<br />
At each reporting date, the Company and its subsidiaries perform impairment reviews in respect of the<br />
property, plant and equipment and other intangible assets whenever events or changes in circumstances indicate<br />
that an asset may be impaired. An impairment loss is recognised when the recoverable amount of an asset, which<br />
is the higher of the assetûs fair value less costs to sell and its value in use, is less than the carrying amount. In<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 77
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
determining value in use, the estimated future cash flows are discounted to their present value using a pre-tax<br />
discount rate that reflects current market assessments of the time value of money and the risks specific to the<br />
asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are<br />
corroborated by a valuation model that, based on information available, reflects the amount that the Company and<br />
its subsidiaries could obtain from the disposal of the asset in an armûs length transaction between knowledgeable,<br />
willing parties, after deducting the costs of disposal.<br />
An impairment loss is recognised in the income statement.<br />
4.12 Employee benefits<br />
Salaries, wages, bonuses and contributions to the social security fund and provident fund are recognised<br />
as expenses when incurred.<br />
The Company issued warrants to purchase the ordinary shares to employees of the Company and its<br />
subsidiaries. The transactions will be recorded in the financial statements when the warrants are exercised.<br />
4.13 Provisions<br />
Provisions are recognised when the Company and its subsidiaries have a present obligation as a result of<br />
a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle<br />
the obligation, and a reliable estimate can be made of the amount of the obligation.<br />
4.14 Income Tax<br />
Income tax is provided in the accounts at the amount expected to be paid to the taxation authorities,<br />
based on taxable profits determined in accordance with tax legislation. It has been calculated on the Companyûs<br />
income after adjusting added back provision and expenses which are disallowed for tax computation proposes<br />
and less the amount of tax losses brought forward from previous year (if any).<br />
Overseas subsidiaries calculate corporate income tax in accordance with tax rate regulated in tax law of<br />
those countries.<br />
4.15 Derivatives<br />
Forward exchange contracts<br />
Receivables and payables arising from forward exchange contracts are translated into Baht at the rates of<br />
exchange ruling at the balance sheet date. Gains and losses from the translation are included in determining<br />
income.<br />
Currency option agreements<br />
Currency option agreements are contracts between two parties whereby the seller grants the buyer a<br />
future option to buy (call option) or to sell (put option) foreign currency at an exchange rate stipulated in the<br />
agreement. The Company enters into such agreements in order to manage foreign exchange risk.<br />
The notional amounts of cross currency option agreements utilised by the Company to manage foreign<br />
exchange risk are not recognised as assets or liabilities upon inception of the agreement, but fees paid by the<br />
Company in respect of such agreements (if any) are amortised on a straight line basis over the term of the<br />
agreement.<br />
5. Significant accounting judgements and estimates<br />
The preparation of financial statements in conformity with generally accepted accounting principles at times<br />
requires management to make subjective judgements and estimates regarding matters that are inherently uncertain.<br />
These judgements and estimates affect reported amounts and disclosures; and actual results could differ from these<br />
estimates. Significant judgements and estimates are as follows:<br />
Leases<br />
In determining whether a lease is to be classified as an operating lease or finance lease, the management is<br />
required to use judgement regarding whether significant risk and rewards of ownership of the leased asset has been<br />
transferred, taking into consideration terms and conditions of the arrangement.<br />
78<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
Allowance for doubtful accounts<br />
In determining an allowance for doubtful accounts, the management needs to make judgement and estimates<br />
based upon, among other things, past collection history, aging profile of outstanding debts and the prevailing economic<br />
condition.<br />
Allowance for diminution in value of inventories<br />
The determination of allowance for diminution in the value of inventories requires management to exercise<br />
judgement in estimating losses on outstanding inventories, based on the selling price expected in the ordinary course of<br />
business; minus selling expenses and provision for obsolete, slow-moving and deteriorated inventories, and taking into<br />
account the approximate useful life of each type of inventory and current changes in technology.<br />
Allowance for diminution in value of withholding tax deducted at sources<br />
The Company and its subsidiaries regard withholding tax deducted at sources as an asset since they have the<br />
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<br />
of any tax audit by the Revenue officials. However, the management has used judgement to assess the outcome of the<br />
refund claim and believes that no loss will result. Therefore, no allowance for diminution in value of withholding tax<br />
deducted at sources is recorded as at the balance sheet date.<br />
Property, plant and equipment/Depreciation<br />
In determining depreciation of plant and equipment, the management is required to make estimates of the useful<br />
lives and salvage values of the Company and its subsidiariesû plant and equipment and to review estimate useful lives<br />
and salvage values when there are any changes.<br />
In addition, the management is required to review property, plant and equipment for impairment on a periodical<br />
basis and record impairment losses in the period when it is determined that their recoverable amount is lower than the<br />
carrying amount. This requires judgements regarding forecast of future revenues and expenses relating to the assets<br />
subject to the review.<br />
Contingent liabilities<br />
The subsidiary has contingent liabilities as a result of tax assessment. The subsidiaryûs management has used<br />
judgement to assess of the results of the litigation and believes that no loss will result. Therefore, no contingent liabilities<br />
are recorded as at the balance sheet date. However, actual results could differ from the estimates.<br />
6. Cash and cash equivalents<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Cash 1,085,767 1,050,886 911,568 900,568<br />
Bank deposits 250,712,677 284,389,584 140,418,966 183,480,141<br />
Total cash and bank deposits 251,798,444 285,440,470 141,330,534 184,380,709<br />
Less: Restricted bank deposits (104,510,837) (104,787,713) (102,937,288) (103,226,006)<br />
Cash and cash equivalents 147,287,607 180,652,757 38,393,246 81,154,703<br />
As at 31 December <strong>2010</strong>, bank deposits in saving accounts and fixed deposits carried interests between 0.25 and<br />
1.05 percent per annum (2009: between 0.50 and 1.50 percent per annum).<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 79
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
7. Short-term investments<br />
The balance of the short-term investments as at 31 December <strong>2010</strong> and 2009 are as follows:<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Trading securities (Note 7.1) 102,137,912 194,527,907 14,871,100 194,527,907<br />
Fixed deposit at financial institution 100,742,500 100,000,000 100,742,500 100,000,000<br />
Short-term debt securities - 299,557,905 - 299,557,905<br />
Total 202,880,412 594,085,812 115,613,600 594,085,812<br />
7.1 Short-term investments in trading securities<br />
As at 31 December <strong>2010</strong> and 2009, the Company and its subsidiary company have short-term investments<br />
in trading securities as follows:<br />
Consolidated financial statements<br />
<strong>2010</strong> 2009<br />
Common stock No. of shares Cost Fair value No. of shares Cost Fair value<br />
(Shares) (Baht) (Baht) (Shares) (Baht) (Baht)<br />
Siam Sport Syndicate Plc. 27,213,000 85,360,492 85,448,820 11,662,300 25,544,960 39,418,574<br />
Ascon Construction Plc. 5,323,120 34,458,177 13,307,800 4,839,200 33,002,659 19,163,232<br />
Rich Asia Steel Plc. 10,000,000 1,804,815 900,000 10,000,000 1,804,815 800,000<br />
Living Land Capital Plc. 2,010,000 2,434,359 663,300 2,010,000 2,434,359 804,000<br />
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<br />
S.E.C. Auto Sales and Services Plc. 1,000,000 3,145,724 - 1,000,000 3,145,724 -<br />
<strong>Samart</strong> Telcoms Plc. - - - 15,822,800 105,847,898 122,626,700<br />
Salee Industry Plc. - - - 3,000,000 12,222,829 8,880,000<br />
Total 129,730,410 102,137,912 186,530,087 194,527,907<br />
Add (Less): Change in value (27,592,498) 7,997,820<br />
Total short-term investments in<br />
trading securities 102,137,912 194,527,907<br />
Separate financial statements<br />
<strong>2010</strong> 2009<br />
Common stock No. of shares Cost Fair value No. of shares Cost Fair value<br />
(Shares) (Baht) (Baht) (Shares) (Baht) (Baht)<br />
Ascon Construction Plc. 5,323,120 34,458,177 13,307,800 4,839,200 33,002,659 19,163,232<br />
Rich Asia Steel Plc. 10,000,000 1,804,815 900,000 10,000,000 1,804,815 800,000<br />
Living Land Capital Plc. 2,010,000 2,434,359 663,300 2,010,000 2,434,359 804,000<br />
S.E.C. Auto Sales and Services Plc. 1,000,000 3,145,724 - 1,000,000 3,145,724 -<br />
<strong>Samart</strong> Telcoms Plc. - - - 15,822,800 105,847,898 122,626,700<br />
Siam Sport Syndicate Plc. - - - 11,662,300 25,544,960 39,418,574<br />
Warrant No. 3<br />
of Siam Sport Syndicate Plc. - - - 1,667,883 2,526,843 2,835,401<br />
Salee Industry Plc. - - - 3,000,000 12,222,829 8,880,000<br />
Total 41,843,075 14,871,100 186,530,087 194,527,907<br />
Add (Less): Change in value (26,971,975) 7,997,820<br />
Total short-term investments in trading<br />
securities 14,871,100 194,527,907<br />
80<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
Movement of the short-term investments in trading securities account for the year ended 31 December<br />
<strong>2010</strong> are summarised below.<br />
(Unit: Baht)<br />
Consolidated Separate<br />
financial financial<br />
statements statements<br />
Balance as at 1 January <strong>2010</strong> 194,527,907 194,537,907<br />
Purchase during the year 51,144,932 1,451,760<br />
Disposals during the year:<br />
Proceed from sales (173,034,614) (211,228,776)<br />
Less: Gain on disposals 41,426,517 37,468,101<br />
Total (131,608,097) (173,760,675)<br />
Loss on change in value (11,926,830) (7,347,892)<br />
Balance as at 31 December <strong>2010</strong> 102,137,912 14,871,100<br />
Purchase and sales of marketable securities between the Company and <strong>Samart</strong> Multimedia Co., Ltd.<br />
On 1 November <strong>2010</strong>, the Company and <strong>Samart</strong> Multimedia Co., Ltd., a subsidiary company, entered into<br />
purchase and sales agreement of shares in Siam Sport Syndicate Public Co., Ltd. whereby the shares are to be<br />
transferred from the trading account of the Company to the trading account of the subsidiary company on 2<br />
November <strong>2010</strong> using closing price as at 2 November <strong>2010</strong>. The details of the transfer are as follows:<br />
Securities No. of shares Trading price Amount<br />
(Shares) (Baht per share) (Thousand Baht)<br />
Common stock of Siam Sport Syndicate Plc. 11,632,300 3.12 36,293<br />
Warrant No. 3 of Siam Sport Syndicate Plc. 1,667,883 1.14 1,901<br />
38,194<br />
8. Related party transactions<br />
During the years, the Company and its subsidiaries had significant business transactions with related parties,<br />
principally in respect of the purchase and sales of goods, and the provision of services and loans. The pricing policies<br />
for these related party transactions are summarised as follows:<br />
1. Sales prices are determining at market price, if there is unknown market price, sales price will be determined at<br />
cost plus a margin not over 15 percent. However, the pricing policy is subject to change depending on the type<br />
of business and market competition at the time being.<br />
2. Management fees and rental expenses are charged at the amount stated in the agreement.<br />
3. Other service income and expenses are charged at a mutually agreed price.<br />
4. Interest on loans to the subsidiary companies are charged at the following rates:<br />
I-<strong>Mobile</strong> International Co., Ltd.<br />
Interest rate<br />
Minimum Loan Rate (MLR) minus 1 percent per annum, Cost of fund plus<br />
0.25 percent per annum<br />
(2009: Minimum Loan Rate (MLR), Minimum Loan Rate (MLR) minus 0.75<br />
percent per annum to 2 percent per annum and Minimum Loan Rate<br />
(MLR) plus 1 percent per annum)<br />
Interest rate<br />
I-<strong>Mobile</strong> Inter trade Co., Ltd. Minimum Loan Rate (MLR) minus 1 percent per annum and plus 0.50<br />
percent per annum, Cost of fund plus 0.25 percent per annum<br />
(2009: Minimum Loan Rate (MLR), Minimum Loan Rate (MLR) minus 1<br />
percent per annum, Minimum Loan Rate (MLR) plus 0.50 percent per<br />
annum and plus 1 percent per annum and Fixed deposit rate (3 months)<br />
plus 0.25 percent per annum)<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 81
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
<strong>Samart</strong> I-<strong>Mobile</strong> (Hong Kong) Ltd. Cost of fund plus 0.25 percent per annum<br />
(2009: LIBOR (3 months) plus 1.25 percent per annum and 3 percent per<br />
annum and Cost of fund plus 0.25 percent per annum)<br />
5. Interest on loans from subsidiary companies are charged at the following rates:<br />
Interest rate<br />
<strong>Samart</strong> Multimedia Co., Ltd. Minimum Loan Rate (MLR) plus 0.5 percent per annum<br />
Fixed deposit rate (3 months) plus 0.25 percent per annum and cost of<br />
fund plus 0.25 percent per annum<br />
(2009: Minimum Loan Rate (MLR) minus 1 percent per annum,<br />
Minimum Loan Rate (MLR) plus 0.5 percent per annum to 1.25 percent<br />
per annum and Fixed deposit rate (3 months) plus 0.25 percent per<br />
annum)<br />
Interest rate<br />
<strong>Samart</strong> <strong>Mobile</strong> Services Co., Ltd. Minimum Loan Rate (MLR) minus 1 percent per annum,<br />
Fixed deposit rate (3 months) plus 0.25 percent per annum and Cost of<br />
fund plus 0.25 percent per annum<br />
(2009: Minimum Loan Rate (MLR) minus 1 percent per annum,<br />
Minimum Loan Rate (MLR) plus 0.5 percent per annum and 1 percent per<br />
annum, Fixed deposit rate (3 months) plus 0.25 percent per annum and<br />
Cost of fund plus 0.25 percent per annum)<br />
I-<strong>Mobile</strong> Plus Co., Ltd.<br />
Fixed deposit rate (3 months) plus 0.25 percent per annum<br />
(formerly known as çI-<strong>Mobile</strong> Netplus Co., Ltd.é)<br />
6. IT service fees expenses to parent company are charged at the amount stated in the agreement which parent<br />
company sets base on cost plus a margin not over 5 percent.<br />
7. Fixed assets are sold and purchased at their net book value plus a margin, depending on the condition of fixed<br />
assets.<br />
8. Royalty and technical assistance fees are charged at a rate of 0.5 and 0.75 percent of sales and according to the<br />
conditions stipulated in the agreements.<br />
9. Guarantee fee is charged between the parties at a rate of 0.3 percent per annum.<br />
10. Dividend income is recognised when declared and the right to receive the dividends is established.<br />
11. Sale of marketable securities is determining using closing price at share transfer date.<br />
Significant business transactions between the Company and its parent company, subsidiaries and related companies are<br />
summarised below.<br />
(Unit: Million Baht)<br />
Consolidated financial statements Separate financial statements<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Transactions with parent company<br />
IT service fee expense (Note 16) 50 50 36 36<br />
Management fee expense 12 12 12 12<br />
Rental and other expenses 34 35 27 28<br />
Acquisition of fixed assets 2 - 2 -<br />
82<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
(Unit: Million Baht)<br />
Consolidated financial statements Separate financial statements<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Transactions with subsidiary companies<br />
(eliminated from the consolidated financial statements)<br />
Sales of goods - - 217 247<br />
Purchase of goods - - 4,254 3,161<br />
Management fee income - - - 65<br />
Interest income - - 22 31<br />
Interest expenses - - 7 15<br />
Selling support income - - 124 97<br />
Advertising income - - 181 -<br />
Other expenses - - 7 1<br />
Guarantee fee income - - 4 6<br />
Dividend income (Note 14) - - 240 -<br />
Income from sales of marketable securities - - 38 -<br />
Transactions with related companies<br />
Sales of goods 7 12 4 4<br />
Service income 1 2 1 -<br />
Purchase of goods - 4 - -<br />
Purchase of services 46 48 - -<br />
Interest expenses - 1 - -<br />
Acquisition of fixed assets 13 3 13 -<br />
Other income 1 12 - -<br />
Other expenses 24 11 15 6<br />
As at 31 December <strong>2010</strong> and 2009, the balances of the accounts between the Company and those related parties<br />
are as follows:<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Trade accounts receivable - related parties<br />
Parent company<br />
<strong>Samart</strong> Corporation Public Co., Ltd. 144,086 4,100 77,286 3,500<br />
Subsidiary companies<br />
<strong>Samart</strong> I-<strong>Mobile</strong> (Hong Kong) Ltd. - - 32,022,883 29,834,061<br />
Pt. <strong>Samart</strong> I-<strong>Mobile</strong> Indonesia - - 16,325,768 1,150,276<br />
<strong>Samart</strong> I-<strong>Mobile</strong> (Malaysia) Sdn. Bhd. - - 3,229,140 384,952<br />
I-<strong>Mobile</strong> Inter trade Co., Ltd. - - 858,362 259,432<br />
<strong>Samart</strong> <strong>Mobile</strong> Services Co., Ltd. - - 173,329 282,676<br />
<strong>Samart</strong> Multimedia Co., Ltd. - - 27,380 311,540<br />
I-Sport Co., Ltd. - - 11,200 -<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 83
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Related companies<br />
<strong>Samart</strong> Communication Services Co., Ltd. 786,581 534,053 69,245 323,265<br />
<strong>Samart</strong> Comtech Co., Ltd. 680,482 89,061 50,471 17,400<br />
<strong>Samart</strong> Telcoms Public Co., Ltd. 416,473 923,692 171,710 788,010<br />
<strong>Samart</strong> Infonet Co., Ltd. 241,303 77,066 211,105 35,290<br />
Vilailuck Property Co., Ltd. 38,570 19,700 38,570 19,700<br />
One to One Contacts Co., Ltd. 24,113 8,100 17,960 8,100<br />
Posnet Co., Ltd. 23,429 - 2,102 -<br />
Thai Trade Net Co., Ltd. 17,013 - 14,013 -<br />
Vilailuck International Holding Co., Ltd. 11,000 20,920 11,000 20,920<br />
The <strong>Samart</strong> Engineering Co., Ltd. 10,461 110,847 10,461 110,847<br />
Suvarnabhumi Environment Care Co., Ltd. 10,170 - 8,970 -<br />
Thai Smart Bus & Services Co., Ltd. 9,900 - 9,900 -<br />
<strong>Samart</strong> Ed Tech Co., Ltd. 8,370 - 8,370 -<br />
Vision and Security System Co., Ltd. 7,699 - 7,498 -<br />
Vilailuck Development Co., Ltd. 4,280 2,700 4,280 2,700<br />
<strong>Samart</strong> International Co., Ltd. 2,427 - 427 -<br />
Smarterware Co., Ltd. 2,000 10,298 - -<br />
<strong>Samart</strong> Reditech Co., Ltd. 1,359 - 1,359 -<br />
Total trade accounts receivable - related parties 2,439,716 1,800,537 53,362,789 33,552,669<br />
Amounts due from and advance to related parties<br />
Subsidiary companies<br />
<strong>Samart</strong> Multimedia Co., Ltd. - - 286,376,890 310,631,615<br />
<strong>Samart</strong> I-<strong>Mobile</strong> (Hong Kong) Ltd. - - 122,342,227 21,745,184<br />
I-<strong>Mobile</strong> International Co., Ltd. - - 3,331,565 12,983,788<br />
I-<strong>Mobile</strong> Inter trade Co., Ltd. - - 1,755,634 1,639,877<br />
<strong>Samart</strong> <strong>Mobile</strong> Services Co., Ltd. - - 1,094,625 18,866,509<br />
<strong>Samart</strong> I-<strong>Mobile</strong> (Malaysia) Sdn. Bhd. - - 918,430 911,467<br />
Pt. <strong>Samart</strong> I-<strong>Mobile</strong> Indonesia - - - 748,183<br />
<strong>Samart</strong> Interactive Media Co., Ltd. - - - 38,948<br />
Related companies<br />
The <strong>Samart</strong> Engineering Co., Ltd. 5,350,000 5,350,000 5,350,000 5,350,000<br />
<strong>Samart</strong> Infonet Co., Ltd. 8,208 15,540 8,208 15,540<br />
One to One Contacts Co., Ltd. - 461,879 - -<br />
Total amounts due from and advance to related parties 5,358,208 5,827,419 421,177,579 372,931,111<br />
Short-term loans to related parties<br />
Subsidiary companies<br />
I-<strong>Mobile</strong> International Co., Ltd. - - 541,100,000 330,400,000<br />
I-<strong>Mobile</strong> Inter trade Co., Ltd. - - - 307,600,000<br />
<strong>Samart</strong> I-<strong>Mobile</strong> (Hong Kong) Ltd. - - - 43,494,510<br />
Total short-term loans to related parties - - 541,100,000 681,494,510<br />
84<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Trade accounts payable - related parties<br />
Subsidiary companies<br />
<strong>Samart</strong> <strong>Mobile</strong> Services Co., Ltd. - - 562,356,952 255,126,974<br />
<strong>Samart</strong> I-<strong>Mobile</strong> (Hong Kong) Ltd. - - 277,149,802 273,560,099<br />
Pt. <strong>Samart</strong> I-<strong>Mobile</strong> Indonesia - - 25,090,729 12,613,478<br />
Related companies<br />
<strong>Samart</strong> Infonet Co., Ltd. 281,180 334,900 281,180 334,900<br />
Thai Trade Net Co., Ltd. 18,007 18,007 18,007 18,007<br />
One to One Contacts Co., Ltd. - 469,213 - -<br />
Total trade accounts payable - related parties 299,187 822,120 864,896,670 541,653,458<br />
Amounts due to and advance from related parties<br />
Parent company<br />
<strong>Samart</strong> Corporation Public Co., Ltd. 923,705 1,045,299 139,979 171,286<br />
Subsidiary companies<br />
Brain Source Co., Ltd. - - 128,832,545 128,012,563<br />
I-<strong>Mobile</strong> Inter trade Co., Ltd. - - 42,800,000 -<br />
<strong>Samart</strong> Multimedia Co., Ltd. - - 496,944 662,576<br />
<strong>Samart</strong> <strong>Mobile</strong> Services Co., Ltd. - - 32,100 822,349<br />
I-<strong>Mobile</strong> Plus Co., Ltd. (Formerly known as<br />
çI-<strong>Mobile</strong> Netplus Co., Ltd.é) - - 23,129 -<br />
Related companies<br />
Vilailuck International Holding Co.,Ltd. 1,738,257 101,739 833,260 15,412<br />
<strong>Samart</strong> Infonet Co., Ltd. 304,059 263,113 47,045 -<br />
One to One Contacts Co., Ltd. 272,679 3,386,905 259,839 366,329<br />
Best Cellar Co., Ltd. 266,520 - 266,520 -<br />
The <strong>Samart</strong> Engineering Co., Ltd. 2,041 354,179 - 354,179<br />
Total amounts due to and advance from related parties 3,507,261 5,151,235 173,731,361 130,404,694<br />
Short-term loans from related parties<br />
Subsidiary companies<br />
<strong>Samart</strong> Multimedia Co., Ltd. - - 89,650,000 210,000,000<br />
I-<strong>Mobile</strong> Plus Co., Ltd. (Formerly known as<br />
çI-<strong>Mobile</strong> Netplus Co., Ltd.é) - - 17,000,000 -<br />
<strong>Samart</strong> <strong>Mobile</strong> Services Co., Ltd. - - - 220,000,000<br />
Total short-term loans from related parties - - 106,650,000 430,000,000<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 85
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
During <strong>2010</strong>, movements of short-term loans to related parties and short-term loans from related parties were as follows:<br />
(Unit: Baht)<br />
Separate financial statements<br />
During the year<br />
Balance as at<br />
Balance as at<br />
31 December<br />
1 January <strong>2010</strong> Increase Decrease <strong>2010</strong><br />
Short-term loans to related parties<br />
Subsidiary companies<br />
I-<strong>Mobile</strong> International Co., Ltd. 330,400,000 532,700,000 (322,000,000) 541,100,000<br />
I-<strong>Mobile</strong> Inter trade Co., Ltd. 307,600,000 55,000,000 (362,600,000) -<br />
<strong>Samart</strong> I-<strong>Mobile</strong> (Hong Kong) Ltd. 43,494,510 - (43,494,510) -<br />
Total short-term loans to related parties 681,494,510 587,700,000 (728,094,510) 541,100,000<br />
Short-term loans from related parties<br />
Subsidiary companies<br />
<strong>Samart</strong> Multimedia Co., Ltd. 210,000,000 250,000,000 (370,350,000) 89,650,000<br />
I-<strong>Mobile</strong> Plus Co., Ltd. (Formerly known as<br />
çI-<strong>Mobile</strong> Netplus Co., Ltd.é) - 25,000,000 (8,000,000) 17,000,000<br />
<strong>Samart</strong> <strong>Mobile</strong> Services Co., Ltd. 220,000,000 200,000,000 (420,000,000) -<br />
Total short-term loans from related parties 430,000,000 475,000,000 (798,350,000) 106,650,000<br />
Directors and managementûs benefits<br />
In <strong>2010</strong> the Company and its subsidiaries had salaries, bonuses, meeting allowances and gratuities of their<br />
directors and management recognised as expenses totaling Baht 22.3 million (separate financial statements: Baht 21.8<br />
million) (2009: Baht 21.3 million, separate financial statements: Baht 20.8 million).<br />
In addition, during the year 2009 the Company had allocated 27.9 million warrants to its directors without charge.<br />
The details of the warrants were presented in Note 23 to the financial statements.<br />
Guarantee obligations with related parties<br />
The Company has outstanding guarantee obligations with its related parties, as described in Note 34.2.2 to the<br />
financial statements.<br />
9. Trade accounts receivable<br />
The balances of trade accounts receivable as at 31 December <strong>2010</strong> and 2009, aged on the basis of due dates,<br />
are summarised below.<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Age of receivables<br />
Related parties<br />
Not yet due 2,175,596 1,265,467 7,713,322 31,631,064<br />
Past due<br />
Up to 3 months 225,550 510,670 26,115,384 989,387<br />
3 - 6 months - 16,400 2,840,560 20,387<br />
6 - 12 months 30,370 8,000 15,866,368 630,370<br />
Over 12 months 8,200 - 827,155 281,461<br />
Total 2,439,716 1,800,537 53,362,789 33,552,669<br />
86<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Unrelated parties<br />
Not yet due 1,164,463,452 1,877,342,772 1,038,662,693 1,535,850,093<br />
Past due<br />
Up to 3 months 1,003,341,713 825,086,430 844,742,385 579,497,620<br />
3 - 6 months 717,605,178 265,307,603 669,934,433 188,869,884<br />
6 - 12 months 66,302,574 91,334,867 381,827 7,824,647<br />
Over 12 months 33,684,559 38,134,340 19,139,009 16,045,885<br />
Total 2,985,397,476 3,097,206,012 2,572,860,347 2,328,088,129<br />
Less: Allowance for doubtful debts (24,015,497) (19,834,516) (20,764,550) (16,506,668)<br />
Net 2,961,381,979 3,077,371,496 2,552,095,797 2,311,581,461<br />
Trade accounts receivable - net 2,963,821,695 3,079,172,033 2,605,458,586 2,345,134,130<br />
10. Short-term loan to unrelated party<br />
As at 31 December <strong>2010</strong>, I-Sport Co., Ltd., a subsidiary company, had short-term loan of Baht 9 million (2009:<br />
Baht 9 million) to Siam Sport Syndicate Public Co., Ltd. which carries interest at fixed deposit rate (3 months) plus 0.25<br />
percent per annum. This loan is due for repayment at call.<br />
11. Inventories<br />
(Unit: Baht)<br />
Consolidated financial statements<br />
Allowance for diminution<br />
Cost in value of inventories Inventories-net<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Finished goods 815,402,657 561,810,744 (49,476,903) (38,409,482) 765,925,754 523,401,262<br />
Supplies 109,207,809 234,794,804 (2,650,056) (2,047,804) 106,557,753 232,747,000<br />
Goods in transit 1,480,039 21,027,321 - - 1,480,039 21,027,321<br />
Total 926,090,505 817,632,869 (52,126,959) (40,457,286) 873,963,546 777,175,583<br />
(Unit: Baht)<br />
Separate financial statements<br />
Allowance for diminution<br />
Cost in value of inventories Inventories-net<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Finished goods 769,214,695 390,283,262 (46,141,494) (30,077,253) 723,073,201 360,206,009<br />
Supplies 10,000,776 215,889,622 (2,650,056) (2,047,804) 7,350,720 213,841,818<br />
Goods in transit 249,966 16,762,790 - - 249,966 16,762,790<br />
Total 779,465,437 622,935,674 (48,791,550) (32,125,057) 730,673,887 590,810,617<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 87
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
12. Other current assets<br />
Details of other current assets are as follows:<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Advance for purchase of inventories 122,268,254 181,658,173 10,080,119 38,185,996<br />
Accrued service income 66,347,605 90,968,702 - -<br />
Withholding tax deducted at sources (Note 12.1) 60,443,964 141,198,103 18,859,070 66,398,183<br />
Prepaid expenses 47,454,606 26,484,233 14,439,230 15,326,607<br />
Sales promotion receivables 31,326,507 229,310,304 9,969,912 140,372,034<br />
Input tax refundable 22,067,350 115,155,518 2,075,365 2,492,963<br />
Advance for purchase of government bonds 19,895,301 - 19,895,301 -<br />
Other accounts receivable 26,300,802 33,561,051 4,178,785 1,187,660<br />
Others 19,774,511 62,158,107 16,966,865 20,065,954<br />
Less: Allowance in diminution in value of sales<br />
promotion receivables (9,797,170) (5,269,607) (2,186,158) (5,269,607)<br />
Allowance in diminution in value of advance<br />
for purchase of inventories (5,457,710) (4,138,171) (4,549,666) (3,230,127)<br />
Total other current assets 400,624,020 871,086,413 89,728,823 275,529,663<br />
12.1 Withholding tax deducted at sources<br />
The balance of withholding tax deducted at sources as at 31 December <strong>2010</strong> and 2009, aged on years, are<br />
summarised below.<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
Year <strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
2005 244,299 16,109,818 - 6,092,690<br />
2006 - 3,282,532 - -<br />
2007 1,613,230 1,613,230 - -<br />
2008 - 83,062,641 - 51,046,130<br />
2009 17,295,998 37,129,882 9,259,363 9,259,363<br />
<strong>2010</strong> 41,290,437 - 9,599,707 -<br />
Total 60,443,964 141,198,103 18,859,070 66,398,183<br />
The Company and its subsidiaries regard withholding tax deducted at sources as an asset since they have the<br />
right to claim for refund of it. However, the net realisable value of withholding tax depends on the exercise right to claim<br />
it, and the results of any tax audit by the Revenue officials.<br />
During the year <strong>2010</strong>, the Company and its subsidiaries received the refund of the withholding tax of 2005 - 2009<br />
totaling approximately Baht 119 million (separate financial statements: withholding tax of 2005 and 2008 totaling<br />
approximately Baht 57 million). However, the management has used judgement to assess the outcome of the refund<br />
claims and believes that no loss will result. Therefore, no allowance for diminution in value of withholding tax deducted<br />
at sources is recorded as at the balance sheet date.<br />
13. Restricted bank deposits<br />
These represent fixed deposits pledged with the banks to secure credit facilities which obtain from the banks.<br />
88<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
14. Investments in subsidiaries<br />
Details of investments in subsidiaries as presented in separate financial statements are as follows:<br />
(Unit: Baht)<br />
Dividend<br />
Companyûs name Paid-up capital Shareholding percentage Cost received during the year<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Million Baht Million Baht Percent Percent<br />
<strong>Samart</strong> <strong>Mobile</strong> Services<br />
Co., Ltd. 490 490 97.4 97.4 43,916,713 43,916,713 - -<br />
<strong>Samart</strong> Multimedia Co., Ltd. 200 200 100 100 219,524,872 219,524,872 - -<br />
I-<strong>Mobile</strong> International Co., Ltd. 125 125 100 100 124,999,958 124,999,958 - -<br />
Brain Source Co., Ltd. 1 1 100 100 999,300 999,300 239,832,000 -<br />
I-<strong>Mobile</strong> Plus Co., Ltd.<br />
(Formerly known as<br />
çI-<strong>Mobile</strong> Netplus Co., Ltd.é) 27.5 2.5 100 100 27,499,983 2,499,983 - -<br />
Total 416,940,826 391,940,826 239,832,000 -<br />
14.1 Established of new companies<br />
14.1.1 On 9 August 2007, a meeting of Board of Directors of the Company passed a resolution approving the<br />
establishment of new companies in Thailand and overseas in order to provide international call services.<br />
Subsequently, on 2 October 2007, the Company registered the establishment of I-<strong>Mobile</strong> Netplus Co., Ltd.<br />
(currently name is I-<strong>Mobile</strong> Plus Co., Ltd.) with the Ministry of Commerce. The Company holds 100 percent<br />
in this company.<br />
However, the Company is in the process of establishing a new overseas company.<br />
14.1.2 On 13 November 2008, a meeting of the Companyûs Board of Directors passed a resolution authorising<br />
I-<strong>Mobile</strong> International Co., Ltd., a subsidiary company, to establish representative office in India to support<br />
business expansion by providing sales and marketing support and appointing a mobile phone<br />
representative to distribute mobile phones and provide mobile content.<br />
The establishment of this representative office is currently in the process.<br />
14.2 Transfer of 3G mobile phone network services to subsidiary company<br />
On 12 May <strong>2010</strong>, a meeting of the Board of Directors of the Company passed a resolution approving the<br />
transfer of the Companyûs contract to provide 3G mobile phone network under TOT Public Company Limitedûs 3G<br />
mobile phone network services project, named i-mobile 3GX, to I-<strong>Mobile</strong> Plus Co., Ltd. (formerly known as<br />
çI-<strong>Mobile</strong> Netplus Co., Ltd.é), a subsidiary company. The transfer will allow the project to be managed as<br />
a separate business. On 25 August <strong>2010</strong>, a subsidiary company received a license to operate a type one<br />
telecommunication business.<br />
However, <strong>Samart</strong> I-<strong>Mobile</strong> Public Co., Ltd. is in the process of revising the related agreements to be the<br />
name of I-<strong>Mobile</strong> Plus Co., Ltd. (formerly known as çI-<strong>Mobile</strong> Netplus Co., Ltd.é).<br />
14.3 Change of the companyûs name and increase registered share capital<br />
On 3 June <strong>2010</strong>, an extraordinary meeting of the shareholders of I-<strong>Mobile</strong> Netplus Co., Ltd., a subsidiary<br />
company, passed a resolution approving the change its companyûs name from çI-<strong>Mobile</strong> Netplus Co., Ltd.é to<br />
çI-<strong>Mobile</strong> Plus Co., Ltd.é and resolved to increase its registered share capital from Baht 10 million (1 million<br />
ordinary shares of Baht 10 each) to Baht 100 million (10 million ordinary shares of Baht 10 each) by issuing 9<br />
million ordinary shares with a par value of Baht 10 each. The subsidiary company registered the change of its<br />
name and the increase of its share capital with the Ministry of Commerce on 10 June <strong>2010</strong> and has called up 25<br />
percent of the additional share capital.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 89
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Subsequently, on 11 June <strong>2010</strong>, a meeting of the Board of Directors of I-<strong>Mobile</strong> Plus Co., Ltd. (formerly<br />
known as çI-<strong>Mobile</strong> Netplus Co., Ltd.é), a subsidiary company, resolved to call up an additional 25 percent of its<br />
former share capital of Baht 10 million, or Baht 2.5 million.<br />
14.4 Liquidation<br />
On 11 October 2006, an extraordinary meeting of the shareholders of I-<strong>Mobile</strong> (Cambodia) Co., Ltd., a<br />
subsidiary company, passed a resolution to liquidate the company. The process of registering that companyûs<br />
dissolution and its subsequent liquidation are in progress.<br />
15. Property, plant and equipment<br />
(Unit: Baht)<br />
Consolidated financial statements<br />
Network Furniture,<br />
equipment fixture and<br />
and network office Motor Equipment Assets under<br />
Land Building improvement equipment vehicles for rent installation Total<br />
Cost<br />
31 December 2009 - - 525,817,954 734,456,823 71,105,999 22,011,162 4,723,643 1,358,115,581<br />
Additions/Transfer in 78,777 11,433,323 135,592,217 75,739,754 9,234,601 - 201,249,158 433,327,830<br />
Disposals/Transfer out - - (335,000) (45,592,972) (15,648,139) - (63,366,619) (124,942,730)<br />
Translation adjustments - - - (158,044) - - - (158,044)<br />
31 December <strong>2010</strong> 78,777 11,433,323 661,075,171 764,445,561 64,692,461 22,011,162 142,606,182 1,666,342,637<br />
Accumulated depreciation<br />
31 December 2009 - - 297,422,419 496,775,155 45,008,965 17,510,297 - 856,716,836<br />
Depreciation for the year - 432,274 60,555,308 78,000,086 9,701,209 - - 148,688,877<br />
Accumulated depreciation<br />
of assets disposed and<br />
transferred out - - (335,000) (44,158,062) (11,981,081) - - (56,474,143)<br />
Translation adjustments - - - (1,133,599) (719) - - (1,134,318)<br />
31 December <strong>2010</strong> - 432,274 357,642,727 529,483,580 42,728,374 17,510,297 - 947,797,252<br />
Allowance for<br />
impairment loss<br />
31 December 2009 - - 67,640,016 96,418 - 4,500,865 - 72,237,299<br />
31 December <strong>2010</strong> - - 67,640,016 96,418 - 4,500,865 - 72,237,299<br />
Net book value<br />
31 December 2009 - - 160,755,519 237,585,250 26,097,034 - 4,723,643 429,161,446<br />
31 December <strong>2010</strong> 78,777 11,001,049 235,792,428 234,865,563 21,964,087 - 142,606,182 646,308,086<br />
Depreciation for the year<br />
2009 (Baht 49.1 million included in cost of services, and the balance in selling expenses and administrative expenses) 155,597,882<br />
<strong>2010</strong> (Baht 60.8 million included in cost of services, and the balance in selling expenses and administrative expenses) 148,688,877<br />
90<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
(Unit: Baht)<br />
Separate financial statements<br />
Furniture,<br />
fixture and<br />
office Motor Assets under<br />
Land Building equipment vehicles installation Total<br />
Cost<br />
31 December 2009 - - 579,155,851 47,409,561 604,892 627,170,304<br />
Additions/Transfer in 78,777 11,433,323 71,337,661 2,290,000 204,761,328 289,901,089<br />
Disposals/Transfer out - - (1,941,862) (9,626,991) (63,366,618) (74,935,471)<br />
31 December <strong>2010</strong> 78,777 11,433,323 648,551,650 40,072,570 141,999,602 842,135,922<br />
Accumulated depreciation<br />
31 December 2009 - - 387,287,472 29,035,159 - 416,322,631<br />
Depreciation for the year - 432,274 64,607,210 6,138,135 - 71,177,619<br />
Accumulated depreciation of assets disposed<br />
and transferred out - - (1,523,797) (8,204,600) - (9,728,397)<br />
31 December <strong>2010</strong> - 432,274 450,370,885 26,968,694 - 477,771,853<br />
Net book value<br />
31 December 2009 - - 191,868,379 18,374,402 604,892 210,847,673<br />
31 December <strong>2010</strong> 78,777 11,001,049 198,180,765 13,103,876 141,999,602 364,364,069<br />
Depreciation for the year<br />
2009 (All depreciation included in selling expenses and administrative expenses) 79,835,099<br />
<strong>2010</strong> (All depreciation included in selling expenses and administrative expenses) 71,177,619<br />
The Company has pledged assets at net book value approximately Baht 11.0 million (2009: Nil) as collateral<br />
against long-term loan facilities received from commercial bank.<br />
As at 31 December <strong>2010</strong>, certain equipment items of the Company and its subsidiary companies have been fully<br />
depreciated but are still in use. The gross carrying amount before deducting accumulated depreciation and allowance for<br />
impairment loss of those assets amounted to approximately Baht 623 million (2009: Baht 569 million) (separate financial<br />
statements: Baht 291 million, 2009: Baht 268 million).<br />
Assets held under finance lease agreements<br />
In <strong>2010</strong> its subsidiary acquired vehicles under finance lease agreements with an aggregate cost of Baht 0.8 million<br />
(2009: Nil) (separate financial statements: Nil, 2009: Nil).<br />
As at 31 December <strong>2010</strong>, the Company and its subsidiary companies have vehicles acquired under finance leases<br />
agreements, with net book value amounting to approximately Baht 6.81 million (2009: Baht 10.74 million) (separate<br />
financial statements: Baht 5.85 million, 2009: Baht 10.11 million).<br />
16. Prepaid IT service fee to parent company<br />
The Company and <strong>Samart</strong> Multimedia Co., Ltd., a subsidiary company, have entered into a contract with <strong>Samart</strong><br />
Corporation Public Company Limited, the parent company, whereby they receive information technology center system<br />
management services, to concerning management and security in relation to service provision. The contract is for a<br />
period of 52 months, from 1 October 2006 to 31 January 2011.<br />
The payment schedule is as follows:<br />
(Unit: Baht)<br />
Amount per period<br />
Total<br />
Consolidated Separate Consolidated Separate<br />
financial financial financial financial<br />
Installment Condition Payment schedule statements statements statements statements<br />
1 Prepaid IT service fee Within 1 May 2006 41,395,000 30,345,000 41,395,000 30,345,000<br />
2 - 6 Prepaid IT service fee May - September 2006 4,139,500 3,034,500 20,697,500 15,172,500<br />
7 - 58 Monthly service fee October 2006 - January 2011 4,139,500 3,034,500 215,254,000 157,794,000<br />
277,346,500 203,311,500<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 91
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
During the year, the Company and its subsidiary paid a total of Baht 49.7 million (separate financial statements:<br />
Baht 36.4 million) to their parent company in accordance with the agreement.<br />
The outstanding balances of prepaid IT service fee to parent company as at 31 December <strong>2010</strong> and 2009 are as<br />
follows:<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Prepaid IT service fee 62,092,500 62,092,500 45,517,500 45,517,500<br />
Less: Accumulated amortisation (60,898,415) (46,569,376) (44,642,165) (34,138,126)<br />
Net 1,194,085 15,523,124 875,335 11,379,374<br />
Amortisation expenses included in the income<br />
statements for the year 14,329,039 14,329,039 10,504,039 10,504,039<br />
As at 31 December <strong>2010</strong>, the Company and subsidiary company have commitments under the agreement<br />
amounting to Baht 4.1 million (separate financial statements: Baht 3.0 million).<br />
17. Intangible assets<br />
(Unit: Baht)<br />
Consolidated financial statement<br />
Right under the<br />
Right under the<br />
advertising<br />
agreement<br />
Computer<br />
software<br />
distribution<br />
agreement Total<br />
Cost<br />
31 December 2009 27,500,000 - - 27,500,000<br />
Additions - 15,593,583 4,530,775 20,124,358<br />
Translation adjustments - (241,754) - (241,754)<br />
31 December <strong>2010</strong> 27,500,000 15,351,829 4,530,775 47,382,604<br />
Accumulated amortisation<br />
31 December 2009 - - - -<br />
Amortisation 11,650,000 1,966,945 229,642 13,846,587<br />
Translation adjustments - (217,326) - (217,326)<br />
31 December <strong>2010</strong> 11,650,000 1,749,619 229,642 13,629,261<br />
Net book value<br />
31 December 2009 27,500,000 - - 27,500,000<br />
31 December <strong>2010</strong> 15,850,000 13,602,210 4,301,133 33,753,343<br />
Rights under the advertising agreement<br />
During the year 2009, Take A Look Co., Ltd., a subsidiary company, entered into an agreement with a company to<br />
sell LED Screen. The installation and transfer had already been completed and such company had to make cash payment<br />
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<br />
total sales value of the equipment was Baht 47 million. In addition, the subsidiary company was obliged to comply with<br />
the conditions in the agreement, such as provision of equipment repair and maintenance, for a period of three years.<br />
Subsequently, on 28 December 2009, the subsidiary company entered into a memorandum with <strong>Samart</strong><br />
Multimedia Co., Ltd., another subsidiary company, to transfer the rights and obligations under the LED Screen sales and<br />
advertising agreements. Therefore, all rights and obligations under such agreements had fallen upon <strong>Samart</strong> Multimedia<br />
Co., Ltd. since the date of entry into the memorandum of agreement which were consist of:<br />
1) <strong>Samart</strong> Multimedia Co., Ltd. received the airing right to promote and advertise products and services for the<br />
Company and other two unrelated companies.<br />
2) <strong>Samart</strong> Multimedia Co., Ltd. was obliged to comply with the conditions in the agreements, such as provision of<br />
equipment repair and maintenance, for a period of three years with the value of Baht 27.5 million.<br />
92<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
As a result, <strong>Samart</strong> Multimedia Co., Ltd. was required to make a payment of Baht 25.3 million to Take A<br />
Look Co., Ltd. so <strong>Samart</strong> Multimedia Co., Ltd. recorded the Right under the advertising agreement in the<br />
consolidated financial statements under the capital of intangible asset with the value of Baht 27.5 million.<br />
Moreover, Take A Look Co., Ltd. and <strong>Samart</strong> Multimedia Co., Ltd. entered into a memorandum of<br />
agreement with other shareholder of Take A Look Co., Ltd. to jointly assume responsibility for the rights, duties,<br />
and obligations arising from Take A Look Co., Ltd. entering into the screen sales agreement. If any claim is made<br />
or any action taken that causes Take A Look Co., Ltd. or <strong>Samart</strong> Multimedia Co., Ltd. to pay compensation or be<br />
held responsible, the other shareholding company of Take A Look Co., Ltd. shall be jointly responsible for the<br />
damages in proportion to its shareholding. Such contractual liability will cease on 31 December 2012.<br />
Right under distribution agreement<br />
During the year <strong>2010</strong>, I-<strong>Mobile</strong> Plus Co., Ltd. (formerly known as çI-<strong>Mobile</strong> Netplus Co., Ltd.é), a subsidiary<br />
company, entered into a distributor agreement with a company. Under the conditions of the agreement, the<br />
subsidiary company is to pay a fee and comply with conditions stipulated in the agreement. The Company has<br />
guaranteed the subsidiary companyûs compliance with the agreement.<br />
18. Bank overdrafts, short-term loans from banks and trust receipts<br />
Bank overdrafts, short-term loans from banks and trust receipts as at 31 December <strong>2010</strong> and 2009 consist of:<br />
(Unit: Baht)<br />
Interest rate Consolidated Separate<br />
(percent per annum) financial statements financial statements<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Bank overdrafts 6.375 6.13 - 6.15 1,693,427 25,824,959 1,603,576 96,250<br />
Short-term loans from banks 2.83 - 5.75 2.4 - 5.5 1,198,618,117 1,200,973,069 1,086,215,691 995,445,975<br />
Trust receipts<br />
Baht 2.70 - 4.25 3.25 - 5.25 483,514,151 1,499,107,460 483,514,151 1,463,661,142<br />
US dollars 1.54 - 2.90 1.84 - 3.25 650,723,255 93,912,951 561,874,611 -<br />
Total 2,334,548,950 2,819,818,439 2,133,208,029 2,459,203,367<br />
Bank overdrafts of the Company are secured by the pledge of some bank deposits. Bank overdrafts of subsidiary<br />
companies are secured by the Company.<br />
Some short-term loans from banks and trust receipts of the Company are secured by the pledge of some bank<br />
deposits and cross-guaranteed by the Company and subsidiary companies.<br />
Short-term loans from banks and trust receipts of the subsidiary companies are secured by the Company, the<br />
pledge of some bank deposits of the Company and cross-guaranteed by the Company and subsidiary companies.<br />
19. Short-term loan from unrelated party<br />
As at 31 December <strong>2010</strong>, Take A Look Co., Ltd., a subsidiary company, had obtained short-term loan of Baht 0.5<br />
million (2009: Baht 12.6 million) from Master Ad Public Co., Ltd. which carries interest at Minimum Loan Rate (MLR) plus<br />
1 percent per annum. This loan is due at call.<br />
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<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
20. Long-term loans from bank<br />
As at 31 December <strong>2010</strong> and 2009 the outstanding balance of long-term loans from banks consisted of:<br />
(Unit: Baht)<br />
Consolidated financial statements/<br />
Separate financial statements<br />
<strong>2010</strong> 2009<br />
In March <strong>2010</strong>, the Company entered into an agreement with a local commercial<br />
bank granting a new loan amounting to Baht 12.42 million, on which interest is<br />
charged at the Minimum Loan Rate (MLR) minus 1.25 percent per annum. The loan<br />
is repayable in 120 monthly installments, with the first of these due in April <strong>2010</strong> and<br />
is to be repaid in full within March 2020. 10,751,396 -<br />
Total 10,751,396 -<br />
Less: Current portion (1,066,973) -<br />
Long-term loans from bank - net 9,684,423 -<br />
This loan is secured by mortgage of an apartment unit and the transfer of the beneficiary rights under insurance<br />
policy for an apartment unit to the bank.<br />
Movements in the long-term loan account during the year ended 31 December <strong>2010</strong> are summarised below.<br />
(Unit: Baht)<br />
Consolidated financial statements/<br />
Separate financial statements<br />
Balance as at 1 January <strong>2010</strong> -<br />
Add: Additional borrowings 11,510,000<br />
Less: Repayment (758,604)<br />
Balance as at 31 December <strong>2010</strong> 10,751,396<br />
21. Liabilities under finance lease agreements<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Liabilities under finance lease agreements 6,238,114 7,747,846 5,530,688 7,699,108<br />
Less: Deferred interest expense (150,798) (459,627) (118,333) (459,437)<br />
Total 6,087,316 7,288,219 5,412,355 7,239,671<br />
Less: Portion due within one year (5,684,037) (1,875,864) (5,412,355) (1,827,316)<br />
Liabilities under finance lease agreements - net 403,279 5,412,355 - 5,412,355<br />
The Company and its subsidiaries entered into the finance lease agreements with leasing companies for rental of<br />
the motor vehicles for use in their operation, whereby they are committed to pay rental on monthly basis. The terms of<br />
the agreements are generally between 1 and 3 years.<br />
As at 31 December <strong>2010</strong>, Future minimum lease payments required under the finance lease agreements were as<br />
follows:<br />
(Unit: Baht)<br />
Consolidated financial statements<br />
Less than 1 year 1-3 years Total<br />
Future minimum lease payments 5,823,416 414,698 6,238,114<br />
Deferred interest expenses (139,379) (11,419) (150,798)<br />
Present value of future minimum lease payments 5,684,037 403,279 6,087,316<br />
94<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
(Unit: Baht)<br />
Separate financial statements<br />
Less than 1 year<br />
Future minimum lease payments 5,530,688<br />
Deferred interest expenses (118,333)<br />
Present value of future minimum lease payments 5,412,355<br />
22. Other current liabilities<br />
Details of other current liabilities are as follows:<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Accrued expenses 148,394,050 104,277,342 99,854,455 38,477,336<br />
Other payables 97,652,527 87,783,829 66,139,482 66,816,880<br />
Unearned revenue from telephone service 9,870,119 1,350,747 9,870,119 1,350,747<br />
Corporate income tax payable 1,890,383 217,665 - -<br />
Advance received from customers 244,981 257,555 - -<br />
Others 31,416,718 54,479,352 29,173,211 35,428,128<br />
Total other current liabilities 289,468,778 248,366,490 205,037,267 142,073,091<br />
23. Warrants<br />
On 24 April 2008, the <strong>Annual</strong> General Meeting of the Companyûs shareholders passed a resolution to issue 140<br />
million warrants, the offering price per unit is Baht 0, to the Companyûs directors and the employees of the Company and<br />
its subsidiaries. The exercise ratio is 1:1 and the exercise price is Baht 2 per 1 ordinary share. Warrants to be allocated<br />
to the Companyûs directors and the employee of the Company and its subsidiaries will be divided into 5 certificates with<br />
5 years maturity from the issuance date. Each certificate will have the same date of issuance, offering and expiration with<br />
different exercise period as shown in the following detail. Each warrant holders can split exercise or fully exercise their<br />
right of the amount allocated for each certificate.<br />
Certificate No. 1 will represent 10% of total number of allocated warrants which is entitled to exercise since the first day<br />
of the exercise period until the expired date of warrants.<br />
Certificate No. 2 will represent 15% of total number of warrants allocated which is entitled to exercise after the end of<br />
the first year that the warrants are issued until the expired date of warrants.<br />
Certificate No. 3 will represent 20% of total number of warrants allocated which is entitled to exercise after the end of<br />
the second year that the warrants are issued until the expired date of warrants.<br />
Certificate No. 4 will represent 25% of total number of warrants allocated which is entitled to exercise after the end of<br />
the third year that the warrants are issued until the expired date of warrants.<br />
Certificate No. 5 will represent 30% of total number of warrants allocated which is entitled to exercise after the end of<br />
the fourth year that the warrants are issued until the expired date of warrants.<br />
On 27 April 2009, the <strong>Annual</strong> General Meeting of the Companyûs shareholders passed a resolution to approve the<br />
revision of the exercise price of the warrants offering to the Companyûs directors and the employees of the Company and<br />
its subsidiaries from Baht 2 per share to be Baht 1.7 per share.<br />
On 29 May 2009, the Company issued 100,250,000 warrants to the Companyûs directors and employees of the<br />
Company and its subsidiaries at Baht 0 per unit, with 39,750,000 warrants being cancelled as a condition of the warrant<br />
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<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 95
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
period of five years period from the issue date, expiring on 28 May 2014. The warrants are exercisable on the 15th of the<br />
last month of each quarter throughout their terms, from 15 June 2009 to 28 May 2014.<br />
Movement of warrants for the year ended 31 December <strong>2010</strong> are summarised below.<br />
(Number of unit: units)<br />
Balance as at Exercised during Balance as at<br />
Warrants issuance to 1 January <strong>2010</strong> the year 31 December <strong>2010</strong><br />
Directors 48,800,000 (750,000) 48,050,000<br />
Employees 51,450,000 (55,000) 50,900,000<br />
Total 100,250,000 (1,300,000) 98,950,000<br />
24. Statutory reserve<br />
Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside a<br />
statutory reserve at least 5 percent of its net income after deducting accumulated deficit brought forward (if any), until the<br />
reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividend distribution.<br />
25. Other income<br />
Details of other income are as follows:<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Selling support income 67,416,122 81,497,270 20,136,450 94,215,528<br />
Interest income 4,684,821 7,425,475 25,517,072 36,470,599<br />
Dividend income from subsidiaries (Note 14) - - 239,832,000 -<br />
Gain on exchange 884,138 10,207,850 23,643,497 8,233,644<br />
Gain on disposal of short-term investments in<br />
trading securities (Note 7.1) 41,426,517 - 37,468,101 -<br />
Gain on change in value of short-term investments<br />
in trading securities - 54,126,087 - 54,126,087<br />
Gain on disposal of investment in subsidiary company - 45,511,537 - -<br />
Gain on sales of equipment 828,077 - 1,276,589 -<br />
Reversal of allowance for diminution in value of inventories - - - 2,945,943<br />
Others 23,112,201 71,442,352 132,388,835 108,842,148<br />
Total other income 138,351,876 270,210,571 480,262,544 304,833,949<br />
96<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
26. Other expenses<br />
Details of other expenses are as follows:<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Loss on change in value of short-term investments in<br />
trading securities (Note 7.1) 11,926,830 - 7,347,892 -<br />
Loss on disposal of short-term investments in<br />
trading securities - 1,852,822 - 1,852,822<br />
Provision for diminution in value of inventories 16,822,073 2,671,542 16,666,494 -<br />
Reserve for doubtful accounts 10,168,232 73,001 2,493,973 297,769<br />
Others 2,796,691 8,066,825 - -<br />
Total other expenses 41,713,826 12,664,190 26,508,359 2,150,591<br />
27. Expenses by nature<br />
Significant expenses by nature are as follow:<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Marketing expenses 785,478,380 823,048,877 322,057,955 174,832,709<br />
Salaries and wages and other employee benefits 337,572,556 325,531,131 224,225,287 209,085,588<br />
Depreciation and amortisation 186,308,804 155,597,882 71,177,619 79,835,099<br />
Rental expenses from operating lease agreements 112,050,470 106,937,502 91,779,658 93,257,344<br />
Loss on change in value of short-term investments<br />
in trading securities 11,926,830 - 7,347,892 -<br />
Loss on disposal of short-term investments in<br />
trading securities - 1,852,822 - 1,852,822<br />
Changes in inventories of finishes goods (108,457,636) 876,455,679 (156,529,763) 704,133,304<br />
28. Finance cost<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Interest expense on:<br />
Bank loans, overdrafts and trust receipts 43,093,376 126,275,794 73,924,528 105,237,120<br />
Loans from related parties 45,479,974 826,148 6,767,839 15,384,620<br />
Liabilities under finance leases and others 478,678 650,052 461,248 629,853<br />
Total interest expenses 89,052,028 127,751,994 81,153,615 121,251,593<br />
Bank charges 17,347,200 14,128,186 11,444,149 8,668,903<br />
Total finance cost 106,399,228 141,880,180 92,597,764 129,920,496<br />
29. Earnings per share<br />
Basic earnings per share are calculated by dividing the net income for the year by the weighted average number<br />
of ordinary shares in issue during the year.<br />
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<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Diluted earnings per share is calculated by dividing net income for the year by the total sum of the weighted average<br />
number of ordinary shares in issue during the year plus the weighted average number of ordinary shares which would need<br />
to be issued to convert all dilutive potential ordinary shares into ordinary shares. The calculation assumes that the<br />
conversion took place either at the beginning of the year or on the date the potential ordinary shares were issued.<br />
29.1 Weighted average number of ordinary shares<br />
As at 31 December <strong>2010</strong> and 2009, the weighted average number of ordinary shares in the consolidated<br />
and separate financial statements are calculated as follow:<br />
(Unit: Thousand shares)<br />
Consolidated /<br />
Separate financial statements<br />
<strong>2010</strong> 2009<br />
Balance brought forward 4,300,000 4,300,000<br />
Add: The weighted average number of ordinary shares in issue during the year 360 -<br />
Weighted average number of ordinary shares 4,300,360 4,300,000<br />
29.2 Reconciliation of diluted earnings per share<br />
Consolidated financial statements<br />
Weighted average number Earnings<br />
Net income of ordinary shares per share<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Thousand Thousand Thousand Thousand Baht Baht<br />
Baht Baht Shares Shares<br />
Basic earnings per share<br />
Net income attributable equity holders of the parent 134,784 115,554 4,300,360 4,300,000 0.031 0.027<br />
Effect of dilutive potential ordinary shares<br />
Warrants issuance 98,950,000 warrants<br />
(2009: 100,250,000 warrants) - - 15,824 - - -<br />
Diluted earnings per share<br />
Net income of ordinary shareholders assuming the<br />
conversion of warrants to ordinary shares 134,784 115,554 4,316,184 4,300,000 0.031 0.027<br />
Separate financial statements<br />
Weighted average number Earnings<br />
Net income of ordinary shares per share<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Thousand Thousand Thousand Thousand Baht Baht<br />
Baht Baht Shares Shares<br />
Basic earnings per share<br />
Net income attributable equity holders of the parent 160,653 21,331 4,300,360 4,300,000 0.037 0.005<br />
Effect of dilutive potential ordinary shares<br />
Warrants issuance 98,950,000 warrants<br />
(2009: 100,250,000 warrants) - - 15,824 - - -<br />
Diluted earnings per share<br />
Net income of ordinary shareholders assuming the<br />
conversion of dilutive potential ordinary shares 160,653 21,331 4,316,184 4,300,000 0.037 0.005<br />
98<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
30. Dividends<br />
2009<br />
Final dividend from 2008 income<br />
Dividend<br />
Approved by Total dividends per share Paid on<br />
<strong>Annual</strong> General Meeting of the<br />
shareholders on 27 April 2009 193,500,000 0.05<br />
(Unit: Baht)<br />
Less: Interim dividend paid in 2008 (150,500,000) (0.04) 26 November 2008<br />
Total for 2009 43,000,000 0.01 20 May 2009<br />
<strong>2010</strong><br />
Final dividend from 2009 income<br />
<strong>Annual</strong> General Meeting of the<br />
shareholders on 27 April <strong>2010</strong> 86,000,000 0.02 13 May <strong>2010</strong><br />
Total for <strong>2010</strong> 86,000,000 0.02<br />
31. Promotional privileges<br />
Brain Source Co., Ltd., a subsidiary company, has been granted promotional privileges approved by the Board of<br />
Investment under the Thai Investment Promotion Act B.E. 2520, for research and development of software, under<br />
certificate No. 1690(7)/2550 dated 20 July 2007. Subject to certain imposed conditions, the main privileges include the<br />
following:<br />
a) Exemption from corporate income tax on net income from promoted operations for a period of 8 years<br />
commencing as from the date of first earning operating income (commencing from 1 August 2007 until 31 July<br />
2015). Furthermore, accumulated losses incurred during the corporate income tax exemption period, the<br />
subsidiary is allowed to utilise the losses as a deduction against net income for a period of 5 years after the expiry<br />
of the tax exemption period, whether from any one year or from several years.<br />
b) Exemption from income tax on dividends paid from the income of the promoted operations for which corporate<br />
income tax is exempted, throughout the corporate income tax exemption.<br />
c) Exemption from import duty on imported machinery for use in production as approved by the Board until 20<br />
January <strong>2010</strong>.<br />
The subsidiary has to comply with certain conditions and restrictions specified under the promotion certificate.<br />
Service income of the subsidiary amounting to approximately Baht 248 million for the year ended 31 December<br />
<strong>2010</strong> (2009: Baht 119 million) was revenues from BOI promoted activities.<br />
32. Segment information<br />
The Company and its subsidiariesû business operations involve two principal segments: <strong>Mobile</strong> Business and<br />
Infotainment and Multimedia. These operations are carried on two geographical segments: Domestic and Foreign. Below<br />
is the consolidated financial information of the Company and its subsidiaries for the years ended 31 December <strong>2010</strong> and<br />
2009 by segment.<br />
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<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
32.1 The results of operations separated by type of business<br />
(Unit: Million Baht)<br />
Foreign<br />
Domestic<br />
Infotainment Elimination of inter-<br />
<strong>Mobile</strong> Business <strong>Mobile</strong> Business and Multimedia segment revenues Consolidated<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Sales and service income<br />
Sales and service income from third parties<br />
- Local sales and service income - - 5,816 6,293 899 800 - - 6,715 7,093<br />
- Overseas sales and service income 1,123 1,138 140 523 - - - - 1,263 1,661<br />
Sales and service income from related parties 3,706 2,884 924 965 9 1 (4,631) (3,835) 8 15<br />
Total sales and service income 4,829 4,022 6,880 7,781 908 801 (4,631) (3,835) 7,986 8,769<br />
Cost of sales and service 4,623 3,871 5,795 6,915 757 689 (4,827) (4,055) 6,348 7,420<br />
Gross profit 206 151 1,085 866 151 112 196 220 1,638 1,349<br />
Unallocated income (expense):<br />
Other income 138 270<br />
Selling expenses (1,147) (982)<br />
Administrative expenses (317) (353)<br />
Management expenses (22) (21)<br />
Other expenses (42) (13)<br />
Financial expenses (106) (142)<br />
Corporate income tax (7) (3)<br />
Minority interest in net loss of subsidiaries - 11<br />
Net income 135 116<br />
32.2 Assets and liabilities separated by business segment are as follows:<br />
Foreign<br />
Domestic<br />
Infotainment<br />
(Unit: Million Baht)<br />
<strong>Mobile</strong> Business <strong>Mobile</strong> Business and Multimedia Eliminiated Consolidated<br />
<strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009<br />
Assets<br />
Trade accounts receivable - net 633 671 3,374 3,189 84 82 (1,127) (863) 2,964 3,079<br />
Inventories - net 160 175 734 606 - - (21) (3) 873 778<br />
Equipment - net 7 12 385 237 255 182 - (2) 647 429<br />
Others 205 226 3,083 3,936 413 482 (2,751) (2,792) 950 1,852<br />
Total assets 1,005 1,084 7,576 7,968 752 746 (3,899) (3,660) 5,434 6,138<br />
Liabilities<br />
Current liabilities 1,062 1,104 4,425 4,920 426 426 (2,909) (2,683) 3,004 3,767<br />
Non-current liabilities - - 11 10 - - - (2) 11 8<br />
Total liabilities 1,062 1,104 4,436 4,930 426 426 (2,909) (2,685) 3,015 3,775<br />
Transfer prices between business segments are set out in Note 8 to the financial statements.<br />
100<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
33. Provident fund<br />
The Company, subsidiary companies and their employees have jointly established a provident fund in accordance<br />
with the Provident Fund Act B.E. 2530. The Company, subsidiary companies and their employees contributed to the fund<br />
monthly at the rate of 3 - 10 percent of basic salary. The fund, which is managed by Bangkok Bank Public Company<br />
Limited, will be paid to employees upon termination in accordance with the fund rules. During the year <strong>2010</strong>, the<br />
Company and its subsidiary companies contributed Baht 8.7 million (separate financial statements: Baht 6.4 million)<br />
(2009: Baht 6.5 million, separate financial statements: Baht 5.5 million) to the fund.<br />
34. Commitments and contingent liabilities<br />
As at 31 December <strong>2010</strong>, the Company and its subsidiaries have commitments and contingent liabilities other<br />
than those disclosed in other notes as follows:<br />
34.1 Operating lease commitments<br />
The Company and its subsidiaries have entered into several lease agreements in respect of the lease of<br />
office building space and motor vehicles. The terms of the agreements are generally between 1 and 5 years.<br />
As at 31 December <strong>2010</strong>, future minimum lease payments required under these non-cancellable operating<br />
leases contracts were as follows:<br />
(Unit: Million)<br />
Currency Consolidated<br />
financial statements<br />
Separate<br />
financial statements<br />
Baht<br />
Payable within:<br />
Less than 1 year 92.36 60.97<br />
1 to 5 years 34.66 24.89<br />
Malaysian Ringgit<br />
Payable within:<br />
Less than 1 year 0.21 -<br />
US Dollars<br />
Payable within:<br />
Less than 1 year 0.11 -<br />
Hong Kong Dollars<br />
Payable within:<br />
Less than 1 year 0.06 -<br />
1 to 3 years 0.09 -<br />
34.2 Guarantees<br />
34.2.1 Bank guarantees<br />
As at 31 December <strong>2010</strong>, there were outstanding bank guarantees issued by banks on behalf of the<br />
Company and its subsidiaries of approximately Baht 24.67 million (separate financial statements: Baht<br />
13.09 million), in respect of the normal course of certain performance bonds as required in their business.<br />
The details of bank guarantees are as follows:<br />
(Unit: Million Baht)<br />
Consolidated<br />
Separate<br />
financial statements financial statements<br />
Performance guarantees 24.21 12.93<br />
Guarantee electricity use, among others 0.46 0.16<br />
24.67 13.09<br />
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<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
34.2.2 Guarantees to related parties<br />
1. As at 31 December <strong>2010</strong>, the Company has contingent liabilities in respect of the guarantees of<br />
subsidiariesû credit facilities provided to banks as follows:<br />
(Unit: Million Baht)<br />
Guaranteed<br />
facilities<br />
<strong>Samart</strong> I-<strong>Mobile</strong> (Malaysia) Sdn. Bhd. 148.30<br />
<strong>Samart</strong> <strong>Mobile</strong> Services Co., Ltd. 45.00<br />
<strong>Samart</strong> Multimedia Co., Ltd. 114.39<br />
I-<strong>Mobile</strong> Inter trade Co., Ltd. 20.00<br />
Pt. <strong>Samart</strong> I-<strong>Mobile</strong> Indonesia 151.50<br />
<strong>Samart</strong> Multimedia Co., Ltd. and<br />
<strong>Samart</strong> Interactive Media Co., Ltd.<br />
(joint use the same facilities with the Company) 10.00<br />
<strong>Samart</strong> <strong>Mobile</strong> Services Co., Ltd.,<br />
I-<strong>Mobile</strong> International Co., Ltd.,<br />
I-<strong>Mobile</strong> Inter trade Co., Ltd. and<br />
<strong>Samart</strong> I-<strong>Mobile</strong> (Hong Kong) Ltd.<br />
(joint use the same facilities with the Company) 1,727.40<br />
<strong>Samart</strong> I-<strong>Mobile</strong> (Hong Kong) Ltd.<br />
(joint use the same facilities with the Company) 2,985.00<br />
<strong>Samart</strong> I-<strong>Mobile</strong> (Hong Kong) Ltd.,<br />
<strong>Samart</strong> <strong>Mobile</strong> Services Co., Ltd. and<br />
I-<strong>Mobile</strong> International Co., Ltd.<br />
(joint use the same facilities with the Company) 495.00<br />
Brain Source Co., Ltd.<br />
(joint use the same facilities with the Company) 150.00<br />
<strong>Samart</strong> Multimedia Co., Ltd.<br />
(joint use the same facilities with the Company) 140.00<br />
These guarantees are effective for as long as the underlying obligations have not been discharged by<br />
those subsidiaries.<br />
2. As at 31 December <strong>2010</strong>, the Company and its subsidiaries have cross-guaranteed credit facilities<br />
granted by the commercial banks to the Company and its subsidiaries as follows:<br />
(Unit: Million Baht)<br />
Cross -<br />
guaranteed<br />
Cross - guaranteed by credit facilities Facilities used<br />
The Company, I-<strong>Mobile</strong> International Co., Ltd. and<br />
<strong>Samart</strong> <strong>Mobile</strong> Services Co., Ltd. 2,985 1,155.98<br />
The Company and I-<strong>Mobile</strong> Inter trade Co., Ltd.<br />
(This is part of the credit facilities of Baht 2,985 million) 2,000 61.40<br />
The Company, I-<strong>Mobile</strong> International Co., Ltd.,<br />
<strong>Samart</strong> <strong>Mobile</strong> Services Co., Ltd. and <strong>Samart</strong> I-<strong>Mobile</strong><br />
(Hong Kong) Ltd. 1,000 387.18<br />
The credit facility of Baht 2,985 million mentioned above in 1, which the Company has guaranteed<br />
for its subsidiaries, is part of the credit facilities of Baht 2,985 million, jointly used by the Company and<br />
subsidiaries.<br />
102<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
34.3 Commitments in uncalled portions of investments<br />
As at 31 December <strong>2010</strong>, the Company and its subsidiary have outstanding commitment totaling in<br />
respect of uncalled portions of investments in their subsidiaries as follows:<br />
Amount<br />
The local subsidiary companies Baht 169 million<br />
The overseas subsidiary company Malaysian ringgit 3 million<br />
34.4 Other commitments<br />
34.4.1 <strong>Samart</strong> <strong>Mobile</strong> Services Co., Ltd., a subsidiary company, has been granted approval by The Posts<br />
and Telegraph Department which is currently transformed to be The National Broadcasting and<br />
Telecommunications Commission (NBTC) to operate and provide paging services to government units<br />
and state enterprises for a period of 20 years as from 21 February 1995. The subsidiary company has<br />
to pay annual fees at a rate specified in the agreement, or totaling Baht 70 million. In addition, the<br />
ownership of the pagers, paging control terminals, and transmitters have to be transferred to The<br />
Posts and Telegraph Department as soon as their installation is completed. On 6 September 1996, the<br />
subsidiary company received approval to provide its paging services to the public.<br />
On 16 July 2003, the subsidiary company notified The Posts and Telegraph Department of their wish to<br />
terminate the agreement to provide paging services to government units and state enterprises.<br />
On 1 October 2003, The Posts and Telegraph Department granted approval the termination of such<br />
agreement. For the annual fee payable since 2000 until the termination date of the agreement is in the<br />
process of consideration by the Cabinet. In addition, the subsidiary company must comply with the terms<br />
and conditions stated in the agreement.<br />
On 4 March <strong>2010</strong>, the subsidiary company returned the remaining building to the Post and<br />
Telegraph Department, which has changed its name to The National Broadcasting Telecommunication<br />
Commission (NBTC). Subsequently, on 30 August <strong>2010</strong>, the subsidiary company was informed that it<br />
had complied with the terms and conditions stated in the agreement and had no further obligations, In<br />
addition, the collateral was returned to the subsidiary.<br />
34.4.2 <strong>Samart</strong> Multimedia Co., Ltd., a subsidiary company, entered into an agreement with the TOT Public<br />
Company Limited to provide an Audiotext System for a period of 15 years, commencing 29 September<br />
1999. The subsidiary company is obliged to comply with certain conditions as stated in the agreement and<br />
has to pay a network connection fee of Baht 1 million per annum.<br />
34.4.3 On 27 November 2009, the Company entered into a memorandum of understanding relating to the project<br />
for 3G mobile phone network services testing with TOT Public Company Limited in support of the<br />
objective of providing wholesale and retail 3G mobile phone network services through the Wideband<br />
Code-Division Multiple Access (WCDMA) system. The memorandum of understanding expires on 30<br />
November <strong>2010</strong> and in the process of approval for an extension until 31 August 2011. Under the<br />
memorandum of understanding, the Company is obliged to comply with certain conditions and pay fees<br />
for the testing project as stated in the memorandum of understanding.<br />
34.5 Contingent liabilities<br />
In August 2008, <strong>Samart</strong> I-<strong>Mobile</strong> (Hong Kong) Limited, a subsidiary company, received a letter from the<br />
Inland Revenue Department of Hong Kong (çIRDé) questioning the deductibility of consultancy fees and<br />
management fees totaling USD 6.1 million and USD 1.5 million respectively, paid to I-<strong>Mobile</strong> International Co., Ltd.,<br />
another subsidiary company, in relation to the 2007 income tax return. Management of the subsidiary had<br />
submitted a reply letter to IRD in June 2009 to provide information in relation to the deductibility of consultancy<br />
fees and management fess in income tax return. In addition, the IRD issued another letter in December 2009 to<br />
request further information regarding the consultancy fees and management fees for the year 2006, 2007 and<br />
2008. Response from IRD has not yet been received. However, the management are of the opinion that as<br />
the consultancy fee and management fee are related to the business activities and, therefore, should be fully<br />
deductible for income tax purposes, no additional income tax provision or related expenses is required for the<br />
year 2006, 2007 and 2008.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 103
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
During the year 2006, 2007 and 2008, <strong>Samart</strong> I-<strong>Mobile</strong> (Hong Kong) Limited paid consultancy fees and<br />
management fees to I-<strong>Mobile</strong> International Co., Ltd. totally USD 15.75 million.<br />
The maximum tax exposure would be 17.5% on the amount of consultancy fees and management fees.<br />
However, as at 31 December <strong>2010</strong>, the examination has not yet finalised and the management of subsidiary<br />
believe that there is no significant losses will be incurred as a result of the above matter. Therefore no provision<br />
has been made against the contingent liabilities in the account.<br />
35. Financial instruments<br />
35.1 Financial risk management<br />
The Company and its subsidiariesû financial instruments, as defined under Thai Accounting Standard No.<br />
107 çFinancial Instruments: Disclosure and Presentationsé, principally comprise cash and cash equivalents, trade<br />
accounts receivable, loans, investments, and short-term loans. The financial risks associated with these financial<br />
instruments and how they are managed are described below.<br />
Credit risk<br />
The Company and its subsidiaries are exposed to credit risk primarily with respect to trade accounts<br />
receivable, loans and other receivable. The Company and its subsidiaries manage the risk by adopting appropriate<br />
credit control policies and procedures and therefore do not expect to incur material financial losses. In addition,<br />
the Company and its subsidiaries do not have high concentration of credit risk since they have a large customer<br />
base. The maximum exposure to credit risk is limited to the carrying amounts of receivables, loans and other<br />
receivables as stated in the balance sheet.<br />
Interest rate risk<br />
The Company and its subsidiariesû exposure to interest rate risk relates primarily to their cash at banks,<br />
bank overdrafts, trust receipts, short-term and long-term borrowings, and liabilities under finance lease agreements.<br />
However, since most of the Company and its subsidiariesû financial assets and liabilities bear floating interest rates<br />
or fixed interest rates which are close to the market rate, the interest rate risk is expected to be minimal.<br />
Significant financial assets and liabilities as at 31 December <strong>2010</strong> classified by type of interest rates are<br />
summarised in the table below, with those financial assets and liabilities that carry fixed interest rates further<br />
classified based on the maturity date.<br />
Consolidated financial statements<br />
Fixed interest rates<br />
Non-<br />
Within Over Floating interest<br />
1 year 1-5 years 5 years interest rate bearing Total Interest rate<br />
(Million Baht)<br />
(% p.a.)<br />
Financial Assets<br />
Cash and cash equivalents - - - 146.2 1.1 147.3 0.25, 0.90, 1.05<br />
Short-term investments in<br />
trading securities - - - - 102.1 102.1 -<br />
Fixed deposit 100.7 - - - - 100.7 0.50<br />
Trade accounts receivable - net - - - - 2,963.8 2,963.8 -<br />
Amounts due from and<br />
advance to related parties - - - - 5.4 5.4 -<br />
Short-term loans to<br />
related parties - - - 9.0 - 9.0 Fixed deposit rate<br />
(3 months) +0.25<br />
Sales promotion<br />
receivables - net - - - - 21.5 21.5 -<br />
Other receivable - - - - 26.3 26.3 -<br />
Restricted bank deposits - - - 104.5 - 104.5 0.90, 0.75, 0.825<br />
100.7 - - 259.7 3,120.2 3,480.6<br />
104<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
Consolidated financial statements<br />
Fixed interest rates<br />
Non-<br />
Within Over Floating interest<br />
1 year 1-5 years 5 years interest rate bearing Total Interest rate<br />
(Million Baht)<br />
(% p.a.)<br />
Financial liabilities<br />
Bank overdrafts - - - 1.7 - 1.7 6.375<br />
Loans from banks 1,186.4 - - 12.2 - 1,198.6 2.83 -5.75<br />
Trust receipts<br />
- Baht 483.5 - - - - 483.5 2.70 - 4.25<br />
- US Dollars 650.7 - - - - 650.7 1.54 - 2.90<br />
Trade accounts payable - - - - 369.6 369.6 -<br />
Amounts due to and advance<br />
from related parties - - - - 3.5 3.5 -<br />
Short-term loans from<br />
unrelated party - - - 0.5 - 0.5 MLR+1<br />
Other payable - - - - 97.7 97.7 -<br />
Long-term loan from bank - - - 10.8 - 10.8 MLR-1.25<br />
Liabilities under finance 2.15, 4.59<br />
lease agreements - 6.1 - - - 6.1<br />
2,320.6 6.1 - 25.2 470.8 2,822.7<br />
Separate financial statements<br />
Fixed interest rates<br />
Non-<br />
Within Over Floating interest<br />
1 year 1-5 years 5 years interest rate bearing Total Interest rate<br />
(Million Baht)<br />
(% p.a.)<br />
Financial Assets<br />
Cash and cash equivalents - - - 37.5 0.9 38.4 0.25, 0.90, 1.05<br />
Short-term investments in<br />
trading securities - - - - 14.9 14.9 -<br />
Fixed deposit 100.7 - - - - 100.7 0.50<br />
Trade accounts receivable - net - - - - 2,605.5 2,605.5 -<br />
Amounts due from and<br />
advance to related parties - - - - 421.2 421.2 -<br />
Short-term loans to<br />
related party - - - 541.1 - 541.1 Cost of fund<br />
+ 0.25<br />
Sales promotion receivables<br />
- net - - - - 7.8 7.8 -<br />
Other receivable - - - - 4.2 4.2 -<br />
Restricted bank deposits - - - 102.9 - 102.9 0.90, 0.75, 0.825<br />
Investments - - - - 416.9 416.9 -<br />
100.7 - - 681.5 3,471.4 4,253.6<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 105
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Separate financial statements<br />
Fixed interest rates<br />
Non-<br />
Within Over Floating interest<br />
1 year 1-5 years 5 years interest rate bearing Total Interest rate<br />
(Million Baht)<br />
(% p.a.)<br />
Financial liabilities<br />
Bank overdrafts - - - 1.6 - 1.6 6.375<br />
Loans from banks 1,074.0 - - 12.2 - 1,086.2 2.83 - 5.75<br />
Trust receipts<br />
- Baht 483.5 - - - - 483.5 2.70 - 4.25<br />
- US Dollars 561.9 - - - - 561.9 1.54 - 2.90<br />
Trade accounts payable - - - - 913.6 913.6 -<br />
Amounts due to and advance<br />
from related parties - - - - 173.7 173.7 -<br />
Short-term loans from<br />
related parties - - - 106.6 - 106.6 Fixed deposit rate<br />
(3 months) + 0.25<br />
Other payable - - - - 66.1 66.1 -<br />
Long-term loan from bank - - - 10.8 - 10.8 MLR-1.25<br />
Liabilities under finance<br />
lease agreements 5.4 - - - - 5.4 4.59<br />
2,124.8 - - 131.2 1,153.4 3,409.4<br />
Foreign currency risk<br />
The Company and its subsidiariesû exposure to foreign currency risk arise mainly from trading transactions<br />
that are denominated in foreign currencies. The Company and its subsidiary seek to reduce this risk by entering<br />
into forward exchange contracts when it considers appropriate. Generally, the forward contracts mature within<br />
one year.<br />
The balances of financial assets and liabilities denominated in foreign currencies as at 31 December <strong>2010</strong><br />
are summarised below.<br />
Consolidated Separate Exchange rate as at<br />
Currency financial statements financial statements 31 December <strong>2010</strong><br />
(Million) (Million) (Baht per unit of foreign currency)<br />
Assets<br />
US dollars 24.23 6.17 30.0063<br />
Liabilities<br />
US dollars 23.85 9.99 30.2963<br />
Euro 0.01 - 40.2464<br />
The majority of the liabilities are due within one year.<br />
As at 31 December <strong>2010</strong>, the Company and its subsidiaries have the following outstanding forward<br />
exchange contracts and currency option contracts:<br />
106<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
Forward exchange contracts<br />
The Company and its subsidiaries in Thailand<br />
Consolidated Separate Forward<br />
Foreign currency financial statements financial statements Maturity date contracts rate<br />
(Million) (Million) (Baht per unit of<br />
foreign currency)<br />
Amount bought<br />
US dollars 2.98 2.94 January - July 2011 31.2794 - 32.0275<br />
Amount sold<br />
US dollars 15.25 6.83 February - July 2011 29.6750 - 32.2775<br />
Subsidiary in Malaysia<br />
Foreign currency Amount Maturity date Forward contracts rate<br />
(Million)<br />
(Malaysian ringgit per unit of<br />
foreign currency)<br />
Amount bought<br />
Us dollar 2.93 January - May 2011 3.1070 - 3.2140<br />
Currency option contracts<br />
currency Sold amount Strike rate Delivery date<br />
(Million) (Baht per unit of<br />
foreign currency)<br />
Sell put option US dollars 2.0 32.10 - 32.15 January 2011<br />
If, on the maturity date, the reference exchange rate is lower than strike rate, the Company is obligated to<br />
buy US dollars at strike rate.<br />
As at 31 December <strong>2010</strong>, fair value of sell put option contract is lower than trade date of Baht 3.95 million.<br />
35.2 Fair values of financial instruments<br />
Since the majority of the Company and its subsidiariesû financial instruments are short-term in nature, their<br />
fair value is not expected to be materially different from the amounts presented in the balance sheets.<br />
A fair value is the amount for which an asset can be exchanged or a liability settled between<br />
nowledgeable, willing parties in an armûs length transaction. The fair value is determined by reference to the<br />
market price of the financial instrument or by using an appropriate valuation technique, depending on the nature<br />
of the instrument.<br />
36. Capital management<br />
The primary objective of the Companyûs capital management is to ensure that it has an appropriate financial<br />
structure and preserves the ability to continue its business as a going concern.<br />
According to the balance sheet as at 31 December <strong>2010</strong>, Groupûs debt-to-equity ratio was 1.25:1 (2009: 1.60:1)<br />
and the Companyûs was 1.85:1 (2009: 2.10:1).<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 107
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
37. Subsequent events<br />
37.1 On 4 January 2011, I-Sport Co., Ltd., a subsidiary company, entered into an agreement with an overseas company<br />
to acquire a football broadcast license for a period of 3 years, commencing on 4 January 2011. The subsidiary<br />
company is obliged to comply with conditions as stated in the agreement and has commitments under the<br />
agreement amounting to USD 0.16 million.<br />
37.2 On 7 February 2011, the Company issued its plans for the transfer of the 3G mobile phone services business<br />
from the Company to I-<strong>Mobile</strong> Plus Co., Ltd. (formerly known as çI-<strong>Mobile</strong> Netplus Co., Ltd.é), a subsidiary<br />
company. With effect from 16 February 2011, the Company will transfer to this subsidiary company its rights and<br />
responsibilities with respect to the provision of 3G mobile services under a memorandum of understanding<br />
relating to the project for 3G mobile phone network services testing. In addition, the Company, its subsidiary<br />
company and TOT Public Company Limited will sign an agreement to transfer the rights and responsibilities under<br />
the above memorandum of understanding in the future.<br />
38. Reclassification<br />
Certain amounts in the financial statements for the year ended 31 December 2009 have been reclassified to<br />
conform to the current yearûs classification but with no effect to previously reported net income or shareholdersû equity.<br />
The reclassifications are as follows:<br />
(Unit: Baht)<br />
Consolidated financial statements Separate financial statements<br />
μ“¡∑’Ë ®—¥ª√–‡¿∑„À¡à As reclassified As previously As reclassified As previously<br />
reported<br />
reported<br />
Trade accounts payable - unrelated parties 678,748,579 669,679,794 - -<br />
Other current liabilities 248,366,490 256,084,528 142,073,091 140,722,344<br />
Other non-current liabilities 2,058,486 3,409,233 4,353,575 5,704,322<br />
39. Approval of financial statements<br />
These financial statements were authorised for issue by the Companyûs authorised directors on 23 February 2011.<br />
108<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
Audit Fee<br />
1. Audit Fee<br />
In <strong>2010</strong>, the Company and subsidiaries paid audit fee to the Companyûs auditor, Ernst & Young Office Limited,<br />
signed by Ms. Siriwan Suratepin amounting to Baht 3,080,000 and out of pocket expenses relating to audit work such<br />
as traveling expenses, photo copy expenses and others totaling Baht 186,534. In addition, the Companyûs subsidiaries<br />
in other countries paid audit fees to auditors, Ernst & Young Office Limited, in their countries.<br />
2. Non-Audit Fee<br />
2.1 Brain Source Co., Ltd., a 99.99% stake hold by the Company, paid professional fee to Ernst & Young Office Limited<br />
for the review of compliance with conditions stipulated in the investment promotion certificate for the period ended<br />
December 31, <strong>2010</strong> submitted to BOI totaling Baht 120,000.<br />
2.2 Take A Look Co., Ltd., <strong>Samart</strong> Multimedia Co., Ltd. holds a 66.67% stake, paid professional fee to Ernst & Young<br />
Office Limited for the completion of questionnaires provided for the preparation of consolidated financial<br />
statements of the other shareholder totaling Baht 40,000.<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 109
110<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong><br />
Directors and Management as of December 31, <strong>2010</strong><br />
Name-Surname / Position Age Education<br />
% of Working Experience last 5 years<br />
Relationship<br />
During Position Company<br />
1. Prof.Suphachai Phisitvanich 71 - Ph.D. honorary in Accounting, 0.075 - 2005 - Present Chairman of the Board of Directors <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- Chairman of the Board Thammasart University and Independent Director<br />
Independent Director - Master Degree in MBA, 2009 - Present Audit Committee Member <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- Audit Committee Member Ohio State University, U.S.A <strong>2010</strong> - Present Chairman of the Board of Directors Aira Capital Co., Ltd.<br />
- Bachelor degrees in Accounting and 2009 - Present Independent Director CP All Plc.<br />
Commerce,<br />
2007 - Present Chairman of the Board of Directors Aira Securities Plc.<br />
Thammasart University<br />
2006 - Present Chairman of the Board of Directors Sena Golden Sand Co., Ltd.<br />
- National Defence College Course 2003 - Present Chairman of the Board of Directors Matching Studio Plc.<br />
(Class 32),<br />
and Chairman of the Audit<br />
National Defence College of Thailand<br />
Committee<br />
- Director Certification Program (DCP), 1994 - Present Director, Chairman of the Audit Bangkok Expressway Plc.<br />
Thai Institute of Directors Association<br />
Committee and Chairman of the<br />
(IOD)<br />
Corporate Governance and<br />
Risk Management Committee<br />
2. Dr.Chotivid Chayavadhanangkur 64 - Doctorate of Ph.D. in Electrical - - 2009 - Present Chairman of the Audit Committee <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- Independent Director Engineering, University of Minnesota, 2003 - 2009 Audit Committee Member <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- Chairman of Audit USA 2003 - Present Independent Director <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
Committee - Master Degree in M.S. Electrical 2008 - Present Chairman of the Corporate <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- Chairman of the Corporate Engineering, University of Minnesota, Governance Committee<br />
Governance Committee USA 2005 - Present Nominating and Compensation <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- Nominating and - Bachelor Degree in Engineering Committee Member<br />
Compensation (1 st Class Honour), 2005 - Present Director Greens Spot Co., Ltd.<br />
Committee Member Chulalongkorn University 2005 - Present Director BITIC Co., Ltd.<br />
- Director Accreditation Program (DAP), 2003 - Present Chairman of the Board of Directors Bangkok Servex Co., Ltd.<br />
Thai Institute of Directors Association<br />
(IOD)<br />
Shareholding<br />
Directors and Management<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 111<br />
Name-Surname / Position Age Education<br />
% of Working Experience last 5 years<br />
Relationship<br />
During Position Company<br />
3. Mr. Kunthit Arunyakananda 45 - Mini MBA Certificate, Business - - 2009 - Present Chairman of the Nominating and <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- Independent Director Administration, Thammasat University Compensation Committee<br />
- Audit Committee Member - Bachelor Degree in Accounting, 2008 - 2009 Nominating and Compensation <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- Chairman of the Nominating The Rajamongkol Institute of Technology Committee Member<br />
and Compensation - Director Certification Program (DCP), 2003 - Present Independent Director and <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
Committee Thai Institute of Directors Association Audit Committee Member<br />
- Corporate Governance (IOD) 2008 -Present Corporate Governance <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
Committee Member<br />
Committee Member<br />
2005 -2008 Chairman of the Corporate <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
Governance Committee<br />
2001 - Present Director Sam Nak-Ngan A.M.C. Co., Ltd.<br />
4. Mr. Charoenrath Vilailuck 51 - Bachelor Degree in Electrical Engineering, - Mr. Watchaiûs 2005 - Present Director <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- Authorized Director The University of Newcastle, Australia and 2005 - 2006 Nominating and Compensation <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- National Defence Course for the Mr. Thanananûs Committee Member<br />
joint State-Private Sectors (Class 18), elder brother 2003 - 2005 Chairman of the Board of Directors <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
National Defence College of Thailand 1993 - Present Director <strong>Samart</strong> Corporation Plc<br />
- Director Certification Program (DCP) and 2008-Present Chairman of the Risk <strong>Samart</strong> Corporation Plc<br />
Director Accreditation Program (DAP),<br />
Management Committee<br />
Thai Institute of Directors Association 1995 - Present Executive Chairman & CEO <strong>Samart</strong> Corporation Plc<br />
(IOD) 2006 -2008 Vice Chairman of Risk <strong>Samart</strong> Corporation Plc<br />
Management Committee<br />
2005 - 2006 Nominating and Compensation <strong>Samart</strong> Corporation Plc.<br />
Committee Member<br />
2004 - 2006 Chairman of Risk Management <strong>Samart</strong> Corporation Plc.<br />
Committee<br />
1995 - Present Director <strong>Samart</strong> Telcom Plc.<br />
1993-Present Director Vilailuck International Holding<br />
Co., Ltd.<br />
Present Director Subsidiaries and Related<br />
Companies (as shown in The<br />
Position of Directors of the<br />
Company in Subsidiaries and<br />
Related Companies)<br />
Shareholding
112<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong><br />
Name-Surname / Position Age Education<br />
% of Working Experience last 5 years<br />
Relationship<br />
During Position Company<br />
5. Mr.Watchai Vilailuck 48 - Bachelor Degree in Accounting, 0.011 Mr Charoenrathûs 2003 - Present Director and Executive Chairman <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- Authorized Director Thammasat University younger brother & CEO<br />
- Executive Chairman - Certificate of Strategic Planning & and 2005 - Present Chairman of the Risk <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- Chairman of the Risk Implementation Program, Mr.Thanananûs Management Committee<br />
Management Committee University of Michigan Business School elder brother 2005 - 2006 Nominating and Compensation <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- Chief Executive Officer (Executive Education Center), USA Committee Member<br />
- Certificate of Management Program 1993 - Present Director <strong>Samart</strong> Corporation Plc.<br />
from United Kingdom 2004 - Present Chief Operating Member of <strong>Samart</strong> Corporation Plc.<br />
- National Defence Course for the Risk Management Committee<br />
joint State-Private Sectors (Class 21), 2000 - Present President <strong>Samart</strong> Corporation Plc.<br />
National Defence College of Thailand 2000 - Present Executive Chairman <strong>Samart</strong> Telcom Plc.<br />
- Leadership Program (Class 11), 1995 - Present Director <strong>Samart</strong> Telcom Plc.<br />
Capital Market Academy 1993- Present Director Vilailuck International Holding<br />
- Director Accreditation Program (DAP), Co., Ltd.<br />
Thai Institute of Directors Association Present Director Subsidiaries and Related<br />
(IOD)<br />
Companies (as shown in The<br />
Position of Directors of the<br />
Company in Subsidiaries and<br />
Related Companies)<br />
6. Mr.Thananan Vilailuck 44 - Master Degree in Engineering, - Mr. Charoenrathûs 2003 - Present Director and Executive Director <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- Authorized Director University of Florida, USA and 2006 - Present President <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- Executive Director - Bachelor Degree in Engineering, Mr. Watchaiûs 2005 - Present Risk Management <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- Risk Management Kasetsart University younger brother Committee Member<br />
Committee Member - Director Accreditation Program (DAP), 2003 - 2006 Deputy Chief Operating Officer- <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- President Thai Institute of Directors Association <strong>Mobile</strong> Business<br />
(IOD) 2007 - Present Executive Director <strong>Samart</strong> Corporation Plc.<br />
2006 - Present President of <strong>Mobile</strong> Business LOB <strong>Samart</strong> Corporation Plc.<br />
1993-Present Director Vilailuck International Holding<br />
Co., Ltd.<br />
Present Director Subsidiaries and Related<br />
Companies (as shown in The<br />
Position of Directors of the<br />
Company in Subsidiaries and<br />
Related Companies)<br />
Shareholding<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 113<br />
Name-Surname / Position Age Education<br />
% of Working Experience last 5 years<br />
Relationship<br />
During Position Company<br />
7. Mr. Jong Diloksombat 51 - Master Degree in System Science - - 2003 - Present Director, Executive Director and <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- Authorized Director University of Louisville, USA Chief Operating Officer<br />
- Executive Director - Bachelor Degree in Electrical Engineering, 2006 - 2008 Nominating and Compensation <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- Corporate Governance Chulalongkorn University Committee Member<br />
Committee Member - Certificate of Strategic Planning & 2005 - Present Corporate Governance Committee <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- Risk Management Implementation Program, Member and Risk Management<br />
Committee Member University of Michigan Business School Committee Member<br />
- Chief Operating Officer (Executive Education Center), USA 2004 - Present Risk Management <strong>Samart</strong> Corporation Plc.<br />
- Director Accreditation Program (DAP), Committee Member<br />
Thai Institute of Directors Association Present Director Subsidiaries and Related<br />
(IOD)<br />
Companies (as shown in The<br />
Position of Directors of the<br />
Company in Subsidiaries and<br />
Related Companies)<br />
8. Mr.Azwan Khan bin Osman 41 - Bachelor Degree in Electrical - - 2008 - Present Director <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
Khan Engineering (1 st Class Honours), 2008 - Present Director <strong>Samart</strong> Corporation Plc.<br />
- Director Imperial College of Science & Technology, 2008 - Present Group Chief Strategy Officer Axiata Group Berhad<br />
University of London, United Kingdom Present Director Subsidiaries and Related<br />
Companies of Axiata Group<br />
Berhad<br />
2005 - 2008 Head of Corporate Strategy Celcom (Malaysia) Berhad<br />
& Development<br />
2000 - 2005 Project Leader The Boston Consulting Group,<br />
Malaysia<br />
9. Mr.Reza bin Abdul Rahim 35 - MPhil in Finance, University of Cambridge, - - 2009 - Present Director and Nominating and <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- Director United Kingdom Compensation Committee Member<br />
- Nominating and - BSc Accounting and Finance (1 st Class 2009 - Present Director <strong>Samart</strong> Corporation Plc.<br />
Compensation Honours), London School of Economic 2009 - Present Head, Group Corporate Finance Axiata Group Berhad<br />
Committee Member and Political Science, United Kingdom 2004 - 2009 Group Financial Controller / Sapura Technology Berhad /<br />
Chief Financial Officer Sapura Holdings Sdn Bhd<br />
Shareholding
114<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong><br />
Name-Surname / Position Age Education<br />
% of Working Experience last 5 years<br />
Relationship<br />
During Position Company<br />
10. Miss Chullada Sapsarasin 46 - Mini MBA Certificate, - - 2007 - Present General Manager <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- General Manager Thammasat University 2003 - 2006 General Manager <strong>Samart</strong> <strong>Mobile</strong> Services Co., Ltd.<br />
- Bachelor Degree in Psychology<br />
Thammasat University<br />
11. Miss Supannee Thawinwang 44 - Bachelor Degree in Communication Arts, - - 2008 - Present VP- Marketing Integration <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- VP- Marketing Integration Bangkok University 2004 -2007 AVP - Marketing <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- Young Executive Development Program,<br />
Thammasat University<br />
Shareholding<br />
12. Mrs. Sumontip Srimek 51 - Master Degree in Business Administration, - - 2003 - Present VP - Account <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- VP- Account Kasetsart University 2002 -2003 VP - Account <strong>Samart</strong> Corporation Plc.<br />
- Bachelor Degree in Accounting,<br />
Chiang Mai University<br />
13. Mr. Adithep Nisamaneevong 42 - MBA Finance, Long Island University, USA - - 2007 - Present VP - Finance <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
- VP- Finance - Bachelor Degree in Business 2003 - 2006 AVP - Finance <strong>Samart</strong> I-<strong>Mobile</strong> Plc.<br />
Administration (Finance),<br />
Kasetsart University<br />
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 115<br />
The Position of Directors and Management of the Company in Subsidiaries and Related Companies as of December 31, <strong>2010</strong><br />
Director and Executive Director<br />
Company Subsidiaries Related Companies<br />
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<br />
Prof. Supachai Phisitvanich x, ///<br />
Dr. Chotivid Chayavadhanangkur /, ///<br />
Mr. Kunthit Arunyakananda /, ///<br />
Mr. Charoenrath Vilailuck / 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<br />
Mr. Watchai Vilailuck /, // / x / / x x x x / / x / // // / / / / / / / x / / / / / / / / / / / /<br />
Mr. Azwan Khan bin Osman Khan /<br />
Mr. Reza bin Abdul Rahim /<br />
Mr. Thananan Vialiluck /, // / / / / / / / / / / # / / / / /<br />
Mr. Jong Diloksombat /, // / / / / / / / / / / / / /<br />
Miss Chullada Sapsarasin #<br />
Miss Supannee Thawinwang #<br />
Mrs. Sumonthip Srimek #<br />
Mr. Adithep Nisamaneevong # /<br />
Remarks<br />
SIM<br />
SMS<br />
BUG<br />
IMI<br />
IMIT (2)<br />
SIMM (2)<br />
SIMI (2)<br />
SIMH (2)<br />
SIAM (1)<br />
TAL (1)<br />
I-Sport (1)<br />
BS<br />
IMP<br />
SC<br />
STC<br />
SCT<br />
OASIS<br />
SBS<br />
OTO<br />
SE<br />
PN<br />
SCS<br />
SIF<br />
SAET<br />
SR&D<br />
SI<br />
SEC<br />
CATS<br />
KPP<br />
CS<br />
CIO<br />
TTN<br />
VIH<br />
STW<br />
SIH<br />
SRT<br />
OTOPRO<br />
1) x = Chairman / = Director // = Executive Director /// = Audit Committee/Independent Director # = Management<br />
2) Consist of:<br />
1. SIM = <strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited 2. SMS = <strong>Samart</strong> <strong>Mobile</strong> Services Co., Ltd. 3. BUG = <strong>Samart</strong> Multimedia Co., Ltd. 4. IMI = I-<strong>Mobile</strong> International Co., Ltd.<br />
5. IMIT = I-<strong>Mobile</strong> Inter trade Co., Ltd. 6. SIMM = <strong>Samart</strong> I-<strong>Mobile</strong> (Malaysia) Sdn. Bhd.. 7. SIMI = PT. <strong>Samart</strong> I-<strong>Mobile</strong> Indonesia 8. SIMH = <strong>Samart</strong> I-<strong>Mobile</strong> (Hong Kong) Co., Ltd.<br />
9. SIAM = <strong>Samart</strong> Interactive Media Co., Ltd. 10. TAL = Take A Look Co., Ltd. 11. I-SPORT = I-Sport Co., Ltd. 12. BS = Brain Source Co., Ltd.<br />
13. IMP = I-<strong>Mobile</strong> Plus Co., Ltd. 14. SC = <strong>Samart</strong> Corporation Public Company Limited 15. STC = <strong>Samart</strong> Telcoms Public Company Limited 16. SCT = <strong>Samart</strong> Comtech Co., Ltd.<br />
17. OASIS = OASIS Consulting Co., Ltd. 18. SBS = <strong>Samart</strong> Broadband Services Co., Ltd. 19. OTO = One to One Contacts Co., Ltd. 20. SE = <strong>Samart</strong> Engineering Co., Ltd.<br />
21. PN = Posnet Co., Ltd. 22. SCS = <strong>Samart</strong> Communication Service Co., Ltd. 23. SIF = <strong>Samart</strong> Infonet Co., Ltd. 24. SAET = <strong>Samart</strong> Ed-Tech Co., Ltd.<br />
25. SR&D = <strong>Samart</strong> Research and Development Co., Ltd. 26. SI = <strong>Samart</strong> International Co., Ltd. 27. SEC = Suvarnabhumi Environment Care Co., Ltd. 28. CATS = Cambodia Air Traffic Service Co., Ltd.<br />
29. KPP = Kampot Power Plant Co., Ltd. 30. CS = Cambodia <strong>Samart</strong> Co., Ltd. 31. CIO = Contact -In-One Co., Ltd. 32. TTN = Thai Trade Net Co., Ltd.<br />
33. VIH = Vilailuck International Holding Co., Ltd. 34. STW = Smarterware Co., Ltd. 35. SIH = <strong>Samart</strong> Inter Holding Co., Ltd. 36. SRT = <strong>Samart</strong> Raditech Co., Ltd.<br />
37. OTOPRO = One To One Professional Co., Ltd.<br />
3)<br />
(1)<br />
Direct held by <strong>Samart</strong> Multimedia Co., Ltd<br />
(2)<br />
Direct held by I-<strong>Mobile</strong> International Co., Ltd
<strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Board of Directors and Committees as of December 31, <strong>2010</strong><br />
Directors / Committeesû Members Board of Executive Audit Risk Corporate Nominating<br />
Directors Committee Committee Management Governance and<br />
Committee Committee Compensation<br />
Committee<br />
1. Prof. Suphachai Phisitvanich x /<br />
2. Dr. Chotivid Chayavadhanangkur / x x /<br />
3. Mr. Kunthit Arunyakananda / / / x<br />
4. Mr. Charoenrath Vilailuck /<br />
5. Mr. Watchai Vilailuck / x x<br />
6. Mr. Thananan Vialiluck / / /<br />
7. Mr. Jong Diloksombat / / / /<br />
8. Mr. Azwan Khan bin Osman Khan /<br />
9. Mr. Reza bin Abdul Rahim / /<br />
10. Mr. Sirichai Rasameechan / /<br />
11. Mr. Pairote Varophas /<br />
12. Mr. Adithep Nisamaneevong /<br />
13. Mr. Teerawut Kreepanich /<br />
Remarks x = Chairman / = Director<br />
116<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>
General Information<br />
Name : <strong>Samart</strong> I-<strong>Mobile</strong> Public Company Limited<br />
Location of Headquarters : 99/3 Moo 4, 33 rd Floor, Software Park Building,<br />
Chaengwattana Road, Klong Gluar, Pak-kred,<br />
Nonthaburi 11120<br />
Registered Capital : Baht 444,000,000 divided into 4,440,000,000 ordinary shares,<br />
Baht 0.10 per share.<br />
Issued and paid up Capital : Baht 430,130,000, divided into 4,301,300,000 ordinary shares,<br />
Baht 0.10 per share.<br />
Registration No : 0107546000318<br />
Website : www.i-mobilephone.com<br />
Telephone No : 0-2502-6000<br />
Fax No : 0-2502-6870<br />
References<br />
Company Registrar : Thailand Securities Depository Co., Ltd.<br />
2/7 Moo 4, Capital Market Academy Building<br />
The Stock Exchange of Thailand, 2 nd Floor,<br />
North Park, Tung-Song-Hong, Laksi,<br />
Bangkok 10210<br />
Tel. 02-596-9000<br />
Fax. 02-832-4994-6<br />
Auditor : Ms. Siriwan Suratepin<br />
Certified Public Accountant C.P.A. License No.4604<br />
Ernst & Young Office Limited<br />
33 rd Floor, Lake Rajada Office Complex<br />
193/136-137 Rajadapisek Road, Klongtoey<br />
Bangkok 10110<br />
Tel. 02-264-0777<br />
Fax. 02-264-0789-90<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> 117
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