Page 45 - 56-1 One Report 2022 EN

Part 1 Business Operation and Operating Performance

redundant subsystems and components on board. Thaicom maintains a contingency plan to minimize the adverse
effects on customers in the case of severe damage to the satellites. These plans include transferring as many
customers as possible to available transponders on the remaining Thaicom satellites and temporarily leasing other
satellite operators’ transponders for service continuity.
As the Company is aware of the potential risks to satellites in geostationary orbit, it also minimizes such risks by
fully insuring the Thaicom satellites.

Financial Risks

1. Currency exchange rate fluctuation
Thaicom offers both domestic and international services in which some portion of revenues is received in foreign
currency. Meanwhile, some expenses including loan financing are denominated in foreign currency. The risk of
currency exchange fluctuations could affect the Company’s financial statements as well as cash flows. However,
the Company has reduced some risk by netting off cash inflow and outflow as the natural currency hedge.
In addition, the Company is able to manage such risk by controlling the net exposure of foreign-currency-dominated
transactions by using several hedging approaches such as forward, options, and cross-currency, and interest rate
swap.

2. Credit risk
The Company has managed the credit risk by adopting the Credit Collection and Debt Management Policy. In
addition, the credit assessment has been made upon entrance of new customers, and periodically for existing
customers, together with close monitoring of collection to mitigate the risk arising from default payment from the
debtor.

Compliance Risks
1. Domestic Communications Satellite Operating Agreement

The Company provides satellite communications services under the Domestic Communications Satellite Operating
Agreement, dated 11 September 1991. The agreement was originally between the Ministry of Transport (currently
the matter is under the supervision of the Ministry of Digital Economy and Society) and Shinawatra Computer and
Communications Co., Ltd., now named Intouch Holdings Public Company Limited (Intouch Holdings Plc). Intouch
Holdings Plc is the major shareholder of the Company.

Risks related to allegations of breach of the terms of the Domestic Communications Satellite Operating Agreement
may be divided into 4 main issues and summarized as follows:

(A) Shareholding ratio
Per the Domestic Communications Satellite Operating Agreement, Clause 4, Intouch Holdings Plc has to establish
a new company (currently Thaicom Plc) to operate the satellite business under the agreement. This new company
has to have a registered capital of no less than Baht 1 billion, and Intouch Holdings Plc must not hold less than 51%
of the shares in this new Company. In 2005, the Company had to raise capital through a Public Offering (PO) of
new shares, so Intouch Holdings Plc’s proportional percentage of shareholding would have dropped below 51%.
Before issuing the new PO, the Company consulted with the Ministry of Information and Communications
Technology (currently the Ministry of Digital Economy and Society) and asked it to review the agreement and adjust
the shareholding ratio from at least 51% to at least 40%. Subsequently, the Ministry submitted the matter to the
Cabinet for consideration, but the Secretary General of the Cabinet notified the Ministry that the matter did not need

Part 1 page 31
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