Expiring beyond one year 840.00 2,112.80 485.00 1,842.80 4,682.13 4,749.56 4,327.13 4,479.56 The undrawn committed borrowing facilities have been arranged to support financing of the Group's and the Company's activities. The facilities expiring beyond one year are facilities subject to review at various dates. 21 Deposits from customers Consolidated Company 1999 1998 1999 1998 Restated Restated Million Baht Million Baht Million Baht Million Baht Deposits from customers Related companies 105.13 129.27 588.23 427.58 Third parties 3,345.48 2,953.97 3,283.58 2,872.83 Total deposits from customers 3,450.61 3,083.24 3,871.81 3,300.41 21 Deposits from customers (continued) Deposits from customers - related companies as at 31 December comprise: Consolidated Company 1999 1998 1999 1998 Restated Restated Million Baht Million Baht Million Baht Million Baht Parent company - 129.27 - 129.27 Subsidiary - - 483.10 - Other related company 105.13 - 105.13 298.31 Total deposits from customers - related companies 105.13 129.27 588.23 427.58 22 Share capital and premium Number of Share Share Total Shares capital premium Million Million Baht Million Baht Million Baht 1 January 1998 234 2,340.00 2,295.00 4,635.00 31 December 1998 234 2,340.00 2,295.00 4,635.00 1 January 1999 234 2,340.00 2,295.00 4,635.00 Issue of shares, registered on 19 February 1999 36 360.00 7,920.00 8,280.00 31 December 1999 270 2,700.00 10,215.00 12,915.00 At the extraordinary meeting of the Company's shareholders held on 10 February 1999, the shareholders passed a resolution to approve the issuance of 36,000,000 ordinary shares to sell specifically to Singapore Telecom International at Baht 230 per share. The issuance of the new shares was registered with the Ministry of Commerce on 19 February 1999. 23 Legal reserve Consolidated Company 1999 1998 1999 1998 Restated Restated Million Baht Million Baht Million Baht Million Baht Beginning balance 500.00 500.00 500.00 500.00 Appropriation during the year - - - - Ending balance 500.00 500.00 500.00 500.00 Under the Public Companies Act, the Company is required to set aside as a statutory reserve at least 5 percent of its net income after accumulated deficit brought forward (if any) until the reserve is not less than 10 percent of the registered capital. The reserve is non-distributable. 24 Minority interests Consolidated 1999 1998 Restated Million Baht Million Baht Beginning balance before adjustments 774.64 289.36 Adjustments (Note 3) Change in status of investment in associate to be investment in subsidiary before change in amortisation period for cost of Datanet tools and equipment under concession agreement - 293.39 Change in amortisation period for cost of Datanet tools and equipment underconcession agreement (32.15) (5.76) Beginning balance - as restated 742.49 576.99 Additions: The subsidiary has issued the additional ordinary shares to TOT (Note 1) - 107.52 Acquisition of investment in subsidiary (Note 38) 6.61 - Share of net profit in subsidiaries (before change in amortisation period for cost of Datanet tools and equipment under concession agreement) 19.26 109.02 Change in status of investment in associate to be investment in subsidiary - 41.98 Change in amortisation period for cost of Datanet tools and equipment under concession agreement - (26.39) Disposals of interests to the Company (609.40) (66.63) Ending balance 158.96 742.49 25 Other operating income Consolidated Company 1999 1998 1999 1998 Restated Restated Million Baht Million Baht Million Baht Million Baht Interest income 231.36 446.48 200.38 370.86 Gains on disposals of property and equipment 3.95 1.67 - 0.29 Others 423.72 121.29 306.29 111.52 Total other operating income 659.03 569.44 506.67 482.67 26 Cost of services and equipment rentals Included in cost of services and equipment rentals for the year ended 31 December 1998 was transmission expense for the prior years to 31 December 1997 charged from TOT in the amount of Baht 492.5 million. 27 Interest expenses Consolidated Company 1999 1998 1999 1998 Restated Restated Million Baht Million Baht Million Baht Million Baht Interest expenses - short-term and long-term loans 392.75 741.62 392.11 692.09 - finance leases 0.46 0.69 0.46 0.69 - short-term debentures 165.91 100.84 165.91 100.84 - long-term debentures 137.02 321.51 137.02 321.51 - others 22.15 52.20 22.15 52.20 Total interest expenses 718.29 1,216.86 717.65 1,167.33 28 Directors' remuneration During the year ended 31 December 1999 the remuneration of the directors amounted to Baht 5.06 million (1998 : Baht 0.72 million), which did not exceed amounts which had been approved by the annual general meetings of the shareholders of the Company and the subsidiaries. The directors' remuneration represents meeting fees and gratuities. 29 Operating income The following expenditures, classified by nature, have been charged in arriving at operating income: Consolidated Company 1999 1998 1999 1998 Restated Restated Million Baht Million Baht Million Baht Million Baht Depreciation on property and equipment (Note 11) 599.23 484.99 515.80 418.73 Amortisation of intangible assets - Cost of mobile phone and pager service networks and Datanet tools and equipment under concession agreements (Note 12) 3,716.63 3,170.26 3,537.66 3,012.87 - Positive goodwill (included in "Selling and administrative expenses") 95.37 36.60 - - - Write-down of negative goodwill (included in "Other operating income") (37.11) - - - - Deferred charges (included in "Selling and administrative expenses") 103.33 76.39 90.53 76.34 Staff costs 1,110.59 909.58 633.30 454.45 30 Income tax Consolidated Company 1999 1998 1999 1998 Restated Restated Million Baht Million Baht Million Baht Million Baht Income before tax 4,765.03 3,162.42 4,207.04 2,896.83 Less: Share of net profit in subsidiaries - - (987.57) (129.38) Operating income 4,765.03 3,162.42 3,219.47 2,767.45 Tax calculated at a tax rate of 30% 1,429.51 948.73 965.84 830.24 Expenses not deductible for tax purposes 566.20 658.47 491.14 620.08 Utilisation of previously unrecognised tax losses - (15.91) - - Income tax 1,995.71 1,591.29 1,456.98 1,450.32 31 Earnings per share Basic earnings per share is calculated by dividing the net income attributable to shareholders by the weighted average number of ordinary shares in issue during the year Consolidated Company 1999 1998 1999 1998 Restated Restated Million Baht Million Baht Million Baht Million Baht Net income attributable to shareholders 2,750.06 1,446.52 2,750.06 1,446.52 Weighted average number of ordinary shares in issue 265.17 234.00 265.17 234.00 Baht Baht Baht Baht Basic earnings per share 10.37 6.18 10.37 6.18 32 Dividend per share Dividends payable are not accounted for until they have been ratified at the annual general meeting. At the annual general meeting of the Company's shareholders held on 29 April 1998, the shareholders resolved to declare a dividend for the year ended 31 December 1997 of Baht 1.10 per share, totalling Baht 257.4 million. The dividend was distributed to the shareholders on 25 May 1998. 33 Provident fund The Company has established a contributory registered provident fund, in accordance with the Provident Fund Act B.E. 2530. The registered provident fund plan was approved by the Ministry of Finance on 23 July 1990 and subsequently amended the provident fund's name on 21 January 1993. Under the plan, the employees must contribute 3% - 7% of their basic salaries, to be matched by the Company. The Company appointed a fund manager to manage the fund in accordance with the terms and conditions prescribed in the Ministerial Regulation No. 2 (B.E. 2532) issued under the Provident Fund Act B.E. 2530. 34 Financial instruments The principal financial risks faced by the Group are interest rate risk and currency exchange risk. The Group borrows at both fixed and floating rates of interest to finance its operations. Purchases are mainly made in foreign currencies. The Group, in terms of approved policy limit of Shin Corporation Public Company Limited, enters into various types of foreign exchange contracts to hedge transaction risk both for short-term and long-term currency exposures. Short-term foreign currency exposures relate to trade imports, short-term foreign borrowings and interest flows on long-term borrowings. Long-term foreign currency exposure relates to long-term foreign borrowings. The currency exchange risks of the Group occurs in various currency combinations, but mostly in United States dollars because the Group involves in transactions in different countries. The Group hedging policy is to hedge currency risk, mostly based on the net exposure and the structure of the revenues. The Group focuses more on hedging when the revenues are received in local currency whereas it will do less when the revenues are received in foreign currency as such income can reduce risks from the foreign currency obligations. The management regularly analyses interest rate and currency exposures and re- evaluates forex management strategies. Trading for speculative purposes is prohibited. Objectives and significant terms and conditions To manage the risks arising from fluctuations in currency exchange and interest rates, the Group makes use of the following derivative financial instruments: 34 Financial instruments (continued) Interest rate swaps The Group has entered into interest rate swap contracts that entitle it to obtain interest at floating rates on notional principal amounts and is obliged to pay interest at fixed rates on the same amounts. The interest rate swaps allow the Group to protect fluctuations of floating interest rates in the future. Under interest rate swaps, the Group agrees with other parties to exchange, at specified intervals, the difference between fixed rates and floating rates calculated by reference to the agreed notional principal amounts. At 31 December 1999 the fixed interest rates vary from 5.43% to 5.94% (1998: 5.43% to 6.34%) and the floating rates are linked to LIBOR. The remaining terms and notional principal amounts of the outstanding interest rate swap contracts at 31 December were: Consolidated Company 1999 1998 1999 1998 Restated Restated Million Baht Million Baht Million Baht Million Baht Not later than 1 year 649.06 2,530.91 649.06 2,530.91 Later than 1 year and not later than 5 years 1,407.21 2,915.37 1,407.21 2,915.37 2,056.27 5,446.28 2,056.27 5,446.28 Forward foreign exchange contracts Forward foreign exchange contracts are entered into to manage exposure of fluctuations in foreign currency exchange rates on specific transactions. At 31 December 1999 the settlement dates on open forward contracts ranged between 3 months and 9 months (1998 : 1 month to 1 year). The amounts to be received and contractual exchange rates of the outstanding contracts were: Consolidated Company 1999 1998 1999 1998 Restated Restated Million Baht Million Baht Million Baht Million Baht USD 47.49 million (Baht 37.21 - Baht 39.35/USD) 1,788.03 - 1,788.03 - USD 74.79 million (Baht 37.35 - Baht 43.15/USD) - 3,144.23 - 3,144.23 DEM 6.36 million (Baht 20.44 - Baht 21.40/DEM) 135.85 - - - DEM 6.19 million (Baht 21.40/DEM) - - 132.38 - 1,923.88 3,144.23 1,920.41 3,144.23 34 Financial instruments (continued) Principal only swaps Principal only swap contracts are entered into to manage exposure of fluctuations in foreign currency exchange rates on specific transactions. At 31 December 1999 the settlement dates on open principal only swap contracts ranged between 9 months and 2 years and 3 months (1998 : 3 months to 1 year and 3 months). The amounts to be received and contractual exchange rates of the outstanding contracts were: Consolidated Company 1999 1998 1999 1998 Restated Restated Million Baht Million Baht Million Baht Million Baht USD 49.96 million (Baht 38.28 - Baht 38.42/USD) 1,917.36 - 1,917.36 - USD 64.50 million (Baht 36.88 - Baht 39.59/USD) - 2,479.25 - 2,479.25 1,917.36 2,479.25 1,917.36 2,479.25 Cross currency swaps Cross currency swap contracts are entered into to manage exposure to fluctuations in foreign currency exchange rates and interest rates on specific transactions. At 31 December 1998 the settlement dates on open cross currency swap contracts ranged between 1 month and 2 years. The amounts to be received and contractual exchange rates and interest rates of the outstanding contracts were: Consolidated Company 1999 1998 1999 1998 Restated Restated Million Baht Million Baht Million Baht Million Baht USD 50.68 million (Baht 25.30 - Baht 25.93/USD and interest rates between 9.68% and 10.935%) - 1,300.73 - 1,300.73 - 1,300.73 - 1,300.73 During the first quarter of 1999 the Company had shortened some cross currency swaps due to foreign loan prepayment. 35 Commitments - As at 31 December 1999 the Group and the Company have commitments in respect of the construction and installation of mobile phone networks, which have not been completed, and purchases of property and equipment as follows: Consolidated Company Million Million Construction and installation of mobile phone networks Thai Baht 1,064.03 1,064.03 US Dollars 15.27 15.27 Japanese Yen 698.78 698.78 Deutsche Marks 17.06 17.06 Singapore Dollars 0.56 - Property and equipment Thai Baht 38.11 38.11 35 Commitments (continued) - The Group has commitments under letters of credit with overseas suppliers amounting to approximately Baht 59.45 million (1998: Baht 20.37 million) on a consolidated basis and Baht 20.36 million (1998: Nil) on a company basis. - The Group has entered into lease and related service agreements for office spaces, cars, and base stations for periods ranging from 4 months to 17 years with options to renew. As at 31 December 1999 the Group is committed to pay for rental and related services in respect of the agreements as follows: Consolidated Company Million Baht Million Baht Payment due - within 1 year - Third parties 171.86 154.36 - Related companies 100.56 143.24 - within 2 to 5 years - Third parties 148.09 137.10 - Related companies 257.56 257.37 - over 5 years - Third parties 0.01 0.07 - Related companies 470.06 470.10 - The Company's subsidiary has entered into a Data Broadcast via satellite agreement with TOT for a period of 5 years with option to renew. The subsidiary is committed to pay rental cost at Baht 35,000 per site per month for the master network and Baht 6,000 per site per month for the remote network as set out in the agreement. - The Company has entered into agreements with a related company under which the related company provides consulting and management services and other central services for a twelve-month period. The company is committed to pay for such services under these agreements amounting to approximately Baht 6.25 million per month (1998 : Baht 10.32 million per month). 36 Bank guarantees As at 31 December 1999, the Group has commitments with local banks relating to letters of guarantee issued by the banks in respect of custom duties, electricity use and other transactions in the ordinary course of business amounting to approximately Baht 4,448.93 million (1998 : Baht 4,136.16 million) on a consolidated basis and Baht 4,338.04 million (1998 : Baht 3,964.82 million) on a company basis. 37 Financial information by segment The business operations of the Group, as reflected in the consolidated financial statements, are classified into four major segments as follows: 1) the operations of a 900-MHz CELLULAR TELEPHONE SYSTEM network 2) the operations of a DIGITAL DISPLAY PAGING SYSTEM network, trading pagers, and providing pagers for rent 3) trading of mobile phones, rendering repair services for mobile phones and providing mobile phones for rent 4) the operations of data network 37 Financial information by segment (continued) Financial information by business segment for the years ended 31 December are shown as follows: Consolidated 1999 Mobile phone Pager sales & Mobile phone Datanet services services sales service Group Million Baht Million Baht Million Baht Million Baht Million Baht Revenue - services 16,687.92 1,356.78 112.48 170.59 18,327.77 Revenue - sales - 250.31 6,635.40 0.17 6,885.88 Total revenues 16,687.92 1,607.09 6,747.88 170.76 25,213.65 Segment result 5,937.78 1,015.63 2,274.30 55.11 9,282.82 Selling and administrative expenses (4,458.54) Operating income 4,824.28 Other income 427.67 Finance cost Interest income 231.36 Interest expenses (718.28) Income before tax 4,765.03 Income tax (1,995.71) Group income 2,769.32 (more)