Page 48 - 56-1 One Report 2022 EN

Part 1 Business Operation and Operating Performance

are not the Satellites under and/or related to the Agreement. As a result, the Company is not obligated to comply
with the claim by the Ministry in the mentioned dispute.

(D) The Ministry of Digital Economy and Society’s demand regarding Thaicom 5
With regards to the incident that occurred to Thaicom 5, which required the satellite to be deorbited on 26 February
2020, by being operated beyond its design life. Subsequently, in November 2020, the Company received the Notice
of Arbitration including detail of the proposed dispute of Thaicom 5 from the Ministry of Digital Economy and Society
(the “Ministry”), which requested that:
The Company has to build and deliver the replacement satellite of Thaicom 5. In case, the replacement is not built
and delivered to the Ministry, the Company has to pay: (i) the money equivalent to the value of the satellite in the
amount of Baht 7,790,097,900.- with an interest of 7.5% per year from 30 October 2020; (ii) a fine in the amount of
Baht 4,980,000.- (calculated from 25 February 2020 to 30 October 2020) with 7.5% interest per year; and (iii) a fine
from 1 November 2020 until the replacement is delivered or the compensation is paid.

The Concession has set the terms regarding the work plan and principles for contract implementation which
reflected the plan which had been proposed by the Company and approved by the Ministry. The focus was on the
continuity of satellite service throughout the term of the Concession. The work plan, which forms part of the
Concession, states that the Company will build 2 generations of satellites, with a total of 4 satellites. Each generation
consists of a primary satellite and a backup satellite, which, once launched into orbit, the Company has to transfer
ownership to the Ministry. When the Concession expires, the Ministry will have the right to manage satellites that
have not reached their operational life. In carrying out the contract, the Company has built and transferred the
ownership of a total of 6 satellites to the government. With regards to the incident that occurred to Thaicom 5, which
required the satellite to be deorbited, the Ministry was aware of the design life of Thaicom 5 at the time of the
approval for launch, and when the Thaicom 5 incident occurred, Thaicom 5 had already operated beyond its design
life, and had to be deorbited. The Company had already consulted with the Ministry and the NBTC in advance,
notified all parties concerned and sought approval before the deorbit. Furthermore, the Company has compensated
the Ministry by submitting the revenue share in respect of customers affected by the Thaicom 5 incident and by
negotiating with the insurer in order to obtain compensation for the Ministry. Currently, Thaicom 4 and Thaicom 6
are continuously providing services until the end of the Concession and the Ministry will have the right to manage
these satellites thereafter, all in accordance with the terms of the Concession.
The Company is confident that the Company has been complying with the Concession Agreement. In this regard,
the Company will proceed the defense statement according to the arbitration process. Further, the arbitrator has
not yet been appointed. Therefore, the Company does not have any duties to comply with any of the request made
by the Ministry until an award is rendered.

Social risks
1. Risk of human rights violation

The Company considers that there may be complaints or prosecution due to human rights violations of employees
and partners, which will affect its image and reputation, business operation, and income. The Company periodically
conducts a risk assessment for human rights in the value chain based on Human Rights Due Diligence (HRDD),
which covers risks to human rights of permanent employees, temporary employees, and suppliers.

For permanent and temporary employees, the Company assesses relevant issues, such as employment and
employment contract; acknowledgment of company’s policies and conditions in the employment contract; the
amount of remuneration not less than stipulated in related laws; workplace environment and safety; hygienic toilet,

Part 1 page 34
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