DEM 6 million (Baht 20.44 - Baht 21.40/DEM) - 122 - - 2,338 1,895 2,186 1,891 15 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 to 2 years and 3 months. The amounts to be received and contractual exchange rates of the outstanding contracts are: Consolidated Company 30 June 31 December 30 June 31 December 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht US$ 50 million (Baht 38.28 - Baht 38.42/US$) - 1,864 - 1,864 On 7 April 2000, the Company shortened all outstanding principal only swaps amounting to USD 39 million by making early repayments of foreign loans and incurring a penalty of Baht 43 million. Net fair values The net fair values of the derivative financial instruments at 30 June 2000 are: Consolidated Company Million Baht Million Baht Favourable forward foreign exchange contracts 4 5 Unfavourable forward foreign exchange contracts (9) (9) Net (5) (4) 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. 16 Commitments - As at 30 June 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 2,683 2,683 US Dollars 11 11 Japanese Yen 1,547 1,547 Deutsche Marks 1 1 Euro 2 2 Property and equipment Thai Baht 7 7 - The Group has commitments under letters of credit with overseas suppliers amounting to approximately Baht 98 million on a consolidated basis and nil balance on a company basis. - The Company has entered into service agreements for maintenance hardware and software mobile phone networks as follows : Company Million Maintenance hardware US Dollars 7 Euro 2 - 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 30 June 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 153 121 - Related companies 178 152 - within 2 to 5 years - Third parties 426 407 - Related companies 272 272 - over 5 years - Third parties 11 11 - Related companies 468 468 - 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 33 million within 2000. 16 Commitments (continued) - 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. 17 Bank guarantees As at 30 June 2000, 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 4,665 million on a consolidated basis and Baht 4,560 million on a company basis. 18 Acquisition In February 1999 the Group acquired an additional 40% of share capital of Advanced Paging Co., Ltd. Consolidated 1999 Million Baht Purchase consideration 949 Fair value of net assets acquired (418) Positive goodwill 531 No fair value adjustments were made to the book value of net assets acquired. The Group's management is of the opinion that the book value approximated fair value at the date of acquisition. The book value of assets and liabilities acquired on the additional acquisition of Advanced Paging Co., Ltd. were as follows: Million Baht Cash on hand and at banks 43 Short-term investments 220 Trade accounts receivable, net 130 Amounts due from related companies 12 Inventories, net 43 Other current assets 54 Equipment, net 515 Other assets 360 Trade accounts payable (25) Amounts due to related companies (5) Deposits from customers (56) Accrued expenses (117) Other current liabilities (129) Fair value of net assets 1,045 Interest acquired 40% Fair value of net assets acquired 418 19 Related company transactions During the period, the Group has entered into a number of transactions with related companies. The terms of such transactions are negotiated on an arms length market value basis in the ordinary course of business and according to normal trade conditions. On 19 February 1999, Shin Corporations Public Co., Ltd. ceased to hold in excess of 50% of the share capital of the Company. Therefore, Shin Corporations Public Co., Ltd., ceased to be treated as the parent company in the first quarter ended 31 March 1999. Significant related company transactions are summarised as follows: a) Sales of goods and services For the three-month periods ended 30 June Consolidated Company 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Service income Subsidiary Advanced Wireless Marketing Co., Ltd. - - 4 3 - - 4 3 Related companies Singapore Telecom Mobile Pte Ltd. 39 - 39 - Others 6 2 1 2 45 2 40 2 Total service income 45 2 44 5 Sales of prepaid cards Subsidiary Advanced Wireless Marketing Co., Ltd. - - 199 - For the six-month periods ended 30 June Consolidated Company 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Service income Subsidiary Advanced Wireless Marketing Co., Ltd. - - 7 6 - - 7 6 Related companies Singapore Telecom Mobile Pte Ltd. 79 - 79 - Others 8 4 2 4 87 4 81 4 Total service income 87 4 88 10 Sales of prepaid cards Subsidiary Advanced Wireless Marketing Co., Ltd. - - 281 - 19 Related company transactions (continued) b) Purchases of services For the three-month periods ended 30 June Consolidated Company 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Rental and other service expenses Subsidiaries Advanced Wireless Marketing Co., Ltd. - - 14 11 Others - - 5 1 - - 19 12 Related companies Shin Satellite Public Co., Ltd. 21 22 21 22 Shin Corporations Public Co., Ltd. 1 - 1 - SC Asset Co., Ltd. 15 7 9 7 SC Office Park Co., Ltd. 9 5 7 5 Tele Info Media Co., Ltd. 7 4 7 4 Upcountry Land Co., Ltd. 21 21 21 21 OAI Leasing Co., Ltd. 10 6 9 6 OAI Asset Co., Ltd. 34 26 30 26 Others 26 51 11 9 144 142 116 100 Total rental and other service expenses 144 142 135 112 Advertising expenses Related companies SC Matchbox Co., Ltd. 143 101 28 17 Total advertising expenses 143 101 28 17 Consulting and management fees Related companies Shin Corporations Public Co., Ltd. 15 19 15 19 I.T.Applications and Services Co., Ltd. 2 - 2 - Shinawatra Information Technology Co., Ltd. 4 2 4 2 Total consulting and management fees 21 21 21 21 19 Related company transactions (continued) b) Purchases of services (continued) For the three-month periods ended 30 June Consolidated Company 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Interest expenses Related companies Shin Corporations Public Co., Ltd. - 13 - 13 A major shareholder of related companies 7 8 7 8 Directors of a related company and the Company - 1 - 1 Total interest expenses 7 22 7 22 For the six-month periods ended 30 June Consolidated Company 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Rental and other service expenses Subsidiaries Advanced Wireless Marketing Co., Ltd. - - 22 36 Others - - 9 2 - - 31 38 Related companies Shin Satellite Public Co., Ltd. 43 70 43 70 Shin Corporations Public Co., Ltd. 1 4 1 4 SC Asset Co., Ltd. 27 11 17 11 SC Office Park Co., Ltd. 17 7 13 7 Tele Info Media Co., Ltd. 15 7 15 7 Upcountry Land Co., Ltd. 44 42 44 42 OAI Leasing Co., Ltd. 19 13 17 13 OAI Asset Co., Ltd. 69 51 57 51 Others 41 78 21 17 276 283 228 222 Total rental and other service expenses 276 283 259 260 Advertising expenses Related companies SC Matchbox Co., Ltd. 261 163 41 17 Others 4 - 1 - Total advertising expenses 265 163 42 17 19 Related company transactions (continued) b) Purchases of services (continued) For the six-month periods ended 30 June Consolidated Company 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Consulting and management fees Related companies Shin Corporations Public Co., Ltd. 40 38 40 38 I.T.Applications and Services Co., Ltd. 2 - 2 - Shinawatra Information Technology Co., Ltd. 4 4 4 4 Total consulting and management fees 46 42 46 42 Interest expenses Subsidiaries - - 8 - Related companies Shin Corporations Public Co., Ltd. - 14 - 14 A major shareholder of related companies 18 46 18 46 Directors of a related company and the company - 1 - 1 18 61 18 61 Total interest expenses 18 61 26 61 c) Purchases of property and equipment and computer software For the three-month periods ended 30 June Consolidated Company 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Subsidiaries - - 1 - Related companies 9 3 1 3 9 3 2 3 19 Related company transactions (continued) c) Purchases of property and equipment and computer software (continued) For the six-month periods ended 30 June Consolidated Company 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Subsidiaries - - 1 - Related companies 9 4 1 4 9 4 2 4 d) Purchases of cost of mobile phone and pager service networks and Datanet tools and equipment under concession agreements For the six-month periods ended 30 June Consolidated Company 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Related company Shinawatra Information Technology Co., Ltd. - 1 - 1 e) Outstanding balance arising from sales/purchases of goods/services and loans from related companies Consolidated Company 30 June 31 December 30 June 31 December 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Trade accounts receivable Subsidiary Advanced Wireless Marketing Co., Ltd. - - 130 47 Related companies Singapore Telecom Mobile Pte Ltd. 29 37 29 37 Others 7 5 - - 36 42 29 37 Total trade accounts receivable 36 42 159 84 Amounts due from related companies Subsidiaries - - 1 2 Related companies 3 1 - - Total amounts due from related companies 3 1 1 2 19 Related company transactions (continued) e) Outstanding balance arising from sales/purchases of goods/services and loans from related companies (continued) Consolidated Company 30 June 31 December 30 June 31 December 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Trade accounts payable Subsidiaries - - - 2 Related companies Tele Info Media Co., Ltd. - 4 - 4 Singapore Telecom Mobile Pte Ltd. 2 2 2 2 Shin Satellite Public Co., Ltd. 1 1 1 1 Others 2 6 - 1 5 13 3 8 Total trade accounts payable 5 13 3 10 Amounts due to and loans from related companies Amounts due to related companies Subsidiaries Advanced Paging Co., Ltd. - - 8 11 (more)