Consolidated Company 31 March 31 December 31 March 31 December 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Current portion of long-term debentures 500 - 500 - 500 - 500 - Long-term debentures - Third parties 10,576 1,230 10,576 1,230 - Related companies (Note 18) 393 270 424 270 10,969 1,500 11,000 1,500 Total long-term debentures 11,469 1,500 11,500 1,500 As at 31 December 1999, long-term debentures represented 1.5 million units of Baht 1,000 each of unsubordinated and unsecured debentures, amounting to Baht 1,500 million. The long-term debentures bear interest at the fixed rate of 8.25% per annum throughout the terms of the debentures, payable on a semi-annual basis commencing from the issuing dates. The 0.5 million units and 1 million units of debentures will be redeemed on 18 February 2001 and 5 March 2002 respectively. On 20 March 2000, the Company issued additional 8 million units of Baht 1,000 each of unsubordinated, unsecured and amortised debentures, amounting to Baht 8,000 million. Such debentures bear interest at the fixed rate of 6.50% per annum throughout the terms of debentures, payable on a semi-annual basis commencing from the issuing date. The debentures will be redeemed by 4 equal installments, commencing the eighteenth month after the issuing date until 20 March 2003. On 31 March 2000, the Company issued additional 2 million units at Baht 1,000 each of unsubordinated and unsecured debentures, amounting to Baht 2,000 million. Such debentures bear interest at the fixed rate of 6.25% per annum throughout the terms of debentures, payable on a quarterly basis commencing from the issuing date. The debentures will be entirely redeemed on 31 March 2003. The maturity of long-term debentures are as follows: Consolidated Company 31 March 31 December 31 March 31 December 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Later than 1 year and not later than 2 years 4,979 1,500 5,000 1,500 Later than 2 years and not later than 5 years 5,990 - 6,000 - 10,969 1,500 11,000 1,500 9 Long-term debentures (continued) The carrying amounts and fair values of long-term debentures are as follows: Consolidated Company 31 March 2000 31 March 2000 Carrying amounts Fair values Carrying amounts Fair values Million Baht Million Baht Million Baht Million Baht Long-term debentures 11,469 11,553 11,500 11,580 The fair values are based on discounted cash flows using a discounted rate based upon the borrowing rate, which the directors expect would be available to the Group and the Company at the balance sheet date. 10 Long-term liabilities Consolidated Company 31 March 31 December 31 March 31 December 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Current portion of long-term liabilities Loans from finance companies 1,581 1,032 1,581 1,032 Obligations under finance leases 1 1 1 1 1,582 1,033 1,582 1,033 Long-term liabilities Loans from finance companies - 2,391 - 2,391 Obligations under finance leases 1 1 1 1 1 2,392 1 2,392 Total long-term liabilities 1,583 3,425 1,583 3,425 Weighted average effective interest rates: - Long-term loans from finance companies 7.14% 6.67% 7.14% 6.67% Long-term loans of the Group and the Company, which carry floating interest rate, are as follows: Consolidated Company 31 March 31 December 31 March 31 December 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Total long-term loans 1,581 3,423 1,581 3,423 10 Long-term liabilities (continued) The maturity of long-term liabilities (excluding obligations under finance leases) are as follows: Consolidated Company 31 March 31 December 31 March 31 December 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Later than 1 year and not later than 2 years - 1,032 - 1,032 Later than 2 years and not later than 5 years - 1,315 - 1,315 Later than 5 years - 44 - 44 - 2,391 - 2,391 Long-term loans represent unsecured loans from foreign finance companies equivalent to US$ 42 million (as at 31 December 1999: approximately US$ 91 million), carrying interest at rates between LIBOR (London Inter Bank Offer Rate) and LIBOR plus 0.19% per annum (as at 31 December 1999: LIBOR - LIBOR plus 1.25% per annum). The Company is required to comply with certain terms and conditions as specified in the loan agreements. The Company has in place certain forward exchange contracts, principal only swaps and interest rate swaps to cover these loans. In April 2000, the Company has been officially confirmed by the finance companies of relevant long-term loans amounting to approximately US$ 42 million for early repayments of such loans and incurring a penalty of Baht 1 million. The loans, which have been fully repaid on 7 April 2000, are classified as current portion of long-term liabilities under current liabilities in balance sheet. Borrowing facilities The Group and the Company have the following undrawn committed borrowing facilities: Consolidated Company 31 March 31 December 31 March 31 December 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Floating interest rate Expiring within one year 6,356 3,842 6,356 3,842 Expiring beyond one year 2,632 840 561 485 8,988 4,682 6,917 4,327 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. The carrying amounts and fair values of long-term liabilities (excluding obligations under finance leases) are as follows: Consolidated Company 31 March 2000 31 March 2000 Carrying amounts Fair values Carrying amounts Fair values Million Baht Million Baht Million Baht Million Baht Long-term liabilities 1,581 1,581 1,581 1,581 The fair values of long-term liabilities (excluding obligations under finance leases) approximate their carrying amounts as at 31 March 2000. 11 Share capital and premium Number of Share Share shares capital premium Total Million Million Baht Million Baht Million Baht 1 January 1999 234 2,340 2,295 4,635 Issue of shares, registered on 19 February 1999 36 360 7,920 8,280 31 December 1999 270 2,700 10,215 12,915 1 January 2000 270 2,700 10,215 12,915 31 March 2000 270 2,700 10,215 12,915 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 million ordinary shares to sell specifically to Singapore Telecom International Pte Ltd. at Baht 230 per share. The issuance of the new shares was registered with the Ministry of Commerce on 19 February 1999. 12 Minority interests Consolidated 31 March 2000 Million Baht Beginning balance 159 Share of net profit in subsidiaries to minority interests 1 Ending balance 160 13 Earnings per share Basic earnings per share is calculated by dividing the net income attributable to shareholders for the period by the weighted average number of paid-up ordinary shares in issue during the period. For the three-month periods ended 31 March Consolidated Company 2000 1999 2000 1999 Net income attributable to shareholders (Million Baht) 1,090 436 1,090 436 Weighted average number of paid-up ordinary shares in issue (Million shares) 270 250 270 250 Basic earnings per share (Baht) 4.04 1.74 4.04 1.74 14 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. Capial expenditures are mainly made in foreign currencies. The Group, in terms of approved policy limit of Shin Corporations Public Co., Ltd., 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 foreign 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: 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 March 2000, the fixed interest rates vary from 5.43% to 5.99% (as at 31 December 1999: 5.43% to 5.94%) and the floating rates are linked to LIBOR. The remaining terms and notional principal amounts of the outstanding interest rate swap contracts at 31 March 2000 and 31 December 1999 are: Consolidated Company 31 March 31 December 31 March 31 December 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Not later than 1 year 653 649 653 649 Later than 1 year and not later than 5 years 1,090 1,407 1,090 1,407 1,743 2,056 1,743 2,056 14 Financial instruments (continued) 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 March 2000, the settlement dates on open forward contracts ranged between 1 month and 9 months (as at 31 December 1999: 3 months to 9 months). The amounts to be paid and received and contractual exchange rates of the outstanding contracts are: Consolidated Company 31 March 31 December 31 March 31 December 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht The amounts to be paid US$ 40 million (Baht 37.775 - Baht 38.035/US$) 1,516 - 1,516 - 1,516 - 1,516 - The amounts to be received US$ 74 million (Baht 36.43 - Baht 38.48/US$) 2,768 - 2,439 - US$ 47 million (Baht 37.21 - Baht 39.35/US$) - 1,788 - 1,788 DEM 6 million (Baht 20.44 - Baht 21.40/DEM) - 136 - - DEM 6 million (Baht 21.40/DEM) - - - 132 DEM 5 million (Baht 21.445/DEM) 108 - 108 - JPY 100 million (Baht 0.35/JPY) 35 - 35 - FRF 2 million (Baht 5.57/FRF) 12 - - - EUR 1 million (Baht 36.265 - Baht 36.71/EUR) 52 - - - 2,975 1,924 2,582 1,920 Principal only swaps Principal only swap contracts are entered into to manage exposure of fluctuations in foreign currency exchange rates on specific transactions. At 31 March 2000, the settlement dates on open principal only swap contracts ranged within 1 month (as at 31 December 1999: 9 months to 2 years and 3 months). The amounts to be received and contractual exchange rates of the outstanding contracts are: Consolidated Company 31 March 31 December 31 March 31 December 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht US$ 39 million (Baht 38.03 - Baht 38.16/US$) 1,479 - 1,479 - US$ 50 million (Baht 38.28 - Baht 38.42/US$) - 1,917 - 1,917 1,479 1,917 1,479 1,917 On 7April 2000, the Company has shortened all of outstanding principal only swaps as of 31 March 2000 due to early repayments of foreign loans and incurring a penalty of Baht 43 million. 14 Financial instruments (continued) Net fair values The net fair values of the derivative financial instruments at 31 March 2000 are: Consolidated Company Million Baht Million Baht Favourable interest rate swap contracts 10 10 Favourable forward foreign exchange contracts 38 36 48 46 Unfavourable forward foreign exchange contracts (25) (25) Unfavourable principal only swap contracts (55) (55) (80) (80) Net (32) (34) The fair values of interest rate swap contracts, forward foreign exchange contracts and principal only swap contracts have been calculated using a quoted market price rate to terminate the contracts at the balance sheet date. 15 Commitments - As at 31 March 2000, 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 2,055 2,055 US Dollars 8 8 Japanese Yen 1,605 1,605 Deutsche Marks 5 5 Property and equipment Thai Baht 5 5 - The Group has commitments under letters of credit with overseas suppliers amounting to approximately Baht 137 million on a consolidated basis and Baht 22 million on a company basis. 15 Commitments (continued) - 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 March 2000, 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 124 84 - Related companies 227 179 - within 2 to 5 years - Third parties 256 234 - Related companies 272 272 - over 5 years - Third parties 5 5 - Related companies 492 492 - The Company has entered into agreements with a related company under which the related company provides satellite transponder services. The Company is committed to pay for the transponder services amounting to approximately Baht 22 million. - The Company's subsidiary has entered into a Data Broadcast via satellite agreement with TOT for a period of one year 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 4,000 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 4 million per month and plus the rate per events as prescribed in the agreements. - The Company has entered into agreements with a related company under which the related company provides computer system services and repair and maintenance services for software and hardware for a twelve-month period. The Company is committed to pay for such services under these agreements amounting to approximately Baht 1 million per month. 16 Bank guarantees (more)